A N N U A L R E P O R T 2 0 2 4
REGISTERED OFFICE AND
PRINCIPAL PLACE OF BUSINESS
Level 37 QV1
250 St Georges Terrace
PERTH WA 6000
Telephone: +61 8 9268 2888
Facsimile: +61 8 9488 1477
Email: info@eurozhartleys.com
SHARE REGISTRY
Computershare Investor Services Pty Ltd
Level 17
221 St Georges Terrace
PERTH WA 6000
Telephone: 1300 787 575
AUDITORS
KPMG
235 St Georges Terrace
PERTH WA 6000
Telephone: +61 8 9263 7171
BANKERS
Westpac Banking Corporation
Level 3, Brookfield Place Tower 2
123 St Georges Terrace
PERTH WA 6000
Bankwest
306 Murray Street
PERTH WA 6000
SECURITIES EXCHANGE LISTINGS
Euroz Hartleys Group Limited shares are listed on the
Australian Securities Exchange
(ASX: EZL)
WEBSITE ADDRESS
www.eurozhartleys.com
CORPORATE GOVERNANCE STATEMENT
www.eurozhartleys.com/corporate-governance/
BOARD OF DIRECTORS
Andrew McKenzie
Executive Chairman
Robin Romero
Independent Non-Executive Director
Fiona Kalaf
Independent Non-Executive Director
Richard Simpson
Non-Executive Director
Ian Parker
Executive Director
COMPANY SECRETARY
Anthony Hewett
Corporate Directory
GROUP FUM
DIVIDENDS
CASH & INVESTMENTS
MARKET
CAPITALISATION
FULLY FRANKED
DIVIDENDS IN 24 YEARS
NET PROFIT
AF TER TA X
$3.89b1
4.75cps
$92m1
$140m1
$345m1
$5.47m1
1. As at 30 June 2024
NOTES TO FINANCIAL STATEMENT
FINANCIAL REPORT
OVERVIEW
CHAIRMAN’S REPORT
4
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
Contents
Corporate Directory
2
Financial Year Highlights
4
Contents Page
5
Executive Chairman’s Report
6
Euroz Hartleys Group Limited Director Profiles
10
Euroz Hartleys Limited Managing Director’s Report
12
Euroz Hartleys Limited Director and Officer Profiles
14
Selected Corporate Transactions
18
Euroz Hartleys Foundation
20
Directors’ Report
23
Auditor’s Independence Declaration
46
Consolidated Statement of Profit or Loss and Other Comprehensive Income
47
Consolidated Statement of Financial Position
48
Consolidated Statement of Changes In Equity
49
Consolidated Statement of Cash Flows
50
Notes to the Financial Statements
51
Consolidated Entity Disclosure Statement
87
Directors’ Declaration
88
Independent Auditor’s Report
89
ASX Additional Information
93
Euroz Hartleys Group Contact Details
95
CHAIRMAN’S REPORT
OVERVIEW
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
5
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
We are pleased with the performance of our business during the back end of the financial year despite a
mostly overall lukewarm market. We strongly believe that our team-based culture is the driving force to
our recently improving market share in many parts of our business.
The past year continued to be profitable in what were
subdued and uncertain markets. During the 2024
financial year, Euroz Hartleys Group Limited (“Euroz
Hartleys” or the “Company”) continued our journey to
provide the best possible platform for our staff, clients
and shareholders.
Our constant focus on investing into our team,
youth, succession and our culture will help to ensure
growth and resilience in all aspects of Euroz Hartleys
going forward.
We are optimistic that our financial outlook and market
position has improved and that our business remains
strongly leveraged to a solid long term outlook for
commodity prices, a positive Western Australian
economy and a growing need for meaningful and
holistic financial advice.
Executive Chairman’s Report
We believe that Euroz Hartleys Limited is now recognised
as Western Australia’s leading private wealth, institutional,
corporate finance and funds management business which
is a reflection of the deep history and trust in our iconic
Western Australian brand.
We have demonstrated the strong operational leverage
of our underlying business during this brief improvement
in ECM activity in an overall year that continued to be
affected by changing expectations around global growth
and inflation.
We are particularly pleased that both Wholesale and
Private Wealth brokerage revenues were up strongly on
the previous year due to a stronger focus on our trading
capabilities. Total brokerage revenues were up 17.2% on the
previous year.
A brief but strong capital raising window towards the end
of the financial year saw total ECM raisings of ~$1.4 billion,
down from $1.9 billion in the previous period but in line with
continued overall lower market ECM activity. Our total ECM
revenues were down 12.6% compared to the previous year.
Our advisory revenues are a cyclical and smaller
component of our revenues and can vary significantly from
year to year. Advisory revenues were down 79.5% after a
particularly good previous year and we remain optimistic
that these revenues from our significant corporate client
base will rebound.
We remain focused on increasing our recurring revenues
and report a modest increase in Funds Under Management
(FUM) to $3.89 billion up from $3.47 billion. Our team
has spent considerable time and effort in developing
new strategies to drive FUM growth and consolidate the
products in our wealth offering. We have high expectations
that the coming year will deliver stronger underlying organic
FUM growth.
Euroz Hartleys will continue to embrace all types of both
transactional and recurring revenues which give us strength
to withstand market downturns and make the most of busier
markets when they inevitably return.
We congratulate all staff for their efforts this year in bringing
all of our high performing teams together at our new
premium office location at QV1. This move to unite all our
staff in one office has been important to help coordinate
our future growth.
NOTES TO FINANCIAL STATEMENT
FINANCIAL REPORT
OVERVIEW
6
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
CHAIRMAN’S REPORT
Summary
Our balance sheet of $92.3 million of cash and
investments at financial year end continues to
strongly support our activities, differentiates us from
many of our competitors and provides confidence to
our significant adviser network and their extensive
client base.
The best measure of a strong business is the
payment of dividends and we are proud that we have
now returned $345.2 million in fully franked dividends
and $40 million of capital to shareholders across our
24-year history.
I would like to sincerely thank our 189 staff who
represent 100% of the goodwill in our business. Our
people are what ultimately drives our success and
our significant reinvestment into our team and our
culture will help to ensure growth and resilience
in all aspects of our Euroz Hartleys business
going forward.
Andrew McKenzie
Executive Chairman
We are particularly pleased
that both Wholesale and
Private Wealth brokerage
revenues were up strongly
on the previous year due
to a stronger focus on our
trading capabilities.
OVERVIEW
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
7
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
CHAIRMAN’S REPORT
E U R O Z H A R T L E Y S G R O U P
Dividend History
E U R O Z H A R T L E Y S G R O U P
Profit Before Tax & Net Profit After Tax
0.0
5.0
10.0
15.0
20.0
25.0
30.0
23
24
22
21
20
19
18
17
16
15
14
13
12
11
10
09
08
07
06
05
04
03
02
01
2H Dividend Per Share
1H Dividend Per Share
Special Dividend
C E N T S P E R S H A R E
-20.0
-10.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
Profit Before Tax
Net Profit After Tax
23
24
22
21
20
19
18
17
16
15
14
13
12
11
10
09
08
07
06
05
04
03
02
$ M I L L I O N
CHAIRMAN’S REPORT
NOTES TO FINANCIAL STATEMENT
8
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
OVERVIEW
E U R O Z H A R T L E Y S G R O U P
Funds Under Management
E U R O Z H A R T L E Y S G R O U P
NTA per share
F U M ( A $ M )
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Jun 23
Jun 24
Jun 22
Jun 21
Dec 20
Jun 20
Dec 19
Jun 19
Dec 18
Jun 18
Dec 17
Jun 17
Dec 16
Jun 16
Dec 15
OZG
WIC
Entrust
Euroz Hartleys
Other
Cents Per Share
C E N T S P E R S H A R E
0.0
20.0
40.0
60.0
80.0
100.0
23
24
22
21
20
19
18
17
16
15
14
13
12
11
10
09
08
07
06
05
04
03
02
01
CHAIRMAN’S REPORT
NOTES TO FINANCIAL STATEMENT
9
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
OVERVIEW
E U R O Z H A R T L E Y S G R O U P L I M I T E D
Director Profiles
Andrew McKenzie
EXECUTIVE CHAIRMAN
Andrew is Executive Chairman of Euroz Hartleys Group Limited (ASX:EZL), Euroz Hartleys Limited and is
Chairman of the Euroz Hartleys Foundation. Andrew is a board member of the Perth Children’s Hospital
Foundation and Chairman of their Investment Sub-Committee. Andrew is a past board member of the
Australian Stockbrokers Association, Presbyterian Ladies College (PLC) and the PLC Foundation.
He holds a Bachelor of Economics from the University of Western Australia (UWA), a Graduate Diploma
in Applied Finance and Investment and is a Master Practitioner Member (MSIAA) of the Stockbrokers and
Investment Advisers Association (SIAA).
Robin Romero
INDEPENDENT NON‑EXECUTIVE DIRECTOR
Robin brings to the board extensive legal, accounting and commercial experience. Robin is Legal Counsel
and a former Executive Director of FMR Investments Pty Ltd (formerly Barminco Pty Ltd) and a Non-Executive
Director of West African Resources Limited and Greening Australia Limited. She has more than 20 years of
in-house legal experience, largely in the mining sector. Prior to this, Robin spent 11 years working in large
commercial law and accounting firms including King & Wood Mallesons, Corrs Chambers Westgarth and
KPMG servicing medium to large clients across diverse sectors, predominantly ASX listed companies. Robin
holds a Bachelor of Commerce and a Bachelor of Laws, is a Chartered Accountant and a graduate of the
AICD. She also holds a practising certificate from the Legal Practice Board of Western Australia.
Fiona Kalaf
INDEPENDENT NON‑EXECUTIVE DIRECTOR
Fiona is an experienced CEO, senior executive and director across a broad range of sectors, including
financial services and wealth management, private health insurance and mental health services. Fiona is
the Chair of Amaroo Care Services, a Director of Celebrate WA and a former Director of Perth Festival. She
has held numerous senior executive and directorship roles, including CEO of Lifeline WA and Youth Focus,
executive roles at Wesfarmers and HBF, and board roles, including Chair of the Art Gallery of WA and Deputy
Presiding Member of Healthway. Fiona holds a Bachelor of Arts, a Bachelor of Architecture and a Master of
Business Administration (Advanced) and is a graduate of the AICD. Fiona has also completed the Strategic
Perspectives in Non-profit Management course at Harvard Business School.
CHAIRMAN’S REPORT
NOTES TO FINANCIAL STATEMENT
10
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
OVERVIEW
Richard Simpson
NON-EXECUTIVE DIRECTOR
Richard brings to the board extensive corporate finance, advisory and equity capital market experience gained
through a number of senior Australian and international investment banking positions. Richard is a past board
member of Hartleys Limited (Chairman and Managing Director), Botanic Gardens & Parks Authority (Chairman
2002-2021), State Emergency Management Authority and FINSIA. Richard holds a Bachelor of Applied
Science (Hons) and an MBA from UWA. Richard began his career as a petroleum engineer prior to joining NM
Rothschild & Sons in London, Salomon Brothers Inc (now Citigroup) based in both Sydney and Melbourne, and
returning to Perth to join Hartleys in 1994. On 23 August Richard transitioned to a Non-Executive Director.
Ian Parker
EXECUTIVE DIRECTOR
Ian has extensive knowledge in the areas of stockbroking, investment advice and domestic equities. Ian holds
a Bachelor of Arts (Economics) degree from Murdoch University (WA) and is a Master Practitioner Member
(MSIAA) of SIAA. Ian has been in the financial services industry since 1981 initially with a financial planning
group. In January 1991 Ian joined Hartleys Limited as a Private Client Adviser, was a member of the Executive
Council, Underwriting Committee and Head of the Private Client Advisory Board for 2 years. Ian was appointed
a Director of Hartleys Limited in May 2003 as part of the successful management buyout in October 2003 and
was appointed Chairman of Hartleys Limited in February 2015.
CHAIRMAN’S REPORT
NOTES TO FINANCIAL STATEMENT
11
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
OVERVIEW
This year we continued our efforts to maximise our assets and ensure that we have the best people, a
strong culture and appropriate resourcing within our teams to enable us to deliver exceptional outcomes
for our three main stakeholders: shareholders, clients and our staff.
I am proud to have had the opportunity to lead our exceptional
team over the last 12 months and I look forward to our continued
focus on improving the business as we strive to be the pre-eminent
financial services firm in Western Australia.
Market conditions
Once again markets for the most part of FY24 were largely more
subdued than previous years, interspersed with short market
windows of increased activity and volatility.
Continuing macro factors such as tightening monetary policy,
persistent inflationary pressures and high interest rates coupled
with a continuing tumultuous geopolitical backdrop weighed
heavily on markets. Notwithstanding these challenges, we
experienced some good trading periods, particularly in the closing
months of the financial year. Euroz Hartleys and its clients took
advantage of these market conditions where appropriate, however,
general concerns remain within the investment community and
wider economy.
Financial Performance
Turning to our financial performance, Euroz Hartleys Group Limited
reported a net profit after tax attributable to members of $5.47
Managing Director’s Report
million for the year ended 30 June 2024, compared to $9.34
million in the previous corresponding period, a decrease of 41.45%,
and revenue of $89.2 million for the year ended 30 June 2024
compared to $95.9 million in the previous corresponding period, a
decrease of 7%.
This result in any market would be viewed as a solid year, but given
the continuing wider economic concerns and other disruptions
this result is a credit to our staff and demonstrates the resilience of
our business.
Operational Performance
Our focus for FY24 was the continued consolidation and
strengthening of our platform offering for our clients and staff to
ensure we remain at the forefront of excellence.
Throughout FY24 we continued to seek out operating efficiencies
within the business and sought new pathways to enhance our
product, service and system offering to our clients. These activities
will continue into FY25 as we continually refine and streamline our
offering. Our Operations team have continued to work tirelessly
to ensure business continuity whilst managing the demanding
project timetables.
Community
In FY24 we donated in excess of $387,000 to predominantly
Western Australian charitable causes. Our sixth Annual
Commission for a Cause was again an amazing success raising
$300,000 for our three chosen charities. Commission for a
Cause has now raised more than $1.87 million for charity since
its inception six years ago and we look forward to continuing with
this initiative. The enthusiasm and commitment that our people
and clients bring to these events is a testament to our connections
with the community. Euroz Hartleys' ties to the community extend
well beyond our business dealings and the Foundation reminds
us of this throughout the year. We are proud of the contribution
we can make to our community and for all the support the Euroz
Hartleys Foundation delivers to the Western Australian community
each year.
Divisional Update
Our Wholesale business is made up of our Research, Institutional
Sales and Corporate Finance departments. Our Research team
has deep relationships with the WA business community. With
over 120 stocks under coverage, our knowledge and connections
to the WA mining and industrial landscape remains unparalleled.
In FY24, Euroz Hartleys raised ~$1.4 billion (2023: $1.9 billion)
for our corporate clients in what was a very subdued year for
NOTES TO FINANCIAL STATEMENT
FINANCIAL REPORT
CHAIRMAN’S REPORT
12
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
OVERVIEW
Equity Capital Markets (ECM) activity across the broader market.
Our Institutional Sales team is one of the largest small-mid cap
institutional desk in Australia and provides significant domestic and
global distribution capabilities.
Our Private Wealth business represents one of the largest wealth
teams in Western Australia. We have a team of 63 investment
and wealth advisers which include some of the most experienced
advisers in the Western Australia market. Our wealth advisory team
oversees ~$3.89 billion of Funds Under Management (FUM) (2023:
$3.47 billion) across a diverse range of clients including high net
worth individuals, family offices and Not-For-Profit organisations.
The continued growth of our Private Wealth division remains a key
priority for the business.
Both our Wholesale and Private Wealth businesses generate
revenue across a diverse range of services including brokerage,
ECM transactions, corporate advisory and FUM fees. The diversity
of our earnings provides the business with a solid foundation for
continued growth in both good and difficult markets.
The business is backed by an experienced inhouse operations
team, supporting the day to day activities that provide ongoing
support to our clients. We will continue to refine and improve our
operations to facilitate better client outcomes.
Notwithstanding the macroeconomic and geopolitical challenges
that take us into FY25, the combination of our people, our improved
client offering and our strong balance sheet ensures that I remain
optimistic that we can deliver another successful period for all
stakeholders. I would like to take this opportunity to thank all Euroz
Hartleys staff for their continued efforts in delivering a solid FY24
result in difficult market conditions and ensuring the company is in
an enviable position for the years ahead.
Graduate Program
In FY24 we continued our investment in the development and
retention of talent with three new recruits into our graduate
program. This is the second year of the program and our
graduates are consistently finding permanent opportunities
for ongoing roles following their graduate rotation. We are
committed to three new graduates in January 2025 and
along with our formal internship program places us in a
great position to continually inject our business with talented
individuals.
Outlook
Last year I spoke about our impending office move to QV1. In
December of 2023 we successfully moved into our new office
space on Levels 37 and 38 of QV1. This move finally brought
all our teams together in one location for the first time since
the merger of Euroz Securities Limited and Hartleys Limited
in 2020.
The move was a resounding success thanks to the efforts of
our operations team and has provided greater collaboration
between teams and renewed vigour and activity within
the business.
We are now well positioned to leverage these improved
capabilities which will in turn further enhance our capacity
to better serve our stakeholders. Although markets remain
volatile in the short term, we have conviction around the mid-
long term outlook for the Western Australian economy. With
global green energy requirements continuing to underwrite
greater need for natural resources we feel the time is right to
continue to invest in our people and platforms to capitalise on
this trend.
Tim Bunney
Managing Director
CHAIRMAN’S REPORT
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
13
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
OVERVIEW
Tim Bunney
MANAGING DIRECTOR AND HEAD OF INSTITUTIONAL SALES
Tim has been working in the stockbroking industry since 2010 and is the Managing Director of Euroz Hartleys
Limited and Head of our Institutional Sales Division. He holds a Bachelor of Commerce from Curtin University
majoring in finance and management. He is currently undertaking post graduate study in geology and finance.
Tim is a member of the SIAA institutional broking committee.
Anthony Brittain
EXECUTIVE DIRECTOR AND CHIEF OPERATING AND FINANCIAL OFFICER
Anthony Brittain is the Chief Operating Officer and Chief Financial Officer. Mr Brittain is an Executive Director
of Euroz Hartleys Limited (Euroz Hartleys). He is a member of the Euroz Hartleys Group Limited Audit and
Risk Committee as well as a member of Euroz Hartleys Limited Underwriting Committee and Compliance
Committee. Mr Brittain holds a Bachelor of Commerce degree from UWA and is a member of the Chartered
Accountants Australia and New Zealand (CA ANZ). He also holds a Graduate Diploma in Applied Finance and
Investment from Financial Services Institute of Australasia (FINSIA), is a Graduate Member (GAICD) of the
Australian Institute of Company Directors (AICD) and a Master Practitioner Member (MSIAA) of the SIAA as
well as a Member of SIAA Profession Committee and the Professional Conduct Tribunal. He is also a panel
member of the Markets Disciplinary Tribunal (MDP) of the Australian Securities and Investment Committee
(ASIC) and a member of the Australian Securities Exchange (ASX) Business Committee.
Andrew McKenzie
EXECUTIVE CHAIRMAN
Andrew is Executive Chairman of Euroz Hartleys Group Limited (ASX:EZL), Euroz Hartleys Limited and is
Chairman of the Euroz Hartleys Foundation. Andrew is a board member of the Perth Children’s Hospital
Foundation and Chairman of their Investment Sub-Committee. Andrew is a past board member of the
Australian Stockbrokers Association, Presbyterian Ladies College (PLC) and the PLC Foundation.
He holds a Bachelor of Economics from the University of Western Australia (UWA), a Graduate Diploma
in Applied Finance and Investment and is a Master Practitioner Member (MSIAA) of the Stockbrokers and
Investment Advisers Association (SIAA).
Gavin Allen
EXECUTIVE DIRECTOR AND HEAD OF RESEARCH
Gavin is the department head of Euroz Hartley’s Research Division and is a Research Analyst with 19 years’
experience specialising in detailed analysis and research of mid cap industrial companies. Prior to joining
Euroz, Gavin held a senior position in the Corporate Finance Division of a major accounting firm, specialising
in the financial analysis of mergers and acquisitions. Gavin holds a Bachelor of Commerce, is a member of
the Chartered Accountants Australia and New Zealand (CA) and holds a Chartered Financial Analyst (CFA)
designation.
E U R O Z H A R T L E Y S L I M I T E D
Director and Officer Profiles
CHAIRMAN’S REPORT
NOTES TO FINANCIAL STATEMENT
14
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
OVERVIEW
Marc Lincoln
EXECUTIVE DIRECTOR AND HEAD OF PRIVATE WEALTH
Marc is Head of Private Wealth and an Executive Director of Euroz Hartleys having spent more than 25 years
in financial services.
Marc’s journey in Stockbroking/Wealth Management began at Hartleys (then Hartley Poynton) in the late 90’s
before assuming the role of WA State Manager at Bell Potter.
In 2021, Marc returned to Euroz Hartleys, where he is dedicated to helping the Private Wealth advisers deliver
exceptional service and investment solutions to private wealth clients.
Ben Crossing
EXECUTIVE DIRECTOR AND HEAD OF CORPORATE
Ben is Head of Corporate Finance and has been a member of the Hartleys Corporate Finance team since
2010. During this time, Ben has provided strategic corporate advice in relation to equity capital market
transactions, mergers, takeovers and acquisitions for a number of Australian Securities Exchange (ASX) listed
resource, energy and industrial companies.
Ben has broad corporate advisory experience, having originated and executed a wide range of corporate
transactions focussed predominantly in the mid-large cap resources and mining services sectors.
Ben holds a Masters in Applied Finance and a Bachelor of Science.
Amanda Boyce
EXECUTIVE DIRECTOR AND HEAD OF ADVICE
Amanda is an experienced financial market professional with over 20 years of experience in the industry,
joining Euroz Hartleys in July 2022. She has held senior leadership roles in Advice, Institutional Wealth, and
Strategic Projects and has a proven track record of success. Her career began with Goldman Sachs JBWere
and later became Head of Syndicate at JBWere before becoming Head of Advice for WA & SA. Amanda is
a Director of the Stockbrokers and Investment Advisers Association (SIAA), the professional body for the
stockbroking and investment advice industry in Australia. Amanda holds a Bachelor of Economics (Honours)
from the University of Western Australia.
Rowan Jones
EXECUTIVE DIRECTOR AND HEAD OF ENTRUST WEALTH
Rowan joined Entrust Wealth Management Pty Ltd in January 2008 and was appointed an Executive Director
in September 2016. He holds a Bachelor of Commerce from Curtin University, a Graduate Diploma of Applied
Finance and Investment from FINSIA and he is a Self-Managed Superannuation Fund Specialist adviser
through the SMSF Association. Rowan provides strategic and investment advice to a broad range of clients,
including families and Not–For–Profit organisations. Prior to joining Entrust, Rowan spent ten years as a
professional sportsperson in the AFL with the West Coast Eagles Football Club. He is Vice Chairman of the
West Coast Eagles Football Club. Rowan has successfully passed the FASEA professional qualifications
required to act as a financial adviser.
CHAIRMAN’S REPORT
NOTES TO FINANCIAL STATEMENT
15
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
OVERVIEW
David Smyth
EXECUTIVE DIRECTOR AND PRIVATE WEALTH ADVISER
David Smyth is a Senior Investment Adviser and Executive Director at Euroz Hartleys Limited and brings over
23 years of experience, including a previous role on the Hartleys Limited Board of Directors. With a Graduate
Diploma in Financial Planning, he has been in business since his early 20s, learning the importance of effective
money management. David specialises in personalised financial strategies, simplifying superannuation advice
and constructing high-quality investment portfolios. As the owner and Director, he ensures top-notch service and
comprehensive support in investment advice, superannuation, estate planning, and insurance. David and his team
provide expert management of financial affairs, helping clients achieve their life goals and secure their future.
