Sequoia Financial Group Ltd
ACN 091 744 84
Sequoia Financial Group Ltd
ACN:091 744 884
ASX: SEQ
ASX: SEQ
Registered Office:
Level 36, 50 Bridge St
Sydney NSW 2000 Australia
Registered Office:
Level 36, 50 Bridge St
Sydney NSW 2000 Australia
Phone:
+61 2 8114 2222
Phone:
+61 2 8114 2222
Fax:
+61 2 8114 2200
Email:
admin@sequoia.com.au
Email:
admin@sequoia.com.au
Website:
www.sequoia.com.au
Website:
www.sequoia.com.au
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
Sydney, 31th August 2016: Sequoia Financial Group Limited (the “Company”) is pleased to submit
its full year audited results for the financial year ended 30 June 2016.
A copy of the full report is attached and can be downloaded from the Company’s website at
www.sequoia.com.au
– ENDS –
For further information please contact:
Scott Beeton, Managing Director & CEO +61 2 8114 2222
Released through: Ben Jarvis, Six Degrees Investor Relations +61 413 150 448
ABOUT SEQUOIA FINANCIAL GROUP
ASX-listed Sequoia Financial Group Limited (ASX: SEQ) is an integrated financial services company providing
products and services to self-directed retail and wholesale clients and those of third party professional service
firms. It provides:
• Investment and superannuation products
• Wealth management and advisory services
• Corporate advisory and capital markets expertise
• Retail, wholesale and institutional trading platforms
• Market data and financial news services
Sequoia operates various AFS Licenses and its subsidiary D2MX is an ASX Market Participant
\
For personal use only
Results for Announcement to the Market
Summary of Financial Information
The Board of Sequoia Financial Group Limited (“the Group”) is pleased to report that Sequoia Financial Group
(SEQ) has made a profit after tax for the 2016 financial year.
Review of Results
The consolidated group has reported revenue for the year ended 30 June 2016 of $22,980,597, an increase on
prior year revenue by 7.4% and a statutory profit after tax of $285,733.
Further to this, the Group is pleased to report total profit attributable to members of $320,397. The comprehensive
income reported relates to the revaluation of a strategic shareholding held and subsequent deferred income tax to
the Group in relation to the revaluation.
The consolidated entity incurred an operating cash outflow of $248,798 for the year ended 30 June 2016 (2015:
$1,761,525).
Full Year Comparison
Revenue from ordinary activities
Profit / (loss) from ordinary activities
Profit / (loss) for period attributable to
members
Net Tangible Assets per Security
12 months ended
30 June 2016
$
22,980,597
285,733
320,397
12 months ended
30 June 2015
$
21,406,293
(17,974,192)
(17,974,192)
Change
%
7.4
101.6
101.8
Current Period
Net tangible assets per security
0.20 cents
Dividend Details
There was no dividend paid or proposed during the year.
Previous
Corresponding
Period
0.17 cents
Control Gained or Lost over Entities in the Year
On 1 October 2015, the Group acquired 100% interest of Sequoia Wealth Group Pty Ltd (SWG). SWG contributed
$830,473 profit to the Group’s consolidated profit from ordinary activities during the year ended 30 June 2016.
On 12 February 2016, the Group acquired a further 38.53% interest of Finance TV Pty Ltd (FNN). FNN contributed
$69,454 loss to the Group’s consolidated profit from ordinary activities during the year ended 30 June 2016.
Statement of Profit or Loss and Other Comprehensive Income
Refer to page 25 of the 30 June 2016 financial report and accompanying notes.
Statement of Financial Position
Refer to page 26 of the 30 June 2016 financial report and accompanying notes.
Statement of Accumulated Losses Movements
Refer to page 27 of the 30 June 2016 financial report and accompanying notes.
Statement of Cash Flows
Refer to page 28 of the 30 June 2016 financial report and accompanying notes.
For personal use only
Sequoia Financial Group Limited
ABN 90 091 744 884
Annual Report 2016
For personal use only
Sequoia Financial Group Limited
ABN 90 091 744 884
Contents
Sequoia Financial Group Limited
Portfolio of Companies
Chairman’s Report
Corporate Governance Statement
Directors’ Report
Summary of Results
Business Review
Remuneration Report (audited)
Consolidated Statement of Profit and Loss and Other
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
Auditor’s Independence Declaration
Auditor’s Report
Additional ASX Information
Corporate Information
1
2
3
4
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19
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25
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Sequoia Financial Group Limited - Annual Report 2016
For personal use only
Sequoia Financial Group Limited
ABN 90 091 744 884
Sequoia Financial Group Ltd (SEQ) is an integrated financial services
Company that provides products and services to self-directed retail and
wholesale clients and those of third party professional service firms.
SEQ now offers a comprehensive range of products and services including:
Investment and superannuation products;
Wealth management and advisory services;
Corporate advisory and capital markets expertise;
Retail, wholesale and institutional trading platforms; and
Market data and financial news services.
SEQ operates various Australian Financial Services (AFS) Licenses and its
subsidiary D2MX Pty Ltd is an Australian Securities Exchange (ASX) market
participant.
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Portfolio of Companies
D2MX Pty Ltd is an ASX market participant
providing advisory and trade execution services
to retail investors, institutional and wholesale
dealer groups. Services include:
general and personal advice;
corporate advisory;
institutional equity sales; and
wholesale broking.
Sequoia Direct Pty Ltd (formerly known as Trader
Dealer Online Pty Ltd) is an online trading Company
providing general advice, execution-only trading and
software solutions for clients investing in ASX
equities, options and warrants.
Bourse Data Pty Ltd is a software technology
Company that develops, sells and supports The
Bourse market data platform.
Proprietary
d2mxIRESS and Market Analyser.
software
platforms
include
Sequoia Specialist Investments Pty Ltd (“SSI”) is a
leading issuer of bespoke investment products to
retail, sophisticated and other wholesale investors.
SSI has established a suite of products providing
investors with exposure
investment
themes.
to unique
Sequoia Asset Management Pty Ltd is an
investment services firm and holder of an
Australian Financial Services License. Our
team of experts provide general advice on
portfolio management, SMSFs, direct shares,
superannuation, structured products, option
trading, personal insurance, margin lending and
cash solutions.
Sequoia Superannuation Pty Ltd provides a
complete portfolio administration solution to the
SMSF market, designed specifically for anyone that
has or wants a SMSF. Sequoia Superannuation also
provides SMSF portfolio administration solutions to
financial planners, stock brokers, mortgage brokers
and accountants Australia wide.
Sequoia Corporate Finance Pty Ltd provides
specialised corporate advisory services
to
clients. Clients include successful domestic and
multi-national corporations, emerging growth
companies, private equity sponsors and family-
owned and entrepreneur-led businesses. We
are rigorous in our working practices, ensuring
compliance, confidentiality and protection of our
client’s business.
Sequoia Wealth Management Pty Ltd offers general
and personal advice on financial services products.
These products
include Australian equities,
International Shares, options, corporate finance,
managed portfolios, margin lending, fixed income,
structured products and contracts for difference
(CFD’s).
Finance TV Pty Ltd (“FNN”) is a partly owned
(50.09%) subsidiary of Sequoia Financial
Group Ltd. FNN is an independent news
the
that specialises
organisation
production and distribution of financial news
content,
and
productions services to ASX-Listed companies
and managed funds. Annually FNN produces
more than 3000 video news items.
communications
in both
digital
Sequoia Funds Management Pty Ltd manages
various activities in bringing unit trust and managed
schemes to retail investors.
Sequoia Financial Group Limited - Annual Report 2016
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Chairman’s Report
Dear Shareholders,
On behalf of the Board of Directors, I am pleased to present to our shareholders the Annual Report of Sequoia
Financial Group Limited (the Company) for the year ended 30 June 2016.
Over the past 12 months the Company has experienced a strong rise in operating revenue, an improved balance
sheet position and a pleasing return to profit. Each of our main business divisions continue to perform well and
deliver further scale to our integrated business model.
The Company completed two important transactions during the year with the acquisition of a 100% interest in
Sequoia Wealth Group Pty Ltd in October 2015 and a majority interest in Finance TV Pty Ltd trading as Finance News
Network in February 2016. These transactions remain consistent with the Boards’ ongoing long-term strategic focus
toward selectively assessing both organic and acquisition growth opportunities to improve earnings and further
build shareholder value.
The overall result for the period was strong year on year growth in operating revenue of 7.4% and net profit after
tax totalling $285,733, a particularly pleasing result. In the period the Company also made a number of significant
investments including upgrading technology and transitioning to larger premises in Sydney and Melbourne.
Management have also strengthened the balance sheet through the reduction of in approximately $1.9m in trade
and other payables over the course of the year. Importantly, our improved balance sheet position is also reflective
of an increase in the recognised valuations of our strategic investment holdings in both NobleOak Life Ltd and
Finance News Network.
While the Company continues to identify that there is still much work to do, the outlook for the year ahead is very
encouraging with revenue from several projects having being recognised post 30 June 2016. I am also delighted to
acknowledge the positive feedback resulting from the Sequoia rebranding and website rollout together with the
response to date to our new strategic relationship with Aitken Investment Management Pty Ltd, interest in several
new innovative investment thematics available for investors and the quality mandates being secured through our
corporate advisory activities.
I would like to acknowledge the valuable contribution, hard work and extra commitment made by my fellow
Directors over the course of the year as the business has expanded and changes have occurred with the composition
and makeup of the Board.
I would especially like to thank the executive team and our staff for their diligence and effort that has underscored
this year’s result.
Finally, thank you once again to our shareholders for your past and ongoing support. Your patience whilst the
business continues to transform and fully realise new business opportunities and its cross divisional synergies is
appreciated. We remain committed to initiating a share consolidation to broaden investor support.
Michael Carter
Chairman
Sequoia Financial Group Ltd
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Corporate Governance Statement
The Board of Directors (“the Board”) of Sequoia Financial Group Limited (“the Company”) is responsible for the corporate
governance of the consolidated entity. The Board guides and monitors the business and affairs of the Company on behalf
of the shareholders by whom they are elected and to whom they are accountable.
The table below summarises the Company’s compliance with the ASX Corporate Governance Council’s Revised
Principles and Recommendations.
Principles and Recommendations
Compliance
Comply
Principle 1 – Lay solid foundations for management and oversight
The Board is responsible for the overall
corporate governance of the Company.
Complies.
1.1 Establish the functions
reserved to the Board and
those delegated to manage
and disclose those functions.
1.2 Disclose the process for
evaluating the performance of
senior executives.
The Board has adopted a Board charter that
formalises its roles and responsibilities and
defines the matters that are reserved for the
Board and specific matters that are delegated
to management.
The Board has adopted a Delegations of
Authority that sets limits of authority for
senior executives.
On appointment of a director, the Company
issues a letter of appointment setting out the
terms and conditions of appointment to the
Board.
Senior executives prepare strategic
objectives that are reviewed and signed off
by the Board. These objectives must then be
met by senior executives as part of their key
performance targets. The chief executive
officer (CEO) then reviews the performance
of the senior executives against those
objectives. The Board reviews the CEO’s
compliance against his and the Company’s
objectives. These reviews occur annually or
more frequently as required.
1.3 Provide the information
indicated in Guide to reporting
on Principle 1.
A Board charter has been disclosed on the
Company’s website and is summarised in
this Corporate Governance Statement.
A performance evaluation process is included
in the Board Charter, which has been
disclosed on the Company’s website and is
summarised in this Corporate Governance
Statement.
The Board conducted a performance
evaluation for senior executives in the
financial year in accordance with the process
above.
Complies.
Complies.
Complies.
Complies.
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Corporate Governance Statement
Principles and Recommendations
Compliance
Comply
Principle 2 – Structure the Board to add value
2.1 A majority of the Board should
be independent directors
The majority of the Board’s directors are not
independent as a majority of the Board are
either a substantial shareholder or are
executive directors of the Company.
Mr Michael Carter is engaged in the capacity
of Non–Executive Director and Chairman.
Mr Scott Beeton is the Managing Director,
Chief Executive Officer and a substantial
shareholder.
Mr Marcel Collignon is an Executive Director
and a substantial shareholder.
Mr Delan Pagliaccio was an Executive
Director (resigned 2 May 2016).
Mr Richard Symon was Chairman and a
substantial shareholder (resigned 10 August
2015).
2.2 The chair should be an
independent director.
Mr Michael Carter is the Chairman and Non-
Executive Director.
Does not comply however
the skills and experience of
the Board composition
allows the Board to act in
the best interests of
shareholders.
As the Company develops
the Board intends to
appoint further suitably
skilled Independent
Directors.
Does not comply as the
Chairman whilst a Non-
Executive Director is a
shareholder of the
Company. The skills and
experience of the Board
composition allows the
Board to act in the best
interests of shareholders.
2.3 The roles of the chair and chief
executive officer should not be
exercised by the same
individual.
2.4
The Board should establish a
Nomination and Remuneration
Committee.
2.5
Disclose the process for
evaluating the performance of
the Board, its committees and
individual directors.
Michael Carter is the Chairman and Mr Scott
Lionel Beeton is an Executive Director and
Chief Executive Officer.
Complies.
The Company has established a separate
Nomination and Remuneration Committee.
Complies.
The Board has undertaken a review of the
mix of skills and experience on the Board in
light of the Company’s principal activities and
direction, and has considered diversity in
succession planning. The Board considers
the current mix of skills and experience of the
members of the Board and its senior
management is sufficient to meet the
requirements of the Company.
The Board supports the nomination and re-
election of the directors at the Company’s
forthcoming Annual General Meeting, should
these directors wish to continue on the
Board.
The Company conducts the process for
evaluating the performance of the Board, its
committees and individual directors as
outlined in the Board Charter which is
available on the Company’s website.
The Board’s induction program provides
incoming directors with information that will
enable them to carry out their duties in the
best interests of the Company. This includes
supporting ongoing education of directors for
the benefit of the Company.
Complies.
Sequoia Financial Group Limited - Annual Report 2016
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Comply
Complies.
The Nomination and
Remuneration Committees
operate under respective
separate charters.
The Board does not
consist of a majority of
independent directors
however the skills and
experience of executive
directors allows the Board
to act in the best interests
of shareholders.
Corporate Governance Statement
Principles and Recommendations
Compliance
2.6 Provide the information
indicated in the Guide to
reporting on Principle 2.
This information has been disclosed (where
applicable) in the directors’ report attached to
this Corporate Governance Statement.
Michael Carter, Non-Executive Director and
Chairman was appointed in this capacity on
the 10 August 2015, he previously held the
position of Executive Director. The initial
Board appointment was made on the 9 March
2015.
