16 February 2024
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 2023
In accordance with the Listing Rules, please find attached for immediate release:
1.
2.
Appendix 4E; and
2023 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 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 2023 to 31 December 2023
1 January 2022 to 31 December 2022
Year ended
31 December 2023
$ ’000
Year ended
31 December 2022
$ ’000
Revenue from ordinary activities
Profit from ordinary activities after tax attributable to
shareholders
247,002
24,324
237,515
Up 4.0%
25,687
Down 5.3%
Net tangible assets per ordinary shares
$0.28
$0.28
Dividend per ordinary share
2023 Interim dividend per share
2023 Final dividend per share (declared)
Amount per share
3.0 cents
4.0 cents
Record date
Payment date
31 August 2023 12 September 2023
14 March 2024
29 February 2024
Additional Appendix 4E disclosure requirements can be found in the 2023 Annual Report lodged separately with this
document. This report is based on the consolidated financial statements which have been audited by KPMG.
Annual Report 2023
Bell Potter Securities Ltd
Bell Potter Capital Ltd
Third Party Platform Pty Ltd
CONTENTS
Overview
01 Highlights
Performance
02 Chairman's Letter
03 Operating and Financial Review
08 Directors’ Report
19 Lead Auditor’s Independence
Declaration
Financial Statements
Other Information
20 Statement of Profit or Loss
69 Shareholder Information
21 Statement of Comprehensive
71 Directory
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
Bell Financial Group Ltd is a highly
diversified financial services and wealth
management business. We aim to create
value through ongoing investment in
our people, technology and products.
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.
Australia
Adelaide
Brisbane
Cairns
Geelong
Hobart
Melbourne
International
London
New York
Hong Kong
Kuala Lumpur
Mornington
Noosa
Orange
Perth
Sydney
Bell Financial Group Ltd ABN 59 083 194 763
HIGHLIGHTS
Revenue
Profit After Tax
Funds Under Advice
$247m
$24.3m
$79.8bn
4.0% increase on 2022
5.3% decrease on 2022
9.6% increase on 2022
Earnings Per Share
Dividend Per Share
Return on Equity
7.6¢ share
7.0¢ share
15.0%
5.0% decrease on 2022
No change on 2022
4.5% decrease on 2022
Bell Potter Securities Ltd
Bell Potter Capital Ltd
Third Party Platform Pty Ltd
BELL POTTER CAPITAL
> Retail and Institutional Equities
> Bell Client Funds at Call
> Retail Online Broking
> International Equities
> Margin Lending
> Wholesale Online Broking
> Portfolio Administration
> Structured Products
> Institutional Online Broking
> Foreign Exchange
> Superannuation
> Fixed Income
> Third Party Clearing
01
FXBell Financial GroupAnnual Report 2023 CHAIRMAN’S LETTER
In a challenging
market, Bell Financial
Group delivered a very
commendable result
across the 2023 financial
year. Rising recurring
revenues, a deepening use
of proprietary technologies,
and growth in key business
areas all point to benefits
of our growth strategy and
ongoing focus on building
long-term value.
31 October also saw the retirement of
Alastair Provan, Executive Chairman of
Bell Financial Group. For over 40 years,
Alastair has been instrumental in
transforming the Group from a small
commodities business to the prominent
diversified financial services business
that it is today.
Alastair began his career with Bell Potter
in 1983 before moving to Sydney in 1986
to help Colin Bell grow the business.
He took on the role of Group Managing
Director before eventually assuming the
role of Executive Chairman for the Group.
Our success as a business is in no small
part attributable to Alastair, and I want
to thank him for his service as Executive
Chairman. We will continue to benefit
from his depth of understanding of both
the financial services industry and the
business in his new role as a
Non-Executive Director of BFG.
I’d also like to thank you, our
shareholders, our board, our staff and
our clients for your ongoing support
and trust in us.
Brian Wilson AO
Chairman, Bell Financial Group
2023 was a difficult year for markets,
and for financial services businesses
generally. Inflationary pressures, higher
interest rates and geopolitical issues
combined to impact investor confidence
and financial market activity.
In this difficult trading environment,
Bell Financial Group continued to deliver
solid results, with profit after tax of
$24.3m for the year. It was pleasing to
see strong growth in key business
areas and a significant rise in recurring
revenues, including a 19.7% increase in
revenues from our portfolio lending and
structured loan business, and a 6.2%
increase in revenues in our Technology
& Platforms business.
Bell Financial Group is built on three
pillars: integrity, efficiency, and a focus
on the long-term.
Our commitment to integrity and client
service, and the trust our clients place in
us, is reflected in our funds under advice,
which increased to a new high of $79.8bn.
Meanwhile, our focus on efficiency and
the long term led to a deepening use
of proprietary technology to optimise
and balance the interests of all of our
stakeholders, including our shareholders,
clients, staff and regulators.
Our decision to invest in Third Party
Platform (TPP) in 2007, then acquire 100%
of the business in 2018, was strategic and
a very good example of the Bell Financial
Group approach, and the benefits of
long-term thinking. TPP is now integral
to our business and our ongoing growth,
providing the clearing engine for both
our own businesses and for our clients,
underpinning cost savings and future
revenue opportunities.
2023 was also a year of change in our
leadership team, as longstanding
succession plans came into effect.
I’m delighted to welcome Arnie Selvarajah
and Dean Davenport as our new Co-CEOs,
effective from 1 November 2023. Together,
they combine more than 35 years’
experience in executive roles with Bell
Financial Group and TPP, alongside
broader experience of the financial services
industry. Their deep understanding of our
business, our clients, and our market
will be critical in continuing to carry
the business forward.
02
Bell Financial GroupAnnual Report 2023 OPERATING AND FINANCIAL REVIEW
Despite challenging market conditions,
it is very pleasing to report the Group
recorded a 2023 full year profit after
tax of $24.3 million.
It was the second difficult year in
succession for equities markets and as
a result, broking businesses. Persistently
high inflation, further interest rate rises,
and escalating geopolitical tensions
contributed to an ongoing lack of
investor confidence across markets.
The Russia–Ukraine conflict continues
with no end in sight. The Hamas attacks
in southern Israel and the subsequent
Gaza invasion shocked the world,
and tensions between China and
the West persist, albeit with signs
of improvement.
Notwithstanding this backdrop,
all businesses remained profitable.
The result clearly demonstrates the
fundamental strength and diversification
within the Group. While traditional
broking remained challenging, momentum
continued in our Technology & Platforms
and Products & Services businesses,
with both divisions again producing
record revenue and earnings. Their
combined contribution is becoming
increasingly meaningful which is clearly
evident in the 2023 results where they
represented 32.8% of Group revenue, and
83.1% of Group profit. We expect earnings
growth in these businesses will continue.
Our Equity Capital Markets (ECM) division
made another noteworthy contribution
despite the many factors weighing on
financial markets. Deal momentum was
particularly strong in the final quarter,
and has carried into the start of 2024,
giving us a good start to the new year.
We successfully executed 87 ECM
transactions across the year, raising
more than $1.9 billion in new capital.
This placed us sixth in the Australian
Equity Capital Market league tables
according to LSEG’s 2023 Global Equity
Capital Markets Deals Intelligence.
Throughout the year we were focused
on new initiatives, the completion
of projects, and there were changes
to the leadership team.
We held our inaugural Emerging Leaders
Program, where we are developing the
next generation of Advisers and Managers
from within our business.
The migration of Bell Potter Securities
clients to Third Party Platform's (TPP's)
proprietary clearing platform was
completed during 2023, and we now
operate on a single integrated middle
and back office platform. This delivers
cost synergies, reliability and scale,
and paves the way for an improved,
streamlined client experience
going forward.
We recently appointed a new Group
Head of Sales who is focused on further
developing the distribution channels
for our products and services.
We continued to strengthen our
cybersecurity threat intelligence and
security framework, and we refined
our security practices for faster threat
detection and response. Staff awareness
training is ongoing, further enhancing
our cybersecurity posture.
2023 also saw the finalisation of
AUSTRAC’s review of our Anti-Money
Laundering/Counter-Terrorism Financing
(AML/CTF) compliance measures, with
AUSTRAC concluding their review with
no further regulatory action. This was
a pleasing outcome, which provides
certainty to our shareholders and clients.
In December we made the difficult
decision to close the Bell Commodities
Futures business. This decision was
not taken lightly given the historical
significance of the Futures business,
however persistent pricing, cost pressures,
and the difficulty in achieving scale no
longer justified the capital commitment
required to operate the business.
This year has also seen changes in our
leadership team with Alastair Provan
retiring from his position as Executive
Chairman in November. For the past
40 years Alastair has played an
instrumental role in both managing
and creating the business that it is
today. While Alastair steps back from
day-to-day responsibilities, he will
remain involved with the Group
as a Non-Executive Director. The
transition from Alastair’s leadership was
several years in the planning, and we
assumed our roles as Co-CEO following
his retirement. Between the two of us,
we have extensive financial services
experience, including a combined 45 years
in executive roles with Bell Financial Group.
03
OUTLOOK
Equity markets showed signs of
improvement in the final quarter of 2023,
and there are early signs this is carrying
into 2024.
Our ECM deal pipeline remains strong,
and a number of deals completed in
January giving us a good start to 2024.
There are also some positive signs
activity is improving in secondary
markets, which have been assisted with
Australian equity markets hitting record
highs in early February.
We will focus on improving the
distribution of our products and services
through our internal Adviser network,
as well as developing new distribution
channels. We also expect to start
realising the full cost synergies and
benefits of scale now that we are
operating on a single integrated
middle and back office platform.
We intend looking for growth opportunities,
both internal and external that are
complementary to, and leverage our core
strengths, and we will continue to invest
in our people, our technology
and our products.
We are both excited to take on the
challenges that we know that lie ahead.
We have an outstanding leadership
team, and with the support and ongoing
enthusiasm of everyone across the Group,
we believe we are well positioned to lead
the Group into its next phase of growth.
Finally, we would like to thank our
staff, our clients, and our shareholders
for their ongoing support.
Arnie Selvarajah
Co-CEO, Bell Financial Group
Dean Davenport
Co-CEO, Bell Financial Group
Bell Financial GroupAnnual Report 2023
OPERATING AND FINANCIAL REVIEW
OPERATING AND FINANCIAL REVIEW (CONTINUED)
1. GROUP
REVENUE ($M)
297.2
292.5
237.6
240.1
235.7
224.8
159.2
165.3
251.4
198.5
17.9
35.0
24.3
37.2
27.8
30.4
36.4
39.9
41.9
44.5
300
250
200
150
100
50
0
PROFIT AFTER TAX ($M)
50
40
30
20
10
0
32.4
21.8
2.5
8.2
46.7
44.1
33.2
28.8
25.7
8.4
8.4
24.3
4.2
8.2
4.8
10.5
11.0
12.0
4.2
9.3
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
Products
& Services*
Technology
& Platforms**
Retail and
Wholesale
Products
& Services
Technology
& Platforms
Retail and
Wholesale
Growth in Products & Services and
Technology & Platforms revenue
was offset by a reduction in Retail
and Wholesale brokerage revenues.
* Based on Bell Potter Capital net interest revenue.
** Includes clearing revenue paid by
Bell Potter Securities and product fees
paid by Bell Potter Capital.
2023 profit after tax was $24.3 million,
down 5.3% on 2022. A credible result in
difficult markets. The pleasing aspect
was the growing contributions by the
Technology & Platforms and Products
& Services businesses.
EARNINGS PER SHARE (CENTS)
RETURN ON EQUITY
FUNDS UNDER ADVICE ($B)
16
14
12
10
8
6
4
2
0
14.6
13.8
10.2
8.0
7.6
2019
2020
2021
2022
2023
35%
30%
25%
20%
22.0%
29.0%
26.4%
15%
10%
5%
0%
15.7%
15.0%
2019
2020
2021
2022
2023
80
70
60
50
40
30
20
10
0
79.8
75.9
72.8
63.9
58.4
2019
2020
2021
2022
2023
2023 earnings per share (EPS)
of 7.6 cents, down 5% on 2022.
2023 return on equity (ROE) was 15%,
down 4.5% on 2022.
