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2023 Report16 February 2023
ASX Market Announcements Office
ASX Limited
20 Bridge Street
Sydney NSW 2000
RESULTS FOR ANNOUNCEMENT TO THE MARKET
FOR THE FULL YEAR ENDED 31 DECEMBER 2022
In accordance with the Listing Rules, please find attached for immediate release:
1.
2.
Appendix 4E; and
2022 Annual Report.
For more information, contact:
Cindy-Jane Lee
General Counsel & Company Secretary,
cjlee@bellfg.com.au
+61 3 9235 1961
This announcement was authorised for release by the Bell Financial Group Board.
Appendix 4E (Preliminary final report)
Results for announcement to the market
ASX Listing Rule 4.3A
Bell Financial Group Limited ABN 59 083 194 763 and its subsidiaries
Reporting period:
Previous corresponding period:
1 January 2022 to 31 December 2022
1 January 2021 to 31 December 2021
Year ended
31 December 2022
$ ’000
Year ended
31 December 2021
$ ’000
Revenue from ordinary activities
Profit from ordinary activities after tax attributable to
shareholders
237,115
25,687
292,146
Down 18.7%
44,118
Down 41.8%
Net tangible assets per ordinary shares
$0.28
$0.29
Dividend per ordinary share
2022 Interim dividend per share
2022 Final dividend per share (declared)
Amount per share
2.5 cents
4.5 cents
Record date
26 August 2022
2 March 2023
Payment date
6 September 2022
15 March 2023
Additional Appendix 4E disclosure requirements can be found in the 2022 Annual Report lodged separately with this
document. This report is based on the consolidated financial statements which have been audited by KPMG.
Annual Report 2022
VALE COLIN MORTON BELL (OAM)
On 14 March 2022, the founder of our company Colin Bell sadly passed
away. Our Chairman Alastair Provan sent the following email to all
Bell Financial Group staff.
I am very sad to announce that following a long and debilitating
illness, Colin passed away this afternoon.
As the founder of our company Colin’s enthusiasm, passion and
vision has been, for the last 50 years, the driving force behind the
growth and success of what started out as Option Investments,
became C, A & L Bell Commodities Corporation Pty Ltd, and
is now Bell Financial Group.
The same passion, tenacity, and long-term belief has also been
behind the success of Bell Asset Management.
In addition to financial and commodities markets Colin’s other
great love was agriculture. As with BFG, over the last 30 years,
Colin has almost single-handedly been responsible for putting
together and structuring one of the finest large-scale mixed farming
enterprises in the country, Australian Food & Agriculture Company.
With Colin’s passing we lose a great friend, colleague, and leader.
His extraordinary presence, business acumen, friendship, and
unique ability to blend unwavering drive, sense of fair play and
fun will be very sorely missed.
Our thoughts are with all of Colin’s family.
Alastair
CONTENTS
Overview
01 Highlights
Performance
02 Operating and Financial Review
08 Directors’ Report
19 Lead Auditor’s Independence Declaration
Financial Statements
20 Statement of Profit or Loss
21 Statement of Comprehensive Income
22 Statement of Financial Position
23 Statement of Changes in Equity
24 Statement of Cash Flows
25 Notes to the Financial Statements
64 Directors’ Declaration
65
Independent Auditor’s Report
Other Information
69 Shareholder Information
71 Directory
Bell Financial Group Ltd ABN 59 083 194 763
Bell Financial Group Ltd
is an Australian-based
provider of full service and
online broking, corporate
finance and financial
advisory services to private,
institutional and corporate
clients. Bell Financial Group
has over 750 employees,
operates across 11 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
Geelong
Hobart
Melbourne
Mornington
Noosa
Orange
Perth
Sydney
HIGHLIGHTS
Revenue
$237.5m
Profit After Tax
$25.7m
Funds Under Advice
$72.8b
18.7% decrease
on 2021
41.8% decrease
on 2021
4.1% decrease
on 2021
Earnings Per Share
Dividend Per Share
Return on Equity
8.0¢ share
42.0% decrease
on 2021
7.0¢ share
57.1% decrease
on 2021
15.7%
40.4% decrease
on 2021
Bell Potter Securities Limited
Retail and Institutional Equities
International Equities
Portfolio Administration
Commodities and Foreign Exchange
Superannuation
Fixed Income
Bell Potter Capital Limited
BELL POTTER CAPITAL
Bell Client Funds at Call
Margin Lending
Structured Products
Third Party Platform Pty Ltd
Retail Online Broking
Wholesale Online Broking
Institutional Online Broking
01
01
COMMODITIESFXPOTTER ONLINE Bell Financial GroupAnnual Report 2022 OPERATING AND FINANCIAL REVIEW
Retail and Institutional Broking
revenues were understandably lower,
a direct reflection of the prevailing
market conditions.
Equity Capital Markets was the area
where the market downturn had the
greatest impact. Domestic and global
Equity Capital Markets activity was
down between 50 – 60%, and we were
not immune. However, we successfully
completed 85 transactions throughout
the year, raising $1.9 billion in new
equity capital. And we improved our
market position from 10th (2021) to 6th
(2022) in the Australian Equity Capital
Market League tables according to the
Refinitiv 2022 Global Equity Capital
Markets review.
In addition to the various challenges
encountered during the year, in
February 2022 we received notices from
AUSTRAC for Bell Potter Securities, Bell
Potter Capital and Third Party Platform
requiring the appointment of an external
auditor to assess compliance with
our obligations under the Anti-Money
Laundering and Counter-Terrorism
Finance Act 2006 (Cth) (AML/CTF Act).
The auditor’s reports were completed
on time and lodged with AUSTRAC in
October. This has been a major exercise
for most of the year in terms of staff
time and cost, and we hope the matter
will conclude soon.
As I mentioned earlier, given the various
headwinds throughout the year I think
the Group has produced a very credible
result which enables us to pay a final
fully franked dividend of 4.5 cents per
share, taking the full year fully franked
dividend to 7 cents per share – a gross
dividend yield of 10.2%. The Group
remains well-capitalised with $110
million in Group cash, is well-positioned
to continue to invest in our existing
businesses and to take advantage
of opportunities that may arise in
the future.
REVENUE ($M)
350
300
250
200
220.0
299.3
292.1
254.5
237.5
150
100
50
0
2018
2019
2020
2021
2022
2022 revenue was down 18.7% on 2021,
due in the main to lower Equity Capital
Markets revenue, and to a reduction in
equities execution revenue.
PROFIT AFTER TAX ($M)
50
45
40
35
30
25
20
15
10
5
0
46.7
44.1
32.4
24.4
25.7
2018
2019
2020
2021
2022
2022 Profit after Tax was $25.7 million,
down 41.8% on 2021.
EARNINGS PER SHARE (CENTS)
16
14
12
10
8
6
4
2
0
14.6
13.8
10.2
8.4
8.0
2018
2019
2020
2021
2022
2022 Earnings Per Share (EPS)
of 8.0 cents.
1. GROUP
2022 was a difficult year on many fronts.
There was a lot going on. Spiralling
global inflation, higher interest rates
combined with a chronic labour
shortage resulted in significant upward
pressure on costs.
In addition, unprecedented volatility
in the energy markets, the conflict
between Russia and Ukraine, strained
relations with China, and a change in
the Australian Federal Government, all
contributed to a decline in the Australian
equity market and an across the board
drop in Equity Capital Market fee income.
Against this background I am pleased
to report that the Group recorded, what
I regard as, a very credible full year
profit of $25.7 million after tax.
All our business divisions were profitable.
Our Technology & Platforms and
Products & Services businesses
continue to grow and make increased
contributions to Group earnings.
Combined revenues across these
business units of $72.3 million and
after tax earnings of $17.3 million
represent 31% of Group revenue and
67% of Group profit for the year. A strong
endorsement of our ongoing investment
and commitment to these growth areas
of the Group.
Third Party Platform (TPP), our
online broking and third party clearing
business, now provides clearing
services for 90% of Bell Potter
Securities’ Australian secondary market
business. TPP has achieved a significant
milestone in successfully completing
the migration of our first external Third
Party Clearing client, Macquarie Equities
Limited, in the middle of the year.
TPP produced a record profit for the
year and continues to be a key business
focus, one which we will continue to
expand and grow.
Bell Potter Capital, our Margin Lending,
Structured Products, and Bell Financial
Trust business had another strong year
of revenue growth, and also produced a
record profit for the year. The business
was assisted by the current interest
rate environment.
02
Bell Financial GroupAnnual Report 2022 RETURN ON EQUITY
FUNDS UNDER ADVICE ($B)
CAGR
+11.7% (5-YR)
75.9
72.8
63.9
58.4
46.8
2018
2019
2020
2021
2022
80
70
60
50
40
30
20
10
0
Funds under Advice (FUA) at 31
December 2022 were $72.8 billion, down
4.1% down on December 2021.
The S&P / ASX200 index was down 5.5%
in 2022. Compound annual growth rate
over a 5-year period is 11.7%.
35%
30%
25%
20%
29.0%
26.4%
22.0%
15%
17.3%
15.7%
10%
5%
0%
2018
2019
2020
2021
2022
2022 Return on Equity (ROE) was 15.7%.
DIVIDENDS PAID ($M) AND
GROSS DIVIDEND YIELD (%)
$40
$35
$30
$25
$20
$22.3
$15
$10
11.8%
$5
$0
$35.3
$33.6
$25.6
$22.5
9.6%
8.2%
8.4%
10.2%
15%
10%
5%
0%
2018
2018
2019
2019
2020
2020
2021
2021
2022
2022
TECHNOLOGY & PLATFORMS
AND PRODUCTS & SERVICES
REVENUE BREAKDOWN ($M)
CAGR
+11.7% (5-YR)
67.7
27.8
61.5
24.3
15.6
18.4
14.8
3.7
3.1
2020
16.5
4.1
0.9
2021
52.9
17.9
15.2
12.9
3.7
3.2
2019
46.5
15.2
13.8
10.5
3.7
3.3
2018
75
70
65
60
55
50
45
40
35
30
25
20
15
10
5
0
72.3
30.4
17.6
19.6
4.0
0.8
2022
TPP Platform revenue
Portfolio Lending, client funds at call
& strucutured loan products
Super
Other
PAS
Growth in the Technology & Platforms
and Products & Services businesses
remains core to our strategy. In a
difficult year, revenue in this segment
grew 7%, representing 31% of total
Group revenue, and profit grew 13%
representing 67% of total Group profit.
