annual
rePort
3o june 2oo9
Fiducian PortFolio ServiceS limited
aBn 13 o 73 845 931
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 symbolises 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.
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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 m e m b e r s
2
8
9
2 2
2 3
3 0
3 3
3 4
3 5
3 6
3 7
3 8
7 6
7 7
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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, 2009.
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Financial inFormation
Results for 2008-2009
in spite of the difficult conditions globally, fiducian can report a net consolidated profit after income tax of
$3.3 million. this is a decrease of 48% on the prior year of $6.3 million. the consequential earnings before
interest expense, tax, depreciation and amortisation was $5.0 million compared with $9.3 million last year.
net margin income declined by 21.2% (2008: increase 10.8%), predominantly as a consequence of share and
property market devaluations. as with most financial services companies, fiducian could not escape the impact
of the global financial crisis. financial market volatility deters individuals and mums and dads from investing.
these are the very people who could benefit most from the advice of our financial planners when they become
our client. our revenue is affected when the investments which we manage and advise upon fall in value as
they did until march 2009. further revenue growth is truncated if the flow of funds from new clients does not
occur. this was the scenario that played out during most of the 2008-09 financial year.
fiducian has been built to withstand external pressures and has significant capacity for further growth in
revenue without a comparable or corresponding increase in costs. operating expenses were contained and
essentially flat with an increase of only 1.4% (2008: 6%). in particular, we remained focussed on servicing
client concerns in difficult market conditions, building stronger client-adviser relationships through seminars
and marketing collateral and there was an increased emphasis on adviser training and development. employee
benefits expense was down by 4.8%. staff, who had left to follow other careers, were not replaced and their
workload was absorbed by their colleagues, who had been cross-trained in various roles. fiducian believes that
its employees are its strength and its endeavour is to absorb all employees into what is commonly referred to
as the ‘fiducian family’ culture.
fiducian therefore follows a policy of training, building, and particularly retaining, quality staff in good and
poor economic times, so they can participate in the future expansion of the business.
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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
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, particularly in an improving economic and financial market environment. as a result, a fully
franked final dividend of 3.0 cents per share has been declared which will bring the total fully franked dividend
declared for the 2009 financial year to 6.75 cents (2008: 13 cents). the final dividend will be paid on issued
shares held on 7 september 2009 and be payable on 17 september 2009.
Cash Flow
net cash flows of $3.2 million were achieved from operating activities (2008: $6.00 million). there was a
reduction as a consequence of large tax payments made for the prior year in the first quarter of this financial
year. after capital items, business development loans to franchisees ($1.82 million), share buy backs and
dividend outlays, net cash decreased by $3.1 million (2008: increase $0.04million). cash at year end was
$7.8 million, of which $5.0 million is required for regulatory purposes.
business development loans have been made to long serving franchised financial planners to support their
acquisition of client bases. these create stability within the distribution network and allow our advisers to build
their businesses under our supervision, in a controlled and financially stable manner.
a key feature of the company is that it remains debt free and exhibits a positive working capital and cash
flow position.
On Market Buy Back
fiducian bought 428,550 shares on market during the year ( 2008: 635,359 ) for a total consideration,
including brokerage, of $0.87 million (2008: $1.73 million) at an average price per share of $2.03 (2007:
$2.72). there are 32.394 million shares on issue at year end (2008: 32.762 million).
Acquisitions
fiducian avoided making acquisitions of financial planning businesses when price multiples being paid by
competitors over the last few years were very high. we regarded the prices being paid as excessive.
instead, this financial year we acquired three portfolios and obtained the services of one financial planner
through one acquisition and four advisers through another acquisition. all advisers have settled into providing
high quality financial planning advice and are a good cultural fit with fiducian.
these acquisitions, which cost about $576,000 are payable over two year periods and should generate income
of over $400,000 annually and help grow fiducian. acquisitions such as these which can be easily absorbed
into the fiducian culture will continue to be assessed as and when available.
Adviser, Staff and Director options
in accordance with the terms and conditions of the approved adviser share option plan, 49,988 options will
be cancelled this year.
no options are proposed to be issued and none have been issued on the basis of 2008-09 performance to
financial advisers, employees or the managing director.
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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
Financial Planning
The Network
the fiducian financial services brand is continuing to grow into a quality national network of franchised
and salaried financial advisers. good strategic financial advice and a high frequency of client contact and
communication by all fiducian financial planners has resulted in impressive client retention levels. the service
provided by our financial planners, in difficult market conditions, has earned them much respect and this
should help them to obtain additional investments and new client referrals as financial markets stabilize.
practice development managers based in sydney, melbourne and brisbane continue to work hard to support
and grow the adviser network throughout australia.
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 28% of total inflows (2007: 29%).
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
1 franchisee and the appointment of 4 others during the year. there are 31 franchised offices at year-end
(2008:28). inflows from franchisees comprised 60% of total inflows (2008:41%)
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. badge product inflows comprised 3% of inflows, but have been
building up steadily. work commenced last year on development of a new ‘on line’ reporting system to
provide daily reports to investors on their asset valuations, fees and charges.
Funds under Administration
funds under administration fell in total by 21.4% to $984 million (2008: decline 6.6% to $1,195m) predominantly
due to a continuing fall in the market valuation of investment funds from late 2007 until march 2009.
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 remained steady at 16% of total funds under administration.
Corporate Superannuation
corporate superannuation remained at about the same level as the previous year and forms only a small
portion of funds under administration. fiducian has focussed on the small employer market so all employees
using our superannuation fund can receive the appropriate services of a financial planner. we view it as a
useful compliment to our core personal superannuation and investment service offerings.
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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. we design funds that seek to deliver above average
returns over the short to medium term, which by consistent averaging, tend to deliver superior returns,
compared with 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.
the investment team and investment committee remain confident that the fiducian philosophy of liquidity and
transparency will also benefit investors. a new fund, the ultra growth fund, was launched during the year.
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 financial planners, a number of
small wholesale mandates by notable charities, endowment funds and some high net worth individuals.
inFormation technologY
the fiducian information technology (it) team continues to provide our adviser network with proprietary state-
of-the-art financial planning software (force). this technology gives fiducian advisers further advantages in
the market place and should help attract other quality financial planners to fiducian.
a new generation force system was launched during the year, which provides enhanced modelling capability,
client relationship management tools and an ability to monitor compliance of all our representatives’ financial plans.
human reSourceS
Management and Staff
the fiducian management team is focused on building a successful company. the effective reporting processes
enhance board oversight of business activity and performance on a monthly basis. Key performance indicators
have been identified for management in each area of business 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 fulfil 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
to issues that may need attention.
Board of Directors
the company’s five year strategic plan has been reviewed by management at the request of the board, in
conjunction with the preparation of the annual business plan and budget for the 2009-10 year. management
remains committed to achieving the goals and objectives set down in these plans.
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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 2008-09 financial year, the australian and international share markets share market indices continued
to decline through to march 2009, but have since regained some lost value. over the year our share market
was down 23%, international markets were down 16% and listed property trusts were down by about 45%.
over the last three months of the year we experienced a recovery in asset values and stronger revenues.
our house view is for firmer share markets through the coming year. this could occur in fits and starts, but
we are currently optimistic about positive returns from them and consequently in continued improvements for
our clients and to our corporate financial position. as always, we recommend that investors should consult a
fiducian financial planner to develop an investment strategy; that could help them achieve their financial goals.
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.
through the financial planning association, fiducian made its contribution to the joint parliamentary commission
on industry remuneration policy. there are suggestions being made to ban payment of commissions and even
asset-based charges. the final outcome is yet unknown. however, fiducian has always insisted fees be fully
disclosed and charged for services provided. since our products were launched in march 1997, fees have always
been segregated item by item to show fees paid to the platform operator, fees to the fund manager and fees
to the financial planner/dealer. all our clients are expected to receive continuous advice and agree to their adviser’s
remuneration in writing. as well, all our product disclosure documents specify that adviser fees are negotiable
between client and adviser. in our view, we believe that we have been operating in a transparent and ethical
manner since our inception, in instances ahead of the times. if the regulators impose a new remuneration
policy upon our industry, we should be able to adapt quickly without financial damage to our company.
the business plan for 2010 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. our new business pillar, fiducian business services has bedded down the it systems designed
and developed internally. it is now expanding its resourcing services to the accounting community.
the cash management strategy for the next financial year is to utilize the growing profitability to improve the
level of dividends being paid to shareholders. surplus cash will be also used to make meaningful acquisitions,
where possible, or be used to make further share buy backs.
we would like to thank all participants for their individual contributions to the growth and success of fiducian.
yours faithfully,
robert bucknell
Chairman
14 september 2009
indy singh
Managing Director
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c o r p o r a t e d i r e c t o r y
directors
sha re reg ister
r bucknell fca
Chairman
i singh cfp, btech, mcomm (bus), asia, asfa, dip. fp
Managing Director
a Koroknay ba, llb(hons), llm(hons)
f Khouri b bus, fcpa, ftia
secretary
i singh cfp, btech, mcomm (bus), asia, asfa, dip. fp
notice of annual
genera l me e t ing
the annual general meeting of
fiducian portfolio services limited
Will be held at level 4, 1 york street, sydney
Time
Date
10:00am wednesday
28 october 2009
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
anZ banking group
388 collins street
melbourne vic 3000
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 address
www.fiducian.com.au
pri ncipal re g is te r e d
offi ce in aus tr al ia
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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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 2009.
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 (b) on page 11 of the directors’ report.
r bucknell
i singh
a Koroknay
f Khouri
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 2008 of 6.5 cents
(2007: fully franked 6.0 cents) per share paid on 17 september 2008.
interim ordinary fully franked dividend for the year ended 30 june 2009 of 3.75 cents
(2008: fully franked 6.5 cents) per share paid on 16 march 2009.
total dividends in respect of the year
2009
$’000
2008
$’000
2,115
1,994
1,215
3,330
2,133
4,127
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 2009 of 3.0 cents per ordinary share held at 7 september 2009 and
payable on 17 september 2009.
