Cash Converters International Ltd
Annual Report 2024

Plain-text annual report

ANNUAL REPORT 2024 30 June 2024 Cash Converters International Limited 1 Cash Converters International Limited ABN 39 069 141 546 Annual Report – 30 June 2024 Table of Contents Appendix 4E – Results for announcement to the market ...................................................................................... 2 Corporate directory ................................................................................................................................................ 4 Letters to Shareholders .......................................................................................................................................... 5 Operating and financial review............................................................................................................................... 7 Directors’ report ................................................................................................................................................... 19 Remuneration Report (Audited) ........................................................................................................................... 28 Auditor’s independence declaration .................................................................................................................... 49 Corporate governance statement ........................................................................................................................ 50 Financial statements ............................................................................................................................................. 51 Independent auditor’s report to the members .................................................................................................. 126 Shareholder information .................................................................................................................................... 131 Appendix 4E 30 June 2024 Cash Converters International Limited 2 Cash Converters International Limited ABN 39 069 141 546 Appendix 4E Preliminary Financial Report for the year ended 30 June 2024 (previous corresponding period 30 June 2023) Appendix 4E – Results for announcement to the market 30-Jun 30-Jun Change 2024 2023 $'000 $'000 $'000 % Revenue from ordinary activities 382,563 302,697 79,866 26% Profit / (Loss) from ordinary activities after tax attributable to members 17,397 (97,155) 114,552 nm Significant items 1 18 4,670 (4,652) (100%) Significant items 2 3,295 110,481 (107,186) (97%) Significant items 3 (805) (644) (161) 25% Significant items 4 965 2,752 (1,787) (65%) Operating profit from ordinary activities after tax 20,870 20,104 766 4% Net profit / (loss) for the period attributable to members 17,397 (97,155) 114,552 nm Basic earnings / (losses) per fully paid ordinary share 2.78 (15.54) cents per share Net tangible asset backing per ordinary share 5 28.40 29.11 cents per share 1 The operating profit for FY2024 excludes reversal of Store Operations segment non-cash impairment expense of $0.636 million after tax effect and Cash Converters New Zealand impairment expense of $0.654 million after tax effect. The operating profit for FY2023 excludes non-cash impairment expense of $4.670 million after tax effect on the carrying value excluding goodwill of individual corporate store assets due to Australian legislative changes which came into effect on 12 June 2023, affecting lending volumes of the individual corporate stores. 2 The operating profit for FY2024 excludes $3.295 million non-cash goodwill impairment in the New Zealand segment. FY2023 operating profit excludes $110.481 million non-cash goodwill impairment in the Personal Finance and Store Operations segments. 3 The operating profit for FY2024 excludes an indirect tax recovery, net of consulting fees, of $0.805 million after tax effect from a historical class action settlement. (FY2023 : $0.644 million after tax effect) 4 The operating profit for FY2024 excludes non-operating costs of $0.965 million after tax effect related to ongoing merger and acquisition (M&A) due diligence for FY2024 and potential future acquisitions. (FY2023 : $2.752 million after tax effect) 5 The calculation of net tangible assets per ordinary share includes right-of-use assets and lease liabilities. nm Not meaningful. This report should be read in conjunction with any announcements made by the Company in accordance with the continuous disclosure requirements of the Corporations Act 2001 and the ASX Listing Rules. Additional Appendix 4E disclosure requirements can be found in the directors’ report and the 30 June 2024 financial statements and accompanying notes. Appendix 4E 30 June 2024 Cash Converters International Limited 3 Dividends per ordinary share / distributions Amount per security (cents) Franked amount per security Record date Paid / payable date 2023 final dividend 1.00 100% 15-Sep-23 13-Oct-23 2024 interim dividend 1.00 100% 26-Mar-24 12-Apr-24 Dividends The directors of the Company have declared a final dividend of 1.00 cent per share with the release of the final year end results and reporting date of 29 August 2024. The dividend will be 100% franked and will be paid on 11 October 2024 to those shareholders on the register at the close of business on 13 September 2024. With the declaration of this dividend, the Company’s Dividend Reinvestment Plan (“DRP”) remains suspended. There is no provision for a final dividend in respect of the year ended 30 June 2024. Provisions for dividends to be paid by the Company are recognised in the Consolidated Statement of Financial Position as a liability and a reduction in retained earnings once the dividend has been declared. Financial statements Released with this Appendix 4E report are the following statements:  Consolidated statement of profit or loss and other comprehensive income together with the notes to the Statement  Consolidated statement of financial position together with the notes to the Statement  Consolidated statement of changes in equity together with the notes to the Statement  Consolidated statement of cash flows together with the notes to the Statement  Consolidated Entity Disclosure Statement This report is based on consolidated financial statements which have been audited. Details of entities over which control has been gained or lost On 6 July 2023, the Group acquired 100% of the issued capital of Cash Converters (UK) Stores Pty Ltd (formerly Capital Cash Limited (“Capital Cash”)). Prior to its acquisition, Cash Converters (UK) Stores Pty Ltd (“CCUKS”) was the largest franchise group in the United Kingdom (“UK”) operating under the Cash Converters Master Franchisor arrangement, with 42 Cash Converters franchise stores in the United Kingdom. CCUKS contributed $3.423 million profit before tax to the Group’s profit from ordinary activities during the period (FY2023: nil). On 1 June 2024, the Group acquired 100% of the issued capital of Themedawn Limited (“Themedawn”), a franchise group within the UK, which includes a network of 5 stores. Themedawn contributed profit before tax of $0.056 million to the Group for the period from 1 June 2024 to 30 June 2024 (FY2023: nil). During the period, the Group acquired the trade and other assets of three Cash Converters franchised stores in Australia: Penrith in New South Wales on 2 November 2023, Ipswich in Queensland on 8 November 2023 and Belmont in Western Australia on 12 December 2023. The stores contributed profit before tax of $0.269 million to the Group for the periods from their respective dates of acquisition to 30 June 2024 (FY2023: nil). Corporate directory 30 June 2024 Cash Converters International Limited 4 Corporate directory Directors Auditors Mr Timothy Jugmans Non-Executive Chairman Deloitte Touche Tohmatsu Mr Sam Budiselik Chief Executive Officer & Managing Director Brookfield Place, Tower 2 Mr Peter Cumins Executive Deputy Chairman 123 St Georges Terrace Mr Lachlan Given Non-Executive Director Perth WA 6000 Mr Robert Hines Independent Non-Executive Director Australia Mr Henry Shiner Independent Non-Executive Director Mr Mark Ashby Independent Non-Executive Director Mr Andrew Spicer Independent Non-Executive Director Company Secretaries Stock Exchange Ms Meagan Hamblin Ms Kelly Moore Australian Securities Exchange Level 40, Central Park Registered and principal office 152-158 St Georges Terrace Perth WA 6000 Level 11, 141 St Georges Terrace Australia Perth WA 6000 Australia ASX code: CCV Tel: +61 (8) 9221 9111 Web: www.cashconverters.com Share registrar Computershare Investor Services Pty Ltd Level 17 221 St Georges Terrace Perth WA 6000 Australia Tel: 1300 850 505 Letters to Shareholders 30 June 2024 Cash Converters International Limited 5 Letters to Shareholders Chairman’s Shareholder Letter Cash Converters delivered a strong year of operating and financial results for its stakeholders in FY2024. We are particularly pleased to report strong top line revenue growth, driven by robust demand for our core loan products, outstanding results in-store primarily through improved customer service and a relentless focus on operational execution, an expanded product suite and the continued scaling of our store base through disciplined acquisitions across the geographies in which we operate. Operational Results Throughout the year, we saw robust customer demand for our core lending products, growing the consolidated loan book significantly. As already announced to the market, we continue to rebalance this book by moving away from short-term Small Amount Credit Contract (“SACC”) loans and vehicle finance and growing the Medium Amount Credit Contract (“MACC”) loans and Line of Credit (“LOC”) products. Costs were well managed, and our loss rates remained in line with prior periods. Strategy Our strategy remains straightforward – to recruit and retain the very best people to serve our large and growing customer base, with responsible and compliant lending products, and to provide those customers with value- for-money retail alternatives. The Cash Converters brand is a household name in the markets in which we operate and we intend to continue scaling our store base while further leveraging this great brand through disciplined franchise buybacks (focusing on Australia and the UK where we have company owned stores). Industry Dynamics The consumer lending industry continues to evolve in terms of products and regulation. We are a respected responsible lender in our sector and play an important role in serving customers who may have difficulty in accessing traditional funding from a bank. We offer customers an industry-leading experience as they journey from loan inception through to servicing their repayment, resulting in a high number of repeat customers. Our stores are a major player in the circular economy, repurposing 1.7 million pre-owned goods in FY2024 in Australia alone. Our shopfronts continue to evolve, and we have introduced luxury goods in some demographic areas to further optimise product market fit and expand margins. Governance, liquidity and capital management During the financial year, the Board welcomed Mark Ashby and Andrew Spicer as Non-Executive Directors. Both have significant experience, including in the areas of public company governance, financial services, retail, and in building strong, sustainable businesses. We recently announced the renewal of an expanded $200 million securitisation facility to support further growth in our lending business. Our balance sheet remains strong, and our liquidity will continue to be enhanced through operating cashflow from both our organic business and new acquisitions The Board is pleased to confirm the payment to our shareholders of a final 1.00 cent per share fully franked dividend for the year ended 30 June 2024. This is the eighth straight half yearly interval dividend payment of this amount. I thank my fellow Board members for their contributions throughout the year, as well as all Cashies team members, including an outstanding leadership team led by Sam Budiselik, for serving our customers with passion, dignity and respect. Finally, I would like to acknowledge and thank our shareholders for their continued support and look forward to working together on delivering a strong performance in FY2025. Timothy Jugmans Non-executive Chairman Letters to Shareholders 30 June 2024 Cash Converters International Limited 6 Managing Director’s Shareholder Letter With consumers experiencing the difficulties of an inflationary economic cycle, our business continued to serve a substantial number of customers who used our lending products or had touch points with our store network. As we celebrate our 40th year of operation in Australia, our offering remains as relevant as ever as we sit central to the circular economy and remain focused on pursuing a world free from financial bias, providing choice and opportunity for all. Financial Highlights Cash Converters delivered strong results in FY2024 with strong contributions from both store and lending operations. Key achievements were (vs prior year):  Revenue up 26% to $382.6m  Operating EBITDA up 21% to $69.1m  Statutory NPAT $17.4m (prior year -$97.2m)  Gross loan book up 6% to $288.0m  Renewal of securitisation facility, increasing size to $200.0m and on attractive terms. Growing Store Network Our company owned store network continued to grow following franchise store acquisitions (becoming corporate owned) across Australia and the UK. We acquired 3 stores in Australia and saw international store growth in the UK with the strategic acquisition of Cash Converters (UK) Stores Pty Ltd (formerly Capital Cash Limited (“Capital Cash”)) (42 stores) and 5 additional franchise store acquisitions following. The UK acquisitions contributed to earnings delivering $3.479 million profit before tax. A pipeline of further franchise store acquisition opportunities has been identified in both local and international markets. Lending The gross loan book continued to grow, up 6% year-on-year. This comes off the back of a number of portfolio shaping initiatives. As already evidenced in the prior year, we continued to lower our exposure to small (SACC) loans which now represent 19% of the total loan book, while the medium loan book continued to grow. Ongoing product innovation saw the launch and rising contribution from the new Line of Credit (LOC) product which approached 5% of the overall loan book at the end of FY2024. We scored and assessed over 780,000 Australian loan applications in FY2024 as our integrated and proprietary machine learning based credit risk models continue to evolve and power our lending platform. We continue to enhance our technology platforms increasingly leveraging customer data insights to drive efficiency gains, control loss rates, and improve our customer experience. In FY2024, we successfully began using Open Banking technology to acquire bank statements from select loan applicants with plans to accelerate the adoption of Open Banking technology in FY2025. As previously announced, the vehicle lending business (Green Light Auto) has ceased lending operations and we expect the run-down of this book to be substantially completed over the coming 24 to 36 months, freeing up capital for investment in other core growth initiatives. People and culture We have engaged with our colleagues over the course of FY2024 developing a new Vision, Values and Purpose program that will be deployed throughout FY2025. Employee engagement is taken seriously with a number of our leadership team members having associated KPIs focused on engagement scores, ensuring our values continue to deliver excellent customer service results and foster a cohesive and collaborative working environment. Outlook We are excited to continue building on the operating momentum across our global business acquiring franchise stores and growing our personal finance product loan books. We strongly believe that this strategy is delivering results and is demonstrating excellent prospects for continued earnings growth over time. Sam Budiselik Chief Executive Officer & Managing Director Operating and financial review 30 June 2024 Cash Converters International Limited 7 Operating and financial review Cash Converters International Limited (“Cash Converters” or “the Company”) and entities controlled by the Company and its subsidiaries (“the Group”) is diverse, predominantly generating earnings from its network of retail stores, buying and selling pre-owned goods and a burgeoning personal finance business. Over time the Company has grown its store network by leveraging a franchising model, generating fees from licensing its brand and intellectual property globally. In more recent years the Company has embarked on a program to purchase these franchise stores back in Australia, New Zealand and the United Kingdom, operating the acquired stores under a Company controlled store network. The business has established onshore operations in each of the markets where it directly owns stores, has built a sophisticated technology platform to offer products and services online and is supported by a corporate head office in Perth, Western Australia. Business Model The Company operates the largest global network of stores facilitating the circular economy, buying and selling pre-owned inventory. In FY2024 the Company conducted over 600,000 retail transactions selling over 1,000,000 individual items throughout its network of Australian corporately owned stores. As one of the largest non-bank lenders in our customer segment, the Company also provides small personal loans as a cash solution for borrowers, with a number of products offered to a growing customer segment. In Australia alone the Company processed over 780,000 applications for personal finance during FY2024 and currently has over 93,000 active borrowers in its personal finance loan book. Global network Across Australia, New Zealand and the United Kingdom, Cash Converters operates corporate owned stores and is the Master Franchisor of a franchise network of stores. The balance of the international operations are run by Master Franchisors that pay a royalty for the right to the intellectual property and brand to operate a network of Cash Converters stores. Operating and financial review 30 June 2024 Cash Converters International Limited 8 In total, as at the date of this report, there are 669 stores operating across 17 countries. Key financial performance highlights The strength of the Company’s diversified and integrated business model has continued to underpin the customer service proposition with physical store assets complementing industry-leading online digital assets. The business generates multiple revenue streams with a significant portion of its profit derived from its personal lending products and company owned store operations. Additional profit is generated from franchise operated store operations. Operating and financial review 30 June 2024 Cash Converters International Limited 9 A strong operating result was achieved in the financial year, compared to the previous corresponding year, as outlined in the table below: As reported Operating 1 2024 2023 2024 2023 $’000 $’000 $’000 $’000 Total Revenue 382,563 302,697 382,563 302,697 Profit / (loss) after tax 17,397 (97,155) 20,870 20,104 Profit / (loss) before tax 26,864 (91,019) 30,310 28,804 EBIT 2 49,312 (75,019) 52,758 44,804 EBITDA 2 65,708 (62,587) 69,154 57,236 1 The operating results are presented excluding non-cash impairment expense after tax of $3.295 million against goodwill (FY2023: $110.481 million), a non-cash impairment expense after tax of $0.018 million (FY2023: $4.670 million) on the carrying value excluding goodwill of the assets of certain individual corporate stores and before the recognition of a net $0.160 million after tax on a non-recurring indirect tax recovery as well as merger and acquisition costs (FY2023: $2.108 million). The operating result is presented to aid the comparability and usefulness of the financial information reflecting the underlying performance of the business. This information should be considered in addition to, but not instead of or superior to, the Group’s financial statements prepared in accordance with IFRS. The operating results presented may be determined or calculated differently by other companies, limiting the usefulness of those measures for external comparative purposes. 2 The Company reports EBIT calculated as earnings before interest expense and tax and EBITDA calculated as EBIT before depreciation and amortisation. EBIT and EBITDA are non-IFRS measures and are alternative performance measures reported in addition to but not as a substitute for the performance measures reported in accordance with IFRS. These measures focus directly on operating earnings and enhance comparability between periods. The non-IFRS measures calculated and disclosed have not been audited in accordance with Australian Accounting Standards although the calculation is compiled from financial information that has been audited. Revenue growth in the period was up 26% on the prior period. This was driven by strong trading activity in our Australian business and a growing contribution from our new UK corporate store network, following the successful integration over the period of the franchise network acquisition previously announced. On 6 July 2023, the Group acquired 100% of the issued capital of Cash Converters (UK) Stores Pty Ltd (formerly Capital Cash Limited (“Capital Cash”)). Prior to its acquisition, Cash Converters (UK) Stores Pty Ltd (CCUKS) was the largest franchise group in the United Kingdom (“UK”) operating under the Cash Converters Master Franchisor arrangement, with 42 Cash Converters franchise stores in the United Kingdom. CCUKS contributed $3.423 million profit before tax to the Group’s profit from ordinary activities during the period (30 June 2023: nil). 1 June 2024, the Group acquired 100% of the issued capital of Themedawn Limited (“Themedawn”), a franchise group within the United Kingdom, which includes a network of 5 stores. Themedawn contributed profit before tax of $0.056 million to the Group for the period from 1 June 2024 to 30 June 2024 (30 June 2023: nil). See note 14 in the accompanying Financial Report for additional information on the business combinations. Our business remains well positioned to thrive amid a growing international emphasis on the circular economy and the repurposing of pre-owned goods, particularly as mainstream finance becomes increasingly challenging to access. The operating profit increase reflects underlying earnings momentum increasing as the loan book continues to grow and bad debt levels are managed. The prior year statutory profit was impacted by one-off non-cash impairments resulting from legislative changes (1HFY2023). Operating and financial review 30 June 2024 Cash Converters International Limited 10 Non-cash impairment to goodwill FY2024 A one-off non-cash impairment charge of $3.295 million before tax was recognised by the Company in 2HFY2024 related to the New Zealand operating segment. The impairment recognised is as a result of legislative changes to the New Zealand Credit Contracts and Consumer Finance Act (NZ CCF Act) resulting in reduced lending volumes for the New Zealand Cash Generating Unit (CGU) as well as reduced establishment fees charged. The impairment charge was one-off, non-cash in nature and a non-operating item. Therefore, underlying EBITDA and net profit after tax have been adjusted in FY2024. Going forward, these changes will impact the forecast for New Zealand related earnings in future financial years. FY2023 A one-off non-cash impairment charge of $110.481 million before tax was recognised by the Company in 1HFY2023. This was made up of $90.561 million against the Personal Finance cash generating unit and $19.920 million against the Store Operations group of cash generating units. The impairment recognised was as a result of legislative changes impacting the SACC product. The Financial Sector Reform Act 2022 (“the Act”) which was passed by the Senate in December 2022 contained a number of Financial Services legislative changes that focus on the enhanced regulation of the SACC loan products offered by the Company. The most material impact resulting from these changes is the extension of the Protected Earnings Amount (“PEA”) cap requirement, which determines how much of a consumer’s income can go towards repaying SACC loans. This applies to all consumers (including those fully employed) and lowers it from 20% to 10% of a consumer’s net income. Previously, the PEA cap only applied to Centrelink recipients. The PEA cap change came into effect for loans advanced from 12 June 2023. Responding to legislative changes is a complex process that requires the application of significant judgement to estimate the reduction in SACC loan volumes due to the PEA cap amendment, requiring an estimation of customer behaviour and estimating the discount rate to the forecast cash flows to determine net present value. Impairment testing completed by the Company has supported the conclusion that there was a requirement for a goodwill impairment charge as a result of the legislative changes. The impairment charge is one-off, non-cash in nature and a non-operating item. Therefore, underlying EBITDA and net profit after tax have been adjusted in FY2023. Going forward, these changes will impact the forecast for SACC related earnings in future financial years. The management team remains focused on delivering an exciting new product pipeline, in addition to executing on organic and inorganic strategic initiatives as outlined in previous market updates, to ensure the Company remains in the best possible position to assist customers who are impacted by these changes and to address the expected earnings impact. See note 5 in the accompanying Financial Report for additional information on the impairment. Operating and financial review 30 June 2024 Cash Converters International Limited 11 Summary of consolidated revenues and results by significant segment Operating basis 1 As reported basis Segment revenues Segment EBITDA 2 Segment EBITDA 2 30-Jun-24 30-Jun-23 30-Jun-24 30-Jun-23 30-Jun-24 30-Jun-23 $’000 $’000 $’000 $’000 $’000 $’000 Personal Finance 106,783 114,032 44,658 50,564 45,808 (39,997) Vehicle Financing 18,556 15,048 8,183 6,078 8,109 6,078 Store Operations 150,084 142,045 24,255 20,575 25,144 (5,097) New Zealand 25,100 13,810 2,066 (833) (2,138) (833) UK 74,849 11,404 12,805 3,339 11,743 741 Total 375,372 296,339 91,967 79,723 88,666 (39,108) Head Office & Eliminations 7,191 6,358 (22,813) (22,487) (22,958) (23,479) Total 382,563 302,697 69,154 57,236 65,708 (62,587) Depreciation and amortisation expense (16,396) (12,432) Finance costs (22,448) (16,000) Profit / (loss) before tax 26,864 (91,019) Income tax expense (9,467) (6,136) Profit / (loss) for the period 17,397 (97,155) 1 The operating results are presented excluding non-cash impairment expense after tax of $3.295 million against goodwill (FY2023: $110.481 million), a net non-cash impairment expense after tax of $0.018 million (FY2023: $4.670 million) on the carrying value excluding goodwill of the assets of certain individual corporate stores and before the recognition of a net $0.160 million after tax on a non-recurring indirect tax recovery as well as merger and acquisition costs (FY2023: $2.108 million). The operating result is presented to aid the comparability and usefulness of the financial information reflecting the underlying performance of the business. This information should be considered in addition to, but not instead of or superior to, the Group’s financial statements prepared in accordance with IFRS. The operating results presented may be determined or calculated differently by other companies, limiting the usefulness of those measures for external comparative purposes. 2 The Company reports EBIT calculated as earnings before interest expense and tax and EBITDA calculated as EBIT before depreciation and amortisation. EBIT and EBITDA are non-IFRS measures and are alternative performance measures reported in addition to but not as a substitute for the performance measures reported in accordance with IFRS. These measures focus directly on operating earnings and enhance comparability between periods. The non-IFRS measures calculated and disclosed have not been audited in accordance with Australian Accounting Standards although the calculation is compiled from financial information that has been audited. Operating and financial review 30 June 2024 Cash Converters International Limited 12 Key segment financial performance As illustrated in the table above, revenue growth across the various business segments reflected the appeal of our unique business model to a growing number of customers, offering cash solutions that include unsecured personal loans through our Personal Finance segment, store based second-hand retail trading and pawnbroking loans, and Franchise royalty collection (globally). Inflationary pressures increasing the cost of living are resulting in an increase in overall demand for the Company’s products and services. Through FY2024, the gross loan book has grown 6% on FY2023 to a record $288.004 million (FY2023: $271.355 million) with principal advanced increasing 8% on the prior year. The Personal Finance segment currently reflects earnings from three types of unsecured loans; Small1, Medium2 and Line of Credit3 loans, distributed online and instore. Small loans consist of SACC loans and PayAdvance product. We continue to make significant progress executing on the strategic product transition away from the SACC Small loan product segment (down to 19% of the consolidated loan book) offering customers greater flexibility and lower cost loan options where suitable. Reflecting the success of this product strategy was the Medium loan book growth, up 7% on FY2023 closing the period at $106.900 million. We are also excited by the release and performance of other new loan products enabling this customer transition. Whilst in its infancy, the new Line of Credit product is forecast to grow strongly. As a result of a change of focus to longer term, lower cost loan products such as the Medium loan and Line of Credit loan products, and due to the Small loans representing a declining proportion of the overall loan book, the Company will cease splitting the loan books out and consolidate to report on ‘Personal Loans’ going forward. As announced in June 2024, following a comprehensive review of the Company’s capital allocation strategy a conclusion was reached that the capital currently utilised in the auto finance segment can be more effectively deployed to support executing other opportunities previously outlined in the company’s strategic plan. Specifically, Cash Converters plans to focus on expanding its footprint through franchise store acquisitions and accelerating the growth of its personal finance products. Operating and financial review 30 June 2024 Cash Converters International Limited 13 As part of the review, the Company evaluated options for a market sale of the auto finance portfolio. The company determined that it can achieve a better result by running down the book using its in-house collections team and advanced technology. This approach ensures greater control over the process and optimises recovery outcomes. 1 Small loans include: Small Amount Credit Contract (“SACC”): a regulated unsecured personal loan product, transacted in-store and online, up to $2,000 and up to 12 months; PayAdvance: has a one-off fee of 5% applied upon repayment, to an advance on earned, but not yet received salary or wages, with no other fees or charges applied; 2 Medium loans include: Medium Amount Credit Contract (“MACC”): a regulated unsecured personal loan product, transacted in-store and online, up to $5,000 and up to 24 months. 3Line of Credit (“LOC”): a regulated unsecured personal loan product, transacted in-store and online, up to $10,000 and up to 36 months. Approved credit limit can be accessed by the customer during the life of the loan. 30-Jun-24 30-Jun-23 Variance $’000 $’000 Principal advanced1 Personal Finance 204,311 228,582 (11%) Vehicle Finance 28,504 34,107 (16%) Store Operations 62,338 71,002 (12%) New Zealand 22,684 14,348 58% UK 57,063 - 100% Total 374,900 348,039 8% 1 Principal advanced represents the cash amount of loan funding disbursed to customers. 30-Jun-24 30-Jun-23 Variance $’000 $’000 % Gross loan books Personal Finance 175,331 178,328 (2%) Vehicle Finance 72,194 62,914 15% Store Operations 18,290 17,628 4% New Zealand 11,766 12,485 (6%) UK 10,423 - 100% Total 288,004 271,355 6% Loan book performance Two loan book loss related expenses impact the profit or loss statement: 1. Net bad debt expense: net bad debt expense for the period was $48.825 million, down from $49.312 million in the prior period. Whilst the bad debt written off has increased in line with the larger loan books, the net loss rate has improved from 11.0% at 2HFY2023 down to 8.0% at 2HFY2024. 2. Expected credit loss allowance (“ECL”): success in growing the loan book will result an ECL expense in the same accounting period (up front expense) whilst deteriorating loans written in a prior period (e.g., due to missed payments) may see adjustments made. The ECL allowance model is forward-looking, requiring significant judgement and does not require evidence of an actual loss event for an allowance to be recognised. The overall blended ECL allowance as a percentage of the gross loan book for the year ending 30 June 2024 is 17.1% (FY2023: 17.2%). Appropriate reserves have been incorporated including for an assessment of economic risk and the impact of modelling risk. Operating and financial review 30 June 2024 Cash Converters International Limited 14 The improved movement in the ECL is due to reduced year on year loan book growth when compared to FY2023. 