Compound annual growth rates of 11.7%
and 15.5% respectively.
Dividends Paid ($M)
Gross Dividend Yield (%)
$22.5 million in fully franked dividends
were paid in 2022, representing a gross
dividend yield of 10.2% (based on the 31
December 2022 BFG share price).
BFG Share Price Movement: January 2017 – December 2022
200%
150%
100%
50%
0%
-50%
2 Jan 17
2 Jan 18
2 Jan 19
2 Jan 20
2 Jan 21
2 Jan 22
BFG Share Price ($A)
XJO (%)
BFG share price closed at $0.98 on 31 December 2022.
$2.00
$1.75
$1.50
$1.25
$1.00
$0.75
$0.50
03
Bell Financial GroupAnnual Report 2022 OPERATING AND FINANCIAL REVIEW CONTINUED
2. BROKING – RETAIL & INSTITUTIONAL
BELL POTTER SECURITIES (BPS)
RETAIL & INSTITUTIONAL
EQUITIES BROKERAGE and
COMMODITIES & FX REVENUE
($M)
140
120
110
100
90
80
70
60
50
40
30
20
10
0
117.2
115.9
101.4
106.5
76.6
73.2
85.2
85.4
18.4
9.8
2018
18.0
11.9
2019
20.5
11.5
2020
19.0
11.5
2021
103.3
74.0
16.1
13.2
2022
Commodities & FX
Institutional
Retail
Brokerage from the Retail and
Institutional desks and the Commodities
and FX desks was $103.3 million down
10.9% on 2021.
ECM AND SYNDICATION
REVENUE ($M)
PROFIT AFTER TAX ($M)
RETAIL & INSTITUTIONAL
BROKING
40
35
30
25
20
15
10
5
0
33.2
28.8
21.8
14.6
8.4
2018
2019
2020
2021
2022
$8.4 million profit after tax, down 70.8%
on 2021.
120
110
100
90
80
70
60
50
40
30
20
10
0
109.0
104.4
83.0
77.7
66.4
62.0
106.4
99.8
57.0
52.0
4.4
2018
5.3
2019
2.6
2020
4.6
2021
5.0
2022
Syndication
ECM
Equity Capital Markets revenue was
down 45.4% in 2022 in line with the
broader downturn in ECM market
activity. We improved our ranking from
10th in 2021, to 6th in 2022 for Australian
Equity and Equity related proceeds
raised according to the Refinitiv 2022
Global Equity Capital Markets review.
We executed 85 transactions raising
in excess of $1.9 billion in new equity
capital over the year.
04
Bell Financial GroupAnnual Report 2022
3. TECHNOLOGY & PLATFORMS
THIRD PARTY PLATFORM (TPP)
REVENUE ($M)
35
30
25
20
15
10
5
0
15.2
2.9
7.6
4.7
2018
CAGR
+18.9% (5-YR)
3.4
24.3
6.1
27.8
0.8
6.0
2.6
10.5
11.0
30.4
5.5
5.1
1.6
11.7
7.7
7.4
6.5
18.0
3.4
8.6
6.0
2019
2020
2021
2022
Desktop Broker
Bell Direct
White Label
Bell Direct Advantage
Third Party Clearing
$30.4 million revenue, a 9.4% increase
on 2021. A 5-year compound annual
growth rate of 18.9%.
TPP operates six distinct businesses:
• Bell Direct – our proprietary online
retail broking business.
• Bell Direct Advantage - General advice
High Net Wealth desk.
• Desktop Broker – provides execution
and clearing services to the Financial
Planning industry.
• White Label Online Broking – TPP’s
turn-key online broking solution.
Current clients include Macquarie,
HSBC, and Bell Potter Online.
• Third Party Clearing – TPP is an
ASX General Participant, enabling
it to provide Third Party Clearing
services to the Australian
stockbroking industry.
• Technology – Continuous development
of proprietary software applications
for TPP and the wider Bell Financial
Group.
PROFIT AFTER TAX ($M)
TECHNOLOGY & PLATFORMS
TPP CLIENT ACCOUNTS (‘000)
7
6
5
4
3
2
1
0
CAGR
+40.3% (5-YR)
6.2
4.8
4.2
2.5
1.6
2018
2019
2020
2021
2022
280
240
200
160
120
80
40
0
CAGR
+12.1% (5-YR)
207
253
234
176
160
2018
2019
2020
2021
2022
$6.2 million net profit after tax, a 29.2%
increase on 2021. A 5-year compound
annual growth rate of 40.3%.
TPP client numbers increased 8.1% in
2022, to more than 253,000. A 5-year
compound annual growth rate of 12.1%.
05
Bell Financial GroupAnnual Report 2022 OPERATING AND FINANCIAL REVIEW CONTINUED
4. PRODUCTS & SERVICES
BELL POTTER CAPITAL (BPC)
REVENUE ($M)
PROFIT AFTER TAX ($M)
PRODUCTS & SERVICES
LOAN BOOK ($M)
45
40
35
30
25
20
15
10
5
0
CAGR
+7.59% (5-YR)
31.3
17.5
10.5
3.3
2018
35.0
18.9
12.9
3.2
2019
39.9
37.2
19.3
22.5
14.8
3.1
2020
16.5
0.9
2021
41.9
21.5
19.6
0.8
2022
PAS & Super Solutions
Portfolio Lending & Client Funds At Call
Other
Bell Potter Capital (BPC) revenue
increased 5% year on year to $41.9
million. A 5-year compound annual
growth rate of 7.6%.
12
10
8
6
4
2
0
CAGR
+8.1% (5-YR)
9.3
5.2
3.1
1.1
2020
8.1
8.2
4.7
2.2
1.2
5.2
1.8
1.1
2018
2019
PAS & Super Solutions
10.5
11.1
5.7
6.2
4.1
0.3
2021
5.0
0.3
2022
Portfolio Lending & Client Funds At Call
Other
$11.1 million net profit after tax, a 5.4%
increase on 2021. A 5-year compound
annual growth rate of 8.1%.
600
500
400
300
200
100
0
CAGR
+13.8% (5-YR)
545.0
534.0
496.0
470.0
296.0
2018
2019
2020
2021
2022
The Margin Loan book decreased 7.1%
to $496 million in 2022 reflecting a
reduction in risk appetite given the
uncertainty in markets. Compound
annual growth rate over a 5-year
period is 13.8%.
BELL FINANCIAL TRUST ($M)
CLIENT FUNDS AT CALL
PORTFOLIO ADMINISTRATION &
SUPERANNUATION ASSETS ($B)
500
450
400
350
300
250
200
150
100
50
0
CAGR
+13.7% (5-YR)
437.0
382.0
481.0
461.0
276.0
2018
2019
2020
2021
2022
5.0
4.0
3.0
2.0
1.0
0.0
CAGR
+6.9% (5-YR)
4.1
4.2
4.5
4.2
3.2
2018
2019
2020
2021
2022
Client funds at call closed the year at
$461 million, down 4.1% on the prior
year reflecting the downturn in overall
activity in equities markets. Compound
annual growth rate over a 5-year period
is 13.7%.
Portfolio Administration Service
and Superannuation product assets
decreased 6.7% in 2022. Compound
annual growth rate over a 5-year
period is 6.9%.
06
Bell Financial GroupAnnual Report 2022 5. GROWTH THROUGH INVESTMENT IN PROPRIETARY TECHNOLOGY, PLATFORMS,
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
• Australian Equities Research
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.
In November 2021 we created a new
position, Chief Technology Officer, whose
role is to bring together the various IT,
Programming and Development teams
we have across Bell Potter Securities,
Bell Potter Capital and Third Party
Platform to form one strong, cohesive
unit with responsibility for maintaining
our existing platforms and developing
enhanced capability for the Group.
We now have a team of more than
100 specialist IT professionals across
the Group.
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
A good start to the year with Australian
equities up 6% in January. Indications
the current interest rate and inflation
cycles may be close to peaking and
improving relations with China are
positive signs.
The final migration of Bell Potter
Securities’ clients to Third Party
Platform Clearing should occur
in the first half of 2023 and we will
look to expand our Third Party
Clearing function.
From our perspective we continue to
focus and invest in the strategies that
have proved successful while continuing
to look for new growth opportunities.
Our Technology and Platforms and
Products & Services businesses are
growing strongly and now contribute
meaningfully to our revenue and
earnings. We expect this trend will
continue in 2023 and in the years ahead.
We have a strong Equity Capital
Markets pipeline with several
transactions already completed.
Domestic secondary market
transaction activity has also improved.
Again, all our business units remain
profitable, and we look forward to
another solid performance by Bell
Financial Group in 2023.
I would like to thank our staff, our
clients, and our shareholders for their
continued support and contribution to
the ongoing success of the Group.
Alastair Provan
Executive Chairman
07
Bell Financial GroupAnnual Report 2022 DIRECTORS’ REPORT
For the year ended 31 December 2022
The Directors of Bell Financial Group Limited (Bell Financial Group) present their report with the financial report on the
consolidated entity consisting of Bell Financial Group and its controlled entities (the Group) for the financial year ended
31 December 2022.
Board of Directors
The Directors of Bell Financial
Group are stated with their
qualifications, experience
and special responsibilities.
Each Director held office
for the entire year.
ALASTAIR PROVAN
Mr Provan is the Executive
Chairman of Bell Financial
Group 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 Group 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.
