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Fiducian Group Ltd
ANNUAL
REPORT
Contents
Financial Highlights
Five Year Financial Summary
Executive Chairman’s Report
Directors’ Report
Auditor’s Independence Declaration
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
Financial Planner Office Locations
CONTENTS
2
4
5
12
24
26
27
28
29
30
72
73
78
80
81
Annual Report 2022 1
Dividends
29.70c per share
10%
Financial Highlights
For 2022
Fund Performance
3 yrs
5 yrs
7 yrs
10 yrs
Cap Stable
31/116
16/110
14/105
11/99
Balanced
58/185
21/176
9/169
Growth
24/185
5/176
3/169
9/162
2/162
Ultra Growth 34/131
44/127
15/116
8/108
Flagship funds performance ranking
for three, five, seven and ten years
to 30 June 2022 against all funds in
the Morningstar survey.
Statutory NPAT
UEBITDA*
$13.3m
9%
$21.8m
13%
UNPAT*
$15.7m
11%
Revenue
$69.5m
18%
FUMAA*
Financial Planners
$10.9b
5%
86
Aligned Planners &
Associates
Net Inflows
Offices
$309m
36%
47
Offices across
Australia
* (UEBITDA) – Underlying Earnings Before Interest Tax Depreciation Amortisation, no AASB16 adjustment on lease rent and interest on lease liability
(UNPAT) – Underlying Net Profit After Tax, no AASB16 adjustment on lease rent and interest on lease liability
(FUMAA) – Funds Under Management, Administration and Advice
2 Fiducian Group Ltd
Revenue
($ million)
Underlying EBITDA
($ million)
Underlying NPAT
($ million)
.
5
9
6
8
.
8
5
.
9
4
5
.
4
9
4
.
9
5
4
1
.
6
1
8
.
4
1
.
2
9
5 1
7
1
.
8
.
1
2
.
0
2
1
.
5
0
1
.
7
5
1 1
4
7 1
2
1
.
.
2018 2019 2020 2021 2022
2018 2019 2020 2021 2022
2018 2019 2020 2021 2022
Dividends
(cents)
Share Price - 30 June
Closing
($)
EPS based on UNPAT
(cents)
.
7
9
9 2
6
2
.
.
0
3
2
3
.
2
2
.
0
0
2
9
2
0 7
7
6
.
.
6
1
.
5
0
0
5
.
6
6
4
.
3
.
8
3
.
6
3
3
.
9
9
9 4
4
5 4
0
4
.
.
2018 2019 2020 2021 2022
2018 2019 2020 2021 2022
2018 2019 2020 2021 2022
Annual Report 2022 3
FINANCIAL SUMMARY
Five Year Financial Summary
For the years 2018 to 2022
Financial History
Financial Performance
Gross Revenue
2018
$’000
2019
$’000
2020
$’000
2021
$’000
2022
$’000
45,873
49,404
54,904
58,839
69,539
Underlying EBITDA (UEBITDA)
14,832
16,065
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
10,505
9,198
56%
40,561
31,131
13,885
12,047
10,350
56%
45,899
34,826
11,792
17,499
12,725
10,463
55%
19,218
14,131
12,179
53%
54,653
58,595
38,123
13,961
42,869
19,316
21,791
15,697
13,317
55%
70,691
47,132
17,484
Performance over the Last Five Years
13%
Annualised
UNPAT Growth
12%
Annualised EPS
Growth
11%
Annualised Gross
Revenue Growth
13%
12%
Annualised Dividend
Growth
Annualised Share
Price Growth
4 Fiducian Group Ltd
Executive
Chairman’s
Report
Dear Shareholders,
As Executive Chairman and on behalf of the directors, I am
pleased to present this report on the consolidated operating
performance of Fiducian Group Limited and its controlled
operating entities for the year ended 30 June 2022.
Highlights
During the financial year gone by, our 26th since inception,
we have continued to capitalise on the main revenue earning
segments of our business model - Platform Administration,
Funds Management and Financial Planning. All of them are
supported by our Fintech capability, which has produced
in-house proprietary technology and software systems
that allow us to innovate, lift productivity and subsequently
generate profits for our shareholders.
Investment markets were steadily rising from June 2021 and
preliminary financial results were exceeding budget targets.
That is, until two unexpected events in February hit the
global economy. The first was the Russian military attack
on Ukraine. Since they are major producers of commodities
such as oil, gas, iron ore, coal, rare earth metals, wheat
and sunflower cooking oil, the war dislocated supplies and
prices rose sharply. Simultaneously, China received another
COVID-19 scare. To stop the spread of infections they went
into a total lock down of factories, ports and offices and
people were asked to stay at home. Consequently, financial
markets fell sharply as investors weighed the possible
damage to corporate profits from further supply shortages
across the board, higher prices and a resurrection of West
vs East rivalry after 32 years.
We had our highest ever net inflows of $309 million
over the year. However, the sharp declines in share and
bond markets over the last four months, impacted our
Funds Under Management, Administration and Advice
(FUMAA) adversely and truncated further earnings growth
expectations. Nevertheless, our business model is resilient
and we again delivered a double digit underlying earnings
per share growth for shareholders.
The acquisition of the financial planning business of
People’s Choice Credit Union (PCCU) and assimilation
into the Fiducian network, absorbed a great deal of our
management resources for induction, training days and
consolidating revenue from clients. Over the next couple of
months, this work will have been successfully completed.
Fiducian staff involved in the exercise have done an
exemplary job and need to be congratulated.
I believe that employees from PCCU have readily adopted
our Fiducian family culture and are constructively supportive
of our processes.
Our principles of People, Planet and Profit stand firm.
We are indeed fortunate to have a loyal and experienced
management and dedicated staff who have delivered
seamless operations with efficiency under trying conditions,
be they COVID-19 variants, work from home, floods,
financial market gyrations, legislative changes or transport
dislocations. Our focus to deliver a great client experience
from a growing financial adviser network has remained
steadfast.
Management and the Board remain positive for further
growth of Fiducian in the future. Wars always end
and modern medicine finds cures for pandemics. Our
expanded network of financial advisers is expected to
deliver funds flows that exceed our recent record breaking
year. Significant effort is being directed to distribution
of new products and services and as well, we remain
on the lookout for further earnings per share accretive
acquisitions of client bases. As is always the case, the
recent market volatility may likely be offset by strong share
market growth in years to come and we intend to capitalise
on this transformation for the benefit of our shareholders,
stakeholders and people.
Financial Information
Results for the year
Record breaking net inflows from our existing network of
financial advisers had the support of financial markets until
February, after which the markets experienced sharp falls.
Consequently, most major equity and fixed interest markets
delivered negative returns for the year to 30 June 2022. As
FUMAA fell, so did our ability to expand earnings. Fortunately,
our business model has continued to be resilient, weathered
the adverse impact of a changed economic environment and
enabled the consolidated entity to deliver a Statutory Net Profit
After Tax increase of 9% to $13.3 million (2021: $12.2 million).
The underlying earnings per share lifted 11.1% from 44.9 cents
in 2021 to 49.9 cents in the current year. After the acquisition of
client bases and absorbing recent share market declines, the
combined FUMAA grew 5% to $10.9 billion over the previous
year (June 2021 $10.4 billion). Any recovery in financial markets
should consolidate further revenue increases in the year ahead.
Annual Report 2022 5
EXECUTIVE CHAIRMAN’S REPORT
Capital Management
On Market Buy-Back
A key feature of the company is that it continues to maintain
a clean Balance sheet and remains debt free with a
positive working capital and cash flow position. However,
if circumstances dictate, a capital raising or debt funding
may be considered where suitable acquisitions or business
growth opportunities present themselves.
Final Dividend
The Board remains prudent, but is confident that the
future of the business is positive and likely to continue to
strengthen through organic growth and acquisitions of
client bases that can benefit from the Fiducian process.
As a result, a fully franked final dividend of 14.90 cents
per share has been declared which will bring the total fully
franked dividend declared for the 2022 financial year to 29.7
cents, an increase of 10% (2021: 26.90 cents). The full year
dividend represents 70% of the statutory NPAT for the year.
The final dividend will be paid on 12th September 2022 on
issued shares held on 29th August 2022.
During the year, no shares were bought back on market
leaving 31.44 million shares on issue at year end.
Cash Flow
Net operating cash flows increased from $16.0 million in
2021 to $18.7 million in 2022. During the year the Group
took advantage of growth opportunities through the
acquistion and funding of salaried and franchisee offices
by investing $9.7million. Further, dividends of $10.8 million
were paid during the period. As a result, net cash and
cash equivalents decreased by $1.8 million (2021: increase
$5.3 million). Cash at year-end was therefore $17.5 million
compared to $19.3 million at the end of 2021.
Staff and Chairman Options
In accordance with the terms and conditions of the
approved Employee and Director Share Option Plan, no
options will be issued to the Executive Chairman with
respect to the year ended 30 June 2022.
Financial highlights
Year Ending 30 June
2022
2021
$ Growth
% Change
Funds Under Management, Advice and Administration (FUMAA)
10.94 Billion
10.44 Billion
0.5 Billion
5%
$’000
$’000
69,539
(18,356)
51,183
74%
23,156
(1,365)
21,791
(303)
(5,791)
15,697
(2,269)
(111)
13,317
49.9
42.3
58,839
10.7 Million
18%
(15,944)
42,895
8.3 Million
19%
73%
20,560
2.6 Million
13%
(1,342)
19,218
2.6 Million
13%
(255)
(4,832)
14,131
1.6 Million
11%
(1,788)
(164)
12,179
1.1 Million
44.9
38.7
9%
11%
Operating Revenue
Fees and Charges paid
Net Revenue
Gross Margin
EBITDA
Add back rent and deduct interest on lease liabilities
Underlying EBITDA
Depreciation
Tax on underlying earnings
Underlying NPAT (UNPAT)
Amortisation
AASB 16 Leases adjustment impacts - Office Lease
Statutory NPAT
Basic EPS based on UNPAT (in cents)
Basic EPS based on NPAT (in cents)
6 Fiducian Group Ltd
Growth in Funds Under Management Administration and Advice (FUMAA)
(in $ billion)
EXECUTIVE CHAIRMAN’S REPORT
+93%
8.03
8.20
7.40
11.51
10.94
10.44
9.33
6.31
6.72
6.30
5.68
14.00
12.00
10.00
8.00
6.00
4.00
2.00
-
Jun 17 Dec 17 Jun 18 Dec 18 Jun 19 Dec 19 Jun 20 Dec 20 Jun 21 Dec 21 Jun 22
FUA FUM FUAdm
Financial Planning
During the year, Funds under Advice grew from $3.7 billion
in June 2021 to $4.4 billion in June 2022. Acquisitions of
financial planning businesses and increases in net inflows
were however, offset by what we believe could be a
temporary decline in the valuation of financial markets. On 1
February 2022 the Group expanded its domestic footprint in
South Australia and Northern Territory through its acquisition
of the financial planning business of PCCU which increased
the Group’s funds under management by around $1.1 billion
at the time and could contribute annually a recurring revenue
of $6.4 million based on current estimates. Financial planners
coming across have undergone training since March this
year and a few have already started placing clients in
Fiducian platforms on a client best interest basis. In addition
to this acquisition the Group provided loan funding of $1.1
million to assist two franchisees to acquire financial planning
practices.
Record breaking net inflows of $309 million, the highest on
record were received during the year. We expect net inflows
to rise in 2023 as newer financial planners, particularly those
from PCCU in South Australia and the recent additions in
the Northern Territory, begin to appreciate the many benefits
of the Fiducian compliant process for clients. Fiducian
expects the highest level of compliance and client service
from its financial planning network. Regulatory oversight and
supervision of our financial planners has been supported
by additional recruitment in the practice management and
compliance team to provide compliance coaching. This is
an expensive proposition and it is possible, that we may
have one of the highest supervisory management to financial
adviser ratios in Australia, but one that we feel is necessary.
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 through webinars and video-conferencing. As a
consequence, client retention remains high.
While video-conferencing continues to be used to assist
financial planners in practice development, marketing,
financial planning software training and investment products
and strategies, face to face meetings between practice
managers and financial planners have re-started. Two
face to face Professional Development days were held in
Sydney. After a period of almost three lockdown years due to
COVID-19, an annual conference is planned for September
this year for all advisers. Our focus will remain on generating
inflows through organic and inorganic growth, while further
acquisitions of client bases are being negotiated.
Salaried and Franchised Offices
Company owned offices with salaried financial planners
are now based in New South Wales, Victoria, Western
Australia, South Australia, Queensland, Northern Territory
and Tasmania and continue to contribute to overall results.
Salaried offices now comprise over 55.6% of Funds under
Advice. We now have 41 salaried advisers. Franchised
offices now comprise around 44.4% of our Funds under
Advice. We have 45 franchised financial planners nationally.
Annual Report 2022 7
EXECUTIVE CHAIRMAN’S REPORT
Platform Administration
Platform Administration offers portfolio wrap administration
for superannuation and investment services to financial
planners as well as Separately Managed Accounts (SMAs)
which offer investors direct access to a small number of
shares and funds that are managed separately for them.
