ANNUAL
REPORT
FIDUCIAN GROUP LIMITED | 2018
ABN 41 602 423 610
CONTENTs
Financial highlights
Five Year Financial summarY
Joint report oF the chairman
and the eXecutive deputY chairman
directors’ report
auditor’s independence declaration
Financial statements
consolidated statement oF comprehensive income
consolidated statement oF Financial position
consolidated statement oF changes in eQuitY
consolidated statement oF cash Flows
notes to the Financial statements
directors’ declaration
independent auditor’s report to the members
shareholder inFormation
corporate directorY
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15
28
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Annual report 2018 | Fiducian Group Limited New South Wales Office Locations
Abbotsford
Ballina
Bathurst
Bondi
Bondi Junction
Castle Hill
Caves Beach
Coffs Coast
Gosford
Hunter
Kellyville
Macarthur
Narrabri
Newcastle
North-East Sydney
Nowra
Randwick
Roseville
Southern Highlands
Sydney CBD
Tamworth
Taren Point
Walcha
Windsor
GROWTH
FINANCIAL hIGhLIGhTs
FOR 2018
Fund Performance
FUA
1/168
Growth
Ultra Growth 2/111
4/105
Cap Stable
6/168
Balanced
Flagship funds performance ranking
for three years to 30 June 2018
against all funds on a leading survey
$83mil
Funds Under Advice
acquired in 2017-18
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UNPAT up
21%
to $10.5mil
FUMAA up
$1 billion
(by 18%) to $6.7bil
Dividends up
25%
to 20.00 cents / share
61
Aligned
Planners &
Associates
37 Offices
across Australia
112 Staff around
Australia from
over 28 different
countries of origin
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Annual report 2018 | Fiducian Group Limited
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Australian Capital Territory Office Locations
Canberra
DIVERSIFICATION
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Annual report 2018 | Fiducian Group Limited Y
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FIvE yEAR FINANCIAL
sUMMARy
FOR ThE yEARs 2014 TO 2018
FINANCIAL hIsTORy
Financial PerFormance
gross revenue
underlying net profit after tax (unpat)
statutory net profit after tax (npat)
cost to income ratio (cti) - ex amortisation %
Financial Position
total assets
total equity
cash
shareholder inFormation
number of shares outstanding
market capitalisation (in $ mil)
eps based on unpat (in cents)
dividends (in cents)
share price - 30 June closing (in $)
2018
2017
2016
2015
2014
$’000
$’000
$’000
$’000
$’000
45,873
10,505
9,198
56%
40,562
31,132
13,885
40,752
35,451
26,253
22,874
8,710
7,512
60%
7,036
5,839
63%
5,748
4,622
62%
4,501
3,983
63%
36,277
27,620
9,548
33,690
24,127
9,691
28,770
21,191
12,374
26,363
19,351
11,194
31,242,623
31,264,368
31,110,855
30,883,398
30,757,897
146
33.6
20.0
4.66
128
27.8
16.0
4.09
72
22.6
12.5
2.31
53
18.6
10.0
1.70
50
14.6
9.1
1.62
FOR ThE FIvE yEARs 2014 TO 2018
24%
Annualised
Profit Growth
23%
Annualised
EPS Growth
7%
Cost To Income
% Reduction
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Annual report 2018 | Fiducian Group Limited
Victoria Office Locations
Mt Waverley
Sale
Surrey Hills
Ringwood
St Kilda
SIMPLE & POWERFUL
JOINT REPORT
OF ThE ChAIRMAN
AND ThE
EXECUTIvE DEPUTy
ChAIRMAN
HIGHLIGHTS
Funds Under Management Advice &
Administration up by $1.0 billion (18%)
Net underlying profit after tax up
by $1.8 million (21%)
Basic underlying earnings per share up 21%
Established position as a comprehensive
financial services provider of Platform
Administration, Funds Management, and
Financial Planning
Entry into the markets of sMA administration
and Financial Planning software sales to
external dealer groups as an IT systems
developer
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Annual report 2018 | Fiducian Group Limited
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dear shareholder,
on behalf of the directors, we jointly report on the
consolidated operating performance of Fiducian group
limited and its controlled operating entities for the year
ended 30 June 2018.
FINANCIAL INFORMATION
RESULTS FOR 2017-18
the Fiducian group result continues to show positive
momentum in operational activity and application of the
board’s strategy to grow the business.
consolidated operating revenue increased by 13% and
consolidated net revenue increased by 12% driven by
business growth. gross margin remained at 74% (2017:
74%)
during the year underlying earnings before interest,
tax, depreciation and amortisation (underlying ebitda)
increased by 21% to $14.80 million. underlying net profit
after tax (unpat) is $10.50 million an increase of 21% over
the 2017 results. this represents an underlying earnings
per share of 33.6 cents which is 21% ahead of the 2017
results. underlying npat does not include amortisation or
one off costs and therefore gives a clearer picture of the
group’s cash generating ability going forward.
the statutory net profit for the consolidated entity after
providing for income tax was $9.20 million (2017: $7.51
million), an increase of 22%.
in summary, all major operating divisions contributed
positively to the result. this is an important consideration
for shareholders, as the Fiducian group model with three
FINANCIAL hIGhLIGhTs
Year ending 30 June
Funds Under management, advice and
administration (FUmaa)
operating revenue*
Fees and charges paid*
net revenue
gross margin
Underlying eBitda
depreciation
tax on underlying earnings
Underlying nPat (UnPat)
amortisation
income from client servicing rearrangement (net of tax)
statutory nPat
Basic ePs based on UnPat (in cents)
basic eps based on npat (in cents)
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successful business streams can generate up to three
times the revenue generating capacity of simple platform
operators who obtain revenue only from administration
services or other single revenue generating businesses
such as fund management or financial planning.
the increase in operating expenses by 5% (2017: 9%)
primarily in the first half of 2018 was directed towards
further strengthening the already strong compliance lines
of defence for financial planning, expanding financial
planner and support staff positions, some systems
development to provide greater efficiency and deliver data
required by government under new legislation and as well,
business development activities.
our diversity policy encourages persons of different race,
gender, sexual orientation, religion, national or ethnic
origin, age or disability and skills to participate and receive
recognition, reward and management responsibility
commensurate with their performance. some staff
positions changed during the year which allowed for a
refreshing of some staff positions. employees are from 28
different countries of origin, 50% are female with 27% in
senior roles, while 23% are over 55 years of age.
the combined Funds under management, administration
and advice (Fumaa) have steadily grown by 237% over
the past 5 years to $6.72 billion as at June 2018, an
increase of over $1.0 billion over 2017. (see graph on next
page).
CAPITAL MANAGEMENT
a key feature of the company is that it currently remains
debt free and exhibits a positive working capital and cash
flow position.
2018
2017
$ GROwTh % ChANGE
6.72 Billion
5.68 Billion
1.0 Billion
18%
$’000
45,873
(12,117)
33,756
74%
14,832
(89)
(4,239)
10,504
(1,307)
-
9,198
33.6
29.4
$’000
40,752
5.1 million
13%
(10,480)
30,272
3.5 million
12%
74%
12,220
2.6 million
21%
(86)
(3,424)
8,710
1.8 million
21%
(1,233)
35
7,512
1.7 million
27.8
24.0
22%
21%
Annual report 2018 | Fiducian Group Limited
FUMAA (IN $ BIL)
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FINAL DIVIDEND
the board remains prudent, but is confident that the
future of the business is positive and likely to continue to
strengthen. as a result, a fully franked final dividend of 11
cents per share has been declared which will bring the
total fully franked dividend declared for the 2018 financial
year to 20 cents, an increase of 25% (2017: 16 cents). the
full year dividend represents 67% of the statutory npat for
the year. the final dividend will be paid on 12th september
2018 on issued shares held on 29th august 2018. it is
heartening to note that a shareholder who invested $1,000
in Fiducian shares in 2012-13, is now receiving $200 as a
fully franked dividend for 2017-18.
ACQUISITIONS
during the year the group has acquired around $83
million of Funds under advice for our salaried & franchised
planners. these acquisitions have started to contribute
to our revenue. as acquisitions continue to assimilate into
our processes, they should deliver increased revenue
and demonstrate our disciplined approach to balancing
growth and returns. our funds under advice now stand
at around $2.40 billion. we are continuing negotiations to
acquire more clients of financial planning practices, but
sometimes these take longer than anticipated, as we will
not compromise on quality and the compliance history of
the vendor.
MARKET BUY-BACK
during the year, 21,745 shares were bought back on the
market (2017: nil shares) leaving 31.24 million shares on
issue at year end (2017: 31.26 million).
CASH FLOW
net operating cash flows of $10.4 million were achieved
(2017: $8.6 million). after adjusting for investing activities
(acquisitions) $0.3 million and financing activities (dividends
and share buyback) $5.7 million, net cash increased by
$4.3 million (2017: decrease $0.1 million). cash at year-end
was $13.9 million (2017: $9.5 million).
an amount of $5.1 million is required for regulatory
purposes. surplus cash is planned for business
acquisitions, which should assist our future revenue and
earning capacity
STAFF AND DIRECTOR OPTIONS
in accordance with the terms and conditions of the
approved employee and director share option plan,
35,000 options (2017: 100,000) will be issued to the
executive deputy chairman in accordance with his
contract of employment subject to approval at the annual
general meeting. these options will be issued at $4.35
a share, a discount of 5% based on the average price
in June and may be converted to shares by him making
a payment of their value to the company after 1 year
and within 5 years. options are only granted when the
underlying net profit or share price increases by more than
15% over the previous year.
FINANCIAL PLANNING
during the year, Funds under advice grew from $2.14
billion in June 2017 to $2.41 billion in June 2018 due to
acquisitions of financial planning businesses, increases in
net inflows and rising financial markets. Fiducian expects
the highest level of compliance and client service from its
financial planning network. even though the generation of
higher inflows is important, our commitment is to quality.
as such, our extensive internal training program that
differentiates our financial planners from the marketplace
and enables them to deliver superior quality advice in a
compliant manner, continues. compliance is important
and we currently have one practice development manager
for every 12 financial planners as our first line of defence
and an almost similar number of compliance officers as
our second line of defence. consequently, clients receive
appropriate advice and retention of clients and funds
remains high.
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Annual report 2018 | Fiducian Group Limited
NET FUNDS INFLOWS - SIx MONTHLY (IN $ MIL)
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going forward, our focus will remain on generating inflows
through organic and inorganic growth. this implies
further acquisitions of financial planning client bases that
satisfy our strict quality criteria and as well, expanding the
franchisee network so we can continue to assist clients
who wish to achieve their financial and lifestyle goals using
our processes. staffing for recruitment in this area is likely
to increase.
SALARIED OFFICES
company owned offices with salaried financial planners in
new south wales, victoria, western australia, Queensland
and tasmania continue to contribute to overall results.
salaried offices comprise over 48.5% of funds under
advice. acquisitions made during the year have assimilated
well into our existing presence in victoria and should add
to our results going forward.
FRANCHISED OFFICES
Franchised offices now comprise around 51.5% of our
funds under advice. we have a total of 37 franchised
financial planners nationally whom we continue to assist
through practice development, compliance, para-planning,
marketing, financial planning software and investment
products and strategies. in addition, we have 4 accounting
practices in our ‘associate’ franchisee program which
aims to convert them to a full operating franchise when
educational and training programs are completed.
PLATFORM ADMINIsTRATION
platform administration offers portfolio wrap administration
for superannuation and investment services to financial
planners as well as managed discretionary accounts
(mdas) which offer investors access to a portfolio of
shares directly managed for them. negotiations are
underway with external groups of financial planners who
could use our services to administer their client share and,
fund portfolios, also called separately managed accounts
(sma).
we have the capability and capacity to offer this
administration service to the external market in conjunction
with the services we currently provide to our own
platforms. one such sma contract is currently operating
successfully and negotiations with other groups are
progressing. success in this area, which puts us in direct
competition with other platform administrators’, will add to
our revenues. with over twenty years of experience behind
us, we are confidently delivering a superior and largely
automated level of service to this market. the hallmark of
the Fiducian administration offering is quality in terms of
daily processing, accuracy and customer service. Funds
under administration increased in total by 23.1% (around
$400 million) to $1.94 billion (2017: $1.58 billion).
we continue to experience strong growth in net Fund
inflows driven by our salaried and franchised financial
planners (see graph above) we expect this positive trend
to continue.
INDEPENDENT FINANCIAL PLANNERS (IFAs)
Funds under administration for iFas are around 8.03% of
total funds under administration. efforts are underway to
build new relationships and increase net inflows from non-
aligned financial planner groups, in particular through sma
administration services
sUPERANNUATION
the superannuation trustee board established for our
public offer, superannuation wrap fund in march 2015 with
an equal number of independent and non-independent
directors is operating well. the board is supported by
the office of superannuation trustee and has outsourced
some key operational processes to other specialist service
providers. three directors were re-elected for a three-year
term following completion of their term in the office.
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Annual report 2018 | Fiducian Group Limited
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FUNDs MANAGEMENT
Fiducian manages clients’ investments through its
manage the manager system of investing. we carefully
select a range of investment managers and blend them
in our funds to advise on or manage this money through
mandates or their funds. in this way, we seek to deliver
above average returns over the short to medium term and
thereby deliver superior returns, compared with our peers,
over the longer term, as indicated below.
the process also has the potential to reduce volatility while
providing liquidity and transparency.
there were some notable performances over the three
year return period for our flagship diversified funds. the
performances of these funds to end of June 2018 are
reported in the morningstar investment performance
survey. the growth and balanced Funds were ranked
1st and 6th respectively out of 168 funds, the capital
stable Fund was ranked 4th out of 105 funds and the
ultra growth Fund was ranked 2nd out of 111 funds on
the survey. over the last ten years, thirty nine annualised
returns are reported for these funds of which all results
were ranked in the top quartile against the combined
strength of all the australian and leading international
investment managers that are managing money in
australia. this is an outstanding achievement.
INFORMATION TEChNOLOGy
Fiducian information technology division has been busy
with enhancements to deliver straight-through-processing
functionality to ‘Fastrack’ and our administration system
which provides greater control, efficiency and substantial
cost savings and, as well, opens up new business
opportunities. the improvements now in place provide
integration with our on-line reporting tools and financial
planning software ‘Force’, and as well, give greater
flexibility to administer a wider range of investments.
Further improvements towards electronic application and
processing which allow flexibility to administer different
configurations of products have been developed. a raft
of new superannuation and taxation legislation changes
were brought in last year and these required substantial it
systems development to be operational by specific dates.
we are proud to advise that our it team successfully
completed all these system modifications within the
scheduled times required by the relevant regulators.
a successful and major system development to administer
smas for external financial planning groups on Fastrack,
our platform administration system was made. this has
opened up a new source of revenue for us. in addition
Force our financial planning software has been enhanced
to receive client account data from external platforms and
as well, offer risk insurance plans.
