Appendix 4E & Preliminary Final Report

THE AGENCY GROUP AUSTRALIA LTD ABN 52 118 913 232

and its controlled entities

APPENDIX 4E Preliminary Final Report 30 June 2020

THE AGENCY GROUP AUSTRALIA LTD APPENDIX 4E AND CONTROLLED ENTITIES Preliminary final report ABN 52 118 913 232 30 June 2020

Corporate directory

Current Directors Andrew Jensen Executive Chairman Paul Niardone Managing Director Adam Davey Non-executive Director Matthew LaHood Executive Director

Company Secretary Mr Stuart Usher

Registered Office Share Registry Street: 68 Milligan St Advanced Share Registry Limited PERTH WA 6000 Street + Postal: 110 Stirling Highway Postal: PO Box 7768 NEDLANDS WA 6009 CLOISTERS SQUARE WA 6850 Telephone: 1300 113 258 (within Australia) Telephone: +61 (0)8 9204 7955 +61 (0)8 9389 8033 (International) Facsimile: +61 (0)8 9204 7956 Facsimile: +61 (0)8 6370 4203 Email: info@theagencygroup.com.au Email: admin@advancedshare.com.au Website: theagencygroup.com.au Website: www.advancedshare.com.au

Auditors Securities Exchange Bentleys Audit & Corporate (WA) Pty Ltd Australian Securities Exchange Level 3, 216 St Georges Terrace Level 40, Central Park, 152-158 St Georges Terrace PERTH WA 6000 Perth WA 6000 Telephone: +61 (0)8 9226 4500 Telephone: 131 ASX (131 279) (within Australia) Telephone: +61 (0)2 9338 0000 Solicitors Facsimile: +61 (0)2 9227 0885 Steinepreis Paganin Website: www.asx.com.au Level 4, The Read Buildings ASX Code : AU1 16 Milligan Street Perth WA 6000

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APPENDIX 4E THE AGENCY GROUP AUSTRALIA LTD Preliminary final report AND CONTROLLED ENTITIES 30 June 2020 ABN 52 118 913 232

Contents

 Company Update ………………………………………………………………………………………………………………………………………………. 1

 Results for announcement to the Market …………………………………………………………………………………………………………….. 5  Consolidated statement of profit or loss and other comprehensive income ……………………………………………………………… 8  Consolidated statement of financial position ……………………………………………………………………………………………………….. 9  Consolidated statement of changes in equity ……………………………………………………………………………………………………… 10  Consolidated statement of cash flows ………………………………………………………………………………………………………………… 11  Notes to the Appendix 4E preliminary final report ……………………………………………………………………………………………….. 12

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THE AGENCY GROUP AUSTRALIA LTD APPENDIX 4E AND CONTROLLED ENTITIES Preliminary final report ABN 52 118 913 232

Company Update 1. Operating and financial review 1.1. Nature of Operations Principal Activities The principal activity of the Group for the financial year was real estate services and related activities. There were no significant changes in the nature of the Group’s principal activities during the financial year.

1.2. Operations Review a. Key Metrics

ANNUAL GROUP REVENUE ($m) GCI ($m) 60 Up 48% Y-o-Y 50 Up 26% Y-o-Y 45 40 40 35 30 30 25 47.9 20 41.86 20 37.9 15 28.3 28.8 10 10 16.8 5 9.6 3.8 0 0 FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20

NUMBER OF NEW LISTINGS (#) NUMBER OF PUM (#) Up 15% Y-o-Y Up 12%Y-o-Y 5000 6,000 3957 4,838 4000 5,000 3430 4,337 4,000 3,347 3000 3,000 1776 2000 2,000 1000 639 1,000 0 0 FY17 FY18 FY19 FY20 FY18 FY19 FY20

VALUE OF EXCHANGES ($B) 3.5 Up 21% Y-o-Y 2.9 3 2.4 2.5 2 1.8

1.5 1 0.5 0.2 0 FY17 FY18 FY19 FY20

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APPENDIX 4E THE AGENCY GROUP AUSTRALIA LTD Preliminary final report AND CONTROLLED ENTITIES 30 June 2020 ABN 52 118 913 232

Company Update All key metrics increased during the year across our businesses as demonstrated above, reinforcing the sustained growth the business has been able to achieve year on year for the past three years. This is despite the impact of the COVID-19 pandemic and resultant impact from restrictions on the real estate sector nationally during the latter part of the March and June Quarters 2020. The Agency delivered strong operating results for FY2020 including its first full year EBITDA profit since inception.

