Annual Report & Appendix 4E
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APPENDIX 4E (RULE 4.3A)
PRELIMINARY FINANCIAL REPORT RESULTS FOR ANNOUNCEMENT TO THE MARKET
Results for announcement to the Market
for the year ended 30 June 2023
1. Reporting period (item 1)
◼ Report for the financial year ended: 30 June 2023
◼ Previous corresponding period is the year months ended: 30 June 2022
2. Results for announcement to the market Movement Percentage Amount
% $’000
◼ Increase in revenues from ordinary activities (item 2.1) 5.88 to 76,930
◼ Decrease in profit from ordinary activities after tax
372.10 to (4,321)
attributable to members (item 2.2)
◼ Decrease in profit after tax attributable to members (item 2.3) 372.10 to (4,321)
2.1. Dividends (item 2.4) Amount per Franked amount
Security per security
₵ %
◼ Interim dividend nil n/a
◼ Final dividend nil n/a
◼ Record date for determining entitlements to the dividend (item 2.5) n/a
2.2. Brief explanation of any of the figures reported above necessary to enable the figures to be understood (item 2.6):
a. Revenue represents service revenue.
b. EBITDA of $902K, refer to section 5.3 Financial Review of the Directors’ Report for details.
3. Preliminary Final Report
3.1. Statement of comprehensive income (item 3):
Refer to Consolidated statement of profit or loss and other comprehensive income on page 21
3.2. Statement of financial position (item 4):
Refer to Consolidated statement of financial position on page 22
3.3. Statement of cash flows (item 5):
Refer to Consolidated statement of cash flows on page 24
3.4. Statement of changes in equity (item 6):
Refer to Consolidated statement of changes in equity on page 23
4. Dividends (item 7) and returns to shareholders including distributions and buy backs (item 14.2)
Nil.
4.1. Details of dividend or distribution reinvestment plans in operation are described below (item 8):
Not applicable
5. Ratios Previous
Current corresponding
Period Period
$’000 $’000
5.1. Financial Information relating to 5.2 and 5.3:
Earnings for the period attributable to owners of the parent (4,321) 1,588
Net assets 12,541 16,400
Less: Intangible assets (including net deferred tax balances) (24,061) (21,085)
Net tangible asset deficit (11,520) (4,685)
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APPENDIX 4E (RULE 4.3A)
PRELIMINARY FINANCIAL REPORT RESULTS FOR ANNOUNCEMENT TO THE MARKET
Results for announcement to the Market
for the year ended 30 June 2023
5 Ratios (cont.) Previous
Current corresponding
Period Period
No. No.
Fully paid ordinary shares 428,575,921 428,575,921
Weighted average number of ordinary shares outstanding during the period used in 428,575,917 428,575,917
calculation of basic earnings per share (EPS)
₵ ₵
5.2. Net tangible assets backing per share (item 9): (2.69) (1.09)
5.3. Earnings per share attributable to owners of the parent (item 14.1): (1.01) 0.37
As at 30 June 2023, the Group has 20,000,000 unissued shares under options (2022: 30,000,000) and 11,000,000 performance
shares on issue (30 June 2022: 11,000,000). Of the original 30,000,000 options granted and issued, 10,000,000 options have
vested and 10,000,000 have expired. No performance rights have vested. Unvested options and performance rights are not
considered to be dilutive. In addition, the Group does not report diluted earnings per share on losses generated by the Group.
During the 2023 year, the Group's unissued shares under option and performance shares were anti-dilutive (2022: 0.37 cents per
share).
6. Details of entities over which control has been gained or lost during the period (item 10):
6.1. Control gained over entities
◼ Name of entities (item 10.1) Bushby & Co. Pty Ltd
◼ Date(s) of gain of control (item 10.2) 22 July 2022
6.2. Loss of control of entities
◼ Name of entities (item 10.1) Nil
◼ Date(s) of loss of control (item 10.2)
6.3. Contribution to consolidated profit (loss) from ordinary activities after tax by $429 contribution to EBITDA
the controlled entities to the date(s) in the current period when control was
($487K) contribution to net loss before tax
gained / lost (item 10.3).
6.4. Profit (loss) from ordinary activities after tax of the controlled entities for the N/A
whole of the previous corresponding period (item 10.3)
7. Details of associates and joint venture (item 11):
◼ Name of entities (item 11.1) Nil
◼ Percentage holding in each of these entities (item 11.2) n/a
Previous
corresponding
Current period Period
$ $
◼ Aggregate share of profits (losses) of these entities (item 11.3) N/A N/A
8. Any other significant information needed by an investor to make an informed assessment of the entity’s financial
performance and financial position (item 12):
Refer to Operating and financial review on page 3 of the accompanying Annual Report.
9. The financial information provided in the Appendix 4E is based on the annual report (attached), which has been prepared
in accordance with Australian Accounting Standards (item 13).
10. A commentary on the results for the period (item 14):
Refer to Operating and financial review on page 3 of the accompanying Annual Report.
11. The preliminary final report has been prepared based on the 30 June 2023 accounts which have been audited by an
independent audit firm in accordance with the requirements of section 302 of the Corporations Act 2001 (Cth). (item 15)
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ABN 52 118 913 232
and its controlled entities
ANNUAL REPORT
30 June 2023
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Corporate directory
Current Directors
Andrew Jensen Executive Chairman and Chief Operating Officer
Geoff Lucas Managing Director and CEO
Paul Niardone Executive Director
Adam Davey Non-executive Director
Company Secretary
Stuart Usher
Registered Office and Head Office Share Registry
Street: 68 Milligan Street Advanced Share Registry Limited
PERTH WA 6000 Street + Postal: 110 Stirling Highway
Postal: PO Box 7768 Nedlands WA 6009
Cloisters Square WA 6850 Telephone: 1300 113 258 (within Australia)
Telephone: +61 (0)8 9204 7955 +61 (0)8 9389 8033 (International)
Facsimile: +61 (0)8 9204 7956 Facsimile: +61 (0)8 6370 4203
Email: info@theagencygroup.com.au Email: admin@advancedshare.com.au
Website: theagencygroup.com.au Website: www.advancedshare.com.au
Auditors Securities Exchange
Hall Chadwick WA Audit Pty Ltd Australian Securities Exchange
Street: 283 Rokeby Road Street: Level 40, Central Park
Subiaco WA 6008 152-158 St Georges Terrace
Telephone: +61 (0)8 9426 0666 Perth WA 6000
Telephone: 131 ASX (131 279) (within Australia)
Solicitors Telephone: +61 (0)2 9338 0000
Steinepreis Paganin Facsimile: +61 (0)2 9227 0885
Street: Level 4, The Read Buildings Website: www.asx.com.au
16 Milligan Street ASX Code: AU1
Perth WA 6000
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ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Contents
◼ Chairman’s and Managing Director’s letter ................................................................................................................................ 1
◼ Directors' report .......................................................................................................................................................................... 3
◼ Remuneration report ................................................................................................................................................................ 10
◼ Auditor's independence declaration ......................................................................................................................................... 20
◼ Consolidated statement of profit or loss and other comprehensive income............................................................................ 21
◼ Consolidated statement of financial position .......................................................................................................................... 22
◼ Consolidated statement of changes in equity ........................................................................................................................... 23
◼ Consolidated statement of cash flows ...................................................................................................................................... 24
◼ Notes to the consolidated financial statements ....................................................................................................................... 25
◼ Directors' declaration ................................................................................................................................................................ 72
◼ Independent auditor's report.................................................................................................................................................... 73
◼ Corporate governance statement ............................................................................................................................................. 79
◼ Additional Information for Listed Public Companies ................................................................................................................. 80
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THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Chairman’s and Managing Director’s letter
Dear Shareholders,
Growing National Market Share underpins strong future of The Agency.
FY2023 was a challenging year for many in the Australian Real Estate industry. Pleasingly, The Agency achieved its
fifth straight year of growth in the number of properties sold whereby The Agency exchanged 5,734 properties
(+0.4% to FY2022 exchanged properties of 5,709). This growth was achieved in an environment where National
Market transactions decreased by 20.3%1. Our achievement was a significant outperformance to the market
volumes that were impacted by a range of negative external factors, most notably rising interest rates and the
adverse impact on home values across the country. This market outperformance resulted in an increase in national
market share where The Agency sold 1.23% of all residential property transactions across Australia.
Resilience as our brand continues to grow.
The difficult market conditions predominantly impacted the east coast markets and resulted in a large number of
lower performing agents leaving the industry. While The Agency was not immune to this industry trend, The Agency
continued to recruit high performing agents across the country and increased our average agent productivity in a
declining market. As at 30 June 2023, The Agency had 399 agents nationally, a net increase of +6 from 30 June 2022.
Agents remain attracted to our direct engagement model which has created a more responsive, efficient and
effective business, removing the typical franchise ‘middle layer’. Our direct engagement model alleviates our agents
from the distractions of managing office overheads and the administrative burden associated with operating a
franchise and instead, allows agents to focus on the high dollar value activities like servicing their customers.
We continue to deliver on our commitment to expand our market presence and increase depth in the markets
already serviced.
In July 2022, The Agency announced and settled the acquisition of the Bushby Property Group located in Launceston,
Tasmania which represents The Agency’s entry into its sixth state and territory. We are pleased with the initial
performance from this business across FY2023 and expect the groundwork undertaken as part of the integration will
underpin our Tasmanian growth in FY2024 and beyond.
In November 2022, The Agency announced a strategic alliance with MDC Trilogy to accelerate market share growth
across new and complementary geographical areas. The alliance is underpinned by a services agreement where The
Agency manages property management assets purchased and owned by MDC Trilogy, and facilitates all sales agents
and team members of businesses purchased by MDC Trilogy to join The Agency. Since the alliance announcement
in November, MDC Trilogy have deployed near $20m in purchasing rent roll assets across NSW and Queensland.
These purchased rent roll assets comprise over 3,000 properties under management which are now managed by
The Agency. MDC Trilogy intends to continue to purchase rent rolls across its targeted areas and is in late-stage due
diligence on a number of further opportunities that will be managed by The Agency.
Across FY2023, as part of the MDC Trilogy alliance, The Agency opened premises in Rockhampton in December 2022,
along with an enhanced presence across Inner West Sydney with the agents and office infrastructure of Devine Real
Estate Group joining The Agency in May 2023.
The purchase of Bushby Property Group and the recommencement of property management service line in Western
Australia underpinned a strong increase in the number of properties under management to 5,018 properties at 30
June 2023 (up from 3,469 at 30 June 2022). Across the financial year, we collected above $135m of rent on behalf
of our landlords which assisted the strong revenue growth from our property management portfolio, which
combined with cost and scale efficiencies being achieved with the MDC Trilogy 3,000+ properties under
management is delivering a meaningful increase in earnings contribution.
1
CoreLogic Monthly Economist pack – July 2023
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ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
As part of the completion of Bushby Property Group, we extended our primary banking facility with Macquarie Bank
until July 2025, and as approved at our Annual General Meeting, the Convertible Note issued by Peters Investments
expiry date was extended until Jan 2026.
Looking ahead to FY2024, the management team continues to focus on delivery of a number of strategic objectives
which will drive continued growth in market share and further The Agency reach across the Australian residential
real estate market. The continued focus on the growth of high performing agents, utilisation of appropriate
technology for a superior agent experience and continued execution of the MDC Trilogy alliance to drive economies
of scale, are key priorities that will propel our business forward.
We’re proud of our achievements but there’s still enormous opportunity for further scale and growth.
The investments undertaken in FY2023 which have contributed to an EBITDA loss will generate returns for many
years to come. The second half of FY23 saw a return to sales commissions growth and improved operational
performance from the 1H growth initiatives underpinned a reduction in the second half of FY2023 operating
expenses. The second half FY2023 cost of doing business materially reduced to 32.6% of revenue from 35.9% in the
first half. As a result, second half EBITDA loss reduced significantly from $950K EBITDA (Pre AASB16) loss in the first
half, to $350K EBITDA (Pre AASB16) loss in the second half.
Our business has been built for scale and the management team continue to take a long-term view ensuring the
business can continue to deliver robust, scalable and profitable growth as the business continues to win further
market share in what is a highly fragmented market. We remain committed to continuing to deliver market share
growth and delivery of exceptional results and service to our customers. Our total commissions of $95.4 million is
just a fraction of the $6.0 billion2 total Australian residential real estate commissions paid by vendors in FY2023
across Australia. We believe our contemporary business model, national reach, culture, and commitment to
excellence in customer service means we are well positioned to expand our share of this $6.0 billion residential sales
commissions market.
On behalf of the Board and the management team, we would like to thank shareholders for their support and loyalty
during the financial year, and look forward to your continued support throughout FY2024.
Finally, we would like to thank our team members and partners for their unwavering support and commitment to
our company and its future prosperity.
ANDREW JENSEN GEOFF LUCAS
Chairman Managing Director and CEO
2
Assessed at 1.50% Average Commission Rate on FY23 Gross Sales Volume of $400.9Bn (CoreLogic July 2023 Monthly Housing Chart Pack)
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THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Directors' report
Your directors present their report on the Group, consisting of The Agency Group Australia Ltd (The Agency or the Company)
and its controlled entities (collectively the Group), for the financial year ended 30 June 2023 (FY2023).
The Agency is listed on the Australian Securities Exchange (ASX:AU1).
1. Directors
The names of Directors in office at any time during or since the end of the year are:
◼ Andrew Jensen Executive Chairman and Chief Operating Officer
◼ Geoff Lucas Managing Director and CEO
◼ Paul Niardone Executive Director
◼ Adam Davey Non-Executive Director
(collectively the Directors or the Board)
Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. For additional
information of Directors including details of the qualifications of Directors, please refer to paragraph 6 of this Directors Report.
2. Company secretary
The following person held the position of Company Secretary at the end of the financial year:
◼ Stuart Usher
Qualifications B.Bus, CPA, Grad Dip CSP, MBA, FGIA, ACIS
Experience Mr Usher is a CPA and Chartered Company Secretary with 25 years of extensive experience in
the management and corporate affairs of public listed companies. He holds an MBA from the
University of Western Australia and has extensive experience across many industries focusing on
Corporate & Financial Management, Strategy & Planning, Mergers & Acquisitions, and Investor
Relations & Corporate Governance.
3. Dividends paid or recommended
There were no dividends paid or recommended during the financial year ended 30 June 2023.
4. Significant Changes in the state of affairs
There have been no significant changes in the state of affairs of the Group during the financial year ended 30 June 2023 other
than disclosed elsewhere in this Annual Report.
5. Operating and financial review
5.1. Nature of Operations Principal Activities
The principal activity of the Group for the financial year was real estate services and related activities. There were no
significant changes in the nature of the Group’s principal activities during the financial year.
5.2. Operations Review
a. Key Metrics
ANNUAL GROUP REVENUE ($M) GCI ($M)
100 120
80 100
102.5
76.9 80 95.4
60 72.7
80.7
58.4 60
40
41.9 40 47.9
20 28.3 37.9
20
0 0
FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23
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ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Directors' report
NUMBER OF EXCHANGES NATIONAL MARKET SHARE3
7,000 1.40%
6,000 1.20%
1.23%
5,000 5,709 5,734 1.00%
4,000 4,964 0.80% 0.98%
0.87%
3,000 0.60% 0.76%
3,147 0.63%
2,000 2,409 0.40%
1,000 0.20%
0 0.00%
FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23
Throughout FY2023, The Agency continued to deliver against its objectives and achieved growth in Number of Exchanges
and Annual Group Revenue. The results continue the year-on-year growth that has been achieved for the past five years
despite a range of negative external factors, most notably rising interest rates and the adverse impact on home values
across the country.
During FY2023, The Agency further grew its presence nationally and now covers six states and territories following the
acquisition of Bushby Property Group in Tasmania in July 2022.1
For FY2023, The Agency reported Combined Group Revenue of $76.9 million, a 6% increase year-on-year (FY2022: $72.7
million).
The Agency recorded 5,734 properties sold during FY2023, a 0.4% increase from FY2022 (5,709 properties sold in FY22) and
was significantly above industry performance as National Transaction volumes fell 20.3% over the same 12-month period.2
A 7% reduction in combined Gross Commission Income (GCI) to $95.4 million (FY2022: $102.5 million) was the result of a
reduction in average selling price across the East Coast and change in state mix of sales that resulted in a 10% reduction
in Average Selling Price and a reduction in Gross Value of Properties sold (FY2023 $5.3 billion, FY2022: $5.9 billion).
As at 30 June 2023, The Agency consisted of 399 agents, a net increase of 6 agents throughout FY2023 (30 June 2022: 393
Agents).
The Agency reported a total portfolio of 5,018 Properties under Management (PuM) as at 30 June 2023. Management have
valued this property management portfolio at $26.27 million based on a blended valuation multiple of 3.35x on Q4 FY2023
annualised property management fee revenue. Under International Financial Reporting Standards, the value of internally
generated PuM is not held on the balance sheet as an intangible asset. As a result of this, there is significant shareholder
wealth held off balance sheet, as only $11.30 million of the $26.27 million Property Management value is held on balance
sheet.
During the financial year, as part of a mortgage broker departing The Agency mortgage business, The Agency sold a portion
of its Mortgage trail book consisting of the departing brokers trail book, client list and database to the departing broker. As
a result of this reduced business size, the number of home loan approvals within the Mortgage Solutions Australia (MSA)
business in FY2023 reduced to 228 loans, down 51% from FY2022 (464 approvals).
As a result of improved pricing focus in our Western Australian conveyancing business, Landmark Settlements, a higher
average revenue per transaction during the financial year underpinned settlement fee revenue growth of 9% during the
year, despite a slight reduction in the number of settlement deals which decreased from 1,803 in FY2022 to 1,776 in FY2023,
a decrease of 2%.
1 Refer to ASX announcement dated 12 July 2022
2 Refer to CoreLogic Monthly Housing Chart Pack July 2023
3 National Market Share Source: The Agency # of Sales / Estimated Properties sold per CoreLogic Economist Park (Jul 2023)
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THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Directors' report
5.3. Financial Review
The financial statements have been prepared on a going concern basis, which contemplates the continuity of normal
business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business.
a. Non-IFRS information
The Company reports EBITDA in addition to the Profit after Tax. EBITDA is a financial measure which is not prescribed
by Australian Accounting Standards (AAS) and represents the statutory profit under AAS adjusted for specific non-cash
and significant items. The Company’s Directors consider EBITDA to reflect the core earnings of the consolidated entity.
A reconciliation between EBITDA and profit after income tax for the year ended 30 June 2023 is noted below.
EBITDA calculation FY2023 FY2022 Change Change
$’000 $’000 $’000 %
Profit / (loss) after tax (4,321) 1,588 -5,909 -372%
Income tax benefit (1,086) (1,127)
Profit / (loss) before tax (5,407) 461 -5,868 -1,273%
Interest income (48) (37)
Depreciation and amortisation 6,469 5,440
Embedded derivative non-cash financing (gains) / costs3 (1,351) (1,140)
Impairment (recovery) / expense - (400)
Interest and finance costs 1,511 816
(Loss) / gain financial assets at FVPL 71 (123)
Profit on sale of assets4 and lease exit (1,590) (5)
Disposal of assets costs 76 -
Acquisition of business costs 84 -
Legal costs non-recurring5 625 -
Share-based payments expense 462 675
EBITDA 902 5,687 -4,785 -84%
AASB 16 Leases impact6 (2,199) (1,835)
EBITDA (pre-AASB16 Leases impact) (1,297) 3,852 -5,149 -134%
Other key metrics:
◼ GCI 95,386 102,486 -7,100 -7%
◼ Gross profit 24,471 25,224 - 753 -3%
For FY2023 the Group recorded EBITDA of $0.90 million (FY2022: $5.69 million). After adjusting for the AAB16 Leases
impact, underlying EBITDA for FY2023 was $1.30 million loss. This represents a $5.15 million decrease in underlying EBITDA.
The Group generated a net loss after tax for the year of $4.32 million (FY2022: $1.59 million profit). This was primarily
impacted by interest and finance costs ($1.51 million), depreciation and amortisation ($6.47 million), and non-recurring
legal costs ($0.63 milion). These items were partially offset by profit on sale of assets and lease exit ($1.59 million) and
embedded derivative non-cash financing gains ($1.35 million).
3 Refer to note 2.2 of the financial statements
4 FY2023 Gain on sale of assets included a gain on the sale of the trail book of $1.579 million as disclosed in note 11.2.
5 Legal costs associated with The Agency’s intellectual property action against the company H.A.S. Real Estate, the registered owner of The
North Agency.
6 AASB 16 Leases was adopted from 1 July 2019. The above demonstrates finance costs and amortisation, which prior to the adoption AASB 16
was recognised as rent expense.
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ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Directors' report
The net assets of the Group have decreased from 30 June 2022 by $3.86 million to $12.54 million at 30 June 2023 (30 June
2022: $16.40 million). Importantly, due to accounting standards, the value of internally generated property management
assets is not recorded on the balance sheet. Management have valued the property management portfolio at $26.27 million
based on a blended valuation multiple of 3.35x on Q4 FY2023 annualised property management fee revenue. As a result of
this, there is significant shareholder wealth held off balance sheet, as only $11.30 million of the $26.27 million Property
Management value is held on balance sheet. Including this off-balance sheet value adjusted net assets of The Agency have
increased $0.07 million to $29.15 million at 30 June 2023 (30 June 2022: $29.08 million)
The Group's cash and cash equivalents decreased from 30 June 2022 by $3.58 million to $4.63 million at 30 June 2023
(2022: $8.22 million), in part due to the purchase of Bushby & Co. Pty Ltd in July 2022.