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
2009
$’000
19,399
7,188
(4,565)
22,022
2008
$’000
26,054
8,222
(5,680)
28,596
profit from ordinary activities before income tax expense
income tax expense
net profit attributable to members of fiducian portfolio services limited
2009
$’000
4,620
181
-
4,801
1,517
3,284
2008
$’000
8,707
280
-
8,987
2,718
6,269
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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 3.0 cents per share.
the share price has declined in common with the asX index, and generally in common with other comparative companies
in the financial services sector.
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 $870,554 (inclusive of brokerage) as a result of the buy back of 428,550 shares on
the stock exchange at an average price of $2.03 per share during the year, and an increase of $41,164 as a result of the
exercise of 60,302 share options at an average price of $0.68 per share.
further, 15,000 options were issued to the managing director, 260,000 options were issued to staff and 31,900 options
were issued to advisers during the year, whilst 96,629 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 to grant options to advisers within three
months of the announcement of the group’s results to the australian securities exchange. no options are being issued this
year (2008: 31,900 at an exercise price of $2.70).
under the same rules 49,988 adviser options (2008: 63,560) are expected to be cancelled subsequent to the end of the
financial year, subject to any regulatory approvals if required.
the directors have not granted any options to employees after year end (2008: 260,000 at $2.30). similarly no options
have been granted to the managing director (2008: 15,000 options at $2.30). to the date of this report no employee
options have lapsed 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 24th august 2009
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
22 february 2005
23 august 2005
employees
employees
adviser
$0.55
$0.73
$0.87
27,000
1,000
13,200
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.
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.
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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
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 d iscl osu r es
(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 Bucknell FCA. chairman – non executive. age 68
Experience and expertise
chairman since inception in 1996. extensive experience in accounting and business management over the past 45 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 60
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 20 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.
Interest in shares and options
9,676,380 ordinary shares in fiducian portfolio services limited.
215,000 options for ordinary shares in fiducian portfolio services limited.
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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
key ma nag e ment pe r so nnel d is cl osur es c o n tin ue d
(b) Information on director (continued)
A Koroknay BA, LLB(hons), LLM(hons). independent non-executive director. age 60
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 and internal compliance committees.
Interest in shares and options
none
F Khouri B Bus, FCPA, FTIA. independent non-executive director. age 54
Experience and expertise
appointed to the board 6 july 2007. public accountant registered company auditor 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.
Interest in shares and options
134,373 ordinary shares in fiducian portfolio services limited.
10,682 options for ordinary shares in fiducian portfolio services limited.
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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
key ma nag e ment pe r so nnel d is cl osur es c o nt in ue d
(c) Company secretary
the company secretary is mr i singh cfp, b tech, 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 2009, and the numbers of meetings attended by each director were:
FuLL MeeTINgS OF DIReCTORS
MeeTINgS OF COMMITTeeS
Corporate Trustee*
A
B A
13 13
13 13
13 13
4
4
4
B
4
4
4
Audit
Internal
Invest-
Compliance ment
Remun-
ration
A
5
5
B
5
5
*** ***
A
3
3
3
B
3
3
3
A
B
A B
*** ***
1
1
11 11
*** ***
*** ***
1
13 13
4
4
5
5
*** *** *** ***
*** ***
r bucknell
i singh**
a Koroknay
1
f Khouri
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 8 of the 8 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.
(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 2008.
(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.
a n n u a l r e p o r t 2 0 0 9 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 3
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 ma nag e ment pe r so nnel d is cl osur 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 achievement of strategic objectives and
the creation of value for shareholders, and conforms with the market 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 2008. 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 2014
• 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 july, 2009.
a n n u a l r e p o r t 2 0 0 9 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 4
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 ma nag e ment pe r so nnel d is cl osur es c o nt in ue d
(f) Remuneration report (continued)
Base salary
mr singh receives a base pay that comprises the fixed component of pay and the potential for 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 $0.65 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. as in previous years mr singh has declined to
accept any entitlement that may be due for the financial year.
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. there are no option entitlements this
financial year.
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
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
• F Khouri – Non-executive Director
I Singh – Managing Director & Company Secretary
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.
a n n u a l r e p o r t 2 0 0 9 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 d iscl osu r es c o nt in ue d
(f) Remuneration report (continued)
Key management personnel of Fiducian Portfolio Services Limited and the Group
2009
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 bucknell (b)
(Chairman)
a Koroknay (c)
f Khouri (d)(e)
Executive director
i singh (f)
totals
135,900
38,688
37,564
437,926
650,078
-
-
-
-
-
-
-
-
-
-
-
2,890
3,461
13,752
20,103
-
-
-
-
-
-
135,900
-
-
41,578
41,025
1,635
453,313
1,635
671,816
(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 $207,443 for financial planning paid to companies in which the director has an interest.
(e) adviser options were also issued to a company, in which mr Khouri is a shareholder and director in his capacity as a
financial adviser, and are not included above.
(f) 15,000 options were issued to mr singh in respect of the 2008 financial year, after shareholder approval at the
agm in october 2008. consequently $1,635, being the calculated fair value of those options, has been included in
his remuneration. no options are proposed to be issued to mr singh in respect of the 2009 year.
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 bucknell (b)
(Chairman)
a Koroknay (c)
f Khouri (d)(e)
p leeson (d)
Executive director
i singh (f)
totals
146,100
40,752
35,996
11,667
436,001
670,516
-
-
-
-
-
-
-
-
-
-
-
-
-
2,889
2,889
-
13,999
19,777
-
-
-
-
-
-
-
146,100
-
43,641
-
-
38,885
11,667
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 a companies in which the directors have an interest.
(e) adviser options were also issued to a company, in which mr Khouri is a shareholder and director, in his capacity as a
financial adviser, and are not included above.
(f) 100,000 options were issued to mr singh in respect of the 2008 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.
a n n u a l r e p o r t 2 0 0 9 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 6
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 ma nag e ment pe r so nnel d is cl osur es c o nt in ue d
(f) Remuneration report (continued)
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 over 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 26.
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.
2009
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**
200,000
-
-
-
15,000
-
-
-
215,000
200,000
-
-
** 10,682 Adviser options are held by an entity in which F Khouri has an interest.
2008
NAMe
i singh
f Khouri*
BALANCe AT
The START OF
The yeAR
100,000
-
gRANTeD DuRINg
The yeAR AS
ReMuNeRATION
exeRCISeD
LAPSeD DuRINg
The yeAR
BALANCe AT
The eND OF
The yeAR
veSTeD AND
exeRCISABLe
-
-
100,000
-
-
-
200,000
200,000
-
-
* 7,182 Adviser options are held by an entity in which F Khouri has an interest.
Note: The assessed fair value at grant date of options granted to the individuals is detailed in Note 26.
a n n u a l r e p o r t 2 0 0 9 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
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 d iscl osu r es c o nt in ue d
(f) Remuneration report (continued)
D. Share-based compensation (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.
2009
NAMe
i singh
r bucknell
a Koroknay
f Khouri
2008
NAMe
i singh
r bucknell
a Koroknay
f Khouri
BALANCe AT The
START OF The yeAR
ReCeIveD DuRINg
The yeAR ON The
exeRCISe OF
ADvISeR OPTIONS
OTheR ChANgeS
DuRINg The yeAR
BALANCe AT The eND
OF The yeAR
9,599,307
1,050,000
-
107,373
BALANCe AT The
START OF The yeAR
9,486,500
1,050,000
-
-
-
-
-
-
77,073
19,000
-
27,000
9,676,380
1,069,000
-
134,373
ReCeIveD DuRINg
The yeAR ON The
exeRCISe OF
ADvISeR OPTIONS
-
-
-
107,373
OTheR ChANgeS
DuRINg The yeAR
BALANCe AT The eND
OF The yeAR
112,807
-
-
-
9,599,307
1,050,000
-
107,373
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 (2008: nil).
entities with which a director has an interest exercised no adviser options during the year (2008: 107,373 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. increases in base salary have been minimal to nil over the past
2 years in these tougher economic times. cash bonuses and entitlements have not been granted or paid and grants
of options entitlements have been only in accordance with the incentive programs being 15,000 for 2008 and nil in
relation to the past financial year.
Details of remuneration: cash bonuses and options
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 $2.50 for the options that vest in the 2010 financial year.
a n n u a l r e p o r t 2 0 0 9 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 8
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 d iscl osu r es c o nt in ue d
(f) Remuneration report (continued)
CASh BONuS
OPTIONS
NAMe
i singh
PAID
%
0%
0%
0%
FORFeITeD
%
100%
100%
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
$
$
2009
2008
2007
0%
100%
100%
0%
0%
0%
29/10/2009
1,635
3,000
30/10/2008
26/10/2007
-
-
-
-
Share-based compensation: Performance based Options
further details relating to options are set out below.
2009
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
$
0.36%
1,635
-
-
1,635
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.
2008
NAMe
i singh
A
ReMuNeRATION
CONSISTINg OF
OPTIONS (%)
B
vALue AT
gRANT DATe
$
C
vALue AT
exeRCISe DATe
$
14.40%
75,447
-
D
vALue AT
LAPSe DATe
$
-
e
TOTAL OF
COLuMNS B-D
$
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.
(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 (2008: 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.
a n n u a l r e p o r t 2 0 0 9 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 d iscl osu r es c o nt in ue d
(i) Other transactions with key management personnel (continued)
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 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
2009
$
2008
$
218,503
240,293
-
9,858
207,443
590,141
425,946
840,292
unissued ordinary shares of fiducian portfolio services limited under option at the date of this report are disclosed in note
26 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 2009 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 26 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 a 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.
the officers of the company covered by the insurance policy include the directors: r bucknell, i singh, 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.
a n n u a l r e p o r t 2 0 0 9 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 0
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 d iscl osu r es c o nt in ue d
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 may decide to employ 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 27.
