Rémy Cointreau Annual Report 2023

FY2023 Annual Report · Rémy Cointreau

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RESIMAC GROUP LTD

2023
Annual
Report.

We announced
another year of strong
shareholder returns.

Over the last 12 months, we’ve made significant progress on our strategic objectives
amidst an extremely challenging macroeconomic environment. The resilience of the
business throughout these cyclical challenges is testament to the strength of the
Resimac brand in home loans and capital markets. Strategically, we continue to deliver
on our diversification agenda for Resimac Asset Finance, continue to lay the foundation
for scale on several fronts. Firstly, our cloud-based origination system recently went
live giving us the ability to expand our broker reach with a market-leading application
process. We’ve materially increased our funding capacity with a global bank, adding
to our extensive list of incumbent banking partners. And finally, we created an asset
finance back office team in Manila to drive cost efficiency as we scale originations
and AUM. We are encouraged by the growing demand for our commercial auto and
equipment and secured business loans as we head into FY24.

 Scott McWilliam

TABLE OF

CONTENTS

About Resimac

Chairman’s message

CEO’s message

Board of Directors

Sustainability report

Directors' report

Remuneration report

Financial statements

Notes to the consolidated financial statements

10 Directors' declaration

Independent auditor’s declaration

Independent auditor’s report

Shareholder information

Managing your shareholding

Corporate information

122

123

124

130

132

133

Welcome!Welcome!About
Resimac.

Est. 1985

Resimac Group Ltd ('Resimac Group') is a leading
non-bank lender and multi-channel distribution
business.

Its fully integrated business model comprises
originating, servicing and funding prime, non-
conforming residential mortgages and asset
finance products in Australia and New Zealand.

With a history dating back to 1985, Resimac
Group has a proven track record of growth
and stability. We are pleased to service over
55,000 customers with a portfolio of home loans
on balance sheet of over $13 billion, an asset
finance portfolio of over $600 million, and total
assets under management of over $14 billion.

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 $45 billion
in domestic and global markets since 1987.

Resimac Group has access to a diversified
funding platform with multiple warehouse lines
provided by domestic and offshore banks
for short-term funding in addition to a global
securitisation program to fund its assets longer
term.

Thanks to our flexible global capital markets
programme, we provide solutions to a wide
range of customers including the self-employed
and contractors, as well as customers with
previous credit impairments through our network
of over 12,000 broker partners.

Resimac Group 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 hold a Standard & Poor's
('S&P') "STRONG" Servicer Ranking, which was
reaffirmed in October 2022.

Over

$13b

Assets Under
Management

Issued in excess of

$45b

RMBS in Domestic
and Global markets

Home Loan
settlements

$3.7b

Asset Finance
settlements

$0.5b

Our
purpose.

Our
vision.

Our service
proposition.

To provide Australians
and New Zealanders with
better lending solutions,
because we believe
everyone deserves an
opportunity to achieve
their dreams and attain
their ambitions.

To be a customer-
obsessed company,
making home
ownership, financial
freedom and
business success
more accessible to
everyone.

 Origination: Wholesale, Third
Party, Direct and White Label
distribution channels.
 Servicing: Underwriting,

Loan Management, Arrears
Management.

 Funding: Global capital
markets programme.

Our values.

2021
2022
INSURANCE
AUSTRALIAN
MORTGAGE
BUSINESS
AWARDS
AWARDS
E X C E L L ENCE AWARDEE

Quality

Passion

Professionalism
& Integrity

Respect

Agility

Accountability

O
W
N

(cid:31)(cid:30)(cid:31)(cid:31)

PIER HO M E

E
L
B
A
RI

N - VA

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2023 ANNUAL REPORTRESIMAC GROUP LTD
Chairman’s
message.

Warren McLeland

In the financial year ended 30 June 2022, we reported
outstanding financial results of a normalised net profit
after tax of $104.4 million. This was approximately 5%
lower than FY 2021.

In FY23, things look different. We are reporting
normalised net profit after tax of $73.7 million (excl.
the impact of FV gains/losses on derivatives), or 29%
lower than FY22. For both years, our annual fully
franked dividend to shareholders has been 8.0 cents
per share.

How do we explain the difference in earnings?

FY23 was dominated by our macro-operating
conditions; namely inflation, rising interest
rates against a backdrop of near to full national
employment. Business and investment confidence
was at best subdued, and supply problems continued
across many sections of the economy. Much the
same scenario applied to the free world’s economies,
especially our major trading partners.

The flow on impact on the Australian housing industry
was profound. Housing construction figures were low,
the demand for housing finance across all states was
less than historical longer-term averages, and for most
of the Australian community, affordability remained
unreachable. If anything, it was worsening in impact
over the year to become a major constraint on activity,
requiring Government intervention.

For effectively the last 20 years, conflation from
these economic and market features was manifest in
the most aggressive price competition between the
major banks and the non-banks. This was mirrored
between banks as each fought vigorously to achieve
an incremental uplift in market share, exacerbating an
already intense price situation. Refinancing loans as
a proportion of total new business loans expanded to
unseen levels, eliminating effectively all profitability in
writing new prime loans for all non-banks, and by mid
financial year, essentially all banks, too.

Hope is on the horizon. A modicum of common sense
may finally be returning by the end of fourth quarter
of FY23. But there is still a long way to go before full
pricing rationality is restored.

Again, the pendulum is shifting. We are slowly and
somewhat tentatively re-entering the prime loan
segment, but on very specific criteria. Disappointingly,
the Australian Government and the RBA’s exclusive
focus on providing funding assistance to the
banking sector during the Covid-19 crisis essentially
amounted to creating an anti-competitive market by
discriminating against the non-bank segment of the
home lending market.

Non-banks “punch well above their weight”, especially
during tougher economic conditions, and to ignore the
non-banks again worked to the disadvantage of the
total market and to the economy.

Normalised NPAT
(excl. the impact of FV
gains/losses on derivatives)

$73.7m

Contrary to our lending activities in prime lending, our
business activity progressed handsomely in higher
risk lending products such as our specialist and non-
conforming loans. In particular, our asset financing
activity is growing well above system.

Measuring and monitoring our implementation of
strategy is a regular and priority item of discussion
and debate at Board and executive management
meetings. This also necessitates us to keep abreast of
technology and systems developments such as AI.

Notwithstanding the scale and severe impact the
macro-environment has placed on Resimac this year,
and the short-term outlook for an improvement is still
very clouded, your Board and executive management
team continue to have confidence in the future of
our industry, and in particular, your company and its
position in the industry. We constantly review our
medium-term business strategy and acknowledge the
prevailing very difficult conditions, but at the core, our
strategy remains the same.

In an attempt to “right size” for immediate, day to
day business conditions, we have implemented a
wide-ranging series of expense reductions, including
strengthening our Manila operations to assist in
balancing our overheads and to simultaneously gain
more operating leverage.

I emphasise to shareholders and investors that our
dedication to all dimensions of enterprise risk and
controls remains paramount, as is our conservative
philosophy to credit risk and proactive asset
management. Resimac maintains a capital light
business model and is therefore incessantly seeking
improvements in capital efficiency and incremental
changes to uplift our productivity.

To that end, our underlying strategy, about which I
have briefly mentioned and detailed in more depth
last year, is intact. However, we are prudently and
regularly making small changes to ensure strategy
is aligned, not just with the huge changes we have
been required to make in light of the economic and
industry, but also with careful respect to the obvious
extensions in time frames we have adopted to reach
specific objectives.

It is becoming an increasing and difficult challenge
to balance an incessant demand for systems
improvements to “stay in the game”, so to speak,
let alone attempt to maintain a superior level of
customer demand with respect to product and service
deliverability. Technology “eats” capital and seems to
possess an insatiable and irrepressible appetite!

Our workplace environment faces a huge task in
managing complexities and simultaneously minimising,
if not eliminating, vulnerabilities such as cybercrime.
But overarching every challenge is a level of
excitement as we achieve the small wins that ladder
up to bigger achievements.

I acknowledge again the sustained commitment and
contributions made daily throughout FY23 by my
Director colleagues and by our team of professionals
at Resimac, and especially the loyalty and hard work
invested each day by our senior leadership team
under the leadership of our CEO, Scott McWilliam.

Resimac emerged from the Covid-19 lockdowns in
remarkably good shape. Our long-standing banking
partners are continuing to admirably support us
across the globe, and we strive to never diminish our
efforts to sustain their confidence in our organisation.
We are delighted to receive their support as our
business diversification expands commensurately with
our capital and funding requirements. Our confidence
in asset finance business is high, and we expect the
activity to contribute significantly to group profitability
in the coming three years and of course beyond.

Warren J McLeland
Chairman

Our long-standing banking partners are continuing to
admirably support us across the globe, and we strive to
never diminish our efforts to sustain their confidence in
our organisation.

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2023 ANNUAL REPORTRESIMAC GROUP LTDCEO’s
message.

Scott McWilliam

Resimac rose to the challenge of a subdued lending
market in FY23. An aggressive tightening of monetary
policy (12 cash rate increases in 13 months) was the
dominant force in the macro environment. Higher
rates naturally impacted credit demand and had
consequences for lending activity.

As the home loan market softened, competition for
existing borrowers became fierce. The banks were
aggressive in the refinance market, offering upfront
cashbacks and discounting to entice borrowers. Yet
our people were able to identify opportunities and use
our strengths to find and serve borrowers who needed
help.

I am proud of the results we delivered during this
difficult time. In FY23, the business recorded a
normalised NPAT of $73.7 million (excluding the
impact of FV gains/losses on derivatives). I am equally
pleased we were able to deliver strong returns. Our
shareholders will receive a fully franked final dividend
of 4.0 cents per ordinary share. The full year dividend
is 8.0 cents per ordinary share.

The economic environment remains challenging for
household budgets. Inflation and borrowing costs
have increased financial pressures on many. We
continue to work with customers who need assistance
and offer hardship measures. Our people closely
monitor the progress of customers and I can report
that arrears stabilised in the second half of FY23. Our
loan book is robust and we remain conservatively
provisioned to guard against the possibility of any
losses.

In FY24, our priorities are to continue growing the
asset finance business, improve mortgage originations
and AUM, and the ongoing digitalisation of Resimac
Group. We see growth opportunities in targeting
segments of Prime, self-employed and investor
borrowers across home loans and asset finance.
Our strong broker relationships and diverse range
of products will be valuable in exploiting these
opportunities.

The asset finance business
keeps thriving after full-year
settlements rose to $482
million in FY23. We are
steadily growing our portfolio
and market reach as there is
plenty of appetite for our car
and equipment loans. A new
origination platform is in place
and is helping brokers do
business with us more easily.
We have all the building
blocks in place and look
forward to material growth in
originations in FY24.

Progress across the group will
be aided by key technology
platforms delivered in FY23.
A new loan management
platform for customers, a
new mortgage origination
platform and a new asset
finance origination platform
all improve operational
efficiency and customer
experience. These platforms
are important pillars of our
digital operating model. We
are continuing to refine these platforms and know they
will deliver greater benefit to customers and brokers
in future.

While investing in technology and our people has been
beneficial, we do so within a strong cost discipline.
We are targeting lower operating expenditure in FY24
and any future investment proposals will be assessed
against stringent criteria.

Underpinning all of our activity has been our global
funding program. Our funding activities in domestic
and offshore markets have provided the company
with a pleasing amount of capacity for our growth
aspirations.

Assets Under
Management

$13.8b

FY23 Dividend
Fully Franked

8.0c

FY23

Settlements

$4.2b

The asset finance
business keeps
thriving after full-
year settlements
rose to $482m
in FY23.

We have brought in new banking partners to support
our home loan and asset businesses. I am confident
that our funding capabilities will remain strong in
FY24.

To conclude, I want to express my gratitude to the
executive leadership team and general management
group for their dedication during this past year. I am
thankful for their ongoing support. I pay tribute to our
people throughout Australia, New Zealand and the
Philippines, whose hard work makes the company
what it is. We are indebted to the efforts of our

broker and business partners who help us provide
competitive and flexible lending solutions to Australian
and New Zealand borrowers. We are grateful to our
customers for choosing us to help them achieve their
dream of home ownership. Thank you, as well, to our
board members whose commitment and expertise has
been of immense benefit.

Scott McWilliam
CEO

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| 9

2023 ANNUAL REPORTRESIMAC GROUP LTDBoard of
Directors.

Resimac Group Ltd

Warren
McLeland

Susan
Hansen

Wayne
Spanner

Duncan
Saville

Caroline
Waldron

Peter
Fitzpatrick

Chairman
Non-Executive
Director

Warren is a former
stockbroker and investment
banker with over 35 years
of experience in domestic
and international financial
services. In addition, Warren
acts as an adviser in funds
management and business
strategy to companies
operating in the Asia Pacific
region. Warren is the former
Executive Chairman of
Resimac Limited.

Independent
Non-Executive
Director

Susan is a Chartered
Accountant and holds a
Bachelor of Commerce
degree and an MBA from
University of Cape Town.
Susan has 40 years of
experience including a
Big Four Accounting firm
and an investment bank
(financial analysis and
risk assessment). Susan
is a Principal of a financial
training organisation based
in New Zealand.

Independent
Non-Executive
Director

Wayne holds a Bachelor of
Commerce and Law degree
from The University of Cape
Town and a Masters of
Science degree from Oxford
University. Wayne has over
30 years experience as a
lawyer and over 15 years
senior executive experience
in an international law
firm. He was previously
the Managing Partner of
an international law firm
in Australia from 2012 to
2020. Wayne has extensive
experience in executive
management and corporate
governance at Board level.

Non-Executive
Director

Duncan is a Chartered
Accountant and an
experienced non-executive
Director. He is chairman of
ICM Limited, an international
fund manager. Duncan is
a fellow of the Institute of
Chartered Accountants
Australia and New Zealand,
the Australian Institute of
Company Directors and the
Financial Services Institute
of Australasia.

Independent
Non-Executive
Director

Caroline is a Non-Executive
Director and cross border
advisor with over 30+ years’
experience in regulated
consumer sectors such as
technology, retail and health.
Caroline brings to Resimac
commercial and governance
experience in many areas
including technology rollouts
and complex transactions.
Caroline holds an LLB
Hons (London), and has
been admitted to the Bars
of England and Wales,
Malaysia, Australia and New
Zealand.

Company
Secretary

Peter is a Chartered
Accountant who joined
Resimac Limited in 1987
and is responsible for the
Group’s company secretarial
function. He is a member of
the Governance Institute of
Australia and the Financial
Services Institute of
Australasia.

10 |
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2023 ANNUAL REPORTRESIMAC GROUP LTD2023 ANNUAL REPORT

Sustainability
report.

This report should be read in conjunction with the Corporate Governance Statement located on Resimac’s website
resimac.com.au and the Remuneration Report set out on pages 26 to 39 in this Annual Report.

Our ESG strategy supports our ability to achieve our overarching
business strategy in a manner that is sustainable and accountable.

At Resimac, we believe it is important that our people have ownership of our ESG initiatives. This is why we have a
people-run Environmental, Social and Governance Committee with representation from every team in the business
that reports to the CEO and Resimac Board.

Resimac’s overarching Environmental, Social and Governance (ESG) purpose is:

Passion: We understand that it is our duty to incorporate sustainability into the fabric of our organisation,

ensuring we can drive action that benefits our people, customers, business partners, investors, shareholders,
the community.

Inclusion: Everyone must play their part, however small, to achieve meaningful change in our communities,

countries and within our global network.

Accountability: It is our responsibility to ensure that the services we deliver are ethical and sustainable.

Our core values of quality, passion, agility, respect, accountability, professionalism, and integrity serve as the
foundation upon which our ESG purpose is built.

Incorporating core values into our ESG initiatives strengthens our commitment to responsible business practices,
sustainability, and positive social impact. They serve as the baseline for our journey towards a more sustainable and
equitable future for all.

Stakeholder
engagement &
consultation.

Understanding the priorities and passions of our various
stakeholders helps us align our ESG initiatives accordingly.
We do this by:

Customers:

Communities:

Our regulators:

 Customer care services
 Surveys
 Social media

 Volunteering
 Partnerships
 Fund raising / donations

 Industry forums / briefings
 Policy review and analysis
 Regulatory meetings

Business partners:

Employees:

Shareholders:

 Surveys
 Industry research
 Face to face discussions /

presentations

 Engagement survey
 Surveys
 ESG workshop
 DEI committee

 Investor meetings
 Regular financial reporting
 Market disclosures
 Social media

OFFERINGS
Delivering lending solutions that are diverse, flexible
and technology-enabled, with a service experience
that is continually improving and evolving to benefit
our customers and brokers.

PEOPLE
Via our people, who cultivate a sense of purpose
in delivering better outcomes for customers and
for each other.

CHANNELS
Using efficient and effective distribution
to chosen segments, at scale.

OPERATING MODEL
Supported by a fit-for-purpose and
technology-enabled operating model/s.

CAPITAL
With access to sufficient, diversified
and efficient funding and capital base.

STAKEHOLDER VALUE
Ultimately producing superior,
sustainable returns with a
'capital light' model.

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2023 ANNUAL REPORTRESIMAC GROUP LTD| SUSTAINABILITY REPORT

| SUSTAINABILITY REPORT

Environmental.

We understand the importance of supporting the
environment. We are committed to this by:

Offering our customers a green loan product. Our
green loan product was developed to encourage
our customers to join the movement towards a
cleaner and more sustainable future. The Green
Loan can be used to purchase and install energy-
efficient items for household improvements such
as battery packs and storage, electrical energy
storage, hot water heat pump or solar hot water
system, insulation and/or double-glazed windows
and solar panels.

Partnering with Carbon Positive Australia, which

conducts and funds biodiverse community
reforestation projects to assist with carbon setting.
For every settled loan, our customers have the
opportunity to select one of three community
projects that they would like to support on its
Plant Trees Australia funding platform. We then
contribute to that project on their behalf.

The projects are:

1. 'Pocket forest' in schools and communities

across Australia. This project funds
compressed forests in schools and community
parks. For schoolchildren, it offers multiple
learning opportunities and practical action
against climate change.

2. Biodiversity and ecosystem restoration in

VIC and WA. These projects engage with rural
and metro communities across Victoria and
Western Australia to restore degraded land and
increase biodiversity in agricultural landscapes.

3. Indigenous-led projects in WA and central
Australia. These projects focus on bringing
the community together, with initiatives that
support tree nursery establishment, seed
collection and tree planting.

Our focus.

The United Nations has embraced 17 Sustainable Development Goals (SDGs), and Resimac supports all of these
objectives. In alignment with the strategic direction set by the Resimac Board and management in 2022, our SDGs
of focus are:

As part of our commitment to
promote Good-Health and Well-
Being, we partner with Run-Rocket-
Run, an initiative focused on mental
and physical resilience through
endurance running. All funds raised
by Run-Rocket-Run go to support
Invictus Australia.

In addition, we partner with The
Station, a not-for-profit drop-in
centre in Sydney that helps adults
having difficulty obtaining and
sustaining accommodation with a
range of services, including a warm
meal for lunch and dinner every day
of the year. To help The Station,
we have a team of volunteers who
assist with food service twice
a week, and we have an annual
collection of personal and hygiene
products.

We believe quality education
should be accessible to everyone.
In line with this SDG, we have
connected with the GO Foundation
who support Aboriginal and
Torres Strait Islander students
through their scholarship program,
promoting social inclusion
through the provision of essential
items. Moving forward, we look
to deepen our connection by
providing our support to the
Foundation.

In addition, we are looking to
develop an internal graduate
program to support members
of the younger generation in
gaining invaluable insight and
work experience in the financial
industry – an initiative that could
help propel their careers.

Resimac is a proud partner
of Plant Trees Australia, an
online platform run by Carbon
Conscious Australia that helps
fund community tree-planting
projects. As part of the loan
settlements process, our
customers have an opportunity
to select a community tree-
planting project they would like
to support, and we contribute
funds to those projects on
their behalf.

Under our previously held
decade-long partnership
with Carbon Conscious, we
planted over 46,000 trees,
which offset nearly 5 million
kilograms of carbon from the
Earth’s atmosphere over their
lifetime.

OVER
46,000
TREES

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2023 ANNUAL REPORTRESIMAC GROUP LTDSocial.

As a leading non-bank lender, we embrace the

social responsibilities that impact our diverse range of

stakeholders, including our customers, employees, investors,

and the broader community. Our people are all passionate

about assisting and supporting the community by way of

volunteering; donations; and educating and building awareness.
Some of the community initiatives we support are:

Food Ladder

Sanctuary Housing

Run Rocket Run

We firmly believe that the success of our business is propelled by the
quality care our people provide to our customers, business partners,
and wider community. To support this, we provide an array of employee
benefits, including study support, flexible work hours, wellness
programs, an employee assistance program, salary continuance
insurance, options for purchased leave, a paid community day and
access to hybrid working arrangements promote a healthy work/life
balance.

Additionally, in a bid to foster an inclusive and diverse workforce,
we have recently launched a Women and Leadership program. This
initiative is dedicated to empowering women within our organisation,
cultivating their professional growth, and supporting the development
of female leadership.

Looking ahead, we are dedicated to further expanding our ESG
financing capabilities, encompassing green and sustainable funding
initiatives, to meet the evolving demands of our investors.

RESIMAC GROUP LTD

In 2021 we
funded our first
co-branded
hydroponic
greenhouse in a
Brisbane primary
school, and since
then, we have
funded another
two greenhouse
builds in Sydney
and Adelaide.

| SUSTAINABILITY REPORT

Governance.

Resimac has a strong governance framework in place.
This ensures all regulatory obligations are adhered
to in line with our Australian Financial Services, our
Australian Credit Licence requirements, and as an
ASX-listed entity.

We have several committees, policies, and procedures
in place to complement this framework. These
committees include:

• Risk & Compliance;
• Audit;
• Remuneration & Nominations;
• Asset & Liability;
• Credit;
• Technology, Digital & Innovation; and
• Diversity, Equity & Inclusion.

The policies we have in place to uphold the ethical
conduct of our people include but are not limited to:

Code of Ethics;

Modern Slavery Statement;

Conflicts of Interest;

Securities Trading Policy;

Breach & Incident Policy & Reporting;

Anti-Bribery & Corruption Policy;

Anti-Money Laundering Program; and

Whistleblower Policy.