Following on from this, we have begun offering Force to
the external market and signed on our first external user.
these developments have the potential to add to our
revenues in time and will be nurtured through additional
distribution personnel.
hUMAN REsOURCEs
MANAGEMENT AND STAFF
there were only a few staff changes during the year,
largely at the junior levels. effective reporting processes
are in place for all subsidiaries which enhance group
board oversight of our business activities. Key
performance indicators have been documented to monitor
performance. Fiducian is an equal opportunity employer.
any person irrespective of race, gender, sexual orientation,
religion, national or ethnic origin, age or disability has a
similar opportunity to work and rise to seniority within
the company subject to their skills, qualifications and
experience for the role. there are persons from 28 different
nationalities employed at Fiducian.
PLANNERS COUNCIL, IT AND PLATFORM
USER GROUPS
the planners 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 boards 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 and the platform user group again
deserve commendation for their contributions to the
developments and enhancements to our financial planning
software (Force), on-line reporting tool (Fiducian online)
and platform administration system (Fastrack).
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 ahead has
identified measures to lift profit including by acquisitions.
Future performance can also be influenced by continuing
strength in financial markets and decisive political
leadership. management remains committed to achieving
the goals and objectives set down in the plan
COMMUNITy sUPPORT
Fiducian continues to raise funds for charity. sponsorship
has also been extended to community organisations and
sporting teams linked to our planning network. vision
beyond aus, a charity supported by the Fiducian group,
has grown to assist hospitals in india, myanmar, nepal
and cambodia. over 29,845 men, women and children
who live in abject poverty have now had their eyesight
restored. we intend to continue our charitable support to
the community.
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Annual report 2018 | Fiducian Group Limited
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CURRENT ECONOMIC AND
MARKET ENvIRONMENT
the global economy overall appears to be still on track
to grow strongly this year and next, according to the
international monetary Fund (imF), with global growth
forecast to be 3.9% in 2018 and 3.9% in 2019. however, in
its latest report (July), the imF emphasises that ‘the balance
of risks has shifted further to the downside, including in the
short term’, adding that ‘among the advanced economies,
growth divergences between the united states on one side,
and europe and Japan on the other, are widening, while
growth is also becoming more uneven among developing
economies’. in particular, the imF notes that ‘in the us,
near-term momentum is strengthening’, while ‘growth
projections have been revised down for the euro area,
Japan and the united Kingdom’.
preliminary us national accounts data, released in late
July, confirms the growing strength of the us economy,
with annualised growth of 4.1% for the June quarter. on
the other hand, the whole eurozone grew by only 0.4% in
the march quarter, with even slower growth recorded in
the two largest european economies, germany (0.3%) and
France (0.2%), although growth in europe is expected to
pick up over coming months. Japan has also been relatively
weak recently and actually contracted in the march quarter
(by 0.2%), despite highly expansionary monetary policy.
however, Japan too is expected to perform more strongly
over coming months. the imF does have some concerns
about potential negative flow-on effects, especially on
developing economies, from tighter us monetary policy,
with the central bank signalling ‘two additional rate hikes in
2018 and three in 2019’ (due to strong growth, reflected in
an ‘unemployment rate below levels last registered 50 years
ago, creating additional inflationary pressures’). potential
effects on some developing economies include ‘capital
flow reductions, higher financing costs, and exchange rate
pressures’.
the australian economy grew by a solid 3.1% (year-on-
year) in the march quarter, with the main impetus coming
from export growth, mainly due to larger mining volumes
(notably iron ore and coal, our largest export items) and
higher prices for thermal coal. in fact, growth in exports
contributed half of total growth for the quarter, with
china taking an increasing share of total exports (now
over 30%). domestically though, households have been
feeling the squeeze from low growth in after-tax income,
rising household costs (such as electricity) and falling
house prices, which could affect consumer and investor
confidence over the near-term.
most major share markets barely moved over the first half
of this year, in contrast to last year’s ‘bull’ run. profit growth
though, particularly in the us, has continued to be strong,
which has improved valuations in many cases.
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major global government bond markets saw little net
movement in yields over the first half of this year, apart from
the us, where the 10-year treasury bond yield rose from
2.41% at the start of the year to 2.86% by 30 June. overall,
most bond markets continue to appear expensive.
as always, we recommend that investors should consult a
Fiducian financial planner to develop a financial plan with a
diversified investment strategy that could help them achieve
their financial goals.
OUTLOOK
the board expects profit growth to continue steadily
in the coming year as management focus on realizing
the potential of continued growth in financial planning,
platform and self-managed superannuation administration,
investment management and information technology. the
foundations of our business pillars are solid and growth
strategies are in place by building scale on existing capacity
and leveraging its relatively fixed cost base.
the revenue from recent business acquisitions should
benefit the bottom line in the current financial year.
additionally, synergy benefits from these businesses are
expected.
the board intends to continue to build scale and maintain
its acquisition and distribution growth strategy to deliver
consistent double-digit earnings growth in coming years.
however, expenditure controls and profits remain a priority.
the government has instituted a royal commission into
misconduct in the banking, superannuation and Financial
services industry. this group is monitoring the progress
of the commission. the commission’s final report and
recommendations is expected to be released in February
2019. at this stage, we believe it should be business as
usual as we provide the highest level of integrity to our
clients.
we would like to thank all participants for their individual
contributions to the growth and success of Fiducian in
what has been an eventful yet successful year with many
accompanying changes in legislation.
robert bucknell
inderjit (indy) singh
non-executive chairman
executive deputy chairman
16 august 2018
16 august 2018
Annual report 2018 | Fiducian Group Limited
FIDUCIAN SUPPORTED CHARITY -
VISION BEYOND AUS
Registered charitable fund with tax deductible
gift recipient status
Dedicated to restore eyesight for people living
in poverty
Operated across 4 countries / 7 hospitals
Eyesight restored for over 29,845 men,
women & children
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Annual report 2018 | Fiducian Group Limited
Queensland Office Locations
Buderim
Caboolture
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OPPORTUNITY
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Annual report 2018 | Fiducian Group Limited
DIRECTORs’
REPORT
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Annual report 2018 | Fiducian Group Limited
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Your directors present their report on the Fiducian group limited (“the company”) and its wholly owned operating entities
(referred to hereafter as the group) for the year ended 30 June 2018.
DIRECTORS
the following persons were directors of Fiducian group limited during the financial year and up to the date of this report:
r bucknell
i singh
F Khouri
s hallab
PRINCIPAL ACTIVITIES
during the year the principal continuing activities of the group consisted of:
(a) operating an investor directed portfolio service and managed discretionary account service, through its wholly
owned subsidiary, Fiducian investment management services limited
(b) acting as the trustee of Fiducian superannuation service through its wholly owned subsidiary, Fiducian portfolio
services limited
(c) acting as the responsible entity of Fiducian Funds through its wholly owned subsidiary, Fiducian investment
management services limited
(d) providing specialist financial planning services through its wholly owned operating subsidiary, Fiducian Financial
services pty limited
(e) providing accountancy resource services through its wholly owned operating subsidiary, Fiducian business services
pty limited
(f) providing administration and professional services to the group through its wholly owned subsidiary, Fiducian
services pty limited.
(g) development of it software systems for financial planning and wrap platform administration.
DIVIDENDS
dividends paid to members during the financial year were as follows:
Final ordinary fully franked dividend for the year ended 30 June 2017 of 8.90 cents
(2016: Fully franked 7.00 cents) per share paid on 13 september 2017.
interim ordinary fully franked dividend for the year ended 30 June 2018 of 9.00 cents
(2017: Fully franked 7.10 cents) per share paid on 15 march 2018.
total dividends paid during the year
2018
2017
$’000
2,783
$’000
2,180
2,814
2,220
5,597
4,400
in addition to the above, since the end of the financial year, the directors of the parent entity, Fiducian group limited have
declared a final fully franked dividend for the year ended 30 June 2018 of 11.00 cents per ordinary share held at 29 august
2018 and payable on 12 september 2018.
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Annual report 2018 | Fiducian Group Limited
REVIEW OF OPERATIONS
a summary of consolidated revenues and results by significant industry segments is set out below:
sEGMENT REvENUEs
sEGMENT REsULTs
2018
2017
2018
2017
Funds management
Financial planning
corporate, administration, other
profit from ordinary activities before income tax
expenses
income tax expenses
net profit attributable to members of Fiducian group limited
COMMENTS ON OPERATIONS AND RESULTS
$’000
12,740
15,370
17,763
$’000
10,169
14,943
15,640
$’000
7,595
(817)
6,659
13,437
(4,239)
9,198
$’000
5,773
74
5,089
10,936
(3,424)
7,512
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comments on the operations, business strategies, prospects and financial position are contained in the joint report of the
chairman and executive deputy chairman.
SHAREHOLDER RETURNS
the valuation of investment funds has improved substantially during the year and favourably impacted the management
fees received by the Fiducian group, as fully detailed in the joint report of the chairman and executive deputy chairman.
this has enabled Fiducian to increase profit for the second half of the year and declare a dividend distribution of 11.00
cents per share, bringing the full year dividend to 20.00 cents per share (2017: 16.00 cents).
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
in continuation of the strategy to expand the financial planning network, the group has provided funding for the acquisition
of 5 financial planning businesses in victoria, western australia and new south wales. it is estimated that these
businesses could contribute an additional $83 million in funds under advice to the group.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
other than the declaration of dividend after the end of the financial year, 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 group, to affect significantly the operations of the company, 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 executive deputy chairman have commented on expected results of operations in their Joint report.
other than this, there are no likely developments that may have significant impact on the expected results or operation of
the group.
ENVIRONMENTAL REGULATION
the group is not subject to significant environmental regulations under a commonwealth, state or territory law.
EMPLOYEE DIVERSITY
Fiducian is proud to be an equal opportunity employer. it endorses diversity and currently has a number of employees that
bring different skill-sets from their countries of origin. we recognise that diversity includes, but is not limited to gender, age,
ethnicity and cultural backgrounds. our diversity policy encourages persons of different gender, ethnic backgrounds, ages
and skills to participate and receive recognition, reward and authority commensurate with their performance. employees
are comprised of staff from over 28 countries of origin, 23% over 55 years, and 50% female with 27% in senior roles.
the group’s current gender diversity report is available to be viewed on the group website.
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Annual report 2018 | Fiducian Group Limited
KEy MANAGEMENT PERsONNEL DIsCLOsUREs
(A) DIRECTORS
the following persons were directors of Fiducian group limited during the financial year:
chairman (non-executive) r bucknell
executive deputy chairman
and managing director
i singh (appointed executive deputy chairman at the annual general meeting
on 19 october 2017)
non-executive directors
F Khouri
s hallab
(B) INFORMATION ON CURRENT DIRECTORS
r Bucknell Fca. Chairman – non-executive.
Experience and expertise
chairman since inception in 1996. extensive experience in accounting and business management over the past 52 years
as a chartered accountant.
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Other current directorships in listed entities
none
Former directorships in the last 3 years
none
Special responsibilities
chairman of the group, the remuneration committee, and the group audit risk and compliance committee.
Interest in shares and options
583,000 ordinary shares in Fiducian group limited.
i singh cFP, Btech, mcomm (Bus), asia, asFa, dip. FP. Executive Deputy Chairman.
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 29 years.
Other current directorships in listed entities
none
Former directorships in the last 3 years
none
Special responsibilities
executive deputy chairman, managing director and company secretary
Interest in shares and options
10,523,851 ordinary shares in Fiducian group limited.
200,000 options for ordinary shares in Fiducian group limited
F G Khouri B Bus, FcPa, cta 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.
Other current directorships in listed entities
none
Former directorships in the last 3 years
none
Special responsibilities
director of Fiducian portfolio services limited (trustee subsidiary), member of the audit risk and compliance committees
for both the group and super, and member of the group and trustee remuneration committees.
Interest in shares and options
268,323 ordinary shares in Fiducian group limited
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s hallab B ec (accnt & law), ca, Gaicd, Faist Independent non-executive director
Experience and expertise
appointed to the board 12 august 2016. chartered accountant and registered company auditor. has over 35 years
experience in finance and superannuation.
Other current directorships in listed entities
company secretary of ensurance limited (asX code: ena).
Former directorships in the last 3 years
none
Special responsibilities
director of Fiducian portfolio services limited (trustee subsidiary), member of the audit risk and compliance committee,
and member of the remuneration committee.
Interest in shares and options
31,000 ordinary shares in Fiducian group limited.
(C) COMPANY SECRETARY
the company secretary is mr i singh cFp,b tech, m comm. (bus), asia, asFa, dip. Fp. mr. singh has been the secretary
since inception in 1996, and is supported by legal counsel employed by Fiducian.
(D) MEETING OF DIRECTORS
the numbers of meetings of the company’s board of directors and of each board committee held during the year ended 30
June 2018, and the numbers of meetings attended by each director were:
MEETINGs OF DIRECTORs
MEETINGs OF COMMITTEEs
BOARD
B
6
6
6
6
a
6
6
6
6
AUDIT RIsK &
COMPLIANCE
B
a
5
-
6
6
6
-
6
6
REMUNERATION
a
1
-
1
-
B
1
-
1
1
r bucknell
i singh
F Khouri
s hallab
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.
(E) OTHER KEY MANAGEMENT PERSONNEL
mr i singh as executive deputy chairman of Fiducian group limited, had authority for and responsibility for planning,
directing and controlling the activities of the group, directly or indirectly, during the financial year ended 30 June 2018. this
authority and responsibility is unchanged from the previous year.
(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 - e includes remuneration disclosures that are required under australian
accounting standard aasb 124 related party disclosures. these disclosures have been included in the director’s report
and have been audited.
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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 to market practice for delivery of reward. the board seeks to ensure
that executive reward satisfies the following key criteria for good reward governance practices:
• competitiveness and reasonableness
• acceptability to shareholders
• performance linkage / alignment of executive compensation
• transparency
• capital management
(a) 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 not
entitled to options under the employee and director share option plan.
Directors’ fees
the current base remuneration was last reviewed in July 2018. the chairman and other external directors are paid a
fixed fee for participation in board and committees meetings plus a fee based on time spent on any additional matters
as approved by the board. 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 for the company are determined within an aggregate directors’ fee pool limit, which is
periodically recommended for approval by shareholders. the maximum pool is $450,000 a year which was approved by
shareholders’ at the annual general meeting on 20 october 2016.
