integrity
trustexpertise
The name Fiducian is derived from the Latin word ‘Fiducia’.
Over the years, persons of high integrity in positions of responsibility
and who command trust and respect for their knowledge and expertise
have been spoken of as exercising their duties in a fiduciary capacity.
The company logo of a lion personifies Strength, Character and
Security – characteristics which sit well with the Integrity, Trust
and Expertise associated with the meaning of our name.
It is therefore, within the ambit of working in a fiduciary manner and with
high transparency, that we have built our services for the benefit of
our clients, members, staff and shareholders. We pride ourselves
as having a high level of integrity and in inspiring a similar
level among all our group members.
c o n t e n t s
j o i n t r e p o r t o f t h e c h a i r m a n
a n d t h e m a n a g i n g d i r e c t o r
c o r p o r a t e d i r e c t o r y
d i r e c t o r s ’ r e p o r t
a u d i t o r s ’ i n d e p e n d e n c e d e c l a r a t i o n
c o r p o r a t e g o v e r n a n c e s t a t e m e n t
s h a r e h o l d e r i n f o r m a t i o n
f i n a n c i a l r e p o r t
i n c o m e s t a t e m e n t s
b a l a n c e s h e e t s
s t a t e m e n t o f c h a n g e s i n e q u i t y
c a s h f l o w s t a t e m e n t s
n o t e s t o t h e f i n a n c i a l s t a t e m e n t s
d i r e c t o r s ’ d e c l a r a t i o n
i n d e p e n d e n t a u d i t r e p o r t t o t h e s e c u r i t y h o l d e r s
2
8
9
2 2
2 3
2 6
2 9
3 0
3 1
3 2
3 3
3 4
7 4
7 5
f i d u c i a n P o r t f o l i o s e r v i c e s l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 1
joint
report
of the
chairman
and the
managing
director
dear shareholder,
on behalf of the directors, we jointly report on the consolidated operating
performance of fiducian portfolio services limited and its controlled operating
entities for the year ended 30 june, 2008.
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a n n u a l r e P o r t 2 0 0 8
financiaL information
Results for 2007-2008
in spite of difficult external market conditions globally over the 2007-08 financial year, fiducian is pleased
to report continued growth in net consolidated profit after income tax to $6.3 million. this is an increase
of 18% on the prior year of $5.3 million.
the consequential earnings before interest expense, tax, depreciation and amortisation was $9.3 million
compared to $8.3 million last year. in addition, net margin income grew by 10.5% (2007: 21%),
whilst operating expenses were contained and increased by only 6% (2007: 9%).
fiducian has been built to withstand pressures from external parties and has significant capacity for
further growth in revenue without a comparable or corresponding increase in costs.
capitaL management
Final Dividend
the board is confident about the future of the business in its current form, its profitability, prospects and likely
cash flow outlook. as a result, a fully franked final dividend of 6.5 cents per share has been declared which
will bring the total fully franked dividend declared for the 2008 financial year to 13 cents, a significant increase
over the 10.5 cents of the previous year. the final dividend will be paid on issued shares held on 27 august,
2008 and be payable on 17 september, 2008.
Cash Flow
net cash flows of $6.00 million were achieved from operating activities (2007: $6.26 million). after capital
items, share buy back and dividend outlays, net cash increased by $0.04 million (2007: $1.1million) to remain
almost constant at $10.9 million, of which $5.0 million is required for regulatory purposes.
On Market Buy Back
fiducian bought 635,359 shares on market during the year ( 2007: 1.173 million) for a total consideration,
including brokerage, of $1,732,545 (2007: $2.99 million) at an average price per share of $2.72 (2007: $2.54).
there are 32.762 million shares on issue at year end (2007: 33.032 million).
Acquisitions
no business acquisitions were made during the year, despite actively seeking beneficial opportunities. with
each opportunity assessments of fair value and potential fit within the operational systems and culture of
fiducian are made, to ensure that real value would be added for shareholders and that advisers’ clients would
not be disadvantaged. except in exceptional circumstances, acquisitions are also required to quickly add to
f i d u c i a n P o r t f o l i o s e r v i c e s l i m i t e d a c n 0 7 3 8 4 5 9 3 1
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j o i n t r e P o r t o f t h e c h a i r m a n
a n d t h e m a n a g i n g d i r e c t o r c o n t i n u e d
bottom line profit growth, along with increased funds under management and fund administration inflows.
these criteria caused a number of potential acquisitions to be rejected.
Adviser options
in accordance with the approved adviser share option plan, 32,970 options were issued to advisers during the
year and after 30 june, 2008 it is proposed to issue 31,900 options, at an exercise price of $2.70, to advisers
who have supported fiducian during the year. 252,085 options were exercised during the year and a further
25,609 options have been exercised since year end. 106,503 options, previously issued to advisers, were
cancelled during the year.
Staff options
Management and Staff
in accordance with the approved employee and director share option plan, 260,000 options, at an exercise
price of $2.30, were issued to management and staff after the year end, as part of their remuneration and in
recognition of their efforts. 113,425 options were exercised during the year and 10,625 options have been
exercised since year end.
41,050 options were cancelled due to staff departures.
Managing Director
the managing director has earned 15,000 options, of a maximum of 100,000 options, at an exercise price
of $2.30, based on the performance of fiducian for the past year and in accordance with his remuneration
package. these will be allotted, subject to the passing of the proposed shareholder resolution. no options were
exercised that were issued in previous years.
Non Executive Directors
no options are proposed to be issued to non-executive directors under the plan and no options are outstanding.
financiaL pLanning
the fiducian financial services brand is continuing to grow into a quality national network of franchised and
salaried financial advisers.
Network Strategy
practice development managers based in sydney, melbourne and brisbane continue to work hard to support
and grow the adviser network throughout australia. this support and assistance to financial advisers has led to
higher levels of inflows per adviser and so this strategy will continue.
in addition, a strategy to provide support for financial advisers within accounting practices has been established
and is expected to increase adviser inflows further in the coming year.
Salaried Offices
company owned offices with salaried financial advisers based in sydney, melbourne brisbane and tasmania
have continued to contribute to overall results. inflows from advisers in these offices during the current year
represented 29% of total inflows (2007: 32%).
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j o i n t r e P o r t o f t h e c h a i r m a n
a n d t h e m a n a g i n g d i r e c t o r c o n t i n u e d
Franchised Offices
fiducian expects the highest level of compliance and client service from its franchise network, even though
the generation of higher inflows is important. our commitment to quality has meant the termination of
6 franchisees and the appointment of 5 others during the year. there are 28 franchised offices at year-end,
a net decrease of one from last year. inflows increased once again over the previous year, as effective practice
development caused productivity of existing franchisees to improve. inflows from franchisees comprised
41% of total inflows (2007: 49%).
it should be noted that diversification of total inflows to fiducian in the form of increased badge administration
and wholesale investment mandate arrangements has resulted in the above change in percentage contribution
from the financial planning network to total inflows.
pLatform adminiStration
platform administration offers portfolio wrap administration for superannuation and investment services
to the adviser market place. the hallmark of the fiducian administration offering is quality in terms of daily
processing, accuracy and customer service.
Funds under Administration
funds under administration fell in total by 6.6% to $1,195m (2007: growth 29% to $1,280m) due to the fall
in the valuation of investment funds in the difficult financial markets of the past year.
Badge Arrangements
in addition to the core activity of administering fiducian platform products, fiducian uses its existing resources
to administer products for external dealer groups through badge arrangements. one such arrangement is in
place and another has recently been finalised. although currently small in relative income terms, they should
contribute positively to overall profits going forward.
Independent Advisers
in addition to providing administration services to fiducian advisers and badge arrangements, services are
provided to some independent advisers who hold their own afsl license. funds under administration for
independent advisers declined in weakening share market conditions during the year, so that independents
now represent only 15% of total funds, down from 27% at the previous year-end. value added services
provided include the provision of trustee and custodian services, technical support, para-planning and
marketing assistance.
Corporate Superannuation
corporate superannuation remained at about the same level as the previous year and forms only a small
portion of funds under administration. it is a competitive business and has been structured as an offering to
the small employer market, whose employees can be readily serviced through the fiducian financial adviser
network. fiducian continues to retain this business and views it as a useful compliment to the core personal
superannuation and investment service offerings.
f i d u c i a n P o r t f o l i o s e r v i c e s l i m i t e d a c n 0 7 3 8 4 5 9 3 1
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j o i n t r e P o r t o f t h e c h a i r m a n
a n d t h e m a n a g i n g d i r e c t o r c o n t i n u e d
inVeStment management
fiducian is a multi asset, multi style investment manager and designs funds that seek to deliver above average
returns over the short to medium term and by consistent averaging, tends to deliver superior returns, compared
to their peers, over the longer term.
blending of underlying portfolios within asset sectors and tilts towards different manager’s styles, depending
on the economic cycle also has the potential to reduce volatility.
in addition, the investment team and investment committee remain confident that the fiducian philosophy of
liquidity and transparency will also benefit investors.
implementation of our processes has achieved consistently steady results over the long term. as a result,
fiducian continues to grow its role as the investment manager for clients of advisers, a number of small
wholesale mandates by notable charities, endowment funds and some high net worth individuals.
information technoLogY
the fiducian information technology team continues to provide our adviser network with proprietary
state-of-the-art financial planning software (force) and administration tools which have given fiducian the
ability to control, develop and retain an edge in reporting to clients and financial planners. this technology
gives fiducian advisers further advantages in the market place and should help attract other quality advisers
to fiducian.
hUman reSoUrceS
Management and Staff
the fiducian management team is focused on building a successful company. both the management
and board monitor the group’s overall performance against operational plans and financial budgets.
Key performance indicators have been identified in each area of the operations and used to monitor
performance at least on a quarterly basis.
Advisers Council
this council is drawn from our supporting financial advisers and has again made a significant contribution
to the company during the past year. it continues to fulfill its role as a sounding board for the company’s
management and board, and is a valuable resource and forum to allow financial advisers to alert the company
of issues that may need attention.
Board of Directors
a five year strategy plan has been developed by management at the request of the board, in addition to the
normal annual business plan and budgets. management is now focused on achieving the goals and objectives
set down in this strategy plan.
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j o i n t r e P o r t o f t h e c h a i r m a n
a n d t h e m a n a g i n g d i r e c t o r c o n t i n u e d
cUrrent economic and marKet
enVironment
over the 2007-08 financial year, the australian share market index fell by over 13%, international share
markets fell even more heavily and the listed property index fell by about 36%. following this contraction of the
australian equity and listed property markets over the past year, the australian share market now appears to be
fairly priced. similarly, valuation parameters for australian listed property securities also now appear attractive.
as a result there is opportunity to reap rewards from any market rebound, but no one can foretell that time
and therefore a proper financial plan from their adviser with an appropriate investment strategy should help
investors achieve the outcomes designed for them.
fUtUre oUtLooK
the board expects profit to grow in coming years as management continues to focus on expanding its range of
business activities and on realizing the full potential of financial planning, platform administration, investment
management and information technology, whilst controlling expenditure.
the business plan for 2009 financial year looks at expanding the revenue base by further utilizing all segments
of the fiducian business model as a provider, not only to the tied distribution network, but also to other
external parties in australia and where possible, overseas. acquisitions that can be easily assimilated and
absorbed within the fiducian culture will continue to be assessed as and when available.
the cash management strategy for the next financial year is, therefore, to utilize the growing profitability
to improve the level of dividends being paid to shareholders and, unless there are meaningful opportunities
to expend surplus cash, to use surplus cash to again buy back shares from the market.
we would like to thank all participants for their individual contributions to the growth and success of fiducian.
yours faithfully,
robert bucknell
Chairman
27 august 2008
indy singh
Managing Director
f i d u c i a n P o r t f o l i o s e r v i c e s l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 7
c o r P o r a t e d i r e c t o r y
directors
sha re reg iste r
r bucknell fca
Chairman
i singh cfp, btech, mcomm (bus), asia, asfa, dip. fp
Managing Director
p leeson cfp, dip. fp, retired 24 october, 2007
a Koroknay ba, llb(hons), llm(hons)
f Khouri b bus, fcpa, ftia, appointed 6 july, 2007
secretary
i singh cfp, btech, mcomm (bus), asia, asfa, dip. fp
notice of a nnu al
general m e e t ing
the annual general meeting of
fiducian portfolio services limited
Will be held at level 4, 1 york street, sydney
Time
Date
10.00 am
29 october 2008
computershare investor services pty limited
level 3
60 carrington street
sydney nsw 2000
a udi to r
pricewaterhousecoopers
chartered accountants
darling park tower 2
201 sussex street
sydney nsw 1171
B an kers
westpac banking corporation
34 martin place
sydney nsw 2000
adelaide bank limited
169 pirie street
adelaide sa 5000
sto ck ex ch an g e listin g
fiducian portfolio services limited (fps) shares
are listed on the australian securities exchange.
WeB sit e a ddress
www.fiducian.com.au
Pri nciPal r e gis te r e d
offi ce in aus t ra li a
level 4
1 york street
sydney nsw 2000
(02) 8298 4600
Wholly oWne d
oPerating e nti tie s
fiducian financial services pty ltd
harold bodinnar & associates pty ltd
money & advice pty ltd
fiducian business services pty ltd
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a n n u a l r e P o r t 2 0 0 8
d i r e c t o r s ’ r e P o r t
your directors present their report on the consolidated entity (referred to hereafter as the group) consisting of
fiducian portfolio services limited and its wholly owned operating entities throughout the year ended 30 june 2008.
Directors
the following persons were directors of fiducian portfolio services limited during the whole of the financial year and
up to the date of this report. refer to note (d) for further details.
r bucknell
i singh
a Koroknay
f Khouri was appointed as director on 6 july, 2007 and remains in office at the date of this report .
p leeson was a director from the beginning of the financial year until his retirement on 24 october, 2007.
Principal activities
during the year the principal continuing activities of the group consisted of:
(a) the operator of fiducian investment service
(b) the trustee of fiducian superannuation service
(c) the responsible entity of fiducian funds; and
(d) the dealer for specialist financial planning services through its wholly owned operating entities:
(i) fiducian financial services pty ltd
(ii) harold bodinnar & associates pty ltd
(iii) money & advice pty ltd
Dividends – Fiducian Portfolio Services Limited
dividends paid to members during the financial year were as follows:
final ordinary franked dividend for the year ended 30 june 2007 of 6.0 cents
(2006: fully franked 4.2 cents) per share paid on 12 september 2007.
interim ordinary fully franked dividend for the year ended 30 june 2008 of 6.5 cents
(2007: fully franked 4.5 cents) per share paid on 17 march 2008.
total dividends in respect of the year
2008
$’000
2007
$’000
1,994
1,411
2,133
4,127
1,513
2,924
in addition to the above dividends, since the end of the financial year, the directors have declared the payment of a final
fully franked dividend for the year ended 30 june 2008 of 6.5 cents per ordinary share held at 27 august 2008 and payable
on 17 september 2008.
Review of operations
a summary of consolidated revenues and results by significant industry segments is set out below:
SegMeNt ReveNueS
SegMeNt ReSuLtS
funds management and administration
financial planning
intersegment sales
2008
$’000
26,054
8,222
(5,680)
28,596
2007
$’000
23,813
7,735
(4,976)
26,572
profit from ordinary activities before income tax expense
income tax expense
net profit attributable to members of fiducian portfolio services limited
2008
$’000
8,707
280
-
8,987
2,718
6,269
2007
$’000
7,302
351
-
7,653
2,344
5,309
f i d u c i a n P o r t f o l i o s e r v i c e s l i m i t e d a c n 0 7 3 8 4 5 9 3 1
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d i r e c t o r s ’ r e P o r t c o n t i n u e d
Comments on operations and results
comments on the operations, business strategies, prospects and financial position are contained in the joint report of the
chairman and managing director.
Shareholder returns
the fall in the valuation of investment funds impacted on management fees received by fiducian, as more fully detailed
in the joint report of the chairman and managing director. despite this, fiducian has maintained profit for the second
half of this year and will distribute a dividend of 6.5 cents per share, consistent with that paid for the previous half-year.
the share price has declined in common with the asX index, but to a significantly lesser extent than comparative companies.
Significant changes in the state of affairs
significant changes in the state of affairs of the group during the financial year were as follows:
contributed equity has reduced by $1,732,545 as a result of the buy back of 635,359 shares on the stock exchange at an
average price of $2.72 per share during the year, and an increase of $263,694 as a result of the exercise of 365,510 share
options at an average price of $0.62 per share.
further, 100,000 options were issued to the managing director, 150,000 options were issued to staff and 32,970 options
were issued to advisers during the year, whilst 147,553 options issued to staff and advisers were forfeited during the year.
other than this, there were no significant changes in the state of affairs of the group during the financial year.
