EUROZ LIMITED
2 0 1 8
ANNUAL REPORT
Euroz Limited is a diversified
financial services company
EUROZ LIMITED ANNUAL REPORT 2018
1
CORPORATE DIRECTORY
REGISTERED OFFICE
Level 18 Alluvion
58 Mounts Bay Road
PERTH WA 6000
Telephone:
Facsimile:
Email:
Website:
(08) 9488 1400
(08) 9488 1477
info@euroz.com
www.euroz.com
SHARE REGISTRY
Computershare Investor Services Pty Ltd
Level 11
172 St Georges Terrace
PERTH WA 6000
Telephone:
1300 787 575
AUDITOR
PKF Chartered Accountants
Level 4
35 Havelock Street
WEST PERTH WA 6005
Telephone: 08 9426 8999
BANKERS
Westpac Banking Corporation
109 St Georges Terrace
PERTH WA 6000
BOARD OF DIRECTORS
Andrew McKenzie
Executive Chairman
Jay Hughes
Executive Director
Greg Chessell
Executive Director
Russell Kane
Executive Director
Simon Yeo
Executive Director
Anthony Brittain
Executive Director
Robert Black
Executive Director
COMPANY SECRETARY
Anthony Hewett
2
EUROZ LIMITED ANNUAL REPORT 2018
CONTENTS
PAGE
CORPORATE DIRECTORY
EXECUTIVE CHAIRMAN’S REPORT
EUROZ LIMITED BOARD OF DIRECTORS
EUROZ GROUP STRUCTURE
EUROZ SECURITIES LIMITED – MANAGING DIRECTOR’S REPORT
CORPORATE TRANSACTIONS
EUROZ SECURITIES LIMITED – DIRECTOR PROFILES
ENTRUST PRIVATE WEALTH MANAGEMENT
WESTOZ FUNDS MANAGEMENT
PRODIGY INVESTMENT PARTNERS
FLINDERS INVESTMENT PARTNERS
DALTON STREET CAPITAL
EUROZ CHARITABLE FOUNDATION
FINANCIAL REPORT
EUROZ LIMITED CONTACT DETAILS
2
4
8
11
12
13
14
17
18
19
20
20
21
22
76
FINANCIAL HIGHLIGHTS
GROUP FUM
MARKET CAPITALISATION
DIVIDENDS 11 CPS
$1.46b1
$201m1
52%
$211m
FULLY FRANKED
DIVIDENDS IN 18 YEARS
CASH & INVESTMENTS
INCREASING
$139.4m1
NET PROFIT AFTER TAX
$31.3m2
1. As at 30 June 2018
2. Attributable to members
EUROZ LIMITED ANNUAL REPORT 2018
3
EXECUTIVE
CHAIRMAN’S
REPORT
Euroz Limited reported a significant improvement in
profitability over the past year with a net profit after
tax (attributable to members) of $31.3 million for the
financial year ended 30 June 2018, representing a 61%
uplift on the previous years’ $19.4 million result.
The Directors declared a final fully franked dividend of 9.25 cents
per share (cps) which combined with the interim dividend of 1.75
cps brought the full year dividend to 11 cps (previous year 7.25
cps). This is a 52% increase on the previous full year dividend.
The group experienced broadly similar trading conditions to the
previous year with improved performance fees being the driver
for increased profitability and dividends.
An improvement in the value of our various investments has seen
our total cash and investments increase to $139.4 million (before
final dividend payment).
Group Funds Under Management (FUM) has increased by 21.3%
to $1.46 billion from $1.2 billion last year and we will continue to
focus on building these recurring revenue streams.
We provide specific business updates as follows:
Euroz Securities
Solid commodity prices and an improving Western Australian
economy have driven another strong contribution from our
securities business with brokerage revenues up slightly from
the previous year. A strong second half equity capital market
contribution, with approximately $837 million of capital raisings
completed this financial year, translated to similar overall
corporate finance revenues to the previous year.
Our strategy to increase recurring revenues in our Securities
business was re-affirmed with FUM increasing by 27% to $301m
this financial year.
Entrust Private Wealth Management
Entrust Private Wealth Management Pty Ltd (Entrust) was
acquired in July 2015 to provide a wealth management platform
for all of our businesses. Entrust has reported a pleasing
improvement in profitability versus the previous year driven by
cost savings and FUM growth.
For perspective, we are pleased to note that Entrust has grown
FUM organically from $565 million at acquisition to $801 million
at 30 June 2018 (42% growth over 3 years). When combined with
our Euroz Securities FUM of $301 million this creates a business
currently managing $1.1 billion for high net worth clients.
Entrust will continue to grow organically whilst we also attempt
to attract new advisers and pursue smaller bolt on acquisitions.
Westoz Funds Management
The Listed Investment Companies Westoz Investment Company
Limited (Westoz) and Ozgrowth Limited (Ozgrowth) are strongly
connected to their investment universe of Western Australian
connected companies.
Strong investment performance achieved from both Westoz
and Ozgrowth with respective investment performance of 39.1%
and 30.7% for the financial year. These excellent returns enabled
both funds to provide substantial end of year performance fee
income to the manager. Over the past 13 years Westoz and
Ozgrowth have returned $147 million in fully franked dividends to
their shareholders.
Our significant long term investments in Westoz and Ozgrowth
will continue to have a material effect on our reported
profitability. During the past financial year the higher share prices
of Westoz and Ozgrowth contributed $7.4 million after tax to our
Group profitability (on a non-cash basis).
4
EUROZ LIMITED ANNUAL REPORT 2018
Euroz Limited reports a $31.3m
(61% uplift) net profit after tax
attributable to members.
Prodigy Investment Partners
Summary
Euroz Limited has pursued a very deliberate and incremental
diversification strategy over the past 4 years which combined
with a positive resources market has delivered an excellent result
to all shareholders this year. Your Directors are very pleased this
broad contribution from our various businesses has enabled us to
record the best full year dividend since 2011.
This result is an accumulation of the very significant efforts of our
greatest asset, our staff, who as our largest shareholders remain
committed to growing this proudly Western Australian diversified
financial services company.
Euroz Limited has now paid $211 million in fully franked dividends
to shareholders across our 18 year history.
ANDREW MCKENZIE
Executive Chairman
Prodigy Investment Partners Limited (Prodigy) was established in
July 2014 as a platform to create a quality, multi boutique funds
management business. Our two existing boutique partnerships
have grown to three with the post balance date announcement
of a partnership with Equus Point Capital Pty Ltd (Equus). We
believe this Australian focussed market neutral strategy will find
good support in the growing alternative investment segment in
which we are now developing a number of strong brands.
Our two existing partnerships report the following progress for
the financial year:
• Flinders Investment Partners
Strong gross investment performance of 34.2% for the financial
year and performance since inception of 18.3% p.a. strengthens
our commitment to this partnership. Current FUM of $18 million
and as Flinders approach a solid 3 year track record we are
pleased to see increased investor engagement and believe the
market will better reward their strong investment returns with
improved inflows in the coming 12 months.
• Dalton Street Capital
Solid gross investment performance of 18.3% for the financial
year and performance since inception of 14.8% p.a. Strong
support from early adopter research and platform providers
continue to underpin consistent monthly FUM growth to $89
million at 30 June 2018 and we are excited about the FUM
growth prospects for this two year old partnership.
On 16 August 2018 Euroz announced that it had entered into a
new partnership with Equus through the Prodigy joint venture.
Equus is a market neutral strategy focusing on Australian equities.
We believe it is the first of its kind in the Australian market. Equus
will target a return of 7.5%-12.5% p.a. above benchmark using
a systematic approach to harvest both positive and negative
momentum in a risk controlled environment. The Equus team led
by Co-Founders and Portfolio Managers Rob Stewart and Toby
Masters have been successfully managing this specific strategy
for the last 18 months.
EUROZ LIMITED ANNUAL REPORT 2018
5
EUROZ LIMITED PROFIT BEFORE TAX & NET PROFIT AFTER TAX
60
50
40
30
20
10
0
-10
-20
n
o
i
l
l
i
m
$
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
Profit before tax
Net profit after tax attributable to members
Year
EUROZ LIMITED DIVIDEND HISTORY
e
r
a
h
s
r
e
p
s
t
n
e
c
30
25
20
15
10
5
0
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
1H Dividend per share
2H Dividend per share
Year
6
EUROZ LIMITED ANNUAL REPORT 2018
e
r
a
h
s
r
e
p
s
t
n
e
c
)
m
$
A
(
M
U
F
EUROZ LIMITED NTA PER SHARE
100
80
60
40
20
0
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
Year
EUROZ GROUP FUNDS UNDER MANAGEMENT (FUM)
1,500
1,250
1,000
Total $923m
Total $962m
Total $1,403m
Total $1,461m
Total $1,143m
Total $1,205m
750
500
250
Funds
Management
($359m)
Entrust
Wealth
Management
($801m)
Euroz Securities
Wealth Management
($301m)
31/12/15
30/6/16
31/12/16
30/6/17
31/12/17
30/6/18
Note:
01/07/2017 as no longer a corporate authorised representative.
PFM ($24m) Precision Funds Managment removed from
Year
WIC ($171m)
Dalton Street ($89m)
OZG ($81m)
Entrust ($801m)
Flinders ($18m)
Euroz ($301m)
EUROZ LIMITED ANNUAL REPORT 2018
7
BOARD OF DIRECTORS
Euroz Limited Directors Profiles
Andrew McKenzie
Executive Chairman
Jay Hughes
Executive Director
Russell Kane
Executive Director
Andrew is Executive Chairman of Euroz
Limited and Euroz Securities Limited
and is an Executive Director of Westoz
Funds Management, Dalton Street Capital,
Prodigy Investment Partners, Flinders
Investment Partners and Equus Point
Capital. Andrew is a former board member
of the Stockbrokers and Financial Advisers
Association of Australia (SAFAA). He is a
board member of the PLC Foundation and
a PLC Council member. Andrew holds a
Bachelor of Economics from the University
of Western Australia (UWA) and is an
individual member (MSAFAA) of SAFAA.
Jay has worked in stockbroking since 1986,
starting his career on the trading floor.
He is Non-Executive Chairman of Westoz
Investment Company and Ozgrowth
Limited and an Executive Director of
Westoz Funds Management, Euroz
Securities Limited and Prodigy Investment
Partners. He is an Institutional Adviser
specialising in promoting Australian
stocks to international clients. Jay holds a
Graduate Diploma in Applied Finance and
Investment from the Financial Services
Institute of Australasia (FINSIA). He was
recognised as an affiliate of the ASX in
December 2000 and is an individual
member (MSAFAA) of SAFAA.
Russell has worked in the stockbroking
industry since 1994 and joined Euroz
Securities in 2001. Russell is an Executive
Director of Euroz Limited and Euroz
Securities Limited. He holds a Bachelor of
Business from Edith Cowan University and
is responsible for servicing both domestic
institutions and high net worth clients,
with a particular emphasis on WA based
resources and industrials stocks.
Simon Yeo
Executive Director
Rob Black
Executive Director
Greg Chessell
Executive Director
Simon has worked in the Stockbroking
industry since 1993. In November 2000
he established the Private Client Division
of Euroz Securities Limited before
moving to a specialised role within our
Institutional Sales division in 2013. Simon
is an Executive Director of Euroz Limited
and Euroz Securities Limited. Simon holds
a Bachelor of Commerce from UWA and
was previously a chartered accountant.
He is also on the board of The Australian
Chamber Orchestra (ACO). Simon is
the Chairman of the Audit and Risk
Committee.
Rob has been working in the stockbroking
industry since 1995 and has spent time
based in Sydney, Melbourne and London.
Rob is the Managing Director of Euroz
Securities and Head of our Institutional
Sales division and is responsible for
servicing domestic and international
institutions. Rob is a Director of Entrust
Private Wealth Management Pty Ltd.
Rob holds a Bachelor of Business in
Finance and Accounting from Edith
Cowan University and is a Graduate of
the Australian Institute of Company
Directors (AICD).
Greg is a Director of Corporate at Euroz
Securities Limited. He recently transitioned
from the role of Analyst and Head of
Research at Euroz, a position he held since
Euroz Securities commenced operations.
Greg worked as geologist in WA for 10
years prior to entering the stockbroking
industry in 1995. Greg is an Executive
Director of Euroz Limited and Euroz
Securities Limited. Greg holds a Bachelor
of Applied Science in Geology from the
University of Technology, Sydney (UTS)
and a Graduate Diploma in Business from
Curtin University. Greg is a member of the
Audit and Risk Committee.
EUROZ LIMITED ANNUAL REPORT 2018
8
Anthony Brittain
Executive Director
Anthony is the Chief Operating and
Financial Officer and an Executive Director
of Euroz Limited, Euroz Securities Limited,
Entrust Private Wealth Management,
Prodigy Investment Partners, Flinders
Investment Partners, and Dalton Street
Capital and Equus Point Capital. Prior to
joining Euroz, Anthony spent 7 years with
a WA based stockbroker. Anthony started
his career with KPMG (and antecedent
firm Touche Ross) with transfers to Guam
and Singapore. He then worked in London
and Singapore for 7 years with a UK fund
manager. Anthony holds a Bachelor of
Commerce from UWA, is a member of
Chartered Accountants Australia and New
Zealand (CA), holds a Graduate Diploma
in Applied Finance and Investment from
FINSIA, is a Graduate of AICD and is an
individual member (MSAFAA) of SAFAA.
Anthony is a member of the Audit and
Risk Committee.
EUROZ LIMITED ANNUAL REPORT 2018
9
10
EUROZ LIMITED ANNUAL REPORT 2018
EUROZ GROUP STRUCTURE
EUROZ LIMITED
ASX CODE: EZL
STOCKBROKING, CORPORATE FINANCE
AND WEALTH MANAGEMENT
FUNDS
MANAGEMENT
100%
100%
80%
100%
Euroz Securities
Entrust Private
Wealth
Management
Prodigy Investment
Partners
Westoz Funds
Management
Manager
Dalton Street
Capital
Flinders
Investment
Partners
Equus Point
Capital
Ozgrowth Limited
Westoz Investment
Company Limited
ASX CODE: OZG
ASX CODE: WIC
DALTON STREET CAPITAL
post balance
date 16/8/18
(40.58% Equity Stake)
(27.3% Equity Stake)
EUROZ LIMITED ANNUAL REPORT 2018
11
EUROZ SECURITIES LIMITED
MANAGING
DIRECTOR’S
REPORT
An 18 year history of
providing Research, Private
MANAGING
Client advice, Institutional
Sales and Corporate
DIRECTOR’S
Finance services
REPORT
Euroz Securities Limited (ESL) provides Stockbroking,
Corporate Finance and wealth management services
and has an 18 year history of providing Research,
Private Client advice, Institutional Sales and Corporate
Finance services
During the 2017/18 Financial Year, ESL continued to leverage an
improved Western Australian economic environment, along with
sustained strength in commodity prices and mining and related
services sectors, to report a Net Profit after Tax to the group of
approximately $11.8 million, significantly higher than the previous
year’s contribution of $9.2 million.
Brokerage levels across both our Institutional and Private
Client desks improved over the period, as did our Funds under
Management (FUM) growth within ESL which finished the period
at $301 million.
Likewise, we saw a continued positive level of corporate
transactions undertaken during the year, with approximately
$837 million of new equity raised for corporate clients over the
period, similar to last year’s raisings totalling $861 million
This solid result for the year validated our long term strategy,
to leverage deal flow from WA related companies through high
quality research, dealing and corporate finance services.
To complement this strategy we are fortunate to have the
services of a number of highly skilled investment professionals,
most of whom have been long standing members of our team
and are themselves significant shareholders of Euroz Limited.
This alignment will continue to deliver results for shareholders
over future years.
ROB BLACK
Managing Director
12
EUROZ LIMITED ANNUAL REPORT 2018
CORPORATE TRANSACTIONS
Supporting our clients on major transactions during 2018.
Placement
$7.7 million
Joint Lead Manager,
Bookrunner &
Underwriter
Euroz Securities Ltd
Jul 17, Nov 17
Placement
$20 million
Joint Lead Manager
Euroz Securities Ltd
ANREOs
$135 million
Joint Lead Manager &
Underwriter
Aug 17
Euroz Securities Ltd
Aug 17
Placement
$31.8 million
Lead Manager, Global
Co-Ordinator & Sole
Bookrunner
Euroz Securities Ltd
Sep 17
Placement
$11 million
Sole Lead Manager
Euroz Securities Ltd
Placement
$15 million
Joint Lead Manager
Euroz Securities Ltd
Oct 17
Oct 17
Placement
$3.6 million
Joint Lead Manager
Euroz Securities Ltd
Placement
$29 million
Sole Lead Manager
Euroz Securities Ltd
Dec 17
Dec 17, Mar 18
Renounceable
Entitlement Offer
$20.9 million
Sole Lead Manager &
Underwriter
Euroz Securities Ltd
Mar 18
Placement & ANREO
$331 million
Joint Lead Manager &
Underwriter
Placement
$3.5 million
Sole Lead Manager
Euroz Securities Ltd
Placement
$39.2 million
Sole Lead Manager
Euroz Securities Ltd
Euroz Securities Ltd
Mar 18
Mar 18
Mar 18
Placement
$31 million
Sole Lead Manager
Euroz Securities Ltd
Placement
$35 million
Joint Lead Manager
Euroz Securities Ltd
Placement
$16 million
Sole Lead Manager
Euroz Securities Ltd
Placement
$7 million
Sole Lead Manager
Euroz Securities Ltd
Apr 18
May 18
May 18
Jun 18
Placement &
Rights Issue
$11.3 million
Sole Lead Manager &
Underwriter
Euroz Securities Ltd
Jun 18
Placement
$11 million
Joint Lead Manager
Euroz Securities Ltd
Jun 18
Placement
$3.75 million
Sole Lead Manager
Euroz Securities Ltd
Placement
$33.2 million
Sole Lead Manager
Euroz Securities Ltd
Placement
$16.5 million
Sole Lead Manager
Euroz Securities Ltd
Nov 17
Nov 17
Apr 18
Placement
$20 million
Sole Lead Manager &
Underwriter
Euroz Securities Ltd
Apr 18
Supporting our clients on major
transactions during FY18
EUROZ LIMITED ANNUAL REPORT 2018
13
EUROZ SECURITIES LIMITED
Directors Profiles
Andrew Clayton
Executive Director
Ben Laird
Executive Director
Brian Bates
Executive Director
Andrew is a Research Analyst specialising
in resource companies. He has worked
in the stockbroking industry since 1994.
Andrew holds a Bachelor of Science
(Hons) in Geology from Melbourne
University as well as a Diploma in Finance
from FINSIA.
Ben has worked in the stockbroking
industry since 2002. He is a Research
Analyst responsible for covering industrial
companies. He holds a Bachelor of
Science, a Post Graduate Diploma in
Finance from FINSIA and a Chartered
Financial Analyst (CFA) designation.
Brian has over 20 years of experience
in stockbroking, investment and
superannuation management. Brian holds
a Bachelor of Commerce from UWA, and
was previously a chartered accountant
before moving in to investment
management. Brian is a senior member
of the Private Client Division and offers
a comprehensive wealth management
service to high net worth individuals.