We have the capability to compete for such business and
negotiations are underway with prospects who could use
our services for administration of their SMAs. Therefore, in
April this year, we launched a new platform called Auxilium.
It offers SMAs wide ranging investment options to external
dealer groups and small self licensed financial advisers
who are currently using our competitors’ platforms. Our
business development team recently found some success
in registering external Licensees to start using our platforms.
There is sufficient capacity in our administration team to
offer this service to the external market in conjunction with
the services we currently provide with Fiducian Platforms.
Starting on the 1st of June 2022 administration fees
in Fiducian platforms were reduced in line with our
competitors’ offerings. This means that total fee revenues
in 2023, could be adversely impacted by up to $1 million.
We expect this reduction to be absorbed through normal
operations and overcome by increased inflows and asset
management functions.
Funds under administration on our platforms stood at $2.85
billion on 30 June 2022. Overall growth in Net Funds under
administration is driven by new inflows and market growth.
Independent Financial Planners (IFAs)
Funds under Administration for IFAs is around 8.4% 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 and wider adoption of our existing
platforms and funds.
Superannuation
The Superannuation Trustee Board established for our
public offer, superannuation wrap fund in March 2015 with
a majority of independent directors operates professionally
and with independence. In line with our board renewal
policy, three new replacement directors have been
appointed to the Board. Two of them are independent
female directors possessing exceptional qualifications and
experience and should add value to the Board. The Board
is supported by the Office of Superannuation Trustee and
outsources key operational processes to specialist service
providers.
Funds Management
Our in-house Manage-the-Manager system of investment
continues to attract the majority of retail funds placed with
us. Fiducian Funds have performed well over the medium
to long-term in their respective categories as we diversify
their assets through a range of underlying fund managers to
reduce risk and volatility.
Information Technology
The Fiducian Information Technology development team
has been busily working from both home and head office
to provide system enhancements that deliver efficiency and
wide ranging functionality to FORCe our financial planning
system and to ‘FasTrack’, our platform administration
system. The improvements provide integration with our
on-line reporting tools and give us an edge when competing
for administration related business and as well scope to
distribute FORCe on a standalone basis.
Net Funds Inflows - Six monthly (in $ million)
180
160
140
120
100
80
60
40
20
0
Jun 17 Dec 17
Jun 18 Dec 18 Jun 19 Dec 19 Jun 20 Dec 20 Jun 21 Dec 21
Jun 22
8 Fiducian Group Ltd
Human Resources
Management and Staff
At Fiducian we have always acknowledged staff as our most
important and valuable asset and we continue to nurture and
help them grow personally and into positions of responsibility.
Our strategy to view our staff as a large Fiducian family
standing alongside each other in difficult times has held
us in good stead as staff have reciprocated with a show of
superior performance and loyalty in volatile times.
Management has taken a hybrid approach to working,
with teams splitting their working days between the office
and home while continuing to discharge their duties,
meet regulatory obligations and remain connected with
their colleagues and clients. This transformation of the
work environment has been made possible by our IT
enhancements.
Fiducian has and will always be an equal opportunity
employer. Our diversity policy encourages persons of
different race, gender, sexual preferences, religion, national
or ethnic origin, age or disability and skills to participate and
receive recognition, reward and management responsibility
commensurate with their performance. Employees are from
26 different countries of origin, 49% are female with 15% of
female employees in senior roles. 22% of our employees are
over 55 years of age.
Planners council
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 alert us on
financial planning issues that may need consideration.
The Council also contributes from personal and live
experience to help with developments and enhancements
of our financial planning software (FORCe), on-line reporting
tool (Fiducian Online) and platform administration system
(FasTrack).
Board of Directors
The Board of Directors and Management has worked
together cohesively as a team with respect and candour
for each other but with a clear mutual understanding of
each other’s roles and responsibilities in achieving optimal
performance. While acknowledging that the strength of
financial markets influence future performance, the Business
Plan for the year ahead focusses on competitive advantages
to lift profits through organic growth as well as acquisitions.
Greater emphasis on promoting our successes through
marketing is planned. Management remains committed to
achieving the goals and objectives set down in the plan.
EXECUTIVE CHAIRMAN’S REPORT
Community Support
Despite the lockdowns and restrictions Fiducian has
continued providing support to community organisations
and sporting teams linked to our financial planning network.
Vision Beyond AUS, a charity supported by the Fiducian
Group, has been increasing its footprint despite the shackles
of the pandemic in hospitals in India, Myanmar, Nepal,
Cambodia and Ethiopia. More than 46,095 men, women and
children who live in abject poverty have had their eyesight
restored in addition to the surgical equipment donated
to overseas hospitals. Some 18,000 children have been
screened for eye disabilities in rural areas of Nepal. Assisting
with these efforts have been Fiducian staff who have
continued to voluntarily provide accounting, administration
and marketing support to the charity to ensure that every
single dollar contributed by generous donors goes towards
eliminating visual impairment in the world.
Current Economic and Market
Environment
The global economy has been facing headwinds from
February this year, with inflation gaining momentum, although
major central banks and financial institutions expected it
to be only a ‘transitory’ phenomenon. Inflation has been
pushed higher by the Russian invasion of Ukraine, lockdowns
of Chinese cities imposed to counter the spread of new
variants of COVID-19, excessive government spending in
an environment of full employment and pent-up consumer
demand. This year, the International Monetary Fund (IMF)
is forecasting global growth to be 3.6%. Growth in the
developing world is expected to be led by China (4.4%) and
India (8.2%). Growth forecasts could be lowered over coming
weeks due to strong actions being taken by central banks
to rein in demand, by raising interest rates and withdrawing
liquidity from the financial system.
After contracting by over 10% in 2020, global corporate
earnings grew by an average of over 50% in 2021 and are
forecast to grow by a solid 11% this year. (Yardeni Research).
However, if central banks engage in severe monetary
tightening, then earnings in at least some major jurisdictions
could be weaker than these forecasts suggest.
Annual Report 2022 9
EXECUTIVE CHAIRMAN’S REPORT
The US Federal Reserve has stated that the battle against
inflation is unconditional and that interest rates will be raised
until there is compelling evidence that inflation is returning to
2%. Other major central banks could follow. Sharp declines
in global share markets that have already occurred, anticipate
that expected rate increases across the world will be
appropriate to engineer a significant slowdown in growth and
inflation to acceptable levels.
From 2020 until early 2022, most major share markets rose
and investors enjoyed significant gains. Recent falls have
however, resulted in a marked improvement in share market
valuation measures. This is positive for future price rises that
would benefit investors. Nonetheless, for our diversified funds
we have taken a cautious approach to stay marginally below
benchmark in our allocation to ‘growth’ assets. This will
change when we perceive signals suggesting a recovery in
share prices is on the cards.
As always, we recommend that investors should consult a
Fiducian financial planner to develop a financial plan with the
aim of achieving a diversified investment strategy, that could
help them realise their financial goals.
Outlook
Consistent with our strategy over the last 26 years our
focus remains the establishment of a business with a rock
solid foundation and growth strategies to enable upscaling
on existing capacity and leveraging our relatively low fixed
cost base. This strategy has benefited us in the difficult and
uncertain times with increasing revenues and growing profits.
Strong focus on cost and operational efficiency has enabled
Management to make the difficult decisions on expenditure
and cost priorities quickly without disturbing the growth
momentum. The Board’s aim remains to build scale and
deliver consistent double digit earnings growth in coming
years over the long term and Management is determined to
stay committed and focused in this difficult climate, to try and
achieve this goal.
On behalf of the Board, I would like to thank all participants
for their individual contributions to the growth and success of
Fiducian.
Inderjit (Indy) Singh OAM
Executive Chairman
Sydney,
15 August 2022
10 Fiducian Group Ltd
EXECUTIVE CHAIRMAN’S REPORT
Fiducian Supported Charity
Vision Beyond AUS (Public Benevolent Institution)
Vision Beyond Australia Ltd, a charity proudly supported by the Fiducian Group,
received Public Benevolent Institution status effective from 1 January 2019.
The charity remains a registered charitable fund since 2011 with tax deductible gift
recipient status, but is now able to remit donations directly to its overseas projects.
The charity which is dedicated to restoring eyesight for people living in poverty,
operates in Myanmar, Cambodia, Nepal, India and Ethiopia through 6 hospitals and has
restored eyesight for over 46,095 men, women and children. We estimate that around
200,000 persons would have received medical attention during the process.
IMAGE: Children posing after their free eye-screening sponsored by Vision Beyond Aus
Annual Report 2022 11
DIRECTORS’ REPORT
Directors’ Report
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 2022.
Directors
The following persons were directors of Fiducian Group Limited during the financial year and up to the date of this report:
• I Singh
• R Bucknell
• 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 through its wholly owned subsidiary, Fiducian Investment Management
Services Limited
b. Acting as the Responsible Entity of Fiducian Funds and Separately Managed Accounts service through its wholly owned
subsidiary, Fiducian Investment Management Services Limited
c. Acting as the Trustee of Fiducian Superannuation Service through its wholly owned subsidiary, Fiducian Portfolio
Services Limited
d. Providing specialist financial planning services through its wholly owned operating subsidiary, Fiducian Financial
Services Pty Limited
e. Providing client account administration platforms to clients and corporate services to other entities within the Group
through its wholly owned subsidiary, Fiducian Services Pty Limited
f. Development of IT software systems for financial planning and wrap platform administration through its wholly owned
subsidiary, Fiducian Services Pty Limited
g. Distribution of the products and service offerings of the Group companies through its wholly owned operating
subsidiary, Fiducian Business Services Pty Limited
Dividends
Dividends paid to members during the financial year were as follows:
Dividends
Final ordinary fully franked dividend for the year ended 30 June 2021 of 14.60 cents
(2020: Fully franked 11.50 cents) per share paid on 13 September 2021.
Interim ordinary fully franked dividend for the year ended 30 June 2022 of 14.80 cents
(2021: Fully franked 12.30 cents) per share paid on 14 March 2022.
Total dividends paid during the year
2022
$’000
2021
$’000
4,596
3,616
4,658
9,254
3,867
7,483
Subsequent to 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 2022 of 14.9 cents per ordinary share held on 29 August 2022 and payable on
12 September 2022.
12 Fiducian Group Ltd
DIRECTORS’ REPORT
Review of operations
A summary of consolidated revenues and results by significant industry segments is set out below:
Funds Management
Financial Planning*
Platform Administration
Corporate Services*
Total
Depreciation and amortisation
Income tax expenses
Net profit attributable to members of Fiducian Group Limited
Segment Revenues
Segment Results
2022
$’000
21,669
22,287
14,065
11,518
69,539
2021
$’000
17,871
18,913
12,571
9,484
58,839
2022
$’000
14,366
2,996
12,172
(6,378)
23,156
(4,092)
(5,747)
13,317
2021
$’000
11,517
1,692
10,556
(3,205)
20,560
(3,627)
(4,754)
12,179
* Comparative figures for the previous year have been restated to make them comparable with the current year.
Comments on operations and results
Comments on the operations, business strategies,
prospects and financial position are contained in the report
of the Executive Chairman.
Shareholder returns
The Executive Chairman has outlined in his report to the
shareholders how the Group delivered a solid result despite
the considerable volatility in the economic environment as
a result of COVID-19, the global economic slowdown, the
Russian invasion of Ukraine and the ongoing impact of rising
interest rates and inflation on the domestic economy. After
consideration of the economic environment and the strength
of the company’s debt-free balance sheet, the directors
have decided on a dividend distribution of 14.90 cents per
share for the second half, bringing the full year dividend to
29.70 cents per share (2021: 26.90 cents).
Significant changes in the state of
affairs
On 1 February 2022 the Group expanded its domestic
footprint in South Australia through its acquisition of the
financial planning business of People’s Choice Credit Union
which increased the Group’s funds under management
by around $1.1 billion at the time and could contribute
annually a recurring revenue of $6.4 million. In addition to
this acquisition the Group funded/committed to provide
loan funding of $1.1 million to assist two of its franchisees to
acquire a financial planning practice and grow their business
in Victoria.
Matters subsequent to 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 results of those operations or the state of
affairs of the Group in subsequent years.
Likely developments and expected
results of operations
The Executive Chairman has commented on expected
results of operations in his Executive Chairman’s Report.
Other than this, there are no likely developments that
may have significant impact on the expected results or
operations 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 recognize that diversity includes, but is not limited
to gender, age, ethnicity and cultural backgrounds. Our
diversity policy encourages persons of different gender,
Annual Report 2022 13
DIRECTORS’ REPORT
ethnic backgrounds, ages and skills to participate and receive recognition, reward and authority commensurate with their
performance. Employees are comprised of staff from over 26 countries of origin, 22% over 55 years, and 48.59% female with
15% in senior roles.
The Group’s current gender diversity report is available to be viewed on the Group website.
Key management personnel disclosures
1. Information on current Directors
I Singh (OAM) BTech, MComm (Bus), ASIA, ASFA, DipFP, CFP Executive Chairman
Experience and expertise
Founder and Managing Director of the Company since 1996 and Chairman since 25 October 2018. General Management
and hands-on experience in funds management and superannuation funds over the past 33 years.
