More annual reports from Byggfakta Group:
2023 ReportANNUAL REPORT
2021
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ASX:BFG
$1.865
Dec 2021
CONTENTS
Overview
01 Highlights
Performance
02 Operating and Financial Review
08 Directors’ Report (Including Remuneration Report)
17 Lead Auditor’s Independence Declaration
Financial Statements
18 Statement of Profit or Loss
19 Statement of Comprehensive Income
20 Statement of Financial Position
21 Statement of Changes in Equity
22 Statement of Cash Flows
23 Notes to the Financial Statements
61 Directors’ Declaration
62 Independent Auditor’s Report
Other Information
66 Shareholder Information
68 Directory
Bell Financial Group Ltd is an
Australian-based provider of
full service and online broking,
investment and financial advisory
services to private, institutional
and corporate clients. Bell
Financial Group has over 760
employees, operates across
13 offices in Australia and has
offices in New York, London,
Hong Kong and Kuala Lumpur.
International
London
New York
Hong Kong
Kuala Lumpur
Australia
Adelaide
Brisbane
Cairns
Coolum
Geelong
Hobart
Mackay
Melbourne
Mornington
Orange
Perth
Sydney
Toowoomba
Bell Potter Securities Limited
COMMODITIES
FX
Bell Potter Capital Limited
BELL POTTER CAPITAL
Third Party Platform Pty Ltd
Bell Financial Group Ltd ABN 59 083 194 763
POTTER ONLINE
HIGHLIGHTS
Revenue
Profit After Tax
Funds Under Advice
$292.1m
$44.1m
$75.9b
2.4% decrease
on 2020
5.5% decrease
on 2020
18.8% increase
on 2020
Earnings Per Share
Dividend Per Share
Return on Equity
13.8¢ share
11.0¢ share 26.4%
5.5% decrease
on 2020
4.8% increase
on 2020
9% decrease
on 2020
Retail and Institutional Equities
Futures and Foreign Exchange
International Equities
Portfolio Administration
Superannuation
Fixed Income
Bell Client Funds at Call
Margin Lending
Structured Products
Retail Online Broking
Wholesale Online Broking
Institutional Online Broking
Annual Report 2021
01
Bell Financial Group
OPERATING AND FINANCIAL REVIEW
1. Group
In many ways, 2021 was a repeat of
2020. Ongoing uncertainty with rolling
lockdowns, border closures, working from
home, restrictions on travel, record low
interest rates and ongoing fiscal stimulus.
Against that backdrop it’s pleasing to
report the Group recorded another
outstanding result with a $44 million
profit (after tax), just shy of the record
result achieved in 2020.
All our businesses performed well.
Retail and Institutional Broking revenue
was consistent with 2020. The Equity
Capital Markets (ECM) team had another
excellent year notwithstanding revenue
was down marginally due to a skew
towards IPO transactions this year
versus secondary market transactions
last year which are less time consuming.
Over 100 transactions were completed,
raising more than $2.6 billion in new
equity capital for ASX listed companies.
We continue executing on our strategy
of investing in technology, platforms,
products and services. While the
investment is reflected in an increase
in overheads, the benefits are real and
measurable. Revenues and profit in these
two divisions grew 10% and 12.5% in
2021 to $68 million and $15 million (after
tax) respectively, and are becoming an
increasingly material component of our
earnings.
TPP currently clears one third of
Bell Potter Securities trades, with the
remainder to be cleared from mid-2022.
This will result in a meaningful release
in cost synergies across the Group.
Another significant milestone achieved
in 2021 was the signing of our first
external Third Party Clearing client,
Macquarie Equities Limited. We ran
a pilot program in the third quarter of
2021, and successfully migrated and
commenced clearing for the first tranche
of clients in late November. The balance
of clients are expected to transfer in the
first half of 2022. We expect the Third
Party Clearing business will make a
meaningful contribution to our numbers
going forward.
During the year we were fortunate enough
to be in a position to renew several of our
long-term property leases, taking
advantage of a depressed commercial
property market. We expect cash flow
savings totalling $30 million over the
next 10 years.
Funds under Advice, which underpin
our long-term performance continue
to grow. They have reached almost
$76 billion at the end of December, having
increased 19% on 2020, and have grown
at a compound rate of over 12% across
the last 5 years.
Importantly, the Group’s strong
performance has enabled us to increase
the fully franked dividend payout again
this year to a record 11 cents per share.
Profit After Tax ($M)
Earnings Per Share (Cents)
50
45
40
35
30
25
20
15
10
5
0
CAGR
+20.9% (5-YR)
46.7
44.1
32.4
24.4
20.6
2017
2018
2019
2020
2021
2021 Profit after Tax of $44.1 million
was 5.5% down on 2020. The reduction
resulted from marginally lower revenue
and an increase in overheads reflecting
our investment in technology, platforms
products and services.
16
14
12
10
8
6
4
2
0
CAGR
+15.3% (5-YR)
14.6
13.8
10.2
7.8
8.4
2017
2018
2019
2020
2021
2021 Earnings Per Share (EPS) of
13.8 cents was down 5.5% on 2020.
Revenue ($M)
Return On Equity
350
300
250
200
150
100
50
0
CAGR
+9.2% (5-YR)
299.3
292.1
254.5
205.8
220.0
2017
2018
2019
2020
2021
35%
30%
25%
20%
15%
10%
5%
0%
CAGR
+15.5% (5-YR)
29.0%
22.0%
26.4%
17.3%
14.9%
2017
2018
2019
2020
2021
Dividends Paid ($M) and Gross
Dividend Yield (%)
40
35
30
25
20
15
10
5
0
CAGR
+15.4% (5-YR)
$33.6
$35.3
$25.6
$22.3
$19.9
14.3%
11.8%
9.6%
8.2%
8.4%
2017
2018
2019
2020
2021
Dividends Paid ($M)
Gross Dividend Yield (%)
15%
10%
5%
0%
2021 Revenue was down marginally on
2020, due mainly to a reduction in year
on year Equity Capital Markets revenue.
2021 Return on Equity (ROE) remained
strong at 26.4%.
$35.3 million in fully franked dividends were
paid in 2021, up 4.8% on 2020. A five year
CAGR of 15.4%.
02
Bell Financial GroupAnnual Report 2021 Funds Under Advice ($B)
80
70
60
50
40
30
20
10
0
CAGR
+12.6% (5-YR)
75.9
63.9
58.4
47.2
46.8
2017
2018
2019
2020
2021
Funds under Advice (FUA) continue
to grow strongly. $75.9 billion at
31 December 2021, 18.8% ahead
of December 2020. A five year
CAGR of 12.6%.
The benchmark S&P/ASX200 index
was up 13.0% in 2021.
Technology & Platforms and Products
& Services Revenue Breakdown ($M)
75
70
65
60
55
50
45
40
35
30
25
20
15
10
5
0
CAGR
+11.8% (5-YR)
67.7
4.1
0.9
18.4
27.8
61.5
3.7
3.1
15.6
24.3
14.8
16.5
52.9
3.7
3.2
15.2
17.9
12.9
43.3
3.5
3.4
12.6
14.2
9.6
2017
46.5
3.7
3.3
13.8
15.2
10.5
2018
2019
2020
2021
Other
Super
PAS
Online share trading platform
Margin Lending, cash & structured products
Our strategy is one of continuous
investment in proprietary platforms,
technology and in-house products and
services. The benefits are real and
measurable, with revenue of $67.7 million
up 10.1% on 2020 resulting in a five year
CAGR of 11.8%. This now represents 23%
of Group revenue.
BFG Share Price Movement: January 2017 – December 2021
200%
150%
100%
50%
0%
-50%
2 Jan 17
2 Jan 18
2 Jan 19
2 Jan 20
2 Jan 21
BFG Share Price ($A)
XJO (%)
BFG share price closed at $1.865 on 31 December 2021.
$2.00
$1.75
$1.50
$1.25
$1.00
$0.75
$0.50
03
Bell Financial GroupAnnual Report 2021 OPERATING AND FINANCIAL REVIEW continued
2. Broking – Retail & Institutional
Bell Potter Securities (BPS)
Brokerage Revenue ($M)
ECM and Syndication Revenue ($M)
Profit After Tax ($M)
120
110
100
90
80
70
60
50
40
30
20
10
0
CAGR
+3% (5-YR)
105.7
104.4
92.6
91.6
94.6
72.9
73.2
76.6
85.2
85.4
19.7
18.4
18
20.5
19.0
2017
2018
2019
2020
2021
110
100
90
80
70
60
50
40
30
20
10
0
54.6
52.4
2.2
2017
CAGR
+17.6% (5-YR)
109.0
104.4
83.0
77.7
66.4
62.0
106.4
99.8
4.4
2018
5.3
2019
2.6
2020
4.6
2021
35
30
25
20
15
10
5
0
Institutional
Retail
Syndication
ECM
CAGR
+27.9% (5-YR)
33.2
28.8
21.8
14.6
10.8
2017
2018
2019
2020
2021
$28.8 million profit after tax, down 13.2%
on 2020.
Brokerage from our Institutional and
Retail desks was $104.4 million for the
year, consistent with 2020.
Our Equity Capital Markets (ECM) team
had another excellent year, our second
best on record, notwithstanding revenue
being down 4.2% on 2020. This reduction
was due to a transaction skew towards
IPOs, this year compared with secondary
market transactions last year which are
less time consuming.
We completed 101 transactions across
the period raising more than $2.6 billion
in new equity capital for ASX listed
companies.
04
Bell Financial GroupAnnual Report 2021 3. Technology & Platforms
Third Party Platform Pty Ltd (TPP)
Revenue ($M)
30
25
20
15
10
5
0
14.2
2.8
2.8
7.5
3.9
2017
CAGR
+18.2% (5-YR)
3.4
18.0
3.4
8.6
6.0
2.9
15.2
2.9
7.6
4.7
6.1
27.8
6.0
2.6
11.8
6.1
24.3
6.1
10.5
7.7
7.4
2018
2019
2020
2021
Desktop Broker
Bell Direct
White Label
Bell Direct Advantage
$27.8 million revenue, a 14.6% increase
on 2020, and an 18.2% 5-year CAGR.
TPP operates six distinct businesses:
• Bell Direct – our proprietary online
retail broking business.
• Bell Direct Advantage – General
advice high net worth desk.
• Desktop Broker – provides execution
and clearing services to the Financial
Planning industry.
• White Label Online Broking – TPP’s
turn-key online broking solution.
Current clients include Macquarie,
HSBC, and Bell Potter Online.
• Third Party Clearing – TPP is an ASX
General Participant, enabling it to
provide Third Party Clearing services
to the Australian stockbroking
industry.
• Technology – Continuous development
of proprietary software applications
for TPP and the wider Bell Financial
Group. We anticipate this will lead to
third party distribution opportunities
in the future.
Profit After Tax ($M)
Sponsored Holdings ($B)
Client Accounts (’000)
5.0
4.0
3.0
2.0
1.0
0.0
CAGR
+26.1% (5-YR)
4.8
4.2
2.5
1.9
1.6
2017
2018
2019
2020
2021
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
CAGR
+19.9% (5-YR)
32.4
26.5
22.0
15.7
16.7
2017
2018
2019
2020
2021
250
200
150
100
50
0
CAGR
+12.9% (5-YR)
234
207
176
160
144
2017
2018
2019
2020
2021
$4.8 million net profit after tax, a 14.3%
increase on 2020.
TPP sponsored holdings increased
22.4% year on year, and have increased
on average 19.9% per annum over the
past five years.
TPP client numbers increased 13.0%
in 2021, and now stand at more than
234,000.
05
Bell Financial GroupAnnual Report 2021 OPERATING AND FINANCIAL REVIEW continued
4. Products & Services
Bell Potter Capital (BPC)
Revenue ($M)
Portfolio Lending & Client Funds At Call
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
CAGR
+14.5% (5-YR)
12.9
16.5
14.8
10.5
9.6
2017
2018
2019
2020
2021
Bell Potter Capital (BPC) revenue
increased 11.5% year on year to
$16.5 million, resulting in a 5-year
CAGR of 14.5%.
Profit After Tax ($M)
12.0
9.0
6.0
3.0
0.0
CAGR
+7.2% (5-YR)
10.5
9.3
8.0
8.1
8.2
2017
2018
2019
2020
2021
$10.5 million net profit after tax, a 12.8%
increase on 2020.
Revenue
PAS & Super Solutions ($M)
25.0
20.0
15.0
16.1
17.5
CAGR
+8.7% (5-YR)
22.5
18.9
19.3
10.0
5.0
0.0
2017
2018
2019
2020
2021
Portfolio Administration Services
(PAS) and Superannuation products is
an area where we continue to focus.
Funds under Advice on PAS and
Superannuation now exceed $4.5 billion,
generate more than $22.5 million in
revenue, and have been growing at
an average rate of 8.7% over the
past 5 years.
Loan Book ($M)
Bell Financial Trust ($M)
Client Funds At Call
FUA – PAS & Superannuation
Assets ($B)
600
500
400
300
200
100
0
CAGR
+16.9% (5-YR)
545
534
470
286
296
2017
2018
2019
2020
2021
500
400
300
200
100
0
CAGR
+11.0% (5-YR)
382
481
437
317
276
2017
2018
2019
2020
2021
5.0
4.0
3.0
2.0
1.0
0.0
CAGR
+9.2% (5-YR)
4.1
4.2
4.5
3.2
3.2
2017
2018
2019
2020
2021
Solid growth was achieved in 2021, with
the loan book increasing 13.5%.
Client funds at call increased 10% year
on year to $481 million.
Portfolio Administration Service and
Superannuation product assets continue
to grow. A five year 9.2% CAGR.
06
Bell Financial GroupAnnual Report 2021 5. Growth Through Investment In Proprietary Technology,
Platforms, Products & Services
We have a simple strategy. Growth
through our traditional full service
broking businesses augmented by
investment in leading edge technology
through our ongoing commitment to
the continuous development of our
proprietary systems and platforms and
suite of products and services.
Our investment in technology, platforms,
products and services benefits not only
our internal broking businesses, it has
broader application for third parties in
the Australian financial services and
broking market.
OUTLOOK
Prospects for 2022 appear to be higher
interest rates, higher inflation, increased
volatility, and an extremely tight labour
market. Add to that a keenly fought
Australian Federal Election and we have
interesting prospects for the year ahead.
It appears that COVID-19 restrictions
in Australia and around the world are
easing. Staff are returning to offices and
domestic and international borders are
opening for fully vaccinated travellers. All
of which will be extremely positive for our
company as we return to a more normal
working environment.
We are a people business with face-
to-face contact and interaction with
colleagues and clients an essential part
of what we do. Most of our staff are well
and truly over the novelty of working from
home and endless Zoom calls.
Systems and Platforms
FUSION – In-house
desktop application
covering all aspects
of adviser day-to-day
functions
IQ – Price discovery
and trade execution
platform
TPP – Market leading
fully integrated
online trading
platform
THIRD PARTY PLATFORM
Products & Services
• Bell Potter Portfolio Lending
• Bell Financial Trust
• Structured Loan Products
• Bell Potter Portfolio Administration
Service (PAS)
• Bell Potter Personal
Superannuation Solutions
• Guided Portfolio Service (GPS)
• Australian Equities Research
From a business perspective we carry
over a strong pipeline of ECM work from
last year. There are high levels of liquidity
in the system and demand remains high.
All our business divisions continue to
perform well and present opportunities
for investment and growth.
I look forward to another strong
performance from Bell Financial Group
in 2022 and again thank our staff and
clients for their continued efforts,
support, and contribution to the
ongoing success of our business.
Alastair Provan
Executive Chairman
07
Bell Financial GroupAnnual Report 2021 DIRECTORS’ REPORT
For the year ended 31 December 2021
The Directors of Bell Financial Group Limited (Bell Financial or the Company) present their report, together with the financial
report, on the consolidated entity (Group) consisting of Bell Financial and its controlled entities for the financial year ended
31 December 2021.
Board of Directors
The names and details of the Directors of the Company holding office during the financial year and as at the date of this report
are listed below. Directors were in office for the entire period, unless otherwise stated.
Alastair Provan
Graham Cubbin
BEcon (Hons), FAICD
Brian Wilson AO
MComm (Hons), Hon DUniv
Mr Provan is the Executive Chairman
of Bell Financial and he is responsible
for the day-to-day management of all
businesses within the Group. Mr Provan
was appointed as Executive Chairman
of Bell Financial in August 2019. Prior
to that he was the Managing Director.
Mr Provan joined Bell Commodities in
1983 and held a number of dealing and
management roles prior to becoming
Managing Director in 1989.
Mr Wilson is an Independent Director.
He is also a member of the Group
Risk and Audit Committee. Mr Wilson
was appointed to the Board in October
2009. He is a Senior Advisor to The
Carlyle Group and Chairman of the
UTS Foundation. Mr Wilson is the
former Chairman of Australia’s Foreign
Investment Review Board, a former
Chancellor of University of Technology
Sydney and a former member of the
Payments System Board of the Reserve
Bank of Australia. He was a member
of the Commonwealth Government
Review of Australia’s Superannuation
System and a member of the ATO
Superannuation Reform Steering
Committee. Mr Wilson retired in 2009
as a Managing Director of the global
investment bank Lazard, after co-
founding the firm in Australia in 2004
and prior to that was a Vice-Chairman
of Citigroup Australia and its
predecessor companies.
Mr Cubbin is an Independent Director.
He is also Chairman of the Group Risk
and Audit Committee. Mr Cubbin was
appointed to the Board in September
2007. Mr Cubbin was a senior
executive with Consolidated Press
Holdings Limited (CPH) from 1990
until September 2005, including Chief
Financial Officer for 13 years. Prior
to joining CPH, he held senior finance
positions with a number of major
companies including Capita Financial
Group and Ford Motor Company.
Mr Cubbin has over 20 years’ experience
as a Director and Audit Committee
member of public companies
in Australia and the US. He is a
Non-Executive Director of Teys
Australia Pty Ltd.
Other listed companies
– past three years
Non-Executive Director, McPherson’s
Limited (September 2010-present)
Non-Executive Director, White
Energy Company Limited (February
2010-present)
Non-Executive Director, WPP AUNZ
Limited (May 2008-May 2021)
08
Bell Financial GroupAnnual Report 2021 Christine Feldmanis
BComm, MAppFin, SFFin, TFASFA,
FAICD, CPA, CSA, AGIA, JP
Craig Coleman
BComm
Mr Coleman was appointed to
the Board in July 2007 and retired
on 17 February 2021. He was an
Independent Director and a member
of the Group Risk and Audit Committee.
Mr Coleman is Executive Chairman
of private and public equities fund
manager, Viburnum Funds Pty Ltd.
Previously, he was Managing Director
and a Non-Executive Director of Home
Building Society Limited. Prior to joining
Home Building Society, Mr Coleman
held a number of senior executive
positions and directorships with ANZ,
including Managing Director – Banking
Products, Managing Director – Wealth
Management and Non-Executive
Director of Etrade Australia Limited.
Other listed companies
– past three years
Chairman, Sports Entertainment Group
Ltd (November 2017-present)
Chairman, Universal Biosensors Inc
(June 2016-present)
Ms Feldmanis is a Non-Executive
Director and was appointed to the
Board in February 2020. She has more
than 30 years of experience in the
financial arena, with both government
and private sectors. Ms Feldmanis has
extensive experience in investment
management, finance, accounting and
risk management, legal and regulatory
compliance, governance and business
building in both the listed and unlisted
financial products markets. She is
currently a Non-Executive Director and
Chair of the Audit and Risk Committees
of Omni Bridgeway Ltd (formerly IMF
Bentham Ltd), Rabobank Australia Ltd,
Utilities of Australia Pty Ltd, Deputy
Chair of Hunter Water Corporation,
and is Chair of Bell Asset Management
Ltd. Ms Feldmanis formerly held senior
executive and C suite positions with
firms including Deloitte, Elders Finance,
Bankers Trust, NSW TCorp and Treasury
Group Limited.