Scott Beeton, Managing Director and Chief
Executive Officer was appointed to the Board
on the 24 December 2014 following the
successful transaction with Sequoia Financial
Group Ltd.
Marcel Collignon, Executive Director was
appointed to the Board on the 24 December
2014 following the successful Sequoia
Financial Group Ltd transaction.
Delan Pagliaccio was appointed to the Board
in the capacity of Executive Director on the 7
August 2015, he resigned 2 May 2016.
Richard Symon was appointed to the Board
in the capacity of Executive Director on the
27 November 2008, he resigned 10 August
2015.
The Company has established a separate
Nominations and Remuneration Committee.
The Board has undertaken a review of the
mix of skills and experience on the Board in
light of the Company’s principal activities and
direction, and has considered diversity in
succession planning.
The Board considers the current mix of skills
and experience of members of the Board and
its senior management is sufficient to meet
the requirements of the Company.
In accordance with the information suggested
in Guide to Reporting on Principle 2, the
Company has disclosed full details of its
directors in the director’s report attached to
this Corporate Governance Statement. Other
disclosure material on the Structure of the
Board has been made available on the
Company’s website.
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Corporate Governance Statement
Principles and Recommendations
Compliance
Comply
Principle 3 – Promote ethical and responsible decision making
3.1 Establish a code of conduct
and disclose the code or a
summary of the code.
3.2 Companies should establish a
policy concerning diversity and
disclose the policy or a
summary of that policy. The
policy should include
requirements for the Board to
establish measurable
objectives for achieving gender
diversity and for the Board to
assess annually both the
objectives and progress in
achieving them.
3.3 Provide the information
indicated in Guide to reporting
on Principle 3.
Complies.
The Board has adopted a Code of Conduct.
The code establishes a clear set of values
that emphasise a culture encompassing
strong corporate governance, sound
business practices and good ethical conduct.
The code is available on the Company’s
website.
The Board has undertaken a review of the
mix of skills and experience on the Board in
light of the Company’s principal activities and
direction.
Complies.
The code is available on the Company’s
website.
The Board has a Diversity Policy which
acknowledges ‘Merit and Ability’. The
Company diversity policy can be located on
the Company website.
Complies.
On completion and acceptance of a Diversity
Policy, the Company will report in each
annual report the measurable objectives for
achieving gender diversity set by the Board.
The Company has two females in executive
positions, appointed in accordance with the
companies above mentioned policies.
The Company will include in the directors’
report the proportion of women executives
and their position held within the Company.
Complies
Number of Board members: 3
Number of female Board members: -
Number of senior executive staff: 10
Number of female senior executive staff: 2
Female positions held:
- Chief Financial Officer
- Compliance Manager
Principle 4 – Safeguard integrity in financial reporting
4.1 The Board should establish
and audit committee.
The Board has established an Audit
Committee which operates under an Audit
Committee Charter to focus on issues
relevant to the integrity of the Company’s
financial reporting.
Complies.
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Corporate Governance Statement
Principles and Recommendations
Compliance
Comply
4.2 The audit committee should be
structured so that it consists of
only non-executive directors, a
majority of independent
directors, is chaired by an
independent chair who is not
chair of the Board and have a
least 3 members.
Members of the Audit Committee are Marcel
Collignon (Chair), Scott Beeton and Michael
Carter. Marcel Collignon is an Executive
Director and is not chair of the Board. The
committee consists of two executive directors
and one non - executive chairman.
During the year Delan Pagliaccio (resigned 2
May 2016) and Richard Symon (resigned 10
August 2015) were members of the audit
committee.
The Audit Committee did not comply with
Recommendation 4.2 in that the committee:
did not consist of only Non-Executive
Directors and;
did not consist of a majority of
independent Directors.
Does not comply due to
the composition of the
Committee. However, the
Board considers the
directors to be the most
appropriate members to
constitute the audit
committee given their
technical and broad
knowledge of the industry
in which the Company
operates.
4.3 The audit committee should
have a formal charter.
The Board has adopted an Audit Charter.
Complies.
This charter is available on the Company’s
website.
4.4 Provide the information
indicated in Guide to reporting
on Principle 4.
Complies.
In accordance with the information suggested
in Guide to Reporting on Principle 4, this has
been disclosed in the director’s report
attached to this Corporate Governance
Statement and is summarised in this
Corporate Governance Statement.
The members of the Audit Committee are
appointed by the Board and
recommendations from the committee are
presented to the Board for further discussion
and resolution.
The Audit Committee held two meetings
during the period to the date of the Directors’
report and meets at least twice per annum.
The Audit Charter, and information on
procedures for the selection and appointment
of the external auditor, and for the rotation of
external audit engagement partners (which is
determined by the Audit Committee), is
available on the Company’s website.
Principle 5 – Make timely and balanced disclosure
5.1 Establish written policies
designed to ensure compliance
with ASX Listing Rules
disclosure requirements and to
ensure accountability at a
senior executive level for that
compliance and disclose those
policies or a summary of those
policies.
5.2 Provide the information
indicated in the Guide to
reporting on Principle 5.
Complies.
The Company has adopted a Continuous
Disclosure Policy, to ensure that it complies
with the continuous disclosure regime under
the ASX Listing Rules and the Corporations
Act 2001.
This policy is available on the Company’s
website
The Company’s Continuous Disclosure
Policy is available on the Company’s website.
Complies.
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Corporate Governance Statement
Principles and Recommendations
Compliance
Comply
Principle 6 – Respect the rights of shareholders
6.1 Design a communications
policy for promoting effective
communication with
shareholders and encouraging
their participation at general
meetings and disclose that
policy or a summary of that
policy.
The Company has adopted a Shareholder
Communications Policy. The Company uses
its website (www.sequoia.com.au), annual
report, market announcements and media
disclosures to communicate with its
shareholders, as well as encourages
participation at general meetings.
This policy is available on the Company’s
website.
Complies.
6.2 Provide the information
indicated in the Guide to
reporting on Principle 6.
The Company’s shareholder communications
policy is available on the Company’s website.
Complies.
Principle 7 – Recognise and manage risk
7.1 Establish policies for the
oversight and management of
material business risks and
disclose a summary of these
policies.
7.2 The Board should require
management to design and
implement the risk
management and internal
control system to manage the
Company’s material business
risks and report to it on whether
those risks are being managed
effectively. The Board should
disclose that management has
reported to it as to the
effectiveness of the Company’s
management of its material
business risks.
7.3 The Board should disclose
whether it has received
assurance from the chief
executive officer and chief
financial officer that the
declaration provided in
accordance with section 295A
of the Corporations Act is
founded on a sound system of
risk management and internal
control and that the system is
operating efficiently in all
material respects in relation to
the financial reporting risks
Complies.
Complies.
The Company has adopted a Risk
Management Statement within each of the
Audit Committee Charter and the Risk and
Compliance Committee Charters. These
Committees are responsible for managing
risk; however, ultimate responsibility for risk
oversight and risk management rests with the
Board.
The Audit and Risk and Compliance
Committee Charters are available on the
Company’s website and is summarised in this
Corporate Governance Statement.
The Company has identified key risks within
the business. In the ordinary course of
business, management monitor and manage
these risks.
Key operational and financial risks are
presented to and reviewed by the Board at
each Board meeting.
Complies.
The Board has received a statement from the
Chief Executive Officer and Chief Financial
Officer that the declaration provided in
accordance with section 295A of the
Corporations Act 2001 is founded on a sound
system of risk management and internal
control and that they system is operating
efficiently and effectively in all material
respects in relation to the financial reporting
risks.
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Corporate Governance Statement
Principles and Recommendations
Compliance
7.4 Provide the information
indicated in the Guide to
reporting on Principle 7.
The Board has adopted an Audit and Risk
and Compliance Committee Charter includes
a statement of the Company’s risk policies.
Comply
Complies.
These charters are available on the
Company’s website and are summarised in
this Corporate Governance Statement.
The Company has identified key risks within
the business and has received a statement of
assurance from the Chief Executive Officer
and Chief Financial Officer.
Principle 8 – Remunerate fairly and responsibly
8.1 The Board should establish a
remuneration committee
The Board has established a Nomination and
Remuneration Committee and has adopted a
remuneration charter.
Complies.
8.2 The remuneration committee
should be structured
The Nomination and Remuneration
Committee:
consist of a majority of independent
Directors;
are chaired by an independent Director;
and;
has three members.
Does not comply due to
the composition of the
Committee. However, the
Board considers the
members of the committee
to be appropriate.
8.3 Clearly distinguish the structure
of Non-Executive Directors’
remuneration from that of
Executive Directors and senior
executives.
The Company complies with the guidelines
for executive remuneration packages and
non-executive director remuneration.
No senior executive is involved directly in
deciding their own remuneration.
Complies.
8.4 Provide the information
indicated in Guide to reporting
on Principle 8.
The Board has adopted a Nomination and
Remuneration Committee Charter.
Complies.
The Company does not have any schemes
for retirement benefits.
Sequoia Financial Group Limited’s corporate governance practices were in place for the financial year ended 30 June
2016 and to the date of signing the directors’ report.
Various corporate governance practices are discussed within this statement. For further information on corporate
governance policies adopted by Sequoia Financial Group Limited, refer to our website: www.sequoia.com.au.
As required by the ASX Listing Rules, this statement sets out the extent to which the Company has followed the ASX
Corporate Governance Council’s Corporate Governance Principles and Recommendations (“Recommendations”) during
the year to 30 June 2016. The Company considers that its governance practices are generally consistent, where possible,
with the Recommendations except where stated.
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Corporate Governance Statement
Board functions
The Board’s primary role is the protection and enhancement of long-term shareholder value.
To fulfil this role, the Board is responsible for the overall corporate governance of the Group including formulating its
strategic direction, approving and monitoring capital expenditure, setting remuneration, appointing, removing and
creating succession policies for directors and senior executives, establishing and monitoring the achievement of
management’s goals and ensuring the integrity of internal control and management information systems.
The Board is also responsible for approving and monitoring financial and other reporting.
Responsibilities/functions of the Board include:
setting the direction, financial objectives and goals for management;
reviewing and approving strategies for the Company;
monitoring management’s performance against these goals and objectives;
ensuring there are appropriate standards of Corporate Governance and ethical standards;
evaluating the performance and determining the remuneration of the senior executive officers of the
Company;
ensuring appropriate risk management systems, internal control, reporting systems and compliance
frameworks are in place and operating effectively; and
ensuring there are plans and procedures for recruitment, training, remuneration and succession planning for
senior executives.
The Board has delegated responsibility for operating and administration of the Company to the executive management.
Responsibilities are delineated by formal authority delegations.
Matters which are specifically reserved for the Board or its committees include the following:
appointment of the Chairman and if applicable, the Deputy Chairman;
appointment and removal of the Chief Executive Officer(s);
appointment of directors to fill a vacancy or as additional directors;
establishment of Board committees, their membership and delegated authorities;
approval of dividends;
development and review of corporate governance principles and policies;
approval of major capital expenditure, acquisitions and divestitures in excess of authority levels delegated to
management;
calling meetings of shareholders and;
any other specific matters nominated by the Board from time to time.
Structure of the Board
The Company’s constitution governs the regulation and proceedings of the Board.
It is intended that the composition of the Board be determined using the following principles:
a minimum of three directors, with a broad range of expertise;
a majority of directors having extensive knowledge of the Company’s industries, and those who do not, having
extensive experience in significant aspects of auditing and financial reporting, or risk management of large
companies;
a majority of independent non-executive directors;
enough directors to serve on various committees without overburdening the directors or making it difficult for
them to fully discharge their responsibilities; and,
a maximum period of ten years’ service, subject to re-election every three years (except for the managing
director).
At present the Company does not have a majority of independent directors and continues to consist of a majority of
executive directors involved in the general management of the Company. The Directors are of the view that maintaining
this structure is appropriate to the circumstances of the Group as the Board consolidates the restructure of its operations
and repositioning of its business.
The Board only considers directors to be independent where they are independent of management and free of any
business or other relationship that could materially interfere with, or could reasonably be perceived to interfere with, the
exercise of their unfettered and independent judgment. The Board has adopted a definition of independence based on
that set out in Principle 2 of the ASX Corporate Governance Revised Principles and Recommendations. The Board will
review the independence of each director in light of interests disclosed to the Board from time to time.
Sequoia Financial Group Limited - Annual Report 2016
11
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Corporate Governance Statement
Below is a summary of directors at Sequoia Financial Group Limited.
There are procedures in place, agreed by the Board, to enable directors in furtherance of their duties to seek independent
professional advice at the Company’s expense.
The appointment date of each director in office at the date of this report is as follows:
Name
Michael Kenneth Carter
Scott Lionel Beeton
Marcel John Collignon
Delan Pasquale Pagliaccio
Bruce Richard Sydney Symon
Position
Non-Executive Chairman (appointed as Chairman 10 August 2015)
Executive Director
Executive Director
Executive Director (appointed 7 August 2015, resigned 2 May 2016)
Executive Director (resigned 7 August 2015)
Further details on each director can be found in the directors’ report attached to this Corporate Governance Statement.
The Board will appoint an independent Non – Executive Director/s at an appropriate time, to be determined by the Board.
Securities trading policy
The Company has adopted a Share Trading Policy which complies with the requirements of ASX Listing Rules.
Under the Company’s Share Trading Policy, directors, officers and employees of the Company are prohibited from
dealing in the Company’s securities at any time that they may be in possession of unpublished price-sensitive information
concerning the Company. In addition, there are specified closed periods during which dealing in the Company’s
securities is prohibited except under very exceptional circumstances. A closed period is the period commencing from the
end of a reporting period and concluding on the business day following the announcement to the market of the Company’s
full year results or half-year results (as the case may be).
Directors, officers and employees can only deal in the Company’s securities after having first obtained clearance from
the Chairman or his delegate and must notify the Company Secretary when a trade has occurred.
As required by the ASX Listing Rules, the Company notifies the ASX of any transaction conducted by directors in the
securities of the Company within five days of the transaction taking place.
The Share Trading Policy has been issued to ASX and can be found on the Company’s website.
Audit committee
The Board has established an Audit Committee which operates under a Charter approved by the Board. It is the Board’s
responsibility to ensure that an effective internal control framework exists within the entity. This includes internal controls
to deal with both the effectiveness and efficiency of significant business processes, the safeguarding of assets, the
maintenance of proper accounting records, the reliability of financial information as well as non-financial considerations
such as the benchmarking of operational key performance indicators. The Board has delegated responsibility for
establishing and maintaining a framework of internal control and ethical standards to the Audit Committee.