5.4. Key Business Risks
The Group is subject to various risk factors. Some of these are specific to its business activities while others are of a more
general nature. Individually, or in combination, these risk factors may affect the future operating and financial performance
of the Group.
a. People
The Agency operates in a highly competitive environment and there is a risk that The Agency may not be able to recruit or
retain quality staff to achieve its operational objectives or mitigate succession risk. The Agency mitigates this risk through
structured approach to recruitment, as well as providing competitive remuneration and incentive programs to attract and
retain high performing talent across Sales, Property Management, Mortgage Broking, Support staff, and corporate
functions.
b. Australian residential real estate market
The Agency generates the majority of revenue from the Australian residential real estate market. Revenue is generated in
various forms such as Gross Commission Income (GCI) which is produced on the sale of properties; property management
commissions is received on collecting rent and associated activities; and commission payments on the arranging of
mortgages. The risk of a reduction in sales transaction volumes or prices is a material risk for The Agency and could result
from general economic conditions and factors beyond the Group’s control such as housing affordability, employment,
interest rates, domestic investor growth and demand, foreign investment and consumer confidence. As different states in
Australia have different economic conditions at any one time, The Agency partly mitigates this risk through geographical
diversification operating by operating in 6 states and territories across Australia.
c. Reputation and brand
The Agency’s reputation and brand may be impacted from both a customer perspective and an investor perspective. The
Agency is a young, dynamic brand which is disrupting the existing status quo of selling real estate in Australia. The Agency
continues to invest in our customer proposition, using technology, training and processes to enhance our customers and
agents experience to ensure a solid scalable platform for growth.
d. IT Systems and cyber risks
The Agency’s IT framework is a combination of proprietary systems and Software as a Service Providers. The Agency
believes that the combination of these systems provides a competitive advantage and a foundation for scalable platform
for growth. The Agency’s operations are dependent on these systems which individually or collectively could fail or
deliberately targeted which could lead to interruption of service, corruption of data or theft of personal data. The Agency
mitigates against these risks through a combination of internal and outsourced IT professionals who maintain both
preventative and detective processes and implements controls, including staff training to reduce the risk.
e. Impact of COVID 19 Coronavirus
The COVID-19 Coronavirus global pandemic has continued to cause significant disruption and restrictions to the
movement of people and goods throughout the world. During the pandemic, The Agency implemented prudent
business continuity measures to see it through which allowed it to continue to operate nationally and during the period
has reaped the benefits of a rebounding real estate market.
5.5. Environmental Regulations
The Group's operations are not subject to any significant environmental regulations in the jurisdictions it operates in.
5.6. Events Subsequent to Reporting Date
There are no other significant after balance date events that are not covered in this Directors' Report or within the financial
statements as disclosed in note 15 Events subsequent to reporting date on page 60.
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THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Directors' report
5.7. Future Developments, Prospects and Business Strategies
The Agency continues to focus on growth opportunities and attracting real estate agents to its contemporary direct
engagement business model. By contracting directly with agents, The Agency removes the ‘middle layer’ which has created
a more responsive, efficient and effective model for our agents as they are alleviated from the distractions and the
administrative burden associated with operating an office.
Future growth will come from continued attraction of agents and growth in agent numbers across existing geographical
regions, as well as further expansion across new regions in Australia. Further growth is expected from increased efficiencies
driven by economies of scale and utilisation of best practice technological advances to ensure agents can maximise their
productivity. The highly fragmented structure of the industry presents an opportunity for consolidation of smaller
independents and franchisees looking to simplify their business which aligns with the strengths of our business model.
The Agency continues to assess a variety of strategic partnerships and adjacent revenue opportunities closely related to
the activities of real estate sales transactions in addition to the existing property management, mortgage broking and
conveyancing businesses already undertaken.
6. Information relating to the Directors
◼ Mr Andrew Jensen Executive Chairman and Chief Operating Officer
Non-independent
Qualifications FIPA, MAICD
Experience Mr Jensen previously held the position of Chief Financial Officer for International and leading
Australian Companies, which will greatly assist the Company in its next phase of national
growth under the two prominent brands of The Agency and Sell Lease Property.
Mr Jensen has strong commercial, strategic, and M&A experience and has financially led
companies engaged in various fields including real estate, financial services, tele-
communications, and the franchising sectors both in Australia and Internationally.
He is an accomplished CFO with over 18 years’ experience in senior finance and management
roles. Previously, Mr Jensen was the CFO and Director of Australasia’s largest real estate group
Ray White, with over $20 billion in annual sales and one of Australia’s largest independent
mortgage broking businesses Loan Market. He has also been the CFO of VGC Food Group Pty
Ltd, a private diversified manufacturing and franchising group.
Mr Jensen was also CFO and COO of Digicel PNG (Papua New Guinea) part of Digicel Group
Limited (Digicel), one of the South Pacific’s largest and most successful telecommunications
companies. He is also a fellow of the Institute of Public Accountants and member of the
Australian Institute of Company Directors.
Interest in Company equity Indirect 1,903,492 Ordinary Shares
Directorships held in other Tombador Iron Limited (resigned 25 September 2020)
listed entities during the
prior three years
◼ Mr Geoff Lucas Managing Director and Chief Executive Officer
Qualifications CPA, FAICD
B
Experience Mr Lucas is one of the most highly regarded executives in the Australian property industry, with
a distinguished track record of leadership in a number of corporate positions for an ASX-listed
real estate group, as well as other major public companies.
With more than 25 years’ commercial experience, Mr Lucas has successfully grown several
companies and uses his background in accounting and finance to develop and execute
strategies for growth.
From 2008-2016 Mr Lucas served as the Chief Operating Officer of McGrath Real Estate (ASX:
MEA), later serving as Chief Executive Officer of the company. During this time, he built deep
connections within the real estate services industry, in addition to a keen understanding of
how to build operations which foster and grow shareholder value.
Prior to this, Mr Lucas served as the CEO of ASX-listed financial services group Credit Corp
Group (ASX: CCP) from 2004 to 2008.
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ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Directors' report
Interest in Company equity Indirect 1,657,717 Shares
20,000,000 Options
Directorships held in other None
listed entities during the
prior three years prior
◼ Mr Paul Niardone Executive Director
Non-independent
Qualifications MBA, BA
B
Experience Mr Niardone was one of the founders of The Agency and until January 2022 was the
Managing Director but has opted to take up a more operational role as an Executive Director.
He was formerly executive director and founder of Professional Public Relations (WA), the
largest PR and communications firm in the State until he sold the business to WPP.
Mr Niardone has experience in marketing and strategic planning for clients in both
Government and the private sector. With a degree in Politics and Industrial Relations and a
Master’s in Business Administration, he started his career in the Department of Cabinet and
Parliamentary Services.
He was appointed inaugural Manager of the Peel Region Business Enterprise Centre, and
was then appointed as the first Marketing Manager for the entire Enterprise Centre Network
comprising 36 centres throughout WA.
Mr Niardone's marketing skills were recognised by Westpac in its decision to appoint him as
one of the first Business Banking Managers in Australia without a banking background.
His career to date has provided him with a unique opportunity to gain experience, insights
and contacts in a wide range of industries at the CEO and Board level.
He has sat on the boards of a number of public and private companies and not for profit
organisations.
Interest in Company equity Direct 8,000,000 Class A Performance Shares
3,000,000 Class B Performance Shares
Indirect 3,187,008 Ordinary Shares
Directorships held in other None
listed entities during the
prior three years prior
◼ Mr Adam Davey Non-executive Director
Non-independent
Experience Mr Davey is a Director, Director – Wealth Management, Canaccord Genuity Financial
Limited.
Mr Davey's expertise spans over 35 years and includes capital raising (both private and
public), mergers and acquisition, ASX listings, asset sales and purchases, transaction due
diligence and director duties.
Mr Davey has been involved in significantly growing businesses in both the industrial and
mining sector. This has been achieved through holding various roles within different
organisations, including Chairman, Managing Director, Non-executive director, major
shareholder or corporate adviser to the board.
Mr Davey is also the Chairman of Adult and Teen Challenge Foundation, which supports the
work of Adult and Teen Challenge helping families breaking free from the bondage of
addiction.
Interest in Company equity Indirect 1,700,001 Ordinary Shares
Directorships held in other Ensurance Limited (resigned 2 July 2021)
listed entities during the Painchek Ltd
prior three years prior
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THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Directors' report
7. Meetings of Directors and committees
During the financial year, 8 meetings of Directors (plus one meeting of committees) were held. Attendances by each Director
during the year are stated in the following table.
DIRECTORS' REMUNERATION AND FINANCE AND OPERATIONS AUDIT
MEETINGS NOMINATION COMMITTEE COMMITTEE COMMITTEE
Number Number Number Number
eligible to Number eligible to Number eligible to Number eligible to Number
attend Attended attend Attended attend Attended attend Attended
Andrew Jensen 8 8 1 1 At the date of this report, the Audit and Finance and Operations
- N/A Committees comprise the full Board of Directors. The Directors
Geoff Lucas 8 8 believe the Company is not currently of a size nor are its affairs of
Paul Niardone 8 8 - N/A such complexity as to warrant the establishment of these separate
committees. Accordingly, all matters capable of delegation to such
Adam Davey 8 8 1 1 committees are considered by the full Board of Directors.
8. Indemnifying officers or auditor
8.1. Indemnification
The Company has paid premiums to insure each of the current and former Directors and officers against liabilities for costs
and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity
of Director or Officer of the Company, other than conduct involving a wilful breach of duty in relation to the Company. The
Company has not given any further indemnity or entered into any other agreements to indemnify, or pay or agree to pay
insurance premiums.
No indemnities have been given or insurance premiums paid, during or since the end of the period, for any person who is
or has been an auditor of the Company
8.2. Insurance premiums
The contract of insurance prohibits disclosure of the nature of liability and the amount of the premium.
9. Options
9.1. Unissued shares under option
At the date of this report, the unissued ordinary shares of the Company under option (listed and unlisted) are as follows:
Grant Date Date of Expiry Exercise Price Number under Vested and
$ Option Exercisable
29 Mar 2021 29 Sept 2023 0.075 10,000,000 10,000,000
29 Mar 2021 29 Sept 2024 0.100 10,000,000 -
20,000,000 10,000,000
On the commencement of employment, the Company granted Mr Lucas 30,000,000 options in accordance with his
employment agreement (10,000,000 options expired 29 September 2022). For further details refer to the financial
statements note 19.2.2a.
No person entitled to exercise the option has or has any right by virtue of the option to participate in any share issue of any
other body corporate.
9.2. Shares issued on exercise of options
No shares have been issued by the Company during the financial year as a result of the exercise of options (2022: nil).
10. Non-audit services
During the year, Hall Chadwick WA Audit Pty Ltd (Hall Chadwick), the Company’s and Group’s auditor did not provide non-audit
services (2022: nil), in addition to their statutory audits. Details of remuneration paid to the auditor can be found within the
financial statements at note 22 Auditor's Remuneration on page 67.
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ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Directors' report
Where non-audit services are provided by Hall Chadwick, the Board has established certain procedures to ensure that the
provision of non-audit services are compatible with, and do not compromise, the auditor independence requirements of the
Corporations Act 2001 (Cth). These procedures include:
◼ non-audit services will be subject to the corporate governance procedures adopted by the Company and will be reviewed by
the Board to ensure they do not impact the integrity and objectivity of the auditor; and
◼ ensuring non-audit services do not involve reviewing or auditing the auditor's own work, acting in a management or decision-
making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.
11. Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 (Cth) 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 (Cth).
12. Rounding of amounts
The amounts contained in this report have been rounded to the nearest thousand dollars under the option available to the
Company under Australian Securities and Investments Commission Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191 dated 24 March 2016.
13. Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of The Agency support
and have substantially adhered to the best practice recommendations set by the ASX Corporate Governance Council. For a
detailed analysis of the Company’s Corporate Governance Policies, visit the corporate governance section of our website at
www.investors.theagency.com.au/corporate-governance.
14. Auditor's independence declaration
The lead auditor's independence declaration under section 307C of the Corporations Act 2001 (Cth) for the year ended
30 June 2023 has been received and can be found on page 20 of the annual report.
15. Remuneration report (audited)
This report outlines the remuneration arrangements in place for Directors and key management personnel of the Company for
the year ended 30 June 2023. The information in this remuneration report has been audited as required by section 308(3C) of
the Corporations Act 2001 (Cth).
15.1. Key management personnel (KMP)
This remuneration report details the remuneration arrangements for KMP who are defined as those persons having
authority and responsibility for planning, directing and controlling the major activities of the Company and the Group,
directly or indirectly, including any director (whether Executive or otherwise) of the parent company, and includes those
Executives in the Parent and the Group receiving the highest remuneration. KMP comprise the Directors of the Company
and key executive personnel:
◼ Andrew Jensen Executive Chairman and Chief Operating Officer
◼ Geoff Lucas Managing Directors and Chief Executive Officer (CEO)
◼ Paul Niardone Executive Director
◼ Adam Davey Non-Executive Director
◼ Other KMP:
Matt Lahood CEO – Real Estate
◼ Former KMP included in comparative information:
Arjan van Ameyde Chief Financial Officer (CFO) (Resigned 1 February 2022)
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THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Directors' report
15. Remuneration report (audited)
15.2. Principles used to determine the nature and amount of remuneration
a. Remuneration Policy
The remuneration policy of The Agency has been designed to align director and management objectives with
shareholder and business objectives by providing a fixed remuneration component, and offering specific long-term
incentives, based on key performance areas affecting the Group’s financial results. The Board believes the
remuneration policy to be appropriate and effective in its ability to attract and retain the best management and
directors to run and manage the Group, as well as create goal congruence between directors, executives and
shareholders.
The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was
developed by the Board.
All remuneration paid to Directors and executives is valued at the cost to the Company and expensed.
The Board policy is to remunerate non-executive Directors at the lower end of market rates for comparable companies
for time, commitment, and responsibilities. The maximum aggregate amount of fees that can be paid to non-executive
Directors is subject to approval by shareholders at the Annual General Meeting (AGM). Fees for non-executive Directors
are not linked to the performance of the Group.
b. Performance Conditions Linked to Remuneration
The Group seeks to establish and maintain The Agency Group Australia Limited Performance Rights Plan (Plan) to
provide ongoing incentives to any full time or part time employee, consultant or any person nominated by the Board
(including director or company secretary of the Company who holds salaried employment with the Company on a full
or part time basis) (Eligible Participants) of the Company.
The Plan was adopted to allow Eligible Participants to be granted Performance Rights to acquire shares in the Company.
The objective of the Plan is to provide the Company with a remuneration mechanism, through the issue of Company
securities, to motivate and reward the performance of Eligible Participants in achieving specified performance
milestones within a specified performance period. The Board will ensure that the performance milestones attached to
the securities issued pursuant to the Plan are aligned with the successful growth of the Company’s business activities.
c. Remuneration structure
In accordance with best practice corporate governance, the structure of Non-Executive Director and Executive
compensation is separate and distinct.
(1) Non-executive director remuneration
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 Constitution and the ASX Listing Rules specify that the aggregate remuneration of non‐executive directors shall
be determined from time to time by a general meeting. An amount not exceeding the amount determined is then
divided between the Directors as agreed. The latest determination was at the Annual General Meeting held on 29
April 2016 when shareholders approved an aggregate remuneration of $250,000 per year. The Board considers
advice from external consultants when undertaking the annual review process.
(2) Executive remuneration
Senior executives, including Executive Directors, are engaged under the terms of individual employment contracts.
Such contracts are based upon standard terms drafted by the Company’s lawyers. Base salary/consulting fees are
set to reflect the market salary for a position and individual of comparable responsibility and experience. Base
salary/consulting fees are regularly compared with the external market and during recruitment activities generally.
It is the policy of the Company to maintain a competitive salary structure to ensure continued availability of
experienced and effective management and staff.
Executives are prohibited from entering into transactions or arrangements which limit the economic risk of
participating in unvested entitlements.
Details of the nature and amount of each element of each Director, including any related company and each KMP
are set out below.
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ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Directors' report
15. Remuneration report (audited)
d. Contractual arrangements of members of KMP
(1) Executive Services Agreement (ESA) – Paul Niardone
Mr Niardone entered into an ESA, revised on 11 January 2019, with the Company to be employed as Managing
Director upon and subject to the terms and conditions of the ESA. On 28 January 2022, Mr Niardone stepped down
as Managing Director was appointed Executive Director, focussed on continuing to grow Western Australian
business, national growth of emerging SLP business, expansion of financial services division and advancing a range
of technology focused property technology opportunities. The key terms of this agreement are disclosed below:
(A) Remuneration
(i) Mr Niardone will receive a salary of $390,000 per year, exclusive of superannuation, which will be reviewed
annually by the Company (Salary), plus an annual Director fee of $48,000 (as revised on 28 January 2022).
The Company will make employer superannuation contributions on behalf of Mr Niardone.
(ii) Mr Niardone, on the same basis of other Directors, may participate in a short-term and/or long-term
incentive plans whether involving the issue of shares, options, rights or other incentives to Mr Niardone to
remain at the Company and achieve the Company’s targets. Any such incentives will be governed by the
relevant plan or scheme adopted by the Company.
(iii) the Company will grant the Executive (or his nominee) the following 8,000,000 Class A Performance Rights
and 3,000,000 Class B Performance Rights under its Performance Rights and Options Plan. The Class A and
B Performance Rights will convert on the milestones as disclosed in 15.7.c Share-based compensation -
Rights Granted as Remuneration.
(iv) The Company paid operating lease payments for a motor vehicle, on behalf of Mr Niardone, in the amount
of $25,903 for the year.
(v) The Company shall provide to Mr Niardone, at its own cost, life insurance protection on similar terms to the
life insurance protection currently offered by the Company. This amounted to $9,049 for the year.
(vi) The Company will reimburse Mr Niardone for all reasonable travelling intra/interstate or overseas,
accommodation, and general expenses incurred in the performance of all duties in connection with the
business of the Company and its related bodies corporate.
(vii) Mr Niardone is entitled to all leave in accordance with the National Employment Standard (NES) and
Western Australian long service leave legislation.
(B) Termination by the Company without reason
The Company may at its sole discretion terminate employment by giving twelve months' written notice and, at
the end of that notice period, making a payment to Mr Niardone equal to the salary payable over a twelve-
month period. The Company may elect to pay Mr Niardone the equivalent of the twelve months' salary and
dispense with the notice period (as revised on 11 January 2019).
(C) Termination by Mr Niardone
Mr Niardone may at his sole discretion terminate the Employment in the following manner:
(i) if at any time the Company commits any serious or persistent breach of any of the provisions contained in
the ESA and the breach is not remedied within 28 days of receipt of written notice from Mr Niardone to the
Company to do so, by giving notice effective immediately; or
(ii) by giving three months' written notice to the Company.
(2) ESA – Matthew Lahood
(A) Remuneration
(i) Mr Lahood will receive a salary of $650,000 per year, exclusive of superannuation, which will be reviewed
annually by the Company (Salary).
(ii) In addition, the Company may at any time during the term of the ESA pay Mr Lahood a performance-based
bonus over and above his salary. In determining the extent of any performance-based bonus, the Company
shall take into consideration the key performance indicators of Mr Lahood and the Company, as the
Company may set from time to time, and any other matter that it deems appropriate.
(iii) The Company will make employer superannuation contributions on behalf of Mr Lahood.
(iv) The Company will reimburse Mr Lahood for all reasonable travelling intra/interstate or overseas,
accommodation, and general expenses incurred in the performance of all duties in connection with the
business of the Company and its related bodies corporate.
(v) Mr Lahood is entitled to all leave in accordance with the NES.
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THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Directors' report
15. Remuneration report (audited)
(B) Termination by the Company without reason
The Company may at its sole discretion terminate employment by giving three months' written notice and, at
the end of that notice period, making a payment to Mr Lahood equal to the salary payable over a five-month
period. The Company may elect to pay Mr Lahood the equivalent of the six months' salary and dispense with
the notice period
(C) Termination by Mr Lahood
Mr Lahood may at his sole discretion terminate the Employment in the following manner:
(i) if at any time the Company commits any serious or persistent breach of any of the provisions contained in
the ESA and the breach is not remedied within 28 days of receipt of written notice from Mr Lahood to the
Company to do so, by giving notice effective immediately; or
(ii) by giving three months' written notice to the Company.
(3) Letter of Appointment – Adam Davey
On 16 August 2016, Mr Davey executed a letter of appointment as non-executive Director of the Company:
(A) Term
Mr Davey’s service commenced on the date of completion of the acquisition of Ausnet Real Estate Services Pty
Ltd by the Company and will cease when he resigns, retires or is removed from office in accordance with the
Company’s constitution or the Corporations Act 2001 (Cth).
(B) Fee
Mr Davey will be paid a fee of $48,000 per annum for his role as a non-executive Director of the Company.
Any fees paid to Mr Davey will in any event be subject to annual review by the Board of the Company and
approval by Shareholders (if required). The Company will reimburse Mr Davey for all reasonable expenses
incurred in performing his duties
(4) Letter of Appointment – Andrew Jensen
On 15 February 2019, Mr Jensen executed a letter of appointment as non-executive Director of the Company.
