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Annual Report 2021
COUNTPLUS ANNUAL REPORT 2021 1
COUNTPLUS ANNUAL REPORT 2021 Appendix 4E
For the Year Ended 30 June 2021
1
Company details
Name of entity
CountPlus Limited
ABN
11 126 990 832
Reporting period
For the year ended 30 June 2021
Previous period
For the year ended 30 June 2020
2
Results for announcement to the market
Revenues from ordinary activities
Profit from ordinary activities after tax attributable to the owners of CountPlus Limited
Profit for the year attributable to the owners of CountPlus Limited
down
down
down
3% to
69% to
69% to
$’000
80,521
4,938
4,938
Comments
The profit for the Group after providing for income tax and non-controlling interest amounted to $4,938,000 (30 June 2020: $15,861,000).
Included in the results for the year ended 30 June 2020 is an amount of $10,952,000 relating to the gain on bargain purchase which is the
excess of the fair value of the acquired identifiable assets and liabilities over the purchase price of Count Financial.
3 Net tangible assets
Net tangible assets per ordinary security
4
Control gained over entities
Not applicable.
5
Loss of control over entities
Not applicable.
Reporting period
Cents
Previous period
Cents
37.50
35.78
2
COUNTPLUS ANNUAL REPORT 2021 Appendix 4E
For the Year Ended 30 June 2021
6 Dividends
Current period
Interim dividend – paid on 14 April 2021
Full year final dividend* – to be paid on 13 October 2021
* record date 24 September 2021
Previous period
Interim dividend – paid on 15 April 2020
Full year final dividend – paid on 14 October 2020
7 Details of associates
Name of associate
One Hood Sweeney Pty Ltd
Hunter Financial Planning Pty Ltd
OBM Financial Services Pty Ltd
Rundles CountPlus Pty Ltd
Rundles Financial Planning Pty Ltd
DMG Financial Holdings Pty Ltd
Group's aggregate share of associates profit
Profit from ordinary activities after income tax
8
Foreign entities
Amount per
security
Cents
Franked amount
per security
Cents
1.25
1.50
1.25
1.50
Amount per
security
Cents
Franked amount
per security
Cents
1.25
1.25
1.25
1.25
Reporting entity's percentage holding
Contribution to profit
Reporting period
%
Previous period
%
Reporting period
$’000
Previous period
$’000
32.36%
40.00%
40.00%
40.00%
20.00%
30.00%
32.36%
40.00%
40.00%
40.00%
20.00%
30.00%
1,192
255
332
312
54
353
950
360
188
336
57
288
2,498
2,179
Australian Accounting Standards have been applied to foreign entities when compiling the Appendix 4E and Financial Statements for the
year ended 30 June 2021.
3
COUNTPLUS ANNUAL REPORT 2021 About
CountPlus
CountPlus partners with leading firms
and provides valued services to a professional
community of financial advisers. We will,
collectively, secure the financial well being
of our clients.
4
COUNTPLUS ANNUAL REPORT 2021 Contents
Chairman's Report
CEO Report
Case Studies
Financial Summary
CountPlus Board
Directors' Report
Auditor's Independence Declaration
Financial Statements
ASX Additional Information
Investors' Information
6
8
10
12
14
16
32
33
98
99
5
COUNTPLUS ANNUAL REPORT 2021 Chairman's
Report
The Board is pleased to report that CountPlus is now well-
established to pursue and execute on its growth strategy.
The business ownership model of CountPlus has now
been fundamentally re-positioned (the Owner, Driver
– Partner or OD-P™ initiative), as seen by the increased
acquisition activity with seven OD-P™ transactions, nine
tuck-in investments and the complementary business
acquisition of Wealth Axis executed in FY21.
CountPlus has a strong balance sheet and capital
position including cash on hand of $26 million and will
continue to execute on its acquisition strategy consistent
with building and strengthening its service offerings
to accounting firms, financial advisers, and clients. With
this confidence in the business and a solid FY21 result
of NPAT $7.08 million, the Board has declared a final fully
franked dividend of 1.50 cents per share.
The last 12 months have presented several challenges
for CountPlus and its staff, clients, and the communities
in which it operates. The COVID-19 virus has presented
many difficulties and continues to challenge the very
fabric of our society and the way we live. I am very
thankful to our staff and businesses for the way they
have looked after their clients and colleagues.
CountPlus continues to look to the future with ambition
to grow its businesses and create improved commercial
and operational results, and with shareholder returns
our fundamental driver as measured by return on equity
and earnings per share. However, the Board is very aware
of the potential downside risks that may arise from the
uncertainties of the pandemic, the changing regulatory
framework of financial advice and the challenges and
opportunities that more sophisticated technology
may bring.
6
COUNTPLUS ANNUAL REPORT 2021 CountPlus continues to look to the future
with ambition to grow its businesses
and create improved commercial and
operational results.
The reshaping of Count Financial continued in FY21 with
the cessation of grandfathered revenue in December 2020,
and the continued educational reform and recruitment of
advisers (and retirement of others), as the business aims to
grow to obtain the benefits of scale. Through technological
advancements, efficiencies have been obtained and
improved business practices achieved. There remains
work to be done regarding the Count Financial business
including continuing to scale up our high-quality advice
firm foundations.
The Board is confident that Count Financial offers
market compelling long-term service value and will
grow its foundation of high quality, sustainable financial
advice firms.
The Board will continue to seek improved profitability
and organic growth from its existing businesses, together
with executing on its acquisition strategy directed by,
and consistent with, building and strengthening the
CountPlus service offering to firms, advisers, and clients.
Thank you to our employees and partners for their
respective contributions to CountPlus, and the Board
looks forward to continuing to build the business for the
benefit of shareholders and all CountPlus stakeholders.
Thank you for being a CountPlus shareholder.
Ray Kellerman
Chairman
7
COUNTPLUS ANNUAL REPORT 2021 CEO
Report
Dear Shareholders
Teams come together when faced with a shared struggle
and common purpose.
FY2021 had its share of struggles for CountPlus – the
impact of COVID-19, regulatory reform in financial advice
and the economic impact of the transition of Count
Financial to its new “clean” user pays model without
grandfathered revenue. Through all this we remained
focused on our core purpose: to collaborate with our
partner firms for mutual success, growth, and positive
client outcomes.
We grew revenue in our OD-P™ Firms and improved profit
margins, at the same time empathetically working with
our core small business clients through their own unique
set of struggles. We delivered positive outcomes for our
Count Financial Member Firms by improving efficiencies
in the delivery of client centric advice, focussing on
productivity and utilisation, quality assurance, and the
continual lift in professional standards.
I was inspired when observing the tremendous
collaboration and effort across the CountPlus community,
how we looked out for each other, how we looked out
for our clients and how we gave back to the communities
we serve.
8
COUNTPLUS ANNUAL REPORT 2021 Count Financial is purpose built
to be a client-centric and transparently
remunerated licensee offer to financial
advisers and the clients they serve.
I would encourage you to read the case studies in this
Annual Report of the people who demonstrate our
core values of teamwork, commitment, and courage.
The quality of the people on our team serves to
harden my resolve to stay the course on what we are
building at CountPlus at a time of enormous change
in financial advice.
Count Financial is purpose built to be a client-centric
and transparently remunerated licensee offer to
financial advisers and the clients they serve. We are not
subsidised through product distribution as our “product”
is financial advice. We continue to attract high quality
advisers to Count Financial, and the pipeline for quality
professional practitioners, firms and partners is strong.
Australia’s demand for quality financial advice is not
diminishing. In fact, the reduced number of financial
advisers will struggle to keep pace with demand.
This ‘fewer advisers, more clients’ scenario is but one
of the new challenges ahead in the financial advice
sector. For CountPlus and Count Financial it places
greater impetus on our efforts to improve efficiencies
for our financial advisers, introduce new technology
and streamline our administration and other
back-office support services.
The past year has seen strong evidence Count Financial is
on the right track, with the number of advice documents
produced increasing by 46% between FY2020 and FY2021,
with fewer financial advisers. We enabled a 57% increase
in advice documents produced per financial adviser during
this time.
In financial terms, the news is also positive as total
fees generated by the Count Financial adviser network
increased by 26% between 1 October 2019, the date
CountPlus acquired Count Financial, and 30 June 2021.
This is important for shareholders as the new economic
model for Count Financial is a fee per adviser and a share
of this growing revenue stream.
The Company continues to make efficient and disciplined
use of capital. CountPlus has an opportunity to invest in
financial advice at a time when major institutional players
have exited at significant cost to their reputation and
balance sheets.
I am confident that our strategy for growth within
CountPlus and Count Financial will deliver sustainable
returns to shareholders as more Australians seek quality
advice. Our investment in the right people, culture,
supporting technology and adjacent core businesses
will position us well for this future.
Thank you for being a co-shareholder in CountPlus.
Matthew Rowe
CEO and Managing Director
9
COUNTPLUS ANNUAL REPORT 2021 Case Studies
Culture complements
growth strategy
at AdviceCo
READ
Best interest focus
sparks a new direction
for dmca advisory
READ
Ascent chooses
Count Financial
READ
Merged 4Front a model
of empowered success
READ
10
COUNTPLUS ANNUAL REPORT 2021 Back office takes
centre stage
READ
Professionalism,
people, and pride
READ
Small town firm with
a big presence
READ
11
COUNTPLUS ANNUAL REPORT 2021 Financial
Summary
Revenue from contracts with customers
Other income
Total operating expenses
EBITA before profit from associates
Associates
Earnings before interest, tax and amortisation (EBITA)
Interest income
Interest expense
Amortisation
Profit before tax
Income tax expense
Gain on bargain purchase
#
1
2
3
4
5
6
7
8
9
Net profit from operations after income tax
10
Profit attributable to owners of CountPlus
Profit attributable to non-controlling interest
Basic earnings per share (cents)
Diluted earnings per share (cents)
11
12
13
14
15
Current assets
Current liabilities
Current ratio
Non-Current assets
Non-Current liabilities
Net assets
Net cash
12
2020
$'000
82,607
2,141
(76,067)
8,681
2,179
10,860
163
(1,108)
(1,402)
8,513
(2,017)
10,952
17,448
15,861
1,587
14.30
14.24
255,707
236,473
1.08
98,316
39,438
78,112
21,111
2021
$'000
2020 / 2021 change
%
80,521
3,530
(74,603)
9,448
2,498
11,946
53
(1,059)
(1,377)
9,563
(2,479)
–
7,084
4,938
2,146
4.43
4.39
321,451
299,725
1.07
95,212
35,116
81,822
21,911
(3%)
65%
(2%)
9%
15%
10%
(67%)
(4%)
(2%)
12%
23%
(100%)
(59%)
(69%)
35%
(69%)
(69%)
26%
27%
(1%)
(3%)
(11%)
5%
4%
COUNTPLUS ANNUAL REPORT 2021 Notes to Financial Summary
1. Revenue from contracts with customers
Revenue is generated from accounting services, financial
planning services and financial services. Accounting
related revenue represents 65% of revenue from contracts
with customers and was up on the prior period by 1%.
Financial planning revenue makes up 14% of revenue from
contracts with customers which is consistent with the prior
year. Financial services revenue makes up 11% of revenue
from contracts with customers and was down 30% on prior
period. Revenue from contracts with customers was lower
than the prior year by 3% primarily due to grandfathered
commissions no longer being received from January 2021.
2. Total operating expenses
Total operating expenses were 2% lower than the
prior period. This was primarily due to savings in other
operating expenses.
3. Share of net profit from associates
Share of net profit from associates increased by 15%
due to the full year earnings of DMG Financial Holdings
Pty Ltd which was acquired in FY20.
4. EBITA
Included in EBITA is the receipt of government grants
of $2.79M in FY21 ($1.74M in FY20).
Interest income
5.
The 67% decrease in interest income was driven by
reductions in the cash interest rate in the current period.
Interest expense
6.
Interest expense remained consistent with the prior
year and includes finance costs recognised in line with
accounting standard AASB 16 Leases.
7. Amortisation
Amortisation (non-cash) of $1.38M (2020: $1.40M) relates
primarily to an accounting requirement to write down
the value of intangible assets, acquired client relationships
and adviser networks, over their expected lifetime.
Income tax expense
8.
Income tax expense exceeded the prior year due
to the taxable capital gains on the disposal of shares
when partaking in OD-P™ transactions and the sale
of fee parcels in subsidiary firms.
Gain on bargain purchase
9.
The gain on bargain purchase of $11M recognised
in FY20, represents the excess of the fair value of the
acquired identifiable assets and liabilities over the
purchase price of Count Financial.
10.
Net profit from operations after income tax
Net profit after tax decreased in the current year due
to recognition of the gain on bargain purchase of $11M
in relation to the acquisition of Count Financial. Profit
attributable to CountPlus Ltd shareholders was $4.94M.
11. Current assets
Current assets increased due the indemnity asset
increasing by $65M to $260M which is due from
the Commonwealth Bank of Australia.
12. Current liabilities
The increase in current liabilities was due largely
to the increase in the remediation provision within
Count Financial by $65M to $260M.
13. Non-current assets
Non-current assets are in line with the prior period.
14. Non-current liabilities
Non-current liabilities decreased compared to last year
due to a reduction Ongoing insurance trail commission
payable in Count Financial.
15. Net cash
Net cash (cash and cash equivalent less interest bearing
liabilities) has increased to $21.91M (2019: $21.11M) due
predominantly to operating cash flows generated by
member firms.
13
COUNTPLUS ANNUAL REPORT 2021 CountPlus
Board
Ray Kellerman
Ray has over 30 years of experience in the financial services industry including in the
funds management, financial advisory, life insurance and corporate and structured finance
industries. Previous appointments include Independent Chairman of ClearView Wealth,
an ASX listed life insurance and financial services company, and Independent Chairman
of Credit Suisse Asset Management Australia. Prior to this he was with Perpetual Trustees
Australia for 10 years before establishing his own financial services and compliance advisory
business in 2001.
Ray is an owner and Executive Director of Quentin Ayers, an implemented asset advisor
specialising in alternative private market investments. He holds qualifications in law,
economics, investment securities and management.
Ray currently acts as a director for Goodman Funds Management Australia, Foundation
Life New Zealand and Ryder Capital. He is also active in a number of governance related
roles for some major fund managers operating in Australia.
Ray was appointed a Director of CountPlus in January 2017 and Chairman in April 2017.
Alison Ledger
Alison has more than 30 years of experience in the financial services industry. She has
held senior operational and strategic roles in banking, funds management and insurance
with Chase, Bankers Trust and IAG. As a Partner with McKinsey & Company, Alison
advised leading global and Australian banks on strategy, performance improvement and
organisational change. Alison’s more recent experience has been in digital transformation
and customer experience (CX). As Executive General Manager of Product, Pricing and
eBusiness, Alison ran IAG’s digital business and CX for the consumer brands including
NRMA, SGIO and SGIC.
Alison is Chair of CountPlus’ Remuneration and Nominations Committee and a member
of the Audit and Risk Committee. She is also a Non-Executive Director of Audinate Group
Limited (ASX:AD8) and Latitude Group Holdings Limited (ASX: LFS) as well as Hallmark
Insurance, a Latitude subsidiary.
Alison holds a Bachelor of Arts (Hons) in Economics from Boston College and an MBA from
Harvard University. She is also a graduate of the Australian Institute of Company Directors.
Kate Hill
Kate has over 20 years’ experience as an audit partner with Deloitte Touche Tohmatsu,
working with ASX listed and privately-owned clients. She has worked extensively in
regulated environments including assisting with Initial Public Offerings, capital raising and
general compliance, as well as operating in an audit environment. She held a variety of
leadership and executive roles in Deloitte and served for a period on the Board of Partners
of the Australian firm.
Kate Hill is an independent Non-Executive Director, chair of the Audit and Risk Committee
and member of the Acquisitions Committee. She is also an Independent Non-Executive
Director of Elmo Software Limited (ASX: ELO) where she serves as Chair of the Audit and Risk
Committee, and is a member of the Remuneration and Nominations Committee. She is the
Chair of Seeing Machines Limited (AIM: SEE) as well as being a member of the Finance and
Risk Committee, and the People and Culture Committee.
Kate holds a Bachelor of Science (Hons) from Bristol University, is a member of the Institute
of Chartered Accountants in Australia and New Zealand, and a graduate of the Australian
Institute of Company Directors.
14
COUNTPLUS ANNUAL REPORT 2021 Andrew McGill
Andrew has more than 30 years’ financial markets experience, including investment and
management experience within the alternative asset sector and the funds management
industry generally. He was previously Managing Director and CEO of ASX-listed Pacific
Current Group Limited and in this capacity also served on the Board of a number of
affiliated companies. Prior to joining Pacific Current Group, he was a founding partner
of Crescent Capital Partners, an independent mid-market private equity firm where
he worked from 2000 to 2010. Earlier in his career, Andrew held executive roles within
Macquarie Bank’s Corporate Finance and Direct Investment teams. He was also a consultant
with The LEK Partnership, an international firm of business strategy consultants.
Andrew is currently Chairman of the advisory board of Besen Pty Ltd.
Andrew holds a Bachelor of Commerce and a Bachelor of Laws from the University of New
South Wales and a Graduate Diploma in Applied Finance (FinSIA). He is also a Fellow of the
Financial Services Institute of Australasia.
Carolyn Colley
Carolyn has more than 30 years leadership experience spanning financial services,
product development and innovation. Carolyn was most recently a co-founder and Chief
Operating Officer of Faethm Pty Ltd, a global Software-as-a-Service augmented analytics
platform which enables companies, governments and educators to understand the impact
of emerging technologies on the Future of Work. She was the Chief Operating Officer
of Asgard Wealth Solutions and St. George’s Wealth Management business and was the
Head of Strategy for Macquarie Advisor Services and the Head of Personal Banking at
Macquarie Bank. Carolyn was also the CEO of formerly listed software business, Decimal
Software Limited.
Carolyn is an Independent Non-Executive Director of the subsidiary settlement and clearing
boards of the Australian Securities Exchange (ASX:ASX). An Independent Non-Executive
Director, Member of the Audit and Risk Committees and Remuneration and Nominations
Committee and Chair of the Claims Review Committee of OnePath Custodians, Oasis Fund
Management and IOOF Investment Management , IOOF’s Superannuation businesses.
An Independent Non- Executive Director and a Member of the Information Technology
committee and Remuneration and Nominations Committee of ASX listed salary packaging
and leasing business Smartgroup (ASX: SIQ). An independent Non-Executive Director
and Chair of the Digital Committee of Chartered Accountants Australia and New Zealand.
Carolyn is also a Director and Deputy Chair of Liverpool Neighbourhood Connections,
a community based (NFP).
Matthew Rowe
Matthew Rowe joined the CountPlus Board in October 2016 and was appointed CEO and
Managing Director in February 2017. He has led CountPlus through its turnaround strategy
and guided the successful acquisition and integration of Count Financial in October 2019.
Mr Rowe holds a Bachelor of Economics, Graduate Diploma in Accounting, Graduate
Diploma in Financial Planning and is a graduate of Harvard Business School. His professional
designations include CFP(Life), FCA, FCPA and GAICD.
Mr Rowe is a recognised change agent in financial services with a track record in leading
high-performing teams. He embodies a genuine values-based leadership with a particular
focus on people and culture, and drives commercial results based on strong commercial
and regulatory experience.
In 2017, Matthew was appointed by the Minister for Revenue and Financial Services to the
Board of the Financial Adviser Standards and Ethics Authority and served in this capacity
until late 2019.
Prior to this Matthew was Chairman of the Financial Planning Association of Australia and
represented Australia on the Global Standards Body. He is the former Managing Director of
Hood Sweeney, a CountPlus member firm, and the 30th largest accounting firm in Australia
and twice a BRW top 10 fastest growing firm.
15
COUNTPLUS ANNUAL REPORT 2021 Directors'
Report
The Directors present their report, together with the financial statements, on the consolidated entity (referred to
hereafter as the 'Group') consisting of CountPlus Limited (referred to hereafter as the 'Company' or 'parent entity')
and the entities it controlled at the end of, or during, the year ended 30 June 2021.
Board of Directors and Company Secretaries
Name
Ray Kellerman
Alison Ledger
Kate Hill
Andrew McGill
Carolyn Colley
Matthew Rowe
Position
Chairman
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Date of Appointment
27 April 2017
1 October 2016
26 June 2017
4 December 2017
6 October 2020
Executive Director / Chief Executive Officer / Managing Director
24 February 2017
Laurent Toussaint
Narelle Wooden
Company Matters Pty Ltd
(William Hundy)
Company Secretary
Company Secretary
Company Secretary
Robert Alan Shedden
Company Secretary
Doug Richardson
Company Secretary
29 June 2018
30 November 2018
30 April 2020
Resigned 30 October 2020
10 November 2020
Resigned 16 March 2021
8 June 2021
Information on the current Directors including their experience, expertise and other current directorships (including
former directorships) of publicly listed companies, is contained in the Board Profile Report on pages 14 to 15.
Meetings of Directors
Board of Directors
Name
Position
Ray Kellerman
Non-Executive Chair
Alison Ledger
Non-Executive Director
Kate Hill
Non-Executive Director
Andrew McGill Non-Executive Director
Carolyn Colley* Non-Executive Director
Matthew Rowe Managing Director and CEO
Audit and Risk
Committee
Acquisitions
Committee
Remuneration
and Nominations
Committee
Technology
and Innovation
Committee
Meetings
Attended
Position
Meetings
Attended
Position
Meetings
Attended
2/2^
4/4
4/4
Member
Chair
Member
2/2^
6/6
6/6
5/6
6/6
4/4
6/6
Position
Member
Chair
Meetings
Attended
Position
Meetings
Attended
5/5
5/5
Member
Chair
4/4
4/4
Member
4/4
Member
4/5
Member
Chair
Member
3/3
3/3
3/3
* Carolyn Colley was appointed as Director on 6 October 2020
^ Carolyn Colley was appointed as a member of the Audit and Risk Committee, replacing Ray Kellerman on 1 December 2020
16
COUNTPLUS ANNUAL REPORT 2021 Principal activities
Capital management
During the financial year the principal continuing
activities of the Group consisted of:
Î accounting, tax and audit services;
Î
financial advice in relation to investment,
superannuation and personal insurance; and
Î
financial services being the operator of financial
advice licence business.
Review of operations
The profit for the Group after providing for income tax
and non-controlling interest amounted to $4,938,000
(30 June 2020: $15,861,000).
The management team has been focussed on working
with our member firms to improve the key financial,
cultural and strategic drivers and grow by acquisitive
activity which is reflected in the improved financial
results for the year ending 30 June 2021.
COVID-19
There is significant uncertainty around the breadth and
duration of business disruptions related to COVID-19,
as well as its impact on the Australian and international
economies.
COVID-19 has had an initial adverse financial impact
on the CountPlus business, however, in the year ended
30 June 2021 this has improved as clients accelerate work
normally done in the second half of the financial year.
CountPlus received $2,389,000 in COVID-19 related
government grants in this reporting period.
Note that CountPlus’ clientele is comprised of small,
Australian-based businesses from a broad cross-section
of industries.