Matters subsequent to the end of the financial year.
under the rules of the adviser share option plan, the directors are required and expect to grant 31,900 (2007: 32,970)
options to advisers within three months of the announcement of the group’s results to the australian securities exchange,
at an exercise price of $2.70 (2007: $3.45), being 8% above the volume weighted average trading price of fully paid
ordinary shares sold in the ordinary course of trading during june 2008.
under the same rules 63,560 adviser options (2007: nil) are expected to be cancelled subsequent to the end of the
financial year. to the date of this report 25,609 adviser options have been exercised. the above is subject to any regulatory
approvals if required.
under the rules of the employee and director share option plan, the directors have granted 260,000 options at an
exercise price of $2.30 to employees after year end (2007: 150,000 at $2.65) being 8% below the volume weighted
average trading price of fully paid ordinary shares sold in the ordinary course of trading during june 2008 and 15,000
options at an exercise price of $2.30 to the managing director (2007:100,000 at $2.65) subject to shareholder approval.
to the date of this report, 10,625 options have lapsed or have been exercised by employees and no options have been
exercised by the managing director.
under the rules of the employee and director share option plan and adviser share option plan, to the 22nd august 2008
the following shares have been issued since the end of the financial year as a result of options, granted on the dates listed,
being exercised:
DAte OPtIONS gRANteD
ISSue PRICe OF ShAReS NuMBeR OF ShAReS ISSueD
24 august 2004
3 september 2003
24 august 2004
22 february 2005
july 2006
3
advisers
advisers
employees
employees
employees
$0.55
$0.48
$0.55
$0.73
$1.29
10,668
14,941
2,000
5,000
3,125
35,734
other than the above, there has not arisen in the interval between the end of the financial year and the date of this report
any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the company,
to affect significantly the operations of the group, the results of those operations or the state of affairs of the group in
subsequent years.
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d i r e c t o r s ’ r e P o r t c o n t i n u e d
Likely developments and expected results of operations
the chairman and managing director have commented on expected results of operations in their joint report.
other than this, the directors have excluded further information on likely developments in the operations of the group
and the expected results of those operations in future financial years, since, in the opinion of the directors, it would
prejudice the interests of the group if this information was included.
environmental regulation
the group is not subject to significant environmental regulations under a commonwealth, state or territory law.
the carbon imprint of fiducian has been calculated at an average of less than 3 tonnes per person, which is around
half the rate for the average global citizen.
key manag ement Pe r so nnel disc lo sures
(a) Directors
the following persons were directors of fiducian portfolio services limited during the financial year:
Chairman (non-executive)
r bucknell
Executive director
Non-executive directors
i singh – managing director
a Koroknay
f Khouri
(b) Information on directors
R e Bucknell FCA. chairman – non executive. age 67
Experience and expertise
chairman since inception in 1996. extensive experience in accounting and business management over the past 44 years as
a chartered accountant in public practice.
Other current directorships
none
Former directorships in the last 3 years
none
Special responsibilities
chairman of the group, and audit, remuneration and internal compliance committees.
Interest in shares and options
1,069,000 ordinary shares in fiducian portfolio services limited.
I Singh CFP, Btech, MComm (Bus), ASIA, ASFA, Dip. FP. managing director. age 59
Experience and expertise
founder and managing director since inception in 1996. general management and hands-on experience in the investment
of savings and superannuation funds over the past 19 years.
Other current directorships
none
Former directorships in the last 3 years
none
Special responsibilities
managing director, member of investment, audit and internal and external compliance committees.
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key ma nag e ment Pe r so nnel disclo sure s c o n tin ue d
(b) Information on director (continued)
Interest in shares and options
9,599,307 ordinary shares in fiducian portfolio services limited.
200,000 options for ordinary shares in fiducian portfolio services limited
P Leeson CFP, Dip. FP. independent non-executive director. age 70 (retired 24 october 2007)
Experience and expertise
board member since january 1999. 29 years as a senior army officer and an active financial planner since 1984.
A Koroknay BA, LLB(hons), LLM(hons). independent non-executive director. age 59
Experience and expertise
board member since january 2002. practising lawyer since 1972 with extensive experience in legal aspects of the financial
services industry. he is a consultant with the law firm hwl ebsworth.
Other current directorships
non-executive director: hunter hall global value limited (since march 2004)
Former directorships in the last 3 years
none
Special responsibilities
member of remuneration, audit (retired 24 august 2007) and internal compliance committees.
Interest in shares and options
none
F g Khouri B Bus, FCPA, FtIA. independent non-executive director. age 53
Experience and expertise
appointed to the board 6 july 2007. public accountant and business adviser since 1976 to small and medium enterprises,
currently as a partner in the firm hg Khouri & associates.
Other current directorships
none
Former directorships in the last 3 years
none
Special responsibilities
member of the board audit committee (appointed 24 august 2007).
Interest in shares and options
107,373 ordinary shares in fiducian portfolio services limited.
7,182 options for ordinary shares in fiducian portfolio services limited.
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key ma nag e ment Pe r so nnel disc losur es c o nt in ue d
(c) Company secretary
the company secretary is mr i singh cfp, m comm. (bus), asia, asfa, dip fp. mr singh has been the company secretary
since inception in 1996, and is supported by legal counsel employed by fiducian.
(d) Meeting of directors
the numbers of meetings of the company’s board of directors and of each board committee held during the year ended
30 june 2008, and the numbers of meetings attended by each director were:
FuLL MeetINgS OF DIReCtORS
MeetINgS OF COMMItteeS
r e bucknell
i singh**
p leeson #
a Koroknay
f Khouri
Corporate trustee*
A
B A
12 12
12 12
4
4
12 12
12 12
6
6
4
6
6
B
6
6
4
6
6
Audit
Internal
Invest-
Compliance ment
Remun-
ration
A
B A
B A
B A
4
4
4
4
5
5
6 *** *** 1
6
12 12 *** ***
*** *** *** *** *** *** *** ***
*** *** 5
6 *** *** 1
1
4
4 *** *** *** *** *** ***
B
1
A = Number of meetings attended.
B = Number of meetings held during the time the director held office or was a member of the committee during the year.
* = Meetings of the Board in its capacity as Trustee of the Fiducian Superannuation Service.
** = In addition, I Singh attended 5 of the 5 meetings held with the two independent members of the External Compliance Committee.
*** = Not a member of Board or the relevant committee at the time of meeting.
# Retired 24 October 2007
(e) Other key management personnel
the following person has authority for and responsibility for planning, directing and controlling the activities of the group,
directly or indirectly, during the financial year:
Name
Position
i singh managing director
Employer
fiducian portfolio services limited
the above person was also the key management person during the year ended 30 june 2007.
(f) Remuneration report
the remuneration report is set out under the following main headings:
a. principles used to determine the nature and the amount of remuneration
b. details of remuneration
c. service agreements
d. share-based compensation
e. additional information
the information provided under headings a – d includes remuneration disclosures that are required under accounting
standards aasb 124 related party disclosures. these disclosures have been transferred from the director’s report and
have been audited. the disclosures in section e are additional disclosures required by the corporations act 2001 and the
corporations regulations 2001 which have not been audited.
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key ma nag e ment Pe r so nnel disc losur es c o nt in ue d
(f) Remuneration report (continued)
A. Principles used to determine the nature and the amount of remuneration
the objective of the group’s executive reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. the framework aligns executive reward with the achievements of strategic objectives
and the creation of value for shareholders, and conforms with the market best practice for delivery of reward. the board
ensures that executive reward satisfies the following key criteria for good reward governance practices by being transparent
and within appropriate capital management.
(a) Non-executive Directors
fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities of,
the directors. non-executive directors’ fees and payments are reviewed annually by the board. the directors have
resolved that non-executive directors are no longer entitled to options under the employee and director share
option plan.
Directors’ fees
the current base remuneration was last reviewed in june 2007. the chairman and other external directors are paid
a fixed fee plus a fee based on time spent on committees (directors with earnings derived from commissions based
on business placed with the group may also receive commissions as advisers). the chairman’s fixed fee is higher
than other non-executive directors based on comparative roles, time and fees in the external market.
non-executive directors’ fees are determined within an aggregate directors’ fee pool limit, which is periodically
recommended for approval by shareholders. the maximum pool currently stands at $350,000 per annum and was
approved by shareholders at the annual general meeting on 24 october 2007. no increase is being sought at the
next annual general meeting.
Retirement allowances for Directors
there are no retirement allowances for non-executive directors other than superannuation accumulation arising
from any contributions made by them to the fiducian superannuation service.
(b) Executive Director
remuneration and other terms of employment for the managing director is formalised in a service agreement.
the managing director’s agreement provides for the provision of performance based cash bonuses and, where
eligible, participation in the employee and director share option plan.
other major provisions of the agreement are set out below:
i singh, Managing Director
• Term of agreement – until 30 June 2009
• Base salary, inclusive of superannuation and salary sacrifice benefits.
• Death and TPD/Trauma cover.
• Short term performance incentives.
• Long term incentives through the Fiducian Portfolio Services Limited Employee and Director Share Option Plan,
and
• Retirement benefits.
the combination of these comprises the executive’s total remuneration package.
an external remuneration consultant advises the remuneration committee, at least every 3 years, to ensure that
the group has structured an executive remuneration package that is market competitive and complimentary to the
reward strategy of the organisation. their most recent review was in august, 2008.
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(f) Remuneration report (continued)
Base salary
mr singh receives a base pay that comprises the fixed component of pay and rewards, which reflects the market
value for his role. the base salary is reviewed annually by the remuneration committee at the commencement of
each financial year.
there are no guaranteed base pay increases fixed in the executive’s contract.
Benefits
Executive benefits include death cover of $1 million and TPD/ Trauma insurance cover of $0.5 million.
Short-term incentives
mr singh is entitled to a discretionary cash performance bonus of up to 20% of his total package as assessed by
the remuneration committee against performance indicators and objectives set by the board. it is limited to being
met within the budget or out of over-budget financial performance. a majority of key performance indicators were
met during the financial year, and mr singh is entitled to part of the full bonus payment. however mr singh has
declined to accept the payment.
Long-term incentives
mr singh is entitled to a discretionary performance bonus of up to 100,000 options per year determined as at
30 june each year, based on the following measures:
• the company’s pre-tax profit OR
• the 30 day average for June market value for ordinary shares in the company.
increasing by at least 15% over the previous year.
the options are issued under the company’s esop at the rate of 5,000 options for each one percent increase in
excess of 15% and only after approval by shareholders in the company. only the pre-tax profit criteria was met
and mr singh is entitled to receive only 15,000 options at an exercise price of $2.30 cents per share, subject to
shareholder approval.
Retirement benefits
retirement benefits are delivered under the fiducian superannuation service. this fund provides accumulation
benefits based on the sgc contributions by the specified executive, on commercial terms and conditions. other
retirement benefits may be provided directly by the group only if approved by the shareholders. payment of a
termination benefit on early termination by the managing director or by mutual consent is equal to 6 months of
the gross annual remuneration.
B. Details of remuneration
I Singh – Managing Director & Company Secretary
the key management personnel of the group were the following executive and non-executive directors during the year:
• R Bucknell – Chairman
•
• A Koroknay – Non-executive Director
• P Leeson - Non-executive Director (retired 24 October 2007)
• F Khouri – Non-executive Director
Amounts of remuneration
details of the remuneration of the directors, including mr singh, the only key management personnel of fiducian
portfolio services limited, are set out in the following tables.
f i d u c i a n P o r t f o l i o s e r v i c e s l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 1 5
d i r e c t o r s ’ r e P o r t c o n t i n u e d
key manag ement Pe r so nnel disc lo sures c o nt in ue d
(f) Remuneration report (continued)
Key management personnel of Fiducian Portfolio Services Limited and the Group
2008
NAMe
ShORt-teRM eMPLOyee BeNeFItS
POSt eMPLOyMeNt
BeNeFItS
ShARe-BASeD
PAyMeNt
CASh SALARy
AND FeeS (a)
CASh
BONuS
NON-MONetARy
BeNeFItS
SuPeR-
ANNuAtION
RetIReMeNt
BeNeFItS
OPtIONS (e)
tOtAL
$
$
$
$
$
$
$
Non-executive
directors
r e bucknell (b)
(Chairman)
a Koroknay (c)
p leeson (d)(e)
f Khouri (d)(e)
Executive director
i singh (f)
totals
146,100
40,752
11,667
35,996
436,001
670,516
-
-
-
-
-
-
-
-
-
-
-
-
-
2,889
-
2,889
13,999
19,777
-
-
-
-
-
-
-
146,100
-
-
-
43,641
11,667
38,885
75,447
525,447
75,447
765,740
(a) excludes gst if paid to another firm.
(b) including amounts paid to the director’s company only in respect to director’s duties.
(c) including amounts paid to the director’s firm only in respect of director’s duties.
(d) this excludes gross commission of $590,141 for financial planning paid to companies in which directors or
former directors have an interest.
(e) adviser options were issued to companies, in which p leeson and f Khouri are shareholders and directors, in their
capacity as financial advisers, and are not included above.
(f) 100,000 options were issued to mr singh in respect of the 2007 financial year, after shareholder approval at the
agm in october 2007. consequently $75,447, being the calculated fair value of those options, has been included
in his remuneration.
the 15,000 options proposed to be issued to mr singh in respect of the 2008 year are subject to shareholder
approval prior to issue and their value is therefore not included.
2007
NAMe
ShORt-teRM eMPLOyee BeNeFItS
POSt eMPLOyMeNt
BeNeFItS
ShARe-BASeD
PAyMeNt
CASh SALARy
AND FeeS (a)
CASh
BONuS
NON-MONetARy
BeNeFItS
SuPeR-
ANNuAtION
RetIReMeNt
BeNeFItS
OPtIONS (e)
tOtAL
$
$
$
$
$
$
$
Non-executive
directors
r e bucknell (b)
(Chairman)
a Koroknay (c)
p leeson (d)(e)
Executive director
i singh (f)
totals
140,100
-
57,645
39,023
427,314
664,082
-
-
-
-
-
-
-
-
-
-
-
-
140,100
2,477
2,477
12,139
17,093
-
-
-
-
-
-
60,122
41,500
75,630
515,083
75,630
756,805
(a) excludes gst if paid to another firm.
(b) including amounts paid to the director’s company only in respect tp director’s duties.
(c) including amounts paid to the director’s firm only in respect of director’s duties.
(d) this excludes gross commission of $844,867 for financial planning paid to a company in which the director has an interest.
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(f) Remuneration report (continued)
Key management personnel of Fiducian Portfolio Services Limited and the Group (contunued)
(e) this does not include adviser options issued to a company, in which p leeson is a shareholder and director, in his
capacity as financial adviser.
(f) 100,000 options were issued to mr singh in respect of the 2006 financial year, after shareholder approval at the
agm in october 2006. consequently $75,630, being the calculated fair value of those options, has been included
in his remuneration.
C. Service Agreements and Induction Process
the service agreement of the executive director is detailed in paragraph a(b) earlier. there are no service agreements
with non-executive directors or employees.
in preparation for appointment to the board, all non-executive directors undergo an induction program and receive an
induction pack of documents necessary for the new director to understand fiducian’s policies, procedures, culture and
ethical values to enable the new director to carry out his duties in an effective and efficient manner.
D. Share-based compensation
(i) Option compensation and holdings
options for shares in fiducian portfolio services limited are granted under the employee and director share option
plan, which was approved by shareholders on 28 july 2000. the plan is described under note 25.
the numbers of options for ordinary shares in the company held directly by directors of fiducian portfolio
services limited and details of options for ordinary shares in the company provided as remuneration to the key
management personnel of the group, are set out below.
2008
NAMe
BALANCe At
the StARt OF
the yeAR
gRANteD DuRINg
the yeAR AS
ReMuNeRAtION
exeRCISeD
LAPSeD DuRINg
the yeAR
BALANCe At
the eND OF
the yeAR
veSteD AND
exeRCISABLe
i singh*
f Khouri**
100,000
-
-
-
100,000
-
-
-
200,000
200,000
-
-
* 15,000 options are proposed to be issued in accordance with Mr Singh’s employment contract after the end of the year, subject
to approval by shareholders.
** 7,182 Adviser options are held by an entity in which F Khouri has an interest.
2007
NAMe
BALANCe At
the StARt OF
the yeAR
gRANteD DuRINg
the yeAR AS
ReMuNeRAtION
exeRCISeD
LAPSeD DuRINg
the yeAR
BALANCe At
the eND OF
the yeAR
veSteD AND
exeRCISABLe
i singh
200,000
(200,000)
100,000
r e bucknell
p leeson*
a Koroknay
50,000
25,500
-
(50,000)
(25,000)
-
-
-
-
-
-
-
-
100,000
100,000
-
-
-
-
-
-
* 109,199 Adviser options are held, in addition, by an entity in which P Leeson has an interest.
note: the assessed fair value at grant date of options granted to the individuals is detailed in note 25.
f i d u c i a n P o r t f o l i o s e r v i c e s l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 1 7
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(f) Remuneration report (continued)
D. Share-based compensation (audited) (continued)
(ii) Share holdings
the numbers of shares in the company held by current directors of fiducian portfolio services limited, including
their personally related and associated entities, are set out below. no shares were granted during the period
as compensation.