The Committee also provides the Board with additional assurance regarding the reliability of financial information for
inclusion in the financial reports.
The members of the Audit Committee during the year were:
Scott Beeton
Marcel Collignon (Chair)
Michael Carter
The external auditors and the executive management are invited to audit committee meetings at the discretion of the
committee.
For details on the number of meetings of the Audit Committee held during the year and the attendees at those meetings,
refer to the directors’ report.
Sequoia Financial Group Limited - Annual Report 2016
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Corporate Governance Statement
Risk and Compliance
The responsibility for overseeing risk falls within the charter of the Risk and Compliance Committee. The Company
identifies areas of risk within the Company and management and the Board continuously undertake a risk assessment
of the Company’s operations, procedures and processes. The risk assessment is aimed at identifying the following:
a culture of risk control and the minimisation of risk throughout the Company, which is being done through natural
or instinctive processes by employees of the Company;
a culture of risk control that can easily identify risks as they arise and amend practices;
the installation of practices and procedures in all areas of the business that are designed to minimise an event or
incident that could have a financial or other effect on the business and its day to day management; and,
adoption of these practices and procedures to minimise many of the standard commercial risks, ie taking out the
appropriate insurance policies, or ensuring compliance reporting is up to date.
CEO and CFO certification
The Chief Executive Officer and Chief Financial Officer have given a written declaration to the Board required by section
295A of the Corporations Act 2001 that in their view:
the Company’s financial report is founded on a sound system of risk management and internal compliance and
control which implements the financial policies adopted by the Board;
the Company’s risk management and internal compliance and control system is operating effectively in all material
respects;
the Company’s financial statements and notes thereto comply with the accounting standards; and,
the Company’s financial statements and notes thereto give a true and fair view of the consolidated entity’s financial
position as at 30 June 2016 and of its performance for the financial year ended on that date.
Sequoia Financial Group Limited - Annual Report 2016
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Directors’ Report
The directors of Sequoia Financial Group Limited formerly MDS Financial Group Limited (“the Company” or “SEQ”)
present the annual financial report for the Group, being parent entity and its subsidiaries, for the year ended 30 June
2016. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:
The names and particulars of the directors of the Company during or since the beginning of the year are:
Michael Carter
Non–Executive Director and Chairman (initially appointed 9 March 2015 as Executive Director, appointed Non–Executive
Chairman 10 August 2015).
Michael Carter has over 25 years’ experience in financial services with previous executive roles at companies such as
Macquarie Bank (now Macquarie Group), NRMA Insurance Group (now IAG) and Bridges Financial Services / IOOF
Holdings.
Michael was Managing Director at Bridges Financial Services, Executive Wealth Management and associated entities
until April 2014 and was part of the Leadership Group at IOOF Holdings. Bridges was a Market Participant and a major
financial planning organisation.
Michael has a Bachelor of Engineering (Mining) from the University of New South Wales and Diploma of Financial
Services. He is a member of the Australian Institute of Company Directors.
Scott Beeton
Executive Director and Managing Director (appointed 24 December 2014).
Scott Beeton has 17 years’ experience in the finance industry working in a variety of roles across Superannuation,
funds management, investment management, stockbroking, AFSL dealer services & advice.
Scott was appointed Managing Director of SEQ in December 2014, following the approval for SEQ to acquire
Sequoia Financial Group and became CEO for the newly formed Group. Scott is co-founder of Sequoia and has
developed the capabilities of the various Sequoia businesses.
Scott has a Bachelor of Business from Newcastle University.
Marcel Collignon
Executive Director (appointed 24 December 2014).
Marcel Collignon was appointed as Executive Director in December 2014. Marcel is Founder and Managing Director of
Sequoia Specialist Investments and is head of Investment Solutions at Sequoia. For 16 years Marcel, has worked in
financial markets developing extensive experience in equities and derivatives, trading, portfolio management,
superannuation and financial planning.
Marcel holds a Bachelor of Commerce from the Australian National University, a Diploma of Financial Planning and
has completed the ASX derivative accreditation course.
Directorships of other listed companies
Directorships of other listed companies held by directors in the last 3 years immediately before the end of the financial
year are as follows:
Director
Company
Exchange
Period from
Period to
DP Pagliaccio
AG Financial Ltd
ASX
20 March 2013
4 December 2014
Directors’ shareholdings
The following table sets out the number of each director’s relevant interest in shares and options over shares or interest
in contracts relating to shares of the Company or a related body corporate as at the date of this report.
Director
SL Beeton
MK Carter
MJ Collignon
DP Pagliaccio
Fully paid ordinary
shares
Indirect interest in
shares
Indirect interest in share
options
1,195,875,439
52,500,000
412,982,375
-
-
-
-
-
-
-
Remuneration of directors and senior management
Information about the remuneration of directors and key management personnel is set out in the remuneration report of
this directors’ report on page 21.
Company Secretary
Mr Andrew Phillips
Sequoia Financial Group Limited - Annual Report 2016
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Directors’ Report
Principal Activities
The Group’s principal activities offer diversified financial products, including but not limited to investment and
superannuation products, wealth management services and retail, wholesale and institutional trading platforms.
Review of Operations
The consolidated operating profit after income tax attributable to members is $320,397 (2015 loss: $17,974,212), the
comprehensive income attributable to members is $618,042 (2015: Loss $17,974,212).
The main reason for comprehensive income being recognised was due to a favourable revaluation in a strategic
shareholding held by the Group.
During the year the Sequoia Financial Group Limited completed two strategic acquisitions, the first being a 100%
ownership in Sequoia Wealth Group Pty Ltd and the second being controlling ownership in Finance TV Pty Ltd from
11.56% to 50.09%.
Change in the state of affairs
On the 3rd December 2015, the Company changed its name from MDS Financial Group Limited to Sequoia Financial
Group Limited following shareholder approval and in addition to this changed it ASX code from MDS to SEQ.
On the 19th April 2016 the Company changed its registered office from Level 8, 25 Bligh Street, Sydney to Level 36, 50
Bridge Street, Sydney.
Subsequent events
There have not been any matters or circumstance occurring subsequent to the end of the financial year that has
significantly affected the operations of the Group, the results of those operations, or the state of affairs of the Group in
future financial years.
Future Developments
Disclosure of information regarding likely developments in the operations of the Group in future financial years and the
expected results of those operations is likely to result in unreasonable prejudice to the Group. Accordingly, this
information has not been disclosed in this report.
Environmental regulation and performance
The Group’s operations are not involved in any activities that have a marked influence on the environment. As such, the
directors are not aware of any material issues affecting the Group or its compliance with the relevant environment
agencies or regulatory authorities.
Dividends
There have been no dividends paid or provided for (2015: nil).
Share options
As at the date of this report, there are nil (2015: nil) unissued ordinary shares of Sequoia Financial Group Limited under
options.
Indemnification and insurance of officers and auditors
During the financial year, the Company paid premiums based on normal commercial terms and conditions to insure all
directors, officers and employees of the Group against the costs and expenses in defending claims brought against the
individual while performing services for the Group. The premium paid has not been disclosed as it is subject to the
confidentiality provisions of the insurance policy. The Company has not otherwise, during or since the financial year,
except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the Company or of any
related body corporate against a liability incurred as such an officer or auditor.
The Company has previously entered into a Deed of Indemnity, Insurance and Access with each of its current and former
directors. The purpose of the Deed is to:
Confirm the indemnity provided by the Company in favour of Directors under the Company’s Constitution;
Confirm the right of access to certain documents under the Corporations Act.
Include an obligation upon the Company to maintain adequate Directors and Officers liability insurance; and
Sequoia Financial Group Limited - Annual Report 2016
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Directors’ Report
Directors’ meetings
The following table sets out the number of directors’ meetings held during the financial year and the number of meetings
attended by each director (while they were a director). During the financial year, there were ten Board meetings held. All
other Board matters arising during the year being resolved by Circulating Resolutions.
Director
SL Beeton
MK Carter
MJ Collignon
DP Pagliaccio
BRS Symon
Audit Committee
Eligible to attend
Attended
9
10
9
6
2
9
10
9
6
1
During the financial year, there were one Audit Committee meetings held. Other matters arising during the year were
resolved by Circulating Resolutions.
Member
MK Carter
MJ Collignon
DP Pagliaccio
Eligible to attend
Attended
2
2
2
2
2
2
Remuneration and Nomination Committee
During the financial year, there was one Remuneration and Nomination Committee meeting held. This meeting was
added to the agenda of one of the Board meetings held.
Member
MK Carter
MJ Collignon
DP Pagliaccio
Eligible to attend
Attended
1
1
1
1
1
-
Risk and Compliance Committee
During the financial year, there were seven Risk and Compliance Committee meeting held.
Member
SL Beeton
MK Carter
MJ Collignon
DP Pagliaccio
Eligible to attend
Attended
7
7
7
3
7
4
7
2
Governance Committee
During the financial year, there was one Governance Committee meeting held.
Member
MK Carter
MJ Collignon
BRS Symon
Eligible to attend
Attended
1
1
1
1
1
1
Sequoia Financial Group Limited - Annual Report 2016
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Directors’ Report
Non-audit services
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are
outlined in note 22 to the financial statements. Engagement services include the review of financial reports for the Group
consolidated accounts, the review of three of the subsidiaries licences and corresponding financial reports and for tax
related services for all entities within the Group.
The fees included in general and administrative expenses for the year ended June 2016 for all auditor engaged services
are as follows:
Audit services
Audit or review of the financial report, including licences
Other services
Tax services
$
134,000
23,000
157,000
The directors are satisfied that the provision of non-audit services in the form of tax compliance services and a balance
sheet review, during the year, by the auditor (or another person or firm on the auditors’ behalf) is compatible with the
general standard of independence for auditors imposed by the Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 22 to the financial statements do not compromise
the external auditor’s independence, based on advice received from the audit committee, for the following reasons:
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and,
none of the services undermine the general principles relating to auditor independence as set out in Code of
Conduct APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional &
Ethical Standards Board, including reviewing or auditing the auditors own work, acting in a management or
decision making capacity for the Company, acting as advocate for the Company or jointly sharing economic
risks and rewards.
Officers of the Company who are former audit partners of Hall Chadwick
There are no officers of the Company who are former audit partners of Hall Chadwick.
Auditor’s independence declaration
The auditor’s independence declaration is included on page 67 of the financial report and forms part of the Directors’
Report for the year ended 30 June 2016.
Sequoia Financial Group Limited - Annual Report 2016
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Directors’ Report
Summary of Results
Operating Performance
Year ended 30 June
Revenue
Expenses
Profit / (Loss) before tax
Tax expense
Profit / (Loss) after tax
Cash Flow
Year ended 30 June
Operating cash flow
Investing cash flow
Financing cash flow
Net decrease in cash
Opening cash
Cash received on acquisition
Closing cash
Financial Position
As at 30 June
Total current assets
Total non-current assets
Total assets
Total current liabilities
Total non-current liabilities
Total liabilities
Net assets
2016
$’000
22,981
(22,479)
502
(216)
286
2016
$’000
(249)
(841)
1,289
199
614
813
813
2016
$’000
6,318
22,115
28,433
9,005
10,133
19,138
9,295
2015
$’000
21,406
(39,728)
(18,322)
347
(17,974)
2015
$’000
(1,762)
(287)
865
(1,183)
1,459
337
614
2015
$’000
12,927
21,569
34,496
14,960
12,881
27,841
6,655
Sequoia Financial Group Limited - Annual Report 2016
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Directors’ Report
Business Review
Trading & Execution
During the 2016 financial year, D2MX Pty Ltd transformed compared to the prior year. The “Group” is continuing to attract new
wholesale clients (holders of an AFSL issued by ASIC and referred to in the industry as ‘shadow brokers’) which has seen a revenue
contribution increase to the Group of 345% (2016: $8,265,683 and 2015: $1,855,709, prior year was 6 months’ contribution). In
addition, the execution and trading division has continued to make branding conscious choices, renaming Trader Dealer Online Pty
Ltd to Sequoia Direct Pty Ltd, establishing new websites and through the launch of a new wholesale trading platform in the 2017
financial year.
D2MX Pty Ltd has also seen solid and ongoing growth in the number of client trading accounts since January 2016.
Software Subscriptions
SEQ has two analytical software products, robust trading tools that are used by retail and wholesale traders alike. These proprietary
trading platforms are branded as Bourse Data and Market Analyser, names that are highly regarded and trusted in the market place,
having been established in the share trading industry for over 15 years. Our subscription based software allows easy scanning and
analysis of market information through a web based interface for convenient access.
Capital Markets Advisory
The capital markets division is continuing to be a valuable contributor to the “Group”. Sequoia Corporate Finance Pty Ltd signed a
number of exclusive mandates during the financial year that resulted in positive revenue events which contributed to the financial year
result.
Self-Managed Superannuation Fund Administration
Sequoia Superannuation Pty Ltd gained considerable traction during financial year 2016, with an increase in new mandates secured
for the administration of SMSFs. The Company has a particular focus on this division as a platform for further growth and as a source
of recurring revenue.
Wealth Advisory
Sequoia Asset Management Pty and Sequoia Wealth Management Pty Ltd’s specialised teams provide general advice and support
regarding portfolio management, SMSFs, direct shares, superannuation, structured products, option trading, personal insurance,
margin lending and cash solutions. This division is now seeking to maximise the many cross-selling opportunities for such products
and services across the Group’s growing and diverse client base.
Investment Solutions
Sequoia Specialist Investments had great success with its structured products during the period, which have been increasingly
popular with self-directed investors and third party advisors, and which have generated some excellent returns for investors.
Financial news services
FNN is an independent news organisation that specialises in both the production and distribution of financial news content, digital
communications and productions services to ASX-Listed companies and managed funds. Annually FNN produces more than 3000
video news items and is one of the largest suppliers of wholesale online finance video in the country.
Future Developments
The Company has commenced the new financial year strongly. We are encouraged by the growing market profile and new mandates
being secured across our key business units. We expect to enhance the trading software options on offer to our wholesale trading
clients, allowing further growth in wholesale client relationships this year. Synergies from the strategic investment in FNN and the
expansion of our funds management activities are anticipated to be earnings accretive in FY17.
Sequoia Financial Group Limited - Annual Report 2016
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Directors’ Report
Sequoia Financial Group Limited ABN 90 091 744 884
Remuneration Report (audited)
The remuneration report, which has been audited, outlines the director and executive remuneration arrangements for
the consolidated entity and the Company, in accordance with the requirements of the Corporations Act 2001 and its
Regulations.
