Gowing Bros. Limited Annual Report 2023

← All annual reports

FY2023 Annual Report · Gowing Bros. Limited

Loading PDF…

N
O
R
T
H

Gowings Annual 155th Report 31 July 2023

155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTURECorporate Directory

Directors

Associate Directors

Secretary

Stock Exchange Listing

Registered Office

Share Registry Office

Auditors

ABN

ACN

Mr. John Gowing (Executive Chairman)
Mr. Sean Clancy (Non-executive Director)
Mr. John Parker (Non-executive Director)
Mr. James Davis (Non-executive Director)
Mr. James Gowing (Director Finance)

Mr. Ellis Gowing

Mr. Ian Morgan

The Australian Securities Exchange
Ticker Code: GOW

The Gowings Building 303 / 35-61 Harbour Drive
Coffs Harbour, NSW, 2450 Australia T +61 2 9264 6321
Email: info@gowings.com

Computershare Investor Services Pty Limited
Level 3, 60 Carrington Street
Sydney NSW 2000
Phone: 1300 855 080
Fax: 61 2 8234 5050

William Buck
Level 29, 66 Goulburn Street
Sydney NSW 2000
Phone: 61 2 8263 4000

68 000 010 471

000 010 471

Executive Chairman’s Review of Operations Gowings at a Glance (at Directors’ Valuation) Remuneration Report Key metrics Sustainability Programme Financial Report Financial review Strategic Investments ASX Listing Requirements Profit and Loss Statement Directors’ Report 0214062504180726052208ContentsGOWINGS GOES NORTHGowings is a fair dinkum, fair dealing family Company that cares, that is run by "Real People" (not an anonymous corporation). Gowings identifies as Pioneering alongside our fellow countrymen, our diggers and the Aussie battler. Our objective is to connect Gowings to Australia and the world through history, sharing our pioneering spirit, Australian culture, real achievements and positive identity.Gowings is honest, hardworking, and traditional, our philosophy, goals and purpose —acknowledges that we are all connected and should care for one-another.The ocean is a real demonstration of our commitment to our environment through Gowings Whale Trusts’ 1% for The Oceans pledge.We are committed to rural Australia, Gowings moved to the magnificent mid-North Coast of NSW. ‘Go North ‘leaving Sydney after 152 years to Coffs Harbour, was about us walking the talk, investing in Australia— recording where we have been, to chart the course of where we want to go, 'Go North', is the modern 'Gone To Gowings' re-envisaged.From history to the events of today, and our portfolio of investments. Building on our pillars of “community, innovation and environment," our objective is to celebrate our indomitable pioneering spirit, generate awareness of the Gowings brand, and continue to bring focus to Australian and global investment opportunities.

EXECUTIVE CHAIRMAN’S REVIEW OF OPERATIONS

On the ground, we have continued to see
a rebound in foot traffic and trading in
our Shopping Centres, comparable to
pre-pandemic levels. We have seen some
quite strong leasing interest and have opened
several new shops with more in the pipeline.
We recently opened a shared workspace on
level one in Coffs Harbour, “G Sphere”, and
a new Ocean Headquarters on the ground
floor of Coffs Harbour to showcase our ocean
lifestyle brands, FCS, Alvey, Gorilla and more,
is nearing completion.

Most of our retail leases have a percentage
of turnover provision or an annual CPI uplift
which over the medium term protects the
underlying value of our shopping centres
during the ‘new normal’ period of inflation.
Shopping Centres are a hedge against
inflation.

GOWINGS SURF HARDWARE
INTERNATIONAL

Our wholly owned subsidiary GSHI had a
disappointing year. On a positive note, during
the period GSHI relocated its head office
from Mona Vale to join with Gowings in Coffs
Harbour. There will be an ongoing net saving
in fixed costs of approximately $2m per
annum, as a result of the move.

SAWTELL COMMONS

Stage 3 at Sawtell Commons is now complete,
there have been 31 blocks of land sold and
contracts exchanged. The market in Coffs
Harbour for residential land continues to be
quite strong. Construction has commenced
on The Coffs Harbour Bypass, which is a
positive catalyst for economic activity and
skilled employment in the area.

TWELVE INTEREST RATE
RISES, THINGS STILL LOOKING
POSITIVE “Up North”.

It is with great sadness that I reflect on the
untimely passing of our Chairman, Professor
Jonathan West. He was a great Australian.
Our thoughts are with his family.

Reviewing the results of our 155th year of
trading, the key and overwhelming impact
on this year’s results has been the 12 interest
rate increases imposed by The Reserve
Bank of Australia, and associated monetary
policy tightening by most of the world’s
central banks which has had a significant
impact on global consumer sentiment. This
has caused a significant reduction in sales
and profitability at Gowings Surf Hardware
International.

As a result of the interest rate increases
the Group’s interest expense has increased
by $3m, this is offset by approximately
$0.7m gain in our interest rate hedge and
approximately $1m in extra rent from
our shopping centres. Overwhelming the
operating results, have been the impact of
the downwards revaluation of the Shopping
Centre Portfolio by $13.3m.

DIVIDENDS

SUSTAINABILITY PROGRAMME

The Group has generated strong investment
cash-flows and will be declaring a final
3c fully franked dividend. The dividend
reinvestment plan has been suspended for
the dividend declared on the 29 September
2023.

The Company believes in maintaining a
prudent approach to dividends given the
capital requirements of the Company across
various developments and investment
opportunities either underway or under
consideration.

OUTLOOK

The outlook continues to feature uncertainty.
We are fortunately in a relatively good
space “Up North”, on the Mid North Coast of
NSW, which has and continues to be a net
beneficiary of the times.

Thank you to all our team members and
the wider Gowings community for their
continuing support.

Gowings continues to investigate and implement sustainability initiatives across all
areas of our business operations. Our fundamental aim is to have the smallest impact
possible on the environment. Initiatives either commenced, under investigation or
completed include:

• Kempsey Central rooftop solar system.

Completed.

• Coffs Central rooftop solar.

Underway, Council
approval received.

• Coffs Central green waste composting system.

Completed.

• Port Central green waste composting system.

Completed.

• EV Charging Stations.

Installed.

• Comprehensive independent review of Gowings
Mid North Coast operations with the goal of
installing substantial solar and renewable energy
micro grid.

Coffs Central Solar
Development Application
submitted, with other
measures to be reviewed.

• Preliminary investigation for feasibility of

installing a community geothermal system at
Sawtell Commons which could provide up to 20%
continuing energy savings annually for residents.

Ongoing engagement with
CHCC

•

Independent report on best sustainable practices
for packaging & product development at Gowings
SHI has been received.

Shift to recycle/able
packaging underway.

• Carbon capture project at Logie Farm

Underway

J. E. Gowing
Executive Chairman

155th ANNUAL REPORT 2023 I Year ended 31 July 2023GOWING BROS. LIMITED155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREExecutive Chairman’s Review of Operations

Executive Chairman’s Review of Operations

On behalf of the Board of Directors, I am pleased to comment on the results for the year ended 31 July 2023.

The Company declared a total dividend of 6.0c in fully franked dividends for the 2023 year. The directors have suspended the dividend
reinvestment plan for the final dividend declared to be paid on 27 October 2023.

FINANCIAL REVIEW

Net Assets per Share

Dividends Declared per Share

$4.03

$3.83

$3.89

$3.86

$3.64

$4.10

$4.00

$3.90

$3.80

$3.70

$3.60

$3.50

$3.40

$0.10

$0.12

$0.10

$0.08

$0.06

$0.04

$0.02

$0.00

$0.08

$0.06

2019

2020

2021

2022

2023

2019

2020

2021

2022

2023

Net assets per share before tax on unrealised gains on equity, investment properties and private equities decreased to $3.86 as at 31 July
2023. Total shareholder return was (2.5%) as a result of the decrease in net assets per share and the 7.0c paid to Shareholders during the year.

The Company has maintained a prudent approach to dividends given the capital requirements of the company having various development and
investments opportunities currently either underway or under consideration.

Operational Profit ($million)

Key Metrics

11.3

7.7

4.5

3.3

2.8

12.0

10.0

8.0

6.0

4.0

2.0

0.0

2019

2020

2021

2022

2023

The year ended 31 July 2023 resulted in operational profit of $2.8 million, which excludes revaluations of equities and properties
which are non-cash items. The reason for the decrease relates primarily to the loss generated by Surf Hardware in the current year and
increased interest rates reducing Investment Property income.

For the year ended

31 July 2023

31 July 2022

31 July 2021

31 July 2020

31 July 2019

Net Assets¹

Net Assets per Share²

Net profit after tax

Earnings per Share

Dividends paid per Share

Total Shareholder Return

$205.7m

$3.86

($5.3)m

(9.91)c

7.0c

(2.5%)

$215.5m

$4.03

$10.9m

20.42c

8.0c

5.7%

$208.6m

$3.89

$10.4m

19.35c

7.0c

8.8%

$195.5m

$3.64

$4.7m

8.82c

10.0c

(2.3%)

$206.8m

$3.83

($19.4)m

(36.07)c

11.0c

(12.8%)

¹Net Assets before tax on unrealised gains on equities, private equities, investment properties, and freehold properties.
²Net Assets per share before tax on unrealised gains on equities, private equities, investment properties, and freehold properties.

The Company meets the definition of a Listed Investment Company (“LIC”) for taxation purposes. Certain shareholders of the Company,
including individuals, trusts, partnerships and complying superannuation entities may benefit from the Company’s LIC status by being able to
claim a tax deduction for the part of the dividend that is attributable to LIC capital gains made by the Company. The amount that shareholders
can claim as a tax deduction depends on their individual situation. As an example, an individual, trust (except a trust that is a complying
superannuation entity) or partnership who is an Australian resident taxpayer at the date a dividend is paid would be entitled to a tax deduction
equal to 50% of the amount attributable to LIC capital gains included in the dividend.

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED
Executive Chairman’s Review of Operations

Executive Chairman’s Review of Operations

PROFIT AND LOSS STATEMENT

GOWINGS AT A GLANCE (at Directors' Valuation)

31 July 2023
$’000

31 July 2022
$’000

Strategic Investments
Surf Hardware International (at cost)

Cobram Estates Olives

Dice Molecules

Carlton Investments

Power Pollen Accelerated Ag Technologies

Three Valley Meats

SYMBYX

EFTsure

Eratos

Tasmanian Oyster Company

BHP Group

Australian Foundation Investments

Wholesale Investor

Other Investments – Australia
Other Investments – International

Total

Private Equity Funds
Our Innovation Fund I

OurCrowd Australia

Our Innovation Fund II

Skalata Fund II
Other Private Equity Funds

Total

Pacific Coast Shopping Centre Portfolio
Sub-regional and Neighbourhood Shopping Centres
Borrowings

Total

Other Direct Properties
Sawtell Commons - residential subdivision

Solitary 30 - Coffs Harbour development land

Other properties
Borrowings

Total

Cash and Other
Cash (AUD)

Cash (USD)

Tax Liabilities
Surf Hardware International Consolidation Impact¹
Other Assets and Liabilities

Total

Net assets before tax on unrealised gain of equities, investment properties and private equities

Provision for tax on unrealised gains on equities, investment properties and private equities

Net assets after tax on unrealised gains on equities, investment properties and private equities

¹ Difference between the investment in Surf Hardware International (at cost) and net assets attributable to the group on consolidation.

16,000

12,783

6,331

6,129

1,541

950

600

738

500

480

460

418

400

9,625
2,941

59,896

2,775

916

569

289
682

5,231

187,885
(94,310)

93,575

17,020

3,865

9,757
-

30,642

10,355

4,620

(11,218)

(4,804)
17,424

16,377

205,721

(10,369)

195,352

16,000

14,293
2,882
6,187

1,621

950

600

599

500

387

464

400

15,871
1,978

62,732

2,265

1,181

435

300
465

4,646

198,575
(94,310)

104,265

17,809

3,864

15,282
(1,000)

35,955

7,673

4,388

(13,304)

(4,517)
13,618

7,858

215,456

(13,513)

201,943

Net Investment Property income of $5.1 million represents a solid result for the Shopping Centres, the sales and foot traffic of all centres have
returned to pre-pandemic levels. The reason for the decrease to the corresponding period primarily lies with the increase in interest rates.

Net Development Property income of $3.4 million represents a strong result for sales at Sawtell Commons in the current reporting period. Stage
3 has been registered and made available for sale and we have sold through the majority of the lots with additional settlements occurring post
year end.

Surf Hardware International net loss of $1.3 million was mainly driven by a significant drop in sales post-pandemic. We expect that sales will
normalise over time and trend towards pre-pandemic levels. We have pragmatically reduced spending and inventory levels to match market
conditions.

Overall Total Net Income from Ordinary Activities of $9.1 million represents a 25% decrease on the prior year primarily driven by loss incurred by
Surf hardware International and increasing interest rates.

The unrealised loss on Investment Properties of ($13.3) million relates to the revaluation of the shopping centre portfolio in light of the current
market conditions.

Overall, the loss after tax was ($5.3) million compared to the previous year which was a profit of $10.9 million. The main drivers of the decrease
being the revaluation of the shopping centres, increased interest rates and the net loss incurred by Surf Hardware International.

For the year ended31 July 2023 $’00031 July 2022 $’000 Net Income from Ordinary ActivitiesInterest Income360132Investment Properties5,0927,926Development Properties3,407-Equities – Dividend Income1,392894Managed Private Equities104100Surf Hardware International(1,258)3,110Total Net Income from Ordinary Activities9,09712,162Head Office ExpensesAdministration, Public Company and Other6,2924,481Operational Profit2,8057,681Gain/(loss) on sale or revaluationInvestment Properties – unrealised (13,271)1,250Investment Properties – realised(15)154Managed Private Equity – unrealised(86)-Managed Private Equity - realised380(1,018)Derivatives (Fixed Interest Rate Hedge) - realised(78)3,769OtherOther Costs-(23)Other Income6632,051(Loss) / Profit Before Tax(9,602)13,864Income Tax Benefit / (Expense)4,317(2,944)(Loss) / Profit After Tax(5,285)10,920155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITEDExecutive Chairman’s Review of Operations
STRATEGIC INVESTMENTS

Executive Chairman’s Review of Operations
STRATEGIC INVESTMENTS

Gowings Surf Hardware
International ($16 M at cost)

The post pandemic slowdown weighed
heavily on the surf industry as the consumer
redirected their spending towards non-
discretionary items. Consequently, Gowings
Surf Hardware International (GSHI) sales
fell 23% to $42.7m in FY23. In addition to
the slowdown in spending, the surf industry
experienced a global oversupply of stock and
the cost of holding inventory increased. GSHI
responded quickly by responsibly reducing
inventories to appropriate levels. Inventory
and margins remain under constant review as
economic headwinds continue to challenge us
on numerous fronts.

Our focus on building the direct-to-consumer
sales channel continues and sales were flat
compared to FY22. We continue to invest in the
e-commerce platform and make our brands
available to the global audience.

GSHI relocation to Coffs Harbour is progressing
well. The recent purchase of a local property
and plans to build a purpose-built warehouse
and manufacturing facility to meet our goal of
local production in the Coffs Harbour region.

In a bid to strengthen the Gowings brand and
drive synergies GSHI will now shortly trade
as Gowings Pacific Trader. Gowings Pacific
Trader will include the following brands– FCS,
Softech, Gorilla, Kanulock and Alvey fishing
reels. We are also excited to announce the
launch of Gowings Pacific Trader as an online
and retail store launching in Gowings Coffs
Central in December 2023. GSHI remains
committed to the Gowings Whale Trust,
donating 1% of total revenue.