Brian Beresford
Executive Director
Ben Statham
Executive Director
Cameron Murray
Executive Director
Brian is the Head of our Corporate Finance
Division. Prior to joining Euroz in 2011,
Brian was a Partner at PwC where he led
the Corporate Finance and M&A practice
in Western Australia. He has provided
corporate advice to clients across the
resources, mining services, engineering
and technology sectors for over 20 years.
Brian holds a Masters in Finance from
London Business School, a Bachelor of
Commerce and Bachelor of Laws from
UWA.
Ben completed a Bachelor of Economics
from UWA before commencing
employment with Macquarie Bank in 2000
where he left for Euroz in 2009 as one of
their top advisors. Ben is a senior member
of our Private Client Division and services
high net worth families. Ben holds a
Graduate Diploma in Applied Finance and
Investment from FINSIA.
Cameron has 20 years-experience in
financial services and is a senior member
of our Private Client Division. Having
graduated from Curtin University with
a Bachelor of Commerce majoring in
Accounting and Finance he has been
at Euroz since 2003. He has continued
his studies through FINSIA and has
completed a Graduate Diploma in Applied
Finance and Investment. Cameron
is an accredited Designated Trading
Representative (DTR).
14
EUROZ LIMITED ANNUAL REPORT 2018
Chris Webster
Executive Director
David Riley
Executive Director
Gavin Allen
Executive Director
Chris is the Head of our Private Client
Division. Chris has worked in financial
services since 2003 holding a variety of
positions in sales, operations, risk and
compliance both in Perth and London.
Chris is a Director of Entrust Private
Wealth Management and the Euroz
Charitable Foundation. Chris holds a
Bachelor of Commerce from UWA, a
Graduate Diploma of Applied Finance and
a Graduate Diploma of Applied Corporate
Governance. Chris is an individual member
(MSAFAA) of SAFAA.
David has worked in the Euroz Corporate
Finance team since 2012. Prior to joining
Euroz, David was a senior consultant in the
Transaction Tax team at Ernst & Young.
David is a member of the Chartered
Accountants Australia and New Zealand
(CA) and holds a Graduate Diploma
of Applied Finance through Kaplan
Professional Education. David is currently
completing a Graduate Diploma of Mineral
Exploration Geoscience from the Curtin
University School of Mines and also holds
a Bachelor of Commerce/Science from the
University of Western Australia.
Gavin is a Research Analyst with 14
years experience specialising in detailed
analysis and research of mid cap industrial
companies. Prior to joining Euroz, Gavin
held a senior position in the Corporate
Finance division of a major accounting
firm, specialising in the financial analysis
of mergers and acquisitions. Gavin holds
a Bachelor of Commerce, is a member of
the Chartered Accountants Australia and
New Zealand (CA) and holds a Chartered
Financial Analyst (CFA) designation.
James Mackie
Executive Director
Jon Bishop
Executive Director
Lucas Robinson
Executive Director
James has been working in the
stockbroking industry since 1998.
James services high net worth investors
and is a senior member of our Private
Client Division. He holds a Bachelor of
Commerce from Curtin University and a
Graduate Diploma in Applied Finance and
Investment from FINSIA.
Jon is a Research Analyst focused on
both the mining and oil and gas sectors.
He has more than 10 years technical
and commercial experience within the
petroleum and minerals industries and a
further 12 years experience in the financial
services industry. Jon holds a Bachelor
of Science (Hons) in Geology from UWA,
as well as a Graduate Diploma in Applied
Finance and Investment from FINSIA.
Lucas has been advising in the
stockbroking industry since 1998. Lucas
is a senior member of our Private Client
Division and manages a variety of clients
including high net worth investors. He
holds a Bachelor of Commerce from
UWA with a double major in Finance and
Marketing and a minor in Business Law.
EUROZ LIMITED ANNUAL REPORT 2018
15
EUROZ SECURITIES LIMITED
Directors Profiles (Continued)
Nick McGlew
Executive Director
Peter Schwarzbach
Executive Director
Paul Cooper
Executive Director
Nick has over 20 years’ experience in
mergers, acquisitions, equity raisings,
corporate and commercial law and
corporate finance with major firms in
Australia and the United States. He holds
a Bachelor of Economics from UWA, a
Bachelor of Laws from Bond University
(First Class Honours) and a Master of
Laws from New York University. Nick is a
senior member of our Corporate Finance
Division.
Peter has been working in the
stockbroking industry since 2006
and is a member of our Institutional
Sales Division. He holds a Bachelor of
Commerce from UWA and has completed
a Graduate Diploma in Applied Finance
and Investment from FINSIA. Peter is also
a member of the Chartered Accountants
Australia and New Zealand (CA) and prior
to joining Euroz was a senior accountant
at a Perth chartered accounting firm.
Paul has background in both stockbroking
and investment banking. Prior to equities
dealing he spent time based in Sydney
and Singapore providing structured debt
financing to resource companies. Paul
holds a Bachelor of Commerce, as well
as furthering his education through the
Chartered Financial Analyst program and
Chinese language studies.
Ryan Stewart
Executive Director
Tim Bunney
Executive Director
Tim Lyons
Executive Director
Ryan has worked in the stockbroking
industry for over 18 years and is a senior
member of our Private Client Division.
He started his career in Finance at
BankWest as a member of the Equipment
Finance Division servicing predominantly
resource companies. His first stockbroking
role started in 2000 at D J Carmichael
and he commenced at Euroz in 2003. His
role includes servicing his high net worth
private client base and is also a Director
of the Euroz Charitable Foundation.
Tim has been working in the stockbroking
industry since 2010 and is a member
of our Institutional Sales Division. He
holds a Bachelor of Commerce from
Curtin University majoring in finance and
management. He is currently undertaking
post graduate study in geology and
finance. Tim is a member of SAFAA
institutional broking committee.
Tim has worked in the stockbroking
industry for over 25 years and is a senior
member of our Private Client Division.
Tim was previously Executive Chairman
of Blackswan Equities where his role
included maintaining the firm’s corporate
relationships and servicing his high net
worth private client base. Tim was also a
partner at Porter Western Limited until it
was acquired by Macquarie Bank.
16
EUROZ LIMITED ANNUAL REPORT 2018
WEALTH MANAGEMENT
Entrust Private Wealth Management
Entrust Private Wealth Management Pty Ltd (Entrust) commenced
in 2002 and provides its clients with financial planning and tailored
investment advice. Entrust has client Funds Under Management
(FUM) of $801m at 30 June 2018.
Entrust was acquired by Euroz Limited
in July 2015. Entrust employs 20 staff,
including 10 advisers, 2 para-planners and a
portfolio administration team.
During the 2018 financial year (FY18)
the management team focus was on
growing the FUM and we are pleased
to report growth in FUM of 12.3% for
the financial year.
Through a combination of revenue growth
and strong focus on cost reduction, Entrust
reported a significant improvement in
profitability versus the prior year.
We have been progressing the roll out of
our private wealth offering across Euroz
Securities Limited (Euroz Securities),
progressing organic growth opportunities
in the High Net Worth (HNW), Not-for-
Profit and Self-Managed Super Fund
(SMSF) sector. Entrust’s primary focus is
to continue organic growth opportunities
in the HNW and Not-for-Profit sector and
leverage the existing capability in the SMSF
sector, the fastest growing component of
the Australian superannuation system.
We continue to pursue bolt on acquisitions
and have evaluated numerous adviser
acquisition opportunities during the period
but sellers’ price expectations remain too
high in our view.
Directors Profiles
Andrew Fry
Executive Chairman
Brad Gordon
Director
Rowan Jones
Director
Andrew joined Entrust Private Wealth
Management Pty Ltd in January 2003
and served as Managing Director from
July 2014 until his appointment to
Executive Chairman in December 2017.
He holds a Bachelor of Commerce from
Murdoch University and was admitted as
a Chartered Accountant by the Chartered
Accountants Australia and New Zealand
(CA) in 1996.
Brad joined Entrust Private Wealth
Management Pty Ltd as a Senior
Investment Adviser in January 2003 and
was appointed an Executive Director in
November of that year. He has almost
30 years experience in the financial
services industry, in financial planning,
stockbroking and trustee services. Brad is
a Senior Associate of FINSIA, a member
of the Financial Planning Association
(DipFP FPA) and also a member of AICD.
Brad is also a recognised Self-Managed
Superannuation Fund Specialist and
a tax (financial) adviser under the Tax
Practitioners Board.
Rowan joined Entrust Private Wealth
Management Pty Ltd in January 2008
and was appointed an Executive Director
in September 2016. He holds a Bachelor
of Commerce from Curtin University, a
Graduate Diploma of Applied Finance and
Investment from FINSIA and he is a Self
Managed Superannuation Fund Specialist
adviser through the SMSF Association.
Prior to joining Entrust, Rowan spent ten
years as a professional sportsperson in
the AFL with the West Coast Eagles
Football Club.
EUROZ LIMITED ANNUAL REPORT 2018
17
FUNDS MANAGEMENT
Westoz Funds Management
Westoz Funds Management Pty Ltd (WFM) is responsible for $252 million
of funds under management at 30 June 2018 (2017: $202 million).
It manages funds under mandate from
two listed investment companies; Westoz
Investment Company Limited (WIC)
and Ozgrowth Limited (OZG). WIC
commenced its investment activities in
May 2005, with OZG commencing in
January 2008. Both investment mandates
focus on the generation of the target level
of returns from investment in small to
mid-cap ASX listed securities, generally
with a connection to Western Australia.
Both portfolio’s have produced returns
in excess of comparable equity
benchmarks with investment
performance of 39.1% (WIC) and
30.7% (OZG) for the financial year.
WIC and OZG have paid $147 million in
dividends to shareholders since inception.
Directors Profiles
Philip Rees
Executive Director
Dermot Woods
Executive Director
In August 2018 Mr Philip Rees transitioned
to a Non-Executive Director role. Prior
to this, Mr Philip Rees was an Executive
Director of Westoz Funds Management
Pty Ltd and was responsible for the
operation and development of the
manager’s business. Mr Rees has worked
in a range of roles focused on Australian
investment markets for the last 30
years. He has previously managed large
institutional investment portfolios and
developed several early stage investment
opportunities until he joined Westoz in
April 2005. Mr Rees remains actively
engaged within WFM and is on the
Investment Committee.
Mr Dermot Woods is an Executive Director
of Westoz Funds Management Pty Ltd
and oversees the construction of its
investment portfolios.
Mr Woods joined Westoz Funds
Management Pty Ltd in 2007. He has
previously worked as an industrial analyst
for Euroz Securities Limited and prior to
this role, as a fund manager specialising in
European equities.
18
EUROZ LIMITED ANNUAL REPORT 2018
FUNDS MANAGEMENT
Prodigy Investment Partners Limited
Prodigy Investment Partners Limited (Prodigy) is a multi-boutique
investment management business. Prodigy is an 80/20 partnership
between the Euroz Limited and Mr Stephen Tucker.
Prodigy looks to partner with talented
investment management executives in an
innovative partnership business model.
Prodigy’s focus is on creating boutiques
that employ limited capacity, high value
adding strategies. We believe these
strategies are increasingly attractive to
the market, and with limited capacity,
allow us to include a performance based
component in the pricing.
During the 2018 financial year, Prodigy
had two partner boutique managers:
Flinders Investment Partners Pty Ltd
(Flinders) and Dalton Street Capital Pty
Ltd (Dalton Street).
Flinders is a specialist Small Companies
investment manager, with principals Dr
Andrew Mouchacca, Richard Macdougall
and Naheed Rahman. Significant progress
has been made in positioning Flinders to
gain market share in specific retail and
institutional markets over the past year.
Dalton Street is a specialist Absolute
Return investment manager, established
in June 2016. Dalton Street Capital
is overseen by its principal Portfolio
Manager, Alan Sheen, who was previously
at Credit Suisse. Dalton Street’s approach
is predominantly quantitatively based.
Alan has successfully run this strategy for
over 10 years, delivering strong absolute
returns, with low correlation to traditional
asset classes. We believe that this is an
attractive strategy in the high net wealth
and retiree markets.
On 16 August 2018 Prodigy and Euroz
announced that they had entered into
a new partnership with Equus Point
Capital Pty Ltd (Equus) through the
Prodigy joint venture. Equus is a market
neutral strategy focusing on Australian
equities. We believe it is the first of its
kind in the Australian market. Equus
will target a return of 7.5%-12.5% p.a.
above benchmark using a systematic
approach to harvest both positive and
negative momentum in a risk controlled
environment. The Equus team led by
Co-Founders and Portfolio Managers
Rob Stewart and Toby Masters have
been successfully managing this specific
strategy for the last 18 months.
Stephen Tucker
Executive Chairman
Steve has over 25 years’ experience in
financial services. Steve started his career
with MLC, worked in superannuation,
ran MLC’s advice networks, led MLC
Investments and finally took over as
CEO in 2004. Steve was appointed to
the Group Executive of NAB in 2009,
responsible for MLC and NAB Wealth.
Most recently Steve founded Prodigy,
where he is Executive Chairman. Steve
is also Independent Chairman of Koda
Capital and a Non–Executive Director of
The Banking and Finance oath.
Lewis Bearman
Partner and Chief Operating Officer
Aman Kashyap
Wholesale Sales Director
Guy Ballard
Director Distribution
Lewis brings over 30 years of financial
services experience. He held senior roles
at Perennial Investment Partners (2003
to 2014), including Chief Operating
Officer and Chief Executive Officer. Lewis
spent 17 years with County Investment
Management (later becoming INVESCO).
Lewis has held senior positions in
operations, funds management, and
various other teams. Lewis joined Prodigy
in 2015 as Chief Operating Officer and is a
Director of Prodigy.
Aman brings over 17 years of financial
services experience specialising in asset
management sales. During this time, he
has held senior positions in distribution
at Ophir Asset Management, NAB
Asset Management and ANZ Wealth
where his key focus was developing and
executing the sales strategy for asset
management in the institutional, HNW and
retail investment markets. Aman joined
Prodigy in early 2017 as Wholesale Sales
Director and is responsible for fund raising
efforts in the Institutional, Private Wealth
and Family Office markets for Prodigy
boutique partners.
Guy has worked in financial services for
over 17 years. In this time he held senior
distribution roles with both BT Financial
Group (2001 to 2005) and MLC (2006 to
2016) where his key focus was developing
and executing the sales strategy for
the asset management, platform and
margin lending businesses targeting the
Independent Financial Advice market.
Guy joined Prodigy in 2016 as Director of
Distribution and is responsible for funds
under management growth across our
boutiques.
EUROZ LIMITED ANNUAL REPORT 2018
19
FUNDS MANAGEMENT
Flinders Investment Partners Pty Ltd
Andrew Mouchacca
Partner and Portfolio Manager
Richard Macdougall
Partner and Portfolio Manager
Andrew began his career in investment
management in 1999. Before establishing
Flinders Investment Partners Pty Ltd,
Andrew was Senior Investment Manager
with the institutional focused fund
manager Contango Asset Partners (1999
to 2014). He was the Portfolio Manager of
the Small Companies Fund (2009 to 2014)
and specialised in the analytical coverage
of a range of sectors. His analytical
experience has focused on the emerging
companies through his involvement in
dedicated products in both the small and
microcap universe.
Dalton Street Capital Pty Ltd
Richard began his career in equity markets
in 1985. Before establishing Flinders
Investment Partners Pty Ltd, Richard
was a Partner and Portfolio Manager
with the Australian Equities boutique
Perennial Growth (2004 to 2015). Prior
to this, Richard was a founding executive
of Contango Asset Management and
a Director of Salomon Smith Barney
Australia. He has spent time offshore
including roles as Head of Research
at ANZ Securities New Zealand and
Managing Director of ANZ Securities UK.
Naheed Rahman
Partner and Deputy
Portfolio Manager
Naheed began his career in investment
management in 2006. Prior to joining
Flinders Investment Partners Pty Ltd,
Naheed was an Investment Analyst at
Contango Asset Management for over
seven years, working closely with Andrew
Mouchacca, where he covered several
sectors primarily with an emerging
companies focus. He began his career at
Warakirri Asset Management as a
Portfolio Analyst, conducting fund
manager research as well as the dealing
of securities.
Alan Sheen
Partner and Portfolio Manager
Nick Selvaratnam
Director
Alan is a co-founder of Dalton Street
Capital Pty Ltd. Alan was previously Head
of Proprietary Trading for Credit Suisse
Australia managing systematic investing
and trading across the Asia Pacific region.
Prior to this Alan’s roles included Portfolio
Manager at AMP Capital Investors, Chief
Investment Officer at Challenger Ltd and
Chief Investment Officer and Managing
Director at Austock Asset Management.
In these roles Alan has been responsible
for managing very large portfolios and
businesses. Alan commenced trading
equities, futures and options in 1996.
Nick is a co-founder of Dalton Street
Capital Pty Ltd. Nick was previously
Managing Director and Head of Equities,
most recently with investment bank
Credit Suisse. Nick has over 27 years’
experience in the investment banking field
- directly participating in, and successfully
managing, top-tier teams across equities
research, sales & trading, derivatives,
prime services and equity capital markets.
Nick’s experience prior to investment
banking includes 8 years as a Chartered
Accountant in Australia and the UK. He
graduated with an Honours degree in Civil
Engineering.
20
EUROZ LIMITED ANNUAL REPORT 2018
EUROZ CHARITABLE FOUNDATION
Euroz are proudly West Australian focused and
believe we have an obligation to give back to Western
Australian charities in need.
In 2006, the Euroz Charitable Foundation was formed in a Private
Ancillary Fund (PAF) structure through which Euroz could make
donations, invest these funds and make distributions to worthy
charities and contribute to the broader community.
The businesses within Euroz and many of our staff members have
made consistent donations to the Foundation.
The funds of the Foundation continue to contribute and make
a difference to Western Australian charities. During the past 12
years, the Euroz Charitable Foundation has donated in excess of
$1,208,950 to a broad range of charities in Western Australia. In
addition to financial support, employees of the Euroz Group are
encouraged to volunteer their time to charities in and around their
communities.
The Euroz Charitable Foundation has been delighted to support
the following charities, amongst many others over the past years:
EUROZ LIMITED ANNUAL REPORT 2018
21
2018
FINANCIAL
REPORT
22
EUROZ LIMITED ANNUAL REPORT 2018
CONTENTS
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
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 FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
SHAREHOLDER INFORMATION
PAGE
24
38
39
40
41
42
43
70
71
75
EUROZ LIMITED ANNUAL REPORT 2018
23
Directors’ Report
For the year ended 30 June 2018
The Directors present their report on the consolidated group consisting of Euroz Limited and the entities it controlled at the end of, or
during the year ended 30 June 2018.
1.
DIRECTORS
The following persons were Directors of Euroz Limited (Euroz) at any time during or since the end of the financial year and up to
the date of this report:
EXECUTIVE CHAIRMAN
Andrew McKenzie
EXECUTIVE DIRECTORS
Jay Hughes
Greg Chessell
Russell Kane
Simon Yeo
Anthony Brittain
Robert Black (appointed 1 August 2017)
Doug Young (retired 1 July 2017)
2. COMPANY SECRETARY
Anthony Hewett continues in his role as Company Secretary. Mr Hewett holds a Master of Business Law, a Graduate Diploma
in Applied Corporate Governance and is a Fellow of both the Institute of Chartered Secretaries and Administrators and the
Governance Institute of Australia and a member (MSAFAA) of the Stockbrokers and Financial Advisers Association of Australia.
