2012
ANNUAL REPORT
FIDUCIAN PORTFOLIO SERVICES LIMITED
ACN 073 845 931
i n t e g r i t y t r u s t e x p e rt i s e
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
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.
C O N T E N T S
J O I N T R E P O R T O F T H E C H A I R M A N
A N D T H E M A N A G I N G D I R E C T O R
C O R P O R A T E D I R E C T O R Y
D I R E C T O R S ’ R E P O R T
A U D I T O R ’ S I N D E P E N D E N C E D E C L A R A T I O N
C O R P O R A T E G O V E R N A N C E S T A T E M E N T
S H A R E H O L D E R I N F O R M A T I O N
F I N A N C I A L R E P O R T
S T A T E M E N T S O F C O M P R E H E N S I V E I N C O M E
S T A T E M E N T S O F F I N A N C I A L P O S I T I O N
S T A T E M E N T S O F C H A N G E S I N E Q U I T Y
S T A T E M E N T S O F C A S H F L O W
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
D I R E C T O R S ’ D E C L A R A T I O N
I N D E P E N D E N T A U D I T O R ’ S R E P O R T T O T H E M E M B E R S
2
8
9
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3 3
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JOINT
REPORT
OF THE
CHAIRMAN
AND THE
MANAGING
DIRECTOR
Dear Shareholders,
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 2012.
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FINANCIAL INFORMATION
Results for 2011-2012
The consolidated profit after income tax for the 2011-12 financial period was $2.21 million in comparison to $4.44 million
for the prior year. The consequential EBITDA earnings before interest expense, tax, depreciation and amortisation was $3.88
million compared with $6.69 million for the same period last year.
Revenue from ordinary activities decreased by 5.2% (2011: increase 4.6%). This has occurred predominantly as new
revenue streams offset the consequence of falling market valuations and therefore lower fee earning on assets under
administration. It has been an environment where global financial conditions have been difficult and many investors appear
to prefer the Government guaranteed security of a bank deposit instead of continuing with financial market investments.
Despite these headwinds, Fiducian has been and is continuing to be built to withstand external pressures and has significant
capacity for further growth in revenue.
During the year we embarked upon a number of major projects. One of these being the provision of tax accounting services
for the first time. We also acquired two stand alone financial planning businesses in Western Australia and Queensland to
give us national exposure and retain funds under advice and as well, acquired a client base for existing salaried advisers
in Victoria. Our other major project was to improve our administration systems to deliver superior service and provide
operational efficiencies for the benefit of our financial planners and investors. Importantly, these system improvements have
helped us overcome costly and unnecessary delays and reliance on external providers who charged ongoing license fees and
one off amendment fees as well as worked to their time schedules, rather than ours. In addition, we had to transition all
our assets to National Asset Servicing from our previous custodian who decided to exit from our kind of business. This was
an unexpected and costly event that required intense application and attention to detail. Needless to say, we have had an
extremely busy year and covered much ground.
As a consequence of our strategy of diversification and emphasis on self reliance through systems improvements, operating
expenses increased by 19.3% (Employee expenses being 19.2% and all other operating expenses 0.1%) (2011: operating
expenses increase 3.6%). These developments required us to increase supervisory inputs, double up on staff in instances
for parallel processing runs that ensured accuracy, build or improve the presentation of regional financial planning offices,
restructure operating processes and increase or replace manpower to ensure that our strategies were implemented. The
bulk of these procedural and process changes are now in place and formalised.
Expense reduction initiatives are already in place and we expect our operating expenses in the 2012-13 year to be contained
to below 2011-12 expenses. Through this period, we have received the support of our employees who are our strength
and as part of the ‘Fiducian Family’ have helped us through this difficult period. Without this cooperation, our costs might
well have been higher. 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 having been experienced over nearly five
years or so, 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 2.50 cents per share has been declared which
will bring the total fully franked dividend declared for the 2012 financial year to 5.00 cents (2011: 10.00 cents). The final
dividend will be paid on issued shares held on 7 September 2012 and be payable on 21 September 2012.
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Cash Flow
Net operating cash flows of $1.55 million were achieved (2011: $5.12 million). After payment for prior and current year
business acquisitions ($1.39 million), share buy backs ($0.43 million), dividend outlays ($2.40 million), fixed assets ($0.09
million) and receipts from loan repayment from staff / advisers ($0.10) and investments ($0.18 million) net cash decreased
by $2.48 million (2011: increase $0.67 million). Cash at year end was $7.7 million (2011: $10.1 million). An amount of
$5.0 million is required for regulatory purposes. The business acquisitions should assist our future revenue and earning
capacity.
A key feature of the company is that it continues to remain debt free and exhibits a positive working capital and cash flow
position.
On Market Buy-Back
During the year Fiducian bought 359,440 shares on market (2011: 258,229) for a total consideration, including brokerage,
of $0.43 million (2011: $0.36 million) at an average price per share of $1.20 (2011: $1.39). There are 31.805 million shares
on issue at year end (2011: 32.164 million).
Acquisitions
We have been analysing developments since the enactment of the Future of Financial Advice (FOFA) legislation and the
inherent risks in making acquisitions at such a time. We therefore acquired three small financial planning client groups
where there has been clarity in the quality of advice given and confirmation from clients that they wish to become part
of the Fiducian family and its quality of advice and service. In all cases we have mandated clients acquired must not be
disadvantaged.
We have also concentrated efforts on acquiring accounting practices and books of clients through Fiducian Business
Services. These appear to be at reasonable valuations once transitioned to our proven process and can quickly assimilate
as well as add to our bottom line. Negotiations are at advanced stages for practices which could be linked in with our
company owned financial planning offices in Victoria and Queensland and tucked in to our existing Sydney practice if
finalised.
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 Distribution Network
As stated earlier, the impact of the Global Financial Crisis has continued for around five years. We have therefore put in
place marketing initiatives for Fiducian financial planners that explain the economic environment and encourage long-
term investors to take advantage of current market weakness. As well, training and practice development strategies
have concentrated on client retention, education and counselling to understand that portfolios have been structured and
diversified to counter such unforseen economic developments. Increased frequency of client contact and communication
by all Fiducian financial planners have been encouraged and have resulted in impressive client retention levels. However,
financial market volatility, adverse media and political uncertainty has created fear and caused potential investors to defer
long term diversified investment decisions and instead focus on cash holdings. Practice Development Managers based in
Sydney, Melbourne and Brisbane continue to work hard to support and grow the planner network throughout Australia.
Their mandate for the coming year is to increase financial planner specialisation in various segments that differentiate our
financial planners from the marketplace and thereby deliver positive net inflows.
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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
Salaried Offices
Company owned offices with salaried financial planners based in New South Wales, Victoria, Western Australia, Queensland
and Tasmania have continued to contribute to overall results and numbers have increased. While some who have been with
us for many years are planning retirement or reduced working hours, we are ensuring an orderly transition of clients to
younger experienced financial planners so that there is no change in the Fiducian quality of care and service. Salaried offices
now comprise 43% of funds under administration.
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. As a consequence client retention has been extremely high
and franchised offices now comprise 45% of our funds under administration.
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 decreased in total by 24% to $0.87 billion (2011 $1.15 billion). This, as explained below, was largely
due to withdrawals by IFAs and declining financial market valuations. We believe that the rate of IFA withdrawals could slow
as they now have reduced levels of funds and many are Fiducian clients that have been with us for a long time. We also 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 Planners
In addition to providing administration services to Fiducian planners and badge arrangements, services are provided to
some Independent Financial Planners (IFAs) who hold their own AFSL license. Funds under administration for IFAs reduced
to 12% of total funds under administration and the bulk of our outflows were from this sector, some at near market lows.
Also, some IFAs have sold their businesses to other Dealer Groups who have their own recommended product lists and
arrangements with other platforms.
Corporate Superannuation
Corporate superannuation decreased by 1% (2011: 4%) during the year, but forms only a small portion of funds under
administration. Fiducian has focussed on the small employer market so that 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 or close to the top quartile positions over
longer time frames. In spite of the above results, a wholesale mandate of $137 million was terminated by an institution
which withdrew the funds upon the recommendation of an asset consultant who now manages those funds.
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INFORMATION TECHNOLOGY
The Fiducian Information Technology (FIT) team’s main focus last year was to replace the externally provided administration
system with a superior internal system, to provide much greater control, efficiency and substantial cost savings and open up
new business opportunities in the future. These improvements are now in place and dovetail to provide greater integration
with our Online reporting and financial planning system FORCe. Administration efficiencies have already been observed.
BUSINESS SERVICES
Fiducian Business Services Pty Ltd (FBS) is our subsidiary that was established to provide support to accountants for
bookkeeping, accounts preparation and self managed superannuation fund administration. Its proven process, in helping
accountants to lift profitability through the use of our resourcing services, encouraged us to acquire, at the end of last year,
an accounting practice which now operates as Fiducian Accountants & Business Advisers (FABA). It met its revenue targets
and profit expectations in its first year, in spite of substantial changes to its operating procedures. We are in negotiations to
expand this area of our business through acquisitions. Cross referrals of our financial planning clients needing accounting
help and our accounting clients needing financial planning help further supports Fiducian’s value proposition of service to
all our clients. A further development through FBS is the growth of an independent Self Managed Superannuation Fund
administration facility, which aims to capture a share of this segment of the industry. Our established presence in India
should provide a platform for growth and where feasible support other opportunities for cost rationalisation.