Retirement allowance 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 executive deputy chairman are formalised in a service agreement.
the executive deputy chairman’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, executive deputy chairman
• Term of agreement - until 30 June 2019
• Base salary, inclusive of superannuation and salary sacrifice benefits.
• Death and TPD/Trauma cover
• Short term performance incentives
• Long term incentives through the Fiducian Group Limited Employee and Director Share Option Plan, and
• Retirement benefits
• The employment agreement may be terminated by either party with six-month notice
the combination of these comprises the executive’s total remuneration package.
an external remuneration consultant advises the remuneration committee, at least every 3 years, to ensure that the group
has structured an executive remuneration package that is market competitive and complimentary to the reward strategy of
the organisation. their most recent review was in July 2018.
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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Short-term incentives (STI)
the sti aims to provide an incentive to Key management personnel to act in the best interests of the Fiducian group
(company), it shareholders, clients, staff and all stakeholders, such that the company achieves and possibly exceeds its
targets for the financial year. in setting or paying a sti or bonus, the remuneration committee ensures that a bonus does
not encourage undue risk taking that would be detrimental to any part of the company or its clients
board policy dictates that the executive deputy chairman’s performance for a financial year is reviewed and evaluated by
the remuneration committee. the cornerstone to assessing the performance of the executive deputy chairman is the
fulfilment of three broad objectives namely:
a) activities that ensure delivery of quality output to standards and timeliness which ensure compliance with statutory
guidelines and as well, enhance customer and stakeholder relationships;
b) production of results and growth outcomes that enable business plan objectives to be achieved; and
c) leadership, management of staff, strengthening good corporate culture and managing risks.
Key performance indicators (Kpis) of the executive deputy chairman are set by the remuneration committee. the
remuneration committee uses both objective and subjective measures in its evaluation and on the basis of the
methodology below, the executive deputy chairman achieved 89% of the Kpis set.
the business and operating areas considered are Financial planning, Funds management, platform administration, risk
management, legal, information technology, marketing, Finance and business development & distribution. each business
area senior manager has a number of underlying Kpis that lie within the broad objectives a), b), and c) outlined above. the
underlying Kpis of each senior manager may differ and depend on their roles and responsibilities. the executive deputy
chairman sets the underlying Kpis for each senior manager and so each business area has a number of performance
measures required to be delivered during the year. achievement by senior managers of all the Kpis identified for them
would satisfy the board that sufficient personal exertion has been contributed towards achievement of the targets set in the
business plan for the year, which is approved by the board. a failure to achieve or deliver on any Kpi item within the three
broad objectives by any business area stated above is therefore considered a failure by the executive deputy chairman to
achieve all his Kpis.
the employment contract with the executive deputy chairman stipulates that a maximum of 20% of that year’s fixed
remuneration should be paid to the executive deputy chairman if all Kpis are satisfied. the executive deputy chairman
was therefore entitled to a sti of $97,900. the executive deputy chairman declined his full entitlement and accepted the
sum of $50,000 as the cash bonus component.
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 of June market value for ordinary shares in the company
the options are issued under the company’s esop at the rate of 5,000 options for each 1% increase in annual profit in
excess of 15% or 5,000 options for each 1% increase in the 30-day average for June market value for ordinary shares in
the company whichever is higher and only after approval by the shareholders of the company. For the year ended 30 June
2018 mr. singh is entitled to 35,000 options at an exercise price of $4.35.
Retirement benefits
retirement benefits are delivered under the Fiducian superannuation service. this fund provides accumulation benefits
based on the sgc contributions by the specified executive, on commercial terms and conditions. other retirement
benefits may be provided directly by the group only if approved by the shareholders. payment of a termination benefit
on early termination by the executive deputy chairman or by mutual consent is equal to 6 months of the gross annual
remuneration.
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Annual report 2018 | Fiducian Group Limited
B - DETAILS OF REMUNERATION
the key management personnel of the group were the following executive and non-executive directors during the year:
• R Bucknell
Non-Executive Chairman
• I Singh
• F Khouri
• S Hallab
Executive Deputy Chairman
Non-Executive Director
Non-Executive Director
Amounts of remuneration
details of the remuneration of the key management personnel are set out in the following table
2018
shORT-TERM EMPLOyEE BENEFITs
POsT-EMPLOyMENT
BENEFITs
shARE-
BAsED
PAyMENT
NAME
CAsh
sALARy
& FEEs
CAsh
BONUs
NON-
MONETARy
BENEFITs
sUPER
ANNUATION
RETIREMENT
BENEFITs
OPTIONs
TOTAL
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$
-
-
-
$
non-executive
directors
r bucknell1,2
116,200
(chairman)
F Khouri3
s hallab
executive
directors
i singh4
totals
85,043
61,096
524,991
50,000
787,330
50,000
$
-
-
-
-
-
$
-
8,079
5,804
20,049
33,932
$
-
-
-
-
-
$
-
-
-
$
116,200
93,122
66,900
45,278
640,318
45,278
916,540
1 excludes gst if paid to another firm
2 including amounts paid to the director’s company only in respect to director’s duties
3 this excludes fees of $222,320 for financial planning services paid to companies in which mr Khouri has an interest in his capacity as a
financial planner.
4 mr i singh is entitled to 35,000 options in respect of the year ended 30 June 2018. these are subject to approval at the annual general
meeting on 25 october 2018.
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2017
shORT-TERM EMPLOyEE BENEFITs
POsT-EMPLOyMENT
BENEFITs
shARE-
BAsED
PAyMENT
NAME
CAsh
sALARy
& FEEs
CAsh
BONUs
NON-
MONETARy
BENEFITs
sUPER
ANNUATION
RETIREMENT
BENEFITs
OPTIONs
TOTAL
non-executive
directors
r bucknell1,2
(chairman)
F Khouri3
c stone4
s hallab5
executive
directors
i singh6
totals
$
113,000
84,562
13,361
25,543
$
-
-
-
-
515,384
40,000
751,850
40,000
$
-
-
-
-
-
-
$
-
8,033
1,269
2,427
19,615
31,344
$
-
-
-
-
-
-
$
-
-
-
-
$
113,000
92,595
14,630
27,970
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51,265
626,264
51,265
874,459
1 excludes gst if paid to another firm
2 including amounts paid to the director’s company only in respect to director’s duties
3 this excludes fees of $217,240 for financial planning services paid to companies in which mr Khouri has an interest in his capacity as a
financial planner
4 the remuneration of mr stone relates to the period of 1 July 2016 to 20 october 2016 when mr stone resigned as director of the group
5 the remuneration of mr hallab relates to the period commencing from 12 august 2016 when mr hallab was appointed as director of the
head entity
6 mr i singh was also entitled to 100,000 options in respect of the year ended 30 June 2017 which was not considered part of the table
above pending approval at the annual general meeting. these were approved at the annual general meeting on 19 october 2017.
C - SERVICE AGREEMENTS AND INDUCTION PROCESS
the service agreement of the executive director is detailed in paragraph a(b) earlier. there are no service agreements with
non-executive directors or employees.
in preparation for appointment to the board, all non-executive directors undergo an induction program and receive an
induction pack of documents necessary for them to understand Fiducian’s charters, 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) Options compensation and holdings
options over shares in Fiducian group 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 24.
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the numbers of options for ordinary shares in the company held directly by directors of Fiducian group 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.
2018
NAME
BALANCE AT
ThE sTART
OF ThE yEAR
EXERCIsED
GRANTED DURING
ThE yEAR As
REMUNERATION1
LAPsED
DURING ThE
yEAR
BALANCE AT
ThE END OF
ThE yEAR
vEsTED AND
EXERCIsABLE
i singh1
100,000
-
100,000
-
200,000
100,000
1 under the terms of his employment mr i singh is entitled to 35,000 options relating to the current year. these are subject to approval at
the annual general meeting on 25 october 2018 and therefore, these have not been included above. options granted during the year are
in respect of the entitlement relating to 2016-17.
2017
NAME
BALANCE AT
ThE sTART
OF ThE yEAR
EXERCIsED
GRANTED DURING
ThE yEAR As
REMUNERATION1
LAPsED
DURING ThE
yEAR
BALANCE AT
ThE END OF
ThE yEAR
vEsTED AND
EXERCIsABLE
i singh1
100,000
100,000
100,000
-
100,000
-
1 under the terms of his employment mr i singh is entitled to 100,000 options relating to the current year. these were subject to approval
at the annual general meeting on 19 october 2017 and were issued subsequent to 30 June 2017, therefore, these have not been
included above. options granted during the year are in respect of the entitlement relating to 2015-16.
(ii) Share holdings
the numbers of shares in the company held by current directors of Fiducian group limited, including their personally
related and associated entities, are set out below. no shares were granted during the period as compensation.
2018
NAME
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
i singh
r bucknell
F Khouri
s hallab
2017
10,523,851
583,000
268,323
-
-
-
-
-
-
-
-
31,000
10,523,851
583,000
268,323
31,000
NAME
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
i singh
r bucknell
F Khouri
s hallab
c stone
10,423,851
100,000
800,000
251,373
-
33,700
-
-
-
-
-
(217,000)
16,950
-
(33,700)
10,523,851
583,000
268,323
-
-
Shares provided on exercise of options
during the year there were no ordinary shares issued as a result of the exercise of remuneration options to a director of
Fiducian group limited during the period (2017: 100,000). no amounts are unpaid on any shares issued on the exercise of
options.
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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 previous year. For the current year ended 30 June 2018 there has been a small increase
in the base salary of the executive deputy chairman. cash bonuses granted in respect of the current financial year ended
on 30 June 2018 is $50,000 (2017: $40,000) and the grant of options entitlements have been only in accordance with the
incentive programs. the executive deputy chairman is entitled to 35,000 options in respect of the current year ended 30
June 2018 (2017: 100,000 options) subject to shareholder approval.
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 (2016: nil). details of loans to related parties of the directors have
been disclosed in note 28 related party transactions.
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OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
a director, mr r bucknell, is a director 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.
a director mr s hallab was paid director’s fees for his personal contribution to the board.
aggregate amounts of each of the above types of other transactions with directors of Fiducian group limited:
directors’ fees and committee fees
Financial planning fees paid or payable
SHARES UNDER OPTION
CONsOLIDATED
2018
2017
$
$
276,222
222,320
498,542
248,195
217,240
465,435
unissued ordinary shares of Fiducian group limited under option at the date of this report are disclosed in note 24 of
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 group limited issued during the year in respect of 2018 and 2017 years on the
exercise of options granted under the Fiducian group limited employee & director share option plan are disclosed under
note 24 to the Financial report.
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INDEMNIFICATION AND INSURANCE OF OFFICERS
under the terms of its constitution, Fiducian indemnifies all past and present directors of Fiducian and its wholly-owned
subsidiaries against certain liabilities and costs incurred by them in their respective capacities.
the constitution of Fiducian group limited provides the following indemnification of officers:
• To indemnify officers of the Company and related bodies corporate to the maximum extent permitted by law.
• To allow the Company to pay a premium for a contract insuring directors, the secretary and executive officers of
Fiducian group 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 group 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.
PROCEEDINGS ON BEHALF OF THE COMPANY
no person has applied to the court under section 237 of the corporations act 2001 for leave to bring proceedings on
behalf of the company, or to intervene in any proceedings to which the company is a party, for the purpose of taking
responsibility on behalf of the company for all or part of those proceedings.
no proceedings have been brought or intervened in on behalf of the company with leave of the court under section 237 of
the corporations act 2001.
NON-AUDIT SERVICES
the company may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the company and/or Group are important.
the board of directors is satisfied that the provision of non-audit services by the auditor did not compromise the auditor
independence requirements of the corporations act 2001 for the following reasons:
• all non-audit services have been reviewed by the audit committee to ensure they do not impact the impartiality and
objectivity of the auditor
• none of the services undermine the general principles relating to auditor independence as set out in APES110 Code of
Ethics for Professional Accountants
the fees paid or payable for services provided during the year by the auditor (pricewaterhousecoopers) of the parent
entity, its related practices and non-related audit firms, are shown in note 26 to the consolidated financial report.
AUDITORS’ INDEPENDENCE DECLARATION
a copy of the auditors’ independence declaration as required under section 307c of the corporations act 2001 is set out
on page 28.
ROUNDING OF AMOUNTS
The Company is of a kind referred to in Class Order 2016/191, 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.
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CORPORATE GOVERNANCE
a description of the group’s current corporate governance practices is available on the group’s website and can be viewed
at https://www.fiducian.com.au/wp-content/uploads/corporate_docs/Corporate_Governance_Statement.pdf.
this report is made in accordance with a resolution of the directors.
inderjit (indy) singh
executive deputy chairman
sydney,
16 august 2018
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AUDITOR’s INDEPENDENCE
DECLARATION
Auditor’s Independence Declaration
As lead auditor for the audit of Fiducian Group Limited for the year ended 30 June 2018, I declare that
to the best of my knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements of the
relation to the audit; and
in
Corporations Act 2001
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Fiducian Group Limited and the entities it controlled during the
period.
Craig Stafford
Partner
PricewaterhouseCoopers
Sydney
16 August 2018
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999,
www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
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Annual report 2018 | Fiducian Group Limited Tasmania Office Locations
Devonport
Hobart
Launceston
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NEW BEGINNINGS
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Annual report 2018 | Fiducian Group Limited
FINANCIAL
sTATEMENTs
consolidated statement oF comprehensive income
consolidated statement oF Financial position
consolidated statement oF changes in eQuitY
consolidated statement oF cash Flows
notes to the Financial statements
directors’ declaration
independent auditor’s report to the members
32
33
34
35
36
73
74
Fiducian group limited is a company limited by shares, incorporated and domiciled in
australia. its registered office and principal place of business is :
Fiducian group limited
level 4, 1 York street,
sydney, nsw 2000.
this financial statements were authorised for issue by the directors on 16 august 2018.
the directors have the power to amend and reissue the financial statements.
