annual
rep rt
2o11
Fiducian portFolio ServiceS limited
acn 073 845 931
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.
P a g e i i i f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 1
c o n t e n t s
j o i n t r ePo r t oF t h e c h a i r m a n
a n d t h e m a n aGi nG d i r e c t o r
c o rPo r a t e d i r e c t o rY
d i r e c t o rS’ r ePo r t
a u d i t o r ’S i n d ePe n d e n c e d e c l a r a t i o n
c o rPo r a t e Go v e r n a n c e St a t e m e n t
Sh a r e h o l d e r i nFo r m a t i o n
F i n a n c i a l r ePo r t
St a t e m e n tS oF c o mPr e h e nSi v e i n c o m e
St a t e m e n tS oF Fi n a n c i a l PoSi t i o n
St a t e m e n tS oF c h a nGeS i n eQu i tY
St a t e m e n tS oF c aSh Fl oW
n o t eS t o t h e Fi n a n c i a l St a t e m e n tS
d i r e c t o rS ’ d e c l a r a t i o n
i n d ePe n d e n t a u d i to r’ S r ePo r t t o t h e m e mBe rS
2
8
9
2 2
2 3
3 0
3 3
3 4
3 5
3 6
3 7
3 8
7 8
7 9
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d
a c n 0 7 3 8 4 5 9 3 1 P a g e 1
joint
report
oF the
chairman
and the
managing
director
dear Shareholder,
on behalf of the directors, we jointly report on the consolidated operating
performance of Fiducian Portfolio Services limited and its controlled operating
entities for the year ended 30 june 2011.
P a g e 2 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 1
Financial inFormation
Results for 2010-2011
Fiducian is pleased to report a net consolidated profit after income tax of $4.43 million. this is an increase
of 7.8% on the prior year of $4.11 million. the consequential eBitda earnings before interest expense,
tax, depreciation and amortisation was $6.67 million compared with $6.18 million last year. unfortunately,
uncertain geo-political events around the world and australia, along with volatile financial markets have not
been conducive to promoting conditions for stronger profit growth.
net margin income increased by 4.3% (2010: increase 6.7%), predominantly as a consequence of market
valuations and expenditure controls. Fiducian has been built to withstand varying external pressures and has
significant capacity for further growth in revenue.
operating expenses were again contained, with overall expenses increasing by just 3.6% (2010: decrease
1.3%). Fiducian believes that its employees are its strength and therefore endeavours to involve all employees in
its culture, commonly referred to as the ‘Fiducian Family’. employee costs rose 6.0% after a freeze on increases
and recruitment in the previous year. Staff loyalty was rewarded through salary increases and some additional
staff were appointed on a selective basis to plug previously unfilled resource gaps. Fiducian follows a policy of
training, building and retaining quality staff in good and poor economic times, so they can participate in the
future expansion of the business.
capital management
Final Dividend
the Board remains cautious, but is confident that in spite of strong headwinds being experienced by financial
markets currently, the future of the business in its present form is sound and likely to strengthen in an
improving economic and financial market environment. as a result, a fully franked final dividend of 5.00 cents
per share has been declared which will bring the total fully franked dividend declared for the 2011 financial
year to 10.00 cents (2010: 8.50 cents). the final dividend will be paid on issued shares held on 8 September
2011 and be payable on 22 September 2011.
Cash Flow
net operating cash flows of $5.12 million were achieved (2010: $4.83 million). after payment for prior and
current year business acquisitions ($1.01 million), capital items ($0.28 million), share buy backs less options
exercised ($ 0.32 million) and dividend outlays ($3.14 million) net cash increased by $0.67 million (2010:
increase $1.66 million). cash at year end was $10.1 million (2010: $9.5 million), of which $5.0 million is
required for regulatory purposes. $0.67 million is held as a contingency to make progressive payments for
existing business acquisitions.
a key feature of the company is that it continues to remain debt free and exhibits a positive working capital
and cash flow position.
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d
a c n 0 7 3 8 4 5 9 3 1 P a g e 3
j o i n t r ePo 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
On Market Buy-Back
Fiducian bought 258,229 shares on market during the year (2010: 261,015) for a total consideration, including
brokerage, of $0.36 million (2010: $0.38 million) at an average price per share of $1.39 (2010: $1.44). there
are 32.164 million shares on issue at year end (2010: 32.208 million).
Acquisitions
We have been looking to acquire reasonably priced and well managed client portfolios for our financial
planners. Since the acquisition made late in the previous financial year, we acquired client portfolios in Sydney
and in Perth for a total cost of nearly one million dollars. the Perth acquisition has resulted in the establishment
of a new Fiducian company office near year end.
to diversify our earnings streams we also acquired the clients of an accounting practice in Sydney. the practice,
now operating as Fiducian accountants & Business advisers (FaBa), has assimilated with our Sydney company-
owned financial planning office. this business operates as a division of Fiducian Business Services Pty ltd.
Further acquisitions, 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, no options are
proposed to be issued as the Plan was not extended.
in accordance with the terms and conditions of the approved employee and director Share option Plan,
no options will be issued to employees or the managing director.
Financial planning
The Network
the Fiducian Financial Services brand continues to grow into a quality national network of franchised and
salaried financial planners. Good financial planning strategies for asset accumulators and retirees and an
appropriate frequency of client contact and communication by all Fiducian financial planners has resulted
in impressive client retention levels. however, financial market volatility and political uncertainty has caused
potential investors to defer long term investment decisions and instead focus on cash holdings which could be
a short sighted view. We have therefore put in place marketing initiatives to explain the economic environment
and encourage long-term investors to take advantage of market weakness.
Practice development managers based in Sydney, melbourne and Brisbane continue to work hard to support
and grow the planner network throughout australia. more high quality financial planners who embraced the
Fiducian philosophy of integrity and service, joined the network last year.
Salaried Offices
company owned offices with salaried financial planners based in Sydney, melbourne, Brisbane and tasmania
have continued to contribute to overall results. We are continuing with our program to buy client bases to be
serviced by these planners.
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 is to quality. inflows from franchisees comprised
68% of total planner inflows (2010: 58%).
P a g e 4 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 1
j o i n t r ePo 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
platForm adminiStration
Platform administration offers portfolio wrap administration for superannuation and investment services to
the planner market place. the hallmark of the Fiducian administration offering is quality in terms of daily
processing, accuracy and customer service.
Funds under Administration
Funds under administration remained flat and rose in total by 0.4% to $1.15 billion (2010 $1.14 billion). We expect
some acquired client bases to gradually transition to Fiducian platforms if it is appropriate for the investors. Such
investors could then enjoy the full benefit of our personalised service and quality investment strategies.
Independent Advisers
in addition to providing administration services to Fiducian planners and badge arrangements, services are
provided to some independent planners who hold their own aFSl license. Funds under administration for
independent planners remained steady at 15% of total funds under administration.
Corporate Superannuation
corporate superannuation increased by 4% (2010: 21%) during the year, but forms only a small portion of
funds under administration. Fiducian has focussed on the small employer market so all employees using our
superannuation fund could receive the appropriate services of a financial planner. it compliments our core
belief that proper financial planning advice is essential for all investors.
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.
in investment performance surveys, our diversified funds remain regularly in top quartile positions over longer
time frames. the Property Securities Fund and international Shares Fund have also performed well with
the latter being ranked no 1 for the year in one of these surveys. We are pleased to note that our process
continues to work for the benefit of our clients.
inFormation technologY
the Fiducian information technology (Fit) team’s main focus last year was to direct its efforts towards
improvements to the administration system. this could provide much greater control, efficiency and substantial
cost savings and open up new business opportunities in the future. System enhancements were also provided
to Fiducian Business Services.
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d
a c n 0 7 3 8 4 5 9 3 1 P a g e 5
j o i n t r ePo 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
BuSineSS ServiceS
Fiducian Business Services Pty ltd (FBS) is our subsidiary that was established to provide support to accountants
for book keeping, accounts preparation and self managed super fund administration. From a low-key start its
proven success, in helping accountants to lift their profitability, has encouraged us to take a further step and
acquire an accounting practice which now operates as Financial accountants & Business advisers (FaBa). We
see further expansion to come in this area of our business. FBS support services should assure the profitability
of FaBa, while our financial planners can assist accounting clients in their investment planning, risk insurance,
estate planning and property mortgage strategies. a further development through FBS is the growth of an
independent Self managed Super Fund administration facility, which aims to capture a share of this segment of
our industry.
We expect FBS to become a fast growth pillar of our business in future years. it can provide a stable
recurring income stream and cushion any financial market earnings downturn, as its earnings are unrelated to
financial markets.
human reSourceS
Management and Staff
the Fiducian management team is focused on managing and 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 the business operations
which are used to monitor performance at least on a quarterly basis.
Advisers Council and IT User Group
the adviser council is drawn from our supporting financial planners 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 planners to alert
the company to issues that may need consideration.
the it user Group was formed two years ago and it deserves commendation for its contribution to the
development of our financial planning and reporting systems.
Board of Directors
the company’s three to 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 2011-12 year.
the performance of financial markets going forward and, as well, political leadership which needs to act
decisively and bring back confidence to the investing public will influence future results. nevertheless,
management remains committed to achieving the goals and objectives set down in these plans.
P a g e 6 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 1
j o i n t r ePo 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 2010-11 financial year, the australian and international share markets were buffeted repeatedly by
positive and negative news, but overall posted reasonably good gains, though weakening towards the end of
the financial year.
our house view is for continuing volatility, but for markets to pull through and eventually deliver positive
returns. Share markets are cheap by historical measures and there is a large amount of cash waiting on the
sidelines to enter. Share markets could therefore rise strongly when a hint of economic growth and political
stability emerges. 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 believes that expectations for our future should improve from the current low point.
the Board also expects profits to continue in coming years as management focuses on expanding its range of
business activities and on realizing the full potential of financial planning, platform administration, investment
management, business services and information technology, whilst controlling expenditure.
Fiducian has always insisted on fees being fully disclosed and charged for services provided. all our clients
are expected to receive continuous advice and agree to their planner’s remuneration in writing. our product
disclosure documents specify that planner fees are negotiable between client and planner.
the Future of Financial advice (FoFa) changes are expected to be legislated sometime this year and
imposed upon the industry. Whatever its final shape, we believe that Fiducian has always been operating
in a transparent and ethical manner since inception, possibly well ahead of any forced regulatory changes.
therefore, we do not expect any detrimental financial fallout to be experienced by the group from FoFa.
the business plan for 2012 financial year looks at expanding the revenue base by growing the existing Fiducian
business model and further expanding its accountancy resourcing services to the self managed superannuation
fund market, accounting and legal community.
the cash management strategy for the next financial year is to utilize profits to pay dividends and to use any
surplus to support meaningful acquisitions or 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
24 august 2011
indy Singh
Managing Director
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d
a c n 0 7 3 8 4 5 9 3 1 P a g e 7
c o rPo r a t e di r e c t o r y
di rectors
sha re reg iste r
r Bucknell Fca
Chairman
i Singh cFP, Btech, mcomm (Bus), aSia, aSFa, dip. FP
Managing Director
F Khouri B Bus, FcPa, Ftia
c Stone B comm, llB, llm, ca, aciS
secretary
i Singh cFP, Btech, mcomm (Bus), aSia, aSFa, dip. FP
notice of annu al
general me e ti ng
the annual general meeting of
Fiducian Portfolio Services limited
Will be held at level 4, 1 York Street, Sydney
Time
Date
10:00am
Wednesday 26 october 2011
Pri nciPal re gi st e re d
offi ce in aust ra li a
level 4
1 York Street
Sydney nSW 2000
(02) 8298 4600
Wholly oWne d
oPerating ent i t i e s
Fiducian Financial Services Pty ltd
Fiducian Business Services Pty ltd
computershare investor Services Pty limited
level 3
60 carrington Street
Sydney nSW 2000
audit or
Pricewaterhousecoopers
chartered accountants
darling Park tower 2
201 Sussex Street
Sydney nSW 1171
B an kers
Westpac Banking corporation
341 George Street
Sydney nSW 2000
anZ Banking Group
55 collins Street
melbourne vic 3000
stoc k ex ch ang e li st in g
Fiducian Portfolio Services limited (FPS) shares
are listed on the australian Securities exchange.
