More annual reports from Caribbean Utilities Company, Ltd.:
2023 ReportCount Limited
Annual Report
2023
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Appendix 4E
For the Year Ended 30 June 2023
1
Company details
Name of entity
Count Limited*
ABN
11 126 990 832
Reporting period
For the year ended 30 June 2023
Previous period
For the year ended 30 June 2022
* Count Limited changed its name from CountPlus Limited on 4 May 2023. There has been no change to the ABN.
2
Results for announcement to the market
Revenues from contracts with customers
Profit from ordinary activities after tax attributable to the owners of Count Limited
Profit for the year attributable to the owners of Count Limited
up
down
down
7%
0%
0%
to
to
to
Comments
The profit for the Group after providing for income tax and non-controlling interest amounted to $5,100,000 (30 June 2022:
$5,112,000).
$’000
91,481
5,100
5,100
3 Net tangible assets
Net tangible assets per ordinary security
25.07
27.53
Right-of-use assets and lease liabilities recognised under AASB 16 as well as contract assets and contract liabilities recognised
under AASB 15 have been excluded from this calculation.
Reporting period
Cents
Previous period
Cents
4
Entities where control was gained or lost
Name of entity acquired
Affinia Financial Advisers Limited
Ownership % Date of Acquisition
100%
29/05/2023
Names of entities disposed
Ownership %
Date of Disposal
Cooma Accounting and Financial Services Pty Ltd
Wealth Axis Holdings Pty Ltd
100%
51%
1/07/2022
28/02/2023
2
COUNT ANNUAL REPORT 2023 Appendix 4E
For the Year Ended 30 June 2023
5 Dividends
2023 Half Year dividend paid on 5 April 2023
2022 Full Year dividend paid on 12 October 2022
Amount per
security
Cents
Franked amount
per security
Cents
1.50
2.00
1.50
2.00
The record date for determining entitlement to the 2023 Final dividend of 2.25 cents is 22 September 2023 and payable on
11 October 2023. The Final dividend is not provided for at 30 June 2023 and there is no dividend reinvestment plan in place
for the Group.
6 Details of associates
Name of associate
One Hood Sweeney Pty Ltd
Hunter Financial Planning Pty Ltd
OBM Financial Services Pty Ltd
Rundles CountPlus Pty Ltd
Rundles Financial Planning Pty Ltd
DMG Financial Holdings Pty Ltd
Southern Cross Business Holdings Pty Ltd
WSC Group – Aust Pty Ltd*
Group’s aggregate share of associates entities’ profit
Profit from ordinary activities after income tax
* WSC Group – Aust Pty Ltd was acquired on 1 August 2022.
Reporting entity’s percentage holding
Contribution to profit
Reporting period
%
Previous period
%
Reporting period
$’000
Previous period
$’000
32.36%
40.00%
40.00%
40.00%
20.00%
30.00%
49.00%
32.75%
32.36%
40.00%
43.00%
40.00%
20.00%
30.00%
49.00%
–
1,027
322
231
252
56
359
549
508
1,165
355
373
359
64
732
468
–
3,304
3,516
Audit qualification or review
7
The financial statements have been audited and an unmodified opinion has been issued.
3
COUNT ANNUAL REPORT 2023 4
COUNT ANNUAL REPORT 2023 Contents
6
8
10
12
14
16
Chairman’s Report
CEO Report
Count Charitable Foundation
Financial Summary
Count Board
Directors’ Report
20
Remuneration Report
33
Auditor’s Independence Declaration
34
Financial Statements
100
ASX Additional Information
101
Investors’ Information
5
COUNT ANNUAL REPORT 2023
Chairman’s
Report
A significant year of
transformation for Count.
FY2023 was a significant year of transformation in our history, with the
Company officially commencing a new era as Count Limited, taking a new
name and value proposition to market. This change provides clients with
greater certainty about our offering and creates a single strong, nationally
recognised brand.
It was the first full year for our CEO Hugh Humphrey, whose knowledge and
experience proved invaluable in delivering our strategic business objectives and
transforming our business throughout FY2023. We also deepened our leadership
capability with the appointment of a number of talented individuals, including
the Company’s inaugural Chief Risk Officer, reflecting the importance of our
focus on enterprise risk management.
6
COUNT ANNUAL REPORT 2023 In June 2023, we announced the appointment of
Mr Tim Martin as a Non-Executive Director. Tim has deep
experience in private equity and investments which is
hugely valuable as Count enters the next phase in our
growth strategy. His proven leadership and experience
in managing large-scale financial transactions will help
drive our investments in quality businesses and increase
our market share in the Accounting and Wealth sectors.
Tim replaced Mr Andrew McGill who retired from the
Board after five years of service. Andrew demonstrated
a strong dedication to the Board and instilled a
disciplined approach to the investment process for
the benefit of shareholders and the Count team. All of
our Non-Executive Directors bring a wealth of expertise
and experience, providing a stable source of guidance
to the business.
As we transitioned our operations into the ‘new normal’
of post-Covid conditions, and with ongoing volatility
in global markets, Count experienced the impacts of
sector-wide resource shortages, particularly evident in
the first half of FY2023. The Group responded quickly with
a series of actions to outsource work as local resources
were stabilised. We continue to closely monitor trading
conditions and with the diversity of our operations across
three segments, remain well-placed to navigate the
challenges that come our way.
We announced the end of our current share buyback
programme, having bought back a total of 2,693,671
shares at a cost of $1.7M. This is a pleasing result which
has created value for our shareholders.
On the community front, the Count Charitable
Foundation once again donated over $1.2M to important
causes, showcasing our deep commitment to giving
back and supporting those in need.
Finally, I would like to express my gratitude to our
dedicated people, partners and members at Count,
whose hard work has laid a strong foundation for us
to have continued success in FY2024. Building upon
this foundation, the Board is focused on delivering
shareholder value, profitability and expansion through
existing ventures and our acquisition strategy.
Thank you for being a Count shareholder.
Ray Kellerman
Chairman
7
COUNT ANNUAL REPORT 2023 CEO
Report
An integrated business
delivering sustainable growth.
For the first time in our 43-year history, Count now operates as a single, strong brand in the
market alongside our new client-centric value proposition. It’s exciting to see some equity
partner firms have already adopted our new brand, which is a terrific endorsement of our
growth strategy and gives us a significant national brand presence.
During the year we added depth to our Leadership Team with a number of key leadership
appointments. This added capability and experience positions us well for our continued
growth and development as we deliver to our firms and clients.
8
COUNT ANNUAL REPORT 2023 Across the Count group, we now represent a community
of people in 193 accounting, wealth, and services firms
across Australia. In FY2023, the group served over 78,000
clients, with group revenues for the year increasing +7%
to $91.5M, providing our foundation for continued growth.
We are pleased to report a final dividend of 2.25 cents
per share, fully franked, returning 3.75 cents to
shareholders for the full year.
In FY2023, Count delivered increased adjusted profits
(EBITA) across all three of our operating segments.
Accounting profits grew by +8% to $22M, Wealth profits
grew by +23% to $2.6M (excluding the substantial gain
on acquisition) and Services grew by +35% to $2.6M. The
growth in Wealth and the diversified revenue streams
from our segments reflects the disciplined execution of
our strategy and builds resilience for future challenges
as they present.
In our Accounting segment, firm numbers remained
at 18, and clients grew to over 39,000. As a result of
resource constraints experienced primarily in the first
half, lockup days increased to 82. Not withstanding
resource restraints in 1H23, reported revenue remained
flat. We successfully completed eight acquisitions and
one merger in the segment and the acquisition pipeline
continues to reflect opportunity.
We grew Authorised Representatives (ARs) by +36% from
278 to 379 and 60 new firms joined Count as Corporate
ARs. We welcomed Affinia Financial Advisers Limited to
the group following the acquisition of the business from
TAL in May 2023. Our Wealth segment delivered strong
performance with reported revenues up +17% to $18.1M.
During the year, 25,065 Statements of Advice (SoA) and
Records of Advice (RoA) were delivered to clients.
After an operating review and cessation of operation
of Wealth Axis Holding Pty Ltd, our Services segment
delivered overall revenue of $6.8M, with Accurium
providing services to around 4,200 accounting firms.
Accurium continued to deliver against its growth
strategy with the launch of an SMSF technical helpdesk,
and further enhancing its education offering.
The strength of our community remains unchanged.
In March, our National Conference was a highlight, as
our community came together to connect, learn and
share best practices in a dynamic environment. With
inspiring keynote speakers like Dylan Alcott and valuable
educational content on offer, the conference was a
successful event attended by 500 delegates.
Our focus on the importance of people and culture
delivered results, with a notable increase to our Employee
Net Promoter Score (+7% to 29 points in 2023) and our
overall engagement score (80%, up +9%). Throughout
FY2024 we will continue enhancing our Employee Value
Proposition, ensuring Count remains a great place to
work for our people.
These results demonstrate a year of significant
transformation for the Group, with improvements
delivered across all operating segments and
substantial progress made against our strategic plan.
We continue to plan for ambitious growth in each of
our operating segments and are excited about the
momentum we have entering FY2024.
Hugh Humphrey
CEO
9
COUNT ANNUAL REPORT 2023 Count
Charitable
Foundation
Count Charitable Foundation (CCF) exists to improve the lives of the disadvantaged via
support organisations operating in the communities in which CCF members live and work.
During the year our Count firms were involved in fundraising for charities of their choice.
Many also undertook professional work on a pro bono basis for not-for-profits while others
gave up time for corporate volunteering benefitting charities close to their hearts. All dollar
matched by CCF!
2022–2023
Charities
supported
141
CCF
Donations
$1.2M
Value of
Count pro
bono work
$44,718
$ matched by CCF
Charity
donations
by CCF
Members
$350,011
$ matched by CCF
10
COUNT ANNUAL REPORT 2023 CCF Donations in 2022–2023
by sector $1.2M
Health & Medical
Education & Employment
Natural Disasters
Community Welfare
Overseas
Animal Welfare
Major Givings
Wesley Mission
Sponsoring Financial Literacy course for society’s most needy
Australia and International Red Cross
Disaster relief in Turkey, Syria, Pakistan and regional Victoria
The Dylan Alcott Foundation
Lifeline Australia and Lifeline International
Gold Coast Hospital Foundation
The Salvation Army
Cerebral Palsy Alliance
Epilepsy Action Australia
11
COUNT ANNUAL REPORT 2023 2023
$’000
91,481
1,639
3,163
(1,424)
(85,935)
8,924
3,304
12,228
(1,063)
(2,465)
8,700
(1,211)
7,489
5,100
2,389
4.63
4.57
182,333
166,587
1.09
210,179
136,461
89,464
4,331
2022
$’000
85,293
3,573
–
–
(80,863)
8,003
3,516
11,519
(1,069)
(2,154)
8,296
(941)
7,355
5,112
2,243
4.58
4.57
300,215
285,627
1.05
128,313
54,437
88,464
11,739
Change
%
7%
(54%)
100%
100%
6%
12%
(6%)
6%
(1%)
14%
5%
29%
2%
(0%)
7%
1%
nil
(39%)
(42%)
4%
64%
151%
1%
(63%)
Financial
Summary
Revenue from contracts with customers
Other income
Gain on bargain purchase
Impairment of intangible assets
Total operating expenses
Earnings before interest, tax and amortisation (‘EBITA’)
before profit from associates
Net share of associates profit
EBITA
Net interest expense
Amortisation expense
Profit before income tax expense
Income tax expense
Profit after income tax expense
Profit attributable to owners of Count
Profit attributable to non-controlling interest
Basic earnings per share (cents)
Diluted earnings per share (cents)
Current assets
Current liabilities
Current ratio
Non-current assets
Non-current liabilities
Net assets
Net cash
#
1
2
3
4
5
6
7
8
9
10
11
12
13
14
12
COUNT ANNUAL REPORT 2023 Notes to Financial Summary
1. Revenue from contracts with customers
6. EBITA
Revenue from contracts with customers (‘revenue’) was
higher than the prior year by 7% primarily due to revenue
growth recognised within the Wealth segment.
Revenue composition FY2023
7%
20%
73%
Accounting
Wealth
Services
Revenue increase by segment FY2023
(%)
30%
25%
20%
15%
10%
5%
0%
EBITA increased by 6% due to the gain on bargain
purchase and improved revenue, which was partially
offset by increased employment costs and the
impairment of Wealth Axis Holdings Pty Ltd.
7. Amortisation expense
The 14% increase in amortisation expense was driven
by the amortisation of acquired client relationship
intangible assets, arising from acquisitive activity
during the financial year.
8. Income tax expense
Income tax expense is higher when compared to the
prior year due to an increase in the profit before tax
and reduction on the non-taxable deductions.
9. Profit after income tax expense
Net profit after tax increased in the current year due
to increased revenue and strategic cost management.
Profit attributable to the owners of Count Limited was
$5.1M.
10. Current assets
Current assets decreased due to a reduction in the
indemnity asset from $238.0M to $87.5M within Count
Financial Limited (‘Count AFSL’) due to payments being
made as part of the remediation programme.
Accounting
Wealth
Services
11. Current liabilities
Segment
2. Other income
Other income was 54% lower than the prior period.
This is primarily due to accounting gains from the sale
of intangible assets in the prior period.
3. Gain on bargain purchase
The gain on bargain purchase arises from the
acquisition of Affinia Financial Advisers Limited during
the financial year.
4. Impairment of intangible assets
Impairment of intangible assets relates to the Group’s
51% investment in the underperforming entity, Wealth Axis
Holdings Pty Ltd, which was strategically disposed
of in the second half of FY2023.
5. Total operating expenses
Total operating expenses were 6% higher than the prior
period. This is primarily due to increased salaries and
wages costs in line with the increased revenue during
the period.
The decrease in current liabilities was due largely to the
decrease in the remediation provision within Count AFSL
from $238.0M to $87.5M, due to payments being made
as part of the remediation programme.
12. Non-current assets
Non-current assets have increased by $81.9M to
$210.2M due to an increase in goodwill, acquired client
relationships and advisor networks and ongoing
insurance commissions receivable as a result of
businesses acquired through strategic acquisitions.
13. Non-current liabilities
Non-current liabilities increased compared to prior year
due to an increase in ongoing insurance commission
payable resulting from businesses acquired through
strategic acquisitions.
14. Net cash
Net cash (cash and cash equivalent less interest bearing
liabilities) has decreased to $4.3M (2022: $11.7M) due
predominantly to increased interest bearing loans used
to fund acquisitive activity, and $1.7M utilised during the
share buy-back. Cash has remained stable during the
period.
13
COUNT ANNUAL REPORT 2023 Count
Board
Ray Kellerman
Ray has over 30 years of experience in the financial services industry including in the funds
management, financial advisory, life insurance and corporate and structured finance industries.
Previous appointments include Independent Chairman of ClearView Wealth, an ASX listed life
insurance and financial services company, and Independent Chairman of Credit Suisse Asset
Management Australia. Prior to this he was with Perpetual Trustees Australia for 10 years before
establishing his own financial services and compliance advisory business in 2001.
Ray is an owner and Executive Director of Quentin Ayers, an implemented asset advisor
specialising in alternative private market investments. He holds qualifications in law, economics,
investment securities and management.
Ray currently acts as a director for Goodman Funds Management Australia, Ironbark Asset
Management (Fund Services) and Ryder Capital. He is also active in a number of governance
related roles for some major fund managers operating in Australia.
Ray was appointed a Director of Count in January 2017 and Chairman in April 2017.
Alison Ledger
Alison has more than 30 years of experience in the financial services industry. She has held
senior operational and strategic roles in banking, funds management and insurance with
Chase, Bankers Trust and IAG. As a Partner with McKinsey & Company, Alison advised leading
global and Australian banks on strategy, performance improvement and organisational change.
Alison’s more recent experience has been in digital transformation and customer experience
(CX). As Executive General Manager of Product, Pricing and eBusiness, Alison ran IAG’s digital
business and CX for the consumer brands including NRMA, SGIO and SGIC.
Alison is Chair of Count’s Remuneration and Nominations Committee and a member of the Audit
and Risk Committee. She is also a Non-Executive Director of Audinate Group Limited (ASX:AD8)
and Latitude Group Holdings Limited (ASX: LFS).
Alison holds a Bachelor of Arts (Hons) in Economics from Boston College and an MBA from
Harvard University. She is also a graduate of the Australian Institute of Company Directors.
Kate Hill
Kate has over 20 years experience as an audit partner with Deloitte Touche Tohmatsu,
working with ASX listed and privately-owned clients. She has worked extensively in regulated
environments including assisting with Initial Public Offerings, capital raising and general
compliance, as well as operating in an audit environment. She held a variety of leadership and
executive roles in Deloitte and served for a period on the Board of Partners of the Australian firm.
Kate Hill is an Independent Non-Executive Director, Chair of the Audit and Risk Committee
and member of the Acquisitions Committee. She is also the Chair of Seeing Machines Limited
(AIM:SEE) as well as being a member of the Finance and Risk Committee and the People, Culture
and Remuneration Committee. During the year she joined the board of Artrya Limited (ASX:AYA)
and MedAdvisor Solutions Limited (ASX:MDR), where she is Chair of the Audit and Risk Committee
and member of the Remuneration and Nominations Committee. Post year end she joined the
board of Hipages Group Holdings Limited (ASX:HPG) where she will be the Chair of the Audit and
Risk Committee. During the year she resigned as a director of Elmo Software Limited (ASX:ELO)
on the successful sale of the business to a private equity firm, and also resigned as Company
Secretary of Kazia Therapeutics Limited (ASX:KZA, NASDAQ: KZIA).
Kate holds a Bachelor of Science (Hons) from Bristol University, is a member of the Institute of
Chartered Accountants in Australia and New Zealand, and a graduate of the Australian Institute
of Company Directors.
14
COUNT ANNUAL REPORT 2023 Carolyn Colley
Carolyn has more than 30 years leadership experience spanning financial services, product
development and innovation. Carolyn was most recently a co-founder and Chief Operating
Officer of Faethm Pty Ltd, a global Software-as-a-Service augmented analytics platform which
enables companies, governments and educators to understand the impact of emerging
technologies on the Future of Work. She was the Chief Operating Officer of Asgard Wealth
Solutions and St. George’s Wealth Management business and was the Head of Strategy for
Macquarie Advisor Services and the Head of Personal Banking at Macquarie Bank. Carolyn
was also the CEO of formerly listed software business, Decimal Software Limited.
Carolyn is an Independent Non-Executive Director of the subsidiary settlement and clearing
boards of the Australian Securities Exchange (ASX:ASX) and a member of the ASX Technology
Committee.
An Independent Non-Executive Director, Chair of the Information Technology Committee and
member Remuneration and Nominations Committee of ASX listed salary packaging and leasing
business Smartgroup (ASX: SIQ). An Independent Non-Executive Director and Chair of the Digital
Committee of Chartered Accountants Australia and New Zealand. Non-Executive Director and
member of the Board Risk and Compliance Committee of Milford Asset Management Limited
and Chair of Milford Australia Pty Limited. Carolyn is also a Non-Executive Director and Chair of
the Digital Technology Committee of Chartered Accountants Australia and New Zealand and
Non-Executive Director and Deputy Chair of Liverpool Neighbourhood Connections, a community
based not for profit organisation.
Tim Martin
Tim began his career with global strategy consulting firm Bain & Company, spending over
a decade working with clients in the UK and Australia.
His experience with Bain spanned multiple sectors including healthcare, telecommunications,
utilities and financial services for both large public companies and private equity owned
businesses.
Tim has spent the last twenty years in direct investing including over a decade as a Partner
at Crescent Capital Partners, one of Australasia’s leading private equity investment firms.
During his career Tim has served as a Chairman and Non-Executive Director of multiple private
equity portfolio companies. He also served two terms as a Director of the Australian Investment
Council, the industry body representing private capital in Australia.
Tim holds a first-class honours degree from Oxford University and an MBA from Harvard Business
School.
Hugh Humphrey
Hugh is the Chief Executive Officer and Managing Director of Count, and a Director of Count AFSL
and Affinia Financial Advisers Limited (‘Affinia’).
Hugh is a highly regarded executive in the financial services sector. He started his career
at global accounting giant PricewaterhouseCoopers, has been the CEO of Hillross Financial
Services and was the Executive General Manager for Wealth at Commonwealth Bank.
Most recently he was the senior executive responsible for NAB’s personal banking business in
NSW. Hugh is renowned as a growth leader and has delivered large-scale change programs
including wealth transformations at AMP and CBA.
He has significant expertise in effective risk management, business compliance and customer
remediation. He has deep client experience capabilities and digital expertise that he developed
in his time leading consumer and enterprise businesses in telecommunications with Optus
and Vodafone.
He is a Non-Executive Director of The Infants’ Home and has previously been a Director of
Hillross Pty Ltd, Vodafone Fiji and a Non-Executive Director of the Future2 Foundation.
Hugh holds a Bachelor of Commerce from The University of Sydney with double majors
in Economics and Marketing. He has an MBA from Henley Business School at the University
of Reading, UK. He is a Chartered Banker and he has completed the Australian Institute of
Company Directors course.
15
COUNT ANNUAL REPORT 2023 Directors’
Report
The Directors present their report, together with the financial statements, on the consolidated entity (referred to
hereafter as the 'Group') consisting of Count Limited (referred to hereafter as the 'Company', or 'Count') and the
entities it controlled at the end of, or during, the year ended 30 June 2023.
Board of Directors and Company Secretaries
The following persons were Directors and Company Secretaries of Count Limited during the whole of the financial
year and up to the date of this report, unless otherwise stated:
Ray Kellerman
Chairman
Alison Ledger
Independent Non-Executive Director
Kate Hill
Independent Non-Executive Director
Andrew McGill
Independent Non-Executive Director
Resigned 1 March 2023
Carolyn Colley
Independent Non-Executive Director
Tim Martin
Independent Non-Executive Director
Appointed 8 June 2023
Hugh Humphrey
Managing Director and Chief Executive Officer
Laurent Toussaint
Company Secretary
Resignation effective 29 September 2023
Narelle Wooden
Company Secretary
Resigned 17 October 2022
Doug Richardson
Company Secretary
Meetings of Directors
Board of Directors
Name
Position
Ray Kellerman
Chairman
Alison Ledger
Non-Executive Director
Kate Hill
Non-Executive Director
Andrew McGill
Non-Executive Director
Audit and Risk
Committee
Acquisitions
Committee
Remuneration
and Nominations
Committee
Technology
and Innovation
Committee
Meetings
Attended Position
Meetings
Attended Position
Meetings
Attended Position
Meetings
Attended Position
Meetings
Attended
7/7
7/7
7/7
3/4
Chair
1/1
Member
4/4
Member
4/4
Chair
4/4
Chair
4/4
Member
3/3
Chair
2/2
Member
3/3
Member
2/3
Carolyn Colley
Non-Executive Director
7/7
Member
4/4
Chair
4/4
Tim Martin
Non-Executive Director
Hugh Humphrey Managing Director and CEO
1/1
7/7
Chair
0/0
Member
0/0
Member
0/0
Member
3/3
Member
4/4
16
COUNT ANNUAL REPORT 2023
Principal activities
During the financial year the principal continuing
activities of the Group consisted of:
Accounting
Wealth
Services
the provision of accounting, audit and
assurance, taxation, financial planning
services and business and corporate
advisory services;
financial services provided by Australian
Financial Services licence (AFSL) holders;
and
other services that support the
accounting and wealth activities,
including actuarial certificates and
education services.
Review of operations
The profit for the Group after providing for income tax
and non-controlling interest amounted to $5,100,000
(30 June 2022: $5,112,000).
The management team has been focused on working
with our member firms to improve the key financial,
cultural and strategic drivers and grow organically,
through working with our member firms, and
inorganically by acquisitive activity, which is reflected
in the financial results for the year ended 30 June 2023.
