N1 Holdings Limited
ACN 609 268 279
Annual Report - 30 June 2023
N1 Holdings Limited
Corporate directory
30 June 2023
Directors
Ren Hor Wong, Executive Chairman, CEO
Jia Penny He, Executive Director, CFO
Frank Ganis, Independent Non-Executive Director
David Holmes, Independent Non-Executive Director
Company secretary
Anand Sundaraj
Registered office
Share register
Auditor
Solicitors
Suite 502, 77 King Street Sydney NSW 2000
+61 2 92626262
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000
SW Audit (formerly ShineWing Australia)
Level 7, Aurora Place, 88 Phillip Street
Sydney NSW 2000
Sundaraj & Ker
Level 31, 264 George Street
Sydney NSW 2000
Stock exchange listing
N1 Holdings Limited shares are listed on the Australian Securities Exchange (ASX
code: N1H)
Corporate Governance Statement N1 Holdings Limited and the board are committed to achieving and demonstrating
the appropriate standards of corporate governance for an entity the size and stage of
development of the company. N1 Holdings Limited has reviewed its corporate
governance practices against
the Corporate Governance Principles and
Recommendations (4th edition) published by the ASX Corporate Governance
Council. The 2023 corporate governance statement reflects
the corporate
governance practices in place during the financial year ended 30 June 2023. The
2023 corporate governance statement was approved by the board on 26 September
2023. A description of the Group's current corporate governance practices is set out
in the Group's corporate governance statement which can be viewed at:
http://www.n1holdings.com.au/
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N1 Holdings Limited
Corporate directory
30 June 2023
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N1 Holdings Limited
Corporate directory
30 June 2023
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N1 Holdings Limited
Corporate directory
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N1 Holdings Limited
Contents
30 June 2023
Directors' report
Auditor's independence declaration
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors' declaration
Independent auditor's report to the members of N1 Holdings Limited
Shareholder information
General information
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17
18
19
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22
60
61
65
The consolidated financial statements cover N1 Holdings Limited as a Group consisting of N1 Holdings Limited and the
entities it controlled at the end of, or during, the year. The consolidated financial statements are presented in Australian
dollars, which is N1 Holdings Limited's functional and presentation currency.
N1 Holdings Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered
office and principal place of business is:
Suite 502, 77 King Street
Sydney NSW 2000
A description of the nature of the Group's operations and its principal activities are included in the directors' report, which
is not part of the consolidated financial statements.
The consolidated financial statements were authorised for issue, in accordance with a resolution of directors, on 26
September 2023. The directors have the power to amend and reissue the consolidated financial statements.
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N1 Holdings Limited
Directors' report
30 June 2023
The directors present their report, together with the consolidated financial statements, on the consolidated entity (referred
to hereafter as the Group) consisting of N1 Holdings Limited (referred to hereafter as the Company or N1) and the entities
it controlled at the end of, or during, the year ended 30 June 2023.
Dividends
Dividends paid, recommended or declared during the financial year are $202,528 (2022: $nil).
commercial lending business;
Principal activities
During the financial year the principal continuing activities of the Group consisted of:
●
● mortgage broking services;
●
● migration services; and
●
real estate property sale and management services.
advisory, fund management and trustee services;
Review of operations
During FY23, the Group generated revenue of $13.99m (FY22: restated $10.61m), which represents a growth of 31.9%
to revenue in FY22 and delivered a net profit after tax of $340,945 (FY22: restated $697,067). Normalised EBITDA of the
Group is $1.06m (FY22: restated $1.43m).
Profit before income tax
Add: Interest expense – Corporate**
Add: Depreciation and amortisation
Add: Goodwill impairment resulting from sale of rent roll***
Normalised EBITDA
2023
$
109,767
181,766
440,606
329,975
1,062,114
2022
(Restated)
$
697,067
284,656
449,675
-
1,431,398
* FY22 Comparatives are restated. Please refer to note 1 of the report for detailed information.
** Interest expense and interest income from commercial loan receivable are still included in the EBITDA. The EBITDA
only excludes the interest expenses relating to the corporate loans, bank loans for realty rent roll as well as interest
expenses in relation to AASB 16 Leases.
*** On 10 March 2023, the Company sold its rent roll asset and discontinued its associated property management
business, which has created a once off impairment on Goodwill of $329,975.
During FY23, the Group’s Commercial lending business continued to be the major revenue generator, accounting for
84.35% of the Group’s total revenue. A complete breakdown of the Group’s revenue for the period is as the follows:
●
Commercial lending (including the management fee income from the Funds under management) revenue was
$11,804,622, which equals to 84.35% of the Group’s revenue. This is an increase of 4.35% over the prior
period (FY22: restated $8,488,460).
● Mortgage broking revenue (including trail commissions) was $1,347,310, which equals to 9.63% of the Group’s
revenue;
Advisory service revenue was $359,000, which equals to 2.57% of the Group’s revenue;
Real estate business revenue was $423,828, which equals to 3.03% of the Group’s revenue; and
●
●
● Migration services revenue was $58,814, which equals to 0.42% of the Group’s revenue.
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N1 Holdings Limited
Directors' report
30 June 2023
Throughout FY23, the Group has strengthened its position in the market as a property-backed SME lender and mortgage
fund investment manager by achieving 31.9% revenue growth to $13.99m compared to same period last financial year
whilst maintained positive EBITDA and profitability amid surge of cost of fund resulting from the RBA rate rises from historic
low of 0.1%. The real estate market and its participants including, but not limited to, lenders and borrowers, have felt the
impact and shift in sentiment.
By the end of FY23, the Group has access to and manages over $112 million in committed lending capacity, which consists
of approximately $25 million of balance sheet capital raised from private debt, $65 million under debt facilities and
approximately $22 million of mortgage funds under management. (Please note: the mortgage funds are not consolidated
into the consolidated financial statements. These mortgage funds are managed by N1 Venture Pty Ltd, a 100% owned
subsidiary of N1H). The Group has sustained its growth despite the aggressive rise in the cost of funding and associated
shift in market sentiment.
Profit of the Group is down by 51% to $340,945 due to the goodwill impairment resulting from the Company’s divestment
of the rent roll asset and discontinuance of the associated property management business as well as the abovementioned
increase in the cost of funding. The impairment is a temporary setback that, in the long term, will result a more streamlined
business that management considers will position the Company for future growth.
Throughout the increase rate tightening cycle, the Group did not pass on a single rate rise to its back book of loan
receivables and maintained profitability. Whilst future performance may be uncertain due to, amongst other things,
upcoming interest rate decisions of the RBA, the Company’s management is confident that its current strategy has
resilience and scalability of the Company’s business model. Additionally, by not passing on rate rises to the Company’s
back book, the Company has absorbed increase in the cost of funding on our pool of capital, yet we manage to gain a
spot in the profitable territory.
In addition, the Group has maintained steady revenue stream from its Mortgage broking and Mortgage Management
business, which forms the Group’s defensive strategy and assists in customer stickiness by generating cross-sale
opportunities to our existing client database.
In summary, the Group has evolved to become a private debt manager, with well-built risk management infrastructure to
be able to attract and deploy capital efficiently via property-backed transactions, meanwhile possess a defensive buffer
against market volatility via mortgage broking and mortgage management business, that is complementary to each other.
Our growth has demonstrated the scalability of the business model, proven with consecutive periods of record revenue
growth and profitability.
Further to challenges mentioned above, the Group seeks to provide comments on its material business risks that may
affect the financial performance of the Group and its ability to continue generating revenue for future years, including risks
which are not directly within the Group's control. The material business risks include:
Compliance risk
The Company is required to comply with various laws, regulations, industry standards, licence conditions and internal
policies that are applicable to its business activities. The Company is exposed to risks of failure to act in accordance with
all the requirements.
Key actions: The Company maintains a robust internal control and governance framework by conducting ongoing reviews
and compliance risk assessments, utilising internal and external education as well as working closely with external
consultants to ensure continuing compliance.
Credit risk
The core business of the Company is to lend commercial loans to borrowers. There is a risk of being unable to recoup the
capital in default loans, which may be caused by deficiency in collateral value, adverse market sentiment or other
unforeseen circumstances.
Key actions: The Company applies a disciplined execution of its comprehensive credit policy guideline with strong focus
on the strength of collateral as well as overall credit history of borrowers and guarantors. The short term nature of our loan
product also allows the Company to undertake regular reviews and adjustments of pricing and valuation.
Liquidity and funding risk
The continuity and resilience of the Company’s funding sources, and capital liquidity is crucial for its business activities.
The timing mismatch between the disbursement and repayment of funding may impact the Company’s capacity to lend
and may subsequently impact the Company’s financial performance.
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N1 Holdings Limited
Directors' report
30 June 2023
Key actions: The Company focuses on developing a set of diversified funding sources to divest from relying solely on a
single set of funding sources.
Interest rate movements risk
The Company relies on funding sources that are subject to interest rates movements, which directly impact on the cost of
funds.
Key actions: The Company ensures viable lending rates that are aligned to market sentiment. Meanwhile the Company
continues to limit exposure to interest rate fluctuations by sourcing funding that provides stability in cost.
Market risk
The Company’s business is subject to the macroeconomic impacts including across multiple segments of the market,
namely, the property market, the lending market and Small and Medium Enterprises (SME) business sentiment.
Key actions: The Company mitigates the risks through the monitoring of key risk indicators and market conditions and
conducting regular reviews of current exposures, lending parameters and pricing to enhance its business capabilities.
Financial crime and fraud risks
Financial crime has devastating human impacts. Accordingly, the Company has full awareness of the importance of
protecting its customers, the community and the integrity of the financial system. The Company is also cognisant of the
heightened risks caused by increasingly sophisticated technologies used by criminals targeting financial systems and
conducting fraud.
Key actions: The Company continues to work closely with experts to develop a set of monitoring systems that aim to
minimise the risks of financial crime and fraud. Meanwhile, the Company provides continuous education and training for
staff and business partners focusing on how to detect and deter risk early in the process.
Cybersecurity risks
A cyber-attack on the Company can significantly disrupt its operations and compromise customer data privacy. Cyber
criminals are becoming increasingly sophisticated, taking advantage of the adoption of the internet and remote working.
Key actions: The Company continues to educate staff and business partners on cybercrime risks and enhances the
management of third parties to better understand and mitigate risks associated in digital communications. The company
follows protocol by providers such as Amazon Web Services and Google. The Company also makes use of local server,
not relying solely on web cloud settings.
Climate change and social risks
Frequent and severe weather conditions in climate patterns in Australian major cities may impact the Company’s borrowers
and clients. Certain climate and social events might result in impairment of collateral valuation.
Key actions: The Company consistently develops understanding of climate change and social risks exposures across our
existing loan portfolio and scrutinise nature of lending scenarios that might be exposed to such risks and adopt a prudent
approach.
Review of Financial Position
The Group has a net asset position of $591,663 as at 30 June 2023 (restated $153,246 as at 30 June 2022).
At 30 June 2023, the Group’s current assets were $87,491,974 and it’s current liabilities were $25,550,095. Non-current
assets decreased by $965,216 to $2,724,824 (restated $3,690,040 as at 30 June 2022) and non-current liabilities
increased by $11,663,742 to $64,075,040 (restated $52,411,298 at 30 June 2022).
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the Group during the financial year.
Matters subsequent to the end of the financial year
On 7 September 2023, the Group has received commitments for an additional $10 million in debt capital.
No other matters or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly affect
the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
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N1 Holdings Limited
Directors' report
30 June 2023
Likely developments and expected results of operations
Information on likely developments in the operations of the Group and the expected results of operations have not been
included in this report because the directors believe it would be likely to result in unreasonable prejudice to the Group.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
Shares under option
There were no unissued ordinary shares of N1 Holdings Limited under option outstanding at the date of this report.
Shares issued on the exercise of options
There were no ordinary shares of N1 Holdings Limited issued on the exercise of options during the year ended 30 June
2023 and up to the date of this report.
Indemnity and insurance of officers
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a
director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors and executives of
the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
Indemnity 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.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
Non-audit services
There were no non-audit services provided during the financial year by the auditor.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this directors' report. Ms Yang (Bessie) Zhang is the lead audit partner of the Company’s auditor, SW
Audit.
Directors
The following persons were directors of N1 Holdings Limited during the whole of the financial year and up to the date of
this report, unless otherwise stated:
Mr Ren Hor Wong (Executive Chairman, CEO, appointed 24 November 2015);
Ms Jia Penny He (Executive Director, CFO, appointed 24 November 2015);
Mr David Holmes (Independent Non-executive Director, appointed 15 January 2019); and
Mr Frank Ganis (Independent Non-executive Director, appointed 1 September 2020).
Company Secretary
Mr Anand Sundaraj (Company Secretary, appointed 24 November 2015)
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N1 Holdings Limited
Directors' report
30 June 2023
Mr Ren Hor Wong (Executive Chairman, CEO)
Qualifications, experience
and special responsibilities
Mr Wong is the founder, Executive Chairman and Chief Executive Officer of the
Company.
Mr Wong has been responsible for developing the Company’s business strategy
and expanding its business into Asia Pacific.
Prior to establishing the Company, Mr Wong had, over a span of 6 years, applied
his entrepreneurial and management skills in industries ranging from courier
services, printing services and real estate. He has previously founded and
successfully
including Copiko Printing,
businesses
Sydneymove.com.au and Packers Unpackers.
Mr Wong holds a Bachelor of Engineering with Honours from University of New
South Wales.
various
exited
Interest in shares and
options in the Company
(Shares and Options,
respectively)
Directorships held in other
listed entities during the
three years prior to the
current year
50,298,357 Shares
None
Ms Jia Penny He (Executive Director, CFO)
Qualifications, experience
and special responsibilities
Ms He is a Fellow of Certified Practising Accountant (FCPA) with over 15 years
combined industry experience in accounting, financial planning and mortgage
broking.