2008
NAMe
i singh
r e bucknell
a Koroknay
f Khouri
2007
NAMe
i singh
r e bucknell
p leeson
a Koroknay
BALANCe At the
StARt OF the yeAR
9,486,500
1,050,000
-
-
ReCeIveD DuRINg
the yeAR ON the
exeRCISe OF
ADvISeR OPtIONS
-
-
-
107,373
OtheR ChANgeS
DuRINg the yeAR
BALANCe At the eND
OF the yeAR
36,807
-
-
-
9,523,307
1,050,000
-
107,373
BALANCe At the
StARt OF the yeAR
ReCeIveD DuRINg
the yeAR ON the
exeRCISe OF DIReCtOR
OPtIONS
OtheR ChANgeS
DuRINg the yeAR
BALANCe At the eND
OF the yeAR
9,261,000
1,000,000
90,000
-
200,000
50,000
25,000
-
25,500
-
23,000
-
9,486,500
1,050,000
138,000
-
Shares provided on exercise of options
no ordinary shares in the company were provided as a result of the exercise of remuneration options to any
director of fiducian portfolio services limited and other key management personnel of the group during the period
(2007: 275,000).entities with which a director has an interest exercised 107,373 adviser options during the year
(2007: nil options). no amounts are unpaid on any shares issued on the exercise of options.
E. Additional information
Principles used to determine the nature and amount of remuneration: relationship between remuneration and company
performance
the overall level of executive reward takes into account the performance of the group over a number of years, with
greater emphasis given to the current and prior year. over the past 7 years, the group’s annual profit from ordinary
activities after income tax has grown at a compound annual rate of 30%, and shareholder wealth has grown at a
compound rate of 13.5%. during the same period, average executive remuneration has grown at a compound annual
rate of 4.6%.
Value of remuneration: cash bonuses and options granted
for each cash bonus and grant of options included in the tables below, the percentage of the available bonus or grant
that was paid, or that vested, in the financial year, and the percentage that was forfeited because the person did not
meet the service and performance criteria is set out below. no part of the bonus is payable in future years. the options
vest after one year, with no conditions. the minimum value of the options yet to vest is therefore the value of the
option on grant date. the maximum value of the options yet to vest has been determined assuming the share price on
the date the options are exercised will not exceed $3.00 for the options that vest in the 2009 financial year.
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(f) Remuneration report (continued)
CASh BONuS
OPtIONS
NAMe
I Singh
PAID
%
0%
FORFeIteD
%
100%
FINANCIAL
yeAR
gRANteD
veSteD
%
FORFeIteD
%
FINANCIAL
yeARS IN
whICh
OPtIONS
veSt
MINIMuM MAxIMuM
tOtAL vALue tOtAL vALue
OF gRANt
OF gRANt
yet tO veSt yet tO veSt
$
$
2008
2007
100%
100%
0%
0%
30/10/2008
75,447
15,000
26/10/2007
75,630
171,000
Share-based compensation: Performance based Options
further details relating to options are set out below.
2008
NAMe
i singh
A
ReMuNeRAtION
CONSIStINg OF
OPtIONS (%)
B
vALue At
gRANt DAte
$
C
vALue At
exeRCISe DAte
$
D
vALue At
LAPSe DAte
$
e
tOtAL OF
COLuMNS B-D
$
14.40%
75,447
-
-
75,447
A = The percentage of the value of remuneration consisting of options, based on the value at grant date set out in column B.
B = The value at grant date calculated in accordance with AASB 2 Share based Payment of options granted during the year as
part of remuneration.
C = The value at exercise date of the options that were granted as part of remuneration and were exercised during the year.
D = The value at lapse date of options that were granted as part of remuneration and that lapsed during the year.
2007
NAMe
i singh
A
ReMuNeRAtION
CONSIStINg OF
OPtIONS (%)
B
vALue At
gRANt DAte
$
C
vALue At
exeRCISe DAte
$
D
vALue At
LAPSe DAte
$
e
tOtAL OF
COLuMNS B-D
$
14.70%
75,630
-
-
75,630
A = The percentage of the value of remuneration consisting of options, based on the value at grant date set out in column B.
B = The value at grant date calculated in accordance with AASB 2 Share based Payment of options granted during the year as
part of remuneration.
C = The value at exercise date of the options that were granted as part of remuneration and were exercised during the year.
D = The value at lapse date of options that were granted as part of remuneration and that lapsed during the year.
(g) Directors’ superannuation
directors have superannuation monies invested in fiducian superannuation service. these monies are invested subject to the
normal terms and conditions applying to this superannuation fund.
(h) Loans to directors
no loans were made to directors during the financial year (2007: nil).
(i) Other transactions with key management personnel
a director, mr r e bucknell, is a director and shareholder of hunter place services pty ltd, a company which provides his
services as a director to the company.
a director, mr a Koroknay, is a consultant with the legal firm hwl ebsworth, which provides legal services to the group
during the year on normal commercial terms and conditions.
f i d u c i a n P o r t f o l i o s e r v i c e s l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 1 9
d i r e c t o r s ’ r e P o r t c o n t i n u e d
key manag ement Pe r so nnel disc lo sures c o nt in ue d
(f) Remuneration report (continued)
a former director, mr p leeson, is an authorised representative under the fiducian financial services pty ltd australian
financial services licence and is a director and shareholder of provident financial planning pty ltd, which is a franchisee
of fiducian financial services pty ltd. provident financial planning pty ltd places business with and receives commissions
from the group. all transactions are on normal commercial terms and conditions. mr leeson retired as a director at the last
meeting of shareholders on 24 october 2007.
a director, mr f Khouri, is an authorised representative under the fiducian financial services pty ltd australian financial
services licence and is a director and shareholder of hawkesbury financial services pty ltd, which is a franchisee of fiducian
financial services pty ltd. hawkesbury financial services pty ltd places business with and receives commissions from the
company. all transactions are on normal commercial terms and conditions.
aggregate amounts of each of the above types of other transactions with current directors of fiducian portfolio services limited:
Amounts recognised as an expense
directors’ fees and committee fees
legal & consulting fees
commission paid or payable
Shares under option
CONSOLIDAteD
2008
$
2007
$
240,293
241,722
9,858
5,400
590,141
768,061
840,292
1,015,183
unissued ordinary shares of fiducian portfolio services limited under option at the date of this report are disclosed in
note 25 of the financial report.
no option holder has any right under the options to participate in any other share issue of the company or any other entity
until after the exercise of the option.
Shares issued on the exercise of options
the details of ordinary shares of fiducian portfolio services limited issued during the year ended 30 june 2008 on the
exercise of options granted under the fiducian portfolio services limited employee & director share option plan and the
adviser share option plan are disclosed under note 25 to the financial report.
Indemnification and insurance of officers
the constitution of fiducian portfolio services limited provides the following indemnification of officers:
(a)
to indemnify officers of the company and related bodies corporate to the maximum extent permitted by law unless a
liability arises out of conduct involving a lack of good faith. in the case of a related body corporate, the indemnification
of officers does not extend to any proceedings for a liability incurred by the officer based upon events that occurred
before that body corporate became a related body corporate.
(b) to allow the company to pay a premium for a contract insuring directors, the secretary and executive officers of
fiducian portfolio services limited and its related bodies corporate. 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 the capacity
as officers of the company or related body corporate.
no liability has arisen under these indemnities as at the date of this report.
during the year fiducian portfolio services limited paid a premium under a combined policy of insurance for liability
of officers of the company and related bodies corporate, professional indemnity and crime. in accordance with normal
commercial practice, disclosure of the total amount of premium payable under, and the nature of the liabilities covered by,
the insurance contract is prohibited by a confidentiality clause in the contract.
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key manag ement Pe r so nnel disc lo sures c o nt in ue d
(f) Remuneration report (continued)
the officers of the company covered by the insurance policy include the directors: r e bucknell, i singh, p leeson,
a Koroknay, f Khouri, other officers of fiducian portfolio services limited and independent members of the external
compliance and investment committees, j evans, p emery and m devlin.
Proceedings on behalf of the company
no person has applied to the court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the company, or to 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 part of those proceedings.
no proceedings have been brought or intervened in on behalf of the company with leave of the court under section
237 of the Corporations Act 2001.
Non-audit services
the company employs the auditor on assignments additional to their statutory audit duties where the auditor’s expertise
and experience with the company and/or Group are important.
details of the amounts paid or payable to the auditor (pricewaterhousecoopers) for audit and non-audit services provided
during the year are set out in note 26.
the board of directors is satisfied that the provision of non-audit services by the auditor did not compromise the auditor
independence requirements of the corporations act 2001 for the following reasons:
•
•
all non-audit services have been reviewed by the audit committee to ensure they do not impact the impartiality and
objectivity of the auditor.
none of the services undermine the general principles relating to auditor independence as set out in APES110 Code of
Ethics for Professional Accountants.
during the year the fees paid or payable for services provided by the auditor (pricewaterhousecoopers) of the parent entity,
its related practices and non-related audit firms, are shown in note 26 to the consolidated financial report.
Auditors’ independence declaration
a copy of the auditors’ independence declaration as required under section 307c of the Corporations Act 2001 is set out
on page 22.
Rounding of amounts
The company is of a kind referred to in Class Order 98/0100, issued by the Australian Securities and Investments
commission, relating to the “rounding off” of amounts in the directors’ report. amounts in the directors’ report have been
rounded off in accordance with that class order to the nearest thousand dollars, or in certain cases, to the nearest dollar.
Auditor
pricewaterhousecoopers continues in office in accordance with section 327 of the Corporations Act 2001.
this report is made in accordance with a resolution of the directors.
i singh
Director
sydney,
27 august 2008
f i d u c i a n P o r t f o l i o s e r v i c e s l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 2 1
a u d i t o r s ’ i n d e P e n d e n c e
d e c l a r a t i o n
PricewaterhouseCoopers
ABN 52 780 433 757
Darling Park Tower 2
201 Sussex Street
GPO BOX 2650
SYDNEY NSW 1171
DX 77 Sydney
Australia
www.pwc.com/au
Telephone +61 2 8266 0000
Facsimile +61 2 8266 9999
Auditors’ Independence Declaration
as lead auditor for the audit of fiducian portfolio services limited for the year ended 30 june 2008 i declare that to the
best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
this declaration is in respect of fiducian portfolio services limited and the entities it controlled during the year.
d a prothero
Partner
pricewaterhousecoopers
sydney
27 august 2008
liability limited by a scheme approved under professional standards legislation
P a g e 2 2
a n n u a l r e P o r t 2 0 0 8
c o r P o r a t e g o v e r n a n c e
s t a t e m e n t
fiducian portfolio services limited (the company) and the board of directors are committed to achieving and demonstrating
the highest standards of corporate governance. the board continues to review the framework and practices to ensure
they meet the interests of shareholders. the company and its controlled entities together are referred to as the group in
this statement.
in developing, updating and applying its corporrate governance principles and practices, the group supports the asX listing
rules and the corporate governance principles and recommendations ( december 2007) issued by the australian securities
exchange. the group has followed the asX corporate governance principles and recommendations with the exceptions as
noted under 1.2 and 2.5 below.
a description of the company’s main corporate governance practices is set out below. all these practices, unless otherwise
stated, were in place for the entire year. attendance at board and board committee meetings are set out in note (d) on
page 13 of the directors’ report.
1. the board of directors
1.1 the board has an independent chairman, a majority of independent directors and operates in accordance with the
other principles set out in its charter, a summary of which is available from the corporate governance information
section of the company’s website. the charter details the board’s composition and responsibilities. the group’s
framework is designed to enable the board to provide strategic guidance and effective oversight of management.
the directors are interested in attracting suitably qualified persons as directors where they can complement the
skills already present on the board.
details of the members of the board, their qualifications, term of office, independent status and membership and
attendance at committee meetings are set out in note (d) on page 13 of the directors’ report.
1.2 the board has considered recommendation 2.4 of the asX corporate governance principles and has taken the view
that participation by the full board is more effective than a smaller nomination commitee, particularly given the
size of the board.
the board undertakes an annual detailed self and peer assessment of all directors, which is then compared to the
previous year, discussed by all directors at length and any weaknesses addressed. the matrix of directors’ skills
and experience to maximize effectiveness and contribution by the board to the overall operation of the group is
also considered to ensure effective discussion and efficient decision making. the last assessment was conducted in
june 2008.
1.3 the relationship between the board and senior management is critical to the group’s long-term success.
the directors are responsible to the shareholders for the performance of the company in both the short and
longer term and seek to balance sometimes competing objectives in the best interests of the group as a whole.
their focus is to enhance the interests of shareholders and other key stakeholders and to ensure the group is
managed properly. day to day management of the group’s affairs and implementation of the corporate strategy
and policy indicatives are formally delegated by the board to the managing director.
1.4 the managing director and financial controller have made the following certifications to the board, for the year
ended 30 june 2008 that:
• the company’s financial reports are complete and present a true and fair view, in all material respects, of the
financial condition and operational results of the group, and are in accordance with relevant accounting standards.
and
• the above statement is founded on a sound system of internal compliance and risk management, which
implements the policies adopted by the board, and that the company’s risk management and internal compliance
system is operating efficiently and effectively in all material respects.
f i d u c i a n P o r t f o l i o s e r v i c e s l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 2 3
c o r P o r a t e g o v e r n a n c e s t a t e m e n t c o n t i n u e d
2. Board committees
the board has established a number of committees to assist in the execution of its duties and to allow detailed
consideration of important aspects of the business and/or complex issues. Current committees of the board are the
remuneration, compliance and audit committees, further detailed below. they are comprised of a mix of executive and
non-executives company directors, and external specialists. the committee structure and membership is reviewed on an
annual basis. a policy of rotation of committee members applies.
each committee has its own written charter setting out its role and responsibilities, composition, structure, membership
requirements and the manner in which the committee is to operate. all of these charters are reviewed regularly and
summaries are available on the company’s website. all matters determined by committees are submitted to the full board
as recommendations for board decisions.
minutes of committee meetings are tabled at the subsequent board meeting. additional requirements for specific reporting
by the committees to the board are addressed in the charter of the individual committees.
2.1. Remuneration committee
the 2 members of the remuneration committee are the non-executive chairman and one other non-executive director.
the committee evaluates the managing director using criteria such as business performance, accomplishment of short and
long-term strategic objectives and the development of management. the remuneration committee takes this documented
evaluation into account and the assessment by external consultants, when deemed appropriate, when considering the
managing director’s remuneration package, to ensure that it is reasonable and competitive. the managing director is
responsible for the remuneration of all other senior managers and staff.
2.2 Compliance committees
(a) an internal compliance committee is comprised of the non-executive chairman, one other non-executive director,
and the managing director. the committee monitors compliance systems, procedures, policies and programs established
to ensure disclosure by management to the board of areas of operating and non-financial risk including disclosure
documents required to be given under statute. the compliance manager attends and participates at the meetings.
(b) the external compliance committee is comprised of two independent members and the managing director.
the committee monitors compliance of systems, procedures, policies and programs established to ensure disclosure and
reporting relating to compliance with obligations imposed by the corporations and superannuation laws, and that the
interests of fund members are protected. the compliance manager attends and participates at the meetings.
2.3 Audit committee
the audit committee is comprised of the non-executive chairman, one other non-executive director and the managing
director. the financial controller and auditor attend and participate at meetings. the committee monitors all accounting
policies to ensure they comply with accepted accounting standards and practices.
2.4 Investment committee
the investment committee is comprised of two independent members, the managing director and senior staff involved in
investment.
2.5 Managing Director’s attendance at Compliance and Audit committees
the board has ensured that the compliance and audit committees have a majority of independent members; as well it
expects the managing director to attend these committees as a member. attendance by the managing director has been
beneficial as clarification can be provided promptly and any corrective measures required can be actioned swiftly and
efficiently.
3. external auditors
pricewaterhousecoopers has been the appointed external auditor since inception in 1996. it is pricewaterhousecoopers’
policy to rotate audit engagement partners on listed companies at least every five years, and in accordance with that policy
a new audit engagement partner was introduced for the year ended 30 june 2004. it is anticipated that a new audit
engagement partner will be introduced for the year ended 30 june 2009.
P a g e 2 4
a n n u a l r e P o r t 2 0 0 8
c o r P o r a t e g o v e r n a n c e s t a t e m e n t c o n t i n u e d
4. Risk assessment and management
a detailed risk management strategy and plan is formalised which details the policies in place in relation to risk
management processes, compliance and internal control systems, procedures, registers and reporting. these strategies
are available on the company website. in summary these strategies are designed to ensure that strategic, operational,
legal, reputation and financial risks are identified, assessed effectively and efficiently managed and monitored to enable
achievement of the group’s business objectives.
the head of each business unit reports monthly, by exception, against the risk management plan to the risk manager.
further, detailed checklist reports are prepared quarterly by each business unit to confirm compliance with all licensing,
corporations and superannuation law requirements to the external compliance committee, which then reports to the board.
in addition, the board each year approves a strategic plan together with operating objectives and budgets which also
encompasses the group’s vision and mission. the board monitors progress against these objectives and budgets, including
the establishment and monitoring of Kpi’s of both a financial and non-financial nature. also, regular financial reporting
is received by the board on such matters as the group’s liquidity, funds under management inflows and outflows, funds
performances and economic and financial market changes impacts and forecasts. these measures assist the board in
managing business risk.
5. Code of Conduct and ethical decision making
the directors and management actively promote ethical and responsible decision making in line with the company motto
of ‘integrity, trust and expertise.’ additionally the board and management believe that shareholder and public confidence
is based upon the procedures in place internally which work to promote and ensure the highest standards of ethical
behaviour are maintained. a code of conduct has been established.