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Annual report 2018 | Fiducian Group Limited
CONsOLIDATED sTATEMENT OF
COMPREhENsIvE INCOME
FOR ThE yEAR ENDED 30 JUNE 2018
NOTEs
CONsOLIDATED
2018
2017
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revenue from ordinary activities
other income
payments to advisers and service providers
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
total comprehensive income for the year
profit is attributable to:
owners of Fiducian group limited
earnings per share
earnings per share from profit from continuing
operations attributable to the ordinary equity
holders of the company:
basic earnings per share (in cents)
diluted earnings per share (in cents)
4
5
6(a)
6(b)
7
30
$’000
45,438
435
(12,117)
(12,428)
(1,396)
(6,495)
13,437
(4,239)
9,198
-
9,198
9,198
$’000
40,426
326
(10,480)
(12,210)
(1,319)
(5,807)
10,936
(3,424)
7,512
-
7,512
7,512
29.42 cents
29.28 cents
24.04 cents
24.00 cents
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
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Annual report 2018 | Fiducian Group Limited
CONsOLIDATED sTATEMENT OF
FINANCIAL POsITION
As AT 30 JUNE 2018
NOTEs
CONsOLIDATED
assets
current assets
cash and cash equivalents
trade and other receivables
total current assets
non-current assets
loan receivables
property, plant and equipment
intangible assets
total non-current assets
total assets
liaBilities
current liabilities
trade and other payables
current tax liabilities
total current liabilities
non-current liabilities
net deferred tax liabilities
provisions
total non-current liabilities
total liabilities
net assets
eQUitY
contributed equity
reserves
retained profits
total equity
2018
$’000
13,885
4,976
18,861
5,738
186
15,776
21,700
40,561
6,081
1,460
7,541
1,357
532
1,889
9,430
31,131
7,041
130
23,960
31,131
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10
11
13
15
16
17
18
19
20
21
22
The above statement of financial position should be read in conjunction with the accompanying notes.
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2017
$’000
9,548
4,369
13,917
6,323
223
15,814
22,360
36,277
5,576
1,280
6,856
1,420
381
1,801
8,657
27,620
7,141
120
20,359
27,620
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Annual report 2018 | Fiducian Group Limited
CONsOLIDATED sTATEMENT OF
ChANGEs IN EqUITy
As AT 30 JUNE 2018
NOTEs
CONTRIBUTED
EqUITy
REsERvEs
RETAINED
PROFITs
TOTAL
$’000
$’000
$’000
$’000
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Balance as at 30 June 2016
6,855
67
17,205
24,127
profit for the year
other comprehensive income
total comprehensive income for the
year
transactions with equity holders in
their capacity as equity holders
shares issued for the acquisition of
business
dividends provided for or paid
shares issued on exercise of options
transfer to retained earning
transfer from reserves
options expense
total transactions with equity holders
8
21
-
-
-
123
-
163
-
-
-
286
-
-
-
-
-
-
(42)
-
95
53
7,512
-
7,512
7,512
-
7,512
-
123
(4,400)
(4,400)
-
-
42
-
163
(42)
42
95
(4,358)
(4,019)
Balance as at 30 June 2017
7,141
120
20,359
27,620
profit for the year
other comprehensive income
total comprehensive income for the
year
transactions with equity holders in
their capacity as equity holders
shares bought back-on market and
cancelled
shares issued on exercise of option
dividends provided for or paid
transfer to retained earning
transfer from reserves
options expense
total transactions with equity holders
Balance as at 30 June 2018
8
21
-
-
-
(100)
-
-
-
-
-
(100)
7,041
-
-
-
-
-
-
-
-
10
10
9,198
-
9,198
-
-
9,198
-
9,198
(100)
-
(5,597)
(5,597)
-
-
-
-
-
10
(5,597)
(5,687)
130
23,960
31,131
The above statement of changes in equity should be read in conjunction with the accompanying notes.
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Annual report 2018 | Fiducian Group Limited
CONsOLIDATED sTATEMENT OF
CAsh FLOws
FOR ThE yEAR ENDED 30 JUNE 2018
cash flows from operating activities
receipts from customers
(inclusive of goods and services tax)
payments to suppliers and employees
(inclusive of goods and services tax)
interest received
income taxes paid
net cash inflow from operating activities
29
cash flows from investing activities
payments in relation to acquisitions
net payment to and on behalf of advisers for business development
payments for property, plant and equipment
proceeds from client servicing rearrangement
net cash outflow from investing activities
cash flows from financing activities
payments for shares bought back
shares issued on exercise of options
dividends paid
net cash outflow from financing activities
net increase/(decrease) in cash held
cash and cash equivalents at the beginning of the year
cash and cash equivalents at the end of year
9
NOTEs
CONsOLIDATED
2018
2017
$’000
$’000
49,143
44,151
(34,756)
(32,281)
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14,387
435
(4,444)
10,378
(827)
526
(44)
-
(345)
(100)
-
(5,597)
(5,697)
4,337
9,548
13,885
11,870
326
(3,511)
8,685
(1,742)
(2,889)
(10)
50
(4,591)
-
163
(4,400)
(4,237)
(143)
9,691
9,548
The above statement of cash flows should be read in conjunction with the accompanying notes.
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Annual report 2018 | Fiducian Group Limited
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1. sUMMARy OF sIGNIFICANT ACCOUNTING POLICIEs
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 Fiducian group
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 group limited is a for-profit entity for the purpose of preparing the financial statements.
Compliance with IFRS
the financial report of Fiducian group 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 judgment in the process of applying the group’s accounting policies. the areas involving a higher degree
of judgment 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 group limited
(company or parent entity) as at 30 June 2018 and the results of all controlled entities for the year then ended. Fiducian
group limited and its subsidiaries together are referred to in this financial report as the group.
subsidiaries are all entities (including structured entities) over which the group has control. the group controls an entity
when the group is exposed, to or has rights to, variable returns from its involvement with the entity and has the ability to
affect those returns through its power to direct the activities of the entity. subsidiaries are fully consolidated from the date
on which control is transferred to the group. they are de-consolidated from the date that control ceases. investments in
subsidiaries are accounted for at cost in the parent company’s financial report.
the acquisition method of accounting is used to account for the business combinations by the group.
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. non-controlling
interests in the results and equity of subsidiaries are shown separately in the statement of comprehensive income.
(C) REVENUE AND ExPENSE 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 and expenses are recognised for the major business activities as follows:
(i) Management fees and Fees, payments to advisers and service providers
revenues comprising trustee and management fees are recognised on an accruals basis. Fees, payments to advisers
and service providers are recognised as the associated services are provided.
(ii) Interest income
interest income is brought to account using the effective interest method. the effective interest rate method calculates
the amortised cost of a financial instrument and allocates the interest income over the relevant period.
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Annual report 2018 | Fiducian Group Limited
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1. sUMMARy OF sIGNIFICANT ACCOUNTING POLICIEs
(CONTINUED)
(D) INCOME TAx
the income tax expense or benefit 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 nor 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 use those temporary differences and losses.
deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases
of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not reverse in the foreseeable future.
deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. current tax assets and tax liabilities are
offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the
asset and settle the liability simultaneously.
current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in
equity.
Tax consolidation
Fiducian group limited and its wholly owned subsidiaries have implemented the tax consolidation legislation with Fiducian
group limited as the head entity of the tax consolidated group. as a consequence, these entities are taxed as a single
entity and the deferred tax assets and liabilities of these entities are set off in the consolidated financial statements.
the head entity has entered into a tax sharing agreement and a tax funding agreement with the members of the tax
consolidated group. under the tax funding agreement, the members of the group are required to contribute to the head
entity for their current tax liabilities. the assets and liabilities arising under the tax funding agreements are recognised
as intercompany assets and liabilities at call. members of the tax consolidated group via the tax sharing agreement may
be called to provide for the income tax liabilities between the entities should the head entity default on its tax payment
obligations. no amount has been recognised in respect of this component of the agreement as the outcome is considered
remote.
(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 27). 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 group acts as a trustee of Fiducian superannuation service through a subsidiary, Fiducian portfolio services ltd,
and acts as the operator of an investor directed portfolio service, Fiducian investment service, managed discretionary
account service and the responsible entity of Fiducian Funds (“the trusts”) through another subsidiary, Fiducian
investment management services ltd. the accounting policies adopted by these companies in the preparation of their
financial reports and that of the group for the year ended 30 June 2018 reflect the fiduciary nature of these company’s
responsibilities and that of the group 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 these companies or the group. 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 these companies
or the group having to meet the liabilities of the trusts as remote.
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1. sUMMARy OF sIGNIFICANT ACCOUNTING POLICIEs
(CONTINUED)
(G) IMPAIRMENT OF ASSETS
goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually
for impairment or more frequently if events or changes in circumstances indicate that they might be impaired. other
assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may
not be recoverable. an impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its
recoverable amount. the recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For
the purposes of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable
cash flows which are largely independent of the cash flows from other assets or groups of assets (cash-generating units).
non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at
each reporting date.
(H) CASH AND CASH EQUIVALENTS
For cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call
with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
(I) TRADE RECEIVABLES
trade receivables are recognised at fair value and subsequently measured at amortised cost, less provision for impairment.
trade receivables are due for settlement no more than 120 days from the date of recognition for trade receivables and
financial planning fees, and no more than 30 days for other receivables.
collectability of trade receivables is reviewed on an ongoing basis. receivables, which are known to be uncollectible, are
written off. an allowance account (provision for impairment of trade receivables) is used when there is objective evidence
that the group will not be able to collect all amounts due according to the original terms of the receivables. significant
financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default
or delinquency in payments (outside settlement terms) are considered indicators that the trade receivable is impaired.
the amount of the impairment allowance is the difference between the asset’s carrying amount and the present value of
estimated future cash flows, discounted at the original effective interest rate. cash flows relating to short-term receivables
are not discounted if the effect of discounting is immaterial.
the amount of the impairment loss is recognised in the statement of comprehensive income within other expenses. when
a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period,
it is written off against the allowance account. subsequent recoveries of amounts previously written off are credited against
other expenses in the statement of comprehensive income.
(J) BUSINESS COMBINATIONS
the acquisition method of accounting is used to account for all business combinations, regardless of whether equity
instruments or other assets are acquired. the purchase consideration transferred for the acquisition of a subsidiary
comprises the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the acquirer.
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, measured initially at their fair values at the acquisition date.
the excess of the purchase consideration and the acquisition-date fair value over the 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 re-measured to fair value with changes in fair value recognised in profit or loss.
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Annual report 2018 | Fiducian Group Limited
1. sUMMARy OF sIGNIFICANT ACCOUNTING POLICIEs
(CONTINUED)
(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.
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. subsequent to initial recognition, loans are measured at amortised cost
using the effective interest method and are presented net of provisions form impairment.
(L) FAIR VALUE ESTIMATION
the carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair
values due to their short-term nature. the fair value of financial liabilities for disclosure purposes is estimated by discounting
the future contractual cash flows at the current market interest rate that is available to the group for similar financial
instruments.
(M) PROPERTY, PLANT AND EQUIPMENT
property, plant and equipment is stated at historical cost less depreciation. historical cost includes expenditure that is
directly attributable to the acquisition of the items.
subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item
can be measured reliably. all other repairs and maintenance are charged to the statement of comprehensive income during
the financial period in which they were incurred.
depreciation on assets is calculated using the straight-line method to allocate their cost or revalued amounts, net of their
residual values, over their estimated useful lives, as follows:
Furniture, office equipment and computers
2 – 8 years
leasehold improvements
term of the lease
the asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
an asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount in note 1(g).
gains and losses on disposals are determined by comparing proceeds with carrying amount. these are included in the
statement of comprehensive income.
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1. sUMMARy OF sIGNIFICANT ACCOUNTING POLICIEs
(CONTINUED)
(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 or client portfolio at the date of acquisition. goodwill on acquisitions 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.
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 that 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 is 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 before the end of the financial year and
which are unpaid. the amounts are unsecured and are usually paid within 30 days of recognition.
(P) PROVISIONS
provisions for legal claims are recognised when the group has a present legal or constructive obligation as a result of past
events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably
estimated. provisions are not recognised for future operating losses.
where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined
by considering the class of obligations as a whole. a provision is recognised even if the likelihood of an outflow with
respect to any one item included in the same class of obligations may be small.
provisions are measured at the present value of management’s best estimate of the expenditure required to settle the
present obligation at reporting date. the discount rate used to determine the present value reflects current market
assessments of the time value of money and the risks specific to the liability
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Annual report 2018 | Fiducian Group Limited
1. sUMMARy OF sIGNIFICANT ACCOUNTING POLICIEs
(CONTINUED)
(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 and sick leave is brought to account as incurred.
(ii) Long service leave
the liability for long service leave is recognised in the provision for employee benefits and measured as the present value
of expected future payments to be made in respect of services provided by employees up to the reporting date using the
projected unit cost method. consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. expected future payments are discounted using market yields at the reporting date
on corporate 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 via the share option plans. information relating to this
scheme is set out in note 24.
subsequent options issued to employees for no consideration 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.
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(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
along with the consideration paid is deducted from equity and the shares are regarded as treasury shares until they are
cancelled. no gain or loss is recognised in the profit or loss and the consideration paid including any directly incremental
costs (net of income taxes) is recognised directly in equity. treasury shares are bought with the intention of cancellation
and are not reissued.
(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.
P a g e 4 1
Annual report 2018 | Fiducian Group Limited
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
1. sUMMARy OF sIGNIFICANT ACCOUNTING POLICIEs
(CONTINUED)
(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 2016/191 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 2018
reporting periods. the group has decided not to early adopt any of the standards available for early adoption. 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
aasb 9 Financial instruments addresses the classification, measurement, recognition and derecognition of financial
assets and financial liabilities while revising the rules for hedge accounting and impairment. Fiducian will first apply
aasb 9 from 1 July 2018 and the standard will be applied retrospectively in respect of classification, measurement and
impairment. there are no requirements to restate comparatives and the cumulative effect of initially applying the standard
will be recognised as an opening balance sheet adjustment. the group has completed its assessment of the impacts
of the standard and does not see any impact from the revised recognition and measurement provisions or hedge
accounting rules . with the impairment rules, Fiducian’s modelling does not indicate that there will be any material effect
on the move from an incurred credit loss model to an expected credit loss model.
AASB 15 Revenue from Contracts with Customers
aasb 15 replaces the current guidance on revenue recognition from contracts with customers. it requires identification
of all performance obligations within a transaction and the associated transaction price allocated to these obligations.
revenue is recognised upon satisfaction of these performance obligations when control of these goods or services are
transferred to the customer. when revenue is received from contracts which involve a variable consideration, revenue
is recognised when it is highly probable that there will be no significant reversal of the variable component. Fiducian
will apply aasb 15 from 1 July 2018 with no comparative restatements. Fiducian has completed its assessment of the
impacts on the revenue streams of the group and based on this assessment the principles of aasb 15 are broadly
consistent with Fiducian’s current accounting policies. therefore, there will not be any material impact on adoption of
aasb 15.
AASB 16 Lease (effective from 1 January 2019)
the standard introduces a single lease accounting model and removes the current distinction between operating and
financial leases. it requires the recognition of an asset (the right to use leased item) and financial liability to pay rentals for
the lease contract. Fiducian is in the process of assessing the implication of this standard on its operating leases.