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 27 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,
26 august 2009
a n n u a l r e p o r t 2 0 0 9 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
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 2009,
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.
darren ross
partner
pricewaterhousecoopers
sydney
27 august 2009
liability limited by a scheme approved under professional standards legislation
a n n u a l r e p o r t 2 0 0 9 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 2
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 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.
a description of the company’s main corporate governance practices is set out below. all these practices, were in place
for the entire year and comply with the august 2007 asX Principles of Good Corporate Governance and Best Practice
Recommendations, except where noted.
Principle 1: Lay solid foundations for management and oversight
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 group in both the short and the 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 to ensure that the group is properly managed.
the responsibilities of the board include:
•
•
•
providing guidance to the development of and approving corporate strategies and policies.
reviewing and approving major capital expenditure initiatives
reviewing and approving business plans, the annual budget and financial plans, including adequacy of resources
available to senior management.
• overseeing and monitoring:
• organisational performance and the achievement of the Group’s strategic goals and objectives.
• compliance with the company’s Code of Conduct (see page 26).
• progress of major capital expenditures and other significant corporate projects, including any acquisitions or
divestments.
• financial performance, including approval of the annual and half-year financial reports and liaison with the
company’s auditors.
• the effectiveness of management processes in place and approving major corporate initiatives.
• the operation of the Group’s system for compliance and risk assessment, management and reporting .
the appointment, performance assessment, remuneration and, if necessary, removal of the Managing Director.
ratifying the appointment and /or removal of members of the senior management team.
ensuring that adequate disaster recovery and business continuity plans are regularly monitored, tested and results reported.
•
•
•
• balancing sometimes competing objectives in the best interests of the group
• enhancing and protecting the reputation of the organisation and all matters relating to shareholders.
day to day management of the group’s affairs and the implementation of the corporate strategies and policy initiatives are
formally delegated by the board to the managing director.
Principle 2: Structure the Board to add value
the board operates in accordance with the broad principles set out in its charter which is also available on the company’s
website at www.fiducian.com.au. the charter details the board’s composition and responsibilities.
Board members
the following persons are directors of fiducian portfolio services limited:
Chairman (non-executive)
executive Managing Director
Non-executive directors
r bucknell
i singh
a Koroknay
f Khouri
details of each director’s experience, expertise and qualifications are set out each year in the directors’ report of the
annual report to shareholders under the heading ‘information on directors’.
a n n u a l r e p o r t 2 0 0 9 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
Principle 2: Structure the Board to add value (continued)
Board composition
the charter includes the requirements that:
• the Board is comprised of both an executive Director and a majority of non-executive directors, with a minimum of four directors.
• the non-executive directors bring independent judgement to the Board’s consideration of strategic, risk and performance
matters.
• the Chairman is an independent non-executive director elected by the Board and meets regularly with the Managing Director.
• all directors exercise independent judgement and review and constructively challenge the performance of management.
• the company maintains a mix of directors on the Board from different backgrounds with complimentary skills and experience.
• the Board undertakes an annual Board performance review and considers the appropriate mix of skills required by the
board to maximise its effectiveness.
• at any point in time, its membership represents an appropriate balance between directors with experience and
knowledge of the group and directors with an external or fresh perspective.
• the size of the Board is conducive to effective discussion and efficient decision-making.
Chairman and Managing Director
the board charter specifies that these are separate roles to be undertaken by separate people.
• The Chairman is responsible for leading the Board, ensuring that Board activities are organised and efficiently conducted,
directors are properly briefed for meetings.
• The Managing Director is responsible for implementing Group strategies and policies.
Directors’ independence
directors are obliged to be independent in judgement and ensure that all reasonable steps and due care are taken by the
board to arrive at sound decisions.
the board has adopted specific guidelines in relation to directors’ independence. these state that when determining
independence, a director must be a non-executive and:
• not be a substantial shareholder of the company or an officer of, or otherwise associated directly with, a substantial
shareholder of the company.
• not have been employed in an executive capacity by the Group within three years before commencing to serve on the Board.
• not have been, within the last three years, a principal of a material professional adviser or a material consultant to the
group, or an employee materially associated with the service provided.
• not have been a material supplier or customer of the Group, or an officer of or otherwise associated directly or indirectly
with a material supplier or customer.
• not have a material contractual relationship with the Group, other than as a director of Fiducian.
• not have been on the Board for a period which could, or could reasonably be perceived, to materially interfere with the
director’s independent exercise of their judgement.
materiality for these purposes is determined on both quantitative and qualitative bases. with good cause, the board may, at
its discretion, determine that a director is independent, or has lost their independence, notwithstanding that all the above
criteria are or are not satisfied.
the board assesses independence each year. to enable this process, the directors must provide all information that may be
relevant to the assessment. matters that could affect the independence of directors are detailed below:
• Mr Bucknell and Mr Singh have both served on the Board since inception of the Group, being for more than ten years.
both bring a depth of experience and independent judgement to their roles as directors and remain vital to the growth
of the group. mr. bucknell is deemed by the board to be an independent director.
• Mr Koroknay and Mr Khouri both have business dealings with the Group as disclosed in the Annual Report at the end of
each financial year. however, these are not of a value or significance that adversely affect the director’s independence.
they have declared their interests in those dealings with the company and take no part in decisions relating to them.
a n n u a l r e p o r t 2 0 0 9 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 4
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
Principle 2: Structure the Board to add value (continued)
Independent professional advice
directors and members of board committee have the right to obtain independent professional advice at the expense of the
group on matters arising in the course of their board duties and responsibilities, with prior approval of the board.
Term of office
the company’s constitution specifies that all non-executive directors must retire from office no later than the third annual
general meeting following their last election. a retiring director is eligible to stand for re-election.
Induction
the induction provided to new directors enables them to actively participate in board decision-making as soon as
possible. it ensures that they have a full understanding of the company’s financial position, strategies, operations and risk
management policies. it also explains the respective rights, duties, responsibilities and roles of the board.
Performance assessment
the board undertakes an annual self assessment of its collective performance, the performance of the chairman and of its
committees. the assessment also considers the adequacy of induction and continuing education, access to information and
the support provided by the managing director. the results and any action plans are documented together with specific
performance goals which are agreed for the coming year. an assessment carried out in accordance with this process was
undertaken during july, 2009.
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, internal compliance, external compliance and risk, investment and audit committees. they are comprised
of a mix of executive and non-executives directors, and external specialists, the names and qualifications of whom are
detailed in each annual report to shareholders.
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 as required, but at
least every three years. a copy of each charter is available on the company’s website.
minutes of all committee meetings are tabled at the next board meeting where any significant matters are addressed
and resolutions or requests for further information are sent back to the relevant committee. specific reporting by the
committees to the board are addressed in the charter of the individual committees.
Nomination Committee
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 committee, particularly given the size of the
board. there is therefore no nomination committee at present.
Remuneration Committee
the remuneration committee is comprised of the non-executive chairman and one other non-executive director. the
committee evaluates the managing director’s performance, determines bonus’s payable to him and establishes the salary
package appropriate for each year. external advice is obtained when deemed appropriate, but at least at three yearly intervals.
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 and Risk 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.
a n n u a l r e p o r t 2 0 0 9 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
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
Principle 2: Structure the Board to add value (continued)
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 and is further discussed under principle 4.
Investment committee
the investment committee is comprised of two independent members, the managing director and senior staff that form
the investment management team. the committee monitors that procedures are fully carried out by the investment
management team, in accordance with the investment guidelines set by the board.
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; but 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.
Commitment
the chairman is expected to spend at least 45 days per year preparing for and attending board meetings and meeting with
the managing director. other non-executive directors are expected to spend at least 20 days per year preparing for and
attending board meetings.
all non-executive directors are expected to allow sufficient additional time to attend committee meetings and associated activities.
prior to appointment or being submitted for re-election, each non-executive director is required to specifically acknowledge
that they have and will continue to have the time available to undertake relevant educational development and discharge
their responsibilities to the board and any of its committees, of which they are a member.
the number of board and committee meetings attended by each director during each financial year is disclosed in the
directors’ report of each annual report of the group.
the executive director has no appointments as a director outside the group, other than to his own family companies.
Principle 3: Promote ethical and responsible decision making
Code of conduct
the directors and management actively promote ethical and responsible decision making in line with the group’s 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.
the company has developed a code of conduct (the code) which has been fully endorsed by the board and applies to
all directors and employees. the code is regularly reviewed and updated, as necessary, to ensure it reflects the highest
standards of behaviour, professionalism and practices necessary to maintain confidence in the group’s integrity and to take
into account legal obligations and reasonable expectations of the company’s stakeholders.
in summary, the code requires that at all times all company personnel act with the utmost integrity, objectivity and in
compliance with the letter and the spirit of the law and company policies. a copy of the code of conduct is available on
the company’s website.
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.
a n n u a l r e p o r t 2 0 0 9 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 6
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
Principle 3: Promote ethical and responsible decision making (continued)
the code requires employees who are aware of unethical practices within the group or breaches of the company’s trading
policy to report these using the company’s whistleblower program. this can be done anonymously.
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.
Principle 4: Safeguard integrity in financial reporting
Audit committee
the audit committee consists of the following directors:
r bucknell (chairman)
i singh
f Khouri
all members of the audit committee are financially literate and have the appropriate understanding of the industry in
which the group operates. the chairman, mr r bucknell, has relevant qualifications and experience by virtue of being a
former partner in a major accounting firm and mr f Khouri is a partner in a public accounting practice and a registered
company auditor.
the audit committee operates in accordance with a charter which is available on the company’s website.
the main responsibilities of the audit committee are to:
• review, assess and approve the annual and half-year financial reports and all other financial information published by the
company or released to the market.
• assist the Board in reviewing the effectiveness of the organisation’s internal financial controls covering:
• effectiveness and efficiency of operations.
• reliability of financial reporting, including important judgements and accounting estimates.
• compliance with applicable laws and regulations
• areas of financial risk
• security of computer systems and applications
• fraud and theft
• recommend to the Board the appointment, removal and remuneration of the external auditors, and review the terms of
their engagement, the scope and quality of the audit and assess performance.
• consider the independence and competence of the external auditor on an ongoing basis.