Funds under advice (FUA) at
31 December 2023 were at a record
$79.8 billion, up 9.6% on December 2022.
The S&P/ASX200 index was up 7.8%
over the same period.
04
Bell Financial GroupAnnual Report 2023 TECHNOLOGY & PLATFORMS AND
PRODUCTS & SERVICES REVENUE
BREAKDOWN ($M)
DIVIDENDS PAID ($M) AND
GROSS DIVIDEND YIELD (%)
85
80
75
70
65
60
55
50
45
40
35
30
25
20
15
10
5
0
52.9
17.9
15.2
12.9
3.7
3.2
2019
80.9
36.4
72.3
30.4
67.7
27.8
61.5
24.3
17.6
18.4
19.6
4.0
0.8
2022
21.4
3.9
0.8
2023
Superannuation
Other
15.6
18.4
14.8
3.7
3.1
2020
16.5
4.1
0.9
2021
TPP Platform revenue
Portfolio Administration
Services (PAS)
Portfolio Lending,
client funds at call and
structured loan products
The Technology & Platforms and
Products & Services businesses
continue to provide growing recurring
revenue streams. Revenue in grew
11.9%, representing 32.8% of total
Group revenue, and profit grew 16.9%
representing 83.1% of total Group profit.
A 5-year compound annual growth rate
(CAGR) of 11.2% (revenue) and 17.3%
(profit) respectively.
BFG SHARE PRICE MOVEMENT
January 2019 – December 2023
160%
140%
120%
100%
80%
60%
40%
20%
0
-20%
-40%
-60%
$45
$40
$35
$30
$25
$20
$15
$10
$5
$0
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
$35.3
$33.6
$25.6
$22.5
$22.5
9.6%
8.2%
8.4%
10.2%
7.4%
2019
2019
2020
2020
2021
2021
2022
2022
2023
2023
Dividends Paid ($M)
Gross Dividend Yield
$22.5 million in fully franked dividends
were paid in 2023, representing a gross
dividend yield of 7.4% (based on the
31 December 2023 BFG share price
of $1.35).
$2.00
$1.75
$1.50
$1.25
$1.00
$0.75
$0.50
1 Jan 19
1 Jan 20
1 Jan 21
1 Jan 22
1 Jan 23
XJO %
BFG Share Price ($A)
05
Bell Financial GroupAnnual Report 2023 OPERATING AND FINANCIAL REVIEW
OPERATING AND FINANCIAL REVIEW (CONTINUED)
2. BROKING – RETAIL AND INSTITUTIONAL
BELL POTTER SECURITIES (BPS)
RETAIL AND INSTITUTIONAL EQUITIES
BROKERAGE AND COMMODITIES AND
FX REVENUE ($M)
130
120
110
100
90
80
70
60
50
40
30
20
10
0
106.5
76.6
18.0
11.9
2019
117.2
115.9
85.2
85.4
20.5
11.5
2020
19.0
11.5
2021
103.3
74.0
16.1
13.2
2022
95.0
66.4
15.0
13.6
2023
Commodities
and FX
Institutional
Equities
Retail
Equities
Brokerage revenue from the Retail and
Institutional desks and the Commodities
and FX desks was $95 million
(down 8% on 2022).
ECM AND SYNDICATION REVENUE ($M)
120
110
100
90
80
70
60
50
40
30
20
10
0
109.0
104.4
83.0
106.4
57.0
56.1
77.7
99.8
52.0
52.4
5.3
2019
2.6
2020
4.6
2021
5.0
2022
3.7
2023
Syndication
ECM
Equity Capital Markets (ECM) and
Syndication revenue was down slightly in
2023. We executed 87 transactions raising in
excess of $1.9 billion in new equity capital
over the year, placing us sixth in the
Australian Equity Capital Market league
tables according to LSEG’s 2023 Global
Equity Capital Markets Deals Intelligence.
3. TECHNOLOGY & PLATFORMS
THIRD PARTY PLATFORM (TPP)
PROFIT AFTER TAX ($M)
RETAIL AND INSTITUTIONAL BROKING
REVENUE ($M)
40
35
30
25
20
15
10
5
0
33.2
28.8
21.8
8.4
2019
2020
2021
2022
4.2
2023
40
35
30
25
20
15
10
5
0
18.0
3.4
8.6
6.0
2019
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
36.4
8.6
4.3
1.2
16.1
7.7
7.4
6.5
6.2
2020
2021
2022
2023
Desktop Broker
Bell Direct*
White Label
Bell Direct Advantage
Third Party Clearing**
$4.2 million profit after tax, down
50.6% on 2022. A direct reflection
of difficult market conditions.
$36.4 million revenue, a 19.7% increase
on 2022. More than ten consecutive years
of strong growth.
Third Party Clearing (TPP) operates five
distinct businesses:
• Bell Direct – Proprietary online retail
broking business.
• Bell Direct Advantage – High Net
Wealth desk.
• Desktop Broker – Execution and
clearing services for the financial
planning industry.
• White Label Online Broking – Turn-key
online broking solution.
Clients include Macquarie and HSBC.
• Third Party Clearing – TPP is an ASX
General Participant, enabling it to provide
Third Party Clearing services to the
stockbroking industry.
* Includes product fees paid by Bell Potter Capital.
** Includes Bell Potter Securities third party clearing
revenue.
PROFIT AFTER TAX ($M)
TECHNOLOGY & PLATFORMS
9
8
7
6
5
4
3
2
1
0
8.2
6.2
4.8
4.2
2.5
2019
2020
2021
2022
2023
$8.2 million net profit after tax, a 32.8%
increase on 2022. And a 5-year (CAGR)
of 34.7%.
06
Bell Financial GroupAnnual Report 2023 4. PRODUCTS & SERVICES
BELL POTTER CAPITAL (BPC)
REVENUE ($M)
PROFIT AFTER TAX ($M)
LOAN BOOK ($M)
50
45
40
35
30
25
20
15
10
5
0
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 and
Super Solutions
Portfolio Lending
& Client Funds
At Call
44.6
22.4
21.4
0.8
2023
Other
14
12
10
8
6
4
2
0
9.3
5.2
3.1
1.1
2020
8.2
5.2
1.8
1.1
2019
PAS and
Super Solutions
12.0
6.2
5.5
0.3
2023
Other
10.5
11.1
5.7
6.2
4.1
0.3
2021
5.0
0.3
2022
Portfolio Lending
& Client Funds
At Call
600
500
400
300
200
100
0
545.0
470.0
534.0
496.0
545.0
2019
2020
2021
2022
2023
Bell Potter Capital (BPC) revenue
increased 6.2% year on year
to $44.5 million.
$12 million profit after tax, a 7.9%
increase on 2022, and a 5-year CAGR
of 10%.
The margin loan book increased
9.9% to $545 million in 2023.
BELL FINANCIAL TRUST ($M)
CLIENT FUNDS AT CALL
PORTFOLIO ADMINISTRATION AND
SUPERANNUATION ASSETS ($B)
500
450
400
350
300
250
200
150
100
50
0
481.0
461.0
437.0
382.0
393.0
2019
2020
2021
2022
2023
6.0
5.0
4.0
3.0
2.0
1.0
0.0
4.1
4.2
4.5
4.2
5.1
2019
2020
2021
2022
2023
Client funds at call closed the year
at $393 million, down 14.9%.
Funds under administration in our
Portfolio Administration Service (PAS)
and our superannuation products
increased 20.1% in 2023 – a pleasing
result in a difficult market.
$8.2 million net profit after tax, a 32.8%
increase on 2022. And a 5-year (CAGR)
of 34.7%.
07
Bell Financial GroupAnnual Report 2023 DIRECTORS’ REPORT
For the year ended 31 December 2023
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 2023.
Board of Directors
As at the date of this report,
the Directors of Bell Financial Group and
their qualifications, experience and
special responsibilities are stated below.
Other than Andrew Bell, the Directors
each held office throughout the entire
financial year ended 31 December 2023.
Mr Bell joined the Board as a Non-Executive
Director effective 1 November 2023.
Mr Provan retired as the Executive
Chairman effective 31 October 2023,
however he remains on the board
as a Non-Executive Director. Mr Wilson
became the Chairman effective
1 November 2023.
BRIAN WILSON AO
ALASTAIR PROVAN
MCom (Hons), Hon DUniv
Mr Provan is a Non-Executive Director.
He was the Executive Chairman of Bell
Financial Group from August 2019 to
October 2023. Prior to that he was the
Managing Director. Mr Provan joined Bell
Commodities in 1983 and held a number
of dealing and management roles prior
to becoming Managing Director in 1989.
Mr Wilson is the Chairman and he 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. Mr Wilson was
formerly Chairman of Australia’s Foreign
Investment Review Board, Chancellor
of University of Technology Sydney,
a member of the Payments System
Board of the Reserve Bank of Australia,
a Senior Advisor to The Carlyle Group
and Chairman of the UTS Foundation.
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.
08
Bell Financial GroupAnnual Report 2023 GRAHAM CUBBIN
CHRISTINE FELDMANIS
ANDREW BELL
BEcon (Hons), FAICD
BComm, MAppFin, SFFin, TFASFA, FAICD,
CPA, CSA, AGIA, JP
BComm, MBA
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.
Ms Feldmanis is an Independent 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, Rabobank Australia Ltd, Utilities of
Australia Pty Ltd, 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.
Andrew Bell is a Non-Executive Director.
He was appointed to the Board in
November 2023. Mr Bell joined Bell
Commodities alongside his brother Colin
Bell in 1978, and he helped to build and
develop Bell Financial Group’s businesses
in derivatives, equities and capital
markets. Mr Bell has been a Director
of Bell Potter Securities Ltd and Bell
Potter Capital Ltd since 2001. Prior
to joining Bell Commodities, Mr Bell
was an executive at investment banks
in Melbourne and London. He is an
Adviser to retail and corporate clients
at Bell Potter Securities.
Other listed companies – past three years
Other listed companies – past three years
> Non-Executive Director,
White Energy Company Limited
(February 2010-March 2023)
> Non-Executive Director,
Omni Bridgeway Ltd
(May 2008-present)
> Non-Executive Director,
McPherson’s Limited
(September 2010-February 2022)
> Non-Executive Director,
United Malt Group Ltd
(January 2023-November 2023)
> Non-Executive Director,
WPP AUNZ Limited
(May 2008-May 2021)
> Non-Executive Director,
Perpetual Equity Investment Company Ltd
(September 2014-October 2020)
09
Bell Financial GroupAnnual Report 2023 DIRECTORS’ REPORT (CONTINUED)
Co‑Chief Executive Officers
ARNIE SELVARAJAH
BComm, MBA (Executive) (AGSM), ACA, MSIAA
Mr Selvarajah is the Co-Chief Executive Officer of Bell Financial Group (appointed November 2023). He joined Bell Financial Group in
2008 and held the position of Chief Executive Officer of the Technology & Platforms business, Third Party Platform Pty Ltd, for more
than 15 years. Mr Selvarajah has been a Director of Bell Potter Securities Ltd since 2018, Third Party Platform Pty Ltd since 2010 and
Bell Potter Capital Ltd since 2023. Prior to joining Bell Financial Group, Mr Selvarajah held senior roles with CBA, CommSec and
Bankers Trust, as well within the FMCG sector at National Foods.
DEAN DAVENPORT
BBus
Mr Davenport is the Co-Chief Executive Officer of Bell Financial Group (appointed November 2023). He is also currently the Acting
Chief Financial Officer. Mr Davenport was previously the Chief Financial Officer and Chief Operating Officer of Bell Financial Group
for over 25 years. Mr Davenport is a qualified Chartered Accountant with over 30 years’ financial services experience. He has been
a Director of Bell Potter Securities Ltd since 2013, Third Party Platform Pty Ltd since 2020 and Bell Potter Capital Ltd since 2007.
Prior to joining Bell Financial Group, Mr Davenport was employed at KPMG.
Principal activities
The principal activities of the 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 December 2023, Bell Potter Securities Limited commenced the closure of its futures business (Bell Commodities) and will cease
executing and clearing futures and options contracts in 1Q 2024. In the opinion of the Directors, there were no other significant
changes to the principal activities of the Group during the financial year.