Anthony Hewett
GROUP COMPANY SECRETARY
Anthony Hewett is the Group’s Company Secretary, an Executive Director of the Euroz Hartleys Foundation and
a member of the Euroz Hartleys Limited Compliance Committee. Mr Hewett commenced his career in financial
services in 2000 with Hartley Poynton Limited and JDV Limited. In 2003 he joined DJ Carmichaels before joining
Euroz Securities Limited in 2004. During his career he has held a variety of positions in operations, risk and
compliance. Mr Hewett is a Chartered Secretary and Chartered Governance Professional and holds a Master
of Business Law from Curtin University and a Graduate Diploma in Applied Corporate Governance from the
Governance Institute of Australia. Mr Hewett is a Fellow of the Chartered Governance Institute (FCG), a Fellow of the
Governance Institute of Australia (FGIA), a Master Practitioner Member (MSIAA) of SIAA and a member of AICD. Mr
Hewett is also a board member and honorary treasurer of Holyoake.
E U R O Z H A R T L E Y S L I M I T E D
Director and Officer Profiles
CHAIRMAN’S REPORT
NOTES TO FINANCIAL STATEMENT
16
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
OVERVIEW
CHAIRMAN’S REPORT
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
17
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
OVERVIEW
F I N A N C I A L Y E A R 2 0 2 4
Selected Corporate Transactions
Equity Capital Markets
PLACEMENT, ANREO
& SELL DOWN
$113 Million
JOINT LEAD MANAGER
& JOINT UNDERWRITER
Euroz Hartleys Limited
APR 24
PLACEMENT
$100 Million
JOINT LEAD MANAGER
Euroz Hartleys Limited
NOV 23
PLACEMENTS
$130 Million
JOINT LEAD MANAGER
Euroz Hartleys Limited
MAY 24, AUG 23
PLACEMENTS
$96 Million
SOLE LEAD MANAGER
Euroz Hartleys Limited
JUN 24, NOV 23, JUL 23
FLOW-THROUGH & PLACEMENT
C$75 Million
JOINT LEAD MANAGER
Euroz Hartleys Limited
MAY 24
PLACEMENT
$38 Million
JOINT LEAD MANAGER
Euroz Hartleys Limited
JUN 24
PLACEMENT
$35 Million
LEAD MANAGER
Euroz Hartleys Limited
JUL 23
PLACEMENT
$31 Million
JOINT LEAD MANAGER
Euroz Hartleys Limited
APR 24
PLACEMENT
$30 Million
JOINT LEAD MANAGER
Euroz Hartleys Limited
MAR 24
PLACEMENTS & RIGHTS ISSUE
$32 Million
LEAD MANAGER
Euroz Hartleys Limited
APR 24, NOV 23, AUG 23
FLOW-THROUGH & PLACEMENT
$25 Million
JOINT LEAD MANAGER
Euroz Hartleys Limited
JUN 24
PLACEMENT
$20 Million
SOLE LEAD MANAGER
Euroz Hartleys Limited
MAR 24
CHAIRMAN’S REPORT
NOTES TO FINANCIAL STATEMENT
18
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
OVERVIEW
Equity Capital Markets (cont'd)
Mergers and Acquisitions
PLACEMENT
$20 Million
JOINT LEAD MANAGER
Euroz Hartleys Limited
APR 24
PLACEMENT
$18 Million
JOINT LEAD MANAGER
Euroz Hartleys Limited
AUG 23
PLACEMENT
$15 Million
JOINT LEAD MANAGER
Euroz Hartleys Limited
AUG 23
PLACEMENT
$12 Million
JOINT LEAD MANAGER
Euroz Hartleys Limited
JAN 24
PLACEMENT
$12 Million
JOINT LEAD MANAGER
Euroz Hartleys Limited
APR 24
FLOW-THROUGH & PLACEMENT
$11 Million
JOINT LEAD MANAGER
Euroz Hartleys Limited
AUG 23
$1.1 Billion
CAPITAL MARKETS ADVISER TO
SILVERLAKE IN RELATION TO THE
SCHEME WITH RED 5
Euroz Hartleys Limited
2024
$270 Million
JOINT FINANCIAL ADVISER TO
PERSEUS IN RELATION TO OFF-
MARKET TAKEOVER OF ORECORP
Euroz Hartleys Limited
2024
$117 Million
CORPORATE ADVISER TO EMERALD
IN RELATION TO ITS OFF-MARKET
TAKEOVER OF BULLSEYE MINING
Euroz Hartleys Limited
2024
CHAIRMAN’S REPORT
NOTES TO FINANCIAL STATEMENT
19
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
OVERVIEW
S O C I A L G I V I N G
Euroz Hartleys Foundation
In 2006, the Euroz Hartleys Foundation (the Foundation) was formed in a Private Ancillary Fund
structure through which the Euroz Hartleys Group and its staff could make donations, invest these funds,
make distributions to worthy charities and contribute to our broader community. Since its inception, the
Foundation has donated in excess of $4 million to over 100 individual charities and worthy causes.
The Foundation forms the central plank in our social giving
program. As a proudly Western Australian company, we feel
it is our obligation to give back to the community that has
supported us over the past 24 years.
The Foundation’s focus is on Western Australian charitable
causes where we believe we can make a positive
community impact.
On 14 June 2024 the Foundation held its sixth annual
Commission for a Cause event. This year the event raised
$300,000 which is an amazing outcome given subdued market
conditions. The funds were divided equally between Perth
Children’s Hospital Foundation (PCHF), Breast Cancer Care
WA (BCCWA) and Ocean Heroes.
Since its inaugural event in 2019, Commission for a Cause has
raised more than $1.87m through the generosity and support
of our clients and staff.
Perth Children’s Hospital Foundation are using the funds
raised on the day to purchase a critical piece of equipment
for the Emergency Department (ED) at Perth Children’s
Hospital (PCH).
The stakes are high in the Children’s ED. Very sick kids pose
unique challenges requiring swift and accurate decision-
making. Time is of the essence, especially when it comes to
resuscitations and other respiratory problems, thus continued
training is essential.
The SimBaby is an advanced, tetherless simulation manikin
representing a nine-month-old infant. Tailored specifically
for paediatric health issues. With simulation training, the
more realistic the scenario, the more effective the training.
Participants more readily immerse themselves into the
environment which is linked to knowledge and experience
retention. Participants will be able to practice assessments,
diagnoses, and interventions. Regular sessions will allow
healthcare staff to stay up to date with the latest techniques
and strategies, guaranteeing ongoing excellence in emergency
care. In addition, PCHF will use a portion of the funds to
provide individualised equipment and services for children with
acquired and congenital spinal cord injuries, who otherwise
would not be able to obtain support.
BCCWA provides specialist breast care nursing, mental
health support and financial support to women and men
affected by breast cancer (as well as their partners and
families) throughout WA. BCCWA are utilising the funds to
fund a counsellor. Counsellors provide essential mental
health support to more than 700 people (and their partners
and families) every year, helping them to cope with changes,
challenges, relationships and uncertainty during their breast
cancer treatment and beyond. In addition, a portion of the
funds are being used to fund BCCWA support groups program.
The experience of connecting with someone who has had the
same treatment and can truly understand what they’re going
through is incredibly powerful.
CHAIRMAN’S REPORT
NOTES TO FINANCIAL STATEMENT
20
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
OVERVIEW
Ocean Heroes is using the funds raised to secure a new vehicle
which will allow them to expand their services across Western
Australia. Ocean Heroes provide a unique opportunity for people
on the autism spectrum to take part in organised sport backed
by a highly supported, safe and inclusive environment. By
running free events and surf experiences, Ocean Heroes offer the
autism community the chance to experience the thrill of riding a
wave! People living with autism face unique challenges that can
make it difficult for them to develop self-confidence and make
genuine connections. Learning to surf offers a fun, healthy, and
unique way for people on the autism spectrum to develop their
confidence, boost self-esteem and make connections with others.
In addition to Commission for a Cause, in FY24 the Euroz
Hartleys Foundation has provided support to a wide variety of
charitable causes in Western Australia through the provision
of funds and volunteer hours. This includes the continuation of
our scholarships at Curtin University for students experiencing
hardship and who would not otherwise have an opportunity to
continue their studies.
We are proud of our significant contributions to support and give
back to our local Western Australian community through our
Foundation in this past year and look forward to continuing this
important work in the years ahead.
CHAIRMAN’S REPORT
NOTES TO FINANCIAL STATEMENT
21
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
OVERVIEW
Financial Report
Corporate Directory
2
Directors’ Report
23
Auditor’s Independence Declaration
46
Consolidated Statement of Profit or Loss and other Comprehensive Income
47
Consolidated Statement of Financial Position
48
Consolidated Statement of Changes In Equity
49
Consolidated Statement of Cash Flows
50
Notes to the Consolidated Financial Statements
51
Consolidated Entity Disclosure Statement
87
Directors’ Declaration
88
Independent Auditor’s Report
89
NOTES TO FINANCIAL STATEMENT
OVERVIEW
CHAIRMAN’S REPORT
22
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Directors’ Report
FOR THE YEAR ENDED 30 JUNE 2024
The Directors present their report on the consolidated group consisting of Euroz Hartleys Group Limited (Euroz Hartleys Group) and the entities it
controlled (Group) at the end of, or during the year ended 30 June 2024.
The following persons were Directors of Euroz Hartleys Group at any time during or since the end of the financial year and up to the date of
this report:
Executive chairman
Andrew McKenzie
Independent non-executive directors
Robin Romero
Fiona Kalaf
Executive directors
Richard Simpson
Ian Parker
Jay Hughes (retired 8 August 2023)
Chief Operating Officer / Chief Financial Officer
Anthony Brittain is the Chief Operating Officer and Chief Financial Officer. Mr Brittain is an Executive Director of Euroz Hartleys Limited (Euroz
Hartleys). He is a member of the Euroz Hartleys Group Limited Audit and Risk Committee as well as a member of Euroz Hartleys Limited
Underwriting Committee and Compliance Committee. Mr Brittain holds a Bachelor of Commerce degree from the University of Western Australia
(UWA) and is a member of the Chartered Accountants Australia and New Zealand (CA ANZ). He also holds a Graduate Diploma in Applied Finance
and Investment from Financial Services Institute of Australasia (FINSIA), is a Graduate Member (GAICD) of the Australian Institute of Company
Directors (AICD) and a Master Practitioner (MSIAA) of the Stockbrokers and Investment Advisers Association of Australia (SIAA) as well as a
Member of SIAA Profession Committee and the Professional Conduct Tribunal. He is also a panel member of the Markets Disciplinary Tribunal (MDP)
of the Australian Securities and Investment Committee (ASIC) and a member of the Australian Securities Exchange (ASX) Business Committee.
Company Secretary
Anthony Hewett is the Group’s Company Secretary, an Executive Director of the Euroz Hartleys Foundation and a member of the Euroz Hartleys
Limited Compliance Committee. Mr Hewett commenced his career in financial services in 2000 with Hartley Poynton Limited and JDV Limited. In
2003 he joined DJ Carmichaels before joining Euroz Securities Limited in 2004. During his career he has held a variety of positions in operations,
and risk and compliance. Mr Hewett is a Chartered Secretary and Chartered Governance Professional and holds a Master of Business Law from
Curtin University and a Graduate Diploma in Applied Corporate Governance from the Governance Institute of Australia. Mr Hewett is a Fellow of the
Chartered Governance Institute (FCG), a Fellow of the Governance Institute of Australia (FGIA), a Master Practitioner (MSIAA) of SIAA and a member
of AICD. Mr Hewett is also a board member and honorary treasurer of Holyoake.
Principal activities
During the year the principal activities of the Group consisted of:
(a)
Stockbroking & Corporate Finance;
(b)
Funds Management;
(c)
Wealth Management; and
(d)
Investing.
Review of results
The consolidated group reports a net profit attributable to members of $5,468,000 for the financial year ended 30 June 2024 (2023: $9,338,000).
This result represents basic earnings per share of 3.5 cents (2023: 5.51 cents).
Brokerage revenues were up 17.2% for the period due to a stronger focus on our trading capabilities and solid block trading activity. Our trading
revenues are a leading indicator for the underlying health of our business and your Directors are pleased to see this improvement. Funds Under
Management (FUM) revenue for the year increased by 7.5% from the previous year. Euroz Hartleys FUM as at 30 June 2024 was $3,892,068,000
(2023: $3,467,531,000).
Equity Capital Market (ECM) raisings of $1,413,935,000 versus $1,978,825,000 last financial year led to ECM revenue being down approximately
12.6% but in line with overall lower market ECM activity. Corporate advisory revenues were down approximately 79.5% after a particularly good
previous year.
Underlying cash profitability enabled your Directors to declare and pay a final fully franked dividend of 3.0 cents per share (cps) which combined
with the interim dividend of 1.75 cps brought the full year dividend to 4.75 cps (2023: 6 cps).
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
23
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Directors’ Report (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
Review of operations
2024
2023
$
$
Revenues
Brokerage
29,420,860
25,111,267
Underwriting and placement fees
33,825,636
38,693,105
Performance and management fees
243,433
307,431
Wealth management fees
19,558,317
18,197,903
Corporate advisory
2,270,000
11,066,059
Interest received
3,445,145
2,320,121
Other revenue
453,115
239,572
Total revenue
89,216,506
95,935,458
Net profit after tax
5,468,062
9,338,637
Operating and financial review
The purpose of this review is to set out information that shareholders may require to assess Euroz Hartleys Group’s operations, financial position,
business strategies and prospects for future financial years. This information complements and supports the report presented herein.
Disclosure of operations – Profit
Net profit after tax attributable to members was $5,468,000 compared to $9,338,000 in the 2023 financial year.
We are pleased with the performance of our business during the back end of the financial year despite an overall subdued ECM market.
Disclosure of operations – Sales
Revenue has decreased by 7.0% to $89,216,000 from previous year amount of $95,935,000.
(a)
Stockbroking and Corporate Finance
Transactional brokerage revenues were up by 17.2% for the period to $29,421,000 (2023: $25,111,000), reflecting strong block trading activity.
Underwriting and placement fees revenue decreased by 12.6% to $33,826,000 from $38,693,000.
Euroz Hartleys was Lead or Joint Lead Manager to 58 (2023: 64) ECM transactions this year raising $1,413,935,000 (2023: $1,978,825,000).
This was a solid achievement given lower ECM market activity over the period.
Our Corporate Advisory revenues were down 79.5% to $2,270,000 (2023: $11,066,000) after a particularly good previous year.
(b)
Wealth Management
Wealth Management revenue increased by 7.5% to $19,558,000 from $18,198,000. We are pleased with the quality and stability of our wealth
management service offering at a time of significant change in the wealth management landscape. We report a modest increase in FUM to
$3,892,068,000 (2023: $3,467,531,000). A recent system and platform review will further improve the wealth management offering for our
extensive client base and enable stronger organic growth in FUM going forward. Euroz Hartleys is well positioned for continued growth given our
established team of private wealth advisers.
(c)
Funds Management – Performance and Management fees
Revenue from Funds Management decreased by 20.8% to $243,000 from $307,000 in the prior year. Funds management revenue is derived
from the management of Westoz Resources Fund Limited mandate managed by Westoz Funds Management Pty Ltd (WFM).
(d)
Investment Income
Investment income was $70,000 (2023: Nil).
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
24
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Directors’ Report (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
Disclosure of operations
The Group is principally involved in the following activities:
(a)
Stockbroking and Corporate Finance;
(b)
Funds Management;
(c)
Wealth Management; and
(d)
Investing.
Our operations are conducted in Perth, Western Australia (WA) and details of our operations are outlined below:
(a)
Stockbroking and Corporate Finance
The Euroz Hartleys stockbroking operation comprises four main divisions as follows:
i.
Equities Research
•
Highly rated research from market leading research team of nine analysts
•
Our views are highly regarded by Australian and international institutional investors
•
Access to the latest online news and financial information
•
Based on fundamental analysis, strict financial modelling and regular company contact:
-
Goal: Identify and maximise equity investment opportunities for our clients
-
Approach: Intimate knowledge of the companies we cover
-
Coverage: Broad cross section of mostly WA based industrial and resource companies
•
Research Products:
-
Company Reports: Detailed analysis on companies as opportunities emerge
-
Morning Note: Overnight market updates
-
Weekly Informer: Compilation of all company reports throughout the preceding week
-
Quarterly and / or Semi-annual Review: Summary coverage on companies
ii.
Institutional Sales
•
One of the largest institutional small to mid-cap dealing desks in the Australian market with a sales team of eight staff
•
Extensive client base of Australian and international institutional investors with strong relationships with small company fund
managers
•
Distribution network strength - long standing relationships with major institutional investors in the small to mid-cap market
•
WA’s geographic isolation makes it difficult for institutional investors to maintain close contact with companies based here -
investors can rely on our on the ground information
•
Institutional dealing team highly focused on providing the following services:
-
Quality advice and idea generation
-
Efficient execution
-
Regular company contact
-
Site visits
-
Roadshows
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
25
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Disclosure of operations (cont’d)
iii.
Private Wealth
•
Team of 61 highly experienced and qualified private wealth advisers providing a broad investment offering for clients of Euroz
Hartleys. Our wealth management service provides strategic investment advice, superannuation advice, investment management
and portfolio administration service
•
Significant capacity to support new issues and construct quality retail share registers
•
Substantial high net worth client base (s.708 compliant investors)
•
Exposure to high net worth clients via in-house conferences and one-on-one presentations
•
Extensive research support - high quality research on WA based resource and industrial companies enable our advisers to provide
quality investment and trading advice
•
Specialised broking allows:
-
Close interaction between research analysts and private wealth advisers
-
Timely communication of ideas with clients
•
Sophisticated investors are able to participate in many of our capital raisings
iv.
Corporate Finance
•
The corporate finance team of 14 staff focuses on developing strong, long term relationships with our clients.
•
Clients are provided with specialised Corporate Advisory services in:
-
Equity Capital Raisings and Underwriting
-
Mergers and Acquisitions
-
Strategic Planning and Reviews
-
Privatisation and Reconstructions
•
Established track record in raising equity capital via:
-
Initial Public Offerings (IPO)
-
Placements
-
Rights Issues
(b)
Funds Management
In October 2022, WFM was appointed to be the responsible manager for Westoz Resources Fund Limited (WRFL). WRFL is an unlisted
investment fund whose purpose is to generate positive returns from a portfolio of stocks with a focus on the resources sector in Western
Australia. Euroz Hartleys Group owns approximately 7.1% (2023: 7.7%) of the issued share capital of the fund which now manages approximately
$24,297,000 as at 30 June 2024 (2023: $27,099,000).
(c)
Wealth Management
We remain focused on increasing our proportion of recurring revenues and can report a modest increase in FUM to $3,892,068,000
(2023: $3,467,531,000).
(d)
Investing
The business has some listed and unlisted investments.
Disclosure of business strategies and prospects - Growth
Our aim is to build real diversification of transactional and recurring revenues across our business.
The Directors believe that Euroz Hartleys Group has all the foundations for our strategy of building a more consistent base of underlying recurring
revenues through our growing wealth management businesses whilst still retaining the transaction-based upside of our traditional stockbroking
business. The business remains strongly leveraged to a continued solid outlook for commodity prices, a positive Western Australian economy and a
growing need for meaningful and holistic financial advice.
Directors’ Report (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
26
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Disclosure of business strategies and prospects - Growth (cont’d)
We remain focused on increasing our proportion of recurring revenues and can report a modest increase in FUM to $3,892,068,000 from
$3,467,531,000 in the previous financial year. Our team has spent considerable time and effort in developing new strategies to drive FUM growth
and consolidate our wealth offering. We have high expectations that the coming year will deliver stronger organic FUM growth.
Our constant focus on investing in our team, youth, succession and our culture will help to ensure growth and resilience in all aspects of our
business going forward. In addition, the successful move to one location at QV1 has given our business and our people a significant boost, fostering
a positive team environment for our valuable staff and laying a strong foundation for the success of our entire business.
Disclosure of business strategies and prospects - Material Business Risks
Overview
In line with the ASX Corporate Governance Principles and Recommendations (4th Edition), Euroz Hartleys Group is committed to ensuring robust
corporate governance. We view risk as the impact of uncertainty, both positive and negative, on our objectives. We manage risk to the greatest
extent feasible to create and sustain value for our shareholders and other stakeholders.
Uncertainty and risk are inherent when conducting operations within financial markets. As an active participant in the Australian capital markets,
Euroz Hartleys Group is exposed to risks that could result in financial losses. We foster a risk aware culture with consideration of risk supporting our
formulation of strategy and informing business decision-making.
The Group has identified its principal risks as market risk, credit risk, operational risk, cyber security risk and other risks. Accordingly, risk
management and control of the balance between risk and return are critical elements in maintaining the Group’s financial stability and profitability.
Therefore, an effective risk management framework is integral to our success.
Details of risks identified:
Risk Category
Risk Summary
Management of Risk / Exposure
Market Risk
A change in market prices and / or any
of the underlying market forces may
result in loss.
The macroeconomic uncertainty of
changing business models.
Policies and procedures are in place to measure, monitor and control risks
where possible.
We take a proactive approach to understanding macroeconomic, climate and
geopolitical factors that may have an impact on our business.
Changes in market conditions influence the volume and timing of
transactions across the business and the value of various equity, credit and
market risk positions held by the Group at balance sheet date.
Credit Risk
Where a third party is unable to fulfil its
financial obligations.
We have defined and set credit standards, policies and procedures to enable
ongoing financial review with respect to existing and potential new clients.
High risk transactions and strategies are carefully monitored and supervised.
Operational Risk
Risk of failure to achieve strategic
objectives and / or respond to changes
in our competitive landscape with
competitive products.
Policies and procedures are in place to identify, measure, monitor and
control risks where possible.
We maintain a comprehensive Business Continuity Plan and Disaster
Recovery processes to address identified operational risks.
We constantly assess our client investment offerings including with respect to
technology changes and innovation.
We conduct strategy sessions with Senior Executives on a biannual basis
which include consideration of operational risk factors.
Directors’ Report (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
27
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Risk Category
Risk Summary
Management of Risk / Exposure
Cybersecurity risk
The risk of loss or other damage
resulting from our failure to prevent
and / or appropriately respond to
our technology, physical security or
cybersecurity being compromised.
Review of third-party providers and platform vulnerabilities to assess risk and
potential loss or other damage.
Data security and access is monitored internally on an ongoing basis.
Data management and control procedures are documented and in place.
Implementation of multi factor authentication for remote access and client
systems access where available.
Annual penetration testing of our network to identify vulnerabilities.
Alignment to the Australian Cyber Security Centre Essential Eight Framework.
Privacy policy in place to ensure all obligations are considered and complied
with. This policy is also available on our website.
Cyber Incident Response Plan in place to support and direct necessary
actions should this event occur.
Disaster Recovery and Business Continuity plans are in place for the
business as a whole. This is tested on an ongoing basis.
Ongoing staff training on all areas of cyber risk (phishing, malware etc).
Senior management and Board engagement as part of ongoing
Board reporting.
Other Risks
Regulatory and
legal risk
The risk of legal or regulatory sanctions
or loss, resulting from failure to comply
with laws, regulations, licensing or
contractual requirements.
We have access to external legal counsel if required.
We have active engagement with all regulators including ASIC and ASX.
We provide feedback on consultation papers where appropriate.
We have active engagement in various committees through our premier
industry association SIAA.
Regular attendance at seminars and participation in working groups within
our industry.
We take active steps to comply with all Austrac guidance and conform with
Australian Privacy Principals.
We monitor the regulators for proposed and approved changes which require
implementation within our business.
Reputational Risk
Expectation over our ESG commitment,
or compromise of our reputation due to
perceived inaction.
Ongoing policy development to identify and implement environmental, social
and governance issues appropriate to our industry. Careful attention is paid
to enhancing our “social licence” to operate and appropriate policies on
climate and carbon emissions.
Risk of Modern Slavery exposure in our
supply chain and business operations.
Ongoing development of Modern Slavery considerations within our business,
including consideration of our third-party providers.
The risk of damage to our brand due to
inappropriate conduct and culture.
Code of Ethical Conduct for employees.
Whistleblowing Policy.
Graduate and Emerging Leaders Program.
Monitoring culture via employee surveys.
Annual obligation to attest to personal Good Fame and Character along with
acknowledgement of compliance policy updates as required.
Fraud.