6. Share trading policy
the purchase and sale of company securities by directors and employees is detailed in a written policy statement on
insider and personal trading. this policy is discussed with and given to each new director or employee as part of the
induction process. each director and employee is required to sign an annual declaration confirming their compliance.
generally, directors and employees are only allowed to buy or sell fiducian securities during the six weeks immediately
after the release to the market of financial information or any other major statement that may affect the share price.
the compliance officer advises both directors and staff when such periods commence and conclude.
the directors are satisfied that the group has complied with its policies on trading in securities. a copy of the trading policy
is available on the company’s website.
7. Continuous disclosure and shareholder communication
the managing director has been nominated as the person responsible for communications with the australian securities
exchange (asX). this role includes responsibility for ensuring compliance with the continuous disclosure requirements in
the asX listing rules and overseeing and co-ordinating information disclosure to the asX, analysts, brokers, shareholders,
the media and the public. shareholders can receive updates on the group’s information released to the asX on the asX’s
website at www.asx.com.au or on the company’s website.
when analysts are briefed on aspects of the group’s operations, the material used in the presentation is that already
released to the asX and posted on the company’s website. primary responsibility for compliance with group policy on
balanced and timely disclosure rests with the managing director, and is assisted in this by group general counsel and
the cfo.
due to the small number of shareholders of fiducian, there is no saving in electronic communication with shareholders,
as annual financial reports require a minimum run size. however, all information is posted on the fiducian website:
www.fiducian.com.au.
f i d u c i a n P o r t f o l i o s e r v i c e s l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 2 5
s h a r e h o l d e r i n f o r m a t i o n
a. distriBution of equity security holders By size of holding
analysis of numbers of equity security holders by size of holding, as at 31 july 2008:
DIStRIButION :
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 50,000
50,001 - 100,000
100,001 - and over
total
OPtIONS
ORDINARy ShAReS
8
22
7
16
3
0
56
96
317
78
77
19
30
617
there were 8 holders of a less than marketable parcel of ordinary shares.
B. equity s e c ur i ty ho ld e rs
twenty largest quoted equity security holders.
the names of the twenty largest registered shareholders of quoted equity securities as at 18 august 2008 are listed below:
NAMe
NuMBeR heLD
PeRCeNtAge OF ISSueD ShAReS
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
indyshri singh pty limited
hsbc custody nominees (australia) limited
national nominees limited
anZ nominees limited
j p morgan nominess australia limited
hunter place services pty ltd
norcad investments pty ltd
citigroup nominees pty ltd (cfs developing companies)
d r smith holdings pty ltd
mr erich gustav brosell
cogent nominees pty ltd
imperial pacific fund managers pty ltd
citigroup nominees pty ltd (cwlth small co fund 2)
mr inderjit singh
bond street custodians limited
imperial pacific fund managers pty ltd
Citigroup Nominees Pty Ltd (Cwlth Bank Super A/c)
mr david colin archibald
robcharta nominees (nsw) pty limited
perpetual trustees consolidated limited
8,898,500
3,657,389
3,482,300
1,878,545
1,403,645
1,069,000
977,998
685,858
530,000
500,000
496,970
412,302
391,021
367,500
364,536
361,000
285,259
252,000
237,500
229,874
26,481,197
26.94
11.07
10.54
5.69
4.25
3.24
2.96
2.08
1.60
1.51
1.50
1.25
1.18
1.11
1.10
1.09
0.86
0.76
0.72
0.70
80.15
unquoted equity securities
as at 30 june 2008:
tyPe OF SeCuRIty
options – managing director
options – employees
options – advisers
NuMBeR ON ISSue
NuMBeR OF hOLDeRS
200,000
336,275
322,806
859,081
2
30
24
56
P a g e 2 6
a n n u a l r e P o r t 2 0 0 8
s h a r e h o l d e r i n f o r m a t i o n c o n t i n u e d
c. su Bstan tial s ha re ho ld ers
substantial shareholders and associates as at 18 august 2008 (more than 5% of a class of shares) in the company are set
out below:
NAMe
NuMBeR heLD
PeRCeNtAge
indyshri singh pty limited and associates
hsbc custody nominees (australia) limited
national nominees limited
anZ nominees limited
9,599,307
3,657,389
3,482,300
1,878,545
29.06%
11.07%
10.54%
5.69%
d. voting r ig hts
the voting rights attaching to each class of equity securities are set out below:
Ordinary shares
on a show of hands each holder of ordinary shares has 1 vote and upon a poll 1 vote for each share held.
Options
no voting rights.
f i d u c i a n P o r t f o l i o s e r v i c e s l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 2 7
P a g e 2 8
a n n u a l r e P o r t 2 0 0 8
financiaL
report
this financial report covers both fiducian portfolio services limited as an
individual entity and the consolidated entity consisting of fiducian portfolio
services limited and its controlled entities. the financial report is presented
in australian currency.
fiducian portfolio services limited is a company limited by shares, incorporated
and domiciled in australia. its registered office and principal place of business is:
fiducian portfolio services limited
level 4, 1 york street
sydney nsw 2000
a description of the nature of the consolidated entity’s operations and
its principal activities is included in the joint report of the chairman and
managing director, and in the director’s report on pages 2-7, both of which
are not part of this financial report.
the financial report was authorised for issue by the directors on 27 august
2008. the company has the power to amend and reissue the financial report.
through the use of the internet, we have ensured that our corporate reporting
is timely, complete, and available globally at minimum cost to the company.
all press releases, financial reports and other information are available on our
website: www.fiducian.com.au.
f i d u c i a n P o r t f o l i o s e r v i c e s l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 2 9
i n c o m e s t a t e m e n t s
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
NOteS
CONSOLIDAteD
PAReNt eNtIty
revenue from ordinary activities
other income
dividend from subsidiary
commissions paid to advisers
employee benefits expense
depreciation and amortisation expense
other expenses
Profit before income tax expense
income tax expense
Profit for the year
Profit attributable to members of
Fiducian Portfolio Services Limited
earnings per share
4
5
6(a)
6(b)
7
23
32
2008
$’000
2007
$’000
2008
$’000
2007
$’000
27,768
25,817
25,282
23,103
828
-
(6,898)
(8,362)
(326)
755
-
(6,994)
(7,465)
(664)
772
200
(8,109)
(5,820)
(284)
710
-
(7,747)
(5,375)
(472)
(4,023)
(3,796)
(3,134)
(2,919)
8,987
2,718
7,653
2,344
8,907
2,632
7,300
2,196
6,269
5,309
6,275
5,104
6,269
5,309
6,275
5,104
earnings per share from profit from continuing
operations attributable to the ordinary equity
holders of the company:
basic earnings per share
diluted earnings per share
19.06 cents 15.89 cents
18.56 cents
15.21 cents
The above income statements should be read in conjunction with the accompanying notes.
P a g e 3 0
a n n u a l r e P o r t 2 0 0 8
B a l a n c e s h e e t s
a s a t 3 0 j u n e 2 0 0 8
NOteS
CONSOLIDAteD
PAReNt eNtIty
2008
$’000
2007
$’000
2008
$’000
2007
$’000
ASSetS
Current assets
cash and cash equivalents
trade and other receivables
other financial assets at fair
value through profit or loss
total current assets
Non-current assets
receivables
other financial assets
property, plant and equipment
deferred tax assets
intangible assets
total non-current assets
total assets
LIABILItIeS
Current liabilities
payables
current tax liabilities
total current liabilities
Non-current liabilities
deferred tax liabilities
provisions
total non-current liabilities
total liabilities
Net assets
eQuIty
contributed equity
reserves
retained profits
total equity
contingent liabilities
commitments for expenditure
10,912
2,836
10,868
3,077
9,831
3,119
9,930
3,015
480
492
480
492
14,228
14,437
13,430
13,437
748
-
277
686
3,604
5,315
19,543
2,258
850
3,108
6
474
480
561
-
164
720
3,839
5,284
19,721
2.623
1,408
4,031
56
463
519
748
3,875
227
562
249
5,661
19,091
561
3,865
126
597
463
5,612
19,049
2,024
896
2,920
4
376
380
2,341
1,286
3,627
54
367
421
3,588
15,955
4,550
15,171
3,300
15,791
4,048
15,001
8,982
259
6,714
10,451
148
4,572
8,982
259
6,550
10,451
148
4,402
15,955
15,171
15,791
15,001
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
27
28
The above balance sheets should be read in conjunction with the accompanying notes.
f i d u c i a n P o r t f o l i o s e r v i c e s l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 3 1
s t a t e m e n t o f c h a n g e s i n e q u i t y
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
NOteS
CONSOLIDAteD
PAReNt eNtIty
2008
$’000
2007
$’000
2008
$’000
2007
$’000
total equity at the beginning
of the financial year
Profit for the year
15,171
14,848
15,001
14,883
6,269
5,309
6,275
5,104
Transactions with equity holders in their
capacity as equity holders
contributions of equity, net of transaction costs
buy back of shares, inclusive of transaction costs
dividends provided for or paid
employee share options exercised
21
21
8
22
263
893
263
893
(1,732)
(2,991)
(1,732)
(2,991)
(4,127)
(2,924)
(4,127)
(2,924)
111
36
111
36
total transactions with equity holders
(5,485)
(4,986)
(5,485)
(4,986)
total equity at the end of the financial year
15,955
15,171
15,791
15,001
The above statement of changes in equity should be read in conjunction with the accompanying notes.
P a g e 3 2
a n n u a l r e P o r t 2 0 0 8
c a s h f l o W s t a t e m e n t s
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
Cash flows from operating activities
receipts from customers
(inclusive of goods and services tax)
payments to suppliers and employees
(inclusive of goods and services tax)
interest received
Income taxes (paid) / refunded
Net cash inflow / (outflow) from
operating activities
Cash flows from investing activities
payments for computer software
loans to related parties (associates, advisers
and staff)
investment in subsidiary
payments to acquire client portfolios
dividend from subsidiary
distributions from related trust
repayment of loans by associates & advisers
payments for property, plant and equipment
Net cash inflow / (outflow) from
investing activities
Cash flows from financing activities
payments for shares bought back
proceeds on exercise of options
dividends paid
Net cash inflow / (outflow) from
financing activities
NOteS
CONSOLIDAteD
PAReNt eNtIty
2008
$’000
2007
$’000
2008
$’000
2007
$’000
30,852
27,964
27,994
25,037
(22,334)
(19,859)
(20,054)
(17,416)
8,518
777
(3,292)
8,105
710
(2,558)
7,940
721
(3,037)
7,621
665
(2,441)
31
6,003
6,257
5,624
5,845
(12)
(1)
(10)
(1)
(333)
(134)
-
(13)
-
68
156
(193)
-
(15)
-
28
217
(115)
(333)
(10)
-
200
68
156
(162)
(134)
-
-
-
28
217
(113)
(327)
(20)
(91)
(3)
(1,733)
(2,990)
(1,733)
(2,990)
228
801
228
801
(4,127)
(2,924)
(4,127)
(2,924)
(5,632)
(5,113)
(5,632)
(5,113)
Net increase in cash held
44
1,124
(99)
729
cash and cash equivalents at the beginning
of the year
Cash and cash equivalents
at the end of year
10,868
9,744
9,930
9,201
9
10,912
10,868
9,831
9,930
The above cash flow statements should be read in conjunction with the accompanying notes.
f i d u c i a n P o r t f o l i o s e r v i c e s l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 3 3
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
1 Summ ary of S i gni fi cant acc ount ing Pol ici eS
The principal accounting policies adopted for the preparation of the financial report are set out below. These policies have
been consistently applied to all the years presented, unless otherwise stated. The financial report includes separate financial
statements for Fiducian Portfolio Services Limited as an individual entity and the Group consisting of Fiducian Portfolio
Services Limited and its subsidiaries.
(a) Basis of preparation
This general purpose financial report has been prepared in accordance with Australian Accounting Standards, other
authoritive pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the
Corporations Act 2001.
Compliance with IFRS
Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards (AIFRS).
Compliance with AIFS ensures that the financial report of Fiducian Portfolio Services Limited complies with International
Financial Reporting Standards (IFRS).
Historical cost convention
These financial statements have been prepared under the historical cost convention, as modified by the revaluation of
financial assets and liabilities at fair value through profit or loss, and certain classes of property, plant and equipment.
Critical accounting estimates
The preparation of financial statements in conformity with AIFRS requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
financial statements, are disclosed in Note 2.
(b) Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Fiducian Portfolio
Services Limited (company or parent entity) as at 30 June 2008 and the results of all controlled entities for the year then
ended. Fiducian Portfolio Services Limited and its subsidiaries together are referred to in this financial report as the Group.
Subsidiaries are all those entities (including special purpose entities) over which the Group has the power to govern the
financial and operating policies, generally accompany a shareholding of more than one-half of the voting rights.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated
from the date that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries
by the Group. Investments in subsidiaries are accounted for at cost in the parent company’s financial statements.
Intercompany transactions and balances 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 Group.
P a g e 3 4
a n n u a l r e P o r t 2 0 0 8
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
(c) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of
returns and amounts collected on behalf of third parties.
Revenue is recognised for the major business activities as follows:
(i) Management fees and commissions
Revenues comprising trustee and management fees are recognised on an accruals basis.
(ii) Interest income
Interest income is recognised on a time proportion basis using an effective interest method.
When a receivable is impaired, the Group reduces the carrying amount, being the estimated future cash flow
discounted at the original effective interest rate of the instrument, and continues unwinding the discount as
interest income. Interest income on impaired loans is recognised using the original effective interest rate.
(iii) Dividends
Dividends are recognised as revenue when the right to receive payment is established.
(iv) Distributions from related trusts
Distributions from related trusts are recognised as revenue when the right to receive payment is established.
(d) Income tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the
national income tax rate for Australia adjusted by changes in deferred tax assets and liabilities attributable to temporary
differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to
unused tax losses.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income
tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting or taxable profit or loss. Deferred income tax is
determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are
expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
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.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases
of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are
offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the
asset and settle the liability simultaneously.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.
Fiducian Portfolio Services Limited and its Australian wholly-owned operating entities have not formed a tax
consolidated group.
(e) Operating leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as
operating leases (Note 28). Payments made under operating leases (net of any incentives received by the lessee) are charged
to the income statement on a straight-line basis over the period of the lease.
f i d u c i a n P o r t f o l i o S e r v i c e S l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 3 5
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
(f) Trustee company and Responsible Entity
The company acts as a Trustee of Fiducian Superannuation Service and Responsible Entity of Fiducian Funds. The accounting
policies adopted by the company in the preparation of the financial statements for the year ended 30 June 2008 reflect
the fiduciary nature of the company’s responsibility for the assets and liabilities of the trusts. The financial statements do
not include the trusts’ assets and liabilities as future economic benefits and obligations derived from the trusts’ assets and
liabilities do not accrue to the company. In accordance with AASB 137 Provisions, Contingent Liabilities and Contingent
Assets, the trust assets and liabilities have not been disclosed as the directors consider the probability of the company
having to meet the liabilities of the trusts is remote.
(g) Impairment of assets
Goodwill and 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 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. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes
of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows which
are largely independent of the cash flows from other assets or groups of assets (cash-generating units). Non-financial assets
other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.
(h) Cash and cash equivalents
For cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with
financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
(i) Trade receivables
Trade receivables are recognised at fair value and subsequently measured at amortised cost, less provision for doubtful
receivables. Trade receivables are due for settlement no more than 120 days from the date of recognition for trade
receivables and financial planning fees, and no more than 30 days for other receivables.
Collectibility of trade receivables is reviewed on an ongoing basis. Receivables, which are known to be uncollectible, are
written off. An allowance account (provision for impairment of trade receivables) is used when there is objective evidence
that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant
financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default
or delinquency in payments (outside settlement terms) are considered indicators that the trade receivable is impaired.
The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated
future cash flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are not
discounted if the effect of discounting is immaterial.
The amount of the impairment loss is recognised in the income statement within other expenses. When a trade receivable
for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off
against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses
in the income statement.
(j) Investments and other financial assets
The Group classifies its investments in the following categories: financial assets at fair value through profit or loss, loans and
receivables, and other financial assets. The classification depends on the purposes for which the investments were acquired.
Management determines the classification of its investments at initial recognition and, in the case of assets classified as
held-to-maturity, re-evaluates this designation at each reporting date.
P a g e 3 6
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(j) Investments and other financial assets (continued)
(i) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading which are acquired principally
for the purpose of selling in the short term with the intention of making a profit.
(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 Group provides money 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
balance sheet date which are classified as non-current assets.
Loans and receivables are included in receivables in the balance sheet in Notes 10 and 12.
(k) Fair value estimation
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values
due to their short-term nature. 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 Group for similar financial
instruments.
(l) Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation. Historical cost includes expenditure
that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount
or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with
the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are
charged to the income statement during the financial period in which they were incurred.
Depreciation on assets is calculated using the straight-line method to allocate their cost or revalued amounts, net of their
residual values, over their estimated useful lives, as follows:
Furniture, office equipment and computers
2 – 8 years
Leasehold improvements
term of the lease
The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset’s
carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its
estimated recoverable amount in Note 1(g).
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the
income statement. When revalued assets are sold, it is Group policy to transfer the amounts included in other reserves in
respect of those assets to retained earnings.