WeBsite a ddress
www.fiducian.com.au
P a g e 8 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 1
d i r e c t o r s ’ r ePo 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 2011.
Directors
the following persons were directors of Fiducian Portfolio Services limited during the financial year and up to the date
of this report.
r Bucknell
i Singh
F Khouri
c Stone
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 entity, Fiducian Financial
Services Pty ltd (including the operations of harold Bodinnar & associates Pty ltd and money & advice Pty ltd).
(e) the Provider of accountancy resource services through its wholly owned operating entity, Fiducian Business
Services 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 2010 of 4.75 cents
(2009: Fully franked 3.0 cents) per share paid on 15 September 2010.
interim ordinary fully franked dividend for the year ended 30 june 2011 of 5.0 cents
(2010: Fully franked 3.75 cents) per share paid on 18 march 2011.
total dividends in respect of the year
2011
$’000
2010
$’000
1,532
973
1,611
3,143
1,213
2,186
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 2011 of 5.0 cents per ordinary share held at 8 September 2011 and
payable on 22 September 2011.
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
2011
$’000
21,562
8,225
(5,293)
24,494
2010
$’000
20,335
7,864
(4,928)
23,271
Profit from ordinary activities before income tax expense
income tax expense
net profit attributable to members of Fiducian Portfolio Services limited
2011
$’000
5,941
451
-
6,392
(1,956)
4,436
2010
$’000
5,307
596
-
5,903
(1,791)
4,112
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d
a c n 0 7 3 8 4 5 9 3 1 P a g e 9
d i r e c t o r s ’ r ePo 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
as in the previous year the valuation of investment funds has remained subdued and impacted on the growth of
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 5.00 cents per
share, bringing the full year dividend to 10.00 cents per share.
Significant changes in the state of affairs
Significant changes in the state of affairs of the Group during the financial year were as follows:
on 1 july 2010, the operations of subsidiary entities harold Bodinnar & associates Pty ltd and money & advice Pty ltd
were merged with Fiducian Financial Services Pty ltd. all operate under the latter’s australian Financial Services licence. the
merger will provide marketing consistency and ongoing administrative savings.
on 9 February 2011, the Group acquired a portfolio of financial planning clients, which transferred to Fiducian Financial
Services Pty ltd progressively until the end of the financial year.
on 17 may 2011, the subsidiary Fiducian Business Services Pty ltd acquired a business including a portfolio of accounting
clients which will trade as Fiducian accountants and Business advisers. due to the transition and setting up of the new
office, no billings occurred in june.
on 27 june 2011, the Group acquired a financial planning business in order to grow its presence in Western australia.
on acquisition, clients and staff of the business were transferred to Fiducian Financial Services Pty ltd, the Group’s financial
planning specialist. no income has been recognised during the period.
contributed equity has reduced by $360,191 (inclusive of brokerage) as a result of the buy back of 258,229 shares on
the stock exchange at an average price of $1.39 per share during the year, and increased by $242,713 as a result of the
exercise of 214,653 share options at an average price of $1.13 per share.
Further, 40,000 options were issued to the managing director, in respect of the 2010 financial year, and no other options
were issued to staff or planners during the year, whilst 108,000 options issued to staff and 7,848 options issued to 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 no options are being issued this year (2010: nil) as the plan has not been
extended. under the same rules 330 options will expire after year end.
under the rules of the employee and director Share option Plan the directors have not granted any options to employees
or managing director after year end (2010: 40,000 at an exercise price of $1.28). to the date of this report 95,375
employee options have lapsed and no options have lapsed or been exercised by the managing director. 33,250 options
exercised prior to 30 june had shares issued on 5 july 2011, as disclosed in note 22(b). to the date of this report, 122,270
shares have been bought back on market at an average price of $1.31.
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.
P a g e 1 0 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 1
d i r e c t o r s ’ r ePo 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.
key manage me n t Pe r s onn el d is cl osures
(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
F Khouri
c Stone
(b) Information on directors
R e Bucknell FCA. chairman – non executive. age 70
Experience and expertise
chairman since inception in 1996. extensive experience in accounting and business management over
the past 47 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
900,000 ordinary shares in Fiducian Portfolio Services limited.
I Singh CFP, BTech, MComm (Bus), ASIA, ASFA, Dip. FP. managing director. age 62
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 22 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
9,939,580 ordinary shares in Fiducian Portfolio Services limited.
155,000 options for ordinary shares in Fiducian Portfolio Services limited.
F G Khouri B Bus, FCPA, FTIA independent non-executive director. age 56
Experience and expertise
appointed to the Board 6 july 2007. Public accountant, registered company auditor, financial planner and business adviser
since 1976 to small and medium enterprises, currently as a partner in the firm hG Khouri & associates.
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d
a c n 0 7 3 8 4 5 9 3 1 P a g e 1 1
d i r e c t o r s ’ r ePo r t c o n t i n u e d
key manage me nt Pe r so nn e l d i scl osu re s c o n tin ue d
(b) Information on director (continued)
Other current directorships
none
Former directorships in the last 3 years
none
Special responsibilities
member of the Board audit and remuneration committees.
Interest in shares and options
219,373 ordinary shares in Fiducian Portfolio Services limited.
7,374 options for ordinary shares in Fiducian Portfolio Services limited.
C H Stone B Comm/LLB, LLM, CA, ACIS independent non-executive director. age 52
Experience and expertise
appointed to the Board 3 march 2010. Practicing lawyer, holding senior legal and/or legal compliance roles in local and
global financial services organisations, with 21 years experience. currently head of compliance of State Street australia
limited, and has 8 years experience as a chartered accountant in taxation and superannuation matters.
Other current directorships
none
Former directorships in the last 3 years
none
Special responsibilities
member of the Board internal compliance committee.
Interest in shares and options
none
(c) Company secretary
the company secretary is mr i Singh cFP, m comm. (Bus), aSia, aSFa, dip. FP. mr Singh has been the company secretary
since inception in 1996, and is supported by legal counsel employed by Fiducian.
P a g e 1 2 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 1
d i r e c t o r s ’ r ePo r t c o n t i n u e d
key manage me nt Pe r so nn el d is cl osures c o ntin ue d
(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 2011, and the numbers of meetings attended by each director were:
FULL MeeTINGS OF DIReCTORS
MeeTINGS OF COMMITTeeS
Corporate
Trustee*
Audit
Internal
Invest-
Compliance ment
Remun-
ration
A
B
A
B
12 12 12 12
12 12 12 12
A
6
6
B
6
6
A
1
3
B
3
3
A
B
A B
*** ***
1
1
12 12
*** ***
12 12 12 12
6
6
*** *** *** ***
1 1
12 12 12 12
*** ***
3 3
*** *** *** ***
r e Bucknell
i Singh**
F Khouri
c Stone
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 4 of the 4 meetings held with the two independent members of the External Compliance and Risk Committee.
*** = Not a member of 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 2011.
(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 - 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 market practice for delivery of reward. the Board ensures that
executive reward satisfies the following key criteria for good reward governance practices:
• competitiveness and reasonableness
• acceptability to shareholders
• performance linkage / alignment of executive compensation
• transparency
• capital management.
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 ePo r t c o n t i n u e d
key manage me nt Pe r so nn el d is cl osures c o ntin ue d
A - Principles used to determine the nature and the amount of remuneration (continued)
(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. 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 august 2010. 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 business
placed with the Group may also receive remuneration as financial planners). 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 for them.
(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 august 2010.
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.
P a g e 1 4 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 1
d i r e c t o r s ’ r ePo r t c o n t i n u e d
key manage me nt Pe r so nn el d is cl osures c o ntin ue d
A - Principles used to determine the nature and the amount of remuneration (continued)
Benefits
executive benefits include death cover of $1 million and tPd/ trauma insurance cover of $0.5 million.
Short-term incentives
mr Singh is entitled to a discretionary cash performance bonus of up to 20% of his total package as assessed by
the remuneration committee against performance indicators and objectives set by the Board. it is limited to being
met within the budget or out of over-budget financial performance. as in previous years mr Singh has declined to
accept the entitlement that was 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
annual profit in excess of 15% and only after approval by shareholders in the company. mr Singh is not entitled to
receive options in respect of the 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
•
• F Khouri – Non-executive Director
• C Stone – 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 ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 ePo r t c o n t i n u e d
key manage me n t Pe r s onn el d is cl osures c o ntin ue d
B - Details of remuneration (continued)
Key management personnel of Fiducian Portfolio Services Limited and the Group
2011
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)
F Khouri (c)(d)
c Stone
Executive director
i Singh (e)
totals
$
128,100
47,511
45,897
444,827
666,335
$
-
-
-
-
-
$
$
$
$
$
-
-
-
-
-
-
4,201
4,206
18,276
26,683
-
-
-
-
-
-
128,100
-
-
-
-
51,712
50,103
463,103
693,018
(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) this excludes gross remuneration of $238,295 for financial planning paid to companies in which the director
has an interest.
(d) no adviser options were issued during the year to a company, in which mr Khouri is a shareholder and director in
his capacity as a financial planner.
(e) no options were issued to mr Singh in respect of the 2011 financial year.
2010
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)
c Stone
Executive director
i Singh (f)
totals
135,300
23,149
39,310
15,449
435,539
648,747
-
-
-
-
-
-
-
-
-
-
-
-
-
1,926
3,131
722
17,689
23,468
-
-
-
-
-
-
-
135,300
-
-
-
25,075
42,441
16,171
7,685
7,685
460,913
679,900
(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 remuneration of $237,212 for financial planning paid to companies in which the director has an interest.
(e) no adviser options were issued during the year to a company, in which mr Khouri is a shareholder and director in
his capacity as a financial planner.
(f) 40,000 options were issued to mr Singh in respect of the 2010 financial year. the calculated value is included above.
P a g e 1 6 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 1
d i r e c t o r s ’ r ePo r t c o n t i n u e d
key manage me nt Pe r so nn el d is cl osures c o ntin ue d
B - Details of remuneration (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 an receive an
induction pack of documents necessary for them to understand Fiducian’s policies, procedures, culture and ethical values to
enable new directors to carry out their 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.
2011
NAMe
i Singh
F Khouri*
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
215,000
(100,000)
40,000
-
-
-
-
-
155,000
115,000
-
-
* 7,374 Adviser options, issued in prior years, are held by an entity in which F Khouri has an interest.
2010
NAMe
i Singh
F Khouri*
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
215,000
-
-
-
-
-
-
-
215,000
215,000
-
-
*7,374 Adviser options, issued in prior years, 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 ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 ePo r t c o n t i n u e d
key manage me n t Pe r s onn el d is cl osures c o ntin ue d
D - Share-based compensation
(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.