The remuneration report is set out under the following main headings:
A. Director and senior management details
B. Remuneration policies
C. Remuneration of directors and senior management
D. Additional information
A.
Director and senior management details
Mr Scott Lionel Beeton
Mr Michael Kenneth Carter
Mr Marcel John Collignon
Managing Director
Executive Director appointed 9 March 2015, appointed Non-Executive Chairman 10
August 2015
Executive Director
Mr Bruce Richard Sydney Symon
Executive Director, resigned 7 August 2015
Mr Delan Pasquale Pagliaccio
Executive Director appointed 7 August 2015, resigned 2 May 2016
In addition to the directors noted above, the following persons represent the senior management of the Group during the
year:
Mr Andrew Guy Phillips
Company Secretary and Chief Financial Officer until 10 August 2015
Ms Renee Louise Minchin
Chief Financial Officer
B.
Remuneration policies
The performance of the Group depends upon the quality of its directors and executives. The Group recognises the need
to attract, motivate and retain highly skilled directors and executives.
The Board of Directors, through its Remuneration Committee, accepts responsibility for determining and reviewing
remuneration arrangements for the directors and the senior management team. The Remuneration Committee assesses
the appropriateness of the nature and amount of remuneration of directors and senior managers on a periodic basis by
reference to relevant employment market conditions, giving due consideration to the overall profitability and financial
resources of the Group, with the objective of ensuring maximum stakeholder benefit from the retention of a high quality
Board and executive team.
The Board proposes to review reward structures and the remuneration arrangements for Directors and executives in
conjunction with a return to profitability.
Non-executive director remuneration
Fees and payments to non-executive directors reflect the demands which are made of the directors in fulfilling their
responsibilities. Non-executive director fees are reviewed annually by the Board. The constitution of the Company
provides that the non-executive directors of the Company are entitled to such remuneration, as determined by the Board,
which must not exceed in aggregate the maximum amount determined by the Company in general meeting. The most
recent determination was at the Annual General Meeting held on 15 December 2006 where the shareholders approved
an aggregate remuneration of $200,000.
Senior management and executive director remuneration
Executive remuneration comprises:
Fixed remuneration component
Variable remuneration component including short-term incentive (STI) and long-term incentive (LTI)
An Employee Share Option Plan was approved at a meeting of shareholders on the 27 November 2015 (LTI)
Fixed remuneration
Fixed remuneration consists of base remuneration as well as employer contributions to superannuation. Remuneration
levels are reviewed annually through a process that considers individual performance and that of the overall Group.
Sequoia Financial Group Limited - Annual Report 2016
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Directors’ Report
Remuneration Report (audited)
Variable remuneration – short term incentive (STI)
STIs are available to executives who achieve revenue and/or profit targets. The Board is responsible for determining
who is eligible to participate in STI arrangements as well as the structure of those arrangements. No STI’s, including
options have been awarded in the current financial year.
Variable remuneration – long term incentive (LTI)
The objective of the LTI plan is to reward senior managers in a manner which aligns this element of remuneration with
the creation of shareholder wealth. As such, LTI grants are only made to executives who are able to influence the
generation of shareholder wealth and thus have a direct impact on the Group’s performance against relevant long term
performance hurdles. LTI grants to executives are delivered in the form of options or shares.
No LTI grants were allocated during 2016.
C.
Remuneration of directors and senior management
Remuneration shown below relates to the period in which the director or executive was a member of key management
personnel. Amounts below have either been paid out or accrued in the period. Included in the cash salary and fees are
short term benefits being; director fees, management contracts and fees earned from mandated corporate activity.
Short-term
benefits
Cash
salary and
fees
Post
employment
benefits
Share
based
payments
Super-
annuation
Shares
Short-term
benefits
Post
employment
benefits
Share
based
payments
Total
Total
Cash salary and
fees
Super-
annuation
Shares
2016
2015
$
$
$
$
$
$
$
$
Executive Directors:
276,386
19,308
- 295,694
276,867
18,783
- 295,650
246,513
19,308
- 265,821
247,983
18,476
- 266,459
165,000
45,000
-
-
-
-
- 165,000
-
-
45,000
60,000
-
-
-
-
60,000
120,000
-
-
42,549
4,042
- 46,591
Non-Executive Directors:
69,745
6,626
- 76,371
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Other Key Management
102,000
-
-
102,000
60,000
- 60,000
120,000
-
-
-
-
152,098
6,460
- 158,558
131,667
12,508
-
144,175
-
-
-
-
1,036,311
57,750
- 1,094,061
839,497
47,761
120,000
1,007,258
SL Beeton
MJ Collignon
DP Pagliaccio
BRS Symon
MK Carter
MK Carter
JGK Khoo
PJ Stirling
AG Phillips
CB Foley
RL Minchin
Total
Sequoia Financial Group Limited - Annual Report 2016
21
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Directors’ Report
Remuneration Report (audited)
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Executive Directors:
SL Beeton
MK Carter
MJ Collignon
BRS Symon
DP Pagliaccio
Non-Executive Directors:
MK Carter
JGK Khoo
PJ Stirling
Other Key Management
Personal
AG Phillips
CB Foley
RL Minchin
Fixed remuneration
At risk - STI
At risk - LTI
2016
$
2015
$
2016
$
2015
$
2016
$
2015
$
100%
-%
100%
100%
100%
100%
-%
-%
100%
-%
100%
100%
100%
100%
100%
-%
-%
100%
100%
100%
100%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
There is no link between remuneration and the market price of the Company’s shares.
Shareholding
The number of shares in the parent entity held during the financial year by each director and other members of key
management personnel of the consolidated entity, including their personally related parties is set out below;
30 June 2016
S Beeton
M Carter
M Collignon
R Symon
A Phillips
R Minchin
Balance at the
start of the year
1,060,903,816
2,500,000
371,469,875
84,691,435
32,071,429
12,500,000
1,564,136,555
Received as part
of remuneration
-
-
-
-
-
-
-
Additions
134,971,623
50,000,000
41,512,500
-
21,000,000
11,764,706
259,248,829
Disposals/
other
Balance at the
end of the year
1,195,875,439
52,500,000
412,982,375
84,691,435
53,071,429
24,264,706
1,823,385,384
-
-
-
-
-
-
-
30 June 2015
Balance at the
start of the year
Received as part
of remuneration
Additions
Disposals/
other
Balance at the
end of the year
S Beeton
M Carter
M Collignon
J Khoo
R Symon
P Stirling
C Foley
A Phillips
143,569,687
-
15,099,451
-
68,666,669
210,000,000
114,242
60,000
473,510,049
-
-
-
-
8,571,429
-
-
8,571,429
17,142,858
937,403,467
2,500,000
356,370,424
12,500,000
7,453,337
-
-
23,494,000
1,303,727,228
20,069,338
-
-
-
-
-
-
-
20,069,338
1,060,903,816
2,500,000
371,469,875
12,500,000
84,691,435
210,000,000
114,242
32,071,429
1,774,310,797
Escrow shares held by S Beeton and M Collignon are included in the total shareholding, the shares come out of
escrow on the 1 October 2016, the escrowed shareholding for each director was 83,025 shares and relate to
performance expectations of Sequoia Wealth Group Pty Ltd.
Sequoia Financial Group Limited - Annual Report 2016
22
For personal use only
Directors’ Report
Remuneration Report (audited)
Key terms of employment contracts
Where contracts have been established, employment terms and conditions of key management personnel and Group
executives are formalised in standard contracts of employment. All contracts are for no fixed term with 1 to 3 months’
notice required for termination by either party.
Currently not all key management personal have formal contracts, however this will be put into place.
D.
Other transactions with directors and senior management
Receivable from and payable to key management personnel
The following balances are outstanding at the reporting date in relation to loan and remuneration arrangements with key
management personnel:
Trade receivable from Mr SL Beeton
Trade payable to Ms JC Khoo
Trade payables to Mr PJ Stirling
Trade payables to Mr CB Foley
Consolidated
2016
$
-
-
-
-
2015
$
(87,100)
40,000
27,500
70,523
Ms JC Khoo and Mr PJ Stirling have converted the above outstanding debt to equity as at the 6 August 2015. Mr SL
Beeton has repaid $87,100 of the loan in full. Mr CB Foley was paid as at the 15 August 2015.
E.
Additional information
The following table shows the gross revenue, profits and dividends for the last five years of the listed entity, as well as
the share prices at the end of the respective financial years.
Revenue
Net profit or (loss) after tax
Share price at year end
Dividends paid
2014
2015
2016
$’000
6,491
(1,260)
$0.002
Nil
$’000
21,406
(17,974)
$0.001
Nil
$’000
22,981
286
$0.002
Nil
This concludes the remuneration report, which has been audited.
The directors’ report is signed in accordance with a resolution of the directors made pursuant to s298(2) of the
Corporations Act 2001.
On behalf of the Directors
Michael Carter
Chairman
31 August 2016
Sequoia Financial Group Limited - Annual Report 2016
23
For personal use only
General Information
The financial report covers Sequoia Financial Group Limited as a consolidated entity consisting of Sequoia Financial
Group Limited and the entities it controls. The financial report is presented in Australian dollars, which is Sequoia
Financial Group Limited functional and presentation currency.
The financial report consists of the financial statements, notes to the financial statements and the directors’ declaration.
Sequoia Financial Group Limited is a listed public Company limited by shares, incorporated and domiciled in Australia.
Its registered office and principal place of business is:
Level 36
50 Bridge Street
Sydney NSW 2000
A description of the nature of the consolidated entity’s operation and its principal activities are included in the directors’
report, which is not part of the financial report.
The financial report was authorised for issue, in accordance with a resolution of directors, on 31 August 2016. The
directors have the power to amend and reissue the financial report.
Sequoia Financial Group Limited - Annual Report 2016
24
For personal use only
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
For the year ended 30 June 2016
Revenue
Expenses
Data fees
Dealing and settlement
Payments to investors
Commission and hedging
Employee benefits
Occupancy
Telecommunications
Marketing
General and administrative
Impairment
Other expenses
Profit / (loss) before income tax from continuing operations
Income tax (expense)/ benefit
Profit / (loss) from continuing operations
Other comprehensive income
Items that will be reclassified subsequently to profit or loss when
specific conditions are met:
Fair value gains on available-for-sale financial assets, net of tax
Total other comprehensive income
Total comprehensive income for the year
Total profit/(loss) and comprehensive income attributable to:
- Members of the parent entity
- Non-controlling interest
Note
Consolidated
2016
$
2015
$
4
22,980,597
21,406,293
5
5
6
(1,139,430)
(6,498,185)
(3,965,169)
(4,128,428)
(4,103,466)
(379,491)
(268,881)
(203,995)
(1,390,344)
(160,861)
(240,756)
501,591
(215,858)
285,733
(575,189)
(2,098,539)
(9,690,353)
(4,773,828)
(2,814,908)
(307,135)
(135,299)
(245,994)
(1,836,170)
(17,130,595)
(119,866)
(18,321,583)
347,371
(17,974,212)
297,645
297,645
-
-
583,378
(17,974,212)
618,042
(34,664)
583,378
(17,974,212)
-
(17,974,212)
Earnings per share for loss attributable to the owners of
Sequoia Financial Group Limited
Cents
Cents
Basic earnings per share
Diluted earnings per share
33
33
0.008
0.007
(40.00)
(40.00) 1
1 All potential ordinary shares, being options to acquire ordinary shares are not considered dilutive, as the exercise of
the options would decrease the basic loss per share.
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
Sequoia Financial Group Limited - Annual Report 2016
25
For personal use only
Consolidated Statement of Financial Position
As at 30 June 2016
Assets
Cash and cash equivalents
Trade and other receivables
Derivative assets
Income tax receivable
Other assets
Deferred costs
Total current assets
Financial assets
Plant and equipment
Intangible assets
Derivative assets
Deferred tax assets
Other assets
Deferred costs
Total non-current assets
Total assets
Trade and other payables
Derivative liabilities
Employee benefits
Deferred revenue
Borrowings
Total current liabilities
Borrowings
Derivative liabilities
Employee benefits
Deferred tax liabilities
Deferred revenue
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
Parent interest
Non-controlling interest
Total equity
Note
Consolidated
2016
$
2015
$
7
8
9
10
11
12
13
14
9
6
10
11
15
9
18
17
16
16
9
18
6
17
19
20
34
812,831
1,594,641
883,111
-
161,038
2,865,995
6,317,616
1,836,575
154,647
8,813,012
5,278,666
2,482,036
1,215,652
2,334,591
613,527
2,582,290
5,390,430
10,529
152,805
4,177,366
12,926,947
1,213,248
30,349
7,655,166
5,499,896
3,321,786
1,088,507
2,759,619
22,115,179
21,568,571
28,432,795
34,495,518
2,274,715
883,111
370,451
3,491,262
2,060,000
9,004,539
-
5,278,666
32,517
1,778,045
3,043,758
4,181,572
5,390,430
267,721
5,119,825
-
14,959,548
1,860,000
5,499,896
13,107
2,204,782
3,303,385
10,132,986
12,881,170
19,137,525
27,840,718
9,295,270
6,654,800
26,724,112
177,098
24,765,885
(482,765)
(17,670,141)
(17,628,320)
9,231,069
64,201
9,295,270
6,654,800
-
6,654,800
The above statement of financial position should be read in conjunction with the accompanying notes.
Sequoia Financial Group Limited - Annual Report 2016
26
For personal use only
Consolidated Statement of Changes in Equity
For the year ended 30 June 2016
Consolidated
Contributed
Equity
Reserves
Accumulated
Losses
$
$
$
Non-
controlling
interest
$
Total Equity
$
Balance at 1 July 2014
15,906,960
(482,765)
345,892
-
15,770,087
Comprehensive income:
Loss for the year
Other comprehensive income for the year
Total comprehensive income for the year
Transactions with owners in their capacity as
owners:
Deemed issue of shares from reverse
acquisition
Share capital issued
Transaction costs
Total transactions with owners and other
transfer
-
-
-
8,553,712
315,000
(9,787)
8,858,925
-
-
-
-
-
-
-
(17,974,212)
-
(17,974,212)
-
-
-
(17,974,212)
-
(17,974,212)
-
-
-
-
-
-
-
-
-
-
8,553,712
315,000
(9,787)
8,858,925
6,654,800
6,654,800
Balance at 30 June 2015
24,765,885
(482,765)
(17,628,320)
Balance at 1 July 2015
24,765,885
(482,765)
(17,628,320)
Comprehensive income:
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Transactions with owners in their capacity as
owners:
Share capital issued
Transaction costs
Transfer from reserve to accumulated losses
Recognition of non-controlling interest on
acquisition of subsidiary
Total transactions with owners and other
transfers
-
-
-
-
297,645
297,645
320,397
-
320,397
(34,664)
-
(34,664)
285,733
297,645
583,378
1,997,514
(39,287)
-
-
-
362,218
-
-
(362,218)
-
-
-
1,997,514
(39,287)
-
-
-
-
98,865
98,865
1,958,227
362,218
(362,218)
98,865
2,057,092
Balance at 30 June 2016
26,724,112
177,098
(17,670,141)
64,201
9,295,270
The above statement of changes in equity should be read in conjunction with the accompanying notes.