ARGO Investments ($0.37 M)

Cobram Estate Olives ($12.8 M)

Carlton Investments ($6.1 M)

Dice Therapeutics ($6.3 M)

Cobram Estate (CBO) commenced operations
in 1998 as a family affair and has matured into
a large undertaking with some 6,500 hectares
of olive groves in production in Victoria
and 100 staff. With olive farm and milling
operations in both Australia and the USA, CBO
is a leader in the Australian olive industry and
an innovator in sustainable olive farming.
Premium brands include Cobram Estate and
Red Island.
www.cobramestate.com.au

TPG Telecom Ltd ($0.29 M)

TPG (TPG) is a multi-award winning telecoms
service provider founded by David Teoh in
1986. With a core business revolving around
facilitating communications service access for
retail, businesses, government, TPG merged
with Vodafone Hutchison Australia in 2020.
They are among Australia’s most recognisable
communications service providers and own
extensive end to end network infrastructure
and fibre optic networks including the PPC-1
cable from Sydney to Guam that links Australia
to Asia and America. Further to their Australian
interests they also operate in New Zealand and
Singapore.
www.tpg.com.au

Argo Investments (ARG) is an Australian listed
investment company which trades its shares
on the Australian Securities Exchange. They
take their name from the ship that carried
Jason and the Argonauts on their quest to
capture the golden fleece and maintain a
diversified conservative exposure to 90 plus
Australian listed companies. Argo take a
long-term investment approach and their
straightforward business model has proven
resilient since their founding in 1946. Overall
the Argo approach is conservative, long term,
blue chip and dividend focussed. .
www.argoinvestments.com.au

Treasury Wine Estates ($0.34 M)

Treasury Wine Estate (TWE) was established
out of the Foster’s Group’s wine division
in 2011 and is one of the world’s largest
wine companies. Although a relatively new
company, it owns and manages some of the
New World’s oldest and most prestigious
wineries such as Penfolds (Australia) founded
in 1844, and Beringer Vineyards (United State)
founded in 1876. As their name suggests their
main business is the production and sale of a
large variety of wines across the globe.
www.tweglobal.com

BHP Billiton ($0.46 M)

BHP Billiton (BHP) founded in 1851 is a
world leader in the diversified resources
industry. They provide materials for essential
infrastructure aiming to continuously improve
economic development and living standards.
They manage the portfolio of assets in highly
attractive commodities growing value through
excellence in operations and acquiring the
right assets and options whilst managing
capital allocation.
www.bhp.com

Carlton Investments (CIN) was incorporated
in 1928 and has a long-standing and expert
interest in the hotel business and cinema
industries. Founded by Sir Norman Rydge
and currently Chaired by his son Alan Rydge
AM, their primary business is the purchase
and retention of carefully selected shares that
provide attractive levels of sustainable income
and the potential for long term capital growth.
Carlton Investments carries no debt and has
the objective of consistently generating fully
franked dividends with a minimal risk profile.
www.carltoninvestments.com.au

Wholesale Investor ($0.4 M)

Wholesale Investor, based in Sydney, is a
global venture investment platform. They
connect emerging innovative companies
seeking capital with investors. With a growing
ecosystem of 30,000 high net worth investors,
family offices, venture capital and private
equity firms, government bodies and industry
participants, their platform allows convenient
and simple access to investment opportunities
from a broad range of emerging business
opportunities.
www.wholesaleinvestor.com.au

SYMBYX ($0.6 M)

SYMBYX is a Sydney based medical
technology company. Founded in 2019 they
are developing device based light therapies
(photobiomodulation) to treat and provide
symptomatic relief from pain and discomfort
for people living with chronic diseases such as
Parkinson’s, dementia, Crohn’s Disease and
diabetes. They work with research partners
and clinicians in Australia, Portugal, Germany
and the United Kingdom and clinical trials are
well advanced in a number of key geographies.
www.symbyxbiome.com

Dice Therapeutics (DICE NASDAQ) is an
American biopharmaceutical company
based in San Francisco. They are undertaking
clinical-phase testing of oral agents to combat
autoimmune disorders and inflammatory
diseases. Their aim is to produce orally
digestible medicines in an area of that has
traditionally been dominated by injectable
treatments. Combining innovative chemistry
with well validated biology, their aim is to
reduce the invasiveness of current methods
and improve access to treatment.

Post year end on the 1 August 2023 the Group
has accepted the takeover bid for the Group’s
equity investment in DICE Molecules from Eli
Lily at USD $48 per share amounting to USD
$4,320,000 received on the 17 August 2023
being approximately AUD $6,766,000. This
represents a substantial return on investment.
Refer to Note 47.
www.dicetherapeutics.com

Surf Lakes($0.4 M)

Surf Lakes is exactly what it sounds like, a lake
you can surf on. With a prototype surf park
in Yeppoon, Australia consistently producing
multiple surfable waves using a contoured
lakebed. The swell is created using a hydraulic
plunge wave machine in the lake centre and
in this respect differs from traditional surf
parks where, usually, only a single wave is
produced. The team envisage accommodation,
restaurants and bars surrounding the surf
lake providing a full immersion experience for
visitors and locals alike.
www.surf-lakes.com

Tasmanian Oyster Company
($0.48 M)

The Tasmanian Oyster Company was founded
in 1979 and has more than 220 hectares of
pristine Tasmanian waters. They are the
largest vertically integrated oyster business
in Australia with hatcheries, growing farms,
harvest, sales and distribution. The company
has a strong focus on sustainability and is
certified organic by the National Association
for Sustainable Agriculture Australia. Their
oysters are among the highest quality
produced in Australia and are sold both as spat
and as mature oysters in both the domestic
and international markets with strong interest
from countries such as Japan, Singapore and
Vietnam.
www.tasmanianoysterco.com.au

EFTSure ($0.74 M)

EFTSure provides a bank detail verification
service that minimises the risk of fraudulent
invoices being paid. It matches the account
details for suppliers of goods and services
in a business’ payment system, (generally a
banking portal), by verifying the creditor’s
account name, BSB and account number
and matching it with the Australian Business
Registry data. Gowings use the system for
their online payments as a safeguard against
payment fraud and the automated nature
of the system provides material operational
efficiencies.

During the reporting period the Group
exercised its pro-rata rights to invest in a new
capital raising round, the round was closed
successfully and fully subscribed.
www.get.eftsure.com.au

Private Equities

Our Innovation Fund I, II & III
($3.49 M)

Our Innovation Fund and its successors were
both launched by OurCrowd with a specific
focus on Australian tech start-ups. Based in
Sydney they target high net worth investors
only and manage a pool of capital that is
carefully invested into technology focused
start-ups with. Key highlights for the year
include total distributions of $3,114,000 from
Assignar, EFTSure, XM Cyber and Instaclustr
which represents a significant return on
investment. The portfolio also includes GO1,
Enboarder and Advanced Navigation.
www.oifventures.com.au

Power Pollen ($1.54 M)

OurCrowd Australia($0.92 M)

OurCrowd was founded in 2013 in Jerusalem,
Israel by Jonathan Medved with the aim to
build a pool of venture capital for investing
in start-ups worldwide. They have offices in
the United States, United Kingdom, Spain,
Canada, Australia, Brazil, and Singapore and
are democratising access to private equity
investing via an easily accessible and user
friendly online platform. OurCrowd also
invest in many of the start-ups and open the
door for retail investors to invest on the same
terms. Their approach has garnered significant
support with $1.8 billion in commitments
received as of April 2022.
www.ourcrowd.com

Power Pollen is an American company
based in Ames, Iowa who have developed
a pollination capability that increases crop
yields, specifically in corn and wheat. The
process allows the producer to time their
crop pollination, rather than rely on the
variability of nature and to develop specific
crop attributes to increase cropping yields. The
technology can increase the ratio of female
to male corn plants 3 fold and as the females
are fruit bearing, crop yield is significantly
increased. The company has received strong
support from the local United States market
with the Iowa Corn Growers Association an
early equity investor.
www.powerpollen.com

Australian Foundation
Investments ($0.42 M)

Australian Foundation Investments (AFI) is
one of the largest and oldest listed investment
companies in Australia. Founded in Melbourne
in 1928 they specialise in managing a portfolio
of Australian equities and take a long term,
conservative approach to investing which
closely aligns with Gowings’ own values. This
minimises dealing costs and has historically
provided investors with sound, tax-efficient,
long-term returns. Their diversified portfolio
ensures they are not overexposed in any one
particular sector.
www.afi.com.au

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITEDEXECUTIVE CHAIRMAN’S REVIEW OF OPERATIONS
STRATEGIC INVESTMENTS

Pacific Coast Shopping Centre Portfolio

Coffs Central

Port Central

Solitary 30

Retail Sales Growth &
Resilience

With the Pandemic finally in the rear-view
mirror we are pleased to report relatively
strong retail trading conditions and solid
increases in customer foot traffic throughout
the year across our Shopping Centre
Portfolio.

Our retailers have enjoyed very strong trading
conditions during the first half of the year
in all categories, with food, travel, health &
beauty, well-being and retail services being
particularly strong. There has been a notable
softening across the discretionary categories
over recent months due to the heightened
macro-economic uncertainty and increased

household costs driven by the rising interest
rate and inflationary environment which has
impacted consumer spending.

Let’s hope that we are at the top of the
interest rate and inflation cycle and the
economy will enjoy that much talked about
“soft landing”.

The Retail Portfolio & Leasing
Momentum

We have executed a clear and deliberate
leasing, centre management and marketing
strategy to take advantage of the more
favourable retail trading conditions.
At each of our centres we have focussed on
creating vibrant place making which become
destinations of choice for our shoppers,
retailers, office workers and surrounding
communities. We have supported our

retailers through marketing initiatives
including in house media advertising and
display screens to drive retailer success.
The retail mix and ambience in each of our
centres remains a key priority.

Well Positioned for Further
Growth

With the continued high level of population
growth being attracted to the beautiful
north coast region of NSW being supported
by large government infrastructure
spending projects and initiatives we are
confident that our shopping centre portfolio
is well placed to continue to benefit in the
years to come.

Of particular note is the recent
commencement of the $2.2 billion Coffs
Bypass project that has progressed from the
early works stage and is ramping up to the
construction phase which is expected to be
completed by 2027 and will further support
local economic activity.

We are very proud and excited to report
the recent opening of Gowings G-Sphere, a
modern and innovative co working space
offering flexible working configurations backed
by state-of-the-art technology.

G-Sphere provides a safe & stylish space for
remote workers living or visiting the Coffs
Coast and reinforces our commitment to
regional Australia and the global connections
it will generate.

Occupancy levels are building strongly.

We are also pleased to welcome Market Sushi
to the centre which has recently opened with a
stunning fit-out and is trading strongly.

The leasing pipeline and enquiry levels remain
strong and we are working with a number of
new and exciting retailers who will open in
coming months.

We also continue to explore further
development opportunities at Coffs Central
including the DA approved hotel, rooftop
apartments and office tower expansion.

We are excited to welcome Platypus Shoes &
Sushia which opened in recent months with
high impact fit-outs providing a real buzz and
boosting foot-traffic to the centre.

We continue to explore various capital
upgrade, remix and redevelopment
opportunities to enhance the centre
experience for our retailers and shoppers.

Other Investments Properties
& Properties Under
Development

Sawtell Commons

Sawtell Commons Stage 3 has been
completed and we have realised $7.95
million in gross sales in the current reporting
period. These sales have been made at good
prices and overall profit generated from
the Sawtell Development was $3.4 million.
More sales are occurring post year end with
the majority of lots in Stage 3 sold and we
are progressing with the next stage. We are
pleased with the progress and financial
returns generated from the development
with more lots ready to be built.

Solitary 30 (Coffs Harbour Jetty Precinct) has
a range of staged and un-staged architectural
plans currently under consideration but
with the current NSW government Jetty
Foreshores development project struggling to
gain community acceptance, we are taking a
cautious approach to our planning.

Logie Farm and Pipers Brook

In March 2022, the Company purchased two
properties in Tasmania with the view that
agriculture in Tasmania reflects a viable
long-term industry with demand for boutique
and artisan Australian produce growing
internationally and locally. The two properties
are strategically located in the South and
North of Tasmania respectively and both
represent agricultural and development
opportunities.

155th ANNUAL REPORT 2023 I Year ended 31 July 2023GOWING BROS. LIMITED155th ANNUAL REPORT 2023 I Year ended 31 July 2023GOWING BROS. LIMITEDEXECUTIVE CHAIRMAN’S REVIEW OF OPERATIONS
SUSTAINABILITY PROGRAMME

UPDATE

Gowings continues its commitment to minimising our environmental impact.
Our goal is to become a net zero company as soon as feasibly possible. Gowings has a long history of being
environmentally proactive with a range of initiatives including the Gowings Whale Trust which was established in 2001.

GOWINGS SURF HARDWARE INTERNATIONAL

INVESTMENTS

GOWINGS WHALE TRUST

Completed Initiatives

Future Plans

Completed Initiatives

Future Plans

GSHI manufactures a range of globally
recognised surf sport related brands
including FCS, Gorilla Grip, Softech, Kanulock,
and Hydro. Currently 1% of all sales
generated goes to the Gowings Whale Trust
helping to fund initiatives safeguarding our
seas and reducing waste in the ocean. This
equates to approximately 10-20% of all GSHI
profit generated. A report into eliminating
single use plastics in packaging has been
completed with the findings currently being
implemented.

The 1% for the Gowings Whale Trust plan will
continue in the foreseeable future and GSHI
packaging will be shifted away from single
use plastics to cardboard wherever possible.
Longer term the aim is to shift production
to the use of recycled materials. As a surf
travel business, it is integral to Gowings Surf
Hardware International’s future that GSHI
minimise any negative impacts on the ocean
and environment generally.

The day to day running and practices of
the majority of Gowings investments are,
generally speaking, outside of our immediate
control and this applies to our share portfolio
and venture capital investments. Gowings
have, however, invested in two farming
properties in Tasmania that enable us to
sequester carbon and offset emissions
created in other areas of the company.

Established in 2001, the Gowings Whale
Trust seeks to preserve and promote whale
populations, and this extends to the adjacent
issues of sea biodiversity and cleanliness.
A watercraft has been donated to the Sea
Shepherd and their merchandise is promoted
at Gowing centres to provide additional
support.

Whilst there are a number of worthy
charities to partner with, Gowings is closely
considering the Plastic Collective and Ocean
Warriors Australia.

The Plastic Collective is a charity working
predominantly in Asia and the Pacific
and empowers local communities recycle

plastic waste. They provide the training and
equipment to enable plastic to be recycled
and reused and establish a community
supporting profit generating enterprise.

Ocean Warriors Australia is a not-for-
profit organisation comprised of marine
veterinarians and rescuers dedicated to
rescuing and recuperating injured, sick or
orphaned marine wildlife.

SHOPPING CENTRES

Completed Initiatives

Expert consultancy firms were engaged to
identify improvements to our three centres
with regard to waste generation, water use,
and electricity consumption. A range of
recommendations have been progressed.

that significantly reduces the centre’s carbon
emissions. Port and Coffs now have EV
charging stations. All centre lighting has been
converted to LED.

power 112 homes per annum). The Coffs
system has had a Development Application
lodged with the local council and we await
final approval.

Future Plans

Port Central and Coffs Central have
introduced recycling and coffee cup
separation bins and organic composters
have been installed with the assistance of
an EPA grant to allow us to divert food waste
from landfill. A rooftop garden has been
commissioned at Coffs Central. Kempsey
Central now has a 99kw solar system installed

Plans are underway to augment existing
centre PV (solar) capacities with two 400kW
rooftop solar systems installed at both Port
and Coffs on a shade sails structure above the
carparks and a further 99kW system installed
at Kempsey. This will bring the combined
total solar system output to 1,128kw, (this
equates to enough generated electricity to

Sizing was determined by the
aforementioned independent report and
should cover our energy needs on a day to
day basis (weather permitting), significantly
reducing our energy consumption, carbon
emissions, and reliance on the grid.

We are also exploring the possibility of each
centre establishing an embedded network
whereby retailers can purchase solar
electricity from Gowings at favourable rates.

LAND DEVELOPMENT
Sawtell Commons (220 lot subdivision in Bonville south of Coffs Harbour)

Completed Initiatives

Sawtell Commons is a free hold land
subdivision however we have sought
to identify estate wide energy saving
opportunities. Including geothermal
heating and cooling, heat pump technology,
rainwater harvesting, a community battery,
and a virtual power plant/microgrid.

Some preliminary geothermal work has
taken place with 3 pilot sites drilled and

thermally tested with initial findings positive.
An independent engineer has designed a
community wide system and undertaken
a financial feasibility study. The system is
workable considering the cost, conversations
continue with the local council.

microgrid and battery so residents can store
electricity generated by solar and then sell
energy to each other and to the grid as a
group enabling them to achieve better prices.

Gowings plan on retaining a number of lots to
establish a build-to-rent initiative.

Future Plans

Paired with the aforementioned geothermal
system we are researching a community

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITEDDirectors’ Report

Your Directors are pleased to present their report on the Company for the year ended 31 July 2023.

Directors’ and Executives' Interests

The following persons were directors, executives or a company secretary of Gowing Bros. Limited either during or since the end of the year.