Operating and financial review
Please refer to pages 3 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.
10
Bell Financial GroupAnnual Report 2023 Dividends
Subsequent to the year ended 31 December 2023, the Directors have resolved to pay a fully franked final dividend of 4.0 cents
per share. This dividend is payable on 14 March 2024.
Dividends paid to shareholders during the financial year ended 31 December 2023 were as follows:
Dividend
2023
Interim 2023 ordinary
Final 2022 ordinary
2022
Interim 2022 ordinary
Final 2021 ordinary
Per share
3.0 cents
4.5 cents
2.5 cents
6.5 cents
Total
$’000
9,622
14,333
8,019
20,848
Fully
Franked
Date of payment
Yes
Yes
Yes
Yes
12 September 2023
15 March 2023
6 September 2022
16 March 2022
State of affairs
There were no other significant changes in the Group’s state of affairs during the financial year ended 31 December 2023 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), and individual
attendance by Directors at those meetings at which they were eligible to attend and vote during the financial year, is stated below:
Director
Brian Wilson AO
Alastair Provan
Graham Cubbin
Christine Feldmanis
Andrew Bell1
Board
GRAC
Held
6
6
6
6
1
Attended
6
6
6
6
1
Held
4
–
4
4
–
Attended
4
–
4
4
–
1. Mr A Bell was appointed to the Board on 1 November 2023.
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
Brian Wilson AO
Alastair Provan1
Graham Cubbin
Christine Feldmanis
Andrew Bell
Fully paid
ordinary
shares
1,200,000
5,939,998
216,000
175,000
2,738,000
Deemed
relevant
interest
–
146,355,350
–
–
–
Total
1,200,000
152,295,348
216,000
175,000
2,738,000
1. Mr 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.
The following Directors and/or their related parties hold units in the Bell Financial Trust, a registered scheme that is made available
by a related body corporate of Bell Financial Group:
• Mr Provan and his related parties – 3 units,
• Ms Feldmanis’s related party – 1 unit, and
• Mr A Bell and his related parties – 4 units.
11
Bell Financial GroupAnnual Report 2023 DIRECTORS’ REPORT (CONTINUED)
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.
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,
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 2023
totalled $31,721 (2022: $31,104). 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)
('Corporations Act') and did not compromise the auditor independence requirements of the Corporations Act, 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.
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 and has significantly affected
or may significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group, in future
financial years.
12
Bell Financial GroupAnnual Report 2023 Remuneration Report (audited)
This Remuneration Report describes Bell Financial Group’s ‘key management personnel’ (KMP) remuneration arrangements as
required by the Corporations Act. KMP include senior executives with the authority and responsibility for planning, directing and
controlling the activities of the Group as well as Non-Executive Directors (NEDs). The NEDs are required by the Corporations Act
to be included as KMP for the purposes of disclosures in the Remuneration Report, however do not consider themselves part
of management. In this report, "Executive KMP" refers to KMP who are not on the Board.
1. KMP
Name
Non‑Executive Directors
Brian Wilson AO1
Alastair Provan2
Graham Cubbin
Christine Feldmanis
Andrew Bell3
Senior Executives
Arnie Selvarajah
Dean Davenport
Position
Term as KMP for 2023
Independent Chairman
Non-Executive Director
Independent Director
Independent Director
Non-Executive Director
Full year
Full year
Full year
Full year
Full year
Co-CEO
Co-CEO and Acting Chief Financial Officer
Lewis Bell
Rowan Fell
Head of Compliance
CEO of Bell Potter Capital Ltd
1. Mr Wilson became the Chairman on 1 November 2023.
Appointed as Co-CEO on 1 November 2023
Full year
Appointed as Co-CEO on 1 November 2023
Ceased to be a KMP on 31 October 2023
Ceased to be a KMP on 31 October 2023
2. Mr Provan retired as the Executive Chairman on 31 October 2023 and remains on the Board as a Non-Executive Director.
3. Mr A Bell was appointed to the Board on 1 November 2023.
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. 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 for the financial year ended 31 December 2023, the Board had 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
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
2023
$24,324
$1.35
7.6
$24,055
Bell Financial Group has established two equity-based plans to assist in the attraction, retention and motivation of Executive KMP,
management and employees of the Group, 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.
13
Bell Financial GroupAnnual Report 2023 DIRECTORS’ REPORT (CONTINUED)
Remuneration Report (audited) (continued)
3. Fixed compensation
Fixed compensation consists of base compensation as well as employer contributions to superannuation funds. Compensation levels
are reviewed annually through a process that considers individual performance and that of the overall Group.
4. Commission
Commission entitlements are determined by the Board from time to time and aim to align the remuneration of Executive KMP and
Advisers with the Group’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 Bell Financial Group’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 Group.
6. Short‑term incentive bonus
The Group 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.
For the financial year ended 31 December 2023, there were 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 Group’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 for the year ended 31 December 2023, which is a discretionary annual cash bonus,
up to three times annual salary, determined based on the Group’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 Group’s financial performance and growth.
7. Long‑term incentive plan (LTIP)
The LTIP is part of the Group’s remuneration strategy and is designed to align the interests of the Group’s Executive KMP, other
executives and advisers with the interests of shareholders to assist the Group 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 Group 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 Group.
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 2023.
14
Bell Financial GroupAnnual Report 2023 8. Service agreements
8.1 Executive Chairman
Bell Financial Group entered into a service agreement with its former Executive Chairman, Alastair Provan effective from listing
in December 2007. The agreement set 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 8.5.
Mr Provan retired as Executive Chairman effective 31 October 2023. The Board waived the requirement for Mr Provan to provide
six months’ written notice. He remains on the Board as a Non-Executive Director.
8.2 Co-CEOs
Effective 1 November 2023 the Board appointed new Co-CEOs, Arnie Selvarajah and Dean Davenport, who were internal appointments.
The Board has engaged a remuneration consultant to provide advice on appropriate short-term and long-term incentives for the
Co-CEOs and will finalise their remuneration after reviewing that advice. Effective 1 November 2023, each Co-CEO has been paid fixed
remuneration of $600,000 (including superannuation) p.a. For the financial year ended 31 December 2023, each Co-CEO was paid an
STI cash bonus of $275,000 (including superannuation). A summary of Mr Selvarajah’s and Mr Davenport’s remuneration is set out
in the KMP remuneration table in Section 8.5.
8.3 Senior Executives
All key executives are permanent employees of Bell Financial Group. 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 Group may terminate an employment
contract by providing written notice or making payment in lieu of notice in accordance with the Group’s termination policies.
The Group may terminate an employment contract at any time for serious misconduct.
8.4 Non-Executive Directors
On appointment to the Board, each 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. Non-Executive Directors do
not receive bonuses, incentive payments or equity-based pay. They receive a fixed annual fee inclusive of compulsory superannuation
contributions. Each Non-Executive Director was paid an annual fee of $100,000 (including superannuation) for the year ended
31 December 2023.
15
Bell Financial GroupAnnual Report 2023 DIRECTORS’ REPORT (CONTINUED)
Remuneration Report (audited) (continued)
8. Service agreements (continued)
8.5 KMP remuneration
Details of the remuneration of each KMP are tabled below.
Non‑Executive Directors
Brian Wilson AO, Chairman
Alastair Provan1
Graham Cubbin
Christine Feldmanis
Andrew Bell2
Total compensation:
Directors (consolidated)
Salary
& fees
$
90,294
90,703
446,799
519,846
90,294
90,703
100,000
100,000
15,015
-
742,402
801,252
Short‑term
STI
cash bonus
$
Other short
term benefits*
$
‑
-
500,000
500,000
‑
-
‑
-
‑
-
500,000
500,000
‑
-
34,983
41,866
‑
-
‑
-
‑
-
34,983
41,866
Total
90,294
90,703
981,782
1,061,712
90,294
90,703
100,000
100,000
15,015
-
1,277,385
1,343,118
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
* Mr Provan’s 2022 other short-term and other long-term benefits did not reflect the entitlements earned in 2022. The 2022 amounts have therefore been
restated to include the entitlements earned in that year. All of Mr Provan’s accrued leave entitlements were paid out upon his retirement as
Executive Chairman on 31 October 2023.
1. Mr Provan retired as the Executive Chairman on 31 October 2023 and remains on the Board as a Non-Executive Director. Includes $16,667 as remuneration
for Non-Executive Director effective 1 November 2023.
2. Mr A Bell was appointed as a Non-Executive Director on 1 November 2023.
Senior Executives
Arnie Selvarajah, Co-CEO1
Dean Davenport, Co-CEO and Acting Chief
Financial Officer2
Lewis Bell, Former Head of Compliance3
Rowan Fell, CEO of Bell Potter Capital3
Andrew Bell, Executive Director
of Bell Potter Securities3
Total compensation:
Executives (consolidated)
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Salary
& fees
$
95,434
-
381,218
324,359
302,806
365,072
210,200
274,578
188,562
283,129
1,178,220
1,247,138
Short‑term
STI
cash bonus
$
Other short
term benefits*
$
275,000
-
275,000
225,000
‑
-
500,000
550,000
‑
-
1,050,000
775,000
‑
-
24,615
14,807
‑
-
41,884
27,922
‑
-
66,499
42,729
Total
370,434
-
680,833
564,166
302,806
365,072
752,084
852,500
188,562
283,129
2,294,719
2,064,867
* The other short-term benefit amounts in 2022 have been classified from other long-term benefits to more appropriately reflect the nature of leave
entitlements received.
1. Mr Selvarajah became an Executive KMP on 1 November 2023 when he was appointed as a Co-Chief Executive Officer.
2. Mr Davenport was an Executive KMP for the entire financial year ending 31 December 2023. He was appointed as a Co-Chief Executive Officer on
1 November 2023. Prior to that he was the Chief Financial Officer. Currently Mr Davenport is the Co-Chief Executive Officer and the Acting Chief
Financial Officer.
3. Mr L Bell, Mr A Bell and Mr Fell ceased to be Executive KMP on 31 October 2023.
8.6 Options and equity instruments
No options over the Group’s shares or other equity instruments are held by KMP.
16
Post‑
employment
Superannuation
benefits
$
Other
long term*
Termination
benefits
Share‑based
payments
Proportion of
remuneration
Value of options
performance
as proportion of
related
remuneration
9,706
9,297
23,431
24,430
9,706
9,297
‑
-
-
1,652
44,495
43,024
$
-
4,566
27,500
27,500
21,779
24,430
22,917
27,500
19,722
24,004
96,484
103,434
8,077
9,616
8,077
9,616
$
‑
-
‑
-
‑
-
‑
-
‑
-
‑
-
‑
-
‑
-
‑
-
‑
-
$
–
–
–
–
–
–
–
–
–
–
–
–
$
–
–
–
–
–
–
–
–
–
–
–
–
$
–
–
–
–
–
–
–
–
–
–
–
–
$
–
–
–
–
–
–
–
–
–
–
–
–
Total
$
100,000
100,000
1,013,290
1,095,758
100,000
100,000
100,000
100,000
16,667
-
1,329,957
1,395,758
Total
$
-
375,000
708,333
591,666
324,585
389,502
775,001
880,000
208,284
307,133
2,391,203
2,168,301
%
0%
0%
50%
46%
0%
0%
0%
0%
0%
0%
38%
36%
%
73%
0%
39%
38%
0%
0%
65%
63%
100%
100%
53%
50%
%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Post‑
employment
Superannuation
benefits
Other
long term
$
Termination
benefits
Share‑based
payments
Proportion of
remuneration
Value of options
performance
as proportion of
related
remuneration
Bell Financial GroupAnnual Report 2023 Remuneration Report (audited) (continued)
8. Service agreements (continued)
8.5 KMP remuneration
Details of the remuneration of each KMP are tabled below.
* Mr Provan’s 2022 other short-term and other long-term benefits did not reflect the entitlements earned in 2022. The 2022 amounts have therefore been
restated to include the entitlements earned in that year. All of Mr Provan’s accrued leave entitlements were paid out upon his retirement as
Executive Chairman on 31 October 2023.