Other listed companies
– past three years
Non-Executive Director, Omni
Bridgeway Ltd (May 2008-present)
Non-Executive Director, Perpetual
Equity Investment Company Ltd
(September 2014-October 2020)
09
Bell Financial GroupAnnual Report 2021 DIRECTORS’ REPORT continued
For the year ended 31 December 2021
Principal activities
Bell Financial is an Australian-based provider of full service and online broking, investment and financial advisory services
to private, institutional and corporate clients. The Group is also a developer of proprietary technology, platforms, products and
services for the Australian stockbroking market. With over 760 employees, Bell Financial operates across 13 offices in Australia
and has offices in New York, London, Hong Kong and Kuala Lumpur.
Review and results of operations
Information on the operations and financial position of the Group is set out in our Operating and Financial Review on pages 2 to 7.
At the date of issue of this financial report, the impact of COVID-19 on Bell Financial has not been material. The future impact
on global and domestic economies and investment market indices is uncertain and Bell Financial continues to monitor.
Dividends
On 16 February 2022, the Directors resolved to pay a fully franked final dividend of 6.5 cents per share.
Dividends paid to shareholders during the year ended 31 December 2021 were as follows:
Dividend
Final 2020 ordinary
Interim 2021 ordinary
Per share
6.5 cents
4.5 cents
Total
$’000
20,848
14,433
Fully
Franked
Yes
Yes
Date of
payment
17 March 2021
26 August 2021
Significant changes in the state of affairs
There were no significant changes in Bell Financial’s state of affairs or the nature of its principal activities during the financial
year ended 31 December 2021.
Business strategies, prospects and likely developments
The Operating and Financial Review sets out key information on Bell Financial’s operations and financial position, and provides
an overview of its business strategies and prospects for future financial years. Details likely to result in unreasonable prejudice to
the Group (e.g. information that is commercially sensitive, confidential or which could give a third party a commercial advantage)
have not been included.
Events after the end of the financial year
There has not arisen in the interval between the end of the financial year and the date of this report, any matter or circumstance
that has significantly affected, or may significantly affect, in the opinion of the Directors of Bell Financial:
(a) the Group’s operations in future financial years, or
(b) the results of those operations in future financial years, or
(c) the Group’s state of affairs in future financial years.
Directors’ meetings
The number of Board and Committee meetings held during the year that each Director was eligible to attend, and the number of
meetings attended by each Director were:
Director
Alastair Provan
Graham Cubbin
Brian Wilson AO
Christine Feldmanis
Craig Coleman1
Board
Attended
4
4
4
4
1
Held
4
4
4
4
1
Group Risk and Audit Committee
Observed
5
-
-
1
-
Attended
-
5
5
4
1
Held
5
5
5
5
1
1. Craig Coleman retired from the Board on 17 February 2021.
10
Bell Financial GroupAnnual Report 2021 Directors’ shareholdings in Bell Financial Group
As at the date of this report, the relevant interests of each Director in BFG ordinary shares, as notified to the ASX in accordance
with the Corporations Act 2001 (Corporations Act), are set out below. No Directors held options over BFG shares during the year
ended 31 December 2021.
Director
Alastair Provan1
Graham Cubbin
Brian Wilson AO
Christine Feldmanis
Fully paid
ordinary
shares
4,999,070
216,000
1,200,000
50,000
Deemed
relevant
interest
146,230,350
-
-
-
Total
151,229,420
216,000
1,200,000
50,000
1. Bell Group Holdings Pty Limited (BGH) holds 143,998,350 BFG ordinary shares. BGH’s wholly-owned subsidiary, Bell Securities Pty Limited (BSPL) holds
2,232,000 BFG ordinary shares. Alastair Provan holds more than 20% of BGH and therefore under the Corporations Act is deemed to have a relevant
interest in the 146,230,350 BFG ordinary shares held by BGH and BSPL.
Company Secretary
Cindy-Jane Lee, BEc, LLB, GAICD was appointed as Company Secretary on 10 January 2014 and is also the Group’s General
Counsel. Before joining Bell Financial, Ms Lee held the position of Regional Legal Counsel, South Asia with Mercer. Ms Lee has
over 20 years’ experience in corporate and financial services law working in law firms and multinational companies in Australia,
London and Singapore. Ms Lee holds a Bachelor of Economics and a Bachelor of Laws from Monash University.
Corporate Governance
Bell Financial recognises the importance of good corporate governance. As required under the ASX listing rules, Bell Financial
has a Corporate Governance Statement which has been lodged with the ASX, disclosing the extent to which we have followed the
recommendations set by the ASX Corporate Governance Council during the reporting period. A copy of our Corporate Governance
Statement is located at the Corporate Governance section of our website: www.bellfg.com.au/#corporate-governance. Copies of
the Board Charter, Code of Conduct, Group Risk and Audit Committee Charter, Diversity Policy, Disclosure and Communication
Policy and Guidelines, Description of Risk Management Policy and Framework, Trading Policy, Whistleblower Policy and Modern
Slavery Statement are also located here.
Directors’ and officers’ indemnity and insurance
Bell Financial has agreed to indemnify the Directors against all liabilities to another person (other than Bell Financial or a
related entity) that may arise from their position as officers of Bell Financial or its controlled entities, except where the liability
arises out of conduct including a lack of good faith. Except for the above, neither Bell Financial nor any of its controlled entities
has indemnified any person who is or has been an officer or auditor of Bell Financial or its controlled entities. Since the end of
the previous financial year Bell Financial has paid a premium for an insurance policy for the benefit of the Directors, officers,
company secretaries and senior executives. The insurance policy prohibits disclosure of the premium payable under the policy
and the nature of the liability covered.
Environmental regulation
The operations of the Group are not subject to any particular and significant environmental regulation under a law of the
Commonwealth or of a State or Territory.
Non-audit services
During the year, Bell Financial’s auditor, KPMG, performed certain other services in addition to its statutory auditor duties.
Details of the amounts paid to KPMG for audit and non-audit services during the year are set out in Note 38 of the Financial
Statements.
The Directors are satisfied, based on advice provided by the Group Risk and Audit Committee, that the provision of these non-
audit services during the year by the auditor is compatible with, and does not compromise, the general standard of independence
for auditors imposed by the Corporations Act, for the reasons that:
• services provided during the year are not considered to be materially in conflict with the role of the auditor; and
• the Directors are unaware of any matter relating to the provision of non-audit services which would impair the impartial and
objective judgement of the auditor.
A copy of the Lead Auditor’s Independence Declaration is set out on page 17.
11
Bell Financial GroupAnnual Report 2021 DIRECTORS’ REPORT continued
For the year ended 31 December 2021
Remuneration Report (audited)
This Remuneration Report describes Bell Financial’s ‘Key Management Personnel’ (KMP) remuneration arrangements
as required by the Corporations Act.
1. KMP
Bell Financial’s KMP during the reporting period were:
Directors
Alastair Provan
Graham Cubbin
Brian Wilson AO
Christine Feldmanis
Craig Coleman1
Senior Executives
Lewis Bell
Andrew Bell
Dean Davenport
Rowan Fell
Executive Chairman
Independent Director
Independent Director
Non-Executive Director
Independent Director
Head of Compliance
Executive Director – Bell Potter Securities Ltd
Chief Financial Officer
Chief Executive Officer – Bell Potter Capital Ltd
1. Craig Coleman retired from the Board on 17 February 2021.
In this report, ‘Executive KMP’ refers to the above persons excluding Independent Directors and Non-Executive Directors.
2. Overview of remuneration policy and framework
Bell Financial remunerates Executive KMP and other executives, management and advisers by one or more of fixed salary,
commission entitlements and other short-term and long-term incentives. Independent Directors and Non-Executive Directors
receive a fixed fee and the superannuation guarantee rate only for their role on the Board. Where remuneration is linked to
performance, net profit/(loss) after tax and Earnings per Share are key performance measures, in addition to individual objectives.
In considering the Group’s performance and benefits for shareholder wealth, the Board has regard to the following financial
indicators in respect of the current financial year and previous financial years.
Net profit/(loss) after tax $’000
Share price at year end $
Earnings per Share (cents)
Dividends paid $’000
2017
$21,443
$0.75
7.8
$15,196
2018
$24,737
$0.85
8.4
$23,312
2019
$32,443
$1.19
10.2
$24,660
2020
$46,695
$1.82
14.6
$27,263
2021
$44,118
$1.865
13.8
$35,281
The Company has established two equity-based plans to assist in the attraction, retention and motivation of Executive KMP,
management and employees of the Company, the Long-Term Incentive Plan (LTIP) and the Employee Share Acquisition (Tax
Exempt) Plan. Each plan contains customary and standard terms for dealing with the administration of an employee share plan,
and the termination and suspension of the plan. Participants in the plans must not enter into a transaction or arrangement or
otherwise deal in financial products which operate to limit the economic risk of the unvested Bell Financial securities issued
under the plans.
3. Fixed compensation
Fixed compensation consists of base compensation as well as employer contributions to superannuation funds. Compensation
levels are reviewed annually through a process that considers individual performance and that of the overall Group.
4. Commission
Commission entitlements are determined by the Board from time to time and aim to align the remuneration of Executive KMP
and advisers with the Company’s performance. Certain executives and advisers are paid a commission based on revenue
generated by the individual during the year. This creates a strong incentive for key executives and advisers to maximise the
Company’s revenue and performance.
12
Bell Financial GroupAnnual Report 2021 5. Performance linked compensation
Performance linked compensation includes both short-term and long-term incentives and is designed to reward Executive KMP
for meeting or exceeding their financial and individual objectives. The short-term incentive is an ‘at risk’ bonus provided in the
form of cash and/or shares, while the long-term incentive is provided as options or performance rights over ordinary shares
of the Company.
6. Short-term incentive bonus
The Company may pay Executive KMP and other executives a short-term incentive (STI) annually. The Board is responsible
for determining who is eligible to participate in STI arrangements, as well as the structure of those arrangements.
There are two types of STI arrangements, being:
• the STI payable to executives who are not remunerated by reference to commission, which is a discretionary annual cash bonus
and/or shares determined based on the Company’s financial performance during the year, key performance indicators, industry
competitive measures and individual performance over the period; and
• the STI payable to the Executive Chairman, which is a discretionary annual cash bonus, up to three times annual salary,
determined based on the Company’s financial performance during the year, key performance indicators and individual
performance over the period.
These STI arrangements aim to ensure that executive remuneration is aligned with the Company’s financial performance
and growth.
7. Long-term incentive plan (LTIP)
The LTIP is part of the Company’s remuneration strategy and is designed to align the interests of the Company’s Executive KMP,
other executives and advisers with the interests of shareholders to assist the Company in the attraction, motivation and retention
of Executive KMP, other executives and advisers. In particular, the LTIP is designed to provide relevant Executive KMP, other
executives and advisers with an incentive for future performance, with conditions for the vesting and exercise of the options
or performance rights under the LTIP, therefore encouraging them to remain with the Company and contribute to its future
performance.
Eligible persons participating may be granted options or performance rights on the terms and conditions in the LTIP rules and as
determined by the Board from time to time. An option or performance right is a right, subject to the satisfaction of the applicable
vesting conditions and exercise conditions, to subscribe for a share in the Company.
If persons become entitled to participate in the LTIP and their participation requires approval under Chapter 10 of the ASX listing
rules, they will not participate in the LTIP until that shareholder approval is received.
No options or performance rights were granted under the LTIP in 2021.
8. Service agreements
8.1 Executive Chairman
Bell Financial entered into a service agreement with its Executive Chairman, Alastair Provan effective from listing in December
2007. This agreement sets out the terms of his appointment, including responsibilities, duties, rights and remuneration.
A summary of Mr Provan’s remuneration including benefits under the short-term and long-term incentive plans is set out in the
KMP remuneration table in Section 8.4.
Bell Financial may terminate Mr Provan’s service agreement on 12 months’ notice, or immediately for cause. If his agreement
is terminated on 12 months’ notice, Bell Financial has agreed to vest early any unvested options under the LTIP and to allow
their early exercise. Mr Provan may terminate his service agreement on six months’ notice. He has entered into non-competition
covenants with Bell Financial which operate for six months from termination of his service agreement.
8.2 Senior Executives
All key executives are permanent employees of Bell Financial. Each executive has an employment contract with no fixed end date.
Any executive may resign from their position by giving four weeks’ written notice. The Company may terminate an employment
contract by providing written notice or making payment in lieu of notice in accordance with the Company’s termination policies.
The Company may terminate an employment contract at any time for serious misconduct.
13
Bell Financial GroupAnnual Report 2021 DIRECTORS’ REPORT continued
For the year ended 31 December 2021
Remuneration Report (audited) continued
8. Service agreements continued
8.3 Independent Directors and Non-Executive Directors
On appointment to the Board, each Independent Director and Non-Executive Director was provided with a letter of appointment
setting out the terms of their appointment, including responsibilities, duties, rights and remuneration, relevant to the office of
director. Independent Directors and Non-Executive Directors do not receive bonuses, incentive payments or equity-based pay.
They receive a fixed annual fee inclusive of compulsory superannuation contributions. Their remuneration for the reporting
period was:
Name
Brian Wilson AO
Graham Cubbin
Christine Feldmanis
Craig Coleman1
Directors’ fees
$
91,117
91,117
100,000
12,176
Superannuation
$
8,883
8,883
-
1,157
Total
$
100,000
100,000
100,000
13,333
1. Craig Coleman retired from the Board on 17 February 2021.
8.4 KMP remuneration
Details of the remuneration of each KMP are tabled below.
Directors
Executive Directors
Alastair Provan, Executive Chairman
Independent Directors and Non-Executive Directors
Graham Cubbin
Brian Wilson AO
Christine Feldmanis
Craig Coleman1
Total compensation: Directors (consolidated)
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
Senior Executives
Lewis Bell, Head of Compliance
Dean Davenport, Chief Financial Officer
2021
2020
Andrew Bell, Executive Director of Bell Potter Securities 2021
2020
2021
2020
2021
2020
2021
2020
Rowan Fell, Chief Executive Officer of Bell Potter Capital
Total compensation: Executives (consolidated)
1. Craig Coleman retired from the Board on 17 February 2021.
14
Short-term
Post-employment
Salary & fees
$
STI cash
bonus
$
Non-monetary
benefits
$
521,645
522,927
500,000
500,000
91,117
91,324
91,117
91,324
100,000
85,641
12,176
91,324
816,054
882,540
366,871
368,154
491,505
420,907
287,405
311,539
280,904
288,500
1,426,685
1,389,100
-
-
-
-
-
-
-
-
500,000
500,000
-
-
-
-
225,000
200,000
200,000
550,000
425,000
750,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
1,021,645
1,022,927
91,117
91,324
91,117
91,324
100,000
85,641
12,176
91,324
1,316,054
1,382,540
366,871
368,154
491,505
420,907
512,405
511,539
480,904
838,500
1,851,685
2,139,100
Superannuation
Other
Termination
Share-based
benefits
long term
benefits
payments
$
$
$
$
Proportion of
remuneration
performance
related
%
Value of options
as proportion of
remuneration
22,631
21,348
8,883
8,676
8,883
8,676
-
-
1,157
8,676
41,555
47,376
22,631
21,348
26,719
12,655
26,250
25,000
26,250
25,000
101,850
84,003
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
36,345
13,461
22,846
16,500
59,191
29,961
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
63,700
59,500
63,700
59,500
Total
$
1,044,276
1,044,275
100,000
100,000
100,000
100,000
100,000
85,641
13,333
100,000
1,357,609
1,429,916
389,502
389,502
518,224
433,562
638,700
609,500
530,000
880,000
2,076,426
2,312,564
48%
48%
0%
0%
0%
0%
0%
0%
0%
0%
37%
35%
0%
0%
100%
100%
45%
43%
38%
63%
48%
54%
%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Bell Financial GroupAnnual Report 2021 Remuneration Report (audited) continued
8. Service agreements continued
8.3 Independent Directors and Non-Executive Directors
On appointment to the Board, each Independent Director and Non-Executive Director was provided with a letter of appointment
setting out the terms of their appointment, including responsibilities, duties, rights and remuneration, relevant to the office of
director. Independent Directors and Non-Executive Directors do not receive bonuses, incentive payments or equity-based pay.
They receive a fixed annual fee inclusive of compulsory superannuation contributions. Their remuneration for the reporting
period was:
Name
Brian Wilson AO
Graham Cubbin
Christine Feldmanis
Craig Coleman1
Directors’ fees
Superannuation
$
91,117
91,117
100,000
12,176
8,883
8,883
$
-
1,157
1. Craig Coleman retired from the Board on 17 February 2021.
8.4 KMP remuneration
Details of the remuneration of each KMP are tabled below.
Directors
Executive Directors
Alastair Provan, Executive Chairman
Independent Directors and Non-Executive Directors
Graham Cubbin
Brian Wilson AO
Christine Feldmanis
Craig Coleman1
Total compensation: Directors (consolidated)
Senior Executives
Lewis Bell, Head of Compliance
Andrew Bell, Executive Director of Bell Potter Securities 2021
Dean Davenport, Chief Financial Officer
Rowan Fell, Chief Executive Officer of Bell Potter Capital
Total compensation: Executives (consolidated)
1. Craig Coleman retired from the Board on 17 February 2021.
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2020
2021
2020
2021
2020
2021
2020
521,645
522,927
500,000
500,000
91,117
91,324
91,117
91,324
100,000
85,641
12,176
91,324
816,054
882,540
366,871
368,154
491,505
420,907
287,405
311,539
280,904
288,500
1,426,685
1,389,100
-
-
-
-
-
-
-
-
-
-
-
-
500,000
500,000
225,000
200,000
200,000
550,000
425,000
750,000
Total
$
100,000
100,000
100,000
13,333
1,021,645
1,022,927
91,117
91,324
91,117
91,324
100,000
85,641
12,176
91,324
1,316,054
1,382,540
366,871
368,154
491,505
420,907
512,405
511,539
480,904
838,500
1,851,685
2,139,100
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Short-term
Post-employment
STI cash
Non-monetary
Salary & fees
$
bonus
$
benefits
$
Total
$
Superannuation
benefits
$
Other
long term
$
Termination
benefits
$
Share-based
payments
$
22,631
21,348
8,883
8,676
8,883
8,676
-
-
1,157
8,676
41,555
47,376
22,631
21,348
26,719
12,655
26,250
25,000
26,250
25,000
101,850
84,003
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
36,345
13,461
22,846
16,500
59,191
29,961
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
63,700
59,500
-
-
63,700
59,500
Total
$
1,044,276
1,044,275
100,000
100,000
100,000
100,000
100,000
85,641
13,333
100,000
1,357,609
1,429,916
389,502
389,502
518,224
433,562
638,700
609,500
530,000
880,000
2,076,426
2,312,564
Proportion of
remuneration
performance
related
%
Value of options
as proportion of
remuneration
%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
48%
48%
0%
0%
0%
0%
0%
0%
0%
0%
37%
35%
0%
0%
100%
100%
45%
43%
38%
63%
48%
54%
15
Bell Financial GroupAnnual Report 2021 DIRECTORS’ REPORT continued
For the year ended 31 December 2021
Remuneration Report (audited) continued
8. Service agreements continued
8.5 Options and equity instruments
No options over the Company’s shares or other equity instruments are held by KMP.