Results

For the year ended

31 July 2023
$'000

31 July 2022
$'000

Operating (loss)/profit for the year before income tax

Income tax benefit/(expense)

Net (loss)/profit after income tax

Net (loss)/profit attributable to members of Gowing Bros. Limited

(9,602)

4,317

(5,285)

(5,286)

13,864

(2,944)

10,920

10,915

Dividends

$1,599,334

$2,132,445

$2,139,155

A final fully franked
dividend of 3.0 cents
per share is payable to
shareholders on
27 October 2023.

An interim fully franked
dividend of 3.0 cents
per share was paid to
shareholders on 21
April 2023.

A final fully franked LIC
dividend of 4.0 cents
per share was paid to
shareholders on 28
October 2022.

An interim fully franked
dividend of 4.0 cents
per share was paid to
shareholders on 22
April 2022.

Review of Operations
The operations of the Company are reviewed in the Executive Chairman’s ‘Review of Operations’ on page 2.

Environment
The Company is committed to a policy of environmental responsibility in all its business dealings. This policy ensures that when the Company
can either directly or indirectly influence decisions that have an impact on the environment, this influence is used responsibly.

Principal Activities
The principal activity of the Company is investment and wealth management. The Company maintains and actively manages a diversified
portfolio of assets including long-term equity and similar securities, investment properties, managed private equity, property development
projects and cash.

Significant Changes in the State of Affairs
There were no significant changes in the state of affairs of the Company other than as disclosed elsewhere in this report.

Matters Subsequent to the End of the Financial Year
No matter or circumstance has arisen since the end of the financial year which has significantly affected, or may significantly affect, the operations
of the Company, the results of those operations or the state of affairs of the Company in future financial years, except for the matters disclosed in
note 47 of the financial report.

Likely Developments and Expected Results of Operations
Further information on likely developments in the operations of the Company is included in the Executive Chairman’s ‘Review of Operations’ on
page 2.

Total Shares Professor J. West Non-Executive Chairman (Passed 29 July 2023) Director since April 2016 and Member of the Audit Committee BA (Syd), PHD (Harvard)Professor West is a former Associate Professor in the Graduate School of Business at Harvard University and is an experienced global businessman. Prior to passing, Jonathan was previously a Director in Cobram Estate Olives Limited and Hexima Limited.434,730J. E. Gowing Executive ChairmanExecutive Director and Member of the Remuneration Committee Director since 1983 Bachelor of Commerce Member of Chartered Accountants Australia and New Zealand, and Member of CPA Australia.No other directorships held in listed companies over the past 3 years. 20,990,202J. E. Gowing (James) Director – Finance and Joint Company SecretaryAppointed Director in August 2023.Bachelor of Business, CA.He is a Chartered Accountant and after graduating from UTS spent five years in Audit and Assurance at William Buck. He has experience with a wide range of Australian Companies, both listed and private. No other directorships held in listed companies over the past 3 years.64,504(Appointed 25 August 2023)J. E. Davis Non-executive Director(Appointed 25 August 2023)Appointed Director in August 2023. Bachelor of Applied Finance, Bachelor of Commerce (Accounting and Finance), CA.James Davis is a Partner at HQB Accountants Auditors Advisors at Bellingen and Coffs Harbour, NSW. He joined HQB in 2014 and made Partner in 2016. Earlier in his career, James worked at Ernst & Young and Westpac Group, working in audit & assurance in both roles. No other directorships held in listed companies over the past 3 years.-J. G. Parker Non-Executive DirectorDirector since 2002 and Chairman of the Audit Committee Bachelor of EconomicsMr. Parker is a coach of senior executives, with over three decades as an investment professional. No other directorships held in listed companies over the past 3 years. 57,306S. J. Clancy Non-Executive Director Director since April 2016 and Chairman of the Remuneration Committee and Member of the Audit Committee Diploma of Marketing.Mr. Clancy is an experienced businessman with a focus on sales and marketing and is presently a director of Transfusion Pty Ltd.5,000I. H. Morgan Joint Company Secretary Bachelor of Business, Master of Law, Grad Dip Applied Finance and Investment Mr. Morgan was appointed company secretary on 18 April 2019 and has over 35 years’ experience as a Company Secretary and Chartered Accountant for businesses operating both in Australia and overseas. 4,000155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED
Meetings of Directors

Attendance at Board, Audit Committee & Remuneration Committee meetings by each Director of the Company during the financial year is set out below:

Board Meetings

Audit Committee Meetings

Remuneration Committee
Meetings

Meetings Eligible
to attend

Attended

Meetings Eligible
to attend

Attended

Meetings Eligible
to attend

Attended

Prof J. West

J. E. Gowing

J. G. Parker

S. J. Clancy

During the year ended 31 July 2023, meetings were held in person, by telephone and by email. Where necessary, circular resolutions were also

approved.

Remuneration Report
The Company’s remuneration report, which forms a part of the Directors’ Report, is on pages 22 to 24 .

Corporate Governance
The Company’s statement on the main corporate governance practices in place during the year is set out on the Company’s website at
http://gowings.com/reports-announcements/

Audit and Non-Audit Services
During the year the following fees were paid or payable for services provided by William Buck the auditor of the company.

Audit services – William Buck

Audit and review – group

Audit and review – controlled entities

Other services – William Buck

Financial review

31 July
2023
$

123,500

50,500

5,250

179,250

31 July
2022
$

120,800

47,200

73,500

241,500

Rounding of Amounts
The Company is of a kind referred to in ASIC Corporations (Rounding in the Financial/ Directors’ Reports) Instrument 2016/191 issued by the
Australian Securities and Investments Commission relating to the “rounding off” of amounts in the Directors’ report and financial report.
Amounts in the Directors’ report and financial report have been rounded to the nearest thousand dollars in accordance with that Legislative
Instrument, unless otherwise indicated.

Auditor’s Independence Declaration
A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001 is set out on page 63.

Environmental Regulation
No significant environmental regulations apply to the Company.

Shares Under Option
There were no unissued shares under option at the date of this report.

Indemnification and Insurance of Directors and Officers
The Company’s constitution provides an indemnity for every officer against any liability incurred in his/her capacity as an officer of the Company
to another person, except the Company or a body corporate related to the Company, unless such liability arises out of conduct involving lack
of good faith on the part of the officer. The constitution further provides for an indemnity in respect of legal costs incurred by those persons
in defending proceedings in which judgement is given in their favour, they are acquitted or the court grants them relief. During the year the
Company paid insurance premiums in respect of the aforementioned indemnities. Disclosure of the amount of the premiums and of the
liabilities covered is prohibited under the insurance contract.

Indemnification and insurance of Auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Company or any
related entity against a liability incurred by the auditor.

During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company or any related entity.

Non-Audit Services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and
experience with the Company are important.

The Board of Directors has considered the position in accordance with advice received from the Audit Committee and is satisfied that the
provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act
2001. The Directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor
independence requirements of the Corporations Act 2001 for the following reasons:

• all non-audit services have been reviewed by the Audit Committee to ensure that they do not impact the impartiality and objectivity of

the auditor;

• none of the services undermine the general principles relating to auditor independence as set out in APES110 Code of Ethics for

Professional Accountants (including Independence Standards), including reviewing or auditing the auditor’s own work, acting in a
management or a decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risk and
rewards.

This report is made in accordance with a resolution of the Directors of Gowing Bros. Limited.

J. E. Gowing
Executive Chairman

Coffs Harbour, NSW
26 October 2023

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED

Executives
Executives are officers of the Company who are involved in,
concerned with, take part in and are able to influence decisions in
the management of the affairs of the Company. Persons who were
executives for all or part of the financial year ended 31 July 2023 were:

• J. E. Gowing, Executive Chairman
• J. E. Gowing (James), Director – Finance and Joint Company

Secretary

Executive remuneration is a combination of a fixed total employment
cost package and a discretionary incentive element which may
be awarded by cash or invitation to participate in the Company’s
Employee Share & Option Scheme or Deferred Employee Share Plan
Scheme. Remuneration is referenced to relevant employment market
conditions and reviewed annually to ensure that it is competitive and
reasonable.

The incentive element is awarded at the discretion of the
Remuneration Committee and approved by the Board on the basis
of recommendations from the Executive Chairman The Executive
Chairman’s incentive element is awarded at the discretion of the
Remuneration Committee and approved by the Board. In determining
the amount (if any) of bonus payments or of options or shares issued,
consideration is given to an executive’s effort and contribution to
both the current year performance and the long term performance of
the Company, the scope of the executive’s responsibility within the
Company, the scale and complexity of investments required to be
managed, the degree of active management required and the degree
of skill exhibited in the overall process. Regard is also given to the
quantum of an executive’s total remuneration.

Remuneration Report

The Remuneration Report is set out under the following main
headings:

• Principles used to determine the nature and amount of

remuneration

• Details of remuneration
• Service agreements
• Additional information

The information provided in this remuneration report has been
audited as required by section 308(3C) of the Corporations Act 2001.

Principles used to Determine the Nature and
Amount of Remuneration
It is the Company’s objective to provide maximum stakeholder benefit
from the retention of a high quality board and executive team by
remunerating Directors and executives fairly and appropriately with
reference to relevant employment market conditions and the nature
of Company operations.

The Board has established a Remuneration Committee which consists
of the following Directors:

• S. J. Clancy, Chairman of the Remuneration Committee
• J. E. Gowing, Executive Chairman

Non-Executive Directors

For Non-executive Directors, remuneration is by way of Directors’ fees
as described below. For the Executive Director and senior executives,
remuneration is by way of a fixed salary component and a discretionary
incentive component as described below.

Persons who were Non-executive Directors of the Company for all or
part of the financial year ended 31 July 2023 were:

• Prof. J. West, Chairman of the Board
• J. G. Parker
• S. J. Clancy

Directors’ fees

The remuneration of Non-executive Directors is determined in
accordance with the Directors’ remuneration provisions of the
Company’s constitution. Fees and payments to Non-executive
Directors reflect the demands which are made on, and the
responsibilities of, the Directors. Non-executive Directors’ fees and
payments are reviewed annually by the Remuneration Committee in
line with the market and approved by the Board. The Chairman’s fees
are determined independently to the fees of Non-executive Directors
based on comparative roles in the external market. Non-executive
Directors do not receive any performance based remuneration or
share options.

There is no scheme to provide retirement benefits to Non-executive
Directors outside of statutory superannuation.

Remuneration Report

Details of Remuneration
Details of the remuneration of the Directors and key management personnel are set out in the following tables:

2023

Cash salary and
fees

Cash
bonus

Movement in
provision for
annual leave

Non-
monetary
benefits

Non-executive Directors

Prof. J. West (Chairman)

J. G. Parker

S. J. Clancy

Executive Directors

J. E. Gowing

Other key management personnel

J. E. Gowing (James)

Total key management
personnel compensation

96,350

52,066

43,439

191,855

162,835

122,126

476,816

10,230

429

10,659

2022

Cash salary and
fees

Cash
bonus

Movement in
provision for
annual leave

Non-
monetary
benefits

Non-executive Directors

Prof. J. West (Chairman)

J. G. Parker

S. J. Clancy

Executive Directors

J. E. Gowing

Other key management personnel

J. E. Gowing (James)

Total key management
personnel compensation

94,941

52,121

43,620

190,682

163,575

119,272

473,529

12,211

5,961

18,172

Share
based
$

Share
bonus

Share
based
$

Share
bonus

Post –
employment
$

Long term
$

Total
$

Superannuation

Movement in
provision for long
service leave

10,156

15,300

4,579

30,035

106,506

67,366

48,018

221,890

17,165

2,488

192,718

12,874

60,074

2,011

137,440

4,499

552,048

Post –
employment
$

Long term
$

Total
$

Superannuation

Movement in
provision for long
service leave

9,534

11,879

4,380

25,793

104,475

64,000

48,000

216,475

16,425

2,511

194,722

11,978

54,196

2,194

139,405

4,705

550,602

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITEDRemuneration Report

The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:

ASX Listing Requirements

1. Shareholders at 16 October 2023

Executive Chairman

J. E. Gowing

Other key management personnel

J.E. Gowing (James)

Fixed

Performance

2023 (%)

2022 (%)

2023 (%)

2022 (%)

100

Range of shares

1 – 1,000 shares

1,001 – 5,000 shares

5,001 – 10,000 shares

10,001 – 100,000 shares

Over 100,000 shares

Total shareholders

No. of shareholders

350

385

159

310

1,259

The information provided in this remuneration report has been audited
as required by section 308(3C) of the Corporations Act 2001.

Additional Information

Employee Share & Option Scheme: The scheme is operational. No
shares or options were issued under this scheme during the year.

Deferred Employee Share Plan Scheme: All employees and non-
executive directors are eligible to participate in the Company’s Deferred
Employee Share Plan Scheme. Shares issued under this plan during the
year were purchased on market.

The Company Employee Share & Option Scheme and Deferred
Employee Share Plan Scheme may be utilised as a part of the award
of any incentive payment for all employees which in turn assists in
aligning the interests of employees with the long term performance of
the Company.

Service Agreements
There are/ were service agreements in place with J. Parker, J. Gowing,
Prof. J. West, S. Clancy, J.E. Gowing.

Remuneration and other terms of employment for the Executive
Chairman, executives and other key management personnel are
approved by the Board and provide for the provision of performance-
related incentives.

Other major provisions relating to remuneration are set out below:

J. E. Gowing, Executive Chairman

• No fixed term.
• Base salary, inclusive of superannuation, as at 31 July 2023
of $180,000, to be reviewed annually by the Remuneration
Committee.

• No termination benefit is payable.

J. E. Gowing (James), Director – Finance

• No fixed term.
• Base salary, inclusive of superannuation, as at 31 July 2023
of $135,000, to be reviewed annually by the Remuneration
Committee.

• No termination benefit is payable

The table set out below reflects the relationship between Remuneration Policies and Company Performance:

2023

2022

2021

Net Profit/(loss) after tax

Basic and diluted earnings/(loss) per share

Dividends per share declared

Share buy back – number of shares

Share buy back – value

Share price at financial year end

($5.3)m

(9.91)c

7.0c

$2.51

$10.9m

20.42c

8.0c

314k

$912k

$2.77

$10.4m

19.35c

8.0c

121k

$202k

$2.74

2020

$4.7m

8.82c

8.0c

193k

$393k

$1.34

2019

($19.4)m

(36.07)c

10.0c

$2.45

The number of shareholdings held in less than marketable parcels is 148.

2. Voting Rights
Members voting personally or by proxy have one vote for each share.

3. Substantial Shareholders at 16 October 2023
The substantial shareholders as defined by Section 9 of the Corporations Act 2001 are:

John Edward Gowing

Carlton Hotel Limited

Philip Anthony Feitelson

21,058,252

4,701,144

2,747,622

Ordinary shares

4. Top 20 Equity Security Holders at 16 October 2023
In accordance with Australian Securities Exchange Listing Rule 4.10, the top 20 equity security holders are:

Warwick Pty Limited

Audley Investments Pty Ltd

Carlton Hotel Limited

Mr John Edward Gowing

Woodside Pty Ltd

Mr John Gowing

Mr Frederick Bruce Wareham

Ace Property Holdings Pty Ltd

Charles & Cornelia Goode Foundation Pty Ltd

J P Morgan Nominees Australia Pty Ltd

Beta Gamma Pty Ltd

Mr Graeme Legge

Mr Ronald Langley & Mrs Rhonda Elizabeth Langley

Enbeear Pty Ltd

Mrs Jean Kathleen Poole-Williamson

T N Phillips Investments Pty Ltd

Feitelson Holdings Pty Ltd

Mr Phillip Anthony Feitelson

Mr Phillip Feitelson

Henadome Pty Ltd

Total

Total issued share capital

No. of ordinary
shares

7,211,378

5,263,957

4,701,144

3,676,709

3,235,816

1,187,189

1,152,358

1,130,000

1,100,000

863,699

830,368

669,200

660,580

636,829

568,443

550,000

546,500

518,111

500,889

482,497

35,485,667

53,311,125

% of issued shares

13.53%

9.87%

8.82%

6.90%

6.07%

2.23%

2.16%

2.12%

2.06%

1.62%

1.56%

1.26%

1.24%

1.19%

1.07%

1.03%

0.97%

0.94%

0.91%

66.56%

5. Corporate Governance Practices
The Company’s statement on the main corporate governance practices in place during the year is set out on the Company’s website at
www.gowings.com/reports-announcements/.