1. Mr Provan retired as the Executive Chairman on 31 October 2023 and remains on the Board as a Non-Executive Director. Includes $16,667 as remuneration
for Non-Executive Director effective 1 November 2023.
2. Mr A Bell was appointed as a Non-Executive Director on 1 November 2023.
Non‑Executive Directors
Brian Wilson AO, Chairman
Alastair Provan1
Graham Cubbin
Christine Feldmanis
Andrew Bell2
Total compensation:
Directors (consolidated)
Senior Executives
Arnie Selvarajah, Co-CEO1
Dean Davenport, Co-CEO and Acting Chief
Financial Officer2
Lewis Bell, Former Head of Compliance3
Rowan Fell, CEO of Bell Potter Capital3
Andrew Bell, Executive Director
of Bell Potter Securities3
Total compensation:
Executives (consolidated)
Short‑term
STI
Other short
cash bonus
term benefits*
500,000
500,000
34,983
41,866
500,000
500,000
34,983
41,866
Short‑term
Salary
& fees
STI
Other short
cash bonus
term benefits*
95,434
275,000
275,000
225,000
500,000
550,000
24,615
14,807
41,884
27,922
Salary
& fees
$
90,294
90,703
446,799
519,846
90,294
90,703
100,000
100,000
15,015
-
742,402
801,252
$
-
381,218
324,359
302,806
365,072
210,200
274,578
188,562
283,129
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
$
‑
-
‑
-
‑
-
‑
-
$
-
‑
-
‑
-
$
‑
-
‑
-
‑
-
‑
-
$
‑
-
‑
-
‑
-
Total
90,294
90,703
981,782
1,061,712
90,294
90,703
100,000
100,000
15,015
-
1,277,385
1,343,118
Total
370,434
-
680,833
564,166
302,806
365,072
752,084
852,500
188,562
283,129
1,178,220
1,247,138
1,050,000
775,000
66,499
42,729
2,294,719
2,064,867
* The other short-term benefit amounts in 2022 have been classified from other long-term benefits to more appropriately reflect the nature of leave
1. Mr Selvarajah became an Executive KMP on 1 November 2023 when he was appointed as a Co-Chief Executive Officer.
2. Mr Davenport was an Executive KMP for the entire financial year ending 31 December 2023. He was appointed as a Co-Chief Executive Officer on
1 November 2023. Prior to that he was the Chief Financial Officer. Currently Mr Davenport is the Co-Chief Executive Officer and the Acting Chief
entitlements received.
Financial Officer.
3. Mr L Bell, Mr A Bell and Mr Fell ceased to be Executive KMP on 31 October 2023.
8.6 Options and equity instruments
No options over the Group’s shares or other equity instruments are held by KMP.
Post‑
employment
Superannuation
benefits
$
Other
long term*
$
Termination
benefits
$
Share‑based
payments
$
9,706
9,297
23,431
24,430
9,706
9,297
‑
-
1,652
-
44,495
43,024
‑
-
8,077
9,616
‑
-
‑
-
‑
-
8,077
9,616
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Post‑
employment
Superannuation
benefits
$
Other
long term
$
Termination
benefits
$
Share‑based
payments
$
4,566
-
27,500
27,500
21,779
24,430
22,917
27,500
19,722
24,004
96,484
103,434
‑
-
‑
-
‑
-
‑
-
‑
-
‑
-
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Proportion of
remuneration
performance
related
%
Value of options
as proportion of
remuneration
%
0%
0%
50%
46%
0%
0%
0%
0%
0%
0%
38%
36%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Proportion of
remuneration
performance
related
%
Value of options
as proportion of
remuneration
%
73%
0%
39%
38%
0%
0%
65%
63%
100%
100%
53%
50%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Total
$
100,000
100,000
1,013,290
1,095,758
100,000
100,000
100,000
100,000
16,667
-
1,329,957
1,395,758
Total
$
375,000
-
708,333
591,666
324,585
389,502
775,001
880,000
208,284
307,133
2,391,203
2,168,301
17
Bell Financial GroupAnnual Report 2023 DIRECTORS’ REPORT (CONTINUED)
Remuneration Report (audited) (continued)
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 2023
$
1,541,295
1,003,863
88,940
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:
Andrew Bell
Rowan Fell
Balance
1 Jan 23
$
463,417
1,005,515
Balance
31 Dec 23
$
199,606
644,542
Interest
paid and
payable in
period
$
20,334
60,306
Highest
balance
in period1
$
576,261
1,334,165
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.
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 2023.
This report is made in accordance with a resolution of the Directors.
Brian Wilson AO
Independent Chairman
15 February 2024
18
Bell Financial GroupAnnual Report 2023 LEAD AUDITOR’S INDEPENDENCE DECLARATION
For the year ended 31 December 2023
19
Bell Financial GroupAnnual Report 2023 Financial Statements
STATEMENT OF PROFIT OR LOSS
For the year ended 31 December 2023
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
2023
196,510
49,934
(1,407)
1,965
247,002
(140,275)
(10,958)
(3,065)
(10,895)
(7,897)
(5,174)
(3,358)
(18,203)
(11,827)
(211,652)
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)
35,350
37,008
12.
(11,026)
(11,321)
24,324
24,324
24,324
Cents
7.6
7.6
25,687
25,687
25,687
Cents
8.0
8.0
28.
28.
The notes on pages 25 to 63 are an integral part of these Consolidated Financial Statements.
20
Bell Financial GroupAnnual Report 2023 STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2023
Profit for the year
Other comprehensive income/(loss)
Items that may be classified to profit or loss
Change in fair value of cash flow hedge, net of tax
Foreign operations – foreign currency translation differences, net of tax
Other comprehensive income/(loss) for the year, net of tax
Consolidated
$’000
Note
2023
24,324
2022
25,687
(386)
156
(230)
385
505
890
Total comprehensive income for the year
24,094
26,577
Attributable to:
Equity holders of the Company
Non-controlling interests
Total comprehensive income for the year
24,094
–
24,094
26,577
–
26,577
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 2023 STATEMENT OF FINANCIAL POSITION
As at 31 December 2023
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
2023
2022
13.
14.
15.
30.
19.
31.
18.
16.
17.
17.
20.
21.
22.
31.
30.
24.
23.
26.
26.
26.
26.
216,780
176,602
1,337
15,593
81
546,149
40,047
4,765
1,512
130,413
15,525
1,148,804
257,626
566,518
1,672
48,497
158
38,390
500
913,361
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
235,443
235,404
204,237
(28,858)
(1,247)
61,311
235,443
204,237
(28,858)
(1,017)
61,042
235,404
The notes on pages 25 to 63 are an integral part of these Consolidated Financial Statements.
22
Bell Financial GroupAnnual Report 2023 STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2023
Share
Capital
$ ‘000
204,237
Other
Equity
$ ‘000
(28,858)
Treasury
Shares
Reserve
$ ‘000
(1,267)
Share
Based
Payments
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
506
–
–
–
–
–
–
1,205
–
–
–
25,687
385
506
891
26,578
–
–
–
–
–
(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.
Share
Capital
$ ‘000
204,237
Other
Equity
$ ‘000
(28,858)
Treasury
Shares
Reserve
$ ‘000
(2,620)
Share
Based
Payments
Reserve
$ ‘000
–
Cash Flow
Hedge
Reserve
$ ‘000
398
Foreign
Currency
Reserve
$ ‘000
1,205
Retained
Earnings
$ ‘000
61,042
Total
Equity
$ ‘000
235,404
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
204,237
–
–
–
–
–
–
(28,858)
–
–
–
–
–
–
(2,620)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
24,324
24,324
(386)
–
(386)
(386)
–
156
156
156
–
–
–
24,324
(386)
156
(230)
24,094
–
–
–
–
–
–
12
–
–
–
–
–
–
1,361
–
–
–
–
–
(24,055)
61,311
–
–
–
–
–
(24,055)
235,443
Balance at 1 January 2023
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 2023
The notes on pages 25 to 63 are an integral part of these Consolidated Financial Statements.
23
Bell Financial GroupAnnual Report 2023 STATEMENT OF CASH FLOWS
For the year ended 31 December 2023
Cash flows from/(used in) operating activities
Cash receipts from customers and clients
Cash paid to suppliers and employees
Net cash used in client related receivables and payables
Cash generated from operations1
Dividends received
Interest received
Interest paid
Income taxes paid
Net cash from/(used in) in 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 from/(used in) 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
2023
2022
25.
213,831
(196,186)
(90,023)
(72,378)
153
49,927
(18,203)
(10,608)
(51,109)
1,354
(828)
(4,385)
(3,859)
(24,055)
–
(5,243)
(68,916)
(49,245)
130,000
(17,459)
(72,427)
289,207
216,780
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
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
13, 25.
1.
‘Cash generated from operations’ includes Group cash reserves and client balances. Refer to note 13 for further information on cash and cash equivalents.
The notes on pages 25 to 63 are an integral part of these Consolidated Financial Statements.
24
Bell Financial GroupAnnual Report 2023 NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
Bell Financial Group Ltd (“Bell Financial
Group” 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 is an Australian-
based provider of stockbroking, investment
and financial advisory services.
1. Material accounting policies
Set out below is a summary of material
accounting policies adopted by the
Company and its subsidiaries in the
preparation of the Consolidated Financial
Statements.
a) Basis of preparation
Statement of compliance
The financial report is a general
purpose financial report prepared in
accordance with Australian Accounting
Standards (AASBs) (including Australian
Accounting Interpretations) adopted by
the Australian Accounting Standards
Board (AASB) and the Corporations Act
2001. The consolidated financial report
of the Group and the financial report of
the Company comply with International
Financial Reporting Standards (IFRS)
and interpretations adopted by the
International Accounting Standards
Board (IASB).
The Financial Statements were
approved by the Board of Directors
on 15 February 2024.
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.
The Group has consistently applied
the following accounting policies
to all periods presented in these
consolidated financial statements,
except if mentioned otherwise.
In addition, the Group adopted Disclosure
of Accounting Policies (Amendments to
AASB 101 and AASB Practice Statement
2) from 1 January 2023. The amendments
require the disclosure of ‘material’, rather
than ‘significant’, accounting policies.
These amendments did not result in
any changes to the accounting policies
themselves and did not impact the
accounting policy information as disclosed
in Note 1.
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.
Functional and presentation currency
These Consolidated Financial Statements
are presented in Australian dollars, which
is the Company’s functional currency and
the functional currency of the majority
of the Group. The Company is of a
kind referred to in ASIC Corporations
(Rounding in Financial/Directors’ Reports)
Instrument 2016/191 and in accordance
with that Instrument, all financial
information presented in Australian
dollars has been rounded to the nearest
thousand dollars unless otherwise stated.
Removal of parent entity financial
statements
The Group has applied amendments
to Section 295(2)(b) of the Corporations
Act 2001 that remove the requirement
for the Group to lodge parent entity
financial statements. Parent entity
financial statements have been replaced
by the specific parent entity disclosures
in note 32.
b) Principles of consolidation
Business combinations
The Group applies AASB 3 Business
Combinations (2008) and amended
AASB 127 Consolidated and Separate
Financial Statements (2008) for
business combinations.
Subsidiaries
Subsidiaries are all entities controlled by
the Group. The Group controls an entity
when it is exposed to, or has rights to,
variable returns from its involvement
with the entity and has the ability to
affect those returns through its power
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
Group are limited to fee-based revenue
items such as brokerage, fee income,
commissions and portfolio
administration fees.
Revenue under AASB 15 is recognised
when the Group satisfies the performance
obligations relating to its service to a
customer. The Group measures revenue
based on the consideration specified in
a contract with a customer. The following
specific criteria must also be met before
revenue can be recognised.
25
Bell Financial GroupAnnual Report 2023 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
1. Material accounting
policies (continued)
c) Revenue recognition (continued)
Rendering of services
Revenue arising from brokerage,
fee income and corporate finance
transactions are recognised by the Group
when performance obligations under the
contract with a customer are satisfied.
Brokerage is recognised at a point in time
when a trade is executed and payment
is received upon settlement, which is
normally 2 days after the trade.
Portfolio administration fees are recognised
over time as the service is provided and are
collected on a quarterly basis.