(A) Term
Mr Jensen’s service commenced from 18 February 2019, and will cease when he resigns, retires or is removed
from office in accordance with the Company’s constitution or the Corporations Act 2001 (Cth).
(B) Fee
Mr Jensen will be paid a fee of $60,000 per annum for his role as a Director of the Company. Any fees paid to
Mr Jensen will in any event be subject to annual review by the Board of the Company and approval by
Shareholders (if required). The Company will reimburse Mr Jensen for all reasonable expenses incurred in
performing his duties.
(5) Executive Services Agreement (ESA) – Andrew Jensen
Mr Andrew Jensen entered into an ESA with the Company to be employed as Chief Operating Officer upon and
subject to the terms and conditions of the ESA. The key terms of this agreement are disclosed below:
(A) Remuneration
(i) Mr Jensen will receive a salary of $350,000 per year, exclusive of superannuation, which will be reviewed
annually by the Company (Salary). The Company will make employer superannuation contributions on
behalf of Mr Jensen.
(ii) Mr Jensen will continue to receive director’s fee as detailed in (4) above.
(iii) In addition, the Company may at any time during the term of the ESA pay Mr Jensen a performance-based
bonus over and above his salary. In determining the extent of any performance-based bonus, the Company
shall take into consideration the key performance indicators of Mr Jensen and the Company, as the
Company may set from time to time, and any other matter that it deems appropriate.
(iii) The Company will reimburse Mr Jensen for all reasonable travelling intra/interstate or overseas,
accommodation, and general expenses incurred in the performance of all duties in connection with the
business of the Company and its related bodies corporate.
(iv) Mr Jensen is entitled to all leave in line with the NES and Western Australian long service leave legislation.
(B) Termination by the Company without reason
The Company may at its sole discretion terminate employment by giving three months' written notice and, at
the end of that notice period, making a payment to Mr Jensen equal to the salary payable over a three-month
period. The Company may elect to pay Mr Jensen six months' salary and dispense with the notice period
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ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Directors' report
15. Remuneration report (audited)
(C) Termination by Mr Jensen
Mr Jensen may at his sole discretion terminate the Employment in the following manner:
(i) if at any time the Company commits any serious or persistent breach of any of the provisions contained in
the ESA and the breach is not remedied within 28 days of receipt of written notice from Mr Jensen to the
Company to do so, by giving notice effective immediately; or
(ii) by giving two months' written notice to the Company.
(6) Employment Agreement (EA) – Geoff Lucas
Mr Geoff Lucas entered into an EA, commencing on 29 March 2021, with the Company to be employed as Chief
Executive Officer upon and subject to the terms and conditions of the EA. On 28 January 2022, Mr Lucas was
appointed Managing Director of the Company. The key terms of this agreement are disclosed below:
(A) Salary Package
$550,000 inclusive of superannuation (not to increase for first 2 years of employment), plus short term and
long-term incentive payments which will be subject to achievement of key performance indicators to be set and
approved with and by the Board.
(B) Leave provisions
In accordance with applicable legislation.
(C) Equity issues
Upon commencement, the Company will issue Mr Lucas with 30 million unlisted options to acquire fully paid
ordinary shares of the Company with the following terms:
◼ 10 million exercisable at 5 cents each, vesting 60 days after conclusion of a 6-month probationary period
(Probationary Period) and are exercisable on or before 12 months after conclusion of the probationary
period (approx. September 2022). These have since expired.
◼ 10 million exercisable at 7.5 cents each, vesting on the 12-month anniversary date of conclusion of the
Probationary Period and are exercisable on or before 12 months from vesting (approx. September 2023).
◼ 10 million exercisable at 10 cents each, vesting on the 24-month anniversary date of conclusion of the
Probationary Period and are exercisable on or before 12 months from vesting (approx. September 2024).
If the employment is terminated by either party, the Unlisted Options will be cancelled or lapsed.
If all Unlisted Options are exercised the total payable by Mr Lucas will be $2.25 million.
(D) Termination
Following the Probationary Period, the Company may terminate the employment without cause, or Mr Lucas
may resign from the employment, with six months’ written notice to the other party. The employment
agreement also contains summary termination provisions considered standard for an agreement of this type.
e. Voting and comments made at the Company’s 2022 Annual General Meeting (AGM)
At the AGM held on 18 November 2022, on a poll the Company received 245,626,125 (99.49%) For votes and 1,265,310
(0.05%) Against votes and no abstentions on its remuneration report for the 2022 financial year. The Group did not
employ a remuneration consultant during the year.
15.3. Performance-based remuneration
a. The following table provides employment details of persons who were, during the financial year, members of KMP of
the Group. The table also illustrates the proportion of remuneration that was performance based and the proportion
of remuneration received in the form of options.
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THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Directors' report
15. Remuneration report (audited)
Position Held as at Contract Proportions of Elements of Proportions of Elements of Total
Group KMP 30 June 2023 and any Commencement / Remuneration Related to Performance Remuneration Not Related
change during the Termination Date to Performance
year Non-salary Fixed Salary/ Fixed Salary/
Cash-based Options / Fees – cash Fees – share-
Incentives Shares Rights based based
% % % % % %
Andrew Jensen Executive Chairman Appt. 18.02.2019 (Dir) - - - 100 - 100
and COO Appt. 1.02.2020 (COO)
Paul Niardone Executive Director 19.12.2016 - - 34 66 - 100
Adam Davey Non-Executive 19.12.2016 - - - 100 - 100
Director
Geoff Lucas Managing Director Appt. 28.01.2022 (MD) - - - 74 26 100
and CEO Appt. 29.03.2021 (CEO)
Matthew Lahood CEO – Real estate Appt 17.02.2019 - - - 100 - 100
b. Statutory performance indicators
The Group aims to align our executive remuneration to our strategic and business objectives and the creation of
shareholder wealth. Reported below are measures of the Group’s financial performance over the last five years as
required by the Corporations Act 2001 (Cth). However, these are not necessarily consistent with the measures used in
determining the variable amounts of remuneration to be awarded to KMPs. As a consequence, there may not always
be a direct correlation between the statutory key performance measures and the variable remuneration awarded.
2023 2022 2021 2020 2019
Profit or (loss) for the year attributable to (4,321) 1,588 (1,856) (9,065) (7,831)
owners of the Company ($’000)
Basic earnings per share (cents) (1.01) 0.37 (0.53) (3.60) (12.71)
Dividend payments ($) Nil Nil Nil Nil Nil
Dividend payout ratio (%) N/A N/A N/A N/A N/A
Share price ($) 0.026 0.037 0.050 0.043 0.070
Increase/(decrease) in share price (%) (29.73) (26.00) 16.28 (38.57) (52.70)
15.4. Directors and KMP remuneration
Details of the nature and amount of each element of the remuneration of each of the KMP of the Company for the year
ended 30 June 2023 are set out in the following tables.
Bonuses paid during the year were based on the achievement of agreed key performance indicators.
The following table of benefits and payments represents the components of the current year and comparative year
remuneration expenses for each member of KMP of the Group. Such amounts have been calculated in accordance with
Australian Accounting Standards.
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ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Directors' report
15. Remuneration report (audited)
2023 – Group
Short-term benefits Post- Long-term Termination Equity-settled share- Total
Group KMP employment benefits benefits based payments
benefits
Salary, fees, Profit share Non- Other Super- Other Shares Options /
and leave & bonuses(4) monetary annuation Perf. equity
$ $ $ $ $ $ $ $ $ $
Andrew Jensen 410,000 - - - 25,292 - - - - 435,292
Paul Niardone(1) 460,500 - - 36,083 25,292 - - - 263,750 785,625
Adam Davey 48,000 - - - - - - - - 48,000
Geoff Lucas 524,712 - - 2,345 25,292 - - - 197,979 750,328
Matthew Lahood(1) 664,520 - - 36,000 25,292 - - - - 725,812
2,107,732 - - 74,428 101,168 - - - 461,729 2,745,057
(1)
Included in Salary, fees and leave for Mr Niardone is an amount of $22,500 relating to a payout of leave entitlements, and director fees of $48,000.
In addition, for Mr Lahood there is an amount of $50,520 relating to a payout of leave entitlements.
2022 – Group
Short-term benefits Post- Long-term Termination Equity-settled share- Total
Group KMP employment benefits benefits based payments
benefits
Salary, fees Profit share Non- Other Super- Other Share Options /
and leave & bonuses(4) monetary annuation Perf. equity
$ $ $ $ $ $ $ $ $ $
Andrew Jensen 410,002 33,621 - - 23,568 - - - - 467,191
Paul Niardone(2)(3) 469,216 44,041 - 24,297 23,568 - - - 110,558 671,680
Adam Davey 48,000 - - - - - - - - 48,000
Geoff Lucas(3) 526,427 68,064 - - 23,568 - - - 563,995 1,182,054
Matthew Lahood 613,995 97,668 - 36,000 23,568 - - - - 771,231
Arjan van Ameyde(1) 147,754 - - - 15,502 - 122,993 - - 286,249
2,215,394 243,394 - 60,297 109,774 - 122,993 - 674,553 3,426,405
(1) Mr Ameyde resigned 1 February 2022.
(2)
Included in Salary, fees and leave for Mr Niardone is an amount of $59,216 relating to a payout of leave entitlements, and director fees of $20,000.
(3) Mr Niardone was issued performance rights in accordance with his ESA. Mr Lucas’ options were issued in accordance with his employment
agreement. For further details refer to the financial statements note 19.2.2.
(4)
Bonuses for the 2022 year were accrued but unpaid as at 30 June 2022. Bonuses are subject to final Board approval.
15.5. KMP Loans
As a 30 June 2023, an amount outstanding of $501,023 was advanced to Mr Lahood (2022: $345,009), with the following
terms:
◼ Principal Sum Up to $550,000
◼ Loan Commencement 27 October 2021
◼ Interest Rate 8% per annum (after 12 months interest free period from final advance date)
◼ Default Interest Rate Interest Rate plus 5% per annum
◼ Securities Any future sales commissions and future income and wages as per EA entitlements
◼ Instalment Date Amount is due on final repayment date or when any due amounts are payable on STI payments
and sales commissions from property sales that are due. Discretional payments during the
term can also be paid
◼ Repayment Date 31 December 2024
P a g e | 16
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Directors' report
15. Remuneration report (audited)
15.6. Other transactions with KMP and or their Related Parties
Some Directors or former Directors of the Group hold or have held positions in other companies, where it is considered
they control or significantly influence the financial or operating policies of those entities. During the year, the following
entities provided services to the Group.
Total Transactions Receivable/(Payable) Balance
Entity Nature of transactions KMP 2023 2022 2023 2022
$ $ $ $
Matt Lahood Advance commissions / Matt Lahood - (26,704) 57,370 57,370
Future fund
There have been no other transactions in addition to those described in the tables above or as detailed in note 17 Related
party transactions.
15.7. Share-based compensation
The Group believes that encouraging its directors and executives to become shareholders is the best way of aligning their
interests with those of its shareholders. At present the Group does not have an active employee share option plan.
There were no equity instruments issued during the year to Directors as a result of options exercised that had previously been
granted as compensation.
a. Securities received that are not performance-related
No members of KMP are entitled to receive securities that are not performance-based as part of their remuneration
package.
b. Options and Rights Granted as Remuneration
No options were granted during the current financial year. During 2021 financial year, 30,000,000 options were granted
to Mr Geoff Lucas as share-based compensation (10,000,000 options have since expired), as detailed below and in note
19.2.2a.
Value per
option at Grant Vested during Exercised during
Number under Exercise Price Date the year the year
Option Grant Date Vesting Date Expiry Date $ $ No. No.
10,000,000 29.03.21 28.11.21 29.09.22 0.050 0.0320 Expired nil
10,000,000 29.03.21 29.09.22 29.09.23 0.075 0.0333 10,000,000 nil
10,000,000 29.03.21 29.09.23 29.09.24 0.100 0.036 - nil
c. Rights Granted as Remuneration
At the Company's 2021 AGM, shareholder approval was obtained to issue 11,000,000 performance rights that will convert
into shares upon milestones being achieved, to Mr Paul Niardone under his ESA. These performance rights have been
issued on terms as detailed below and valued in accordance with note 19.3.
Class of Performance Condition Performance Milestone Expiry Probability of Performance
Performance rights Date Date milestones met Condition
Right No. % Satisfied
A 24 months continuous service to the 8,000,000 28.01.2024 28.01.2024 100 No
Company
B Achievement of one of the following: 3,000,000 30.06.2024 30.06.2024 85 No
(i) recruitment by The Agency (WA) and the
Company’s Sell Lease Property Model of
85 Agents by 30 June 2024; or
(ii) achievement of GCI of $50,000,000 for
the financial year ending 30 June 2024 by
The Agency (WA).
P a g e | 17
ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Directors' report
15. Remuneration report (audited)
15.8. KMP equity holdings of The Agency Group Australia Ltd held by each KMP
a. Fully Paid Ordinary Shares
The number of ordinary shares of The Agency Group Australia Ltd held, directly, indirectly or beneficially, by each KMP,
including their personally-related entities for the year ended 30 June 2023 is as follows:
2023 – Group Balance at start of Received during Received during the
year or the year as year on the exercise Other changes Balance at end of
Group KMP appointment compensation of options during the year year or resignation
No. No. No. No. No.
Andrew Jensen 1,903,492 - - - 1,903,492
Paul Niardone 3,187,008 - - - 3,187,008
Adam Davey(1)(2) 1,064,308 - - 635,693 1,700,001
Geoff Lucas - - - 1,290,407 1,290,407
Matthew Lahood 24,804,398 - - - 24,804,398
30,959,206 - - 1,926,100 32,885,306
(1) Other changes relate to the acquisition of shares on market during the year.
(2) Opening balance for Adam Davey was corrected, due to a misstated number of shares being disclosed as held.
b. Options
The number of options over ordinary shares in The Agency Group Australia Ltd held, directly, indirectly or beneficially,
by each KMP, including their personally-related entities for the year ended 30 June 2023 is as follows:
2023 – Group Balance at Granted as Balance at
start of year or Remuneration Exercised Other changes end of year or Vested and
Group KMP appointments during the year during the year during the year(1) resignation Exercisable Not Vested
No. No. No. No. No. No. No.
Andrew Jensen - - - - - - -
Paul Niardone - - - - - - -
Adam Davey - - - - - - -
Geoff Lucas 30,000,000 - - (10,000,000) 20,000,000 10,000,000 10,000,000
Matthew Lahood - - - - - - -
30,000,000 - - (10,000,000) 20,000,000 10,000,000 10,000,000
(1) Other changes relate to the expiration of options
c. Performance Shares / Rights
The number of Performance Shares in The Agency Group Australia Ltd held, directly, indirectly or beneficially, by each
KMP, including their personally-related entities for the year ended 30 June 2023 is as follows:
2023 – Group Balance at Received during Conversion to Balance at
start of year or the year as ordinary share Other changes end of year or Maximum value
Group KMP appointments compensation during the year during the year resignation yet to vest
No. No. No. No. No. No.
Andrew Jensen - - - - - -
Paul Niardone(1) 11,000,000 - - - 11,000,000 11,000,000
Adam Davey - - - - - -
Geoff Lucas - - - - - -
Matthew Lahood - - - - - -
11,000,000 - - - 11,000,000 11,000,000
(1) Mr Niardone was issued performance rights (8 million Class A and 3 million Class B) in accordance with his ESA. For further
details, refer 19.2.2.
P a g e | 18
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Directors' report
15. Remuneration report (audited)
15.9. Other Equity-related KMP Transactions
There have been no other transactions involving equity instruments other than those described in the tables above relating
to options, rights, and shareholdings.
END OF REMUNERATION REPORT
This Report of the Directors, incorporating the Remuneration Report, is signed in accordance with a resolution of the Board of
Directors made pursuant to section 298(2) of the Corporations Act 2001 (Cth).
GEOFF LUCAS
Managing Director and CEO
Dated this Thursday, 24 August 2023
P a g e | 19
ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Auditor's independence declaration
Under section 307c Of The Corporations Act 2001 (Cth)
To The Directors Of THE AGENCY GROUP AUSTRALIA LTD
TO BE RECEIVED FROM
AUDITORS
P a g e | 20
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Consolidated statement of profit or loss and other comprehensive income
for the year ended 30 June 2023
Note 2023 2022
$’000 $’000
Continuing operations
Revenue 1.1 76,930 72,656
Cost of sales (52,459) (47,432)
Gross profit 24,471 25,224
Other income 1.2 2,150 776
Administrative and other expenses (31,868) (26,263)
Impairment losses recovered 2.3 - 400
(Loss) / profit before tax and finance costs (5,247) 137
Interest and finance costs (1,511) (816)
Embedded derivative non-cash financing gains / (costs) 2.2 1,351 1,140
(Loss) / profit before tax 2.1 (5,407) 461
Income tax benefit 4.1 1,086 1,127
(Loss) / profit for the year (4,321) 1,588
Other comprehensive income, net of income tax
◼ Items that will not be reclassified subsequently to profit or loss: - -
◼ Items that may be reclassified subsequently to profit or loss: - -
Other comprehensive income for the period, net of tax - -
Total comprehensive income attributable to members of the parent entity (4,321) 1,588
Earnings per share: ₵ ₵
Basic (loss) /earnings per share (cents per share) 18.4 (1.01) 0.37
Diluted earnings per share (cents per share) 18.4 N/A 0.37
902 5,687
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes.
P a g e | 21
ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Consolidated statement of financial position
as at 30 June 2023
Note 2023 2022
$’000 $’000
Current assets
Cash and cash equivalents 5.1 4,632 8,216
Trade and other receivables 5.2.1 12,661 11,103
Other current assets 5.4.1 575 497
Total current assets 17,868 19,816
Non-current assets
Trade and other receivables 5.2.2 699 145
Financial assets 5.3.1 1,004 836
Property, plant, and equipment 6.1 1,781 1,936
Right of use assets 6.2.1 3,911 3,605
Intangible assets 6.3 24,457 21,315
Total non-current assets 31,852 27,837
Total assets 49,720 47,653
Current liabilities
Trade and other payables 5.5.1 17,199 14,918
Borrowings 5.6.1 - 5,000
Financial liabilities 5.7.1 - 4,021
Provisions 6.4 2,698 2,472
Leases 6.2.2 1,761 1,836
Total current liabilities 21,658 28,247
Non-current liabilities
Borrowings 5.6.2 8,400 -
Financial liabilities 5.7.2 3,044 -
Provisions 6.4 287 221
Leases 6.2.2 3,394 2,555
Deferred tax liabilities 4.6 396 230
Total non-current liabilities 15,521 3,006
Total liabilities 37,179 31,253
Net assets 12,541 16,400
Equity - -
Issued capital 7.1.1 43,635 43,635
Reserves 7.4 1,032 890
Accumulated losses (32,126) (28,125)
Total equity 12,541 16,400
(3,790) (8,431)
(11,520) (4,685)
The consolidated statement of financial position is to be read in conjunction with the accompanying notes.
P a g e | 22
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Consolidated statement of changes in equity
for the year ended 30 June 2023
Note Share-based
Contributed Accumulated payment Total
equity Losses Reserve equity
$’000 $’000 $’000 $’000
Balance at 1 July 2021 43,635 (30,570) 1,072 14,137
Profit for the year attributable to owners of the parent - 1,588 - 1,588
Other comprehensive income for the year attributable
owners of the parent - - - -
Total comprehensive income for the year attributable
owners of the parent - 1,588 - 1,588
Transaction with owners, directly in equity
Shares issued during the year (net of costs) 7.1.1 - - - -
Share-based payments granted during the year 19 - - 675 675
Transfers to / from reserves - 857 (857) -
Balance at 30 June 2022 43,635 (28,125) 890 16,400
Balance at 1 July 2022 43,635 (28,125) 890 16,400
Loss for the year attributable to owners of the parent - (4,321) - (4,321)
Other comprehensive income- for the year
attributable owners of the parent - - - -
Total comprehensive income for the year attributable
owners of the parent - (4,321) - (4,321)
Transaction with owners, directly in equity
Shares issued during the year (net of costs) - - - -
Share-based payments granted during the year 19 - - 462 462
Transfers to / from reserves - 320 (320) -
Balance at 30 June 2023 43,635 (32,126) 1,032 12,541
The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.
P a g e | 23
ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Consolidated statement of cash flows
for the year ended 30 June 2023
Note 2023 2022
$’000 $’000
Cash flows from operating activities
Receipts from customers 80,705 78,861
Payments to suppliers and employees (80,431) (71,827)
Interest received 48 37
Finance costs (761) (471)
Net cash (used in) / provided by operating activities 5.1.2a (439) 6,600
Cash flows from investing activities
Purchase of property, plant, and equipment (451) (965)
Deposit for bank guarantees (148) (11)
Purchase of intangibles (586) (319)
Loans to other entities (156) (715)
Net cash received on disposal of asset 1,642 486
Payment for acquisition of subsidiary, net of cash acquired 11.1.3 (4,375) -
Net cash (used in) investing activities (4,074) (1,524)
Cash flows from financing activities
Proceeds from borrowings 5.1.2b 3,400 -
Payment of principal portion of lease liabilities (2,471) (1,956)
Net cash provided by / (used in) financing activities 929 (1,956)
Net (decrease) / increase in cash and cash equivalents held (3,584) 3,120
Cash and cash equivalents at the beginning of the year 8,216 5,096
Cash and cash equivalents at the end of the year - 5.1 4,632 8,216
The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.