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED

Financial Report

Consolidated Statement of Profit or Loss

For the year ended

Revenue

Interest income

Equities

Private equities

Investment properties

Development properties

Revenue from the sale of goods (Surf Hardware International)

Total revenue

Other income

Gains / (losses) on disposal or revaluation of:

Private equities

Investment properties

Total other income

Total (loss) / income

Total revenue and other income

Expenses

Investment properties

Development properties

Finished goods, raw materials and other operating expenses
(Surf Hardware International)

Administration

Borrowing costs

Depreciation and amortisation

Employee benefits

Public company

Total expenses

(Loss) / profit from continuing operations before income tax expense

Income tax benefit / (expense)

(Loss) / profit from continuing operations

(Loss) / profit from continuing operations is attributable to:

Members of Gowing Bros. Limited

Non-controlling interests

(Loss) / profit from continuing operations

Notes

31 July 2023
$’000

31 July 2022
$’000

360

1,392

104

18,646

7,950

42,749

71,201

294

(13,286)

1,077

(11,915)

59,286

8,218

4,542

42,642

3,333

5,838

1,825

1,821

669

68,888

(9,602)

4,317

(5,285)

(5,286)

(5,285)

132

894

100

17,606

55,507

74,239

2,751

1,404

3,732

7,887

82,126

7,020

52,355

2,550

2,833

1,721

1,322

461

68,262

13,864

(2,944)

10,920

10,915

10,920

Consolidated Statement of Profit or Loss

Consolidated Statement of Other Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Financial Statements

Directors’ Declaration

Auditor’s Independence Declaration

Independent Auditor’s Report

The consolidated financial statements were authorised for issue by the Directors on 26 October 2023.
The Directors have the power to amend and reissue the consolidated financial statements.

The above Consolidated Statement of Profit or Loss should be read in conjunction with the accompanying Notes

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED

Notes

31 July 2023
$’000

31 July 2022
$’000

Consolidated Statement of Other Comprehensive Income

Consolidated Statement of Financial Position

For the year ended

Notes

31 July 2023
$’000

31 July 2022
$’000

(Loss) / profit from continuing operations

(5,285)

10,920

Other comprehensive income

Items that may be reclassified subsequently to profit or loss:

Exchange rate differences on translating foreign operations, net of tax

Changes in the fair value of cash flow hedges, net of tax

Items that will not be reclassified subsequently to profit or loss:

Changes in fair value of equity instruments held at fair value through other comprehensive
income, net of tax

Total comprehensive (loss) / income

Total comprehensive (loss) / income attributable to:

Members of Gowing Bros. Limited

Non-controlling interests

Total comprehensive (loss) / income

Earnings per share

Basic (loss) / earnings per share

Diluted (loss) / earnings per share

488

683

1,255

(2,859)

(2,860)

(2,859)

(9.91)c

994

11,986

11,981

11,986

20.42c

The above Consolidated Statement of Other Comprehensive Income should be read in conjunction with the accompanying Notes.

As at

Current assets

Cash and cash equivalents

Inventories

Trade and other receivables

Loans receivable

Development properties

Tax receivable

Other

Total current assets

Non-current assets

Loans receivable

Equities

Private equities

Development properties

Investment properties

Property, plant and equipment

Intangibles

Right of use assets

Derivatives

Deferred tax assets
Other

Total non-current assets

Total assets

Current liabilities

Trade and other payables

Borrowings

Lease liabilities

Current tax liabilities

Provisions

Total current liabilities

Non-current liabilities

Trade and other payables

Borrowings

Lease liabilities

Provisions

Deferred tax liabilities

Total non-current liabilities

Total liabilities

Net assets

Equity

Contributed equity

Reserves
Retained profits

Contributed equity and reserves attributable to members of Gowing Bros. Limited

Non-controlling interests

Total equity

23
24

17,394

12,571

6,834

137

6,332

854

1,334

45,456

363

43,533

5,231

23,195

189,001

5,294

3,710

1,333

898

1,471
2,795

276,824

322,280

5,195

963

868

812

7,838

94,310

559

301

23,910

119,090

126,928

195,352

11,781

103,776
79,790

195,347

195,352

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying Notes.

13,713

12,940

6,814

1,190

34,657

925

45,808

4,646

30,206

205,324

4,409

3,758

1,713

1,701
3,049

301,539

336,196

5,116

2,851

1,346

2,010

1,207

12,530

94,310

532

321

26,508

121,723

134,253

201,943

11,781

100,309
89,849

201,939

201,943

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

For the year ended

Notes

31 July 2023
$’000

31 July 2022
$’000

For the year ended

Contributed
Equity
$’000

Capital
Profits
Reserve-Pre
CGT Profits
$’000

Revaluation
Reserves
$’000

Foreign
Currency
Reserve
$’000

Hedging
Reserve -
Cash Flow
Hedge
$’000

Balance at 31 July 2021

12,693

90,503

8,504

144

Total comprehensive
income for the year

Transfer of loss on disposal
of equity instruments
at fair value through
comprehensive income
to retained earnings, net
of tax

Transactions with owners
in their capacity as owners:

Share buy-back

Dividends paid

Balance at 31 July 2022

Total comprehensive
income / (loss) for the year

Transfer of loss on disposal
of equity instruments
at fair value through
comprehensive income
to retained earnings, net
of tax

Transactions with owners in
their capacity as owners:

Dividends paid

(912)

11,781

994

90,503

9,590

216

1041

Retained
Profits
$’000

Non-
Controlling
Interests
$’000

Total
$’000

83,307

(1)

195,150

10,915

11,986

(92)

(4,281)

89,849

(912)

(4,281)

201,943

(1,041)

Balance at 31 July 2023

11,781

90,503

11,886

704

683

79,790

(3,732)

1,255

488

683

(5,286)

(2,859)

Cash flows from operating activities

Receipts in the course of operations (inclusive of GST)

Payments to suppliers and employees (inclusive of GST)

Dividends received

Interest received

Borrowing costs paid

Income taxes paid

Net cash inflows / (outflows) from operating activities

Cash flows from investing activities

Payments for purchases of properties, plant and equipment

Payments for purchases of intangibles

Payments for purchases of development properties

Payments for purchases of investment properties

Payments for purchases of equity investments

Payments for loans made

Proceeds from repayment of loans made

Proceeds from sale of development properties

Proceeds from sale of equity investments

Proceeds from sale of investment properties

Net cash inflows / (outflows) from investing activities

(3,732)

195,352

Cash flows from financing activities

Payments for share buy-backs

Proceeds from borrowings

Repayment of borrowings

Repayment of lease liabilities

Dividends paid

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying Notes.

Net cash outflows from financing activities

Net increase / (decrease) in cash and cash equivalents held

Cash and cash equivalents at the beginning of the financial year

Cash and cash equivalents at the end of the financial year

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

67,561

(60,436)

1,496

360

(5,760)

(1,745)

1,476

(1,703)

(2)

(3,863)

(3,120)

(3,104)

(200)

225

7,950

7,282

5,696

9,161

(1,888)

(1,336)

(3,732)

(6,956)

3,681

13,713

17,394

81,636

(76,417)

994

(2,833)

(4,071)

(596)

(3,368)

(21)

(11,256)

(1,054)

(11,970)

(375)

15,687

400

(11,957)

(912)

1,837

(100)

(1,091)

(4,281)

(4,547)

(17,100)

30,813

13,713

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED

Notes To The Consolidated Financial Statements

New, revised or amending Accounting Standards and Interpretations
issued but not yet mandatory

Certain new Australian Accounting Standards and Interpretations have
been recently published that are not yet mandatory for the reporting
period ended 31 July 2023. The Group's assessment is that these new
Australian Accounting Standards and Interpretations are not expected
to have a material impact on the Group in future reporting periods.

(b) Principles of Consolidation

The consolidated financial statements incorporate all the assets,
liabilities and results of the Company and all the subsidiary
companies and other interests it controlled during the year ended 31
July 2023. The Company controls an entity when it is exposed to, or
has the rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over the
entity. Details of subsidiary companies and other interests of the
Company are set out in note 40.

The assets, liabilities and results of its subsidiaries are fully
consolidated into the financial statements of the Group from the
date which control is obtained by the Group. The consolidation
of a subsidiary is discontinued from the date that control ceases.
Intercompany transactions, balances and unrealised gains or losses
on transactions between group entities are fully eliminated on
consolidation. Accounting policies of subsidiaries have been changed
and adjustments made where necessary to ensure uniformity of the
accounting policies of the Group.

Equity interests in a subsidiary not attributable, directly or indirectly,
to the Group are presented as “non-controlling interests”. The
Group initially recognises non-controlling interests that are present
ownership interests in subsidiaries and are entitled to a proportionate
share of the subsidiary’s net assets on liquidation at either fair
value or at the non-controlling interests’ proportionate share of
the subsidiary’s net assets. Subsequent to initial recognition, non-
controlling interests are attributed their share of profit or loss and
each component of other comprehensive income. Non-controlling
interests are shown separately within the equity section of the
consolidated statement of financial position and consolidated
statement of comprehensive income.

1. Summary Of Significant Accounting Policies

Gowings Bros. Limited (“the Company”) is a company limited by
shares incorporated in Australia whose shares are publicly traded on
the Australian Securities Exchange (“ASX”). The consolidated financial
statements comprise the Company and its controlled entities (referred
herein as “the Group”).

The principal accounting policies adopted in the preparation of the
consolidated financial statements are set out below. These policies
have been consistently applied to all the years presented, unless
otherwise stated.

(a) Basis of preparation

These general purpose consolidated financial statements have been
prepared in accordance with Australian Accounting Standards, other
authoritative pronouncements of the Australian Accounting Standards
Board and the Corporations Act 2001.

Compliance with IFRS

The consolidated financial statements comply with International
Financial Reporting Standards (“IFRS”) as issued by the International
Accounting Standards Board (“IASB”).

Historical cost convention

These consolidated financial statements have been prepared under
the historical cost convention, as modified by the revaluation of
equities (financial assets at fair value through other comprehensive
income), private equities (financial assets at fair value through profit
or loss), investment properties and certain classes of property, plant
and equipment.

Critical accounting estimates

The preparation of consolidated financial statements in conformity
with Australian Accounting Standards requires the use of certain
critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group’s
accounting policies. Areas involving a higher degree of judgement and
complexity or where assumptions and estimates are significant to the
consolidated financial statements are disclosed in note 3.

Comparative information

Information has been reclassified where applicable to enhance
comparability.

Amending Accounting Standards and Interpretations

Several amending Accounting Standards and Interpretations apply for
the first time for the current reporting period commencing 1 August
2022. These amending Accounting Standards and Interpretations
did not result in any adjustments to the amounts recognised or
disclosures in the financial report.

1. Summary Of Significant Accounting Policies (Continued)

(d) Goodwill

Business combinations occur where the Group acquires control over
one or more businesses.

Goodwill is carried at cost less any accumulated impairment losses.
Goodwill is carried as the excess of the sum of:

A business combination is accounted for by applying the acquisition
method, unless it is a combination involving entities or businesses
under common control. The business combination will be accounted
for from the date that control is attained, whereby the fair value of
the identifiable assets acquired and liabilities (including contingent
liabilities) assumed is recognised (subject to certain limited
exceptions).

When measuring the consideration transferred in the business
combination, any asset or liability resulting from a contingent
consideration arrangement is also included. Subsequent to initial
recognition, contingent consideration classified as equity is not
remeasured and its subsequent settlement is accounted for within
equity. Contingent consideration classified as an asset or liability is
remeasured in each reporting period to fair value, recognising any
change to fair value in profit or loss, unless the change in value can be
identified as existing at acquisition date.

Where settlement of any part of cash consideration is deferred,
the amounts payable in the future are discounted to their present
value as at the date of exchange. The discount rate used is the
entity’s incremental borrowing rate, being the rate at which a similar
borrowing could be obtained from an independent financier under
comparable terms and conditions.

All transaction costs incurred in relation to business combinations are
recognised as expenses in profit and loss when incurred.

The acquisition of a business may result in the recognition of goodwill
or a gain from a bargain purchase.

the consideration transferred;

(i)
(ii) any non-controlling interest (determined under either the full

goodwill or proportionate interest method); and

(iii) the acquisition date fair value of any previously held equity

interest;

over the acquisition date fair value of net identifiable net assets acquired.

The acquisition date fair value of the consideration transferred for
a business combination plus the acquisition date fair value of any
previously held equity interest form the cost of the investment.

Fair value re-measurements in any pre-existing equity holdings are
recognised in profit or loss in the period in which they arise. Where
changes in the value of such equity holdings had previously been
recognised in other comprehensive income, such amounts are recycled to
profit or loss.

The amount of goodwill recognised on acquisition of each subsidiary
in which the Group holds a less than 100% interest will depend on the
method adopted in measuring the non-controlling interest. The Group
can elect in most circumstances to measure the non-controlling interest
in the acquiree either at fair value (“full goodwill method”) or at the non-
controlling interest’s proportionate share of the subsidiary’s identifiable
net assets (“proportionate interest method”). In such circumstances, the
Group determines which method to adopt for each acquisition and this is
stated in the respective notes to these financial statements disclosing the
business combination.

Under the full goodwill method, the fair value of the non-controlling
interests is determined using valuation techniques which make the
maximum use of market information where available. Under this method,
goodwill attributable to the non-controlling interest is recognised in the
consolidated financial statements.

Goodwill on acquisitions of subsidiaries is included in intangible assets.

Goodwill is tested for impairment annually and is allocated to the
Group’s cash-generating units or groups of cash-generating units, which
represents the lowest level at which goodwill is monitored but where
such level is not larger than an operating segment. Gains and losses on
the disposal of an entity include the carrying amount of goodwill related
to the entity sold.

Changes in the ownership interests in a subsidiary that do not result in a
loss of control are accounted for as equity transactions and do not affect
the carrying amounts of goodwill.

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED

1. Summary Of Significant Accounting Policies (Continued)

(j) Right of use assets

(m) Revenue recognition

(e) Segment reporting

Equities

Cash and fixed interest

Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision maker
including:
•
•
•
•
•
•
• Other

Surf Hardware International business

Development properties

Investment properties

Private equities

(f) Foreign currency translation

(i) Functional and presentation currency
Items included in the consolidated financial statements of the
Group are measured using the currency of the primary economic
environment in which the Group operates (“functional currency”). The
consolidated financial statements are presented in Australian dollars,
which is the Group’s functional and presentation currency.

(ii) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Translation differences on private equities held at fair
value through profit or loss are recognised in profit or loss as part
of the fair value gain or loss. Translation differences on equities are
recognised in equity.

(iii) Foreign Operations
The financial results and position of foreign operations, whose
functional currency is different from the Group’s presentation
currency, are translated as follows:

(a) assets and liabilities are translated at exchange rates prevailing at
the end of the reporting period;
(b) income and expenses are translated at average exchange rates for
the period; and
(c) retained earnings are translated at the exchange rates prevailing at
the date of the transaction.

Exchange differences arising on translation of foreign operations with
functional currencies other than Australian dollars are recognised in
other comprehensive income and included in the foreign currency
translation reserve in the consolidated statement of financial position.
The cumulative amount of these differences is reclassified into profit
or loss in the period in which the operation is disposed of.

(g) Income tax

The income tax expense or benefit for the period is the tax payable on
the current period’s taxable income adjusted by changes in deferred
tax assets and liabilities attributable to temporary differences and
to unused tax losses. Deferred income tax is provided in full, using
the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the
consolidated financial statements. 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.

No deferred tax asset or liability is recognised in relation to these
temporary differences if they arose in a transaction, other than a
business combination, that at the time of the transaction did not
affect either accounting profit or loss or taxable profit or loss. 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.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset tax assets and liabilities and when the
deferred tax balances relate to the same taxation authority. Current
tax assets and tax liabilities are offset where the Group has a legally
enforceable right to offset and intends either to settle on a net basis,
or to realise the asset and settle the liability simultaneously. Current
and deferred tax is recognised in profit or loss, except to the extent
that it relates to items recognised in other comprehensive income
or directly in equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity, respectively.

(h) Impairment of non-financial assets

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.
The recoverable amount is the higher of an asset’s fair value less costs
to sell and value in use. For the purpose of assessing impairment,
assets are grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash
inflows from other assets or groups of assets (cash generating units).
Non-financial assets that suffered impairment are reviewed for
possible reversal of the impairment at each reporting date.

A right of use asset is recognised at the commencement date of a
lease. The right of use asset is measured at cost, which comprises the
initial amount of the lease liability, adjusted for, as applicable, any
lease payments made at or before the commencement date net of
any lease incentives received, any initial direct costs incurred, and,
except where included in the cost of inventories, an estimate of costs
expected to be incurred for dismantling and removing the underlying
asset, and restoring the site or asset.

