HUB24 LIMITED - AGM Information 2015

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ASX RELEASE : 23 October 2015

Notice of Annual General Meeting

Please find enclosed the following documents mailed to the shareholders of HUB24 Limited today :

Notice of Annual General Meeting
Proxy form
2015 Annual Report

The Annual General Meeting will be held at 1pm (Sydney time) on Wednesday 25 November 2015 at Level 2, 3 Spring St, Sydney, New South Wales.

For further information please contact: Matthew Haes Company Secretary HUB24 Limited Telephone: + 61 2 8274 6000

HUB24 Limited | ABN 87 124 891 685 | ACN 124 891 685

GPO Box 529, Sydney, NSW 2001 Level 8, Exchange Centre,20 Bridge St, Sydney, NSW 2000 Australia T + 61 2 8274 6000 F 1300 781 689 W hub24.com.au

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23 October 2015

Location of the Annual General Meeting	2
Notice of Annual General Meeting	3
Items of Business	3
Explanatory Memorandum	9
Glossary	15
Annexures	16

This document is important and requires your immediate attention.

Registered Office: Level 8, 20 Bridge Street, Sydney, New South Wales, Australia 2000.

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of the members of HUB24 Limited will be held at Level 2, 3 Spring St, Sydney on Wednesday, 25 November 2015 commencing at 1pm (Sydney time).

HUB24 LIMITED ACN 124 891 685

Registered Office: Level 8, 20 Bridge Street, Sydney, New South Wales, Australia 2000. Tel: +61 2 8274 6000 Fax: +61 2 9247 6428

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of the members of HUB24 Limited will be held at Level 2, 3 Spring St, Sydney, on Wednesday, 25 November 2015 commencing at 1pm (Sydney time).

Business

1. FINANCIAL STATEMENTS AND REPORTS

To receive and consider the Financial Report, the Directors’ Report and the Auditor’s Report for HUB24 Limited and its controlled entities for the year ended 30 June 2015.

Note: There is no requirement for the Shareholders to approve these reports.

2. RESOLUTION 1: REMUNERATION REPORT

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

“THAT the Remuneration Report of the Company for the year ended 30 June 2015 be adopted.”

Noting that each director has a personal interest in their own remuneration from the Company as set out in the Remuneration Report, the Board recommends that Shareholders vote in favour of this Resolution.

Please note:

This resolution is advisory only and does not bind the Company or its directors.
The directors will consider the outcome of the vote and comments made by Shareholders on the Remuneration Report at the Meeting when reviewing the Company's remuneration policies.

3. RESOLUTION 2: RE-ELECTION OF DIRECTOR – IAN LITSTER

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

“THAT Mr Ian Litster, a non-executive director of the Company who retires from the office of Director by rotation in accordance with rule 18.5 of the Constitution and ASX Listing Rule 14.4, being eligible and offering himself for re-election, be re-elected as a Director of the Company.”

The Board (excluding Ian Litster, who abstains from making a recommendation) recommends that Shareholders vote in favour of this Resolution.

4. RESOLUTION 3: RE-ELECTION OF DIRECTOR – HUGH ROBERTSON

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

“THAT Hugh Robertson, a non-executive director of the Company who retires from the office of Director by rotation in accordance with rule 18.5 of the Constitution and ASX Listing Rule 14.4, being eligible and offering himself for re-election, be re-elected as a Director of the Company.”

The Board (excluding Hugh Robertson, who abstains from making a recommendation) recommends that Shareholders vote in favour of this Resolution.

5. RESOLUTION 4: ELECTION OF DIRECTOR – ANTHONY MCDONALD

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

“THAT Anthony McDonald, a non-executive director of the Company who ceases to hold the office of Director in accordance with rule 18.4 of the Constitution and ASX Listing Rule 14.4, being eligible and offering himself for election, be elected a director of the Company in accordance with rule 18.3 of the Company's constitution."

The Board (excluding Anthony McDonald, who abstains from making a recommendation) recommends that Shareholders vote in favour of this Resolution.

6. RESOLUTION 5: APPROVAL OF ISSUE OF OPTIONS TO ANDREW ALCOCK

To consider and, if thought fit, pass the following resolution as an ordinary resolution: "THAT for the purposes of ASX Listing Rule 10.11 and for all other purposes, the issue by the Company of 150,000 options to Andrew Alcock on the terms set out in the Explanatory Memorandum to this Notice of Meeting be approved."

The Board (excluding Andrew Alcock, who abstains from making a recommendation) recommends that Shareholders vote in favour of this Resolution.

7. RESOLUTION 6: APPROVAL OF ISSUE OF SHARES TO ANDREW ALCOCK

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

"THAT for the purposes of ASX Listing Rule 10.11 and for all other purposes, the issue by the Company of 132,371 fully paid ordinary shares to Andrew Alcock, in lieu of 70% of the Short Term Incentive (STI) payable to Andrew Alcock in respect of the financial year ended 30 June 2015 and on the terms set out in the Explanatory Memorandum to this Notice of Meeting, be approved."

The Board (excluding Andrew Alcock, who abstains from making a recommendation) recommends that Shareholders vote in favour of this Resolution.

8. RESOLUTION 7: INCREASING THE MAXIMUM AGGREGATE REMUNERATION OF NON-EXECUTIVE DIRECTORS

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

"THAT for the purposes of rule 19.1 of the Constitution, ASX Listing Rule 10.17 and all other purposes, the maximum aggregate remuneration payable to the non-executive directors of the Company in a financial year be increased by $200,000, from $400,000 to $600,000."

As the directors may have an interest in the outcome of this resolution, they abstain from making a recommendation to shareholders as to how to vote in relation to this resolution.

9. RESOLUTION 8: REFRESH THE CAPITAL RAISING CAPACITY THROUGH SHAREHOLDER RATIFICATION OF PRIOR PLACEMENTS UNDER THE 15% RULE

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

“THAT for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify the prior issues by the Company of:

(a) 5,000,000 fully paid ordinary shares, on 24 March 2015, to certain sophisticated and professional investors; and
(b) 200,159 fully paid ordinary shares, on 1 September 2015, to certain executives of the Company in lieu of short term incentive payments to those executives,

on the terms and conditions set out in the Explanatory Statement which accompanies and forms part of this Notice of Meeting.”

The Board recommends that Shareholders vote in favour of this resolution.

10. RESOLUTION 9: APPOINTMENT OF AUDITOR

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

“THAT Deloitte Touche Tohmatsu, who have consented in writing to act as Auditor of the Company, be appointed Auditor of the Company."

The Board recommends that Shareholders vote in favour of this Resolution.

Voting Exclusions

Voting exclusion statement – Resolution 1 (Remuneration Report) :

The Company will disregard any votes cast on Resolution 1 by:

• a member of the Company's key management personnel ( KMP ) or a closely related party of a KMP;

persons who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed; and

• any associate of a KMP or of any persons who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed.

However, a vote may be cast by such a person if:

• the vote is cast by that person as a proxy in accordance with a direction by the shareholder as to how that person is to vote on the Resolution; and

• the shareholder who directed that person how to vote is entitled to vote on the Resolution (eg. the shareholder is not a KMP or a closely related party of a KMP), or • the voter is the chair of the meeting and the appointment of the Chairman as proxy (by a shareholder who is entitled to vote on the Resolution) does not specify the way the proxy is to vote on the Resolution; and • the appointment expressly authorises the Chairman to exercise the proxy even if the Resolution is connected directly or indirectly with the remuneration of a KMP. The Chairman intends to vote undirected proxies (where he has been appropriately authorised) in favour of this Resolution. Voting exclusion statement – Resolutions 5 and 6 (Issue of Options and Issue of Shares to Andrew Alcock) : The Company will disregard any votes cast on Resolution 5 and Resolution 6 by: • Mr Andrew Alcock; • any associate of Mr Andrew Alcock; and • by a KMP or a closely related party of a KMP, as a proxy. However, the Company need not disregard a vote on Resolution 5 and/or Resolution 6 if: • it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or • it is cast by the Chairman as proxy for a person who is entitled to vote, in accordance with an express authorisation on the Proxy Form. The Chairman intends to vote undirected proxies (where he has been appropriately authorised) in favour of this Resolution. Voting exclusion statement – Resolution 7 (Increasing Maximum Aggregate Annual Non-Executive Director Remuneration) : The Company will disregard any votes cast on Resolution 7 by a director of the Company and any associate of such a director. However, the Company need not disregard a vote on Resolution 7 if: • it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or • it is cast by the Chairman as proxy for a person who is entitled to vote, in accordance with the direction on the Proxy Form to vote as the proxy decides. The Chairman intends to vote undirected proxies (where he has been appropriately authorised) in favour of this Resolution. Voting exclusion statement – Resolution 8 (Refresh of 15% Placement Capacity): The Company will disregard any votes cast on Resolution 8 by: • any person who participated in the issues ( Participant ); and • any associate of a Participant. However, the Company need not disregard a vote on Resolution 8 if: • it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or • it is cast by the Chairman as proxy for a person who is entitled to vote, in accordance with the direction on the Proxy Form to vote as the proxy decides. The Chairman intends to vote undirected proxies (where he has been appropriately authorised) in favour of this resolution.

Explanatory Memorandum

Shareholders are referred to the Explanatory Memorandum accompanying and forming part of this Notice of Meeting.

Entitlement To Vote

It has been determined (in accordance with section 1074E(2)(g)(i) of the Corporations Act and regulation 7.11.37 of the Corporations Regulations) that for the purposes of the Meeting, Shares will be taken to be held by the persons who are the registered Shareholders of the Company at 7.00 p.m. (Sydney time) on Monday, 23 November 2015. Accordingly, Share transfers registered after that time will be disregarded in determining entitlements to attend and vote at the Meeting.

Voting by Proxy

Sections 250BB and 250BC of the Corporations Act apply to voting by proxy. Shareholders and their proxies should be aware of the requirements under the Corporations Act, as they will apply to this meeting. Broadly:

if proxy holders vote, they must cast all directed proxies as directed; and,
any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

You should seek professional advice if you need any further information on this issue.

In accordance with section 249L of the Corporations Act, members are advised of the following:

A Shareholder entitled to attend and vote has a right to appoint a proxy to attend and vote instead of the Shareholder. A proxy need not be a Shareholder and can be either an individual or a representative of a body corporate.
A proxy need not vote on a show of hands, however if a proxy does vote on a show of hands, the proxy must vote as directed.
A Shareholder that is entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If no proportion or number is specified, each proxy may exercise half of the Shareholder’s votes. If a Shareholder appoints two or more proxies that specify different ways to vote on a resolution, neither proxy may vote on a show of hands.
If an appointed proxy is not also the Chairman of the Meeting, the proxy need not vote on a poll, however if the proxy does vote on a poll the proxy must vote as directed by the Shareholder. If a poll is conducted and the proxy holder does not vote, the proxy appointment defaults to the Chairman of the Meeting to vote as directed. If the appointed proxy is the Chairman of the Meeting, the proxy must vote on a poll in the manner directed by the Shareholder.

A Proxy Form accompanies this Notice and to be effective must be received at least 48 hours before the appointed time of the Meeting (ie. before 1pm (Sydney time) on Monday, 23 November 2015) at the Company’s corporate registry:

By Post Boardroom Pty Limited GPO Box 3993 Sydney NSW 2001

By Hand Boardroom Pty Limited Level 12, 255 George Street Sydney, NSW 2000

By Facsimile +61 2 9290 9655

Voting By Attorney

A Shareholder may appoint an attorney to vote on his or her behalf. For an appointment to be effective for the Meeting, the instrument effecting the appointment (or a certified copy of it) must be received by the Company at its registered office or at the Company’s corporate registry listed above, at least 48 hours before the Meeting (ie. before 1pm (Sydney time) on Monday, 23 November 2015).

Corporate Representatives

A body corporate which is a Shareholder, or which has been appointed as a proxy, may appoint an individual to act as its representative at the Meeting. The appointment must comply with the requirements of section 250D of the Corporations Act. The representative should bring to the Meeting evidence of his or her appointment, including any authority under which it is signed, unless it has previously been given to the Company.

Scrutineer

The Company’s registrar, Boardroom Pty Ltd will act as scrutineer for any polls that may be required at the Meeting.

By Order of the Board

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Matthew Haes Company Secretary 23 October 2015

HUB24 LIMITED ANNUAL GENERAL MEETING

EXPLANATORY MEMORANDUM

INTRODUCTION

This Explanatory Memorandum forms part of this Notice of Meeting and has been prepared to provide Shareholders of the Company with sufficient information to consider the Resolutions contained in the accompanying Notice of Annual General Meeting of the Company to be held on Wednesday, 25 November 2015 commencing at 1pm (Sydney time) at Level 2, 3 Spring St, New South Wales, Australia.

The Board recommends that Shareholders read this Explanatory Memorandum carefully and in its entirety before making any decision in relation to the Resolutions.

Resolution 1: Remuneration Report

Shareholders are asked to adopt the Company’s Remuneration Report. The Remuneration Report is in the 2015 Annual Report and is also available on the Company’s website at www.hub24.com.au. The Remuneration Report:

describes the policies behind and structure of, the remuneration arrangements of the Company and the link between the remuneration of employees and the Company’s performance;
sets out the remuneration arrangements in place for each director and for specified senior executives of the Company; and
explains the differences between the bases for remunerating non-executive directors and executives, including any executive directors.

The Corporations Act requires the agenda for an Annual General Meeting to include a resolution that the Remuneration Report be put to the vote. Should 25% or more of the votes cast on this Resolution (in person or by proxy) to approve the Remuneration Report be against approval of that report, then at the 2016 Annual General Meeting the resolution to approve next year's Remuneration Report must be approved by 75% or more of the votes cast to avoid a resolution being put to the 2016 Annual General Meeting to consider a spill of the Board.

A reasonable opportunity for discussion of, and comment on, the Remuneration Report will be provided by the Chairman at the Annual General Meeting.

Noting that each Director has a personal interest in their own remuneration from the Company as set out in the Remuneration Report, the Board recommends that Shareholders vote in favour of the Resolution to adopt the Remuneration Report.

Resolution 2: Re-election of Director – Ian Litster

Pursuant to rule 18.5 of the Constitution, retiring director Ian Litster being eligible to do so, has offered himself for re-election. Mr Litster, a non-executive director of the Company, was last elected by Shareholders at the Company's annual general meeting held on 30 November 2012.

This Resolution seeks Shareholder approval of the re-election of Mr Litster.

Profile of Mr Litster

Mr Litster has over 10 years’ experience in designing and developing software for the financial services industries, particularly in the area of financial planning. He has been the founder of the companies behind the VisiPlan and COIN software packages, two of the leading financial planning systems in Australia. His main areas of expertise are the management of information technology organisations and software development. Ian has a Bachelor Degree in Science (Honours in Mathematics).

The Board (excluding Ian Litster, who abstains from making a recommendation) recommends supporting the re-election of Ian Litster and recommends that Shareholders vote in favour of the Resolution.

Resolution 3: Re-election of Director – Hugh Robertson

Pursuant to rule 18.5 of the Constitution, retiring director Hugh Robertson being eligible to do so, has offered himself for re-election. Mr Robertson, a non-executive director of the Company, was last elected by Shareholders at the Company's annual general meeting held on 30 November 2012.

This Resolution seeks Shareholder approval of the re-election of Mr Robertson.

Profile of Mr Robertson

Mr Robertson has over 25 years’ experience in the financial services industry, commencing his stockbroking career in 1983. During that time he has been involved in a number of successful stockbroking and equity capital markets businesses, including Falkiners Stockbroking and most recently Bell Potter Securities.

Mr Robertson is currently a non-executive director at Oncard International Limited and AMA Group Limited. Previously, Mr Robertson has also held directorships with NSX Ltd, OAMPS Ltd, Catalyst Recruitment Ltd and Bell Potter Ltd (pre-IPO). Mr Robertson was previously a company director of Wentworth Holdings Limited and resigned on 3 September 2013.

The Board (excluding Hugh Robertson, who abstains from making a recommendation) recommends supporting the re-election of Hugh Robertson and recommends that Shareholders vote in favour of the Resolution.

Resolution 4: Election of Director – Anthony McDonald

Pursuant to rule 18.4 of the Constitution, Resolution 4 seeks approval for the election of Mr Anthony (Tony) McDonald as a non-executive Director with effect from the end of the Annual General Meeting.

The Board appointed Mr McDonald as a director of the Company on 1 September 2015, and rule 18.4 of the Constitution and ASX Listing Rule 14.4 both require Mr McDonald to be elected as a Director at the Meeting.

Profile of Mr McDonald

Mr McDonald co-founded financial planning firm Snowball Group Limited in 2000, which merged with Shadforth in 2011 to become ASX-listed SFG Australia Limited, at which time he held the position of Director.

Mr McDonald is also a former director of The Investment Funds Association of Australia (now Financial Services Council), is currently a non-executive director of 8IP Emerging Companies Limited and Chairman of a leading not for profit organisation. As a financial services executive, Mr McDonald worked in a variety of senior roles with the Snowball Group, SFG, Jardine Fleming Holdings Limited (Hong Kong), and Pacific Mutual Australia Limited. Prior to entering the financial services industry, Mr McDonald worked as a solicitor with the two global law firms, Baker & McKenzie and Coudert Brothers.

Mr McDonald holds a Bachelor of Laws (LLB) and a Bachelor of Commerce (Marketing) from the University of NSW.

The Board (excluding Mr McDonald, who abstains from making a recommendation) recommends supporting the election of Mr McDonald and recommends that Shareholders vote in favour of the Resolution.

Resolution 5: Approval of issue of options to Andrew Alcock

An important part of the Company's remuneration practices includes the grant of Options to senior executives. On 14 October 2015, the Company issued 620,000 Options to a number of its senior management on the same terms and conditions to those proposed to be issued to Andrew Alcock under this Resolution. As part of this normal remuneration practice, the Company proposes to issue Options to Andrew Alcock, the Company's Managing Director. Under ASX Listing Rule 10.11, the Company must first obtain the approval of Shareholders before issuing Options to a Director.

Therefore, the purpose of Resolution 5 is to seek Shareholder approval to enable the Company to issue 150,000 Options to Andrew Alcock, the Managing Director of the Company.

If Resolution 5 is passed, the Directors expect that 150,000 Options will be issued to Mr Alcock within 30 days of this Meeting. The Board believes the issue of Options with appropriate performance hurdles (as set out in Annexure A) to KMP, including the Managing Director, is an important alignment of management performance and creation of shareholder wealth.

The Directors presently expect that the funds raised by the Company from the issue of Shares on the exercise of Options will be used for continuing investment in platform development.

Terms of the Options

The terms of the 150,000 Options to be issued to Mr Alcock are set out in Annexure A.

The Board (other than Andrew Alcock, who abstains from making a recommendation) recommends that Shareholders vote in favour of Resolution 5.

Resolution 6: Approval of issue of shares to Andrew Alcock

The Company has resolved to permit several KMP (including Andrew Alcock) to elect to have up to a maximum of 70% of their Short Term Incentive (STI) payable in respect of the financial year ended 30 June 2015 by the issue of fully paid ordinary shares in the Company. As Mr Alcock is a Director of the Company as well as a KMP, Shareholder approval for the issue of Shares to Mr Alcock is required under ASX Listing Rule 10.11.

The Board believes that the issue of Shares in place of cash payments of STI to KMP is an important alignment of management performance and creation of Shareholder wealth. As part of this remuneration strategy, on 1 September 2015, the Company issued a total of 200,159 Shares to certain executives of the Company, excluding Andrew Alcock, at an issue price per Share equal to the VWAP of Shares from 1 July 2015 to 28 August 2015 inclusive (that is, a Share price of $1.56) – please refer to the explanatory notes for Resolution 8 for further details.

As a senior executive, this same offer was made to Andrew Alcock as Managing Director on 1 September 2015 and it is proposed that the Company issue 132,371 Shares to Andrew Alcock in lieu of the cash payment of 70% of the Short Term Incentive (STI) payable to Mr Alcock in respect of the financial year ended 30 June 2015 which is consistent with the approach taken with the Company's other senior executives.

Mr Alcock's STI payable for the financial year ended 30 June 2015 is $295,000. Mr Alcock agreed (subject to Shareholder approval) on 1 September 2015 to take 70% of his STI as Shares, that is, $206,500 worth of Shares at an issue price per Share equal to the VWAP of Shares from 1 July 2015 to 28 August 2015 inclusive (that is, $1.56 per Share).

The 132,371 Shares proposed to be issued to Mr Alcock will be subject to a sale restriction for six months from the date of issue. In all other respects, the 132,371 Shares proposed to be issued to Mr Alcock will rank equally with all other Shares.

As the Shares will be issued in place of 70% of Mr Alcock's STI payable under his employment contract, the $206,500 cash that would otherwise be payable to Mr Alcock will be available for use as working capital for the Company.

If Resolution 6 is passed, the Directors expect that 132,371 Shares will be issued to Mr Alcock within 30 days of this Meeting.

The Board (other than Andrew Alcock, who abstains from making a recommendation) recommends that Shareholders vote in favour of Resolution 6.

Resolution 7: Increase the Maximum Aggregate Remuneration of the Non-executive Directors

ASX Listing Rule 10.17 provides that Shareholder approval is required to increase the total aggregate amount of directors' fees payable to all of its non-executive directors.

The current amount fixed by the Company as the maximum aggregate remuneration payable to the non-executive directors of the Company in a financial year is $400,000.

This Resolution seeks Shareholder approval under rule 19.1 of the Company constitution and ASX Listing Rule 10.17 to increase to the maximum aggregate remuneration payable to the non-executive directors of the Company in a financial year by $200,000 from $400,000 to $600,000.

No increase in the maximum aggregate remuneration has been sought since the Annual General Meeting of the Company held on 26 November 2010 when the existing $400,000 maximum annual amount was approved by the Company's shareholders.

The higher maximum aggregate annual non-executive Director remuneration of $600,000 is also being sought to allow the Company to have the flexibility to increase the number of non-executive director appointments and to enable the Company to seek to attract and retain Directors of the highest calibre. The increase will also provide allowance for future remuneration increases for Directors of high standing in line with industry standards and market practice.

On 8 August 2013, the Company issued a total of 510,000 Options to Mr Bruce Higgins, the Chairman of the Company, with the approval of Shareholders obtained for the purposes of ASX Listing Rule 10.11 on that same day. The Options were issued for nil consideration, have an exercise price of $0.8438 per Share and an expiry date of 8 August 2017. Each of the Options is subject to vesting conditions based on certain Share price hurdles, which are outlined in the Company's notice of extraordinary general meeting dated 9 July 2013 and its Appendix 3B dated 9 August 2013. As at the date of this Notice, a total of 340,000 of these Options have vested.

As the Directors may have an interest in the outcome of this resolution, they abstain from making a recommendation to Shareholders as to how to vote in relation to this resolution.

Resolution 8: Refresh the capital raising capacity through shareholder ratification of placement under the 15% rule

ASX Listing Rule 7.1 provides that, subject to specified exceptions, shareholder approval is required for any issue of, or agreement to issue, equity securities during any twelve month period if the number of securities to be issued exceeds 15% of the number of ordinary securities on issue at the commencement of that twelve month period.

One circumstance where an issue of equity securities is not taken into account in the calculation of this 15% limit is where the issue is approved by shareholders at a general meeting.

ASX Listing Rule 7.4 provides that, where a company's shareholders ratify a previous issue of securities made without approval under ASX Listing Rule 7.1 (provided that the previous issue did not breach ASX Listing Rule 7.1), those securities will be deemed to have been issued with shareholder approval for the purposes of ASX Listing Rule 7.1.

On 24 March 2015, the Company issued a total of 5,000,000 fully paid ordinary shares to certain sophisticated and professional investors by way of a private placement, at an issue price of $1.05 per share. The funds raised from the placement have been used to further strengthen the balance sheet of the Company, support the implementation of the Company's white label agreements and to maintain sufficient flexibility to pursue additional strategic opportunities as they arise. The shares issued pursuant to the placement rank equally with all other existing ordinary shares on issue and none of these shares were issued to related parties of the Company. All of the 5,000,000 shares issued were issued under ASX Listing Rule 7.1.

Shareholder approval to the issue of shares under the placement was not required (and was not obtained) as it did not constitute more than 15% of the Company’s shares.

On 1 September 2015, the Company issued a total of 200,159 fully paid ordinary shares to certain executives of the Company pursuant to an election by executives to receive shares in lieu of short term incentive payments in respect of the year ended 30 June 2015, at an issue price of $1.56 per share. The purpose of the issue was to enable key executives of the Company to take part of their short term incentive entitlement in respect of the financial year ended 30 June 2015 in the form of fully paid ordinary shares so as to further align the interests of those key executives with shareholders and the Company's longer-term performance objectives. The shares issued pursuant to the executive share issue rank equally with all other existing ordinary shares on issue and none of these shares were issued to related parties of the Company. All of the 200,159 shares issued were issued under ASX Listing Rule 7.1 and other than a six month restriction from the issue date on the sale of the shares, the shares are issued on the same terms as existing fully paid ordinary shares issued.

Shareholder approval to the issue of shares under the executive share issue was not required (and was not obtained) as it did not constitute more than 15% of the Company’s shares.

Resolution 8 seeks Shareholder ratification pursuant to ASX Listing Rule 7.4 for the prior issue of the 5,000,000 shares issued under ASX Listing Rule 7.1 on 24 March 2015 and the 200,159 shares issued under ASX Listing Rule 7.1 on 1 September 2015. Though shareholder approval was not sought for either share issue, as a result of the placement and the executive share issue, and if Resolution 7 is not approved, the Company's placement capacity until 24 March 2016 will be around 5% only. Accordingly, by seeking approval under Listing Rule 7.4 for a prior issue of securities, the Company ‘refreshes’ its ability under Listing Rule 7.1 to issue up to 15% of its issued capital within the next twelve months without the requirement to obtain further Shareholder approval under ASX Listing Rule 7.1.

The Directors believe that it is important for, and in the best interests of, the Company to have the ability to issue the maximum number of securities under Listing Rule 7.1 as it enables the Company to move quickly and efficiently to undertake fundraising when necessary.

The Board recommends that Shareholders vote in favour of the resolution.

Resolution 9: Appointment of Auditor

As part of the Company’s periodic review of the professional services provided to the Company by professional services firms, the Company decided to invite proposals from professional accounting firms for the statutory audit of the Company. The decision to invite proposals in respect of the Company's audit is not due to any dissatisfaction with the professional services provided to the Company by its current auditor, BDO East Coast Partnership. Instead, it merely reflects the Company's desire to ensure the Company receives the best possible service from its professional advisers in the most cost effective manner.

The result of this process is that, in compliance with section 329(5) of the Corporations Act, BDO East Coast Partnership is resigning as the Company’s Auditor effective on and from the date of the Meeting. A Consent for Resignation from ASIC has been requested and is expected to be received before and tabled at the Meeting.

A written notice of nomination of Deloitte Touche Tohmatsu to become the Company’s Auditors has been given to the Company by Mr Jason Entwistle, Shareholder, in compliance with section 328B(1) of the Corporations Act. A copy of that notice of nomination accompanies this Notice. In accordance with section 328A(1) of the Corporations Act, Deloitte Touche Tohmatsu has provided its consent by notice in writing to the Company to act as Auditor of the Company.

The Directors recommend the appointment of Deloitte Touche Tohmatsu as Auditor of the Company and thank BDO East Coast Partnership for the professional services they have provided to the Company over a number of years.

GLOSSARY

$ means Australian Dollars.

Annual General Meeting or Meeting means the meeting convened by the Notice.

ASX means ASX Limited.

ASX Listing Rules means the Listing Rules of the ASX.

Board means the current board of directors of the Company.

Business Day means a day that is not a Saturday, Sunday, public holiday or bank holiday in Sydney, Australia.

closely related party has the meaning as defined in section 9 of the Corporations Act.

Company means HUB24 Limited ACN 124 891 685.

Constitution means the Company’s Constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the directors of the Company.

Explanatory Memorandum means the Explanatory Memorandum accompanying the Notice.

Group means the Company and each of its wholly owned subsidiaries.

Key Management Personnel (or 'KMP') has the meaning as defined in section 9 of the Corporations Act.

Notice or Notice of Meeting or Notice of Annual General Meeting means this notice of annual general meaning and the explanatory notes accompanying the Notice and the Proxy Form.

Option means an option to acquire a Share.

Proxy Form means the proxy form accompanying the Notice.

Remuneration Report means the remuneration report set out in the Company’s 2015 Annual Report.

Resolutions means the resolutions set out in the Notice, or any one of them, as the context requires.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a holder of a Share.

ANNEXURE A

TERMS OF OPTIONS PROPOSED TO BE ISSUED TO ANDREW ALCOCK

Total number of Options granted	150,000 Options, each of which entitles the holder to subscribe for one Share on and subject to the terms of the Options.
Issue date	Within 30 days of Shareholder approval.
Issue price	No amount is payable for issue of the Options.
Quotation	The Options will not be quoted on ASX or any other exchange.
Exercise price	The exercise price of the Options will be a price equal to the volume weighted average closing price of the Company's shares traded on the ASX for the 20 trading days prior to (but not including) 14 October 2015 (Exercise Price), which equates to $2.46.
Expiry date	The expiry date of the Options is 5 years after the date of issue of the Options.
Forfeiture conditions	The Options are subject to forfeiture on termination of Mr Alcock's employment by the Company or Mr Alcock. If, however, Mr Alcock is considered a 'Good Leaver' by the Board or his employment ends by reason of death or becoming (in the Board's view) totally and permanently disabled, or the occurrence of such other event as the Board determines, Mr Alcock's Options will not be forfeited.
Vesting conditions	Vesting conditions based on share price hurdles will apply to the Options. The 150,000 Options will be subject to, and will vest on, the achievement of a hurdle of a 52% share price increase (on the Exercise Price) in any consecutive 20 day period occurring at any time after the date that is 36 months after the date of issue of the Options and before the expiry of the term of the Options. The share price hurdle of 52% represents the share price increase above the Exercise Price at the rate of the company’s weighted average cost of capital compounded for three years. All outstanding Options will vest, and any restrictions on the disposal of the Shares issued on the exercise of Options will cease to apply, where there is an acquisition by a person or entity (whether directly or indirectly) of not less than 90% of the issued shares of the Company, whether by treaty, takeover or a members scheme of arrangement in accordance with the Corporations Act, or on the occurrence of some other form of 'change of control' event in respect of the Company as determined by the Board.
Lapse of Options	Options that may be exercised and are not exercised by the expiry date will automatically lapse.
Disposal restrictions	Options are not transferrable. Sale of the Shares issued on exercise of the Options will be restricted for a period of two years after the date of issue of such Shares. However, the sale of a portion of such Shares to fund taxationobligations directly arisingfromthe exercise ofthe Options

	will be permitted, subject to compliance with legal obligations in respect of the sale of such Shares.
Issue of Shares on exercise of Options	On exercise, each Option will be converted to a Share ranking equally with the Company's existing Shares. The Company will apply to ASX for quotation of the new Shares issued on the exercise of the Options.

20 October 2015

The Company Secretary HUB24 Limited Level 8, 20 Bridge St Sydney NSW 2000

Dear Sir,

I, Jason Entwistle, in my capacity as Director of EGG.AU Pty Ltd, being a member of HUB24 Limited, pursuant to section 328B(1) of the Corporations Act 2001, hereby nominate Deloitte Touche Tohmatsu for appointment as auditor of HUB24 Limited and controlled entities as listed at Appendix A at the next Annual General meeting or any adjournment thereof, subject to the resignation of BDO East Coast Partnership.

I consent to the distribution of a copy of this notice of nomination as an annexure to the Notice of Meeting and Explanatory Memorandum for the 2015 Annual General Meeting of the Company as required by section 328B(3) of the Corporations Act 2001.

Yours faithfully,

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Jason Entwistle Director EGG.AU Pty Ltd

Appendix A: HUB24 Limited and controlled entities

	Country of	Equity Holding
Name of Entity	Incorporation	%
Hub24 Custodial Services Limited	Australia	100
HUB24 International Nominees Pty Ltd	Australia	100
Firstfunds Ltd	Australia	100
HUB24 Management Services Pty Ltd	Australia	100
Investorfirst Securities Ltd	Australia	100
HUB24 Nominees Pty Ltd	Australia	100
Researchfirst Pty Ltd	Australia	100
Captain Starlight Nominees Pty Ltd	Australia	100
Findlay & Co Stockbrokers Ltd	Australia	100
HUB24 Administration Pty Ltd	Australia	100
HUB24 Services Pty Ltd	Australia	100
Marketsplus Holdings Pty Ltd	Australia	100
Marketsplus Australia Pty Ltd	Australia	100
HTH Nominees Pty Ltd	Australia	100
Paragem Pty Ltd	Australia	100

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All Correspondence to:

 By Mail Boardroom Pty Limited GPO Box 3993 Sydney NSW 2001 Australia

 By Fax: +61 2 9290 9655

 Online: www.boardroomlimited.com.au  By Phone: (within Australia) 1300 737 760 (outside Australia) +61 2 9290 9600

YOUR VOTE IS IMPORTANT

For your vote to be effective it must be recorded before 1:00pm (AEDT) on Monday, 23 November 2015

TO VOTE BY COMPLETING THE PROXY FORM

STEP 1 APPOINTMENT OF PROXY

Indicate who you want to appoint as your Proxy.