P a g e | 24
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
In preparing the 2023 financial statements, The Agency Group Australia Ltd has grouped notes into sections under five key
categories:
◼ Section A: How the numbers are calculated .............................................................................................................................26
◼ Section B: Risk ...........................................................................................................................................................................52
◼ Section C: Group structure ........................................................................................................................................................56
◼ Section D: Unrecognised items .................................................................................................................................................60
◼ Section E: Other Information ....................................................................................................................................................61
Significant accounting policies specific to each note are included within that note. Accounting policies that are determined to be
non-significant are not included in the financial statements.
The financial report is presented in Australian dollars, except where otherwise stated.
The amounts contained in these financial statements have been rounded to the nearest thousand dollars under the option
available to the Group under Australian Securities and Investments Commission (ASIC) Corporations (Rounding in
Financial/Directors’ Reports) Instrument 2016/191 dated 24 March 2016.
P a g e | 25
ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
SECTION A. HOW THE NUMBERS ARE CALCULATED
This section provides additional information about those individual line items in the financial statements that the Directors
consider most relevant in the context of the operations of the entity, including:
(a) accounting policies that are relevant for an understanding of the items recognised in the financial statements. These cover
situations where the accounting standards either allow a choice or do not deal with a particular type of transaction.
(b) analysis and sub-totals.
(c) information about estimates and judgements made in relation to particular items.
Note 1 Revenue and other income Note 2023 2022
$’000 $’000
1.1 Revenue
Residential Sales commissions 62,996 60,682
Mortgage and Settlement revenue 4,016 5,115
Property Management revenue: Management fees 7,430 5,116
Other 2,488 1,743
76,930 72,656
1.1.1 During the 2023 year the acquisition of Bushby & Co. Pty Ltd, as disclose in note 11.1, contributed an additional revenue
as follows: Residential Sales commissions: $1,540K; Property Management revenue: Management fees $1,594K; and
Property Management revenue: Other: $315K.
1.2 Other Income Note 2023 2022
$’000 $’000
Interest income 48 37
Gain on sale of trail book 11.2 1,579 -
Gain on exit of lease 11 5
(Loss) / gain financial assets at FVPL (71) 123
Other income 583 611
2,150 776
1.3 Accounting policies
1.3.1 Revenue from contracts with customers
Revenue is measured based on the consideration specified in a contract with a customer. The Group recognises revenue
when performance obligations have been met.
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of
returns, trade allowances and amounts collected on behalf of third parties.
1.3.2 Revenue is recognised for major business activities based on the following performance obligations:
a. Settlement fee revenue ........................................... on settlement of real estate transaction.
b. Upfront commissions for mortgage origination ...... on approval of finance to clients and settlement of real estate
transaction.
c. Trail commissions ...................................................... on receipt, based on maintaining clientele.
d. Real estate commissions ........................................... when the sale of the property becomes unconditional.
e. Training seminars and functions .............................. on date function is held
All revenue is stated net of the amounts of goods and services tax (GST).
1.3.3 Interest income
Interest revenue is recognised in accordance with note 3.1 Finance income and expenses.
P a g e | 26
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 1 Revenue and other income (cont.)
1.3.4 Critical judgements – Recognition of trailing commission revenue & trailing commission expense
The Group receives trailing commissions from lenders on loans they have settled that were originated by the Group. The
trailing commissions are received over the life of the loans based on the individual loan balance outstanding. The Group also
makes trailing commission payments to brokers based on the individual loan balance outstanding.
As disclosed in note 1.3.2c above, revenue from trailing commission is recognised on receipt. The Directors considered the
detailed criteria for the recognition of revenue from the rendering of services set out in AASB 15 Revenue from contracts
with customers, in particular, whether the recognition of revenue on the trail satisfied the probability requirements. The
Directors determined that at the contract level, the Group cannot reliably determine the likelihood of that individual
remaining with the Group or the period that they will continue for, resulting in revenue only being recognised upon receipt.
Trailing commission expenditure is recognised on the same basis as trailing commission revenue and is recognised upon
receipt of trailing commission revenue.
Note 2 Expenses Note 2023 2022
$’000 $’000
2.1 Expenses by nature
◼ Advertising and promotion expenses 3,224 2,282
◼ Computers and information technology expenses 2,235 1,864
◼ Consultancy fees 1,275 1,265
◼ Depreciation and amortisation 2.5 6,469 5,440
◼ Embedded derivative non-cash financing gains 2.2 (1,351) (1,140)
◼ Impairment recovery 2.3 - (400)
◼ Interest and finance costs 1,511 816
◼ Legal and professional fees 1,886 918
◼ Occupancy costs 1,092 818
◼ Salaries and employment costs 2.4 64,127 58,227
◼ Travel and entertainment 737 436
◼ Other expenses 3,282 2,445
Total expenses by nature 84,487 72,971
2.1.1 Reconciliation to net profit or loss before tax
Total revenue and other income 79,080 73,432
Less: Total expenses by nature (84,487) (72,971)
Net loss / (profit) before tax (5,407) 461
- -
2.1.2 During the 2023 year, the acquisition of Bushby & Co. Pty Ltd, as disclosed in note 11.1.2, contributed $3,939K to total
expenses by nature.
P a g e | 27
ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 2 Expenses (cont.)
Note 2023 2022
2.2 Embedded derivative non-cash financing (gains)/costs: $’000 $’000
◼ Embedded Derivative – Finance cost 1,776 866
◼ Embedded Derivative – Fair value adjustment 5.7.3 (3,127) (2,006)
(1,351) (1,140)
2.3 Impairment:
◼ Doubtful debts recovered - (400)
- (400)
2.3.1 Accounting policy
a. Impairment of financial assets
Refer to note 5.8.1d
b. Impairment of non-financial assets
Refer to note 6.5.1
2.4 Salaries and employment costs Note 2023 2022
$’000 $’000
◼ Commissions 41,667 39,118
◼ Director fees 171 149
◼ Salary and wages 13,829 11,340
◼ Share-based payments expense 19.1 462 675
◼ Superannuation (on commissions, director fees, and salary and wages) 3,052 2,672
◼ Other employment related costs 4,946 4,273
64,127 58,227
2.4.1 During the 2023 year, the acquisition of Bushby & Co. Pty Ltd, as disclosed in note 11.1.2, contributed $2,522K to total
salaries and employment costs.
2.4.2 Accounting policy
a. Short-term benefits
Liabilities for employee benefits for wages, salaries and annual leave that are expected to be settled within 12 months
of the reporting date represent present obligations resulting from employees' services provided to the reporting date
and are calculated at undiscounted amounts based on remuneration wage and salary rates that the Group expects to
pay at the reporting date including related on-costs, such as workers compensation insurance and payroll tax.
Non-accumulating non-monetary benefits, such as medical care, housing, cars and free or subsidised goods and services,
are expensed based on the net marginal cost to the Group as the benefits are taken by the employees.
b. Other long-term benefits
The Group's obligation in respect of long-term employee benefits other than defined benefit plans, such as long service
leave, is the amount of future benefit that employees have earned in return for their service in the current and prior
periods plus related on-costs; that benefit is discounted to determine its present value, and the fair value of any related
assets is deducted. The discount rate is the Reserve Bank of Australia's cash rate at the report date that have maturity
dates approximating the terms of the Company's obligations. Any actuarial gains or losses are recognised in profit or
loss in the period in which they arise.
P a g e | 28
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 2 Expenses (cont.)
2.4 Salaries and employment costs (cont.)
c. Retirement benefit obligations: Defined contribution superannuation funds
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions onto a
separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to
defined contribution superannuation funds are recognised as an expense in the income statement as incurred.
d. Termination benefits
When applicable, the Group recognises a liability and expense for termination benefits at the earlier of: (a) the date
when the Group can no longer withdraw the offer for termination benefits; and (b) when the Group recognises costs for
restructuring pursuant to AASB 137 Provisions, Contingent Liabilities and Contingent Assets and the costs include
termination benefits. In either case, unless the number of employees affected is known, the obligation for termination
benefits is measured based on the number of employees expected to be affected. Termination benefits that are
expected to be settled wholly before 12 months after the annual reporting period in which the benefits are recognised
are measured at the (undiscounted) amounts expected to be paid. All other termination benefits are accounted for on
the same basis as other long-term employee benefits.
e. Equity-settled compensation
The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. The fair
value is measured at grant date and spread over the period during which the employees become unconditionally entitled
to the options. The fair value of the options granted is measured using the Black-Scholes pricing model, considering the
terms and conditions upon which the options were granted. The amount recognised is adjusted to reflect the actual
number of share options that vest except where forfeiture is only due to market conditions not being met.
2.5 Depreciation and amortisation Note 2023 2022
$’000 $’000
◼ Depreciation – plant and equipment 6.1.1 737 607
◼ Depreciation – right-of-use assets 6.2.4 1,777 1,589
◼ Amortisation – intangible assets 6.3.2 3,955 3,244
6,469 5,440
2.5.1 Accounting policy
a. Impairment of financial assets
Refer to note 5.8.1d
b. Impairment of non-financial assets
Refer to note 6.5.1
Note 3 Other Significant Accounting Policies related to items of profit and loss
3.1 Finance income and expenses
Finance income comprises interest income on funds invested (including available-for-sale financial assets), gains on the
disposal of available-for-sale financial assets and changes in the fair value of financial assets at fair value through profit or
loss. Interest revenue is recognised on a time proportionate basis that considers the effective yield on the financial asset.
Financial expenses comprise interest expense on borrowings calculated using the effective interest method, unwinding of
discounts on provisions, changes in the fair value of financial assets at fair value through profit or loss and impairment losses
recognised on financial assets. All borrowing costs are recognised in profit or loss using the effective interest method.
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a
substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as
the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised in income in the
period in which they are incurred.
P a g e | 29
ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 4 Income tax Note 2023 2022
$’000 $’000
4.1 Income tax benefit
Current tax expense - -
Deferred tax expense (1,086) (1,127)
(1,086) (1,127)
Deferred income tax expense included in income tax expense comprises:
◼ Increase in deferred tax assets (DTAs) 4.5 (151) (301)
◼ Increase / (decrease) in deferred tax liabilities (DTLs) 4.6 317 (826)
◼ Increase in respect to the acquisition of Bushby & Co. Pty Ltd 11.1 (1,252) -
(1,086) (1,127)
4.2 Reconciliation of income tax expense to prima facie tax payable
The prima facie tax benefit on profit or loss from ordinary activities
before income tax is reconciled to the income tax expense as follows:
Accounting profit / (loss) before tax (5,407) 461
Prima facie tax on operating loss at 30% (2022 profit: 30%) (1,622) 138
Add / (Less) tax effect of:
◼ Non-deductible expenses (330) (190)
◼ Profit / (loss) on sale of assets 15 (1)
◼ Recognition of DTA on revenue losses, not previously recognised - (1,045)
◼ Unrecognised income tax benefit in respect of current year losses 889 -
and timing differences
◼ Other deductible expenses (38) (29)
Income tax benefit attributable to operating loss / profit (1,086) (1,127)
2023 2022
% %
4.3 The applicable weighted average effective tax rates attributable to
operating profit are as follows: 20.09 (244.47)
a. The tax rates used in the above reconciliations is the corporate tax rate
of 30% payable by the Australian corporate entity on taxable profits
under Australian tax law.
4.4 Balance of franking account at year end of the parent company $nil $nil
P a g e | 30
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 4 Income tax (cont.)
4.5 Deferred tax assets (DTA) Note 2023 2022
$’000 $’000
Employee benefits 742 612
Accrued expenses 2,202 2,014
Provisions 237 274
AASB 16 Leases - Lease Liability 175 213
Other 70 162
3,426 3,275
Set-off deferred tax liabilities 4.6 (3,426) (3,275)
Net deferred tax assets - -
4.6 Deferred tax liabilities (DTL)
Intangible Asset - Rent Roll 3,697 3,380
Property, plant, and equipment (deprecation) 88 88
Financial assets – investments (fair valuation) 37 37
3,822 3,505
Set-off deferred tax assets 4.5 (3,426) (3,275)
Net deferred tax liabilities 396 230
4.7 Tax losses and deductible temporary differences
Unused tax losses and deductible temporary differences for which no DTA
has been recognised, that may be utilised to offset tax liabilities:
◼ Revenue losses attributable to Australia 5,118 3,712
5,118 3,712
4.8 Potential deferred tax assets attributable to tax losses have not been brought to account at 30 June 2023 because the
Directors do not believe it is appropriate to regard realisation of the deferred tax assets as probable at this point in time.
These benefits will only be obtained if:
i. the Group derives future assessable income of a nature and of an amount sufficient to enable the benefit from the
deductions for the loss to be realised;
ii. the Company continues to comply with conditions for deductibility imposed by law; and
iii. no changes in tax legislation adversely affect the Group in realising the benefit from the deductions for the loss.
Balances disclosed in the financial statements and the notes thereto, related to taxation, are based on the best estimates
of the Directors. These estimates consider both the financial performance and position of the Company as they pertain
to current income taxation legislation, and the Directors understanding thereof. No adjustment has been made for
pending or future taxation legislation. The current income tax position represents that Directors' best estimate, pending
an assessment by tax authorities in relevant jurisdictions.
The parent company has accumulated tax losses of $17,060K (2022: $12,373K) which may be available for offset against
future taxable profits of the parent company in which the losses arose. The recoupment of these losses is subject to
assessment by the Australian Taxation Office.
P a g e | 31
ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 4 Income tax (cont.) Note
4.9 Accounting policy
The income tax expense or benefit for the period is the tax payable on the current period's taxable income based on the
applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary difference and to unused tax losses.
The current income tax charge is calculated based on the Australian tax laws enacted or substantively enacted at the end of
the reporting period being where the Group and its associates operate and generate taxable income. Management
periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate based on amounts expected to be paid to the tax authorities.
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted
or substantively enacted by the balance date, in Australia.
Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities (DTL) are recognised for all taxable temporary differences except:
◼ when the DTL 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; or
◼ 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 (DTA) are recognised for all deductible temporary differences, carry-forward of unused tax assets
and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:
◼ when the DTA 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; or
◼ when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint
ventures, in which case a DTA 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 DTA is reviewed at each balance 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 DTA to be utilised.
Unrecognised DTA are reassessed at each balance 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. DTAs and DTLs 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 balance date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss. DTAs and DTLs
are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the DTAs and
DTLs relate to the same taxable entity and the same taxation authority.
4.9.1 Tax consolidation
The Agency Group Australia Ltd and its wholly-owned Australian subsidiaries have formed an income tax consolidated group
(the Tax Group) under the tax consolidation legislation. Each entity in the Tax Group recognises its own current and deferred
tax liabilities, except for any DTLs resulting from unused tax losses and tax credits, which are immediately assumed by the
parent entity. The Group notified the Australian Tax Office that it had formed a Tax Group to apply from 1 July 2019. The
Tax Group has entered a tax sharing agreement whereby each company in the Tax Group contributes to the income tax
payable in proportion to their contribution to the net profit before tax of the Tax Group.
P a g e | 32
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 5 Financial assets and financial liabilities
5.1 Cash and cash equivalents Note 2023 2022
$’000 $’000
Cash at bank 4,632 8,216
4,632 8,216
5.1.1 The Group's exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in note
8 Financial risk management.
2023 2022
5.1.2 Cash Flow Information $’000 $’000
a. Reconciliation of cash flow from operations to loss after income tax
Profit / (loss) after income tax (4,321) 1,588
◼ Cash flows excluded from loss attributable to operating activities 784 -
◼ Non-cash flows in loss from ordinary activities:
Depreciation and amortisation 6,469 5,440
Impairment recovery - (400)
Income tax benefit (1,086) (1,127)
Non-cash interest adjustments 561 519
Embedded derivative non-cash financing gain (1,351) (1,140)
Share-based payments expense 462 675
Profit or loss on disposal of assets (1,590) (5)
Fair value adjustments through profit and loss 71 (123)
◼ Changes in assets and liabilities, net of the effects of purchase
and disposal of subsidiaries:
(Increase) in receivables (654) (2,905)
(Increase) in financial assets (148) (11)
Increase in trade and other payables 269 3,737
Increase in provisions 95 352
Cash flow from operations - (439) 6,600
- -
b. Reconciliation of liabilities arising from financing activities
Non-cash changes
Other Embedded Converted
2021 Cash flows Additions Changes Derivative to equity 2022
$’000 $’000 $’000 $’000 $’000 $’000 $’000
Short-term borrowings - - - 7,039 1,982 - 9,021
and financial liabilities
Long-term borrowings 9,883 - - (5,895) (3,988) - -
and financial liabilities
Leases 5,845 (1,956) 238 264 - - 4,391
Total liabilities from
financing activities 15,728 (1,956) 238 1,408 (2,006) - 13,412
-
P a g e | 33
ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 5 Financial assets and financial liabilities (cont.)
5.1 Cash and cash equivalents (cont.)
5.1.2 Cash Flow Information (cont.)
Non-cash changes
Other Embedded Converted
2022 Cash flows Additions Changes Derivative to equity 2023
$’000 $’000 $’000 $’000 $’000 $’000 $’000
Short-term borrowings 9,021 - - (7,039) (1,982) - -
and financial liabilities
Long-term borrowings - 3,400 - 6,490 1,554 - 11,444
and financial liabilities
Leases 4,391 (2,471) 60 3,175 - - 5,155
Total liabilities from
financing activities 13,412 929 60 2,626 (428) - 16,599
- -
c. Credit and loan standby arrangement with banks
Refer note 5.6.6 Financing facilities available.
d. Non-cash investing and financing activities
2023
◼ Reclassification of borrowings and financial liabilities to non-current.
2022
◼ Reclassification of borrowings and financial liabilities to current.
5.1.3 Accounting policy
For Statement of Cash Flow presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call
with financial institutions, other short-term, highly liquid instruments with original 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. Bank overdrafts are shown within borrowings in current liabilities on the Statement of Financial Position.
5.2 Trade and other receivables Note 2023 2022
$’000 $’000
5.2.1 Current
Trade debtors 8,837 7,957
Recoverable commissions and wages 1,585 1,373
Other receivables 1,979 1,665
Provision for non-recovery of trade debtor and commissions / wages (241) (237)
Loan to KMP 5.2.1a 501 345
12,661 11,103
a. As at 30 June 2023, an amount of $501,023 was advanced to Mr Lahood (2022: $345,009), refer also note 17a.
2023 2022
5.2.2 Non-current $’000 $’000
Trade debtors 699 145
699 145
5.2.3 The Group's exposure to credit rate risk is disclosed in note 8 Financial risk management.
P a g e | 34
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 5 Financial assets and financial liabilities (cont.)
5.2 Trade and other receivables (cont.)
5.2.4 The average credit period on rendering of services ranges from current to 30 days. Interest is not charged.
No allowance has been made for estimated irrecoverable trade receivable amounts arising from past sale of goods and
rendering of services, determined by reference to past default experience. Amounts are considered as past due when the
debt has not been settled, within the terms and conditions agreed between the Group and the customer or counter party to
the transaction.
5.2.5 Accounting policy
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for
doubtful debts. Trade receivables are due for settlement within no more than 30 days. Marketing allowances and upfront
commissions paid to employees and agents are recovered against future sales commissions received by the employee or
agent.
a. Determining the stage for impairment
At each reporting date, the Group assesses whether there has been a significant increase in credit risk for exposures
since initial recognition by comparing the risk of default occurring over the remaining expected life from the reporting
date and the date of initial recognition. The Group considers reasonable and supportable information that is relevant
and available without undue cost or effort for this purpose. This includes quantitative and qualitative information
and also, forward-looking analysis.
An exposure will migrate through the expected credit loss (ECL) stages as asset quality deteriorates. If, in a subsequent
period, asset quality improves and also reverses any previously assessed significant increase in credit risk since
origination, then the provision for doubtful debts reverts from lifetime ECL to 12-months ECL. Exposures that have
not deteriorated significantly since origination are considered to have a low credit risk. The provision for doubtful
debts for these financial assets is based on a 12-months ECL. When an asset is uncollectible, it is written off against
the related provision. Such assets are written off after all the necessary procedures have been completed and the
amount of the loss has been determined. Subsequent recoveries of amounts previously written off reduce the
amount of the expense in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.
The Group assesses whether the credit risk on an exposure has increased significantly on an individual or collective
basis. For the purposes of a collective evaluation of impairment, financial instruments are accompanied on the basis
of shared credit risk characteristics, taking into account instrument type, credit risk ratings, date of initial recognition,
remaining term to maturity, industry, geographical location of the borrower and other relevant factors
5.3 Financial assets Note 2023 2022
$’000 $’000
5.3.1 Non-current
Bank guarantees 773 624
Financial assets at FVPL 5.3.2 231 212
1,004 836
5.3.2 Accounting policy
a. Recognition and Measurement
The Group classifies the equity investments for which the entity has not elected to recognise fair value gains and losses
through OCI as financial assets at fair value through profit or loss (FVPL). Refer to note 5.8.1c
5.4 Other assets 2023 2022
$’000 $’000
5.4.1 Current
Prepayments 564 490
Other deposits 11 7
575 497
P a g e | 35
ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 5 Financial assets and financial liabilities (cont.)
5.5 Trade and other payables 2023 2022
$’000 $’000
5.5.1 Current
Trade payables 4,600 5,143
Employees’ remuneration – commissions payable 4,761 4,677
Payroll tax 512 487
Superannuation – employees 187 174
Sundry creditors and accrued expenses 3,832 2,927
GST and PAYG payable 3,307 1,510
17,199 14,918
5.5.2 Trade payables are unsecured, non-interest bearing and are normally settled on 30-day terms. Other payables are
unsecured non-trade payables, non-interest bearing, and have an average term of 1 month.