In addition, our people undergo regular training in
compliance, risk and cyber security to ensure we
remain vigilant against emerging threats that may be
detrimental to our business.

Food Ladder.

Resimac is a proud sponsor of 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, it also creates employment and training
opportunities for adults and education outcomes for children. Food
Ladder systems have benefited over 31,500 individuals, with 6,000
getting a consistent, significant part of their diet from Food Ladder.
Furthermore, it has created 600 jobs. In 2021 we funded our first co-
branded hydroponic greenhouse in a Brisbane primary school, and since
then, we have funded another two greenhouse builds in Sydney and
Adelaide.

Philippines.

Each year, we partner with our staff in Manila to support a
community charity for their annual outreach program.

This year, the Resimac team chose the Dumagat tribe in Tanay,
Rizal Province. The tribespeople are the original inhabitants
of the forest, and rely on the natural environment to help their
livelihood. While they have preserved their culture, they have
faced several challenges – one being access to education. To
assist the Dumagat people, the Resimac team donated school
supplies, learning materials, a printer, shirts, slippers, toiletries,
a fan and mattress. The visit was a great lesson for the
Resimac team on the benefit of social responsibility.

16 |

| 17

2023 ANNUAL REPORTRESIMAC GROUP LTD| DIRECTORS' REPORT

| DIRECTORS' REPORT

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 2023. In order to comply with the provisions of
the Corporations Act 2001, the Directors’ Report is as follows:

Information about the Directors
Names and particulars of the Directors of the Company during or since the end of the financial year are:

Mr Warren McLeland
Non-Executive Director and Chairman
since February 2020

Mrs Susan Hansen
Independent Non-Executive Director
since October 2016

Warren is a former stockbroker and investment banker
with over 35 years of experience in domestic and
international financial services. In addition, Warren
acts as an adviser in funds management and business
strategy to companies operating in the Asia Pacific
region. Warren is the former Executive Chairman of
Resimac Limited.

Susan is a Chartered Accountant and holds a
Bachelor of Commerce degree and an MBA from
University of Cape Town. Susan has 40 years of
experience including a Big Four Accounting firm
and an investment bank (financial analysis and risk
assessment). Susan is a Principal of a financial training
organisation based in New Zealand.

Other listed Directorships (last three years):

• Chairman of Thorn Group Limited (since October

2019, Director since August 2019).

• Non-Executive Director of Utilico Emerging
Markets Limited (since September 2013).

in Bermuda (resigned February 2021).

Limited (resigned July 2022).

• Former non-executive Director of UIL Limited

(resigned September 2019).

Special responsibilities:

• Chair of the Audit Committee (since November

Special responsibilities:

2016).

• Chairman of Resimac Group Ltd (since February

• Member of the Remuneration and Nomination

2020).

Committee (since November 2016).

• Chairman of the Risk and Compliance Committee

• Member of the Risk and Compliance Committee

(since February 2017).

(since November 2016).

• Member of the Remuneration and Nomination

• Member of the Technology, Digital and Innovation

Committee (since November 2016).

Committee (since April 2021).

• Member of the Audit Committee (since August

• Chair of Resimac NZ Home Loans Limited (since

2017).

May 2012).

18 |

Mr Wayne Spanner
Independent Non-Executive Director
since February 2020

Wayne holds a Bachelor of Commerce and Law degree
from The University of Cape Town and a Masters of
Science degree from Oxford University. Wayne has
over 30 years experience as a lawyer and over 15
years senior executive experience in an international
law firm. He was previously the Managing Partner of
an international law firm in Australian from 2012 to
2020. Wayne has extensive experience in executive
management and corporate governance at Board
level.

Other listed Directorships (last three years):

• Nil.

Special responsibilities:

• Chair of the Remuneration and Nomination

Committee (since February 2020).

technology rollouts and complex transactions.
Caroline holds an LLB Hons (London), and has been
admitted to the Bars of England and Wales, Malaysia,
Australia and New Zealand.

Other listed Directorships (last three years):

• Non-executive Director of AMA Group Limited

(since March 2022).

• Non-executive Director of Genetic Signatures

Limited (since May 2022).

Special responsibilities:

• Chair of the Technology, Digital and Innovation

Committee (since April 2021).

• Member of the Remuneration and Nomination

Committee (since January 2021).

• Member of the Risk and Compliance Committee

(since February 2022).

• Member of the Risk and Compliance Committee

Company Secretary

(since July 2020).

• Member of the Audit Committee (since July 2020).

Mr Peter Fitzpatrick
Since November 2016

Mr Duncan Saville
Non-Executive Director
since November 2017

Duncan is a Chartered Accountant and an experienced
non-executive Director. He is chairman of ICM Limited,
an international fund manager. Duncan is a fellow of
the Institute of Chartered Accountants Australia and
New Zealand, the Australian Institute of Company
Directors and the Financial Services Institute of
Australasia.

Other listed Directorships (last three years):

Limited (since 2012).

Special responsibilities:

Peter is a Chartered Accountant who joined Resimac
Limited in 1987 and is responsible for the Group’s
company secretarial function. He is a member of the
Governance Institute of Australia and the Financial
Services Institute of Australasia.

The abovenamed Directors and officer held office
during the financial year and since the end of the
previous financial year.

Directors’ shareholdings
The following table sets out each Director’s relevant
interest in shares and rights of the company or in a
related body corporate as at 30 June 2023:

• Member of the Technology Digital and Innovation

Committee (since April 2021).

DIRECTOR

Fully paid
ordinary shares

Number of
rights over
ordinary shares

Mrs Caroline Waldron
Independent Non-Executive Director
since November 2020

Caroline is a non-executive Director and cross border
advisor with over 30+ years’ experience in regulated
consumer sectors such as technology, retail and
health. Caroline brings to Resimac commercial and
governance experience in many areas including

Warren McLeland

12,130,165

Susan Hansen

212,738

Wayne Spanner

15,732

Duncan Saville

254,586,353

Caroline Waldron

Nil

| 19

• Former Chairman of Somers Limited incorporated

• Former non-Executive Director of Go2 People

• Non-executive Director of West Hamilton Holdings

2023 ANNUAL REPORTRESIMAC GROUP LTD| DIRECTORS' REPORT

| DIRECTORS' REPORT

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.

Share options or rights granted to Directors and senior management
An aggregate of 1,284,875 shares were granted/exercised:

Results and dividends
The information appearing on pages 18 to 24 forms part of the Directors’ Report for the financial year ended 30
June 2023 and is to be read in conjunction with the following information:

PROFIT

FY23

$’000

FY22

$’000

Profit attributable to ordinary equity holders of the parent

66,446

102,147

• 199,875 shares granted under the Employee Share Plan on 10 October 2022;

DIVIDENDS

• 785,000 options exercised by senior management on 6 September 2022 in relation to the FY20 Long Term

Incentive Plan; and

• 300,000 options exercised by Scott McWilliam on 16 June 2023 in relation to Tranche 3 of the FY18 Long Term

Incentive Plan.

Further details included in the Remuneration report.

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).

The following dividends have been paid by the Company or declared by the Directors since the commencement of
the financial year ended 30 June 2023:

(a) out of the profits for the year ended 30 June 2022 and retained earnings on the

fully-paid ordinary shares:

• fully-franked final dividend of 4.00 cents (FY21: 4.00 cents) per share paid on

23 September 2022.

16,1161

16,336

(b) out of the profits for the half-year ended 31 December 2022 and retained

earnings on the fully-paid ordinary shares:

• fully-franked interim dividend of 4.00 cents (HY22: 4.00 cents) per share paid

on 24 March 2023.

16,0572

16,343

Board meetings

Audit

Risk and
compliance

Remuneration
and nomination

Technology,
digital and
innovation

• fully-franked final dividend of 4.00 cents (FY22: 4.00 cents) per share

declared on 28 August 2023.

16,065

16,277

COMMITTEES

the fully-paid ordinary shares:

DIRECTOR

(A)

(B)

(A)

(B)

(A)

(B)

(A)

(B)

(A)

(B)

1 The final FY22 dividend paid is net of dividend paid to treasury shares held by the Group ($122,286), eliminated on consolidation.
2 The interim FY23 dividend paid is net of dividend paid to treasury shares held by the Group ($110,864), eliminated on consolidation.

Warren McLeland

Susan Hansen

Wayne Spanner

Duncan Saville

Caroline Waldron

(A) Number of meetings eligible to attend.
(B) Number of meetings attended.

Operating and Financial Review

Principal activities
The Group is a leading residential mortgage and
asset finance lending business, distributing Prime
and Specialist products through various channels in
Australia and New Zealand. The Group focuses on
originating and servicing a high-quality loan portfolio,
supported by a global funding program.

The Group’s core capabilities include:

• Lending products: Leveraging the Group’s deep

understanding of the Australian and New Zealand
markets to offer products that address consumer
and SME customer demands, with attractive risk
and return profiles;

• Distribution: Distributing loans in Australia and

New Zealand through partnerships with accredited
brokers and wholesale channels, ensuring
effective reach and market presence;

• Treasury and funding expertise: Maintaining

strong, long-term relationships with onshore and
offshore banking and funding partners. The Group
has extensive experience in issuing securities in
global and domestic term securitisation markets,
bolstering the Group’s financial position; and

• Risk management: Operating a comprehensive
enterprise risk management and governance
framework, following the three lines of defence
model. This enables the Group to proactively
identify, assess, and mitigate risks, safeguarding
the interests of all stakeholders.

As part of the Group’s commitment to transparency
and responsible reporting, this information is
presented in the Group’s annual report to the
shareholders. These activities drive sustainable
growth and enhance value for the Group’s
shareholders.

20 |

| 21

2023 ANNUAL REPORTRESIMAC GROUP LTD| DIRECTORS' REPORT

| DIRECTORS' REPORT

Debt funding
The Group maintains access to a diversified
funding platform supported by established funding
relationships and the Board approved funding
strategy.

The following funding channels are used to support
the Group’s lending activities:

• Corporate debt facility & NIM bond: Utilised for

investment in business growth;

• Securitisation trusts: Loans that are initially

funded via a warehouse facility, are pooled and
refinanced by being sold to new funding Special
Purpose Vehicles (SPV) that issue limited-recourse
independently rated Bonds, such as Residential
Mortgage-Backed Securities (RMBS) and Asset-
Backed Securities (ABS) to institutional investors
in multiple jurisdictions; and

• Warehouse facilities: Third-party funders provide
limited-recourse financing to SPVs established
by the Group. At 30 June 2023, the Group had
three domestic and seven foreign offshore bank
warehouse providers.

Principal risks
The Group’s key risks include but are not limited to:

• Funding risk: The Group relies on a mix of

warehouse facilities, securitisation trusts, and
corporate debt to fund mortgage originations;

• Capital and liquidity requirements: To meet
the Australian Financial Services Licence
requirements, the Group must maintain sufficient
liquidity levels. There’s a potential risk of needing
to provide additional ‘first loss’ equity capital to
support senior ranking note holders, impacting
profitability, growth, and potentially requiring
raising additional capital;

• Regulatory and licence compliance: Operating
in highly regulated markets, changes in laws or
regulations could significantly impact the Group’s
business. Possessing multiple Australian Credit
Licences, any alterations to licensing regimes,
license revocations, or failure to obtain necessary
licenses could have a material adverse effect on
the Group’s business, operational, and financial
performance;

• Macroeconomic factors: An economic downturn
leading to materially higher unemployment could
lead to customer difficulty in maintaining loan
serviceability, posing credit risk;

• Interest rates: RBA cash rate increases have

materially increased loan servicing for customers.
Increased loan repayments combined with the
higher cost of living from inflationary pressures,
have impacted our customers as evidenced with
arrears increasing during the year;

• Climate and extreme weather events: Australia

and New Zealand have a track record of extreme
events including bushfires and floods, which could
impact the underlying security of our loans and
advances where customers are impacted by these
events.

Business strategy
The Group is focused on a number of growth
strategies to continue to drive revenue and
profitability.

1. Organic lending growth

The Group is well-positioned to grow volume driven
by:

• 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
market;

• Opportunity to grow volume in the asset finance
segment under the Resimac Asset Finance brand
and materially scale this segment over the next 3
years;

• Launch of our new digital customer banking

environment; and

• Continued investment in modernising core banking
platforms to optimise loan servicing capabilities
and operational efficiency.

2. Growth through acquisition

• Management has demonstrated an ability to

identify and execute profit accretive acquisitions
in targeted markets consistent with the Group’s
strategy;

• On 1 August 2022 Resimac exercised the option to
acquire a controlling stake in 23 Degrees Capital
Partners Pty Ltd (operating as Sonder), increasing
Resimac’s interest in 23 Degrees Capital Partners
Pty Ltd from 15% to 51%. Sonder is a commercial
asset finance wholesaler;

• On 20 June 2023 Resimac entered in a sale and
purchase agreement to purchase a $150 million
portfolio of asset finance loan receivables from
Thorn Group Limited (ASX: TGA). The purchase
is subject to Thorn Group Limited shareholder
approval and is expected to complete in
September 2023. Resimac and Thorn are related
parties as both are controlled by a common
shareholder; and

• The Group continues to evaluate M&A

opportunities in both the home loan and asset
finance segments in Australia and New Zealand.

Review of operations
The Group generated a statutory net profit after tax
(NPAT) of $66,459,000 for the year ended 30 June
2023. To reflect the Group’s normalised earnings the
NPAT has been adjusted to remove non-recurring
costs and one-off gains/losses. Management believe
the disclosure of the normalised NPAT provides
additional insight into the underlying performance for
the year, by excluding one off, non-recurring items.

The following table reconciles the unaudited
normalised earnings to the statutory NPAT for the year
in accordance with International Financial Reporting
Standards (IFRS).

UNAUDITED NON-IFRS INFORMATION

Statutory NPAT

Dividend income from listed equity
investment

Fair value write-down on unlisted
equity investment

FY23

$’000

66,459

(5,401)

3,600

Customer fee remediation program

(529)

Customer compensation provision

Tax effect of normalised items

Normalised NPAT

450

564

65,143

FY23 normalised NPAT excluding fair value losses on
derivatives (net of tax) is $73,722,000.

Net interest income of $222,507,000 decreased 7% on
prior year driven by the decrease in the Group’s assets
under management.

Operating expenses of $83,857,000 increased 6% on
prior year driven by higher employment costs, and
costs associated with an organisational restructure.

Loan impairment expense decreased 80% to
$2,240,000. The Collective Provision was increased
in FY22 to increase coverage for potential
macroeconomic headwinds.

Group’s total home loan settlements were $3.7 billion,
down 41% on prior year. Settlements were impacted
by lower system activity and aggressive ADI cashback
offers, particularly in the Prime segment.

The Group’s assets under management at 30 June
2023 comprise:

• On balance sheet home loans and advances to

customers of $13.1 billion, down 14% compared to
30 June 2022;

• On balance sheet asset finance loans of $0.6
billion, up 60% compared to 30 June 2022;

• White label portfolio of $0.8 billion, down 30%

compared to 30 June 2022 in line with the Group’s
strategy to cease originating white label loans; and

• Combined these make up the total assets under

management of $14.5 billion.

Political donations
In the year ended 30 June 2023, the Group’s political
contributions were Nil (FY22: Nil).

Funding programmes
During the year ended 30 June 2023, the following
new Residential Mortgage Backed Securities (RMBS)
and Asset Backed Securities (ABS) were issued to
facilitate assets under management, optimise term
duration and funding costs:

• The RESIMAC Asset Finance Trust – Warehouse
Series No.1 was settled on 31 August 2022 and
is a domestic asset financing warehouse with an
initial facility limit of $516 million.

• The RESIMAC Triomphe Trust - Premier Series

2022-2 transaction was settled on 28 September
2022 and is a domestic prime issue with a total
issuance size of $500 million.

• The RESIMAC Bastille Series 2022-2NC

transaction was settled on 15 December 2022 and
is a domestic non-conforming issue with a total
issuance of $500 million.

22 |

| 23

2023 ANNUAL REPORTRESIMAC GROUP LTDThe 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 123 of this financial report.

Rounding off amounts
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.

| DIRECTORS' REPORT

• The RESIMAC Versailles Series 2022-1 transaction
was settled on 22 December 2022 and is a New
Zealand prime issue with a total issuance size of
NZD$200 million.

• The RESIMAC RAF Trust – Warehouse Series No.2
transaction was settled on 2 February 2023 and
is a domestic asset financing warehouse with an
initial facility limit of $180 million.

• The RESIMAC Bastille Series 2023-1NC

transaction was settled on 20 April 2023 and is
a domestic non-conforming issue with a total
issuance size of $1 billion.

• The RESIMAC Versailles Series 2023-1 transaction

was settled on 29 June 2023 and is a New
Zealand prime issue with a total issuance size of
NZD$250 million.

Indemnification of officers and auditors
During the financial year, the Company paid a premium
to a related party 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 $0.04 per share. The record
date will be 8 September 2023. The payment date will
be 20 September 2023. 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 Group
generated a
statutory net
profit after
tax (NPAT) of
$66,459,000 for
the year ended
30 June 2023.

24 |

| 25

2023 ANNUAL REPORTRESIMAC GROUP LTDRemuneration
report.

2023
(Audited)

Contents

Summary

Remuneration objectives, strategy and principles

Remuneration and cultural activities

Key management personnel

KMP remuneration approach (excl. Non-Executive Directors)

Short-term and long-term incentive plans

Overview of company performance

Statutory remuneration

Non-Executive Director remuneration

10 Other remuneration information

| REMUNERATION REPORT

1. Summary
This Remuneration Report provides shareholders
with an overview of Resimac Group’s (the Group)
remuneration strategy and framework that applies
to the Group’s Directors, Key Management Personnel
(KMP), Executive Management and employees
(referred to collectively as Employees) for the year
ended 30 June 2023.

Resimac’s vision is to be a customer focused
company, making home ownership, financial freedom
and business success more accessible to everyone
by leveraging technology and data driven insights.
This vision is facilitated by promoting a culture of
transparency that is diverse, inclusive and impactful
and by a remuneration framework that provides
positive outcomes for our customers, shareholders
and employees.

2. Remuneration objectives, strategy
and principles
The Group’s commitment is to reward its employees
with a level of remuneration and benefits that is
commensurate with their individual responsibilities
and position within the business, recognising that an
engaged workforce is a requisite for the achievement
of Resimac’s strategic objectives.

The Board’s remuneration strategy is aligned to the
following objectives:

• To attract, motivate and retain high calibre

employees;

• To provide fair and equitable remuneration to all

employees in line with the Group’s Diversity, Equity
& Inclusion Policy;

• To promote and reward behaviours within the

business that are in the interest of all stakeholders
which includes customers and shareholders;

• To align effective risk management and

demonstration of appropriate behaviours, values
and ethics;

• To reinforce a culture of continuous employee

growth and knowledge; and

• To ensure the Group’s Governance framework

operates within and above industry best practice.

The following principles provide the basis of the
remuneration framework at Resimac:

• Resimac remunerates its employees in a manner

that is market competitive whilst being acceptable
to its shareholders;

• 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 all stakeholders including customers
and shareholders;

• Fixed and variable remuneration for KMP are

periodically benchmarked to ensure remuneration
is in line with the external market; and

• Pay parity is paramount. Fair and equitable
remuneration is applied to all employees
regardless of gender, sexual identity, age, religion,
ethnicity or disability.

3. Remuneration and cultural activities
Continuous review and assessment of our
remuneration and benefits continued throughout FY23
with a number of initiatives being included as part of
the Remuneration and Culture Activities plan.

These activities included:

• Implementation of a new Human Resources

Information System;

• Diversity celebrations including NAIDOC week,

International Womens Day, International Mens Day
and International Guide Dogs Day;

• Community outreach programs;

• Senior leadership health assessments;

• Wellbeing Program: Run Club, JP Morgan

Challenge, Resilience workshops;

• Opportunities for individual leadership and

coaching programs;

• Expansion of Parental Leave program to provide

extra benefits including the recognition of prenatal
leave, fertility leave, and miscarriage/stillbirth
leave;

• Introduction of Sabbatical Leave;

• Continuation of Remote Working Policy;

• Salary Continuance Insurance;

• Secondment and on the job learning opportunities.

| 27

2023 ANNUAL REPORTRemuneration.Remuneration.| REMUNERATION REPORT

| REMUNERATION REPORT

4. Key Management Personnel
The KMP are the people who have the authority and responsibility for planning, directing, implementing and
controlling 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

Chief Treasury Officer (CTO)

Majid Muhammad

Chief Information Officer (CIO)

Full Term

Danielle Corcoran

Chief Operating Officer (COO)

Resigned on 6 April 2023

The Directors classified as KMP and required to be disclosed as part of this report are:

Name

CURRENT

Position

Term as KMP

Warren McLeland

Chairman, Non-Executive Director

Susan Hansen

Independent Non-Executive Director

Duncan Saville

Non-Executive Director

Wayne Spanner

Independent Non-Executive Director

Caroline Waldron

Independent Non-Executive Director

Full Term

5. KMP remuneration approach (excl. Non-Executive Directors)
Resimac’s remuneration strategy for KMP focuses on both financial and non-financial measures and the Board’s
Remuneration & Nomination Committee assist with reviewing and recommending remuneration arrangements for
KMP that is both consistent and competitive within the market. The total remuneration of the KMP comprise a fixed
component and an at-risk variable component. The FY23 at-risk variable component is comprised of a short-term
incentive.

Remuneration is based on:

• role in which the person is performing (i.e. accountability, responsibility, qualifications, skills and experience

required);

• market benchmarking;

• performance against set Key Performance Indicators (KPIs);

• achievement of performance hurdles which includes tenure;

• regulatory compliance; and

• company performance.

5.1. KMP fixed remuneration (excl. Non-Executive
Directors)

The fixed component of the KMP remuneration
includes base salary plus any other fixed elements
such as superannuation, salary sacrifice and benefits
and is known as Total Fixed Remuneration (TFR).
Annually the TFR for the role in which the KMPs
are performing is considered by the Remuneration
and Nomination Committee which then makes final
recommendations to the Board.