For FY2020, the Group reported Annual Group Revenue of $41.86 million, a 48% increase year-on-year (FY2019 1: $28.34 million), which further highlights the effectiveness of the Company’s model.

The increase in revenue was primarily due to a 26% increase year-on-year in Combined Gross Commission Income to $47.9 million (FY19: $38 million). This figure was bolstered by 3,153 sales (up from 2,419 sales for FY19) and $2.9 billion worth of property sold across the combined group for the FY2020 (FY19: $2.5 billion).

Property management continues to grow with The Agency reporting a record total of 4,838 Properties Under Management as at 30 June 2020, up 12% on the prior corresponding period, generating ≈$9 million revenue annually.

The company also witnessed growth in its Mortgage Solutions Australia (MSA) business with home loan approvals for FY2020 up 11% year-on-year from $124.2 million to $137.4 million.

As at 30th June, The Agency was comprised of a combined 283 sales agents (East Coast: 142, West Coast: 141), with average Gross Commission Income (GCI) increasing by over 20% over the past twelve months. The Agency’s model of allowing our high-quality agents to focus on sales and providing support is being demonstrated by the year-on-year increase in GCI.

The Agency will be looking to boost agent numbers in the coming quarters. Based on the company’s existing platform and cost structure, which is largely fixed, any future recruitment will directly contribute to EBITDA performance.

The Agency Group reported cash receipts of $42.53 million for the FY2020, a 42% year-on-year increase (FY2019: $29.93 million).

Pleasingly, The Agency rebounded in June across key metrics as COVID-19 restrictions eased in major markets. Results delivered in June are now flowing through with a strong sales pipeline into Q3 2020.

Please see below table highlighting year-on-year growth across key metrics:

The Agency Group FY20 FY19 % Change

Revenue ($M) 41.86 28.3 +48% EBITDA ($M) 2.66 (4.25) +161% EBITDA – pre AASB16 ($M) 0.71 (4.25) +116% GCI ($M) 47.92 37.97 +26% PUM 4,838 4,337 +12% Home Loan Approvals (MSA) ($M) 137.4 124.2 +11%

1.3. Financial Review The financial statements have been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business.

The Agency continued its growth during FY2020 delivering three quarters of positive EBITDA as well as positive cash flow, a first for the company. For FY2020, the Group recorded EBITDA profit of approximately $2.66 million. EBITDA was calculated as provided below:

1 Note: FY19 reflects six months of operating results of Top Level Pty Ltd

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THE AGENCY GROUP AUSTRALIA LTD APPENDIX 4E AND CONTROLLED ENTITIES Preliminary final report ABN 52 118 913 232

Company Update EBITDA calculation 2020 2019 $ $

Loss before tax (10,357,057) (9,255,448)

Interest income (17,988) (12,958) Depreciation and amortisation 6,038,609 2,266,548 Impairment 5,230,330 1,378,379 Interest and finance costs 1,769,193 1,242,675 Share-based payments – 133,663

EBITDA 2,663,087 (4,247,141)

AASB16 Leases impact (1,951,373) –

EBITDA (pre-AASB16 Leases impact) 711,714 (4,247,141)

EBITDA was $2.66 million. Pre-adoption of the new AASB16 Leases standard, which was applied during FY2020, EBITDA profit for the year came to $711,714 which compares to an EBITDA loss of $4.25 million for FY2019, a $4.96 million turnaround.