5.5.3 Accounting policy
a. Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which
are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are
presented as current liabilities unless payment is not due within 12 months.
5.6 Borrowings Note 2023 2022
$’000 $’000
5.6.1 Current
Bank loans 5.6.3 - 5,000
- 5,000
5.6.2 Non-current
Bank loans 5.6.3 8,400 -
8,400 -
5.6.3 On 25 July 2022 the Company announced that it entered into an Amendment Deed in respect of its primary secured debt
facility (the Facility) with Macquarie Bank Limited (MBL). Pursuant to the terms of the Amendment Deed the Facility has
been amended to (of which the conditions were met:
◼ Facility Increased to $8,400K ($3,400K to assist in funding the Bushby & Co acquisition).
◼ Term 3 years, expiring on 20 July 2025.
◼ Interest Rate To remain at 3.75% p.a. + 30-day BBSW.
◼ Establishment / Extension Fee 1.5% of total limits paid on settlement.
◼ Financial Covenants MBL loan to rent roll valuation ratio: 40% and Cash Interest Cover > 3.0x.
◼ Permitted Distributions Cash payment of interest on the Peters Investments Convertible Notes (quarterly),
following evidence of covenant compliance.
◼ Permitted Acquisitions Up to $500K per acquisition and no more than $1,000K in any 12-month period.
5.6.4 Part sale of trail asset/waiver of covenant
During the year, concurrently with the approval of the part sale of the Westvalley Corporation Pty Ltd trail asset (refer note
11.2), MBL provided a covenant waiver in relation to the interest cover ratio (ICR) for the period December 2022,
March 2023, and June 2023 quarter ends, as part of the normal quarterly reporting requirements.
P a g e | 36
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 5 Financial assets and financial liabilities (cont.)
5.6 Borrowings (cont.)
5.6.5 Assets pledged as security
Security is held over all the Group companies.
5.6.6 Financing facilities available
At balance date, the following Total facilities Facilities used Facilities unused
financing facilities had been 2023 2022 2023 2022 2023 2022
negotiated and were available: $’000 $’000 $’000 $’000 $’000 $’000
Bank and other loans 8,400 5,000 (8,400) (5,000) - -
Total facilities at balance date 8,400 5,000 (8,400) (5,000) - -
5.6.7 Accounting policy
a. Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured
at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised
in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of
loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility
will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it
is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services
and amortised over the period of the facility to which it relates.
Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged,
cancelled, or expired. The difference between the carrying amount of a financial liability that has been extinguished or
transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is
recognised in profit or loss as other income or finance costs. Borrowings are classified as current liabilities unless the Group
has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.
5.7 Financial liabilities Note 2023 2022
$’000 $’000
5.7.1 Current
Convertible note: 5.7.3,5.7.4
◼ Debt component - 2,039
◼ Derivative financial liability conversion option - 1,982
- 4,021
5.7.2 Non-current
Convertible note: 5.7.3,5.7.4
◼ Debt component 1,489 -
◼ Derivative financial liability conversion option 1,555 -
3,044 -
5.7.3 Reconciliation of convertible notes
Opening balance:
◼ Debt component 2,039 895
◼ Derivative financial liability conversion option 1,982 3,988
4,021 4,883
◼ Interest charged 2,150 1,144
◼ Fair value movement: Derecognition (1,278) -
Fair value changes (1,849) (2,006)
Carrying value of liabilities at reporting date 3,044 4,021
P a g e | 37
ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 5 Financial assets and financial liabilities (cont.)
5.7 Financial liabilities (cont.)
5.7.4 On 5 January 2021, the Company issued 5,000,000 convertible notes to Peters Investments Pty Ltd (the Noteholder) to
raise $5,000,000. On 28 January 2021, of the 5,000,000 notes, Peter Investments converted $2,056,634 of debt and
interest into 76,171,620 shares:
◼ Interest rate higher of 8% per annum and the interest rate on the Macquarie Bank Limited (MBL) loan
◼ Facilitation fee 3% fee equalling $150,000 which is capitalised and added to the face value of the note.
◼ Security Second security ranking behind MBL.
◼ Options 12,000,000 Options (exercised at the $0.027 on 28 January 2021).
◼ Term/Maturity Date On 22 July 2022 (and approved at the Company’s AGM on 18 November 2022), the Company
signed a Deed of Variation to Convertible Note Agreement, to extend the terms of the
convertible note to 22 January 2026.
Unless converted to shares, the notes will be repaid in cash on the earlier of 22 January 2026 or
when all amounts owing by the Company to MBL have been repaid.
◼ Conversion At the Noteholders election the notes can be converted into shares in the Company at the lower
of $0.027 per share and the issue price of shares offered under any subsequent capital raising
completed by the Company to raise over $1,000,000 on or before maturity date.
◼ Other Conditions The Noteholder will have the first right of refusal to replace the MBL loan on commercial terms
and conditions to be reasonably agreed between the Noteholder and The Agency.
With the extension of the convertible note from 31 March 2023 to 22 January 2026 agreed at the Company annual general
meeting on 18 November 2022, this resulted in a substantial modification of the existing convertible note. The existing
embedded derivative was derecognised resulting in a gain to the profit and loss of $1,278K. A new embedded derivative
liability was recognised at its fair value and included as a transaction cost of the deemed new convertible loan, which will be
amortised over the new terms of the note.
The transaction costs previously capitalised on the derecognised convertible note and not yet amortised, amounting to
$873K, was accelerated to the end of the term and realised through profit or loss.
5.7.5 Accounting policies and Critical Estimates - Convertible notes
a. Debt component
The conversion feature of convertible notes (notes) is required to be separated from the notes and is accounted for
separately as a derivative financial liability. As a result, the notes are initially recognised at a discounted amount. The
discount is amortised as interest expense using the effective interest method over the terms of the notes.
b. Embedded derivative – Conversion feature
The conversion feature in the notes represents the embedded derivative financial instrument in the host debt contract.
The conversion feature represents the Group’s obligation to issue Company shares at a fixed price should noteholders
exercise their conversion option.
The embedded derivatives are carried in the Statement of Financial Position at their estimated fair value taking market
participant assumptions into consideration, with any changes in fair value recognised in the Statement of Profit or Loss
and Other Comprehensive Income.
These values were calculated using the Black-Scholes option pricing model, applying the following inputs:
Grant Date Balance Date
Face Value: $5,150,000 $3,931,373
Share price: $0.035 $0.026
Conversion price: $0.027 $0.027
Expiry date 31 March 2023 22 January 2026
Expected share price volatility: 100% 77.0%
Risk-free interest rate: 1.90% 4.03%
Value per conversion right $0.0219 $0.0125
P a g e | 38
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 5 Financial assets and financial liabilities (cont.)
5.7 Financial liabilities (cont.)
c. Settlement of Convertible Notes
Where notes are settled by issue of shares, the related financial liabilities are derecognised at their carrying value with
the corresponding increase to share capital. Any costs incurred are recognised in profit or loss.
Where notes are settled by payment of cash, the related financial liabilities are derecognised at their carrying value and
the difference between total cash consideration paid and the carrying value of the financial liabilities derecognised is
recognised in profit or loss.
d. Capitalised transaction costs
The Company incurred transaction costs upon the issuance of the notes. Transaction costs relating to the notes have
been allocated between the debt component and the conversion derivatives using the relating proportions of these on
initial measurement of the instruments. Costs attributed to the debt component are amortised to finance expense over
the term of the notes using the effective interest method. Costs allocated to the conversion derivatives are immediately
recognised in the Statement of Profit or Loss and Other Comprehensive Income.
5.8 Other Significant Accounting Policies related to Financial Assets and Liabilities
5.8.1 Investments and other financial assets
a. Classification
The Group classifies its financial assets in the following measurement categories:
◼ those to be measured subsequently at fair value (either through OCI or through profit or loss), and
◼ those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual terms
of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in
equity instruments that are not held for trading, this will depend on whether the group has made an irrevocable
election at the time of initial recognition to account for the equity investment at fair value through other
comprehensive income (FVOCI).
The Group reclassifies debt investments when and only when its business model for managing those assets changes.
b. Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Group
commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from
the financial assets have expired or have been transferred and the Group has transferred substantially all the risks
and rewards of ownership.
c. Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at
fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the
financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss. Financial assets
with embedded derivatives are considered in their entirety when determining whether their cash flows are solely
payment of principal and interest.
P a g e | 39
ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 5 Financial assets and financial liabilities (cont.)
5.8 Other Significant Accounting Policies related to Financial Assets and Liabilities (cont.)
i. Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset
and the cash flow characteristics of the asset. There are three measurement categories into which the Group
classifies its debt instruments:
◼ Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent
solely payments of principal and interest are measured at amortised cost. Interest income from these
financial assets is included in finance income using the effective interest rate method. Any gain or loss arising
on derecognition is recognised directly in profit or loss and presented in other gains/(losses). Impairment
losses are presented as separate line item in the statement of profit or loss.
◼ FVOCI: Assets held for collection of contractual cash flows and for selling the financial assets, where the
assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements
in carrying amounts are taken through OCI, except for the recognition of impairment gains or losses, interest
income and foreign exchange gains and losses which are recognised in profit or loss. When a financial asset
is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit
or loss and recognised in other gains/(losses). Interest income from these financial assets is included in
finance income using the effective interest rate method. Foreign exchange gains and losses are presented in
other gains/(losses) and impairment expenses are presented separately in the statement of profit or loss.
◼ FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss
on a debt investment that is subsequently measured at FVPL is recognised in profit or loss and presented net
within other gains/(losses) in the period in which it arises.
ii. Equity instruments
The Group subsequently measures all equity investments at fair value. Where the group’s management has elected
to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair
value gains and losses to profit or loss following the derecognition of the investment. Dividends from such
investments continue to be recognised in profit or loss as other income when the group’s right to receive payments
is established.
Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the statement of profit
or loss as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at
FVOCI are not reported separately from other changes in fair value.
d. Impairment
The Group assesses on a forward-looking basis, the expected credit losses associated with its debt instruments carried
at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant
increase in credit risk.
For trade receivables, the Group applies the simplified approach permitted by AASB 9, which requires expected lifetime
losses to be recognised from initial recognition of the receivables.
P a g e | 40
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 6 Non-financial assets and financial liabilities
6.1 Property, plant, and equipment 2023 2022
$’000 $’000
Plant and equipment – at cost 2,247 1,525
Accumulated depreciation (1,533) (893)
714 632
Leasehold improvements – at cost 4,575 4,141
Accumulated amortisation (3,508) (2,837)
1,067 1,304
Total plant and equipment 1,781 1,936
6.1.1 Movements in Carrying Amounts Note Plant and Leasehold
Equipment improvements Total
5 $’000 $’000 $’000
Carrying amount at 1 July 2021 528 1,050 1,578
Additions 271 694 965
Depreciation expense (167) (440) (607)
Carrying amount at 30 June 2022 632 1,304 1,936
- - -
Carrying amount at 1 July 2022 632 1,304 1,936
Acquisition of subsidiary 11.1.2b 133 - 133
Additions 260 189 449
Depreciation expense (311) (426) (737)
Carrying amount at 30 June 2023 714 1,067 1,781
- - -
P a g e | 41
ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 6 Non-financial assets and financial liabilities (cont.)
6.1 Property, plant, and equipment (cont.)
6.1.2 Accounting policy
a. Recognition and measurement
Items of plant and equipment are measured on the cost basis and carried at cost less accumulated depreciation (see
below) and impairment losses (see accounting policy 6.5.1 Impairment of non-financial assets).
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets
includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working
condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they
are located, and an appropriate proportion of production overheads. 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 plant and equipment as a replacement only if it is eligible
for capitalisation.
Where considered material, the carrying amount of property, plant, and equipment is reviewed annually by Directors
to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the
basis of the expected net cash flows that will be received from the asset’s employment and subsequent disposal. The
expected net cash flows have not been discounted to their present values in determining recoverable amounts.
Where parts of an item of property, plant, and equipment have different useful lives, they are accounted for as separate
items of plant and equipment.
b. Subsequent costs
The cost of replacing part of an item of plant and equipment is recognised in the carrying amount of the item if it is
probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured
reliably. Any costs of the day-to-day servicing of plant and equipment are recognised in the income statement as an
expense as incurred.
c. Depreciation
The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding freehold land, is
depreciated on either a straight-line basis or diminishing balance basis, whichever is considered most appropriate, over
their useful lives to the Group commencing from the time the asset is held ready for use. Leasehold improvements are
amortised over the remaining term of the lease.
Depreciation rates and methods are reviewed annually for appropriateness. The depreciation rates used for the current
and comparative period are:
Class 2023 2022
% %
◼ Leasehold Improvements Over term of lease Over term of lease
◼ Plant and equipment:
Office furniture and fittings 10 10
Office equipment 25 25
Motor vehicle 25 25
The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in excess of the
recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected
net cash flows which will be received from the assets’ employment and subsequent disposal. The expected net cash
flows have not been discounted to their present values in determining recoverable amounts.
d. Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits
are expected from its use or disposal. The gain or loss on disposal of an item of property, plant and equipment is
determined by comparing the proceeds from disposal with the carrying amount of the property, plant and equipment
and is recognised net within other income/other expenses in profit or loss. When revalued assets are sold, any related
amount included in the revaluation reserve is transferred to retained earnings.
P a g e | 42
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 6 Non-financial assets and financial liabilities (cont.)
6.2 Leases 2023 2022
$’000 $’000
6.2.1 Right of use assets
Properties 3,243 2,684
Printing equipment 668 921
3,911 3,605
6.2.2 Lease liabilities
Current 1,761 1,836
Non-current 3,394 2,555
5,155 4,391
6.2.3 Additions to the right-of-use assets 2,358 238
6.2.4 Amounts recognised in the statement of profit or loss:
◼ Depreciation charge of right-of-use assets:
Properties 1,498 1,320
Printing equipment 279 269
1,777 1,589
◼ Interest expense (included in finance cost) 326 264
6.2.5 Total cash outflow for leases 2,471 1,956
6.2.6 Accounting policy
a. Recognition and measurement
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is
available for use by the Group.
i. Right of Use Asset
The Group recognises a right of use asset at the commencement date of the lease. The right of use asset is initially
measured at cost. The cost of right of use assets includes the amount of lease liabilities recognised, adjusted for any
lease payments made at or before the commencement date, plus initial direct costs incurred and an estimate of
costs to dismantle, remove or restore the leased asset, less any lease incentives received.
Right-of-use assets are measured at cost comprising the following:
◼ the amount of the initial measurement of lease liability
◼ any lease payments made at or before the commencement date less any lease incentives received
◼ any initial direct costs, and
◼ restoration costs.
Subsequent to initial measurement, the right of use asset is depreciated on a straight-line basis over the shorter of
the lease term and the estimated useful life as follows:
◼ Properties 24 – 60 months
◼ Printing equipment 36 – 60 months
Right of use assets are subject to impairment and are adjusted for any remeasurement of lease liabilities.
P a g e | 43
ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 6 Non-financial assets and financial liabilities (cont.)
6.2 Leases (cont.)
ii. Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities at the present value of lease payment
to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments)
less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts
expected to be paid under residual value guarantees. The lease payments also include the exercise price of a
purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease,
if the assessment of lease term reflects the Group exercising the option to terminate. The variable lease payments
that do not depend on an index or a rate are recognised as expense in the period on which the event or condition
that triggers the payments occurs. The present value of lease payments is discounted using the interest rate implicit
in the lease or, if the rate cannot be readily determined, the Group's incremental borrowing rate.
The lease liability is measured at amortised cost using the effective interest method. After the commencement date,
the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments
made.
The amount of lease liability is remeasured when there is a change in future lease payments arising from a change
in an index or rate, if there is a change in the Group's estimate of the amount expected to be payable under a residual
value guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension, or
termination option. When the lease liability is remeasured, a corresponding adjustment is made to the carrying
amount of the right of use asset, or is recognised in profit or loss if the carrying amount of the right of use asset has
been reduced to zero.
The Group has elected not to recognise right of use assets and lease liabilities for short term leases that have a lease
term of 12 months or less and do not contain a purchase option, and leases of low value assets. The Group recognises
the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
b. Extension and termination options
Extension options are included in the property leases of the Group.
6.2.7 Critical judgements in determining the lease term
In determining the lease term, management considers all facts and circumstances that create an economic incentive to
exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options)
are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).
For leases of properties and printing equipment, the following factors are normally the most relevant:
◼ If there are significant penalties to terminate (or not extend), the Group is typically reasonably certain to extend (or
not terminate).
◼ If any leasehold improvements are expected to have a significant remaining value, the Group is typically reasonably
certain to extend (or not terminate).
◼ Otherwise, the Group considers other factors including historical lease durations and the costs and business
disruption required to replace the leased asset.
The lease term is reassessed if an option is actually exercised (or not exercised) or the Group becomes obliged to exercise
(or not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant change in
circumstances occurs, which affects this assessment, and that is within the control of the lessee.
P a g e | 44
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 6 Non-financial assets and financial liabilities (cont.)
6.3 Intangible assets Note 2023 2022
$’000 $’000
Goodwill 6.3.3 12,383 10,704
12,383 10,704
Rent Roll and trail book 6.3.1,6.3.5a 25,968 21,135
Accumulated amortisation (14,666) (11,022)
11,302 10,113
Others 989 611
Accumulated amortisation and impairment (217) (113)
772 498
Total intangibles 24,457 21,315
6.3.1 Included in the 2023 Rent roll and trial book assets are additions of $4,910K related to the acquisition of Bushby & Co.
Pty Ltd, as disclose note 11.1.2, and $210K in relation to the purchase of an additional Perth-based rent roll during the
period. Further to this, as per note 11.2, the Group sold a portion of its Westvalley Corporation Pty Ltd trail asset with a
carrying value of $79K at the time of sale.
6.3.2 Movements in Carrying Note Goodwill Rent Roll Other Total
Amounts $’000 $’000 $’000 $’000
Carrying amount at 1 July 2021 10,704 13,283 253 24,240
Additions - - 319 319
Amortisation expense - (3,170) (74) (3,244)
Carrying amount at 30 June 2022 10,704 10,113 498 21,315
- - - -
Carrying amount at 1 July 2022 10,704 10,113 498 21,315
Acquisition of subsidiary 11.1.2b 1,679 4,910 - 6,589
Additions - 209 378 587
Disposals - (79) - (79)
Amortisation expense - (3,851) (104) (3,955)
Carrying amount at 30 June 2023 12,383 11,302 772 24,457
- - - -
P a g e | 45
ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 6 Non-financial assets and financial liabilities (cont.)
6.3 Intangible assets (cont.)
6.3.3 Allocation of goodwill to cash-generating units (CGU)
Goodwill has been allocated for impairment testing purposes to the CGU. Before recognition of impairment losses, the
carrying amount of goodwill was allocated to CGU as follows.
Note 2023 2022
$’000 $’000
◼ Top Level Real Estate - Residential sales 10,658 10,658
◼ Bushby & Co. Pty Ltd 11.1.2 1,679 -
◼ Settlements 46 46
Carrying amount as at 30 June 12,383 10,704
- -
The recoverable amount of the Group’s Top Level Real Estate CGU has been determined based on a value in use
calculation which uses cash flow projections based on financial budgets approved by Directors utilising the following key
assumptions:
◼ FY2024 approved budget has been used in year 1 to estimate cash flows, with a 0% growth used in year 2. A 5%
growth rate has been applied each year from year 3 to 5;
◼ Discount rate is based upon a weighted average cost of capital of 15%.
The Directors believe that any reasonably possible further change in the key assumptions on which recoverable amount
is based would not cause Top Level Real Estate CGU carrying amount to exceed its recoverable amount.
6.3.4 Accounting policy
a. Intangible assets acquired separately
Intangible assets acquired separately are recorded at cost less accumulated amortisation and impairment. Amortisation
is charged on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method is
reviewed at the end of each annual reporting period, with any changes in these accounting estimates being accounted
for on a prospective basis.
b. Intangible assets acquired in a business combination
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair
value at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life
intangible assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible
assets are subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit
or loss arising from derecognition of intangible assets are measured as the difference between net disposal proceeds
and the carrying amount of the intangible asset. The method and useful lives of finite life intangible assets are reviewed
annually. Changes in the expected pattern of consumption or useful life are accounted for prospectively by changing the
amortisation method or period.
c. Trail Book intangible assets
Trail book contracts and licences have a finite useful life and are carried at cost less accumulated amortisation and
impairment losses. Amortisation is calculated using the straight-line method to allocate the cost of trail book and licences
over their estimated useful lives.
d. Property Management intangible assets
The property management rights are expected to have a finite life and are therefore amortised over their useful lives.
The investment is carried at cost less accumulated amortisation and impairment losses.
Amortisation is calculated using the straight-line method to allocate the cost of the rent roll over its estimated useful
lives which is based on comparable market evidence.
e. Business and domain names
Business and domain names are recognised at cost of acquisition. They have a finite useful life and are amortised on a
systematic basis based on the future economic benefits to be obtained over its useful life. Amortisation is calculated
using the straight-line method.
P a g e | 46
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 6 Non-financial assets and financial liabilities (cont.)
