N1 Holdings Limited
Corporate directory
30 June 2024
N1 Holdings Limited
Corporate directory
30 June 2024
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
Suite 502, 77 King Street Sydney NSW 2000
+61 2 92626262
Share register
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000
Auditor
SW Audit
Level 7, Aurora Place, 88 Phillip Street
Sydney NSW 2000
Solicitors
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 2024 corporate governance statement reflects the corporate
governance practices in place during the financial year ended 30 June 2024. The
2024 corporate governance statement was approved by the board on 20 September
2024. 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/
N1 Holdings Limited
Contents
30 June 2024
N1 Holdings Limited
Contents
30 June 2024
3
N1 Holdings Limited
Contents
30 June 2024
4
N1 Holdings Limited
Contents
30 June 2024
5
Directors’ report
6
Auditor's independence declaration
18
Consolidated statement of profit or loss and other comprehensive income
19
Consolidated statement of financial position
20
Consolidated statement of changes in equity
21
Consolidated statement of cash flows
22
Notes to the consolidated financial statements
23
Consolidated entity disclosure statement
55
Directors' declaration
56
Independent auditor's report to the members of N1 Holdings Limited
57
Shareholder information
62
General information
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 20
September 2024. The directors have the power to amend and reissue the financial statement.
N1 Holdings Limited
Directors' report
30 June 2024
6
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 2024.
Dividends
Dividends paid, recommended or declared during the financial year are nil (2023: $202,528).
Principal activities
During the financial year the principal continuing activities of the Group consisted of:
●
commercial lending business;
●
mortgage broking services;
●
advisory, fund management and trustee services;
●
migration services; and
●
real estate property sale.
Review of operations
During FY24, the Group generated revenue of $18.45m (FY23: $13.99m), which represents a growth of 31.8% to revenue
in FY23 and delivered a net profit after tax of $1,085,355 (FY23: $340,945). Normalised EBITDA of the Group is $1.18m
(FY23: $1.06m).
Consolidated Group
2024
$
2023
$
Profit before income tax
688,723
109,767
Add: Interest expense – Corporate*
73,478
181,766
Add: Depreciation and amortisation
309,393
440,606
Add: Once off write-off of realty service income due to lost management*
108,986
-
Add: Goodwill impairment resulting from sale of rent roll
-
329,975
Normalised EBITDA
1,180,581
1,062,114
* 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 and bank loans, as well as interest expenses in relation to
AASB 16 Leases.
* A once off amount of $108,986 was written off from the total amount of realty service income due to rent roll sales
retention clause. The retention period ended on 10 December 2023.
During FY24, the Group’s Commercial lending business continued to be the major revenue generator, accounting for
93.96% of the Group’s total revenue. A complete breakdown of the Group’s revenue for the period is as the follows:
●
Commercial lending revenue was $17,332,786 (FY23: $11,804,622), which equals to 93.96% (FY23: 84.35%) of the
Group’s revenue. This is an increase of 9.60% over the prior period.
●
Mortgage broking revenue (including trail commissions) was $961,386 (FY23: $1,347,310), which equals to 5.21%
(FY23: 9.63%) of the Group’s revenue;
●
Advisory service revenue was $119,209 (FY23: $359,000), which equals to 0.65% (FY23: 2.57%) of the Group’s
revenue; and
●
Real estate and migration services revenue were $33,426 (FY23: $482,642), which equals to 0.18% (FY23: 3.45%)
of the Group’s revenue.
N1 Holdings Limited
Directors' report
30 June 2024
7
The reported financial year has marked a milestone of streamlining our costs and operations which has greatly
enhanced the resource allocation and productivity of the business, as evident by the Company’s significant revenue and
profitability growth. Whilst the management does not speculate on future rates movements, we continue to focus on
funding capacity and cost of funds, in order to further strengthen the Net Interest Margin (NIM), with strong confidence of
the Company's ability to scale new heights. We will continue to push growth and seek to gain competitive advantage by
wielding economies of scale.
As at the end of the reported period, the Company had access to and managed over $134 million in committed lending
capacity, consisting of approximately $30 million of balance sheet capital raised from private debt, $86 million under debt
facilities and approximately $18 million of mortgage fund under management. (Please note: the mortgage fund is not
consolidated into the Company’s financial statements. The mortgage fund is managed by N1 Venture Pty Ltd, a 100%
owned subsidiary of N1H). The Company has repaid a debt facility over $14.6m during the reporting period as part of the
cost of fund streamline strategy.
In the meantime, 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.
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.
N1 Holdings Limited
Directors' report
30 June 2024
8
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 $1,686,862 as at 30 June 2024 ($591,663 as at 30 June 2023).
At 30 June 2024, the Group’s current assets were $108,988,096 ($87,491,974 at 30 June 2023) and it’s current liabilities
were $30,384,751 ($25,550,095 at 30 June 2023). Non-current assets increased by $3,221,507 to $5,629,291 ($2,407,784
as at 30 June 2023) and non-current liabilities increased by $18,787,774 to $82,545,774 ($63,758,000 at 30 June 2023).
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 23 August 2024, the Group has received a commitment for an additional $20 million in debt capital.
On 06 September 2024, the Group has received a commitment for an additional $45 million in warehouse capital.
No other matters or circumstance has arisen since 30 June 2024 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.
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.
N1 Holdings Limited
Directors' report
30 June 2024
9
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
2024 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.
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)
N1 Holdings Limited
Directors' report
30 June 2024
10
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
exited
various
businesses
including
Copiko
Printing,
Sydneymove.com.au and Packers Unpackers.
Mr Wong holds a Bachelor of Engineering with Honours from University of New
South Wales.
Interest in shares and options
in the Company (Shares and
Options, respectively)
50,298,357 Shares
Directorships held in other
listed entities during the three
years prior to the current year
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 18 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
893,291 Shares
Directorships held in other
listed entities during the three
years prior to the current year
None
N1 Holdings Limited
Directors' report
30 June 2024
11
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
800,000 Shares
Directorships held in other
listed entities during the three
years prior to the current year
None
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
N1 Holdings Limited
Directors' report
30 June 2024
12
Meetings of directors
The number of meetings of the Company's Board of Directors ('the Board') held during the year ended 30 June 2024,
and the number of meetings attended by each director were:
Number
eligible to
attend
Number
attended
Ren Hor Wong
6
6
Jia Penny He
6
6
David Holmes
6
5
Frank Ganis
6
6
Remuneration report
Remuneration policy
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. Some individuals, however,
may choose 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.
N1 Holdings Limited
Directors' report
30 June 2024
13
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
Reward Type
Purpose
Link to performance
Fixed
remuneration
Salaries,
superannuatio
n and other
fixed benefits
To provide competitive
fixed remuneration set
with reference to role,
market and experience
Company and individual
performance are
considered during the
annual review
Short-term
incentive
Bonus paid in
cash
Rewards executives for
their contribution to
achievement of Group
outcome
Revenue of the Group
Long-term
incentive
Share options
Rewards executives for
their contribution to the
creation of shareholder
value over the longer
term
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.
N1 Holdings Limited
Directors' report
30 June 2024
14
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.