If you wish to appoint the Chair of the Meeting as your proxy, mark the box. If you wish to appoint someone other than the Chair of the Meeting as your proxy please write the full name of that individual or body corporate. If you leave this section blank, or your named proxy does not attend the meeting, the Chair of the Meeting will be your proxy. A proxy need not be a security holder of the company. Do not write the name of the issuer company or the registered securityholder in the space.

Appointment of a Second Proxy

You are entitled to appoint up to two proxies to attend the meeting and vote. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by contacting the company’s securities registry or you may copy this form.

To appoint a second proxy you must:

(a) complete two Proxy Forms. On each Proxy Form state the percentage of your voting rights or the number of securities applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded. (b) return both forms together in the same envelope.

STEP 3 SIGN THE FORM

The form must be signed as follows:

Individual: This form is to be signed by the securityholder.

Joint Holding : where the holding is in more than one name, all the securityholders should sign.

Power of Attorney: to sign under a Power of Attorney, you must have already lodged it with the registry. Alternatively, attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: this form must be signed by a Director jointly with either another Director or a Company Secretary. Where the company has a Sole Director who is also the Sole Company Secretary, this form should be signed by that person. Please indicate the office held by signing in the appropriate place.

STEP 4 LODGEMENT

Proxy forms (and any Power of Attorney under which it is signed) must be received no later than 48 hours before the commencement of the meeting, therefore by 1:00pm (AEDT) on Monday, 23 November 2015. Any Proxy Form received after that time will not be valid for the scheduled meeting.

Proxy forms may be lodged using the enclosed Reply Paid Envelope or:

STEP 2 VOTING DIRECTIONS TO YOUR PROXY

To direct your proxy how to vote, mark one of the boxes opposite each item of business. All your securities will be voted in accordance with such a direction unless you indicate only a portion of securities are to be voted on any item by inserting the percentage or number that you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on a given item, your proxy may vote as he or she chooses. If you mark more than one box on an item for all your securities your vote on that item will be invalid.

 By Fax + 61 2 9290 9655  By Mail Boardroom Pty Limited GPO Box 3993, Sydney NSW 2001 Australia Level 12, 225 George Street,  In Person Sydney NSW 2000 Australia

Proxy which is a Body Corporate

Where a body corporate is appointed as your proxy, the representative of that body corporate attending the meeting must have provided an “Appointment of Corporate Representative” prior to admission. An Appointment of Corporate Representative form can be obtained from the company’s securities registry.

Attending the Meeting

If you wish to attend the meeting please bring this form with you to assist registration .

Hub24 Limited

ACN 124 891 685

Your Address

This is your address as it appears on the company’s share register. If this is incorrect, please mark the box with an “X” and make the correction in the space to the left. Securityholders sponsored by a broker should advise their broker of any changes. Please note, you cannot change ownership of your securities using this form.

PROXY FORM

STEP 1 APPOINT A PROXY

I/We being a member/s of HUB24 Limited (Company) and entitled to attend and vote hereby appoint:

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the Chair of the Meeting (mark box)

OR if you are NOT appointing the Chair of the Meeting as your proxy, please write the name of the person or body corporate (excluding the registered shareholder) you are appointing as your proxy below

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or failing the individual or body corporate named, or if no individual or body corporate is named, the Chair of the Meeting as my/our proxy at the Annual General Meeting of the Company to be held at Level 2, 3 Spring Street, SYDNEY NSW 2000 on Wednesday 25 November 2015 at 1:00pm (AEDT) and at any adjournment of that meeting, to act on my/our behalf and to vote in accordance with the following directions or if no directions have been given, as the proxy sees fit.

Chair of the Meeting authorised to exercise undirected proxies on remuneration related matters (ie Resolutions 1 & 5-7) : If I/we have appointed the Chair of the Meeting as my/our proxy or the Chair of the Meeting becomes my/our proxy by default and I/we have not directed my/our proxy how to vote in respect of any or all of Resolution 1 and Resolutions 5-7 (inclusive), I/we expressly authorise the Chair of the Meeting to exercise my/our proxy in respect of this Resolution even though they are connected with the remuneration of a member of the key management personnel for the Company.

The Chair of the Meeting will vote all undirected proxies in favour of all Items of business (including Resolutions 1 & 5-7) . If you wish to appoint the Chair of the Meeting as your proxy with a direction to vote against, or to abstain from voting on an item, you must provide a direction by marking the 'Against' or 'Abstain' box opposite that resolution (as applicable).

STEP 2 VOTING DIRECTIONS

If you mark the Abstain box for a particular item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your vote will not be counted in calculating the required majority if a poll is called.

For Against Abstain*

Resolution 1 To Adopt the Remuneration Report Resolution 2 To re-elect Mr Ian Litster as a Director Resolution 3 To re-elect Mr Hugh Robertson as a Director Resolution 4 Election of Anthony McDonald as a Director Resolution 5 Approval of issue of options to Andrew Alcock Resolution 6 Approval of issue of shares to Andrew Alcock Resolution 7 Increasing the maximum aggregate remuneration of non-executive directors Resolution 8 Refresh the capital raising capital through shareholder ratification of placement under the 15% rule Resolution 9 Appointment of Auditor

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STEP 3 SIGNATURE OF SHAREHOLDERS This form must be signed to enable your directions to be implemented.

Individual or Securityholder 1

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Sole Director and Sole Company Secretary

Securityholder 2

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Director

Securityholder 3

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Director / Company Secretary

Contact Name…………………………………………….... Contact Daytime Telephone………………………................................ Date / / 2015

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CORPORATE DIRECTORY

DIRECTORS

Bruce Higgins (Chairman) Appointed 19 October 2012

Andrew Alcock (Managing Director) Appointed 29 August 2014

Ian Litster Appointed 26 September 2012

Hugh Robertson Appointed 20 April 2011

Vaughan Webber Appointed 19 October 2012

SHARE REGISTRY

Boardroom Pty Limited

Level 7 207 Kent Street Sydney NSW 2000

HUB24 Limited shares are listed on the Australian Securities Exchange (ASX: HUB)

AUDITORS

COMPANY SECRETARY

Matthew Haes

Appointed 10 September 2012

SOLICITORS

Minter Ellison

Rialto Towers 525 Collins Street Melbourne VIC 3000

Minter Ellison

Aurora Place 88 Phillip Street Sydney NSW 2000

INTERNET ADDRESS

www.hub24.com.au

REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS

Level 8 20 Bridge St Sydney NSW 2000 Tel: (02) 8274 6000

BANKERS

Australia and New Zealand Banking Group Limited

20 Martin Place Sydney NSW 2000

BDO East Coast Partnership

Level 10 1 Margaret Street Sydney NSW 2000

2 HUB24 ANNUAL REPORT 2015 CORPORATE DIRECTORY

CONTENTS

4

RESULTS FOR ANNOUNCEMENT TO THE MARKET (APPENDIX 4E)

5

CHAIRMAN & MANAGING Director’s REPORT

11

BUSINESS OVERVIEW

15

Director’s REPORT

39

AUDITOR’S INDEPENDENCE DECLARATION

41

FINANCIAL STATEMENTS

99

Director’s DECLARATION

100

INDEPENDENT AUDITOR’S REPORT

102

ASX ADDITIONAL INFORMATION

CORPORATE GOVERNANCE

The Board is committed to achieving and demonstrating the highest standards of corporate governance. As such, HUB24 Limited and its Controlled entities (‘the Group’) have adopted the third edition of the Corporate Governance Principles and Recommendations which was released by the ASX Corporate Governance Council on 27 March 2014 and became effective for financial years beginning on or after 1 July 2014.

The Group’s Corporate Governance Statement for the financial year ending 30 June 2015 is dated as at 30 June 2015 and was approved by the Board on 28 August 2015. The Corporate Governance Statement is available on HUB24 Limited’s website at http://www.hub24.com.au/AboutUs/Corporate-Governance-Statement.

HUB24 ANNUAL REPORT 2015

CONTENTS

RESULTS FOR ANNOUNCEMENT

TO THE MARKET

APPENDIX 4E

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Restated
Year ended Year ended
30 June 2015 30 June 2014 [1]
$’000 $’000 % change
From continuing operations
Revenue from ordinary activities 29,304 From 4,034 Increase 626%
Net loss for the year attributable to members (5,350) From (7,868) Decrease -32%
From discontinued operations
Revenue from ordinary activities - From - Decrease -
Net loss for the year attributable to members (1,107) From (680) Increase 63%
From continuing and discontinued operations
Revenue from ordinary activities 29,304 From 4,034 Increase 626%
Net loss for the year attributable to members (6,457) From (8,548) Decrease -24%
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DIVIDENDS

The directors have not declared a final dividend for the year ended 30 June 2015 ( 2014: Nil).

EXPLANATION OF RESULT

Refer to the attached Director’s Report and review of operations for further explanation.

Net tangible assets per fully paid	$0.095
ordinary share 30 June 2015
Net tangible assets per fully paid	$0.257
ordinary share 30 June 2014

ENTITIES OVER WHICH CONTROL HAS BEEN GAINED OR LOST DURING THE PERIOD

HUB24 Limited gained control over Paragem Pty Limited during the reporting period on 3 September 2014. Paragem Pty Limited contributed revenue of $20,235,321 and profit from ordinary activities of $6,845 to the results of the group during the period.

HUB24 Limited has not lost control over any entity during the reporting period.

AUDITOR REVIEW

The report is based on accounts that have been audited by the company’s auditors, BDO East Coast Partnership.

1The net loss for 2014 increased by $124,776, due to a change in accounting policy relating to the research and development rebate. Refer to Note 31 of the Financial Statement for further information.

4 HUB24 ANNUAL REPORT 2015

RESULTS FOR ANNOUNCEMENT TO THE MARKET

CHAIRMAN AND MANAGING DIRECTOR’S

REPORT

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BRUCE HIGGINS

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ANDREW ALCOCK
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DEAR SHAREHOLDERS

On behalf of the Directors we are pleased to announce the results for HUB24 for the financial year ended 30 June 2015.

This year was a period of significance for the company. Our focus on marketing the leading capabilities of the HUB24 platform and continuing to invest in product and technology features, has resulted in strong growth for the business.

Our Funds Under Administration (FUA) increased 100% over the year with significantly improved financial results at increased margins. Additionally, we have received welcome industry recognition of both our innovative platform technology and our service proposition as one of the leading wrap platforms in the industry.

We continue to have high expectations of HUB24’s growth prospects in an environment where we have a strong pipeline of interest by potential clients in a market that exceeds over $500 billion[1] on Wraps and Platforms in one of the fastest growing sectors.

In our last annual report we were pleased to advise the group had achieved positive monthly Gross Profit from March 2014. In this report, we are equally happy to advise that HUB24 recorded positive monthly Operating EBITDA[2] from the March 2015 quarter during the financial year and platform revenues increased by 151% while direct costs increased by only 45%. This is a strong validation of HUB24’s highly scalable business model.

In September 2014, HUB24 completed the acquisition of Paragem Pty Limited, a leading advice licensee for independently minded financial advisers, and reached agreement with two other licensees to launch new white label platform offers. The company also released a new online user interface to become fully transaction capable across all popular mobile devices as well as extending HUB24’s online capability to support self-directed investors to transact and manage their own portfolios.

We will continue to invest in the core business of the HUB24 platform and its technology to remain at the forefront of the market and to ensure that our business continues to prove highly scalable with the growing momentum of inflows.

1Source: Plan For Life. Analysis of Wrap, Platform and Master Trust Managed Funds at March 2015

2Operating EBITDA represents Revenue less all Operating Expenses incurred in servicing the current FUA. It excludes Growth Investment expenses and other significant items.

HUB24 ANNUAL REPORT 2015

CHAIRMAN AND MANAGING DIRECTOR’S REPORT

CHAIRMAN AND MANAGING DIRECTOR’S REPORT

COMPANY SUCCESSES

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Positive monthly FUA growth
of 100% to
Operating
EBITDA [] $1.7bn
recorded from March 2015 Now $1.9bn
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Cash and cash
equivalents of
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$12.1m
and no corporate debt
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HUB24
awarded []
3rd
in overall platform functionality
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217
Managed Portfolios offered with
FUA in these increasing 103%
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Growth in
active advisers
of 139 to
484
serving 49 active financial
planning groups with 6 white
label agreements
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Increase in
platform
revenue of
151%
achieved through growing Funds
Under Administration with
consistent gross profit margins
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----- Start of picture text -----

HUB24
awarded []
1st
Value for Money and Ease
of Use in the Investment
Trends 2015 Planner
Technology Report
*----- End of picture text -----

Operating EBITDA represents revenue less all operating expenses incurred in servicing the current FUA, it excludes growth investment expenses and other significant items. Investment Trends December 2014 Platform Benchmarking Report based upon extensive analyst reviews of 22 Platforms across 466 functional points. **Results from Investment Trends 2015 Planner Technology Report, based on an online survey of over 890 financial planners.

6 HUB24 ANNUAL REPORT 2015 CHAIRMAN AND MANAGING DIRECTOR’S REPORT

CHAIRMAN AND MANAGING DIRECTOR’S REPORT

FINANCIAL PERFORMANCE

Revenue from ordinary activities increased by 626% to $29.304 million including the results from the acquisition of Paragem Pty Ltd on 3 September 2014. In our Platform segment revenue increased to $8.1 million for the financial year, an increase of 151% over the prior corresponding period (PCP) which was driven by an increase in Funds Under Administration (FUA) of 100% to $1.704 billion as at 30 June 2015. This Platform revenue was on average 63 basis points of FUA (52 basis point PCP) driven by increasing transaction activity across the platform.

PLATFORM REVENUE - HALF YEAR

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----- Start of picture text -----

$’M
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
1H13 2H13 1H14 2H14 1H15 2H15
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During the same period, direct platform costs increased by 45% as a result of increased transaction volumes and were at an average of 38 basis points of FUA. This is a decrease from 57 basis points of FUA for the prior corresponding period demonstrating that scale benefits are accelerating with growing FUA and revenues.

Having achieved positive gross profits during FY2014 the business has now achieved its maiden quarter of positive Operating EBITDA* in the third quarter of the financial year, which represents profit before growth investment expenses and other significant items. This performance continued in the fourth quarter with further growth in FUA adding additional revenue.

PLATFORM GROSS PROFIT & OPERATING EBITDA TRENDS - HALF YEAR

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$’M
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----- Start of picture text -----

3.0
2.0
1.0
0.0
(1.0)
(2.0)
(3.0)
1H13 2H13 1H14 2H14 1H15 2H15
Gross profit Operating EBITDA
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HUB24 carefully manages the timing and extent of further investment in resources to provide a stable platform to support our clients and our rapid growth. This includes ongoing review of platform administration, client service and transition functions for further efficiencies and continuous improvement program to deliver value to our clients. Continued investment to both maintain and increase FUA growth and financial performance will improve HUB24 financial performance.

GROWTH

We have delivered a growth in FUA of 100% to $1.704 billion to 30 June 2015 and we now service over 484 financial advisers. Further growth in fund inflows since the end of the period has increased FUA at 27 August 2015 to $1.9 billion.

Monthly average net inflows on an historical basis are continuing to rise with the average for FY2015 being $66 million per month compared to $34 million in FY2014 and $19 million in FY2013. The last quarter of FY2015 experienced further growth with an average monthly net inflow of $91million.

HUB24 has recorded three quarters of record gross and net inflows during the 2015 financial year and the number of

*Operating EBITDA represents revenue less all operating expenses incurred in servicing the current FUA, it excludes growth investment expenses and other significant items.

HUB24 ANNUAL REPORT 2015

CHAIRMAN AND MANAGING DIRECTOR’S REPORT

CHAIRMAN AND MANAGING DIRECTOR’S REPORT

SCALE EFFICIENCIES AND MARGIN EXPANSION

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$ per Month
$1,000,000 Monthly gross Positive monthly
profits emmerged operating EBITDA
from 3QFY14 from 3QFY15
$500,000
$0
1H FY14 2H FY14 1H FY15 2H FY15
Revenue Direct Expenses
Direct and Operating Expenses AVERAGE MONTHLY NET INFLOWS
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AVERAGE MONTHLY NET INFLOWS

advisers using the platform has increased by 40.3%. Given that many of the advisers are relatively new to using the HUB24 platform, we expect significant upside in both the level of usage in advisers’ businesses leading to an increase in the average FUA per adviser. The company continues to focus an securing new adviser relationships to further increase the momentum in FUA growth.

Two new white label agreements were signed during the financial year and new online functionality developed allowing self directed investors to transact and manage their own portfolios.

*Operating EBITDA represents Revenue less all Operating Expenses incurred in servicing the current FUA. It excludes Growth Investment expenses and other significant items.

$‘M

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100
90
80
70
60
50
40
30
20
10
0
FY12 FY13 FY14 FY15 4Q FY15
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8 HUB24 ANNUAL REPORT 2015 CHAIRMAN AND MANAGING DIRECTOR’S REPORT

CHAIRMAN AND MANAGING DIRECTOR’S REPORT

KEY PLATFORM STATISTICS

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Platform statistics [] JUN ‘14 SEPT ‘14 DEC ‘14 MAR ‘15 JUN ‘15 Growth []
FUA – total $854m $1,031m $1,251m $1,493m $1,704m 99.5%
Net fund inflows (Qtr) $118m $171m $190m $163m $273m 131.4%
Gross inflows (Qtr) $167m $199m $226m $204m $325m 94.6%
Number of active Advisers 345 383 420 449 484 40.3%
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*Statistics are for each quarter, have been rounded and are not audited. Net inflows represent gross inflows less outflows and do not include market movement. ** Growth is the percentage increase on prior year corresponding quarter.

OPERATIONS

During the financial year HUB24 developed a non-custody solution allowing advisers to consolidate the reporting of clients assets held outside of the HUB24 platform such as cash and shares through integrated data feeds from stockbrokers and other industry participants. This new development supports the company’s strategic intent to secure further relationships with stockbroking based licensees and their clients who value holding their own assets while still receiving the benefits of a Wrap platform.

HUB24 also released a new streamlined, intuitive user interface which enables access to our entire service from all popular mobile devices for both advisers and their clients. This new development was implemented after having already been awarded Best Tablet/Smartphone Access in the Investment Trends December 2014 Platform Benchmarking Report[1] . In addition, HUB24 delivered new functionality to support self-directed investors ability to manage and transact their own portfolios and undertook a transition of an existing $29 million client book from another industry participant to this new service which completed on 1 July 2015.

To support the company’s growth, improve service levels and adviser experience, HUB24 has implemented SupportHub which offers full transparency for clients and advisers to monitor progress of enquiries through to completion. This initiative was implemented during a year in which the business doubled in size and also provides workflow and efficiency benefits for our client services staff which will support further growth. Our recognition as the industry leader for new application processing and administration accuracy in the Investment Trends 2015 Planner Technology Report demonstrates our ability to significantly grow whilst improving underlying service levels at the same time.

The company has undertaken substantial effort to incorporate the introduction of significant new regulatory requirements during the financial year including AML/CTF, ASIC RG133 for Managed Investments and Custodial Services (IDPS) and Stronger Super.

ACQUISITION

The acquisition of leading boutique dealer group Paragem Pty Ltd has delivered a business with a strong growth track record as a licensee with 20 high quality financial advisory practices across Australia advising on more than $2.5 billion of client funds. HUB24 and Paragem are highly complementary with minimal overlap and share a common goal to create strong financial advice practices and a platform group not aligned to product manufacturers.

The integration of the Paragem business into HUB24’s operations was completed seamlessly during the period bringing $2.5 billion in funds under advice to the group. The Paragem executives have worked closely with their new HUB24 colleagues on a range of initiatives including the introduction of new investment options to the platform for Paragem advisers, marketing collateral and FUA transition services which are all of strategic benefit for HUB24’s wider client base.

This acquisition is consistent with HUB24’s core proposition of providing high value services to licensees and advisers. This entry into the advice space is expected to result in a further enhancement of HUB24’s rapid growth, diversification of the company’s revenue streams and continued improvements to platform functionality, which will be highly valued by the broader independently minded financial advice market.

1Investment Trends December 2014 Platform Benchmarking Report based upon extensive analyst reviews of 22 Platforms across 466 functional points.

HUB24 ANNUAL REPORT 2015 9

CHAIRMAN AND MANAGING DIRECTOR’S REPORT

CHAIRMAN AND MANAGING DIRECTOR’S REPORT

CORPORATE

During the period, shareholders have continued to be supportive of the company with the capital raising completed in March 2015 raising $5.25 million. This was a placement of five million ordinary shares to sophisticated and professional investors at $1.05 per share, representing a premium of 2.6 cents per share over the 30 day VWAP at the time of raising. At 30 June 2015 HUB24 had $12.1 million in cash and cash equivalents and is well resourced to meet the company’s operating requirements.

The Chief Executive Officer of the company, Andrew Alcock, was appointed to the Board and position of Managing Director on 29 August 2014.

CORPORATE GOVERNANCE

The Board of HUB24 is committed to achieving and demonstrating standards of corporate governance that are best practice consistent with the size and scale of the company and compliant with the Australian Stock Exchange (ASX) regulations of good corporate governance. Our goal is to ensure that we protect the rights and interests of shareholders and ensure the company is properly managed through the implementation of sound strategies and action plans. We achieve this through the management team of our company and by supervising an integrated framework of controls over the company’s resources to ensure our commitment to high standards of ethical behaviour.

Our remuneration report is enclosed in the annual report and outlines the group remuneration policies, Board performance and the senior executive remuneration policies and compensation.

OUTLOOK

We have an exciting opportunity to build a leadership position in a sector where superannuation assets are projected to double over the next 10 years, and Wrap Platforms are projected as one of the fastest growing segments. HUB24 has a market share of less than 1% as a Wrap Platform while being ranked as one of the market leaders. Management within the company believe this to be an opportunity for continued strong growth.

HUB24 aims to continue to build a profitable and scalable business aligned with our vision to be the leading independent platform provider, revolutionising the way people manage their investments. The company plans to achieve this through innovative investment administration, portfolio management, reporting and support services that deliver superior outcomes for advisers, licensees, investors and our shareholders. We are expecting that HUB24 will transition to be cashflow positive on a monthly basis within the next two quarters, presuming the continuation of normal market conditions.

Our leading platform features, unique in-house technology and service proposition is being validated by increasing industry recognition and support from existing and new clients. We will continue to invest in platform development, operational efficiency and in accelerating FUA to the platform to take advantage of favourable market conditions which support the growth and success of an innovative and independent platform provider that offers real choice to advisers and investors.

We look forward to updating shareholders on our progress at the AGM in November.

On behalf of Directors, we wish to thank our management team and all employees for their commitment and customer service focus during the year. We would also like to thank our customers and shareholders for their continuing support for HUB24.

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Bruce Higgins Chairman of Directors

Andrew Alcock Chief Executive Officer

28 August 2015

10 HUB24 ANNUAL REPORT 2015 CHAIRMAN AND MANAGING DIRECTOR’S REPORT

BUSINESS OVERVIEW

BUSINESS OVERVIEW

HUB24 operates in a market where strong growth in investment and superannuation continues supported by a backdrop of legislated increases in superannuation, a rising trend towards personal investments including directly held assets and managed portfolios, and underpinned by a growing population. Against this industry expansion Australia has been through a period of unprecedented regulatory change including reforms to superannuation and financial advice laws which present favourable conditions for HUB24’s continued success.

Meanwhile the latest data on superannuation funds issued by the Australian Prudential Regulation Authority (APRA), reports that the average balance of an SMSF fund now exceeds $1 million with the average account balance for an SMSF member just over $525,000.
Individuals running SMSFs control $520.5 billion or nearly a third of the total invested via Australian superannuation funds compared to 10% ten years ago.

PERSONAL INVESTMENT MARKET PROJECTIONS

KEY MARKET TRENDS

STRONG PROJECTED GROWTH IN PERSONAL INVESTMENTS, WRAP PLATFORMS AND EQUITY HOLDINGS

According to Rice Warner’s Personal Investment Market Projections Report 2014, over the next 15 years:

The personal investments market is expected to grow at a rate of 4.6% per annum in real terms (7.7% per annum in future dollars) over the next 15 years. The total personal investments market at 30 June 2014 was $2,490 billion. This compares with the superannuation market which had assets of an additional $1,837 billion at the same date.
Wrap platforms, including separately managed accounts and model portfolio products, will be the fastest growing segment, with its market share growing from 2.6% to 7.6% over the 15 years to 30 June 2029.
By 30 June 2029, total cash and term deposits are estimated to reduce from 35% to 30%, as a proportion of overall personal investments while total equity holdings (including ETFs) will increase from 14.4% to 21.7% of overall personal investments.

AUSTRALIAN SUPER ASSETS WILL MORE THAN DOUBLE IN NEXT 10 YEARS, SMSFS NOW A THIRD OF ALL SUPER ASSETS

The Deloittes Dynamics of Superannuation report 2013 projects the total pool of Australian super assets to grow to $4 trillion in the next 10 years and $7.6 trillion by 2033.
The growth is based on the Superannuation Guarantee of 9.25% rising to 12%, on gradual population growth, and the significant contribution of investment returns, cementing Australia as the fourth largest superannuation system in the world.

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HUB24 ANNUAL REPORT 2015 11

BUSINESS OVERVIEW

BUSINESS OVERVIEW

FUA BALANCE

HUB24’S MAJOR ACHIEVEMENTS AND PROSPECTS

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$‘M
Within this environment, we believe HUB24 is well
2,000
positioned to take advantage of these key industry trends,
both now and into the future. As a next generation platform
leveraging modern technology, HUB24 is also able to meet
the rapidly changing expectations of financial advisers 1,600
and investors. HUB24 has achieved a number of major
milestones over the past financial year.
1,200
100% GROWTH IN FUNDS UNDER ADMINISTRATION,
HIGHEST INDUSTRY NET INFLOWS GROWTH RATE
FOR WRAP PLATFORMS ACCORDING TO PLAN FOR 800
LIFE DATA [[1]] , ADVISER USAGE UP BY 40%.
• Over the financial year, HUB24 grew funds under 400
administration to $1,704m as at 30 June 2015,
representing an increase of 100%. With record inflows
during the fourth quarter of the 2015 financial year, growth 0
momentum is continuing into FY16 with funds under
administration standing at $1,900m as at 27 August 2015.
• According to Plan for Life [[1]] data HUB24 has the sixth
highest net inflow growth across wrap providers in
Australia and in percentage terms of FUA, has the
INFLOWS QUARTERLY
$‘M
350
300
250
200
150
100
50
0
Net Inflows (LHS) Gross Inflows (LHS)
Jun ‘12
June '12 Sept '12 Dec '12 Mar '13 June '13 Sept '13 Dec '13 Mar '14 Jun '14 Sept '14 Dec '14 Mar ’15 Jun ‘15
Sep ‘12 Dec ‘12 Mar ‘13 Jun ‘13 Sep ‘13 Dec ‘13 Mar ‘14 Jun ‘14 Sep ‘14 Dec ‘14 Mar ‘15 Jun ‘15
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Within this environment, we believe HUB24 is well positioned to take advantage of these key industry trends, both now and into the future. As a next generation platform leveraging modern technology, HUB24 is also able to meet the rapidly changing expectations of financial advisers and investors. HUB24 has achieved a number of major milestones over the past financial year.

100% GROWTH IN FUNDS UNDER ADMINISTRATION, HIGHEST INDUSTRY NET INFLOWS GROWTH RATE FOR WRAP PLATFORMS ACCORDING TO PLAN FOR LIFE DATA[[1]] , ADVISER USAGE UP BY 40%.

Over the financial year, HUB24 grew funds under administration to $1,704m as at 30 June 2015, representing an increase of 100%. With record inflows during the fourth quarter of the 2015 financial year, growth momentum is continuing into FY16 with funds under administration standing at $1,900m as at 27 August 2015.
According to Plan for Life[[1]] data HUB24 has the sixth highest net inflow growth across wrap providers in Australia and in percentage terms of FUA, has the

INFLOWS QUARTERLY

1Source: Plan For Life. Analysis of Wrap, Platform and Master Trust Managed Funds at March 2015

12 HUB24 ANNUAL REPORT 2015 BUSINESS OVERVIEW

BUSINESS OVERVIEW

highest growth rate across Wraps, Platforms and Master Trusts in the market for the 12 months to 31 March 2015. As a newer market participant this growth rate is a significant achievement which is challenging the distribution arrangements that have been previously tightly held by traditional providers.

Net inflows onto the HUB24 platform for FY2015 were $797m at an average of $66m per month and averaging $91m per month for the last quarter. By comparison, average monthly net inflows for FY2014 were $34m. 52% of net inflows were driven by HUB24’s seven white label products while the remainder were driven by 42 active dealer groups which increased in number by 12 during the financial year.

The number of advisers using the platform has increased by 40% over the financial year, with average FUA per a dviser increasing by 42% over that time. Given that many of the advisers are relatively new to using the HUB24 platform, we expect significant upside in the level of usage in advisers’ businesses leading to an increase in the average FUA per adviser.

CONTINUING INVESTMENT IN CLIENT-DRIVEN TECHNOLOGY

While many platforms have been diverting significant resources to changing legacy systems to comply with new regulations and to support the rapidly changing approaches to investment management, HUB24 has been able to focus on the continued development of the company’s in-house proprietary technology to truly address the needs of advisers and clients. We are in the unique position of providing both market leading managed account functionality and market leading Wrap functionality with exceptional user experiences and recognised high levels of service. Some of the developments undertaken during the last year include:

A new reporting solution allowing advisers to consolidate the reporting of client assets that are held outside the HUB24 platform such as external cash accounts and individual stock holdings. This is achieved through integrated data feeds from stockbrokers and other market participants and supports the provision of a holistic view of a clients investments. This new development is attractive to several market segments and particularly to stockbroking licensees and their clients who value holding their own assets while still receiving the benefits of a Wrap platform.
The release of a new streamlined and intuitive user interface which is available across all popular mobile devices. HUB24’s investment, super and pension platform is now fully compatible and dynamically responsive to how advisers and clients choose to access the platform and will resize to fit screens of varying sizes on desktops or mobile devices. Our industry leading functionality is now fully portable and has extended our lead in this space having been awarded the best Tablet/Smartphone access by Investment Trends in their 2014 Platform Benchmarking Report, prior to release of this new capability.
Launch of SupportHUB offering full transparency for registered clients and advisers to monitor progress of enquiries through to completion. This unique service provides certainty on activities yet to complete without the need to make enquiries or follow-up contact. SupportHUB also offers a knowledge base of online forms, user guides, enriched search capability, online tutorials and interactive tools for advisers.
More recently, HUB24 has developed an initial service for self directed investors which came into effect 1 July 2015. Future enhancements to this will support changing advice models where advisers may wish to offer their clients additional access to manage their portfolios as well as position HUB24 as a leading platform provider for SMSF trustees who choose to be self advised.

INDUSTRY-RECOGNISED AND AWARDED

HUB24 has now established its position as one of the top tier full function platforms in the market today evidencing the company’s ability to grow and innovate at the same time. Our overall market position improved in the Investment Trends Platform Benchmarking Report December 2014 moving from 5th to 3rd place, ranking ahead of most major institutionally-owned Wrap providers; and ranking first for Best Tablet/Smartphone Access[2] .

HUB24 also performed well in adviser satisfaction ratings as indicated in the Investment Trends 2015 Planner Technology Report. HUB24 placed:

2nd overall for Platform Satisfaction[3] ;
Award Winner – Ease of Use[2] ;
Award Winner – Value for Money, Platform[2] .

1Source: Plan For Life. Analysis of Wrap, Platform and Master Trust Managed Funds at March 2015

2Investment Trends December 2014 Platform Benchmarking Report, based on extensive analyst reviews of 22 platforms across 466 functional points.

3Results from Investment Trends 2015 Planner Technology Report, based on an online survey of over 890 financial planners.

HUB24 ANNUAL REPORT 2015 13

BUSINESS OVERVIEW

BUSINESS OVERVIEW

The awards top a number of excellent results from the report including achieving the highest user satisfaction for online functionality, the user interface experience, turnaround times for applications, administrative accuracy and pricing flexibility. HUB24 also came in the top three for many other features such as online transaction capabilities, direct equities handling, and client review and reporting tools.

HUB24’S KEY STRENGTHS

a structure with potentially lower fees and tax effective strategies, transparency of underlying holdings and online tax optimisation tools.

Managed portfolios represented 42% of HUB24 platform FUA at 30 June 2015 demonstrating that advisers and their clients are increasingly comfortable with HUB24’s managed portfolio solution now having been on the market for the past 5 years.

Advantages of managed portfolios include:

AN INDEPENDENT PRODUCT OFFERING WITH EXTENSIVE CHOICE

HUB24’s independence from product manufacturers ensures we are able to objectively offer the best choice of service providers for advisers and investors. This includes

tax effectiveness with no inheritance of the underlying capital gains that can arise in managed funds
transparency of individual assets traditionally held in a hidden managed fund structure
no buy/sell differential charged on entry
Over 1,000 ASX listed securities, including shares, ETFs, LICs and hybrids
Over 214 managed portfolios
0ver 900 managed funds
15 different term deposits across five different providers
beneficial ownership of underlying investments
potential benefit of netting transactions within an account, saving trading costs and taxes
flexibility with online capital gains modelling tools that can assist in decision making
3 insurance providers

Our non-reliance on in-house products to generate revenue is a key differentiation point compared to institutionally owned platforms where ‘house’ brand investment, banking and insurance products are widely promoted.