Ms He joined the Group in May 2014 as the Accounting and Tax Adviser and
Principal Financial Planner. Ms He was subsequently appointed as the Company’s
Chief Financial Officer. Her current role within the Company includes all financial
management, tax and reporting functions of the business.
Prior to joining the Company, Ms He served as an executive for Cabot Square
Chartered Accountants from July 2006 to May 2014.
Ms He holds a Master of Accounting degree from Macquarie University and is also
an ATO registered tax agent holding a Public Practice Certificate.
Interest in Shares and
Options
Directorships held in other
listed entities during the
three years prior to the
current year
709,468 Shares
None
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N1 Holdings Limited
Directors' report
30 June 2023
Mr David Holmes (Independent Non-Executive Director)
Qualifications, experience and
special responsibilities
Mr Holmes has over 32 years’ experience in the financial services industry having
held senior roles in the UK and Australia. He was Head of Mortgage Credit for
Citibank UK before becoming COO at Preferred Mortgages, one of the first non-
conforming lenders in the UK. In August 2000 David moved to Australia and was
one of the founding Executives at Pepper Money. While at Pepper Money he served
as COO and Global Head of Credit with responsibility for the establishment and
maintenance of credit polices throughout Australia, Ireland and South Korea. David
was instrumental in Pepper Money gaining warehouse funding facilities from three
of the major banks in Australia.
Mr Holmes holds a Bachelor of Arts (with Honours) from University of Warwick.
Interest in Shares and Options
Nil
Directorships held in other
listed entities during the three
years prior to the current year
None
Mr Frank Ganis (Independent Non-Executive Director)
Qualifications, experience and
special responsibilities
Mr Ganis has over 40 years’ domestic and international experience in banking and
finance with an extensive background and deep knowledge of financial services.
He is recognised as a pioneer and influential industry leader in Australia.
Prior to retirement from full time executive work in 2017, Mr Ganis spent 28 years
at Macquarie Group including 17 years as an Executive Director. In addition to his
executive responsibilities, Mr Ganis also fulfilled a broad range of board and chair
roles for a number of Macquarie’s domestic and international subsidiaries and was
a member of various regulatory and credit committees.
Frank currently services as a board member for several public and private
companies and various industry advisory roles.
Frank is a Fellow of the Australian Property Institute (FAPI) and a Graduate of the
Australian Institute of Company Directors (GAICD).
Interest in Shares and Options
430,000 Shares
in other
Directorships held
listed entities during the three
years prior to the current year
Former Non-Executive Director – Yellow Brick Road Holdings Limited (ASX: YBR)
Mr Anand Sundaraj (Company Secretary)
Qualifications, experience and
special responsibilities
Anand Sundaraj is a corporate lawyer with over 20 years’ experience. He is a
principal of Sydney-based law firm, Sundaraj & Ker. Mr Sundaraj specialises in
advising on mergers and acquisitions and capital raisings for both publicly listed and
privately held entities. He also advises on funds management and general securities
law matters including listing rule compliance and corporate governance. Mr
Sundaraj has worked for a number of pre-eminent law firms including Herbert Smith
Freehills, King & Wood Mallesons, and Allen & Overy, as well as global investment
bank, Credit Suisse AG.
Mr Sundaraj holds a Bachelor of Laws (with Honours) and a Bachelor of Science
from Monash University and is admitted as a solicitor of the Supreme Courts of New
South Wales and Victoria.
Interest in Shares and Options
10,000 Shares
Directorships held in other
listed entities during the three
years prior to the current year
None
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N1 Holdings Limited
Directors' report
30 June 2023
Meetings of directors
The number of meetings of the Company's Board of Directors ('the Board') held during the year ended 30 June 2023,
and the number of meetings attended by each director were:
Ren Hor Wong
Jia Penny He
David Holmes
Frank Ganis
Remuneration report
Remuneration policy
Number
eligible to
attend
Number
attended
5
5
5
5
5
5
3
5
The remuneration policy of the Company has been designed to align key management personnel (KMP) objectives with
shareholder and business objectives by providing a fixed remuneration component and offering specific long-term
incentives based on key performance in areas affecting the Group‘s financial results. The Board believes the remuneration
policy to be appropriate and effective in its ability to attract and retain the high-quality KMP to run and manage the Group,
as well as create goal congruence between Directors, executives and Shareholders.
The Board’s policy for determining the nature and amount of remuneration for KMP of the Group is as follows:
— The remuneration policy is to be developed by the Board (having regard to the Company’s earnings and the
consequences of the Company’s performance on shareholder wealth, in each case in the most recent financial year
and previous 4 financial years) and the Board may seek advice on the policy from independent external consultants
at its discretion.
— All KMP receive a base salary (which is based on factors such as length of service and experience), superannuation,
fringe benefits options and performance incentives.
— Performance incentives are generally only paid once and conditional on key performance indicators (KPIs) having
been met.
—
Incentives paid in the form of options or rights are intended to align the interests of the Directors and the Company
with those of the Shareholders. In this regard, KMP are prohibited from limiting the risk attached to those instruments
by use of derivatives or other means.
— The Board reviews KMP packages annually by reference to the Group’s performance, executive performance and
comparable information from industry sectors.
The performance of KMP is measured against criteria agreed annually with each executive and is based predominantly
on the forecast growth of the Group’s profits and Shareholders’ value. All bonuses and incentives must be linked to
predetermined performance criteria. The Board may, however, exercise its discretion in relation to approving incentives,
bonuses and options, and can recommend changes. Any change must be justified by reference to measurable
performance criteria. The policy is designed to attract the highest calibre of executives and reward them for performance
results leading to long-term growth in Shareholder wealth.
KMP receive, at a minimum, the superannuation guarantee contribution required by law, which is currently 10.5% of the
individual's ordinary earnings. Some individuals, however, have chosen to sacrifice part of their salary to increase
payments towards superannuation.
The Board's policy is to remunerate non-executive Directors at market rates for time, commitment and responsibilities.
The Board determines payments to the non-executive Directors and reviews their remuneration annually, based on market
practice, duties and accountability. Independent external advice is sought when required. Fees that can be paid to a non-
executive Director is contained in that Directors’ consultancy service agreement.
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N1 Holdings Limited
Directors' report
30 June 2023
Remuneration structure
There have been no significant changes after the Company’s listing on ASX. The table below summarises the
remuneration components of KMP of the Group.
Remuneration
component
Fixed
remuneration
Short-term
incentive
Long-term
incentive
Reward Type
Purpose
Link to performance
Salaries,
superannuation
and other fixed
benefits
Bonus paid in
cash
Share options
To provide competitive
fixed remuneration set with
reference to role, market
and experience
Rewards executives for
their contribution to
achievement of Group
outcome
Rewards executives for
their contribution to the
creation of shareholder
value over the longer term
Company and individual
performance are
considered during the
annual review
Revenue of the Group
Vesting of the awards is
dependent on absolute
total Shareholder return in
addition to continuous
service vesting conditions.
Performance-based Remuneration
The KPIs are set annually, with a certain level of consultation with KMP. The measures are specifically tailored to the area
each individual involved is in and has a level of control over. The KPIs target areas that the Board believes hold greater
potential for Group expansion and profit covering financial and non-financial as well as short and long-term goals. The
level set for each KPI is based on budgeted figures for the Group and respective industry standards.
Performance in relation to the KPIs is assessed annually, with bonuses being awarded depending on the number and
deemed difficulty of the KPIs achieved. Following the assessment, the KPIs are reviewed by the remuneration committee
in light of the desired and actual outcomes, and their efficiency is assessed in relation to achieving the Group’s goals and
shareholder value, before the KPIs are set for the following year.
In determining whether or not a KPI has been achieved, the Company bases the assessment on audited figures, however,
where the KPI involves comparison of the Group or a division within the Group to the market, independent reports are
obtained from other research organisations.
Relationship between remuneration policy and Company performance
The remuneration policy has been tailored to increase goal congruence between shareholders, directors and executives.
Two methods have been applied to achieve this aim, the first being a performance-based bonus (i.e. based on KPI), and
the second being the issue of options to the majority of Directors and executives to encourage the alignment of personal
and shareholder interests. The Company believes this policy has been effective in increasing shareholder value over the
past years.
Performance conditions linked to remuneration
The Group seeks to emphasise reward incentives for results and continued commitment to the Group through the provision
of various cash bonus reward schemes, specifically the incorporation of incentive payments based on the achievement of
revenue targets, return on equity ratios, and continued employment with the Group.
The performance-related proportions of remuneration (based on KPI targets) are included in the following table. The
objective of the reward schemes is to both reinforce the short and long-term goals of the Group and provide a common
interest between Management and Shareholders. There has been no alteration to the terms of the bonuses paid since the
grant date.
The satisfaction of the performance conditions is based on a review of the audited consolidated financial statements of
the Group and publicly available market indices and as such these figures reduce any risk of contention relating to payment
eligibility. The Board does not believe that performance conditions should include a comparison with any other measures
or factors external to the Group at this time.
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N1 Holdings Limited
Directors' report
30 June 2023
The performance-based bonus schedule is detailed below, which has only available to executive Directors since 17 May
2023. $60,000 were paid to executive Directors during FY2023, of which $40,000 were paid to Ren Hor Wong and $20,000
were paid to Jia Penny He.
Minimum revenue achieved by the
Company for a financial year
Bonus
Ren Hor Wong
Bonus
Jia Penny He
$6 million
$12 million
$15 million
$18 million
$21 million
$24 million
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
Maximum achievable bonus is used in below calculation.
Fixed remuneration
Remuneration linked to performance
2023
2022
2023
2022
Directors and secretaries
Ren Hor Wong
Jia Penny He
David Holmes
Frank Ganis
77.44%
76.92%
100%
100%
95.15%
95%
100%
100%
22.56%
23.08%
0%
0%
4.85%
5%
0%
0%
The following tables provide employment details of persons who were, during FY2023, members of KMP of the Group.
The table also illustrates the proportion of remuneration that was performance and non-performance based.
Positions of KMPs and their employment details
Position held
Contract duration
Employment
type
Termination
notice period
Ren Hor Wong
Chairman, CEO
18/03/2016 - Ongoing
Permanent
Jia Penny He
David Holmes
Frank Ganis
Executive
Director, CFO
Independent Non
Executive Director
Independent Non
Executive Director
18/03/2016 - Ongoing
Permanent
15/01/2019 - Ongoing
01/09/2020 - Ongoing
Consultancy
agreement
Consultancy
agreement
3 months
3 months
10 business
days
10 business
days
Key terms of KMP contract
Chief Executive Officer
— The CEO receives fixed remuneration of $400,000 per annum plus superannuation contributions under the
Superannuation Guarantee (Administration) Act 1992 (Cth) and the Superannuation Guarantee Charge Act 1992
(Cth).
In addition to the fixed remuneration, the CEO will be entitled to a performance-based bonus.
—
— The Company provide a car benefit to the CEO and a car allowance of $1,000 pm.
— Fixed and incentive remuneration is reviewed and determined annually.
— Termination notice period is 3 months or without notice in the event of breach of services agreement between Mr
Wong and the Company or serious misconduct.
— Restraint period being up to 24 months.
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N1 Holdings Limited
Directors' report
30 June 2023
Chief Financial Officer
— The CFO receives fixed remuneration of $200,000 per annum plus superannuation contributions under the
Superannuation Guarantee (Administration) Act 1992 (Cth) and the Superannuation Guarantee Charge Act 1992
(Cth).
In addition to the fixed remuneration, the CFO will be entitled to a performance-based bonus.
—
— Fixed and incentive remuneration will be reviewed and determined annually.
— Termination notice period is 3 months or without notice in the event of breach of services agreement between Ms
He and the Company or serious misconduct.
— Restraint period being up to 24 months.
Independent Non-Executive Director – David Holmes
— The remuneration (Service Fee) of the Non-Executive Director is $20,000 per annum including Superannuation.
— The Service Fee will be reviewed and determined annually.
— Termination notice period is 10 business days or immediately in the event of breach of services agreement between
the relevant Non-Executive Director and the Company or serious misconduct.
Independent Non-Executive Director – Frank Ganis
— The remuneration (Service Fee) of the Non-Executive Director is $144,000 per annum including Superannuation.
— The Service Fee will be reviewed and determined annually.
— Termination notice period is 10 business days or immediately in the event of breach of services agreement between
the relevant Non-Executive Director and the Company or serious misconduct.
Remuneration of KMP
2023
Short term employee benefits
Post-
employment
benefits
Long term
employee
benefits
Share based payments
Total
Salaries
Bonus
Other
(note 1)
Superannuation
Long service
leave
Options
Dividends
paid
Directors and Secretaries
Ren Hor Wong
$411,850
$40,000
Jia Penny He
$210,771
$20,000
David Holmes
Frank Ganis
$41,154
$122,750
-
-
-
-
-
-
$28,361
$23,100
$1,545
$12,653
$13,149
$6,383
-
-
-
-
-
-
$115,686
$609,046
$1,632
$261,886
-
$42,699
$989
$136,392
2022
Short term employee benefits
Post-
employment
benefits
Long term
employee
benefits
Share based payments
Total
Salaries
Bonus
Other
(note 1)
Superannuation
Long service
leave
Options
Dividends
paid
Directors and Secretaries
Ren Hor Wong
$395,285
$10,000
$2,550
Jia Penny He
$188,942
$5,000
David Holmes
Frank Ganis
$60,023
$88,023
-
-
-
-
-
Note 1: The Company provides car benefits to the CEO.