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 FY2024, 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
$20,000
$10,000
$12 million
$40,000
$20,000
$15 million
$60,000
$30,000
$18 million
$80,000
$40,000
$21 million
$100,000
$50,000
$24 million
$120,000
$60,000
Maximum achievable bonus is used in below calculation.
Fixed remuneration
Remuneration linked to performance
2024
2023
2024
2023
Directors and secretaries
Ren Hor Wong
81.01%
77.44%
18.99%
22.56%
Jia Penny He
76.92%
76.92%
23.08%
23.08%
David Holmes
100%
100%
0%
0%
Frank Ganis
100%
100%
0%
0%
The following tables provide employment details of persons who were, during FY2024, 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
3 months
Jia Penny He
Executive
Director, CFO
18/03/2016 - Ongoing
Permanent
3 months
David Holmes
Independent Non
Executive Director
15/01/2019 - Ongoing
Consultancy
agreement
10 business
days
Frank Ganis
Independent Non
Executive Director
01/09/2020 - Ongoing
Consultancy
agreement
10 business
days
N1 Holdings Limited
Directors' report
30 June 2024
15
Key terms of KMP contract
Chief Executive Officer
— The CEO receives fixed remuneration of $500,000 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 and travel benefit to the CEO with a total allowance of $12,000 per annual.
— 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.
Chief Financial Officer
— The CFO receives fixed remuneration of $195,000 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.
— The Company provide a travel benefit to the CFO with a total allowance of $5,000 per annual.
— 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 $72,000 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
2024
Short term employee benefits
Post-
employment
benefits
Long term
employee
benefits
Share based payments
Total
Salaries
Bonus
Other
Superannuation
Long service
leave
Options
Dividends
paid
Directors and Secretaries
Ren Hor Wong
$492,408
$40,000
-
$27,500
$34,233
$6,563
-
$600,704
Jia Penny He
$195,406
$20,000
-
$24,017
$7,574
$3,281
-
$250,278
David Holmes
$20,000
-
-
-
-
-
-
$20,000
Frank Ganis
$91,935
-
-
$10,065
-
-
-
$102,000
N1 Holdings Limited
Directors' report
30 June 2024
16
2023
Short term employee benefits
Post-
employment
benefits
Long term
employee
benefits
Share based payments
Total
Salaries
Bonus
Other
Superannuation
Long service
leave
Options
Dividends
paid
Directors and Secretaries
Ren Hor Wong
$411,850
$40,000
-
$28,361
$13,149
-
$115,686
$609,046
Jia Penny He
$210,771
$20,000
-
$23,100
$6,383
-
$1,632
$261,886
David Holmes
$41,154
-
-
$1,545
-
-
-
$42,699
Frank Ganis
$122,750
-
-
$12,653
-
-
$989
$136,392
Options and rights granted as remuneration
The options at the end of the current year are $9,844 (FY23: nil)
KMP shareholdings
The number of ordinary shares in the Company held by each KMP of the Group during the financial year is as follows:
2024
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
Ren Hor Wong
50,298,357
-
-
-
50,298,357
Jia Penny He
709,468
-
-
183,823
893,291
Frank Ganis
430,000
-
-
370,000
800,000
2023
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
Ren Hor Wong
50,298,357
-
-
-
50,298,357
Jia Penny He
709,468
-
-
-
709,468
Frank Ganis
430,000
-
-
-
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 2024.
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 2024.
N1 Holdings Limited
Directors' report
30 June 2024
17
Options and rights granted as remuneration
The terms and conditions relating to Options granted as remuneration during the year to KMP are as follows:
2024
Number of
options
beginning
of the year
Granted
No.
Exercised
during the
year
Lapsed
during the
year
Number of
options at
the end of
the year
Vested
Unvested
Ren Hor Wong
-
-
2,000,000
(500,000)
1,500,000
-
-
Jia Penny He
-
-
1,000,000
(250,000)
750,000
-
-
2023
Number of
options
beginning
of the year
Granted
No.
Exercised
during the
year
Lapsed
during the
year
Number of
options at
the end of
the year
Vested
Unvested
Ren Hor Wong
-
-
-
-
-
-
-
Jia Penny He
-
-
-
-
-
-
-
The fair value of Options granted as remuneration and as shown in the above table has been determined in accordance with Australian
Accounting Standards and will be recognised as an expense over the relevant vesting period to the extent that conditions for vesting
are satisfied.
Description of Options/rights issued as remuneration
A totalling of 3,000,000 performance rights share options were granted to CEO and CFO on 04 December 2023, and
the exercising price was $0.18. The Expiry dates are variance between one year to four years. The vesting conditions
including three portions:
— The executive should continuously work in the group
— The loan book should meet or exceed a certain amount before the expiry date
— The NIM (Net Interest Margin) should meet or exceed a certain percentage before the expiry date.
Option values at grant date were determined by applying the Binomial Approximation valuation methodology.
This concludes the remuneration report, which has been audited.
Auditor
SW Audit continues in office 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
20 September 2024
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
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
2024 there have been:
i.
no contraventions of the auditor independence requirements as set out in the Corporations Act
2001 in relation to the audit, and
ii. no contraventions of any applicable code of professional conduct in relation to the audit.