Right of use assets are depreciated on a straight-line basis over
the unexpired period of the lease or the estimated useful life of the
asset, whichever is the shorter. Where the Group expects to obtain
ownership of the leased asset at the end of the lease term, the
depreciation is over its estimated useful life. Right of use assets are
subject to impairment or adjusted for any remeasurement of lease
liabilities.

The Group has elected not to recognise a right of use asset and
corresponding lease liability for short-term leases with terms of 12
months or less and leases of low-value assets. Lease payments on
these assets are expensed to profit or loss as incurred.

(k) Inventories

Inventories comprise raw materials and finished goods and are stated
at the lower of cost and net realisable value. Costs of raw materials
and finished goods are determined after deducting rebates and
discounts. Net realisable value is the estimated selling price in the
ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.

Revenue is recognised for the major business activities as follows:
(i) Equities

Dividend income is recognised when received. Revenue from the
sale of investments is recognised at trade date.

(ii) Property rental

Rental income is recognised in accordance with the underlying
rental agreements.

(iii) Land development and sale

Revenue is recognised on settlement.

(iv) Sales of goods

Revenue from the sale of goods is recognised at the point in
time when the customer obtains control of the goods, which is
generally at the time of delivery.

(v) Other investment revenue

Trust income and option income is recognised when earned.

(vi) Other property revenue

Other property revenue is recognised in accordance with
underlying agreements or when the right to receive payment is
established.
(vii) Interest revenue

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.

(n) Trade and other receivables

Receivables consists mainly of amounts due for rental income and
sale of goods. Receivables are initially recognised at fair value and
subsequently measured at amortised cost using the effective interest
method, less any allowance for expected credit losses. Amounts
are usually due between seven and ninety days from invoice date.
Amounts due for the sale of financial assets and properties are usually
due on settlement unless the specific contract provides for extended
terms.

(i) Property, plant and equipment

(l) Intangibles Other than Goodwill

Property, plant and equipment (excluding freehold properties) are
measured at cost less accumulated depreciation and accumulated
impairment losses. Costs are measured at fair value of assets given
up, shares issued or liabilities undertaken at the date of acquisition
plus incidental costs directly attributable to the acquisition. Freehold
properties are measured at fair value, with changes in fair value
recognised in other comprehensive income. Depreciation is calculated
on a straight-line basis to write off the net cost or revalued amount of
each item of plant and equipment (excluding freehold land) over its
expected useful life to the Group. Estimates of remaining useful lives
are made on a regular basis for all assets, with annual reassessments
for major items. Land is not depreciated. Depreciation is calculated to
allocate cost or revalued amounts, net of their residual values, over
their estimated useful lives, as follows:

Furniture, fittings and equipment
Motor vehicles
Buildings

3 to 10 years
6 years
40 years

The assets’ residual values and useful lives are reviewed, and adjusted
if appropriate, at each statement of financial position date. An asset’s
carrying amount is written down immediately to its recoverable
amount if the asset’s carrying amount is greater than its estimated
recoverable amount. Gains and losses on disposal are determined
by comparing proceeds with carrying amount. These are included in
profit or loss.

Intangible assets are identifiable non-monetary assets without
physical substance. They are recognised only if it is probable the
asset will generate future benefits for the Group. Those assets with an
indefinite useful life are tested for impairment annually. All intangible
assets are tested for impairment when there is an indication that
carrying amounts may be greater than recoverable amounts as set out
in note 1(h).

(i) Patents
Patents have a finite useful life and are carried at cost less
accumulated amortisation and impairment losses. Amortisation
is calculated using the straight-line method to allocate the cost of
patents over their useful lives.

(ii) Brand names
Brand names are initially recognised at fair value when acquired
in a business combination. Brand names are assessed to have an
indefinite useful and are carried at cost less accumulated impairment.
An indefinite useful life is considered appropriate when there is no
foreseeable limit to the period over which the brand name is expect to
generate cash flows.

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED

1. Summary Of Significant Accounting Policies (Continued)

(o) Investments and other financial assets

Investments and other financial assets are 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, it’s carrying value is written off.

(i) Financial assets at fair value through profit of 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. Typically, such financial
assets will be either: (i) held for trading, where they are acquired
for the purpose of selling 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.

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.

(p) Investment properties

Investment properties, principally comprising freehold commercial and
retail buildings, are held for long-term rental yields and are not occupied
by the Group. Investment properties are initially recognised at cost,
including transaction costs, and are subsequently remeasured at fair
value. Movements in fair value are recognised directly to profit or loss.

Investment properties are derecognised when disposed of or when there
is no future economic benefit expected.

(ii) Financial assets at fair value through other comprehensive income

(q) Joint ventures

Financial assets at fair value through other comprehensive
income include equity investments which the Group intends to
hold for the foreseeable future and has irrevocably elected to
classify them as such upon initial recognition.

The fair values of quoted investments are based on current
market prices. If the market for a financial asset is not active
(and for unlisted securities), the Group establishes fair value
by using valuation techniques. These include the use of recent
arm’s length transactions, reference to other instruments that
are substantially the same and relying as little as possible
on unobservable inputs and maximising the use of relevant
observable inputs.

Jointly controlled assets
The proportionate interests in the assets, liabilities and expenses of
joint venture activities have been incorporated in the consolidated
financial statements under the appropriate headings. Details of the
joint ventures are set out in note 41.

(r) Trade and other payables

These amounts represent liabilities for goods and services provided to
the Group prior to the end of the financial year and which are unpaid.
The amounts are unsecured and are usually paid within thirty to sixty
days after the end of the month of recognition.

(iii) Impairment of financial assets

(s) Borrowings

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.

Borrowings are initially recognised at the fair value of the
consideration received, net of transaction costs. They are
subsequently measured at amortised cost using the effective interest
method. Borrowings are classified as current liabilities unless the
Group has an unconditional right to defer settlement of the liability for
at least 12 months after the statement of financial position date.

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.

(y) Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Group, 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 tax effect of the 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.

(z) Rounding of amounts

The Company is of a kind referred to in ASIC Corporations (Rounding
in the Financial/ Directors' Reports) Instrument 2016/191 issued by
the Australian Securities and Investments Commission relating to
the "rounding off" of amounts in the directors' report and financial
report. Amounts in the directors' report and financial report have
been rounded to the nearest thousand dollars in accordance with that
Legislative Instrument, unless otherwise indicated

(t) Dividends

Provision is made for the amount of any dividend declared,
determined or publicly recommended by the Directors on or before
the end of the financial year but not distributed at balance date.

(u) Employee entitlements

(i) Wages, salaries and annual leave

Liabilities for wages, salaries and annual leave are measured as
the amount unpaid at the reporting date in respect of employees’
services up to that date at pay rates expected to be paid when
the liabilities are settled.

(ii) Long service leave

A liability for long service leave is recognised, and is measured
as the present value of expected future payments to be made in
respect of services provided by employees up to the reporting
date. Consideration is given to expected future wage and salary
levels and periods of service.

(v) Borrowing costs

Borrowing costs are recognised as expenses in the period in which
they are incurred except where they are included in the costs of
qualifying assets. Only borrowing costs relating specifically to the
qualifying asset are capitalised. Borrowing costs include interest on
bank overdrafts and short-term and long-term borrowings, including
amounts paid or received on interest rate swaps.

(w) Cash and cash equivalents

For purposes of the statement of cash flows, cash 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. Bank overdrafts are shown within borrowings in current
liabilities in the consolidated statement of financial position.

(x) 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

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED

2. Financial Risk Management

2. Financial Risk Management (Continued)

The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, price risk and interest rate risk),
liquidity risk, credit risk and fair value estimation risk. The Group’s overall risk management program focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the financial performance of the Group through the mix of investment classes. The
Board of Directors and management undertake various risk management practices, both informally on a daily basis and formally on a monthly
basis at board level. Risks are identified and prioritised according to significance and probability. Progress towards managing these risks is
documented and formally reviewed on a monthly basis.

Market risk

(i) Foreign exchange risk

Foreign exchange risk arises when future commercial transactions and recognised financial assets and liabilities are denominated in a
currency that is not the Group’s functional currency. The Group does not have a policy with regard to hedging currency risk. The Group has
not hedged its foreign currency investments. The multiple currencies provide diversification benefits to the portfolio. The Group monitors
foreign currency movements daily and seeks advice from foreign currency specialists as to potential courses of action that may protect or
enhance the value of the Group’s investments.

The Group’s exposure to foreign currency risk on financial assets and liabilities at the reporting date was as follows:

Currency exposure in AUD

Cash and cash equivalents

Trade and other receivables

Trade and other payables

Lease liabilities

Equities

Private equities

31st July 2023

31st July 2022

EUR
$’000

462

1,382

(388)

(556)

364

GBP
$’000

JPY
$’000

(35)

514

773

(36)

421

USD
$’000

4,572

2,310

(476)

(784)

6,278

1,252

EUR
$’000

156

2,084

(290)

(613)

346

GBP
$’000

(48)

(25)

USD
$’000

5,162

2,247

(536)

(243)

10,028

916

JPY
$’000

712

740

(269)

(141)

259

Based on the cash held at 31 July 2023, if the Australian dollar weakened / strengthened by 10% against the US dollar, cash would have been
$574,000 higher / $469,000 lower (2022: $508,000 higher / $416,000 lower). If the Australian dollar weakened / strengthened by 10% against the
GBP, cash would have been $8,000 higher / $7,000 lower (2022: $7,000 higher / $5,000 lower). If the Australian dollar weakened / strengthened
by 10% against the EUR, cash would have been $51,000 higher / $42,000 lower (2022: $17,000 higher / $14,000 lower). If the Australian dollar
weakened / strengthened by 10% against the JPY, cash would have been $57,000 higher / $47,000 lower (2022: $79,000 higher / $65,000 lower).

Based on the trade receivables held at 31 July 2023, if the Australian dollar weakened / strengthened by 10% against the US dollar, receivables
would have been $250,000 higher / $204,000 lower (2022: $257,000 higher / $210,000 lower). If the Australian dollar weakened/strengthened by
10% against the EUR, receivables would have been $154,000 higher / $126,000 lower (2022: $232,000 higher / $189,000 lower). If the Australian
dollar weakened/strengthened by 10% against the JPY, receivables would have been $86,000 higher / $70,000 lower (2022: $82,000 higher /
$67,000 lower).

Based on the trade payables held at 31 July 2023, if the Australian dollar weakened / strengthened by 10% against the US dollar, payables would
have been $12,000 higher / $10,000 lower (2022: $53,000 higher / $43,000 lower). If the Australian dollar weakened/strengthened by 10% against
the EUR, payables would have been $43,000 higher / $35,000 lower (2022 $32,000 higher / $26,000 lower). If the Australian dollar weakened/
strengthened by 10% against the GBP, payables would have been $4,000 higher / $3,000 lower (2022: $5,000 higher / $4,000 lower).

Based on the lease liabilities held at 31 July 2023, if the Australian dollar weakened / strengthened by 10% against the US dollar, lease liabilities
would have been $26,000 higher / $21,000 lower (2022: $87,000 higher / $71,000 lower). If the Australian dollar weakened/strengthened by 10%
against the EUR, lease liabilities would have been $62,000 higher / $51,000 lower (2022: $68,000 higher / $56,000 lower). If the Australian dollar
weakened / strengthened by 10% against the GBP, lease liabilities would have been $nil higher / $nil lower (2022: $3,000 higher / $2,000 lower).
If the Australian dollar weakened / strengthened by 10% against the JPY, lease liabilities would have been $4,000 higher / $3,000 lower (2022:
$16,000 higher / $13,000 lower).

Based on the equities held at 31 July 2023, if the Australian dollar weakened / strengthened by 10% against the US dollar, equities would
have been $1,114,000 higher / $912,000 lower (2022: $698,000 higher / $571,000 lower). If the Australian dollar weakened/strengthened by
10% against the EUR, equities would have been $40,000 higher / $33,000 lower (2022: $38,000 higher / $31,000 lower). If the Australian dollar
weakened/strengthened by 10% against the JPY, equities would have been $47,000 higher / $38,000 lower (2022: $29,000 higher / $24,000 lower).

Based on the private equities held at 31 July 2023, if the Australian dollar weakened / strengthened by 10% against the US dollar, private equities
would have been $102,000 higher / $83,000 lower (2022: $139,000 higher / $114,000 lower).

The percentage change is the expected overall volatility of the significant currencies, which is based on management’s assessment of reasonable
possible fluctuations taking into consideration movements over the last 6 months each year and the spot rate at each reporting date.

(i) Price risk

The Group is exposed to asset price risk. This arises from equities and private equities held by the Group. A price reduction at 5% and 10%
spread equally over the investment portfolio would reduce its value by $2,438,000 (2022: $2,523,000) and $4,876,000 (2022: $5,045,000)
respectively.

The Group seeks to reduce market risk at the investment portfolio level by ensuring that it is not overly exposed to one company or
one particular sector of the market. The relative weightings of the individual investments and the relevant market sectors are reviewed
regularly and risk can be managed by reducing exposure where necessary. The Group does not have set parameters as to a minimum or
maximum amount of the portfolio that can be invested in a single company or sector. The writing and purchasing of options provides some
protection against a fall in market prices by both generating income to partially compensate for a fall in capital values and buying put
protection to lock in asset prices.

(ii)

Interest rate risk
The Group’s interest-rate risk arises from long-term borrowings and cash on deposit. Borrowings issued at variable rates expose the Group
to cash flow interest-rate risk. Borrowings issued at fixed rates expose the Group to fair value interest-rate risk. The Group’s interest bearing
assets include deposits on the overnight money market. Interest earnt on these deposits varies according to the Reserve Bank’s monetary
policy decisions.

As at the reporting date, the Group had the following variable rate borrowings:

Weighted average
interest rate

31st July 2023
Balance $’000

Weighted average
interest rate

31st July 2022
Balance $’000

Borrowings

Interest rate swaps (notional principal amount)

Net exposure to cash flow interest rate risk

5.06%

2.05%

95,273

(47,000)

48,273

0.83%

97,161

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has
a strict code of credit, including obtaining agency credit information, confirming references and setting appropriate credit limits. The Group
obtains guarantees where appropriate to mitigate credit risk. The maximum exposure to credit risk at the reporting date to recognised financial
assets is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the consolidated statement of financial
position and notes to the consolidated financial statements. The Group does not hold any collateral.

Liquidity risk

This is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. Prudent liquidity risk
management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of
committed credit facilities and the ability to close-out market positions. Management monitors its cash flow requirements daily. Furthermore,
management monitors the level of contingent payments on a weekly basis by reference to known sales and purchases of securities and
dividends and distributions to be paid or received.

Maturity of Financial Liabilities

31 July 2022

Non-derivatives

Non-interest bearing

Fixed rate

Variable rate

Total non-derivatives

Less than
1 year

Between
1-2 years

Between
2-5 years

Over
5 years

Total contractual
cash flow

5,116

1,346

2,851

9,313

230

94,310

94,592

302

5,168

1,878

97,161

104,207

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED

2. Financial Risk Management (Continued)

Maturity of Financial Liabilities (continued)

31 July 2023

Non-derivatives

Non-interest bearing

Fixed rate

Variable rate

Total non-derivatives

Derivatives

Fixed rate

Less than
1 year

Between
1-2 years

Between
2-5 years

Over
5 years

Total contractual
cash flow

5,195

868

963

7,026

(405)

182

94,310

94,502

(405)

377

(88)

5,205

1,427

95,273

101,905

(898)

Fair value estimation risk
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.

Fair value hierarchy
The Group measures fair value using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements.

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date.
Level 2: inputs other than quoted prices included within level 1 that are observable for the assets or liabilities, either directly or indirectly.
Level 3: unobservable inputs for the assets or liability.

The following tables present the Group’s assets measured and recognised on a recurring basis at fair value at 31 July 2022 and 31 July 2023.
The Group does not have any liabilities measured at fair value at either reporting date.