9. Loans to KMP and their related parties
All loans to KMP and their related parties are margin loans provided in the ordinary course of business on standard terms and
conditions that are no more favourable than those provided to other employees or clients, including the interest rate and security
required. Details on the aggregate loans provided to KMP and their related parties are as follows.
Opening balance
Closing balance1
Interest charged
31 Dec 2021
$
1,896,810
2,020,423
52,649
1. The aggregate loan amount at the end of the reporting period includes loans to 5 KMP.
Details of KMP (including their related parties) with an aggregate of loans above $100,000 during the reporting period are as
follows:
Lewis Bell
Andrew Bell
Rowan Fell
Dean Davenport
Craig Coleman
Balance
1 Jan 21
$
100,965
404,494
861,383
176,093
353,875
Balance
31 Dec 21
$
298,908
539,310
971,756
210,449
-
Interest paid
and payable
in period
$
3,248
11,282
29,404
5,554
3,161
Highest
balance in
period1
$
298,908
539,310
1,190,222
220,822
476,527
1. Represents the highest loan balance during the reporting period for the individual KMP. All other items in the table relate to KMP and their related parties.
Lead auditor’s independence declaration
The lead auditor’s independence declaration is set out on page 17 and forms part of the Directors’ Report for the financial year
ended 31 December 2021.
Rounding of amounts
Bell Financial is an entity to which ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 applies.
Amounts in this report have been rounded off in accordance with that instrument to the nearest thousand dollars, or in certain
cases, to the nearest dollar.
This report is made on 16 February 2022 in accordance with a resolution of the directors.
Alastair Provan
Executive Chairman
16 February 2022
16
Bell Financial GroupAnnual Report 2021 LEAD AUDITOR’S INDEPENDENCE DECLARATION
For the year ended 31 December 2021
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Bell Financial Group Ltd
I declare that, to the best of my knowledge and belief, in relation to the audit of Bell Financial Group
Limited for the financial year ended 31 December 2021 there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Chris Wooden
Partner
Melbourne
16 February 2022
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo
are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a
scheme approved under Professional Standards Legislation.
17
Bell Financial GroupAnnual Report 2021
STATEMENT OF PROFIT OR LOSS
For the year ended 31 December 2021
Rendering of services
Finance income
Investment gains/(losses)
Other income
Total revenue
Employee expenses
Depreciation and amortisation expenses
Occupancy expenses
System and communication expenses
Market information expenses
ASX & Other clearing expenses
Professional expenses
Finance expenses
Other expenses
Total expenses
Profit before income tax
Income tax expense
Profit for the year
Attributable to:
Equity holders of the Company
Profit for the year
Earnings per share:
Basic earnings per share
Diluted earnings per share
Note
6, 7
10
8
9
11
16,17, 31
10
Consolidated
$’000
2021
269,084
22,708
(669)
1,023
292,146
(173,500)
(11,649)
(2,905)
(10,539)
(7,024)
(6,561)
(3,447)
(3,115)
(10,291)
(229,031)
2020
271,465
24,967
2,541
353
299,326
(175,148)
(11,177)
(3,075)
(10,003)
(7,012)
(5,924)
(3,351)
(5,850)
(10,786)
(232,326)
63,115
67,000
12
(18,997)
(20,305)
44,118
46,695
44,118
44,118
Cents
13.8
13.8
46,695
46,695
Cents
14.6
14.6
28
28
The notes on pages 23 to 60 are an integral part of these Consolidated Financial Statements.
18
Bell Financial GroupAnnual Report 2021 STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2021
Profit for the year
Other comprehensive income/(loss)
Items that may be classified to profit or loss
Change in fair value of cash flow hedge, net of tax
Foreign operations – foreign currency translation differences, net of tax
Other comprehensive income/(loss) for the year, net of tax
Consolidated
$’000
Note
2021
44,118
2020
46,695
251
284
535
142
(356)
(214)
Total comprehensive income for the year
44,653
46,481
Attributable to:
Equity holders of the Company
Non-controlling interests
Total comprehensive income for the year
Other movements in equity arising from transactions with owners are set out in note 26.
The notes on pages 23 to 60 are an integral part of these Consolidated Financial Statements.
44,653
-
46,481
-
44,653
46,481
19
Bell Financial GroupAnnual Report 2021 STATEMENT OF FINANCIAL POSITION
As at 31 December 2021
Assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Financial assets at fair value
Derivative assets
Loans and advances
Right of use assets
Deferred tax assets
Property, plant and equipment
Goodwill
Intangible assets
Total assets
Liabilities
Trade and other payables
Deposits and borrowings
Current tax liabilities
Lease liabilities
Derivative liabilities
Employee benefits
Provisions
Total liabilities
Net assets
Equity
Contributed equity
Other equity
Reserves
Retained earnings
Total equity attributable to equity holders of the Company
Consolidated
$’000
Note
2021
2020
13
14
15
30
19
31
18
16
17
17
20
21
22
31
30
24
23
26
26
26
26
352,742
242,074
1,201
13,346
179
534,006
12,179
4,542
2,005
130,413
14,796
1,307,483
417,787
573,100
1,849
16,275
9
58,917
500
1,068,437
284,043
129,998
1,028
15,645
105
469,076
16,122
4,140
1,957
130,413
13,761
1,066,288
267,785
477,476
4,056
22,357
238
62,935
500
835,347
239,406
230,941
204,237
(28,858)
(555)
64,222
239,046
204,237
(28,858)
177
55,385
230,941
The notes on pages 23 to 60 are an integral part of these Consolidated Financial Statements.
20
Bell Financial GroupAnnual Report 2021 STATEMENT OF CHANGES IN EQUITY
Share
Capital
$‘000
204,237
Other
Equity
$‘000
(28,858)
Treasury
Shares
Reserve
$‘000
291
Share
Based
Payments
Reserve
$‘000
9
Cash
Flow
Hedge
Reserve
$‘000
(380)
Foreign
Currency
Reserve
$‘000
771
Retained
Earnings
$‘000
35,234
Total
Equity
$‘000
211,304
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
204,237
204,237
-
-
-
-
-
-
(28,858)
(28,858)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(7)
-
426
(710)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
204,237
-
-
-
-
-
-
(28,858)
-
(1,695)
-
428
-
-
(1,267)
-
-
-
-
-
-
-
-
-
(9)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
142
-
142
142
-
-
-
-
-
-
(238)
(238)
-
251
-
251
251
-
-
-
-
-
-
13
-
46,695
46,695
-
(356)
(356)
(356)
-
-
-
46,695
142
(356)
(214)
46,481
-
-
-
-
-
-
415
415
-
-
(7)
-
-
-
426
-
-
719
(27,263)
(27,263)
55,385 230,941
55,385 230,941
-
44,118
44,118
-
284
284
284
-
-
-
-
-
-
699
-
-
-
44,118
251
284
535
44,653
-
-
(1,695)
-
-
-
428
-
-
-
(35,281)
(35,281)
64,222 239,046
Balance at 1 January 2020
Total comprehensive income
Profit/(loss) for the year
Other comprehensive income
Change in fair value of cash flow hedges
Translation of foreign currency reserve
Total other comprehensive income
Total comprehensive income for the year
Transactions with owners, recorded
directly in equity
Transfer of retained earnings
Purchase of treasury shares
Share based payments
Employee share awards exercised
Issuance of share based payment
Dividends
Balance at 31 December 2020
Balance at 1 January 2021
Total comprehensive income
Profit/(loss) for the year
Other comprehensive income
Change in fair value of cash flow hedges
Translation of foreign currency reserve
Total other comprehensive income
Total comprehensive income for the year
Transactions with owners, recorded
directly in equity
Transfer of retained earnings
Purchase of treasury shares
Share based payments
Employee share awards exercised
Issuance of share based payment
Dividends
Balance at 31 December 2021
The notes on pages 23 to 60 are an integral part of these Consolidated Financial Statements.
21
Bell Financial GroupAnnual Report 2021 STATEMENT OF CASH FLOWS
For the year ended 31 December 2021
Cash flows from/(used in) operating activities
Cash receipts from customers and clients
Cash paid to suppliers and employees
Net cash from client related receivables and payables
Cash generated from operations1
Dividends received
Interest received
Interest paid
Income taxes paid
Net cash from operating activities
Cash flows from/(used in) investing activities
Proceeds from sale of investments
Acquisition of property, plant and equipment
Acquisition of other investments
Net cash used in investing activities
Cash flows from/(used in) financing activities
Dividends paid
On market share purchases
Payment of lease liabilities
Bell Potter Capital (Margin Lending)
Deposits from client cash balances
(Issuance)/Drawdown of margin loans
(Repayment)/Drawdown of borrowings
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
Consolidated
$’000
Note
2021
2020
282,100
(236,177)
40,858
86,781
2
22,778
(3,115)
(21,606)
84,840
9,620
(986)
(9,532)
(898)
(35,281)
(1,695)
(10,425)
43,624
(63,466)
52,000
(15,243)
68,699
284,043
352,742
287,527
(195,018)
41,578
134,087
22
25,064
(5,850)
(18,122)
135,201
6,444
(1,589)
(6,634)
(1,779)
(27,263)
(7)
(9,902)
55,046
74,610
(137,000)
(44,516)
88,906
195,137
284,043
25
13, 25
1. ‘Cash generated from operations’ includes Group cash reserves and client balances. Refer to note 13 for further information on cash and cash equivalents.
The notes on pages 23 to 60 are an integral part of these Consolidated Financial Statements.
22
Bell Financial GroupAnnual Report 2021 NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2021
Bell Financial Group Ltd (“Bell
Financial” or the “Company”) is
domiciled in Australia. The address of
the Company’s registered office is Level
29, 101 Collins Street, Melbourne, VIC.
The Consolidated Financial Statements
of the Company comprise the Company,
and its controlled entities (the “Group”
or “Consolidated Entity”). The Group is a
for-profit entity. Bell Financial Group Ltd
is an Australian-based provider of full
service and online broking, investment
and financial advisory services.
1. Significant accounting
policies
Set out below is a summary of
significant accounting policies adopted
by the Company and its subsidiaries
in the preparation of the Consolidated
Financial Statements.
a) Basis of preparation
Statement of compliance
The financial report is a general
purpose financial report prepared in
accordance with Australian Accounting
Standards (AASBs)(including Australian
Accounting Interpretations) adopted by
the Australian Accounting Standards
Board (AASB) and the Corporations Act
2001. The consolidated financial report
of the Group and the financial report of
the Company comply with International
Financial Reporting Standards (IFRS)
and interpretations adopted by the
International Accounting Standards
Board (IASB).
The Financial Statements were approved
by the Board of Directors on 16 February
2022.
The accounting policies set out below,
except as noted, have been applied
consistently to all periods presented
in these Consolidated Financial
Statements, and have been consistently
applied by all entities within the
consolidated entity.
Basis of measurement
These Consolidated Financial
Statements have been prepared under
the historical cost convention, except for
financial assets and liabilities (including
derivative instruments and loans) at fair
value through the profit or loss.
over the entity. The financial statements
of subsidiaries are included in the
Consolidated Financial Statements
from the date that control commenced
until the date that control ceases. All
controlled entities have a 31 December
balance date.
Functional and presentation
currency
These Consolidated Financial
Statements are presented in Australian
dollars, which is the Company’s
functional currency and the functional
currency of the majority of the Group.
The Company is of a kind referred to in
ASIC Corporations (Rounding in Financial/
Directors’ Reports) Instrument 2016/191
and in accordance with that Instrument,
all financial information presented in
Australian dollars has been rounded
to the nearest thousand dollars unless
otherwise stated.
Removal of parent entity financial
statements
The Group has applied amendments to
Section 295(2)(b) of the Corporations Act
2001 that remove the requirement for
the Group to lodge parent entity financial
statements. Parent entity financial
statements have been replaced by the
specific parent entity disclosures in
note 32.
b) Principles of consolidation
Business combinations
The Group applies AASB 3 Business
Combinations (2008) and amended
AASB 127 Consolidated and Separate
Financial Statements (2008) for business
combinations.
Subsidiaries
Subsidiaries are all entities controlled by
the Group. The Group controls an entity
when it 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
Intra-group balances, and any
unrealised income and expenses arising
from intra-group transactions, are
eliminated in preparing the Consolidated
Financial Statements.
c) Revenue recognition
AASB 15 Revenue from Contracts
with Customers
AASB 15 requires identification of
discrete performance obligations
within a transaction and an associated
transaction price allocation to these
obligations. Revenue is recognised
upon satisfaction of these performance
obligations, which occur when control of
the goods or services are transferred to
the customer.
Under AASB 15, revenue is recognised
when a customer obtains control
of the goods or services have been
rendered. Determining the timing of
the transfer of control – at a point in
time or over time – requires judgement.
AASB 15 specifically excludes financial
instruments recognised under AASB 9
Financial Instruments. Revenue streams
for Bell Financial are limited to fee-
based revenue items such as brokerage,
fee income, commissions and portfolio
administration fees.
Revenue under AASB 15 is recognised
when the Group satisfies the
performance obligations relating to
its service to a customer. The Group
measures revenue based on the
consideration specified in a contract
with a customer. The following specific
criteria must also be met before revenue
can be recognised.
23
Bell Financial GroupAnnual Report 2021
NOTES TO THE FINANCIAL STATEMENTS continued
For the year ended 31 December 2021
AASB 16 Leases applies a single, on-
balance sheet accounting model for
lessees. A lessee recognises a right of-
use asset representing its right to use
the underlying asset and a lease liability
representing its obligation to make
lease payments. There are optional
exemptions for short-term leases
and leases of low value items.
As a Lessee
The Group recognises a right-of-use
asset and a lease liability at the lease
commencement date. The right-of-
use asset is initially measured at
cost, and subsequently at cost less
any accumulated depreciation and
impairment losses.
The lease liability is initially measured at
the present value of the lease payments
that are not paid at initial application
date, discounted using the incremental
borrowing rate determined by the
Group. The lease liability is subsequently
increased by the interest cost on the
lease liability and decreased by the
lease payment made.
When measuring lease liabilities
for leases that were classified as
operating leases, the Group discounted
lease payments using its incremental
borrowing rate at inception of lease.
The Group determines its incremental
borrowing rate by obtaining interest
rates from various external financing
sources. The weighted average rate
applied is 4.1%.
Short-term leases and leases
of low-value assets
The Group has elected not to recognise
right-of-use assets and lease liabilities
for leases of low-value assets and short-
term leases. The Group recognises the
lease payments associated with these
leases as an expense on a straight-line
basis over the lease term.
e) Statement of Cash Flows
The Statement of Cash Flows is
prepared on the basis of net cash
flows in relation to settlement of trades.
This is consistent with the Group’s
revenue recognition policy whereby
the entity acts as an agent and receives
and pays funds on behalf of its clients,
however only recognises as revenue,
the Group’s entitlement to brokerage
commission. For the purpose of the
Statement of Cash Flows, cash and cash
equivalents comprise cash at bank and
on hand, investments in money market
instruments maturing within less than
14 days (net of bank overdrafts) and
short-term deposits with an original
maturity of 3 months or less. It is
important to note that the Statement
of Financial Position discloses trade
debtors and payables that represent net
client accounts being the accumulation
of gross trading.
f) Income tax
Income tax expense or benefit for the
period comprises current and deferred
tax. Income tax is recognised in the
Statement of Profit or Loss except to the
extent that it relates to items recognised
directly in equity, in which case it is
recognised in equity.
Current tax is the expected tax payable
on the taxable income for the year,
using tax rates enacted or substantially
enacted at the balance sheet date,
and any adjustments to tax payable
in respect of previous years.
Deferred tax is recognised using the
balance sheet method, providing
for temporary differences between
the carrying amounts of assets and
liabilities for financial reporting
purposes and the amounts used for
taxation purposes. Deferred tax is not
recognised for the following temporary
differences: the initial recognition
of goodwill, the initial recognition of
assets or liabilities in a transaction
that is not a business combination and
that affects neither accounting nor
taxable profit, and differences relating
to investments in subsidiaries to the
extent that they probably will not reverse
in the foreseeable future. Deferred tax
is measured at the tax rates that are
expected to be applied to the temporary
differences when they reverse, based
on the laws that have been enacted
or substantively enacted by the
reporting date.
1. Significant accounting
policies continued
c) Revenue recognition continued
Rendering of services
Revenue arising from brokerage,
fee income and corporate finance
transactions are recognised by the
Group when performance obligations
under the contract with a customer
are satisfied.
Brokerage is recognised at a point
in time when a trade is executed and
payment is received upon settlement,
which is normally 2 days after the trade.
Portfolio administration fees are
recognised over time as the service
is provided and are collected on a
quarterly basis.
Corporate fees are recognised at a
point in time when the Group satisfies
its performance obligation, which is
usually upon the successful completion
of the transaction. Payment is normally
received within 7 days of the completion
of the transaction.
Other revenue streams
Other revenue is recognised to
the extent that it is probable that
performance obligations are satisfied
and the revenue can be reliably
measured.
Interest income
Interest income is recognised as it
accrues using the effective interest rate
method, in accordance with AASB 9.
Dividend income
Dividend income is recognised when
the right to receive the payment is
established, in accordance with AASB 9.
d) Leases
AASB 16 Leases
At inception of a contract, the Group
assesses whether a contract is, or
contains, a lease. A contract is, or
contains, a lease if the contract conveys
the right to control the use of an
identified asset for a period of time
in exchange for consideration.
24
Bell Financial GroupAnnual Report 2021
Deferred tax assets and liabilities are
offset if there is a legally enforceable
right to offset current tax liabilities and
assets, and they relate to income taxes
levied by the same tax authority on the
same taxable entity, or on different tax
entities, but they intend to settle current
tax liabilities and assets on a net basis
or their tax assets and liabilities will be
realised simultaneously.
Deferred tax assets are recognised for
unused tax losses, unused tax credits
and deductible temporary differences to
the extent that it is probable that future
taxable profits will be available against
which they can be used. Future taxable
profits are based on the reversal of
relevant taxable temporary differences.
If the amount of taxable temporary
differences is insufficient to recognise
a deferred tax asset in full, then future
taxable profits, adjusted for reversals
of existing temporary differences, are
considered, based on the business plans
for individual subsidiaries in the Group.
Deferred tax assets are reviewed at each
reporting date and are reduced to the
extent that it is no longer probable that
the related tax benefit will be realised;
such reductions are reversed when
the probability of future taxable profits
improves.
Tax consolidation
Effective 1st January 2003, the Company
elected to apply the tax consolidation
legislation. All current tax amounts
relating to the Group have been
assumed by the head entity of the
tax-consolidated group, Bell Financial
Group.
Deferred tax amounts in relation to
temporary differences are allocated as
if each entity continued to be a taxable
entity in its own right.
g) Goods and services tax
Revenues, expenses and assets are
recognised net of the amount of goods
and services tax (GST), except where
the amount of GST incurred is not
recoverable from the Australian Tax
Office (ATO). In these circumstances the
GST is recognised as part of the cost of
acquisition of the asset or as part of an
item of the expense.
Receivables and payables are stated
with the amount of GST excluded.
The net amount of GST recoverable
from, or payable to, the ATO is included
as a current asset or liability in the
Statement of Financial Position.