Options and rights granted as remuneration
The options at the end of the current year are nil (FY22: nil)
$23,568
$19,527
$5,977
$8,777
$15,115
$7,389
-
-
-
-
-
-
-
-
-
-
$446,518
$220,858
$66,000
$96,800
15
N1 Holdings Limited
Directors' report
30 June 2023
KMP shareholdings
The number of ordinary shares in the Company held by each KMP of the Group during the financial year is as follows:
2023
Number of
Shares
beginning of
the year
Ren Hor Wong
50,298,357
Jia Penny He
Frank Ganis
2022
709,468
430,000
Number of
Shares
beginning of
the year
Received as
remuneration
during year
Received on
exercising
Options
Shares
purchased
Number of
Shares at the
end of the year
-
-
-
-
-
-
-
-
-
50,298,357
709,468
430,000
Received as
remuneration
during year
Received on
exercising
Options
Shares
purchased
Number of
Shares at the
end of the year
Ren Hor Wong
50,268,945
Jia Penny He
Frank Ganis
308,168
117,500
-
-
-
-
-
-
29,412
50,298,357
401,300
312,500
709,468
430,000
Other equity-related KMP transactions
There have been no other transactions involving equity instruments apart from those described in the tables above relating
to Options, Rights and Shares.
Loans to KMP
There are no loans from the Company to KMP as at 30 June 2023.
Share-based compensation
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation during the year
ended 30 June 2023.
Options
There were no options over ordinary shares issued and/or granted to directors and other key management personnel as
part of compensation that were outstanding as at 30 June 2023.
This concludes the remuneration report, which has been audited.
Auditor
On 28 June 2023, the Company removed Crowe Sydney as the Company’s auditor and appointed SW Audit as the
Company’s auditor in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act
2001.
On behalf of the directors
Ren Hor Wong
Executive Chairman and CEO
26 September 2023
16
Take the lead
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001 TO THE DIRECTORS OF N1 HOLDINGS LIMITED
As lead auditor, I declare that, to the best of my knowledge and belief, during the year ended 30 June
2023 there have been:
i. no contraventions of the auditor independence requirements as set out in the Corporations Act
2001 in relation to the audit, and
ii. no contraventions of any applicable code of professional conduct in relation to the audit.
SW Audit
Chartered Accountants
Yang (Bessie) Zhang
Partner
Sydney, 26 September 2023
Brisbane
Level 15
240 Queen Street
Brisbane QLD 4000
T + 61 7 3085 0888
Melbourne
Level 10
530 Collins Street
Melbourne VIC 3000
T + 61 3 8635 1800
Perth
Level 18
197 St Georges Terrace
Perth WA 6000
T + 61 8 6184 5980
Sydney
Level 7, Aurora Place
88 Phillip Street
Sydney NSW 2000
T + 61 2 8059 6800
SW Audit ABN 39 533 589 331. Liability limited by a scheme approved under Professional Standards
Legislation. SW Audit is an independent member of ShineWing International Limited.
sw-au.com
17
N1 Holdings Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2023
Revenue
Other income
Expenses
Interest expense
Consulting and referral fees
Employee cost
IT and technology
Sales and marketing
Occupancy cost and utilities
Professional fee
Office and administrative expense
Finance cost
Travel cost
Depreciation and amortisation
Other operation cost
Gain on disposal of assets
Impairment loss on goodwill
Profit before income tax benefit
Income tax benefit
Profit after income tax benefit for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Basic earnings per share
Diluted earnings per share
Refer to note 1 for detailed information on Restatement of comparatives.
Consolidated
Note
2023
$
2022
(Restated)
$
4
5
6
7
7
37
23
13,993,574
10,610,911
96,354
275,288
(8,142,187)
(1,265,240)
(2,557,214)
(2,276)
(191,215)
(160,835)
(499,509)
(195,649)
(75,580)
(119,875)
(440,606)
-
-
(329,975)
(4,840,036)
(1,461,923)
(2,484,094)
(13,182)
(184,416)
(121,985)
(312,048)
(185,375)
(84,731)
(48,318)
(449,675)
(4,297)
948
-
109,767
697,067
231,178
-
340,945
697,067
-
-
340,945
697,067
Cents
Cents
2
2
0.39
0.39
0.84
0.84
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with
the accompanying notes
18
N1 Holdings Limited
Consolidated statement of financial position
As at 30 June 2023
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Commercial loan receivables
Other financial assets
Other current assets
Total current assets
Non-current assets
Contract assets
Investments in associate and joint venture
Other financial assets
Property, plant and equipment
Deferred tax assets
Intangible assets
Other non-current assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Loan and borrowings
Lease liabilities
Deferred income
Provisions
Total current liabilities
Non-current liabilities
Contract liabilities
Loan and borrowings
Lease liabilities
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets/(liabilities)
Equity
Issued capital
Options reserve
Retained earnings
Note
2023
$
Consolidated
2022
(Restated)
$
1 July 2021
(Restated)
$
8
9
10
11
12
13
10
12
14
38
15
13
16
17
18
19
20
17
18
38
20
7,019,128 14,142,721
1,619,105
2,837,458
259,428
324,039
76,974,937 59,522,817
170,382
31,045
3,211,848
1,321,889
235,139
6,534,389
371,507
152,455
87,491,974 75,745,498 11,827,227
140,382
196,030
886,204
-
157,927
742,717
548,218
123,708
266,050
2,724,824
698,651
1
157,927
1,035,325
334,609
1,198,162
265,365
3,690,040
341,207
51
167,047
1,404,294
213,225
1,270,831
245,803
3,642,458
90,216,798 79,435,538 15,469,685
1,290,142
73,294
1,278,210
71,683
21,380,000 23,261,073
331,833
1,685,369
242,826
25,550,095 26,870,994
286,825
2,280,466
239,368
200,451
193,044
63,009,601 51,072,064
630,625
334,609
180,956
64,075,040 52,411,298
343,798
317,040
204,150
948,672
11,291
5,704,780
326,117
121,786
152,909
7,265,555
16,383
8,441,073
962,459
213,225
114,811
9,747,951
89,625,135 79,282,292 17,013,506
591,663
153,246
(1,543,821)
21
22
23
6,954,061
206,524
(6,568,922)
6,654,061
206,524
(6,707,339)
5,654,061
206,524
(7,404,406)
Total equity/(deficiency)
591,663
153,246
(1,543,821)
Refer to note 1 for detailed information on Restatement of comparatives.
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
19
N1 Holdings Limited
Consolidated statement of changes in equity
For the year ended 30 June 2023
Consolidated
Balance at 1 July 2021
Restatement (note 1)
Issued
capital
$
Share-based
payment
reserve
$
Retained
profits
$
Total equity
$
5,654,061
206,524
(7,338,212)
(1,477,627)
-
-
(66,194)
(66,194)
Balance at 1 July 2021 - restated
5,654,061
206,524
(7,404,406)
(1,543,821)
Profit after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
-
-
-
Transactions with owners in their capacity as owners:
Conversion of convertible notes
1,000,000
-
-
-
-
697,067
-
697,067
-
697,067
697,067
-
1,000,000
Balance at 30 June 2022
6,654,061
206,524
(6,707,339)
153,246
Refer to note 1 for detailed information on Restatement of comparatives.
Consolidated
Balance at 1 July 2022
Issued
capital
$
Share-based
payment
reserve
$
Retained
profits
$
Total equity
$
6,654,061
206,524
(6,707,339)
153,246
Profit after income tax benefit for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
-
-
-
Transactions with owners in their capacity as owners:
Conversion of convertible notes
Dividends paid (note 24)
300,000
-
-
-
-
-
-
340,945
-
340,945
-
340,945
340,945
-
(202,528)
300,000
(202,528)
Balance at 30 June 2023
6,954,061
206,524
(6,568,922)
591,663
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
20
N1 Holdings Limited
Consolidated statement of cash flows
For the year ended 30 June 2023
Cash flows from operating activities
Receipts from customers
Receipt of government grants
Interest received from bank deposit
Payments to suppliers and employees
Net increase in fund lent as commercial loans
Net increase in fund received for commercial loans
Interest and other finance costs paid for commercial loans
Consolidated
Note
2023
$
2022
(Restated)
$
13,418,714
-
75,995
(5,125,815)
12,779,180
258,166
2,540
(5,260,899)
(17,586,626) (53,393,729)
62,070,000
11,227,537
(4,600,824)
(8,072,255)
Net cash from/(used in) operating activities
39
(6,062,450) 11,854,434
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of Intangible assets
Investment in other financial assets
Loan to third parties
Proceeds from disposal of plant and equipment
Proceeds from disposal of SBP
Net cash from investing activities
Cash flows from financing activities
Repayment of borrowings and loans
Payment of finance cost and interest
Dividends paid
Repayment of other financial liability
Repayment of lease liabilities
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
14
15
24
(84,082)
(8,260)
-
30,000
-
588,400
(14,893)
(4,225)
19,311
197,125
16,000
-
526,058
213,318
(871,072)
(149,615)
(202,528)
-
(363,986)
(504,780)
(239,212)
-
(21,600)
(371,287)
(1,587,201)
(1,136,879)
(7,123,593) 10,930,873
3,211,848
14,142,721
Cash and cash equivalents at the end of the financial year
8
7,019,128
14,142,721
* The presentation of the comparative figures have been adjusted to conform with the presentation in the current period.
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
21
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 1. Restatement of comparatives
Correction of error
The Group made an ASX announcement on 23 December 2022 to restate the commercial loans receivable by including
establishment fee as an integral part of generating commercial loan receivables when applying effective interest rate
method in its financial report. The commercial loans receivable was overstated by $471,496 as at 30 June 2022 (2021:
$66,194). The commercial lending fee and interest income was overstated by $405,302 for the year ended 30 June 2022.
As a result of the restatement, the restated profit after tax for the year ended 30 June 2022 had decreased from $1,102,369
to $697,067.
In prior years, loan establishment fee revenue was recognised when the loan facility was established. This accounting
policy was not in compliance with AASB 9 ‘Financial Instruments’. During the year commencing 1 July 2021, the
commercial lending business evolved with the loan establishment fee becoming a material source of the Group's revenue.
This is therefore an error which has resulted in a material overstatement of revenue recognised for the financial year ended
30 June 2022 and a corresponding overstatement of Commercial loan receivable.
To correct this error, the loan establishment fee should be treated as an integral part of generating commercial loan
receivables and therefore is to be accounted for using the effective interest rate.
A part of loan establishment fee recognised as revenue is referral fee that the borrower has agreed to pay to the referrers
and of which N1 withheld the fund at loan disbursement. N1 subsequently paid the referral fee to the referrers and recorded
this as referral fee expenses. However, the Group was not entitled to the referral fees in accordance with the agency
agreement. To correct this error, the referral fee revenue should be netted off against referral fee expense.
The errors have been corrected by restating each of the affected financial statement line items for the prior periods as
follows:
Statement of profit or loss and other comprehensive income
Extract
Revenue
Expenses
Interest expense
Professional fee
Finance cost
Travel cost
Consolidated
2022
$
$
2022
$
Reported
Adjustment Restated
11,016,213
(405,302) 10,610,911
(4,600,824)
(313,560)
(323,943)
(46,806)
(239,212)
1,512
239,212
(1,512)
(4,840,036)
(312,048)
(84,731)
(48,318)
Profit before income tax expense
1,102,369
(405,302)
697,067
Income tax expense
-
-
-
Profit after income tax benefit for the year
1,102,369
(405,302)
697,067
Other comprehensive income for the year, net of tax
-
-
-
Total comprehensive income for the year
1,102,369
(405,302)
697,067
22
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 1. Restatement of comparatives (continued)
Statement of financial position at the beginning of the earliest comparative period
Consolidated
Extract
Assets
Current assets
Commercial loan receivables
Total current assets
Total assets
Net liabilities
Equity
Accumulated losses
1 July 2021
$
$
Reported Adjustment Restated
1 July 2021
$
6,600,583
11,893,421
6,534,389
(66,194)
(66,194) 11,827,227
15,535,879
(66,194) 15,469,685
(1,477,627)
(66,194)
(1,543,821)
(7,338,212)
(66,194)
(7,404,406)
Total deficiency in equity
(1,477,627)
(66,194)
(1,543,821)
Statement of financial position at the end of the earliest comparative period
Extract
Assets
Current assets
Commercial loan receivables
Total current assets
Total assets
Net assets
Equity
Accumulated losses
Total equity
Note 2. Earnings per share
Profit after income tax
Consolidated
30 June 2022
$
30 June 2022
$
$
Reported
Adjustment Restated
59,994,313
76,216,994
(471,496) 59,522,817
(471,496) 75,745,498
79,907,034
(471,496) 79,435,538
624,742
(471,496)
153,246
(6,235,843)
(471,496)
(6,707,339)
624,742
(471,496)
153,246
Consolidated
2023
$
2022
(Restated)
$
340,945
697,067
Weighted average number of ordinary shares used in calculating basic and diluted
earnings per share
87,832,285
82,541,874
23
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 2. Earnings per share (continued)
Basic and diluted earnings per share
Note 3. Operating segments
0.39
0.84
Identification of reportable operating segments
The Group is organised into four operating segments: financial services, real estate services, migration services and other.
These operating segments are based on the internal reports that are reviewed and used by the Board of Directors (who
are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the
allocation of resources. There is no aggregation of operating segments.
Financial services
This segment refers to the operating activities in the area of financial service business mainly including:
- Commercial loan lending
- Mortgage broking
- Advisory service
The Group lends privately raised funds to commercial borrowers and earns loan facility set up related fees, interest income
as well as management fees from mortgage funds issued and managed by N1 Venture Pty Ltd.
The Group acts as a mortgage broker that provides its customers with advice and support and receives commission
payments on loans originated through its network of customers.
The Group provides financial advisory, trustee and fund management services to its customers and receives advisory
service fees.
Real estate services
The Group conducts real estate services through N1 Realty Pty Ltd and Sydney Boutique Properties Pty Ltd (sold and
discontinued on 10 March 2023). The services are focused on rental property management and property sales.