FBS should also become a strong growth pillar for our business in future years. It can provide a stable recurring income
stream and cushion any financial market earnings downturn, as its earnings are not directly related to the 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. The retention of quality, loyal
staff is important to Fiducian. However some changes have occurred due to retirement. The Head of Financial Planning
retired after eight and a half years of service and he was replaced internally. After eleven years of service, our Financial
Controller also retired and a new financial controller, with appropriate experience, has been recruited. 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 Groups
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.
This year a Platform User Group was established. It is already providing valuable insight into our system improvements and
client servicing needs.
Board of Directors
The Board of directors is working constructively to evaluate and support management’s recommendations for the company.
The Business Plan for the year has adopted key measures for performance, one of which is a reduction in operating costs to lift
profits. Future performance can also be influenced by a recovery in financial markets and decisive political leadership; as both
can give confidence to our Mum and Dad clients who are our traditional target market, to invest again in properly diversified
investments instead of cash. Management remains committed to achieving the goals and objectives set down in these plans.
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CURRENT ECONOMIC AND MARKET
ENVIRONMENT
Over the 2011-2012 financial year, the Australian and international share markets were buffeted repeatedly by positive and
negative news. For the third year in succession, we saw a share market recovery at the start of the calendar year peter out
on the back of more damaging exposure on the European economy.
A weak and volatile share market for nearly five years and recurrent bad news from the global economic front has sapped
a lot of energy from investors. Our house view is for share markets to trend sideways, but to pull through and eventually
deliver positive returns once news from Europe begins to improve. 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 even on a
hint that European policymakers are taking steps to support their currency and economy. 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,
information technology and business/accounting services. Expenditure controls are a key priority for the current year.
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 and with full transparency. Our product
disclosure documents specify that planner fees are negotiable between client and planner. We therefore do not expect any
detrimental financial affect from the FOFA legislation.
The business plan for 2013 financial year looks at expanding the revenue base by growing the existing Fiducian business
model and by further expanding its accountancy resourcing services to the self managed superannuation fund market and
accounting 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 in what has
been a difficult and eventful year.
Yours faithfully,
Robert Bucknell
Chairman
27 August 2012
Indy Singh
Managing Director
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C O R P O R A T E D I R E C T O R Y
DI RECTOR S
SHA RE REGI ST ER
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
NOTI CE O F A NN UA L
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
Tuesday 30 October 2012
PRINCI PAL R EGIS TE R E D
OFFICE I N AUST RA LIA
Level 4
1 York Street
Sydney NSW 2000
(02) 8298 4600
WHOLLY OWN E D
OPERA TING E N TI TIE S
Fiducian Financial Services Pty Ltd
Fiducian Business Services Pty Ltd
Computershare Investor Services Pty Limited
Level 3
60 Carrington Street
Sydney NSW 2000
A UDIT 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 EXC HA NGE LIST ING
Fiducian Portfolio Services Limited (FPS) shares
are listed on the Australian Securities Exchange.
WEB SIT E ADDRE SS
www.fiducian.com.au
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D I R E C T O R S ’ R E P O R T
Your directors present their report on the consolidated entity (referred to hereafter as the Group) consisting of Fiducian
Portfolio Services Limited and its wholly owned operating entities throughout the year ended 30 June 2012.
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 2011 of 5.00 cents
(2010: Fully franked 4.75 cents) per share paid on 20 September 2011.
Interim ordinary fully franked dividend for the year ended 30 June 2012 of 2.50 cents
(2011: Fully franked 5.00 cents) per share paid on 21 March 2012.
Total dividends in respect of the year
2012
$’000
2011
$’000
1,600
1,532
798
2,398
1,611
3,143
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 2012 of 2.5 cents per ordinary share held at 7 September 2012 and
payable on 21 September 2012.
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
2012
$’000
19,490
8,563
(4,848)
23,205
2011
$’000
21,562
8,225
(5,293)
24,494
Profit from ordinary activities before income tax expense
Income tax expense
Net profit attributable to members of Fiducian Portfolio Services Limited
2012
$’000
3,388
(56)
-
3,332
(1,121)
2,211
2011
$’000
5,941
451
-
6,392
(1,956)
4,436
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D I R E C T O R S ’ R E P O R T C O N T I N U E D
Comments on operations and results
Comments on the operations, business strategies, prospects and financial position are contained in the Joint Report of the
Chairman and Managing Director.
Shareholder returns
As in the previous year the valuation of investment funds has remained subdued and impacted on the 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 2.50 cents per share,
bringing the full year dividend to 5.00 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:
During the financial year the Group acquired three portfolios of financal planning clients, which transferred to Fiducian
Financial Services Pty Ltd progressively until the end of the financial year.
During the financial year the group established an overseas company in India with a local partner with 90% stake for
providing accounting and business resourcing services. The operations for the company are in its initial stages and not
material in 2012. The profit contribution of the non-controlling interests are shown separately in the Statements of
Comprehensive Income.
Contributed equity has reduced by $431,845 (inclusive of brokerage) as a result of the buy back of 359,440 shares on the
stock exchange at an average price of $1.20 per share 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 (2011: Nil) as the plan has not been
extended. Under the same rules no options have expired to the date of this report (2011: 330).
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 (2011: Nil). To the date of this report 110,000 (2011: 95,375) employee options have
lapsed and no options have lapsed or been exercised by the Managing Director. To the date of this report, 23,770 shares
have been bought back on market at an average price of $0.93.
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.
Environmental regulation
The Group is not subject to significant environmental regulations under a Commonwealth, State or Territory law.
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KEY MANAG EME N T PE R SON NEL 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.
Experience and expertise
Chairman since inception in 1996. Extensive experience in accounting and business management over the past 48 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, Remuneration and Internal Compliance Committees and member of Audit Committee.
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.
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 23 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 as applicable.
Interest in shares and options
10,012,415 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.
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.
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(b) Information on director (continued)
Other current directorships
None
Former directorships in the last 3 years
None
Special responsibilities
Chairman of the Board Audit Committee and member of Remuneration Committee.
Interest in shares and options
226,373 ordinary shares in Fiducian Portfolio Services Limited.
6,200 options for ordinary shares in Fiducian Portfolio Services Limited.
C H Stone B Comm/LLB, LLM, CA, ACIS Independent non-executive director.
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 22 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 and External Compliance Committees.
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.
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(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 2012, 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
5
5
B
5
5
A
2
2
B
2
2
A
B
A B
**** ****
1
1
12 12 **** ****
12 12 12 12
5
5 **** **** **** **** 1 1
12 12 12 12
**** **** 2
2
**** **** **** ****
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 5 of the 5 meetings held with the two independent members of the External Compliance and Risk Committee
as attendee or member as applicable.
*** = In addition, C Stone attended all 5 of the 5 meetings 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 2012.
(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.
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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.
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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.
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B - Details of remuneration (continued)
Key management personnel of Fiducian Portfolio Services Limited and the Group
2012
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
TOTAL
Non-executive
directors
R Bucknell (b)
(Chairman)
F Khouri (c)(d)
C Stone
Executive director
I Singh (e)
Totals
$
128,818
47,817
48,964
443,493
669,092
$
-
-
-
-
-
$
$
$
$
$
-
-
-
-
-
-
4,259
4,036
19,581
27,876
-
-
-
-
-
-
128,818
-
-
-
-
52,076
53,000
463,074
696,968
(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 $222,928 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 2012 financial year.
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
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) Including amounts paid to the director’s firm only in respect of director’s duties.
(d) This excludes gross remuneration of $238,295 for financial planning paid to companies in which the director
has an interest.
(e) No options were issued to Mr Singh in respect of the 2011 financial year.
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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 25.
The numbers of options for ordinary shares in the company held directly by directors of Fiducian Portfolio
Services Limited and details of options for ordinary shares in the company provided as remuneration to the key
management personnel of the Group, are set out below.
2012
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
155,000
-
-
-
-
-
-
-
155,000
155,000
-
-
* 6,200 Adviser options, issued in prior years, are held by an entity in which F Khouri has an interest.
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.
Note: The assessed fair value at grant date of options granted to the individuals is detailed in Note 25.
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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.
2012
NAME
I Singh
R E Bucknell
F Khouri
C Stone
2011
NAME
I Singh
R E Bucknell
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
9,939,580
900,000
219,373
-
-
-
-
-
72,835
-
7,000
-
10,012,415
900,000
226,373
-
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
9,764,580
1,000,000
194,373
100,000
-
-
75,000
(100,000)
25,000
9,939,580
900,000
219,373
Shares provided on exercise of options
No ordinary shares in the company were provided as a result of the exercise of remuneration options to a director
of Fiducian Portfolio Services Limited and other key management personnel of the Group during the period (2011:
100,000). 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 3 years in these tougher economic times. Cash bonuses
and entitlements have not been granted or paid in the past 3 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
There was no cash bonus or option granted, vested or forfeited in the financial year (2011: 40,000). No part of the
bonus is payable in future years. There are no options which are yet to vest.
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E - Additional information (continued)
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 (2011: 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
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.