Corporate fees are recognised at a
point in time when the Group satisfies its
performance obligation, which is usually
upon the successful completion of the
transaction. Payment is normally received
within 7 days of the completion of the
transaction.
Other revenue streams
Other revenue is recognised to the
extent that it is probable that performance
obligations are satisfied and the revenue
can be reliably measured.
Interest income
Interest income is recognised as it
accrues using the effective interest rate
method, in accordance with AASB 9.
Dividend income
Dividend income is recognised when
the right to receive the payment is
established, in accordance with AASB 9.
d) Leases
AASB 16 Leases
At inception of a contract, the Group
assesses whether a contract is, or contains,
a lease. A contract is, or contains, a lease
if the contract conveys the right to control
the use of an identified asset for a period
of time in exchange for consideration.
AASB 16 Leases applies a single,
on-balance sheet accounting model
for lessees. A lessee recognises a right
of-use asset representing its right to use
the underlying asset and a lease liability
representing its obligation to make lease
payments. There are optional exemptions
for short-term leases and leases of low
value items.
As a Lessee
The Group recognises a right-of-use
asset and a lease liability at the lease
commencement date. The right-of-use
asset is initially measured at cost,
and subsequently at cost less any
accumulated depreciation and
impairment losses.
The lease liability is initially measured at
the present value of the lease payments
that are not paid at initial application
date, discounted using the incremental
borrowing rate determined by the Group.
The lease liability is subsequently
increased by the interest cost on the
lease liability and decreased by the
lease payment made.
When measuring lease liabilities for
leases that were classified as operating
leases, the Group discounted lease
payments using its incremental borrowing
rate at inception of lease. The Group
determines its incremental borrowing rate
by obtaining interest rates from various
external financing sources. The weighted
average rate applied is 4.1%.
Short-term leases and leases of
low-value assets
The Group has elected not to recognise
right-of-use assets and lease liabilities for
leases of low-value assets and short-term
leases. The Group recognises the lease
payments associated with these leases as
an expense on a straight-line basis over
the lease term.
e) Statement of Cash Flows
The Statement of Cash Flows is prepared
on the basis of net cash flows in relation
to settlement of trades. This is consistent
with the Group’s revenue recognition
policy whereby the entity acts as an agent
and receives and pays funds on behalf
of its clients, however only recognises
as revenue, the Group’s entitlement to
brokerage commission. For the purpose
of the Statement of Cash Flows, cash
and cash equivalents comprise cash
at bank and on hand, investments in
money market instruments maturing
within less than 14 days (net of bank
overdrafts) and short-term deposits with
an original maturity of 3 months or less.
It is important to note that the Statement
of Financial Position discloses trade
debtors and payables that represent
net client accounts being the
accumulation of gross trading.
26
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.
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
Bell Financial GroupAnnual Report 2023 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.
27
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.
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.
Bell Financial GroupAnnual Report 2023 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
1. Material accounting
policies (continued)
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.
p) Goodwill and intangible assets
Goodwill
Goodwill on acquisition is initially
measured at cost being the excess of the
costs of the business combination over
the acquirer’s interest in the net fair value
of the identifiable assets, liabilities and
contingent liabilities.
Following initial recognition, goodwill
is measured at cost less accumulated
impairment losses. Goodwill is reviewed
for impairment, annually or more
frequently if events or changes in
circumstances indicate that the carrying
amount is impaired. An impairment loss
in respect to goodwill is not reversed.
The CGUs currently in place consist
of Retail, Institutional, Technology &
Platforms and Product & Services.
The Group provides traditional
stockbroking, investment and financial
advisory services to private, institutional
and corporate clients. It also develops
proprietary technology, platforms,
products and services for the Australian
stockbroking market. 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
2023
10 years
10 years
2022
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.
A financial asset is measured at
amortised cost if it meets both of the
following conditions and is not designated
as at FVTPL:
• It is held within a business model
whose objective is to hold assets to
collect contractual cash flows; and
• Its contractual terms give rise on
specified dates to cash flows that
are solely payments of principal
and interest on the principal
amount outstanding.
All financial assets not classified as
measured at amortised cost or FVTOCI
are measured at FVTPL. On initial
recognition, the Group may irrevocably
designate a financial asset that otherwise
meets the requirements to be measured
at amortised cost or at FVTOCI as
at FVTPL if doing so eliminates or
significantly reduces an accounting
mismatch that would otherwise arise.
The following accounting policies apply to
the subsequent measurement of financial
assets held by the Group.
Financial assets at amortised cost –
These assets are subsequently
measured at amortised cost using the
effective interest method. The amortised
cost is reduced by impairment losses
(see (ii) below). Interest income,
foreign exchange gains and losses and
impairment are recognised in profit or
loss. Any gain or loss on derecognition
is recognised in profit or loss.
28
Bell Financial GroupAnnual Report 2023 Financial assets at FVTPL – These assets
are subsequently measured at fair value.
Net gains and losses, including any interest
or dividend income, are recognised in
profit or loss.
Business model assessment
The Group will determine the
business model at the level that reflects
how groups of financial assets are
managed using all relevant evidence
that is available at the date of the
assessment, including:
• The stated policies and objectives
for the portfolio and the operation
of those policies in practice;
• How the performance of the portfolio
is evaluated and reported to the
Group’s management;
• The risks that affect the performance
of the business model (and the financial
assets held within that business model)
and how those risks are managed; and
• How managers of the business are
compensated.
Assessment whether contractual
cash flows are solely payments of
principal and interest (SPPI)
For the purposes of this assessment,
‘principal’ is defined as the fair value of
the financial asset on initial recognition.
‘Interest’ is defined as consideration for
the time value of money and for the credit
risk associated with the principal amount
outstanding during a particular period of
time and for other basic lending risks and
costs (e.g. liquidity risk and administrative
costs), as well as profit margin.
In assessing whether the contractual
cash flows are SPPI, the Group considers
the contractual terms of the instrument.
This includes assessing whether the
financial asset contains a contractual
term that could change the timing or
amount of contractual cash flows such
that it would not meet this condition.
Measurement categories
of financial assets
Cash and cash equivalents, Trade
and other receivables, and Loans and
advances that meets SPPI are classified
and measured at amortised cost. Certain
Loans and advances and other financial
assets that do not meet SPPI are
classified and measured at FVTPL.
There were no changes in classification
and measurements of the Group’s
financial assets for the years ended
31 December 2022 and 2023.
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
29
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.
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.
Bell Financial GroupAnnual Report 2023 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
1. Material accounting
policies (continued)
q) Financial instruments (continued)
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 2023 (2022: Nil).
Trade and other receivables
ECLs are calculated based on actual
historical credit loss experience.
Exposures are segmented based on
past events, current conditions and
reasonable and supportable information
about future events and economic
conditions. There were no significant
changes during the period to the Group’s
exposure to credit risk and there was no
significant impact to credit provisioning
over trade and other receivables as at
31 December 2023 (2022: 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 2023
(2022: 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
2023
2022
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.
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.
30
Bell Financial GroupAnnual Report 2023 The following new and amended
standards and interpretations are not
expected to have a significant impact
on the Group’s consolidated financial
statements.
• IFRS 17 Insurance Contracts
• Definition of Accounting Estimates –
Amendments to IAS 8
• Deferred Tax related to Assets and
Liabilities arising from a Single
Transaction – Amendments to IAS 12
• International Tax Reform—Pillar Two
Model Rules – Amendments to IAS 12
• Non‑current Liabilities with Covenants
– Amendments to IAS 1
• Classification of Liabilities as Current or
Non‑current – Amendments to IAS 1
• Lease Liability in a Sale and Leaseback
– Amendments to IFRS 16
• Supplier Finance Arrangements –
Amendments to IAS 7 and IFRS 7
• Lack of Exchangeability – Amendments
to IAS 21
• Sale or Contribution of Assets between
an Investor and its Associate or Joint
Venture – Amendments to IFRS 10
and IAS 28 a
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 2023, 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.
31
Bell Financial GroupAnnual Report 2023 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
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.
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:
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 2023 (2022: Nil).
(Refer to note 19 and note 1q(ii)).
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 2023,
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.
On 29 June 2023 Bell Financial Group
received final notification from AUSTRAC
following its consideration of the reports
from the external auditor on the three
operating subsidiaries, Bell Potter
Securities Limited, Bell Potter Capital
Limited and Third Party Platform Pty Ltd.
AUSTRAC has decided that it will not be
taking any further regulatory action.
Financial assets
The fair value of options is determined
using the Black Scholes option-pricing
model.
Determination of fair value for loans
is based on the option value used to
mitigate the risk on the limited recourse
margin loans and the interest rate implicit
in the loan.
Intangible assets
The customer lists acquired have been
valued using the net present value
of the unlevered free cash flow from
each business’ client list and software
development costs incurred are initially
measured at cost and are amortised
over the useful life. These valuations
are outlined below:
Bell Foreign Exchange and Futures
business
The amortisation period for the acquired
intangible assets of the Foreign Exchange
and Futures business is deemed to be
10 years. This was determined by analysing
the average length of the relationship
clients have with the business.
32
Bell Financial GroupAnnual Report 2023 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 2023,
goodwill has been allocated to the Group’s CGUs (Operating divisions) as follows:
Retail
Institutional
Technology & Platforms
Product & Services
2023
$’m
22.6
31.4
39.2
37.2
130.4
2022
$’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 12% (2022: 11%) 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 (2022: 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 (2022: 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 (2022: 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 7.2% p.a (2022: 7.9% p.a) average growth over the five year forecast period
for Technology & Platforms.
An increase in Net Interest income of 8.1% p.a (2022: 8.1% p.a) average growth over the five year
forecast period, and an increase in Portfolio Administration fees of 7.0% p.a (2022: 7.0% p.a) average
growth over the five year forecast period.
Sensitivity analysis
As at 31 December 2023, 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 5% for retail from the
estimated amounts in each of the five years of the forecast period, the estimated recoverable amounts would be equal to the carrying
amounts. If the discount rate increased to 21% for retail, the estimated recoverable amounts would be equal to the carrying amounts.
Further, if the terminal value multiple decreased to approximately 3.8 times for retail, the estimated recoverable amounts would be
equal to the carrying amounts at that date.
33
Bell Financial GroupAnnual Report 2023 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
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.
3. Financial risk management
Overview
The Group’s principal financial
instruments comprise loans and
advances, listed securities, derivatives,
term deposits, and cash. The Group has
exposure to the following risks from its
use of financial instruments:
• Market risk
• Credit risk
• Liquidity risk.
Risk Management Framework
The Board of Directors has overall
responsibility for the establishment
and oversight of the risk management
framework. The Board has established the
Group Risk and Audit Committee (GRAC),
which is responsible for developing and
monitoring risk management policies.
The Committee reports regularly to the
Board of Directors on its activities.
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.
34
Bell Financial GroupAnnual Report 2023 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.
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.
Margin lending
Management monitors exposure to credit
risk on an ongoing basis. The Group
requires collateral in respect of margin
loans made in the course of business.
This collateral is generally in the form of
the underlying security the margin loan
is used to invest in. Loan-to-value ratios
(LVRs) are assigned to determine the
amounts of lending allowed against each
security. Loans balances are reviewed
daily and are subject to margin calls once
the geared value falls 10% lower than the
loan balance. Warnings are sent between
5% and 10%. The lender can also require
the borrower to repay on demand part
or all of the amount owing at any time,
whether or not the borrower or
any guarantor is in default.
Capital management
The Board’s policy is to maintain a
strong capital base so as to maintain
investor, creditor and market confidence
and to sustain future development
of the business. Capital consists of
ordinary shares and retained earnings
of the Group. The Group is required to
comply with certain capital and liquidity
requirements imposed by regulators
as a licensed broking firm. All capital
requirements are monitored by the Board
and the Group was in compliance with
all requirements throughout the year.
Security arrangements
The ANZ Bank has a Registered
Mortgage Debenture over the assets
and undertakings of the Company.
4. Determination of fair values
A number of the Group’s accounting
policies and disclosures require the
determination of fair value, for both
financial and non-financial assets and
liabilities. Fair values have been
determined and disclosed based on the
following methods. Where applicable,
further information about the
assumptions made in determining fair
values is disclosed in the notes specific
to that asset or liability.