31 July 2022

Financial assets – designated at fair value through other
comprehensive income

Investments – Australian equities

Investments – Global equities

Financial assets – designated at fair values through profit or loss

Investments – Private equities

Investments – Investment properties

Total

31 July 2023

Financial assets – designated at fair value through other
comprehensive income

Investments – Australian equities

Investments – Global equities

Derivatives

Financial assets – designated at fair values through profit or loss

Investments – Private equities

Investments – Investment properties

Total

Level 1

$’000

29,903

4,860

34,763

Level 1

$’000

25,984

9,272

35,256

Level 2

$’000

898

9,022

2,023

4,646

205,324

221,015

Level 3

$’000

6,737

1,540

5,231

189,001

202,509

38,925

6,883

4,646

205,324

255,778

Total

$’000

32,721

10,812

898

5,231

189,001

238,663

The Group had no assets or liabilities measured at fair value on a non-recurring basis in the current period.

Fair values of financial instruments not recognised at fair value

The Group has a number of financial instruments which are not measured at fair value at 31 July 2023. The carrying amounts of cash and cash
equivalents, current trade and other receivables, current trade and other payables, current borrowings and current lease liabilities are assumed
to approximate their fair value due to their short-term nature. The carrying amounts of non-current trade and other payables, borrowings and
lease liabilities approximate their fair value as the impact of discounting is not significant.

2. Financial Risk Management (Continued)

Fair value hierarchy (continued)

Valuation techniques used to determine fair values
Specific valuation techniques used to determine fair value include:

• The fair value of listed Australian and global equities is based

on quoted market prices at the reporting date.

• The fair value of directly held unlisted Australian and global

equity investments is determined by management valuations
in accordance with the AVCAL valuation guidelines. A variety of
methods are used including reference to recent shares issued
and net assets of underlying investments.

•

Investments in private equities primarily consist of

investments in managed private equity funds, each of which
consists of a number of investments in individual companies,
none of which are material. Fair value of managed private
equity investments has been determined using fund manager
valuations, which are prepared in accordance with AVCAL
Guidelines. Directors have reviewed those valuations.
• The fair value of sub-regional and neighbourhood shopping
centre investment properties is determined by management
with reference to the latest independent valuations prepared
for each shopping centre updated for changes in operating
income and capitalisation rates which reflect vacancy rates,
tenant profile, lease expiry, developing potential and the
underlying physical condition of the property. For other
investment properties, fair value is based on current market
prices in an active market for properties of similar nature or
recent prices in less active markets.

Fair value measurements using significant unobservable inputs (level 3).
The following table presents the changes in level 3 items for the period ended 31 July 2023:

Reconciliation of level 3 fair value movements

Opening balance

Transfers to level 1

Transfers from loans

Purchases

Sales

31 July 2023
$’000

221,015

400

4,652

(9,253)

(462)

(12,992)

(851)

202,509

31 July 2022
$’000

236,498

(18,469)

4,560

(9,494)

(329)

5,598

2,651

221,015

Gains and losses on Australian and global equities are presented in
the changes in fair value of equity instruments at fair value through
other comprehensive income, net of tax line item in the consolidated
statement of comprehensive income.

Gains and losses of private equities and investment properties are presented
net as other income in the consolidated statement of profit or loss.

During the year there were no transfers of equities between the levels
of the fair value hierarchy (2022: transfers of equities between level
3 and level 1 due to these equities being listed on stock exchanges).
Transfers between the levels of the fair value hierarchy are recognised
at the beginning of the reporting period. There were no changes made
to any of the valuation techniques used due to determine fair value
during the year.

Refer to the following notes for reconciliation of individual classes of assets:

• Equities - refer to note 15
• Private equities - refer to note 16
•

Investment properties - refer to note 18

Transfers between fair value hierarchy levels and changes in valuation
techniques used to determine fair value

Significant unobservable inputs used in level 3 fair value
measurements

Significant unobservable inputs used in level 3 fair value
measurements relate to sub-regional and neighbourhood shopping
centre capitalisation rates. Refer to note 18 for further disclosures
pertaining to these inputs.

3. Critical Accounting Estimates And
Judgements

Managed and Direct Private Equity

The Group’s practice for ‘Managed Private Equity’ valuations is to
procure each Fund Manager’s published unit price valuation and review
it for reasonableness, potential misstatements and impairments.
In reviewing each Fund Manager’s valuation, consideration is given
to audited accounts, compliance with Australian Venture Capital
Association (“AVCAL”) valuation guidelines, Australian Accounting
Standards, valuation methodology and assumptions, peer valuations,
recent market prices, liquidity and control provisions, discussions with
the Fund Manager and, where considered relevant, meetings with the
underlying investee company’s management.

The impact of the revaluation of managed private equities at 31 July

2023 was a gain of $380,000 (2022: a loss of $1,018,000) recognised in
profit or loss.

The Group holds ‘Direct Private Equity’ investments in unlisted private
companies which have been valued using the Board and management’s
best estimation of market value. The valuation considerations for
managed private equity are applied to direct private equity based on
recent shares issued and net assets of underlying investments, liquidity
and minority shareholder provisions.

Investment property

Investment property valuations are estimated by the board and
management with reference where possible to external valuations,
market appraisals, recent comparable sales, date of purchase and
capitalisation rate valuations. The impact on profit or loss relating
to the revaluation of investment properties was a loss of $13,271,000
(2022: gain of $1,250,000).

Level 2

$’000

Level 3

$’000

Total

$’000

Amortisation and depreciation

Net (loss) / gain recognised to profit and loss

Net (loss) / gain recognised to other comprehensive income

Closing balance

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED

4. Segment Information

4. Segment Information (Continued)

The Group comprises of the following business segments, based on the group’s management reporting systems:

For the year ended

• Cash and fixed interest
• Equities
• Private equities
•
Investment properties
• Development properties
• Surf Hardware International business
• Other

For the year ended

Segment revenue

Cash and fixed interest – interest received

Equities – dividends and option income received

Private equities – distributions received

Investment properties – rent received

Development properties – realised gains on disposal

Surf Hardware International business – sale of goods

Segment other income

Private equities – realised and unrealised gains

Investment properties –realised and unrealised gains

Other

Total segment revenue and other income

For the year ended

Segment revenue

Cash and fixed interest

Equities

Private equities

Investment properties

Development properties

Surf Hardware International business

Other

Total segment result

Income tax benefit / (expense)

Net (loss) / profit after tax

Revenue from external customers by geographical region

Australia

United States of America

Japan

Europe

Total revenue from external customers

31 July 2023
$’000

31 July 2022
$’000

39,978

12,449

7,318

9,600

69,345

31,422

17,765

8,214

15,712

73,113

31 July 2023
$’000

31 July 2022
$’000

The Group only derives revenue from external customers in the investment properties, development properties and Surf Hardware
International business segments.

360

1,392

104

18,646

7,950

42,749

71,201

294

(13,286)

1,077

(11,915)

59,286

132

894

100

17,606

55,507

74,239

2,751

1,404

3,732

7,887

82,126

31 July 2023
$’000

31 July 2022
$’000

360

1,392

398

(8,272)

3,408

(1,258)

(5,630)

(9,602)

4,317

(5,285)

132

894

2,851

9,318

3,109

(2,440)

13,864

(2,944)

10,920

As at

Segment assets

Cash and fixed interest

Equities

Private equities

Investment properties

Development properties

Surf Hardware International business

Unallocated assets

Total assets

Segment liabilities

Investment properties

Surf Hardware International business

Unallocated liabilities

Total liabilities

Non-current assets by geographical region

Australia

United States of America

Japan

Europe

Total non-current assets

31 July 2023
$’000

31 July 2022
$’000

17,394

43,533

5,231

189,001

23,195

21,045

22,881

322,280

90,175

5,043

31,710

126,928

13,713

45,808

4,646

205,324

30,206

23,713

12,786

336,196

91,175

7,231

35,847

134,253

264,990

290,885

9,886

770

1,178

8,702

697

1,255

276,824

301,539

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED

4. Segment Information (Continued)

For the year ended

Payments for the acquisition of:

- Investment properties

- Development properties

- Equities

Gains / (losses) on disposal or revaluation of:

- Investment properties

- Private equities

Unallocated:

- Payments for the acquisition of property, plant and equipment

- Payments for the acquisition of intangibles

Accounting policies

31 July 2023
$’000

31 July 2022
$’000

3,120

3,863

3,104

(13,286)

294

1,703

1,054

11,256

11,970

1,404

2,751

3,368

Segment information is prepared in conformity with the accounting policies of the Group as disclosed in note 1.

Segment revenues, expenses, assets and liabilities are those that are directly attributable to a segment and the relevant portion that can be
allocated to a segment on a reasonable basis.

All segments other than Surf Hardware International business segment
Segment assets include all assets used by a segment and consist primarily of operating cash, investments, investment properties, development
properties and plant and equipment, net of related provisions. While most of these assets can be directly attributable to individual segments,
the carrying amounts of certain assets used jointly by segments are allocated based on reasonable estimates of usage. Segment liabilities
consist of borrowings. Segment assets and liabilities do not include income taxes. Tax assets and liabilities, trade and other creditors and
employee entitlements and goodwill are represented as unallocated amounts.

Surf Hardware International business segment
Segment assets include all assets (excluding operating cash of $2.42 million (2022: $1.65 million) which is included in the cash segment) used by
the Surf Hardware International business segment and consist primarily of trade and other receivables, inventories, plant and equipment, right
of use assets and intangibles, net of related provisions. Segment liabilities consist of borrowings, trade and other payables, lease liabilities and
employee entitlements. Segment assets and liabilities do not include income taxes. Tax assets and liabilities are represented as unallocated
amounts.

Segment cash flows

Segment information is not prepared for cash flows as management consider it not relevant to users in understanding the financial position and
liquidity of the Group.

5. Operating Profit

For the year ended

(Loss) / profit from continuing operations before income tax expense includes
the following specific items:

Gains

Private equity investment distributions

Expenses

Interest and other borrowing costs

Employee benefits

Cost of sales (Surf Hardware International)

Cost of sales (Development properties)

31 July 2023
$’000

31 July 2022
$’000

104

5,838

12,367

24,809

4,542

100

2,833

11,421

34,078

6. Income Tax Expense

For the year ended

Current tax

Deferred tax

Over provided in prior years

Income tax attributable to:

(Loss) / profit from continuing operations

Aggregate income tax expense on (loss) / profit

Reconciliation of income tax expense to prima facie tax on (loss) / profit

(Loss) / profit from continuing operations before income tax expense

Tax at the Australian tax rate of 30% (2022: 30%)

Tax effect of amounts which are not deductible (taxable) in calculating taxable income:

Non-assessable income/ Non-deductible expenses

Franked dividends

Over provision in prior year

Deferred tax assets recorded not recognised and effect of tax rates in foreign
jurisdictions

Income tax (benefit) / expense

Amounts recognised directly in equity
Aggregated current and deferred tax arising in the reporting period and not
recognised in net profit or loss but directly debited or (credited) to equity

7. Cash And Cash Equivalents

As at

Cash at bank and on hand

8. Current Inventories

At cost or net realisable value

Raw materials and finished goods

Balance at end of year

9. Current Trade And Other Receivables

Trade debtors

Less: expected credit losses

Balance at end of year

10. Current Loans Receivables

Loan receivables

11. Current Development Properties

At cost or net realisable value

Balance at beginning of year

Transfer from non-current investment properties

Balance at end of year

31 July 2023
$’000

31 July 2022
$’000

(842)

(3,234)

(241)

(4,317)

(9,602)

(2,881)

(422)

(241)

(801)

(4,317)

831

1,526

1,511

(93)

2,944

13,864

4,160

(791)

(126)

(93)

(206)

2,944

426

31 July 2023
$’000

17,394

31 July 2022
$’000

13,713

12,571

7,136

(302)

6,834

1,37

6,332

12,940

7,111

(297)

6,814

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED

12. Tax Receivables

As at

Tax receivable

13. Other Current Assets

Prepayments

Other

Balance at end of year

14. Non-Current Loan Receivables

31 July 2023
$’000

854

31 July 2022
$’000

1,334

1,181

1,190

Loan receivables

363

925

Interest on loans are charged at commercial interest rates.

15. Non-Current Equities

At fair value through other comprehensive income

Balance at beginning of year

Revaluation to fair value

Additions

Transfers

Disposal proceeds

Balance at end of year

Changes in fair value of equities are recorded in equity.

16. Non-Current Private Equities

At fair value through profit or loss

Balance at beginning of year

Revaluation to fair value

Additions

Transfers

Disposal proceeds

Net (loss) / gain on disposal

Balance at end of year

45,808

1,794

2,790

400

(7,259)

43,533

4,646

380

314

(23)

(86)

5,231

Changes in fair values of private equities at fair value through the profit or loss are recorded in other income.

17. Non-Current Development Properties

At cost or net realisable value

Balance at beginning of year

Additions

Disposal proceeds

Net gain on disposal

Transfer to current development properties

Balance at end of year

30,206

3,863

(7,950)

3,408

(6,332)

23,195

43,087

1,421

9,608

408

(8,716)

45,808

8,003

(1,018)

658

(71)

(6,695)

3,769

4,646

18,950

11,256

30,206

18. Non-Current Investment Properties

As at

At fair value

Balance at beginning of year

Additions

Disposal proceeds

Net (loss) / gain on disposal

Amortisation on incentives

Net (loss) / gain from fair value adjustment

Balance at end of year

Amounts recognised in profit of loss for investment properties

Rental revenue

Direct operating expenses from rental generating properties

Net (loss) / gain on disposal

Net (loss) / gain on revaluation

Changes in fair values of investment properties are recorded in other income.

31 July 2023
$’000

31 July 2022
$’000

205,324

3,120

(5,696)

(15)

(461)

(13,271)

189,001

18,646

(8,218)

(15)

(13,271)

(2,858)

203,595

1,054

(400)

154

(329)

1,250

205,324

17,606

(7,020)

154

1,250

11,990

Valuation
Method

Weighted
average cap
rate 2023

Weighted
average cap
rate 2022

31 July 2023
$’000

31 July 2022
$’000

Sub-regional and neighbourhood shopping
centres (Coffs Central, Port Central and
Kempsey Central)

Other properties

(a)

(b)

7.23%

6.51%

187,885

198,575

1,116

189,001

6,749

205,324

(a)

Fair value is based on capitalisation rates, which reflect vacancy rates, tenant profile, lease expiry, developing potential and the
underlying physical condition of the property. The higher the capitalisation rate, the lower the fair value.

Capitalisation rates used and the fair value adopted for each property at 31 July 2023 were based on external valuations adjusted
for any changes in assumptions, estimates or source data with reference to the properties current and forecasted performance,
vacancy levels, tenancy profile and recent market data.

(b) Current prices in an active market for properties of similar nature or recent prices of different nature in less active markets

Sensitivity analysis of sub-regional and neighbourhood shopping centre investment properties held at fair value

At 31 July 2023, a reduction of 0.5% in the capitalisation rate applied to each property would result in an additional gain of $14.819 million in
the consolidated statement of profit or loss and consolidated statement of other comprehensive income. Similarly, an increase of 0.5% in the
capitalisation rate of each property would result in an additional loss of $12.714 million in the consolidated statement of profit or loss and
consolidated statement of other comprehensive income.

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED

19. Non-Current Property, Plant and Equipment

21. Non-Current Right of use Assets

Year ended 31 July 2022

Opening net book amount

Additions

Disposals

Depreciation charge

Closing net book amount

At 31 July 2022

Cost

Accumulated depreciation

Net book amount

Year ended 31 July 2023

Opening net book amount

Additions

Disposals

Depreciation charge

Closing net book amount

At 31 July 2023

Cost

Accumulated depreciation

Net book amount

20. Non-Current Intangibles

As at

Goodwill

Brand names and patents

Balance at end of year

Motor vehicles
$’000

Furniture, fittings
& equipment
$’000

223

253

(47)

429

832

(403)

429

(76)

391

870

(479)

391

1,328

3,115

(2)

(461)

3,980

11,427

(7,447)

3,980

1,665

(9)

(733)

4,903

12,707

(7,804)

4,903

Total
$’000

1,551

3,368

(2)

(508)

4,409

12,259

(7,850)

4,409

1,703

(9)

(809)

5,294

13,577

(8,283)

5,294

31 July 2023
$’000

31 July 2022
$’000

2,383

1,327

3,710

2,383

1,375

3,758

Intangible assets, other than goodwill and brand names have finite useful lives. Goodwill and brand names have an indefinite useful life.
Goodwill and brand names are allocated to the Surf Hardware International business segment (“the cash-generating unit”).

The Group tests whether goodwill and brand names have suffered any impairment at each reporting period. The recoverable amount of the
cash-generating unit is determined based on either value-in-use calculations or the estimated fair value less costs to sell.