Capital management
Interest-bearing debt has increased from $9,801,000
at 30 June 2022 to $17,337,000 at 30 June 2023. Count
continues to focus on prudent capital management
by improving cashflows generated by member firms,
paying dividends from operating cashflows and
investing in earnings accretive acquisitions after
undergoing a rigorous acquisition process.
Significant changes in the state
of affairs
On 1 July 2022, the Company merged wholly owned
subsidiary, Addvantage Financial Freedom Pty Ltd
with member firm Twomeys Group Pty Ltd, where it is
best positioned for strategic opportunities and growth.
As part of the transaction, Cooma Accounting and
Financial Services Pty Ltd, was disposed of for $1,505,000.
On 4 July 2022, the Company’s member firm, CountPlus
One Pty Ltd (‘CP1’), acquired the business of CDC Partners
for $600,000.
On 1 August 2022, the Company acquired 32.75%
shareholding in WSC Group – Aust Pty Ltd for a total
purchase consideration of $3,050,000.
On 14 February 2023, the Company’s member firm
Moggs Accounting + Advisory Pty Ltd acquired Timothy
Trevor Gubbins, a Shepparton-based accounting firm
for $1,270,000.
On 28 February 2023, following the completion of an
operational review and cessation of operations, the
Company disposed of its 51% investment in Wealth Axis
Holdings Pty Ltd. The proceeds for the sale was $1.
Count Limited changed its name from CountPlus Limited
on 4 May 2023. There has been no change to the ABN.
On 29 May 2023, the Company acquired 100% of the
ordinary shares of Affinia Financial Advisers Limited
(‘Affinia’) from TAL (owned by Dai-ichi Life Group) for
net cash consideration of $3,373,000. Affinia has 75
practices including holistic financial advisory firms and
risk specialists. It was acquired as part of the Company’s
Wealth strategy to accelerate scale and grow its risk
advice capability and revenues.
On 8 June 2023, the Company’s member firm CP1
acquired RHA Associates, a Sydney-based accounting
firm for $1,022,000.
17
COUNT ANNUAL REPORT 2023 Dividends
Count’s dividend policy is set at a range of between 60% to 90% of maintainable profit after income tax expense and
minority interest, subject to market conditions and company performance.
Count is committed to the following principles in determining the dividend policy:
• Payment of dividends out of operating cashflows; and
• Consideration of debt reduction, working capital and investments.
The Board is pleased to declare a final dividend of 2.25 cents per share fully franked for the financial year ended
30 June 2023 (30 June 2022: 2.00 cents per share). The half-year 2023 dividend paid and final 2023 dividend declared
were 82% of maintainable net profit after tax and minority interest.
Dividends paid during the financial year were as follows:
Financial year ended
Franking
2022
2023
Fully franked
Fully franked
Status
Paid
Paid
Cents per share
Payment date
2.00 (per fully paid share)
12 October 2022
1.50 (per fully paid share)
5 April 2023
No other matters or circumstances have arisen since
the end of the financial year which significantly affected
or could significantly affect:
a)
b)
c)
the Group’s operations in future financial periods,
or consolidated entity,
the results of those operations in future financial
periods, or
the Group’s state of affairs of the consolidated entity
in future financial periods.
Events after reporting date
On 1 July 2023, Count Limited acquired a 40%
shareholding in Bruce Edmunds & Associates Pty Ltd.
The purchase consideration for this acquisition was
$2,651,000.
On 11 July 2023, Laurent Toussaint resigned as Chief
Financial and Operating Officer, and will depart the
business on 29 September 2023.
On 13 July 2023, Count Limited completed a share
buy-back scheme to enhance returns to shareholders
with specific capital management initiatives. A total
of 2,693,671 shares have been repurchased for a total
of $1,707,000.
On 15 August 2023, Count Limited member firm, Adelaide
based Crosby Dalwood Pty Ltd and Warnecke & Co
completed a merger to operate under a new entity
under the Count brand. The Group’s ownership over
the newly formed merged entity is 45%.
On 28 August 2023, the Directors resolved to declare
a final dividend of 2.25 cents (fully franked) to be paid
on 11 October 2023 (Record date 22 September 2023).
18
COUNT ANNUAL REPORT 2023 Material business risks
Cybersecurity risk
The main risks for the Group are classified into four
categories below. Group risks are regularly assessed by
the Board and the Board’s Audit and Risk Committee.
Risks are addressed in an appropriate manner and are
reflected through changes in Group policies as required.
Operational risk
The main operational risk for our accounting and
business advisory firms relates to inappropriate or
inadequate client advice. All firms are required to
have quality assurance processes and appropriate
professional indemnity insurance either directly or
as part of the Group policy. Accounting and business
advisory firms who are part of the Count Financial
Limited (‘Count AFSL’) or Affinia Financial Advisers Limited
licensee network are covered under professional
indemnity insurance arrangements for their financial
planning services.
Regarding the acquisition of Count AFSL, which
completed on 1 October 2019, the Commonwealth
Bank of Australia has provided a $520M indemnity
to cover remediation of past conduct.
A further operational risk relates to potential loss
of clients, working capital management and staff
costs which may be triggered by either senior team
departures or declining service levels. Accounting
and business advisory firms have regular Board
and management meetings in which the performance
of the firm and forecasts are analysed. Any operational
issues are also addressed at those meetings. Accounting
and business advisory Principals are subject to restraint
clauses as part of their employment contracts. In
addition, all accounting and business advisory firms
have succession plans in place.
Given the nature of the Group’s business, the reliance
on digital systems exposes the Group to potential data
breaches, cyberattacks, and operational disruptions.
These incidents could compromise information,
damage customer trust, disrupt operations, and lead
to financial consequences. The Group acknowledges
the implications that these risks have on client personal
information and actively implement measures to
enhance cybersecurity, including appropriate training for
staff. The Group expects these risks to only increase and
remain proactive in its approach to mitigate these risks.
Legislative risk
In terms of legislative risk, any substantive changes
that impact the provision of accounting / tax services
or financial planning services, could have a material
impact on the Group. For accounting / tax related
services, initiatives being considered by the Federal
Government to further reduce the requirement for
individuals to lodge tax returns may have some impact
on the compliance based work for some accounting
and business advisory firms.
Legislative risk is not currently expected to significantly
impact the profitability of accounting and business
advisory firms and the Group, but it will continue to
be closely monitored by the Board’s Audit and Risk
Committee.
Other risks
In addition to the main risk categories, the following are
some of the additional risks assessed by the Board:
Integration risk
risk relating to the successful
integration of newly acquired
member firms;
failure to control expenses
such as staff costs would
result in earnings for Count not
reflecting revenue performance
by member firms; and
the operations of the group are
not subject to any particular
or significant Commonwealth,
State or Territory environmental
regulations.
Training and compliance monitoring have been
implemented to ensure standards are being met.
Expense management
Environmental and
climate, social and
governance risk
19
COUNT ANNUAL REPORT 2023
Remuneration
Report (audited)
This Remuneration Report for the year ended 30 June 2023 forms part of the Directors’ Report. It has been prepared
in accordance with the Corporations Act 2001 (Cth) (the Act), the Corporations Regulations 2001 (Cth) and AASB124
Related Party Disclosures and audited as required by the Act. It also includes additional information and disclosures
that are intended to enable a deeper understanding by shareholders of Count’s remuneration governance and
practices.
Letter from the Chair of the Remuneration & Nominations Committee
The labour market has also been impacted by the
economic environment putting pressure on wages
and employment conditions. There has been strong
employment growth throughout FY2023. A tight labour
market, interest rate rises, and general inflation has
seen upward pressures on salaries and increased
competition to attract and retain talent. Recruitment
in the Accounting and the Wealth verticals remains
competitive.
Dear Shareholders,
On behalf of the Board, I am pleased to present the
Remuneration Report for the year ended 30 June 2023
(‘FY2023’). The Remuneration Report aims to provide
information regarding the remuneration framework
and structure for Key Management Personnel (‘KMP’)
including Non-Executive and Executive Directors of
Count for FY2023 with a focus on addressing the
interests of all stakeholders.
This year we have seen significant changes made to
the employment landscape with the Australian Federal
Government passing the Secure Jobs Better Pay Bill –
making the most significant amendments to the Fair
Work Act (Cth) 2009 since the Act was introduced. At the
same time the Parliament also passed the Respect@
Work Bill implementing many of the recommendations
made in the Australian Human Rights Commission.
These two bills have meant significant changes to
the employment landscape aiming to rebalance the
relationship between employers and employees by
improving job security, transparency, and gender equity.
20
COUNT ANNUAL REPORT 2023 We are committed to ensuring that we maintain our
ability to attract and retain talent whilst managing our
cost base. As a result, we have several initiatives that
will assist:
• The rebranding to Count Limited, one team and the
creation of a unified culture to deliver better results
for our clients, customers and shareholders;
• Refinement to the Employee Value Proposition
(‘EVP’) to boost our ability to attract and retain talent
by having a compelling proposition that covers
employee benefits, learning opportunities, wellbeing
initiatives and uplifting leadership capability;
• We have partnered with Melbourne Business School
to educate and upskill our future leaders to build
capability to create a strong leadership foundation
that will enhance our delivery on our strategy; and
• Our continued commitment to the Count Charitable
Foundation by embedding our commitment in our
EVP.
Key to our culture is promoting a workplace where
employees' health and wellbeing is supported, a
workplace that fosters diversity and inclusion; and having
a socially conscious business by giving back to our local
communities we live in. In terms of gender diversity, we
are proud to acknowledge that the leadership team
and the Board of Directors have a gender ratio of 50:50
female and male representation.
This year Count has partnered with Wesley Mission to
support their financial literacy program, “In Charge of My
Money”, a financial literacy program offered to the most
vulnerable people in our community. The program is a
community-led solution building financial confidence,
resilience, and wellbeing. In addition to our commitment
to Wesley Mission the Count Charitable Foundation and
our network raised $1.2M in donations.
There has been a change to the current executive
remuneration strategy and framework in relation to the
measurement period for the FY2023 Long-term Incentive
(‘LTI’). The measurement period has changed from
four-years to three-years to align with external market
practices to ensure we continue to provide a fair and
competitive remuneration framework to motivate and
retain high calibre individuals.
On 1 July 2022 Mr Laurent Toussaint was appointed as
Chief Financial and Operating Officer. The role of General
Counsel and Company Secretary held by Ms Narelle
Wooden ended and Ms Wooden departed on 17 October
2022 and the role of General Counsel was not replaced.
On 11 July 2023 Mr Laurent Toussaint, Chief Financial and
Operating Officer resigned after five and a half years
to pursue a new professional opportunity. Mr Laurent
Toussaint’s last day will be 29 September 2023.
The role of Chief Advice Officer is no longer considered
a KMP role. As a result Mr Andrew Kennedy ceased being
a KMP on 20 February 2023.
In FY2023 Count Limited appointed Ms Lisa Chambers
to a newly created role, Chief Risk Officer and Ms Raelene
Hinchliffe to Group Head of People & Culture, these are
critical roles for the business as we continue to grow and
focus on our people and culture and our enterprise risk
across our business.
Mr Andrew McGill, an Independent Non-Executive
Director and the Chair of the Acquisitions Committee
retired on 1 March 2023 after 5+years of service with
Count. We are pleased to share that Mr Tim Martin
joined as an Independent Non-Executive Director on the
8 June 2023. Mr Tim Martin is Chair of the Acquisitions
Committee, a member of the Technology and Innovation
Committee and a member of the Remuneration and
Nominations Committee.
Alison Ledger
Chair of the Remuneration and Nominations Committee
21
COUNT ANNUAL REPORT 2023
1
People covered by this report
This report covers KMP which are defined as those who have the authority and responsibility for planning, directing
and controlling the activities of Count.
Name
Role
Non-Executive KMP
Committee Membership
Appointed
Audit & Risk
Remuneration
& Nominations
Acquisitions
Technology
& Innovation
Ray Kellerman
Non-Executive Chairman
27/04/2017
Alison Ledger
Independent Non-Executive Director
1/10/2016
Kate Hill
Independent Non-Executive Director
26/06/2017
Chair
Andrew McGill
Independent Non-Executive Director
Carolyn Colley
Independent Non-Executive Director
4/12/2017
6/10/2020
Tim Martin
Independent Non-Executive Director
8/06/2023
Chair
Chair
Chair
Chair
Chair
Executive KMP
Hugh Humphrey
Chief Executive Officer
Laurent Toussaint
Chief Financial Officer
Chief Financial and Operating Officer
1/07/2022
22/01/2018
1/07/2022
Narelle Wooden
General Counsel and Company Secretary
19/11/2018
Andrew Kennedy
Chief Advice Officer, Count AFSL
13/01/2020
= Member of Committee
The following changes to KMP occurred during FY2023 or between the end of FY2023 and the date of publication
of this report:
a) Hugh Humphrey was appointed as CEO & Managing Director on 1 July 2022.
b)
Laurent Toussaint was appointed as Chief Financial and Operating Officer effective 1 July 2022. He resigned
as Chief Financial and Operating Officer on 11 July 2023, and will depart the business on 29 September 2023.
c) Narelle Wooden, General Counsel and Company Secretary departed on 17 October 2022.
d) Andrew Kennedy, Chief Advice Officer – Count AFSL ceased being a KMP on 20 February 2023.
e)
Andrew McGill, Independent Non-Executive Director and the Chair of the Acquisitions Committee retired on
1 March 2023. Ray Kellerman served as the Chair of the Acquisitions Committee from 1 March 2023 to 8 June 2023.
f)
Tim Martin, Independent Non-Executive Director and the Chair of the Acquisitions Committee was appointed
on 8 June 2023.
22
COUNT ANNUAL REPORT 2023 2
Remuneration Overview
2.1
Executive Remuneration Structure At-A-Glance
During FY2023, the remuneration structures in place were unchanged from the prior year, and the same structure
is expected to apply in FY2024. The following diagrams outline Count’s approach to executive remuneration and
the remuneration cycle under the framework applicable to FY2023:
Base Pay
Variable Remuneration
Purpose
To reward executives
with reference to position,
responsibility and
performance relative
to market benchmarks.
Short-Term Incentive
Long-Term Incentive
To reward Executive KMP for meeting
annual performance targets set by the
Board at the beginning of the reporting
period.
To align Executive KMP remuneration with
shareholder value over the longer term
subject to the satisfaction of challenging
performance conditions.
Delivery
Base Salary, Superannuation,
and Non-Monetary Benefits.
Cash.
Performance Rights over a Measurement
Period of 3 years.
Malus &
Clawback
The Group may immediately terminate employment at any time in the case of serious
misconduct, and the CEO and Other Executive KMP will only be entitled to payment
of total base pay up to the date of termination. On termination without notice by the
Group in event of serious misconduct: all unvested Short-term Incentive (‘STI’) or LTI
benefits will be forfeited; and any equity instruments provided to the employee on
vesting of STI and LTI awards that are held in trust, will be forfeited.
2.2
FY2023 Executive Remuneration Opportunities and Outcomes At-A-Glance
The following charts outline the remuneration target opportunity under Count’s executive remuneration structures:
Chart A
MD / CEO – Target
45%
22%
33%
Average Other Execs – Target
63%
24%
13%
Base Pay
Cash STI
LTI
23
COUNT ANNUAL REPORT 2023 3
Count’s Remuneration Strategy, Policy and Framework
3.1 Remuneration Philosophy, Policy and Governance
Remuneration Philosophy
Policy and Governance
Count’s Remuneration Policy (‘Policy’) has been
approved by the Board which outlines overall
responsibility for all remuneration decisions. The Policy
is reviewed at least once every three years to ensure
ongoing compliance with regulatory changes as more
information becomes known and the changes are due
to take effect.
Count has an established Remuneration and
Nominations Committee which, among other things, is
responsible for overseeing the remuneration and human
resource practices for the Group. In discharging these
responsibilities, the Remuneration and Nominations
Committee adheres to Count’s Policy, which is in place
to outline employee obligations and Count’s obligations;
• outline employee obligations and Count’s obligations;
• set out clear reporting and controls;
• define various terms to ensure a common
understanding; and
• clarify what happens if this policy or associated
procedures are breached.
The guiding principles that underpin our remuneration
philosophy across Count include:
• Shareholder aligned
Our executive remuneration framework supports
the delivery of our strategy and helps to create
shareholder value by linking remuneration outcomes
to relevant and measurable financial and non-
financial goals.
• Simple and transparent
Our remuneration framework is designed to ensure
the highest level of transparency and understanding,
externally and internally. Remuneration should
maintain appropriate proportions of fixed and
performance-related pay to avoid excessive
risk-taking.
• Clear remuneration governance
Our remuneration framework, policies and processes
are governed by clear guidelines and accountabilities
balanced with the ability for the Board to apply
judgement over potential unintended or unequitable
outcomes. All remuneration for the CEO and KMP
requires final approval by the Count Limited Board
with support of the Remuneration & Nominations
Committee.
• Fair, equitable and motivational
Our remuneration arrangements are designed to
attract and retain high-calibre individuals who live
our values and are collectively motivated by our
vision, purpose and achievement of our business
strategy. Remuneration should, where possible for
a comparable role, sit in the mid-quartile of the
industry-sector we operate.
• Personal accountability and shared responsibility
Our remuneration framework appropriately rewards
individual discretionary effort, teamwork, and
behaviour that is aligned with our values-based
culture. This is balanced with business unit / team
performance and must be reflective of the overall
performance of Count Limited.
• Recognises the importance of our non-financial
strategic drivers
Such as, Firms, People, Focus, Partners, Clients and
Community.
24
COUNT ANNUAL REPORT 2023 3.2
Executive Remuneration
The Group aims to reward executives based on their
position, responsibility, and performance, with a level
and mix of remuneration which has both fixed and
variable components. The executive remuneration
and reward framework has three components:
• base pay which includes salary, superannuation
and non-monetary benefits;
• short-term performance incentives; and
•
long-term performance incentives.
The combination of these make up the Executive’s total
remuneration. Base pay, consisting of base salary,
superannuation and non-monetary benefits, are
reviewed annually by the Committee based on individual
and business unit performance, the overall performance
of the consolidated entity and comparable market
remuneration. The STI program is designed to align
the targets of the business units with the performance
hurdles of executives. STI payments are granted to
executives based on specific annual targets and key
performance indicators being achieved. The LTI include
share-based payments. Performance rights are awarded
to executives over a period based on long-term incentive
measures. These measures are growth in earnings per
share (‘EPS’) and return on equity (‘ROE’) performance
hurdles. The Committee reviews the long-term equity-
linked performance incentives for executives annually.
3.3
FY2023 Short-Term Incentive Plan
A description of the STI structure applicable for FY2023 is set out below:
Purpose
To reward Executive Key Management Personnel for meeting annual performance targets set by the
Board at the beginning of the reporting period.
Measurement Period
The financial year of the Company (1 July – 30 June).
Opportunity
Outcome Metrics and
Weightings
Opportunity as % of
Total Fixed Remuneration
CEO
Other Executives
50%
75%
10% – 30%
15% – 45%
Target
Overachievement
Short-term incentives are in place to reward Executive Key Management Personnel for meeting annual
performance targets set by the Board at the beginning of the reporting period. The STI is set as a
percentage of Total Fixed Remuneration and performance is assessed against a balanced scorecard
of both financial and non-financial key performance indicators (‘KPIs’). Financial KPIs may change year
to year but can include; revenue growth, net profit after tax attributable to shareholders and acquisitions.
Non-financial KPIs may change year to year but can include; employee engagement and implementing
strategic initiatives.
All STIs awarded are recommended by the Committee to the Board for approval. As a listed Company,
the Directors are mindful of shareholder expectations for the Group’s performance when setting and
approving these incentives. Refer to the section “The Link Between Performance and Reward in FY2023”
for additional information regarding performance outcomes relative to objectives.
Gate
The STI pool activates when the threshold for Net Profit After Tax (‘NPAT’) to Count shareholders is
achieved, and the size of the pool is dependent on the size of the NPAT achieved.
Award, Settlement
and Deferral
Malus & Clawback
Awards will be calculated following the auditing of financial statements. These are delivered in cash.
The Group may immediately terminate employment at any time in the case of serious misconduct,
and the CEO and Other Executive KMP will only be entitled to payment of total base pay up to the date
of termination. On termination without notice by the Group in event of serious misconduct: all unvested
STI or LTI benefits will be forfeited; and any equity instruments provided to the employee on vesting of STI
and LTI awards that are held in trust, will be forfeited.
25
COUNT ANNUAL REPORT 2023 3.4 FY2023 Long-Term Incentive Plan
A description of the LTI structure applicable for FY2023 is set out below:
Purpose
Instrument
To align Executive Key Management Personnel’s remuneration with shareholder value and Count’s
strategy, as well as strike an appropriate balance between growth and long-term profitability. This
is subject to the satisfaction of two performance milestones, Diluted EPS Growth and Average ROE.
The LTI is in the form of Performance Rights (‘Rights’) with a nil exercise price, which are subject to
performance and service vesting conditions.
Measurement Period
1 July 2022 to 30 June 2025 (3 Years).
Opportunity
Opportunity as % of Base Pay
CEO
Other Executives
Target*
75%
10% – 20%
* Target opportunity is the maximum opportunity that executives may be awarded.
Grant Calculation
The number of Rights in a Tranche of LTI to be granted are calculated via the application
of the following formula:
Maximum LTI Award Value ÷ 30-day Volume Weighted Average Price (VWAP)
where Right Value is the 30-day VWAP value of a Right (ignoring vesting conditions
and not discounted).
Performance Metric
and Vesting Scale
These metrics have been selected because the Board believes they:
• align with Count’s strategy and interests of shareholders;
• best reflect the key financial performance metrics of Count; and
• strike an appropriate balance between growth and long-term profitability.
Tranche 1 – Diluted EPS growth (50%) Target and Vesting Schedule:
Target
Threshold
Diluted EPS
Growth
% of Performance
Rights Vesting*
12.50%
10%
100%
50%
* Straight-line vesting between threshold and target.
Tranche 2 – Average ROE (50%) Target and Vesting Schedule:
Target
Threshold
Average ROE
% of Performance
Rights Vesting*
15%
9%
100%
50%
* Straight-line vesting between threshold and target.
Retesting
No retesting.
26
COUNT ANNUAL REPORT 2023 Change of Control
On a takeover or change in control of the Company, any unvested Performance Rights may vest on a
pro-rata basis based on the most current financial reports available at the time the change of control
occurs unless otherwise determined by the Board. The pro-rata period will be calculated from the
Performance Rights grant date to the change of control date. If the KMPs remain employed with the
company after a change of control has occurred, and assuming the company remains listed, any
unvested Performance Rights will remain available for vesting at their original vesting dates.
Cessation of Employment
If an executive ceases employment before the vesting conditions are satisfied, the Performance Rights
will automatically lapse (unless the Board determines otherwise).
In the case of cessation of employment because of retirement, redundancy, death, or permanent
incapacity, the Board may approve a pro-rata vesting of the Performance Rights. The number of
Performance Rights that may vest on cessation of the KMPs’ employment in these circumstances will
be calculated as follows:
Date of Grant to Date of Termination (in days) ÷ Date of Grant to Intended Vesting Date (in days) × No. of
Performance rights held on cessation.
Disposal Restriction
Performance Rights cannot be transferred, disposed of, or have a security interest imposed over them.
Malus & Clawback
The Group may immediately terminate employment at any time in the case of serious misconduct, and
the CEO and Other Executive KMP will only be entitled to payment of total base pay up to the date of
termination. On termination without notice by the Group in event of serious misconduct: all unvested STI
or LTI benefits will be forfeited; and any equity instruments provided to the employee on vesting of STI and
LTI awards that are held in trust, will be forfeited.