Going forward, the Group is unable to determine if
COVID-19 will have a material impact on its operations.
The Company is managing the downside risk presented
by COVID-19 via tight management of costs, a focus on
working capital management and targeted deployment
of capital and resources.
Interest-bearing debt has decreased from $4,731,000
at 30 June 2020 to $4,328,000 at 30 June 2021. CountPlus
continues to focus on prudent capital management by
improving cashflows generated by Partner firms, paying
dividends from operating cashflows and investing
in earnings accretive acquisitions after undergoing
a rigorous acquisition process.
Significant changes in the state
of affairs
Significant changes in the state of affairs of the Group
during the financial year were as follows:
On 1 July 2020, CountPlus Limited’s accounting
and business advisory firm Twomeys Group Pty Ltd,
acquired various client accounting-based revenues
of Cultiv8 Accounting Pty Ltd for $0.30M. Twomeys also
completed a 40% equity buy back by Key Management
Personnel under the CountPlus ‘Owner, Driver – Partner’
model in two tranches for $1.17M. CountPlus retains
a 60% shareholding in Twomeys.
On 17 September 2020, CountPlus Limited’s accounting
and business advisory firm AdviceCo Pty Ltd, acquired
the accounting revenue of Arch Capital Pty Ltd for $0.40M.
On 30 September 2020, CountPlus Limited’s wholly
owned subsidiary, Cooper Reeves Pty Ltd, acquired the
financial advice revenues of CBD Wealth Solutions Pty Ltd
for $0.59M.
On 6 October 2020, CountPlus Limited’s accounting and
business advisory firm Mogg Osborne Pty Ltd, acquired
the NSW based business Freedom Accounting Group
Pty Ltd for $0.71M.
On 8 December 2020, CountPlus Limited's accounting
and business advisory firm O'Brien Accountants and
Advisors Pty Ltd acquired the accounting business
of Hillard O'Donnell and Associates for $0.57M.
On 19 March 2021, CountPlus Limited's accounting and
business advisory firm Bentley's (WA) Pty Ltd, acquired
50% of Stirling Partners from Onesixtwo Pty Ltd for $1.09M.
There were no other significant changes in the state
of affairs of the Group during the financial year.
17
COUNTPLUS ANNUAL REPORT 2021
Dividends
Dividends paid / declared during the financial year were as follows:
Financial year ended
Franking
2020
2021
2021
Fully franked
Fully franked
Fully franked
Status
Paid
Paid
Cents per share
Payment date
1.25 (per fully paid share)
14 October 2020
1.25 (per fully paid share)
14 April 2021
Declared
1.50 (per fully paid share)
13 October 2021
Matters subsequent to the end of the
financial year
Likely developments and expected
results of operations
On 14 July 2021, CountPlus Limited accounting and
business advisory firm, NSW based Unite Advisory Pty
Ltd (Unite) finalised terms to acquire 100% of the business
of Bentley Brett & Vincent Pty Ltd. Simultaneously with
this transaction, Unite will proceed with an equity buy-
back program by Key Management Personnel, under
the CountPlus OD-P™ model.
On 30 July 2021, CountPlus Limited finalised terms
to sell the Audit and Corporate business units of
accounting and business advisory firm Bentleys (WA)
Pty Ltd to Hall Chadwick (WA) Pty Ltd.
On 26 August 2021, the Directors resolved to declare
a full year final dividend for FY21 of 1.50 cents (fully
franked) to be paid on 13 October 2021 (Record date
25 September 2021).
No other matter or circumstance has arisen since
30 June 2021 that has significantly affected, or may
significantly affect:
a) the consolidated entity’s operations in future
financial years;
b) the results of those operations in future financial
years; or
c) the consolidated entity’s state of affairs in future
financial years.
A letter has been sent to shareholders providing a report
into the operational and strategic initiatives being driven
by the Group. We are continuing to build the capacity to
undertake merger and acquisition opportunities at a time
of unprecedented change in our core business segments.
Our core business
The Group's core business is accounting, tax and audit
services, financial advice in relation to investment,
superannuation and personal insurance; and financial
services being the operator of financial advice licence
business. The Group will continue to align, build, and grow
its core business through organic and acquisitive growth.
Material business risks
The main risks for the Group are classified into two
categories, operational and legislative. Group risks are
regularly assessed by the Board and the Board’s Audit
and Risk Committee. Risks are addressed in an appropriate
manner and are reflected through changes in Group
policies as required.
As part of the Group's operational risk, we are focused
on the impact of COVID-19.
18
COUNTPLUS ANNUAL REPORT 2021 Operational risk
Legislative risk
The main operational risk for our accounting and business
advisory firms relates to potential loss of clients, working
capital management and staff costs which may be
triggered by either senior team departures or declining
service levels. Accounting and business advisory firms
have regular board and management meetings in which
the performance of the firm and forecasts are analysed.
Any operational issues are also addressed at those
meetings. Accounting and business advisory firms
Principals are subject to restraint clauses as part of their
employment contracts. In addition, all accounting and
business advisory firms have succession plans in place.
Training and compliance monitoring have been
implemented to ensure standards are being met.
A further operational risk relates to inappropriate
or inadequate client advice. Regarding the acquisition
of Count Financial, which completed on 1 October 2019,
the Commonwealth Bank of Australia has provided a
$300 million indemnity to cover remediation of past
conduct as of 30 June 2021 ($200 million from 1 October
2019 to 29 June 2020 and $210 million from 30 June 2020
to 30 July 2020). All firms are required to have quality
assurance processes and appropriate professional
indemnity insurance either directly or as part of the Group
policy. Accounting and business advisory firms who are
part of the Count Financial licensee network are covered
under Count Financial's professional indemnity insurance
arrangements for their financial planning services.
In terms of legislative risk, any substantive changes
that impact the provision of accounting / tax services
or financial planning services, could have a material
impact on the Group. For accounting / tax related
services, initiatives being considered by the Federal
Government to further reduce the requirement for
individuals to lodge tax returns may have some impact
on the compliance based work for some accounting
and business advisory firms.
Legislative risk is not currently expected to significantly
impact the profitability of accounting and business
advisory firms and the Group, but it will continue to
be closely monitored by the Board’s Audit and Risk
Committee.
In addition to the two main risk categories, the following
are some of the additional risks assessed by the Board:
Î
Integration risk: risk relating to the successful integration
of newly acquired accounting and business advisory
firms;
Î Expense management; failure to control expenses
such as staff costs would result in earnings for CountPlus
not reflecting revenue performance by accounting and
business advisory firms; and
Î Owner, Driver – Partner model: the timing and
implementation of this initiative will be subject to the
underlying performance of the participating firms
against key performance indicators.
19
COUNTPLUS ANNUAL REPORT 2021 Remuneration
Report (audited)
The remuneration report details the Key Management
Personnel remuneration arrangements for CountPlus
Limited ('CountPlus' or 'the Company'), in accordance
with the requirements of the Corporations Act 2001
(Cth) ('the Act') and its Regulations.
Key Management Personnel are those persons having
authority and responsibility for planning, directing
and controlling the activities of the entity, directly
or indirectly, including all Directors.
The following Key Management Personnel are covered by this report:
Non-Executive Directors
Title / Committees
Ray Kellerman
Non-Executive Chairman
Member, Remuneration and Nominations Committee
Changes during FY21
Relinquished membership
of Audit and Risk Committee
Alison Ledger
Non-Executive Director
No change
Kate Hill
Andrew McGill
Chair, Remuneration and Nominations Committee
Member, Audit and Risk Committee
Non-Executive Director
Chair, Audit and Risk Committee
Member, Acquisitions Committee
Non-Executive Director
Chair, Acquisitions Committee
Member, Remuneration and Nominations Committee
Member, Technology and Innovation Committee
Carolyn Colley
Non-Executive Director
Chair, Technology and Innovation Committee
Member, Audit and Risk Committee
No change
Appointed as member of
Technology and Innovation
Committee
Appointed 6 October 2020
Appointed as Chair of Technology
and Innovation Committee
Appointed as Member of Audit
and Risk Committee
Executive Director
Matthew Rowe
Chief Executive Officer
Managing Director
Member, Acquisitions Committee
Member, Technology and Innovation Committee
Appointed as member of
Technology and Innovation
Committee
Other Key Management Personnel
Laurent Toussaint
Graham McGeagh
Narelle Wooden
Andrew Kennedy
Chief Financial Officer and Company Secretary
Chief Operating Officer
General Counsel and Company Secretary
Chief Advice Officer, Count Financial
No change
No change
No change
No change
This section of the Directors' report has been audited by the external auditors, Grant Thornton, as required by section
308(3C) of the Act.
20
COUNTPLUS ANNUAL REPORT 2021
Principles used to determine the nature
and amount of remuneration
The objective of the Group's executive reward framework
is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework
aligns executive reward with the achievement of strategic
objectives and the creation of value for shareholders, and
it is considered to conform to the market best practice for
the delivery of reward. The Board of Directors ('the Board')
ensures that executive reward satisfies the following key
criteria for good reward governance practices:
Î competitiveness and reasonableness;
Î acceptability to shareholders;
Î performance linkage / alignment of executive
compensation with the creation of shareholder
value; and
Î
transparency.
The Remuneration and Nominations Committee
('the Committee') is responsible for determining
and reviewing remuneration arrangements for its
Directors and Executives. The performance of the Group
depends on the quality of its Directors and Executives.
The remuneration philosophy is to attract, motivate and
retain high performing and high quality personnel.
The Committee's purpose is:
Î Make recommendations to the Board in relation to the
remuneration of Executive and Non-Executive Directors;
Î Review and approve CEO and Senior Management
remuneration policy for CountPlus; and
Î Evaluate potential candidates for executive positions,
oversee the development of executive succession plans
and evaluate potential candidates for non-executive
director positions.
Any decision made by the Committee concerning an
individual Executive’s remuneration is made without the
Executive being present at the meeting.
The reward framework is designed to align executive
reward to shareholders' interests. The Board has considered
that it should seek to enhance shareholders' interests by:
Î having profit as a core component of plan design;
Î
focusing on sustained growth in value for shareholders,
consisting of dividends and growth in share price, and
delivering constant or increasing return on assets as well
as focusing the executive on key non-financial drivers
of value; and
Î attracting and retaining high calibre Executives.
Additionally, the reward framework should seek
to enhance Executives' interests by:
Î
Î
rewarding capability and experience;
reflecting competitive reward for contribution
to growth in shareholder wealth; and
Î providing a clear structure for earning rewards.
In accordance with best practice corporate governance,
the structure of Non-Executive Director and Executive
Director remuneration is separate.
Non-Executive Directors remuneration
Fees and payments to Non-Executive Directors reflect
the demands and responsibilities of their role. Non-
Executive Directors' fees and payments are reviewed
annually by the Committee. The Committee may,
from time to time, receive advice from independent
remuneration consultants to ensure Non-Executive
Directors' fees and payments are appropriate and in line
with the market. The Chairman's fees are determined
independently to the fees of other Non-Executive
Directors taking into account the fees paid for similar
roles in comparable companies. The Chairman is not
present at any discussions relating to the determination
of his own remuneration. Non-Executive Directors do
not receive performance rights or other incentives.
ASX listing rules require that the aggregate remuneration
for the Non-Executive Directors of the Company be
approved by shareholders. The Group most recently
obtained approval from its shareholders at its 2019
Annual General Meeting held on 19 November 2019 for
a maximum annual aggregate remuneration of $700,000.
21
COUNTPLUS ANNUAL REPORT 2021 Executive remuneration
The Group aims to reward executives based on their
position, responsibility and performance, with a level
and mix of remuneration which has both fixed and
variable components.
The Executive remuneration and reward framework
has four components:
Î base pay and non-monetary benefits;
Î short-term performance incentives;
Î
long term incentives including share-based payments;
and
Î other remuneration such as superannuation and long
service leave.
The combination of these comprises the Executive's total
remuneration.
Base pay, consisting of base salary, superannuation
and non-monetary benefits, are reviewed annually by
the Committee based on individual and business unit
performance, the overall performance of the consolidated
entity and comparable market remuneration.
The short-term incentive ('STI') program is designed
to align the targets of the business units with the
performance hurdles of executives. STI payments are
granted to executives based on specific annual targets
and key performance indicators being achieved.
The long-term incentives ('LTI') include share-based
payments. Performance rights are awarded to executives
over a period based on long-term incentive measures.
These measures are growth in earnings per share ('EPS')
and in return on equity ('ROE') performance hurdles.
The Committee reviews the long-term equity-linked
performance incentives for executives annually.
Group performance and link to remuneration
Short term incentives are based on the achievement
of a financial and non-financial balanced scorecard.
Long term incentives are based on Adjusted EPS
Growth and ROE.
The table below provides a summary of the Group's
earnings performance for the current and prior years:
Group Revenue ($'000)
Adjusted NPAT attributable to CountPlus shareholders ($'000)
Share price ($)
Share of associates earnings ($'000)
Dividends paid / declared (cents)
Adjusted EPS (cents)
Adjusted ROE (%)
Use of remuneration consultants
No remuneration consultants were engaged during
the year ended 30 June 2021 (2020: nil).
2021
80,521
5,298
1.00
2,498
2.75
4.75
7.06
2020
82,607
5,950
0.90
2,179
2.50
5.37
9.68
2019
68,646
3,681
0.81
1,553
2.00
3.33
6.50
Voting and comments made at the Company's 2020
Annual General Meeting ('AGM')
At the 2020 AGM, 99.7% of the votes received supported
the adoption of the remuneration report for the year
ended 30 June 2020. The Company did not receive any
specific feedback at the AGM regarding its remuneration
practices.
22
COUNTPLUS ANNUAL REPORT 2021 Service agreements
Non-Executive Directors
Executive Key Management Personnel
Non-Executive Directors do not have fixed-term contracts
with the Group. On appointment to the Board, all Non-
Executive Directors enter into a service agreement with
the Group in the form of a letter of appointment. The
letter summarises the Board policies and terms, including
compensation.
Remuneration and other terms of employment for the
Executive Director and other Key Management Personnel
are formalised in employment contracts. Each of these
agreements provide for the provision of performance
related cash bonuses and other benefits (which may
include car allowances, car parking and participation in any
equity scheme). The major provisions of the agreements
relating to remuneration are set out below.
Employee
Matthew Rowe
Laurent Toussaint
Graham McGeagh
Narelle Wooden
Andrew Kennedy
Base salary*
Term of agreement
Notice period
478,306
333,306
313,306
293,306
303,306
Five years**
No fixed term
No fixed term
No fixed term
No fixed term
Six months
Three months
Three months
Three months
Three months
* Excluding superannuation based on FY21 salaries. Refer to pages 24 to 25 for a detailed breakdown of the remuneration components.
** Matthew Rowe's agreement commenced on 24 February 2017.
On termination the Executive Director and other
Key Management Personnel are entitled to the
following benefits:
Resignation
On resignation, unless the Board determines otherwise,
all unvested STI or LTI benefits are forfeited.
Statutory entitlements
Payment of statutory entitlements of long service leave
and annual leave applies in all events of separation.
Death or total permanent disability
On death or total and permanent disability, the Board
has discretion to allow all unvested STI and LTI benefits
to vest.
Termination for serious misconduct
The Group may immediately terminate employment
at any time in the case of serious misconduct, and the
CEO and Other Executive KMP will only be entitled to
payment of total base pay up to the date of termination.
On termination without notice by the Group in event of
serious misconduct: all unvested STI or LTI benefits will
be forfeited; and any equity instruments provided to the
employee on vesting of STI and LTI awards that are held
in trust, will be forfeited.
Post-employment restraints
The CEO is subject to post-employment restraints
of up to 12 months. All Other Executive KMP are
subject to post-employment restraints for 6 months.
23
COUNTPLUS ANNUAL REPORT 2021 Short term incentive
Long term incentive
Short term incentives are in place to reward Executive
Key Management Personnel for meeting annual
performance targets set by the Board at the beginning
of the reporting period. The STI is set as a percentage
of base salary. All STIs awarded are recommended by the
Committee to the Board for approval. As a listed Company,
the Directors are mindful of shareholder expectations for
the Group's performance when setting and approving
these incentives.
Executive Key Management Personnel may, at the
discretion of the Board, be granted Performance Rights,
which are contractual rights to receive shares in the Group
if nominated performance milestones are achieved. These
Performance Rights are designed to align a proportion
of Executive Key Management Personnel's remuneration
with shareholder value over the longer term subject to
the satisfaction of various performance milestones, as
described on page 28 to 29 of this report.
Details of remuneration
Remuneration of Key Management Personnel of the Group are set out in the following tables.
Short term benefits
Post-employment
benefits
Long term
benefits
Share based
expense2
Cash salary
and fees
Cash
bonus3
Non-
monetary
Superannuation
Long service
leave
Equity-
settled
$
$
$
$
$
$
Total
$
% Variable
remuneration
%
136,986
82,192
82,192
82,192
57,675
–
–
–
–
478,306
135,106
333,306
65,545
313,306
52,856
293,306
54,862
–
–
–
–
–
–
–
–
13,014
7,808
7,808
7,808
5,479
–
–
–
–
–
–
–
–
150,000
90,000
90,000
90,000
63,154
0%
0%
0%
0%
0%
21,694
15,423
106,627
757,156
32%
21,694
21,694
21,694
6,348
26,121
453,014
3,129
2,814
23,624
414,609
20,000
392,676
20%
18%
19%
8%
298,425
16,969
4,881
21,694
11,466
11,025
364,460
2,157,886 325,338
4,881
150,387
39,180
187,397 2,865,069
2021
Non-Executive Directors
Ray Kellerman
Alison Ledger
Kate Hill
Andrew McGill
Carolyn Colley1
Executive Director
Matthew Rowe
Other Key Management Personnel
Laurent Toussaint
Graham McGeagh
Narelle Wooden
Andrew Kennedy
Total
1 Carolyn Colley was appointed on 6 October 2020.
2 Represents the value calculated in accordance with AASB 2 Share Based Payment of performance rights granted as part of the
long term incentive.
3 The STI award date was 5 August 2021.
24
COUNTPLUS ANNUAL REPORT 2021 Short term benefits
Post-employment
benefits
Long term
benefits
Share based
expense2
Cash salary
and fees
Cash
bonus5
Non-
monetary
Superannuation
Long service
leave
Equity-
settled
$
$
$
$
$
$
Total
$
% Variable
remuneration
%
136,986
82,192
82,192
82,192
–
–
–
–
459,119
117,000
328,164
53,500
308,164
38,548
291,497
44,000
134,422
36,480
1,904,928 289,528
–
–
–
–
–
–
–
–
–
–
13,014
7,808
7,808
7,808
–
–
–
–
–
–
–
–
150,000
90,000
90,000
90,000
0%
0%
0%
0%
21,003
9,006
71,556
677,684
28%
21,003
21,003
21,003
3,049
1,009
14,888
420,604
13,977
382,701
886
10,401
367,787
9,290
3,640
3,675
187,507
129,740
17,590
114,497 2,456,283
16%
14%
15%
21%
2020
Non-Executive Directors
Ray Kellerman
Alison Ledger
Kate Hill
Andrew McGill
Executive Director
Matthew Rowe
Other Key Management Personnel
Laurent Toussaint
Graham McGeagh
Narelle Wooden
Andrew Kennedy4
Total
4 Andrew Kennedy was appointed a Chief Advice Officer of Count Financial on 13 January 2020.
5 The STI award date was 27 August 2020.
The below graph shows the package mix of Key Management Personnel’s remuneration for FY21 and FY20.
w
e
h
t
t
a
M
e
w
o
R
t
n
e
r
u
a
L
t
n
i
a
s
s
u
o
T
m
a
h
a
r
G
h
g
a
e
G
c
M
e
l
l
e
r
a
N
n
e
d
o
o
W
w
e
r
d
n
A
y
d
e
n
n
e
K
25
COUNTPLUS ANNUAL REPORT 2021
The graph below shows the FY21 and FY20 STI awarded as a percentage of maximum opportunity.
Matthew
Rowe
Laurent
Toussaint
Graham
McGeagh
Narelle
Wooden
Andrew
Kennedy
Shares held by Key Management Personnel
The number of shares in CountPlus Limited held during the financial year by each Director and other members
of Key Management Personnel of the Group, including their personally related parties, is set out below:
Ordinary shares
Ray Kellerman
Alison Ledger
Kate Hill
Andrew McGill
Carolyn Colley
Matthew Rowe
Laurent Toussaint
Graham McGeagh
Andrew Kennedy
Total
Balance at the
start of the year
Received as part
of remuneration
Additions*
Disposals / other
Balance at the
end of the year
907,000
10,000
200,000
10,000
–
–
–
–
–
–
1,485,000
67,347
20,000
28,330
10,394
–
–
–
893,000
–
–
–
6,000
847,653
–
–
–
2,670,724
67,347
1,746,653
–
–
–
–
–
–
–
–
–
–
1,800,000
10,000
200,000
10,000
6,000
2,400,000
20,000
28,330
10,394
4,484,724
* All additions during the year were from on-market purchases.
No other Key Management Personnel have an interest in CountPlus shares.
26
COUNTPLUS ANNUAL REPORT 2021 Equity plans
Long term incentive plan
Historically CountPlus operated three equity plans for
employees: a loan funded share plan, an employee loyalty
equity plan, and a long term incentive plan. Two plans have
been closed and the remaining equity plan is the long
term incentive plan.
Performance Rights are issued by the Group to Key
Management Personnel under its long term incentive
plan at the discretion of the Board.
The purpose of this incentive plan is to align the
remuneration of Executive Key Management Personnel
with shareholder value, while retaining key executives.
This long term incentive plan offers Performance Rights
in CountPlus subject to the satisfaction of the relevant
performance milestones, as well as service and other
conditions, at the relevant vesting date. All equity grants
are made after the AGM each year. Executives must still
be employed by CountPlus to be eligible to receive the
Performance Rights.
See below summary of the long term incentive plan and performance rights in place:
Plan
Grant date
Expiry date
2020 LTI award
18/11/2020
20/12/2024
2019 LTI award
19/11/2019
20/12/2023
2018 LTI award
19/11/2018
20/12/2022
2017 LTI award
23/11/2017
22/11/2020
Total performance
shares granted
Exercised
Forfeited
Total balance
at end of the year
599,220
567,415
386,706
134,693
1,688,034
–
–
–
–
–
–
(67,347)
(67,347)
(67,346)
(67,346)
599,220
567,415
386,706
–
1,553,341
27
COUNTPLUS ANNUAL REPORT 2021 Summary of performance rights issued
The table below outlines performance rights granted to each Executive KMP:
Participant
Matthew Rowe*
Laurent Toussaint
Graham McGeagh
Narelle Wooden
Andrew Kennedy
Plan
2020
2019
2018
2017
2020
2019
2018
2017
2020
2019
2018
2017
2020
2019
2018
2017
2020
2019
2018
2017
Performance Rights issued
Fair value per right
$
Total fair value
$
361,150
358,943
140,182
134,693
994,968
64,333
63,939
102,555
–
230,827
60,481
60,110
96,110
–
216,701
56,628
56,282
47,859
–
160,769
56,628
28,141
–
–
84,769
1.03835
1.0447
0.5850
0.6088
1.03835
1.0447
0.5850
–
1.03835
1.0447
0.5850
–
1.03835
1.0447
0.5850
–
1.03835
1.0447
–
–
375,000
375,000
82,000
82,000
914,000
66,800
66,799
59,990
–
193,589
62,800
62,799
56,220
–
181,819
58,800
58,799
27,995
–
145,594
58,800
29,400
–
–
88,200
Total
1,688,034
1,523,202
* Approval for the issue of the Performance Rights to Matthew Rowe was obtained from shareholders under ASX Listing Rule 10.14.