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
CONSOLIDATED
2012
$
2011
$
233,894
222,928
456,822
229,915
238,295
468,210
Shares under option
Unissued ordinary shares of Fiducian Portfolio Services Limited under option at the date of this report are disclosed in
Note 25 of the Financial Report.
No option holder has any right under the options to participate in any other share issue of the company or any other entity
until after the exercise of the option.
Shares issued on the exercise of options
The details of ordinary shares of Fiducian Portfolio Services Limited issued during the year ended 30 June 2012 on the
exercise of options granted under the Fiducian Portfolio Services Limited Employee & Director Share Option Plan and the
Adviser Share Option Plan are disclosed under Note 25 to the Financial Report.
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E - Additional information (continued)
Adviser Share Option Plan are disclosed under Note 25 to the Financial Report.
Indemnification and insurance of officers
The Constitution of Fiducian Portfolio Services Limited provides the following indemnification of officers:
(a)
to indemnify officers of the company and related bodies corporate to the maximum extent permitted by law unless a
liability arises out of conduct involving a lack of good faith. In the case of a related body corporate, the indemnification
of officers does not extend to any proceedings for a liability incurred by the officer based upon events that occurred
before that body corporate became a related body corporate.
(b) to allow the company to pay a premium for a contract insuring directors, the secretary and executive officers of
Fiducian Portfolio Services Limited and its related bodies corporate. The liabilities insured include costs and expenses
that may be incurred in defending civil or criminal proceedings that may be brought against the officers in the capacity
as officers of the company or 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, B Lacey and M Devlin.
Proceedings on behalf of the company
No person has applied to the Court under Section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the company, or to intervene in any proceedings to which the company is a party, for the purpose of taking
responsibility on behalf of the company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the company with leave of the Court under section 237
of the Corporations Act 2001.
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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 26 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,
27 August 2012
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A U D I T O R ’ S I N D E P E N D E N C E
D E C L A R A T I O N
Auditor’s Independence Declaration
As lead auditor for the audit of Fiducian Portfolio Services Limited for the year ended 30 June 2012, I
declare that to the best of my knowledge and belief, there have been:
a)
Auditor’s Independence Declaration
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
b)
As lead auditor for the audit of Fiducian Portfolio Services Limited for the year ended 30 June 2012, I
declare that to the best of my knowledge and belief, there have been:
This declaration is in respect of Fiducian Portfolio Services Limited and the entities it controlled
during the period.
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 period.
Darren Ross
Partner
PricewaterhouseCoopers
Darren Ross
Partner
PricewaterhouseCoopers
Sydney
27 August 2012
Sydney
27 August 2012
PricewaterhouseCoopers, ABN 52 780 433 757
Darling Park Tower 2, 201 Sussex Street, GPO BOX 2650, SYDNEY NSW 1171
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
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Liability limited by a scheme approved under Professional Standards Legislation.
PricewaterhouseCoopers, ABN 52 780 433 757
Darling Park Tower 2, 201 Sussex Street, GPO BOX 2650, SYDNEY NSW 1171
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Auditor’s Independence Declaration
As lead auditor for the audit of Fiducian Portfolio Services Limited for the year ended 30 June 2012, I
declare that to the best of my knowledge and belief, there have been:
a)
Auditor’s Independence Declaration
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.
As lead auditor for the audit of Fiducian Portfolio Services Limited for the year ended 30 June 2012, I
declare that to the best of my knowledge and belief, there have been:
This declaration is in respect of Fiducian Portfolio Services Limited and the entities it controlled
during the period.
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 period.
Darren Ross
Partner
PricewaterhouseCoopers
Darren Ross
Partner
PricewaterhouseCoopers
Sydney
27 August 2012
Sydney
27 August 2012
PricewaterhouseCoopers, ABN 52 780 433 757
Darling Park Tower 2, 201 Sussex Street, GPO BOX 2650, SYDNEY NSW 1171
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
PricewaterhouseCoopers, ABN 52 780 433 757
Darling Park Tower 2, 201 Sussex Street, GPO BOX 2650, SYDNEY NSW 1171
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
C O R P O R A T E G O V E R N A N C E
S T A T E M E N T
Fiducian Portfolio Services Limited (the Company) and the Board are committed to achieving and demonstrating the highest
standards of corporate governance. The Board continues to review the framework and practices to ensure they meet the
interests of shareholders. The company and its controlled entities together are referred to as the Group in this statement.
A description of the company’s main corporate governance practices is set out below. All these practices, were in place
for the entire year and comply with the August 2007 ASX Principles of Good Corporate Governance and Best Practice
Recommendations, except where noted.
Principle 1: Lay solid foundations for management and oversight
The relationship between the Board and senior management is critical to the Group’s long term success. The directors
are responsible to the shareholders for the performance of the Group in both the short and the longer term and seek
to balance sometimes competing objectives in the best interests of the Group as a whole. Their focus is to enhance the
interests of shareholders and to ensure that the Group is properly managed.
The responsibilities of the Board include:
•
•
providing 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’.
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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:
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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 June, 2012.
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.
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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 applicable. 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.
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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 F Khouri is a partner in a public accounting practice and a registered
company auditor. Mr R Bucknell, has relevant qualifications and experience by virtue of being a former partner in a major
accounting firm.
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
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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
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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.
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S H A R E H O L D E R I N F O R M A T I O N
A. DISTRIBUTION OF EQUITY SECURITY HOLDERS BY SIZE OF HOLDING
Analysis of numbers of equity security holders by size of holding, as at 13 August 2012
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
0
12
7
1
1
1
22
90
352
123
131
25
27
748
There were no holders of a less than marketable parcel of ordinary shares.
B. EQ UITY SE CU R IT Y H OLD E RS
Twenty largest quoted equity security holders.
The names of the twenty largest registered shareholders of quoted equity securities as at 13 August 2012, are listed below.
NAME
NUMBER HELD
PERCENTAGE OF ISSUED SHARES
Indyshri Singh Pty Limited
HSBC Custody Nominees (Australia) Limited
National Nominees Limited
JP Morgan Nominees Australia Limited
Norcad Investments Pty Ltd
Hunter Place Services Pty Ltd
Citicorp Nominees Pty Limited (Colonial First State Inc A/C)
Imperial Pacific Fund Managers Pty Ltd
Mr Inderjit Singh
D R Smith Holdings Pty Ltd
Imperial Pacific Fund Managers Pty Limited
Shrind Investments Pty Ltd (Indyshri Super Fund A/c)
1
8,952,835
2
3,978,083
3
2,464,956
4
1,280,581
5
1,003,000
6
900,000
7
642,629
8
590,093
9
567,500
10
550,000
11
523,573
12
487,080
13 Mr Erich Gustav Brosell
429,211
400,000
Mr Victor John Plummer
14
HSBC Custody Nominees (Australia) Limited (NT-Comnwlth S/Fund A/C) 328,669
15
314,536
16
Bond Street Custodians Limited (Ganes Value Growth A/C)
300,000
17 Mr Walter Frederick Holland
174,187
18
150,000
19
140,971
20
H F R Pty Ltd (F & M Khouri S/Fund A/C)
Berne No 132 Nominees Pty Ltd (323723 A/C)
BNP Paribas Noms Pty Ltd (Master Cust DRP)
24,177,904
28.15
12.51
7.75
4.03
3.15
2.83
2.02
1.86
1.78
1.73
1.65
1.53
1.35
1.26
1.03
0.99
0.94
0.55
0.47
0.44
76.02
Unquoted equity securities
As at 13 August 2012:
TYPE OF SECURITY
Options – Managing Director
Options – Employees
Options – Financial Planners
NUMBER ON ISSUE
NUMBER OF HOLDERS
155,000
155,000
50,142
360,142
1
8
13
22
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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. SUBSTA NTI AL SH AR E H OLDER S
Substantial shareholders and associates as at 13 August 2012 (more than 5% of a class of shares) in the company are
set out below:
NAME
Indyshri Singh Pty Limited and associates
HSBC Custody Nominees (Australia) Limited
National Nominees Limited
NUMBER HELD
PERCENTAGE
10,012,415
3,978,083
2,464,956
31.50%
12.51%
7.75%
D. VO TING R IGHT 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.
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FINANCIAL
REPORT
F I N A N C I A L R E P O R T
S T A T E M E N T S O F C O M P R E H E N S I V E I N C O M E
S T A T E M E N T S O F F I N A N C I A L P O S I T I O N
S T A T E M E N T S O F C H A N G E S I N E Q U I T Y
S T A T E M E N T S O F C A S H F L O W
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
D I R E C T O R S ’ D E C L A R A T I O N
I N D E P E N D E N T A U D I T O R ’ S R E P O R T T O T H E M E M B E R S
3 4
3 5
3 6
3 7
3 8
7 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 27 August 2012.
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.