3.5 FY2023 Non-Executive Director (‘NED’) Remuneration
The following outlines the principles that Count applies to governing NED remuneration:
Policy
Fees and payments to Non-Executive Directors reflect the demands and responsibilities of their role. Non-
Executive Directors’ fees and payments are reviewed annually by the Remuneration and Nominations
Committee (‘Committee’). The Committee may, from time to time, receive advice from independent
remuneration consultants to ensure Non-Executive Directors’ fees and payments are appropriate and
in line with the market. The Chair’s fees are determined independently to the fees of other Non-Executive
Directors taking into account the fees paid for similar roles in comparable companies. The Chair is
not present at any discussions relating to the determination of their own remuneration. Non-Executive
Directors are not entitled to participate in equity schemes of the Company and are not entitled to receive
performance-based bonuses. Non-Executive Directors are not entitled to retirement benefits other than
in respect of any superannuation entitlements.
The following outlines the Board Fees that were paid in FY2023 (note: an increase to Board Fees was
approved in FY2021)*:
Role
Chair
Non-Executive Director
Main Board*
Committees
$151,370
$80,823
$10,000
n/a
Fees are inclusive of superannuation.
* Base board fees and committee fees have not increased in FY2023 but there has been an increase
in superannuation inline with statutory requirements.
Aggregate Board Fees
The total amount of fees paid to Non-Executive Directors in the year ended 30 June 2023 is within the
aggregate amount of $700,000 which was approved at the Annual General Meeting on 16/11/2021.
27
COUNT ANNUAL REPORT 2023 4
The Link Between Performance and Reward in FY2023
The Board views the outcomes of remuneration for FY2023 performance as appropriately aligned to stakeholder
interests, given the strong group and individual performance against annual objectives, the shareholder value
created through share price growth to the end of FY2023, and progress towards strategic objectives made by the
executive team.
4.1 FY2023 STI Outcomes
The STI plan is designed to reward executives for the achievement against annual performance objectives set by the
Board at the beginning of the performance period. The payment of an STI is dependent on delivery of performance
against a range of outcome metrics.
Overall STI outcomes for FY2023 expressed as a % of target opportunity awarded and forfeited in the graph below:
Hugh Humphrey
Laurent Toussaint1
Andrew Kennedy2
Narelle Wooden3
Awarded %
Forfeited %
90%
90%
100%
100%
10%
10%
1
Laurent Toussaint resigned as Chief Financial and Operating Officer on 11 July 2023, and will depart the business on 29 September
2023. His STI award was forfeited for FY2023.
2 Andrew Kennedy was a KMP from 1 July 2022 to 20 February 2023. His role has not changed and remains within the Group.
3 Narelle Wooden was a KMP from 1 July 2022 to her departure on 17 October 2022. Her STI award was forfeited for FY2023.
4.2 FY2019 LTI Outcomes
The LTI Plan is designed to reward executives for meeting long-term value creation targets specified by the Board at
the start of the financial year, and to align executives’ interests with those of shareholders. The performance criteria
for the FY2019 LTI award was met for Tranche 1 (100%) and was not met for Tranche 2 in FY2023 and subject to service
criteria being met on 19th November 2023, the award will be paid in FY2024.
Instrument
Performance Rights.
Measurement Period
FY2019 to FY2023 completion.
Performance Metrics
and Weightings
Tranche 1 Diluted EPS growth 50% weighting.
Tranche 2 Average ROE 50% weighting.
Service Conditions
A 1-year service test for each year of the measurement period ending on 19 November 2023.
Performance Outcome and
Vesting Determination
The Board has assessed that the performance vesting conditions have been partially met. Should the service vesting
conditions be met, 100% of Tranche 1 and none of Tranche 2 vesting will apply in respect of the completed FY2023
reporting period for participants that held unvested FY2019 Performance Rights at the Vesting Date. This is in the
Board’s view appropriate given the value created for shareholders over the Measurement Period.
Board Discretions Applied
The Board did not apply any discretionary adjustments to the performance assessment or vesting.
28
COUNT ANNUAL REPORT 2023 Name
Role
Tranche
Weighting
Chief Financial
and Operating
Officer
Chief Advice
Officer, Count
AFSL
EPS Tranche
ROE Tranche
EPS Tranche
ROE Tranche
Laurent Toussaint
Andrew Kennedy
TOTAL \ AVERAGE
50%
50%
50%
50%
50%
Number Eligible
to Vest during
FY2023 for FY2024
Completion
Target
Performance
Actual
Outcome
% of Max
/ Stretch
/ Grant
Vested
Number
Vested
Grant
Date
VWAP
$ Value of LTI
that Vested
(as per Grant
Date VWAP)
31,970
12.50%
65.90%
100%
–*
$1.04
31,970
15.00%
6.92%
–
–
$1.04
–
–
14,071
14,071
12.50%
65.90%
100%
14,071
$1.04
14,633
15.00%
6.92%
–
–
$1.04
–
36.41%
50%
14,071
14,633
* Laurent Toussaint resigned as Chief Financial and Operating Officer on 11 July 2023, and will depart the business on 29 September 2023.
He is not expected to meet his service condition.
4.3 Use of Board Discretion
During the financial year and to the date of this report, the Board did not exercise any discretions available to it to
exceed maximum STI or LTI outcomes, vesting or awards.
5
Statutory Tables and Supporting Disclosures
5.1 Executive KMP Statutory Remuneration for FY2023
The following table outlines the statutory remuneration of Executive KMP ($, except where otherwise indicated):
Base Pay
Variable Remuneration
Total for the Year
Other Statutory Items
Name
Role(s)
Year
Salary
Super
Non-
Monetary
Benefits3
Total
Base
Pay
Cash STI1
LTI2
Total
Remuneration
Package (TRP)
Variable
Remuneration
% TRP
Termination
Benefits
Change in
Accrued
Leave
Hugh
Humphrey
Laurent
Toussaint
CEO & Managing Director
2023
550,000
27,500
– 577,500
259,875
72,187
909,562
CEO & Managing Director
2022
–
–
–
–
–
–
–
37%
–
Chief Financial &
Operating Officer
Interim Chief Executive
Officer & Chief Financial
Officer
2023
409,708 25,366
– 435,074
–
(50,785)
384,289
(13%)
2022
387,421 23,568
– 410,989
108,558
33,234
552,781
26%
–
–
–
–
11,270
–
(25,970)
5,735
Narelle
Wooden5
Andrew
Kennedy4
General Counsel &
Company Secretary
General Counsel &
Company Secretary
Chief Advice Officer,
Count AFSL
Chief Advice Officer,
Count AFSL
2023
193,990 12,037
–
206,027
–
(65,620)
140,407
(47%)
166,046
(43,722)
2022
299,791 23,568
– 323,359
77,343
25,735
426,437
24%
2023
198,654
16,183
–
214,837
38,671
(424)
253,084
2022
302,916 23,568
– 326,484
56,887
11,025
394,396
15%
17%
–
–
–
3,548
3,237
5,481
1
2
Note that the STI / bonus value reported in this table is the bonus that was awarded during the reporting period, being the award
earned during the current period. Variable remuneration outcomes for the reporting period are outlined elsewhere in this report.
Note that the LTI / equity value reported in this table is the amortised accounting charge of all grants that have not lapsed or vested
as at the start of the reporting period.
3 Non-monetary benefits include items such as car parking, car allowances, FBT, insurance etc.
4 Andrew Kennedy was a KMP from 1 July 2022 to 20 February 2023. His role has not changed and remains within the Group.
5 Narelle Wooden was a KMP from 1 July 2022 to her departure on 17 October 2022.
29
COUNT ANNUAL REPORT 2023 5.2 Non-Executive Director KMP Statutory Remuneration for FY2023
The following table outlines the statutory and audited remuneration of NEDs ($, except where otherwise indicated):
Name
Role
Ray Kellerman
Non-Executive Chairman
Non-Executive Chairman
Year
2023
2022
Alison Ledger
Independent Non-Executive Director
2023
Independent Non-Executive Director
2022
Kate Hill
Independent Non-Executive Director
2023
Independent Non-Executive Director
2022
Andrew McGill1
Independent Non-Executive Director
2023
Independent Non-Executive Director
2022
Carolyn Colley
Independent Non-Executive Director
2023
Independent Non-Executive Director
2022
Tim Martin2
Independent Non-Executive Director
2023
Independent Non-Executive Director
2022
Board Fee
Committee Fees
Superannuation
136,986
136,986
78,894
80,412
73,143
73,102
48,981
73,102
73,143
73,102
4,829
–
–
–
9,738
10,000
9,050
9,091
6,025
9,091
9,050
9,091
545
–
14,384
13,699
2,191
–
8,630
8,219
5,776
8,219
8,630
8,219
564
–
Total
151,370
150,685
90,823
90,412
90,823
90,412
60,782
90,412
90,823
90,412
5,938
–
1 Andrew McGill was an Independent Non-Executive Director from 1 July 2022 to 1 March 2023.
2 Tim Martin was an Independent Non-Executive Director from 8 June 2023.
5.3
KMP Equity Interests and Changes During FY2023
Movements in equity interests held by Executive KMP during the reporting period, including their related parties, are
set out below:
Held at
Open
FY2023
Granted during
FY2023
Forfeited
during
FY2023
Vested
during
FY2023
FY2023
Exercised
(or Shares
received from
Exercising)
FY2023
Purchased/
Other
FY2023 Sold
Held at Close
FY2023
Name
Instrument
Number
Date
Granted
Number
Number
Number
Number
Number
Number
Number
–
–
–
–
–
–
–
–
–
99,893
639,960
119,097
322,472
10,394
176,668
–
–
1,368,484
Hugh Humphrey
Shares
–
–
–
Unvested Rights
– 21/12/2022
639,960
Laurent
Toussaint
Shares
50,000
–
–
Unvested Rights
306,910 21/12/2022
118,117
(33,458)
(69,097)
Andrew Kennedy
Shares
10,394
–
–
Unvested Rights
84,769 21/12/2022
91,899
Narelle Wooden
Shares
–
Unvested Rights
224,222
–
–
–
–
(224,222)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
69,097
99,893
–
–
–
–
–
–
–
–
–
–
–
–
TOTALS
676,295
N/A
849,976
(257,680)
(69,097)
69,097
99,893
30
COUNT ANNUAL REPORT 2023 Movements in equity interests held by Non-Executive KMP during the reporting period, including their related parties,
are set out below:
Number Held at Open
FY2023
FY2023 Purchased/
Other
FY2023 Sold
Number Held at Close
FY2023
Name
Instrument
Ray Kellerman
Shares
Alison Ledger
Shares
Kate Hill
Shares
Andrew McGill
Shares
Carolyn Colley
Shares
Tim Martin
Shares
Number
2,250,000
10,000
200,000
10,000
6,000
–
Number
750,000
–
–
–
–
–
TOTALS
2,476,000
750,000
Number
Number
–
–
–
–
–
–
–
3,000,000
10,000
200,000
10,000
6,000
–
3,226,000
The following outlines the accounting values and potential future costs of equity remuneration granted during FY2023
for Executive KMP ($, except where otherwise indicated):
2023 Equity Grants
Name
Tranche
Grant
Type
Vesting
Conditions
Grant Date
Total Value at
Grant
Value Expensed
in FY2023
Max Value to be
Expensed in
Future Years
Hugh Humphrey
Laurent Toussaint
Andrew Kennedy
FY2023 LTI Performance Rights
LTI
EPS Growth
21/12/2022
FY2023 LTI Performance Rights
LTI
Average ROE
21/12/2022
FY2023 LTI Performance Rights
LTI
EPS Growth
21/12/2022
FY2023 LTI Performance Rights
LTI
Average ROE
21/12/2022
FY2023 LTI Performance Rights
LTI
EPS Growth
21/12/2022
FY2023 LTI Performance Rights
LTI
Average ROE
21/12/2022
216,562
216,562
39,971
39,970
31,099
31,098
(72,187)
–
–
–
(10,366)
–
144,375
216,562
–
–
20,733
31,098
575,262
(82,553)
412,768
TOTALS
Note 1:
The minimum value to be expensed in future years for each of the above grants made in FY2023 is nil. A reversal of previous
expense resulting in a negative expense in the future may occur in the event of an Executive KMP departure or failure to meet
non market-based conditions including failure for gate to open.
Note 2:
No expense has been recognised for Laurent Toussaint given he will not meet the services condition of the 2023 equity rights
grant due to his resignation effective 29 September 2023.
5.4 KMP Service Agreements
5.4.1 Executive KMP Service Agreements
The following outlines current Executive KMP service agreements:
Name
Role(s)
Employing
Company
Duration of
Contract
From Company
From KMP
Period of Notice
Hugh Humphrey2
Chief Executive Officer
Count Limited
No Fixed Term
Six months
Six months
Laurent Toussaint3
Chief Financial & Operating Officer
Count Limited
No Fixed Term
Three months
Three months
Termination
Payments1
288,750
106,250
1
2
Under the Corporations Act, broadly the Termination Benefit Limit is 12 months average Salary (over prior 3 years) unless shareholder
approval is obtained.
In the case of redundancy within three years of the commencement date, where the employee has not otherwise obtained suitable
employment, the Company will pay a redundancy payment of six months remuneration, in addition to the six month termination
notice period payment.
3
Laurent Toussaint resigned as Chief Financial and Operating Officer on 11 July 2023, and will depart the business on 29 September 2023.
31
COUNT ANNUAL REPORT 2023 5.4.2 Non-Executive Directors Service
Agreements
The appointment of Non-Executive Directors is subject to
a letter of appointment. The letter summarises the Board
policies and terms, including remuneration. The NEDs
are not eligible for any termination benefits following
termination of their office, nor any payments other
than those required under law such as in respect of
superannuation. There are no notice periods applicable
to either party under this approach.
5.5 Other Statutory Disclosures
5.5.1 Loans to KMP and their related parties
During the financial year and to the date of this report,
the Company made no loans to directors and other KMP
and none were outstanding as at 30 June 2023 (2022: Nil).
5.5.2 Other transactions with KMP
$11,613 of revenue was earned from KMPs relating
to accounting fees earned at arms length.
5.5.3 External Remuneration Consultants
During FY2023, no external consultant or advice was
provided. No remuneration recommendations were
made under Section 9B and Section 300A of the
Corporations Act 2001.
This concludes the remuneration report, which has
been audited.
Indemnity and insurance of officers
During the financial year, the Group paid a premium
in respect of a contract to insure the Directors and
Executives of the Group against a liability to the extent
permitted by the Corporations Act 2001. The contract
of insurance prohibits disclosure of the nature of the
liability and the amount of the premium.
Environmental regulation
The Group is not subject to any significant environmental
regulation under Australian Commonwealth or State law.
Non-audit services
The auditors, Grant Thornton Audit Pty Limited (including
any other person or firm on the auditors behalf) did not
provide any non-audit services during the year.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as
required under section 307C of the Corporations Act 2001
is set out immediately after this Directors’ report.
Rounding of amounts
The Group is of a kind referred to in Corporations
Instrument 2016 / 191, issued by the Australian Securities
and Investments Commission, relating to ‘rounding-
off’. Amounts in this report have been rounded off
in accordance with that Corporations Instrument to
the nearest thousand dollars, or in certain cases, the
nearest dollar.
Corporate Governance statement
The Group’s Directors and management are
committed to conducting the business of the Group
in an ethical manner. The Group has adopted and
has substantially complied with the ASX Corporate
Governance Principles and Recommendations (Fourth
Edition) (Recommendations) to the extent appropriate
to the size and nature of the Group’s operations. The
Group has prepared a statement which sets out the
corporate governance practices that were in operation
throughout the financial year for the Group, identifies
any Recommendations that have not been followed,
and provides reasons for not following such
Recommendations (Corporate Governance Statement).
In accordance with the ASX Listing Rules 4.7.4 and 4.10.3,
the Corporate Governance Statement will be available
for review on Count’s website (www.count.au) and will
be lodged together with an Appendix 4G with the ASX
while this Annual Report is lodged with ASX. The
Appendix 4G will identify each Recommendation that
needs to be reported against by Count and will provide
shareholders with information as to where relevant
governance disclosures can be found. The Group’s
corporate governance policies and charters and
policies are all available on Count’s website.
This report is made in accordance with a resolution
of Directors, pursuant to section 298(2)(a) of the
Corporations Act 2001.
On behalf of the Directors,
Ray Kellerman
Chairman
30 August 2023
Sydney
32
COUNT ANNUAL REPORT 2023 Auditor’s
Independence
Declaration
33
Grant Thornton Audit Pty LtdLevel 17383 Kent StreetSydney NSW 2000Locked Bag Q800Queen Victoria Building NSW 1230T +61 2 8297 2400www.grantthornton.com.auACN-130 913 594 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389. ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards Legislation. Auditor’s Independence Declaration To the Directors of Count Limited In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Count Limited for the year ended30 June 2023, I declare that, to the best of my knowledge and belief, there have been:ano contraventions of the auditor independence requirements of the Corporations Act 2001in relation to the audit; andbno contraventions of any applicable code of professional conduct in relation to the audit.Grant Thornton Audit Pty LtdChartered AccountantsS M ThomasPartner –Audit & AssuranceSydney, 30August 2023COUNT ANNUAL REPORT 2023 Financial
Statements
34
COUNT ANNUAL REPORT 2023 Contents
37
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
38
Consolidated Statement of Financial Position
39
Consolidated Statement of Changes in Equity
40
Consolidated Statement of Cash Flows
41
Notes to the Consolidated Financial Statements
94
Corporate Directory
95
Directors’ Declaration
96
Independent Auditor’s Report
35
COUNT ANNUAL REPORT 2023
36
COUNT ANNUAL REPORT 2023 Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 30 June 2023
Revenue from contracts with customers
Direct costs
Contribution margin
Other income
Indirect salaries and employee benefits expense
Administrative expenses
Other operating expenses
Operating profit
Gain on bargain purchase
Impairment of intangible assets
Share of net profits of associates accounted for using equity method
Net finance costs
Profit before income tax expense
Income tax expense
Profit after income tax expense for the year
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Profit for the year is attributable to:
Owners of Count Limited
Non-controlling interest
Total comprehensive income for the year is attributable to:
Owners of Count Limited
Non-controlling interest
Basic earnings per share
Diluted earnings per share
Note
2.2
2.3
2.1
2.1
2.3
2.3
6.1
5.1
6.2
2.4
6.3
6.3
2.5
2.5
2023
$’000
91,481
(42,891)
48,590
1,639
(22,720)
(10,917)
(11,872)
4,720
3,163
(1,424)
3,304
(1,063)
8,700
(1,211)
7,489
25
7,514
5,100
2,389
7,489
5,125
2,389
7,514
Cents
4.63
4.57
2022
$’000
85,293
(42,167)
43,126
3,573
(20,513)
(10,304)
(10,033)
5,849
–
–
3,516
(1,069)
8,296
(941)
7,355
17
7,372
5,112
2,243
7,355
5,129
2,243
7,372
Cents
4.58
4.57
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
37
COUNT ANNUAL REPORT 2023 Consolidated Statement of Financial Position
As at 30 June 2023
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Loans and advances
Indemnity asset
Total current assets
Non-current assets
Trade and other receivables
Contract assets
Investments in associates
Property, plant and equipment
Right-of-use assets
Intangible assets
Deferred tax assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Interest bearing loans and borrowings
Lease liabilities
Current tax liabilities
Provisions
Remediation provision
Other liabilities
Total current liabilities
Non-current liabilities
Contract liabilities
Interest bearing loans and borrowings
Lease liabilities
Provisions
Other liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained earnings
Equity attributable to the owners of Count Limited
Non-controlling interest
Total equity
Note
2023
$’000
2022
$’000
3.1
3.2
3.3
6.6
4.1
3.2
3.3
6.2
5.2
5.3
5.1
2.4
3.4
3.3
7.4
5.3
2.4
3.5
4.2
3.6
3.3
7.4
5.3
3.5
3.6
7.1
7.2
6.3
21,668
30,617
42,574
2
87,472
182,333
93
112,223
25,951
3,484
10,457
54,577
3,394
210,179
21,540
24,601
16,064
57
237,953
300,215
381
35,830
22,214
3,617
12,047
52,338
1,886
128,313
392,512
428,528
24,006
39,285
1,683
3,021
1,388
8,030
87,481
1,693
166,587
110,285
15,654
8,493
1,336
693
136,461
303,048
89,464
121,536
(48,411)
1,579
74,704
14,760
89,464
18,161
13,628
911
3,589
2,726
7,195
237,962
1,455
285,627
34,075
8,890
9,849
1,446
177
54,437
340,064
88,464
123,153
(47,896)
96
75,353
13,111
88,464
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
38
COUNT ANNUAL REPORT 2023
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2023
Issued
Capital
$’000
Treasury
Shares*
$’000
Share-
Based
Payment
Reserve
$’000
Foreign
Currency
Translation
Reserve
$’000
Acquisition
Reserve
$’000
Retained
Earnings
$’000
Total
$’000
Non-
Controlling
Interests
(NCI)
$’000
Total
Equity
$’000
Balance at 1 July 2022
126,566
(3,413)
668
(48,548)
Profit after income tax expense
for the year
Other comprehensive income
for the year, net of tax
Total comprehensive income
for the year
–
–
–
Transactions with owners
in their capacity as owners:
Share buy-back
(1,707)
Transactions with non-
controlling interests (‘NCI’)
Share-based payments for
long-term incentives (‘LTI’)
Dividends paid
Transfer of treasury shares
Reallocation of reversal of
share-based payment expense
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
13
–
90
–
(50)
(503)
–
–
–
–
–
–
–
–
–
Balance at 30 June 2023
124,859
(3,323)
128
(48,548)
(16)
–
25
25
–
–
–
–
–
–
9
96
75,353
13,111
88,464
5,100
5,100
2,389
7,489
–
25
–
25
5,100
5,125
2,389
7,514
–
(1,707)
–
(1,707)
(216)
(216)
1,259
1,043
–
13
–
13
(3,864)
(3,864)
(1,999)
(5,863)
(40)
503
–
–
–
–
–
–
1,579
74,704
14,760
89,464
Issued
Capital
$’000
Treasury
Shares*
$’000
Share-
Based
Payment
Reserve
$’000
Foreign
Currency
Translation
Reserve
$’000
Retained
Earnings /
(Accumulated
Losses)
$’000
Non-
Controlling
Interests
(NCI)
$’000
Total
$’000
Total
Equity
$’000
Acquisition
Reserve
$’000
Balance at 1 July 2021
126,566
(3,413)
814
(48,548)
(33)
(4,217)
71,169
10,653
81,822
Profit after income tax expense
for the year
Other comprehensive income
for the year, net of tax
Total comprehensive income
for the year
Transactions with owners
in their capacity as owners:
Transactions with non-
controlling interests (‘NCI’)
Share-based payments for
long-term incentives (‘LTI’)
Recognition of deferred tax
on equity transactions
Dividends paid
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(146)
–
–
–
–
–
–
–
–
–
–
17
17
–
–
–
–
5,112
5,112
2,243
7,355
–
17
–
17
5,112
5,129
2,243
7,372
2,025
2,025
2,237
4,262
–
(146)
524
524
–
–
(146)
524
(3,348)
(3,348)
(2,022)
(5,370)
Balance at 30 June 2022
126,566
(3,413)
668
(48,548)
(16)
96
75,353
13,111
88,464
* The Company has formed a trust to administer our long-term incentive. Shares held by the trust are disclosed as Treasury Shares and
deducted from contributed equity.