Sequoia Financial Group Limited - Annual Report 2016
27
For personal use only
Consolidated Statement of Cash Flows
For the year ended 30 June 2016
Cash flows from operating activities
Receipts from customers
Payment to suppliers and employees
Interest received
Interest paid
Income tax paid
Note
Consolidated
2016
$
2015
$
20,982,069
(20,827,543)
5,338
(240,756)
(167,906)
22,876,588
(23,588,375)
13,493
(119,866)
(943,365)
Net cash used in operating activities
32
(248,798)
(1,761,525)
Cash flows from investing activities
Payment for acquisition of subsidiaries, net of cash acquired
31
Proceeds from sale of financial assets
Payment for plant and equipment
Payment for intangible assets
Payment for bonds, guarantees and other assets
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
Proceeds from issue of shares, net of transaction costs
Net cash provided by financing activities
Net decrease in cash and cash equivalents
Cash acquired from subsidiary on acquisition
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June
(571,240)
41,506
(120,874)
(63,556)
(127,145)
-
(150,000)
-
-
(136,633)
(841,309)
(286,633)
200,000
1,089,411
560,000
305,212
1,289,411
865,212
199,304
(1,182,946)
-
337,454
613,527
1,459,019
812,831
613,527
The above statement of cash flows should be read in conjunction with the accompanying notes.
Sequoia Financial Group Limited - Annual Report 2016
28
For personal use only
Notes to the Financial Statements
Note 1. Summary of Significant Accounting Policies
The financial statements are those of the consolidated entity consisting of Sequoia Financial Group Limited (the
“Company”) and its controlled entities (the “consolidated entity” or “Group”). Separate financial statements of Sequoia
Financial Group Limited as an individual entity are no longer presented as a consequence of a change to the Corporations
Act 2001, however limited financial information on Sequoia Financial Group Limited as an individual entity is included in
Note 28.
The principal accounting policies adopted in the preparation of the financial statements have been consistently applied
to all the years presented.
The financial statements were authorised for issue on 31 August 2016 by the directors of the Company.
a) Basis of Preparation
These general purpose financial statements have been prepared in accordance with the Corporations Act 2001, Australian
Accounting Standards and Interpretations of the Australian Accounting Standards Board and International Financial
Reporting Standards as issued by the International Accounting Standards Board. The Group is a for-profit entity for
financial reporting purposes under Australian Accounting Standards. Material accounting policies adopted in the
preparation of these financial statements are presented below and have been consistently applied unless stated otherwise.
The financial statements, except for cash flow information, have been prepared on an accruals basis and are based on
historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial
assets and financial liabilities. The amounts presented in the financial statements have been rounded to the nearest dollar.
b) Going concern
The financial report shows that for year ended 30 June 2016 the consolidated entity has a total comprehensive income
attributable to members of $618,042 and a negative cash flow from operating cash flows of $248,798 and a large
reduction in trade and other payables of $1,906,857.
At balance date the consolidated entity has a current asset deficiency of $2,686,923 a net tangible asset deficiency of
$221,733. These conditions indicate an uncertainty that may cast doubt about the consolidated entity’s ability to continue
as a going concern, however the business continues to improve, which is reducing this uncertainty.
The ability of the consolidated entity to continue as a going concern is dependent upon a number of critical factors, one
being the continuation and availability of funds. To this end the consolidated entity is expecting to fund its obligations
beyond the reported working capital position as follows:
The Group is actively seeking new revenue opportunities which will add value to the consolidated Group;
The Group is benefiting from cross revenue segment opportunities;
The Group has significantly reduced outstanding creditor obligations; and
The Group is actively looking for funding alternatives as the Company’s risk profile is reducing.
Cash flow forecasts prepared by management demonstrate the consolidated entity has sufficient cash flows to meet its
commitments over the next 12 months based on the above factors. For that reason, the financial statements have been
prepared on the basis that the consolidated entity is a going concern, which contemplates the continuity of normal
business activity, realisation of assets and settlement of liabilities in the normal course of business.
Sequoia Financial Group Limited - Annual Report 2016
29
For personal use only
Notes to the Financial Statements
Note 1. Summary of Significant Accounting Policies
c) Principles of Consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent (Sequoia Financial
Group Limited) and all of the subsidiaries (including any structured entities). Subsidiaries are entities the parent controls.
The parent controls an entity when it 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 over the entity. A list of the subsidiaries is provided in Note
28.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group from
the date on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the date that
control ceases. Intercompany transactions, balances and unrealised gains or losses on transactions between Group
entities are fully eliminated on consolidation. Accounting policies of subsidiaries have been changed and adjustments
made where necessary to ensure uniformity of the accounting policies adopted by the Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as “non-controlling
interests”. The Group initially recognises non-controlling interests that are present ownership interests in subsidiaries
and are entitled to a proportionate share of the subsidiary’s net assets on liquidation at either fair value or at the non-
controlling interests’ proportionate share of the subsidiary’s net assets. Subsequent to initial recognition, non-controlling
interests are attributed their share of profit or loss and each component of other comprehensive income. Non-controlling
interests are shown separately within the equity section of the statement of financial position and statement of
comprehensive income.
The consolidated financial statements have been prepared using reverse acquisition accounting. In reverse acquisition
accounting, the cost of business combination is deemed to have been incurred by the legal subsidiary Sequoia Group
Holdings Pty Ltd (the acquirer for accounting purposes) in the form of equity instruments issued to the owners of the
legal parent, Sequoia Financial Group Limited (the acquiree for accounting purposes).
d) Foreign currency translation
The financial report is presented in Australian dollars, which is Sequoia Financial Group Limited’s functional and
presentation currency.
e) Business combinations
Business combinations occur where an acquirer obtains control over one or more businesses.
A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities
or businesses under common control. The business combination will be accounted for from the date that control is
attained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed
is recognised (subject to certain limited exemptions).
When measuring the consideration transferred in the business combination, any asset or liability resulting from a
contingent consideration arrangement is also included. Subsequent to initial recognition, contingent consideration
classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent
consideration classified as an asset or liability is remeasured in each reporting period to fair value, recognising any
change to fair value in profit or loss, unless the change in value can be identified as existing at acquisition date.
All transaction costs incurred in relation to business combinations, other than those associated with the issue of a
financial instrument, are recognised as expenses in profit or loss when incurred. The acquisition of a business may result
in the recognition of goodwill or a gain from a bargain purchase.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held
equity interest in the acquire is re-measured to fair value at the acquisition date; any gains or losses arising from such
re-measurement are recognised in profit or loss.
Sequoia Financial Group Limited - Annual Report 2016
30
For personal use only
Notes to the Financial Statements
Note 1. Summary of Significant Accounting Policies (continued)
f) Income Tax
The income tax expense (income) for the year comprises current income tax expense (income) and deferred tax expense
(income). Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities
(assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the
assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted except
for:
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability
in a transaction that is not a business combination and that, at the time of the transaction, affects neither the
accounting nor taxable profits; or
When the taxable temporary difference is associated with investments in subsidiaries, associates or interests in
joint ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference
will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax relates to
items that are recognised outside profit or loss.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed each reporting date. Deferred
tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for
the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is
probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable
authority on either the same taxable entity or different taxable entity’s which intent to settle simultaneously.
Sequoia Financial Group Limited (the ‘head entity’) and its wholly-owned Australian controlled entities have formed an
income tax consolidated Group under the tax consolidation regime. The head entity and the controlled entities in the tax
consolidated Group continue to account for their own current and deferred tax amounts. The tax consolidated Group has
applied the Group allocation approach in determining the appropriate amount of taxes to allocate to member of the tax
consolidated Group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or assets)
and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the
tax consolidated Group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts
receivable from or payable to other entities in the tax consolidated Group. The tax funding arrangement ensures that the
intercompany charge equals the current tax liability or benefit of each tax consolidated Group member, resulting in neither
a contribution by the head entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.
Sequoia Financial Group Limited - Annual Report 2016
31
For personal use only
Notes to the Financial Statements
Note 1. Summary of Significant Accounting Policies (continued)
g) Fair Value of Assets and Liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis, depending
on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly (ie
unforced) transaction between independent, knowledgeable and willing market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is used to
determine fair value. Adjustments to market values may be made having regard to the characteristics of the specific asset
or liability. The fair values of assets and liabilities that are not traded in an active market are determined using one or
more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market
data.
To the extent possible, market information is extracted from either the principal market for the asset or liability (ie the
market with the greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the most
advantageous market available to the entity at the end of the reporting period (ie the market that maximises the receipts
from the sale of the asset or minimises the payments made to transfer the liability, after taking into account transaction
costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant’s ability to use the asset
in its highest and best use or to sell it to another market participant that would use the asset in its highest and best use.
The fair value of liabilities and the entity’s own equity instruments (excluding those related to share-based payment
arrangements) may be valued, where there is no observable market price in relation to the transfer of such financial
instrument, by reference to observable market information where such instruments are held as assets. Where this
information is not available, other valuation techniques are adopted and, where significant, are detailed in the respective
note to the financial statements.
h) Plant and equipment
Plant and equipment and leasehold improvements are stated at cost less accumulated depreciation and impairment. Cost
includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of
the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their
present value as at the date of acquisition.
In the event the carrying amount of plant and equipment is greater than the estimated recoverable amount, the carrying
amount is written down immediately to the estimated recoverable amount and impairment losses are recognised either in
profit or loss or as a revaluation decrease if the impairment losses relate to a revalued asset.
Depreciation is provided on plant and equipment. Depreciation is calculated on a straight line basis so as to write off the
net cost or other revalued amount of each asset over its expected useful life to its estimated residual value. The estimated
useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period.
The depreciable amounts of all fixed assets are depreciated on a reducing balance basis over their estimated useful lives
commencing from the time the asset is held ready for use.
Plant and equipment:
2016
11% to 50%
2015
11% to 50%
Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter,
using the straight line method.
i) Financial Instruments
(i) Recognition and initial measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to
the instrument. For financial assets, this is equivalent to the date that the Company commits itself to either the purchase
or sale of the asset (ie trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified
“at fair value through profit or loss”, in which case transaction costs are expensed to profit or loss immediately.
(ii) Classification and subsequent measurement
Financial instruments are subsequently measured at fair value, amortised cost using the effective interest method, or
cost.
Sequoia Financial Group Limited - Annual Report 2016
32
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Notes to the Financial Statements
Note 1. Summary of Significant Accounting Policies (continued)
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to
determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar
instruments and option pricing models.
Amortised cost is calculated as the amount at which the financial asset or financial liability is measured at initial recognition
less principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation of the difference
between that initial amount and the maturity amount calculated using the effective interest method.
The effective interest method is used to allocate interest income or interest expense over the relevant period and is
equivalent to the rate that discounts estimated future cash payments or receipts (including fees, transaction costs and
other premiums or discounts) over the expected life (or when this cannot be reliably predicted, the contractual term) of
the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future
net cash flows will necessitate an adjustment to the carrying amount with a consequential recognition of an income or
expense item in profit or loss.
Financial assets at fair value through profit or loss
Financial assets are classified at “fair value through profit or loss” when they are held for trading for the purpose of short-
term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting
mismatch or to enable performance evaluation where a Group of financial assets is managed by key management
personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets
are subsequently measured at fair value with changes in carrying amount being included in profit or loss.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market and are subsequently measured at amortised cost. Gains or losses are recognised in profit or loss through
the amortisation process and when the financial asset is derecognised.
Available-for-sale investments
Available-for-sale investments are non-derivative financial assets that are either not capable of being classified into other
categories of financial assets due to their nature or they are designated as such by management. They comprise
investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments.
They are subsequently measured at fair value with any remeasurements other than impairment losses and foreign
exchange gains and losses recognised in other comprehensive income. When the financial asset is derecognised, the
cumulative gain or loss pertaining to that asset previously recognised in other comprehensive income is reclassified into
profit or loss.
Available-for-sale financial assets are classified as non-current assets when they are expected to be sold after 12 months
from the end of the reporting period. All other available-for-sale financial assets are classified as current assets.
Financial liabilities
Non-derivative financial liabilities other than financial guarantees are subsequently measured at amortised cost. Gains
or losses are recognised in profit or loss through the amortisation process when the financial liability is derecognised.
Derivative instruments
Derivative instruments entered into by the consolidated Group include options in the equity markets. These derivative
instruments are principally used for the risk management of existing financial assets and liabilities. All derivatives,
including those used for statement of financial position hedging purposes, are recognised on the statement of financial
position and are disclosed as an asset where they have a positive fair value at balance date or as a liability where the fair
value at balance date is negative.
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and subsequently re-
measured to their fair value. Changes in the fair value of derivative instrument that does not qualify for hedge accounting
are recognised immediately in the profit or loss in commission and hedging
Sequoia Financial Group Limited - Annual Report 2016
33
For personal use only
Notes to the Financial Statements
Note 1. Summary of Significant Accounting Policies (continued)
j) Impairment of financial assets
At the end of each reporting period, the Group assesses whether there is objective evidence that a financial asset has
been impaired. A financial asset (or a Group of financial assets) is deemed to be impaired if, and only if, there is objective
evidence of impairment as a result of one or more events (a “loss event”) having occurred, which has an impact on the
estimated future cash flows of the financial asset(s).
In the case of available-for-sale financial assets, a significant or prolonged decline in the market value of the instrument
is considered to constitute a loss event. Impairment losses are recognised in profit or loss immediately. Also, any
cumulative decline in fair value previously recognised in other comprehensive income is reclassified to profit or loss at
this point.
In the case of financial assets carried at amortised cost, loss events may include: indications that the debtors or a Group
of debtors are experiencing significant financial difficulty, default or delinquency in interest or principal payments;
indications that they will enter bankruptcy or other financial reorganisation; and changes in arrears or economic conditions
that correlate with defaults.