3. PRINCIPAL ACTIVITIES
During the year the principal activities of the Euroz group consisted of:
(a)
Stockbroking (including Corporate Finance);
(b) Funds Management;
(c)
Investing; and
(d) Wealth Management.
4. REVIEW OF RESULTS
The consolidated group has a consolidated pre-tax profit of $42.9 million (2017: $24.1 million) for the year ended 30 June 2018.
The consolidated net profit after tax attributable to members was $31.3 million compared with the 2017 year consolidated net
profit after tax attributable to members of $19.4 million. This result represents basic earnings per share of 19.91 cents (2017:
12.30 cents).
The Directors have declared a final dividend of 9.25 cents per share fully franked which combined with the interim dividend of 1.75
cents per share, represents a total dividend of 11 cents per share fully franked.
5. REVIEW OF OPERATIONS
Segment Revenues
Segment Results
2018
$
2017
$
2018
$
2017
$
Stockbroking & Corporate Finance Activities
41,537,285
38,649,093
10,153,858
7,905,662
Principal Trading
Funds Management
Investment Income
Wealth Management
10,149,130
8,126,664
803,614
548,044
13,626,793
3,406,028
3,735,118
(1,817,750)
4,177,883
3,208,618
12,525,095
9,322,250
8,944,689
8,109,366
2,115,640
1,973,156
78,435,780
61,499,769
29,333,325
17,931,362
The major driver of this improved result is due to increases in share prices for Westoz Investment Company Limited (WIC) and
Ozgrowth Limited (OZG), performance fee income, Equity Capital Markets (ECM) activity and growth in group Funds Under
Management (FUM). Euroz Securities Limited (Euroz Securities) business raised $837 million of new equity this financial year for
our corporate clients. WIC and OZG have reported gross investment performance for the year of 39.1% and 30.7% respectively. The
mark to market share prices of these companies can have a major accounting effect on our reported profits and this year have
contributed approximately $7.4 million after tax to our headline profitability. Group FUM has increased by 21.3% to $1.46 billion as
at 30 June 2018 from $1.2 billion as at 30 June 2017.
24
EUROZ LIMITED ANNUAL REPORT 2018
Directors’ Report (Cont’d)
For the year ended 30 June 2018
6. OPERATING AND FINANCIAL REVIEW
The purpose of this review is to set out information that shareholders may require to assess Euroz’s operations, financial
position, business strategies and prospects for future financial years. This information complements and supports the report
presented herein.
7.
DISCLOSURE OF OPERATIONS
The consolidated group is principally involved in the following activities:
(a)
Stockbroking & Corporate Finance Activities;
(b) Funds Management;
(c)
Investing; and
(d) Wealth Management.
Our operations are conducted over several locations with Perth, Western Australia (WA) being our main office. Other offices are
in Sydney, New South Wales and Melbourne, Victoria focusing on Funds Management opportunities. Details of our operations are
outlined below:
(a) Stockbroking & Corporate Finance Activities
The Euroz Securities operations comprise 4 main divisions as follows:
i
Equities Research
• Highly rated research from market leading research team of 6 analysts
• Our views are highly regarded by Australian and international institutional investors
• Access to the latest online news and financial information
• Based on fundamental analysis, strict financial modelling and regular company contact
- Goal: Identify and maximise equity investment opportunities for our clients
- Approach: Intimate knowledge of the companies we cover
- Coverage: Broad cross section of mostly WA based industrial & resource companies
• Research Products:
- Morning Note: Overnight market updates
- Weekly Informer: Compilation of all company reports throughout the preceding week
- Quarterly and / or Semi-annual Review: Regular coverage on mid-cap companies in book format
- Company Reports: Detailed analysis on companies as opportunities emerge
ii.
Institutional Dealing
• One of the largest institutional small to mid-cap dealing desks in the Australian market
• Extensive client base of Australian and International institutional investors with strong relationships with small
company fund managers
• Distribution network strength - long standing relationships with major institutional investors in the small to mid-cap
market
• Western Australia’s geographic isolation makes it difficult for institutional investors to maintain close contact with
companies based here - investors can rely on our “on the ground” information
• Institutional dealing team “highly focused” on providing the following services:
- Quality advice and idea generation
- Efficient execution
- Regular company contact
- Site visits
- Roadshows
EUROZ LIMITED ANNUAL REPORT 2018
25
Directors’ Report (Cont’d)
For the year ended 30 June 2018
7.
DISCLOSURE OF OPERATIONS (CONT’D)
(a) Stockbroking & Corporate Finance Activities (cont’d)
iii.
Private Clients
• A unique and predominantly “high net worth” client base (s.708 compliant investors)
• Significant capacity to support new issues and construct quality retail share registers
• Exposure to high net worth clients via in-house conferences and one-on-one presentations
• Team of highly experienced and qualified private client advisors providing a broader investment offering for clients
of Euroz. With a wealth management service which provides strategic investment advice, superannuation advice,
investment management and portfolio administration service
• Funds Under Management (FUM) of $301 million (2017: $237 million) with the majority on our in-house portfolio
administration service
• Extensive research support - high quality research on WA based resource and industrial companies enable our
advisors to provide quality investment and trading advice
• Specialised broking allows:
- Close interaction between research analysts and private client advisors
- Timely communication of ideas with clients
• Sophisticated investors are able to participate in many of our corporate capital raisings
iv.
Corporate Finance
• The corporate finance business is focused on developing strong, long term relationships with
our clients.
• Clients are provided with specialised Corporate Advisory services in:
- Equity Capital Raisings and Underwriting
- Mergers and Acquisitions
- Strategic Planning and Reviews
- Privatisation and Reconstructions
• Established track record in raising equity capital via:
- Initial Public Offerings (IPO)
- Placements
- Rights Issues
(b) Funds Management
Westoz Funds Management Pty Ltd (WFM) is responsible for managing FUM of $252 million (2017: $202 million). It
manages funds under mandate from two listed investment companies; Westoz Investment Company Limited (WIC) and
Ozgrowth Limited (OZG). Both companies have enjoyed competitive portfolio returns since inception.
WIC commenced its investment activities in May 2005, with OZG commencing in January 2008. Both investment mandates
focus on the generation of the target level of returns from investment in small to mid-cap ASX listed securities, generally
with a connection to Western Australia. Both portfolios have produced returns in excess of comparable equity benchmarks.
WIC and OZG have now paid $147.5 million in dividends to shareholders since inception.
Prodigy Investment Partners Limited (Prodigy) is a funds management partnership with Euroz owning 80% and Mr Steve
Tucker, Executive Chairman, owning 20%. The first boutique funds management partnership, Flinders Investment Partners
Pty Ltd (Flinders) was launched in 2015 via the Flinders Emerging Companies Fund. The second boutique, Dalton Street
Capital Pty Ltd (Dalton) was launched in 2016 via the Dalton Street Absolute Return Fund. A third boutique, Equus Point
Capital Pty Ltd (Equus) is a market neutral strategy which was announced post balance date on 16 August 2018.
(c)
Investing
Euroz Limited owns significant shareholdings of 40.58% in Westoz Investment Company Limited (WIC.ASX) and 27.3% in
Ozgrowth Limited (OZG.ASX). The investment focus of these funds is on small to mid-cap ASX securities with a general
connection to Western Australia.
Euroz Limited has also invested directly in units in the Flinders Emerging Companies Fund and Dalton Street Absolute
Return Fund.
26
EUROZ LIMITED ANNUAL REPORT 2018
Directors’ Report (Cont’d)
For the year ended 30 June 2018
7.
DISCLOSURE OF OPERATIONS (CONT’D)
(d) Wealth Management
In July 2015, Euroz Limited acquired Entrust Private Wealth Management Pty Ltd (Entrust) which has a 15 year track
record as a leading wealth management business. The strategy in acquiring Entrust was to leverage an established wealth
management business with long term ongoing revenues as a platform for further acquisitions and organic growth. The past
year has seen further integration of these operations with the rest of our businesses to realise operational synergies and
develop stronger links with our stockbroking operations.
Entrust has a significant high net worth client base with FUM of $801 million (2017: $713 million).
8. DISCLOSURE OF OPERATIONS — PROFIT
Net profit after tax attributable to members was $31.3 million compared to $19.4 million in the 2017 financial year.
9. DISCLOSURE OF OPERATIONS - SALES
Revenue has increased by 27.5% to $78.4 million from $61.5 million. The group experienced broadly similar trading conditions to the
previous year with significantly improved performance fees being the driver for increased profitability and dividends.
(a) Stockbroking & Corporate Finance Activities
Stockbroking and corporate finance revenue was up by 7.5% to $41.5 million from $38.6 million. Solid commodity prices
and an improving Western Australian economy have driven another strong contribution from our securities business with
brokerage revenues up slightly from previous year. Euroz Securities managed 24 (2017:22) ECM transactions this year raising
$837 million (2017: $865 million).
(b) Principal Trading
Revenue from Principal Trading increased by 24.9% to $10.1 million from $8.1 million.
(c) Funds Management
Revenue from Funds Management increased by 300.1% to $13.6 million from $3.4 million predominantly as a result of
performance fees received from Westoz managed funds and also in line with an increase in FUM.
(d)
Investment Income
Investment income increased by 30.2% to $4.2 million from $3.2 million as a result of increased dividend income from
our investments.
(e) Wealth Management
Wealth management revenue increased by 10.3% to $8.9 million from $8.1 million. This increase is due to increasing FUM.
10. DISCLOSURE OF BUSINESS STRATEGIES AND PROSPECTS - GROWTH
Solid commodity prices and an improving Western Australian economy have driven another strong contribution from our securities
business with brokerage revenues up slightly from previous year. A strong second half equity capital market contribution, with
approximately $837 million of capital raisings completed this financial year, translated to similar overall corporate finance revenues
to the previous year. Westoz Funds Management has provided solid investment returns for its two listed investment company
mandates to generate improved management and performance fees.
In July 2015, Euroz acquired Entrust which has now been fully integrated alongside Euroz Securities Private Client operations and
we believe that both businesses will continue to cross–pollinate their strengths and grow recurring revenue.
During the financial year Prodigy had partnerships with two separate boutique funds, Flinders and Dalton for both retail and
wholesale investors. Our long term strategy is for these boutique funds to provide a steady base of diverse ongoing management
fee revenues with potential performance fee upside. Flinders had a strong gross investment performance of 34.2% for the financial
year which strengthens our commitment to this partnership. Current FUM of $18 million and a solid 3 year track record has
increased investor engagement and we believe the market will better reward their strong investment returns with improved inflows
in the coming 12 months. Dalton Street Capital aims to deliver absolute returns in all market conditions and has reported solid gross
investment performance of 18.3% for the financial year and performance since inception of 14.8% per annum. Strong support from
early adopter research and platform providers continue to underpin consistent monthly FUM growth which was $89 million at 30
June 2018 and we are excited about the FUM growth prospects for this two year old partnership.
In August 2018, Euroz and Prodigy announced the launch of its third boutique funds management partnership, Equus a market
neutral strategy focusing on Australian equities.
We continue to implement our modest diversification strategy and are pleased to pay 11 cents per share in fully franked dividends
for the year, our best full year dividend since 2011.
The Directors believe that Euroz Group has laid the foundations for our strategy to build a more consistent base of underlying
recurring revenues through our growing wealth and funds management businesses whilst still retaining the transaction based
upside of our traditional stockbroking business.
EUROZ LIMITED ANNUAL REPORT 2018
27
Directors’ Report (Cont’d)
For the year ended 30 June 2018
11. DISCLOSURE OF BUSINESS STRATEGIES AND PROSPECTS - MATERIAL BUSINESS RISKS
The past year continues the trend of extremely volatile trading conditions. Like many businesses we have experienced solid trading
months which are often then undermined by any combination of uncertainties. These may take the form of economic concerns,
political instability, inflation and growth concerns, and / or alternating commodity price movements.
Given this backdrop and the increasingly competitive landscape it has created, we are pleased with our overall results for the
financial year. Our entire team has worked hard to manage our costs and generate profits and dividends for shareholders.
12. FINANCIAL POSITION
The net assets of the consolidated group have increased to $130.5 million at 30 June 2018 from $119.3 million at 30 June 2017.
The Company and consolidated group’s financial performance has enabled it to continue to pay dividends to shareholders during
the year while maintaining a healthy working capital ratio. The consolidated group’s working capital, being current assets less
current liabilities, is $30.7 million at 30 June 2018 (30 June 2017: $30.9 million).
During the past ten years the Company has invested in expanding each of its business units to secure its long term success. In
particular it has increased its strategic investments in the investment products of Westoz Funds Management Pty Ltd, our multi
boutique Prodigy business and Entrust as a platform for our future wealth management ambitions.
Our group remains in an extremely sound financial position with cash and investments of $139.3 million (including the Pershing
security deposit of $5 million) as at 30 June 2018. We have a Net Tangible Assets (NTA) of 77¢ per share and no debt. Euroz has
a proud history of consistent profits and dividends having paid a total of $211 million in fully franked dividends in every consecutive
half year for the past 18 years.
The Directors believe the Company is in a strong and stable financial position to expand and grow its current operations.
Earnings per share
Basic earnings per share
Diluted earnings per share
13. DIVIDENDS – EUROZ LIMITED
Dividends paid or provided for during the financial year were as follows:
2018
Cents
19.91
19.42
2018
$
2017
Cents
12.30
12.03
2017
$
Interim ordinary dividend of 1.75 cents (2017: 1.75 cents) per fully paid
ordinary share was paid on 2 February 2018.
Provision for final ordinary dividend for 30 June 2018 of 9.25 cents (2017:
5.5 cents) per fully paid ordinary share paid on 6 August 2018.
2,817,314
2,817,314
14,891,518
17,708,832
8,854,416
11,671,730
Of the total dividends paid during the year $22,110 (2017: $34,246) was paid to the Euroz Share Trust and is undistributed.
Therefore, it has been eliminated on consolidation.
14. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There have been no significant changes in the state of affairs of the consolidated group during the year other than the acquisition
of 1,659,000 treasury shares on-market and the vesting of 884,579 shares under the Performance Rights Plan.
15. SHARE OPTIONS
There were no options on issue at 30 June 2018 and 30 June 2017.
16. ENVIRONMENTAL REGULATION
The consolidated group is not subject to significant environmental regulation in respect of its operations.
28
EUROZ LIMITED ANNUAL REPORT 2018
Directors’ Report (Cont’d)
For the year ended 30 June 2018
17. EVENTS AFTER REPORTING DATE
In August 2018, Euroz and Prodigy announced the launch of its third boutique funds management partnership, Equus, a market
neutral strategy focusing on Australian equities.
Other than this matter, the Directors are not aware of any other matter or circumstance subsequent to 30 June 2018 that has
significantly affected, or may significantly affect:
(a) the consolidated group’s operations in future financial years; or
(b) the results of those operations in future financial years; or
(c) the consolidated group’s state of affairs in future financial years.
18. LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Directors are confident that a strong statement of financial position and established business platforms will support the
Company in increasingly volatile market conditions.
Further information on likely developments in the operations of the consolidated group and the expected results of operations
have not been included in this report because the Directors believe it would be likely to result in unreasonable prejudice to the
consolidated group.
19.
INFORMATION ON DIRECTORS
Information on Directors
Particulars of
Directors’ interests
in shares of
Euroz Limited
Director
Experience
Special responsibilities and qualifications
Ordinary shares*
A McKenzie
Executive
Chairman
Mr McKenzie has
worked in the
stockbroking
industry since 1991.
Executive Chairman of Euroz Limited and Euroz Securities
12,601,269
Executive Director of Westoz Funds Management, Prodigy
Investment Partners, Flinders Investment Partners and
Dalton Street Capital
Member of Euroz Limited Remuneration Committee
Member of Euroz Securities Underwriting Committee
Holds a Bachelor of Economics Degree from the
University of the Western Australia (UWA)
Member (MSAFAA) of the Stockbrokers and Financial
Advisers Association of Australia (SAFAA)
J Hughes
Director
Mr Hughes has worked
in the stockbroking
industry since 1986.
Executive Director of Euroz Limited, Euroz Securities,
Westoz Funds Management and Prodigy Investment
Partners
12,612,130
G Chessell
Director
Mr Chessell has worked
in the stockbroking
industry since 1996.
Executive Chairman of Westoz Investment Company
and Ozgrowth Limited
Member of Euroz Limited Remuneration Committee
Member of Euroz Securities Underwriting Committee
Holds a Graduate Diploma in Applied Finance and
Investment from FINSIA and is a member (MSAFAA) of
SAFAA
Executive Director of Euroz Limited and Euroz Securities
4,636,160
Member of Euroz Limited Audit & Risk Committee
Established the Research division of Euroz Securities
which he headed up until October 2017 before moving to
Corporate Finance team
Holds a Bachelor of Applied Science in Geology from
University of Technology Sydney (UTS) and a Graduate
Diploma in Business from Curtin University
EUROZ LIMITED ANNUAL REPORT 2018
29
Directors’ Report (Cont’d)
For the year ended 30 June 2018
19.
INFORMATION ON DIRECTORS (CONT’D)
Information on Directors
Particulars of
Directors’ interests
in shares of
Euroz Limited
Experience
Special responsibilities and qualifications
Ordinary shares*
Director
R Kane
Director
Mr Kane has worked
in the stockbroking
industry since 1994.
S Yeo
Director
Mr Yeo has worked
in the stockbroking
industry since 1993
A Brittain
Director
Mr Brittain has
worked in the funds
management and
stockbroking industry
since 1992.
Executive Director of Euroz Limited and Euroz Securities
3,282,586
Member of Euroz Securities Underwriting Committee
Institutional Dealer at Euroz Securities responsible for
servicing both domestic institutions and high net
worth clients
Holds a Bachelor of Business from Edith Cowan University
Executive Director of Euroz Limited and Euroz Securities
4,500,000
563,801
Member of Euroz Limited Audit & Risk Committee
Established the Private Client division of Euroz Securities,
which he headed up until October 2013 before moving to
a specialised role within the Institutional Dealing team
Holds a Bachelor of Commerce degree from UWA
Executive Director of Euroz Limited, Euroz Securities,
Entrust Private Wealth Management, Prodigy Investment
Partners, Flinders Investment Partners and Dalton Street
Capital
Chief Operating and Financial Officer
Member of Euroz Limited Audit and Risk Committee
Member of Euroz Securities and Entrust Private Wealth
Management Compliance Committee
Member of Prodigy Investment Partners Risk and
Compliance Committee
Member of Euroz Securities Underwriting Committee
Holds a Bachelor of Commerce degree from UWA, a
member of the Chartered Accountants Australia and
New Zealand (CA), holds a Graduate Diploma in Applied
Finance and Investment from FINSIA, a Graduate member
of the Australian Institute of Company Directors (AICD)
and is a member (MSAFAA) of SAFAA
R Black
Director
(appointed 1
August 2017)
Mr Black has worked in
stockbroking industry
since 1993.