• review and approve the level of non-audit services provided by the external auditors and ensure that it does not
adversely impact on auditor independence.
• review and monitor related party transactions and assess their propriety.
• report to the Board on matters relevant to the committee’s role and responsibilities.
in fulfilling its responsibilities, the audit committee
• receives regular reports from management and the external auditor.
• meets with the external auditor at least twice a year, or more frequently if necessary.
• reviews the processes the Managing Director and senior managers have in place to support their certifications to the Board
• reviews any significant disagreements between the auditors and management, irrespective of whether they have been resolved.
• has the right of access to the external auditors at any time
• provides the external auditor with a clear line of direct communication, at any time, to the Chairman.
the audit committee has authority, within the scope of its responsibilities, to seek any information it requires from any
employee or external party.
a n n u a l r e p o r t 2 0 0 9 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
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
Principle 4: Safeguard integrity in financial reporting (continued)
External auditors
the company and audit committee policy is to appoint external auditors who clearly demonstrate quality and independence.
the performance of the external auditor is reviewed annually and applications for tender of external audit services are
requested as deemed appropriate, taking into consideration assessment of performance, existing value and tender costs.
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. a new audit engagement partner has
been introduced in the current financial year ended 30 june 2009.
an analysis of fees paid to the external auditors, including a break-down of fees for non-audit services, is provided in the
directors’ report and in each annual report to shareholders. it is the policy of the external auditors to provide an annual
declaration of their independence to the audit committee.
the external auditor normally attends the annual general meeting to be available to answer shareholder questions about
the conduct of the audit and the preparation and content of the financial report and audit thereof.
Principles 5 and 6: Make timely and balanced disclosures and respect the rights of Shareholders
Continuous disclosure and shareholder communication
the company has written policies and procedures on information disclosure that focus on continuous disclosure of any
information concerning the group that a reasonable person would expect to have a material effect on the price of the
company’s shares. in addition, the company releases quarterly cash flow reports to the asX.
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 such presentations 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 who is assisted by the group’s general counsel and the cfo.
fiducian will commence to provide electronic reports and other communication to shareholders, who provide their email
address. hard copies will be sent to other shareholders.
all shareholders receive a copy of the company’s annual and half-yearly reports. in addition, the company provides
opportunities for shareholders to participate through electronic means with company announcements, media briefings,
details of company meetings, press releases for the last three years and financial reports for the last five years, which are
all available on the asX’s website.
Principle 7: Recognise and manage risk
the board, through the audit, compliance and internal risk committees, is responsible for ensuring that there are adequate
policies in relation to risk management, compliance and internal control systems. in summary, the company policies are
designed to ensure strategic, operational, legal, reputational and financial risks are identified, assessed effectively and
efficiently managed and monitored to achieve the group’s objectives.
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. 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 and risk committee, which then reports to the board.
a n n u a l r e p o r t 2 0 0 9 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 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
Principle 7: Recognise and manage risk (continued)
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 Kpis 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 and any necessary mitigation strategies.
The environment, health and safety management systems
the company recognises the importance of environmental and occupational health and safety (oh&s) issues and is
committed to high levels of performance, whilst recognising that the group’s operations expose it to little safety risk or
environmental hazards.
Corporate reporting
the managing director and financial controller have made the following signed certifications to the board
• 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 company and group and are in accordance with relevant accounting
standards; and
• that the above statement is founded on a sound system of risk management and internal compliance and control which
implements the policies adopted by the board, and that the company’s risk management and internal compliance and
control is operating efficiently and effectively in all material respects in relation to financial reporting risks.
Principle 8: Remunerate fairly and responsibly.
Remuneration committee
the remuneration committee consists of the following non-executive directors (both of whom are independent):
r bucknell (chairman)
a Koroknay
the managing director has signed a formal employment contract at the time of his appointment covering a range of
matters including his duties, rights, responsibilities and any entitlements on termination. further information on the
managing director’s remuneration, including principles used to determine remuneration, is set out in the directors’ report
under the heading ‘remuneration report’ in each annual report issued by the company. in accordance with group policy,
the managing director is not permitted to enter into any transactions that would limit the economic risk of options or other
unvested entitlements.
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, taking this documented evaluation into account, and
the assessment by external consultants at least every three years, when considering the managing director’s remuneration
package, to ensure that it is reasonable and competitive.
the remuneration committee advises the board on remuneration and incentive policies and practices generally, and makes
specific recommendations on remuneration packages and other terms of employment for the managing director.
the board assumes responsibility for overseeing management succession planning, including the implementation of
appropriate executive development programmes and ensuring adequate arrangements are in place, so that an appropriate
candidate can be recruited for later promotion to the managing director’s position.
the managing director is responsible for the remuneration of all other senior managers and staff.
a n n u a l r e p o r t 2 0 0 9 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
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 2009:
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 holders
OPTIONS
ORDINARy ShAReS
2
21
9
15
4
1
52
92
343
99
91
16
28
669
there were 13 holders of a less than marketable parcel of ordinary shares.
B. equi ty se cur i t y ho ld e r s
Twenty largest quoted equity security holders.
the names of the twenty largest registered shareholders of quoted equity securities as at 11 august 2009 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
national nominees limited
hsbc custody nominees (australia) limited
anZ nominees limited
jp morgan nominees australia limited
hunter place services pty ltd
norcad investments pty ltd
citigroup nominees pty limited (cfs developing cos)
mr inderjit singh
d r smith holdings pty ltd
imperial pacific fund managers pty ltd
mr erich gustav brosell
perpetual trustees consolidated limited
bond street custodians limited
imperial pacific fund managers pty ltd
citigroup nominees pty limited (cwlth small co fund no 2)
citigroup nominees pty limited (cwlth bank officers super a/c)
cogent nominees pty ltd
mr walter frederick holland
mr david colin archibald
8,898,500
3,979,806
2,833,462
2,051,735
1,199,102
1,069,000
977,998
681,358
567,500
550,000
492,402
455,000
391,077
364,536
361,000
358,371
342,029
245,029
218,420
200,000
26,236,325
27.47
12.29
8.75
6.33
3.70
3.30
3.02
2.10
1.75
1.70
1.52
1.40
1.21
1.13
1.11
1.11
1.06
0.76
0.67
0.62
81.00
unquoted equity securities
as at 30 june 2009:
TyPe OF SeCuRITy
options – managing director
options – employees
options – advisers
NuMBeR ON ISSue
NuMBeR OF hOLDeRS
215,000
583,650
210,400
1,009,050
1
34
17
52
a n n u a l r e p o r t 2 0 0 9 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 0
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. suBstanti al shar e ho ld e rs
substantial shareholders and associates as at 11 august 2009 (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
national nominees limited
hsbc custody nominees (australia) limited
anZ nominees limited
9,676,380
3,979,806
2,833,462
2,051,735
29.87%
12.29%
8.75%
6.33%
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.
a n n u a l r e p o r t 2 0 0 9 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
a n n u a l r e p o r t 2 0 0 9 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 2
Financial
rePort
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 o r ’ s r e p o r t t o t h e m e m b e r s
3 4
3 5
3 6
3 7
3 8
7 6
7 7
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 – 21, both of which are not part of this financial report.
the financial report was authorised for issue by the directors on 26 august 2009.
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
a n n u a l r e p o r t 2 0 0 9 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
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 9
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
24
33
2009
$’000
2008
$’000
2009
$’000
2008
$’000
21,422
27,768
18,837
25,282
600
-
(4,978)
(7,956)
(208)
828
-
(6,898)
(8,362)
(326)
562
200
(6,024)
(5,655)
(131)
772
200
(8,109)
(5,820)
(284)
(4,079)
(4,023)
(3,169)
(3,134)
4,801
1,517
8,987
2,718
4,620
1,403
8,907
2,632
3,284
6,269
3,217
6,275
3,284
6,269
3,217
6,275
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
10.09 cents 19.06 cents
9.82 cents
18.56 cents
The above income statements should be read in conjunction with the accompanying notes.
a n n u a l r e p o r t 2 0 0 9 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 4
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 9
NOTeS
CONSOLIDATeD
PAReNT eNTITy
2009
$’000
2008
$’000
2009
$’000
2008
$’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
current tax liabilities
total current liabilities
Non-current liabilities
payables non current
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
7,821
2,292
10,912
2,836
506
480
10,619
14,228
2,342
-
201
704
4,284
7,531
748
-
277
686
3,604
5,315
18,150
19,543
2,191
127
2,318
139
12
553
704
2,258
850
3,108
-
6
474
480
6,428
2,867
506
9,801
2,342
3,875
166
553
412
7,348
17,149
1,679
137
1,816
-
12
424
436
9,831
3,119
480
13,430
748
3,875
227
562
249
5,661
19,091
2,024
896
2,920
-
4
376
380
3,022
15,128
3,588
15,955
2,252
14,897
3,300
15,791
8,160
300
6,668
8,982
259
6,714
8,160
300
6,437
8,982
259
6,550
15,128
15,955
14,897
15,791
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
28
29
The above balance sheets should be read in conjunction with the accompanying notes.
a n n u a l r e p o r t 2 0 0 9 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
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 9
NOTeS
CONSOLIDATeD
PAReNT eNTITy
2009
$’000
2008
$’000
2009
$’000
2008
$’000
Total equity at the beginning
of the financial year
Profit for the year
15,955
15,171
15,791
15,001
3,284
6,269
3,217
6,275
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
22
22
8
23
48
263
48
263
(870)
(1,732)
(870)
(1,732)
(3,330)
(4,127)
(3,330)
(4,127)
41
111
41
111
total transactions with equity holders
(4,111)
(5,485)
(4,111)
(5,485)
Total equity at the end of the financial year
15,128
15,955
14,897
15,791
The above statement of changes in equity should be read in conjunction with the accompanying notes.
a n n u a l r e p o r t 2 0 0 9 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 6
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 9
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
2009
$’000
2008
$’000
2009
$’000
2008
$’000
24,152
30,852
21,316
27,994
(19,297)
(22,334)
(17,300)
(20,054)
4,855
577
(2,252)
8,518
777
(3,292)
4,016
539
(2,145)
7,940
721
(3,037)
32
3,180
6,003
2,410
5,624
(223)
(12)
(223)
(10)
(1,819)
(333)
(1,819)
-
(256)
-
29
168
(11)
-
(13)
-
68
156
(193)
-
-
200
29
168
(9)
(333)
(10)
-
200
68
156
(162)
(2,112)
(327)
(1,654)
(91)
(870)
41
(1,733)
228
(870)
41
(1,733)
228
(3,330)
(4,127)
(3,330)
(4,127)
(4,159)
(5,632)
(4,159)
(5,632)
Net increase/decrease in cash held
(3,091)
44
(3,403)
(99)
cash and cash equivalents at the beginning
of the year
Cash and cash equivalents
at the end of year
10,912
10,868
9,831
9,930
9
7,821
10,912
6,428
9,831
The above cash flow statements should be read in conjunction with the accompanying notes.
a n n u a l r e p o r t 2 0 0 9 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
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 9
1 summary o f s igni fi c ant ac co un ti n g p ol i ci 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, australian
accounting interpretations, other authoritive pronouncements of the australian accounting standards board and the
Corporations Act 2001.