Cash flows are included in the
Statement of Cash Flows on a gross
basis. The GST components of cash
flows arising from investing and
financing activities that are recoverable
from, or payable to, the ATO are
classified as operating cash flows.
h) Cash and cash equivalents
Cash and cash equivalents comprise
cash balances, investments in money
market instruments maturing within
less than 14 days and short-term
deposits with original maturity of less
than three months. Bank overdrafts
that are repayable on demand are
included as a component of cash and
cash equivalents for the purpose of the
Statement of Cash Flows. Cash held
in trust for clients (refer to note 13) is
included as cash and cash equivalents
and is included within trade and other
payables.
i) Derivatives
Derivative financial instruments are
contracts whose value is derived from
one or more underlying price indices
or other variables. They include swaps,
forward rate agreements, options or a
combination of all three.
Certain derivative instruments are held
for trading for the purpose of making
short-term gains such as FX swaps.
These derivatives do not qualify for
hedge accounting. The right to receive
options arising from the provision of
services to corporate fee clients are
valued using the Black Scholes model.
On disposal of options, any realised
gains/losses are taken to the Statement
of Profit or Loss. Derivatives are
recognised at fair value and attributable
transaction costs are recognised in
profit or loss when incurred.
Derivative financial instruments are also
used for hedging purposes to mitigate
the Group’s exposure to interest rate
risk. The Group applied the hedge
accounting model in AASB 9 Financial
Instruments. Refer to Note 1q(iii) for
further information. Derivative financial
instruments are recognised initially at
fair value.
Where the derivative is designated
effective as a hedging instrument, the
timing of the recognition of any resultant
gain or loss is dependent on the hedging
designation. The Group designated
interest rate swaps as cash flow hedges
during the period. Details of the hedging
instruments are outlined below:
Cash flow hedges
Changes in the fair value of cash
flow hedges are recognised directly
in equity to the extent that the hedges
are effective. To the extent hedges are
ineffective, changes in the fair value are
recognised in the profit or loss. Hedge
effectiveness is tested at each reporting
date and is assessed against the hedge
effectiveness criteria in AASB 9.
If the hedging instrument no longer
meets the criteria for hedge accounting,
expires or is sold, terminated or
exercised, the hedge accounting
is discontinued prospectively. The
cumulative gain or loss previously
recognised in equity remains there
until the forecast transaction occurs.
j) Impairment of assets
At each reporting date, the Group
reviews the carrying values of its
tangible and intangible assets to
determine whether there is any
indication that those assets have been
impaired. If such an indication exists,
the recoverable amount of the asset,
being the higher of the asset’s fair value
less costs to sell and value in use, is
compared to the asset’s carrying value.
Any excess of the asset’s carrying value
over its recoverable amount is expensed
to the Statement of Profit or Loss.
Where it is not possible to estimate
the recoverable amount of an
individual asset, the Group estimates
the recoverable amount of the cash-
generating unit to which the asset
belongs.
An impairment loss, with the exception
of goodwill, is reversed if the reversal
can be related objectively to an event
occurring after the impairment loss
was recognised. For financial assets
measured at amortised cost and
available-for-sale financial assets
that are debt securities the reversal
is recognised in profit or loss.
25
Bell Financial GroupAnnual Report 2021
NOTES TO THE FINANCIAL STATEMENTS continued
For the year ended 31 December 2021
1. Significant accounting
policies continued
k) Trade and other receivables
Trade receivables issued are initially
recognised when they are originated.
A trade receivable is initially measured
at the transaction price. Trade debtors
to be settled within 2 trading days
are carried at amortised cost. Term
debtors are also carried at amortised
cost. Recoverability of Trade and other
receivables is assessed using the
lifetime expected credit loss approach.
l) Trade and other payables
Liabilities for trade creditors and other
amounts are carried at cost, which is
the fair value of the consideration to be
paid in the future for goods and services
received, whether or not billed to the
parent entity or Group. Trade accounts
payable are normally settled within
60 days.
m) Borrowing costs
Borrowing costs are recognised using
the effective interest method. The
‘effective interest rate’ is the rate that
exactly discounts estimated future
cash payments or receipts through the
expected life of the financial instrument
to: the gross carrying amount of the
financial asset; or the amortised cost
of the financial liability.
n) Provisions
A provision is recognised if, as a result
of a past event, the Group has a present
legal or constructive obligation that
can be estimated reliably, and it is
probable that an outflow of economic
benefits will be required to settle the
obligation. Provisions are determined
by discounting the expected future cash
flows at a pre-tax rate that reflects
current market assessments of the time
value of money and the risks specific
to the liability.
o) Deposits and borrowings
All deposits and borrowings are
recognised at the fair value net of issue
costs associated with the borrowings at
origination and subsequently measured
using effective interest method.
26
p) Goodwill and intangible assets
Goodwill
Goodwill on acquisition is initially
measured at cost being the excess of
the costs of the business combination
over the acquirer’s interest in the net
fair value of the identifiable assets,
liabilities and contingent liabilities.
Following initial recognition, goodwill
is measured at cost less accumulated
impairment losses. Goodwill is reviewed
for impairment, annually or more
frequently if events or changes in
circumstances indicate that the carrying
amount is impaired. An impairment loss
in respect to goodwill is not reversed.
The CGUs currently in place consist
of Retail, Institutional, Technology &
Platforms and Product & Services.
The Group provides traditional
stockbroking, investment and
financial advisory services to private,
institutional and corporate clients.
It also develops proprietary technology,
platforms, products and services for
the Australian stockbroking market.
Historically the business has been
viewed and managed as two operating
divisions, Wholesale and Retail. With the
significant investment over a number
of years in technology, platforms,
products and services, revenues and
profits emanating from these areas
is now significant, and the subject of
Management focus in terms of future
business decisions.
Other intangible assets
Software
Expenditure on research activities
is recognised in profit or loss as
incurred. Development expenditure is
capitalised only if the expenditure can
be measured reliably, the product or
process is technically and commercially
feasible, the asset is controlled by the
Group, future economic benefits are
probable and the Group intends to and
has sufficient resources to complete
development and to use or sell the
asset. Otherwise, it is recognised in
profit or loss as incurred. Subsequent
to initial recognition, development
expenditure is measured at cost less
accumulated amortisation and any
accumulated impairment losses.
Customer lists
Customer lists that are acquired by
the Group, which have finite lives, are
measured at cost less accumulated
amortisation and accumulated
impairment losses.
Amortisation is recognised in the profit
or loss on a straight-line basis over
the estimated useful lives of intangible
assets. The estimated useful lives are
as follows:
Software
Customer list
2021
10 years
10 years
2020
10 years
10 years
q) Financial instruments
All investments are initially recognised
at fair value plus directly attributable
transaction costs. Subsequent to
initial recognition, investments, which
are classified as financial assets and
liabilities, are measured as described
below.
Fair value measurement
AASB 13 Fair Value Measurement
establishes a single framework
for measuring fair value and
making disclosures about fair
value measurements when such
measurements are required or
permitted by other AASBs. It unifies the
definition of fair value as the price that
would be received to sell an asset or
paid to transfer a liability in an orderly
transaction between market participants
at the measurement date.
AASB 9 Financial Instruments
AASB 9 sets out requirements for
recognising and measuring financial
assets and financial liabilities.
i. Classification and measurement
of financial assets and financial
liabilities
On initial recognition, a financial
asset is classified as measured at:
amortised cost; fair value through other
comprehensive income (FVTOCI) – debt
investment; FVTOCI – equity investment;
or fair value through profit or loss
(FVTPL). The classification of financial
assets under AASB 9 is generally
based on the business model in which
a financial asset is managed and its
contractual cash flow characteristics.
Bell Financial GroupAnnual Report 2021
A financial asset is measured at
amortised cost if it meets both of
the following conditions and is not
designated as at FVTPL:
• It is held within a business model
whose objective is to hold assets to
collect contractual cash flows; and
• Its contractual terms give rise on
specified dates to cash flows that
are solely payments of principal and
interest on the principal amount
outstanding.
All financial assets not classified
as measured at amortised cost or
FVTOCI are measured at FVTPL. On
initial recognition, the Group may
irrevocably designate a financial asset
that otherwise meets the requirements
to be measured at amortised cost
or at FVTOCI as at FVTPL if doing so
eliminates or significantly reduces
an accounting mismatch that would
otherwise arise.
The following accounting policies apply
to the subsequent measurement of
financial assets held by the Group.
Financial assets at amortised cost
These assets are subsequently
measured at amortised cost using the
effective interest method. The amortised
cost is reduced by impairment losses
(see (ii) below). Interest income,
foreign exchange gains and losses and
impairment are recognised in profit or
loss. Any gain or loss on derecognition
is recognised in profit or loss.
Financial assets at FVTPL
These assets are subsequently
measured at fair value. Net gains and
losses, including any interest or dividend
income, are recognised in profit or loss.
Business model assessment
The Group will determine the business
model at the level that reflects how
groups of financial assets are managed
using all relevant evidence that is
available at the date of the assessment,
including:
• The stated policies and objectives
for the portfolio and the operation
of those policies in practice;
• How the performance of the portfolio
is evaluated and reported to the
Group’s management;
• The risks that affect the performance
of the business model (and the
financial assets held within that
business model) and how those risks
are managed; and
asset is recognised at fair value. The
difference between the carrying amount
of the financial asset derecognised and
the fair value of the new financial asset
is recognised in profit or loss.
• How managers of the business are
compensated.
Assessment whether contractual
cash flows are solely payments of
principal and interest (SPPI)
For the purposes of this assessment,
‘principal’ is defined as the fair value of
the financial asset on initial recognition.
‘Interest’ is defined as consideration
for the time value of money and for the
credit risk associated with the principal
amount outstanding during a particular
period of time and for other basic
lending risks and costs (e.g. liquidity
risk and administrative costs), as well
as profit margin.
In assessing whether the contractual
cash flows are SPPI, the Group
considers the contractual terms of the
instrument. This includes assessing
whether the financial asset contains a
contractual term that could change the
timing or amount of contractual cash
flows such that it would not meet this
condition.
Measurement categories of
financial assets
Cash and cash equivalents, Trade
and other receivables, and Loans and
advances that meets SPPI are classified
and measured at amortised cost.
Certain Loans and advances and other
financial assets that do not meet SPPI
are classified and measured at FVTPL.
There were no changes in classification
and measurements of the Group’s
financial assets for the years ended
31 December 2020 and 2021.
Modifications of financial assets
and financial liabilities
Financial assets
If the terms of a financial asset are
modified, the Group evaluates whether
the cash flows of the modified asset
are substantially different. If the cash
flows are substantially different, the
contractual rights to cash flows from the
original financial asset are deemed to
have expired. The original financial asset
is derecognised and a new financial
If the cash flows of the modified asset
are not substantially different, the Group
recalculates the gross carrying amount
of the financial asset and recognises
the derecognition as a modification
gain or loss in profit or loss. If such a
modification is carried out because of
financial difficulties of the borrower, the
gain or loss is presented together with
impairment losses.
Financial liabilities
The Group derecognises a financial
liability when its terms are modified
and the cash flows of the modified
liability are substantially different. A new
financial liability based on the modified
terms is recognised at fair value. The
difference between the carrying amount
of the financial liability extinguished and
the new financial liability with modified
terms is recognised in profit or loss.
ii. Impairment of financial assets
Under AASB 9, loss allowances are
measured on either of the following
bases:
• 12-month ECLs: these are ECLs
that result from possible default
events within the 12 months after
the reporting date; and
• Lifetime ECLs: these are ECLs that
result from all possible default events
over the expected life of a financial
instrument.
For all financial assets at amortised
cost, the Group measures loss
allowances at an amount equal to
lifetime ECLs, except for loans and
advances, which are measured at
12-month ECLs where credit risk has
not increased significantly since initial
recognition and lifetime ECLs where
credit risk has increased significantly
since initial recognition.
27
Bell Financial GroupAnnual Report 2021 NOTES TO THE FINANCIAL STATEMENTS continued
For the year ended 31 December 2021
Presentation of impairment
Loss allowances for financial assets
measured at amortised cost are
deducted from the gross carrying
amount of the assets.
Impairment losses are presented
separately in the Consolidated
Statement of Profit or Loss and OCI.
There were no impairment losses for
the year ended 31 December 2021
(2020: Nil).
Trade and other receivables
ECLs are calculated based on actual
historical credit loss experience.
Exposures are segmented based on
past events, current conditions and
reasonable and supportable information
about future events and economic
conditions. There were no significant
changes during the period to the Group’s
exposure to credit risk and there was no
significant impact to credit provisioning
over trade and other receivables as at
31 December 2021.
Loans and advances
ECLs are calculated based on actual
historical credit loss experience.
Exposures are segmented based on
past events, current conditions and
reasonable and supportable information
about future events and economic
conditions. There were no significant
changes during the period to the
Group’s exposure to credit risk and
there was no significant impact to credit
provisioning over loans and advances
as at 31 December 2021.
iii. Hedge accounting
The Group ensures that hedge
accounting relationships are aligned
with its risk management objectives and
strategy and to apply a more qualitative
and forward-looking approach to
assessing hedge effectiveness, in
accordance with the requirements
of AASB 9.
The Group only uses interest rate swaps
to hedge exposure to fluctuations in
interest rates.
Share capital
Ordinary shares
Ordinary shares are classified as equity.
Incremental costs directly attributable
to issue of ordinary shares and share
options are recognised as a deduction
from equity, net of any tax effects.
Dividends
Dividends are recognised as a liability
in the period in which they are declared,
being appropriately authorised and no
longer at the discretion of the Company.
Treasury shares
When share capital recognised as
equity is repurchased, the amount of
the consideration paid is recognised as
a deduction from equity. Repurchased
shares are classified as treasury shares
and are presented in the reserve until
sold or reissued.
r) Property, plant and equipment
Property, plant and equipment is
included at cost less accumulated
depreciation and any impairment in
value. All property, plant and equipment
is depreciated over its estimated useful
life, commencing from the time assets
are held ready for use.
Items of property, plant and equipment
are depreciated/amortised using
the straight-line method over their
estimated useful lives. The depreciation
rates for each class of asset are as
follows:
Leasehold
improvements
Office
equipment
Furniture and
fittings
2021
2020
20–25%
20–25%
20–50%
20–50%
20–50%
20–50%
s) Employee entitlements
Wages, salaries and annual leave
The provisions for entitlements to
wages, salaries and annual leave
expected to be settled within 12
months of reporting date represent
the amounts which the Group has a
present obligation to pay resulting from
employees’ services provided up to
reporting date.
1. Significant accounting
policies continued
q) Financial instruments continued
ii. Impairment of financial assets
continued
When determining whether credit
risk of a financial asset has increased
significantly since initial recognition
and when estimating ECLs, the Group
considers reasonable and supportable
information that is relevant and available
without undue cost or effort. This
includes quantitative and qualitative
information and analysis based on
the Group’s historical experience and
forward-looking information.
The Group assumes that the credit
risk on a financial asset has increased
significantly if it is more than 30 days
past due or the expected probability
of default has increased significantly.
The Group considers a financial asset
to be in default when:
• The borrower is unlikely to pay its
credit obligations to the Group in
full, without recourse by the Group
to actions such as realising security
(if any is held); or
• The financial asset is more than
90 days past due.
The maximum period considered when
estimating ECLs is the maximum
contractual period over which the
Group is exposed to credit risk.
Measurement of ECLs
ECLs 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 entity
in accordance with the contract and
the cash flows that the Group expects
to receive). ECLs are discounted at
the effective interest rate of the
financial asset.
Credit-impaired financial assets
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.
28
Bell Financial GroupAnnual Report 2021
Long-service leave
The provision for salaried employee
entitlements to long-service leave
represents the present value of the
estimated future cash outflows to be
made resulting from employees’ service
provided up to reporting date. Liabilities
for employee entitlements, which are
not expected to be settled within twelve
months, are discounted using the
rates attaching to national government
securities at balance date, which most
closely match the terms of maturity of
the related liabilities.
In determining the liability for employee
entitlements, consideration has been
given to future increases in wage and
salary rates, and experience with staff
departures. Related on-costs have also
been included in the liability.
Bonuses
The Group recognises a liability
and an expense for bonuses. The
Group recognises a provision where
contractually obliged or where there
is a past performance that has created
a constructive obligation.
Defined contribution plans
A defined contribution plan is a post-
employment benefit plan under which
the Company pays fixed contributions
into a separate entity and will have
no legal or constructive obligation to
pay further amounts. Obligations for
contributions to defined contribution
plans are recognised as an employee
expense in profit or loss when they
are due.
Share-based payments
The Company has adopted a number
of share-based equity incentive plans
in which employees and Directors
participate. The grant date fair value of
shares expected to be issued under the
various equity incentive plans, including
options, granted to employees and
Directors is recognised as an employee
expense, with a corresponding increase
in equity over the period in which the
employees become unconditionally
entitled to the shares.
The fair value of options at grant date
is independently determined using the
Black Scholes option pricing model
that takes into account the exercise
price, the vesting period, the vesting
and performance criteria, the impact
of dilution, the share price at grant
date and the expected price volatility of
the underlying share and the risk free
interest rate for the vesting period.
t) Earnings per share
The Group presents basic and diluted
Earnings Per Share (EPS) data for its
ordinary shares.
Basic earnings per share
Basic EPS is calculated by dividing the
profit or loss attributable to ordinary
shareholders of the Company by the
weighted average number of ordinary
shares outstanding during the period.
Diluted earnings per share
Diluted EPS is determined by adjusting
the profit or loss attributable to ordinary
shareholders and the weighted average
number of ordinary shares outstanding
for the effects of all dilutive potential
ordinary shares and share options
granted to employees and Directors.
u) Foreign currency
Foreign currency transactions
Transactions in foreign currencies are
translated to the functional currency
of the Group at exchange rates at the
date of the transaction. Monetary assets
and liabilities denominated in foreign
currencies at the reporting date are
retranslated to the functional currency
at the foreign exchange rate at that date.
Non-monetary assets and liabilities
denominated in foreign currencies
that are measured at fair value are
retranslated to the functional currency
at the exchange rate at the date that
the fair value was determined.
Foreign currency differences arising on
retranslation are recognised in profit or
loss, except for differences arising on
FVOCI instruments that are recognised
directly in OCI.
Foreign operations
The assets and liabilities of foreign
operations, including goodwill and fair
value adjustments arising on acquisition,
are translated into Australian dollars
at the exchange rates at the reporting
date. The income and expenses of
foreign operations are translated into
Australian dollars at the exchange rates
at the dates of the transactions. Foreign
currency differences are recognised in
OCI and accumulated in the translation
reserve, except to the extent that the
translation difference is allocated
to NCI.
v) Segment reporting
The Group determines and presents
operating segments based on the
information that is internally provided to
the Chief Decision Makers in accordance
with AASB 8 Operating Segments.
An operating segment is a component
of the Group that engages in business
activities from which it may earn
revenues and incur expenses, including
revenues and expenses that relate to
transactions with any of the Group’s
other components. An operating
segment’s results are reviewed regularly
by management to make decisions
about resources to be allocated to the
segment and assess its performance.
Segment results that are reported to
management include items directly
attributable to a segment as well as
to those that can be allocated on a
reasonable basis.
w) New standards and
interpretations not yet adopted
A number of new standards,
amendments to standards and
interpretations are effective for annual
periods beginning after 1 January
2021, and have not been applied in
preparing these Consolidated Financial
Statements. Those which may be
relevant to the Group are set out below.
The Group does not plan to adopt these
standards early.