GRAHAM CUBBIN
BEcon (Hons), FAICD
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,
White Energy Company Limited
(February 2010-present)
Non-Executive Director,
McPherson’s Limited
(September 2010-February 2022)
Non-Executive Director,
WPP AUNZ Limited
(May 2008-May 2021)
08
Bell Financial GroupAnnual Report 2022 BRIAN WILSON AO
CHRISTINE FELDMANIS
MComm (Hons), Hon DUniv
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.
BComm, MAppFin, SFFin, TFASFA,
FAICD, CPA, CSA, AGIA, JP
Ms Feldmanis is a Non-Executive
Director. She is also a member of
the Group Risk and Audit Committee.
Ms Feldmanis 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, United Malt
Group Ltd (January 2023-present)
Non-Executive Director, Perpetual
Equity Investment Company Ltd
(September 2014-October 2020)
09
Bell Financial GroupAnnual Report 2022 DIRECTORS’ REPORT CONTINUED
For the year ended 31 December 2022
Principal activities
The principal activities of Group during the year were the provision of full service broking, online broking, corporate finance
and financial advisory services to private, institutional and corporate clients, and the development of proprietary technology,
platforms, products and services. With over 750 employees, the Group operates across 11 offices in Australia and has offices
in New York, London, Hong Kong and Kuala Lumpur. In the opinion of the Directors, there were no significant changes to the
principal activities of the Group during the year that are not otherwise disclosed in this report.
Operating and financial review
Please refer to pages 2 to 7 of this report for the following in respect of the Group:
• a review of operations during the financial year and the results of those operations,
• likely developments in the Group’s operations in future financial years and the expected results of those operations,
• comments on the financial position, and
• comments on business strategies and prospects for future financial years.
In respect of likely developments, business strategies and prospects for future financial years, material which if included would
be likely to result in unreasonable prejudice to the Group, has been omitted.
Dividends
Subsequent to the year ended 31 December 2022, the Directors have resolved to pay a fully franked final dividend of 4.5 cents
per share. This dividend is payable on 15 March 2023.
Dividends paid to shareholders during the financial year ended 31 December 2022 were as follows:
Dividend
2022
Interim 2022 ordinary
Final 2021 ordinary
2021
Interim 2021 ordinary
Final 2020 ordinary
Per share
2.5 cents
6.5 cents
4.5 cents
6.5 cents
Total
$’000
8,019
20,848
14,433
20,848
Fully
Franked
Date of payment
Yes
Yes
Yes
Yes
6 September 2022
16 March 2022
26 August 2021
17 March 2021
State of affairs
On 16 February 2022, Bell Financial Group announced that three operating subsidiaries, Bell Potter Securities Limited, Bell Potter
Capital Limited and Third Party Platform Pty Ltd, received notices from AUSTRAC requiring the appointment of an external auditor
to carry out an audit of those entities’ compliance with particular aspects of their obligations under the Anti‑Money Laundering
and Counter‑Terrorism Financing Act 2006 (Cth) (AML/CTF Act).
Bell Financial Group announced on 25 October 2022 that we had received a report from the external auditor for each entity and
that those reports had been provided to AUSTRAC in accordance with the notice requirements. Each of the reports related to a
defined period ending on 16 February 2022. Since then, Bell Financial Group has made a number of refinements to our approach
to AML/CTF compliance, including updates to the subsidiaries’ risk assessments and their AML/CTF program.
At this stage it is uncertain whether AUSTRAC will take any further action arising from the audit, or the nature of the action it may take
if it decides to do so. Accordingly, the potential outcome and total costs and exposure in connection with the audit remain uncertain.
There were no other significant changes in the Group’s state of affairs during the year that are not otherwise disclosed in this report.
Board and Board Committee meetings and attendance
The number of meetings of the Board of Directors (the Board) and the Group Risk and Audit Committee (GRAC) held during the
year and each Director’s attendance at those meetings is stated below:
Director
Alastair Provan
Graham Cubbin
Brian Wilson AO
Christine Feldmanis
Board
Held
8
8
8
8
Attended
8
8
8
8
GRAC
Held
–
4
4
4
Attended
–
4
4
4
The Chairman may attend any GRAC meeting but is not a member of the GRAC.
10
Bell Financial GroupAnnual Report 2022 Directors’ shareholdings and other relevant interests
As at the date of this report, the Directors have the following relevant interests in Bell Financial Group ordinary shares:
Director
Alastair Provan1
Graham Cubbin
Brian Wilson AO
Christine Feldmanis
Fully paid
ordinary
shares
5,239,998
216,000
1,200,000
125,000
Deemed
relevant
interest
146,355,350
–
–
–
Total
151,595,348
216,000
1,200,000
125,000
1. Alastair Provan is deemed to have a relevant interest in the BFG ordinary shares held by Bell Group Holdings Pty Ltd (ACN 004 845 710), Bell Securities
Pty Ltd (ACN 006 465 498) and Bell Asset Management (Holdings) Pty Ltd (ACN 078 023 248) – 146,355,350 BFG ordinary shares.
As at the date of this report, Alastair Provan and his related parties hold three units in the Bell Financial Trust, a registered
scheme that is made available by a related body corporate of Bell Financial Group and Christine Feldmanis’s related party holds
one unit in the Bell Financial Trust.
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 Group, 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 Group recognises the importance of good corporate governance. As required under the ASX listing rules, Bell
Financial Group has a Corporate Governance Statement which has been lodged with the ASX, disclosing the extent to which it has
followed the recommendations set by the ASX Corporate Governance Council during the reporting period. A copy of the 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 Group has entered into a Deed of Access, Insurance and Indemnity with each Director. Under the Deed, Bell
Financial Group has agreed to indemnify the Director, to the maximum extent permitted by law, against certain liabilities and
legal costs.
Bell Financial Group maintains a directors’ and officers’ insurance policy that provides cover for the Directors, officers, company
secretaries and senior executives in the Group. The insurance policy prohibits disclosure of the premium payable under the policy
and the nature of the liabilities insured.
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
Amounts paid or payable to KPMG, the auditor of the Group, for non-audit services provided during the year ended
31 December 2022 totalled $31,104 (2021: $30,285). Further details are set out in Note 38 Auditor’s remuneration of the
financial report.
The Directors are satisfied, in accordance with the advice provided by the GRAC, that the provision of non-audit services during
the year by KPMG is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001
(Cth) and did not compromise the auditor independence requirements of the Corporations Act 2001 (Cth), for the following reasons:
• the non-audit services provided were 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.
11
Bell Financial GroupAnnual Report 2022 DIRECTORS’ REPORT CONTINUED
For the year ended 31 December 2022
Events after the end of the financial year
As at the date of this report, the Directors are not aware of any matter or circumstance that has arisen since 31 December 2022
that has significantly affected, or may significantly affect:
(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.
Remuneration Report (audited)
This Remuneration Report describes Bell Financial Group’s ‘Key Management Personnel’ (KMP) remuneration arrangements
as required by the Corporations Act 2001 (Cth).
1. KMP
Bell Financial Group's KMP during the reporting period were:
Directors
Alastair Provan
Graham Cubbin
Brian Wilson AO
Christine Feldmanis
Senior Executives
Lewis Bell
Andrew Bell
Dean Davenport
Rowan Fell
Executive Chairman
Independent Director
Independent Director
Non-Executive Director
Head of Compliance
Executive Director – Bell Potter Securities Ltd
Chief Financial Officer
Chief Executive Officer – Bell Potter Capital Ltd
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 Group 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
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
2022
$25,687
$0.98
8.0
$28,867
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 Group 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.
12
Bell Financial GroupAnnual Report 2022 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.
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 2022.
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 2022 DIRECTORS’ REPORT CONTINUED
For the year ended 31 December 2022
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
8.4 KMP remuneration
Details of the remuneration of each KMP are tabled below.
Directors’ fees
$
90,703
90,703
100,000
Superannuation
$
9,297
9,297
–
Total
$
100,000
100,000
100,000
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)
Salary & fees
$
Short‑term
STI cash
bonus
$
Non‑monetary
benefits
$
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
519,846
521,645
500,000
500,000
90,703
91,117
90,703
91,117
100,000
100,000
–
12,176
801,252
816,054
–
–
–
–
–
–
–
–
500,000
500,000
–
–
–
–
–
–
–
–
–
–
–
–
Total
1,019,846
1,021,645
90,703
91,117
90,703
91,117
100,000
100,000
–
12,176
1,301,252
1,316,054
1. Craig Coleman retired from the Board on 17 February 2021.
14
Post‑
employment
Superannuation
benefits
long term
benefits
payments
Other
Termination
Share‑based
Proportion of
remuneration
Value of options
performance
as proportion of
related
remuneration
$
24,430
22,631
9,297
8,883
9,297
8,883
–
–
–
1,157
43,024
41,555
$
–
–
–
–
–
–
–
–
–
–
–
–
$
–
–
–
–
–
–
–
–
–
–
–
–
$
–
–
–
–
–
–
–
–
–
–
–
–
Total
$
1,044,276
1,044,276
100,000
100,000
100,000
100,000
100,000
100,000
–
13,333
1,344,276
1,357,609
%
48%
48%
0%
0%
0%
0%
0%
0%
0%
0%
37%
37%
%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Bell Financial GroupAnnual Report 2022 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
8.4 KMP remuneration
Details of the remuneration of each KMP are tabled below.