Goodwill, brand names and patents

The recoverable amount of the cash-generating unit is based on value-in-use of the Surf Hardware International business segment which is
calculated based on the present value of cash flow projections over a five year period with the period extending beyond four years extrapolated
using an estimated growth rate.

Five year projected cash flows in respect of the Surf Hardware International business segment are $20m. Key assumptions include: (a) 10%
discount rate; (b) 3% per annum projected net revenue growth rate; (c) 3% per annum increase in operating expenses; and (d) 3% terminal
growth rate. Based on these assumptions the Directors have determined that no impairment charge shall be recognised during the current
reporting period.

Year ended 31 July 2022
Opening net book amount
Additions
Lease modifications
Foreign exchange movements
Depreciation charge
Closing net book amount

At 31 July 2022

Cost

Accumulated depreciation

Net book amount

Year ended 31 July 2023

Opening net book amount

Additions

Lease modifications

Foreign exchange movements

Depreciation charge

Closing net book amount

At 31 July 2023
Cost

Accumulated depreciation

Net book amount

Land and buildings
$’000

Motor vehicles
$’000

Equipment
$’000

1,660
948
-
(3)
(996)
1,609

4,590

(2,981)

1,609

586

(917)

1,278

5,587

(4,309)

1,278

19
28
-
-
(18)
29

106

(77)

(19)

106

(96)

68
20
-
-
(13)
75

105

(30)

105

(60)

Total
$’000

1,747
996
-
3
(1,027)
1,713

4,801

(3,088)

1,713

586

(966)

1,333

5.798

(4.465)

1,333

Additional information regarding leases

The Group leases land and buildings for its offices and retail operations which have lease terms of between one and five years with, in some cases,
options to extend. On renewal, the terms of the leases are renegotiated. The Group also leases motor vehicles and equipment under agreements of
between one to five years.

Each lease generally imposes a restriction that, unless there is a contractual right for the Group to sublet the asset to another party, the right of use
asset can only be used by the Group.

The Group’s leases include extension and termination options which are exercisable by the Group. These clauses provide the Group opportunities to
manage leases in order to align with its strategies. The extension and termination options which were reasonably certain to be exercised are included
in the calculation of the right-to-use asset.

22. Derivatives

As at

Derivatives

Balance at end of year

31 July 2023
$’000
898

898

31 July 2022
$’000
-

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED
23. Deferred Tax Assets

As at

The balance comprises temporary differences attributable to:

31 July 2023
$’000

31 July 2022
$’000

Employee benefits

Accruals

Equities

Derivatives

Tax losses

Other

Net deferred tax assets

Movements:

Opening balance at 1 August

(Debited) / credited to profit or loss

Closing balance at 31 July

Deferred tax assets to be recovered within 12 months

Deferred tax assets to be recovered after 12 months

24. Other Non-Current Assets

As at

Other assets

25. Current Trade and Other Payables

Trade creditors

Other creditors and accruals

Balance at end of year

26. Current Borrowings

Bill payable – secured

Commercial advance facility - secured

Balance at end of year

Risk

The Group’s exposure to interest rate changes arising from current and
non-current borrowings is set out in note 2.

154

202

221

184

698

1,471

1,701

(230)

1,471

386

1,085

1,471

296

409

159

744

1,701

2,386

(685)

1,701

568

1,133

1,701

31 July 2023
$’000

31 July 2022
$’000

2,795

1,886

3,309

5,195

963

3,049

2,395

2,721

5,116

1,000

1,851

2,851

to the respective repayment dates. Alternatively, the Group believes it has
the ability to repay any outstanding debt under these facilities from excess
cash reserves, proceeds received from the disposal of assets or from cash
sourced or raised through the Group’s operating or financing activities.

Refinancing / Repayment

Security

The Group expects to renew or refinance current borrowing facilities on
normal commercial terms and rates that are acceptable to the Group prior

Information about the security relating to each of the secured liabilities
and the fair value of each of the borrowings is provided in note 30.

As at

27. Current Lease Liabilities

Lease liabilities

28. Current Tax Liabilities

Income tax payable

29. Current Provisions

Employee entitlements

Balance at end of year

31 July 2023
$’000

31 July 2022
$’000

868

812

1,346

2,010

1,207

30. Non-Current Borrowings

As at

Bills payable - secured

Risk

31 July 2023
$’000

94,310

31 July 2022
$’000

94,310

The Group’s exposure to interest rate changes arising from current and non-current borrowings is set out in note 2.

Security

Details of the security relating to each of the secured liabilities and further information on banks loans are set out below.

Total secured liabilities

The total secured liabilities (current and non-current) are as follows:

Bills payable – secured¹

Commercial advance facility – secured²

94,310

986

95,296

95,310

1,851

97,161

¹$94.310 million bill is secured against Port Central Shopping Centre, Coffs Central Shopping Centre, and Kempsey Central Shopping Centre (the “SC
properties”). The facility consists of two tranches, the first tranche is a non-revolving facility, has a facility limit of $76 million (fully drawn at 31 July
2023). The second tranche is a revolving facility, has a facility limit of $30 million. Interest on the outstanding principal of both tranches is charged
at BBSY plus 0.70%. At 31 July 2023 the current interest rate that applies to amounts advanced is 5.0374% p.a. The lender requires the Group and SC
properties to meet certain financial ratios at 31 July 2023: the SC properties must have a minimum interest coverage ratio of 1.75 times, the Group
must have a minimum interest coverage ratio of 2.25 times, the combined facility limit of the first and second tranches must not to exceed 55% of
the aggregate market value of the SC properties (based on the last borrower approval valuation of the SC properties) and the Group’s gearing ratio
must not exceed 50% and the Group must have a minimum weighted average lease expiry of 2.0 times. .

²$0.986 million commercial advance facility is held by Gowings SHI Pty Limited and secured by the assets of Gowings SHI Pty Limited, Fin Control
Systems Pty Ltd, Oz4u Holdings Pty Ltd, SHI Holdings Pty Ltd, Sunbum Technologies Pty Ltd, Surf Hardware International Pty Ltd, Surfing Hardware
International Holdings Pty Ltd and Surf Hardware International Asia Pty Ltd. The facility has a total facility limit of $2 million. At 31 July 2023 the
current interest rate that applies to amounts advanced is 11.02%.

As at

Financing Arrangements
Unrestricted access was available at balance date to the following lines of credit:

31 July 2023
$’000

31 July 2022
$’000

Total facilities

Secured bill facilities

Secured commercial advance facility

Used at balance date
Secured bill facilities

Secured commercial advance facility

Unused at balance date
Secured bill facilities¹

Secured commercial advance facility

106,000
2,000

108,000

94,310

986

95,296

11,690

1,014

12,704

107,000
2,000

109,000

95,310

1,851

97,161

11,690

149

11,839

¹As at 31 July 2023 $11.7m of the Group's secured bill facility was not available for draw down until SC properties interest coverage ratio was
demonstrated to return to 2 times and the Group interest coverage ration was demonstrated to return to 2.5 times. Please refer to Note 47 for
subsequent events.

Off-balance sheet

There are no off-balance sheet borrowings or related contingencies.

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED

31. Non-Current Lease Liability

34. Contributed Equity

As at

Lease liabilities

32. Non-Current Provisions

31 July 2023
$’000

559

31 July 2022
$’000

532

Share capital

Ordinary shares fully paid

53,311,125

11,781

Number of
shares 2023

Number of
shares 2022

2023
$’000

2022
$’000

Employee entitlements

301

321

33. Deferred Tax Liabilities

The balance comprises temporary differences attributable to:

Prepayments

Intangibles

Investment properties

Equities

Other

Net deferred tax liabilities

Movements:

Opening balance at 1 August

(Credited)/charged to profit or loss

Charged to equity

Closing balance at 31 July

Deferred tax liabilities to be settled within 12 months

Deferred tax liabilities to be settled after 12 months

100

315

17,443

5,094

958

23,910

26,508

(3,429)

831

23,910

100

23,810

23,910

109

315

21,322

4,110

652

26,508

25,163

919

426

26,508

108

26,400

26,508

Movements in ordinary share capital – for the year ended 31 July 2023

Date

Details

31/07/2022

Balance

Movements in ordinary share capital – for the year ended 31 July 2022

Date

Details

31/07/2021

Balance

11/08/2021

Share buy-back

24/09/2021

Share buy-back

06/01/2022

Share buy-back

14/02/2022

Share buy-back

06/06/2022

Share buy-back

07/06/2022

Share buy-back

Ordinary shares

Number of
shares

53,311,125

Number of
shares

53,624,983

(46,633)

(36,787)

(52,841)

(9,825)

(143,729)

(24,043)

53,311,125

Issue price per
share

$2.75

$3.00

$3.17

$2.97

$2.85

$2.80

$’000

11,781

$’000

12,693

(128)

(110)

(168)

(29)

(410)

(67)

11,781

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of
and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy is entitled
to one vote, and upon a poll each share is entitled to one vote.

Dividend Reinvestment Plan

The Dividend Reinvestment Plan may be offered to shareholders by Directors and allows shareholders to reinvest dividends into shares in the
Company. The Dividend Reinvestment Plan is suspended for the final dividend declared on 29 September 2023.

Deferred Employee Share Plan

The Deferred Employee Share Plan may be used as part of any incentive payments for all employees. For transaction cost reasons, where
possible shares bought back as part of the Company’s ongoing capital reduction program are recognised for this purpose rather than cancelled.

Options

There were no options on issue at the time of this report.

On-market share buy back

Nil shares were bought back during the year (2022: 313,858).

Capital risk management

The Company’s objective when managing capital is to safeguard the ability to continue as a going concern, so that continued returns to
shareholders and benefits for other stakeholders can be provided while maintaining an optimal capital structure.

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED
35. Reserves

As at

Capital profits reserve¹

Opening balance

Transfer from retained profits

Closing balance

Long term investment revaluation reserve²

Opening balance

Fair value adjustments on equities

- Equities

- Deferred tax applicable to fair value adjustments

- Transfer of losses on sale of equity instruments at fair value through
comprehensive income to retained profits, net of tax

Closing balance

Foreign currency translation reserve³

Opening balance

Exchange differences on translation of foreign operations

Closing balance

Hedging reserve - Cash flow hedges⁴

Opening balance

Changes in hedges held at fair value through other comprehensive income

•

Changes in fair value of cash flow hedges

Deferred tax applicable to fair value adjustments

Closing balance

Total reserves

31 July 2023
$’000

31 July 2022
$’000

36. Dividends

As at

Ordinary shares

90,503

9,590

1,794

(539)

1,041

11,886

216

488

704

975

(292)

683

90,503

8,504

1,420

(426)

9,590

144

216

2022 final dividend of 4.0 cents (2021: 4.0 cents interim) per share

2023 interim dividend of 3.0 cents (2022: 4.0 cents interim) per share

Total dividends declared

Dividends paid in cash

Dividends paid via Dividend Reinvestment Plan

31 July 2023
$’000

31 July 2022
$’000

2,133

1,599

3,732

2,142

2,139

4,281

Franked dividends declared and paid during the year were fully franked at the tax rate of 30% (2022: 30%).

Dividends declared after year end

Subsequent to year end the Directors have declared the payment of a final dividend of 3.0 cents per ordinary share fully franked based on tax
paid at 30%. The dividend is payable on 27 October 2023 out of retained profits at 31 July 2023.

The financial effect of the dividend declared subsequent to the reporting date has not been brought to account in the financial statements for
the year ended 31 July 2023 and will be recognised in subsequent financial reports.

Franked dividends

The franked portions of the final dividends declared after 31 July 2023 will be franked out of existing franking credits or out of franking credits
arising from the payment of income tax in the year ended 31 July 2023.

Franking credits available for subsequent financial years (tax paid basis)

4,760

5,158

The above amounts are based on the balance of the franking account at year end, adjusted for:

(a) franking credits that will arise from the payment of the current tax receivable;
(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.

103,776

100,309

37. Remuneration of Auditors

¹ The capital profits reserve is used to record pre-CGT profits.
² The long term investment revaluation reserve is used to record increments and decrements on equities held at fair value through other
comprehensive income.
³ The foreign currency translation reserve records exchange rate differences arising on translation differences on foreign controlled subsidiaries.
⁴ The Hedging reserve is used to recognise the effective portion of gains and losses on derivatives that are designated and qualify as cash flow
hedges.

During the year the following fees were paid or payable for services provided by William Buck the auditor of the company:

31 July 2023
$

31 July 2022
$

Audit services – William Buck

Audit and review – group

Audit and review – controlled entities

Other services – William Buck

Financial review

123,500

50,500

5,250

179,250

120,800

47,200

73,500

241,500

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED

38. Commitments For Expenditure

Capital commitments – Private equities

The Group has uncalled capital commitments of up to $3,205,000 (2022: $1,764,000) in relation to private equity and property fund investments
held at year end.

Capital commitments – Development properties

The Group has capital commitments of $nil (2022: $1,849,000) in relation to construction works on development properties at year end.

39. Related Parties

Directors

The names of persons who were Directors of Gowing Bros. Limited at any time during the financial year were J. E. Gowing, J. G. Parker, Prof.
J. West and S. J. Clancy.

Those persons that were also Directors during the year ended 31 July 2023.

Remuneration

Information on remuneration of Directors and other key management personnel is disclosed in the remuneration repot.

Directors and other key management personnel

Short-term employee benefits

Post-employment benefits

Long-term benefits

Detailed remuneration disclosures can be found in the remuneration report on pages 22 to 24.

31 July 2023
$

31 July 2022
$

487,475

60,074

4,499

552,048

491,701

54,196

4,705

550,602

Movement in shares

Key management person

J. E. Gowing*

J. G. Parker

Prof. J. West

S. J. Clancy

J. E. Gowing (James)

*Directly and indirectly

Shares held* at

(disposed) during

Shares held* at

(disposed) during

Shares held* at

Shares acquired/

31-Jul-21

No.

20,978,094

57,306

477,581

5,000

64,504

the year

No.

12,108

(42,851)

31-Jul-22

No.

20,990,202

57,306

434,730

5,000

64,504

the year

No.

3,546

31-Jul-23

No.

20,993,748

57,306

434,730

5,000

64,504

Other key management personnel did not hold shares in the Company.

Receivables and payables from Directors and Executives

Key management person

Transaction type

J. E. Gowing

Receivable – Audley Investments Pty Ltd

Payable – Gowings Whale Trust

Transactions with Key Management Personnel and Directors

Key management person

Transaction type

J. E. Gowing

Operational / marketing services

Associate director services

31 July 2023
$

55,196

(59,232)

31 July 2023
$

72,378

5,259

31 July 2022
$

72,300

39. Related Parties (Continued)

The sons of Mr J E Gowing provided operational services during the year on an employment basis totalling $72,378 (2022: $72,300), and
associate director services totalling $5,259 (2022: $nil).

Other related party transactions

Key management person

Transaction type

J. E. Gowing

Donations – Whale Trust

Professional fees – Audley Investments Pty Ltd

There were no other transactions with Directors and Director related entities and Executives.

40. Interests In Other Entities (Excluding Joint Ventures)

The Group’s principal subsidiaries and other interests are set out below:

31 July 2023
$

413,252

50,178

31 July 2022
$

559,623

Unless otherwise stated, subsidiaries and other interests listed below have share capital comprising of ordinary shares or ordinary units which
are held directly by the Group. The proportion of ownership interests held equals the voting rights held by the Group.

Entity Name

Pacific Coast Developments 357 Pty Ltd

Pacific Coast Developments 357 Fund

1868 Capital Pty Ltd

Pacific Coast Developments 112 Fund

Gowings SHI Pty Ltd

SHI Holdings Pty Ltd

Fin Control Systems Pty Ltd

Surfing Hardware International Holdings Pty Ltd

Surf Hardware International Asia Pty Ltd

Surf Hardware International Europe SARL

Surf Hardware International UK Ltd

OZ4U Holdings Pty Ltd

Sunbum Technologies Pty Ltd

Surfing Hardware International USA Inc.

Surf Hardware International USA Inc.

Surf Hardware International Hawaii Inc.

Surf Hardware International Japan KK

Surf Hardware International Pty Ltd

Surf Hardware International New Zealand Pty Ltd

Gowings Master Trust

1868 High Yield Trust

Gowings Life Sciences Trust

Gowing Bros Management Services Pty Ltd

Coastbeat Pty Ltd

Gowings Wholesale Property Fund

Coffs Central Pty Ltd

Coffs Central Sub-Trust

Port Central Pty Ltd

Port Central Sub-Trust

Kempsey Central Pty Ltd

Kempsey Central Sub-Trust

Country of
Incorporation

Ownership
Interest % 2023

Ownership
Interest % 2022

Australia

France

England

Australia

United States of America

Japan

Australia

New Zealand

Australia

100

99.9

100

99.9

100

99.9

100

99.9

100

No other interests in subsidiaries or other entities (excluding joint
ventures) were held by the Group in the 31 July 2023 financial year.