We will continue to deliver significant technology and product enhancements for financial advisers, stockbrokers and accountants that value open architecture, flexibility and transparency. We are not constrained in what we offer through vertical integration with product manufacturers.

This independence is highly valued by our customers as they can freely access a wide choice of options in the best interests of their clients.

MARKET LEADING MANAGED PORTFOLIOS

HUB24 combines all the features of a traditional Wrap with the largest array of single sector and diversified managed portfolios available in the market. HUB24’s managed portfolio capability enables dealer groups to create and implement their own unique managed portfolios and subsequently participate in the value chain as a product manufacturer. Investors using managed portfolios are able to benefit from professional investment management in

FLEXIBLE TECHNOLOGY WITH AWARD-WINNING ONLINE AND MOBILE INTERFACES

HUB24’s purpose-built proprietary technology platform allows the company full control over development priorities to provide compelling and tailored solutions for our clients. The company is unconstrained by external vendors, and is well known for delivering platform enhancements at a more rapid rate than most, if not all, of our competitors, providing a significant competitive advantage.

HUB24’s clients, including advisers, fund managers and investors enjoy real-time access to investment and account information through 24/7 web and mobile device access via our award-wining online and mobile interfaces. Our technology incorporates electronic account opening, trading, reports, statements and communications, which enable HUB24 to deliver efficient and cost-effective services to all clients.

HUB24 also promotes the ability to brand or ‘white label’ our platform for licensees who want to tailor their platform solution to suit the individual needs of their business model, advisers and clients. This is a streamlined process for HUB24, and already accounts for more than 50% of total FUA with expectation for strong growth in coming years.

14 HUB24 ANNUAL REPORT 2015

BUSINESS OVERVIEW

DIRECTOR’S REPORT

Your Directors present their report together with the financial statements, on the consolidated entity (referred to hereafter as the ‘consolidated entity’ or ‘HUB24 consolidated entity’) consisting of HUB24 Limited (referred to hereafter as the ‘company’) and the entities it controlled for the year ended 30 June 2015.

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BRUCE HIGGINS

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ANDREW ALCOCK

BRUCE HIGGINS B ENG CP ENG, MBA, FAICD

ANDREW ALCOCK B BUS, GAICD

CHAIRMAN AND NON-EXECUTIVE DIRECTOR

Bruce is currently Chairman and Non-Executive Director of Legend Corporation Limited. Bruce was awarded the Ernst & Young Entrepreneur of the Year award in Southern California in 2005 and has a Bachelor Degree in Electronic Engineering and an MBA in Technology Management. He is a Chartered Professional Engineer and Fellow of the Australian Institute of Company Directors.

Bruce was appointed as Chairman of the Board on 19 October 2012.

Previous listed company directorships held in the last three years:

Feore Limited (resigned August 2013)
Q Technology consolidated entity (resigned December 2014)

MANAGING DIRECTOR

Andrew has over 20 years experience across wealth management encompassing advice, platforms, industry superannuation, insurance and information technology. Andrew was formerly Chief Operating Officer of Genesys Wealth Advisers and Head of the Genesys Equity Program, where he was a director of over 20 financial planning practices across Australia.

His previous executive roles include General Manager for Asteron’s wealth management business, where he was responsible for a broad range of superannuation and investment solutions for investors, employers, licensees and advisers.

Andrew’s extensive financial services experience solidly underpins his role as Managing Director of HUB24 Limited.

Andrew was appointed to the company’s Board on 29 August 2014 as Managing Director.

Previous listed company directorships held in the last three years: Nil.

HUB24 ANNUAL REPORT 2015 15

DIRECTOR’S REPORT

DIRECTOR’S REPORT

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VAUGHAN WEBBER

VAUGHAN WEBBER B EC

NON-EXECUTIVE DIRECTOR

Vaughan Webber is an experienced finance professional with a background in chartered accounting at a major international accountancy firm. Recently, Vaughan has had extensive financial public markets experience, having spent over 13 years in corporate finance at leading Australian mid-sized stockbrokers focussing on creating, funding and executing strategies for mid to small cap ASX listed companies.

Vaughan also has experience as a director with ASX listed public companies and is currently Non-Executive Chairman of Money3 Corporation Limited and Non-Executive Director of Anchor Resources Limited. Vaughan has a Bachelor Degree in Economics.

Vaughan was appointed to the company’s Board on 19 October 2012 and is the Chairman of the Audit, Risk and Compliance Committee.

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HUGH ROBERTSON
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HUGH ROBERTSON

NON-EXECUTIVE DIRECTOR

Hugh Robertson has over 25 years experience in the financial services industry, commencing his stockbroking career in 1983. During that time he has been involved in a number of successful stockbroking and equity capital markets businesses, including Falkiners Stockbroking and most recently Bell Potter Securities.

Hugh is currently a Non-Executive Director at Oncard International Limited and AMA Group Limited. Previously, Hugh has also held directorships with NSX Ltd, OAMPS Ltd, Catalyst Recruitment Ltd and Bell Potter Ltd (pre-IPO).

Hugh was appointed to the Board on 20 April 2011.

Previous listed company directorships held in the last three years:

Wentworth Holdings Limited (resigned 3 September 2013).

Previous listed company directorships held in the last three years:

Wentworth Holdings Limited (resigned 21 November 2013).

16 HUB24 ANNUAL REPORT 2015 DIRECTOR’S REPORT

DIRECTOR’S REPORT

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IAN LISTER

IAN LITSTER B SC (HONS)

NON-EXECUTIVE DIRECTOR

Ian Litster has over 10 years experience in designing and developing software for the financial services industries, particularly in the area of financial planning. He has been the founder of the companies behind the VisiPlan and COIN software packages, two of the leading financial planning systems in Australia. His main areas of expertise are the management of information technology organisations and software development. Ian has a Bachelor Degree in Science (Honours in Mathematics).

Ian was appointed to the Board on 25 September 2012 and is Chair of the Remuneration and Nomination Committee.

There were no other directors holding office during the financial year that were not company directors at the date of this report.

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MATTHEW HAES
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COMPANY SECRETARY

The name and details of the Company Secretary in office during the financial year and at the date of this report is as follows:

MATTHEW HAES B EC (SYD) ACA AGIA

Matthew Haes is the Chief Financial Officer and Company Secretary for HUB24 Limited.

Matthew’s financial services experience spans over 19 years in senior finance roles, covering wealth management, securitisation, capital markets, stockbroking and funds management. He spent eight years as Finance Manager and Company Secretary at Centric Wealth Limited where he developed the finance function and integrated businesses resulting from the company’s merger and acquisition activities.

Matthew is a Director of the HUB24 Group’s subsidiary companies, a member of the executive committee and serves the committees of the Board. Outside HUB24 he is a non-executive director and chairman of the Audit & Risk committee of an APRA-regulated Authorised Deposit-taking Institution (ADI).

Matthew has a Bachelor of Economics, and is a Chartered Accountant and Chartered Secretary.

Matthew was appointed Company Secretary on 10 September 2012.

HUB24 ANNUAL REPORT 2015 17

DIRECTOR’S REPORT

DIRECTOR’S REPORT

DIRECTOR’S INTERESTS

As at the date of this report, the interests of the Directors in the shares of the company were:

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Number of
Director
ordinary shares
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Bruce Higgins	566,811
Hugh Robertson	86,500
Ian Litster	3,588,751
Vaughan Webber	Nil
Andrew Alcock	31,387

CONSOLIDATED ENTITY OVERVIEW

HUB24 Limited operates the HUB24 investment and superannuation platform and provides financial advice to clients through financial advisers authorised by Paragem Pty Ltd.

The HUB24 investment and superannuation platform is recognised as a leading independent portfolio administration service that provides financial advisers with the capability to offer their clients access to a wide range of investments including market leading managed portfolio functionality, efficient and cost effective trading, insurance and comprehensive reporting for all types of investors – individuals, companies, trusts or self-managed super funds.

HUB24 was established in 2007 by a team with a very strong track record of delivering market-leading solutions in the financial services industry.

Paragem Pty Ltd is a wholly owned subsidiary and boutique dealer group. It comprises a network of 20 independently minded financial advice businesses that deliver cost effective, high quality advice. It provides compliance, systems and support to the practice enabling advisers to provide clients with financial advice over a range of products. Paragem Pty Ltd was acquired by HUB24 Limited on 3 September 2014.

PRINCIPAL ACTIVITIES

The principal activities during the year of the company were the provision of investment and superannuation portfolio administration services and the provision of financial advisory services.

CAPITAL RAISING

The company conducted a capital raising during the year ended 30 June 2015 to further strengthen its balance sheet, support the implementation of recently announced white label agreements and to maintain sufficient flexibility to pursue additional strategic opportunities as they arise.

$5.25 million in capital was raised from a placement of 5,000,000 ordinary shares at $1.05 on 24 March 2015.

REVIEW OF FINANCIAL RESULTS

The Consolidated entity recorded revenue from ordinary activities of $29.304 million for the year ended 30 June 2015 (revenue from ordinary activities of $4.034 million for the year ended 30 June 2014) an increase of 626%.

A loss of $6.457 million was recorded for the year ended 30 June 2015 (loss of $8.548 million for the year ended 30 June 2014) an improvement of 24%.

Included in this result were the following significant items:

Platform revenue increased by 151% to $8.057 million for the year ($3.209 million for the year ended 30 June 2014) and direct costs increased by 45% to $4.899 million ($3.376 million for the year ended 30 June 2014);
The acquisition of Paragem Pty Ltd on 3 September 2014 contributing $20.235million to the increase in revenue for the period and $0.389 million in legal and due diligence costs associated with the transaction were expensed;
Platform recurring revenue of $0.639 million and nonrecurring revenue of $0.377 million relating to a tax ruling received by the group during the period enabling it to claim the benefit of Reduced Input Tax Credits (“RITCs”) relating to the IDPS product;
Development expenditure of $0.781 million was capitalised during the year ($0.328 million for the prior corresponding period).

The following representation of the financial performance of the consolidated entity is based upon the internal reports that are reviewed and used by management and the board in assessing performance and determining the allocation of resources. Management and the board review Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) from continuing operations before material non-recurring and non-cash items.

18 HUB24 ANNUAL REPORT 2015 DIRECTOR’S REPORT

DIRECTOR’S REPORT

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FINANCIAL PERFORMANCE FY15 FY14 % VAR
Income $ $
Recurring Revenue - Platform 8,056,796 3,209,190 151%
Recurring Revenue - Licensee 20,235,321 -
Total Revenue 28,292,117 3,209,190 782%
Direct costs - Platform (4,898,589) (3,376,016) 45%
Direct costs - Licensee (18,550,883) -
Gross Profit 4,842,644 (166,826) 3003%
Operating expenses (5,260,676) (3,516,234) 50%
Operating EBITDA (418,032) (3,683,060) 89%
Growth Investment expenses (3,967,117) (3,552,845) 12%
EBITDA (4,385,149) (7,235,905) 39%
Other significant items:
Interest revenue 414,636 535,391 (23%)
Non-recurring revenue 597,429 289,361 106%
Share based payment expense (902,513) (427,895) 111%
Transaction costs (448,109) - 100%
Depreciation and amortisation (626,655) (1,028,915) (39%)
Profit before income tax (5,350,361) (7,867,963) 32%
Income tax - -
Profit after income tax from continuing operations (5,350,361) (7,867,963) 32%
Discontinued operations (1,106,537) (679,825) 63%
Profit after income tax (6,456,898) (8,547,788) 24%
Recurring Revenue 28,292,117 3,209,190 782%
Non-recurring revenue 597,429 289,361 106%
Interest revenue 414,636 535,391 (23%)
Revenue from ordinary activities 29,304,182 4,033,942 626%
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Revenue due to ordinary activities from continuing operations comprises Recurring revenue, Non-recurring revenue and interest revenue.

HUB24 ANNUAL REPORT 2015 19

DIRECTOR’S REPORT

DIRECTOR’S REPORT

REVENUE

Strong FUA inflows into the HUB24 platform, increased platform transaction activity and the acquisition of Paragem Pty Ltd on 3 September 2014 have resulted in recurring revenue of $28.292 million for the year ended 30 June 2015. Paragem Pty Ltd has contributed $20.235 million in revenue for the ten months ended 30 June 2015. Revenue is sensitive to movements in equity markets given a significant proportion of client funds are in either directly held or managed assets with equity market exposure.

GROSS PROFIT

Strong FUA inflows and increased trading activity at improved margins have driven a strong gross profit result for the year ended 30 June 2015 demonstrating the benefits of increasing scale.

Direct costs include custody, trustee, superannuation administration and headcount resources to service current client accounts together with payments to advisers and suppliers of compliance, software and training services.

OPERATING EBITDA

Operating EBITDA is a representation of the EBITDA result the company would record if it were to service only the current amount of FUA and associated client accounts. It assumes no expenses are invested to bring additional FUA onto the platform and develop new platform features. While HUB24 will continue to invest in the expansion of FUA and further development, Operating EBITDA is an important internal measure and milestone for the company as it continues its pathway to profitability.

The Operating EBITDA result for the year ended 30 June 2015 has improved by 89% over the previous corresponding period.

GROWTH INVESTMENT EXPENSES

Growth investment expenses are predominantly headcount resources dedicated to future platform development, business strategy (inclusive of M&A activity) and to accelerate additional FUA onto the platform. It includes resources across sales, development and transition functions.

OTHER SIGNIFICANT ITEMS

Non-recurring revenue of $0.377 million was recorded during the period from Reduced Input Tax Credits received by the company relating to the period to 30 June 2014. A further $0.220 million of non-recurring other income has resulted from the change in accounting policy relating to Research & Development rebates.

Share based payment expenses for the year of $0.903 million was inclusive of $0.465 million relating to the acquisition of Paragem Pty Ltd (Refer note 30) and $0.438 million due to the issue of options to executives, the Chairman and staff during the past two financial years ended 30 June 2015.

Transaction costs of $0.448 million are legal and due diligence costs associated with the acquisition of Paragem Pty Ltd and the acquisition of a book of self directed clients that transferred to the HUB24 platform on 1 July 2015.

Amortisation of the platform intangible has reduced significantly during the period due to the useful life of the platform being reassessed to November 2030 from November 2020.

DISCONTINUED OPERATIONS EXPENSE

During the year ended 30 June 2015 the company changed its methodology in provisioning for adviser client claims arising from financial advice provided under the discontinued stockbroking operation prior to 1 March 2013. Reported claims during the year and an estimate of future claims and associated legal costs have resulted in an increase in the provision of $0.742 million during the year ended 30 June 2015.

Discontinued operations expense also includes $0.234 million provided against the sale of trading software to BBY (in liquidation).

CASH FLOWS

The Group held $12.1m in cash and cash equivalents as at 30 June 2015. Cash outflows from operating activities were $1.772 million for the second half of the financial year ended 30 June 2015 significantly reduced from $3.584 million in the first half.

20 HUB24 ANNUAL REPORT 2015 DIRECTOR’S REPORT

DIRECTOR’S REPORT

OPERATING SEGMENTS

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Investment Licensee
FINANCIAL PERFORMANCE -
Platform Services Corporate FY15 FY14 VAR
SEGMENTS
$ $ $ $ $ %
Income
Recurring Revenue - Platform 8,056,796 8,056,796 3,209,190 151%
-
Recurring Revenue - Licensee 20,235,321 20,235,321
Total Revenue 8,056,796 20,235,321 28,292,117 3,209,190 782%
Direct costs - Platform (4,898,589) (4,898,589) (3,376,016) 45%
Direct costs - Licensee (18,550,883) (18,550,883) -
Gross Profit 3,158,207 1,684,437 4,842,644 (166,826) 3003%
Operating expenses (3,358,855) (1,623,751) (278,071) (5,260,676) (3,516,234) 50%
Segment Operating EBITDA (200,648) 60,687 (278,071) (418,032) (3,683,060) 89%
Growth Investment expenses (3,868,680) (98,438) (3,967,117) (3,552,845) 12%
Segment EBITDA (4,069,328) 60,687 (376,508) (4,385,149) (7,235,905) 39%
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The principal products and services for each of the operating segments are as follows:

Platform Development and provision of investment and superannuation platform services to financial advisers, stockbrokers, accountants and their clients. Licensee Provision of financial advice to clients through financial advisers authorised by Paragem Pty Ltd. The Licensee provides compliance, systems and support to adviser practices enabling advisers to provide clients with financial advice over a range of products. Corporate Provision of corporate services to the operating segments including allocation of costs of the Managing Director, Finance & compliance and strategic support.

HUB24 ANNUAL REPORT 2015 21

DIRECTOR’S REPORT

DIRECTOR’S REPORT

PLATFORM SEGMENT

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Restated
Platform FY15 FY14 [1] VAR
$ $ %
FUA (as at 30 June) 1,704m 854m 100%
Recurring Revenue 8,056,796 3,209,190 151%
Total Revenue 8,056,796 3,209,190 151%
Direct costs (4,898,589) (3,376,016) 45%
Gross Profit 3,158,207 (166,826) 1993%
Operating expenses (3,358,855) (3,235,049) 4%
Segment Operating
(200,648) (3,401,875) 94%
EBITDA
Growth Investment
(3,868,680) (3,434,720) 13%
Expenses
Segment EBITDA (4,069,328) (6,836,595) 40%
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1Restated to recognise corporate segment in for FY2014

The platform segment recorded significant improvements in Revenue, Gross Profit, Operating EBITDA and EBITDA for the year ended 30 June 2015 due to increases in FUA and increases in transaction volumes at improved in margins. Positive quarterly operating EBITDA has been recorded since the third quarter of FY2015.

While recurring revenue increased by 151%, direct costs increased by only 45% and operating expenses increased by 4% demonstrating the continued benefits of scale.

Included in the result for the platform segment was the following:

Platform FUA based fees increasing by 119% for the year ended 30 June 2015 compared to the prior corresponding period derived from an FUA increase of 100%
Platform transaction fees increasing 223% for the year ended 30 June 2015 compared to the prior corresponding period driven by increased volumes for platform trading, managed funds and insurance

The results for the Platform segment shown as a percentage of average FUA for the year demonstrate margin improvements at each level for the financial year ended 30 June 2015.

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FY15 FY14
Platform Basis points Basis points VAR
of FUA of FUA %
----- End of picture text -----

RecurringRevenue	0.63%	0.52%	22%
Direct costs	0.38%	0.55%	30%
Gross Proft	0.25%	(0.03%)	1016%
Operatingexpenses	(0.26%)	(0.57%)	50%
Segment Operating EBITDA	(0.01%)	(0.60%)	97%
Growth Investment Expenses	(0.30%)	(0.57%)	45%
Segment EBITDA	(0.32%)	(1.17%)	71%

In addition to significant improvements in financial performance year on year, the second half recorded positive Operating EBITDA. Further scale benefits were realised during the second half of the year with Gross Profit increasing to 0.29% from 0.20%, Operating EBITDA to 0.05% from (0.11%) and EBITDA of (0.23%) from (0.45%) of average FUA for the period.

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----- Start of picture text -----

1H 2H 1H 2H
Platform
FY14 FY14 FY15 FY15
----- End of picture text -----

Recurring Revenue	0.55%	0.50%	0.62%	0.65%
Direct costs	0.66%	0.47%	0.42%	0.37%
Gross Proft	(0.11%)	0.03%	0.20%	0.29%
Operating	0.64%	0.45%	0.31%	0.24%
expenses
Segment Operating EBITDA	(0.74%)	(0.42%)	(0.11%)	0.05%
Growth Investment Expenses	0.62%	0.51%	0.35%	0.28%
Segment EBITDA	(1.36%)	(0.93%)	(0.45%)	(0.23%)

Platform recurring revenue of $0.639 million and nonrecurring revenue of $0.377 million relating to a tax ruling received by the group during the period enabling it to claim the benefit of Reduced Input Tax Credits (“RITCs”) relating to the IDPS product

22 HUB24 ANNUAL REPORT 2015 DIRECTOR’S REPORT

DIRECTOR’S REPORT

PLATFORM SEGMENT - 2HFY2015 VS 1HFY2015

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$’M
6.0
5.0
4.0
3.0
2.0
1.0
0
(1.0)
(2.0)
(3.0)
Revenue Gross Operating EBITDA
Profit EBITDA
1HFY15 2HFY15
----- End of picture text -----

Chart above demonstrates the dual impact of increasing volumes and increasing margins on revenue, Gross Profit, Operating EBITDA and EBITDA when comparing 2HFY2015 to 1HFY2015.

LICENSEE SEGMENT

Paragem provides licensing for financial planning practices with above average funds under advice. The practices typically seek the freedom to exert their independence through non conflicted investment and insurance options and they embrace the changing shape of the advice industry toward managed accounts with superior portfolio reporting and investment flexibility. While Paragem advisers continue to be free to choose whichever platform best suits their clients’ needs, the take-up of HUB24 has been strong due to the ability of the platform to cater for both traditional managed fund investments as well as the emerging breed of managed portfolios and SMAs typically expected in the high net worth investor and SMSF sectors.

Paragem provides assistance to practices wishing to implement managed accounts for their clients, assisting them to deliver contemporary investment solutions and improving the efficiency of their business such that operational scale and professional fees are the primary drivers of profitability. This philosophy is aligned with best of breed advisers in the financial planning industry.

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10 Months ending
Licensee 30 June 2015
$
Recurring Revenue 20,235,321
Total Revenue 20,235,321
Direct costs (18,550,883)
Gross Profit 1,684,437
Operating expenses (1,623,751)
Segment Operating EBITDA 60,687
Segment EBITDA 60,687
----- End of picture text -----

The licensee segment has contributed to ten months earnings for the period. Revenue is generated from 20 practices with 50 licensed advisers and is 19% greater than the prior corresponding period (10 months ended 30 June 2014).

The segment has made a positive contribution to EBITDA for the period.

HUB24 ANNUAL REPORT 2015 23

DIRECTOR’S REPORT

DIRECTOR’S REPORT

PARAGEM PTY LTD REVENUE

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$’M
30
25
20
15
10
5
0
2010 2011 2012 2013 2014 2015
----- End of picture text -----

Note: acquired by HUB24 on 3 September 2014.

CORPORATE SEGMENT

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Restated
CORPORATE FY15 FY14 [1] VAR
$ $ %
Operating expenses (278,071) (281,185) (1%)
Growth resources
(98,438) (118,125) (17%)
expensed
Segment EBITDA (376,508) (399,310) (6%)
----- End of picture text -----

[1] Restated to recognise corporate segment in for FY2014

A portion of operating expenses and growth resources were allocated to the Corporate segment in the 10 months to 30 June 2015. These expenses predominantly relate to corporate headcount overheads that cannot be directly attributed to either operating segment.

Revenue growth

The Paragem business has grown revenues strongly over the past 5 years with growth continuing during the period.

Integration of the business

Corporate and financial integration of the Paragem business into HUB24 was completed seamlessly within the first half of the financial year and the two groups have begun working proactively together.

This acquisition of Paragem is consistent with HUB24’s core proposition of providing high value services to licensees and advisers. This entry into the advice space is expected to result in a further enhancement of HUB24’s rapid growth, diversification of the company’s revenue streams and continued improvements to platform functionality, which will be highly valued by the broader independently minded financial advice market.

REVIEW OF OPERATIONS

HUB24 Limited completed the acquisition of 100% of the issued shares in Paragem Pty Ltd on 3 September 2014.

The Company paid $0.905 million as upfront consideration net of cash acquired, is due to make a deferred cash consideration payment of $1.0 million on 3 September 2015 and capped earnout consideration of up to $6.0 million subject to financial performance measured over three years and payable in HUB24 ordinary shares.

The deferred purchase consideration (including contingent consideration) to the vendor is $2.967 million and contingent consideration to the option holders is $4.0 million which assumes 100% of performance criteria are met. The contingent consideration to the option holders comprises purchase consideration of $2.327 million, recorded as a liability, and a share based payments expense of $1.673 million which is expensed over three years from completion date.

24 HUB24 ANNUAL REPORT 2015 DIRECTOR’S REPORT

DIRECTOR’S REPORT

760,000 share options were issued to staff and executives on 17 October 2014 under the HUB24 Share Option plan. 1,200,000 options were issued to executives on 4 December 2014 after being approved by shareholders at the Annual General Meeting of the Company held 27 November 2014.

Andrew Alcock was appointed to the position of Managing Director effective 29 August 2014.

Refer to the Chairman and Managing Director’s report for further details.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

Other than the acquisition of Paragem Pty Ltd on 3 September 2014, there have been no significant changes in the nature or state of affairs of the consolidated entity.

SIGNIFICANT EVENTS AFTER THE REPORTING DATE

No matters or circumstances have arisen since 30 June 2015 that have significantly affected, or may significantly affect the consolidated entity’s operations, the results of those operations, or the consolidated entity’s state of affairs in future financial years.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS

Continuing rapid growth in FUA to the investment and superannuation platform and significant platform development over the past three years see the company approaching the significant milestone of $2 billion in FUA. The company’s

operations have scaled well with this rapid growth and the benefits of scale have emerged during the financial year.

Management and the Board are confident the company will continue to grow into the foreseeable future.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The consolidated entity’s operations are not subject to significant environmental regulations under Australian legislation in relation to the conduct of its operations.

DIRECTORS INDEMNITY

During the 2015 financial year the consolidated entity paid a premium in respect of a contract, insuring all the Directors and officers against liability, except wilful breach of duty, of a nature that is required to be disclosed under section 300(8) of the Corporations Act 2001. In accordance with commercial practice, the amount of the premium has not been disclosed.

ROUNDING OF AMOUNTS

The company is of a kind referred to in Class Order 98/100, issued by the ASIC, relating to the ‘rounding off’ of amounts in the Director’s report. Amounts in these reports have been rounded off in accordance with that Class Order to the nearest dollar, or in certain cases to the nearest thousand dollars.

MEETINGS OF DIRECTORS

The number of meetings of Directors (including meetings of committees of Directors) held during the year and the number of meetings attended by each Director was as per the table below.

Director	Board Attended	Meetings Held*	Audit, Risk & Compliance Committee Meetings Attended Held*	Audit, Risk & Compliance Committee Meetings Attended Held*	Remuneration & Nomination Committee Attended Held*	Remuneration & Nomination Committee Attended Held*
Bruce Higgins	14	14	3	3	3	3
Andrew Alcock	14	14	3	3	3	3
Ian Litster	13	14	2	3	3	3
Hugh Robertson	11	14	-	-	-	-
Vaughan Webber	13	14	3	3	3	3

*Number of meetings held during the time the Director held office or was a member of the committee.

HUB24 ANNUAL REPORT 2015 25

DIRECTOR’S REPORT

DIRECTOR’S REPORT

REMUNERATION REPORT – AUDITED

This remuneration report, which has been audited, outlines the key management personnel remuneration arrangements for the consolidated entity, in accordance with the requirements of Section 300A of the Corporations Act 2001 and its Regulations.

The remuneration report is set out under the following main headings:

A – Principles used to determine the nature and amount of remuneration
B – Details of remuneration
C – Service agreements
D – Share based compensation
E – Additional information
F – Additional disclosures relating to key management personnel

A. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION

For the purposes of this report Key Management Personnel (KMP) of the consolidated entity are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the company and the consolidated entity, directly or indirectly, including any Director (whether executive or otherwise) of the company.

REMUNERATION PHILOSOPHY

The performance of the consolidated entity depends upon the quality of its Directors and Executives (collectively hereafter KMP). To prosper, the consolidated entity must attract, motivate and retain highly skilled KMPs and to ensure reward for performance is competitive and appropriate for the results achieved.

To this end, the consolidated entity embodies the following principles in its remuneration framework:

Focus on sustained growth in shareholder wealth, consisting of share price growth
Provide competitive and reasonable rewards to attract high calibre individuals
Focus the executive on key drivers of value including capital management
Transparency and acceptability to shareholders.

REMUNERATION AND NOMINATION COMMITTEE

The Remuneration and Nomination Committee is responsible for making recommendations to the Board on the remuneration arrangements for Non-Executive Directors and management. The Remuneration and Nomination Committee assesses the appropriateness of the nature and amount of remuneration on a periodic basis by reference to relevant employment market conditions, with the overall objective of ensuring maximum stakeholder benefit from the retention of a high performing Director and management team.

The current members of the Remuneration and Nomination Committee are Ian Litster (Chair), Bruce Higgins and Vaughan Webber. Their qualifications and experience are set out earlier in this report.

In reviewing performance, the Remuneration and Nomination Committee conducts an evaluation based on specific criteria, including the consolidated entity’s business performance, whether strategic objectives are being achieved and the development and performance of management and personnel.

REMUNERATION STRUCTURE

In accordance with best practice corporate governance, the structure of Non-Executive Director and other KMP remuneration is separate and distinct.

NON-EXECUTIVE DIRECTOR REMUNERATION

Objective and Structure

The Board seeks to set aggregate remuneration at a level which provides the company with the ability to attract and retain Directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.

The amount of fixed remuneration is established for individual Non-Executive Directors by resolution of the full Board, at its discretion. The annual aggregate non-executive remuneration may not exceed the amount fixed by the company in General Meeting for that purpose (currently fixed at a maximum of $400,000 per annum as approved by shareholders at the Annual General Meeting held on 26 November 2010).

26 HUB24 ANNUAL REPORT 2015 DIRECTOR’S REPORT

DIRECTOR’S REPORT

The following base fees including superannuation apply for Non-Executive directors:

Chairman	$103,572p.a.
Other Non-Executive Directors	$59,359p.a.

Structure

The Remuneration and Nomination Committee may from time to time receive advice from independent remuneration consultants to ensure executive remuneration is appropriate and in line with market.

Remuneration may consist of the following key elements:

RETIREMENT ALLOWANCES FOR DIRECTORS

There are no retirement schemes or retirement benefits other than statutory benefits for Non-Executive Directors.

The Remuneration and Nomination Committee may from time to time receive advice from independent remuneration consultants to ensure Non-Executive Director’s fees and payments are appropriate and in line with market. The Chairman’s fees are determined independently to the fees of other non-executive directors based on comparative roles in the external market.

No additional fees are paid for each Board committee on which a Director sits, however Directors are also entitled to be reimbursed for reasonable travel, accommodation and other expenses incurred as a consequence of their attendance at Board meetings and otherwise in the execution of their duties as Directors.

The remuneration of Non-Executive Directors for the financial years ending 30 June 2015 and 30 June 2014 respectively are detailed in the Remuneration of KMP section of this Remuneration Report.

Director’s compensation increased by 1.8% over the prior financial year.

Fixed salary
Short term incentives (STIs)
Long term Incentives (LTIs)
Share based incentives

FIXED SALARY

Objective and Structure

The level of fixed remuneration is set in order to provide a base level of remuneration, which is both appropriate to the position and is competitive in the market.

Fixed salaries are reviewed annually by the Board of Directors and the process consists of a review of companywide business unit and individual performances, relevant comparative remuneration in the market and internal and, where appropriate, external advice on policies and practices. KMPs receive their fixed remuneration in cash.

SHORT TERM INCENTIVES (STIS)

Objective and Structure

EXECUTIVE REMUNERATION

Objective

The consolidated entity aims to reward executives with a level and mix of remuneration commensurate with their position and responsibilities to:

align the interests of executives with those of shareholders
link reward with the strategic goals and performance of the consolidated entity

The objective of STIs is to reward executives who are remunerated with fixed remuneration in a manner that focusses them on achieving personal and business goals which contribute to the creation of sustained shareholder value.

STI payments are granted to executives based upon specific annual financial and business plan targets being achieved as determined by the Board.

The STI facilitates annual cash/equity opportunities that reflect performance. Details of the STI bonuses earned for each executive are detailed in Part C of this report.

ensure total remuneration is competitive by market standards.

HUB24 ANNUAL REPORT 2015 27

DIRECTOR’S REPORT

DIRECTOR’S REPORT

LONG TERM INCENTIVES (LTIS)

HUB24 PERFORMANCE AND LINK TO REMUNERATION

Objective and Structure

KMPs may be eligible to participate in the Employee Share Option Plan (ESOP) of the company, which was approved at the Annual General Meeting of the company on 27 November 2014 for the purposes of issuing options over ordinary shares. Additionally, the Board of Directors may, at their discretion and with the approval of shareholders, (as required) elect to remunerate KMPs through the issue of share options outside of this plan.

Remuneration of certain executives is directly linked to performance of the consolidated entity. 50% of the amount potentially payable under the STI is based on the performance of the executive against KPIs relating to the Company’s business plan, while 50% of the amount potentially payable under the STI is based on the performance of the executive against KPIs relating to stretch objectives associated with profitability and margin objectives.

USE OF REMUNERATION CONSULTANTS

The terms of the options issued are structured so that sales restrictions are in force over the options or shares for two or more years as well as vesting structures that incorporate share price performance hurdles and continuing service obligations ensuring alignment with shareholder value creation.

SHARE BASED INCENTIVES

Objective

The objective of share based remuneration is to reward KMPs and staff (where applicable) in a manner that aligns this element of remuneration with the creation of shareholder value. As such, ordinary share and share option grants may be made to executive KMPs who are able to influence the generation of shareholder wealth and thus have an impact on the company’s performance.

Structure

During the financial year ended 30 June 2015 the company did not use the services of remuneration consultants.

VOTING AND COMMENTS MADE AT THE COMPANY’S 2014 ANNUAL GENERAL MEETING

At the 2014 AGM, 98.73% of votes received supported the adoption of the remuneration report for the year ended 30 June 2014. The company did not receive any specific feedback at the AGM regarding its remuneration practices.