6.3 Intangible assets (cont.)
f. Subsequent measurement
The following useful lives are used in the calculation of amortisation:
Class 2023 2022
% %
◼ Trail Book and Rent Roll intangible assets 15 15
◼ Business and domain names 10 10
g. Goodwill
Goodwill arising on an acquisition of a business is carried at cost as established at the date of the acquisition of the
business (see note 12.1.1) less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the Group's cash-generating units (CGU) (or
groups of CGUs) that is expected to benefit from the synergies of the combination.
A CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an
indication that the unit may be impaired. If the recoverable amount of the CGU is less than its carrying amount, the
impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the
other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill
is recognised directly in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.
On disposal of the relevant CGU, the attributable amount of goodwill is included in the determination of the profit or
loss on disposal.
6.3.5 Key estimates and Critical Judgements– Impairment of intangibles
a. Impairment of goodwill and rent roll
Determining whether goodwill is impaired requires an estimation of the value-in-use of the cash generating units
(CGU) to which goodwill has been allocated. The value-in-use calculation requires management to estimate the
future cash flows expected to arise from the CGU and a suitable discount rate in order to calculate present value.
Where the actual future cash flows are less than expected, an impairment loss may arise.
Included within the Top Level CGU (acquired in 2019) is a rent roll asset of $6,885K (2023: $10,013K). This same CGU
also included goodwill of $10,658K, relating to sales (2023: $10,658K).
For the rent roll assets, the recoverable amounts of these CGU's are derived from market transactional evidence in
relation to their fair value. Management have determined that a multiple of 3.8 for residential property and 2.75 for
commercial property for the Top Level CGU (based on an independent expert opinion), multiplied by the annual rent
roll income is an appropriate measure of the fair value of the rent roll assets. Fair value less cost to sell of the CGU
was classified on a level 2 basis. No impairment resulted.
Management performed a goodwill impairment test of the Top Level Real Estate Sales CGU taking a conservative
approach in preparing its value in use calculation in light of market uncertainty resulting from increases in interest
rates to curb inflationary pressures. Management applied a discount rate of 15% resulting in no impairment loss for
2023 (2022: 15%). To evaluate the recoverable amount of the CGU, a terminal value has been assumed after the fifth
year and includes a growth rate in the cash flow of 0% into perpetuity (2022: 0%). The discount rates used reflects
the risks specific to the CGU.
The Group has also conducted a sensitivity analysis on the impairment test of the CGU. This was based on changes
to key assumptions that are considered by management to be reasonably possible. This included up to a 4% increase
in the discount rate, and a 4% reduction in the long-term growth rate. The sensitivity test shows that no impairment
would arise under each scenario.
P a g e | 47
ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 6 Non-financial assets and financial liabilities (cont.)
6.4 Provisions 2023 2022
$’000 $’000
6.4.1 Current
Employee entitlements 2,196 1,814
Future fund referrals 502 658
2,698 2,472
6.4.2 Non-current
Employee entitlements 92 53
Make good provisions 148 148
Future fund referrals 47 20
287 221
6.4.3 Movements in Carrying Amounts Note Employee Make good Future fund
entitlements provisions referrals Total
$’000 $’000 $’000 $’000
Carrying amount at 1 July 2022 - 1,867 148 678 2,693
Additions 1,402 - - 1,402
Acquisition of subsidiary 11.1.2b 377 - - 377
Disposals - - (105) (105)
Amounts used during the year (1,358) - (24) (1,382)
Carrying amount at 30 June 2023 2,288 148 549 2,985
- - - -
6.4.4 Description of provisions
a. Provision for employee benefits represents amounts accrued for annual leave (AL) and long service leave (LSL). The
current portion for this provision includes the total amount accrued for AL entitlements and the amounts accrued for
LSL entitlements that have vested due to employees having completed the required period of service. The Group does
not expect the full amount of AL or LSL balances classified as current liabilities to be settled within the next 12 months.
However, these amounts must be classified as current liabilities since the Group does not have an unconditional right
to defer the settlement of these amounts in the event employees wish to use their leave entitlement.
b. Make good provision. The Company is required to restore the leased premises to their original condition at the end
of the respective lease terms. A make good provision has been recognised for the present value of the estimated
expenditure required to remove any leasehold improvements. The Directors valued the make good provision based
upon a third-party cost estimate provided to the Company.
c. Provision for Future fund referrals is an incentive scheme provided to property partners for successfully referring
property management and mortgage broking transactions. The referral fees are transferred into an asset growth
model which creates an interest for the future benefit of the Property Partner, maturing after two years, which also
assists to retain staff. The company estimates the value of the future fund referral provision using a probability
weighting model which is based on historic information.
6.4.5 Accounting policy
Provisions are recognised when the Group 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 not recognised for future operating losses.
When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating
to any provision is presented in the statement of comprehensive income net of any reimbursement.
P a g e | 48
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 6 Non-financial assets and financial liabilities (cont.)
6.4 Provisions (cont.)
Provisions are measured at the present value or management's best estimate of the expenditure required to settle the
present obligation at the end of the reporting period.
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 an interest expense.
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion
of the entity, on or before the end of the reporting period but not distributed at the end of the reporting date
6.5 Other Significant Accounting Policies related to Non-Financial Assets and Liabilities
6.5.1 Impairment of non-financial assets
The carrying amounts of the Group's non-financial assets, other than deferred tax assets (see accounting policy at note 4.9)
are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists,
then the asset's recoverable amount is estimated. Goodwill and intangible assets that have an indefinite useful life are not
subject to amortisation and are tested annually for impairment or more frequently if events or changes in circumstances
indicate that they might be impaired. Other assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable
amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are
independent from other assets and groups. Impairment losses are recognised in the income statement, unless the asset has
previously been revalued, in which case the impairment loss is recognised as a reversal to the extent of that previous
revaluation with any excess recognised through the income statement. Impairment losses recognised in respect of cash-
generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce
the carrying amount of the other assets in the unit on a pro rata basis.
The recoverable amount of an asset or cash-generating unit is the greater of its 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 the risks specific to the asset. 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.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has
decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine
the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation and amortisation, if no impairment loss had
been recognised.
P a g e | 49
ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 7 Equity
7.1 Issued capital Note 2023 2022 2023 2022
No. No. $’000 $’000
Fully paid ordinary shares 428,575,921 428,575,921 43,635 43,635
2023 2022 2023 2022
7.1.1 Ordinary shares No. No. $’000 $’000
At the beginning of the year 428,575,921 428,575,916 43,635 43,635
Shares issued during the year:
◼ Conversion of cancelled 7.2.2 - 5 - -
performance shares
Transaction costs relating to share issues - - - -
At reporting date 428,575,921 428,575,921 43,635 43,635
7.1.2 Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in
proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares
present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
7.1.3 Accounting policy
Ordinary issued capital is recorded at the consideration received. Incremental costs directly attributable to the issue of
ordinary shares and share options are recognised as a deduction from equity, net of any related income tax benefit. Ordinary
issued capital bears no special terms or conditions affecting income or capital entitlements of the shareholders.
7.2 Performance equity Note 2023 2022 2023 2022
No. No. $’000 $’000
Performance equity 11,000,000 11,000,000 375 111
2023 2022 2023 2022
7.2.1 Performance equity movement No. No. $’000 $’000
At the beginning of the year 11,000,000 1,555,558 111 -
Performance equity changes during
the year:
◼ Conversion of cancelled 7.2.2 - (1,555,558) - -
performance shares
◼ Issue of performance rights 19.2.2 - 11,000,000 - 111
◼ Expense of issued performance - - 264 -
19.3
rights
At reporting date 11,000,000 11,000,000 375 111
7.2.2 This represents 1,555,558 performance shares that failed to vest (by achieving a 20-day volume VWAP on the ASX which
equals or exceeds 3 times the re-quotation price of $0.02, at any time within 24 months of settlement) and expired. These
performance shares converted to five only ordinary shares during the prior year.
7.2.3 Performance rights will vest and convert into ordinary shares on a one for one basis on achievement of the milestones
described at note 19.2.1. If a milestone is not achieved by the applicable date, the relevant performance rights will
automatically lapse
P a g e | 50
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 7 Equity (cont.)
7.3 Options Note 2023 2022 2023 2022
No. No. $’000 $’000
Options 20,000,000 30,000,000 657 779
2023 2022 2023 2022
7.3.1 Options equity movement No. No. $’000 $’000
At the beginning of the year 30,000,000 333,333 779 1,072
Options movement during the year:
◼ Granted and issued to CEO in 19.2.2 - 30,000,000 - 564
accordance with employment
agreements
◼ Amortisation of granted - - 198 -
options
◼ Expiry of options (10,000,000) (333,333) (320) (17)
◼ Expired legacy option values - - - (840)
At reporting date 20,000,000 30,000,000 657 779
7.4 Reserves Note 2023 2022
$’000 $’000
Share-based payment reserve: - -
◼ Performance rights 7.2 375 111
◼ Options 7.3 657 779
1,032 890
7.4.1 Share-based payment reserve
The share-based payment reserve records the value of options and performance shares or rights issued by the Company
to its employees or consultants.
P a g e | 51
ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
SECTION B. RISK
This section of the notes discusses the Group’s exposure to various risks and shows how these could affect the Group’s financial
position and performance.
Note 8 Financial risk management
8.1 Financial Risk Management Policies
This note presents information about the Group’s exposure to each of the above risks, its objectives, policies and
procedures for measuring and managing risk, and the management of capital.
The Group’s financial instruments consist mainly of deposits with banks, short-term investments, and accounts payable
and receivable.
The Group does not speculate in the trading of derivative instruments.
A summary of the Group’s financial assets and liabilities is shown below:
Floating Fixed Non- Floating Fixed Non-
Interest Interest interest 2023 Interest Interest interest 2022
Rate Rate Bearing Total Rate Rate Bearing Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Financial Assets
◼ Cash and cash equivalents 4,632 - - 4,632 8,216 - - 8,216
◼ Trade and other receivables - - 13,360 13,360 - - 11,248 11,248
◼ Bank guarantees - 773 - 773 - 624 - 624
◼ Investments - - 231 231 - - 212 212
Total Financial Assets 4,632 773 13,591 18,996 8,216 624 11,460 20,300
Financial Liabilities at amortised cost
◼ Trade and other payables - - 17,199 17,199 - - 14,918 14,918
◼ Borrowings 8,400 - - 8,400 5,000 - - 5,000
◼ Leases - 5,155 - 5,155 - 4,391 - 4,391
◼ Financial liabilities - Convertible
notes - 3,044 - 3,044 - 4,021 - 4,021
Total Financial Liabilities 8,400 8,199 17,199 33,798 5,000 8,412 14,918 28,330
Net Financial Assets / (Liabilities) (3,768) (7,426) (3,608) (14,802) 3,216 (7,788) (3,458) (8,030)
8.2 Specific Financial Risk Exposures and Management
The main risk the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk
consisting of interest rate, foreign currency risk and equity price risk. The Group’s overall risk management program
focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial
performance of the Group.
The Board has overall responsibility for the establishment and oversight of the risk management framework. The Board
adopts practices designed to identify significant areas of business risk and to effectively manage those risks in accordance
with the Group’s risk profile. This includes assessing, monitoring and managing risks for the Group and setting appropriate
risk limits and controls. The Group is not of a size nor is its affairs of such complexity to justify the establishment of a
formal system for risk management and associated controls. Risk management is carried out by the full Board as the
Group believes that it is crucial for all board members to be involved in this process. The Chairman, with the assistance
of senior management as required, has responsibility for identifying, assessing, treating and monitoring risks and
reporting to the Board on risk management.
P a g e | 52
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 8 Financial risk management (cont.)
8.2.1 Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract
obligations that could lead to a financial loss to the Group.
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient
collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group only transacts
with entities that are rated the equivalent of investment grade and above. This information is supplied by independent
rating agencies where available and, if not available, the Group uses publicly available financial information and its own
trading record to rate its major customers. The Group’s exposure and the credit ratings of its counterparties are
continuously monitored, and the aggregate value of transactions concluded is spread amongst approved counterparties.
Credit exposure is controlled by counterparty limits that are reviewed and approved by the risk management committee
annually.
The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and
other receivables.
◼ Credit risk exposures
The maximum exposure to credit risk, arising from cash and cash equivalents and trade receivables, is limited to the
carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial
position and notes to the financial statements.
Credit risk related to balances with banks and other financial institutions is managed by the Group in accordance with
approved Board policy. Such policy requires that surplus funds are only invested with financial institutions residing in
Australia, wherever possible. There are no significant concentrations of credit risk, whether through exposure to
individual customers, specific industry sectors and/or regions.
◼ Impairment losses
The ageing of the Group’s current trade and other receivables at reporting date was as follows:
Past due but Past due but
Gross Impaired Net not impaired Gross Impaired Net not impaired
2023 2023 2023 2023 2022 2022 2022 2022
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Trade receivables
Not past due 7,772 - 7,772 - 6,432 - 6,432 -
Past due up to 30 days 626 - 626 626 512 - 512 512
Past due 31 days to 90 days 248 - 248 248 208 - 208 208
Past due over 90 days 888 (187) 701 701 950 (187) 763 763
9,534 (187) 9,347 1,575 8,102 (187) 7,915 1,483
Other receivables
Not past due 4,067 (54) 4,013 - 3,383 (50) 3,333 -
Total - - 13,601 (241) 13,360 1,575 11,485 (237) 11,248 1,483
Included in the aged trade receivables are invoices raised for commission on property developments which are
unconditional however are payable upon completion.
8.2.2 Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity 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 Group’s reputation.
Ultimate responsibility for liquidity risk management rests with the Board, who have built an appropriate liquidity risk
management framework for the management of the Group’s short, medium and long-term funding and liquidity
management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and
reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles
of financial assets and liabilities. The Group’s ability to raise debt and / or equity funding in the market is paramount in
this regard.
P a g e | 53
ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 8 Financial risk management (cont.)
The Group has no access to credit standby facilities or arrangements for further funding or borrowings in place. The non-
interest bearing financial liabilities the Group had at the end of the reporting period were trade and other payables
incurred in the normal course of the business. These were and were due within the normal 30-60 days terms of creditor
payments. Interest-bearing liabilities of the Group comprised borrowings (note 5.6), convertible notes (note 5.7), and
leases (note 6.2).
◼ Contractual Maturities
The table below analyses the Group’s financial liabilities and assets into relevant maturity groupings based on the
remaining period at the end of the reporting period to the contractual maturity date. The amounts disclosed in the
table are the contractual undiscounted cash flows:
Within 1 Year Greater Than 1 Year Total
2023 2022 2023 2022 2023 2022
$’000 $’000 $’000 $’000 $’000 $’000
Financial liabilities due for payment
◼ Trade and other payables 17,199 14,918 - - 17,199 14,918
◼ Borrowings - 5,000 8,400 - 8,400 5,000
◼ Financial liabilities - convertible notes - 4,021 3,044 - 3,044 4,021
◼ Leases 1,761 1,836 3,394 2,555 5,155 4,391
Total contractual outflows 18,960 25,775 14,838 2,555 33,798 28,330
Financial assets
◼ Cash and cash equivalents 4,632 8,216 - - 4,632 8,216
◼ Trade and other receivables 12,661 11,103 699 145 13,360 11,248
◼ Bank guarantees and restricted cash - - 773 624 773 624
◼ Investments - - 231 212 231 212
Total anticipated inflows 17,293 19,319 1,703 981 18,996 20,300
Net outflow on financial instruments (1,667) (6,456) (13,135) (1,574) (14,802) (8,030)
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier or at
significantly different amounts.
8.2.3 Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will
affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management
is to manage and control market risk exposures within acceptable parameters, while optimising the return.
The Group’s activities minimally expose it to the financial risks of changes in foreign currency exchange rates, commodity
prices and exchange rates. The Group does not enter into derivative financial instruments including foreign exchange
forward contracts to hedge against financial risk. There has been no change to the Group’s exposure to market risks or
the manner in which it manages and measures the risk from the previous period.
a. Interest rate risk
The Group are exposed to interest rate risk as the Group borrows funds at both fixed and floating interest rates. The
risk is managed by the Group by maintaining an appropriate mix between fixed and floating rate borrowings.
The Group’s policy is to monitor the interest rate yield curve out to six months to ensure a balance is maintained
between the liquidity of cash assets and the interest rate return. Cash at bank and in hand earns interest at floating
rates based on daily bank deposit rates. The Group does not have any receivables or payables that may be affected
by interest rate risk.
b. Foreign exchange risk
The Group is not exposed to any material foreign exchange risk.
P a g e | 54
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 8 Financial risk management (cont.)
c. Price risk
Price risk relates to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market prices. The Group does not presently hold material amounts subject to price risk. As such the
Board considers price risk as a low risk to the Group.
8.2.4 Sensitivity Analyses
The Group is not exposed to any material sensitivities.
8.2.5 Net Fair Values
a. Fair value estimation
The fair values of financial assets and financial liabilities are presented in the table in note 8.1 and can be compared
to their carrying values as presented in the statement of financial position. Fair values are those amounts at which
an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length
transaction.
Financial instruments whose carrying value is equivalent to fair value due to their nature include:
◼ Cash and cash equivalents;
◼ Trade and other receivables; and
◼ Trade and other payables.
The methods and assumptions used in determining the fair values of financial instruments are disclosed in the
accounting policy notes specific to the asset or liability.
Note 9 Capital Management
9.1 Capital
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while
maximising the return to stakeholders through the optimisation of the debt and equity balance.
Capital is defined as the combination of contributed equity, reserves and net debt (borrowings less cash). The Board is
responsible for monitoring and approving the capital management framework within which management operates. The
Group’s objective when managing capital is to safeguard its ability to continue as a going concern, so that it can continue
to provide returns for shareholders and benefits for other stakeholders such as employees. The Group focuses on
interrelated financial parameters, including its gearing ratio, earnings growth, average cost of debt, gearing, weighted
average debt maturity and borrowing capacity. These are taken into account when the Group makes decisions on how
to invest its capital and evaluate its existing investments.
The capital structure of the Group can be changed by paying distributions to shareholders, returning capital to
shareholders, issuing new shares or selling assets.
9.2 Working Capital
Note 2023 2022
The working capital position of the Group was as follows: $’000 $’000
Cash and cash equivalents 5.1 4,632 8,216
Trade and other receivables 5.2.1 12,661 11,103
Other current assets 5.4.1 575 497
Trade and other payables 5.5.1 (17,199) (14,918)
Borrowings 5.6.1 - (5,000)
Financial liabilities 5.7.1 - (4,021)
Leases 6.2.2 (1,761) (1,836)
Current provisions 6.4 (2,698) (2,472)
Working capital position (3,790) (8,431)
P a g e | 55
ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
SECTION C. GROUP STRUCTURE
This section provides information which will help users understand how the Group structure affects the financial position and
performance of the Group as a whole. In particular, there is information about:
(a) changes to the structure that occurred during the year as a result of business combinations and the disposal of a discontinued
operation.
(b) transactions with non-controlling interests, and
(c) interests in joint operations.
A list of significant subsidiaries is provided in note 10 below.
Note 10 Interest in subsidiaries
10.1 Information about principal subsidiaries
The subsidiaries listed below have share capital consisting solely of ordinary shares which are held directly by the Group
and the proportion of ownership interest held equals the voting rights held by the Group. Investments in subsidiaries are
accounted for at cost. Each subsidiaries’ country of incorporation is also its principal place of business, being Australia:
Entity name Class of Percentage Owned Entity name Class of Percentage Owned
Shares 2023 2022 Shares 2023 2022
◼ Agency Partners WA Pty Ltd Ord. 100 100 ◼ The Agency Project Sales QLD Pty Ord. 100 100
◼ Ausnet Financial Planning Ord. 100 100 Ltd
Services Pty Ltd ◼ The Agency Project Sales VIC Pty Ord. 100 100
◼ Ausnet Financial Pty Ltd Ord. 100 100 Ltd
◼ The Agency Property Ord. 100 100
◼ Ausnet Property Investment Fund Ord. 100 100
Pty Ltd Management NSW Pty Ltd
◼ The Agency MDC QLD Pty Ltd Ord. 100 100
◼ Ausnet Real Estate Services Pty Ord. 100 100
Ltd ◼ The Agency MDC Pty Ltd Ord. 100 100
◼ Bushby & Co. Pty Ltd Ord. 100 N/A ◼ The Agency Real Estate Pty Ltd Ord. 100 100
◼ Courtesy Real Estate (NSW) Pty Ord. 100 100 ◼ The Agency Sales NSW Pty Ltd Ord. 100 100
Ltd ◼ The Agency Sales QLD Pty Ltd Ord. 100 100
◼ Jelina Holdings Pty Ltd Ord. 100 100 ◼ The Agency Sales VIC Pty Ltd Ord. 100 100
◼ Move Property Solutions Pty Ltd Ord. 100 100 ◼ The Agency Strata Pty Ltd Ord. 100 100
◼ S.J. Laing & Son Pty Ltd Ord. 100 100 ◼ The Real Estate Group Australia Ord. 100 100
◼ The Agency Auctions NSW Pty Ltd Ord. 100 100 Pty Ltd
◼ The Agency Canberra Pty Ltd Ord. 100 100 ◼ Top Level Real Estate Holdings Pty Ord. 100 100
◼ The Agency Commercial Real Ord. 100 100 Ltd
Estate Pty Ltd ◼ Top Level Real Estate Pty Ltd Ord. 100 100
◼ The Agency Marketing Pty Ltd Ord. 100 100 ◼ Top Level Real Estate Sales Pty Ltd Ord. 100 100
◼ The Agency Project Sales NSW Pty Ord. 100 100 ◼ Value Partner Program Pty Ltd Ord. 100 100
Ltd ◼ Vision Capital Management Ltd Ord. 100 100
◼ Westvalley Corporation Pty Ltd Ord. 100 100
P a g e | 56
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 11 Business combinations
11.1 Acquisition of Bushby & Co Pty Ltd
On 22 July 2022, the Company completed a share sale and purchase agreement (SPA) with the owners of Bushby & Co.