The Group’s revenue for the year ended 30 June 2020 was recorded at $41.86 million as compared with the previous year ended 30 June 2019 which recorded $28.34 million.

The net assets of the Group have increased from 30 June 2019 by $2.58 million to $11.61 million at 30 June 2020 (2019: $9.03 million).

The Group incurred a net loss before tax for the year of $10.36 million (2019: $9.26 million loss). It is important to note that this was primarily impacted by depreciation and amortisation ($6.04 million) and impairment of goodwill ($5.23 million).

The Board has taken a conservative view on the review of its goodwill on historical acquisitions and believed it was appropriate to impair by $5.23 million for FY2020, in light of market uncertainty as a result of COVID.

As at 30 June 2020, the Group’s cash and cash equivalents increased from 30 June 2019 by $126,843 to $2.72 million at 30 June 2020 (2019: $2.60 million).

Appendix 4E 2020 $’000s $

Cash at bank (reference 4E Note 4.1) 2,724 Cash classified as  Cash on deposits 482  Cash on deposit with funder plus bank guarantees 770  Convertible Note funds 1,000

Reporting in the 30 June 2020 Appendix 4C 4,976

Government incentives and related grants have been received during the last quarter of the year and were used to also support employee sales agents in Perth. These have been included in operational cash flows.

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APPENDIX 4E THE AGENCY GROUP AUSTRALIA LTD Preliminary final report AND CONTROLLED ENTITIES 30 June 2020 ABN 52 118 913 232

Company Update 1.4. Future Developments, Prospects and Business Strategies The Group remains focussed on maintaining a sustainable financial framework and continues to identify and implement efficiencies into its business.

To this end, the Group is currently finalising arrangements to bring bank debt down to a manageable level.

The Company continues to work proactively with its primary bank debt provider and other parties regarding a resolution of its current financing facility on or before 30 September 2020.

The Agency is active in pursuing a range of strategic partnerships and JV opportunities it believes will drive agent recruitment and sales revenue in the coming reporting periods.

There remain significant intangible assets off the balance sheet, these include the rent roll and the Mortgage Book. These assets contribute an annuity income to the business in excess of $10 million per annum. Total estimated market asset value of the rent roll and loan book is approx. $27 million.

Other likely developments, future prospects and business strategies of the operations of the Group and the expected results of those operations, not otherwise disclosed in this report, have not been included in this report as the Directors believe that the inclusion of such information would be likely to result in unreasonable prejudice to the Group.

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THE AGENCY GROUP AUSTRALIA LTD APPENDIX 4E AND CONTROLLED ENTITIES Preliminary final report ABN 52 118 913 232

Results for announcement to the Market for the year ended 30 June 2020

1 REPORTING PERIOD (item 1)

 Report for the financial year ended: 30 June 2020  Previous corresponding period is the year months ended: 30 June 2019

Movement Percentage Amount 2 RESULTS FOR ANNOUNCEMENT TO THE MARKET % $

 Increase in revenues from ordinary activities (item 2.1)  47.72 to 41,861,521

 Increase in loss from ordinary activities after tax attributable  15.77 to (9,065,338) to members (item 2.2)

 Increase in loss after tax attributable to members (item 2.3)  15.77 to (9,065,338)

a. Dividends (item 2.4) Amount per Franked amount Security per security ₵ %  Interim dividend nil n/a  Final dividend nil n/a  Record date for determining entitlements to the n/a dividend (item 2.5)

b. Brief explanation of any of the figures reported above necessary to enable the figures to be understood (item 2.6): Refer to Company Update on page 1 of this Preliminary Final Report.