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
39
COUNT ANNUAL REPORT 2023 Consolidated Statement of Cash Flows
For the Year Ended 30 June 2023
Note
2023
$’000
2022
$’000
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Government grants received
Interest received
Interest and other finance costs paid
Income taxes paid
Net cash from operating activities
3.1
Cash flows from investing activities
Purchase of shares under equity partnership model
Proceeds from reduction of shareholding in associate investments
Purchase of business assets
Purchase of equipment and other non-current assets
Proceeds from sales under the equity partnership model
Proceeds from / (payments for) acquisition of subsidiary, net of cash acquired
6.1
Payments for acquisition of associates
Proceeds from sale of business assets
Payments for disposal of subsidiary, net of cash disposed
Dividends / distributions received from associates
6.2
Payment for deferred consideration on acquisition of controlled entities and associates 3.6
Proceeds from deferred consideration on sale of controlled entities and associates
Net cash from / (used in) investing activities
Cash flows from financing activities
Net proceeds from borrowings
Repayment of lease liability (AASB 16)
Purchase of shares under the share buy-back programme
Dividends paid
Repayment of borrowings
7.4
Payment of dividends by controlled subsidiaries to non-controlling interests
6.3
Net cash used in financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
3.1
3.1
197,270
(188,674)
–
8,596
357
(1,464)
(5,027)
2,462
(697)
145
(2,008)
(994)
2,201
670
(2,436)
1,255
(262)
2,565
(1,010)
1,155
584
7,773
(3,121)
(1,707)
(3,864)
–
(1,999)
(2,918)
128
21,540
21,668
151,463
(139,420)
97
12,140
21
(1,096)
(2,765)
8,300
(1,304)
–
(1,681)
(962)
1,487
(9,374)
(2,261)
3,152
–
2,358
(1,530)
–
(10,115)
10,620
(3,134)
–
(3,348)
(5,000)
(2,022)
(2,884)
(4,699)
26,239
21,540
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
40
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
1
Basis of Preparation
1.1 General information
Count Limited (‘the Company’) is a listed public company limited by shares, incorporated and domiciled in Australia, whose
shares are publicly traded on the Australian Securities Exchange (‘ASX’). The consolidated financial report for the year ended
30 June 2023 (‘the financial report’) comprises the parent and its controlled entities (‘the Group’). Count Limited is the ultimate
parent entity in the Group.
The Group’s core business is to collaborate with leading accounting and advice firms for the long-term success of the clients,
people and shareholders by the way of shared values, mutual success and sense of community.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 30 August 2023.
1.2 Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates
in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates
and assumptions on historical experience and on other various factors, including expectations of future events, management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal
the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below or within their
respective note.
Impairment
At each reporting date, the Group reviews the recoverable amount of its tangible and intangible assets to determine whether
there is any indication that these assets may be impaired. If such an indication exists, the recoverable amount of the asset,
assessed as the higher of its fair value less costs to sell and its value in use, is compared to its current carrying amount. Any
excess of the asset’s carrying value over its recoverable amount is expensed in the statement of profit or loss and other
comprehensive income.
The Group determines whether goodwill is impaired at least on an annual basis. This requires estimation of the recoverable
amount of the Cash Generating Unit (‘CGU’) by determining the value in use of each individual CGU.
The following key assumptions are used in determining the value in use calculation for each CGU:
• Revenue growth
3%;
• Direct employment expense ratio
38% to 58%;
• Discount rates
18.8%, 25.7% or 30.0% (pre tax); and
• Long-term growth rate (terminal rate)
2.5%.
Ongoing insurance commission
Ongoing insurance commissions reflect the upfront recognition of ongoing insurance commissions receivable and payable
then a new customer Is introduced to a product. The key assumptions underlying the ongoing insurance commission asset
and liability are the remaining life of the insurance products, the likely run off of products over time and the adviser payout ratio.
The assumptions below are subject to change depending on any changes to insurance arrangements or pricing changes.
The following key assumptions are used in determining the ongoing insurance commission;
• Remaining life
Five years; and
• Adviser payout ratio
95%.
41
COUNT ANNUAL REPORT 2023
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Acquired client relationships and adviser networks
Acquired client relationships and adviser networks are intangible assets identified in the acquisition of businesses and
represent that part of the purchase consideration that is attributable to and represented by the clients and customers with
long-term relationships with the business being acquired. The Group values these intangible assets as part of the acquisition
of the business by estimating the future cashflows that would be generated from these relationships and networks. The useful
life of these assets are 10–15 years and they are amortised and expensed using the straight-line method.
Gain on bargain purchase
A gain on bargain purchase arises when the consideration transferred and the pre-existing fair value is less than the fair value
of the identifiable net assets acquired. Judgement is exercised in determining the fair value of the net identifiable assets in
order to calculate the gain on bargain purchase. In particular, significant estimates and assumptions are used in estimating
the future cashflows of the acquired business to value the client relationships and adviser networks acquired.
Recovery of deferred tax assets
Deferred tax assets are recognised for only if the Group considers it is probable that future taxable amounts will be available
to utilise those temporary differences and losses.
AASB 16 Leases
Lease term
Where lease arrangements contain options to extend the term or terminate the contract, the Group assesses whether it is
‘reasonably certain’ that the option to extend or terminate the contract will be made. Consideration is given to the prevalence
of other contractual arrangements and or the economic circumstances relevant to the lease contract, that may indicate the
likelihood of the option being exercised. Lease liabilities and Right-of-Use assets are measured using the reasonably certain
contract term.
Lease discount rates
The discount rate applicable to a lease arrangement is determined at the inception of the contract or when certain
modifications are made to the contract. The discount rate applied is the rate implicit in the arrangement, or if unknown, the
Group’s incremental borrowing rate. The incremental borrowing rate is determined with reference to the Group’s borrowing
portfolio at the inception of the arrangement or the time of the modification and the amount and nature of the lease
arrangement. If the arrangement relates to a specialised asset, incremental project financing assumptions are considered.
42
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
2
Financial Performance
2.1 Operating segments
Identification of reportable operating segments
The consolidated entity is organised into three operating segments. These operating segments are based on the internal
reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers
(‘CODM’)) in assessing performance and in determining the allocation of resources. There is no aggregation of operating
segments.
Accounting
which comprises the provision of accounting, audit and assurance, taxation, financial planning services
and business and corporate advisory services.
Wealth
which comprises of financial services provided by Australian Financial Services licence (‘AFSL’) holders.
Services
which comprises of services that support the activities of the accounting segment and wealth segment.
The CODM primarily uses the measures of Earnings before interest, tax and amortisation (‘EBITA’) and contribution margin
(revenue less direct costs) to assess the performance of the operating segments.
No segment assets and liabilities are disclosed because there is no measure of segment assets and liabilities regularly
reported to the CODM.
The information reported to the CODM is on a monthly basis.
At 30 June 2023
Revenue
Intercompany revenue
Revenue from external parties
Segment contribution margin
Other income
Expenses
Share of net profit of associates earnings
Segment EBITA
At 30 June 2022
Revenue
Intercompany revenue
Revenue from external parties
Segment contribution margin
Other income
Expenses
Share of net profit of associates earnings
Segment EBITA
Accounting
$’000
67,338
(695)
66,643
30,212
777
(21,229)
3,304
Wealth
$’000
18,073
–
18,073
12,836
151
(10,212)
–
Services
$’000
7,164
(399)
6,765
5,542
–
(3,571)
–
Total
$’000
92,575
(1,094)
91,481
48,590
928
(35,012)
3,304
13,064
2,775
1,971
17,810
Accounting
$’000
Wealth
$’000
Services
$’000
Total
$’000
65,081
(568)
64,513
29,458
2,485
(21,781)
3,516
13,678
15,530
(121)
15,409
10,096
1,088
(7,968)
–
3,216
5,864
(493)
5,371
3,572
–
(2,246)
–
86,475
(1,182)
85,293
43,126
3,573
(31,995)
3,516
1,326
18,220
Reconciliation of segment contribution margin to profit from operations before income tax:
Segment EBITA
Gain on bargain purchase
Impairment of intangible assets
Corporate office and other income and costs
Amortisation expense
Net finance costs
Profit before income tax
The segment revenue described above represents revenue generated from external customers.
43
2023
$’000
17,810
3,163
(1,424)
(7,321)
(2,465)
(1,063)
8,700
2022
$’000
18,220
–
–
(6,701)
(2,154)
(1,069)
8,296
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Other income
Cost reimbursements
Gain on disposal of business asset
Net gain on disposal of assets of disposal groups classified as held for sale
Gain on lease variation
Other income
Government grants – COVID-19
Other income – segments
Gain on disposal of subsidiary
Other income
Other Income – corporate office
Total other income
Significant accounting policy
Cost reimbursements
2023
$’000
151
193
–
353
231
–
928
437
274
711
2022
$’000
1,088
536
1,103
474
275
97
3,573
–
–
–
1,639
3,573
Cost reimbursements are recognised at the point in time when the costs are incurred and owed to the Company.
Net gain on disposal of assets of disposal groups classified as held for sale
A net gain on disposal of assets of disposal groups classified as held for sale is recognised when the consideration received
for the sale of these assets is greater than the fair value of the assets of the disposal group.
Government grants
In the prior year, the Company received Jobkeeper payments of $97,000 from the Australian Government in support of
businesses significantly affected by COVID-19. In the current year, the Company did not receive any Jobkeeper payments.
Grants from the government are recognised at their fair value where there is reasonable assurance that the grant will be
received and the Group will comply with all attached conditions. Grants that compensate the Group for expenses incurred are
recognised in other income in the Consolidated Statement of Profit or Loss and Other Comprehensive Income on a systematic
basis in which the expenses are recognised.
2.2 Revenue from contracts with customers
Accounting
Accounting services revenue
Financial planning revenue
Other operating revenue
Total Accounting revenue
Wealth
Wealth revenue
Other operating revenue
Total Wealth revenue
Services
Actuarial certificates
Other operating revenue
Total Services revenue
Total Revenue from contracts with customers
Timing of revenue recognition
Transferred at a point in time
Transferred over time
44
2023
$’000
51,230
12,999
2,414
66,643
9,366
8,707
18,073
5,265
1,500
6,765
91,481
27,644
63,837
91,481
2022
$’000
50,851
12,095
1,567
64,513
8,154
7,255
15,409
3,791
1,580
5,371
85,293
24,513
60,780
85,293
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Accounting segment revenue policy
Accounting services revenue
Accounting services revenue includes fees generated by Count firms from services provided to clients.
Financial planning revenue
Financial planning revenue includes commissions and fees generated by Count firms from financial planning services
provided to clients.
Wealth segment revenue policy
Wealth revenue
Wealth revenue includes revenue generated from services performed by authorised representatives of Count Financial Limited
(‘Count AFSL’) or Affinia Financial Advisers Limited(‘Affinia’) (both AFSL holders). Count AFSL and Affinia are considered to be
acting as an agent under the requirements of AASB 15 Revenue from Contracts with Customers (‘AASB 15’) for revenue generated
from Commissions. Commissions are deducted from the gross number to obtain the reported net revenue figure as disclosed
in the Consolidated Statement of Profit or Loss and Other Comprehensive Income. Count AFSL and Affinia are considered to be
acting as a principal under the requirements of AASB 15 for revenue generated from Fees and other related costs.
Services segment revenue policy
Services revenue
Services revenue includes fees generated by Count firms for the provision of actuarial certificates, paraplanning, administration
and merged solution services to clients.
Significant accounting policy
Revenue recognition
To determine whether to recognise revenue, the Group follows a five-step process:
1. Identifying the contract with a customer;
2. Identifying the performance obligations;
3. Determining the transaction price;
4. Allocating the transaction price to the performance obligations; and
5. Recognising revenue when / as performance obligation(s) are satisfied.
The Group often enters into transactions involving a range of the company’s products and services, for accounting financial
planning, wealth and services. In all cases, the total fee charged for an engagement is allocated amongst the various
performance obligations based on their relative stand-alone fees. The fee charged for an engagement excludes any amounts
collected on behalf of third parties. Revenue is recognised either at a point in time or over time, when (or as) the Group satisfies
performance obligations by transferring the promised services to its customers.
Performance obligations for accounting, financial planning, wealth and services revenue
The Group’s contracts comprise performance obligations around completing client deliverables in line with engagement
letter terms (based on the agreed billing method, standard of work and timeline). Under AASB 15, the Group must evaluate the
separability of the promised services based on whether they are ‘distinct’. A promised service is ‘distinct’ if both:
• the customer benefits from the item either on its own or together with other readily available resources; and
• it is ‘separately identifiable’ (i.e. the Group does not provide a significant service integrating, modifying or customising it).
Accounting services revenue
Accounting services revenue is recognised over a period of time. Accounting revenue from the provision of accounting services
is recognised on an accrual basis in the period in which the service is provided, based on time spent and performance
obligations satisfied. Any amounts unbilled at the end of the reporting period are presented in the Consolidated Statement
of Financial Position as contract assets. Recognition is in accordance with the terms of the client services agreement or
engagement letter, adjusted for any time that may not be recoverable with reference to the professional hours incurred.
Client engagement letter gives an enforceable right to payment for performance completed to date, including a reasonable
margin if the contract is terminated by the customer for reasons other than Count’s failure to perform as promised.
Financial planning revenue
Financial planning revenue is recognised at a point in time. Financial planning revenue from the provision of financial planning
services and loan commission is recognised at a point in time in the period in which the service is provided.
45
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Wealth revenue
Wealth revenue is measured at the fair value of the consideration received or receivable.
Wealth revenue is recognised when the amount of revenue can be reliably measured, it is probable that future economic
benefits will flow to the Group, and specific criteria have been met for each of the Group’s activities as described below.
(i) Fee income – ongoing service fees
Service fees are received from end customers for ongoing advice services which are available to a client over a 12 month
period. The performance obligation is to provide advice services to the customer throughout the period, as well as the
continuous administration and maintenance of the end customers’ portfolios. Income is recognised on an annual basis
in accordance with rates specified in agreements with Corporate Authorised Representatives and product providers.
These fees are recognised and charged over the length of the service.
(ii) Education partner fees
Fees are received from education partners to allow the facilitation of training to advisers. The performance obligation is the
provision of interaction to education partners for education and training purposes. The revenue is recognised over time across
the contractual period.
(iii) Commission income
Commission income is received for the referral services which triggered a successful referral of a customer into a product
where the customer has renewed the product for a second / subsequent year.
The net present value of future insurance commissions is recognised at the start of a contract when the performance
obligation has been met, typically when a customer is introduced to a new product.
For investment referral services, the Group is unable to forecast the insurance commission revenue in line with the highly
probable test in AASB 15. Therefore insurance commission revenue on investment referral balances are recognised when
received or paid.
(iv) Adviser fees
Adviser fees are received from financial advisers for financial advice licensee services which are provided on an ongoing basis.
The performance obligation is to provide advisers with an authority to trade, to provide training services and financial advice
support. Income is recognised over time in accordance with rates specified in agreements with advisers.
(v) Conference fees
Fees are received from advisers and other delegates as part of Count’s annual national conference. The performance
obligation is the provision of access for advisers and other delegates to the event, which includes the ability to attend plenary,
keynote and business sessions. Revenue is recognised at a point in time when the event occurs.
Services revenue
Services revenue consists mainly of the provision of s390 and death benefit actuarial certificates to clients. The revenue
is recognised at a point in time when the certificates are issued to the client and the performance obligation is met. The
remainder of services revenue mostly consists of administration and merged solution services, which are recognised over
time, in the period in which the service is provided and paraplanning, which is recognised at a point in time.
Other revenue
Other revenue includes fees received where the Company acts in the capacity of an agent rather than principal through
facilitation of software licences and IT equipment.
Interest revenue is recognised when there is control of the right to receive the interest payment.
Dividends received from associates are accounted for in accordance with the equity method of accounting. Other revenue
is recognised when the right to receive payment is established.
All revenue is stated net of the amount of goods and services tax (‘GST’).
46
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
2.3 Expenses
Direct Costs
Direct salaries and employee benefits expense
Other direct costs
Administrative and other operating expenses
Acquisition related expenses
Audit fees
Legal fees
Accounting and other professional fees
Sales and marketing expenses
Insurance expenses
Technology expenses
Premises expenses
Office administration expenses
Share based payment expense / (income)
Depreciation expenses
Amortisation expenses
Net loss on disposal of property, plant and equipment
Impairment of receivables
Loss on deferred consideration payment
Entertainment expenses
Loss from disposal of subsidiary
Other expenses
2.4 Taxation
Income tax expense
Income tax expense
Current tax
Deferred tax – origination and reversal of temporary differences
Under / (over) provision in prior years
Aggregate income tax expense
Income tax expense is attributable to:
Profit from continuing operations
Deferred tax included in income tax expense comprises:
Increase in deferred tax assets
(Decrease) / increase in deferred tax liabilities
Deferred tax – origination and reversal of temporary differences
47
2023
$’000
37,613
5,278
42,891
2023
$’000
382
472
376
592
2,549
1,574
4,865
1,373
574
13
4,239
2,465
51
125
622
182
66
2,269
22,789
2023
$’000
4,074
(2,872)
9
1,211
1,211
(1,532)
(1,340)
(2,872)
2022
$’000
36,854
5,313
42,167
2022
$’000
460
373
413
689
1,035
1,429
4,767
1,603
595
(146)
4,303
2,154
242
276
114
225
–
1,805
20,337
2022
$’000
3,705
(2,738)
(26)
941
941
(3,267)
529
(2,738)
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax
Tax at the statutory tax rate of 30%
Tax at the statutory tax rate of 30%
Share of equity accounted investments
Non-deductible expenses
Non-taxable accounting gains
Initial recognition of deferred tax asset on losses
(Gain) / loss on deferred considerations
Gain on bargain purchase
Taxable capital gain on disposal of fees
Non-taxable income
Non-deductible depreciation and amortisation
Impairment of goodwill
Tax effect of partially franked dividends
Other items
Under / (over) provision in prior years
Income tax expense
Deferred tax assets
The balance comprises temporary differences attributable to:
Employee liabilities (annual leave and long service leave)
Allowance for expected credit losses – trade receivables
Accruals
Contract liability – accrued insurance commission expense
Tax losses
Right-of-Use assets
Depreciation
Remediation provision
Capital losses
Other
Total deferred tax assets
Set-off of deferred tax liabilities pursuant to set-off provisions
Net deferred tax assets
48
2023
$’000
8,700
2,610
2023
$’000
2,610
(991)
195
(112)
–
(43)
(949)
–
(49)
67
306
196
(28)
1,202
9
1,211
2023
$’000
2,763
178
169
15,136
5,319
317
170
26,244
1,072
222
51,590
(48,196)
3,394
2022
$’000
8,296
2,489
2022
$’000
2,489
(1,055)
60
(303)
(354)
43
–
26
(36)
15
–
65
17
967
(26)
941
2022
$’000
2,276
143
527
13,700
3,899
662
111
73,775
–
238
95,331
(93,445)
1,886
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Movements in deferred tax assets
Opening balance
Charged to income tax expense
Deferred tax balances on acquisition of subsidiary
Charged directly to equity
Deferred tax balance on remediation provision
Net deferred tax assets
Deferred tax liabilities
The balance comprises temporary differences attributable to:
Work in progress
Prepaid expenses
Fair valued intangible assets
Contract asset – accrued insurance commission income
Indemnity asset
Other
Total deferred tax liabilities
2023
$’000
95,331
1,532
(128)
–
(45,145)
51,590
2023
$’000
1,434
38
4,536
15,918
26,244
26
48,196
2022
$’000
91,386
3,267
154
524
–
95,331
2022
$’000
1,106
16
3,970
14,409
73,759
185
93,445
Set-off of deferred tax assets pursuant to set-off provisions
Net deferred tax liabilities
(48,196)
(93,445)
–
–
Movements in deferred tax liabilities
At 1 July 2021
Net deferred tax balance on acquisition of subsidiaries*
Charged to the income tax expense
At 30 June 2022
At 1 July 2022
Net deferred tax balance on acquisition of subsidiaries*
Deferred tax balance on remediation provision
Charged to the income tax expense
At 30 June 2023
* Includes business assets acquired by member firms.
Fair Valued
Intangible assets
$’000
1,970
2,513
(512)
3,971
3,971
1,005
–
(625)
4,351
Other
$’000
88,392
41
1,041
89,474
89,474
231
(45,145)
(715)
43,845
Total
$’000
90,362
2,554
529
93,445
93,445
1,236
(45,145)
(1,340)
48,196
49
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
AASB Interpretation 23 Uncertainty over Income Tax Treatments (Interpretation 23)
Interpretation 23 clarifies the application of the recognition and measurement criteria in AASB 12 Income taxes where there
is uncertainty over income tax treatments. It requires an assessment of each uncertain tax position to determine whether it
is probable that a taxation authority will accept the position. Where it is not considered probable, the effect of the uncertainty
will be reflected in determining the relevant taxable profit or loss, tax bases, unused tax credits or tax rates. The amount will
be determined as either the single most likely amount or the sum of the probability weighted amounts in a range of possible
outcomes, whichever better predicts the resolution of the uncertainty.
Significant accounting policy
Income tax
The income tax expense or benefit for the period is the tax payable on that period’s taxable income based on the applicable
income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the
assets are recovered, or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
• when the deferred income tax asset or liability arises from the initial recognition of goodwill or 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 nor
taxable profits; or
• when the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing
of the reversal can be controlled, and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
Tax consolidation legislation
The parent and its 100% owned Australian subsidiaries formed an income tax consolidation group with effect from 5 November
2010. Subsidiaries joined the tax consolidation group from the date they became wholly owned. They would exit the tax
consolidation group once they are less than 100% owned. The parent and the controlled entities in the tax consolidated
group account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax
consolidated group continues to be a stand-alone taxpayer.
Members of the Count tax consolidation group entered into a tax sharing and funding agreement. Under the terms of this
agreement, each member in the tax consolidation group agreed to make a tax equivalent payment to the parent based
on their current tax liability or current tax asset. Deferred taxes are recorded by members of the tax consolidation group in
accordance with the principles of AASB 112 Income Taxes.
Current tax assets and liabilities
Current tax payable
2023
$’000
1,388
2022
$’000
2,726
Significant accounting judgements, estimates and assumptions
Income taxes
The Group is subject to taxes in Australia. The application of tax law to the specific circumstances and transactions of the
Consolidated entity requires the exercise of judgement by management. The tax treatments adopted by management in
preparing the financial statements may be impacted by changes in legislation and interpretations or be subject to challenge
by tax authorities.
Recognition of deferred tax assets on capital losses
Deferred tax assets are recognised for deductible temporary differences only if the Group considers it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
Count has recognised a deferred tax asset on tax capital losses. Count plans to continue with the successful equity partnership
model which is expected to result in transactions with firms in the segment over the next two to three years. A consequence
of these transactions is likely to create taxable capital gains. The envisaged structure of most of the transactions, being share
sale transactions, are subject to pre-defined financial hurdles being met by firms. Both the structure of the transactions and the
potential increase in value in the firms are likely to give rise to taxable capital gains which the Group has concluded will result
in the deferred tax assets being utilised in the foreseeable future.
In the current year, Count has not recognised capital losses generated during the year as it is unlikely the Group will be able
to generate sufficient taxable capital gains to utilise these.
50
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
2.5 Earnings per share
Earnings per share for profit
Profit after income tax
Non-controlling interest
Profit after income tax attributable to the owners of Count Limited
2023
$’000
7,489
(2,389)
5,100
2022
$’000
7,355
(2,243)
5,112
2023
Number
2022
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
110,243,025
111,610,249
Adjustments for calculation of diluted earnings per share
Long-term incentive performance rights
1,330,542
308,346
Weighted average number of ordinary shares used in calculating diluted earnings per share
111,573,567
111,918,595
Basic earnings per share
Diluted earnings per share
Significant accounting policy
Basic earnings per share is calculated by dividing:
2023
Cents
4.63
4.57
2022
Cents
4.58
4.57
• the profit attributable to owners of the Group, excluding any costs of servicing equity other than ordinary shares; and
• by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements
in ordinary shares issued during the year and excluding treasury shares.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to consider:
• the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares; and
• the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion
of all dilutive potential ordinary shares.