Performance milestones and
vesting schedule
Each Performance Right is issued by the Group and vests
into one ordinary share in the Group. Performance Rights
carry no dividend or voting rights. For Performance Rights
to vest, the relevant Executive must remain employed
or engaged by the Group at the relevant vesting date and
the relevant performance milestones must be satisfied.
The number of performance rights that vest is dependent
on the extent to which the performance milestone
meets a range of values (as described below) as at the
relevant vesting date. The Performance Rights vest on
a straight-line basis between the set range of values
specified for each performance milestone.
28
No exercise price is payable by an Executive on vesting
of a Performance Right. If the minimum set value for
each performance milestone is not satisfied on particular
vesting date, the relevant Performance Rights lapse.
The performance hurdles are growth in EPS and ROE.
These were chosen because the Group believes they align
with the Group's strategy and shareholder interests and
best reflect the key financial performance metrics of the
Group and strike an appropriate balance between growth
and long-term profitability.
COUNTPLUS ANNUAL REPORT 2021 When EPS growth of 10% to 12.5% or more is generated,
tranche 1 vests on a straight-line basis between 20%
and 100%.
When ROE of 9% to 15% or more is generated, tranche 2
vests on a straight-line basis between 10% and 100%.
Average ROE Hurdle (50%)
For the 2018, 2019 and 2020 awards on issue the second
performance milestone is based on whether the Group's
return on equity meets or exceeds the returns set out
below over the consecutive financial years of the award.
Vesting schedule
Award
2020
2019
2018
2017
Term
Four years
Four years
Four years
Three years
In FY21, the 2017 LTI award vested and 67,347 ordinary
shares were exercised. This represented the EPS tranche
which is the only tranche that vested.
Diluted EPS Growth Hurdle (50%)
For all current awards on issue the first performance
milestone is based on whether the Group's earnings per
share achieves or exceeds a diluted compound earnings
growth rate as set out below over the consecutive financial
years of the award.
Diluted EPS Growth
% of Performance Rights vesting
< 10% per annum
0%
= or > 10% per annum
20% – 99%
= or > 12.5% per annum
100%
Average ROE
% of Performance Rights vesting
< 9% per annum
0%
= or > 9% per annum
10% – 99%
= or > 15% per annum
100%
For the 2017 awards on issue the second performance
milestone is based on whether the Group's return
on equity meets or exceeds the returns set out below
over the consecutive financial years of the award.
CAGR ROE
% of Performance Rights vesting
< 12% per annum
0%
= or > 12% per annum
20% – 99%
= or > 15% per annum
100%
Other transactions with
Key Management Personnel
Managing Director and CEO Matthew Rowe is a
Director and indirect shareholder of My Accounts Pty Ltd
('My Accounts'). In FY21 CountPlus used the services of
My Accounts for which it paid $43,600 (excluding GST).
Mr Rowe did not participate or bear any kind of influence
in decisions relating to transactions with My Accounts.
There are no other transactions which involved the Key
Management Personnel during the 2021 financial year.
This concludes the remuneration report, which has
been audited.
29
COUNTPLUS ANNUAL REPORT 2021 Indemnity and Insurance of Officers
During the financial year, the Group paid a premium in
respect of a contract to insure the Directors and Executives
of the Group against a liability to the extent permitted
by the Corporations Act 2001. The contract of insurance
prohibits disclosure of the nature of the liability and the
amount of the premium.
Environmental regulation
The Group is not subject to any significant environmental
regulation under Australian Commonwealth or State law.
Non-audit services
Details of the amounts paid or payable to the auditor
for non-audit services provided during the financial year
by the auditor are outlined in note 36 to the financial
statements.
The Board, via the Audit and Risk Committee, has a
formal policy on the provision of auditing and related
services. Specifically, the external auditor is precluded
from the provision of any services that might threaten
its independence or conflict with its assurance and
compliance role. The policy provides that all non-audit
services by the external auditor are pre-approved by
the Chair of the Audit and Risk Committee. Semi-annual
reports on the provision of auditing and related services
are provided to the Board through the Audit and Risk
Committee.
The Directors are satisfied that the provision of non-
audit services during the financial year, by the auditor
(or by another person or firm on the auditor's behalf), is
compatible with the general standard of independence
for auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services as
disclosed in note 36 to the financial statements do
not compromise the external auditor's independence
requirements of the Corporations Act 2001 for the
following reasons:
Î all non-audit services with pre-approved by the Chair
of the Audit and Risk Committee with consideration
given to the nature of the services, the suitability of
the proposal of the audit firm compared with other
tenderers and the quantum of fees involved;
Î all non-audit services have been considered specifically
to ensure that they do not impact the integrity and
objectivity of the auditor; and
Î none of the services undermine the general principles
relating to auditor independence as set out in APES
110 Code of Ethics for Professional Accountants issued
by the Accounting Professional and Ethical Standards
Board, including reviewing or auditing the auditor's
own work, acting in a management or decision-making
capacity for the Group, acting as an advocate for the
Group or jointly sharing economic risks and rewards.
30
COUNTPLUS ANNUAL REPORT 2021 Auditor's independence declaration
Corporate Governance statement
A copy of the auditor's independence declaration as
required under section 307C of the Corporations Act
2001 is set out immediately after this Directors' report.
Rounding of amounts
The Group is of a kind referred to in Corporations
Instrument 2016 / 191, issued by the Australian
Securities and Investments Commission, relating
to 'rounding-off'. Amounts in this report have been
rounded off in accordance with that Corporations
Instrument to the nearest thousand dollars, or in
certain cases, the nearest dollar.
The Group's Directors and management are committed to
conducting the business of the Group in an ethical manner.
The Group has adopted and has substantially complied
with the ASX Corporate Governance Principles and
Recommendations (Fourth Edition) (Recommendations)
to the extent appropriate to the size and nature of the
Group's operations. The Group has prepared a statement
which sets out the corporate governance practices that
were in operation throughout the financial year for the
Group, identifies any Recommendations that have not
been followed, and provides reasons for not following such
Recommendations (Corporate Governance Statement).
In accordance with the ASX Listing Rules 4.7.4 and 4.10.3,
the Corporate Governance Statement will be available
for review on CountPlus’ website (www.countplus.com.
au) and will be lodged together with an Appendix 4G
with the ASX while this Annual Report is lodged with ASX.
The Appendix 4G will identify each Recommendation
that needs to be reported against by CountPlus and
will provide shareholders with information as to where
relevant governance disclosures can be found. The Group's
corporate governance policies and charters and policies
are all available on CountPlus’ website.
This report is made in accordance with a resolution of
Directors, pursuant to section 298(2)(a) of the Corporations
Act 2001.
On behalf of the Directors,
Ray Kellerman
Chairman
26 August 2021
Sydney
31
COUNTPLUS ANNUAL REPORT 2021 Auditor's Independence Declaration
Level 17, 383 Kent Street
Sydney NSW 2000
Correspondence to:
Locked Bag Q800
QVB Post Office
Sydney NSW 1230
T +61 2 8297 2400
F +61 2 9299 4445
E info.nsw@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of CountPlus Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of CountPlus
Limited for the year ended 30 June 2021, I declare that, to the best of my knowledge and belief, there have been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
S M Thomas
Partner – Audit & Assurance
Sydney, 26 August 2021
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
32
COUNTPLUS ANNUAL REPORT 2021 Contents
Financial Statements
Corporate Directory
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors' Declaration
Independent Auditor’s Report
34
35
36
37
38
39
93
94
33
COUNTPLUS ANNUAL REPORT 2021 CHIEF FINANCIAL OFFICER
Laurent Toussaint
COMPANY SECRETARY
Laurent Toussaint
Narelle Wooden
Company Matters Pty Ltd
(William Hundy)
Resigned 30 October 2020
Robert Alan Shedden
Appointed 10 November 2020
Resigned 16 March 2021
Doug Richardson
Appointed 8 June 2021
Level 8
1 Chifley Square
Sydney NSW 2000
Telephone +61 2 8218 8778
Computershare Investor
Services Pty Ltd
Level 3, 60 Carrington Street
Sydney NSW 2000
Telephone +61 2 8234 5000
Grant Thornton
Audit Pty Ltd
Level 17, 383 Kent Street
Sydney NSW 2000
Telephone +61 2 8297 2400
Baker McKenzie
Level 46, Tower One
International Towers Sydney
100 Barangaroo Avenue
Barangaroo NSW 2000
Telephone +61 2 9225 0200
Westpac Banking
Corporation
CountPlus Limited shares
are listed on the Australian
Securities Exchange
(ASX code: CUP)
PRINCIPAL REGISTERED
OFFICE IN AUSTRALIA
SHARE REGISTRY
INDEPENDENT AUDITOR
SOLICITORS
BANKER
STOCK EXCHANGE LISTING
WEBSITE ADDRESS
www.countplus.com.au
ABN
11 126 990 832
Corporate Directory
DIRECTORS
Ray Kellerman
Chairman
Alison Ledger
Independent Non-Executive Director
Andrew McGill
Independent Non-Executive Director
Carolyn Colley
Independent Non-Executive Director
Appointed 6 October 2020
Kate Hill
Independent Non-Executive Director
Matthew Rowe
Managing Director and Chief Executive Officer
34
COUNTPLUS ANNUAL REPORT 2021
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 30 June 2021
Revenue from contracts with customers
Other income
Interest income
Gain on bargain purchase
Expenses
Salaries and employee benefits expense
Depreciation expense
Premises expenses
Acquisition related expenses
Amortisation expense
Share based payment expense
Reversal of impairment / (impairment) of receivables
Finance costs
Other operating expenses
Total expenses
Share of net profits of associates accounted for using equity method
Profit before income tax expense
Income tax expense
Profit after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Profit for the year is attributable to:
Owners of CountPlus Limited
Non-controlling interest
Total comprehensive income for the year is attributable to:
Owners of CountPlus Limited
Non-controlling interest
Basic earnings per share
Diluted earnings per share
Note
5
6
7
19
11
8
20
9
31
44
44
2021
$’000
80,521
3,530
53
–
(53,362)
(4,133)
(1,748)
(334)
(1,377)
(187)
422
(1,059)
(15,261)
(77,039)
2,498
9,563
(2,479)
7,084
(23)
7,061
4,938
2,146
7,084
4,915
2,146
7,061
Cents
4.43
4.39
2020
$’000
82,607
2,141
163
10,952
(52,748)
(3,964)
(1,621)
(427)
(1,402)
(115)
(528)
(1,108)
(16,664)
(78,577)
2,179
19,465
(2,017)
17,448
(10)
17,438
15,861
1,587
17,448
15,851
1,587
17,438
Cents
14.30
14.24
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.
35
COUNTPLUS ANNUAL REPORT 2021 Consolidated Statement of Financial Position
As at 30 June 2021
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Loans and advances
Indemnity asset
Assets of disposal groups classified as held for sale
Total current assets
Non-current assets
Trade and other receivables
Contract assets
Investments in associates
Property, plant and equipment
Right-of-use assets
Intangible assets
Deferred taxation
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Interest bearing loans and borrowings
Lease liabilities
Current tax liabilities
Provisions
Remediation provision
Other liabilities
Total current liabilities
Non-current liabilities
Trade and other payables
Contract liabilities
Interest bearing loans and borrowings
Lease liabilities
Deferred taxation
Provisions
Other liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
Capital and reserves attributable to the owners of CountPlus Limited
Non-controlling interest
Total equity
Note
2021
$’000
2020
$’000
10
11
12
13
15
16
11
12
20
17
18
19
14
21
22
23
24
14
26
27
25
21
22
23
24
14
26
25
28
29
30
31
26,239
19,514
12,926
236
259,810
318,725
2,726
321,451
490
21,839
18,236
4,006
13,103
36,514
1,024
95,212
25,842
19,711
14,730
424
195,000
255,707
–
255,707
245
25,673
17,629
4,078
13,950
36,741
–
98,316
416,663
354,023
14,201
10,332
2,610
3,439
1,403
6,797
259,827
1,116
299,725
–
20,668
1,718
10,994
–
966
770
35,116
334,841
81,822
123,153
(47,767)
(4,217)
71,169
10,653
81,822
13,633
12,925
3,359
3,321
1,278
6,002
195,030
925
236,473
40
24,158
1,372
12,041
215
1,010
602
39,438
275,911
78,112
123,065
(47,913)
(6,435)
68,717
9,395
78,112
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
36
COUNTPLUS ANNUAL REPORT 2021
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2021
Issued
Capital
$’000
Treasury
Shares*
$’000
Share Based
Payment
Reserve
$’000
Acquisition
Reserve
$’000
Foreign Currency
Translation
Reserve
$'000
Accumulated
Losses
$’000
Non-controlling
interests (NCI)
$’000
Total
Equity
$’000
Total
$’000
Balance at 1 July 2020
126,566
(3,501)
645
(48,548)
Profit after income tax expense
for the year
Other comprehensive income
for the year, net of tax
Total comprehensive income
for the year
Transactions with owners
in their capacity as owners
Transactions with non-controlling
interests (NCI)
Share based payments for
long term incentives (LTI)
Transfer of treasury shares
Reallocation of employee
share reserve
Dividends paid (note 32)**
–
–
–
–
–
–
–
–
–
–
–
–
–
88
–
–
–
–
–
–
187
(41)
23
–
–
–
–
–
–
–
–
–
(10)
–
(23)
(23)
–
–
–
–
–
(6,435)
68,717
4,938
4,938
9,395
78,112
2,146
7,084
–
(23)
–
(23)
4,938
4,915
2,146
7,061
116
116
874
990
–
187
(47)
–
–
23
–
–
–
187
–
23
(2,789)
(2,789)
(1,762)
(4,551)
Balance at 30 June 2021
126,566
(3,413)
814
(48,548)
(33)
(4,217) 71,169
10,653 81,822
Issued
Capital
$’000
Treasury
Shares*
$’000
Share Based
Payment
Reserve
$’000
Acquisition
Reserve
$’000
Foreign Currency
Translation
Reserve
$'000
Accumulated
Losses
$’000
Non-controlling
interests (NCI)
$’000
Total
Equity
$’000
Total
$’000
Balance at 1 July 2019
126,566
(4,983)
1,486
(48,548)
Profit after income tax expense
for the year
Other comprehensive income
for the year, net of tax
Total comprehensive income
for the year
Transactions with owners
in their capacity as owners
Transactions with non-controlling
interests (NCI)
Share based payments for
long term incentives (LTI)
Transfer of treasury shares
Reallocation of employee
share reserve
Dividends paid (note 32)**
–
–
–
–
–
–
–
–
–
–
–
–
–
1,482
–
–
–
–
–
–
115
(376)
(580)
–
–
–
–
–
–
–
–
–
–
–
(20,487)
54,034
15,861
15,861
6,232 60,266
1,587
17,448
(10)
–
(10)
–
(10)
(10)
15,861 15,851
1,587 17,438
–
–
–
–
–
117
–
–
580
117
115
1,106
–
2,365
2,482
–
–
–
115
1,106
–
(2,506)
(2,506)
(789)
(3,295)
Balance at 30 June 2020
126,566
(3,501)
645
(48,548)
(10)
(6,435) 68,717
9,395 78,112
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
*
The Company has formed a trust to administer a Loan Funded Share Plan. Shares held by the trust are disclosed as Treasury Shares and
deducted from contributed equity.
** This amount includes the dividends applied to the Loan Funded Share Plan.
37
COUNTPLUS ANNUAL REPORT 2021 Consolidated Statement of Cash Flows
For the Year Ended 30 June 2021
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Government grants received
Interest received
Interest and other finance costs paid
Income taxes paid
Net cash from operating activities
Cash flows from investing activities
Payment for acquisition of associates
Payment for completion adjustment of acquisition of subsidiary
Cash acquired from acquisition of subsidiary, net of cash paid
Purchase of shares under Owner, Driver – Partner model
Proceeds from payment adjustment – associates
Purchase of business assets
Purchase of equipment and other non-current assets
Proceeds from sales under the Owner, Driver – Partner model
Proceeds received in advance for sales under Owner, Driver – Partner model
Proceeds from sale of property, plant and equipment and business units
Proceeds from sale of business assets
Dividends / distributions received from associates
Payment for deferred consideration on acquisition of controlled entities and associates
Net cash (used in) / from investing activities
Cash flows from financing activities
Proceeds from borrowings
Proceeds from Loan Funded Share Plan
Repayment of lease liability
Dividends paid
Repayment of borrowings
Payment of dividends by controlled subsidiaries to non-controlling interests
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
Note
43
20
17
25
32
10
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
2021
$’000
146,365
(134,268)
2,389
14,486
37
(1,062)
(3,865)
9,596
–
–
–
(220)
69
(2,798)
(1,442)
979
–
–
449
1,821
(464)
(1,606)
963
–
(3,005)
(2,789)
(1,000)
(1,762)
(7,593)
397
25,842
26,239
2020
$’000
151,237
(137,759)
1,549
15,027
143
(1,108)
(1,625)
12,437
(2,988)
(24,286)
32,699
(128)
–
(819)
(1,785)
357
452
13
–
1,596
(206)
4,905
3,741
1,104
(2,923)
(2,506)
(385)
(789)
(1,758)
15,584
10,258
25,842
38
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
1
General information
CountPlus Limited (‘the Company’) is a listed public company limited by shares, incorporated and domiciled in Australia, whose shares
are publicly traded on the Australian Securities Exchange ('ASX'). The consolidated financial report for the year ended 30 June 2021 (‘the
financial report’) comprises the parent and its controlled entities (‘the Group’). CountPlus Limited is the ultimate parent entity in the Group.
The Group's core business is to collaborate with leading accounting and advice firms for the long term success of the clients, people and
shareholders by the way of shared values, mutual success and sense of community.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 26 August 2021.
2
Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been
consistently applied to all the years presented, unless otherwise stated. The financial statements are for the Group / Consolidated entity
consisting of CountPlus Limited and its subsidiaries.
Basis of preparation
These consolidated general-purpose financial statements have been prepared in accordance with Australian Accounting Standards,
Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the
Corporations Act 2001. CountPlus Limited is a for-profit entity for the purpose of preparing the financial statements.
Both the functional and presentation currency of CountPlus Limited and its subsidiaries is Australian dollars (A$) and the financial
report is presented in Australian dollars (A$). In accordance with ASIC Corporations (Rounding in Financial / Directors' Reports)
Instrument 2016 / 191, amounts in the financial report are rounded off to the nearest thousand dollars unless otherwise indicated.
Compliance with IFRS
These consolidated financial statements of the Group also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board (IASB).
Critical accounting estimates and judgements
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise
its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgment or complexity,
or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 3.
Historical cost convention
The Consolidated financial statements have been prepared on an accrual basis and are based on historical costs modified by the revaluation
of certain financial assets and financial liabilities for which the fair value basis of accounting has been applied.
Changes to presentation
Wherever necessary, CountPlus Limited has regrouped and reclassified certain balances in the financial statements in order to provide more
relevant information to our stakeholders. The comparative information has been reclassified accordingly. These reclassifications do not have
any impact on the profit for the current year or prior year.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only. Supplementary information
about the parent entity is disclosed in note 46.
Going concern
The consolidated financial statements have been prepared on a going concern basis, which contemplates the continuity of normal
operations and the realisation of assets and discharges of liabilities in the ordinary course of business.
39
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
New or amended Accounting Standards and Interpretations adopted
The group has applied the following standards and amendments for the first time for their annual reporting period commencing
1 July 2020:
Î AASB 2018–7 Amendments to Australian Accounting Standards – Definition of Material [AASB 101 and AASB 108]
Î AASB 2018–6 Amendments to Australian Accounting Standards – Definition of a Business [AASB 3]
Î AASB 2019–3 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform [AASB 9, AASB 139 and AASB 7]
Î AASB 2019–5 Amendments to Australian Accounting Standards – Disclosure of the Effect of New IFRS Standards Not Yet issued
in Australia [AASB 1054]
Î Conceptual Framework for Financial Reporting and AASB 2019–1 Amendments to Australian Accounting Standards – References
to the Conceptual Framework.
Î AASB 2020–3 Amendments to Australian Accounting Standards – Annual Improvements 2018-2020 and Other Amendments [AASB 1,
AASB 3, AASB 9, AASB 116, AASB 137 and AASB 141]
Î AASB 2020–4 Amendments to Australian Accounting Standards – COVID-19 Related Rent Concessions [AASB 16]
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance
or position of the Group.
Accounting standards and interpretations issued but not yet effective
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2021 reporting period
and have not been early adopted by the Group. These standards are not expected to have a material impact on the entity in the current
or future reporting periods and on foreseeable future transactions.
Î AASB 2019-3 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform – Phase 2 [AASB 9, AASB 139 and AASB 7]
Principles of consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of CountPlus Limited and its subsidiaries as at 30 June 2021 and
the results of CountPlus Limited and its subsidiaries for the year then ended. CountPlus Limited and its subsidiaries together are referred
to in these financial statements as (‘the Group’).
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights
to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities
of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from
the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated. Unrealised losses
are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries
have been changed where necessary to ensure consistency with the policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the
loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value
of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the Statement of Profit or Loss and Other
Comprehensive Income, Statement of Financial Position and Statement of Changes in Equity of the Group.
Investments in subsidiaries are accounted for at cost in the financial statements of CountPlus Limited less any impairment charges.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest
in the subsidiary together with any cumulative translation differences recognised in equity. The Group recognises the fair value of the
consideration received and the fair value of any investment retained together with any gain or loss in profit or loss.
40
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Associates
Associates are all entities over which the Group has significant influence but not control or joint control, generally accompanying a
shareholding of between 20% and 50% of the voting rights. Significant influence is the power to participate in the financial and operating
policy decisions of the investee but is not control or joint control over those policies.
Investments in associates are accounted for using the equity method of accounting, after initially being recognised at cost.
The Group's share of its associates' post acquisition profits or losses is recognised in profit or loss and its share of post-acquisition other
comprehensive income, is recognised in other comprehensive income. The cumulative post acquisition movements are adjusted against
the carrying amount of the investment. Dividends from associates are recognised as reduction in the carrying amount of the investment.
When the Group's share of losses in an associate equal or exceeds its interest in the associate, including any other unsecured long term
receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.
Employee share trust
The Group has formed a trust to administer the Group's Loan Funded Share Plan. This trust is consolidated as the substance of the
relationship is that the trust is controlled by the Group.
Shares held by the trust are disclosed as Treasury Shares and are deducted from contributed equity.