We have internal policies and procedures to ensure awareness as our first
line of defence.
Non-compliance with laws and
regulations.
Internal team who regularly review applicable laws and regulations and
proactively ensure ongoing compliance with obligations.
Disclosure of business strategies and prospects - Material Business Risks (cont’d)
Overview (cont'd)
Directors’ Report (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
28
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Risk Category
Risk Summary
Management of Risk / Exposure
Pandemic Risk
Large scale breakouts of infectious
diseases that can greatly increase
morbidity and mortality over
wide geographical areas and
cause significant social and
economic disruption.
A comprehensive management plan has been developed, including the use
of flexible / virtual working arrangements which supports the availability of
skilled staff in the event something of this nature occurs.
We have considered third party arrangements, change management and
business continuity.
Our systems are designed to support data security and management,
technology vulnerabilities, remote access and load testing.
Significant
geopolitical and
economic risk
The effects of geopolitics on the global
economy are difficult to predict. We
remain alert to supply chain disruptions,
geopolitical instability, volatile markets
and inflation negatively impacting
household budgets.
With the ongoing wars in Eastern Europe and Middle East this is having a
substantial economic impact given their influences on global oil, commodity
and agricultural markets.
Consideration is given to impact on revenue, operating margins,
compensation ratios and expense levels which may negatively impact market
volumes, asset prices, volatility or liquidity.
Financial Risk and
Financial Crime
Management
Performance is closely linked to local
and global economic performance.
Awareness of regulatory requirements
for managing financial risk and financial
crime risks within our industry.
Ongoing monitoring and supervision to ensure client protection regarding
financial criminal activities globally.
Policies have been developed to assist to identify country and individual
sanctions, anti-money laundering and counter terrorism financing,
anti-bribery and corruption and anti-tax evasion facilitation.
Ongoing compliance with regulatory changes in this area.
Financial position
Net assets of the Group have decreased to $114,239,000 at 30 June 2024 from $115,038,000 at 30 June 2023. The Group’s financial performance
has enabled it to continue to pay dividends to shareholders during the year while maintaining a healthy working capital ratio. The Group’s working
capital, being current assets less current liabilities is $67,450,000 at 30 June 2024 (2023: $69,457,000).
During the past 24 years the Group has invested in expanding each of its businesses to secure their long-term success. In particular it has increased
its strategic investments via the acquisitions of Entrust in 2015 and Hartleys Limited in 2020 to develop a market leading platform for our future
wealth management ambitions.
The Group remains in an extremely sound financial position with a balance of cash (excluding restricted cash in client trust account), financial assets
at fair value and investments at fair value as at 30 June 2024 of $92,329,000 (2023: $94,515,000). The Group has a Net Tangible Assets (NTA) of
49¢ per share and no debt. This position continues to support our activities, differentiates us from many of our competitors and provides confidence
to our significant adviser network and their large client base.
Euroz Hartleys Group has a proud history of consistent profits and dividends having paid a total of $345,169,000 in fully franked dividends over the
past 24 years.
The Directors believe that the Group is in a strong and stable financial position to expand and grow its current operations.
2024
2023
Cents
Cents
Earnings per share
Basic earnings per share
3.50
5.51
Diluted earnings per share
3.33
5.25
Disclosure of business strategies and prospects - Material Business Risks (cont’d)
Overview (cont'd)
Directors’ Report (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
29
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Dividends – Euroz Hartleys Group
Dividends paid or provided for during the financial year were as follows:
2024
2023
$
$
Special dividend 20.27 cents per fully paid ordinary share paid on 7 October 2022 (i)
-
39,992,116
Interim ordinary dividend of 1.75 cents (2023: 2.5 cents) per fully paid ordinary share was
paid on 16 February 2024
2,884,395
4,101,042
Provision for final ordinary dividend for 30 June 2024 of 3.0 cents (2023: 3.5 cents) per
fully paid ordinary share to be paid on 30 August 2024
4,944,678
5,753,047
7,829,073
49,846,205
(i)
Special dividends to equity holders comprise $39,992,116 fully franked special dividend of $0.2027 per share paid to shareholders in October 2022 as part
of the Group’s strategic cash and capital management.
Of the total dividends paid during the year, $11,636 (2023: $35,210) was paid to the Euroz Share Trust and is undistributed. Therefore, it has been
eliminated on consolidation.
State of affairs
In the opinion of the Directors, there has been no significant changes in the state of affairs of the Group.
Share options
There were no options on issue at 30 June 2024 (2023: Nil).
Environmental, Social and Governance
Understanding the increasing relevance of sustainability to our shareholders, stakeholders and communities, the Group has continued to develop its
Environmental, Social and Governance (ESG) program.
i.
Environmental
Euroz Hartleys monitors the impact of our business on the environment as well as contribution to climate change. We have measures in place
which seek to minimise our environmental footprint, focussing on minimisation of energy emissions and waste. Emissions can be categorised
into three scopes:
Scope 1: This scope covers emissions from sources that a business owns or controls directly. This scope generally affects the mining and oil
and gas industry and is not applicable to Euroz Hartleys Group as the business does not directly generate carbon emissions from its day to
day operations.
Scope 2: This scope encompasses emissions that a company causes indirectly resulting from the energy it purchases, for example electricity
used to power office buildings.
Scope 3: This scope encompasses emissions that are not produced by the business itself, and are not the result of activities from assets owned
or controlled by the business, but by those that it is indirectly responsible for up and down its value chain for example business travel, personnel
travel to work or waste disposal.
In preparation for the mandatory reporting requirements which will be applicable for the Group for the reporting period ending 30 June 2027, we
are taking steps to measure our carbon footprint and to develop further strategies to reduce our overall environmental impact.
Some initiatives that the business has implemented are:
•
We are currently tracking our carbon footprint in relation to Scope 2 with a view to formulating a suitable future carbon emission offset and
reduction strategy
•
We participate in proactive waste management with a recycling system in place for all paper / cardboards
•
Where possible we use electronic signatures in corporate and client documentation (except those that require a wet signature under law)
•
Our new office premises at QV1 have a 6 star NABERS energy rating and indoor environment and 4 star NABERS water rating
•
We participate in the Containers for Change program
Directors’ Report (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
30
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Environmental, Social and Governance (cont’d)
ii.
Social
Euroz Hartleys takes seriously its social responsibilities to our stakeholders and its role within the communities in which we operate.
Community Partnerships
Euroz Hartleys has a track record of partnering with and sponsoring leading events that engage communities and provide meaningful ways for
our team members to participate. In the current financial year, we were the proud sponsors of Dowerin Machinery Field Days, Claremont Football
Club and the Euroz Hartleys Port to Pub.
A particular highlight from the Euroz Hartleys Port to Pub endurance swimming event saw more than 1,500 people swim from North Fremantle
to Rottnest in idyllic conditions. Euroz Hartleys entered five teams in the swim, with 30 team members making the epic crossing. Euroz Hartleys
also participates in other volunteering initiatives such as the Home for Dinner Volunteering program whereby staff prepared homemade dinners
for the families staying at Ronald McDonald House.
People and Culture
Our people are at the heart of our business. With a team of 185 employees, we have considered effective employee development, retention, and
well-being programs aligned to our business goals. We are pleased to report our comparatively high retention and engagement rates, which we
believe are the result of our leadership and ongoing dedicated people-focused programmes.
Professional Development
We are committed to nurturing our employees’ career paths through tailored career coaching, flexible working arrangements, and formal
learning opportunities. Some of the initiatives during the year have been to engage specialists like Dean Mannix for sales growth workshops and
Nathanial Bibby for LinkedIn Fundamentals.
Graduate and Internship Programs
Our comprehensive Graduate and Internship Programs offer aspiring professionals a pathway to enter the finance industry. By partnering with
educational institutions such as the Financial Association of WA (FAWA) and the Student Managed Investment Fund at UWA, we have created
graduate pathway links and promoted our industry to emerging talent. These initiatives foster a pipeline of future professionals and inspire
students about finance careers.
Wellness at work
We have increased awareness of employee mental health through our Employee Assistance Program (EAP), fostering transparency and
encouraging employees to seek support for mental health challenges. Additionally, we provide annual flu vaccinations to promote overall health
and well-being.
Diversity Equity and Inclusion
We understand that having a mix of diverse backgrounds, perspectives and ideas is an essential part of our strong culture and that building a
truly diverse and inclusive workplace is an ongoing process.
Endorsed by senior leaders we have established a volunteer-led Diversity Equity and Inclusion (DEI) Council creating a calendar of events
which promote a culture of celebration and education on various DEI initiatives. We have revised our parental leave policy to be gender-neutral,
extending leave for primary carers to 20 weeks and secondary carers to 6 weeks, with superannuation included for both paid and unpaid
periods. Additionally, we introduced 5 days of paid miscarriage leave.
The results of the Workplace Gender Equality Agency (WGEA) report in February 2024 demonstrate that, while we are already committed to pay
equity (that is, equal pay for comparable roles regardless of gender), like the rest of our industry, our challenge is to increase the representation
of women in commission / bonus driven paying roles. We understand that this is the only way to reduce our gender pay gap in a material and
meaningful way, and that it is going to take time and sustained effort. We remain committed to seeking out meaningful initiatives to reduce our
gender pay gap.
Some of the steps we have taken during the year towards increasing the representation of women in these roles are:
•
Increased staff consultation and engagement
•
Generous parental leave
•
Tailored initiatives for career development
•
Support and opportunities to grow the female talent pipeline at all levels
We are proud to have been recognised as Employer of the year at the “Women in Wealth Awards” in May 2024. These awards recognise and
reward women who have shown commitment to the financial services industry through leadership, innovation and advocacy in the fields they are
passionate about. We are so proud that three members of our team received highly commended awards in their respective categories.
Directors’ Report (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
31
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Environmental, Social and Governance (cont’d)
ii.
Social (cont’d)
Euroz Hartleys Foundation
Our Euroz Hartleys Foundation (Foundation) continues to contribute to communities and charities in meaningful ways to support their long-term
sustainability.
The Foundation was established in 2006 in a Private Ancillary Fund through which we make distributions to worthy charities and contribute to
the broader community. The Foundation allows us to support our consistent commitment to making a positive impact in the Western Australian
community.
Since 2006, our Foundation has contributed more than $4,009,000 to the Western Australian charitable sector. For this financial year $300,000
was raised as part of our annual Commission for a Cause on 14 June 2024 with three equal donations of $100,000 to WA charities, being Perth
Children’s Hospital Foundation, Breast Cancer Care WA and Ocean Heroes. The Commission for a Cause program has raised over $1,871,000
in the six years since its inception.
iii.
Governance
As a diversified financial services company which has a consistent track record of strong shareholder returns, Euroz Hartleys is committed
to maintaining a best practice governance regime. Our business is built on a foundation of effective governance, ethical practices and
accountability and is led by an experienced Board and management team.
Board Governance
The Euroz Hartleys Group Board comprises five directors, two of whom are independent non-executive directors.
The Board has oversight over internal and external compliance and through its robust governance processes ensures systemic and active risk
management is embedded in our day to day business.
Modern Slavery
Euroz Hartleys is aware of the potential risks of modern slavery in its supply chain and undertakes an annual review of these risks. In line with the
requirements of the Modern Slavery Act, Euroz Hartleys outlines the business risks and the actions taken in the relevant year’s reporting.
Client Privacy and Cybersecurity
The safeguarding of privacy and security of client information is paramount to our business. Euroz Hartleys actions this on an ongoing basis as
detailed in the effective risk management framework section.
Events after reporting date
The Directors are not aware of any matter or circumstance subsequent to 30 June 2024 that has significantly affected, or may significantly affect:
(a)
the Group’s operations in future financial years; or
(b)
the results of those operations in future financial years; or
(c)
the Group’s state of affairs in future financial years.
Likely developments
The Directors are confident that its strong statement of financial position and established business platforms will support the Group in a market that
is currently lacking in direction and confidence.
We remain focused on increasing our proportion of recurring revenues. Our team will continue to spend considerable time and effort in developing
new strategies to drive FUM growth and consolidate our wealth offering. We are confident our investment in improving our adviser platforms, support
and capabilities will enable the largest team of Private Wealth advisers in WA to continue to grow FUM. The successful move to one location at QV1
has contributed to a positive team environment for our staff, laying a strong foundation for the future success of our entire business.
Further information on likely developments in the future operations of the Group and the expected results of operations have not been included in
this report because the Directors believe it would be likely to result in unreasonable prejudice to the Group.
Directors’ Report (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
32
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Information on Directors
Particulars of
Directors’ interests
in shares of Euroz
Hartleys Group
Limited
Director
Experience
Special responsibilities and qualifications
Ordinary shares*
A McKenzie
Executive
Chairman
Mr McKenzie has
worked in the
stockbroking industry
since 1991.
Executive Chairman of Euroz Hartleys Group Limited and Euroz
Hartleys Limited
Member of Euroz Hartleys Limited Executive Remuneration
Committee and Euroz Hartleys Limited Underwriting Committee
Holds a Bachelor of Economics Degree from UWA, a Graduate
Diploma in Applied Finance and Investment from FINSIA and is a
Master Practitioner (MSIAA) of SIAA
12,797,209
R Simpson
Director
Mr Simpson has worked
in the stockbroking
industry since 1990.
Executive Director of Euroz Hartleys Group Limited
Chairman of Euroz Hartleys Group Limited Audit and Risk
Committee
Member of Euroz Hartleys Group Limited Remuneration
Committee, Euroz Hartleys Limited Underwriting Committee and
Euroz Hartleys Limited Research Committee
Holds a Bachelor of Applied Science (Hons) from Curtin
University and a Masters in Business Administration (MBA) from
UWA
2,254,066
I Parker
Director
Mr Parker has worked
in the financial service
industry since 1981.
Executive Director of Euroz Hartleys Group Limited
Member of Euroz Hartleys Group Limited Remuneration
Committee, Euroz Hartleys Limited Underwriting Committee and
Euroz Hartleys Limited Research Committee
Holds a Bachelor of Arts (Economics) from Murdoch University
and is a Master Practitioner (MSIAA) of SIAA
1,723,261
R Romero
Independent
Non-Executive
Director
Ms Romero has over 28
years’ experience in law
and accounting.
Independent Non-Executive Director of Euroz Hartleys Group
Limited
Chair of Euroz Hartleys Group Limited Remuneration Committee
Member of Euroz Hartleys Group Limited Audit and Risk
Committee
Holds a Bachelor of Laws from UWA and a Bachelor of
Commerce from UWA, is a graduate and member of the AICD,
a Chartered Accountant (CA ANZ) and holds a practising
certificate from the Legal Practice Board of Western Australia
73,713
F Kalaf
Independent
Non-Executive
Director
Ms Kalaf has over 27
years’ experience in
strategy, marketing and
management.
Independent Non-Executive Director of Euroz Hartleys Group
Limited
Member of Euroz Hartleys Group Limited Audit and Risk
Committee
Holds a Bachelor of Arts from UWA, a Bachelor of Architecture
from UWA, a Master of Business Administration (Advanced) from
Curtin University and is a graduate of the AICD
26,311
*
Balance as at the date of signing the report and total shares includes shares allocated under the Performance Rights Plan.
Directors’ Report (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
33
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Meetings of Directors
The numbers of meetings of the Company’s Board of Directors held during the year ended 30 June 2024 and the numbers of meetings attended by
each Director were:
Director
Directors Meetings
Committee Meetings
Number eligible
to attend
Number
attended
Audit
Remuneration
Number eligible
to attend
Number
attended
Number eligible
to attend
Number
attended
Andrew McKenzie
8
8
-
-
-
-
Richard Simpson
8
8
4
4
2
2
Ian Parker
8
6
-
-
2
2
Robin Romero
8
8
4
4
2
2
Fiona Kalaf
8
8
4
3
-
-
Jay Hughes *
1
1
-
-
-
-
* Retired as a Director of Euroz Hartleys Group Limited on 8 August 2023.
Remuneration Report (audited)
The Directors present the Remuneration Report for the Group for the year ended 30 June 2024. The Remuneration Report outlines the remuneration
arrangements for Key Management Personnel (KMP) of the Company and the Group in accordance with the requirements of the Corporations
Act 2001 and its regulations. For the purposes of this report, KMP of the Group are defined as those persons having authority for the strategic
management and direction of the Group, including any Director of Euroz Hartleys Group Limited, the Parent Company.
The KMP during the year are set out below:
Name
Position
Term as KMP
Executive Directors
Andrew McKenzie
Executive Chairman
Full financial year
Richard Simpson
Executive Director
Full financial year
Ian Parker
Executive Director
Full financial year
Jay Hughes
Executive Director
Retired 8 August 2023
Non-Executive Directors
Robin Romero
Independent Non-Executive Director
Full financial year
Fiona Kalaf
Independent Non-Executive Director
Full financial year
Other Executive KMP
Tim Bunney
Managing Director, Euroz Hartleys Limited
Full financial year
Anthony Brittain
Chief Operating Officer / Chief Financial Officer, Euroz Hartleys Limited
Full financial year
Ben Crossing
Head of Corporate Finance, Euroz Hartleys Limited
Full financial year
Gavin Allen
Head of Research, Euroz Hartleys Limited
Full financial year
Marc Lincoln
Head of Private Wealth, Euroz Hartleys Limited
Full financial year
Amanda Boyce
Head of Advice, Euroz Hartleys Limited
Full financial year
Directors’ Report (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
34
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Remuneration Report (audited) (cont’d)
Remuneration Committee and Governance
The Euroz Hartleys Group Limited Remuneration Committee (Committee) operates under the delegated authority of the Euroz Hartleys Group Limited
Board. The Committee has ultimate oversight of the Group’s remuneration strategy which is based on the following broad principles:
•
Competitive remuneration – to attract, motivate and retain highly talented employees that share the Group’s values;
•
Performance-based – to ensure there is a link between individual and organisational performance;
•
Fair and equitable – all staff are remunerated fairly and equitably, without regard to gender, sexual identity, age, religion or ethnicity;
•
Alignment to security holder value – variable remuneration structures for eligible employees with the opportunity for equity-based payments.
With these principles in mind, the Committee works together with the Executive to apply the remuneration framework set out below.
In applying the framework, the Committee seeks to strike a balance between having a transparent, aligned and structured framework, whilst retaining
overall discretion and flexibility to deliver fair outcomes.
The process to determine remuneration is undertaken in multiple stages with responsibility for outcomes divided across two independent committees.
The Euroz Hartleys Limited Executive Remuneration Committee (EHL ERC) in consultation with key senior executives of Euroz Hartleys Limited are
responsible for the development of remuneration recommendations for the employees of Euroz Hartleys Limited, which represent the majority of the
Group’s employees. These recommendations encompass both base and variable remuneration and are calculated in accordance with the agreed
models and processes adopted by the Group. The EHL ERC formulates its recommendations in respect of remuneration which are presented for the
consideration of the Committee. No members of the EHL ERC are members of the Committee.
The Committee considers the recommendations of the EHL ERC but is not bound to accept them. The Committee holds the authority to undertake any
separate investigations or discussions they deem necessary or appropriate to determine the appropriateness of the recommendations. The Committee
may (and does) make any adjustments they deem necessary to ensure that the principles and outcomes of the remuneration strategy are maintained.
There are three Directors on Committee, all of whom were in office for the entire period:
•
Ms Robin Romero (Chair) (Independent Non-Executive Director);
•
Mr Ian Parker (Executive Director); and
•
Mr Richard Simpson (Executive Director).
Mr Jay Hughes was a member of the Committee until he retired as an Executive Director on 8 August 2023.
Ms Romero is not eligible to receive any variable remuneration. Mr Parker, in his role as an adviser in the Private Wealth division receives
commission attributable to his own fees / brokerage, but is not otherwise entitled to any type of variable remuneration linked to the profitability of
the business. Mr Simpson may be entitled to variable remuneration, but any such entitlement is calculated in accordance with a pre-determined
attribution model which is overseen and determined by the EHL ERC and over which Mr Simpson has no input or influence. In the event that Mr
Simpson becomes entitled to any variable remuneration then he must abstain from and withdraw himself from any deliberations, recommendations
or decisions in respect of that variable remuneration.
Remuneration framework
The Board recognises that our people are paramount in achieving the Group’s long-term objectives and are a key driver of competitive advantage.
We also understand that nurturing a high-performance culture and aligning the interests of KMP’s and other employees with shareholders is a critical
strategy in creating shareholder value.
Remuneration of our people consists of:
•
Fixed Remuneration - base salary plus superannuation; and
•
Variable Remuneration - performance-based remuneration including short-term, long term and sales-based incentives or commissions
Fixed Remuneration
Fixed Remuneration consists of an annual base salary plus superannuation. Salary reviews are done biannually, however, there is no guarantee that
an employee’s salary will increase as part of this review. There are no guaranteed base salary increases incorporated in any employee contracts.
Remuneration levels are reviewed with regard to:
•
The scope and complexity of the role, including role deliverables, this will be looked at comparatively to other roles of a similar scope and
complexity to prevent bias;
•
The importance of the role to the successful execution of strategy;
•
The individual’s skill and level of experience;
•
Market pay levels for comparable businesses and competitors; and
•
Advice from external consultants or other market sources.
Directors’ Report (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
35
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Remuneration Report (audited) (cont’d)
Remuneration framework (cont'd)
Variable remuneration
Variable remuneration may consist of one or more of the following:
•
Commission;
•
Short term Incentives (cash and /or equity-based) made up of:
-
Profit Share Pool Bonuses; or
-
Discretionary Bonuses;
•
Long term Incentives.
Each of the above is explained in more detail below. At the end of this section is an explanation of how any “equity-based payment” portion of a
particular type of variable remuneration operates.
Commission
Employees in the Private Wealth division of the business may receive commission in addition to fixed remuneration. The commission, which typically reflects
brokerage, corporate income and / or portfolio administration reward, is calculated on a sliding scale which effectively rewards higher performance with
increased commission rates. Eligible employees in the Private Wealth division who receive a commission may also be invited to receive “equity-based payments”
by participating in the Group’s “Performance Rights Plan” (refer below) based on certain performance hurdles set out in their respective employment contracts.
Short Term Incentives (STI)
Short term incentives (STI) are offered to eligible employees in the Wholesale and Operations departments of the business. Wholesale department
employees may participate in the “profit share pool” whereas Operations employees may be eligible to receive a discretionary bonus.
The “profit share pool” is made up of an amount of up to 45% of the pre-tax profits of EHL (calculated in accordance with Australian Accounting
Standards) for the 12 months ended 31 May 2024. The EHL ERC develops and makes recommendations to the Committee as to how this pool is
allocated amongst eligible employees, based on the following criteria and after consultation and input from senior management:
•
Generation of returns for shareholders
•
Ability to perform individual tasks within the relevant department
•
Ability to add value and innovate beyond the standard job specification
•
Development of new and existing client relationships
•
Ability to interact with other relevant departments and work collaboratively as part of a larger team approach
•
Relevant industry salary benchmarking
•
General requirements to attract and retain staff
The Committee (who are not the members of the EHL ERC) will then consider and, if agreed, ratify the recommendations of the EHL ERC. The
Committee is authorised to make any amendments it sees fit to the recommended distribution of the profit share pool.
Once determined, an employee’s profit share pool entitlement may be received all in cash, or as a combination of cash (75%) and equity (25%) (see
“Equity-Based Payments” below).
Discretionary bonus
Certain employees who do not participate in the profit share pool may be eligible for a discretionary bonus based on the individual’s performance, their
contribution to the business over the relevant period and having regard to the overall profitability of the Group.
The EHL ERC develops and makes recommendations to the Committee as to any discretionary bonus for eligible employees in consultation and input
from senior management:
The Committee (who are not the members of the EHL ERC) will then consider and, if agreed, ratify the recommendations of the EHL ERC. The
Committee is authorised to make any amendments it sees fit to the recommended payment of discretionary bonuses.
Once determined, an employee’s discretionary bonus entitlement may be received all in cash, or as a combination of cash (75%) and equity (25%)
(see “Equity-Based Payments” below).