The Group has signed a contract to dispose its rent roll assets held under Sydney Boutique Properties Pty Ltd on 24
November 2022 and to discontinue the property management business at completion of the transaction on 10 March 2023.
Migration services
The Group provides migration services to its customers through N1 Migration Pty Ltd which holds a migration agent
licence.
Other business operations that are not separately reportable, as well as costs associated with enterprise functions (such
as Administration, Finance and Treasury) are included in ‘Other’.
The CODM reviews EBITDA (earnings before interest, tax, depreciation and amortisation). The accounting policies
adopted for internal reporting to the CODM are consistent with those adopted in the consolidated financial statements.
24
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 3. Operating segments (continued)
Operating segment information
Consolidated - 2023
$
$
$
$
Total
$
Financial
services
Real estate
services
Migration
services
Other
Revenue
Revenue
Interest income
Other income
Total revenue
13,510,932
72,762
(17)
13,583,677
423,828
-
10,874
434,702
58,814
174
-
58,988
- 13,993,574
75,995
20,359
12,561 14,089,928
3,059
9,502
Segment operating profit/(loss) before
income tax
Profit/(loss) before income tax benefit
Income tax benefit
Profit after income tax benefit
1,858,037
1,858,037
(275,874)
(275,874)
(61,264)
(61,264)
(1,411,132)
(1,411,132)
109,767
109,767
231,178
340,945
Material items include:
Interest expense
Depreciation and amortisation
Assets
Segment assets
Intersegment eliminations
Total assets
Liabilities
Segment liabilities
Intersegment eliminations
Total liabilities
(7,931,352)
(306,690)
(33,233)
(22,047)
-
-
(177,602)
(111,869)
(8,142,187)
(440,606)
95,606,307
20,781
32,101 27,701,615 123,360,804
(33,144,006)
90,216,798
89,787,396
1,884,797
170,198 20,262,570 112,104,961
(22,479,826)
89,625,135
25
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 3. Operating segments (continued)
Consolidated - 2022 (Restated)
$
$
$
$
Total
$
Financial
services
Real estate
services
Migration
services
Other
Revenue
Revenue
Interest
Other income
Total revenue
10,090,629
2,238
224,231
10,317,098
447,443
-
616
448,059
72,839
15
38,304
111,158
- 10,610,911
2,540
287
9,597
272,748
9,884 10,886,199
Segment operating profit/(loss) before income
tax
Profit/(loss) before income tax expense
Income tax expense
Profit after income tax expense
Material items include:
Interest expense
Depreciation and amortisation expense
1,498,600
1,498,600
99,969
99,969
(5,263)
(5,263)
(896,239)
(896,239)
697,067
697,067
-
697,067
(4,602,088)
(267,082)
(29,009)
(64,125)
-
-
(208,939)
(118,468)
(4,840,036)
(449,675)
Assets
Segment assets
Intersegment eliminations
Total assets
Liabilities
Segment liabilities
Intersegment eliminations
Total liabilities
Note 4. Revenue
82,718,542
2,934,677
65,566 34,997,128 120,715,913
(41,280,375)
79,435,538
80,627,936
4,852,796
142,397 24,262,458 109,885,587
(30,603,295)
79,282,292
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Mortgage broking and commercial lending origination commission
Mortgage broking trail commission
Net movement in trail commission asset valuation
Commercial lending interest income
Other services relating to commercial lending
Real estate service
Migration service
Advisory service
Consolidated
2023
$
2022
(Restated)
$
725,249
378,915
243,146
7,731,717
4,072,905
423,828
58,814
359,000
1,116,312
252,003
136,104
4,356,641
4,131,819
447,443
72,839
97,750
13,993,574 10,610,911
26
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 4. Revenue (continued)
Geographical regions
Australia
Timing of revenue recognition
Consolidated
2023
$
2022
(Restated)
$
13,993,574 10,610,911
Revenue is recognised either at a point in time or over time, when (or as) the Group satisfies performance obligations
based on the services rendered for its real estate service and the interest earned over time for its commercial lending
interest income. The analysis of the revenue recognition point is as below:
Mortgage origination commission
Mortgage broking trail commission
Net movement in trail commission asset valuation
Commercial lending interest income
Other service fees relating to commercial lending
Real estate service
Migration service
Advisory service
2023
2023
2022
(Restated)
2022
(Restated)
At point in
time
$
Over time
$
At point in
time
$
Over time
$
725,249
378,915
243,146
-
4,072,905
157,245
58,814
359,000
-
-
-
7,731,717
-
266,583
-
-
1,116,312
252,003
136,104
-
4,131,819
218,362
72,839
97,750
-
-
-
4,356,641
-
229,081
-
-
5,995,274
7,998,300
6,025,189
4,585,722
Mortgage broking services
The Group provides a service of introducing applicants to lenders as part of the process to originate a loan and receive
commissions for the service provided. The service activities that form part of this process are interrelated and
interdependent of each other and form a single performance obligation. The Group recognises commission as revenue
upon the settlement of loans, which is when the performance obligation is completed.
The deferral of a portion of the commission as trail commission is a mechanism by which lenders incentivise brokers to
introduce quality applicants that will not refinance their loans and therefore maximise the life of the loan. This mechanism
affects the transaction price, but it does not give rise to a separate performance obligation. As a result, trail commission is
also recognised as revenue upon settlement of loans and at the same time, the right to trail commission is recognised as
a contract asset on the statement of financial position. The contract asset will only become a financial asset (i.e. a
receivable) when the right to the consideration is unconditional. This is expected to be as each month’s entitlement to the
trail commission is established, i.e. when an invoice is raised to the aggregator.
The Group recognises trailing commission as revenue only if it is highly probable that a change in the estimate of the
variable consideration would not result in a significant reversal of the cumulative revenue already recognised.
The upfront origination commission is recognised at its transactions price and the trailing commission is recognised by
using the expected value approach constrained by avoiding possible future downward revenue adjustments (i.e., revenue
reversals).
The Group is a principal because it controls its service activities during the loan application process and is entitled to gross
commissions from lenders/aggregators. As a result the revenue for commission earned is presented on a gross basis.
The portion payable to commission-based brokers is recorded separately and recognised as trail commission liabilities at
reporting date.
27
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 4. Revenue (continued)
Commercial lending interest income
Commercial lending interest income (including loan establishment fee received) from commercial loan receivables is
recognised using the effective interest method.
Management fees from funds under management
Management fees received from funds under management are recognised when the fund’s performance results exceed
its performance target for the period and the Group is entitled to the performance fee.
Loan processing and administration service fee
Loan processing and administration service fees are recognised when the service is delivered.
Other service fees relating to commercial lending
Other service fees include discharge fee, break fee, and monthly line fee. Other service fees are recognised when the
services are delivered.
Real estate service
The Group enters into contracts with its customers to manage and/or sell properties on the customer’s behalf. Under these
contracts, the Group provides rental management and/or selling agent services. As a result, the Group receives property
management fees which are based on a percentage of rental collected on behalf of the landlords. Income is recognised
in the period when the services are rendered. In terms of the real estate selling agent services, the Group receives
commissions and fees derived from real estate sales. They are recognised at the time that unconditional exchange of
contracts between vendors and purchasers take place. This service had been disposed during the year, refer to Note 9
for further details.
Migration service fee and advisory service fee
Migration service fee and advisory service fee are recognised at the point in time when the services are delivered.
Note 5. Other income
Government grants
Interest income
Others
Other income
Consolidated
2023
$
2022
(Restated)
$
-
75,995
20,359
258,165
2,539
14,584
96,354
275,288
Government grants represent the COVID-19 stimulus incentive received by the Group, including Jobkeeper and cash flow
boost payments.
Note 6. Interest expense
Commercial lending interest expense
Corporate interest expense
28
Consolidated
2023
$
2022
(Restated)
$
7,992,572
149,615
4,600,824
239,212
8,142,187
4,840,036
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 7. Expenses
Finance cost
Interest expense in relation to leases
Bank fees
Depreciation and amortisation
Depreciation expense in relation to leases
Depreciation expense
Amortisation costs
Superannuation expense
Defined contribution superannuation expense
Note 8. Cash and cash equivalents
Current assets
Cash on hand
Cash and cash equivalents
Cash and cash equivalents
Consolidated
2023
$
2022
(Restated)
$
32,151
43,429
45,444
39,287
75,580
84,731
Consolidated
2023
2022
(Restated)
315,930
60,760
63,916
315,931
53,242
80,502
440,606
449,675
Consolidated
2023
$
2022
(Restated)
$
210,949
196,124
Consolidated
2023
$
2022
(Restated)
$
100
-
7,019,028 14,142,721
7,019,128 14,142,721
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash
and which are subject to an insignificant risk of changes in value.
29
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 9. Trade and other receivables
Current assets
Interest receivable
Trade receivables
Agent commission clawback receivable
Consolidated
2023
$
2022
(Restated)
$
434,375
2,333,718
69,365
260,657
1,321,525
36,923
2,837,458
1,619,105
Trade and other receivables are initially recognised at their transaction price (as defined in AASB 15) and subsequently
measured at amortised cost (on the basis that the Group's business model is to hold and collect contractual cash flows
which are solely for payments of trade and other receivables).
The impairment assessment required by AASB 9 for financial assets is based on the forward-looking expected credit loss
('ECL') model.
The simplified approach is adopted to assess the impairment of trade and other receivables. Under the simplified
approach, life time expected credit losses are estimated based on historically incurred and forward expected credit losses,
both of which are examined and assessed to determine the amount of impairment as at reporting date. Specifically, the
Group applies credit loss factors determined from estimation of customer default probability and loss percentage on current
observable data which include:
• forecasts of economic conditions such as unemployment, interest rates, gross domestic product and inflation;
• financial difficulties of a counterparty or probability that a counterparty will enter bankruptcy; and
• conditions specific to the asset to which the receivable relates.
Debts that are known to be uncollectable are written off when identified.
Credit risk
The Group has credit risk exposure in relation to commercial lending interest and fees receivable from multiple companies.
On a geographic basis, the Group has significant credit risk exposures in Australia only.
As at 30 June 2023, the Group has recorded a provision of $47,135 (2022 (Restated): $47,135) for trade and other
receivables assessed to be impaired. Refer to note 16 for detailed information.
As at 30 June 2023, the amount of all trade and other receivables past due but not impaired is $1,680,138 (2022
(Restated): $888,672).
Note 10. Contract assets
Current assets
Contract assets - current
Non-current assets
Contract assets
Consolidated
2023
$
2022
(Restated)
$
324,039
259,428
886,204
698,651
30
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 10. Contract assets (continued)
The contract asset relates to future trail income for the mortgage broking service. It is recognised and measured by using
the expected cashflow approach. The contract asset will only become a financial asset (i.e. a receivable) when the right
to the consideration is unconditional. This is at the point when monthly trail commission is invoiced to the aggregator.
Reconciliation of the contract assets at the beginning and end of the current
financial year are set out below:
Opening balance
Expected trail commission from new loans and commission step up and effect of the
change in the valuation model
Trail commission received
2023
$
2022
(Restated)
$
958,079
576,346
631,079
(378,915)
633,736
(252,003)
1,210,243
958,079
The Group receives trailing commissions from lenders on settled loans over the life of the loan based on the loanbook
balance outstanding subject to the loan continuing to perform. The Group also makes trailing commission payments to
brokers based on their individual loanbook balance outstanding.
The contract assets and the corresponding payable to brokers (contract liabilities) are determined by using the discounted
cash flow valuation technique. The expected cashflow approach requires the use of key assumptions to determine the
amortised cost at balance sheet date including the future run-off rate of the underlying loan portfolio, the discount rate and
the percentage paid to individual brokers working under the Group's management. The future run-off rate used is actually
a series of rates applied to the underlying loans based primarily on their age at the date of valuation. The weighted average
life shown below is the result of the series of future run-off rates applied to the specific loan data at the balance sheet date.
The determination of the assumptions to be used in the valuation is made by management based primarily on a variety of
contributing factors including: an annual assessment of the underlying loan portfolio, historical run-off rate analysis and
consideration of current and future economic factors. These factors are complex and the determination of assumptions
requires a high degree of judgement.
Discount rate
Average percentage of trailing commission entitled by the Group
Weighted average loan life (in years)
Sensitivity
Consolidated
2023
%
2022
(Restated)
%
8.87%
76.66%
8.87%
72.30%
4.05
3.57
The sensitivity of contract asset value is mainly raised from discount rate used in the valuation. The sensitivity analysis is
shown as below:
Discount rate - increase 2% (2022: 2%)
Discount rate - decrease 2% (2022: 2%)
2023
$
2022
$
1,148,504
1,345,149
922,228
997,018
31
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 11. Commercial loan receivables
Current assets
Commercial loan receivables
Consolidated
2023
$
2022
(Restated)
$
76,974,937 59,522,817
The Group raises funds to lend money to commercial entities on a short-term basis and earns interest income. The loans
are secured with established real property or land in line with the Group’s lending requirements.
Recognition and measurement
Loan receivables are initially recognised at fair value plus or minus transaction costs that are directly attributable to the
acquisition or issue of the loan and subsequently measured at amortised cost (on the basis that the Group's business
model is to hold and collect contractual cash flow that are solely for payments of principals and interest on principal
amounts outstanding.
Credit risk management
The Group continuously monitors the credit quality of the borrowers based on a credit rating scorecard. The Group
assesses each of its commercial loans by using a credit scoring model that is based on current and historical past due
statuses, indebtedness, loan-to-value measures (‘LTV measures’), and the loan size. The forecasted business default
rates, price of property and mortgage default rates may be factored into the Credit Scoring. The Credit Scoring Level and
corresponding Probability of Default is documented and reviewed regularly by both Accounting and Credit Management
Department.