Foreign currency translation
The financial statements are presented in Australian dollars, which is CountPlus Limited's functional and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The
revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which approximate
the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in other comprehensive
income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Financial Instruments
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial
instrument, and are measured initially at fair value adjusted by transactions costs, except for those carried at fair value through profit
or loss, which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities are described below.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and
all substantial risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Classification and subsequent measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price
in accordance with AASB 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable).
For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging instruments are
classified into the following categories upon initial recognition:
Î
Î
amortised cost; or
fair value through profit or loss (FVPL).
All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs, finance income
or other financial items, except for impairment of trade receivables which is presented within other expenses.
Classifications are determined by both:
Î
Î
the entities business model for managing the financial asset; and
the contractual cash flow characteristics of the financial assets.
41
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as FVPL):
Î
Î
they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows; and
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal
amount outstanding.
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the
effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and most other receivables fall into this category
of financial instruments.
Financial assets at fair value through profit or loss (FVPL)
Financial assets that are held within a different business model other than ‘hold to collect’ or ‘hold to collect and sell’ are categorised at fair
value through profit and loss. Further, irrespective of business model financial assets whose contractual cash flows are not solely payments
of principal and interest are accounted for at FVPL.
Impairment of financial assets
AASB 9’s impairment requirements use more forward looking information to recognise expected credit losses – the ‘expected credit losses
model’. Instruments within the scope of the new requirements included loans and other debt-type financial assets measured at amortised
cost and fair value through other comprehensive income (FVOCI), trade receivables, contract assets recognised and measured under AASB
15 and loan commitments and some financial guarantee contracts (for the issuer) that are not measured at fair value through profit or loss.
The Group considers a broader range of information when assessing credit risk and measuring expected credit losses, including past events,
current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.
In applying this forward-looking approach, a distinction is made between:
Î
Î
financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low credit risk (‘Stage 1’);
and
financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is not low (‘Stage 2’).
‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date.
‘12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are recognised for the second
category.
Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the expected life of the
financial instrument.
Trade and other receivables and contract assets
The Group makes use of a simplified approach in accounting for trade and other receivables as well as contract assets and records the loss
allowance at the amount equal to the expected lifetime credit losses. In using this practical expedient, the Company uses its historical
experience, external indicators and forward-looking information to calculate the expected credit losses using a provision matrix.
The Group assesses impairment of trade receivables on a collective basis as they possess credit risk characteristics based on the days past due.
Classification and measurement of financial liabilities
The Group's financial liabilities include borrowings, trade and other payables, contract liabilities and other liabilities. Financial liabilities
are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Company designated a financial liability
at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for financial liabilities
designated at FVPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss.
All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are included within
finance costs or finance income.
42
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Group's normal operating
cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is
cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.
All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held primarily for
the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the
settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Non-current assets or disposal groups classified as held for sale
Non-current assets and assets of disposal groups are classified as held for sale if their carrying amount will be recovered principally through
a sale transaction rather than through continued use. They are measured at the lower of their carrying amount and fair value less costs of
disposal. For non-current assets or assets of disposal groups to be classified as held for sale, they must be available for immediate sale in their
present condition and their sale must be highly probable.
An impairment loss is recognised for any initial or subsequent write down of the non-current assets and assets of disposal groups to fair
value less costs of disposal. A gain is recognised for any subsequent increases in fair value less costs of disposal of a non-current assets and
assets of disposal groups, but not in excess of any cumulative impairment loss previously recognised.
Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable
to the liabilities of assets held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of disposal groups classified as held for sale are presented separately on the face
of the statement of financial position, in current assets. The liabilities of disposal groups classified as held for sale are presented separately
on the face of the statement of financial position, in current liabilities.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the
initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of
any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs
expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset,
whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of the lease term, the depreciation
is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12 months
or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the lease
payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group's incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable,
variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price
of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable
lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a
change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty
of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of-
use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave, long service leave and accumulating sick leave expected
to be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are
settled. Non-accumulating sick leave is expensed to profit or loss when incurred.
43
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Dividends
Dividends are recognised when declared during the financial year.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the
tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from,
or payable to, the tax authority is included in other receivables or other payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are
recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
Rounding of amounts
The Group is of a kind referred to in Corporations Instrument 2016 /191, issued by the Australian Securities and Investments Commission,
relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest
thousand dollars, or in certain cases, the nearest dollar.
Comparatives
The significant accounting policies adopted in the preparation of the financial statements have been consistently applied to the current
year and the comparative period, unless otherwise stated. Where necessary, comparative information has been reclassified to be consistent
with current period disclosures.
3
Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported
amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities,
contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and
on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The
resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes)
within the next financial year are discussed below.
Impairment
At each reporting date, the Group reviews the recoverable amount of its tangible and intangible assets to determine whether there is any
indication that these assets may be impaired. If such an indication exists, the recoverable amount of the asset, assessed as the higher of its
fair value less costs to sell and its value in use, is compared to its current carrying amount. Any excess of the asset’s carrying value over its
recoverable amount is expensed in the statement of profit or loss and other comprehensive income.
The Group determines whether goodwill is impaired at least on an annual basis. This requires estimation of the recoverable amount of the
CGU by determining the value in use of each individual CGU.
The following key assumptions are used in determining the value in use calculation for each CGU:
Î Revenue growth;
Î Employment expense ratio;
Î EBITA margin;
Î Discount rates; and
Î
Long term growth rate (terminal rate).
Acquired client relationships are tested for impairment whenever there is an indication that the intangible asset may be impaired. This
assessment is made at least on an annual basis. The net carrying value is compared with the expected future benefits from the relationships
for each cash generating unit. If the carrying value of the relationships is higher than the expected future benefits an impairment loss is
recorded for the difference.
44
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Allowance for expected credit losses of receivables
Where receivables are outstanding beyond the normal trading terms, the recovery likelihood of these receivables is assessed and reviewed
by management. Outstanding debts that are deemed to be uncollectable are written off when identified. Historical experience and
information of the Group's client base are considered when determining the allowance for expected credit losses.
The allowance for expected credit loss of receivables includes assumptions about risk of default and expected loss rates; management
judgment is applied in determining these rates.
Allowance for expected credit losses of contract assets
The recoverability of contract assets are assessed and reviewed by management on a regular basis. Any amounts in excess of net recoverable
value are written off when identified. Historical experience and information of the Group’s client base are considered when determining the
allowance for expected credit losses.
Remediation provision
The key accounting judgments and estimates used in calculating the remediation provision include the value of ongoing service fees
charged, the number of years in which issues have occurred, the refund rate, the interest calculation methodology and the value below
which fee refunds will be made without investigation. The key assumptions reflected in the remediation provision are subject to a high
degree of uncertainty. The key assumptions will become clearer over time as the remediation program obtains greater insight into the
actual quantum of the issues identified.
The value of ongoing service fees charged has been estimated using Count Financial’s books and records and the books and records of third
party product providers where relevant; the population of impacted customers is subject to some uncertainty and is yet to be finalised.
The refund rate has been estimated by reference to testing conducted on a small sample of client cases. The refund rate is subject to change
as actual refund rate data (incurred by Count Financial) becomes available.
The interest calculation methodology that has been applied is based on a rate equivalent to the RBA cash rate plus 6% compounded
monthly. This methodology is subject to change.
Some customers may be remediated without investigation where the combined value of the refund and the interest is below a certain
amount, however this is dependent on the availability of underlying customer records. This is subject to change.
Contingent consideration
Some acquisitions involve the payment of contingent consideration to vendors. This consideration is determined based on a multiple of
actual earnings over a fixed period and is dependent on revenue or client retention. Consideration payable to the vendors in relation to
acquisitions is recognised at fair value based on expected financial performance over the applicable future financial years. The component
of contingent consideration not expected to be settled within 12 months after the end of the reporting period is measured as the present
value of expected future payments to be made in respect of this contingent consideration, using a risk adjusted discount rate.
Lease make good provision
A provision has been made for the present value of anticipated costs for future restoration of leased premises. The provision includes future
cost estimates associated with closure of the premises. The calculation of this provision requires assumptions such as application of closure
dates and cost estimates. The provision recognised for each site is periodically reviewed and updated based on the facts and circumstances
available at the time. Changes to the estimated future costs for sites are recognised in the statement of financial position by adjusting the
asset and the provision. Reductions in the provision that exceed the carrying amount of the asset will be recognised in profit or loss.
Deferred taxes
The Consolidated entity is subject to taxes in Australia. The application of tax law to the specific circumstances and transactions of the
Consolidated entity requires the exercise of judgement by management. The tax treatments adopted by management in preparing the
financial statements may be impacted by changes in legislation and interpretations or be subject to challenge by tax authorities.
Deferred tax assets are recognised for deductible temporary differences only if the Group considers it is probable that future taxable
amounts will be available to utilise those temporary differences and losses.
In addition, CountPlus has recognised a deferred tax asset on tax capital losses. CountPlus plans to continue with the successful Owner,
Driver – Partner model which is expected to result in transactions with core firms over the next two to three years. A consequence of these
transactions is likely to create taxable capital gains. The envisaged structure of most of the transactions, being share sale transactions,
are subject to predefined financial hurdles being met by firms. Both the structure of the transactions and the potential increase in value
in the firms are likely to give rise to taxable capital gains which the Group has concluded will result in the deferred tax assets being utilised
in the foreseeable future.
45
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
AASB 16 Leases
Lease term
Where lease arrangements contain options to extend the term or terminate the contract, the Group assesses whether it is ‘reasonably
certain’ that the option to extend or terminate the contract will be made. Consideration is given to the prevalence of other contractual
arrangements and or the economic circumstances relevant to the lease contract, that may indicate the likelihood of the option being
exercised. Lease liabilities and right-of-use assets are measured using the reasonably certain contract term.
Lease discount rates
The discount rate applicable to a lease arrangement is determined at the inception of the contract or when certain modifications are made
to the contract. The discount rate applied is the rate implicit in the arrangement, or if unknown, the Group’s incremental borrowing rate.
The incremental borrowing rate is determined with reference to the Group’s borrowing portfolio at the inception of the arrangement or the
time of the modification and the amount and nature of the lease arrangement. If the arrangement relates to a specialised asset, incremental
project financing assumptions are considered.
Contract asset – ongoing insurance trail commissions receivable
The key assumptions underlying the ongoing insurance trail commission asset include the remaining life of the product and the likely
run off of products over time. It has been assumed that the insurance policies have a remaining life of five years and that 20% of policies
are cancelled at the end of each year. These assumptions are subject to change depending on the actual experience of the insurance
arrangements over time.
Contract liability – ongoing insurance trail commission payable
The key assumptions underlying the ongoing insurance trail commission liability are the remaining life of the insurance products, the likely
run off of products over time and the adviser payout ratio.
It has been estimated that the insurance policies have a remaining life of five years and that 20% of policies are cancelled at the end of each
year. These assumptions are subject to change depending on the actual experience of the insurance arrangements over time.
In respect of the adviser payout ratio, it has been estimated that 93.5% (2020: 93%) of ongoing insurance trail commission is paid to aligned
advisers. This is subject to change if Count Financial’s adviser pricing changes or if the average payout ratio changes across the portfolio; this
may occur given the tiered pricing model applicable to aligned advisers.
4 Operating segments
Identification of reportable operating segments
The consolidated entity is organised into four operating segments. These operating segments are based on the internal reports that are
reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance
and in determining the allocation of resources. There is no aggregation of operating segments.
Î Accounting
which comprises the provision of accounting, audit and assurance, taxation, and business and corporate
advisory services.
Î Financial planning
which comprises of financial planning services offered by member firms.
Î Financial services
which comprises of financial planning services provided by Australian Financial Services licence (AFSL) holders.
Î Other
which mainly comprises of information technology related revenue, legal related revenue, conference and
insurance related revenue.
The CODM reviews contribution margin (revenue less salaries and superannuation) to assess the performance of the operating segments.
The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the financial statements.
No segment assets and liabilities are disclosed because there is no measure of segment assets and liabilities regularly reported to the CODM.
The information reported to the CODM is on a monthly basis.
46
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Operating segment information
2021
Revenue ($'000)
Segment contribution ($'000)
Segment contribution margin %
2020
Revenue ($'000)
Segment contribution ($'000)
Segment contribution margin %
Accounting
Financial
planning
Financial
services
52,681
24,967
47%
11,379
4,871
43%
8,725
3,654
42%
Accounting
Financial
planning
Financial
services
51,975
24,012
46%
11,779
5,742
49%
12,515
7,739
62%
Reconciliation of segment contribution margin to profit from operations before income tax.
Total contribution margin
Other income and interest income
Share of net profit of associates
Gain on bargain purchase
Amortisation and depreciation expense
Finance costs
Premises expenses
Other costs
Profit from operations before income tax
Other
7,736
2,513
32%
Other
6,338
55
1%
2021
$’000
36,005
3,583
2,498
–
(5,510)
(1,059)
(1,748)
(24,206)
9,563
Total
80,521
36,005
45%
Total
82,607
37,548
45%
2020
$’000
37,548
2,304
2,179
10,952
(5,366)
(1,108)
(1,621)
(25,423)
19,465
The segment revenue described above represents revenue generated from external customers.
Other costs include $13,086,000 (2020: $12,674,000) of salaries and employee benefit expense that are not included in contribution margin.
5
Revenue from contracts with customers
Accounting services revenue
Financial planning revenue
Financial services revenue
Other operating revenue
Revenue from contracts with customers
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Timing of revenue recognition
Transferred at a point in time
Transferred over time
2021
$’000
52,681
11,379
8,725
7,736
80,521
2021
$’000
20,104
60,417
80,521
2020
$’000
51,975
11,779
12,515
6,338
82,607
2020
$’000
30,632
51,975
82,607
47
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Accounting services revenue
Accounting services revenue includes fees generated by CountPlus firms from services provided to clients.
Financial planning revenue
Financial planning revenue includes commissions and fees generated by CountPlus firms from financial advice services provided to clients.
Financial services revenue
Financial services revenue includes revenue generated from services performed by authorised representatives of Count Financial and
Total Financial Solutions Australia Limited (TFS) (both Australian Financial Services Licence holders) and product margin rebates that are
paid by product providers to TFS and Count Financial. Count Financial and TFS are considered to be acting as agent under the requirements
of AASB 15 Revenue from Contracts with Customers. Fees, commissions and related costs are deducted from the gross number to obtain
the reported net revenue figure as disclosed in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.
Significant accounting policy
Revenue recognition
To determine whether to recognise revenue, the Group follows a five-step process:
1
2
Identifying the contract with a customer;
Identifying the performance obligations;
3 Determining the transaction price;
4 Allocating the transaction price to the performance obligations; and
5 Recognising revenue when / as performance obligation(s) are satisfied.
The Group often enters into transactions involving a range of the Group's products and services, for accounting and financial planning
services. In all cases, the total fee charged for an engagement is allocated amongst the various performance obligations based on their
relative stand-alone fees. The fee charged for an engagement excludes any amounts collected on behalf of third parties. Revenue is
recognised either at a point in time or over time, when (or as) the Group satisfies performance obligations by transferring the promised
services to its customers.
Performance obligations for accounting and financial planning revenue
The Group’s contracts comprise performance obligations around completing client deliverables in line with engagement letter terms
(based on the agreed billing method, standard of work and timeline). Under AASB 15, the Group must evaluate the separability of the
promised services based on whether they are ‘distinct’. A promised service is ‘distinct’ if both:
Î
Î
the customer benefits from the item either on its own or together with other readily available resources; and
it is ‘separately identifiable’ (i.e. the Group does not provide a significant service integrating, modifying or customising it).
Accounting services revenue
Accounting services revenue is recognised over a period of time. Accounting revenue from the provision of accounting services is recognised
on an accrual basis in the period in which the service is provided, based on time spent and performance obligations satisfied. Any amounts
unbilled at the end of the reporting period are presented in the Statement of Financial Position as contract assets. Recognition is in
accordance with the terms of the client services agreement or engagement letter, adjusted for any time that may not be recoverable with
reference to the professional hours incurred. Client engagement letter gives an enforceable right to payment for performance completed
to date, including a reasonable margin if the contract is terminated by the customer for reasons other than CountPlus' failure to perform
as promised.
Financial planning revenue
Financial planning revenue is recognised at a point in time. Financial planning revenue from the provision of financial planning services,
loan commission and leasing commission is recognised at a point in time in the period in which the service is provided.
Financial services revenue
Financial services revenue is measured at the fair value of the consideration received or receivable.
Financial services revenue is recognised when the amount of revenue can be reliably measured, it is probable that future economic benefits
will flow to the Group, and specific criteria have been met for each of the Group’s activities as described below.
(i)
Fee income – ongoing service fees
Service fees are received from end customers for ongoing advice services which are available to a client over a 12 month period. The
performance obligation is to provide advice services to the customer throughout the period, as well as the continuous administration and
maintenance of the end customers’ portfolios. Income is recognised on an annual basis in accordance with rates specified in agreements
with advisers and end customers. These fees are recognised and charged over the length of the service.
48
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
(ii)
Rebate income
Rebate income is an incentive bonus received from various product providers based on the achievement of new business written targets
outlined in an agreement. The frequency of settlement varies by counterparty. Income is recognised in accordance with these agreements.
These fees are recognised and charged when the related service is completed which is typically at the time of the transaction.
(iii)
Commission income
Commission income is received for the referral services which triggered a successful referral of a customer into a product where the
customer has renewed the product for a second / subsequent year.
The net present value of future trail commissions is recognised at the start of a contract when the performance obligation has been met,
typically when a customer is introduced to a new product.
For investment referral services, the Group is unable to forecast the trail commission revenue in line with the highly probable test in AASB 15.
Therefore trail commission revenue on investment referral balances are recognised when received or paid.
(iv)
Adviser fees
Adviser fees are received from financial advisers for financial advice licensee services which are provided on an ongoing basis. The performance
obligation is to provide advisers with an authority to trade, to provide training services and financial advice support. Income is recognised over
time in accordance with rates specified in agreements with advisers.
Interest revenue is recognised when there is control of the right to receive the interest payment.
Dividends received from associates are accounted for in accordance with the equity method of accounting. Other revenue is recognised when
the right to receive payment is established.
All revenue is stated net of the amount of goods and services tax (GST).
6 Other income
Gain on deferred consideration
Gain on disposal of intangible assets
Gain on lease variation
Other income
Government grants
Other income
Government grants
2021
$’000
355
396
110
280
2,389
3,530
2020
$’000
88
–
152
352
1,549
2,141
The Company received Jobkeeper payments from the Australian Government in support of businesses significantly affected by COVID-19.
Significant accounting policy
Government grants
Grants from the government are recognised at their fair value where there is reasonable assurance that the grant will be received and the
Group will comply with all attached conditions. Grants that compensate the Group for expenses incurred are recognised in other income in
the Consolidated Statement of Profit or Loss and other Comprehensive Income on a systematic basis in which the expenses are recognised.
7
Salaries and employee benefits expense
Wages, salaries and on-costs
Post-employment benefits expenses
Other employee benefit expenses
2021
$’000
44,437
3,862
5,063
53,362
2020
$’000
43,402
3,771
5,575
52,748
49
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
8 Other operating expenses
Audit fees
Legal fees
Accounting and other professional fees
Sales and marketing expenses
Administration expenses
Insurance expense
Technology expense
Net loss / (gain) on disposal of property, plant and equipment
Count Financial transition expenses
Other
9
Income tax expense
Income tax expense
Current tax
Deferred tax – origination and reversal of temporary differences
Over provision
Aggregate income tax expense
Deferred tax included in income tax expense comprises:
Decrease in deferred tax assets
Increase in deferred tax liabilities
Deferred tax – origination and reversal of temporary differences
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible / (taxable) in calculating taxable income:
Non-deductible depreciation and amortisation
Gain on deferred consideration
Gain on bargain purchase
Taxable capital gain on exit of tax consolidated group
Benefit on trail commission
Share of equity accounted investments
Taxable capital gain on sale of subsidiary
Non-deductible expenses
Non-taxable income
Taxable capital gain on sale of shares
Initial recognition of deferred tax asset on capital losses
Profit on disposal of parcel of fees
Taxable capital gain on disposal of fees
Sundry items
Over provision in prior years
Income tax expense
50
2021
$’000
437
381
760
1,108
2,260
3,396
6,156
26
–
737
2020
$’000
431
519
1,016
790
2,318
3,392
6,196
(5)
1,214
793
15,261
16,664
2021
$’000
3,530
(1,061)
10
2,479
(18,251)
17,190
(1,061)
9,563
2,869
17
(110)
–
7
(8)
(709)
178
199
(37)
93
–
(119)
80
9
2,469
10
2,479
2020
$’000
2,567
(603)
53
2,017
(4,179)
3,576
(603)
19,465
5,840
8
(27)
(3,286)
–
(22)
(632)
–
207
(76)
10
(2)
(20)
–
(36)
1,964
53
2,017
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
AASB Interpretation 23 Uncertainty over Income Tax Treatments (Interpretation 23)
Interpretation 23 clarifies the application of the recognition and measurement criteria in AASB 12 Income taxes where there is uncertainty
over income tax treatments. It requires an assessment of each uncertain tax position to determine whether it is probable that a taxation
authority will accept the position. Where it is not considered probable, the effect of the uncertainty will be reflected in determining
the relevant taxable profit or loss, tax bases, unused tax credits or tax rates. The amount will be determined as either the single most
likely amount or the sum of the probability weighted amounts in a range of possible outcomes, whichever better predicts the resolution
of the uncertainty.
Significant accounting policy
Income tax
The income tax expense or benefit for the period is the tax payable on that period’s taxable income based on the applicable income
tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused
tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are
recovered, or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
Î when the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction that
is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or
Î when the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of the
reversal can be controlled, and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable
amounts will be available to utilise those temporary differences and losses.
Tax consolidation legislation
The parent and its 100% owned Australian subsidiaries formed an income tax consolidation group with effect from 5 November 2010.
Subsidiaries joined the tax consolidation group from the date they became wholly owned. They would exit the tax consolidation group
once they are less than 100% owned. The parent and the controlled entities in the tax consolidated group account for their own current
and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a stand-alone
taxpayer.
Members of the CountPlus tax consolidation group entered into a tax sharing and funding agreement. Under the terms of this agreement,
each member in the tax consolidation group agreed to make a tax equivalent payment to the parent based on their current tax liability or
current tax asset. Deferred taxes are recorded by members of the tax consolidation group in accordance with the principles of AASB 112
Income Taxes.
10 Cash and cash equivalents
Current assets
Cash at bank
Reconciliation to cash and cash equivalents at the end of the financial year
The above figures are reconciled to cash and cash equivalents at the end of the financial
year as shown in the statement of cash flows as follows:
2021
$’000
2020
$’000
26,239
25,842
Balance as per statement of cash flows
26,239
25,842
Risk exposure
The Group's exposure to interest rate risk is discussed in note 34. The maximum exposure to credit risk at the end of each reporting period is
the carrying amount of cash and cash equivalents mentioned above.
Significant accounting policy
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits held at call with banks, other short term highly liquid investments with
original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the
Consolidated Statement of Financial Position.