B. DETAILS OF REMUNERATION

Summary of Key Terms of Managing Director’s Employment Agreement

The details of Mr Alcock’s service agreement are set out in part C of this report.

Remuneration of Key Management Personnel

Share based remuneration to KMPs may be delivered in the form of shares, partly-paid shares, or grants under the Employee Share Plan or as share option grants, as the Board recommends in its discretion, on a case by case basis. Recipients of share based remuneration may be required to meet vesting or issue conditions, including length-of-service, and market and non-market performance based criteria, including sustained share price targets.

Details of the nature and amount of each element of the remuneration of KMP of the consolidated entity for the financial year are set out in Part C of this report. Key Management Personnel are defined as those persons having authority and responsibility for planning, directing and controlling the activities of the company, directly or indirectly, including any Director (whether executive or otherwise).

28 HUB24 ANNUAL REPORT 2015 DIRECTOR’S REPORT

DIRECTOR’S REPORT

All executives have rolling agreements. The company may generally terminate the executive’s employment agreement by providing between one and six months’ written notice depending on the agreement or providing payment in lieu of the notice period (based on the fixed component of the executive’s remuneration).

The company may terminate the contract at any time without notice if serious misconduct has occurred. Where termination with cause occurs, the executive is only entitled to that portion of remuneration that is fixed, and only up to the date of termination. On termination with cause, any unvested options will immediately be forfeited.

Executives have the opportunity to earn an annual STI if predefined targets are achieved. The Managing Director has a target STI opportunity of 100% of fixed remuneration and other members of the executive team have an STI opportunity ranging from 0% to 100% of fixed remuneration. 50% of the STI is for meeting base case objectives, while 50% is for meeting stretch case objectives. Up to 70% of the STI may be paid in shares in HUB24.

STI awards for the executive team in the 2015 financial year were based upon scorecard measures and weightings as disclosed below. These targets were set by the Remuneration and Nomination Committee at the beginning of the financial year and align to the Company’s strategic and business objectives.

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Performance category Metrics Base case weighting Stretch case weighting
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Financial	Net Proft after Tax	29%	-
Growth	FUA, development targets	27%	75%
Strategy	Deliver strategic opportunities	15%	25%
Compliance & Operations	Fraudprevention & system improvements	19%	-
Leadership	Organisational development	10%	-

For each STI the percentage of the available bonus that was awarded in relation to the 2015 financial year and the percentage that was forfeited because the person did not meet the service and performance criteria is set out below.

STI ENTITLEMENT

Name	Entitlement	Current Year Awarded	STI entitlement Forfeited
Andrew Alcock	100%	77.9%	22.1%
Mark Ballinger	30%	80.6%	19.4%
Jason Entwistle	100%	79.2%	20.8%
Wes Gillett	100%	64.9%	35.1%
		% of Salary
Joseph Gioffre	Discretionary	15.2%	-
Matthew Haes	Discretionary	19.0%	-

HUB24 ANNUAL REPORT 2015 29

DIRECTOR’S REPORT

DIRECTOR’S REPORT

REMUNERATION EXPENSES FOR KEY MANAGEMENT PERSONNEL

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Short Post
Long Term Share Based
2015 Term Employment
Benefits Payments
Benefits Benefits
Long
Salary Non- Super- Performance
$ Bonus Service Shares Options Total
and Fees monetary annuation Related %
Leave
Non-Executive Directors
Bruce Higgins 103,572 - - - - - 53,443 157,015 0%
Ian Litster 59,359 - - - - - - 59,359 0%
Hugh Robertson 59,359 - - - - - - 59,359 0%
Vaughan Webber 59,359 - - - - - - 59,359 0%
Subtotal Non-Executive Directors 281,649 - - - - - 53,443 335,092
Key Management Personnel
Andrew Alcock
378,709 295,000 - 18,784 1,973 - 77,073 771,539 38%
Managing Director
Mark Ballinger 186,116 45,000 - 18,784 1,094 1,000 3,287 255,281 18%
Head of Business Program
Jason Entwistle
302,860 240,000 - 18,784 1,568 1,000 62,620 626,832 38%
Head of Strategic Developments
Wes Gillett
231,111 150,000 - 18,784 1,960 1,000 46,965 449,820 33%
Head of Product and Distribution
Joseph Gioffre 216,886 45,000 - 18,784 2,702 1,000 10,981 295,353 15%
Head of Operations
Matthew Haes
224,943 62,000 - 18,784 4,109 1,000 15,949 326,785 19%
CFO & Company Secretary
Subtotal
1,540,625 837,000 - 112,704 13,406 5,000 216,875 2,725,610
Key Management Personnel
Total 1,822,274 837,000 - 112,704 13,406 5,000 270,318 3,060,702
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30 HUB24 ANNUAL REPORT 2015 DIRECTOR’S REPORT

DIRECTOR’S REPORT

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Short Post
Long Term Share Based
2014 Term Employment
Benefits Payments
Benefits Benefits
Long
Salary Non- Super- Performance
$ Bonus Service Shares Options Total
and Fees monetary annuation Related %
Leave
Non-Executive Directors
Bruce Higgins 101,724 - - - - - 76,289 178,013 0%
Ian Litster 58,300 - - - - - - 58,300 0%
Hugh Robertson 58,300 - - - - - - 58,300 0%
Vaughan Webber 58,300 - - - - - - 58,300 0%
Subtotal Non-Executive Directors 276,624 - - - - - 76,289 352,913
Key Management Personnel
Andrew AlcockChief Executive Officer [1] 351,293 219,688 - 16,294 636 1,000 80,404 669,315 33%
Mark Ballinger [2] 158,923 20,000 - 13,340 312 - - 192,575 10%
Head of Business Program
Jason Entwistle [3] 294,204 157,500 - 16,294 491 1,000 64,323 533,811 29%
Head of Strategic Developments
Wes Gillett 249,167 102,800 - 18,062 949 1,000 48,242 420,220 24%
Head of Product and Distribution
Joseph Gioffre 210,748 19,040 - 17,874 825 1,000 11,599 261,086 7%
Head of Operations
Matthew Haes 216,949 33,000 - 17,888 669 1,000 16,674 286,180 11%
CFO and Company Secretary
Subtotal 1,481,284 552,028 - 99,752 3,882 5,000 221,242 2,363,188
Key Management Personnel
Total 1,757,908 552,028 - 99,752 3,882 5,000 297,531 2,716,101
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A. Alcock was appointed Chief Executive Officer on 29 July 2013
M. Ballinger was appointed Head of Business Program on 16 August 2013.
J. Entwistle resigned as Acting Chief Executive Officer and was appointed Head of Strategic Developments on 1 August 2013

HUB24 ANNUAL REPORT 2015 31

DIRECTOR’S REPORT

DIRECTOR’S REPORT

The proportion of remuneration linked to performance and the fixed proportion are as follows:

Name	Fixed 2015	remuneration 2014	At risk - STI 2015 2014	At risk - STI 2015 2014	At risk - LTI 2015 2014	At risk - LTI 2015 2014
Non-Executive Directors
Bruce Higgins	66%	57%	-	-	34%	43%
Ian Litster	100%	100%	-	-	-	-
Hugh Robertson	100%	100%	-	-	-	-
Vaughan Webber	100%	100%	-	-	-	-
Other Key Management Personnel
Andrew Alcock	47%	38%	44%	38%	9%	24%
Mark Ballinger	78%	77%	21%	23%	1%	-
Jason Entwistle	47%	38%	44%	38%	9%	23%
Wes Gillett	48%	39%	44%	39%	9%	21%
Joseph Gioffre	81%	88%	-	-	19%	12%
Matthew Haes	80%	84%	-	-	20%	16%

C. SERVICE AGREEMENTS

On appointment to the Board, all Non-Executive Directors enter into a service agreement with the company in the form of a letter of appointment. The letter summarises the Board policies and terms, including compensation relevant to the office of Director.

Remuneration and other terms of employment for key management personnel are formalised in service agreements.

The major provisions of the agreements relating to remuneration are set out below. Salaries are for FY 2015 and are subject to review annually by the Remuneration and Nominations Committee. There are no termination payment benefits other than the contracted notice periods.

32 HUB24 ANNUAL REPORT 2015 DIRECTOR’S REPORT

DIRECTOR’S REPORT

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Base Salary
Notice period
Name (including STI LTI Term of agreement
– either party
superannuation)
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Andrew Alcock	$379,118	Up to 100% of	200,000	Unspecifed –	6 months
Chief Executive Offcer		base salary1	options2	commenced
				29 July 2013
Mark Ballinger	$225,449	Up to 30% of	100,000	Unspecifed –	3 months
Head of Business Program		base salary	options3	commenced
				10 September 2013
Jason Entwistle	$308,307	Up to 100% of	160,000	Unspecifed –	6 months
Director, Strategic Development		base salary1	options3	commenced
				1 August 2013
Wesley Gillett	$259,100	Up to 100% of	120,000	Unspecifed –	6 months
Head of Product & Distribution		base salary1	options3	Commenced
				19 April 2013
Joseph Gioffre	$230,781	Discretionary	80,000	Unspecifed –	1 month
Head of Operations			options3	commenced
				3 July 2012
Matthew Haes	$236,557	Discretionary	120,000	Unspecifed –	1 month
Chief Financial Offcer and			options3	commenced
Company Secretary				26 June 2012

50% of STI payable upon achieving financial and business plan targets set by the Board. A further 50% payable upon the achievement of stretch targets set by the Board.
Options for Andrew Alcock, have a one year sale restriction after vesting and exercise. Vesting no earlier than 36 months from date of issue subject to achieving share price hurdles.
Options for Jason Entwistle, Wesley Gillett, Matthew Haes, Joseph Gioffre and Mark Ballinger have a one year sale restriction after vesting and exercise. Vesting no earlier than 36 months from date of issue subject to achieving share price hurdle.

Management personnel have no entitlement to termination payments in the event of removal for misconduct.

HUB24 ANNUAL REPORT 2015 33 DIRECTOR’S REPORT

DIRECTOR’S REPORT

D. SHARE BASED COMPENSATION

Options

The terms and conditions of each grant of options affecting remuneration of KMP in the current or a future reporting period are as follows:

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Value per
Balance Issued Exercised/ Balance
Expiry Exercise option Performance %
Grant Date at start during Cancelled at end of
Date Price at grant achieved Vested
of Year year during year year
date
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7 August 2013	14 October 2017	$0.8424	$0.38	yes	100%	195,000	Nil	Nil	195,000
8 August 2013	8 August 2017	$0.8438	$0.38	One third achieved	33.3%	1,440,000	Nil	Nil	1,440,000
8 August 2013	8 August 2017	$0.8438	$0.37	One third achieved	33.3%	510,000	Nil	Nil	510,000
17 October 2014	17 October 2019	$0.98	$0.14	No	Nil	Nil	580,000	Nil	580,000
2 December 2014	17 October 2019	$0.98	$0.14	No	Nil	Nil	200,000	Nil	200,000

Options granted carry no dividends or voting rights.

Options granted 7 August 2013 under the HUB Employee Share Option Plan have vested during the reporting period. These option can be exercised after the 2nd anniversary of the date of issue.

Options granted 8 August 2013 to executives vest subject to the following:

One third of the Options subject to, and vesting on, performance of a hurdle of a 20% share price increase (on the Exercise Price) in any consecutive 20 day period occurring at any time after the date that is 12 months after the date of issue of the Options and before the expiry of the term of the Options. These options have vested during the reporting period.
A further one third of the Options subject to, and vesting on, a hurdle of a 40% share price increase (on the Exercise Price) in any consecutive 20 day period occurring at any time after the date that is 24 months after the date of issue of the Options and before the expiry of the term of the Options; and
The remaining one third of the Options subject to, and vesting on, a hurdle of a 60% share price increase (on the Exercise Price) in any consecutive 20 day period occurring at any time after the date that is 36 months after the date of issue of the Options and before the expiry of the term of the Options.

34 HUB24 ANNUAL REPORT 2015 DIRECTOR’S REPORT

DIRECTOR’S REPORT

These options may be exercised upon vesting. Sale of shares are restricted for a period of 2 years after issue, with the exception that the sale of a portion of shares to fund taxation obligations directly arising from the exercise of the Options will be permitted, subject to compliance with legal obligations in respect of the sale of Company shares.

Options granted 8 August 2013 to the Chairman vest subject

to the following:

One third of the Options subject to, and vesting on, performance of a hurdle of a 30% share price increase (on the Exercise Price) in any consecutive 20 day period occurring at any time after the date that is 12 months after the date of issue of the Options and before the expiry of the term of the Options. This tranche vested during the current financial year. These options have vested during the reporting period.
A further one third of the Options subject to, and vesting on, a hurdle of a 60% share price increase (on the Exercise Price) in any consecutive 20 day period occurring at any time after the date that is 24 months after the date of issue of the Options and before the expiry of the term of the Options; and
The remaining one third of the Options subject to, and vesting on, a hurdle of a 90% share price increase (on the Exercise Price) in any consecutive 20 day period occurring at any time after the date that is 36 months after the date of issue of the Options and before the expiry of the term of the Options.

Options granted 17 October 2014 under the HUB Employee Share Option Plan vest subject to the following share price hurdle:

The closing sale price of the Shares traded on the Australian Securities Exchange must have increased by at least 60% of the Exercise Price of the Options for each day in any 20 consecutive trading day period starting on or after the 3rd anniversary of the date of issue of the Options. These option can be exercised, subject to satisfaction of vesting conditions, after the 3rd anniversary of the date of issue.

Options granted 2 December 2014 to A. Alcock vest subject to the following:

The closing sale price of the Shares traded on the Australian Securities Exchange must have increased by at least 60% of the Exercise Price of the Options for each day in any 20 consecutive trading day period starting on or after 36 months after the date of issue of the Options. These option can be exercised, subject to satisfaction of vesting conditions, after the 3rd anniversary of the date of issue.

HUB24 ANNUAL REPORT 2015 35

DIRECTOR’S REPORT

DIRECTOR’S REPORT

==> picture [495 x 51] intentionally omitted <==

----- Start of picture text -----

Financial Number Number of
Number Value of
Financial Years in of options options lapsed /
Name of options options at
Year of grant which options vested during forfeited during
granted grant date
may vest the year the year
----- End of picture text -----

Andrew Alcock	2015	2018	200,000	$40,800	Nil	Nil
Andrew Alcock	2014	2017	600,000	$228,000	200,000	Nil
		2016
		2015
Mark Ballinger	2015	2018	100,000	$20,500	Nil	Nil
Jason Entwistle	2015	2018	160,000	$32,800	Nil	Nil
Jason Entwistle	2014	2017	480,000	$182,400	160,000	Nil
		2016
		2015
Wes Gillett	2015	2018	120,000	$24,600	Nil	Nil
Wes Gillett	2014	2017	360,000	$136,800	120,000	Nil
		2016
		2015
Joseph Gioffre	2015	2018	80,000	$16,400	Nil	Nil
Joseph Gioffre	2014	2015	80,000	$30,400	80,000	Nil
Matthew Haes	2015	2018	120,000	$24,600	Nil	Nil
Matthew Haes	2014	2015	115,000	$43,700	115,000	Nil
Bruce Higgins	2014	2017	510,000	$188,700	170,000	Nil
		2016
		2015

The assessed fair value at grant date of the options granted to individuals is allocated equally over the period from grant date to expected vesting date and the amount is included in the remuneration tables in Part C. Fair values at grant date are independently determined using a Black Scholes option pricing model that takes into account the exercise price, term of the option, share price at grant date, expected price volatility of the underlying share price and the risk free rate for the term of the option.

No options have been exercised during the financial year ended 30 June 2015.

E. ADDITIONAL INFORMATION

The earnings of the consolidated entity for the five years ended 30 June 2015 are summarised below:

	2015 $’000	2014 Restated $’000	2013 $’000	2012 $’000	2011 $’000
EBITDA	(6,245)	(8,054)	(10,504)	(12,677)	(3,464)
EBIT	(6,872)	(9,083)	(11,534)	(29,847)	(5,235)
Proft /(Loss) after income tax	(6,457)	(8,548)	(9,783)	(30,516)	(4,451)

The factors that are considered to affect shareholder value are summarised below:

36 HUB24 ANNUAL REPORT 2015 DIRECTOR’S REPORT

DIRECTOR’S REPORT

	2015 $’000	2014 $’000	2013 $’000	2012 $’000	2011 $’000
Shareprice at fnancialyear end	$1.20	$0.82	$0.75	$0.95	$2.78
Basic earningsper share	(0.154)	(0.196)	(0.320)	(1.760)	(0.360)

F. ADDITIONAL DISCLOSURES RELATING TO KEY MANAGEMENT PERSONNEL

The number of shares in the company held during the financial year by each director and other members of KMP of the consolidated entity, including their personally related parties, is set out below:

==> picture [494 x 40] intentionally omitted <==

----- Start of picture text -----

Received due Tax
Balance at start Other changes Balance at end
Name Exempt share
of the year during the year of the year
plan issue
----- End of picture text -----

Andrew Alcock	21,187	-	10,200	31,387
Mark Ballinger	-	1,000	3,638	4,638
Jason Entwistle	938,902	1,000	-	939,902
Wes Gillett	1,187	1,000	-	2,187
Joseph Gioffre	11,553	1,000	-	12,553
Matthew Haes	20,908	1,000	-	21,908
Bruce Higgins	510,000	-	56,811	566,811
Ian Litster	3,588,751	-	-	3,588,751
Hugh Robertson	86,500	-	-	86,500

Options

The number of options over ordinary shares in the company held during the financial year by each director and other members of KMP of the consolidated entity, including their personally related parties, is set out below:

==> picture [494 x 37] intentionally omitted <==

----- Start of picture text -----

Options over Balance at start Expired / Balance at end of
Granted Exercised
ordinary shares of the year forfeited /other the year
----- End of picture text -----

Andrew Alcock	600,000	200,000	-	-	800,000
Mark Ballinger	-	100,000	-	-	100,000
Jason Entwistle	480,000	160,000	-	-	640,000
Wes Gillett	360,000	120,000	-	-	480,000
Joseph Gioffre	80,000	80,000	-	-	160,000
Matthew Haes	115,000	120,000	-	-	235,000
Bruce Higgins	510,000	-	-	-	510,000

HUB24 ANNUAL REPORT 2015

DIRECTOR’S REPORT

DIRECTOR’S REPORT

This concludes the remuneration report which has been audited.

NON-AUDIT SERVICES

Tax, compliance and consulting services of $103,149 were paid to BDO (2014: $64,802). The Directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors as set out in APES 110 Code of Ethics for Professional Accountants as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the consolidated entity, acting as an advocate for the consolidated entity or jointly sharing rights and rewards.

Refer to Note 25: Auditors Remuneration of the financial statements for details of the remuneration that the auditors received or are due to receive for the provision of audit and other services.

PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party, for the purpose of taking responsibility on behalf of the company for all or part of those proceedings.

No proceedings have been brought or intervened in on behalf of the company with leave of the Court under section 237 of the Corporations Act 2001.

AUDITOR INDEPENDENCE

The Directors received an Independence Declaration from the auditors of the company as required under Section 307C of the Corporations Act 2001 that follows on the next page.

==> picture [91 x 28] intentionally omitted <==

Bruce Higgins Chairman

Sydney, 28 August 2015

38 HUB24 ANNUAL REPORT 2015 DIRECTOR’S REPORT

AUDITOR’S DECLARATION OF INDEPENDENCE

==> picture [58 x 23] intentionally omitted <==

Tel: +61 2 9251 4100 Level 11, 1 Margaret St Fax: +61 2 9240 9821 Sydney NSW 2000 www.bdo.com.au Australia

DECLARATION OF INDEPENDENCE BY PAUL BULL TO THE DIRECTORS OF HUB24 LIMITED

As lead auditor of HUB24 Limited for the year ended 30 June 2015, I declare that, to the best of my knowledge and belief, there have been:

1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

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

This declaration is in respect of HUB24 Limited and the entities it controlled during the period.

==> picture [68 x 64] intentionally omitted <==

Paul Bull Partner

BDO East Coast Partnership

Sydney, 28 August 2015

BDO East Coast Partnership ABN 83 236 985 726 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO East Coast Partnership and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.

HUB24 ANNUAL REPORT 2015

AUDITOR’S DECLARATION OF INDEPENDENCE

40 HUB24 ANNUAL REPORT 2015

FINANCIAL

STATEMENTS

42

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

45

STATEMENT OF CASH FLOWS

43

STATEMENT OF FINANCIAL POSITION

46

NOTES TO THE FINANCIAL STATEMENTS

STATEMENT OF CHANGES IN EQUITY

HUB24 ANNUAL REPORT 2015

FINANCIAL STATEMENTS

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Note	CONSOLIDATED Restated 2015 2014 $ $
Revenue from continuing operations Revenue 6(a) Interest and other income Expenses Platform and custody fees Licensee fees Employee benefits expenses 6(b) Property and occupancy costs 6(c) Depreciation, amortisation and impairment 6(d) Administrative expenses 6(e) Loss before income tax expense from continuing operations Income tax benefit 7 Loss after income tax from continuing operations Loss after income tax from discontinued operations 8 Loss after income tax for the year Other comprehensive income Total comprehensive loss for the year Total comprehensive loss for the year attributable to ordinary equity members of HUB24 Limited Earnings per share from continuing operations, attributable to ordinary equity members of HUB24 Limited Basic earnings per share Diluted earnings per share Earnings per share from discontinued operations, attributable to ordinary equity members of HUB24 Limited Basic earnings per share Diluted earnings per share Earnings per share for profit attributable to ordinary equity members of HUB24 Limited Basic earnings per share Diluted earnings per share
	28,669,253 3,209,190
	634,929 824,752
	29,304,182 4,033,942

	(2,093,746) (1,383,665)
	(19,459,724) -
	(8,883,841) (6,896,617)
	(488,432) (372,666)
	(617,288) (1,028,915)
	(3,111,514) (2,220,042)
	(34,654,545) (11,901,905)

	(5,350,363) (7,867,963)
	- -
	(5,350,363) (7,867,963)

	(1,106,537) (679,825)
	(6,456,900) (8,547,788)

	- -
	(6,456,900) (8,547,788)
	(6,456,900) (8,547,788)
	Cents Cents
	(11.05) (18.39)
	(11.05) (18.39)

	(2.29) (1.59)
	(2.29) (1.59)


	(13.34) (19.98)
	(13.34) (19.98)

The
above
Statement
of
Profit
or
Loss
and
Other
Comprehensive
Income
should
be
read
in
conjunction
with
the accompanying
notes. Refer
to
note
31
for
the
prior
year
restatement
details.

42 HUB24 ANNUAL REPORT 2015

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

STATEMENT OF FINANCIAL POSITON

Note	CONSOLIDATED Restated 2015 2014 $ $
ASSETS Current Assets Cash and cash equivalents 20(b) Trade and other receivables 9 Other current assets 10 Total Current Assets Non-Current Assets Office equipment 11 Intangible assets 12 Other non-current assets 13 Total Non-Current Assets Total Assets LIABILITIES Current Liabilities Trade and other payables 14 Current provisions 15 (a) Other current liabilities 15 (b) Total Current Liabilities Non-Current Liabilities Non-current provisions 16 (a) Other non-current liabilities 16 (b) Total Non-Current Liabilities Total Liabilities Net Assets EQUITY Issued capital 17 Reserves 18 Accumulated losses Total Equity
	12,108,825 13,779,844
	2,192,379 405,986
	413,798 419,044
	14,715,002 14,604,874


	128,602 93,561
	12,972,181 6,322,423
	256,454 656,096
	13,357,237 7,072,080

	28,072,239 21,676,954




	2,247,321 662,230
	2,192,478 1,389,653
	88,897 74,147
	4,528,696 2,126,030


	287,624 184,654
	5,358,563 972,962
	5,646,187 1,157,616

	10,174,883 3,283,646

	17,897,356 18,393,308


	82,090,454 76,988,017
	3,133,845 2,275,332
	(67,326,943) (60,870,041)

	17,897,356 18,393,308

The
above
Statement
of
Financial
Position
should
be
read
in
conjunction
with
the
accompanying
notes.
Refer
to note
31
for
the
prior
year
restatement
details.

HUB24 ANNUAL REPORT 2015

STATEMENT OF FINANCIAL POSITION

STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED	Issued Capital Reserves Accumulated Losses Total $ $ $ $

As at 1 July 2014	76,988,017 2,275,332 (60,870,041) 18,393,308
Total comprehensive loss for the year	- - (6,456,900) (6,456,900)
Transactions with equity members in their capacity as equity members
Capital raising	5,058,436 - - 5,058,436
Employee options granted	- 393,791 - 393,791
Employee share issue	44,000 - - 44,000
Adviser optionsgranted	- 464,722 - 464,722
As at 30 June 2015	82,090,453 3,133,845 (67,326,941) 17,897,357

Restated As at 1 July 2013 Total comprehensive loss for the year Transactions with equity members in their capacity as equity members Capital raising Employee options granted Employee share issue As at 30 June 2014	66,843,612 1,878,436 (52,322,253) 16,399,795 - - (8,547,788) (8,547,788) 10,113,405 - - 10,113,405 - 396,896 - 396,896 31,000 - - 31,000
	76,988,017 2,275,332 (60,870,041) 18,393,308

The
above
Statement
of
Changes
in
Equity
should
be
read
in
conjunction
with
the
accompanying
notes.
Refer
to note
31
for
the
prior
year
restatement
details.

44 HUB24 ANNUAL REPORT 2015

STATEMENT OF CHANGES IN EQUITY

STATEMENT OF CASH FLOWS

Note	CONSOLIDATED
	2015 2014
	$ $
Cash flows from operating activities Receipts from customers (inclusive of GST) Payments to suppliers and employees (inclusive of GST) Interest received Receipt from research and development incentive Net cash inflow/(outflow) from operating activities 20(a) Cash flows from investing activities Receipts from return of security deposits Receipts from sale of intangible asset Payments for office equipment Payments for acquisition of shares in subsidiary, net of cash acquired Payments for intangible assets Payments for security deposits Net cash inflow/(outflow) from investing activities Cash flows from financing activities Proceeds from capital raising Payment for subordinated loan Payments for capital raising costs Net cash inflow/(outflow) from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 20(b)
	30,875,855 3,530,109
	(36,493,694) (11,255,534)
	386,320 478,200
	28,328 1,588,298
	(5,203,193) (5,658,928)


	293,443 330,403
	125,000 122,500
	(81,020) (92,349)
	(941,091) -
	(770,004) (360,727)
	(2,590) (217,307)
	(1,376,262) (217,479)


	5,250,000 10,588,126
	(150,000) -
	(191,565) (474,721)
	4,908,435 10,113,405

	(1,671,019) 4,236,998
	13,779,844 9,542,846
	12,108,825 13,779,844

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

HUB24 ANNUAL REPORT 2015 45

STATEMENT OF CASH FLOWS

NOTES TO THE FINANCIAL STATEMENTS

1. CORPORATE INFORMATION

The Annual Report of HUB24 Limited (the company or parent entity) for the year ended 30 June 2015 was authorised for issue in accordance with a resolution of the Directors on 28 August 2015 and covers the company as an individual entity as well as the consolidated entity consisting of the company and its subsidiaries as required by the Corporations Act 2001.

The company is limited by shares and incorporated and domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange.

The nature of the operations and principal activities of the company are described in the Directors Report.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001 , as appropriate for profit oriented entities. The financial statements have also been prepared under the historical cost convention, except for, where applicable, the revaluation of certain classes of assets and liabilities. The financial report is presented in Australian dollars.

Parent entity information

In accordance with the Corporations Act 2001 , these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in Note 27.

Compliance with IFRS

The financial report complies with Australian Accounting Standards and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

New , revised or amending Accounting Standards and Interpretations adopted

The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are mandatory for the current reporting period.

Any new, revised or amended Accounting Standards or interpretations that are not yet mandatory have not been early adopted.

Any significant impact on the accounting policies of the consolidated entity from the adoption of these Accounting Standards and Interpretations are disclosed below. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity.

AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial Assets

The consolidated entity has applied AASB 2013-3 from 1 July 2014. The disclosure requirements of AASB 136 'Impairment of Assets' have been enhanced to require additional information about the fair value measurement when the recoverable amount of impaired assets is based on fair value less costs of disposals. Additionally, if measured using a present value technique, the discount rate is required to be disclosed.

46 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**2. SUMMARY

OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT’D)**

AASB
2014-‐1
Amendments
to
Australian
Accounting
Standards
(Parts
A
to
C)

The
consolidated
entity
has
applied
Parts
A
to
C
of
AASB
2014-‐1
from
1
July
2014.
These
amendments
affect
the following
standards:
AASB
2
'Share-‐based
Payment':
clarifies
the
definition
of
'vesting
condition'
by
separately
defining a
'performance
condition'
and
a
'service
condition'
and
amends
the
definition
of
'market
condition';
AASB
3
'Business Combinations':
clarifies
that
contingent
consideration
in
a
business
combination
is
subsequently
measured
at
fair value
with
changes
in
fair
value
recognised
in
profit
or
loss
irrespective
of
whether
the
contingent
consideration
is within
the
scope
of
AASB
9;
AASB
8
'Operating
Segments':
amended
to
require
disclosures
of
judgements
made
in applying
the
aggregation
criteria
and
clarifies
that
a
reconciliation
of
the
total
reportable
segment
assets
to
the entity's
assets
is
required
only
if
segment
assets
are
reported
regularly
to
the
chief
operating
decision
maker;
AASB
13 'Fair
Value
Measurement':
clarifies
that
the
portfolio
exemption
applies
to
the
valuation
of
contracts
within
the
scope of
AASB
9
and
AASB
139;
AASB
116
'Property,
Plant
and
Equipment'
and
AASB
138
'Intangible
Assets':
clarifies
that
on revaluation,
restatement
of
accumulated
depreciation
will
not
necessarily
be
in
the
same
proportion
to
the
change
in the
gross
carrying
value
of
the
asset;
AASB
124
'Related
Party
Disclosures':
extends
the
definition
of
'related
party'
to include
a
management
entity
that
provides
KMP
services
to
the
entity
or
its
parent
and
requires
disclosure
of
the
fees paid
to
the
management
entity;
AASB
140
'Investment
Property':
clarifies
that
the
acquisition
of
an
investment property
may
constitute
a
business
combination.

**Going

concern**

The
financial
report
has
been
prepared
on
a
going
concern
basis.

The
consolidated
entity
has
raised
capital
in
the
current
and
prior
years
from
multiple
sources
for
acquisition, regulatory
capital
requirements,
investment
platform
development
and
working
capital
purposes.
Accordingly,
the directors
of
the
company
are
confident
of
sourcing
additional
capital
as
and
when
required.

**Basis

of
consolidation**

The
consolidated
financial
statements
comprise
the
financial
statements
of
the
company
and
its
subsidiaries
(the consolidated
entity)
as
at
30
June
each
year.
There
are
no
interests
in
associates.

Subsidiaries
are
all
those
entities
over
which
the
consolidated
entity
has
the
power
to
govern
the
financial
and operating
policies
so
as
to
obtain
benefits
from
their
activities.
The
existence
and
effect
of
potential
voting
rights
that are
currently
exercisable
or
convertible
are
considered
when
assessing
whether
a
consolidated
entity
controls
another entity.

The
financial
statements
of
the
subsidiaries
are
prepared
for
the
same
reporting
period
as
the
parent
company,
using consistent
accounting
policies. In
preparing
the
consolidated
financial
statements,
all
intercompany
balances
and
transactions,
income
and
expenses and
profit
and
losses
resulting
from
intra-‐consolidated
entity
transactions
have
been
eliminated
in
full.

Subsidiaries
are
fully
consolidated
from
the
date
on
which
control
is
obtained
by
the
consolidated
entity
and
cease
to be
consolidated
from
the
date
on
which
control
is
transferred
out
of
the
consolidated
entity.
There
were
no
transfers out
of
the
consolidated
entity
during
the
year.

Investments
in
subsidiaries
held
by
the
company
are
accounted
for
at
cost
in
the
separate
financial
statements
of
the parent
entity
less
any
impairment
charges.

The
acquisition
of
subsidiaries
is
accounted
for
using
the
acquisition
method
of
accounting.
The
acquisition
method
of accounting
involves
recognising
at
acquisition
date,
separately
from
goodwill,
the
identifiable
assets
acquired,
the liabilities
assumed
and
any
non-‐controlling
interest
in
the
acquiree.
The
identifiable
assets
acquired
and
liabilities

HUB24 ANNUAL REPORT 2015 47

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**2. SUMMARY

OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT’D)**

assumed
are
measured
at
the
acquisition
date
fair
values.
The
difference
between
the
above
items
and
the
fair
value of
the
consideration
is
goodwill
or
a
discount
on
acquisition.

After
initial
recognition,
goodwill
is
measured
at
cost
less
any
accumulated
impairment
losses.

For
the
purpose
of impairment
testing,
goodwill
acquired
in
a
business
combination
is,
from
the
acquisition
date,
allocated
to
each
of
the consolidated
entity’s
cash-‐generating
units
that
are
expected
to
benefit
from
the
combination,
irrespective
of
whether other
assets
or
liabilities
of
the
acquiree
are
assigned
to
those
units.