Directors’ fees
Superannuation
$
90,703
90,703
100,000
9,297
9,297
$
–
Total
$
100,000
100,000
100,000
Short‑term
STI cash
Non‑monetary
benefits
Salary & fees
$
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)
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
519,846
521,645
90,703
91,117
90,703
91,117
100,000
100,000
–
12,176
801,252
816,054
1. Craig Coleman retired from the Board on 17 February 2021.
bonus
$
500,000
500,000
–
–
–
–
–
–
–
–
500,000
500,000
$
–
–
–
–
–
–
–
–
–
–
–
–
Total
1,019,846
1,021,645
90,703
91,117
90,703
91,117
100,000
100,000
–
12,176
1,301,252
1,316,054
Post‑
employment
Superannuation
benefits
$
Other
long term
$
Termination
benefits
$
Share‑based
payments
$
24,430
22,631
9,297
8,883
9,297
8,883
–
–
–
1,157
43,024
41,555
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
$
1,044,276
1,044,276
100,000
100,000
100,000
100,000
100,000
100,000
–
13,333
1,344,276
1,357,609
Proportion of
remuneration
performance
related
%
Value of options
as proportion of
remuneration
%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
48%
48%
0%
0%
0%
0%
0%
0%
0%
0%
37%
37%
15
Bell Financial GroupAnnual Report 2022 Post‑
employment
Superannuation
benefits
long term
benefits
payments
Other
Termination
Share‑based
Proportion of
remuneration
Value of options
performance
as proportion of
related
remuneration
$
24,430
22,631
24,004
26,719
27,500
26,250
27,500
26,250
103,434
101,850
$
–
–
–
–
14,807
36,345
27,922
22,846
42,729
59,191
$
–
–
–
–
–
–
–
–
–
–
$
–
–
–
–
–
–
–
–
63,700
63,700
Total
$
389,502
389,502
307,133
518,224
591,666
638,700
880,000
880,000
2,168,301
2,426,426
%
0%
0%
100%
100%
38%
45%
63%
63%
50%
63%
%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
DIRECTORS’ REPORT CONTINUED
For the year ended 31 December 2022
Remuneration Report (audited) (continued)
8. Service agreements (continued)
8.4 KMP remuneration (continued)
Senior Executives
Lewis Bell, Head of Compliance
Andrew Bell, Executive Director
of Bell Potter Securities
Dean Davenport, Chief Financial Officer
Rowan Fell, Chief Executive Officer
of Bell Potter Capital
Total compensation:
Executives (consolidated)
Salary & fees
$
365,072
366,871
283,129
491,505
324,359
287,405
274,578
280,904
1,247,138
1,426,685
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Short‑term
STI cash
bonus
$
–
–
–
–
225,000
225,000
550,000
550,000
775,000
775,000
Non‑monetary
benefits
$
–
–
–
–
–
–
–
–
–
–
Total
365,072
366,871
283,129
491,505
549,359
512,405
824,578
830,904
2,022,138
2,201,685
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 2022
$
2,020,423
1,541,295
64,425
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
Balance
1 Jan 22
$
298,908
539,310
971,756
210,449
Balance
31 Dec 22
$
–
463,417
1,005,515
72,361
Interest paid
and payable in
period
$
11,947
11,078
36,943
4,456
Highest
balance in
period1
$
1,306,982
539,310
1,171,911
215,802
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.
16
Bell Financial GroupAnnual Report 2022
Short‑term
STI cash
Non‑monetary
bonus
benefits
Remuneration Report (audited) (continued)
8. Service agreements (continued)
8.4 KMP remuneration (continued)
Senior Executives
Lewis Bell, Head of Compliance
Andrew Bell, Executive Director
of Bell Potter Securities
Dean Davenport, Chief Financial Officer
Rowan Fell, Chief Executive Officer
of Bell Potter Capital
Total compensation:
Executives (consolidated)
Salary & fees
$
365,072
366,871
283,129
491,505
324,359
287,405
274,578
280,904
1,247,138
1,426,685
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
$
–
–
–
–
225,000
225,000
550,000
550,000
775,000
775,000
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.
$
–
–
–
–
–
–
–
–
–
–
Total
365,072
366,871
283,129
491,505
549,359
512,405
824,578
830,904
2,022,138
2,201,685
31 Dec 2022
$
2,020,423
1,541,295
64,425
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:
Balance
1 Jan 22
$
298,908
539,310
971,756
210,449
31 Dec 22
$
–
463,417
1,005,515
72,361
Interest paid
Balance
and payable in
Highest
balance in
period1
$
1,306,982
539,310
1,171,911
215,802
period
$
11,947
11,078
36,943
4,456
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
Opening balance
Closing balance1
Interest charged
Lewis Bell
Andrew Bell
Rowan Fell
Dean Davenport
related parties.
Post‑
employment
Superannuation
benefits
$
24,430
22,631
24,004
26,719
27,500
26,250
27,500
26,250
103,434
101,850
Other
long term
$
–
–
–
–
14,807
36,345
27,922
22,846
42,729
59,191
Termination
benefits
$
–
–
–
–
–
–
–
–
–
–
Share‑based
payments
$
–
–
–
–
–
63,700
–
–
–
63,700
Proportion of
remuneration
performance
related
%
0%
0%
100%
100%
38%
45%
63%
63%
50%
63%
Value of options
as proportion of
remuneration
%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Total
$
389,502
389,502
307,133
518,224
591,666
638,700
880,000
880,000
2,168,301
2,426,426
17
Bell Financial GroupAnnual Report 2022
DIRECTORS’ REPORT CONTINUED
For the year ended 31 December 2022
Rounding of amounts
In accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instruments 2016/191, amounts in this report have
been rounded off to the nearest thousand dollars, unless otherwise indicated.
Lead auditor’s independence declaration
The lead auditor’s independence declaration is set out on page 19 and forms part of the Directors’ Report for the financial year
ended 31 December 2022.
This report is made in accordance with a resolution of the Directors.
Alastair Provan
Executive Chairman
16 February 2023
18
Bell Financial GroupAnnual Report 2022 LEAD AUDITOR’S INDEPENDENCE DECLARATION
For the year ended 31 December 2022
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To 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 Ltd for
the financial year ended 31 December 2022 there have been:
i.
ii.
KPMG
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.
Chris Wooden
Partner
Melbourne
16 February 2023
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.
19
Bell Financial GroupAnnual Report 2022 STATEMENT OF PROFIT OR LOSS
For the year ended 31 December 2022
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
2022
206,415
33,303
(3,439)
1,236
237,515
(138,289)
(10,657)
(2,845)
(10,933)
(7,373)
(5,807)
(5,670)
(7,540)
(11,393)
(200,507)
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)
37,008
63,115
12.
(11,321)
(18,997)
25,687
25,687
25,687
Cents
8.0
8.0
44,118
44,118
44,118
Cents
13.8
13.8
28.
28.
The notes on pages 25 to 63 are an integral part of these Consolidated Financial Statements.
20
Bell Financial GroupAnnual Report 2022 STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2022
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
Note
Consolidated
$’000
2022
25,687
2021
44,118
385
505
890
251
284
535
Total comprehensive income for the year
26,577
44,653
Attributable to:
Equity holders of the Company
Non-controlling interests
Total comprehensive income for the year
26,577
–
26,577
44,653
–
44,653
Other movements in equity arising from transactions with owners are set out in note 26.
The notes on pages 25 to 63 are an integral part of these Consolidated Financial Statements.
21
Bell Financial GroupAnnual Report 2022 STATEMENT OF FINANCIAL POSITION
As at 31 December 2022
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
2022
2021*
13.
14.
15.
30.
19.
31.
18.
16.
17.
17.
20.
21.
22.
31.
30.
24.
23.
26.
26.
26.
26.
289,207
253,846
1,464
15,573
435
495,756
45,474
4,908
1,460
130,413
15,466
1,254,002
421,998
505,434
1,397
52,035
–
37,234
500
1,018,598
352,742
281,627*
1,201
13,346
179
534,006
12,179
4,542
2,005
130,413
14,796
1,347,036*
457,340*
573,100
1,849
16,275
9
58,917
500
1,107,990*
235,404
239,406
204,237
(28,858)
(1,017)
61,042
235,404
204,237
(28,858)
(555)
64,222
239,046
The notes on pages 25 to 63 are an integral part of these Consolidated Financial Statements.
* 31 December 2021 comparative amounts have been restated. Refer to note 1a for further information.
22
Bell Financial GroupAnnual Report 2022 STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2022
Share
Capital
$‘000
204,237
Other
Equity
$‘000
(28,858)
Treasury
Shares
Reserve
$‘000
–
Share
Based
Pay‑
ments
Reserve
$‘000
–
Cash
Flow
Hedge
Reserve
$‘000
(238)
Foreign
Currency
Reserve
$‘000
415
Retained
Earnings
$‘000
55,385
Total
Equity
$‘000
230,941
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
204,237
–
–
–
–
–
–
(28,858)
–
(1,695)
–
428
–
–
(1,267)
–
–
–
–
–
–
–
–
–
–
–
–
–
251
–
251
251
–
–
–
–
–
–
13
–
44,118
44,118
–
284
284
–
–
–
251
284
535
284
44,118
44,653
–
–
–
–
–
–
699
–
–
–
–
–
(35,281)
64,222
–
(1,695)
–
428
–
(35,281)
239,046
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 25 to 63 are an integral part of these Consolidated Financial Statements.
Share
Capital
$‘000
204,237
Other
Equity
$‘000
(28,858)
Treasury
Shares
Reserve
$‘000
(1,267)
Share
Based
Pay‑
ments
Reserve
$‘000
–
Cash
Flow
Hedge
Reserve
$‘000
13
Foreign
Currency
Reserve
$‘000
699
Retained
Earnings
$‘000
64,222
Total
Equity
$‘000
239,046
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
204,237
–
–
–
–
–
–
(28,858)
–
(1,353)
–
–
–
–
(2,620)
–
–
–
–
–
–
–
–
–
–
–
–
–
385
–
385
385
–
–
–
–
–
–
398
– 25,687
25,687
–
506
506
–
–
–
385
506
891
506
25,687
26,578
–
–
–
–
–
–
1,205
–
–
–
–
–
(28,867)
61,042
–
(1,353)
–
–
–
(28,867)
235,404
Balance at 1 January 2022
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 2022
The notes on pages 25 to 63 are an integral part of these Consolidated Financial Statements.
23
Bell Financial GroupAnnual Report 2022 STATEMENT OF CASH FLOWS
For the year ended 31 December 2022
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 operations 1
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)
(Withdrawals)/Deposits from client cash balances
(Issuance)/Drawdown of margin loans
(Repayment)/Drawdown of borrowings
Net cash used in financing activities
Consolidated
$’000
Note
2022
2021
25.