3 PRELIMINARY FINAL REPORT

a. Statement of comprehensive income (item 3): Refer to Consolidated statement of profit or loss and other comprehensive income on page 8

b. Statement of financial position (item 4): Refer to Consolidated statement of financial position on page 9

c. Statement of cash flows (item 5): Refer to Consolidated statement of cash flows on page 11

d. Statement of changes in equity (item 6): Refer to Consolidated statement of changes in equity on page 10

4 DIVIDENDS (item 7) AND RETURNS TO SHAREHOLDERS INCLUDING DISTRIBUTIONS AND BUY BACKS (item 14.2)

Nil.

a. Details of dividend or distribution reinvestment plans in operation are described below (item 8): Not applicable

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APPENDIX 4E THE AGENCY GROUP AUSTRALIA LTD Preliminary final report AND CONTROLLED ENTITIES 30 June 2020 ABN 52 118 913 232

Results for announcement to the Market for the year ended 30 June 2020 Previous 5 RATIOS Current corresponding period period a. Financial Information relating to 5b and 5c: $ $ Earnings for the period attributable to owners of the parent (9,065,338) (7,830,605)

Net assets 11,611,345 9,031,007 Less: Intangible assets (including net deferred tax balances) and right of use (31,770,901) (34,368,355) Assets Net tangible assets (20,159,556) (25,337,348)

No. No. Fully paid ordinary shares 298,954,431 103,810,047 Weighted average number of ordinary shares outstanding during the year used 251,793,328 61,610,752 in calculation of basic EPS

₵ ₵

b. Net tangible assets backing per share (cents) (item 9): (6.743) (24.407)

c. Earnings per share attributable to owners of the parent (cents) (item 14.1): (3.600) (12.710)

The Group does not report diluted earnings per share, as dilution is not applied to annual losses generated by the Group. During the 2020 financial year the Group had 102,181,760 unissued shares under option which are anti-dilutive.

6 DETAILS OF ENTITIES OVER WHICH CONTROL HAS BEEN GAINED OR LOST DURING THE PERIOD: (item 10)

a. Control gained over entities  Name of entities (item 10.1) Nil  Date(s) of gain of control (item 10.2) b. Loss of control of entities

 Name of entities (item 10.1) Nil  Date(s) of loss of control (item 10.2) N/A c. Contribution to consolidated profit (loss) from ordinary activities after Nil tax by the controlled entities to the date(s) in the current period when control was gained / lost (item 10.3).

d. Profit (loss) from ordinary activities after tax of the controlled entities for Nil the whole of the previous corresponding period (item 10.3)

7 DETAILS OF ASSOCIATES AND JOINT VENTURE: (item 11)

 Name of entities (item 11.1) Nil  Percentage holding in each of these entities (item 11.2) n/a Previous corresponding Current period Period $ $  Aggregate share of profits (losses) of these entities (item 11.3) N/A N/A

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THE AGENCY GROUP AUSTRALIA LTD APPENDIX 4E AND CONTROLLED ENTITIES Preliminary final report ABN 52 118 913 232

Results for announcement to the Market for the year ended 30 June 2020

8 Any other significant information needed by an investor to make an informed assessment of the entity’s financial performance and financial position. (item 12):

Refer to commentary update accompanying this 4E

9 The financial information provided in the Appendix 4E is based on the preliminary final report (attached), which has been prepared in accordance with Australian Accounting Standards (item 13)

10 A COMMENTARY ON THE RESULTS FOR THE PERIOD (item 14)

Refer to Company Update on page 1 .

11 The preliminary final report has been prepared based on the 30 June 2020 accounts which are in the process of being audited by an independent Audit Firm in accordance with the requirements of s.302 of the Corporations Act 2001 (Cth). (item 15)

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APPENDIX 4E THE AGENCY GROUP AUSTRALIA LTD Preliminary final report AND CONTROLLED ENTITIES 30 June 2020 ABN 52 118 913 232

Consolidated statement of profit or loss and other comprehensive income for the year ended 30 June 2020 Note 2020 2019 $ $ Continuing operations Revenue 1.1 41,861,521 28,337,806 Other income 1.2 1,012,487 177,891