2011
NAMe
i Singh
r e Bucknell
F Khouri
c Stone
2010
NAMe
i Singh
r e Bucknell
F Khouri
BALANCe AT THe
START OF THe yeAR
9,764,580
1,000,000
194,373
-
ReCeIveD DURING
THe yeAR ON THe
exeRCISe OF OPTIONS
100,000
-
-
-
OTHeR CHANGeS
DURING THe yeAR
BALANCe AT THe eND
OF THe yeAR
75,000
(100,000)
25,000
-
9,939,580
900,000
219,373
-
BALANCe AT THe
START OF THe yeAR
ReCeIveD DURING
THe yeAR ON THe
exeRCISe OF OPTIONS
OTHeR CHANGeS
DURING THe yeAR
BALANCe AT THe eND
OF THe yeAR
9,662,380
1,069,000
134,373
-
-
-
102,200
(69,000)
60,000
9,764,580
1,000,000
194,373
Shares provided on exercise of options
100,000 ordinary shares in the company were provided as a result of the exercise of remuneration options to a director
of Fiducian Portfolio Services limited and other key management personnel of the Group during the period (2010: nil).
no adviser options were exercised in an entity in which a director has an interest during the year (2010: nil).
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. other than a small increase of $10,000 in august 2010, there
having been no other increases in base salary over the prior 2 years in these tougher economic times. cash bonuses
and entitlements have not been granted or paid in the past 2 financial years and the grant of options entitlements have
been only in accordance with the incentive programs being 40,000 options in respect of the 2010 financial year only.
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 $1.50 for the options that vest in the 2012 financial year.
P a g e 1 8 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 1
d i r e c t o r s ’ r ePo r t c o n t i n u e d
key manage me n t Pe r s onn el d is cl osures c o ntin ue d
E - Additional information (continued)
CASH BONUS
OPTIONS
NAMe
i Singh
PAID
%
0%
0%
FORFeITeD
%
100%
100%
FINANCIAL
yeAR
GRANTeD
veSTeD
%
FORFeITeD
%
FINANCIAL
yeARS IN
wHICH
OPTIONS
veST
MINIMUM
TOTAL vALUe
OF GRANT
yeT TO veST
$
MAxIMUM
TOTAL vALUe
OF GRANT
yeT TO veST
$
2011
2010
0%
100%
0%
0%
n/a
2012
-
-
-
8,800
Share-based compensation: Performance based Options
Further details relating to options are set out below.
2011
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
$
0.00%
-
-
-
-
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.
2010
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
$
1.63%
7,685
-
-
7,685
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.
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.
Loans to directors
no loans were made to directors during the financial year (2010: nil).
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 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
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 ePo r t c o n t i n u e d
key manage me n t Pe r s onn el d is cl osures c o ntin ue d
E - Additional information (continued)
Other transactions with key management personnel (continued)
Financial Services Pty ltd. hawkesbury Financial Services Pty ltd places business with and receives remuneration from the
company for financial planning services. all transactions are on normal commercial terms and conditions.
a director, mr c Stone, was paid director’s fees for his personal contribution to the Board.
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
Financial planning remuneration paid and payable
Shares under option
CONSOLIDATeD
2011
$
2010
$
229,915
218,987
238,295
237,213
468,210
456,200
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 2011 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 current and previous directors: r e Bucknell,
i Singh, F Khouri, c Stone, other officers of Fiducian Portfolio Services limited and independent members of the external
compliance and investment committees, j evans, P emery and m devlin.
P a g e 2 0 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 1
d i r e c t o r s ’ r ePo r t c o n t i n u e 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.
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.
Auditor’s 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,
24 august 2011
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 ePe n d e n c e
d e c l a r a t i o n
Auditor’s Independence Declaration
As lead auditor for the audit of Fiducian Portfolio Services Limited for the year ended 30 June 2011, 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
26 August 2011
PricewaterhouseCoopers, ABN 52 780 433 757
Darling Park Tower 2, 201 Sussex Street, GPO BOX 2650, SYDNEY NSW 1171
DX 77 Sydney, Australia
T +61 2 8266 0000, F +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
P a g e 2 2 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 1
c o rPo 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 strategic guidance to the Group including contributing to the development of and approving the
corporate strategy.
reviewing and approving business plans, the annual budget and financial plans, including available resources and
capital expenditure initiatives.
• 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.
•
monitoring financial performance, including approval of the annual and half-year financial reports and liaison with
the company’s auditors.
• appointment, performance assessment and, if necessary, removal of the Managing Director
•
ratifying the appointment and /or removal and contributing to the performance assessment for the members of the
senior management team.
• ensuring there are effective management processes in place and approving major corporate initiatives.
• enhancing and protecting the reputation of the organisation.
•
ensuring that adequate disaster recovery and business continuity plans are regularly monitored, tested and results
reported.
•
overseeing the operation of the Group’s system for compliance and risk management reporting to shareholders.
•
balancing sometimes competing objectives in the best interests of the Group.
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 were directors of Fiducian Portfolio Services limited during the financial year:
Chairman (non-executive)
executive Managing Director
Non-executive directors
r Bucknell
i Singh
F Khouri
c Stone
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 ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 rPo 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 states:
• the Board is comprised of both an executive Director and a majority of non-executive directors, with a minimum of four
directors.
• non-executive directors bring a fresh perspective to the Board’s consideration of strategic, risk and performance matters.
• in recognition of the importance of independent views and the Board’s role in supervising the activities of management,
the majority of the Board must be independent of management and all directors are required to exercise independent
judgement and review and constructively challenge the performance of management.
• the Chairman is elected by the full Board and is required to meet regularly with the Managing Director.
• the company is to maintain a mix of directors on the Board from different backgrounds with complimentary skills and
experience.
• the Board is required to undertake an annual Board performance review and consider the appropriate mix of skills
required by the Board to maximise its effectiveness and its contribution to the Group.
the Board seeks to ensure that:
• at any point in time, its membership represents an appropriate balance between directors irrespective of gender 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,
and 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 on the following page:
P a g e 2 4 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 1
c o rPo 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)
• 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 Khouri has business dealings with the Group as disclosed in the Annual Report at the end of each financial year.
however, these are not of such a value or significance that adversely affect the director’s independence. he has declared
his interests in those dealings with the company and takes no part in decisions relating to them.
• Mr Stone has no business dealings with the Group either independently or through his employer.
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 may, 2011.
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.
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 rPo 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)
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 officer 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 officer attends and participates at the meetings.
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.
P a g e 2 6 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 1
c o rPo 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)
Share trading policy
the purchase and sale of company securities by directors and employees is detailed in a written policy statement on insider
and personal trading. this policy is discussed with and given to each new director or employee as part of the induction
process. each director and employee is required to sign an annual declaration confirming their compliance. Generally,
directors and employees are only allowed to buy or sell Fiducian securities during the six weeks immediately after the
release to the market of financial information or any other major statement that may affect the share price. the compliance
officer advises both directors and staff when such periods commence and conclude.
the 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 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
* On 22 August 2011, Mr Bucknell retired as Chairman of the Audit Committee and Mr Khouri was appointed as
the new Chairman.
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
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 rPo 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)
• 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.
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 in the 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 provides 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 that 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
P a g e 2 8 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 1
c o rPo 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)
business unit reports monthly, by exception, against the risk management Plan to the General counsel. 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.
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)
F Khouri
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 ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d
a c n 0 7 3 8 4 5 9 3 1 P a g e 2 9
sh 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 18 august 2011
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
1
24
6
8
2
1
42
92
351
126
128
27
29
753
there were no holders of a less than marketable parcel of ordinary shares.
B. equity securi ty ho ld e rs
Twenty largest quoted equity security holders.
the names of the twenty largest registered shareholders of quoted equity securities as at 18 august 2011, are listed below.
NAMe
NUMBeR HeLD
PeRCeNTAGe OF ISSUeD SHAReS
indyshri Singh Pty limited
national nominees limited
hSBc custody nominees (australia) limited
jP morgan nominees australia limited
norcad investments Pty ltd
hunter Place Services Pty ltd
mr inderjit Singh
d r Smith holdings Pty ltd
imperial Pacific Fund managers Pty ltd
1
2
3
4
5
6
7
8
9
10 mr erich Gustav Brosell
11
12
13
14 mr Walter Frederick holland
15
16
17
18
19
20
mr victor john Plummer
cogent nominees Pty ltd
Shrind investments Pty ltd
Perpetual trustees consolidated limited
Berne no 132 nominees Pty ltd (323723 a/c)
robcharta nominees (nSW) Pty ltd
citigroup nominees Pty limited
Bond Street custodians limited
imperial Pacific Fund managers Pty ltd
9,168,628
4,001,318
3,322,901
1,314,012
1,003,000
900,000
567,500
550,000
492,402
410,000
367,829
364,536
361,000
300,000
300,000
217,000
198,452
180,244
150,000
150,000
24,318,822
28.51
12.44
10.33
4.09
3.12
2.80
1.76
1.71
1.53
1.27
1.14
1.13
1.12
0.93
0.93
0.67
0.62
0.56
0.47
0.47
75.60
Unquoted equity securities
as at 18 august 2011:
TyPe OF SeCURITy
options – managing director
options – employees
options – Financial Planners
NUMBeR ON ISSUe
NUMBeR OF HOLDeRS
155,000
285,000
56,365
469,365
1
13
15
29
P a g e 3 0 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 1
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. suBs tanti al sh ar eho ld e r s
Substantial shareholders and associates as at 18 august 2011 (more than 5% of a class of shares) in the company are
set out below:
NAMe
indyshri Singh Pty limited and associates
national nominees limited
hSBc custody nominees (australia) limited
NUMBeR HeLD
PeRCeNTAGe
9,939,580
4,001,318
3,322,901
30.90%
12.44%
10.33%
d. voting r ig ht s
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 ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d
a c n 0 7 3 8 4 5 9 3 1 P a g e 3 1
P a g e 3 2 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 1
Financial
report
F i n a n c i a l r ePo r t
S t a t e m e n tS oF c o mPr e h e nSi v e i n c o m e
S t a t e m e n tS oF Fi n a n c i a l PoSi t i o n
S t a t e m e n tS oF c h a nGeS i n eQu i tY
S t a t e m e n tS oF c aSh Fl oW
no t eS t o t h e Fi n a n c i a l St a t e m e n tS
di r e c t o rS’ d e c l a r a t i o n
in d ePe n d e n t a u d i t o r ’S r ePo r t t o t h e m e mBe rS
3 4
3 5
3 6
3 7
3 8
7 8
7 9
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 24 august 2011.
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 ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d
a c n 0 7 3 8 4 5 9 3 1 P a g e 3 3
s t a t e m e n t s o f
c o mPr e h e n s i v e i n c o m e
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 1 1
NOTeS
CONSOLIDATeD
PAReNT eNTITy
revenue from ordinary activities
other income
remuneration paid to financial planners
employee benefits expense
depreciation and amortisation expense
other expenses
Profit before income tax expense
income tax expense
Profit for the year
4
5
6(a)
6(b)
7
24
2011
$’000
2010
$’000
2011
$’000
2010
$’000
23,886
22,830
21,045
19,932
608
(5,557)
(8,424)
(296)
441
(5,279)
(7,947)
(277)
517
(6,354)
(6,069)
(172)
403
(6,309)
(5,580)
(175)
(3,805)
(3,865)
(3,028)
(2,963)
6,392
(1,956)
5,903
(1,791)
5,939
(1,800)
5,308
(1,606)
4,436
4,112
4,139
3,702
Other comprehensive income for the full year, net of tax
-
-
-
-
Total comprehensive income for the year
4,436
4,112
4,139
3,702
earnings per share
33
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
13.78 cents 12.71 cents
13.44 cents 12.34 cents
The above statements of comprehensive income should be read in conjunction with the accompanying notes.