5.2. KMP variable remuneration framework (excl.
Non-Executive Directors)

Variable remuneration is a means to provide at-
risk remuneration to reward executives for their
performance against set criteria. The objectives and
criteria are designed to align with near term, mid term
and long term strategy, ensuring value creation for
shareholders.

5.3. Non-KMP remuneration approach

For Senior Management that report directly to
the CEO and are not classified as KMP, the same
remuneration approach will apply to that of the
KMP approach to ensure all Senior Management are
aligned with the strategic objectives, behaviours and
standards of Resimac.

6. Short-term and long-term
incentive plans

6.1. Short-term incentive plan (STI Plan)

Chief Executive Officer STI Plan and KPI metrics

CEO, Scott McWilliam is eligible for a STI up to a cap
of 100% of his TFR. CEO’s performance is assessed
against predetermined KPIs by the Remuneration
and Nomination Committee at the end of each
performance period. Any STI awarded is 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 Nominations Committee.

CEO KPI components for FY23 are:

• Financial Performance: Cost Management,
Interest Margin Management, Asset Finance
settlement growth, Asset Under Management,
Arrears rates;

• Technology & Digital Strategy: Infrastructure and

application technologies;

• Market Opportunities;

• Regulatory obligations; and

• Leadership, People & Culture

KMP STI Plan and KPI metrics

The performance of KMPs is measured against
predetermined KPIs assessed by the CEO at the end
of each performance period and the Remuneration
and Nomination Committee are responsible for
reviewing and approving any awarded STI which will
be paid 100% in cash at the end of the performance
period (i.e. 1 July to 30 June). KPIs and relevant
measurements will be set at the commencement of
the performance period.

KMPs participate in the annual STI plan whereby
they have an opportunity to earn a percentage of
their TFR. The performance of KMPs is measured
against predetermined KPIs set by the CEO at the
commencement of the performance period. The
Remuneration & Nominations Committee measures
KMP performance against the set KPI objectives
and approves any STI awarded at the end of each
performance period. The amount of an STI award
will depend on whether and to what extent those
objectives are achieved. The STI assessment is
undertaken in July of each year and any award is
payable in September of the same year.

KPIs include:

• Corporate strategy initiatives

• Financial metrics including NPAT growth, cost to
income ratio and demonstrated innovative cost
initiatives;

• Innovation and technology initiatives and

enhancements to allow for simplification, scale
and digitalisation;

• Operational efficiency and effectiveness;

• People, strategic leadership and culture;

• Environmental, Social and Governance (ESG); and

• Governance through Resimac’s Risk and

Compliance frameworks which focuses on
adherence to obligations, reduction of customer
complaints, incidents and breaches.

28 |

| 29

2023 ANNUAL REPORTRESIMAC GROUP LTD
| REMUNERATION REPORT

| REMUNERATION REPORT

6.2. Long-term incentive plan (LTI Plan)

FY18 LTI Plan - CEO

The vested options are required to be
exercised no later than 30 June 2025.

The CEO, Scott McWilliam, was offered a LTI in
FY18. The details of the offer were:

During FY23, cash component of $1,710,000
was paid and 785,000 options were exercised.

• Granted 900,000 Options pursuant to the
Resimac Group Employee Share Options
and Rights Plan;

• 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 was exercised on 26 April 2021,

 Second tranche of 300,000 vested on
1 July 2019 and was exercised on 16
September 2021,

 Third tranche of 300,000 vested on 1

July 2020 and was exercised on 16 June
2023.

• Exercise period was 3 years for every

tranche vesting; and

• Vesting condition was 100% tenure.

FY20 LTI Plan - KMPs and Executives

In 2019 the Board established a LTI Plan for the
CEO, KMPs and eligible executives pursuant to
the Resimac Group Ltd Employee Share Option
& Rights Plan Rules. The CEO, KMPs and
eligible executives were offered options over
ordinary shares, and a combined total cash
component of up to $2.4m. 3,900,000 options
were granted on 15 August 2019 (900,000
allocated to the CEO and 375,000 for each
eligible executive).

All options vested on 31 August 2022 after the
Group achieved the following conditions:

• Net Profit After Tax (NPAT) growth hurdles;

• Digital transformation;

• Compliance hurdles; and

• Participant remaining employed with the

Group until the vesting date.

30 |

The graphs below set out the relative mix of
TFR, STI and LTI for:

• Scott McWilliam, CEO

• Other KMP

14%

CEO

56%

30%

TFR

STI

LTI

12%

17%

OTHER
KMP

71%

TFR

STI

LTI

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| 31

2023 ANNUAL REPORTRESIMAC GROUP LTD

| REMUNERATION REPORT

7. Overview of company performance
The table below summarises details of Resimac’s performance for key financial measures over the past four
financial years. Note the Group undertook a buyback programme and cancelled 5,290,163 shares in FY23 (FY22:
2,482,741 shares).

FINANCIAL YEAR ENDED 30 JUNE

FY23

FY22

FY21

FY20

Statutory NPAT ($’000)1

66,446

102,147

107,557

55,908

Total dividends per share (cents)2

Dividend payout ratio (%)2

8.00

48.4

8.00

32.0

4.20

15.9

2.70

19.6

Basic earnings per share (cents)

16.52

25.05

26.37

13.75

Return on equity (ROE) (%)3

Return on assets (%)4

Share price at 30 June ($)

16.4

4.4

0.92

29.9

6.1

1.15

36.9

7.3

2.46

25.5

4.3

1.01

1 NPAT excludes non-controlling interest (FY23: 13k, FY22: Nil).
2 Dividends per share and dividend payout ratio are calculated on dividends paid during the financial year.
3 ROE based on normalised NPAT and average shareholders’ equity per consolidated statement of financial position.
4 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.

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| 33

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S

2023 ANNUAL REPORTRESIMAC GROUP LTD

| REMUNERATION REPORT

9. Non-Executive Director remuneration

9.1. Overview of Non-Executive Directors’
remuneration arrangements

NAME

Position

Maximum
fee ($)

9.1.1. Policy objectives

• To be market competitive: aim to set Directors’

fees competitive with Non-Executive Directors in
comparable businesses with respect to product
mix, market capitalisation, geographical market
and employee size;

• 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

• To safeguard independence: to exclude any

performance related element in order to preserve
the independence of the Non-Executive Directors.

9.1.2. Aggregate fees approved by shareholders

At the Annual General Meeting (AGM) of shareholders
held on 16 November 2021, the shareholders approved
an increase to the maximum aggregate fee pool per
annum for non-executives to $800,000.

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 in conjunction with holding an Australian
Financial Services Licence and several Australian
Credit Licences.

The agreed fee structure is that a fee is paid to reflect
the Chairman’s responsibilities. Each Director receives
a base fee and if a Director chairs a Board committee,
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.

The Remuneration & Nominations Committee met in
June 2023 to review the Directors fees and resolved
to not increase fees in FY24.

The FY23 fee levels inclusive of superannuation where
applicable were as follows:

Warren
McLeland

Chairman and Risk &
Compliance Chair

141,303 p.a.

Susan
Hansen

Wayne
Spanner

Duncan
Saville1

Caroline
Waldron

Independent Non-
Executive Director,
Audit Chair & Resimac
New Zealand Chair

Independent Non-
Executive Director
& Remuneration and
Nomination Chair

141,628 p.a.

93,925 p.a.

Non-Executive
Director

74,900 p.a.

Independent Non-
Executive Director &
Technology, Digital
and Innovation Chair

116,897 p.a.

1 Exclusive of superannuation.

9.1.4. Board skills and behaviours

A key objective for Resimac is to ensure that we have
a diverse Board of Directors. The Board undertakes
an assessment of the skills that each Director holds
biennially which is summarised in a skills matrix. The
skills matrix was last completed by the board in March
2023.

Although it is not expected that all Directors will have
the same skills and behaviours, the purpose of the
matrix is to ensure there is a balance within the Board
to ensure we have diversity of thought. The matrix
skills and behaviours include:

• Strategy, planning, monitoring and policy

development
• ASX experience
• Governance
• Regulatory and stakeholder relations
• Risk and compliance management
• Relevant technical and industry knowledge
• Sustainability
• Finance and audit
• Capital management
• People, culture & remuneration
• Health, safety & environment
• Marketing and business development
• Technology, digital and innovation

9.1.5. Board evaluation reporting

The Board is committed to transparency in determining Board membership and in assessing the performance of
Directors. The Board undertook performance reviews in 2018 and 2020. At the conclusion of the last full evaluation
in 2020 the Board determined to undertake more frequent assessments which resulted in an assessment of
their effectiveness at the conclusion of each Board meeting. By rotation a Director is responsible for collation of
feedback and any change recommendations. The purpose of this is to assess the performance of the Board as a
whole with respect to time keeping, relevance, preparation and outcomes.

The performance of Directors is assessed against a range of criteria including contribution at meetings,
understanding the major risks affecting the Group, contributing to the development of the strategy, committing the
time required to fulfill the role and perform their responsibilities effectively, listening and respecting the ideas of
fellow Directors and management and consistently taking the perspective of creating shareholder value.

The Board with the assistance of the Remuneration and Nominations Committee conducts a review of the
performance of each Director seeking re-election at the Annual General Meeting.

9.1.6. Non-Executive Director remuneration

The fees paid or payable to the Non-Executive Directors in relation to FY23 are set out below:

CURRENT

Warren McLeland

FY23

FY22

Susan Hansen2

FY23

FY22

Wayne Spanner

FY23

FY22

Duncan Saville

FY23

FY22

Caroline Waldron2

FY23

FY22

TOTAL REMUNERATION

FY23

FY22

SHORT-TERM
BENEFITS

POST-EMPLOYMENT
BENEFITS

Fees ($)

Superannuation1 ($)

Total ($)

127,876

132,099

131,334

85,000

74,900

74,975

107,972

103,211

527,847

522,396

13,427

12,788

9,529

9,075

8,925

8,500

8,925

8,500

40,806

38,863

141,303

140,664

141,628

140,409

93,925

93,500

74,900

74,975

116,897

111,711

568,653

561,259

The assessment of skills and behaviours ties into
Board succession and selection of Directors.

1 Australian superannuation is paid where applicable. New Zealand Kiwisaver is not paid.
2 A portion of remuneration is paid in NZD.

34 |

| 35

2023 ANNUAL REPORTRESIMAC GROUP LTD| REMUNERATION REPORT

| REMUNERATION REPORT

10. Other remuneration information

10.1. Remuneration governance

10.1.1. Remuneration governance and 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, independence, diversity 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 talent management; and

• Diversity, equity and inclusion in the workplace.

10.1.2. Remuneration and nomination committee

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

• Caroline Waldron

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 Company engaged Godfrey Remuneration Group and Colvin Consulting Group to provide advice on a revised
equity plan and Long Term Variable Remuneration (LTVR) design. Fees payable for FY23 were $17,000 excluding
GST (FY22: $20,000).

10.1.4. KMP share ownership

The table below sets out the number of shares held directly, indirectly or beneficially by the current and former KMP
(including their related parties):

NON-EXECUTIVE DIRECTORS

Warren McLeland

Susan Hansen

Wayne Spanner

Duncan Saville

Caroline Waldron

SENIOR EXECUTIVES

Scott McWilliam

Jason Azzopardi

Andrew Marsden

Danielle Corcoran1

Majid Muhammad

Held at
1 July 2022

Net
change

Held at
30 June 2023

12,130,165

212,738

15,732

254,586,353

266,944,988

12,130,165

212,738

15,732

254,586,353

266,944,988

1,450,000

46,831

1,496,831

50,000

96,738

(4,835)

91,903

375,000

1,596,738

416,996

2,013,734

Total

268,541,726

416,996

268,958,722

1 Danielle Corcoran resigned with effect from 6 April 2023.

36 |

| 37

2023 ANNUAL REPORTRESIMAC GROUP LTD| REMUNERATION REPORT

| REMUNERATION REPORT

10.1.5. Share trading restrictions

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 limiting the KMP’s
exposure to risk relating to an element of their
remuneration that remains subject to restrictions on
disposal.

Resimac Directors, management team, and members
of their immediate family and controlled entities are
also required to obtain written consent and clearance
for security trading during trading windows from
the Chairman. 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.

10.1.6. Further information on remuneration

10.1.6.1. Service agreements

Each KMP has entered into an employment contract
with the Company (Resimac Limited). These contracts
have unlimited duration however may be terminated
with relevant notice as set out below unless in the
case of serious misconduct in which the KMP may be
terminated immediately.

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.

Notice period /
termination payment

NAME

Details regarding loans outstanding to KMP and their related parties during the reporting period, are outlined below.

Balance
1 July 2022

Balance
30 June 2023

Interest payable
for the year2

Highest balance
during the year

Scott McWilliam

• Six months’ notice (or

NON-EXECUTIVE DIRECTORS

($)

payment in lieu)

• May be terminated

immediately for serious
misconduct

Duncan Saville

15,449,316

13,558,651

859,407

15,478,864

Jason Azzopardi

• Three months’ notice (or

SENIOR EXECUTIVES

payment in lieu)

• May be terminated

immediately for serious
misconduct

Andrew Marsden

• Three months’ notice (or

payment in lieu)

• May be terminated

immediately for serious
misconduct

Danielle Corcoran1

• Three months’ notice (or

payment in lieu)

• May be terminated

immediately for serious
misconduct

Majid Muhammad

• Three months’ notice (or

payment in lieu)

• May be terminated

immediately for serious
misconduct

1 Danielle Corcoran resigned with effect from 6 April 2023.

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 Group’s 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.

Scott McWilliam

2,000,000

Danielle Corcoran

356,412

346,393

76,237

18,354

2,008,455

373,048

17,805,728

15,905,044

953,998

17,860,367

2 Interest is charged on an arm’s-length basis.

10.1.7.1. Other transactions and balances with KMP

From time to time, Directors of the Company or its controlled entities, or their Director-related entities may obtain
loans or ad hoc services from the Group, on the same terms and conditions as those entered into by other group
employees or customers. In FY23, a Director-related entity of Duncan Saville obtained a short term loan on market
terms from the Group and the amount outstanding at 30 June 2023 is $8,000,000 (FY22: Nil). The loan has a
contractually obliged repayment date of 30 September 2023.

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
28 August 2023

38 |

| 39

2023 ANNUAL REPORTRESIMAC GROUP LTD| CONSOLIDATED STATEMENT OF PROFIT OR LOSS

| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Financial
statements.

Consolidated statements
for the year ended 30 June 2023

Interest income

Interest expense

Net interest income

Fee and commission income

Fee and commission expense

Fair value (losses)/gains on derivatives

Fair value write-down on unlisted equity investment

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

NOTE

FY23

$'000

FY22

$'000

1/2

902,131

490,695

(679,624)

(252,617)

222,507

238,078

2,670

8,178

(34,055)

(40,477)

(12,255)

26,082

(3,600)

6,215

2,480

(51,226)

(45,267)

(32,631)

(34,168)

(2,240)

(11,446)

95,385

143,460

(28,926)

(41,313)

66,459

102,147

66,446

102,147

66,459

102,147

NOTE

FY23

$'000

FY22

$'000

PROFIT AFTER TAX

66,459

102,147

Other comprehensive income, net of income tax
Items that will not be reclassified subsequently to profit or loss:

Fair value movement on equity investment in listed companies through
OCI, net of tax

(1,614)

(1,683)

Items that may be reclassified subsequently to profit or loss:

Changes in fair value of cash flow hedges

Tax effect

Currency translation differences

Other comprehensive income, net of tax

11,618

(3,877)

(3,477)

1,163

789

7,316

(1,236)

(5,633)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

73,775

96,514

Attributable to:

Owners of the parent

Non-controlling interest

EARNINGS PER SHARE

Basic

Diluted

73,762

96,514

73,775

96,514

FY23

FY22

cents
per share

16.52

16.48

25.05

24.90

40 |

| 41

Notes to the consolidated financial statements are included on pages 46 to 121.

2023 ANNUAL REPORTRESIMAC GROUP LTD| CONSOLIDATED STATEMENT OF FINANCIAL POSITION

| CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

ASSETS

Cash and cash equivalents

Trade and other receivables

Current tax receivable

Loans and advances

Contract assets

Other financial assets

Derivative financial assets

Right-of-use assets

Plant and equipment

Other assets

Deferred tax assets

NOTE

FY23

$'000

FY22

$'000

1,085,417

932,781

3,472

8,115

5,661

13,735,635

15,669,860

13,877

28,587

25,196

7,323

1,320

4,683

24,077

23,483

39,220

8,959

1,928

3,707

Goodwill and intangible assets

28,379

27,496

14,942,038

16,737,172

LIABILITIES

Trade and other payables

27,146

Current tax payable

Interest-bearing liabilities

Lease liabilities

Other financial liabilities

Derivative financial liabilities

Other liabilities

Provisions

Deferred tax liabilities

NET ASSETS

EQUITY

Share capital

Reverse acquisition reserve

Total issued capital

Reserves

Retained earnings

Equity attributable to owners of the parent

Non-controlling interest

Notes to the consolidated financial statements are included on pages 46 to 121.

42 |

20.3

30,062

1,464

14,471,070

16,288,455

9,369

6,850

426

4,455

7,339

11,097

11,750

235

3,476

10,449

2,116

14,526,655

16,359,104

415,383

378,068

173,531

(61,541)

111,990

176,476

(61,541)

114,935

(19,589)

(25,466)

322,872

288,599

415,273

378,068

110

415,383

378,068

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2023 ANNUAL REPORTRESIMAC GROUP LTD

| CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

| CONSOLIDATED STATEMENT OF CASH FLOWS

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Interest received

Interest paid

Receipts from loan fees and other income

Payments to suppliers and employees

Receipts/(payments) of net loans from/to borrowers

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FY22

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CASH FLOWS FROM INVESTING ACTIVITIES

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Cash acquired on acquisition of subsidiary

Payments for new investments

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(4,118)

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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

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932,781

206

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619,809

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932,781

Notes to the consolidated financial statements are included on pages 46 to 121.

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44 |

| 45

2023 ANNUAL REPORTRESIMAC GROUP LTD

Notes to the
consolidated
financial
statements.

For the year ended
30 June 2023

About this report

Segment information

Key numbers and policies

Capital

Risk

Group structure

Unrecognised items

Other

108

112

113

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

ABOUT THIS REPORT

About this
report.

For the year ended
30 June 2023

Resimac Group Ltd (“Resimac” or “the Company”) is
a for-profit company limited by shares incorporated
and domiciled in Australia whose shares are publicly
traded on the Australian Securities Exchange. The
nature of the operations and principal activities of
Resimac and entities that it controls (referred to as
“the Group”) are described in the segment information.

The consolidated general purpose financial report
of the Group for the year ended 30 June 2023 was
authorised for issue in accordance with a resolution of
the Directors on 28 August 2023. The Directors have
the power to amend and reissue the financial report.

The financial report is a general purpose financial
report which:

• has been prepared in accordance with the
requirements of the Corporations Act 2001,
Australian Accounting Standards (AAS) and
other authoritative pronouncements of the
Australian Accounting Standards Board (AASB)
and International Financial Reporting Standards
(IFRS) as issued by the International Accounting
Standards Board (IASB);

• has been prepared on a historical cost basis, and
with certain financial instruments measured at fair
value. The carrying values of recognised assets
and liabilities that are the hedged items in fair
value hedge relationships, which are otherwise
carried at amortised cost, are adjusted to record
changes in the fair values attributable to the risks
that are being hedged;

• is presented in Australian dollars with all values
rounded to the nearest thousand dollars ($’000)
unless otherwise stated, in accordance with ASIC
Corporations (Rounding in Financial/Directors’
Reports) Instrument 2016/191; and

• 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
2022. Refer to Note 32 for further details.

Key judgements and estimates
In the application of the Group’s accounting policies,
the Directors are required to make judgements,
estimates and assumptions about the carrying value
of assets and liabilities that are not readily apparent
from other sources. The estimates and associated
assumptions are based on historical experience
and various other factors that are believed to be
reasonable under the circumstances, the results of
which form the basis of making judgements. Actual
results may differ from these estimates.

Judgements and estimates which are material to the
financial report are found in the following notes:

NOTE

Relates to

Goodwill impairment

22 & 23

Impairment of financial assets

46 |

| 47

2023 ANNUAL REPORTRESIMAC GROUP LTDNotes to the consolidatedfinancial statements.Notes to the consolidatedfinancial statements.| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

ABOUT THIS REPORT

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.

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.

Foreign currency

As at the reporting date, assets and liabilities of
overseas subsidiaries are translated into Australian
dollars at the rate of exchange at the balance sheet
date and the income statements are translated at the
average exchange rate for the year. The exchange
differences arising on the retranslation are taken
directly to a separate component of equity.

Transactions in foreign currencies are initially recorded
in the functional currency 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 the disposal of the
net investment, and then recognised in the income

statement. Tax charges and credits attributable to
exchange differences on those borrowings are also
recognised in equity.

Other accounting policies

Significant and other accounting policies that
summarise the recognition and measurement
bases relevant to an understanding of the financial
statements are provided throughout the notes to the
financial statements.

The notes to the financial statements

The notes include information required to understand
the financial statements and is material and relevant
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;

• it helps to explain the impact of significant

changes in the Group’s business – for example,
acquisitions 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;

Capital: provides information about the capital
management practices of the Group and shareholder
returns for the year;

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

Resimac's mission
is to be a customer
focused organisation,
leveraging
technology and data
analytics coupled
with expansion of
our sustainability and
Environmental, Social
and Governance
(ESG) footprint.

48 |

| 49

2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEGMENT INFORMATION

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEGMENT INFORMATION

Segment
information.

For the year ended
30 June 2023

The Group has identified two reportable segments 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 internal reports of the reportable segments are
regularly reviewed by the Board and executive management team (the Chief Operating Decision makers) in order to
allocate resources to the segment and to assess its performance.