Other current directorships in listed entities
None
Former directorships in the last 3 years
None
Special responsibilities
Executive Chairman of the Group.
Interest in shares and options
10,907,061 ordinary shares in Fiducian Group Limited.
R Bucknell FCA Independent non-executive director
Experience and expertise
Chairman from 1996 until 25 October 2018. Extensive experience in accounting and business management over the past
56 years as a Chartered Accountant.
Other current directorships in listed entities
None
Former directorships in the last 3 years
None
Special responsibilities
Chairman of the Remuneration Committee, and member of the Audit Risk and Compliance Committee for Fiducian Group
Limited, Fiducian Investment Management Services Ltd, Fiducian Services Pty Ltd and Fiducian Financial Services Limited.
Interest in shares and options
500,000 ordinary shares in Fiducian Group Limited.
F G Khouri BBus, 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 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) until his retirement from the board on 1 July 2022 after
having served for 15 years. Member of the Audit Risk and Compliance Committees for Fiducian Group Limited, and the
subsidiary entities, Fiducian Investment Management Services Ltd, Fiducian Services Pty Ltd, Fiducian Financial Services
Limited and the Trustee Subsidiary in respect of the Fiducian Superannuation Service. Member of the Group and Trustee
Remuneration Committees.
Interest in shares and options
268,323 ordinary shares in Fiducian Group Limited.
14 Fiducian Group Ltd
DIRECTORS’ REPORT
S Hallab BEc (Accnt & Law), CA, GAICD, FAIST Independent non-executive director
Experience and expertise
Board member since 12 August 2016. Chartered Accountant and registered tax agent. Has over 39 years of experience in
finance and superannuation.
Other current directorships in listed entities
Director and 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). Chairman of the Audit Risk and Compliance Committee
for Fiducian Group Limited, the subsidiary entities, Fiducian Investment Management Services Ltd, Fiducian Services
Pty Ltd and Fiducian Financial Services Limited and a member of the Remuneration Committee. Member of the Trustee
Subsidiary Audit Risk and Compliance Committee and Remuneration Committee in respect of the Fiducian Superannuation
Service.
Interest in shares and options
78,527 ordinary shares in Fiducian Group Limited.
2. Company secretary
P Gubecka LLB, LLM, BCom, CPA, FGIA, FCG (CS, CGP) Company Secretary
Experience and expertise
Mr. P Gubecka is the Company secretary and the General Counsel of the Group. Mr. Gubecka is an Australian legal
practitioner and CPA with over 15 years experience in financial services and superannuation.
3. Meetings of directors
The number of meetings of the company’s Board of Directors and of each board committee held during the year ended 30
June 2022, and the number of meetings attended by each director were:
Meetings of directors
Meetings of committees
Board
Audit Risk & Compliance
Remuneration
A
4
4
4
4
B
4
4
4
4
A
-
5
5
5
B
-
5
5
5
A
-
1
1
1
B
-
1
1
1
I Singh
R Bucknell
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.
4. Other
Mr. I Singh as Executive Chairman of Fiducian Group Limited, has authority for and responsibility for planning, directing and
controlling the activities of the Group, directly or indirectly, during the financial year ended 30 June 2022. This authority and
responsibility is unchanged from the previous year.
Annual Report 2022 15
DIRECTORS’ REPORT
5. Remuneration report
Directors’ fees
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 and induction process
D - Share-based compensation
E - Additional information
F - Director’s superannuation
G - Loans to directors
H - Other transactions with key management
personnel
The information provided under headings A - E include
remuneration disclosures that are required under Australian
Accounting Standard AASB 124 Related Party Disclosures.
These disclosures have been included in the Directors’
Report and have been audited.
A - Principles used to determine the
nature and the amount of remuneration
The objective of the Group’s executive reward framework
is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aligns
executive reward with achievement of strategic objectives
and the creation of value for shareholders, and conforms
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
The current base remuneration was last reviewed in
July 2022. The external directors are paid a fixed fee for
participation in Board and Committee meetings plus a fee
based on time spent on any additional matters as approved
by the Board. Directors who are financial planners, may
have received remuneration including financial planning fees
from clients from placing their financial planning business
with the Group.
Non-executive directors’ fees for the Company are
determined within an aggregate non-executive directors’ fee
pool limit, which is periodically recommended for approval
by shareholders. The maximum pool is $450,000 per
annum, which was previously 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 compulsory superannuation guarantee
contributions made on their behalf.
(b) Executive Chairman
Remuneration and other terms of employment for the
Executive Chairman are formalised in a service agreement.
The Executive 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 Chairman
• Term of agreement - until 30 June 2024
• Base salary, inclusive of superannuation, annual and
long service leave and salary sacrifice benefits
• Acceptability to shareholders
• Death and TPD/Trauma cover where Fiducian Group is
• 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.
the beneficiary
• Short-term performance incentives
• Long-term incentives through the Fiducian Group
Limited Employee and Director Share Option Plan
(ESOP)
• Retirement benefits, and
• 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. The latest review
was performed by Wentworth Advantage Pty Limited in July
2021.
16 Fiducian Group Ltd
Base salary
Mr. I 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.
Short-term incentives (STI)
The STI aims to provide an incentive to the Executive
Chairman to act in the best interests of the Company, its
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 Chairman’s
performance for a financial year is reviewed and evaluated
by the Remuneration Committee. The cornerstone to
assessing the performance of the Executive 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
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 Chairman achieved 86%
of the KPIs set for the financial year.
DIRECTORS’ REPORT
The business and operating areas considered are Financial
Planning, Funds Management, Business Development and
Distribution, and Fiducian Services comprising of Platform
Administration, Risk Management, Legal, Information
Technology, Marketing, Finance and Human Resources.
Each business area’s Executive Leader has a number
of underlying KPIs that lie within the broad objectives a),
b), and c) outlined above. The underlying KPIs of each
Executive Leader may differ and depend on their roles and
responsibilities. The Executive Chairman sets the underlying
KPIs for each Executive Leader and so each business area
has a number of performance measures required to be
delivered during the year
Achievement by Executive Leaders 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 Chairman to achieve all his KPIs.
The employment contract with the Executive Chairman
stipulates that a maximum of 20% of that year’s fixed
remuneration should be paid to the Executive Chairman if
all KPIs are satisfied. The Executive Chairman was therefore
entitled to an STI of $100,000 but chose to receive a bonus
of $20,000.
Long-term incentives
Mr. I 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 Company’s underlying net profit after tax 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
Group Performance and Shareholder returns
Underlying Net Profit After Tax (UNPAT)
Statutory Net Profit After Tax (NPAT)
EPS based on UNPAT (in cents)
EPS based on NPAT (in cents)
Dividends (in cents)
Share Price - 30 June closing (in $)
2022
15,697
13,317
49.9
42.3
29.7
7.29
2021
14,131
12,179
44.9
38.7
26.9
6.70
2020
12,725
10,463
40.5
33.3
23.0
5.00
2019
12,047
10,350
38.3
33.0
22.3
5.16
2018
10,505
9,198
33.6
29.4
20.0
4.66
Annual Report 2022 17
DIRECTORS’ REPORT
in excess of 15% 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 2022, Mr. I Singh is not entitled to any
options.
Retirement and termination benefits
Retirement benefits are delivered under the Fiducian Superannuation Service. This fund provides accumulation benefits based
on the superannuation guarantee charge 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 Chairman or by mutual consent is equal to 6 months of
the gross annual remuneration.
B - Details of remuneration
Details of the remuneration of the key management personnel are set out in the following table:
Short-Term Employee Benefits
Benefits
Payment
Post-
Share-
Employment
Based
Cash salary &
fees
$
Cash bonus
$
Annual & long
service leave
$
Super-
annuation
$
Options
$
Total
$
2022
Name
Executive Chairman
I Singh 1
558,317
13,000
30,207
27,500
47,828
676,852
Non-executive directors
R Bucknell 2
F Khouri 3
S Hallab
Totals
87,273
106,615
96,604
848,809
-
-
-
-
-
-
13,000
30,207
8,727
10,662
9,660
56,549
-
-
-
96,000
117,277
106,264
47,828
996,393
1 Mr I Singh is not entitled to any options in respect of the year ended 30 June 2022. The amount shown as options payment relates
to the grant for the previous year and represents the value of those options expensed over its term in accordance with accounting
standards. The total amount of options relating to the previous year is $114,300 which will be expensed over the vesting period.
2 Excludes GST if paid to another firm. Including amounts paid to the director’s company only in respect to director’s duties.
3 This excludes fees of $367,029 for financial planning and other services paid to companies in which Mr F Khouri has an interest in his
capacity as a financial planner.
18 Fiducian Group Ltd
DIRECTORS’ REPORT
Short-Term Employee Benefits
Benefits
Payment
Post-
Share-
Employment
Based
Cash salary &
fees
$
Cash bonus
$
Annual & long
service leave
$
Super-
annuation
$
Options
$
Total
$
2021
Name
Executive Chairman
I Singh 1
561,000
15,000
13,301
24,999
48,986
663,286
Non-executive directors
R Bucknell 2,3
F Khouri 4
S Hallab
96,000
95,279
93,100
-
-
-
-
-
-
Totals
845,379
15,000
13,301
-
9,051
8,844
42,895
-
-
-
48,986
96,000
104,331
101,944
965,561
1 Mr I Singh is entitled to 90,000 options at a strike price of $6.47 in respect of the year ended 30 June 2021. The amount shown
as options payment relates to the grant for the current year and represents the value of those options expensed over its term in
accordance with accounting standards. The total amount of options relating to this grant is $114,300 which will be expensed over the
vesting period.
2 Excludes GST if paid to another firm.
3 Including amounts paid to the director’s company only in respect to director’s duties.
4 This excludes fees of $267,783 for financial planning and other services paid to companies in which Mr F Khouri has an interest in his
capacity as a financial planner.
C - Service agreements and induction process
The service agreement of the Executive Chairman 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.
Annual Report 2022 19
DIRECTORS’ REPORT
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.
The number of options for ordinary shares in the Company
held directly by the Executive Chairman 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.
2022
Name
I Singh 1
Balance at the
start of the year
35,000
Exercised
35,000
Granted during
the year as
remuneration1
Lapsed during
the year
Balance at the
end of the year
Vested and
exercisable
90,000
-
90,000
-
1 Under the terms of his employement Mr I Singh is not entitled to any options relating to the year ended 30 June 2022. The options
granted relate to the year ended 30 June 2021 and approved at the annual general meeting on 21 October 2021 and hence included
above.
2021
Name
I Singh 1
Balance at the
start of the year
35,000
Exercised
-
Granted during
the year as
remuneration1
Lapsed during
the year
Balance at the
end of the year
Vested and
exercisable
-
-
35,000
35,000
1 Under the terms of his employment Mr I Singh was entitled to 90,000 options relating to the year ended 30 June 2021. These were
subject to approval at the annual general meeting on 21 October 2021 and therefore these have not been included in the above table.
20 Fiducian Group Ltd
(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.
DIRECTORS’ REPORT
2022
Name
I Singh
R Bucknell
F Khouri
S Hallab
2021
Name
I Singh
R Bucknell
F Khouri
S Hallab
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
10,872,061
35,000
500,000
268,323
74,527
-
-
-
-
-
-
4,000
10,907,061
500,000
268,323
78,527
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
10,872,061
500,000
268,323
68,027
-
-
-
-
-
-
-
6,500
10,872,061
500,000
268,323
74,527
Shares provided on exercise of options
During the year the Group issued 35,000 ordinary shares as a
result of the exercise of remuneration options by the Executive
Chairman of Fiducian Group Limited (2021: Nil). No amounts
are unpaid on any shares issued on the exercise of options.
F - Directors’ superannuation
Directors may have superannuation monies invested in
Fiducian Superannuation Service. These monies are invested
subject to the normal terms and conditions applying to this
superannuation fund.
G - Loans to directors
No loans were made to any directors during the financial year
(2021: Nil). Details of loans to related parties of the directors
are disclosed in Note 28 Related Party Transactions.
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 2022 there has been a
2.4% or $14,200 increase in the base salary of the Executive
Chairman while the cash bonuses granted is $20,000
(2021: $13,000) and the grant of options entitlements have
been only in accordance with the incentive programs. The
Executive Chairman is not entitled to any options in respect
of the current year ended 30 June 2022 (2021: 90,000).
Annual Report 2022 21
DIRECTORS’ REPORT
H - Other transactions with key management personnel
A director, Mr. F Khouri, is an authorised representative under the Fiducian Financial Services Pty Ltd Australian Financial
Services License 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.
Mr. R Bucknell and Mr. S Hallab were both paid director’s fees for their contribution as directors serving on 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 **
Total payments relating to other transactions with key management personnel
Consolidated
2022
$
2021
$
316,899
302,275
367,029
267,783
683,928
570,058
* Details of these fees have been provided in the Remuneration report included in the Directors’ Report.