42,874,008 28,515,697

Advertising and promotion expenses (1,242,399) (670,123) Computers and information technology expenses (1,330,334) (1,006,107) Consultancy fees (1,918,495) (1,195,372) Depreciation and amortisation (6,038,609) (2,266,548) Impairment 2.1 (5,230,330) (1,378,379) Interest and finance costs (1,769,193) (1,242,675) Legal and professional fees (998,384) (1,907,502) Occupancy costs (984,139) (2,178,362) Salaries and employment costs 2.2 (31,070,020) (24,024,002) Share-based payments expense 7 – (133,663) Other expenses (2,649,162) (1,768,412)

Loss before tax (10,357,057) (9,255,448) Income tax expense 3.1 1,291,719 1,424,843

Net loss for the year (9,065,338) (7,830,605)

Other comprehensive income, net of income tax  Items that will not be reclassified subsequently to profit or loss – –  Items that may be reclassified subsequently to profit or loss: – –

Other comprehensive income for the period, net of tax – –

Total comprehensive income attributable to members of the parent entity (9,065,338) (7,830,605)

2,663,087 (4,247,141)

The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes.

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THE AGENCY GROUP AUSTRALIA LTD APPENDIX 4E AND CONTROLLED ENTITIES Preliminary final report ABN 52 118 913 232

Consolidated statement of financial position as at 30 June 2020 Note 2020 2019 $ $ Current assets Cash and cash equivalents 4.1 2,724,142 2,597,299 Trade and other receivables 4.2.1 4,601,222 4,079,873 Financial assets 4.3.1 1,000,000 – Other current assets 4.4.1 550,476 413,492

Total current assets 8,875,840 7,090,664

Non-current assets Trade and other receivables 4.2.2 269,655 282,772 Financial assets 4.3.2 770,388 1,142,387 Property, plant, and equipment 5.1 2,039,814 2,577,550 Right of use asset 5.2.1 4,645,320 – Intangible assets 5.3 30,376,355 39,036,212

Total non-current assets 38,101,532 43,038,921

Total assets 46,977,372 50,129,585

Current liabilities Trade and other payables 4.5.1 9,773,152 13,555,575 Borrowings 4.6.1 13,843,235 21,126,603 Provisions 5.4.1 2,286,835 1,112,833 Leases 5.2.2 1,979,900 –

Total current liabilities 27,883,122 35,795,011

Non-current liabilities Trade and other payables 4.5.2 – 35,308 Provisions 5.4.2 337,054 600,402 Leases 5.2.2 3,895,077 – Deferred tax liabilities 3.3 3,250,774 4,667,857

Total non-current liabilities 7,482,905 5,303,567

Total liabilities 35,366,027 41,098,578

Net assets 11,611,345 9,031,007

Equity – – Issued capital 6.1.1 39,395,942 27,765,049 Reserves 6.3 928,715 583,426 Accumulated losses (28,713,312) (19,317,468)

Total equity 11,611,345 9,031,007 (19,007,282) (28,704,347) (20,159,556) (25,337,348)

The consolidated statement of financial position is to be read in conjunction with the accompanying notes.

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APPENDIX 4E THE AGENCY GROUP AUSTRALIA LTD Preliminary final report AND CONTROLLED ENTITIES 30 June 2020 ABN 52 118 913 232

Consolidated statement of changes in equity for the year ended 30 June 2020 Note Contributed Accumulated Options Total equity Losses Reserve equity $ $ $ $

Balance at 1 July 2018 11,480,382 (11,486,863) 566,430 559,949 Loss for the year attributable owners of the parent – (7,830,605) – (7,830,605) Other comprehensive income for the year attributable owners of the parent – – – –

Total comprehensive income for the year attributable owners of the parent – (7,830,605) – (7,830,605)

Transaction with owners, directly in equity Shares issued during the year (net of costs) 6.1.1 16,284,667 – – 16,284,667 Options granted during the year 6.2 – – 16,996 16,996

Balance at 30 June 2019 27,765,049 (19,317,468) 583,426 9,031,007

Balance at 1 July 2019 27,765,049 (19,317,468) 583,426 9,031,007 Change in accounting policy – effect of AASB 16 Leases – (330,506) – (330,506)