30-Jun-24 30-Jun-23 Variance $’000 $’000 % Bad debts written off 57,694 55,483 4% Recovery of bad debts written off (8,869) (6,171) 44% Net bad debt expense 48,825 49,312 (1%) Movement in expected credit loss allowance 1,931 5,071 (62%) Total loan related bad debts and allowances 50,756 54,383 (7%) Key financial position highlights 30-Jun-24 30-Jun-23 Variance $’000 $’000 % Cash and cash equivalents 56,289 71,565 (21%) Net loan receivables 238,712 224,729 6% Trade and other receivables 17,929 12,763 40% Inventories 33,036 26,493 25% Intangible assets 25,171 20,543 23% Goodwill 7,950 3,279 142% Right of use assets 56,930 47,046 21% Tax assets 31,299 29,669 5% Plant & equipment 10,722 6,582 63% Total Assets 478,038 442,669 8% Borrowings 144,085 136,991 5% Lease liabilities 70,989 63,742 11% Other liabilities 51,598 35,442 46% Total Liabilities 266,672 236,175 13% Total Equity 211,366 206,494 2% The Group closed the reporting period with a strong balance sheet. Net tangible asset per share was 28.40 cents per share (FY2023: 29.11 cents per share). Since 30 June 2023, the net loan book has grown by 6% and Corporate Store inventory has increased by 25%, assisted by the acquisition of several franchises during the period. Operating and financial review 30 June 2024 Cash Converters International Limited 15 The Group’s cash and cash equivalent carrying value is $56.289 million (FY2023: $71.565 million) after funding loan book growth, several franchise acquisitions and funding additional drawdowns of the loan to the master franchisor in Spain. The Group reported a net cash decrease of $15.270 million (FY2023: $12.848 million increase). Net operational cash inflow from operating activities was $38.453 million (FY2023: $11.536 million outflow). Financing activities included dividend payments of $12.550 million (FY2023: $12.550 million). Cash outflows from investing activities of $33.057 million (FY2023: $22.628 million) included $2.282 million (FY2023: $4.679 million) to fund a loan to the Spain master franchisor and $24.345 million (FY2023: $13.798 million) invested in business combination acquisitions. The undrawn securitisation facility funding line is $10.000 million (FY2023: $11.750 million) and the Group is in compliance with the requirements of the facility. The disciplined evaluation of investment opportunities and allocation of capital continues and with a strong balance sheet in place the Board has, with the results release, declared a fully franked final dividend of 1.00 cent per fully paid ordinary share. Execution on strategy Growth strategy As previously advised, select domestic and international franchise acquisition targets remain a focus. The objective is to acquire earnings accretive store networks, based on sensible valuation metrics, which will accelerate Group earnings in the longer term. Growing loan books are also an area of focus contributing to growth in Company earnings. Where the Company is the Master Franchisor (at present in Australia, UK and NZ) our primary focus remains on acquiring franchise stores and growing our personal finance product loan books. Beyond the three core markets identified, established franchise partnerships in other jurisdictions also offer unique growth optionality for the Company over time, with the potential to continuing buying back the stores operated by franchisees. Customer demand is growing as cost-of-living pressures continue to impact consumers and traditional finance providers reduce risk appetite, leaving a growing pool of under serviced borrowers coming to Cash Converters. Further regulatory reform over time, particularly of the Buy Now Pay Later sector, will also benefit the Company with consumers hopefully driven back to the safety of regulated credit providers such as Cash Converters. The unique nature of the Company’s business model, with a global network of established stores and digital assets at the centre of a growing circular economy, and proprietary underwriting and credit risk technology enabling the servicing of borrowers in a responsible manner, provides excellent prospects for continued earnings growth over time. Summary Outlook – Growth Drivers:  Proven track record of acquiring franchise stores (50 purchased in FY2024), demonstrated profit contribution;  Forward pipeline of franchise store acquisitions under review in UK and Australia, excellent growth optionality;  Organic loan book growth with increasing demand for personal loans;  New loan product released (LoC) and loan book growing;  Funding headroom and strong Balance Sheet underpinning further investment. Operating and financial review 30 June 2024 Cash Converters International Limited 16 Cyber security The cyber security landscape continues to evolve rapidly, and Cash Converters acknowledges the level of cyber risk associated with our operations, particularly given the nature of the sensitive customer information we handle in delivering our consumer financial services at high volumes in Australia, the United Kingdom, and New Zealand. This sensitive data, if compromised, could have profound implications for our customers, business reputation, and financial performance. Recognising the criticality of this risk, Cash Converters is committed to safeguarding our customers, stakeholders and the data we manage. We have already embarked on significant investments in cyber-security and have an established information security function that makes continuous risk-prioritised improvements to our digital infrastructure, cyber resilience and exposure to cyber threats. We remain vigilant and dedicated to upholding the trust our shareholders and customers have placed in us. Cash Converters utilises global third-party security providers to ensure an ongoing program of monitoring, testing and remediation. Working in conjunction with regulators and considering best practices globally, the Group is proactive in its approach to ensuring cyber security. Culture and people The values and culture of Cash Converters are the foundation of its success and the reason it has continued to operate for almost 40 years. The Company recognises the importance of its reputation and standing within the community and with its key stakeholders, such as customers, employees, suppliers, creditors, law makers and regulators. Employees are encouraged to embrace our Cash Converters values, which are introduced during induction and kept alive through ongoing training programs, internal communications and recognition schemes. Behaviours consistent with our values are measured annually as a part of our KPIs, performance reviews and are acknowledged through our recognition programs. FY2024 saw the commencement of a refresh and update to our vision, purpose and values, and we look forward to the rollout and engagement in the refreshed program during FY2025. Business Risk Assessment Like all businesses, Cash Converters faces uncertainty and the ability to understand, manage and mitigate risk provides a competitive advantage. The Company’s ability to accurately assess value, purchase and sell quality consumer goods at appropriate prices is influenced by many factors. Our depth of skill and experience in this specialist area is a source of competitive advantage for Cash Converters. During a period of rising interest rates and continued inflationary pressure the ability to service the circular economy though provision of recycled goods is a competitive advantage. The business process has focussed on ensuring the customer’s buying process, which has not suffered from supply chain disruption, is convenient and competitive and results in a continued ability to generate an appropriate margin. Operating and financial review 30 June 2024 Cash Converters International Limited 17 As a responsible provider of personal finance products there is an inherent risk that customers may not meet their expected repayments as they manage their financial commitments. A continued discipline remains in both the management of credit risk as well as commitment to the highest possible responsible lending standards. Cash Converters’ success in working with customers over time is based on many factors that mitigate compliance risk and risk of default with those who may subsequently experience financial difficulty. These include: • Treating customers with empathy, care, and respect; • Investing in engagement methods to provide customers with freedom of choice; • Efficient and thorough understanding and assessment of customer eligibility prior to origination; and • A value-driven culture where a premium is placed on customer service and unlocking possibilities together. Whilst the aim of responsible lending policies and a customer-first approach is to minimise risk, credit risk is influenced by factors outside the control of Cash Converters such as unemployment, relative income growth, consumer confidence and interest rates. The risk of default is ever-present. Cash Converters often has the advantage in offering credit products to customers that it has served over many years and knows well, affording a unique opportunity to provide a high level of service. Cash Converters welcomes the industry emphasis towards non-financial risk, including conduct and culture as well as detecting, deterring, and disrupting criminal abuse of the financial system. The Company views these commitments as an area of continuous improvement and continues to strengthen its risk management and compliance capabilities while engaging transparently with financial service sector regulators (ASIC and AUSTRAC). In January 2024, AUSTRAC accepted the outcome of the External Auditors Final Report, which confirmed all commitments under the Enforceable Undertaking had been completed and considered the matter finalised. This reflects the work undertaken by the Company to uplift its Anti-Money Laundering and Counter-Terrorism Financing (“AML/CTF”) program and confirms the Company’s commitment (across all levels of the organisation) to the continued strengthening of its relationship with AUSTRAC and to being a leader in our sector on AML/CTF compliance. There has been a marked increase in cyber-criminal activities globally impacting all companies, large and small, but which also pose a greater risk to those companies with a large online customer base. This is reflected in the Company’s enterprise-wide risk register. The Company’s cyber defences continue to be enhanced with a focus on educating team members on the threats of cyber-crime activities and the strengthening of its cybersecurity controls which include multifactor authentication, incident response, end point detection, network segmentation, third party governance amongst others. Outside of these, exists the accepted risks resulting from regulatory change, poorly executed strategy, failure to respond appropriately to changes in technology and the threat posed through competitor behaviours, all of which are a source of constant consideration and review by the Company’s management team and Board of Directors. Operating and financial review 30 June 2024 Cash Converters International Limited 18 Outlook As demand for our products remains strong and our loan books continue to grow rapidly, we remain committed to maintaining a culture of robust risk management and compliance as a central strategic pillar across the business. From a position of balance sheet strength, closing the financial year with $56.289 million in Cash and cash equivalents, we remain focused on executing strategic initiatives across the business. Throughout the financial year these initiatives have begun delivering revenue growth, as illustrated by the growing contribution from the UK segment. Our digital platforms are reaching a growing number of new younger customers, new product innovation such as the Line of Credit are delivering new growing loan books and value accretive franchise store and network acquisitions continue. Additionally, the renewal of the Fortress facility provides room and flexibility to continue to grow our loan portfolio as well as delivering material cost savings. Leveraging our scale to drive our Company provides an exciting opportunity to consolidate our position as the largest and most recognised lender in our markets, with the strategic building blocks for the future era of Cash Converters now in place. Due to the confidence the Board has in our balance sheet strength and earnings runway, a final 1.00 cents per share fully franked dividend was declared for our shareholders. This is the eighth straight half yearly interval dividend payment of this amount. The Board and management team are excited to be in a strong position to drive the Company forward. Directors’ report 30 June 2024 Cash Converters International Limited 19 Directors’ report The Directors of Cash Converters International Limited submit the following report of the Company for the financial year ended 30 June 2024. To comply with the provisions of the Corporations Act 2001, the Directors report as follows: Information about Directors The following persons held office as Directors of the Company during the whole of the financial year and until the date of this report unless otherwise stated: Mr Timothy Jugmans – Non-Executive Chairman Appointed Director and Chairman 1 April 2022 Mr Jugmans is the Chief Financial Officer (“CFO”) of EZCORP Inc (“EZCORP”). Mr Jugmans joined EZCORP in December 2016 as Vice President, Treasury and M&A, having served as a consultant performing similar duties since March 2015. He was appointed CFO in May 2021 after serving as interim CFO since September 2020. Mr Jugmans has 25 years’ experience providing strategic and financial services advice for a variety of companies, including seven years with Lexicon Partners Pty Limited, an independent corporate advisory and consulting firm based in Sydney, Australia. From January 2015 to December 2016, Mr Jugmans was a principal of Selene Partners Inc., a financial consulting firm providing strategic advice and other business services to a variety of clients, including the Company and Morgan Schiff & Co., Inc. He served as the CFO of Morgan Schiff from April 2013 to December 2014, and was CFO of ShippingEasy, Inc. from July 2011 to April 2013. From April 2015 to April 2021, Mr Jugmans served as a non-executive Board member and Chairman of Ratecity Pty Ltd, which operates one of Australia’s leading financial comparison sites. Mr Jugmans has a Bachelor of Business degree with a major in Finance and a minor in Mathematics from the University of Technology in Sydney. Mr Jugmans is on the Company’s Board as a nominee of significant shareholder, EZCORP and as Chairman, pursuant to the Subscription Agreement dated 17 August 2009 between EZCORP and the Company (released to ASX on 9 November 2009). Accordingly, he is not considered to be an independent Director. Over the past 3 years Mr Jugmans has not held any Directorships with other listed companies. Mr Lachlan Given – Non-Executive Director Appointed Director 22 August 2014 Mr Given is the Chief Executive Officer (“CEO”) of EZCORP, Inc. (appointed April 2022) and was reappointed as a Director of the EZCORP Board in March 2022, having previously served as non-executive Chairman of the EZCORP Board of Directors from July 2014 to September 2019. Before joining EZCORP, Mr Given provided financial and advisory services to EZCORP through his own business and financial advisory firm. Mr Given is a member of the Board of Directors of The Farm Journal Corporation, a preeminent US agricultural media company established in 1877. Mr Given is also a Director of encryption solutions company Senetas Corporation Limited; and leading financial services rating and research firm CANSTAR Pty Ltd. Directors’ report 30 June 2024 Cash Converters International Limited 20 Mr Given began his career working in the investment banking and equity capital markets divisions of Merrill Lynch in Hong Kong and Sydney, Australia, where he specialised in the origination and execution of a variety of M&A, equity and equity linked and fixed income transactions. Mr Given graduated from the Queensland University of Technology with a Bachelor of Business, majoring in Banking and Finance (with distinction). Mr Given is on the Company’s Board as a nominee of significant shareholder, EZCORP, pursuant to the Subscription Agreement dated 17 August 2009 between EZCORP and the Company (released to ASX on 9 November 2009). Accordingly, he is not considered to be an independent Director. Over the past 3 years Mr Given has held Directorships with the following listed companies: Company Commenced Ceased Senetas Corporation Limited 20 March 2013 - EZCORP Inc 3 March 2022 - Mr Sam Budiselik – Chief Executive Officer & Managing Director Appointed Managing Director 18 December 2020 Mr Budiselik was appointed CEO in February 2020 and Managing Director in December 2020 and has been with the Company since 2016 serving as Chief Operating Officer (“COO”) and interim CEO. Before joining Cash Converters, he was COO for Australia at the stockbroking and wealth management firm Patersons Securities (now Canaccord Genuity). Prior to returning to Australia, Mr Budiselik spent a total of 12 years abroad working for investment banks UBS and Barclays Capital in London, New York and Singapore. Mr Budiselik has completed a Bachelor of Commerce and an MBA at the University of Western Australia, a Graduate Diploma in Applied Finance (Securities Institute of Australia) and the Australian Institute of Company Directors course (GAICD). Over the past 3 years Mr Budiselik has not held any Directorships with other listed companies. Mr Peter Cumins – Executive Deputy Chairman Appointed Director April 1995 Appointed Executive Deputy Chairman 23 January 2017 Mr Cumins joined the Company in August 1990 as Finance and Administration Manager when the Company had 23 stores, becoming General Manager in March 1992. He became Managing Director in April 1995. Mr Cumins moved from this role to the role of Executive Deputy Chairman on 23 January 2017. Mr Cumins is a qualified accountant and has overseen the major growth in the number of franchisees in Australia as well as the international development of the Cash Converters franchise system. His experience in the management of large organisations has included senior executive positions in the government health sector. Over the past 3 years Mr Cumins has not held any Directorships with other listed companies. Directors’ report 30 June 2024 Cash Converters International Limited 21 Mr Robert Hines – Non-Executive Director Appointed Director 14 April 2020 Mr Hines brings over 30 years’ experience in banking and finance services, agriculture and energy sectors with senior executive roles focusing on finance, retail and operations. Mr Hines has held executive positions of CFO and/ or COO at some of Australia’s leading companies; Queensland Sugar Limited, QIC Limited, Bank of Queensland Limited, Energex Retail Limited, Tarong Energy Limited and Suncorp Group Limited. In addition, Mr Hines served as Group CFO for NatWest Markets and was a Director CFO Advisory with KPMG. Mr Hines joined the Board of Humm Group Limited in September 2022, was appointed as a Director of Mackay Sugar Limited in August 2022 and Raiz Investment Limited in November 2023. Mr Hines brings extensive operational and financial expertise to the Board. He is a senior fellow of FINSIA and a fellow of the Australian Institute of Company Directors, Chartered Accountants Australia and New Zealand and CPA Australia. Mr Hines is the chair of the Company’s Audit and Risk Committee and a member of the Governance, Remuneration and Nomination Committee. Mr Hines also chaired the Board Investment Committee until the Committee was dissolved on 1 April 2024 Over the past 3 years Mr Hines has held a directorship with the following listed companies: Company Commenced Ceased Humm Group Limited 29 September 2022 - Raiz Investment Limited 28 November 2023 - Mr Henry Shiner – Non-Executive Director Appointed Director 1 July 2021 Mr Shiner has accumulated experience over many years of Senior Executive Management and Strategic positions, most recently in the Quick Service Restaurant industry, where he held the positions of Vice President, Chief Information Officer of McDonald’s APAC and then as Vice President Global Financial Transformation – IT, at McDonald’s Corporation. Mr Shiner is currently part of the Global Mentors Personal Board of Directors as part of 24 global experts in their field to provide mentorship to Company Executives through defined programs across many industries. He is also on the Advisory Board for Guroo Producer Pty Ltd. Previously Mr Shiner has held Non-Executive Director roles on the National Board of Ronald McDonald Charities, Craveable Brands, DragonTail Systems, NoahFace, Slikr, AirService and Advisory Board roles with numerous other companies Prior to McDonald’s, Mr Shiner held Senior Executive positions in Norske Skog, Fletcher Challenge Paper, Honeywell Ltd and AGL. His experience across these markets have included leading strategic planning, technology strategy and development, franchising, cyber security, large manufacturing operations and governance and quality management. In addition to an honours degree in Chemical Engineering, Mr Shiner has graduated in Management Studies focused on Global Strategy execution from the IMD School in Lausanne, Switzerland and is a member and graduate of the Australian Institute of Company Directors. Mr Shiner is a member of the Company’s Governance, Remuneration and Nomination and Audit and Risk Committees. Mr Shiner was also a member of the Board Investment Committee until it was dissolved on 1 April 2024. Over the past 3 years Mr Shiner has held a Directorship with the following listed company: Company Commenced Ceased Dragontail Systems Limited* 13 May 2020 13 September 2021 *Dragontail System Limited is no longer a listed entity however it was at one point during the prior 3 years. Directors’ report 30 June 2024 Cash Converters International Limited 22 Mr Mark Ashby – Non-Executive Director Appointed Director 6 October 2023 Mr Ashby is an experienced executive, Board member and Board advisor, with over 30 years of experience in senior executive roles in listed and private companies in both Australia and the United States (‘USA’). Mr Ashby’s recent board advisory experience has focused on working with companies to create and grow shareholder value and has included US expansion, refinancing and balance sheet restructuring as well as advising on corporate governance and accountabilities. Mr Ashby is currently a Director for Sydney-based Direct Group Pty Ltd, a private equity owned catalogue sales business and television shopping network and is Chairman of Office Choice Ltd. Mr Ashby has recently been a member of Advisory Boards for retail businesses in both luxury and accessory segments. Prior to the establishment of his Board advisory business in 2017, Mr Ashby was the CFO for Myer Holdings Ltd from 2008 to 2015, leading the IPO on the ASX in 2009. Whilst overseas, Mr Ashby held the role of CFO of EZCORP, Inc. in the USA from 2015 to 2017. Mr Ashby holds a Bachelor of Business (Accounting) from Swinburne University of Technology, is a graduate of the Australian Institute of Company Directors (GAICD) and is a Fellow of the Australian Society of CPAs (FCPA). Mr Ashby was appointed as a member of the Company’s Governance, Remuneration and Nomination and Audit and Risk Committees on 6 October 2023. Mr Ashby was appointed as chair of the Governance, Remuneration and Nomination Committee on 22 May 2024. Mr Ashby was also a member of the Board Investment Committee from 6 October 2023 until the Committee was dissolved on 1 April 2024. Over the past 3 years Mr Ashby has not held any Directorships with other listed companies. Mr Andrew Spicer – Non-Executive Director Appointed Director 22 May 2024 Mr Spicer was appointed as an Independent Non-Executive Director in May 2024, bringing a depth of experience in financial services, strategy, brand building, digital transformation and leadership. Prior to commencing a Board career, Mr Spicer was the Chief Executive Officer & Managing Director of Canstar Pty Ltd (“Canstar”) for the past 16 years. Under his leadership, Canstar evolved into one of Australia’s most trusted brands, with over 2 million online monthly visitors. Prior to Canstar, Mr Spicer played a pivotal role in the listing of WebCentral on the ASX and under his leadership, WebCentral grew into Australia’s largest web and application hosting company. Mr Spicer’s corporate experience also includes executive roles at Suncorp Group and consulting roles for Ernst & Young and McKinsey & Co, where he led major strategic, operational and performance improvement assignments for financial services and resource companies. Mr Spicer graduated from the Queensland University of Technology with a Bachelor of Engineering and holds an MBA from the University of New South Wales. Mr Spicer is also a graduate of the Australian Institute of Company Directors and has completed a leadership program at the Harvard Business School. Mr Spicer was appointed a member of the Company’s Governance, Remuneration and Nomination and Audit and Risk Committees on 22 May 2024. Over the past 3 years Mr Spicer has not held any Directorships with other listed companies. Directors’ report 30 June 2024 Cash Converters International Limited 23 Ms Susan Thomas – Non-Executive Director Appointed Director 1 April 2022 and resigned effective 30 September 2023 Ms Thomas has over 30 years’ experience in the financial services and information technology sectors, having founded and acted as Managing Director of FlexiPlan Australia Limited, which was subsequently sold to MLC/NAB. Ms Thomas is an experienced company Director and risk committee chair with expertise in technology and law. Ms Thomas holds a Bachelor of Law and Bachelor of Commerce from the University of New South Wales and has received a diploma from the Australian Institute of Company Directors. Ms Thomas was a member of the Governance, Remuneration and Nomination, Audit and Risk and Board Investment Committees until her resignation on 30 September 2023. Over the past 3 years Ms Thomas has held Directorships with the following listed companies: Company Commenced Ceased Fitzroy River Corporation Limited 26 November 2012 - Temple and Webster Group Limited 23 February 2016 30 November 2022 Nuix Limited 18 November 2020 18 October 2023 Maggie Beer Holdings Limited 1 July 2022 - Ms Julie Elliott – Non-Executive Director Appointed Director 14 April 2020 and resigned effective 22 May 2024 Ms Elliott has over 30 years’ experience in both executive and Director roles across banking, financial services and government. In her executive career she held the role of CEO of Bank of Sydney, as well as senior leadership roles at Westpac, NAB and KPMG with experience in strategy, marketing, product, finance, audit and sales. Ms Elliott is a Director and the chair of the Governance and Remuneration Committee of Police and Nurses Limited, a Director of Grow Finance Limited and EBA Foundation. Ms Elliott is also a chair and member on several NSW Government Audit and Risk Committees including chair of NSW Treasury. She has previously held the role of Chair of State Trustees Limited and Metropolitan Fire and Emergency Services Board. Ms Elliott brings extensive operational, financial and Board experience. She is a fellow of FINSIA, the Australian Institute of Company Directors and Chartered Accountants Australia and New Zealand. She holds an MBA and a Bachelor of Economics. Ms Elliott was the Chair of the Company’s Governance, Remuneration and Nomination Committee, and a member of the Audit and Risk and Board Investment Committees until her resignation on 22 May 2024. Over the past 3 years Ms Elliott has not held any Directorships with other listed companies. Directors’ report 30 June 2024 Cash Converters International Limited 24 Directors’ shareholdings The following table sets out each Director’s relevant interest in shares and options in shares of Cash Converters International Limited as at the date of this report: Directors Fully paid ordinary shares Number Share options Number Mr T Jugmans - - Mr L Given - - Mr S Budiselik 9,087,490 11,601,846 Mr P Cumins 10,310,694 - Mr R Hines 822,000 - Mr H Shiner - - Mr M Ashby - - Mr A Spicer - - Company Secretaries Ms Kelly Moore and Ms Meagan Hamblin Appointed Joint Company Secretaries with effect from 12 April 2023 Ms Moore is a Fellow of Chartered Accountants Australia and New Zealand and Company Secretary with extensive experience in providing accounting and secretarial advice to public companies. Ms Moore is a Director of Meridian Corporate Consultants and holds a Bachelor of Commerce degree from the University of Western Australia. Ms Moore is a graduate of the Australian Institute of Company Directors and an associate member of the Governance Institute of Australia. Ms Hamblin is a Fellow of Chartered Accountants Australia and New Zealand and is a graduate of the Governance Institute of Australia. Ms Hamblin is a Director of Meridian Corporate Consultants specialising in providing financial reporting, corporate governance and advisory services for both public and private companies. Ms Hamblin has previously worked in the statutory reporting team at Wesfarmers Ltd and in the audit and advisory team at Deloitte Perth. Ms Hamblin holds a Bachelor of Commerce degree from the University of Western Australia. Principal activities The principal activity of Cash Converters International Limited and its subsidiaries (“the Group”) is that of a franchisor, retailer of second-hand goods and financial services, a provider of secured and unsecured loans and the operator of corporate stores in Australia, New Zealand and United Kingdom, all of which trade under the Cash Converters name. Country master franchise licences are also sold to licensees to allow the development of the Cash Converters brand but without the need for support from Cash Converters International Limited. Directors’ report 30 June 2024 Cash Converters International Limited 25 Review of operations The Group’s net profit attributable to members of the parent entity for the year ended 30 June 2024 was $17.397 million (FY2023: $97.155 million loss) after an income tax charge of $9.467 million (FY2023: $6.136 million). A review of the Group’s operations and financial performance has been provided on pages 7 to 18. The Group reported an operating profit after tax of $20.870 million (FY2023: $20.104 million). A reconciliation of reported profit after tax to operating profit after tax is provided below. 30-Jun-24 30-Jun-23 Change $'000 $'000 $'000 % Reported profit / (loss) after tax 17,397 (97,155) 114,552 nm Non-operating adjustments Impairment1 3,313 115,151 (111,838) (97%) GST refunds net of consulting fees2 (805) (644) (161) 25% M&A costs3 965 2,752 (1,787) (65%) Operating profit after tax 20,870 20,104 766 4% 1. Comprised of non-cash impairment expense after tax of $3.295 million against goodwill (FY2023 : $110.481 million), and non- cash impairment expense after tax of $0.018 million (FY2023: $4.670 million) on the carrying value excluding goodwill of the assets of certain individual corporate stores. 2. Comprised of non-recurring indirect tax recovery, net of consulting fees, of $1.150 million ($0.805 million after tax effect) on a historical class action settlement (FY2023 : $0.920 million ($0.644 million after tax effect)). 3. Comprised of non-operating professional, employee and administrative costs of $1.301 million ($0.965 million after tax effect) directly attributable to merger and acquisition (“M&A”) due diligence (FY2023: $3.590 million ($2.752 million after tax effect)) nm = Not meaningful Changes in state of affairs During the financial year there were no significant changes in the state of affairs of the Company other than those referred to elsewhere in this financial report and the notes thereto. Subsequent events As announced to the market on 27 August 2024 a renewal of the securitisation facility with Fortress Investment Group was completed. The following key terms were agreed as part of the renewed facility:  Facility size increased to $200 million from $150 million.  Pricing based on a margin over the Bank Bill Swap Rate (BBSW).  Provides growth capital for the personal finance lending business including new products.  