51
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
11 Trade and other receivables
Current assets
Trade receivables
Less: Allowance for expected credit losses
Other receivables
Prepayments
Rebates and adviser revenue receivable
2021
$’000
8,992
(247)
8,745
789
3,065
6,915
10,769
19,514
2020
$’000
9,633
(558)
9,075
1,790
1,518
7,328
10,636
19,711
Non-current assets
Other receivables
490
245
Ageing analysis of trade receivables
As at 30 June, the ageing analysis of receivables is as follows and represents both current and overdue but not impaired receivables:
Current
0 to 3 months
3 to 6 months
Over 6 months
2021
$’000
6,248
1,114
996
634
8,992
2020
$’000
6,140
1,399
887
1,207
9,633
Trade receivables are non-interest bearing and are generally on 30-day terms. Allowance for expected losses is recognised when there is
objective evidence that a trade receivable is impaired and is based on the Group policies. These amounts have been included on the face of
the Statement of Profit or Loss and Other Comprehensive Income.
Allowance for expected credit losses
As at 30 June, the ageing of the allowance for expected credit losses is as follows:
Current
0 to 3 months overdue
3 to 6 months overdue
Over 6 months overdue
Movements in the allowance for expected credit losses are as follows:
Opening balance
Changes in allowance for expected credit losses
Receivables written off / (recovered) during the year as uncollectable
Closing balance
52
2021
$’000
15
2
85
145
247
2021
$’000
(558)
422
(111)
(247)
2020
$’000
3
3
151
401
558
2020
$’000
(570)
(528)
540
(558)
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
The creation and release of the allowance for expected credit losses has been included on the face of the Statement of Profit or Loss and
Other Comprehensive Income. Amounts charged to the allowance account are generally written off when there is no expectation of
recovery.
The maximum exposure to credit risk at reporting date is the carrying amount of each class of receivables mentioned above. Refer to note 34
for more information on the risk management policy of the Group.
Significant accounting policy
Trade receivables
Trade receivables are initially recognised at their fair value and subsequently measured at amortised cost using the effective interest
method, less allowance for expected losses.
Recoverability of trade receivables is reviewed on an ongoing basis. Trade receivable balances which are known to be uncollectable are
written off by reducing the carrying amount directly. An allowance for expected losses on trade receivables is raised by applying a rate
based on historic collection rates for overdue balances, which are reassessed each year, and adjusted specific debtors where management
is aware of specific conditions which affect the likely recovery of outstanding balances. The loss allowance is the amount equal to the
expected lifetime credit losses.
The allowance for expected losses of receivables is the difference between the asset’s carrying amount and the present value of estimated
future cash flows, discounted at the original effective interest rate if the impact of discounting is considered material.
Significant accounting judgements, estimates and assumptions
Allowance for expected losses of receivables
The allowance for expected losses of receivables assessment requires a degree of estimation and judgement. Where receivables are
outstanding beyond the normal trading terms, the recovery likelihood of these receivables is assessed and reviewed by management.
Outstanding debts that are deemed to be uncollectable are written off when identified. Historical experience and information of the
Group's client base are considered when determining the allowance for expected credit losses.
12 Contract assets
Current assets
Contract assets
Allowance for expected credit losses of contract assets
Ongoing insurance trail commission receivable
Loss allowance on trail commission receivable
Non-current assets
Ongoing insurance trail commission receivable
Loss allowance on trail commission receivable
2021
$’000
3,625
(209)
9,630
(120)
12,926
22,096
(257)
21,839
2020
$’000
3,983
(387)
11,273
(139)
14,730
25,976
(303)
25,673
Contract assets
Contract assets represents costs incurred and profit recognised on client assignments and services that are in progress and have not yet
been invoiced at reporting date. Contract assets are valued at net realisable value after providing for any expected credit losses. Contract
assets are recognised in the Statement of Financial Position and the movement recognised in the Statement of Profit or Loss and Other
Comprehensive Income.
Ongoing insurance trail commission receivable
Contract assets have been raised to reflect the recognition of ongoing insurance trail commissions receivable across various commission
arrangements. This reflects the upfront recognition of ongoing insurance commission income when a performance obligation has been
met, e.g. a new customer is introduced to a product.
The amount of ongoing insurance trail commission revenue and the associated expenses paid to aligned advisers is dependent on
assumptions about the term of the underlying insurance policies generating the commission. The Group has recognised the net present
value of expected future risk insurance trail commission income. Included in the recognition of the income are assumptions around the
remaining life of the product and the likely run off of products over time. Ongoing insurance trail commission income, present valued,
is only recognised to the extent that it is highly probable and on the basis that it is not expected to reverse in future periods.
53
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Ageing of contract assets
As at 30 June, the ageing of the contract assets is as follows:
Current
1 to 3 months
3 to 6 months
Over 6 months
Movement and ageing of allowance for expected credit losses
At 30 June, the movement in provision for allowance of expected credit losses is as follows:
At 1 July
Allowance for expected credit losses recognised in the year
At 30 June, the ageing of the allowance for expected credit losses is as follows:
Current
0 to 3 months
3 to 6 months
Over 6 months
2021
$’000
1,379
901
595
750
3,625
2021
$’000
(387)
178
(209)
2021
$’000
–
19
38
152
209
2020
$’000
1,742
1,040
676
525
3,983
2020
$’000
(171)
(216)
(387)
2020
$’000
–
35
70
282
387
The maximum exposure to credit risk at reporting date is the carrying amount of each class of asset mentioned above. Refer to note 34 for
more information on the risk management policy of the Group.
Movement in ongoing insurance trail commission receivable
$’000
–
24,590
20,728
(8,069)
37,249
6,537
(12,060)
31,726
Balance at 1 July 2019
Ongoing insurance trail commission receivable acquired
Amount recognised in revenue from contracts with customers
Receipt of ongoing insurance trail commission
Balance at 30 June 2020
Amount recognised in revenue from contracts with customers
Receipt of ongoing insurance trail commission
Balance at 30 June 2021
54
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Significant accounting judgements, estimates and assumptions
Allowance for expected credit losses
The recoverability of contract assets is assessed and reviewed by management on a regular basis. The allowance for expected credit losses
of contract assets assessment requires a degree of estimation and judgement. The level of expected credit losses is assessed by considering
the ageing of contract assets, historical billing and collection rates and specific knowledge of the individual customer’s financial position.
Ongoing insurance trail commissions
The key assumptions underlying the ongoing insurance trail commission asset include the remaining life of the product and the likely run off
of products over time. It has been assumed that the insurance policies have a remaining life of 5 years and that 20% of policies are cancelled at
the end of each year. These assumptions are subject to change depending on the actual experience of the insurance arrangements over time.
13 Loans and advances
Current assets
Loans and advances
2021
$’000
2020
$’000
236
424
Included in above loans and advances is an amount receivable from Count Member Firm Pty Ltd of $197,000 (2020: $395,000).
14 Tax assets and liabilities
Current tax assets and liabilities
Current tax payable
Deferred tax assets
The balance comprises temporary differences attributable to:
Bonus provision
Employee liabilities (annual leave and long service leave)
Allowance for expected credit losses – trade receivables
Professional fees
Make good
Accruals
Contract liability – accrued trail commission expense
Tax losses
Right-of-use asset
Depreciation
Remediation provision
Other
Total deferred tax assets
Set-off of deferred tax liabilities pursuant to set-off provisions
Net deferred tax assets
2021
$’000
(1,403)
2021
$’000
45
2,158
100
12
51
389
8,902
888
608
124
77,958
151
91,386
(90,362)
1,024
2020
$’000
(1,278)
2020
$’000
–
1,954
199
10
51
377
10,392
697
525
130
58,516
86
72,937
(72,937)
–
55
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Movements in deferred tax assets
At 1 July 2019
Charged to income tax expense
Charged directly to equity
Deferred tax balance on acquisition of subsidiary
Deferred tax balance on remediation provision
Decrease in tax losses
At 30 June 2020
At 1 July 2020
Charged to income tax expense
Deferred tax balance on acquisition of subsidiary
Increase in tax losses
Under provision in prior year
As at 30 June 2021
Deferred tax liabilities
The balance comprises temporary differences attributable to:
Work in progress
Prepaid expenses
Fair valued intangible assets
Accrued income
Contract asset – accrued trail commission income
Indemnity asset
Other
Total deferred tax liabilities
Set-off of deferred tax assets pursuant to set-off provisions
Net deferred tax liabilities
Movements in deferred tax liabilities
At 1 July 2019
Net deferred tax balance on acquisition of subsidiaries*
Deferred tax balance on indemnity asset
Charged to the income tax expense
At 30 June 2020
At 1 July 2020
Net deferred tax balance on acquisition of subsidiaries*
Charged to the income tax expense
Other adjustments
At 30 June 2021
* Includes business assets acquired by member firms.
56
$’000
3,013
4,178
438
6,861
58,500
(53)
72,937
72,937
18,251
14
191
(7)
91,386
2021
$’000
2020
$’000
1,025
8
1,970
2
9,405
77,941
11
90,362
(90,362)
–
Other
$’000
1,079
7,377
58,500
3,955
70,911
70,911
–
17,482
(1)
88,392
1,042
19
2,241
171
11,175
58,500
4
73,152
(72,937)
215
Total
$’000
2,463
8,613
58,500
3,576
73,152
73,152
21
17,190
(1)
90,362
Fair valued
intangible assets
$'000
1,384
1,236
–
(379)
2,241
2,241
21
(292)
–
1,970
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Significant accounting judgements, estimates and assumptions
Deferred taxes
The Group is subject to taxes in Australia. The application of tax law to the specific circumstances and transactions of the Consolidated entity
requires the exercise of judgement by management. The tax treatments adopted by management in preparing the financial statements may
be impacted by changes in legislation and interpretations or be subject to challenge by tax authorities.
Recognition of deferred tax assets on capital losses
CountPlus has recognised a deferred tax asset on tax capital losses. CountPlus plans to continue with the successful Owner, Driver – Partner
model which is expected to result in transactions with core firms over the next two to three years. A consequence of these transactions is
likely to create taxable capital gains. The envisaged structure of most of the transactions, being share sale transactions, are subject to pre-
defined financial hurdles being met by firms. Both the structure of the transactions and the potential increase in value in the firms are likely to
give rise to taxable capital gains which the Group has concluded will result in the deferred tax assets being utilised in the foreseeable future.
15
Indemnity asset
Current assets
Indemnity asset
Indemnity asset
2021
$’000
2020
$’000
259,810
195,000
Included in the Statement of Financial Position of Count Financial is a provision for remediation amounting to $259,810,000. A corresponding
indemnity asset has been recognised which represents an amount receivable pursuant to an indemnity deed granted by the Commonwealth
Bank of Australia. The provision is for ongoing service fees charged to clients where no service was provided and for other advice issues.
The provision relates to the period prior to the purchase of Count Financial by CountPlus.
The indemnity provided by Commonwealth Bank of Australia (CBA) relates directly to the remediation provision. The indemnity granted
by CBA upon acquisition was $200,000,000. The indemnity increased to $210,000,000 at 30 June 2020 and subsequently increased to
$300,000,000 at 30 July 2020. The indemnity at 30 June 2021 was $300,000,000. The indemnity is subject to renegotiation if some of the
underlying assumptions behind the provision are reassessed. Refer to note 27 for further information on the provision for remediation.
Recoveries of remediation amounts are expected to be assessable for tax purposes. Note that remediation payments are expected to be
deductible for tax purposes.
16 Assets of disposal groups classified as held for sale
In June 2021 the CountPlus Board of Directors approved the proposed sale of the Bentleys audit and corporate finance businesses.
Consequently all assets related to the sale were classified as a disposal group. Measurement of the disposal group's assets did not result
in any gain or loss. The sale does not result in a discontinued operation as CountPlus services audit clients across other subsidiaries.
The remaining Bentleys business and related operations remain with CountPlus.
The carrying amount of assets and liabilities in the disposal group are disclosed in the table below:
Goodwill
Acquired client relationship
Deferred tax liability
Property, plant and equipment
Total
$’000
1,826
937
(42)
5
2,726
57
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
17 Property, plant and equipment
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Balance at 1 July 2019
Additions
Disposals
Transfers in / (out)
Depreciation expense
Balance at 30 June 2020
Additions
Additions through business combinations
Disposals
Transfers in / (out)
Depreciation expense
Balance at 30 June 2021
At 30 June 2020
Cost
Accumulated depreciation
Net book value
At 30 June 2021
Cost
Accumulated depreciation
Net book value
Office
equipment
$’000
Furniture,
fixtures
and fittings
$’000
Leasehold
improvements
$’000
Other
property,
plant and
equipment
$’000
Motor
vehicles
$’000
1,363
490
(20)
(200)
(485)
1,148
455
52
(12)
(15)
(433)
1,195
842
150
(25)
(4)
(195)
768
106
48
(21)
(20)
(195)
686
1,140
1,023
(4)
202
(295)
2,066
406
–
–
–
(407)
2,065
309
2
–
(230)
(30)
51
1
–
(4)
10
(33)
25
43
21
(9)
–
(10)
45
–
–
–
–
(10)
35
Office
equipment
$’000
Furniture,
fixtures
and fittings
$’000
Leasehold
improvements
$’000
Other
property,
plant and
equipment
$’000
Motor
vehicle
$’000
4,002
(2,854)
1,148
3,962
(2,767)
1,195
2,915
(2,147)
768
2,871
(2,185)
686
3,014
(948)
2,066
3,420
(1,355)
2,065
942
(891)
51
387
(362)
25
69
(24)
45
69
(34)
35
Total
$’000
3,697
1,686
(58)
(232)
(1,015)
4,078
968
100
(37)
(25)
(1,078)
4,006
Total
$’000
10,942
(6,864)
4,078
10,709
(6,703)
4,006
58
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Significant accounting policy
Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation and any impairment loss. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs
and maintenance are charged to profit or loss during the reporting period in which they are incurred.
Depreciation is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated useful lives
or, in the case of leasehold improvements and certain leased plant and equipment, the shorter lease term, as follows:
Furniture, fixtures and fittings
Leasehold improvements
Î Office equipment
Î
Î
Î Make good
Î Motor vehicle
4% – 20%
8% – 37%
over the estimated life of the asset or shorter of the lease term
over the estimated life of the lease
20% – 25%
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
Gains and losses on disposals are determined by comparing proceeds with carrying amounts. These are included in profit or loss.
18 Right-of-use assets
The Group as a lessee
For any new contracts entered into on or after 1 July 2019, the Group considers whether a contract is, or contains a lease. A lease is defined
as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for
consideration’.
To apply this definition the Group assesses whether the contract meets three key criteria, which include:
Î
Î
Î
the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the
time the asset is made available to the Group;
the Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use,
considering its rights within the defined scope of the contract; and
the Group has the right to direct the use of the identified asset throughout the period of use. The Group assesses whether it has the right
to direct ‘how and for what purpose’ the asset is used throughout the period of use.
Measurement and recognition of leases as a lessee
At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the Statement of Financial Position.
The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred
by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance
of the lease commencement date (net of any incentives received).
The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the
useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such
indicators exist.
At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date,
discounted using the interest rate implicit in the lease if that rate is readily available or the Group's incremental borrowing rate.
Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable
payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options
reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect
any reassessment or modification, or if there are changes in in-substance fixed payments.
When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit or loss if the right-of-use
asset is already reduced to zero.
The Group has elected to account for short term leases and leases of low-value assets using the practical expedients. Instead of recognising
a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis
over the lease term.
59
COUNTPLUS ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Non-current assets
Premises – right-of-use
Less: Accumulated depreciation
Office equipment – right-of-use
Less: Accumulated depreciation
Others – right-of-use
Less: Accumulated depreciation
Balance at 30 June
Reconciliations
2021
$’000
24,345
(11,516)
12,829
709
(441)
268
15
(9)
6
2020
$’000
22,194
(8,607)
13,587
687
(338)
349
41
(27)
14
13,103
13,950
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Right-of-use assets
$’000
–
11,152
5,749
(2)
(2,949)
13,950
13,950
2,208
(3,055)
13,103
Total
$’000
–
11,152
5,749
(2)
(2,949)
13,950
13,950
2,208
(3,055)
13,103
At 1 July 2019
Adoption of AASB16
Additions
Disposals
Depreciation expense
At 30 June 2020
At 1 July 2020
Additions
Depreciation expense
At 30 June 2021
60
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
19
Intangible assets
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Acquired client
relationship /
Adviser networks
$’000
Goodwill
$’000
IT software
$’000
Brand
$’000
Other
intangible
assets
$’000
27,800
637
–
–
–
28,437
–
728
(1,826)
–
–
27,339
4,895
631
2,041
(5)
(1,275)
6,287
–
2,854
(937)
(120)
(1,164)
6,920
130
99
–
–
(43)
186
457
12
–
(27)
(110)
518
–
–
1,493
–
(45)
1,448
–
–
–
–
(60)
1,388
348
74
–
–
(39)
383
9
–
–
–
(43)
349
Total
$’000
33,173
1,441
3,534
(5)
(1,402)
36,741
466
3,594
(2,763)
(147)
(1,377)
36,514
Acquired client
relationship /
Adviser networks
$’000
Goodwill
$’000
IT software
$’000
Brand
$’000
Other
intangible
assets
$’000
Total
$’000
38,427
(9,990)
28,437
37,329
(9,990)
27,339
28,634
(22,347)
6,287
29,833
(22,913)
6,920
733
(547)
186
1,163
(645)
518
1,493
(45)
1,448
1,493
(105)
1,388
503
(120)
383
69,790
(33,049)
36,741
512
(163)
70,330
(33,816)
349
36,514
Balance at 1 July 2019
Additions
Additions through business combinations
Disposals
Amortisation expense
Balance at 30 June 2020
Additions
Additions through business combinations
Classified as held for sale
Disposals
Amortisation expense
Balance at 30 June 2021
At 30 June 2020
Cost
Accumulated amortisation and impairment
Net book value
At 30 June 2021
Cost
Accumulated amortisation and impairment
Net book value
Impairment tests for goodwill
Goodwill acquired through business combinations has been allocated to and is tested at the level of the respective cash generating units
(CGUs), for impairment testing.
For the purpose of impairment testing, fourteen of the seventeen member firms listed in note 41, are considered as separate CGUs, operating
largely independently from other businesses in the Group. All subsidiaries are separately identified in note 41.
The Group utilises a value in use calculation using cash flow projections from financial budgets approved by senior management covering
a five-year period to assess the recoverable amount of the CGUs. The member firm budget for FY22 is used as the basis for the five year
period; and year two to five is extrapolated at a 3% growth rate over the remainder of the five year budget period. A pre-tax discount rate
has been applied to cash flow projections and cash flows beyond the five-year period have been extrapolated using a growth rate of 2.5%.
This method is used to assess impairment for the individually significant CGUs. The same methodology of impairment testing is performed
across all CGUs.
61
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
For the purpose of annual impairment testing, goodwill is allocated to the following cash-generating units:
Significant cash generating units
CountPlus One Pty Ltd
The MBA Partnership Pty Ltd*
Kidmans Partners Pty Ltd
Unite Advisory Pty Ltd
Bentleys (WA) Pty Ltd**
Crosby Dalwood Pty Ltd
Moggs Accounting + Advisory Pty Ltd (formerly Mogg Osborne Pty Ltd)
Remaining cash-generating units
2021
$’000
4,759
5,639
4,245
3,502
–
1,782
2,229
5,183
2020
$’000
4,759
4,172
4,245
3,502
1,826
1,782
1,629
6,522
27,339
28,437
*
On 9 November 2020, The MBA Partnership acquired fellow subsidiary Specialised Business Solutions Pty Ltd from CountPlus Limited.
Goodwill attributable to Specialised Business Solutions has been allocated to The MBA Partnership Pty Ltd for the purpose of
impairment testing.
** Goodwill previously allocated to Bentleys has been transferred to the disposal group recognised in the Consolidated Statement
of Financial Position. Refer to note 16 for further information.
Key assumptions used for value in use calculations
The calculation of value in use for the CGUs was most sensitive to the following assumptions:
Î Revenue growth;
Î Employment expense ratios;
Î EBITA margin; and
Î Discount rates.
Revenue growth is based on the budget for the next financial year as well as management assessment over the forecast period. Budget
revenue for 2022 is based on management expectations and the average annual revenue growth thereafter is assumed to be maintained
at 3% p.a. over the remaining forecast period for all CGUs.
Employment expense ratios are based on the budget for the next financial year and management assessment over the forecast period.
Employment expense ratio shows the employment cost as a percentage of net revenue. This is assumed to be maintained between 59%
and 68% over the forecast period.
Discount rates represent the current market assessment of the risks specific to the Group, considering the time value of money and specific
risk of the underlying assets that have not been incorporated into the cash flow estimates. The discount rate is calculated using the weighted
average cost of capital (WACC) and reflects management’s estimation of the time value of money and specific risk estimated for the Group.
The WACC considers both debt and equity. The cost of equity is derived from the expected return on investment by the Group’s investors.
It incorporates a beta factor to reflect the specific risk associated with the industries in which the Group operates. The cost of debt is based
on the interest-bearing borrowings the Group is obliged to service.
It is assumed for the purpose of the analysis that the long term growth rate (terminal rate) will equate to the long term average growth rate
of the national economy. Management estimate this to be 2.5% p.a. which is in line with the long term expected Australian inflation rate.
The sensitivity analysis concluded that changing this rate to reflect possible lower growth projections would not materially impact the
valuations of the individual CGUs.
62
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Impairment of goodwill
At 30 June 2021 management performed impairment testing (including the impact of COVID-19) for each cash generating unit (CGU)
of CountPlus. Management calculated the recoverable amount of the CGUs in accordance with AASB 136 Impairment of Assets at
30 June 2021 using a pre-tax discount rate of 18.57% (13.00% post tax) (30 June 2020: 18.57% (13.00% post tax)) . No impairment losses
were identified at 30 June 2021.
For the below CGUs where an indication of impairment existed, management calculated the recoverable amount of these CGUs in
accordance with AASB 136 Impairment of Assets.
Key assumptions for this value in use calculation at 30 June 2021 were:
Î Revenue growth of 3%;
Î Employment expense ratio 59% – 68%; and
Î The long term growth rate (terminal rate) was estimated to be 2.5% p.a.
The recoverable amount of the above CGUs was determined based on value-in-use calculations, consistent with the methods used
in prior years.
Sensitivity to changes in assumptions
A cash-generating unit ('CGU') is the smallest group of assets that independently generates cash flow and whose cash flow is largely
independent of the cash flows generated by other assets. The concept is used by the International Financial Reporting Standards
in the determination of asset impairment.
Sensitivity has been tested for the following four CGUs based on management assessment that the assumptions in the value in use
calculation for these CGUs were most sensitive to change.
For CountPlus One Pty Ltd: The recoverable amount as determined by the value in use calculation exceeds the carrying value
by $1,088,000 or 20%.
Reasonably possible changes in assumptions may result in impairment as set out below:
Î Other things being equal, if the company’s yearly revenue is 5% less than expected over the forecast period, an impairment
of $869,000 would result.
Î Other things being equal, if the pre-tax discount rate is increased from 18.57% to 20.00%, the recoverable amount would exceed
the carrying amount by $550,000.