29
Bell Financial GroupAnnual Report 2021 NOTES TO THE FINANCIAL STATEMENTS continued
For the year ended 31 December 2021
1. Significant accounting
policies continued
w) New standards and
interpretations not yet adopted
continued
The following new and amended
standards and interpretations are not
expected to have a significant impact
on the Group’s consolidated financial
statements.
• COVID-19-Related Rent Concessions
beyond 30 June 2021 (Amendment
to IFRS 16).
• Annual Improvements to IFRS
Standards 2018–2020.
• Property, Plant and Equipment:
Proceeds before Intended Use
(Amendments to IAS 16).
• Reference to Conceptual Framework
(Amendments to IFRS 3).
• Classification of Liabilities as Current
or Non-current (Amendments to
IAS 1).
• IFRS 17 Insurance Contracts and
amendments to IFRS 17 Insurance
Contracts.
• Disclosure of Accounting Policies
(Amendments to IAS 1 and IFRS
Practice Statement 2).
• Definition of Accounting Estimates
(Amendments to IAS 8).
Furthermore, during the year ended
31 December 2021, the International
Financial Reporting Standards
Interpretations Committee (IFRIC)
issued a final agenda decision,
Configuration or Customisation Costs
in a Cloud Computing Arrangement.
The decision discusses whether
configuration or customisation
expenditure relating to cloud computing
arrangements is able to be recognised
as an intangible asset and if not, over
what time period the expenditure is
expensed.
Software as a Service (“SaaS”) are
service contracts providing an entity
with the right to access the cloud
provider’s application software over
the contract period. Costs incurred to
configure or customise, and the ongoing
fees to obtain access to the cloud
provider’s application software, are
recognised as operating expenses when
the services are received. The Group
30
reviewed the IFRIC decision and did not
identify any costs incurred to configure
and customise software under SaaS
contracts in the current year or in
prior years.
2. Significant accounting
judgements, estimates
and assumptions
In applying the Group’s accounting
policies management continually
evaluates judgements, estimates and
assumptions based on experience and
other factors, including expectations of
future events that may have an impact
on the Group. All judgements, estimates
and assumptions made are believed
to be reasonable based on the most
current set of circumstances available
to management and are reviewed on an
ongoing basis. Actual results may differ
from the judgements, estimates and
assumptions. Significant judgements,
estimates and assumptions made by
management in the preparation of these
financial statements are outlined below:
Recovery of deferred tax assets
Deferred tax assets are recognised
for deductible temporary differences
as management considers that it is
probable that future taxable profits will
be available to utilise those temporary
differences. (Refer to note 18).
Impairment of loans and advances
The Company assesses impairment
of all loans at each reporting date by
evaluating the expected credit loss on
those loans. In the Directors’ opinion,
no such impairment exists beyond that
provided at 31 December 2021 (2020:
Nil). (Refer to note 19 and note 1q(ii)).
Long service leave provisions
The liability for long service leave is
recognised and measured as the present
value of the estimated future cash flows
to be made in respect of all employees
at balance date. In determining the
present value of a liability, attrition rates
and pay increases through promotion
and inflation have been taken into
account. A discount rate equal to the
government bond rate has been used
in determining the present value of the
obligation. (Refer to note 24).
Legal provision
From time to time claims are made
against the Group. The recognition of
any provision requires judgement to
determine management’s best estimate
of the provision. As at 31 December
2021, a $500,000 provision has been
accrued to reflect potential claims.
(Refer to note 23).
Financial assets
The fair value of options is determined
using the Black Scholes option-pricing
model.
Determination of fair value for loans
is based on the option value used to
mitigate the risk on the limited recourse
margin loans and the interest rate
implicit in the loan.
Intangible assets
The customer lists acquired have been
valued using the net present value
of the unlevered free cash flow from
each business’ client list and software
development costs incurred are initially
measured at cost and are amortised
over the useful life. These valuations
are outlined below:
Bell Foreign Exchange and
Futures business
The amortisation period for the
acquired intangible assets of the
Foreign Exchange and Futures business
is deemed to be 10 years. This was
determined by analysing the average
length of the relationship clients have
with the business.
Development costs
Amortisation period for the incurred
intangible asset development costs
is deemed to be 10 years. This was
determined by assessing the average
length of the useful life of the assets.
Impairment of goodwill
Goodwill is tested for impairment
annually or more frequently if events or
changes in circumstances indicate that
it might be impaired. For the purpose of
impairment testing, goodwill is allocated
to Retail, Institutional, Technology and
Platforms, and Products and Services
which represents the level at which it
is monitored for internal management
purposes.
Bell Financial GroupAnnual Report 2021 The recoverable amount of the business to which each goodwill component is allocated to a cash-generating unit is estimated
based on its value in use and is determined by discounting the future cash flows generated from continuing use. At 31 December
2021, goodwill has been allocated to the Group’s CGUs (Operating divisions) as follows:
Retail
Institutional
Technology & Platforms
Product & Services
2021
$’m
22.6
31.4
39.2
37.2
130.4
2020
$’m
22.6
31.4
39.2
37.2
130.4
Key assumptions used in discounted cash flow projections
The assumptions used for determining the recoverable amount are based on past experience and expectations for the future.
Projected cash flows for each group of cash-generating units are discounted using an appropriate discount rate and a terminal
value multiple is applied.
The following assumptions have been used in determining the recoverable amount of each cash-generating unit:
Discount rates:
Terminal value multiple:
Retail
Institutional
Technology & Platforms
Product & Services
A post-tax discount rate of 9% (2020: 9%) was used for each cash-generating unit, based on the risk
free rate, adjusted for a risk premium to reflect both the increased risk of investing in equities and
specific risks associated with the business.
A terminal value multiple of 7 times (2020: 7 times) was used for each cash-generating unit. The
multiple was applied to extrapolate the discounted future maintainable after tax cash flows beyond
the five year forecast period.
An increase in brokerage revenue of 5.0% p.a (2020: 5.0% p.a) average growth over the five year
forecast period. Corporate fee income maintained at current levels for the five year forecast period.
An increase in brokerage revenue of 5.0% p.a (2020: 5.0% p.a) average growth over the five year
forecast period. Corporate fee income maintained at current levels for the five year forecast period.
An increase in revenue of 9.6% p.a (2020:15.4% p.a) average growth over the five year forecast
period for Technology & Platforms.
An increase in Net Interest income of 8.1% p.a (2020: 8.1% p.a) average growth over the five year
forecast period, and an increase in Portfolio Administration fees of 7.0% p.a (2020: 7.0% p.a) average
growth over the five year forecast period.
Sensitivity analysis
As at 31 December 2021, the recoverable amounts for the retail segment exceeds the carrying values. The recoverable amounts
are sensitive to several key assumptions and a change in these assumptions could cause the carrying amounts to exceed the
recoverable amounts. Using the discount rate above, if brokerage and corporate fee revenue decreases by approximately 7.04%
for retail from the estimated amounts in each of the five years of the forecast period, the estimated recoverable amounts would
be equal to the carrying amounts. If the discount rate increased to 21% for retail, the estimated recoverable amounts would
be equal to the carrying amounts. Further, if the terminal value multiple decreased to approximately 2.9 times for retail, the
estimated recoverable amounts would be equal to the carrying amounts at that date.
3. Financial risk management
Overview
The Group’s principal financial instruments comprise loans and advances, listed securities, derivatives, term deposits, and cash.
The Group has exposure to the following risks from its use of financial instruments:
• Market risk
• Credit risk
• Liquidity risk.
Risk Management Framework
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.
The Board has established the Group Risk and Audit Committee (GRAC), which is responsible for developing and monitoring
risk management policies. The Committee reports regularly to the Board of Directors on its activities.
31
Bell Financial GroupAnnual Report 2021 NOTES TO THE FINANCIAL STATEMENTS continued
For the year ended 31 December 2021
3. Financial risk management
continued
Risk Management Framework
continued
Risk management policies are
established to identify and analyse
the risks faced by the Group, to set
appropriate risk limits and controls,
and to monitor risks and adherence to
limits. Risk management policies and
systems are reviewed regularly to reflect
changes in market conditions and the
Group’s activities. The Group, through
its training and management standards
and procedures, aims to develop a
disciplined and constructive control
environment in which all employees
understand their roles and obligations.
The Group Risk and Audit Committee
oversees how management monitors
compliance with the Group’s risk
management policies and procedures
and reviews the adequacy of the risk
management framework in relation to
the risks faced by the Group. Internal
Audit assists the Group Risk and Audit
Committee in its oversight role.
Internal Audit undertakes both regular
and ad hoc reviews of risk management
controls and procedures, the results of
which are reported to the Group Risk
and Audit Committee.
The risk management framework
incorporates active management and
monitoring of a range of risks. These
include operational, information
technology, cyber, market, credit,
liquidity, legal, regulatory, reputation,
fraud and systemic risks.
The Board of Directors recognises
that cyber risk is an increasing area of
concern across the financial services
industry, and is committed to the
ongoing development of cyber security
measures through awareness training,
implementation of network security
measures, and preventive controls to
protect our assets and networks. Cyber
resilience is an integral component of
effective risk management.
Market risk
Market risk is the risk that changes in
market prices, such as interest rates,
equity prices, and foreign exchange
rates will affect the Group’s income
or the value of its holdings of financial
instruments. The objective of market
risk management is to manage and
control exposures within acceptable
parameters, while optimising returns.
Equity price risk
All instruments are subject to the risk
that future changes in market conditions
may make an instrument less valuable.
As trading instruments are valued
with reference to the market or Black
Scholes model, changes in equity prices
directly affect reported income in each
period. The Group continually monitors
equity price movements to ensure
the impact on the Group’s activities is
managed.
Interest rate risk
Interest rate risk arises from the
potential for change in interest rates to
have an adverse effect on the Group’s
net earnings. The Group continually
monitors movements in interest rates
and manages exposure accordingly.
The Board has also approved the use
of derivatives, in the form of interest
rate swaps, to mitigate its exposure to
interest rate risk. Changes in the fair
value and effectiveness of interest rate
swaps (which are designated cash flow
hedging instruments) are monitored on
a six-monthly basis.
Currency risk
The Group is exposed to currency risk
on monetary assets and liabilities held
in a currency other than the respective
functional currency of the Group. The
Group ensures the net exposure is
kept to an acceptable level by buying or
selling foreign currencies at spot rates
where necessary to address short-term
imbalances.
Liquidity risk
Liquidity risk is the risk that the Group
will not be able to meet its financial
obligations as they fall due. The
Group’s approach to managing this
risk is to ensure that it will always have
sufficient liquidity to meet its liabilities
when due, under both normal and
stressed conditions, without incurring
unacceptable losses or risking damage
to the Group’s reputation.
Ultimate responsibility for liquidity risk
management rests with the Board of
Directors, which has built an appropriate
liquidity risk management framework
for the management of the Group’s
short, medium and long-term funding
requirements. The Group manages
liquidity by maintaining reserves,
banking facilities and reserve borrowing
facilities and by continuously monitoring
forecast and actual cash flows and
matching up maturity profiles of
financial assets and liabilities.
With respect to the maturity of financial
liabilities, the Group also:
• holds financial assets for which there
is a liquid market and that they are
readily saleable to meet liquidity
needs; and
• has committed borrowing facilities or
other lines of credit that it can access
to meet liquidity needs.
Credit risk
Credit risk is the financial loss to the
Group if a debtor or counterparty to a
financial instrument fails to meet its
contractual obligations.
Trade and other receivables
The credit risk for these accounts
is that financial assets recognised
on the balance sheet exceed their
carrying amount, net of any provisions
for doubtful debts. In relation to
client debtors, the Group’s credit
risk concentration is minimised as
transactions are settled on a delivery
versus payment basis with a settlement
regime of trade day plus two days.
32
Bell Financial GroupAnnual Report 2021 Margin lending
Management monitors exposure to
credit risk on an ongoing basis. The
Group requires collateral in respect
of margin loans made in the course of
business. This collateral is generally
in the form of the underlying security
the margin loan is used to invest in.
Loan-to-value ratios (LVRs) are assigned
to determine the amounts of lending
allowed against each security. Loans
balances are reviewed daily and are
subject to margin calls once the geared
value falls 10% lower than the loan
balance. Warnings are sent between
5% and 10%. The lender can also require
the borrower to repay on demand part
or all of the amount owing at any time,
whether or not the borrower or any
guarantor is in default.
Capital management
The Board’s policy is to maintain a
strong capital base so as to maintain
investor, creditor and market confidence
and to sustain future development
of the business. Capital consists of
ordinary shares and retained earnings
of the Group. The Group is required to
comply with certain capital and liquidity
requirements imposed by regulators
as a licensed broking firm. All capital
requirements are monitored by the
Board and the Group was in compliance
with all requirements throughout
the year.
Security arrangements
The ANZ Bank has a Registered
Mortgage Debenture over the assets
and undertakings of the Company.
4. Determination of fair
values
A number of the Group’s accounting
policies and disclosures require the
determination of fair value, for both
financial and non-financial assets
and liabilities. Fair values have been
determined and disclosed based
on the following methods. Where
applicable, further information about
the assumptions made in determining
fair values is disclosed in the notes
specific to that asset or liability.
Investments in equity
The fair values of financial assets
at fair value through profit or loss
are determined with reference to
the quoted bid price, or if unquoted
determined using a valuation model
at reporting date.
Derivatives
The fair value of interest rate swaps is
based on a mark-to-market model with
reference to prevailing fixed and floating
interest rates. These quotes are tested
for reasonableness by discounting
estimated future cash flows based on
term to maturity of each contract and
using market interest rates for a similar
instrument at the measurement date.
The fair value of currency swaps is
determined using quoted forward
exchange rates at the reporting date and
present value calculations based on high
quality yield curves in the respective
currencies.
Financial assets and loans at
fair value through profit or loss
The fair value of options is determined
using the Black Scholes option-pricing
model.
Determination of fair value for loans
is based on the option value used to
mitigate the risk on the limited recourse
margin loans and the interest rate
implicit in the loan.
Share based payments
The fair value of employee stock options
is determined using a Black Scholes
model. Measurement inputs include
share price, exercise price, volatility,
weighted average expected life of the
instrument, expected dividends and risk
free interest rate. Service and non-
market conditions are not taken into
account in determining fair value.
5. Segment Reporting
Business segments
The segments reported below are
consistent with internal reporting
provided to the chief decision makers:
• Technology & Platforms: Proprietary
technology and platforms including
online broking.
• Products & Services: Margin lending,
Cash, Portfolio Administration and
Superannuation Solutions products
and services
• Retail: traditional retail client broking
(Retail client focus),
• Institutional: traditional wholesale
client broking (Institutional and
Wholesale client focus).
33
Bell Financial GroupAnnual Report 2021 NOTES TO THE FINANCIAL STATEMENTS continued
For the year ended 31 December 2021
5. Segment Reporting continued
Business segments continued
31 December 2021
Revenue from operations
Profit after tax
Segment assets
Total assets
Segment liabilities
Total liabilities
Other segment details
Finance revenue
Finance expense
Depreciation/amortisation
31 December 2020
Revenue from operations
Profit after tax
Segment assets
Total assets
Segment liabilities
Total liabilities
Other segment details
Finance revenue
Finance expense
Depreciation/amortisation
Technology &
Platforms
$’000
25,076
4,790
162,232
162,232
Products &
Services
$’000
23,359
10,514
642,995
642,995
81,385
81,385
589,244
589,244
53
(80)
(2,599)
22,171
(2,075)
(161)
Technology &
Platforms
$’000
24,548
4,192
139,637
139,637
Products &
Services
$’000
19,971
9,293
547,612
547,612
75,364
75,364
495,404
495,404
134
(38)
(2,260)
23,653
(4,467)
(156)
Retail
$’000
142,936
10,466
416,197
416,197
362,375
362,375
484
(845)
(7,445)
Retail
$’000
139,709
10,685
282,397
282,397
224,187
224,187
1,180
(1,175)
(7,322)
Institutional
$’000
77,713
18,348
86,058
86,058
Consolidated
$’000
269,084
44,118
1,307,483
1,307,483
35,433
35,433
1,068,437
1,068,437
-
(115)
(1,444)
22,708
(3,115)
(11,649)
Institutional
$’000
87,237
22,525
96,642
96,642
Consolidated
$’000
271,465
46,695
1,066,288
1,066,288
40,392
40,392
835,347
835,347
-
(170)
(1,439)
24,967
(5,850)
(11,177)
Geographical segments
The Group operates predominantly within Australia and has offices in Hong Kong, London, New York and Kuala Lumpur.
6. Rendering of services
Brokerage
Fee income
Portfolio administration revenue
Other
34
Consolidated
2021
$’000
138,495
105,584
22,522
2,483
269,084
2020
$’000
138,002
109,793
19,314
4,356
271,465
Bell Financial GroupAnnual Report 2021 7. Revenue
The below Group’s revenue is derived from contracts with customers.
In the following table, revenue is disaggregated by major products and service lines. The table also includes a reconciliation
of the disaggregated revenue with the Group’s reportable segments in note 5.
Technology &
Platforms
2021
$’000
23,604
295
2020
$’000
21,719
206
Products &
Services
Retail
2021
$’000
145
2020
$’000
112
-
2021
$’000
103,988
38,739
2020
$’000
104,341
34,598
Institutional
2021
$’000
10,758
66,550
2020
$’000
11,830
74,989
Consolidated
2021
$’000
138,495
105,584
2020
$’000
138,002
109,793
-
1,177
25,076
-
2,623
24,548
22,522
692
23,359
19,314
545
19,971
209
142,936
-
770
139,709
-
405
77,713
-
418
87,237
22,522
2,483
269,084
19,314
4,356
271,465
Brokerage
Fee income
Portfolio
administration
revenue
Other
8. Investment gains/(losses)
Dividends received
Profit/(loss) on financial assets held at fair value through profit or loss –
Shares in listed corporations and unlisted options held in listed corporations
Profit/(loss) on financial assets held at fair value through profit or loss –
Geared equity investments1
Consolidated
2021
$’000
2
3,018
(3,689)
(669)
2020
$’000
22
6,772
(4,253)
2,541
1. The fair value is based on the option value used to mitigate the risk on the limited recourse margin loans and the interest rate implicit in the loan.
9. Other income
Sundry income
10. Finance income and expenses
Interest income on bank deposits
Interest income on loans and advances
Total finance income
Bank interest and fee expense
Interest expense on deposits
Interest expense on leases
Total finance expense
Net finance income/(expense)
Consolidated
2021
$’000
1,023
1,023
2020
$’000
353
353
Consolidated
2020
$’000
1,710
23,257
24,967
(3,332)
(1,215)
(1,303)
(5,850)
19,117
2021
$’000
604
22,104
22,708
(1,387)
(741)
(987)
(3,115)
19,593
35
Bell Financial GroupAnnual Report 2021 NOTES TO THE FINANCIAL STATEMENTS continued
For the year ended 31 December 2021
11. Employee expenses
Wages and salaries
Superannuation
Payroll tax
Other employee expenses
Equity-settled share-based payments
12. Income tax expense
Current tax expense
Current period
Taxable loss not recognised
Adjustment for prior periods
Deferred tax expense
Relating to origination and reversal of temporary differences
Total income tax expense
Numerical reconciliation between tax expense and pre-tax profit
Accounting profit before income tax
Income tax using the Company’s domestic tax rate
Non-deductible expenses
Adjustments in respect of current income tax
of previous year
Income tax credit not recognised
Consolidated
2021
%
30.00%
0.05%
-0.05%
0.10%
30.1%
$’000
63,115
18,934
33
(31)
61
18,997
Consolidated
2021
$’000
(155,293)
(8,129)
(7,839)
(1,811)
(428)
(173,500)
2020
$’000
(157,590)
(7,305)
(8,425)
(1,402)
(426)
(175,148)
Consolidated
2021
$’000
19,452
61
(31)
19,482
2020
$’000
19,149
165
26
19,340
(485)
965
18,997
20,305
Consolidated
2020
%
30.00%
0.02%
0.04%
0.25%
30.31%
$’000
67,000
20,100
14
26
165
20,305
Tax consolidation
Bell Financial Group Ltd and its wholly owned Australian controlled entities are a tax-consolidated group.