** Comparatives figures for the previous year have been restated to make them comparable with the current year.
Shares under option
Unissued ordinary shares of Fiducian Group Limited under
option at the date of this report are disclosed in Note 24 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 if any, during the year 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.
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.
22 Fiducian Group Ltd
DIRECTORS’ REPORT
Proceedings on behalf of the company
Rounding of amounts
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:
The Company is of a kind referred to in ASIC Corporations
Instrument 2016/191 dated 1 April 2016, as 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.
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/about/corporate-
governance/
This report is made in accordance with a resolution of the
directors.
• all non-audit services have been reviewed by the Audit
Risk and Compliance Committee to ensure they do not
impact the impartiality and objectivity of the auditor
Inderjit (Indy) Singh OAM
Executive Chairman
• none of the services undermine the general principles
relating to auditor independence as set out in APES110
Code of Ethics for Professional Accountants
Sydney,
15 August 2022
The fees paid or payable for services provided during the
year to the auditor (KPMG) of the parent entity, its related
practices and non-related audit firms, are shown in Note 25
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 24.
KPMG remains the external auditor in accordance with
Section 327 of the Corporations Act 2001.
Annual Report 2022 23
AUDITOR’S INDEPENDENCE DECLARATION
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Fiducian Group Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Fiducian Group Limited
for the financial year ended 30 June 2022 there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the Corporations
Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Andrew Reeves
Partner
Sydney
15 August 2022
©2022 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are
trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved
under Professional Standards Legislation.
24
©2022 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms
affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name
and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited
by a scheme approved under Professional Standards Legislation.
24 Fiducian Group Ltd
Auditor’s Independence Declaration
DIRECTORS’ DECLARATION
72
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
26
27
28
29
30
72
73
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.
These financial statements were authorised for issue by the directors on 15 August 2022.
The directors have the power to amend and reissue the financial statements.
Annual Report 2022 25
FINANCIAL STATEMENTS
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2022
Notes
Consolidated
Revenue from ordinary activities
Other income
Payments to Financial Advisers, Investment Managers and other service
providers
Employee benefits expense
Amortisation and depreciation 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 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
2022
$’000
69,304
235
(18,356)
(20,311)
(4,092)
(7,716)
19,064
(5,747)
13,317
-
13,317
2021
$’000
58,640
199
(15,944)
(17,061)
(3,627)
(5,274)
16,933
(4,754)
12,179
-
12,179
13,317
12,179
42.31
42.23
38.74
38.70
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
26 Fiducian Group Ltd
Financial Statements
Consolidated Statement of Financial Position
As at 30 June 2022
FINANCIAL STATEMENTS
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
Right-of-use assets
Intangible assets
Total Non-Current Assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Lease liabilities
Current tax liabilities
Total Current Liabilities
Non-current liabilities
Net deferred tax liabilities
Lease liabilities
Provisions
Total Non-Current Liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Retained profits
Total equity
2022
$’000
17,484
7,942
25,426
7,007
887
5,102
32,269
45,265
70,691
12,982
1,596
407
14,985
3,774
4,229
571
8,574
23,559
47,132
7,788
98
39,246
47,132
2021
$’000
19,316
7,837
27,153
6,134
611
5,324
19,373
31,442
58,595
7,474
1,315
457
9,246
1,483
4,578
419
6,480
15,726
42,869
7,636
75
35,158
42,869
9
10
11
13
35
15
16
35
17
18
35
19
20
21
22
The above statement of financial position should be read in conjunction with the accompanying notes.
Annual Report 2022 27
FINANCIAL STATEMENTS
Consolidated Statement of Changes in Equity
As at 30 June 2022
Balance as at 30 June 2020
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with equity holders in their capacity
as equity holders
Dividends paid
Options expense
Total transactions with equity holders
Balance as at 30 June 2021
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with equity holders in their capacity
as equity holders
Share issued on exercise of option
Dividends paid
Transfer to retained profits
Transfer from reserves
Options expense
Total transactions with equity holders
Balance as at 30 June 2022
Contributed
Notes
Equity
Reserves
$’000
7,636
$’000
25
-
-
-
-
-
-
7,636
-
-
-
152
-
-
-
-
152
7,788
8
21
8
21
-
-
-
-
50
50
75
-
-
-
-
-
(25)
-
48
23
98
Retained
Profits
$’000
30,462
12,179
-
12,179
(7,483)
-
(7,483)
35,158
13,317
-
Total
$’000
38,123
12,179
-
12,179
(7,483)
50
(7,433)
42,869
13,317
-
13,317
13,317
-
(9,254)
-
25
-
(9,229)
39,246
152
(9,254)
(25)
25
48
(9,054)
47,132
The above statement of changes in equity should be read in conjunction with the accompanying notes.
28 Fiducian Group Ltd
Consolidated Statement of Cash Flows
For the year ended 30 June 2022
FINANCIAL STATEMENTS
Notes
Consolidated
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
Income taxes paid
Net cash inflow from operating activities
29
Cash flows from investing activities
Payments in relation to acquisitions
Business development loans granted to advisers
Repayment of business development loans by advisers
Payments for property, plant and equipment
Net cash outflow from investing activities
Cash flows from financing activities
Lease principal payments
Proceeds on issue of shares
Dividends paid
Net cash outflow from financing activities
Net (decrease)/increase in cash and cash equivalents held
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of year
9
The above statement of cash flows should be read in conjunction with the accompanying notes.
2022
$’000
76,660
(51,444)
25,216
235
(6,772)
18,679
(8,118)
(1,982)
973
(579)
(9,706)
(1,703)
152
(9,254)
(10,805)
(1,832)
19,316
17,484
2021
$’000
64,060
(43,050)
21,010
199
(5,170)
16,039
(544)
(2,207)
1,386
(105)
(1,470)
(1,731)
-
(7,483)
(9,214)
5,355
13,961
19,316
Annual Report 2022 29
FINANCIAL STATEMENTS
Notes to the Financial Statements
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 2022 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 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
entity’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 recognition
Revenue is recognised, using the five step approach
prescribed by the accounting standards, upon satisfaction
of the performance obligations, which occur when control
of the goods or services is transferred to the customer.
The key judgments in the recognition of revenue involves
determining whether the contract is a single performance
contract, whether the performance obligation is satisfied
over time, as well as the timing and amount of variable
consideration to be recognised.
The primary revenue streams from contracts with customers
for the Group are in the nature of management fee income
earned from funds management, fees earned from offering
platform services and fee income from offering advice to
customers.
30 Fiducian Group Ltd
FINANCIAL STATEMENTS
1. Summary of significant accounting policies (continued)
• Fees earned from the funds management services
have been accounted for as single performance
obligations to each fund satisfied over time. The
fees received based on a fixed percentage on the
assets under management are considered variable
consideration but with the uncertainty in the variable
element being resolved within the reporting period.
Fund management services are held to be performed
on an ongoing daily basis and therefore fees are
accrued daily and received monthly in arrears for the
service provided.
• Revenue streams earned from platform administration
services are identified as separate single performance
obligations to individual customers with customers
exercising control over the funds transitioned onto the
platform. Platform administration services are held to
be performed on an ongoing daily basis and therefore
fees are accrued daily and received monthly in arrears
for the service provided by the platform.
• Fees earned from offering advice to customers are a
combination of fees earned for ongoing service, and
one off fees. Ongoing fees based on Funds under
Advice are treated as single performance obligations
satisfied over time. The fees received based on a fixed
percentage on the Funds under Advice are considered
variable consideration but with the uncertainty in the
variable element being resolved within the reporting
period. Advice service fees are therefore accrued
daily and received monthly in arrears for the service
period, and therefore the revenue is attributed to
services provided for within the period and accounted
for as such. One off fees are identified as a single
performance obligation with service performed at a
point in time and revenue recognised in line with the
service.
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.
Annual Report 2022 31
FINANCIAL STATEMENTS
1. Summary of significant accounting policies (continued)
E. Leases
H. Cash and cash equivalents
The Group leases office space and equipment for which
contracts are typically entered into for fixed periods and
may include extension options. Leases are recognised as
a right-of-use asset and a corresponding liability at the
commencement date, being the date the leased asset is
available for use by the Group. The accounting policy for the
classification and accounting for leases has been explained
in Note 1-W.
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 and Responsible Entity of
an Investor Directed Portfolio Service, Fiducian Investment
Service and the Responsible Entity of Fiducian Funds and
Separately Managed Accounts (“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 2022 reflect the fiduciary nature of
these companies’ 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.
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.
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.
Trade receivables are written off where there is no
reasonable expectation of recovery. Indicators that there
is no reasonable expectation of recovery include, amongst
others, the failure of debtor to engage in a repayment plan
with the Group, and a failure to make contractual payments
for a period greater than 120 days past due. 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.
32 Fiducian Group Ltd
FINANCIAL STATEMENTS
1. Summary of significant accounting policies (continued)
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.
K. Investments and other financial
instruments
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.
Business Development Loans
Fiducian provides financial support in the form of business
development loans to aligned financial planner franchisees
to enable them to grow their business organically or through
acquisition. Management have assessed the business model
for these loans to be ‘Hold and Collect’ and the cash flows
of these loans to be Solely Payments of Principal and Interest
(SPPI) and therefore the business development loans are
classified as Amortised Cost.
Impairment
Credit impairments are based on a 3-stage Expected Credit
Loss (ECL) approach where individual loans are categorised
based on changes in the credit risk since origination. An
unbiased and probability weighted ECL is then computed
for the individual loan as the product of the Probability of
Default (PD), the Loss Given Default (LGD) probability and the
Exposure At the time of Default (EAD).
The ECL is determined with reference to the following stages:
Stage 1: Performing loans 12 month ECL
At initial recognition and for financial assets for which credit
risk was low, ECL was determined based on the PD over
the next 12 months and the losses associated with such
default, adjusted for forward looking information. Interest
income was determined with reference to the effective
interest rate and the gross carrying amount of the asset.
Stage 2: Non-performing loans: Lifetime ECL
The Group assessed whether there had been a Significant
Increase in Credit Risk (SICR) of the loans since initial
recognition, based on qualitative and quantitative factors,
and reasonable forward looking information, which
included significant management judgement. Qualitative
factors included but were not limited to payment
history, requests to modify contractual payments and
compliance reviews. Quantitative analysis utilised an
internally developed model based on loan to value ratios
and forecasted cash flows, adjusted for forward looking
indicators such as the level of the ASX 200. Where
the Group’s modelling indicated a SICR, an ECL was
determined with reference to the loan’s lifetime probability
of default and the lifetime loss associated with that
probability of default. Interest income was determined
with reference to the financial asset’s effective interest rate
and the gross carrying amount of the asset. The deferral
of contractual payments for short periods of time has not
been treated as an automatic indicator of SICR by and of
themselves.
Stage 3: Credit impaired loans: Lifetime ECL
Where one or more events which have a detrimental
impact on estimated future cash flows has occurred, the
loans would be classified as credit impaired and included
in stage 3. Management have pre-defined some events
that would objectively indicate credit impairment such as
loan to value ratio increasing beyond a certain percentage
and bankruptcy of the adviser. Lifetime ECL continues
to be recognised but interest income is taken on a net of
provision basis. As at 30 June 2022 the Group does not
have any business development loans in stage 3.
L. Fair value estimation
Other than the business development loans discussed
above, 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.
Annual Report 2022 33
FINANCIAL STATEMENTS
1. Summary of significant accounting policies (continued)
and there is no indication that the amortisation period is
less than 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. Right-of-use assets and lease liabilities
The Group recognises a right-of-use asset offset with a
corresponding lease liability in respect of its rented premises
from the date at which the premises became available for use
by the Group.
The right-of-use assets initially measured at cost will
comprise the following:
• The amount of the initial measurement of the lease
liabilities
• Any lease payments made at/or before the
commencement date less lease incentives
• Any initial directs costs incurred by the group and
• Restoration costs
The lease liabilities as at the commencement date will include
the net present value of the following lease payments:
• Any fixed payments less any lease incentives receivable
• Variable lease payments based on an index or
rate , initially measured using that index or rate at
commencement
• Amount expected to be payable by the Group under a
residual value guarantee
• Payments of penalties for termination the lease, if the
lease term reflects the group exercising the option to
terminate the lease
• Exercise price of a purchase option if the Group is
reasonably certain to exercise that option
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 – 10 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
estimated 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 amounts. These are included in the
statement of comprehensive income.
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
Unpaid consideration for the acquisition of client portfolios
is shown as an outstanding liability while the full amount of
client portfolios acquired is booked as an intangible asset
and amortised on a straight-line basis over a period of
10 years. The period is based on management’s internal
assessment of the average life of an acquired client portfolio
34 Fiducian Group Ltd
FINANCIAL STATEMENTS
1. Summary of significant accounting policies (continued)
The right-of-use asset is depreciated from the
commencement date to the earlier of the end of the useful
life of the right-of-use asset and the end of the lease
term (including the extension option where applicable)
on a straight-line basis. In determining the lease term,
management has considered all facts and circumstances
that create an economic incentive to exercise the extension
option. If the Group is reasonably certain that it will exercise
the option to renew the lease then the extended period has
been taken into consideration for calculating the depreciation
amount. The right-of-use assets held by the Group may be
subsequently adjusted for any re-measurement of the lease
liability to reflect any reassessment or lease modifications
identified, or to reflect revised in-substance fixed lease
payments.