(m) Intangible assets
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable
assets of the acquired subsidiary at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible
assets. Goodwill is not amortised. Instead, goodwill is tested for impairment annually or more frequently if events or
changes in circumstances indicate that it might be impaired, and are carried at cost less accumulated impairment losses.
Gains or losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. These units are all within the financial
planning segment.
Client portfolios
Consideration payable for the acquisition of client portfolios is deferred and amortised on a straight line basis over a period of
10 years. Client portfolios are also tested for impairment annually, or more frequently if events or changes in circumstances
indicate that they may be impaired, and is carried at cost less accumulated amortisation and impairment losses.
f i d u c i a n P o r t f o l i o S e r v i c e S l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 3 7
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f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
(m) Intangible assets (continued)
Deferred expenditure
Costs in respect of the development of new computer systems are deferred to future periods to the extent that it is
probable that the project will be a success considering its commercial and technical feasibility and its costs can be reliably
measured. The expenditure capitalised comprises all directly attributable costs, including costs of materials, services, direct
labour and an appropriate proportion of overheads. Other development costs that do not meet these criteria are recognised
as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a
subsequent period. Capitalised development costs are recorded as intangible assets and amortised from the point at which
the asset is ready for use on a straight-line basis over its useful life, up to 5 years.
The carrying amounts of all capitalised expenditure are tested for impairment annually to determine whether they exceed
their recoverable amount.
(n) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and
which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
(o) Provisions
Provisions for legal claims are recognised when the Group has a present legal or constructive obligation as a result of
past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been
reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined
by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with
respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the
present obligation at the balance sheet date. The discount rate used to determine the present value reflects current market
assessments of the time value of money and the risks specific to the liability. No such provision is required at year end.
(p) Employee benefits
(i) Wages and salaries, annual leave and sick leave
Liabilities for wages and salaries, and annual leave expected to be settled within 12 months of the reporting date
are recognised in other payables in respect of employee services up to the reporting date and are measured at the
amount expected to be paid when the liabilities are settled. Sick leave is brought to account as incurred.
(ii) Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present
value of expected future payments to be made in respect of services provided by employees up to the reporting
date using the projected unit cost method. Consideration is given to expected future wage and salary levels,
experience of employee departures and periods of service. Expected future payments are discounted using market
yields at the reporting date on national government bonds with terms of maturity and currency that match,
as closely as possible, the estimated future cash outflows.
(iii) Share-based payments
Share-based compensation benefits are provided to employees and advisers via the two share option plans.
Information relating to these schemes is set out in Note 25.
P a g e 3 8
a n n u a l r e P o r t 2 0 0 8
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(p) Employee benefits (continued)
Options granted before 7 November 2002 and vested before 1 January 2005
No expense is recognised in respect of options issued to employees for nil consideration. Shares issued following the
exercise of options are recognised at that time and the proceeds received allocated to share capital.
The fair value of options granted under the Fiducian Employee & Director Share Option Plan is recognised as an employee
benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the
period during which the employees become unconditionally entitled to the options.
The fair value at grant date is independently determined using a Binomial option pricing model that takes into account the
exercise price, the term of the option, the impact of dilution, the share price at grant date and the expected price volatility
of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
(q) 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.
If the entity reacquires its own equity instruments, for example as the result of a share buy-back, those instruments are
deducted from equity and the associated shares are cancelled. No gain or loss is recognised in the profit or loss and the
consideration paid including any directly attributable incremental costs (net of income taxes) is recognised directly in equity.
(r) Dividends
Provision is made only for the amount of any dividend declared, being appropriately authorised and no longer at the
discretion of the entity, on or before the end of the financial year but not distributed at balance date.
(s) Earnings per share
(i) Basic earnings per share
Basic earnings per share is determined by dividing the net profit after income tax attributable to equity holders 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.
(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.
(t) Goods and services tax
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the Australian Taxation Office (ATO). In this case it is recognised as part of the cost of acquisition of the
asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to the ATO is included with other payables in the balance sheet.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the ATO, are presented as operating cash flow.
(u) Rounding of amounts
The company is of a kind referred to in Class Order 98/0100 issued by the Australian Securities and Investments
Commission, relating to the ‘rounding off’ of amounts in the financial report. Amounts in the financial report have been
rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.
f i d u c i a n P o r t f o l i o S e r v i c e S l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 3 9
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
(v) New accounting standards and interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2008
reporting periods. The entity’s assessment of the impact of these new standards and interpretations is set out below.
(i) AASB 8 Operating Segments and AASB 2007-3 Amendments to Australian Accounting Standards
arising from AASB 8
AASB 8 and AASB 2007-3 are effective for annual reporting periods commencing on or after 1 January 2009.
AASB 8 will result in a significant change in the approach to segment reporting, as it requires adoption of a
‘management approach’ to reporting on financial performance. The information being reported will be based on
what the key decision makers use internally for evaluating segment performance and deciding how to allocate
resources to operating segments. The Group has not yet decided when to adopt AASB 8. Application of AASB 8
may result in different segments, segment results and different types of information being reported in the segment
note of the financial report. However, at this stage, it is not expected to affect any of the amounts recognised in
the financial statements.
(ii) Revised AASB 123 Borrowing Costs and AASB 2007-6 Amendments to Australian Accounting
Standards arising from AASB 123 [AASB 1, AASB 101, AASB 107, AASB 111, AASB 116 & AASB 138 and
Interpretations 1 & 12]
The revised AASB 123 is applicable to annual reporting periods commencing on or after 1 January 2009.
It has removed the option to expense all borrowing costs and - when adopted - will require the capitalisation of
all borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset.
There will be no impact on the financial report of the Group, as the Group already capitalises borrowing costs
relating to qualifying assets.
(iii) AASB-I 14 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
AASB-I 14 will be effective for annual reporting periods commencing on or after 1 January 2008. It provides
guidance on the maximum amount that may be recognised as an asset in relation to a defined benefit plan and the
impact of minimum funding requirements on such an asset. None of the Group’s defined benefit plans are subject
to minimum funding requirements and none of them is in a surplus position. The Group will apply AASB-I 14 from
1 July 2008, but it is not expected to have any impact on the Group’s financial statements.
(iv) Revised AASB 101 Presentation of Financial Statements and AASB 2007-8 Amendments to Australian
Accounting Standards arising from AASB 101
A revised AASB 101 was issued in September 2007 and is applicable for annual reporting periods beginning on or
after 1 January 2009. It requires the presentation of a statement of comprehensive income and makes changes to
the statement of changes in equity, but will not affect any of the amounts recognised in the financial statements.
If an entity has made a prior period adjustment or has reclassified items in the financial statements, it will need
to disclose a third balance sheet (statement of financial position), this one being as at the beginning of the
comparative period. The Group intends to apply the revised standard from 1 July 2009.
P a g e 4 0
a n n u a l r e P o r t 2 0 0 8
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f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
2 criti cal acco unti ng e S ti mat eS a n d a SSumPti onS
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
(i) Estimated impairment of goodwill
The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated
in Note 1(m). The recoverable amounts of the cash-generating units have been determined based on earnings multiples
requiring the use of sustainable revenue estimates and comparable market transactions.
(ii) Estimated impairment of client portfolios
The Group tests annually whether acquired client portfolios have suffered any impairment, in accordance with the
accounting policy stated in Note 1(m). The recoverable amounts of cash-generating units have been determined based on
discounted cash flow models which require the use of assumptions on discount rates, recurring revenues and cash flow
projections.
(iii) Deferred expenditure
The Group tests annually whether deferred expenditure has suffered any impairment, in accordance with the accounting
policy stated in Note 1(m).
3 Segment info rm at i on
(a) Description of segments
Business segments
The Group is organised into the following divisions by product and service type.
Funds Management and Administration
The company operates in a single segment as Trustee for a public offer superannuation fund – Fiducian Superannuation
Service, Operator of an Investor Directed Portfolio Service – Fiducian Investment Service and Responsible Entity for managed
investment schemes – Fiducian Funds.
Financial Planning
The company continued its specialist financial planning operations through its subsidiaries, Fiducian Financial Services Pty
Ltd, Harold Bodinnar & Associates Pty Ltd and Money & Advice Pty Ltd.
Geographical segments
The Group operates in a single geographical segment, Australia.
f i d u c i a n P o r t f o l i o S e r v i c e S l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 4 1
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
(b) Primary reporting – business segments
FuNDs
MaNaGEMENT
aND
aDMINIsTRaTION
FINaNCIal
PlaNNING
INTER-
sEGMENT
ElIMINaTIONs CONsOlIDaTED
$’000
$’000
$’000
$’000
2008
Sales to external customers
Intersegment sales
Total sales revenue
Other revenue
Total segment revenue
Profit from ordinary activities
before income tax expense
Income tax expense
Profit from ordinary activities
after income tax expense
-
27,768
25,282
-
25,282
772
26,054
2,486
5,680
8,166
56
8,222
(5,680)
(5,680)
-
(5,680)
8,707
280
-
-
27,768
828
28,596
8,987
2,718
6,269
Segment assets
19,091
1,837
(1,385)
19,543
Segment liabilities
3,300
997
(709)
3,588
Acquisitions of plant and equipment,
intangibles and other non-current segment assets
Depreciation, amortisation and impairment
174
284
31
42
Net cash inflow from operating activities
5,624
379
-
-
-
205
326
6,003
P a g e 4 2
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f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
(b) Primary reporting – business segments (continued)
FuNDs
MaNaGEMENT
aND
aDMINIsTRaTION
FINaNCIal
PlaNNING
INTER-
sEGMENT
ElIMINaTIONs CONsOlIDaTED
$’000
$’000
$’000
$’000
2007
Sales to external customers
Intersegment sales
Total sales revenue
Other revenue
Total segment revenue
Profit from ordinary activities
before income tax expense
Income tax expense
Profit from ordinary activities
after income tax expense
-
25,817
23,103
-
23,103
710
23,813
2,714
4,976
7,690
45
7,735
(4,976)
(4,976)
-
(4,976)
7,302
351
-
-
25,817
755
26,572
7,653
2,344
5,309
Segment assets
19,049
1,856
(1,184)
19,721
Segment liabilities
4,048
1,020
(518)
4,550
Acquisitions of plant and equipment,
intangibles and other non-current segment assets
Depreciation, amortisation and impairment
114
472
Net cash inflow from operating activities
5,845
4
192
412
-
-
-
118
664
6,257
f i d u c i a n P o r t f o l i o S e r v i c e S l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 4 3
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
4 revenu e
From continuing operations
Sales revenue
NOTEs
CONsOlIDaTED
PaRENT ENTITy
2008
$’000
2007
$’000
2008
$’000
2007
$’000
Fees and commissions received
27,393
25,418
24,700
22,524
Other
375
399
582
579
Revenue from ordinary activities
27,768
25,817
25,282
23,103
5 other inc o me
Interest received/receivable
Distributions from related trusts
Fair value gains on other financial assets at
fair value through profit or loss
11
6 exPenS e S
Profit before income tax includes the following specific expenses:
6(a) Depreciation, amortisation and impairment
Depreciation
Furniture, office equipment and computers
Total depreciation
Amortisation
Leasehold improvements
Capitalised computer software
Client portfolio acquisition costs
Total amortisation
Impairment
Goodwill
Total depreciation, amortisation and impairment
776
64
(12)
828
67
67
12
182
65
259
-
326
6(b) Other expenses
Other expenses
Professional services
Sales marketing and travel
Premises and equipment
Communication and computing
Printing and stationery
Auditors
Administration and other
Doubtful debts
Rental expense relating to operating leases
26
121
655
796
778
234
349
1,090
4,023
(11)
670
712
53
(10)
755
69
69
41
345
65
451
144
664
292
452
745
713
262
340
992
3,796
3
663
720
64
(12)
772
48
48
12
182
42
236
-
284
98
551
429
541
189
331
995
667
53
(10)
710
44
44
41
345
42
428
-
472
267
346
423
515
225
322
821
3,134
2,919
-
356
3
384
P a g e 4 4
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7
inc ome tax e x Pe nS e
(a) Income tax expense
Current tax
Deferred tax
Adjustments for current tax of prior periods
NOTEs
CONsOlIDaTED
PaRENT ENTITy
2008
$’000
2007
$’000
2,731
(16)
3
2,640
(298)
2
2008
$’000
2,644
(15)
3
2007
$’000
2,442
(247)
1
Income tax expense
2,718
2,344
2,632
2,196
Deferred income tax (revenue) expense
included in income tax expense comprises:
Decrease (increase) in deferred tax assets
(Decrease) increase in deferred tax liabilities
15
19
34
(50)
(199)
(99)
35
(50)
(147)
(100)
Deferred tax
(16)
(298)
(15)
(247)
(b) Numerical reconciliation of income
tax expense to prima facie tax payable
Profit from continuing operations before
income tax expense
Tax at the Australian tax rate of 30%
Tax effect of amounts which are not deductible
(taxable) in calculating taxable income:
Entertainment
Tax offset for franked dividends
Sundry items
8,987
2,696
7,653
2,296
8,907
2,672
7,300
2,190
13
-
6
8
-
38
11
(60)
6
5
-
-
2,715
2,342
2,629
2,195
Under provision in prior years
Income tax expense
3
2
3
1
2,718
2,344
2,632
2,196
(c) amounts recognised directly in equity
Aggregate current and deferred tax arising in the
reporting period and not recognised in net profit
or loss but directly debited or credited to equity
Current tax – credited directly to equity
21(b)
1
1
(3)
(3)
1
1
(3)
(3)
(d) Tax consolidation legislation
Fiducian Portfolio Services Limited and its Australian wholly-owned operating entities have not formed a tax consolidated group.
f i d u c i a n P o r t f o l i o S e r v i c e S l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 4 5
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8 divi dend S
Ordinary shares
Final ordinary franked dividend for the year ended 30 June 2007 of 6.0 cents
(2006: Fully franked 4.2 cents) per share paid on 12 September 2007.
Interim ordinary fully franked dividend for the year ended 30 June 2008 of 6.5 cents
(2007: Fully franked 4.5 cents) per share paid on 17 March 2008.
Total dividends paid in cash
PaRENT ENTITy
2008
$’000
2007
$’000
1,994
1,411
2,133
1,513
4,127
2,924
The Directors have declared the payment of a final fully franked dividend for the year ended 30 June 2008 in the amount
of 6.5 cents per ordinary share to be paid on shares registered on 27 August 2008 and payable on 17 September 2008.
Franked dividends
The franked portions of the final dividends recommended after 30 June 2008 will be franked out of existing franking
credits or out of franking credits arising from the payment of income tax for the year ending 30 June 2008.
Franking credits available for subsequent financial years
based on a tax rate of 30%
CONsOlIDaTED
PaRENT ENTITy
2008
$’000
2007
$’000
2008
$’000
2007
$’000
3,742
2,222
3,184
1,830
The above amounts represent the balances 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 amount of the provision for income tax.
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.
The consolidated amounts include franking credits that would be available to the parent entity if distributable profits from
subsidiaries were paid as dividends.
The impact on the franking account of the dividend recommended by the directors since year end, but not recognised as a
liability at year end, will be a reduction in the franking account of approximately $2,114,000 (2007: $1,994,000).
P a g e 4 6
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9
current a SS e tS – c aS h a nd c aSh equiv alent S
Cash at bank and in hand
Bank bills of exchange
Deposits securing bank guarantees
CONsOlIDaTED
PaRENT ENTITy
2008
$’000
2,776
7,988
148
2007
$’000
2,313
8,408
147
10,912
10,868
2008
$’000
1,721
7,988
122
9,831
2007
$’000
1,400
8,408
122
9,930
The Group’s and the parent entity’s exposure to interest rate risk is discussed in Note 34.
10 current a SS e tS – t r ad e an d oth er receiv a bleS
Amounts receivable from related entities:
Controlled entities
Related trusts
Business development loans
Staff loans
Other receivables
Prepayments
Less: Provision for impairment of receivables
Movements in provision for impairment of receivables
Balance at beginning of year
Written off against provision
Movement
Balance at end of year
-
-
2,159
2,438
48
36
260
387
2,890
(54)
2,836
(43)
-
(11)
(54)
48
46
228
360
3,120
(43)
3,077
(46)
-
3
(43)
418
2,093
48
36
182
351
3,128
(9)
3,119
(9)
-
-
(9)
134
2,301
48
46
146
349
3,024
(9)
3,015
(12)
-
3
(9)
At 30 June 2008, a provision for impairment exists for trade receivables outstanding greater than 120 days. There has been
no history of default and no material losses are expected.
Information about the Group’s and the parent entity’s exposure to interest rate risk in relation to trade and other
receivables is provided in Note 34.
f i d u c i a n P o r t f o l i o S e r v i c e S l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 4 7
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
11 current aSS e tS – o the r fin an cial a SSetS
at fair val ue t hr ou gh Prof it or lo SS
At beginning of year
Additions
Revaluation – fair value gains/(losses)
At end of year
Investment in related trust, at call
CONsOlIDaTED
2007
$’000
2008
$’000
PaRENT ENTITy
2007
$’000
2008
$’000
492
-
(12)
480
480
502
-
(10)
492
492
492
-
(12)
480
480
502
-
(10)
492
492
Changes in fair values of other financial assets at fair value through profit or loss are recorded in Other Income in the
income statement. Refer to Note 5.