P a g e 4 2
Annual report 2018 | Fiducian Group Limited
2. CRITICAL ACCOUNTING EsTIMATEs AND AssUMPTIONs
in preparing the annual report, the group makes estimates and assumptions concerning the future which management
believe are reasonable. however, actual results in the future may differ from those reported and therefore it is reasonably
possible, on the basis of existing knowledge, that the outcomes in future may differ from management’s assumptions and
estimates and may require adjustments to the carrying amounts of the assets and liabilities reported. the estimates and
assumptions 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).
(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 the cash-
generating units have been determined based on earnings multiples requiring the use of sustainable revenue estimates
and comparable market transactions.
3. sEGMENT INFORMATION
(A) DESCRIPTION OF SEGMENTS
Business segments
the business activities of the group have been segregated into business segments based on legal entities and reviewed by
management accordingly. the business segments are as follows:
Financial Planning
the group continued its specialist financial planning operations through its subsidiary, Fiducian Financial services pty ltd.
Funds Management
the group through its subsidiary, Fiducian investment management services ltd, acts as an operator of an investor
directed portfolio service, Fiducian investment service and as responsible entity for managed investment schemes.
Corporate and Administration
the administration and professional services are provided to the group by a subsidiary, Fiducian services pty ltd.
management views this as an operating segment. For the current year the operations of Fiducian portfolio services ltd
which acts as an rse of the public offer superannuation fund and Fiducian business services pty ltd which provides
accountancy resources services have been aggregated in this segment as management have concluded that these
segments do not meet the quantitative thresholds required by aasb 8 operating segments. the figures and segments of
the previous year have been adjusted to make them comparable with the current year.
Geographical segments
the group operates in the geographical segments of australia and in india. the indian operations which are in the course
of winding up are not considered material for a separate geographical segment disclosure during the financial year 2018.
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
P a g e 4 3
Annual report 2018 | Fiducian Group Limited
3. sEGMENT INFORMATION (CONTINUED)
(B) PRIMARY REPORTING - BUSINESS SEGMENTS
FUNDs
MANAGEMENT
FINANCIAL
PLANNING
CORPORATE,
ADMINIsTRATION
& OThER
sEGMENT
ELIMINATIONs CONsOLIDATED
$’000
$’000
$’000
$’000
$’000
2018
revenue from external
customers
inter-segment sales 1
other revenue
total segment revenue
profit from ordinary
activities
before income tax expense
income tax expense
profit from ordinary
activities
after income tax expense
15,631
15,849
13,958
(3,000)
109
12,740
(276)
271
15,844
3,276
55
17,289
7,595
(817)
6,659
-
-
-
-
-
segment assets
9,163
24,697
segment liabilities
5,147
5,114
17,926
1,168
(11,225)
(1,999)
acquisitions of plant and
equipment, intangibles and
other non-current segment
assets
depreciation, amortisation
and impairment
-
-
1,251
1,305
69
91
-
-
1 intersegment sales for the current period represents internal service charges from administration entity to other business lines.
45,438
-
435
45,873
13,437
(4,239)
9,198
40,561
9,430
1,320
1,396
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
P a g e 4 4
Annual report 2018 | Fiducian Group Limited
3. sEGMENT INFORMATION (CONTINUED)
(B) PRIMARY REPORTING - BUSINESS SEGMENTS (CONTINUED)
FUNDs
MANAGEMENT
FINANCIAL
PLANNING
CORPORATE,
ADMINIsTRATION
& OThER
sEGMENT
ELIMINATIONs CONsOLIDATED
$’000
$’000
$’000
$’000
$’000
2017
revenue from external
customers
inter-segment sales 1
other revenue
12,711
15,279
(2,640)
98
(532)
196
total segment revenue
10,169
14,943
12,436
3,172
32
15,640
profit from ordinary
activities
before income tax expense
income tax expense
profit from ordinary
activities
after income tax expense
5,773
74
5,089
-
-
-
-
-
segment assets
8,130
23,932
segment liabilities
3,511
4,780
15,332
2,259
(11,118)
(1,893)
acquisitions of plant and
equipment, intangibles and
other non-current segment
assets
depreciation, amortisation
and impairment
-
-
1,008
1,211
15
108
-
-
1 intersegment sales for the current period represents internal service charges from administration entity to other business lines.
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
40,426
-
326
40,752
10,936
(3,424)
7,512
36,276
8,657
1,023
1,319
P a g e 4 5
Annual report 2018 | Fiducian Group Limited
3. sEGMENT INFORMATION (CONTINUED)
(C) OTHER SEGMENT INFORMATION
(i) Segment revenue
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 operation as follows:
total segment revenue
inter-segment eliminations
total revenue from continuing operations (note 4)
CONsOLIDATED
2018
2017
$’000
$’000
45,438
40,426
-
-
45,438
40,426
the entity is domiciled in australia. the amount of its revenue from external customers in australia is $45,438,000 (2017:
$40,426,000).
(ii) Segment assets
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).
(iii) 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.
4. REvENUE FROM ORDINARy ACTIvITIEs
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
From continuing operations
sales revenue
Fees received 1
other
revenue from ordinary activities
CONsOLIDATED
2018
2017
$’000
$’000
44,605
833
45,438
39,666
760
40,426
1 includes expense recovery fee of $3,826,000 (2017: $3,943,000). For details refer to the note 6 expenses.
5. OThER INCOME
CONsOLIDATED
2018
2017
$’000
$’000
435
435
326
326
Interest received/receivable
other income
P a g e 4 6
Annual report 2018 | Fiducian Group Limited
6. EXPENsEs
Profit before income tax includes the following expenses:
a) depreciation and amortisation expense
depreciation
Furniture office equipment and computers
leasehold improvements
total depreciation
amortisation
capitalised computer software
client portfolio acquisition costs
total amortisation
impairment
goodwill
total impairment expense
CONsOLIDATED
2018
2017
$’000
$’000
26
54
80
9
1,307
1,316
-
-
29
57
86
12
1,186
1,198
35
35
total depreciation, amortisation and impairment expense
1,396
1,319
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
b) other expenses
professional services
sales marketing and travel
rental expense relating to operating leases
premises and equipment
communication and computing
printing and stationery
auditors remuneration (note 25)
regulatory fees
administration and other
expense recovery1
458
1,402
1,071
192
757
231
562
352
2,089
(619)
6,495
383
1,233
939
285
771
203
524
182
1,853
(566)
5,807
1 under the administration agreement entered into by the trustee, Fiducian portfolio services limited, on behalf of Fiducian superannuation
service (Fss) with Fiducian services pty ltd (‘the administrator’) the expenses of Fss are paid on the trustee’s behalf by the administrator
and are reimbursed by Fss by way of an expense recovery Fee paid out of the expense reserve in Fss. For the current year the expense
recovery Fee of $3,826,000 (2017: $3,943,000) has been included in revenue from ordinary activities in note 4 as part of Fees received.
P a g e 4 7
Annual report 2018 | Fiducian Group Limited
7. INCOME TAX EXPENsE
a) income tax expense
current tax
deferred tax
income tax expense
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
Deferred income tax/(revenue) expense included in income tax expense comprises:
Decrease/(Increase) in deferred tax assets (Note 14)
(decrease) in deferred tax liabilities (note 18)
deferred tax
(b) numerical reconciliation of income tax expense to prima facie tax
payable
profit from continuing operations before income tax expense
tax at the australian tax rate of 30%
tax effect of amounts which are not deductible (taxable) in calculating taxable income:
entertainment
sundry items
income tax under provided in previous year
income tax expense
(c) tax consolidation legislation
CONsOLIDATED
2018
2017
$’000
$’000
4,620
(381)
4,239
6
(387)
(381)
4,003
(579)
3,424
(232)
(347)
(579)
13,437
4,031
10,936
3,281
51
48
109
4
42
97
4,239
3,424
Fiducian group limited and its wholly owned subsidiaries have formed a tax consolidated group. as a consequence these
financial statements have been prepared on a tax-consolidated basis where the head entity has assumed the tax liabilities
initially recognised by the standalone taxpayers.
P a g e 4 8
Annual report 2018 | Fiducian Group Limited
8. DIvIDENDs
Final ordinary fully franked dividend for the year ended 30 June 2017 of 8.90 cents
(2016: Fully franked 7.00 cents) per share paid on 13 september 2017.
interim ordinary fully franked dividend for the year ended 30 June 2018 of 9.00 cents
(2017: Fully franked 5.50 cents) per share paid on 15 march 2018.
total dividends paid during of the year
CONsOLIDATED
2018
2017
$’000
2,783
$’000
2,180
2,814
2,220
5,597
4,400
the directors have declared a final fully franked dividend for the year ended 30 June 2018 in the amount of 11 cents per
ordinary share to be paid on shares registered on 29 august 2018 and payable on 12 september 2018.
Franked dividends
the franked portions of the final dividends recommended after 30 June 2018 will be franked out of existing franking credits.
Franking credits available for the subsequent financial year based on a tax rate of
30%
CONsOLIDATED
2018
2017
$’000
13,688
$’000
11,541
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 $1,473,000 (2017: $1,192,000).
9. CURRENT AssETs - CAsh AND CAsh EqUIvALENTs
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
cash at bank and in hand
CONsOLIDATED
2018
2017
$’000
13,885
13,885
$’000
9,548
9,548
P a g e 4 9
Annual report 2018 | Fiducian Group Limited
10. CURRENT AssETs - TRADE AND OThER RECEIvABLEs
amounts receivable from related 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 the year
additional provision during the year
balance at end of the year
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
CONsOLIDATED
2018
2017
$’000
$’000
3,818
410
3
1,067
142
5,440
(464)
4,976
(287)
(177)
(464)
3,300
238
3
833
282
4,656
(287)
4,369
(82)
(205)
(287)
at 30 June 2018, a provision for impairment exists for trade receivables outstanding greater than 120 days where
management considers that the receivable is impaired.
information about the group’s exposure to credit and interest rate risk in relation to trade and other receivables is provided in
note 32.
11. NON-CURRENT AssETs - LOAN RECEIvABLEs
business development loans *
staff loans *
less: provision for impairment of loans
* refer to note 10 for the current portion of these receivables
(A) IMPAIRED RECEIVABLES
CONsOLIDATED
2018
2017
$’000
5,916
10
(188)
5,738
$’000
6,427
24
(128)
6,323
$60,000 has been provided against a business development loan of $449,600 in the current year (2017: $128,000).
P a g e 5 0
Annual report 2018 | Fiducian Group Limited
11. NON-CURRENT AssETs - LOAN RECEIvABLEs
(CONTINUED)
(B) FAIR VALUES
the fair values and carrying values of non-current receivables of the group are as follows:
business development loans*
staff loans*
2018
2017
CARRyING
AMOUNT
FAIR vALUE
CARRyING
AMOUNT
FAIR vALUE
$’000
5,728
10
5,738
$’000
5,728
10
5,738
$’000
6,299
24
6,323
$’000
6,299
24
6,323
business development loans and staff loans are carried at amortised cost; their carrying value is a reasonable approximation
of fair value.
12. NON-CURRENT AssETs - OThER FINANCIAL AssETs
the group’s principal subsidiaries as at 30 June 2018 are set out below.
NAME OF ENTITy
COUNTRy OF
INCORPORATION
CLAss OF
shAREs
EqUITy hOLDING
%
Fiducian investment management services ltd (“Fim”)1
Fiducian portfolio services ltd (“Fps”)2
Fiducian services pty ltd (“Fsl”)3
Fiducian Financial services pty ltd (“FFs”)4
Fiducian business services pty ltd (“Fbs”)5
australia
australia
australia
australia
australia
ordinary
ordinary
ordinary
ordinary
ordinary
100
100
100
100
100
1 the company acts as the responsible entity of the Fiducian Funds and the operator of the Fiducian investment service
2 the company acts as the trustee for the Fiducian superannuation service
3 the company provides the administration and professional services to the other entities within the group
4 the principal activity of the company is the development of a specialist financial planning services network
5 the principal activity of the company is to provide bookkeeping, accounting and tax processing services
in addition to the above subsidiaries, Fiducian business services has 90% equity investment in Fiducian resourcing
services pvt ltd, a company incorporated in india, providing accounting and tax processing services to the group. the
operations of this company which are in the process of being wound up are not considered material to the group in 2018.
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
P a g e 5 1
Annual report 2018 | Fiducian Group Limited
13. NON-CURRENT AssETs - PROPERTy, PLANT & EqUIPMENT
Plant and equipment
Furniture, office equipment and computers
less: accumulated depreciation
CONsOLIDATED
2018
2017
$’000
$’000
1,641
(1,455)
186
1,598
(1,375)
223
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
MOVEMENTS
reconciliation of the carrying amount of each class of property, plant and equipment are set out below.
FURNITURE
AND OFFICE
EqUIPMENT
COMPUTERs
LEAsEhOLD
IMPROvEMENTs
TOTAL
$’000
$’000
$’000
$’000
consolidated at 1 July 2016
cost
accumulated depreciation
net book amount
Year ended 30 June 2017
opening net book amount
additions
disposals
Depreciation/amortisation charge
closing net book amount
at 30 June 2017
cost
accumulated depreciation
net book amount
Year ended 30 June 2018
opening net book amount
additions
disposals
Depreciation/amortisation charge
closing net book amount
at 30 June 2018
cost
accumulated depreciation
net book amount
290
(219)
71
71
5
-
(18)
58
295
(237)
58
58
-
-
(14)
44
295
(251)
44
462
(430)
32
32
6
-
(11)
27
468
(441)
27
27
44
-
(13)
58
512
(454)
58
835
(640)
195
195
-
-
(57)
138
835
(697)
138
138
-
-
(54)
84
835
(751)
84
1,587
(1,289)
298
298
11
-
(86)
223
1,598
(1,375)
223
223
44
-
(81)
186
1,642
(1,456)
186
P a g e 5 2
Annual report 2018 | Fiducian Group Limited
14. NON-CURRENT AssETs – DEFERRED TAX AssETs
the balance comprises temporary differences attributable to:
doubtful debts
employee benefits
accrued expenditure
provision for audit and taxation services
provision for Fbt
restructure expenses
deferred tax assets before set off
set off against deferred tax liabilities (note 18)
movements:
opening balance at 1 July
taken to the statement of comprehensive income
deferred tax assets before set off
set off against deferred tax liabilities
CONsOLIDATED
2018
2017
$’000
$’000
196
573
215
130
11
74
1,199
(1,199)
-
1,205
(6)
1,199
(1,199)
-
124
538
290
123
19
111
1,205
(1,205)
-
973
232
1,205
(1,205)
-
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
15. NON-CURRENT AssETs - INTANGIBLE AssETs
deferred expenditure
capitalised expenditure – computer software
less: accumulated amortisation
client portfolios
cost of acquisition of client portfolios
less: accumulated amortisation
Goodwill
goodwill on acquisition
less: accumulated amortisation
CONsOLIDATED
2018
2017
$’000
$’000
5,029
(5,023)
6
14,027
(5,592)
8,435
7,799
(464)
7,335
15,776
5,029
(5,014)
15
12,949
(4,286)
8,663
7,600
(464)
7,136
15,814
P a g e 5 3
Annual report 2018 | Fiducian Group Limited
15. NON-CURRENT AssETs - INTANGIBLE AssETs
(CONTINUED)
(A) MOVEMENTS
movements in each category are set out below:
ACqUIsITION
OF CLIENT
PORTFOLIOs
GOODwILL ON
ACqUIsITION
CAPITALIsED
COMPUTER
sOFTwARE
TOTAL
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
consolidated at 1 July 2016
cost
accumulated depreciation
net book amount
Year ended 30 June 2017
opening net book amount
additions*
Disposals/write off
impairment charge
amortisation charge**
closing net book amount
at 30 June 2017
cost
accumulated depreciation
net book amount
Year ended 30 June 2018
opening net book amount
additions*
Disposals/write off
impairment charge
amortisation charge**
closing net book amount
at 30 June 2018
cost
accumulated depreciation
net book amount
$’000
12,365
(3,099)
9,266
9,266
763
(180)
-
(1,186)
8,663
12,949
(4,286)
8,663
8,663
1,079
-
-
(1,307)
8,435
14,027
(5,592)
8,435
$’000
7,449
(464)
6,985
6,985
241
(90)
-
-
7,136
7,600
(464)
7,136
7,136
199
-
-
-
7,335
7,799
(464)
7,335
$’000
$’000
5,021
(5,002)
19
19
8
-
-
(12)
15
5,029
(5,014)
15
15
-
-
-
(9)
6
5,029
(5,023)
6
24,835
(8,565)
16,270
16,270
1,012
(270)
-
(1,198)
15,814
25,578
(9,764)
15,814
15,814
1,278
-
-
(1,316)
15,776
26,856
(11,079)
15,776
* capitalised computer software costs includes an internally generated intangible asset. the assets in this category have been amortised
on the basis of 5 year useful life.