The lease payments are discounted using the interest rate
implicit in the lease or, where that is not available, by using
the lessee’s incremental borrowing rate payable to borrow
funds necessary to obtain an asset of similar value in a similar
economic environment with similar terms and conditions.
Under the new standard the lease payments are allocated
between the principal and finance cost. The operating
expense in respect of lease payments in the profit and loss
account has been replaced by the finance cost, calculated
by applying the incremental borrowing rate on the remaining
balance of the lease liability, and the depreciation cost for
the right-of-use asset. This has typically resulted in higher
expenses in earlier years and lower expenses in later years
with flow on impacts to key metrics like EBITDA etc.
The Finance cost component of the lease payment is treated
as an operating cash outflow in the statement of cash flows
while the principal payment has been treated as a financing
cash outflow.
Payments associated with short-term leases of equipment
and premises with a lease term of less than 12 months
continue to be recognised on a straight line basis as an
expense in the profit and loss account.
P. 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.
Q. 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.
R. 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 and 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.
Annual Report 2022 35
FINANCIAL STATEMENTS
1. Summary of significant accounting policies (continued)
Receivables or other 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.
W. Rounding of amounts
The Company is of a kind referred to in Legislative Instrument
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 Legislative Instrument
to the nearest thousand dollars, or in certain cases, to the
nearest dollar.
X. New Australian Accounting
Standards and amendments to
Australian Accounting Standards and
interpretations that are either effective
in the current financial year or have been
early adopted
The amendments made to existing standards that were
mandatorily effective or have been early adopted for the
annual reporting period beginning on 1 July 2021 did not
result in a material impact on this Financial Report. There
were no new Australian accounting standards that were
mandatorily effective or have been early adopted for the
Financial Report
Y. New Australian Accounting
Standards and amendments to
Australian Accounting Standards and
Interpretations that are not yet effective
for the financial year
As at the date of this financial report, there are a number
of new and revised accounting standards published by
the Australian Accounting Standards Board for which the
mandatory application dates fall after the end of this current
reporting year. None of these standards have been early
adopted and applied in the current reporting year. These
changes are not expected to have a significant financial
impact, but may result in additional disclosures in the future.
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.
S. 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 re-issued.
T. 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.
U. 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 or at a discount in
relation to dilutive potential ordinary shares.
V. 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.
36 Fiducian Group Ltd
FINANCIAL STATEMENTS
2. Critical accounting estimates and
3. Segment information
judgements
In preparing the Annual Report, the Group makes estimates
and assumptions concerning the future which management
believes are reasonable. However, outcomes may differ
from management’s assumptions and estimates and may
require adjustments to the carrying amounts of the assets
and liabilities reported. These estimates and judgements 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
client portfolios may be impaired in accordance with the
accounting policy stated in Note 1-N. If any such indication
exists, the Group shall estimate the recoverable amount of
the asset. The recoverable amounts of cash-generating units
have been determined based on earnings multiples requiring
the use of sustainable revenue estimates and comparable
market transactions.
(iii) Estimated impairment of loans receivables
The Group applies a three-stage approach to measuring
the ECL based on changes in the business development
loan’s underlying credit risk and includes forward-looking
or macroeconomic information (FLI). The calculation of ECL
requires judgement and the choice of inputs, estimates and
assumptions around the product of the probability of default
(PD), the loss given default (LGD) and the exposure of default
(EAG). Outcomes within the next financial period that are
different from management’s assumptions and estimates
could result in changes to the timing and amount of ECL to
be recognised.
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:
Funds Management
The Group acts as Responsible Entity for managed
investment schemes and separately managed accounts
through its subsidiary Fiducian Investment Management
Services Limited.
Financial Planning
The Group continues its specialist financial planning
services through its subsidiary, Fiducian Financial
Services Pty Ltd.
Platform Administration
The Group acts as an Registrable Superannuation
Entity (RSE) of a public offer superannuation fund which
is offered on its wrap platform through its subsidiary
Fiducian Portfolio Services Ltd. The Group also acts as
an Operator of an Investor Directed Portfolio Service
through another subsidiary Fiducian Investment
Management Services Limited.
Corporate Services
This segment is an aggregation of the administration
and professional services provided to the Group by
a subsidiary, Fiducian Services Pty Ltd and Fiducian
Business Services Pty Ltd, which provided distribution
activities in the current period.
Geographical segments
The Group operates in the geographical segments of
Australia.
Annual Report 2022 37
FINANCIAL STATEMENTS
3. Segment information (Continued)
B. Primary reporting - Business segments
Funds
Management
Financial
Planning
Platform
Administration
Corporate
Services
Segment
Eliminations Consolidated
$’000
$’000
$’000
$’000
$’000
$’000
2022
Revenue from external customers
27,404
23,435
18,465
-
Inter-segment sales 1
Other revenue
(5,756)
(1,350)
(4,400)
11,506
21
202
-
12
Total segment revenue
21,669
22,287
14,065
11,518
-
-
-
-
69,304
-
235
69,539
Profit from ordinary activities
before income tax, depreciation
and amortisation
Depreciation, amortisation and
impairment
Profit from ordinary activities before
income tax
Income tax expense
Profit from ordinary activities after
income tax expense
Segment assets
Segment liabilities
Acquisitions of plant and equipment,
intangible and other non-current
segment assets
14,366
2,996
12,172
(6,378)
-
23,156
11,296
47,992
2,726
93,092
(84,415)
3,290
46,832
-
46,130
(72,693)
4,092
19,064
(5,747)
13,317
70,691
23,559
-
15,170
-
573
-
15,743
1 Intersegment sales for the current period represents internal service charges from the Corporate Services segments to other business
segments.
38 Fiducian Group Ltd
FINANCIAL STATEMENTS
3. Segment information (Continued)
B. Primary reporting - Business segments (Continued)
Funds
Management
Financial
Planning
Platform
Administration
Corporate
Services
Segment
Eliminations Consolidated
$’000
$’000
$’000
$’000
$’000
$’000
2021
Revenue from external customers
22,823
19,446
16,371
-
Inter-segment sales 1
Other revenue
(4,974)
(700)*
(3,800)
9,474*
22
167
-
10
Total segment revenue
17,871
18,913*
12,571
9,484*
-
-
-
-
58,640
-
199
58,839
Profit from ordinary activities
before income tax, depreciation
and amortisation
Depreciation, amortisation and
impairment
Profit from ordinary activities before
income tax
Income tax expense
Profit from ordinary activities after
income tax expense
Segment assets
Segment liabilities
Acquisitions of plant and equipment,
intangible and other non-current
segment assets
11,517
1,692*
10,556
(3,205)*
-
20,560
3,627
16,933
(4,754)
12,179
58,595
15,726
82,620
40,225
(70,183)
(58,458)
310
-
285
10,748
32,317
3,093
2,800
31,159
-
(25)
-
-
1 Intersegment sales for the current period represents internal service charges from the Corporate Services segments to other business
segments.
* Comparative figures for the previous year have been restated to make them comparable with the current year.
Annual Report 2022 39
FINANCIAL STATEMENTS
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 in the statement of comprehensive income is reported in a manner consistent with the regular reporting provided to
the board during the year.
Segment revenue reconciles to total revenue from continuing operations as follows:
Segment revenue 1
Total revenue from continuing operations (Note 4)
Consolidated
2022
$’000
69,304
69,304
2021
$’000
58,640
58,640
1 Segment revenue excludes the interest income shown as Other revenue in the above note 3 tables.
The Group is domiciled in Australia. The amount of its revenue from external customers in Australia is $69,304,000 (2021:
$58,640,000).
(ii) Segment assets
Total assets are reported in a manner consistent with the regular reporting provided to the board during the year. These
assets are allocated based on the operations of the segment and the physical location of the asset.
All assets are located in Australia.
(iii) Segment liabilities
Total liabilities are reported in a manner consistent with the regular reporting provided to the board during the year. These
liabilities are allocated based on the operations of the segment.
4. Revenue from ordinary activities
From continuing operations
Sales revenue
Fees received 1
Other
Revenue from ordinary activities
1 Includes expense recovery fee of $2,700,000 (2021: $2,883,333). For details refer to Note 6.
5. Other income
Interest received/receivable
Other income
40 Fiducian Group Ltd
Consolidated
2022
$’000
68,081
1,223
69,304
Consolidated
2022
$’000
235
235
2021
$’000
57,508
1,132
58,640
2021
$’000
199
199
6. Expenses
Profit before income tax includes the following expenses:
a) Amortisation and depreciation expense
Amortisation
Capitalised computer software
Client portfolio acquisition costs
Total amortisation
Depreciation
Furniture, office equipment and computers
Right-of-use assets
Total depreciation
Total amortisation and depreciation expense
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 Recovery 1
Total other expenses
FINANCIAL STATEMENTS
Consolidated
2022
$’000
10
2,259
2,269
303
1,520
1,823
4,092
735
2,064
154
231
1,302
33
629
443
3,077
(952)
7,716
2021
$’000
9
1,779
1,788
255
1,584
1,839
3,627
696
1,140
36
137
1,057
64
596
604
2,054
(1,110)
5,274
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. Additional out of pocket expense reimbursements of $575,915 (2021:
$447,221) have been included in Expense Recovery in Note 6(b). For the current year the Expense Recovery Fee of $2,700,000 (2021:
$2,883,333) has been included in Revenue from ordinary activities in Note 4 as part of Fees received.
Annual Report 2022 41
FINANCIAL STATEMENTS
7. Income tax expense
a) Income tax expense
Current tax
Deferred tax
Income tax expense
Deferred income tax (revenue)/expense included in income tax expense comprises:
(Increase)/decrease 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% (2021: 30%)
Tax effect of amounts which are not deductible/(taxable) in calculating taxable income:
Entertainment
Sundry items
Income tax (over)/under provided in previous year
Income tax expense
c) Tax consolidation legislation
Consolidated
2022
$’000
6,720
(973)
5,747
179
(1,152)
(973)
19,064
5,719
37
37
(46)
5,747
2021
$’000
5,268
(514)
4,754
407
(921)
(514)
16,933
5,080
19
(143)
(202)
4,754
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.
42 Fiducian Group Ltd
8. Dividends
Final ordinary fully franked dividend for the year ended 30 June 2021 of 14.60 cents
(2020: Fully franked 11.50 cents) per share paid on 13 September 2021.
Interim ordinary fully franked dividend for the year ended 30 June 2022 of 14.80 cents
(2021: Fully franked 12.30 cents) per share paid on 14 March 2022.
Total dividends paid during the year
FINANCIAL STATEMENTS
Consolidated
2022
$’000
4,596
4,658
9,254
2021
$’000
3,616
3,867
7,483
Subsequent to 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 2022 of 14.90 cents per ordinary share held on 29 August 2022 and payable on
12 September 2022.
Franked dividends
The franked portions of the final dividends recommended after 30 June 2022 will be franked out of existing franking credits.
Consolidated
2022
$’000
2021
$’000
Franking credits available for the subsequent financial year based on a tax rate of 30%
23,485
20,227
The above amounts represent the balances of the franking account as at the end of the financial year, adjusted for:
(a) franking credits that will arise from the payment of the amount of the provision for income tax
(b) franking debits that will arise from the payment of dividends recognised as a liability at the reporting date
(c) franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date
The consolidated amounts include franking credits that would be available to the parent entity if distributable profits from
subsidiaries were paid as dividends.
The impact on the franking account of the dividend recommended by the directors since year end, but not recognised as a
liability at year end, will be a reduction in the franking account of approximately $2,010,071 (2021: $1,967,410).
9. Current assets – Cash and cash equivalents
Cash at bank and in hand
Balance at end of the year
Consolidated
2022
$’000
17,484
17,484
2021
$’000
19,316
19,316
Annual Report 2022 43
FINANCIAL STATEMENTS
10. Current assets – Trade and other receivables
Amounts receivable from related entities:
Related trusts
Business development loans *
Other
Prepayments
Less: provision for impairment of trade receivables - Other
Consolidated
2022
$’000
4,495
1,991
1,029
735
8,250
(308)
7,942
2021
$’000
4,454#
1,659
1,456#
576
8,145
(308)
7,837
* Refer to Note 11 for the non-current portion of these receivables.
# Comparatives figures for the previous year have been restated to make them comparable with the current year.
Movement in provision for impairment of trade receivables - Other
Balance at beginning of the year
Reduction/(Additional) provision during the year
Balance at end of the year
(308)
-
(308)
(459)
151
(308)
At 30 June 2022, a provision for impairment exists for trade receivables outstanding greater that 120 days where management
considers that the receivable is impaired. There is no material loss expected other than the provisions made.
Information about the Group’s exposure to interest rate risk in relation to trade and other receivables is provided in Note 32-A and
details on the credit risk associated with Business Development loans in Note 32-B.