218,006
(214,707)
(9,379)
(6,080)
335
32,480
(7,540)
(12,139)
7,056
5,243
(436)
(10,827)
(6,020)
(28,867)
(1,353)
(4,472)
(19,666)
37,787
(48,000)
(64,571)
(63,535)
352,742
289,207
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
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
13, 25.
The notes on pages 25 to 63 are an integral part of these Consolidated Financial Statements.
1.
‘Cash generated from operations’ includes Group cash reserves and client balances. Refer to note 13 for further information on cash and cash equivalents.
24
Bell Financial GroupAnnual Report 2022 NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2022
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
stockbroking, 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 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 2023.
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.
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.
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.
Comparative Amounts
2021 comparative numbers have been
restated to reflect client and clearing
broker positions on a gross basis that
were previously netted. As a result, the
following accounts have been restated:
31 December 2021 segregated deposits
with clearing brokers have increased
by $39.6m (from $122.6m to $162.2m),
and 31 December 2021 segregated
client liabilities have increased by
$39.6m (from $264.8m to $304.4m).
The impact on the opening balance of
the comparative period was an increase
of $12.5m in both segregated deposits
with clearing brokers and segregated
client liabilities. There was no impact
on profit or loss, retained earnings
or earnings per share.
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 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.
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.
25
Bell Financial GroupAnnual Report 2022 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2022
1. Significant accounting
d) Leases
policies (continued)
c) Revenue recognition (continued)
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.
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.
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.
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.
26
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.
Bell Financial GroupAnnual Report 2022 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.
27
Bell Financial GroupAnnual Report 2022 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2022
1. Significant accounting
p) Goodwill and intangible assets
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.
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. 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
2022
10 years
10 years
2021
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.
28
Bell Financial GroupAnnual Report 2022 A financial asset is measured at
amortised cost if it meets both of
the following conditions and is not
designated as at FVTPL:
financial assets held within that
business model) and how those
risks are managed; and
• How managers of the business
• It is held within a business model
are compensated.
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
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 2021 and 2022.
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
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.
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.
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.
29
Bell Financial GroupAnnual Report 2022 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2022
1. Significant accounting
policies (continued)
q) Financial instruments (continued)
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.
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 2022
(2021: Nil).
30
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 2022 (2021: Nil).
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 2022 (2021: Nil).
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
2022
2021
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.
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.
Bell Financial GroupAnnual Report 2022 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 2022,
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.
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).c
• 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).
31
Bell Financial GroupAnnual Report 2022 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.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2022
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 2022
(2021: 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 provisions and contingent
liabilities
From time to time, claims are raised
against the Group by clients and third
parties. The recognition of any provision
requires judgement to determine
management’s best estimate of the
provision. As at 31 December 2022,
a $500,000 provision has been recorded
against known potential claims.
(Refer to note 23).
On 16 February 2022, Bell Financial
Group announced that three operating
subsidiaries, Bell Potter Securities
Limited, Bell Potter Capital Limited and
Third Party Platform Pty Ltd, received
notices from AUSTRAC requiring the
appointment of an external auditor
to carry out an audit of those entities’
compliance with particular aspects of
their obligations under the Anti‑Money
Laundering and Counter‑Terrorism
Financing Act 2006 (Cth) (AML/CTF Act).
Bell Financial Group announced on
25 October 2022 that we had received
a report from the external auditor for
each entity and that those reports
had been provided to AUSTRAC in
accordance with the notice requirements.
Each of the reports related to a defined
period ending on 16 February 2022.
Since then, Bell Financial Group has
made a number of refinements to
our approach to AML/CTF compliance,
including updates to the subsidiaries’
risk assessments and their
AML/CTF program.
At this stage it is uncertain whether
AUSTRAC will take any further action
arising from the audit, or the nature of
the action it may take if it decides to do so.
Accordingly, the potential outcome and
total costs and exposure in connection
with the audit remain uncertain.
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.
32
Bell Financial GroupAnnual Report 2022 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 2022, goodwill has been allocated to the Group’s CGUs (Operating divisions) as follows:
Retail
Institutional
Technology & Platforms
Product & Services
2022
$’m
22.6
31.4
39.2
37.2
130.4
2021
$’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 11% (2021: 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 (2021: 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 (2021: 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 (2021: 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 7.9% p.a (2021:9.6% p.a) average growth over the five year forecast
period for Technology & Platforms.
An increase in Net Interest income of 8.1% p.a (2021: 8.1% p.a) average growth over the five
year forecast period, and an increase in Portfolio Administration fees of 7.0% p.a (2021: 7.0% p.a)
average growth over the five year forecast period.
Sensitivity analysis
As at 31 December 2022, 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 11.75%
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 29% for retail, the estimated recoverable amounts would
be equal to the carrying amounts. Further, if the terminal value multiple decreased to approximately 1.4 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; and
• 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.
33
Bell Financial GroupAnnual Report 2022 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2022
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.
34
Bell Financial GroupAnnual Report 2022 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.
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.
35
Bell Financial GroupAnnual Report 2022 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2022
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); and
• Institutional: traditional wholesale client broking (Institutional and Wholesale client focus).
31 December 2022
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 2021
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
23,875
6,183
225,584
225,584
Products
& Services
$’000
22,247
11,044
574,518
574,518
140,054
140,054
522,158
522,158
713
(156)
(2,737)
29,111
(5,370)
(149)
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)
Retail
$’000
113,514
2,464
384,565
384,565
339,027
339,027
3,479
(1,730)
(6,589)
Retail
$’000
142,936
10,466
455,751
455,750
401,928
401,928
484
(845)
(7,445)
Institutional
$’000
46,779
5,996
69,335
69,335
Consolidated
$’000
206,415
25,687
1,254,002
1,254,002
17,359
17,359
1,018,598
1,018,598
–
(284)
(1,182)
33,303
(7,540)
(10,657)
Institutional
$’000
77,713
18,348
86,058
86,058
Consolidated
$’000
269,084
44,118
1,347,036
1,347,036
35,433
35,433
1,107,990
1,107,990
–
(115)
(1,444)
22,708
(3,115)
(11,649)
Geographical segments
The Group operates predominantly within Australia and has offices in Hong Kong, London, New York and Kuala Lumpur.
* 31 December 2021 comparative amounts have been restated. Refer to note 1a for further information.
6. Rendering of services
Brokerage
Fee income
Portfolio administration revenue
Other
36
Consolidated
2022
$’000
120,814
58,361
21,503
5,737
206,415
2021
$’000
138,495
105,584
22,522
2,483
269,084
Bell Financial GroupAnnual Report 2022 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
2022
$’000
18,711
521
2021
$’000
23,604
295
Products
& Services
Retail
Institutional
2022
$’000
122
–
2021
$’000
145
–
2022
$’000
93,694
19,635
2021
$’000
103,988
38,739
2022
$’000
8,287
38,205
2021
$’000
10,758
66,550
Consolidated
2022
$’000
120,814
58,361
2021
$’000
138,495
105,584
–
4,643
23,875
–
1,177
25,076
21,503
622
22,247
22,522
692
23,359
–
185
113,514
–
209
142,936
–
287
46,779
–
405
77,713
21,503
5,737
206,415
22,522
2,483
269,084
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
2022
$’000
335
252
(4,026)
(3,439)
2021
$’000
2
3,018
(3,689)
(669)
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
2022
$’000
1,236
1,236
2021
$’000
1,023
1,023
Consolidated
2021
$’000
604
22,104
22,708
(1,387)
(741)
(987)
(3,115)
19,593
2022
$’000
4,591
28,712
33,303
(2,303)
(3,127)
(2,110)
(7,540)
25,763
37
Bell Financial GroupAnnual Report 2022 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2022
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
Consolidated
2022
$’000
(121,161)
(8,262)
(7,068)
(1,798)
–
(138,289)
2021
$’000
(155,293)
(8,129)
(7,839)
(1,811)
(428)
(173,500)
Consolidated
2022
$’000
11,600
65
78
11,743
(422)
11,321
2021
$’000
19,452
61
(31)
19,482
(485)
18,997
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
2022
Consolidated
2021
%
30.00%
0.21%
0.21%
0.17%
30.59%
$’000
37,008
11,102
76
78
65
11,321
%
30.00%
0.05%
-0.05%
0.10%
30.1%
$’000
63,115
18,934
33
(31)
61
18,997
Tax consolidation
Bell Financial Group Ltd and its wholly owned Australian controlled entities are a tax-consolidated group.
38
Bell Financial GroupAnnual Report 2022 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
2022
$’000
2021
$’000
12
110,299
110,311
6,589
6,589
36,807
135,500
172,307
289,207
13
136,480
136,493
36,840
36,840
49,634
129,775
179,409
352,742
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
2022
$’000
136,493
2021
$’000
139,651
241,479
289,442
(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
(163,372)
(9,433)
(10,933)
(7,373)
(5,807)
(5,670)
(5,429)
(11,393)
(219,410)
22,069
(12,139)
(28,867)
(1,252)
(5,584)
(436)
27
110,311
39
Bell Financial GroupAnnual Report 2022 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2022
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
2022
$’000
151,049
–
151,049
10,160
79,875
–
90,035
12,762
253,846
2021*
$’000
100,905
–
100,905
9,488
162,125*
–
171,613*
9,109
281,627*
No impairment allowance in respect of loans and receivables noted during the year (2021: Nil). Information about the Group’s
exposure to credit and market risks is included in Note 30.
* 31 December 2021 comparative amounts have been restated. Refer to note 1a for further information.