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S T A T E M E N T S O F
C O M P R 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 2
Revenue from ordinary activities
Other Income
Fees, commissions and related costs
Employee benefits expense
Depreciation and amortisation expense
Other expenses
Profit before income tax expense
Income tax expense
Profit for the year
Other comprehensive income for
the full year, net of tax
NOTES
CONSOLIDATED
PARENT ENTITY
2012
$’000
2011
$’000
2012
$’000
2011
$’000
4
5
6(a)
6(b)
7
23
-
22,632
23,886
18,961
21,045
573
(4,929)
(10,041)
(546)
608
(5,577)
(8,424)
(296)
529
(5,641)
(6,941)
(225)
517
(6,354)
(6,069)
(172)
(4,357)
(3,805)
(3,288)
(3,028)
3,332
(1,121)
6,392
(1,956)
3,395
(1,031)
5,939
(1,800)
2,211
4,436
2,364
4,139
-
-
-
Total comprehensive income for the year
2,211
4,436
2,364
4,139
Profit is attributible to:
Owners of Fiducian Portfolio Services Limited
Non Controlling Interests
Earnings per share
35
32
2,215
(4)
4,436
-
2,364
4,139
-
-
2,211
4,436
2,364
4,139
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
6.91 cents 13.78 cents
6.81 cents 13.44 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 P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 A N N U A L R E P O R T 2 0 1 2
S T A T E M E N T S O F
C O M P R 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 2
S TAT E M E N T S O F F I N A N C I A L P O S I T I O N
A S A T 3 0 J U N E 2 0 1 2
NOTES
CONSOLIDATED
PARENT ENTITY
2012
$’000
2011
$’000
2012
$’000
2011
$’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
Provisions
Total Non-Current Liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Retained profits
Total equity
Contingent liabilities
Commitments for expenditure
7,674
3,251
10,925
2,130
-
275
332
963
6,310
10,010
20,935
2,847
(29)
2,818
-
803
803
10,150
2,698
12,848
2,275
-
425
377
881
5,624
9,582
22,430
2,782
836
3,618
142
709
851
6,311
5,557
8,332
4,590
11,868
12,922
2,130
3,875
2,275
3,875
275
255
701
85
425
328
626
232
7,321
19,189
7,761
20,683
2,079
(13)
2,066
-
596
596
2,380
763
3,143
-
517
517
3,621
17,314
4,469
17,961
2,662
16,527
3,660
17,023
7,395
219
9,700
7,827
247
9,887
7,395
217
8,915
7,827
247
8,949
17,314
17,961
16,527
17,023
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
27
28
The above statements of financial position should be read in conjunction with the accompanying notes.
A N N U A L R E P O R T 2 0 1 2 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 P A G E 3 5
S T A T E M E N T O F C H A N G E S I N E Q U I T Y
A S AT 3 0 J U N E 2 0 1 2
Total equity at the beginning
of the financial year
Profit for the year
NOTES
CONSOLIDATED
PARENT ENTITY
2012
$’000
2011
$’000
2012
$’000
2011
$’000
17,961
16,783
17,023
16,142
2,211
4,436
2,364
4,139
Other comprehensive income
-
-
-
-
Total comprehensive income for the year
2,211
4,436
2,364
4,139
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/lapsed
Transactions with foreign exchange differences
21
21
8
22
22
-
(432)
341
(361)
-
(432)
341
(361)
(2,398)
(3,143)
(2,398)
(3,143)
(30)
2
(95)
-
(30)
-
(95)
-
Total transactions with equity holders
(2,858)
(3,258)
(2,860)
(3,258)
Total equity at the end of the financial year
17,314
17,961
16,527
17,023
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 P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 A N N U A L R E P O R T 2 0 1 2
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 2
S T A T E M E N T S O F C A S H F L O W
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
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
Loans to related parties
(associates, planners and staff)
Investment in subsidiary/trusts
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
2012
$’000
2011
$’000
2012
$’000
2011
$’000
24,369
26,279
20,639
23,173
(21,296)
(20,131)
(18,446)
(17,914)
3,073
543
(2,068)
6,148
611
(1,639)
2,193
499
(1,882)
5,259
520
(1,379)
31
1,548
5,120
810
4,400
(109)
180
(73)
-
(1,386)
(1,013)
-
212
(91)
30
67
(284)
(109)
180
(234)
-
212
(50)
(73)
234
-
30
67
(279)
(1,194)
(1,273)
(1)
(21)
(432)
-
(85)
53
(432)
-
(85)
53
(2,398)
(3,143)
(2,398)
(3,143)
(2,830)
(3,175)
(2,830)
(3,175)
Net increase/decrease in cash held
(2,476)
672
(2,021)
1,204
Cash and cash equivalents at the beginning
of the year
Cash and cash equivalents
at the end of year
10,150
9,478
8,332
7,128
9
7,674
10,150
6,311
8,332
The above statements of cash flow should be read in conjunction with the accompanying notes.
A N N U A L R E P O R T 2 0 1 2 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 P A G E 3 7
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
1 SUMMAR Y O F SI GNI FI CANT A CC OUN TI N G PO LI C IES
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. Fiducian Portfolio Services Ltd. is a for-profit entity for the purpose of preparing the financial
statements.
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 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 2012 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.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the statement of comprehensive
income.
(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 fees, commissions and related costs
Revenues comprising trustee and management fees are recognised on an accruals basis. Fees, Commission and
costs related to 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 P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 A N N U A L R E P O R T 2 0 1 2
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
1 SUMMAR Y O F SI GNI FI CANT A CC OUN TI N G PO LI C IES c o n t i n u e 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.
(v) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the group’s entities are measured using the currency of
the primary economic environment in which the entity operates (‘the functional currency’). The consolidated
financial statements are presented in Australian dollars, which is Fiducian Portfolio Services Limited’s functional and
presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at
the dates of transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and
from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in profit or loss.
(iii) Group companies
The results and financial position of foreign operations (none of which has the currency of hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the
presentation currency as follows:
• assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance
sheet
• income and expenses for each statement of comprehensive income are translated at the closing rate at the end
of the month, and
• all resulting exchange differences are recognised in other expenses.
(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.
A N N U A L R E P O R T 2 0 1 2 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 P A G E 3 9
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
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SUMMA RY O F SI GNI FI C ANT ACC OUN TI NG PO LI CIE S c o n t i n u e d
(d) Income tax (continued)
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are
offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the
asset and settle the liability simultaneously.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.
Fiducian Portfolio Services Limited and its Australian wholly-owned operating entities have not formed a tax consolidated group.
(e) Operating leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as
operating leases (Note 28). Payments made under operating leases (net of any incentives received 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
2012 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.
(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.
P A G E 4 0 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 A N N U A L R E P O R T 2 0 1 2
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
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SUMMA RY O F SI GNI FI C ANT ACC OUN TI NG PO LI CIE S c o n t i n u e d
(i) Trade receivables (continued)
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.
(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.
A N N U A L R E P O R T 2 0 1 2 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 P A G E 4 1
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
1 SUMMAR Y O F SI GNI FI CANT A CC OUN TI N G PO LI C IES c o n t i n u e d
(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.
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 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 where deemed appropriate. 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.
Capitalised expenditure are tested for events or changes in circumstances that indicate that they may be impaired and
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 A G E 4 2 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 A N N U A L R E P O R T 2 0 1 2
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
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SUMMA RY O F SI GNI FI C ANT ACC OUN TI NG PO LI CIE S c o n t i n u e d
(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 25.
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.
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1 SUMMAR Y O F SI GNI FI CANT A CC OUN TI N G PO LI C IES c o n t i n u e d
(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.
(w) New accounting standards and interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2012
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 2015)
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 2015 but is available for early
adoption. The Group expects this to have limited impact on the financial statements.
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.
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1 SUMMAR Y O F SI GNI FI CANT A CC OUN TI N G PO LI C IES c o n t i n u e d
(w) New accounting standards and interpretations (continued)
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.
AASB 13 Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards arising
from AASB 13 (effective 1 January 2013)
AASB 13 was released in September 2011. It explains how to measure fair value and aims to enhance fair value
exposures. 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.
2 CRITI CAL ACCOU NT ING E STI M A TES A N D A SS UM PT I ONS
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
(i) Estimated impairment of goodwill
The Group tests annually whether goodwill has suffered any impairment, by comparing its current amount with its
recoverable amount 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 assesses at the end of each reporting period whether there is any indication that the investment or accounting
portfolios may be impaired in accordance with the accounting policy stated in Note 1(n). If any such indication exists, the
Group shall estimate the recoverable amount of the asset. 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.
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3 SEGME NT INFO RM AT I ON
(a) Description of segments
Business segments
The Group is organised into the following divisions by product and service type.
Funds Management and Administration
The company operates in a single segment as Trustee for a public offer superannuation fund - Fiducian Superannuation
Service, Operator of an Investor Directed Portfolio Service – Fiducian Investment Service and Responsible Entity for managed
investment schemes - Fiducian Funds.
Financial Planning
The company continued its specialist financial planning operations through its subsidiaries, Fiducian Financial Services Pty Ltd.
Accountancy Resource Services
The company provides accountancy resource services through its subsidiary, Fiducian Business Services Pty Ltd. The revenue
from this segment has been reported as part of Financial Planning as they are not material for 2012.
Geographical segments
The Group operates in the following geographical segments - in Australia and in India (which is not material for 2012).