2.6 Dividends
Dividends paid during the financial year were as follows:
Dividends paid during the year
2.00 cent per share dividend paid in respect of the six months to 30 June 2022
1.50 cent per share dividend paid in respect of the six months to 31 December 2022
1.50 cent per share dividend paid in respect of the six months to 30 June 2021
1.50 cent per share dividend paid in respect of the six months to 31 December 2021
Total dividends paid during the year
Franking credits
Franking credits available for subsequent financial years based on a tax rate of 30%
2023
$’000
2,212
1,652
–
–
3,864
2023
$’000
11,552
2022
$’000
–
–
1,674
1,674
3,348
2022
$’000
9,160
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
• franking credits that will arise from the payment of the amount of the provision for income tax at the reporting date;
• franking debits that will arise from the payment of dividends recognised as a liability at the reporting date; and
• franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date.
51
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
3 Working Capital
3.1 Cash and cash equivalents
Current assets
Cash at bank
Reconciliation to cash and cash equivalents at the end of the financial year
The above figures are reconciled to cash and cash equivalents at the end of the financial
year as shown in the Consolidated Statement of Cash Flows as follows:
2023
$’000
2022
$’000
21,668
21,540
Balance as per Consolidated Statement of Cash Flows
21,668
21,540
Risk exposure
The Group’s exposure to interest rate risk is discussed in note 7.5. The maximum exposure to credit risk at the end of each
reporting period is the carrying amount of cash and cash equivalents mentioned above.
Significant accounting policy
Cash and cash equivalents
Cash and cash equivalents comprise of cash on hand, demand deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings
in current liabilities on the Consolidated Statement of Financial Position.
Reconciliation of profit after income tax to net cash from operating activities
2023
$’000
7,489
6,705
13
125
(11)
513
(353)
(669)
–
(768)
51
(3,304)
(3,163)
66
1,424
1,247
(44)
(6,836)
(4,314)
8,831
(2,308)
(1,508)
(724)
2,462
2022
$’000
7,355
6,457
(146)
276
–
114
(474)
(1,103)
524
(491)
(286)
(3,516)
–
–
–
1,810
(6)
(1,934)
(1,195)
4,030
(1,323)
(862)
(930)
8,300
Profit after income tax expense for the year
Depreciation and amortisation
Share-based payments
Impairment of receivables
Other non-cash gains in other income
Net loss on deferred consideration
(Gain) on lease variation
(Gain) on disposal of non-current assets
Deferred tax on equity transaction adjustment
Insurance commission accounting adjustment
Loss / (gain) on disposal of non-current assets
Share of associate net profit
(Gain) on bargain purchase
Loss on business disposal of subsidiary
Impairment of intangible assets
Employee entitlements
Accrued interest income
(Increase) in trade and other receivables
(Decrease) in contract liabilities
Increase in trade and other payables
(Increase) in income tax refund due
(Decrease) in deferred tax liabilities
(Decrease) in employee benefits
Net cash from operating activities
52
COUNT ANNUAL REPORT 2023
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
3.2 Trade and other receivables
Current assets
Trade receivables
Less: Allowance for expected credit losses
Other receivables
Prepayments
AFSL adviser revenue receivable
Deferred cash consideration receivable
Total current assets
Non-current assets
Other receivables
Deferred cash consideration receivable
Total non-current assets
2023
$’000
9,835
(363)
9,472
1,588
4,461
14,982
114
30,617
2023
$’000
–
93
93
2022
$’000
9,652
(404)
9,248
1,432
3,554
8,662
1,705
24,601
2022
$’000
299
82
381
Ageing analysis of trade receivables
As at 30 June, the ageing analysis of receivables is as follows and represents both current and overdue but not impaired
receivables:
Current
0 to 3 months
3 to 6 months
Over 6 months
2023
2022
Trade
receivables
$’000
Allowance for
expected credit
losses
$’000
Trade
receivables
$’000
Allowance for
expected credit
losses
$’000
6,376
1,006
1,493
960
9,835
(1)
(5)
(60)
(297)
(363)
7,370
895
681
706
9,652
(28)
(14)
(136)
(226)
(404)
Trade receivables are non-interest bearing and are generally on 30-day terms. Allowance for expected losses is based on
the lifetime expected credit loss and Group policies, grouped based on days overdue, and makes assumptions to allocate
an overall expected credit loss rate for each group. These amounts have been included on the face of the Consolidated
Statement of Profit or Loss and Other Comprehensive Income.
Movements in the allowance for expected credit losses are as follows:
Opening balance
Additional provisions recognised
Receivables written off during the year as uncollectable
2023
$’000
(404)
(125)
166
(363)
2022
$’000
(247)
(276)
119
(404)
The creation and release of the allowance for expected credit losses has been included in expense in note 2.3. Amounts
charged to the allowance account are generally written off when there is no expectation of recovery.
The maximum exposure to credit risk at reporting date is the carrying amount of each class of receivables mentioned above.
Refer to note 7.5 for more information on the risk management policy of the Group.
53
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Significant accounting policy
Trade receivables
Trade receivables are initially recognised at their fair value and subsequently measured at amortised cost using the effective
interest method, less allowance for expected losses.
Recoverability of trade receivables is reviewed on an ongoing basis. Trade receivable balances which are known to be
uncollectable are written off by reducing the carrying amount directly. An allowance for expected losses on trade receivables
is raised by applying a rate based on historic collection rates for overdue balances, which are reassessed each year, and
adjusted specific debtors where management is aware of specific conditions which affect the likely recovery of outstanding
balances. The loss allowance is the amount equal to the expected lifetime credit losses.
Significant accounting judgements, estimates and assumptions
Allowance for expected losses of receivables
The allowance for expected losses of receivables assessment requires a degree of estimation and judgement. It is based on
the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected
credit loss rate for each group. Outstanding debts that are deemed to be uncollectable are written off when identified.
Historical experience, information of the Group’s client base and available forward-looking information are considered
when determining the allowance for expected credit losses. The allowance for expected credit loss of receivables includes
assumptions about risk of default and expected loss rates; management judgement is applied determining these rates.
3.3 Contract assets and liabilities
Contract Assets
Current assets
Contract assets
Allowance for expected credit losses of contract assets
Ongoing insurance commission receivable
Loss allowance on insurance commission receivable
Non-current assets
Ongoing insurance commission receivable
Loss allowance on insurance commission receivable
2023
$’000
4,391
(213)
38,414
(18)
42,574
2023
$’000
112,245
(22)
112,223
2022
$’000
4,068
(204)
12,217
(17)
16,064
2022
$’000
35,852
(22)
35,830
Contract assets
Contract assets represents costs incurred and profit recognised on client assignments and services that are in progress
and have not yet been invoiced at reporting date. Contract assets are valued at net realisable value after providing for any
expected credit losses. Contract assets are recognised in the Consolidated Statement of Financial Position and the movement
recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.
Ongoing insurance commission receivable
Contract assets have been raised to reflect the recognition of ongoing insurance commissions receivable across various
commission arrangements. This reflects the upfront recognition of ongoing insurance commission income when
a performance obligation has been met, e.g. a new customer is introduced to a product.
The amount of ongoing insurance commission revenue and the associated expenses paid to aligned advisers is dependent
on assumptions about the term of the underlying insurance policies generating the commission. The Group has recognised
the net present value of expected future risk insurance commission income. Included in the recognition of the income
are assumptions around the remaining life of the product and the likely run off of products over time. Ongoing insurance
commission income, present valued, is only recognised to the extent that it is highly probable and on the basis that it is not
expected to reverse in future periods.
54
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Ageing of contract assets
As at 30 June, the ageing of the contract assets is as follows:
Current
0 to 3 months
3 to 6 months
over 6 months
Movement in allowance of credit losses
At 1 July
Changes in allowance for expected credit losses
2023
2022
Contract assets
$’000
Expected credit
loss
$’000
Contract asset
$’000
Expected credit
loss
$’000
1,764
1,183
908
536
4,391
(3)
(15)
(15)
(180)
(213)
1,516
1,015
822
715
4,068
2023
$’000
(204)
(9)
(213)
(13)
(51)
(56)
(84)
(204)
2022
$’000
(209)
5
(204)
The maximum exposure to credit risk at reporting date is the carrying amount of each class of receivables mentioned above.
Refer to note 7.5 for more information on the risk management policy of the Group.
Balance at 1 July
Amount recognised in revenue from contracts with customers
Acquisitions from business combinations
Receipt of ongoing insurance commission
Balance at 30 June
Contract Liabilities
Current liabilities
Unearned revenue
Ongoing insurance commission
Non-current liabilities
Ongoing insurance commission
Unearned revenue
2023
$’000
48,030
22,307
97,577
(17,295)
150,619
2023
$’000
1,548
37,737
39,285
2023
$’000
2022
$’000
31,726
29,915
–
(13,611)
48,030
2022
$’000
2,038
11,590
13,628
2022
$’000
110,285
34,075
Unearned revenue represent the Group’s obligation to transfer goods or services to a customer and are recognised when
a customer pays consideration before the Group has transferred the goods or services to the customer.
Ongoing insurance commission
Contract liabilities have been raised to reflect the recognition of ongoing insurance commissions payable across various
commission arrangements. This reflects the recognition of certain future insurance commission expenses when a performance
obligation has been met, e.g. a new customer is introduced to a product. The expense and contract liability is calculated based
upon the estimated payout to aligned advisers.
55
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Balance at 1 July
Amount recognised in revenue from contracts with customers
Acquisitions from business combinations
Payment of ongoing insurance commission
Balance at 30 June
Movement in unearned revenue
Opening balance
Payments received in advance
Transfer to revenue – included in the opening balance
Transfer to revenue – other balances
Closing balance
2023
$’000
45,665
21,532
97,577
(16,752)
148,022
2023
$’000
2,038
3,543
(1,608)
(2,425)
1,548
2022
$’000
29,672
29,150
–
(13,157)
45,665
2022
$’000
1,328
4,343
(1,198)
(2,435)
2,038
Significant accounting judgements, estimates and assumptions
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the lifetime
expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit loss rate
for each group. Contract assets where amounts are in excess of net recoverable value are written off when identified. Historical
experience, information of the Group’s client base and available forward-looking information are considered when determining
the allowance for expected credit losses. The allowance for expected credit loss of receivables includes assumptions about risk
of default and expected loss rates; management judgement is applied in determining these rates.
Ongoing insurance commission
The key assumptions underlying the ongoing insurance commission liability are the remaining life of the insurance products,
the likely run off of products over time and the adviser payout ratio.
It has been estimated that the insurance policies have a remaining life of five years and that 10% (2022: 10%) of policies are
cancelled at the end of each year. These assumptions are subject to change depending on the actual experience of the
insurance arrangements over time.
In respect of the adviser payout ratio, it has been estimated that 95% (2022: 95%) of ongoing insurance commission is paid
to aligned advisers in Count AFSL. This is estimated to be 100% for Affinia. This is subject to change if the adviser pricing changes
or if the average payout ratio changes across the portfolio; this may occur given the tiered pricing model applicable to aligned
advisers.
3.4 Trade and other payables
Current liabilities
Trade payables
Other payables
AFSL adviser payables
GST payable
Sundry payables and accrued expenses
Refer to note 7.5 for further information on financial instruments risk.
56
2023
$’000
1,873
289
17,422
1,638
2,784
24,006
2022
$’000
1,216
229
10,473
1,651
4,592
18,161
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
3.5 Provisions
Provisions
Current liabilities
Employee benefits – annual leave
Employee benefits – long service leave
Sick leave
Bonus provision
Non-current liabilities
Employee benefits – long service leave
Lease make good
Other
2023
$’000
2,964
3,642
18
1,406
8,030
2023
$’000
869
449
18
1,336
2022
$’000
3,299
3,289
38
569
7,195
2022
$’000
1,000
431
15
1,446
Significant accounting judgements, estimates and assumptions
Provisions
Provisions are recognised when the economic entity has a legal, equitable or constructive obligation to make a future sacrifice
of economic benefits to other entities as a result of past transactions or other past events. It is probable that a future sacrifice
of economic benefits will be required, and a reliable estimate can be made of the amount of the obligation.
Employee benefits
Further disclosures relating to Key Management Personnel are set out in the remuneration report which starts on page 20 of the
Directors’ Report.
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled
within 12 months after the end of the period in which the employees render the related service, are recognised in respect of
employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the
liabilities are settled. All short-term employee benefit obligations are presented as payables and as provisions.
Long-term obligations
The liability for long service leave not expected to be settled wholly within 12 months after the end of the period in which the
employees render the related service, is recognised in the provision for employee benefits and measured as the present
value of expected future payments to be made in respect of services provided by employees up to the end of the reporting
period using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of
employee departures and periods of service. Expected future payments are discounted using market yields at the end of the
reporting period of high-quality corporate bonds with terms and currencies that match, as closely as possible, the estimated
future cash outflows. Remeasurements as a result of experience, adjustments and changes in actuarial assumptions are
recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.
The obligations are presented as current liabilities in the Consolidated Statement of Financial Position if the entity does not have
an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual
settlement is expected to occur.
57
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
3.6 Other liabilities
Current liabilities
Deferred and contingent cash consideration
Other current liabilities
Non-current liabilities
Deferred and contingent cash consideration
Movements in deferred and contingent consideration and other liabilities
Current
At 1 July 2022
Arising during the year
Payments made during the year
Net gain on deferred and contingent consideration
Transfer from non-current deferred and contingent consideration
Total current
Non-current
At 1 July 2022
Arising during the year
Transfer to current deferred and contingent consideration
Total non-current
Total
2023
$’000
1,569
124
1,693
2023
$’000
693
693
2022
$’000
1,337
118
1,455
2022
$’000
177
177
2023
$’000
1,455
1,164
(1,010)
(93)
177
1,693
2023
$’000
177
693
(177)
693
2,386
Significant accounting judgements, estimates and assumptions
Contingent consideration
Some acquisitions involve the payment of contingent consideration to vendors. This consideration is determined based on a
multiple of actual earnings over a fixed period and is dependent on revenue or client retention. Consideration payable to the
vendors in relation to acquisitions is recognised at fair value based on estimated financial performance over the applicable
future financial years and the assessment of whether this estimated performance will meet thresholds for consideration to
be paid. Subsequent changes in the fair value of the contingent consideration is recognised in the Consolidated Statement
of Profit or Loss and Other Comprehensive Income. The component of deferred consideration not expected to be settled within
12 months after the end of the reporting period is measured as the present value of expected future payments to be made in
respect of this contingent consideration, using a risk adjusted discount rate.
58
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
4
Indemnity asset and remediation provision
4.1
Indemnity asset
Indemnity Asset
Indemnity asset
2023
$’000
87,472
2022
$’000
237,953
Included in the Consolidated Statement of Financial Position of Count AFSL (previously referred to as ‘Count Financial’) is a
provision for remediation amounting to $87,472,000. A corresponding indemnity asset has been recognised which represents
an amount receivable pursuant to an indemnity deed granted by the Commonwealth Bank of Australia (CBA). The provision
is for ongoing service fees charged to clients where no service was provided and for other advice issues. The provision relates
to the purchase of Count AFSL by Count during the 2020 financial year.
The indemnity provided by CBA relates directly to the remediation provision and is reduced as clients are remediated. The
indemnity at 30 June 2023 was $520,000,000. The indemnity is subject to renegotiation if some of the underlying assumptions
behind the provision are reassessed.
In connection with the sale of Count AFSL to Count Limited, CBA entered an Indemnity Deed (Deed) with Count Limited dated
1 October 2019, to cover remediation of past conduct. The limit of the CBA indemnity (Monetary Cap) has been increased
twice since the date of the Deed, utilising the adjustment mechanism contained in the Deed. The Deed currently has a limit
of $520 million and covers certain remediation activities that were identified at the time of sale and for up to four years
following the sale.
The timeframe for notification of any further Indemnified Conduct pursuant to the Deed will end on 1 October 2023. All
Indemnified Conduct, which has been notified to CBA will continue to be indemnified by CBA pursuant to the terms of the Deed.
Recoveries of remediation amounts are expected to be assessable for tax purposes. Note that remediation payments are
expected to be deductible for tax purposes.
4.2 Remediation provision
Current liabilities
Remediation provision – ongoing service fees – Count AFSL
Remediation provision – other advice issues – Count AFSL
Remediation provision – Total Financial Solutions Australia
2023
$’000
81,263
6,209
9
87,481
2022
$’000
237,209
744
9
237,962
Remediation provision – Count AFSL
The Count AFSL remediation provision represents the estimated cost of remediation of current and former clients in respect of
advice issues, including ongoing service fees charged where no service was provided. The advice issues occurred prior to the
acquisition of Count AFSL by Count on 1 October 2019. The provision includes the following elements:
Ongoing service fees – cost of remediation of clients
Ongoing service fees – interest on amounts payable to clients
Other advice issues
2023
$’000
37,620
43,643
6,209
87,472
2022
$’000
122,075
115,134
744
237,953
59
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Ongoing service fees
As at 30 June 2023, a total of $424,524,000 payments have been made. The following key assumptions have been reflected
in the remediation provision:
2023
2022
Value of ongoing service fees charged
$443,525,000
$454,751,000
Number of years in which issues occurred
11 years
11 years
Interest calculation methodology
RBA cash rate plus 6%
compounded monthly
RBA cash rate plus 6%
compounded monthly
Value below which refunds will be made without investigation
$3,000 (excluding interest)
$3,000 (excluding interest)
Remediation settlements will not be known until individual cases have been reviewed and compensation offers accepted.
Other advice issues
‘Other advice issues’ presented above relate to additional items covered under the CBA indemnity deed including remediation
due to specifically identified clients, deceased estates, clients of specific financial advisers and in respect of litigation matters.
While these items formed part of the indemnity provided by CBA to Count AFSL at 30 June 2020, they were unable to be
estimated at that date. Since 1 July 2020, resolution of these items has been prioritised, and at 30 June 2023, future expected
payments are able to be estimated.
Provision at 1 July 2022
Additional provisions
Amounts paid during the year
Provision at 30 June 2023
2023
$’000
237,953
239,974
(390,455)
87,472
Significant accounting judgements, estimates and assumptions
The key accounting judgements and estimates used in calculating the remediation provision include the value of ongoing
service fees charged, the number of years in which issues have occurred, the refund rate, the interest calculation methodology,
the length of time taken to make the refund and the value below which fee refunds will be made without investigation. The key
assumptions reflected in the remediation provision are subject to a high degree of uncertainty.
The value of ongoing service fees charged has been estimated using Count AFSL’s books and records and the books and
records of third-party product providers where relevant.
The interest calculation methodology that has been applied is based on a rate equivalent to the RBA cash rate plus 6%
compounded monthly. This methodology is subject to change.
Some customers may be remediated without investigation where the combined value of the refund and the interest is below
a certain amount, however this is dependent on the availability of underlying customer records. This is subject to change.
60
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
5 Capital Investments
5.1 Intangibles
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Acquired client
relationship /
Adviser networks
$’000
Goodwill
$’000
IT software
$’000
Brand
$’000
Other
intangible
assets
$’000 Total $’000
Balance at 1 July 2021
Additions
Additions through business combinations
Disposals
Amortisation expense
Balance at 30 June 2022
Additions
Additions through business combinations
Disposals through disposals of subsidiaries
Disposals
Impairment
Amortisation expense
27,339
–
8,829
–
–
36,168
–
2,141
(592)
–
(1,018)
–
6,920
–
7,518
(986)
(1,574)
11,878
–
4,565
(14)
–
(406)
(1,760)
518
74
1,058
(4)
(302)
1,344
65
–
(15)
(25)
–
1,388
–
792
–
(80)
349
–
697
–
(198)
36,514
74
18,894
(990)
(2,154)
2,100
848
52,338
–
–
–
–
–
3
–
–
–
–
68
6,706
(621)
(25)
(1,424)
(2,465)
(377)
(92)
(236)
Balance at 30 June 2023
36,699
14,263
992
2,008
615
54,577
Acquired client
relationship /
Adviser networks
$’000
IT
software
$’000
Other
intangible
assets
$’000
Brand
$’000
Goodwill
$’000
Total
$’000
46,158
(9,990)
36,168
47,707
(11,008)
36,699
34,571
(22,693)
11,878
38,338
(24,075)
2,108
(764)
1,344
1,834
(842)
2,285
(185)
2,100
2,285
(277)
1,077
(229)
86,199
(33,861)
848
52,338
1,080
(465)
91,244
(36,667)
14,263
992
2,008
615
54,577
At 30 June 2022
Cost
Accumulated amortisation and impairment
Net book value
At 30 June 2023
Cost
Accumulated amortisation and impairment
Net book value
Impairment tests for goodwill
Goodwill acquired through business combinations has been allocated to and is tested at the level of the respective CGUs,
for impairment testing. A CGU is the smallest group of assets that independently generates cash flow and whose cash flow is
largely independent of the cash flows generated by other assets. The concept is used by the Australian Accounting Standards
Board in the determination of asset impairment.
For the purpose of impairment testing, fifteen of the sixteen member firms listed in note 6.4, are considered as separate CGUs,
operating largely independently from other businesses in the Group. All subsidiaries are separately identified in note 6.4.
The Group utilises a value in use calculation using cash flow projections from financial budgets approved by senior
management covering a five-year period to assess the recoverable amount of the CGUs.
For the purpose of annual impairment testing, goodwill is allocated to the following CGU:
61
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Significant cash generating units
CountPlus One Pty Ltd
MBA Group Holdings Pty Ltd
Kidmans Partners Holdings Pty Ltd
Unite Advisory Pty Ltd
4Front Holdings Pty Ltd
Crosby Dalwood Pty Ltd
Moggs Accounting + Advisory Pty Ltd
Accurium Holdings Pty Ltd
Remaining cash-generating units
Impairment of goodwill
2023
$’000
5,990
5,639
4,245
4,656
3,811
1,782
3,107
3,783
3,686
2022
$’000
4,759
5,639
4,245
4,656
3,811
1,782
2,229
3,783
5,264
36,699
36,168
At 30 June 2023 management performed impairment testing for each CGU of Count. During the financial year ending 30 June
2023, impairment indicators were identified in relation to the Wealth Axis Holdings Pty Ltd CGU. Management determined that the
total goodwill for this CGU of $1,018,000 was no longer recoverable and was fully impaired.
Key assumptions used for value in use calculations
Key assumptions for this value in use calculation at 30 June 2023 were:
• Revenue growth of 3% from year 2–5;
• Direct employment expense ratio 38% – 58%; and
• The long-term growth rate (terminal rate) was estimated to be 2.5% p.a.
Revenue growth is based on the Board approved member firm budget for the next financial year as well as management
assessment over the forecast period. Budget revenue for 2024 is based on historical growth rates and management
expectations on the timing of acquisitive events and the average annual revenue growth thereafter is assumed to be
maintained at 3% p.a. over the remaining forecast period for all CGUs.
Employment expense ratios are based on the Board approved member firm budget for the next financial year and
management assessment over the forecast period. Direct employment expense ratio shows the employment cost as a
percentage of net revenue. This is assumed to be maintained between 38% and 58% over the forecast period for the majority
of CGUs.
Discount rates represent the current market assessment of the risks specific to the Group, considering the time value of money
and specific risk of the underlying assets that have not been incorporated into the cash flow estimates. The discount rate is
calculated using the weighted average cost of capital (WACC) and reflects management’s estimation of the time value of
money and specific risk estimated for the Group. The WACC considers both debt and equity. The cost of equity is derived from
the expected return on investment by the Group’s investors. It incorporates a beta factor to reflect the specific risk associated
with the industries in which the Group operates. The cost of debt is based on the interest-bearing borrowings the Group is
obliged to service. Management utilised a pre-tax discount rate of 18.75% (13% post tax) (2022: 18.75% (13% post tax)) for all CGU’s
with the exception of Accurium where a pre tax discount rate of 25.7% (18% post tax) (2022: 25.7% (18% post tax)) and Affinia
30.0% (21% post tax) was used. During the current period, management reconsidered the discount rate, while the rate remained
unchanged at 13% the composition of the inputs determining the rate have been adjusted.