Non-‐controlling
interests
are
allocated
their
share
of
net
profit
after
tax
in
the
statement
of
profit
or
loss
and
other comprehensive
income
and
are
presented
within
equity
in
the
consolidated
statement
of
financial
position,
separately from
the
equity
of
the
owners
of
the
parent.
Losses
are
attributed
to
the
non-‐controlling
interest
even
if
that
results in
a
deficit
balance.

**Operating

segments**

Operating
segments
are
presented
using
the
'management
approach',
where
the
information
presented
is
on
the same
basis
as
the
internal
reports
provided
to
the
Chief
Operating
Decision
Makers
('CODM').
The
CODM
is responsible
for
the
allocation
of
resources
to
operating
segments
and
assessing
their
performance.

_Identification

of
reportable
operating
segments_

The
consolidated
entity
is
organised
into
two
operating
segments:
platform
and
licensee.

These
operating
segments
are
based
on
the
internal
reports
that
are
reviewed
and
used
by
the
executive management
team
(identified
as
the
chief
operating
decision
makers)
in
assessing
performance
and
in
determining the
allocation
of
resources.

The
financial
performance
of
each
operating
segment
is
reported
to
the
executive
management
team
on
a
monthly basis.
There
is
no
aggregation
of
operating
segments. The
accounting
policies
adopted
for
internal
reporting
to
the
executive
management
team
are
consistent
with
those adopted
in
the
financial
statements.

_Types

of
products
and
services_

Platform

The
platform
segment
is
a
single
platform
solution
that
enables
clients
to
benefit
from
cost
effective
executions
and management
of
trades
whilst
still
retaining
full
beneficial
ownership
of
securities
for
improved
tax
efficiencies.
The platform
offers
full
transaction
and
reporting
capability
on
wholesale
managed
funds,
listed
securities,
exchange traded
funds,
managed
portfolios,
term
deposits,
bonds,
cash
and
margin
lending.

Licensee

The
licensee
segment
provide
independent
financial
advice
to
clients
through
financial
advisers
authorised
by Paragem
Pty
Ltd.
The
Licensee
provides
compliance,
systems
and
support
to
the
practice
enabling
advisers
to
provide clients
with
financial
advice
over
a
range
of
products.

_Intersegment

transactions_

There
are
no
intersegment
transactions.

_Intersegment

receivables,
payables
and
loans_

Intersegment
loans
are
initially
recognised
at
the
consideration
received
and
are
eliminated
on
consolidation.

48 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**2. SUMMARY

OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT’D)**

**Foreign

currency
translation**

_Functional

and
presentation
currency_

Both
the
functional
and
presentation
currency
of
the
consolidated
entity
is
Australian
dollars.

**Revenue

and
income
recognition**

Revenue
is
measured
at
the
fair
value
of
the
consideration
received
or
receivable.
The
consolidated
entity
recognises revenue
when
the
amount
can
be
reliably
measured,
it
is
probable
that
future
economic
benefits
will
flow
to
the consolidated
entity
and
specific
criteria
have
been
met
for
each
of
the
activities.

Revenue
is
recognised
for
the
major
business
activities
as
follows:

_Platform

revenue_

Portfolio
service
fee
revenue
is
recognised
and
measured
at
the
fair
value
of
the
consideration
received
or receivable
on
the
value
of
client
account
balances.
Cash
margin
is
recognised
and
measured
at
the
fair
value
of
the
interest
received
or
receivable
on
that
portion
of client
account
balances
held
in
cash.
Broking
revenue
is
recognised
and
measured
at
the
fair
value
of
the
consideration
received
or
receivable
on
the execution
of
trades.

Licensee
fees

Licensee
revenue
is
measured
at
the
fair
value
of
the
consideration
received
or
receivable
on
advice
provided
to clients
and
payments
from
product
providers.

_Finance

income_

Finance
income
comprises
interest
income
on
funds
invested.

Interest
income
is
recognised
as
it
accrues
in
profit using
the
effective
interest
method.

_Government

grants_

Government
grants
are
recognised
in
profit
and
loss
on
a
systematic
basis
over
the
useful
life
of
the
asset
as
other income.

Grants
are
receieved
in
relation
to
Research
and
Development
activities
undertaken
by
the
consolidated entity
and
are
recognised
in
accordance
with
AASB120.
Refer
to
note
31
for
further
information.

Leases

The
determination
of
whether
an
arrangement
is
or
contains
a
lease
is
based
on
the
substance
of
the
arrangement and
requires
an
assessment
of
whether
the
fulfilment
of
the
arrangement
is
dependent
on
the
use
of
a
specific
asset or
assets
and
the
arrangement
conveys
a
right
to
use
the
asset.

Finance
leases,
which
transfer
to
the
consolidated
entity
substantially
all
the
risks
and
benefits
incidental
to
ownership of
the
leased
item,
are
capitalised
at
the
inception
of
the
lease
at
the
fair
value
of
the
leased
asset
or,
if
lower,
at
the present
value
of
the
minimum
lease
payments.

Lease
payments
are
apportioned
between
the
finance
charges
and reduction
of
the
lease
liability
so
as
to
achieve
a
constant
rate
of
interest
on
the
remaining
balance
of
the
liability. Finance
charges
are
recognised
as
an
expense
in
the
income
statement.

Capitalised
leased
assets
are
depreciated
over
the
shorter
of
the
estimated
useful
life
of
the
asset
and
the
lease
term if
there
is
no
reasonable
certainty
that
the
consolidated
entity
will
obtain
ownership
by
the
end
of
the
lease
term.

HUB24 ANNUAL REPORT 2015 49 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**2. SUMMARY

OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT’D)**

Operating
lease
payments
are
recognised
as
an
expense
in
the
income
statement
on
a
straight-‐line
basis
over
the lease
term.

Operating
lease
incentives
are
recognised
as
a
liability
when
received
and
subsequently
reduced
by allocating
lease
payments
between
rental
expense
and
reduction
of
the
liability.

**Discontinued

operations**

A
discontinued
operation
is
a
component
of
the
consolidated
entity
that
has
been
disposed
of
or
is
classified
as
held for
sale
and
that
represents
a
separate
major
line
of
business
or
geographical
area
of
operations,
is
part
of
a
single
co-‐ ordinated
plan
to
dispose
of
such
a
line
of
business
or
area
of
operations,
or
is
a
subsidiary
acquired
exclusively
with
a view
to
resale.
The
results
of
discontinued
operations
are
presented
separately
on
the
face
of
the
statement
of
profit or
loss
or
other
comprehensive
income.

**Cash

and
cash
equivalents**

Cash
and
cash
equivalents
in
the
statement
of
financial
position
comprise
cash
at
bank
and
in
hand
and
short-‐term deposits
with
an
original
maturity
of
three
months
or
less
that
are
readily
convertible
to
known
amounts
of
cash
and which
are
subject
to
an
insignificant
risk
of
changes
in
value.

For
the
purposes
of
the
statement
of
cash
flows,
cash
and
cash
equivalents
consist
of
cash
and
cash
equivalents
as defined
above,
net
of
outstanding
bank
overdrafts.

**Trade

and
other
receivables**

Trade
receivables
are
recognised
initially
at
fair
value
and
subsequently
measured
at
amortised
cost
using
the effective
interest
method,
less
an
allowance
for
impairment.

Collectability
of
trade
receivables
is
reviewed
on
an
ongoing
basis
at
an
operating
unit
level.
Individual
debts
that
are known
to
be
uncollectible
are
written
off
when
identified.

An
impairment
provision
is
recognised
when
there
is objective
evidence
that
the
consolidated
entity
will
not
be
able
to
collect
the
receivable.
Financial
difficulties
of
the debtor,
default
payments
or
debts
more
than
30
days
overdue
are
considered
objective
evidence
of
impairment.
The amount
of
the
impairment
loss
is
the
receivable
carrying
amount
compared
to
the
present
value
of
estimated
future cash
flows,
discounted
at
the
original
effective
interest
rate.

**Income

taxes
and
other
taxes**

Current
tax
assets
and
liabilities
for
the
current
and
prior
years
are
measured
at
the
amount
expected
to
be
recovered from
or
paid
to
the
taxation
authorities
based
on
the
current
year's
taxable
income.
The
tax
rates
and
tax
laws
used to
compute
the
amount
are
those
that
are
enacted
or
substantively
enacted
by
the
reporting
date.

Deferred
income
tax
is
provided
on
all
temporary
differences
at
the
reporting
date
between
the
tax
bases
of
assets and
liabilities
and
their
carrying
amounts
for
financial
reporting
purposes.

Deferred
income
tax
liabilities
are recognised
for
all
taxable
temporary
differences
except:

When
the
deferred
income
tax
liability
arises
from
the
initial
recognition
of
goodwill
or
of
an
asset
or
liability
in
a transaction
that
is
not
a
business
combination
and
that,
at
the
time
of
the
transaction,
affects
neither
the accounting
profit
nor
taxable
profit
or
loss
When
the
taxable
temporary
difference
is
associated
with
investments
in
subsidiaries,
associates
or
interests
in joint
ventures,
and
the
timing
of
the
reversal
of
the
temporary
difference
can
be
controlled
and
it
is
probable that
the
temporary
difference
will
not
reverse
in
the
foreseeable
future.

Deferred
income
tax
assets
are
recognised
for
all
deductible
temporary
differences,
carry-‐forward
of
unused
tax credits
and
unused
tax
losses,
to
the
extent
that
it
is
probable
that
taxable
profit
will
be
available
against
which
the

50 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**2. SUMMARY

OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT’D)**

deductible
temporary
differences
and
the
carry-‐forward
of
unused
tax
credits
and
unused
tax
losses
can
be
utilised, except:

When
the
deferred
income
tax
asset
relating
to
the
deductible
temporary
difference
arises
from
the
initial recognition
of
an
asset
or
liability
in
a
transaction
that
is
not
a
business
combination
and,
at
the
time
of
the transaction,
affects
neither
the
accounting
profit
nor
taxable
profit
or
loss
When
the
deductible
temporary
difference
is
associated
with
investments
in
subsidiaries,
associates
or
interests in
joint
ventures,
in
which
case
a
deferred
tax
asset
is
only
recognised
to
the
extent
that
it
is
probable
that
the temporary
difference
will
reverse
in
the
foreseeable
future
and
taxable
profit
will
be
available
against
which
the temporary
difference
can
be
utilised.

The
carrying
amount
of
deferred
income
tax
assets
is
reviewed
at
each
reporting
date
and
reduced
to
the
extent
that it
is
no
longer
probable
that
sufficient
taxable
profit
will
be
available
to
allow
all
or
part
of
the
deferred
income
tax asset
to
be
utilised.

Unrecognised
deferred
income
tax
assets
are
reassessed
at
each
reporting
date
and
are
recognised
to
the
extent
that it
has
become
probable
that
future
taxable
profit
will
allow
the
deferred
tax
asset
to
be
recovered.

Deferred
income
tax
assets
and
liabilities
are
measured
at
the
tax
rates
that
are
expected
to
apply
to
the
year
when the
asset
is
realised
or
the
liability
is
settled,
based
on
tax
rates
(and
tax
laws)
that
have
been
enacted
or
substantively enacted
at
the
reporting
date.

Deferred
tax
assets
and
deferred
tax
liabilities
are
offset
only
if
a
legally
enforceable
right
exists
to
set
off
current
tax assets
against
current
tax
liabilities
and
the
deferred
tax
assets
and
liabilities
relate
to
the
same
taxable
entity
and
the same
taxation
authority.

_Other

taxes_

Revenues,
expenses
and
assets
are
recognised
net
of
the
amount
of
GST
except:

When
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
cost
of
acquisition
of
the
asset
or
as
part
of
the
expense
item
as applicable
Receivables
and
payables,
which
are
stated
with
the
amount
of
GST
included
(UIG
1031.8).
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
flow
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
part
of
operating
cash
flows.

Commitments
and
contingencies
are
disclosed
net
of
the
amount
of
GST
recoverable
from,
or
payable
to,
the
taxation authority.

**Office

equipment**

Office
equipment
is
stated
at
historical
cost
less
accumulated
depreciation
and
any
accumulated
impairment
losses. Such
cost
includes
the
cost
of
replacing
parts
that
are
eligible
for
capitalisation
when
the
cost
of
replacing
the
parts
is incurred.

Similarly,
when
each
major
inspection
is
performed,
its
cost
is
recognised
in
the
carrying
amount
of
the office
equipment
as
a
replacement
only
if
it
is
eligible
for
capitalisation.

All
other
repairs
and
maintenance
are recognised
in
profit
or
loss
as
incurred.

HUB24 ANNUAL REPORT 2015 51

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**2. SUMMARY

OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT’D)**

The
assets'
residual
values,
useful
lives
and
amortisation
methods
are
reviewed,
and
adjusted
if
appropriate,
at
each reporting
date.

Depreciation
is
calculated
on
a
straight-‐line
basis
over
the
estimated
useful
life
of
the
specific
assets
as
follows:

Office
furniture
and
fittings
-‐
over
2.5
to
5
years
Computer
equipment
-‐
3
years
Leased
assets
-‐
over
the
term
of
the
lease

Impairment

The
carrying
values
of
office
equipment
are
reviewed
for
impairment
when
events
or
changes
in
circumstances indicate
the
carrying
value
may
not
be
recoverable.

For
an
asset
that
does
not
generate
largely
independent
cash inflows,
the
recoverable
amount
is
determined
for
the
cash
generating
unit
to
which
the
asset
belongs.
If
any
such indication
exists
and
where
the
carrying
values
exceed
the
estimated
recoverable
amount,
the
assets
or
cash generating
units
are
written
down
to
their
recoverable
amount.

The
recoverable
amount
of
office
equipment
is
the
greater
of
fair
value
less
costs
to
sell
and
value
in
use.
In
assessing value
in
use,
the
estimated
future
cash
flows
are
discounted
to
their
present
value
using
a
pre-‐tax
discount
rate
that reflects
current
market
assessments
of
the
time
value
of
money
and
risks
specific
to
the
asset.

_De-‐recognition

and
disposal_

An
item
of
office
equipment
is
derecognised
upon
disposal
or
when
no
further
future
economic
benefits
are
expected from
its
use.

**Financial

Instruments**

_Non-‐derivative

financial
instruments_

Non-‐derivative
financial
instruments
comprise
investments
in
equity,
trade
and
other
receivables,
cash
and
cash equivalents
and
trade
and
other
payables. Non-‐derivative
financial
instruments
are
recognised
initially
at
fair
value
plus,
for
instruments
not
at
fair
value
through the
profit
or
loss,
any
directly
attributable
transaction
costs.
Subsequent
to
initial
recognition,
non-‐derivative
financial instruments
are
measured
as
described
below.

A
financial
instrument
is
recognised
if
the
consolidated
entity
becomes
a
party
to
the
contractual
provisions
of
the instrument.
Financial
assets
are
derecognised
if
the
consolidated
entity’s
contractual
rights
to
the
cash
flows
from
the financial
assets
expire
or
if
the
consolidated
entity
transfers
the
financial
asset
to
another
party
without
retaining control
or
substantially
all
risks
and
rewards
of
the
asset.

Regular
way
purchases
and
sales
of
financial
assets
are accounted
for
at
trade
date,
i.e.,
the
date
that
the
consolidated
entity
commits
itself
to
purchase
or
sell
the
asset. Financial
liabilities
are
derecognised
if
the
consolidated
entity’s
obligations
specified
in
the
contract
expire
or
are discharged
or
are
cancelled.

Cash
and
cash
equivalents
comprise
cash
balances
and
call
deposits.
Bank
overdrafts
that
are
repayable
on
demand and
form
an
integral
part
of
the
consolidated
entity’s
cash
management
are
included
as
a
component
of
cash
and
cash equivalents
for
the
purpose
of
the
statement
of
cash
flows.

_Held

to
maturity
investments_

If
the
consolidated
entity
has
the
positive
intent
and
ability
to
hold
debt
securities
to
maturity,
then
they
are
classified as
held-‐to-‐maturity.

Held-‐to-‐maturity
investments
are
measured
at
amortised
cost
using
the
effective
interest method,
less
any
impairment
losses.

52 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**2. SUMMARY

OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT’D)**

Other

Other
non-‐derivative
financial
instruments
are
measured
at
amortised
cost
using
the
effective
interest
rate
method, less
any
impairment
losses.

The
fair
values
of
investments
that
are
actively
traded
in
organised
financial
markets
are
determined
by
reference
to quoted
market
bid
prices
at
the
close
of
business
on
the
reporting
date.
For
investments
with
no
active
market,
fair values
are
determined
using
valuation
techniques.

Such
techniques
include:
using
recent
arm’s
length
market transactions;
reference
to
the
current
market
value
of
another
instrument
that
is
substantially
the
same;
discounted cash
flow
analysis
and
option
pricing
models
making
as
much
use
of
available
and
supportable
market
data
as
possible and
keeping
judgemental
inputs
to
a
minimum.

**Goodwill

and
Intangibles**

Goodwill

Goodwill
acquired
in
a
business
combination
is
initially
measured
at
cost
being
the
excess
of
the
cost
of
the
business combination
over
the
consolidated
entity's
interest
in
the
net
fair
value
of
the
acquirer’s
identifiable
assets,
liabilities and
contingent
liabilities.

Following
initial
recognition,
goodwill
is
measured
at
cost
less
any
accumulated
impairment
losses.

For
the
purpose
of
impairment
testing,
goodwill
acquired
in
a
business
combination
is,
from
the
acquisition
date, allocated
to
each
of
the
consolidated
entity's
cash-‐generating
units
that
are
expected
to
benefit
from
the
synergies
of the
combination,
irrespective
of
whether
other
assets
or
liabilities
of
the
consolidated
entity
are
assigned
to
those units.

When
the
recoverable
amount
of
the
cash-‐generating
unit
is
less
than
the
carrying
amount,
an
impairment
loss
is recognised.
When
goodwill
forms
part
of
a
cash-‐generating
unit
and
an
operation
within
that
unit
is
disposed
of,
the goodwill
associated
with
the
operation
disposed
of
is
included
in
the
carrying
amount
of
the
operation
when determining
the
gain
or
loss
on
disposal
of
the
operation.
Goodwill
disposed
of
in
this
manner
is
measured
based
on the
relative
values
of
the
operation
disposed
of
and
the
portion
of
the
cash-‐generating
unit
retained.
Impairment losses
recognised
for
goodwill
are
not
subsequently
reversed.

Intangibles

Intangible
assets
acquired
separately
or
in
a
business
combination
are
initially
measured
at
cost.

The
cost
of
an intangible
asset
acquired
in
a
business
combination
is
its
fair
value
as
at
the
date
of
acquisition.

Following
initial recognition,
intangible
assets
are
carried
at
cost
less
any
accumulated
amortisation
and
any
accumulated
impairment losses.

Internally
generated
intangible
assets,
excluding
capitalised
development
costs,
are
not
capitalised
and expenditure
is
recognised
in
profit
or
loss
in
the
year
in
which
the
expenditure
is
incurred.

The
useful
lives
of
intangible
assets
are
assessed
to
be
either
finite
or
indefinite.
Intangible
assets
with
finite
lives
are amortised
over
the
useful
life
and
tested
for
impairment
whenever
there
is
an
indication
that
the
intangible
asset
may be
impaired.
The
amortisation
period
and
the
amortisation
method
for
an
intangible
asset
with
a
finite
useful
life
is reviewed
at
least
at
each
reporting
date.
Changes
in
the
expected
useful
life
or
the
expected
pattern
of
consumption of
future
economic
benefits
embodied
in
the
asset
are
accounted
for
prospectively
by
changing
the
amortisation
period
or
method, as
appropriate,
which
is
a
change
in
accounting
estimate.

The
amortisation
expense
on
intangible
assets
with
finite
lives
is recognised
in
profit
or
loss
in
the
expense
category
consistent
with
the
function
of
the
intangible
asset.
Refer
to
note
4
-‐ Investment
Platform
estimate
of
useful
life.

Intangible
assets
with
indefinite
useful
lives
are
tested
for
impairment
annually
either
individually
or
at
the
cash-‐ generating
unit
level
consistent
with
the
methodology
outlined
for
goodwill
above.

Such
intangibles
are
not amortised.
The
useful
life
of
an
intangible
asset
with
an
indefinite
life
is
reviewed
each
reporting
period
to
determine

HUB24 ANNUAL REPORT 2015 53

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**2. SUMMARY

OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT’D)**

whether
indefinite
life
assessment
continues
to
be
supportable.
If
not,
the
change
in
the
useful
life
assessment
from indefinite
to
finite
is
accounted
for
as
a
change
in
an
accounting
estimate
and
is
thus
accounted
for
on
a
prospective basis.

**Trade

and
other
payables**

Trade
and
other
payables
are
carried
at
amortised
cost
and
represent
liabilities
for
goods
and
services
provided
to
the consolidated
entity
prior
to
the
end
of
the
financial
year
that
are
unpaid
and
arise
when
the
consolidated
entity becomes
obliged
to
make
future
payments
in
respect
of
the
purchase
of
these
goods
and
services.

Provisions

Provisions
are
recognised
when
the
consolidated
entity
has
a
present
obligation
(legal
or
constructive)
as
a
result
of
a past
event,
it
is
probable
that
an
outflow
of
resources
embodying
economic
benefits
will
be
required
to
settle
the obligation
and
a
reliable
estimate
can
be
made
of
the
amount
of
the
obligation.

Provisions
are
measured
at
the
present
value
of
management’s
best
estimate
of
the
expenditure
required
to
settle
the present
obligation
at
the
reporting
date.
If
the
effect
of
the
time
value
of
money
is
material,
provisions
are
discounted using
a
current
pre-‐tax
rate
that
reflects
the
risks
specific
to
the
liability.
When
discounting
is
used,
the
increase
in
the provision
due
to
the
passage
of
time
is
recognised
as
a
borrowing
cost.

**Employee

benefits**

_Short-‐term

benefits_

Liabilities
for
wages
and
salaries,
including
non-‐monetary
benefits
and
annual
leave
expected
to
be
settled
within
12 months
of
the
reporting
date
are
recognised
in
respect
of
employees’
services
up
to
the
reporting
date.

They
are measured
at
the
amounts
expected
to
be
paid
when
the
liabilities
are
settled.

_Long-‐term

benefits_

The
liability
for
long
service
leave
is
recognised
and
measured
as
the
present
value
of
expected
future
payments
to
be made
in
respect
of
services
provided
by
employees
up
to
the
reporting
date.

Consideration
is
given
to
expected future
wage
and
salary
levels,
experience
of
employee
departures,
and
periods
of
service.
Expected
future
payments are
discounted
using
market
yields
at
the
reporting
date
of
national
government
bonds
with
terms
to
maturity
and currencies
that
match,
as
closely
as
possible,
the
estimated
future
cash
outflows.

_Pensions

and
other
post
employment
benefits_

All
Australian
employees
are
entitled
to
varying
levels
of
benefits
on
retirement,
disability
or
death.

The superannuation
plans
provide
accumulated
benefits.

Employees
contribute
to
the
plans
at
various
percentages
of their
wages
and
salaries.

**Share-‐based

payment
transactions**

_Equity

settled
transactions:_

The
consolidated
entity
provides
benefits
to
employees
(including
Directors)
in
the
form
of
share-‐based
payments, whereby
services
are
rendered
in
exchange
for
shares
or
rights
over
shares
(equity
settled
transactions).

There
are
currently
two
plans
in
place
to
provide
these
benefits:

54 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**2. SUMMARY

OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT’D)**

The
Employee
Share
Plan
(ESP).

The
cost
of
these
equity-‐settled
transactions
with
employees
is
measured
by
reference
to
the
fair
value
of
the
equity instruments
at
the
date
at
which
they
are
granted.
The
fair
value
is
determined
by
reference
to
the
active
market
for the
shares
which
trade
on
the
Australian
Securities
Exchange,
at
grant
date.

In
valuing
equity
settled
transactions,
no
account
is
taken
of
any
vesting
conditions,
other
than
(if
applicable):

Non-‐vesting
conditions
that
do
not
determine
whether
the
consolidated
entity
or
company
receives
services
that entitle
the
employee
to
receive
payment
in
equity
or
cash
Conditions
that
are
linked
to
the
price
of
the
shares
of
the
company

The
cost
of
equity-‐settled
transactions
is
recognised,
together
with
a
corresponding
increase
in
equity,
over
the
period in
which
the
performance
and/or
service
conditions
are
fulfilled,
ending
on
the
date
on
which
the
relevant
employees become
entitled
to
the
award
(the
vesting
period).
The
cumulative
expense
recognised
for
equity-‐settled
transactions at
each
reporting
date
until
the
vesting
date
reflects
the
extent
to
which
the
vesting
period
has
expired
and
the entity’s
best
estimate
of
the
number
of
equity
instruments
that
will
ultimately
vest.
The
income
statement
expense
or credit
for
a
period
is
recorded
in
Employee
Benefits
Expense
and
represents
the
movement
in
cumulative
expense recognised
as
at
the
beginning
and
end
of
that
period. At
each
subsequent
reporting
date
until
vesting,
the
cumulative
charge
to
the
statement
of
profit
or
loss
and
other comprehensive
income
is
the
product
of:

The
grant
date
fair
value
of
the
award;
The
current
best
estimate
of
the
number
of
awards
that
will
vest,
taking
into
account
such
factors
as
the likelihood
of
employee
turnover
during
the
vesting
period
and
the
likelihood
of
non-‐market
performance conditions
being
met;
and
The
expired
portion
of
the
vesting
period.

The
charge
to
the
statement
of
profit
or
loss
and
other
comprehensive
income
for
the
period
is
the
cumulative
amount as
calculated
above
less
the
amounts
already
charged
in
previous
periods.
There
is
a
corresponding
entry
to
equity.

Equity
settled
awards
granted
by
the
company
to
employees
of
subsidiaries
are
recognised
in
the
parent’s
separate financial
statements
as
an
additional
investment
in
the
subsidiary
with
a
corresponding
credit
to
equity.
As
a
result, the
expense
recognised
by
the
company
in
relation
to
equity-‐settled
awards
only
represents
the
expense
associated with
grants
to
employees
of
the
parent.

The
expense
recognised
by
the
consolidated
entity
is
the
total
expense associated
with
all
such
awards.

Until
an
award
has
vested,
any
amounts
recorded
are
contingent
and
will
be
adjusted
if
more
or
fewer
awards
vest than
were
originally
anticipated
to
do
so.

Any
award
subject
to
a
market
condition
or
non-‐vesting
condition
is considered
to
vest
irrespective
of
whether
or
not
that
market
condition
or
non-‐vesting
is
fulfilled,
provided
that
all other
conditions
are
satisfied.

If
a
non-‐vesting
condition
is
within
the
control
of
the
consolidated
entity,
company
or
the
employee,
the
failure
to satisfy
the
condition
is
treated
as
a
cancellation.

If
a
non-‐vesting
condition
within
the
control
of
the
consolidated entity,
company
or
employee
is
not
satisfied
during
the
vesting
period,
any
expense
for
the
award
not
previously recognised
is
recognised
over
the
remaining
vesting
period,
unless
the
award
is
forfeited.

If
the
terms
of
an
equity-‐settled
award
are
modified,
as
a
minimum
an
expense
is
recognised
as
if
the
terms
had
not been
modified.
An
additional
expense
is
recognised
for
any
modification
that
increases
the
total
fair
value
of
the

HUB24 ANNUAL REPORT 2015 55

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**2. SUMMARY

OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT’D)**

share-‐based
payment
arrangement,
or
is
otherwise
beneficial
to
the
employee,
as
measured
at
the
date
of modification.

If
an
equity-‐settled
award
is
cancelled,
it
is
treated
as
if
it
had
vested
on
the
date
of
cancellation,
and
any
expense
not yet
recognised
for
the
award
is
recognised
immediately.

However,
if
a
new
award
is
substituted
for
the
cancelled award
and
designed
as
a
replacement
award
on
the
date
that
it
is
granted,
the
cancelled
and
new
award
are
treated as
if
they
were
a
modification
of
the
original
award,
as
described
in
the
previous
paragraph.

The
dilutive
effect,
if
any,
of
outstanding
options
is
reflected
as
additional
share
dilution
in
the
computation
of
diluted earnings
per
share.

**Issued

Capital**

Ordinary
shares
are
classified
as
equity.
Incremental
costs
directly
attributable
to
the
issue
of
new
equity
instruments are
shown
in
equity
as
a
deduction,
net
of
GST,
from
the
proceeds.

**Earnings

Per
Share
(EPS)**

Basic
EPS is
calculated
by
dividing
the
result
attributable
to
members
of
the
company,
adjusted
for
the
after-‐tax
effect of
preference
dividends
on
preference
shares
classified
as
equity,
by
the
weighted
average
number
of
ordinary
shares outstanding
during
the
financial
year,
adjusted
for
bonus
elements
in
ordinary
shares
during
the
year.
The
weighted average
number
of
issued
shares
outstanding
during
the
financial
year
does
not
include
shares
issued
as
part
of
the Employee
Share
Loan
Plan
that
are
treated
as
in-‐substance
options.

Diluted
EPS is
calculated
by
adjusting
the
basic
earnings
by
the
after-‐tax
effect
of
dividends
and
interest
associated with
dilutive
potential
ordinary
shares.

The
weighted
average
number
of
shares
used
is
adjusted
for
the
weighted average
number
of
ordinary
shares
that
would
be
issued
on
the
conversion
of
all
the
dilutive
potential
ordinary
shares into
ordinary
shares.

**Business

combinations**

The
acquisition
method
of
accounting
is
used
to
account
for
business
combinations
regardless
of
whether
equity instruments
or
other
assets
are
acquired.

The
consideration
transferred
is
the
sum
of
the
acquisition-‐date
fair
values
of
the
assets
transferred,
equity instruments
issued
or
liabilities
incurred
by
the
acquirer
to
former
owners
of
the
acquiree
and
the
amount
of
any
non-‐ controlling
interest
in
the
acquiree.
For
each
business
combination,
the
non-‐controlling
interest
in
the
acquiree
is measured
at
either
fair
value
or
at
the
proportionate
share
of
the
acquiree's
identifiable
net
assets.
All
acquisition costs
are
expensed
as
incurred
to
profit
or
loss.

On
the
acquisition
of
a
business,
the
consolidated
entity
assesses
the
financial
assets
acquired
and
liabilities
assumed for
appropriate
classification
and
designation
in
accordance
with
the
contractual
terms,
economic
conditions,
the consolidated
entity's
operating
or
accounting
policies
and
other
pertinent
conditions
in
existence
at
the
acquisition-‐ date.

Where
the
business
combination
is
achieved
in
stages,
the
consolidated
entity
remeasures
its
previously
held
equity interest
in
the
acquiree
at
the
acquisition-‐date
fair
value
and
the
difference
between
the
fair
value
and
the
previous carrying
amount
is
recognised
in
profit
or
loss.

Contingent
consideration
to
be
transferred
by
the
acquirer
is
recognised
at
the
acquisition-‐date
fair
value.
Subsequent changes
in
the
fair
value
of
the
contingent
consideration
classified
as
an
asset
or
liability
is
recognised
in
profit
or
loss. Contingent
consideration
classified
as
equity
is
not
remeasured
and
its
subsequent
settlement
is
accounted
for
within equity.

56 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**2. SUMMARY

OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT’D)**

The
difference
between
the
acquisition-‐date
fair
value
of
assets
acquired,
liabilities
assumed
and
any
non-‐controlling interest
in
the
acquiree
and
the
fair
value
of
the
consideration
transferred
and
the
fair
value
of
any
pre-‐existing investment
in
the
acquiree
is
recognised
as
goodwill.
If
the
consideration
transferred
and
the
pre-‐existing
fair
value
is less
than
the
fair
value
of
the
identifiable
net
assets
acquired,
being
a
bargain
purchase
to
the
acquirer,
the
difference is
recognised
as
a
gain
directly
in
profit
or
loss
by
the
acquirer
on
the
acquisition-‐date,
but
only
after
a
reassessment of
the
identification
and
measurement
of
the
net
assets
acquired,
the
non-‐controlling
interest
in
the
acquiree,
if
any, the
consideration
transferred
and
the
acquirer's
previously
held
equity
interest
in
the
acquirer.

Business
combinations
are
initially
accounted
for
on
a
provisional
basis.
The
acquirer
retrospectively
adjusts
the provisional
amounts
recognised
and
also
recognises
additional
assets
or
liabilities
during
the
measurement
period, based
on
new
information
obtained
about
the
facts
and
circumstances
that
existed
at
the
acquisition-‐date.
The measurement
period
ends
on
either
the
earlier
of
(i)
12
months
from
the
date
of
the
acquisition
or
(ii)
when
the acquirer
receives
all
the
information
possible
to
determine
fair
value.

Comparatives

Where
required
by
the
Accounting
Standards
and
/
or
for
improved
presentation
purposes,
comparative
figures
have been
adjusted
to
conform
to
changes
in
presentation
for
the
current
year.

**New

Accounting
Standards
and
Interpretations
not
yet
Mandatory
or
Early
Adopted**

Australian
Accounting
Standards
and
Interpretations
that
have
recently
been
issued
or
amended
but
are
not
yet mandatory,
have
not
been
early
adopted
by
the
consolidated
entity
for
the
annual
reporting
period
ended
30
June 2015.
The
consolidated
entity's
assessment
of
the
impact
of
these
new
or
amended
Accounting
Standards
and Interpretations,
most
relevant
to
the
consolidated
entity,
are
set
out
below.