Information about the Group’s and the parent entity’s exposure to credit and price risk is provided in Note 34.
12 no n-cu rr e nt a SS e tS – r ec eiv ab leS
Business development loans*
Loans to staff*
517
231
748
305
256
561
517
231
748
305
256
561
*Refer to Note 10 for the current portion of these receivables.
Of the total business development loans of $565,000 (2007: $353,000)(being both current and non current), business
development loans of $261,000 (2007: $93,000) are advanced to entities in which the parent entity has a 40% equity
interest in each.
The loans to 5 staff members were granted for a maximum term of 3 years, at commercial interest rates and secured.
(a) Impaired receivables and receivables past due
None of the non-current receivables are impaired or past due but not impaired.
(b) Fair values
The fair values and carrying values of non-current receivables of the Group are as follows:
Business development loans
Loans to staff
2008
2007
CaRRyING
aMOuNT
FaIR valuE
CaRRyING
aMOuNT
FaIR valuE
$’000
$’000
$’000
$’000
517
231
748
517
231
748
305
256
561
305
256
561
Information about the Group’s and the parent entity’s exposure to credit and interest rate risk is provided in Note 34.
P a g e 4 8
a n n u a l r e P o r t 2 0 0 8
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
13 n on- cur re nt a SS e tS – oth er f ina nc ial a SSet S
NaME OF ENTITy
COuNTRy OF
INCORPORaTION
Class OF
shaREs
EquITy
hOlDING
%
Fiducian Financial Services Pty Ltd
Australia
Ordinary
Harold Bodinnar & Associates Pty Ltd
Australia
Ordinary
SSP Pty Ltd
Fiducian Business Services Pty Ltd
(formerly Social Security Professionals Pty Ltd)
Australia
Ordinary
Australia
Ordinary
Inheritance Planners Pty Ltd
Australia
Ordinary
Money & Advice Pty Ltd
Australia
Ordinary
Froud Collins Planning Pty Ltd
Australia
Ordinary
Leasa Collins Financial Planning
Services Pty Ltd
Total investment by parent entity
These financial assets are carried at cost.
* Investments in associates
Australia
Ordinary
100
100
100
100
100
100
40
40
*
*
COsT OF PaRENT
ENTITy’s INvEsTMENT
2007
2008
$’000
$’000
100
3,325
100
3,325
-
10
-
440
-
-
-
-
-
440
-
-
3,875
3,865
Froud Collins Planning Pty Ltd and Leasa Collins Financial Planning Services Pty Ltd, all 40% associates, have not been
equity accounted in the consolidated financial statements as there is no director significant influence and the investments
were made to protect lending to these entities (Note 29). In addition, the parent entity, under the shareholder agreements,
is entitled to a management fee only once these entities become profitable and has waived its rights to participate in the
profits or losses of these associates. The parent entity also has no director or management participation in the operation of
these associates.
14 n on- cur re nt a SS e tS – ProPerty , Pla nt a nd equi P ment
CONsOlIDaTED
PaRENT ENTITy
2008
$’000
2007
$’000
2008
$’000
2007
$’000
Plant and equipment
Furniture, office equipment and computers
1,204
1,011
899
737
Less: Accumulated depreciation
(927)
(847)
(672)
(611)
277
164
227
126
f i d u c i a n P o r t f o l i o S e r v i c e S l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 4 9
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
14 non-current aSSetS – ProPerty, Plant and equiPment continued
Movements
Reconciliation of the carrying amounts of each class of property, plant and equipment are set out below.
Consolidated
at 1 July 2006
Cost or fair value
Accumulated depreciation
Net book amount
year ended 30 June 2007
Opening net book amount
Additions
Disposals
Depreciation / amortisation charge
Closing net book amount
at 30 June 2007
Cost or fair value
Accumulated depreciation
Net book amount
year ended 30 June 2008
Opening net book amount
Additions
Disposals
Depreciation / amortisation charge
Closing net book amount
at 30 June 2008
Cost or fair value
Accumulated depreciation
Net book amount
FuRNITuRE
aND OFFICE
EquIPMENT COMPuTERs
lEasEhOlD
IMPROvEMENTs
$’000
$’000
$’000
TOTal
$’000
327
(275)
52
52
40
-
(32)
60
367
(307)
60
60
43
-
(23)
80
410
(330)
80
425
(356)
69
69
64
(233)
197
97
256
(159)
97
97
73
-
(45)
125
329
(204)
125
377
(340)
37
37
11
-
(41)
7
388
(381)
7
7
77
-
(12)
72
465
(393)
72
1,129
(971)
158
158
115
(233)
124
164
1,011
(847)
164
164
193
-
(80)
277
1,204
(927)
277
P a g e 5 0
a n n u a l r e P o r t 2 0 0 8
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
14 non-current aSSetS – ProPerty, Plant and equiPment continued
Parent entity
at 1 July 2006
Cost or fair value
Accumulated depreciation
Net book amount
year ended 30 June 2007
Opening net book amount
Additions
Disposals
Depreciation / amortisation charge
Closing net book amount
at 30 June 2007
Cost or fair value
Accumulated depreciation
Net book amount
year ended 30 June 2008
Opening net book amount
Additions
Disposals
Depreciation / amortisation charge
Closing net book amount
at 30 June 2008
Cost or fair value
Accumulated depreciation
Net book amount
FuRNITuRE
aND OFFICE
EquIPMENT COMPuTERs
lEasEhOlD
IMPROvEMENTs
$’000
$’000
$’000
TOTal
$’000
102
(83)
19
19
38
-
(17)
40
140
(100)
40
40
32
-
(13)
59
172
(113)
59
378
(335)
43
43
64
(233)
205
79
209
(130)
79
79
53
-
(36)
96
262
(166)
96
377
(340)
37
37
11
-
(41)
7
388
(381)
7
7
77
-
(12)
72
465
(393)
72
857
(758)
99
99
113
(233)
147
126
737
(611)
126
126
162
-
(61)
227
899
(672)
227
f i d u c i a n P o r t f o l i o S e r v i c e S l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 5 1
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
15 no n-cu rr e nt a SS e tS – deferred ta x aSSetS
NOTEs
CONsOlIDaTED
PaRENT ENTITy
2008
$’000
2007
$’000
2008
$’000
2007
$’000
The balance comprises temporary differences attributable to:
Amounts recognised in profit or loss
Doubtful Debts
Employee benefits
Accrued expenditure
Provision for audit and taxation services
Provision for depreciation
Unrealised gains (losses)
Amortisation of client portfolios
Net deferred tax assets
Movements:
Opening balance at 1 July
Credited to the income statement
7
Closing balance at 30 June
Deferred tax assets likely to be recovered within 12 months
Deferred tax assets likely to be recovered after 12 months
16
357
43
95
93
6
76
13
386
80
89
95
-
57
3
275
42
90
93
6
53
3
294
80
84
95
-
41
686
720
562
597
720
(34)
686
511
175
686
521
199
720
568
152
720
597
(35)
562
410
152
562
450
147
597
461
136
597
16 n on-cu rr e nt a SS e tS – i nt a ng ib le a SSetS
Deferred expenditure
Capitalised expenditure – computer software
Less: Accumulated amortisation
Client portfolios
Cost of acquisition of client portfolios
Less: Accumulated amortisation
Goodwill
Goodwill on acquisition
Less: Accumulated amortisation and impairment
5,354
(5,343)
11
5,342
(5,161)
181
5,352
(5,343)
9
5,342
(5,161)
181
648
(254)
394
3,663
(464)
3,199
3,604
648
(189)
459
3,663
(464)
3,199
3,839
418
(178)
240
-
-
-
418
(136)
282
-
-
-
249
463
P a g e 5 2
a n n u a l r e P o r t 2 0 0 8
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
16 n on-cur r e nt a SS e tS – i nt ang ib le aSSet S c o n tin ue d
(a) Movements
Movements in each category are set out below:
at 1 July 2006
Cost
Accumulated amortisation and impairment
Net book amount
year ended 30 June 2007
Opening net book amount
Additions
Impairment charge
Amortisation charge
Closing net book amount
at 30 June 2007
Cost
Accumulated amortisation and impairment
Net book amount
year ended 30 June 2008
Opening net book amount
Additions
Impairment charge
Amortisation charge**
Closing net book amount
at 30 June 2008
Cost
Accumulated amortisation and impairment
Net book amount
CONsOlIDaTED
aCquIsITION
OF ClIENT
GOODwIll
ON
PORTFOlIOs aCquIsITION
CaPITalIsED
COMPuTER
sOFTwaRE*
$’000
$’000
$’000
TOTal
$’000
648
(124)
524
3,663
(320)
3,343
5,341
(4,816)
525
9,652
(5,260)
4,392
524
3,343
525
4,392
-
-
(65)
459
648
(189)
459
-
(144)
-
3,199
3,663
(464)
3,199
459
3,199
-
-
(65)
394
648
(254)
394
-
-
-
3,199
3,663
(464)
3,199
1
-
(345)
181
1
(144)
(410)
3,839
5,342
(5,161)
181
9,653
(5,814)
3,839
181
12
-
(182)
11
3,839
12
-
(247)
3,604
5,354
(5,343)
11
9,665
(6,061)
3,604
* Capitalised computer software costs is an internally generated intangible asset. The assets in this category have been amortised on the
basis of a 5 year useful life.
** amortisation of $247,000 (2007: $410,000) is included in depreciation, amortisation and impairment expense in the income statement.
f i d u c i a n P o r t f o l i o S e r v i c e S l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 5 3
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
16 no n-cu rr e nt a SS e tS – i nt ang ib le aSSetS c o n tin ue d
(b) Impairment tests for goodwill
Goodwill is allocated to the Group’s cash-generating units (CGUs) identified according to business segment. The recoverable
amount of a CGU is determined based on market value calculations. These calculations use recurring income measures
consistent with market valuations of similar financial services businesses.
(c) Impact of possible changes in key assumptions
There are no key assumptions made in the assessment of impairment of goodwill.
(d) Impairment charge
There has been no impairment charge recorded against goodwill during the financial year ended 30 June 2008
(2007: $144,000).
17 current liabilitie S – trade a nd o ther P a ya bleS
Trade payables
Other payables
Amounts due to related entities
Client portfolio deferred settlement
Employee entitlements accrued
CONsOlIDaTED
PaRENT ENTITy
2008
$’000
760
809
-
-
689
2,258
2007
$’000
906
1,046
13
658
2,623
2008
$’000
736
741
10
-
537
2,024
2007
$’000
826
862
109
-
544
2,341
Information about the Group’s and the parent entity’s exposure to credit and interest rate risk is shown in Note 34.
18 current li abi lit i e S – c ur ren t tax l iab ili tie S
Income tax
850
1,408
896
1,286
P a g e 5 4
a n n u a l r e P o r t 2 0 0 8
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
19 n on- cur re nt l i ab ili ti e S – deferred ta x lia b ilit ieS
NOTEs
CONsOlIDaTED
PaRENT ENTITy
2008
$’000
2007
$’000
2008
$’000
2007
$’000
The balance comprises temporary differences attributable to:
Amounts recognised in profit and loss
Income receivable
Unrealised gains (losses)
Depreciation and amortisation
Net deferred tax liabilities
Movements:
Opening balance 1 July
Credited to the income statement
7
Closing balance 30 June
Deferred tax liabilities likely to be settled within 12 months
Deferred tax liabilities likely to be settled after 12 months
4
-
2
6
56
(50)
6
6
-
6
4
(2)
54
56
155
(99)
56
54
2
56
4
-
-
4
54
(50)
4
4
-
4
4
(2)
52
54
154
(100)
54
52
2
54
20 n on- cur re nt l i ab ili ti e S – Pro vi Sio nS
Employee benefits – long service leave
474
463
376
367
The provision for long service leave includes all pro-rata entitlements where employees have not yet completed the required
period of service and also those where employees are entitled to pro-rata payments. The entire amount is presented as non-
current as no amounts are expected to be settled within the next 12 months.
f i d u c i a n P o r t f o l i o S e r v i c e S l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 5 5
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
21 contri bu te d e qui t y
(a) share capital
Ordinary shares – fully paid
(b) Movements in ordinary share capital
CONsOlIDaTED
2007
$’000
2008
$’000
PaRENT ENTITy
2007
$’000
2008
$’000
8,982
10,451
8,982
10,451
DETaIls
NuMBER OF shaREs
avERaGE PRICE
$,000
DaTE
1 Jul 2006
30 Jun 2007
Opening Balance
Shares bought back on-market and cancelled
Buy-back transaction costs
Current tax credit recognised directly in equity
Options exercised
Transfer from share-based payments reserve
Balance
Shares bought back on-market and cancelled
Buy-back transaction costs
Current tax credit recognised directly in equity
Options exercised
33,274,003
(1,172,551)
$2.54
930,682
$0.86
33,032,134
(635,359)
$2.72
365,510
$0.62
12,549
(2,979)
(9)
(3)
801
92
10,451
(1,728)
(5)
1
228
35
8,982
30 Jun 2008
Transfer from share-based payments reserve
Balance
32,762,285
(c) 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.
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.
(d) share buy-back
Between July 2007 and June 2008 the company purchased and cancelled ordinary shares on-market in order to reduce the
company’s capital and surplus liquidity. The buy-back and cancellation was originally announced to the market on
15 December 2005, and was extended during 2006 and 2007, and again on 31 March 2008. During the financial year
the shares were acquired at an average price of $2.72 per share, with prices ranging from $2.31to $2.90. The net cost of
$1,732,000, including $5,000 of transaction costs, was deducted from equity.
At 30 June 2008, 471,000 shares remained available to be repurchased under the most recently announced buy back.
(e) Options
Information relating to option plans and options issued, excercised and lapsed during the year is set out in Note 25.
(f) Capital risk management
The Group’s and the parent entity’s objectives when managing capital are to safeguard their ability to continue as a going
concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders and to maintain
an optimal capital structure to minimise the cost of capital. This is balanced against the need to maintain a minimum level
of capital as required under the Group’s AFSL licences, and the Group has operated well in excess of these minimums.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders,
return capital to shareholders, or issue new shares upon exercise of outstanding options. There has been no borrowing to
maintain capital adequacy.
P a g e 5 6
a n n u a l r e P o r t 2 0 0 8
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
22 reServ e S
NOTEs
CONsOlIDaTED
PaRENT ENTITy
2008
$’000
2007
$’000
2008
$’000
2007
$’000
share based payments reserve
Balance 1 July
Option expense
Transfer to share capital (options exercised)
Balance 30 June
148
146
(35)
259
112
128
(92)
148
148
146
(35)
259
112
128
(92)
148
The share based payments reserve is used to recognise the fair value of options issued but not exercised.
23 retain ed ProfitS
Balance 1 July
Net profit for the year
Dividend from subsidiary
Dividends paid
Balance 30 June
4,572
6,269
-
(4,127)
6,714
2,187
5,309
200
(2,924)
4,572
4,402
6,075
-
(4,127)
6,550
2,222
5,104
(2,924)
4,402
8
24 key ma na ge m en t Pe r S o nnel di Scl oSureS
NOTEs
CONsOlIDaTED
PaRENT ENTITy
2008
$’000
2007
$’000
2008
$’000
2007
$’000
(a) Key mangement personnel compensation
Short-term employee benefits
Post employment benefits
Share-based payments
670,516
664,082
670,516
664,082
19,777
75,447
17,093
75,630
19,777
75,447
17,093
75,630
765,740
756,805
765,740
756,805
Detailed remuneration disclosures are provided in sections A-E of the Remuneration Report contained in the Directors Report.
(b) Equity instrument disclosures relating to key management personnel
(i) Options provided as remuneration and shares issued on exercise of such options
Details of options provided as remuneration and shares issued on exercise of such options, together with terms and
conditions of the options, can be found in section D of the Remuneration Report.
(ii) Option holdings
The numbers of shares in the company held by current directors of Fiducian Portfolio Services Limited, including their
personally related and associated entities, are set out on the following page. No shares were granted during the period
as compensation.
f i d u c i a n P o r t f o l i o S e r v i c e S l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 5 7
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
(b) Equity instrument disclosures relating to key management personnel (continued)
2008
NaME
BalaNCE aT
ThE sTaRT OF
ThE yEaR
GRaNTED DuRING
ThE yEaR as
REMuNERaTION
ExERCIsED
laPsED DuRING
ThE yEaR
BalaNCE aT
ThE END OF
ThE yEaR
vEsTED aND
ExERCIsaBlE
I Singh*
F Khouri**
100,000
-
-
-
100,000
-
-
-
200,000
200,000
-
-
* 15,000 options are proposed to be issued in accordance with Mr Singh’s employment contract after the end of the year, subject
to approval by shareholders.
** 7,182 Adviser options are held by an entity in which F Khouri has an interest.
2007
NaME
BalaNCE aT
ThE sTaRT OF
ThE yEaR
GRaNTED DuRING
ThE yEaR as
REMuNERaTION
ExERCIsED
laPsED DuRING
ThE yEaR
BalaNCE aT
ThE END OF
ThE yEaR
vEsTED aND
ExERCIsaBlE
I Singh
200,000
(200,000)
100,000
R E Bucknell
P Leeson*
A Koroknay
50,000
25,500
-
(50,000)
(25,000)
-
-
-
-
-
-
-
-
100,000
100,000
-
-
-
-
-
-
* 109,199 Adviser options are held, in addition, by an entity in which P Leeson has an interest.