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
Consolidated
2022
$’000
5,040
4,245
6,288
15,573
2021
$’000
1,805
5,217
6,324
13,346
1. Options held as a hedge against limited recourse loans to clients under the Bell Geared Equities Investments product.
40
Bell Financial GroupAnnual Report 2022 16. Property, plant and equipment
Consolidated
Cost
Balance at 1 January 2021
Additions
Disposals
Effect of movements in exchange rates
Balance at 31 December 2021
Balance at 1 January 2022
Additions
Disposals
Effect of movements in exchange rates
Balance at 31 December 2022
Accumulated depreciation
Balance at 1 January 2021
Depreciation charge for the year
Disposals
Effect of movements in exchange rates
Balance at 31 December 2021
Balance at 1 January 2022
Depreciation charge for the year
Disposals
Effect of movements in exchange rates
Balance at 31 December 2022
Carrying amount
At 1 January 2021
At 31 December 2021
At 31 December 2022
Fixtures and
fittings
$’000
Office
equipment
$’000
Leasehold
improvements
$’000
2,123
102
–
5
2,230
2,230
159
–
(1)
2,388
(1,796)
(83)
–
(5)
(1,884)
(1,884)
(90)
–
1
(1,973)
327
346
415
6,045
452
–
9
6,506
6,506
162
(34)
4
6,638
(5,220)
(536)
–
(7)
(5,763)
(5,763)
(505)
34
(4)
(6,238)
825
743
400
7,295
432
–
17
7,744
7,744
115
–
11
7,870
(6,490)
(328)
–
(10)
(6,828)
(6,828)
(395)
–
(2)
(7,225)
805
916
645
Total
$’000
15,463
986
–
31
16,480
16,480
436
(34)
14
16,896
(13,506)
(947)
–
(22)
(14,475)
(14,475)
(990)
34
(5)
(15,436)
1,957
2,005
1,460
41
Bell Financial GroupAnnual Report 2022 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2022
17. Goodwill and intangible assets
Cost
Balance at 1 January 2021
Acquisitions – internally developed
Balance at 31 December 2021
Balance at 1 January 2022
Acquisitions – internally developed
Balance at 31 December 2022
Accumulated amortisation and impairment losses
Balance at 1 January 2021
Amortisation
Balance at 31 December 2021
Balance at 1 January 2022
Amortisation
Balance at 31 December 2022
Carrying amount
At 1 January 2021
At 31 December 2021
At 31 December 2022
18. Deferred tax assets and liabilities
The movement in deferred tax balances are as follows:
Consolidated 2022
Property, plant and equipment
Employee benefits
Carry forward tax loss
Other items
Consolidated 2021
Property, plant and equipment
Employee benefits
Carry forward tax loss
Other items
Goodwill
$’000
Identifiable
intangibles
$’000
130,413
–
130,413
130,413
–
130,413
–
–
–
–
–
–
130,413
130,413
130,413
23,965
3,451
27,416
27,416
3,400
30,816
(10,204)
(2,416)
(12,620)
(12,620)
(2,730)
(15,350)
13,761
14,796
15,466
Total
$’000
154,378
3,451
157,829
157,829
3,400
161,229
(10,204)
(2,416)
(12,620)
(12,620)
(2,730)
(15,350)
144,174
145,209
145,879
Balance as at
1 January
$’000
(25)
5,217
40
(690)
4,542
Recognised in
profit or loss
$’000
54
78
(1)
235
366
Balance at
31 December
$’000
29
5,295
39
(455)
4,908
Balance as at
1 January
$’000
Recognised in
profit or loss
$’000
Balance at
31 December
$’000
26
5,524
40
(1,450)
4,140
(51)
(307)
–
760
402
(25)
5,217
40
(690)
4,542
Unrecognised deferred tax assets relating to tax losses at 31 December 2022: $245,000 (2021: $167,000).
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.
42
Bell Financial GroupAnnual Report 2022 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 2022 (2021: 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
2022
$’000
413,955
81,801
495,756
2021
$’000
444,119
89,887
534,006
Consolidated
2022
$’000
168,894
26,654
226,450
421,998
2021*
$’000
132,524
20,511
304,305*
457,340*
Settlement obligations are non-interest bearing and are normally settled on 2-day terms. Sundry creditors are normally
settled on 60-day terms.
* 31 December 2021 comparative amounts have been restated. Refer to note 1a for further information.
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 (2021: $150m).
Interest rate risk exposures
Details of the Group’s exposure to interest rate changes on borrowings are set out in note 30.
Consolidated
2022
$’000
844
460,590
44,000
505,434
2021
$’000
1,449
479,651
92,000
573,100
43
Bell Financial GroupAnnual Report 2022 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2022
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
2022
2021
2022
2021
Average
effective
interest rate
1.83%
0.60%
0.60%
0.51%
0.11%
0.11%
Face value
$’000
44,000
844
460,590
505,434
Carrying
amount
$’000
44,000
844
460,590
505,434
Face value
$’000
92,000
1,449
479,651
573,100
Carrying
amount
$’000
92,000
1,449
479,651
573,100
2022
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
Liabilities
Bell
Financial
Trust
$’000
479,651
Deposits
$’000
1,449
Derivatives (assets)/
liabilities held to hedge
long‑term borrowings
Interest rate swap
contracts used for hedging
Liabilities
$’000
–
Assets
$’000
13
Cash
advance
facility
$’000
92,000
–
(48,000)
(48,000)
–
605
–
605
–
–
(19,061)
(19,061)
–
–
–
–
385
898
(898)
–
143
(143)
–
3,126
(3,126)
–
–
–
–
Total
$’000
573,113
605
(67,061)
(67,666)
385
4,167
(4,167)
–
505,832
–
–
–
–
–
–
–
–
Balance at 31 December
44,000
844
460,590
398
44
Liabilities
Deposits
$’000
615
Bell
Financial
Trust
$’000
436,861
2021
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
834
–
834
–
221
(221)
–
42,790
42,790
–
–
741
(741)
–
–
–
–
–
–
–
–
13
(238)
(225)
–
–
–
–
–
–
–
834
94,790
95,624
1,286
(1,286)
–
573,113
Cash
advance
facility
$’000
40,000
52,000
52,000
–
–
324
(324)
–
92,000
1,449
479,651
13
Bell Financial GroupAnnual Report 2022 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
2022
2021
2022
2021
Average
effective
interest rate
1.83%
0.60%
0.60%
0.51%
0.11%
0.11%
Face value
amount
Face value
Carrying
$’000
44,000
844
460,590
505,434
Carrying
amount
$’000
92,000
1,449
479,651
573,100
$’000
92,000
1,449
479,651
573,100
$’000
44,000
844
460,590
505,434
2022
Derivatives (assets)/
liabilities held to hedge
long‑term borrowings
Bell
Interest rate swap
Financial
contracts used for hedging
Liabilities
Cash
advance
facility
$’000
92,000
Deposits
$’000
1,449
Trust
$’000
479,651
Assets
$’000
13
Liabilities
$’000
Total
$’000
573,113
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
(48,000)
(48,000)
–
–
605
–
605
–
(19,061)
(19,061)
–
–
Changes in fair value
Other charges
Liability-related
Interest expense
Interest paid/(payable)
Total liability‑related other changes
898
(898)
–
143
(143)
–
3,126
(3,126)
–
385
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
605
(67,061)
(67,666)
385
4,167
(4,167)
–
2021
Liabilities
Cash
advance
facility
$’000
40,000
–
52,000
52,000
–
324
(324)
–
Deposits
$’000
615
Bell
Financial
Trust
$’000
436,861
834
–
834
–
221
(221)
–
–
42,790
42,790
–
741
(741)
–
Balance at 31 December
44,000
844
460,590
398
505,832
92,000
1,449
479,651
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
–
–
–
13
–
–
–
13
–
–
–
834
94,790
95,624
(238)
(225)
–
–
–
–
1,286
(1,286)
–
573,113
45
Bell Financial GroupAnnual Report 2022 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2022
22. Current tax liabilities
The current tax liability of the Group is $1,396,978 (2021: $1,848,768). 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
2022
$’000
500
500
500
–
–
500
2021
$’000
500
500
500
400
(400)
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 liabilities at 31 December 2022.
24. Employee benefits
Salaries and wages accrued
Liability for annual leave
Total employee benefits
Liability for long-service leave
Total employee benefits
Consolidated
2022
$’000
23,969
7,925
31,894
5,340
37,234
2021
$’000
46,081
7,697
53,778
5,139
58,917
The present value of employee entitlements not expected to be settled within twelve 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
2022
$’000
3.0%
3.45%
7
752
2021
$’000
3.0%
1.60%
7
762
46
Bell Financial GroupAnnual Report 2022 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) client receivables
(Increase) other receivables
(Increase) derivative asset
(Increase) other assets
(Increase) deferred tax assets
(Increase) intangibles
(Decrease)/increase client payables
Increase other payables
Increase derivative liability
(Decrease) current tax liabilities
(Decrease) provisions
Increase/(decrease) 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
2022
$’000
2021
$’000
25,687
44,118
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
10,657
3,820
–
40,164
(8,119)
(3,653)
(256)
(263)
(995)
(3,400)
(1,435)
6,143
376
(452)
(21,683)
629
7,056
12
110,299
110,311
6,589
6,589
36,807
135,500
172,307
289,207
47
Bell Financial GroupAnnual Report 2022 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2022
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 2021
Share issue
31 December 2021
1 January 2022
Share issue
31 December 2022
Consolidated
2022
$’000
204,237
–
204,237
2021
$’000
204,237
–
204,237
Detail
Opening balance
Balance
Opening balance
Balance
Number
of shares
320,743,948
–
320,743,948
320,743,948
–
320,743,948
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 2022, there were retained profits of $61m (2021: $64.2m).
Foreign currency reserve
The foreign currency reserve comprises of any movements in the translation of foreign currency balances. Balance at
31 December 2022: $1,205,000 (2021: $699,000).
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 2022: $28,858,000 debit (2021: $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 2022: $398,000 (2021: $13,000).
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 2022: Nil (2021: 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 2022: $2,620,000 debit (2021: $1,267,000 debit).