** amortisation of $1,316,000 (2017 : $1,198,000) is included in depreciation, and amortisation expense in the statement of
comprehensive income.
(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.
P a g e 5 4
Annual report 2018 | Fiducian Group Limited
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
15. NON-CURRENT AssETs - INTANGIBLE AssETs
(CONTINUED)
(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.
(D) IMPAIRMENT CHARGE
during the year, no impairment charge was recorded against goodwill to reflect the lower payment on final settlement for the
acquisition of a portfolio of client assets relating to financial planning and business services respectively (2017: $35,000).
(E) SENSITIVITY ANALYSIS
the estimates and judgments included in the fair value calculations are based on historical experience and other factors,
including management’s and the directors’ expectations of future events that are believed to be reasonable under the
current circumstances. other than (d) above there has been no impairment recognised for the Fiducian group cgus in the
impairment assessment performed at 30 June 2018. based on management’s current assessment, the recoverable amount
of Fiducian’s cgus exceeds the carrying amount by $7.35 million.
(F) BUSINESS COMBINATION
during the year the group had made the following acquisitions:
sEGMENT
FIDUCIAN ENTITy
date
purchased
vendor staff employed by group
maximum purchase price
paid by 30 June 2018
deferred consideration at 30 June 2018
value attributed on the statement of Financial position
as at 30 June 2018
business combination or asset only
provisional fair value of assets recognized
as a result of acquisition are as follows:
intangible assets
deferred tax liabilities
net identifiable assets acquired
goodwill
net assets acquired
FINANCIAL
PLANNING
FINANCIAL
PLANNING
FIDUCIAN
FINANCIAL
sERvICEs PTy LTD
FIDUCIAN
FINANCIAL
sERvICEs PTy LTD
7 dec 2017
4 may 2018
client portfolio
client portfolio
no
$380,000
$380,000
-
100%
no
$463,894
$373,943
$89,951
100%
business combination
business combination
$504,000
($151,200)
$352,800
$27,200
$380,000
$463,894
($139,168)
$324,726
$139,168
$463,894
while each acquisition is considered on its own merits, a number of synergies are expected to result once the business
combination has been fully implemented. this may include leverage from the existing scale Fiducian has from its
infrastructure in risk, compliance, it, legal, Finance and other support functions, products and processes.
the acquired businesses did not contribute significantly to the group’s current year profits. however, if the acquisitions had
taken place on 1 July 2017, management estimate a maximum revenue impact of $745k for the year ended 30 June 2018.
it is not practicable to estimate the profit contribution given the significant change in the cost bases to the operation of the
business once within the Fiducian group.
under the terms of the agreements for the acquisitions, the deferred consideration may be reduced in respect of any
clients that have not transferred to the group within the period specified in the agreements or should the recurring income
be lower than contracted for.
P a g e 5 5
Annual report 2018 | Fiducian Group Limited
16. CURRENT LIABILITIES - TRADE AND OTHER PAyABLES
trade payables
other payables*
client portfolio deferred settlement
annual leave entitlements accrued
long service leave entitlements accrued
CONsOLIDATED
2018
2017
$’000
2,032
2,319
198
705
827
$’000
1,799
1,917
448
665
747
6,081
5,576
information about the group’s exposure to credit and interest rate risk is shown in note 32.
* other payables include retirement benefits payable to planners covered under salary agreements with Fiducian Financial services pty
limited. under the terms of the agreement with certain long serving salaried financial planners, those planners 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 payment is subject to further ongoing conditions, including client retention, provision of
support services to the entity to achieve this aim. the benefit is personal to the planner, is not transferable, can be stopped by or repaid
to Fiducian Financial services pty ltd should there be a breach of conditions, and will be reduced if the planner purchases some or all
of their client base at or after retirement. this arrangement has been accounted for in accordance with aasb 119 employee benefits.
17. CURRENT LIABILITIEs - CURRENT TAX LIABILITIEs
income tax
CONsOLIDATED
2018
2017
$’000
1,460
1,460
$’000
1,280
1,280
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
P a g e 5 6
Annual report 2018 | Fiducian Group Limited
18. NON-CURRENT LIABILITIEs-DEFERRED TAX LIABILITIEs
the balance comprises temporary differences attributable to:
Amounts recognised in profit and loss:
amortisation of client portfolios
deferred tax liabilities before set off
set off against deferred tax assets
net deferred tax liabilities
movements:
opening balance at 1 July
addition during the year
taken to the statement of comprehensive income
deferred tax liabilities at 30 June before set off
set off against deferred tax assets
net deferred tax liabilities
expiration of net deferred tax liabilities
within 12 months
after 12 months
19. NON - CURRENT LIABILITIEs-PROvIsIONs
deferred settlements - payments
employee benefits - long service leave
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
CONsOLIDATED
2018
2017
$’000
$’000
2,556
2,556
(1,199)
1,357
2,625
318
(387)
2,556
(1,199)
1,357
413
944
1,357
2,625
2,625
(1,205)
1,420
2,738
233
(346)
2,625
(1,205)
1,420
381
1,039
1,420
CONsOLIDATED
2018
2017
$’000
$’000
154
378
532
-
381
381
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.
P a g e 5 7
Annual report 2018 | Fiducian Group Limited
20. CONTRIBUTED EqUITy
(A) SHARE CAPITAL
ordinary shares - fully paid
(B) MOVEMENTS IN ORDINARY SHARE CAPITAL
CONsOLIDATED
2018
2017
$’000
7,041
7,041
$’000
7,141
7,141
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
DATE
DETAILs
NUMBER OF shAREs AvERAGE PRICE
$’000
1 July 2016
opening balance
31,110,855
-
6,855
shares issued for the acquisition of
business
shares issued on exercise of options
53,513
100,000
$2.29
$1.63
123
163
30 June 2017 balance
31,264,368
-
7,141
share bought back-on market and
cancelled
shares issued on exercise of options
30 June 2018 balance
(C) ORDINARY SHARES
(21,745)
$4.55
(100)
-
31,242,623
-
-
-
7,041
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 presents 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 1 July 2017 and 30 June 2018 the company purchased and cancelled ordinary shares on-market in order to
reduce the company’s capital and surplus liquidity. during the financial year the shares were acquired at an average price
of $ 4.55 per share, with prices ranging from $4.20 to $4.80.
at 30 June 2018, 478,255 shares remained available to be repurchased under the most recently announced buy back
notice to the asX.
(E) OPTIONS
information relating to Fiducian group employee & director and options issued, exercised and lapsed during the year is set
out in note 24.
P a g e 5 8
Annual report 2018 | Fiducian Group Limited
20. CONTRIBUTED EqUITy (CONTINUED)
(F) CAPITAL RISK MANAGEMENT
the group’s objectives when managing capital of the wholly owned subsidiaries within the group are to safeguard its
ability to continue as a going concern, to individually continue to meet externally imposed capital requirements of apra
and asic under its registrable superannuation entity (rse) license, responsible entity (re) licence and their australian
Financial services (aFs) license, 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 asic re licence, the re, Fiducian investment management services limited, must maintain $5,000,000 net
tangible assets at all times during the financial year.
b. under its aFs licence, Fiducian portfolio services limited must maintain $150,000 cash at all times during the financial
year.
the requirement under the aFs licence and re licences are maintained by placing cash on deposit with an adi. the
requirement under the aFs licence is monitored monthly when management accounts are prepared, and is reported to the
board monthly at each meeting.
21. REsERvEs
movements
share-based payments reserve
balance 1 July
option expense
transfer to retained profits (on exercise of options)
balance at 30 June
CONsOLIDATED
2018
2017
$’000
$’000
120
10
-
130
67
95
(42)
120
the share-based payments reserve is used to recognise the fair value of options issued but not exercised.
22. RETAINED PROFITs
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
movements
balance 1 July
net profit for the year
dividends paid (note 8)
transfer from share-based payment reserve (on exercise of options)
balance at 30 June
CONsOLIDATED
2018
2017
$’000
$’000
20,359
9,198
(5,597)
-
23,960
17,205
7,512
(4,400)
42
20,359
P a g e 5 9
Annual report 2018 | Fiducian Group Limited
23. KEy MANAGEMENT PERsONNEL DIsCLOsUREs
(A) KEY MANAGEMENT PERSONNEL
short-term employee benefits
post-employment benefits
share-based payment
CONsOLIDATED
2018
2017
$
837,330
33,932
45,278
916,540
$
791,850
31,344
51,265
874,459
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
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, 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
group limited, including their personally related and associated entities, are set out below.
NAME
BALANCE AT
ThE sTART OF
ThE yEAR
EXERCIsED
2018
GRANTED
DURING ThE
yEAR As
REMUNERATION
LAPsED
DURING ThE
yEAR
BALANCE AT
ThE END OF
ThE yEAR
vEsTED AND
EXERCIsABLE
i singh1
100,000
-
100,000
-
200,000
100,000
1 under the terms of his employment mr i singh is entitled to 35,000 options relating to the current year. these are subject to approval at
the annual general meeting on 25 october 2018 and therefore, these have not been included above. options granted during the year are
in respect of the entitlement relating to 2016-17.
NAME
BALANCE AT
ThE sTART OF
ThE yEAR
EXERCIsED
2017
GRANTED
DURING ThE
yEAR As
REMUNERATION
LAPsED
DURING ThE
yEAR
BALANCE AT
ThE END OF
ThE yEAR
vEsTED AND
EXERCIsABLE
i singh1
100,000
100,000
100,000
-
100,000
-
1 under the terms of his employment mr i singh is entitled to 100,000 options relating to the current year. these were subject to approval
at the annual general meeting on 19 october 2017 and were issued subsequent to 30 June 2017, therefore, these have not been
included above. options granted during the year are in respect of the entitlement relating to 2015-16.
P a g e 6 0
Annual report 2018 | Fiducian Group Limited
23. KEy MANAGEMENT PERsONNEL DIsCLOsUREs
(CONTINUED)
(B) EQUITY INSTRUMENT DISCLOSURES RELATING TO KEY MANAGEMENT PERSONNEL
(CONTINUED)
(iii) Shareholdings
the numbers of shares in the company held during the financial year by each director of Fiducian group limited, including
their personally related and associated entities, are set out below. there were no shares granted during the period as
compensation
2018
RECEIvED DURING
ThE yEAR ON ThE
EXERCIsE OF
OPTIONs
NAME
BALANCE AT ThE
sTART OF ThE yEAR
i singh
r bucknell
F Khouri
s hallab
10,523,851
583,000
268,323
-
OThER ChANGEs
DURING ThE yEAR
BALANCE AT ThE
END OF ThE yEAR
-
-
-
-
-
-
-
31,000
10,523,851
583,000
268,323
31,000
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
NAME
BALANCE AT ThE
sTART OF ThE yEAR
2017
RECEIvED DURING
ThE yEAR ON ThE
EXERCIsE OF
OPTIONs
OThER ChANGEs
DURING ThE yEAR
BALANCE AT ThE
END OF ThE yEAR
i singh
r bucknell
F Khouri
c stone
10,423,851
100,000
-
10,523,851
800,000
251,373
33,700
-
-
-
(217,000)
16,950
(33,700)
583,000
268,323
-
Shares provided on exercise of options
during the year no ordinary shares in the company were issued as a result of the exercise of remuneration options to the
executive deputy chairman of Fiducian group limited, as key management person of the group. (2017: 100,000). 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 (2017: nil). details of loans to related parties of the directors has
been disclosed in note 28 related party transactions.
P a g e 6 1
Annual report 2018 | Fiducian Group Limited
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
23. KEy MANAGEMENT PERsONNEL DIsCLOsUREs
(CONTINUED)
(D) OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
a director, mr r bucknell, is a director of hunter place services pty ltd, a company which provides his services as a
director to the group.
a director, mr F Khouri, is an authorised representative under the Fiducian Financial services pty ltd australian Financial
services licence and is a director and shareholder of hawkesbury Financial services pty ltd, which is a franchisee of
Fiducian Financial services pty ltd. hawkesbury Financial services pty ltd places business with and receives financial
planning remuneration from the group. all transactions are on normal commercial terms and conditions.
a director mr s hallab was paid director’s fees for his personal contribution to the board.
aggregate amounts of each of the above types of other transactions with directors of Fiducian group limited:
directors’ fees
Financial planning fees paid or payable
CONsOLIDATED
2018
2017
$
276,222
222,320
498,542
$
248,195
217,240
465,435
details of these fees and explanations for the increase have been provided in the remuneration report included in the
director’s report.
Shares under option
unissued ordinary shares of Fiducian group limited under option at the date of this report are disclosed in note 26 of the
financial report.
no option holder has any right under the options to participate in any other share issue of the company or any other entity
until after the exercise of the option.