36
Bell Financial GroupAnnual Report 2021 13. Cash and cash equivalents
Group cash reserves1
Cash on hand
Cash at bank
Margin lending cash
Cash at bank
Client cash
Cash at bank (Trust account)
Cash at bank (Segregated account)
Cash and cash equivalents in the Statement of Cash Flows
Cash on hand and at bank earns interest at floating rates based on daily bank deposit rates.
Segregated cash and Trust bank balances earn interest at floating rates based on daily bank rates.
Consolidated
2021
$’000
13
136,480
136,493
36,840
36,840
49,634
129,775
179,409
352,742
2020
$’000
12
139,639
139,651
7,208
7,208
44,807
92,377
137,184
284,043
Segregated cash and Trust bank balances are client funds, and are not available for general use by the Group. A corresponding
liability is recognised within trade and other payables (note 20).
The Group’s exposure to interest rate risk for financial assets and liabilities is disclosed in note 30.
1. Group Cash – summary of key movements
Group cash – 1 January
Cash profit
Cash Revenue
Less Cash Expenses
Employee expenses
Occupancy expenses
Systems and communications
Market information expenses
ASX & Other clearing expenses
Professional expenses
Finance expenses
Other expenses
Total expenses
Net Cash operating profit
Balance Sheet
Tax instalments paid
Dividends paid
Clearing house deposits received/(paid)
Financial asset sales (net)
Acquisition of property, plant and equipment
General working capital movement
Group cash – 31 December
2021
$’000
139,651
2020
$’000
82,547
289,442
301,272
(158,514)
(14,275)
(10,003)
(7,012)
(5,924)
(3,351)
(4,547)
(10,786)
(214,412)
86,860
(18,122)
(27,263)
17,940
(190)
(1,589)
(532)
139,651
(180,969)
(14,318)
(10,539)
(7,024)
(6,561)
(3,447)
(2,128)
(10,291)
(235,277)
54,165
(21,606)
(35,281)
(760)
88
(986)
1,222
136,493
37
Bell Financial GroupAnnual Report 2021 NOTES TO THE FINANCIAL STATEMENTS continued
For the year ended 31 December 2021
14. Trade and other receivables
Trade debtors
Less: provision for impairment
Clearing house deposits
Segregated deposits with clearing brokers
Less: provision for impairment
Sundry debtors
Consolidated
2021
$’000
100,905
-
100,905
9,488
122,572
-
132,060
9,109
242,074
2020
$’000
82,027
-
82,027
9,159
34,267
-
43,426
4,545
129,998
No impairment allowance in respect of loans and receivables noted during the year (2020: Nil). There are no amounts in arrears
or past due.
15. Financial assets at fair value
Held at fair value through profit or loss
Shares in listed corporations
Unlisted options held in listed corporations
Options held in listed corporations1
1. Options held as a hedge against limited recourse loans to clients under the Bell Geared Equities Investments product.
Consolidated
2021
$’000
1,805
5,217
6,324
13,346
2020
$’000
3,931
7,066
4,648
15,645
38
Bell Financial GroupAnnual Report 2021 16. Property, plant and equipment
Consolidated
Cost
Balance at 1 January 2020
Additions
Disposals
Effect of movements in exchange rates
Balance at 31 December 2020
Balance at 1 January 2021
Additions
Disposals
Effect of movements in exchange rates
Balance at 31 December 2021
Accumulated depreciation
Balance at 1 January 2020
Depreciation charge for the year
Disposals
Effect of movements in exchange rates
Balance at 31 December 2020
Balance at 1 January 2021
Depreciation charge for the year
Disposals
Effect of movements in exchange rates
Balance at 31 December 2021
Carrying amount
At 1 January 2020
At 31 December 2020
At 31 December 2021
Total
$’000
14,024
1,589
-
(150)
15,463
15,463
986
-
31
16,480
(12,920)
(736)
-
150
(13,506)
(13,506)
(947)
-
(22)
(14,475)
1,104
1,957
2,005
Fixtures and
fittings
$’000
Office
equipment
$’000
Leasehold
improvements
$’000
2,136
73
-
(86)
2,123
2,123
102
-
5
2,230
(1,787)
(95)
-
86
(1,796)
(1,796)
(83)
-
(5)
(1,884)
349
327
346
5,159
924
-
(38)
6,045
6,045
452
-
9
6,506
(4,843)
(414)
-
37
(5,220)
(5,220)
(536)
-
(7)
(5,763)
316
825
743
6,729
592
-
(26)
7,295
7,295
432
-
17
7,744
(6,290)
(227)
-
27
(6,490)
(6,490)
(328)
-
(10)
(6,828)
439
805
916
39
Bell Financial GroupAnnual Report 2021 NOTES TO THE FINANCIAL STATEMENTS continued
For the year ended 31 December 2021
17. Goodwill and intangible assets
Cost
Balance at 1 January 2020
Acquisitions – internally developed
Balance at 31 December 2020
Balance at 1 January 2021
Acquisitions – internally developed
Balance at 31 December 2021
Accumulated amortisation and impairment losses
Balance at 1 January 2020
Amortisation
Balance at 31 December 2020
Balance at 1 January 2021
Amortisation
Balance at 31 December 2021
Carrying amount
At 1 January 2020
At 31 December 2020
At 31 December 2021
18. Deferred tax assets and liabilities
The movement in deferred tax balances are as follows:
Consolidated 2021
Property, plant and equipment
Employee benefits
Carry forward tax loss
Other items
Consolidated 2020
Property, plant and equipment
Employee benefits
Carry forward tax loss
Other items
Goodwill
$’000
130,413
-
130,413
130,413
-
130,413
-
-
-
-
-
-
130,413
130,413
130,413
Identifiable
intangibles
$’000
20,630
3,335
23,965
23,965
3,451
27,416
(8,133)
(2,071)
(10,204)
(10,204)
(2,416)
(12,620)
12,497
13,761
14,796
Total
$’000
151,043
3,335
154,378
154,378
3,451
157,829
(8,133)
(2,071)
(10,204)
(10,204)
(2,416)
(12,620)
142,910
144,174
145,209
Balance as at
1 January
$’000
26
5,524
40
(1,450)
4,140
Balance as at
1 January
$’000
10
4,478
96
(164)
4,420
Recognised in
profit or loss
$’000
(51)
(307)
-
760
402
Recognised in
profit or loss
$’000
16
1,046
(56)
(1,286)
(280)
Balance at
31 December
$’000
(25)
5,217
40
(690)
4,542
Balance at
31 December
$’000
26
5,524
40
(1,450)
4,140
Unrecognised deferred tax assets relating to tax losses at 31 December 2021: $167,000 (2020: $113,000).
Management has determined there is sufficient evidence that there will be profits available in future periods against which the tax
losses will be utilised as set out in note 2.
40
Bell Financial GroupAnnual Report 2021 19. Loans and advances
Margin Loans measured at amortised cost
Margin Loans measured at fair value through profit and loss
There were no impaired, past due or renegotiated loans at 31 December 2021 (2020: nil).
Refer to note 30 for further detail on the margin lending loans.
20. Trade and other payables
Settlement obligations
Sundry creditors and accruals
Segregated client liabilities
Consolidated
2021
$’000
444,119
89,887
534,006
2020
$’000
408,928
60,148
469,076
Consolidated
2021
$’000
132,524
20,511
264,752
417,787
2020
$’000
112,710
18,553
136,522
267,785
Settlement obligations are non-interest bearing and are normally settled on 2-day terms. Sundry creditors are normally settled
on 60-day terms.
21. Deposits and borrowings
This note provides information about the contractual terms of the Group’s interest-bearing deposits and borrowings. For more
information about the Group’s exposure to interest rate and foreign currency risk, see note 30.
Deposits1
Bell Financial Trust2
Cash advance facility3
1. Deposits relate to Margin Lending business (Bell Potter Capital) which are largely at call.
2. Represents funds held on behalf of Bell Potter Capital in the Bell Financial Trust which are held at call.
3. Represents drawn funds from the Bell Potter Capital cash advance facility of $150m (2020: $100m).
Interest rate risk exposures
Details of the Group’s exposure to interest rate changes on borrowings are set out in note 30.
Consolidated
2021
$’000
1,449
479,651
92,000
573,100
2020
$’000
615
436,861
40,000
477,476
41
Bell Financial GroupAnnual Report 2021 NOTES TO THE FINANCIAL STATEMENTS continued
For the year ended 31 December 2021
21. Deposits and borrowings continued
Terms and debt repayment schedule
Terms and conditions of outstanding deposits and borrowings were as follows:
2021
2020
2021
2020
Consolidated
Cash advance facility
Deposits (Cash Account)
Bell Financial Trust
Average
effective
interest rate
0.51%
0.11%
0.11%
1.35%
0.18%
0.18%
Face
value
$’000
92,000
1,449
479,651
573,100
Carrying
amount
$’000
92,000
1,449
479,651
573,100
2021
Face
value
$’000
40,000
615
436,861
477,476
Carrying
amount
$’000
40,000
615
436,861
477,476
Cash
advance
facility
$’000
40,000
Liabilities
Deposits
$’000
615
Bell
Financial
Trust
$’000
436,861
Derivatives (assets)/
liabilities held to hedge
long-term borrowings
Interest rate swap
contracts used for hedging
Liabilities
$’000
238
Assets
$’000
-
Total
$’000
477,714
-
52,000
52,000
-
834
-
834
-
-
42,790
42,790
-
-
-
-
-
-
834
94,790
95,624
-
(13)
(238)
(225)
Balance at 1 January
Changes from financing cash flows
Deposits/(withdrawals) from client
cash balances
Drawdown/(repayment) of borrowings
Total changes from financing cash flows
Changes in fair value
Other charges
Liability-related
Interest expense
Interest paid/(payable)
Total liability-related other changes
Balance at 31 December
92,000
1,449
479,651
(13)
42
324
(324)
-
221
(221)
-
741
(741)
-
-
-
-
-
-
-
-
1,286
(1,286)
-
573,087
612
(612)
-
1,249
(1,249)
-
1,215
(1,215)
40,000
615
436,861
238
477,714
Liabilities
Cash
advance
facility
$’000
177,000
(137,000)
(137,000)
-
-
Deposits
$’000
635
(20)
(20)
-
-
2020
Bell
Financial
Trust
$’000
381,795
55,066
55,066
-
-
-
Derivatives (assets)/
liabilities held to hedge
long-term borrowings
Interest rate swap
contracts used for Hedging
Assets
$’000
Liabilities
$’000
380
Total
$’000
559,810
-
-
-
-
-
-
-
-
-
(142)
(142)
-
-
-
-
-
-
(20)
(81,934)
(81,954)
3,076
(3,076)
-
Bell Financial GroupAnnual Report 2021
21. Deposits and borrowings continued
Terms and debt repayment schedule
Terms and conditions of outstanding deposits and borrowings were as follows:
Consolidated
Cash advance facility
Deposits (Cash Account)
Bell Financial Trust
Average
effective
interest rate
0.51%
0.11%
0.11%
1.35%
0.18%
0.18%
2021
2020
2021
2020
Face
value
$’000
92,000
1,449
479,651
573,100
Carrying
amount
$’000
92,000
1,449
479,651
573,100
2021
Face
value
$’000
40,000
615
436,861
477,476
Carrying
amount
$’000
40,000
615
436,861
477,476
Cash
advance
facility
$’000
40,000
Liabilities
Deposits
$’000
615
Bell
Financial
Trust
$’000
436,861
Derivatives (assets)/
liabilities held to hedge
long-term borrowings
Interest rate swap
contracts used for hedging
Assets
$’000
Liabilities
$’000
238
Total
$’000
477,714
Balance at 1 January
Changes from financing cash flows
Deposits/(withdrawals) from client
cash balances
Drawdown/(repayment) of borrowings
Total changes from financing cash flows
52,000
52,000
Changes in fair value
Other charges
Liability-related
Interest expense
Interest paid/(payable)
Total liability-related other changes
324
(324)
-
221
(221)
-
741
(741)
-
-
-
834
834
-
-
42,790
42,790
-
-
(13)
(238)
(225)
-
-
-
-
-
-
-
834
94,790
95,624
1,286
(1,286)
-
-
-
-
-
-
-
-
Liabilities
Cash
advance
facility
$’000
177,000
-
(137,000)
(137,000)
-
Deposits
$’000
635
(20)
-
(20)
-
612
(612)
-
1,249
(1,249)
-
2020
Bell
Financial
Trust
$’000
381,795
-
55,066
55,066
-
1,215
(1,215)
-
Balance at 31 December
92,000
1,449
479,651
(13)
573,087
40,000
615
436,861
Derivatives (assets)/
liabilities held to hedge
long-term borrowings
Interest rate swap
contracts used for Hedging
Liabilities
$’000
380
Assets
$’000
-
Total
$’000
559,810
-
-
-
-
-
-
-
-
-
-
-
(20)
(81,934)
(81,954)
(142)
(142)
-
-
-
3,076
(3,076)
-
238
477,714
43
Bell Financial GroupAnnual Report 2021
NOTES TO THE FINANCIAL STATEMENTS continued
For the year ended 31 December 2021
22. Current tax liabilities
The current tax liability of the Group is $1,848,768 (2020: $4,055,506). This amount represents the amount of income taxes
payable in respect of current and prior financial periods.
23. Provisions
Legal provision
Balance at 1 January
Arising during the year:
Legal/other
Utilised:
Legal/other
Balance at 31 December
Consolidated
2021
$’000
500
500
500
400
(400)
500
2020
$’000
500
500
-
802
(302)
500
Legal provision
This amount represents a provision for certain legal claims brought against the Group. In the Directors’ opinion, the provision is
appropriate to cover known contingent liabilities at 31 December 2021.
24. Employee benefits
Salaries and wages accrued
Liability for annual leave
Total employee benefits
Liability for long-service leave
Total employee benefits
Consolidated
2021
$’000
46,081
7,697
53,778
5,139
58,917
2020
$’000
51,239
6,828
58,067
4,868
62,935
The present value of employee entitlements not expected to be settled within 12 months of balance date have been calculated
using the following inputs or assumptions at the reporting date:
Assumed rate of increase on wage/salaries
Discount rate
Settlement term (years)
Number of employees at year end
Consolidated
2021
$’000
3.0%
1.60%
7
762
2020
$’000
3.0%
0.95%
7
732
44
Bell Financial GroupAnnual Report 2021 25. Reconciliation of cash flows from operating activities
Cash flows from operating activities
Profit after tax:
Adjustments for:
Depreciation & amortisation
Net (gain)/loss on investments
Equity settled share-based payments
(Increase)/decrease client receivables
(Increase)/decrease other receivables
(Increase) derivative asset
(Increase) other assets
(Increase) deferred tax assets
(Increase) intangibles
Increase client payables
Increase/(decrease) other payables
Increase derivative liability
(Decrease)/increase current tax liabilities
(Decrease)/increase provisions
(Decrease)/increase deferred tax liability
Net cash from operating activities
Reconciliation of cash
For the purpose of the cash flow statement, cash and cash equivalents comprise:
Group cash reserves
Cash on hand
Cash at bank
Margin lending cash
Cash at bank
Client cash
Cash at bank (Trust account)
Segregated cash at bank (client)
Consolidated
2021
$’000
2020
$’000
44,118
46,695
11,177
(2,093)
426
56,205
36,900
1,060
(2)
(98)
(1,155)
(3,336)
22,290
(471)
-
1,904
20,469
1,435
135,201
12
139,639
139,651
7,208
7,208
44,807
92,377
137,184
284,043
11,649
747
428
56,942
(107,512)
(4,564)
(74)
(173)
(89)
(3,451)
148,319
1,958
22
(2,207)
(4,018)
(313)
84,840
13
136,480
136,493
36,840
36,840
49,634
129,775
179,409
352,742
45
Bell Financial GroupAnnual Report 2021 NOTES TO THE FINANCIAL STATEMENTS continued
For the year ended 31 December 2021
26. Capital and reserves
Ordinary shares
On issue at 1 January
Share issue
On issue at 31 December
Movements in ordinary share capital
Date
1 January 2020
Share issue
31 December 2020
1 January 2021
Share issue
31 December 2021
Consolidated
2021
$’000
204,237
-
204,237
2020
$’000
204,237
-
204,237
Number of
shares
320,743,948
-
320,743,948
320,743,948
-
320,743,948
Detail
Opening balance
Balance
Opening balance
Balance
Ordinary Shares
The authorised capital of the Group is $204,236,590 representing 320,743,948 fully paid ordinary shares.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per
share at meetings of the Company.
All ordinary shares rank equally with regard to the Company’s residual assets.
Retained earnings
As at 31 December 2021, there were retained profits of $64.2m (2020: $55.4m).
Foreign currency reserve
The foreign currency reserve comprises of any movements in the translation of foreign currency balances. Balance at
31 December 2021: $699,000 (2020: $415,000).
Other equity
Other equity comprises movements in equity as a result of transactions with subsidiaries in Bell Financial Group Ltd’s capacity as
a shareholder. Balance at 31 December 2021: $28,858,000 debit (2020: $28,858,000 debit).
Cash flow hedging reserve
The cash flow hedging reserve comprises the effective portion of the cumulative net change in the fair value of the interest rate
swap related to hedged transactions. Balance at 31 December 2021: $13,000 (2020: $238,000 debit).
Share based payments reserve
The share based payments reserve arises on the grant of options, performance rights and deferred share rights to select
employees under the Company’s equity-based remuneration plans. Balance at 31 December 2021: Nil (2020: Nil).
Treasury shares reserve
The treasury shares reserve represents the cost of shares held by the Employee Share Trust that the Group is required to include
in the Consolidated Financial Statements. Balance at 31 December 2021: 1,267,000 debit (2020: $Nil).
46
Bell Financial GroupAnnual Report 2021
27. Dividends
Dividends recognised in the current year by the Group are:
Cents per
share
Total amount
$‘000
Franked/
unfranked
Date of
payment
2021
Interim 2021 ordinary dividend
Final 2021 ordinary dividend
2020
Interim 2020 ordinary dividend
Final 2020 ordinary dividend
4.5
-
4.0
6.5
14,433
-
12,830
20,848
Dividend franking account
30 percent franking credits available to shareholders of Bell Financial Group Ltd for
subsequent financial years
Franked 26 August 2021
-
-
Franked
Franked
27 August 2020
17 March 2021
Company
2021
$‘000
2020
$‘000
39,037
32,742
The above available amounts are based on the balance of the dividend franking account at year-end adjusted for:
1. Franking credits that will arise from the payment of current tax liabilities.
2. Franking debits that will arise from payment of dividends recognised as a liability at year-end.
3. Franking credits that will arise from the receipt of dividends recognised as receivable at year-end.
The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends.
The impact on the dividend franking account of dividends declared but not recognised as a liability is to reduce it by $8.9m
(2020: $8.9m).