Credit quality - Security held against loans
Secured by mortgage over real estate
Secured by other credit enhancement
Loan to valuation ratio of equal to or less than 70% - first mortgage
Loan to valuation ratio of equal to or less than 70% - second mortgage
Loan to valuation ratio of more than 70% - first mortgage
Loan to valuation ratio of more than 70% - second mortgage
Consolidated
2023
$
2022
(Restated)
$
76,328,637 58,373,548
1,149,269
646,300
76,974,937 59,522,817
Consolidated
2023
$
2022
(Restated)
$
48,030,807 36,999,230
7,452,147 13,427,887
4,473,498
4,622,202
20,078,398
1,413,585
76,974,937 59,522,817
32
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 11. Commercial loan receivables (continued)
LVR buckets
0-60%
60.01%-70%
70.01%-75%
75%+
Other *
Consolidated
2023
$
2022
(Restated)
$
18,134,694 19,464,366
35,406,960 30,962,751
6,504,302
21,491,983
1,442,129
1,295,000
1,149,269
646,300
76,974,937 59,522,817
*The security property of this default loan will be listed on market for sale. Following the completion of this potential sale,
the entire remaining loan balance reduced by any credit enhancement received will be sold via a nonrecourse assignment.
The credit enhancement includes financial guarantees from the directors of the borrower’s parent entity. The Group’s
board of directors has reviewed and approved the potential transaction.
Concentration of loans
Concentration risk is a measurement of the Group’s exposure to an individual counterparty (or a group of related parties).
Concentration exposures to counterparties are closely monitored.
Geographical concentrations
New South Wales
Victoria
Queensland
South Australia
Australian Capital Territory
Consolidated
2023
$
2022
(Restated)
$
54,078,443 40,845,091
10,035,400 13,748,642
2,625,307
1,979,808
323,969
8,377,500
2,988,500
1,495,094
76,974,937 59,522,817
33
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 11. Commercial loan receivables (continued)
Impairment assessment
The impairment assessment required by AASB 9 for financial assets are based on a forward-looking expected credit loss
('ECL') model.
The general approach is adopted to assess the impairment of loan receivables.
Under the general approach, 12 month’s credit losses or life time credit losses are estimated based on whether the credit
risk on that financial instrument (loan receivables) has increased significantly since initial recognition to determine the
amount of impairment as at reporting date. Specifically, if the credit risk has not increased significantly since initial
recognition, then a loss allowance equal to 12 month’s credit losses should be measured and recognised. Otherwise life
time expected credit losses should be measured and recognised. The Group will apply credit loss factors determined from
estimation of customer default probability and loss percentage. As the Group's loan book has a term of 3-12 months, the
Group measures a life time expect credit loss for the stage 1 and 2.
At each reporting date, the Group assesses whether financial assets carried at amortised cost are ‘credit-impaired’. A
financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash
flows of the financial asset have occurred.
The Group recognises loss allowances at an amount equal to lifetime (3-12 months) ECL on loan receivables. Loss
allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of the loan receivable and
are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls
(i.e. the difference between the cash flows due to the Group in accordance with the contract and the cash flows that the
Group expects to receive).
Debts that are known to be uncollectable are written off when identified.
Credit risk stage
30 June 2023
Credit risk stage 1 and stage 2
Credit risk stage 3
30 June 2022 (Restated)
Credit risk stage 1 and stage 2
Credit risk stage 3
Gross
carrying
amount
Impairment
loss
allowance
Credit impaired
76,328,637
646,300
54,243,548
5,279,269
- No
- Yes
- No
- Yes
The loan receivables have been assessed at individual loan level for ECL by the Group where the estimated recoverable
amounts from disposal of the security held against the loans are all higher than the losses given default. Therefore, the
Group assessed that the expected credit loss provision is nil at 30 June 2023 (30 June 2022: nil).
Use of judgements and estimates
The Group reviews individually commercial lending loans at each reporting date to assess whether an impairment loss
should be recorded in the income statement. Judgement by management is required in the estimation of the amount and
timing of future cash flows when determining the impairment loss. In estimating these cash flows, the Group makes
judgements about the borrower’s financial situation and the net realisable value of collateral. These estimates are based
on assumptions about a number of factors including forward looking information available at the time. Actual results may
differ, resulting in future changes to the allowance.
34
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 12. Other financial assets
Current assets
Other financial assets
Non-current assets
Investment in Stropro Technologies Pty Ltd
Consolidated
2023
$
2022
(Restated)
$
140,382
170,382
157,927
157,927
Other financial assets represent investment loans receivable that are initially recognised at fair value, adjusted for
transaction costs that are directly attributable to the acquisition or issue of the loan (as defined in para 5.1.1 in AASB 9)
and subsequently measured at amortised cost (on the basis that the Group's business model is to hold and collect
contractual cash flows that are solely for payments of principal and interest on principal amounts outstanding (as defined
in para 4.1.2 in AASB 9)).
Other investments are financial assets at fair value through profit or loss which are equity interests owned by the Group.
They are initially measured at fair value with subsequent changes in fair value recognised in profit or loss.
Refer to note 27 for further information on fair value measurement.
Note 13. Other current and non-current assets
Current assets
Bond
Other receivables
Non-current assets
Bond
Other receivables
Consolidated
2023
$
2022
(Restated)
$
56,520
139,510
-
31,045
196,030
31,045
182,574
83,476
239,094
26,271
266,050
265,365
Other assets primarily consist of bank guarantee deposits to secure leases disclosed in note 14, and other receivables to
a related party.
35
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 14. Property, plant and equipment
Non-current assets
Office equipment
Less: Accumulated depreciation
Motor vehicles
Less: Accumulated depreciation
Furniture & fittings
Less: Accumulated depreciation
Premises - right-of-use
Less: Accumulated depreciation
Consolidated
2023
$
2022
(Restated)
$
116,038
(105,313)
10,725
113,914
(95,508)
18,406
69,481
(15,184)
54,297
-
-
-
530,807
(394,168)
136,639
586,041
(426,108)
159,933
1,520,596
(979,540)
541,056
1,520,596
(663,610)
856,986
742,717
1,035,325
Property, plant and equipment is measured at cost less accumulated depreciation and any accumulated impairment. In
the event that the carrying amount of plant and equipment is greater than the estimated recoverable amount, the carrying
amount is written down immediately to the estimated recoverable amount. Impairment losses are recognised in the profit
or loss.
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
elsewhere in an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring
the site or asset.
Depreciation
The depreciable amount of all plant and equipment is depreciated on a diminishing basis over the asset’s useful life
commencing from the time the asset is held ready for use. Currently the depreciation rate is in the range of 10% to 50%.
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. Right-of use assets are subject to impairment or adjusted for any remeasurement
of lease liabilities. The range of lease terms for current leases are between 1 to 5 years.
Movements in carrying amounts
Movements in carrying amounts for each class of plant and equipment between the beginning and the end of the current
financial year.
36
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 14. Property, plant and equipment (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2021 (Restated)
Disposals
Additions
Depreciation expense
Balance at 30 June 2022 (Restated)
Write off of assets by sale of SBP
Write off of accumulated depreciation by sale
of SBP
Additions
Depreciation expense
Office
Equipment
$
Motor
Vehicles
$
Furniture &
Fittings
$
Office -
right-of-use
$
Total
$
14,979
-
14,893
(11,466)
18,406
-
-
2,124
(9,805)
16,434
(14,689)
-
(1,745)
199,964
-
-
(40,031)
1,172,917
-
-
(315,931)
1,404,294
(14,689)
14,893
(369,173)
-
-
159,933
(67,711)
856,986
-
1,035,325
(67,711)
-
69,481
(15,184)
67,711
12,477
(35,771)
-
-
(315,930)
67,711
84,082
(376,690)
Balance at 30 June 2023
10,725
54,297
136,639
541,056
742,717
The Group entered into a 7-year office lease with Venus Chatwood Pty Ltd for premises located at Shop 63, Platform,
Chatwood Interchage, 436 Victoria Ave, Chatwood in 2016, and a 5-year office lease with ARE Noble Pty Ltd for premises
located at 77 King Street, Sydney in 2020. The weighted average incremental borrowing rates applied to lease liabilities
at the date of initial application are 4.765% and 3.937%, respectively, for the existing two leases. The rate is determined
by referring to the interest rate on the group's existing loans with similar terms, in accordance signed lease agreements.
The 7-year office lease with Venus Chatwood Pty Ltd ends on 14 August 2023.
Note 15. Intangible assets
Consolidated
2023
$
2022
(Restated)
$
-
536,216
99,988
99,988
-
-
-
2,217,048
(1,682,484)
534,564
357,270
(333,550)
23,720
349,010
(321,616)
27,394
123,708
1,198,162
Non-current assets
Goodwill
Finance licence
Rent roll
Less: Accumulated amortisation
Website and IT system
Less: Accumulated amortisation
37
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 15. Intangible assets (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2021 (Restated)
Additions
Amortisation/written-down
Balance at 30 June 2022 (Restated)
Additions
Disposals
Impairment of assets
Amortisation/written-down
Goodwill (a)
$
Finance
licence
$
Rent Roll (a)
$
Website and
IT system (b)
$
Total
$
536,216
-
-
536,216
-
(206,241)
(329,975)
-
99,988
-
-
99,988
-
-
-
-
593,636
-
(59,072)
534,564
-
(518,836)
-
(15,728)
40,991
4,225
(17,822)
1,270,831
4,225
(76,894)
27,394
8,260
-
-
(11,934)
1,198,162
8,260
(725,077)
(329,975)
(27,662)
Balance at 30 June 2023
-
99,988
-
23,720
123,708
a) Goodwill and rent roll assets
The Group’s wholly owned subsidiary N1 Realty Pty Ltd (N1 Realty) operates in the real estate segment. N1 Realty has
disposed of its 100% ownership of Sydney Boutique Property Pty Ltd (SBP) which manages 138 commercial and
residential properties under management agency agreements (Rent Roll) on 24 November 2022. N1 Realty has agreed
to dispose of its 100% interest in SBP to SBP NO. 1 Pty Ltd for cash consideration of $725,077 (the Disposal). Accordingly,
the Rent Roll and associated goodwill are recognised as non-current assets or disposal group classified as held for sale
on 24 November 2022. The Disposal was completed on 10 March 2023. 20% of the purchase price was held by the buyer's
solicitor's bank account as a retention.
Non-current assets or disposal group held for sale was recognised at the lower of its carrying amount and its fair value
less costs to sell. Impairment losses of $329,975 for write-downs of the associated goodwill to the lower of its carrying
amount and its fair value less costs to sell have been included in the statement of profit or loss and other comprehensive
income as impairment loss on goodwill. The remaining balances of non-current assets or disposal group held for sale was
de-recognised on the completion date of the Disposal.
b) Website and IT System
Website and IT system – Cost
Website and IT system – Accumulated amortisation
Website and IT system – Net
Consolidated
2023
$
2022
(Restated)
$
357,270
(333,550)
349,010
(321,616)
23,720
27,394
Acquired website and computer software licences are capitalised on the basis of costs incurred to acquire them.
These costs are amortised over their estimated useful lives. Costs associated with maintaining computer software
programs are recognised as an expense as incurred.
Amortisation is recognised in the profit or loss statement on a diminishing basis over the estimated useful life of the
intangible assets from the date that they are considered suitable for use. The estimated useful life of website and IT system
is 5 years. The current amortisation charges for website and IT system are included under depreciation and amortisation
expenses.
38
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 16. Trade and other payables
Current liabilities
Trade payables
Superannuation and salary withholding tax payable
Other creditors and accruals
Consolidated
2023
$
2022
(Restated)
$
621,018
418,583
250,541
425,192
566,770
286,248
1,290,142
1,278,210
An expected credit loss provision of $47,135 (2022 (Restated): $47,135) has been recorded under the other creditors and
accruals.
Refer to note 26 for further information on specific financial risk exposures and management.
Trade and other payable are recognised at fair value initially and subsequently measured at amortised cost.
Note 17. Contract liabilities
Current liabilities
Contract liabilities - current
Non-current liabilities
Contract liabilities
Consolidated
2023
$
2022
(Restated)
$
73,294
71,683
200,451
193,044
Contract liabilities is related to contract assets and represents the Group's obligation to pay the commission based brokers
under the Group's management a portion of the future trail commissions to be received by the Group from lenders.
Note 18. Loan and borrowings
Consolidated Consolidated
2023
$
2022
(Restated)
$
681,073
-
19,200,000 20,580,000
-
370,000
680,000
950,000
400,000
-
580,000
1,200,000
21,380,000 23,261,073
Current
Bank loan (i)
Loans received for commercial lending (ii)
Loans received in advance for commercial lending (iii)
Convertible debts (v)
Loans from other lenders (vi)
Loans from related parties (vii)
39
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 18. Loan and borrowings (continued)
Non-current
Loans received for commercial lending (ii)
Loans from other lenders (vi)
Loans from financial institution (iv)
Consolidated Consolidated
2023
$
2022
(Restated)
$
650,000
3,780,000
200,000
-
59,229,601 50,222,064
63,009,601 51,072,064
i) The bank loan borrowed from National Australia Bank was renewed in May 2020. The repayment term of the loan is 3
years and expired on 31 March 2023. The interest rate is 7.088% per annum with principal and interest repayments. The
loan is secured by guarantee and indemnity given by N1 Realty Pty Ltd and Sydney Boutique Property. The outstanding
loan balance as at 30 June 2023 is nil (30 June 2022: $681,073). Upon disposal of SBP rent roll, the NAB loan was fully
repaid using the proceeds from the sale of the SBP rent roll and internal funds.
ii) Loans received for commercial lending are the funds being raised for commercial loan lending to customers. They are
unsecured. The loan terms of the loans are from 6 months to 2 years. Interest rates are fixed rate within each loan term,
and the interest range is from 6% per year to 10% per year depends on the different loan terms. The outstanding loan
balance as at 30 June 2023 is $22,980,000 (30 June 2022 is $21,230,000).
iii) Loan received in advance for commercial lending
This represents fund received before 30 June 2023, although actual loan has not commenced until 1 July 2023. No interest
has been charged as of 30 June 2023.
iv) Loans received from financial institutions
On 1 July 2021, N1 Holdings Limited raised $35 million in debt capital provided under a debt facility between the Company
and GCI SME Mortgage Fund (GCI Facility). On 2 November 2021, the facility limit was increased by a further $20 million
to the company’s previously announced $35 million debt facility, bringing the total debt facility limit to $55 million.