_AASB

9
Financial
Instruments
and
its
consequential
amendments_

This
standard
is
applicable
to
annual
reporting
periods
beginning
on
or
after
1
January
2018.
The
standard
replaces
all previous
versions
of
AASB
9
and
completes
the
project
to
replace
IAS
39
'Financial
Instruments:
Recognition
and Measurement'.
AASB
9
introduces
new
classification
and
measurement
models
for
financial
assets.
A
financial
asset shall
be
measured
at
amortised
cost,
if
it
is
held
within
a
business
model
whose
objective
is
to
hold
assets
in
order
to collect
contractual
cash
flows,
which
arise
on
specified
dates
and
solely
principal
and
interest.
All
other
financial instrument
assets
are
to
be
classified
and
measured
at
fair
value
through
profit
or
loss
unless
the
entity
makes
an irrevocable
election
on
initial
recognition
to
present
gains
and
losses
on
equity
instruments
(that
are
not
held-‐for-‐ trading)
in
other
comprehensive
income
('OCI').
For
financial
liabilities,
the
standard
requires
the
portion
of
the change
in
fair
value
that
relates
to
the
entity's
own
credit
risk
to
be
presented
in
OCI
(unless
it
would
create
an accounting
mismatch).
New
simpler
hedge
accounting
requirements
are
intended
to
more
closely
align
the
accounting treatment
with
the
risk
management
activities
of
the
entity.
New
impairment
requirements
will
use
an
'expected credit
loss'
('ECL')
model
to
recognise
an
allowance.
Impairment
will
be
measured
under
a
12-‐month
ECL
method unless
the
credit
risk
on
a
financial
instrument
has
increased
significantly
since
initial
recognition
in
which
case
the lifetime
ECL
method
is
adopted.
The
standard
introduces
additional
new
disclosures.
The
consolidated
entity
will adopt
this
standard
from
1
July
2018
but
the
impact
of
its
adoption
is
yet
to
be
assessed
by
the
consolidated
entity.

HUB24 ANNUAL REPORT 2015 57

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**2. SUMMARY

OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT’D)**

AASB
15
Revenue
from
Contracts
with
Customers

This
standard
is
applicable
to
annual
reporting
periods
beginning
on
or
after
1
January
2017.
The
standard
provides
a single
standard
for
revenue
recognition.
The
core
principle
of
the
standard
is
that
an
entity
will
recognise
revenue
to depict
the
transfer
of
promised
goods
or
services
to
customers
in
an
amount
that
reflects
the
consideration
to
which the
entity
expects
to
be
entitled
in
exchange
for
those
goods
or
services.
The
standard
will
require:
contracts
(either written,
verbal
or
implied)
to
be
identified,
together
with
the
separate
performance
obligations
within
the
contract; determine
the
transaction
price,
adjusted
for
the
time
value
of
money
excluding
credit
risk;
allocation
of
the
transaction price
to
the
separate
performance
obligations
on
a
basis
of
relative
stand-‐alone
selling
price
of
each
distinct
good
or service,
or
estimation
approach
if
no
distinct
observable
prices
exist;
and
recognition
of
revenue
when
each performance
obligation
is
satisfied.
Credit
risk
will
be
presented
separately
as
an
expense
rather
than
adjusted
to revenue.
For
goods,
the
performance
obligation
would
be
satisfied
when
the
customer
obtains
control
of
the
goods.
For services,
the
performance
obligation
is
satisfied
when
the
service
has
been
provided,
typically
for
promises
to
transfer services
to
customers.
For
performance
obligations
satisfied
over
time,
an
entity
would
select
an
appropriate
measure of
progress
to
determine
how
much
revenue
should
be
recognised
as
the
performance
obligation
is
satisfied.
Contracts with
customers
will
be
presented
in
an
entity's
statement
of
financial
position
as
a
contract
liability,
a
contract
asset,
or a
receivable,
depending
on
the
relationship
between
the
entity's
performance
and
the
customer's
payment.
Sufficient quantitative
and
qualitative
disclosure
is
required
to
enable
users
to
understand
the
contracts
with
customers;
the significant
judgments
made
in
applying
the
guidance
to
those
contracts;
and
any
assets
recognised
from
the
costs
to obtain
or
fulfil
a
contract
with
a
customer.
The
consolidated
entity
will
adopt
this
standard
from
1
July
2017
but
the impact
of
its
adoption
is
yet
to
be
assessed
by
the
consolidated
entity.

**3. FINANCIAL

RISK
MANAGEMENT
OBJECTIVES
AND
POLICIES**

The
consolidated
entity’s
principal
financial
instruments
comprise
receivables,
payables,
finance
leases
and
cash
and cash
equivalents.

The
company
and
consolidated
entity
do
not
have
debt
facilities
and
do
not
trade
in
derivative instruments,
other
than
where
listed
and
unlisted
options
over
ordinary
shares
may
be
received
as
a
part consideration
for
corporate
fees
earned.

The
consolidated
entity
has
exposure
to
the
following
risks
from
its
use
of
financial
instruments:

Credit
risk
Liquidity
risk
Market
risk.

This
note
presents
information
about
the
company’s
and
the
consolidated
entity’s
exposure
to
each
of
the
above risks,
their
objectives,
policies
and
processes
for
measuring
and
managing
risk,
and
the
management
of
capital. Further
quantitative
disclosures
are
included
throughout
this
financial
report.

The
Board
of
Directors
has
overall responsibility
for
the
establishment
and
oversight
of
the
risk
management
framework.

Risk
management
policies
are
established
to
identify
and
analyse
the
risks
faced
by
the
company
and
the
consolidated entity,
to
set
appropriate
risk
limits
and
controls,
and
to
monitor
risks
and
adherence
to
limits.
Risk
management policies
and
systems
are
reviewed
regularly
to
reflect
changes
in
market
conditions
and
the
company’s
and consolidated
entity’s
activities.

The
company
and
consolidated
entity,
through
their
training
and
management standards
and
procedures,
aim
to
develop
a
disciplined
and
constructive
control
environment
in
which
all
employees and
consultants
understand
their
roles
and
obligations.

58 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**3. FINANCIAL

RISK
MANAGEMENT
OBJECTIVES
AND
POLICIES
(CONT’D)**

The
consolidated
entity
Audit,
Risk
and
Compliance
Committee
oversees
how
management
monitors
compliance
with the
company’s
and
the
consolidated
entity’s
risk
management
policies
and
procedures
and
reviews
the
adequacy
of the
risk
management
framework
in
relation
to
risks
faced.
The
Committee
is
assisted
by
external
professional
advisors from
time
to
time.

**Credit

risk**

Credit
risk
is
the
risk
of
financial
loss
to
the
consolidated
entity
if
a
customer
or
counterparty
to
a
financial
instrument
fails
to meet
its
contractual
obligations,
and
arises
from
the
financial
assets
of
the
consolidated
entity,
which
comprise
cash
and cash
equivalents
and
principally,
trade
receivables.
For
the
company
it
arises
from
receivables
due
from
subsidiaries. Exposure
at
reporting
date
is
addressed
at
each
particular
note.
The
consolidated
entity
does
not
hold
any
credit derivatives
to
offset
its
credit
exposure.

It
is
the
consolidated
entity's
policy
that
all
customers
who
wish
to
trade
on
credit
terms
are
subject
to
credit verification
procedures
including
an
assessment
of
their
independent
credit
worthiness,
financial
position,
past experience
and
industry
reputation.
Risk
limits
are
set
for
each
individual
customer
in
accordance
with
parameters
set by
the
Board.
These
risk
limits
are
regularly
monitored.

In
addition,
credit
risk
exposures
and
receivable
balances
are
monitored
on
an
ongoing
basis
with
the
intended
result that
the
consolidated
entity's
exposure
to
bad
debts
is
not
significant.

The
consolidated
entity
also
has
credit
risk
in
respect
of
its
corporate
income
debtors.
In
the
case
of
most
transactions involving
corporate
income,
revenue
is
generally
earned
over
a
period
of
several
months
due
to
the
complexity
and
size of
the
work
involved.

The
consolidated
entity
manages
this
risk
by
entering
into
contractual
agreements
with
its counterparties,
obtaining
external
legal
advice
where
necessary,
at
the
start
of
each
transaction.
The
Board
has
direct involvement
with
the
counterparties
during
the
engagement
phase
of
each
transaction
in
order
to
assess
their
suitability.

The
consolidated
entity
policy
is
to
provide
financial
guarantees
only
to
wholly-‐owned
subsidiaries.

**Liquidity

risk**

Liquidity
risk
is
the
risk
that
the
consolidated
entity
will
not
be
able
to
meet
its
financial
obligations
as
they
fall
due. The
consolidated
entity’s
approach
to
managing
liquidity
risk
is
to
ensure,
as
far
as
possible,
that
it
will
always
have sufficient
liquidity
to
meet
its
liabilities
when
due,
under
both
normal
and
stressed
conditions,
without
incurring unacceptable
losses
or
risking
damage
to
the
consolidated
entity’s
reputation.

The
consolidated
entity
typically
ensures
that
it
has
sufficient
cash
on
demand
to
meet
operational
expenses
for
a period
of
90
days,
excluding
the
potential
impact
of
extreme
circumstances
that
cannot
be
reasonably
predicted.
The consolidated
entity
has
no
debt
facilities
or
credit
lines.

Refer
to
Note
29:
Financial
Instruments
for
a
sensitivity
analysis
of
the
consolidated
entity’s
financial
assets
and liabilities
maturity.

**Market

risk**

Market
risk
is
the
risk
that
changes
in
market
prices
will
affect
the
consolidated
entity’s
income
and
include
price
risk. The
company
no
longer
carries
on
principal
trading
activities.

**Capital

management**

The
Board’s
policy
is
to
maintain
a
sufficient
capital
base
so
as
to
maintain
investor,
creditor
and
market
confidence and
to
sustain
future
development
of
the
business.
It
is
noted
that
the
company,
through
its
subsidiary
HUB24

HUB24 ANNUAL REPORT 2015

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**3. FINANCIAL

RISK
MANAGEMENT
OBJECTIVES
AND
POLICIES
(CONT’D)**

Custodial
Services
Limited,
fully
complied
with
the
minimum
capital
requirements
of
the
ASX
and
ACH
Market
Rules
as a
market
participant
and
AFSL
base
level
financial
requirements
so
as
to
ensure
ongoing
capital
adequacy.

There
were
no
changes
in
the
consolidated
entity’s
approach
to
capital
management
during
the
year.

The
preparation
of
the
financial
statements
requires
management
to
make
judgments,
estimates
and
assumptions that
affect
the
reported
amounts
in
the
financial
statements.

Management
continually
evaluates
its
judgments
and estimates
in
relation
to
assets,
liabilities,
contingent
liabilities,
revenue
and
expenses.

Management
bases
its judgments
and
estimates
on
historical
experience
and
on
other
various
factors
it
believes
to
be
reasonable
under
the circumstances,
the
result
of
which
form
the
basis
of
the
carrying
values
of
assets
and
liabilities
that
are
not
readily apparent
from
other
sources.

Actual
results
may
differ
from
these
estimates
under
different
assumptions
and conditions.

Management
has
identified
the
following
critical
accounting
policies
for
which
significant
judgments,
estimates
and assumptions
are
made.

Actual
results
may
differ
from
these
estimates
under
different
assumptions
and
conditions and
may
materially
affect
financial
results
or
the
financial
position
reported
in
future
periods.
Further
details
of
the nature
of
these
assumptions
and
conditions
may
be
found
in
the
relevant
notes
to
the
financial
statements.

**4. CRITICAL

ACCOUNTING
JUDGEMENTS,
ESTIMATES
AND
ASSUMPTIONS**

The
preparation
of
the
financial
statements
requires
management
to
make
judgements,
estimates
and
assumptions that
affect
the
reported
amounts
in
the
financial
statements.
Management
continually
evaluates
its
judgements
and estimates
in
relation
to
assets,
liabilities,
contingent
liabilities,
revenue
and
expenses.
Management
bases
its judgements,
estimates
and
assumptions
on
historical
experience
and
on
other
various
factors,
including
expectations of
future
events,
management
believes
to
be
reasonable
under
the
circumstances.
The
resulting
accounting judgements
and
estimates
will
seldom
equal
the
related
actual
results.
The
judgements,
estimates
and
assumptions that
have
a
significant
risk
of
causing
a
material
adjustment
to
the
carrying
amounts
of
assets
and
liabilities
(refer
to the
respective
notes)
within
the
next
financial
year
are
discussed
below.

_Recovery

of
deferred
tax
assets_

Deferred
tax
assets
are
recognised
for
carried
forward
income
tax
losses
and
deductible
temporary
differences
to
the extent
that
Directors
consider
that
it
is
probable
that
future
taxable
profits
will
be
available
to
utilise
those
temporary differences
and
tax
losses.

_Paragem

fair
value
estimate_

The
consideration
for
Paragem
has
been
estimated
to
be
$7.975
million,
comprising
$6.302
million
of
purchase consideration
and
$1.673
million
of
share
based
payment
expense.

Of
the
total
purchase
consideration,
$1.008
million
was
paid
upfront
in
cash,
$0.967
million
is
payable
in
cash
on
3 September
2015
and
$4.327
million
is
contingent
upon
performance
criteria
which
management
estimates
will
be fully
met
(100%)
over
the
three
years
to
30
September
2017.

The
impact
of
meeting
90%
of
the
performance
criteria
associated
with
the
contingent
consideration
of
$4.327 million
is
:

• a
reduction
in
contingent
purchase
consideration
of
$317,200;
and • a
reduction
in
the
share
based
payment
expense
of
$282,893.

_Estimation

of
bad
debts
and
provisioning_

Receivables
are
assessed
by
management
for
recoverability
based
on
days
past
due
or
pending
legal
actions
and
other counter
party
information.

60 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**4. CRITICAL

ACCOUNTING
JUDGEMENTS,
ESTIMATES
AND
ASSUMPTIONS
(CONT’D)**

_Investment

Platform
estimate
of
useful
life_

Management
have
reassessed
the
remaining
useful
life
of
the
investment
platform.
The
useful
life
of
the
investment platform
upon
acquisition
of
this
asset
in
November
2010
was
estimated
to
be
ten
years.
Management
have reassessed
that
the
useful
life
be
extended
based
upon
the
useful
life
of
separate
platform
components.

The
three
components
with
different
useful
lives
are: Core
database
with
a
useful
life
of
20
years; Applications
with
a
useful
life
of
circa
10
years; User
Interface
with
a
useful
life
of
circa
5
years.

The
impact
of
this
change
is
that
the
closing
carrying
amount
of
the
investment
platform
as
at
30
June
2014
of
$6.290 million
will
be
amortised
up
to
November
2030,
depending
on
the
component
classification.

The
impact
of
this
change
for
the
year
ended
30
June
2015
is
a
reduction
in
amortisation
expense
of
$453,442.

_Goodwill

and
other
indefinite
life
intangible
assets_

The
carrying
value
of
intangible
assets
(including
goodwill)
is
assessed
for
indications
that
the
asset
has
been
impaired in
accordance
with
the
accounting
policy
under
the
heading
Goodwill
and
Intangibles.
The
recoverable
amounts
of cash
generating
units
have
been
determined
based
on
value-‐in-‐use
calculations.
These
calculations
require
the
use
of assumptions
including
estimated
discount
rates
based
on
the
current
cost
of
capital
and
growth
rates
of
the
estimated future
cash
flows.
Refer
to
Note
12
for
details
of
these
assumptions
and
the
potential
impact
of
changes
to
these assumptions.

_Impairment

of
non-‐financial
assets
other
than
goodwill
and
other
indefinite
life
intangible
assets_

The
consolidated
entity
assesses
impairment
of
non-‐financial
assets
other
than
goodwill
and
other
indefinite
life intangible
assets
at
each
reporting
date
by
evaluating
conditions
specific
to
the
consolidated
entity
and
to
the particular
asset
that
may
lead
to
impairment.
If
an
impairment
trigger
exists,
the
recoverable
amount
of
the
asset
is determined.
This
involves
fair
value
less
costs
of
disposal
or
value-‐in-‐use
calculations,
which
incorporate
a
number
of key
estimates
and
assumptions.

_Share-‐based

payment
transactions_

The
consolidated
entity
measures
the
cost
of
equity-‐settled
transactions
by
reference
to
the
fair
value
of
the
equity instruments
at
the
date
at
which
they
were
granted.
The
fair
value
is
determined
using
a
binomial method.
The
accounting
estimates
and
assumptions
relating
to
the
equity-‐settled
share-‐based
payments
would
have no
impact
on
the
carrying
amounts
of
assets
or
liabilities
within
the
next
annual
reporting
period
but
may
impact expenses
and
equity.

_Capitalisation

of
development
costs_

The
consolidated
entity
capitalises
project
development
costs
eligible
for
capitalisation.
The
capitalised
costs
are
all directly
attributable
costs
necessary
to
create,
produce,
and
prepare
the
asset
to
be
capable
of
operating
in
the manner
intended.
The
consolidated
entity
amortises
the
capitalised
project
costs
over
the
project’s
useful
life.

_Broking

Claim
Provision_

The
consolidated
entity
estimates
the
provision
for
adviser
client
claims
arising
from
financial
advice
provided
before 1
March
2013
from
the
discontinued
stockbroking
business
as
being
claims
reported
during
the
year
and
an
estimate of
future
claims
and
associated
legal
costs.

HUB24 ANNUAL REPORT 2015 61

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**5. OPERATING

SEGMENTS**

_Identification

of
reportable
segments_

The
consolidated
entity
is
organised
into
two
operating
segments:
platform
and
licensee.

These
operating
segments
are
based
on
the
internal
reports
that
are
reviewed
and
used
by
the
executive management
team
(identified
as
the
Chief
Operating
Decision
Makers
hereafter
CODM)
in
assessing
performance
and in
determining
the
allocation
of
resources.

The
CODM
reviews
segment
profits
(Segment
EBITDA)
on
a
monthly
basis.

The
accounting
policies
adopted
for
internal
reporting
to
the
CODM
are
consistent
with
those
adopted
in
the
financial statements.

The
principal
products
and
services
for
each
of
the
operating
segments
are
as
follows:

Platform

Development
and
provision
of
investment
and
superannuation
platform
services
to
financial
advisers,
stockbrokers, accountants
and
their
clients.

Licensee

Provision
of
financial
advice
to
clients
through
financial
advisers
authorised
by
Paragem
Pty
Ltd.
The
Licensee
provides compliance,
systems
and
support
to
adviser
practices
enabling
advisers
to
provide
clients
with
financial
advice
over
a range
of
products.

_Intersegment

transactions_

There
are
no
intersegment
transactions.

_Intersegment

receivables,
payables
and
loans_

Intersegment
loans
are
initially
recognised
at
the
consideration
received
and
are
eliminated
on
consolidation.

The
provision
of
corporate
services
supports
these
two
operating
segments
and
includes
an
allocation
of
executive headcount
costs.

headcount costs.
CONSOLIDATED	Intersegment
31-Dec-14 Platform Services Licensee Services eliminations/ Corporate Total
	$ $ $ $
Revenue

Sales to external customers	8,056,796 20,235,321 - 28,292,117
Total sales revenue 8,056,796 20,235,321 - 28,292,117

Total revenue	8,056,796 20,235,321 - 28,292,117


Segment Result	(4,069,328) 60,687 (376,508) (4,385,149)

62 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**5. OPERATING

SEGMENTS
(CONT’D)**

5. OPERATING SEGMENTS (CONT’D)	5. OPERATING SEGMENTS (CONT’D)
CONSOLIDATED		Intersegment
31-Dec-14		Platform Services Licensee Services eliminations/ Corporate Total
		$ $ $ $
Other non-operating items:
Interest revenue		89,516 - 325,120 414,636
Non-recurring revenue		597,429 - - 597,429
Share based payment expense		- - (902,513) (902,513)
Transaction costs		- - (448,109) (448,109)
Depreciation and amortisation		(572,813) (53,842) - (626,655)
Profit before income tax		(3,955,196) 6,845 (1,402,010) (5,350,362)
Income tax expense		- - - -
Profit after income tax from continuing operations		(5,350,362)

Discontinued operations expense		- - (1,106,537) (1,106,537)

Profit after income tax		(3,955,196) 6,845 (2,508,547) (6,456,900)

The
operating
performance
for
Licensee
segment
reflects
the
result
from
the
date
of
acquisition,
3
September
2014.

Revenue
from
ordinary
activities
and
revenue
from
continuing
operations
per
the
Statement
of
Financial
Performance equates
to
$29,304,182
which
comprises
Total
Revenue,
Interest
revenue
and
Non
Recurring
Revenue
in
the
table above.

HUB24 ANNUAL REPORT 2015 63

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**6. REVENUE

AND
EXPENSES
FROM
CONTINUING
OPERATIONS**

		CONSOLIDATED
		2015 2014
		$ $
	Revenue
	(a) Sales revenue
	Portfolio service fees	3,807,094 1,899,266
	Licensee fees	20,235,321 -
	Cash margin	1,298,628 434,553
	Brokerage	1,406,022 435,214
	Otherplatform fees	1,922,188 440,157
		28,669,253 3,209,190

Other
platform
fees
include
an
estimated
refund
from
the
ATO
relating
to
the
Investor
Directed
Portfolio Service
reduced
input
tax
credit
for
$1,007,844.
The
current
period
recurring
revenue
is
$639,399
and
the prior
period
non-‐recurring
revenue
is
$368,445.

	prior period non-recurring revenue is $368,445.
	Expenses
	(b) Employee benefits expenses
	Wages and salaries (incl super and payroll tax)		6,670,093 5,636,421
	Share based payments expense		437,791 427,895
	Other employee benefits expenses		1,775,957 832,301
			8,883,841 6,896,617

	(c) Property and occupancy costs
	Rent		418,096 312,971
	Other occupancycosts		70,336 59,695
			488,432 372,666

	(d) Depreciation, impairment and amortisation
	Depreciation and impairment of office equipment		57,016 53,718
	Amortisation of intangible assets		560,272 975,197
			617,288 1,028,915

	(e) Administrative expenses
	Corporate fees		244,079 246,131
	Professional and consultancy fees		400,167 599,213
	Information services and communication		327,993 363,911
	Travel and entertainment		252,796 227,495
	Other administrative expenses		1,886,479 783,292
			3,111,514 2,220,042

The
current
period
administrative
expenses
include
$448,109
relating
to
acquisition
expenses
and $464,722
adviser
share
based
payments.

64 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

7. INCOME TAX

(a) Income tax expense/(benefit)

(a) Income tax expense/(benefit)
	CONSOLIDATED Restated 2015 2014 $ $
Current tax Research and development claim Deferred tax Income tax expense/(benefit) Deferred tax included in income tax expense/(benefit) comprises: Decrease/(increase) in deferred tax assets (Decrease)/increase in deferred tax liabilities (b) Reconciliation of income tax expense/(benefit) to pre tax accounting profit/(loss) Loss from continuing operations before income tax Loss from discontinued operations before income tax Prima facie income tax at 30% Tax effect of amounts which are not deductible (taxable) in calculating taxable income: Research and development government grant Share based payments Entertainment Penalty Sundry items Adjustment to deferred tax asset Non-recognition of deferred tax asset Non-recognition of deferred tax liability Income tax expense/(benefit)
	- -
	- -
	- -
	- -



	- -
	- -
	- -



	(5,350,363) (7,867,963)
	(1,106,537) (679,825)
	(6,456,900) (8,547,788)

	(1,937,070) (2,564,336)



	(88,093) -
	270,754 128,369
	14,135 4,247
	1,852 -
	47,086 26,264
	245,734 158,880

	143,666 330,260
	1,781,514 2,075,196
	(233,844) -
	1,691,336 2,405,456

	- -

HUB24 ANNUAL REPORT 2015 65

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**7. INCOME

TAX
(CONT’D)**

In
addition
to
its
own
current
and
deferred
tax
amounts,
the
head
entity
also
recognises
current
tax
liabilities
(or assets)
and
the
deferred
tax
assets
arising
from
unused
tax
losses
and
unused
tax
credits
(if
any)
assumed
from controlled
entities
in
the
tax
consolidated
entity.

**8. DISCONTINUED

OPERATIONS**

During
the
period
the
consolidated
entity
incurred
impairment
charges
of
$0.234
million
relating
to
a
deferred
receivable from
BBY
Holdings
Ltd
(in
liquidation).

Reported
claims
during
the
year
and
an
estimate
of
future
claims
and
associated
legal
costs
have
resulted
in
a
provision increase
of
$0.742
million
during
the
year
ended
30
June
2015.

Financial Performance
		CONSOLIDATED
	2015		2014
	$		$
Revenue from discontinued operations Revenue Interest and other income	- -		- -
	-		-
Expenses from discontinued operations Impairment Insurance run-off cover Loss on trading software disposal Settlement and legal expenses	233,755 - - 872,782		- 390,376 57,544 231,905
	1,106,537		679,825
Loss before income tax expense from disccontinued operations Income tax expense	(1,106,537) -		(679,825) -
Loss after income tax	(1,106,537)		(679,825)
Loss on disposal before income tax expense Income tax expense	- -		- -
Loss on disposal after income tax expense	-		-
Loss after income tax from discontinued operations	(1,106,537)		(679,825)
Cash flow information
Net cash used in operating activities Net cash used in financingactivities	2015 $ (1,106,537) -	CONSOLIDATED 2014 $ (679,825) -
Net decrease in cash and cash equivalents from discontinued operations	(1,106,537)		(679,825)

66 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**8. DISCONTINUED

OPERATIONS
(CONT’D) Carrying
amounts
of
assets
and
liabilities**

8. DISCONTINUED OPERATIONS (CONT’D) Carrying amounts of assets and liabilities

		CONSOLIDATED
		2015 2014
		$ $

Total assets		- -

Provisions		680,219 445,727
		680,219 445,727

Net assets		(680,219) (445,727)
9. CURRENT ASSETS - TRADE AND OTHER RECEIVABLES		CONSOLIDATED 2015 2014 $ $ 1,701,472 306,638 - - 1,701,472 306,638 490,907 99,348 2,192,379 405,986
Trade receivables Allowance for impairment loss (i) Other debtors

**(i)

Allowance
for
impairment
loss**

Trade
receivables
are
non-‐interest
bearing
and
are
generally
on
30
day
terms.
A
provision
for
impairment
loss
is recognised
when
there
is
objective
evidence
that
an
individual
trade
receivable
is
impaired.
Impairment
losses
on trade
and
client
debt
receivables
totalling
$Nil
(2014:
$Nil)
has
been
recognised
by
the
consolidated
entity
in
the current
year.
These
amounts
have
been
included
in
the
statement
of
comprehensive
income
as
an
administrative expense.

Movements in the provision for impairment loss were as follows: Opening balance Charge for the year Amounts written off Closing balance	- - - - - -
	- -

**(ii)

Other
debtors**

The
tax
refund
claimed
for
platform
research
and
development
during
2015
was
$265,316
and
is
included
in
Other debtors.

HUB24 ANNUAL REPORT 2015 67

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**9. CURRENT

ASSETS
-‐
TRADE
AND
OTHER
RECEIVABLES
(CONT’D)**

At
30
June,
the
ageing
analysis
of
receivables
is
as
follows:

At 30 June, the ageing analysis of receivables is	as follows:
	0-30	31-60	61-90
	days	days	days
			PDNI *

2015 Consolidated	834,685	349,850	1,007,844
2014 Consolidated	405,987	-	-

PDNI
-‐
Past
due
not
impaired

CI
-‐
Considered
impaired

Other
balances
within
trade
and
other
receivables
do
not
contain
impaired
assets
and
are
not
past
due.
It
is expected
that
these
other
balances
will
be
received
when
due.

**(iii)

Fair
value
and
credit
risk**

Due
to
the
short
term
nature
of
these
receivables,
their
carrying
value
is
assumed
to
approximate
their
fair
value.

**10.

CURRENT
ASSETS
–
OTHER
CURRENT
ASSETS**

10. CURRENT ASSETS – OTHER CURRENT ASSETS
	CONSOLIDATED 2015 2014 $ $
Prepayments Other assets	310,432 67,184 103,366 351,860
	413,798 419,044

**11.

NON-‐CURRENT
ASSETS
–
OFFICE
EQUIPMENT**

11. NON-CURRENT ASSETS – OFFICE EQUIPMENT	413,798 419,044
	CONSOLIDATED 2015 2014 $ $
Computer Equipment At cost Accumulated depreciation Office Furniture and Fittings At cost Accumulated depreciation Total Office Equipment Cost Accumulated depreciation Total Net Carrying Amount	178,969 136,340 (129,076) (96,340)
	49,893 40,000
	111,491 69,153 (32,782) (15,592)
	78,708 53,561
	290,460 205,493 (161,858) (111,932)
	128,602 93,561

68 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**11.

NON-‐CURRENT
ASSETS
–
OFFICE
EQUIPMENT
(CONT’D)**

11. NON-CURRENT ASSETS – OFFICE EQUIPMENT (CONT’D)
	CONSOLIDATED 2015 2014 $ $
Reconciliations of the carrying amounts at the beginning and end of the financial year: *Computer Equipment* Carrying amount at beginning Acquisitions through business combinations Other additions Disposals Depreciation expense Net Carrying Amount *Office Furniture and Fittings* Carrying amount at beginning Acquisitions through business combinations Other additions Disposals Depreciation expense Net Carrying Amount Total Office Equipment Carrying amount at beginning Acquisitions through business combinations Other additions Disposals Depreciation Net Carrying Amount	40,000 30,322 4,009 - 35,348 31,671 - - (29,464) (21,993)
	49,893 40,000
	53,561 24,607 12,573 - 29,090 60,678 - (6,978) (16,516) (24,746)
	78,708 53,561
	93,561 54,929 16,583 - 64,438 92,349 - (6,978) (45,980) (46,739)
	128,602 93,561

HUB24 ANNUAL REPORT 2015 69

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**12.

NON-‐CURRENT
ASSETS
–
INTANGIBLE
ASSETS**

12. NON-CURRENT ASSETS – INTANGIBLE ASSETS
	CONSOLIDATED 2015 2014 $ $
Investment Platform At cost Accumulated amortisation and impairment Net carrying amount Goodwill At cost Accumulated amortisation and impairment Net carrying amount Dealer Network At cost Accumulated amortisation and impairment Net carrying amount Software At cost Accumulated amortisation Net carrying amount Total Net Carrying Amount *Reconciliations of the carrying amount at* *the beginning and end of the financial year:* Investment Platform Opening carrying amount Other additions Impairment charge Other disposals Amortisation charge Closing carrying amount Goodwill Opening carrying amount Acquisitions through business combinations Impairment charge Closing carrying amount Dealer Network Opening carrying amount Acquisitions through business combinations Impairment charge Amortisation charge Closing carrying amount	25,475,151 24,717,486 (18,937,044) (18,427,125)
	6,538,107 6,290,361
	5,846,822 - - -
	5,846,822 -
	604,244 - (50,354) -
	553,890 -
	45,289 32,953 (11,927) (891)
	33,362 32,062
	12,972,181 6,322,423
	6,290,361 7,409,144 757,666 327,773 - - - (472,250) (509,918) (974,306)
	6,538,107 6,290,361
	- - 5,846,822 - - -
	5,846,822 -
	- - 604,244 - (50,354) - - -
	553,890 -

70 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**12.

NON-‐CURRENT
ASSETS
–
INTANGIBLE
ASSETS
(CONT’D)**

12. NON-CURRENT ASSETS – INTANGIBLE ASSETS (CONT’D) Software Opening carrying amount Other additions Amortisation charge Closing carrying amount (a) Impairment tests for intangible assets Investment Platform Goodwill Dealer Network Software	32,062 - 12,338 32,953 (11,036) (891) 33,362 32,062
	6,538,107 6,290,361 5,846,822 - 553,890 - 33,362 32,062
	12,972,181 6,322,423

Intangible
assets
are
allocated
to
the
consolidated
entity's
cash-‐generating
units
(CGUs)
identified
according
to operating
segments.

**Investment

Platform**

The
recoverable
amount
of
the
Investment
Platform
is
determined
based
on
a
value-‐in-‐use
calculation.

This calculation
uses
cash
flow
projections
based
on
financial
budgets
approved
by
directors
covering
a
seven
year
period. Cash
flows
beyond
the
seven
year
period
are
extrapolated
using
a
terminal
value.

**Goodwill

and
Dealer
Network**

Goodwill
recognised
as
part
of
the
Paragem
acquisition
was
allocated
to
the
Investment
Platform
CGU,
while
the Dealer
Network
intangible
was
identified
as
part
of
the
Licensee
CGU
with
a
finite
life.
(see
note
30
for
Paragem acquisition
details).
The
Dealer
Network
was
recoginsed
at
fair
value
upon
acquisition
and
is
amortised
on
a
straight-‐ line
basis
over
a
useful
life
of
ten
years.

The
recoverable
amount
of
the
goodwill
generated
has
been
determined
based
on
a
value-‐in-‐use
calculation
using
a discounted
cash
flow
over
a
three
year
projection
period
approved
by
management
for
the
Paragem
dealer
group. Cash
flows
beyond
the
three
year
period
are
extrapolated
using
a
terminal
value.

The
recoverable
amount
of
the
Dealer
Network
intangible
is
determined
based
on
a
value-‐in-‐use
calculation
using
a discounted
cash
flow
over
a
five
year
projection
period
approved
by
management
for
the
Paragem
Licensee.

Cash flows
beyond
the
five
year
period
are
extrapolated
using
a
terminal
value.