Availability period extended for a further three years to 27 August 2027 and maturity date extended to 27 August 2028. Future developments Likely developments in expected results of the Group’s operations in subsequent years and the Group’s business strategies are referred to elsewhere in this report. Directors’ report 30 June 2024 Cash Converters International Limited 26 Dividends The Board of Directors of the Company have declared a final dividend of 1.00 cent per share with the release of the final year end results and reporting date of 29 August 2024. The dividend will be 100% franked and will be paid on 11 October 2024 to those shareholders on the register at the close of business on 13 September 2024. With the declaration of this dividend, the Company’s Dividend Reinvestment Plan (“DRP”) remains suspended and will not apply to this dividend. Shares under option or issued on exercise of options Details of unissued shares or interests under option as at the date of this report are: Issuing entity Number of shares under option Class of shares Exercise price of option Measurement Date Cash Converters International Limited 7,556,388 Ordinary Nil 30 Jun 2024 Cash Converters International Limited 10,022,679 Ordinary Nil 30 Jun 2025 Cash Converters International Limited 16,063,180 Ordinary Nil 30 Jun 2026 The performance rights above are in substance share options with an exercise price of nil, which vest and may potentially be exercised into ordinary shares once certain performance / vesting conditions are met. The holders of these performance rights do not have the right, by virtue of the performance right, to participate in any share or other interest issue other than bonus share issues of the Company or of any other body corporate. Performance rights are managed through the Group’s Equity Incentive Plan. Shares are acquired on market and held as treasury shares when it is probable that the vesting conditions will be achieved. During the period 5,525,046 shares (acquired in FY2023) were issued through the Company’s Employee Share Trust to eligible participants. The measurement date of these vested rights was to 30 June 2023. Indemnification and insurance of Directors and officers During the financial year, the Company paid a premium in respect of a contract insuring the Directors of the Company, the Company Secretaries and all executive officers of the Company and of any related body corporate against a liability incurred as such a Director, secretary or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as such an officer or auditor. Directors’ report 30 June 2024 Cash Converters International Limited 27 Directors’ meetings The number of meetings of Directors and meetings of committees of Directors held during the year and the number of meetings attended by each Director were as follows: Directors Board of Directors Audit and Risk Committee Governance, Remuneration and Nomination Committee Board Investment Committee E A M E A M E A M E A Mr T Jugmans 9 9 No 7 7 No 6 6 No 3 3 Mr S Budiselik 9 9 No 7 7 No 6 5 No 3 3 Mr P Cumins 9 9 No 7 7 No 6 5 No 3 3 Mr M Ashby¹ 3 3 Yes 5 5 Yes 3 3 Yes 2 2 Mr L Given 9 7 No 7 2 No 6 3 No 3 1 Mr R Hines 9 9 Yes 7 7 Yes 6 6 Yes 3 3 Mr H Shiner 9 9 Yes 7 6 Yes 6 5 Yes 3 3 Mr A Spicer² 1 1 Yes - - Yes 1 1 No - - Ms S Thomas³ 3 3 Yes 2 2 Yes 6 2 Yes 1 1 Ms J Elliott⁴ 7 7 Yes 7 7 Yes 5 5 Yes 3 2 E: Number eligible to attend | A: Number attended | M: Member of Committee ¹ Mr M Ashby was appointed on 6 October 2023 ² Mr A Spicer was appointed on 22 May 2024 ³ Ms S Thomas resigned effective 30 September 2023 ⁴ Ms J Elliott resigned effective 22 May 2024 Non-audit services The Board of Directors are satisfied that the provision of non-audit services during the year by the auditor did not compromise the auditor independence requirements of the Corporations Act 2001, as the nature of the services was limited to income tax and indirect tax compliance, transaction/compliance related matters and generic accounting advice. All non-audit services have been reviewed and approved to ensure they do not impact the integrity and objectivity of the auditor, and none of the services undermine the general principles relating to auditor independence as set out in Code of Conduct APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards. Details of the amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in note 21 to the financial statements. Rounding of amounts The Company is a company of the kind referred to in ASIC Corporations (Rounding in Financials / Directors’ Reports) Instrument 2016/191, dated 24 March 2016, and in accordance with that Corporations Instrument, amounts in the Directors’ report and the financial statements are rounded off to the nearest thousand dollars, unless otherwise indicated. Auditor’s independence declaration The auditor’s independence declaration is included on page 49 Directors’ report 30 June 2024 Cash Converters International Limited 28 Remuneration Report (Audited) Letter from the Chair of the Governance, Remuneration and Nomination Committee Dear shareholders, On behalf of the Board, I am pleased to present the Cash Converters Limited (“Cash Converters”, or “the Company”) Remuneration Report (“Report”) for the Financial Year to 30 June 2024 (“FY2024”). FY2024 saw the Executive Team effectively deliver against defined strategic objectives. From a lending perspective and following the business response to the Financial Sector Reform Act in FY2023, the shift away from short-term small (SACC) loans progressed resulting in responsible growth across the medium (MACC) loans and Line of Credit (LOC) products. Across the network, the store acquisition strategy delivered earnings growth with franchise store acquisitions in Australia and the United Kingdom. Along with the development of a refreshed Vision, Purpose and Values framework in FY2024, Cash Converters’ saw strong results from the Employee Engagement Survey. This delivered 83% participation rates and a solid overall engagement score across key focus areas including connectedness to brand, team culture, wellness, career development, reward and recognition, communication and working environment. The team is committed to addressing feedback received in the survey to deliver ongoing improvements to the Employee Experience across the organisation. Looking forward, the Board and the Executive Team is confident that the strategy will deliver continued earnings growth and ongoing value to our customers and shareholders. Remuneration Outcomes for FY2024 In recognition of Cash Converters’ revised organisational structure designed to:  Continue growth in the existing business portfolio  Support expansion of corporate operations into both New Zealand and the United Kingdom through the strategic focus on acquiring franchise stores in core markets,  Navigate the increased complexity of varying and evolving regulatory frameworks. The Board considers it critical to ensure executives are appropriately remunerated to support attraction and retention. Within this context, reviews of, and appropriate amendments to Fixed remuneration and the short-term incentive plan were introduced. Fixed Remuneration An executive remuneration review was conducted assessing each incumbent against relevant external market comparators whilst considering the role impact on key areas. As a result, fixed remuneration increases were applied for executives ranging from approximately 5% to 15% to ensure appropriate alignment with the desired market relativity settings. Short-Term Incentive Changes to the short-term incentive (STI) were introduced in FY2024 to recognise individual performance, reward organisational financial outperformance whilst strengthening alignment with market practice. These changes included a revision of the key performance indicator (KPI) scorecard for each executive and a “stretch” profit gate. Directors’ report 30 June 2024 Cash Converters International Limited 29 Long-Term Incentive The FY2022 LTI award three-year performance period ended on 30 June 2024. As a result of performance testing undertaken in July 2024, the Board approved vesting of this award at 40.81%. This was based on the achievement of 81.62% for the relative TSR hurdle (weighted 50%) and 0% for the EPS hurdle (weighted 50%). For further details see Section 3: Executive remuneration strategy and components for FY2024 and Section 4: FY2024 Executive KMP remuneration outcomes. Non-Executive Director fees Board and Committee fees for Non-Executive Directors remained unchanged for FY2024. For further details see Section 5: Non-Executive Director. Looking forward With positive shareholder support we continue to review our remuneration programs to further align incentive programs with performance in an increasingly complex environment, improving remuneration disclosure and deliver against desired market practices. I invite you to review our Remuneration Report. We look forward to your ongoing feedback and continued discussions with our shareholders on our remuneration approach. Mark Ashby Non-executive Director and Chair of the Governance, Remuneration and Nomination Committee Directors’ report 30 June 2024 Cash Converters International Limited 30 Table of contents This Remuneration Report forms part of the Directors’ report for the year ended 30 June 2024 and has been prepared in accordance with section 300A of the Corporations Act 2001 (Cth) (“Act”), applicable regulations and the Company’s policies regarding Key Management Personnel (“KMP”) remuneration governance. The remuneration report has been audited as required by section 308(3C) of the Act. The Report contains the following main sections: 1 Who is covered in this Remuneration Report ......................................................................................... 30 2 Remuneration governance ...................................................................................................................... 31 3 Executive remuneration strategy and components for FY2024 .............................................................. 32 4 FY2024 Executive KMP remuneration outcomes .................................................................................... 39 5 FY2024 non-executive Director (NED) remuneration .............................................................................. 43 6 Statutory remuneration tables and supporting disclosures .................................................................... 45 1) Who is covered in this Remuneration Report For the purposes of this Report, KMP is defined as those persons who have authority and responsibility for planning, directing and controlling the major activities of the Company, including any Director (whether Executive KMP or Non- Executive Director (“NED”) of Cash Converters). The following were the KMP of the Company during the year ended 30 June 2024, and unless otherwise indicated, served as KMP for the entire period: Committee Membership Name Role Term as KMP ARC⁷ GRNC⁷ BIC⁷ ⁸ NED Timothy Jugmans Chairman and Non-Executive Director Full year Lachlan Given Non-Executive Director Full year Robert Hines Non-Executive Director Full year C  C Henry Shiner Non-Executive Director Full year    Mark Ashby Non-Executive Director Part year2  C  Andrew Spicer Non-Executive Director Part year3    Susan Thomas Non-Executive Director Part year4    Julie Elliott Non-Executive Director Part year1  PC  Executive Directors Sam Budiselik Chief Executive Officer (“CEO”) & Managing Director (“MD”) Full year Peter Cumins Executive Deputy Chairman Full year Executive KMP Lisa Stedman Chief Operating Officer (“COO”) Full year James Miles Chief Information Officer (“CIO”) Full year Jonty Gibbs Chief Financial Officer (“CFO”) Full year Luis San Martin Chief Risk Officer (“CRO”) Part year5 Andrew Kamp Chief of Strategy and Commercial Development (“CSCDO”) Part year6 1. Resigned as Director and Chair of the GRNC 22 May 2024. 2. Appointed 6 October 2023 and appointed Chair of the GRNC on 22 May 2024. 3. Appointed 22 May 2024 4. Resigned 30 September 2023 5. Appointed 1 March 2024 6. Appointed 7 August 2023 7. ARC = Audit & Risk Committee, GRNC = Governance, Remuneration & Nomination Committee, C = Chair of Committee,  = Member of Committee, PC = Previous Chair of Committee 8. BIC = Board Investment Committee. The BIC was dissolved on 1 April 2024 with responsibilities reverting to the full Board from that date. Directors’ report 30 June 2024 Cash Converters International Limited 31 2) Remuneration governance The following sets out the Company’s governance framework for remuneration setting and decision making, and responsibilities of various parties. Board The Board takes an active role in the governance and oversight of the Company’s KMP remuneration strategies and has overall responsibility for ensuring the effectiveness of remuneration arrangements. This is in consideration of remuneration outcomes that align with the Company’s strategic objectives and risk management framework, and shareholder value over the long term. Governance Remuneration and Nomination Committee (‘GRNC or the Committee’) The GRNC sets and reviews the remuneration framework, policies, delegations and practices on behalf of the Board. The Committee reviews remuneration strategy and levels annually, considering business context, remuneration guiding principles and external market conditions, and makes relevant recommendations to the Board on:  remuneration strategy to attract and retain talent to drive long term sustainable results;  recruitment, retention, and termination policies and procedures for KMP;  base salaries for KMP and Board and Committee fees for NEDs;  short term incentives for KMP;  equity-based incentive remuneration plans; and  governance matters including delegations, disclosures, conflicts of interest and independence. Note the performance review of the CEO&MD is undertaken by the Chairman of the Board and the Chairman of GRNC, reviewed by the GRNC, and approved by the Board. The performance reviews of KMP and other direct reports are undertaken by the CEO & MD, reviewed by the GRNC and approved by the Board. The Corporate Governance Statement and the GRNC Charter provide further information on the role of this Committee. These documents and related policies and practices are available on the Company website at https://www.cashconverters.com/governance. External Remuneration Advisors To ensure the Board and the GRNC are fully informed when making remuneration decisions, it may seek additional market insights and advice from external, independent remuneration consultants (as endorsed by the GRNC, and approved by the Board). During the year, the Committee engaged The Reward Practice Pty Ltd (“TRP”) to provide market insights and advice on various remuneration-related matters including remuneration and incentive review and remuneration report drafting. No remuneration recommendations were received during the year. Share Trading Policy The Company’s share trading policy prohibits KMP (who are granted equity-based payments as part of their remuneration) from:  dealing in any securities where the person dealing in the securities has inside information in relation to those securities;  passing on inside information to others who may deal in securities;  applying to participate in an Employee Share Plan while in possession of inside information; and  entering into contracts to hedge their exposure to any securities held in the Company. The Company’s Securities Trading Policy is available at https://www.cashconverters.com/governance. Directors’ report 30 June 2024 Cash Converters International Limited 32 3) Executive remuneration strategy and components for FY2024 3.1) Remuneration philosophy and principles The Company’s remuneration philosophy is to ensure that the alignment of remuneration structures and outcomes with the long-term success of the Company as indicated by the achievement of sustained growth in earnings and shareholder return, and adherence to sound risk management and governance principles. The remuneration design and decision making are guided by the following principles:  attract and retain talent to drive long term sustainable results;  align remuneration with customer and shareholder interests;  support an appropriate risk culture and exemplary employee conduct;  differentiate pay for behaviour and performance in line with our vision and strategy;  provide market competitive and fair remuneration;  remunerate responsibly and in a manner that promotes the Company’s commitment to building a diverse and inclusive workforce;  recognise the role of critical and non-financial generating roles in long term value creation;  enable recruitment and retention of talented employees; and  be simple, flexible and transparent. 3.2) Executive remuneration structure Remuneration strategy The Executive remuneration structure for FY2024 remains consistent with prior years and comprises fixed and variable remuneration (including short and long-term incentive opportunities). The following table provides an overview of the remuneration structure. Fixed Remuneration (FR) Short-Term Incentive (STI) Long-Term Incentive (LTI) Purpose Attract and retain high quality executives through market competitive and fair remuneration Ensure a portion of remuneration is variable, at-risk and linked to the delivery of agreed plan targets for financial and non-financial measures that support strategic priorities Align executive accountability and remuneration with the long-term interests of shareholders by rewarding the delivery of sustained Company performance over the long term Delivery Base salary, superannuation as per the Superannuation Guarantee (Administration) Act 1992. Awarded in cash based on an assessment of performance against a mix of individual KPIs over the preceding year subject to financial and risk-related gateways. Awarded in performance rights which potentially vest after three years, based on earnings per share (“EPS”) and total shareholder return (“TSR”) relative to a relevant peer group of ASX companies over a three-year performance period. Alignment to performance Set with reference to comparable industry market benchmarks as well as the size, responsibilities, and complexity of the role, and skills and experience. Individual performance impacts fixed remuneration adjustments Performance is assessed using a scorecard comprising financial and non-financial measures linked to the key strategic priorities for the performance year. If the Company under-performs on its earnings and / or risk targets, no short-term incentive Performance is assessed against EPS and TSR which are aligned to shareholder wealth creation over the long term. The Board believes this structure provides a balance between alignment of shareholder returns whilst mitigating the risk of excessive focus on share price performance. Directors’ report 30 June 2024 Cash Converters International Limited 33 28.6% 42.4% 28.6% 18.6% 42.8% 39.0% MD Other Executive KMP FY2024 remuneration mix (at target opportunity) Fixed Remuneration STI LTI CEO& award will be payable to Executive KMP. Under-performance over the longer- term may also result in no vesting of long-term incentive awards (e.g., performance rights). Approach to setting remuneration In FY2024, the executive remuneration framework consisted of fixed remuneration and short and long-term incentives as outlined above. The Company aims to reward executives with a level and mix of remuneration appropriate to their position, responsibilities and performance aligned with market practice. The Company’s policy is to position fixed remuneration (“FR”) around the median of our direct industry peers and other Australian listed companies of a similar size and complexity. Total remuneration opportunities (FR + STI + LTI) are intended to provide the opportunity to earn top quartile rewards for outstanding performance against the stretch targets set. Remuneration levels are considered annually through a remuneration review that considers market data, insights into remuneration trends, the performance of the Company and individual, and the broader economic environment. These factors are considered in relation to the complexities of the global business model and the specialised conditions and opportunities that the business must navigate. The following chart illustrates the mix of fixed and “at risk” remuneration for Executive KMP at target opportunity level for FY2024. Directors’ report 30 June 2024 Cash Converters International Limited 34 3.3) Executive KMP service agreements The remuneration and other terms of employment for executive KMP are formalised in their service agreements of an ongoing nature. All employees are entitled to receive pay in lieu of any accrued but untaken annual and long service leave on cessation of employment. However, amounts payable will be limited to the terms of Part 2D.2 of the Corporations Act 2001. A summary of contract terms is presented below: Name Position held at close of FY2024 Period of notice From Company From KMP Sam Budiselik Chief Executive Officer & Managing Director 12 months 12 months Peter Cumins Executive Deputy Chairman 12 months 6 months Lisa Stedman Chief Operating Officer 6 months 6 months James Miles Chief Information Officer 6 months 6 months Jonty Gibbs Chief Financial Officer 6 months 6 months Luis San Martin Chief Risk Officer 6 months 6 months Andrew Kamp Chief of Strategy & Commercial Development 6 months 6 months All KMP are employed by Cash Converters Pty Ltd, a 100% owned subsidiary of Cash Converters International Ltd. Chief Executive Officer (“CEO”) & Managing Director (“MD”) Mr Budiselik commenced as CEO on 26 February 2020 on a permanent basis with the termination notice periods as outlined above and was appointed, on the same remuneration terms, as CEO & MD on 18 December 2020. The MD receives fixed remuneration (including superannuation) of $727,399 per annum and participates in the STI and LTI plan outlined at the discretion of the Board with a target STI set as 100% of base salary (maximum 150%) and LTI opportunity set as 150% of base salary. In addition, Mr Budiselik also received non-monetary benefits of $36,900 in FY2024. Other Executive KMP Executive KMP participation in the incentive programs is at the discretion of the Board. The Executive Deputy Chairman did not participate in any incentive plans in FY2024. Sections 3.4 and 3.5 disclose the STI and LTI arrangements respectively for Executive KMP over FY2024. 3.4) FY2024 short term incentive (STI) plan A description of the STI structure applicable for FY2024 is set out below: What is the purpose? Ensure a portion of remuneration is variable, at-risk and linked to the delivery of agreed plan targets for financial and non-financial measures that support the Company’s strategic priorities over the year. How is it paid? Awarded in cash on completion of the external audit, approval by the GRNC and Board and subsequent release of the Annual Report. Directors’ report 30 June 2024 Cash Converters International Limited 35 Who are eligible to participate? Eligibility to participate in the STI is at the recommendation of the GRNC and approval of the Board. Over FY2024, Executive KMP and senior management are eligible for participating the STI. LTI’s issued to the Managing Director are subject to shareholder approval. What is the STI opportunity? The STI target opportunity is set as a percentage of fixed remuneration and is determined annually as part of the remuneration review process considering market practice of comparable companies to Cash Converters:  CEO & MD: target 100% (maximum: 150%)  Other Executive KMP: target 20-50% (maximum: 30-75%) What is the performance period? The financial year of the company (1 July 2023 – 30 June 2024). What is the gateway? A minimum gateway performance must be achieved before participants receive any award under the STI plan for the year. The gateway measures are set and reviewed by the Board annually. For FY2024 STI the measures include:  85% of budget Operating Earnings Before Interest and Taxes (“EBIT”); and  Risk gateway linked to global enterprise-wide risk register. How is performance assessed? STI payments are not guaranteed and are linked to the achievement of a mix of company and individual performance metrics as approved by the Board for the year. The KPIs set for FY2024 awards include Operating EBIT (Company Performance) and Individual Performance: Operating EBIT: as set and approved by the Board at the start of year*. *Note the Company reports EBIT calculated as earnings before interest expense and tax and EBITDA calculated as EBIT before depreciation and amortisation. EBIT and EBITDA are non-IFRS measures and are alternative performance measures reported in addition to but not as a substitute for the performance measures reported in accordance with IFRS. These measures focus directly on operating earnings and enhance comparability between periods. The non-IFRS measures calculated and disclosed have not been audited in accordance with Australian Accounting Standards although the calculation is compiled from financial information that has been audited. The EBIT is set at various performance levels resulting in different outcomes (as per the schedule below): Performance level (% of EBIT budget) STI Outcome * (% of Target Opportunity) 85% 50% 100% 100% 120% or above 150% * pro-rata applies between each level. Individual Performance: assessed via a balanced scorecard approach, with a mix of financial and non-financial KPIs as approved by the Board. KPIs vary depending on individual executive roles and responsibilities, and may be in relation to international business, strategy, funding, investors, new product development, risk management, and mergers/acquisitions. Executive performance against their scorecard is assessed via a five-point rating scale (1 to 5) with different ratings resulting in various STI outcomes. A minimum of 3 is required to receive any STI. Directors’ report 30 June 2024 Cash Converters International Limited 36 Subject to satisfaction of gateways, the individual STI award is determined based on the following multiplicative model: How is the STI award treated at cessation of employment? Unless the Board determines otherwise, if a participant’s employment with the Company is terminated during the performance period as a ‘good leaver’, they will be entitled to receive a pro-rata amount of their STI. If a participant’s employment with the Company is terminated in circumstances in which they are not considered a “good leaver” their STI will immediately lapse. How is the STI award treated upon a change of control? If a change of control event occurs with respect to the Company, the Board may determine, in its discretion, the manner in which all incentives will be dealt with. What is malus and clawback provision over STI awards? The Board may determine at its discretion to apply clawback and malus in some situations depending on the terms of the relevant award. Board discretion The Board reserves the right to amend, vary or revoke the terms of any incentive plan from time to time, at its sole and absolute discretion. 3.5) FY2024 long term incentive (LTI) plan A description of the LTI structure applicable for FY2024 is set out below: What is the purpose? Recognise ongoing participant contribution to the achievement by the Company of its long-term strategic goals, and to provide a means of attracting and retaining skilled and experienced employees. Align the interests of shareholders and executive KMP by motivating and rewarding participants to achieve compound annual earnings growth and produce strong shareholder returns over the medium- to long-term. How is it paid? The LTI award is made in the form of performance / indeterminate rights (rights) in accordance with the Cash Converters Rights Plan Rules (Plan Rules) which can reviewed online via (https://www.cashconverters.com/wp- content/uploads/2021/06/Cash-Converters-Rights-Plan-Rules.pdf). The Plan was approved by shareholders at the Annual General Meeting held on 26 October 2021. Subject to the achievement of performance conditions, performance rights may vest into shares or the Board, in their absolute and unfettered discretion, make a cash payment equivalent to the number of vested rights multiplied by the then value of the Company’s share price. Who are eligible to participate? Eligibility to participate in the LTI is at the recommendation of the GRNC and approval of the Board. For FY2024, Executive KMP and approved leadership team are eligible for participating in the LTI. STI outcome Individual Target Opportunity EBIT Outcome Individual KPI Outcome Directors’ report 30 June 2024 Cash Converters International Limited 37 What is the LTI opportunity? The LTI target opportunity is set as a percentage of fixed remuneration and is determined annually as part of the remuneration review process considering market practice of comparable companies to Cash Converters:  CEO & MD: up to 150% of fixed remuneration  Other Executive KMP: up to 100% of fixed remuneration What is the performance period? The FY2024 grant of performance rights is subject to performance conditions measured over a performance period of three years commencing 1 July 2023 and ending on 30 June 2026. How is performance assessed? The LTI is assessed based on the following hurdles over the performance period:  Relative Total Shareholder Return (TSR) (50%) assessing the Company’s TSR performance relative to constituents of the S&P/ASX Small Ordinaries Index excluding materials, utilities, and real estate investment trusts over the Performance Period (the Index); and  Normalised Earnings Per Share (EPS) (50%) measuring the profit generated by the Company attributable to each share on issue, adjusted for certain Board approved transactions. For each LTI hurdle, performance level is set at various target levels resulting in different vesting outcomes as per the schedules below: Relative TSR vesting schedule*: Performance Level Percentage of rTSR Rights Less than 50th percentile of Index** Nil Target: at 50th percentile of Index 50% Between 50th and 100th percentile of Index*** Straight line pro-rata vesting between 50% and 100% Stretch: at 100th percentile of Index 100% *The Relative TSR calculates the return shareholders would earn if they held a notional number of shares over a period and measures the change in the Company’s share price together with the value of dividends during the period, assuming that all those dividends are re-invested into new shares. **The Index is designed to measure companies included in the S&P/ASX300 but not in the S&P/ASX100. ***It is proposed that shareholder approval will be sought at the 2024 Annual General Meeting to correct an error in the documentation for the relative total shareholder return (“rTSR”) vesting schedule for the FY2023 and FY2024 LTI awards, so that 100% vesting of any performance rights subject to the rTSR measure will occur if the Company achieves an outcome at or above the 75th percentile of the comparator group (rather than 100th percentile of the comparator group). Further information will be included in the 2024 Annual General Meeting Notice of Meeting. Directors’ report 30 June 2024 Cash Converters International Limited 38 EPS (cents per share) vesting schedule*: Performance Level** Percentage of Rights that vest (%) Less than 3.450 Nil Threshold: 3.450 25% 3.450 to 3.700 Straight line pro-rata vesting between 25% and 50% Target: 3.700 50% 3.700 to 4.260 Straight line pro-rata vesting between 50% and 100% Stretch: 4.260 100% *For the purposes of assessing performance against the EPS target, the Board will consider whether any adjustments to statutory earnings are appropriate on a case-by-case basis to ensure that inappropriate outcomes are avoided. The EPS hurdle was set by calculating a required range of the Company’s EPS. **While the Board has set the EPS targets at a level that it considers would reflect performance levels that align with appropriate returns to shareholders, these are targets only and are not forecasts of future results and should not be considered or treated as guidance. Calculation of the achievement against the performance conditions will be determined by the Board of the Company in its absolute discretion at the conclusion of the performance period, having regard to any matters that it considers relevant. In line with the Plan rules, unless otherwise determined by the Board, the performance rights will lapse, where the vesting conditions applicable to the award cannot be satisfied as at the end of the performance period. How is the LTI award treated at cessation of employment? For all participants, termination of employment will trigger a forfeiture of all unvested awards except under certain limited circumstances defined in the Plan Rules (e.g., good leavers). Amounts that are not forfeited will be tested and potentially awarded or paid based on actual performance relative to the performance goals, following the end of the performance period. The Board retains discretion to trigger or accelerate payment or vesting of incentives, provided that the limitations on termination benefits as outlined in the Corporations Act 2001 are not breached. How is the LTI award treated upon a change of control? If a change of control event occurs with respect to the Company, the Board may determine, in its discretion, the manner in which all incentives will be dealt with. What is Malus and clawback provision over LTI awards? The Board may determine at its discretion to apply clawback and malus in some situations depending on the terms of the relevant award. Board discretion The Board also retains overall discretion to determine whether vesting of performance rights is appropriate considering, a number of other relevant factors including company performance from the perspective of Shareholders. Directors’ report 30 June 2024 Cash Converters International Limited 39 4) FY2024 Executive KMP remuneration outcomes 4.1) Company performance over the past five years As outlined above, in setting the Company’s remuneration strategy, the GRNC makes recommendations which demonstrate clear and strong correlation between performance and reward and align the interests of executive KMP with those of the Company’s shareholders. The following table shows the statutory key performance indicators of the Group over the last five years: Company performance over the past five years FY2024 FY2023 FY2022 FY2021 FY2020 $’000 $’000 $’000 $’000 $’000 Revenue from continuing operations 382,563 302,697 245,937 201,346 262,021 Net profit /(loss) before tax from continuing operations 26,864 (91,019) 15,385 21,454 (22,416) Net profit /(loss) after tax - continuing operations 17,397 (97,155) 11,177 20,704 (16,872) - discontinued operations - - - - - Profit /(Loss) after tax 17,397 (97,155) 11,177 20,704 (16,872) Share price Cents Cents Cents Cents Cents - beginning of year 22.5 23.0 22.0 17.5 16.0 - end of year 22.0 22.5 23.0 22.0 17.5 Change in share price (0.5) (0.5) 1.0 4.5 1.5 Fully franked dividend Cents Cents Cents Cents Cents - interim 1.0 1.0 1.0 1.0 - - final dividend 1.0 1.0 1.0 1.0 - Change in Shareholder Wealth - share price change + dividend 1.5 1.5 3.0 6.5 1.5 Earnings /(losses) per share from continuing and discontinued operations Cents Cents Cents Cents Cents - basic 2.78 (15.54) 1.80 3.35 (2.74) In considering the STI and LTI awards for FY2024, the Board has in addition to the profitability performance and positive risk culture, been cognisant of the continuing challenging economic environment and complex international regulatory regimes. Consistent with performance incentives awarded across the broader business the Board has recognised executive performance and the delivery of operating earnings growth. The awards continue to reflect the need to attract and retain the team in a period of tight labour markets and ongoing regulatory scrutiny. The following disclosures (Sections 4.2 and 4.3) are intended to assist in demonstrating the link between Cash Converters’ strategy, performance and executive KMP STI and LTI awards for the FY2024 period. Directors’ report 30 June 2024 Cash Converters International Limited 40 4.2) FY2024 STI outcomes Gateway performance An STI payment will only be payable to the extent the overarching EBIT and risk gateways are satisfied. The following outlines the outcomes in relation to the measures. Gateway Actual outcome Operating EBIT meeting 85% of budget $52.76m (122% of budget) Delivery of a global enterprise-wide risk register by 30 June 2024 Met Both STI gateways were satisfied In accordance with the FY2024 STI assessment approach, the achievement of 122% of EBIT budget resulted in a 150% of STI pool opportunity subject to Executive scorecard performance. With the satisfaction of STI gateways, the awarding of STI’s to Executive KMP is determined based on an assessment of their FY2024 performance scorecard as set at the commencement of the financial year. CEO & MD scorecard KPIs The following sets out the STI scorecard for CEO & MD. Scorecard KPI and weighting Performance outcomes Further details International (25%) Develop a strategic plan and execute acquisition opportunities to establish an International Board and Governance framework. The International strategic plan was well developed and executed with acquisitions successfully identified and executed. Budgets were exceeded and a management team established to capitalise on future investment opportunities. Strategy (40%) Continue to drive the delivery of the Strategic Plan by sourcing and evaluating opportunities within Australia. Strategic plan has been developed and endorsed by the Board, strategic objectives delivered, and budget exceeded. Funding (25%) Review of securitisation facility funding options with a view to finding an improved securitisation facility. Progressed detailed due diligence with funders by engaging an Advisor to seek expressions of interest. Ensured new product growth funded and overall support for growth of loan books achieved with better pricing and flexibility going forward. Investors (10%) Deliver on shareholder strategy, to engage a wide range of potential shareholders throughout the course of the year. Shareholder engagement demonstratable, with conferences and results briefing calls delivered and a significant change in register composition well managed. Resulting STI payout (individual scorecard component): 98% Target Target Target Target Directors’ report 30 June 2024 Cash Converters International Limited 41 STI outcomes by Executive KMP The following outlines the assessment outcomes by Executive KMP: Overall STI outcomes for FY2024 are determined through the Board’s assessment of actual performance against expectations, as outlined below. Executive STI Opportunity (as % of Base Salary) STI Outcome (% of STI Target) STI Awarded ($) % Maximum STI Maximum (at 150% of Target) Target Company EBIT Individual Scorecard Total Awarded % Forfeited % Sam Budiselik 150% 100% 150% 98% 147.0% $1,029,000 147.0% 3.0% Lisa Stedman 75% 50% 150% 97% 145.5% $327,375 145.5% 4.5% James Miles 75% 50% 150% 97% 145.5% $291,000 145.5% 4.5% Jonty Gibbs 75% 50% 150% 97% 145.5% $240,075 145.5% 4.5% Andrew Kamp 1 75% 50% 150% 97% 145.5% $218,250 145.5% 4.5% Luis San Martin 1,2 20% 20% N/A 100% $20,000 100% 0% 1 Total STI awarded for Mr Andrew Kamp and Mr Luis San Martin has been pro-rated to reflect their period of service within the role for FY2024. 2 Mr Luis San Martin was appointed KMP in March 2024 and did not participate the “stretch” STI programme in FY2024. 