For financial assets carried at amortised cost (including loans and receivables), a separate allowance account is used to
reduce the carrying amount of financial assets impaired by credit losses. After having taken all possible measures of
recovery, if management establishes that the carrying amount cannot be recovered by any means, at that point the written-
off amounts are charged to the allowance account or the carrying amount of impaired financial assets is reduced directly
if no impairment amount was previously recognised in the allowance account.
When the terms of financial assets that would otherwise have been past due or impaired have been renegotiated, the
Group recognises the impairment for such financial assets by taking into account the original terms as if the terms have
not been renegotiated so that the loss events that have occurred are duly considered.
k) Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value
at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Intangible assets are
subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss
arising from the derecognition of intangible assets are measured as the difference between net disposal proceeds and
the carrying amount of the intangible asset. The method and useful lives of finite life intangibles are reviewed annually.
Changes in the expected pattern of consumption or useful life are accounted for prospectively by changing the
amortisation method or period.
Goodwill
Where an entity or operation is acquired in a business combination, the identifiable net assets acquired are measured at
fair value. The excess of the fair value of the cost of acquisition over the fair value of the identifiable net assets acquired
is brought to account as goodwill. Goodwill is not amortised. Instead, goodwill is tested annually for impairment, or more
frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated
impairment losses. Impairment losses on goodwill are taken to profit or loss and are not subsequently reversed.
Australian Securities Exchange licence
The licence relating to participant status of the Australian Securities Exchange is being amortised on a straight-line basis
over a period of 5 years commencing 1 July 2011.
Impairment of non-financial assets
Goodwill and other 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 non-financial assets are reviewed 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.
Recoverable amount is the higher of an asset’s fair value less costs to sell and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together
to form a cash-generating unit.
l) Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial statements are presented in Australian dollars, which
is the parent entity’s functional currency.
Sequoia Financial Group Limited - Annual Report 2016
34
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Notes to the Financial Statements
Note 1. Summary of Significant Accounting Policies (continued)
m) Employee benefits
Wages and salaries and annual leave
Provision is made for the Group’s obligation for short-term employee benefits. Short-term employee benefits are benefits
(other than termination benefits) that are expected to be settled wholly before 12 months after the end of the annual
reporting period in which the employees render the related service, including wages, salaries and sick leave. Short-term
employee benefits are measured at the (undiscounted) amounts expected to be paid when the obligation is settled.
The Group’s obligations for short-term employee benefits such as wages, salaries and sick leave are recognised as a
part of current trade and other payables in the statement of financial position. The Group’s obligations for employees’
annual leave and long service leave entitlements are recognised as provisions in the statement of financial position.
Long service leave
Provision is made for employees’ long service leave and annual leave entitlements not expected to be settled wholly
within 12 months after the end of the annual reporting period in which the employees render the related service. Other
long-term employee benefits are measured at the present value of the expected future payments to be made to
employees. Expected future payments incorporate anticipated future wage and salary levels, durations of service and
employee departures and are discounted at rates determined by reference to market yields at the end of the reporting
period on government bonds that have maturity dates that approximate the terms of the obligations. Any remeasurements
for changes in assumptions of obligations for other long-term employee benefits are recognised in profit or loss in the
periods in which the changes occur.
The Group’s obligations for long-term employee benefits are presented as non-current provisions in its statement of
financial position, except where the Group does not have an unconditional right to defer settlement for at least 12 months
after the end of the reporting period, in which case the obligations are presented as current provisions
Defined contribution superannuation benefits
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Share-based payments
Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value
of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured,
and are recorded at the date the goods or services are received.
n) Provisions
Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result of a
past event, it is probable that the consolidated entity will be required to settle the obligation, and a reliable estimate can
be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration
required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding
the obligation. If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the
liability. The increase in the provision resulting from the passage of time is recognised as a finance cost.
o) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less.
p) Revenue and other income
Revenue is recognised when it is probable that the economic benefit will flow to the consolidated entity and the revenue
can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable.
Rendering of services
Revenue from the provision of services to customers is recognised upon delivery of the service to the customer. Revenue
received that relates to the provision for future services is accounted for as deferred income.
Interest revenue
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial
asset.
Commissions and fee income
When the consolidated entity acts in the capacity of an agent rather than as the principal in a transaction, the revenue
recognised is the net amount of commission made by the consolidated entity.
Commission and fee income is recognised as related services are performed. Where commissions and fees are subject
to the clawback or meeting certain performance hurdles, they are recognised as income at the point when those conditions
can no longer affect the outcome.
Sequoia Financial Group Limited - Annual Report 2016
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Notes to the Financial Statements
Note 1. Summary of Significant Accounting Policies (continued)
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
All revenue is stated net of the amount of goods and services tax (GST).
q) Trade Receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any provision for impairment. Trade receivables are generally due for settlement within 30 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written
off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised when there is
objective evidence that the consolidated entity will not be able to collect all amounts due according to the original terms
of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial
reorganisation and default are considered indicators that the trade receivable may be 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 immaterial. Other receivables are recognised at amortised cost, less any provision
for impairment.
r) Trade and other payables
Trade and other payables represent the liabilities for goods and services received by the Group that remain unpaid at the
end of the reporting period. The balance is recognised as a current liability with the amounts normally paid within 30 days
of recognition of the liability.
s) Borrowings
Borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are
subsequently measured at amortised cost using the effective interest method. Where there is an unconditional right to
defer settlement of the liability for at least 12 months after the reporting date, the borrowings are classified as non-current.
t) Leases
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are
recognised as expenses in the periods in which they are incurred.
Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the
lease term.
u) Goods and Services Tax (‘GST’) and other similar taxes
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is
not recoverable from the Australian Taxation Office (ATO). Receivables and payables are stated inclusive of the amount
of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with other
receivables or 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 flows included in receipts
from customers or payments to suppliers. Commitments and contingencies are disclosed net of the amount of GST
recoverable from, or payable to, the tax authority.
v) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation
for the current financial year.
Where the Group has retrospectively applied an accounting policy, made a retrospective restatement or reclassified items
in its financial statements, an additional statement of financial position as at the beginning of the earliest comparative
period will be disclosed.
w) Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumption that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates
in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates
and assumptions on historical experience and on other various factors, including expectations of future events,
management believes to be reasonable under the circumstances, the resulting accounting judgements and estimates will
seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Sequoia Financial Group Limited - Annual Report 2016
36
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Notes to the Financial Statements
Note 1. Summary of Significant Accounting Policies (continued)
(i) Provision for impairment of receivables
The provision for impairment of receivables assessment requires a degree of estimation and judgement. The level of
provision is assessed by taking into account the recent sales experience, the ageing of receivables, historical collection
rates and specific knowledge of the individual debtor’s financial position.
(ii) Fair value and hierarchy of financial instruments
The consolidated entity is required to classify financial instruments, measured at fair value, using a three level hierarchy,
being Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: 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); and Level 3: Inputs for the asset or liability that are not based on observable market data
(unobservable inputs). An instrument is required to be classified in its entirety on the basis of the lowest level of valuation
inputs that is significant to fair value. Considerable judgement is required to determine what is significant to fair value and
therefore which category the financial instrument is placed in can be subjective.
The fair value of financial instruments classified as level 3 is determined by the use of valuation models. These include
discounted cash flow analysis or the use of observable inputs that require significant adjustments based on unobservable
inputs.
(iii) Goodwill and other indefinite life intangible assets
The consolidated entity tests annually, or more frequently if events or changes in circumstances indicate impairment,
whether goodwill and other indefinite life intangible assets have suffered any impairment, in accordance with the
accounting policy stated in Note 1(k). The recoverable amounts of cash-generating units have been determined based
on value-in-use calculations. These calculations require the use of assumptions, including estimated discount rates based
on the current cost of capital and growth rates of the estimated future cash flows.
(iv) Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity considers it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
x) 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.
y) Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the consolidated
entity.
z) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Sequoia Financial Group Limited,
excluding any costs of servicing equity other than ordinary shares, by weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
Note 2. New Accounting Standards for Application in Future Periods
Accounting Standards and Interpretations issued by the AASB that are not yet mandatorily applicable to the Group,
together with an assessment of the potential impact of such pronouncements on the Group when adopted in future
periods, are discussed below:
- AASB 9: Financial Instruments and associated Amending Standards (applicable to annual reporting periods beginning
on or after 1 January 2018).
The Standard will be applicable retrospectively (subject to the provisions on hedge accounting outlined below) and
includes revised requirements for the classification and measurement of financial instruments, revised recognition and
derecognition requirements for financial instruments and simplified requirements for hedge accounting.
Sequoia Financial Group Limited - Annual Report 2016
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Notes to the Financial Statements
Note 2. New Accounting Standards for Application in Future Periods (continued)
The key changes that may affect the Group on initial application include certain simplifications to the classification of
financial assets, simplifications to the accounting of embedded derivatives, upfront accounting for expected credit loss,
and the irrevocable election to recognise gains and losses on investments in equity instruments that are not held for
trading in other comprehensive income. AASB 9 also introduces a new model for hedge accounting that will allow greater
flexibility in the ability to hedge risk, particularly with respect to hedges of non-financial items. Should the entity elect to
change its hedge policies in line with the new hedge accounting requirements of the Standard, the application of such
accounting would be largely prospective.
Although the directors anticipate that the adoption of AASB 9 may have an impact on the Group’s financial instruments,
it is impracticable at this stage to provide a reasonable estimate of such impact.
- AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods commencing on or after 1
January 2018).
When effective, this Standard will replace the current accounting requirements applicable to revenue with a single,
principles-based model. Except for a limited number of exceptions, including leases, the new revenue model in AASB 15
will apply to all contracts with customers as well as non-monetary exchanges between entities in the same line of business
to facilitate sales to customers and potential customers.
The core principle of the Standard is that an entity will recognise revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange
for the goods or services. To achieve this objective, AASB 15 provides the following five-step process:
-
-
- determine the transaction price;
- allocate the transaction price to the performance obligations in the contract(s); and
-
identify the contract(s) with a customer;
identify the performance obligations in the contract(s);
recognise revenue when (or as) the performance obligations are satisfied.
This Standard will require retrospective restatement, as well as enhanced disclosures regarding revenue.
Although the directors anticipate that the adoption of AASB 15 may have an impact on the Group’s financial statements,
it is impracticable at this stage to provide a reasonable estimate of such impact.
- AASB 16: Leases (applicable to annual reporting periods beginning on or after 1 January 2019).
When effective, this Standard will replace the current accounting requirements applicable to leases in AASB 117: Leases
and related Interpretations. AASB 16 introduces a single lessee accounting model that eliminates the requirement for
leases to be classified as operating or finance leases.
The main changes introduced by the new Standard include:
-
recognition of a right-to-use asset and liability for all leases (excluding short-term leases with less than 12 months of
tenure and leases relating to low-value assets);
- depreciation of right-to-use assets in line with AASB 116: Property, Plant and Equipment in profit or loss and unwinding
of the liability in principal and interest components;
- variable lease payments that depend on an index or a rate are included in the initial measurement of the lease liability
using the index or rate at the commencement date;
- by applying a practical expedient, a lessee is permitted to elect not to separate non-lease components and instead
account for all components as a lease; and
- additional disclosure requirements.
The transitional provisions of AASB 16 allow a lessee to either retrospectively apply the Standard to comparatives in line
with AASB 108 or recognise the cumulative effect of retrospective application as an adjustment to opening equity on the
date of initial application.
Although the directors anticipate that the adoption of AASB 16 will impact the Group's financial statements, it is
impracticable at this stage to provide a reasonable estimate of such impact.
Sequoia Financial Group Limited - Annual Report 2016
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Notes to the Financial Statements
Note 3. Operating Segments
Identification of reportable operating segments
The consolidated entity is organised into seven operating segments: trading and execution, software subscriptions, capital
markets advisory, SMSF administration, wealth advisory, investment solutions and financial news services. These
operating segments are based on the internal reports that are reviewed and used by the Board of Directors (who are
identified as the Chief Operating Decision Makers (‘CODM’)) in assessing performance and in determining the allocation
of resources. There is no aggregation of operating segments.
The information reported to the CODM is on a least a monthly basis.
Types of products and services
The principal products and services of each of these operating segments are as follows:
Trading and Execution
Software Subscriptions
Capital Markets Advisory
SMSF Administration
Wealth Advisory
Investment Solutions
Finance News Services
Provision of execution only, online trading services
Provision of financial market data and analysis tools for sophisticated investors
Provision of capital markets advice and related services
Provision of complete market solutions for SMSF
Provision of client advisory services
Provision of bespoke investment products
Provision of financial news services
All products and services are provided predominantly to customers in Australia.
Intersegment transactions
Intersegment transactions were made at cost. Intersegment transactions are eliminated on consolidation.
Intersegment receivables, payables and loans
Intersegment loans are initially recognised at the consideration received. Intersegment loans receivable and loans payable
that earn or incur non-market interest are not adjusted to fair value based on market interest rates. Intersegment loans
are eliminated on consolidation.
Sequoia Financial Group Limited - Annual Report 2016
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Notes to the Financial Statements
Note 3. Operating Segments (continued)
2016
Revenue
Segment result before impairment expense
and revaluation increments to fair value
Segment result
Trading and
Execution
Software
Subscriptions
$
$
Capital
Markets
Advisory
$
SMSF
Administration
$
8,265,683
1,291,884
701,021
1,884,922
277,144
486,914
443,828
562,550
Assets
Segment assets
Liabilities
Segment liabilities
2016
Revenue
Segment result before impairment
expense
revaluation
increments to fair value
and
3,420,738
806,369
583,219
1,872,142
1,377,180
316,884
200,453
169,163
Wealth
Advisory
Investment
Solutions
Financial
News
Services
Unallocated
Total
$
$
$
$
1,520,098
8,723,043
523,209
70,737
22,980,597
Segment result
273,027
940,665
(69,454)
(2,628,945)
285,729
Assets
Segment assets
2,357,346
18,556,296
836,685
Liabilities
Segment liabilities
1,137,639
15,751,619
184,587
-
-
28,432,795
19,137,525
Sequoia Financial Group Limited - Annual Report 2016
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Notes to the Financial Statements
Note 3. Operating Segments (continued)
2015
Revenue
Segment result before impairment expense
and revaluation increments to fair value
Impairment (Note 14)
Segment result
Assets
Segment assets
Liabilities
Segment liabilities
2015
Revenue
Segment result before impairment expense
and revaluation increments to fair value
Impairment (Note 14)
Segment result
Assets
Segment assets
Liabilities
Segment liabilities
Trading and
Execution
Software
Subscriptions
$
$
Capital
Markets
Advisory
$
SMSF
Administration
$
1,855,709
684,662
(281,873)
1,765,133
134,550
56,741
(401,873)
190,939
-
134,550
(530,000)
(473,259)
-
(401,873)
-
190,939
2,658,567
662,293
37,121
2,069,492
784,495
980,432
-
94,798
Wealth
Advisory
$
Investment
Solutions
$
Unallocated
Total
$
$
1,400,547
16,345,507
(363,392)
21,406,293
(431,937)
1,299,799
(1,869,571)
(1,021,352)
(5,883,397)
(6,315,334)
(2,000,000)
(700,201)
(8,539,463)
(10,409,034)
(16,952,860)
(17,974,212)
1,904,340
27,163,703
1,993,939
23,987,054
-
-
34,495,518
27,840,718
Sequoia Financial Group Limited - Annual Report 2016
41
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Notes to the Financial Statements
Note 4.