It is assumed for the purpose of the analysis that the long-term growth rate (terminal rate) will equate to the long-term average
growth rate of the national economy. Management estimate this to be 2.5% p.a. which is in line with the long-term expected
Australian inflation rate. The sensitivity analysis concluded that changing this rate to reflect possible lower growth projections
would not materially impact the valuations of the individual CGUs.
62
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Sensitivity to changes in assumptions
Sensitivity has been tested for the following two CGUs based on management assessment that the assumptions in the value
in use calculation for these CGUs were most sensitive to change.
For Unite Advisory Pty Ltd: The recoverable amount as determined by the value in use calculation exceeds the carrying value
by $2,658,000 or 40%.
Reasonably possible changes in assumptions may result in impairment as set out below:
• Other things being equal, if the company’s yearly revenue is 5% less than expected over the forecast period, the recoverable
amount would exceed the carrying amount by $489,000.
• Other things being equal, if the pre-tax discount rate is increased from 18.57% to 25.00%, the recoverable amount would
exceed the carrying amount by $142,000.
• If the company’s employment cost margin (its single largest expense item) increases from 38% to 43% over the forecast
period, the recoverable amount would exceed the carrying amount by $339,000.
• If the long-term average growth rate decreases from 2.5% to 1% p.a., the recoverable amount would exceed the carrying
amount by $1,894,000.
For Crosby Dalwood Pty Ltd: The recoverable amount as determined by the value in use calculation exceeds the carrying
value by $913,000 or 51%.
Reasonably possible changes in assumptions may result in impairment as set out below:
• Other things being equal, if the company’s yearly revenue is 5% less than expected over the forecast period, an impairment
loss of $111,000 would result.
• Other things being equal, if the pre-tax discount rate is increased from 18.57% to 25.00%, the recoverable amount would
exceed the carrying amount by $161,000.
• If the company’s employment cost margin (its single largest expense item) increases from 50% to 55% over the forecast
period, an impairment loss of $109,000 would result.
• If the long-term average growth rate decreases from 2.5% to 1% p.a., the recoverable amount would exceed the carrying
amount by $679,000.
Significant accounting judgements, estimates and assumptions
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 the
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.
Impairment of intangible assets
At each reporting date, the Group reviews the recoverable amount of its tangible and intangible assets to determine whether
there is any indication that these assets may be impaired. An impairment loss is recognised for the amount by which the
asset’s carrying amount exceeds its recoverable amount. Recoverable amount is the higher of an asset’s fair value less costs
of disposal and value-in-use. The value-in-use is the present value of the estimated future cash flows relating to the asset
using a pre-tax discount rate specific to the asset or CGU to which the asset belongs. Assets that do not have independent
cash flows are grouped together to form a CGU.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for impairment,
or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less
accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and are not subsequently reversed.
IT software
Costs incurred in developing products or systems and costs incurred in acquiring software and licenses that will contribute
to future period financial benefits through revenue generation and / or cost reduction, are capitalised to software and systems.
Costs capitalised include external direct costs of materials and service and direct payroll and payroll related costs
of employees’ time spent on the project.
Significant costs associated with software are deferred and amortised on a straight-line basis over the period of their expected
benefit, being their finite life of 3–5 years.
63
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Acquired client relationships and Adviser networks
Acquired client relationships and adviser networks are intangible assets identified in the acquisition of businesses and
represent that part of the purchase consideration that is attributable to and represented by the clients and customers with
long-term relationships with the business being acquired. The useful life of these assets are 10–15 years and they are amortised
and expensed using the straight-line method.
Brands
Brands are intangible assets identified in the acquisition of businesses and represent that part of the purchase consideration
that is attributable to and represented by the value of the brand being acquired. They are amortised over 10–25 years and they
are amortised and expensed using the straight-line method.
Other intangible assets
Other intangible assets acquired are recognised at cost at acquisition. Following initial recognition, they are carried at cost less
any accumulated amortisation and accumulated impairment losses. These assets are amortised over the useful economic
life and assessed for impairment whenever events or changes in circumstances indicate that the carrying amount may not
be recoverable. An impairment loss is recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive
Income for the amount by which the asset’s carrying amount exceeds its recoverable amount.
This is in accordance with the expected pattern of future benefits based on the net cash flows expected from those assets.
The amortisation period and the amortisation method are reviewed at least annually as at 30 June to ensure the amortisation
expense reflects the performance of the intangible asset.
5.2 Property, plant and equipment
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Office
equipment
$’000
Furniture,
fixtures
and fittings
$’000
Leasehold
improvements
$’000
Other
property,
plant and
equipment
$’000
Motor
vehicle
$’000
Balance at 1 July 2021
Additions
Additions through business combinations
Disposals
Depreciation expense
Balance at 30 June 2022
Additions
Additions through business combinations
Disposals through disposals of subsidiaries
Disposals
Depreciation expense
Balance at 30 June 2023
1,195
553
68
(67)
(458)
1,291
594
–
(51)
(35)
(477)
1,322
686
142
15
(6)
(166)
671
129
92
(40)
(33)
(164)
655
2,065
193
36
(285)
(393)
1,616
256
132
(132)
(1)
(398)
1,473
25
–
–
(7)
(6)
12
–
–
–
(1)
(2)
9
35
–
–
–
(8)
27
–
–
–
–
(2)
25
Total
$’000
4,006
888
119
(365)
(1,031)
3,617
979
224
(223)
(70)
(1,043)
3,484
At 30 June 2022
Cost
Accumulated depreciation
Net book value
At 30 June 2023
Cost
Accumulated depreciation
Net book value
Office
equipment
$’000
Furniture,
fixtures and
fittings
$’000
Leasehold
improvements
$’000
Other
property,
plant and
equipment
$’000
Motor
vehicle
$’000
Total
$’000
2,925
(1,309)
1,616
3,168
(1,695)
1,473
286
(274)
12
244
(235)
9
69
(42)
27
69
(44)
25
9,660
(6,043)
3,617
9,843
(6,359)
3,484
4,141
(2,850)
1,291
4,143
(2,821)
1,322
2,239
(1,568)
671
2,219
(1,564)
655
64
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Significant accounting policy
Property, plant and equipment is stated at historical cost less accumulated depreciation and any impairment loss. Historical
cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be
measured reliably. All other repairs and maintenance are charged to profit or loss during the reporting period in which they
are incurred.
Depreciation is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated
useful lives or, in the case of leasehold improvements and certain leased plant and equipment, the shorter lease term, as
follows:
• Office equipment
4% – 20%
• Furniture, fixtures and fittings
8% – 37%
• Leasehold improvements
over the estimated life of the asset or shorter of the lease term
• Make good
• Motor vehicle
over the estimated life of the lease
20% – 25%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the
Consolidated Statement of Profit or Loss and Other Comprehensive Income.
5.3 Leases
Right-of-use assets
The Group as a lessee
The Group considers whether a contract is, or contains a lease. A lease is defined as ‘a contract, or part of a contract, that
conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration’.
To apply this definition the Group assesses whether the contract meets three key criteria, which include:
• the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being
identified at the time the asset is made available to the Group;
• the Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the
period of use, considering its rights within the defined scope of the contract; and
• the Group has the right to direct the use of the identified asset throughout the period of use. The Group assesses whether
it has the right to direct ‘how and for what purpose’ the asset is used throughout the period of use.
Measurement and recognition of leases as a lessee
At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the Consolidated Statement
of Financial Position. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease
liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end
of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received).
The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the
end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for
impairment when such indicators exist.
At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at
that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Group’s incremental
borrowing rate.
Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance
fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and
payments arising from options reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured
to reflect any reassessment or modification, or if there are changes in in-substance fixed payments.
When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit or loss if the
right-of-use asset is already reduced to zero.
The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead
of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit
or loss on a straight-line basis over the lease term.
65
COUNT ANNUAL REPORT 2023
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Non-current assets
Premises – right-of-use
Less: Accumulated depreciation
Total
Office equipment – right-of-use
Less: Accumulated depreciation
Total
Others – right-of-use
Less: Accumulated depreciation
Total
Balance at 30 June
Reconciliations
2023
$’000
28,090
(17,748)
10,342
760
(675)
85
53
(23)
30
2022
$’000
26,512
(14,645)
11,867
770
(592)
178
15
(13)
2
10,457
12,047
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Balance at 1 July 2021
Additions
Depreciation expense
Balance at 30 June 2022
Additions
Depreciation expense
Balance at 30 June 2023
Lease liabilities
Lease liabilities are presented in the Consolidated Statement of Financial Position as follows:
Current liabilities
Lease liabilities
Non-current liabilities
Lease liabilities
Right-of-use assets
$’000
13,103
2,216
(3,272)
12,047
1,606
(3,196)
10,457
2023
$’000
2022
$’000
3,021
3,589
8,493
9,849
The Group has leases for office buildings and office equipment. With the exception of short-term leases and leases of low-
value underlying assets, each lease is reflected on the Consolidated Statement of Financial Position as a right-of-use asset and
a lease liability. Variable lease payments which do not depend on an index or a rate are excluded from the initial measurement
of the lease liability and asset. The Group classifies its right-of-use assets in a consistent manner to its property, plant and
equipment (see note 5.2).
Each lease generally imposes a restriction that, unless there is a contractual right for the Group to sublet the asset to another
party, the right-of-use asset can only be used by the Group. Leases are either non-cancellable or may only be cancelled by
incurring a substantive termination fee. For leases over office buildings the Group must keep those properties in a good state
of repair and return the properties in their original condition at the end of the lease.
At 30 June 2023, 40 right-of-use assets were leased. The average lease term for premises is nine years, office equipment is five
years and others is four years. The average lease term includes option periods which management are reasonably certain will
be exercised.
The lease liabilities are secured by the related underlying assets. Future minimum lease payments (including option periods
which management are reasonably certain will be exercised) at 30 June 2023 is $13,576,000.
66
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Lease payments not recognised as a liability
The Group has elected not to recognise a lease liability for short-term leases (leases with an expected term of 12 months or less)
or for leases of low value assets. Payments made under such leases are expensed on a straight-line basis. In addition, certain
variable lease payments are not permitted to be recognised as lease liabilities and are expensed as incurred.
At 30 June 2023 the Group was not committed to short-term leases.
Variable lease payments expensed on the basis that they are not recognised as a lease liability include excess use charges
on office equipment. Variable payment terms are used for a variety of reasons, including minimising costs for IT equipment
with infrequent use. Variable lease payments are expensed in the period they are incurred.
Total cash outflow for leases for the year ended 30 June 2023 was $3,709,000 (2022: $3,767,000).
Amounts relating to leases recognised for the reporting period
The following amounts are recognised in Consolidated Statement of Profit or Loss and Other Comprehensive Income:
Depreciation charge for the right-of-use assets by class of asset
Premises
Office equipment
Others
Total depreciation charge
Interest expense on lease liabilities (included in finance cost)
Total expense related to leases
The following amounts are recognised in the Consolidated Statement of Cash Flows:
Cash outflow for leases (AASB 16) – financing activity
Cash outflow for leases – operating activity
2023
$’000
3,103
83
10
3,196
588
3,784
2023
$’000
3,121
588
3,709
2022
$’000
3,129
151
4
3,284
633
3,917
2022
$’000
3,134
633
3,767
67
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
6 Group structure
6.1 Business Combinations
Material Acquisition
Acquisition of Affinia Financial Advisers Limited
On 29 May 2023, the Company acquired 100% of the ordinary shares of Affinia Financial Advisers Limited from TAL (owned by
Dai-ichi Life Group) for net cash consideration of $3,373,000. Affinia has 75 practices including holistic financial advisory firms
and risk specialists. It was acquired as part of the Company’s Wealth strategy to accelerate scale and grow its risk advice
capability and revenues. The share sale agreement includes a clause for a contingent post completion adjustment if the
business over or under performs against revenue targets. The maximum payable or receivable adjustment is $632,000.
The gain on bargain purchase of $3,163,000 represents the excess of the fair value of the identifiable net assets of Affinia
over the purchase consideration.
Details of the acquisition accounting included in the reported results is as follows:
Amount settled in cash by Count Limited
Recognised amounts of identifiable net assets:
Cash
Prepayments
Accrued income
Intangible assets
Deferred tax liabilities
Trade and other payables
Provision for employee benefits
Net identifiable assets and liabilities
Net identifiable assets and liabilities
Consideration paid by Count Limited
Gain on bargain purchase
Purchase consideration – Cash inflow
Inflow of cash to acquire subsidiary, net of cash acquired
Cash consideration
Less: Balances acquired
Net cash acquired
2023
$’000
3,373
4,043
359
34
3,413
(1,009)
(253)
(51)
6,536
6,536
(3,373)
3,163
(3,373)
4,043
670
68
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Identifiable net assets
At 30 June 2023, the fair value of the client relationships amount to $3,413,000.
Gain on bargain purchase
The gain on bargain purchase represents the excess of the fair value of the acquired identifiable assets and liabilities over the
purchase price. This gain on bargain purchase has been allocated to the Group’s Wealth segment and is not expected to be
assessable for tax purposes. The gain on bargain purchase arises from the strategic acquisition of Affinia by the Group who
is best positioned to capitalise on this investment by creating scale from its existing infrastructure.
Contribution to the Group results
Affinia has contributed $239,000 in revenue from contracts with customers and loss after tax of $168,000 to the Group from the
acquisition date to 30 June 2023. It is impractical to determine the full year contribution to revenues and profit after tax if the
acquisition had occurred on 1 July 2022 as the year end of the entity pre-acquisition does not align with the Group’s year end
and the profit and loss would thus not be determinable.
Other acquisitions
The Group has made the following other acquisitions during the period:
On 4 July 2022, the Company’s member firm CountPlus One Pty Ltd acquired CDC Partners Pty Ltd, a Sydney-based accounting
firm for $600,000.
On 14 February 2023, the Company’s member firm Moggs Accounting + Advisory Pty Ltd acquired Timothy Trevor Gubbins,
a Shepparton-based accounting firm for $1,270,000.
On 8 June 2023, the Company’s member firm CountPlus One Pty Ltd acquired RHA Associates, a Sydney-based accounting firm
for $1,022,000.
Purchase consideration
Non-controlling interest
Less: Net assets acquired
Acquired goodwill
Purchase consideration – cash outflow
Outflow of cash to acquire subsidiary, net of cash acquired
Cash consideration
Less: Balances acquired
Net cash acquired
Significant Accounting Policy
2023
$’000
2,867
–
(726)
2,141
(1,987)
–
(1,987)
The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the
Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred,
liabilities incurred and the equity interests issued by the Group, which includes the fair value of any asset or liability arising
from a contingent consideration arrangement. Acquisition costs are expensed as incurred.
The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether
they have been previously recognised in the acquiree’s financial statements prior to the acquisition. Assets acquired and
liabilities assumed are generally measured at their acquisition-date fair values.
Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of a) fair
value of consideration transferred, b) the recognised amount of any non-controlling interest in the acquiree and c) acquisition-
date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. If the
fair values of identifiable net assets exceed the sum calculated above, the excess amount (i.e. gain on a bargain purchase) is
recognised in profit or loss immediately.
69
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
6.2 Investments in associates
Investments in associates are accounted for using the equity method of accounting. Information relating to associates are set
out below:
Name
One Hood Sweeney Pty Ltd
Hunter Financial Planning Pty Ltd
OBM Financial Services Pty Ltd
Rundles CountPlus Pty Ltd
Rundles Financial Planning Pty Ltd
DMG Financial Holdings Pty Ltd
Southern Cross Business Holdings Pty Ltd
WSC Group – Aust Pty Ltd
Principal place of business /
Country of incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Ownership interest
2023
%
32.36%
40.00%
40.00%
40.00%
20.00%
30.00%
49.00%
32.75%
2022
%
32.36%
40.00%
43.00%
40.00%
20.00%
30.00%
49.00%
–
The percentage of ownership interest held is equivalent to the percentage of voting rights for all associates. All associates have
the same year end as the parent entity (30 June).
There are no significant restrictions on the ability of associates to transfer funds in the form of cash dividends or to repay loans
or advances to the consolidated entity.
Summary of associates held during the year
One Hood Sweeney Pty Ltd
One Hood Sweeney is a South Australian professional services firm located across Adelaide, Whyalla and Kadina. It provides
accounting, business advisory, financial planning, finance and technology services to its clients.
Hunter Financial Planning Pty Ltd
Hunter Financial is a financial planning specialist based in Newcastle. Hunter Financial offers a consultative approach to wealth
management particularly in the area of wealth creation budgeting, insurance, estate planning and SMSF. Hunter is a Count
AFSL member firm.
OBM Financial Services Pty Ltd
OBM Financial Services Pty Ltd is a professional services firm based in Ivanhoe, Victoria. It provides accounting and financial
planning services to its clients. OBM is a Count AFSL member firm.
Rundles CountPlus Pty Ltd
Rundles CountPlus is a professional services firm based in Melbourne, Victoria. It provides accounting and business advisory
services to its clients.
Rundles Financial Planning Pty Ltd
Rundles Financial Planning is a professional services firm based in Melbourne, Victoria. It provides financial planning services
to its clients.
DMG Financial Holdings Pty Ltd
DMG Financial Holdings is a professional services firm located in Sale and Yarram, Victoria. It provides accounting and business
advisory services to its clients.
Southern Cross Business Holdings Pty Ltd
Southern Cross Business Holdings is a professional services firm located in Mildura, Victoria. It provides accounting, financial
planning and business advisory services to its clients. Southern Cross ia a Count AFSL member firm.
WSC Group – Aust Pty Ltd
WSC Group is a financial services and advice practice with offices in Sydney South (Head Office), Sydney CBD, Brisbane,
Gold Coast, Melbourne and Newcastle. It provides accounting, financial planning and business advisory services to its clients.
WSC is a Count AFSL member firm. WSC Group – Aust Pty Ltd was acquired on 1 August 2022.
70
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Material associates
2023
Summarised Consolidated Statement
of Financial Position
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets / equity
Summarised Consolidated Statement of Profit
or Loss and Other Comprehensive Income
Revenue
Profit for the year
Total comprehensive income
Group share of profit for the year
2022
Summarised Consolidated Statement
of Financial Position
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets / equity
Summarised Consolidated Statement of Profit
or Loss and Other Comprehensive Income
Revenue
Profit for the year
Total comprehensive income
Group share of profit for the year
One Hood
Sweeney
$’000
Hunter
Financial
Planning
$’000
OBM
Financial
Services
$’000
Rundles
CountPlus
$’000
DMG
Financial
Holdings
$’000
Southern
Cross
Business
Holdings
$’000
WSC
Group –
Aust Pty
Ltd
$’000
7,423
7,856
(4,811)
(726)
1,264
8,309
(1,254)
1,649
2,240
(660)
(647)
(1,403)
1,931
4,360
(1,975)
(1,259)
1,002
6,254
(1,149)
1,542
3,169
(1,096)
(1,464)
(3,083)
856
4,970
(1,951)
(669)
9,742
7,672
1,826
3,057
4,643
532
3,206
24,103
4,575
4,707
5,637
6,471
6,943
3,173
3,173
1,027
806
806
322
577
577
231
629
629
252
1,196
1,196
359
1,121
1,121
549
7,207
1,550
1,550
508
One Hood
Sweeney
$’000
Hunter
Financial
Planning
$’000
OBM
Financial
Services
$’000
Rundles
CountPlus
$’000
DMG
Financial
Holdings
$’000
Southern
Cross
Business
Holdings
$’000
WSC
Group –
Aust Pty
Ltd
$’000
6,795
8,603
(5,006)
(1,841)
990
8,040
(687)
(752)
1,915
2,396
(672)
(1,821)
2,009
4,774
(2,930)
1,361
5,885
(814)
–
(1,438)
1,705
2,503
(1,338)
(2,638)
8,551
7,591
1,818
3,853
4,994
232
23,765
3,600
3,600
1,165
3,764
5,089
5,509
888
888
355
901
901
373
1,149
1,149
359
6,057
2,439
2,439
732
6,700
956
956
468
–
–
–
–
–
–
–
–
–
71
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Carrying amount of investments in associates
Reconciliation of carrying amount of investments in associates to summarised financial information for associates accounted
for using the equity method:
One Hood Sweeney Pty Ltd
Opening balance
Share in profit
Dividends
Carrying amount based on share in net assets of associate
Hunter Financial Planning Pty Ltd
Opening balance
Share in profit
Dividends
Carrying amount based on share in net assets of associate
OBM Financial Services Pty Ltd
Opening balance
Completion adjustment of acquisition of associate
Share in profit
Dividends
Carrying amount based on share in net assets of associate
Rundles CountPlus Pty Ltd
Opening balance
Share of profit
Dividends
Carrying amount based on share in net assets of associate
Rundles Financial Planning Pty Ltd
Opening balance
Share of profit
Dividends
Carrying amount based on share in net assets of associate
DMG Financial Holdings Pty Ltd
Opening balance
Share of profit
Dividends
Carrying amount based on share in net assets of associate
Southern Cross Business Holdings Pty Ltd
Opening balance
Share in profit
Dividends
Carrying amount based on share in net assets of associate
WSC Group – Aust Pty Ltd
Completion adjustment of acquisition of associate
Share in profit
Dividends
Carrying amount based on share in net assets of associate
Carrying value of investments in associates as at 30 June – Opening
Acquisition of associates and completion adjustment
Share in profit
Dividends
Carrying value of investments in associates as at 30 June – Closing
Contingent liabilities and capital commitments
2023
$’000
8,248
1,027
(737)
8,538
2,780
322
(290)
2,812
1,983
(54)
231
(216)
1,944
2,327
252
(317)
2,262
349
56
(27)
380
3,576
359
(270)
3,665
2,951
549
(401)
3,099
3,050
508
(307)
3,251
Consolidated
2023
$’000
22,214
2,998
3,304
(2,565)
25,951
2022
$’000
7,725
1,165
(642)
8,248
2,714
355
(289)
2,780
1,755
79
373
(224)
1,983
2,240
359
(272)
2,327
337
64
(52)
349
3,465
732
(621)
3,576
2,740
468
(257)
2,951
–
–
–
–
2022
$’000
18,236
2,819
3,516
(2,357)
22,214
The associates had no contingent liabilities or capital commitments as at 30 June 2023 or 30 June 2022.