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3 SEGME NT INF OR MATI ON C O N TIN UED
(b) Primary reporting – business segments
FUNDS
MANAGEMENT
AND
ADMINISTRATION
FINANCIAL
PLANNING
INTER-
SEGMENT
ELIMINATIONS CONSOLIDATED
$’000
$’000
$’000
$’000
2012
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
-
22,632
18,961
-
18,961
529
19,490
3,671
4,848
8,519
44
8,563
(4,848)
(4,848)
-
(4,848)
3,388
(56)
-
-
22,632
573
23,205
3,332
(1,121)
2,211
19,189
8,763
(7,017)
20,935
2,662
4,094
(3,135)
3,621
Acquisitions of plant and equipment,
intangibles and other non-current segment assets
Depreciation, amortisation and impairment
Net cash inflow from operating activities
70
225
810
1,180
321
738
-
-
-
1,250
546
1,548
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3 SEGME NT INFO RM AT I ON C O N 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
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3 SEGME NT INFO RM AT I ON C O N 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
2012
$’000
2011
$’000
27,480
(4,848)
22,632
29,179
(5,293)
23,886
The entity is domiciled in Australia. The amount of its revenue from external customers in Australia is $22,632,000
(2011: $23,886,000).
(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
Intersegment eliminations
Finance costs
Depreciation
Amortisation
Profit before income tax from continuing operations
(iii) Segment assets
CONSOLIDATED
2012
$’000
2011
$’000
3,880
6,691
(1)
(1)
(131)
(415)
3,332
-
(3)
(129)
(167)
6,392
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 and in India which are not material.
(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.
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4 REVENU E
From continuing operations
Sales revenue
Fees received
Other
Revenue from ordinary activities
5 OTHER I NC OM E
Interest received/receivable
Distributions from related trusts
NOTES
CONSOLIDATED
PARENT ENTITY
2012
$’000
2011
$’000
2012
$’000
2011
$’000
21,991
23,381
18,245
20,523
641
505
716
522
22,632
23,886
18,961
21,045
Fair value gains/(losses) on financial assets
at fair value through profit or loss
13
6 EXPENSES
Profit before income tax includes the following specific expenses:
(a) Depreciation, amortisation and impairment
Depreciation
Furniture, office equipment and computers
Leasehold improvements
Total depreciation
Amortisation
Capitalised computer software
Client portfolio acquisition costs
Total amortisation
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
26
543
-
30
573
113
18
131
66
349
415
546
345
550
768
158
789
216
438
18
1,075
4,357
611
3
(6)
608
60
16
76
69
151
220
296
146
600
709
123
697
178
407
19
926
499
-
30
529
100
18
118
65
42
107
225
274
386
396
85
629
174
397
(2)
949
520
3
(6)
517
48
16
64
66
42
108
172
127
498
391
75
577
141
397
-
822
3,805
3,288
3,028
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7
INC OME T AX E XP E NSE
(a) Income tax expense
Current tax
Deferred tax
Income tax expense
NOTES
CONSOLIDATED
PARENT ENTITY
2012
$’000
2011
$’000
1,203
(82)
1,121
2,082
(126)
1,956
2012
$’000
1,106
(75)
1,031
2011
$’000
1,871
(71)
1,800
Deferred income tax (revenue) expense
included in income tax expense comprises:
Decrease (increase) in deferred tax assets
15
Deferred tax
(b) Numerical reconciliation of income
tax expense to prima facie tax payable
Profit from continuing operations before
income tax expense
(82)
(82)
(126)
(126)
(75)
(75)
(71)
(71)
3,332
6,392
3,395
5,939
Tax at the Australian tax rate of 30%
1,000
1,918
1,019
1,782
Tax effect of amounts which are not deductible
(taxable) in calculating taxable income:
Entertainment
Sundry items
13
108
12
26
10
2
10
8
1,121
1,956
1,031
1,800
Income tax expense
1,121
1,956
1,031
1,800
(c) Tax consolidation legislation
Fiducian Portfolio Services Limited and its Australian wholly-owned operating entities have not formed a tax consolidated group.
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8 D IVIDE ND S
Ordinary shares
Final ordinary fully franked dividend for the year ended 30 June 2011 of 5.00 cents
(2010: Fully franked 4.75 cents) per share paid on 20 September 2011.
Interim ordinary fully franked dividend for the year ended 30 June 2012 of 2.50 cents
(2011: Fully franked 5.00 cents) per share paid on 21 March 2012.
Total dividends paid in cash
PARENT ENTITY
2012
$’000
2011
$’000
1,600
1,532
798
1,611
2,398
3,143
The Directors have declared the payment of a final fully franked dividend for the year ended 30 June 2012 in the amount
of 2.50 cents per ordinary share to be paid on shares registered on 7 September 2012 and payable on 21 September 2012.
Franked dividends
The franked portions of the final dividends recommended after 30 June 2012 will be franked out of existing franking
credits.
Franking credits available for subsequent financial years
based on a tax rate of 30%
CONSOLIDATED
PARENT ENTITY
2012
$’000
2011
$’000
2012
$’000
2011
$’000
6,081
5,373
5,080
4,569
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 $341,000 (2011: $689,000)
9
CURR E NT AS SE TS – CASH A N D C A SH E QUI V A LEN T S
Cash at bank and in hand
Deposits securing bank guarantees
CONSOLIDATED
PARENT ENTITY
2012
$’000
7,522
152
7,674
2011
$’000
9,998
152
10,150
2012
$’000
6,189
122
6,311
2011
$’000
8,210
122
8,332
The Group’s and the parent entity’s exposure to interest rate risk is discussed in Note 34.
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10 CURR E NT AS S E TS – TR A DE, OT HER R ECEI VA B LES A N D PR EP A YM ENTS
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
-
-
2,275
1,965
286
35
399
367
3,362
(111)
3,251
(91)
-
(20)
(111)
242
35
100
447
2,789
(91)
2,698
(72)
-
(19)
(91)
2,726
2,208
297
24
72
239
5,566
(9)
5,557
(9)
-
-
(9)
1,966
1,946
253
24
5
405
4,599
(9)
4,590
(9)
-
-
(9)
At 30 June 2012, a provision for impairment exists for trade receivables outstanding greater than 120 days. There has been
no history of default and no material losses are expected.
Information about the Group’s and the parent entity’s exposure to interest rate risk in relation to trade and other
receivables is provided in Note 34.
11 NON -C UR RE NT ASSE T S – REC EI V A B L ES
Business development loans*
Loans to staff*
Less: Provision for impairment of receivables
CONSOLIDATED
PARENT ENTITY
2012
$’000
2,094
36
2,130
-
2,130
2011
$’000
2,093
184
2,277
(2)
2,275
2012
$’000
2,094
36
2,130
-
2,130
2011
$’000
2,093
184
2,277
(2)
2,275
*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
No amount has been provided against non-current receivables in the current year (2011: $2,000). An amount of $2,000
was written back in relation to previous year.
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11 NON- CU R RE NT A SS E TS – RECEI VA B LES c o n t i n u e d
(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
2012
2011
CARRYING
AMOUNT
FAIR VALUE
CARRYING
AMOUNT
FAIR VALUE
$’000
$’000
$’000
$’000
2,094
36
2,130
2,094
36
2,130
2,091
184
2,275
2,091
184
2,275
(c) Risk exposure
Information about the Group’s and the parent entity’s exposure to credit and interest rate risk is provided in Note 34. The
maximum exposure to credit risk at the reporting date is the carrying amount of each class of receivables mentioned above.
12 N ON-CU RR E NT AS SE T S – O TH ER F I NA NC I A L A S SETS
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
2012
$’000
3,763
10
97
5
2011
$’000
3,763
10
97
5
Total investment by parent entity
3,875
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. in 2011 financial year.
13 NON-C URR E NT AS SE T S – O TH ER F IN A N CI A L A SSET S A T F A IR V ALUE
THROU GH PR OF I T OR L O SS
Investment in unlisted unit trust
At beginning of year
Capital distribution
Revaluation - fair value gains / (losses)
At end of year
CONSOLIDATED
PARENT ENTITY
2012
$’000
425
(180)
30
275
2011
$’000
440
(9)
(6)
425
2012
$’000
2011
$’000
425
(180)
30
275
440
(9)
(6)
425
P A G E 5 4 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 A N N U A L R E P O R T 2 0 1 2
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
13 NON-C URR E NT AS SE T S – O TH ER F IN A N CI A L A SSET S A T F A IR V ALUE
THRO UG H PROF IT OR L OSS c o n t i n u e d
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 34.
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 2012 against the investment. Reasonably possible shifts have been disclosed in
Note 34(a).