Compliance with IFRS
australian accounting standards include australian equivalents to international financial reporting standards (aifrs).
compliance with aifrs 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 2009 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 accompanying 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.
a n n u a l r e p o r t 2 0 0 9 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 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 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 9
(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 the effective interest method. when a receivable
is impaired, the group reduces the carrying amount to its recoverable 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 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 are classified
as operating leases (note 29). payments made under operating leases (net of any incentives received from the lessor) are
charged to the income statement on a straight-line basis over the period of the lease.
a n n u a l r e p o r t 2 0 0 9 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 9
(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 2009 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 tested 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 impairment.
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.
collectability 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 impairment allowance 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.
a n n u a l r e p o r t 2 0 0 9 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 0
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 9
(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 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 reporting 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 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 is 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 are carried at cost less accumulated amortisation and impairment losses.
a n n u a l r e p o r t 2 0 0 9 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 9
(m) Intangible assets (continued)
IT development and software
costs incurred in developing products or systems and costs incurred in acquiring software and licences that will contribute
to future period financial benefits through revenue generation and/or cost reduction are capitalised to software and
systems. costs capitalised include direct costs of materials and service and direct payroll and payroll related costs of
employees’ time spent on the project. amortisation is calculated on a straight-line basis over periods generally ranging
from 3 to 5 years.
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 reporting 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 advisors via the two share option plans.
information relating to these schemes is set out in note 26.
a n n u a l r e p o r t 2 0 0 9 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 2
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 9
(p) employee benefits (continued)
no expense is recognised in respect of options granted before 7 november 2002 and vested before 1 january 2005 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.
subsequent options issued to employees for nil considerations have 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 98/100 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.
a n n u a l r e p o r t 2 0 0 9 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 9
(v) New accounting standards and interpretations
certain new accounting standards and interpretations have been published that are not mandatory for 30 june 2009
reporting periods. the group’s and the parent 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 (effective from 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 adopted aasb 8 from 1 july 2009. it is not expected to affect any
of the amounts recognised in the financial statements.
as goodwill is allocated by management to groups of cash-generating units on a segment level, the change in
reportable segment may also require a reallocation of goodwill. however, this is not expected to result in any
additional impairment of goodwill.
(ii) Revised AASB 123 Borrowing Costs and AASB 2007-6 Amendments to Australian Accounting Standards arising
from AASB 123 (effective from 1 January 2009)
the revised aasb 123 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) Revised AASB 101 Presentation of Financial Statements and AASB 2007-8 Amendments to Australian
Accounting Standards arising from AASB 101 (effective from 1 January 2009)
the september 2007 revised aasb 101 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.
(iv) AASB 2008-1 Amendments to Australian Accounting Standard – Share-based Payments : Vesting Conditions
and Cancellations (effective from 1 January 2009)
aasb 2008-1 clarifies that vesting conditions are service conditions and performance conditions only and that other
features of a share-based payment are not vesting conditions. it also specifies that all cancellations, whether by the
entity or by other parties, should receive the same accounting treatment. the group will apply the revised standard
from 1 july 2009, but is not expected to affect the accounting for the group’s share-based payments.
(v) AASB 2008-8 Amendment to IAS 39 Financial Instruments – Recognition and Measurement (effective 1 July 2009)
aasb 2008-8 amends aasb 139 financial instruments: recognition and measurement and must be applied
retrospectively in accordance with aasb 108 accounting policies, changes in accounting estimates and errors.
the amendment makes two significant changes. it prohibits designating inflation as a hedgeable component of
a fixed rate debt. it also prohibits including time value in the one-sided hedged risk when designating options as
hedges. the group will apply the amended standard from 1 july 2009. it is not expected to have a material impact
on the group’s financial statements.
(vi) AASB 2009-2 Amendments to Australian Accounting Standards – Improving Disclosures about Financial
Instruments (effective for annual periods beginning on or after 1 January 2009)
in april 2009, the aasb published amendments to aasb 7 financial instruments: disclosure to improve the
information that entities report about their liquidity risk and the fair value of their financial instruments. the
amendments require fair value measurement disclosures to be classified into a new three-level hierarchy and
additional disclosures for items whose fair value is determined by valuation techniques rather than observable
market values. the aasb also clarified and enhanced the existing requirements for the disclosure of liquidity risk of
derivatives. the group has not early adopted the amendments. the amendments are not expected to affect any of
the amounts recognised in the financial statements but may affect certain disclosures.
a n n u a l r e p o r t 2 0 0 9 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 4
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 9
2 criti cal a cc o unti ng e stima t es a nd as sump ti 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. the key estimates and assumptions do not have a significant risk of causing a material adjustment within the
next financial year to the carrying amount of assets and liabilities recognised in these financial statements.
(iii) Deferred expenditure
the group tests annually whether acquired client portfolios have suffered anu impairment, in accordance with the accounting
policy stated in note 1(m). the cash flows used to determine the value of the cash generating units (cgus) in the goodwill
impairment analysis have been discounted at the group’s approximate weighted average cost of capital, which is 10%.
(iv) Client retention service fee
the group tests annually whether provision needs to be made for the client retention service fee, described in note 28.
criteria used include the probability of advisers working until retirement, estimated in the range between 30% and 70%,
the increase in operating service costs (if any) at the time of retirement, and the consequent savings in salaries and on-costs
upon an adviser’s retirement.
3 segment info rm at io n
(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. these all trade under the name of fiducian financial services.
Geographical segments
the group operates in a single geographical segment, australia.
a n n u a l r e p o r t 2 0 0 9 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
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 9
(b) Primary reporting – business segments
FuNDS
MANAgeMeNT
AND
ADMINISTRATION
FINANCIAL
PLANNINg
INTeR-
SegMeNT
eLIMINATIONS CONSOLIDATeD
$’000
$’000
$’000
$’000
2009
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
segment assets
segment liabilities
-
21,422
18,837
-
18,837
562
19,399
2,585
4,565
7,150
38
7,188
(4,565)
(4,565)
-
(4,565)
4,620
181
-
-
21,422
600
22,022
4,801
1,517
3,284
17,149
2,604
(1,603)
18,150
2,252
1,697
(927)
3,022
acquisitions of plant and equipment,
intangibles and other non-current segment assets
depreciation, amortisation and impairment
232
131
net cash inflow from operating activities
2,410
579
77
770
-
-
-
811
208
3,180
a n n u a l r e p o r t 2 0 0 9 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 6
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 9
(b) Primary reporting – business segments (continued)
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
a n n u a l r e p o r t 2 0 0 9 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 9
4 revenu e
From continuing operations
Sales revenue
NOTeS
CONSOLIDATeD
PAReNT eNTITy
2009
$’000
2008
$’000
2009
$’000
2008
$’000
fees and commissions received
21,023
27,393
18,798
24,700
other
399
375
39
582
revenue from ordinary activities
21,422
27,768
18,837
25,282
5 other i ncom e
interest received/receivable
distributions from related trusts
fair value gains on other financial assets at
fair value through profit or loss
11
6 expenses
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
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
27
150
682
808
812
244
360
1,023
4,079
(36)
684
565
8
27
600
70
70
17
20
101
138
-
208
776
64
(12)
828
67
67
12
182
65
259
-
326
121
655
796
778
234
349
1,090
4,023
(11)
670
527
8
27
562
53
53
17
19
42
78
-
131
132
583
452
561
207
349
885
720
64
(12)
772
48
48
12
182
42
236
-
284
98
551
429
541
189
331
995
3,169
3,134
(16)
383
-
356
a n n u a l r e p o r t 2 0 0 9 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 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 9
7
inc ome ta x e xpe nse
NOTeS
CONSOLIDATeD
PAReNT eNTITy
2009
$’000
2008
$’000
2009
$’000
2008
$’000
(a) Income tax expense
current tax
deferred tax
adjustments for current tax of prior periods
income tax expense
Deferred income tax (revenue) expense
included in income tax expense comprises:
decrease (increase) in deferred tax assets
(decrease) increase in deferred tax liabilities
15
20
deferred tax
(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
under provision in prior years
income tax expense
(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
22(b)
1,481
2,731
1,337
2,644
(12)
48
(16)
3
17
49
(15)
3
1,517
2,718
1,403
2,632
(18)
6
(12)
34
(50)
(16)
9
8
17
35
(50)
(15)
4,801
1,440
8,987
2,696
4,620
1,386
8,907
2,672
13
-
16
13
-
6
11
(60)
17
11
(60)
6
1,469
2,715
1,354
2,629
48
3
49
3
1,517
2,718
1,403
2,632
-
-
1
1
-
-
1
1
(d) Tax consolidation legislation
fiducian portfolio services limited and its australian wholly-owned operating entities have not formed a tax consolidated group.
a n n u a l r e p o r t 2 0 0 9 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 9
8 divi dend s
Ordinary shares
final ordinary franked dividend for the year ended 30 june 2008 of 6.5 cents
(2007: fully franked 6.0 cents) per share paid on 17 september 2008.
interim ordinary fully franked dividend for the year ended 30 june 2009 of 3.75 cents
(2008: fully franked 6.5 cents) per share paid on 16 march 2009.
total dividends paid in cash
PAReNT eNTITy
2009
$’000
2008
$’000
2,115
1,994
1,215
2,133
3,330
4,127
the directors have declared the payment of a final fully franked dividend for the year ended 30 june 2009 in the amount
of 3.0 cents per ordinary share to be paid on shares registered on 7 september 2009 and payable on 17 september 2009.