The following is an analysis of the Group’s revenue and results by reportable operating segments:

AUSTRALIAN LENDING

NEW ZEALAND LENDING

CONSOLIDATED

FY23

$'000

FY22

$'000

FY23

$'000

FY22

$'000

FY23

$'000

FY22

$'000

Revenue from external customers

860,250

489,688

50,766

37,747

911,016

527,435

Total segment revenue

860,250

489,688

50,766

37,747

911,016

527,435

Segment results before fair value
(losses)/gains on derivatives, interest,
tax, depreciation, amortisation,
finance costs and impairment

762,109

374,045

44,530

23,489

806,639

397,534

Fair value (losses)/gains on derivatives

(8,824)

17,836

(3,431)

8,246

(12,255)

26,082

Interest expense

(637,203)

(231,773)

(42,421)

(20,844)

(679,624)

(252,617)

The Group’s reportable segments under AASB 8 Operating Segments are therefore as follows:

Depreciation and amortisation

(2,337)

(2,374)

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, separate regulatory requirements/oversight,
and staff solely accountable for the NZ business
including a locally based Head of NZ.

Represents the distribution and lending businesses
currently captured under the Resimac, Resimac Asset
Finance and homeloans.com.au brands.

The segment contains the bulk of the Australian based
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 from funders on the non-principally
funded loans (white label loan portfolio).

The Group’s fully owned subsidiary Resimac Asset
Finance (RAF) specialises in Australian based secured
commercial lending. Management have assessed
the impact of the RAF business on its Group results
as not material, and therefore does not represent
a reportable segment for the year ended 30 June
2023, notwithstanding RAF is considered a separate
operating segment by Management.

Loan impairment

Financing costs

(2,155)

(11,426)

(86)

(85)

(86)

(20)

(2,423)

(2,460)

(2,240)

(11,446)

(13,953)

(12,883)

(759)

(750)

(14,712)

(13,633)

Segment results before income tax

97,637

133,425

(2,252)

10,035

95,385

143,460

Income tax expense1

PROFIT AFTER TAX

(28,926)

(41,313)

66,459

102,147

The following is an analysis of the Group’s assets and liabilities by reportable operating segment:

AUSTRALIAN LENDING

NEW ZEALAND LENDING

CONSOLIDATED

FY23

$'000

FY22

$'000

FY23

$'000

FY22

$'000

FY23

$'000

FY22

$'000

Segment assets excl. tax

14,094,234

15,889,429

839,655

847,743 14,933,889

16,737,172

14,094,234

15,889,429

839,655

847,743 14,933,889

16,737,172

Segment liabilities excl. tax

(13,736,229)

(15,548,901)

(790,426)

(806,623)

(14,526,655)

(16,355,524)

Net assets excl. tax

358,005

340,528

49,229

41,120

407,234

381,648

Tax assets2

Tax liabilities2

NET ASSETS

8,149

(3,580)

415,383

378,068

1 Income tax expense is disclosed on a consolidated basis, not by reportable operating segment.
2 Tax assets and liabilities are disclosed on a consolidated basis, not by reportable operating segment.

50 |

| 51

2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

Key numbers
& policies.

For the year ended
30 June 2023

1. Revenue

1.1. Revenue streams

The Group generates revenue primarily from interest income, annuity trail commission income on white label loans
and other fee income.

INTEREST INCOME

Loans and advances

Bank deposits

Discount unwind on NPV of trail commission

FY23

$'000

FY22

$'000

881,006

488,570

19,994

1,131

450

1,675

902,131

490,695

Fee and commission income (Revenue from contracts with customers)

2,670

8,178

FAIR VALUE GAINS ON DERIVATIVES

Fair value gains on interest rate swaps

Fair value gains on overnight index swaps

OTHER INCOME

Dividend income

Other

5,401

814

6,215

25,749

333

26,082

800

1,680

2,480

Total revenue

911,016

527,435

RECOGNITION & MEASUREMENT

Interest income - loans and advances

Loans and advances are initially recognised at fair
value. Subsequent to initial recognition, the loans
are measured at amortised cost using the effective
interest method over the estimated actual (but not
contractual) life of the mortgage, taking into account
all income and expenditure directly attributable to the
loan.

Interest income on loans and advances is recognised
as it accrues using the effective interest rate method.
The rate at which revenue is recognised is referred to
as the effective interest rate and is equivalent to the
rate that effectively discounts estimated future cash
flows throughout the estimated life.

Acquisition costs representing mortgage insurance
premiums and upfront broker commissions related to
originating loans and advances are capitalised on the
statement of financial position of the Group. These
costs are amortised to the statement of profit or loss
across the expected life of the loan in interest income
as part of the effective interest rate.

Loans and advances in arrears or hardship at 30 June
2023 continue to accrue interest income.

Consideration for potential future credit losses on
loans in arrears or hardship is reflected in Note 23.

Interest income - bank deposits

This comprises interest income on cash held with
Australian ADIs predominantly in securitisation trusts.
Interest income is recognised as it accrues, using the
effective interest method.

Fee and commission income

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. Fee and commission income
include fees other than those that are an integral
part of loans and advances measured using effective
interest rate method, and which are accounted for
in accordance with AASB 15 Revenue from contracts
with customers.

The following table provides information about the
nature and timing of the satisfaction of performance
obligations in contracts with customers, and the
related revenue recognition policies.

Classification and measurement of revenue

TIMING

At a point
in time

Type of
service

Mortgage
origination
revenue

Nature, timing of satisfaction
of performance obligations

Revenue recognition
policy under AASB 15

Commission from originating white label loans.

The performance obligations are satisfied at the
point in time the loan is settled. Non-ongoing
performance conditions are attached to the
upfront fee.

Once the Group has referred a 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 time

Loan
management
revenue

Trail commission income on white label loans,
based on the individual monthly loan balance
outstanding each month. Trail ceases once the
loan is discharged.

Revenue is recognised at the point in time the
loan is being settled and performance obligations
are satisfied according to the contracts with the
funders.

The contracts with the originators include
performance obligations which must be satisfied
in order to be paid trail commission (e.g. the loan
not being in arrears).

The present value of the trailing commission
receivable is recognised as a contract asset and
measured using the expected value method with
variable consideration at a point in time.

At a point
in time

Lending fee
income

Loan fees paid by the borrower such as
application, discharge, settlement fees, dishonour
fee, etc. The performance obligation for these fees
is met at a point in time (settlement, discharge etc)
when the fee is charged to the borrower.

Revenue is recognised when the transaction is
completed and the performance obligations are
met.

52 |

| 53

2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

Fair value gains on derivatives

Other income

1.3. Assets related to contract with customers

The Group’s funding structures contractually require
the Group to enter into interest rate swaps on the
origination of fixed rate loans to customers, to
ensure the Group’s special purpose vehicles maintain
sufficient cash flows by eliminating interest rate risk
exposure.

At 30 June 2023, the fair value of future cash flows
of each swap that was not designated and qualified
as a cash flow hedge was determined in line with
AASB 9 Financial Instruments, and the resulting gain
or loss is recognised in the statement of profit or loss.
During the year, the 2-3 year curve flattened resulting
in a material decrease in the fair value of the Group’s
portfolio of interest rate swaps.

Dividend income is recognised when the right to
receive the payment is established.

Other income includes dividend income and various
items including but not limited to payments received
under operating leases as income on a straight-line
basis over the lease (office sub-lease).

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 50).

AUSTRALIAN LENDING

NEW ZEALAND LENDING

CONSOLIDATED

FEE AND COMMISSION INCOME

FY23

$'000

FY22

$'000

FY23

$'000

FY22

$'000

FY23

$'000

FY22

$'000

Mortgage origination

145

1,564

Loan management

Lending fee income

(4,531)

5,491

5,380

1,105

7,022

1,565

1,156

145

1,564

(4,531)

7,056

6,536

2,670

8,178

TIMING OF REVENUE RECOGNITION

Service transferred at a point in time

1,105

7,022

1,565

1,156

2,670

8,178

Revenue from contracts with
customers

1,105

7,022

1,565

1,156

2,670

8,178

Interest income

853,136

462,442

48,995

28,253

902,131

490,695

The Group has recognised the following assets related to contracts with customers.

CONTRACT ASSETS – PRESENT VALUE OF FUTURE TRAIL COMMISSION RECEIVABLE

Current

Non-current

FY23

$'000

FY22

$'000

4,724

9,153

7,763

16,314

13,877

24,077

RECOGNITION & MEASUREMENT

Contract assets - present value of future trail
commission receivable

The contract assets primarily relate to the Group’s
rights to receive trail commissions from lenders on
white label settled loans, over the life of the loan
based on the monthly loan balance outstanding. The
contract assets are transferred to receivables when
the rights become unconditional. White label loans
ceased origination in FY19, and the portfolio is in
runoff.

Initial recognition

Expected value of future trail commission receivable
were 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 was determined by using the discounted
cash flow valuation technique.

income or expense in the statement of comprehensive
income (disclosed as loan management under fee and
commission income in Note 1.2).

A remeasurement of the underlying cash flows relating
to the trail commission receivable occurs at each
reporting date.

The key estimates and assumptions underlying the
remeasurement of the estimated future cash flows
include the:

FY23

FY22

Annualised run-off

22.5%

22.9%

Prepayment rate (run-off buffer)

25%

Annualised run-off

Run-off is a combination of discharges, prepayments
and scheduled loan repayments. A three year rolling
average is used in the valuation as the Group’s best
estimate of future run-off to avoid potential year-on-
year volatility in run-off.

Prepayment rate

In order to manage the uncertainty associated with
this modelling, a conservative run-off buffer of 25% is
included in the valuation by management, and remains
unchanged compared with FY22.

Fair value gains on derivatives

17,836

8,246

26,082

Subsequent measurement

Other income

6,009

2,388

206

6,215

2,480

External revenue as reported in
segment information

860,250

489,688

50,766

37,747

911,016

527,435

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 computing the present value
of estimated future cash flows at the effective interest
rates. The resulting adjustment is recognised as

54 |

| 55

2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

2. Expenses

INTEREST

Bond and warehouse facilities

Amortisation – facility issuance costs

Discount unwind on NPV of trail commission

Corporate facility

Interest on lease liabilities

FEE & COMMISSION

Loan management

Borrowing commitment costs

RMBS costs

Discharge fee refund provision (release)/charge1

EMPLOYEE BENEFITS

Remuneration, superannuation and on-costs

Share-based payments

FAIR VALUE LOSSES ON DERIVATIVES

Fair value losses on interest rate swaps

Fair value losses on overnight index swaps

Fair value write-down on unlisted equity investment

OTHER

Marketing

Technology expenses2

Audit and other professional fees

Rent and occupancy costs

Insurance

Depreciation and amortisation

Depreciation of right-of-use assets

Unrecoverable GST

Other

Loan impairment expense (see Note 6)

1 See Note 17 for details of the discharge fee refund provision (release)/charge.
2 Includes core banking IT project costs (FY23: $2.0 million; FY22: $5.1 million).

56 |

FY23

$'000

FY22

$'000

662,613

10,583

558

5,459

411

237,975

11,524

826

1,832

460

679,624

252,617

19,872

22,904

5,801

8,911

(529)

5,184

8,449

3,940

34,055

40,477

50,394

832

51,226

11,829

426

12,255

3,600

5,036

12,762

2,640

1,154

2,562

780

1,643

2,469

3,585

44,477

790

45,267

6,477

14,629

2,500

961

2,291

791

1,669

2,740

2,110

32,631

34,168

2,240

11,446

815,631

383,975

RECOGNITION & MEASUREMENT

2.1. Interest

Bond and warehouse facilities

Recognised in the profit or loss as its accrues
using the effective interest rate method. Bond and
warehouse facilities interest expense include coupon
payments on notes issued, and interest paid on non-
securitised funding facilities.

Amortisation - bond issue costs

Transaction costs incurred by the Group incremental
to the issue of debt securities by the securitisation
trusts, 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 rate method.

2.2. Fee and commission

Loan management

Includes monthly trail commission and service
provider fee payments to brokers for originating
on balance sheet and white label loans based on
individual loan balances outstanding and the loan
continuing to perform.

fees, liquidity fees, rating agency fees, and other fees
related to the ongoing operation of the bond and
warehouse facilities.

2.3. Employee benefits

Employee benefits expense includes fixed and variable
remuneration, superannuation, and associated on-
costs.

The policy relating to share-based payments is set out
in Note 31.

2.4. Fair value losses on derivatives

The policy relating to fair value losses on derivatives is
set out in Note 1.1.

2.5. Other

This mainly comprises bank and regulatory fees, and
general administration expenses. These items are
expensed when incurred.

2.6. Loan impairment

Loan impairment expenses relates to the movement in
the:

• specific and collective provisions;

Borrowing commitment costs

• direct loan write-offs recognised during the year;

Commitment fees directly related to the Group’s global
funding program.

RMBS costs

Other financing costs include trustee and servicer

and

• recoveries of previously impaired loans.

See Note 6 for detail on impairment of loans and
advances.

| 57

2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

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

Total income tax expense recognised in the current year

FY23

$'000

FY22

$'000

34,228

38,033

(9)

34,302

38,024

(5,380)

(5,376)

28,926

4,333

(1,044)

3,289

41,313

3.3. Deferred tax balances

The following is the analysis of deferred tax assets (DTA) and deferred tax liabilities (DTL) presented in the
consolidated statement of financial position:

Deferred tax assets

Deferred tax liabilities

Deferred tax assets/(liabilities)

FY23

Deferred tax assets/(liabilities)

FY23

$'000

FY22

$'000

(2,116)

Opening
balance

$'000

Current year
recognised in
profit or loss

Previously
unrecognised
in profit or loss

Recognised
directly in
equity

$'000

Closing
balance

$'000

The income tax expense for the year can be reconciled to the accounting profit as follows:

Plant, equipment and software

3,236

(1,860)

Profit before tax

Income tax expense calculated at 30% (FY22: 30%)

Effect of expenses that are not deductible in determining taxable profit

Effect of different tax rates of subsidiaries operating in other jurisdictions

Employee share scheme

Other items

95,385

143,460

28,616

43,038

110

122

(60)

(144)

(342)

(214)

Deferred mortgage insurance

Employee entitlements

Net provision for lease make good

Provision for discharge fee refund

Other accrued expenses

Blackhole expenditure

1,649

1,182

3,410

(54)

(100)

(796)

28,851

42,366

Trail commission payable

3,613

1,564

Provision for expected credit loss

12,488

253

Lease liability

Financial assets

Share-based payments

592

380

(439)

(111)

Capitalised incentive commission

(16,319)

Loans and advances

Deferred bond issue cost

476

(4,580)

(48)

1,080

(143)

1,302

(361)

1,374

Derivatives

(614)

2,648

Trail commission receivable

Tax losses carried forward

(7,229)

473

(2,116)

5,380

(4)

(3,226)

(4)

(421)

692

(35)

(14)

(2)

12,749

1,376

1,546

1,182

2,615

5,177

627

(89)

1,333

(289)

(15,031)

115

(3,208)

(3,475)

(1,441)

(7,229)

473

| 59

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

(1,044)

(9)

Income tax expense recognised in profit or loss

28,926

41,313

The tax rate used for FY23 and FY22 reconciliations is the corporate tax rate of 30% payable by corporate entities
in Australia, and 28% in New Zealand.

RECOGNITION & MEASUREMENT

Income tax expense represents the sum of the tax currently payable and deferred tax.

3.2. Current tax balances

Current tax receivable

Current tax payable

58 |

FY23

$'000

8,115

FY22

$'000

(1,464)

2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

Opening
balance

$'000

Current year
recognised in
profit or loss

Previously
unrecognised
in profit or loss

Recognised
directly in
equity

$'000

Closing
balance

$'000

FY22

Deferred tax assets/(liabilities)

Provision for expected credit loss

Plant, equipment and software

Deferred mortgage insurance

Employee entitlements

Net provision for lease make good

Provision for discharge fee refund

Other accrued expenses

Blackhole expenditure

9,903

3,351

163

1,268

2,165

2,598

(113)

(72)

387

1,182

1,253

(7)

(680)

1,060

Trail commission payable

4,897

(1,284)

Lease liability

Financial assets

Share-based payments

Accrued income and other

516

(1,627)

1,802

(626)

(70)

Capitalised incentive commission

(13,483)

(2,861)

Loans and advances

Deferred bond issue cost

Derivatives

1,206

(3,786)

(730)

(802)

3,574

(5,351)

Trail commission receivable

(9,996)

2,767

(2)

(5)

(8)

(1)

(13)

12,488

(1)

1,188

(1,287)

3,236

1,649

1,182

3,410

3,613

592

380

(439)

(111)

(16,319)

476

(4,580)

1,163

(614)

(7,229)

(4,333)

1,044

1,083

(2,116)

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.

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.

Deferred tax liabilities (DTLs) are generally recognised
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.

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.

3.6. Current and deferred tax for the year

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 consolidation and 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. Unused tax losses at 30 June
2023 is $0.9 million (FY22: $0.9 million).

3.8. Nature of the tax funding agreement

Members of the Group have entered into a tax funding
agreement. 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.

60 |

| 61

2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

4. Cash and cash equivalents

Reconciliation of liabilities arising from financing activities

Cash at bank and on hand

Cash collections accounts1

Restricted cash2

NOTE

FY23

$'000

22,732

1,062,685

FY22

$'000

18,996

912,283

1,502

Issued capital

Share-based
payment
reserve

Interest-
bearing
liabilities

Lease
liabilities

$'000

Total

$'000

Balance at 1 July 2022

176,476

494

16,288,455

11,097

16,476,522

1,085,417

932,781

Operating cashflows

17,665

Financing cashflows

(5,192)

675

(1,831,849)

(1,753)

(1,838,119)

Non-cash movements

2,247

(2,114)

(3,200)

(3,042)

Balance at 30 June 2023

173,531

(945)

14,471,070

9,369

14,653,026

Balance at 1 July 2021

181,675

2,201

14,701,651

12,482

14,367,009

Operating cashflows

(4,343)

Financing cashflows

(6,132)

165

2,034,839

(1,629)

2,027,243

Non-cash movements

933

(1,872)

87,308

244

86,613

Balance at 30 June 2022

176,476

494

16,288,455

11,097

16,476,522

RECOGNITION & MEASUREMENT

Cash comprises cash deposits and cash equivalents that are short-term, liquid investments readily convertible to
known amounts of cash, not subject to significant risk of changes in value, and have a maturity of three months or
less.

Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for
varying periods of between one day and three months, depending on the immediate cash requirements of the
Group, and earn interest at the respective short-term deposit rates.

Reconciliation of profit after tax to the net cash flows from operating activities

Profit after tax

ADJUSTMENTS FOR

Depreciation and amortisation

Depreciation charge of right-of-use assets

Amortisation of bond issue costs

Fair value write-down on financial assets

Fair value movement on swaps

Loan impairment expense

Net (profit)/loss on disposal of non-current assets

Movement in present value of future trail commission income

Movement in present value of future trail commission expense

Share-based payments expense

Discount on mortgage

Dividend income from listed equity investments

(INCREASE)/DECREASE IN ASSETS

Trade and other receivables

Loans and advances

Other assets

Impairment allowance account

Current tax receivable

Deferred tax assets

INCREASE/(DECREASE) IN LIABILITIES

Trade and other payables

Current tax payable

Interest-bearing liabilities

Provisions

Deferred tax liabilities

66,459

102,147

780

1,643

10,583

3,600

(1,333)

2,240

10,200

(4,900)

832

(3,780)

791

1,669

11,524

(22,593)

11,446

(272)

7,949

(4,039)

790

(232)

(800)

2,191

(1,112)

1,935,471

(1,682,234)

(3,437)

(11,499)

(2,791)

(3)

(1,970)

(2,946)

6,658

(12,693)

17,665

(3,661)

(4,343)

4,853

(2,970)

Net cash from / (used in) operating activities

2,017,368

(1,585,434)

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.

62 |

| 63

2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

5. Trade and other receivables

CURRENT

Fee and commission receivable

Prepayments

GST receivable

Sundry receivables

NOTE

FY23

$'000

FY22

$'000

425

2,377

447

223

3,472

604

2,531

960

1,566

5,661

6. Loans and advances

GROSS LOANS & ADVANCES

Loans and advances

Capitalised upfront commissions

Deferred mortgage fees

Unallocated customer repayments

NOTE

FY23

$'000

FY22

$'000

13,750,051

15,684,500

50,238

54,564

(5,740)

(10,107)

(13,070)

(12,056)

13,781,479

15,716,901

RECOGNITION & MEASUREMENT

Less: allowance for impairment

(45,844)

(47,041)

All receivables are derived in the ordinary course of 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 and no
material impairment recognised.

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less an allowance for impairment. The credit risk of trade receivables is considered
immaterial as they are due from Australian financial institutions with high credit ratings.

Fee and commission receivable

Comprises trail commission receivables on settlement terms of 30 days. This is initially recognised at the fair value
of the consideration receivable.

Prepayments

Prepayments are recognised when the costs are incurred and amortised over the period in which the economic
benefits from these assets are received.

Sundry receivables

Sundry receivables are receivables arising from various immaterial transactions in the ordinary course of business.
The Group has assessed these receivables as fully recoverable at balance date. The FY22 comparative amount
included receivables from Volt Bank for amounts collected on behalf of the Group.

Current

Non-current

IMPAIRMENT ALLOWANCES

Collective allowance

Specific allowance

13,735,635

15,669,860

4,341,166

4,557,901

9,440,313

11,159,000

13,781,479

15,716,901

43,294

42,692

2,550

4,349

45,844

47,041

MOVEMENT IN IMPAIRMENT ALLOWANCES

Balance at 1 July

47,041

37,565

Provided for during the year:

• Specific

• Collective

Write-offs

Balance at 30 June

1,660

580

(3,437)

45,844

842

10,604

(1,970)

47,041

64 |

| 65

2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

Impairment and provisioning

Equity in Unlisted Companies

Loan to related entity

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 rate method.

The effective interest rate is the rate that discounts
estimated future cash receipts (including all fees paid
or received that form an integral part of the effective
interest rate, transaction costs and other premiums or
discounts) excluding expected credit losses, through
the expected life of the loans and advances.

Gains and losses are recognised in the statement of
comprehensive income when the loans and advances
are derecognised or impaired.

Unallocated customer repayments

Relates to loan repayments received from borrowers
that reside in clearing accounts not yet allocated to a
trust at balance date.