28. Earnings per share
Earnings per share at 31 December 2021 based on profit after tax and a weighted average number of shares outlined below was
13.8 cents (2020: 14.6 cents). Diluted earnings per share at 31 December 2021 was 13.8 cents (2020: 14.6 cents).
Reconciliation of earnings used in calculating EPS
Basic earnings per share
Profit after tax
Profit attributable to ordinary equity holders used for basic EPS
Adjustments for calculation of diluted earnings per share
Profit attributable to ordinary equity holders used to calculate basic EPS
Effect of stock options issued
Profit attributable to ordinary equity holders used for diluted EPS
Weighted average number of ordinary shares used as the denominator
Weighted average number of ordinary shares used to calculate basic EPS
(net of treasury shares)
Weighted average number of ordinary shares at year-end
Weighted average number of ordinary shares used to calculate diluted EPS
Consolidated
2021
$’000
44,118
44,118
44,118
-
44,118
2020
$’000
46,695
46,695
46,695
-
46,695
Consolidated
2021
2020
320,450,886
320,450,886
320,450,886
320,507,243
320,507,243
320,507,243
47
Bell Financial GroupAnnual Report 2021 NOTES TO THE FINANCIAL STATEMENTS continued
For the year ended 31 December 2021
29. Share-based payments
Long-Term Incentive Plan (LTIP)
The Board is responsible for administering the LTIP Rules and the terms and conditions of specific grants of options or
performance rights to participants in the LTIP. The LTIP Rules include the following provisions:
• The Board may determine which persons will be eligible to participate in the LTIP from time to time. Eligible persons may
be invited to apply to participate in the LTIP. The Board may in its discretion accept such applications.
• A person participating in the LTIP (“Executive”) may be granted options or performance rights on conditions determined
by the Board.
• The options or performance rights will vest on, and become exercisable on or after, a date predetermined by the Board
(“the Vesting Date”), provided that the Executive remains employed as an executive of the Company as at that date. These terms
may be accelerated at the discretion of the Board under specified circumstances.
• An unvested option or performance right will generally lapse at the expiry of the exercise period applicable to that option
or performance right.
• Following the Vesting Date, the vested option or performance right may be exercised by the Executive subject to any exercise
conditions and the payment of the exercise price (if any), and the Executive will then be allocated or issued shares on a one for
one basis.
• The Company has established an Employee Share Trust for the purpose of acquiring and holding shares in the Company for
the benefit of participants.
Fair value of options granted
There were no share options granted during the year to 31 December 2021 (2020: Nil).
Performance Rights
Under the LTIP Rules, performance rights are deferred equity taken as 100% shares, with the conditions, including vesting and
the period of deferral, governed by the terms of the grant. Unvested performance rights are forfeited in certain situations set out
in the LTIP Rules. Ordinary shares allocated under the LTIP on exercise of performance rights may be held in trust beyond the
deferral period. The issue price for the performance rights is based on the closing price of the shares traded on the ASX on the
grant date and performance hurdles are time related.
Reconciliation of outstanding performance rights
Consolidated
2021
’000
-
-
-
-
-
2020
’000
-
-
-
-
-
Consolidated
2021
$’000
-
-
428
428
2020
$’000
-
-
426
426
Outstanding 1 January
Granted during the year
Forfeited during the year
Exercised during the year
Outstanding balance 31 December
Expenses arising from share-based payment transactions
Employee share options
Performance rights
Employee share issue
Total expense recognised as employee costs
48
Bell Financial GroupAnnual Report 2021 30. Financial instruments
Exposure to credit, interest rate, currency and liquidity risks arise in the normal course of the Group’s business.
Credit risk
Management has a process in place to monitor the exposure to credit risk on an ongoing basis. The Group requires collateral in
respect of margin loans made in the course of business within Bell Potter Capital. This collateral is generally in the form of the
underlying security the margin loan is used to invest in. A loan-to-value ratio (LVR) is determined for each security with regard
to market weight, index membership, liquidity, volatility, dividend yield, industry sector and advice from Bell Financial’s research
department. A risk analyst performs a review of the LVR and the recommendation is submitted to management. Management
does not expect any counterparty to fail to meet its obligations. There are no individual loans greater than 10% of the total loans
and advance balance.
Advisers and clients are provided with early warning of accounts in deficit from 5% up to 10% and clients receive a margin call if
their account is in deficit by more than 10%. Margin calls are made based on the end-of-day position but can be made intraday at
management’s discretion.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the Statement of Financial
Position as outlined below:
Consolidated
Trade debtors
Clearing house deposits
Segregated deposits with clearing brokers
Loans and advances
Sundry debtors
Note
14
14
14
19
14
2021
$’000
100,905
9,488
122,572
534,006
9,109
The ageing of trade receivables at reporting date is outlined below:
Consolidated
Ageing of receivables
Not past due
Past due 0 – 30 days
Past due 31 – 365 days
More than one year
Gross
2021
$’000
100,751
65
89
-
Impairment
2021
$’000
-
-
-
-
Gross
2020
$’000
81,667
348
12
-
2020
$’000
82,027
9,159
34,267
469,076
4,545
Impairment
2020
$’000
-
-
-
-
Collectability of trade receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off. A
provision for impairment of trade receivables is established based on lifetime expected credit losses. This assessment is based
on past events, current conditions and reasonable and supportable information about future events and economic conditions.
49
Bell Financial GroupAnnual Report 2021
NOTES TO THE FINANCIAL STATEMENTS continued
For the year ended 31 December 2021
30. Financial instruments continued
Liquidity risk
The following are the contractual maturities of financial liabilities, including estimated interest and excluding the impact of
netting agreements.
Consolidated 2021
Non-derivative liabilities
Trade & other payables
Cash deposits
Cash advance facilities
Bell Financial Trust
Lease Liabilities
Derivative liabilities
Hedging derivative
Foreign currency swap
Consolidated 2020
Non-derivative liabilities
Trade & other payables
Cash deposits
Cash advance facilities
Bell Financial Trust
Lease Liabilities
Derivative liabilities
Hedging derivative
Foreign currency swap
Carrying
Amount
$’000
Contracted
Cashflow
$’000
6-months
or less
$’000
6–12
months
$’000
417,787
1,449
92,000
479,651
16,275
(417,787)
(1,449)
(92,000)
(479,651)
(16,275)
(417,787)
(1,449)
(92,000)
(479,651)
(2,208)
-
-
-
-
(1,628)
-
-
-
-
-
-
-
-
Carrying
Amount
$’000
Contracted
Cashflow
$’000
6-months
or less
$’000
6–12
months
$’000
267,785
615
40,000
436,861
22,357
(267,785)
(615)
(40,000)
(436,861)
(22,357)
(267,785)
(615)
(40,000)
(436,861)
(5,279)
-
-
-
-
(5,053)
1–2
years
$’000
-
-
-
-
(3,291)
-
-
1–2
years
$’000
-
-
-
-
(3,674)
2–5
years
$’000
-
-
-
-
(7,615)
-
-
2–5
years
$’000
-
-
-
-
(8,195)
5+
years
$’000
-
-
-
-
(1,533)
-
-
5+
years
$’000
-
-
-
-
(155)
238
-
(238)
-
(238)
-
-
-
-
-
-
-
-
-
The Group manages liquidity by maintaining reserves, banking facilities and reserve borrowing facilities and by continuously
monitoring forecast and actual cash flows and matching up maturity profiles of financial assets and liabilities. Rolling cash
projections are used to monitor cash flow requirements and optimise cash returns on investments. A bank facility is also
available to be drawn upon in order to meet both short and long-term liquidity requirements.
Market risk
Market risk is the risk that changes in market prices, such as interest rates, equity prices and foreign exchange rates will affect
the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage
and control exposures within acceptable parameters, while optimising returns.
50
Bell Financial GroupAnnual Report 2021 Interest rate risk
The Group’s investments in fixed-rate debt securities and its fixed-rate borrowings are exposed to a risk of change in their fair
value due to changes in interest rates. The Group’s investments in variable-rate debt securities and its variable-rate borrowings
are exposed to a risk of change in cash flows due to changes in interest rates. Interest rate swaps are used to hedge exposure to
fluctuations in interest rates. Changes in the fair value of these derivative hedging instruments are recognised directly in equity
to the extent that the hedge is effective. To the extent the hedge is ineffective, changes in the fair value are recognised in profit
or loss.
In managing interest rate risk the Group aims to reduce the impact of short-term fluctuations on the Group’s earnings. Over the
longer-term, however, permanent changes in interest rates will have an impact on profit.
Investments in equity securities and short-term receivables and payables are not exposed to interest rate risk.
Equity price risk
All instruments are subject to the risk that future changes in market conditions may make an instrument less valuable. As
trading instruments are valued with reference to the market or Black Scholes model, changes in equity prices directly affect
reported income each period. The Group monitors equity price movements to ensure there is no material impact on the Group’s
activities.
The Group is exposed to equity price risks through its listed and unlisted investments. These investments are classified as
financial assets or liabilities at fair value through the profit or loss.
Foreign currency risk
The Group is exposed to insignificant currency risk on monetary assets and liabilities held in a currency other than the respective
functional currency of the Group. The Group ensures the net exposure is kept to an acceptable level by buying or selling foreign
currencies at spot rates where necessary to address short-term imbalances.
Sensitivity analysis
Interest rate risk
At 31 December 2021, it is estimated that a general decrease of one-percentage point in interest rates would decrease the
Group’s profit before income tax by approximately $3,159,000 (2020: $2,766,000 decrease to profit) and would decrease equity
by approximately $2,211,000 (2020: $1,936,000 decrease to equity). Interest rate swaps have been included in this calculation.
A general increase of one-percentage point in interest rates would have an equal but opposite effect.
Equity price risk
At 31 December 2021, it is estimated that a 10% decrease in equity prices would decrease the Group’s profit before income
tax by approximately $1,335,000 (2020: $1,565,000 decrease to profit) and would decrease equity by approximately $935,000
(2020: $1,095,000 decrease to equity). A 10% increase in equity prices would have an equal but opposite effect. The impact of an
equity price decrease excludes the impact on options that are used to mitigate the risk on limited recourse margin loans issued
to clients.
51
Bell Financial GroupAnnual Report 2021 NOTES TO THE FINANCIAL STATEMENTS continued
For the year ended 31 December 2021
30. Financial instruments continued
Effective interest rates
In respect of income-earning financial assets and interest-bearing financial liabilities, the following tables indicate their average
effective interest rates at the reporting date and the expected periods in which they mature.
Consolidated
Fixed rate instruments
Loans and advances
Cash advance facility
Variable rate instruments
Cash and cash equivalents
Loans and advances
Deposits and borrowings
Bell Financial Trust
Average
effective
interest rate
%
Note
Total
$’000
6 months
or less
$’000
6–12
months
$’000
1–2
years
$’000
2–5
years
$’000
More than
5 years
$’000
2021
19
21
13
19
21
21
4.65%
0.51%
173,144
(92,000)
81,144
168,288
(92,000)
76,288
4,856
-
4,856
0.10%
4.20%
0.11%
0.11%
352,742
360,862
(1,449)
(479,651)
232,504
352,742
360,862
(1,449)
(479,651)
232,504
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Fair value measurements
(a) Accounting classifications and fair values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in
the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair
value if the carrying amount is a reasonable approximation of fair value.
Carrying Amount
Designated
at fair value
$’000
Note
Fair value
hedging
instruments
$’000
Loans and1
receivables
$’000
Other
financial
liabilities
$’000
31 December 2021
Financial assets measured at fair value
Equity securities/unlisted options
Interest rate swaps used for hedging
Foreign currency swap
Loans and advances
Financial assets not measured at fair value
Trade and other receivables
Cash and cash equivalents
Loans and advances
Financial liabilities measured at fair value
Foreign currency swap
Financial liabilities not measured at fair value
Trade and other payables
Deposits and borrowings
15
19
14
13
19
20
21
13,346
-
157
-
13,503
-
-
-
-
-
-
-
-
-
-
13
-
-
13
-
-
-
-
-
-
-
-
-
-
-
-
89,887
89,887
242,074
352,742
444,119
1,038,935
-
-
-
-
-
Total
$’000
13,346
13
157
89,887
103,403
242,074
352,742
444,119
1,038,935
-
-
-
-
-
-
-
-
-
-
-
-
-
411,448
573,100
984,548
411,448
573,100
984,548
1. Loans and advances measured at fair value increased from $60,148,000 at 31 December 2020 to $89,887,000 at 31 December 2021 due to net new/
repaid loans of $28,275,000 with the remaining movement due to net fair value changes.
52
Average
Effective
interest rate
%
5.30%
1.35%
0.31%
4.36%
0.18%
0.18%
Total
$’000
129,688
(40,000)
89,688
284,043
339,388
(615)
(436,861)
185,955
6 months
or less
$’000
128,198
(40,000)
88,198
284,043
339,388
(615)
(436,861)
185,955
2020
6–12
months
$’000
1,490
1,490
-
-
-
-
-
-
Fair Value
Level 2
$’000
11,541
13
157
11,711
-
-
-
-
-
-
-
-
-
-
1–2
years
$’000
2–5
years
$’000
More than
5 years
$’000
-
-
-
-
-
-
-
-
Level 3
$’000
89,887
89,887
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$’000
13,346
13
157
89,887
103,403
Level 1
$’000
1,805
1,805
-
-
-
-
-
-
-
-
-
-
-
-
Bell Financial GroupAnnual Report 2021 30. Financial instruments continued
Effective interest rates
In respect of income-earning financial assets and interest-bearing financial liabilities, the following tables indicate their average
effective interest rates at the reporting date and the expected periods in which they mature.
Consolidated
Note
%
Average
effective
interest rate
Total
$’000
6 months
or less
$’000
6–12
months
$’000
1–2
years
$’000
2–5
More than
years
$’000
5 years
$’000
Fixed rate instruments
Loans and advances
Cash advance facility
Variable rate instruments
Cash and cash equivalents
Loans and advances
Deposits and borrowings
Bell Financial Trust
19
21
13
19
21
21
4.65%
0.51%
173,144
168,288
4,856
(92,000)
(92,000)
81,144
76,288
4,856
0.10%
4.20%
0.11%
0.11%
352,742
360,862
352,742
360,862
(1,449)
(1,449)
(479,651)
(479,651)
232,504
232,504
-
-
-
-
-
-
-
-
2021
-
-
-
-
-
-
Fair value measurements
(a) Accounting classifications and fair values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in
the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair
value if the carrying amount is a reasonable approximation of fair value.
Carrying Amount
Fair value
Designated
hedging
Loans and1
at fair value
instruments
receivables
Note
$’000
$’000
$’000
Other
financial
liabilities
$’000
31 December 2021
Financial assets measured at fair value
Equity securities/unlisted options
Interest rate swaps used for hedging
Foreign currency swap
Loans and advances
Financial assets not measured at fair value
Trade and other receivables
Cash and cash equivalents
Loans and advances
Financial liabilities measured at fair value
Foreign currency swap
Financial liabilities not measured at fair value
Trade and other payables
Deposits and borrowings
15
19
14
13
19
20
21
13,346
157
13,503
-
-
-
-
-
-
-
-
-
-
-
13
13
-
-
-
-
-
-
-
-
-
-
-
-
89,887
89,887
242,074
352,742
444,119
1,038,935
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$’000
13,346
13
157
89,887
103,403
242,074
352,742
444,119
1,038,935
411,448
573,100
984,548
411,448
573,100
984,548
1. Loans and advances measured at fair value increased from $60,148,000 at 31 December 2020 to $89,887,000 at 31 December 2021 due to net new/
repaid loans of $28,275,000 with the remaining movement due to net fair value changes.
Average
Effective
interest rate
%
5.30%
1.35%
0.31%
4.36%
0.18%
0.18%
Total
$’000
129,688
(40,000)
89,688
284,043
339,388
(615)
(436,861)
185,955
6 months
or less
$’000
128,198
(40,000)
88,198
284,043
339,388
(615)
(436,861)
185,955
2020
6–12
months
$’000
1,490
-
1,490
-
-
-
-
-
Fair Value
Level 1
$’000
1,805
-
-
-
1,805
-
-
-
-
-
-
-
-
-
Level 2
$’000
11,541
13
157
-
11,711
-
-
-
-
-
-
-
-
-
1–2
years
$’000
2–5
years
$’000
More than
5 years
$’000
-
-
-
-
-
-
-
-
Total
$’000
13,346
13
157
89,887
103,403
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Level 3
$’000
-
-
-
89,887
89,887
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
53
Bell Financial GroupAnnual Report 2021 Level 1
$’000
3,931
3,931
-
-
-
-
-
-
-
-
-
-
-
-
Fair Value
Level 2
$’000
11,714
105
11,819
-
-
-
-
-
-
-
-
-
238
238
Level 31
$’000
60,148
60,148
-
-
-
-
-
-
-
-
-
-
-
-
Total
$’000
15,645
105
60,148
75,898
-
-
-
-
-
-
-
-
238
238
NOTES TO THE FINANCIAL STATEMENTS continued
For the year ended 31 December 2021
30. Financial instruments continued
Fair value measurements continued
(a) Accounting classifications and fair values continued
Carrying Amount
Designated
at fair value
$’000
Note
Fair value
hedging
instruments
$’000
Loans and1
receivables
$’000
Other
financial
liabilities
$’000
31 December 2020
Financial assets measured at fair value
Equity securities / unlisted options
Foreign currency swap
Loans and advances
Financial assets not measured at fair value
Trade and other receivables
Cash and cash equivalents
Loans and advances
Financial liabilities measured at fair value
Interest rate swaps used for hedging
Foreign currency swap
Financial liabilities not measured at fair value
Trade and other payables
Deposits and borrowings
15
19
14
13
19
20
21
15,645
105
-
15,750
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
238
-
238
-
-
-
-
-
60,148
60,148
129,998
284,043
408,928
822,969
-
-
-
-
-
-
Total
$’000
15,645
105
60,148
75,898
129,998
284,043
408,928
822,969
238
-
238
-
-
-
-
-
-
-
-
-
-
-
263,847
477,476
741,323
263,847
477,476
741,323
1. Loans and advances measured at fair value decreased from $145,969,000 at 31 December 2019 to $60,148,000 at 31 December 2020 due to net new/
repaid loans of $86,019,000 with the remaining movement due to net fair value changes.
(b) Accounting classifications and fair values
The following shows the valuation techniques used in measuring level 1, 2 and 3 values, as well as the significant unobservable
inputs used.
Level 1 – Equity securities – the valuation is based on quoted prices in active markets for identical assets and liabilities.
Level 2 – Unlisted options – the valuation technique uses observable inputs. The observable inputs include strike price, expiry
date and market price. The valuation is based on Black Scholes model.
Level 2 – Interest rate swaps – the fair values are based on broker quotes. Similar contracts are traded in an active market and
the quotes reflect the actual transactions in similar instruments.
Level 2 – Currency swaps – the fair value is determined using quoted forward exchange rates at the reporting date and present
value calculations based on high quality yield curves in the respective currencies.
Level 3 – Loans and advances – the fair value is based on the option value used to mitigate the risk on the limited recourse
margin loans and the interest rate implicit in the loan.
There were no reclassifications on the fair value levels during the years ended 31 December 2021 and 2020.