Executive Director of Euroz Limited, Euroz Securities and
Entrust Private Wealth Management
3,950,000
Managing Director of Euroz Securities
Head of Euroz Securities Institutional Sales
Member of Euroz Limited Remuneration Committee
Member of Euroz Securities Underwriting Committee
Member of Euroz Securities and Entrust Private Wealth
Management Compliance Committee
Holds a Bachelor of Business Degree from Edith Cowan
University and is a Graduate member of the AICD
*Balance as at the date of signing the report and total shares includes shares allocated under the Performance Rights Plan.
30
EUROZ LIMITED ANNUAL REPORT 2018
Directors’ Report (Cont’d)
For the year ended 30 June 2018
20. MEETINGS OF DIRECTORS
The numbers of meetings of the Company’s Board of Directors held during the year ended 30 June 2018 and the numbers of
meetings attended by each Director were:
Director
Directors Meetings
Committee Meetings
Audit
Remuneration
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Andrew McKenzie
Jay Hughes
Greg Chessell
Russell Kane
Simon Yeo
Anthony Brittain
Robert Black (appointed 1 August 2017)
Doug Young (retired 1 July 2017)
21. REMUNERATION REPORT (AUDITED)
19
19
19
19
19
19
18
-
19
17
17
16
19
19
16
-
-
-
3
-
3
3
-
-
-
-
3
-
3
3
-
-
2
2
-
-
-
-
2
-
2
2
-
-
-
-
2
-
This Remuneration Report outlines the Key Management Personnel (KMP) remuneration arrangements of the Company and the
consolidated group in accordance with the requirements of the Corporations Act 2001 and its regulations. For the purposes of this
report KMP of the consolidated group are defined as those persons having authority for the strategic management and direction
of the consolidated group including any Director (whether executive or otherwise) of the parent Company.
KEY MANAGEMENT PERSONNEL REMUNERATION
Remuneration packages are set at levels that are intended to attract and retain executives capable of managing the consolidated
group’s operations. The board undertakes regular reviews of its performance and the performance of the board against
expectations made at the start of the year. Performance related bonuses are available to KMP based on their performance and
that of the Company.
REMUNERATION POLICY
The remuneration policy has been designed to align the interests of shareholders, Directors and executives. Euroz remunerates its
Directors, executives and other employees by way of a fixed base salary, commission and a combination of short and long term
incentives. The Company believes this policy to have been effective in increasing shareholder wealth since inception.
The following table shows the gross revenue, profits and dividends for the last five years for the listed entity, as well as the share
price at the end of the respective financial years.
Revenue (including gains on fair value
movements in investment entities)
Net profit/(loss) after tax attributable
to members
2014
$
2015
$
2016
$
2017
$
2018
$
78,176,940
38,898,781
41,924,867
70,372,892
92,087,944
26,547,100
(7,039,395)
3,560,417
19,371,167
31,263,812
Share price at year end
1.30
1.00
0.79
1.08
1.25
Dividends paid or recommended
16,261,272
7,886,167
6,438,992
11,671,730
17,708,832
The objective of the Company’s remuneration framework is to ensure reward for performance is competitive and appropriate to
the results delivered. The Board / Remuneration Committee ensure that executive rewards satisfy the following key criteria for
good reward governance practices:
• competitiveness and reasonableness
• acceptability to shareholders
• performance linked
• transparency
• capital management
EUROZ LIMITED ANNUAL REPORT 2018
31
Directors’ Report (Cont’d)
For the year ended 30 June 2018
REMUNERATION REPORT (AUDITED) (CONT’D)
REMUNERATION POLICY (CONT’D)
Directors’ fees
No Directors fees are paid to Executive Directors.
Non-Executive Directors are paid a fixed base salary and superannuation for their role on the Board.
Base pay
All Directors and executives are offered a competitive base salary and superannuation. Base pay for senior executives is reviewed
semi-annually by the Remuneration Committee to ensure it is competitive with the market. Base pay is also reviewed upon
promotion or additional responsibilities.
There is no guarantee of base pay increases fixed in any senior executive or Directors contracts.
Executives are offered a competitive salary that comprises of a base salary inclusive of superannuation and a combination of some
of the following short term incentives, dependant on the terms of the individual employment contract:
• Participation in the profit share pool
• Commission
• Discretionary Bonus
Profit share pool – Euroz Securities
Directors and executives are invited to participate in the profit share pool. The Remuneration Committee determines the allocation
of up to 40% pre-tax profit on an ongoing basis. In consultation with relevant Department Heads the Committee uses the
following informal criteria to assist in the allocation:
• Ability to perform individual tasks within the relevant department.
• Ability to add value and innovate beyond the job standard specifications.
• Development of new and existing client relationships.
• Ability to interact with other relevant departments as part of a larger team approach.
• Relevant industry salary benchmarking.
• General requirements to attract and retain staff.
The profit share payment is made as a combination of cash (75%) and equity (25%) in the Performance Rights Plan as detailed
below in “Equity based payments”.
The three executives on the Remuneration Committee (Andrew McKenzie, Jay Hughes and Robert Black, Executive Directors
of Euroz Limited) are also entitled to participate in the profit share pool. In these circumstances two members assess the
performance of the third member.
Commission
Private Client Advisors are paid a commission in addition to a base salary and superannuation. This is calculated on a sliding scale.
Eligible Private Client Advisors are also invited to participate in the Performance Rights Plan based on certain performance hurdles
set out in the employment contract.
Discretionary bonus
Executives and other staff members who do not participate in the profit share pool are paid a discretionary bonus based on
the profitability of the Company. Similar to the profit share pool, the distribution of the discretionary bonus is also leveraged
to the individual’s performance and is made as a combination of cash (75%) and equity (25%) as detailed below in “Equity
based payments”.
Equity based payments
A Performance Rights Plan was established in 2014 as a long term incentive to assist in the reward, retention and motivation of
Directors, executives and staff members. Eligible employees are invited to participate in this plan and are awarded a Performance
right at the beginning of the year. There are three separate long term incentives depending on the individual employment contract
as below:
• Profit share
• Discretionary bonus
• Commission
32
EUROZ LIMITED ANNUAL REPORT 2018
Directors’ Report (Cont’d)
For the year ended 30 June 2018
REMUNERATION REPORT (AUDITED) (CONT’D)
The Performance Right represents a right to be issued a number of ordinary shares in Euroz to reflect 25% of the profit share or
the discretionary bonus that is paid to the participant. Private Client Advisors who are paid a commission may also be paid 5%
of their total monthly brokerage and/or portfolio administration revenue (above certain hurdles) or 25% of corporate finance
introduction fees in equity. The shares issued will only vest to the employee after 3 years subsequent service following the initial
year of service.
DETAILS OF REMUNERATION
Details of the nature and amount of each element of the emoluments of each KMP of the Group are set out in the following tables.
2018
Short-term
Post-
Employment
Share Based
Payment
Base
salary
$
Profit Share/
bonus
$
Other
benefits
$
Super-
annuation
$
Performance
Rights
$
Performance
related
%
Total
$
Andrew McKenzie
250,000
487,500
26,894
Jay Hughes
219,602
487,500
23,625
25,000
24,087
104,375
893,769
104,375
859,189
Doug Young
(retired 1 July 2017)
78,931
-
-
-
105,313
184,244
Greg Chessell
254,951
217,500
Russell Kane
Simon Yeo
254,951
446,250
254,951
228,750
20,242
Robert Black
254,951
375,000
Phil Rees
229,951
270,000
Anthony Brittain
250,000
168,750
16,320
16,749
18,425
12,578
17,721
20,049
20,049
20,049
20,049
20,049
25,000
51,250
556,328
82,500
821,471
60,000
583,992
83,438
749,758
47,813
584,562
40,000
502,175
66%
69%
57%
48%
64%
49%
61%
54%
42%
Total
2,048,288
2,681,250
152,554
174,332
679,064
5,735,488
Current Directors did not receive any Directors fees.
2017
Short-term
Post-
Employment
Share Based
Payment
Base
salary
$
Profit Share/
bonus
$
Other
benefits
$
Super-
annuation
$
Performance
Rights
$
Performance
related
%
Total
$
Andrew McKenzie
244,658
495,000
Jay Hughes
231,496
495,000
27,951
19,572
34,956
34,366
82,500
885,065
82,500
862,934
Doug Young
(retired 1 July 2017)
244,998
326,250
20,347
34,616
54,063
680,274
Greg Chessell
259,998
225,000
Russell Kane
259,998
326,250
Simon Yeo
259,998
296,250
Robert Black
259,643
386,250
Phil Rees
220,341
198,750
Anthony Brittain
250,203
183,750
11,183
16,212
18,356
15,454
14,526
16,580
19,616
19,616
19,616
19,616
33,776
29,056
45,625
60,938
53,438
67,188
40,938
34,063
561,422
683,014
647,658
748,151
508,331
513,652
Total
2,231,333
2,932,500
160,181
245,234
521,253
6,090,501
Current Directors did not receive any Directors fees.
65%
67%
56%
48%
57%
54%
61%
47%
42%
EUROZ LIMITED ANNUAL REPORT 2018
33
Directors’ Report (Cont’d)
For the year ended 30 June 2018
REMUNERATION REPORT (AUDITED) (CONT’D)
SERVICE AGREEMENTS
Remuneration and other terms of employment for the Key Management Personnel are formalised in service agreements. Each of
these agreements provide for the provision of performance related cash bonuses and other benefits. Notwithstanding the agreed
salary in the service agreement, the base salary may be reduced or increased based on trading conditions. Other major provisions
of the agreements relating to remuneration are set out below.
Andrew McKenzie, Executive Chairman
• Term of contract – ongoing employment contract
• Base salary, inclusive of superannuation for the year ended 30 June 2018 of $275,000 (2017 - $275,000) plus profit share
• Payment on termination of employment by the employer, other than for gross misconduct – three months’ salary
Jay Hughes, Director
• Term of contract – ongoing employment contract
• Base salary, inclusive of superannuation for the year ended 30 June 2018 of $275,000 (2017 - $275,000) plus profit share
• Payment on termination of employment by the employer, other than for gross misconduct – three months’ salary
Greg Chessell, Director
• Term of contract – ongoing employment contract
• Base salary, inclusive of superannuation for the year ended 30 June 2018 of $275,000 (2017 - $275,000) plus profit share
• Payment on termination of employment by the employer, other than for gross misconduct – three months’ salary
Russell Kane, Director
• Term of contract – ongoing employment contract
• Base salary, inclusive of superannuation for the year ended 30 June 2018 of $275,000 (2017 - $275,000) plus profit share
• Payment on termination of employment by the employer, other than for gross misconduct – three months’ salary
Simon Yeo, Director
• Term of contract – ongoing employment contract
• Base salary, inclusive of superannuation for the year ended 30 June 2018 of $275,000 (2017 - $275,000) plus profit share
• Payment on termination of employment by the employer, other than for gross misconduct – three months’ salary
Anthony Brittain, Director
• Term of contract – ongoing employment contract
• Base salary, inclusive of superannuation for the year ended 30 June 2018 of $275,000 (2017 - $275,000) plus bonus
• Payment on termination of employment by the employer, other than for gross misconduct – three months’ salary
Robert Black, Director
• Term of contract – ongoing employment contract
• Base salary, inclusive of superannuation for the year ended 30 June 2018 of $275,000 (2017 - $275,000) plus profit share
• Payment on termination of employment by the employer, other than for gross misconduct – three months’ salary
Phil Rees, Director Westoz Funds Management Pty Ltd
• Term of contract – ongoing employment contract
• Base salary, inclusive of superannuation for the year ended 30 June 2018 of $250,000 (2017 - $250,000) plus bonus
• Payment on termination of employment by the employer, other than for gross misconduct – three months’ salary
34
EUROZ LIMITED ANNUAL REPORT 2018
Directors’ Report (Cont’d)
For the year ended 30 June 2018
REMUNERATION REPORT (AUDITED) (CONT’D)
SHAREHOLDINGS OF KEY MANAGEMENT PERSONNEL
The movement during the reporting year in the number of shares in Euroz Limited held, directly, indirectly or beneficially, by each
member of KMP, including related parties, is as follows:
2018
Ordinary shares
Andrew McKenzie
Jay Hughes
Doug Young (retired 1 July 2017)
Greg Chessell
Russell Kane
Simon Yeo
Robert Black
Philip Rees
Anthony Brittain
2017
Ordinary shares
Andrew McKenzie
Jay Hughes
Doug Young (retired 1 July 2017)
Greg Chessell
Russell Kane
Simon Yeo
Robert Black
Philip Rees
Anthony Brittain
Balance at
1 July 2017
Received
via PRP (i)
Net change
other *
Bought
& (sold)
Balance at
30 June 2018
12,138,971
12,303,832
4,734,540
4,558,243
3,089,652
4,206,264
3,531,347
1,400,527
517,313
134,298
134,298
-
-
-
(4,734,540)
59,917
122,934
63,017
103,306
74,380
46,488
-
-
-
-
-
-
228,000
74,000
-
18,000
40,000
152,000
138,653
-
-
12,501,269
12,512,130
-
4,636,160
3,252,586
4,421,281
3,773,306
1,474,907
563,801
46,480,689
738,638
(4,734,540)
650,653
43,135,440
Balance at
1 July 2016
Received
via PRP (i)
Net change
other *
Bought
& (sold)
Balance at
30 June 2017
11,913,458
12,148,319
4,632,043
4,464,905
2,972,155
4,113,192
3,349,456
1,318,759
459,585
155,513
155,513
102,497
70,688
102,497
93,072
121,347
62,441
57,728
45,371,872
921,296
-
-
-
-
-
-
-
-
-
-
70,000
12,138,971
-
-
22,650
15,000
12,303,832
4,734,540
4,558,243
3,089,652
-
4,206,264
60,544
19,327
-
3,531,347
1,400,527
517,313
187,521
46,480,689
(i) These shares are held by the Euroz Share Trust and are currently vesting in accordance with the Euroz Performance Rights Plan
(PRP).
*Net change in the current year reflects Doug Young’s retirement and hence his cessation as a KMP.
EUROZ LIMITED ANNUAL REPORT 2018
35
Directors’ Report (Cont’d)
For the year ended 30 June 2018
REMUNERATION REPORT (AUDITED) (CONT’D)
PERFORMANCE RIGHTS HELD BY KEY MANAGEMENT PERSONNEL
The movement during the reporting period in performance rights in Euroz Limited held, directly, indirectly or beneficially, by each
KMP, including related parties, is as follows:
2018
Performance Rights
Andrew McKenzie
Jay Hughes
Greg Chessell
Russell Kane
Simon Yeo
Robert Black
Phillip Rees
Anthony Brittain
2017
Performance Rights
Andrew McKenzie
Jay Hughes
Doug Young (retired 1 July 2017)
Greg Chessell
Russell Kane
Simon Yeo
Robert Black
Phillip Rees
Anthony Brittain
Granted as
remuneration
Vested
1
1
1
1
1
1
1
1
8
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(8)
Granted as
remuneration
Vested
1
1
1
1
1
1
1
1
1
9
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(9)
These performance rights were issued in accordance with the PRP. Rights are granted on 1 July each year and vest on 30 June.
SHARE-BASED COMPENSATION
A performance right was issued to KMPs as part of their annual bonus / profit share plan. The fair value of each right is calculated
as 25% of each member’s bonus entitlement. The performance rights are subject to a 4 year vesting period. Total fair values of
performance rights issued in the year amounts to $1,435,476 (2017: $1,058,057).
LOANS KEY MANAGEMENT PERSONNEL
No loans were made to Directors of Euroz Limited and the KMPs of the consolidated group, including their personally-related
entities during the year.
REMUNERATION REPORT - END
36
EUROZ LIMITED ANNUAL REPORT 2018
Directors’ Report (Cont’d)
For the year ended 30 June 2018
22
INDEMNIFYING OFFICERS AND AUDITOR
During the financial year, Euroz Limited paid a premium of $337,657 to insure the Directors and secretaries of the Company and
its Australian based controlled entities. The liabilities insured include costs and expenses that may be incurred in defending civil
or criminal proceedings that may be brought against the officers in their capacity as officers of entities in the consolidated group.
Euroz has not indemnified the auditor or paid any insurance premium on behalf of the auditor.
23. PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any proceedings to which
the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.
The Company was not a party to such proceedings during the year.
24. NON-AUDIT SERVICES
The following non-audit services were provided by the group’s auditor, PKF Mack. The Directors are satisfied that the provision of
non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
The nature and scope of each type of non-audit service provided means that auditor independence was not compromised. PKF
Mack received or is due to receive the following amounts for the provision of non-audit services:
Tax compliance and other services
25. AUDITOR’S INDEPENDENCE DECLARATION
$
57,420
The lead auditor’s independence declaration for the year ended 30 June 2018 has been received and follows the Directors’ report.
This report is made in accordance with a resolution of the Directors.
ANDREW MCKENZIE
Executive Chairman
ROBERT BLACK
Executive Director
Date: 30 August 2018
EUROZ LIMITED ANNUAL REPORT 2018
37
Auditor’s Independence Declaration
AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF EUROZ LIMITED
In relation to our audit of the financial report of Euroz Limited for the year ended 30 June 2018, to the best of my
knowledge and belief, there have been no contraventions of the auditor independence requirements of the
Corporations Act 2001 or any applicable code of professional conduct.
PKF MACK
SHANE CROSS
PARTNER
30 AUGUST 2018
WEST PERTH
38
EUROZ LIMITED ANNUAL REPORT 2018
Page | 16
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2018
Revenue
Profit on fair value movement on investments
Employee benefits expense
Depreciation and amortisation expenses
Regulatory expenses
Legal, professional and consultancy expenses
Conference and seminar expenses
Stockbroking expenses
Communication expenses
Carrying amount of principal trading securities sold
Loss on deconsolidation
Other expenses
PROFIT BEFORE INCOME TAX EXPENSE
Income tax expense
Note
4
5
5
6
2018
$
78,435,780
13,652,164
(28,049,408)
(309,412)
(210,824)
(667,116)
(968,088)
(4,384,561)
(340,348)
(9,435,629)
(29,572)
(4,782,546)
42,910,440
(13,577,115)
2017
$
61,499,769
8,873,123
(27,412,316)
(236,178)
(193,657)
(1,119,534)
(950,209)
(3,725,259)
(327,840)
(7,334,783)
-
(4,939,496)
24,133,620
(6,202,258)
PROFIT AFTER INCOME TAX EXPENSE FOR THE YEAR
29,333,325
17,931,362
Other comprehensive income
Other comprehensive income net of tax
-
-
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
29,333,325
17,931,362
Profit / (Loss) for the year is attributable to:
Non-controlling interest
Owners of Euroz Limited
TOTAL COMPREHENSIVE INCOME FOR THE YEAR IS
ATTRIBUTABLE TO:
Non-controlling interest
Owners of Euroz Limited
Basic earnings per share (cents)
Diluted earnings per share (cents)
33
33
(1,930,487)
31,263,812
29,333,325
(1,930,487)
31,263,812
29,333,325
19.91
19.42
(1,439,805)
19,371,167
17,931,362
(1,439,805)
19,371,167
17,931,362
12.30
12.03
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.