P a g e 3 4 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 1
s tat e m e n t s o f f i n a n c i a l Po s i t i o n
a s a t 3 0 j u n e 2 0 1 1
NOTeS
CONSOLIDATeD
PAReNT eNTITy
2011
$’000
2010
$’000
2011
$’000
2010
$’000
ASSeTS
Current assets
cash and cash equivalents
trade and other receivables
total current assets
Non-current assets
receivables
other financial assets
other financial assets at fair
value through profit or loss
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
10,150
2,698
12,848
9,478
2,600
12,078
8,332
4,590
7,128
3,905
12,922
11,033
2,275
-
425
377
881
5,624
9,582
2,310
-
440
166
755
4,283
7,954
22,430
20,032
2,782
836
3,618
142
-
709
851
2,157
393
2,550
44
-
655
699
2,275
3,875
2,310
3,875
425
328
626
232
440
113
555
340
7,761
20,683
7,633
18,666
2,380
763
3,143
-
-
517
517
1,759
271
2,030
-
-
494
494
4,469
17,961
3,249
16,783
3,660
17,023
2,524
16,142
7,827
247
9,887
7,847
342
8,594
7,827
247
8,949
7,847
342
7,953
17,961
16,783
17,023
16,142
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
28
29
The above statements of financial position should be read in conjunction with the accompanying notes.
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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
a s at 3 0 j u n e 2 0 1 1
Total equity at the beginning
of the financial year
Profit for the year
Other comprehensive income
NOTeS
CONSOLIDATeD
PAReNT eNTITy
2011
$’000
2010
$’000
2011
$’000
2010
$’000
16,783
15,128
16,142
14,897
4,436
4,112
4,139
3,702
-
-
-
-
Total comprehensive income for the year
4,436
4,112
4,139
3,702
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
341
(361)
65
(378)
341
(361)
65
(378)
(3,143)
(2,186)
(3,143)
(2,186)
(95)
42
(95)
42
total transactions with equity holders
(3,258)
(2,457)
(3,258)
(2,457)
Total equity at the end of the financial year
17,961
16,783
17,023
16,142
The above statements of changes in equity should be read in conjunction with the accompanying notes.
P a g e 3 6 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 1
s t a t e m e n t s o f c a s h f l oW
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 1 1
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, planners and staff)
investment in subsidiary
Payments in relation to acquisitions
distributions from related trust
repayment of loans by associates & planners
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
2011
$’000
2010
$’000
2011
$’000
2010
$’000
26,279
25,149
23,173
21,902
(20,131)
(19,169)
(17,914)
(17,522)
6,148
611
(1,639)
5,980
444
(1,588)
5,259
520
(1,379)
4,380
460
(1,486)
32
5,120
4,836
4,400
3,300
-
(55)
-
(39)
(73)
-
(1,013)
30
67
(284)
(205)
-
(387)
26
140
(187)
(73)
234
-
30
67
(279)
(205)
-
-
26
140
(11)
(1,273)
(668)
(21)
(89)
(85)
53
(378)
53
(85)
53
(378)
53
(3,143)
(2,186)
(3,143)
(2,186)
(3,175)
(2,511)
(3,175)
(2,511)
Net increase/decrease in cash held
672
1,657
1,204
700
cash and cash equivalents at the beginning
of the year
Cash and cash equivalents
at the end of year
9,478
7,821
7,128
6,428
9
10,150
9,478
8,332
7,128
The above statements of cash flow should be read in conjunction with the accompanying notes.
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 1 1
1 sum mary o f si gni fi c ant a cc o unt in g Pol ici es
the principal accounting policies adopted for the preparation of the financial report are set out below. these policies have
been consistently applied to all the years presented, unless otherwise stated. the financial report includes separate financial
statements for Fiducian Portfolio Services limited as an individual entity and the Group consisting of Fiducian Portfolio
Services limited and its subsidiaries.
(a) Basis of preparation
this general purpose financial report has been prepared in accordance with australian accounting Standards, australian
accounting interpretations, other authoritative pronouncements of the australian accounting Standards Board and the
Corporations Act 2001.
Compliance with IFRS
the financial report of Fiducian Portfolio Services limited also complies with international Financial reporting Standards
(iFrS) as issued by the international accounting Standards Board (iaSB).
Historical cost convention
the financial report has been prepared under the historical cost convention, as modified by the revaluation of financial
assets and liabilities at fair value through profit or loss.
Critical accounting estimates
the preparation of financial reports in conformity with australian accounting Standards (aaS) 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 report incorporates the assets and liabilities of all entities controlled by Fiducian Portfolio Services
limited (company or parent entity) as at 30 june 2011 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 report.
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.
(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 financial planner remuneration
revenues comprising trustee and management fees are recognised on an accruals basis. remuneration paid to
financial planners out of this revenue is recognised at the same time and on the same basis.
P a g e 3 8 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 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
f o r t h e y e a r e n d e d 3 0 j u n e 2 0 1 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 1 1
1 summary of si gn ifi ca nt a cc ount in g Po li ci es (con t in ue d)
(c) Revenue recognition (continued)
(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 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 reports. 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 statement of financial
position date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax
liability is settled.
deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases
of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not reverse in the foreseeable future.
deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. current tax assets and tax liabilities are
offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the
asset and settle the liability simultaneously.
current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.
Fiducian Portfolio Services limited and its australian wholly-owned operating entities have not formed a tax consolidated group.
(e) Operating leases
leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as
operating leases (note 29). Payments made under operating leases (net of any incentives received from the lessor) are
charged to the statement of comprehensive income on a straight-line basis over the period of the lease.
(f) Trustee company and Responsible entity
the company acts as a trustee of Fiducian Superannuation Service and responsible entity of Fiducian Funds (‘the trusts’).
the accounting policies adopted by the company in the preparation of the financial reports for the year ended 30 june
2011 reflect the fiduciary nature of the company’s responsibility for the assets and liabilities of the trusts. the financial
reports 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.
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 1 1
1
summar y of si gni fi c an t a cc ount i ng Pol ici es (co n tin u ed)
(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 statement of comprehensive income 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 statement of comprehensive income.
(j) Business combinations
the acquisition method of accounting is used to account for all business combinations, regardless of whether equity
instruments or other assets are acquired. the purchase consideration transferred for the acquisition of a subsidiary
comprises the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the acquiree.
the purchase consideration transferred also includes the fair value of any asset or liability resulting from a contingent
consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary.
acquisition-related costs are expensed as incurred. identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date.
the excess of the purchase consideration transferred, and the acquisition-date fair value over the fair value of the group’s
share of the net identifiable assets acquired, is recorded as goodwill. if those amounts are less than the fair value of the
net identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the difference is
recognised directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their
present value as at the date of exchange. the discount rate used is the entity’s incremental borrowing rate, being the rate
at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
contingent consideration is classified either as equity or a financial liability. amounts classified as a financial liability are
subsequently remeasured to fair value with changes in fair value recognised in profit or loss.
P a g e 4 0 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 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 1 1
1
summar y of si gn ifi ca n t a cc ount i n g Poli ci es (co n tin u ed)
(k) 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.
(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
statement of financial position date which are classified as non-current assets. loans and receivables are included in
receivables in the statement of financial position in notes 10 and 11.
(I) 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.
(m) 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 statement of comprehensive income 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(g).
Gains and losses on disposals are determined by comparing proceeds with carrying amount. these are included in the
statement of comprehensive income. 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.
(n) 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.
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 1 1
1
summar y of si gni fi c an t a cc ount i ng Pol ici es (co n tin u ed)
(n) Intangible assets (continued)
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.
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.
(o) 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.
(p) 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.
(q) 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. Personal/carers 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 financial planners via the two share option
plans. information relating to these schemes is set out in note 26.
P a g e 4 2 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 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 1 1
1 summary of si gn ifi ca nt a cc ount in g Po li ci es (con t in ue d)
(q) 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 such 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 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, the expected price volatility of
the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
(r) 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.
(s) 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.
(t) 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.
(u) 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 statement of financial position.
cash flows are presented on a gross basis. the GSt components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the ato, are presented as operating cash flow.
(v) 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 ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 1 1
1 sum mary o f si gni fi c ant a cc o unt in g Pol ici es (con t in ue d)
(w) New accounting standards and interpretations
certain new accounting standards and interpretations have been published that are not mandatory for 30 june 2011
reporting periods. the Group’s and the parent entity’s assessment of the impact of these new standards and interpretations
is set out below.
AASB 9 Financial Instruments and AASB 2009-11 Amendments to Australian Accounting Standards arising from
AASB 9 (effective from 1 January 2013)
aaSB 9 Financial instruments addresses the classification and measurement of financial assets and is likely to affect the
Group’s accounting for its financial assets. the standard is not applicable until 1 january 2013 but is available for early
adoption. the Group expects this to have limited impact on the financial statements.
Revised AASB 124 Related Party Disclosures and AASB 2009-12 Amendments to Australian Accounting Standards
(effective from 1 January 2011)
in december 2009 the aaSB issued a revised aaSB 124 related Party disclosures. it is effective for accounting periods
beginning on or after 1 january 2011 and must be applied retrospectively. the amendment removes the requirement
for government-related entities to disclose details of all transactions with the government and other government-
related entities and clarifies and simplifies the definition of a related party. the Group will apply the amended standard
from 1 july 2011. When the amendments are applied, the Group and the parent will need to disclose any transactions
between its subsidiaries and its associates. the impact will not be material as these transactions are currently reported
in note ar.
AASB 1053 Application of Tiers of Australian Accounting Standards and AASB 2010-2 Amendments to Australian
Accounting Standards arising from Reduced Disclosure Requirements (effective from 1 July 2013)
on 30 june 2010 the aaSB officially introduced a revised differential reporting framework in australia. under this
framework, a two-tier differential reporting regime applies to all entities that prepare general purpose financial
statements. Fiducian Portfolio Services limited is listed on the aSX and is not eligible to adopt the new australian
accounting Standards – reduced disclosure requirements. the two standards will therefore have no impact on the
financial statements of the entity.
AASB 2010-8 Amendments to Australian Accounting Standards – Deferred Tax: Recovery of Underlying Assets
(effective from 1 January 2012)
in december 2010, the aaSB amended aaSB 112 income taxes to provide a practical approach for measuring
deferred tax liabilities and deferred tax assets when investment property is measured using the fair value model. aaSB
112 requires the measurement of deferred tax assets or liabilities to reflect the tax consequences that would follow
from the way management expects to recover or settle the carrying amount of the relevant assets or liabilities, that
is through use or through sale. the amendment introduces a rebuttable presumption that investment property which
is measured at fair value is recovered entirely by sale. the Group will apply the amendment from 1 july 2012. it is
currently evaluating the impact of the amendment.