Franked dividends
the franked portions of the final dividends recommended after 30 june 2009 will be franked out of exisiting franking
credits or out of franking credits arising from the payment of income tax for the year ending 30 june 2010.
franking credits available for subsequent financial years
based on a tax rate of 30%
CONSOLIDATeD
PAReNT eNTITy
2009
$’000
2008
$’000
2009
$’000
2008
$’000
4,478
3,742
3,902
3,184
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 $416,000 (2008: $842,000).
a n n u a l r e p o r t 2 0 0 9 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 0
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 9
9
current as s ets – c as h a nd c ash e qui v alent s
CONSOLIDATeD
PAReNT eNTITy
cash at bank and in hand
bank bills of exchange
deposits securing bank guarantees
2009
$’000
7,672
-
149
2008
$’000
2,776
7,988
148
7,821
10,912
the group’s and the parent entity’s exposure to interest rate risk is discussed in note 35.
10 current as s ets – t r ad e a nd ot her r ece ivaB les
amounts receivable from related entities:
controlled entities
related trusts
business development loans
staff loans
other receivables
prepayments
less: provision for impairment of receivables
* Refer to Note 12 for the non-current portion of these receivables.
Movements in provision for impairment of receivables
balance at beginning of year
written off against provision
movement
balance at end of year
-
-
1,752
2,159
101
24
100
389
2,366
(74)
2,292
(54)
-
(20)
(74)
48
36
260
387
2,890
(54)
2,836
(46)
-
(8)
(54)
2009
$’000
6,306
-
122
6,428
673
1,676
101
24
25
377
2,876
(9)
2,867
(9)
-
-
(9)
2008
$’000
1,721
7,988
122
9,831
418
2,093
48
36
182
351
3,128
(9)
3,119
(9)
-
-
(9)
at 30 june 2009, 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 35.
a n n u a l r e p o r t 2 0 0 9 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 9
11 current as s ets – o the r fin anc ia l a sset s
at fair val ue thro u gh pro f i t o r l oss
at beginning of year
additions
revaluation – fair value gains/(losses)
at end of year
investment in related trust, at call
CONSOLIDATeD
2008
$’000
2009
$’000
PAReNT eNTITy
2008
$’000
2009
$’000
480
-
26
506
506
492
-
(12)
480
480
480
-
26
506
506
492
-
(12)
480
480
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.
Risk exposure
information about the group’s and the parent entity’s exposure to credit and price risk is provided in note 35.
since the end of the previous financial year, investments in other financial assets have become illiquid. the parent entity
continues to receive income and expects to receive a return of capital over the life of the investment. it is valued at current
published prices and no impairment charge has been made against the investment.
12 no n-cu rr e nt as se t s – r ece ivaB les
business development loans*
loans to staff*
less: provision for impairment of receivables
*Refer to Note 10 for the current portion of these receivables.
2,147
211
2,358
(16)
2,342
517
231
748
-
748
2,147
211
2,358
(16)
2,342
517
231
748
-
748
of the total business development loans of $2,236,000 (2008: 565,000)(being both current and non current), business
development loans of $379,000 (2008: $261,000) are advanced to entities or their associates in which the parent entity has a
40% equity interest. refer to note 30 related party transactions.
loans to staff members are granted for a maximum term of 3 years, at commercial interest rates and secured. the board
may extend the term.
(a) Impaired receivables and receivables past due
an amount of $16,000 has been provided against one loan. other than this, 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 and parent entity are as follows:
business development loans
loans to staff
2009
2008
CARRyINg
AMOuNT
FAIR vALue
CARRyINg
AMOuNT
FAIR vALue
$’000
$’000
$’000
$’000
2,131
211
2,342
2,131
211
2,342
517
231
748
517
213
748
a n n u a l r e p o r t 2 0 0 9 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 2
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 9
(c) Risk exposure
information about the group’s and the parent entity’s exposure to credit and interest rate risk is provided in note 35. the
maximum exposure to credit risk at the reporting date is the carrying amount of each class of receivables mentioned above.
13 non-cu rr e nt asse ts – oth er f ina nc ial asset 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
australia
ordinary
fiducian business services pty ltd
australia
ordinary
inheritance planners pty ltd
australia
ordinary
money & advice pty ltd
australia
ordinary
100
100
100
100
100
100
froud collins planning pty ltd
australia
ordinary
40
*
total investment by parent entity
these financial assets are carried at cost.
* Investments in associates
COST OF PAReNT
eNTITy’S INveSTMeNT
2009
$’000
2008
$’000
100
3,325
100
3,325
-
10
-
440
-
-
10
-
440
-
3,875
3,875
froud collins planning pty ltd, a 40% associate, has not been equity accounted in the consolidated financial statements
as there is no director significant influence and the investment was made to protect lending associated with this entity
(note 30). there is no director or management participation in the operation of this associate.
14 non-cu rr e nt asse ts – propert y, pl ant and eq uipmen t
Plant and equipment
furniture, office equipment and computers
less: accumulated depreciation
CONSOLIDATeD
PAReNT eNTITy
2009
$’000
2008
$’000
2009
$’000
2008
$’000
1,215
(1,014)
201
1,204
(927)
277
908
(742)
166
899
(672)
227
a n n u a l r e p o r t 2 0 0 9 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 9
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.
FuRNITuRe
AND OFFICe
eQuIPMeNT COMPuTeRS
LeASehOLD
IMPROveMeNTS
$’000
$’000
$’000
Consolidated
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
year ended 30 June 2009
opening net book amount
additions
disposals
depreciation / amortisation charge
closing net book amount
At 30 June 2009
cost or fair value
accumulated depreciation
net book amount
367
(307)
60
60
43
-
(23)
80
410
(330)
80
80
2
-
(20)
62
412
(350)
62
256
(159)
97
97
73
-
(45)
125
329
(204)
125
125
9
-
(50)
84
338
(254)
84
TOTAL
$’000
1,011
(847)
164
164
193
-
(80)
277
1,204
(927)
277
277
11
-
(87)
201
388
(381)
7
7
77
-
(12)
72
465
(393)
72
72
-
-
(17)
55
465
(410)
55
1,215
(1,014)
201
a n n u a l r e p o r t 2 0 0 9 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 4
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 9
14 non-current assets – property, plant and equipment continued
Parent entity
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
year ended 30 June 2009
opening net book amount
additions
disposals
depreciation / amortisation charge
closing net book amount
At 30 June 2009
cost or fair value
accumulated depreciation
net book amount
FuRNITuRe
AND OFFICe
eQuIPMeNT COMPuTeRS
LeASehOLD
IMPROveMeNTS
$’000
$’000
$’000
TOTAL
$’000
140
(100)
40
40
32
-
(13)
59
172
(113)
59
59
1
-
(15)
45
173
(128)
45
209
(130)
79
79
53
-
(36)
96
262
(166)
96
96
8
-
(38)
66
270
(204)
66
388
(381)
7
7
77
-
(12)
72
465
(393)
72
72
-
-
(17)
55
465
(410)
55
737
(611)
126
126
162
-
(61)
227
899
(672)
227
227
9
-
(70)
166
908
(742)
166
a n n u a l r e p o r t 2 0 0 9 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 9
15 no n-cu rr e nt as se t s – def e r re d ta x a sse ts
NOTeS
CONSOLIDATeD
PAReNT eNTITy
2009
$’000
2008
$’000
2009
$’000
2008
$’000
The balance comprises temporary differences attributable to:
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
27
387
29
50
97
8
106
704
686
18
704
493
211
704
16
357
43
95
93
6
76
686
720
(34)
686
511
175
686
7
303
28
44
97
8
66
3
275
42
90
93
6
53
553
562
562
(9)
553
382
171
553
597
(35)
562
410
152
562
16 non- cur r ent as se t s – i nt a ng iB le assets
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
5,577
(5,363)
214
5,354
(5,343)
11
5,575
(5,362)
213
5,352
(5,343)
9
1,225
(354)
871
3,663
(464)
3,199
4,284
648
(254)
394
3,663
(464)
3,199
3,604
418
(219)
199
418
(178)
240
-
-
-
-
-
-
412
249
a n n u a l r e p o r t 2 0 0 9 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 6
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 9
16 n on-cur r e nt as se t s – in ta n g iB le assets c o n tin ue d
(a) Movements
movements in each category are set out below:
At 1 July 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
year ended 30 June 2009
opening net book amount
additions
impairment charge
amortisation charge**
closing net book amount
At 30 June 2009
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
(189)
459
3,663
(464)
3,199
5,342
(5,161)
181
9,653
(5,814)
3,839
459
3,199
-
-
(65)
394
648
(254)
394
394
577
-
(100)
871
1,225
(354)
871
-
-
-
3,199
3,663
(464)
3,199
3,199
-
-
-
3,199
3,663
(464)
3,199
181
12
-
(182)
11
3,839
12
-
(247)
3,604
5,354
(5,343)
11
9,665
(6,061)
3,604
11
223
-
(20)
214
3,604
800
-
(120)
4,284
5,577
(5,363)
214
10,465
(6,181)
4,284
* 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 $120,000 (2008: $247,000) is included in depreciation, amortisation and impairment expense in the income statement.
a n n u a l r e p o r t 2 0 0 9 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 9
16 no n-cu rr e nt as se t s – i nta ng 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 2009 (2008: nil).