48
Bell Financial GroupAnnual Report 2022
27. Dividends
Dividends recognised in the current year by the Group are:
2022
Interim 2022 ordinary dividend
Final 2022 ordinary dividend
2021
Interim 2021 ordinary dividend
Final 2021 ordinary dividend
Cents
per share
Total amount
$‘000
Franked/
unfranked
Date of
payment
2.5
–
4.5
6.5
8,019
–
14,433
20,848
Franked
–
6 September 2022
–
Franked
Franked
26 August 2021
16 March 2022
Dividend franking account
30 percent franking credits available to shareholders
of Bell Financial Group Ltd for subsequent financial years
Company
2022
$‘000
2021
$‘000
38,660
39,037
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 $6.2m
(2021: $8.9m).
28. Earnings per share
Earnings per share at 31 December 2022 based on profit after tax and a weighted average number of shares outlined below
was 8.0 cents (2021: 13.8 cents). Diluted earnings per share at 31 December 2022 was 8.0 cents (2021: 13.8 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
2022
$’000
25,687
25,687
25,687
–
25,687
2021
$’000
44,118
44,118
44,118
–
44,118
Consolidated
2022
2021
319,313,419
319,313,419
319,313,419
320,450,886
320,450,886
320,450,886
49
Bell Financial GroupAnnual Report 2022 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2022
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 2022 (2021: 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
2022
000
–
–
–
–
–
2021
000
–
–
–
–
–
Consolidated
2022
$’000
–
–
–
–
2021
$’000
–
–
428
428
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
50
Bell Financial GroupAnnual Report 2022 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:
Trade debtors
Clearing house deposits
Segregated deposits with clearing brokers
Loans and advances
Sundry debtors
* 31 December 2021 comparative amounts have been restated. Refer to note 1a for further information.
The ageing of trade receivables at reporting date is outlined below:
Consolidated
2022
$’000
151,049
10,160
79,875
495,756
12,762
2021
$’000
100,905
9,488
162,125*
534,006
9,109
Note
14.
14.
14.
19.
14.
Consolidated
Ageing of receivables
Not past due
Past due 0 – 30 days
Past due 31 – 365 days
More than one year
Gross
2022
$’000
Impairment
2022
$’000
Gross
2021
$’000
Impairment
2021
$’000
150,941
39
69
–
–
–
–
–
100,751
65
89
–
–
–
–
–
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.
51
Bell Financial GroupAnnual Report 2022 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2022
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 2022
Non‑derivative liabilities
Trade & other payables
Cash deposits
Cash advance facilities
Bell Financial Trust
Lease Liabilities
Derivative liabilities
Hedging derivative
Foreign currency swap
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
Carrying
Amount
$’000
Contracted
Cashflow
$’000
6‑months
or less
$’000
6‑12
months
$’000
421,998
844
44,000
460,590
52,035
(421,998)
(844)
(44,000)
(460,590)
(62,902)
(421,998)
(844)
(44,000)
(460,590)
(3,611)
–
–
–
–
–
–
–
–
–
–
(3,586)
–
–
Carrying
Amount
$’000
Contracted
Cashflow
$’000
6‑months
or less
$’000
6‑12
months
$’000
457,340*
1,449
92,000
479,651
16,275
(457,340)*
(1,449)
(92,000)
(479,651)
(18,188)
(457,340)*
(1,449)
(92,000)
(479,651)
(2,546)
–
–
–
–
–
–
–
–
–
–
(1,941)
–
–
1‑2
years
$’000
–
–
–
–
(8,595)
–
–
1‑2
years
$’000
–
–
–
–
(3,821)
–
–
2‑5
years
$’000
–
–
–
–
(20,795)
–
–
2‑5
years
$’000
–
–
–
–
(8,255)
–
–
5+
years
$’000
–
–
–
–
(26,315)
–
–
5+
years
$’000
–
–
–
–
(1,625)
–
–
* 31 December 2021 comparative amounts have been restated. Refer to note 1a for further information.
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.
52
Bell Financial GroupAnnual Report 2022 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.
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 2022, 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 $2,830,000 (2021: $3,159,000 decrease to profit) and would decrease equity
by approximately $1,981,000 (2021: $2,211,000 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 2022, it is estimated that a 10% decrease in equity prices would decrease the Group’s profit before income
tax by approximately $1,557,000 (2021: $1,335,000 decrease to profit) and would decrease equity by approximately $1,090,000
(2021: $935,000 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.
53
Bell Financial GroupAnnual Report 2022 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2022
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.
Average
effective
interest
rate
%
6.23%
1.83%
Total
$’000
92,950
(44,000)
48,950
92,252
(44,000)
48,252
1.31%
5.16%
0.60%
0.60%
289,207
402,806
(844)
(460,590)
230,579
289,207
402,806
(844)
(460,590)
230,579
2022
6 months
or less
$’000
6 – 12
months
$’000
1 – 2
years
$’000
2 – 5
years
$’000
More
than
5 years
$’000
698
–
698
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
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
Note
19.
21.
13.
19.
21.
21.
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.
31 DECEMBER 2022
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
15.
19.
14.
13.
19.
Financial liabilities not measured at fair value
Trade and other payables
Deposits and borrowings
20.
21.
Carrying Amount
Designated
at fair value
$’000
Note
Fair value
hedging
instruments
$’000
Loans and
receivables
$’000
Other
financial
liabilities
$’000
15,573
–
37
–
15,610
–
–
–
–
–
–
–
–
–
–
398
–
–
398
–
–
–
–
–
–
–
–
–
–
–
–
81,801
81,801
253,846
289,207
413,955
957,008
–
–
–
–
–
Total
$’000
15,573
398
37
81,801
97,809
253,846
289,207
413,955
957,008
–
–
–
–
–
–
–
–
–
–
–
–
–
412,452
505,434
917,886
412,452
505,434
917,886
1. Loans and advances measured at fair value decreased from $89,887,000 at 31 December 2021 to $81,801,000 at 31 December 2022 due to net new/repaid
loans of $7,623,000 with the remaining movement due to net fair value changes.
54
2021
6 – 12
months
$’000
4,856
4,856
–
–
–
–
–
–
6 months
or less
$’000
168,288
(92,000)
76,288
352,742
360,862
(1,449)
(479,651)
232,504
1 – 2
years
$’000
2 – 5
years
$’000
More than
5 years
$’000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Average
effective
interest rate
%
4.65%
0.51%
0.10%
4.20%
0.11%
0.11%
–
–
–
–
–
–
–
–
–
–
–
–
Total
$’000
173,144
(92,000)
81,144
352,742
360,862
(1,449)
(479,651)
232,504
Fair Value
398
37
–
–
–
–
–
–
–
–
–
–
Level 1
$’000
Level 2
$’000
Level 3
$’000
5,040
10,533
5,040
10,968
81,801
81,801
Total
$’000
15,573
398
37
81,801
97,809
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Bell Financial GroupAnnual Report 2022 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
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.
6 months
or less
$’000
6 – 12
months
$’000
1 – 2
years
$’000
2 – 5
years
$’000
More
than
5 years
$’000
Average
effective
interest
rate
%
6.23%
1.83%
Total
$’000
92,950
(44,000)
48,950
92,252
(44,000)
48,252
1.31%
5.16%
0.60%
0.60%
289,207
402,806
289,207
402,806
(844)
(844)
(460,590)
(460,590)
230,579
230,579
2022
698
–
698
–
–
–
–
–
–
–
–
–
–
–
–
–
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.
31 DECEMBER 2022
Note
$’000
$’000
$’000
Carrying Amount
Designated
Loans and
at fair value
instruments
receivables
Fair value
hedging
Other
financial
liabilities
$’000
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.
15,573
–
37
–
15,610
–
–
–
–
–
–
–
–
–
398
398
–
–
–
–
–
–
–
–
–
–
–
–
81,801
81,801
253,846
289,207
413,955
957,008
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
$’000
15,573
398
37
81,801
97,809
253,846
289,207
413,955
957,008
–
–
412,452
505,434
917,886
412,452
505,434
917,886
1. Loans and advances measured at fair value decreased from $89,887,000 at 31 December 2021 to $81,801,000 at 31 December 2022 due to net new/repaid
loans of $7,623,000 with the remaining movement due to net fair value changes.
2021
6 – 12
months
$’000
4,856
–
4,856
–
–
–
–
–
6 months
or less
$’000
168,288
(92,000)
76,288
352,742
360,862
(1,449)
(479,651)
232,504
1 – 2
years
$’000
2 – 5
years
$’000
More than
5 years
$’000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Average
effective
interest rate
%
4.65%
0.51%
0.10%
4.20%
0.11%
0.11%
Total
$’000
173,144
(92,000)
81,144
352,742
360,862
(1,449)
(479,651)
232,504
Fair Value
Level 1
$’000
Level 2
$’000
Level 3
$’000
5,040
–
–
–
5,040
10,533
398
37
–
10,968
–
–
–
81,801
81,801
Total
$’000
15,573
398
37
81,801
97,809
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
55
Bell Financial GroupAnnual Report 2022 Fair Value
Level 1
$’000
Level 2
$’000
Level 31
$’000
Total
$’000
1,805
11,541
1,805
11,711
89,887
89,887
–
–
–
–
–
–
–
–
–
–
–
–
13
157
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
13,346
13
157
89,887
103,403
–
–
–
–
–
–
–
–
–
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2022
30. Financial instruments (continued)
Fair value measurements (continued)
(a) Accounting classifications and fair values (continued)
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
15.
19.
14.
13.
19.
Financial liabilities not measured at fair value
Trade and other payables
Deposits and borrowings
20.
21.
Carrying Amount
Designated
at fair value
$’000
Note
Fair value
hedging
instruments
$’000
Loans and
receivables
$’000
Other
financial
liabilities
$’000
13,346
–
157
–
13,503
–
–
–
–
–
–
–
–
–
–
13
–
–
13
–
–
–
–
–
–
–
–
–
–
–
–
89,887
89,887
281,627*
352,742
444,119
1,078,488*
–
–
–
–
–
Total
$’000
13,346
13
157
89,887
103,403
281,627*
352,742
444,119
1,078,488*
–
–
–
–
–
–
–
–
–
–
–
–
–
451,001*
573,100
1,024,101*
451,001*
573,100
1,024,101*
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.