IFRS 13 Fair Value Measurement (effective 1 January 2013)
iFrS 13 was released in may 2011. the aaSB is expected to issue an equivalent australian standard shortly. iFrS 13
explains how to measure fair value and aims to enhance fair value disclosures. the Group has yet to determine which,
if any, of its current measurement techniques will have to change as a result of the new guidance. it is therefore not
possible to state the impact, if any, of the new rules on any of the amounts recognised in the financial statements.
however, application of the new standard will impact the type of information disclosed in the notes to the financial
statements. the Group does not intend to adopt the new standard before its operative date, which means that it
would be first applied in the annual reporting period ending 30 june 2014.
P a g e 4 4 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 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 1 1
2 critical a cc ou nt ing e st i ma t es a nd a ssumPti on s
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(n) . 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 investment or accounting portfolios have suffered any impairment, in
accordance with the accounting policy stated in note 1(n) . 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 the financial report.
(iii) valuation of illiquid unlisted unit trusts
investments in unlisted unit trusts are generally priced at the prevailing unit price issued by the manager. Where a unit trust
is frozen and redemptions are restricted the unit price issued by the manager may not reflect fair value of the underlying
investment.
in such cases management may determine that an additional provision is required to reflect a liquidity or valuation discount.
Such provisions are subjective as a result of limited information and therefore require a high degree of estimation.
3 segment inf o rm at ion
(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
(incorporating the operations of harold Bodinnar & associates Pty ltd and money & advice Pty ltd from 1 july 2010, and
millenium Financial Planning Pty ltd from 28 june 2011).
Accountancy Resource Services
the company provides accountancy resource services through its subsidiary, Fiducian Business Services Pty ltd. in june
2011 this entity acquired a business including a portfolio of accounting clients that will trade as Fiducian accountants and
Business advisers. no revenue has been recognised prior to 30 june 2011 from this business, which commenced trading in
july 2011.
Geographical segments
the Group operates in a single geographical segment, australia.
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 1 1
3 segment inf or mati on con tin ued
(b) Primary reporting – business segments
FUNDS
MANAGeMeNT
AND
ADMINISTRATION
FINANCIAL
PLANNING
INTeR-
SeGMeNT
eLIMINATIONS CONSOLIDATeD
$’000
$’000
$’000
$’000
2011
Sales to external customers
intersegment sales
total sales revenue
other revenue
total segment revenue
Profit from ordinary activities
before income tax expense
income tax (benefit)
Profit from ordinary activities
after income tax benefit
Segment assets
Segment liabilities
-
23,886
21,045
-
21,045
517
21,562
2,841
5,293
8,134
91
8,225
(5,293)
(5,293)
-
(5,293)
5,941
451
-
-
23,886
608
24,494
6,392
(1,956)
4,436
20,683
4,816
(3,069)
22,430
3,660
3,202
(2,393)
4,469
acquisitions of plant and equipment,
intangibles and other non-current segment assets
depreciation, amortisation and impairment
net cash inflow from operating activities
279
172
4,400
1,562
124
720
-
-
-
1,841
296
5,120
P a g e 4 6 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 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 1 1
3 segment inf o rm at ion con tin ued
(b) Primary reporting – business segments (continued)
FUNDS
MANAGeMeNT
AND
ADMINISTRATION
FINANCIAL
PLANNING
INTeR-
SeGMeNT
eLIMINATIONS CONSOLIDATeD
$’000
$’000
$’000
$’000
2010
Sales to external customers
intersegment sales
total sales revenue
other revenue
total segment revenue
Profit from ordinary activities
before income tax expense
income tax (benefit)
Profit from ordinary activities
after income tax expense
Segment assets
Segment liabilities
-
22,830
19,932
-
19,932
403
20,335
2,898
4,928
7,826
38
7,864
(4,928)
(4,928)
-
(4,928)
5,307
596
-
-
22,830
441
23,271
5,903
(1,791)
4,112
18,666
3,703
(2,337)
20,032
2,524
2,386
(1,661)
3,249
acquisitions of plant and equipment,
intangibles and other non-current segment assets
depreciation, amortisation and impairment
66
175
330
102
net cash inflow from operating activities
3,300
1,536
-
-
-
396
277
4,836
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 1 1
3 segment inf o rm at ion con tin ued
(c) Other segment information
(i) Segment revenue
(a) Sales between segments are carried out at arm’s length and are eliminated on consolidation. the revenue
from external parties reported to the board is measured in a manner consistent with that in the statements of
comprehensive income.
Segment revenue reconciles to total revenue from continuing operations as follows:
Total segment revenue
intersegment eliminations
Total revenue from continuing operations (Note 4)
CONSOLIDATeD
2011
$’000
2010
$’000
29,179
(5,293)
23,886
27,758
(4,928)
22,830
the entity is domiciled in australia. the amount of its revenue from external customers in australia is $23,886,000
(2010: $22,830,000).
(ii) EBITDA
the board assesses the performance of the operating segments based on the measures of profit contribution and eBitda.
a reconciliation of eBitda to operating profit before income tax is provided as follows:
eBitda
Finance costs
depreciation
amortisation
Profit before income tax from continuing operations
(iii) Segment assets
CONSOLIDATeD
2011
$’000
2010
$’000
6,691
(3)
(129)
(167)
6,392
6,182
(2)
(134)
(143)
5,903
the amounts provided to the board with respect to total assets are measured in a manner consistent with that of the
financial report. these assets are allocated based on the operations of the segment and the physical location of the asset.
all assets are located in australia.
(iv) Segment liabilities
the amounts provided to the board with respect to total liabilities are measured in a manner consistent with that of the
financial report. these liabilities are allocated based on the operations of the segment.
P a g e 4 8 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 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 1 1
4 revenue
From continuing operations
Sales revenue
Fees received
other
revenue from ordinary activities
5 other inco me
interest received/receivable
distributions from related trusts
NOTeS
CONSOLIDATeD
PAReNT eNTITy
2011
$’000
2010
$’000
2011
$’000
2010
$’000
23,381
22,390
20,523
19,970
505
440
522
(38)
23,886
22,830
21,045
19,932
Fair value gains/(losses) on financial assets
at fair value through profit or loss
13
6 exPense s
Profit before income tax includes the following specific expenses:
(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
(b) Other expenses
Other expenses
Professional services
Sales marketing and travel
rental expense relating to operating leases
Premises and equipment
communication and computing
Printing and stationery
auditors
doubtful debts
administration and other
27
611
3
(6)
608
60
60
16
69
151
236
-
296
146
600
709
123
697
178
407
19
926
444
53
(56)
441
64
64
16
70
127
213
-
277
148
623
647
139
827
157
395
(2)
931
520
3
(6)
517
48
48
16
66
42
124
-
172
127
498
391
75
577
141
397
-
822
406
53
(56)
403
48
48
16
69
42
127
-
175
131
511
378
73
570
123
385
(2)
794
3,805
3,865
3,028
2,963
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 1 1
7
inco me tax e xPe ns e
NOTeS
CONSOLIDATeD
PAReNT eNTITy
2011
$’000
2010
$’000
2011
$’000
2010
$’000
(a) Income tax expense
current tax
deferred tax
adjustments for current tax of prior periods
2,082
(126)
-
1,855
(63)
(1)
1,871
1,626
(71)
-
(14)
(6)
income tax expense
1,956
1,791
1,800
1,606
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
(126)
-
(126)
(51)
(12)
(63)
(71)
-
(71)
(2)
(12)
(14)
6,392
5,903
5,939
5,308
tax at the australian tax rate of 30%
1,918
1,771
1,782
1,592
tax effect of amounts which are not deductible
(taxable) in calculating taxable income:
entertainment
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)
12
26
12
9
10
8
10
10
1,956
1,792
1,800
1,612
-
(1)
-
(6)
1,956
1,791
1,800
1,606
-
-
-
-
-
-
-
-
(d) Tax consolidation legislation
Fiducian Portfolio Services limited and its australian wholly-owned operating entities have not formed a tax consolidated group.
P a g e 5 0 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 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 1 1
8 dividends
PAReNT eNTITy
2011
$’000
2010
$’000
Ordinary shares
Final ordinary franked dividend for the year ended 30 june 2010 of 4.75 cents
(2009: Fully franked 3.0 cents) per share paid on 15 September 2010.
1,532
973
interim ordinary fully franked dividend for the year ended 30 june 2011 of 5.0 cents
(2010: Fully franked 3.75 cents) per share paid on 18 march 2011.
total dividends paid in cash
1,611
1,213
3,143
2,186
the directors have declared the payment of a final fully franked dividend for the year ended 30 june 2011 in the amount
of 5.00 cents per ordinary share to be paid on shares registered on 8 September 2011 and payable on 22 September 2011.
Franked dividends
the franked portions of the final dividends recommended after 30 june 2011 will be franked out of existing franking
credits or out of franking credits arising from the payment of income tax for the year ending 30 june 2012.
Franking credits available for subsequent financial years
based on a tax rate of 30%
CONSOLIDATeD
PAReNT eNTITy
2011
$’000
2010
$’000
2011
$’000
2010
$’000
5,373
5,213
4,569
4,536
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 $689,000 (2010: $656,000).
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 1 1
9
current ass e ts – ca sh a nd c a sh equi va len ts
cash at bank and in hand
deposits securing bank guarantees
CONSOLIDATeD
PAReNT eNTITy
2011
$’000
9,998
152
10,150
2010
$’000
9,328
150
9,478
2011
$’000
8,210
122
8,332
2010
$’000
7,006
122
7,128
the Group’s and the parent entity’s exposure to interest rate risk is discussed in note 35.
10 current ass e ts – tr ad e , o th er rec ei vaBl es a n d PrePa y m en ts
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 11 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
-
-
1,965
1,846
242
35
100
447
2,789
(91)
2,698
(72)
-
(19)
(91)
212
24
125
465
2,672
(72)
2,600
(74)
-
2
(72)
1,966
1,946
253
24
5
405
4,599
(9)
4,590
(9)
-
-
(9)
1,343
1,821
212
24
53
461
3,914
(9)
3,905
(9)
-
-
(9)
at 30 june 2011, 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.
P a g e 5 2 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 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 1 1
11 non-cur re nt asse t s – rece ivaBl es
Business development loans*
loans to staff*
less: Provision for impairment of receivables
CONSOLIDATeD
2010
$’000
2011
$’000
PAReNT eNTITy
2010
$’000
2011
$’000
2,093
184
2,277
(2)
2,275
2,122
190
2,312
(2)
2,310
2,093
184
2,277
(2)
2,275
2,122
190
2,312
(2)
2,310
*Refer to Note 10 for the current portion of these receivables.
loans to staff members are granted for an initial term of 3 years, at commercial interest rates and secured. the board has
extended these terms.
(a) Impaired receivables and receivables past due
an amount of $2,000 (2010: $2,000) has been provided against one loan. other than this none of the non-current
receivables are impaired or past due.
(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
2011
2010
CARRyING
AMOUNT
FAIR vALUe
CARRyING
AMOUNT
FAIR vALUe
$’000
$’000
$’000
$’000
2,091
184
2,275
2,091
184
2,275
2,120
190
2,310
2,120
190
2,310
(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.