4.3) LTI vesting outcomes (FY2022 LTI grants) LTI performance Following the assessment of relevant performance hurdles for the FY2022 LTI grants over the three years ended 30 June 2024, the Board approved a total of 40.81% vesting for Executive KMP in accordance with Plan Rules. The following outlines the assessment outcomes for the FY2022 grants. FY22 LTI Performance Hurdles and Outcomes KPI Weighting Performance Outcomes LTI Outcomes Relative TSR (against the S&P/ASX Small Ordinaries index excluding materials, utilities, and REITs) 50% 81.62% achieved (66th percentile) 40.81% EPS 50% 0% achieved 0% LTI performance outcome: 40.81% 50th Percentile (50%) 3.291 3.872 4.453 75th Percentile (100%) Directors’ report 30 June 2024 Cash Converters International Limited 42 LTI outcomes by Executive KMP The following table provides a summary of the Company’s performance and vesting outcomes for each of the Executive KMP. Incumbent Sam Budiselik Lisa Stedman James Miles Jonty Gibbs Role Chief Executive Officer & Managing Director Chief Operating Officer Chief Information Officer Chief Financial Officer Tranche 31 32 31 32 31 32 31 32 Weighting 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% Vesting Condition TSR EPS TSR EPS TSR EPS TSR EPS Number Eligible to Vest¹ 1,628,289 1,628,289 620,301 620,301 563,910 563,910 75,188 75,188 % of Tranche Vested 81.6% 0.0% 81.6% 0.0% 81.6% 0.0% 81.6% 0.0% Number Vested 1,329,009 - 506,290 - 460,263 - 61,368 - Grant Date Valuation² 0.162 0.213 0.162 0.213 0.162 0.213 0.162 0.213 Value of LTI that Vest³ $215,432 - $82,070 - $74,609 - $9,948 - 1 Number eligible to vest following FY2024 Completion. 2 Grant Date Valuation is determined by the application of AASB 2 Share-based payment and the share price at the time of grant. ³ Value of LTI that vest as per Grant Date Valuation. Directors’ report 30 June 2024 Cash Converters International Limited 43 5) FY2024 non-executive Director (“NED”) remuneration On appointment to the Board, all NEDs enter into a service agreement with the Company in the form of a letter of appointment. The letter summarises the Board policies and terms, including remuneration relevant to the office of the Director and does not include a notice period. 5.1) NED policy fees The Company’s NED fee policy is designed to support the attraction, retention and engagement of the high calibre of NED required for it to meet its strategic objectives and in accordance with the Boards skills matrix. The Board is responsible to ensure the NED fee arrangements are reasonable and appropriate producing outcomes that fall within the fee limit, at each point of being assessed. The following outlines the elements of the NED fee policy applicable for FY2024: There has been no change to the NED or Board fees in FY2024 and the following outlines the Board fees applicable at the end of FY2024: Committee fee Role/Function Base fee ARC1 GRNC1 BIC1,2 Chair $170,000 $15,000 $15,000 $15,000 Member $95,000 $5,000 $5,000 $5,000 1 ARC = Audit & Risk Committee, GRNC = Governance, Remuneration & Nomination Committee, BIC = Board Investment Committee 2. The BIC was disbanded on 1 April 2024 with responsibilities reverting to the full Board from that date. All fees are inclusive of any applicable superannuation. Feel pool NED fees are managed within the current Annual Fees Limit (“AFL” or “fee pool”) of $1,000,000 which was approved by shareholders on 25 October 2022. Actual fees (inclusive of superannuation) paid to NEDs for FY2024 was $725,146 (FY2023: $735,000). Other arrangements NEDs may be entitled to fees or other amounts, as the Board determines, where they perform duties outside the scope of the ordinary duties of a Director. They may also be reimbursed for out-of-pocket expenses incurred. NEDs do not participate in, or receive, any performance-based remuneration as part of their role and do not participate in any equity plans that operate within the Company, in order to support their independence and impartiality. NEDs are not eligible to receive termination payments under the terms of the appointments. Directors’ report 30 June 2024 Cash Converters International Limited 44 5.2) NED statutory remuneration for FY2024 The following table outlines the statutory and audited remuneration of NEDs: Name Year Board Fees Super Total $ $ $ Timothy Jugmans FY2024 169,223 777 170,000 FY2023 169,522 478 170,000 Lachlan Given FY2024 94,899 101 95,000 FY2023 95,000 - 95,000 Robert Hines FY2024 113,739 12,511 126,250 FY2023 117,647 12,353 130,000 Henry Shiner FY2024 97,973 10,777 108,750 FY2023 99,547 10,453 110,000 Mark Ashby 1 FY2024 72,274 7,950 80,224 FY2023 - - - Andrew Spicer 2 FY2024 9,589 1,055 10,644 FY2023 - - - Susan Thomas 3 FY2024 24,775 2,725 27,500 FY2023 99,547 10,453 110,000 Julie Elliott 4 FY2024 96,196 10,582 106,778 FY2023 108,597 11,403 120,000 Total FY2024 678,668 46,478 725,146 FY2023 689,860 45,140 735,000 1 Appointed 6 October 2023 2 Appointed 22 May 2024 3 Resigned 30 September 2023 4 Resigned 22 May 2024 Directors’ report 30 June 2024 Cash Converters International Limited 45 6) Statutory remuneration tables and supporting disclosures 6.1) Executive KMP statutory remuneration for FY2024 The following table outlines the statutory remuneration of Executive KMP: Name Year Salary Non-monetary benefits Super Other long- term benefits Termination benefits Cash STI LTI Total Remuneration Package (TRP) Variable Remuneration as % of TRP $ $ $ $ $ $ $ $ Sam Budiselik FY2024 701,973 36,900 27,399 33,743 - 1,029,000 268,252 2,097,267 62% FY2023 613,908 27,975 25,292 21,189 - 605,000 362,221 1,655,585 58% Peter Cumins FY2024 454,654 10,560 27,399 8,943 - - - 501,556 0% FY2023 415,958 10,365 25,292 8,372 - - - 459,987 0% Lisa Stedman FY2024 462,039 28,714 27,399 1,521 - 327,375 116,948 963,996 46% FY2023 394,548 27,754 25,292 - - 195,000 120,914 763,508 41% James Miles FY2024 403,865 29,542 27,399 8,154 - 291,000 105,861 865,821 46% FY2023 357,703 27,975 25,292 1,018 - 180,000 113,498 705,486 42% Jonty Gibbs 1 FY2024 338,797 22,581 27,399 962 - 240,075 59,393 689,207 43% FY2023 160,688 5,451 12,646 - - 76,875 5,678 261,338 32% Andrew Kamp 2 FY2024 271,235 10,083 25,176 - - 218,250 41,794 566,538 46% FY2023 - - - - - - - - 0% Luis San Martin 3 FY2024 113,137 3,576 10,632 820 - 20,000 9,041 157,206 18% FY2023 - - - - - - - - 0% Total FY2024 2,745,700 141,956 172,803 54,143 - 2,125,700 601,289 5,841,591 47% FY2023 1,942,805 99,520 113,814 30,579 - 1,056,875 602,311 3,845,904 43% 1 Appointed Interim Chief Financial Officer from 1 January 2023 and appointed Chief Financial Officer from 1 April 2023 2 Appointed 7 August 2023 3 Appointed 1 March 2024 Notes: The cash STI values reported in the above table include the STIs awarded for the performance period, which will be paid in the financial year following the year to which they relate (i.e. the value shown for FY2024 is the value earned and accrued for in FY2024 and will be paid during FY2025). The LTI value reported in the table above is the accounting charge of all grants, recognised over the vesting period. Where a market-based measure of performance is used as a vesting condition, such as comparison to a TSR index, no adjustments can be made to the profit or loss to reflect rights that lapse unexercised due to measurement conditions not having been met. However, in relation to non-market vesting conditions, such as EPS, adjustments have been made to the profit or loss to reverse amounts previously expensed for rights that have lapsed during the period due to not meeting measurement conditions. Variances in the accounting charge reported arise where a lapse or performance rights occurs in one reporting period but not another. In additional each reporting period accounting charge considers the probability of future vesting of grants held by participants. Where the probability is below 100% in one period this results in a reduced accounting charge which may be subsequently required to be caught up in subsequent periods where the probability rises due to an improved performance outlook. Directors’ report 30 June 2024 Cash Converters International Limited 46 6.2) KMP equity interests and changes during FY2024 Movements in equity interests held by executive KMP during the reporting period, including their related parties, are set out below: Opening Balance Granted Rights Lapsed / Forfeited Rights Vested / Exercised Ending Balance Name Year Number Date Granted Number Number 3 Number 1 4 Number Sam Budiselik FY2024 11,485,472 23-Nov-23 4,729,730 (1,153,339) (3,460,017) 11,601,846 FY2023 13,249,032 25-Oct-22 3,615,538 - (5,379,098) 11,485,472 Lisa Stedman FY2024 3,848,869 08-Nov-23 2,027,028 (263,620) (790,862) 4,821,415 FY2023 2,295,084 04-Oct-22 1,553,785 - - 3,848,869 James Miles FY2024 3,616,565 08-Nov-23 1,801,802 (263,620) (790,862) 4,363,885 FY2023 2,182,302 04-Oct-22 1,434,263 - - 3,616,565 Jonty Gibbs 2 FY2024 522,009 08-Nov-23 1,486,486 - - 2,008,495 FY2023 522,009 - - - 522,009 Andrew Kamp 2 FY2024 - 08-Nov-23 1,351,352 - - 1,351,352 FY2023 - - - - - Luis San Martin 2 FY2024 628,051 - - - 628,051 FY2023 - - - - - Total FY2024 20,100,966 11,396,398 (1,680,579) (5,041,741) 24,775,044 FY2023 18,248,427 6,603,586 - (5,379,098) 19,472,915 1 A total of 5,379,098 performance rights granted to Mr Budiselik in FY2020 vested and were exercised on 6 September 2022. 2 Opening balance at date of becoming KMP 3 A total of 1,680,579 performance rights issued in FY2021 did not vest and subsequently lapsed on 1 September 2023 4 A total of 5,041,741 performance rights issued in FY2021 vested and were exercised on 1 September 2023. Directors’ report 30 June 2024 Cash Converters International Limited 47 Terms and conditions of share-based payment arrangements affecting remuneration of KMP in the current or future financial years are set out below: Tranche Grant date Grant date fair value 1 Exercise price Measurement date Expiry date $ $ Tranche 31 26-Oct-21 0.162 - 30-Jun-24 30-Sep-24 Tranche 32 26-Oct-21 0.213 - 30-Jun-24 30-Sep-24 Tranche 33 04-Oct-22 0.119 - 30-Jun-25 30-Sep-25 Tranche 34 04-Oct-22 0.170 - 30-Jun-25 30-Sep-25 Tranche 35 25-Oct-22 0.127 - 30-Jun-25 30-Sep-25 Tranche 36 25-Oct-22 0.180 - 30-Jun-25 30-Sep-25 Tranche 37 08-Nov-23 0.092 - 30-Jun-26 30-Sep-26 Tranche 38 08-Nov-23 0.162 - 30-Jun-26 30-Sep-26 Tranche 39 23-Nov-23 0.085 - 30-Jun-26 30-Sep-26 Tranche 40 23-Nov-23 0.155 - 30-Jun-26 30-Sep-26 1 The grant date fair value is calculated as at the grant date using a Monte Carlo pricing model for tranches 31, 33, 35, 37 and 39 and tranches 32, 34, 36, 38 and 40 use a trinomial model. There has been no alteration of the terms and conditions of the above share-based payment arrangements since the grant date. Fully paid ordinary shares of Cash Converters International Limited Balance at 1 July 2023 Granted as remuneration Rights exercised1 Other changes during the year Balance at 30 June 2024 Nominally held 30 June 2024 Number Number Number Number Number Number Directors Timothy Jugmans - - - - - - Lachlan Given - - - - - - Robert Hines 822,000 - - - 822,000 822,000 Henry Shiner - - - - - - Mark Ashby - - - - - - Andrew Spicer - - - - - - Susan Thomas 613,985 - - (613,985) - - Julie Elliot 61,379 - - (61,379) - - Sam Budiselik 5,627,473 - 3,460,017 - 9,087,490 1,568,375 Peter Cumins 9,810,694 - - 500,000 10,310,694 6,937,226 16,935,531 - 3,460,017 (175,364) 20,220,184 9,327,601 Executive KMP Lisa Stedman - - 790,862 - 790,862 - James Miles - - 790,862 (347,979) 442,883 - Jonty Gibbs 10,000 - - - 10,000 - Luis San Martin - - - - - - Andrew Kamp - - - - - - 10,000 - 1,581,724 (347,979) 1,243,745 - Total 16,945,531 - 5,041,741 (523,343) 21,463,929 9,327,601 1 A total of 5,041,741 of performance rights granted to KMP in FY 2021 vested and exercised on the 1 September 2023. Directors’ report 30 June 2024 Cash Converters International Limited 48 The following outlines the accounting values and potential future costs of equity remuneration granted during FY2024 for Executive KMP: Name Tranche 3 Number of rights Grant Date Value per right $ Total Value at Grant $ Value expensed in FY2024 Value to be expensed in future years Sam Budiselik 39 (TSR) 2,364,865 23-Nov-23 0.085 201,014 46,551 154,463 40 (EPS) 2,364,865 23-Nov-23 0.155 366,554 84,886 281,668 Lisa 37 (TSR) 1,013,514 08-Nov-23 0.092 93,243 22,707 70,536 Stedman 38 (EPS) 1,013,514 08-Nov-23 0.162 164,189 39,984 124,205 James Miles 37 (TSR) 900,901 08-Nov-23 0.092 82,883 20,184 62,699 38 (EPS) 900,901 08-Nov-23 0.162 145,946 35,541 110,405 Jonty Gibbs 37 (TSR) 743,243 08-Nov-23 0.092 68,378 16,652 51,726 38 (EPS) 743,243 08-Nov-23 0.162 120,405 29,321 91,084 Andrew Kamp 1 37 (TSR) 675,676 08-Nov-23 0.092 62,162 15,138 47,024 38 (EPS) 675,676 08-Nov-23 0.162 109,460 26,656 82,804 Luis San Martin 2 37 (TSR) 169,703 08-Nov-23 0.092 15,613 3,802 11,811 38 (EPS) 169,703 08-Nov-23 0.162 27,492 6,695 20,797 Total 11,735,804 1,457,339 348,117 1,109,222 1 Appointed 7 August 2023 2 A total of 339,406 rights were issued to Mr San Martin in FY2024 prior to his appointment as KMP. 3 TSR: vesting conditions based on Relative Total Shareholder Return, EPS: vesting conditions based on Normalised Earnings Per Share The minimum value to be expensed in future years for each of the above grants made in FY2024 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 nonmarket-based conditions including failure for gate to open. 6.3) Other statutory disclosures 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 of 30 June 2024 (FY2023: nil). Other transactions with KMP During the financial year and to the date of this report, the Company made no other transactions with KMP. This Directors’ report is signed in accordance with a resolution of Directors made pursuant to s298(2) of the Corporations Act 2001. On behalf of the Directors Sam Budiselik Chief Executive Officer & Managing Director Perth, Western Australia 29 August 2024 Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Asia Pacific Limited and the Deloitte organisation. Dear Directors Auditor’s Independence Declaration to Cash Converters International Limited In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Cash Converters International Limited. As lead audit partner for the audit of the financial statements of Cash Converters International Limited for the financial year ended 30 June 2024, I declare that to the best of my knowledge and belief, there have been no contraventions of: (i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (ii) any applicable code of professional conduct in relation to the audit. Yours sincerely DELOITTE TOUCHE TOHMATSU Peter Rupp Partner Chartered Accountants Deloitte Touche Tohmatsu ABN 74 490 121 060 477 Collins Street Melbourne, VIC, 3000 Australia Tel: +61 3 9671 7000 Fax: +61 3 9671 7001 www.deloitte.com.au The Board of Directors Cash Converters International Limited Level 11, 141 St Georges Terrace Perth WA 6000 29 August 2024 49 Corporate governance statement 30 June 2024 Cash Converters International Limited 50 Corporate governance statement The statement outlining Cash Converters International Limited’s corporate governance framework and practices in the form of a report against the Australian Securities Exchange Corporate Governance Principles and Recommendations, 4th Edition, is available on the website, https://www.cashconverters.com/governance, under Corporate Governance in accordance with ASX Listing Rule 4.10.3. Financial statements 30 June 2024 Cash Converters International Limited 51 Cash Converters International Limited ABN 39 069 141 546 Annual Financial Report - 30 June 2024 Financial statements Contents Consolidated statement of profit or loss and other comprehensive income ....................................................... 52 Consolidated statement of financial position ....................................................................................................... 53 Consolidated statement of changes in equity ...................................................................................................... 54 Consolidated statement of cash flows ................................................................................................................. 55 Notes to the financial statements ........................................................................................................................ 56 Consolidated Entity Disclosure Statement ......................................................................................................... 123 Directors’ declaration ......................................................................................................................................... 125 These financial statements are consolidated financial statements for the group consisting of Cash Converters International Limited and its subsidiaries. A list of major subsidiaries is included in note 15. The financial statements are presented in the Australian currency. Cash Converters International Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is: Cash Converters International Limited Level 11, 141 St Georges Terrace Perth, Western Australia 6000 The financial statements were authorised for issue by the Directors on 29 August 2024. The Directors have the power to amend and reissue the financial statements. All press releases, financial reports and other information are available at our Investor Centre on our website: https://www.cashconverters.com/ Consolidated statement of profit or loss and other comprehensive income 30 June 2024 Cash Converters International Limited 52 Consolidated statement of profit or loss and other comprehensive income Notes 30-Jun-24 30-Jun-23 $’000 $’000 Continuing operations Franchise fee revenue 16,185 16,289 Financial services interest revenue 201,833 184,847 Retail sales 155,252 96,707 Other revenues 9,293 4,854 Total revenue 3 382,563 302,697 Financial services cost of sales 4 (53,670) (56,913) Cost of goods sold (90,845) (55,894) Other cost of sales (5,163) (3,002) Total cost of sales (149,678) (115,809) Gross profit 232,885 186,888 Employee expenses 4 (118,930) (93,565) Administrative expenses 4 (13,170) (11,200) Advertising expenses (11,828) (12,355) Occupancy expenses 4 (6,175) (3,094) Depreciation and amortisation expense 4 (16,396) (12,432) Other expenses 4 (13,779) (12,359) Finance costs 4 (22,448) (16,000) Impairment of goodwill 5 (3,295) (110,481) Impairment non-current assets 5 - (6,672) Share of net profit of equity accounted investments - 251 Profit / (loss) before income tax 26,864 (91,019) Income tax expense 6 (9,467) (6,136) Profit / (loss) for the year 17,397 (97,155) Other comprehensive income Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations (134) 1,591 Total comprehensive profit / (loss) for the year 17,263 (95,564) Profit / (loss) per share Basic (cents per share) 22(a) 2.78 (15.54) Diluted (cents per share) 22(a) 2.65 (15.54) The accompanying notes form an integral part of the consolidated statement of profit or loss and other comprehensive income. Consolidated statement of financial position 30 June 2024 Cash Converters International Limited 53 Consolidated statement of financial position Notes 30-Jun-24 30-Jun-23 $’000 $’000 Current assets Cash and cash equivalents 7.a 56,289 71,565 Trade and other receivables 7.b 4,652 3,570 Loan receivables 7.c 180,549 182,069 Inventories 8.a 33,036 26,493 Prepayments 3,948 2,544 Total current assets 278,474 286,241 Non-current assets Trade and other receivables 7.b 9,329 6,649 Loan receivables 7.c 58,163 42,660 Property, plant and equipment 8.b 10,722 6,582 Right-of-use assets 8.c 56,930 47,046 Deferred tax assets 8.f 31,299 29,669 Goodwill 5, 8.d 7,950 3,279 Other intangible assets 8.e 25,171 20,543 Total non-current assets 199,564 156,428 Total assets 478,038 442,669 Current liabilities Trade and other payables 7.d 27,249 18,984 Lease liabilities 8.c 8,541 7,276 Current tax payable 3,920 338 Borrowings 7.e 103,960 109,044 Provisions 8.g 11,987 11,780 Total current liabilities 155,657 147,422 Non-current liabilities Lease liabilities 8.c 62,448 56,466 Borrowings 7.e 40,125 27,947 Provisions 8.g 8,442 4,340 Total non-current liabilities 111,015 88,753 Total liabilities 266,672 236,175 Net assets 211,366 206,494 Equity Issued capital 9 250,541 249,860 Reserves 9,179 9,806 Retained loss (48,354) (53,172) Total equity 211,366 206,494 The accompanying notes form an integral part of the consolidated statement of financial position. Consolidated statement of changes in equity 30 June 2024 Cash Converters International Limited 54 Consolidated statement of changes in equity Notes Issued capital Foreign currency translation reserve Share- based payment reserve Retained (loss) / earnings Total $’000 $’000 $’000 $’000 $’000 Balance at 1 July 2022 249,663 5,938 2,495 57,256 315,352 Loss for the year - - - (97,155) (97,155) Exchange differences arising on translation of foreign operations - 1,591 - - 1,591 Total comprehensive loss for the year - 1,591 - (97,155) (95,564) Share-based payments - - 807 - 807 Treasury shares acquired by employee share trust 9 (1,353) - - - (1,353) Treasury shares issued by employee share trust 9 1,550 - (1,550) - - Transfer reserve balance to retained earnings - - 723 (723) - Transfer of modified awards to provisions 8.g - - (198) - (198) Dividends paid 13.b - - - (12,550) (12,550) Balance at 30 June 2023 249,860 7,529 2,277 (53,172) 206,494 Balance at 1 July 2023 249,860 7,529 2,277 (53,172) 206,494 Profit for the year - - - 17,397 17,397 Exchange differences arising on translation of foreign operations - (134) - - (134) Total comprehensive profit for the year - (134) - 17,397 17,263 Share-based payments - - 831 - 831 Treasury shares acquired by employee share trust 9 (672) - - - (672) Treasury shares issued by employee share trust 9 1,353 - (1,353) - - Transfer reserve balance to retained earnings - - 29 (29) - Dividends paid 13.b - - - (12,550) (12,550) Balance at 30 June 2024 250,541 7,395 1,784 (48,354) 211,366 The accompanying notes form an integral part of the consolidated statement of changes in equity. Consolidated statement of cash flows 30 June 2024 Cash Converters International Limited 55 Consolidated statement of cash flows Notes 30-Jun-24 30-Jun-23 $’000 $’000 Cash flows from operating activities Receipts from customers 286,738 201,412 Payments to suppliers and employees (253,807) (189,805) Interest received 1,375 858 Interest received from personal loans 79,878 85,428 Net increase in personal loans advanced (44,107) (82,632) Interest and costs of finance paid (22,142) (15,856) Income tax paid (9,482) (10,941) Net cash flows from / (used in) operating activities 10.a 38,453 (11,536) Cash flows from investing activities Payment for business combinations, net of cash acquired 14.b (24,345) (13,798) Acquisition of intangible assets (1,874) (1,505) Purchase of plant and equipment (4,586) (2,971) Instalment credit loans repaid by franchisees 30 325 Loan funding to external parties (2,282) (4,679) Net cash flows used in investing activities (33,057) (22,628) Cash flows from financing activities Proceeds from borrowings 202,250 222,750 Repayment of borrowings (200,500) (154,750) Repayment of lease liabilities (9,194) (7,085) Dividends paid 13.b (12,550) (12,550) Employee share trust funding 9 (672) (1,353) Net cash flows (used in) / from financing activities (20,666) 47,012 Net (decrease) / increase in cash and cash equivalents (15,270) 12,848 Cash and cash equivalents at the beginning of the year 71,565 58,085 Effects of exchange rate changes on the balance of cash held in foreign currencies (6) 632 Cash and cash equivalents at the end of the year 7.a 56,289 71,565 The accompanying notes form an integral part of the consolidated statement of cash flows. Notes to the financial statements 30 June 2024 Cash Converters International Limited 56 Notes to the financial statements Contents 1. Basis of preparation ................................................................................................................................. 57 2. Segment information ............................................................................................................................... 58 3. Revenue ................................................................................................................................................... 62 4. Expense items .......................................................................................................................................... 63 5. Impairment of non-current assets ........................................................................................................... 65 6. Income tax ............................................................................................................................................... 71 7. Financial assets and financial liabilities ................................................................................................... 73 8. Non-financial assets and liabilities .......................................................................................................... 86 9. Issued capital ........................................................................................................................................... 95 10. Cash flow information ............................................................................................................................. 96 11. Critical estimates and judgements .......................................................................................................... 98 12. Financial risk management ...................................................................................................................... 99 13. Capital management ............................................................................................................................. 103 14. Business combination ............................................................................................................................ 104 15. Interests in other entities ...................................................................................................................... 107 16. Contingent liabilities .............................................................................................................................. 110 17. Commitments ........................................................................................................................................ 111 18. Events occurring after the reporting period .......................................................................................... 111 19. Related party transactions .................................................................................................................... 112 20. Share-based payments .......................................................................................................................... 113 21. Remuneration of auditors ..................................................................................................................... 116 22. Earnings / (loss) per share ..................................................................................................................... 116 23. Assets pledged as security ..................................................................................................................... 116 24. Parent entity financial information ....................................................................................................... 117 25. Summary of other material accounting policies .................................................................................... 118 Notes to the financial statements 30 June 2024 Cash Converters International Limited 57 1. Basis of preparation Cash Converters International Limited is a for-profit company limited by shares, incorporated and domiciled in Australia. Its shares are publicly traded on the Australian Securities Exchange. The financial report of Cash Converters International Limited (the “Company”) for the year ended 30 June 2024 was authorised for issue in accordance with a resolution of Directors dated 29 August 2024. The financial report comprises the consolidated financial report of Cash Converters International Limited and its subsidiaries (the “Group”, as outlined in note 15). The financial report complies with Australian Accounting Standards. Compliance with the Australian Accounting Standards ensures that the financial statements and notes of the Group comply with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). The financial report is a general-purpose financial report which has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board. The financial report has been prepared on a historical cost basis, except where noted. The financial report is presented in Australian dollars. Certain classifications on the consolidated statement of comprehensive income, consolidated balance sheet, consolidated statement of changes in equity, consolidated statement of cash flows and notes to the consolidated financial statements have been reclassified. The Group believes that this will provide more relevant information to stakeholders. The comparative information has been reclassified accordingly. The accounting policies adopted are consistent with those of previous financial years and the corresponding interim reporting period, except where changes are called out in these accounts. The financial statements have been prepared on a going concern basis. 1.a) New and amended standards adopted by the Group The Group has adopted all the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (“AASB”) that are relevant to its operations and effective for an accounting period that begins on or after 1 July 2023. The application of these amendments has not resulted in any significant changes to the Group’s accounting policies nor any material effect on the measurement or disclosure of the amounts reported for the current or prior periods. New and amended Accounting Standards that are effective for the current period and are relevant to the Group include: Pronouncement Impact AASB 2021-2 Amendments to Australian Accounting Standards Disclosure of Accounting Policies and Definition of Accounting Estimates Requires the disclosure of material accounting policy information and clarifies how entities should distinguish changes in accounting policies and changes in accounting estimates. The application of the amendments did not have a material impact on the Group’s consolidated financial statements but has changed the disclosure of accounting policy information in the financial statements. New and revised Australian Accounting Standards and Interpretations on issue but not yet effective At the date of authorisation of the financial statements, the Group has not applied the following new and revised Australian Accounting Standards, Interpretations and amendments that have been issued but are not yet effective: Notes to the financial statements 30 June 2024 Cash Converters International Limited 58 Standard / amendment Effective for annual reporting periods beginning on or after AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (as amended) 1 July 2025 AASB 2020-1 Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-current 1 July 2024 AASB 2022-6 Amendments to Australian Accounting Standards – Non- current Liabilities with Covenants 1 July 2024 AASB 2022-5 Amendments to Australian Accounting Standards – Lease Liability in a Sale and Leaseback 1 July 2024 AASB 2023-1 Amendments to Australian Accounting Standards – Supplier Finance Arrangements 1 July 2024 AASB 2023-5 Amendments to Australian Accounting Standards – Lack of Exchangeability 1 July 2025 AASB 2024-2 Amendments to Australian Accounting Standards – Classification and Measurement of Financial Instruments 1 July 2026 AASB 18 Presentation and Disclosure in Financial Statements 1 July 2027 1.b) Rounding of amounts The Company is a company of the kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, dated 24 March 2016, and in accordance with that Corporations Instrument amounts in the financial report are rounded off to the nearest thousand dollars, unless otherwise indicated. 