EUROZ LIMITED ANNUAL REPORT 2018
39
Consolidated Statement of Financial Position
As at 30 June 2018
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Long term receivable
Investments
Investment entities at fair value
Plant and equipment
Deferred tax assets
Intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Current tax liabilities
Short term provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Deferred tax liabilities
Long term provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Retained earnings
Note
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
22
Equity attributable to the owners of Euroz Limited
Non-controlling interest
TOTAL EQUITY
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
2018
$
39,390,169
2,181,061
12,855,087
4,103,235
2017
$
41,152,236
1,855,645
5,049,119
1,218,294
58,529,552
49,275,294
5,000,000
14,519,955
67,586,696
736,579
4,427,658
10,178,785
5,000,000
9,215,893
56,915,440
650,583
7,558,090
10,208,552
102,449,673
89,548,558
160,979,225
138,823,852
4,637,251
5,075,257
18,129,112
3,346,290
3,251,272
11,767,285
27,841,620
18,364,847
2,657,601
4,979
2,662,580
1,114,687
43,016
1,157,703
30,504,200
19,522,550
130,475,025
119,301,302
102,343,793
2,646,774
29,470,406
134,460,973
(3,985,948)
103,246,026
2,217,421
15,893,316
121,356,763
(2,055,461)
130,475,025
119,301,302
40
EUROZ LIMITED ANNUAL REPORT 2018
Consolidated Statement of Changes in Equity
For the year ended 30 June 2018
Balance at 1 July 2016
105,226,509
1,159,364
8,159,633
(715,656)
113,829,850
Issued
capital
$
Share based
payment
reserve
$
Retained
earnings
$
Non-
controlling
interest
$
Total
$
Profit for the period
Total comprehensive income for the period
Transactions with owners, recorded directly in equity
Shares issued during the period
Vested shares under employee share plan
Treasury shares
Share buy back
Share based payments
Dividends to equity holders
Total contributions by and distributions
to owners
-
-
-
-
(1,964,883)
-
-
-
-
-
(15,600)
-
1,058,057
-
-
-
(11,637,484)
19,371,167
(1,439,805)
17,931,362
19,371,167
(1,439,805)
17,931,362
100,000
100,000
-
-
-
-
-
-
(1,964,883)
(15,600)
1,058,057
(11,637,484)
Balance at 30 June 2017
103,246,026
2,217,421
15,893,316
(2,055,461)
119,301,302
Balance at 1 July 2017
103,246,026
2,217,421
15,893,316
(2,055,461)
119,301,302
(1,980,483)
1,058,057
(11,637,484)
100,000
(12,459,910)
31,263,812
(1,930,487)
29,333,325
31,263,812
(1,930,487)
29,333,325
Profit for the period
Total comprehensive income for the period
Transactions with owners, recorded directly in equity
Shares issued during the period
-
-
-
-
-
-
Vested shares under employee share plan
1,006,123
(1,006,123)
Treasury shares
Share buy back
Share based payments
Dividends to equity holders
(1,908,356)
-
-
-
-
-
1,435,476
Total contributions by and distributions
to owners
(902,233)
429,353
(17,686,722)
-
(17,686,722)
-
-
-
-
-
-
-
-
-
(1,908,356)
-
1,435,476
(17,686,722)
(18,159,602)
-
-
-
-
-
-
-
-
-
-
Balance at 30 June 2018
102,343,793
2,646,774
29,470,406
(3,985,948)
130,475,025
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
EUROZ LIMITED ANNUAL REPORT 2018
41
Consolidated Statement of Cash Flows
For the year ended 30 June 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers (inclusive of goods and services tax)
60,386,371
49,657,515
Note
2018
$
2017
$
Payments to suppliers and employees (inclusive of goods
and services tax)
Interest received
Proceeds from sale of trading shares
Income taxes
Payments for trading shares
(36,582,581)
23,803,790
492,045
10,105,513
(7,079,784)
(15,060,563)
(34,800,663)
14,856,852
380,145
8,103,956
(2,079,389)
(5,345,630)
NET CASH FLOWS FROM OPERATING ACTIVITIES
32
12,261,001
15,915,934
CASH FLOWS FROM INVESTING ACTIVITIES
Payment of stamp duty on intangibles acquisition
Payments for investment in WIC & OZG
Payments for management investment schemes
Dividends and trust distributions received
Payments for plant and equipment
Payments for treasury shares
-
(100,254)
(3,000,020)
3,030,590
(395,408)
(1,908,356)
(56,238)
(1,698,577)
(1,600,000)
3,075,861
(400,898)
(1,964,883)
NET CASH FLOWS FROM / (USED IN) INVESTING ACTIVITIES
(2,373,448)
(2,644,735)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid
Share buy-back
Proceeds from share issue in related entity
(11,649,620)
(6,405,779)
-
-
(15,600)
100,000
NET CASH FLOWS FROM / (USED IN) FINANCING ACTIVITIES
(11,649,620)
(6,321,379)
NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS
(1,762,067)
6,949,820
Cash and cash equivalents at 1 July
41,152,236
34,202,416
CASH AND CASH EQUIVALENTS AT 30 JUNE
7
39,390,169
41,152,236
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
42
EUROZ LIMITED ANNUAL REPORT 2018
Notes to the Financial Statements
For the year ended 30 June 2018
CONTENTS
PAGE
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
NOTE 2. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS
NOTE 3. SEGMENT INFORMATION
NOTE 4. REVENUE
NOTE 5. PROFIT BEFORE INCOME TAX EXPENSE
NOTE 6. INCOME TAX
NOTE 7. CASH AND CASH EQUIVALENTS
NOTE 8. TRADE AND OTHER RECEIVABLES
NOTE 9. INVENTORIES
NOTE 10. OTHER CURRENT ASSETS
NOTE 11. LONG TERM RECEIVABLE
NOTE 12. INVESTMENTS
NOTE 13. INVESTMENT ENTITIES AT FAIR VALUE
NOTE 14. PLANT AND EQUIPMENT
NOTE 15. DEFERRED TAX ASSETS
NOTE 16. INTANGIBLE ASSETS
NOTE 17. TRADE AND OTHER PAYABLES
NOTE 18. CURRENT TAX LIABILITIES
NOTE 19. SHORT TERM PROVISIONS
NOTE 20. DEFERRED TAX LIABILITIES
NOTE 21. LONG TERM PROVISIONS
NOTE 22. CONTRIBUTED EQUITY
NOTE 23. DIVIDENDS
NOTE 24. FINANCIAL INSTRUMENTS
NOTE 25. REMUNERATION OF AUDITORS
NOTE 26. CONTINGENT LIABILITIES
NOTE 27. COMMITMENTS FOR EXPENDITURE
NOTE 28. EMPLOYEE BENEFITS
NOTE 29. RELATED PARTIES
NOTE 30. INVESTMENTS IN CONTROLLED ENTITIES
NOTE 31. EVENTS SUBSEQUENT TO REPORTING DATE
NOTE 32. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
NOTE 33. EARNINGS PER SHARE
NOTE 34. PARENT ENTITY DISCLOSURES
NOTE 35. COMPANY DETAILS
44
52
53
55
55
55
57
57
57
57
57
57
58
58
59
59
60
60
60
60
61
61
62
63
65
65
65
65
66
67
68
68
69
69
69
EUROZ LIMITED ANNUAL REPORT 2018
43
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting
Standards, other authoritative pronouncements as issued by the Australian Accounting Standards Board and the Corporations Act
2001 as appropriate for “for-profit” oriented entities.
This financial report has been authorised by the Directors to be issued on 30 August 2018. The Directors have the power to amend
and reissue the financial statements.
Euroz Limited is a listed public Company, trading on the Australian Securities Exchange and Chi - X, limited by shares, incorporated
and domiciled in Australia.
The financial report of Euroz Limited and controlled entities (the group or consolidated group), complies with Australian
Accounting Standards and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards
Board.
Separate financial information of the parent Company has been included in Note 34 as permitted by amendments to the
Corporations Act 2001. The financial report is presented in Australian dollars which is the group’s functional and presentation
currency. Amounts are rounded to the nearest dollar in accordance with Corporations (Rounding in Financial / Directors’ Reports)
Instrument 2016/191.
The following is a summary of the material accounting policies adopted by the consolidated group in the preparation of the
financial report. The accounting policies have been consistently applied, unless otherwise stated.
Basis of preparation
Reporting basis and conventions
The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected
non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.
Accounting policies
(a) Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Euroz Limited
(‘Company’ or ‘parent entity’) as at 30 June 2018 and the results of all controlled entities for the year then ended. Euroz
Limited and its controlled entities together are referred to in this financial report as the consolidated group.
Subsidiaries are all those entities over which the consolidated group has control. The consolidated group controls an entity
when the consolidated 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 consolidated group. They are de-
consolidated from the date that control ceases.
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the consolidated group.
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.
Intercompany transactions, balances and unrealised gains on transactions between group companies 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 consolidated group. All controlled entities have a 30 June financial year end.
(b)
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 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 apply when the
assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
• 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
• 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.
44
EUROZ LIMITED ANNUAL REPORT 2018
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(b)
Income tax (cont’d)
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.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred
tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for
the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is
probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against
current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on
either the same taxable entity or different taxable entity’s which intend to settle simultaneously.
Euroz Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under the
Tax Consolidation Regime. The group formed an income tax consolidated group to apply from 1 July 2003. The tax
consolidated group has entered a tax sharing agreement whereby each Company in the group contributes to the income
tax payable in proportion to their contribution to the net profit before tax of the tax consolidated group.
(c) Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity
instruments or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest
in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value
or at the proportionate share of the acquiree’s identifiable net assets. All acquisition costs are expensed as incurred to profit
or loss.
On the acquisition of a business, the consolidated group assesses the financial assets acquired and liabilities assumed
for appropriate classification and designation in accordance with the contractual terms, economic conditions, and the
consolidated group’s operating or accounting policies and other pertinent conditions in existence at the acquisition-date.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest
in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the
acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value of
the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly
in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and measurement
of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer’s
previously held equity interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional
amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new
information obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends
on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information
possible to determine fair value.
(d) Revenue recognition
Revenue is recognised when it is probable that the economic benefits will flow to the entity and the revenue can be reliably
measured. Revenue is measured at the fair value of consideration received or receivable. The following specific recognition
criteria must also be met before revenue is recognised:
• Brokerage revenue earned from share trading on behalf of clients is recognised on completion of the transactions. That is,
the day the security is traded, not the day of settlement.
• Underwriting, management fees and corporate retainers are brought to account when the fee in respect of the services
provided is receivable.
• Share trading revenue from the sale of stocks in the jobbing account is recognised on the day the security is traded.
Revenue comprises the gross proceeds on sale of the security.
• Interest income is recognised as it accrues.
• Dividend revenue is recognised when the right to receive a dividend has been established.
All revenue is stated net of the amount of Goods and Services Tax (GST), where applicable
EUROZ LIMITED ANNUAL REPORT 2018
45
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(e) Receivables
Trade receivables are recognised as current receivables as they are generally settled within 30 days from the date of
recognition. Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible
are written off. A provision for impairment is raised when some doubt as to collection exists.
All trade receivables relating to brokerage and principal trading have been transferred to Pershing Securities (Australia) Pty
Ltd who provides a trust account facility as part of the clearing and settlement service.
(f)
Inventories
Inventories are stocks held in the operating (house) account at year end. All inventory is held at fair value. Refer to Note 1
(u) (i) financial assets at fair value through profit or loss.
(g)
Investments
Controlled entities are accounted for in the consolidated financial statements as set out in Note 1 (a), excluding investment
entities (which are deemed to be controlled) which are accounted for at fair value at reporting date.
Other securities are accounted for at fair value at reporting date. Unrealised gains/losses on securities held for short term
investment are accounted for as set out in Note 1 (u) (i) financial assets at fair value through profit or loss. Unrealised gains/
losses on securities held for long term investment are designated on initial recognition at fair value through profit or loss.
(h) Plant and equipment
Each class of plant and equipment is carried at cost as indicated less, where applicable, any accumulated depreciation and
impairment losses.
The cost of fixed assets constructed within the consolidated group includes the cost of materials, direct labour, borrowing
costs and an appropriate proportion of fixed and variable overheads.
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 the statement of profit or loss during the financial
period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets is depreciated on a straight line basis over their useful lives to the residual values
commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets
are:
Class of Fixed Asset
Leasehold improvements
Plant and equipment
Depreciation Rate
25%
25-33%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses
are included in the statement of profit or loss. When revalued assets are sold, amounts included in the revaluation reserve
relating to the asset are transferred to retained earnings.
(i)
Leasehold improvements
The cost of improvements to or on leasehold properties are amortised over the unexpired period of the lease or the
estimated useful life of the improvement to the consolidated group, whichever is the shorter.
(j)
Leases
Other operating lease payments are charged to the statement of profit or loss in the periods in which they are incurred, as
this represents the pattern of benefits derived from the leased assets.
(k) Trade and other creditors
Trade and other creditors also include other liabilities for goods and services provided to the consolidated group prior to the
end of the financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and not
discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
All trade creditors relating to brokerage and principal trading have been transferred to Pershing Securities (Australia) Pty Ltd
who provides a trust account facility as part of the clearing and settlement service.
46
EUROZ LIMITED ANNUAL REPORT 2018
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(l) Dividends
Provision is made for the amount of any dividend declared and authorised by the Directors on or before the end of the
financial year, but not distributed at reporting date.
(m) Options
The fair value of options in the shares of the Company issued to Directors and other parties is recognised as an expense in
the financial statements in relation to the granting of these options.
(n) Employee benefits
(i) Wages, salaries and annual leave
Liabilities for wages, salaries and annual leave expected to be settled within 12 months of the reporting date are
recognised in respect of employees’ services up to the reporting date and are measured at the amounts expected to
be paid when the liabilities are settled.
(ii)
Employee benefits payable later than one year
Employee benefits payable later than one year have been measured at the present value of the estimated future cash
outflows to be made for those benefits. There have been no changes to the method used to calculate this liability.
(iii) Superannuation
Contributions are made by the consolidated group to superannuation funds as stipulated by statutory requirements
and are charged as expenses when incurred.
(iv) Employee benefit on costs
Employee benefit on costs, including payroll tax, are recognised and included in employee benefits liabilities and costs
when the employee benefits to which they relate are recognised as liabilities.
(v) Options/performance rights
The fair value of options/performance rights granted is recognised as an employee benefit expense with a
corresponding increase in equity. The fair value is measured at grant date.
The fair value of options at grant date is independently determined using the Black-Scholes option pricing model
that takes into account the exercise price, the term of the option, the vesting and performance criteria, the impact
of dilution, the non-tradeable nature of the option, the share price at grant date and expected price volatility of the
underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.
The fair value of performance rights are estimated at grant date based on expectations of the bonus that will be paid
at year end to eligible employees. Each performance right is subject to a 4 year vesting condition. At the end of year
1, the performance right converts to plan shares that are subject to a 3 year service condition. The Board may, at their
discretion accelerate the vesting period.
(vi) Profit-sharing
The consolidated group recognises a liability and an expense for profit-sharing based on a formula that takes into
consideration the profit attributable to the Company’s employees after certain adjustments.
(vii) Termination benefits
The consolidated group recognises a liability and an expense when the group demonstrates a commitment to either
terminate the employee before the normal retirement date or provide termination benefits as a result of an offer made
to the employee prior to retirement date.
(o) Cash and cash equivalents
For purposes of the statement of cash flows, cash and cash equivalents includes deposits at call which are readily
convertible to cash on hand and are subject to an insignificant risk of changes in value, net of outstanding bank overdrafts.
(p) Earnings per share
(i)
Basic earnings per share
Basic earnings per share is determined by dividing the net profit after income tax attributable to members of the
Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of
ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during
the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation
to dilutive potential ordinary shares. The potential impact of issuing treasury shares externally is considered when
calculating diluted earnings per share.
EUROZ LIMITED ANNUAL REPORT 2018
47
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(q) Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the
fair value is based on 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; and assumes that the transaction will take place either: in the
principle market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming
they act in their economic best interest. For non-financial assets, the fair value measurement is based on its highest and best
use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure
fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed each reporting date and transfers
between levels are determined based on a reassessment of the lowest level input that is significant to the fair value
measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not
available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and
reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis
is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where
applicable, with external sources of data.
(r) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for
disclosure purposes.
The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and
available-for-sale securities) is based on quoted market prices at the reporting date. The quoted market price used for
financial assets held by the consolidated group is the current bid price; the appropriate quoted market price for financial
liabilities is the current ask price.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is
determined using valuation techniques. The consolidated group uses a variety of methods and makes assumptions that are
based on market conditions existing at each reporting date. Quoted market prices or dealer quotes for similar instruments
are used for long-term debt instruments held. Other techniques, such as estimated discounted cash flows, are used to
determine fair value for the remaining financial instruments.
The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair
values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash
flows at the current market interest rate that is available to the consolidated group for similar financial instruments.
(s) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not
recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition
of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown
inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and
financing activities, which are disclosed as operating cash flows.
(t) Treasury Shares
Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or
loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the group’s own equity instruments. Any
difference between the carrying amount and the consideration, if reissued, is recognised in share-based payments reserve.
(u) Financial instruments
The consolidated group classifies its investments in the following categories: financial assets at fair value through profit
or loss, loans and receivables, and available-for-sale financial assets. The classification depends on the purpose for which
the investments were acquired. Management determines the classification of its investments at initial recognition and re-
evaluates this designation at each reporting date.
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the consolidated group becomes a party to the contractual
provisions to the instrument. For financial assets, this is equivalent to the date that the consolidated group commits itself to
either the purchase or sale of the asset (i.e. trade date accounting is adopted).
48
EUROZ LIMITED ANNUAL REPORT 2018
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(u) Financial instruments (cont’d)
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified ‘at
fair value through profit or loss’, in which case transaction costs are expensed to profit or loss immediately.
Classification and subsequent measurement
Financial instruments are subsequently measured at either of fair value, amortised cost using the effective interest rate
method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between
knowledgeable, willing parties. Where available, quoted prices in an active market are used to determine fair value. In other
circumstances, valuation techniques are adopted.
Amortised cost is calculated as:
• the amount at which the financial asset or financial liability is measured at initial recognition;
• less principal repayments;
• plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the
maturity amount calculated using the effective interest method; and
• less any reduction for impairment.
The effective interest method is used to allocate interest income or interest expense over the relevant period and is
equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs
and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual
term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected
future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or
expense in profit or loss.
The consolidated group does not designate any interests in subsidiaries, associates or joint venture entities as being subject
to the requirements of accounting standards specifically applicable to financial instruments.
(i)
Financial assets at fair value through profit or loss
This category has two sub-categories; financial assets held for trading, and those designated at fair value through
profit or loss on initial recognition. A financial asset is classified in this category if acquired principally for the purpose
of selling in the short term or if so designated by management. Investments held as inventories are classified in
this manner. The policy of management is to designate a financial asset if there exists the possibility it will be sold
in the short term and the asset is subject to frequent changes in fair value. Assets in this category are classified as
current assets if they are either held for trading or are expected to be realised within 12 months of the reporting date.
Investments in managed investment schemes are recognised at fair value through profit or loss on initial recognition.