Revenue
Data subscriptions fees
Brokerage and commissions revenue
Superannuation product revenue
Structured product revenue
Corporate advisory fees
Media revenue
Other Income
Total operating income
Other revenue
Interest
Other
Total other revenue
Total revenue
Note 5.
Expenses
Loss before income tax includes the following specific expenses:
a) Employee benefits expense
Wages and salaries
Other employment costs
b) Depreciation
Plant and equipment
Leasehold improvements
c) Amortisation
Websites and blackhole
Regulator membership
Client list
Impairment
d)
Goodwill
Regulator membership
Consolidated
2016
$
1,320,224
9,147,216
1,881,653
8,796,832
522,363
520,255
359,610
2015
$
679,238
1,809,753
1,760,350
16,341,608
34,000
-
-
22,548,153
20,624,949
5,338
427,106
432,444
13,493
767,851
781,344
22,980,597
21,406,293
Consolidated
2016
$
3,357,611
745,855
4,103,466
20,555
9,132
29,687
8,774
-
92,400
101,174
-
30,000
30,000
2015
$
2,297,737
517,171
2,814,908
50,271
18,800
69,071
8,264
15,000
85,400
108,664
16,952,860
-
16,952,860
Total depreciation, amortisation and impairment
160,861
17,130,595
Sequoia Financial Group Limited - Annual Report 2016
42
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Notes to the Financial Statements
Note 6.
Income Tax Expense
a)
Income tax expense/ (benefit)
Income tax expense
Under provision in respect of prior year
Deferred tax
Numerical reconciliation of income tax expense to prima facie
income tax payable
Profit/ loss before income tax
Tax at the Australian rate of 30%
Tax effect amounts which are not deductible/(taxable) in
calculating taxable income:
-
Impairment of goodwill
- Accounting for reverse acquisition
- Losses not previously recognised
- Under provision in respect of prior year
-
Impact of tax cost base resetting from acquisition of Sequoia
assets
- Tax losses not brought to account
- Other non-allowable items
Income tax expense
b) Deferred tax
Consolidated
2016
Balance at 30 June 2015
Changes in the year
Balance at 30 June 2016
2015
Balance at 30 June 2014
Changes in the year
Balance at 30 June 2015
Consolidated
2016
$
2015
$
221,317
(5,459)
215,858
111,571
(458,942)
(347,371)
501,591
(18,321,583)
150,477
(5,496,475)
-
-
-
(5,459)
-
20,801
50,039
5,085,858
(418,698)
(43,890)
80,323
201,077
-
244,434
215,858
(347,371)
Deferred tax asset
Deferred tax liability
$
$
3,321,786
(839,750)
2,482,036
2,672,325
649,461
3,321,786
2,204,782
(426,737)
1,778,045
2,100,493
104,289
2,204,782
Sequoia Financial Group Limited - Annual Report 2016
43
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Notes to the Financial Statements
Note 7.
Cash and Cash Equivalents
Current
Cash at bank and on hand
Note 8.
Trade and Other Receivables
Current
Trade receivables
Related party trade receivables
Provision for impairment
Other receivables
Total trade and other receivables
Consolidated
2016
$
2015
$
812,831
613,527
Consolidated
2016
$
1,420,379
-
(33,909)
1,386,470
208,171
1,594,641
2015
$
1,672,519
836,016
(3,909)
2,504,626
77,664
2,582,290
Impairment of receivables
The Company has recognised an additional impairment to receivables in 2016 of $30,000 (2015: $3,909).
The ageing of the impaired receivables recognised above are as follows:
Over 60 days overdue
Consolidated
2016
$
2015
$
33,909
33,909
3,909
3,909
Sequoia Financial Group Limited - Annual Report 2016
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Notes to the Financial Statements
Note 8.
Trade and Other Receivables (continued)
Movements in the provision for impairment of receivables are as follows:
Opening balance
Additional provisions recognised
Closing balance
Consolidated
2016
$
3,909
30,000
33,909
2015
$
-
3,909
3,909
Past due but not impaired
Customers with balances past due but without provision for impairment of receivables amount to $187,132 as at 30 June
2016 (2015: $1,146,956). The consolidated entity did not consider a credit risk on the aggregate balances after reviewing
agency credit information and credit terms of customers based on recent collection practices. In 2015 the related party
receivables relates to Sequoia Wealth Group Pty Ltd which the Company has acquired during the year.
The ageing of the past due but not impaired receivables are as follows:
Trade receivables
31 to 60 days overdue
Over 60 days overdue
Related party receivables
31 to 60 days overdue
Over 60 days overdue
Note 9.
Derivative Instruments
Current
Derivative assets
Non-Current
Derivative assets
Total derivative assets
Current
Derivative liabilities
Non-Current
Derivative liabilities
Total derivative liabilities
Consolidated
2016
$
29,614
153,518
182,132
-
-
-
2015
$
61,482
189,458
250,940
177,996
718,020
896,016
182,132
1,146,956
Consolidated
2016
$
2015
$
883,111
5,390,430
5,278,666
6,161,777
5,499,896
10,890,326
883,111
5,390,430
5,278,666
6,161,777
5,499,896
10,890,326
The Group is party to derivative financial instruments in the normal course of business in order to hedge exposure to
fluctuations in the value of its investment products issued to the Group’s investors in accordance with the Group’s
financial risk management policies (refer to Note 22).
The Group enters into hedging instruments with financial institutions to hedge its exposure to fluctuations in the value of
its investment and loan products. The hedging instruments are fair valued by financial institutions to reflect the market
value of the hedged instruments. The hedge assets are selected so that the fair value of the hedged liabilities equates
to the fair value of the hedged assets and loans. In this way the liabilities and assets are hedged and the risk associated
with changes in market conditions has been neutralised.
Information about the Group's exposure to market risk, liquidity risk, and credit risk is disclosed in Note 22. The maximum
exposure to credit risk at the end of the reporting period is the carrying amount of each class of derivative financial assets
outlined above.
Sequoia Financial Group Limited - Annual Report 2016
45
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Notes to the Financial Statements
Note 10.
Other Assets
Current
Prepayments
Other assets
Non-current
Bonds and guarantees
Others
Note 11. Deferred Costs
Current
Deferred costs
Non-Current
Deferred costs
Total deferred costs
Consolidated
2016
$
161,038
-
161,038
1,201,250
14,402
1,215,652
2015
$
152,301
504
152,805
1,074,105
14,402
1,088,507
Consolidated
2016
$
2015
$
2,865,995
4,177,366
2,334,591
5,200,586
2,759,619
6,936,985
Deferred costs, classified as current and non-current, consists of the appropriate recognition of option premium expenses
incurred by Sequoia Specialist Investments.
Note 12. Financial Assets
Investment in listed entities
Investment in listed entities – escrowed shares
Investments in other non-listed entities
Total financial assets
Consolidated
2016
$
437,460
-
1,399,115
1,836,575
2015
$
418,747
42,501
752,000
1,213,248
Sequoia Financial Group Limited - Annual Report 2016
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Notes to the Financial Statements
Note 13. Plant and Equipment
Plant and equipment:
At cost
Accumulated depreciation
Leasehold improvements:
At cost
Accumulated depreciation
Total plant and equipment
Consolidated
2016
$
637,195
(550,880)
86,315
138,735
(70,403)
68,332
154,647
2015
$
560,674
(530,325)
30,349
61,271
(61,271)
-
30,349
Reconciliations
Reconciliation of the carrying amount of plant and equipment at the beginning and end of the current financial year as
follows:
Plant and
equipment
$
Leasehold
improvements
$
Total
$
Consolidated
Balance at 30 June 2014
Additions
Acquisition through business combinations (Note 31)
Depreciation
Balance at 30 June 2015
Additions
Acquisition through business combinations (Note 31)
Depreciation
Balance at 30 June 2016
45,263
8,699
21,952
(45,565)
30,349
43,410
33,111
(20,555)
86,315
-
45,263
-
4,237
(4,237)
-
77,464
-
(9,132)
68,332
8,699
26,189
(49,801)
30,349
120,874
33,111
(29,687)
154,647
Sequoia Financial Group Limited - Annual Report 2016
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Notes to the Financial Statements
Note 14.
Intangible Assets
Goodwill:
At cost
Accumulated impairment losses
Websites:
At cost
Accumulated amortisation
Black hole:
At cost
Accumulated amortisation
Regulator memberships and licences:
At cost
Accumulated amortisation
Customer list:
At cost
Accumulated amortisation
Total intangibles assets
Consolidated
2016
$
2015
$
25,560,156
(16,952,860)
24,334,692
(16,952,860)
8,607,296
7,381,832
72,112
(44,815)
27,297
29,912
(29,912)
-
102,500
(60,000)
42,500
413,472
(277,553)
135,919
48,556
(39,794)
8,762
29,912
(26,159)
3,753
62,500
(30,000)
32,500
413,472
(185,153)
228,319
8,813,012
7,655,166
Sequoia Financial Group Limited - Annual Report 2016
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Notes to the Financial Statements
Note 14.
Intangible Assets (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Goodwill
Websites
$
$
Regulator
membership
and licences
$
Black Hole
Client List
Total
$
$
$
Consolidated
Balance at 1 July 2015
Acquisition through
business combinations
(Note 31)
Additions
Impairment
Amortisation
Balance at 30 June 2015
Acquisition through
business combinations
(Note 31)
Additions
Impairment
Amortisation
14,734,397
-
-
8,766
292,719
15,035,881
9,600,295
-
(16,952,860)
-
7,381,832
1,225,464
-
-
-
1,838
10,175
(3,251)
8,762
-
23,556
-
(5,021)
47,500
-
(15,000)
32,500
-
40,000
(30,000)
-
-
21,000
-
(5,013)
3,753
(85,400)
228,319
9,670,633
10,175
(16,952,860)
(108,664)
7,655,166
-
-
-
(3,753)
-
-
-
(92,400)
1,225,464
63,556
(30,000)
(101,174)
Balance at 30 June 2016
8,607,296
27,297
42,500
-
135,919
8,813,012
Impairment testing
Goodwill acquired through business combinations has been allocated to the following cash generating units:
Consolidated
Sequoia Specialist Investments Pty Ltd
Sequoia Superannuation Pty Ltd
Software Subscriptions Pty Ltd
Sequoia Wealth Group Pty Ltd
Finance TV Pty Ltd
2016
$
5,162,392
1,688,608
530,832
674,686
550,778
2015
$
5,162,392
1,688,608
530,832
-
-
8,607,296
7,381,832
The recoverable amount of the consolidated entity’s goodwill has been determined by a value-in-use calculations using
a discounted cash flow model, based on a 12-month projection period approved by management and extrapolated for a
further 4 years by using key assumptions.
Key assumptions are those to which the recoverable amount of an asset or cash-generating units is most sensitive.
The following key assumptions were used in the discounted cash flow model in relation to the goodwill associated to
various cash generating units:
Sequoia Specialist Investments Pty Ltd had a revenue growth rate of 1%, with a 1% increase in direct and overhead
costs per annum and a discount rate of 15%. In 2015, goodwill associated with Sequoia Specialist Investments was
impaired by $2,000,600 due to a conservative approach taken by management.
Sequoia Superannuation Pty Ltd had a revenue growth rate of 5%, with a 2.5% increase in direct and overhead costs
per annum and a discount rate of 15%.
Software Subscriptions Pty Ltd had no revenue growth rate, with a 2.5% increase in direct and overhead costs per annum
and a discount rate of 15%. The software subscription segment was impaired in 2015 down due to the increasing number
of competitive platforms in the market.
Sequoia Wealth Group Pty Ltd had a revenue growth rate of 5%, with a 2.5% increase in direct and overhead costs per
annum and a discount rate of 15%.
The goodwill is considered to be sensitive to these assumptions and is carried in the statement of financial position at a
written-down value. Impairment has been recognised in respect of goodwill at the end of the reporting period.
Sequoia Financial Group Limited - Annual Report 2016
49
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Notes to the Financial Statements
Note 14. Intangible Assets (continued)
Websites
Websites are amortised on a straight-line basis over a period of two to five years.
Regulator membership and licences
ASX membership
The cost of acquiring D2MX Pty Ltd’s market participant status of the Australian Securities Exchange is being amortised
over a period of five years commencing from the time that the Group’s existing third-party execution facilities were
transferred to D2MX Pty Ltd in August 2011. The membership in D2MX was fully impaired in 2016.
Australian Financial Services Licence (AFSL)
During the year, Sequoia Wealth Management Pty Ltd applied for a AFSL licence. The costs involved with applying for
the licence will be amortised over a period of 5 years.
Black hole expenditure
Sequoia Asset Management Pty Ltd has got black hole expenditure relating to the Australian Financial Services Licence
(AFSL) application.
Client list
The Company has two separate clients lists: Sequoia Asset Management Pty Ltd acquired a list from JB Global Pty Ltd
and the Company acquired a separate client list from MINC and transferred it to Sequoia Direct Pty Ltd (formerly Trader
Dealer Pty Ltd). The client lists have a finite life considered to be five years, amortised on a straight-line basis. The
customer list in Sequoia Direct Pty Ltd was fully impaired in 2016.
Sensitivity analysis
The recoverable amount of the Sequoia Superannuation Pty Ltd is estimated to be $2,226,674. This exceeds the carrying
amount of the CGU at 31 June 2016 by $538,066. If the pre-tax discount rate applied to the cash flow projections of
Sequoia Superannuation was 18% instead of 15%, the recoverable amount of the CGU would equal its carrying value.