Significant Restrictions

Non-controlling interests in subsidiaries and other interests of the
Group are not material to the Group.

Other than certain assets pledged as security detailed in note 30, there
are no significant restrictions over the Group’s ability to access or use
assets, and settle liabilities, of the Group

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED
41. Interests in Joint Arrangements

44. Parent Entity Information

During the reporting period the Group realised it's 50% interest in the Joint Venture Regional Retail Property for $5.5 million with $1 million in
proveeds being used to repay the borrowings secured against this property.

The following information has been extracted from the books and records of the Company and has been prepared in accordance with Australian
Accounting Standards:

The Group’s interests in the assets employed in the joint operations are included in the consolidated statement of financial position, in
accordance with the accounting policy described in note 1(q), under the following classifications

Statement of Financial Position

31 July 2023
$’000

31 July 2022
$’000

31 July 2023
$’000

31 July 2022
$’000

Current assets

Cash and cash equivalents

Trade and other receivables

Total current assets

Non-current assets

Investment properties

Total non-current assets

Current share of assets employed in joint operation

Current liabilities

Trade and other payables

Borrowings

Total current liabilities

Current share of liabilities employed in joint operation

Net assets employed in joint operation

42. Share Based Payments

5,500

5,569

1,000

1,046

4,523

Assets

Current assets

Non-current assets

Total assets

Liabilities

Current liabilities

Non-current liabilities

Total liabilities

Net assets

Equity

Issued capital

Capital profits reserve

The Deferred Employee Share Plan has been in operation since 2006 which allows fully paid ordinary shares to be issued for no cash
consideration from shares held by the Plan. All Australian resident permanent employees and non-executive Directors are eligible to participate
in the scheme. Employees may elect not to participate in the scheme.

Shares are acquired on-market prior to the issue. Shares issued under the scheme may not be sold until the earlier of three years after issue or
cessation of employment of the Group. In all other respects the shares rank equally with other fully-paid ordinary shares on issue.

Options

Nil options were on issue at year end (2022: Nil).

43. Earnings Per Share

Long term investment revaluation reserve

Asset revaluation reserve

Retained earnings

Total equity

Statement of Profit or Loss and other Comprehensive Income

Net (loss) / profit after income tax

Total comprehensive income

Parent entity contractual commitments

The Company has no contractual commitments other than uncalled capital commitments for private equities and development properties as
noted in note 38 (2022: Uncalled capital commitments for private equities and development properties as noted in note 38).

Basic earnings per share (cents)

Diluted earnings per share (cents)

Weight average number of ordinary shares on issue

Net (loss) / profit after tax

(9.91)c

53,311,125

($5,285,000)

20.42c

53,488,979

$10,920,000

The Company has nil contingent liabilities at year end (2022: nil).

Parent entity guarantees in respect to debts of its subsidiaries

The Company has not entered into any guarantees in respect to debts of its subsidiaries at year end (2022: nil).

31 July 2023

31 July 2022

Parent entity contingent liabilities

14,764

295,556

310,320

2,091

118,431

120,522

189,798

11,781

90,503

12,290

683

74,541

189,798

(5,810)

3,382

12,613

309,901

322,514

4,960

120,556

125,516

196,998

11,781

90,503

9,590

85,124

196,998

9,366

994

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED
Gowing Bros. Limited shares are listed on the Australian Securities
Exchange.

The share register is maintained by Computershare Investor
Services Pty. Limited, Level 3, 60 Carrington Street, Sydney NSW
2000, Telephone 1300 855 080, Overseas callers +61 (0)2 8234 5000,
Facsimile + 61 (0)2 8234 5050

45. Reconcilation of Net Profit to Net Cash Inflow from Operating Activities

48. Other Information

31 July 2023
$’000

31 July 2022
$’000

Gowing Bros. Limited is incorporated and domiciled in New South
Wales. The registered office, and principal place of business, is Suite
303, 35-61 Harbour Drive, Coffs Harbour, NSW, 2450.

Phone:
Facsimile:
Email:
Website:

61 2 9264 6321
61 2 9264 6240
info@gowings.com
www.gowings.com

(Loss) / profit from ordinary activities after income tax
Amortisation of lease incentives
Depreciation and amortisation
Net loss / (gain) on sale of private equities
Net loss / (gain) on the sale of investment properties
Net gain on the sale of development properties
Revaluation of investment properties to fair value
Revaluation of private equities to fair value
Revaluation of derivatives to fair value
Increase in receivables
Decrease / (increase) in prepayments
Decrease / (increase) in inventories
Decreases in income taxes
Decrease in provisions
Increase in trade creditors and accruals

Net cash inflows / (outflows) from operating activities

(5,285)
461
1,825
86
15
(3,408)
13,271
(380)
77
(20)
110
369
(6,063)
(415)
833

1,476

46. Changes in Liabilities Arising from Financing Activities

Liabilities from
financing activities

Opening balance –
31 July 2022

Cash flows from
financing activities

Gain on disposal

Borrowings¹

Lease liabilities²

97,161

1,878

(1,888)³

(1,336)

Additions
and lease
modifications

885

¹ Relates to current and non-current borrowings.
² Relates to current and non-current lease liabilities.
³ Relates to the following cash flows from financing activities for the year ended 31 July 2023:

- Proceeds from borrowings

- Repayments of borrowings

47. Subsequent Events

The following subsequent events have occurred subsequent to the end of the financial year:

10,920
329
1,721
(3,769)
(154)
-
(1,250)
1,018
-
(463)
(1,549)
(4,675)
(1,127)
(2,027)
430

(596)

Closing balance –
31 July 2023

95,273

1,427

(1,888)

Post year end on the 1 August 2023 the Group has accepted
the takeover bid for the Group’s equity investment in DICE
Molecules from Ely Lily at USD $48 per share totalling USD
$4,320,000 received on the 17 August 2023 which is equivalent to
approximately AUD $6,766,000.

Following the passing of Chairman and Non-Executive Director
Jonathan West, the Board of Directors has reviewed the Board
composition and has resolved to:
Appoint John Gowing as the Company’s Executive Chairman.
Appoint James Gowing as Executive Director.Appoint James
Davis as Non-Executive Director.

Subsequent the to the end of the financial year, in September
2023, the Group varied the facility limit (“the amendment”) of

its secured bills facility held with the Commonwealth Bank of
Australia (“the facility”). The facility consists of two tranches
including the non-revolving facility which has a facility limit
of $76 million (fully drawn down as at 31 July 2023) and the
revolving facility which has a facility limit of $30 million ($18.31
million drawn down as at 31 July 2023). The amendment had
the effect of reducing the facility limit of the revolving facility
from $30 million to $20.415 million. The total facility limit on
the facility has therefore reduced from $106 million to $96.415
million. There we no other changes to the facility as a result of
the amendment.

The Group has announced a dividend since the end of the year
which has been included in Note 36.

No other matters or circumstances have arisen which has significantly affected, or may significantly affect, the operations of the Group, the results
of those operations or the state of affairs of the Group in future financial years.

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED

Directors’ Declaration

In the directors’ opinion:
(a)

the consolidated financial statements and notes set out on pages 27 to 61 are in accordance with the
Corporations Act 2001, including:
(i)

complying with Accounting Standards and the Corporations Regulations 2001 and other mandatory professional reporting
requirements; and

(i) giving a true and fair view of the Group’s financial position as at 31 July 2023 and of its performance for the financial year

ended on that date; and

Gowing Bros. Limited

Auditor’s independence declaration under Section 307C of the
Corporations Act 2001 to the directors

(b)

there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

I declare that, to the best of our knowledge and belief during the year ended 31 July 2023 there have been:

2. The notes to the consolidated financial statements include a statement of compliance with International Financial Reporting Standards.

3. The directors have been given the declarations by the chief executive officer and chief financial officer for the year ended 31 July 2023

required by section 295A of the Corporations Act 2001.

This declaration is made in accordance with a resolution of the directors.

— no contraventions of the auditor independence requirements as set out in the obligations of the

Corporations Act 2001 in relation to the audit; and

— no contraventions of any applicable code of professional conduct in relation to the audit, including APES

110 “Code of Ethics for Professional Accountants (Including Independence Standards)”.

J. E. Gowing
Executive Chairman

Coffs Harbour, NSW
26 October 2023

Yours faithfully

William Buck
Accountants & Advisors
ABN 16 021 300 521

L. E. Tutt
Partner
Sydney, 26 October 2023

Level 29, 66 Goulburn Street, Sydney NSW 2000
Level 7, 3 Horwood Place, Parramatta NSW 2150

+61 2 8263 4000

nsw.info@williambuck.com
williambuck.com.au

William Buck is an association of firms, each trading under the name of William Buck
across Australia and New Zealand with affiliated offices worldwide.
Liability limited by a scheme approved under Professional Standards Legislation.

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITEDGowing Bros. Limited
Independent auditor’s report to members

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of Gowing Bros. Limited (the Company and its subsidiaries [the
Group]), which comprises the consolidated statement of financial position as at 31 July 2023, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies and other explanatory
information, and the directors’ declaration.

In our opinion, the accompanying financial report of the Group, is in accordance with the Corporations Act
2001, including:

i. giving a true and fair view of the Group’s financial position as at 31 July 2023 and of its financial

performance for the year ended on that date; and

ii. complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional 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 also fulfilled
our other ethical responsibilities in accordance with the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.

Level 29, 66 Goulburn Street, Sydney NSW 2000
Level 7, 3 Horwood Place, Parramatta NSW 2150

+61 2 8263 4000

nsw.info@williambuck.com
williambuck.com.au

William Buck is an association of firms, each trading under the name of William Buck
across Australia and New Zealand with affiliated offices worldwide.

Liability limited by a scheme approved under Professional Standards Legislation.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.

KEY AUDIT MATTER

Valuation of subregional and neighbourhood
shopping centre investment properties
Refer also to note 18

The Group has subregional and neighbourhood
shopping centre investment properties as at 31
July 2023 totalling $189 million.

The valuation of the Group’s investment properties
requires significant judgement and the use of
subjective assumptions and estimates in
determining fair value, including selecting the
appropriate valuation methodology, market rental
rates, vacancy allowances and capitalisation rates.

Due to the significant value attached to the
investment properties in Group’s consolidated
financial statements, level of significant
judgements and assumptions applied to determine
the fair value of the Group’s investment properties,
this is considered to be a key audit matter.

How our audit addressed it

We have performed procedures to respond to the
risk of misstatement of investment properties,
these procedures included:
— Assessing the competence, capability,

experience, independence and objectivity of
external valuers appointed by management.
— Evaluating the valuation methodology applied.
— Testing the reliability and reasonableness of
inputs to underlying contracts and supporting
documentation.

— Testing the appropriateness of assumptions and
estimates with reference to historical rates and
results, available market data, market conditions
and other supporting documentation.

— Checking mathematical accuracy of valuation

calculations.

We have also assessed the adequacy of the
Group’s disclosures with relevance to Australian
Accounting Standards.

KEY AUDIT MATTER

Valuation of Unlisted Equities
Refer also to notes 15 and 16

How our audit addressed it

The Group has investments of $13.5 million in a
number of unlisted equities at 31 July 2023, which
have been included in the Group’s consolidated
statement of financial position.

We have performed procedures to respond to the
risk of misstatement of unlisted equities, these
procedures included:
— Assessing the valuation methodology applied by

Management assesses the value of these
investments at least annually, using various
valuation techniques, such as recent arm’s length
transactions, reference to other instruments that
are of a similar nature and other market evidence.

Due to the significant judgement involved in
assessing the valuation of these assets, this is
considered a key audit matter.

management.

— Reviewing the valuation inputs including

evidence of recent arm’s length transactions and
agreeing these transactions to external sources.

— Reviewing the market data and other financial

information.

We have also assessed the adequacy of the
Group’s disclosures with relevance to Australian
Accounting Standards.

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED

Other Information

The directors are responsible for the other information. The other information comprises the information in
the Group’s annual report for the year ended 31 July 2023 but does not include the financial report and the
auditor’s report thereon.

Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted
in accordance with the Australian Auditing Standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of this financial report.

A further description of our responsibilities for the audit of these financial statements 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 independent auditor’s report.

Report on the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 22 to 24 of the directors’ report for the year
ended 31 July 2023.

In our opinion, the Remuneration Report of Gowing Bros. Limited, for the year ended 31 July 2023,
complies with section 300A of the Corporations Act 2001.

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.

Yours faithfully

William Buck
Accountants & Advisors
ABN 16 021 300 521

L. E. Tutt
Partner
Sydney, 26 October 2023

155th ANNUAL REPORT 2023 I Year ended 31 July 2023155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTUREGOWING BROS. LIMITED

Issues to Shareholders Since 19 September 1985

Date

31/10/1985

30/04/1986

31/10/1986

16/03/1987

30/04/1987

30/04/1988

31/10/1988

30/04/1989

16/11/1989

31/10/1990

31/10/1991

30/04/1992

31/10/1992

29/10/1993

29/04/1994

28/04/1995

03/10/1995

31/10/1995

26/04/1996

30/10/1996

25/04/1997

15/05/1997

31/10/1997

30/04/1998

03/11/1998

28/04/1999

18/11/1999

28/04/2000

27/10/2000

27/04/2001

19/10/2001

18/12/2001

22/04/2002

25/10/2002

18/12/2002

24/04/2003

24/10/2003

23/04/2004

25/10/2004

22/04/2005

17/07/2009

05/11/2010

17/12/2010

05/11/2015

13/11/2018

30/04/2019

Particulars

Bonus issue in lieu

1 for 2 Bonus issue

Bonus issue in lieu

Dividend Re-investment

Special Scrip dividend

Dividend Re-investment

1 for 10 Bonus issue

1 for 20 Bonus issue

Dividend Re-investment

Bonus in Lieu Share Plan

1 for 10 Bonus issue

Dividend Re-investment

Bonus in Lieu Share Plan

Dividend Re-investment

Bonus in Lieu Share Plan

Dividend Re-investment

Bonus in Lieu Share Plan

Dividend Re-investment

Bonus in Lieu Share Plan

2 for 1 Share Split

Dividend Re-investment

Bonus in Lieu Share Plan

Dividend Re-investment

Bonus in Lieu Share Plan

Dividend Re-investment

Bonus in Lieu Share Plan

Dividend Re-investment

Bonus in Lieu Share Plan

Dividend Re-investment

Bonus in Lieu Share Plan

Dividend Re-investment

Bonus in Lieu Share Plan

Dividend Re-investment

In Specie Distribution

Dividend Re-investment

Bonus in Lieu Share Plan

Dividend Re-investment

Bonus in Lieu Share Plan

Dividend Re-investment

Bonus in Lieu Share Plan

Dividend Re-investment

1 for 8 Rights issue

1 for 10 Bonus issue

Dividend Re-investment

Issued From

Asset Revaluation reserve

Accumulated profits

Share Premium – Special Dividend Reserve

Share Premium Reserve

Accumulated profits

Share Premium Reserve

Accumulated profits

Share Premium Reserve

Accumulated profits

Share Premium Reserve

Accumulated profits

Share Premium Reserve

Accumulated profits

Share Premium Reserve

Accumulated profits

Share Premium Reserve

Accumulated profits

Share Premium Reserve

Accumulated profits

G Retail Ltd shares issued on listing

Accumulated profits

Share capital

Accumulated profits

Issue Price $

Go North

2.50

3.70

3.75

4.35

3.75

3.80

3.60

3.50

2.60

3.00

2.90

3.10

4.50

2.60

2.35

2.10

1.90

1.95

1.80

2.36

1.95

1.90

1.80

1.95

1.90

2.40

2.55

2.70

2.87

2.42

2.20

2.77

2.52

1% is more
than a drop in
the ocean.

Australian Environment Pioneers
Established 1868

G O W I N G B R O S . LT D (ASX : G O W )

155th ANNUAL REPORT 2023 I Year ended 31 July 2023GOWING BROS. LIMITED155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTURE
70

155th ANNUAL REPORT 2023 I Year ended 31 July 2023INVESTING TOGETHER FOR A SECURE FUTURE