Long term Incentives (LTI)
In 2023 financial year, Euroz Hartleys Group Limited introduced a Long-Term Incentive Plan (LTIP) within the Performance Rights Plan (PRP). The LTIP underpins
Euroz Hartleys’ employment strategy of rewarding specific strategic performance and attracting and retaining key senior executive talent. Specifically, the Plan
aims to recognise long-term performance and successful completion of key strategic goals aligning with the successful addition of long-term shareholder value.
Directors’ Report (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
36
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Remuneration Report (audited) (cont’d)
Remuneration framework (cont’d)
Variable remuneration (cont’d)
Long term Incentives (LTI) (cont’d)
During the 2024 financial year the LTIP initiative was extended to a group of certain eligible senior executives of Euroz Hartleys Limited who
have been identified as being instrumental to the execution of the Group’s strategic plan and seeks to enhance senior management’s strategic
responsibilities and outcomes ensuring alignment with shareholders (see “Equity Based Payments” below).
The outcome of the LTIP is calculated based on a formulaic methodology with allowance for limited discretion in respect of certain elements of each
individuals KPIs.
Equity-Based Payments
For those eligible employees that opt in, the equity component of the different variable remuneration mechanisms set out above is received via the
PRP. The PRP was established in 2014 as an incentive to enhance the reward, retention and motivation of eligible employees by seeking to enhance
employee alignment with shareholders.
Shares allotted under the PRP are purchased on market utilising the funds that would otherwise have been distributed to the particular employee as
variable remuneration. As stated, employees who do not opt in to the PRP have their entire variable remuneration component paid in cash.
PRP – Commission and STI
Where variable remuneration is made up of Commission or STI’s, eligible employees who opt in are awarded a “Performance Right” during the
course of the financial year. The Performance Right represents a right to be allotted a number of ordinary shares in Euroz Hartleys Group Limited in
lieu of 25% of the applicable variable remuneration component of that employee.
This right then automatically vests at the end of the financial year if the employee has met the vesting requirements being that they remain an
“Eligible Employee” at the “Right Vesting Date”.
An Eligible Employee for these purposes means a full time or part-time employee of any member of the Group or a Director of any member of the
Group who holds a salaried employment or office with a member of the Group. If there is a change in the employing entity of a Participant from one
member of the Group to another member of the Group, the Participant will be considered, for the purposes of the plan, to have continued to be an
Eligible Employee at all relevant times.
Shares are held in trust in the name of the individual employees and in terms of the “Share Vesting Date”, the Shares will only “vest” to the eligible
employee after 3 years subsequent service following the initial year of service. Shares are subsequently held in escrow for a further 11 years and
one day following the initial 3-year eligibility period. Shares are subject to clawback provisions during both the initial 3-year eligibility period and
subsequent escrow period. No amount is payable upon “vesting” of shares issued under the PRP following the completion of the initial 3-year
eligibility period. Shares allotted under the PRP are subject to income tax at the participants individual income tax rate at the time of ceasing of
escrow from the PRP.
PRP – LTIP
For select eligible senior executive employees, a nominal LTIP right is issued to each of the participants for nil consideration and nil value at the
commencement of the period. The LTIP right represents the potential right for a participant to be allotted a number of ordinary shares in Euroz
Hartleys Group Limited should both a number of Group performance hurdles and individual financial and non-financial strategic KPIs be met or
exceeded. These strategic KPIs enhance senior management’s responsibilities and outcomes ensuring alignment with shareholders and the addition
of long-term shareholder value.
The LTIP provides a maximum (capped) dollar value opportunity for each individual participant which is then scaled down in a two-step process;
firstly, based on the stipulated Group performance hurdles the outcome of which is then subsequently scaled again based on the individual’s
performance measured against a combination of both the individual’s financial KPIs and non-financial KPIs. The methodology and scaling do not
allow for a positive movement on the application of assessed multipliers. In this regard any and all scaling results in a downward movement in the
potential opportunity for each individual. The LTIP is weighted 70% / 30% to financial KPIs to drive long-term strategic shareholder value and growth.
The LTIP provides a minimum profit hurdle along with other material hurdles, which if not met reduces the value of the LTIP for that individual or
the entire cohort of participants (dependent on the specific hurdle) to nil for the entire period. The profit hurdle is a specific measure of the Group’s
financial performance compared to the previous 5-year period on a rolling basis.
Once the final value of the LTIP opportunity has been calculated, it is satisfied by way of the delivery of shares to the participants. Any shares that
are allotted in satisfaction of the LTIP are purchased on market and are subject to a 3-year continuous service condition, clawback provisions and
continuing escrow periods.
During the year LTI rights were issued to seven (7) Executives under the PRP (2023: two (2) Executives).
Due to the minimum profit hurdle not being achieved for the period, the Committee determined that the LTIP opportunity of all participants in the LTIP
would be varied to nil and no shares were allotted. The rights for the financial year 2024 LTIP have expired with a value of nil.
The LTIP is not applicable to Non-executive Directors.
Directors’ Report (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
37
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Remuneration Report (audited) (cont’d)
Directors fees
Non-Executive Directors (NEDs) are paid a fixed base fee and superannuation. To preserve independence and impartiality, NEDs are not entitled to
any performance-based remuneration.
Executive Directors are not paid any directors’ fees.
In considering the Group’s performance and benefits for shareholder wealth, the Remuneration Committee have regarded the following in respect of
the current financial year and the previous three financial years (since the merger of Euroz and Hartleys in October 2020):
2024
2023
2022
2021
$
$
$
$
Profit attributable to owners of Euroz Hartleys Group
5,468,062
9,338,637
40,723,715
52,540,905
Dividends paid or declared
7,817,447
49,810,995
21,652,751
31,326,913
Share price at year end
0.85
1.09
1.57
1.51
Return of capital to owners of Euroz Hartleys Group
4.8%
8.1%
21.1%
30.7%
There is no guarantee of base pay increases fixed in any Senior Executive or Directors’ contracts.
Details of remuneration
Details of the nature and amount of each element of the emoluments paid or payable of each KMP of the Group are set out in the following tables.
2024
Short-term
Post-Employment
Share-Based Payment
Base
salary
Director’s
fees
Profit Share
/ bonus /
Commission
Other
benefits
Superannuation
Performance
Rights Plan
Long Term
Incentive
Plan
Total
Performance
related
$
$
$
$
$
$
$
$
Andrew McKenzie
253,500
-
834,000
26,246
27,399
192,697
70,167
1,404,009
78%
Richard Simpson
126,750
-
91,500
1,725
22,321
54,184
-
296,480
49%
Ian Parker
80,000
-
917,367
11,003
27,399
20,558
-
1,056,327
89%
Robin Romero
-
75,000
-
-
8,250
-
-
83,250
0%
Fiona Kalaf
-
75,000
-
-
8,250
-
-
83,250
0%
Timothy Bunney
253,000
-
956,250
9,104
27,399
192,302
70,041
1,508,096
81%
Anthony Brittain
253,500
-
328,000
21,457
27,399
55,863
-
686,219
56%
Ben Crossing
235,000
-
848,750
6,464
27,012
154,152
-
1,271,378
79%
Gavin Allen
229,000
-
624,500
14,655
26,847
69,644
-
964,646
72%
Marc Lincoln
230,000
-
84,500
9,699
26,874
12,991
-
364,064
27%
Amanda Boyce
350,000
-
157,500
14,088
27,399
16,875
-
565,862
31%
Jay Hughes *
21,125
-
-
2,597
2,324
11,547
-
37,593
31%
Total
2,031,875
150,000
4,842,367
117,038
258,873
780,813
140,208
8,321,174
* Retired as a Director of Euroz Hartleys Group Limited on 8 August 2023
Executive Directors did not receive any Directors fees.
Directors’ Report (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
38
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Remuneration Report (audited) (cont’d)
Details of remuneration (cont’d)
2023
Short-term
Post-Employment
Share-Based Payment
Base
salary
Director’s
fees
Profit Share
/ bonus /
Commission
Other
benefits
Superannuation
Performance
Rights Plan
Long Term
Incentive
Plan
Total
Performance
related
$
$
$
$
$
$
$
$
Andrew McKenzie
253,500
-
529,500
26,083
25,292
222,943
69,698
1,127,016
73%
Richard Simpson
126,750
-
83,250
2,613
17,880
69,562
-
300,055
51%
Ian Parker
70,000
-
753,082
11,663
25,292
20,558
-
880,595
88%
Robin Romero
-
75,000
-
-
7,875
-
-
82,875
0%
Fiona Kalaf
-
75,000
-
-
7,879
-
-
82,879
0%
Timothy Bunney
253,000
-
618,750
6,265
25,292
202,901
69,573
1,175,781
76%
Anthony Brittain
253,500
-
198,500
20,764
25,292
95,588
-
593,644
50%
Jay Hughes *
253,500
-
84,000
24,948
25,292
185,818
-
573,558
47%
Robert Black **
232,375
-
18,750
16,193
23,044
176,202
-
466,564
42%
Total
1,442,625
150,000
2,285,832
108,529
183,138
973,572
139,271
5,282,967
* Retired as a Director of Euroz Hartleys Group Limited on 8 August 2023
** Retired as a Director of Euroz Hartleys Group Limited on 31 May 2023 and employee of Euroz Hartleys Limited on 30 June 2023
Executive Directors did not receive any Directors fees.
Service agreements
Remuneration and other terms of employment for the Key Management Personnel are formalised in service agreements. Non-Executive Directors are
paid a fixed base fee and superannuation for their role on the Board. Executive Directors agreements provide for performance-related cash bonuses
and other benefits. Other major provisions of the agreements relating to remuneration are set out below.
Andrew McKenzie, Executive Chairman
•
Term of contract - ongoing employment contract
•
Base salary, exclusive of superannuation for the year ended 30 June 2024 of $253,500 (2023 - $253,500) plus profit share and
long‑term incentive
•
Payment on termination of employment by the employer, other than for gross misconduct - three months’ salary
Richard Simpson, Executive Director
•
Term of contract – ongoing part time employment contract
•
Base salary, exclusive of superannuation for the year ended 30 June 2024 of $253,500 (2023 - $253,500) plus profit share
•
Payment on termination of employment by the employer, other than for gross misconduct - six months’ salary
Ian Parker, Executive Director
•
Term of contract - ongoing employment contract
•
Base salary, exclusive of superannuation for the year ended 30 June 2024 of $80,000 (2023 - $70,000) plus commission
•
Payment on termination of employment by the employer, other than for gross misconduct - six months’ salary
Robin Romero, Non-Executive Director
•
Term of contract - ongoing consulting contract
•
Directors fee, exclusive of superannuation for the year ended 30 June 2024 of $75,000 (2023 - $75,000)
Directors’ Report (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
39
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Remuneration Report (audited) (cont’d)
Service agreements (cont’d)
Fiona Kalaf, Non-Executive Director
•
Term of contract - ongoing consulting contract
•
Directors fee, exclusive of superannuation for the year ended 30 June 2024 of $75,000 (2023 - $75,000)
Timothy Bunney, Managing Director Euroz Hartleys Limited
•
Term of contract - ongoing employment contract
•
Base salary, exclusive of superannuation for the year ended 30 June 2024 of $253,000 (2023 - $253,000) plus profit share and
long-term incentive
•
Payment on termination of employment by the employer, other than for gross misconduct - three months’ salary
Anthony Brittain, Executive Director Euroz Hartleys Limited - Chief Operating and Financial Officer
•
Term of contract - ongoing employment contract
•
Base salary, exclusive of superannuation for the year ended 30 June 2024 of $253,500 (2023 - $253,500) plus discretionary bonus and
long‑term incentive
•
Payment on termination of employment by the employer, other than for gross misconduct - three months’ salary
Ben Crossing, Executive Director Euroz Hartleys Limited - Head of Corporate Finance
•
Term of contract - ongoing employment contract
•
Base salary, exclusive of superannuation for the year ended 30 June 2024 of $235,000 (2023 - $235,000) plus profit share and
long‑term incentive
•
Payment on termination of employment by the employer, other than for gross misconduct - six months’ salary
Gavin Allen, Executive Director Euroz Hartleys Limited - Head of Research
•
Term of contract - ongoing employment contract
•
Base salary, exclusive of superannuation for the year ended 30 June 2024 of $229,000 (2023 - $229,000) plus profit share and
long-term incentive
•
Payment on termination of employment by the employer, other than for gross misconduct - three months’ salary
Marc Lincoln, Executive Director Euroz Hartleys Limited - Head of Private Wealth
•
Term of contract - ongoing employment contract
•
Base salary, exclusive of superannuation for the year ended 30 June 2024 of $230,000 (2023 - $230,000) plus discretionary bonus and
long-term incentive
•
Payment on termination of employment by the employer, other than for gross misconduct - three months’ salary
Amanda Boyce, Executive Director Euroz Hartleys Limited - Head of Advice
•
Term of contract - ongoing employment contract
•
Base salary, exclusive of superannuation for the year ended 30 June 2024 of $350,000 (2023 - $350,000) plus discretionary bonus and
long-term incentive
•
Payment on termination of employment by the employer, other than for gross misconduct - three months’ salary
Jay Hughes, Executive Director, retired on 8 August 2023
•
Term of contract - ongoing employment contract
•
Base salary, exclusive of superannuation for the year ended 30 June 2024 of $253,500 (2023 - $253,500) plus profit share
•
Payment on termination of employment by the employer, other than for gross misconduct - three months’ salary
Directors’ Report (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
40
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Remuneration Report (audited) (cont’d)
Shareholdings of Key Management Personnel
The movement during the reporting year in the number of shares in Euroz Hartleys Group Limited held, directly, indirectly or beneficially, by each
member of KMP, including related parties, is as follows:
2024
Balance at
1 July 2023
Received
via PRP
(i)
Received
via LTIP
(a)
Bought &
(sold) (b)
Net change
(c)
Balance
at 30 June
2024
Vested
1 July
2023
Vested
Balance
as at 30
June 2024
(f)
Ordinary shares
A McKenzie
11,520,406
227,544
-
1,049,259
-
12,797,209
-
134,931
R Simpson
2,133,108
20,958
N/A
100,000
-
2,254,066
-
-
I Parker
1,723,261
-
N/A
-
-
1,723,261
-
-
R Romero
73,713
-
N/A
-
-
73,713
-
-
F Kalaf
26,311
-
N/A
-
-
26,311
-
-
T Bunney
1,019,558
255,988
-
51,138
-
1,326,684
-
44,699
A Brittain
763,702
-
-
-
-
763,702
-
61,345
B Crossing
-
163,173
-
151,076
1,248,874
1,563,123
-
-
G Allen (d)
-
-
-
70,630
1,111,927
1,182,557
-
-
M Lincoln (d)
-
-
-
-
30,767
30,767
-
-
A Boyce (d)
-
44,910
-
-
25,531
70,441
-
-
J Hughes (e)
11,552,820
-
-
-
(11,552,820)
-
-
-
28,812,879
712,573
-
1,422,103
(9,135,721)
21,811,834
-
240,975
(a) Shares allotted under Long Term Incentive (LTI) Plan. No shares were allotted under the LTIP in the financial year 2024. N/A represents that KMP was not
entitled to participate in the LTIP
(b) Inclusive of shares allocated in Dividend Reinvestment Plan (DRP)
(c) Net change reflects commencement or cessation as a KMP
(d) KMP since 1 July 2023
(e) Retired as a Director of Euroz Hartleys Group Limited on 8 August 2023
(f)
Included in Balance at 30 June 2024
(i)
These shares are held by the Euroz Share Trust and are currently vesting in accordance with the Euroz Hartleys Group PRP. The shares were granted on 28
June 2024, fair value on grant date was based on the profit share / bonus awarded and number of shares was determined by dividing the profit share / bonus
awarded by Euroz Hartleys Group Limited 30-day Volume Weighted Average Price (VWAP) to 31 May 2024 being $0.835.
Directors’ Report (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
41
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Remuneration Report (audited) (cont’d)
Shareholdings of Key Management Personnel (cont’d)
2023
Balance at
1 July 2022
Received
via PRP
(i)
Received
via LTI
(ii) (a)
Cancelled
(b)
Bought &
(sold) (c)
Balance
at 30 June
2023
Vested
1 July
2022
(d)
Vested
Balance
as at 30
June 2023
(e)
Ordinary shares
A McKenzie
13,390,097
150,212
237,270
(2,257,173)
-
11,520,406
74,855
134,931
R Simpson
2,537,181
23,617
-
(427,690)
-
2,133,108
-
-
I Parker
1,988,473
69,984
-
(335,196)
-
1,723,261
-
-
R Romero
22,575
-
-
(8,862)
60,000
73,713
-
-
F Kalaf
-
-
-
(5,334)
31,645
26,311
-
-
T Bunney
730,283
175,531
236,844
(123,100)
-
1,019,558
22,549
44,699
A Brittain
918,535
-
-
(154,833)
-
763,702
22,549
61,345
J Hughes (f)
13,866,467
23,829
-
(2,337,476)
-
11,552,820
74,855
134,931
R Black (g)
5,262,362
24,680
-
(887,077)
124,715
4,524,680
66,010
115,948
38,715,973
467,853
474,114
(6,536,741)
216,360
33,337,559
260,818
491,854
(a) Shares allotted under Long Term Incentive (LTI) Plan. Shares utilised to fulfil LTI were purchased on market
(b) Cumulative shares cancelled in accordance with the equal capital reduction approved by shareholders on 17 November 2022
(c) Inclusive of shares allocated in Dividend Reinvestment Plan (DRP)
(d) Vested amount on 1 July 2022 shown pre-Equal Capital Reduction and Euroz Hartleys Group Limited Share price on the date was $1.57
(e) Included in Balance at 30 June 2023 and vested balance post Equal Capital Reduction
(f)
Retired as a Director of Euroz Hartleys Group Limited on 8 August 2023
(g) Retired as a Director of Euroz Hartleys Group Limited on 31 May 2023 and employee of Euroz Hartleys Limited on 30 June 2023
(i)
These shares are held by the Euroz Share Trust and are currently vesting in accordance with the Euroz Hartleys Group PRP. The shares were granted on 30
June 2023, fair value on grant date was based on the profit share / bonus awarded and number of shares was determined by dividing the profit share / bonus
awarded by Euroz Hartleys Group Limited 30-day Volume Weighted Average Price (VWAP) to 31 May 2023 being $1.175.
(ii) These shares are held in escrow and are currently vesting in accordance with the Euroz Hartleys Group PRP. The shares were granted on 30 June 2023, fair
value on grant date was based on the LTI amount awarded and number of shares was determined by dividing the LTI amount awarded by Euroz Hartleys Group
Limited 30-day Volume Weighted Average Price (VWAP) to 31 May 2023 being $1.175.
Directors’ Report (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
42
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Remuneration Report (audited) (cont’d)
Performance Rights held by Key Management Personnel
The movement during the reporting period in performance rights in Euroz Hartleys Group Limited held, directly, indirectly or beneficially, by each
KMP, including related parties, is as follows:
2024
Date granted
Granted as
remuneration
Vested and
exercised or
lapsed
Performance Rights
A McKenzie
8 December 2023
1
(1)
R Simpson
8 December 2023
1
(1)
T Bunney
8 December 2023
1
(1)
A Brittain
8 December 2023
1
(1)
B Crossing
8 December 2023
1
(1)
G Allen
8 December 2023
1
(1)
M Lincoln
8 December 2023
1
(1)
A Boyce
8 December 2023
1
(1)
A McKenzie – LTI
6 December 2023
1
(1)
T Bunney – LTI
6 December 2023
1
(1)
A Brittain – LTI
6 December 2023
1
(1)
B Crossing – LTI
6 December 2023
1
(1)
G Allen – LTI
6 December 2023
1
(1)
M Lincoln - LTI
6 December 2023
1
(1)
A Boyce – LTI
6 December 2023
1
(1)
15
(15)
2023
Performance Rights
A McKenzie
7 June 2023
1
(1)
R Simpson
7 June 2023
1
(1)
I Parker
7 June 2023
1
(1)
T Bunney
7 June 2023
1
(1)
A McKenzie - LTI
13 June 2023
1
(1)
T Bunney - LTI
13 June 2023
1
(1)
J Hughes - Retired 8 August 2023
7 June 2023
1
(1)
R Black - Retired 31 May 2023
7 June 2023
1
(1)
8
(8)
These performance rights were issued in accordance with the PRP. In financial year 2024, rights were granted in December 2023 and vested or
lapsed on 28 June 2024.
Share-based compensation
A performance right was issued to KMPs as part of their annual bonus / profit share plan. Where the KMP participates in the profit share pool or
receives a discretionary bonus then the fair value of the shares allotted under the PRP of each right is calculated as 25% of each member’s profit
share or discretionary bonus entitlement. Where the KMP is a Private Wealth Adviser then the fair value of the shares allotted under the PRP is
calculated as a portion of their total monthly brokerage, corporate income and / or portfolio administration commission. Shares issued under the
PRP have a 3-year service vesting condition. Total fair value of shares resulting from the exercise of the performance rights issued to KMPs in the
year amounts to $595,000 (2023: $1,106,816).
Directors’ Report (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
43
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Remuneration Report (audited) (cont’d)
Share-based compensation (cont’d)
In accordance with the terms of the PRP, where a Director, Executive or employee meets the vesting requirements being that they are an Eligible
Employee at the vesting date, then the Performance Rights will be automatically exercised and participants will be allotted the requisite number of
Shares. Performance Rights that do not vest will lapse.
Loans to Key Management Personnel
No loans were made to Directors of Euroz Hartleys Group Limited and the KMPs of the Group, including their personally-related entities during
the year.
Remuneration Report – end
Directors’ Report (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
44
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Indemnification and Insurance of Directors and Officers
Euroz Hartleys Group Limited has a Deed of Indemnity for all the Directors and Officers of the Group against all losses or liabilities incurred by each
Director and Officer in their capacities as Directors and Officers of the Group. The Group agreed to indemnify and keep indemnified the Directors
and Officers against all liabilities by the Directors and Officers as a Director and Officer of the Group to the extent permitted under the Corporations
Act 2001.
During the financial year, Euroz Hartleys Limited paid a premium on behalf of the Group to insure the Directors and Officers of the Group. The
liabilities insured include costs and expenses that may be incurred in defending civil or criminal proceedings that may be brought against the
Directors and Officers in their capacity as Directors and Officers of the Group.
Indemnification of Auditors
The Group has not indemnified the auditor and has not paid an insurance premium to insure the auditor.
Proceedings on behalf of the Group
No person has applied for leave of court to bring proceedings on behalf of the Group or intervene in any proceedings to which the Group is a party
for the purpose of taking responsibility on behalf of the Group for all or any part of those proceedings.
The Group was not a party to such proceedings during the year.
Rounding
The Group is of a kind referred to in ASIC Corporations (Rounding in Financial /Directors’ Reports) Instrument 2016/191 and in accordance with that
Instrument, amounts in the consolidated financial statements and Directors’ report have been rounded off to the nearest thousand dollars, unless
otherwise stated.
Auditor’s independence declaration
The lead auditor’s independence declaration for the year ended 30 June 2024 has been received and forms part of the Directors’ report.
This report is made in accordance with a resolution of the Directors.
Andrew McKenzie
Richard Simpson
Executive Chairman
Executive Director
Date: 21 August 2024
Directors’ Report (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
45
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Auditor’s Independence Declaration
TO THE DIRECTORS OF EUROZ HARTLEYS GROUP LIMITED
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG
International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used
under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under
Professional Standards Legislation.
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Euroz Hartleys Group Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Euroz Hartleys Group
Limited for the financial year ended 30 June 2024 there have been:
i.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
ii.
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Trevor Hart
Partner
Perth
21 August 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
46
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Note
2024
2023
$
$
Rendering of services
85,771,361
93,615,337
Finance income
3,445,145
2,320,121
Total revenue
3, 4
89,216,506
95,935,458
(Loss) / gain on investments
(4,726,765)
346,055
Employee benefits expense
(57,020,211)
(64,359,362)
Depreciation and amortisation expenses
5
(2,695,025)
(2,552,380)
Regulatory expenses
(1,173,561)
(881,227)
Legal, professional and consultancy expenses
(721,665)
(1,202,312)
Conference and seminar expenses
(1,332,172)
(1,243,768)
Stockbroking expenses
(6,315,184)
(4,955,844)
Lease arrangement impairment expenses
5
(1,475,773)
(1,489,556)
Liability write-off
5
1,557,618
-
Other expenses
(6,170,158)
(5,805,765)
Profit before income tax expense
9,143,610
13,791,299
Income tax expense
6
(3,675,548)
(4,452,662)
Profit after income tax expense for the year
5,468,062
9,338,637
Other comprehensive income
Other comprehensive income net of tax
-
-
Total comprehensive income for the year attributable to owners of Euroz Hartleys
Group Limited
5,468,062
9,338,637
Basic earnings per share (cents)
28
3.50
5.51
Diluted earnings per share (cents)
28
3.33
5.25
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.