2. Segment information 2.a) Description of segments and principal activities The Group’s operating segments are organised and managed separately according to the nature of their operations. Each segment represents a strategic business unit that provides different services to different categories of customer. The Chief Executive Officer and Managing Director (chief operating decision-maker) monitors the operating results of the business units separately for the purpose of making decisions about resource allocation and performance assessment. The Group’s reportable segments under AASB 8 Operating Segments are therefore as follows: Australia Personal Finance This segment comprises the Cash Converters Personal Finance personal loans business. Vehicle Finance This segment comprises Green Light Auto Group Pty Ltd, which provides motor vehicle finance. Store Operations This segment involves the retail sale of new and second-hand goods and personal lending including cash advance and pawnbroking operations at corporate-owned stores in Australia. Head Office & Eliminations This segment comprises the sale of franchise licenses within Australia. It also involves the sale of master licenses for the development of franchises in countries around the world. Included within this segment are certain group consolidation eliminations, central administration costs, Director remuneration, interest income and expenses in relation to corporate head office operations. Notes to the financial statements 30 June 2024 Cash Converters International Limited 59 International New Zealand This segment comprises the operations of the New Zealand Cash Converters network, including the retail sale of new and second-hand goods, and personal lending including personal loan and pawnbroking operations at corporate-owned stores in New Zealand as well as the collection of franchise income from the New Zealand franchisee network. United Kingdom This segment comprises all operations within the United Kingdom, including the acquisition of the Cash Converters (UK) Stores Pty Ltd network in July 2023 and Themedawn Limited in June 2024. The operations in the United Kingdom include the retail sale of new and second-hand goods at corporate-owned stores, pawnbroking operations as well as the collection of franchise income from the United Kingdom franchisee network. The accounting policies of the reportable segments are the same as the Group’s accounting policies except where otherwise stated in the notes to the accounts. The following is an analysis of the Group’s revenue and results by reportable operating segment for the periods under review. Segment profit represents the profit earned by each segment without the allocation of central administration costs and Directors’ salaries, interest income and expense in relation to corporate facilities and tax expense. This is the measure reported to the Chief Executive Officer and Managing Director (chief operating decision-maker) for the purpose of resource allocation and assessment of segment performance. Notes to the financial statements 30 June 2024 Cash Converters International Limited 60 Personal Finance Vehicle Financing Store Operations New Zealand UK Head office & Eliminations Total $'000 $'000 $'000 $'000 $'000 $'000 $'000 Year ended 30 June 2024 Interest from external customers 1 118,092 18,556 36,121 11,943 17,374 1,121 203,207 Other revenue - - 102,042 13,157 57,475 6,682 179,356 Transactions with other segments (11,309) - 11,921 - - (612) - Segment revenue 106,783 18,556 150,084 25,100 74,849 7,191 382,563 EBITDA2 – operating 44,658 8,183 24,255 2,066 12,805 (22,813) 69,154 Impairment of non-current assets - - 909 (4,204) - - (3,295) Other non-operating costs3 1,150 (74) (20) - (1,062) (145) (151) EBITDA2 45,808 8,109 25,144 (2,138) 11,743 (22,958) 65,708 Depreciation and amortisation (1,034) (487) (8,025) (1,556) (4,064) (1,230) (16,396) EBIT 44,774 7,622 17,119 (3,694) 7,679 (24,188) 49,312 Interest expense (12,821) (3,753) (4,211) (1,509) (2,249) 2,095 (22,448) Profit / (loss) before tax 31,953 3,869 12,908 (5,203) 5,430 (22,093) 26,864 Income tax expense (9,467) Profit for the period 17,397 Personal Finance Vehicle Financing Store Operations New Zealand UK Head office & Eliminations Total $'000 $'000 $'000 $'000 $'000 $'000 $'000 Year ended 30 June 2023 Interest from external customers 1 126,224 15,048 37,111 6,315 253 754 185,705 Other revenue - - 91,569 7,495 11,151 6,777 116,992 Transactions with other segments (12,192) - 13,365 - - (1,173) - Segment revenue 114,032 15,048 142,045 13,810 11,404 6,358 302,697 EBITDA2 – operating 50,564 6,078 20,575 (833) 3,339 (22,487) 57,236 Impairment of non-current assets (90,561) - (26,592) - - - (117,153) Other non-operating costs3 - - 920 - (2,598) (992) (2,670) EBITDA2 (39,997) 6,078 (5,097) (833) 741 (23,479) (62,587) Depreciation and amortisation (1,340) (647) (7,701) (770) (260) (1,714) (12,432) EBIT (41,337) 5,431 (12,798) (1,603) 481 (25,193) (75,019) Interest expense (8,265) (2,667) (4,248) (711) (18) (91) (16,000) Profit / (loss) before tax (49,602) 2,764 (17,046) (2,314) 463 (25,284) (91,019) Income tax expense (6,136) Loss for the period (97,155) 1 Interest revenue comprises personal loan interest, cash advance fee income, pawnbroking interest from customers, commercial loan interest from third parties and interest received on bank deposits 2 EBITDA is earnings before interest, tax, depreciation and amortisation 3 Other non-operating costs comprised of impairment charges, indirect tax recovery and merger and acquisition costs Notes to the financial statements 30 June 2024 Cash Converters International Limited 61 2.b) Other segment information Personal Finance Vehicle Financing Store Operations New Zealand UK Head office & Eliminations Total $'000 $'000 $'000 $'000 $'000 $'000 $'000 Year ended 30 June 2024 Segment assets 172,749 60,411 91,537 39,948 62,610 50,783 478,038 Segment liabilities 112,145 35,396 64,892 8,201 26,182 19,856 266,672 Additions to non-current assets 4,868 5 7,793 - 23,785 - 36,451 Personal Finance Vehicle Financing Store Operations New Zealand UK Head office & Eliminations Total $'000 $'000 $'000 $'000 $'000 $'000 $'000 Year ended 30 June 2023 Segment assets 182,247 53,745 91,186 27,204 15,997 72,290 442,669 Segment liabilities 114,878 29,726 63,482 7,528 4,835 15,726 236,175 Profit on interest in associate - - - 251 - - 251 Additions to non-current assets 104 - 4,202 16,424 100 1,574 22,404 2.c) Geographic information The Group operates in three principal geographical areas – Australia (country of domicile), New Zealand and the United Kingdom. The Group’s revenue from continuing operations from external customers and information about its non-current assets by geographical location are detailed below. Revenue from external customers Non-current assets 30-Jun 30-Jun 30-Jun 30-Jun 2024 2023 2024 2023 $'000 $'000 $'000 $'000 Australia 282,004 276,906 179,352 132,887 New Zealand 25,100 13,810 1,140 9,526 United Kingdom 74,849 11,404 19,072 14,015 Rest of world 610 577 - - Total 382,563 302,697 199,564 156,428 Notes to the financial statements 30 June 2024 Cash Converters International Limited 62 3. Revenue 30-Jun 30-Jun 2024 2023 $'000 $'000 Franchise fee revenue 16,185 16,289 Financial services interest revenue Personal loan interest and establishment fees 124,945 128,865 Pawnbroking and buyback fees 54,643 34,818 Cash advance fee income 2,738 5,863 Vehicle loan interest and establishment fees 18,556 15,048 Other financial services revenue 951 253 201,833 184,847 Retail sales 155,252 96,707 Other revenues Bank interest 1,375 858 Webshop revenue 4,046 3,112 Other revenue 3,872 884 9,293 4,854 Total revenue 382,563 302,697 Franchise fees Franchise fees and levies in respect of particular services are recognised as income when they become due and receivable and the costs in relation to the income are recognised as expenses when incurred. Personal loan, cash advance, vehicle finance loan, pawnbroking and buyback fees Interest revenue is accrued on a time basis by reference to the principal outstanding (inclusive of commissions paid to originate the loan) at the effective interest rate applicable. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount. Loan establishment fee revenue Establishment fees are deferred and recognised over the life of the loans at the effective interest rate applicable so as to recognise revenue at a constant rate to the underlying principal over the expected life of the loan. Retail sales The retail sale of new and second-hand goods, in store and online are recognised when the Group has transferred control of the goods to the buyer or when the services are provided. Other categories of revenue Other categories of revenue, such as webshop commissions, are recognised when the Group has transferred control of the goods to the buyer or when the services are provided. Bank interest is recognised as earned on an accruals basis. Notes to the financial statements 30 June 2024 Cash Converters International Limited 63 4. Expense items 30-Jun 30-Jun 2024 2023 $'000 $'000 Financial services cost of sales Bad debts written off 57,694 55,483 Recovery of bad debts written off (8,869) (6,171) Net bad debt expense 48,825 49,312 Movement in expected credit loss allowance 1,931 5,071 Total loan related bad debts and allowances 50,756 54,383 Other financial services cost of sales 2,914 2,530 53,670 56,913 Employee expenses Employee benefits 110,031 85,712 Share-based payments 831 807 Superannuation expense 8,068 7,046 118,930 93,565 Administrative expenses General administrative expenses 4,909 4,362 Communications expenses 1,579 1,303 IT expenses 5,417 4,372 Travel costs 1,265 1,163 13,170 11,200 Occupancy expenses Rent 651 298 Outgoings 3,566 2,247 Lease modifications (1,447) (1,780) Other - cleaning, repairs, security, electricity 3,405 2,329 6,175 3,094 Notes to the financial statements 30 June 2024 Cash Converters International Limited 64 30-Jun 30-Jun 2024 2023 $'000 $'000 Depreciation and amortisation expense Depreciation of property, plant and equipment 2,609 1,758 Depreciation of right-of-use assets 9,965 7,109 Amortisation of other intangible assets 3,692 3,549 Loss on write down of assets 130 16 16,396 12,432 Other expenses Legal fees 1,104 306 Professional and registry costs 5,920 3,409 Auditing and accounting services 1,525 1,322 Bank charges 1,472 1,247 Other expenses from ordinary activities 3,891 3,405 13,912 9,689 Indirect tax recovery (net) (1,150) (920) Merger and acquisition (“M&A”) costs 1,017 3,590 13,779 12,359 Finance costs Interest 16,687 10,755 Interest expense on lease liabilities 5,761 5,245 22,448 16,000 Notes to the financial statements 30 June 2024 Cash Converters International Limited 65 5. Impairment of non-current assets The Group conducts regular impairment tests on its non-current assets, including property, plant and equipment, goodwill, intangibles and right-of-use assets. 1. Annual Testing: Indefinite life intangibles and goodwill are tested at least annually. 2. Indication of Impairment: If there is any indication that an asset may be impaired, it is assessed at each reporting date. 3. Changes in previously recognised impairment: If there is an indication that previously recognised impairment (excluding goodwill) may have changed, it is assessed at each reporting date, for a potential reversal. 5.a) Impairment recognised Impairment losses recognised FY2024 - goodwill Operating segments were tested for impairment at 30 June 2024 using cashflow forecasts reflective of the assumptions disclosed below (section Key Assumptions). As a result of this testing, a goodwill impairment of $3.295m (FY2023: nil) was identified in the New Zealand operating segment. There were no impairments to goodwill identified in any of the other operating segments as part of the testing. In FY2023, the Personal Finance and Store Operations reportable segment CGUs were impaired to their recoverable amount of $67.745 million and $25.061 million respectively and a goodwill impairment expense of $90.561 million and $19.920 million were recognised for the Personal Finance and Store Operations segments respectively. A Goodwill impairment is not able to be reversed in future accounting periods. No amount of goodwill recognised or impaired is expected to be deductible for tax purposes. The impairment recognised during the period results in the following changes in goodwill: Personal Store New Finance Operations Zealand UK Total 30-June-2024 $'000 $'000 $'000 $'000 $'000 Balance at the beginning of the year - - 3,279 - 3,279 Recognition on business combinations - 549 - 7,397 7,946 Impairment of goodwill - - (3,295) - (3,295) Foreign currency exchange differences - - 16 4 20 Balance at the end of the year - 549 - 7,401 7,950 Personal Store New Finance Operations Zealand UK Total 30-June-2023 $'000 $'000 $'000 $'000 $'000 Balance at the beginning of the year 90,561 19,920 - - 110,481 Recognition on business combinations - - 3,315 - 3,315 Impairment of goodwill (90,561) (19,920) - - (110,481) Foreign currency exchange differences - - (36) - (36) Balance at the end of the year - - 3,279 - 3,279 Refer to note 8.d for further information supporting the changes in the goodwill balances. Notes to the financial statements 30 June 2024 Cash Converters International Limited 66 Impairment losses recognised FY2024 – other non-current assets Individual stores that had impairment triggers within Australia, New Zealand and the UK were tested for impairment of other non-current assets at 30 June 2024 using cashflow forecasts reflective of the assumptions disclosed below (section Key Assumptions). As a result of this testing the following impairment or impairment reversals were identified: - impairment expense of $0.909m (FY2023: nil) across several of the individual store CGUs in the New Zealand operating segment. - impairment reversal of $0.909m (FY2023: $6.672m impairment expense) across several of the individual store CGUs in the Store Operations operating segment. As a result of this impairment, an impairment loss of other non-current assets has been recognised in the financial year as outlined below. Store Operations New Zealand Total 30-Jun 30-Jun 30-Jun 30-Jun 30-Jun 30-Jun 2024 2023 2024 2023 2024 2023 $'000 $'000 $'000 $'000 $'000 $'000 Impairment of non-current assets Plant and equipment 83 608 159 - 242 608 Right-of-use assets (1,060) 5,610 750 - (310) 5,610 Other intangible assets 68 454 - - 68 454 (909) 6,672 909 - - 6,672 5.b) Australia The Group is required to perform an annual impairment test on operating segments, which contain goodwill and indefinite life intangible assets, some of which arose through the acquisition of several Australian franchise stores during FY2024, as well as an impairment test on individual store CGUs, where external and/or internal indicators of impairment exist. In the year ending 30 June 2024, the Group identified the following indicators of impairment or impairment reversal: Segment CGUs:  Market Capitalisation versus Net Assets: The Group's market capitalisation remained lower than its net assets.  Vehicle Finance (GLA) segment: The Group has plans to restructure/wind-down the vehicle financing operation in FY2025 and beyond, which has been considered as an indicator for impairment in that CGU. Individual store CGUs:  Impairment indicators: recent history of trading behind budget, presenting as loss making and/or with a noticeable decline in their forecasts.  Impairment reversal indicators: store with prior impairment that has a recent history of trading ahead of budget and is presenting with significantly improved forecasts. Notes to the financial statements 30 June 2024 Cash Converters International Limited 67 As identified above, indicators of impairment are considered to exist in both the segments and the individual store CGUs for the year ended 30 June 2024. Determination of the recoverable amount has been performed at both the individual store CGU level and segment CGUs, using a value in use model, consistent with 30 June 2023. The Vehicle Finance segment was tested for impairment and its recoverable amount based on discounted forecast cashflows was found to support the carrying value of the assets in the CGU. Hence no impairment was recognised. A net impairment reversal of $0.909 million (FY2023: $117.153 million impairment expense) of other non- current assets has been identified through this testing, as outlined below: 30-Jun 30-Jun 2024 2023 $'000 $'000 Impairment of non-current assets Plant and equipment 83 608 Right-of-use assets (1,060) 5,610 Other intangible assets 68 454 Goodwill - 110,481 (909) 117,153 Store Operations and Personal Finance segment CGUs As reported in the FY2023 annual report the Group operates in a regulated industry. On 3 March 2016, the Small Amount Credit Contracts Review Final Report (“the Final Report”) was delivered by the Review Panel to the Minister for Small Business and Assistant Treasurer. The Final Report outlined proposed regulatory requirements relating to the Protected Earnings Amount (“PEA”) cap that had the potential to significantly impact SACC lending volumes, namely the Group’s Personal Loan and Cash Advance products. One of the recommendations was to extend the SACC PEA cap requirement to all consumers and lowering it to 10% of the consumer’s net income. Since 30 June 2022, the Financial Sector Reform Act 2022 (“the Act”) was introduced to the House of Representatives. The Act stated, “It is expected that the regulations will provide a protected earnings amount of 10 percent of a person's net (after tax and other deductions) income for all consumers”. In effect, the regulations stipulated by the Act will cap repayments on certain loan products to 10% of a consumer’s net income and apply to all consumers (previously the PEA cap only applied to Centrelink recipients). The Act was passed by the Senate and ultimately received royal assent on 12 December 2022. The sections of the legislation that introduce the amendments to the PEA cap had an effective date 6 months post royal assent, being 12 June 2023. Regulatory impact As reported in the FY2023 annual report modelling was performed on the SACC lending volumes in FY2022 as if the PEA cap had applied. The reduction to SACC lending volumes was estimated to be a 44.3% reduction in the Personal Finance and a 68.7% reduction in the Store Operations segments. This estimated reduction in lending volumes was effective from the date of the PEA cap, being 12 June 2023. SACC loan volume reductions were expected to have the following impact:  decrease in financial services interest revenue in the Personal Finance segment and Store Operations segment;  decrease in commissions paid from the Personal Finance segment (to Corporate stores and franchise stores);  decrease in intercompany commission revenue earned by Corporate stores; and  decrease in commission revenue earned by franchisees. Notes to the financial statements 30 June 2024 Cash Converters International Limited 68 5.c) New Zealand The Group is required to perform an annual impairment test on goodwill and indefinite life intangible assets, as well as an impairment test on the NZ segment and individual store CGUs, where external and/or internal indicators of impairment exist. In the year ending 30 June 2024, the Group identified the following indicators of impairment: Segment CGUs: • Market Capitalisation versus Net Assets: The Group's market capitalisation remained lower than its net assets. • Regulatory Changes and underperformance: The New Zealand Credit Contracts and Consumer Finance Act (NZ CCCF Act) introduced regulatory changes in December 2021, resulting in reduced lending volumes for CCNZ. Despite partial repeal of the NZ CCCF Act changes in May 2023, lending volumes have not returned to levels forecast. • Changes to establishment fees: following feedback from the NZ Commerce Commission, the Group performed a comprehensive review of the establishment fee being charged on its NZ Better Personal loan product. The outcome of this review was a reduction in the establishment fee being charged on its loans. This change was formalised and implemented from 16 April 2024. Individual store CGUs:  Impairment indicator: recent history of trading behind budget, presenting as loss making and/or with a noticeable decline in their forecasts. As identified above, indicators of impairment are considered to exist in both the NZ operating segment CGU and the individual store CGUs in the year ending 30 June 2024. Determination of the recoverable amount has been performed at both the segment CGU level and individual store CGU level, using a value in use model, consistent with 30 June 2023. The New Zealand segment CGU as well as a number of individual store CGUs were impaired to their recoverable amount at 30 June 2024 and an impairment expense of $4.204 million (FY2023: nil) was recognised. The assets were impaired to their recoverable amount based on the value in use of the CGU to which they relate. The impairment at individual store level, which is not an impairment of goodwill, may reverse in future accounting periods if the recoverable amount increases above the carrying value of the asset. The increased amount cannot exceed the carrying value that would have been determined, net of depreciation or amortisation, had no impairment loss been recognised for the asset in prior years. The impairment losses of $4.204 million (FY2023: nil) of goodwill or other non-current assets identified through this testing, is outlined below: 30-Jun 30-Jun 2024 2023 $'000 $'000 Impairment of non-current assets Plant and equipment 159 - Right-of-use assets 750 - Other intangible assets - - Goodwill 3,295 - 4,204 - Notes to the financial statements 30 June 2024 Cash Converters International Limited 69 5.d) United Kingdom The Group is required to perform an annual impairment test on goodwill and indefinite life intangible assets, which arose through the acquisition of Cash Converters (UK) Stores Pty Ltd (formerly Capital Cash Limited (“Capital Cash”)) and Themedawn Ltd during FY2024, as well as an impairment test on the UK segment and individual store CGUs, where external and/or internal indicators of impairment exist. In the year ending 30 June 2024, the Group identified the following indicators of impairment: Segment CGUs: • Market Capitalisation versus Net Assets: The Group's market capitalisation remained lower than its net assets. Individual store CGUs:  Impairment indicator: recent history of certain stores trading behind budget, presenting as loss making and/or with a noticeable decline in their forecasts As identified above, indicators of impairment are considered to exist in both the UK operating segment CGU and the individual store CGUs in the year ending 30 June 2024. Determination of the recoverable amount has been performed at both the individual store CGU level and segment CGUs, using a value in use model, consistent with the models used at 30 June 2023 for other jurisdictions. No impairment loss of goodwill or other non-current assets has been identified through this testing (FY2023: nil). 5.e) Key Assumptions The key assumptions used in the impairment testing in the year ending 30 June 2024 are included in the table below for the segments which either currently contain goodwill and/or contain individual store CGUs where impairment indicators have been identified. Assumption Store Operations New Zealand UK Forecast revenue 5-year compound annual growth rate 5.0% 6.9% 5.5% Forecast expense 5-year compound annual growth rate 3.5% 4.2% 5.2% Terminal growth rate > 5 years 2.5% 2.5% 2.5% Post-tax discount rate applied to cash flows 10.2% 11.4% 10.2% The key assumptions for budgeted revenue and expense growth rates in the prior period impairment tests are included below for comparison. No comparatives are available for the UK as the acquisition of the store network only occurred during FY2024. Assumption Store Operations New Zealand UK Forecast revenue 5-year compound annual growth rate 3.2% 7.4% Forecast expense 5-year compound annual growth rate 2.2% 1.7% Terminal growth rate > 5 years 2.5% 2.5% Post-tax discount rate applied to cash flows 10.4% 11.5% Notes to the financial statements 30 June 2024 Cash Converters International Limited 70 5.f) Impairment sensitivity The Group is required to make significant estimates and apply significant judgments in determining whether the carrying amount of assets and/or CGUs have any indication of impairment. Such estimates and judgments are subject to change as a result of changing economic and operational conditions. Actual cash flows may therefore differ from forecasts and could result in changes in the recognition of impairment charges in future periods. 5.g) Significant accounting estimates and assumptions The Group faces the challenge of making significant estimates and applying significant judgments in determining whether the carrying amount of assets and / or CGUs indicates any impairment. Key assumptions in the cash flow projections include growth rates which are based on corporate plans that take into consideration historic performance, forecast macroeconomic conditions and the estimated effect of operational changes. These estimates and judgments are subject to change due to shifting economic and operational conditions. Actual cash flows may differ from forecasts, potentially leading to changes in the recognition of impairment charges in future periods. Significant management judgement is required with respect to estimating the timing and amount of forecast cash flows including:  projecting loan origination volumes, customer repayments and the forecast expected credit losses;  specific to the vehicle financing segment, consideration of the impact of the Group’s decision to wind-down the loan book in FY2025 and beyond;  specific to the CCNZ segment, consideration of the impact of regulatory changes embodied in the NZ CCCF Act in December 2021 and the impact of changes made to the establishment fee charged on the loan product;  allocation of overheads on a reasonable apportionment basis; and  forecast working capital requirements. Significant management judgement is required with respect to an appropriate discount rate to present value the forecast cash flows in which the purpose is to estimate, as far as possible:  a market assessment of expectations about possible variations in the amount or timing of those cash flows;  the time value of money, represented by the current market risk-free rate of interest;  the price for bearing the uncertainty inherent in the asset; and  other, sometimes unidentifiable, factors (such as illiquidity) that market participants would reflect. 5.h) Impairment testing Segment CGUs - Goodwill Impairment modelling for each CGU or group of CGUs has been prepared separately based on a value in use model which uses cash flow projections based on budgets approved by the Board and updated by management to reflect current business performance, covering a five-year period. Cash flows beyond the five-year period are estimated using industry growth rates and a terminal value calculated based on a terminal growth rate under standard valuation principles. Key assumptions are based on a combination of past experience for mature products and external sources (market data) for less mature products and economic metrics such as interest rates. Working capital requirements are factored into the modelling based on historic requirements for each CGU and vary in line with earnings growth. Capital investment, required to run the business (i.e., replacement and non- expansionary capital expenditure) has been included based on forecasted amounts for the next financial year and incremental growth in subsequent years consistent with revenue trends. Notes to the financial statements 30 June 2024 Cash Converters International Limited 71 Individual store CGUs A test for impairment of the carrying value of assets can be triggered by a change in several indicators, both internal and external. During the reporting period, there were indicators of impairment or impairment reversal in some stores due to changes to the forecasts, due to recent history of trading behind or ahead of budget. Where indicators of impairment or impairment reversal exist, it remains a requirement to perform an impairment test of the carrying amount of the individual store CGUs. Goodwill is not allocated to the individual store CGUs as it is monitored by management at the respective operating segment levels. An impairment loss is recognised for the amount by which the individual store CGU’s carrying amount exceeds its recoverable amount. Recoverable amounts for individual store CGUs are calculated based on a value in use model which uses cash flow projections based on budgets approved by the Board and updated by management to reflect current business performance, covering a five-year period. Cash-flows beyond the five-year period are calculated based on a terminal growth rate under standard valuation principles. Key assumptions are based on a combination of past experience for mature products and external sources (market data) for less mature products and economic metrics such as interest rates. Working capital requirements are factored into the modelling based on historic requirements for each CGU and vary in line with earnings growth. Capital investment, required to run the business (i.e., replacement and non- expansionary capital expenditure) has been included based on forecast amounts for the next financial year and incremental growth in subsequent years consistent with revenue trends. Each individual store CGU carrying amount primarily comprises right-of-use assets, store fixtures and fittings as well as other intangibles. Corporate assets such as software are allocated to the individual stores on a proportionate basis and also tested for impairment. 6. Income tax 6.a) Income tax expense 30-Jun 30-Jun 2024 2023 $'000 $'000 Current income tax expense Current year 11,908 8,677 Adjustment for prior years (96) 688 Deferred income tax expense Temporary differences (2,745) (2,798) Adjustment for prior years 400 (431) Income tax expense reported in income statement 9,467 6,136 Notes to the financial statements 30 June 2024 Cash Converters International Limited 72 6.b) Numerical reconciliation of income tax expense to prima facie tax payable 30-Jun 30-Jun 2024 2023 $'000 $'000 Tax reconciliation Profit / (loss) before tax from continuing operations 26,864 (91,019) Income tax at the statutory rate of 30% (2023: 30%) 8,059 (27,306) Adjustments relating to prior years 304 257 Income tax rate differential (167) 29 Other adjustments 348 53 Tax effect of share-based payment expense - (41) Tax effect of goodwill impairment expense 923 33,144 Income tax expense on profit / (loss) before tax 9,467 6,136 6.c) Tax losses A deferred tax asset in respect of carry forward losses of $7.684 million (FY2023: $8.607 million) is recognised in relation to the Group’s UK operations. Profit has been achieved in the last three years with the FY2024 year reflecting utilisation of the carry forward losses because of taxable profits arising. Ongoing taxable profit forecasts have supported continued recognition in full of the deferred tax asset (“DTA”) that arises from unused tax losses from previous years. Carry forward losses of $628 thousand (FY2023: $899 thousand) have been recognised in relation to losses in the Group’s New Zealand operations during the current year. 6.d) Uncertainty over income tax treatments There were no adjustments to the amounts recognised in the financial report as a result of applying IFRIC 23 Uncertainty over Income Tax Treatments. 6.e) Relevance of tax consolidation to the Group The Company and its wholly-owned Australian resident entities have formed a tax-consolidated group with effect from 1 July 2003 and are therefore taxed as a single entity from that date. The head entity within the tax- consolidated group is Cash Converters International Limited. The members of the tax-consolidated group are identified in note 15. 6.f) Nature of tax funding arrangements and tax sharing agreements Entities within the tax-consolidated group have entered into a tax funding arrangement and a tax sharing agreement with the head entity. Under the terms of the tax funding arrangement, Cash Converters International Limited and each of the entities in the tax-consolidated group has agreed to pay a tax equivalent payment to or from the head entity, based on the current tax liability or current tax asset of the entity. Such amounts are reflected in amounts receivable from or payable to other entities in the tax-consolidated group. The tax sharing agreement entered into between members of the tax-consolidated group provides for the determination of the allocation of income tax liabilities between the entities should the head entity default on its tax payment obligation. No amounts have been recognised in the financial statements in respect of this agreement as payment of any amounts under the tax sharing agreement is considered remote. See note 8.f for deferred tax balances. Notes to the financial statements 30 June 2024 Cash Converters International Limited 73 7. Financial assets and financial liabilities 30-Jun 30-Jun 2024 2023 $’000 $’000 Financial assets Cash and cash equivalents 56,289 71,565 Trade and other receivables 13,981 10,219 Loan receivables 238,712 224,729 308,982 306,513 Financial liabilities Trade and other payables 27,249 18,984 Borrowings 144,085 136,991 171,334 155,975 7.a) Cash and cash equivalents For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet. 30-Jun 30-Jun 2024 2023 $’000 $’000 Cash on hand 3,804 3,153 Cash at bank 52,485 68,412 Closing cash and cash equivalents 56,289 71,565 Unrestricted cash 43,450 55,668 Restricted cash 12,839 15,897 Closing cash and cash equivalents 56,289 71,565 Restricted cash at bank includes cash of $5.142 million (FY2023: $6.081 million) that is held in accounts controlled by the CCPF Receivables Trust No 1 that was established to operate the Company’s securitisation facility with Fortress Investment Group. The facility prescribes that cash deposited in this account can only be used to fund new principal advances. Surplus funds at the end of the period are redistributed in keeping with the terms of the securitisation facility. Restricted cash at bank includes a further $6.220 million (FY2023: $6.220 million) on deposit as security for banking facilities. Notes to the financial statements 30 June 2024 Cash Converters International Limited 74 7.b) Trade and other receivables Trade receivables and other receivables that have fixed or determinable payments and that are not quoted in an active market are classified as trade and other receivables and are measured at amortised costs using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the effect of discounting is immaterial. The group applies the simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due. 30-Jun 30-Jun 2024 2023 $’000 $’000 Current Trade receivables 1,150 1,245 Allowance for expected credit losses (328) (485) Trade receivables (net) 822 760 Other receivables 3,830 2,810 Total current trade receivables 4,652 3,570 Non-current Loan to external parties 8,163 5,077 Allowance for expected credit losses (735) (254) Loan to external parties (net) 7,428 4,823 Other receivables 1,901 1,826 Total non-current trade and other receivables 9,329 6,649 Trade receivables include weekly franchise fees and over the counter fees. Regardless of whether the collection of the debtor is doubtful, an allowance for expected credit losses is recognised. The average credit period on sales is 30 days. No interest is charged for the first 30 days from the date of the invoice. Thereafter, interest may be charged on the outstanding balance. Loan to external parties relates to a commercial loan advanced to Cash Converters Espana, S.L (Spain master franchisor). Cash Converters Espana, S.L is neither a part of the consolidated Group nor is it a related party. An initial loan of $4.679 million was advanced in April 2023, with an additional $1.787 million and $0.495 million being advanced in December 2023 and April 2024 respectively. The Group is in the process of extending the initial advance repayment date of 30 September 2024 to align with the repayment date of the additional advances of 30 September 2025. Interest is charged monthly and is to be paid in a lump sum at the maturity date. This transaction is consistent with our ongoing commitment to support our franchise network in achieving their strategic objectives. Under AASB 9 Financial Instruments, the Company has reassessed the expected credit loss associated with this loan. Given the increase in the principal amount and the extended repayment period, the expected credit loss allowance has been adjusted. The Company continues to monitor the recoverability of and the performance of the loan and will change the expected credit loss as necessary in future reporting periods. An allowance for expected credit losses of $0.735 million (2023: $0.254 million) has been recognised in relation to this loan. Other receivables include rental bonds, development agent fees outstanding, sub-master license sales, Mon-E fees, financial commission, vendor finance loans and instalment credit loans. Notes to the financial statements 30 June 2024 Cash Converters International Limited 75 As at 30 June the ageing analysis of trade receivables was as follows: 30-Jun 30-Jun 2024 2023 $’000 $’000 0 to 30 days 634 613 31 to 60 days past due not impaired 71 48 61 to 90 days past due not impaired 22 7 90+ days past due not impaired 95 92 Stage 3 expected credit loss 328 485 Balance at end of year 1,150 1,245 Allowance for expected credit losses As at 30 June 2024, trade receivables of $0.328 million (FY2023: $0.485 million) were considered to be in Stage 3 of expected credit losses as described in the accounting policy. Movements in the allowance for expected credit losses of trade receivables were as follows: 30-Jun 30-Jun 2024 2023 $’000 $’000 Balance at beginning of year 485 308 Expected credit losses recognised on receivables (157) 156 Foreign currency exchange differences - 21 Balance at end of year 328 485 Notes to the financial statements 30 June 2024 Cash Converters International Limited 76 7.c) Loan receivables at amortised cost Personal Vehicle Store New UK Total Finance Financing Operations Zealand 30-June-2024 $’000 $’000 $’000 $’000 $’000 $’000 Current Outstanding balance 149,735 27,471 18,290 10,700 10,423 216,619 Allowance for expected credit losses (26,388) (5,232) (1,728) (2,302) (420) (36,070) Net 123,347 22,239 16,562 8,398 10,003 180,549 Non-current Outstanding balance 25,596 44,723 - 1,066 - 71,385 Allowance for expected credit losses (4,317) (8,536) - (369) - (13,222) Net 21,279 36,187 - 697 - 58,163 Personal Vehicle Store New UK Total Finance Financing Operations Zealand 30-June-2023 $’000 $’000 $’000 $’000 $’000 $’000 Current Outstanding balance 159,093 31,877 17,628 10,497 - 219,095 Allowance for expected credit losses (25,965) (6,094) (1,839) (3,128) - (37,026) Net 133,128 25,783 15,789 7,369 - 182,069 Non-current