Investments in equity
The fair values of financial assets at
fair value through profit or loss are
determined with reference to the quoted
bid price, or if unquoted determined using
a valuation model at reporting date.
Derivatives
The fair value of interest rate swaps is
based on a mark-to-market model with
reference to prevailing fixed and floating
interest rates. These quotes are tested
for reasonableness by discounting
estimated future cash flows based on
term to maturity of each contract and
using market interest rates for a similar
instrument at the measurement date.
The fair value of currency swaps is
determined using quoted forward
exchange rates at the reporting date and
present value calculations based on high
quality yield curves in the respective
currencies.
Financial assets and loans at fair
value through profit or loss
The fair value of options is determined
using the Black Scholes option-pricing
model.
Determination of fair value for loans
is based on the option value used to
mitigate the risk on the limited recourse
margin loans and the interest rate implicit
in the loan.
35
Bell Financial GroupAnnual Report 2023 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
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 2023
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 2022
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
22,627
8,236
250,942
250,942
Products
& Services
$’000
23,131
11,966
636,219
636,219
157,176
157,176
584,013
584,013
3,708
(133)
(2,470)
40,895
(15,924)
(160)
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)
Retail
$’000
100,115
(2,859)
187,896
187,896
149,772
149,772
5,327
(1,867)
(7,108)
Retail
$’000
113,514
2,464
384,565
384,565
339,027
339,027
3,479
(1,730)
(6,589)
Institutional
$’000
50,637
6,981
73,747
73,747
Consolidated
$’000
196,510
24,324
1,148,804
1,148,804
22,400
22,400
913,361
913,361
4
(279)
(1,220)
49,934
(18,203)
(10,958)
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)
Geographical segments
The Group operates predominantly within Australia and has offices in Hong Kong, London, New York and Kuala Lumpur.
36
Bell Financial GroupAnnual Report 2023 6. Rendering of services
Brokerage
Fee income
Portfolio administration revenue
Other
Consolidated
2023
$’000
109,967
57,004
22,351
7,188
196,510
2022
$’000
120,814
58,361
21,503
5,737
206,415
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
2023
$’000
16,133
292
2022
$’000
18,711
521
Products
& Services
Retail
Institutional
Consolidated
2023
$’000
121
–
2022
$’000
122
–
2023
$’000
86,443
13,516
2022
$’000
93,694
19,635
2023
$’000
7,270
43,196
2022
$’000
8,287
38,205
2023
$’000
109,967
57,004
2022
$’000
120,814
58,361
–
6,202
22,627
–
4,643
23,875
22,351
659
23,131
21,503
622
22,247
–
156
100,115
–
185
113,514
–
171
50,637
–
287
46,779
22,351
7,188
196,510
21,503
5,737
206,415
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
2023
$’000
153
1,816
(3,376)
(1,407)
2022
$’000
335
252
(4,026)
(3,439)
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
Consolidated
2023
$’000
1,965
1,965
2022
$’000
1,236
1,236
37
Bell Financial GroupAnnual Report 2023 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
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)
11. Employee expenses
Wages and salaries
Superannuation
Payroll tax
Other employee expenses
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
2023
$’000
10,392
39,542
49,934
(6,735)
(9,282)
(2,186)
(18,203)
31,731
2022
$’000
4,591
28,712
33,303
(2,303)
(3,127)
(2,110)
(7,540)
25,763
Consolidated
2023
$’000
(121,875)
(8,631)
(7,479)
(2,290)
(140,275)
2022
$’000
(121,161)
(8,262)
(7,068)
(1,798)
(138,289)
Consolidated
2023
$’000
10,648
173
38
10,859
167
11,026
2022
$’000
11,600
65
78
11,743
(422)
11,321
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
2023
Consolidated
2022
%
30.00%
0.59%
0.11%
0.49%
31.19%
$’000
35,350
10,605
210
38
173
11,026
%
30.00%
0.21%
0.21%
0.17%
30.59%
$’000
37,008
11,102
76
78
65
11,321
Tax consolidation
Bell Financial Group and its wholly owned Australian controlled entities are a tax-consolidated group.
38
Bell Financial GroupAnnual Report 2023 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
2023
$’000
2022
$’000
12
114,292
114,304
21,948
21,948
48,498
32,030
80,528
216,780
12
110,299
110,311
6,589
6,589
36,807
135,500
172,307
289,207
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
39
2023
$’000
110,311
2022
$’000
136,493
249,452
241,479
(142,139)
(10,490)
(10,895)
(7,897)
(5,174)
(3,358)
(16,017)
(11,827)
(207,797)
41,655
(10,608)
(24,055)
1,142
(3,031)
(828)
(282)
114,304
(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
Bell Financial GroupAnnual Report 2023 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
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
2023
$’000
118,918
–
118,918
9,719
38,310
–
48,029
9,655
176,602
2022
$’000
151,049
–
151,049
10,160
79,875
–
90,035
12,762
253,846
No impairment allowance in respect of loans and receivables noted during the year (2022: Nil). Information about the Group’s
exposure to credit and market risks is included in Note 30.
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
2023
$’000
8,453
3,592
3,548
15,593
2022
$’000
5,040
4,245
6,288
15,573
1. Options held as a hedge against limited recourse loans to clients under the Bell Geared Equities Investments product.
40
Bell Financial GroupAnnual Report 2023 16. Property, plant and equipment
Consolidated
Cost
Balance at 1 January 2022
Additions
Disposals
Effect of movements in exchange rates
Balance at 31 December 2022
Balance at 1 January 2023
Additions
Disposals
Effect of movements in exchange rates
Balance at 31 December 2023
Accumulated depreciation
Balance at 1 January 2022
Depreciation charge for the year
Disposals
Effect of movements in exchange rates
Balance at 31 December 2022
Balance at 1 January 2023
Depreciation charge for the year
Disposals
Effect of movements in exchange rates
Balance at 31 December 2023
Carrying amount
At 1 January 2022
At 31 December 2022
At 31 December 2023
Fixtures
and fittings
$’000
Office
equipment
$’000
Leasehold
improvements
$’000
2,230
159
–
(1)
2,388
2,388
622
–
3
3,013
(1,884)
(90)
–
1
(1,973)
(1,973)
(190)
–
(3)
(2,166)
346
415
847
6,506
162
(34)
4
6,638
6,638
202
(18)
(19)
6,803
(5,763)
(505)
34
(4)
(6,238)
(6,238)
(278)
18
17
(6,481)
743
400
322
7,744
115
–
11
7,870
7,870
3
–
(18)
7,855
(6,828)
(395)
–
(2)
(7,225)
(7,225)
(307)
–
20
(7,512)
916
645
343
Total
$’000
16,480
436
(34)
14
16,896
16,896
827
(18)
(34)
17,671
(14,475)
(990)
34
(5)
(15,436)
(15,436)
(775)
18
34
(16,159)
2,005
1,460
1,512
41
Bell Financial GroupAnnual Report 2023 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
17. Goodwill and intangible assets
Cost
Balance at 1 January 2022
Acquisitions – internally developed
Balance at 31 December 2022
Balance at 1 January 2023
Acquisitions – internally developed
Balance at 31 December 2023
Accumulated amortisation and impairment losses
Balance at 1 January 2022
Amortisation
Balance at 31 December 2022
Balance at 1 January 2023
Amortisation
Balance at 31 December 2023
Carrying amount
At 1 January 2022
At 31 December 2022
At 31 December 2023
18. Deferred tax assets and liabilities
The movement in deferred tax balances are as follows:
Consolidated 2023
Property, plant and equipment
Employee benefits
Carry forward tax loss
Other items
Consolidated 2022
Property, plant and equipment
Employee benefits
Carry forward tax loss
Other items
Goodwill
$’000
Software
$’000
Total
$’000
130,413
–
130,413
130,413
–
130,413
–
–
–
–
–
–
130,413
130,413
130,413
27,416
3,400
30,816
30,816
3,020
33,836
(12,620)
(2,730)
(15,350)
(15,350)
(2,961)
(18,311)
14,796
15,466
15,525
157,829
3,400
161,229
161,229
3,020
164,249
(12,620)
(2,730)
(15,350)
(15,350)
(2,961)
(18,311)
145,209
145,879
145,938
Balance as at
1 January
$’000
29
5,295
39
(455)
4,908
Balance as at
1 January
$’000
(25)
5,217
40
(690)
4,542
Recognised in
profit or loss
$’000
13
(101)
(3)
(52)
(143)
Recognised in
profit or loss
$’000
54
78
(1)
235
366
Balance at
31 December
$’000
42
5,194
36
(507)
4,765
Balance at
31 December
$’000
29
5,295
39
(455)
4,908
Unrecognised deferred tax assets relating to tax losses at 31 December 2023: $332,000 (2022: $245,000).
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 2023 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 2023 (2022: 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
2023
$’000
467,379
78,770
546,149
2022
$’000
413,955
81,801
495,756
Consolidated
2023
$’000
152,686
26,001
78,939
257,626
2022
$’000
168,894
26,654
226,450
421,998
Settlement obligations are non-interest bearing and are normally settled on 2-day terms. Sundry creditors are normally settled
on 60-day terms.
21. Deposits and borrowings
This note provides information about the contractual terms of the Group’s interest-bearing deposits and borrowings.
For more information about the Group’s exposure to interest rate and foreign currency risk, see note 30.
Deposits1
Bell Financial Trust2
Cash advance facility3
1. Deposits relate to Margin Lending business (Bell Potter Capital) which are largely at call.
2. Represents funds held on behalf of Bell Potter Capital in the Bell Financial Trust which are held at call.
3. Represents drawn funds from the Bell Potter Capital cash advance facility of $250m (2022: $150m).
Interest rate risk exposures
Details of the Group’s exposure to interest rate changes on borrowings are set out in note 30.
Consolidated
2023
$’000
622
391,896
174,000
566,518
2022
$’000
844
460,590
44,000
505,434
43
Bell Financial GroupAnnual Report 2023 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
21. Deposits and borrowings (continued)
Terms and debt repayment schedule
Terms and conditions of outstanding deposits and borrowings were as follows:
2023
2022
2023
2022
Consolidated
Cash advance facility
Deposits (Cash Account)
Bell Financial Trust
Average effective
interest rate
4.69%
2.19%
2.19%
1.83%
0.60%
0.60%
Face
value
$’000
174,000
622
391,896
566,518
Carrying
amount
$’000
174,000
622
391,896
566,518
2023
Face
value
$’000
44,000
844
460,590
505,434
Carrying
amount
$’000
44,000
844
460,590
505,434
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
Cash
advance
facility
$’000
44,000
–
130,000
130,000
–
5,527
(5,527)
–
Liabilities
Deposits
$’000
844
Bell
Financial
Trust
$’000
460,590
Derivatives (assets)/liabilities
held to hedge long‑term
borrowings
Interest rate swap
contracts used for hedging
Liabilities
$’000
–
Assets
$’000
398
(222)
–
(222)
–
(107)
107
–
–
(68,694)
(68,694)
–
–
–
–
(386)
9,281
(9,281)
–
–
–
–
12
Total
$’000
505,832
(222)
61,306
61,084
(386)
14,701
(14,701)
–
566,530
–
–
–
–
–
–
–
–
Balance at 31 December
174,000
622
391,896
44
Liabilities
borrowings
2022
Derivatives (assets)/liabilities
held to hedge long‑term
Interest rate swap
contracts used for hedging
Bell
Financial
Trust
$’000
479,651
Deposits
$’000
1,449
Assets
$’000
13
Liabilities
$’000
Total
$’000
573,113
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)
–
44,000
844
460,590
398
–
–
–
–
–
–
–
–
–
605
(67,061)
(67,666)
385
4,167
(4,167)
–
505,832
Bell Financial GroupAnnual Report 2023 21. Deposits and borrowings (continued)
Terms and debt repayment schedule
Terms and conditions of outstanding deposits and borrowings were as follows:
2023
2022
2023
2022
Consolidated
Cash advance facility
Deposits (Cash Account)
Bell Financial Trust
Average effective
interest rate
4.69%
2.19%
2.19%
1.83%
0.60%
0.60%
Face
value
$’000
174,000
622
391,896
566,518
Carrying
amount
$’000
174,000
622
391,896
566,518
Face
value
$’000
44,000
844
460,590
505,434
Carrying
amount
$’000
44,000
844
460,590
505,434
Liabilities
borrowings
2023
Derivatives (assets)/liabilities
held to hedge long‑term
Interest rate swap
contracts used for hedging
Cash
advance
facility
$’000
44,000
Bell
Financial
Trust
$’000
460,590
Deposits
$’000
844
Assets
$’000
398
Liabilities
$’000
Total
$’000
505,832
Balance at 1 January
Changes from financing cash flows
Deposits/(withdrawals) from client
cash balances
Changes in fair value
Other charges
Liability‑related
Interest expense
Interest paid/(payable)
Total liability‑related other changes
Drawdown/(repayment) of borrowings
Total changes from financing cash flows
130,000
130,000
(68,694)
(68,694)
–
–
–
(222)
(222)
–
–
(107)
107
–
–
–
–
(386)
–
–
–
–
–
–
5,527
(5,527)
9,281
(9,281)
Balance at 31 December
174,000
622
391,896
12
–
–
–
–
–
–
–
–
–
(222)
61,306
61,084
(386)
14,701
(14,701)
–
566,530
Total
$’000
573,113
605
(67,061)
(67,666)
385
4,167
(4,167)
–
505,832
–
–
–
–
–
–
–
–
2022
Liabilities
Deposits
$’000
1,449
Bell
Financial
Trust
$’000
479,651
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)
–
–
–
–
44,000
844
460,590
398
45
Bell Financial GroupAnnual Report 2023 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
22. Current tax liabilities
The current tax liability of the Group is $1,672,050 (2022: $1,396,978). 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
2023
$’000
500
500
500
225
(225)
500
2022
$’000
500
500
500
–
–
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 2023.