SW Audit
Chartered Accountants
Yang (Bessie) Zhang
Partner
Sydney, 20 September 2024
18
N1 Holdings Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2024
Consolidated
Note
2024
2023
$
$
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with
the accompanying notes
19
Revenue
5
18,446,807
13,993,574
Other income
6
107,046
96,354
Expenses
Interest expense
7
(12,047,306)
(8,142,187)
Employee cost
(2,573,372)
(2,557,214)
Consulting and referral fees
(1,119,833)
(1,265,240)
Professional fee
(593,830)
(499,509)
Sales and marketing
(437,292)
(191,215)
Depreciation and amortisation
8
(309,393)
(440,606)
Office and administrative expense
(274,916)
(195,649)
Loss on disposal/write-off of assets
(183,473)
-
Travel cost
(167,065)
(119,875)
Occupancy cost and utilities
(126,626)
(160,835)
Finance cost
8
(27,801)
(75,580)
IT and technology
(4,223)
(2,276)
Impairment loss on goodwill
-
(329,975)
Profit before income tax benefit
688,723
109,767
Income tax benefit
35
396,632
231,178
Profit after income tax benefit for the year
24
1,085,355
340,945
Other comprehensive income for the year, net of tax
-
-
Total comprehensive income for the year
1,085,355
340,945
Cents
Cents
Basic earnings per share
3
1.23
0.39
Diluted earnings per share
3
1.23
0.39
N1 Holdings Limited
Consolidated statement of financial position
As at 30 June 2024
Consolidated
Note
2024
2023
$
$
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
20
Assets
Current assets
Cash and cash equivalents
9
13,532,013
7,019,128
Trade and other receivables
10
1,920,843
2,837,458
Contract assets
11
292,745
324,039
Commercial loan receivables
12
93,059,428
76,974,937
Other financial assets
13
93,382
140,382
Other current assets
14
89,685
196,030
Total current assets
108,988,096
87,491,974
Non-current assets
Contract assets
11
827,044
886,204
Other financial assets
13
157,927
157,927
Property, plant and equipment
15
449,940
742,717
Deferred tax assets
36
627,811
231,178
Intangible assets
16
114,220
123,708
Commercial loan receivables
12
3,257,018
-
Other non-current assets
14
195,331
266,050
Total non-current assets
5,629,291
2,407,784
Total assets
114,617,387
89,899,758
Liabilities
Current liabilities
Trade and other payables
17
1,605,849
1,290,142
Contract liabilities
18
107,601
73,294
Loan and borrowings
19
25,825,780
21,380,000
Lease liabilities
273,151
286,825
Deferred income
20
2,357,146
2,280,466
Provisions
21
215,224
239,368
Total current liabilities
30,384,751
25,550,095
Non-current liabilities
Contract liabilities
18
312,306
200,451
Loan and borrowings
19
81,920,364
63,009,601
Lease liabilities
70,650
343,798
Provisions
21
242,454
204,150
Total non-current liabilities
82,545,774
63,758,000
Total liabilities
112,930,525
89,308,095
Net assets
1,686,862
591,663
Equity
Issued capital
22
6,954,061
6,954,061
Options reserve
216,368
206,524
Retained earnings
24
(5,483,567)
(6,568,922)
Total equity
1,686,862
591,663
N1 Holdings Limited
Consolidated statement of changes in equity
For the year ended 30 June 2024
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
21
Total equity
Issued
capital
Share-based
payment
reserve
Retained
profits
Consolidated
$
$
$
$
Balance at 1 July 2022
6,654,061
206,524
(6,707,339)
153,246
Profit after income tax benefit for the year
-
-
340,945
340,945
Other comprehensive income for the year, net of tax
-
-
-
-
Total comprehensive income for the year
-
-
340,945
340,945
Transactions with owners in their capacity as owners:
Conversion of convertible notes
300,000
-
-
300,000
Dividends paid (note 25)
-
-
(202,528)
(202,528)
Balance at 30 June 2023
6,954,061
206,524
(6,568,922)
591,663
Total equity
Issued
capital
Share-based
payment
reserve
Retained
profits
Consolidated
$
$
$
$
Balance at 1 July 2023
6,954,061
206,524
(6,568,922)
591,663
Profit after income tax benefit for the year
-
-
1,085,355
1,085,355
Other comprehensive income for the year, net of tax
-
-
-
-
Total comprehensive income for the year
-
-
1,085,355
1,085,355
Transactions with owners in their capacity as owners:
Share-based payments (note 23)
-
9,844
-
9,844
Balance at 30 June 2024
6,954,061
216,368
(5,483,567)
1,686,862
N1 Holdings Limited
Consolidated statement of cash flows
For the year ended 30 June 2024
Consolidated
Note
2024
2023
$
$
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
22
Cash flows from operating activities
Receipts from customers
19,970,027
13,418,714
Interest received from bank deposit
104,654
75,995
Payments to suppliers and employees
(4,847,880)
(5,125,815)
Net increase in fund lent as commercial loans
(19,779,523) (17,586,626)
Net increase in fund received for commercial loans
23,936,543
11,227,537
Interest and other finance costs paid for commercial loans
(12,001,627)
(8,072,255)
Net cash from/(used in) operating activities
37
7,382,194
(6,062,450)
Cash flows from investing activities
Purchase of property, plant and equipment
15
(14,121)
(84,082)
Purchase of Intangible assets
16
-
(8,260)
Loan to third parties
47,000
30,000
Proceeds from disposal of Sydney Boutique Property (SBP)
38,113
588,400
Net cash from investing activities
70,992
526,058
Cash flows from financing activities
Repayment of borrowings and loans
(580,000)
(871,072)
Payment of finance cost and interest
(54,492)
(149,615)
Dividends paid
25
-
(202,528)
Repayment of lease liabilities
(305,809)
(363,986)
Net cash used in financing activities
(940,301)
(1,587,201)
Net increase/(decrease) in cash and cash equivalents
6,512,885
(7,123,593)
Cash and cash equivalents at the beginning of the financial year
7,019,128
14,142,721
Cash and cash equivalents at the end of the financial year
9
13,532,013
7,019,128
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
23
Note 1. Principal accounting policies
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 2.
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 30.
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 2024 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.
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.
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 1. Principal accounting policies (continued)
24
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.
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.
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.
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.
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 1. Principal accounting policies (continued)
25
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 adopted by the Group
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.
New Accounting Standards and Interpretations not yet mandatory or early adopted
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 2024. 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 2024. 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.
The accounting policies that are material to the Group are set out below. The accounting policies adopted are consistent
with those of the previous financial year, unless otherwise stated.
Note 2. 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.
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.
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
26
Note 3. Earnings per share
Consolidated
2024
2023
$
$
Profit after income tax
1,085,355
340,945
Weighted average number of ordinary shares used in calculating basic and diluted earnings
per share
88,055,573
87,832,285
Basic earnings per share
1.23
0.39
Diluted earnings per share
1.23
0.39
Note 4. Operating segments
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 focuses on the property sales.
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.
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 4. Operating segments (continued)
27
Operating segment information
Financial
services
Real estate
services
Migration
services
Other
Total
Consolidated - 2024
$
$
$
$
$
Revenue
Revenue
18,413,381
1,381
32,045
-
18,446,807
Interest income
78,417
-
260
25,976
104,653
Other income
(9)
-
-
2,402
2,393
Total revenue
18,491,789
1,381
32,305
28,378
18,553,853
Segment operating profit/(loss) before
income tax
3,340,667
(117,371)
(84,704)
(2,449,869)
688,723
Profit/(loss) before income tax benefit
3,340,667
(117,371)
(84,704)
(2,449,869)
688,723
Income tax benefit
396,632
Profit after income tax benefit
1,085,355
Material items include:
Interest expense calculated using the effective
interest method
12,022,505
-
-
24,801
12,047,306
Depreciation and amortisation
(270,463)
(2,644)
-
(36,286)
(309,393)
Assets
Segment assets
96,740,422
2,394
29,613
49,025,527 145,797,956
Intersegment eliminations
(31,180,569)
Total assets
114,617,387
Liabilities
Segment liabilities
83,992,880
1,757,243
252,413
47,448,885 133,451,421
Intersegment eliminations
(20,520,896)
Total liabilities
112,930,525
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 4. Operating segments (continued)
28
Financial
services
Real estate
services
Migration
services
Other
Total
Consolidated - 2023
$
$
$
$
$
Revenue
Revenue
13,510,932
423,828
58,814
-
13,993,574
Interest income
72,762
-
174
3,059
75,995
Other income
(17)
10,874
-
9,502
20,359
Total revenue
13,583,677
434,702
58,988
12,561
14,089,928
Segment operating profit/(loss) before
income tax
1,858,037
(275,874)
(61,264)
(1,411,132)
109,767
Profit/(loss) before income tax benefit
1,858,037
(275,874)
(61,264)
(1,411,132)
109,767
Income tax benefit
231,178
Profit after income tax benefit
340,945
Material items include:
Interest expense calculated using the effective
interest method
(7,931,352)
(33,233)
-
(177,602)
(8,142,187)
Depreciation and amortisation
(306,690)
(22,047)
-
(111,869)
(440,606)
Assets
Segment assets
95,606,307
20,781
32,101
27,384,575 123,043,764
Intersegment eliminations
(33,144,006)
Total assets
89,899,758
Liabilities
Segment liabilities
89,787,396
1,884,797
170,198
19,945,530 111,787,921
Intersegment eliminations
(22,479,826)
Total liabilities
89,308,095
Note 5. Revenue
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Consolidated
2024
2023
$
$
Mortgage broking and commercial lending origination commission
874,908
725,249
Mortgage broking trail commission
323,094
378,915
Net movement in trail commission asset valuation
(236,616)
243,146
Commercial lending interest income
15,256,759
7,731,717
Other services relating to commercial lending
2,076,027
4,072,905
Real estate service
1,381
423,828
Migration service
32,045
58,814
Advisory service
119,209
359,000
18,446,807
13,993,574
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 5. Revenue (continued)
29
Geographical regions
Consolidated
2024
2023
$
$
Australia
18,446,807
13,993,574
Timing of revenue recognition
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:
2024
2024
2023
2023
At point in
time
Over time
At point in
time
Over time
$
$
$
$
Mortgage origination commission
874,908
-
725,249
-
Mortgage broking trail commission
323,094
-
378,915
-
Net movement in trail commission asset valuation
(236,616)
-
243,146
-
Commercial lending interest income
-
15,256,759
-
7,731,717
Other service fees relating to commercial lending
2,076,027
-
4,072,905
-
Real estate service
1,381
-
157,245
266,583
Migration service
32,045
-
58,814
-
Advisory service
119,209
-
359,000
-
3,190,048
15,256,759
5,995,274
7,998,300
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.