17 current lia Bi li tie s – t r ade a nd ot her pa yaB les
trade payables
other payables
amounts due to related entities
client portfolio deferred settlement
employee entitlements accrued
CONSOLIDATeD
PAReNT eNTITy
2009
$’000
761
522
-
182
726
2,191
2008
$’000
760
809
-
-
689
2,258
2009
$’000
722
355
20
-
582
1,679
2008
$’000
736
741
10
-
537
2,024
information about the group’s and the parent entity’s exposure to credit and interest rate risk is shown in note 35.
18 current l ia Bi li ti e s – cur ren t ta x lia B ili ti es
income tax
127
850
137
896
19 non cu r re nt l ia Bi li tie s – tra de and oth er pay aB les
client portfolio deferred settlement
139
-
-
-
a n n u a l r e p o r t 2 0 0 9 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 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 9
20 non-cu rr e nt li aBi li tie s – deferred t ax l iaB ili ti es
NOTeS
CONSOLIDATeD
PAReNT eNTITy
2009
$’000
2008
$’000
2009
$’000
2008
$’000
The balance comprises temporary differences attributable to:
Amounts recognised in profit and loss
income receivable
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
12
-
12
6
6
12
12
-
12
4
2
6
56
(50)
6
6
-
6
12
-
12
4
8
12
12
-
12
4
-
4
54
(50)
4
4
-
4
21 non-cu rr e nt li aBi li tie s – provi si ons
employee benefits – long service leave
553
474
424
376
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.
a n n u a l r e p o r t 2 0 0 9 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 9
22 contri Bute d e qui ty
(a) Share capital
ordinary shares – fully paid
(b) Movements in ordinary share capital
CONSOLIDATeD
2008
$’000
2009
$’000
PAReNT eNTITy
2008
$’000
2009
$’000
8,160
8,982
8,160
8,982
DeTAILS
NuMBeR OF ShAReS
AveRAge PRICe
$’000
DATe
1 jul 2007
30 jun 2008
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
33,032,134
(635,359)
$2.72
365,510
$0.62
32,762,285
(428,550)
$2.03
60,302
$0.68
10,451
(1,728)
(5)
1
228
35
8,982
(867)
(3)
-
41
7
8,160
30 jun 2009
transfer from share-based payments reserve
balance
32,394,037
(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 2008 and june 2009 the company purchased and cancelled ordinary shares on-market in order to reduce the
company’s capital and surplus liquidity, as originally announced in 2005 and last extended on 31 march 2008. during the
financial year the shares were acquired at an average price of $2.03 per share, with prices ranging from $0.96 to $2.40.
the net cost of $867,000, and $3,000 of transaction costs, was deducted from equity.
at 30 june 2009, 42,450 shares remained available to be repurchased under the most recently announced buy back.
(e) Options
information relating to fiducian portfolio services employee & director and adviser option plans and options issued,
exercised and lapsed during the year is set out in note 26.
(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 afs 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.
a n n u a l r e p o r t 2 0 0 9 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 0
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 9
23 reserves
Movements
Share based payments reserve
balance 1 july
option expense
transfer to share capital (options exercised)
balance 30 june
NOTeS
CONSOLIDATeD
PAReNT eNTITy
2009
$’000
2008
$’000
2009
$’000
2008
$’000
259
48
(7)
300
148
146
(35)
259
259
48
(7)
300
148
146
(35)
259
the share based payments reserve is used to recognise the fair value of options issued but not exercised.
24 retain e d pr of i t s
movements in retained profits were as follows:
balance 1 july
net profit for the year
dividend from subsidiary
dividends paid
balance 30 june
6,714
3,284
-
(3,330)
6,668
4,572
6,269
-
(4,127)
6,714
6,550
3,017
200
4,402
6,075
200
(3,330)
(4,127)
6,437
6,550
8
25 key manage m en t pe r son n el di sc los ur es
(a) Key mangement personnel compensation
short-term employee benefits
post employment benefits
share-based payments
CONSOLIDATeD
PAReNT eNTITy
2009
$’000
2008
$’000
2009
$’000
2008
$’000
650,078
670,516
650,078
670,516
20,103
1,635
19,777
75,447
20,103
1,635
19,777
75,447
671,816
765,740
671,816
765,740
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 the 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 options over ordinary shares in the company held during the financial year by each director 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.
a n n u a l r e p o r t 2 0 0 9 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 9
25 key manage me nt p e rson n el di sc los ur es c o n tin ued
(b) equity instrument disclosures relating to key management personnel (continued)
2009
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**
200,000
-
-
-
15,000
-
-
-
215,000
200,000
-
-
* No options are proposed to be issued in accordance with Mr Singh’s employment contract after the end of the year.
** 10,682 Adviser options are held by an entity in which F Khouri has an interest.
2008
NAMe
i singh
f Khouri*
BALANCe AT
The START OF
The yeAR
100,000
-
gRANTeD DuRINg
The yeAR AS
ReMuNeRATION
exeRCISeD
LAPSeD DuRINg
The yeAR
BALANCe AT
The eND OF
The yeAR
veSTeD AND
exeRCISABLe
-
-
100,000
-
-
-
200,000
200,000
-
-
* 7,182 Adviser options are held by an entity in which F Khouri has an interest.
note: the assessed fair value at grant date of options granted to the individuals is detailed in note 26.
(iii) Shareholdings
the numbers of shares in the company held during the financial year by each director of fiducian portfolio services
limited, including their personally related and associated entities, are set out below. there were no shares granted
during the period as compensation.
2009
NAMe
i singh
r e bucknell
a Koroknay
f Khouri
2008
NAMe
i singh
r e bucknell
a Koroknay
f Khouri
BALANCe AT The
START OF The yeAR
ReCeIveD DuRINg
The yeAR ON The
exeRCISe OF
ADvISeR OPTIONS
OTheR ChANgeS
DuRINg The yeAR
BALANCe AT The eND
OF The yeAR
9,599,307
1,050,000
-
107,373
-
-
-
-
77,073
19,000
-
27,000
9,676,380
1,069,000
-
134,373
BALANCe AT The
START OF The yeAR
ReCeIveD DuRINg
The yeAR ON The
exeRCISe OF
ADvISeR OPTIONS
OTheR ChANgeS
DuRINg The yeAR
BALANCe AT The eND
OF The yeAR
9,486,500
1,050,000
-
-
-
-
-
-
112,807
-
-
107,373
9,599,307
1,050,000
-
107,373
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 (2008: nil).
entities with which a director has an interest exercised no adviser options during the year (2008: 107,373 options).
no amounts are unpaid on any shares issued on the exercise of options.
a n n u a l r e p o r t 2 0 0 9 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 2
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 9
25 key manage m en t pe r son n el di sc los ur es c o n tin ued
(c) Loans to directors
no loans were made to directors during the financial year (2008: 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 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 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
2009
$
2008
$
218,503
240,293
-
9,858
207,443
590,141
425,946
840,292
unissued ordinary shares of fiducian portfolio services limited under option at the date of this report are disclosed in note
26 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 2009 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 26 to the financial report.
a n n u a l r e p o r t 2 0 0 9 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 9
26 share Bas ed p ayment s
(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, where 35%
after one year, a further 45% vest after two years and the remaining 15% 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 the 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 260,000 options (2008:150,000) options to staff during the year at an exercise price of $2.30 (2008: $2.65), and
500 options expired (2008: 41,050).
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 no options
(2008: 15,000 options at $2.30) to the executive director in respect of the year ended 30 june 2009.
(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 2011 or when 17,347,000
options and preference shares have been issued. options are granted for no consideration. the total adviser options and
preference shares issued since inception total only 6,847,517.
a n n u a l r e p o r t 2 0 0 9 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 4
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 9
26 share Bas ed p ayment s 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 – 2009
ESOP – Managing Director – Note 26(a)
26 oct 2006
26 oct 2011
$1.29
30 oct 2007
30 oct 2012
$2.65
29 oct 2009
29 oct 2013
$2.30
ESOP – Staff – Note 26(a)
24 aug 2004
24 aug 2009
$0.55
22 feb 2005
22 feb 2010
$0.73
3 jul 2006
3 jul 2011
31 jul 2007
31 jul 2012
$1.29
$2.65
100,000
100,000
-
200,000
29,000
38,400
138,875
130,000
-
-
15,000
15,000
-
-
-
-
27 aug 2008
27 aug 2013
$2.30
-
260,000
-
-
-
-
(2,000)
(5,000)
(5,125)
-
-
-
-
-
-
-
-
100,000
100,000
100,000
100,000
15,000
-
215,000
200,000
27,000
33,400
27,000
33,400
(500)
133,250
106,600
-
-
130,000
260,000
45,500
-
336,275
260,000
(12,125)
(500)
583,650
212,500
ASOP – Advisers – Note 26(b)
3 sep 2003
3 sep 2008
$0.48
24 aug 2004
24 aug 2009
$0.55
78,501
19,637
23 aug 2005
23 aug 2010
$0.87
122,806
29 aug 2006
29 aug 2011
$1.68
30 sept 2007
30 sept 2012
$3.45
70,382
31,480
-
-
-
-
-
30 sept 2008
30 sept 2013
$2.70
-
31,900
(14,941)
(63,560)
(19,637)
-
-
-
-
-
(13,599)
(14,604)
94,603
94,603
-
-
-
(11,815)
58,567
(6,150)
25,330
-
31,900
-
-
-
total
859,081
306,900
(60,302)
(96,629) 1,009,050
507,103
322,806
31,900
(48,177)
(96,129)
210,400
94,603
weighted average exercise price
$1.56
$2.34
$0.68
$0.88
$1.92
$1.51
the weighted average share price at the date of exercise of options exercised during the year ended 30 june 2009 was $2.03
(2008 – $2.74).
the volume weighted average remaining contractual life of share options outstanding at the end of the period was 2.85 years
(2008 – 2.81 years).