Note: The assessed fair value at grant date of options granted to the individuals is detailed in Note 25.
(ii) Shareholdings
The numbers of shares in the company held by current directors of Fiducian Portfolio Services Limited, including
their personally related and associated entities, are set out below. No shares were granted during the period
as compensation.
2008
NaME
I Singh
R E Bucknell
A Koroknay
F Khouri
2007
NaME
I Singh
R E Bucknell
P Leeson
A Koroknay
BalaNCE aT ThE
sTaRT OF ThE yEaR
9,486,500
1,050,000
-
-
RECEIvED DuRING
ThE yEaR ON ThE
ExERCIsE OF
aDvIsER OPTIONs
-
-
-
107,373
OThER ChaNGEs
DuRING ThE yEaR
BalaNCE aT ThE END
OF ThE yEaR
9,486,500
1,050,000
-
-
-
-
-
107,373
BalaNCE aT ThE
sTaRT OF ThE yEaR
RECEIvED DuRING
ThE yEaR ON ThE
ExERCIsE OF DIRECTOR
OPTIONs
OThER ChaNGEs
DuRING ThE yEaR
BalaNCE aT ThE END
OF ThE yEaR
9,261,000
1,000,000
90,000
-
-
-
200,000
-
225,500
50,000
152,000
-
9,486,500
1,050,000
138,000
-
Shares provided on exercise of options
No ordinary shares in the company were provided as a result of the exercise of remuneration options to any
director of Fiducian Portfolio Services Limited and other key management personnel of the Group during the period
(2007: 275,000).Entities with which a director has an interest exercised 107,373 adviser options during the year
(2007: nil options). No amounts are unpaid on any shares issued on the exercise of options.
P a g e 5 8
a n n u a l r e P o r t 2 0 0 8
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
(c) loans to directors
No loans were made to directors during the financial year (2007: Nil).
(d) Other transactions with key management personnel
A director, Mr R E Bucknell, is a director and shareholder of Hunter Place Services Pty Ltd, a company which provides his
services as a director to the company.
A director, Mr A Koroknay, is a consultant with the legal firm HWL Ebsworth, which provides legal services to the Group
during the year on normal commercial terms and conditions.
A former director, Mr P Leeson, is an authorised representative under the Fiducian Financial Services Pty Ltd Australian
Financial Services Licence and is a director and shareholder of Provident Financial Planning Pty Ltd, which is a franchisee
of Fiducian Financial Services Pty Ltd. Provident Financial Planning Pty Ltd places business with and receives commissions
from the Group. All transactions are on normal commercial terms and conditions. Mr Leeson retired as a director at the last
meeting of shareholders on 24 October 2007.
A director, Mr F Khouri, is an authorised representative under the Fiducian Financial Services Pty Ltd Australian Financial
Services Licence and is a director and shareholder of Hawkesbury Financial Services Pty Ltd, which is a franchisee of Fiducian
Financial Services Pty Ltd. Hawkesbury Financial Services Pty Ltd places business with and receives commissions from the
company. All transactions are on normal commercial terms and conditions.
Aggregate amounts of each of the above types of other transactions with current directors of Fiducian Portfolio Services Limited:
amounts recognised as an expense
Directors’ fees and committee fees
Legal & consulting fees
Commission paid or payable
shares under option
CONsOlIDaTED
2008
$
2007
$
240,293
241,722
9,858
5,400
590,141
768,061
840,292
1,015,183
Unissued ordinary shares of Fiducian Portfolio Services Limited under option at the date of this report are disclosed in
Note 25 of the Financial Report.
No option holder has any right under the options to participate in any other share issue of the company or any other entity
until after the exercise of the option.
shares issued on the exercise of options
The details of ordinary shares of Fiducian Portfolio Services Limited issued during the year ended 30 June 2008 on the
exercise of options granted under the Fiducian Portfolio Services Limited Employee & Director Share Option Plan and the
Adviser Share Option Plan are disclosed under Note 25 to the Financial Report.
f i d u c i a n P o r t f o l i o S e r v i c e S l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 5 9
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
25 Share b a Se d Payme ntS
(a) Employee and director share option plan (EsOP)
The establishment of the Fiducian Portfolio Services Limited ESOP was approved by shareholders at the 2000 annual
general meeting. The ESOP is designed to provide long-term incentives for senior managers and directors to deliver
long-term shareholder returns. Under the plan, participants are granted options which only vest if certain performance
standards are met. Participation in the plan is at the Board’s discretion and no individual has a contractual right to
participate in the plan or receive any guaranteed benefits.
The parent entity has established the ESOP, which is designed to provide incentives to employees and directors. All grants
of options under the ESOP are subject to compliance with the Corporations Act 2001 and ASX Listing Rules.
The directors may, from time to time, determine which employees and directors may participate in the ESOP, and the
number of options that may be issued to them. The directors have an absolute discretion to determine who will participate
and the number of options that may be issued. The ESOP provides for an upper limit on the number of options that may
be outstanding, the exercise price, exercise period and expiry, and adjustments in the event of capital restructuring. The
directors have resolved that the ESOP no longer applies to non-executive directors.
Options are granted under the plan for no consideration. Employee options are granted for a five year period, 35% of each
tranche vests after one year, 80% vest after two years and 100% vest after three years. Director options vest after one
year. Options granted under the plan carry no dividend or voting rights. When exercisable, each option is converted into
one ordinary share on payment of the exercise price.
The exercise price of options is based on volume weighted average price at which the company’s share are traded on the
Australian Securities Exchange during the month preceding the date the options are granted. The directors determined
to issue 150,000 options (2007:167,500) options to staff during the year at an exercise price of $2.65 (2007: $1.29), and
41,050 options expired (2007: 2000).
Subject to prior approval by shareholders, the company may issue each year a maximum of 100,000 options to the
executive director for each year of service, subject to performance criteria. The Directors have resolved to issue 15,000
options at an exercise price of $2.30 (2007: 100,000 options at $2.65) to the executive director in respect of the year
ended 30 June 2008.
(b) adviser share option plan (asOP)
The parent entity has established the ASOP, which is designed to provide incentives to adviser groups to reflect their
ongoing commitment by way of contributions of income to the parent entity. All grants of options under the ASOP
are subject to compliance with the Corporations Act 2001 and ASX Listing Rules. Options granted under the plan
carry no dividend or voting rights. When exercisable, each option is converted into one ordinary share on payment of
the exercise price.
The board may invite an adviser group to participate in the ASOP. Where the adviser group has accepted this invitation,
the adviser group will be eligible to participate in the ASOP in a particular year. No consideration is payable in respect
of acceptance of an invitation to participate nor for the grant of options. Each option allows the holder to acquire one
ordinary share on exercise of the option provided income to the Group is maintained in the three years after issue, or the
options lapse in whole or in part. The number of options to be issued in respect of an adviser group for a financial year
is determined (by a formula) at the date of announcement of Fiducian’s audited annual results to the ASX following the
financial year.
The ASOP provides for an upper limit on the number of options that may be outstanding, the exercise price, exercise period
and expiry, and adjustments in the event of capital restructuring. The ASOP was extended to 2008 or when 17,347,000
options and preference shares have been issued. Options are granted for no consideration. The directors have determined
to extend the ASOP to 2011 as total adviser options and preference shares issued since inception total only 6,815,617.
P a g e 6 0
a n n u a l r e P o r t 2 0 0 8
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
25 Share b a Se d P ayme ntS co n tin ue d
Set out below are summaries of options granted under various option plans:
GRaNT
DaTE
ExPIRy
DaTE
BalaNCE aT
ExERCIsED
ExERCIsE sTaRT OF ThE DuRING ThE DuRING ThE
yEaR
NuMBER
yEaR
NuMBER
yEaR
NuMBER
GRaNTED
PRICE
FORFEITED BalaNCE aT
END OF ThE
yEaR
NuMBER
DuRING ThE
yEaR
NuMBER
vEsTED aND
ExERCIsaBlE
aT END OF
ThE yEaR
NuMBER
Consolidated and parent entity – 2008
ESOP – Managing Director – Note 25(a)
26 Oct 2006
26 Oct 2011
$1.29
100,000
-
30 Oct 2007
30 Oct 2012
$2.65
-
100,000
100,00
100,000
-
-
-
-
-
-
100,000
100,000
100,000
-
200,000
100,000
ESOP – Staff – Note 25(a)
24 Aug 2004
24 Aug 2009
$0.55
107,500
22 Feb 2005
22 Feb 2010
$0.73
3 Jul 2006
3 Jul 2011
31 Jul 2007
3 Jul 2012
$1.29
$2.65
65,750
167,500
-
-
-
(76,500)
(2,000)
29,000
(25,550)
(1,800)
38,400
29,000
38,400
(11,375)
(17,250)
138,875
111,100
-
150,000
-
(20,000)
130,000
-
340,750
150,000
(113,425)
(41,050)
336,275
178,500
ASOP – Advisers – Note 25(b)
5 Sep 2002
5 Sep 2007
3 Sep 2003
3 Sep 2008
$0.91
$0.48
24 Aug 2004
24 Aug 2009
$0.55
23 Aug 2005
23 Aug 2010
$0.87
29 Aug 2006
29 Aug 2011
$1.68
104,341
176,931
139,650
157,120
70,382
-
-
-
-
-
30 Sept 2007
30 Sept 2012
$3.45
-
32,970
(57,586)
(46,755)
-
(98,430)
-
78,501
(96,069)
(23,944)
19,637
-
-
-
(34,314)
122,806
-
70,382
(1,490)
31,480
-
78,501
19,637
-
-
-
Total
1,089,174
282,970
(365,510)
(147,553)
859,081
376,638
648,424
32,970
(252,085)
(106,503)
322,806
98,138
Weighted average exercise price
$0.88
$2.74
$0.62
$1.14
$1.56
$0.97
The volume weighted average share price at the date of exercise of options exercised during the year ended 30 June 2008 was
$2.74 (2007 - 2.24)
f i d u c i a n P o r t f o l i o S e r v i c e S l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 6 1
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
25 Share b a Se d Payme ntS co n tin ue d
GRaNT
DaTE
ExPIRy
DaTE
BalaNCE aT
ExERCIsED
ExERCIsE sTaRT OF ThE DuRING ThE DuRING ThE
yEaR
NuMBER
yEaR
NuMBER
yEaR
NuMBER
GRaNTED
PRICE
FORFEITED BalaNCE aT
END OF ThE
yEaR
NuMBER
DuRING ThE
yEaR
NuMBER
vEsTED aND
ExERCIsaBlE
aT END OF
ThE yEaR
NuMBER
Consolidated and parent entity – 2007
ESOP – Managing Director – Note 25(a)
29 Oct 2001
29 Oct 2006
$1.27
26 Oct 2005
26 Oct 2010
$0.87
218,014
100,000
-
-
(218,014)
(100,000)
26 Oct 2006
26 Oct 2011
$1.29
-
100,000
-
318,014
100,000
318,014
ESOP – Staff – Note 25(a)
5 Sep 2002
5 Sep 2007
$0.82
24 Aug 2004
24 Aug 2009
$0.55
22 Feb 2005
22 Feb 2010
$0.73
150,000
199,000
110,000
-
-
-
(150,000)
(44,250)
3 Jul 2006
3 Jul 2011
$1.29
-
167,500
-
ASOP – Advisers – Note 25(b)
7 Sep 2001
7 Sep 2006
5 Sep 2002
5 Sep 2007
3 Sep 2003
3 Sep 2008
$1.27
$0.91
$0.48
24 Aug 2004
24 Aug 2009
$0.55
23 Aug 2005
23 Aug 2010
$0.87
287,474
189,564
364,248
139,650
173,908
-
-
-
-
-
(85,223)
(187,317)
-
(16,788)
29 Aug 2006
29 Aug 2011
$1.68
-
70,382
-
-
-
-
-
-
-
-
100,000
100,000
-
-
-
65,750
167,500
-
-
-
-
-
86,000
52,600
-
-
-
-
-
-
104,341
104,341
176,931
176,931
139,650
157,120
70,382
-
-
-
(89,500)
(2,000)
107,500
459,000
167,500
283,750
2,000
340,750
138,600
(39,590)
(247,884)
-
-
Total
1,931,858
337,882
(930,682)
(249,884) 1,089,174
419,872
1,154,844
70,382
(328,918)
(247,884)
648,424
281,272
Weighted average exercise price
$0.84
$1.37
$0.86
$1.26
$0.88
$0.63
The volume weighted average remaining contractual life of share options outstanding at the end of the period was 2.81
years (2007 – 2.32 years).
P a g e 6 2
a n n u a l r e P o r t 2 0 0 8
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
25 Share b a Se d P ayme ntS co n tin ue d
Fair value of options granted
The assessed fair value at grant date of options granted during the year ended 30 June 2008 was 75 cents per option for
executive director, 53 cents per option for staff and 36 cents per share for advisers (2007 – 79 cents per share for executive
director 25 cents for staff and 18 cents per share for advisers). The fair value at grant date is independently determined
using a Binomial option pricing model that takes into account the exercise price, the term of the option, the impact of
dilution, the share price at grant date and the expected price volatility of the underlying share, the expected dividend yield
and the risk free interest rate for the term of the option.
The model inputs for options granted during the year ended 30 June 2008 included:
EsOP – DIRECTOR
2007
2008
EsOP – EMPlOyEEs
2007
2008
EsOP – aDvIsERs
2007
2008
(a)
options are granted for no consideration, have a five year life , and each tranche vests and is exercisable progressively
after 1 year.
(b) exercise price
$2.65
$1.29
$1.29
$1.29
$3.45
$1.68
(c) grant date:
(d) expiry date:
30 Oct 2007 3 July 2006 31 July 2007 26 Oct 2011 31 July 2007 3 July 2006
30 Oct 2012 3 July 2011 31 July 2012 26 Oct 2011 31 July 2012 3 July 2011
(e) share price at grant date:
$2.90
$1.90
$2.85
$1.36
$2.85
$1.36
(f) expected price volatility of
the company’s shares:
(g) expected dividend yield:
55%
4.0%
50%
4.8%
55%
4.0%
50%
6.2%
55%
4.0%
50%
6.2%
(h) risk-free interest rate:
6.55%
5.75%
6.30%
5.75%
6.30%
5.75%
(I)
lapse (exit) rate
0%
0%
25%
25%
35%
35%
The expected price volatility is based on the historic volatility at grant date (based on the remaining life of the options),
adjusted for any expected changes to future volatility due to publicly available information.
(c) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit
expense were as follows:
CONsOlIDaTED
PaRENT ENTITy
2008
$
2007
$
2008
$
2007
$
Options issued under ESOP
155,553
63,190
155,553
63,190
f i d u c i a n P o r t f o l i o S e r v i c e S l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 6 3
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
26 remun e r at i on of au di tor S
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related
practices and non-related audit firms:
(a) audit services
PricewaterhouseCoopers Australian firm:
Audit and review of financial reports
108,500
99,700
90,500
81,700
CONsOlIDaTED
PaRENT ENTITy
2008
$
2007
$
2008
$
2007
$
Other audit related work, including audit of
entities for which the parent entity is trustee,
manager or responsible entity
(b) Non-audit services
Audit-related services
PricewaterhouseCoopers Australian firm:
227,050
228,100
227,050
228,100
Audit of regulatory returns
13,500
12,600
13,500
12,600
Total remuneration
349,050
340,400
331,050
322,400
It is the Group’s policy to employ PricewaterhouseCoopers on assignments additional to their statutory audit duties where
PricewaterhouseCoopers’ expertise and experience with the Group are important.
P a g e 6 4
a n n u a l r e P o r t 2 0 0 8
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
27 conti ngen t li ab ili ti e S
The parent entity and Group had contingent liabilities at 30 June 2008 in respect of:
(a) bank guarantees for property leases of parent and group entities amounting to $567,000 (2007: $554,000).
(b) bank guarantee for AFS licence of a subsidiary amounting to $20,000 (2007: $20,000).
Client retention service fee
Under the terms of salary agreements made by Harold Bodinnar & Associates Pty Ltd with certain long serving salaried
financial advisers, those advisers are entitled to a service fee subsequent to their retirement from the company, under
conditions designed to protect the company’s client base. Eligibility to this service fee consists of a mix of service period
and income thresholds, and is intended to protect the entity from loss of clients to long serving advisers after they retire.
The amount is based on certain income criteria that may increase or decrease prior to retirement date. Payment of this fee
is subject to further ongoing conditions, including client retention and the provision of support services to the entity to
achieve this aim, and is payable in arrears out of income earned from the retained client base over a period of two years.
The benefit is personal to the adviser, is not transferable, can be stopped by or repaid to Harold Bodinnar & Associates Pty
Ltd should there be a breach of conditions, and will be reduced if the adviser purchases some or all of their client base at
or after retirement.