11. Non-current assets – Loan receivables
Business development loans *
Less: provision for impairment of loans
Balance at end of the year
Consolidated
2022
$’000
7,328
(321)
7,007
2021
$’000
6,455
(321)
6,134
* Refer to Note 10 for the current portion of these receivables.
A. Impaired receivables and receivables past due
The Group does not have any non-performing loans however consistent with the 3 stage approach to ECL recognition, some
underperforming loans have been classified as Stage 2 where there has been a SICR in underlying exposures since initial
recognition despite these assets not being of a lower credit quality than exposures classified in stage 1. In accordance with
the ECL methodology, these loans have transitioned from stage 1 to stage 2, requiring the provision of a Lifetime ECL.
44 Fiducian Group Ltd
11. Non-current assets – Loan receivables (continued)
Underperforming loans included in Stage 2 assessment
Impaired receivables and receivables past due
Less: Lifetime ECL against Stage 2
Net impaired receivables and receivables past due
FINANCIAL STATEMENTS
Consolidated
2022
$’000
2,868
2,868
(321)
2,547
2021
$’000
2,827
2,827
(321)
2,506
The Group assessed semi-annually its business development loans and the related ECL to determine whether there has
been a SICR. The review considered the macroeconomic outlook, adviser credit quality, the type of collateral held, exposure
at default and the effect of payment deferral options, if any, as at the reporting date. The deferral of contractual payments for
short periods of time is not been treated as an automatic indicator of SICR by and of themselves.
The SICR methodology used in the review is a relative credit risk based approach which considers changes in an underlying
exposure’s credit risk since origination. The Group used three downsides scenarios anchored to a deterioration in the ASX
200, broadly representing low, medium and significant downside to determine a SICR. There has been no increases in the
quantum in Stage 2 exposures indicating there has been no increase in credit risk since origination.
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 the agreement.
B. Fair values
The fair values and carrying values of non-current receivables of the Group are as follows:
Business development loans *
2022
2021
Carrying amount
Fair value
Carrying amount
Fair value
$’000
7,007
$’000
7,007
$’000
6,134
$’000
6,134
* Business development loans are carried at amortised cost; their carrying value is a reasonable approximation of fair value.
Annual Report 2022 45
FINANCIAL STATEMENTS
12. Investment in Subsidiaries
The Group’s subsidiaries as at 30 June 2022 are set out below.
Country of
Equity Holding
Name of Entity
Incorporation
Class of Shares
Fiducian Investment Management Services Ltd (FIMS) 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 Operator of Fiducian Investment Service and Responsible Entity for the Fiducian Funds and Separately
Managed Account.
2 The Company acts as the Trustee for the Fiducian Superannuation Service.
3 The Company provides platform administration to clients and corporate services to other entities within the Group.
4 The principal activity of the Company is the provision of a specialist financial planning services network.
5 The Company is responsible for the distribution activities on behalf of the Group.
13. Non-current assets – Property, plant & equipment
Plant and Equipment
Cost
Less: accumulated depreciation
Total plant and equipment
Consolidated
2022
$’000
3,200
(2,313)
887
2021
$’000
2,620
(2,009)
611
46 Fiducian Group Ltd
FINANCIAL STATEMENTS
13. Non-current assets – Property, plant & equipment (continued)
Movements
Reconciliation of the carrying amount of each class of property, plant and equipment are set out below.
Furniture
and Office
Leasehold
Equipment
Computers
Improvements
$’000
$’000
$’000
Consolidated at 30 June 2020
Cost
Accumulated depreciation
Net book amount
Year ended 30 June 2021
Opening net book amount
Additions
Disposals
Depreciation
Closing net book amount
At 30 June 2021
Cost
Accumulated depreciation
Net book amount
Year ended 30 June 2022
Opening net book amount
Additions
Disposals
Depreciation
Closing net book amount
At 30 June 2022
Cost
Accumulated depreciation
Net book amount
319
(281)
38
38
-
(3)
(15)
20
316
(296)
20
20
-
-
(10)
10
316
(306)
10
1,362
(641)
721
721
109
-
(239)
591
1,471
(880)
591
591
464
-
(293)
762
1,935
(1,173)
762
834
(834)
-
-
-
-
-
-
834
(834)
-
-
115
-
-
115
949
(834)
115
Total
$’000
2,515
(1,756)
759
759
109
(3)
(254)
611
2,621
(2,010)
611
611
579
-
(303)
887
3,200
(2,313)
887
Annual Report 2022 47
FINANCIAL STATEMENTS
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
AASB 16 lease adjustments
Deferred tax assets before set off
Set off against deferred tax liabilities (Note 18)
Movements:
Opening balance at 1 July
Addition during the year
Taken to the statement of comprehensive income
Deferred tax assets before set off
Set off against deferred tax liabilities
Consolidated
2022
$’000
93
1,074
552
116
18
1,741
3,594
(3,594)
-
3,149
624
(179)
3,594
(3,594)
-
2021
$’000
93
702
374
214
5
1,761
3,149
(3,149)
-
3,556
-
(407)
3,149
(3,149)
-
48 Fiducian Group Ltd
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: Impairment/amortisation
Total intangible assets
FINANCIAL STATEMENTS
Consolidated
2022
$’000
5,260
(5,054)
206
31,997
(12,655)
19,342
13,475
(754)
12,721
32,269
2021
$’000
5,259
(5,044)
215
20,332
(10,396)
9,936
9,976
(754)
9,222
19,373
Annual Report 2022 49
FINANCIAL STATEMENTS
15. Non-current assets – Intangible assets (Continued)
A. Movements
Movements in each category are set out below:
Acquisition of
Goodwill on
Client Portfolios
Acquisition
Consolidated at 30 June 2020
Cost
Accumulated amortisation/impairment 2
Net book amount
Year ended 30 June 2021
Opening net book amount
Additions/Work in progress 1
Sale of business
Amortisation/impairment charge 2
Closing net book amount
At 30 June 2021
Cost
Accumulated amortisation/impairment 2
Net book amount
Year ended 30 June 2022
Opening net book amount
Additions
Amortisation/impairment charge 2
Closing net book amount
At 30 June 2022
Cost
Accumulated amortisation/impairment 2
Net book amount
$’000
20,376
(8,617)
11,759
11,759
43
(87)
(1,779)
9,936
20,332
(10,396)
9,936
9,936
11,665
(2,259)
19,342
31,997
(12,655)
19,342
$’000
9,862
(659)
9,203
9,203
19
-
-
9,222
9,881
(659)
9,222
9,222
3,499
-
12,721
13,380
(659)
12,721
Capitalised
Computer
Software
$’000
5,060
(5,035)
25
25
199
-
(9)
215
5,259
(5,044)
215
215
-
(9)
206
5,259
(5,053)
206
Total
$’000
35,298
(14,311)
20,987
20,987
261
(87)
(1,788)
19,373
35,472
(16,099)
19,373
19,373
15,164
(2,268)
32,269
50,636
(18,367)
32,269
1 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.
2 Amortisation of $2,268,000 (2021 : $1,788,000) is included in depreciation, amortisation and impairment expense in the statement of
comprehensive income.
50 Fiducian Group Ltd
FINANCIAL STATEMENTS
15. Non-current assets – Intangible assets (Continued)
B. Impairment tests for goodwill and client portfolios
Goodwill and client portfolios are allocated to the financial planning business reportable segment which has been identified as
the applicable cash-generating unit (CGU). The CGU is the lowest level within the entity at which the goodwill and client portfolios
are monitored for internal management purposes on an ongoing basis. The recoverable amount of the CGU is determined based
on market value calculations. These calculations apply income multiples consistent with the market valuations of similar financial
services businesses to recurring revenue from the CGU at the year end, less cost to sell.
C. Impact of possible changes in key assumptions
In the current year there has been considerable volatility in the economic environment as a result of COVID-19, the global
economic slowdown, the Russian invasion of Ukraine and the ongoing impact of interest rate rises and inflation on the domestic
economy. Management has carefully considered these impacts and the implications of lower economic activity on its operations.
However management has not observed any disruption to its operations or significantly lower revenue as a result of the reduced
economic activity, and therefore have seen no reason to reduce the estimates for operating cash flows for impairment testing
purposes.
The estimates and judgments included in the fair value calculations are based on historical experience, observed transactions in
the market for similar financial services businesses and other factors, including management’s and the Directors’ expectations
of future events that are believed to be reasonable under the current circumstances. There has been no impairment recognised
for the Group’s CGUs in the impairment assessment performed at 30 June 2022. The key assumption made in the assessment
of impairment of goodwill is the income multiple applied to recurring revenues. The income multiple assumption is compared
to market each year and adjusted appropriately. Based on management’s current assessment, the recoverable amount of the
Group’s CGU exceeds the carrying amount. A 23% change in the current multiple of 2.2 used in the assumption would be
required before the carrying value of the CGU would exceed the recoverable amount.
Due to the uncertainties disclosed above and to assess the accuracy of the market value calculation, management performed
an alternative analysis using the value-in-use model which considers long term assumptions such as market growth rates, a
terminal growth rate, inflation rates and a discount rate. Based on management’s value-in-use analysis, the recoverable amount
of the Group’s CGU exceeds the carrying amount and is consistent with the outcome of the market value approach. Based on
this approach, the implied multiple was 2.25 which indicates that the multiple used above is appropriate.
D. Impairment charge
During the year, no impairment charge was recorded in the books (2021: Nil).
Annual Report 2022 51
FINANCIAL STATEMENTS
E. Business Combination
During the year the Group had made the following acquisitions. There was no acquisition in the corresponding previous year
Segment
Fiducian entity
Acquisition Date
Acquisition Description
Ownership acquired
Location
Funds Under Advice on acquisition date
Annual recurring revenue on acquisition
Maximum purchase price payable on acquisition
Vendor staff employed by Group
Value attributed on the Statement of Financial Position as at reporting date
Business combination or asset only
Provisional Fair value of assets recognised as a result of acquisition as at 30 June 2022:
Intangible assets
Deferred Tax Liabilities
Net Identifiable intangible assets acquired
Goodwill on acquisition
Deferred consideration at reporting date
Net Assets Acquired
Funds Under Advice as at 30 June 2022
30 Jun 2022
Financial Planning
Fiducian Financial Services Pty Ltd
1 February 2022
Client Portfolio
100%
South Australia and Northern Territory
$1,100,000,000
$7,600,000
$13,200,000
Yes
100%
Business Combination
$11,664,632
($3,499,390)
$8,165,242
$3,499,390
2,997,424
$11,664,632
$854,000,000
While each acquisition is considered on its own merits, a number of synergies are expected to result to the Group once the
business combination has been fully implemented and for which goodwill is recognised in the books. The synergy results from
leveraging the existing scale Fiducian has from its infrastructure in Risk, Compliance, IT, Legal, Finance and other support
functions, products and processes. Despite the synergies at Group level, the acquisitions of client portfolios and goodwill are
recorded in the Financial planning business only and amortised over 10 years.
The acquisitions are tested for impairment based on financial planning revenue as a standalone business unit and do not
consider any revenue synergies generated in other entities from the acquisition. Due to realignment of individual clients within
the unit, Financial planning as a whole is considered the appropriate CGU for impairment testing purposes.
The acquired business has commenced contributing to the Group’s current year profits though the business is still in the
process of being assimilated into the Fiducian structure. Management estimates that after adjusting for clients who may not
opt in, the acquisition will contribute revenue of $6.4 million for a full 12 month period and 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 agreement for the acquisition, 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.
52 Fiducian Group Ltd
16. Current liabilities – Trade and other payables
Trade payables
Other payables
Client portfolio deferred settlement
Annual leave entitlements accrued
Long service leave entitlements accrued
Total trade and other payables
Information about the Group’s exposure to credit and interest rate risk is shown in Note 32.
17. Current liabilities – Current tax liabilities
Income tax
Total current tax liabilities
FINANCIAL STATEMENTS
Consolidated
2022
$’000
2,756
4,225
2,997
1,322
1,682
12,982
Consolidated
2022
$’000
407
407
2021
$’000
2,611
2,940
-
791
1,132
7,474
2021
$’000
457
457
Annual Report 2022 53
FINANCIAL STATEMENTS
18. Non-current liabilities – Deferred tax liabilities
Consolidated
The balance comprises temporary differences attributable to:
Recognition and depreciation of ROU assets
Recognition and 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
Total deferred tax liabilities
19. Non-current liabilities – Provisions
Employee benefits - long service leave
Total provisions
2022
$’000
1,531
5,837
7,368
(3,594)
3,774
4,632
3,888
(1,152)
7,368
(3,594)
3,774
1,356
2,418
3,774
Consolidated
2022
$’000
571
571
2021
$’000
1,595
3,037
4,632
(3,149)
1,483
5,534
19
(921)
4,632
(3,149)
1,483
936
547
1,483
2021
$’000
419
419
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.