**Key

assumptions
used
for
value-‐in-‐use
calculations
-‐
Investment
Platform
CGU**

The
cash
generated
by
Investment
Platform
CGU
has
been
segregated
between
the
cash
generated
by
the
Paragem dealer
group
and
the
cash
generated
by
all
other
dealer
groups
on
the
platform,
in
order
to
assess
the
recoverable amount
associated
with
each
intangible. The
Investment
Platform
has
been
assessed
based
on
the
cash
generated
by
all
dealer
groups
excluding
the
Paragem dealer
group.

The
goodwill
recognised
as
a
result
of
the
Paragem
acquisition,
has
been
assessed
based
on
the
cash
generated
by
the Paragem
dealer
group
on
the
platform.

HUB24 ANNUAL REPORT 2015 71

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**12.

NON-‐CURRENT
ASSETS
–
INTANGIBLE
ASSETS
(CONT’D)**

Key
assumptions
used
for
value-‐in-‐use
calculations
-‐
Investment
Platform
Intangible
Growth
in
funds
under
administration
on
the
platform
-‐
Growth
in
the
number
of
client
accounts
and
hence
funds under
administration
on
the
platform
are
a
key
assumption
used
in
calculating
future
cashflows.

Given
the platform's
early
stage
of
development
and
relatively
low
base
of
existing
funds
under
administration,
assumed growth
rates
are
significant
in
the
next
two
to
three
years
in
percentage
terms.

Management
have
estimated future
funds
under
administration
on
the
platform
with
reference
to
current
client
transition
rates,
industry
data and
pipeline
monitoring.

Pre-‐tax
discount
rate
-‐
The
pre-‐tax
discount
rate
used
for
the
company's
value-‐in-‐use
calculations
is
17.0%. (2014:18.5%).
The
reduction
to
the
discount
rate
is
due
to
the
decline
in
the
risk
free
rate
2015:3.01%; (2014:3.54%)
and
weighted
average
cost
of
capital
over
the
reporting
period.
The
weighted
average
cost
of
capital has
declined
by
1%
(2015:
17%;
2014:18%)
as
a
result
of
the
reduced
volatility
of
the
HUB24
share
price
relative
to market
movements
over
the
current
reporting
reporting
period.
Terminal
growth
rate
-‐
The
terminal
growth
rate
used
for
the
company's
value-‐in-‐use
calculations
is
2.5%. (2014:2.5%).
Management
believes
the
2.5%
growth
rate
to
be
conservative.
Period
over
which
cashflows
have
been
discounted
-‐
Management
have
used
a
period
of
seven
years
to
discount projected
cashflows
for
its
value-‐in-‐use
calculations.

This
period
is
considered
reasonable
given
the
stage
of platform
development
and
the
remaining
useful
life.
(15
years
and
5
months
from
30
June
2015.)

There
were
no
other
key
assumptions
used
for
the
investment
platform
intangible
value
in
use
calculation.

Based
on
the
above
assessment
there
was
no
impairment
of
the
investment
platform
intangible.

**Impact

of
possible
changes
in
key
assumptions
-‐
Investment
Platform
Intangible**

If
the
projected
earnings
on
client
account
balances
used
in
the
value-‐in-‐use
calculation
for
the
investment
platform CGU
are
2%
lower
than
management
estimates
over
the
period
of
the
value-‐in-‐use
calculation,
there
would
be
no impairment
of
the
intangible
asset.

If
the
pre-‐tax
discount
rate
for
this
intangible
had
been
2%
higher
than
management
estimates,
there
would
be
no impairment
of
intangible
assets.

Key
assumptions
used
for
value-‐in-‐use
calculations
-‐
Goodwill
Intangible
Growth
in
funds
under
administration
on
the
platform
-‐
Growth
in
the
number
of
client
accounts
and
hence
funds under
administration
on
the
platform
are
a
key
assumption
used
in
calculating
future
cashflows.

The
early transition
stage
of
the
Paragem
dealer
group
and
low
base
of
existing
funds
under
administration,
have
meant
that assumed
growth
rates
are
significant
in
the
first
year
declining
to
2%
over
the
subsequent
two
year
period. Management
have
estimated
the
transition
rate
with
reference
to
current
client
transition
rates

and
pipeline monitoring.

Net
Incremental
cashflow
-‐
the
incremental
cash
flow
rate
is
estimated
to
be
10
bps
of
the
fee
derived
from
the funds
under
administration
of
the
Paragem
dealer
group
on
the
HUB24
platform.
Management
have
estimated
the incremental
cashflow
rate
based
on
existing
platform
data
and
monitoring
of
the
dealer
group
performance
since acquisition.
Pre-‐tax
discount
rate
-‐
The
pre-‐tax
discount
rate
used
for
the
company's
value-‐in-‐use
calculations
is
17.0%. (2014:18.5%).
The
reduction
to
the
discount
rate
is
due
to
the
decline
in
the
risk
free
rate
2015:3.01%; (2014:3.54%)
and
weighted
average
cost
of
capital
over
the
reporting
period.
The
weighted
average
cost
of
capital has
declined
by
1%
(2015:
17%;
2014:18%)
as
a
result
of
the
reduced
volatility
of
the
HUB24
share
price
relative
to market
movements
over
the
current
reporting
reporting
period.

72 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**12.

NON-‐CURRENT
ASSETS
–
INTANGIBLE
ASSETS
(CONT’D)**

Terminal
growth
rate
-‐
The
terminal
growth
rate
used
for
the
company's
value-‐in-‐use
calculations
is
2.5%. (2014:2.5%).
Management
believes
the
2.5%
growth
rate
to
be
conservative.
Period
over
which
cashflows
have
been
discounted
-‐
Management
have
used
a
period
of
three
years
to
discount projected
cashflows
for
its
value-‐in-‐use
calculations.
This
period
is
considered
reasonable
given
the
early
stage
of the
Paragem
dealer
group
transition
and
has
been
projected
based
over
the
acquisition
target
period
to September

There
were
no
other
key
assumptions
used
for
the
Paragem
goodwill
intangible
value
in
use
calculation.

Based
on
the
above,
there
was
no
impairment
applied
to
the
goodwill
arising
from
the
Paragem
acquisition.

**Impact

of
possible
changes
in
key
assumptions
-‐
Goodwill
Intangible**

If
the
projected
earnings
on
client
account
balances
used
in
the
value-‐in-‐use
calculation
for
the
goodwill
intangible are
2%
lower
than
management
estimates
over
the
period
of
the
value-‐in-‐use
calculation,
there
would
be
no impairment
of
intangible
assets.

If
the
pre-‐tax
discount
rate
for
this
CGU
had
been
2%
higher
than
management
estimates
(19.0%
instead
of
17.0%) there
would
be
no
impairment
of
intangible
assets.

**Key

assumptions
used
for
value-‐in-‐use
calculations
-‐
Dealer
Network**

Growth
in
revenue
is
estimated
at
3%
for
the
licensee
CGU
and
a
key
assumption
used
in
calculating
future cashflows.

Management
have
estimated
a
5%
attrition
factor
for
departing
practices
and/or
advisors,
applied against
the
growth
rateof
3%,
which
is
believed
to
be
conservative
and
appropriate.
Ongoing
monitoring
of
actual revenue
growth
since
acquisition
(2
September
2014),
has
indicated
growth
in
excess
of
the
projection,
no
practice attrition
has
taken
place
since
acquisition.

An
EBIT
margin
of
1.1%
is
estimated
for
the
licensee
CGU
and
is
also
considered
a
key
assumption
used incalculating
future
cashflows.
The
rate
has
been
determined
based
upon
the
average
EBIT
margin
on
a
five
year projection
of
revenue
and
expenses
and
is
considered
by
management
to
be
reasonable
based
upon
the
actual performance
since
acquisition.
Pre-‐tax
discount
rate
-‐
The
pre-‐tax
discount
rate
used
for
the
company's
value-‐in-‐use
calculations
is
17.1%.
This
has been
determined
based
on
the
weighted
average
cost
of
capital
for
the
licensee.
Terminal
growth
rate
-‐
The
terminal
growth
rate
used
for
the
company's
value-‐in-‐use
calculations
is
3.0%. Management
believes
the
3.0%
growth
rate
to
be
prudent
and
is
consistent
with
the
general
market.
Period
over
which
cashflows
have
been
discounted
-‐
Management
have
used
a
period
of
seven
years
to
discount projected
cashflows
for
its
value-‐in-‐use
calculations.
This
period
is
considered
reasonable
given
the
early
stage
of the
licensee
CGU.

There
were
no
other
key
assumptions
used
in
the
Dealer
Network
Intangible
value-‐in-‐use
calculation.

Based
on
the
above,
the
value-‐in-‐use
of
the
dealer
network
exceeds
the
carrying
value
and
is
not
considered
impaired.

**Impact

of
possible
changes
in
key
assumptions
-‐
Dealer
Network**

If
the
projected
revenue
used
in
the
value-‐in-‐use
calculation
for
the
licensee
CGU
were
2%
lower
than
management estimates
over
the
period
of
the
value-‐in-‐use
calculation,
there
would
be
no
impairment
of
the
intangible
asset.

HUB24 ANNUAL REPORT 2015 73 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

12. NON-CURRENT ASSETS – INTANGIBLE ASSETS (CONT’D)

If the pre-tax discount rate for this CGU had been 2% higher than management estimates (19.1% instead of 17.1%) there would be no impairment of the intangible asset.

13. NON-CURRENT ASSETS - OTHER NON-CURRENT ASSETS

	CONSOLIDATED 2015 2014 $ $
Security deposits and guarantees Other assets	256,454 547,307 - 108,789
	256,454 656,096

14. CURRENT LIABILITIES - TRADE AND OTHER PAYABLES

	CONSOLIDATED 2015 2014 $ $
Trade creditors Sundry creditors	546,200 237,036 1,701,121 425,194
	2,247,321 662,230

15(a) CURRENT LIABILITIES - PROVISIONS

15(a) CURRENT LIABILITIES - PROVISIONS
	CONSOLIDATED 2015 2014 $ $
Employee benefits - Annual leave Employee benefits - Short term incentive Broking claims – Discontinued stockbroking operation Lease make good	428,381 324,686 1,083,878 599,240 680,219 445,727 - 20,000
	2,192,478 1,389,653

Broking claims – discontinued stockbroking operation

The provision represents the reported claims as at 30 June 2015 and an estimate of future claims and associated legal expenses.

Lease make good

The provision represents the present value of the estimated costs to make good the premises leased by the consolidated entity at the end of the respective lease term.

Movements in provisions

Movements in each class of provision during the financial year, other than employee benefits, are set out below:

74 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**15(a)

CURRENT
LIABILITIES
–
PROVISIONS
(CONT’D)**

15(a) CURRENT LIABILITIES – PROVISIONS (CONT’D)
Consolidated - 2015	Broking claims Lease make good $ $
Carrying amount at the start of the year	445,727 20,000 742,163 - (507,671) (20,000)
Additional provisions recognised
Amounts used
Carrying amount at the end of the year 15(b) CURRENT LIABILITIES - OTHER	680,219 -
	CONSOLIDATED 2015 2014 $ $
Deferred revenue from research and development claim 16(a) NON-CURRENT LIABILITIES – PROVISIONS	88,897 74,147 88,897 74,147
	CONSOLIDATED 2015 2014 $ $
Employee benefits - Long service leave Lease make good Lease liability	153,634 95,212 60,384 22,344 73,606 67,098
	287,624 184,654

_Lease

make
good_

The
provision
represents
the
present
value
of
the
estimated
costs
to
make
good
the
premises
leased
by
the consolidated
entity
at
the
end
of
the
respective
lease
term.

_Movements

in
provisions_

Movements
in
each
class
of
provision
during
the
financial
year,
other
than
employee
benefits,
are
set
out
below:

Consolidated - 2015	Lease liability Lease make good $ $
Carrying amount at the start of the year Additional provisions recognised Amounts used Carrying amount at the end of the year	67,098 22,344 15,566 38,040 (9,058) -
	73,606 60,384

HUB24 ANNUAL REPORT 2015 75

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**16(b)

NON-‐CURRENT
LIABILITIES
-‐
OTHER**

	CONSOLIDATED 2015 2014 $ $
Contingent consideration Deferred revenue from research and development claim	4,327,000 - 1,031,563 972,962
	5,358,563 972,962

The
contingent
consideration
refers
to
the
capped
earnout
relating
to
the
Paragem
acquisition.

The
earnout
is
subject
to
financial
performance
to
be
achieved
over
3
years
to
3
October
2017,
and
paid
in
HUB24 ordinary
shares.
Refer
to
note
30
for
further
details.

**17.

ISSUED
CAPITAL**

17. ISSUED CAPITAL
	CONSOLIDATED CONSOLIDATED 2015 2014 2015 2014 Number Number $ $
(a) Issued and paid up capital Ordinary shares, fully paid 52,058,181 47,058,181 82,165,453 77,107,017 (b) Other equity securities Treasury shares 141,111 185,111 (75,000) (119,000) Total Issued and paid up capital 52,199,292 47,243,292 82,090,453 76,988,017 *Movements in issued and paid up capital* Beginning of the financial year 47,058,181 38,913,469 77,107,017 66,993,612 Shares issued 5,000,000 8,144,712 5,250,000 10,588,126 Total shares 52,058,181 47,058,181 Capital raising costs - - (191,564) (474,721) End of the financial year 52,058,181 47,058,181 82,165,453 77,107,017 *Movement in other equity securities - treasury shares* Beginning of the financial year 185,111 221,908 119,000 150,000 Employee share issue (44,000) (36,797) (44,000) (31,000) End of the financial year 141,111 185,111 75,000 119,000	52,058,181 47,058,181 82,165,453 77,107,017 141,111 185,111 (75,000) (119,000)
	52,199,292 47,243,292 82,090,453 76,988,017
	47,058,181 38,913,469 77,107,017 66,993,612 5,000,000 8,144,712 5,250,000 10,588,126 52,058,181 47,058,181 - - (191,564) (474,721)
	52,058,181 47,058,181 82,165,453 77,107,017

	185,111 221,908 119,000 150,000 (44,000) (36,797) (44,000) (31,000)
	141,111 185,111 75,000 119,000

_**Ordinary

shares**_

Fully
paid
ordinary
shares
carry
one
vote
per
share
and
carry
the
right
to
dividends. On
24
March
2015
the
company
issued
5,000,000
ordinary
shares
at
$1.05
per
share
raising
total
proceeds
of $5,250,000.

_**Treasury

shares**_

Treasury
shares
are
shares
in
HUB24
Limited
that
are
held
by
HUB24
Employee
Share
Ownership
Trust
(ESOT)
for the
purpose
of
issuing
shares
under
HUB24
Employee
Share
Ownership
Plan. On
9
September
2014,
the
company
assigned
44,000
shares
to
eligible
employees
under
the
HUB24
Employee Share
Ownership
Plan.

76 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

18. RESERVES

18. RESERVES
	CONSOLIDATED 2015 2014 $ $
Share based payments share reserve	3,133,845 2,275,332

Represents the share based payments expense under the employee and advisor share plans.

19. DIVIDEND FRANKING ACCOUNT

Franking credits available to shareholders of the company for subsequent financial years are $nil (2014: $445,120).

20. RECONCILIATION OF CASHFLOWS

20. RECONCILIATION OF CASHFLOWS
	CONSOLIDATED 2015 2014 $ $ (6,456,900) (8,547,788) 617,288 1,028,915 - 30,204 902,513 427,895 (1,786,393) 977,144 5,246 135,580 - (200,063) 618,273 45,606 896,780 443,578 (5,203,193) (5,658,928) 12,108,825 13,779,844 12,108,825 13,779,844
(a) Reconciliation of the net loss after tax to cash flow from operations Net Loss after tax for the year Non-cash items: Depreciation and amortisation Disposal/write-off of office equipment Share based payments expense Changes in operating assets and liabilities: (Increase)/decrease in trade and other receivables (Increase)/decrease in other assets (Increase)/decrease in non current assets Increase/(decrease) in trade and other payables Increase/(decrease) in provisions Net cash flow from operating activities (b) Reconciliation of cash and cash equivalents Cash and cash equivalents comprises: Cash on hand and at bank

(c) Terms and conditions

For the purposes of the Statement of cash flows, cash and cash equivalents includes cash on hand and at bank, deposits held at call with financial institutions, other short term, highly liquid investments with maturities of three months or less, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value and bank overdrafts.

HUB24 ANNUAL REPORT 2015 77

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**21.

COMMITMENTS
AND
CONTINGENCIES**

(a) Commitments

Future
minimum
rentals
payable
under
non-‐cancellable
operating
leases:

	CONSOLIDATED 2015 2014 $ $
Within 1 year After 1 year but not more than 5 years Total minimum lease payments	459,060 450,063 688,396 973,990
	1,147,456 1,424,053

**(b)

Contingencies**

		CONSOLIDATED 2015 2014 $ $
	Contingent assets and Liabilities Nil (2014 : Nil) Guarantees Rental bond Level 8, 20 Bridge St, Sydney Rental bond Level 1, 10 Bridge St, Sydney Security deposit, Level 31, 120 Collins St, Melbourne Rental bond Level 29, 55 Collins St, Melbourne Trust Company security deposit	- - 217,307 217,307
		36,557 -
		2,590 -
		- 116,600 - 330,000
		256,454 663,907

**22.

SHARE
BASED
PAYMENTS
PLAN**

**(a) Recognised

share-‐based
payment
expenses**

The
expense
recognised
from
equity-‐settled
share-‐based
payment
transactions
during
the
year
is
$902,513
(2014: $427,895).

The
share-‐based
payment
plans
are
described
below.

**(b)

Types
of
share-‐based
payment
plans**

Share
based
payment
plans
issued
during
the
year
ended
30
June
2015

78 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**22.

SHARE
BASED
PAYMENTS
PLAN ( CONT’D)**

*Share Option Plan - Executive*
Number of Options Issued	200,000
Expiry Date	17 October 2019
Exercise Price	The exercise price for each Option (which is payable immediately upon exercise)is$0.98per Option.
Vesting Conditions for All Options	Employment - Subject to a determination of the board of directors to the contrary, it is a condition of the exercise of an Option that the Option Holder is an employee of the company other than by reason of being a Good Leaver; and Share Price Hurdle - Options subject to, and vesting on, performance of a hurdle of a 60% share price increase (on the Exercise Price) in any consecutive 20 day period occurring at any time after the date that is 36 months after the date of issue of the Options and before the expiry of the term of the Options.
Voting	Option holders are not entitled to vote.
Dividends	The options do not provide any entitlement to dividends or other distributionspaid to ordinaryshareholders.
Specific Terms	Sale of the shares / Options will be restricted for a period of 12 months after their date of issue. However, the sale of a portion of shares to fund taxation obligations directly arising from the exercise of the Options will be permitted, subject to compliance with legal obligations in respect of the sale of Company shares. As at 30 June 2015, no options have lapsed since issue nor have any options vested.

HUB24 ANNUAL REPORT 2015 79

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**22.

SHARE
BASED
PAYMENTS
PLAN
(CONT’D)**

*Share Option Plan - Employees*
Number of Options Issued	760,000
Expiry Date	17 October 2019
Exercise Price	The exercise price for each Option (which is payable immediately upon exercise)is$0.98per Option.
Vesting Conditions for All Options	Employment - Subject to a determination of the board of directors to the contrary, it is a condition of the exercise of an Option that the Option Holder is an employee of the company other than by reason of being a Good Leaver; and Share Price Hurdle - Options subject to, and vesting on, performance of a hurdle of a 60% share price increase (on the Exercise Price) in any consecutive 20 day period occurring at any time after the date that is 36 months after the date of issue of the Options and before the expiry of the term of the Options.
Voting	Option holders are not entitled to vote.
Dividends	The options do not provide any entitlement to dividends or other distributionspaid to ordinaryshareholders.
Specific Terms	Sale of the shares / Options will be restricted for a period of 12 months after their date of issue. However, the sale of a portion of shares to fund taxation obligations directly arising from the exercise of the Options will be permitted, subject to compliance with legal obligations in respect of the sale of Company shares. As at 30 June 2015, no options have lapsed since issue nor have any options vested.

80 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**22.

SHARE
BASED
PAYMENTS
PLAN
(CONT’D)**

*Share Option Plan – Paragem Executives*
Number of Options Issued	1,000,000
Expiry Date	4 December 2019
Exercise Price	The exercise price for each Option (which is payable immediately upon exercise)is$1.156per Option.
Vesting Conditions for All Options	Employment - Subject to a determination of the board of directors to the contrary, it is a condition of the exercise of an Option that the Option Holder is an employee of the company other than by reason of being a Good Leaver; and Share Price Hurdle - (i) one third of the Options subject to, and vesting on, performance of a hurdle of a 20% share price increase (on the Exercise Price) in any consecutive 20 day period occurring at any time after the date that is 12 months after the date of issue of the Options and before the expiry of the term of the Options; (ii) a further one third of the Options subject to, and vesting on, a hurdle of a 40% share price increase (on the Exercise Price) in any consecutive 20 day period occurring at any time after the date that is 24 months after the date of issue of the Options and before the expiry of the term of the Options; and (iii) the remaining one third of the Options subject to, and vesting on, a hurdle of a 60% share price increase (on the Exercise Price) in any consecutive 20 day period occurring at any time after the date that is 36 months after the date of issue of the Options and before the expiry of the term of the Options. Performance Hurdle- Subject to the aggregate performance and satisfaction of the following KPI’s as determined by the Board in its sole discretion: (i) The Executives contribution to achievement of the Companys strategic and operational plan; (ii) Paragem revenue growth of greater than 15% er annum with accretive profit margins; and (iii) the compliance of the Executive with all material regulations and laws relevant to the business conducted bythegroup.
Voting	Option holders are not entitled to vote.
Dividends	The options do not provide any entitlement to dividends or other distributions paid to ordinary shareholders.
Specific Terms	Sale of the shares / Options will be restricted for a period of two years after their date of issue. However, the sale of a portion of shares to fund taxation obligations directly arising from the exercise of the Options will be permitted, subject to compliance with legal obligations in respect of the sale of Company shares. No options have lapsed since issue nor have anyoptions vested.

HUB24 ANNUAL REPORT 2015 81 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**22. SHARE

BASED
PAYMENTS
PLAN
(CONT’D)**

*Tax Exempt Share Plan - Employees*
Number of Shares Issued	44,000
Expiry Date	Nil
Issue Price	Shares were issued at$1.00
Vesting Conditions for All Shares	Interests held in the shares are not at risk of forfeiture. There is no condition or requirement that needs to be satisfied in order to acquire the shares.
Voting	Shareholders are entitled to vote.
Dividends	The shares provide entitlement to dividends or other distributions paid to ordinary shareholders.
Specific Terms	The Shares must not be sold, transferred or otherwise disposed of, or mortgaged, charged or otherwise encumbered, on or before the 3rdanniversary of the date employees acquired the Shares or the date they cease to be employed, whichever occurs first.

2. Share

based
payment
plans
issued
prior
to
1
July
2014

*Advisor Plan 1*
Number of Options Issued	625,000
Expiry Date	31 January2016
Exercise Price	The exercise price for each Option (which is payable immediately upon exercise)is$4.00per Option.
Vesting Conditions for All Options	Subject to a determination of the board of directors to the contrary, it is a condition of the exercise of an Option that the Option Holder is an employee of or engaged as a consultant to the company unless the Option Holder's employment or consultancy has ceased due to permanent disability,incapacity,illness,redundancyor death.
Voting	Option holders are not entitled to vote.
Dividends	The options do not provide any entitlement to dividends or other distributionspaid to ordinaryshareholders.
Specific Terms for 625,000 Options	Performance-based Component (375,000 options): 50% of the Performance based options became fully vested upon the divestment of the stockbroking business in February 2013 while the remaining 50% have lapsed. The full exercise price of $4.00 per option is payable upon exercise. Upfront Component (250,000 options): 50% of the Upfront Component options are available to be exercised at any time after grant date being 29 May 2012, while the remaining 50% have lapsed. The full exercise price of $4.00 per option will be payable upon exercise.

There
are
no
cash-‐settlement
alternatives.

82 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**22. SHARE

BASED
PAYMENTS
PLAN
(CONT’D)**

*Advisor Plan 2*
Number of Options Issued	187,500
Expiry Date	1 January2016
Exercise Price	The exercise price for each Option (which is payable immediately upon exercise)is$4.00per Option.
Vesting Conditions for All Options	Subject to a determination of the board of directors to the contrary, it is a condition of the exercise of an Option that the Option Holder is an employee of or engaged as a consultant to the company unless the Option Holder's employment or consultancy has ceased due to permanent disability,incapacity,illness,redundancyor death.
Voting	Option holders are not entitled to vote.
Dividends	The options do not provide any entitlement to dividends or other distributionspaid to ordinaryshareholders.
Specific Terms for 187,500 Options	Performance-based Options (187,500 options): 50% of the Performance based options became fully vested upon the divestment of the stockbroking business in February 2013 while the remaining 50% have lapsed. The full exercise price of $4.00 per option is payable upon exercise.

There
are
no
cash-‐settlement
alternatives.

Share
Option
Plan
(‘SOP’)
–
SOP
Plan
1

Number of Options Issued	190,000
Expiry Date	5 December 2015
Exercise Price	The exercise price for each Option (which is payable immediately upon exercise) is $3.80per Option.
Vesting Conditions for All Options	Subject to a determination of the board of directors to the contrary, it is a condition of the exercise of an Option that the Option Holder is an employee of or engaged as a consultant to the company unless the Option Holder's employment or consultancy has ceased due topermanent disability,incapacity,illness,redundancyor death.
Voting	Option holders are not entitled to vote.
Dividends	The options do not provide any entitlement to dividends or other distributions paid to ordinaryshareholders.
Specific Terms for 190,000 Options	The options are available to be exercised at any time after grant date being 5 December 2011. The Upfront-based options will vest in tranches of 30% / 30% / 40% over the period as follows: a) Tranche 1 (57,000 options) - the date being the 12 month anniversary of 5 December 2011 (‘SOP Plan 1 Relevant Date’) b) Tranche 2 (57,000 options) - the date being the 24 month anniversary of the SOP Plan 1 Relevant Date c) Tranche 3 (76,000 options) - the date being the 36 month anniversary of the SOP Plan 1 Relevant Date. As at 30 June 2015, 98,750 options have lapsed and the remaining 91,250 options have vested.

There
are
no
cash-‐settlement
alternatives.

HUB24 ANNUAL REPORT 2015 83

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**22. SHARE

BASED
PAYMENTS
PLAN
(CONT’D)**

*SOP Plan 2*
Number of Options Issued	75,000
Expiry Date	4 February2016
Exercise Price	The exercise price for each Option (which is payable immediately upon exercise) is $3.80per Option.
Vesting Conditions for All Options	Subject to a determination of the board of directors to the contrary, it is a condition of the exercise of an Option that the Option Holder is an employee of or engaged as a consultant to the company unless the Option Holder's employment or consultancy has ceased due topermanent disability,incapacity,illness,redundancyor death.
Voting	Option holders are not entitled to vote.
Dividends	The options do not provide any entitlement to dividends or other distributions paid to ordinaryshareholders.
Specific Terms for 75,000 Options	The options are available to be exercised at any time after grant date being 4 February 2012. The Upfront-based options will vest in tranches of 30% / 30% / 40% over the period as follows: a) Tranche 1 (22,500 options) - the date being the 12 month anniversary of 5 December 2011 (“SOP Plan 2 Relevant Date”); b) Tranche 2 (22,500 options) - the date being the 24 month anniversary of the SOP Plan 2 Relevant Date; c) Tranche 3 (30,000 options) - the date being the 36 month anniversary of the SOP Plan 2 Relevant Date. As at 30 June 2015, 53,125 options have lapsed and the remaining 21,875 options have vested.
There are no cash-settlement alternatives. *Share Option Plan - Employees*
Number of Options Issued		1,010,000
Expiry Date		14 October 2017
Exercise Price		The exercise price for each Option (which is payable immediately upon exercise)is$0.8424per Option.
Vesting Conditions for All Options		Employment - Subject to a determination of the board of directors to the contrary, it is a condition of the exercise of an Option that the Option Holder is an employee of the company other than by reason of being a Good Leaver; and Share Price Hurdle - The closing sale price of the Shares traded on the Australian Securities Exchange must have increased by at least 20% of the Exercise Price of the Options for each day in any 20 consecutive trading day period starting on or after the 1stanniversary of the date of issue of the Options.
Voting		Option holders are not entitled to vote.
Dividends		The options do not provide any entitlement to dividends or other distributions paid to ordinary shareholders.
Specific Terms		Shares issued in consequence of the exercise of any Options must not be sold, transferred or otherwise disposed of, or mortgaged, charged or otherwise encumbered, during the period of 12 months from the date of issue of the Shares without the prior approval of the Board. As at 30 June 2015, 170,000 options have lapsed since issue and the remaining840,000 options have vested.

84 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**22.

SHARE
BASED
PAYMENTS
PLAN ( CONT’D)**

*Share Option Plan - Executives*
Number of Options Issued	1,440,000
Expiry Date	8 August 2017
Exercise Price	The exercise price for each Option (which is payable immediately upon exercise)is$0.8438per Option.
Vesting Conditions for All Options	Employment - Subject to a determination of the board of directors to the contrary, it is a condition of the exercise of an Option that the Option Holder is an employee of the company other than by reason of being a Good Leaver; and Share Price Hurdle - (i) one third of the Options subject to, and vesting on, performance of a hurdle of a 20% share price increase (on the Exercise Price) in any consecutive 20 day period occurring at any time after the date that is 12 months after the date of issue of the Options and before the expiry of the term of the Options; (ii) a further one third of the Options subject to, and vesting on, a hurdle of a 40% share price increase (on the Exercise Price) in any consecutive 20 day period occurring at any time after the date that is 24 months after the date of issue of the Options and before the expiry of the term of the Options; and (iii) the remaining one third of the Options subject to, and vesting on, a hurdle of a 60% share price increase (on the Exercise Price) in any consecutive 20 day period occurring at any time after the date that is 36 months after the date of issue of the Options and before the expiry of the term of the Options.
Voting	Option holders are not entitled to vote.
Dividends	The options do not provide any entitlement to dividends or other distributionspaid to ordinaryshareholders.
Specific Terms	Sale of the shares / Options will be restricted for a period of two years after their date of issue. However, the sale of a portion of shares to fund taxation obligations directly arising from the exercise of the Options will be permitted, subject to compliance with legal obligations in respect of the sale of Company shares. As at 30 June 2015, no options have lapsed since issue and 480,000 options have vested. The remaining960,000 options have not vested.

HUB24 ANNUAL REPORT 2015 85

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**22.

SHARE
BASED
PAYMENTS
PLAN
(CONT’D)**

*Share Option Plan - Chairman*
Number of Options Issued	510,000
Expiry Date	8 August 2017
Exercise Price	The exercise price for each Option (which is payable immediately upon exercise)is$0.8438per Option.
Vesting Conditions for All Options	Employment – The options will not be subject to forfeiture on Mr Higgins ceasing to be Chairman of the Company; and Share Price Hurdle - (i) one third of the Options subject to, and vesting on, performance of a hurdle of a 30% share price increase (on the Exercise Price) in any consecutive 20 day period occurring at any time after the date that is 12 months after the date of issue of the Options and before the expiry of the term of the Options; (ii) a further one third of the Options subject to, and vesting on, a hurdle of a 60% share price increase (on the Exercise Price) in any consecutive 20 day period occurring at any time after the date that is 24 months after the date of issue of the Options and before the expiry of the term of the Options; and (iii) the remaining one third of the Options subject to, and vesting on, a hurdle of a 90% share price increase (on the Exercise Price) in any consecutive 20 day period occurring at any time after the date that is 36 months after the date of issue of the Options and before the expiry of the term of the Options.
Voting	Option holders are not entitled to vote.
Dividends	The options do not provide any entitlement to dividends or other distributionspaid to ordinaryshareholders.
Specific Terms	Sale of the shares / Options will be restricted for a period of two years after their date of issue. However, the sale of a portion of shares to fund taxation obligations directly arising from the exercise of the Options will be permitted, subject to compliance with legal obligations in respect of the sale of Company shares. As at 30 June 2015, no options have lapsed since issue and 170,000 options have vested. The remaining340,000 options have not vested.
*Tax Exempt Share Plan - Employees*
Number of Shares Issued	36,797
Expiry Date	Nil
Issue Price	Shares were issued at$0.8424
Vesting Conditions for All Shares	Interests held in the shares are not at risk of forfeiture. There is no condition or requirement that needs to be satisfied in order to acquire the shares.
Voting	Shareholders are entitled to vote.
Dividends	The shares provide entitlement to dividends or other distributions paid to ordinary shareholders.
Specific Terms	The Shares must not be sold, transferred or otherwise disposed of, or mortgaged, charged or otherwise encumbered, on or before the 3rdanniversary of the date employees acquired the Shares or the date they cease to be employed, whichever occurs first.

86 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**22.