At the date of this report, the present value of the contingent liability is made up as follows:
Advisers have met eligibility conditions but not yet retired
Advisers still to meet all eligibility conditions
CONsOlIDaTED
PaRENT ENTITy
2008
$’000
2007
$’000
2008
$’000
2007
$’000
185
538
723
177
397
574
-
-
-
-
-
-
No material losses are anticipated in respect of the above contingent liabilities.
f i d u c i a n P o r t f o l i o S e r v i c e S l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 6 5
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
28 com mi tme nt S f or e x Pe ndit ure
(a) Capital expenditure
Commitments in relation to systems development
payable within one year
(b) Operating leases
Commitments for minimum lease payments in relation
to non-cancellable operating leases are payable as follows:
Within one year
Later than one year but not later than 5 years
CONsOlIDaTED
PaRENT ENTITy
2008
$’000
2007
$’000
2008
$’000
2007
$’000
137
-
137
-
267
435
702
669
702
1,371
255
429
684
657
684
1,341
29 related Par t y tr anS ac tio nS
(a) Parent entity
The parent entity within the Group is Fiducian Portfolio Services Limited.
(b) subsidiaries
Interests in subsidiaries are set out in Note 13.
The consolidated financial statements incorporate the assets, liabilities and results of Fiducian Financial Services Pty Ltd,
Harold Bodinnar & Associates Pty Ltd, Money & Advice Pty Ltd and Fiducian Business Services Pty Ltd in accordance with the
accounting policy described in Note 1(b).
(c) Transactions with related parties
Transactions between Fiducian Portfolio Services Limited and other entities in the wholly-owned group during the years
ended 30 June 2008 and 2007 consisted of:
A. commission paid by Fiducian Portfolio Services Limited
B. provision of software by Fiducian Portfolio Services Limited
recovery of group costs, such as insurance, by Fiducian Portfolio Services Limited
C.
D.
interest free working capital advanced by and repaid to Fiducian Portfolio Services Limited
E. Collection of commission by AFS licensed companies on behalf of other members of the group.
The above transactions were on normal commercial terms and conditions and at market rates..
(d) Outstanding balances arising from sales/purchases of services provided
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Current receivables (sales of goods and services)
Current payables (purchases of goods and services)
PaRENT ENTITy
2008
$
2007
$
417,678
134,315
9,599
109,696
No provisions for doubtful receivables have been raised in relation to any outstanding balances, and no expense has been
recognised in respect of bad and doubtful receivables due from related parties.
P a g e 6 6
a n n u a l r e P o r t 2 0 0 8
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
29 related P ar ty t ra nS act ionS c o nt in ue d
(d) Transactions with related parties
The following transactions occurred with related parties:
OwNERshIP
INTEREsT*
2008
$
2007
$
2008
$
2007
$
CONsOlIDaTED
PaRENT ENTITy
wholly owned group
Fiducian Financial Services Pty Ltd
Dividend paid to parent entity
Commission paid
Management fees and systems costs recovered
Harold Bodinnar & Associates Pty Ltd
Commissions paid
Management fees
Money & Advice Pty Ltd
Commissions paid
Expenses paid and systems costs recovered
100%
100%
100%
Fiducian Business Services Pty Ltd
100%
Other related parties
Froud Collins Planning Pty Ltd
Commissions paid
Business development loan
Leasa Collins Financial Planning Pty Ltd
Commissions paid
Business development loan
Related trusts
Fiducian Investment Service
Operator fees income
Fiducian Superannuation Service
Trustee fees income
Fiducian Funds
Responsible entity fees income
40%
40%
Nil
Nil
Nil
-
-
-
-
-
-
-
-
-
-
-
200,000
3,394,091
382,352
-
3,096,487
376,323
-
-
2,177,138
305,870
1,777,274
274,456
-
-
-
110,994
176,365
102,540
152,742
-
-
379,567
378,706
65,126
-
-
65,126
59,344
179,650
124,003
28,338
-
179,650
-
28,338
5,710,231
3,584,218
5,710,231
3,584,218
15,042,707 13,918,127
15,042,707 13,918,127
4,216,033
3,313,700
4,216,033
3,313,700
* ‘Ownership Interest’ means the percentage of capital of the company held directly and/or indirectly through another entity by Fiducian
Portfolio Services Limited.
f i d u c i a n P o r t f o l i o S e r v i c e S l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 6 7
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
30 economi c d e Pe nde n cy
The trading activity of the entity depends upon remaining as Operator of the Fiducian Investment Service, Trustee of
Fiducian Superannuation Service and Responsible Entity of Fiducian Funds.
31 recon cil iat io n of P r of it or lo SS a f ter in come ta x t o n et
caSh inf l ow fr om o Pe ra ti ng ac tivi ti eS
CONsOlIDaTED
PaRENT ENTITy
Profit for the year
Impairment of goodwill
Non-cash employee benefit expense
Dividend and investment income
Depreciation and amortisation
Value of fixed assets written off
Net (gain) loss on sale of non-current assets
Changes in operating assets and liabilities:
Decrease/(increase) in accounts receivable
Increase/(decrease) in income tax payable
Decrease/(increase) in other assets at fair value
Increase/(decrease) in trade creditors
Increase/(decrease) in other creditors
Increase/(decrease) in related entities balance
Decrease/(increase) in future income tax benefit
Increase/(decrease) in provision for deferred income tax
Net cash inflow from operating activities
2008
$’000
6,269
-
200
(64)
326
-
1
216
(558)
12
(146)
(237)
-
34
(50)
6,003
2007
$’000
5,309
144
325
(53)
664
231
(376)
(335)
84
10
116
436
-
(199)
(99)
6,257
2008
$’000
6,275
-
149
(264)
284
-
1
166
(390)
12
(90)
(121)
(383)
35
(50)
5,624
2007
$’000
5,104
-
245
(53)
472
233
(232)
(282)
2
10
123
355
115
(147)
(100)
5,845
P a g e 6 8
a n n u a l r e P o r t 2 0 0 8
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
32 earn ing S Pe r Shar e
Earnings per share using weighted average number of ordinary
shares outstanding during the period:
(a) Basic earnings per share
Profit from continuing operations attributable to the ordinary equity of
the company
(b) Diluted earnings per share
Profit from continuing operations attributable to the ordinary
equity and potential ordinary equity of the company
(c) weighted average number of shares used as the denominator
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
Adjustments for calculation of diluted earnings per share:
Options:
Weighted average number of ordinary shares and potential ordinary
shares used as the denominator in calculating diluted earnings per share
CONsOlIDaTED
2008
2007
19.06 cents 15.89 cents
18.56 cents 15.21 cents
CONsOlIDaTED
2008
NuMBER
2007
NuMBER
32,897,744 33,408,937
873,825
1,506,796
33,771,569 34,915,733
(d) Reconciliation of earnings used in calculating basic and diluted earnings per share
Net profit and earnings used calculating basic and diluted earnings per share
CONsOlIDaTED
2008
$’000
6,269
2007
$’000
5,309
(e) Information concerning the classification of securities
Options granted to employees under the Fiducian Portfolio Services Limited Employee Share Option Plan (ESOP) and Adviser
Share Option Plan (ASOP) are considered to be potential ordinary shares and have been included in the determination of
diluted earnings per share to the extent that they are dilutive. The options have not been included in the determination of
basic earnings per share. Details relating to the options are set out in Note 25.
f i d u c i a n P o r t f o l i o S e r v i c e S l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 6 9
n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
33 even tS o cc urr ing aft e r ba lan c e da te
Under the Rules of the Adviser Share Option Plan, the Directors are required and expect to grant 31,900 (2007: 32,970)
options to advisers within three months of the announcement of the Group’s results to the Australian Securities Exchange,
at an exercise price of $2.70 (2007: $3.45), being 8% above the volume weighted average trading price of fully paid ordinary
shares sold in the ordinary course of trading during June 2008.
Under the same Rules 63,560 adviser options (2007: nil) are expected to be cancelled subsequent to the end of the financial
year. To the date of this report 25,609 Adviser options have been exercised. The above is subject to any regulatory approvals
if required.
Under the Rules of the Employee and Director Share Option Plan, the Directors have granted 260,000 options at an exercise
price of $2.30 to employees after year end (2007: 150,000 at $2.65) being 8% below the volume weighted average trading
price of fully paid ordinary shares sold in the ordinary course of trading during June 2008, and 15,000 options at an exercise
price of $2.30 to the Managing Director (2007:100,000 at $2.65) subject to shareholder approval. To the date of this
report, 10,625 options have been exercised by employees and no options have been exercised by the Managing Director.
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n o t e S t o t h e f i n a n c i a l S t a t e m e n t S c o n t i n u e d
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
34 financia l r i S k manage ment
The Group’s activities expose it to a variety of financial risks: market risk (including interest rate risk and price risk), credit
risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the financial performance of the Group.
The Group uses different methods to measure different types of risk to which it is exposed. These methods include
sensitivity analysis in the case of interest rate and other price risks, and aging analysis for credit risk.
The Board sets policies which are implemented by management, reviewed monthly for interest rate risk, credit risk and the
investment of excess liquidity.
The Group and parent entity hold the following financial instruments:
CONsOlIDaTED
PaRENT ENTITy
2008
$’000
2007
$’000
2008
$’000
2007
$’000
10,912
10,868
9,831
9,930
3,584
480
3,638
492
3,867
480
3,576
480
14,976
14,998
14,178
13,986
2,258
2,623
2,024
2,341
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial assets at fair value through profit or loss
Financial liabilities
Trade and other payables
(a) Market risk
(i) Foreign exchange risk
The Group operates only in Australia and is not exposed to foreign exchange risk.
(ii) Price risk
The Group and parent entity are exposed to equity securities and other investment price risk. This arises from (a)
unlisted investments held by the Group and classified on the balance sheet at fair value through profit or loss and (b)
from the derivation of fees for the management of investment and superannuation funds.
To minimise its price risk the Group and parent entity offer a range of investment funds in a variety of domestic and
international equities, property and fixed interest securities, and across a number of investment managers. Exposure
to these funds is driven by clients and their financial advisers, and is not managed by the Group. Not all of the funds
are publicly traded or invest in publicy traded securities. Sensitivity analysis is therefore based on the assumption that all
funds under advice, administration and management had increased or decreased by 10% (2007 – 10%) against actual
market movements, with all other variables held constant other than commission that is paid out of such income.
f i d u c i a n P o r t f o l i o S e r v i c e S l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 7 1
n o t e s t o t h e F i n a n c i a l s t a t e m e n t s c o n t i n u e d
F o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
34 Financi al r isk manage m en t c o n tin ue d
(a) market risk (continued)
(ii) Price risk (continued)
Overall market movement on management fees
impact on post-tax profit
impact on equity
2008
$’000
2,023
2007
$’000
1,810
2008
$’000
2,023
2007
$’000
1,810
The price risk for the unlisted securities directly held is immaterial in terms of the possible impact on profit or loss or
total equity. It has therefore not been included in the sensitivity analysis.
(iii) Interest rate risk
The Group’s main interest rate risk arises from deposits in Australian Dollars, and short term loans to staff and
advisers. The group has no borrowings.
30 june 2008
30 june 2007
Weighted average
interest rate
%
Cash at bank and on deposit
Bank bills of exchange
Staff & adviser loans
6.0%
7.9%
9.6%
Balance
$’000
2,924
7,988
832
11,744
Weighted average
interest rate
%
5.2%
6.4%
8.3%
Balance
$’000
2,460
8,408
655
11,523
Bank bills of exchange mature in less than 30 days and staff and adviser loans have terms extending between 2 and
3 years, and may be repayable sooner in certain circumstances.
The Group’s main interest rate risk arises from cash and cash equivalents with variable interest rates. At 30 June
2008 if interest rates had changed by +/- 80 basis points from the year end rates with all other variables held
constant, post-tax profit would have been $66,000 higher or lower (2007 : $65,000).
P a g e 7 2
a n n u a l r e P o r t 2 0 0 8
n o t e s t o t h e F i n a n c i a l s t a t e m e n t s c o n t i n u e d
F o r t h e y e a r e n d e d 3 0 j u n e 2 0 0 8
34 Financial r is k man ag e m ent c o n tin ue d
(b) credit risk
The Group and parent entity have negligible credit risk from receivables, as management fee and commission income is
received within one month of it falling due, and commissions are only paid following the receipt of this income.
The credit quality of other financial assets can be assessed against external credit ratings as follows:
Cash and cash equivalents
AA
BBB+
Investment in related trust
Unrated
consolidated
parent entity
2008
$’000
2,924
7,988
2007
$’000
2,460
8,408
2008
$’000
1,843
7,988
2007
$’000
1,522
8,408
10,912
10,868
9,831
9,930
480
492
480
492
The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets as summarised
on page 71.
(c) liquidity risk
The Group and parent entity maintain sufficient liquid reserves to meet all foreseeable working capital, investment and
regulatory licensing requirements. The group has no undrawn credit or other borrowing facilities in place.
(d) fair value estimation
The fair value of financial assets and liabilities must be estimated for recognition and measurement, or for disclosure purposes.
The carrying value less impairment provision for receivables and payables are assumed to approximate their fair values due to their
short term nature. The carrying value of financial assets at fair value through profit or loss is assumed to approximate its fair value
since it is revalued daily against the fund’s net asset value. The carrying value of bank bills of exchange are assumed to
approximate their fair values as they are discounted at current earnings rates from the face value payable at maturity.
F i d u c i a n P o r t F o l i o s e r v i c e s l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 7 3
d i r e c t o r S ’ d e c l a r a t i o n
In the directors’ opinion:
(a)
the financial statements and notes set out on pages 30 to 73 are in accordance with the Corporations Act 2001,
including
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
(ii) giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2008 and of
their performance for the financial year ended on that date; and
(b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable; and
The directors have been given the declarations by the chief executive officer and chief financial officer required by section
295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
I Singh
Director
Sydney, 27 August 2008
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a n n u a l r e P o r t 2 0 0 8
i n d e P e n d e n t a u d i t r e P o r t
t o t h e S e c u r i t y h o l d e r S
Independant auditor’s report to the security holders of
Fiducian Portfolio services limited
PricewaterhouseCoopers
ABN 52 780 433 757
Darling Park Tower 2
201 Sussex Street
GPO BOX 2650
SYDNEY NSW 1171
DX 77 Sydney
Australia
www.pwc.com/au
Telephone +61 2 8266 0000
Facsimile +61 2 8266 9999
Report on the financial report
We have audited the accompanying financial report of Fiducian Portfolio Services Limited (the company), which comprises the
balance sheet as at 30 June 2008, and the income statement, statement of changes in equity and cash flow statement for the
year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration
for both Fiducian Portfolio Services Limited and Fiducian Portfolio Services Group (the consolidated entity). The consolidated
entity comprises both Fiducian Portfolio Services Limited and the entities it controlled at the year’s end or from time to time
during the financial year.
Directors’ responsibility for the financial report
The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance
with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001.
This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of
the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate
accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1, the directors also
state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with the
Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial
statements and notes, complies with International Financial Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance
with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements
relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is
free from material misstatement.
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 the 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 and fair presentation of the financial report 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. 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.
Our procedures include reading the other information in the Annual Report to determine whether it contains any material
inconsistencies with the financial report.
For further explanation of an audit, visit our website http://www.pwc.com/au/financialstatementaudit.
Our audit did not involve an analysis of the prudence of business decisions made by directors or management.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
f i d u c i a n P o r t f o l i o S e r v i c e S l i m i t e d a c n 0 7 3 8 4 5 9 3 1
P a g e 7 5
i n d e P e n d e n t a u d i t r e P o r t t o t h e S e c u r i t y h o l d e r S
c o n t i n u e d
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
Auditor’s opinion
In our opinion:
(a)
the financial report of Fiducian Portfolio Services Limited and Fiducian Portfolio Services Group is in accordance with
the Corporations Act 2001, including:
(i) giving a true and fair view of the company and consolidated entity’s financial position as at 30 June 2008 and of
their performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations 2001; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in page 13 of the directors’ report and Note 24 in the financial report
for the year ended 30 June 2008. 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.
Auditor’s opinion
In our opinion, the Remuneration Report of Fiducian Portfolio Services Limited for the year ended 30 June 2008, complies
with section 300A of the Corporations Act 2001.
Matters relating to the electronic presentation of the audited financial report
This auditor’s report relates to the financial report and remuneration report of Fiducian Portfolio Services Limited for the
year ended 30 June 2008 included on Fiducian Portfolio Services Limited web site. The consolidated entity’s directors
are responsible for the integrity of the Fiducian Portfolio Services Limited’s web site. We have not been engaged to
report on the integrity of this web site. The auditor’s report refers only to the financial report and remuneration report
named above. It does not provide an opinion on any other information which may have been hyperlinked to/from these
statements or the remuneration report. If users of this report are concerned with the inherent risks arising from electronic
data communications they are advised to refer to the hard copy of the audited financial report and remuneration report to
confirm the information included in the audited financial report and remuneration report presented on this web site.
PricewaterhouseCoopers
D A Prothero
Partner
Liability Limited by a scheme approved under Professional Standards Legislation.
Sydney
27 August 2008
P a g e 7 6
a n n u a l r e P o r t 2 0 0 8
Fiducian PortFolio ServiceS limited
level 4, 1 York Street, Sydney nSW 2000 australia
GPo Box 4175, Sydney nSW 2001 australia
telephone: +61 (2) 8298 4600 Fax: + 61 (2) 8298 4611
www. fiducian.com.au