14 NON-CURRENT ASSETS – PROPERTY, PLANT AND EQUIPMENT
Plant and equipment
Furniture, office equipment and computers
Less: Accumulated depreciation
CONSOLIDATED
PARENT ENTITY
2012
$’000
1,315
(983)
332
2011
$’000
1,362
(985)
377
2012
$’000
1,146
(891)
255
2011
$’000
1,197
(869)
328
A N N U A L R E P O R T 2 0 1 2 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 P A G E 5 5
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
14 NON-CURRENT ASSETS – PROPERTY, PLANT AND EQUIPMENT co nt i nued
Consolidated
At 1 July 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
Year ended 30 June 2012
Opening net book amount
Additions
Disposals
Depreciation / amortisation charge
Closing net book amount
At 30 June 2012
Cost or fair value
Accumulated depreciation
Net book amount
FURNITURE
AND OFFICE
EQUIPMENT COMPUTERS
LEASEHOLD
IMPROVEMENTS
$’000
$’000
$’000
269
(200)
69
69
6
(4)
(11)
60
271
(211)
60
60
31
-
(17)
74
302
(228)
74
395
(339)
56
56
278
(46)
(4)
292
627
(335)
292
292
60
(138)
37
251
549
(298)
251
465
(424)
41
41
-
-
(16)
25
465
(440)
25
25
-
-
(18)
7
465
(458)
7
TOTAL
$’000
1,129
(963)
166
166
284
(50)
(23)
377
1,363
(986)
377
377
91
(138)
2
332
1,316
(984)
332
P A G E 5 6 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 A N N U A L R E P O R T 2 0 1 2
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
14 NON-CURRENT ASSETS – PROPERTY, PLANT AND EQUIPMENT CONTINUED
Parent entity
At 1 July 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
Year ended 30 June 2012
Opening net book amount
Additions
Disposals
Depreciation / amortisation charge
Closing net book amount
At 30 June 2012
Cost or fair value
Accumulated depreciation
Net book amount
FURNITURE
AND OFFICE
EQUIPMENT COMPUTERS
LEASEHOLD
IMPROVEMENTS
$’000
$’000
$’000
TOTAL
$’000
176
(143)
33
33
1
(13)
21
177
(156)
21
21
9
-
(12)
18
186
(168)
18
278
(238)
40
40
278
(35)
283
556
(273)
283
283
41
(101)
8
231
496
(265)
231
465
(425)
40
40
-
(16)
24
465
(441)
24
24
-
-
(18)
6
465
(459)
6
919
(806)
113
113
279
(64)
328
1,198
(870)
328
328
50
(101)
(22)
225
1,147
(892)
225
A N N U A L R E P O R T 2 0 1 2 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 P A G E 5 7
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
15 N ON-CU RR E NT AS SE T S – DEF ER RED TA X A SSETS
NOTES
CONSOLIDATED
PARENT ENTITY
2012
$’000
2011
$’000
2012
$’000
2011
$’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
32
461
18
113
110
22
207
963
881
82
963
625
338
963
27
479
15
40
109
22
189
881
755
126
881
561
320
881
3
351
17
108
109
22
91
701
626
75
701
481
220
701
3
346
15
40
109
22
91
626
555
71
626
404
222
626
16 N ON-CU RR E NT AS SE T S – I NT A N G I B LE A SS ETS
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
5,363
(5,349)
14
5,632
(5,514)
118
5,358
(5,346)
12
5,614
(5,497)
117
4,075
(978)
3,097
3,663
(464)
3,199
6,310
2,936
(629)
2,307
3,663
(464)
3,199
5,624
418
(345)
73
-
-
-
85
418
(303)
115
-
-
-
232
P A G E 5 8 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 A N N U A L R E P O R T 2 0 1 2
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
16 N ON-CU R R E NT AS SE T S – IN TA N G I B LE A SS ETS C O NT IN UED
(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 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
Year ended 30 June 2012
Opening net book amount
Additions
Disposals
Impairment Charge
Amortisation charge**
Closing net book amount
At 30 June 2012
Cost
Accumulated amortisation and impairment
Net book amount
1,379
(481)
898
898
1,557
(148)
2,307
2,936
(629)
2,307
2,307
1,139
-
-
(349)
3,097
4,075
(978)
3,097
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
10,674
(6,391)
4,283
4,283
1,557
(216)
5,624
5,632
(5,446)
186
186
-
(68)
118
5,632
(5,514)
118
12,231
(6,607)
5,624
118
20
(289)
231
(66)
14
5,624
1,159
(289)
231
(415)
6,310
5,363
(5,349)
14
13,101
(6,791)
6,310
* 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 $415,000 (2011: $216,000) is included in depreciation, amortisation and impairment expense in the statement of
comprehensive income.
A N N U A L R E P O R T 2 0 1 2 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 P A G E 5 9
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
16 NO N-C U RR E NT AS SE T S – I NT AN GI BL E A SSE TS C O NT IN UED
(b) Impairment tests for goodwill and client portfolios
Goodwill and client portfolios are 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 2012 (2011: Nil).
(e) Business Acquisitions
Summary of acquisitions.
During the year the Group made the following three acquisitions:
ACQUISITION
CLIENT PORTFOLIO
CLIENT PORTFOLIO
CLIENT PORTFOLIO
FIDUCIAN ENTITY
FIDUCIAN FINANCIAL
SERVICES
FIDUCIAN FINANCIAL
SERVICES
FIDUCIAN FINANCIAL
SERVICES
Date
5 October 2011
6 January 2012
23 January 2012
Purchased
Client portfolio
Client portfolio
Client portfolio
Vendor staff employed
by Group
Maximum purchase price
Paid by 30 June 2012
Deferred consideration at
30 June 2012
Value attributed on the
Statement of Financial
Position at 30 June 2012
Business combination or
asset only
Yes
$345,252
$261,188
$84,064
100%
No
Yes
$412,685
$255,472
$157,213
$410,000
$410,000
$0
100%
100%
Business Combination
Business Combination
Business Combination
The acquired businesses contributed nominal profits to the group at balance date. If they were acquired on 1 July 2011,
management estimate a maximum revenue impact of $450,000 for the year ended 30 June 2012. 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.
P A G E 6 0 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 A N N U A L R E P O R T 2 0 1 2
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
17 CURRENT LI ABI LI TI E S – T RA D E A N D OT HE R P AY A BL E S
Trade payables
Other payables
Amounts due to related entities
Client portfolio deferred settlement
Annual leave entitlements accrued
CONSOLIDATED
PARENT ENTITY
2012
$’000
2011
$’000
2012
$’000
2011
$’000
665
902
-
385
895
972
469
-
490
851
596
670
168
-
645
983
373
168
234
622
2,847
2,782
2,079
2,380
Information about the Group’s and the parent entity’s exposure to credit and interest rate risk is shown in Note 34.
18 CURRENT LIABILITIES – CU RRE NT TA X L IA B IL IT IE S
Income tax
(29)
836
(13)
763
19 NO N C UR RE NT LI ABIL I TI ES – TRA DE A ND OT H ER PA YA B LE S
Client portfolio deferred settlement
-
142
-
-
20 NO N-C U RR E NT L IA BI L ITI E S – PR OVI SION S
CONSOLIDATED
2011
$’000
2012
$’000
PARENT ENTITY
2011
$’000
2012
$’000
Employee benefits – long service leave
803
709
596
517
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.
21 CO NTR IBUT E D E Q UI TY
(a) Share capital
Ordinary shares – fully paid
7,395
7,827
7,395
7,827
CONSOLIDATED
2011
$’000
2012
$’000
PARENT ENTITY
2011
$’000
2012
$’000
A N N U A L R E P O R T 2 0 1 2 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 P A G E 6 1
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
21 CONTRI BU T E D E QU IT Y c o n t i n u e d
(b) Movements in ordinary share capital
DATE
1 July 2010
30 June 2011
DETAILS
NUMBER OF SHARES
AVERAGE PRICE
Opening 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
Options exercised prior to 30 June and shares
issued on 5 July 2011
Transfer from share-based payments reserve
Balance
32,208,247
(171,155)
(87,074)
181,403
33,250
32,164,671
$1.39
$1.38
$1.10
$1.29
Shares bought back on-market and cancelled
Buy-back transaction costs
(359,440)
$1.20
30 June 2012
Balance
31,805,231
$’000
7,827
(239)
(121)
(1)
-
200
43
98
7,827
(431)
(1)
7,395
(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 2011 and June 2012 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 $1.20 per share, with prices ranging from $0.98 to $1.36.
The net cost of $430,365, and $1,480 of transaction costs, was deducted from equity.
At 30 June 2012, 102,347 shares remained available to be repurchased under the most recently announced buy back
notice to the ASX.
(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 25.
(f) Capital risk management
The Group’s and the parent entity’s objectives when managing capital are to safeguard their ability to continue as a
going concern, 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
P A G E 6 2 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 A N N U A L R E P O R T 2 0 1 2
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
21 CO NT RI BU TE D E Q UI T Y c o n t i n u e d
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 $4,600,000 (2011: $5,040,000).
NOTES
CONSOLIDATED
PARENT ENTITY
2012
$’000
2011
$’000
2012
$’000
2011
$’000
22 RESERV ES
Movements
Share based payments reserve
Balance 1 July
Option expense
Option lapses
Transfer to share capital (options exercised)
Balance 30 June
247
7
(37)
-
217
342
3
-
(98)
247
247
7
(37)
-
217
-
-
-
342
3
-
(98)
247
-
-
-
The share based payments reserve is used to recognise the fair value of options issued but not exercised.
Foreign currency translation
Balance 1 July
Currency translation difference arising during the year
Balance 30 June
-
2
2
-
-
-
219
247
217
247
23 RETAINE D PRO 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
9,887
2,211
-
(2,398)
9,700
8,594
4,436
-
(3,143)
9,887
8,949
2,364
-
(2,398)
8,915
7,953
4,139
-
(3,143)
8,949
8
24 K EY MANAGE ME NT P E RSON N EL DI SC LOS UR ES
(a) Key management personnel compensation
Short-term employee benefits
Post employment benefits
Share-based payments
CONSOLIDATED
PARENT ENTITY
2012
$
2011
$
2012
$
2011
$
669,092
666,335
669,092
666,335
27,876
26,683
27,876
26,683
-
-
-
-
696,968
693,018
696,968
693,018
A N N U A L R E P O R T 2 0 1 2 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 P A G E 6 3
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
24 KEY MAN AG E ME NT P E RSON N EL DI SC LOS UR ES c o n t i n u e d
(a) Key management personnel compensation (continued)
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.