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 5. Revenue (continued)
30
Commercial lending interest income
Commercial lending interest income (including loan establishment fee received) from commercial loan receivables is
recognised using the effective interest method.
Other service fees relating to commercial lending
Other service fees include management fee, loan processing and administration service fee, discharge fee, break fee, and
monthly line fee. Other service fees are recognised when the services are delivered.
Real estate service
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.
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 6. Other income
Consolidated
2024
2023
$
$
Interest income
104,653
75,995
Others
2,393
20,359
Other income
107,046
96,354
Note 7. Interest expense
Consolidated
2024
2023
$
$
Commercial lending interest expense
11,992,815
7,992,572
Corporate interest expense
54,491
149,615
12,047,306
8,142,187
Note 8. Expenses
Consolidated
2024
2023
$
$
Finance cost
Interest expense in relation to leases
18,987
32,151
Bank fees
8,814
43,429
27,801
75,580
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 8. Expenses (continued)
31
Consolidated
2024
2023
Depreciation and amortisation
Depreciation expense in relation to leases
256,874
315,930
Depreciation expense
43,031
60,760
Amortisation costs
9,488
63,916
309,393
440,606
Consolidated
2024
2023
$
$
Superannuation expense
Defined contribution superannuation expense
209,120
210,949
Note 9. Cash and cash equivalents
Consolidated
2024
2023
$
$
Cash on hand
474
533
Deposits held at call with financial institutions
13,531,539
7,018,595
Cash and cash equivalents
13,532,013
7,019,128
Cash and cash equivalents include cash on hand and deposits held at call with financial institutions.
Note 10. Trade and other receivables
Consolidated
2024
2023
$
$
Current assets
Trade receivables
1,405,182
2,333,718
Interest receivable
439,357
434,375
Agent commission clawback receivable
76,304
69,365
1,920,843
2,837,458
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.
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 10. Trade and other receivables (continued)
32
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 (refer to note 27 for further details)
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 2024, the Group has recorded a provision of $162,886 (30 June 2023: $47,135) for trade and other
receivables assessed to be impaired.
As at 30 June 2024, the amount of all trade and other receivables past due but not impaired is $507,976 (30 June 2023:
$1,680,138).
Note 11. Contract assets
Consolidated
2024
2023
$
$
Current assets
Contract assets - current
292,745
324,039
Non-current assets
Contract assets
827,044
886,204
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
1,210,243
958,079
Expected trail commission from new loans and commission step up and effect of the
change in the valuation model
232,640
631,079
Trail commission received
(323,094)
(378,915)
1,119,789
1,210,243
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 are determined by using the discounted cash flow valuation
technique.
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 11. Contract assets (continued)
33
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.
Consolidated
2024
2023
%
%
Discount rate
8.87%
8.87%
Average percentage of trailing commission entitled by the Group
61.28%
76.66%
Weighted average loan life (in years)
4.65
4.05
Sensitivity
The sensitivity of contract asset value is mainly raised from discount rate used in the valuation. The sensitivity analysis is
shown as below:
2024
2023
$
$
Discount rate - increase 2% (2023: 2%)
1,066,538
1,148,504
Discount rate - decrease 2% (2023: 2%)
1,179,690
1,345,149
Note 12. Commercial loan receivables
Consolidated
2024
2023
$
$
Current assets
Commercial loan receivables
93,059,428
76,974,937
Non-current assets
Commercial loan receivables
3,257,018
-
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 loans are secured with established real property or land in line with the Group’s lending requirements. 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.
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 12. Commercial loan receivables (continued)
34
Credit quality - Security held against loans
Consolidated
2024
2023
$
$
Secured by mortgage over real estate
95,722,903
76,328,637
Secured by other credit enhancement
593,543
646,300
96,316,446
76,974,937
Consolidated
2024
2023
$
$
First mortgage
91,663,250
68,109,205
Second mortgage
4,653,196
8,865,732
96,316,446
76,974,937
Consolidated
2024
2023
$
$
LVR buckets
0-60%
22,044,713
18,134,694
60.01%-70%
43,422,592
35,406,960
70.01%-75%
30,255,598
21,491,983
75%+
-
1,295,000
Other *
593,543
646,300
96,316,446
76,974,937
* 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.
Loans receivable pledged as security
The Group raises funds to lend money to commercial entities on a short-term basis and earns interest income. A total loan
receivable of $80 million (30 June 2023: $64 million) are pledged as security for loans from financial institutions (as disclosed
in Note 19) by the general security deed.
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 12. Commercial loan receivables (continued)
35
Consolidated
2024
2023
$
$
Geographical concentrations
New South Wales
77,994,502
54,078,443
Victoria
11,742,130
10,035,400
Queensland
1,256,607
8,377,500
South Australia
4,465,607
2,988,500
Australian Capital Territory
857,600
1,495,094
96,316,446
76,974,937
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 3-24 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 (3-24 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
Gross
carrying
amount
Impairment
loss
allowance Credit impaired
30 June 2024
Credit risk stage 1 and stage 2
95,721,103
-
No
Credit risk stage 3
593,543
-
Yes
30 June 2023
Credit risk stage 1 and stage 2
76,328,637
-
No
Credit risk stage 3
646,300
-
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 2024 (30 June 2023: nil).
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 12. Commercial loan receivables (continued)
36
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.
Note 13. Other financial assets
Consolidated
2024
2023
$
$
Current assets
Other financial assets
93,382
140,382
Non-current assets
Investment in Stropro Technologies Pty Ltd
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 28 for further information on fair value measurement.