Restated total equity at the beginning of the financial year 27,765,049 (19,647,974) 583,426 8,700,501 Loss for the year attributable owners of the parent – (9,065,338) – (9,065,338) Other comprehensive income for the year attributable owners of the parent – – – –

Total comprehensive income for the year attributable owners of the parent – (9,065,338) – (9,065,338)

Transaction with owners, directly in equity Shares issued during the year (net of costs) 6.1.1 11,630,893 – – 11,630,893 Share-based payments during the year 6.2 – – 345,289 345,289

Balance at 30 June 2020 39,395,942 (28,713,312) 928,715 11,611,345

The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.

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THE AGENCY GROUP AUSTRALIA LTD APPENDIX 4E AND CONTROLLED ENTITIES Preliminary final report ABN 52 118 913 232

Consolidated statement of cash flows for the year ended 30 June 2020

Note 2020 2019 $ $ Cash flows from operating activities Receipts from customers 42,529,458 29,931,578 Payments to suppliers and employees (40,821,013) (34,970,655) Interest received 17,988 12,958 Finance costs (1,391,729) (1,405,068)

Net cash used in operating activities 334,704 (6,431,187)

Cash flows from investing activities Purchase of property, plant and equipment (282,527) (241,107) Advancement of bank guarantee (481,498) (600,000) Return of bank guarantee 346,078 – Purchase of intangibles (192,758) – Deferred purchase consideration paid (15,000) (75,000) Purchase of subsidiary, net of cash acquired – 594,258

Net cash used in investing activities (625,705) (321,849)

Cash flows from financing activities Proceeds from issue of shares 5,611,773 8,400,000 Share issue costs (397,861) (277,200) Repayments of borrowings (2,731,516) (44,352) Proceeds from borrowings – 250,000 Leases payments (2,064,552) –

Net cash provided by financing activities 417,844 8,328,448

Net increase in cash and cash equivalents held 126,843 1,575,412

Cash and cash equivalents at the beginning of the year 2,597,299 1,021,887

Cash and cash equivalents at the end of the year – 4.1 2,724,142 2,597,299

The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.

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APPENDIX 4E THE AGENCY GROUP AUSTRALIA LTD Preliminary final report AND CONTROLLED ENTITIES 30 June 2020 ABN 52 118 913 232

Notes to the Appendix 4E preliminary final report for the year ended 30 June 2020

Note 1 Revenue and other income Note 2020 2019 $ $ 1.1 Revenue Commissions 27,523,456 18,430,266 Fees 5,056,193 4,919,575 Management fees 9,281,872 4,987,965

41,861,521 28,337,806 1.2 Other Income Interest income 17,988 12,958 Other income 994,499 164,933

1,012,487 177,891

Note 2 Loss before income tax 2020 2019 $ $ The following significant revenue and expense items are relevant in explaining the financial performance: 2.1 Impairment:  Doubtful debts (recovered) / expense (74,050) 208,728  Impairment of goodwill and other intangibles 5,304,380 1,169,651

5,230,330 1,378,379

2.2 Salaries and employment costs 2020 2019 $ $  Commissions 19,558,045 14,062,716  Director fees 535,980 484,000  Salary and wages 8,475,768 6,353,731  Superannuation 1,369,231 1,567,847  Other employment related costs 2,210,996 1,555,708  Government grants received in connection with employment costs (1,080,000) –

31,070,020 24,024,002

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THE AGENCY GROUP AUSTRALIA LTD APPENDIX 4E AND CONTROLLED ENTITIES Preliminary final report ABN 52 118 913 232

Notes to the Appendix 4E preliminary final report for the year ended 30 June 2020

Note 3 Income tax Note 2020 2019 $ $ 3.1 Income tax benefit Current tax (1,291,719) (1,424,843)

(1,291,719) (1,424,843) 3.2 Deferred tax assets Employee benefits 465,221 365,843 Accrued expenses 918,680 795,960 Provisions 52,397 41,250 AASB16 Leases – Lease Liability 154,253 – Other 141,261 – 1,731,812 1,203,053 Set-off deferred tax liabilities 3.3 (1,731,812) (1,203,053)