Î
Î
If the company’s employment cost margin (its single largest expense item) increases from 62% to 66% over the forecast period,
an impairment of $498,000 would result.
If the long term average growth rate decreases from 2.5% to 1% p.a., the recoverable amount would exceed the carrying amount
by $543,000.
For Crosby Dalwood Pty Ltd: The recoverable amount as determined by the value in use calculation exceeds the carrying value
by $1,293,000 or 75%.
Reasonably possible changes in assumptions will not result in impairment except the following:
Î Other things being equal, if the company’s yearly revenue is 5% less than expected over the forecast period, the recoverable amount
would exceed the carrying amount by $238,000.
Î Other things being equal, if the pre-tax discount rate is increased from 18.57% to 20.00%, the recoverable amount would exceed
the carrying amount by $1,040,000.
Î
Î
If the company’s employment cost margin (its single largest expense item) increases from 64% to 68% over the forecast period,
an impairment loss of $782,000 would result.
If the long term average growth rate decreases from 2.5% to 1% p.a., the recoverable amount would exceed the carrying amount
by $1,035,000.
63
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
For Addvantage Financial Freedom Pty Ltd: The recoverable amount as determined by the value in use calculation exceeds the
carrying value by $1,227,000 or 64%.
Reasonably possible changes in assumptions will not result in impairment except the following:
Î Other things being equal, if the company’s yearly revenue is 5% less than expected over the forecast period, the recoverable amount
would exceed the carrying amount by $107,000.
Î Other things being equal, if the pre-tax discount rate is increased from 18.57% to 20.00%, the recoverable amount would exceed
the carrying value by $1,011,000.
Î
Î
If the company’s employment cost margin (its single largest expense item) increases from 65% to 69% over the forecast period,
the recoverable amount would exceed the carrying value by $338,000.
If the long term average growth rate decreases from 2.5% to 1% p.a., the recoverable amount would exceed the carrying value
by $1,007,000.
For Unite Advisory Pty Ltd: The recoverable amount as determined by the value in use calculation exceeds the carrying value
by $1,847,000 or 46%.
Reasonably possible changes in assumptions may result in impairment as set out below:
Î Other things being equal, if the company’s yearly revenue is 5% less than expected over the forecast period, the recoverable amount
would exceed the carrying value by $306,000.
Î Other things being equal, if the pre-tax discount rate is increased from 18.57% to 20.00%, the recoverable amount would exceed the
carrying value by $1,358,000.
Î
Î
If the company’s employment cost margin (its single largest expense item) increases from 62% to 66% over the forecast period, the
recoverable amount would exceed the carrying value by $599,000.
If the long term average growth rate decreases from 2.5% to 1% p.a., the recoverable amount would exceed the carrying value by
$1,347,000.
For all CGUs: Across all CGUs over the forecast period, other things being equal, if revenue is 10% lower than expectations, an impairment
of $14,515,000 would result. Management believes that no other reasonable change in the key assumptions would cause the carrying
value to materially exceed its recoverable amount.
Amortisation period of intangible assets other than Goodwill
The amortisation period for the intangible assets are as follows:
Acquired client relationships
10 years
Adviser networks
Brands
Software
15 years
25 years
1 – 5 years
The factors that are considered in determining the useful life of an intangible asset are:
Î
Î
Î
Î
the expected usage of the asset by the entity and whether the asset could be managed efficiently by another management team;
typical product life cycles for the asset and public information on estimates of useful lives of similar assets that are used in a similar way;
technical, technological, commercial or other types of obsolescence;
the stability of the industry in which the asset operates and changes in the market demand for the products or services output from
the asset;
Î expected actions by competitors or potential competitors;
Î
Î
the level of maintenance expenditure required to obtain the expected future economic benefits from the asset and the entity’s ability
and intention to reach such a level;
the period of control over the asset and legal or similar limits on the use of the asset, such as the expiry dates of related leases; and
Î whether the useful life of the asset is dependent on the useful life of other assets of the entity.
64
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Significant accounting judgements, estimates and assumptions
Impairment of intangible assets
At each reporting date, the Group reviews the recoverable amount of its intangible assets to determine whether there is any indication
that these assets may be impaired. If such an indication exists, the recoverable amount of the asset, assessed as the higher of its fair value
less costs to sell and its value in use, is compared to its current carrying amount. Any excess of the asset’s carrying value over its recoverable
amount is expensed in the Statement of Profit or Loss and Other Comprehensive Income.
The Group determines whether goodwill is impaired at least on an annual basis. This requires estimation of the recoverable amount
of the CGU by determining the value in use of each individual CGU.
Acquired client relationships are tested for impairment whenever there is an indication that the intangible asset may be impaired.
This assessment is made at least on an annual basis. The net carrying value is compared with the expected future benefits from the
relationships for each cash generating unit. If the carrying value of the relationships is higher than the expected future benefits an
impairment loss is recorded for the difference.
At each reporting date if an impairment indicator exists, the Group makes a formal estimate of the asset's recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs to sell and its value in use. It is determined for an individual asset, unless
the asset’s value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely
independent of those from other assets or groups of assets, in which case, the recoverable amount is determined in aggregate for the cash
generating unit to which the asset belongs.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset.
Non-financial assets, other than goodwill that suffer an impairment, are tested for possible reversal of the impairment whenever events
or changes in circumstances indicate that the impairment may have reversed.
Goodwill
Goodwill acquired in a business combination is initially measured at cost of the business combination being the excess of the consideration
transferred over the fair value of the entity’s identified assets acquired and liabilities assumed. If this consideration transferred is lower than
the fair value of the net identified assets of the subsidiary acquired, the difference is recognised in the Statement of Profit or Loss and Other
Comprehensive Income.
Goodwill on consolidation is initially recorded at the amount by which the purchase price for a business combination exceeds the fair
value attributed to the interest in the net fair value of identifiable assets, liabilities and contingent liabilities acquired at date of acquisition.
Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is tested annually for impairment, is allocated to cash
generating units and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
IT software
Costs incurred in developing products or systems and costs incurred in acquiring software and licenses that will contribute to future period
financial benefits through revenue generation and / or cost reduction, are capitalised to software and systems. Costs capitalised include
external direct costs of materials and service and direct payroll and payroll related costs of employees' time spent on the project.
Amortisation is calculated on a straight-line basis over periods generally ranging from 3 to 5 years. IT software is tested for impairment
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised
in the Statement of Profit or Loss and Other Comprehensive Income for the amount by which the asset’s carrying amount exceeds its
recoverable amount.
65
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Acquired client relationships and Adviser networks
Acquired client relationships are intangible assets identified in the acquisition of businesses and represent that part of the purchase
consideration that is attributable to and represented by the clients and customers with long term relationships with the business being
acquired. These assets are capitalised at fair values at the date of acquisition. Acquired client relationships are amortised over their useful
life and tested for impairment at least annually and whenever there is an indication that the carrying value of the intangible asset may
be impaired. The useful life of these assets are 10 years and they are amortised and expensed using the straight-line method. This is in
accordance with the expected pattern of future benefits based on the net cash flows expected from those relationships. The amortisation
period and the amortisation method are reviewed at least annually as at 30 June to ensure the amortisation expense reflects the
performance of the intangible asset.
Adviser networks are the intangible assets identified in the acquisition of Count Financial and represent that part of the purchase
consideration that is attributable to and represented by the advisers with long term relationships with that business. These assets were
capitalised at fair value at the date of the acquisition, amortised over their useful life and tested for impairment at least annually and
whenever there is an indication that the carrying value of the intangible asset may be impaired. The useful life of these assets is 10 to 15 years
and are amortised and expensed using the straight-line method. This is in accordance with the expected pattern of future benefits based
on the net cash flows expected from those networks. The amortisation period and the amortisation method are reviewed at least annually
as at 30 June to ensure that the amortisation expense reflects the performance of the intangible asset.
Brands
Brands are recognised at fair value at acquisition. Following initial recognition, they are carried at cost less any accumulated amortisation
and accumulated impairment losses. They are amortised over 25 years on straight-line basis and assessed for impairment whenever events
or changes in circumstances indicate that the carrying amount may not be recoverable.
This is in accordance with the expected pattern of future benefits based on the net cash flows expected from those assets. The amortisation
period and the amortisation method are reviewed at least annually as at 30 June to ensure the amortisation expense reflects the performance
of the intangible asset.
Other intangible assets
Other intangible assets acquired are recognised at cost at acquisition. Following initial recognition, they are carried at cost less any
accumulated amortisation and accumulated impairment losses. These assets are amortised over the useful economic life and assessed for
impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss
is recognised in the Statement of Profit or Loss and Other Comprehensive Income for the amount by which the asset’s carrying amount
exceeds its recoverable amount.
This is in accordance with the expected pattern of future benefits based on the net cash flows expected from those assets. The amortisation
period and the amortisation method are reviewed at least annually as at 30 June to ensure the amortisation expense reflects the
performance of the intangible asset.
20
Investments in associates
Investments in associates are accounted for using the equity method of accounting. Information relating to associates are set out below:
Name
One Hood Sweeney Pty Ltd
Hunter Financial Planning Pty Ltd
OBM Financial Services Pty Ltd
Rundles CountPlus Pty Ltd
Rundles Financial Planning Pty Ltd
DMG Financial Holdings Pty Ltd
Principal place of business /
Country of incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Ownership interest
2021
%
32.36%
40.00%
40.00%
40.00%
20.00%
30.00%
2020
%
32.36%
40.00%
40.00%
40.00%
20.00%
30.00%
The percentage of ownership interest held is equivalent to the percentage of voting rights for all associates. All associates have the same
year end as the parent entity (30 June).
There are no significant restrictions on the ability of associates to transfer funds in the form of cash dividends or to repay loans or advances
to the consolidated entity.
66
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Summary of associates held during the year
One Hood Sweeney Pty Ltd
One Hood Sweeney is a South Australian professional services firm located across Adelaide, Whyalla and Kadina. It provides accounting,
business advisory, financial planning, finance and technology services to its clients.
Hunter Financial Planning Pty Ltd
Hunter Financial is a financial planning specialist based in Newcastle. Hunter Financial offers a consultative approach to wealth management
particularly in the area of wealth creation budgeting, insurance, estate planning and self-managed super funds (SMSF).
OBM Financial Services Pty Ltd
OBM Financial Services Pty Ltd is a professional services firm based in Ivanhoe, Victoria. It provides accounting and financial planning
services to its clients. OBM is a Count Financial member firm.
Rundles CountPlus Pty Ltd
Rundles CountPlus is a professional services firm based in Melbourne, Victoria. It provides accounting and business advisory services
to its clients.
Rundles Financial Planning Pty Ltd
Rundles Financial Planning is a professional services firm based in Melbourne, Victoria. It provides financial planning services to its clients.
DMG Financial Holdings Pty Ltd
DMG Financial Holdings is a professional services firm located in Sale and Yarram, Victoria. It provides accounting and business advisory
services to its clients.
Material associates
2021
Summarised Consolidated Statement
of Financial Position
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets / equity
Summarised Consolidated Statement of Profit
or Loss and Other Comprehensive Income
Revenue
Profit for the year
Total comprehensive income
Group share of profit for the year
2020
Summarised Consolidated Statement
of Financial Position
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets / equity
Summarised Consolidated Statement of Profit
or Loss and Other Comprehensive Income
Revenue
Profit for the year
Total comprehensive income
Group share of profit for the year
One Hood
Sweeney
$'000
Hunter Financial
Planning
$’000
OBM Financial
Services
$’000
Rundles
CountPlus
$’000
DMG Financial
Holdings
$’000
5,310
8,702
(5,366)
(1,933)
6,713
21,789
3,683
3,683
1,192
641
8,133
(538)
(840)
7,396
3,065
637
637
255
1,093
1,494
(796)
(586)
1,205
4,507
831
831
332
1,766
4,791
(2,704)
–
3,853
4,804
780
780
312
1,095
5,800
(779)
(2,042)
4,074
7,432
1,176
1,176
353
One Hood
Sweeney
$'000
Hunter Financial
Planning
$’000
OBM Financial
Services
$’000
Rundles
CountPlus
$’000
DMG Financial
Holdings
$’000
5,685
6,703
(4,668)
(1,970)
5,750
21,308
2,936
2,936
950
1,131
7,365
(842)
(187)
7,467
2,959
899
899
360
948
3,604
(733)
(591)
3,228
3,950
470
470
188
1,560
3,999
(2,884)
–
2,675
4,485
839
839
336
1,615
4,715
(875)
(1,212)
4,243
4,877
961
961
289
67
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Carrying amount of investments in associates
Reconciliation of carrying amount of investments in associates to summarised financial information for associates accounted for using the
equity method:
2021
$’000
7,277
1,192
(744)
7,725
2,742
255
(283)
2,714
1,532
(69)
332
(40)
1,755
2,228
312
(300)
2,240
347
54
(64)
337
3,503
–
353
(391)
3,465
2021
$’000
18,236
2,498
2020
$’000
6,896
950
(569)
7,277
2,809
360
(427)
2,742
1,344
–
188
–
1,532
2,140
336
(248)
2,228
418
56
(127)
347
–
3,439
289
(225)
3,503
2020
$’000
17,629
2,179
One Hood Sweeney Pty Ltd
Opening balance
Share in profit
Dividends
Carrying amount based on share in net assets of associate
Hunter Financial Planning Pty Ltd
Opening balance
Share in profit
Dividends
Carrying amount based on share in net assets of associate
OBM Financial Services Pty Ltd
Opening balance
Completion adjustment of acquisition of associate
Share in profit
Dividends
Carrying amount based on share in net assets of associate
Rundles CountPlus Pty Ltd
Opening balance
Share of profit
Dividends
Carrying amount based on share in net assets of associate
Rundles Financial Planning Pty Ltd
Opening balance
Share of profit
Dividends
Carrying amount based on share in net assets of associate
DMG Financial Holdings Pty Ltd
Opening balance
Acquisition of associate
Share of profit
Dividends
Carrying amount based on share in net assets of associate
Total carrying value of investments in associates as at 30 June
Total share of net profit of associates accounted for using the equity method
Contingent liabilities and capital commitments
The associates had no contingent liabilities or capital commitments as at 30 June 2021 or 30 June 2020.
68
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
21 Trade and other payables
Current liabilities
Trade payables
Other payables
Adviser payments
GST payable
Sundry payables and accrued expenses
Non-current liabilities
Other payables
Refer to note 34 for further information on financial instruments risk.
22 Contract liabilities
Current liabilities
Unearned revenue
Ongoing insurance trail commission
Non-current liabilities
Ongoing insurance trail commission
2021
$’000
1,291
67
8,111
1,420
3,312
14,201
2020
$’000
1,181
11
6,925
1,546
3,970
13,633
–
40
2021
$’000
1,328
9,004
10,332
2020
$’000
2,441
10,484
12,925
20,668
24,158
Contract liabilities have been raised to reflect the recognition of ongoing insurance commissions payable across various commission
arrangements. This reflects the recognition of certain future trail commission expenses when a performance obligation has been met, e.g. a
new customer is introduced to a product. The expense and contract liability is calculated based upon the estimated payout to aligned advisers.
Movement in unearned revenue
Balance at 1 July 2019
Payments received in advance
Additions through business combinations
Transfer to revenue – included in the opening balance
Transfer to revenue – other balances
Balance at 30 June 2020
Payments received in advance
Transfer to revenue – included in the opening balance
Transfer to revenue – other balances
Balance at 30 June 2021
$’000
916
4,268
20
(745)
(2,018)
2,441
2,041
(2,333)
(821)
1,328
69
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Movement in ongoing insurance trail commission liability
Balance at 1 July 2019
Ongoing insurance commission liability acquired
Amount recognised in revenue from contracts with customers
Payment of ongoing insurance trail commission
Balance at 30 June 2020
Amount recognised in revenue from contracts with customers
Payment of ongoing insurance trail commission
Balance at 30 June 2021
$’000
–
22,869
19,088
(7,315)
34,642
6,543
(11,513)
29,672
Significant accounting judgements, estimates and assumptions
Ongoing insurance trail commission
The key assumptions underlying the ongoing insurance trail commission liability are the remaining life of the insurance products, the likely
run off of products over time and the adviser payout ratio.
It has been estimated that the insurance policies have a remaining life of five years and that 20% of policies are cancelled at the end of each
year. These assumptions are subject to change depending on the actual experience of the insurance arrangements over time.
In respect of the adviser payout ratio, it has been estimated that 93.5% (2020: 93%) of ongoing insurance trail commission is paid to aligned
advisers. This is subject to change if Count Financial's adviser pricing changes or if the average payout ratio changes across the portfolio;
this may occur given the tiered pricing model applicable to aligned advisers.
23
Interest bearing loans and borrowings
Current liabilities
Bank loans – funding facility and other loans
Acquisition facility
Hire purchase
Non-current liabilities
Bank loans – funding facility and other loans
Refer to note 34 for further information on financial instruments risk.
Total facilities
Bank overdraft
Bilateral funding facility
Used at the reporting date
Bank overdraft
Bilateral funding facility
Unused at the reporting date
Bank overdraft
Bilateral funding facility
70
2021
$’000
717
1,891
2
2,610
1,718
2021
$’000
5,000
23,430
28,430
1,141
4,326
5,467
3,859
19,079
22,938
2020
$’000
461
2,891
7
3,359
1,372
2020
$’000
5,000
23,332
28,332
1,024
4,722
5,746
3,976
18,610
22,586
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
The interest-bearing loans and borrowings balance are $4,328,000 (Non-current: $1,718,000 Current: $2,610,000) (2020: Non-current:
$1,372,000 Current: $3,359,000) borrowings from Westpac Bank. There are currently four lines of credit with Westpac Bank.
CountPlus Limited has an overdraft facility with Westpac Bank, the limit is $5,000,000 (2020: $5,000,000). From this facility, bank guarantees
on properties are offset against this balance.
CountPlus Limited has a revolving line of credit with Westpac Bank, the limit is currently $20,000,000 (2020: $20,000,000) and is charged with
a variable rate. This five-year facility with Westpac started on 1 December 2017. The rate is determined with reference to the Bank Bill Swap
Bid Rate (BBSY). Reference Rates are published in the Australian Financial Review plus a margin. A guarantee and charge as security for the
facility is provided by CountPlus Limited.
Kidmans Partners Pty Ltd has a bank loan with Westpac Bank, the limit is $1,960,000 repayable over five years. In addition, there is a line
fee on this facility. A guarantee and charge as security for the facility is provided by Kidmans Partners Pty Ltd.
The MBA Partnership Pty Ltd has a bank loan with Westpac Bank, the limit is $1,470,000 repayable over one year. In addition, there is a line
fee on this facility. A guarantee and charge as security for the facility is provided by The MBA Partnership Pty Ltd.
Defaults and breaches
During the current and prior year, there were no defaults or breaches on any of the loans.
Significant accounting policy
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost.
Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period
of the borrowings, using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs
of the loan to the extent that it is probable that some or all the facility will be drawn down. In this case, the fee is deferred until the draw
down occurs. To the extent whereby there is no evidence that it is probable that some or all the facility will be drawn down, the fee is
capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.
Changes in liabilities arising from financing activities
Long term borrowings
Short term borrowings
Hire purchase short term liabilities
Total liabilities from financing activities
2020
$’000
1,372
3,352
7
4,731
Non-cash changes
Reclassification to
short term
$’000
Cash flow
$’000
Other changes
$’000
1,063
(1,461)
(5)
(403)
(717)
717
–
–
–
–
–
–
2021
$’000
1,718
2,608
2
4,328
24 Lease liabilities
Lease liabilities are presented in the Statement of Financial Position as follows:
Current liabilities
Lease liabilities
Non-current liabilities
Lease liabilities
2021
$’000
2020
$’000
3,439
3,321
10,994
12,041
71
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
The Group has leases for office buildings and some office equipment. With the exception of short term leases and leases of low-value
underlying assets, each lease is reflected on the Statement of Financial Position as a right-of-use asset and a lease liability. Variable lease
payments which do not depend on an index or a rate (such as lease payments based on a percentage of Group sales) are excluded from
the initial measurement of the lease liability and asset. The Group classifies its right-of-use assets in a consistent manner to its property,
plant and equipment (see note 17).
Each lease generally imposes a restriction that, unless there is a contractual right for the Group to sublet the asset to another party, the
right-of-use asset can only be used by the Group. Leases are either non-cancellable or may only be cancelled by incurring a substantive
termination fee. For leases over office buildings the Group must keep those properties in a good state of repair and return the properties
in their original condition at the end of the lease.
At 30 June 2021, 39 right-of-use assets were leased. The average lease term for premises is nine years, office equipment is five years
and others is four years. The average lease term includes option periods which management are reasonably certain will be exercised.
At 30 June 2021, the average remaining lease term for premises was four years, office equipment was five years and others was four years.
The lease liabilities are secured by the related underlying assets.
Lease payments not recognised as a liability
The Group has elected not to recognise a lease liability for short term leases (leases with an expected term of 12 months or less) or for leases
of low value assets. Payments made under such leases are expensed on a straight-line basis. In addition, certain variable lease payments are
not permitted to be recognised as lease liabilities and are expensed as incurred.
At 30 June 2021 the Group was not committed to short term leases.
Variable lease payments expensed on the basis that they are not recognised as a lease liability include rentals based on revenue from the
use of the underlying asset and excess use charges on office equipment. Variable payment terms are used for a variety of reasons, including
minimising costs for IT equipment with infrequent use. Variable lease payments are expensed in the period they are incurred.
Total cash outflow for leases for the year ended 30 June 2021 was $3,702,000 (2020: $3,640,000).
Amounts relating to leases recognised for the reporting period
The following amounts are recognised in Statement of Profit or Loss and Other Comprehensive Income:
Depreciation charge for the right-of-use assets by class of asset
Premises
Office equipment
Others
Total depreciation charge
Interest expense on lease liabilities (included in operating cost)
Total expense related to leases
The following amounts are recognised in the Statement of Cash Flows:
Cash outflow for leases (AASB 16) – financing activity
Principal
Cash outflow for leases (AASB 16) – operating activity
Interest
Total cash outflows
72
2021
$’000
2,919
128
8
3,055
697
3,752
2021
$’000
3,005
3,005
697
3,702
2020
$’000
2,791
144
14
2,949
716
3,665
2020
$’000
2,924
2,924
716
3,640
COUNTPLUS ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
25 Other liabilities
Current liabilities
Deferred cash consideration for acquisition of business combination, business assets and
investment in associates
Other current liabilities
Non-current liabilities
Deferred cash consideration for acquisition of business combination, business assets and
investment in associates
Lease make good liabilities
Movements in deferred consideration
Current
At 1 July 2020
Arising during the year
Payments made during the year
Fair value gain on deferred consideration
Transfer from non-current deferred consideration
Total current
Non-current
At 1 July 2020
Arising during the year
Transfer to current deferred consideration
Total non-current
Total
2021
$’000
1,063
53
1,116
203
567
770
2020
$’000
877
48
925
108
494
602
$’000
877
910
(464)
(368)
108
1,063
108
203
(108)
203
1,266
Significant accounting judgements, estimates and assumptions
Deferred consideration
Some acquisitions involve the payment of deferred consideration to vendors. This consideration is determined based on a multiple of actual
earnings over a fixed period and is dependent on revenue or client retention. Consideration payable to the vendors in relation to acquisitions
is recognised at fair value based on expected financial performance over the applicable future financial years. The component of deferred
consideration not expected to be settled within 12 months after the end of the reporting period is measured as the present value of expected
future payments to be made in respect of this deferred consideration, using a risk adjusted discount rate.