SHARE
BASED
PAYMENTS
PLAN
(CONT’D)**

**(c) Summaries

of
options
granted**

The
following
table
illustrates
the
number
and
weighted
average
exercise
prices
(WAEP)
of,
and
movements
in,
share options
issued
during
the
year:

options issued during the year:
	2015 Number	2015 WAEP $	2014 Number	2014 WAEP $
Outstandingat the beginningof theyear	4,959,381	-	2,515,006	$4.88
Granted duringtheyear	1,960,000	$1.070	2,960,000	$0.84
Forfeited duringtheyear	-	-	173,125	$1.41
Exercised duringtheyear	-	-	-	-
Expired duringtheyear	1,650,006	$5.20	312,500	$4.80
Outstandingat end of theyear	5,269,375	-	4,959,381	-
Exercisable at the end of theyear	1,976,250	$1.65	2,143,881	$4.92

The
outstanding
balance
as
at
30
June
2015
is
represented
by:

406,250
options
over
ordinary
shares
with
an
exercise
price
of
$4.00
each,
fully
vested.
113,125
options
over
ordinary
shares
with
an
exercise
price
of
$3.80
each,
fully
vested.
840,000
options
over
ordinary
shares
with
an
exercise
price
of
$0.8424
each,
fully
vested.
1,950,000
options
over
ordinary
shares
with
an
exercise
price
of
$0.8438
each,
650,000
vested,
1,800,000
yet
to vest.
960,000
options
over
ordinary
shares
with
an
exercise
price
of
$0.98
each,
yet
to
vest.
1,000,000
options
over
ordinary
shares
with
an
exercise
price
of
$1.156
each,
yet
to
vest.

**(d)

Range
of
exercise
price
and
remaining
contractual
life**

91,250
options
have
an
exercise
price
of
$3.80
per
share
and
an
expiry
date
of
5
December
312,500
options
have
an
exercise
price
of
$4.00
per
share
and
an
expiry
date
of
31
January
21,875
options
have
an
exercise
price
of
$3.80
per
share
and
an
expiry
date
of
4
February
93,750
options
have
an
exercise
price
of
$4.00
per
share
and
an
expiry
date
of
1
January
1,950,000
options
have
an
exercise
price
of
$0.8438
per
share
and
an
expiry
date
of
8
August
6,488,591
rights
have
an
exercise
price
of
nil
and
an
expiry
date
of
30
September
840,000
options
have
an
exercise
price
of
$0.8424
per
share
and
an
expiry
date
of
14
October
960,000
options
have
an
exercise
price
of
$0.98
per
share
and
an
expiry
date
of
17
October
1,000,000
options
have
an
exercise
price
of
$1.156
per
share
and
an
expiry
date
of
4
December

**(e)

Option
pricing
model**

The
fair
value
of
all
equity-‐settled
options
is
estimated
as
at
the
date
of
grant
using
the
Black-‐Scholes-‐Merton
option formula.

HUB24 ANNUAL REPORT 2015 87

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**22.

SHARE
BASED
PAYMENTS
PLAN
(CONT’D)**

The
following
table
lists
the
inputs
to
the
models
used:

1. Share
based
payment
plans
issued
during
the
year
ended
30
June
2015

	SOP - Employees	SOP – Executives	SOP - Paragem
Dividend Yield(%)	-	-	-
Expected Volatility(%)	35	35	33
Risk-free Interest Rate(%)	2.5	2.5	2.5
Expected Life of Options(Months)	36	36	12-36
Option Exercise Price($)	0.98	0.98	1.156
Average Share Price at Measurement Date($)	0.89	0.89	0.89
Model Used	Black-Scholes	Black-Scholes	Black-Scholes

Share
based
payment
plans
issued
prior
to
1
July
2014

	Advisor Plan 1	Advisor Plan 2	Advisor Plan 3	Advisor Plan 4	SOP Plan 1	SOP Plan 2	SOP Employees	SOP Executives	SOP Chairman
Dividend Yield (%)	-	-	-	-	-	-	-	-	-
Expected Volatility(%)	50	50	35	35	45	45	80	80	80
Risk-free Interest Rate(%)	2.49	2.76	5.02	5.02	3.35	3.27	2.4	2.4	2.4
Expected Life of Options (Months)	44	48	45	43	48	48	26	28	28
Option Exercise Price($)	4.00	4.00	5.20	5.20	3.80	3.80	0.8424	0.8438	0.8438
Average Share Price at Measurement Date($)	2.04	2.36	4.40	4.00	3.04	3.04	0.91	0.91	0.91
Model Used	Black- Scholes	Black- Scholes	Black- Scholes	Black- Scholes	Black- Scholes	Black- Scholes	Black- Scholes	Black- Scholes	Black- Scholes

88 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**22.

SHARE
BASED
PAYMENTS
PLAN
(CONT’D)**

**(f) Contingent

consideration**

6,488,591
ordinary
shares
with
a
nil
exercise
price
which
are
yet
to
vest,
have
been
deferred
as
part
of
the contingent
consideration
for
the
Paragem
acquisition.
Refer
to
note
30
for
further
details.

_**Deferred

Share
Issue
–
Paragem
Vendor**_

*Deferred Share Issue – Paragem Vendor*
Number of Deferred Shares	2,162,864
Expiry Date	30 September 2017
Exercise Price	Nil.
Vesting Conditions for Deferred Shares	Subject to Paragem achieving the following by 30 September 2017 either (i) The New Funds Target of $1.25billion or (ii) The Platform revenue Target of $357.6k per month Peformance condition-Each Principal must not be a bad leaver when the shares vest.
Voting	Rights holders are not entitled to vote.
Dividends	The rights do not provide any entitlement to dividends or other distributionspaid to ordinaryshareholders.
Specific Terms	If at any time before 30 September 2017, the Company achieves the New Funds Target or the Platform Revenue Target the rights will vest and be paid within 20 business days of achievement. 50% of the shares to be issued will be escrowed until 30 September 2017 and an escrow agreement must be issued subject to the reasonable terms as required by HUB24. If Paragem does not achieve the New Funds Target, the shares to be issued will be adjusted to reflect the achieved percentage on September 30, 2017.
	No rights have vested or lapsed since beingissued.

No
rights
have
vested
or
lapsed
since
being
issued.

Cash
settlement
will
occur
if
the
necessary
shareholder
approvals
are
not
obtained
to
issue
shares
within
three months
of
the
payment
date.
The
cash
payment
being
equal
to
the
value
of
ahres
calculated
by
reference
to
the VWAP
of
HUB
shares
in
the
60
days
preceding
the
vesting
date.

*Deferred Share Issue – Paragem Advisor Equity Scheme*	*Deferred Share Issue – Paragem Advisor Equity Scheme*
Number of Deferred Shares	4,325,727
Expiry Date	30 September 2017
Exercise Price	Nil.
Vesting Conditions for Deferred Shares	Subject to Paragem achieving by 30 September 2017 either (i) The New Funds Target of $1.25billion or (ii) The Platform revenue Target of$357.6kper month
Voting	Rights holders are not entitled to vote.
Dividends	The rights do not provide any entitlement to dividends or other distributionspaid to ordinaryshareholders.
Specific Terms	If at any time before 30 September 2017, the Company achieves the New Funds Target or the Platform Revenue Target the rights will vest. No rights have vested or lapsed since beingissued.

HUB24 ANNUAL REPORT 2015 89 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**23.

SIGNIFICANT
EVENTS
AFTER
THE
REPORTING
DATE**

No
significant
matter
or
circumstance
has
arisen
since
30
June
2015
that
has
significantly
affected,
or
may
significantly affect
the
consolidated
entity’s
operations,
the
results
of
those
operations,
or
the
consolidated
entity’s
state
of
affairs in
future
financial
years.

**24.

LOSS
PER
SHARE**

The
following
reflects
the
income
and
share
data
used
in
the
calculations
of
basic
and
diluted
loss
per
share:

	CONSOLIDATED 2015 2014 $ $
Earnings per share from continuing operations Profit/(Loss) after income tax Profit /(Loss) after income tax attributable to the owners of HUB24 Ltd used in calculating basic and diluted earnings per share	(5,350,363) (7,867,963)
	(5,350,363) (7,867,963)
	Number Number
Weighted average number of ordinary shares used in calculating basic and diluted earmings per share Basic earnings per share Diluted earnings per share Earningsper share from discontinuing operations	48,414,345 50,931,123 Cents Cents (11.05) (15.45) (11.05) (15.45) $ $
Profit/(Loss) after income tax Profit /(Loss) after income tax attributable to the owners of HUB24 Ltd used in calculating basic and diluted earnings per share	(1,106,537) (679,825)
	(1,106,537) (679,825)
	Number Number
Weighted average number of ordinary shares used in calculating basic and diluted earmings per share	48,414,345 50,931,123 Cents Cents
Basic earnings per share Diluted earnings per share	(2.29) (1.33) (2.29) (1.33)

90 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**24.

LOSS
PER
SHARE
(CONT’D)**

24. LOSS PER SHARE (CONT’D)
Earningsper share for loss	$ $
Profit/(Loss) after income tax Profit/(Loss) after income tax attributable to the owners of HUB24 Ltd used in calculating basic and diluted earnings per share	(6,456,900) (8,547,788)
	(6,456,900) (8,547,788)
	Number Number
Weighted average number of ordinary shares used in calculating basic and diluted earnings per share	48,414,345 50,931,123 Cents Cents
Basic earnings per share Diluted earnings per share	(13.34) (16.78) (13.34) (16.78)

There
are
no
instruments
(e.g.,
share
options)
excluded
from
the
calculation
of
diluted
earnings
per
share
that
could potentially
dilute
basic
earnings
per
share
in
the
future
because
they
are
anti-‐dilutive
for
either
of
the
periods presented.

**25.

AUDITORS’
REMUNERATION**

25. AUDITORS’ REMUNERATION
	CONSOLIDATED 2015 2014 $ $
Amounts received or due and receivable by BDO: Audit and review of financial statements and other regulatory returns Tax and other services Total audit and other fees	116,383 92,500 103,149 64,802
	219,532 157,302

**26.

RELATED
PARTY
DISCLOSURES**

(a) Subsidiaries

The
consolidated
financial
statements
include
the
financial
statements
of
HUB24
Limited
and
the
Australian subsidiaries
listed
in
the
following
table.

(a) Subsidiaries The consolidated financial statements include the financial statements of HUB24 subsidiaries listed in the following table.	Limited and the Australian	Limited and the Australian
Name	% Equity Interest 2015 2014
Hub24 Custodial Services Limited (formerly ANZIEX Ltd)	100	100
HUB24 International Nominees Pty Ltd (formerly ANZIEX Nominees Ltd)	100	100
Firstfunds Ltd HUB24 Management Services Pty Ltd Investorfirst Securities Ltd HUB24 Nominees Pty Ltd (formerly Kardinia Nominees Pty Ltd) Researchfirst Pty Ltd	100 100 100 100 100	100 100 100 100 100
Captain Starlight Nominees Pty Ltd Findlay & Co Stockbrokers Ltd HUB24 Administration Pty Ltd	100 100 100	100 100 100

HUB24 ANNUAL REPORT 2015 91

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**26.

RELATED
PARTY
DISCLOSURES
(CONT’D)**


	HUB24 Services Pty Ltd 100 100
	Marketsplus Holdings Pty Ltd 100 100
	Marketsplus Australia Pty Ltd 100 100
	HTH Nominees Pty Ltd ** 100 100
	Paragem Pty Ltd 100 -

**
These
companies
are
no
longer
trading
and
there
is
no
intention
that
they
will
resume
activities.
The
process
to
de-‐ register
these
entities
has
commenced.

**(b) Ultimate

parent**

HUB24
Limited
is
the
ultimate
parent
entity
of
the
consolidated
entity.

**27.

PARENT
ENTITY
FINANCIAL
INFORMATION**

Set
out
below
is
the
supplementary
information
about
the
parent
entity.

Statement
of
Profit
or
Loss
and
Other
Comprehensive
Income

Statement of Profit or Loss and Other Comprehensive Income
	CONSOLIDATED
	Restated
	2015 2014
	$ $

Profit/(Loss) after income tax	(3,460,600) (10,072,319)
Total comprehensive income	(3,460,600) (10,072,319)
Statement of Financial Position Total current assets


	268,303 139,054
Total assets	29,255,578 21,372,060
Total current liabilities	1,055,715 74,147
Total liabilities	6,414,278 1,047,109
Equity
Issued capital	82,165,779 77,107,342
Reserves	2,190,522 1,332,009
Accumulated losses	(61,515,001) (58,114,400)
Total equity	22,841,300 20,324,951

**Contingent

liabilities**

The
parent
entity
had
no
contingent
liabilities
as
at
30
June
2015
and
30
June
2014.

Capital
commitments
-‐
Office
equipment

The
parent
entity
had
no
capital
commitments
as
at
30
June
2015
and
30
June
2014.

92 HUB24 ANNUAL REPORT 2015

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

27. PARENT ENTITY FINANCIAL INFORMATION (CONT’D)

Significant accounting policies

The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in Note 2, except for investments in subsidiaries which are accounted for at cost, less any impairment, in the parent entity.

28. KEY MANAGEMENT PERSONNEL

Key management personnel compensation

Key management personnel compensation
	CONSOLIDATED
	2015 2014
	$ $
Short term employment benefits	2,659,274 2,309,936
Post employment benefits	126,110 103,634
Share based payments	275,318 302,531
Total compensation	3,060,702 2,716,101

29. FINANCIAL INSTRUMENTS

The company’s principal financial instruments comprise cash, receivables, and payables. For the year ended 30 June 2015, the consolidated entity does not utilise derivatives, holds no debt and has not traded in financial instruments including derivatives other than listed and unlisted securities and options over listed and unlisted securities, where received as corporate fee income. The company has other financial assets and liabilities such as trade receivables and trade and other payables, which arise directly from its operations and are non-interest bearing.

Interest rate risk

The consolidated entity is not materially exposed to movements in short-term variable interest rates on cash and cash equivalents. All other financial assets and liabilities are non-interest bearing. The Directors believe a 50 basis point decrease is a reasonable sensitivity given current market conditions. A 100 basis point increase and a 50 basis point decrease in interest rates would increase/decrease profit and loss in the consolidated entity and the company by:

	CONSOLIDATED 2015 2014 $ $
Cash and cash equivalents at end of period 100 basis points increase in interest rate 50 basis points decrease in interest rate Net impact on loss after tax Loss for the year 100 basis points increase in interest rate 50 basis points decrease in interest rate	12,108,825 13,779,844
	121,088 137,798 (60,544) (68,899) (6,456,900) (8,547,788)
	(6,335,812) (8,409,989)
	(6,517,443) (8,616,686)

Liquidity risk

The table below reflects all contractually fixed pay-offs and receivables for settlement, resulting from recognised financial assets and liabilities. Cash flows are undiscounted. The remaining contractual maturities of the consolidated entity’s and parent entity’s financial liabilities are:

HUB24 ANNUAL REPORT 2015 93

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**29.

FINANCIAL
INSTRUMENTS
(CONT’D)**

29. FINANCIAL INSTRUMENTS (CONT’D)
	CONSOLIDATED 2015 2014 $ $
Not later than one month Later than 1 month not later than 3 months	875,974 415,375 1,100,849 229,271
Later than 3 months not later than 1 year	270,500 17,584
Later than 1year	- -
	2,247,323 662,230

_Maturity

Analysis
of
Financial
Assets
and
Liabilities_

The
risk
implied
from
the
values
shown
in
the
table
below
is
based
on
best
estimates
and
reflect
a
balanced
view
of cash
inflows
and
outflows.
Leasing
obligations,
trade
payables
and
other
financial
liabilities
mainly
originate
from
the financing
of
assets
used
in
our
ongoing
operations
such
as
office
equipment,
platform
development
and
investments in
working
capital
e.g.
receivables.
These
assets
are
considered
in
the
consolidated
entity’s
overall
liquidity
risk.

30 June 2015 Consolidated Financial assets: Cash and cash equivalents Trade and other receivables Consolidated Financial liabilities: Trade and other payables Net maturity	0-1 month 1-3 months 4-12 months 1-5 years Total 12,108,825 - - - 12,108,825 834,685 349,850 1,007,844 - 2,192,379
	12,943,510 349,850 1,007,844 - 14,301,204
	875,972 1,100,849 270,500 - 2,247,321
	875,972 1,100,849 270,500 - 2,247,321
	12,067,539 (750,999) 737,344 - 12,053,884

30 June 2014
Consolidated Financial assets:
Cash and cash equivalents	13,779,844 - - - 13,779,844
Trade and other receivables	184,093 111,672 110,221 - 405,986
	13,963,937 111,672 110,221 - 14,185,830
Consolidated Financial liabilities:
Trade and otherpayables	415,374 229,271 17,585 - 662,230
	415,374 229,271 17,585 - 662,230

Net maturity	13,548,563 (117,599) 92,636 - 13,523,600

The
consolidated
entity
monitors
rolling
forecasts
of
liquidity
reserves
on
the
basis
of
expected
cash
flow
and
aims
to maintain
a
minimum
equivalent
of
90
days
worth
of
operational
expenses
in
cash
reserves.

_Market

Risk_

The
consolidated
entity
is
not
materially
exposed
to
movements
in
market
prices.

The
net
fair
value
of
financial
assets
and
liabilities
approximates
their
carrying
values
and
the
methods
for
estimating fair
values
are
outlined
in
the
relevant
notes
to
the
financial
statements.

94 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**29.

FINANCIAL
INSTRUMENTS
(CONT’D)**

_Fair

value
Measurement_

The
consolidated
entity
has
a
number
of
financial
instruments
which
are
not
measured
at
fair
value
in
the statement
of
financial
position.
These
had
the
following
fair
values
at
30
June
2015:

statement of financial position. These had the following fair values at 30 June 2015:
	CONSOLIDATED $ $
Current Assets Rental bonds and guarantees Non-Current Assets Rental bonds and guarantees	Carrying Fair value
	amount amount

	- -


	256,454 256,454
	256,454 256,454

Due
to
their
short
term
nature,
the
carrying
amounts
of
current
trade
and
other
receivables
and
current
trade
and other
payables
is
assumed
to
approximate
their
fair
value.

**30.

BUSINESS
COMBINATIONS**

On
3
September
2014
HUB24
Limited
acquired
100%
of
the
issued
shares
in
Paragem
Pty
Ltd,
an
Australian
Financial Services
Licensee,
for
consideration
of
up
to
$8
million
in
cash
and
shares.
The
acquisition
is
consistent
with
HUB24 Limited’s
strategy
to
pursue
significant
growth
by
partnering
with
quality
financial
planning
groups,
stockbrokers
and accountants.

Details
of
the
purchase
consideration,
the
net
assets
acquired
and
goodwill
are
as
follows:

Purchase consideration Cash paid - Vendor Deferred consideration - Vendor Contingent consideration - Vendor Contingent consideration - Option holders Total purchase consideration Contingent consideration - Option holders Total consideration Vendor	Total	Total
	$

	1,008,673
	966,818
	2,000,000
	2,327,000
	6,302,491

	1,673,001

	7,975,492

Deferred
consideration
refers
to
cash
payments
of
$1
million
to
be
paid
on
3
September
2015
subject
to
warranty claims.

Contingent
consideration
refers
to
capped
earnout
consideration
of
up
to
$2
million,
subject
to
financial performance,
to
be
achieved
over
3
years
to
3
October
2017
and
paid
in
up
to
2,162,864
HUB24
ordinary
shares.

HUB24 ANNUAL REPORT 2015

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**30.

BUSINESS
COMBINATIONS
(CONT’D)**

_Option

holders_

Contingent
consideration
refers
to
capped
earnout
consideration
of
up
to
$4
million,
subject
to
financial performance,
to
be
achieved
over
3
years
to
3
October
2017
and
paid
in
up
to
4,325,727
HUB24
ordinary
shares.

The
amount
recognised
as
purchase
consideration
of
$2.327
million
reflects
the
value
attributed
to
the
value
of
the Paragem
option
scheme
in
place
at
the
date
of
acquisition
of
Paragem
Pty
Ltd.

The
amount
of
contingent
consideration
recognised
as
a
deferred
payment
in
shares
and
to
be
included
in
the Statement
of
Financial
Performance
over
the
three
years
to
30
September
2017
is
$1.673
million
($464,722
for
the year
ended
30
June
2015).
Refer
to
note
22
(f)
for
further
information
and
details
as
disclosed
in
contingent consideration
below.

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

Cash and cash equivalents Plant and Equipment Customer contracts and contract relationships Receivables Prepayments Payables Employee benefit liabilities Borrowings Net identifiable assets acquired Add: Goodwill	Fair value $ 104,139 16,582 604,244 25,885 28,278 (164,316) (9,143) (150,000) 455,669 5,846,822 6,302,491	Fair value $ 104,139 16,582 604,244 25,885 28,278 (164,316) (9,143) (150,000) 455,669 5,846,822 6,302,491

The
goodwill
is
attributable
to
value
expected
to
arise
after
the
company’s
acquisition
of
Paragem
Pty
Ltd.

_Acquisition

related
costs_

Acquisition
related
costs
of
$393,945
are
included
in
administrative
expenses
in
the
profit
or
loss.

_Contingent

consideration_

The
contingent
consideration
arrangement
relating
to
the
Vendor
and
Option
holders
requires
the
company
to
issue the
former
equity
owners
of
Paragem
Pty
Ltd
up
to
6,488,591
HUB24
ordinary
shares
subject
to
performance
criteria being
met
over
the
three
years
to
30
September
2017.
The
fair
value
of
the
contingent
consideration
arrangement
is estimated
to
be
$4.327
million
in
purchase
consideration
and
$1.673
million
in
share
based
payment
expense
which assumes
100%
of
performance
criteria
will
be
met.

In
the
circumstances
where
90%
of
performance
criteria
were
to
be
met,
the
following
impact
would
result:

Contingentpurchase consideration - Vendor	Decrease by	$200,000
Contingentpurchase consideration - Option holders	Decrease by	$117,200
Contingent consideration - Option holders - Share based payment expense	Decrease by	$282,893
Goodwill	Increase by	$317,200

96 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**30.

BUSINESS
COMBINATIONS
(CONT’D)**

Revenue
and
Profit
contribution

The
acquired
business
contributed
revenues
of
$20,235,321
and
EBITDA
of
$60,687
to
the
group
for
the
period
from 4
September
2014
to
30
June
2015.

_Movements

in
goodwill_

	CONSOLIDATED
	2015 2014
	$ $
Opening net book amount Acquisition of business Impairment charge Closing net book amount
	- -
	5,846,822 -
	- -
	5,846,822 -

**31.

PRIOR
PERIOD
ADJUSTMENTS
AND
RESTATEMENT
OF
COMPARATIVES**

The
research
and
development
grant
claimed
from
the
Australian
government
($414,137)
for
the
year
ended
30
June 2014,
was
classified
as
an
income
tax
benefit.
In
the
2015
financial
year,
it
has
been
determined
that
a
more
accurate application
of
the
relevant
accounting
standard
dictates
that
the
amount
of
the
research
and
development
grant claimed
in
relation
to
assets
of
the
Company,
be
recognised
against
the
development
costs
and
released
to
other income
at
the
same
rate
and
timing
of
the
amortisation
of
the
asset
to
which
the
grant
relates
(2014:
$289,361).

In
relation
to
the
above
prior
period
adjustment
and
restatement
of
comparatives,
the
extracts
for
those
items affected
are
below:

affected are below:
	Reported Restated
	2014 Adjustment 2014
	$ $ $
Statement of profit or loss and other comprehensive income

Interest and other income	535,391 289,361 824,752
Loss before income tax expense from continuing operations	(8,157,324) 289,361 (7,867,963)
Income tax benefit	414,137 (414,137) -
Loss after income tax from continuing operations	(7,743,187) (124,776) (7,867,963)

Loss after income tax from discontinued operations	(679,825) - (679,825)
Loss after income tax for theyear	(8,423,012) (124,776) (8,547,788)
Total comprehensive loss for the year	(8,423,012) (124,776) (8,547,788)

HUB24 ANNUAL REPORT 2015 97

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

**31.

PRIOR
PERIOD
ADJUSTMENTS
AND
RESTATEMENT
OF
COMPARATIVES
(CONT’D)**

	Reported Restated
	2014 Adjustment 2014
	$ $ $
Statement of financial position

ASSETS
Total Assets	21,676,954 - 21,676,954

LIABILITIES

Other current liabilities	- 74,147 74,147
Total Current Liabilities	2,051,883 74,147 2,126,030

Other non-current liabilities	- 972,962 972,962
Total Non-Current Liabilities	184,654 972,962 1,157,616

Total Liabilities	2,236,537 1,047,109 3,283,646

Net Assets	19,440,417 (1,047,109) 18,393,308

EQUITY
Accummulated losses	(59,822,932) (1,047,109) (60,870,041)

Total Equity	19,440,417 (1,047,109) 18,393,308

98 HUB24 ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS

DIRECTOR’S DECLARATION

In the opinion of the Directors:

(a) the financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations), the Corporations Regulations 2001 and other mandatory professional reporting requirements.
(b) the financial statements and notes comply with International Financial Reporting Standards as disclosed in Note 2.
(c) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
(d) this declaration has been made after receiving the declarations by the Chief Executive Officer and Chief Financial Officer required by section 295A of the Corporations Act 2001.

Signed in accordance with a resolution of directors.

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Bruce Higgins Chairman Sydney, 28 August 2015

HUB24 ANNUAL REPORT 2015 99

DIRECTOR’S DECLARATION

INDEPENDENT

AUDITOR’S REPORT

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Tel: +61 2 9251 4100 Level 11, 1 Margaret St Fax: +61 2 9240 9821 Sydney NSW 2000 www.bdo.com.au Australia

INDEPENDENT AUDITOR’S REPORT

To the members of HUB24 Limited

Report on the Financial Report

We have audited the accompanying financial report of HUB24 Limited, which comprises the consolidated statement of financial position as at 30 June 2015, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility 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 Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Stat ements, that the financial statements comply with International Financial Reporting Standards .

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation of the financial report that gives a true and fair view 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 company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

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

100 HUB24 ANNUAL REPORT 2015 INDPENDENT AUDITOR’S REPORT

INDEPENDENT AUDITOR’S REPORT

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Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of HUB24 Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.

Opinion

In our opinion:

(a) the financial report of HUB24 Limited is in accordance with the Corporations Act 2001 , including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001 ; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 2.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 26 to 38 of the directors’ report for the year ended 30 June 2015. 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.

Opinion

In our opinion, the Remuneration Report of HUB24 Limited for the year ended 30 June 2015 complies with section 300A of the Corporations Act 2001 .

BDO East Coast Partnership

==> picture [68 x 74] intentionally omitted <==

Paul Bull Partner

Sydney, 28 August 2015

HUB24 ANNUAL REPORT 2015 101

INDEPENDENT AUDITOR’S REPORT

ASX ADDITIONAL INFORMATION

Additional information required by the Australian Securities Exchange Limited and not shown elsewhere in this report is as follows. This information is current as at 25 August 2015.

DISTRIBUTION OF EQUITY SECURITIES

Ordinary share capital – 52,058,181 fully paid ordinary shares are held by 1,544 individual security holders. All issued ordinary shares carry one vote per share without restriction and carry the rights to dividends. The number of security holders, by size of holding, in each class are:

==> picture [494 x 119] intentionally omitted <==

----- Start of picture text -----

Fully paid ordinary shares - Holders Total Units %
Holdings Ranges
1-1,000 526 242,632 0.466
1,001-5,000 540 1,465,167 2.814
5,001-10,000 215 1,692,715 3.252
10,001-100,000 250 7,475,579 14.360
100,001-9,999,999,999 44 41,182,088 79.108
Totals 1,575 52,058,181 100.000
----- End of picture text -----

Holding less than a marketable parcel of shares, based on the closing price $1.53 on 25 August 2015, are 201 shareholders.

OPTIONS

5,269,375 options are held by option holders. Options do not carry a right to vote.

SUBSTANTIAL SHAREHOLDERS – QUOTED ORDINARY SECURITIES

	Number fully paid	%
THORNEY HOLDINGS PTY LTD & Related Parties	10,411,410	19.99
ACORN CAPITAL LTD	5,254,450	14.00
IAN LITSTER & Related Parties	3,588,751	7.60
CONTANGO ASSET MANAGEMENT LTD	2,616,828	5.03

102 HUB24 ANNUAL REPORT 2015 ASX ADDITIONAL INFORMATION

ASX ADDITIONAL INFORMATION

HUB24 LIMITED FULLY PAID ORDINARY SHARES

TOP 20 HOLDINGS AS AT 25-08-2015

==> picture [495 x 353] intentionally omitted <==

----- Start of picture text -----

Holder Name Balance at 25-08-2015 %
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 6,841,977 13.161
UBS NOMINEES PTY LTD 5,850,914 11.255
NATIONAL NOMINEES LIMITED 5,359,319 10.309
J P MORGAN NOMINEES AUSTRALIA LIMITED 3,186,224 6.129
CITICORP NOMINEES PTY LIMITED 1,665,177 3.203
LITSTER & ASSOCIATES PTY LTD 1,504,911 2.895
CITICORP NOMINEES PTY LIMITED 1,485,172 2.857
JASFORCE PTY LTD 1,402,001 2.697
FINOOK PTY LTD 1,400,000 2.693
RBC INVESTOR SERVICES AUSTRALIA NOMINEES P/L 1,330,638 2.560
WEALTHPLAN TECHNOLOGIES PTY LTD 1,247,545 2.400
SKYLYX PTY LTD 774,793 1.490
BNP PARIBAS NOMS PTY LTD 746,725 1.436
EGG AU PTY LTD 692,715 1.332
UBS WEALTH MANAGEMENT AUSTRALIA NOMINEES PTY LTD 576,635 1.109
MR BRUCE HIGGINS & MRS RUTH HIGGINS 566,811 1.089
LITSTER & ASSOCIATES PTY LTD 462,000 0.889
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2 454,894 0.875
JASFORCE PTY LTD 427,629 0.823
MATIMO PTY LTD 412,769 0.794
Total 36,388,849 69.887
Total Issued Capital 52,058,181
----- End of picture text -----

HUB24 ANNUAL REPORT 2015 103

ASX ADDITIONAL INFORMATION

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hub24.com.au

HUB24 ANNUAL REPORT 2015

104

AI assistant

HUB24 LIMITED — AGM Information 2015

65077_rns_2015-10-22_c81bd8d8-5ce5-46fa-8365-8e11e63c3942.pdf

Notice of Annual General Meeting

23 October 2015

TABLE OF CONTENTS

This document is important and requires your immediate attention.

NOTICE OF ANNUAL GENERAL MEETING

HUB24 LIMITED ACN 124 891 685

NOTICE OF ANNUAL GENERAL MEETING

Business

1. FINANCIAL STATEMENTS AND REPORTS

2. RESOLUTION 1: REMUNERATION REPORT

3. RESOLUTION 2: RE-ELECTION OF DIRECTOR – IAN LITSTER

4. RESOLUTION 3: RE-ELECTION OF DIRECTOR – HUGH ROBERTSON

5. RESOLUTION 4: ELECTION OF DIRECTOR – ANTHONY MCDONALD

6. RESOLUTION 5: APPROVAL OF ISSUE OF OPTIONS TO ANDREW ALCOCK

7. RESOLUTION 6: APPROVAL OF ISSUE OF SHARES TO ANDREW ALCOCK

8. RESOLUTION 7: INCREASING THE MAXIMUM AGGREGATE REMUNERATION OF NON-EXECUTIVE DIRECTORS

9. RESOLUTION 8: REFRESH THE CAPITAL RAISING CAPACITY THROUGH SHAREHOLDER RATIFICATION OF PRIOR PLACEMENTS UNDER THE 15% RULE

10. RESOLUTION 9: APPOINTMENT OF AUDITOR

Voting Exclusions

Explanatory Memorandum

Entitlement To Vote

Voting by Proxy

Voting By Attorney

Corporate Representatives

Scrutineer

By Order of the Board

HUB24 LIMITED ANNUAL GENERAL MEETING

EXPLANATORY MEMORANDUM

INTRODUCTION

Resolution 1: Remuneration Report

Resolution 2: Re-election of Director – Ian Litster

Profile of Mr Litster

Resolution 3: Re-election of Director – Hugh Robertson

Profile of Mr Robertson

Resolution 4: Election of Director – Anthony McDonald

Profile of Mr McDonald

Resolution 5: Approval of issue of options to Andrew Alcock

Terms of the Options

Resolution 6: Approval of issue of shares to Andrew Alcock

Resolution 7: Increase the Maximum Aggregate Remuneration of the Non-executive Directors

Resolution 8: Refresh the capital raising capacity through shareholder ratification of placement under the 15% rule

Resolution 9: Appointment of Auditor

GLOSSARY

ANNEXURE A

TERMS OF OPTIONS PROPOSED TO BE ISSUED TO ANDREW ALCOCK

Appendix A: HUB24 Limited and controlled entities

All Correspondence to:

YOUR VOTE IS IMPORTANT

TO VOTE BY COMPLETING THE PROXY FORM

STEP 1 APPOINTMENT OF PROXY

Appointment of a Second Proxy

STEP 3 SIGN THE FORM

STEP 4 LODGEMENT

Proxy forms may be lodged using the enclosed Reply Paid Envelope or:

STEP 2 VOTING DIRECTIONS TO YOUR PROXY

Proxy which is a Body Corporate

Attending the Meeting

Your Address

PROXY FORM

STEP 1 APPOINT A PROXY

STEP 2 VOTING DIRECTIONS

CORPORATE DIRECTORY

DIRECTORS

SHARE REGISTRY

Boardroom Pty Limited

AUDITORS

COMPANY SECRETARY

SOLICITORS

Minter Ellison

Minter Ellison

INTERNET ADDRESS

REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS

BANKERS

BDO East Coast Partnership

4

5

11

HUB24 LIMITED AGM Information 2015