Outstanding balance 19,235 31,037 - 1,988 - 52,260 Allowance for expected credit losses (2,985) (5,928) - (687) - (9,600) Net 16,250 25,109 - 1,301 - 42,660 The credit period provided in relation to personal unsecured loans varies from 7 days to 36 months. Interest is charged on these loans at a fixed rate which, for Australian pawnbroking loans, varies dependent on the state of origin. An expected credit loss allowance has been recognised for estimated unrecoverable amounts arising from loans already issued, which has been determined by reference to past default experience. Before accepting any new customers, the Group uses an internally developed scoring system, which uses available credit data, to assess the potential customer’s credit quality and define credit limits by customer. There is no concentration of credit risk within the personal loan book. Notes to the financial statements 30 June 2024 Cash Converters International Limited 77 Vehicle finance loans are secured loans advanced for financing the purchase of vehicles. The average remaining term of these loans is 3.1 years (FY2023: 2.9 years) and the average interest rate is 23.7% (FY2023: 24.1%). As at 30 June the ageing analysis of Personal Finance and Store Operations receivables was as follows: 30-Jun 30-Jun 2024 2023 $’000 $’000 0 to 30 days 144,736 148,867 31 to 60 days past due not impaired 7,953 8,391 61 to 90 days past due not impaired 4,862 4,866 90 + days past due not impaired 3,637 3,043 Loan receivables carrying value 161,188 165,167 Allowance for expected credit loss 32,433 30,789 Gross carrying value 193,621 195,956 As at 30 June the ageing analysis of Vehicle Financing loan receivables was as follows: 30-Jun 30-Jun 2024 2023 $’000 $’000 0 to 30 days 37,525 34,981 31 to 60 days past due not impaired 4,516 3,433 61 to 90 days past due not impaired 2,426 2,404 90 + days past due not impaired 13,959 10,074 Loan receivables carrying value 58,426 50,892 Allowance for expected credit loss 13,768 12,022 Gross carrying value 72,194 62,914 As at 30 June the ageing analysis of New Zealand loan receivables was as follows: 30-Jun 30-Jun 2024 2023 $’000 $’000 0 to 30 days 7,177 6,920 31 to 60 days past due not impaired 739 846 61 to 90 days past due not impaired 607 640 90 + days past due not impaired 572 264 Loan receivables carrying value 9,095 8,670 Allowance for expected credit loss 2,671 3,815 Gross carrying value 11,766 12,485 Notes to the financial statements 30 June 2024 Cash Converters International Limited 78 As at 30 June the ageing analysis of UK loan receivables was as follows: 30-Jun 30-Jun 2024 2023 $’000 $’000 0 to 30 days 3,978 - 31 to 60 days past due not impaired 1,919 - 61 to 90 days past due not impaired 1,039 - 90 + days past due not impaired 3,067 - Loan receivables carrying value 10,003 - Allowance for expected credit loss 420 - Gross carrying value 10,423 - Allowance for expected credit losses (“ECL”) In determining the recoverability of a Personal Finance loan, the Group considers any change in the credit quality of the receivable from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, the Directors believe that there is no further credit loss allowance required in excess of the loss allowance. The following table explains changes in the loss allowance between the beginning and end of the year: Personal Finance and Store Operations receivables Stage 1 Stage 2 Stage 3 Total Loss allowance 12-month ECL Lifetime ECL Lifetime ECL $’000 $’000 $’000 $’000 Balance at 1 July 2023 7,168 9,416 14,205 30,789 Movements with P&L impact Transfers Transfers from Stage 1 to Stage 2 (759) 759 - - Transfers from Stage 1 to Stage 3 (648) - 648 - Transfers from Stage 2 to Stage 1 130 (130) - - Transfers from Stage 2 to Stage 3 - (1,565) 1,565 - Transfers from Stage 3 to Stage 1 52 - (52) - Transfers from Stage 3 to Stage 2 - 921 (921) - New financial assets originated from business combination 21 247 - 268 New financial assets originated 5,766 7,540 8,127 21,433 Changes in PDs/LGDs/EADs (2,860) (2,839) 2,316 (3,383) Changes to model assumptions and methodologies 554 330 366 1,250 Written off and settled loans (3,250) (5,600) (9,074) (17,924) Total net change during the period (994) (337) 2,975 1,644 Balance at 30 June 2024 6,174 9,079 17,180 32,433 Notes to the financial statements 30 June 2024 Cash Converters International Limited 79 The following table explains changes in the gross carrying amount of the loans and receivables to help explain their significance to the changes in the loss allowance: Personal Finance and Store Operations receivables Stage 1 Stage 2 Stage 3 Total Gross carrying amount 12-month ECL Lifetime ECL Lifetime ECL $’000 $’000 $’000 $’000 Balance at 1 July 2023 112,462 39,869 43,625 195,956 Movements with P&L impact Transfers Transfers from Stage 1 to Stage 2 (12,614) 12,614 - - Transfers from Stage 1 to Stage 3 (8,897) - 8,897 - Transfers from Stage 2 to Stage 1 986 (986) - - Transfers from Stage 2 to Stage 3 - (8,207) 8,207 - Transfers from Stage 3 to Stage 1 288 - (288) - Transfers from Stage 3 to Stage 2 - 4,382 (4,382) - New financial assets originated from business combination 634 401 - 1,035 New financial assets originated 98,562 36,077 20,169 154,808 Changes in outstanding balances (8,188) (12,772) (5,032) (25,992) Written off and settled loans (79,670) (26,258) (26,258) (132,186) Total net change during the period (8,899) 5,251 1,313 (2,335) Balance at 30 June 2024 103,563 45,120 44,938 193,621 The following table explains changes in the loss allowance between the beginning and end of the year: Vehicle finance loans receivables Stage 1 Stage 2 Stage 3 Total Loss allowance 12-month ECL Lifetime ECL Lifetime ECL $’000 $’000 $’000 $’000 Balance at 1 July 2023 1,606 3,140 7,276 12,022 Movements with P&L impact Transfers Transfers from Stage 1 to Stage 2 (485) 485 - - Transfers from Stage 1 to Stage 3 (189) - 189 - Transfers from Stage 2 to Stage 1 176 (176) - - Transfers from Stage 2 to Stage 3 - (1,339) 1,339 - Transfers from Stage 3 to Stage 1 78 - (78) - Transfers from Stage 3 to Stage 2 - 216 (216) - New financial assets originated 428 1,179 1,207 2,814 Changes in PDs/LGDs/EADs (786) (134) 2,346 1,426 Changes to model assumptions and methodologies (38) 204 (242) (76) Written off and settled loans (136) (427) (1,855) (2,418) Total net change during the period (952) 8 2,690 1,746 Balance at 30 June 2024 654 3,148 9,966 13,768 Notes to the financial statements 30 June 2024 Cash Converters International Limited 80 The following table explains changes in the gross carrying amount of the loans and receivables to help explain their significance to the changes in the loss allowance: Vehicle finance loans receivables Stage 1 Stage 2 Stage 3 Total Gross carrying amount 12-month ECL Lifetime ECL Lifetime ECL $’000 $’000 $’000 $’000 Balance at 1 July 2023 38,385 11,965 12,564 62,914 Movements with P&L impact Transfers Transfers from Stage 1 to Stage 2 (9,903) 9,903 - - Transfers from Stage 1 to Stage 3 (3,073) - 3,073 - Transfers from Stage 2 to Stage 1 901 (901) - - Transfers from Stage 2 to Stage 3 - (5,088) 5,088 - Transfers from Stage 3 to Stage 1 169 - (169) - Transfers from Stage 3 to Stage 2 - 468 (468) - New financial assets originated 20,316 6,597 2,116 29,029 Changes in outstanding balances (5,209) (2,845) (925) (8,979) Written off and settled loans (4,863) (1,881) (4,026) (10,770) Total net change during the period (1,662) 6,253 4,689 9,280 Balance at 30 June 2024 36,723 18,218 17,253 72,194 In determining the recoverability of a Vehicle Financing loan, the Group considers any change in the credit quality of the receivable from the date credit was initially granted up to the reporting date. The Group has made an allowance based on known historical losses and a reasonable estimation of expected future losses. As these loans are secured by the underlying vehicle financed, the total loss will be reduced by the recoverable amount. Accordingly, the Directors believe that there is no further credit loss allowance required in excess of the loss allowance for expected credit losses. Notes to the financial statements 30 June 2024 Cash Converters International Limited 81 The following table explains changes in the loss allowance between the beginning and end of the year: New Zealand loans receivables Stage 1 Stage 2 Stage 3 Total Loss allowance 12-month ECL Lifetime ECL Lifetime ECL $’000 $’000 $’000 $’000 Balance at 1 July 2023 1,435 2,101 279 3,815 Movements with P&L impact Transfers Transfers from Stage 1 to Stage 2 (339) 339 - - Transfers from Stage 1 to Stage 3 (74) - 74 - Transfers from Stage 2 to Stage 1 - - - - Transfers from Stage 2 to Stage 3 - (218) 218 - Transfers from Stage 3 to Stage 1 - - - - Transfers from Stage 3 to Stage 2 - 26 (26) - New financial assets originated 654 853 133 1,640 Changes in PDs/LGDs/EADs (534) (716) (27) (1,277) Changes to model assumptions and methodologies 283 426 69 778 Written off and settled loans (785) (1,328) (172) (2,285) Total net change during the period (795) (618) 269 (1,144) Balance at 30 June 2024 640 1,483 548 2,671 The following table explains changes in the gross carrying amount of the loans and receivables to help explain their significance to the changes in the loss allowance: New Zealand loans receivables Stage 1 Stage 2 Stage 3 Total Gross carrying amount 12-month ECL Lifetime ECL Lifetime ECL $’000 $’000 $’000 $’000 Balance at 1 July 2023 8,515 3,596 374 12,485 Movements with P&L impact Transfers Transfers from Stage 1 to Stage 2 (1,242) 1,242 - - Transfers from Stage 1 to Stage 3 (402) - 402 - Transfers from Stage 2 to Stage 1 - - - - Transfers from Stage 2 to Stage 3 - (508) 508 - Transfers from Stage 3 to Stage 1 - - - - Transfers from Stage 3 to Stage 2 - 58 (58) - New financial assets originated 7,041 2,450 297 9,788 Changes in outstanding balances (513) (603) (74) (1,190) Written off and settled loans (6,347) (2,705) (265) (9,317) Total net change during the period (1,463) (66) 810 (719) Balance at 30 June 2024 7,052 3,530 1,184 11,766 In determining the recoverability of the New Zealand loan products, the Group considers any change in the credit quality of the receivable from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, the Directors believe that there is no further credit loss allowance required in excess of the loss allowance. Notes to the financial statements 30 June 2024 Cash Converters International Limited 82 The following table explains changes in the loss allowance between the beginning and end of the year: UK receivables Stage 1 Stage 2 Stage 3 Total Loss allowance 12-month ECL Lifetime ECL Lifetime ECL $’000 $’000 $’000 $’000 Balance at 1 July 2023 - - - - Movements with P&L impact Transfers Transfers from Stage 1 to Stage 2 - - - - Transfers from Stage 1 to Stage 3 - - - - Transfers from Stage 2 to Stage 1 - - - - Transfers from Stage 2 to Stage 3 - - - - Transfers from Stage 3 to Stage 1 - - - - Transfers from Stage 3 to Stage 2 - - - - New financial assets originated from business combination 158 312 - 470 New financial assets originated 220 14 - 234 Balance changes within stages 20 140 - 160 Written off and settled loans (146) (298) - (444) Total net change during the period 252 168 - 420 Balance at 30 June 2024 252 168 - 420 The following table explains changes in the gross carrying amount of the loans and receivables to help explain their significance to the changes in the loss allowance: UK receivables Stage 1 Stage 2 Stage 3 Total Gross carrying amount 12-month ECL Lifetime ECL Lifetime ECL $’000 $’000 $’000 $’000 Balance at 1 July 2023 - - - - Movements with P&L impact Transfers Transfers from Stage 1 to Stage 2 (291) 291 - - Transfers from Stage 1 to Stage 3 - - - - Transfers from Stage 2 to Stage 1 - - - - Transfers from Stage 2 to Stage 3 - - - - Transfers from Stage 3 to Stage 1 - - - - Transfers from Stage 3 to Stage 2 - - - - New financial assets originated from business combination 9,163 717 - 9,880 New financial assets originated 8,487 74 - 8,561 Changes in outstanding balances 276 95 - 371 Written off and settled loans (7,717) (672) - (8,389) Total net change during the period 9,918 505 - 10,423 Balance at 30 June 2024 9,918 505 - 10,423 In determining the recoverability of the UK loan products, the Group considers any change in the credit quality of the receivable from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, the Directors believe that there is no further credit loss allowance required in excess of the loss allowance. Notes to the financial statements 30 June 2024 Cash Converters International Limited 83 Changes in the loss allowance between the beginning and end of the year are attributable to the following items:  Transfers to/(from) stages: movements due to transfers of credit exposures between Stage 1, Stage 2 and Stage 3.  New financial assets originated: movements in credit exposures and provisions for impairment due to new financial assets originated.  Changes in PDs/LGDs/EADs: movements due to changes in probability of default, loss given default and exposure at default. Expected loss rates are based on payment profiles, age and expected lifetime of the receivables, changes in underlying credit quality and historic loss experience.  Changes to model assumptions and methodologies: movements in provisions for impairment due to adjustments reflecting forward-looking macro-economic information or other assumptions.  Written-off and settled loans: derecognition of credit exposures and provisions for impairment upon write- off or repayment of receivables. Accounting policy Loan receivables that have fixed or determinable payments that are not quoted in an active market are classified as loan receivables and are measured at amortised cost using the effective interest method including transaction costs, less any impairment. Interest income is recognised by applying the effective interest rate, except for short- term receivables when the effect of discounting is immaterial. Judgement – impairment of financial assets Under AASB 9 Financial Instruments, a three-stage approach is applied to measuring ECL based on credit migration between the stages as follows:  Stage 1 At initial recognition, a provision equivalent to 12 months ECL is recognised.  Stage 2 Where there has been a significant increase in credit risk (“SICR”) since initial recognition, a provision equivalent to full lifetime ECL is required.  Stage 3 Lifetime ECL is recognised for loans where there is objective evidence of impairment. ECL are probability weighted and determined by evaluating a range of possible outcomes, taking into account the time value of money, past events, current conditions and forecasts of future economic conditions. Probability of default To measure the ECLs, loan receivables have been grouped based on shared credit risk characteristics and the days past due. The expected loss rates are based on the payment profiles of loan receivables over a period prior to 1 July 2024 and the corresponding historical credit losses experienced within this period. Default is defined as 90 days past due. For personal loans, the days past due measure used to calculate probability of default is based on days since last missed repayment and for vehicle finance loans, the days past due measure used to calculate probability of default is based on contractual repayment arrears. The default definitions align with definitions used for internal credit risk management purposes and reflect the unique customer repayment behaviour, loan management and collections strategies applied to the different loan products. Notes to the financial statements 30 June 2024 Cash Converters International Limited 84 Macro-economic scenarios The assessment of SICR and the calculation of ECL both incorporate forward-looking information. The Group has performed historical analysis to identify key economic variables impacting credit risk and expected credit losses for Personal Finance (Australia and New Zealand) and Vehicle Financing Loan (Australia only) receivables. ECLs are a probability-weighted estimate of credit losses over the expected life of the financial instrument. In compliance with AASB 9 and to account for additional risk, the ECL model is adjusted to reflect forward-looking macro-economic information. Professional judgement is exercised in applying macro-economic adjustments. An assessment was undertaken to determine the most relevant and reliable economic indicators on which to base a forward-looking assessment of ECL. For Australian loans, GDP Index and cash rate were chosen as key indicators of impairment levels for the portfolios. For New Zealand loans, unemployment rate and percentage change in GDP were selected. Using publicly available forecast rates for the indicators selected, alternate scenarios, outlined below, were determined. Cost of living pressures were also a consideration. The outcome of this macro-economic estimate is an additional $2.454 million (FY2023: additional $2.402 million) provision for Australian personal loan receivables, an additional $0.193 million (FY2023: $0.278 million) provision for New Zealand loan receivables and an additional $0.940 million (FY2023: $0.935 million) provision for Vehicle Financing loan receivables. The table below provides a summary of the macroeconomic variables used in the upside, baseline and downside scenarios as at 30 June 2024. Upside Baseline Downside Financial year Financial year Financial year 2025 2026 2025 2026 2025 2026 AU Cash rate (%) 3.1 2.7 4.2 3.8 4.6 4.2 AU GDP index 116 122 114 119 104 109 NZ unemployment rate (%) 4.8 4.8 5.1 5.1 6.9 6.6 NZ percentage change in GDP (%) 1.7 3.1 1.1 2.4 0.0 1.7 Loss given default Loss given default is estimated based on historical data related to amounts recovered post write off. Write-off policy The Group writes off financial assets in whole or in part on the following basis:  For Personal Finance loans, when payments on the loan reach 90 days past due, based on days since last missed repayment, unless the loan is in a hardship arrangement or in dispute.  For NZ Personal Finance loans, when payments on the loan reach 90 days past due, based on days since last repayment, unless the loan is in an arrangement with the customer.  For Vehicle Financing loans, the date on which all practical asset recovery efforts have been exhausted with no reasonable expectation of further recoveries, if, prior to write off, a loan has reached 180 days in contractual arrears and no payment has been received for 90 days it is subject to a specific provision for the full outstanding balance. Indicators that there is no reasonable expectation of recovery include (i) ceasing enforcement activity and (ii) where the Group’s recovery method is foreclosing on collateral and the value of the collateral such that there is no reasonable expectation of full recovery. Written off loans can subsequently be sent to third party collection agents for recovery. Notes to the financial statements 30 June 2024 Cash Converters International Limited 85 7.d) Trade and other payables 30-Jun 30-Jun 2024 2023 $’000 $’000 Current Trade payables 3,578 1,761 Accruals 23,671 17,223 27,249 18,984 The Group has financial risk management policies in place to ensure that all payables are paid within the allowed credit period in order to avoid the payment of interest on outstanding accounts. 7.e) Borrowings 30-Jun 30-Jun 2024 2023 $'000 $'000 Current Securitisation facility 102,289 109,044 Other borrowings 1,671 - 103,960 109,044 Non-current Securitisation facility 37,065 27,947 Other borrowings 3,060 - 40,125 27,947 Total 144,085 136,991 The securitisation facility represents a liability owed by CCPF Receivables Trust No 1, a consolidated subsidiary established as part of the borrowing arrangement with the Fortress Investment Group. This liability is secured against eligible receivables (which includes Small and Medium Amount Credit Contracts issued by Cash Converters Personal Finance and secured vehicle loans issued by Green Light Auto) which have been assigned to the Trust. Collections from Trust receivables are used to pay interest of the securitisation facility, with the remainder remitted to the Group twice per month. Receivables have maturities of up to 5 years and the facility has accordingly been presented as current and non-current liabilities in line with the maturities of the underlying receivables. The Group renewed the loan securitisation facility with Fortress in June 2022. The facility has a three-year availability period, with a four-year maturity term ending on 15 June 2026. The Group closed the year with undrawn securitisation facility funding lines of $10.000 million (FY2023: $11.750 million). The Group is in compliance with the requirements of the facility. Subsequent to the year-end date the Group renewed the loan securitisation facility with Fortress on 27 August 2024. The facility has a three-year availability period, with a four-year maturity term ending on 27 August 2028. Refer to note 18 for subsequent events information. During the year Cash Converters (UK) Stores Ltd secured a new $1.910 million loan to finance the acquisition of Themedawn Ltd. As part of the process it was necessary to refinance the 3 existing loans in line with their existing terms and rates. All loans are structured with repayment schedules, with the initial refinanced loans of $2.824 million scheduled to be fully repaid by March 2026. The new $1.910 million loan is structured as interest-only for the first year, with interest payments only due through to June 2025. Following this period, principal repayments will commence over a three-year term, with the loan set to be fully paid by June 2028. Accordingly, the loans are classified in the financial statements as both current and non-current liabilities based on their respective maturities. These financing facilities are secured by the assets of Cash Converters (UK) Stores Ltd. Notes to the financial statements 30 June 2024 Cash Converters International Limited 86 Reconciliation of liabilities arising from financing activities – see note 10.c. Financing arrangements Unrestricted access was available at balance date to the following lines of credit: 30-Jun 30-Jun 2024 2023 $'000 $'000 Total facilities Securitisation facilities 150,000 150,000 Used at balance date Securitisation facilities 140,000 138,250 Unused at balance date Securitisation facilities 10,000 11,750 Loan facility undertakings and review events The Group’s borrowing facilities are subject to various undertakings. The securitisation facility has various eligibility criteria which the receivables of the Group must meet to be funded under the facility. During the reporting period there have been no events of default or potential events of default. 8. Non-financial assets and liabilities 8.a) Inventories Inventories are valued at the lower of cost and net realisable value. Costs, including purchase costs are assigned to individual inventory items on hand. Net realisable value represents the estimated selling price less all estimated costs of completion and costs necessary to make the sale. When determining the net realisable value of inventories, an estimation is made as to the costs necessary to make the sale in the ordinary course of business. Judgement is applied to determine which costs are necessary to make the sale considering the specific facts and circumstances, including the nature of the inventories. 30-Jun 30-Jun 2024 2023 $'000 $'000 New and pre-owned goods at cost 37,276 29,439 Provision for obsolete stock (4,240) (2,946) New and pre-owned goods (net) 33,036 26,493 Notes to the financial statements 30 June 2024 Cash Converters International Limited 87 8.b) Property, plant and equipment Leasehold improvements Plant and equipment Total $'000 $'000 $'000 Cost Balance at 1 July 2022 14,067 9,601 23,668 Additions 1,186 1,843 3,029 Additions from business combinations 3,035 1,496 4,531 Disposals (1,720) (641) (2,361) Foreign currency exchange differences (33) 15 (18) Balance at 30 June 2023 16,535 12,314 28,849 Additions 3,303 1,685 4,988 Additions from business combinations 4,365 2,203 6,568 Disposals (785) (897) (1,682) Foreign currency exchange differences (6) (7) (13) Balance at 30 June 2024 23,412 15,298 38,710 Depreciation Balance at 1 July 2022 12,143 6,683 18,826 Disposals (1,230) (535) (1,765) Depreciation expense 702 1,056 1,758 Additions from business combinations 1,777 1,073 2,850 Impairment of non-current assets 319 289 608 Foreign currency exchange differences (21) 11 (10) Balance at 30 June 2023 13,690 8,577 22,267 Disposals (543) (440) (983) Depreciation expense 1,351 1,258 2,609 Additions from business combinations 2,862 1,171 4,033 Impairment of non-current assets 29 213 242 Foreign currency exchange differences (135) (45) (180) Balance at 30 June 2024 17,254 10,734 27,988 Net book value Balance at 30 June 2023 2,845 3,737 6,582 Balance at 30 June 2024 6,158 4,564 10,722 An impairment of $0.242 million has been recognised in the year ended 30 June 2024 (FY2023: $0.608 million), see note 5. See note 25.c for the accounting policy. Notes to the financial statements 30 June 2024 Cash Converters International Limited 88 8.c) Leases The Group’s weighted average incremental borrowing rates applied to the lease liabilities is 9.15% (FY2023: 8.26%) for leases in Australia, 8.61% (FY2023: 8.21%) for leases in New Zealand and 9.35% (FY2023: 7.33%) for leases in the United Kingdom. Right-of-use assets 30-Jun 30-Jun 2024 2023 $’000 $’000 Cost Balance at beginning of year 88,687 82,151 Additions 5,207 1,579 Terminations (3,396) (3,012) Other remeasurements 309 3,231 Additions from business combinations 11,293 5,602 Lease extensions 6,217 770 Lease reductions (3,400) (1,652) Foreign currency exchange differences (54) 18 Balance at end of year 104,863 88,687 Depreciation Balance at beginning of year 41,641 31,930 Terminations (3,329) (3,012) Depreciation expense 9,965 7,109 Impairment of non-current assets (310) 5,610 Foreign currency exchange differences (34) 4 Balance at end of year 47,933 41,641 Net book value 56,930 47,046 Amounts recognised in profit or loss Depreciation expense on right-of-use assets 9,965 7,109 Interest expense on lease liabilities 5,761 5,245 Expense relating to short-term leases 651 298 Impairment of non-current assets (310) 5,610 16,067 18,262 The Group right-of-use assets relate to property leases. The average remaining lease term is 5.48 years (FY2023: 5.95 years). See note 25.b for the accounting policy. Notes to the financial statements 30 June 2024 Cash Converters International Limited 89 Lease liabilities 30-Jun 30-Jun 2024 2023 $'000 $'000 Current 8,541 7,276 Non-current 62,448 56,466 70,989 63,742 Maturity analysis Year 1 14,485 12,215 Year 2 14,207 11,285 Year 3 12,733 10,783 Year 4 11,976 10,007 Year 5 10,951 9,758 Onwards 34,505 35,621 98,857 89,669 Less: unaccrued interest (27,868) (25,927) 70,989 63,742 The Group does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities are monitored within the Group’s treasury function. 8.d) Goodwill Net carrying amount 30-Jun 30-Jun 2024 2023 $'000 $'000 Balance at beginning of year 3,279 110,481 Recognition on business combinations 7,946 3,315 Impairment of goodwill (3,295) (110,481) Foreign currency exchange differences 20 (36) Balance at end of year 7,950 3,279 Goodwill related to the acquisitions of Cash Converters (UK) Stores Pty Ltd, Themedawn Limited (UK) and Australian franchise stores during the period as disclosed in note 14 has been allocated to the relevant segments. See note 5 relating to the impairment of non-current assets. Notes to the financial statements 30 June 2024 Cash Converters International Limited 90 Accounting policy Goodwill arising on an acquisition of a business is carried at cost at the date of acquisition of the business less accumulated impairment losses, if any. For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (“CGUs”) that are expected to benefit from the synergies of the combination. CGUs to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the CGU is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the CGU and then to the other assets of the unit pro rata based on the carrying amount of each asset in the CGU. An impairment loss recognised for goodwill is recognised directly in profit or loss and is not reversed in subsequent periods. On disposal of the relevant CGU, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. Allocation of goodwill to CGUs Goodwill has been allocated for impairment testing purposes to the following CGUs or groups of CGUs: 30-Jun 30-Jun 2024 2023 $'000 $'000 Store Operations 549 - New Zealand - 3,279 UK 7,401 - 7,950 3,279 8.e) Intangible assets Allocation of other intangible assets to CGUs 30-Jun 30-Jun 2024 2023 $'000 $'000 Personal Finance 5,037 4,395 Vehicle Financing 647 1,150 Store Operations 2,929 3,250 New Zealand 5,484 5,787 UK 6,201 1,283 Corporate Assets 4,873 4,678 25,171 20,543 Other intangible assets are allocated to their respective CGU and tested for impairment when impairment indicators are identified. Intangible assets with indefinite lives included within other intangible assets are tested for impairment annually. Refer to note 5 for details of impairment testing. The recoverable value of other intangible assets is assessed using the same assumptions and methods as the goodwill for the related CGUs. Notes to the financial statements 30 June 2024 Cash Converters International Limited 91 Categories of other intangible assets Reacquired Rights Trade names & customer relationships Software Total $'000 $'000 $'000 $'000 Cost Balance at 1 July 2022 9,573 17,463 22,175 49,211 Additions - - 1,539 1,539 Additions from business combinations 3,749 2,267 108 6,124 Foreign currency exchange differences 37 (25) 60 72 Balance at 30 June 2023 13,359 19,705 23,882 56,946 Additions - - 1,862 1,862 Additions from business combinations 6,533 - - 6,533 Disposals - - (29) (29) Foreign currency exchange differences (8) (9) - (17) Balance at 30 June 2024 19,884 19,696 25,715 65,295 Amortisation Balance at 1 July 2022 6,670 9,360 16,192 32,222 Amortisation expense 675 220 2,654 3,549 Additions from business combinations - - 108 108 Impairment of non-current assets 395 59 - 454 Foreign currency exchange differences 33 - 37 70 Balance at 30 June 2023 7,773 9,639 18,991 36,403 Disposals - - (29) (29) Amortisation expense 1,772 212 1,708 3,692 Impairment of non-current assets 71 (3) - 68 Foreign currency exchange differences (9) - (1) (10) Balance at 30 June 2024 9,607 9,848 20,669 40,124 Net book value Balance at 30 June 2023 5,586 10,066 4,891 20,543 Balance at 30 June 2024 10,277 9,848 5,046 25,171 Impairment of $0.068 million has been recognised in the year ended 30 June 2024 (FY2023: $0.454 million), see note 5. See note 25.d for the accounting policy. Notes to the financial statements 30 June 2024 Cash Converters International Limited 92 8.f) Deferred tax balances 30-Jun 30-Jun 2024 2023 $'000 $'000 Deferred tax assets Allowance for expected credit losses 14,559 12,541 Accruals 1,138 371 Provisions 7,355 5,104 Leases 20,918 17,366 Other 526 144 Carry forward losses 8,312 9,506 52,808 45,032 Deferred tax liabilities Fixed assets (959) (1,053) Leases (16,459) (12,496) Intangible assets (3,750) (1,112) Other (341) (702) (21,509) (15,363) Net deferred tax assets 31,299 29,669 Reconciliation of net deferred tax assets Opening balance at beginning of period 29,669 26,089 Tax expense during period recognised in profit or loss 2,745 2,798 Tax on business combinations (715) (301) Prior year adjustment (400) 431 Other - 652 Closing balance at end of period 31,299 29,669 A net deferred tax asset of $31.299 million (FY2023: $29.669 million) is recognised in the consolidated statement of financial position. There is a critical accounting judgement with respect to the recognition of deferred tax assets including where they arise from previous years losses and will be offset against any future taxes on profit. In making this assessment, a forward-looking estimation of taxable profit was made, based on management’s best estimate of future performance from continuing operations as at 30 June 2024. This includes a deferred tax asset in respect of carry forward losses of $7.684 million (FY2023: $8.607 million) recognised in relation to the Group’s UK operations. Profit has been achieved in the last three years with the FY2024 year reflecting utilisation of the carry forward losses because of taxable profits arising. Ongoing taxable profit forecasts have supported continued recognition in full of the deferred tax asset that arises from unused tax losses from previous years. Also included, is a deferred tax asset in respect of carry forward losses of $0.628 million (FY2023: $0.899 million) recognised in relation to the Group’s NZ operations. Continuing operations in Australia made a taxable profit during the current year and is expected to be profitable in future years, therefore supporting the recognition of net deferred tax assets arising from temporary differences in Australia. Notes to the financial statements 30 June 2024 Cash Converters International Limited 93 A summary of the Group’s net deferred tax asset position by geographic location is below: 30-Jun 30-Jun 2024 2023 $'000 $'000 Australia 22,933 20,954 New Zealand 698 413 United Kingdom 7,668 8,302 31,299 29,669 8.g) Provisions 30-Jun 30-Jun 2024 2023 $'000 $'000 Current Employee benefits 10,953 10,419 Fringe benefits tax 87 87 Make good obligation of property leases 717 633 Other 230 641 11,987 11,780 Non-current Employee benefits 784 490 Make good obligation of property leases 7,658 3,850 8,442 4,340 Notes to the financial statements 30 June 2024 Cash Converters International Limited 94 Movements in the provisions were as follows: Employee benefits Fringe benefits tax Make good - leases Other Total $'000 $'000 $'000 $'000 $'000 2024 Carrying amount at start of year 10,909 87 4,483 641 16,120 Acquired through business combinations 496 - 3,628 - 4,124 Transfer from share-based payment reserve - - - - - Remeasurements and additions - - 1,133 - 1,133 Charged to profit or loss 623 16 (370) 28 297 Utilised during the year (287) (16) (497) (440) (1,240) Foreign currency exchange differences (4) - (2) 1 (5) Carrying amount at end of year 11,737 87 8,375 230 20,429 2023 Carrying amount at start of year 9,360 37 2,099 921 12,417 Acquired through business combinations 677 - 461 - 1,138 Transfer from share-based payment reserve - - - 198 198 Remeasurements and additions - - 2,046 - 2,046 Charged to profit or loss 897 55 101 - 1,053 Utilised during the year (19) (5) (221) (501) (746) Foreign currency exchange differences (6) - (3) 23 14 Carrying amount at end of year 10,909 87 4,483 641 16,120 Notes to the financial statements 30 June 2024 Cash Converters International Limited 95 9. Issued capital Total issued capital 30-Jun 30-Jun 30-Jun 30-Jun 2024 2023 2024 2023 Number Number $’000 $’000 Balance at beginning of period 627,545,015 627,545,015 251,213 251,213 Issued during the period - - - - Balance at end of period 627,545,015 627,545,015 251,213 251,213 Fully paid ordinary shares carry one vote per share and carry the right to dividends. Issued capital excluding treasury shares 30-Jun 30-Jun 30-Jun 30-Jun 2024 2023 2024 2023 Number Number $’000 $’000 Balance at beginning of period 622,019,969 621,285,981 249,860 249,663 Treasury shares acquired by employee share trust (3,230,154) (5,525,046) (672) (1,353) Treasury shares issued by