Shares issued on the exercise of options
the details of ordinary shares of Fiducian group limited issued during the year ended 30 June 2018 on the exercise of
options granted under the Fiducian group limited employee & director share option plan is disclosed under note 24 to
the financial report.
24. shARE BAsED PAyMENTs
(A) EMPLOYEE AND DIRECTOR SHARE OPTION PLAN (ESOP)
the establishment of the Fiducian group 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.
Fiducian group limited (‘Fgl’) 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 balance 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.
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Annual report 2018 | Fiducian Group Limited
S
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N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
24. shARE BAsED PAyMENTs (CONTINUED)
the exercise price of options is based on the volume weighted average price at which the company’s shares are traded on
the australian securities exchange during the month preceding the date the options are granted. during the year 100,000
options @ $3.77 were issued (2017: 100,000 options @ $2.18) to the executive deputy chairman and no employee options
expired during the same period (2017: nil).
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 being met in accordance with his executive
agreement. the directors have resolved to issue 35,000 options (2017: 100,000) at an exercise price of $4.35 to the
executive director in respect of the year ended 30 June 2018.
the assessed fair value at reporting date of the share based payments during the year ended 30 June 2018 was $0.72 per
option (2017: $0.62). the fair value at reporting date has been independently calculated using the black scholes pricing
model. the assumptions included in the valuation of these options include a risk-free-interest rate of 1.25%, a nil dividend
yield on the ordinary shares of the company and a volatility in the company’s share price of 30% based on historical share
price.
set out below are summaries of options granted under various option plans:
BALANCE
AT sTART
OF ThE
yEAR
GRANTED
DURING
ThE yEAR
EXERCIsED
DURING
ThE yEAR
LAPsED
DURING
ThE
yEAR
BALANCE
AT END
OF ThE
yEAR
vEsTED &
EXERCIsABLE
AT ThE END
OF yEAR
NUMBER
NUMBER
NUMBER
NUMBER NUMBER
NUMBER
weighted average exercise price
$2.18
$3.77
100,000
-
-
100,000
100,000
100,000
-
-
-
-
-
-
-
-
100,000
100,000
200,000
$2.98
100,000
-
100,000
-
the volume weighted average remaining contractual life of share options outstanding at the end of the period was 3.81
years (2017: 4.31 Years).
BALANCE
AT sTART
OF ThE
yEAR
GRANTED
DURING
ThE yEAR
EXERCIsED
DURING
ThE yEAR
LAPsED
DURING
ThE
yEAR
BALANCE
AT END
OF ThE
yEAR
vEsTED &
EXERCIsABLE
AT ThE END
OF yEAR
NUMBER
NUMBER
NUMBER
NUMBER NUMBER
NUMBER
GRANT
DATE
EXPIRy
DATE
EXERCIsE
PRICE
consolidated 2018
esop-executive deputy chairman
20 oct 16 20 oct 21
20 oct 17 20 oct 22
$2.18
$3.77
GRANT
DATE
EXPIRy
DATE
EXERCIsE
PRICE
consolidated 2017
esop-executive deputy chairman
23 oct 14 23 oct 19
20 oct 16 20 oct 21
$1.63
$2.18
weighted average exercise price
$1.63
$2.18
$1.63
100,000
-
100,000
-
100,000
-
100,000
100,000
100,000
-
-
-
-
-
100,000
100,000
$2.18
-
-
-
-
the volume weighted average remaining contractual life of share options outstanding at the end of the period was
4.31 years (2016: 3.32 Years)
(B) 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 $45,278 (2017: $51,265).
P a g e 6 3
Annual report 2018 | Fiducian Group Limited
25. REMUNERATION OF AUDITORs
during the year the following fees were paid or payable for services provided by the auditor of the parent entity and its
related practices:
audit services
pricewaterhousecoopers australian firm:
audit and review of financial reports
other audit related work, including audit of entities for which a group entity is trustee,
manager or responsible entity (gross of any amounts reimbursed)
total remuneration
CONsOLIDATED
2018
2017
$
$
142,447
138,974
419,498
561,945
385,026
524,000
it is the group’s policy to employ pricewaterhousecoopers on assignments additional to its statutory audit duties where
pricewaterhousecoopers’ expertise and experience with the group are important, on the proviso that the auditor’s
independence is not affected.
26. CONTINGENT LIABILITIEs
the parent entity and group had contingent liabilities at 30 June 2018 in respect of bank guarantees for property leases of
parent and group entities amounting to $590,357 (2017: $405,000).
in addition to the above, the group is aware of the continuing activities of the royal commission into misconduct in
the banking, superannuation and Financial services industry and is monitoring its progress. the group has not been
contacted by the commission and believes that its strong compliance and governance practices along with the relatively
high level of resources committed to this area should support its transparent client relationship based model. it means that
the matters being identified at the commission present limited risk to the group. as part of its ongoing commitment to
maintain the highest level of integrity to its clients, the group is conducting reviews to ensure that its services remain of the
highest quality. consequently, the group has not found it necessary to make any provision.
27. COMMITMENTs FOR EXPENDITURE
(A) CAPITAL ExPENDITURE
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
commitment payable within one year
(B) OPERATING LEASES
CONsOLIDATED
2018
2017
$’000
-
$’000
-
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 leases are renegotiated.
CONsOLIDATED
2018
2017
$’000
1,021
565
1,586
$’000
1,082
1,648
2,730
payable within one year
payable later than one year but not later than 5 years
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Annual report 2018 | Fiducian Group Limited
28. RELATED-PARTy TRANsACTIONs
(A) PARENT ENTITY
the parent entity within the group is Fiducian group limited at year end.
(B) SUBSIDIARIES
interests in subsidiaries are set out in note 12.
the consolidated financial report incorporate the assets, liabilities and results of the subsidiaries set out in note 12 in
accordance with the accounting policy described in note 1(b).
(C) KEY MANAGEMENT PERSONNEL
disclosures relating to key management personnel are set out in note 23.
(D) TRANSACTIONS WITH RELATED PARTIES
(i) transactions between the group and other related entities
a. operator fee income received from related trusts
b. trustee fee income received from related trusts
c. recovery of group costs, such as insurance from related trusts
d. collection of fees by responsible entities from the related funds.
the above transactions were on normal commercial terms and conditions and at market rates. all transactions between
group entities are eliminated on consolidation.
(ii) transactions with related parties of directors
a. Financial planning fees paid by Fiducian Financial services pty limited to entities associated with the directors
b. Financial planning fees paid by Fiducian Financial services pty limited to entities associated with relatives of the
directors
c. loans to related parties of directors
the above transactions were on normal commercial terms and conditions and at market rates.
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A
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P a g e 6 5
Annual report 2018 | Fiducian Group Limited
28. RELATED-PARTy TRANsACTIONs (CONTINUED)
(D) TRANSACTIONS WITH RELATED PARTIES (CONTINUED)
the following transactions occurred with related parties:
CONsOLIDATED
OwNERshIP
INTEREsT1
2018
2017
related trusts
Fiducian investment service
operator fees income
expense recovery
interest
Fiducian superannuation service
operator fees income
expense recovery
interest
Fiducian Funds
operator fees income
expense recovery
interest
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N
E
M
E
T
A
T
S
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A
I
C
N
A
N
I
F
entities associated with directors or their relatives
hawkesbury Financial services pty ltd2
Financial planning fees paid
Fiducian Financial services bondi Junction pty ltd3
Financial planning fees paid
nil
nil
nil
5,431,317
322,266
278,336
4,425,672
339,192
197,521
15,178,659
3,946,610
628,230
13,412,420
3,900,862
523,633
13,951,373
270,000
198,260
11,423,119
269,150
193,654
222,320
217,240
44,930
41,021
1 “Ownership Interest” means the percentage of capital of the Company held directly and/or indirectly through another entity by Fiducian
group limited.
2 payments to Franchisee associated with director, F Khouri in the normal course of business in arm’s length transactions.
3 payments to Franchisee associated with a relative of r bucknell, in the normal course of business in arm’s length transactions.
loans to related
Parties oF directors
BALANCE AT
1 JULy 2017
INTEREsT
PAID/
PAyABLE FOR
ThE yEAR
REPAID
DURING
ThE yEAR
BALANCE
AT 30 JUNE
2018
NUMBER OF
KMP IN ThIs
AGGREGATION
$
$
$
$
aggregate details of business
development and staff loans made
to key management personnel of
the group, including their close
family members and entities
related to them.
26,965
323
(14,515)
12,773
1
business development and staff loans have been made at arm’s length and at the same terms and conditions provided to
other franchisees and staff.
P a g e 6 6
Annual report 2018 | Fiducian Group Limited
28. RELATED-PARTy TRANsACTIONs (CONTINUED)
(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 (income from related trusts)
CONsOLIDATED
2018
2017
$
$
3,492,186
3,300,383
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.
29. RECONCILIATION OF PROFIT OR LOss AFTER INCOME
TAX TO NET CAsh INFLOw FROM OPERATING ACTIvITIEs
profit for the year
Non-cash employee (expense)/ benefit
depreciation,amortisation and impairment
changes in operating assets and liabilities:
change in accounts receivable
change in income tax payable
change in trade creditors
change in other creditors
change in deferred income tax liability
net cash inflow from operating activities
CONsOLIDATED
2018
2017
$’000
9,198
117
1,396
(762)
180
372
262
(385)
10,378
$’000
7,512
257
1,319
(282)
491
(201)
167
(578)
8,685
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P a g e 6 7
Annual report 2018 | Fiducian Group Limited
30. EARNINGs PER shARE
earnings per share using weighted average number of ordinary shares outstanding
during the period:
(A) BASIC EARNING PER SHARE (IN CENTS)
profit from continuing operations attributable to the ordinary equity of the company
29.42
24.04
CONsOLIDATED
2018
2017
(B) DILUTED EARNING PER SHARE (IN CENTS)
profit from continuing operations attributable to the ordinary equity and potential
ordinary equity of the company
(C) WEIGHTED AVERAGE NUMBER OF SHARES USED AS
DENOMINATOR
29.28
24.00
CONsOLIDATED
2018
2017
number
number
weighted average number of ordinary shares used as denominator in calculating
basic earnings per share
31,263,238
31,250,210
adjustments for calculation of diluted earnings per share options
152,269
49,517
weighted average number of ordinary shares and potential ordinary shares used as
denominator in calculating diluted earnings per share
31,415,506
31,299,277
(D) RECONCILIATION OF EARNINGS USED IN CALCULATING BASIC AND DILUTED EARNINGS
PER SHARE
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A
T
S
L
A
I
C
N
A
N
I
F
net profit and earnings used to calculate basic and diluted earnings per share
CONsOLIDATED
2018
2017
$’000
9,198
$’000
7,512
(E) INFORMATION CONCERNING THE CLASSIFICATION OF SECURITIES
options granted to employees under the Fiducian group limited employee share option plan (esop) 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 24.
31. EvENTs OCCURRING AFTER BALANCE DATE / REPORTING
DATE
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 group, to affect significantly the operations
of the group, the results of those operations or the state of affairs of the group in subsequent years.
P a g e 6 8
Annual report 2018 | Fiducian Group Limited
32. FINANCIAL RIsK MANAGEMENT
the group’s activities expose it to a variety of financial risks: market risk (including interest rate 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 holds the following financial instruments:
Financial assets
cash and cash equivalents
trade and other receivables
Financial liabilities
trade and other payables
(A) MARKET RISK
(i) Foreign exchange risk
CONsOLIDATED
2018
2017
$’000
$’000
13,885
10,714
24,599
9,548
10,692
20,240
6,613
5,957
the group has limited operations outside australia and is not exposed to any material foreign exchange risk.
(ii) Interest rate risk
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 2018
30 JUNE 2017
wEIGhTED
AvERAGE
INTEREsT
RATE
%
1.58%
4.26%
wEIGhTED
AvERAGE
INTEREsT
RATE
%
1.34%
3.88%
BALANCE
$’000
13,885
6,151
20,036
BALANCE
$’000
9,548
6,564
16,112
cash at bank and on deposit
business development and staff loans
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 and loans with variable interest rates. at 30
June 2018 if interest rates change by +/- 100 basis points (2017: +/- 100 basis points) from the year end rates with all other
variables held constant, post-tax profit would have been $141,570 higher or lower (2017: $ 113,000).
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A
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P a g e 6 9
Annual report 2018 | Fiducian Group Limited
32. FINANCIAL RIsK MANAGEMENT (CONTINUED)
(B) CREDIT RISK
credit risk for the group arises from trade receivables, cash at bank and on deposits, business development and staff
loans.
Risk Management
the group has low credit risk from trade 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, thereby mitigating
credit risk.
For cash at bank and on deposits, the credit quality assessed against external credit ratings and only parties with
minimum rating as detailed below in the table are accepted. For business development and staff loans which are unrated
management assess the credit quality of the franchisee based on extensive credit rating scorecard taking into account
financial position, collateral to provide security for the loan and cultural alignment to the business. the compliance with
credit limits are monitored regularly by line management.
the credit quality of other financial assets can be assessed against external credit ratings as follows:
cash at bank and on deposit
aa-
business development and staff loans
unrated
CONsOLIDATED
2018
2017
$’000
$’000
13,885
9,548
6,151
6,564
Security
under the terms of agreement for business development loans, the group has a security deed over the all the assets of the
franchisee’s business registered in personal property security register. this security may be called upon if the franchisee
defaults under the terms of agreement.
the maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets as summarized on
this page.
(C) LIQUIDITY RISK
the group maintains sufficient liquid reserves to meet all foreseeable working capital, investment and regulatory licensing
requirements. the group has a $4 million undrawn overdraft facility (2017: $4 million) available with their bank.
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N
A
N
I
F
Financial liabilities
due in less than 1 year
due between 1 and 2 years
(D) FAIR VALUE ESTIMATION
CONsOLIDATED
2018
2017
$’000
6,081
532
6,613
$’000
5,576
381
5,957
the fair value of financial assets and financial liabilities must be estimated for recognition and measurements or for
disclosure purposes.
(a) Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
(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)
the group did not have any assets or liabilities recognised at fair value as at 30 June 2018
P a g e 7 0
Annual report 2018 | Fiducian Group Limited
32. FINANCIAL RIsK MANAGEMENT (CONTINUED)
(E) ASSETS AND LIABILITIES NOT CARRIED AT FAIR VALUE BUT FOR WHICH FAIR VALUE IS DISCLOSED
business development loans and staff loans are carried at amortised cost; their carrying value is a reasonable
approximation of fair value.
cash and cash equivalents include cash in hand, deposits held with bank and other short-term investments in an active
market.
trade receivables include the contractual amount for settlement of the trade debts due to the group. the carrying amount
of the trade receivables is assumed to approximate their fair values due to their short-term nature.
trade and other payables include amounts due to creditors and accruals and represent the contractual amounts and
obligations due by the company for expenses. the carrying amount of the trade and other payables are assumed to
approximate the fair value due to their short- term nature.
business development and staff loans represent contractual payments by advisers and staff over the period of loan. loans
classified as current have not been discounted as the carrying values are a reasonable approximation of fair value due to
their short-term nature. non-current loans have been valued at the present value of estimated future cash flows discounted
at the market interest rates for these type of loans.