54 Fiducian Group Ltd
20. Contributed equity
A. Share Capital
Ordinary shares - fully paid
Total share capital
B. Movements in ordinary share capital
Date
Details
1 July 2020
Opening balance
Shares bought back on market and cancelled
Shares issued on exercise of options
30 June 2021
Balance
Shares bought back on market and cancelled
23 August 2021 Shares issued on exercise of options
30 June 2022
Balance
FINANCIAL STATEMENTS
Consolidated
2022
$’000
7,788
7,788
2021
$’000
7,636
7,636
Number of shares
31,442,623
$’000
7,636
-
-
31,442,623
-
35,000
31,477,623
-
-
7,636
-
152
7,788
C. Ordinary shares
F. Capital risk management
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 amount paid on the shares
held.
On a show of hands every holder of ordinary shares present
at a meeting in person or by proxy is entitled to one vote and,
upon a poll each share is entitled to one vote.
D. Share buy-back
Between 1 July 2021 and 30 June 2022, the Company did
not purchase and cancel any ordinary shares on-market.
At 30 June 2022, 478,255 shares remained available to be
repurchased under the most recently announced buy back
notice to the ASX.
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, Operator Licence
and their Australian Financial Services (AFS) Licence, and to
continue to provide returns to shareholders and benefits to
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.
E. Options
The externally imposed requirements are:
Information relating to Fiducian Group Employee & Director
options issued, exercised and lapsed during the year is set
out in Note 24.
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. The requirement under the AFS Licence and RE Licence
are maintained by placing cash on deposit with an
Authorised Deposit taking Institution. The requirement
under the AFS Licence is reported to the Board quarterly
at each meeting.
Annual Report 2022 55
FINANCIAL STATEMENTS
21. Reserves
Movements
Share-based payments reserve
Balance at 1 July
Option expense
Transfer to retained profits (on exercise of options)
Balance at 30 June
Consolidated
2022
$’000
2021
$’000
75
48
(25)
98
25
50
-
75
2021
$’000
30,462
12,179
(7,483)
-
35,158
The share-based payments reserve is used to recognise the fair value of options issued but not exercised.
22. Retained profits
Movements
Balance at 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
2022
$’000
35,158
13,317
(9,254)
25
39,246
56 Fiducian Group Ltd
23. Key management personnel disclosures
A. Key management personnel
Short-term employee benefits
Post-employment benefits
Share-based payment
Total payments to key management personnel
FINANCIAL STATEMENTS
Consolidated
2022
$
2021
$
892,016
873,680
56,549
47,828
42,895
48,986
996,393
965,561
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 number 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.
2022
Name
I Singh 1
Balance at
the start of
the year
Exercised
Granted during
the year as
remuneration
Lapsed during
the year
Balance at the
end of the year
Vested and
exercisable
35,000
35,000
90,000
-
90,000
-
1 Under the terms of his employment Mr I Singh is not entitled to any options relating to the year ended 20 June 2022. The options granted
relate to the year ended 30 June 2021 and approved at the annual general meeting on 21 October 2021 and hence included above.
2021
Name
I Singh 1
Balance at
the start of
the year
Exercised
Granted during
the year as
remuneration
Lapsed during
the year
Balance at the
end of the year
Vested and
exercisable
35,000
-
-
-
35,000
35,000
1 Under the terms of his employment Mr I Singh was entitled to 90,000 options relating to the year ended 20 June 2021. These were subject
to approval at the annual general meeting on 21 October 2021 and therefore these have not been included in this above table.
Annual Report 2022 57
FINANCIAL STATEMENTS
23. Key management personnel disclosures (continued)
(iii) Shareholdings
The number 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.
2022
Name
I Singh
R Bucknell
F Khouri
S Hallab
2021
Name
I Singh
R Bucknell
F Khouri
S Hallab
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
10,872,061
35,000
500,000
268,323
74,527
-
-
-
-
-
-
4,000
10,907,061
500,000
268,323
78,527
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
10,872,061
500,000
268,323
68,027
-
-
-
-
-
-
-
6,500
10,872,061
500,000
268,323
74,527
Shares provided on exercise of options
During the year 35,000 ordinary shares were issued as a result of the exercise of remuneration options to the Executive
Chairman of Fiducian Group Limited (2021: Nil). No amounts are unpaid on any shares issued on the exercise of options.
C. Loans to directors
No loans were made to directors during the financial year (2021: Nil).
58 Fiducian Group Ltd
FINANCIAL STATEMENTS
23. Key management personnel disclosures (continued)
D. Other transactions with key management personnel
A director, Mr. F Khouri, is an authorised representative under the Fiducian Financial Services Pty Ltd Australian Financial
Services License 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.
Mr. R Bucknell and Mr. S Hallab were both paid director’s fees for their contribution as directors serving on 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 **
Total payments relating to other transactions with key management personnel
Consolidated
2022
$
316,899
367,029
683,928
2021
$
302,275
267,783
570,058
* Details of these fees have been provided in the Remuneration report included in the Director’s report.
** Comparatives of the previous year have been changed to make them comparable to the current year.
Shares under option
Unissued ordinary shares of Fiducian Group Limited under option at the date of this report are disclosed in Note 24 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 2022 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.
Annual Report 2022 59
FINANCIAL STATEMENTS
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.
The parent entity has established the ESOP, which is
designed to provide incentives to employees and directors.
All grants of options under the ESOP are subject to
compliance with the Corporations Act 2001 and ASX Listing
Rules.
The directors may, from time to time, determine which
employees and directors may participate in the ESOP, and
the number of options that may be issued to them. The
directors have an absolute discretion to determine who will
participate and the number of options that may be issued.
The ESOP provides for an upper limit on the number of
options that may be outstanding, the exercise price, exercise
period and expiry, and adjustments in the event of capital
restructuring. The directors have resolved that the ESOP no
longer applies to non-executive directors.
Options are granted under the plan for no consideration.
Employee options are granted for a five-year period where
35% vest after one year, a further 45% vest after two years
and the 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.
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, no option was issued (2021: 90,000) to the Executive
Chairman in respect of his entitlement relating to financial
year ended 30 June 2022 and no employee options expired
during the same period (2021: Nil).
Subject to prior approval by shareholders, the Company
may issue each year a maximum of 100,000 options to
the executive chairman after each year of service, subject
to performance criteria being met in accordance with his
executive agreement. The Directors have resolved not to
issue any options (2021: 90,000) to the Executive Chairman
in respect of the year ended 30 June 2022 as criteria was not
met.
Set out below are summaries of options granted under last
year’s option plan:
Vested &
Expiry
Exercise
Start of the
During the
During the
During the
End of the
at the End of
Balance at
Granted
Exercised
Lapsed
Balance at
Exercisable
Grant Date
Date
Price
Consolidated 2022
ESOP-Executive Chairman
25 Oct 18
25 Oct 23
21 Oct 21
21 Oct 26
$4.35
$6.47
Weighted average exercise price
Year
Number
Year
Number
Year
Number
Year
Number
Year
Number
Year
Number
35,000
-
35,000
$4.35
-
35,000
90,000
90,000
$6.47
-
35,000
$4.35
-
-
-
-
-
90,000
90,000
$6.47
-
-
-
-
The volume of weighted average remaining contractual life of share options outstanding at the end of the period was 4.32
years (2021: 2.32 Years).
60 Fiducian Group Ltd
FINANCIAL STATEMENTS
24. Share based payments (Continued)
A. Employee and director share option plan (ESOP) (Continued)
Expiry
Exercise
Start of the
During the
During the
During the
End of the
at the End of
Balance at
Granted
Exercised
Lapsed
Balance at
Exercisable
Vested &
Grant Date
Date
Price
Consolidated 2021
ESOP-Executive Chairman
25 Oct 18
25 Oct 23
$4.35
Weighted average exercise price
Year
Number
Year
Number
Year
Number
Year
Number
Year
Number
35,000
35,000
$4.35
-
-
-
-
-
-
-
-
-
35,000
35,000
$4.35
Year
Number
35,000
35,000
$4.35
The volume of weighted average remaining contractual life of share options outstanding at the end of the period was 2.32
years (2020: 3.32 Years).
B. Expenses arising from share-based payment transactions
Expenses of $47,828 (2021: $48,986) arising from share-based payment transactions were recognised during the period as
part of employee benefit expense. This expense is in respect of option entitlements relating to the year ended 30 June 2022
expensed over the term in accordance with the accounting standards.
25. Remuneration of the auditors
KPMG remains the auditor of the parent entity and its related subsidiaries. The auditor remuneration in the table below was
paid or payable for services provided by KPMG:
Audit and review of financial reports
Group
Controlled entities and joint operations
Funds
Total audit and review of financial reports
Other statutory assurance services
Other assurance services
Other services
Internal audit fees paid to KPMG
Consulting fee
Total auditor remuneration
Consolidated
2022
$
80,000
120,500
227,500
428,000
2021
$
57,750
102,750
227,500
388,000
111,750
111,750
50,250
50,250
-
39,250
629,250
46,434
-
596,434
Annual Report 2022 61
FINANCIAL STATEMENTS
25. Remuneration of the auditors (Continued)
It is the Group’s policy to employ external auditor on assignments additional to its statutory audit duties where the external
auditor’s expertise and experience with the Group are important, on the proviso that the auditor’s independence is not
affected. Fees accrued and expensed in the financial statements of the Group relate solely to the services provided to the
Company and its controlled entities.
Prior to being appointed the external auditors of the Group, KPMG operated as the internal auditor of Fiducian
Superannuation Service up to its appointment as external auditors of the Group. KPMG did not provide any other services to
the Group.
26. Contingent liabilities
The parent entity and Group had contingent liabilities at 30 June 2022 in respect of bank guarantees for property leases of
parent and group entities amounting to $831,313 (2021: $818,753).
27. Commitments
Acquisition funding commitment payable within one year
Other commitments
Consolidated
2022
$’000
605
2021
$’000
1,141
The Group is in the process of finalising terms with a related entity to fund unindemnifiable liabilities of the Trustee of the
Fiducian Superannuation Service. Details of this agreement have been provided in Note 28-F Related-party transactions.
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 incorporates 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.
62 Fiducian Group Ltd
FINANCIAL STATEMENTS
28. Related-party transactions (Continued)
D. Transactions with related parties
(i) Transactions between the Group and other related entities include the following:
a. Operator fee income received from related trusts
b. Trustee fee income received from related trusts
c. Recovery of group costs 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 include the following:
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
The above transactions were on normal commercial terms and conditions and at market rates.
The following transactions occurred with related parties:
Related trusts
Fiducian Investment Service
Operator fees income
Expense recovery
Fiducian Superannuation Service
Operator fees income
Expense recovery
Fiducian Funds
Operator fees income
Expense recovery
Entities associated with directors or their relatives
Hawkesbury Financial Services Pty Ltd 2
Financial planning fees paid
Fiducian Financial Services Bondi Junction Pty Ltd 3
Financial planning fees paid
Ownership
Interest 1
Consolidated
2022
$
2021
$
Nil
Nil
Nil
8,257,148
7,239,387 4
35,097
35,936
22,098,784
19,346,854
3,275,916
3,252,495
26,020,986
21,328,969
356,366
393,451
367,029
267,783 4
130,065
138,167 4
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.
4 Comparatives of the previous year have been restated to make them comparable with the current year.
Annual Report 2022 63
FINANCIAL STATEMENTS
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)
Total current receivables
Consolidated
2022
$
2021
$
4,495,214
4,454,089 *
4,495,214
4,454,089 *
* Comparatives figures for the previous year have been restated to make them comparable with the current year.
No ECL provisions for doubtful receivables have been raised in relation to any outstanding balances, and no expense is
required to be recognised in respect of impaired receivables due from related parties.
F. Commitment to fund unindemnifiable liabilities
Fiducian Services Pty Ltd, a member of the Group and the administrator of the superannuation service, is in the process
of finalising terms to be effective from 30 June 2022 to fund Fiducian Portfolio Services Ltd, the Trustee of the Fiducian
Superannuation Service, for unindemnifiable liabilities of up to an aggregate amount of $1,500,000. As at 30 June 2022,
no events have arisen to create an unindemnifiable liability.
29. Reconciliation of profit or loss after income tax to net cash inflow from
operating activities
Consolidated
2022
$’000
13,317
1,231
4,092
387
(52)
264
412
(972)
2021
$’000
12,179
221
3,627
(403)
(216)
737
408
(514)
18,679
16,039
Profit for the year
Non-cash employee benefit
Amortisation and depreciation
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
64 Fiducian Group Ltd
30. Earnings per share
FINANCIAL STATEMENTS
Consolidated
2022
2021
Earnings per share using weighted average number of ordinary shares outstanding during the period:
A. Basic earnings per share (in cents)
Profit from continuing operations attributable to the ordinary equity of the company
42.31
38.74
B. Diluted earnings per share (in cents)
Profit from continuing operations attributable to the ordinary equity and potential ordinary equity of
the company
42.23
38.70
Consolidated
2022
Number
2021
Number
C. Weighted average number of shares used as denominator
Weighted average number of ordinary shares used as denominator in calculating basic earnings per
share
Adjustments for calculation of diluted earnings per share options
31,477,623
31,442,623
65,269
30,450
Weighted average number of ordinary shares and potential ordinary shares used as denominator in
calculating diluted earnings per share
31,542,892
31,473,073
Consolidated
2022
$’000
2021
$’000
D. Reconciliation of earnings used in calculating basic and
diluted earnings per share
Net profit and earnings used to calculate basic and diluted earnings per share
13,317
12,179
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.