54
Bell Financial GroupAnnual Report 2021
30. Financial instruments continued
Fair value measurements continued
(a) Accounting classifications and fair values continued
Carrying Amount
Fair value
Designated
hedging
Loans and1
at fair value
instruments
receivables
Note
$’000
$’000
$’000
Other
financial
liabilities
$’000
31 December 2020
Financial assets measured at fair value
Equity securities / unlisted options
Foreign currency swap
Loans and advances
Financial assets not measured at fair value
Trade and other receivables
Cash and cash equivalents
Loans and advances
Financial liabilities measured at fair value
Interest rate swaps used for hedging
Foreign currency swap
Financial liabilities not measured at fair value
Trade and other payables
Deposits and borrowings
15
19
14
13
19
20
21
15,645
105
15,750
-
-
-
-
-
-
-
-
-
-
-
Total
$’000
15,645
105
60,148
75,898
129,998
284,043
408,928
822,969
238
-
238
-
-
-
-
-
-
-
-
-
-
-
263,847
477,476
741,323
263,847
477,476
741,323
-
-
-
-
-
-
-
-
-
-
-
-
238
238
60,148
60,148
129,998
284,043
408,928
822,969
-
-
-
-
-
-
-
-
1. Loans and advances measured at fair value decreased from $145,969,000 at 31 December 2019 to $60,148,000 at 31 December 2020 due to net new/
repaid loans of $86,019,000 with the remaining movement due to net fair value changes.
(b) Accounting classifications and fair values
inputs used.
The following shows the valuation techniques used in measuring level 1, 2 and 3 values, as well as the significant unobservable
Level 1 – Equity securities – the valuation is based on quoted prices in active markets for identical assets and liabilities.
Level 2 – Unlisted options – the valuation technique uses observable inputs. The observable inputs include strike price, expiry
date and market price. The valuation is based on Black Scholes model.
Level 2 – Interest rate swaps – the fair values are based on broker quotes. Similar contracts are traded in an active market and
the quotes reflect the actual transactions in similar instruments.
Level 2 – Currency swaps – the fair value is determined using quoted forward exchange rates at the reporting date and present
value calculations based on high quality yield curves in the respective currencies.
Level 3 – Loans and advances – the fair value is based on the option value used to mitigate the risk on the limited recourse
margin loans and the interest rate implicit in the loan.
There were no reclassifications on the fair value levels during the years ended 31 December 2021 and 2020.
Level 1
$’000
3,931
-
-
3,931
-
-
-
-
-
-
-
-
-
-
Fair Value
Level 2
$’000
11,714
105
-
11,819
-
-
-
-
238
-
238
-
-
-
Level 31
$’000
-
-
60,148
60,148
-
-
-
-
-
-
-
-
-
-
Total
$’000
15,645
105
60,148
75,898
-
-
-
-
238
-
238
-
-
-
55
Bell Financial GroupAnnual Report 2021
NOTES TO THE FINANCIAL STATEMENTS continued
For the year ended 31 December 2021
31. Leases
The Group has entered into commercial property leases for its office accommodation. These leases have a remaining life of up
to 10 years. The Group has no other capital or lease commitments.
Consolidated
2021
$’000
16,122
(8,286)
4,281
62
12,179
2020
$’000
22,801
(8,370)
1,783
(92)
16,122
Consolidated
2021
$’000
22,357
987
4,298
(11,414)
47
16,275
2020
$’000
30,568
1,303
1,784
(11,200)
(98)
22,357
Consolidated
2021
$’000
8,286
987
1,810
11,083
2020
$’000
8,370
1,303
1,919
11,592
Consolidated
2021
$’000
(11,414)
2020
$’000
(11,200)
Right-of-use assets
Balance at 1 January
Depreciation charge for the year
Additions to right-of-use assets
Effect of movements in exchange rates
Balance at 31 December
Lease Liabilities
Balance at 1 January
Interest on lease liabilities for the year
Addition to lease liabilities
Rent payments
Effect of movements in exchange rates
Balance at 31 December
Amounts recognised in profit or loss
Depreciation on right-of-use assets
Interest on lease liabilities
Expenses relating to short-term leases
Amounts recognised in statements of cash flows
Total cash outflows for lease
56
Bell Financial GroupAnnual Report 2021 32. Parent entity disclosures
As at, and throughout the financial year ending 31 December 2021, the parent company of the Group was Bell Financial Group Ltd.
Consolidated
Results of the parent entity
Profit for the year
Total comprehensive income for the year
Financial position of parent entity at year end
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
Total equity of the parent entity comprising of:
Contributed equity
Reserves
Retained earnings / (losses)
Total equity
2021
$’000
35,040
35,040
12,121
222,374
234,495
47,409
47,409
204,237
(1,267)
(15,884)
187,086
2020
$’000
26,189
26,189
16,149
217,724
233,873
45,277
45,277
204,237
-
(15,641)
188,596
There are currently no complaints or claims made against the parent entity.
Parent entity contingent liabilities
The Directors are of the opinion that apart from that already provided for in the financial statements, no further provisions are
required in respect of any matters, as it is not probable that a future sacrifice of economic benefits will be required or the amount
is not capable of reliable measurement.
33. Related parties
The following were key management personnel of the Group at any time during the reporting period:
Executive Directors
A Provan
Senior Executives
L Bell
A Bell
R Fell
D Davenport
Non-Executive Directors
C Coleman
G Cubbin
B Wilson AO
C Feldmanis
Key management personnel compensation
The key management personnel compensation comprised:
Short-term employee benefits
Other long-term benefits
Post-employment benefits
Termination benefits
Share-based payments
Consolidated
2021
3,167,739
59,191
143,405
-
63,700
3,434,035
2020
3,525,980
29,961
131,379
-
59,500
3,746,820
57
Bell Financial GroupAnnual Report 2021 NOTES TO THE FINANCIAL STATEMENTS continued
For the year ended 31 December 2021
33. Related parties continued
Loans to key management personnel and their related parties
Details regarding loans outstanding at the reporting date to key management personnel and their related parties at any time in
the reporting period, are as follows:
Total for key management personnel 2021
Total for key management personnel 2020
Total for other related parties 2021
Total for other related parties 2020
Total for key management personnel
and their related parties 2021
Total for key management personnel
and their related parties 2020
Opening
balance
$
1,896,810
2,273,518
-
-
Interest paid
and payable in
the reporting
period
$
52,649
67,056
-
-
Number of
loans in
Group at
31 December1
28
21
-
-
Closing
balance
$
2,020,423
1,896,810
-
-
1,896,810
2,020,423
52,649
2,273,518
1,896,810
67,056
28
21
1. Number in Group includes KMP and other related parties with loans at any time during the year.
Interest is payable at prevailing market rates on all loans to key management persons and their related entities. These rates
are available to all clients and may vary marginally depending on individual negotiations. The principal amounts are repayable
per terms agreed on an individual basis. Interest received on the loans totalled $52,649 (2020: $67,056). No amounts have been
written-down or recorded as allowances for impairment, as the balances are considered fully collectable.
Movements in shares 2021
The movement during the reporting period in the number of ordinary shares in Bell Financial Group Ltd held, directly, indirectly
or beneficially, by each Director and key management person, including their related parties, is as follows:
Directors
A Provan2
C Coleman3
G Cubbin
B Wilson AO
C Feldmanis
Senior Executives
LM Bell2
AG Bell2
R Fell
D Davenport
Held at
1 January 2021
Purchases
Received
on exercise
of options
43,757,863
2,176,740
216,000
1,200,000
50,000
43,027,092
32,523,972
900,000
263,039
-
-
-
-
-
115,732
30,000
-
35,000
-
-
-
-
-
-
-
-
-
Held at
31 December
2021
43,757,863
280,000
216,000
1,200,000
50,000
Sales
-
(1,896,740)
-
-
-
-
-
-
-
43,142,824
32,553,972
900,000
298,039
2. The number of shares held by Alastair Provan, Lewis Bell and Andrew Bell includes those held indirectly through Bell Group Holdings Pty Limited and
Bell Securities Pty Ltd.
3 Craig Coleman retired from the board on the 17 February 2021
58
Bell Financial GroupAnnual Report 2021 Movements in shares 2020
Directors
A Provan2
C Coleman
G Cubbin
B Wilson AO
C Feldmanis
Senior Executives
LM Bell2
AG Bell2
R Fell
D Davenport
Held at
1 January 2020
Purchases
Received on
exercise of
options
Held at
31 December
2020
Sales
43,457,863
2,176,740
216,000
1,200,000
-
42,723,555
32,303,972
875,000
228,039
300,000
-
-
-
50,000
303,537
220,000
25,000
35,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
43,757,863
2,176,740
216,000
1,200,000
50,000
43,027,092
32,523,972
900,000
263,039
2. The number of shares held by Alastair Provan, Lewis Bell and Andrew Bell includes those held indirectly through Bell Group Holdings Pty Limited and
Bell Securities Pty Ltd.
Other key management personnel transactions
There are no other transactions with key management persons or their related parties other than those that have been disclosed
in this report.
Ultimate parent
Bell Group Holdings Pty Ltd is the ultimate parent company of Bell Financial Group Ltd. There are no outstanding amounts owed
by or to the ultimate parent entity at 31 December 2021 (2020: nil). There is no interest receivable or payable at 31 December 2021
(2020: nil).
Subsidiaries
The table below outlines loans made by the Company to wholly owned subsidiaries.
Subsidiary
Bell Potter Platforms Pty Ltd1
Third Party Platform Pty Limited1
Bell Potter Capital Limited2
Bell Potter (US) Holdings Inc1
Bell Potter Securities (US) LLC
2021
$
2020
$
686
90,218
8,286,530
1,945,473
-
10,322,907
691
230,803
8,098,527
1,940,125
1,912
10,272,058
1. Loan is interest free, unsecured and has no fixed term.
2. The loan from the parent entity to Bell Potter Capital Limited represents a subordinated loan that attracts interest at 1.60% per annum
(2020: 1.82% per annum).
Loans made by wholly owned subsidiaries to the Company: $31,496,711 (2020: $21,023,657). Loan is interest free, unsecured and
has no fixed term.
During the course of the financial year subsidiaries conducted transactions with each other on terms equivalent to those on an
arm’s length basis. They are fully eliminated on consolidation. As at 31 December 2021, all outstanding amounts are considered
fully collectable.
59
Bell Financial GroupAnnual Report 2021
NOTES TO THE FINANCIAL STATEMENTS continued
For the year ended 31 December 2021
34. Group entities
Bell Financial Group Ltd
Significant subsidiaries
Bell Potter Securities Limited
Bell Potter Capital Limited
Third Party Platform Pty Ltd
Bell Potter Securities Limited (UK)
Bell Potter Securities (HK) Limited
Bell Potter (US) Holdings Inc
Incorporation
Australia
Australia
Australia
United Kingdom
Hong Kong
United States
Consolidated
Interest
2021
2020
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
35. Guarantees
From time to time Bell Financial has provided financial guarantees in the ordinary course of business which amount
to $8.3m (2020: $7.0m) and are not recorded in the Statement of Financial Position as at 31 December 2021.
36. Contingent liabilities and contingent assets
The Company has agreed to indemnify its wholly owned subsidiary, Bell Potter Securities Limited, in the event that any contingent
liabilities of Bell Potter Securities Limited results in a loss.
Contingent liabilities of the Company exist in relation to claims and/or possible claims including regulatory matters which, at
the date of signing these accounts, have not been resolved. An assessment of the likely loss to the Company has been made in
respect of the identified claims, on a claim by claim basis, and specific provision has been made where appropriate. The Company
does not consider that the outcome of any other current proceedings, either individually or in aggregate, is likely to materially
affect its operations or financial position.
37. Subsequent events
Except as noted below, there were no significant events from 31 December 2021 to the date of this report.
Final Dividend
On 16 February 2022, the Directors resolved to pay a fully franked final dividend of 6.5 cents per share.
38. Auditor’s remuneration
Audit services
Auditor of the Company
KPMG:
Audit and review of financial reports
Total remuneration for audit services
Audit related services
Auditor of the Company
KPMG Australia:
Other regulatory audit services
Total remuneration for audit related services
Non-audit related services
Tax services
60
Consolidated
2021
$
2020
$
389,036
389,036
366,490
366,490
109,180
109,180
30,285
528,501
106,000
106,000
29,405
501,895
Bell Financial GroupAnnual Report 2021 DIRECTORS’ DECLARATION
1. In the opinion of the Directors of Bell Financial Group Limited (‘the Company’):
(a) the Consolidated Financial Statements and notes that are set out on pages 18 to 60 and the Remuneration Report on
pages 12 to 16 in the Directors’ Report, are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 31 December 2021 and of its performance, for the
financial year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001;
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable.
2. The Directors have been given the declarations required by section 295A of the Corporations Act 2001 from the Chief Executive
Officer (who is the Executive Chairman) and the Chief Financial Officer for the financial year ended 31 December 2021.
Note 1(a) of the Consolidated Financial Statements includes a statement of compliance with International Financial Reporting
Standards.
This declaration is made on 16 February 2022 in accordance with a resolution of the Directors:
Alastair Provan
Executive Chairman
16 February 2022
61
Bell Financial GroupAnnual Report 2021 INDEPENDENT AUDITOR’S REPORT
Independent Auditor’s Report
To the shareholders of Bell Financial Group Ltd
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
Bell Financial Group Ltd (the Group).
In our opinion, the accompanying Financial
Report of the Group is in accordance with the
Corporations Act 2001, including:
•
•
giving a true and fair view of the
Group’s financial position as at 31
December 2021 and of its financial
performance for the year ended on that
date; and
complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
Basis for opinion
The Financial Report comprises:
• Consolidated Statement of Financial Position as at 31
December 2021;
• Consolidated Statement of Profit or Loss, Consolidated
Statement of Comprehensive Income, Consolidated
Statement of Changes in Equity, and Consolidated
Statement of Cash Flows for the year then ended
• Notes including a summary of significant accounting
policies; and
• Directors’ Declaration.
The Group consists of the Group and the entities it
controlled at the year-end or from time to time during the
financial year.
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit
of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the Financial Report in Australia. We
have fulfilled our other ethical responsibilities in accordance with these requirements.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
62
Bell Financial GroupAnnual Report 2021
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.
This matter was addressed in the context of our audit of the Financial Report as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on this matter.
Valuation of Goodwill ($130,413,000)
Refer to Notes 2 and 17 to the Financial Report
The key audit matter
How the matter was addressed in our audit
A key audit matter for us was the Group’s annual
testing of goodwill, particularly the Retail CGU, for
impairment. Certain conditions impacting the
Group increased the judgement applied by us
when evaluating the evidence available.
We focused on the significant forward-looking
assumptions the Group applied in their value in
use models, including:
•
•
Forecast cash flows – the Group has continued
to experience competitive market conditions
and volatility in the global investment market.
This increases the risk of inaccurate forecasts
for us to consider and goodwill being impaired.
Forecast growth rates and terminal value
multiples – in addition to the uncertainties
described above, the Group’s models are
sensitive to small unfavourable changes in
these assumptions, reducing available
headroom. This drives additional audit effort
specific to their feasibility and consistency of
application to the Group’s strategy.
• Discount rates - these are complicated in
nature and vary according to the conditions
and environment the specific Cash Generating
Unit (CGU) is subject to from time to time. The
Group’s modelling is sensitive to small
changes in the discount rate.
The Group uses a complex model to perform their
annual testing of goodwill for impairment. The
model uses historical performance adjusted for a
range of internal and external sources as inputs to
the assumptions. Certain CGU’s of the Group have
not met prior
instances
historically, increasing our audit effort in assessing
the reliability of current forecasts for each CGU.
in some
forecasts
Working with our valuation specialists, our procedures
included the following:
• We considered the appropriateness of the value in
use models applied by the Group to perform the
annual test of goodwill for impairment against the
requirements of the accounting standards.
• We assessed the integrity of the value in use
models used, including the accuracy of the
underlying formulas.
• We assessed the accuracy of previous Group
forecasts to inform our evaluation of forecasts
incorporated in the models. We noted previous
trends where forecasts for certain CGUs were not
achieved and how they impacted the business, for
use in our testing.
• We considered the sensitivity of the models by
varying key assumptions, such as forecast growth
rates, terminal value multiples and discount rates,
within a reasonably possible range. We
considered the interdependencies of key
assumptions when performing the sensitivity
analysis and what the Group considers to be
reasonably possible. We did this to identify those
CGUs at higher risk of impairment and to focus
our further procedures.
• We challenged the Group’s significant forecast
cashflows, growth rate assumptions and terminal
value multiples considering competitive market
conditions and the continuing volatility in the
global investment market. We applied increased
scepticism to forecasts in the CGU’s where
previous forecasts were not achieved. We used
our knowledge of the Group, the Group’s past and
recent performance, business and customers, and
our industry experience. We further assessed the
63
Bell Financial GroupAnnual Report 2021
INDEPENDENT AUDITOR’S REPORT continued
using
Complex modelling,
forward-looking
assumptions tends to be prone to greater risk for
potential bias, error and inconsistent application.
These conditions necessitate additional scrutiny by
us, in particular to address the objectivity of
sources used
their
consistent application.
for assumptions, and
We involved valuation specialists to supplement
our senior audit team members in assessing this
key audit matter.
Group’s forecast cashflows and terminal value
multiples by comparing the Group’s current and
forecast net profit after tax valuation multiple to
publicly available data of comparable companies.
• We checked the consistency of the growth rate
assumptions to the past performance of the
Group, and our experience regarding the feasibility
of these in the industry in which they operate and
compared the forecast cash flows contained in the
value in use model to those contained within the
Board reviewed goodwill impairment assessment
memorandum.
• We independently developed a discount rate
range considered comparable using publicly
available market data for comparable entities to
the Group and the industry it operates in.
• We assessed the disclosures in the Financial
Report using our understanding obtained from our
testing and against the requirements of the
accounting standards.
Other Information
Other Information is financial and non-financial information in Bell Financial Group Ltd’s annual reporting
which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible
for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or
our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information,
and based on the work we have performed on the Other Information that we obtained prior to the date of
this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
•
•
•
preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting
Standards and the Corporations Act 2001;
implementing necessary internal control to enable the preparation of a Financial Report that gives a
true and fair view and is free from material misstatement, whether due to fraud or error; and
assessing the Group and Company’s ability to continue as a going concern and whether the use of the
going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless they either intend to
64
Bell Financial GroupAnnual Report 2021
liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
•
to obtain reasonable assurance about whether the Financial Report as a whole is free from material
misstatement, whether due to fraud or error; and
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of the
Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf.
This description forms part of our Auditor’s Report.
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report of
Bell Financial Group Ltd for the year ended
31 December 2021, complies with Section
300A of the Corporations Act 2001.
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration Report in
accordance with Section 300A of the Corporations Act
2001.
Our responsibilities
We have audited the Remuneration Report included in
pages 12 to 16 of the Directors’ report for the year ended
31 December 2021.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
KPMG
Chris Wooden
Partner
Melbourne
16 February 2022
65
Bell Financial GroupAnnual Report 2021 SHAREHOLDER INFORMATION
The following information is current as at 31 January 2022.
Distribution of shares
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Number of
shareholders
576
1,098
749
1,619
257
4,299
Number of
shares
306,760
3,247,982
5,874,221
51,469,052
259,845,933
320,743,948
% of issued
capital
0.10
1.01
1.83
16.05
81.01
100.00
There were 145 shareholders who held less than a marketable parcel (less than $500 of shares).
Twenty largest shareholders
Rank Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
BELL GROUP HOLDINGS PTY LIMITED
MR JAMES GORDON MOFFATT
CITICORP NOMINEES PTY LIMITED
BELL POTTER NOMINEES LTD
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