employee share trust 5,525,046 6,259,034 1,353 1,550 Balance at end of period 624,314,861 622,019,969 250,541 249,860 Treasury shares 30-Jun 30-Jun 30-Jun 30-Jun 2024 2023 2024 2023 Number Number $’000 $’000 Balance at beginning of period 5,525,046 6,259,034 1,353 1,550 Treasury shares acquired 3,230,154 5,525,046 672 1,353 Treasury shares issued (5,525,046) (6,259,034) (1,353) (1,550) Balance at end of period 3,230,154 5,525,046 672 1,353 Shares issued to employees are recognised on a first-in-first-out basis. The shares may be acquired on market and are held as treasury shares until such time as they are vested. Forfeited shares are reallocated in subsequent grants. Under the terms of the trust deed, Cash Converters is required to provide the employee share trust with the necessary funding for the acquisition of shares. Notes to the financial statements 30 June 2024 Cash Converters International Limited 96 10. Cash flow information 10.a) Reconciliation of profit after income tax to net cash inflow from operating activities 30-Jun 30-Jun 2024 2023 $’000 $’000 Profit / (loss) after tax 17,397 (97,155) Non-cash adjustment to reconcile profit after tax to net cash flows: Loss on disposal of non-current assets 130 16 Amortisation 3,692 3,549 Depreciation 12,574 8,867 Movement in expected credit loss provision 1,931 5,071 Impairment of goodwill 3,295 110,481 Impairment of non-current assets - 6,672 Share-based payments 831 807 Lease modification (1,447) (1,780) Share of net profit of equity accounted investment - (251) Changes in assets and liabilities: Trade and loan receivables (6,026) (44,892) Inventories 2,574 (1,093) Other assets (428) (642) Trade and other payables 3,760 1,279 Provisions 185 2,340 Income tax payables (15) (4,805) Net cash provided by / (used in) operating activities 38,453 (11,536) Cash flows are included in the cash flow statement on a net basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows. Notes to the financial statements 30 June 2024 Cash Converters International Limited 97 10.b) Non-cash investing and financing activities 30-Jun 30-Jun 2024 2023 $'000 $'000 Net recognition of right of use asset and liability 6,799 2,162 Share based payment reserve transferred to retained earnings 29 723 Share based payment reserve transferred to provisions - 198 10.c) Reconciliation of liabilities arising from financing activities Opening Net Non-cash Closing cashflows transaction costs $'000 $'000 $'000 $'000 2024 Borrowing facilities 138,250 1,750 4,241 144,241 Transaction costs and other (1,259) - 1,103 (156) Lease liabilities 63,742 (15,247) 22,494 70,989 200,733 (13,497) 27,838 215,074 2023 Borrowing facilities 70,250 68,000 - 138,250 Transaction costs and other (1,885) - 626 (1,259) Lease liabilities 64,817 (12,233) 11,158 63,742 133,182 55,767 11,784 200,733 Notes to the financial statements 30 June 2024 Cash Converters International Limited 98 11. Critical estimates and judgements In applying the Group's accounting policies, management continually evaluates judgements, estimates and assumptions based on experience and other factors, including expectations of future events that may have an impact on the Group. All judgements, estimates and assumptions made are believed to be reasonable based on the most current set of circumstances available to management. Actual results may differ from the judgements, estimates and assumptions. Significant judgements, estimates and assumptions made by management in the preparation of these financial statements are outlined below. Significant accounting judgements In the process of applying the Group’s accounting policies, management has made the following judgements, apart from those involving estimations, which have the most significant effect on the amount recognised in the financial statements:  Recoverability of deferred tax assets – see note 6.c Significant accounting estimates and assumptions The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:  Impairment of goodwill and other intangible assets – see note 5 and 8.d  Incremental borrowing rate used in calculating lease asset and liability values – see note 8.c  Useful lives of property, plant and equipment – see note 25.c  Useful lives of other intangible assets – see note 25.d  Impairment of financial assets (including loan receivables) – see note 7.b and 7.c  Impairment for inventory – see note 8.a  What constitutes a business combination – see note 14  Fair value of performance rights granted – see note 20.b Notes to the financial statements 30 June 2024 Cash Converters International Limited 99 12. Financial risk management The Group’s activities expose the Group to a variety of financial risks: market risks (including currency risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on financial performance. Financial risk and capital management is carried out in accordance with policies approved by the Board. The Board reviews and approves written principles of overall risk management, as well as written policies covering specific areas such as managing capital, mitigating interest rates, liquidity, foreign exchange and credit risk. The Audit and Risk Committee assists the Board in monitoring the implementation of risk management policies. The Group’s treasury function provides services to the business, co-ordinates access to domestic and international financial markets, and manages the financial risks relating to the operations of the Group. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. 12.a) Categories of financial instruments 30-Jun 30-Jun 2024 2023 $'000 $'000 Financial assets Cash and cash equivalents 56,289 71,565 Trade and other receivables 13,981 10,219 Loan receivables 238,712 224,729 308,982 306,513 Financial liabilities Trade and other payables 27,249 18,984 Borrowings 144,085 136,991 171,334 155,975 The Group has no material financial assets or liabilities that are held at fair value. Notes to the financial statements 30 June 2024 Cash Converters International Limited 100 12.b) Market risk The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The types of market risks to which the Group is exposed and the manner in which it manages and measures the risk remain consistent with the previous period. 12.b) i) Foreign exchange risk The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations arise. As a result of operations in New Zealand and the United Kingdom, the Group’s balance sheet can be affected by movements in the AUD/NZD and AUD/GBP exchange rates. Spot exchange rates are normally used to translate transactions into the reporting currency. 12.b) ii) Cash flow and fair value interest rate risk The Company and the Group are exposed to interest rate risk as entities in the consolidated Group borrow funds at variable rates and place funds on deposit at variable rates. Loans issued by the Group are at fixed rates. Interest rate risk is managed by the Group through monitoring interest rates and detailed forecasting of the operating cashflows of the underlying businesses. The Company and the Group’s exposures to interest rates on financial assets and financial liabilities are detailed in note 12.e and 12.f. 12.b) iii) Interest rate sensitivity analysis The sensitivity analyses below have been determined based on the exposure to interest rates at the reporting date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period. A 50-basis point increase or decrease is used because this represents management’s assessment of the possible change in interest rates. At reporting date, if interest rates had been 50 basis points higher or lower and all other variables were held constant, the Group’s net profit would increase/decrease by approximately $0.561 million (FY2023: increase/decrease by approximately $0.613 million). 12.c) Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics, other than its franchisees. Refer to note 7.b and 7.c. The Group has a policy of obtaining sufficient collateral or other securities from franchisees. Most loans within the financing divisions relate to loans made by Cash Converters Personal Finance and Green Light Auto which may be both secured and unsecured loans. Credit risk is present in relation to all loans made, which is managed within an agreed corporate policy on customer acceptance and ongoing review of recoverability. For secured loans, the credit risk considers the underlying value of the collateral against the loan. Notes to the financial statements 30 June 2024 Cash Converters International Limited 101 12.d) Liquidity risk Ultimate responsibility for liquidity risk management rests with the Board of Directors, who have established a comprehensive liquidity risk management framework to address the Group’s short, medium, and long-term funding and liquidity needs. The Group manages liquidity risk by maintaining adequate cash reserves, banking facilities, and reserve borrowing facilities, including the availability of a warehouse securitization facility. This facility allows the Group to securitize loan portfolios, providing an additional source of liquidity. The Group continuously monitors forecasted and actual cash flows, ensuring that financial assets and liabilities are matched in terms of maturity profiles. To further reduce liquidity risk, the Group also has access to additional undrawn facilities, as detailed in note 7.e. 12.e) Remaining contractual maturity for its financial liabilities The following table details the Group’s remaining contractual maturity for its financial liabilities. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows. To the extent that interest flows are at floating rates, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the Group may be required to pay. 1 year or less 1 to 5 years More than 5 years Total Carrying value 30 June $'000 $'000 $'000 $'000 $'000 2024 Non-interest bearing 27,249 - - 27,249 27,249 Variable interest rate instruments 16,300 156,300 - 172,600 144,085 43,548 156,300 - 199,848 171,334 2023 Non-interest bearing 18,984 - - 18,984 18,984 Variable interest rate instruments 14,262 166,228 - 180,490 136,991 33,246 166,228 - 199,474 155,975 The amounts included above for variable interest rate instruments are subject to change if actual rates differ from those applied in the above average calculations. Notes to the financial statements 30 June 2024 Cash Converters International Limited 102 12.f) Financial assets The following table details the Group’s expected maturity for its financial assets. The table below has been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets except where the Group anticipates that the cash flow will occur in a different period. 1 year or less 1 to 5 years More than 5 years Total $'000 $'000 $'000 $'000 2024 Non-interest bearing 28,651 - - 28,651 Fixed interest rate instruments 7,426 7,709 - 15,135 Variable interest rate instruments 27,878 - - 27,878 63,955 7,709 - 71,664 2023 Non-interest bearing 54,926 - - 54,926 Fixed interest rate instruments 7,071 5,008 - 12,079 Variable interest rate instruments 15,693 - - 15,693 77,690 5,008 - 82,698 The amounts included above for variable interest rate instruments are subject to change if actual rates differ from those applied in the above average calculations. 12.g) Fair value of financial instruments The fair value of the Group’s financial assets and liabilities are determined on the following basis: Financial assets and financial liabilities that are not measured at fair value on a recurring basis (but where fair value disclosures are required) At 30 June 2024 and 30 June 2023, the carrying amount of financial assets and financial liabilities for the Group is considered to approximate their fair values. The fair value of the monetary financial assets and financial liabilities is based upon market prices where a market price exists or by discounting the expected future cash flows by the current interest rates for assets and liabilities with similar risk profiles. Notes to the financial statements 30 June 2024 Cash Converters International Limited 103 Financial assets and financial liabilities that are measured at fair value on a recurring basis Subsequent to initial recognition, at fair value financial instruments are grouped into Levels 1 to 3 based on the degree to which the fair value is observable. Levels are defined as follows:  Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.  Level 2 fair value measurements are those derived from inputs other than quoted prices included with Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).  Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). At 30 June 2024 and 30 June 2023, the Group has no material financial assets and liabilities that are measured on a recurring basis at fair value. 13. Capital management 13.a) Risk management The Board determines the appropriate capital structure of the Group, specifically how much is raised from shareholders (equity) and how much is borrowed from financial institutions and capital markets (debt), in order to finance the Group’s activities both now and in the future. The Board considers the Group’s capital structure and its dividend policy at least twice a year ahead of announcing results, in the context of its ability to continue as a going concern, to execute the strategy and to deliver its business plan. Financial risk and capital management is carried out in accordance with policies approved by the Board. The Board reviews and approves written principles of overall risk management, as well as written policies covering specific areas such as managing capital, mitigating interest rates, liquidity, foreign exchange and credit risk. The Audit and Risk Committee assists the Board in monitoring the implementation of risk management policies. 13.b) Dividends Year ended Year ended 30-June-2024 30-June-2023 Cents per share $'000 Cents per share $'000 Recognised amounts on fully paid ordinary shares 2022 Final dividend Paid 14-Oct-22 1.00 6,275 2023 Interim dividend Paid 14-Apr-23 1.00 6,275 2023 Final dividend Paid 13-Oct-23 1.00 6,275 2024 Interim dividend Paid 12-Apr-24 1.00 6,275 12,550 12,550 Unrecognised amounts on fully paid ordinary shares 2023 Final dividend Paid 13-Oct-23 1.00 6,275 2024 Final dividend To be paid 11-Oct-24 1.00 6,275 Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period. Notes to the financial statements 30 June 2024 Cash Converters International Limited 104 Franking credits 30-Jun 30-Jun 2024 2023 $'000 $'000 Franking credits available on a tax paid basis 74,544 72,531 14. Business combination Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration for each acquisition is measured at the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the consolidated entity in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the consolidated entity reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period, or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised as of that date. The measurement period is the period from the date of acquisition to the date the consolidated entity obtains complete information about facts and circumstances that existed as of the acquisition date – and is subject to a maximum of one year. During the period the Group acquired:  Cash Converters (UK) Stores (formerly Capital Cash Limited (“Capital Cash”)), previously the largest franchise group in the United Kingdom, which includes a network of 42 stores, for a total consideration of $23.072 million ($20.355 million, net of cash acquired)  Themedawn Limited (“Themedawn”), a franchise group within the United Kingdom, which includes a network of 5 stores, for a total consideration of $1.591 million ($1.462 million, net of cash acquired)  The trade and other assets of three Cash Converters franchised stores in Australia (listed below) for total consideration of $2.586 million ($2.528 million, net of cash acquired) Store State Acquisition date Penrith NSW 2 November 2023 Ipswich QLD 8 November 2023 Belmont WA 12 December 2023 These acquisitions support the ongoing Group objective to acquire earnings accretive store networks, based on sensible valuation metrics, which will accelerate Group earnings. The values identified in relation to the Cash Converters (UK) Stores (“CCUKS”) and Australian franchise acquisitions during the current period are final as at the reporting date. The values identified in relation to the Themedawn acquisition during the current period are provisional as at the reporting date, as the allocation of fair values to the individual assets and liabilities has yet to be finalised. This includes the identification and valuation of separately identifiable intangible assets and the recognition of any deferred tax balances arising on acquisition. The New Zealand Cash Converters (“CCNZ”) network, consisting of 11 Corporate stores and the rights to franchise fees of 11 franchise stores was acquired in the comparative year ended 30 June 2023. Notes to the financial statements 30 June 2024 Cash Converters International Limited 105 14.a) Summary of acquisition The determined fair values of the assets and liabilities acquired during the periods as at the date of acquisition are as follows, along with finalised fair values of the assets and liabilities acquired during the prior comparative period: Themedawn Australian Franchises CCUKS New Zealand 1-Jun-24 FY2024 6-Jul-23 30-Nov-22 $'000 $'000 $'000 $'000 Net assets acquired Cash and cash equivalents 129 58 2,717 1,593 Trade and other receivables 16 10 1,197 556 Prepayments 4 - 973 217 Loan Receivables 586 1,035 9,294 12,000 Provision for loan receivables (25) (268) (445) (3,298) Inventories 347 595 8,175 1,456 Plant and Equipment 189 350 1,996 1,681 Other intangible assets 206 587 5,740 6,016 Right of use assets 1,161 2,185 7,947 5,602 Deferred tax liability (30) - (685) (301) Borrowings (82) - (4,159) - Trade and other payables (125) (9) (5,536) (1,282) Provisions (404) (486) (3,234) (1,138) Lease liabilities (1,161) (2,020) (7,525) (5,896) 811 2,037 16,455 17,206 Consideration satisfied in cash 1,591 2,586 23,072 15,391 Previously recognised equity interest - - - 5,130 Goodwill arising on the acquisition 780 549 6,617 3,315 Goodwill arose in the business combinations because the cost of the combinations included a control premium paid to acquire the CCUKS network, Themedawn network and Australian franchise stores. In addition, the consideration paid for the combinations effectively included amounts in relation to the benefit of expected synergies, revenue growth, future market development and the assembled workforce of the network. These benefits are not recognised separately from goodwill as the future economic benefits from them cannot be reliably measured. No amount of the Goodwill recognised is expected to be deductible for tax purposes. Goodwill is tested annually for impairment. 14.b) Purchase consideration – cash outflow 30-Jun-24 30-Jun-23 $'000 $'000 Cash outflow to acquire business combinations Cash consideration 27,249 15,391 Less cash balances acquired (2,904) (1,593) Net outflow of cash - investing activities 24,345 13,798 Notes to the financial statements 30 June 2024 Cash Converters International Limited 106 14.c) Revenue and profit or loss contribution Cash Converters UK Stores (“CCUKS”) The CCUKS business contributed revenues of $60.419 million and net profit before income tax of $3.423 million to the Group for the period from 1 July 2023 to 30 June 2024. Australian franchise store acquisitions The acquired Australian franchise stores contributed revenues of $3.579 million and net profit before income tax of $0.269 million to the Group for the periods from their respective dates of acquisition to 30 June 2024. If the acquisitions had occurred on 1 July 2023, for the year ended 30 June 2024 consolidated pro-forma revenue for the Group would include an additional $2.268 million and the consolidated pro-forma net profit before income tax would include an additional profit of $0.138 million. These amounts have been calculated using the data examined as part of the due diligence conducted prior to the Australian franchise acquisitions. Themedawn Limited (UK) Themedawn contributed revenues of $0.563 million and net profit before income tax of $0.056 million to the Group for the period from 1 June 2024 to 30 June 2024. If the acquisition had occurred on 1 July 2023, for the year ended 30 June 2024 consolidated pro-forma revenue for the Group would include an additional $8.492 million and the consolidated pro-forma net profit before income tax would include an additional profit of $0.225 million. These amounts have been calculated using the May 2024 year-to-date trial balance provided as part of the purchase price accounting process. New Zealand The acquired business contributed revenues of $13.810 million and net loss before income tax of $2.566 million to the Group for the period from 30 November 2022 to 30 June 2023. If the acquisition had occurred on 1 July 2022, for the year ended 30 June 2023 consolidated pro-forma revenue for the Group would include an additional $9.177 million and the consolidated pro-forma net profit before income tax would include an additional profit of $0.783 million. These amounts have been calculated using the monthly financials provided under the previously recorded equity accounting method. 14.d) Acquisition related costs Acquisition related costs are included within the statement of profit or loss, operating cash flows and in the statement of cash flows as summarised below: Themedawn Limited (UK) Australian Franchises CCUKS 1-Jun-24 FY2024 6-Jul-23 $’000 $’000 $’000 Acquisition related costs Administrative expenses - 150 165 Other expenses 131 14.e) Prior period The business combinations completed during FY2023 were all finalised as at 30 June 2023 and as such there are no further changes to the accounting for those business combinations. 189 - Notes to the financial statements 30 June 2024 Cash Converters International Limited 107 14.f) Significant accounting judgements, estimates and assumptions The Group has applied judgement in determining what constitutes a business combination as well as applying judgement to classify all aspects of CCUKS as a single business combination – that is, an aggregation of retail, pawnbroking and general head office. This business combination is structured in a way that the acquired business becomes a 100% owned subsidiary of Cash Converters UK Holdings Ltd, which itself is a 100% owned subsidiary of CCIL. The Group has applied judgement to classify the individual Australian franchise businesses acquired as individually immaterial and as such has disclosed the business acquisitions in aggregate. This is consistent with past acquisitions of Australian franchise stores. The Themedawn acquisition has been provisionally accounted for as the allocation of fair value across the separately identifiable intangible assets and the recognition of any deferred tax balances arising on acquisition has yet to be completed and the harmonisation of accounting policies of UK franchise acquisitions with those of the holding company is still in progress. 15. Interests in other entities 15.a) Subsidiaries Controlled entities of Cash Converters International Limited: Name of entity Country of incorporation Ownership interest 2024 2023 Cash Converters (Cash Advance) Pty Ltd 1 2 Australia 100% 100% Cash Converters (Stores) Pty Ltd 1 2 Australia 100% 100% Cash Converters Personal Finance Pty Ltd 1 2 Australia 100% 100% Finance Administrators of Australia Pty Ltd 1 2 Australia 100% 100% Mon-E Pty Ltd 1 2 Australia 100% 100% CCPF Receivables Trust No 1 2 Australia 100% 100% Cash Converters Pty Ltd 1 2 Australia 100% 100% Cash Converters Finance Corporation Pty Ltd 3 4 Australia 64.33% 64.33% Cash Converters UK Holdings Ltd UK 100% 100% Cash Converters (UK) Stores Ltd UK 100% 100% Cash Converters (UK) Ltd UK 100% 100% Themedawn Limited (UK) UK 100% 100% Cash Converters (NZ) Pty Ltd 1 2 Australia 100% 100% Cash Converters Holdings (NZ) Ltd NZ 100% 100% Cash Converters (NZ) Personal Finance Ltd NZ 100% 100% Cash Converters (NZ) Franchise Ltd NZ 100% 100% Cash Converters (NZ) Stores Ltd NZ 100% 100% Cash Converters USA Pty Ltd 3 4 Australia 99.285% 99.285% CC Acquisitions Pty Ltd 2 Australia 100% 100% Green Light Auto Group Pty Limited 1 2 Australia 100% 100% Safrock Finance Corporation (QLD) Pty Ltd 2 Australia 100% 100% Cash Converters Employee Share Trust Australia 100% 100% 1 These companies are parties to the Deed of Cross Guarantee and members of the Closed Group as at 30 June 2024. 2 These companies are members of the Australian tax consolidated group. 3 Non-controlling interest is not considered material in these subsidiaries. 4 Converted from a public company limited by shares to a proprietary company limited by shares during the prior period. Notes to the financial statements 30 June 2024 Cash Converters International Limited 108 15.b) Deed of cross guarantee Cash Converters International Limited and certain wholly-owned companies (“the Closed Group”), identified in note 15.a) above, are parties to a Deed of Cross Guarantee (“the Deed”). The effect of the Deed is that members of the Closed Group guarantee to each creditor payment in full of any debt in the event of winding up of any of the members under certain provisions of the Corporations Act 2001. ASIC Corporations Instrument 2016/785, issued on 28 September 2016, provides relief to parties to the Deed from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports and Directors’ reports, subject to certain conditions as set out therein. Pursuant to the requirements of this Corporations Instrument, a summarised consolidated statement of profit or loss and other comprehensive income for the year ended 30 June 2024 and consolidated statement of financial position as at 30 June 2024, comprising the members of the Closed Group after eliminating all transactions between members, are set out on the following pages. Although CCPF Receivables Trust No 1 is not a party to the Deed, this entity facilitates the Fortress Investment Group borrowings within the Group (note 7.e) and as a result, for transparency and consistency with prior reporting periods, the Group has elected to include them within the Closed Group results below. Summarised statement of profit or loss and comprehensive income 30-Jun 30-Jun 2024 2023 $'000 $'000 Profit / (loss) before income tax 21,443 (91,488) Income tax expense (8,048) (5,657) Total comprehensive income / (loss) 13,395 (97,145) Summary of movements in Closed Group’s retained (losses) / earnings 30-Jun 30-Jun 2024 2023 $'000 $'000 Retained (losses) / earnings at beginning of year (63,818) 46,600 Transfer reserve balance (29) (723) Dividend paid (12,550) (12,550) Net profit / (loss) 13,395 (97,145) Retained losses at end of year (63,002) (63,818) Notes to the financial statements 30 June 2024 Cash Converters International Limited 109 Statement of financial position 30-Jun 30-Jun 2024 2023 $'000 $'000 Current assets Cash and cash equivalents 47,241 62,918 Trade and other receivables 4,617 2,750 Loan receivables 170,547 182,068 Inventories 22,969 26,494 Prepayments 2,494 2,365 Total current assets 247,868 276,595 Non-current assets Trade and other receivables 21,788 1,739 Loan receivables 58,162 42,660 Plant and equipment 7,929 6,485 Right-of-use assets 48,741 46,858 Deferred tax assets 23,632 21,366 Goodwill 549 3,279 Other intangible assets 19,258 19,592 Total non-current assets 180,059 141,979 Total assets 427,927 418,574 Current liabilities Trade and other payables 15,600 12,990 Lease liabilities 7,271 7,196 Current tax payable 3,212 338 Borrowings 102,289 109,044 Provisions 11,405 11,531 Total current liabilities 139,777 141,099 Non-current liabilities Lease liabilities 55,889 56,301 Borrowings 37,065 27,948 Provisions 5,370 4,319 Total non-current liabilities 98,324 88,568 Total liabilities 238,101 229,667 Net assets 189,826 188,907 Equity Issued capital 250,541 249,860 Reserves 2,287 2,865 Retained losses (63,002) (63,818) Total equity 189,826 188,907 Notes to the financial statements 30 June 2024 Cash Converters International Limited 110 15.c) Interests in associates Prior to 30 November 2022 the Group held an investment in the Cash Converters Holdings Limited Partnership, the master franchisor in New Zealand. The company held a 25% equity interest (ownership and voting interest) in all aspects of the New Zealand enterprise, including corporate stores, franchise contracts and financial services. On 30 November 2022, the Group acquired the remaining 75% interest (refer to note 14). This business combination is structured in such a way that the acquired business is now recognised as a 100% owned subsidiary of CCIL. A fair value assessment of the equity interest held by the business as at acquisition date was performed, based on the total consideration paid for the acquisition. This assessment determined that the previously held equity interest of $5.338 million was being held above fair value. As a result, an adjustment was made at acquisition date to reduce the equity interest by $0.208 million, with an equivalent expense recognised through other expenses in the statement of profit or loss and other comprehensive income in FY2023. Summarised financial information In FY2023, the Group ceased its holdings in Cash Converters Holdings Limited Partnership and consequently, no assets or liabilities are reflected in the summary of financial information. 16. Contingent liabilities The Group undertakes ongoing compliance activities including regular engagement with regulators, breach reporting, reviews of product offerings and customer conduct and service delivery supervision. Where a breach has occurred, regulators may impose or apply to a Court to seek fines and / or other sanctions. These matters include investigations of a number of issues which were notified to, or identified by, regulators. In the past some of these activities have resulted in remediation programs. Where required, the Group consults with the relevant regulator on the proposed remediation action. It should be noted that, whilst no action is currently underway, there are matters ongoing where the Group is providing information requested by regulators to support its compliance with laws and regulatory obligations. The Group occasionally receives claims and writs for damages and other matters arising from its operations. Where in the opinion of the Directors it is deemed appropriate, a specific provision is made, otherwise the Directors deem such matters are either without merit or of such kind or involve such amounts that would not have a material adverse effect on the operating results or financial position of the economic entity if disposed of unfavourably. The Directors are not aware of any material contingent liabilities in existence as at 30 June 2024 requiring disclosure in the financial statements. Notes to the financial statements 30 June 2024 Cash Converters International Limited 111 17. Commitments The Group has services contracts on software subscriptions, marketing retainers and consulting services. The minimum contractual commitments resulting from these agreements are outlined below. Capital expenditure As at 30 June 2024, capital expenditure commitments were $232 thousand (2023: nil). Other contractual commitments 30-Jun 30-Jun 2024 2023 $'000 $'000 Within one year 4,094 3,094 One to five years 2,992 1,567 Longer than five years 109 225 7,195 4,886 As at 30 June 2024, revolving credit commitment on the Line of Credit loans to customers was 30 June 2024, $1.543 million (FY2023: $0.510 million) 18. Events occurring after the reporting period As announced to the market on 27 August 2024 a renewal of the securitisation facility with Fortress Investment Group was completed. The following key terms were agreed as part of the renewed facility:  Facility size increased to $200 million from $150 million.  Pricing based on a margin over the Bank Bill Swap Rate (BBSW).  Provides growth capital for the personal finance lending business including new products.  Availability period extended for a further three years to 27 August 2027 and maturity date extended to 27 August 2028. Notes to the financial statements 30 June 2024 Cash Converters International Limited 112 19. Related party transactions 19.a) Subsidiaries The immediate parent and ultimate controlling party of the Group is Cash Converters International Limited. Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. 19.b) Key management personnel compensation Details of Directors and other members of KMP of Cash Converters International Limited during the year are: Non-executive Directors Mr Timothy Jugmans Chairman and Non-Executive Director Mr Lachlan Given Non-Executive Director Mr Robert Hines Non-Executive Director Chair of Audit and Risk Committee Chair of Board Investment Committee Governance, Remuneration and Nomination Committee member Mr Henry Shiner Non-Executive Director Audit and Risk Committee member Board and Investment Committee member Governance, Remuneration and Nomination Committee member Mr Mark Ashby Non-Executive Director Chair of Governance, Remuneration and Nomination Committee (appointed 6 October 2023) Mr Andrew Spicer Non-Executive Director (appointed 22 May 2024) Ms Susan Thomas Non-Executive Director Audit and Risk Committee member Board and Investment Committee member Governance, Remuneration and Nomination Committee member (resigned 30 September 2023) Ms Julie Elliott Non-Executive Director Chair of Governance, Remuneration and Nomination Committee Audit and Risk Committee member Board and Investment Committee member (resigned 22 May 2024) Executive Directors Mr Sam Budiselik Chief Executive Officer & Managing Director Mr Peter Cumins Executive Deputy Chairman Executive KMP Ms Lisa Stedman Chief Operating Officer Mr James Miles Chief Information Officer Mr Jonty Gibbs Chief Financial Officer Mr Luis San Martin Chief Risk Officer (appointed 1 March 2024) Mr Andrew Kamp Chief Strategy & Commercial Development Officer (appointed 7 August 2023) Notes to the financial statements 30 June 2024 Cash Converters International Limited 113 The aggregate compensation of the KMP of the Group is set out below: 30-Jun 30-Jun 2024 2023 $ $ Short-term employee benefits 5,692,024 4,102,071 Post-employment benefits 219,281 177,923 Other long-term benefits 54,143 30,579 Share-based payments 601,289 621,934 Termination benefits - 218,500 6,566,737 5,151,007 19.c) Transactions with other related parties During the year an amount of $120,000 (FY2023: $120,000) was paid for consulting services to an entity controlled by Mr P Cohen, the beneficial owner of EZCORP Inc, the Company’s largest shareholder. Other than share-based payments (as disclosed in note 20) and shareholdings of KMP (as disclosed in the remuneration report), the parent, its subsidiaries, associates and KMP made no other related party transactions during the reporting period. 