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2023 ReportAnnual Report 2021 Annual Report for the year ended 30 June 2021 InvestSMART Group Limited ABN 62 111 772 359 www.investsmart.com.au 1300 880 160 SECTION HEADING?? OUR VISION To help all Australians grow and protect their wealth. WHY? Because we believe people should be able to take control of their financial future. And it shouldn’t be hard or expensive to do so. HOW? By providing innovative tools, research and advice that people can trust, empowering them to make better investing decisions. Research & Advice Investment Advice Investment Portfolios Investment Tools SECTION HEADING?? COMPANY ADVANTAGE UNIQUE PRODUCTS & ECOSYSTEM Our proprietary wealth platform operates within a content and tools ecosystem Platform One Digital Platform • Self-select, transact and manage multiple products and services • Product & service delivery • Administration and tax reporting InvestSMART Professionally Managed Account capped fees Intelligent Investor Active ETFs – ASX-listed variable fees Investment products Diversified ETF portfolios Australian Equity Income Fund (INIF) Conservative, Balanced, Growth, High Growth Australian Equity Growth Fund (IIGF) Single Asset Class ETF portfolios Interest Income, Hybrid Income, International Equities, Property and Infrastructure Ethical Share Fund (INES) Intelligent Investor Eureka Report Bootcamp Content and tools Ambassadors Paul Clitheroe, AM Chairman Effie Zahos Non-Executive Director Alan Kohler, AM Editor-in-Chief ANNUAL REPORT 2021 • • • • • 350 300 250 200 150 100 50 0 5 1 n u J 5 1 p e S 5 1 c e D 6 1 r a M 6 1 n u J 6 1 p e S 6 1 c e D 7 1 r a M 7 1 n u J 7 1 p e S 7 1 c e D 8 1 r a M 8 1 n u J 8 1 p e S 8 1 c e D 9 1 r a M 9 1 n u J 9 1 p e S 9 1 c e D 0 2 r a M 0 2 n u J 0 2 p e S 0 2 c e D 1 2 r a M 1 2 n u J Active Growth Active Income Active Ethical Capped Fee/Passive Free Active DatabaseTotal Member PortfoliosValue of assets held on Portfolio Manager ($bn)Jun-16 546,980 63,014 $12.61Jun-17 586,309 88,892 $20.09Jun-18 637,024 109,472 $26.46Jun-19 692,812 118,506 $28.56Jun-20 677,514 123,930 $30.56Jun-21 704,030 130,471 $31.65 (a) (b) (c) Tel: +61 2 9251 4100 Fax: +61 2 9240 9821 www.bdo.com.au Level 11, 1 Margaret St Sydney NSW 2000 Australia DECLARATATION OF INDEPENDENCE BY TIM AMAN TO THE DIRECTORS OF INVESTSMART GROUP LIMITED As lead auditor of InvestSMART Group Limited for the year ended 30 June 2021, I declare that, to the best of my knowledge and belief, there have been: 1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and 2. No contraventions of any applicable code of professional conduct in relation to the audit. This declaration is in respect of InvestSMART Group Limited and the entities it controlled during the period. Tim Aman Director BDO Audit Pty Ltd Sydney 25 August 2021 BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. 20 - - - - - - - - Tel: +61 2 9251 4100 Fax: +61 2 9240 9821 www.bdo.com.au Level 11, 1 Margaret St Sydney NSW 2000 Australia INDEPENDENT AUDITOR'S REPORT To the members of InvestSMART Group Limited Report on the Audit of the Financial Report Opinion We have audited the financial report of InvestSMART Group Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial report, including a summary of significant accounting policies and the directors’ declaration. In our opinion the accompanying financial report of the Group, is in accordance with the Corporations Act 2001, including: (i) Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial performance for the year ended on that date; and (ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. 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 also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. 49 Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report 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 Financial Assets Held at Fair Value Key audit matter How the matter was addressed in our audit Note 5 to the financial report discloses the Group's investment in unlisted securities and call option totalling to $3,185,701 (2020: $2,179,293). These comprise three holdings in companies in the financial technology sector and a call option to purchase shares of an unlisted company. The investments and call option are measured within level 3 of the fair value hierarchy as defined in AASB 13 Fair Value Measurement. The valuation of these investments is a key audit matter due to the value of the assets as well as the presence of significant unobservable inputs into their valuation. Our audit procedures included, amongst others: Through independent valuation specialist, assessed the appropriateness of the valuation model, discount rates and reasonableness of the fair values; Agreed inputs such as purchase price and last traded price, stock and exercise prices to observable external sources and internal documents; Assessed the volatility and discount rates used by reviewing the relevance of comparative entities; Performed sensitivity analysis to assess the potential impact of change in assumptions and found that assumptions used by management where at a reasonable range; Compared consistency in the valuation techniques applied in previous reporting periods; and Ensured the adequacy of the disclosures relating to the investments within the financial report and within Australian Accounting Standards. 50 Valuation of Share-based Payments Key audit matter How the matter was addressed in our audit Note 14 to the financial report discloses modification of the share-based payment plan of the Group during the period. The Group recognised during the year employee benefits expense in relation to the share-based payments of $215,165 (2020: $55,865). The valuation of the share-based payments as a result of the modification is a key audit matter due to the complexity in the accounting treatment and the degree of judgement and estimation in the inputs for the fair value of the new plan. Our audit procedures included, amongst others: Engaged the BDO valuation specialist to assess the appropriateness of the valuation technique, the calculation and the assumptions and inputs used; Reviewed the appropriateness of the accounting treatment in accordance with AASB 2 Share-based Payments; Reviewed minutes of meetings and Group announcements to ensure completeness of information considered in the calculations; Verified instruments to supporting agreements and contracts, where available; and Ensured the adequacy of the disclosures relating to the share-based payments within the financial report and within Australian Accounting Standards. Other information The directors are responsible for the other information. The other information comprises the information in the Group’s annual report for the year ended 30 June 2021, but does not include the financial report and the auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. 51 In preparing the financial report, the directors are responsible for assessing the ability of the group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor’s responsibilities for the audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this 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 (http://www.auasb.gov.au/Home.aspx) at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf This description forms part of our auditor’s report. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 5 to 10 of the directors’ report for the year ended 30 June 2021. In our opinion, the Remuneration Report of InvestSMART Group Limited, for the year ended 30 June 2021, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. BDO Audit Pty Ltd Tim Aman Director Sydney, 25 August 2021 52 This page is intentionally left blank. 6 6 ANNUAL REPORT 2020SECTION HEADING?? This page is intentionally left blank. 6 7 SECTION HEADING??ANNUAL REPORT 2020 This page is intentionally left blank. 6 6 ANNUAL REPORT 2020SECTION HEADING?? www.investsmart.com.au 1300 880 160 SECTION HEADING??
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