The GCI Facility was initially recognised at the amounts received in cash from the lender, net of transaction costs. It has
been subsequently measured at amortised costs using the effective interest method.
The Facility is interest only with a term of 24 months with an interest rate at 7.9% plus 30 days BBSW per annum. The
Facility contains a number of undertakings and is secured by a general security deed over the Group’s assets.
On 17 March 2023, the Group signed the Deed of Amendment and Restatement of the GCI Facility to extend the loan
period for another 24 months to July 2025.
As of 30 June 2023, the Company has drawn down $50.6 million (FY22: $50.6 million) of the $55 million facility limit (FY22:
$55 million facility limit).
On 25 January 2023, N1 Holdings Limited raised $10 million in debt capital provided under a debt facility between the
Company and FC Capital (FC Facility). As of 30 June 2023, the Company has drawn down $9 million of the $10 million
FC Facility.
The facility operates on an interest-only basis, spanning a duration of 24 months. The applicable interest rate is 9.2% plus
the greater of 2.8% per annum and the Australian Bank Bill Swap Reference Rate as administered by ASX Benchmarks
Pty Limited.
40
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 18. Loan and borrowings (continued)
v) Convertible debts
As at the beginning of the period
Converted to ordinary shares
Converted to loan received for commercial lending
As at end of the period
Consolidated Consolidated
2023
$
2022
(Restated)
$
370,000
(300,000)
(70,000)
1,370,000
(1,000,000)
-
-
370,000
In FY17, the Company issued 1.85 million unlisted unsecured convertible notes in exchange for a cost fund of $370,000.
The holders of the convertible notes may choose to convert the notes to shares in the Company at $0.20 per share at any
time before the maturity date, which was extended to 11 May 2021, then further extended to 11 May 2023.
On 27 September 2017, the Company issued 5 million unlisted unsecured convertible notes with a total value of
$1,000,000. On 20 April 2022, these 5 million convertible notes were converted to shares in the Company at a price of
$0.20 per share, increasing share capital by $1,000,000.
On 17 August 2022, 1 million convertible notes were converted to shares in the Company at a price of $0.20 per share,
increasing share capital by $200,000. On 5 September 2022, 500,000 convertible notes were converted to shares in the
company at a price of $0.20 per share, increasing share capital by $100,000. The interest rate payable on outstanding
convertible notes is a fixed interest rate of 8%.
On 11 May 2023, 350,000 of the convertible notes had not converted to shares. A 2-year fixed term loan agreement has
been signed and the loan amount is $70,000 with a fixed interest of 10%. This has been now recorded as part of the loans
received for commercial lending.
vi) Loans from other lenders
Loans from other lenders consist of five unsecured loans from non-related parties with principal amount from $100,000 to
$380,000. Repayment terms are from 6 months to 2 years and interest rates vary from 5% to 8%. The outstanding loan
balance as at 30 June 2023 is $580,000 (30 June 2022 is $880,000).
vii) Loans from related parties
Loans from related parties consist of three unsecured loans from related parties with principal amount from $50,000 to
$600,000. Repayment terms are within 1 years and interest rates are fixed at 8% per year. The outstanding loan balance
as at 30 June 2023 is $1,200,000 (30 June 2022 is $950,000).
Note 19. Deferred income
Current liabilities
Prepaid interest from commercial borrowers
Consolidated
2023
$
2022
(Restated)
$
2,280,466
1,685,369
41
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 20. Provisions
Current liabilities
Employee benefit provision - current
Refund liabilities (i)
Non-current liabilities
Employee benefit provision
Movement of provision for refunds
Beginning of the year
Additions/(Reductions) during the year
Ending of the year
Consolidated
2023
$
2022
(Restated)
$
116,573
122,795
141,916
100,910
239,368
242,826
204,150
180,956
2023
$
2022
$
100,910
21,885
55,102
45,808
122,795
100,910
(i) Refund liabilities
Refund liabilities represent the estimated upfront commission to be clawed back by lenders if the mortgage loans are
terminated before the clawback period as defined by lenders, which are generally between 18 to 24 months.
Critical accounting estimates and Judgements - Clawback Receivable and Provision
There is potential for origination commissions to be clawed back by lenders after loans have settled. In the event a lender
claws back the commission, a corresponding clawback will be deducted from the authorised brokers contracted by the
Group where the clawback relates to a broker derived borrower. As a result, the group assess the probability of the
clawbacks and determines both provision for clawbacks and clawback receivable from agents at each reporting date. The
provision is based on the historical record of actual clawback and recovery. The probability used in estimate of the
clawbacks is 13.20% (FY22: 9.98%).
Provision for employee benefits
Provision for employee benefits represents amounts accrued for annual leave and long service leave.
The current portion for this provision includes the total amount accrued for annual leave entitlements and the amounts
accrued for long service leave entitlements that have vested due to employees having completed the required period of
service. Based on past experience, the Group does not expect the full amount of annual leave or long service leave
balances classified as current liabilities to be settled within the next 12 months. However, these amounts must be classified
as current liabilities since the Group does not have an unconditional right to defer the settlement of these amounts in the
event employees wish to use their leave entitlement.
The non-current portion for this provision includes amounts accrued for long service leave entitlements that have not yet
vested in relation to those employees who have not yet completed the required period of service. The probability of long
service leave being taken is based on historical data.
42
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 21. Issued capital
Fully paid ordinary shares
Consolidated
2023
$
2022
(Restated)
$
6,954,061
6,654,061
Consolidated
2023
Shares
2022
(Restated)
Shares
2023
$
2022
(Restated)
$
Issued capital
88,055,573 86,555,573
6,954,061
6,654,061
Movements in ordinary share capital
Details
Date
Shares
$ per share
$
Balance
Conversion of convertible notes
Balance
Conversion of convertible notes
Conversion of convertible notes
1 July 2021
20 April 2022
81,555,573
5,000,000
$0.2
5,654,061
1,000,000
30 June 2022
17 August 2022
5 September 2022
86,555,573
1,000,000
500,000
$0.2
$0.2
6,654,061
200,000
100,000
6,954,061
Balance
30 June 2023
88,055,573
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and
the Company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Capital management
Management controls the capital of the group in order to maintain a sustainable debt to equity ratio, generate long-term
shareholder value and ensure that the group can fund its operations and continue as a going concern.
The Group’s debt and capital include ordinary share capital, convertible notes and other financial liabilities, supported by
financial assets.
The consolidated entity is subject to certain financing arrangements covenants and meeting these is given priority in all
capital risk management decisions. There have been no events of default on the financing arrangements during the
financial year.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital
structure in response to changes in these risks and in the market. These responses include the management of debt
levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control the capital of the Group since the prior
year. No debt has been retired during the current year.
43
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 22. Shared-based payment reserve
Shared-based payment reserve
Consolidated
2023
$
2022
(Restated)
$
206,524
206,524
The Group operated an Employee Option Plan during the period from 2017 to 2020. All options outstanding under the
Employee Option Plan expired on 14 December 2020. No options were exercised.
Share-based payments to employees are remeasured at the fair value of the instruments issued and amortised over the
vesting periods. Share-based payments to non-employees are remeasured at the fair value of goods or services
received or the fair value of the equity instruments issued, if it is determined that the fair value of the goods or services
cannot be reliably measured, and are recorded at the date that the goods or services are received. The corresponding
amount is recorded to the option reserve. The fair value of options is determined using the binomial approximation and
Black Scholes valuation methodology. The number of shares and options expected to vest is reviewed and adjusted at
the end of each reporting period such that the amount recognised for services received as consideration for the equity
instruments granted is based on the number of equity instruments that eventually vest.
Note 23. Retained earnings
Accumulated losses at the beginning of the financial year
Profit after income tax benefit for the year
Dividends paid (note 24)
Accumulated losses at the end of the financial year
Note 24. Dividends
Dividends paid during the financial year were as follows:
Dividends
Consolidated
2023
$
2022
(Restated)
$
(6,707,339)
340,945
(202,528)
(7,404,406)
697,067
-
(6,568,922)
(6,707,339)
Consolidated
2023
$
2022
(Restated)
$
202,528
-
On 23 September 2022, the directors declared an interim dividend of $0.0023 per ordinary share which has been paid on
28 October 2022.
Note 25. Financial risk management
The Group’s financial instruments consist mainly of deposits with banks, accounts receivable and payable, other payables,
loans and borrowings, convertible notes, and other financial liabilities.
44
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 26. Specific financial risk exposures and management
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk (interest rate risk), credit risk and liquidity risk.
The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the financial performance of the Group. The Group uses different methods to measure different
types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange
and other price risks, ageing analysis for credit risk and beta analysis in respect of investment portfolios to determine
market risk.
Risk management is carried out by senior finance executives ('Finance') under policies approved by the Board of Directors
('the Board'). These policies include identification and analysis of the risk exposure of the Group and appropriate
procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within the Group's operating
units. Finance reports to the Board on a monthly basis.
Market risk
Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting period
whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments.
The financial instruments primarily exposed the Group to interest rate risk are disclosed as below:
As of 30 June 2023, the Company has drawn down $50,625,000 of the $55 million facility limit from a financial institution
(Facility 1). The Facility was initially recognised at the amounts received in cash from the lender, net of transaction costs.
It has been subsequently measured at amortised costs using the effective interest method. The Facility is interest only
with a term of 24 months with an interest rate at 7.9% plus 30 days BBSW per annum. The Facility contains a number of
undertakings and is secured by a general security deed over the Company’s assets. An increase/decrease in interest
rates of 100 basis points would have an adverse/favourable effect on profit before tax of $506,000 per annum.
As of 30 June 2023, the Company has drawn down $9,038,000 of the $10 million facility limit established on 25 January
2023 from a financial institution (Facility 2). The facility operates on an interest-only basis, spanning a duration of 24
months. The applicable interest rate is 9.2% plus the greater of 2.8% per annum and the Australian Bank Bill Swap
Reference Rate as administered by ASX Benchmarks Pty Limited. An increase/decrease in interest rates of 100 basis
points would have an adverse/favorable effect on profit before tax of $90,380 per annum.
Other loans are fixed term with fixed interest rate, which were not tested for the interest rate risk.
The percentage change is based on the expected volatility of interest rates using market data and analysts’ forecasts.
Bank loans
Financial institution loans
Consolidated
2023
$
2022
(Restated)
$
681,073
-
59,229,601 50,625,000
59,229,601 51,306,073
The Group’s bank loan has been paid off on 10 March 2023, and there is nil bank loans as of 30 June 2023 (2022
(Restated): $785,853).
Loans received for commercial lending, from related parties, and other lenders, as disclosed in note 18, have fixed interest
rates ranging between 6% and 10%. These loans do not pose interest rate risk.
45
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 26. Specific financial risk exposures and management (continued)
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 of the financial asset at the reporting date is the carrying amount, net of any provisions for
impairment of those assets, as disclosed in the statement of financial position and notes to the consolidated financial
statements. The Group does not hold any collateral for trade and other receivables, but it holds the Australian properties
and other properties as collateral for commercial loan receivables. Collaterals held by the entity are real estate properties
located in Australia. These include residential properties, commercial properties and lands. The total value as of 30 June
2023 is $177,065,000.
The Group has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables
through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered
representative across all customers of the Group based on recent sales experience, historical collection rates and forward-
looking information that is available.
Credit risk related to balances with banks and other financial institutions is managed by the Board. All the group’s cash
assets are deposited with Australian major banks.
The majority of outstanding receivables are commissions (including contract assets) owed from Aggregators Finsure
Finance and Insurance Pty Ltd (ABN 72 068 153 926) (Finsure), Vow Financial Pty Ltd (ABN 66 138 789 161) (Vow),
Specialist Finance Group (ABN 48 612 422 178) (SFG) and lenders who make commission payments directly to the Group.
Finsure, Vow and SFG are aggregators of retailing loan brokers and act as intermediaries between the group and the
lenders (financial institutions) to pass through the commission paid by those lenders to the Group.
The Group has credit risk associated with trade and other receivables ($2,768,093 as at 30 June 2023 and $1,582,182 as
at 30 June 2022), commercial loan receivable ($76,974,937 as at 30 June 2023 and $59,522,817 as at 30 June 2022),
and other investments ($140,382 as at 30 June 2023 and $170,382 as at 30 June 2022). These balances were within their
terms of trade respectively except for the loans made to 1 Australian private company of $646,300 in principle. A related
entity of KMP has expressed intention to acquire the entire remaining loan balance. The proposed transaction is at arm's
length and approved by the board of directors. The directors concluded that there is no expected credit losses provision
required as at 30 June 2023.
There are generally no guarantees against trade and other receivables, except where the amounts relate to existing
commercial loans. Collateral in the form of property is taken against commercial loans receivable to mitigate credit risk.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include
the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual
payments for a period greater than 1 year.
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash
equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously
monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
The table below reflects an undiscounted contractual maturity analysis for financial liabilities. Cash flows realised from
financial assets reflect Management’s expectation as to the timing of realisation. Actual timing may therefore differ from
that disclosed.