(ii)
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market. They arise when the consolidated group provides money, goods or services directly to a debtor
with no intention of selling the receivable. They are included in current assets, except for those with maturities greater
than 12 months after the reporting date which are classified as non-current assets. Loans and receivables are included
in receivables in the statement of financial position.
(iii) Available-for-sale financial assets
Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that
are either designated in this category or not classified in any of the other categories. They are included in
non-current assets.
Purchases and sales of investments are recognised on trade-date being the date on which the consolidated group
commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all
financial assets not carried at fair value through profit or loss. Financial assets are derecognised when the rights to
receive cash flows from the financial assets have expired or have been transferred and the consolidated group has
transferred substantially all the risks and rewards of ownership.
Available-for-sale financial assets and financial assets at fair value through profit and loss are subsequently carried
at fair value. Loans and receivables are carried at amortised cost using the effective interest method. Realised and
unrealised gains and losses arising from changes in the fair value of the ‘financial assets at fair value through profit or
loss’ category are included in the statement of profit or loss in the period in which they arise. Unrealised gains and
losses arising from changes in the fair value of non-monetary securities classified as available-for-sale investments
revaluation reserve are recognised in equity in the “available for sale revaluation reserve”. When securities classified as
available-for-sale are sold or impaired, the accumulated fair value adjustments are included in the statement of profit
or loss as gains and losses from investment securities.
The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active
(and for unlisted securities), the consolidated group establishes fair value by using valuation techniques. These
include reference to the fair values of recent arm’s length transactions, involving the same instruments or other
instruments that are substantially the same, discounted cash flow analysis, and option pricing methods refined to
reflect the issuer’s specific circumstances.
EUROZ LIMITED ANNUAL REPORT 2018
49
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(u) Financial instruments (cont’d)
(iv)
Impairment of financial assets
The consolidated group assesses at each reporting date whether there is objective evidence that a financial asset
or group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant
or prolonged decline in the fair value of a security below its cost is considered in determining whether the security
is impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss – measured as the
difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset
previously recognised in profit and loss, is removed from equity and recognised in the statement of profit or loss.
Impairment losses recognised in the statement of profit or loss on equity instruments are not reversed through the
statement of profit or loss.
(v) Current / non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is current when: it is expected to be realised or intended to be sold or consumed in normal operating cycle; it is
held primarily for the purpose of trading; it is expected to be realised within twelve 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 twelve months
after the reporting period. All other assets are classified as non-current.
A liability is current when: it is expected to be settled in normal operating cycle; it is held primarily for the purpose of
trading; it is due to be settled within twelve months after the reporting period; or there is no unconditional right to defer
the settlement of the liability for at least twelve months after the reporting period. All other liabilities are classified as
non-current.
Deferred tax assets and liabilities are always classified as non-current.
(w) Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds. Incremental costs directly attributable to the issue of new shares or options, or for the acquisition of a
business, are included in the cost of the acquisition as part of the purchase consideration.
(x)
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually
for impairment or more frequently if events or changes in circumstances indicate that they might be impaired. Other non-
financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its
recoverable amount.
Recoverable amount is the higher of an asset’s fair value less costs to sell and value-in-use. The value-in-use is the present
value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-
generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a
cash-generating unit.
(y)
Intangible asset
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value
at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible
assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are
subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss
arising from the derecognition of intangible assets are measured as the difference between net disposal proceeds and the
carrying amount of the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually.
Changes in the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation
method or period.
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for
impairment or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried
at cost less accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and are not
subsequently reversed.
50
EUROZ LIMITED ANNUAL REPORT 2018
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(z) New standards and interpretations
The Australian Accounting Standards Board (‘AASB’) has issued the following new and amended accounting standards and
interpretations that have mandatory application dates for future reporting periods. The group has decided against the early
adoption of any of these standards.
AASB No.
Title
AASB 9
Financial Instruments
AASB 2010-7
AASB 2014-1
Amendments arising from Accounting Standards arising from AASB 9
(December 2010)
Amendments to Australian Accounting Standards Part E -
Financial Instruments
Application date
of standard *
1 January 2018
1 January 2018
Part E -
1 January 2018
AASB 2014-5
Amendments to Australian Accounting Standard Arising From AASB 15
1 January 2018
AASB 2014-7
AASB 2014-10
AASB 2015-8
AASB 2015-10
AASB 2016-5
AASB 2017-4
AASB 2017-5
AASB 2017-6
AASB 2017-7
AASB 2018-1
AASB 2018-2
Amendments to Australian Accounting Standard Arising From AASB 9
(December 2014)
1 January 2018
Amendments to Australian Accounting Standard – Sale of Contribution
of Assets Between Investors and its Associates or Joint Venture
1 January 2018
Amendments to Australian Accounting Standards – Effective Date of
AASB 15
1 January 2018
October 2015
Amendments to Australian Accounting Standards – Effective Date of
Amendments to AASB 10 and AASB 128.
1 January 2018
December
2015
Amendments to Australian Accounting Standards – Classification and
Measurement of Share-based Payment Transactions [AASB 2]
1 January 2018
July 2016
Amendments to Australian Accounting Standards – Uncertainty over
Income Tax Treatments
1 January 2019
July 2017
Amendments to Australian Accounting Standards – Effective Date of
Amendments to AASB 10 and AASB 128 and Editorial Corrections
1 January 2018
December
2017
Amendments to Australian Accounting Standards – Prepayment
Features with Negative Compensation
1 January 2019
October 2017
Amendments to Australian Accounting Standards – Long-term Interests
in Associates and Joint Ventures
1 January 2019
December
2017
Amendments to Australian Accounting Standards – Annual
Improvements 2015-2017 Cycle
1 January 2019
February 2018
Amendments to Australian Accounting Standards – Plan Amendment,
Curtailment or Settlement
1 January 2019
March 2018
Issue date
December
2014
September
2012
June 2014
December
2014
December
2014
December
2014
AASB 15
Revenues from Contracts with Customers
1 January 2018
October 2015
AASB 16
Leases
1 January 2019
February 2016
AASB 1059
Service Concession Arrangements: Grantors
1 January 2019
July 2017
AASB
Interpretation 23
Not yet issued
by the AASB
Uncertainty over Income Tax Treatments
1 January 2019
June 2017
Conceptual Framework for Financial Reporting#
1 January 2020
March 2018
* Annual reporting periods beginning after
# The IASB issued the revised conceptual framework in March 2018. The AASB are yet to issue the equivalent pronouncement.
EUROZ LIMITED ANNUAL REPORT 2018
51
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(z) New standards and interpretations (cont’d)
The consolidated group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued
by the AASB that are mandatory for the current reporting period. The adoption of these Accounting Standards and
Interpretations did not have a significant impact on the financial performance or position of the consolidated group.
The consolidated group believes the most significant new standards to be adopted include: AASB 9 – Financial Instruments,
AASB 15 – Revenue from Contracts with Customers and AASB 16 – Leases.
The consolidated group has made an initial assessment on the impact of these standards.
Following this assessment it is concluded that AASB 9 and AASB 15 will not have a significant impact on the consolidated
group’s primary statements. The consolidated group will address the additional and new disclosure requirements under
these standards upon adoption.
In relation to AASB 16, the consolidated group’s initial assessment is based on expected operating leases in place at the date
of adoption being 1 July 2019. The consolidated group’s initial assessment may therefore change significantly depending on
the lease arrangements in place at the time of adoption. However, based on current expectations the consolidated group
believes the initial adoption of this standard on 1 July 2019 will see the recognition of a right to use asset in the region of $5.1
million with a materially consistent liability.
The anticipated effect to the profit or loss from the adoption of the new leases standard for year 1 is expected to be in the
region of decreasing expenditure recognised in the profit or loss by $0.4 million in comparison to the current treatment.
The effect of this new standard on cash flows is nil.
Several other amendments to standards and interpretations on or after 1 July 2018 have also not been applied and the Group
does not expect material impact to the annual and half year consolidated financial statements.
2. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements incorporated in the financial statements are based on historical knowledge and best available current
information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data,
obtained both externally and within the group.
Key estimates and judgments
(i)
Impairment
At each reporting date, the consolidated group compares the carrying values and market values of investments to
determine whether there is any indication of impairment. If impairment indicators exist, any excess of the investment entity’s
carrying value over the recoverable amount is expensed to the statement of profit or loss.
Where it is not possible to estimate the recoverable amount of an individual asset, the consolidated group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
(ii) Classification of inventories
The consolidated group has decided to classify investments in listed securities as held for trading. These securities are
accounted for at fair value. Any increments or decrements in their value at year end are charged or credited to the
statement of profit or loss.
(iii)
Taxation
Judgement is required in assessing whether deferred tax assets and certain deferred tax liabilities are recognised on the
statement of financial position. Deferred tax assets, including those arising from temporary differences and tax losses, are
recognised only where it is considered more likely than not they will be recovered, which is dependent on the generation of
sufficient future taxable profits. Deferred tax liabilities arising from temporary differences are recognised to the extent that
there are future profits.
(iv) Goodwill
Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might
be impaired. For the purpose of impairment testing, the goodwill on acquisition of Blackswan Equities Limited is allocated
to private client broking cash-generating unit which represents the lowest level at which it is monitored for internal
management purposes. At 30 June 2018, goodwill totalling $2,803,345 has been allocated to the private client broking
cash-generated unit. The assumptions used for determining the recoverable amount are based on past experience and
expectations for the future. Projected cash flows for each cash-generated unit are discounted using an appropriate discount
rate and a value in use is determined over a 5 year life. The discount rate deemed applicable at 30 June 2018 amounted to
10.29%. The Board have assessed that there is no indication the goodwill is impaired.
In addition, the goodwill on the acquisition of Entrust totalling $5,639,200 has been allocated to the performance of this
Company as a whole. The assumptions used for determining the recoverable amount are based on past experience and
expectations for the future. Projected cash flows for each cash-generated unit are discounted using an appropriate discount
rate and a value in use is determined over a 5 year life. The discount rate deemed applicable at 30 June 2018 amounted to
10.29%. The Board have assessed that there is no indication the goodwill is impaired.
52
EUROZ LIMITED ANNUAL REPORT 2018
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
2. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT’D)
(v)
Intangible assets
Upon acquisition of Entrust, Euroz acquired $1,736,240 in other intangible assets consisting 3 separate client portfolios.
These assets were tested for impairment. The assumptions used for determining the recoverable amount was based on past
experience and expectations for the future. Projected cash flows for each cash-generated unit were discounted using an
appropriate discount rate and a value in use was determined over a 5 year life. The discount rate deemed applicable at 30
June 2018 amounted to 10.29%. The Board have assessed that there is no indication these assets are impaired.
3.
SEGMENT INFORMATION
Identification of reportable segments
The consolidated group has identified its operating segments based on the internal reports that are reviewed and used by the
executive team (the chief operating decision makers) in assessing performance and in allocating resources.
Types of products and services
Stockbroking & Corporate Finance Activities
Stockbroking business offering trading of Australian securities, post trade reporting, corporate finance and provision of company
research.
Principal Trading
Principal trading relates to the purchase and sale of securities by the consolidated group.
Funds Management
The consolidated group provides funds management services.
Investments
The consolidated group invests in listed and unlisted securities from which it derives dividends.
Wealth Management
The consolidated group provides wealth management services including the administration of funds under management.
Basis of accounting for purpose of reporting by operating segments
The accounting policies used by the consolidated group in reporting segments internally are consistent with those adopted in the
financial statements of the consolidated group, unless otherwise stated.
Segment assets and liabilities
Where an asset is used across multiple segments, the asset is allocated to that segment that receives majority economic value
from that asset.
Liabilities are allocated to segments where there is a direct nexus between the liability and the operations of the segment.
EUROZ LIMITED ANNUAL REPORT 2018
53
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
3.
SEGMENT INFORMATION (CONT’D)
Segment performance
Stockbroking
& Corporate
Finance
Activities
$
Principal
Trading
$
Funds
Management
$
Investment
Income
$
Wealth
Management
$
Total
$
40,926,996
10,105,513
13,585,324
-
8,860,642
73,478,475
340,241
270,048
9,567
34,050
41,469
47,351
19,409
458,037
-
4,130,532
64,638
4,499,268
2018
Sales and other fees
Interest revenue
Other revenues
Total segment revenue
41,537,285
10,149,130
13,626,793
4,177,883
8,944,689
78,435,780
Segment net operating
profit/(loss) after tax
Depreciation and
amortisation
Gain/(Loss) on fair value
of investments
10,153,858
803,614
3,735,118
12,525,095
2,115,640
29,333,325
231,376
-
70,700
-
7,336
309,412
-
1,909,697
-
11,742,467
-
13,652,164
Segment assets
33,530,935
13,148,694
9,267,321
100,812,830
4,219,445
160,979,225
Fair value of
investments
-
12,855,088
-
82,106,650
-
94,961,738
Capital expenditure
360,458
-
10,224
-
24,726
395,408
Segment liabilities
5,609,795
167,525
2,023,810
21,621,337
1,081,733
30,504,200
Stockbroking
& Corporate
Finance
Activities
$
Principal
Trading
$
Funds
Management
$
Investment
Income
$
Wealth
Management
$
Total
$
38,184,072
8,103,956
3,359,285
-
8,043,639
57,690,952
424,413
40,608
1,072
21,636
46,743
154,222
-
3,054,396
9,979
55,748
636,429
3,172,388
2017
Sales and other fees
Interest revenue
Other revenues
Total segment revenue
38,649,093
8,126,664
3,406,028
3,208,618
8,109,366
61,499,769
Segment net operating
profit/(loss) after tax
Depreciation and
amortisation
Gain/(Loss) on fair value
of investments
7,905,662
548,044
(1,817,750)
9,322,250
1,973,156
17,931,362
196,220
-
39,828
-
130
236,178
-
1,223,040
-
7,661,404
-
8,884,444
Segment assets
36,734,909
5,049,120
6,558,166
85,633,936
4,847,721
138,823,852
Fair value of
investments
-
5,049,120
Capital expenditure
396,779
-
-
1,516
66,131,333
-
71,180,453
-
2,603
400,898
Segment liabilities
5,349,262
40,760
831,221
12,487,612
813,695
19,522,550
Entity-wide disclosures
The consolidated group predominately operates with in the geographical region of Australia. Therefore, the total revenue and non-
current assets are reflected on the face of the financial statements.
During the year ended 30 June 2018 approximately 19.1% (2017: 9.3%) of the consolidated group’s external revenue was derived
from management fees, performance fees and dividends from Ozgrowth Limited and Westoz Investment Company Limited.
54
EUROZ LIMITED ANNUAL REPORT 2018
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
4.
REVENUE
Revenue from operating activities
Brokerage
Underwriting and placement fees
Performance and management fees
Wealth management fees
Proceeds on sale of principal trading shares
Corporate retainers
Other income
Interest received
Other revenue
Dividend received
2018
$
16,409,425
10,690,920
20,289,350
6,635,598
10,105,513
9,347,626
2017
$
15,276,166
19,103,633
5,850,861
6,022,957
8,103,759
3,333,281
73,478,432
57,670,657
458,036
336,144
4,163,168
4,957,348
636,429
105,802
3,066,881
3,809,112
Total Revenue
78,435,780
61,499,769
5. PROFIT BEFORE INCOME TAX EXPENSE
Profit before income tax expense is determined after taking in account the following specific expenses:
Rental expenses relating to operating lease
Superannuation expense
Share based payments – PRP
1,932,963
1,127,798
1,406,147
1,854,769
1,133,418
1,058,057
The Blackswan Equities Limited Group of companies were deregistered in the current period resulting in a loss on deconsolidation
to the Consolidated Statement of Profit or Loss and Other Comprehensive Income totalling $29,572.
6.
INCOME TAX
The components of tax expense comprise:
Current tax
Deferred tax
18,250,461
(4,673,346)
13,577,115
4,220,734
1,981,524
6,202,258
Numerical reconciliation between tax expense and pre-tax accounting profit
Income tax using company’s tax rate of 30% (2017: 30%)
12,873,132
7,240,086
Add tax effect of:
- other non-allowable items
Less tax effect of:
- other
- franked dividends received
Income tax attributable to entity
The applicable weighted average effective tax rates are as follows:
3,581,900
16,455,032
-
2,877,917
13,577,115
31.64%
2,074,715
9,314,801
12,403
3,100,140
6,202,258
25.70%
EUROZ LIMITED ANNUAL REPORT 2018
55
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
6.
INCOME TAX (CONT’D)
Reconciliations
i. Gross movements
The overall movement in the deferred tax account is as follows:
Balance at 1 July
Recognised in statement of profit or loss
Charge to equity
Balance at 30 June
ii. Deferred tax liability
Movement in temporary differences during the year
Fair value gain adjustments
Balance at 1 July
Recognised in the statement of profit or loss
Balance at 30 June
Other
Balance at 1 July
Recognised in the statement of profit or loss
Balance at 30 June
iii. Deferred tax assets
Movement in temporary difference during the year
Fair value gain adjustments
Balance at 1 July
Recognised in the statement of profit or loss
Balance at 30 June
Provisions
Balance at 1 July
Recognised in the statement of profit or loss
Balance at 30 June
Other
Balance at 1 July
Charge to equity
Recognised in the statement of profit or loss
Balance at 30 June
Tax consolidation legislation
2018
$
2017
$
6,443,403
(4,891,040)
217,694
1,770,057
7,759,701
(1,981,524)
665,226
6,443,403
431,422
1,642,035
2,073,457
683,265
(99,121)
584,144
2,657,601
3,027,368
(2,784,212)
243,156
927,467
195,796
1,123,263
3,603,255
217,694
(759,710)
3,061,239
4,427,658
375,494
55,928
431,422
439,971
243,294
683,265
1,114,687
5,792,631
(2,765,263)
3,027,368
702,290
225,177
927,467
2,080,245
665,226
857,784
3,603,255
7,558,090
Euroz Limited and its wholly-owned Australian subsidiaries implemented the tax consolidation legislation as of 1 July 2003. The
accounting policy on implementation of the legislation is set out in Note 1(b). The impact on the income tax expense for the year is
disclosed in the tax reconciliation above.
The entities have also entered into a tax sharing and funding agreement. Under the terms of this agreement, the wholly-owned
entities reimburse Euroz Limited for any current income tax payable by Euroz Limited arising in respect of their activities. The
reimbursements are payable at the same time as the associated income tax liability falls due and have therefore been recognised
as a current tax-related receivable by Euroz Limited. In the opinion of the Directors, the tax sharing agreement is also a valid
agreement under the tax consolidation legislation and limits the joint and several liability of the whollyowned entities in the case of
a default by Euroz Limited.
EUROZ LIMITED ANNUAL REPORT 2018
56
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
2018
$
2017
$
7.
CASH AND CASH EQUIVALENTS
Cash at bank and on hand
39,390,169
41,152,236
8. TRADE AND OTHER RECEIVABLES
Trade receivables
2,181,061
1,855,645
All trade receivables relating to brokerage and principal trading have been transferred to Pershing Securities (Australia) Pty
Ltd (clearing participant on behalf of Euroz Securities Limited) who provides a trust account facility as part of the clearing and
settlement service.