* 31 December 2021 comparative amounts have been restated. Refer to note 1a for further information.
(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 2022 and 2021.
56
Bell Financial GroupAnnual Report 2022 30. Financial instruments (continued)
Fair value measurements (continued)
(a) Accounting classifications and fair values (continued)
31 DECEMBER 2021
Note
$’000
$’000
$’000
Carrying Amount
Fair value
Designated
hedging
Loans and
at fair value
instruments
receivables
Other
financial
liabilities
$’000
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
–
–
–
–
–
–
–
–
–
–
–
Total
$’000
13,346
13
157
89,887
103,403
281,627*
352,742
444,119
1,078,488*
–
–
–
–
–
–
–
–
–
–
–
–
–
451,001*
573,100
451,001*
573,100
1,024,101*
1,024,101*
–
13
–
–
13
–
–
–
–
–
–
–
–
–
89,887
89,887
281,627*
352,742
444,119
1,078,488*
–
–
–
–
–
–
–
–
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.
* 31 December 2021 comparative amounts have been restated. Refer to note 1a for further information.
(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 2022 and 2021.
Fair Value
Level 1
$’000
Level 2
$’000
Level 31
$’000
Total
$’000
1,805
–
–
–
1,805
11,541
13
157
–
11,711
–
–
–
89,887
89,887
13,346
13
157
89,887
103,403
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
57
Bell Financial GroupAnnual Report 2022 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2022
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
2022
$’000
12,179
(6,937)
40,166
66
45,474
2021
$’000
16,122
(8,286)
4,281
62
12,179
Consolidated
2022
$’000
16,275
2,110
40,166
(6,588)
72
52,035
2021
$’000
22,357
987
4,298
(11,414)
47
16,275
Consolidated
2022
$’000
6,937
2,110
1,813
10,860
2021
$’000
8,286
987
1,810
11,083
Consolidated
2022
$’000
(6,588)
2021
$’000
(11,414)
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
58
Bell Financial GroupAnnual Report 2022 32. Parent entity disclosures
As at, and throughout the financial year ending 31 December 2022, the parent company of the Group was Bell Financial Group Ltd.
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
Consolidated
2022
$’000
29,531
29,531
46,590
223,633
270,223
83,826
83,826
204,237
(2,620)
(15,220)
186,397
2021
$’000
35,040
35,040
12,121
222,374
234,495
47,409
47,409
204,237
(1,267)
(15,884)
187,086
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
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
2022
3,323,390
42,729
146,458
–
–
3,512,577
2021
3,517,739
59,191
143,405
–
63,700
3,784,035
59
Bell Financial GroupAnnual Report 2022 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2022
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 2022
Total for key management personnel 2021
Total for other related parties 2022
Total for other related parties 2021
Total for key management personnel
and their related parties 2022
Total for key management personnel
and their related parties 2021
Opening
balance
$
2,020,423
1,896,810
–
–
Interest paid
and payable in
the reporting
period
$
64,425
52,649
–
–
Number
of loans in
Group at
31 December1
24
28
–
–
Closing
balance
$
1,541,295
2,020,423
–
–
2,020,423
1,541,295
64,425
1,896,810
2,020,423
52,649
24
28
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 $64,425 (2021: $52,649). No amounts have been
written-down or recorded as allowances for impairment, as the balances are considered fully collectable.
Movements in shares 2022
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
G Cubbin
B Wilson AO
C Feldmanis
Senior Executives
LM Bell2
AG Bell2
R Fell
D Davenport
Held at
1 January
2022
43,757,863
216,000
1,200,000
50,000
43,142,824
32,553,972
900,000
298,039
Received on
exercise of
options
Held at
31 December
2022
Sales
Purchases
282,870
–
–
75,000
312,460
187,924
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
44,040,733
216,000
1,200,000
125,000
43,455,284
32,741,896
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.
60
Bell Financial GroupAnnual Report 2022 Movements in shares 2021
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
43,757,863
2,176,740
216,000
1,200,000
50,000
43,027,092
32,523,972
900,000
263,039
Received on
exercise of
options
Purchases
–
–
–
–
–
115,732
30,000
–
35,000
–
–
–
–
–
–
–
–
–
Held at
31 December
2021
43,757,863
280,000
216,000
1,200,000
50,000
43,142,824
32,553,972
900,000
298,039
Sales
–
(1,896,740)
–
–
–
–
–
–
–
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
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 2022 (2021: nil). There is no interest receivable or payable at 31 December 2022
(2021: 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
2022
$
2021
$
–
278,616
8,295,295
1,949,834
–
10,523,745
686
90,218
8,286,530
1,945,473
–
10,322,907
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 4.60% per annum
(2021: 1.60% per annum).
Loans made by wholly owned subsidiaries to the Company: $31,535,286 (2021: $31,496,711). 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 2022, all outstanding amounts are considered
fully collectable.
61
Bell Financial GroupAnnual Report 2022 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2022
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
2022
2021
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 $7.6m
(2021: $8.3m) and are not recorded in the Statement of Financial Position as at 31 December 2022.
36. Contingent liabilities and contingent assets
The Company has agreed to indemnify its wholly owned subsidiaries, Bell Potter Securities Limited, Bell Potter Capital Limited
and Third Party Platform Pty Ltd in the event that any contingent liabilities of the wholly owned subsidiaries 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.
On 16 February 2022, Bell Financial Group announced that three operating subsidiaries, Bell Potter Securities Limited, Bell Potter
Capital Limited and Third Party Platform Pty Ltd, received notices from AUSTRAC requiring the appointment of an external auditor
to carry out an audit of those entities’ compliance with particular aspects of their obligations under the Anti‑Money Laundering
and Counter‑Terrorism Financing Act 2006 (Cth) (AML/CTF Act).
Bell Financial Group announced on 25 October 2022 that we had received a report from the external auditor for each entity and
that those reports had been provided to AUSTRAC in accordance with the notice requirements. Each of the reports related to a
defined period ending on 16 February 2022. Since then, Bell Financial Group has made a number of refinements to our approach
to AML/CTF compliance, including updates to the subsidiaries’ risk assessments and their AML/CTF program.
At this stage it is uncertain whether AUSTRAC will take any further action arising from the audit, or the nature of the action it may take
if it decides to do so. Accordingly, the potential outcome and total costs and exposure in connection with the audit remain uncertain.
37. Subsequent events
Except as noted below, there were no significant events from 31 December 2022 to the date of this report.
Final Dividend
On 16 February 2023, the Directors resolved to pay a fully franked final dividend of 4.5 cents per share.
62
Bell Financial GroupAnnual Report 2022 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
Consolidated
2022
$
2021
$
392,137
392,137
389,036
389,036
126,649
126,649
31,104
549,890
109,180
109,180
30,285
528,501
63
Bell Financial GroupAnnual Report 2022 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 20 to 63 and the Remuneration Report
on pages 12 to 17 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 2022 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 2022.
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 2023 in accordance with a resolution of the Directors:
Alastair Provan
Executive Chairman
16 February 2023
64
Bell Financial GroupAnnual Report 2022 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 Company).
In our opinion, the accompanying Financial Report of
the Company 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 2022 and
of its financial performance for the year ended
on that date; and
•
•
The Financial Report comprises:
• Consolidated Statement of Financial Position
as at 31 December 2022;
• 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;
complying with Australian Accounting Standards
and the Corporations Regulations 2001.
• Notes including a summary of significant
accounting policies; and
• Directors' Declaration.
The Group consists of the Company and the
entities it controlled at the year-end or from time
to time during the financial year.
Basis for opinion
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
audits 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 (including Independence Standards) (the Code) that are relevant to our audits 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.
65
Bell Financial GroupAnnual Report 2022
INDEPENDENT AUDITOR ’S REPORT CONTINUED
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 forecasts in some instances
historically, increasing our audit effort in assessing
the reliability of current forecasts for each CGU.
Complex modelling, using forward-looking
assumptions tends to be prone to greater risk for
potential bias, error and inconsistent application.
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 Group’s forecast
cashflows and terminal value multiples by
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Bell Financial GroupAnnual Report 2022
These conditions necessitate additional scrutiny by
us, in particular to address the objectivity of
sources used for assumptions, and their
consistent application.
comparing the Group’s current and forecast
net profit after tax valuation multiple to
publicly available data of comparable
companies.
We involved valuation specialists to supplement
our senior audit team members in assessing this
key audit matter.
• 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 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 the 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
liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so.
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Bell Financial GroupAnnual Report 2022
INDEPENDENT AUDITOR ’S REPORT CONTINUED
Auditor’s responsibilities for the audits 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: 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 Renumeration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report of
Bell Financial Group Ltd for the year ended
31 December 2022, 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 17 of the Directors’ report for the year ended
31 December 2022.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Chris Wooden
Partner
Melbourne
16 February 2023
KPMG
68
Bell Financial GroupAnnual Report 2022 SHAREHOLDER INFORMATION
The following information is current as at 31 January 2023.
Voting rights
At a meeting of shareholders, voting on resolutions will be conducted by poll and each shareholder will have one vote
for each fully paid share held. Shareholders may vote directly or by proxy, attorney or representative, depending on whether
the shareholder is an individual or a company. We have one class of fully paid ordinary shares and these do not have any
voting restrictions.
Twenty largest shareholders
Shareholder name
BELL GROUP HOLDINGS PTY LIMITED
MR JAMES GORDON MOFFATT
CITICORP NOMINEES PTY LIMITED
MR ANAND SELVARAJAH
MR DEAN JAMES SURKITT
MR ALASTAIR PROVAN + MRS JANIS PROVAN
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
COLIN BELL PTY LTD
MORSON HOLDINGS PTY LTD
BELL POTTER NOMINEES LTD
1
2
3
4
5
6
7
8
9
10
11 MR LEE WILLIAM MUCO
12
13
14 MILDRIDGE PTY LTD
15 MR ALASTAIR PROVAN + MRS JANIS PROVAN
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