Note 14. Other assets
Consolidated
2024
2023
$
$
Current assets
Bond
-
56,520
Other receivables
89,685
139,510
89,685
196,030
Non-current assets
Bond
182,461
182,574
Other receivables
12,870
83,476
195,331
266,050
Other assets primarily consist of bank guarantee deposits to secure leases disclosed in note 15, and other receivables to
a third party.
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
37
Note 15. Property, plant and equipment
Consolidated
2024
2023
$
$
Non-current assets
Office equipment
130,159
116,038
Less: Accumulated depreciation
(113,326)
(105,313)
16,833
10,725
Motor vehicles
69,481
69,481
Less: Accumulated depreciation
(28,755)
(15,184)
40,726
54,297
Furniture & fittings
530,807
530,807
Less: Accumulated depreciation
(422,608)
(394,168)
108,199
136,639
Premises - right-of-use
1,520,596
1,520,596
Less: Accumulated depreciation
(1,236,414)
(979,540)
284,182
541,056
449,940
742,717
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.
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 15. Property, plant and equipment (continued)
38
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Office
Equipment
Motor
Vehicles
Furniture &
Fittings
Office - right-
of-use
Total
Consolidated
$
$
$
$
$
Balance at 1 July 2022
18,406
-
159,933
856,986
1,035,325
Write off of assets by sale of SBP
-
-
(67,711)
-
(67,711)
Write off of accumulated depreciation by sale
of SBP
-
-
67,711
-
67,711
Additions
2,124
69,481
12,477
-
84,082
Depreciation expense
(9,805)
(15,184)
(35,771)
(315,930)
(376,690)
Balance at 30 June 2023
10,725
54,297
136,639
541,056
742,717
Additions
14,121
-
-
-
14,121
Depreciation expense
(8,013)
(13,571)
(28,440)
(256,874)
(306,898)
Balance at 30 June 2024
16,833
40,726
108,199
284,182
449,940
The Group entered into a 7-year office lease with Venus Chatwood Pty Ltd for premises located at Shop 63, Platform,
Chatwood Interchange, 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 ended on 14 August 2023.
Note 16. Intangible assets
Consolidated
2024
2023
$
$
Non-current assets
Finance licence
99,988
99,988
Website and IT system
357,270
357,270
Less: Accumulated amortisation
(343,038)
(333,550)
14,232
23,720
114,220
123,708
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 16. Intangible assets (continued)
39
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Goodwill (a)
Finance
licence
Rent roll (a)
Website and
IT system (b)
Total
Consolidated
$
$
$
$
$
Balance at 1 July 2022
536,216
99,988
534,564
27,394
1,198,162
Additions
-
-
-
8,260
8,260
Disposals
(206,241)
-
(518,836)
-
(725,077)
Impairment of assets
(329,975)
-
-
-
(329,975)
Amortisation/written-down
-
-
(15,728)
(11,934)
(27,662)
Balance at 30 June 2023
-
99,988
-
23,720
123,708
Amortisation/written-down
-
-
-
(9,488)
(9,488)
Balance at 30 June 2024
-
99,988
-
14,232
114,220
a) Goodwill and rent roll assets
The Group has disposed the SBP business as disclosed in the note 15 of the FY2023 financial report.
b) Website and IT System
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.
Note 17. Trade and other payables
Consolidated
2024
2023
$
$
Current liabilities
Trade payables
911,759
621,018
Superannuation and salary withholding tax payable
287,237
418,583
Other creditors and accruals
406,853
250,541
1,605,849
1,290,142
An expected credit loss provision of $162,886 (2023: $47,135) has been recorded under the other creditors and accruals.
Refer to note 27 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.
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
40
Note 18. Contract liabilities
Consolidated
2024
2023
$
$
Current liabilities
Contract liabilities
107,601
73,294
Non-current liabilities
Contract liabilities
312,306
200,451
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 19. Loan and borrowings
Consolidated
2024
2023
$
$
Current
Loans received for commercial lending (i)
25,225,780
19,200,000
Loans received in advance for commercial lending (ii)
-
400,000
Loans from other lenders (iii)
-
580,000
Loans from related parties (v)
600,000
1,200,000
25,825,780
21,380,000
Consolidated
2024
2023
$
$
Non-current
Loans received for commercial lending (i)
4,488,797
3,780,000
Loans from financial institution (iv)
77,431,567
59,229,601
81,920,364
63,009,601
i) Loan received for commercial lending
Loans received for commercial lending are the funds being raised for commercial loan lending to customers. They are
unsecured. The terms of the loans are from 3 months to 2 years. Interest rates are fixed rate within each loan term, and the
interest range is from 6% per year to 12.45% per year depends on the different loan terms. The outstanding loan balance
as at 30 June 2024 is $29,714,577 (30 June 2023: $22,980,000).
ii) Loan received in advance for commercial lending
No fund received in advance as at 30 June 2024 (30 June 2023: $400,000).
iii) Loans from other lenders
The outstanding balance of unsecured loans from other lenders (non-related parties) as at 30 June 2024 is nil (30 June
2023: $580,000).
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 19. Loan and borrowings (continued)
41
iv) Loans received from financial institutions
Loans received from financial institutions are the funds being raised for commercial loan lending to customers. As of 30
June 2024, the Company has drawdown a total of $78.1 million (30 June 2023: $59.6 million) of the $85.6 million (30 June
2023: $65 million) debt/warehouse facilities limit. The facilities maturity dates are on second half year of 2025. Transaction
costs directly attributable to the facilities have been capitalised and are amortised over the facility term in the effective
interest rate. The interest rates for all facilities are floating at 1-month BBSW (Bank Bill Swap Rate as administered by ASX
Benchmark Pty Ltd) plus a margin.
All facilities contain a number of undertakings and are secured by a general security deed over the Group’s assets and are
operating on an interest-only basis with a term of 24 months.
v) Loans from related parties
The outstanding loan balance of unsecured loans from related parties as at 30 June 2024 is $600,000 (30 June 2023: $1.2
million). The terms of the loans are within 12 months, and the interest rate are 10% per annum.
Note 20. Deferred income
Consolidated
2024
2023
$
$
Current liabilities
Prepaid interest from commercial borrowers
2,357,146
2,280,466
Note 21. Provisions
Consolidated
2024
2023
$
$
Current liabilities
Employee benefit provision – current
93,173
116,573
Refund liabilities (i)
122,051
122,795
215,224
239,368
Non-current liabilities
Employee benefit provision
242,454
204,150
2024
2023
$
$
Movement of provision for refunds
Beginning of the year
122,795
100,910
Additions/(Reductions) during the year
(744)
21,885
Ending of the year
122,051
122,795
(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.
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 21. Provisions (continued)
42
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 19.65% (2023: 13.20%).
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.
Note 22. Issued capital
Consolidated
2024
2023
2024
2023
Shares
Shares
$
$
Fully paid ordinary shares
88,055,573
88,055,573
6,954,061
6,954,061
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 Group 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.