24. Employee benefits
Salaries and wages accrued
Liability for annual leave
Total employee benefits
Liability for long-service leave
Total employee benefits
Consolidated
2023
$’000
25,609
7,211
32,820
5,570
38,390
2022
$’000
23,969
7,925
31,894
5,340
37,234
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
2023
$’000
3.0%
4.31%
7
745
2022
$’000
3.0%
3.45%
7
752
46
Bell Financial GroupAnnual Report 2023 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
Decrease/(increase) client receivables
Decrease/(increase) other receivables
Decrease/(increase) derivative asset
Decrease/(increase) other assets
(Increase) deferred tax assets
(Increase) intangibles
(Decrease) client payables
(Decrease)/increase other payables
(Decrease)/increase derivative liability
Increase/(decrease) current tax liabilities
Increase/(decrease) provisions
Increase deferred tax liability
Net cash from operating activities
Reconciliation of cash
For the purpose of the cash flow statement, cash and cash equivalents comprise:
Group cash reserves
Cash on hand
Cash at bank
Margin lending cash
Cash at bank
Client cash
Cash at bank (Trust account)
Segregated cash at bank (client)
Consolidated
2023
$’000
2022
$’000
24,324
25,687
10,958
1,863
–
37,145
74,137
3,107
354
127
(376)
(3,019)
(163,564)
(742)
(228)
275
1,156
519
(51,109)
12
114,292
114,304
21,948
21,948
48,498
32,030
80,528
216,780
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 2023 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
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 2022
Share issue
31 December 2022
1 January 2023
Share issue
31 December 2023
Consolidated
2023
$’000
204,237
–
204,237
2022
$’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 2023, there were retained profits of $61.3m (2022: $61m).
Foreign currency reserve
The foreign currency reserve comprises of any movements in the translation of foreign currency balances. Balance at 31 December 2023:
$1,361,000 (2022: $1,205,000).
Other equity
Other equity comprises movements in equity as a result of transactions with subsidiaries in Bell Financial Group’s capacity
as a shareholder. Balance at 31 December 2023: $28,858,000 debit (2022: $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 2023: $12,000 (2022: $398,000).
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 2023: Nil (2022: 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 2023: $2,620,000 debit (2022: $2,620,000 debit).
48
Bell Financial GroupAnnual Report 2023 27. Dividends
Dividends recognised in the current year by the Group are:
Cents
per share
Total amount
$ ‘000
Franked/
unfranked
Date of
payment
2023
Interim 2023 ordinary dividend
Final 2023 ordinary dividend
2022
Interim 2022 ordinary dividend
Final 2022 ordinary dividend
3.00
–
2.5
4.5
9,622
–
8,019
14,433
Dividend franking account
30 percent franking credits available to shareholders
of Bell Financial Group Ltd for subsequent financial years
Franked 12 September 2023
–
–
Franked
Franked
6 September 2022
15 March 2023
Company
2023
$ ‘000
2022
$ ‘000
38,997
38,765
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 $5.5m
(2022: $6.2m).
28. Earnings per share
Earnings per share at 31 December 2023 based on profit after tax and a weighted average number of shares outlined below
was 7.6 cents (2022: 8.0 cents). Diluted earnings per share at 31 December 2023 was 7.6 cents (2022: 8.0 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
2023
$’000
24,324
24,324
24,324
–
24,324
2022
$’000
25,687
25,687
25,687
–
25,687
Consolidated
2023
318,743,948
318,743,948
318,743,948
2022
319,313,419
319,313,419
319,313,419
49
Bell Financial GroupAnnual Report 2023 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
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 2023 (2022: 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
2023
’000
–
–
–
–
–
2022
’000
–
–
–
–
–
Consolidated
2023
$’000
–
–
–
–
2022
$’000
–
–
–
–
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 2023 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 Group’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
The ageing of trade receivables at reporting date is outlined below:
Consolidated
Ageing of receivables
Not past due
Past due 0 – 30 days
Past due 31 – 365 days
More than one year
Note
14.
14.
14.
19.
14.
Gross
2023
$’000
118,805
113
–
–
Impairment
2023
$’000
–
–
–
–
Consolidated
2023
$’000
118,918
9,719
38,310
546,149
9,655
Gross
2022
$’000
150,941
39
69
–
2022
$’000
151,049
10,160
79,875
495,756
12,762
Impairment
2022
$’000
–
–
–
–
Collectability of trade receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off.
A provision for impairment of trade receivables is established based on lifetime expected credit losses. This assessment is based
on past events, current conditions and reasonable and supportable information about future events and economic conditions.
51
Bell Financial GroupAnnual Report 2023 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
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 2023
Non‑derivative liabilities
Trade & other payables
Cash deposits
Cash advance facilities
Bell Financial Trust
Lease Liabilities
Derivative liabilities
Hedging derivative
Foreign currency swap
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
Carrying
Amount
$’000
Contracted
Cashflow
$’000
6‑months
or less
$’000
257,626
622
174,000
391,896
48,497
(257,626)
(622)
(174,000)
(391,896)
(57,670)
(257,626)
(622)
(174,000)
(391,896)
(4,420)
–
(89)
–
89
–
89
6‑12
months
$’000
–
–
–
–
(4,696)
–
–
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)
–
–
1‑2
years
$’000
–
–
–
–
(8,857)
–
–
1‑2
years
$’000
–
–
–
–
(8,595)
–
–
2‑5
years
$’000
–
–
–
–
(19,454)
–
–
2‑5
years
$’000
–
–
–
–
(20,795)
–
–
5+
years
$’000
–
–
–
–
(20,242)
–
–
5+
years
$’000
–
–
–
–
(26,315)
–
–
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 2023 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 2023, 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 $1,948,000 (2022: $2,830,000 decrease to profit) and would decrease equity by approximately
$1,364,000 (2022: $1,981,000 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 2023, it is estimated that a 10% decrease in equity prices would decrease the Group’s profit before income tax by
approximately $1,559,000 (2022: $1,557,000 decrease to profit) and would decrease equity by approximately $1,091,000 (2022: $1,090,000
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 2023 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
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.
2023
2022
Total
$’000
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
%
7.89%
4.69%
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
111,116
(174,000)
(62,884)
111,116
(174,000)
(62,884)
3.89%
8.12%
2.19%
2.19%
216,780
435,033
(622)
(391,896)
259,295
216,780
435,033
(622)
(391,896)
259,295
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(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 2023
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
Interest rate swaps used for hedging
Foreign currency swap
Financial liabilities not measured at fair value
Trade and other payables
Deposits and borrowings
Carrying Amount
Designated
at fair
value
$’000
Fair
value
hedging
instruments
$’000
Note
Loans and
receivables
$’000
Other
financial
liabilities
$’000
15.
19.
14.
13.
19.
20.
21.
15,593
–
–
–
15,593
–
–
–
–
–
(99)
(99)
–
–
–
–
71
10
–
81
–
–
–
–
(59)
–
(59)
–
–
–
–
–
–
78,770
78,770
176,602
216,780
467,379
860,761
–
–
–
–
–
–
Total
$’000
15,593
71
10
78,770
94,444
176,602
216,780
467,379
860,761
(59)
(99)
(158)
–
–
–
–
–
–
–
–
–
–
–
–
257,626
566,518
824,144
257,626
566,518
824,144
1. Loans and advances measured at fair value decreased from $81,801,000 at 31 December 2022 to $78,770,000 at 31 December 2023 due to net new/repaid
loans of $4,179,000 with the remaining movement due to net fair value changes.
54
Average
effective
interest
rate
%
6.23%
1.83%
1.31%
5.16%
0.60%
0.60%
Total
$’000
92,950
(44,000)
48,950
289,207
402,806
(844)
(460,590)
230,579
6 months
or less
$’000
92,252
(44,000)
48,252
289,207
402,806
(844)
(460,590)
230,579
6 – 12
months
$’000
1 – 2
years
$’000
2 – 5
years
$’000
More
than
5 years
$’000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
698
–
698
–
–
–
–
–
Total
$’000
15,593
71
10
78,770
94,444
–
–
–
–
–
–
–
(59)
(99)
(158)
Fair Value
Level 1
$’000
Level 2
$’000
Level 3
$’000
8,453
7,140
8,453
7,221
78,770
78,770
–
–
–
–
–
–
–
–
–
–
–
–
–
71
10
–
–
–
–
–
–
–
–
(59)
(99)
(158)
–
–
–
–
–
–
–
–
–
–
–
–
–
Bell Financial GroupAnnual Report 2023 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.
Total
$’000
6 months
or less
$’000
6 – 12
months
$’000
1 – 2
years
$’000
2 – 5
years
$’000
More
than
5 years
$’000
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.
Average
effective
interest
rate
%
7.89%
4.69%
111,116
111,116
(174,000)
(174,000)
(62,884)
(62,884)
3.89%
8.12%
2.19%
2.19%
216,780
435,033
216,780
435,033
(622)
(622)
(391,896)
(391,896)
259,295
259,295
Fair value measurements
(a) Accounting classifications and fair values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels
in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at
fair value if the carrying amount is a reasonable approximation of fair value.
Carrying Amount
Designated
Fair
value
at fair
hedging
Loans and
value
instruments
receivables
Note
$’000
$’000
$’000
Other
financial
liabilities
$’000
15.
15,593
–
–
–
–
–
–
–
–
–
71
10
–
81
–
–
–
–
–
–
–
–
(59)
(59)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
78,770
78,770
176,602
216,780
467,379
860,761
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
$’000
15,593
71
10
78,770
94,444
176,602
216,780
467,379
860,761
(59)
(99)
(158)
257,626
566,518
824,144
257,626
566,518
824,144
31 DECEMBER 2023
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
Interest rate swaps used for hedging
Foreign currency swap
Financial liabilities not measured at fair value
Trade and other payables
Deposits and borrowings
19.
14.
13.
19.
20.
21.
15,593
–
–
–
–
–
–
–
–
–
–
–
(99)
(99)
1. Loans and advances measured at fair value decreased from $81,801,000 at 31 December 2022 to $78,770,000 at 31 December 2023 due to net new/repaid
loans of $4,179,000 with the remaining movement due to net fair value changes.