Annual Report 2022 65
FINANCIAL STATEMENTS
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 Company, the results of those operations or the state of affairs of the Group in subsequent years.
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
Business development loans
Total financial assets
Financial liabilities
Trade and other payables
A. Market risk
(i) Foreign exchange risk
Consolidated
2022
$’000
17,484
5,951
8,998
32,433
2021
$’000
19,316
6,178
7,793
33,287
13,552
7,893
The Group has no 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 loans to planners. The Group has no
borrowings.
Cash at bank and on deposit
Business development loans
30 June 2022
30 June 2021
Weighted Average
Interest Rate
%
0.62%
3.85%
Weighted Average
Interest Rate
%
0.15%
2.23%
Balance
$’000
17,484
8,998
26,482
Balance
$’000
19,316
7,793
27,109
Bank deposits are at call and staff and planner loans have terms extending between 1 and 10 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 2022 if interest rates change by +/- 100 basis points (2021: +/- 100 basis points) from the year end rates with all other
variables held constant, post-tax profit would have been $185,370 higher or lower (2021: $192,020).
66 Fiducian Group Ltd
FINANCIAL STATEMENTS
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. Financial planning fees to the franchisees are only paid following the receipt of the related 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 borrower based on 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 loans
Unrated
Consolidated
2022
$’000
2021
$’000
17,484
19,316
8,998
7,793
Business development loans have been categorised in line with the Group’s internal credit classification as follows:
Performing
Under performing
Non performing
Loans written off
Total gross loan receivables
Less: Loan loss allowance
Less: Write off
Loan receivables net of expected credit losses
Consolidated
2022
$’000
6,451
2,868
-
-
9,319
(321)
-
8,998
2021
$’000
5,287
2,827
-
-
8,114
(321)
-
7,793
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 the Personal Property Security Register. This security may be called upon if the franchisee
defaults under the terms of the agreement.
The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets as summarised
above.
Annual Report 2022 67
FINANCIAL STATEMENTS
32. Financial risk management (Continued)
C. Liquidity risk
The Group maintains sufficient liquid reserves to meet all foreseeable working capital, investment and regulatory licensing
requirements. The Group has no undrawn facility (2021: $4 million undrawn overdraft facility) with their bank.
D. Maturity of financial liabilities
The table below analyses the group’s financial liabilities into relevant maturity groupings based on their contractual maturities.
Contractual Cash Flows
Carrying Amount
Trade and other payables and provisions
Due in less than 1 year
Due in more than 1 year
Lease Liabilities
Due in less than 1 year
Due in more than 1 year
Total financial liabilities
E. Fair value estimation
2022
$’000
12,982
570
1,896
4,517
19,966
2021
$’000
7,474
419
1,407
4,765
14,065
2022
$’000
12,982
570
1,596
4,229
19,377
2021
$’000
7,474
419
1,253
4,640
13,786
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 2022.
F. Assets and liabilities not carried at fair value but for which fair value is disclosed
Cash and cash equivalents include 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.
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.
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.
68 Fiducian Group Ltd
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
Dividends from subsidiaries and other income
FINANCIAL STATEMENTS
Parent Entity
2022
$’000
37,538
11,849
49,387
-
31
31
2021
$’000
32,490
11,849
44,339
85
46
131
49,356
44,208
7,788
98
41,470
49,356
7,636
75
36,497
44,208
14,200
13,100
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 deed of cross-guarantee 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 do not consider it necessary to disclose additional
consolidation information related to the closed group excluding this entity.
The effect of the deed of cross-guarantee is that each participating member 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.
Annual Report 2022 69
FINANCIAL STATEMENTS
35. Lease assets and liabilities
(i) Amount recognised in the Statement of Financial Position
Right-of-use asset
Property
Equipment
Lease Liabilities
Current
Non-Current
Deferred tax assets
Deferred tax liabilities
(ii) Amount recognised in the Statement of Comprehensive Income
Depreciation relating to the Right-of-use assets
Interest Expense (Finance Cost)
Expense relating to short term leases
(iii) Total Cash outflows relating to operating leases
Principal payments included under Financing activities
Interest payments included under operating activities
Consolidated
30 Jun 2022
30 Jun 2021
$’000
$’000
4,910
192
5,102
1,596
4,229
5,825
1,741
1,531
1,520
337
154
1,703
337
2,040
5,005
319
5,324
1,315
4,578
5,893
1,761
1,595
1,584
389
36
1,731
389
2,120
70 Fiducian Group Ltd
Financial Statements
FINANCIAL STATEMENTS
THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY
Annual Report 2022 71
DIRECTORS’ DECLARATION
Directors’ Declaration
In the directors’ opinion:
(a) the financial statements and notes set out on pages 26 to 70 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 2022 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 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.
Inderjit (Indy) Singh OAM
Executive Chairman
Sydney,
15 August 2022
72 Fiducian Group Ltd
INDEPENDENT AUDITOR’S REPORT
Independent Auditor’s Report
To the shareholders of Fiducian Group Ltd
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of Fiducian
Group Ltd (the Company).
The Financial Report comprises:
• Consolidated Statement of financial position as
In our opinion, the accompanying Financial Report
of the Company is in accordance with the
Corporations Act 2001, including:
• giving a true and fair view of the Group’s
financial position as at 30 June 2022 and of its
financial performance for the year ended on
that date; and
•
complying with Australian Accounting
Standards and the Corporations Regulations
2001.
at 30 June 2022;
• Consolidated Statement of comprehensive
income, Consolidated Statement of changes in
equity, and Consolidated Statement of cash
flows for the year then ended;
• Notes including a summary of significant
accounting policies; and
• Directors Declaration.
The Group consists of the Company and the
entities it controlled at the year-end or from time to
time during the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of
the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with
the Code.
©2022 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are
trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved
under Professional Standards Legislation.
73
©2022 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms
affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name
and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited
by a scheme approved under Professional Standards Legislation.
Annual Report 2022 73
Independent Auditor’s Report to the Members
INDEPENDENT AUDITOR’S REPORT
Key Audit Matters
The Key Audit Matters we identified are:
• Valuation of Goodwill; and
• Revenue recognition.
Key Audit Matters are those matters that, in our
professional judgement, were of most significance
in our audit of the Financial Report of the current
period.
These 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.
Valuation of Goodwill - $12.7m
Refer to Note 1N. Intangible Assets and Note 15 Goodwill to the Financial Report
The key audit matter
How the matter was addressed in our audit
A key audit matter for us was the Group’s testing
of goodwill for impairment, given the size of the
balance (being 18% of total assets) and the
acquisition of People’s Choice Credit Union
financial planning business.
At each year end, the Group performs an annual
impairment test for goodwill. Due to recent
volatility observed in the local economy, the Group
assessed the valuation of goodwill using two
methods being the value-in-use discounted cash
flow model and the market multiple model.
The key assumptions the Group applied in their
annual impairment test for goodwill includes the
following:
• Market multiples used by the Group in
determining the estimated fair value of the
acquired financial planning businesses. The
Financial Planning Industry Group’s market
multiple model is sensitive to changes in the
market multiple.
•
Forecast cash flows, growth rates and
terminal growth rates. The Group has
experienced changes resulting from the
recommendations of the Royal Commission.
This increases the risk of inaccurate forecasts
or a wider range of possible outcomes for us
to consider.
• A cash generating unit (“CGU”) specific
discount rate incorporating the appropriate
risks. These are complicated in nature and vary
according to the conditions and environment
the specific CGU is subject to from time to
time.
Working with our valuation specialists, our
procedures included:
• We considered the appropriateness of the
methods applied by the Group to perform the
annual test of goodwill impairment against the
requirements of the accounting standards.
• We assessed the additions to goodwill as a
result of the acquisition of People’s Choice
Credit Union financial planning business and
the allocation of goodwill against the
requirements of the accounting standards.
• We assessed the integrity of the value in use
model and the market multiple model used,
including the accuracy of the underlying
calculation formulas.
• We compared the implied multiples from
comparable market transactions to the implied
multiple from the Group’s market multiple
model.
• We independently developed a discount rate
range using publicly available data for
comparable entities, adjusted by risk factors
specific to the Group’s CGUs and the industry
they operate in.
• We challenged the forecast cash flows,
growth rates and terminal value contained in
the value in use models against our
understanding of the relevant CGU and
externally sourced industry-based growth
rates. We assessed the application of key
forecast cash flow assumptions for
consistency across the Group’s CGUs.
74 Fiducian Group Ltd
74
We focused on the key assumptions applied and
involved our valuation specialists to supplement
our senior audit team members in assessing this
key audit matter
INDEPENDENT AUDITOR’S REPORT
• We assessed the accuracy of previous Group
forecasts to inform our evaluation of forecasts
incorporated in the value in use model.
• We considered the sensitivity of the value in
use model by varying key assumptions, such
as forecast growth rates and discount rates,
within a reasonably possible range. We
considered key assumptions when performing
the sensitivity analysis and what the Group
consider to be reasonably possible.
• We assessed the disclosures in the financial
report using our understanding obtained from
our testing and against the requirements of
the accounting standards.
Revenue recognition - $69.304m
Refer to Note 1C. Revenue Recognition and Note 4 Revenue to the Financial Report
The key audit matter
How the matter was addressed in our audit
The Group generates revenue from multiple
products and services, including fees earned from
the funds management services, platform
administrations services and fees earned from
offering advice to customers.
Revenue recognition is a key audit matter given
the audit complexity associated with the number
of different revenue streams, and the significance
of revenue to the Group’s results.
We focussed on the:
• Key revenue streams, each with varying fee
rates and Product Disclosure Statements,
which required significant audit effort to test
the fees recognised.
• Drivers of fee calculations, which include
funds under management (FUM), funds under
administration (FUAdm) and funds under
advice (FUA).
Information is sourced from the Group’s third-party
service organisations which provide investment
administration, custody and unit registry services.
This required us to understand the key processes
and assess the key controls of these service
organisations relevant to the Group’s revenue
recognition.
Our procedures included:
• We assessed the Group’s revenue recognition
policy against the requirements of AASB 15
Revenue from Contracts with Customers.
• We obtained an understanding of the key
processes, evaluated the design and tested
the operational effectiveness of key controls
related to the Group’s recognition of revenue.
• We obtained and read the GS007 (Guidance
Statement 007 Audit Implications of the Use
of Service Organisations for Investment
Management Services) assurance reports and
management’s assessment thereof to
understand the processes and assess the
controls relevant to the third-party service
organisations.
• We recalculated the fee calculation of the
platform administration services and funds
management services revenue streams. We
used the fee rates stipulated in the Group’s
publicly available Product Disclosure
Statements, Investor Guide and Additional
Information Booklet multiplied by FUM and
FUAdm based on custodial records.
• We checked a sample of revenue transactions
from fees earned from offering advice to
customers to the relevant statement of advice,
75
Annual Report 2022 75
INDEPENDENT AUDITOR’S REPORT
record of advice, and client application forms
agreed and signed by the customer.
• We checked a sample of fees earned from
financial planning advice to external financial
supplier statements and independent
confirmations from external advisors.
• We assessed the disclosures in the financial
report using our understanding obtained from
our testing, and against the requirements of
the accounting standards.
Other Information
Other Information is financial and non-financial information in Fiducian Group Ltd.’s annual reporting
which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are
responsible for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we 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.
We are required to report if we conclude that there is a material misstatement of this Other Information,
and based on the work we have performed on the Other Information that we obtained prior to the date
of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• Preparing the Financial Report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001;
•
Implementing necessary internal control to enable the preparation of a Financial Report that gives
a true and fair view and is free from material misstatement, whether due to fraud or error; and
• Assessing the Group and Company’s ability to continue as a going concern and whether the use
of the going concern basis of accounting is appropriate. This includes disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless they
either intend to liquidate the Group and Company or to cease operations or have no realistic
alternative but to do so.
76 Fiducian Group Ltd
76
INDEPENDENT AUDITOR’S REPORT
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
•
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 Australian Auditing Standards will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They 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:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf description forms part of our Auditor’s
Report.
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report of
Fiducian Group Ltd for the year ended 30 June
2022, complies with Section 300A of the
Corporations Act 2001.
The Directors of the Company are responsible for
the preparation and presentation of the
Remuneration Report in accordance with Section
300A of the Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report
included in pages 16 to 22 of the Directors’ report
for the year 30 June 2022.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit
conducted in accordance with Australian Auditing
Standards.
KPMG
Andrew Reeves
Partner
Sydney
15 August 2022
77
Annual Report 2022 77
SHAREHOLDER INFORMATION
Shareholder Information
A. Distribution of equity security holders by size of holding
Analysis of number of equity security holders by size of holding as at 1 August 2022:
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
451
590
186
213
24
1,464
There were 72 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 1 August 2022 are listed below:
Name
INDYSHRI SINGH PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
SHRIND INVESTMENTS PTY LTD
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