46
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 26. Specific financial risk exposures and management (continued)
Financial liability maturity analysis
Total
contractual
cash flows
$
No more
than 1 year
$
1-2 years
$
2-5 years
$
More than 5
years
$
2023
Trade and other payables
Convertible debts
Bank loan and other borrowings
Lease liabilities
2022 (Restated)
Trade and other payables
Convertible debts
Bank loan and other borrowings
Lease liabilities
1,290,142
-
-
-
84,389,601 21,380,000 63,009,601
343,798
1,290,142
-
630,623
286,825
86,310,366 22,956,967 63,353,399
-
-
-
-
-
-
-
-
-
-
Total
contractual
cash flows
$
No more
than 1 year
$
1-2 years
$
2-5 years
$
More than 5
years
$
1,278,210
370,000
-
-
74,366,073 22,891,073 51,475,000
559,977
1,278,210
370,000
962,458
331,833
-
-
-
70,648
-
-
-
-
-
76,976,741 24,871,116 52,034,977
70,648
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Note 27. Fair value measurement
AASB 13: fair value measurement requires the disclosure of fair value information by level of the fair value hierarchy,
which categorises fair value measurements into one of three possible levels based on the lowest level that an input which
is significant to the measurement can be categorised into as follows:
Level 1
Level 2
Level 3
Measurements based on quoted prices
(unadjusted) in active markets for
identical assets or liabilities that the
entity can access at the measurement
date.
Measurements based on inputs other
than quoted prices included in Level 1
that are observable for the asset or
liability, either directly or indirectly.
Measurements based on unobservable
inputs for the asset or liability.
The fair value of liabilities and the entity’s own equity instruments (excluding those related to share-based payment
arrangements) maybe valued, where there is no observable market price in relation to the transfer of such financial
instruments, by reference to observable market information where such instruments are held as assets. Where this
information is not available, other valuation techniques are adopted and, where significant, are detailed in the respective
note to the consolidated financial statements.
The Group has equity interests in Stropro Technologies Pty Ltd which are recognised and subsequently measured at fair
value Level 3 on a recurring basis. (Refer to note 12 for details)
47
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 28. Related party transactions
Parent entity
N1 Holdings Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 30.
Joint ventures
Interests in joint ventures are set out in note 31.
Key management personnel
Disclosures relating to key management personnel are set out in note 32 and the remuneration report included in the
directors' report.
Other Related Parties
Other related parties include entities controlled by the ultimate parent entity and entities over which key management
personnel have joint control.
Transactions with related parties
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated. The following transactions occurred with other related parties:
The following transactions occurred with related parties:
Sale of goods and services:
Management and processing fee from Funds Under Management
Rental property management income from a key management personnel
Payment for goods and services:
Finosource Sdn Bhd - Malaysia
Other transactions:
Sale of a motor vehicle to a key management personnel
Consolidated
2023
$
2022
(Restated)
$
1,174,197
1,379
1,209,182
1,389
113,599
102,990
-
16,000
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Current receivables:
Trade receivables from Funds Under Management
Consolidated
2023
$
2022
(Restated)
$
1,302,627
969,975
Loans to/from related parties
There were 2 unsecured loans totaling $1,200,000 as of 30 June 2023 (2022 (Restated): $950,000) from 2 related entities
of key management personnel. Term is in 1 year, and the fixed interest rate is 8% per annum. The total interest paid to
the related parties in 2023 is $91,375 (2022 (Restated): $25,864).
There were no loans to related parties at the current reporting date.
There were no loans to related parties at the previous reporting date.
48
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 28. Related party transactions (continued)
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Note 29. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Shared-based payment reserve
Accumulated losses
Total equity
Parent
2023
$
2022
(Restated)
$
(3,621,488)
(2,208,701)
(3,621,488)
(2,208,701)
Parent
2023
$
2022
(Restated)
$
302,766
42,277
27,345,094 34,823,739
213,662 22,705,357
20,213,701 24,168,329
17,124,119 16,824,119
206,524
(6,375,233)
206,524
(10,199,250)
7,131,393 10,655,410
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity provided a guarantee in relation to the GCI facility as at 30 June 2023. The parent entity had no
guarantees in relation to the debts of its subsidiaries as at 30 June 2022.
Contingent liabilities
The parent entity has given bank guarantees as at 30 June 2023 of $56,520 (2022 (Restated): $56,520) to Venus
Chatwood Pty Ltd for its lease.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2023 and 30 June 2022.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 33, except for the
following:
●
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
49
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 30. Interests in subsidiaries
The subsidiaries listed below have share capital consisting solely 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 Group. Each subsidiary’s
principal place of business is also its country of incorporation.
Name of subsidiary
Principal place of business /
Country of incorporation
N1 Loans Pty Ltd (i)
N1 Migration Pty Ltd (ii)
N1 Realty Pty Ltd (iii)
N1 Project Pty Ltd (iv)
N1 Venture Pty Ltd (v)
Sydney Boutique Property Pty Ltd (vi)
N1 Franchise Pty Ltd (vii)
N1 Capital Singapore Pte. Ltd (viii)
Everone Consulting Pty Ltd (ix)
Yizhihao (Shanghai) Business Consulting Co. Ltd (x)
Zillion Finance Pty Ltd (xi)
N1 WH2 Pty Ltd (xii)
N1 WH3 Pty Ltd (xiii)
N1SY Pty Ltd (xiv)
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Singapore
Australia
China
Australia
Australia
Australia
Australia
Ownership interest
2022
(Restated)
%
2023
%
100.00%
100.00%
100.00%
-
100.00%
-
-
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
-
100.00%
(i) N1 Loans was incorporated on 25 February 2010 and was initially owned by Mr Ren Hor Wong. Upon the completion
of the IPO on 18 March 2016, the company became fully owned by the Group.
(ii) N1 Migration Pty Ltd was incorporated on 14 September 2015 and has been fully owned by the Group since 11 April
2016.
(iii) N1 Realty was incorporated on 3 May 2016 and, since then, it has been fully owned by the Group.
(iv) N1 Project was incorporated on 12 December 2016 and, since then, it has been fully owned by the Group. The
company has been deregistered on 18 June 2023.
(v) N1 Venture was incorporated on 19 November 2014 and was acquired on 1 September 2016. Since then it has been
fully owned by the Group.
(vi) Sydney Boutique Property Pty Ltd was acquired on 14 November 2016. It has been fully owned by the Group since
acquisition. The Group has signed a contract to dispose its rent roll assets held under Sydney Boutique Properties Pty Ltd
on 24 November 2022 and to discontinue the property management business at completion of the transaction on 10 March
2023.
(vii) TACQ International Pty Ltd was incorporated on 21 July 2017 and renamed to N1 Franchise Pty Ltd on 5 March 2018.
It has been fully owned by the group since incorporation. The company has been deregistered on 18 June 2023.
(viii) N1 Capital Singapore Pte. Ltd was incorporated on 1 February 2019 and it has been fully owned by the group since
incorporation.
(ix) Everone Consulting Pty Ltd was incorporated on 14 May 2019 and it has been fully owned by the group since
incorporation.
(x) Yizhihao (Shanghai) Business Consulting Co. Ltd was incorporated on 8 August 2019 and it has been fully owned by
the group since incorporation.
(xi) Zillion Finance Pty Ltd was acquired on 30 July 2020. It has been fully owned by the Group since acquisition.
(xii) N1 WH2 Pty Ltd was incorporated on 6 June 2021, it has been fully owned by the Group since incorporation.
50
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 30. Interests in subsidiaries (continued)
(xiii) N1 WH3 Pty Ltd was incorporated on 12 January 2023, it has been fully owned by the Group since incorporation.
(xiv) N1SY Pty Ltd was incorporated on 8 December 2021, it has been fully owned by the Group since incorporation.
Note 31. Interests in joint ventures
Interests in joint ventures are accounted for using the equity method of accounting. Information relating to joint ventures
that are material to the Group are set out below:
Name
Principal place of business /
Country of incorporation
Ownership interest
2022
(Restated)
%
2023
%
Aura N1 Lending Pty Ltd
Australia
-
50.00%
Aura N1 Lending Pty Ltd was incorporated on 23 July 2020, it has been a joint venture of the Group since its incorporation.
Aura N1 Lending Pty Ltd had no trading activity during the period. $1 in share capital was invested in Aura N1 Lending
Pty Ltd by N1 Loans Pty Ltd. The company has deregistered on 18 December 2022.
Note 32. Key management personnel
Other key management personnel
Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly
or indirectly, including any Director (whether executive or otherwise) of that entity are considered KMP.
Compensation
Please refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration paid or payable
to each member of the Group’s KMP for the year ended 30 June 2023. The total of remuneration paid to or payable to
KMP of the Group during the year was:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Dividend paid
Short-term employee benefits
Consolidated
2023
$
2022
(Restated)
$
846,525
65,659
19,532
118,307
749,823
57,849
22,504
-
1,050,023
830,176
These amounts include fees and benefits paid to non-executive directors as well as all salary, paid leave benefits, fringe
benefits and cash bonuses awarded to executive directors and other key management personnel.
Post-employment benefits
These amounts represent amounts paid under the defined superannuation contribution.
Other long-term benefits
These amounts represent long service leave benefits accruing during the year.
51
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 32. Key management personnel (continued)
Dividend paid
These amounts represent the dividend payment to the KMP during the year.
Note 33. Other principal accounting policies
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.
Basis of preparation
These general purpose consolidated financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act
2001, as appropriate for for-profit oriented entities. These consolidated financial statements also comply with International
Financial Reporting Standards as issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The consolidated financial statements have been prepared under the historical cost convention.
Critical accounting estimates
The preparation of the consolidated financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
consolidated financial statements, are disclosed in note 34.
Parent entity information
In accordance with the Corporations Act 2001, these consolidated financial statements present the results of the Group
only. Supplementary information about the parent entity is disclosed in note 29.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of N1 Holdings Limited
('Company' or 'parent entity') as at 30 June 2023 and the results of all subsidiaries for the year then ended. N1 Holdings
Limited and its subsidiaries together are referred to in these consolidated financial statements as the 'Group'.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted
by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity
attributable to the parent.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group
recognises the fair value of the consideration received and the fair value of any investment retained together with any gain
or loss in profit or loss.
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of
the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items
measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items
measured at fair value are reported at the exchange rate at the date when fair values were determined.
52
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 33. Other principal accounting policies (continued)
Exchange differences arising on the translation of monetary items are recognised in profit or loss.
Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive
income to the maximum extent that the underlying gain or loss can be recognised in other comprehensive income,
otherwise the exchange difference is recognised in the profit or loss.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Group's
normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after
the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a
liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities
are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Trade and other receivables
Trade 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. Trade receivables are generally due for settlement within
30 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Joint ventures
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net
assets of the arrangement. Investments in joint ventures are accounted for using the equity method. Under the equity
method, the share of the profits or losses of the joint venture is recognised in profit or loss and the share of the movements
in equity is recognised in other comprehensive income. Investments in joint ventures are carried in the statement of
financial position at cost plus post-acquisition changes in the Group's share of net assets of the joint venture. Goodwill
relating to the joint venture is included in the carrying amount of the investment and is neither amortised nor individually
tested for impairment. Income earned from joint venture entities reduce the carrying amount of the investment.
Impairment of assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired.
The assessment will include the consideration of external and internal sources of information. If such an indication exists,
an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the
asset’s fair value less costs of disposal and value in use, to the asset’s carrying amount. Any excess of the asset’s carrying
amount over its recoverable amount is recognised immediately in profit or loss.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for intangible assets with indefinite lives and intangible assets not yet available
for use.
53
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 33. Other principal accounting policies (continued)
Employee benefits
Retirement benefit obligations
All employees of the Group receive defined contribution superannuation entitlements, for which the Group pays the fixed
superannuation guarantee contribution to the employee‘s superannuation fund of choice. All contributions in respect of
employees’ defined contribution entitlements are recognised as an expense when they become payable. The Group’s
obligation with respect to employees’ defined contribution entitlements is limited to its obligations for any unpaid
superannuation guarantee contributions at the end of the reporting period. All obligations for unpaid superannuation
guarantee contributions are remeasured at the (undiscounted) amounts expected to be paid when the obligation is settled
and are presented as current liabilities in the Group’s statement of financial position.
Comparative figures
When required by accounting standards, comparative figures have been adjusted to conform to changes in presentation
for the current financial year.
Where the Group retrospectively applies an accounting policy, makes a retrospective restatement or reclassifies items in
its consolidated financial statements, an additional (third) statement of financial position as at the beginning of the
preceding period in addition to the minimum comparative financial statement is presented.
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the Company.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part
of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
New Accounting Standards and Interpretations not yet mandatory or early adopted
The group has adopted all of the new and revised standards and interpretations, including amendments to the existing
standards issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operation and
effective for the current reporting period. The adoption of these amendments and new standards has not resulted in any
significant changes to the group’s accounting policies or any significant effect on the measurement or disclosure of the
amounts reported for the current or prior reporting period.
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2023. These
standards, amendments or interpretations are not expected to have a material impact on the Group in the current or future
reporting periods and on foreseeable future transactions.
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2023. The Group's
assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the Group,
are set out below.
54
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 34. Critical accounting judgements, estimates and assumptions
The preparation of the consolidated financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts in the consolidated financial statements. Management continually evaluates
its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management
bases its judgements, estimates and assumptions on historical experience and on other various factors, including
expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting
judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the
respective notes) within the next financial year are discussed in the relevant notes and below.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may
have, on the Group based on known information. This consideration extends to the nature of the products and services
offered, customers, supply chain, staffing and geographic regions in which the Group operates. Other than as addressed
in specific notes, there does not currently appear to be either any significant impact upon the consolidated financial
statements or any significant uncertainties with respect to events or conditions which may impact the Group unfavourably
as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement
is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the
underlying asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods
to be included in the lease term. In determining the lease term, all facts and circumstances that create an economical
incentive to exercise an extension option, or not to exercise a termination option, are considered at the lease
commencement date. Factors considered may include the importance of the asset to the Group's operations; comparison
of terms and conditions to prevailing market rates; incurrence of significant penalties; existence of significant leasehold
improvements; and the costs and disruption to replace the asset. The Group reassesses whether it is reasonably certain
to exercise an extension option, or not exercise a termination option, if there is a significant event or significant change in
circumstances.