Consolidated Statement of Profit or Loss and other
Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
47
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Note
2024
2023
$
$
CURRENT ASSETS
Cash and cash equivalents
7
92,944,437
88,155,855
Trade and other receivables
8
24,419,704
25,136,908
Financial assets at fair value through profit and loss
9
11,051,838
16,130,200
Other current assets
10
2,497,524
4,207,730
Current tax receivable
16
-
1,675,992
Total current assets
130,913,503
135,306,685
NON-CURRENT ASSETS
Financial assets at amortised cost
11
2,438,352
686,296
Investments at fair value through profit and loss
12
1,727,987
2,084,000
Plant and equipment
13
461,441
1,384,911
Deferred tax assets
6
5,846,571
5,512,310
Intangible assets
14
38,148,788
38,755,745
Right of use asset
18
13,264,149
1,842,069
Total non-current assets
61,887,288
50,265,331
TOTAL ASSETS
192,800,791
185,572,016
CURRENT LIABILITIES
Trade and other payables
15
52,225,159
55,475,560
Current tax payable
16
734,453
-
Provisions
17
9,675,487
9,016,263
Lease liability
18
828,899
1,358,111
Total current liabilities
63,463,998
65,849,934
NON-CURRENT LIABILITIES
Deferred tax liabilities
6
1,706,824
2,267,797
Provisions
17
272,261
221,819
Lease liability
18
13,118,748
2,194,393
Total non-current liabilities
15,097,833
4,684,009
TOTAL LIABILITIES
78,561,831
70,533,943
NET ASSETS
114,238,960
115,038,073
EQUITY
Issued capital
19 (a)
98,595,762
98,562,525
Share-based payment reserve
19 (g)
10,912,388
9,395,353
Retained earnings
4,730,810
7,080,195
TOTAL EQUITY
114,238,960
115,038,073
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
Consolidated Statement of Financial Position
AS AT 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
48
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Issued Capital
Share-Based
Payment
Reserve
Retained
Earnings
Total
$
$
$
$
Balance at 1 July 2022
136,740,320
8,917,497
47,552,553
193,210,370
Profit for the period
-
-
9,338,637
9,338,637
Total comprehensive income for the period
-
-
9,338,637
9,338,637
Transactions with owners, recorded directly in equity
Shares issued during the period
369,286
-
-
369,286
Return of capital (i)
(39,998,187)
-
-
(39,998,187)
Vested shares under employee share plan
3,639,833
(3,639,833)
-
-
Treasury shares
(2,188,727)
-
-
(2,188,727)
Share-based payments
-
4,117,689
-
4,117,689
Dividends to equity holders (ii)
-
-
(49,810,995)
(49,810,995)
Total contributions by and distributions to owners
(38,177,795)
477,856
(49,810,995)
(87,510,934)
Balance at 30 June 2023
98,562,525
9,395,353
7,080,195
115,038,073
Balance at 1 July 2023
98,562,525
9,395,353
7,080,195
115,038,073
Profit for the period
-
-
5,468,062
5,468,062
Total comprehensive income for the period
-
-
5,468,062
5,468,062
Transactions with owners, recorded directly in equity
Shares issued during the period
467,836
-
-
467,836
Vested shares under employee share plan
1,629,451
(1,629,451)
-
-
Treasury shares
(2,064,050)
-
-
(2,064,050)
Share-based payments
-
3,146,486
-
3,146,486
Dividends to equity holders (ii)
-
-
(7,817,447)
(7,817,447)
Total contributions by and distributions to owners
33,237
1,517,035
(7,817,447)
(6,267,175)
Balance at 30 June 2024
98,595,762
10,912,388
4,730,810
114,238,960
(i)
Return of capital relates to the $39,998,000 equal capital reduction and share cancellation paid in December 2022 as part of the Group’s strategic cash and
capital management initiative. This resulted in the simultaneous cancellation of 16.85% of the issued capital.
(ii) Dividends to equity holders in 2024 include $2,873,000 fully franked December 2023 half year dividend of $0.0175 per share paid in February 2024 and
$4,944,000 fully franked final dividend of $0.03 per share payable to shareholders on 30 August 2024.
Dividends to equity holders in 2023 include $39,992,000 fully franked special dividend of $0.2027 per share paid to shareholders in October 2022 as part
of the Group’s strategic cash and capital management initiative, $4,065,000 fully franked December 2022 half year dividend of $0.025 per share paid in
February 2023 and $5,753,000 fully franked final dividend of $0.035 per share paid to shareholders in September 2023.
The above Consolidated Statements of Changes in Equity should be read in conjunction with the accompanying notes.
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
49
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Note
2024
2023
$
$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers (inclusive of goods and services tax)
91,012,061
88,599,464
Payments to suppliers and employees (inclusive of goods and services tax)
(78,657,311)
(74,404,717)
12,354,750
14,194,747
Interest received
3,445,146
2,316,999
Proceeds from sale of trading shares
7,273,240
6,428,387
Income tax refund
2,144,548
-
Income tax paid
(4,304,884)
(17,100,305)
Payments for trading shares
(1,910,387)
(2,245,226)
Net cash flows from operating activities
27
19,002,413
3,594,602
CASH FLOWS FROM INVESTING ACTIVITIES
Payment into investment fund
-
(2,000,000)
Return of FinClear Services Pty Ltd security deposit
-
350,000
Maturity of term deposit
660,128
-
Payment of term deposit
(2,388,352)
-
Payments for plant and equipment (net of reimbursement)
(181,281)
(327,434)
Net cash flows used in investing activities
(1,909,505)
(1,977,434)
CASH FLOWS FROM FINANCING ACTIVITIES
Return of capital (i)
-
(39,998,186)
Dividends paid (ii)
(8,157,979)
(60,458,913)
Payments for treasury shares
(2,064,050)
(2,188,727)
Repayment of principal lease liabilities
(2,027,295)
(1,306,290)
Interest paid on lease liabilities
(55,002)
(176,722)
Net cash flows used in financing activities
(12,304,326)
(104,128,838)
Net increase / (decrease) in cash and cash equivalents
4,788,582
(102,511,670)
Cash and cash equivalents at 1 July
88,155,855
190,667,525
Cash and cash equivalents at 30 June
7
92,944,437
88,155,855
(i)
Return of capital relates to the $39,998,000 equal capital reduction and share cancellation paid in December 2022 as part of the Group’s strategic cash and
capital management initiative. This resulted in the simultaneous cancellation of 16.85% of the issued capital.
(ii) Dividends paid in 2024 financial year include $5,285,000 fully franked June 2023 final dividend of $0.035 per share paid to shareholders in September 2023
and $2,872,000 fully franked December 2023 half year dividend of $0.0175 per share paid to shareholders in February 2024.
Dividends paid in 2023 financial year include $16,770,000 fully franked June 2022 final dividend of $0.085 per share paid to shareholders in August 2022,
$39,992,000 fully franked special dividend of $0.2027 per share paid to shareholders in October 2022 as part of the Group’s strategic cash and capital
management initiative and $3,731,000 fully franked December 2022 half year dividend of $0.025 per share paid to shareholders in February 2023.
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
NOTES TO FINANCIAL STATEMENT
50
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2024
NOTE
CONTENTS
1.
SUMMARY OF MATERIAL ACCOUNTING POLICIES
52
2.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
60
3.
SEGMENT INFORMATION
62
4.
REVENUE
63
5.
PROFIT BEFORE INCOME TAX EXPENSE
64
6.
INCOME TAX
65
7.
CASH AND CASH EQUIVALENTS
66
8.
TRADE AND OTHER RECEIVABLES
66
9.
OTHER FINANCIAL ASSETS AT FAIR VALUE
67
10.
OTHER CURRENT ASSETS
67
11.
FINANCIAL ASSETS AT AMORTISED COST
67
12.
INVESTMENTS AT FAIR VALUE THROUGH PROFIT AND LOSS
67
13.
PLANT AND EQUIPMENT
68
14.
INTANGIBLE ASSETS
69
15.
TRADE AND OTHER PAYABLES
70
16.
CURRENT TAX RECEIVABLE / (PAYABLE)
70
17.
PROVISIONS
71
18.
RIGHT OF USE ASSET AND LEASE LIABILITY
72
19.
CONTRIBUTED EQUITY
73
20.
DIVIDENDS
75
21.
FINANCIAL INSTRUMENTS
76
22.
REMUNERATION OF AUDITORS
80
23.
CONTINGENT LIABILITIES
81
24.
COMMITMENTS FOR EXPENDITURE
81
25.
RELATED PARTIES
81
26.
EVENTS SUBSEQUENT TO REPORTING DATE
83
27.
RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
83
28.
EARNINGS PER SHARE
84
29.
PARENT ENTITY DISCLOSURES
84
30.
INVESTMENTS IN CONTROLLED ENTITIES
85
31.
COMPANY DETAILS
86
CHAIRMAN’S REPORT
OVERVIEW
51
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
1.
SUMMARY OF MATERIAL ACCOUNTING POLICIES
The financial report is a general-purpose financial report that has been prepared in accordance with Australian Accounting Standards, other
authoritative pronouncements as issued by the Australian Accounting Standards Board and the Corporations Act 2001 as appropriate for
“for-profit” oriented entities.
This financial report has been authorised by the Directors to be issued on 21 August 2024.
Euroz Hartleys Group Limited is a listed public company, trading on the Australian Securities Exchange and Cboe Australia, limited by shares,
incorporated and domiciled in Australia.
The financial report of Euroz Hartleys Group Limited and its controlled entities (the Group), complies with Australian Accounting Standards
and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.
Separate financial information of the Parent Company has been included in Note 29 as permitted by amendments to the Corporations Act
2001.
The following is a summary of the material accounting policies adopted by the Group in the preparation of the financial report. The accounting
policies have been consistently applied, unless otherwise stated.
Basis of preparation
Reporting basis and conventions
The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-
current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.
Presentation and functional currency
The consolidated financial statements are presented in Australian Dollars, which is the Group’s functional currency. All amounts have been
rounded to the nearest dollar, unless otherwise indicated.
Accounting policies
(a)
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Euroz Hartleys Group
Limited (‘Company’ or ‘parent entity’) as at 30 June 2024 and the results of all controlled entities for the year then ended. Euroz
Hartleys Group Limited and its controlled entities together are referred to in this financial report as the Group.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed to,
or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to
direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the
date that control ceases.
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group.
A change in ownership interest without the loss of control is accounted for as an equity transaction, where the difference between
the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in
equity attributable to the parent.
Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised
losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting
policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. All
controlled entities have a 30 June financial year end.
(b)
Income tax
The income tax expense or benefit for the period is the tax payable on that period’s taxable income based on the applicable income tax
rate for Australia, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and
the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are
recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
-
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction
that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or
-
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of
the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
CHAIRMAN’S REPORT
OVERVIEW
52
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
1.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (cont’d)
Accounting policies (cont’d)
(b)
Income tax (cont’d)
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable
amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets
recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be
recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits
available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax
liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable
entity or different taxable entity’s which intend to settle simultaneously.
Euroz Hartleys Group Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under the
Tax Consolidation Regime. The Group formed an income tax consolidated group to apply from 1 July 2003. The tax consolidated group
has entered a tax sharing agreement whereby each Company in the group contributes to the income tax payable in proportion to their
contribution to the net profit before tax of the tax consolidated group.
(c)
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments or other
assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments issued or liabilities
incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest in the acquiree. For each
business combination, the non-controlling interest in the acquiree is measured at either fair value or at the proportionate share of the
acquiree’s identifiable net assets. All acquisition costs are expensed as incurred to profit or loss.
On the acquisition of a business, the Group assesses the financial assets acquired and liabilities assumed for appropriate classification
and designation in accordance with the contractual terms, economic conditions, and the Group’s operating or accounting policies and
other pertinent conditions in existence at the acquisition-date.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest in the
acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the acquiree is recognised
as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value of the identifiable net assets acquired,
being a bargain purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by the acquirer on the acquisition-
date, but only after a reassessment of the identification and measurement of the net assets acquired, the non-controlling interest in
the acquiree, if any, the consideration transferred and the acquirer’s previously held equity interest in the acquirer. The consideration
transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in
profit or loss.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional amounts
recognised and also recognises additional assets or liabilities during the measurement period, based on new information obtained about
the facts and circumstances that existed at the acquisition-date. The measurement period ends on either the earlier of 12 months from the
date of the acquisition or when the acquirer receives all the information possible to determine fair value.
(d)
Revenue recognition
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange for
transferring goods or services to a customer. For each contract with a customer, the Group: identifies the contract with a customer;
identifies the performance obligations in the contract; determines the transaction price which takes into account estimates of variable
consideration and the time value of money; allocates the transaction price to the separate performance obligations on the basis of the
relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when or as each performance
obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts, rebates and
refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates are determined using either
the ‘expected value’ or ‘most likely amount’ method. The measurement of variable consideration is subject to a constraining principle
whereby revenue will only be recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative
revenue recognised will not occur. The measurement constraint continues until the uncertainty associated with the variable consideration
is subsequently resolved. Amounts received that are subject to the constraining principle are initially recognised as deferred revenue in
the form of a separate refund liability. The Group recognises revenue when it transfers control over a service to a customer. The nature
and timing of satisfaction of performance obligations for each of the Group’s main revenue streams is set out below.
CHAIRMAN’S REPORT
OVERVIEW
53
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
1.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (cont’d)
Accounting policies (cont’d)
(d)
Revenue recognition (cont’d)
Brokerage revenue
Brokerage revenue from share trading is considered to be derived from a single obligation being the completion of a share trading
transaction. Accordingly, at the completion of the transaction the revenue is recognised.
Underwriting, placement fees and corporate retainers
Corporate retainers relate to the service fee for work performed such as corporate advisory services. This service is considered a distinct
performance obligation and accordingly revenue is recognised as the service is completed in accordance with the engagement mandate.
Placement fees are fees charged on raising capital for clients. This is determined to be the single performance obligation and revenue is
recognised as the service is completed in accordance with the engagement mandate.
Underwriting fees are derived upon the satisfactory completion of the engagement criteria which may be the execution of a capital raising
or the sale of a pre-determined number of shares for a client. The performance obligation is determined to be the completion of the
capital raise or sale of the shares and revenue is recognised when the service is completed in accordance with the engagement mandate.
The payment terms in relation to this source of revenue is up to 7 days.
Performance and management fees
Performance fee income is derived from investment management agreements based on the performance of an underlying fund over
a contracted period of time. If the fund performance exceeds a specified threshold the performance fee payable is determined and
recorded as revenue at the conclusion of the performance period. The performance obligation is determined to be singular being to
achieve a certain performance target over a specified period.
Management fee income is derived from investment management agreements whereby a monthly management fee is payable based
on the fund value. The performance obligation is the monthly management of the fund and revenue is recorded monthly following the
completion of the month.
The payment terms in relation to this source of revenue is up to 20 days.
Wealth management fees
Wealth management fee income is derived from agreements with clients individually whereby a monthly management fee is payable
based on the portfolio value or alternatively a fixed fee arrangement. The performance obligation is the monthly management of the
investment portfolio and revenue is recorded monthly following the completion of the month.
Proceeds from the sale of investments
Gross proceeds and cost of disposal on sale of investments are disclosed as gain / loss on investments along with unrealised gains /
losses in investments held at year end.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost
of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
(e)
Receivables
Trade receivables are recognised as current receivables as they are generally settled within 30 days from the date of recognition.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. The Group
has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To measure the
expected credit losses, trade receivables have been grouped based on days overdue.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group’s receivables from customers and investment securities. For the Group it arises from
receivables from subsidiaries, as well as from customers.
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer and has established a credit
and trading policy which sets certain trading limits and guidelines. These limits are reviewed and adjusted by management when and, if
required, depending on circumstances prevailing at that time.
CHAIRMAN’S REPORT
OVERVIEW
54
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
1.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (cont’d)
Accounting policies (cont’d)
(f)
Plant and equipment
Each class of plant and equipment is carried at cost as indicated less, where applicable, any accumulated depreciation and impairment
losses.
The cost of fixed assets constructed within the Group includes the cost of materials, direct labour, borrowing costs and an appropriate
proportion of fixed and variable overheads.
Depreciation
The depreciable amount of all plant and equipment is depreciated on a straight-line basis over their useful lives to the residual values
commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are:
Class of plant and equipment
Depreciation Rate
Leasehold improvements
2 - 25%
Plant and equipment
25 – 33%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in
the statement of profit or loss.
(g)
Leasehold improvements
The cost of improvements to or on leasehold properties are amortised over the unexpired period of the lease or the estimated useful life
of the improvement to the Group, whichever is the shorter.
(h)
Leases
Short term lease payments are charged to the statement of profit or loss in the periods in which they are incurred, as this represents the
pattern of benefits derived from the leased assets.
Right of use assets
A right of use asset is recognised at the commencement date which aligns with the date when the leased asset is ready for use. The right of
use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at
or before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost
of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset.
Right of use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset,
whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of the lease term, the depreciation
is over its estimated useful life. Right of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right of use asset and corresponding lease liability for short-term leases with terms of 12
months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of
the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot
be readily determined, the Group’s incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives
receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees,
exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination
penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a
change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty
of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of
use asset, or to profit or loss if the carrying amount of the right of use asset is fully written down.
(i)
Trade and other payables
Trade and other payables comprise liabilities for goods and services provided to the Group prior to the end of the financial year and which
are unpaid. Due to their short-term nature they are measured at amortised cost and not discounted. The amounts are unsecured and are
usually paid within 30 days of recognition.
CHAIRMAN’S REPORT
OVERVIEW
55
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
1.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (cont’d)
Accounting policies (cont’d)
(j)
Dividends
Provision is made for the amount of any dividend declared and authorised by the Directors on or before the end of the financial year, but
not distributed at reporting date.
(k)
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in
which they are incurred.
(l)
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is probable the Group
will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a
provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks
and uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted using a current pre-tax rate
specific to the liability. The increase in the provision resulting from the passage of time is recognised as a finance cost.
(m)
Employee benefits
(i)
Wages, salaries and annual leave
Liabilities for wages, salaries and annual leave expected to be settled within 12 months of the reporting date are recognised in
respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities
are settled.
(ii)
Employee benefits payable later than one year
Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to
be made for those benefits. There have been no changes to the method used to calculate this liability.
(iii)
Superannuation
Contributions are made by the Group to superannuation funds as stipulated by statutory requirements and are charged as
expenses when incurred.
(iv)
Employee benefit on costs
Employee benefit on costs, including payroll tax, are recognised and included in employee benefits liabilities and costs when the
employee benefits to which they relate are recognised as liabilities.
(v)
Performance rights
The Performance Right represents a right to be allotted a number of ordinary shares in Euroz Hartleys Group Limited to reflect
25% of the profit share or the discretionary bonus or for Private Wealth Advisers who are paid a commission, a portion of their
total monthly brokerage, corporate income and / or portfolio administration commission that would have been paid to an Eligible
Employee who opts in.
An Eligible Employee means a full time or part-time employee of any member of the Group or a Director of any member of the
Group who holds a salaried employment or office with a member of the Group. If there is a change in the employing entity of a
Participant from one member of the Group to another member of the Group, the Participant will be considered, for the purposes of
this plan, to have continued to be an Eligible Employee at all relevant times.
Each performance right is subject to a service based vesting condition. Performance Rights are issued for nil consideration and
Performance Rights that do not vest lapse with a nil value.
In accordance with the terms of the PRP, where an Eligible Employee meets the vesting requirements being that they are an
Eligible Employee at the vesting date, then the Performance Rights will be automatically exercised and participants will be allotted
the requisite number of Shares. Shares utilised to fulfil the awards made under the PRP are purchased on market utilising funds
accrued from the profit share pool, discretionary bonuses or brokerage, corporate income and / or portfolio administration
commission.
The fair value of shares allotted under the PRP is estimated at grant date based on 25% of profit share or discretionary bonus or
for Private Wealth Advisers who are paid a commission, a portion of their total monthly brokerage, corporate income and portfolio
administration commission that will be paid at year end to eligible employees.
For financial year 2024, where an employee had met the relevant criteria and had opted in to the PRP, the relevant Performance
Rights were granted in December 2023 and vested on 28 June 2024 with the requisite number of shares being allotted on 28
June 2024.
CHAIRMAN’S REPORT
OVERVIEW
56
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
1.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (cont’d)
Accounting policies (cont’d)
(m)
Employee benefits (cont’d)
(v)
Performance rights (cont’d)
Once the performance right converts to plan shares these are subject to a further 3-year service condition. following the initial year
of service and are escrowed for a further period of 11 years and one day. No amount is payable upon vesting of shares issued
under the PRP. Shares allotted under the PRP are subject to income tax at the participants individual income tax rate at the time of
ceasing of escrow from the PRP.
The Board may, at their discretion accelerate the vesting period. Unvested shares are subject to bad leaver clawback provisions
during the 3-year period and bad leaver provisions for the entirety of the escrow period.
(vi)
Profit-sharing
The Group recognises a liability and an expense for profit-sharing based on a formula that calculates the profit attributable to the
Company’s employees after certain adjustments.
(vii)
Termination benefits
The Group recognises a liability and an expense when the Group demonstrates a commitment to either terminate the employee
before the normal retirement date or provide termination benefits as a result of an offer made to the employee prior to retirement
date.
(n)
Cash and cash equivalents
For purposes of the statement of cash flows, cash and cash equivalents includes deposits at call which are readily convertible to cash on
hand and are subject to an insignificant risk of changes in value, net of outstanding bank overdrafts.
(o)
Earnings per share
(i)
Basic earnings per share
Basic earnings per share is determined by dividing the net profit after income tax attributable to members of the Company,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in ordinary shares issued during the year.
(ii)
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after
income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average
number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. The potential
impact of issuing treasury shares externally is considered when calculating diluted earnings per share.
(p)
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value
is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date; and assumes that the transaction will take place either: in the principle market; or in the absence of
a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act
in their economic best interest. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation
techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used,
maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the significance of the
inputs used in making the measurements. Classifications are reviewed each reporting date and transfers between levels are determined
based on a reassessment of the lowest level input that is significant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or
when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is
a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification
of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data.
(q)
Fair value estimation
The fair value of financial instruments traded in active markets (such as publicly traded shares or share options, and trading and available-
for-sale securities) is based on quoted market prices at the reporting date. The quoted market price used for financial assets held by the
Group is the current closing price; the appropriate quoted market price for financial liabilities is the current closing price.
CHAIRMAN’S REPORT
OVERVIEW
57
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
1.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (cont’d)
Accounting policies (cont’d)
(q)
Fair value estimation (cont’d)
The fair value of financial instruments that are not traded in an active market (for example, unlisted options) is determined using valuation
techniques. The Group uses the Black-Scholes option pricing model to value unlisted options, taking into consideration the terms on
which the options were granted. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the
remaining financial instruments.
The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values. The
fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market
interest rate that is available to the Group for similar financial instruments.
(r)
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable
from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an
item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing
activities, which are disclosed as operating cash flows.
(s)
Treasury Shares
Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss is
recognised in profit or loss on the purchase, sale, issue or cancellation of the group’s own equity instruments. Any difference between the
carrying amount and the consideration, if reissued, is recognised in share-based payments reserve.