20. Share-based payments 20.a) Employee rights plan The Cash Converters rights plan (“the Plan”), which was approved by shareholders on 18 November 2015, allows the Directors of the Company to issue performance rights which will vest into ordinary shares in the Company upon the achievement of certain vesting conditions. Each right entitles the holder to subscribe for one fully paid ordinary share in the Company at the exercise price of nil. During the reporting period, a total of 16,460,478 performance rights were granted in Tranches 37, 38, 39, 40, 41 and 42 to eligible employees of the Company. The following arrangements were in existence during the current reporting period, not adjusted for rights which have forfeited or lapsed during the current or prior periods: Tranche Vesting Conditions1 Grant date Grant date fair value Exercise price Measurement date Number 31 TSR 26-Oct-21 $0.162 $0.00 30-Jun-24 4,642,856 32 EPS 26-Oct-21 $0.213 $0.00 30-Jun-24 4,642,856 33 TSR 4-Oct-22 $0.119 $0.00 30-Jun-25 4,223,496 34 EPS 4-Oct-22 $0.170 $0.00 30-Jun-25 4,223,485 35 TSR 25-Oct-22 $0.127 $0.00 30-Jun-25 1,807,769 36 EPS 25-Oct-22 $0.180 $0.00 30-Jun-25 1,807,769 37 TSR 8-Nov-23 $0.092 $0.00 30-Jun-26 5,813,572 38 EPS 8-Nov-23 $0.162 $0.00 30-Jun-26 5,813,572 39 TSR 23-Nov-23 $0.085 $0.00 30-Jun-26 2,364,865 40 EPS 23-Nov-23 $0.155 $0.00 30-Jun-26 2,364,865 41 TSR 1-Jan-24 $0.085 $0.00 30-Jun-26 51,802 42 EPS 1-Jan-24 $0.155 $0.00 30-Jun-26 51,802 1 TSR: vesting conditions based on Total Shareholder Return, EPS: vesting conditions based on normalised Earnings Per Share Notes to the financial statements 30 June 2024 Cash Converters International Limited 114 20.b) Fair value of performance rights granted during the year The weighted average fair value of the performance rights granted during the financial year is $0.12 (FY2023: $0.15). Where relevant, the expected life used in the model is based on the earliest vesting date possible for each tranche, based on the vesting conditions. Tranche 37 Tranche 38 Tranche 39 Tranche 40 Tranche 41 Tranche 42 Grant date 8-Nov-23 8-Nov-23 23-Nov-23 23-Nov-23 1-Jan-24 1-Jan-24 Option pricing model Hoadley 1 Hoadley 2 Hoadley 1 Hoadley 2 Hoadley 1 Hoadley 2 Grant date share price $0.21 $0.21 $0.20 $0.20 $0.20 $0.20 Exercise price $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Expected volatility 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% Option life 2.64 years 2.64 years 2.60 years 2.60 years 2.50 years 2.50 years Dividend yield 9.76% 9.76% 9.76% 9.76% 9.76% 9.76% Risk-free interest rate 4.16% 4.16% 4.14% 4.14% 4.14% 4.14% Hoadley Trading and Investment Tools Hoadley 1 Hoadley Hybrid ESO Model - Relative TSR vs Peer Group Monte-Carlo simulation Hoadley 2 Hoadley ESO2 trinomial model 20.c) Movement in performance rights during the year The following table illustrates the number of, and movements in, performance rights during the year. The performance rights were issued at no charge, and the weighted average exercise price is nil. No rights were exercisable at the end of the current year. Certain performance rights may vest on the publication of these results for FY2024. 2024 2023 Number Number Outstanding at beginning of year 27,183,147 26,863,552 Granted during year 16,460,478 12,062,519 Forfeited / lapsed during year (2,764,875) (3,431,814) Exercised during year (5,525,046) (6,259,034) Cash settled at vesting (1,711,458) (2,052,076) Outstanding at end of year 33,642,246 27,183,147 To be cash settled - 1,711,458 20.d) Share options exercised during the year 5,525,046 shares were issued as a result of the exercise of performance rights during the financial year. No shares have been issued as a result of the exercise of share options or performance rights since the end of the financial year. 6,259,034 of shares were issued as a result of the exercise of performance rights during the year ended 30 June 2023. Notes to the financial statements 30 June 2024 Cash Converters International Limited 115 20.e) Share options forfeited / lapsed during the year Tranche Grant date Number Year ended 30 June 2024 30 29-Sep-20 1,841,682 33 4-Oct-22 262,948 34 4-Oct-22 262,947 37 8-Nov-23 198,649 38 8-Nov-23 198,649 2,764,875 Year ended 30 June 2023 29 29-Sep-20 169,461 30 29-Sep-20 169,461 31 26-Oct-21 789,474 32 26-Oct-21 789,474 33 4-Oct-22 756,972 34 4-Oct-22 756,972 3,431,814 20.f) Share options outstanding at year end The total number of options outstanding at 30 June 2024 was 33,642,246 (FY2023: 27,183,147). Tranche Vesting condition Grant date Grant date fair value Exercise price Measurement date Number 31 TSR 26-Oct-21 $0.162 $0.00 30-Jun-24 3,778,194 32 EPS 26-Oct-21 $0.213 $0.00 30-Jun-24 3,778,194 33 TSR 4-Oct-22 $0.119 $0.00 30-Jun-25 3,203,570 34 EPS 4-Oct-22 $0.170 $0.00 30-Jun-25 3,203,570 35 TSR 25-Oct-22 $0.127 $0.00 30-Jun-25 1,807,769 36 EPS 25-Oct-22 $0.180 $0.00 30-Jun-25 1,807,769 37 TSR 8-Nov-23 $0.092 $0.00 30-Jun-26 5,614,923 38 EPS 8-Nov-23 $0.162 $0.00 30-Jun-26 5,614,923 39 TSR 23-Nov-23 $0.085 $0.00 30-Jun-26 2,364,865 40 EPS 23-Nov-23 $0.155 $0.00 30-Jun-26 2,364,865 41 TSR 1-Jan-24 $0.085 $0.00 30-Jun-26 51,802 42 EPS 1-Jan-24 $0.155 $0.00 30-Jun-26 51,802 33,642,246 The weighted average remaining contractual life for the options outstanding at 30 June 2024 was 1.3 years (FY2023: 1.1 years). Notes to the financial statements 30 June 2024 Cash Converters International Limited 116 21. Remuneration of auditors The auditor of Cash Converters International Limited is Deloitte Touche Tohmatsu. 30-Jun 30-Jun 2024 2023 Audit / review of the financial report - Group 1,010,070 1,124,496 - Subsidiaries 330,772 127,836 Other assurance and agreed-upon procedures under other legislation or contractual arrangements 56,508 24,885 Other services - Taxation services - 9,810 1,397,350 1,287,027 22. Earnings / (loss) per share 22.a) Earnings / (loss) per share 30-Jun 30-Jun 2024 2023 cents cents Basic 2.78 (15.54) Diluted 2.65 (15.54) Where EPS is negative, DEPS is reported at the same value as EPS. 22.b) Reconciliations of earnings / (loss) used in calculating earnings per share 30-Jun 30-Jun 2024 2023 $'000 $'000 Basic and diluted earnings / (loss) per share Profit / (loss) attributable to shareholders of the Company used in calculating earnings / (loss) per share 17,397 (97,155) 22.c) Weighted average number of shares used as the denominator 30-Jun 30-Jun 2024 2023 Number Number Weighted average number of shares - basic 626,559,867 625,253,983 Dilutive effect of performance rights 29,401,935 25,726,260 Weighted average number of shares - diluted 655,961,802 650,980,243 23. Assets pledged as security See note 7.a for cash and cash equivalents designated as restricted cash to operate the securitisation facility and for cash on deposit as security for banking facilities. See note 7.e for the borrowing facility secured against eligible receivables. Notes to the financial statements 30 June 2024 Cash Converters International Limited 117 24. Parent entity financial information The financial information of the parent entity, Cash Converters International Limited has been prepared on the same basis as the consolidated financial report. Statement of financial position Restated 30-Jun 30-Jun 2024 2023 $'000 $'000 Assets Current assets 153 40 Non-current assets 171,535 182,004 Total assets 171,688 182,044 Liabilities Current liabilities 3,327 470 Net assets 168,361 181,574 Equity Issued capital 250,541 249,860 Reserves 1,784 2,277 Profit reserve 304,086 316,636 Retained loss (388,050) (387,199) Total equity 168,361 181,574 Comprehensive income Restated 30-Jun 30-Jun 2024 2023 $'000 $'000 Loss for the year (823) (111,334) Other comprehensive income - - Total comprehensive loss (823) (111,334) Notes to the financial statements 30 June 2024 Cash Converters International Limited 118 Restatement of parent entity comparative financial information Within the parent entity statement of financial position and statement of comprehensive income above, the Company has restated the following comparative balances to reflect the impairment of the Company’s investment in subsidiaries as at 30 June 2023. There is no impact to the consolidated financial statements of the Group: As previously reported Adjustment As restated 30-Jun 30-Jun 30-Jun 2023 2023 2023 $'000 $'000 $'000 Non-current assets 292,485 (110,481) 182,004 Accumulated losses (276,718) (110,481) (387,199) Loss for the year (853) (110,481) (111,334) Guarantees entered into by the parent entity in relation to the debts of its subsidiaries Cross guarantees have been provided by the parent entity and its controlled entities as listed in note 15. Cash Converters International Limited has provided a cross guarantee to HSBC for a BACS facility provided to CCUK. 25. Summary of other material accounting policies This note provides a list of other material accounting policies adopted in the preparation of these consolidated financial statements to the extent they have not already been disclosed in the other notes above. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements are for the group consisting of Cash Converters International Limited and its subsidiaries. 25.a) Principles of consolidation and equity accounting The consolidated financial statements comprise the financial statements of Cash Converters International Limited and entities controlled by the Company and its subsidiaries (the Group, as outlined in note 15(a)). Control is achieved when the Company:  has power over the investee;  is exposed, or has rights, to variable returns from its involvement with the investee; and  has the ability to use its power to affect its returns. The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary. Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. Notes to the financial statements 30 June 2024 Cash Converters International Limited 119 25.b) Leases The Group assesses whether a contract is or contains a lease, at inception of the contract. A contract is, or contains a lease, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:  The contract involves the right of use of an identified asset – this may be specified explicitly and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified;  The Group has the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of use; and  The Group has the right to direct the use of the asset. At inception or reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component based on their relative stand-alone prices. Right-of-use assets The Group recognises right-of-use assets at the commencement date of the lease i.e. the date the underlying asset is available for use. Right-of-use assets are subsequently measured at cost, less any accumulated depreciation and impairment losses and adjusted for any remeasurement of lease liabilities. The cost of the right-of-use asset comprises the initial lease liability amount, initial direct costs incurred when entering into the lease less lease incentives received and an estimate of the costs to be incurred in dismantling and removing the underlying asset and restoring the site on which it is located to the condition required by the terms and conditions of the lease. Unless the Group is reasonably certain of obtaining ownership of the leased asset at the end of the lease term, the recognised right-of-use asset is depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. An impairment review is undertaken for any right-of-use asset that shows indicators of impairment and an impairment loss is recognised against any right-of-use asset that is impaired. Lease liabilities The lease liability is initially measured at the present value of the fixed and variable lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. Notes to the financial statements 30 June 2024 Cash Converters International Limited 120 Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:  the lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate;  the lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which case the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used); and  a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification. The Group adjusts the lease liability due to changes in lease payments and lease terms during the period. Short-term leases and leases of low-value assets The Group applies the short-term lease recognition exemption to its short-term leases i.e. those leases that have a lease term of 12 months or less. It also applies the lease of low-value assets recognition exemption to leases that are considered of low value (less than $7,500). Payments associated with short-term leases (buildings, equipment and vehicles) and all leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Low-value assets comprise IT equipment and small items of office furniture. Incremental borrowing rate To determine the incremental borrowing rate, the Group:  where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received; and  uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by the Group, which does not have recent third-party financing, and adjustments specific to the lease (e.g. term, country, currency and security). Extension and termination options Extension and termination options are included in several property leases across the Group. These are used to maximise operational flexibility in terms of managing the assets used in the Group’s operations. Most of the extension and termination options held are exercisable only by the Group and not by the respective lessor. In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). Notes to the financial statements 30 June 2024 Cash Converters International Limited 121 The lease term is reassessed if an option is exercised (or not exercised) or the Group becomes obliged to exercise (or not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant change in circumstances occurs, which affects this assessment, and that is within the control of the lessee. Where “make-good” obligations exist in leases, the amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, the carrying amount is the present value of those future cash flows. The assessment of the present value of the future obligation requires the application of judgment. 25.c) Property, plant and equipment Segments other than New Zealand and United Kingdom Plant and equipment and leasehold improvements are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the date of acquisition. Depreciation is provided on plant and equipment. Depreciation is calculated on a straight-line basis so as to write off the net cost or other revalued amount of each asset over its expected useful life to its estimated residual value. Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period. The following estimated useful lives are used in the calculation of depreciation: Leasehold improvements 8 years Plant and equipment 5 years Fixtures and fittings 8 years Computer equipment 3 years New Zealand segment Plant and equipment and leasehold improvements are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. Assets are depreciated from the date of installation/first use, whichever is sooner. Depreciation is provided on leasehold improvements and plant and equipment. Depreciation is calculated on a diminishing value basis in accordance with the rates set by the New Zealand Inland Revenue Department. United Kingdom segment Plant and equipment and leasehold improvements are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. An estimated useful life of 4 years is used in calculating depreciation for plant and equipment and leasehold improvements. Notes to the financial statements 30 June 2024 Cash Converters International Limited 122 25.d) Intangible assets Reacquired rights and customer relationships acquired through business combinations are recognised at fair value at acquisition date less accumulated amortisation and impairment. Trade names / brand names relating to repurchased sub-master licenses both overseas and in Australia are recognised at cost less accumulated amortisation. Software development expenditure is recognised as an asset when it is possible that future economic benefits attributable to the asset will flow. Software assets are recognised at cost less accumulated amortisation. Intangible assets are amortised as follows: Asset Amortisation period Reacquired rights The remaining life of each franchise agreement as at the acquisition date Customer relationships Useful life of 5 years based on historic average customer relationships Trade names Indefinite life intangible Software Useful life of 5 years based on historic experience Key estimate – useful lives of other intangible assets The Company reviews the estimated useful lives of other intangible assets at the end of each annual reporting period. The estimation of the remaining useful lives of other intangible assets requires the entity to make significant estimates based on both past performance and expectations of future performance. Consolidated Entity Disclosure Statement 30 June 2024 Cash Converters International Limited 123 Consolidated Entity Disclosure Statement The table below contains consolidated entity information required by section 295 of the Corporations Act 2001 (Cth) as at 30 June 2024. Body corporates Tax residency Entity name Entity type Place formed or incorporated % of share capital held Australian or foreign Foreign jurisdiction Cash Converters International Limited Body corporate Australia N/A Australia N/A Cash Converters Pty Ltd Body corporate Australia 100% Australia N/A Cash Converters Finance Corporation Pty Ltd Body corporate Australia 64.33% Australia N/A Cash Converters (Stores) Pty Ltd Body corporate Australia 100% Australia N/A Cash Converters (Cash Advance) Pty Ltd Body corporate Australia 100% Australia N/A Mon-E Pty Ltd Body corporate Australia 100% Australia N/A Cash Converters Personal Finance Pty Ltd Body corporate Australia 100% Australia N/A CCPF Receivables Trust No 11 Trust N/A N/A Australia N/A Finance Administrators of Australia Pty Ltd Body corporate Australia 100% Australia N/A Green Light Auto Group Pty Limited Body corporate Australia 100% Australia N/A Safrock Finance Corporation (Qld) Pty Ltd Body corporate Australia 100% Australia N/A Cash Converters USA Pty Ltd Body corporate Australia 99.285% Australia N/A Cash Converters (NZ) Pty Ltd Body corporate Australia 100% Australia N/A CC Acquisitions Pty Ltd Body corporate Australia 100% Australia N/A Cash Converters Employee Share Trust2 Trust N/A N/A Australia N/A Cash Converters UK Holdings Ltd Body corporate UK 100% Foreign UK Cash Converters (UK) Stores Ltd Body corporate UK 100% Foreign UK Cash Converters UK Ltd (CCUK) Body corporate UK 100% Foreign UK Themedawn Limited (UK) Body corporate UK 100% Foreign UK Newton Hayes Ltd (UK) Body corporate UK 100% Foreign UK Cash Converters Holdings (NZ) Ltd Body corporate New Zealand 100% Foreign New Zealand Cash Converters (NZ) Personal Finance Ltd Body corporate New Zealand 100% Foreign New Zealand Cash Converters (NZ) Franchise Ltd Body corporate New Zealand 100% Foreign New Zealand Cash Converters (NZ) Stores Ltd Body corporate New Zealand 100% Foreign New Zealand Cash Converters Holdings (NZ) Limited Body corporate New Zealand 100% Foreign New Zealand Cash Converters (NZ) Personal Finance Limited Body corporate New Zealand 100% Foreign New Zealand Cash Converters (NZ) Franchise Limited Body corporate New Zealand 100% Foreign New Zealand Cash Converters (NZ) Stores Limited Body corporate New Zealand 100% Foreign New Zealand Next Pay New Zealand Limited Body corporate New Zealand 100% Foreign New Zealand Cash Converters Limited Body corporate New Zealand 100% Foreign New Zealand Cash Converters Capital Limited Body corporate New Zealand 100% Foreign New Zealand Consolidated Entity Disclosure Statement 30 June 2024 Cash Converters International Limited 124 Cash Converters Corporate Limited Body corporate New Zealand 100% Foreign New Zealand Cash Converters Digital Limited Body corporate New Zealand 100% Foreign New Zealand Cash Converters Finance Limited Body corporate New Zealand 100% Foreign New Zealand Cash Converters Franchising Limited Body corporate New Zealand 100% Foreign New Zealand Cash Converters Henderson Limited Body corporate New Zealand 100% Foreign New Zealand Cash Converters Linwood Limited Body corporate New Zealand 100% Foreign New Zealand Cash Converters Manukau Limited Body corporate New Zealand 100% Foreign New Zealand Cash Converters Otahuhu Limited Body corporate New Zealand 100% Foreign New Zealand Cash Converters Otara Limited Body corporate New Zealand 100% Foreign New Zealand Cash Converters Panmure Limited Body corporate New Zealand 100% Foreign New Zealand Cash Converters Papakura Limited Body corporate New Zealand 100% Foreign New Zealand Cash Converters Pukekohe Limited Body corporate New Zealand 100% Foreign New Zealand Cash Converters Takanini Limited Body corporate New Zealand 100% Foreign New Zealand Cash Converters Finance GP Limited Body corporate New Zealand 100% Foreign New Zealand Cash Converters Glen Innes Limited Body corporate New Zealand 100% Foreign New Zealand Cash Converters Mount Roskill Limited Body corporate New Zealand 100% Foreign New Zealand Cash Converters Stores GP Limited Body corporate New Zealand 100% Foreign New Zealand Cash Converters Holdings LP Partnership New Zealand N/A Foreign New Zealand Cash Converters Corporate NZ LP Partnership New Zealand N/A Foreign New Zealand Cash Converters Franchising NZ LP Partnership New Zealand N/A Foreign New Zealand Cash Converters Digital NZ LP Partnership New Zealand N/A Foreign New Zealand Cash Converters Capital NZ LP Partnership New Zealand N/A Foreign New Zealand Cash Converters Finance NZ LP Partnership New Zealand N/A Foreign New Zealand Cash Converters Partners NZ LP Partnership New Zealand N/A Foreign New Zealand CC Glen Innes NZ LP Partnership New Zealand N/A Foreign New Zealand CC Henderson NZ LP Partnership New Zealand N/A Foreign New Zealand CC Linwood NZ LP Partnership New Zealand N/A Foreign New Zealand CC Manukau NZ LP Partnership New Zealand N/A Foreign New Zealand CC Mount Roskill NZ LP Partnership New Zealand N/A Foreign New Zealand CC Otahuhu NZ LP Partnership New Zealand N/A Foreign New Zealand CC Otara NZ LP Partnership New Zealand N/A Foreign New Zealand CC Panmure NZ LP Partnership New Zealand N/A Foreign New Zealand CC Papakura NZ LP Partnership New Zealand N/A Foreign New Zealand CC Pukekohe NZ LP Partnership New Zealand N/A Foreign New Zealand CC Takanini NZ LP Partnership New Zealand N/A Foreign New Zealand 1. FCCD (Australia) Nominee Pty Limited is the trustee for the CCPF Receivables Trust No 1 2. CPU Share Plans Pty Limited is the trustee for the Cash Converters Employee Share Trust Directors’ declaration 30 June 2024 Cash Converters International Limited 125 Directors’ declaration The Directors declare that: a) in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; b) in the Directors’ opinion, the attached financial statements are in compliance with International Financial Reporting Standards, as stated in note 1 to the financial statements; c) in the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the Group; d) in the Directors’ opinion, the consolidated entity disclosure statement on pages 123 to 124 is true and correct; and e) the Directors have been given the declarations required by s295A of the Corporations Act 2001. At the date of this declaration the Company is within the class of companies affected by ASIC Corporations (Wholly owned Companies) Instrument 2016/785. The nature of the deed of cross guarantee is such that each company which is party to the deed guarantees to each creditor payment in full of any debt in accordance with the deed of cross guarantee. In the Directors’ opinion, there are reasonable grounds to believe that the Company and the companies to which the ASIC Corporations (Wholly owned Companies) Instrument 2016/785 applies, as detailed in note 15 to the financial statements will, as a group, be able to meet any obligations or liabilities to which they are or may become subject, by virtue of the deed of cross guarantee. Signed in accordance with a resolution of the Directors made pursuant to s295(5) of the Corporations Act 2001. On behalf of the Directors Sam Budiselik Chief Executive Officer & Managing Director Perth, Western Australia 29 August 2024 Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Asia Pacific Limited and the Deloitte organisation. Report on the Audit of the Financial Report Opinion We have audited the financial report of Cash Converters International Limited (the “Company”) and its subsidiaries (the “Group”) which comprises the consolidated statement of financial position as at 30 June 2024, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policy information and other explanatory information, the directors’ declaration and the consolidated entity disclosure statement. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: • Giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its financial performance for the year then ended; and • Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Deloitte Touche Tohmatsu ABN 74 490 121 060 477 Collins Street Melbourne, VIC, 3000 Australia Tel: +61 3 9671 7000 Fax: +61 3 9671 7001 www.deloitte.com.au Independent Auditor’s Report to the members of Cash Converters International Limited 126 Key Audit Matter How the scope of our audit responded to the Key Audit Matter Allowance for expected credit loss – loan receivables As disclosed in Note 7.c), the carrying value of loan receivables as at 30 June 2024 was $238.7 million, net of allowance for expected credit loss (‘ECL’) of $49.3 million. Loans subject to the allowance for expected credit loss include personal loans, pawnbroking loans and vehicle finance loans. Significant management judgement is necessary in determining expected credit loss, including: • the identification of loans with significant increase in credit risk to determine whether a 12 month or lifetime ECL should be recognised; • assumptions used in the ECL models such as the financial condition of the counterparty, repayment capacity, any collateral value and forward-looking macroeconomic factors disclosed in note 7.c) which impact on the estimate of loss given default; and • management judgements used in the calculation of overlays to the ECL models. Our procedures included, but were not limited to: • obtaining an understanding of credit risk judgements made by management in the ECL models; • understanding the key controls management have in place in relation to loan originations, collections, arrears management and the estimate of the expected credit loss; • challenging the assumptions and methodology used to determine the timing of recognition of loss events and significant increases in credit risk, valuation of collateral, probability of default and loss given default; • testing on a sample basis the accuracy and completeness of the historical data utilised in the models; • in conjunction with our credit modelling specialists, o developing an expected range of the allowance for expected credit loss; o testing the mathematical accuracy of the ECL models through reperformance; o assessing modelled base losses against actual historical losses; • challenging management’s judgements in respect of overlays recognised due to macroeconomic factors; and • assessing the adequacy of the disclosures in Note 7.c). Impairment of goodwill and other non-current assets in the New Zealand operating segment Management undertakes impairment testing to test the recoverability of goodwill and indefinite life intangible assets annually. As disclosed in Note 5 an impairment charge of $3.3 million was recorded in respect of goodwill in the New Zealand operating segment. Goodwill is monitored and tested for impairment at the operating segment level. The assessment of the New Zealand operating segments recoverable value requires significant judgement in respect of assumptions and estimates in preparing a value in use (‘VIU’) model such as: • discount rate; • forecast retail and pawnbroking growth rates; • forecast Better Personal Loan (‘BPL’) volumes driving revenue increase; and • forecast bad debt levels. Our procedures included, but were not limited to: • obtaining an understanding of the key judgements made by management in the VIU model; • obtaining an understanding of the key controls management has in place in relation to the estimate of the recoverable amount of the goodwill, other intangible assets and other non- current assets; • comparing the forecasts used in the impairment assessment to the Board-approved business plan; • assessing historical forecasting accuracy by comparing actual results to forecast; • assessing the appropriateness of the carrying amount, including the allocation of corporate assets and liabilities; • in conjunction with our valuation specialist: o challenging the key assumptions and methodologies used, in particular: ▪ the discount rate against that of comparable companies; ▪ forecast BPL loan volume growth assumptions; ▪ forecast bad debt levels for BPL; and ▪ forecast retail and pawnbroking revenue growth rates. o testing management’s model for mathematical accuracy; and • assessing the adequacy of the disclosures in the Note 5.c) 127 Key Audit Matter How the scope of our audit responded to the Key Audit Matter Loan to Cash Converters Espana, S.L (Spain master franchisor) As disclosed in Note 7.b) the carrying amount of loan to external parties as at 30 June 2024 was $7.428 million, net of allowance for ECL of $0.735 million. The loan has been classified as non-current in the financial statements on the basis that management expects to extend the repayment terms. Given the increase in the principal amount and the extended payment period management has determined that there has been an increase in credit risk during the period. Significant judgement is necessary in determining the expected credit loss including estimates of the probability of default and loss given default. Our procedures included, but were not limited to: • reading and understanding the loan agreements; • assessing the likely methods and the timing of the expected recovery of the loan; • assessing the most recent audited financial report of Cash Converters Espana, S.L.; • obtaining an understanding of credit risk judgements made by management in the ECL model; • challenging the assumptions and methodology used to determine the probability of default and loss given default; • in conjunction with our credit modelling specialists, developing an expected range of the allowance for expected credit loss; • assessing the non-current classification of the loan; and • assessing the adequacy of the disclosures in Note 7.b). Acquisition of Capital Cash Limited As disclosed in Note 14 the Group completed the acquisition of Capital Cash Limited on 6 July 2023, for total purchase consideration of $23.1 million which includes goodwill and other intangible assets of $6.6 million and $5.7 million respectively. Significant judgement was required in assessing the appropriateness of the acquisition accounting, including: • concluding on the date that control was obtained by the Company under the Sale and Purchase Agreement; • concluding on the determination of consideration paid; • identifying and valuing the identifiable intangible assets acquired, including reacquired franchise rights; and • determining the impact of the transaction on associated tax balances, including the deferred tax impact on reset tax cost bases. Our procedures included, but were not limited to: • reading and understanding the Sale and Purchase Agreement to understand the nature of the transaction, and the consideration; • assessing the acquisition date against the requirements of AASB 3, Business Combinations; • challenging the recognition and measurement of consideration transferred; • understanding management’s controls over the valuation process for the identification of the assets acquired and liabilities assumed including consideration of contingent assets or liabilities; • obtaining a copy of the management’s expert’s valuation report that was commissioned to determine the fair values at acquisition date of intangible assets acquired; • assessing the independence, competence and objectivity of management’s expert; • assessing, in conjunction with our internal valuation specialists, the identification of assets acquired and liabilities assumed, and the appropriateness of the methodologies and assumptions used by management and their experts, including the following: o reacquired franchise rights: assessing the methodologies applied in valuing the rights, and the reasonableness of critical assumptions including annual franchise fees and assumed fee increases, agreement renewal periods, and discount rate; • assessing the calculation and valuation of the deferred tax balances arising on the transaction; and • assessing the adequacy of the disclosures in Note 14 to the financial statements. 128 Other Information • The directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2024, 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 in accordance with the Corporations Act 2001, including giving a true and fair view of the financial position and performance of the Group in accordance with Australian Accounting Standards; and • For such internal control as the directors determine is necessary to enable the preparation of the financial report in accordance with the Corporations Act 2001, including giving a true and fair view of the financial position and performance of the Group, and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. 129 • Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group’s audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 28 to 48 of the Directors’ Report for the year ended 30 June 2024. In our opinion, the Remuneration Report of Cash Converters International Limited, for the year ended 30 June 2024, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. DELOITTE TOUCHE TOHMATSU Peter Rupp Partner Chartered Accountants Melbourne, 29 August 2024 130 30 June 2024 Cash Converters International Limited 131 Shareholder information As at 21 August 2024 Distribution of holders of equity securities Holders Fully paid ordinary shares Number Number 1 to 1,000 601 231,480 1,001 to 5,000 1,033 2,975,784 5,001 to 10,000 563 4,473,286 10,001 to 100,000 1,215 46,514,747 100,001 and over 463 573,349,718 3,875 627,545,015 Voting rights Cash Converters International Limited fully-paid ordinary shares carry voting rights of one vote per share. Less than marketable parcel of shares There were 1,028 holders of less than a marketable parcel of ordinary shares. Substantial shareholders Ordinary shareholder Number of shares % of issued shares 1 EZCORP Inc 273,939,157 43.65% 30 June 2024 Cash Converters International Limited 132 Twenty largest equity security holders Ordinary shareholder Number of shares % of issued shares 1 EZCORP INC 273,939,157 43.65% 2 J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 17,924,837 2.86% 3 CITICORP NOMINEES PTY LIMITED 13,233,277 2.11% 4 MR TIMOTHY JOHN HILBIG 20,070,000 3.20% 5 NGE CAPITAL LIMITED 10,733,752 1.71% 6 MR RAYMOND JAMES ALLAN 8,107,358 1.29% 7 MR SAM WILLIAM BUDISELIK 7,519,115 1.20% 8 RIOLANE HOLDINGS PTY LTD 6,937,226 1.11% 9 NSR INVESTMENTS PTY LTD 4,400,000 0.70% 10 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 3,922,647 0.63% 11 FISKE PLC 3,900,000 0.62% 12 MRS LILIAN JEANETTE WARMBRAND 3,785,234 0.60% 13 CASH CONVERTERS FRANCHISEES ASSOCIATION INC 3,662,205 0.58% 14 MR PETER CUMINS 3,373,468 0.54% 15 CPU SHARE PLANS PTY LIMITED 3,230,154 0.51% 16 BNP PARIBAS NOMS PTY LTD 3,002,849 0.48% 17 MR ALASTAIR EDWARD SCHWIER 3,000,000 0.48% 18 KAMALA HOLDINGS PTY LTD 2,904,896 0.46% 19 VADINA PTY LIMITED 2,718,750 0.43% 20 MR JAMES STANLEY LEHMAN 2,600,000 0.41% 398,964,925 63.58% Australian Credit Licence 391436 | ABN: 75 009 288 804 PO Box 3151 Adelaide Terrace, Perth WA 6832 | Tel: 08 9221 9111 | cashconverters.com.au

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