73
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
26
Provisions
Current liabilities
Employee benefits – annual leave
Employee benefits – long service leave
Employee benefits – sick leave
Bonus provision
Other
Non-current provisions
Employee benefits – long service leave
2021
$’000
3,323
2,895
38
518
23
6,797
966
2020
$’000
2,788
2,715
–
495
4
6,002
1,010
Significant accounting judgements, estimates and assumptions
Provisions
Provisions are recognised when the economic entity has a legal, equitable or constructive obligation to make a future sacrifice of economic
benefits to other entities as a result of past transactions or other past events. It is probable that a future sacrifice of economic benefits will
be required, and a reliable estimate can be made of the amount of the obligation.
Employee benefits
Further disclosures relating to Key Management Personnel are set out in the remuneration report which starts on page 20 of the
Directors’ Report.
Short term obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled within
12 months after the end of the period in which the employees render the related service, are recognised in respect of employees' services
up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. All short term
employee benefit obligations are presented as payables and as provisions.
Long term obligations
The liability for long service leave not expected to be settled wholly within 12 months after the end of the period in which the employees
render the related service, is recognised in the provision for employee benefits and measured as the present value of expected future
payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit
method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service.
Expected future payments are discounted using market yields at the end of the reporting period of high-quality corporate bonds with terms
and currencies that match, as closely as possible, the estimated future cash outflows. Remeasurements as a result of experience, adjustments
and changes in actuarial assumptions are recognised in the Statement of Profit or Loss and Other Comprehensive Income.
The obligations are presented as current liabilities in the Statement of Financial Position if the entity does not have an unconditional right
to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
27 Remediation provision
Current liabilities
Remediation provision – ongoing service fees – Count Financial
Remediation provision – other advice issues – Count Financial
Remediation provision – Total Financial Solutions Australia
74
2021
$’000
258,082
1,728
17
259,827
2020
$’000
195,000
–
30
195,030
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Remediation provision – Count Financial
The Count Financial remediation provision represents the estimated cost of remediation of current and former clients in respect of advice
issues, including ongoing service fees charged where no service was provided. The advice issues occurred prior to the acquisition of Count
Financial by CountPlus on 1 October 2019. Refer to note 15 for disclosure on the corresponding indemnity asset. The provision includes the
following elements:
Ongoing service fees – cost of remediation of clients
Ongoing service fees – interest on amounts payable to clients
Other advice issues
2021
$’000
129,040
129,042
1,728
259,810
2020
$’000
109,200
85,800
–
195,000
Ongoing service fees
The following key assumptions have been reflected in the remediation provision:
Î Value of ongoing service fees charged
Î Number of years in which issues occurred
Î Refund rate
Î
Î Value below which refunds will be made without investigation
Interest calculation methodology
$451,575,000
11 years
24%
RBA cash rate plus 6% compounded monthly
$2,000 (excluding interest)
A change in each of the key assumptions above may impact the value of the remediation provision. We set out below an estimate of the
impact of a change in three of the key assumption on the value of the provision. Note that the impact of the movements in the assumptions
(as set out below) are independent of each other.
Key assumption
Value of ongoing service fees charged
Number of years in which issues occurred
Refund rate
Movement
+$10,000,000
-$10,000,000
+1 year
-1 year
+1%
-1%
Impact on provision
$'000
5,716
(5,716)
38,729
(34,261)
8,043
(8,043)
Remediation settlements will not be known until individual cases have been reviewed and compensation offers accepted. Differences
in amounts paid to the amount of provision recorded at 30 June 2021 will be recorded as profit or loss in future periods.
Remediation payments are expected to be deductible for tax purposes. If a remediation settlement is tax deductible, CountPlus will
receive the net amount from the CBA. Similarly, if the reimbursement is deemed to be assessable, the CBA will remit the grossed up
amount to CountPlus.
Other advice issues
‘Other advice issues’ presented above relate to additional items covered under the CBA indemnity deed including remediation due
to specifically identified clients, deceased estates, clients of specific financial advisers and in respect of litigation matters. While these
items formed part of the indemnity provided by CBA to Count Financial at 30 June 2020, they were unable to be estimated at that date.
Since 1 July 2020, resolution of these items has been prioritised, and at 30 June 2021, future expected payments are able to be estimated.
75
COUNTPLUS ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Movement in remediation provision – Count Financial
Provision at 1 July 2019
Additional provisions
Amounts utilised during the year
Provision at 30 June 2020
Additional provisions
Amounts utilised during the year
Provision at 30 June 2021
$’000
–
195,000
–
195,000
69,772
(4,962)
259,810
Significant accounting judgements, estimates and assumptions
Remediation provision
The key accounting judgements and estimates used in calculating the remediation provision include the value of ongoing service fees
charged, the number of years in which issues have occurred, the refund rate, the interest calculation methodology, the length of time
taken to make the refund and the value below which fee refunds will be made without investigation. The key assumptions reflected in the
remediation provision are subject to a high degree of uncertainty. The key assumptions will become clearer over time as the remediation
program obtains greater insight into the actual quantum of the issues identified.
The value of ongoing service fees charged has been estimated using Count Financial’s books and records and the books and records of
third-party product providers where relevant; the population of impacted customers is subject to some uncertainty and is yet to be finalised.
The refund rate has been estimated by reference to testing conducted on a small sample of client cases. The refund rate is subject to change
as actual refund rate data (incurred by Count Financial) becomes available.
The interest calculation methodology that has been applied is based on a rate equivalent to the RBA cash rate plus 6% compounded
monthly. This methodology is subject to change.
Some customers may be remediated without investigation where the combined value of the refund and the interest is below a certain
amount, however this is dependent on the availability of underlying customer records. This is subject to change.
28 Contributed equity
Ordinary shares – fully paid
Treasury shares – Issued capital held by loan
funded share plan
Ordinary shares
2021
Shares
114,222,559
(2,612,310)
2020
Shares
114,222,559
(2,679,657)
2021
$’000
126,566
(3,413)
2020
$’000
126,566
(3,501)
111,610,249
111,542,902
123,153
123,065
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Group in proportion to the number
of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Group does not have a limited amount of
authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have
one vote.
Employee share scheme
The Group has a long term incentive, under which performance rights are awarded to Key Management Personnel.
Share buy-back
There is no current on-market share buy-back.
76
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Capital risk management
When managing capital, the Board's objective is to ensure the Group continues as a going concern as well as to maintain optimal returns
to shareholders and benefits for other stakeholders. Management monitors the capital structure to ensure that the Group is positioned to
take advantage of favourable costs of capital or higher expected returns on assets. The Group currently has a facility of $20,000,000, with the
Westpac Bank, which has been drawn down by $1,891,000 as at 30 June 2021. The Group has an overdraft facility of $5,000,000 which was
drawn down by lease guarantees of $1,024,000 at 30 June 2021. In addition, there are two bank loans in member firms totalling $3,430,000
which have been drawn down by $2,435,000. Future acquisitions and investments will be funded from existing and future cash flows as well
as funds received under the Group’s Owner, Driver – Partner model.
In the long term, the Group expects to maintain a dividend payout ratio of between 60% and 90% of maintainable net profit after tax
and minority interests, subject to market conditions and Group performance. The Group is not subject to any externally imposed capital
requirements.
Significant accounting policy
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.
Incremental costs directly attributable to the issue of new shares for the acquisition of a business are not included in the cost of the
acquisition as part of the purchase consideration.
29 Reserves
Acquisition reserve
Share-based payments reserve
Foreign currency reserve
Movements in reserves
2021
$’000
(48,548)
814
(33)
(47,767)
Movements in each class of reserve during the current and previous financial year are set out below:
Balance at 1 July 2019
Foreign currency translation
Transfer to accumulated losses
Transfer of loan funded share plan
Share based payments for long term incentive plan
Balance at 30 June 2020
Foreign currency translation
Transfer to accumulated losses
Transfer of loan funded share plan
Share based payments for long term incentive plan
Balance at 30 June 2021
Share based
payment reserve
$’000
Acquisition
reserve
$’000
Foreign Currency
Reserve
$’000
1,486
–
(580)
(376)
115
645
–
23
(41)
187
814
(48,548)
–
–
–
–
(48,548)
–
–
–
–
(48,548)
–
(10)
–
–
–
(10)
(23)
–
–
–
(33)
2020
$’000
(48,548)
645
(10)
(47,913)
Total
$’000
(47,062)
(10)
(580)
(376)
115
(47,913)
(23)
23
(41)
187
(47,767)
77
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Nature and purpose of reserves
Share based payment reserve
In addition, the reserve is used to recognise the value of equity benefits provided to the Chief Executive Officer and other Key Management
Personnel as part of their remuneration for the long term incentive plan. For further details see the remuneration report on pages 20 to 29.
Acquisition reserve
The acquisition reserve arises on the acquisition of the non-controlling interests of subsidiaries. On 1 July 2010, the Group’s interests
in 15 associates were consolidated with the non-controlling interest being measured as the present ownership’s proportionate share
of identifiable net assets. The acquisition of these non-controlling interests as part of the public listing was not a business combination
but was an equity transaction between owners. Accordingly, in 2011, the difference between the consideration paid and fair value
of the identifiable net assets of the non-controlling interests has been accounted for in the acquisition reserve.
30 Accumulated losses
Accumulated losses at the beginning of the financial year
Adjustment for change in accounting policy – AASB 16 Leases
Accumulated losses at the beginning of the financial year – restated
Profit after income tax expense for the year
Dividends paid (note 32)
Transfers in
Accumulated losses at the end of the financial year
31 Non-controlling interest
Reconciliation of non-controlling interest in controlled entities
Opening balance
Acquisitions
Purchase of shares from non-controlling interest holder
Disposal of shares to non-controlling interest holder
Share of net profit for the period
Dividends paid by subsidiaries to non-controlling interests
Closing Balance
2021
$’000
(6,435)
–
(6,435)
4,938
(2,789)
69
(4,217)
2021
$’000
9,395
487
(358)
745
2,146
(1,762)
10,653
2020
$’000
(19,412)
(1,075)
(20,487)
15,861
(2,506)
697
(6,435)
2020
$’000
6,232
2,308
(183)
240
1,587
(789)
9,395
78
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
The MBA Partnership Pty Ltd
The proportion of ownership interests (and voting rights) held by non-controlling interest
Opening non-controlling interest at 1 July
Additions
Disposals
The profit allocated to non-controlling interest for the period
Dividends paid
Closing non-controlling interest at 30 June
Specialised Business Solutions Pty Ltd
The proportion of ownership interests (and voting rights) held by non-controlling interest
Opening non-controlling interest at 1 July
The profit allocated to non-controlling interest for the period
Dividends paid
Closing non-controlling interest at 30 June
Kidmans Partners Pty Ltd
The proportion of ownership interests (and voting rights) held by non-controlling interest
Opening non-controlling interest at 1 July
Additions
The profit allocated to non-controlling interest for the period
Dividends paid
Closing non-controlling interest at 30 June
AdviceCo. Pty Ltd
The proportion of ownership interests (and voting rights) held by non-controlling interest
Opening non-controlling interest at 1 July
Additions
The profit allocated to non-controlling interest for the period
Dividends paid
Closing non-controlling interest at 30 June
Mogg Osborne Pty Ltd
The proportion of ownership interests (and voting rights) held by non-controlling interest
Opening non-controlling interest at 1 July
The profit allocated to non-controlling interest for the period
Dividends paid
Closing non-controlling interest at 30 June
Count Financial Ltd
The proportion of ownership interests (and voting rights) held by non-controlling interest
Opening non-controlling interest at 1 July
Additions
The profit allocated to non-controlling interest for the period
Dividends paid
Closing non-controlling interest at 30 June
Bentleys Advisory (WA) Pty Ltd
The proportion of ownership interests (and voting rights) held by non-controlling interest
Opening non-controlling interest at 1 July
Additions
The profit allocated to non-controlling interest for the period
Dividends paid
Closing non-controlling interest
Twomeys Pty Ltd
The proportion of ownership interests (and voting rights) held by non-controlling interest
Opening non-controlling interest at 1 July
Additions
The profit allocated to non-controlling interest for the period
Dividends paid
Closing non-controlling interest
Total non-controlling interest at 30 June
2021
$’000
31.89%
2,144
487
(358)
734
(515)
2,492
38.72%
807
44
(170)
681
35.85%
1,278
10
196
(192)
1,292
40.00%
1,450
154
404
(296)
1,712
35.00%
1,188
319
(224)
1,283
15.00%
2,528
–
110
(215)
2,423
5.00%
–
164
3
(6)
161
40.00%
–
417
336
(144)
609
10,653
2020
$’000
37.97%
2,098
–
(183)
611
(382)
2,144
38.72%
763
44
–
807
35.62%
1,066
139
226
(153)
1,278
35.00%
1,265
101
226
(142)
1,450
35.00%
1,040
260
(112)
1,188
15.00%
–
2,308
220
–
2,528
–
–
–
–
–
–
–
–
–
–
–
–
9,395
79
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
The following information is provided for non-controlling interests that are material to the consolidated entity. Figures are as per the
subsidiaries' financial statements:
2021
$’000
15,112
6,687
11,710
1,469
307,492
293,138
14,785
1,091
11,661
5,173
7,273
548
6,092
1,415
4,585
1,062
7,210
2,791
5,044
909
10,231
6,033
7,805
197
4,016
1,742
5,170
873
2020
$’000
12,499
5,116
10,397
1,187
256,848
242,150
14,865
1,787
9,906
3,446
7,498
714
5,709
1,297
4,184
677
6,425
2,379
4,386
745
9,072
5,065
7,274
153
3,695
1,947
4,614
645
The MBA Partnership Pty Ltd
Assets
Liabilities
Revenue
Net Profit
Count Financial Ltd
Assets
Liabilities
Revenue
Net Profit
Kidmans Partners Pty Ltd
Assets
Liabilities
Revenue
Net Profit
AdviceCo. Pty Ltd
Assets
Liabilities
Revenue
Net Profit
Mogg Osborne Pty Ltd
Assets
Liabilities
Revenue
Net Profit
Bentleys (WA) Pty Ltd
Assets
Liabilities
Revenue
Net Profit
Twomeys Pty Ltd
Assets
Liabilities
Revenue
Net Profit
80
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
32 Dividends
Dividends
Dividends paid during the financial year were as follows:
Dividends paid during the year
Interim dividend fully franked based on tax paid @ 30%, ordinary dividend paid for the
year ended
Full year dividend fully franked based on tax paid @ 30%, ordinary dividend paid for the
year ended
Dividends proposed and recognised as liability
Final dividend fully franked based on tax paid @ 30%, ordinary dividend for the year ended
2021
$’000
–
1,395
1,394
–
–
2020
$’000
–
1,111
1,395
–
–
Total dividends paid or provided for during the year
2,789
2,506
Franking credits
Franking credits available for subsequent financial years based on a tax rate of 30%
2021
$’000
7,893
2020
$’000
7,006
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
Î
Î
Î
franking credits that will arise from the payment of the amount of the provision for income tax at the reporting date
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date
33 Financial assets and liabilities
Note 2 provides a description of each category of financial assets and financial liabilities and the related accounting policies. The carrying
amounts of financial assets and financial liabilities in each category are as follows:
30 June 2021
Financial assets
Cash and cash equivalents
Trade and other receivables
Loans and advances
Total financial assets
30 June 2021
Financial liabilities
Trade and other payables
Interest bearing loans and borrowings
Lease liabilities
Other liabilities
Total financial liabilities
Note
Amortised cost
$’000
10
11
13
Note
21
23
24
25
26,239
8,745
236
35,220
Other liabilities
(amortised cost)
$’000
1,291
4,328
14,433
1,886
21,938
Total
$’000
26,239
8,745
236
35,220
Total
$’000
1,291
4,328
14,433
1,886
21,938
81
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
30 June 2020
Financial assets
Cash and cash equivalents
Trade and other receivables
Loans and advances
Total financial assets
30 June 2020
Financial liabilities
Trade and other payables
Interest bearing loans and borrowings
Lease liabilities
Other liabilities
Total financial liabilities
Note
Amortised cost
$’000
10
11
13
Note
21
23
24
25
25,842
9,075
424
35,341
Other liabilities
(amortised cost)
$’000
1,181
4,731
15,362
1,033
22,307
Total
$’000
25,842
9,075
424
35,341
Total
$’000
1,181
4,731
15,362
1,033
22,307
The carrying amount of the following financial assets and liabilities is considered a reasonable approximation of fair value:
Î
Î
Î
trade and other receivables;
cash and cash equivalents;
loans and advances;
34 Financial instruments risk
Financial risk management objectives
trade and other payables;
Î
Î other liabilities; and
Î
interest bearing borrowings.
The Group's principal financial assets and liabilities, which arise directly from its operations, comprise of cash and cash equivalents, trade
and other receivables, interest bearing loans, borrowing, trade and other payables.
The Group's activities expose it to a variety of financial risks: market risk (including interest rate risk), credit risk and liquidity risk. The Group's
overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on
the financial performance of the Group. The Group uses different methods to measure different types of risk to which it is exposed. These
methods include sensitivity analysis in the case of interest rate and ageing analysis for credit risk.
Risk management is carried out by senior finance executives ('Finance') under policies approved by the Board of Directors ('the Board').
These policies include identification and analysis of the risk exposure of the Group and appropriate procedures, controls and risk limits.
Finance identifies and evaluates financial risks within the Group's operating units. Finance reports to the Board on a monthly basis.
Market risk
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group's main interest rate risk arises from long term borrowings. Borrowings obtained at variable rates expose the Group to interest
rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk.
At 30 June 2021, the Group had total bank loans outstanding of $4,326,000 (2020: $4,722,000). The Group also had an overdraft facility of
$5,000,000 which had been drawn down by lease guarantees of $1,141,000. The effect on profit as a result of changes in interest rate with
all other variables remaining constant would be as follows:
Change in profit
+1% (100 basis points)
-1% (100 basis points)
82
2021
$’000
(168)
168
2020
$’000
(191)
191
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Credit risk
The Group is exposed to credit risk from its operating activities (primarily cash and cash equivalents and trade and other receivables).
The Group trades only with creditworthy third parties, and as such collateral is not requested nor is it the Group's policy to securitise its trade
and other receivables. There are no significant concentrations of credit risk within the Group and financial instruments are spread amongst
several counterparties to spread the risk of default of counterparties.
The Group's exposure to credit risk arises from potential default of the counterparty, with a maximum exposure equal to the carrying amount
of these instruments, as indicated in the consolidated statement of financial position. The maximum credit risk exposure does not consider
the value of any collateral or other security held, in the event other entities / parties fail to perform their obligations under the financial
instruments in question. In addition, receivable balances are monitored on an ongoing basis. The Group observes its provision policy.
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash equivalents) and available
borrowing facilities to be able to pay debts as and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously monitoring
actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
As at 30 June 2021, the Group’s non-derivative financial liabilities have contractual maturities (including interest payments where applicable)
as summarised below:
30 June 2021
Trade and other payables
Interest bearing loans and borrowings
Lease liabilities
Other liabilities
Current within
6 months
$’000
6 to 12 months
$’000
Non-current
1 to 5 years
$’000
later than 5 years
$’000
1,291
382
1,861
771
4,305
–
380
1,642
115
2,137
–
3,853
10,082
764
14,699
–
47
2,928
235
3,210
This compares to the maturity of the Group’s non-derivative financial liabilities in the previous reporting period as follows:
30 June 2020
Trade and other payables
Interest bearing loans and borrowings
Lease liabilities
Other liabilities
Financing arrangements
Unused borrowing facilities at the reporting date:
Bank overdraft
Bilateral funding facility
Current within
6 months
$’000
6 to 12 months
$’000
Non-current
1 to 5 years
$’000
later than 5 years
$’000
1,181
321
1,798
680
3,980
–
314
1,591
244
2,149
–
4,205
10,383
371
14,959
2021
$’000
3,859
19,079
22,938
–
326
4,139
232
4,697
2020
$’000
3,976
18,610
22,586
The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the continuance
of satisfactory credit ratings, the bank loan facilities may be drawn at any time. For further details on bank loan facilities see note 23.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
83
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
35 Fair value measurement
The carrying amounts of cash and cash equivalents, trade and other receivables, trade and other payables, loans, advances and other
receivables and interest-bearing borrowings approximate their fair value.
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.
Fair value hierarchy
The following tables detail the Group's assets and liabilities, measured or disclosed at fair value, using a three level hierarchy, based on the
lowest level of input that is significant to the entire fair value measurement, being:
Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Unobservable inputs for the asset or liability.
Level 1
Level 2
Level 3
2021
Financial liabilities
Contingent cash consideration
Total liabilities
2020
Financial liabilities
Contingent cash consideration
Total liabilities
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
–
–
–
–
(1,266)
(1,266)
(1,266)
(1,266)
Level 1
$'000
Level 2
$'000
Level 3
$'000
–
–
–
–
(985)
(985)
Total
$'000
(985)
(985)
$’000
(985)
355
(1,100)
464
(1,266)
Balance at beginning of year
Gain on deferred consideration in profit or loss
Additions to deferred cash & equity consideration for acquisitions of assets, subsidiaries & associates during the year
Cash paid for settlement of deferred cash consideration
Balance at end of year
The fair value of the financial assets and liabilities represents 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. The following methods and assumptions were used
to estimate the fair values.
Fair value of other investments held at fair value through profit and loss is determined based on observable market transactions.
Observable market transactions considered are those transactions which occurred on 30 June 2021, excluding new issue of shares.
The fair value is calculated by multiplying the total number of shares outstanding by the market price.
Fair value of contingent cash consideration is derived from management expectations of the performance of the acquired businesses
and assets.
Fair value of deferred equity consideration is derived from management expectations of the performance of the acquired businesses
and assets.
There were no transfers between levels during the financial year.
The maximum potential payment for deferred consideration is $1,266,000 (2020: $985,000).
Management believes no reasonable change in any other key assumptions would have a material impact on the fair value of the other
investments and deferred consideration.
84
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
36 Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Grant Thornton, the auditor of the Group:
2021
$
2020
$
371,000
431,000
–
5,000
5,000
376,000
6,535
251,222
257,757
688,757
Audit services – Grant Thornton
Audit or review of the financial statements
Other services – Grant Thornton
Taxation services including tax due diligence
Other advisory services*
Total other services – Grant Thornton
Total remuneration of Grant Thornton
* Other advisory services comprises of transaction advisory and IT systems integration.
37 Contingent assets
The Group has no contingent assets as at 30 June 2021 (2020: nil).
38 Contingent liabilities
Class action lawsuit
Class action proceedings have been filed in the Federal Count of Australia against Count Financial Limited, a subsidiary of the Company.