7. Other financial assets

Equity in ASX Listed Companies

Equity in Unlisted Companies

Loan to related entity

Short-term investment

Current

Non-current

AASB 9 requires an Expected Credit Loss model (ECL)
at each reporting date to reflect changes in credit risk
since initial recognition of the loans and advances.
Impairment policy of loans and advances are included
in Note 22.

Security properties repossessed

As at 30 June 2023, the Group had exercised their
right to foreclose on 13 residential properties (FY22:
13) being the security for loans and advances. These
loans and advances are security for the funding
provided by warehouse facilities and securitisation
trusts. The Group intends to sell these properties with
the proceeds to go towards clearing the outstanding
balance of the underlying loans. Mortgages in
possession are held as part of loans and advances,
until sold.

NOTE

FY23

$'000

FY22

$'000

17,077

3,510

8,000

15,963

7,260

260

28,587

23,483

8,000

20,587

28,587

260

23,223

23,483

Equity in ASX Listed Companies

Equity investments in ASX listed companies are investments the Group intends to hold for long term strategic
purposes. As permitted by AASB 9, the Group designated these investments at the date of initial application as
measured at fair value through other comprehensive income. The accumulated fair value reserve related to these
investments will not be reclassified to profit or loss. Dividends will be recognised in profit or loss as other income
when the Group’s right to receive payment is established.

Investments that are not traded in an active market,
however classified as fair value through profit or
loss (FVTPL) are disclosed at fair value at the end
of each reporting period. The fair value assessment
conducted on the unlisted shares, included assessing
other market conditions on the current and future
operating models. The fair value assessments
include comparisons against forecasted operating
performance at time of investment. The valuation
methodology for these investments is disclosed in
Note 22.

Resimac provided a short-term interest bearing
loan to a related party. Interest is charged on arm’s
length terms. Interest income of $0.8 million for the
year ended 30 June 2023 was fully received and
is presented within interest income on loans and
advances in Note 1.

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.

8. Right-of-use assets

LEASE - BUILDINGS

Balance at 1 July

Additions

Depreciation

Foreign exchange

Balance at 30 June

LEASE - BUILDINGS

Right-of-use assets at cost

Less: accumulated depreciation

Total right-of-use assets

NOTE

FY23

$'000

FY22

$'000

8,959

10,638

(1,643)

(1,669)

7,323

14,244

(6,921)

7,323

(10)

8,959

14,234

(5,275)

8,959

Right-of-use assets

The Group lease offices with lease terms between 3
to 8 years. Right-of-use assets are initially measured
at cost and comprise the following:

• the amount of the initial measurement of lease

liability;

• any lease payments made at or before the

commencement date less any lease incentives
received;

• any initial direct costs; and

• restoration costs.

The right-of-use asset is subsequently depreciated
using the straight-line method from the
commencement date to the end of the lease term,
unless the lease transfers ownership of the underlying
asset to the Group by the lease term or the cost of
the right-of-use asset reflects that the Group will
exercise a purchase option. In that case the right-
of-use asset will be depreciated over the useful life
of the underlying asset, which is determined on the
same basis as those of property and equipment. In
addition, the right-of-use asset is periodically reduced
by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability. Depreciation of
right-of-use asset is recognised in the consolidated
statement of profit or loss.

66 |

| 67

2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

9. Plant and equipment

10. Other assets

CARRYING AMOUNTS OF

$'000

Computer
equipment

Office
furniture

Operating lease
equipment

Leasehold
improvement

Total

$'000

701

1,928

Balance at 1 July 2022

Additions

Disposals

Depreciation expense

Foreign exchange

Balance at 30 June 2023

Balance at 1 July 2021

Additions

Disposals

Depreciation expense

Foreign exchange

Balance at 30 June 2022

715

173

(24)

(285)

(18)

561

457

543

(15)

(267)

(3)

715

(2)

(17)

122

(30)

(17)

435

(190)

(260)

258

359

251

441

981

(20)

(175)

(260)

435

701

188

(26)

(752)

(18)

1,320

1,919

796

(65)

(719)

(3)

1,928

RECOGNITION & MEASUREMENT

Plant and equipment stated at cost less accumulated depreciation and impairment losses.

Depreciation and amortisation

Derecognition

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:

Computer equipment

Office furniture

Operating lease equipment

Years

3-4

3-7

Leasehold improvement

For life of the lease

An item of plant and equipment is derecognised upon
disposal or when no future economic benefits are
expected to arise from the continued use of the asset.
Any gain or loss arising on the disposal or retirement
of an item of plant and equipment is determined as
the difference between the sale proceeds and the
carrying amount of the asset and is recognised in
profit or loss.

Impairment

At each reporting date, the Group reviews the carrying
amounts of plant and equipment to determine whether
there is any indication that those assets have suffered
an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated to
determine the extent of the impairment loss (if any).

68 |

Reinsurance claim receivable

Other

Current

Non-current

FY23

$'000

FY22

$'000

4,455

228

4,683

228

4,455

4,683

3,476

231

3,707

231

3,476

3,707

Reinsurance claim receivable

Prime Insurance Group Limited was purchased as part of the RHG Mortgage Corporation Limited (RHG) acquisition
in 2014. Its sole purpose is to provide mortgage insurance and reinsurance facilities for the RHG mortgage assets
and process any shortfall claims received. RHG loans ceased origination in FY14, and the portfolio is in run-off.

The reinsurance claim receivable is available to utilise against the reinsurance claim reserve amount in Note 16.

11. Goodwill and intangible assets

GOODWILL

Balance at 1 July

FY23

$'000

FY22

$'000

27,430

Additional amount recognised from business combination (see Note 25)

949

Balance at 30 June

28,379

27,430

OTHER INTANGIBLE ASSETS

$'000

Software

Brand name

Total

Balance at 1 July 2022

Amortisation for the year

Write-off during the year

Balance at 30 June 2023

Balance at 1 July 2021

Amortisation for the year

Balance at 30 June 2022

(28)

(38)

110

(44)

(26)

(28)

(38)

136

(70)

| 69

2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

11.1. Goodwill

Goodwill arising on an acquisition of a business
is carried at cost as established at the date of
acquisition of the business (less accumulated
impairment losses, if any).

Impairment testing

At 30 June 2023, the Group has performed goodwill
impairment testing, which included consideration
of the impact of the macroeconomic environment.
Goodwill of $21.7 million has been allocated for
impairment assessment purposes to the Australian
Lending Business (ALB) segment. This segment is
considered to be the group of cash-generating units
(CGU) that are expected to benefit from the synergies
of the business combination to which that goodwill
relates and is the lowest level at which goodwill is
allocated. RAF goodwill of $6.7 million, including the
goodwill recognised from RAF’s investment in 23
Degrees Capital Partners Pty Ltd, is considered a
separate CGU and has been separately assessed for
impairment testing.

A CGU to which goodwill has been allocated is tested
for impairment annually, or more frequently when
there is an indication that the unit may be impaired.
If the recoverable amount of the CGU is less than
its carrying amount, the impairment loss is allocated
first to reduce the carrying amount of any goodwill
allocated to the unit and then to the other assets
of the unit pro rata based on the carrying amount
of each asset in the unit. Any impairment loss for
goodwill is recognised directly in profit or loss.
An impairment loss recognised for goodwill is not
reversed in subsequent periods.

Recoverable amount of the asset

The recoverable amount is equal to the greater of:

• fair value less costs to sell; and
• value in use (‘VIU’).

It is not always necessary to determine both the fair
value less cost to sell and its VIU. If either of these
amounts exceed the carrying amount of the CGU,
there is no impairment of the goodwill and it is not
necessary to estimate the other amount.

As a result, the VIU methodology is considered to
be most appropriate as there is no readily available
market outside specific business sales of an
equivalent sized business to the ALB and RAF CGUs.

The VIU calculation requires management to estimate
future cash flows expected to arrive from the CGU and

a suitable discount rate in order to calculate present
value.

Key judgements and assumptions
The key assumptions used for assessing the recoverable amount of the CGUs are as below:

Indicators of impairment

The minimum indicators of impairment have been
considered by management. These include both
internal and external sources of information such as:

• significant changes (historical and future) in
the market, economic, legal or technological
environment which would have an adverse impact
on the Group;

• decline in market capitalisation below the carrying

value of net assets;

• interest rate changes which impact the discount

rate used in modelling;

• evidence of a worsening financial position;

• plans to discontinue operations; and

• macro economic conditions.

Management have assessed at 30 June 2023, the
market capitalisation of the Group was lower than
the carrying amount of the Group’s net assets. Whilst
this is considered an indicator of impairment, the
impairment assessment performed by management
indicates the recoverable amount of the CGU remains
higher than the carrying amount resulting in no
impairment in FY23.

There were no other indicators of impairment as at 30
June 2023.

Inputs to impairment calculations

Cash flow projections
For VIU calculations, cash flow projections are based
on strategic objectives and business forecasts
prepared by management and approved by the Board.
Cash flow projections are four years in length and a
terminal growth rate beyond this has been applied.

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.

Furthermore, each unit or group of units to which the
goodwill is allocated shall:

• represent the lowest level at which the goodwill is
monitored for internal management purposes; and

• not exceed the operating segments.

The allocation of goodwill to these CGU’s is
considered appropriate.

FY23

FY22

ALB

RAF

ALB

RAF

Growth rate for 4-year forecast period (p.a.)

2.5%

10-25%

Discount rate (post-tax)

Terminal growth rate

11.5%

2.0%

11.5%

2.0%

2.5%

11.5%

2.0%

n/a1

1 VIU methodology was used for the RAF CGU with effect from FY23. In FY22, the fair value less cost to sell methodology was used.

The post-tax discount rate of 11.5% has been
determined by estimating the cost of equity that
applies to the ALB and RAF CGUs.

Management conducted the following when testing
the impairment of goodwill:

• revised budgets, forecasts and other assumptions

from previous impairment testing to reflect
the economic conditions at the balance date,
especially to address increased risk and
uncertainty;

The volatility in financial markets and the current
macro economic environment introduces challenges
to impairment testing. A second layer of stress testing
was added with discount rates ranging from 11-15%
which were applied to the base case and stress
scenarios. Management tested the stress scenario
and applied a discount rate of 15%, the recoverable
amount of the CGU exceeded the recorded carrying
value for the ALB and RAF CGUs. The full sensitivity
range is outlined as follows:

ALB Headroom ($ millions)

• considered the impact of macroeconomic

DISCOUNT RATE

11.0%

11.5%

12.0%

15.0%

conditions and considered outcomes where
future cash flows are reduced or operating costs
increase (including interest rate risk and loan book
growth).

In assessing the VIU for goodwill impairment
assessment, the potential impact of macroeconomic
conditions including rising interest rates and inflation
on cash flows and profit growth have been considered
under different scenarios:

1) Base case: Current management view of

macroeconomic environment:

• Loan volume: Growth trajectory in line with current

market conditions

• Margins: Conservative view declining to flat

margin scenario

• Costs: Growth based on CPI assumptions and

investments required to support organic growth of
the business

2) Stress scenario: Assumes severe macroeconomic
downturn resulting in a sustained downturn in
Resimac profitability of no growth over a 4 year
period. The stress scenario indicated sufficient
headroom remains for goodwill impairment
purposes.

Base Case

145

Stress Test Case

117

(14)

(47)

DISCOUNT RATE

11.0%

11.5%

12.0%

15.0%

RAF Headroom ($ millions)

Base Case

Stress Test Case

The recoverable amount of the CGU would not be
less than its carrying value in any scenario. Resimac
management do not believe there are any other
assumptions based on internal or external sources
whereby the quantum of the change will eliminate the
available headroom.

Impairment charge
Management believe potential impacts of the change
in economic environment have been adequately
considered for goodwill impairment testing purposes
at 30 June 2023. Based upon the impairment testing
performed, there is no impairment charge for FY23
(FY22: Nil).

70 |

| 71

2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

11.2. Other intangible assets

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.

Recognise as an operating expense over the term of
the service contract:

• Fee for use of application software

Recognise as an operating expense as the service is
received:

Software-as-a-Service (SaaS) arrangements

SaaS arrangements are service contracts providing
the Group with the right to access the cloud provider’s
application software over the contract period. As
such, the Group does not recognise a software
intangible asset at the contract commencement date.

The following outlines the accounting treatment of
costs incurred in relation to SaaS arrangements:

• Customisation costs
• Configuration costs
• Data conversion and migration costs
• Testing costs
• Training costs

Costs incurred for the development of software code
that enhances or modifies, or creates additional
capability, to existing on-premise systems and
meets the definition of and recognition criteria for an
intangible asset are recognised as intangible software
assets.

13. Interest-bearing liabilities

Debt securities on issue

Corporate debt facilities

Issuance facilities

Current

Non-current

NOTE

FY23

$'000

FY22

$'000

14,125,154

15,840,773

50,000

70,000

295,916

377,682

14,471,070

16,288,455

4,558,387

4,723,652

9,912,683

11,564,803

14,471,070

16,288,455

12. Trade and other payables

CURRENT

Revenue collected in advance

Commissions payable

Accruals

Other creditors

NOTE

FY23

$'000

FY22

$'000

2,234

644

14,594

9,674

27,146

1,179

5,267

13,433

10,183

30,062

RECOGNITION & MEASUREMENT

Trade creditors and other payables are generally settled within 30 day terms and are unsecured. Trade creditors
and other payables are carried at amortised cost and represent liabilities for goods and services provided to the
Group prior to the end of the financial year, are unpaid, and arise when the Group becomes obliged to make future
payments in respect of the purchase of these goods and services.

Revenue collected in advance

Relates to interest income on loans and advances.

Commissions payable

Relates to upfront and trail commission payable to aggregators and brokers.

Accruals and other creditors

Accruals and other creditors are accrued fees and expenses and unsecured payables relating to expenses arising in
the ordinary course of business.

RECOGNITION & MEASUREMENT

All borrowings are initially recognised at fair value of
the consideration received less directly attributable
transaction costs, and subsequently measured at
amortised cost using the effective interest method.

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.

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.

13.1. Debt securities on issue

Warehouse facilities

The warehouse facilities in Special Purpose Vehicles
(SPVs) provide the initial duration financing of
loans and advances to customers. The security for
advances under these facilities is a combination
of fixed and floating charges over all assets of the
warehouse SPVs, including the mortgage security. 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.

The total capacity for the 14 warehouse facilities at 30
June 2023 was AUD 8.3 billion (equivalent) (FY22: 13
warehouse facilities; AUD 8.2 billion (equivalent)).

During the financial year there were no material
breaches to the warehouse agreements. All
warehouse facilities were renewed, on or before their
maturity date.

Bonds (RMBS and ABS)

Bonds issued by the securitisation trusts provide
duration funding for loans and advances originated by
the Group. The bond notes generally have a legal final
maturity of 31 years from issue, and a call option of up
to 5 years post issuance.

The bond holders security is a combination of
fixed and floating charges over all assets of the
securitisation trust. Credit losses arising from the
bonds 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 2023, AUD 2.5 billion
(equivalent) of new bonds were issued (FY22: AUD 5.8
billion (equivalent)). These bond issuances paid down
warehouse facilities creating capacity to fund new
mortgages. During the financial year, there were no
breaches to the terms of the bonds.

72 |

| 73

2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

13.2. Corporate debt facility

As at 30 June 2023, the Company had a $30 million
corporate facility maturing in September 2023. The
Group had an undrawn balance of $30 million at 30
June 2023 (FY22: $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 entire year and as at 30 June 2023, the
Group was compliant with these covenants.

At 30 June 2023, the Group had $50 million in
corporate debt securities (Secured Capital Note) with
a 3 year tenor. The $50 million liability is disclosed
under corporate debt facilities.

The corporate debt facilities are secured by a first-
ranking charge over the beneficial rights to the trust’s
residual income 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.

14. Lease liabilities

Lease liabilities included in the Statement of Financial Position

Balance at 1 July

Addition

Interest incurred

Payment of lease liabilities

Foreign exchange

Balance at 30 June

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

Interest paid

Payment of lease liabilities

FY23

$'000

FY22

$'000

11,097

12,482

411

251

460

(2,164)

(2,089)

(7)

9,369

11,097

1,703

7,666

9,369

1,643

411

1,700

9,397

11,097

1,669

460

(411)

(1,753)

(460)

(1,629)

14.1. Leases

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 lease payments as
an operating expense on a straight-line basis over
the term of the lease unless another systematic
basis is more representative of the time pattern in
which economic benefits from the leased assets are
consumed.

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.

Lease payments included in the measurement of the
lease liability comprise:

• Fixed lease payments (including in-substance
fixed payments), less any lease incentives
receivable;

• Variable lease payments that depend on an index

or rate, initially measured using the index or rate at
the commencement date;

• The 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.

The lease liability is subsequently measured by
increasing 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:

• The lease term has changed or there is a

significant event or change in circumstances
resulting in a change in the assessment of
exercise of a purchase option, in which case the
lease liability is remeasured by discounting the
revised lease payments using a revised discount
rate.

• The lease payments change due to changes in an
index or rate or a change in expected payment
under a guaranteed residual value, in which cases
the lease liability is remeasured by discounting
the revised lease payments using an unchanged
discount rate

• 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 year presented.

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.

74 |

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2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

KEY NUMBERS & POLICIES

15. Other financial liabilities

16. Other liabilities

NOTE

FY23

$'000

FY22

$'000

NON-CURRENT

FY23

$'000

FY22

$'000

Present value of future trail
commission payable

6,850

11,750

Reinsurance claim reserve

4,455

3,476

6,850

11,750

4,455

3,476

Current

Non-current

2,267

3,847

4,583

7,903

6,850

11,750

The reinsurance claim reserve offsets with the
reinsurance claim receivable amount in Note 10.

17. Provisions

RECOGNITION & MEASUREMENT

The Group makes trail commission payments to
mortgage originators based on monthly loan balances
outstanding. No new originations are occurring and
this portfolio is in run off.

FY23

$'000

FY22

$'000

Employee benefits

4,647

6,062

Initial Recognition

Office make good

447

Discharge fee refund

1,695

3,940

Fair value of future trail commission payable was
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.

Other

Subsequent payment

Subsequent to initial recognition, the future trail
commission payable is measured at amortised cost.

Current

Non-current

The carrying amounts of the trail commissions payable
are adjusted to reflect actual and revised estimated
cash flows by calculating the present value of
estimated future cash flows at the effective interest
rates at each reporting date. The resulting adjustment
is recognised as income or expense in the statement
of comprehensive income.

Refer to Note 1.3 for the key estimates and
judgements underlying the remeasurement of the
estimated future cash flows.

550

7,339

10,449

6,415

9,493

924

956

Employee
benefits

$'000

Make
good

$'000

Discharge fee
refund

$'000

Other

$'000

Total

$'000

Balance at 1 July 2022

Provision recognised/(released)

Provision utilised

6,062

2,532

(3,947)

447

3,940

(629)

(1,616)

10,449

550

2,453

(5,563)

Balance at 30 June 2023

4,647

447

1,695

550

7,339

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

• a reliable estimate can be made of the amount of

the obligation.

The amount recognised as a provision is the best
estimate of the consideration required to settle the
present obligation at the end of the reporting period,
taking into account the risks and uncertainties
surrounding the obligation. When a provision is
measured using the cash flows estimated to settle the
present obligation, its carrying amount is the present
value of those cash flows (when the effect of the time
value of money is material).

7,339

10,449

17.1. Employee benefits

A liability is recognised for benefits accruing to
employees where the liability can be measured reliably
and payment is probable, in respect of:

• wages and salaries;

• annual leave;

• long service leave; and

• on-costs relating to the above.

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 benefits
which are not expected to settle within 12 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.

The liability for long service leave is recognised in the
provision for employee benefits. It is measured as the
present value of expected future payments for the
services provided by employees up to the reporting
date.

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. Office 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 expected cost of the refurbishment at the end of
the lease.

17.3. Discharge fee refund

The Group conducted a governance review of loan
agreements during FY22, where the Group identified it
had potentially overcharged a segment of customers
discharge fees from 2006 to 2017. A liability was
recognised for the likely economic outflow to refund
these discharge fees, accrued interest and associated
cost involved in processing the refunds to the affected
customers. Refunds to customers have occurred
throughout FY23.

76 |

| 77

2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

CAPITAL

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

CAPITAL

Capital.

For the year ended
30 June 2023

18. Capital management

The Group’s capital management objectives

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while
maximising the return to stakeholders through the optimisation of the debt and equity balance.

The Group operates a warehouse for securitisation funding model for its lending business and as such makes
decisions on the amount of capital invested in the notes 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 capital structure of the Group consists of net debt (borrowings net of cash balances) and equity of the Group
(comprising issued capital, reserves and retained earnings).

The Group is not subject to any externally imposed capital requirements.

19. Dividends

Declared and paid during the period (fully-franked at 30 percent)

FY23

$'000

FY22

$'000

Final dividend for FY22: $0.04 (FY21: $0.04)

16,1161

16,336

Interim dividend for FY23: $0.04 (Interim FY22: $0.04)

16,0572

16,352

Proposed and unrecognised as a liability (fully-franked at 30 percent)

Final dividend for FY23: $0.04 (FY22: $0.04)

32,173

32,679

16,065

16,277

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 credit balance

EQUITY

Issued capital

Reserves

Retained earnings

NOTE

FY23

$'000

FY22

$'000

111,990

114,935

(19,589)

(25,466)

322,872

288,599

415,273

378,068

Franking credits available for future years at 30% adjusted for the
payment of income tax and dividends receivable or payable

118,068

95,073

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.

(6,885)

(6,976)

78 |

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2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

CAPITAL

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

CAPITAL

20. Issued capital and reserves

20.2. 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.

Issued capital

Treasury shares

Share capital

Reverse acquisition reserve1

Balance at 30 June

FY23

$'000

FY22

$'000

175,806

180,998

(2,275)

(4,522)

173,531

176,476

(61,541)

111,990

114,935

1 As a result of reverse acquisition accounting in the Resimac/Homeloans merger, an 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.

Balance at 1 July 2021

Allocation of shares under LTI#1 (Tranche 2)

Allocation of shares under Employee Share Plan

Acquisition of shares (average price: $1.48 per share)

Issued capital as at 30 June 2023 was $175,805,688 (401,622,340 ordinary shares).