2012
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**
155,000
-
-
-
-
-
-
-
155,000
155,000
-
-
* * No options are proposed to be issued in accordance with Mr Singh’s employment contract after the end of the year.
** 6,200 Adviser options issued in prior years are held by an entity in which F Khouri has an interest.
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.
(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.
2012
NAME
I Singh
R E Bucknell
F Khouri
C Stone
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
DIRECTOR OPTIONS
OTHER CHANGES
DURING THE YEAR
BALANCE AT THE END
OF THE YEAR
9,939,580
900,000
219,373
-
BALANCE AT THE
START OF THE YEAR
9,764,580
1,000,000
194,373
-
-
-
-
-
72,835
-
7,000
-
10,012,415
9,00,000
226,373
-
RECEIVED DURING
THE YEAR ON THE
EXERCISE OF
DIRECTOR 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
-
P A G E 6 4 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 A N N U A L R E P O R T 2 0 1 2
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
24 KEY MA NA GE M EN T PE R SON N EL DI SC LOS UR ES c o n t i n u e d
(b) Equity instrument disclosures relating to key management personnel (continued)
Shares provided on exercise of options
No 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 (2011: Nil).
Entities with which a director has an interest exercised no Adviser options during the year (2011: 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 (2011: 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.
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
2012
$
2011
$
233,894
229,915
222,928
238,295
456,822
468,210
Unissued ordinary shares of Fiducian Portfolio Services Limited under option at the date of this report are disclosed in Note
25 of the financial report.
No option holder has any right under the options to participate in any other share issue of the company or any other entity
until after the exercise of the option.
Shares issued on the exercise of options
The details of ordinary shares of Fiducian Portfolio Services Limited issued during the year ended 30 June 2012 on the
exercise of options granted under the Fiducian Portfolio Services Limited Employee & Director Share Option Plan and the
Adviser Share Option Plan are disclosed under Note 25 to the financial report.
A N N U A L R E P O R T 2 0 1 2 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 P A G E 6 5
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
25 SHAR E B AS E D PA YME NT S
(a) Employee and director share option plan (ESOP)
The establishment of the Fiducian Portfolio Services Limited ESOP was approved by shareholders at the 2000 annual general
meeting. The ESOP is designed to provide long-term incentives for senior managers and directors to deliver long-term
shareholder returns. Under the plan, participants are granted options which only vest if certain performance standards are
met. Participation in the plan is at the Board’s discretion and no individual has a contractual right to participate in the plan
or receive any guaranteed benefits.
The parent entity has established the ESOP, which is designed to provide incentives to employees and directors. All grants
of options under the ESOP are subject to compliance with the Corporations Act 2001 and ASX Listing Rules.
The directors may, from time to time, determine which employees and directors may participate in the ESOP, and the
number of options that may be issued to them. The directors have an absolute discretion to determine who will participate
and the number of options that may be issued. The ESOP provides for an upper limit on the number of options that may be
outstanding, the exercise price, exercise period and expiry, and adjustments in the event of capital restructuring.
The directors have resolved that the ESOP no longer applies to non-executive directors.
Options are granted under the plan for no consideration. Employee options are granted for a five year period where
35% 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 (2011: Nil) to staff during the year, and 115,375 options expired (2011:108,000) during the year ended
30 June 2012.
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
(2011: Nil) to the executive director in respect of the year ended 30 June 2012.
(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.
P A G E 6 6 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 A N N U A L R E P O R T 2 0 1 2
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
25 SHARE BA SE D P AY ME NT S C O NT IN UED
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 – 2012
ESOP – Managing Director – Note 25(a)
30 Oct 2007
30 Oct 2012
$2.65
100,000
29 Oct 2008
29 Oct 2013
$2.30
29 Oct 2010
29 Oct 2015
$1.28
ESOP – Staff – Note 25(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 25(b)
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
15,000
40,000
155,000
95,375
130,000
155,000
380,375
7,323
22,042
27,000
56,365
591,740
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100,000
100,000
15,000
40,000
15,000
40,000
155,000
155,000
(95,375)
-
-
(20,000)
110,000
110,000
-
155,000
155,000
(115,375)
265,000
265,000
(7,323)
-
-
22,042
(6,730)
20,270
(14,053)
42,312
-
22,042
20,270
42,312
(129,428)
462,312
462,312
Weighted average exercise price
$2.26
$ -
$ -
$1.60
$2.44
$2.44
The weighted average share price at the date of exercise of options exercised during the year ended 30 June 2012 was
n/a (2011 – $1.30).
The volume weighted average remaining contractual life of share options outstanding at the end of the period was
0.87 years (2011 – 1.53 years).
A N N U A L R E P O R T 2 0 1 2 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 P A G E 6 7
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
25 SHARE B ASE D P AY ME NT S C O NT IN UED
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 25(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
-
-
-
27 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 25(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 25(b)
23 Aug 2005
23 Aug 2010
$0.87
29 Aug 2006
29 Aug 2011
$1.68
30 Sep 2007
30 Sep 2012
$3.45
30 Sep 2008
30 Sep 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
Fair value of options granted
There were no options issued to the Managing Director during the year ended 30 June 2012 in respect of the prior year.
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.
P A G E 6 8 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 A N N U A L R E P O R T 2 0 1 2
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
25 SHARE BASE D PAYME NT S C O NT IN UED
The model inputs for options granted during the year ended 30 June 2012 included:
ESOP – DIRECTOR
2011
2012
ESOP – EMPLOYEES
2011
2012
ESOP – ADVISERS
2012
2011
(a) exercise price
(b) grant date:
(c) expiry date:
(d) share price at grant date:
(e) expected price volatility of
the company’s shares:
(f) expected dividend yield:
(g) risk-free interest rate:
(h) lapse (exit) rate
-
-
-
-
-
-
-
-
$1.28
27 Oct 2010
29 Oct 2015
$1.41
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
2012
$
2011
$
2012
$
2011
$
Options issued under ESOP, net of lapses
(29,821)
2,663
(29,821)
2,663
26 REMUNE RA TI ON OF AUDI TOR S
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related
practices and non-related audit firms:
CONSOLIDATED
PARENT ENTITY
2012
$
2011
$
2012
$
2011
$
PricewaterhouseCoopers Australian firm:
Audit and review of financial reports
108,667
107,470
97,470
97,470
Other audit related work, including audit of
entities for which the parent entity is trustee,
manager or responsible entity (gross of any
amounts reimbursed)
328,850
299,680
299,680
299,680
Total remuneration
437,517
407,150
397,150
397,150
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.
A N N U A L R E P O R T 2 0 1 2 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 P A G E 6 9
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
27 CONTING E NT L I AB ILI TI E S
The parent entity and Group had contingent liabilities at 30 June 2012 in respect of:
(a) bank guarantees for property leases of parent and group entities amounting to $436,000. (2011: $426,000).
(b) bank guarantee for AFS licence of a subsidiary amounting to Nil (2011: $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.
28 COMMIT MEN TS FO R E XP EN DI TURE
CONSOLIDATED
PARENT ENTITY
2012
$’000
2011
$’000
2012
$’000
2011
$’000
(a) Capital expenditure
Commitments payable within one year
-
-
-
-
(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
29 RELATE D PA R TY TR A NS AC 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.
379
396
775
448
715
1,163
245
-
245
679
345
1,024
The consolidated financial report incorporate the assets, liabilities and results of Fiducian Financial Services Pty Ltd and
Fiducian Business Services Pty Ltd in accordance with the accounting policy described in Note 1(b).
P A G E 7 0 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 A N N U A L R E P O R T 2 0 1 2
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
29 RELATE D PA R TY TR A NS AC TI ON S c o n t i n u e d
(c) Key management personnel
Disclosures relating to key management personnel are set out in Note 24.
(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 2012 and 2011 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.
The following transactions occurred with related parties:
OWNERSHIP
INTEREST*
2012
$
2011
$
2012
$
2011
$
CONSOLIDATED
PARENT ENTITY
Wholly owned group
Fiducian Financial Services Pty Ltd
Financial planning fees paid
Expenses paid and systems costs recovered
Fiducian Business Services Pty Ltd
Payment for accountants acquistion
Controlling interests
Fiducian Resourcing Services Pty Ltd
Services fees paid
Expenses paid
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%
90%
Nil
Nil
Nil
-
-
-
3,987
45,055
-
-
4,597,304
203,986
5,128,397
178,222
-
-
-
142,500
313,500
-
-
-
-
3,581,850
4,076,775
3,581,850
4,076,775
11,656,603 12,745,279
11,656,603 12,745,279
3,164,943
3,593,587
3,164,943
3,593,587
222,928
238,295
-
-
* ‘Ownership Interest’ means the percentage of capital of the company held directly and/or indirectly through another entity by Fiducian
Portfolio Services Limited
A N N U A L R E P O R T 2 0 1 2 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 P A G E 7 1
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
29 RELATE D PA R TY TR A NS AC TI ON S C O N TIN UED
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
2012
$
2011
$
2,726,299
1,965,587
2,012,250
1,845,890
4,738,549
3,811,477
168,047
168,047
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.