Net deferred tax assets – –

3.3 Deferred tax liabilities Intangible Asset – Rent Roll 4,875,336 5,870,910 Accrued income 107,250 – 4,982,586 5,870,910 Set-off deferred tax assets 3.2 (1,731,812) (1,203,053)

Net deferred tax liabilities 3,250,774 4,667,857

Note 4 Financial assets and financial liabilities

4.1 Cash and cash equivalents 2020 2019 $ $ Cash at bank 2,724,142 2,597,299

2,724,142 2,597,299

4.2 Trade and other receivables 2020 2019 $ $ 4.2.1 Current Trade debtors 3,528,812 3,189,133 Recoverable commissions/wages 876,861 871,650 Provision for non-recovery of trade debtor and commissions/wages (190,534) (258,728) Other receivables 386,083 277,818

4,601,222 4,079,873 4.2.2 Non-current Receivables 269,655 282,772

269,655 282,772

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APPENDIX 4E THE AGENCY GROUP AUSTRALIA LTD Preliminary final report AND CONTROLLED ENTITIES 30 June 2020 ABN 52 118 913 232

Notes to the Appendix 4E preliminary final report for the year ended 30 June 2020

Note 4 Financial assets and financial liabilities (cont.)

4.3 Financial assets 2020 2019 $ $ 4.3.1 Current Restricted cash 1,000,000 –

1,000,000 – 4.3.2 Non-current Bank guarantees and restricted cash 770,388 1,085,476 Financial assets carried at FVOCI – Listed shares – 56,911

770,388 1,142,387

4.4 Other assets 2020 2019 $ $ 4.4.1 Current Prepayments 7,636 397,285 Other deposits 542,840 16,207

550,476 413,492

4.5 Trade and other payables 2020 2019 $ $ 4.5.1 Current Unsecured Trade payables 2,483,388 4,179,473 Employees’ remuneration – commissions payable 1,869,045 1,177,955 Payroll tax 1,152,496 1,121,583 Superannuation – employees 401,358 577,520 Sundry creditors and accrued expenses 843,601 2,017,403 Lease incentive – 719,158 GST and PAYG payable 2,916,649 3,255,827 Retention payable – 506,656 Other 106,615 –

9,773,152 13,555,575 4.5.2 Non-current Other – 35,308

– 35,308

4.6 Borrowings 2020 2019 $ $ 4.6.1 Current Loans 750,000 1,350,000 Bank loans 12,093,235 12,593,235 Shareholder loans – 7,157,366 Convertible note 1,000,000 – Other – 26,002

13,843,235 21,126,603

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THE AGENCY GROUP AUSTRALIA LTD APPENDIX 4E AND CONTROLLED ENTITIES Preliminary final report ABN 52 118 913 232

Notes to the Appendix 4E preliminary final report for the year ended 30 June 2020

Note 5 Non-financial assets and financial liabilities

5.1 Property, plant, and equipment 2020 2019 $ $ Plant and equipment – at cost 1,187,451 1,150,163 Accumulated depreciation (614,867) (467,186)

572,584 682,977

Leasehold improvements – at cost 3,407,145 3,317,312 Accumulated amortisation (1,939,915) (1,422,739)

1,467,230 1,894,573

Total plant and equipment 2,039,814 2,577,550

5.2 Leases 2020 2019# $ $ 5.2.1 Right of use assets Properties 3,500,419 – Printing equipment 1,144,901 –

4,645,320 – 5.2.2 Lease liabilities Current 1,979,900 – Non-current 3,895,077 –

5,874,977 – # In the previous year, the group only recognised lease assets and lease liabilities in relation to leases that were classified as ‘finance leases’ under AASB 117 Leases. The assets were presented in property, plant and equipment and the liabilities as part of the group’s borrowings.