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
43
Note 23. Share-based payments
The Group has established an Employee Incentive Plan whereby Performance Rights may be granted over the ordinary
shares of the Company for the benefit of certain directors and executives of the Group. Each Performance Right represents
an entitlement upon vesting and exercise to receive a Share. The Performance rights issued is pursuant to the shareholder
approval granted the Group's annual general meeting held on 30 November 2023 (the AGM).
Set out below are summaries of options granted under the plan:
No. of
performance
rights
Weighted
average
exercise
price
No. of
performance
rights
Weighted
average
exercise
price
2024
2024
2023
2023
Outstanding at the beginning of the financial year
-
$0.0
-
$0.0
Granted
3,000,000
$0.0
-
$0.0
Forfeited
(750,000)
$0.0
-
$0.0
Exercised
-
$0.0
-
$0.0
Outstanding at the end of the financial year
2,250,000
$0.0
-
$0.0
Exercisable at the end of the financial year
-
$0.0
-
$0.0
During the year ended 30 June 2024, the Group recognised net share-based payment expense of $9,844 (2023: nil) within
the profit and loss component of the statement of profit or loss and other comprehensive income.
The 3 million Performance Rights were granted on 4 December 2023, with the exercising price of $0.18. The Expiry dates
are variance between one year to four years. The vesting conditions including three portions:
1. The executive should continuously work in the group
2. The loan book should meet or exceed a certain amount before the expiry date
3. The NIM (Net Interest Margin) should meet or exceed a certain percentage before the expiry date.
As of 30 June 2024, a total of $750,000 has been expired (30 June 2023: nil).
Note 24. Retained earnings
Consolidated
2024
2023
$
$
Accumulated losses at the beginning of the financial year
(6,568,922)
(6,707,339)
Profit after income tax benefit for the year
1,085,355
340,945
Dividends paid (note 25)
-
(202,528)
Accumulated losses at the end of the financial year
(5,483,567)
(6,568,922)
Note 25. Dividends
Dividends paid during the financial year were as follows:
Consolidated
2024
2023
$
$
Dividends
-
202,528
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
44
Note 26. 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.
Note 27. 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 2024, the Group has drawn down $78.1 million of the $85.6 million facility limit from two financial institutions.
Both facilities were initially recognised at the amounts received in cash from the lender, net of transaction costs, and interest
only with a term of 24 months with an interest rate at a margin plus 1-month BBSW per annum. An increase/decrease in
interest rates of 100 basis points would have an adverse/favourable effect on profit before tax of $780,600 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.
Consolidated
2024
2023
$
$
Financial institution loans
77,431,567
59,229,601
Loans received for commercial lending, from related parties, and other lenders, as disclosed in note 19, have fixed interest
rates ranging between 6% and 12.45%. These loans do not pose interest rate risk.
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 2024 is $210,175,000
(30 June 2023: $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.
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 27. Specific financial risk exposures and management (continued)
45
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 Group has credit risk associated with trade and other receivables ($1,844,538 as at 30 June 2024 and $2,768,093 as
at 30 June 2023), commercial loan receivable ($96,316,446 as at 30 June 2024 and $76,974,937 as at 30 June 2023), and
other investments ($93,382 as at 30 June 2024 and $140,382 as at 30 June 2023). These balances were within their terms
of trade respectively except for the loans made to 1 commercial loan is in arrears for more than 12 months which is under
recovery process.
The directors assessed and determined there is sufficient equity in the security properties related to the loans and concluded
that there is no expected credit losses provision required as at 30 June 2024.
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.
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 27. Specific financial risk exposures and management (continued)
46
Financial liability maturity analysis
Total
contractual
cash flows
No more
than 1 year
1-2 years
2-5 years
More than 5
years
$
$
$
$
$
2024
Trade and other payables
1,605,849
1,605,849
-
-
-
Bank loan and other borrowings
107,746,144
25,825,780
81,920,364
-
-
Lease liabilities
343,801
273,151
70,650
-
-
109,695,794
27,704,780
81,991,014
-
-
Total
contractual
cash flows
No more
than 1 year
1-2 years
2-5 years
More than 5
years
$
$
$
$
$
2023
Trade and other payables
1,290,142
1,290,142
-
-
-
Bank loan and other borrowings
84,389,601
21,380,000
63,009,601
-
-
Lease liabilities
630,623
286,825
343,798
-
-
86,310,366
22,956,967
63,353,399
-
-
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Note 28. 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 13 for details)
Note 29. Related party transactions
Parent entity
N1 Holdings Limited is the parent entity.
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 29. Related party transactions (continued)
47
Subsidiaries
Interests in subsidiaries 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:
Consolidated
2024
2023
$
$
Sale of goods and services:
Management and processing fee from Funds Under Management
641,869
1,174,197
Rental property management income from a key management personnel
-
1,379
Payment for goods and services:
Finosource Sdn Bhd – Malaysia
145,402
113,599
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Consolidated
2024
2023
$
$
Current receivables:
Trade receivables from Funds Under Management
438,366
1,302,627
Loans to/from related parties
There were 2 unsecured loans totalling $600,000 as of 30 June 2024 (30 June 2023: $1,200,000) from a related entity of
key management personnel. The total interest paid to the related parties in 2024 is $17,528 (2023: $91,375). Refer to note
19 for the loan term and interest rate.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
48
Note 30. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Parent
2024
2023
$
$
Loss after income tax
(5,635,316)
(3,621,488)
Total comprehensive income
(5,635,316)
(3,621,488)
Statement of financial position
Parent
2024
2023
$
$
Total current assets
474,403
302,766
Total assets
21,645,937
27,028,054
Total current liabilities
273,395
213,662
Total liabilities
20,140,017
19,896,661
Equity
Issued capital
17,124,119
17,124,119
Shared-based payment reserve
216,368
206,524
Accumulated losses
(15,834,567) (10,199,250)
Total equity
1,505,920
7,131,393
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 debt facility as at 30 June 2024 and 30 June 2023.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2024 (30 June 2023: $56,520 pertaining 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 2024 and 30 June 2023.
Material accounting policy information
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 1, except for the
following:
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
●
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
49
Note 31. 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.
Ownership interest
Principal place of business /
2024
2023
Name of subsidiary
Country of incorporation
%
%
N1 Loans Pty Ltd (i)
Australia
100.00%
100.00%
N1 Migration Pty Ltd (ii)
Australia
100.00%
100.00%
N1 Realty Pty Ltd (iii)
Australia
100.00%
100.00%
N1 Venture Pty Ltd (iv)
Australia
100.00%
100.00%
N1 Capital Singapore Pte. Ltd (v)
Singapore
100.00%
100.00%
Everone Consulting Pty Ltd (vi)
Australia
100.00%
100.00%
Yizhihao (Shanghai) Business Consulting Co. Ltd (vii) China
100.00%
100.00%
Zillion Finance Pty Ltd (viii)
Australia
100.00%
100.00%
N1 WH2 Pty Ltd (ix)
Australia
100.00%
100.00%
N1 WH3 Pty Ltd (x)
Australia
100.00%
100.00%
N1SY Pty Ltd (xi)
Australia
100.00%
100.00%
N1 Holdings Trust 2023-1 (xii)
Australia
100.00%
-
RHCAP Pty Ltd (xiii)
Australia
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 Venture was incorporated on 19 November 2014 and was acquired on 1 September 2016. Since then it has been
fully owned by the Group.