9.
INVENTORIES
Securities in unlisted companies (at cost) (i)
Trading securities in listed companies (at cost) (i)
Fair value adjustments (ii)
Total
(i) These securities are held for trade purposes.
(ii) The fair value adjustment is based on the closing price of each investment at year end.
10. OTHER CURRENT ASSETS
Prepayments
Accrued income
Total
11. LONG TERM RECEIVABLE
588,040
10,086,594
2,180,453
12,855,087
959,262
3,143,973
4,103,235
527,000
4,244,220
277,899
5,049,119
766,246
452,048
1,218,294
Security deposit
5,000,000
5,000,000
Deposit held by Pershing Securities (Australia) Pty Ltd (clearing participant on behalf of Euroz Securities Limited).
12.
INVESTMENTS
Cost of investment in managed investment schemes
Fair value adjustments (i)
Total
(i) The fair value adjustment is based on the closing unit value of the scheme.
12,732,598
1,787,357
14,519,955
8,600,000
615,893
9,215,893
EUROZ LIMITED ANNUAL REPORT 2018
57
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
13.
INVESTMENT ENTITIES AT FAIR VALUE
Listed ordinary shares in investment entities at fair value
through profit or loss
Reconciliation
Reconciliation of the fair values at the beginning
and end of the current financial year are set out below:
Opening fair value
Additions
Revaluation increments
Closing fair value
2018
$
2017
$
67,586,696
56,915,440
56,915,440
100,254
10,571,002
47,121,275
1,698,577
8,095,588
67,586,696
56,915,440
Investment entities encompass listed entities – Westoz Investment Company Limited and Ozgrowth Limited. While the
consolidated group is deemed to control these entities, exemption from consolidation is obtained as the Company meets the
definition of investment entity under AASB 2013-5 – Investment Entities. Accordingly, these investments are fair valued.
14. PLANT AND EQUIPMENT
Leasehold improvements
At cost
Less: Accumulated amortisation
Software
At cost
Less: Accumulated depreciation
Office equipment
At cost
Less: Accumulated depreciation
Furniture, fixtures and fittings
At cost
Less: Accumulated depreciation
540,616
(273,812)
266,804
177,958
(60,313)
117,645
467,788
(194,438)
273,350
99,321
(20,541)
78,780
736,579
537,301
(138,655)
398,646
76,167
(26,929)
49,238
255,699
(148,192)
107,507
163,770
(68,579)
95,192
650,583
58
EUROZ LIMITED ANNUAL REPORT 2018
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
14. PLANT AND EQUIPMENT (CONT’D)
Reconciliations
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning and end of the current and previous
financial years are set out below:
2018
Carrying amount at 1 July 2017
Additions
Depreciation / amortisation expense
Carrying amount at 30 June 2018
2017
Carrying amount at 1 July 2016
Additions
Depreciation / amortisation expense
Carrying amount at 30 June 2017
Leasehold
Improvements
$
Plant and
Equipment
$
398,646
3,312
(135,154)
266,804
196,964
295,694
(94,012)
398,646
251,937
392,096
(174,258)
469,775
288,899
105,204
(142,166)
251,937
2018
$
Total
$
650,583
395,408
(309,412)
736,579
485,863
400,898
(236,178)
650,583
2017
$
15. DEFERRED TAX ASSETS
Deferred tax asset (Note 6)
4,427,658
7,558,090
Deferred tax assets are recognised only to the extent that it is probable that future taxable profits can be generated.
16.
INTANGIBLE ASSETS
Goodwill (refer (a) below)
Other intangible assets (refer (b) below)
(a) Goodwill
Opening balance
Deconsolidation of Blackswan
Addition
Balance
Split of goodwill:
Goodwill on acquisition of Blackswan
Goodwill on acquisition of Entrust
8,442,545
1,736,240
10,178,785
8,472,312
(29,767)
-
8,442,545
8,472,312
1,736,240
10,208,552
8,430,477
-
41,835
8,472,312
2,803,345
5,639,200
8,442,545
Both goodwill balances are deemed to have an indefinite useful life and accordingly an impairment test was performed at
reporting date. Based on this assessment at 30 June 2018, no impairment was considered necessary. Note 2 (iv) contains additional
information on this assessment.
While the Blackswan group of companies were deregistered in the current period, the Blackswan operating unit was integrated
into Euroz Securities Limited upon the initial acquisition and therefore, this deregistration had an insignificant impact on the
goodwill balance.
EUROZ LIMITED ANNUAL REPORT 2018
59
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
16.
INTANGIBLE ASSETS (CONT’D)
Other intangible assets
Opening balance
Addition
Balance
Split of other intangible assets:
Client portfolio A
Client portfolio B
Client portfolio C
2018
$
1,736,240
-
1,736,240
2017
$
1,721,835
14,405
1,736,240
$
500,000
80,000
1,156,240
1,736,240
The carrying value of all 3 assets was assessed at reporting date for impairment and no impairment was considered necessary.
Note 2 (v) contains further information on this impairment assessment.
17. TRADE AND OTHER PAYABLES
Other payables and accruals
2018
$
4,637,251
2017
$
3,346,290
All trade creditors relating to brokerage and principal trading have been transferred to Pershing Securities (Australia) Pty Ltd who
provides a trust account facility as part of the clearing and settlement service.
18. CURRENT TAX LIABILITIES
Provision for taxation
5,075,257
3,251,272
19. SHORT TERM PROVISIONS
Dividends
Employee entitlements (annual leave)
Employee entitlements (long service leave)
Total
Dividends
14,891,518
1,370,079
1,867,515
18,129,112
8,854,416
1,346,305
1,566,564
11,767,285
This provision represents the dividend declared by the Board before the reporting date and to be paid out to shareholders
subsequent to year end.
Movements in each class of provisions, other than employee benefits, are set out below:
Carrying amount at 1 July
Additional provisions recognised
Amounts paid out
Carrying amount at 30 June
20. DEFERRED TAX LIABILITIES
Deferred tax liability (Note 6)
60
8,854,416
17,708,834
(11,671,732)
14,891,518
2018
$
3,622,711
11,671,283
(6,439,578)
8,854,416
2017
$
2,657,601
1,114,687
EUROZ LIMITED ANNUAL REPORT 2018
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
21. LONG TERM PROVISIONS
Employee entitlements (long service leave)
4,979
43,016
2018
$
2017
$
22. CONTRIBUTED EQUITY
(a) Share capital
Ordinary shares
Issued and paid up capital consisting of ordinary shares
(net of treasury shares)
(b) Movements in ordinary share capital
2018
Shares
2017
Shares
2018
$
2017
$
155,879,961
156,654,382
102,343,793
103,246,026
At the beginning of the reporting period
Acquisition of Treasury shares
Vested shares under Performance Rights Plan
Shares bought back
At the end of the year
(c) Movements in ordinary share capital
At the beginning of the reporting period
Acquisition of Treasury shares
Vested shares under Performance Rights Plan
Shares bought back
At the end of the year
2018
Shares
156,654,382
(1,659,000)
884,579
-
2017
Shares
158,574,382
(1,900,000)
-
(20,000)
155,879,961
156,654,382
2018
$
103,246,026
(1,908,356)
1,006,123
-
2017
$
105,226,509
(1,964,883)
-
(15,600)
102,343,793
103,246,026
2018
Shares
2017
Shares
2018
$
2017
$
(d) Treasury shares
Balance of treasury shares at the end of the reporting period
(5,109,421)
(4,335,000)
(5,251,166)
(4,465,952)
Treasury shares were acquired by Employee Share Trust at various times during the year. The acquisition of Treasury shares forms
part of the Performance Right Plan.
(e) Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion
to the number of and amounts paid on the shares held. Ordinary shares have no par value.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and
upon a poll each share is entitled to one vote.
EUROZ LIMITED ANNUAL REPORT 2018
61
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
22. CONTRIBUTED EQUITY (CONT’D)
(f) Options
There were no options on issue at 30 June 2018 (30 June 2017: Nil).
(g) Share based payments reserve
The reserve records items recognised as expenses on valuation of share based payments. The movement in the current
period totalling $1,435,476 (2017: $1,058,057) relates to the vesting expense related to the fair value of performance rights
issued in the prior year and the current year in connection with the Performance Rights Plan.
Balance on share based payment reserve at 1 July
Recognised during the year
Vested shares under Performance Rights Plan
Balance on share based payments reserve at 30 June
(h) Capital management
2018
$
2,217,421
1,435,476
(1,006,123)
2,646,774
2017
$
1,159,364
1,058,057
-
2,217,421
The Directors primary objective is to maintain a capital structure that ensures the lowest cost of capital available to the
group. At reporting date, the group has no external borrowings and significant cash reserves. As the holder of various
Australian Financial Services Licences and as a market participant of the Australian Securities Exchange the group is
exposed to externally imposed capital requirements, which have been complied with at year end and throughout the year.
23. DIVIDENDS
Ordinary shares
Interim dividend for the half year ended 31 December 2017 of 1.75 cents
(2017 – 1.75 cents) per fully paid ordinary share paid on 2 February 2018.
Fully franked based on tax paid @ 30%
Final dividend declared and provided for at 30 June 2018 of 9.25 cents
(2017 – 5.5 cents) per fully paid ordinary share paid on 6 August 2018.
Fully franked based on tax paid @ 30%
Total dividends provided for or paid
2,817,314
2,817,314
14,891,518
17,708,832
8,854,416
11,671,730
Of the total dividends paid during the year, $22,110 (2017: $34,246) was paid to the Euroz Share Trust and is undistributed.
Therefore, it has been eliminated on consolidation.
Franked dividends
The franked portions of the dividends recommended after 30 June 2018 will be franked out of existing franking credits or out of
franking credits arising from the payment of income tax in the year ending 30 June 2018.
Franking credits available for subsequent financial years based on a tax
rate of 30% (2017: 30%)
17,922,906
15,704,851
These dividends are fully-franked and therefore, there are no income tax consequences for the owners of Euroz Limited.
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
(a) franking credits that will arise from the payment of the current tax liability
(b) franking debits that will arise from the payment of dividends recognised as a liability at the reporting date
(c) franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date, and
(d) franking credits that may be prevented from being distributed in subsequent financial years.
The consolidated amounts include franking credits that would be available to the parent entity if distributable profits of controlled
entities were paid as dividends.
62
EUROZ LIMITED ANNUAL REPORT 2018
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
24. FINANCIAL INSTRUMENTS
(a) Financial risk management
The group’s financial instruments consist of deposits with banks, trade receivables and payables, short term investments and
available for sale investments. Derivative financial instruments are not used by the group. Senior executives meet regularly
to analyse and monitor the financial risk associated with the financial instruments used by the group.
(b) Financial risk exposure and management
(i)
Interest rate risk
The group has no borrowings and therefore is not exposed to interest rate risk associated with debt. The group has
significant cash reserves and the interest income earned from these cash reserves will be affected by movements in
the interest rate. A sensitivity analysis has been provided in the note to illustrate the effect of interest rate movements
on interest income earned.
(ii)
Liquidity risk
The group manages liquidity risk using forward cash flow projections, maintaining cash reserves and having no
borrowings or debt.
Trade and other payables are expected to be paid as follows:
Less than 1 month
(iii) Credit risk
2018
$
4,637,251
2017
$
3,346,290
The maximum exposure to credit risk, excluding the value of any collateral or security, at reporting date is the carrying
amount of the financial assets disclosed in the statement of financial position. There is no collateral or security held for
those assets at 30 June 2018.
Credit risk arises from exposure to customers and deposits with banks. Senior management monitors its exposure
to customers on a regular basis to ensure recovery and repayment of outstanding amounts. Cash deposits are only
made with Australian based banks. All trade debtors relating to brokerage and principal trading have been transferred
to Pershing Securities (Australia) Pty Ltd who provides a trust account facility as part of the clearing and settlement
service. Trade receivables are usually paid within 30 days.
The carrying amount of the consolidated entity’s financial assets represents the maximum credit exposure.
The consolidated entity’s maximum exposure to credit risk at the reporting date was:
Cash and cash equivalents
Receivables
Long term deposit
Impairment losses
None of the consolidated group’s receivables are past due date (2017: Nil).
Carrying Amount
2018
$
39,390,169
2,181,061
5,000,000
2017
$
41,152,236
1,855,645
5,000,000
46,571,230
48,007,881
EUROZ LIMITED ANNUAL REPORT 2018
63
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
24. FINANCIAL INSTRUMENTS (CONT’D)
(b) Financial risk exposure and management (cont’d)
(iv) Financial instruments composition and maturity analysis
Weighted Average
Effective Interest Rate
Floating Interest Rate
Non-Interest Bearing
2018
%
2017
%
2018
$
2017
$
2018
$
2017
$
FINANCIAL ASSETS
Cash and cash equivalents
1.46
1.14
39,390,169
41,152,236
-
-
Trade and other receivables
Financial assets held for trading
Financial assets at fair value
through profit and loss
Other investments
Long term deposit
Total financial assets
FINANCIAL LIABILITIES
Trade and other payables
-
-
-
-
-
-
-
-
2,181,061
1,855,645
12,855,087
5,049,119
67,586,696
56,915,440
14,519,955
9,215,893
0.75
0.75
5,000,000
5,000,000
-
-
44,390,169
46,152,236
97,142,799
73,036,097
-
-
4,637,251
3,346,290
The following table details the consolidated group’s fair value of financial instruments categorised by the following levels:
Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities.
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as
prices) or indirectly (derived from prices).
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
2018
Assets
Investments
Total Assets
2017
Assets
Investments
Total Assets
Level 1
$
Level 2
$
Level 3
$
Total
$
94,219,411
94,219,411
742,327
742,327
-
-
94,961,738
94,961,738
Level 1 Level 2 Level 3
Total
70,544,395
636,057
70,544,395
636,057
-
-
71,180,452
71,180,452
(v)
Sensitivity analysis
Assuming all variables remain constant and the interest rate fluctuated by 1% at year end the effect on the
consolidated group’s equity and profit as follows:
Increase by 1%
Decrease by 1%
2018
$
310,731
(310,731)
2017
$
323,066
(323,066)
64
EUROZ LIMITED ANNUAL REPORT 2018
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
24. FINANCIAL INSTRUMENTS (CONT’D)
(b) Financial risk exposure and management (cont’d)
Assuming all variables remain constant and the equity market fluctuated by 5% at year end the effect on the group’s equity
and profit is as follows:
Increase by 5%
Decrease by 5%
25. REMUNERATION OF AUDITORS
Audit services
Audit and review of financial reports for the Group
Fees paid to PKF Mack
Other services
Tax compliance services
Other services
2018
$
3,323,661
(3,323,661)
2017
$
2,491,315
(2,491,315)
168,000
168,000
39,800
17,620
57,420
36,200
14,500
50,700
26. CONTINGENT LIABILITIES
The parent entity and consolidated group had contingent liabilities at 30 June as follows:
Secured guarantees in respect of:
Operating lease of a controlled group entity
807,699
807,699
As detailed in note 11 the consolidated group has a deposit with Pershing Securities (Australia) Pty Ltd as part of Euroz Securities
Limited third party clearing arrangements. This deposit totalled $5,000,000 at reporting date (2017: $5,000,000).
The Group has no contingent assets at reporting date (2017: Nil).
27. COMMITMENTS FOR EXPENDITURE
Operating leases
Commitments for minimum lease payments in relation to noncancellable
operating leases are payable as follows:
Within one year
Later than one year but not later than five years
Later than five years
1,409,270
1,901,319
-
1,357,195
3,205,972
-
Commitments not recognised in the financial statements
3,310,589
4,563,167
The lease on the premises at Level 18 Alluvion, 58 Mounts Bay Road is for the period of 10 years commencing 2 July 2010 and
expiring on 1 July 2020.
The licence on the premises at Level 3, 20 Bond Street, Sydney NSW is for the period of 5 years commencing 1 December 2016 and
expiring on 30 November 2021.
The licence on the premises at Level 16, 385 Bourke Street, Melbourne is for the period of 8 years commencing 1 June 2015 and
expiring on 31 May 2022.
28. EMPLOYEE BENEFITS
Employee benefit and related on-costs liabilities
Provision for employee entitlements
Aggregate employee benefit and related oncosts liabilities
3,242,574
3,242,574
2,955,885
2,955,855
EUROZ LIMITED ANNUAL REPORT 2018
65
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
29. RELATED PARTIES
(a) Key Management Personnel compensation
Short-term employee benefits
Post-employment benefits
Share based payments
Total compensation
2018
$
4,882,092
174,332
679,064
5,735,488
2017
$
5,324,014
245,234
521,253
6,090,501
(b)
Individual Key Management Personnel compensation disclosure
Information regarding individual KMP compensation and some equity instruments disclosures as required by Corporations
Regulation is provided in the remuneration report section of the Directors’ Report.
Apart from the details disclosed in this note, no KMP has entered into a material contract with the group since the end of the
previous financial year and there were no material contracts involving KMP interest existing at year end.
(c) Parent entity
The ultimate parent entity within the group is Euroz Limited.
(d) Share-based payments
During the year a performance right was issued to 92 employees (2017: 87 employees). This performance right entitles the
holder to a number of shares in Euroz Limited calculated as 25% of their bonus entitlement for the year. At point of issue,
these performance rights are subject to a 4 year vesting period. The fair value of each performance right is calculated as 25%
of the individual’s bonus entitlement.
(e) Wholly-owned group transactions
Wholly owned group
The wholly owned group consists of Euroz Limited and its wholly owned controlled entities. See Note 30.
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated.
Transactions with related parties consisting of:
(i) Subsidiaries
- Loans advanced by Euroz Limited to subsidiaries
- Payments of dividends to Euroz Limited by subsidiaries
- Management fees charged by Euroz Securities Limited to subsidiaries
- Management fees charged by Prodigy Investment Partners Limited
to subsidiaries
(ii) Other
2018
$
2017
$
14,198,563
19,550,000
1,466,685
12,610,616
10,300,000
1,651,790
975,283
731,262
- Dividends received by Euroz Limited from investment entities
- Management fee received by the Euroz Group from investment entities
- Performance fee received by the Euroz Group from investment entities
2,833,800
2,390,837
9,725,000
2,768,925
2,062,232
920,000
Ownership interests in related parties
Interests held in controlled entities are set out in note 30.
Other transactions with Directors and specified Executives
During the year ended 30 June 2018 the Directors and KMP transacted share business through Euroz Securities Limited on
normal terms and conditions.