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 1 1
12 no n-curre nt asse t s – oth e r f i n an cia l asse t s
NAMe OF eNTITy
COUNTRy OF
INCORPORATION
CLASS OF
SHAReS
eQUITy
HOLDING
COST OF PAReNT
eNTITy’S INveSTMeNT
Fiducian Financial Services Pty ltd
australia
ordinary
Fiducian Financial Services Pty ltd
australia
ordinary
harold Bodinnar & associates Pty ltd
australia
ordinary
money & advice Pty ltd
australia
ordinary
100
100
100
100
total investment by parent entity
2011
$’000
3,763
10
97
5
3,875
2010
$’000
100
10
3,325
440
3,875
these financial assets are carried at cost, adjusting for the transfer of operations of harold Bodinnar & associates Pty ltd
and money & advice Pty ltd to Fiducian Financial Services Pty ltd.
13 no n-curre nt asse t s – oth e r f i n an cia l asse t s at f air v al u e
through Pro f i t or lo ss
Investment in unlisted unit trust
at beginning of year
capital distribution
revaluation - fair value gains / (losses)
at end of year
investment in related trust
CONSOLIDATeD
PAReNT eNTITy
2011
$’000
2010
$’000
2011
$’000
2010
$’000
440
(9)
(6)
425
425
506
(10)
(56)
440
440
440
(9)
(6)
425
425
506
(10)
(56)
440
440
Financial assets held at fair value through profit and loss comprise investments into a related Fiducian trust. at the year end
redemptions from this unlisted unit trust were frozen. unit prices continue to be issued by the respective managers of the
underlying unlisted unit trusts but as there is no trading following the redemption freeze estimation is required in order to
determine fair value. refer to assumptions in note 2(iii) for further details.
changes in fair values of these financial assets at fair value through profit or loss are recorded in other income in the
statement of comprehensive income. 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.
investments in other financial assets continue to remain illiquid and will be held to maturity. the parent entity continues
to receive income and capital distributions which are expected to continue over the life of the investment. it is valued at
current published prices at 30 june 2011 against the investment. reasonably possible shifts have been disclosed in
note 35(a).
P a g e 5 4 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 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 1 1
14 non-current assets – ProPerty, Plant and equiPment
Plant and equipment
Furniture, office equipment and computers
less: accumulated depreciation
CONSOLIDATeD
PAReNT eNTITy
2011
$’000
1,362
(985)
377
2010
$’000
1,128
(962)
166
2011
$’000
1,197
(869)
328
2010
$’000
918
(805)
113
Movements
reconciliation of the carrying amounts of each class of property, plant and equipment are set out below.
Consolidated
At 1 July 2009
cost or fair value
accumulated depreciation
net book amount
year ended 30 June 2010
opening net book amount
additions
disposals
depreciation / amortisation charge
closing net book amount
At 30 June 2010
cost or fair value
accumulated depreciation
net book amount
year ended 30 June 2011
opening net book amount
additions
disposals
depreciation / amortisation charge
closing net book amount
At 30 June 2011
cost or fair value
accumulated depreciation
net book amount
FURNITURe
AND OFFICe
eQUIPMeNT COMPUTeRS
LeASeHOLD
IMPROveMeNTS
$’000
$’000
$’000
TOTAL
$’000
412
(350)
62
62
32
(175)
150
69
269
(200)
69
69
6
(4)
(11)
60
271
(211)
60
338
(254)
84
84
155
(98)
(85)
56
395
(339)
56
56
278
(46)
(4)
292
627
(335)
292
465
(410)
55
1,215
(1,014)
201
55
-
-
(14)
41
465
(424)
41
41
-
-
(16)
25
465
(440)
25
201
187
(273)
51
166
1,219
(963)
166
166
284
(50)
(23)
377
1,363
(986)
377
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 1 1
14 non-current assets – ProPerty, Plant and equiPment continued
Parent entity
At 1 July 2009
cost or fair value
accumulated depreciation
net book amount
year ended 30 June 2010
opening net book amount
additions
depreciation / amortisation charge
closing net book amount
At 30 June 2010
cost or fair value
accumulated depreciation
net book amount
year ended 30 June 2011
opening net book amount
additions
depreciation / amortisation charge
closing net book amount
At 30 June 2011
cost or fair value
accumulated depreciation
net book amount
FURNITURe
AND OFFICe
eQUIPMeNT COMPUTeRS
LeASeHOLD
IMPROveMeNTS
$’000
$’000
$’000
TOTAL
$’000
173
(128)
45
45
3
(15)
33
176
(143)
33
33
1
(13)
21
177
(156)
21
270
(204)
66
66
8
(34)
40
278
(238)
40
40
278
(35)
283
556
(273)
283
465
(410)
55
55
-
(15)
40
465
(425)
40
40
-
(16)
24
465
(441)
24
908
(742)
166
166
11
(64)
113
919
(806)
113
113
279
(64)
328
1,198
(870)
328
P a g e 5 6 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 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 1 1
15 n on-cur r e nt as se t s – def er red ta x a ssets
NOTeS
CONSOLIDATeD
PAReNT eNTITy
2011
$’000
2010
$’000
2011
$’000
2010
$’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 statement of income
7
closing balance at 30 june
deferred tax assets likely to be recovered within 12 months
deferred tax likely to be recovered after 12 months
27
479
15
40
109
22
189
881
755
126
881
561
320
881
22
440
18
8
106
18
143
755
704
51
755
488
267
755
3
346
15
40
109
22
91
626
555
71
626
404
222
626
3
329
18
3
106
18
78
555
553
2
555
353
202
555
16 non-curr e nt a ss e ts – in t a n g iBle a sset s
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
5,632
(5,514)
118
5,632
(5,446)
186
5,614
(5,497)
117
5,614
(5,431)
183
2,936
(629)
2,307
3,663
(464)
3,199
5,624
1,379
(481)
898
3,663
(464)
3,199
4,283
418
(303)
115
-
-
-
418
(261)
157
-
-
-
232
340
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 1 1
16 n on-cur r e nt as se t s – in ta n g iBl e a s sets c o n tin ue d
(a) Movements
movements in each category are set out below:
CONSOLIDATeD
ACQUISITION
OF CLIeNT
GOODwILL
ON
PORTFOLIOS ACQUISITION
CAPITALISeD
COMPUTeR
SOFTwARe*
$’000
$’000
$’000
At 1 July 2009
cost
accumulated amortisation and impairment
net book amount
year ended 30 June 2010
opening net book amount
additions
impairment charge
amortisation charge
closing net book amount
At 30 June 2010
cost
accumulated amortisation and impairment
net book amount
year ended 30 June 2011
opening net book amount
additions
amortisation charge**
closing net book amount
At 30 June 2011
cost
accumulated amortisation and impairment
net book amount
1,225
(354)
871
871
154
-
(127)
898
1,379
(481)
898
898
1,557
(148)
2,307
2,936
(629)
2,307
3,663
(464)
3,199
3,199
-
-
-
3,199
3,663
(464)
3,199
3,199
-
-
3,199
3,663
(464)
3,199
TOTAL
$’000
10,465
(6,181)
4,284
4,284
209
(13)
(197)
4,283
5,577
(5,363)
214
214
55
(13)
(70)
186
5,632
(5,446)
186
10,674
(6,391)
4,283
186
-
(68)
118
4,283
1,557
(216)
5,624
5,632
(5,514)
118
12,231
(6,607)
5,624
* Capitalised computer software costs includes an internally generated intangible asset. The assets in this category have been amortised on
the basis of a 5 year useful life.
** Amortisation of $216,000 (2010: $197,000) is included in depreciation, amortisation and impairment expense in the statement of
comprehensive income.
P a g e 5 8 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 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 1 1
16 no n-cu rr e nt as se t s – i nta ng iBl e a sse ts 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
changes in assumptions made in the assessment of impairment of goodwill relate to updating the earnings multiple used
to estimate sustainable revenues. these assumptions are compared to market each year and adjusted appropriately. refer
to note 2 for details.
(d) Impairment charge
there has been no impairment charge recorded against goodwill during the financial year ended 30 june 2011 (2010: nil).
(e) Business Acquisitions
Summary of acquisitions.
during the year the Group made the following three acquisitions:
ACQUISITION
FINANCIAL PLANNING
ACCOUNTING
CLIeNT PORTFOLIO
FIDUCIAN eNTITy
FIDUCIAN FINANCIAL
SeRvICeS
FIDUCIAN BUSINeSS
SeRvICeS
FIDUCIAN FINANCIAL
SeRvICeS
date Purchased
27 june 2011
17 may 2011
9 February 2011
Share capital, client
portfolio, trademark,
software
client portfolio,
software
client portfolio
Yes
Yes
no
$667,196
$433,677
$233,519
$570,000
$285,000
$285,000
$303,148
$197,304
$105,844
100%
100%
100%
Business combination
Business combination
asset only
vendor staff employed
by Group
maximum purchase price
Paid by 30 june 2011
deferred consideration at
30 june 2011
value attributed on the
Statement of Financial
Position at 30 june 2011
Business combination or
asset only
the acquired businesses contributed nominal revenue and profits to the group at balance date. if they were acquired at
the beginning of the year on 1 july 2010, management estimate a maximum revenue impact of $900,000 for the year
ended 30 june 2011. it is not practicable to estimate the profit contribution given the significant change in cost basis to the
operation of the business once within the Fiducian Group.
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 1 1
17 cu rrent li aBi li tie s – tr ade a n d o th er Pa yaBles
trade payables
other payables
amounts due to related entities
client portfolio deferred settlement
annual leave entitlements accrued
CONSOLIDATeD
PAReNT eNTITy
2011
$’000
972
469
-
490
851
2,782
2010
$’000
822
487
-
44
804
2,157
2011
$’000
983
373
168
234
622
2,380
2010
$’000
819
299
47
-
594
1,759
information about the Group’s and the parent entity’s exposure to credit and interest rate risk is shown in note 35.
18 cu rrent li aBi li tie s – cu r r en t t a x l i aBi li t i es
income tax
836
393
763
271
19 no n cur r e nt li aBi lit ie s – tr a de a nd ot h er Pa y aBles
client portfolio deferred settlement
142
44
-
-
20 no n-cur r e nt li aBi lit ie s – def err ed ta x li aBi l i ti es
NOTeS
CONSOLIDATeD
PAReNT eNTITy
2011
$’000
2010
$’000
2011
$’000
2010
$’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 statement of income
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)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12
(12)
-
-
-
-
P a g e 6 0 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 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 1 1
21 no n-cur r e nt li aBi lit ie s – P ro vi si on s
CONSOLIDATeD
2010
$’000
2011
$’000
PAReNT eNTITy
2010
$’000
2011
$’000
employee benefits – long service leave
709
655
517
494
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 material amounts are expected to be settled within the next 12 months.
22 co ntriBute d e q u ity
(a) Share capital
ordinary shares – fully paid
(b) Movements in ordinary share capital
7,827
7,847
7,827
7,847
DATe
1 july 2009
30 june 2010
DeTAILS
NUMBeR OF SHAReS
AveRAGe PRICe
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
Shares bought back on-market prior to 30 june
and cancelled on 5 july 2011
Buy-back transaction costs
current tax credit recognised directly in equity
options exercised and issued
options exercised prior to 30 june and shares
issued on 5 july 2011
transfer from share-based payments reserve
32,394,037
(261,015)
$1.44
75,225
$0.70
32,208,247
(171,155)
(87,074)
$1.39
$1.38
181,403
$1.10
33,250
$1.29
30 june 2011
Balance
32,164,671
$’000
8,160
(377)
(1)
-
53
12
7,847
(239)
(121)
(1)
-
200
43
98
7,827
(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 2010 and june 2011 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 9 june 2011. during the
financial year the shares were acquired at an average price of $1.39 per share, with prices ranging from $1.20 to $1.66.
the net cost of $359,114, and $1,077 of transaction costs, was deducted from equity.
at 30 june 2011, 475,087 shares remained available to be repurchased under the most recently announced buy back
notice to the aSX.