Pty Ltd (Bushby & Co) pursuant to which The Agency acquired all the issued share capital of Bushby & Co. The acquisition
has been provisionally accounted for.
11.1.1 Consideration
The consideration for the acquisition will be funded via a financing facility with the Company’s primary funder Macquarie
Bank and out of existing cash reserves. The consideration for the Acquisition consists of:
a. a cash deposit of $210K which was paid on the date of the SPA, followed by a cash payment of $4,190K at completion,
and a cash payment of $312K which consists of a retention payment payable by The Agency, 90 days after the
completion date subject to a retention adjustment;
b. any management fee uplift in relation to rent roll properties, which (if payable) will be paid by The Agency six months
after the completion date;
c. any incentive payments, which (if payable) will be paid by The Agency in the first two years following completion; and
d. any exchanged contract commissions in relation to pre-completion property contracts commission, which (if payable)
will be paid by The Agency at the end of each calendar month.
11.1.2 Purchase consideration and fair value of net assets acquired:
a. Consideration Note $’000
Cash payment, net of cash acquired 11.1.1a 4,400
Retention amount 11.1.1a 312
Management fee uplift, net of adjustments 11.1.1b 120
Deferred incentive consideration 11.1.1c 298
5,130
b. The fair values of the assets and liabilities of Bushby & Co as at the date of acquisition are Fair Value
as follows: $’000
Cash 541
Trade and other receivables 160
Other current assets 41
Property, plant, and equipment 133
Intangible assets - Rent roll and trail book 4,910
Trade and other payables (705)
Net deferred tax liabilities acquired (1,252)
Provisions (377)
Fair value of assets and liabilities acquired 3,451
Add: Goodwill 1,679
Net assets acquired 5,130
P a g e | 57
ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 11 Business combinations (cont.)
11.1 Acquisition of Bushby & Co Pty Ltd (cont.)
11.1.3 Net cash outflow arising on acquisition: Note $’000
Consideration 11.1.2a 5,130
Acquisition costs 84
Less: Deferred consideration 11.1.2a (298)
Balances acquired 11.1.2b (541)
4,375
11.1.4 During 2023 year the acquisition of Bushby & Co. Pty Ltd, contributed $3,939K to total expenditure, including $2,522K to
total salaries and employment costs.
11.2 Westvalley Corporation Pty Ltd – Part Sale of Trail Asset
On 5 December 2022 the Group sold a portion of its trail asset (consisting of the trail book, the client list, and database),
which was at that date held by its 100% subsidiary Westvalley Corporation Pty Ltd, resulting in a profit on sale of $1,579K
The proceeds of $1,641K (plus GST) were received on 9 January 2023.
Note 12 Other Significant Accounting Policies related to Group Structure
12.1 Basis of consolidation
As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the consolidated financial
statements as well as their results for the year then ended. Where controlled entities have entered (left) the Consolidated
Group during the year, their operating results have been included (excluded) from the date control was obtained (ceased).
12.1.1 Business combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business
combination is measured at fair value, which is calculated as the sum of the acquisition‑date fair values of assets transferred
by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interest issued by the
Group in exchange for control of the acquiree. Acquisition‑related costs are recognised in profit or loss as incurred. At the
acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value at the
acquisition date, except that:
◼ deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements are recognised and
measured in accordance with AASB 112 Income Taxes and AASB 119 Employee Benefits respectively;
◼ liabilities or equity instruments related to share‑based payment arrangements of the acquiree or share‑based payment
arrangements of the Group entered into to replace share‑based payment arrangements of the acquiree are measured
in accordance with AASB 2 Share‑Based Payments at the acquisition date; and
◼ assets (or disposal groups) that are classified as held for sale in accordance with AASB 5 Non‑current Assets Held for Sale
and Discontinued Operations are measured in accordance with that Standard.
a. Goodwill
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non‑controlling
interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over
the net of the acquisition‑date amounts of the identifiable assets acquired and the liabilities assumed. If, after
reassessment, the net of the acquisition‑date amounts of the identifiable assets acquired and liabilities assumed exceeds
the sum of the consideration transferred, the amount of any non‑controlling interests in the acquiree and the fair value
of the acquirer’s previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as
a bargain purchase gain.
When the consideration transferred by the Group in a business combination includes contingent consideration
arrangement, the contingent consideration is measured at its acquisition‑date fair value and included as part of the
consideration transferred in a business combination. Changes in fair value of the contingent consideration that qualify
as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill.
Measurement period adjustments are adjustments that arise from additional information obtained during the
measurement period (which cannot exceed one year from the acquisition date) about facts and circumstances that
existed at the acquisition date.
P a g e | 58
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 12 Other Significant Accounting Policies related to Group Structure
The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as
measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration
that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted
for within equity. Other contingent consideration is remeasured to fair value at subsequent reporting dates with changes
in fair value recognised in profit or loss.
When a business combination is achieved in stages, the Group’s previously held interests in the acquired entity are
remeasured to its acquisition‑date fair value and the resulting gain or loss, if any, is recognised in profit or loss. Amounts
arising from interests in the acquiree prior to the acquisition date that have previously been recognised in OCI are
reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those
provisional amounts are adjusted during the measurement period, or additional assets or liabilities are recognised, to
reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known,
would have affected the amounts recognised as of that date.
b. Intangible assets acquired in a business combination
Intangible assets acquired in a business combination and recognised separately from goodwill are recognised initially at
their fair value at the acquisition date (which is regarded as their cost).
Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less
accumulated amortisation and impairment losses, on the same basis as intangible assets that are acquired separately.
c. Contingent liabilities acquired in a business combination
Contingent liabilities acquired in a business combination are initially measured at fair value at the acquisition date. At
the end of subsequent reporting periods, such contingent liabilities are measured at the higher of the amount that would
be recognised in accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets and the amount
recognised initially less cumulative amount of income recognised in accordance with the principles of AASB 15 Revenue
from Contracts with Customers.
12.1.2 Subsidiaries
Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated
financial statements from the date that control commences until the date that control ceases.
The accounting policies of subsidiaries have been changed when necessary to align them with policies adopted by the Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as non-controlling interests.
The Group initially recognises non-controlling interests that are present ownership interests in subsidiaries and are entitled
to a proportionate share of the subsidiary’s net assets on liquidation at either fair value or at the non-controlling interests’
proportionate share of the subsidiary’s net assets. Subsequent to initial recognition, non-controlling interests are attributed
their share of profit or loss and each component of other comprehensive income. Non-controlling interests are shown
separately within the equity section of the statement of financial position and statement of comprehensive income.
The grant by the Company of options over its equity instruments to the employees of subsidiary undertakings in the Group
is treated as a capital contribution to that subsidiary undertaking. The fair value of employee services received, measured
by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary
undertakings, with a corresponding credit to equity.
Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing
so causes the non-controlling interests to have a deficit balance.
A list of controlled entities is contained in note 10 Interest in subsidiaries of the financial statements.
12.1.3 Loss of control
Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests
and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised
in profit or loss. If the Group retains any interest in the previous subsidiary, then such interests are measured at fair value at
the date control is lost. Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale financial
asset depending on the level of influence retained.
12.1.4 Transactions eliminated on consolidation
All intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements.
P a g e | 59
ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
SECTION D. UNRECOGNISED ITEMS
This section of the notes provides information about items that are not recognised in the financial statements as they do not (yet)
satisfy the recognition criteria. In addition to the items and transactions disclosed below, there are also unrecognised tax amounts
– see note 4 Income tax.
Note 13 Commitments
There are no material commitments to the Group as at 2023 (2022: Nil).
Note 14 Contingent liabilities
There are no contingent liabilities as at 30 June 2023.
Note 15 Events subsequent to reporting date
There have not been any other matter or circumstance that has arisen after balance date that has significantly affected, or may
significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future
financial periods.
P a g e | 60
THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
SECTION E. OTHER INFORMATION
This section of the notes includes other information that must be disclosed to comply with the accounting standards and other
pronouncements, but that is not immediately related to individual line items in the financial statements.
Note 16 Key Management Personnel compensation (KMP)
The names and positions of KMP are as follows:
◼ Andrew Jensen Executive Chairman and Chief Operating Officer
◼ Geoff Lucas Managing Directors and Chief Executive Officer (CEO) (appointed 29 March 2021)
◼ Paul Niardone Executive Director
◼ Adam Davey Non-Executive Director
◼ Other KMP:
Matt Lahood CEO – Real Estate
◼ Former KMP included in comparative information:
Arjan van Ameyde Chief Financial Officer Appointed 1 February 2020, resigned 1 February 2022
Information regarding individual Directors and executives’ compensation and some equity instruments disclosures as required
by the Corporations Regulations 2M.3.03 is provided in the Remuneration report table on page 16.
2023 2022
$ $
Short-term employee benefits 2,182,160 2,519,085
Post-employment benefits 101,168 109,774
Equity-settled share-based payments 461,729 674,553
Other long-term benefits - -
Termination benefits - 122,993
Total 2,745,057 3,426,405
Note 17 Related party transactions
Some Directors or former Directors of the Group hold or have held positions in other companies, where it is considered they
control or significantly influence the financial or operating policies of those entities. During the year, the following entities
provided services to the Group.
Total Transactions Receivable/(Payable) Balance
Related party Nature of transactions KMP 2023 2022 2023 2022
$ $ $ $
Matt Lahood Advance commissions / Matt Lahood - (26,704) 57,370 57,370
Future fund
Matt Lahooda Loans Matt Lahood 501,023 345,009 501,023 345,009
a. As a 30 June 2023, an amount of $501,023 was advanced to Mr Lahood (2022: $345,009). The terms of the advance include:
◼ Principal Sum Up to $550,000
◼ Loan Commencement 27 October 2021
◼ Interest Rate 8% per annum (after 12 months interest free period from final advance date)
◼ Default Interest Rate Interest Rate plus 5% per annum
◼ Securities Any future sales commissions and future income and wages as per EA entitlements
◼ Instalment Date Amount is due on final repayment date or when any due amounts are payable on STI payments
and sales commissions from property sales that are due. Discretional payments during the
term can also be paid
◼ Repayment Date 31 December 2024
P a g e | 61
ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 18 Earnings per share (EPS) Note 2023 2022
$’000 $’000
18.1 Reconciliation of earnings to profit or loss
Profit or (loss) for the year (4,321) 1,588
Less: profit attributable to non-controlling equity interest - -
Profit or (loss) used in the calculation of basic and diluted EPS (4,321) 1,588
2023 2022
No. No.
18.2 Weighted average number of ordinary shares outstanding
during the year used in calculation of basic EPS 428,575,917 428,575,917
Weighted average number of dilutive equity instruments outstanding 18.5 N/A 5,808,219
18.3 Weighted average number of ordinary shares outstanding
during the year used in calculation of diluted EPS 428,575,917 434,384,136
2023 2022
18.4 Earnings per share ₵ ₵
Basic EPS (cents per share) 18.5 (1.01) 0.37
Diluted EPS (cents per share) 18.5 N/A 0.37
18.5 As at 30 June 2023, the Group has 20,000,000 unissued shares under options (2022: 30,000,000) and 11,000,000 performance
shares on issue (30 June 2022: 11,000,000). Of the original 30,000,000 options granted and issued, 10,000,000 options have
vested and 10,000,000 have expired. No performance rights have vested. Unvested options and performance rights are not
considered to be dilutive. In addition, the Group does not report diluted earnings per share on losses generated by the Group.
During the 2023 year, the Group's unissued shares under option and performance shares were anti-dilutive (2022: 0.37 cps).
Note 19 Share-based payments Note 2023 2022
$ $
19.1 Share-based payments:
◼ Recognised in profit and loss:
Share-based payment expense – Performance rights 19.2.2,19.3 263,750 110,559
Share-based payment expense – Options 19.2.2a,19.5 197,979 563,994
461,729 674,553
Gross share-based payments 461,729 674,553
19.2 Share-based payment arrangements in effect during the period
19.2.1 Issued during the current year
Nil
19.2.2 Issued in prior year, remaining in effect
a. Chief Executive Officer – Remuneration Options
On the commencement of employment, the Company granted Mr Geoff Lucas 30,000,000 options (to be issued) in
accordance with his employment agreement, on the following terms:
Number under Option Date of Expiry Consideration Exercise Price Vesting Terms
10,000,000 29 September 2022 nil $0.050 60 days after 6-month
probationary period
Expired 28 November 2021
10,000,000 29 September 2023 nil $0.075 12 months after 6-month
probationary period
29 September 2022
10,000,000 29 September 2024 nil $0.100 24 months after 6-month
probationary period
29 September 2023
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THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 19 Share-based payments (cont.)
b. Executive Director – Performance rights
At the Company's AGM, held 28 January 2022, shareholder approval was obtained to issue 11,000,000 performance rights
that will convert into shares upon Performance Milestones being achieved, to Mr Paul Niardone under his Executive
Services Agreement. These performance rights have been valued and issued on terms as detailed below and in note 19.3.
Class of Performance Condition Performance Milestone Expiry Probability of Performance
Performance rights Date Date milestones met Condition
Right No. % Satisfied
A 24 months continuous Company service 8,000,000 28.01.2024 28.01.2024 100 No
B Achievement of one of the following: 3,000,000 30.06.2024 30.06.2024 85 No
(i) recruitment by The Agency (WA) and the
Company’s Sell Lease Property Model of
85 Agents by 30 June 2024; or
(ii) achievement of GCI of $50,000,000 for the
financial year ending 30 June 2024 by The
Agency (WA).
19.3 Fair value of performance rights granted
The fair value of the rights granted to employees is deemed to represent the value of the employee services received
over the vesting period.
Note reference 19.2.2b 19.2.2b
Grant date: 28 January 2022 28 January 2022
Grant date share price: $0.045 $0.045
Milestone date 28 January 2024 30 June 2024
Performance right conversion price: $nil $nil
Number of rights issued: 8,000,000 3,000,000
Remaining life (years): 0.57 1.00
Value per right $0.045 $0.045
Probability of milestone being met (%): 100 100
Fair values: Total
Total fair value $400,000 $127,500 $527,500
Recognised in the period $200,000 $63,750 $263,750
19.4 Movement in Company options share-based payment arrangements during the period
A summary of the movements of all Company options issued as share-based payments is as follows:
2023 2022
Number of Weighted Average Number of Weighted Average
Options Exercise Price Options Exercise Price
Outstanding at the beginning of the year 30,000,000 $0.075 30,333,333 $0.077
Granted - - - -
Exercised - - - -
Expired (10,000,000) $0.050 (333,333) $0.300
Outstanding at year-end 20,000,000 $0.088 30,000,000 $0.075
Exercisable at year-end 10,000,000 $0.075 10,000,000 $0.050
a. The weighted average remaining contractual life of options outstanding at year end was 0.75 years (2022: 1.25 years).
b. The fair value of the options granted to employees is deemed to represent the value of the employee services received
over the vesting period.
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ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 19 Share-based payments (cont.)
19.5 Fair value of options granted in prior period, remaining in effect
The fair value of the options granted to employees is deemed to represent the value of the employee services received
over the vesting period.
The weighted average fair value of options granted during the year was $nil (2022: $0.0338). These values were calculated
using the Black-Scholes option pricing model, applying the following inputs to options issued this year:
Note reference 19.2.2a 19.2.2a
Grant date: 29 March 2021 29 March 2021
Grant date share price: $0.060 $0.060
Option exercise price: $0.075 $0.100
Number of options issued: 10,000,000 10,000,000
Remaining life (years): 1.25 2.25
Expected share price volatility: 106.60 106.60
Risk-free interest rate: 0.08% 0.66%
Value per option $0.0333 $0.0360
Fair values: Total
Total fair value $333,000 $360,000 $693,000
Recognised in the period $54,154 $143,825 $197,979
Historical volatility was the basis for determining expected share price volatility as it is assumed that this is indicative of
future movements. The life of the options is based on historical exercise patterns, which may not eventuate in the future.
19.5.1 Accounting policy
The Group has provided payment to service providers and related parties in the form of share-based compensation whereby
services are rendered in exchange for shares or rights over shares, equity-settled transactions. The cost of these equity-
settled transactions is measured by reference to the fair value at the date at which they are granted. The fair value is
determined using an appropriate valuation model for services provided by employees or where the fair value of the goods
or services received cannot be reliably estimated.
For goods and services received where the fair value can be determined reliably the goods and services and the
corresponding increase in equity are measured at that fair value. The fair value of the options granted is adjusted to reflect
market vesting conditions, but excludes the impact of any non-market vesting conditions. Non-market vesting conditions
are included in assumptions about the number of options that are expected to become exercisable.
At each balance date, the entity revises its estimates of the number of options with non-market vesting conditions that are
expected to become exercisable. The cost of equity-settled transactions is recognised, together with a corresponding
increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the
relevant parties become fully entitled to the award, vesting date.
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the
extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the Directors of the
Group, will ultimately vest. This opinion is formed based on the best available information at balance date. No adjustment
is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the
determination of fair value at grant date.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not
been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the
modification, as measured at the date of modification.
19.5.2 Key estimate
a. Share-based payments
The Group measures the cost of equity-settled transactions by reference to the fair value of the equity instrument at
the date at which they are granted. The fair value of options granted is measured using the Black-Scholes option pricing
model. The model uses assumptions and estimates as inputs. The assumptions and models used for estimating fair value
for share-based payment transactions are disclosed in note 19.5.
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THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 20 Operating segments
20.1 Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are provided to the Board of Directors
(the Board) monthly and in determining the allocation of resources.
The Group is managed primarily based on service offerings as the diversification of the Group’s operations inherently
have notably different risk profiles and performance assessment criteria. Operating segments are therefore determined
on the same basis.
20.2 Types of services by segment
20.2.1 Real Estate and Property Services
This represents revenue received for provision of real estate services including selling of property, settlement agent
services, and property management.
20.2.2 Mortgage Origination Services
This represents revenue received for provision of mortgage broking services.
20.2.3 Other (includes financial planning, head office etc.)
This represents non-reportable segments including head office, property investments, and other services.
20.3 Basis of accounting for purposes of reporting by operating segments
20.3.1 Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board, being the chief decision maker with respect to operating
segments, are determined in accordance with accounting policies that are consistent to those adopted in the annual
financial statements of the Group.
20.3.2 Inter-segment transactions
All such transactions are eliminated on consolidation of the Group's financial statements. Inter-segment loans payable
and receivable are initially recognised at the consideration received/to be received net of transaction costs. If inter-
segment loans receivable and payable are not on commercial terms, these are not adjusted to fair value based on market
interest rates. This policy represents a departure from that applied to the statutory financial statements.
20.3.3 Segment assets
Where an asset is used across multiple segments, the asset is allocated to that segment that receives majority economic
value from that asset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and
physical location.
20.3.4 Segment liabilities
Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the
operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole and
are not allocated. Segment liabilities include trade and other payables and certain direct borrowings.
20.3.5 Unallocated items
The following items of revenue, expenses, assets, and liabilities are not allocated to operating segments as they are not
considered part of the core operations of any segment:
◼ Head office and corporate costs;
◼ Net gains on disposal of available-for-sale investments;
◼ Impairment of assets and other non-recurring items of revenue and expense;
◼ Income tax expense;
◼ Current and deferred tax assets and liabilities;
◼ Other financial assets;
◼ Intangibles assets; and
◼ Discontinued operations.
20.3.6 Segment information
a. The Group’s operations are from Australian sources and therefore no geographical segments are disclosed.
b. Assets and liabilities have not been reported on a segmented basis as the Board of Directors is provided with
consolidated information.
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ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 20 Operating segments (cont.)
20.4 Segment Financial Performance
Real Estate Mortgage Total
Property Origination Reportable Other
Services Services Segments Segments Total
30 June 2023 $’000 $’000 $’000 $’000 $’000
Revenue
◼ External revenues 74,960 1,937 76,897 33 76,930
◼ Inter-segment revenues - - - - -
Total segment revenue 74,960 1,937 76,897 33 76,930
Total group revenue and other income _ 76,930
Segment EBITDA 9,963 217 10,180 (9,278) 902
◼ Unallocated corporate costs -
EBITDA _ 902
Reconciliation of segment loss to Group loss:
(i) Allocated items:
◼ Gain on disposal of assets 11 1,579 1,590 - 1,590
◼ Depreciation and amortisation (5,628) (47) (5,675) (794) (6,469)
◼ Net finance costs (838) (6) (844) (2,395) (3,239)
◼ Redundancy costs - (76) (76) - (76)
(ii) Unallocated items:
◼ Legal costs non-recurring - - - (625) (625)
◼ Fair value adjustments (71) - (71) 3,127 3,056
◼ Share-based payments - - - (462) (462)
◼ Acquisition costs - - - (84) (84)
Loss before income tax _ (5,407)
30 June 2022
Revenue
◼ External revenues 69,376 3,233 72,609 47 72,656
◼ Inter-segment revenues - - - - -
Total segment revenue 69,376 3,233 72,609 47 72,656
Reconciliation of segment revenue to Group revenue:
◼ Eliminations -
Total group revenue and other income _ 72,656
Segment EBITDA 12,811 701 13,512 (7,825) 5,687
◼ Unallocated corporate costs -
EBITDA _ 5,687
Reconciliation of segment loss to Group profit:
(i) Allocated items:
◼ Gain on disposal of assets 5 - 5 1 6
◼ Depreciation and amortisation (4,653) (49) (4,702) (737) (5,439)
◼ Net finance costs (449) 4 (445) (1,201) (1,646)
(ii) Unallocated items:
◼ Impairment reversal - - - 400 400
◼ Fair value adjustments 123 - 123 2,005 2,128
◼ Share-based payments - - - (675) (675)
Profit before income tax _ 461
20.5 Major customers
The Group has a diversified range of customers across various geographic locations and businesses, and is not dependant
on any one customer above 5%.