72
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
6.3 Non-controlling interest
Reconciliation of non-controlling interest in controlled entities
MBA Group Holdings Pty Ltd
Opening non-controlling interest at 1 July
Additions
Disposals
The profit allocated to non-controlling interest for the period
Dividends paid
Closing non-controlling interest at 30 June
Kidmans Partners Holdings Pty Ltd
Opening non-controlling interest at 1 July
The profit allocated to non-controlling interest for the period
Dividends paid
Closing non-controlling interest at 30 June
Advice Co CA Pty Ltd
Opening non-controlling interest at 1 July
The profit allocated to non-controlling interest for the period
Dividends paid
Closing non-controlling interest at 30 June
Moggs Accounting + Advisory Pty Ltd
Opening non-controlling interest at 1 July
Additions
The profit allocated to non-controlling interest for the period
Dividends paid
Closing non-controlling interest at 30 June
Count Financial Limited
Opening non-controlling interest at 1 July
The profit allocated to non-controlling interest for the period
Dividends paid
Closing non-controlling interest at 30 June
Accurium Holdings Pty Ltd
Opening non-controlling interest at 1 July
Additions
The profit allocated to non-controlling interest for the period
Dividends paid
Closing non-controlling interest at 30 June
Other
Opening non-controlling interest at 1 July
Additions
Disposals
The profit allocated to non-controlling interest for the period
Dividends paid
Closing non-controlling interest at 30 June
Opening balance
Acquisitions
Purchase of shares from non-controlling interest holder
Disposal of shares to non-controlling interest holder
Share of net profit for the period
Dividends paid by subsidiaries to non-controlling interests
Closing Balance
73
2023
$’000
1,630
871
(479)
390
(308)
2,104
1,340
205
(154)
1,391
1,728
256
(242)
1,742
1,468
119
330
(332)
1,585
2,507
289
(263)
2,533
676
–
175
(214)
637
3,762
777
(29)
744
(486)
4,768
2023
$’000
13,111
–
(508)
1,767
2,389
(1,999)
14,760
2022
$’000
2,492
–
(1,062)
575
(375)
1,630
1,292
112
(64)
1,340
1,712
236
(220)
1,728
1,283
179
341
(335)
1,468
2,423
233
(149)
2,507
–
697
138
(159)
676
1,451
2,696
(274)
608
(719)
3,762
2022
$’000
10,653
1,411
(1,335)
2,161
2,243
(2,022)
13,111
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
The following information is provided for non-controlling interests that are material to the consolidated entity. Figures are as per
the subsidiaries’ financial statements:
MBA Group Holdings Pty Ltd
Assets
Liabilities
Revenue
Net Profit
Count Financial Limited
Assets
Liabilities
Revenue
Net Profit
Kidmans Partners Holdings Pty Ltd
Assets
Liabilities
Revenue
Net Profit
Advice Co CA Pty Ltd
Assets
Liabilities
Revenue
Net Profit
Moggs Accounting + Advisory Pty Ltd
Assets
Liabilities
Revenue
Net Profit
Accurium Holdings Pty Ltd
Assets
Liabilities
Revenue
Net Profit
2023
$’000
14,041
(5,300)
11,576
1,283
321,926
(306,077)
17,834
3,287
10,469
(3,785)
7,916
829
6,506
(1,688)
5,487
1,269
8,814
(4,050)
5,893
916
2,018
(716)
5,735
2,585
2022
$’000
14,597
(5,456)
11,181
1,236
345,136
(329,856)
15,409
1,917
11,202
(4,436)
7,423
460
6,308
(1,555)
4,844
913
7,117
(2,541)
5,331
735
2,251
(1,728)
3,950
1,316
74
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
6.4 Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policy described in:
Ownership interest
Principal place of business /
Country of Incorporation
Name
1 . MBA Group Holdings Pty Ltd* (b)
• The MBA Partnership Pty Ltd
• Digital O2 Pty Ltd
• The MBA Partnership (NSW) Pty Ltd
• The MBA Partnership BNE Pty Ltd
• Specialised Business Solutions Pty Ltd
• Collective Resourcing Pty Ltd (a)
• Collective Outsourcing Incorporated
2. Bentleys (WA) Pty Ltd*
• Australian Superannuation & Compliance Pty Ltd
3. Addvantage Financial Freedom Pty Ltd (e)
• Addvantage Accountants Pty Ltd (e)
4. Beames & Associates Accounting and Financial Services Pty Ltd
• Cooma Accounting and Financial Services Pty Ltd (f)
5. Moggs Accounting + Advisory Pty Ltd*
6. Crosby Dalwood Pty Ltd*
7. 4Front Holdings Pty Ltd*
• 4Front Financial Planning Pty Ltd
• 4 Front Pty Ltd
• 4 Front Accountant Pty Ltd
• Profile Management Services Pty Ltd
• 4 Front Mortgage Broking Pty Ltd
8. CountPlus One Pty Ltd*
9. Evolution Advisers Pty Ltd* (b)
10. Advice Co CA Pty Ltd*
11. Kidmans Partners Holdings Pty Ltd*
• Kidmans Partners Pty Ltd
• Kidmans Partners Mortage Pty Ltd
• Kidmans Partners Services Pty Ltd
• Kidmans Partners Wealth Pty Ltd
12. Unite Advisory Pty Ltd* (b)
13. Twomeys Group Pty Ltd* (b)
• Twomeys Pty Ltd
• Twomeys Accounting & Advisory Pty Ltd
• Addvantage Financial Freedom Pty Ltd (e)
• Addvantage Accountants Pty Ltd (e)
14. Count Financial Limited*
15. CountPlus FS Holdings Pty Ltd (TFS Group)*
• Total Financial Solutions Australia Pty Ltd
• TFS Operations Pty Limited
16. Wealth Axis Holdings Pty Ltd* (f)
• Wealth Axis Pty Ltd (f)
17. Accurium Holdings Pty Ltd*
• Accurium Pty Ltd
18. Affinia Financial Advisers Limited* (c)
19. ADVICE389 Pty Ltd (d)
* These subsidiaries are separate cash generating units.
75
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Philippines
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
2023
%
73.08%
100.00%
100.00%
100.00%
100.00%
61.28%
100.00%
100.00%
100.00%
100.00%
–
–
100.00%
–
60.00%
90.00%
51.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
85.00%
60.00%
64.15%
100.00%
100.00%
100.00%
100.00%
69.00%
54.91%
100.00%
100.00%
100.00%
100.00%
85.00%
100.00%
100.00%
100.00%
–
–
85.00%
100.00%
100.00%
–
2022
%
84.06%
100.00%
100.00%
100.00%
100.00%
61.28%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
60.00%
90.00%
51.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
60.00%
64.15%
100.00%
100.00%
100.00%
100.00%
75.00%
60.00%
100.00%
100.00%
–
–
85.00%
100.00%
100.00%
100.00%
51.00%
100.00%
85.00%
100.00%
–
100.00%
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
These entities are consolidated into the respective CGUs identified above. The class of shares acquired for all the subsidiaries
are ordinary shares.
a) These entities have changed their legal name. There has been no change to their ABN.
b) Count’s ownership interest in these entities have been reduced during the year due to equity partnership transactions.
c) Affinia was acquired on 29 May 2023, refer to note 6.1.
d) These entities were deregistered during the year.
e) These entities were acquired by Twomeys Group Pty Ltd on 1 July 2022.
f) These entities were disposed of during the year.
Significant restrictions relating to subsidiaries
There are no statutory, contractual or regulatory restrictions on any of the subsidiary’s ability to access or transfer or use its
assets and settle the liabilities of the consolidated entity.
There are no guarantees given or other requirements that may restrict dividends and other capital distributions being paid,
or loans and advances being made or repaid to (or from) other entities within the consolidated entity.
Consolidated structured entities
The Group does not have any consolidated structured entities other than the ones which are consolidated in these financial
statements and listed as subsidiaries above.
Disposal of subsidiaries that resulted in loss of control
On 1 July 2022, the Company disposed of its 100% investment in Cooma Accounting and Financial Services Pty Ltd (‘Cooma’).
The consideration for the sale was $1,505,000.
On 28 February 2023, the Company disposed of its 51% investment in Wealth Axis Holdings Pty Ltd. The proceeds for the
sale was $1.
Disposal of subsidiaries – carrying amount of net assets
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Consideration received
Less: Non-controlling interest
(Loss) / gain on disposal
Wealth Axis
$’000
Cooma
$’000
412
81
493
332
1
333
160
(1)
(29)
(130)
961
920
1,881
707
103
810
1,071
(1,505)
–
434
Total
$’000
1,373
1,001
2,374
1,039
104
1,143
1,231
(1,506)
(29)
304
76
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
6.5 Parent entity information
The individual financial statements for the parent entity show the following aggregate amounts:
Statement of Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Contributed equity
Share based payment reserve
Accumulated losses
Statement of Profit or Loss and Other Comprehensive Income
Profit for the year
2023
$’000
568
68,384
68,952
(2,066)
(11,854)
(13,920)
55,032
124,845
219
(70,032)
55,032
2023
$’000
1,593
2022
$’000
2,789
66,085
68,874
(2,405)
(6,112)
(8,517)
60,357
126,552
709
(66,357)
60,357
2022
$’000
4,450
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2023 and 30 June 2022.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2023 and 30 June 2022.
Capital commitments – Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2023 and 30 June 2022.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group , except for the following:
• Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity;
• Investments in associates are accounted for at cost, less any impairment, in the parent entity; and
• Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an indicator
of an impairment of the investment.
77
COUNT ANNUAL REPORT 2023
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Parent entity financial information
The financial information for the parent entity, Count Limited, disclosed above have been prepared on the same basis as the
consolidated financial statements, except as set out below.
Investments in subsidiaries and associates
Investments in subsidiaries, associates and joint venture entities are accounted for at the lower of cost and recoverable value
in the financial statements of Count Limited. Dividends received from associates are recognised in the parent entity’s profit or
loss, rather than being deducted from the carrying amount of these investments.
Tax consolidation legislation
Count Limited (‘the Corporate Entity’) and its 100% owned Australian subsidiaries formed an income tax consolidation group
with effect from 5 November 2010. Subsidiaries joined the tax consolidation group from the date they became wholly owned.
The Corporate Entity and the controlled entities in the tax consolidated group account for their own current and deferred
tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a standalone
taxpayer.
Members of the Count tax consolidation group entered into a tax sharing and funding agreement. Under the terms of this
agreement, each member in the tax consolidation group agreed to make a tax equivalent payment to the Corporate Entity
based on their current tax liability or current tax asset. Deferred taxes are recorded by members of the tax consolidation group
in accordance with the principles of AASB 112 Income Taxes.
Financial guarantees
The Group currently has banking facilities with Westpac Bank. These comprise a $5,000,000 revolving line of credit facility
and a $20,000,000 Bank Bill Business Loan. $11,710,000 was drawn during the year and a bank guarantee of $546,000 has been
provided for property leases.
Share based payments
The grant by the Group of options over its equity instruments to key management personnel in the Group is treated as a
capital contribution to the relevant subsidiary. 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 subsidiaries, with a corresponding
credit to equity.
6.6 Related party transactions
Parent entity
Count Limited is the parent entity.
Subsidiaries
Transactions between the Company and its subsidiaries during the year consisted of:
• the loans advanced by the parent to subsidiaries;
• the loan repayments by the subsidiaries to the parent;
• the payment of dividends to the parent by subsidiaries; and
• recharges from the parent to the subsidiaries.
At the year end, all loan balances, payment of dividends and recharges between the parent and these subsidiaries were
eliminated on consolidation.
Associates
Interests in associates are set out in note 6.2.
Key management personnel
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
2023
$
2,056,421
287,307
(10,325)
(44,642)
2,288,761
2022
$
2,388,341
140,605
14,764
69,994
2,613,704
78
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Transactions with related parties
The following transactions occurred with related parties:
Sale of goods and services
Net fees and commissions received from Colonial First State Group
Net fees received from directors
Premises expenses
Catalyst Finance Pty Ltd
The Southport Unit Trust
Rosebead Pty Ltd
Mark & Bronwyn Kenmir Superannuation Fund
Bronwyn Kenmir
Software expense
Elmo Software Limited
Payments from related parties
2023
$’000
2022
$’000
36
12
209
295
58
–
–
12
94
12
211
292
55
29
44
34
As at 31 July 2023, the Commonwealth Bank of Australia held 36.71% of Count Limited’s quoted ordinary shares. During the year,
Count Financial Limited (a majority owned subsidiary) received payments totalling $390,456,000 from the Commonwealth
Bank of Australia in relation to the remediation provision (refer to note 4.1 and 4.2).
Following the announcement by the Commonwealth Bank of Australia in October 2021 to close the remaining part of its
Commonwealth Financial Planning business, the Commonwealth Bank of Australia agreed, following a competitive tender
process, to reimburse Count Financial Limited for a period of two years (subject to agreed caps) for certain costs and
expenses actually incurred in onboarding those Commonwealth Financial Planning financial advisers and customers that
chose to join, or become customers of, Count Financial Limited. Payments have been made in relation to costs incurred for
client engagement, reporting, data migration and transition, and, in relation to those advisers that successfully applied for
roles with Count Financial Limited, adviser onboarding, training and support and adviser operating costs.
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans related parties
The following balances are outstanding at the reporting date in relation to loans with related parties:
Current receivables
Loan to Count Member Firm Pty Ltd
7 Capital Management
7.1 Contributed equity
Ordinary shares – fully paid
Treasury shares – issued capital held by loan
funded share plan
Ordinary shares
2023
$’000
2022
$’000
2
57
2023
Shares
111,528,888
(2,543,213)
2022
Shares
114,222,559
(2,612,310)
2023
$’000
124,859
(3,323)
2022
$’000
126,566
(3,413)
108,985,675
111,610,249
121,536
123,153
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Group in proportion to
the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Group does not
have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share
shall have one vote.
79
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Share buy-back
During the financial year, Count Limited commenced a share buy-back scheme to enhance returns to shareholders with
specific capital management initiatives. A total of 2,693,671 shares have been repurchased for a total of $1,707,000 during the
financial year.
Refer to note 8.5 for details of share buy-backs post reporting period.
Capital risk management
When managing capital, the Board’s objective is to ensure the Group continues as a going concern as well as to maintain
optimal returns to shareholders and benefits for other stakeholders. Management monitors the capital structure to ensure
that the Group is positioned to take advantage of favourable costs of capital or higher expected returns on assets. The Group
currently has a facility of $20,000,000, with the Westpac Bank, which has been drawn down by $11,710,000 as at 30 June 2023.
The Group has an overdraft facility of $5,450,000 which was drawn down by lease guarantees of $546,000 at 30 June 2023.
In addition, there are six bank loans in member firms totalling $7,126,000 which have been drawn down by $5,627,000. Future
acquisitions and investments will be funded from existing and future cash flows as well as funds received under the Group’s
equity partnership model.
In the long-term, the Group expects to maintain a dividend payout ratio of between 60% and 90% of maintainable net profit
after tax and minority interests, subject to market conditions and Group performance. The Group is not subject to any externally
imposed capital requirements.
Significant accounting policy
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the
proceeds.
Incremental costs directly attributable to the issue of new shares for the acquisition of a business are not included in the cost
of the acquisition as part of the purchase consideration.
7.2 Reserves
Acquisition reserve
Share-based payments reserve
Foreign currency reserve
Movements in reserves
2023
$’000
2022
$’000
(48,548)
(48,548)
128
9
668
(16)
(48,411)
(47,896)
Movements in each class of reserve during the current and previous financial year are set out below:
Share-based
payment reserve
$’000
Acquisition
reserve
$’000
Foreign currency
reserve
$’000
Balance at 1 July 2022
Foreign currency translation
Transfer of Treasury shares
Reallocation of employee share reserve
Share-based payments for long-term incentive plan
Balance at 30 June 2023
668
–
(50)
(503)
13
128
(48,548)
–
–
–
–
(48,548)
(16)
25
–
–
–
9
Total
$’000
(47,896)
25
(50)
(503)
13
(48,411)
80
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Share-based payment reserve
In addition, the reserve is used to recognise the value of equity benefits provided to the Chief Executive Officer and other Key
Management Personnel as part of their remuneration for the long-term incentive plan. For further details see the remuneration
report on pages 20 to 32.
Acquisition reserve
The acquisition reserve arises on the acquisition of the non-controlling interests of subsidiaries. On 1 July 2010, the Group’s
interests in 15 associates were consolidated with the non-controlling interest being measured as the present ownership’s
proportionate share of identifiable net assets. The acquisition of these non-controlling interests as part of the public listing was
not a business combination but was an equity transaction between owners. Accordingly, in 2011, the difference between the
consideration paid and fair value of the identifiable net assets of the non-controlling interests has been accounted for in the
acquisition reserve.
7.3 Share plans
Long-term incentive plan
The long-term incentive plans are set out on pages 26 to 29 of this report.
7.4 Interest bearing loans and borrowings
Current liabilities
Bank loans – funding facility and other loans
Non-current liabilities
Acquisition facility
Bank loans – funding facility and other loans
Refer to note 7.5 for further information on financial instruments risk.
Total liabilities
Bank overdraft
Bilateral funding facility
Used at the reporting date
Bank overdraft
Bilateral funding facility
Unused at the reporting date
Bank overdraft
Bilateral funding facility
81
2023
$’000
1,683
11,710
3,944
15,654
2023
$’000
5,450
27,397
32,847
1,141
17,337
18,478
4,309
10,060
14,369
2022
$’000
911
5,901
2,989
8,890
2022
$’000
5,450
25,295
30,745
1,141
9,801
10,942
4,309
15,494
19,803
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
The interest-bearing loans and borrowings balance is $17,337,000 (Current: $1,683,000 Non-current: $15,654,000) (2022: Current:
$911,000 Non-current: $8,890,000) borrowings from Westpac Bank. There are currently ten lines of credit with Westpac Bank.
Count Limited has an overdraft facility with Westpac Bank, the limit is $5,000,000 (2022: $5,000,000). From this facility, bank
guarantees on properties are offset against this balance. 4Front Pty Ltd has an overdraft facility with Westpac Bank, the limit
is $450,000 (2022: $450,000).
Count Limited has a revolving line of credit with Westpac Bank, the limit is currently $20,000,000 (2022: $20,000,000) and is
charged with a variable rate. This five-year facility with Westpac was renewed on January 2022. The rate is determined with
reference to the Bank Bill Swap Bid Rate (BBSY). Reference Rates are published in the Australian Financial Review plus a margin.
A guarantee and charge as security for the facility is provided by Count Limited.
Kidmans Partners Pty Ltd has two bank loans with Westpac Bank, the total limit is $1,354,000 repayable between one and three
years. In addition, there is a line fee on this facility. A guarantee and charge as security for the facility is provided by Kidmans
Partners Pty Ltd.
The MBA Partnership Pty Ltd has a bank loan with Westpac Bank, the limit is $1,698,000 repayable over two years. In addition,
there is a line fee on this facility. A guarantee and charge as security for the facility is provided by The MBA Partnership Pty Ltd.
Unite Advisory Pty Ltd has two bank loans with Westpac Bank, the limit is $1,595,000 repayable between one and two years. In
addition, there is a line fee on this facility. A guarantee and charge as security for the facility is provided by Unite Advisory Pty Ltd.
4Front Pty Ltd has two bank loans with Westpac Bank, the total limit is $555,000 repayable between one and two years. In
addition, there is a line fee on this facility. A guarantee and charge as security for the facility is provided by 4Front Pty Ltd.
Moggs Accounting + Advisory Pty Ltd has a bank loan with Westpac, the limit is $750,000 repayable over three years. In addition,
there is a line fee on this facility. A guarantee and charge as security for the facility is provided by Moggs Accounting + Advisory
Pty Ltd.
CountPlus One Pty Ltd has a bank loan with Westpac, the limit is $1,153,000 repayable over two years. In addition, there is a line
fee on this facility. A guarantee and charge as security for the facility is provided by CountPlus One Pty Ltd.
Defaults and breaches
During the current and prior year, there were no defaults or breaches on any of the loans.
Significant accounting policy
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 the facility will be drawn
down. In this case, the fee is deferred until the draw down occurs. To the extent whereby there is no evidence that it is probable
that some or all 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.
Changes in liabilities arising from financing activities
Short-term borrowings
Long-term borrowings
Total liabilities from financing activities
2022
$’000
911
8,890
9,801
Cash flow
$’000
(250)
8,023
7,773
Non-cash
changes
Reclassification
to short-term
$’000
Other changes
$’000
1,022
(1,259)
(237)
–
–
–
2023
$’000
1,683
15,654
17,337
82
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
7.5 Capital and financial risk management
Financial assets and liabilities
Note 8.4 provides a description of each category of financial assets and financial liabilities and the related accounting policies.
The carrying amounts of financial assets and financial liabilities in each category are as follows:
30 June 2023
Financial assets
Cash and cash equivalents
Trade and other receivables
Contingent cash consideration
Loans and advances
Total financial assets
30 June 2023
Financial liabilities
Trade and other payables
Interest bearing loans and borrowings
Lease liability
Contingent cash consideration
Other liabilities
Total financial liabilities
30 June 2022
Financial assets
Cash and cash equivalents
Trade and other receivables
Contingent cash consideration
Loans and advances
Total financial assets
30 June 2022
Financial liabilities
Trade and other payables
Interest bearing loans and borrowings
Lease liability
Contingent cash consideration
Other liabilities
Total financial liabilities
Note
Amortised cost
$’000
3.1
3.2
3.2
6.6
21,668
30,697
13
2
Total
$’000
21,668
30,697
13
2
52,380
52,380
Other liabilities
(amortised cost)
$’000
Note
3.4
7.4
5.3
3.6
3.6
(1,873)
(17,337)
(11,514)
(1,586)
(800)
(33,110)
Note
Amortised cost
$’000
3.1
3.2
3.2
6.6
21,540
23,195
1,787
57
46,579
Other liabilities
(amortised cost)
$’000
Note
3.4
7.4
5.3
3.6
3.6
(1,216)
(9,801)
(13,438)
(1,514)
(118)
Total
$’000
(1,873)
(17,337)
(11,514)
(1,586)
(800)
(33,110)
Total
$’000
21,540
23,195
1,787
57
46,579
Total
$’000
(1,216)
(9,801)
(13,438)
(1,514)
(118)
(26,087)
(26,087)
The carrying amount of the following financial assets and liabilities is considered a reasonable approximation of fair value:
• trade and other receivables;
• cash and cash equivalents;
• loans and advances;
• trade and other payables;
• other liabilities; and
• interest bearing borrowings.
83
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Financial instruments risk
Financial risk management objectives
The Group’s principal financial assets and liabilities, which arise directly from its operations, comprise of cash and cash
equivalents, trade and other receivables, interest bearing loans, borrowing, trade and other payables.
The Group’s activities expose it to a variety of financial risks: market risk (including interest rate risk), credit risk and liquidity 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 Group uses different methods to measure different
types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate and ageing analysis
for credit risk.
Risk management is carried out by senior finance executives (‘Finance’) and the Chief Risk Officer under policies approved
by the Board of Directors (‘the Board’). These policies include identification and analysis of the risk exposure of the Group and
appropriate procedures, controls and risk limits. Finance identifies and evaluates financial risks within the Group’s operating
units. Finance reports to the Board on a monthly basis.
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group’s main interest rate risk arises from long-term borrowings. Borrowings obtained at variable rates expose the Group
to interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk.
At 30 June 2023, the Group had total bank loans outstanding of $17,337,000 (2022: $9,801,000). The Group also had an overdraft
facility of $5,450,000 of which $1,141,000 is reserved for bank guarantees. $546,000 was utilised from this bank guarantee limit.
The effect on profit as a result of changes in interest rate with all other variables remaining constant would be as follows:
Change in profit
+1% (100 basis points)
-1% (100 basis points)
Credit risk
2023
$’000
(173)
173
2022
$’000
(82)
82
The Group is exposed to credit risk from its operating activities (primarily cash and cash equivalents and trade and other
receivables).
The Group trades only with creditworthy third parties, and as such collateral is not requested nor is it the Group’s policy to
securitise its trade and other receivables. There are no significant concentrations of credit risk within the Group and financial
instruments are spread amongst several counterparties to spread the risk of default of counterparties.
The Group’s exposure to credit risk arises from potential default of the counterparty, with a maximum exposure equal to the
carrying amount of these instruments, as indicated in the consolidated statement of financial position. The maximum credit
risk exposure does not consider the value of any collateral or other security held, in the event other entities / parties fail to
perform their obligations under the financial instruments in question. In addition, receivable balances are monitored on an
ongoing basis. The Group observes its provision policy.
84
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash equivalents)
and available borrowing facilities to be able to pay debts as and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously
monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
As at 30 June 2023, the Group’s non-derivative financial liabilities have contractual maturities (including interest payments
where applicable) as summarised below.