Note 35. Remuneration of auditors
During the financial year, the following fees were paid or payable for services provided by auditors of the Group:
Remuneration of the auditor for:
Audit or review of the consolidated financial statements
Note 36. Contingent liabilities and contingent assets
Consolidated
2023
$
2022
(Restated)
$
93,070
97,312
In relation to the leases entered by the Group, as disclosed in note 14, the Group has given bank guarantees as at 30
June 2023 of $237,221 (2022 (Restated): $237,221) to various landlords.
There are no contingent assets as at 30 June 2023 (2022 (Restated): nil).
Note 37. Income tax expense
(a) Income Tax
The income tax expense (benefit) for the year comprises current income tax expense (benefit) and deferred tax expense
(benefit).
Current income tax expense (benefit) charged to profit or loss is the tax payable (recoverable) on taxable income (loss).
Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation
authority.
55
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 37. Income tax expense (continued)
Deferred income tax expense (benefit) reflects movements in deferred tax asset and deferred tax liability balances during
the year as well as unused tax losses.
Current and deferred income tax expense (benefit) is charged or credited outside profit or loss when the tax relates to
items that are recognised outside profit or loss.
Except for business combinations, no deferred income tax is recognised from the initial recognition of an asset or liability,
where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset
is realised or the liability is settled and their measurement also reflects the manner in which Management expects to
recover or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
(i) The components of tax (benefit)/expense comprise:
Current income tax
Deferred income tax
(ii) The prima facie tax on profit from ordinary activities before income tax is reconciled to
income tax as follows:
Profit/(loss) before income tax
Tax rate at 25% (2022 (Restated): 25%)
Entertainment
Goodwill impairment
Depreciation
Utilisation of prior year tax losses
Tax loss from controlled foreign companies
Recognition of deferred tax assets on tax losses
Income tax (benefit)/expense
2023
$
2022
(Restated)
$
-
(231,178)
195,254
(195,254)
(231,178)
-
109,767
697,067
27,441
-
82,494
-
(108,604)
(1,331)
(231,178)
174,266
975
-
935
(176,176)
-
-
(231,178)
-
As at 30 June 2023, the tax loss carried forward for the Group is $4,953,870 (2022 (Restated): $5,112,171).
The Group has been tax consolidated since 11 March 2016.
(b) Tax position
The Group’s current tax payable is $nil (2022 (Restated): $nil)
56
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 38. Deferred tax assets
Deferred tax liabilities
2023
Trailing income
Intangible assets
Investment - unrealised capital gain
Balance at 30 June 2023
2022 (Restated)
Trailing income
Intangible assets
Investment - unrealised capital gain
Balance at 30 June 2022
Deferred tax assets
2023
Clawback and accrued
Tax losses
Other temporary differences
Lease
Balance at 30 June 2023
2022 (Restated)
Clawback and accrued
Tax losses
Other temporary differences
Lease
Balance at 30 June 2022
Opening
balance
$
Charge to
income
statement
$
Charge to
equity
$
Closing
balance
$
239,518
80,609
14,482
63,040
(80,609)
-
334,609
(17,569)
-
-
-
-
302,558
-
14,482
317,040
Opening
balance
$
Charge to
income
statement
$
Charge to
equity
$
Closing
balance
$
69,723
128,441
15,061
169,795
(47,832)
(579)
213,225
121,384
-
-
-
-
239,518
80,609
14,482
334,609
Opening
balance
$
Charge to
income
statement
$
Charge to
equity
$
Closing
balance
$
15,997
99,511
192,733
26,368
(2,639)
223,529
(3,305)
(3,976)
334,609
213,609
-
-
-
-
-
13,358
323,040
189,428
22,392
548,218
Opening
balance
$
Charge to
income
statement
$
Charge to
equity
$
Closing
balance
$
9,085
77,993
101,614
24,533
6,912
21,518
91,119
1,835
213,225
121,384
-
-
-
-
-
15,997
99,511
192,733
26,368
334,609
57
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 38. Deferred tax assets (continued)
Critical accounting estimates and Judgements - Taxation
The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the
applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of
the reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
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. However, deferred tax liabilities
are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it
arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of
the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when
the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those
temporary differences and losses.
Note 39. Reconciliation of profit after income tax to net cash from/(used in) operating activities
Profit after income tax benefit for the year
Adjustments for:
Depreciation and amortisation
Impairment of goodwill
Write off of investments
Net gain on disposal of investments
Net gain on disposal of property, plant and equipment
Interest expense for financing activities
Change in operating assets and liabilities:
Increase in trade and other receivables
Increase in contract assets
Increase in deferred tax assets
Decrease/(increase) in prepayments
Increase in commercial loan receivables
Increase in trade and other payables
Increase/(decrease) in deferred tax liabilities
Increase/(decrease) in employee benefits
Increase in other operating assets
Increase/(decrease) in contract liabilities
Increase in funds received for commercial loans
Increase in other operating liabilities
Consolidated
2023
$
2022
(Restated)
$
340,945
697,067
404,352
329,975
-
(10,423)
-
181,766
449,675
-
50
(10,192)
(1,311)
284,656
(1,071,253)
(252,164)
(213,609)
(108,465)
(297,215)
(381,733)
(121,384)
99,671
(17,452,120) (52,988,427)
179,093
121,384
110,255
2,574
237,053
11,227,537 62,070,000
1,403,218
11,933
(17,568)
(2,150)
(57,206)
9,018
616,982
Net cash from/(used in) operating activities
(6,062,450) 11,854,434
58
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2023
Note 39. Reconciliation of profit after income tax to net cash from/(used in) operating activities (continued)
The negative cash flow of current period was a result of "Net cash from commercial lending” of $6,224,583. “Net cash from
commercial lending” is more accurately interpreted as the net of balance sheet capital lent and repaid by borrowers, minus
the net of capital raised and repaid by investors in the form of debt on balance sheet. Technically, the higher outflow the
“Net cash from commercial lending” means line item is, the more capital is lent than repaid, taking into account of capital
raised or repaid to investors. Adjusted net cash from operating activities hence is positive $162,133.
Note 40. Changes in liabilities arising from financing activities
Consolidated
Balance at 1 July 2021 (Restated)
Net cash used in financing activities
Other changes
Balance at 30 June 2022 (Restated)
Net cash used in financing activities
Other changes
Loans and
borrowings
$
Lease
liability
$
Total
$
3,435,853
(504,780)
(1,000,000)
1,288,576
(392,887)
66,769
4,724,429
(897,667)
(933,231)
1,931,073
(871,072)
(480,001)
962,458
(363,986)
32,151
2,893,531
(1,235,058)
(447,850)
Balance at 30 June 2023
580,000
630,623
1,210,623
Note 41. Events after the reporting period
On 7 September 2023, the Group has received commitments for an additional $10 million in debt capital.
No other matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly affect
the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
59
N1 Holdings Limited
Directors' declaration
30 June 2023
In the directors' opinion:
●
●
●
●
the attached consolidated financial statements and notes comply with the Corporations Act 2001, the Accounting
Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached consolidated financial statements and notes comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board as described in note 33 to the consolidated financial
statements;
the attached consolidated financial statements and notes give a true and fair view of the Group's financial position as
at 30 June 2023 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Ren Hor Wong
Executive Chairman and CEO
26 September 2023
60
Take the lead
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF N1 HOLDINGS LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of N1 Holdings Limited (the Company and its subsidiaries (the Group)) which
comprises the consolidated statement of financial position as at 30 June 2023, the consolidated statement of profit
or loss and other comprehensive income, 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 the directors’ declaration.
In our opinion, the accompanying financial report of N1 Holdings Limited is in accordance with the Corporations Act
2001, including:
a. giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its financial performance
for the year then ended, and
b. complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our
report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Brisbane
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240 Queen Street
Brisbane QLD 4000
T + 61 7 3085 0888
Melbourne
Level 10
530 Collins Street
Melbourne VIC 3000
T + 61 3 8635 1800
Perth
Level 18
197 St Georges Terrace
Perth WA 6000
T + 61 8 6184 5980
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Sydney NSW 2000
T + 61 2 8059 6800
SW Audit ABN 39 533 589 331. Liability limited by a scheme approved under Professional Standards
Legislation. SW Audit is an independent member of ShineWing International Limited.
sw-au.com
61
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.
Take the lead
Carrying value of commercial loan receivables
Area of focus
How our audit addressed the area of focus
As disclosed in Note 11 of the financial report, the
Group holds commercial loan receivables of
$76,974,937 (2022 (Restated): $59,522,817).
The requirements of AASB 9 Financial Instruments
involve significant judgements and estimates in
assessing expected credit losses to be incurred
based on past performance, the current economic
environment, as well as expectations around future
conditions.
The carrying value of commercial loan receivables
is considered a key audit matter due to the
subjectivity involved in determining the expected
credit losses and judgements made by
management.
Our procedures performed, amongst others:
-
-
-
-
-
obtained understanding and tested the control
environment around the initial recognition and
measurement of commercial loan receivables;
tested a sample of commercial loan receivables to
ensure that the balance at the year end complies
with the requirements of AASB 9 Financial
Instruments;
evaluated whether the expected credit loss model
prepared by management complies with the
requirements of AASB 9 Financial Instruments;
held discussions with management regarding non-
performing loans; and
verified management’s assessment of expected
credit losses, including checking the fair values of
the collateral assets valued by real estate valuation
specialists, in support of the recoverability of the
loan.
We assessed the adequacy and appropriateness of the
disclosures in the financial statements,
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information included in
the Group’s annual report for the year ended 30 June 2023, but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly 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.
62
Take the lead
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 Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
63
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them, all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most significance in
the audit of the financial report of the current period and are therefore the key audit matters. We describe these
matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Take the lead
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 12 to 16 of the directors’ report for the year ended 30
June 2023.
In our opinion, the Remuneration Report of N1 Holdings Limited for the year ended 30 June 2023 complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
SW Audit
Chartered Accountants
Yang (Bessie) Zhang
Partner
Sydney, 26 September 2023
64
N1 Holdings Limited
Shareholder information
30 June 2023
Additional information required by the Australian Securities Exchange Ltd (ASX) and not disclosed elsewhere in this
report is set out below. The information is current as at 15 September 2023.
1.
a.
b.
c.
Shareholding
Distribution of Shareholders
Category (size of holding)
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and Over
Total
Number of
shares
1,143
48,417
831,283
4,904,437
82,270,292
88,055,573
%
0.00%
0.05%
0.94%
5.57%
93.43%
Number of
holders
6
18
85
126
55
290
%
2.07%
6.21%
29.31%
43.45%
18.97%
The number of shareholdings held in less than marketable parcels is 17,153.
The names of the substantial shareholders listed in the holding company’s register are:
Shareholder
REN H WONG PTY LTD
SIEW BEE TONG
Total
d.
20 Largest Shareholders — Ordinary Shares
Shareholder
REN H WONG PTY LTD
CITICORP NOMINEES PTY LIMITED
MR YOKE MENG CHAN
TIN FAMILY SMSF PTY LTD
BNP PARIBAS NOMS PTY LTD
MS YUEXIAN ZHAO
MR HO YAN MAK
JIANRONG SUN
SUPERHERO SECURITIES LIMITED
1.
2.
3.
4
5
6
7
8
9
10 MR TONG CHAI TAN
11 MS MUN CHING WANG
12 HUEY WONG
13
14 MR ENG LEK LAU
15
16 MR ANDREW THOMAS BARRY KENNEDY
17
18
19. SILOTUS PTY LTD
20. AUSTRALIA WIDE DEVELOPMENT GROUP PTY LTD
TAN (NSW) PTY LTD
LC FAMILY SUPER PTY LTD
IPOH YAP SMSF CO PTY LTD MISS
STAR PLUS SUPER PTY LTD
Total
65
Number of
Ordinary Fully
Paid Shares
Held
50,000,000
5,000,000
55,000,000
% Held
of Issued
Ordinary
Capital
56.78%
5.68%
62.46%
Number of
Ordinary Fully
Paid Shares
Held
50,000,000
5,125,764
4,313,500
2,614,940
2,297,367
1,388,718
1,361,982
1,357,500
1,072,389
908,500
908,500
820,798
800,000
713,524
709,468
535,706
500,000
500,000
500,000
500,000
76,928,656
% Held
of Issued
Ordinary
Capital
56.78%
5.82%
4.90%
2.97%
2.61%
1.58%
1.55%
1.54%
1.22%
1.03%
1.03%
0.93%
0.91%
0.81%
0.81%
0.61%
0.57%
0.57%
0.57%
0.57%
87.36%
N1 Holdings Limited
Shareholder information
30 June 2023
e.
Escrowed Shares
No
f.
Vested Options
No
g.
Convertible notes
The Company previously had 350,000 unlisted, unsecured convertible notes on issue. On 11 May
2023, the amount outstanding under the convertible notes (being $70,000) was converted into loan
agreement for a 2-year fixed term loan and an interest rate of 10%.
h.
Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary shares
–
Each ordinary share is entitled to one vote when a poll is called, otherwise each
member present at a meeting or by proxy has one vote on a show of hands.
There are no other classes of equity securities.
i.
Current on-market buy-back
There is no current on-market buy-back in relation to the Company’s ordinary shares.
66
N1 Holdings Limited
Shareholder information
30 June 2023
67