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 1 1
(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, to continue to meet externally imposed capital requirements of aPra and aSic under their responsible
Superannuation entity (rSe) licence and their australian Financial Services (aFS) licence respectively, and to continue to
provide returns to shareholders and benefits for other stakeholders.
in order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders,
return capital to shareholders via an on-market share buy back, or issue new shares upon exercise of outstanding options.
there has been no borrowing to maintain capital adequacy.
the externally imposed requirements are:
a.
under its aFS licence, the parent entity must maintain net tangible assets (nta) - as defined in the licence -
of $5,000,000; and
b. under its rSe licence, the rSe must maintain $100,000 cash at all times.
the requirement under the rSe licence is maintained by placing cash on deposit with an adi. the requirement under the
aFS licence is monitored monthly when management accounts are prepared, and is reported to the Board monthly and the
external compliance & risk committee at each meeting.
the average nta margin throughout the year over the requirement of $5,000,000 is $5,040,000 (2010: $4,890,000).
23 reserve s
Movements
Share based payments reserve
Balance 1 july
option expense
transfer to share capital (options exercised)
Balance 30 june
NOTeS
CONSOLIDATeD
PAReNT eNTITy
2011
$’000
2010
$’000
2011
$’000
2010
$’000
342
3
(98)
247
300
54
(12)
342
342
3
(98)
247
300
54
(12)
342
the share based payments reserve is used to recognise the fair value of options issued but not exercised.
24 retained Pr o fi 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
8,594
4,436
-
(3,143)
9,887
6,668
4,112
-
(2,186)
8,594
7,953
4,139
-
(3,143)
8,949
6,437
3,702
-
(2,186)
7,953
8
P a g e 6 2 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 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 1 1
25 key manage me nt Pe rs on nel d is cl osur es
(a) Key management personnel compensation
Short-term employee benefits
Post employment benefits
Share-based payments
CONSOLIDATeD
PAReNT eNTITy
2011
$
2010
$
2011
$
2010
$
666,335
648,747
666,335
648,747
26,683
-
23,468
7,685
26,683
-
23,468
7,685
693,018
679,900
693,018
679,900
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.
2011
NAMe
i Singh*
F Khouri**
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
215,000
(100,000)
40,000
-
-
-
-
-
155,000
115,000
-
-
* * No options are proposed to be issued in accordance with Mr Singh’s employment contract after the end of the year.
** 7,374 Adviser options issued in prior years are held by an entity in which F Khouri has an interest.
2010
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**
215,000
-
-
-
-
-
-
-
215,000
215,000
-
-
* 40,000 options were proposed to be issued in accordance with Mr Singh’s employment contract after the end of the year.
** 7,374 Adviser options issued in prior years are held by an entity in which F Khouri has an interest.
(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.
2011
NAMe
i Singh
r e Bucknell
F Khouri
c Stone
BALANCe AT THe
START OF THe yeAR
ReCeIveD DURING
THe yeAR ON THe
exeRCISe OF OPTIONS
OTHeR CHANGeS
DURING THe yeAR
BALANCe AT THe eND
OF THe yeAR
9,764,580
1,000,000
134,373
-
100,000
-
-
-
75,000
(100,000)
25,000
-
9,939,580
9,00,000
219,373
-
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 1 1
2010
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 OPTIONS
OTHeR CHANGeS
DURING THe yeAR
BALANCe AT THe eND
OF THe yeAR
9,662,380
1,069,000
-
134,373
-
-
-
-
102,200
69,000
-
60,000
9,764,580
1,000,000
-
194,373
Shares provided on exercise of options
100,000 ordinary shares in the company were provided as a result of the exercise of remuneration options to the managing
director of Fiducian Portfolio Services limited, as key management person of the Group, during the period (2010: nil).
entities with which a director has an interest exercised no adviser options during the year (2010: nil). no amounts are
unpaid on any shares issued on the exercise of options.
(c) Loans to directors
no loans were made to directors during the financial year (2010: 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 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 financial planning
remuneration from the Group. all transactions are on normal commercial terms and conditions.
a director, mr c Stone, was paid director’s fees for his personal contribution to the Board.
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
Financial planning fees paid or payable
Shares under option
CONSOLIDATeD
2011
$
2010
$
229,915
218,987
238,295
237,213
468,210
456,200
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 2011 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.
P a g e 6 4 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 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 1 1
26 share Ba se d Pa yme n ts
(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% vest 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 no options (2010: nil) to staff during the year, and 108,000 options expired (2010: nil) during the year ended
30 june 2011.
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
(2010: 40,000 options at an exercise price of $1.28) to the executive director in respect of the year ended 30 june 2011.
(b) Adviser share option plan (ASOP)
the parent entity has established the aSoP, which is designed to provide incentives to financial planning 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 financial planning 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 a planning 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 has not been extended beyond
june 2011. options were granted for no consideration. the total adviser options and preference shares issued since
inception total 6,847,517.
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 1 1
26 share Base d Payme nts c o ntin 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
GRANTeD
PRICe
yeAR
yeAR
FORFeITeD BALANCe AT
eND OF THe
yeAR
DURING THe
yeAR
NUMBeR
NUMBeR
NUMBeR
NUMBeR
NUMBeR
veSTeD AND
exeRCISABLe
AT eND OF
THe yeAR
NUMBeR
Consolidated and parent entity – 2011
ESOP – Managing Director – Note 26(a)
26 oct 2006
26 oct 2011
$1.29
30 oct 2007
30 oct 2012
$2.65
29 oct 2008
29 oct 2013
$2.30
100,000
100,000
15,000
-
-
-
29 oct 2010
29 oct 2015
$1.28
-
40,000
(100,000)
-
-
-
215,000
40,000
(100,000)
-
-
-
-
-
-
-
100,000
100,000
15,000
40,000
15,000
155,000
115,000
ESOP – Staff – Note 26(a)
3 jul 2006
3 jul 2011
$1.29
31 jul 2007
31 jul 2012
$2.65
27 aug 2008
27 aug 2013
$2.30
ASOP – Advisers – Note 26(b)
23 aug 2005
23 aug 2010
$0.87
29 aug 2006
29 aug 2011
$1.68
30 Sept 2007
30 Sept 2012
$3.45
30 Sept 2008
30 Sept 2013
$2.70
131,625
130,000
260,000
521,625
81,403
10,067
24,842
31,900
148,212
-
-
-
-
-
-
-
-
-
(33,250)
(3,000)
95,375
95,375
-
-
-
130,000
130,000
(105,000)
155,000
124,000
(33,250)
(108,000)
380,375
349,375
(81,403)
-
-
-
-
-
(2,744)
7,323
(2,800)
22,042
(4,900)
27,000
-
7,323
22,042
-
(81,403)
(10,444)
56,365
29,365
total
884,837
40,000
(214,653)
(118,444
591,740
493,740
Weighted average exercise price
$2.03
$1.28
$1.13
$2.30
$2.26
$2.31
the weighted average share price at the date of exercise of options exercised during the year ended 30 june 2011 was
$1.30 (2010 – $1.50).
the volume weighted average remaining contractual life of share options outstanding at the end of the period was
1.53 years (2010 – 2.06 years).
P a g e 6 6 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 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 1 1
26 share Ba se d Pa yme n ts co n tin ued
GRANT
DATe
exPIRy
DATe
BALANCe AT
exeRCISeD
exeRCISe START OF THe DURING THe DURING THe
yeAR
GRANTeD
PRICe
yeAR
yeAR
FORFeITeD BALANCe AT
eND OF THe
yeAR
DURING THe
yeAR
NUMBeR
NUMBeR
NUMBeR
NUMBeR
NUMBeR
veSTeD AND
exeRCISABLe
AT eND OF
THe yeAR
NUMBeR
Consolidated and parent entity – 2010
ESOP – Managing Director – Note 26(a)
26 oct 2006
26 oct 2011
$1.29
30 oct 2007
30 oct 2012
$2.65
29 oct 2008
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
$1.29
31 jul 2007
31 jul 2012
$2.65
27 aug 2008
27 aug 2013
$2.30
ASOP – Advisers – Note 26(b)
23 aug 2005
23 aug 2010
$0.87
29 aug 2006
29 aug 2011
$1.68
30 Sept 2007
30 Sept 2012
$3.45
30 Sept 2008
30 Sept 2013
$2.70
total
100,000
100,000
15,000
200,000
27,000
33,400
133,250
130,000
260,000
583,650
94,603
58,567
25,330
31,900
210,400
1,009,050
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100,000
100,000
100,000
100,000
15,000
15,000
215,000
215,000
-
-
-
-
131,625
131,625
130,000
104,000
260,000
91,000
521,625
326,625
-
-
-
-
(27,000)
(33,400)
(1,625)
-
-
(62,025)
(13,200)
-
-
-
-
-
-
-
-
-
-
-
81,403
-
-
-
(48,500)
10,067
(488)
24,842
-
31,900
81,403
10,067
-
-
(13,200)
(48,988)
148,212
91,470
(75,225)
(48,988)
884,837
633,095
Weighted average exercise price
$1.92
$0.00
$0.70
$1.70
$2.03
$1.85
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 1 1
26 share Base d Payme nts c o ntin ue d
Fair value of options granted
40,000 options were issued to the managing director during the year ended 30 june 2011 in respect of the prior year.
the assessed fair value at grant date of the options granted during the year ended 30 june 2010 was 19 cents per option.
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.
options are granted for no consideration, have a five year life , and each tranche vests and is exercisable progressively
after 1 year.
the model inputs for options granted during the year ended 30 june 2011 included:
eSOP – DIReCTOR
2010
2011
eSOP – eMPLOyeeS
2010
2011
eSOP – ADvISeRS
2011
2010
(a) exercise price
(b) grant date:
(c) expiry date:
$1.28
27 oct 2010
29 oct 2015
(d) share price at grant date:
$1.41
(e) expected price volatility of
the company’s shares:
(f) expected dividend yield:
(g) risk-free interest rate:
(h) lapse (exit) rate
36%
5.7%
4.5%
0%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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
2011
$
2010
$
2011
$
2010
$
options issued under eSoP, net of lapses
2,663
53,276
2,663
53,276
P a g e 6 8 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 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 1 1
27 remu nera ti o n of au d it or s
during the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related
practices and non-related audit firms:
CONSOLIDATeD
PAReNT eNTITy
2011
$
2010
$
2011
$
2010
$
(a) Audit services
Pricewaterhousecoopers australian firm:
audit and review of financial reports
107,470
114,000
97,470
104,000
other audit related work, including audit of
entities for which the parent entity is trustee,
manager or responsible entity (gross of any
amounts reimbursed)
(b) Non-audit services
Pricewaterhousecoopers australian firm:
non audit-related services
total remuneration
299,680
281,300
299,680
281,300
-
-
-
-
407,150
395,300
397,150
385,300
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 contingen t liaBili ti e s
the parent entity and Group had contingent liabilities at 30 june 2011 in respect of:
(a) bank guarantees for property leases of parent and group entities amounting to $426,000. (2010: $567,000).