a n n u a l r e p o r t 2 0 0 9 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 9
26 share Bas ed p ayment s 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 – 2008
ESOP – Managing Director – Note 26(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 26(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 26(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
a n n u a l r e p o r t 2 0 0 9 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 6
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 9
26 share Bas ed p ayment s 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 2009 was 11 cents per option for
executive director, 39 cents per option for staff and 17 cents per share for advisers (2008 – 75 cents per share for executive
director, 53 cents for staff and 36 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 2009 included:
eSOP – DIReCTOR
2008
2009
eSOP – eMPLOyeeS
2008
2009
eSOP – ADvISeRS
2009
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
$2.30
$2.65
$2.30
$2.65
$2.70
$3.45
(c) grant date:
(d) expiry date:
29 oct 2008 30 oct 2007 27 aug 2008 31 july 2007 30 sep 2008 31 july 2007
29 oct 2013 30 oct 2012 27 aug 2013 31 july 2012 30 sep 2013 31 july 2012
(e) share price at grant date:
$1.80
$2.90
$2.30
$2.85
$2.10
$2.85
(f) expected price volatility of
the company’s shares:
(g) expected dividend yield:
56%
4.4%
55%
4.0%
56%
4.4%
55%
4.0%
56%
4.4%
55%
4.0%
(h) risk-free interest rate:
6.00%
6.55%
7.25%
6.30%
7.00%
6.30%
(i)
lapse (exit) rate
0%
0%
25%
25%
46%
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
2009
$
2008
$
2009
$
2008
$
options issued under esop
56,377
155,553
56,377
155,553
a n n u a l r e p o r t 2 0 0 9 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 9
27 remun e r at i on of au di tors
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
108,300
108,500
102,800
90,500
CONSOLIDATeD
PAReNT eNTITy
2009
$
2008
$
2009
$
2008
$
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:
audit of regulatory returns
total remuneration
252,000
240,050
246,500
240,550
-
-
-
-
360,300
349,050
349,300
331,050
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.
28 conting ent lia Bi li tie s
the parent entity and group had contingent liabilities at 30 june 2009 in respect of:
(a) bank guarantees for property leases of parent and group entities amounting to $579,000. (2008: $567,000).
(b) bank guarantee for afs licence of a subsidiary amounting to $20,000. (2008: $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 is based on service period and certain
income criteria that may increase or decrease prior to retirement date and in the subsequent two years. payment of this fee
is subject to further ongoing conditions, including client retention, 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.
no material losses are anticipated in respect of the above contingent liabilities, as the expected reduction in servicing cost
post retirement is estimated to offset the benefit payment. further details of the estimate is in note 2 (iv).
a n n u a l r e p o r t 2 0 0 9 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 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 9
29 com mi tme nt s f or e xpe n ditur e
(a) Capital expenditure
commitments in relation to systems development
payable within one year
(b) Operating leases
the group leases various offices under non-cancellable
operating leases expiring within 12 months to five years.
the leases have varying terms, escalation clauses and renewal
rights. on renewal, the terms of the leases are renegotiated.
within one year
later than one year but not later than 5 years
CONSOLIDATeD
PAReNT eNTITy
2009
$’000
2008
$’000
2009
$’000
2008
$’000
137
137
284
952
1,236
267
435
702
284
946
1,230
255
429
684
30 related par ty t ransac ti ons
(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) Key management personnel
disclosures relating to key management personnel are set out in note 25.
(d) Transactions with related parties
transactions between fiducian portfolio services limited and other entities in the wholly-owned group during the years
ended 30 june 2009 and 2008 consisted of:
a. commission paid by fiducian portfolio services limited
b. provision of software by fiducian portfolio services limited
c. recovery of group costs, such as insurance, by fiducian portfolio services limited
d. interest free working capital advanced by and repaid to fiducian portfolio services limited
e. collection of fees and 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.
a n n u a l r e p o r t 2 0 0 9 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 9
30 related par ty t ransac tion s c o nt in ue d
(d) Transactions with related parties (continued)
the following transactions occurred with related parties:
OwNeRShIP
INTeReST*
2009
$
2008
$
2009
$
2008
$
CONSOLIDATeD
PAReNT eNTITy
wholly owned group
fiducian financial services pty ltd
Dividend paid to parent entity
Commission paid
Expenses paid and systems costs recovered
harold bodinnar & associates pty ltd
Commissions paid
Management fees and marketing incentive
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 loans to associates
40%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
200,000
2,612,676
381,855
200,000
3,394,091
382,352
1,875,439
169,091
2,177,138
305,870
76,413
334,075
110,994
176,365
-
-
475,106
378,872
379,567
260,915
-
378,872
-
260,915
Related trusts
fiducian investment service
Operator fees income
fiducian superannuation service
Trustee fees income
fiducian funds
Responsible entity fees income
Director associated entities
hawkesbury financial services pty ltd
Commissions paid
provident financial planning pty ltd
Commissions paid
nil
nil
nil
4,025,874
5,710,231
4,025,874
5,710,231
11,766,421 15,042,707
11,766,421 15,042,707
3,091,198
4,216,033
3,091,198
4,216,033
207,443
260,318
-
329,823
-
-
-
-
* ‘Ownership Interest’ means the percentage of capital of the company held directly and/or indirectly through another entity by Fiducian
Portfolio Services Limited.
a n n u a l r e p o r t 2 0 0 9 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 0
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 9
30 related par ty transact ion s c o nt in ue d
e) 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
2009
$
2008
$
673,951
417,678
20,467
9,599
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.
31 econom ic depe nd e ncy
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.
32 reconc i liatio n o f p ro fit or l oss a f t er i nc om e t a x t o n et
cas h inf loW f r om o pe rat ing a c tiv it ies
profit for the year
non-cash employee benefit expense
dividend and investment income
depreciation and amortisation
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
CONSOLIDATeD
PAReNT eNTITy
2009
$’000
3,284
200
(8)
208
-
544
(723)
(27)
1
(287)
-
(18)
6
3,180
2008
$’000
6,269
200
(64)
326
1
216
(558)
12
(146)
(237)
-
34
(50)
6,003
2009
$’000
3,217
157
(208)
131
-
527
(759)
(27)
(14)
(386)
(245)
9
8
2008
$’000
6,275
149
(264)
284
1
166
(390)
12
(90)
(121)
(383)
35
(50)
2,410
5,624
a n n u a l r e p o r t 2 0 0 9 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 9
33 earn ing s pe r s ha r 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
2009
2008
10.09 cents 19.06 cents
9.82 cents 18.56 cents
CONSOLIDATeD
2009
NuMBeR
2008
NuMBeR
32,537,946 32,897,744
914,124
873,825
33,452,070 33,771,569
(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
2009
$’000
3,284
2008
$’000
6,269
(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 26.
a n n u a l r e p o r t 2 0 0 9 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 2
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 9
34 even ts oc cu r r ing af ter B a lan ce da te
under the rules of the adviser share option plan, the directors are required to grant options to advisers within three
months of the announcement of the group’s results to the australian securities exchange. no options are being issued this
year (2008: 31,900 at an exercise price of $2.70).
under the same rules 49,988 adviser options (2008: 63,560) are expected to be cancelled subsequent to the end of the
financial year. to the date of this report 13,200 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 not granted options to employees after
year end (2008: 260,000 at $2.30). no options have been granted to the managing director (2008: 15,000 at $2.30).
to the date of this report, 28,000 options have been exercised by employees.
35 financ i al ri sk ma nage me nt
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:
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
CONSOLIDATeD
PAReNT eNTITy
2009
$’000
7,821
4,634
506
2008
$’000
10,912
3,584
480
2009
$’000
2008
$’000
6,428
5,209
506
9,831
3,867
480
12,961
14,976
12,143
14,178
2,330
2,258
1,679
2,024
a n n u a l r e p o r t 2 0 0 9 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
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 9
35 financia l r is k m anage m en t c o n tin ue d
(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 publicly traded securities. sensitivity analysis is therefore based on the assumption that all
funds under advice, administration and management had increased or decreased by 10% (2008 - 10%) against actual
market movements, with all other variables held constant other than commission that is paid out of such income.
overall market movement on management fees
IMPACT ON POST-TAx PROFIT
IMPACT ON eQuITy
2009
$’000
1,581
2008
$’000
2,023
2009
$’000
1,581
2008
$’000
2,023
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 2009
30 JuNe 2008
weighted average
interest rate
%
cash at bank and on deposit
bank bills of exchange
staff & adviser loans
2.0%
-
5.4%
Balance
$’000
7,821
-
2,467
10,288
weighted average
interest rate
%
6.0%
7.9%
9.6%
Balance
$’000
2,924
7,988
832
11,744
bank bills of exchange mature in less than 30 days and staff and adviser loans have terms extending between 2 and
9 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
2009 if interest rates had change by +/- 100 basis points from the year end rates with all other variables held
constant, post-tax profit would have been $72,000 higher or lower (2008: $66,000 at 80 basis points).
a n n u a l r e p o r t 2 0 0 9 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 4
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 9
35 financia l r is k m anage m en t c o nt in 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
loans to staff and advisers
unrated
CONSOLIDATeD
PAReNT eNTITy
2009
$’000
2008
$’000
2009
$’000
2008
$’000
7,821
-
2,924
7,988
6,428
-
1,843
7,988
7,821
10,912
6,428
9,8310
506
2,342
480
748
506
2,342
480
748
the maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets as summarised
on page 74.
(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.
due in less than 1 year
due between 1 and 2 years
(d) Fair value estimation
2,191
139
2,258
-
1,679
-
2,024
-
2,330
2,258
1,679
2,024
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.
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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 34 to 75 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 2009 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.
the directors have been given the declarations by the managing director and financial controller 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, 26 august 2009
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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 m e m B e r s o f
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
Independant auditor’s report to the members 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
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 2009, 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.
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.
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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 m e m B e r s o f
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 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 2009 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 25 in the financial report
for the year ended 30 june 2009. 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 2009, 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 (the
company) for the year ended 30 june 2009 included on fiducian portfolio services limited’s 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
darren ross
partner
sydney
27 august 2009
liability limited by a scheme approved under professional standards legislation.
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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