(t)
Investments and Financial Assets
Investments and other financial assets are securities in listed and unlisted companies initially measured at fair value. Transaction costs are
included as part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently
measured at either amortised cost or fair value depending on their classification. Classification is determined based on both the business
model within which such assets are held and the contractual cash flow characteristics of the financial asset unless, an accounting
mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the Group has
transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a
financial asset, its carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as financial assets at
Fair Value Through Profit or Loss (FVTPL). Typically, such financial assets will be either: (i) held for trading, where they are acquired for the
purpose of selling in the short-term with an intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition
where permitted. Fair value movements are recognised in profit or loss.
Financial assets at amortised cost
The Group measures financial assets at amortised cost if both of the following conditions are met:
(i)
The financial asset is held within a business model with the objective to hold financial assets to collect contractual cashflows; and
(ii)
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the Effective Interest Rate (EIR) method and are subject to
impairment. Expected Credit Losses (ECL) on financial assets at amortised costs are based on the difference between the contractual
cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation
of the original effective interest rate.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised cost or fair
value through other comprehensive income. The measurement of the loss allowance depends upon the Group’s assessment at the end
of each reporting period as to whether the financial instrument’s credit risk has increased significantly since initial recognition, based on
reasonable and supportable information that is available, without undue cost or effort to obtain.
CHAIRMAN’S REPORT
OVERVIEW
58
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
1.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (cont’d)
Accounting policies (cont’d)
(t)
Investments and Financial Assets (cont’d)
Impairment of financial assets (cont’d)
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss
allowance is estimated. This represents a portion of the asset’s lifetime expected credit losses that is attributable to a default event that
is possible within the next 12 months. Where a financial asset has become credit impaired or where it is determined that credit risk has
increased significantly, the loss allowance is based on the asset’s lifetime expected credit losses. The amount of expected credit loss
recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of the instrument
discounted at the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is recognised within other
comprehensive income. In all other cases, the loss allowance is recognised in profit or loss.
(u)
Current / non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is current when: it is expected to be realised or intended to be sold or consumed in the normal operating cycle; it is held
primarily for the purpose of trading; it is expected to be realised within twelve months after the reporting period; or the asset is cash or
cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All
other assets are classified as non-current.
A liability is current when: it is expected to be settled in normal operating cycle; it is held primarily for the purpose of trading; it is due to be
settled within twelve months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least
twelve months after the reporting period. All other liabilities are classified as non-current.
(v)
Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the
proceeds. Incremental costs directly attributable to the issue of new shares or options, or for the acquisition of a business, are included in
the cost of the acquisition as part of the purchase consideration.
(w)
Intangible asset
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at the date of
the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible assets are not amortised and
are subsequently measured at cost less any impairment. Indefinite life intangibles are tested for impairment annually or more frequently if
events, conditions or circumstances indicate that they might be impaired. Finite life intangible assets are subsequently measured at cost
less amortisation and any impairment. The gains or losses recognised in profit or loss arising from the derecognition of intangible assets
are measured as the difference between net disposal proceeds and the carrying amount of the intangible asset. The method and useful
lives of finite life intangible assets are reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for
prospectively by changing the amortisation method or period.
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for impairment or more
frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment
losses. Impairment losses on goodwill are taken to profit or loss and are not subsequently reversed.
(x)
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment or more frequently if events or changes in circumstances indicate that they might be impaired. Other non-financial assets are
reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset’s fair value less costs to sell and value-in-use. The value-in-use is the present value of the
estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which the
asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating unit.
(y)
Equity accounted investments
Associates are those entities which the Group has significant influence, but not control or joint control, over the financial and operating
policies.
CHAIRMAN’S REPORT
OVERVIEW
59
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
1.
SUMMARY OF MATERIAL ACCOUNTING POLICIES (cont’d)
Accounting policies (cont’d)
(y)
Equity accounted investments (cont’d)
Interests in associates are accounted for using the equity method. These equity accounted investments are initially recognised at cost.
Subsequent to initial recognition, the consolidated financial statements include the Group’s share of profit or loss of equity accounted
investees until the date on which significant influence ceases. Dividends received from associates are recognised as a reduction to the
equity accounted investments.
At each reporting date, the Group reviews the carrying amounts of its equity accounted investments to determine whether there is an
indication of impairment. If any indication exists, then the asset’s recoverable amount is estimated, being the higher of value in use and
fair value less costs of disposal. The Group measures fair value of its equity accounted investments using a quoted price in an active
market for that investment, when one is available.
An impairment loss is recognised if the carrying amount of the asset exceeds its recoverable amount and is recognised in profit or loss.
Any impairment loss recognised is reversed only to the extent that the asset’s carrying amount does not exceed its carrying amount that
would have been determined if no impairment loss had been recognised.
(z)
New standards and interpretations
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board
(AASB) that are relevant to their operations and effective for the current year.
New Accounting Standards and Interpretations not yet mandatory or early adopted
The AASB has issued the following new and amended accounting standards and interpretations that have mandatory application dates for future
reporting periods. The Group has not early adopted any of these standards.
AASB No.
New standards or amendments
Application date
AASB 2020-1
Amendments to Australian Accounting Standards – Classification of Liabilities as
Current or Non-current
1 January 2024
AASB 2020-6
Amendments to Australian Accounting Standards – Classification of Liabilities as
Current or Non-current – Deferral of Effective Date
1 January 2024
AASB 2015-10
Amendments to Australian Accounting Standards – Effective Date of Amendments
to AASB 10 and AASB 128
1 January 2025
AASB 2017-5
Amendments to Australian Accounting Standards – Effective Date of Amendments
to AASB 10 and AASB 128 and Editorial Corrections
1 January 2025
AASB 2021-7(a-c)
Amendments to Australian Accounting Standards – Effective Date of Amendments
to AASB 10 and AASB 128 and Editorial Corrections
1 January 2025
AASB 18
Presentation and Disclosure in Financial Statements
1 January 2027
2.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements incorporated in the financial statements are based on historical knowledge and best available current information.
Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally
and within the Group.
Key estimates and judgments
(i)
Classification of other financial assets
The Group classifies investments in listed and unlisted securities at fair value through profit and loss. These securities are accounted for
at fair value. Any increments or decrements in their value at year end are charged or credited to the statement of profit or loss.
(ii)
Impairment of non-financial assets
At each reporting date, the Group compares the carrying values and the recoverable amount of non-financial assets to determine
whether there is any indication of impairment. If impairment indicators exist, any excess of the investment entity’s carrying value over
the recoverable amount is expensed to the statement of profit or loss. Where it is not possible to estimate the recoverable amount of an
individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
CHAIRMAN’S REPORT
OVERVIEW
60
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
2.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (cont’d)
Key estimates and judgments (cont’d)
(iii)
Goodwill
Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired.
For the purpose of impairment testing, the goodwill on acquisition of Blackswan Equities Limited and on the acquisition of Entrust have
been allocated to the Private Wealth cash generating units (CGUs). Goodwill on the acquisition of Hartleys Limited has been allocated to
the Private Wealth and Wholesale CGU respectively at $3,139,199 and $4,368,420.
(iv)
Intangible assets
Upon acquisition of Entrust, Euroz Hartleys Group acquired $1,736,240 in other intangible assets consisting 3 separate client portfolios.
The useful life of these intangibles is assessed as 10 years and the carrying value as at 30 June 2024 was $173,624. The client portfolios
were allocated to the Private Wealth CGU.
On acquisition of Hartleys Limited, the Group recognised an intangible for Hartleys Limited brand name of $19,500,000 with an indefinite
useful life and customer relationship asset of $3,900,000 with a useful life of 9 years. The values of these intangibles were measured
by an external professional valuer. Amortisation expense of the customer relationship of $433,333 was recognized during the year. The
intangible assets associated with the Hartleys Limited’s brand name was allocated to the Private Wealth and Wholesale CGU respectively
at $8,153,635 and $11,346,365.
Impairment assessment of cash generating units containing goodwill and intangibles results
For impairment testing, goodwill and intangibles were allocated to the Group’s CGUs as follows:
Goodwill
Intangibles
2024
2023
2024
2023
$
$
$
$
Private Wealth
11,581,744
11,581,744
10,727,259
11,334,216
Wholesale
4,368,420
4,368,420
11,471,364
11,346,365
15,950,164
15,950,164
22,198,623
22,805,581
The recoverable amount of both CGUs was based on their value in use, estimated using discounted cashflows.
The assumptions used in the estimation of the recoverable amount are set out in the table below. The values assigned to the key
assumptions represent management’s assessment of future cashflows and economic outlook and have been based on historical data
from both external and internal sources.
2024
2023
%
%
Discount rate
10
11.0
Terminal value growth rate
1.0
1.0
Average growth rate in next 5 years
0.0
0.0
The cash flow projections were based on historical averages. Projected cash flows for each CGU included specific estimates for a 5-year
period and a terminal value thereafter, discounted using an appropriate discount rate.
CHAIRMAN’S REPORT
OVERVIEW
61
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
2.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (cont’d)
Key estimates and judgments (cont’d)
(iv)
Intangible assets (cont'd)
Impairment assessment of cash generating units containing goodwill and intangibles results (cont’d)
The following analysis is for the Private Wealth CGU which had a lower headroom than the Wholesale CGU:
Sensitivity analysis
Percentage required for
carrying amount to equal
recoverable amount
2024
2023
%
%
Discount rate
14.41
20.35
The impairment assessment is not overly sensitive to the terminal value growth rate. The Private Wealth CGU is able to withstand a
reduction in forecast net cashflows of up to 11.67% before carrying amount exceeds its recoverable amount.
The Board have assessed that there is no indication that goodwill or intangible assets are impaired.
3.
SEGMENT INFORMATION
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Executive team (the chief
operating decision makers) in assessing performance and in allocating resources.
Euroz Hartleys Group Limited business segments have been determined to be:
Private Wealth
Private Wealth refers to private wealth advisers who work with high net wealth individuals, companies, SMSF and other clients. Private wealth
advisers provide a broad investment offering of stockbroking and corporate services for clients. The wealth management team provides
strategic investment advice, superannuation advice, investment management and portfolio administration services.
Wholesale
Wholesale refers to the Institutional Dealing, Research and Corporate Finance team who work with companies and other institutional clients.
The Institutional Dealing team provides quality advice, idea generation, site visits, and roadshow corporate access highly focused on
resources, mining services and small to mid- cap Western Australia (WA) industrials. Working with the Institutional team is the Research team
which has extensive coverage of ASX listed industrials, resources and energy companies and provides these insights for our institutional
clients. The Corporate Finance team specialises in Equity Capital Markets (ECM), Mergers and Acquisitions (M&A) and strategic Corporate
Advisory.
Funds Management
Westoz Funds Management Pty Ltd (WFM), a wholly owned subsidiary of Euroz Hartleys Group has an Australian Financial Services Licence
(AFSL). In October 2022, WFM was appointed to be the responsible manager for Westoz Resources Fund Limited (WRFL). WRFL is an unlisted
investment fund whose purpose is to generate positive returns from a portfolio of stocks with a focus on the resources sector in Western
Australia. The investment mandate is being managed by WFM. The funds management revenue is derived from the management of this mandate.
Due to the nature of the business providing financial services to the clients driven by the employees, management does not consider asset
and liabilities separation to be an appropriate measure of segments.
Entity-wide disclosures
The Group operates with in the geographical region of Australia. Therefore, the total revenue and non-current assets are reflected on the
face of the financial statements.
Basis of accounting for purpose of reporting by operating segments
The accounting policies used by the Group in reporting segments internally are consistent with those adopted in the financial statements of
the Group, unless otherwise stated.
CHAIRMAN’S REPORT
OVERVIEW
62
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
3.
SEGMENT INFORMATION (cont’d)
Segment performance
Private
Wealth
Wholesale
Funds
Management
Other
Total
$
$
$
$
$
2024
Brokerage
21,877,313
7,543,547
-
-
29,420,860
Underwriting and placement fees
6,805,794
27,019,842
-
-
33,825,636
Performance and management fees
-
-
243,433
-
243,433
Wealth management fees
19,551,356
6,961
-
-
19,558,317
Corporate advisory
9,000
2,261,000
-
-
2,270,000
Interest received
1,669,053
1,669,053
107,039
-
3,445,145
Other revenue
37,825
75,141
-
340,149
453,115
Total segment revenue
49,950,341
38,575,544
350,472
340,149
89,216,506
Segment income tax expense
430,358
2,871,420
71,639
302,131
3,675,548
Segment net operating profit/(loss) after tax
73,912
4,749,598
(55,258)
699,810
5,468,062
Private
Wealth
Wholesale
Funds
Management
Other
Total
$
$
$
$
$
2023
Brokerage
19,995,900
5,115,367
-
-
25,111,267
Underwriting and placement fees
10,229,130
28,463,975
-
-
38,693,105
Performance and management fees
-
-
307,431
-
307,431
Wealth management fees
18,180,185
17,718
-
-
18,197,903
Corporate advisory
-
11,066,059
-
-
11,066,059
Interest received
1,121,487
1,121,487
74,025
3,122
2,320,121
Other revenue
46,004
175,634
-
17,934
239,572
Total segment revenue
49,572,706
45,960,240
381,456
21,056
95,935,458
Segment income tax expense
946,224
3,748,972
(19,969)
(222,565)
4,452,662
Segment net operating profit/(loss) after tax
1,718,753
7,385,363
(35,699)
270,220
9,338,637
4.
REVENUE
2024
2023
$
$
Revenue
89,216,506
95,935,458
89,216,506
95,935,458
CHAIRMAN’S REPORT
OVERVIEW
63
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
4.
REVENUE (cont’d)
The disaggregation of revenue is as follows:
2024
2023
$
$
Brokerage
29,420,860
25,111,267
Underwriting and placement fees
33,825,636
38,693,105
Performance and management fees
243,433
307,431
Wealth management fees
19,558,317
18,197,903
Corporate advisory fees
2,270,000
11,066,059
Interest received
3,445,145
2,320,121
Other revenue
453,115
239,572
89,216,506
95,935,458
5.
PROFIT BEFORE INCOME TAX EXPENSE
2024
2023
$
$
Profit before income tax is determined after accounting for the following specific expenses:
Plant and equipment – depreciation
201,390
197,162
Leasehold improvements – amortisation
804,474
526,228
Right of use asset – amortisation
1,082,204
1,222,033
Intangible asset – amortisation
606,957
606,957
2,695,025
2,552,380
Finance costs
Interest and finance charges paid / payable on lease liabilities
55,002
176,722
Employee costs
Superannuation expense
3,341,031
3,026,550
Share-based payments: - Performance Rights Plan
3,006,278
3,978,418
- Long term Incentive
140,208
139,271
Lease arrangement
Right of use assets impairment expense (i)
1,475,773
1,174,911
Right of use liabilities write off (i)
(1,557,618)
-
Leasehold improvements impairment expense (i)
-
314,645
(81,845)
1,489,556
(i)
Euroz Hartleys Group Limited signed a lease agreement in May 2023 for office space at QV1 located at 250 St Georges Terrace, Perth. The lease
is for part of Level 37 and the whole of Level 38 of QV1 for a period of 10 years commencing on 1 July 2024 with two options to renew for 5 years
commencing 1 July 2034 and 1 July 2039. The lease for 2,505 square metres is on normal commercial terms with a market rate incentive.
An assessment of the contract determined that it qualifies as a lease, as it grants the right to control the use of a specific asset for a defined period
in exchange for compensation. As a result, the recognition of the right of use asset and lease liability occurred in December 2023 when the office
became available for use.
Following the move to QV1, the Group surrendered the leases for the premises at Level 18 Alluvion, 58 Mounts Bay Road, Perth WA and Level 6
Westralia, 141 St Georges Terrace, Perth WA on 31 December 2023 and 31 January 2024 respectively. Accordingly, the respective right-of-use assets
were fully written off and the lease liabilities were also wound down to the extent of the agreed surrender fee which has since been paid. Details of the
movement of the right of use assets and liabilities are on note 18.
CHAIRMAN’S REPORT
OVERVIEW
64
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
6.
INCOME TAX
2024
2023
$
$
Profit before income tax expense
9,143,610
13,791,299
Income tax using Group’s tax rate of 30% (2023: 30%)
2,743,083
4,137,390
Add tax effect of:
Deferred tax not recognised on capital losses
764,165
-
Other non-allowable items
198,300
315,272
3,705,548
4,452,662
Less tax effect of:
Franked dividends received
(30,000)
-
Income tax expense
3,675,548
4,452,662
2024
2023
$
$
The components of tax expense / (benefit) comprise:
Current tax
4,318,555
6,549,907
Deferred tax
(643,007)
(2,097,245)
Income tax expense
3,675,548
4,452,662
Numerical reconciliation between the applicable tax rate and effective tax rate:
2024
2023
%
%
Applicable tax rate
30
30
Tax effect of non-deductible expenses
3.3
2.3
Tax effect of temporary differences not recognised
7.2
-
Tax effect of franking credit offsets
(0.3)
-
Effective tax rate
40.2
32.3
Deferred tax asset is attributable to the following:
2024
2023
$
$
Investments at fair value
1,144,157
-
Employee benefits
2,984,325
2,768,559
Accruals
1,718,089
2,743,751
5,846,571
5,512,310
Deferred tax assets are recognised only to the extent that it is probable that future taxable profits can be generated.
CHAIRMAN’S REPORT
OVERVIEW
65
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
6.
INCOME TAX (cont’d)
Deferred tax liability is attributable to the following:
2024
2023
$
$
Investments at fair value
-
359,482
Performance rights plan
1,706,824
1,908,315
1,706,824
2,267,797
Tax consolidation legislation
Euroz Hartleys Group Limited and its wholly-owned Australian subsidiaries implemented the tax consolidation legislation as of 1 July 2003.
The entities have also entered into a tax sharing and funding agreement. Under the terms of this agreement, the wholly-owned entities
reimburse Euroz Hartleys Group Limited for any current income tax payable by Euroz Hartleys Group Limited arising in respect of their
activities. The reimbursements are payable at the same time as the associated income tax liability falls due and have therefore been
recognised as a current tax-related receivable by Euroz Hartleys Group Limited. In the opinion of the Directors, the tax sharing agreement is
also a valid agreement under the tax consolidation legislation and limits the joint and several liability of the wholly-owned entities in the case
of a default by Euroz Hartleys Group Limited.
7.
CASH AND CASH EQUIVALENTS
2024
2023
$
$
Cash at bank and on hand
77,853,136
74,119,850
Restricted cash:
Cash margin account
1,696,454
2,180,899
Client trust account
13,394,847
11,855,106
Total restricted cash
15,091,301
14,036,005
Total cash and cash equivalents
92,944,437
88,155,855
The cash margin account is held by the Australian Securities Exchange (ASX) as a margin requirement to cover possible market participant
default and is adjusted each day to reflect the Group’s current obligation to the clearing house at ASX. Client trust bank balances are client
funds and not available for general use by the Group.
8.
TRADE AND OTHER RECEIVABLES
2024
2023
$
$
Trade receivables
2,896,482
3,355,027
Broker receivable (i)
21,502,169
21,720,082
Other receivable
21,053
61,799
Total
24,419,704
25,136,908
Receivables are measured at amortised cost and their carrying amount approximates fair value.
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Group has established a
credit and trading policy which sets certain trading limits and guidelines. These limits are reviewed and adjusted by management when and, if
required, depending on circumstances prevailing at that time.
(i)
Broker receivables relates to outstanding client accounts and amounts owed to the Group by ASX Clearing. These are settled with the broker payable
as disclosed in Note 15.
CHAIRMAN’S REPORT
OVERVIEW
66
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
9.
OTHER FINANCIAL ASSETS AT FAIR VALUE
2024
2023
$
$
Fair value of listed securities
2,450,262
5,728,629
Fair value of unlisted securities
8,601,576
10,401,571
Total
11,051,838
16,130,200
These securities are held at fair value through profit or loss. The fair values of listed securities are based on the closing price of each
investment at year end. The fair values of unlisted securities are measured using the Black-Scholes model at year end. The Black-Scholes
model inputs are based on the risk-free Australian Bond rate and security share price at the point of revenue recognition.
The model’s volatility % is calculated on the historical share price volatility, with the lookback period defined by the number of days until the
unlisted security expires.
10.
OTHER CURRENT ASSETS
2024
2023
$
$
Prepayments
2,294,917
2,469,727
Accrued income
202,607
1,738,003
Total
2,497,524
4,207,730
11.
FINANCIAL ASSETS AT AMORTISED COST
2024
2023
$
$
Security deposit (i)
50,000
50,000
Financial guarantee – term deposit
2,388,352
636,296
2,438,352
686,296
(i)
Security deposit is held by FinClear Services Pty Ltd who is the clearing and trading participant on behalf of Euroz Hartleys Limited for international
trades.
12.
INVESTMENTS AT FAIR VALUE THROUGH PROFIT AND LOSS
2024
2023
$
$
Opening fair value – 1 July
2,084,000
-
Additions
70,000
2,000,000
Fair value (decrements) / increments
(426,013)
84,000
Closing fair value 30 June
1,727,987
2,084,000
Investments at fair value through profit and loss relates to Euroz Hartleys Group Limited’s 7.1% (2023: 7.7%) investment in Westoz Resources
Fund Limited (WRFL). WRFL is an unlisted investment fund whose purpose is to generate positive returns and returning dividends to investors
through the trading of stocks generally associated with the resources sector in Western Australia. The responsible manager of the fund is
Westoz Funds Management Pty Ltd a wholly owned subsidiary of Euroz Hartleys Group Limited.
WRFL is measured at fair value through profit or loss accounting in accordance with the Group accounting policies as disclosed in the annual
report. The fair value of the investment was based on the net tangible asset of WRFL as at 30 June 2024.
CHAIRMAN’S REPORT
OVERVIEW
67
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
13.
PLANT AND EQUIPMENT
2024
2023
$
$
Leasehold improvements
At cost
-
2,288,948
Less: Accumulated amortisation
-
(925,483)
Impairment expense
-
(314,645)
-
1,048,820
Office equipment
At cost
1,121,682
1,014,997
Less: Accumulated depreciation
(736,859)
(763,798)
384,823
251,199
Furniture, fixtures and fittings
At cost
106,845
135,393
Less: Accumulated depreciation
(30,227)
(50,501)
76,618
84,892
461,441
1,384,911
Reconciliations
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning and end of the current and previous financial
year are set out below:
Leasehold
improvements
Plant and
equipment
Total
$
$
$
2024
Carrying amount at 1 July 2023
1,048,820
336,091
1,384,911
Additions
-
362,445
362,445
Write-off
(63,182)
(35,705)
(98,887)
Depreciation / amortisation expense (note 5)
(804,474)
(201,390)
(1,005,864)
Reimbursement
(181,164)
-
(181,164)
Carrying amount at 30 June 2024
-
461,441
461,441
2023
Carrying amount at 1 July 2022
1,710,579
386,983
2,097,562
Additions
181,164
146,270
327,434
Write-off
(2,050)
-
(2,050)
Depreciation / amortisation expense (note 5)
(526,228)
(197,162)
(723,390)
Impairment expense
(314,645)
-
(314,645)
Carrying amount at 30 June 2023
1,048,820
336,091
1,384,911
CHAIRMAN’S REPORT
OVERVIEW
68
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
14.
INTANGIBLE ASSETS
2024
2023
$
$
Goodwill (a)
15,950,164
15,950,164
Other intangible assets (b)
22,198,624
22,805,581
Total
38,148,788
38,755,745
2024
2023
$
$
(a)
Allocation of goodwill:
Goodwill on acquisition of Blackswan
2,803,345
2,803,345
Goodwill on acquisition of Entrust
5,639,200
5,639,200
Goodwill on acquisition of Hartleys
7,507,619
7,507,619
Total
15,950,164
15,950,164
Goodwill balances are deemed to have an indefinite useful life and accordingly an impairment test was performed during the year. Based on
the assessment, no impairment was identified. Note 2 (iii) and Note 2 (iv) contains additional information on this assessment.