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THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 21 Parent entity disclosures
The Agency Group Australia Ltd is the ultimate Australian parent entity and ultimate parent of the Group.
The Agency Group Australia Ltd did not enter into any trading transactions with any related party during the year.
21.1 Financial Position of The Agency Group Australia Ltd 2023 2022
$’000 $’000
Current assets 1,436 729
Non-current assets 2,486 4,239
Total assets 3,922 4,968
Current liabilities 3,922 4,968
Non-current liabilities - -
Total liabilities 3,922 4,968
Net assets - -
Equity
Issued capital 43,635 43,635
Share-based payment reserve 1,352 890
Accumulated losses (44,987) (44,525)
Total equity - -
21.2 Financial performance of The Agency Group Australia Ltd 2023 2022
$’000 $’000
Loss for the year (395) (675)
Other comprehensive income - -
Total comprehensive income (395) (675)
21.3 Contractual commitments
The parent company has no capital commitments at 2023 (2022: $nil). The parent company other commitments are
disclosed in note 13 Commitments.
21.4 Contingent liabilities and guarantees
There are no guarantees entered into by The Agency Group Australia Ltd for the debts of its subsidiaries as at 2023
(2022: none). The parent company other contingencies are disclosed in note 14 Contingent liabilities.
Note 22 Auditor's remuneration 2023 2022
$ $
Remuneration of the auditor for:
◼ Auditing or reviewing the financial reports:
Hall Chadwick WA Audit Pty Ltd 161,000 151,000
◼ Non-audit services provided by a related practice of the Auditor - -
161,000 151,000
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ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 23 Statement of significant accounting policies
This note provides a list of the significant accounting policies adopted in the preparation of these consolidated financial
statements to the extent they have not already been disclosed in the other notes above. These policies have been consistently
applied to all the years presented, unless otherwise stated.
23.1 Basis of preparation
23.1.1 Reporting Entity
The Agency Group Australia Ltd (The Agency or the Company) is a listed public company limited by shares, domiciled and
incorporated in Australia. These are the consolidated financial statements and notes of The Agency and controlled entities
(collectively the Group). The financial statements comprise the consolidated financial statements of the Group. For the
purposes of preparing the consolidated financial statements, the Company is a for-profit entity. The Group is a for-profit
entity and is primarily involved in the integrated real estate services.
The separate financial statements of The Agency, as the parent entity, have not been presented with this financial report as
permitted by the Corporations Act 2001 (Cth).
23.1.2 Basis of accounting
These financial statements are general purpose financial statements which have been prepared in accordance with
Australian Accounting Standards and Interpretations of the Australian Accounting Standards Board (AAS Board) and
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), and the
Corporations Act 2001 (Cth).
Australian Accounting Standards (AASBs) set out accounting policies that the AAS Board has concluded would result in a
financial report containing relevant and reliable information about transactions, events and conditions to which they apply.
Compliance with AASBs ensures that the financial statements and notes also comply with IFRS as issued by the IASB.
The financial statements were authorised for issue on 24 August 2023 the Directors of the Company.
23.1.3 Going Concern
The financial report has been prepared on a going concern basis, which contemplates the continuity of normal business
activity and the realisation of assets and the settlement of liabilities in the ordinary course of business.
The Group incurred a loss for the year of $4.32 million (2022: $1.59 million profit) and a net cash out-flow from operating
activities of $0.44 million (2022: $6.60 million in-flow). Included in loss for during the year was interest and finance costs
($1.51 million), depreciation and amortisation ($6.47 million), and non-recurring legal costs ($0.63 million). These items
were partially offset by profit on sale of assets and lease exit ($1.59 million) and embedded derivative non-cash financing
gains ($1.35 million).
As at 30 June 2023, the Company had a working capital deficit of $3.79 million (2022: $8.43 million working capital deficit).
The Directors have prepared a cash flow forecast, which indicates that the Group will have sufficient cash flows to meet
commitments and working capital requirements for the 12-month period from the date of signing this financial report.
The ability of the Group to continue as a going concern is principally dependent on the following:
◼ The Group continuing to generate cash flows from operations; and
◼ The Group not breaching the terms of its borrowing facilities.
As disclosed in notes 5.6.4, MBL agreed to conditionally waive the December 2022, March 2023 and June 2023 quarter end
covenant testing in respect to the interest cover ratio. The Company has had extensive discussions with them around the
covenant testing and are confident a waiver will be obtained for the September 2023 quarter end as part of the normal
quarterly reporting process. The Directors expect that MBL will continue to work with the company until expiry of the debt
facility dated 20 July 2025, and will have the continuing support of the bank.
In addition to this, should the Company be required to refinance the facility or settle the loan over the next 12-month period,
they are confident they would be able to seek alternative finance and / or consider further asset sales which could realise
significant off-balance sheet value of its intangible assets. The Company has obtained recent valuations of the East Coast
Rent Rolls and the Bushby Rent Rolls which indicates the market value of these rent rolls are circa $25 million.
Based on the cash flow forecasts and other factors referred to above, the Directors are satisfied that the going concern basis
of preparation is appropriate. In particular, given the Group’s history of raising capital to date, the Directors are confident
of the Group’s ability to raise additional funds as and when they are required.
23.1.4 Comparative figures
Where required by AASBs comparative figures have been adjusted to conform to changes in presentation for the current
financial year.
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THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 23 Statement of significant accounting policies
Where the Group retrospectively applies an accounting policy, makes a retrospective restatement or reclassifies items in its
financial statements, an additional (third) statement of financial position as at the beginning of the preceding period in
addition to the minimum comparative financial statements is presented.
23.1.5 New and Amended Standards Adopted by the Group
The Group has applied the following standards and amendments for the first time for their annual reporting period
commencing 1 July 2022:
◼ AASB 2020-3 Amendments to Australian Accounting Standards – Annual Improvements 2018–2020 and Other
Amendments [AASB 1, AASB 3, AASB 9, AASB 116, AASB 137 & AASB 141]. The group also elected to adopt the following
amendments early: 13
◼ AASB 2021-5 Amendments to Australian Accounting Standards – Deferred Tax related to Assets and Liabilities arising
from a Single Transaction [AASB 112]
The amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to
significantly affect the current or future periods.
23.2 Goods and Services Tax
Goods and Services Tax (GST) is and Australian broad-based consumption taxes that the Group is exposed to.
Revenues, expenses, and assets are recognised net of the amount of GST, except where the amount of GST incurred is not
recoverable from the taxation authority. In these circumstances the GST is recognised as part of the cost of acquisition of
the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown
inclusive of GST.
The net amount of GST recoverable from, or payable to, the Australian Taxation Office (or jurisdictional equivalent) is
included as a current asset or liability in the balance sheet.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and
financing activities, which are disclosed as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.
23.3 Foreign currency transactions and balances
23.3.1 Functional and presentation currency
The functional currency of each of the Group's entities is measured using the currency of the primary economic environment
in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the legal
parent entity's functional and presentation currency. The functional currency of the Group is the Australian Dollar.
23.4 Use of estimates and judgments
The preparation of consolidated financial statements requires management to make judgements, estimates and
assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.
These estimates and associated assumptions are based on historical experience and various factors that are believed to be
reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of
assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised and in any future periods affected.
Judgements made by management in the application of AASBs that have significant effect on the consolidated financial
statements and estimates with a significant risk of material adjustment in the next year are discussed in Note 23.4.1.
23.4.1 Critical Accounting Estimates and Judgments
Management discusses with the Board the development, selection and disclosure of the Group's critical accounting policies
and estimates and the application of these policies and estimates. The estimates and judgements that have a significant risk
of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed
below.
a. Key estimate – Taxation ........................................................................................ Refer note 4.8 Income tax.
b. Key judgement and keys estimate – Impairment of goodwill and rent roll......... Refer note 6.3 Intangible assets.
c. Key judgement – determining the lease term ...................................................... Refer note 6.2 Leases.
d. Key estimate – determining convertible note embedded derivative .................. Refer note 5.7 Financial liabilities.
e. Key estimate – Share-base payments .................................................................. Refer note 19 Share-based payments.
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ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 23 Statement of significant accounting policies
23.5 Fair Value
23.5.1 Fair Value of Assets and Liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis, depending on
the requirements of the applicable AASB.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly
unforced transaction between independent, knowledgeable, and willing market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is used to determine
fair value. Adjustments to market values may be made having regard to the characteristics of the specific asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation
techniques. These valuation techniques maximise, to the extent possible, the use of observable market data.
To the extent possible, market information is extracted from either the principal market for the asset or liability (i.e. the
market with the greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the most
advantageous market available to the entity at the end of the reporting period (i.e. the market that maximises the receipts
from the sale of the asset or minimises the payments made to transfer the liability, after taking into account transaction
costs and transport costs).
For non-financial assets, the fair value measurement also considers a market participant's ability to use the asset in its
highest and best use or to sell it to another market participant that would use the asset in its highest and best use.
The fair value of liabilities and the entity's own equity instruments (excluding those related to share-based payment
arrangements) may be valued, where there is no observable market price in relation to the transfer of such financial
instruments, by reference to observable market information where such instruments are held as assets. Where this
information is not available, other valuation techniques are adopted and, where significant, are detailed in the respective
note to the financial statements.
23.5.2 Fair value hierarchy
AASB 13 Fair Value Measurement requires the disclosure of fair value information by level of the fair value hierarchy, which
categorises fair value measurements into one of three possible levels based on the lowest level that an input that is
significant to the measurement can be categorised into as follows:
Level 1 Level 2 Level 3
Measurements based on quoted prices Measurements based on inputs other than Measurements based on unobservable
(unadjusted) in active markets for quoted prices included in Level 1 that are inputs for the asset or liability.
identical assets or liabilities that the observable for the asset or liability, either
entity can access at the measurement directly or indirectly.
date.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation
techniques. These valuation techniques maximise, to the extent possible, the use of observable market data. If all significant
inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one or more significant
inputs are not based on observable market data, the asset or liability is included in Level 3.
The Group would change the categorisation within the fair value hierarchy only in the following circumstances:
◼ if a market that was previously considered active (Level 1) became inactive (Level 2 or Level 3) or vice versa; or
◼ if significant inputs that were previously unobservable (Level 3) became observable (Level 2) or vice versa.
When a change in the categorisation occurs, the Group recognises transfers between levels of the fair value hierarchy (i.e.,
transfers into and out of each level of the fair value hierarchy) on the date the event or change in circumstances occurred.
23.5.3 Valuation techniques
The Group selects a valuation technique that is appropriate in the circumstances and for which sufficient data is available to
measure fair value. The availability of sufficient and relevant data primarily depends on the specific characteristics of the
asset or liability being measured. The valuation techniques selected by the Group are consistent with one or more of the
following valuation approaches:
◼ Market approach: valuation techniques that use prices and other relevant information generated by market transactions
for identical or similar assets or liabilities.
◼ Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a single
discounted present value.
◼ Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current service capacity.
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THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Notes to the consolidated financial statements
for the year ended 30 June 2023
Note 23 Statement of significant accounting policies
Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing the
asset or liability, including assumptions about risks. When selecting a valuation technique, the Group gives priority to those
techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs that are
developed using market data (such as publicly available information on actual transactions) and reflect the assumptions that
buyers and sellers would generally use when pricing the asset or liability are considered observable, whereas inputs for
which market data is not available and therefore are developed using the best information available about such assumptions
are considered unobservable.
23.6 New Accounting Standards and Interpretations not yet mandatory or early adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2023
reporting periods and have not been early adopted by the Group. These standards are not expected to have a material
impact on the entity in the current or future reporting periods and on foreseeable future transactions.
Note 24 Company details
The registered office and head office of the Company is:
Street: 68 Milligan Street Postal: PO Box 7768
Perth WA 6000 CLOISTERS SQUARE WA 6850
Australia Australia
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ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Directors' declaration
The Directors of the Company declare that in the Directors' opinion:
1. The attached financial statements and notes, as set out on pages 21 to 71, are in accordance with the Corporations Act 2001
(Cth) including:
(a) complying with Accounting Standards, the Corporations Regulations 2001, and other mandatory professional reporting
requirements; and
(b) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2023 and of its performance for the
financial year ended on that date
2. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable.
Note 23.1.2 confirms that the financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The Directors have been given the declarations by the chief executive officer and chief financial officer required by section 295A
of the Corporations Act 2001 (Cth);
This declaration is signed in accordance with a resolution of the Directors made pursuant to section 295(5) of the Corporations
Act 2001.
On behalf of the Directors
GEOFF LUCAS
Managing Director and CEO
Dated this Thursday, 24 August 2023
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THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Independent auditor's report
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ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
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THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
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ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
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THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
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ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
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THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Corporate governance statement
The Board is responsible for establishing the Company’s corporate governance framework. In establishing its corporate
governance framework, the Board has referred to the 4th edition of the ASX Corporate Governance Councils’ Corporate
Governance Principles and Recommendations.
The Corporate Governance Statement discloses the extent to which the Company follows the recommendations. The Company
will follow each recommendation where the Board has considered the recommendation to be an appropriate benchmark for its
corporate governance practices. Where the Company’s corporate governance practices will follow a recommendation, the Board
has made appropriate statements reporting on the adoption of the recommendation. In compliance with the “if not, why not”
reporting regime, where, after due consideration, the Company’s corporate governance practices will not follow a
recommendation, the Board has explained its reasons for not following the recommendation and disclosed what, if any,
alternative practices the Company will adopt instead of those in the recommendation.
The Company’s governance-related documents can be found on its website at www.investors.theagency.com.au/corporate-
governance.
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ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Additional Information for Listed Public Companies
The following additional information is required by the Australian Securities Exchange in respect of listed public companies.
1 Capital as at 15 August 2023
a. Ordinary share capital
428,575,921 ordinary fully paid shares held by 926 shareholders.
b. Options over Unissued Shares
Number of Exercise Price Expiry ASX
Options $ Date Status
10,000,000 0.075 29 Sept 2023 Unlisted
10,000,000 0.100 29 Sept 2024 Unlisted
20,000,000
c. Performance Rights over Unissued Shares
Class of Performance Condition Performance Milestone Date Expiry Date
Performance rights
Right No.
Class A 24 months continuous service to the Company 8,000,000 28 January 2024 28 January 2024
Class B Achievement of one of the following: 3,000,000 30 June 2024 30 June 2024
(i) recruitment by The Agency (WA) and the
Company’s Sell Lease Property Model of
85 Agents by 30 June 2024; or
(ii) achievement of gross commission income
of $50,000,000 for the financial year
ending 30 June 2024 by The Agency (WA).
11,000,000
d. Voting Rights
The voting rights attached to each class of equity security are as follows:
◼ Ordinary shares: Each ordinary share is entitled to one vote when a poll is called, otherwise each member present
at a meeting or by proxy has one vote on a show of hands.
◼ Options: Options do not entitle the holders to vote in respect of that equity instrument, nor participate in
dividends, when declared, until such time as the options are exercised or performance shares convert and
subsequently registered as ordinary shares.
◼ Performance Rights: A Performance Right does not entitle a Holder to vote on any resolutions proposed at a
general meeting of shareholders of the Company. A Performance Right does not entitle a Holder to any dividends.
A Performance Right does not entitle the Holder to participate in the surplus profits or assets of the Company upon
winding up of the Company. A Performance Right is not transferable.
e. Substantial Shareholders as at 15 August 2023
Name Number of Ordinary % Held of Issued Ordinary
Fully Paid Shares Held Capital
Peters Investments Pty Ltd 129,621,485 30.24
Ben Collier Investments Pty Ltd <Ben Collier Investments P/L> 27,060,515 6.31
MAK Property Group Pty Ltd <MAK A/C> 25,690,547 5.99
Teldar Real Estate Pty Ltd <MI Lahood Family A/C> 24,349,790 5.68
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THE AGENCY GROUP AUSTRALIA LTD ANNUAL REPORT
AND CONTROLLED ENTITIES 30 June 2023
ABN 52 118 913 232
Additional Information for Listed Public Companies
f. Distribution of Shareholders as at 15 August 2023
Category (size of holding) Total Holders Number % Held of Issued
Ordinary Ordinary Capital
1 – 1,000 217 36,474 0.01
1,001 – 5,000 99 274,460 0.06
5,001 – 10,000 100 772,067 0.18
10,001 – 100,000 322 12,229,162 2.85
100,001 – and over 188 415,263,758 96.90
926 428,575,921 100.00
g. Unmarketable Parcels as at 15 August 2023
There were 482 shareholders who held less than a marketable parcel of shares, holding 1,913,061 shares.
h. On-Market Buy-Back
There is no current on-market buy-back.
i. Restricted Securities
The Company has currently no restricted securities. However, ordinary shares issued upon conversion of the
Performance Rights will be voluntarily escrowed for one year from the date of issue of the Shares.
j. 20 Largest Shareholders — Ordinary Shares as at 15 August 2023
Rank Name Number of Ordinary % Held of Issued
Fully Paid Shares Ordinary Capital
Held
1. Peters Investments Pty Ltd 129,621,485 30.24
2. Ben Collier Investments Pty Ltd <Ben Collier Investments P/L> 27,060,515 6.31
3. MAK Property Group Pty Ltd <MAK A/C> 25,690,547 5.99
4. Teldar Real Estate Pty Ltd <MI Lahood Family A/C> 24,349,790 5.68
5. 1800homeloans Pty Ltd <Phoenix Aggregation A/C> 19,624,130 4.58
6. SEMC 2 Pty Limited <The Chen Asset A/C> 17,475,530 4.08
7. Hanzheng KSW Pty Ltd <Hanzheng KSW Unit A/C> 16,666,667 3.89
8. Mr Andrew Ernest Goodall 10,252,618 2.39
9. Honan Insurance Group Pty Ltd 7,692,308 1.79
10. Mr Irwin David Klotz 7,314,032 1.71
11. Dawney & Co Ltd 7,093,011 1.66
12. Nutsville Pty Ltd <Indust Electric Co S/F A/C> 6,763,230 1.58
13. Mr Richard Raymond Keel <Keel Investment A/C> 5,500,000 1.28
14. BNP Paribas Nominees Pty Ltd grouped 5,013,737 1.17
15. Martianne Pty Ltd <Crabb Family Invest No 2 A/C> 5,000,000 1.17
16. Profess Investments Pty Ltd <Brutus Superannuation A/C> 4,886,026 1.14
17. Crossbay Pty Ltd 4,218,934 0.98
18. Mr Subodh Raja Kode 3,641,211 0.85
19. Big Leap Super Pty Ltd <Big Leap Super A/C> 3,536,976 0.83
20. Trindis Pty Ltd 3,186,951 0.74
Total 334,587,698 78.06
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ANNUAL REPORT THE AGENCY GROUP AUSTRALIA LTD
30 June 2023 AND CONTROLLED ENTITIES
ABN 52 118 913 232
Additional Information for Listed Public Companies
k. Unquoted Securities Holders Holding More than 20% of the Class as at 15 August 2023
◼ Unlisted Options (Exercise price $0.075, Expiry Date: 29.09.23)
Rank Name Number of % Held of Unquoted
Unquoted Securities Security Class
G & N Lucas Investments Pty Ltd 10,000,000 100.00
Total 10,000,000 100.00
Total Unlisted Options (Exercise Price $0.075, Expiry Date: 29.09.23) 10,000,000
◼ Unlisted Options (Exercise price $0.10, Expiry Date: 29.09.24)
Rank Name Number of % Held of Unquoted
Unquoted Securities Security Class
G & N Lucas Investments Pty Ltd 10,000,000 100.00
Total 10,000,000 100.00
Total Unlisted Options (Exercise Price $0.10, Expiry Date: 29.09.24) 10,000,000
◼ Class A Performance Rights Holders
Name Number of % Held of Unquoted
Unquoted Securities Security Class
Paul Niardone 8,000,000 100.00
Total 8,000,000 100.00
Total Performance Shares 8,000,000
◼ Class B Performance Rights Holders
Name Number of % Held of Unquoted
Unquoted Securities Security Class
Paul Niardone 3,000,000 100.00
Total 3,000,000 100.00
Total Performance Shares 3,000,000
2 The Company Secretary is Stuart Usher.
3 Principal registered office
As disclosed in note 24 Company details on page 71 of this Annual Report.
4 Registers of securities
As disclosed in the Corporate directory on page i of this Annual Report.
5 Stock exchange listing
Quotation has been granted for all the ordinary shares of the Company on all Member Exchanges of the Australian
Securities Exchange Limited, as disclosed in the Corporate directory on page i of this Annual Report.
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