Balance at 30 June 2022

Allocation of shares under LTI#2

Allocation of shares under Employee Share Plan

Allocation of shares under LTI#1 Tranche 3

Balance at 30 June 2023

Movements in issued capital during the year relate to the acquisition of 5,290,163 shares for $5,192,468 (average
price of $0.98 per share) under the Group’s on market share buyback scheme. These shares were cancelled prior to
30 June 2023.

20.1. Issued capital

No. of shares -
Thousands

$'000

Balance at 1 July 2021

408,404

183,011

Issue of shares under the DRP:

• FY21 Dividend on 21 September 2021

• HY22 Dividend on 24 March 2022

388

603

837

957

Share buyback cancelled shares (average price: $1.53 per share)

(2,483)

(3,807)

Balance at 30 June 2022

406,912

180,998

Share buyback cancelled shares (average price: $0.98 per share)

(5,290)

(5,192)

Balance at 30 June 2023

401,622

175,806

Fully paid ordinary shares, which have no par value, carry one vote per share and carry a right to dividends.

No. of shares -
Thousands

$'000

540

(300)

(100)

2,785

2,925

(785)

(200)

(300)

1,640

1,336

(740)

(192)

4,118

4,522

(1,485)

(305)

(457)

2,275

80 |

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2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

CAPITAL

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

CAPITAL

20.3. Reserves (net of income tax) and retained earnings

RESERVES

Retained
earnings

Cash flow
hedge
reserve

Foreign
currency
translation
reserve

Fair value
reserve

Share-
based
payment
reserve

Other
reserve

Non-
controlling
interest

$'000

Balance at 1 July 2021

219,131

(9,917)

(55)

(2,373)

2,201

(7,982)

Profit after tax

102,147

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

(32,679)

(2,714)

(1,236)

(1,683)

(1,707)

Balance at 30 June 2022

288,599

(12,631)

(1,291)

(4,056)

494

(7,982)

Balance at 1 July 2022

288,599

(12,631)

(1,291)

(4,056)

494

(7,982)

Acquisition of non-controlling interest

Profit after tax

66,446

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

(32,173)

8,1411

789

(1,614)

(1,439)

20.4. Nature and purpose of reserves

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 of the Group's New Zealand
operations 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.

Other reserve

Other reserves represent the recognition made
directly in equity for the difference between the
amount by which the Non-Controlling Interest (NCI)
was adjusted, and the fair value of consideration paid
on Resimac’s acquisition of the remaining 40% shares
of RAF on 1 February 2021.

21. Earnings per share

FY23

FY22

Profit attributable to ordinary equity holders of the parent ($'000)

66,446

102,147

WANOS1 used in the calculation of basic EPS (shares, thousands)

402,215

407,743

Dilutive effect of share options

1,054

2,498

WANOS1 used in the calculation of diluted EPS (shares, thousands)

403,269

410,241

EARNINGS PER SHARE

Basic (cents per share)

Diluted (cents per share)

1 Weighted average number of shares.

Calculation of earnings per share

16.52

16.48

25.05

24.90

Balance at 30 June 2023

322,872

(4,490)

(502)

(5,670)

(945)

(7,982)

110

21.1. Basic earnings per share

21.2. Diluted earnings per share

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
equity (other than dividends), divided by the WANOS
adjusted for any bonus element.

Diluted earnings per share is calculated by:

• dividing the net profit attributable to ordinary

equity holders of the parent; by the

• WANOS outstanding during the year; plus

• the WANOS that would be issued on the

conversion of all the dilutive potential ordinary
options or rights into ordinary shares.

1 The change in fair value of cash flow hedges (net of tax) includes: a) gross change in fair value of $69,421,000 b) reclassification from cash flow

hedge reserve to profit or loss of $(57,803,000) and c) tax impact of $(3,477,000).

82 |

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2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

RISK

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

RISK

Risk.

For the year ended
30 June 2023

22. Financial assets and financial liabilities

The Group holds the following financial instruments:

Basis of
measurement

NOTE

FINANCIAL ASSETS

Cash and cash equivalents

Amortised cost

Trade and other receivables (excluding prepayments)

Amortised cost

Loans and advances

Short-term investment

Equity in ASX Listed Companies

Equity in Unlisted Companies

Amortised cost

FVOCI

FVTPL

Loans to related party

Amortised cost

Derivative financial assets – Cross currency swaps

Derivative financial assets – Interest rate swaps

Derivative financial assets – Overnight index swaps

FVCHR

FVTPL

FINANCIAL LIABILITIES

Trade and other payables

Interest-bearing liabilities

Lease liabilities

Amortised cost

Present value of trail commission payable

Amortised cost

Derivative financial Liabilities – Overnight index swaps

FVTPL

22.1. Fair values measurements and 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

Equity in ASX Listed
Companies

Equity in Unlisted
Companies

Fair value
hierarchy

Valuation technique(s)
and key input(s)

Level 1

Level 3

Most recent traded price and other available
market information.

Acquisition value, financial performance since
acquisition.
Subsequent capital raise since acquisition
adjusted for changes in market and
macroeconomic factors.

FY23

$'000

FY22

$'000

17,077

15,963

3,510

7,260

Interest rate swaps

Level 2

Discounted cash flow.
Forward interest rates, contract interest rates.

20,722

27,252

Cross currency swaps

Level 2

Discounted cash flow.
Forward interest rates, contract interest rates.

4,474

11,400

Overnight index swaps

Level 2

Discounted cash flow.
Forward interest rates, contract interest rates.

568

FY23

$'000

FY22

$'000

1,085,417

932,781

1,095

3,130

13,735,635

15,669,860

17,077

3,510

8,000

4,474

4,760

260

15,963

7,260

11,400

15,962

27,252

FINANCIAL LIABILITIES

568

14,875,930

16,668,474

27,146

30,062

14,471,070

16,288,455

9,369

6,850

426

11,097

11,750

235

14,514,861

16,341,599

Overnight index swaps

Level 2

Discounted cash flow.
Forward interest rates, contract interest rates.

426

235

In the year to 30 June 2023 there has been no change in the fair value hierarchy or the valuation
techniques applied to any of the balances above.

For further information on the use of derivatives refer to Note 23 Financial risk management.

84 |

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2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

RISK

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

RISK

22.1.2. Fair value of financial assets and liabilities
that are not measured at fair value (but fair value
disclosures are required)

• its contractual terms give rise on specified dates

to cash flows that are solely payments of principal
and interest on the principal amount outstanding.

With the exception of the future trail commission
receivable and payable that are 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.

22.2. Financial assets and liabilities

22.2.1. Recognition and initial measurement

All 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.

22.2.2. Classification and 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 cash flow hedge reserve

(FVCHR) – cash flow hedges

• 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 of the first reporting period following the
change in the business model.

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

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.

See Note 23.3 for recognition and measurement of
derivatives designated as cash flow hedges.

All financial assets not classified as measured at
amortised cost or FVOCI or FVCHR as described
above are measured as FVTPL. This includes the
Group’s overnight index swaps and majority of interest
rate swaps 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 or at FVCHR 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:

• how the performance of the financial assets held
within 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

• how managers of the business are compensated
(for 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.

In assessing whether the contractual cash 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 interest criterion if the
prepayment amount substantially represents 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.

22.2.2.4. Financial assets – Subsequent
measurement 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.

These assets are subsequently
measured at amortised cost
using the effective interest
method. The amortised cost
is reduced by expected
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. In disposal or
derecognition of investment
the cumulative gain or loss
is not reclassified to profit or
loss, instead it is transferred to
retained earnings.

Derivatives at
FVCHR

See Note 23.3 for derivatives
designated as cash flow
hedges.

86 |

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2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

RISK

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

RISK

22.2.2.5. Financial liabilities – Classification,
subsequent measurement and gains and losses

Financial liabilities are classified as either financial
liabilities at FVPTL or other financial liabilities.

Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL where
the liability is either held for trading or designated at
fair value through profit or loss.

A financial liability is held for trading if:

• it has been incurred principally for the purpose of

repurchasing it in the near term; or

• 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 both,
which is managed and its performance evaluated
on a fair value basis, in accordance with the
Group’s documented risk management or
investment strategy, and information about the
grouping is provided internally on that basis; or

• it forms part of a contract containing one or more
embedded derivatives, and AASB 9 permits the
entire combined contract to be designated as at
FVTPL.

Financial liabilities at FVTPL are stated at fair value
with any gains or losses arising on remeasurement
recognised in profit or loss. The net gain or loss
recognised in profit or loss incorporates any interest
paid on the financial liability and is included in the
‘other gains and losses' line item.

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 period, to the net
carrying amount on initial 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

The Group derecognises a financial liability when its
contractual obligations are discharged or cancelled,
or expire. The Group also derecognises a financial
liability when its terms are modified and the cash
flows of the modified liability are substantially
different, in which case a new financial liability based
on the modified 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

22.2.4. Modification of financial instruments

A financial instrument is modified when its original
contractual cash flows are renegotiated or modified.
A financial asset that is renegotiated is derecognised
if the rights to receive cash flows from the existing
agreement have expired, either through replacement
by a new agreement or the existing terms are modified
to that effect. A financial liability that is renegotiated
is derecognised if the existing agreement is cancelled
and a new agreement is made on substantially
different terms or if that existing terms are modified
such that the renegotiated financial instrument is a
substantially different financial instrument.

Where the modification results in derecognition of
the original financial instrument, the new financial
instrument is recorded initially at its fair value and the
resulting difference is recognised in profit or loss in
accordance with the nature of the financial instrument
as described in the derecognition of financial assets
and liabilities policy.

For financial instruments measured at amortised cost,
and for debt financial assets measured at FVOCI,
when modification does not result in derecognition,
a gain or loss is recognised in profit or loss in
accordance with the nature of the financial instrument
as described in the derecognition of financial assets
and liabilities policy. The gain or loss is measured
as the adjustment of the gross carrying amount to
reflect the renegotiated or modified contractual cash
flows, discounted at the instrument’s original effective
interest rate.

22.2.5. Impairment of financial assets

The Group recognises loss allowances for expected
credit loss (ECL) on:

• Trade and other receivables

• Loans and advances measured at amortised cost

• Contract assets

• Lease receivables

The Group applies the following approach for
measuring credit provisions:

• Specific Provisions (Stage 3);

• ECL modelled Collective Provision in line with

AASB 9 requirements; and

• Post model overlays including macroeconomic,

model and management overlays.

ECL’s are monitored regularly in conjunction with
monthly hardship and arrears metrics provided to
the Group’s Asset and Liabilities Committee (ALCO).
The Group takes a tailored loan by loan approach to
managing credit risk.

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 individual underlying
exposure

(b) loss given default: the LGD is an estimate of
the severity of loss following a default event,
taking into consideration the mitigating effect
of mortgage insurance if applicable, collateral
and time value of money. Mortgage insurance
is reflected indirectly in the LGD, as mortgage
insured loans are not expected to incur loss
following default.

(d) Significant increase in credit risk: An asset moves

to stage 2 when its credit risk has increased
significantly since initial recognition. A significant
increase in credit risk is identified before the
exposure has defaulted and at the latest when
exposure becomes 31 days past due. 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 readily available, including
both quantitative and qualitative information
and analysis, based on the Group’s historical
experience.

(e) Post model overlays: Management apply various

overlays to ensure the Group has sufficient
Balance Sheet coverage for known and potential
credit risk factors that are not modelled in the
above assumptions including:

Model risk overlay – applied by management to the
base ECL model for potential errors in development
and implementation of any of the quantitative
elements underpinning the model. Model risk overlay
is applied at 20% of modelled ECL (base ECL and
macroeconomic model overlay).

Macroeconomic overlay – overlaid to the base
ECL model to provide for potential macroeconomic
factors not considered in the ECL model output (e.g.
rising unemployment, house price decline, low wage
growth). As part of the forward-looking assessment,
the Group has considered factors including macro-
economic forecast and outlook, housing price index,
GDP growth, unemployment rates and interest rates.

Management overlay – applied by management where
higher Balance Sheet provision coverage is deemed
appropriate.

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The collective provision coverage of the Group has
been increased by modelling three hypothetical
downside macroeconomic scenarios. These
scenarios allow the Group to increase coverage for
potential scenarios that may occur in the future,
in addition to the base ECL model which uses the
preceding 48 months of arrears and loss history. The
macroeconomic scenarios are based on the following
key levers:

• Property prices – underlying securities are

stressed by percentages based on their ranking

on the CoreLogic Hedonic Index property value
bands. These stress tests allow the Group to
assess underlying credit risk on a loan by loan
basis in each of the downside scenarios.

• Probability of default – stress each borrower with a
multiple of their actual PD. The PD stress multiple
increases as the underlying security stress
increases, factoring in the likely macroeconomic
impacts that would be experienced in a
declining property market scenario (e.g. higher
unemployment, lower GDP).

The table below summarises the macroeconomic assumptions used for each of the scenarios. Each scenario is
applied a weighting to aggregate a macroeconomic overlay for inclusion in the Group’s total collective provision.

HOUSE PRICE IMPACT

Lower

Mid

Upper

PROBABILITY OF DEFAULT IMPACT

Prime

Near Prime

Specialist

PROBABILITY OF DEFAULT

Prime

Near Prime

Specialist

Scenario

-5.00%

-10.00%

-15.00%

-7.50%

-15.00%

-20.00%

-10.00%

-20.00%

-25.00%

2.5

4.0

6.0

2.58%

4.28%

4.14%

6.84%

6.20%

10.27%

13.42%

21.48%

32.22%

PROBABILITY WEIGHTING

35.0%

30.0%

The Group measures loss allowances 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 (stage
2), or are credit impaired (stage 3), or if the financial
instrument is a purchased or originated credit-
impaired financial asset (stage 3). If the credit risk on
a financial instrument has not increased significantly
since initial recognition (except for a purchased
or originated credit-impaired financial asset), the
Group measures the loss allowance for that financial
instrument at an amount equal to a 12 month ECL for
stage 1 assets.

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 observable
data about the following events:

• significant financial difficulty of the borrower; or

• breach of contract, such as a default or

delinquency in interest or principal payments; or

• becoming apparent 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

• observable changes in national or local economic

conditions that correlate with default on
receivables.

See Note 23.6 for further details on credit-impaired
financial assets.

Definition of default

The Group considers that default has occurred at 90
days past due.

The Group aligns its approach to credit risk in line
with the segmentation of AASB 9. As such, the ECL
for financial assets measured at amortised cost 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 and the LGD, 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,
the lifetime losses associated with that PD and
LGD, 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. The Group also classifies certain loans
that have a resolved hardship status as stage 2 for an
observation period after the cessation of the hardship
arrangement.

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 (specific)

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.

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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.

Foreign currency denominated profit or
losses.

Cash flow
forecasting
Sensitivity
analysis

Cross currency interest rate
swaps.

Cash flow management and
matching.

Market risk -
interest rate

Mismatch in interest rates between
assets and liabilities.

Investments in equity securities.

Sensitivity
analysis

Interest rate swaps and
overnight index swaps.

Equity investments not held for
trading.

Market risk -
equity
investment
valuation

Credit risk

Loan portfolio and bond exposures,
counterparty risk.

Credit risk
analysis
Rating agency
criteria and
analyses

Diversification, adaptive capital
structures, strong collections/
portfolio management,
rating agency provisions in
transactions documents.

Liquidity risk

Borrowings, derivative financial
liabilities.

Rolling cash flow
forecasts

Availability of committed credit
lines and borrowing facilities,
securitisation, capital relief
transactions, structuring terms
of obligations, diversification of
funders.

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.

23.3. Hedge accounting

Furthermore, at the inception of the hedge and on
an ongoing basis, the Group documents whether
the hedging instrument that is used in a hedging
relationship is effective in offsetting changes
in fair values or cash 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 Group designates certain hedging instruments,
which includes derivatives in respect of foreign
currency and interest rate risks, as cash flow hedges.

• the effect of credit risk does not dominate the
value changes that result from that economic
relationship; and

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 various hedge transactions.

• the hedge value is largely reflective of the hedged

item.

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23.3.1. Cash flow hedges

Hedge accounting is discontinued when:

• the Group revokes the hedging relationship;

30 JUNE 2022 (DISCLOSED IN AUD)

The effective portion of changes in the fair value of
derivatives that are designated and qualify as cash
flow hedges is recognised in other comprehensive
income and accumulated under the heading of cash
flow hedging reserve. The gain or loss relating to the
ineffective portion is recognised immediately in profit
or loss.

Amounts previously recognised in other
comprehensive income and accumulated in equity are
reclassified to profit or loss, in the same line as the
recognised hedged item.

The majority of the Group’s interest rate swaps are
not designated as hedging instruments for accounting
purposes, the changes in the fair value are recognised
immediately in profit or loss for these interest rate
swaps.

• the hedging instrument expires or is sold,

terminated, or exercised; or

• the Group no longer qualifies for hedge

accounting.

Any cumulative gain or loss recognised in other
comprehensive income and accumulated in equity at
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 recognised immediately in profit or loss.

The following table details the amounts relating to
items designated as cash flow hedges:

30 JUNE 2023 (DISCLOSED IN AUD)

USD CCS

JPY CCS

IRS

$'000

Notional amount

1,052,035

450,000

536,432

Average fixed contract rate (FX rate per AUD)

0.72

77.22

Average fixed interest rate

Carrying amount of the hedging instrument

• Assets

• Liabilities

102,769

3.95%

4,760

(98,295)

Total carrying amount of the hedging instrument

102,769

(98,295)

4,760

Change in value of hedging instrument

3,400

(10,326)

4,760

Change in value of hedged item

6,187

7,596

(4,760)

Change in value of hedging instrument recognised in cash flow hedge reserve

9,587

(2,730)

4,760

Hedge ineffectiveness recognised in profit or loss

Amount reclassified from hedge reserve to profit or loss due to:

• FX spot movement

103,264

(87,719)

• Hedging gain/loss recognised on settlement

(55,688)

(17,362)

(299)

Notional amount

Average fixed contract rate (FX rate per AUD)

Carrying amount of the hedging instrument

• Assets

• Liabilities

USD CCS

JPY CCS

$'000

1,794,825

450,000

0.73

77.22

99,369

(87,969)

Total carrying amount of the hedging instrument

99,369

(87,969)

Change in value of hedging instrument

Change in value of hedged item

145,107

(73,202)

(131,617)

55,835

Change in value of hedging instrument recognised in cash flow hedge reserve

13,490

(17,367)

Hedge ineffectiveness recognised in profit or loss

Amount reclassified from hedge reserve to profit or loss

109,451

(80,122)

23.3.2. Derivative financial assets and liabilities

The carrying values are as follows:

DERIVATIVE FINANCIAL ASSETS

Cross currency swaps

Interest rate swaps

Overnight index swaps

DERIVATIVE FINANCIAL LIABILITIES

Overnight index swaps

FY23

$'000

FY22

$'000

4,474

11,400

20,722

27,252

568

25,196

39,220

426

235

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The Group seeks to minimise the effects of foreign
currency and some interest rate exposures by using
derivative instruments to hedge these positions.
Derivatives are initially recognised at fair value at
the date derivative contracts are entered into, and
subsequently measured at their fair value at each
reporting period.

During the period, currency movements drove
changes in valuation of the Groups’ cross currency
swaps hedged to the Group’s US RMBS bonds. These
movements in the derivative balances are matched
with the USD bond liabilities, with the profit/(loss) on
swaps recognised in Other Comprehensive Income.

23.4. Market risk

Market risk is the risk of an adverse impact on the
Group’s earnings resulting from changes in market
factors, such as interest rates, equity prices and
foreign exchange rates.

10bps +/-

Cross currency swaps

Interest rate swaps

23.4.1. Interest rate risk

Interest rate risk is the risk that the Group will
experience deterioration in its financial position as
interest rates change over time.

Interest rate exposure is driven by interest rate
mismatches between assets and liabilities (i.e.
borrowing at floating interest rates and lending with
fixed interest rates). Interest rate risk is managed
by entering into interest rate and overnight index
swaps subject to the Group’s hedging and derivatives
policies.

23.4.2. Interest rate risk – Sensitivity analysis

The majority of the Group’s liabilities are issued
through warehouse facilities and securitisation trusts.
Under such arrangements, the repayment profile of
the bonds is matched to the repayments collected
from the loan assets.

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:

FY23

$'000

FY22

$'000

13,737

15,672

14,375

16,190

In relation to the Group’s interest rate swaps, if interest rates had been 10bps higher/lower and all other variables
were held constant, the Groups:

• profit for the year ended 30 June 2023 would decrease/increase by $0.4 million (FY22: $1.3 million)

• cash flow hedge reserves would decrease/increase by $1.0 million (FY22: Nil).

23.4.3. Interest rate swap contracts

Under interest rate swap contracts, the Group agrees
to exchange the difference between fixed and floating
rate interest amounts calculated on agreed notional
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 below:

FAIR VALUE ASSET

Derivative financial assets

FY23

$'000

FY22

$'000

20,722

27,252

The following table details the notional principal amounts outstanding at the end of the reporting period:

NOTIONAL PRINCIPAL VALUE

Less than 1 year

1 to 2 years

2 to 5 years

FY23

$'000

FY22

$'000

113,962

114,574

229,379

237,079

813,565

788,335

1,156,906

1,139,988

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.

23.4.4. Overnight index swap contracts

Under overnight index swap contracts, the Group
agrees to exchange the difference between the
overnight cash rate plus a margin and 1 month BBSW

on agreed notional principal amounts. Such contracts
enable the Group to mitigate the exposure of basis
differentials in an increasing rates environment, of
its loan and funding book. The fair value of overnight
index 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
below.

FAIR VALUE ASSET

Derivative financial assets

FAIR VALUE LIABILITY

Derivative financial liabilities

FY23

$'000

FY22

$'000

568

426

235

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The following table details the notional principal amounts outstanding at the end of the reporting period:

NOTIONAL PRINCIPAL VALUE

Less than 1 year

1 to 2 years

2 to 5 years

FY23

$'000

FY22

$'000

4,000,000

1,000,000

2,000,000

4,000,000

3,000,000

23.4.5. Corporate interest – Sensitivity analysis

The remainder of the Group’s loan portfolio and liabilities are held in corporate entities. The impact of a potential +/-
10bps change in interest rates on interest revenue and borrowing costs on balances held by the Group for the year
is set 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

FY23

$'000

FY22

$'000

1,085

(1,085)

(50)

933

(933)

(70)

23.4.6. Equity price risk

Equity investments in listed and unlisted shares are
held for strategic rather than trading purposes. The
Group does not actively trade these investments.