2024
2023
$
$
(b)
Other intangible assets:
Client portfolios (i)
173,623
347,247
Hartleys Brand (ii)
19,500,000
19,500,000
Customer relationships - Hartleys (ii)
2,275,001
2,708,334
ASX Licence
250,000
250,000
Total
22,198,624
22,805,581
Client
portfolios
Customer
relationship
- Hartleys
Total
$
$
$
2024
Balance as at 1 July 2023
347,247
2,708,334
3,055,581
Amortisation expense
(173,624)
(433,333)
(606,957)
Balance as at 30 June 2024
173,623
2,275,001
2,448,624
2023
Balance as at 1 July 2022
520,871
3,141,667
3,662,538
Amortisation expense
(173,624)
(433,333)
(606,957)
Balance as at 30 June 2023
347,247
2,708,334
3,055,581
(i)
The useful life of the intangibles was assessed as 10 years and amortised accordingly.
(ii) On acquisition of Hartleys Limited, the Group recognised an intangible for the Hartleys brand name of $19,500,000 with an indefinite useful life and
customer relationship asset of $3,900,000 with a useful life of 9 years. An impairment assessment was performed during the year. Refer to Note 2 (iv).
CHAIRMAN’S REPORT
OVERVIEW
69
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
15.
TRADE AND OTHER PAYABLES
2024
2023
$
$
Trade and other payables
3,045,654
1,812,293
Broker payable (i)
34,258,993
32,328,853
Dividend payable
4,944,678
5,753,047
Accruals
9,975,834
15,581,367
Total
52,225,159
55,475,560
Payables are measured at amortised cost and their carrying amount approximates fair value.
Dividend payable represents the dividend declared by the Board before the reporting date and to be paid out to shareholders subsequent to
year end.
(i)
Broker payable relates to outstanding client accounts and amounts owed by the Group to ASX Clearing. These are settled with the broker receivable
as disclosed in Note 8.
Movement in dividend payable is set out below:
2024
2023
$
$
Opening balance
5,753,047
16,770,251
Amount provided during the year
7,829,082
49,846,206
Amounts paid out
(8,637,451)
(60,863,410)
Balance as at 30 June
4,944,678
5,753,047
Of the total dividends paid during the year, $467,836 was through the dividend reinvestment plan and $11,636 (2023: $35,210) was paid to
the Euroz Share Trust and is undistributed, therefore, it has been eliminated on consolidation.
16.
CURRENT TAX RECEIVABLE / (PAYABLE)
2024
2023
$
$
Opening balance
1,675,992
(8,834,084)
Amount provided during the year
(4,318,555)
(6,549,907)
Prior year adjustments
(252,226)
(40,322)
Amounts received
(2,144,548)
-
Amounts paid out
4,304,884
17,100,305
Balance as at 30 June
(734,453)
1,675,992
CHAIRMAN’S REPORT
OVERVIEW
70
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
17.
PROVISIONS
2024
2023
$
$
Employee benefits (annual leave)
3,311,733
3,372,810
Employee benefits (long service leave)
6,636,015
5,865,272
Total current and non-current
9,947,748
9,238,082
Disclosed as current
9,675,487
9,016,263
Disclosed as non-current liabilities
272,261
221,819
Movements in employee benefits, are set out below:
2024
2023
$
$
Annual leave:
Carrying amount at 1 July
3,372,810
3,636,514
Additional provisions recognised
1,875,878
1,896,513
Leave taken and paid out
(1,936,955)
(2,160,217)
Carrying amount at 30 June
3,311,733
3,372,810
Long service leave:
Carrying amount at 1 July
5,865,272
4,293,291
Additional provisions recognised
1,646,352
1,800,329
Leave taken and paid out
(875,609)
(228,348)
Carrying amount at 30 June
6,636,015
5,865,272
CHAIRMAN’S REPORT
OVERVIEW
71
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
18.
RIGHT OF USE ASSET AND LEASE LIABILITY
2024
2023
$
$
Leased premises
15,434,425
7,716,294
Accumulated amortisation
(719,107)
(4,739,150)
Impairment expense
(1,475,773)
(1,174,911)
13,239,545
1,802,233
Office equipment
126,461
105,056
Accumulated amortisation
(101,857)
(65,220)
24,604
39,836
Right of use asset
13,264,149
1,842,069
Lease liability – current
828,899
1,358,111
Lease liability – non-current
13,118,748
2,194,393
Reconciliation of right of use asset:
Balance as at 1 July
1,842,069
4,244,049
Additions
13,980,057
-
Amortisation expense
(1,082,204)
(1,222,033)
Impairment expense
(1,475,773)
(1,174,911)
Disposal
-
(5,036)
Balance as at 30 June
13,264,149
1,842,069
Euroz Hartleys Group Limited signed a lease agreement in May 2023 for office space at QV1 located at 250 St Georges Terrace, Perth. The
lease is for part of Level 37 and the whole of Level 38 of QV1 for a period of 10 years commencing on 1 July 2024 with two options to renew
for 5 years commencing 1 July 2034 and 1 July 2039. The lease has a rent-free period from January 2024. The lease for 2,505 square
metres is on normal commercial terms with a market rate incentive.
An assessment of the contract determined that it qualifies as a lease, as it grants the right to control the use of a specific asset for a defined
period in exchange for compensation. As a result, the recognition of the right of use asset and lease liability occurred in December 2023
when the office became available for use.
Following the move to QV1, the Group surrendered the leases for the premises at Level 18 Alluvion, 58 Mounts Bay Road, Perth WA and Level
6 Westralia, 141 St Georges Terrace, Perth WA on 31 December 2023 and 31 January 2024 respectively. Accordingly, the respective right-of-
use assets were fully written off and the lease liabilities were also wound down to the extent of the agreed surrender fee which has since been
paid. Details of the movement of the right of use assets and liabilities are below:
Reconciliation of lease liability:
2024
2023
$
$
Balance as at 1 July
3,552,504
4,907,275
Additions
13,980,056
-
Written off
(1,557,618)
-
Disposals
-
(5,036)
Interest expense
55,002
176,722
Interest paid
(55,002)
(176,722)
Lease payments
(2,027,295)
(1,349,735)
Balance as at 30 June
13,947,647
3,552,504
CHAIRMAN’S REPORT
OVERVIEW
72
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
18.
RIGHT OF USE ASSET AND LEASE LIABILITY (cont’d)
The following table sets out a maturity analysis of lease liabilities showing the discounted lease payments to be paid after the reporting date.
2024
2023
$
$
Less than one year
828,899
1,358,091
One to two years
882,544
1,379,300
Two to three years
1,021,096
535,289
Three to four years
1,172,108
279,824
Four to five years
1,335,280
-
More than 5 years
8,707,720
-
13,947,647
3,552,504
The above right of use asset and lease liability relates to:
-
The lease on the premises at QV1 is for part Level 37 and the whole of level 38, 250 St Georges Terrace, Perth WA for a period of 10
years commencing on 1 July 2024 with two options to renew for 5 years commencing 1 July 2034 and 1 July 2039.
-
The lease on the premises at Level 18 Alluvion, 58 Mounts Bay Road, Perth WA was for a period of 15 years commencing 2 July 2010
and expiring on 1 July 2025. This lease was terminated on 31 December 2023.
-
The lease on the premises at Level 6 Westralia, 141 St Georges Terrace, Perth WA was for a period of 8 years commencing 1 January
2019 and expiring on 31 December 2026. This lease was terminated on 31 January 2024.
19.
CONTRIBUTED EQUITY
(a)
Share capital
2024
2023
2024
2023
Shares
Shares
$
$
Ordinary shares
Issued and paid up capital consisting of ordinary
shares (net of treasury shares)
154,302,581
155,112,688
98,595,762
98,562,525
(b)
Movements in ordinary share capital net of treasury shares
2024
2023
Shares
Shares
Balance at the beginning of the reporting period
155,112,688
187,106,282
Issue of new shares
449,843
332,690
Acquisition of treasury shares
(2,527,370)
(1,940,000)
Share cancellation net of treasury shares (i)
-
(31,773,026)
Vested shares under Performance Rights Plan
1,267,420
1,386,742
Balance at the end of the reporting period
154,302,581
155,112,688
CHAIRMAN’S REPORT
OVERVIEW
73
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
19.
CONTRIBUTED EQUITY (cont’d)
(c)
Movements in ordinary share capital
2024
2023
$
$
Balance at the beginning of the reporting period
98,562,525
136,740,320
Shares issued during the period
467,836
369,286
Return of capital (i)
-
(39,998,187)
Treasury shares
(2,064,050)
(2,188,727)
Vested shares under Performance Rights Plan
1,629,451
3,639,833
Balance at the end of the reporting period
98,595,762
98,562,525
(i)
Return of capital / share cancellation relates to the $39,998,000 equal capital reduction and share cancellation paid in December 2022
as part of the Group’s strategic cash and capital management initiative. Total shares cancelled of 33,257,006 included 1,483,980 treasury
shares.
(d)
Treasury shares
2024
2023
2024
2023
Shares
Shares
$
$
Balance at the beginning of the reporting period
(9,260,069)
(10,190,791)
12,724,184
13,916,281
Acquisition of Treasury shares
(2,527,370)
(1,940,000)
2,064,050
2,188,727
Treasury share cancellation (i)
-
1,483,980
-
(1,784,587)
Vested shares under Performance Rights Plan
1,267,420
1,386,742
(981,977)
(1,596,237)
Balance of Treasury shares at the end of the reporting period
(10,520,019)
(9,260,069)
13,806,257
12,724,184
Treasury shares were acquired by the Employee Share Trust at various times during the year for grant to Executives and employees as
part of the Performance Right Plan.
(i)
Share cancellation relates to treasury shares that were cancelled as part of the $39,998,000 equal capital reduction and share cancellation in
December 2022 as part of the Group’s strategic cash and capital management initiative.
(e)
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the
number of and amounts paid on the shares held. Ordinary shares have no par value.
Every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is
entitled to one vote.
(f)
Options
There were no options on issue at 30 June 2024 (30 June 2023: Nil).
(g)
Share-based payments reserve
The reserve records items recognised as expenses on valuation of share-based payments. The movement in the current period
totalling $3,146,486 (2023: $4,117,689) relates to the vesting expense related to the fair value of shares issued under all share-based
payments plans in the prior year and the current year.
CHAIRMAN’S REPORT
OVERVIEW
74
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
19.
CONTRIBUTED EQUITY (cont’d)
(g)
Share-based payments reserve (cont’d)
2024
2023
$
$
Balance on share-based payment reserve at 1 July
9,395,353
8,917,497
Recognised during the year
3,146,486
4,117,689
Vested shares under Performance Rights Plan
(1,629,451)
(3,639,833)
Balance on share-based payments reserve at 30 June
10,912,388
9,395,353
(h)
Capital management
The Directors primary objective is to maintain a capital structure that ensures the lowest cost of capital available to the Group. At
reporting date, the Group has significant cash reserves and no external borrowings. As the holder of various Australian Financial
Services Licences and as a market participant of the Australian Securities Exchange the Group is exposed to externally imposed
capital requirements, which have been complied with throughout the year.
20.
DIVIDENDS
2024
2023
$
$
Relating to ordinary shares
Special dividend 20.27 cents per fully paid ordinary share paid on 7 October 2022
-
39,992,116
Interim dividend for the half year ended 31 December 2023 of 1.75 cents
(2022 – 2.5 cents) per fully paid ordinary share paid on 16 February 2024
fully franked based on tax paid @ 30%
2,872,769
4,065,832
Final dividend declared and provided for at 30 June 2024 of 3.0 cents
(2023 – 3.5 cents) per fully paid ordinary share to be paid on 30 August 2024
fully franked based on tax paid @ 30%
4,944,678
5,753,047
Total dividends provided for or paid
7,817,447
49,810,995
Special dividend to equity holders comprised $39,992,000 fully franked special dividend of $0.2027 per share paid to shareholders in
October 2022 as part of the Group’s strategic cash and capital management initiative.
Of the total dividends paid during the year $11,636 (2023: $35,210) was paid to the Euroz Share Trust and is undistributed. Therefore, it has
been eliminated on consolidation.
Franked dividends
The franked portions of the dividends recommended after 30 June 2024 will be franked out of existing franking credits or out of franking
credits arising from the payment of income tax in the year ended 30 June 2024.
CHAIRMAN’S REPORT
OVERVIEW
75
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
20.
DIVIDENDS (cont’d)
Franked dividends (cont’d)
2024
2023
$
$
Franking credits available for subsequent financial years based on a tax rate of 30%
(2023: 30%)
15,505,213
17,097,912
The dividends are fully-franked and therefore, there are no income tax consequences for the owners of Euroz Hartleys Group Limited.
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
(a)
franking credits that will arise from the payment of the current tax liability;
(b)
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date;
(c)
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date; and
(d)
franking credits that may be prevented from being distributed in subsequent financial years.
The consolidated amounts include franking credits that would be available to the parent entity if distributable profits of controlled entities were
paid as dividends.
21.
FINANCIAL INSTRUMENTS
(a)
Financial risk management
The Group’s financial instruments consist of deposits with banks, trade receivables and payables, short term investments and long-
term investments. Derivative financial instruments are not used by the Group. Senior Executives meet regularly to analyse and monitor
the financial risk associated with the financial instruments used by the Group.
(b)
Financial risk exposure and management
(i)
Interest rate risk
The Group has no borrowings and therefore is not exposed to interest rate risk associated with debt. The Group has significant
cash reserves and the interest income earned from these cash reserves will be affected by movements in the interest rate.
A sensitivity analysis has been provided in the Note 21(b)(vii) to illustrate the effect of interest rate movements on interest
income earned.
(ii)
Liquidity risk
The Group manages liquidity risk using forward cash flow projections, maintaining cash reserves and having no borrowings or
debt.
2024
2023
$
$
Current lease liability
828,899
1,358,111
Non-current lease liability
13,118,748
2,194,393
Total lease liability (Note 18)
13,947,647
3,552,504
CHAIRMAN’S REPORT
OVERVIEW
76
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
21.
FINANCIAL INSTRUMENTS (cont’d)
(b)
Financial risk exposure and management (cont’d)
(ii)
Liquidity risk (cont’d)
Interest on lease liabilities is expected to be paid as follows:
2024
2023
$
$
Less than one year
929,546
126,268
One to two years
871,268
71,435
Two to three years
806,517
29,040
Three to four years
731,889
4,172
Four to five years
646,508
-
More than 5 years
1,519,570
-
5,505,298
230,915
Trade and other payables are expected to be paid as follows:
2024
2023
$
$
Less than 1 month
47,280,481
49,722,513
1 to 3 months
4,944,678
5,753,047
52,225,159
55,475,560
(iii)
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the Group’s receivables from customers and investment securities. For the
Group it arises from receivables from subsidiaries, as well as from customers.
Senior management monitors its exposure to customers on a regular basis to ensure recovery and repayment of outstanding
amounts. Cash deposits are only made with Australian based banks.
The maximum exposure to credit risk, excluding the value of any collateral or security, at reporting date is the carrying amount
of the financial assets disclosed in the statement of financial position. There is no collateral or security held for those assets at
30 June 2024.
The carrying amount of the Group’s cash and cash equivalents, receivables and deposits represents the maximum credit
exposure.
The Group’s maximum exposure to credit risk at the reporting date was:
Note
Carrying Amount
2024
2023
$
$
Cash and cash equivalents
7
92,944,437
88,155,855
Trade and other receivables
8
24,419,704
25,136,908
Financial assets at amortised cost
11
2,438,352
686,296
119,802,493
113,979,059
The Group’s receivables are considered recoverable.
CHAIRMAN’S REPORT
OVERVIEW
77
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
21.
FINANCIAL INSTRUMENTS (cont’d)
(b)
Financial risk exposure and management (cont’d)
(iv)
Financial instruments composition
Weighted Average
Effective Interest Rate
Floating Interest
Rate
Non-Interest
Bearing
2024
2023
2024
2023
2024
2023
%
%
$
$
$
$
FINANCIAL ASSETS
Cash and cash equivalents
3.52
2.38
92,944,437
88,155,855
-
-
Trade and other receivables
-
-
24,419,704
25,136,908
Financial assets held for trading
-
-
11,051,838
16,130,200
Financial assets
5.12
1.64
2,388,352
636,296
50,000
50,000
95,332,789
88,792,151
35,521,542
41,317,108
FINANCIAL LIABILITIES
Trade and other payables
-
-
52,225,159
55,475,560
Lease liability (current and non-current)
0.63
4.25
13,947,647
3,552,504
-
-
13,947,647
3,552,504
52,225,159
55,475,560
(v)
Fair value hierarchy
The following table details the Group’s fair value of financial instruments categorised by the following levels:
Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities.
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as
prices) or indirectly (derived from prices). Techniques, such as estimated discounted cash flows and Black-Scholes model are
used to determine fair value for the financial instruments.
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
CHAIRMAN’S REPORT
OVERVIEW
78
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
21.
FINANCIAL INSTRUMENTS (cont’d)
(b)
Financial risk exposure and management (cont’d)
Carrying amount
Fair value
2024
Designated
at FVTPL
(ii)
Financial assets
/ liabilities at
amortised cost
Total
Level 1
Level 2 Level 3
Total
Note
$
$
$
$
$
$
$
Current financial assets
Cash and cash equivalents (i)
7
-
92,944,437
92,944,437
-
-
-
-
Trade and other receivables (i)
8
-
24,419,704
24,419,704
-
-
-
-
Other financial assets
9
11,051,838
-
11,051,838
2,450,262
8,493,175
108,401
11,051,838
Non - Current financial assets
Financial assets (i)
11
-
2,438,352
2,438,352
-
-
-
-
Investments at fair value
12
1,727,987
-
1,727,987
-
1,727,987
-
1,727,987
Current financial
liabilities
Trade and other payables (i)
15
-
(52,225,159)
(52,225,159)
-
-
-
-
12,779,825
67,577,334
80,357,159
2,450,262
10,221,162
108,401 12,779,825
(i)
Balances are measured at amortised cost. The carrying amount is a reasonable approximation of fair value
(ii) Fair value through profit or loss (FVTPL)
Carrying amount
Fair value
2023
Designated
at FVTPL
(ii)
Financial assets
/ liabilities at
amortised cost
Total
Level 1
Level 2 Level 3
Total
Note
$
$
$
$
$
$
$
Current financial assets
Cash and cash equivalents (i)
7
-
88,155,855
88,155,855
-
-
-
-
Trade and other receivables (i)
8
-
25,136,908
25,136,908
-
-
-
-
Other financial assets
9
16,130,200
-
16,130,200
5,728,629
10,048,436
353,135
16,130,200
Non - Current financial assets
Financial assets (i)
11
-
686,296
686,296
-
-
-
-
Investments at fair value
12
2,084,000
-
2,084,000
-
2,084,000
-
2,084,000
Current financial
liabilities
Trade and other payables (i)
15
-
(55,475,560)
(55,475,560)
-
-
-
-
18,214,200
58,503,499
76,717,699
5,728,629
12,132,436
353,135
18,214,200
(i)
Balances are measured at amortised cost. The carrying amount is a reasonable approximation of fair value
(ii) Fair value through profit or loss (FVTPL)
CHAIRMAN’S REPORT
OVERVIEW
79
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
21.
FINANCIAL INSTRUMENTS (cont’d)
(b)
Financial risk exposure and management (cont’d)
(vi)
Market risk
Market risk is the risk that changes in market prices will affect the fair value the Group’s financial instruments. The Group is subject to market
risk as it invests in financial instruments which are not risk free and are traded in active markets where prices of securities fluctuate.
(vii)
Sensitivity analysis
Assuming all variables remain constant and the interest rate fluctuated by 1% at year-end the effect on the Group’s equity and profit
after tax as follows:
Cash and cash equivalents and Interest-bearing financial assets
2024
2023
$
$
Increase by 1%
667,330
621,545
Decrease by 1%
(667,330)
(621,545)
Assuming all variables remain constant and the equity market fluctuated by 5% at year-end the effect on the Group’s equity and profit
after tax is as follows:
Financial assets at fair value through profit and loss
2024
2023
$
$
Increase by 5%
386,814
564,557
Decrease by 5%
(386,814)
(564,557)
(c)
Bank Guarantees
2024
2023
$
$
Secured guarantees in respect of leases of a controlled group entity:
Westpac Banking Corporation
3,185,168
796,816
Bankwest
-
636,295
3,185,168
1,433,111
22.
REMUNERATION OF AUDITORS
2024
2023
$
$
Audit and assurance services
Audit and review of financial reports for the Group
346,100
318,750
Regulatory assurance services
45,150
43,000
Controls assurance services
-
10,750
Total paid to KPMG
391,250
372,500
Regulatory assurance services
Regulatory assurance services are those that are required under legislation and are performed by the auditor including Form FS 71 as an
AFSL licensee.
CHAIRMAN’S REPORT
OVERVIEW
80
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
23.
CONTINGENT LIABILITIES
Potential for regulatory exposures
The Group operates in the highly regulated Australian financial services market. It is common for the Group to engage with its regulators in
relation to regulatory investigations, surveillance and reviews, reportable situations, formal and informal enquiries and regulatory supervisory
activities. The Group has received various notices and requests for information from its regulators as part of both industry wide and Group
specific reviews. The nature of these interactions can be wide ranging. The outcomes and total costs associated with such activity, if any, are
inherently difficult to estimate and as a result any possible exposures remain uncertain. At this time, the Group considers the likelihood of
material financial exposures arising from this activity to be uncertain (2023: Nil).
Potential for customer exposures
From time to time the Group will receive claims for compensation from customers. These will usually relate to a complaint that has been made to
the Australian Financial Complaints Authority. The outcomes and total costs associated with such activity, if any, are inherently difficult to estimate
and, as a result, any possible exposures remain uncertain. At this time, the Group considers the likelihood of material financial exposures arising
from this activity to be remote in circumstances where the Group has appropriate professional indemnity insurance arrangements in place
regarding this activity (2023: Nil).
24.
COMMITMENTS FOR EXPENDITURE
2024
2023
$
$
Clearing and settlement services
Within one year
319,725
767,340
Later than one year but not later than five years
-
319,725
Later than five years
-
-
Office equipment (i)
Within one year
-
288,628
Later than one year but not later than five years
-
-
Later than five years
-
-
Commitments not recognised in the financial statements
319,725
1,375,693
(i)
Capital commitments related to information technology infrastructure for QV1.
Euroz Hartleys Group Limited signed a lease agreement in May 2023 for office space at QV1 Perth located at 250 St Georges Terrace, Perth.
The lease is for part Level 37 and the whole Level 38 of QV1 for a period of 10 years commencing on 1 July 2024 with two options to renew for 5
years commencing 1 July 2034 and 1 July 2039. The lease for 2,505 square metres is on normal commercial terms with a market rate incentive.
The lease on the premises at Level 18 Alluvion, 58 Mounts Bay Road, Perth WA was for a period of 15 years commencing 2 July 2010 and
was due to expire on 1 July 2025. This lease was terminated on 31 December 2023.
The lease on the premises at Level 6 Westralia, 141 St Georges Terrace, Perth WA was for a period of 8 years commencing 1 January 2019
and was due expire on 31 December 2026. This lease was terminated on 31 January 2024.
These lease commitments have been included as part of lease liabilities. Refer to Note 18.
25.
RELATED PARTIES
(a)
Key Management Personnel compensation
2024
2023
$
$
Short-term employee benefits
7,141,280
3,986,986
Post-employment benefits
258,873
183,138
Share-based payments – Performance Rights Plan
780,813
973,572
Share-based payments – Long Term Incentive
140,208
139,271
Total compensation
8,321,174
5,282,967
CHAIRMAN’S REPORT
OVERVIEW
81
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
25.
RELATED PARTIES (cont’d)
(b)
Individual Key Management Personnel (KMP) compensation disclosure
Information regarding individual KMP compensation and some equity instruments disclosures as required by Corporations Regulation
is provided in the remuneration report section of the Directors’ Report.
Apart from the details disclosed in this note, no KMP has entered into a material contract with the Group since the end of the previous
financial year and there were no material contracts involving KMP interest existing at year end.
(c)
Parent entity
The ultimate parent entity within the Group is Euroz Hartleys Group Limited.
(d)
Share-based payments
Share-based payments were issued to Eligible Employees in line with terms and conditions as described in the remuneration report
“Equity based payments” section and note 1(m)(v).