2023
2022
More
than
5 years
$’000
–
–
–
–
–
–
–
–
Average
effective
interest
rate
%
6.23%
1.83%
1.31%
5.16%
0.60%
0.60%
Total
$’000
92,950
(44,000)
48,950
289,207
402,806
(844)
(460,590)
230,579
6 months
or less
$’000
92,252
(44,000)
48,252
289,207
402,806
(844)
(460,590)
230,579
Fair Value
Level 1
$’000
Level 2
$’000
8,453
–
–
–
8,453
–
–
–
–
–
–
–
–
–
–
7,140
71
10
–
7,221
–
–
–
–
(59)
(99)
(158)
–
–
–
Level 3
$’000
–
–
–
78,770
78,770
–
–
–
–
–
–
–
–
–
–
6 – 12
months
$’000
1 – 2
years
$’000
2 – 5
years
$’000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
698
–
698
–
–
–
–
–
Total
$’000
15,593
71
10
78,770
94,444
–
–
–
–
(59)
(99)
(158)
–
–
–
55
Bell Financial GroupAnnual Report 2023 Fair Value
Level 1
$’000
Level 2
$’000
Level 31
$’000
5,040
10,533
5,040
10,968
81,801
81,801
–
–
–
–
–
–
–
–
–
–
–
–
398
37
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
$’000
15,573
398
37
81,801
97,809
–
–
–
–
–
–
–
–
–
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
30. Financial instruments (continued)
Fair value measurements (continued)
(a) Accounting classifications and fair values (continued)
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
Financial liabilities not measured at fair value
Trade and other payables
Deposits and borrowings
Carrying Amount
Designated
at fair
value
$’000
Fair
value
hedging
instruments
$’000
Note
Loans and
receivables
$’000
Other
financial
liabilities
$’000
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.
(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 2023 and 2022.
56
Bell Financial GroupAnnual Report 2023 30. Financial instruments (continued)
Fair value measurements (continued)
(a) Accounting classifications and fair values (continued)
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
Financial liabilities not measured at fair value
Trade and other payables
Deposits and borrowings
Carrying Amount
Designated
Fair
value
at fair
hedging
Loans and
value
instruments
receivables
Note
$’000
$’000
$’000
Other
financial
liabilities
$’000
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
–
–
–
–
–
–
–
–
–
–
–
–
81,801
81,801
253,846
289,207
413,955
957,008
–
–
–
–
–
–
–
–
15.
15,573
398
15,610
398
19.
14.
13.
19.
20.
21.
–
37
–
–
–
–
–
–
–
–
–
–
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.
(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 2023 and 2022.
Fair Value
Level 1
$’000
Level 2
$’000
Level 31
$’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
–
–
–
–
–
–
–
–
–
57
Bell Financial GroupAnnual Report 2023 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
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
2023
$’000
45,474
(7,222)
1,912
(117)
40,047
2022
$’000
12,179
(6,937)
40,166
66
45,474
Consolidated
2023
$’000
52,035
2,186
1,912
(89)
(7,425)
(122)
48,497
2022
$’000
16,275
2,110
40,166
–
(6,588)
72
52,035
Consolidated
2023
$’000
7,222
2,186
2,043
11,451
2022
$’000
6,937
2,110
1,813
10,860
Consolidated
2023
$’000
(7,425)
2022
$’000
(6,588)
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
Disposal of lease
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 2023 32. Parent entity disclosures
As at, and throughout the financial year ending 31 December 2023, the parent company of the Group was Bell Financial Group.
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
2023
$’000
24,355
24,355
40,757
224,356
265,113
78,416
78,416
204,237
(2,620)
(14,920)
186,697
2022
$’000
29,531
29,531
46,590
223,633
270,223
83,826
83,826
204,237
(2,620)
(15,220)
186,397
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 (Resigned 31 October 2023)
Non‑Executive Directors
G Cubbin
B Wilson AO
C Feldmanis
A Provan (Appointed 1 November 2023)
A Bell (Appointed 1 November 2023)
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
Senior Executives
L Bell (Ceased to be a KMP on 31 October 2023)
A Bell (Ceased to be a KMP on 31 October 2023)
R Fell (Ceased to be a KMP on 31 October 2023)
D Davenport
A Selvarajah (Appointed 1 November 2023)
Consolidated
2023
3,572,104
8,077
140,979
–
–
3,721,160
2022
3,407,985
9,616
146,458
–
–
3,564,059
59
Bell Financial GroupAnnual Report 2023 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
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 2023
Total for key management personnel 2022
Total for other related parties 2023
Total for other related parties 2022
Total for key management personnel and their related parties 2023
Total for key management personnel and their related parties 2022
Interest paid
and payable in
the reporting
period
$
88,940
64,425
–
–
88,940
64,425
Closing
balance
$
1,003,863
1,541,295
–
–
1,003,863
1,541,295
Opening
balance
$
1,541,295
2,020,423
–
–
1,541,295
2,020,423
Number
of loans in
Group at
31 December1
7
24
–
–
7
24
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 $88,940 (2022: $64,425). No amounts have been written-down
or recorded as allowances for impairment, as the balances are considered fully collectable.
60
Bell Financial GroupAnnual Report 2023 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. There are no outstanding amounts owed
by or to the ultimate parent entity at 31 December 2023 (2022: nil). There is no interest receivable or payable at 31 December 2023
(2022: 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
2023
$
2022
$
436
213,475
8,335,779
1,954,371
–
10,504,061
–
278,616
8,295,295
1,949,834
–
10,523,745
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 5.39% per annum
(2022: 4.60% per annum).
Loans made by wholly owned subsidiaries to the Company: $29,803,551 (2022: $31,535,286). 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 2023, all outstanding amounts are considered
fully collectable.
61
Bell Financial GroupAnnual Report 2023 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
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
Consolidated
Interest
Incorporation
2023
2022
Australia
Australia
Australia
United Kingdom
Hong Kong
United States
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
35. Guarantees
From time to time Bell Financial Group has provided financial guarantees in the ordinary course of business which amount
to $7.6m (2022: $7.6m) and are not recorded in the Statement of Financial Position as at 31 December 2023.
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.
On 29 June 2023, Bell Financial Group received final notification from AUSTRAC following its consideration of the reports from
the external auditor on the three operating subsidiaries, Bell Potter Securities Limited, Bell Potter Capital Limited and Third Party
Platform Pty Ltd.
AUSTRAC has decided that it will not be taking any further regulatory action.
62
Bell Financial GroupAnnual Report 2023 37. Subsequent events
Except as noted below, there were no significant events from 31 December 2023 to the date of this report.
Final Dividend
On 15 February 2024, the Directors resolved to pay a fully franked final dividend of 4.0 cents per share.
38. Auditor’s remuneration
Audit services
Auditor of the Company
KPMG:
Audit and review of financial reports
Total remuneration for audit services
Audit related services
Auditor of the Company
KPMG Australia:
Other regulatory audit services
Total remuneration for audit related services
Non‑audit related services
Tax services
Consolidated
2023
$
2022
$
431,613
431,613
392,137
392,137
139,474
139,474
31,721
602,808
126,649
126,649
31,104
549,890
63
Bell Financial GroupAnnual Report 2023 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 13 to 18 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 2023 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 Co-Chief Executive
Officer and the Co-Chief Executive Officer and Acting Chief Financial Officer, for the financial year ended 31 December 2023.
Note 1(a) of the Consolidated Financial Statements includes a statement of compliance with International Financial Reporting Standards.
This declaration is made on 15 February 2024 in accordance with a resolution of the Directors:
Brian Wilson AO
Independent Chairman
15 February 2024
64
Bell Financial GroupAnnual Report 2023 INDEPENDENT AUDITOR’S REPORT
65
Bell Financial GroupAnnual Report 2023 INDEPENDENT AUDITOR’S REPORT (CONTINUED)
66
Bell Financial GroupAnnual Report 2023 67
Bell Financial GroupAnnual Report 2023 INDEPENDENT AUDITOR’S REPORT (CONTINUED)
68
Bell Financial GroupAnnual Report 2023 SHAREHOLDER INFORMATION
The following information is current as at 31 January 2024.
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
DCM BLUELAKE PARTNERS PTY LTD
EST MR JAMES GORDON MOFFATT
CITICORP NOMINEES PTY LIMITED
MR ANAND SELVARAJAH
MR ALASTAIR PROVAN + MRS JANIS PROVAN
MORSON HOLDINGS PTY LTD
MR DEAN JAMES SURKITT
COLIN BELL 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 INVESTMENTS PTY LTD
15 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
16 MR ALASTAIR PROVAN + MRS JANIS PROVAN
17 WARANA GRANGE PTY LTD
18 MR LIONEL ALEXANDER MCFADYEN + MRS JENNIFER JUNE MCFADYEN
19 MR CON ZEMPILAS
EST MR COLIN BELL
20
Total
BELL SECURITIES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
Number of
shares held
143,998,350
6,640,633
6,300,000
4,583,587
3,892,334
3,300,000
3,250,000
3,100,000
2,814,627
2,567,150
2,300,000
2,232,000
2,181,898
2,038,000
1,919,116
1,900,000
1,684,610
1,552,480
1,500,000
1,458,194
199,212,979
% of
shares
44.90
2.07
1.96
1.43
1.21
1.03
1.01
0.97
0.88
0.80
0.72
0.70
0.68
0.64
0.60
0.59
0.53
0.48
0.47
0.45
62.11
Distribution of shares
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 shares and over
Total
Number of
shareholders
527
988
658
1,546
250
3,969
Number of
shares
281,552
2,868,722
5,235,610
49,595,902
262,762,192
320,743,948
% of shares
0.09
0.89
1.63
15.46
81.92
100.00
There were 147 shareholders (representing 11,515 shares) who held less than a marketable parcel.
69
Bell Financial GroupAnnual Report 2023 SHAREHOLDER INFORMATION (CONTINUED)
Substantial shareholders
The following shareholders are registered by Bell Financial Group Limited as substantial shareholders, having declared a relevant
interest in accordance with the Corporations Act:
Substantial shareholder
BELL GROUP HOLDINGS PTY LIMITED
ALASTAIR PROVAN
EST MR COLIN BELL
LEWIS BELL
Number
of shares
146,355,350
152,295,348
150,628,171
150,528,649
% of issued
capital
45.631
47.481,2
46.961,3
46.931,4
1. Bell Group Holdings Pty Limited (BGH) and its subsidiaries Bell Securities Pty Limited and Bell Asset Management (Holdings) Pty Ltd hold 146,230,350 BFG
ordinary shares. Alastair Provan, Estate Late Colin Bell and Lewis Bell each hold more than 20% of BGH and therefore under the Corporations Act they are
each deemed to have a relevant interest in the 146,230,350 BFG ordinary shares held by BGH and its subsidiaries.
2. Alastair Provan has a relevant interest in 5,939,998 BFG ordinary shares.
3. Est Mr Colin Bell has a relevant interest in 4,272,821 BFG ordinary shares.
4. Lewis Bell has a relevant interest in 4,823,545 BFG ordinary shares.
On‑market buy‑back
There is no current on-market buy-back.
2024 Annual General Meeting
Bell Financial Group Limited’s AGM will be held at 11:00am on Thursday, 11 April 2024. Details of the meeting will be sent
to shareholders separately.
70
Bell Financial GroupAnnual Report 2023 DIRECTORY
Bell Financial Group Ltd
ABN
59 083 194 763
Directors
Brian Wilson AO, Chairman and Independent Director
Alastair Provan, Non-Executive Director
Graham Cubbin, Independent Director
Christine Feldmanis, Independent Director
Andrew Bell, Non-Executive Director
Company Secretary
Cindy-Jane Lee
Registered Office
Level 29, 101 Collins Street
Melbourne VIC 3000
Telephone 03 9256 8700
Share Registry
Computershare Investor Services Pty Limited
452 Johnston Street
Abbotsford VIC 3067
Telephone 03 9415 5000
ASX Code
BFG
Shares are listed on the Australian Securities Exchange
Auditor
KPMG
Website Address
www.bellfg.com.au
71
Bell Financial GroupAnnual Report 2023 Bell Financial Group Limited
Level 29, 101 Collins Street
Melbourne VIC 3000
Australia
GPO Box 4718
Melbourne VIC 3001
Australia
www.bellfg.com.au