The proceedings seek financial compensation and relate to:
Î
Î
commissions paid to Count Financial Limited and its authorised representatives (financial advisers) in respect of financial products
(including insurance); and
certain obligations of Count Financial Limited and its financial advisers including to act in the best interests of clients.
The class action relates to the period from 21 August 2014 to 21 August 2020.
CountPlus Limited acquired Count Financial Limited from the Commonwealth Bank of Australia (CBA) on 1 October 2019. CBA has provided
an indemnity to CountPlus Limited in relation to certain conduct that occurred prior to and after the acquisition of Count Financial Limited
by CountPlus Limited for an amount of $300M.
A reliable estimate of the expected future inflows and / or outflows related to the class action cannot be formed at this stage.
Claim against Total Financial Solutions Australia
A claim has been raised by a former client of Total Financial Solutions Australia Limited (TFSA) and McQueen Financial Group Pty Ltd
(McQueen) (a former Corporate Authorised Representative of TFSA and current Corporate Authorised Representative of Count Financial Ltd)
in relation to the denial of a Total and Permanent Disability (TPD) benefit in relation to their Westpac life insurance policy.
A reliable estimate of the expected future inflows and / or outflows related to the claim cannot be formed at this stage. A claim for indemnity
has been made against the professional indemnity insurance taken out by Count Financial Limited. The deductible on this claim is $250,000.
TFSA and McQueens have filed a defence to the claim.
Claim against The MBA Partnership
This matter relates to a claim against The MBA Partnership Pty Ltd (MBA) in the Queensland District Court by Eastland 5 Pty Ltd. The plaintiff
claims that MBA acted for them in relation to certain matters and has suffered loss. The amount claimed against MBA is $517,033 plus costs
and interest.
The insurer has been notified of the claim and external lawyers engaged to defend the matter.
A reliable estimate of the expected future inflows and / or outflows related to this matter cannot be formed at this stage.
The Group has no other contingent liabilities as at 30 June 2021 (30 June 2020: nil).
85
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
39 Commitments
Capital commitments
The Group has total capital commitments of $1,024,000 (2020: $1,024,000), to various landlords in form of bank guarantees. No material
losses are anticipated in respect of these guarantees.
Hire purchase commitments
The Group leases various office equipment, motor vehicles and leasehold improvements under hire purchase arrangements. The future
commitments under these categories are listed in the table below.
Commitments
2021
$’000
2020
$’000
2
–
2
–
2
6
2
8
–
8
Hire purchase commitments
Committed at the reporting date and recognised as liabilities, payable:
Within one year
One to five years
Total commitment
Less: Future finance charges
Hire purchase commitments
40 Related party transactions
Parent entity
CountPlus Limited is the parent entity.
Subsidiaries
Transactions between the Company and its subsidiaries during the year consisted of:
Î
Î
Î
Î
the loans advanced by the parent to subsidiaries;
the loan repayments by the subsidiaries to the parent;
the payment of dividends to the parent by subsidiaries; and
recharges from the parent to the subsidiaries.
At the year end, all loan balances, payment of dividends and recharges between the parent and these subsidiaries were eliminated
on consolidation.
Subsidiaries
Interests in subsidiaries are set out in note 41.
Associates
Interests in associates are set out in note 20.
86
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Key Management Personnel
Short term employee benefits
Post-employment benefits
Long term benefits
Share-based payments
Transactions with related parties
The following transactions occurred with related parties:
2021
$
2,488,105
150,387
39,180
187,397
2,865,069
2020
$
2,194,456
129,740
17,590
114,497
2,456,283
Sale of goods and services:
Net fees and commissions received from Count Financial
Net fees and commissions received from Colonial First State Group (a related party
by shareholding)
Premises expenses:
Catalyst Finance Pty Ltd
The Southport Unit Trust
Rosebead Pty Ltd
Mark & Bronwyn Kenmir Superannuation Fund
Bronwyn Kenmir
2021
$’000
–
195
210
283
63
29
44
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans to related parties
The following balances are outstanding at the reporting date in relation to loans with related parties:
Current receivables:
Loan to Count Member Firm Pty Ltd
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
2021
$’000
197
2020
$’000
2,400
667
254
319
62
29
44
2020
$’000
395
87
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
41
Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the
accounting policy described in note 2:
Ownership interest
Principal place of business /
Country of Incorporation
Name
1. The MBA Partnership Pty Ltd*
Î Digital O2 Pty Ltd
Î MBA FS (Rawsons) Pty Ltd
Î The MBA Partnership (NSW) Pty Ltd
Î The MBA Partnership BNE Pty Ltd
Î Specialised Business Solutions Pty Ltd
Î Collective Outsourcing Pty Ltd
Î Collective Outsourcing Incorporated
2. Bentleys (WA) Pty Ltd*
Î Bentleys Advisory (WA) Pty Ltd
Î Bentleys Corporate Finance (WA) Pty Ltd
Î Australian Superannuation & Compliance Pty Ltd
3. Addvantage Financial Freedom Pty Ltd*
Î Addvantage Accountants Pty Ltd
Î Cooma Accounting and Financial Services Pty Ltd
Î Beames & Associates Pty Ltd
4. Moggs Accounting + Advisory Pty Ltd (formerly Mogg Osborne Pty Ltd)*
5. Crosby Dalwood Pty Ltd*
6. Cooper Reeves Pty Ltd*
7. CountPlus One Pty Ltd*
8. Evolution Advisers Pty Ltd*
9. AdviceCo. Pty Ltd*
10. Kidmans Partners Holdings Pty Ltd*
Î Kidmans Partners Pty Ltd
Î Kidmans Partners Mortage Pty Ltd
Î Kidmans Partners Services Pty Ltd
Î Kidmans Partners Wealth Pty Ltd
11. Unite Advisory Pty Ltd*
12. CountPlus FS Holdings Pty Ltd (TFS Group)*
Î Total Financial Solutions Australia Ltd
Î TFS Operations Pty Limited
Î TFS Advice Pty Limited
13. Twomeys Pty Ltd*
Î Twomeys Accounting & Advisory Pty Ltd
14. Count Financial Limited*
15. Kidmans PEC Pty Ltd
16. BLUE789 Pty Ltd
17. ADVICE389 Pty Ltd
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Philippines
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
2021
%
68.11%
100.00%
100.00%
51.00%
100.00%
61.28%
100.00%
100.00%
95.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
65.00%
100.00%
100.00%
100.00%
100.00%
60.00%
64.15%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
60.00%
100.00%
85.00%
100.00%
100.00%
100.00%
2020
%
62.03%
100.00%
70.00%
51.00%
–
61.28%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
65.00%
100.00%
100.00%
100.00%
100.00%
65.00%
64.38%
–
–
–
–
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
–
85.00%
100.00%
100.00%
100.00%
* These subsidiaries are separate cash generating units.
These entities are consolidated into the respective cash generating units (CGUs) identified above. The class of shares acquired for all the
subsidiaries are ordinary shares.
88
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Significant restrictions relating to subsidiaries
There are no statutory, contractual or regulatory restrictions on any of the subsidiary’s ability to access or transfer or use its assets
and settle the liabilities of the consolidated entity.
There are no guarantees given or other requirements that may restrict dividends and other capital distributions being paid, or loans
and advances being made or repaid to (or from) other entities within the consolidated entity.
Consolidated structured entities
The Group does not have any consolidated structured entities other than the ones which are consolidated in these financial statements
and listed as subsidiaries above.
42 Events after the reporting period
On 14 July 2021, CountPlus Limited member firm, NSW based Unite Advisory Pty Ltd (Unite) finalised terms to acquire 100% of the
business of Bentley Brett & Vincent Pty Ltd. Simultaneously with this transaction, Unite will proceed with an equity buy-back program
by Key Management Personnel, under the CountPlus OD-PTM model.
On 30 July 2021, CountPlus Limited finalised terms to sell the Audit and Corporate business units of member firm Bentleys (WA) Pty Ltd
to Hall Chadwick (WA) Pty Ltd.
On 26 August 2021, the Directors resolved to declare a full year final dividend for FY21 of 1.50 cents (fully franked) to be paid on 13 October
2021 (Record date 24 September 2021).
No other matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect:
a) the consolidated entity’s operations in future financial years;
b) the results of those operations in future financial years; or
c) the consolidated entity’s state of affairs in future financial years.
43 Reconciliation of profit after income tax to net cash from operating activities
Profit after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Share-based payments
Impairment / (reversal) of impairment of receivables
Gain on bargain purchase
Gain on deferred consideration
Gain on lease variation
Gain on disposal of non-current assets
Insurance trail commission accounting adjustment
Loss on disposal of non-current assets
Share of associate net profit
Employee entitlements
Make good provision discount unwind
Accrued interest income
Change in operating assets and liabilities:
Increase in trade and other receivables
(Decrease) / increase in contract liabilities
Increase in trade and other payables
(Increase) / decrease in income tax refund due
Decrease in deferred tax liabilities
Decrease in employee benefits
Net cash from operating activities
2021
$’000
7,084
5,510
187
(422)
–
(355)
(108)
(396)
552
26
(2,498)
1,229
(3)
(16)
790
(1,113)
1,023
(125)
(1,261)
(508)
9,596
2020
$’000
17,448
5,366
115
528
(10,952)
(88)
(152)
–
–
–
(2,179)
1,564
–
(20)
(1,373)
151
2,103
942
(550)
(466)
12,437
89
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
44 Earnings per share
Profit after income tax
Non-controlling interest
Profit after income tax attributable to the owners of CountPlus Limited
Weighted average number of ordinary shares used in calculating basic earnings per share
Adjustments for calculation of diluted earnings per share:
Long term incentive performance rights
2021
$’000
7,084
(2,146)
4,938
2020
$’000
17,448
(1,587)
15,861
2021
Number
2020
Number
111,583,310
110,887,268
776,671
502,922
Weighted average number of ordinary shares used in calculating diluted earnings per share
112,359,981
111,390,190
Basic earnings per share
Diluted earnings per share
Significant accounting policy
Basic earnings per share is calculated by dividing:
2021
Cents
4.43
4.39
2020
Cents
14.30
14.24
Î
the profit attributable to owners of the Group, excluding any costs of servicing equity other than ordinary shares; and
Î by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares
issued during the year and excluding treasury shares.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to consider:
Î
Î
the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares; and
the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive
potential ordinary shares.
90
COUNTPLUS ANNUAL REPORT 2021 Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
45 Share plans
Loan funded share plan
Long term incentive awards are delivered to employees in the form of a loan funded share plan (LFSP). Under the plan, employees who
have contributed to Group performance may be granted an allocation of loan-funded shares which are held on their behalf by an employee
share trust.
A summary of the Group shares issued up to the year ended 30 June 2021 are as follows:
Description
Grant date
Expiry date
Exercise
price
Start of
the year
Granted
during
the year
Exercised
during
the year
Expired Forfeited
Balance
at end of
the year
Vested and
exercisable
at end of
the year
LFSP 2015
March 2015
March 2018(a)
$1.12
385,139
–
–
–
385,139
–
–
(a) Due to an extension granted in respect of the LFSP 2015 shares, the plan remained active at 30 June 2020. The plan was formally
terminated during the FY21 period.
During the 2020 financial year, the acquisition of Count Financial resulted in an increase in the CountPlus share price, the 2015 LFSP vesting
conditions were retested and it was determined that 1,134,150 shares were eligible to vest to the participants. These awards were exercised
during the course of the 2020 financial year.
As at 30 June 2020, there were 385,139 awards outstanding in relation to the 2015 Loan Funded Share Plan. These vesting conditions were
tested and it was determined that none of these awards are expected to vest. The 2015 Loan Funded Share Plan has been cancelled during
the course of the 2021 financial year.
Employee loyalty equity plan
During the 2021 and 2020 financial years no shares were issued under the employee loyalty equity share plan.
Long term incentive plan
The long term incentive plans are set out on pages 27 to 29 of this report.
46 Parent entity information
The individual financial statements for the parent entity show the following aggregate amounts:
Statement of Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Contributed equity
Share based payment reserve
Accumulated losses
2021
$’000
6,142
55,025
61,167
(1,701)
(491)
(2,192)
58,975
126,552
855
(68,432)
58,975
2020
$’000
6,246
55,740
61,986
(2,355)
(542)
(2,897)
59,089
126,552
642
(68,105)
59,089
91
COUNTPLUS ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
Statement of Profit or Loss and Other Comprehensive Income
Profit for the year
2021
$’000
2,521
2020
$’000
3,463
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2021 and 30 June 2020.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2021 and 30 June 2020.
Capital commitments – Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2021 and 30 June 2020.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 2, except for the following:
Î
Î
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
Î Dividends received from subsidiaries are recognised as other income by the parent entity.
Parent entity financial information
The financial information for the parent entity, CountPlus Limited, disclosed above have been prepared on the same basis as the consolidated
financial statements, except as set out below.
Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at the lower of cost and recoverable value in the financial
statements of CountPlus Limited. Dividends received from associates are recognised in the parent entity’s profit or loss, rather than being
deducted from the carrying amount of these investments.
Tax consolidation legislation
CountPlus Limited (‘the Corporate Entity’) and its 100% owned Australian subsidiaries formed an income tax consolidation group with effect
from 5 November 2010. Subsidiaries joined the tax consolidation group from the date they became wholly owned. The Corporate Entity
and the controlled entities in the tax consolidated group account for their own current and deferred tax amounts. These tax amounts are
measured as if each entity in the tax consolidated group continues to be a standalone taxpayer.
Members of the CountPlus tax consolidation group entered into a tax sharing and funding agreement. Under the terms of this agreement,
each member in the tax consolidation group agreed to make a tax equivalent payment to the Corporate Entity based on their current tax
liability or current tax asset. Deferred taxes are recorded by members of the tax consolidation group in accordance with the principles of
AASB 112 Income Taxes.
Financial guarantees
The Group currently has banking facilities with Westpac Bank. These comprise a $5,000,000 revolving line of credit facility and a $20,000,000
Bank Bill Business Loan. $1,891,000 was drawn during the year and a bank guarantee of $1,024,000 has been provided for property leases.
Share based payments
The grant by the Group of options over its equity instruments to the employees of a subsidiary in the Group is treated as a capital
contribution to the relevant subsidiary. The fair value of employee services received, measured by reference to the grant date fair value,
is recognised over the vesting period as an increase to investment in subsidiaries, with a corresponding credit to equity.
92
COUNTPLUS ANNUAL REPORT 2021 Directors' Declaration
1.
In the opinion of the Directors of CountPlus Limited:
a. The consolidated financial statements and notes of CountPlus Limited are in accordance with the Corporations Act 2001, including
i.
Giving a true and fair view of its financial position as at 30 June 2021 and of its performance for the financial year ended on
that date; and
ii. Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations
Regulations 2001.
b.
There are reasonable grounds to believe that CountPlus Limited will be able to pay its debts as and when they become due and
payable.
2.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer
and Chief Financial Officer for the financial year ended 30 June 2021.
3.
Note 2 confirms that the consolidated financial statements also comply with International Financial Reporting Standards.
Signed in accordance with a resolution of the Board of Directors.
Ray Kellerman
Chairman
26 August 2021
Sydney
93
COUNTPLUS ANNUAL REPORT 2021
Independent Auditor’s Report
To the members of CountPlus Limited
Level 17, 383 Kent Street
Sydney NSW 2000
Correspondence to:
Locked Bag Q800
QVB Post Office
Sydney NSW 1230
T +61 2 8297 2400
F +61 2 9299 4445
E info.nsw@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of CountPlus Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of CountPlus Limited (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of profit or loss
and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows
for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting
policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance for the year
ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
94
COUNTPLUS ANNUAL REPORT 2021 Independent Auditor’s Report
To the members of CountPlus Limited
Key audit matter
How our audit addressed the key audit matter
Remediation provision (Note 27)
As at 30 June 2021, the Group recorded a remediation
provision of $259,810,000 and a corresponding remediation
receivable. The provision represents the estimated cost of
remediation of current and former clients in respect of advice
issues, including ongoing services charged where no service
was performed by Count Financial. The advice issues
occurred prior to the acquisition of Count Financial by the
Group.
The receivable represents an indemnity deed granted by the
Commonwealth Bank of Australia.
Per AASB 137 Provisions, Contingent Liabilities and
Contingent Assets, a provision should be recognised if an
entity has a present obligation as a result of a past event; it is
probable that an outflow of resources embodying economic
benefits will be required to settle the obligation; and a reliable
estimate can be made.
The provision is based upon estimates in relation to the value
of the ongoing service fees charged, the number of years in
which issues have occurred, the refund rate, the interest
calculation on those fees and the value below which fee
refunds are made without investigation.
This is a key audit matter as the assumptions used in the
determination of remediation costs involves complexity and
significant management judgement and estimation.
Recoverable amount of intangible assets (Note 19)
As at 30 June 2021, the Group’s intangible assets of
$36,514,000 consist of goodwill, acquired client
relationships/advisor networks, brands, IT software and other
intangible assets. No impairment expense has been
recognised during the year.
AASB 136 Impairment of Assets requires that, for the
purposes of impairment testing, goodwill acquired in a
business combination be allocated to each of the Group’s
cash-generating units (CGUs). Each CGU to which goodwill
has been allocated must be tested for impairment annually.
Management has assessed that the group has 13 CGUs, and
has allocated the goodwill and other intangible assets to these
CGUs.
Management has tested the CGUs for impairment by
comparing their carrying amounts with their recoverable
amounts. The recoverable amounts were determined using
value-in-use models.
Our procedures included, amongst others:
• obtaining the Group’s calculation of the provision and
updating our understanding of the methodology used to
calculate the provision;
• evaluating the reasonableness of the key assumptions
used to estimate the provision;
• assessing the validity of the receivable by reviewing the
terms and conditions of the indemnity deed and
subsequent amendments;
• recalculating the provision using management’s
assumptions; and
• evaluating the adequacy of the accounting policy and
disclosures made in the Group’s financial statements in
respect of the remediation provision and receivable.
Our procedures included, amongst others:
• enquiring with management to obtain and document an
understanding of their processes and controls related to the
assessment of impairment, including identification of CGUs
and the calculation of the recoverable amount for each
CGU;
• evaluating the value-in-use models against the
requirements of AASB 136, including consultation with our
valuations experts;
• obtaining management’s value-in-use calculations to:
-
-
-
testing the mathematical accuracy;
evaluating management’s ability to perform
accurate estimates by comparing historical
forecasting to actual results; and
testing forecast cash inflows and outflows to be
derived by the CGUs’ assets;
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COUNTPLUS ANNUAL REPORT 2021
Independent Auditor’s Report
To the members of CountPlus Limited
Key audit matter
How our audit addressed the key audit matter
Recoverable amount of intangible assets (Note 19) cont.
This is a key audit matter due to the judgements and
estimates required in determining the appropriate CGUs and
calculating the recoverable amount.
• reviewing discount rates applied to forecast future cash
flows;
• performing sensitivity analysis on the significant inputs and
assumptions made by management in preparing the
calculation; and
• assessing the adequacy of financial report disclosures.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 30 June 2021, but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: https://www.auasb.gov.au/auditors_responsibilites/ar1_2020.pdf. This description forms part of
our auditor’s report.
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COUNTPLUS ANNUAL REPORT 2021
Independent Auditor’s Report
To the members of CountPlus Limited
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 20 to 29 of the Directors’ report for the year ended 30 June
2021.
In our opinion, the Remuneration Report of CountPlus Limited, for the year ended 30 June 2021 complies with section
300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with Australian Auditing Standards.
Grant Thornton Audit Pty Ltd
Chartered Accountants
S M Thomas
Partner – Audit & Assurance
Sydney, 26 August 2021
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COUNTPLUS ANNUAL REPORT 2021
ASX Additional Information
The shareholder information set out below was applicable as at 31 July 2021.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Colonial Holding Company Ltd
National Nominees Limited
J P Morgan Nominees Australia Pty Limited
HSBC Custody Nominees (Australia) Limited
Mirrabooka Investments Limited
Citicorp Nominees Pty Limited
Mr Barry Martin Lambert
Pacific Custodians Pty Limited (Employee Share Tst A/C)
Santos L Helper Pty Ltd (SBS Van Paassen A/C)
Rowe Heaney Super Fund Pty Ltd (Rowe Heaney Super Fund A/C)
UBS Nominees Pty Ltd
RK Sydney Pty Ltd (RK Family A/C)
Avanteos Investments Limited (7749080 Jonathan A/C)
1
2
3
4
5
6
7
8
9
10
11
12
13
14 Mr Joseph Zanca & Mrs Szerenke Zanca (Zanacorp Super Fund A/C)
15
Harvey Investment Company Pty Ltd (Seastar Investment A/C)
16 Mr Michael Allan Beddoes (Beddoes Practice A/C)
17
18 Mr Barry Martin Lambert
19
20 Mr Raymond John Kellerman & Mrs Ruth Kellerman (The Kellerman S/F A/C)
Alex J Rowe Pty Ltd (Rowe Heaney Family A/C)
Zanacorp Financial Group Pty Ltd
Substantial holders
At the date of this report, the substantial shareholder is:
Colonial Holding Company
98
Listed Ordinary Shares – Fully Paid
Number of Holders
Number of Shares
419
638
291
467
85
1,900
115
239,938
1,692,120
2,333,113
14,208,193
95,749,195
114,222,559
–
Listed Ordinary Shares – Fully Paid
Number of Shares
Percentage
40,945,747
5,460,791
5,043,335
4,521,988
3,450,242
3,438,363
3,300,000
2,612,310
2,100,000
1,700,000
1,389,730
1,200,000
1,162,528
1,000,000
835,561
800,000
800,000
764,729
700,000
600,000
81,825,324
35.85
4.78
4.42
3.96
3.02
3.01
2.89
2.29
1.84
1.49
1.22
1.05
1.02
0.88
0.73
0.70
0.70
0.67
0.61
0.53
71.66
Listed Ordinary Shares – Fully Paid
Number of Shares
Percentage
40,945,747
35.85
COUNTPLUS ANNUAL REPORT 2021 Investors' Information
Share Trading
Shareholders’ Enquiries
CountPlus Limited’s fully paid ordinary shares are listed on
the Australian Securities Exchange (ASX) and are traded under
the code CUP.
Investors seeking information regarding their shareholding or
wishing to change their address, should contact our share registry:
Computershare Investor Services Pty Ltd
Voting rights
At a General Meeting, every member present in person or by proxy
or attorney, or in the case of a corporation by a representative duly
authorised under the seal of that corporation, has one vote on a
show of hands and in the event of a poll, one vote for each fully paid
ordinary share held by the member. Options carry no voting rights.
Address
Telephone
Fax
Level 3, 60 Carrington Street
Sydney NSW 2000
1300 850 505
+61 2 8234 5000
+61 2 8235 8150
Any other enquiries relating to CountPlus Limited can be directed
to CountPlus at:
Postal Address
Telephone
Email
ABN
GPO Box 1453
Sydney NSW 2001
+61 2 8218 8778
info@countplus.com.au
11 126 990 832
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COUNTPLUS ANNUAL REPORT 2021
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