23.4.7. Equity investment valuation risk - sensitivity
analysis

If equity prices on listed shares had been 10% higher
/ lower:

• Other comprehensive income would increase/

decrease by $1,708,000 as a result of the changes
in fair value of investments in listed shares (FY22:
$1,596,000).

If fair value assessments on unlisted shares had been
10% higher / lower:

• Net profit for the year ended 30 June 2023 would
increase/decrease by $351,000 as a result of the
changes in fair value of the investments in unlisted
shares (FY22: $726,000); and

23.5. Foreign currency risk

23.5.1. Accounting translation

As at reporting date the Group held cash assets and
loans denominated in New Zealand dollars (NZD).

Fluctuations in the NZD are not expected to have
a material impact on the consolidated statement
of profit or loss or the consolidated statement of
comprehensive income and equity of the Group.

23.5.2. Market risk - foreign exchange on monetary
items

The Group obtains funding denominated in foreign
currencies, consequently, exposure to exchange rate
fluctuations arise. These currencies include USD
and JPY. The Group manages foreign currency risk
through the use of currency derivatives.

The carrying amounts of the Group’s foreign currency
denominated assets and liabilities and notional
principal amounts outstanding at the end of the
reporting period are set out in Note 23.3.1.

activities is managed within its origination and funding
programmes. The Group maintains separate credit
policies for each programme and regularly reviews
and amends policies in line with economic, operating
and funding conditions.

The Group’s approach to credit management utilises a
conservative credit risk framework to ensure that the
following principles are adhered to:

• independence from brokers;

• recognition of the different risks in the various

Group businesses;

23.6. Credit risk management

• credit exposures are systematically controlled and

Credit risk is the risk that a counterparty will fail
to complete its contractual obligations when they
fall due. The consequential loss is the amount of
the financial obligation not paid back, or the loss
incurred in replicating a trading contract with a new
counterparty.

The Group’s primary credit risk exposures relate
to its lending activities in its principally funded
mortgage portfolio and asset finance portfolio. The
Group’s primary lending activities are concentrated
in the Australian and New Zealand market. The
underlying credit risk in the Group’s lending activities
is commensurate with a geographically-diverse
residential mortgage portfolio and asset finance
portfolio.

The Board of Directors is responsible for determining
the Group’s overall appetite for credit risk and
monitoring the quality and performance of the
mortgage portfolio. The credit risk management
operational framework and policy is governed and
managed by the Credit Committee.

The Group does not have any direct counterparty
credit exposure arising from its financing and
securitisation activities. Counterparty risk is governed,
and mitigated where required, by ratings agency
criteria within the securitisation trusts including
exposures to banks, lender’s mortgage insurance
providers and derivative counterparties.

23.6.1. Credit risk in lending

The Group has established lending policies and
procedures to manage the credit risk inherent in
lending. The extent of credit risk in the Group’s lending

monitored;

• credit exposures are regularly reviewed in

accordance with up-to-date credit procedures;
and

• credit exposures include such exposures arising

from derivative transactions.

Each of the Group’s business units are responsible
for managing credit risks that arise in their own areas
with oversight from a Group Credit Committee. It is
the Credit Committee policy to monitor the policies
of all divisions to ensure that the risk of the Group is
monitored appropriately.

The Group Credit Committee will continually monitor
the credit policy taking into account internal and
external factors, to ensure credit policy aligns with the
risk appetite of the Group.

23.6.2. Exposure to credit risk

Loans and advances consist of a large number of
customers, spread across diverse demographic and
geographical areas. Ongoing credit evaluation is
performed on the financial condition of loans and
advances, accounts receivable and other financial
assets.

There is no significant concentration of risk to any
single counterparty.

The credit risk on derivative financial instruments is
limited because the counterparties are banks with
high credit-ratings assigned by international credit-
rating agencies.

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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 credit risk at the reporting date was:

The following table summarises the loans and advances and the expected credit loss by stage and risk category:

NOTE

FY23

$'000

FY22

$'000

MAXIMUM EXPOSURE TO CREDIT RISK

$'000

Stage 1
Collective

Stage 2
Collective

Stage 3
Collective

Stage 3
Specific

$'000

Total

$'000

1,085,417

932,781

Balance as at 30 June 2023

Cash and cash equivalents

Trade and other receivables (excluding prepayments)

Contract assets

Other financial assets

1,095

3,130

13,877

24,077

28,587

23,483

Derivative financial assets

25,196

39,220

1,154,172

1,022,691

Loans and advances at amortised cost (subject to credit risk)

13,736,981

15,672,444

14,891,153

16,695,135

As at 30 June 2023, 100% of the Group’s cash and cash equivalents are held with banks or financial institutions with
a credit rating of AA- or better (FY22: 100%).

23.6.3.1. Loan borrowers

The Group manages credit risk by obtaining security over the loan asset and mortgage insurance for loans, where
required.

In monitoring the credit risk, loans are grouped according to their credit characteristics using credit risk
classification systems. This includes the use of the Loan to Value Ratio (LVR) to assess its exposure to credit risk
from loans originated through the securitisation programme.

23.6.4. Financial guarantees

The Group is exposed to credit risk in relation to financial guarantees given to banks. The Group's maximum
exposure in this respect is the maximum amount the Group could have to pay if the guarantees are called on. Refer
to Note 26.2 for the guarantees in respect of the leases.

Loans and advances

• Mortgage lending

12,614,816

365,141

126,574

6,084

13,112,615

• Asset finance lending

629,738

6,106

• Commercial lending

265

1,228

637,171

265

Total

13,244,819

371,247

126,673

7,312

13,750,051

Balance as at 30 June 2022

Loans and advances

• Mortgage lending

14,923,300

318,070

39,547

6,000

15,286,917

• Asset finance lending

395,159

1,435

• Commercial lending

556

129

303

397,027

556

Total

15,319,015

319,505

39,676

6,304

15,684,500

EXPECTED CREDIT LOSS

Balance as at 30 June 2023

Loans and advances

• Mortgage lending

• Asset finance lending

• Commercial lending

15,448

13,244

11,937

1,837

42,466

1,846

763

712

3,378

Total

17,294

14,007

11,994

2,549

45,844

Balance as at 30 June 2022

Loans and advances

• Mortgage lending

• Asset finance lending

• Commercial lending

23,023

12,720

4,844

4,171

44,757

1,969

178

2,283

Total

24,992

12,801

4,899

4,349

47,041

100 |

| 101

2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

RISK

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

RISK

(30 June 2022: $2.2 million).

23.6.7. Analysis of loans and advances by past due status

The majority of the Group’s exposure to loans and
advances is limited, as they are legally owned by
securitisation trusts with limited recourse to the
Group. Losses on mortgage loans in these entities are
therefore limited to the Group’s investment in notes in
these trusts and the residual income rights of trusts.
The trust structures are designed such that losses
are covered by the income generated from the assets
within the trust before the investment notes are
impaired.

Collateral held

The value of the collateral held as security for loans
in stage 2 and stage 3 collective at 30 June 2023 is
$726.4 million (30 June 2022: $522.8 million).

The value of the collateral held as security for loans in
stage 3 specific loans at 30 June 2023 is $5.1 million

Loans are secured by the Group by having the
property titles registered as a financial interest that
provide the Group first priority over any proceeds
becoming available from the sale of the property. For
Prime insured loans, LMI policies exist to cover 100%
of the principal amount at default plus interest. At 30
June 2023, 97% of the Australian mortgage lending
portfolio is either mortgage insured or originated at an
LVR of below 80%.

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 & ADVANCES AT AMORTISED COST

FY23

FY22

Concentration by region

$'000

New South Wales

Victoria

Queensland

Western Australia

South Australia

Tasmania

Northern Territory

New Zealand

Total

EXPECTED CREDIT LOSS

Concentration by region

New South Wales

Victoria

Queensland

Western Australia

South Australia

Tasmania

Northern Territory

New Zealand

Total

1 Rounded to nearest 100bps.

102 |

4,985,022

3,567,529

2,470,642

922,251

894,862

92,180

59,912

757,653

36%

26%

18%

5,781,932

4,069,813

2,844,067

1,101,971

948,254

103,147

61,760

773,556

37%

26%

18%

13,750,051

100%

15,684,500

100%

$'000

16,374

13,141

7,797

4,059

2,085

232

827

1,329

45,844

36%

29%

17%

15,173

11,202

9,728

5,811

2,856

243

1,410

618

32%

24%

21%

12%

100%

47,041

100%

Under the Group’s monitoring procedures, a significant increase in credit risk is identified 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.

LOANS & ADVANCES AT AMORTISED COST1

0 days and less than 30 days

30 days and less than 60 days

60 days and less than 90 days

90 days and less than 180 days

180 days and less than 270 days

270 days and less than 365 days

365 days and over

Total

1 Includes loans that are collectively and specifically provided for.

EXPECTED CREDIT LOSS

0 days and less than 30 days

30 days and less than 60 days

60 days and less than 90 days

90 days and less than 180 days

180 days and less than 270 days

270 days and less than 365 days

365 days and over

Total

FY23

$'000

FY22

$'000

13,428,879

15,592,251

125,826

41,460

63,915

9,024

77,987

23,364

35,959

9,873

7,612

6,885

4,081

7,435

13,750,051

15,684,500

FY23

$'000

FY22

$'000

25,896

39,206

3,526

3,046

7,742

3,237

1,148

1,249

1,101

558

3,041

802

501

1,832

45,844

47,041

| 103

2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

RISK

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

RISK

23.6.8. Movement in credit exposures

PROVISION FOR IMPAIRMENT LOSSES

$'000

Stage 1
Collective

Stage 2
Collective

Stage 3
Collective

Stage 3
Specific

$'000

Total

$'000

PROVISION FOR IMPAIRMENT LOSSES

$'000

Stage 1
Collective

Stage 2
Collective

Stage 3
Collective

Stage 3
Specific

$'000

Total

$'000

Balance as at 30 June 2022

24,992

12,801

4,899

4,349

47,041

Balance as at 30 June 2021

13,800

14,016

4,310

5,439

37,565

Net transfer between stages

7,252

(5,137)

(978)

(1,137)

Net transfer between stages

5,783

(4,188)

(5,125)

(1,410)

(7,252)

Stage 1 - Collective

(4,414)

Stage 1 - Collective

Stage 2 - Collective

Stage 3 - Collective

Stage 3 - Impaired

(717)

(116)

116

(128)

(145)

5,125

717

1,410

128

145

5,137

978

1,137

Net re-measurement on transfers
between stages

Impact of transfers between stages
and re-measurement

(20,204)

6,800

7,745

1,949

(3,710)

12,040

14,464

11,666

5,161

43,331

Stage 2 - Collective

Stage 3 - Collective

Stage 3 - Impaired

Net re-measurement on transfers
between stages

Impact of transfers between stages
and re-measurement

4,414

441

927

178

(7,822)

2,608

11,761

12,436

4,627

4,215

33,039

(371)

(441)

(178)

(1,224)

(927)

(5,782)

(48)

4,188

(248)

248

688

371

1,223

(4,526)

Net Financial Assets Originated

8,061

1,362

1,418

203

11,044

Net Financial Assets Originated

12,698

363

273

131

13,465

Movements in existing individually
assessed provisions and write-backs

Write-offs

(49)

Movements in existing individually
assessed provisions and write-backs

(3,437)

Write-offs

Discharges/Other

(2,807)

(1,819)

(1,091)

672

(5,045)

Discharges/Other

533

(1)

1,815

(1,970)

158

692

Balance as at 30 June 2023

17,294

14,007

11,993

2,550

45,844

Balance as at 30 June 2022

24,992

12,801

4,899

4,349

47,041

CREDIT EXPOSURE

Balance as at 1 July 2022

15,319,015

319,505

39,676

6,304

15,684,500

Balance as at 1 July 2021

13,453,842

431,457

36,947

12,194

13,934,440

Net transfers between stages and
financial assets originated

(2,074,196)

51,742

86,997

4,445

(1,931,012)

Net transfers between stages and
financial assets originated

1,865,173

(111,952)

2,729

(5,890)

1,750,060

Write-offs

(3,437)

Write-offs

(1,970)

Balance as at 30 June 2023

13,244,819

371,247

126,673

7,312

13,750,051

Balance as at 30 June 2022

15,319,015

319,505

39,676

6,304

15,684,500

104 |

| 105

2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

RISK

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

RISK

23.7. Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an
appropriate liquidity risk management framework for the management of the Group's short, medium and long-term
funding and liquidity management requirements.

The Group’s funding platform currently comprises a mix of:

• warehouse facilities;

• securitisation trusts;

• secured corporate debt facilities; and

• cash.

The majority of the Group’s liabilities represent bonds issued by SPVs through warehouse facilities and
securitisation trusts. Under such arrangements, bondholder recourse is limited to the assets of the relevant SPVs
to which 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, $14.1 billion at 30 June 2023 (FY22: $15.8
billion), they have not all been included in the table below.

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.

FINANCIAL LIABILITIES

$'000

<6 months or
on demand

6-12
months

1-3
years

3-5
years

>5
years

Total
cash flows

Carrying
amount

FY23

Non-derivatives

Trade and other payables

27,146

Interest-bearing liabilities

• Issuance facilities

• Corporate debt

21,110

50,000

143,289

131,517

27,146

295,916

50,000

Present value of future trail
commissions payable

1,227

1,032

2,677

1,373

1,377

7,686

6,850

Lease liabilities

1,087

1,089

4,482

3,886

10,544

9,369

100,570

2,121

150,448

136,776

1,377

391,292

389,281

Derivatives

426

100,996

2,121

150,448

136,776

1,377

391,718

389,707

FY22

Non-derivatives

Trade and other payables

30,062

Interest-bearing liabilities

• Issuance facilities

9,466

26,216

93,728

248,272

• Corporate debt

70,000

30,062

377,682

70,000

Present value of future trail
commissions payable

2,126

1,721

4,240

1,917

1,746

11,750

Lease liabilities

1,083

1,105

4,326

4,665

1,535

12,714

11,097

42,737

29,042

172,294

254,854

3,281

502,208

500,591

Derivatives

235

42,972

29,042

172,294

254,854

3,281

502,443

500,826

23.7.2. Financing facilities

Secured corporate debt facility which may be extended by mutual agreement

Amount used

Amount unused

FY23

$'000

FY22

$'000

30,000

20,000

10,000

30,000

106 |

| 107

2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

GROUP STRUCTURE

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

GROUP STRUCTURE

Group
structure.

For the year ended
30 June 2023

24. Subsidiaries
Details of the Group’s subsidiaries at the end of the reporting period are as follows:

Name of subsidiary

Principal activity

CONTROLLED COMPANIES

Access Network Management Pty Ltd

Mortgage manager

Auspak Financial Services Pty Ltd

Mortgage broker

Place of
incorporation
and operation

Australia

Clarence Street Finance Pty Ltd

Holder of commission agreements

Australia

Clarence Street Funding No.1 Pty Ltd

Special purpose vehicle

Clarence Street Funding No.2 Pty Ltd

Participation unit holder

Clarence Street Funding No.3 Pty Ltd

Special purpose vehicle

Clarence Street Funding No.4 Pty Ltd

Special purpose vehicle

Clarence Street Funding No.6 Pty Ltd

Special purpose vehicle

Clarence Street Funding No.7 Pty Ltd

Special purpose vehicle

Clarence Street Funding No.8 Pty Ltd

Special purpose vehicle

Clarence Street Funding No.9 Pty Ltd

Special purpose vehicle

Clarence Street Funding No.10 Pty Ltd

Special purpose vehicle

Clarence Street Funding No.11 Pty Ltd1

Special purpose vehicle

FAI First Mortgage Pty Ltd

Trust manager and servicer

Homeloans.com.au Pty Ltd

Mortgage lender

Housing Financial Services Pty Ltd

Mortgage originator

Independent Mortgage Corporation Pty Ltd

Mortgage broker

Australia

Resimac Asset Finance Pty Ltd

Asset finance originator and manager

Australia

PROPORTION
OF OWNERSHIP
INTEREST HELD &
VOTING POWER
HELD BY THE
GROUP

FY23

FY22

100

99.9

100

1 Incorporated on 1 November 2022.

108 |

PROPORTION
OF OWNERSHIP
INTEREST HELD &
VOTING POWER
HELD BY THE
GROUP

FY23

FY22

Place of
incorporation
and operation

Name of subsidiary

Principal activity

CONTROLLED COMPANIES

Evergreen Finance Company Pty Ltd2

Lender of record

Australia

100

RAF Structured Finance Pty Ltd

Consumer and commercial lending

Australia

100

SF Mortgage Pty Ltd

Lender of record

Australia

100

Parnell Road Funding No.1 Limited

Special purpose vehicle

New Zealand

100

Parnell Road Funding No.2 Limited

Special purpose vehicle

New Zealand

100

Prime Insurance Group Limited

LMI captive insurer

Bermuda

100

RESIMAC Capital Markets Pty Ltd

Trust manager

Australia

100

RESIMAC Financial Services Limited

NZ Holding company

New Zealand

100

RESIMAC Financial Securities Limited

NZ Trust manager and servicer

New Zealand

100

RESIMAC Home Loans Limited

NZ Lender of record and trustee

New Zealand

100

RESIMAC Limited

Non-bank lender

Australia

100

RESIMAC NZ Home Loans Limited

NZ Holding company

New Zealand

100

RESIMAC Premier Warehouse No.1 Pty Ltd3

Unit Holder

RMC Fiduciary Services Pty Ltd4

Mortgage trustee

RHG Mortgage Corporation Pty Ltd3

Lender of record

RHG Mortgage Securities Pty Ltd3

Mortgage trustee

RHG Home Loan Pty Ltd

Mortgage Originator

The Servicing Company Pty Ltd

Trust servicer

RESIMAC EST PTY LTD

Initial Trustee

23 Degrees Capital Partners Pty Ltd5

Asset finance wholesaler

0508 Home Loans Limited

0800 Home Loans Limited

Clarence Street Funding No.5 Pty Ltd

Fiduciary Services Pty Ltd

National Mutual Pty Ltd

Dormant

Australia

100

New Zealand

100

New Zealand

100

Australia

99.9

Australia

100

RESIMAC Financial Securitisation Limited

Dormant

New Zealand

100

RESIMAC Financial Services Pty Ltd

Dormant

Australia

100

2 Deregistered on 27 November 2022.
3 Ownership interest is 0% however the Group have Board control.
4 Incorporated on 8 June 2022. Ownership interest is 0% however the Group have Board control.
5 Ownership increased to 51% on 1 August 2022.

| 109

2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

GROUP STRUCTURE

Name of subsidiary

Principal activity

CONTROLLED COMPANIES

RESIMAC Leasing Pty Ltd

Homeloans Pty Ltd

CONTROLLED TRUSTS

Dormant

PROPORTION
OF OWNERSHIP
INTEREST HELD &
VOTING POWER
HELD BY THE
GROUP

FY23

FY22

100

Place of
incorporation
and operation

Australia

Avoca Master Trust

Issuer of RMBS

Australia

100

NZF Mortgages Warehouse A Trust

Warehouse mortgages

New Zealand

100

RESIMAC Bastille Master Trust6

Issuer of RMBS

RESIMAC Triomphe Master Trust6

Issuer of RMBS

Australia

100

RESIMAC Versailles Master Trust

Issuer of RMBS

New Zealand

100

RESIMAC Victoire Trust

Warehouse mortgages

New Zealand

100

RESIMAC Premier Series 2021-2

Issuer of RMBS

New Zealand

100

RMT Warehouse Trust No.26

Warehouse mortgages

RMT Securitisation Trust No.76

Issuer of RMBS

RMC Enhanced Income Fund7

Managed Investment Trust

Australia

100

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

GROUP STRUCTURE

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 Group. The consideration transferred in the
acquisition is generally measured at fair value, as are
the identifiable net assets acquired. Any goodwill that
arises is tested annually for impairment. 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.

RAF Trust8

Consumer and commercial lending

Australia

100

25.2. Non-controlling interests (NCI)

International Acceptance Trust

Consumer and commercial lending

Australia

100

Resimac Group Limited Employee Share Trust9

Employee share trust

Australia

6 This does not represent holding in capital units, percentage ownership represents control of these Trusts.
7 Incorporated on 30 March 2022
8 Incorporated on 8 June 2022.
9 Ownership interest is 0% however a 100% owned subsidiary (RESIMAC EST PTY LTD) acts as trustee.

Special purpose entities - securitised trusts and funding warehouses

The Group has established special purpose entities to support the specific funding needs of the Group’s
securitisation programme with the aim to:

• conduct securitisation activities funded by short term warehouse facilities provided by reputable lenders; and

• hold securitised assets and issue bonds.

The special purpose entities meet the criteria of being controlled entities under AASB 10 – Consolidated Financial
Statements.

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 23 Degrees Capital
Partners Pty Ltd, the Group elected to recognise the
non-controlling interests at its proportionate share of
the acquired net identifiable assets.

25.3. Details of acquisition

On 1 August 2022 Resimac exercised the option to
acquire a controlling stake in 23 Degrees Capital
Partners Pty Ltd (operating as Sonder) for a purchase
consideration of $0.9 million, increasing Resimac’s
interest in 23 Degrees Capital Partners Pty Ltd from
15% to 51%.

The total fair value of the purchase consideration for
the 51% ownership in 23 Degrees Capital Partners Pty
Ltd consists of the following:

• $150,000 paid for the acquisition of 15% on 10

August 2021; and

• $900,000 paid for the acquisition of an additional

36% on 1 August 2022.

The assets and liabilities recognised as a result of the
acquisition are as follows:

ASSETS

Cash and cash equivalents

Other assets

Total assets

LIABILITIES

Other liabilities

Total liabilities

Fair value of identified net assets

Less: Non-controlling interest

Add: Goodwill (Refer to Note 11)

Purchase consideration

Fair value

$'000

220

228

(29)

199

(98)

949

1,050

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.