(b) bank guarantee for aFS licence of a subsidiary amounting to $20,000 (2010: $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 planners, 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 planner, 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.
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 1 1
29 co mmitme nts f or e xPe n d it ur e
(a) Capital expenditure
commitments payable within one year
-
-
-
-
CONSOLIDATeD
PAReNT eNTITy
2011
$’000
2010
$’000
2011
$’000
2010
$’000
(b) Operating leases
the Group leases various offices under non-cancellable
operating leases expiring within 12 months to four 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
448
715
1,163
358
1,338
1,696
679
345
1,024
358
1,332
1,690
30 related Par ty t ransac ti on s
(a) Parent entity
the parent entity within the Group is Fiducian Portfolio Services limited.
(b) Subsidiaries
interests in subsidiaries are set out in note 12.
the consolidated financial report 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 2011 and 2010 consisted of:
a. Financial planning fees 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 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.
P a g e 7 0 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 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 1 1
30 related Par ty t ransac ti on s c o n tin ue d
(d) Transactions with related parties (continued)
the following transactions occurred with related parties:
OwNeRSHIP
INTeReST*
2011
$
2010
$
2011
$
2010
$
CONSOLIDATeD
PAReNT eNTITy
wholly owned group
Fiducian Financial Services Pty ltd
Financial planning fees paid
Expenses paid and systems costs recovered
harold Bodinnar & associates Pty ltd
Financial planning fees paid
Management fees and marketing incentive
money & advice Pty ltd
Financial planning fees paid
Expenses paid and systems costs recovered
Fiducian Business Services Pty ltd
Capital for accountants acquistion
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
Financial planning fees paid
100%
100%
100%
100%
nil
nil
nil
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,128,397
178,222
2,833,808
376,684
-
-
-
-
2,004,548
245,453
89,343
264,470
313,500
-
4,076,775
4,200,166
4,076,775
4,200,166
12,745,279 12,417,159
12,745,279 12,417,159
3,593,587
3,344,955
3,593,587
3,344,955
238,295
237,212
-
-
* ‘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 ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 1 1
30 related Par t y transact i on s c o ntin 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 receivables (income from related trusts)
current payables (purchases of goods and services)
PAReNT eNTITy
2011
$
2010
$
1,965,587
1,342,895
1,845,890
1,821,241
3,811,477
3,164,136
168,047
46,435
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 eco nomic d ePe 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 reconcili at i on of Pro f i t or lo ss a f ter i n com e ta x t o n et
cas h inf loW f ro m oPe r at in g a ct i vit i es
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
2011
$’000
4,436
37
(3)
296
2
(103)
443
6
150
(18)
-
(126)
-
5,120
2010
$’000
4,112
218
(53)
277
165
(168)
266
56
61
(35)
-
(51)
(12)
2011
$’000
4,139
(32)
(3)
172
9
(48)
492
6
164
74
(502)
(71)
-
2010
$’000
3,702
122
(53)
175
10
(230)
134
56
97
(56)
(643)
(2)
(12)
4,836
4,400
3,300
P a g e 7 2 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 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 1 1
33 earning s Pe r sh ar 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
2011
2010
13.78 cents 12.71 cents
13.44 cents 12.34 cents
CONSOLIDATeD
2011
NUMBeR
2010
NUMBeR
32,183,956 32,351,179
817,743
959,693
33,001,699 33,310,872
(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
2011
$’000
4,436
2010
$’000
4,112
(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 ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li 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 1 1
34 events oc cu rr ing af t e r Ba l a n ce da t e / r ePor t in g dat e
under the rules of the adviser Share option Plan no options are being issued this year (2010: nil) as the plan has not been
extended. under the same rules 330 options will expire after year end.
under the rules of the employee and director Share option Plan the directors have not granted any options to employees
or managing director after year end (2010: 40,000 at an exercise price of $1.28). to the date of this report 95,375
employee options have lapsed and no options have lapsed or been exercised by the managing director. 33,250 options
exercised prior to 30 june had shares issued on 5 july 2011, as disclosed in note 22(b). to the date of this report, 122,270
shares have been bought back on market at an average price of $1.31.
35 fin anci al ri sk manage m en t
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
2011
$’000
2010
$’000
2011
$’000
2010
$’000
10,150
4,973
425
9,478
4,910
440
8,332
6,865
425
7,128
6,215
440
15,548
14,828
15,622
13,783
2,924
2,201
2,380
1,759
P a g e 7 4 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 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 1 1
35 financial r is k m ana g e ment 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 statement of financial position at fair value through profit or loss, and (b)
from the derivation of fees for the management of investment and superannuation funds.
Price risk on unlisted investments is discussed in note 13 and sensitivity analysis is conducted on the upper range of outcomes
of -10%. it is unlikely this investment will increase in value.
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 planners. 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% (2010: – 10%) against actual market movements, with all other variables held constant
other than financial planning fees that are paid out of such income.
revenue impact from -10% movement in
valuation of unlisted unit trusts
revenue impact from +/- 10% movement in
funds under administration and management
(iii) Interest rate risk
IMPACT ON POST-TAx PROFIT
IMPACT ON eQUITy
2011
$’000
2010
$’000
2011
$’000
2010
$’000
(43)
(44)
(43)
(44)
1,754
1,681
1,754
1,681
the Group’s main interest rate risk arises from deposits in australian dollars, and short term loans to staff and planners.
the group has no borrowings.
30 JUNe 2011
30 JUNe 2010
weighted average
interest rate
%
cash at bank and on deposit
Staff & financial planner loans
4.3%
7.2%
Balance
$’000
10,150
2,552
12,702
weighted average
interest rate
%
4.1%
6.9%
Balance
$’000
9,478
2,546
12,024
Bank deposits are at call and staff and planner loans have terms extending between 1 and 7 years, and may be repayable
sooner in certain circumstances. interest rates are reviewed and adjusted at least quarterly.
the Group’s main interest rate risk arises from cash and cash equivalents with variable interest rates. at 30 june 2011 if
interest rates change by +/- 100 basis points (2010: +/- 100 basis points) from the year end rates with all other variables
held constant, post-tax profit would have been $89,000 higher or lower (2010: $84,000).
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d
a c n 0 7 3 8 4 5 9 3 1 P a g e 7 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 1 1
35 financial r is k m ana g e ment c o n tin ue d
(b) Credit risk
the Group and parent entity have negligible credit risk from receivables, as management fee and financial planning income
is received within one month of it falling due, and financial planning fees 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
aa-
investment in related trust
unrated
loans to staff and financial planners
unrated
CONSOLIDATeD
PAReNT eNTITy
2011
$’000
2010
$’000
2011
$’000
2010
$’000
4,596
5,554
10,150
9,478
-
9,478
2,778
5,554
8,332
7,128
-
7,128
425
440
425
440
2,275
2,310
2,275
2,310
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
2,782
142
2,924
2,157
44
2,201
2,380
-
2,380
1,759
-
1,759
the fair value of financial assets and financial liabilities must be estimated for recognition and measurements or for
disclosure purposes.
as of 1 july 2009, Fiducian Portfolio Services ltd has adopted the amendment to aaSB 7 Financial instruments: disclosures
which requires disclosure of fair value measurements by levels of the following fair value measurement hierarchy:
(a) quoted prices (unadjusted) in active markets for identical assets or liabilities (level1)
(b) inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as
prices) or indirectly (derived from prices) (level 2), and
(c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3)
P a g e 7 6 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 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 1 1
35 finan ci al ri sk m ana ge m en t c o ntin ue d
(d) Fair value estimation (continued)
the following table presents the group’s and the parent entity’s assets and liabilities measured and recognised at fair value
according to the fair value hierarchy at 30 june 2011.
Parent and Group - at 30 June 2011
assets
other financial assets at fair value through
profit or loss
investment in related trust
total assets
Parent and Group - at 30 June 2010
assets
other financial assets at fair value through
profit or loss
investment in related trust
total assets
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
-
-
-
-
425
425
425
425
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
-
-
-
-
440
440
440
440
the fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and
available-for-sale securities) is based on quoted market prices at the end of the reporting period. the quoted market price
used for financial assets held by the Group is the current bid price. these instruments are included in level 1. the Group
holds none of these investments.
the fair value of financial instruments that are not traded in an active market (for example, debt investments and derivative
financial instruments) is determined using valuation techniques. these instruments are included in level 2. the Group held
none of these investments during the year.
in the circumstances where a valuation technique for these instruments is based on significant unobservable inputs, such
instruments are included in level 3. the Group’s accounting policy is to value the investment in related trust at fair value
through profit or loss, made difficult as a result of a redemption freeze. the Group has performed a review at 30 june 2011
which focussed on directional movements in the credit quality of the investments held by the underlying fund managers
since the prior year, as well as monitoring the underlying funds for indicators of impairment. From this review the Group
believes the value recorded represents fair value, with reasonably possible changes in fair value shown in note 35(a)(ii).
the following table presents the changes in level 3 instruments for the year ended 30 june 2011:
Parent and Group
investment in related trust –
opening balance
transfers in to level 3
capital distribution
losses recognised in profit or loss
2011
$’000
2010
$’000
440
-
(9)
(6)
425
506
-
(10)
(56)
440
the carrying amounts 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.
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d
a c n 0 7 3 8 4 5 9 3 1 P a g e 7 7
di 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 33 to 77 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 2011 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.
note 1(a) confirms that the financial statements also comply with international Financial reporting Standards as issued by
the international accounting Standards Board.
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,
24 august 2011
P a g e 7 8 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 1
Independent auditor’s report to the members of
Fiducian Portfolio Services Limited
Report on the financial report
We have audited the accompanying financial report of Fiducian Portfolio Services Limited (the
company), which comprises the statement of financial position as at 30 June 2011, and the statement
of comprehensive income, statement of changes in equity and statement of cash flows 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 the 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 of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that is free from material misstatement, whether due to fraud or error. In Note 1, the
directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial
Statements, that the financial statements comply 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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
PricewaterhouseCoopers, ABN 52 780 433 757
Darling Park Tower 2, 201 Sussex Street, GPO BOX 2650, SYDNEY NSW 1171
DX 77 Sydney, Australia
T +61 2 8266 0000, F +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d
a c n 0 7 3 8 4 5 9 3 1 P a g e 7 9
Independent auditor’s report to the members of
Fiducian Portfolio Services Limited (continued)
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 the Fiducian Portfolio Services
Group is in accordance with the Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the company and consolidated entity’s financial position
as at 30 June 2011 and of their performance for the year ended on that date; and
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 pages 13 to 20 of the directors’ report for the
year ended 30 June 2011. 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 for Fiducian Portfolio Services Limited for the year ended
30 June 2011, complies with section 300A of the Corporations Act 2001.
2 of 3
P a g e 8 0 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d a c n 0 7 3 8 4 5 9 3 1 a n n u a l r ePo r t 2 0 1 1
Independent auditor’s report to the members of
Fiducian Portfolio Services Limited (continued)
Matters relating to the electronic presentation of the audited financial report
This auditor’s report relates to the financial report and remuneration report of Fiducian Portfolio
Services Limited for the year ended 30 June 2011 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 the financial
report 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
26 August 2011
3 of 3
a n n u a l r ePo r t 2 0 1 1 f i d u c i a n Po r t f o l i o s e r v i c e s li m i t e d
a c n 0 7 3 8 4 5 9 3 1 P a g e 8 1
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