(v) N1 Capital Singapore Pte. Ltd was incorporated on 1 February 2019 and it has been fully owned by the Group since
incorporation.
(vi) Everone Consulting Pty Ltd was incorporated on 14 May 2019 and it has been fully owned by the Group since
incorporation.
(vii) Yizhihao (Shanghai) Business Consulting Co. Ltd was incorporated on 8 August 2019 and it has been fully owned by
the Group since incorporation.
(viii) Zillion Finance Pty Ltd was acquired on 30 July 2020. It has been fully owned by the Group since acquisition.
(ix) N1 WH2 Pty Ltd was incorporated on 6 June 2021, it has been fully owned by the Group since incorporation.
(x) N1 WH3 Pty Ltd was incorporated on 12 January 2023, it has been fully owned by the Group since incorporation.
(xi) N1SY Pty Ltd was incorporated on 8 December 2021, it has been fully owned by the Group since incorporation.
(xii) N1 Holdings Trust 2023-1 was set up on 13 October 2023, it has been fully owned by the Group since set up.
(xiii) RHCAP Pty Ltd was incorporated on 24 April 2024, it has been fully owned by the Group since incorporation.
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
50
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 2024. The total of remuneration paid to or payable to KMP
of the Group during the year was:
Consolidated
2024
2023
$
$
Short-term employee benefits
859,753
846,525
Post-employment benefits
61,582
65,659
Other long-term benefits
41,808
19,532
Share-based options
9,844
-
Dividend paid
-
118,307
972,987
1,050,023
Short-term employee benefits
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.
Share-based options
This amount represents the expense allocated to the key management personnel for the share options granted.
Dividend paid
These amounts represent the dividend payment to the KMP during the year.
Note 33. Remuneration of auditors
During the financial year, the following fees were paid or payable for services provided by auditors of the Group:
Consolidated
2024
2023
$
$
Remuneration of the auditor for:
Review of the consolidated financial statements (Crowe Sydney)
-
25,000
Audit or review of the consolidated financial statements (SW Audit)
109,500
80,000
109,500
105,000
Note 34. Contingent liabilities and contingent assets
In relation to the leases entered by the Group, as disclosed in note 15, the Group has given bank guarantees as at 30 June
2024 of $180,407 (30 June 2023: $237,221) to various landlords.
There are no contingent assets as at 30 June 2024 (30 June 2023: nil).
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
51
Note 35. 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.
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.
2024
2023
$
$
(i) The components of tax expense (benefit) comprise:
Current tax
-
-
Deferred tax
(396,632)
(231,178)
Income tax benefit
(396,632)
(231,178)
(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
688,723
109,767
Tax rate at 25% (2023: 25%)
172,181
27,441
Goodwill impairment
-
82,494
Others
27,247
-
Utilisation of prior year tax losses
(199,428)
(108,604)
Tax loss from controlled foreign companies
-
(1,331)
Deferred tax for tax losses recognised
(396,632)
(231,178)
Income tax benefit
(396,632)
(231,178)
As at 30 June 2024, the tax loss carried forward for the Group is $1,277,467 (30 June 2023: $3,661,709) for which no
deferred tax asset has been recognised.
The Group has been tax consolidated since 11 March 2016.
(b) Tax position
As of 30 June 2024, the Group’s current tax payable is nil (30 June 2023: nil)
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
52
Note 36. Deferred tax assets
Consolidated
2024
2023
$
$
Non-current assets
Deferred tax assets
922,237
548,218
Deferred tax liabilities
(294,426)
(317,040)
627,811
231,178
Deferred tax assets
Opening
balance
Charge to
income
statement
Charge to
equity
Closing
balance
$
$
$
$
2024
Clawback and accrued
13,358
(1,921)
-
11,437
Tax losses
323,040
312,608
-
635,648
Other temporary differences
189,428
70,819
-
260,247
Lease
22,392
(7,487)
-
14,905
Balance at 30 June 2024
548,218
374,019
-
922,237
Opening
balance
Charge to
income
statement
Charge to
equity
Closing
balance
$
$
$
$
2023
Clawback and accrued
15,997
(2,639)
-
13,358
Tax losses
99,511
223,529
-
323,040
Other temporary differences
192,733
(3,305)
-
189,428
Lease
26,368
(3,976)
-
22,392
Balance at 30 June 2023
334,609
213,609
-
548,218
Deferred tax liabilities
Opening
balance
Charge to
income
statement
Charge to
equity
Closing
balance
$
$
$
$
2024
Trailing income
(302,558)
22,614
-
(279,944)
Intangible assets
-
-
-
-
Investment - unrealised capital gain
(14,482)
-
-
(14,482)
Balance at 30 June 2024
(317,040)
22,614
-
(294,426)
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
Note 36. Deferred tax assets (continued)
53
Opening
balance
Charge to
income
statement
Charge to
equity
Closing
balance
$
$
$
$
2023
Trailing income
(239,518)
(63,040)
-
(302,558)
Intangible assets
(80,609)
80,609
-
-
Investment - unrealised capital gain
(14,482)
-
-
(14,482)
Balance at 30 June 2023
(334,609)
17,569
-
(317,040)
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.
N1 Holdings Limited
Notes to the consolidated financial statements
30 June 2024
54
Note 37. Reconciliation of profit after income tax to net cash from/(used in) operating activities
Consolidated
2024
2023
$
$
Profit after income tax benefit for the year
1,085,355
340,945
Adjustments for:
Depreciation and amortisation
309,393
404,352
Interest expense for financing activities
73,479
181,766
Employee share scheme
9,844
-
Impairment of goodwill
-
329,975
Net gain on disposal of investments
-
(10,423)
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
878,502
(1,071,254)
Decrease/(increase) in contract assets
90,454
(252,164)
Increase in deferred tax assets
(374,018)
(213,609)
Decrease/(increase) in prepayments
106,455
(108,465)
Increase in commercial loan receivables
(19,341,509) (17,452,120)
Increase in trade and other payables
315,708
11,933
Decrease in deferred tax liabilities
(22,614)
(17,568)
Increase/(decrease) in employee benefits
14,904
(2,150)
Increase/(decrease) in other operating assets
77,599
(57,206)
Increase in in contract liabilities
146,162
9,018
Increase in in funds received for commercial loans
23,936,543
11,227,537
Increase in other operating liabilities
75,937
616,982
Net cash from/(used in) operating activities
7,382,194
(6,062,451)
Note 38. Changes in liabilities arising from financing activities
Loans and
borrowings
Lease
liability
Total
Consolidated
$
$
$
Balance at 1 July 2022
1,931,073
962,458
2,893,531
Net cash used in financing activities
(871,072)
(363,986)
(1,235,058)
Other changes
(480,001)
32,151
(447,850)
Balance at 30 June 2023
580,000
630,623
1,210,623
Net cash used in financing activities
(580,000)
(305,809)
(885,809)
Other changes
-
18,987
18,987
Balance at 30 June 2024
-
343,801
343,801
Note 39. Events after the reporting period
On 23 August 2024, the Group has received a commitment for an additional $20 million in debt capital.