110 |

| 111

2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

UNRECOGNISED ITEMS

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

OTHER

Unrecognised
items.

For the year ended
30 June 2023

26. Commitments and contingencies

26.1. Commitments

On 20 June 2023 Resimac entered in a sale and purchase agreement to purchase a $150 million portfolio of
commercial asset finance loan receivable from Thorn Group Limited (ASX: TGA). The purchase is subject to Thorn
Group Limited shareholder approval and is expected to complete in September 2023.

The Directors were not aware of any other commitments (including capital commitments) as at the end of the
financial year or arising since balance date.

26.2. Contingent liabilities

Lease guarantees

The Group has provided guarantees in respect of the leases over its premises of $992,600 (FY22: $992,600).
The Directors were not aware of any other contingent liabilities as at the end of the financial year or arising since
balance date.

27. Subsequent events

27.1. Final dividend declared

The Board of Resimac Group Ltd declared a fully-franked final dividend of $0.04 per share. The record date will be
8 September 2023. The payment date will be 20 September 2023. The dividend has not been provided for in this
financial report.

27.2. Acquisition of Thorn Group Limited’s asset finance portfolio

Other than the sale and purchase commitment disclosed in Note 26.1, there have been no circumstances arising
since 30 June 2023 that have significantly affected or may significantly affect:

(a) The operations;

(b) The results of those operations; or

Other.

For the year ended
30 June 2023

28. Auditor’s remuneration

DELOITTE TOUCHE TOHMATSU

Audit or review of financial reports

• Group

• Subsidiaries

FY23

$'000

FY22

$'000

366,033

307,757

708,267

705,219

1,074,300

1,012,976

Statutory assurance services required by legislation to be provided by the auditor

95,498

95,120

Other assurance and agreed-upon procedures under other legislation or contractual
arrangements

153,347

218,246

Other services - Tax consulting services

3,990

Total remuneration of Deloitte Touche Tohmatsu

1,323,145

1,330,332

NON DELOITTE TOUCHE TOHMATSU AUDIT FIRMS

Other services

• Tax compliance services

• Tax consulting services

118,616

172,452

44,246

Total remuneration of Non Deloitte Touche Tohmatsu audit firms

118,616

216,698

112 |

| 113

2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

OTHER

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

OTHER

28.1. Non-audit services

The auditor of the Group is Deloitte Touche Tohmatsu (Deloitte). It is the Group’s policy to employ Deloitte on
assignments additional to its statutory audit duties, in compliance with the Group’s independence policies, where
Deloitte’s expertise and experience with the Group are important.

The total non-audit services fees of $153,347 represents 11.6% of the total fees paid or payable to Deloitte and
related practices for the year ended 30 June 2023 (FY22: $222,236).

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.

During the year, the Group entered into the following transaction with a related party that is not a member of the
Group:

INCOME RECEIVED

EXPENSES PAID

Director’s related entity

FY23

$'000

FY22

$'000

FY23

$'000

FY22

$'000

7601

760

2,0002

2,000

1 Interest received on related party loan to Somers Limited.
2 Professional Indemnity and Directors & Officers Liability insurance premiums paid to General Provincial Insurance Ltd. This insurance policy was

entered into at commercial arms length 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:

AMOUNTS OWED
BY RELATED PARTIES

AMOUNTS OWED
TO RELATED PARTIES

FY23

$'000

FY22

$'000

FY23

$'000

FY22

$'000

Director’s related entity3

8,000

Other related parties of Resimac Group Ltd4

15,905

17,806

23,905

17,806

3 Short-term interest bearing loan provided to Somers Limited. Interest is charged on arm’s length terms.
4 Includes residential mortgages to KMP or related parties lent in ordinary course of business at arm’s lengths.

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 1 to 10 of the
remuneration report on pages 26 to 39 of this
financial report designated as audited and
forming part of the Directors’ report.

The remuneration disclosures are for Resimac
KMP only as presented in the Remuneration
report.

KMP COMPENSATION

$'000

FY23

FY22

$'000

Short-term benefits

2,859,007

3,248,560

Post-employment
benefits

134,392

137,500

Long-term benefits

36,116

71,614

Termination
benefits

Share-based
payments

20,767

438,750

413,239

3,489,032

3,870,913

The remuneration of Directors and KMP
is determined by the Remuneration and
Nomination Committee having regard to the
performance of individuals and market trends.

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.

114 |

| 115

2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

OTHER

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

OTHER

30. Parent disclosures

The parent company of the Group, as at and throughout the financial year ended 30 June 2023, was Resimac Group
Ltd.

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:

(Loss)/Profit after tax

Total comprehensive income for the period

FY23

$'000

FY22

$'000

18,333

14,837

416,330

456,856

434,663

471,693

14,510

9,027

31,169

37,309

45,679

46,336

388,984

425,357

185,646

2,214

1,347

201,124

238,364

388,984

425,357

(4,834)

180,658

(4,834)

180,658

30.1. Guarantees, contingent liabilities and
contingent assets

At 30 June 2023, there are no financial guarantees,
contingent assets or contingent liabilities with respect
to the parent company. (FY22: 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.

31. Share-based payments

31.1. Employee share option plan of the Company

The Company has a share option scheme (pursuant
to the Resimac Group Ltd Employee Share Option and
Rights Plan) for senior employees of the Company. In
accordance with the terms of the Plan, as approved
by shareholders at the 2017 Annual General Meeting,
senior employees may be granted options to purchase
ordinary shares.

Each employee share option converts into one
ordinary share of the Company on exercise. No
amounts are paid or payable by the recipient on
receipt of the option. The options carry neither
rights to dividends nor voting rights. Options may be
exercised at any time from the date of vesting to the
date of their expiry.

Long-Term Incentive (LTI#1) Share Options - CEOs

Resimac offered the CEO Scott McWilliam the
opportunity to purchase 900,000 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 to remain employed
with the Company to the respective vesting date
associated with each tranche.

Tranche 1 and 2 of the share options were exercised
in FY21 and FY22, respectively, and Tranche 3 was
exercised in June 2023.

Long-Term Incentive (LTI#2) Share Options – CEO
and General Managers (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 $2.4 million.
The options were granted on 15 August 2019 and
the vesting date for all options is 31 August 2022,
subject to the Group achieving Net Profit After Tax
(NPAT) growth hurdles, digital transformation hurdles,
compliance hurdles and remaining employed with the
Group until the vesting date.

The LTI#1 and LTI#2 are administered by The Trustee
for the Resimac Group Limited Employee Share Trust.
The trust is consolidated in accordance with Note 24.
The trustee subscribes for the shares issued by the
Group and allocates to the employees on exercise of

options. Shares held by the trust and not yet allocated
to employees at the end of the reporting period are
shown as treasury shares in the financial statements.

The fair value of share options under LTI#1 and LTI#2
was recognised as an employee benefits expense
with a corresponding increase in equity. The total
expense was recognised over the vesting period,
which was the period over which all of the specified
vesting conditions were 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 of
profit or loss with a corresponding adjustment to
equity.

The fair value of the amounts payable to the CEO and
GMs in respect of cash component is recognised as
an expense with a corresponding increase in liabilities,
over the 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.

A cash component LTI of $1.7 million was paid to the
CEO and senior management in September 2022.
Furthermore 785,000 share options were exercised in
September 2022.

Employee Share Plan (ESP)

The Group commenced the Resimac Group Employee
Share Scheme (ESS) in March 2021 whereby eligible
employees are offered up to $1,000 worth of fully paid
Resimac ordinary shares for no cash consideration.

Shares allocated under the ESS cannot be sold until
the earlier of three years after allocation or the time
when the participant is no longer employed by the
Group.

The ESS offer for FY23 was made on 10 October
2022. A total of 195 (FY22: 190) staff participated in
this offer. The participants were each allocated 1,025
(FY22: 524) fully allocated shares based on the offer
amount of $1,000 and the 5 day volume weighted
average price (VWAP) of $0.9754 (FY22: $1.9065),
resulting in a total of 199,875 (FY22: 99,560) shares
being allocated. The shares were allocated to staff for
no cash consideration. For the financial year ended 30
June 2023, share-based payment expense relating to
the ESS totalled $191,880 (FY22: $183,190).

116 |

| 117

2023 ANNUAL REPORTRESIMAC GROUP LTD| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

OTHER

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

OTHER

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118 |

| 119

2023 ANNUAL REPORTRESIMAC GROUP LTD

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

OTHER

| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

OTHER

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:

Number of
LTI options

Number of
ESP options

Number
of options
total

Weighted
average
fair value
($)

LTI #1

LTI #2

LTI #1

LTI #2

ESP

Unvested options at 1 July 2022

- 3,525,000

0.20

Vested options at 1 July 2022

300,000

0.09

Options held at 1 July 2022

300,000 3,525,000

- 3,825,000

0.09

0.20

Granted during the year

199,875

Exercised during the year

(300,000)

(785,000)

(199,875)

(1,284,875)

Unvested options at 30 June 2023

Vested options at 30 June 2023

2,740,000

Options held at 30 June 2023

- 2,740,000

1.27

0.96

0.20

31.4. Share options exercised during the period

The Trustee for the Resimac Group Limited Employee Share Trust allocated 785,000 treasury shares to GMs and
300,000 treasury shares to the CEO on their exercise of LTI#2 and LTI#1 share options on 6 September 2022 and 16
June 2023, respectively. 199,875 shares are held in the Trust on behalf of the employees under the ESP.

32. Other accounting policies

32.1. Application of new and revised accounting
standards

32.2. New and revised accounting standards and
interpretations on issue but not yet effective

The Group has applied the required amendments to
Standards and Interpretations that are relevant to its
operations and mandatorily effective for the first time
for the financial year commencing 1 July 2022. These
amendments did not have any material impact on
the disclosures or on the amounts recognised in the
consolidated financial statements.

Certain new accounting standards and interpretations
have been published that are not mandatory for 30
June 2023 reporting periods and have not been early
adopted by the Group. The Group’s assessment of the
impact of these new standards and interpretations is
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 2021-2
Amendments to Australian Accounting Standards – Disclosure of Accounting Policies
and Definition of Accounting Estimates

AASB 2021-5
Amendments to Australian Accounting Standards – Deferred Tax related to Assets and
Liabilities arising from a Single Transaction

AASB 2022-1
Amendments to Australian Accounting Standards – Initial Application of AASB 9
Financial Instruments – Comparative Information

AASB 17
Insurance Contracts

AASB 2020-1
Amendments to Australian Accounting Standards – Classification of Liabilities as Current
or Non-current; AASB 2020-6 Amendments to Australian Accounting Standards –
Classification of Liabilities as Current or Non-current – Deferral of effective date; and
IASB Amendment Non-current Liabilities with Covenants

Effective for annual
reporting periods
beginning on or after:

1 July 2023

1 July 2024

The standards and interpretations listed above are not
expected to have a material impact on financial results
or financial position on adoption.

32.3. Goods and 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.

120 |

| 121

2023 ANNUAL REPORTRESIMAC GROUP LTD| DIRECTORS' DECLARATION

| INDEPENDENT AUDITOR'S DECLARATION

Directors'
declaration.

Resimac Group Ltd
and its controlled entities

The Directors declare that:

Deloitte Touche Tohmatsu
ABN 74 490 121 060

Quay Quarter Tower
Level 46, 50 Bridge St
Sydney, NSW
Australia, 2000

Tel: +61 2 9322 7000
Fax: +61 2 9322 7001
www.deloitte.com.au

28th August 2023

The Board of Directors
Resimac Group Limited
Level 9, 45 Clarence Street
Sydney, NSW, 2000

Dear Board Members

(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;

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

AAuuddiittoorr’’ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn ttoo RReessiimmaacc GGrroouupp LLiimmiitteedd

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 Group Limited for the year ended 30 June
2023, I declare that to the best of my knowledge and belief, there have been no contraventions of:

(i)

(ii)

The auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

Any applicable code of professional conduct in relation to the audit.

(d) the Directors have been given the declarations required by s295.A of the Corporations Act 2001.

Yours faithfully

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
28 August 2023

DELOITTE TOUCHE TOHMATSU

Heather Baister
Partner
Chartered Accountants

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Asia Pacific Limited and the Deloitte organisation.

122 |

| 123

2023 ANNUAL REPORTRESIMAC GROUP LTD

| INDEPENDENT AUDITOR'S REPORT

Deloitte Touche Tohmatsu
ABN 74 490 121 060

Quay Quarter Tower
Level 46, 50 Bridge St
Sydney, NSW
Australia, 2000

Tel: +61 2 9322 7000
Fax: +61 2 9322 7001
www.deloitte.com.au

IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt ttoo tthhee MMeemmbbeerrss ooff RReessiimmaacc GGrroouupp LLiimmiitteedd

RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt

Opinion

We have audited the financial report of Resimac Group Limited (the “Company”) and its subsidiaries (the
“Group”) which comprises the consolidated statement of financial position as at 30 June 2023, 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 accounting policies and other explanatory information,
and the directors’ declaration.

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act

2001, including:

• Giving a true and fair view of the Group’s financial position as at 30 June 2023 and of their financial

performance for the year then ended; and

• Complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the 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.

We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s
report.

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report 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.

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Asia Pacific Limited and the Deloitte organisation.

KKeeyy AAuuddiitt MMaatttteerr

IImmppaaiirrmmeenntt ooff llooaannss aanndd aaddvvaanncceess

As at 30 June 2023, the Group has recognised
provisions amounting to $45.8m for impairment
losses on loans and advances held at amortised
cost in accordance with the Expected Credit Loss
(ECL) approach required under AASB 9 Financial
Instruments as disclosed in Notes 6, 22 and 23.

Loans and advances subject to provisioning using
the ECL model include the residential lending
portfolio, asset
loans
approved but not yet advanced.

finance portfolio and

HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt
MMaatttteerr
Our audit procedures performed in conjunction with our
specialists included, but were not limited to:

Testing the design and implementation of relevant
controls over the impairment provision including:

•

The accuracy of data inputs used in the ECL
calculation;
The selection and application of assumptions
used in the model; and
The ongoing monitoring and identification of
loans displaying indicators of impairment and
whether they are migrating on a timely basis to
appropriate stages in accordance with AASB 9.

Significant management judgement was necessary
in determining expected credit losses, including:

AAsssseessssiinngg iimmppaaiirrmmeenntt mmooddeell aaddeeqquuaaccyy

• The application of the requirements of the
Australian Accounting Standards as reflected in the
Group’s ECL model particularly in light of the
current economic environment and the impacts of
increased interest rates on the variable loan
portfolio;
• The identification of exposures with a significant
movement in credit quality to determine whether
a 12-month or lifetime ECL should be recognised;
and
• Assumptions used in the ECL model such as the
financial condition of the counterparty, repayment
capacity and forward-looking macroeconomic
factors as disclosed in Notes 6, 22 and 23.

We assessed the adequacy and completeness of
management’s
in
determining
loss provision. Our
procedures included, but were not limited to:

developed model

impairment

internally

the

•

Assessing whether management’s model
adequately addresses the requirements of the
Australian Accounting Standards;
Evaluating management’s assessment of the
impact of the changing economic environment
on the loan portfolio and as a result, the ECL;
Testing on a sample basis, individual exposures
to assess if they are classified into appropriate
default stages and aging buckets for the purpose
of determining the impairment loss provision;
Assessing assumptions driving Probabilities of
Default (PD), Loss Given Default (LGD) and
Exposure at Default (EAD);
Assessing management overlays to the modelled
collective provision by
the
coverage provided by the collective impairment
provision (including overlays) to the loan book,
taking into account recent history, performance
and a range of economic factors that could
impact the relevant portfolios; and
Assessing the completeness of the credit loss
provision.

recalculating

We also assessed appropriateness of the disclosures in
Notes 6,22 and 23 to the financial statements

124 |

| 125

2023 ANNUAL REPORTRESIMAC GROUP LTD
| INDEPENDENT AUDITOR'S REPORT

| INDEPENDENT AUDITOR'S REPORT

KKeeyy AAuuddiitt MMaatttteerr

Reliance on automated processes and controls –
system implementation and migration.

The Group utilises loan management Information
Technology (IT) infrastructure for the recording,
processing, and presentation of loan level
information for a high volume of transactions.
The Group’s financial reporting is reliant upon the
information within this IT infrastructure and the
IT controls over business process which support
financial reporting.

We considered this to be a key audit matter due to
data migration initiatives undertaken during the
financial year between loan management systems
which impact the resultant loan level information
presented in the financial report.

•

Assessing the governance and Group level controls
across the IT environment and assessing the design
and testing the implementation and operating
effectiveness of controls across:

The User Access Management Lifecycle,
including how users are on-boarded,
reviewed, and removed on a timely basis
for critical IT applications and supporting
infrastructure;
Change Management including how
changes are initiated, documented,
approved, tested, and authorised; and
Automated business process controls
including those relating to enforcing
segregation of duties.

Assessing the completeness and accuracy of the
data transferred as part of the system migration.
Assessing the consistency of the configuration
related to reports and automated controls between
the previous system and the new system including
the calculation of interest.

Other Information

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 2023 but does not include the financial report and our
auditor’s report thereon.

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

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed,
we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Report

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

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

Auditor’s Responsibilities for the Audit of the Financial Report

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

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 fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.

• 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 internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and

related disclosures made by the directors.

• 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.

• 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.

• Obtain sufficient appropriate audit evidence regarding the financial information of the 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.

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.

126 |

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2023 ANNUAL REPORTRESIMAC GROUP LTD
| INDEPENDENT AUDITOR'S REPORT

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.

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.

RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt

Opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 12 to 28 of the Directors’ Report for the year ended
30 June 2023..

In our opinion, the Remuneration Report of Resimac Group Limited, for the year ended 30 June 2023, complies
with section 300A of the Corporations Act 2001.

Responsibilities

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

DELOITTE TOUCHE TOHMATSU

Heather Baister
Partner
Chartered Accountants

Sydney, 28th August 2023

128 |

| 129

2023 ANNUAL REPORTRESIMAC GROUP LTDShareholder
information.

Additional information required by the ASX and not disclosed elsewhere in this report is set out below. The
information is current as at 19 September 2023.

a) Number of holders of equity securities

Ordinary share capital: 401,622,340 paid ordinary shares are held by 2,770 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 and their holdings

The number of equity securities by size of holding is set out below:

Total holders

Units

% Units

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

729

964

350

611

116

378,229

2,559,768

2,729,348

19,646,818

376,308,177

2,770

401,622,340

0.09

0.64

0.68

4.89

93.70

100.00

Units

117,600

UNMARKETABLE PARCELS

Minimum parcel size

Holders

Minimum $500.00 parcel at $0.9500 per unit

527

421

130 |

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:

SHAREHOLDER

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

254,468,487

62.48

e) Twenty largest shareholders

The 20 largest shareholders of ordinary shares on the Company's register at 19 September 2023 were:

SHAREHOLDER

JP Morgan Nominees Australia Pty Limited

HSBC Custody Nominees (Australia) Limited

Redbrook Nominees Pty Ltd

Motrose Pty Ltd

Warren John McLeland

National Nominees Limited

Hartley Phillips Securities Pty Ltd (Hartley Phillips Inv Tst A/C)

Moat Investments Pty Ltd (Moat Investment A/C)

Westpac Banking Corporation

Citicorp Nominees Pty Limited

Scanlon Capital Investments Pty Ltd

Acres Holdings Pty Ltd

Mr Scott Bruce Charles McWilliam

RSJSDS Pty Ltd (Salmon Super Fund A/C)

Resimac EST Pty Ltd (Resimac Group EST A/C)

High Pass Holdings Pty Ltd (High Pass Hldgs P/L Sup A/C)

Ralph Lauren 57 Pty Ltd (John James No 2 A/C)

Esselmont Pty Ltd (The Esselmont A/C)

Torryburn Pty Ltd (Torryburn Super Fund A/C)

TICO Pty Ltd

TOTAL

No. of shares

188,364,267

83,708,354

15,793,019

14,500,000

11,920,138

9,657,767

5,031,373

3,427,545

2,493,130

1,893,492

1,791,131

1,496,881

1,446,831

1,323,500

1,265,125

1,191,687

1,073,600

989,749

982,619

903,960

46.90

20.84

3.93

3.61

2.97

2.40

1.25

0.85

0.62

0.47

0.45

0.37

0.36

0.33

0.32

0.30

0.27

0.25

0.24

0.23

349,254,168

86.96

| 131

2023 ANNUAL REPORTRESIMAC GROUP LTD2023 ANNUAL REPORT

Managing your
shareholding.

The Company's share registry is managed by
Computershare Investor Services Pty Limited
(Computershare).

The Investor Centre website is the fastest, easiest
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;

When communicating with Computershare or
accessing your holding online you will need your
Securityholder Reference Number (SRN) or Holder
Identification Number (HIN) as shown on your Issuer
Sponsored / CHESS statements.

You can also contact Computershare by:

Address

Level 3, 60 Carrington Street, Sydney NSW 2000

P. 1300 850 505

 Change your address (for non-CHESS sponsored

E. web.queries@computershare.com.au

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.

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 and 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

Up to date information on the Company can be obtained from the Company's website:
resimac.com.au

Securities exchange listing

The Company's shares are listed on the Australian 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 and Corporate office

Level 9, 45 Clarence Street, Sydney NSW 2000

P. +61 2 9248 0300

E. info@resimac.com.au

W. resimac.com.au

Customer enquiries: 13 38 39

ABN 55 095 034 003

Australian Credit Licence 247829

ASX:RMC

Share registry

Computershare Investor Services Pty Limited

Non-Executive Directors

Warren McLeland, Chairman

Susan Hansen

Duncan Saville

Wayne Spanner

Caroline Waldron

Company Secretary

Peter Fitzpatrick

132 |

| 133
| 133

To view the 2023 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

2023 ANNUAL REPORTRESIMAC GROUP LTDRESIMAC GROUP LTD
2023 ANNUAL REPORT

FOR THE YEAR ENDED 30 JUNE 2023

Level 9, 45 Clarence Street

Sydney NSW 2000 Australia