Aggregate amounts of the above transactions with Directors and KMP of the consolidated group:
Amounts recognised as revenue
Brokerage earned on Key Management Personnel accounts
42,562
38,259
66
EUROZ LIMITED ANNUAL REPORT 2018
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
30. INVESTMENTS IN CONTROLLED ENTITIES
Name of entity
Country of
incorporation
Class of
shares
Equity holding
Cost of parent entity’s
investment
Euroz Securities Limited
Detail Nominees Pty Ltd
Australia
Ordinary
Australia
Ordinary
Zero Nominees Pty Ltd (i)
Australia
Ordinary
Westoz Funds Management Pty Ltd
Australia
Ordinary
Euroz Employee Share Trust
Australia
Ordinary
Ozgrowth Limited*
Australia
Ordinary
Westoz Investment Company Limited*
Australia
Ordinary
Prodigy Investment Partners Limited
Australia
Ordinary
Blackswan Equities Limited (i)
Australia
Ordinary
Flinders Investment Partners Pty Ltd (ii)
Australia
Ordinary
Dalton Street Capital Pty Ltd (ii)
Australia
Ordinary
Blackswan Corporate Pty Ltd (i)
Australia
Ordinary
Blackswan Wealth
Management Pty Ltd (i)
Australia
Ordinary
Westoz Australian Resources Limited
Australia
Ordinary
WIM Small Cap Limited
Entrust Private Wealth
Management Pty Ltd
Australia
Ordinary
Australia
Ordinary
Prodigy Flinders Pty Ltd (ii)
Australia
Ordinary
Prodigy Corporate Pty Ltd (ii)
Australia
Ordinary
Prodigy DSC Pty Ltd (ii)
Australia
Ordinary
The ultimate parent entity in the wholly owned group is Euroz Limited.
(i) Owned by Euroz Securities Limited
(ii) Owned by Prodigy Investment Partners Limited
2018
%
100
100
100
100
-
40.58
27.30
80
-
50
50
-
-
100
100
100
100
100
100
2017
%
2018
$
2017
$
100
100
100
100
-
40.52
27.22
80
100
50
50
100
100
100
100
100
100
100
100
25,000,000 25,000,000
-
-
-
-
1,450,000
1,450,000
-
-
-
-
-
-
1,900,000
1,900,000
-
2
2
-
-
1
1
6,604,000
2
2
-
-
1
1
7,800,000
7,800,000
2
2
1
2
2
1
A brief description of each entity (unless inactive and dormant) is as follows:-
(a)
(b)
(c)
Euroz Limited – Group Holding Company listed on the Australian Securities Exchange. Euroz Limited manages cash and
investments including significant positions in Ozgrowth Limited and Westoz Investment Company Limited.
Euroz Securities Limited – Financial Services Company providing stockbroking corporate finance and wealth management
services with a focus on Western Australian companies.
Westoz Funds Management Pty Ltd – Manages the mandates for two listed investment companies, Ozgrowth Limited and
Westoz Investment Company Limited with a focus on investing in opportunities with a Western Australian connection.
(d) Zero Nominees – Custodian Company holding shares on behalf of clients of Euroz Securities Limited.
(e) Detail Nominees - Dormant Company that was previously used to for settlement obligation in relation to shares for the Group.
(f)
(g)
(h)
(i)
Euroz Employee Share Trust - Vehicle established to acquire treasury shares on-market for distribution to eligible employees
in connection with the Performance Rights Plan.
Prodigy Investment Partners Limited – 80/20 joint venture with Mr Steve Tucker to create a multi boutique funds
management business. The first boutique funds management partnership was launched in August 2015 with Flinders
Investment Partners Pty Ltd. The second boutique, Dalton Street Capital Pty Ltd was launched in May 2016.
Blackswan Equities Limited – The activities of the Blackswan group of entities were transferred over to Euroz Securities
Limited. This entity was deregistered in the current year.
Blackswan Corporate Pty Ltd – The activities of the Blackswan group of entities were transferred over to Euroz Securities
Limited. This entity was deregistered in the current year.
EUROZ LIMITED ANNUAL REPORT 2018
67
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
30. INVESTMENTS IN CONTROLLED ENTITIES (CONT’D)
(j)
(k)
Blackswan Wealth Management Pty Ltd - The activities of the Blackswan group of entities were transferred over to Euroz
Securities Limited. This entity was deregistered in the current year.
Flinders Investment Partners Pty Ltd - Boutique fund manager specialising in investing in emerging companies. Prodigy
Investment Partners Limited, the controlling parent entered into a profit share arrangement with a trust resulting in a
minority interest.
(l)
Dalton Street Capital Pty Ltd - Boutique fund manager specialising in alternative investment strategies. Prodigy Investment
Partners Limited, the controlling parent entered into a profit share arrangement with a trust resulting in a minority interest.
(m)
Entrust Private Wealth Management Pty Ltd - Wealth management business providing advice in relation to wealth
management and strategic financial planning support for the entire Euroz Group.
*Although Ozgrowth Limited and Westoz Investment Company Limited are controlled entities, exemption from consolidation was derived from the
adoption of AASB 2013-5 Investment Entities.
31. EVENTS SUBSEQUENT TO REPORTING DATE
In August 2018, Euroz and Prodigy announced the launch of its third boutique funds management partnership, Equus Point Capital
(Equus). Equus is a market neutral strategy focusing on Australian equities.
Other than this matter, the Directors are not aware of any matter or circumstance subsequent to 30 June 2018 that has significantly
affected, or may significantly affect:
(a) the consolidated group’s operations in future financial years: or
(b) the results of those operations in future financial years: or
(c) the consolidated group’s state of affairs in future financial years.
32. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the year
Adjustments for:
Depreciation and amortisation
Share based payments
Unrealised loss / (gain) arising from investing activity investments
Loss on deconsolidation
Distributions received from investing activity investments
Distribution income reinvested
Changes in assets and liabilities
Decrease / (increase) in trade and other receivables
Decrease / (increase) in other current assets
Decrease / (Increase) in inventories
Decrease / (Increase) in deferred tax assets
Increase / (decrease) in trade and other payables
Increase / (decrease) in current tax liabilities
Increase / (decrease) in deferred tax liabilities
Increase / (decrease) in provisions (excluding dividends)
2018
$
29,333,325
309,412
1,435,476
(11,742,484)
29,572
(3,030,590)
(1,132,302)
(325,482)
(2,884,940)
(7,805,967)
3,130,432
1,290,961
1,823,985
1,542,914
286,689
2017
$
17,931,362
236,178
1,058,057
(7,661,408)
-
(3,075,861)
-
(305,964)
(69,989)
777,434
1,017,076
2,142,118
2,806,573
299,222
761,136
Net cash from / (used in) operating activities
12,261,001
15,915,934
68
EUROZ LIMITED ANNUAL REPORT 2018
Notes to the Financial Statements (Cont’d)
For the year ended 30 June 2018
33. EARNINGS PER SHARE
Basic earnings per share
Diluted earnings per share
2018
Cents
19.91
19.42
2018
Number
2017
Cents
12.30
12.03
2017
Number
Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in
calculating basic earnings per share.
Weighted average number of ordinary shares and potential ordinary
shares (including treasury shares) used as the denominator in calculating
diluted earnings per share.
156,988,680
157,436,897
160,989,382
160,990,695
The profit after tax figures used to calculate the earnings per share for both the basic and diluted calculations was the same as
the profit figure from statement of profit or loss.
34. PARENT ENTITY DISCLOSURES
FINANCIAL POSITION
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Retained earnings
Reserves
2018
$
2017
$
34,794,547
120,376,753
155,171,300
19,961,112
1,658,457
21,619,569
102,379,250
28,572,116
13,594,961
118,685,279
132,280,240
12,169,390
396,518
12,565,908
103,258,624
14,268,921
Share Based Payment Reserve
2,600,365
2,186,787
Total equity
FINANCIAL PERFORMANCE
Profit for the year
Other comprehensive income
Total comprehensive income
35. COMPANY DETAILS
133,551,731
119,714,332
32,012,030
19,699,176
-
-
32,012,030
19,699,176
The registered office and principal place of business address of the Company is:
Euroz Limited
Level 18 Alluvion
58 Mounts Bay Road
PERTH WA 6000
EUROZ LIMITED ANNUAL REPORT 2018
69
Directors’ Declaration
For the year ended 30 June 2018
DIRECTORS’ DECLARATION
The Directors declare that:
1.
The financial statements, notes and additional disclosures included in the Directors’ Report and designated as audited, are in
accordance with the Corporations Act 2001 and:
(a)
(b)
(c)
comply with Accounting Standards and Corporations Regulations 2001;
give a true and fair view of the Company’s and consolidated group’s financial position as at 30 June 2018 and of their
performance for the year ended on that date;
the financial statements are in compliance with International Financial Reporting Standards, as stated in note 1 to the
financial statements.
2.
The Chief Executive Officer and Chief Financial Officer have declared in accordance with section 295A of the Corporations Act
2001 that:
(a)
(b)
(c)
the financial records of the Company for the financial year have been properly maintained in accordance with section 286
of the Corporations Act 2001;
the financial statements and notes for the financial year comply with Accounting Standards; and
the financial statements and notes for the financial year give a true and fair view.
3.
In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
ANDREW MCKENZIE
Executive Chairman
Date: 30 August 2018
ROBERT BLACK
Executive Director
70
EUROZ LIMITED ANNUAL REPORT 2018
Independent Auditor’s Report to the Members of Euroz Limited
For the year ended 30 June 2018
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF EUROZ LIMITED
Report on the Financial Report
Opinion
We have audited the accompanying financial report of Euroz Limited (the company), which comprises the
consolidated statement of financial position as at 30 June 2018, the consolidated statement of profit or loss
and other comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, notes comprising a summary of significant accounting
policies and other explanatory information, and the directors’ declaration of the company and the
consolidated entity comprising the company and the entities it controlled at the year’s end or from time to
time during the financial year.
In our opinion the financial report of Euroz Limited is in accordance with the Corporations Act 2001,
including:
i)
Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2018
and of its performance for the year ended on that date; and
ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we
comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance about whether the financial report is free from material misstatement. Our
responsibilities under those standards are further described in the Auditor’s Responsibility section of our
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the consolidated entity in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We
have also fulfilled our other ethical responsibilities in accordance with the Code.
Key Audit Matter
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 year. This matter was addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
this matter. Our description of how our audit addressed the matter is provided in that context.
EUROZ LIMITED ANNUAL REPORT 2018
71
Page | 54
Independent Auditor’s Report to the Members of Euroz Limited
For the year ended 30 June 2018
Carrying value and impairment of intangible assets
Why significant
How our audit addressed the key audit matter
At reporting date, the consolidated entity has
capitalised intangible assets including goodwill
totalling $10,178,785 as disclosed in Note 16.
Under Australian Accounting Standards, an entity
shall assess whether at the end of the reporting
period there is any indication that its intangible
assets are impaired. If any such indication exists,
the entity shall estimate the recoverable amount
of the asset. At year end, the consolidated entity
has concluded that there were no impairment
triggers. As a
impairment was
result no
recognised during the year.
The assumptions of indicators of impairment are
highly judgemental and include modelling key
assumptions and estimates based on past and
current performance that may be impacted by
future performance and economic conditions.
judgements and estimates
Key assumptions,
used in the consolidated entity’s assessment of
impairment of intangible assets are set out in the
financial report in Note 2 (iv) and (v). The
accounting policy in relation to intangible assets is
set out in Note 1 (y).
We evaluated the assumptions, methodologies and
conclusions used by the consolidated entity in
particular, those relating to the determination of
each Cash Generating Unit (“CGU”), forecast
inflows and inputs used to formulate them.
This included assessing the reasonableness of the
significant assumptions
the discount
rates adopted in the consolidated entity’s models
the
and performing sensitivity analysis on
consolidated entity’s inputs.
including
We assessed
the
anticipated future inflows from each CGU.
reasonableness of
the
We also considered the adequacy of the financial
report disclosures concerning
judgemental
nature of the consolidated entity’s assessment of
impairment of these intangible assets. These key
assumptions, judgements and estimates are set
out in the financial report in Note 2 (iv) and (v).
the
Other Information
Other information is financial and non-financial information in the annual report of the consolidated entity
which is provided in addition to the Financial Report and the Auditor’s Report. The directors are responsible
for Other Information in the annual report.
The Other Information we obtained prior to the date of this Auditor’s Report was the Director’s report. The
remaining Other Information is expected to be made available to us after the date of the Auditor’s Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, the auditor does
not and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of
the Remuneration Report.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or
our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information in
the Financial Report and based on the work we have performed on the Other Information that we obtained
prior the date of this Auditor’s Report we have nothing to report.
Directors’ Responsibilities 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 Note 1,
Page | 55
72
EUROZ LIMITED ANNUAL REPORT 2018
Independent Auditor’s Report to the Members of Euroz Limited
For the year ended 30 June 2018
the Directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of
Financial Statements, that the financial report complies with International Financial Reporting Standards.
In preparing the financial report, the Directors are responsible for assessing the consolidated entity’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using a
going concern basis of accounting unless the Directors either intend to liquidate the consolidated entity or to
cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our responsibility is to express an opinion on the financial report based on our audit. 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 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 aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report.
The procedures selected depend on the auditor’s judgement, including assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the entity’s preparation of the financial report that gives a true
and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness
of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial
report.
We conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the consolidated entity’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the
related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the consolidated entity to cease to continue as a going concern.
We evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the consolidated entity to express an opinion on the financial report. We are responsible for
the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
Page | 56
EUROZ LIMITED ANNUAL REPORT 2018
73
Independent Auditor’s Report to the Members of Euroz Limited
For the year ended 30 June 2018
The Auditing Standards require that we comply with relevant ethical requirements relating to audit
engagements. We also provide the Directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be communicated
in our report because the adverse consequences of doing so would reasonably be expected to outweigh the
public interest benefits of such communication.
Report on the Remuneration Report
Opinion
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2018.
In our opinion, the Remuneration Report of Euroz Limited for the year ended 30 June 2018 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.
PKF MACK
SHANE CROSS
PARTNER
30 AUGUST 2018
WEST PERTH
74
EUROZ LIMITED ANNUAL REPORT 2018
Page | 57
Shareholder Information
Ordinary Shares at 30 August 2018
A) DISTRIBUTION OF SHAREHOLDERS
Analysis of number of shareholders by size of holding:
Range
1 - 1,000
1,001 - 5,000
5,001-10,000
10,001 - 100,000
100,001 Over
TOTAL Holders
Unmarketable Parcels
Minimum $ 500.00 parcel at $ 1.2500 per unit
Holders
311
419
242
616
173
Shares
121,701
1,254,160
1,943,040
20,897,587
136,772,894
% Units
0.08
0.78
1.21
12.98
84.96
1,761
160,989,382
100.00
Minimum
Parcel Size
400
Holders
184
Units
27,800
B) TOP HOLDERS
The twenty largest holders of ordinary fully paid shares are listed below:
Rank
Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
17
19
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR JAY EVAN DALE HUGHES
MRS CATHERINE PATRICIA MCKENZIE
CPU SHARE PLANS PTY LTD
MR ANDREW MCKENZIE + MRS CATHERINE MCKENZIE
ICE COLD INVESTMENTS PTY LTD
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD DRP
ICE COLD INVESTMENTS PTY LTD
J P MORGAN NOMINEES AUSTRALIA LIMITED
MR JAY HUGHES + MRS LINDA HUGHES
MR ROBERT HIRZEL BLACK
MR SIMON DAVID YEO + MRS JENNIFER DALE YEO
CITICORP NOMINEES PTY LIMITED
ICON HOLDINGS PTY LTD
MRS MELANIE JANE CHESSELL
BNM HOLDINGS PTY LTD
ICE COLD INVESTMENTS PTY LTD
WESTRADE RESOURCES PTY LTD
MR SIMON DAVID YEO + MRS JENNIFER DALE YEO
20
MR GREGORY CHESSELL + MRS MELANIE CHESSELL
Shares
13,309,830
7,600,000
5,950,000
5,539,558
4,452,392
4,000,000
3,617,661
3,502,500
3,413,682
3,010,031
2,865,000
2,338,719
2,293,964
2,250,000
2,070,272
2,020,100
2,000,000
2,000,000
1,892,000
1,818,000
% Units
8.27
4.72
3.70
3.44
2.77
2.48
2.25
2.18
2.12
1.87
1.78
1.45
1.42
1.40
1.29
1.25
1.24
1.24
1.18
1.13
Total
Remainder
Grand Total
75,943,709
85,045,673
160,989,382
47.17%
52.83%
100.0%
EUROZ LIMITED ANNUAL REPORT 2018
75
Euroz Limited Contact Details
EUROZ SECURITIES LIMITED
Level 18 Alluvion
58 Mounts Bay Road
PERTH WA 6000
PO Box Z5036
St Georges Terrace
Perth 6831
Western Australia
T: +61 8 9488 1400
F: +61 8 9488 1477
eurozsecurities.com
Euroz Securities Limited
ACN 089 314 983
AFSL 243302
Participant of the ASX Group
WESTOZ FUNDS MANAGEMENT PTY LTD
Level 18 Alluvion
58 Mounts Bay Road
PERTH WA 6000
PO Box Z5036
St Georges Terrace
Perth 6831
Western Australia
T: +61 8 9321 7877
F: +61 8 9321 8288
westozfunds.com.au
Westoz Funds Management Pty Ltd
ACN 106 677 721
AFSL 285607
OZGROWTH LIMITED
Level 18 Alluvion
58 Mounts Bay Road
PERTH WA 6000
PO Box Z5036
St Georges Terrace
Perth 6831
Western Australia
T: +61 8 9321 7877
F: +61 8 9321 8288
ozgrowth.com.au
Ozgrowth Limited
ACN 126 450 271
WESTOZ INVESTMENT COMPANY LIMITED
Level 18 Alluvion
58 Mounts Bay Road
PERTH WA 6000
PO Box Z5036
St Georges Terrace
Perth 6831
Western Australia
T: +61 8 9321 7877
F: +61 8 9321 8288
westoz.com.au
Westoz Investment Company Limited
ACN 113 332 942
PRODIGY INVESTMENT PARTNERS LIMITED
Level 3
20 Bond Street
SYDNEY NSW 2000
T: +61 2 8651 3490
prodigyinvest.com.au
Prodigy Investment Partners Limited
ACN 600 471 430
AFSL 466173
FLINDERS INVESTMENT PARTNERS PTY LTD
Level 15
385 Bourke Street
MELBOURNE
VIC 3000
T: +61 3 9909 2690
flindersinvest.com.au
Flinders Investment Partners Pty Ltd
ACN 604 121 271
Flinders Investment Partners Pty Ltd is
a Corporate Authorised Representative
(#001234191) of Prodigy Investment
Partners Limited AFSL 466173
DALTON STREET CAPITAL PTY LTD
Level 3
20 Bond Street
SYDNEY NSW 2000
T: +61 2 8651 3490
daltonstreetcapital.com
Dalton Street Capital Pty Ltd
ACN 609 114 034
Dalton Street Capital Pty Ltd is a
Corporate Authorised Representative
(#001239803) of Prodigy Investment
Partners Limited AFSL 466173
ENTRUST PRIVATE WEALTH MANAGEMENT PTY LTD
Level 18 Alluvion
58 Mounts Bay Road
PERTH WA 6000
PO Box Z5034
Perth 6831
Western Australia
T: +61 8 9476 3900
F: +61 8 9321 6333
E: info@entrustpwm.com.au
entrustpwm.com.au
Entrust Private Wealth Management Pty Ltd
ACN 100 088 168
AFSL 222152
76
EUROZ LIMITED ANNUAL REPORT 2018
Level 18 Alluvion
58 Mounts Bay Road
PERTH WA 6000
PO Box Z5036
St Georges Terrace
Perth 6831
Western Australia
T: +61 8 9488 1400
F: +61 8 9488 1477
Euroz Limited
euroz.com
ACN 000 364 465
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