On 06 September 2024, the Group has received a commitment for an additional $45 million in warehouse capital.
No other matter or circumstance has arisen since 30 June 2024 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.
N1 Holdings Limited
Consolidated entity disclosure statement
As at 30 June 2024
55
Determination of Tax Residency
Section 295 (3A) of the Corporation Acts 2001 defines tax residency as having the meaning in the Income Tax Assessment
Act 1997. The determination of tax residency involves judgment as there are currently several different interpretations that
could be adopted, and which could give rise to a different conclusion on residency.
In determining tax residency, the consolidated entity has applied the following interpretations:
Australia tax residency
The consolidated entity has applied current legislation and judicial precedent, including having regard to the Tax
Commissioner's public guidance in Tax Ruling TR 2018/5.
Foreign tax residency
Where necessary, the consolidated entity has used independent tax advisers in foreign jurisdictions to assist in determining
tax residency and ensure compliance with applicable foreign tax legislation.
Partnerships and Trusts
Australian tax law does not contain specific residency tests for partnerships and trusts. Generally, these entities are taxed
on a flow-through basis, so there is no need for a general residence test. Some provisions treat trusts as residents for
certain purposes, but this does not mean the trust itself is an entity that is subject to tax.
Additional disclosures on the tax status of partnerships and trusts have been provided where relevant.
Place formed /
Ownership
interest
Entity name
Entity type
Country of
incorporation
%
Tax residency
N1 Holdings Ltd
Body Corporate
Australia
-
Australia
N1 Loans Pty Ltd
Body Corporate
Australia
100.00% Australia
N1 Migration Pty Ltd
Body Corporate
Australia
100.00% Australia
N1 Realty Pty Ltd
Body Corporate
Australia
100.00% Australia
N1 Venture Pty Ltd
Body Corporate
Australia
100.00% Australia
N1 Capital Singapore Pte. Ltd
Body Corporate
Singapore
100.00% Singapore
Everone Consulting Pty Ltd
Body Corporate
Australia
100.00% Australia
Yizhihao (Shanghai) Business Consulting Co. Ltd Body Corporate
China
100.00% China
Zillion Finance Pty Ltd
Body Corporate
Australia
100.00% Australia
N1 WH2 Pty Ltd
Body Corporate
Australia
100.00% Australia
N1 WH3 Pty Ltd
Body Corporate
Australia
100.00% Australia
N1SY Pty Ltd
Body Corporate
Australia
100.00% Australia
N1 Holdings Trust 2023-1
Trust
Australia
100.00% Australia
RHCAP Pty Ltd
Body Corporate
Australia
100.00% Australia
Perpetual Corporate Trust Limited *
Body Corporate
Australia
-
Australia
*
Perpetual Corporate Trust Limited is the trustee of N1 Holdings Trust 2023-1
N1 Holdings Limited
Directors' declaration
30 June 2024
56
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 1 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 2024 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; and
●
the information disclosed in the attached consolidated entity disclosure statement is true and correct.
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
20 September 2024
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
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 2024, the consolidated statement of profit
or loss and comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, and notes to the financial statements, including material
accounting policy information, the consolidated entity disclosure statement and the directors’ declaration.
In our opinion, the accompanying financial report of the Group 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 2024 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.
57
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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.
Carrying value of commercial loan receivables
Area of focus
How our audit addressed the area of focus
Refer also to Note 12 (Commercial loan
receivables)
The Group holds commercial loan receivables of
$96,316,466 (2023: $76,974,937).
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, included checking the fair values
of the collateral 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,
58
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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 2024, but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and 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.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of:
a)
the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view
in accordance with Australian Accounting Standards and the Corporations Act 2001; and
b)
the consolidated entity disclosure statement for being true and correct in accordance with the
requirements of the Corporations Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
i.
the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view
and is free from material misstatement, whether due to fraud or error; and
ii.
the consolidated entity disclosure statement as true and correct and is free of 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.
59
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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.
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.
60
Take the lead
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 12 to 17 of the directors’ report for the year ended 30
June 2024.
In our opinion, the Remuneration Report of N1 Holdings Limited for the year ended 30 June 2024 complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
SW Audit
Chartered Accountants
Yang (Bessie) Zhang
Partner
Sydney, 20 September 2024
61
N1 Holdings Limited
Shareholder information
30 June 2024
62
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 3 September 2024.
1.
Shareholding
a.
Distribution of Shareholders
Category (size of holding)
Number of
shares
%
Number of
holders
%
1 to 1,000
2,028
0.00%
7
2.52%
1,001 to 5,000
59,386
0.07%
21
7.55%
5,001 to 10,000
784,142
0.89%
80
28.78%
10,001 to 100,000
4,788,059
5.44%
122
43.88%
100,001 and Over
82,421,958
93.60%
48
17.27%
Total
88,055,573
278
b.
The number of shareholdings held in less than marketable parcels is 47,244.
c.
The names of the substantial shareholders listed in the holding company’s register are:
Shareholder
Number of
Ordinary Fully
Paid Shares
Held
% Held
of Issued
Ordinary
Capital
REN H WONG PTY LTD
50,000,000
56.78%
SIEW BEE TONG
5,000,000
5.68%
Total
55,000,000
62.46%
d.
20 Largest Shareholders — Ordinary Shares
Shareholder
Number of
Ordinary Fully
Paid Shares
Held
% Held
of Issued
Ordinary
Capital
1.
REN H WONG PTY LTD
50,000,000
56.78%
2.
CITICORP NOMINEES PTY LIMITED
5,149,085
5.85%
3.
MR YOKE MENG CHAN
4,313,500
4.90%
4
TIN FAMILY SMSF PTY LTD
2,494,940
2.83%
5
BNP PARIBAS NOMS PTY LTD
2,297,367
2.61%
6
MS YUEXIAN ZHAO
1,388,718
1.58%
7
MR HO YAN MAK
1,361,982
1.55%
8
JIANRONG SUN
1,357,500
1.54%
9
FINCLEAR SERVICES PTY LTD
1,070,753
1.22%
10
MR TONG CHAI TAN
908,500
1.03%
11
MS MUN CHING WANG
908,500
1.03%
12
STAR PLUS SUPER PTY LTD
893,291
1.01%
13
MISS HUEY WONG
820,798
0.93%
14
HSBC CUSTODY NOMINEES
(AUSTRALIA) LIMITED
800,000
0.91%
15
IPOH YAP SMSF CO PTY LTD
800,000
0.91%
16
MR ENG LEK LAU
713,524
0.81%
17
MR ANDREW THOMAS BARRY KENNEDY
535,090
0.61%
18
DR CHIN VEN TAN
500,000
0.57%
19.
SILOTUS PTY LTD
500,000
0.57%
20.
AUSTRALIA WIDE DEVELOPMENT GROUP PTY LTD
500,000
0.57%
Total
77,313,548
87.80%
N1 Holdings Limited
Shareholder information
30 June 2024
63
e.
Escrowed Shares
No
f.
Vested Options
No
g.
Convertible notes
No
g.
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.
h.
Current on-market buy-back
There is no current on-market buy-back in relation to the Company’s ordinary shares.
N1 Holdings Limited
Shareholder information
30 June 2024
64