33. PARENT ENTITy FINANCIAL INFORMATION
the stand-alone summarised financial statements of the company is as follows:
(a) Balance sheet
current assets
non current assets
total assets
current liabilities
non current liabilities
total liabilities
net assets
equity
share capital
reserves
retained earnings
equity
(b) total comprehensive income
dividend from subsidiary and other income
2018
2017
$’000
$’000
19,011
9,349
28,360
-
-
-
16,378
9,349
25,727
-
-
-
28,360
25,727
7,040
144
21,176
28,360
7,141
120
18,466
25,727
8,300
7,550
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T
A
T
S
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A
I
C
N
A
N
I
F
34. DEED OF CROss- GUARANTEE
the company has in place a deed of cross-guarantee, substantially in the form of asic pro Forma 24 with each wholly
owned member of the Fiducian group, with the exception of Fiducian portfolio services ltd. this entity has been excluded
from the group following the release of an asic class order disallowing apra regulated entities from being part of a
closed group covered by a deed of cross guarantee. since the financial statements of this excluded entity are not material
to the consolidated financial statements management did not consider it necessary to disclose additional consolidation
information related to the close group excluding this entity.
the effect of the deed of cross-guarantee is that each participating member that has entered into the deed, guarantees to
each creditor of any participating member of the Fiducian group that has entered into the deed payment in full of any debt
owed to that creditor in the event of winding up of that relevant member of the Fiducian group.
P a g e 7 1
Annual report 2018 | Fiducian Group Limited
South Australia Office Locations
Adelaide City Central
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CULTIVATED FOR
THE LONG TERM
P a g e 7 2
Annual report 2018 | Fiducian Group Limited
DIRECTORs’ DECLARATION
in the directors’ opinion:
(a) the financial statements and notes set out on pages 32 to 71 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 2018 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.
(c) at the date of this declaration, there are reasonable grounds to believe that the members of the wholly owned group
identified in note 12 will be able to meet any obligations or liabilities to which they are, or may become subject by
virtue of the deed of cross guarantee described in note 34.
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 executive deputy chairman and chief Financial officer required by
section 295a of the corporations act 2001.
this declaration is made in accordance with a resolution of the directors.
I
N
O
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A
R
A
L
C
E
D
’
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O
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C
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R
I
D
inderjit (indy) singh
executive deputy chairman
sydney,
16 august 2018
P a g e 7 3
Annual report 2018 | Fiducian Group Limited
INDEPENDENT AUDITOR’s
REPORT TO ThE MEMBERs
Independent auditor’s report to the shareholders of Fiducian
Group Limited
Report on the audit of the financial report
Our opinion
In our opinion the accompanying financial report of Fiducian Group Limited (the Company) and its
Corporations Act 2001
controlled entities (together the Group) is in accordance with the
, including:
(a) giving a true and fair view of the Group's financial position as at 30 June 2018 and of its financial
performance for the year then ended and
(b) complying with Australian Accounting Standards and the
Corporations Regulations 2001
.
What we have audited
The Group financial report comprises:
●
●
●
●
●
●
the consolidated statement of financial position as at 30 June 2018
the consolidated statement of comprehensive income for the year then ended
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the notes to the consolidated financial statements, which include a summary of significant
accounting policies
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the
report
section of our report.
Auditor’s responsibilities for the audit of the financial
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001
and the ethical requirements of the Accounting Professional and Ethical
Code of Ethics for Professional Accountants
Standards Board’s APES 110
(the Code) that are relevant
to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities
in accordance with the Code.
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
P a g e 7 4
Materiality
● For the purpose of our audit we used overall Group materiality of $671,860, which represents
approximately 5% of the Group’s profit before tax.
● We applied this threshold, together with qualitative considerations, to determine the scope of our
audit and the nature, timing and extent of our audit procedures and to evaluate the effect of
misstatements on the financial report as a whole.
● We chose Group profit before tax because, in our view, it is the benchmark against which the
performance of the Group is most commonly measured.
● We utilised a 5% threshold based on our professional judgement, noting it is within the range of
commonly acceptable thresholds.
Audit Scope
● Our audit focused on where the Group made subjective judgements; for example, significant
accounting estimates involving assumptions and inherently uncertain future events.
● Our audit procedures covered the Group’s most significant operations being “Financial planning”,
“Funds management” and “Corporate, administration & other”.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the
Audit and Risk Committee.
Key audit matter
Revenue
(Refer to note 4) ($45m)
Revenue of the Group includes income from
‘financial planning’ ($15.8 m), ‘funds
management’ ($12.7 m) and ‘corporate,
administration & other’ ($17.3 m).
We considered accuracy of revenue to be a key
audit matter due to the materiality of the revenue
streams and the presumption in Australian
Auditing Standards that the risk of fraud in
revenue should be considered a significant audit
risk.
From 1 July 2018, the Group will transition to
AASB 15
Revenue from Contracts with
Customers
. In accordance with the Australian
Accounting Standards, the Group is required to
disclose the impact of accounting standards
issued but not yet applied. Accordingly, the
Group has disclosed information relevant to the
How our audit addressed the key audit
matter
Our procedures included:
-
-
-
evaluating and testing certain controls
related to accurate recognition and
calculation of revenue
for revenue streams where amounts are
automatically calculated by the Group’s
core product system, including
administration fees and portfolio review
fees, manually reperforming the fee
calculations for a sample of transactions
with reference to Product Disclosure
Statements (PDS), member application
forms or other forms of documentation
of terms
for revenue streams where amounts are
at the discretion of the Group’s financial
planners, agreeing a sample to
correspondence between the planner
and the relevant client.
P a g e 7 5
possible impacts of AASB 15 from 1 July 2018
within Note 1(w).
Our procedures to evaluate the disclosures on
the possible impact of AASB 15 included:
-
-
-
evaluating the Group’s assessment of
their revenue streams and contract
types in line with the five step model
required by AASB 15
selecting a sample of revenue contracts
and testing whether the Group’s
assessment of AASB 15 is consistent
with the contents of the revenue
contracts, and
assessing the adequacy of disclosures
made in the financial report.
Our procedures included:
-
-
-
evaluating the Group’s year-end
assessment of the recoverability of loans
to financial planners, including making
inquiries of management about any
changes in each borrower’s
circumstances and evaluating the
Group’s assessment of the financial
health and performance of the
underlying business
obtaining confirmations of all loans to
financial planners, and
testing collateral/security arrangements
to loan contracts and Personal Property
Security Registers for a sample of the
loans.
Our procedures to evaluate the disclosures on
the possible impact of AASB 9 included:
-
-
evaluating the Group’s assessment of
expected impairment supporting the
Expected Credit Loss (ECL)
requirements of AASB 9, and
assessing the adequacy of disclosures
made in the financial report.
Our procedures included:
-
-
updating our understanding of
prevailing market conditions and
factors that could materially affect the
fair value and usage of the relevant
assets, and considering whether these
may represent indicators of impairment
evaluating key assumptions used by the
Group in the calculation of the
recoverable amount of acquired client
portfolios and goodwill such as the
multiple applied to associated revenues
when estimating fair value, and
Recoverability of loans to financial
planners
(Refer to note 10 and 11) ($6.3m)
From time to time, the Group enters into lending
arrangements with specified financial planning
franchisees. Outstanding loans totalled $6.3m at
the reporting date (FY17 $6.7m).
The recoverability of the loans is a key audit
matter due to the judgement involved in
assessing the ability of each financial planner to
repay their loan as and when they fall due.
From 1 July 2018, the Group will transition to
AASB 9
Financial Instruments
. In accordance
with the Australian Accounting Standards, the
Group is required to disclose the impact of
accounting standards issued but not yet applied.
Accordingly, the Group has disclosed information
relevant to the possible impacts of AASB 9 from 1
July 2018 within Note 1(w).
Assessment of intangible assets’ carrying
values
(Refer to note 15) ($15.8)
The balance sheet includes intangible assets
relating to portfolios of financial advice clients
and goodwill arising from acquisitions made by
the financial planning business of the Group.
The combined carrying value of client portfolios
and goodwill as at the reporting date was $15.8m
(FY17 $15.8m).
At each period end, the Group considers whether
there are any indicators that the carrying value of
P a g e 7 6
client portfolios might be impaired. It also
performs an annual impairment test for goodwill.
This was a key audit matter due to the size of the
intangible assets balance and the judgement
involved in the periodic impairment assessment.
-
comparing market multiples to
independent sources and stress testing
the multiples applied.
Other information
The directors are responsible for the other information. The other information comprises the Financial
highlights, Five year financial summary, Joint report of the Chairman and the Executive Deputy
Chairman, Directors' Report, Shareholder information and Corporate directory included in the
Group’s annual report for the year ended 30 June 2018 but does not include the financial report and
our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors 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
for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
Corporations Act 2001
and
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
auditor's report.
. This description forms part of our
P a g e 7 7
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 19 to 25 of the Directors’ report for the
year ended 30 June 2018.
In our opinion, the remuneration report of Fiducian Group Limited for the year ended 30 June 2018
complies with section 300A of the
Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
Corporations Act 2001
. Our responsibility
PricewaterhouseCoopers
Craig Stafford
Partner
Sydney
16 August 2018
P a g e 7 8
ThIs PAGE hAvE BEEN LEFT BLANK INTENTIONALLy
P a g e 7 9
Annual report 2018 | Fiducian Group Limited Western Australia Office Locations
South Perth
T
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ANTICIPATION
Barossa Valley SA
P a g e 8 0
Annual report 2018 | Fiducian Group Limited
shAREhOLDER INFORMATION
A. DISTRIBUTION OF EQUITY SECURITY HOLDERS BY SIzE OF HOLDING
analysis of numbers of equity security holders by size of holding, as at 31 July 2018
DIsTRIBUTION
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - and over
total holders
OPTION hOLDERs
ORDINARy shARE hOLDER
-
-
-
-
1
1
263
486
164
180
23
1,116
there were 20 holders of a less than marketable parcel of ordinary shares.
B. EQUITY SECURITY HOLDERS
twenty largest quoted equity security holders
the names of the 20 largest registered shareholders of quoted equity securities as at 31 July 2018, are listed below
NAME
NUMBER hELD
PERCENTAGE OF
IssUED shAREs
1
2
indYshri singh ptY limited
J p morgan nominees australia limited
3 hsbc custodY nominees (australia) limited
4
5
london citY eQuities limited
SHRIND INVESTMENTS PTY LTD (INDYSHRI SUPER FUND A/C)
6 mr victor John plummer
7 bnp paribas noms ptY ltd (drp)
8 hunter place services ptY ltd
9 citicorp nominees ptY limited
10 MR IVAN TANNER + MRS FELICITY TANNER (THE SUPERNATURAL S/F A/C)
11 d r smith holdings ptY ltd
12 norcad investments ptY ltd
13 bnp paribas nominees ptY ltd (ib au noms retailclient drp)
14 garrett smYthe ltd
15 bnp paribas noms (nZ) ltd (drp)
16 HFR PTY LTD (THE F & M KHOURI S/FUND A/C)
17 mr ian harold holland
18 BOND STREET CUSTODIANS LIMITED (RSALTE - D64848 A/C)
19 mrs JenniFer margaret leeson
20 FORSYTH BARR CUSTODIANS LTD (FORSYTH BARR LTD-NOMINEE A/C)
8,795,933
2,594,463
2,378,245
2,012,214
1,727,918
800,000
674,517
583,000
582,473
521,500
500,000
450,000
402,445
339,000
239,600
216,137
165,000
154,694
138,847
134,600
28.15
8.30
7.61
6.44
5.53
2.56
2.16
1.87
1.86
1.67
1.60
1.44
1.29
1.09
0.77
0.69
0.53
0.50
0.44
0.43
23,410,586
74.93
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shAREhOLDER INFORMATION
(CONTINUED)
Unquoted equity securities
as at 31 July 2018
TyPE OF sECURITy
NUMBER ON IssUE
NUMBER OF hOLDERs
options - executive deputy chairman
200,000
1
C. SUBSTANTIAL SHAREHOLDERS
substantial shareholders and associates as at 31 July 2018 (more than 5% of a class of shares) in the company are set out
below
NAME
NUMBER hELD
PERCENTAGE
indYshri singh ptY limited and associates
J p morgan nominees australia limited
hsbc custodY nominees (australia) limited
london citY eQuities limited
10,523,851
2,594,463
2,378,245
2,012,214
33.68
8.30
7.61
6.44
D. VOTING RIGHTS
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 one vote and upon a poll one vote for each share held
Options
no voting rights
P a g e 8 2
Annual report 2018 | Fiducian Group Limited
CORPORATE DIRECTORy
shARE REGIsTER
computershare investor services pty limited
level 4, 60 carrington street
sydney nsw 2000
AUDITOR
pricewaterhousecoopers
chartered accountants
one international towers
watermans Quay, barangaroo
sydney nsw 2000
BANKERs
anZ banking group
388 collins street
melbourne vic 3000
national australia bank limited
500 bourke street
melbourne vic 3000
AUsTRALIAN sECURITIEs
EXChANGE LIsTING
Fiducian group limited (asX:Fid)
wEBsITE ADDREss
www.fiducian.com.au
DIRECTORs
r bucknell Fca
chairman
i singh cFp, btech, mcomm (bus), asia, asFa, dip. Fp
executive deputy chairman
F Khouri b bus, Fcpa, cta
s hallab b ec (accnt & law), ca, gaicd, Faist
COMPANy sECRETARy
i singh cFp, btech, mcomm (bus), asia, asFa, dip. Fp
NOTICE OF ANNUAL
GENERAL MEETING
the annual general meeting of
Fiducian group limited
Will be held at level 4, 1 York street, sydney.
time: 10:00 am
date: thursday 25 october 2018
PRINCIPAL REGIsTERED
OFFICE IN AUsTRALIA
level 4
1 York street
sydney nsw 2000
(02) 8298 4600
whOLLy OwNED
OPERATING ENTITIEs
Fiducian business services pty limited
Fiducian Financial services pty limited
Fiducian investment management services limited
Fiducian portfolio services limited
Fiducian services pty limited
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Annual report 2018 | Fiducian Group Limited FIDUCIAN GROUP 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