30 June 2023
Trade and other payables
Interest bearing loans and borrowings
Deferred and contingent cash consideration
Lease liabilities
Current within
6 months
$’000
6 to 12 months
$’000
Non-current
1 to 5 years
$’000
Later than 5 years
$’000
1,873
993
1,124
1,730
5,720
–
974
445
1,357
2,776
–
17,763
693
4,706
23,162
–
–
–
5,783
5,783
This compares to the maturity of the Group’s non-derivative financial liabilities in the previous reporting period as follows:
30 June 2022
Trade and other payables
Interest bearing loans and borrowings
Deferred and contingent cash consideration
Lease liabilities
Current within
6 months
$’000
6 to 12 months
$’000
Non-current
1 to 5 years
$’000
Later than 5 years
$’000
1,216
414
1,112
1,787
4,529
–
497
225
1,786
2,508
–
10,192
227
7,649
18,068
–
368
–
4,124
4,492
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Fair value measurement
The carrying amounts of cash and cash equivalents, trade and other receivables, trade and other payables, loans, advances
and other receivables and interest-bearing borrowings approximate their fair value.
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure
purposes.
85
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Fair value hierarchy
The following tables detail the Group’s assets and liabilities, measured or disclosed at fair value, using a three level hierarchy,
based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1
Level 2
Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date.
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
or indirectly.
Level 3
Unobservable inputs for the asset or liability.
2023
Assets
Contingent consideration receivable
Financial liabilities
Contingent consideration payable
2022
Assets
Contingent consideration receivable
Financial liabilities
Contingent consideration payable
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
–
–
–
–
13
13
(1,586)
(1,586)
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
–
–
–
–
1,787
1,787
(1,127)
(1,127)
Contingent consideration receivable
Balance at the beginning of the period
Loss on contingent consideration in the profit or loss
Additions to contingent cash consideration for acquisitions of assets, subsidiaries & associates during the year
Cash received for settlement of contingent cash consideration
Closing contingent cash consideration receivable
Contingent consideration payable
Balance at beginning of year
Gain on contingent consideration in the profit or loss
Additions to contingent cash consideration for acquisitions of assets, subsidiaries & associates during the year
Cash paid for settlement of contingent cash consideration
Closing contingent cash consideration payable
2023
$’000
1,787
(824)
213
(1,163)
13
2023
$’000
(1,127)
(59)
(1,410)
1,010
(1,586)
The fair value of the financial assets and liabilities represents the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date. The following methods
and assumptions were used to estimate the fair values.
Fair value of other investments held at fair value through profit and loss is determined based on observable market
transactions. Observable market transactions considered are those transactions which occurred on 30 June 2023, excluding
new issue of shares. The fair value is calculated by multiplying the total number of shares outstanding by the market price.
Fair value of contingent cash consideration is derived from management expectations of the performance of the acquired
businesses and assets.
Fair value of deferred equity consideration is derived from management expectations of the performance of the acquired
businesses and assets.
There were no transfers between levels during the financial year.
The maximum potential payment for contingent consideration is $2,011,000 (2022: $1,514,000).
Management believes no reasonable change in any other key assumptions would have a material impact on the fair value
of the other investments and deferred consideration.
86
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
8 Other information
8.1 Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Grant Thornton Audit Pty Limited, the
auditor of the Group:
Audit Services – Grant Thornton Audit Pty Limited
Audit or review of the financial statements – Count Limited
Audit or review of the financial statements and AFSL – Count Financial Limited
2023
$
2022
$
399,500
60,500
374,000
62,000
Total Audit Services – Grant Thornton Audit Pty Limited
460,000
436,000
Other services – Related entity of Grant Thornton Audit Pty Limited
Other Services
–
–
Total remuneration of Grant Thornton Audit Pty Limited and related entities
460,000
436,000
8.2 Contingencies
Contingent assets
The Group has no contingent assets as at 30 June 2023 (2022: nil).
Contingent liabilities
Class action lawsuit
Class action proceedings have been filed by Piper Alderman in the Federal Count of Australia against Count Limited’s
subsidiary firm, Count Financial Limited. The proceedings seek financial compensation and relates to commissions
paid to Count Financial Limited and its authorised representative financial advisers. The commissions were in respect of
financial products (including insurance) and certain obligations of its financial advisers to provide ongoing advice in the
period 21 August 2014 to 21 August 2020. The proceedings also include allegations that Count Financial Limited engaged
in misleading and deceptive conduct (relating to the receipt of commission) and that its authorised representatives
breached their fiduciary duties.
Count Limited acquired Count Financial Limited from Commonwealth Bank of Australia (CBA) on 1 October 2019. CBA has
provided an indemnity to Count Limited in relation to certain conduct that occurred prior to and after the acquisition of Count
Financial Limited by Count Limited up to an amount of $520M. The Class Action has been notified to CBA and CBA has assumed
conduct of the defence of the proceedings.
A reliable estimate of exposure related to the class action cannot be formed at this stage.
Claim against Corporate Authorised Representative
This matter relates to a claim by a client, brought through her tutor, the Public Trustee, in the Supreme Court of NSW, against
a Corporate Authorised Representative of Count Financial Limited. Neither the Group nor its subsidiaries have been named
in the proceedings. A reliable estimate of exposure related to the action cannot be formed at this stage.
Corporate Actions
This matter has arisen out of a report made to ASIC by an unrelated entity in relation to its own failures and remediation
obligations. The matter has been notified to CBA pursuant to the terms of the above described indemnity. CBA has commenced
an investigation to ascertain the extent of any potential liability. A reliable estimate of exposure related to this matter cannot be
formed at this stage.
Claim against Total Financial Solutions Australia Pty Ltd
Count has briefed its legal advisers in relation to the claim, however details of the claim are being investigated and at this
stage it is unclear as to whether the claim relates to the subsidiary company and management is unable to form a reliable
estimate of exposure, if any, related to this matter, at this stage.
The Group has no other contingent liabilities as at 30 June 2023 (30 June 2022: nil).
87
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
8.3 Commitments
Capital commitments
The Group has total capital commitments of $546,000 (2022: $546,000), to various landlords in form of bank guarantees.
No material losses are anticipated in respect of these guarantees.
8.4 Summary of other Significant accounting policies
Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated. The financial statements are for the Group /
Consolidated entity consisting of Count Limited and its subsidiaries.
Basis of preparation
These consolidated general-purpose financial statements have been prepared in accordance with Australian Accounting
Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards
Board and the Corporations Act 2001. Count Limited is a for-profit entity for the purpose of preparing the financial statements.
Both the functional and presentation currency of Count Limited and its subsidiaries is Australian dollars ($A) and the financial
report is presented in Australian dollars ($A). In accordance with ASIC Corporations (Rounding in Financial / Directors’ Reports)
Instrument 2016 / 191, amounts in the financial report are rounded off to the nearest thousand dollars unless otherwise
indicated.
Compliance with IFRS
These consolidated financial statements of the Group also comply with International Financial Reporting Standards as issued
by the International Accounting Standards Board (IASB).
Critical accounting estimates and judgments
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of
judgment or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed
in note 1.2.
Historical cost convention
The Consolidated financial statements have been prepared on an accrual basis and are based on historical costs modified by
the revaluation of certain financial assets and financial liabilities for which the fair value basis of accounting has been applied.
Changes to presentation
Wherever necessary, Count Limited has regrouped and reclassified certain balances in the financial statements in order
to provide more relevant information to our stakeholders. The comparative information has been reclassified accordingly.
These reclassifications do not have any impact on the profit for the current year or prior year.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only. Supplementary
information about the parent entity is disclosed in note 6.5.
Going concern
The consolidated financial statements have been prepared on a going concern basis, which contemplates the continuity
of normal operations and the realisation of assets and discharges of liabilities in the ordinary course of business.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all relevant new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period. None of the new standards or
amendments to standards that are mandatory for the first time materially affected any of the amounts recognised in the
current period or any prior period.
88
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Accounting standards and interpretations issued but not yet effective
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2023 reporting
period 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.
• AASB 2021–2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and Definition of
Accounting Estimates
• AASB 2021–5 Amendments to Australian Accounting Standards – Deferred Tax related to Assets and Liabilities arising from
a Single Transaction
• AASB 2022–7 Editorial Corrections to Australian Accounting Standards and Repeal of Superseded and Redundant Standards
Principles of consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of Count Limited and its subsidiaries as at 30 June
2023 and the results of Count Limited and its subsidiaries for the year then ended. Count Limited and its subsidiaries together
are referred to in these financial statements as (‘the Group’).
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed to,
or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power
to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group.
They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by
the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable
to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the Consolidated Statement of Profit
or Loss and Other Comprehensive Income, Consolidated Statement of Financial Position and Consolidated Statement of
Changes in Equity of the Group.
Investments in subsidiaries are accounted for at cost in the financial statements of Count Limited less any impairment charges.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling
interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group recognises
the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit
or loss.
Associates
Associates are all entities over which the Group has significant influence but not control or joint control, generally
accompanying a shareholding of between 20% and 49% of the voting rights. Significant influence is the power to participate
in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
Investments in associates are accounted for using the equity method of accounting, after initially being recognised at cost.
The Group’s share of its associates’ post acquisition profits or losses is recognised in profit or loss and its share of post-
acquisition other comprehensive income, is recognised in other comprehensive income. The cumulative post acquisition
movements are adjusted against the carrying amount of the investment. Dividends from associates are recognised as
reduction in the carrying amount of the investment.
When the Group’s share of losses in an associate equal or exceeds its interest in the associate, including any other unsecured
long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on
behalf of the associate.
Employee share trust
The Company has formed a trust to administer the Group’s Loan Funded Share Plan. This trust is consolidated as the substance
of the relationship is that the trust is controlled by the Group.
Shares held by the trust are disclosed as Treasury Shares and are deducted from contributed equity.
89
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Foreign currency translation
The financial statements are presented in Australian dollars, which is Count Limited’s functional and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in
profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting
date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates,
which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are
recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Financial Instruments
Recognition, initial measurement and derecognition
Financial assets and liabilities are recognised when the Group becomes a party to the contractual provisions of the financial
instrument, and are measured initially at fair value adjusted by transactions costs, except for those carried at fair value through
profit or loss, which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities are
described below.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the
financial asset and all substantial risks and rewards are transferred. A financial liability is derecognised when it is extinguished,
discharged, cancelled or expires.
Classification and subsequent measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at the transaction
price in accordance with AASB 15, all financial assets are initially measured at fair value adjusted for transaction costs (where
applicable).
For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging
instruments are classified into the following categories upon initial recognition:
• amortised cost; or
• fair value through profit or loss (FVPL).
All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs,
finance income or other financial items, except for impairment of trade receivables which is presented within other expenses.
Classifications are determined by both:
• the entities business model for managing the financial asset; and
• the contractual cash flow characteristics of the financial assets.
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as FVPL):
• they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows;
and
• the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where
the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and most other receivables fall into this
category of financial instruments.
90
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Financial assets at fair value through profit or loss (FVPL)
Financial assets that are held within a different business model other than ‘hold to collect’ or ‘hold to collect and sell’ are
categorised at fair value through profit and loss. Further, irrespective of business model financial assets whose contractual
cash flows are not solely payments of principal and interest are accounted for at FVPL.
Impairment of financial assets
AASB 9’s impairment requirements use more forward looking information to recognise expected credit losses – the ‘expected
credit losses model’. Instruments within the scope of the new requirements included loans and other debt-type financial assets
measured at amortised cost and fair value through other comprehensive income (FVOCI), trade receivables, contract assets
recognised and measured under AASB 15 and loan commitments and some financial guarantee contracts (for the issuer) that
are not measured at fair value through profit or loss.
The Group considers a broader range of information when assessing credit risk and measuring expected credit losses,
including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the
future cash flows of the instrument.
In applying this forward-looking approach, a distinction is made between:
• financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low credit
risk (‘Stage 1’); and
• financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is not
low (‘Stage 2’).
‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date.
‘12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are recognised for
the second category.
Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the expected
life of the financial instrument.
Trade and other receivables and contract assets
Trade and other receivables and contract assets are initially recognised at fair value and subsequently measured at amortised
cost using the effective interest method, less any allowance for expected credit losses. The Group makes use of a simplified
approach in accounting for trade and other receivables as well as contract assets and records the loss allowance at the
amount equal to the expected lifetime credit losses. In using this practical expedient, the Company uses its historical experience,
external indicators and forward-looking information to calculate the expected credit losses using a provision matrix.
The Group assesses impairment of trade receivables on a collective basis as they possess credit risk characteristics based
on the days past due.
Classification and measurement of financial liabilities
The Group’s financial liabilities include borrowings, trade and other payables, contract liabilities and other liabilities. Financial
liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Company
designated a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for financial
liabilities designated at FVPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss.
All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are
included within finance costs or finance income.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Group’s
normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the
reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability
for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group’s normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities
are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
91
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in
the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of the
lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any
remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms
of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, the Group’s incremental borrowing rate. Lease payments comprise of fixed payments
less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid
under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to
occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are
expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if
there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee;
lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment
is made to the corresponding right-of-use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully
written down.
Lease Make good provision
A provision has been made for the present value of anticipated costs for future restoration of leased premises. The provision
includes future cost estimates associated with closure of the premises. The calculation of this provision requires assumptions
such as application of closure dates and cost estimates. The provision recognised for each site is periodically reviewed and
updated based on the facts and circumstances available at the time. Changes to the estimated future costs for sites are
recognised in the statement of financial position by adjusting the asset and the provision. Reductions in the provision that
exceed the carrying amount of the asset will be recognised in profit or loss.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave, long service leave and accumulating sick
leave expected to be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid
when the liabilities are settled. Non-accumulating sick leave is expensed to profit or loss when incurred.
Goods and Services Tax and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable
from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable
from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
Rounding of amounts
The Group is of a kind referred to in Corporations Instrument 2016 / 191, issued by the Australian Securities and Investments
Commission, relating to ‘rounding-off’. Amounts in this report have been rounded off in accordance with that Corporations
Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
Comparatives
The significant accounting policies adopted in the preparation of the financial statements have been consistently applied to
the current year and the comparative period, unless otherwise stated. Where necessary, comparative information has been
reclassified to be consistent with current period disclosures.
92
COUNT ANNUAL REPORT 2023 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2023
8.5 Events after the reporting period
On 1 July 2023, Count Limited acquired a 40% shareholding in Bruce Edmunds & Associates Pty Ltd. The purchase consideration
for this acquisition was $2,651,000.
On 11 July 2023, Laurent Toussaint resigned as Chief Financial and Operating Officer, and will depart the business on
29 September 2023.
On 13 July 2023, Count Limited completed a share buy-back scheme to enhance returns to shareholders with specific capital
management initiatives. A total of 2,693,671 shares have been repurchased for a total of $1,707,000.
On 15 August 2023, Count Limited member firm, Adelaide based Crosby Dalwood Pty Ltd and Warnecke & Co completed
a merger to operate under a new entity under the Count brand. The Group’s ownership over the newly formed merged entity
is 45%.
On 28 August 2023, the Directors resolved to declare a final dividend of 2.25 cents (fully franked) to be paid on 11 October 2023
(Record date 22 September 2023).
No other matters or circumstances have arisen since the end of the financial year which significantly affected or could
significantly affect:
a)
b)
c)
the Group’s operations in future financial periods, or consolidated entity,
the results of those operations in future financial periods, or
the Group’s state of affairs of the consolidated entity in future financial periods.
93
COUNT ANNUAL REPORT 2023 Corporate Directory
Directors
Ray Kellerman
Chairman
Alison Ledger
Independent Non-Executive Director
Andrew McGill
Independent Non-Executive Director
Resigned 1 March 2023
Carolyn Colley
Independent Non-Executive Director
Kate Hill
Independent Non-Executive Director
Tim Martin
Independent Non-Executive Director
Appointed 8 June 2023
Hugh Humphrey
Managing Director and Chief Executive Officer
Chief Financial and
Operating Officer
Laurent Toussaint
Resignation effective
29 September 2023
Company Secretary
Laurent Toussaint
Resignation effective
29 September 2023
Narelle Wooden
Resigned 17 October 2022
Doug Richardson
Principal Registered
Office in Australia
Level 8
1 Chifley Square
Sydney NSW 2000
Telephone +61 2 8218 8778
Share Registry
Banker
Westpac Banking Corporation
Stock Exchange Listing
Count Limited shares are listed on the
Australian Securities Exchange (ASX
code: CUP)
Website Address
www.count.au
ABN
11 126 990 832
Computershare Investor
Services Pty Ltd
Level 3, 60 Carrington Street
Sydney NSW 2000
Telephone +61 2 8234 5000
Independent Auditor
Grant Thornton Audit Pty Ltd
Level 17, 383 Kent Street
Sydney NSW 2000
Telephone +61 2 8297 2400
Solicitors
Baker McKenzie
Level 46, Tower One
International Towers Sydney
100 Barangaroo Avenue
Barangaroo NSW 2000
Telephone +61 2 9225 0200
94
COUNT ANNUAL REPORT 2023
Directors’ Declaration
1.
In the opinion of the Directors of Count Limited:
a. The consolidated financial statements and notes of Count Limited are in accordance with the Corporations Act 2001,
including
i.
Giving a true and fair view of its financial position as at 30 June 2023 and of its performance for the financial year
ended on that date; and
ii. Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations 2001.
b. There are reasonable grounds to believe that Count Limited will be able to pay its debts as and when they become
due and payable.
2.
3.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief
Executive Officer and Chief Financial Officer for the financial year ended 30 June 2023.
Note 8.4 confirms that the consolidated financial statements also comply with International Financial Reporting
Standards.
Signed in accordance with a resolution of the Board of Directors.
Ray Kellerman
Chairman
30 August 2023
Sydney
95
COUNT ANNUAL REPORT 2023
Independent Auditor’s Report
To the members of Count Limited
96
Grant Thornton Audit Pty LtdLevel 17383 Kent StreetSydney NSW 2000Locked Bag Q800Queen Victoria Building NSW 1230T +61 2 8297 2400www.grantthornton.com.auACN-130 913 594 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389. ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards Legislation. Independent Auditor’s ReportTo the Members of Count LimitedReport on the audit of the financial reportOpinionWe have audited the financial report of CountLimited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2023, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies, and the Directors’ declaration. In our opinion, the accompanying financialreport of the Group is in accordance with the Corporations Act 2001, including:agiving a true and fair view of the Group’s financial position as at 30 June 2023 and of its performance for the year ended on that date; and bcomplying with Australian Accounting Standards and the Corporations Regulations 2001.Basis for opinionWe conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Reportsection of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including IndependenceStandards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.COUNT ANNUAL REPORT 2023 Independent Auditor’s Report
To the members of Count Limited
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
We have determined the matters described below to be the key audit matters to be communicated in our report.
Key audit matter
How our audit addressed the key audit matter
Business combinations (Note 6.1)
During the year, the Group acquired 100% of Affinia
Financial Advisors Limited (“Affinia”) for $3,373,000,
which resulted in a gain on bargain purchase of
$3,163,000.
In addition, the Group also made the following
significant acquisitions which resulted in $2,141,000 of
goodwill being recognised:
• On 4 July 2022, the Company's member firm
CountPlus One Pty Ltd acquired CDC Partners Pty
Ltd for $600,000;
• On 14 February 2023, the Company's member firm
Moggs Accounting + Advisory Pty Ltd acquired
Timothy Trevor Gubbins for $1,270,000; and
• On 8 June 2023, the Company's member firm
CountPlus One Pty Ltd acquired RHA Associates
for $1,022,000.
These transactions have been accounted for in
accordance with AASB 3: Business Combinations
which is complex and include a high degree of
estimation uncertainty and judgment when determining
fair value of acquired assets and liabilities.
This is a key audit matter due to the complexity and
judgements involved within the assessment of AASB 3:
Business Combinations and the estimation involved in
the valuation of intangible assets.
Our procedures included, amongst others:
•
•
•
•
•
•
•
•
•
documenting our understanding of management’s
processes and controls in relation to business
acquisitions;
obtaining the purchase agreements and
managements accounting memorandum to confirm
the key terms of the agreements;
obtaining the acquisition balance sheet of the
acquired entities and agreeing material balances to
supporting information;
assessing the capability, competence, and
objectivity of management’s independent expert;
consulting with our valuation specialists to evaluate
the Independent Expert’s Valuation Report,
including:
-
-
-
assessing whether the appropriate intangible
assets had been identified;
assessing the appropriateness of the valuation
methodologies;
Challenging the assumptions used were
reasonable and supportable;
testing the mathematical accuracy of the underlying
calculations;
evaluating the forecasts provided by management
upon which the valuations were based by assessing
forecast revenues and operating costs based on our
knowledge of the market and sector trends;
assessing the commercial logic for the recognition of
a gain on bargain purchase; and
assessing the adequacy of the Group’s disclosures
in respect of the business acquisitions against the
requirements of AASB 3: Business Combinations.
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COUNT ANNUAL REPORT 2023 Independent Auditor’s Report
To the members of Count Limited
Key audit matter
How our audit addressed the key audit matter
Recoverable amount of intangible assets (Note 5.1)
As at 30 June 2023, the Group’s intangible assets of
$54,577,000 consist of goodwill, acquired client
relationships/advisor networks, brands, IT software and
other intangible assets. During the year, impairment
indicators were identified in relation to the Wealth Axis
Holdings Pty Ltd CGU and the total goodwill for this
CGU of $1,018,000 was no longer recoverable and
was fully impaired.
AASB 136: Impairment of Assets requires that, for the
purposes of impairment testing, goodwill acquired in a
business combination be allocated to each of the
Group’s cash-generating units (CGU). Each CGU to
which goodwill has been allocated must be tested for
impairment annually.
Management has assessed that the group has 14
CGUs and has allocated the goodwill and other
intangible assets to these CGUs.
Management has tested the CGUs for impairment by
comparing their carrying amounts with their
recoverable amounts. The recoverable amounts were
determined using value-in-use models.
This is a key audit matter due to the significant
judgements required to determine the appropriate
CGUs and the inherent estimation uncertainty in
calculating the recoverable amount.
Our procedures included, amongst others:
•
•
•
enquiring with management to obtain and document
an understanding of their processes and controls
related to the assessment of impairment, including
identification of CGUs and the calculation of the
recoverable amount for each CGU;
evaluating the value-in-use models against the
requirements of AASB 136;
obtaining management’s value-in-use calculations
and:
− testing the mathematical accuracy of the model;
− evaluating management’s ability to forecast
future results;
− testing the reasonableness of forecasted cash
flows to be derived by the CGU’s assets;
− assessing discount rates applied to forecast
future cash flows;
− performing sensitivity analysis on the significant
inputs in preparing the calculation;
• Consulting with our valuation experts on the
appropriateness of the value in use model and the
discount rate calculated by management’s expert;
and
•
assessing the adequacy of the Group’s disclosures
in respect of the requirements of AASB 136.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included
in the Group’s annual report for the year ended 30 June 2023, but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the Directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
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COUNT ANNUAL REPORT 2023 Independent Auditor’s Report
To the members of Count Limited
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf.This
description forms part of our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 20 to 32 of the Directors’ report for the year
ended 30 June 2023.
In our opinion, the Remuneration Report of Count Limited, for the year ended 30 June 2023 complies with
section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
Grant Thornton Audit Pty Ltd
Chartered Accountants
S M Thomas
Partner – Audit & Assurance
Sydney, 30 August 2023
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COUNT ANNUAL REPORT 2023 ASX Additional Information
The shareholder information set out below was applicable as at 31 July 2023.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,000 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Equity security holders
Twenty largest quoted equity security holders
Listed Ordinary Shares – Fully Paid
Number of Holders
Number of Shares
412
632
237
468
91
1,840
358
235,634
1,671,077
1,862,799
15,157,017
92,602,361
111,528,888
181,856
The names of the twenty largest security holders of quoted equity securities are listed below:
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
COLONIAL HOLDING COMPANY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
MR BARRY MARTIN LAMBERT
NATIONAL NOMINEES LIMITED
PACIFIC CUSTODIANS PTY LIMITED
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