At 30 June 2024, the Group had the following outstanding share-based payment arrangements (post-capital reduction in December 2022):
Grant date / KMP entitled
Number of
shares
Fair value on
grant date*
Vesting conditions**
Shares granted to KMP:
30 June 2021***
428,018
$1.595
3-year service condition
30 June 2022
275,668
$1.689
3-year service condition
30 June 2023
893,458
$1.175
3-year service condition
30 June 2024
712,573
$0.835
3-year service condition
Total
2,309,717
*
Fair value on grant date represents the grant price being the 30-day VWAP in accordance with the PRP
**
After the 3-year service condition has been met the plan shares are escrowed for a further period according to the plan as
described in the remuneration report “Equity based payments” section and note 1(m)(v)
***
Held in escrow
Forfeited and vested shares during the year are detailed below:
2024
2023
Number of shares
Weighted
average exercise
price
Number of
shares
Weighted
average
exercise price
Forfeited during the year
-
nil
-
nil
Vested during the year
611,130
nil
-
nil
(e)
Group transactions
Wholly-owned group
The wholly-owned group consists of Euroz Hartleys Group Limited and its wholly-owned controlled entities as detailed in the
Consolidated Entity Disclosure Statement.
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other
parties unless otherwise stated. There were no related party transactions during the year (2023: nil).
Ownership interests in related parties
Interests held in controlled entities are set out in Consolidated Entity Disclosure Statement.
CHAIRMAN’S REPORT
OVERVIEW
82
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
25.
RELATED PARTIES (cont’d)
(e)
Group transactions (cont’d)
Other transactions with Directors and specified Executives
During the year ended 30 June 2024 the Directors and KMP transacted share business through Euroz Hartleys Limited on normal
terms and conditions.
Aggregate amounts of the above transactions with Directors and KMP of the Group:
2024
2023
$
$
Amounts recognised as revenue
Brokerage earned on Key Management Personnel accounts
38,826
45,511
26.
EVENTS SUBSEQUENT TO REPORTING DATE
The Directors are not aware of any matter or circumstance subsequent to 30 June 2024 that has significantly affected, or may significantly affect:
(a)
the Group’s operations in future financial years; or
(b)
the results of those operations in future financial years; or
(c)
the Group’s state of affairs in future financial years.
27.
RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
2024
2023
$
$
Profit for the year
5,468,062
9,338,637
Adjustments for:
Depreciation and amortisation
2,695,025
2,552,380
Impairment expense and (liability write-off)
(81,845)
1,489,556
Share-based payments
3,146,486
4,117,689
Loss / (gain) on investments
426,013
(84,000)
Write-off / loss on disposal of plant and equipment
98,887
2,050
Interest paid on lease liabilities
55,002
176,722
Interest on security deposit
(23,832)
(10,361)
Reinvested distributions received from investing activity investments
(70,000)
-
Changes in assets and liabilities:
Decrease / (increase) in trade and other receivables
717,204
(7,065,694)
Decrease / (increase) in other financial assets at fair value through profit or loss
5,078,362
(813,136)
Decrease / (increase) in other current assets
1,710,206
(1,725,616)
Decrease / (increase) in current tax receivables
1,675,992
(1,675,992)
Increase in deferred tax assets
(334,261)
(1,274,262)
(Decrease) / increase in trade and other payables (excluding dividends)
(2,442,034)
6,955,740
Increase / (decrease) in current tax liabilities
734,453
(8,834,084)
Decrease in deferred tax liabilities
(560,973)
(863,304)
Increase in provisions
709,666
1,308,277
Net cash from operating activities
19,002,413
3,594,602
CHAIRMAN’S REPORT
OVERVIEW
83
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
28.
EARNINGS PER SHARE
2024
2023
Cents
Cents
Earnings per share attributable to the owners of Euroz Hartleys Group Limited
Basic earnings per share (cents)
3.50
5.51
Diluted earnings per share (cents)
3.33
5.25
2024
2023
Number
Number
Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in calculating basic
earnings per share
156,084,214
169,367,175
Weighted average number of ordinary shares and potential ordinary shares (including
treasury shares) used as the denominator in calculating diluted earnings per share
164,372,757
177,866,437
The profit after tax figure used to calculate the earnings per share for both the basic and diluted calculations was the same as the profit after
tax figure from Consolidated Statement of Profit or Loss and Other Comprehensive Income.
29.
PARENT ENTITY DISCLOSURES
2024
2023
$
$
Financial position
Assets
Current assets
28,042,452
28,563,579
Non-current assets
107,198,886
91,598,117
Total assets
135,241,338
120,161,696
Liabilities
Current liabilities
6,877,415
6,046,902
Non-current liabilities
14,779,280
2,011,970
Total liabilities
21,656,695
8,058,872
Equity
Issued capital
98,454,657
98,577,622
Retained earnings
4,322,629
4,211,973
Reserves
Share-based payment reserve
10,807,357
9,313,229
Total equity
113,584,643
112,102,824
Financial performance
Profit for the year
7,939,739
8,973,537
Total comprehensive income
7,939,739
8,973,537
CHAIRMAN’S REPORT
OVERVIEW
84
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
29.
PARENT ENTITY DISCLOSURES (cont’d)
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2024 and 30 June 2023.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 1, except for the following:
•
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
•
Dividends received from subsidiaries are recognised as other income by the parent entity.
30.
INVESTMENTS IN CONTROLLED ENTITIES
Name of entity
Entity Type
Country of
incorporation
and tax
residence
Class of
shares
Equity
holding
2024 %
Equity
holding
2023 %
Euroz Hartleys Limited
Australian Proprietary
Company, Limited by Shares
Australia
Ordinary
100
100
Westoz Funds Management Pty Ltd
Australian Proprietary
Company, Limited by Shares
Australia
Ordinary
100
100
Zenix Nominees Pty Ltd (i)
Australian Proprietary
Company, Limited by Shares
Australia
Ordinary
100
100
Zero Nominees Pty Ltd (i)
Australian Proprietary
Company, Limited by Shares
Australia
Ordinary
100
100
Invesco Nominee Pty Ltd (i)
Australian Proprietary
Company, Limited by Shares
Australia
Ordinary
100
100
Saltbush Nominee Pty Ltd (i)
Australian Proprietary
Company, Limited by Shares
Australia
Ordinary
100
100
Euroz Employee Share Trust
Trust
Australia
Ordinary
-
-
Detail Nominees Pty Ltd (i) *
Australian Proprietary
Company, Limited by Shares
Australia
Ordinary
100
100
Entrust Wealth Management Pty Ltd *
Australian Proprietary
Company, Limited by Shares
Australia
Ordinary
100
100
Westoz Investment Company Pty Ltd *
Australian Proprietary
Company, Limited by Shares
Australia
Ordinary
100
100
Ozgrowth Pty Ltd *
Australian Proprietary
Company, Limited by Shares
Australia
Ordinary
100
100
WIM Small Cap Limited **
Australian Proprietary
Company, Limited by Shares
Australia
Ordinary
-
100
Euroz Hartleys Securities Pty Ltd **
Australian Proprietary
Company, Limited by Shares
Australia
Ordinary
-
100
Prodigy Investment Partners Pty Ltd **
Australian Proprietary
Company, Limited by Shares
Australia
Ordinary
-
100
Poynton Pty Ltd (i) **
Australian Proprietary
Company, Limited by Shares
Australia
Ordinary
-
100
Poynton Investments Pty Ltd (i) **
Australian Proprietary
Company, Limited by Shares
Australia
Ordinary
-
100
Poynton Corporate Pty Ltd (i) **
Australian Proprietary
Company, Limited by Shares
Australia
Ordinary
-
100
Poynton Nominees Pty Ltd (i) **
Australian Proprietary
Company, Limited by Shares
Australia
Ordinary
-
100
The ultimate parent entity in the Group is Euroz Hartleys Group Limited.
(i)
Owned by Euroz Hartleys Limited
*
Dormant company
**
Entity was dormant and deregistered during the year
CHAIRMAN’S REPORT
OVERVIEW
85
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Notes to the Consolidated Financial Statements (cont’d)
FOR THE YEAR ENDED 30 JUNE 2024
30.
INVESTMENTS IN CONTROLLED ENTITIES (cont’d)
A brief description of each entity is as follows:
(a)
Euroz Hartleys Group Limited – Group holding entity listed on the Australian Securities Exchange. Euroz Hartleys Group Limited
manages cash and investments.
(b)
Euroz Hartleys Limited – Financial services entity providing stockbroking services with a focus on Western Australian companies. This
is the merged entity containing the businesses of Euroz Hartleys, Euroz Hartleys Securities Limited and Entrust Wealth Management
Pty Ltd from 26 April 2021.
(c)
Westoz Funds Management Pty Ltd – Provides management services for investment funds.
(d)
Zenix Nominees Pty Ltd - Company holding shares and options for Euroz Hartleys Limited.
(e)
Zero Nominees Pty Ltd – Custodian Company holding shares on behalf of clients of Euroz Hartleys Limited.
(f)
Invesco Nominee Pty Ltd – This entity is an Entrepot Nominee Company used for CHESS settlement and clearing purposes only.
(g)
Saltbush Nominees Pty Ltd – Custodian Company holding shares on behalf of clients of Euroz Hartleys Limited and to facilitate the
settlement of share placement and underwriting transactions.
(h)
Euroz Employee Share Trust – Vehicle established to acquire treasury shares on-market for distribution to eligible employees in
connection with the Performance Rights Plan.
(i)
Detail Nominees – Dormant Company that was previously used to for settlement obligation in relation to shares for the Group.
(j)
Entrust Wealth Management Pty Ltd – Wealth management business providing advice in relation to wealth management and strategic
financial planning support for the entire Euroz Group. This business is inactive effective 26 April 2021 following the restructure of the
Group.
(k)
Westoz Investment Company Pty Ltd – Dormant Company that has not yet undertaken any business activities.
(l)
Ozgrowth Pty Ltd – Dormant Company that has not yet undertaken any business activities.
31.
COMPANY DETAILS
The registered office and principal place of business address of the Company is:
Euroz Hartleys Group Limited
Level 37, QV1
250 St Georges Terrace
PERTH WA 6000
CHAIRMAN’S REPORT
OVERVIEW
86
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Consolidated Entity Disclosure Statement
AS AT 30 JUNE 2024
Name of entity
Entity Type
Country of
incorporation and tax
residence
Class of
shares
Equity
holding %
Euroz Hartleys Limited
Australian Proprietary Company,
Limited by Shares
Australia
Ordinary
100
Westoz Funds Management Pty Ltd
Australian Proprietary Company,
Limited by Shares
Australia
Ordinary
100
Zenix Nominees Pty Ltd (i)
Australian Proprietary Company,
Limited by Shares
Australia
Ordinary
100
Zero Nominees Pty Ltd (i)
Australian Proprietary Company,
Limited by Shares
Australia
Ordinary
100
Invesco Nominee Pty Ltd (i)
Australian Proprietary Company,
Limited by Shares
Australia
Ordinary
100
Saltbush Nominee Pty Ltd (i)
Australian Proprietary Company,
Limited by Shares
Australia
Ordinary
100
Euroz Employee Share Trust
Trust
Australia
Ordinary
-
Detail Nominees Pty Ltd (i) *
Australian Proprietary Company,
Limited by Shares
Australia
Ordinary
100
Entrust Wealth Management Pty Ltd *
Australian Proprietary Company,
Limited by Shares
Australia
Ordinary
100
Westoz Investment Company Pty Ltd *
Australian Proprietary Company,
Limited by Shares
Australia
Ordinary
100
Ozgrowth Pty Ltd *
Australian Proprietary Company,
Limited by Shares
Australia
Ordinary
100
The ultimate parent entity in the Group is Euroz Hartleys Group Limited.
(i)
Owned by Euroz Hartleys Limited
*
Dormant company
Key assumptions and judgements - Determination of Tax Residency
Section 295 (3A) of the Corporation Acts 2001 requires that the tax residency of each entity which is included in the Consolidated Entity Disclosure
Statement (CEDS) be disclosed. In the context of an entity which was an Australian resident, “Australian resident” has the meaning provided in
the Income Tax Assessment Act 1997. The determination of tax residency involves judgment as the determination of tax residency is highly fact
dependent and there are currently several different interpretations that could be adopted, and which could give rise to a different conclusion
on residency. In determining tax residency, the Group has applied the current legislation and judicial precedent, including having regard to the
Commissioner of Taxation’s public guidance in Tax Ruling TR 2018/5.
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OVERVIEW
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EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Directors’ Declaration
FOR THE YEAR ENDED 30 JUNE 2024
The Directors declare that:
1.
The financial statements, notes and additional disclosures included in the Directors’ Report and designated as audited, are in accordance
with the Corporations Act 2001 and:
(a)
comply with Accounting Standards and Corporations Regulations 2001;
(b)
give a true and fair view of the Company’s and consolidated group’s financial position as at 30 June 2024 and of their performance for
the year ended on that date;
(c)
the consolidated entity disclosure statement as at 30 June 2024 is true and correct; and
(d)
the financial statements are in compliance with International Financial Reporting Standards, as stated in note 1 to the financial
statements.
2.
The Executive Chairman and Chief Financial and Operating Officer have declared in accordance with section 295A of the Corporations Act
2001 that:
(a)
the financial records of the Group for the financial year have been properly maintained in accordance with section 286 of the
Corporations Act 2001;
(b)
the financial statements and notes for the financial year comply with Accounting Standards; and
(c)
the financial statements and notes for the financial year give a true and fair view.
3.
In the Directors’ opinion there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due
and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Andrew McKenzie
Richard Simpson
Executive Chairman
Executive Director
Date: 21 August 2024
CHAIRMAN’S REPORT
OVERVIEW
88
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Independent Auditor’s Report
To The Members of Euroz Hartleys Group Limited
FOR THE YEAR ENDED 30 JUNE 2024
Independent Auditor’s Report
To the shareholders of Euroz Hartleys Group Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
Euroz Hartleys Group Limited (the Company).
In our opinion, the accompanying Financial
Report of the Company 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
ended on that date; and
• complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
The Financial Report comprises:
• Consolidated Statement of financial position as
at 30 June 2024;
• Consolidated Statement of profit or loss and
other comprehensive income, Consolidated
Statement of changes in equity, and
Consolidated Statement of cash flows for the
year then ended on that date;
• Consolidated entity disclosure statement and
accompanying basis of preparation as at 30 June
2024;
• Note 1 to 31 comprising material accounting
policies and other explanatory information; and
• Directors’ Declaration.
The Group consists of the Company and the
entities it controlled at the year-end or from time to
time during the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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 Corporations Act 2001 and the ethical
requirements of the Accounting Professional and 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 fulfilled our other ethical responsibilities in
accordance with these requirements.
Key Audit Matters
The Key Audit Matter we identified is valuation of goodwill and indefinite life intangible assets.
Key Audit Matters are those matters that, in our professional judgement, were of most significance in
our audit of the Financial Report of the current period.
This matter was 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 this matter.
CHAIRMAN’S REPORT
OVERVIEW
89
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Valuation of Goodwill and Indefinite Life Intangible Assets ($38.1m)
Refer to Note 2 and 14 to the group financial report
The key audit matter
How the matter was addressed in our audit
A key audit matter for us was the Group’s
annual impairment testing of indefinite life
intangible assets and goodwill.
The Group has prepared value in use cash
flow models for its Private Wealth and
Wholesale business cash generating units
(CGU), where portions of goodwill and
indefinite life intangible assets (collectively
referred to as “Intangibles”) have been
allocated.
We focused on the significant forward-looking
assumptions the Group applied in their value
in use models, including:
•
Forecast cash flows – which were based
on historical averages
•
Forecast growth rates and terminal value
•
Discount rates - these are complicated in
nature and vary according to the
conditions and environment the specific
CGU is subject to from time to time.
The models and the forward-looking
assumptions tend to be prone to greater risk
for potential bias, error and inconsistent
application. These conditions necessitate
additional scrutiny by us, in particular to
address the objectivity of sources used for
assumptions, and their consistent application.
We involved valuation specialists to
supplement our senior audit team members
in assessing this key audit matter.
Working with our valuation specialists, our
procedures included the following:
•
We considered the appropriateness of the value
in use models applied by the Group to perform
the annual test for impairment against the
requirements of the accounting standards.
•
We assessed the integrity of the value in use
models used, including the accuracy of the
underlying formulas.
•
We compared forecast cash flows contained in
the value in use models to Board approved
forecasts.
•
We assessed the accuracy of previous Group
forecasts to inform our evaluation of forecasts
incorporated in the models.
•
We challenged the Group’s forecast cashflows,
growth rate assumptions and terminal value
multiples considering competitive market
conditions and the continuing volatility in the
global investment market.
•
We used our knowledge of the Group’s past and
recent performance, business and customers,
and our industry experience.
•
Working with our valuation specialists, we
independently developed a discount rate range
considered comparable using publicly available
market data for comparable entities, adjusted by
risk factors specific to the Group and its CGUs
and the industry it operates in.
•
We considered the sensitivity of the models by
varying key assumptions, such as forecast cash
flows, growth rates and discount rates, within a
reasonably possible range. We did this to
identify those CGUs at higher risk of impairment
and to focus our further procedures.
•
We assessed the disclosures in the Financial
Report using our understanding obtained from
our testing and against the requirements of the
accounting standards.
Other Information
Other Information is financial and non-financial information in Euroz Hartleys Group Limited’s annual
report which is provided in addition to the Financial Report and the Auditor’s Report. The Directors
are responsible for the Other Information.
The Other Information we obtained prior to the date of this Auditor’s Report was the Directors’
Report and Remuneration Report.
The Executive Chairman's Report, Euroz Hartleys Group Limited Directors' profiles, Euroz Hartleys
Limited Directors & Officers' profiles, Euroz Hartleys Group Structure, Corporate Transactions,
Independent Auditor’s Report
To The Members of Euroz Hartleys Group Limited (cont'd)
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
90
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Managing Director's Report and Euroz Hartleys Foundation Report are expected to be made available
to us after the date of the Auditor's Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other
Information. In doing so, we 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.
We are required to report if we conclude that there is a material misstatement of this Other
Information, and based on the work we have performed on the Other Information that we obtained
prior to the date of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing 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 Company, and
in compliance with Australian Accounting Standards and the Corporations Regulations 2001.
• implementing necessary internal control to enable the preparation of a 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 Company, and that is free from material
misstatement, whether due to fraud or error.
• assessing the Group and Company’s ability to continue as a going concern and whether the
use of the going concern basis of accounting is appropriate. This includes disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting
unless they either intend to liquidate the Group and Company or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
• 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 Australian Auditing Standards will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They 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 the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf – This description forms part of our
Auditor’s Report.
Independent Auditor’s Report
To The Members of Euroz Hartleys Group Limited (cont'd)
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
91
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Report on the Remuneration Report
Opinion
In our opinion, the Remuneration Report of
Euroz Hartleys Group Limited for the year
ended 30 June 2024, complies with Section
300A of the Corporations Act 2001.
Directors’ 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 responsibilities
We have audited the Remuneration Report included
in pages 17 to 26 of the Directors’ report for the
year ended 30 June 2024.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards.
KPMG
Trevor Hart
Partner
Perth
21 August 2024
Independent Auditor’s Report
To The Members of Euroz Hartleys Group Limited (cont'd)
FOR THE YEAR ENDED 30 JUNE 2024
CHAIRMAN’S REPORT
OVERVIEW
92
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
ASX Additional Information
AS AT 21 AUGUST 2024
A)
Distribution of shareholders
Analysis of number of shareholders by size of holding
Range
Holders
Units
% Unit
1 - 1,000
503
211,019
0.13
1,001 - 5,000
590
1,687,235
1.02
5,001 - 10,000
313
2,373,508
1.44
10,001 - 100,000
746
25,705,060
15.60
100,001 Over
227
134,845,778
81.81
Total
2,379
164,822,600
100.00
Number of holders holding less than a marketable parcel: 581 at $0.86 per unit.
B)
Top holders
The twenty largest holders of ordinary fully paid shares are listed below.
Ordinary Shares
Rank Name
Units
%
1
CITICORP NOMINEES PTY LIMITED
7,057,525
4.28
2
ICE COLD INVESTMENTS PTY LTD
6,600,000
4.00
3
MR JAY EVAN DALE HUGHES
6,550,000
3.97
4
MR ANDREW MCKENZIE + MRS CATHERINE MCKENZIE
5,051,837
3.07
5
MRS CATHERINE PATRICIA MCKENZIE
4,947,005
3.00
6
MR SIMON DAVID YEO + MRS JENNIFER DALE YEO
3,791,463
2.30
7
ICE COLD INVESTMENTS PTY LTD
3,450,000
2.09
8
UBS NOMINEES PTY LTD
3,334,064
2.02
9
MR JAY HUGHES + MRS LINDA HUGHES
2,800,000
1.70
10
ZTHREE PTY LTD
2,400,000
1.46
11
ICE COLD INVESTMENTS PTY LTD
2,200,000
1.33
12
MR GREGORY CHESSELL + MRS MELANIE CHESSELL
2,106,885
1.28
13
BLACK MAGIC ENTERPRISES PTY LTD
2,000,000
1.21
14
LEXTON HOLDINGS PTY LTD
1,883,875
1.14
15
MRS MELANIE JANE CHESSELL
1,721,285
1.04
16
SOUTHERN MOTORS PTY LTD
1,621,288
0.98
17
INKESE PTY LTD
1,500,000
0.91
18
MR IAN MICHAEL PATERSON PARKER + MRS CATRIONA SYLVIA PARKER
1,472,703
0.89
19
GZ FAMILY HOLDINGS PTY LTD
1,443,143
0.88
20
MR DAVID STEWART FIELD
1,420,320
0.86
Total
63,351,393
38.44
Remainder
101,471,207
61.56
Grand Total
164,822,600
100
CHAIRMAN’S REPORT
OVERVIEW
93
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
C)
Shareholders with greater than 5%
As at 21 August 2024, the Company had 3 shareholders with greater than 5% of the issued ordinary share capital:
SHAREHOLDER
UNITS
%
Andrew William McKenzie
12,797,209
7.76%
Ice Cold Investments Pty Ltd
12,188,362
7.39%
Jay Evan Dale Hughes
12,021,929
7.29%
D)
On-market buy-back
The Company has a current on-market buy-back.
E)
Voting Rights
The voting rights for each class of security on issue as at 21 August 2024 are:
Ordinary fully paid shares
Each ordinary shareholder is entitled to one vote for each ordinary fully paid share held.
F)
Workplace gender equality report
The Company’s Workplace Gender Equality Agency report for Financial Year 2024 is available on its website.
ASX Additional Information (cont’d)
AS AT 21 AUGUST 2024
CHAIRMAN’S REPORT
OVERVIEW
94
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Euroz Hartleys Group contact details
FOR THE YEAR ENDED 30 JUNE 2024
EUROZ HARTLEYS LIMITED
ENTRUST WEALTH MANAGEMENT
Level 37 QV1
250 St Georges Terrace
PERTH WA 6000
Level 37 QV1
250 St Georges Terrace
PERTH WA 6000
PO Box Z5036
St Georges Terrace
PERTH WA 6831
GPO Box 2777
PERTH WA 6001
PO Box Z5034
PERTH WA 6831
T: +61 8 9476 3900
F: +61 8 9321 6333
info@entrustwealth.com.au
T: +61 8 9268 2888
F: +61 8 9488 1477
info@eurozhartleys.com.au
Euroz Hartleys Limited
Participant of the ASX, Cboe
and NSX
Authorised to provide financial
services
ABN 33 104 195 057
AFSL 230052
eurozhartleys.com
Entrust Wealth Management
A Division of Euroz Hartleys
Limited
ABN 33 104 195 057
Authorised to provide financial
services
AFSL 230052
entrustwealth.com.au
CHAIRMAN’S REPORT
OVERVIEW
95
EUROZ HARTLEYS GROUP • ANNUAL REPORT 2024
FINANCIAL REPORT
NOTES TO FINANCIAL STATEMENT
Level 37 QV1
250 St Georges Terrace
Perth WA 6000
PO Box Z5036
St Georges Terrace
Perth WA 6831
T: +61 8 9268 2888
F: +61 8 9488 1477
Euroz Hartleys Group Limited
ACN 000 364 465
www.eurozhartleys.com