30 ECONO MI C DE PE N D E NC Y
The trading activity of the entity depends upon remaining as Operator of the Fiducian Investment Service, Trustee of
Fiducian Superannuation Service and Responsible Entity of Fiducian Funds.
31 REC O NC I LIATION OF PR OF IT OR L OSS A F T ER IN C OME TA X T O NET
CASH I NFLOW FR OM O PERAT I NG A C TI VI TI ES
CONSOLIDATED
PARENT ENTITY
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
2012
$’000
2,211
128
-
546
37
(529)
(865)
(30)
(301)
433
-
(82)
-
1,548
2011
$’000
4,436
37
(3)
296
2
(103)
443
6
150
(18)
-
(126)
-
5,120
2012
$’000
2,364
70
-
225
39
(163)
(776)
(30)
(381)
297
(760)
(75)
-
810
2011
$’000
4,139
(32)
(3)
172
9
(48)
492
6
164
74
(502)
(71)
-
4,400
P A G E 7 2 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 A N N U A L R E P O R T 2 0 1 2
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
32 EARNINGS PE R S HA RE
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
2012
2011
6.91 cents 13.78 cents
6.81 cents 13.44 cents
CONSOLIDATED
2012
NUMBER
2011
NUMBER
31,989,207 32,183,956
499,114
817,743
32,488,321 33,001,699
(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
2012
$’000
2,211
2011
$’000
4,436
(e) Information concerning the classification of securities
Options granted to employees under the Fiducian Portfolio Services Limited Employee Share Option Plan (ESOP) and Adviser
Share Option Plan (ASOP) are considered to be potential ordinary shares and have been included in the determination of
diluted earnings per share to the extent that they are dilutive. The options have not been included in the determination of
basic earnings per share. Details relating to the options are set out in Note 25.
A N N U A L R E P O R T 2 0 1 2 F I D U C I A N P O R T F O L I O S E R V I C E S L I M I T E D A C N 0 7 3 8 4 5 9 3 1 P A G E 7 3
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
33 EVENTS O CCU R R ING A FT ER B A L A N CE DA TE / REPO RT IN G DAT E
Under the Rules of the Adviser Share Option Plan no options are being issued this year (2011: Nil) as the plan has not been
extended. Under the same rules no options will expire after year end. (2011: 330)
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 (2011: Nil). To the date of this report 110,000 (2011: 95,375) employee options have
lapsed and no options have lapsed or been exercised by the Managing Director. To the date of the report, 23,770 shares
have been bought back on market at an average price of $0.93
34 FINANCIAL R IS K MAN AG EM ENT
The Group’s activities expose it to a variety of financial risks: market risk (including interest rate risk and price risk), credit
risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on the financial performance of the Group.
The Group uses different methods to measure different types of risk to which it is exposed. These methods include
sensitivity analysis in the case of interest rate and other price risks, and aging analysis for credit risk.
The Board sets policies which are implemented by management, reviewed monthly for interest rate risk, credit risk and the
investment of excess liquidity.
The Group and parent entity hold the following financial instruments:
CONSOLIDATED
PARENT ENTITY
2012
$’000
7,674
5,381
275
2011
$’000
10,150
4,973
425
2012
$’000
6,311
7,687
275
2011
$’000
8,332
6,865
425
13,330
15,548
14,273
15,622
2,847
2,924
2,079
2,380
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial assets at fair value through profit or loss
Financial liabilities
Trade and other payables
(a) Market risk
(i) Foreign exchange risk
The Group has limited operations outside Australia and is not exposed to any material 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% (2011: – 10%) against actual market movements, with all other variables held constant
other than financial planning fees that are paid out of such income.
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
34 FINANCIA L R IS K MAN AG EMEN T C O NT IN UED
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
2012
$’000
2011
$’000
2012
$’000
2011
$’000
(28)
(43)
(28)
(43)
1,621
1,754
1,621
1,754
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 2012
30 JUNE 2011
Weighted average
interest rate
%
Cash at bank and on deposit
Staff & financial planner loans
3.2%
5.8%
Balance
$’000
7,674
2,451
10,125
Weighted average
interest rate
%
4.3%
7.2%
Balance
$’000
10,150
2,552
12,702
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 2012 if
interest rates change by +/- 100 basis points (2011: +/- 100 basis points) from the year end rates with all other variables
held constant, post-tax profit would have been $71,000 higher or lower (2011: $89,000).
(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
2012
$’000
2011
$’000
2012
$’000
2011
$’000
-
7,674
7,674
4,596
5,554
10,150
-
6,311
6,311
2,778
5,554
8,332
275
425
275
425
2,130
2,275
2,130
2,275
The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets as summarised on
this page.
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
34 FINANCIA L R IS K MAN AG EMEN T C O NT IN UED
(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
CONSOLIDATED
PARENT ENTITY
2012
$’000
2,847
-
2,847
2011
$’000
2,782
142
2,924
2012
$’000
2,079
-
2,079
2011
$’000
2,380
-
2,380
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)
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 2012.
Parent and Group - at 30 June 2012
Assets
Other financial assets at fair value through
profit or loss
Investment in related trust
Total assets
Parent and Group - at 30 June 2011
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
-
-
-
-
275
275
275
275
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
-
-
-
-
425
425
425
425
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S C O N T I N U E D
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2
34 FINANC I AL RI SK MA NA GEMEN T C O N TIN UED
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 2012
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 34(a)(ii).
The following table presents the changes in level 3 instruments for the year ended 30 June 2012:
Parent and Group
Investment in related trust –
Opening balance
Transfers in to level 3
Capital distribution
Losses recognised in profit or loss
2012
$’000
2011
$’000
425
-
(179)
29
275
440
-
(9)
(6)
425
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.
35 N ON-CONTR OLLI NG I NTER ESTS
During the financial year the group established an overseas company in India with a local partner with 90% stake for
providing accounting and business resourcing services. The operations for the company are in its initial stages and not
material in 2012. The profit contribution of the non-controlling interests are shown separately in the Statement of
Comprehensive Income.
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D I R E C T O R S ’ D E C L A R A T I O N
In the directors’ opinion:
(a) the financial statements and notes set out on pages 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 2012 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,
27 August 2012
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 balance sheet as at 30 June 2012, 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 the 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.
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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 balance sheet as at 30 June 2012, 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 the 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.
1
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Independent auditor’s report to the members of Fiducian Portfolio Services
Limited (continued)
Independent auditor’s report to the members of Fiducian Portfolio Services
Limited (continued)
Portfolio Services Limited 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
27 August 2012
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.
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 is in accordance with the
Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the company’s and consolidated entity’s financial position as
at 30 June 2012 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 2012. The directors of the company are responsible for the preparation and
presentation of the remuneration report in accordance with section 300A of the Corporations Act
2001. Our responsibility is to express an opinion on the remuneration report, based on our audit
conducted in accordance with Australian Auditing Standards.
Auditor’s opinion
In our opinion, the remuneration report of Fiducian Portfolio Services Limited for the year ended 30
June 2012, complies with section 300A of the Corporations Act 2001.
Matters relating to the electronic presentation of the audited financial report
This auditor’s report relates to the financial report and remuneration report of Fiducian Portfolio
Services Limited (the company) for the year ended 30 June 2012 included on Fiducian Portfolio
Services Limited web site. The company’s directors are responsible for the integrity of the Fiducian
2
3
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Independent auditor’s report to the members of Fiducian Portfolio Services
Limited (continued)
Independent auditor’s report to the members of Fiducian Portfolio Services
Limited (continued)
Portfolio Services Limited 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
27 August 2012
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
In conducting our audit, we have complied with the independence requirements of the Corporations
our audit opinions.
Independence
Act 2001.
Auditor’s opinion
In our opinion:
(a)
the financial report of Fiducian Portfolio Services Limited is in accordance with the
Corporations Act 2001, including:
(i)
giving a true and fair view of the company’s and consolidated entity’s financial position as
at 30 June 2012 and of their performance for the year ended on that date; and
(ii)
complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001; and
(b)
the financial report also complies with International Financial Reporting Standards as disclosed
in Note 1.
Report on the Remuneration Report
We have audited the remuneration report included in pages 13 to 20 of the directors’ report for the
year ended 30 June 2012. The directors of the company are responsible for the preparation and
presentation of the remuneration report in accordance with section 300A of the Corporations Act
2001. Our responsibility is to express an opinion on the remuneration report, based on our audit
conducted in accordance with Australian Auditing Standards.
Auditor’s opinion
In our opinion, the remuneration report of Fiducian Portfolio Services Limited for the year ended 30
June 2012, complies with section 300A of the Corporations Act 2001.
Matters relating to the electronic presentation of the audited financial report
This auditor’s report relates to the financial report and remuneration report of Fiducian Portfolio
Services Limited (the company) for the year ended 30 June 2012 included on Fiducian Portfolio
Services Limited web site. The company’s directors are responsible for the integrity of the Fiducian
2
3
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FIDUCIAN PORTFOLIO SERVICES LIMITED
Level 4, 1 York Street, Sydney NSW 2000 Australia
GPO Box 4175, Sydney NSW 2001 Australia
Telephone: +61 (2) 8298 4600 Fax: + 61 (2) 8298 4611
www.fiducian.com.au