5.3 Intangible assets 2020 2019 $ $ Goodwill 17,077,617 17,849,242 Impairment charge 5.3.1 (5,304,380) (771,625)

11,773,237 17,077,617

Rent Roll 24,348,146 24,026,310 Accumulated amortisation (5,930,600) (2,067,715)

18,417,546 21,958,595

Others 381,968 194,664 Accumulated amortisation and impairment (196,396) (194,664)

185,572 –

Total intangibles 30,376,355 39,036,212

5.3.1 At 30 June 2020, management performed an impairment assessment on goodwill which resulted in an impairment loss of (5,304,380) on the Group’s Top Level Real Estate Sales Business

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APPENDIX 4E THE AGENCY GROUP AUSTRALIA LTD Preliminary final report AND CONTROLLED ENTITIES 30 June 2020 ABN 52 118 913 232

Notes to the Appendix 4E preliminary final report for the year ended 30 June 2020

Note 5 Non-financial assets and financial liabilities (cont.)

5.4 Provisions 2020 2019 $ $ 5.4.1 Current Employee entitlements 1,228,979 752,815 Future fund referrals 1,057,856 360,018

2,286,835 1,112,833 5.4.2 Non-current Employee entitlements 61,377 329,638 Make good provisions 165,000 150,000 Future fund referrals 110,677 120,764

337,054 600,402

Note 6 Equity

6.1 Issued capital Note 2020 2019 2020 2019 No. No. $ $

Fully paid ordinary shares at no par value 298,954,431 103,810,047 39,395,942 27,765,049 2020 2019 2020 2019 6.1.1 Ordinary shares No. No. $ $ At the beginning of the year 103,810,047 683,793,034 27,765,049 11,480,382 Shares issued during the year:  Bonus issue of shares – 410,275,820 – – Sub-total 1,094,068,854 –  Effect of share consolidation 30:1 – (1,057,598,807) –  Shares after consolidation – 36,470,047 –  Acquisition of Top Level Pty Ltd – 35,000,000 – 7,566,667  Acquisition of Vicus Residential Pty Ltd – 2,666,667 – 453,333  Lead manager shares – 840,000 – 252,000  Issued for cash 85,913,817 28,000,000 5,584,398 8,400,000  Share-settled payments 107,008,316 833,333 6,955,540 116,667  Conversion of performance shares 2,222,251 – – – Transaction costs relating to share issues – (909,045) (504,000)

At reporting date 298,954,431 103,810,047 39,395,942 27,765,049

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THE AGENCY GROUP AUSTRALIA LTD APPENDIX 4E AND CONTROLLED ENTITIES Preliminary final report ABN 52 118 913 232

Notes to the consolidated financial statements for the year ended 30 June 2020

Note 6 Equity (cont.)

2020 2019 2020 2019 6.2 Options No. No. $ $ Options 102,181,760 5,588,912 928,715 583,426

At the beginning of the year 5,588,912 186,742,739 583,426 566,430 Options issued/(lapsed) during the year:  Effect of share consolidation 30:1 – (180,517,958) – –  Options after consolidation – 6,224,781 – –  Expiry of options – (969,202) – –  Issued to director 333,333 16,996  Attaching options pursuant to Placement 8,461,539 – – –  Attaching options pursuant to the Entitlement Issue 79,440,194 – – –  Lead Managers options 12,899,074 – 258,192 –  Repayment of Kalonda debt 714,286 – 14,297 –  Financing costs in respect to the convertible note options 6.2.1 – 72,800  Expiry of options (4,922,245) – – –

At reporting date 102,181,760 5,588,912 928,715 583,426

6.2.1 During the year, 2,000,000 options were granted as part of the convertible note. These options were not issued until subsequent to year end.

6.3 Reserves 2020 2019 $ $ Share-based payment reserve 928,715 583,426

928,715 583,426

Note 7 Share-based payments Note 2020 2019 $ $ 7.1 Share-based payments:  Recognised as Share-based payment expense – 133,663

Gross share-based payments – 133,663

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