The recoverable amount of the Sequoia Specialist Investments Pty Ltd is estimated to be $8,164,998. This exceeds the
carrying amount of the CGU at 31 June 2016 by $3,002,606. If the pre-tax discount rate applied to the cash flow
projections of Sequoia Specialist Investments Pty Ltd was 20% instead of 15%, the recoverable amount of the CGU
would still exceed its carrying value.
Note 15. Trade and Other Payables
Current
Trade payables
Other payables
Accruals
Total trade and other payables
Note 16. Borrowings
Current
Convertible notes
Non-Current
Convertible notes
Total borrowings
Consolidated
2016
$
1,662,557
418,437
193,721
2,274,715
2015
$
3,297,713
262,580
621,279
4,181,572
Consolidated
2016
$
2015
$
2,060,000
-
-
2,060,000
1,860,000
1,860,000
Borrowings comprised of a number of convertible loans to the value of $2,060,000 (2015: $1,860,000). Interest is payable
at a rate of between 10.0-12.0 percent per annum. The convertible notes remain outstanding and repayable and are
anticipated to be refinanced or repaid as they mature, commencing November 2016 until the 29 January 2017.
Further information about this loan is included as part of Note 22 – Financial Risk Management.
Sequoia Financial Group Limited - Annual Report 2016
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Notes to the Financial Statements
Note 17. Deferred Revenue
Current
Deferred revenue
Non-Current
Deferred revenue
Total deferred revenue
Consolidated
2016
$
2015
$
3,491,262
5,119,825
3,043,758
6,535,020
3,303,385
8,423,210
Deferred revenue, classified as current and non-current, consists of fees paid in advance for customer subscriptions and
investment solutions.
Note 18. Employee Benefits
Current
Liability for annual leave
Liability for long service leave
Non-current
Liability for long service leave
Note 19. Contributed - Equity
4,879,870,632 (2015: 3,881,112,532) fully Paid Ordinary shares
Transaction costs
Movements in ordinary share capital
Consolidated
2016
$
205,394
165,057
370,451
32,517
32,517
2015
$
118,776
148,945
267,721
13,107
13,107
Consolidated
2016
$
26,851,001
(126,889)
26,724,112
2015
$
24,853,485
(87,600)
24,765,885
Details
Date
No of shares
Issue price
(cent)
$
Opening balance
Payment in shares
Share placement/ script
Script issue
Placement
Placement
Jun 2015
Aug 2015
Sept 2015
Oct 2015
Dec 2015
Feb 2016
3,881,112,532
59,408,100
76,000,000
375,000,000
305,850,000
182,500,000
4,879,870,632
0.20
0.20
0.20
0.20
0.20
24,853,485
118,816
152,000
750,000
611,700
365,000
26,851,001
Ordinary shares
Ordinary shares have the right to receive dividends as declared, and, in the event of winding up the Company, to
participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on
shares held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company. The shares
have no par value.
Sequoia Financial Group Limited - Annual Report 2016
51
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Notes to the Financial Statements
Note 19. Contributed – Equity (continued)
Capital risk management
The consolidated entity’s objectives when managing capital are to safeguard its ability to continue as a going concern,
so that it can provide returns to shareholders and benefits for other stakeholders and to maintain an optimum capital
structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The consolidated entity would look to raise capital when an opportunity to invest in a business or Company was seen as
value adding relative to the current parent entity’s share price at the time of the investment. The consolidated entity is
not actively pursuing additional investments in the short term as it continues to integrate and grow its existing business
in order to maximise synergies.
The consolidated entity is subject to certain financing arrangements covenants and meeting these are given priority in
all capital risk management decisions. There have been no events of default on the financing arrangements during the
financial year.
Note 20. Reserves
Available for sale reserve
Consolidated
2016
$
2015
$
177,098
(482,765)
Available-for-sale reserve records revaluation of available-for-sale financial assets.
Available-for-sale reserve
Balance at beginning of the financial year
Fair value gains on available-for-sale financial assets
Transfer from reserve to accumulated losses
Balance at end of the financial year
Accumulated losses
Balance at the beginning of the financial year
Loss after income tax expense for the year
Transfer from reserve to accumulated losses
Balance at the end of the financial year
Note 21. Dividends
Dividends
No dividends have been paid or declared during 2016 (2015: Nil)
Consolidated
2016
$
2015
$
(482,765)
(482,765)
297,645
362,218
117,098
-
-
(482,765)
(17,628,320)
345,892
320,397
(17,974,212)
(362,218)
-
(17,670,141)
(17,628,320)
2016
$
Company
2015
$
Franking credits
Franking credits available at the reporting date based on a tax
rate of 30%
3,139,720
2,985,198
Sequoia Financial Group Limited - Annual Report 2016
52
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Notes to the Financial Statements
Note 22. Financial Risk Management
The Group’s financial instruments consist mainly of deposits with banks, accounts receivable and payable, derivative
assets and liabilities, convertible notes and loans receivable and payable.
This note provides details of the Group’s financial risk management objectives and policies and describes the methods
used by management to control risk. In addition, this note includes a discussion of the extent to which financial
instruments are used, the associated risks and the business purpose served.
One of the Group’s main activities is to issue investments to its product holders which provide returns based on the
performance of an underlying reference asset, typically a single index or a single listed equity. Different underlying
reference assets, with varying features are issued in separate series. The series are exposed to securities listed on
global or local exchanges. The products issued to the product holders have a maturity of 3 years from the date of issue.
On maturity, if the investment has performed sufficiently, the product holder has the option to contribute in cash the
notional value of the investment on issue date to receive a delivery asset (a liquid security on the ASX) equal to the value
of the underlying reference asset or the value in cash of the financial liability. The Group enters into a financial instrument
with an investment bank, which hedges each series that is offered to its product holders. The Group ensures that the
notional exposure across all its products are covered via the arrangement, and as such mitigates its risk in this fashion.
General Risk Management
The Group has exposure to the following risks from its use of financial instruments:
(a) Market Risk
(b) Credit Risk
(c) Liquidity Risk
See further details in relation to each of these risks towards the end of this note.
Financial Risk Management Policies
The Board of Directors are monitoring and managing financial risk exposures of the Group. The Board of Directors
monitors the Group’s financial risk management policies and exposures and approves financial transactions within the
scope of its authority. It also reviews the effectiveness of internal controls relating to financing risk and interest rate risk.
Financial Assets
Cash and cash equivalents
Trade and other receivable
Derivative assets
Available-for-sale financial assets
Total Financial Assets
Financial Liabilities
Trade and other payables
Derivative liabilities
Convertible notes
Total Financial Liabilities
Note
2015
$
2015
$
7
8
9
12
15
9
16
812,831
1,594,641
6,161,777
1,836,575
10,405,824
2,274,715
6,161,777
2,060,000
10,496,494
613,527
2,582,290
10,890,326
1,213,248
15,299,391
4,181,572
10,890,326
1,860,000
16,931,898
Specific Financial Risk Exposures and Management
The main risks the Group are exposed to through its financial instruments are market risk, credit risk and liquidity risk.
a. Market risk
Market risk is the risk that changes in market prices, such as interest rates and foreign exchange rates will affect
the Group’s income or value of its holdings of financial instruments. The objective of market risk management is to
manage and control market risk exposures within acceptable parameters, while optimising the return on risk.
The Group issues a structures product to the product holder that is hedged with the financial instrument that it
purchases from an investment bank. The details of the financial instruments are such that the future cash flows from
the financial assets offset the cash flows needed to settle the financial liabilities. The Group uses this arrangement
to mitigate the market risks below, except for credit risk.
Sequoia Financial Group Limited - Annual Report 2016
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Notes to the Financial Statements
Note 22. Financial Risk Management (continued)
(i)
Interest rate risk
Interest rate risk is the risk that the value of the Group’s financial instruments will fluctuate due to changes in market
interest rates.
The Group’s cash and cash equivalents are exposed to Interest rate risk. Interest rate risk in the financial instruments
offset with one another, and the Directors of the Group manage the instruments to ensure that this remains the case.
Floating
Interest Rate
Non - Interest
Bearing
Fixed Rate
10-12%
Total
2016
Financial Assets
Cash and cash equivalents
812,831
- -
812,831
Trade and other receivables
-
1,594,641
-
1,594,641
Financial Liabilities
Trade and other payables
-
(2,274,715)
-
(2,274,715)
Convertible notes
Net Exposure
2015
Financial Assets
-
-
(2,060,000)
812,831
(680,074)
(2,060,000)
(2,060,000)
(1,927,243)
Cash and cash equivalents
613,527
- -
613,527
Trade and other receivables
-
2,582,290
-
2,582,290
Financial Liabilities
Trade and other payables
Convertible notes
Net Exposure
-
(4,181,572)
-
(4,181,572)
-
-
(1,860,000)
613,527
(1,599,282)
(1,860,000)
(1,860,000)
(2,845,755)
The Group is not exposed to interest rate risk on the financial assets and liabilities held through the profit and loss as the
financial asset offsets and hedges the risk of changes in interest rate for the financial liability.
The table below illustrates the sensitivity attributable to profit or loss for the year for reasonably possible changes in
interest rates:
2016
Net Exposure
+1% (Op Profit)
-1% (Op Profit)
Cash flow interest rate risk
812,831
8,128
(8,128)
2015
Net Exposure
+1% (Op Profit)
-1% (Op Profit)
Cash flow interest rate risk
613,527
6,135
(6,135)
(ii)
Price risk
Price risk arises from changes in underlying investments designated in the financial instruments held by the Group for
which values in the future are uncertain.
The Group mitigates the above price risk to ensure that price risk in the financial instruments are offset with one another.
The difference in fair value between the financial asset and liability held through profit and loss is as a result of the
premium associated with the financial liability arising from being issued in the retail market. The Group does not monitor
the price risk associated with the premium, as this would only result if the Group were to transfer the liability, and since
the Group has no intention of transferring the financial liability, no disclosures regarding the sensitivity to the risk has
been disclosed.
Sequoia Financial Group Limited - Annual Report 2016
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Notes to the Financial Statements
Note 22. Financial Risk Management (continued)
b. Credit risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised
financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the
statement of financial position and notes to the financial statements.
Credit risk is managed through the maintenance of procedures (such procedures include the utilisation of systems for
the approval, granting and renewal of credit limits, regular monitoring of exposures against such limits and monitoring of
the financial stability of significant customers and counterparties), ensuring to the extent possible, that customers and
counterparties to transactions are of sound credit worthiness. Such monitoring is used in assessing receivables for
impairment.
Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating, or in
entities that the Board of Directors has otherwise cleared as being financially sound. Where the Group is unable to
ascertain a satisfactory credit risk profile in relation to a customer or counterparty, the risk may be further managed
through title retention clauses over goods or obtaining security by way of personal or commercial guarantees over assets
of sufficient value which can be claimed against in the event of any default.
The financial products issued by Sequoia Specialist Investments Pty Ltd (Issuer) are secured obligations of the Issuer.
The issuer may not be able to meet its obligations but has granted Investors a charge which is held on trust by the
Security Trustee (Australian Equity Trustee). If the Issuer fails to (i) make a payment or delivery on its due date; or (ii)
meet any other obligation and in the Security Trustee's opinion the failure is materially adverse to the investors and
cannot be remedied (or has not been remedied within 5 business days of written notice), the Security Trustee may
enforce the charge. In this case the investors are unsecured creditors of the provider of the hedge assets. Investors'
rights of recourse against the Issuer on a default are limited to the assets subject to the charge. This structure has the
effect of passing through the credit rating of the provider of the hedge asset and protecting different financial product
series from cross-liability issues (other than on an insolvency of either the Issuer or the provider of the hedge asset). The
Issuer will only deal with investment-grade or better bank or a subsidiary of an investment-grade or better bank.
The following table details the Group’s potential exposure, should the counterparties be unable to meet their obligations:
Fair Value at
30 June 2016 Notional Value
Derivative liabilities
c. Liquidity risk
6,161,777 113,351,387
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting
its obligations related to financial liabilities. The consolidated Group manages liquidity risk by monitoring forecast cash
flows and ensuring that adequate unutilised borrowing facilities are maintained
The tables below reflect an undiscounted contractual maturity analysis for financial liabilities.
Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual timing
may therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflects
the earliest contractual settlement dates and does not reflect management’s expectations that banking facilities will be
rolled forward.
Sequoia Financial Group Limited - Annual Report 2016
55
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Notes to the Financial Statements
Note 22. Financial Risk Management (continued)
Maturity Analysis
Consolidated
Financial liabilities due for
payment
Within 1 Year
1 to 5 Years
2016
2015
$
$
2016
$
2015
$
Over 5 Years
2015
2016
$
$
Total
2016
$
2015
$
Trade and other payables
2,274,715
4,181,572
-
-
-
Derivative liabilities
883,111
5,390,430
5,278,666
5,499,896
Convertible notes
2,060,000
-
-
1,860,000
-
-
-
-
-
2,274,715
4,181,572
6,161,777
10,890,326
2,060,000
1,860,000
Total contractual outflows
Financial assets — cash
flows realisable
5,217,826
9,572,002
5,278,666
7,359,896
-
-
10,496,492
16,931,898
Cash and cash equivalents
812,831
613,527
Trade and other receivables
1,594,641
2,582,290
-
-
-
-
Derivative assets
883,111
5,390,430
5,278,666
5,499,896
-
-
-
-
-
-
812,831
613,527
1,594,641
2,582,290
6,161,777
10,890,326
Total anticipated inflows
Net (outflow)/inflow on
financial instruments
3,290,583
8,586,247
5,278,666 5,499,896
-
-
8,569,249
14,086,143
(1,927,243)
(985,755)
-
1,860,000
-
-
(1,927,243)
(2,845,755)
Fair value measurement
The following table details the consolidated entity’s fair values of financial instruments categorised by the following levels:
Level1: Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the
entity can access at the measurement date.
Level 2: Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset
or liability, either directly or indirectly.
Level 3: Measurements based on unobservable inputs for the asset or liability.
2016
Assets/ (liabilities)
Listed ordinary shares
Unlisted ordinary shares
Derivative assets
Derivative liabilities
2015
Assets/ (liabilities)
Listed ordinary shares
Unlisted ordinary shares
Derivative assets
Derivative liabilities
Level 1
Level 2
Level 3
Total
437,460
-
-
-
437,460
- -
-
6,161,777
(6,161,777)
1,399,115
437,460
1,399,115
6,161,777
(6,161,777)
-
-
-
1,399,115
1,836,575
461,248
-
-
-
461,248
- -
- 752,000
-
-
10,890,326
(10,890,326)
461,248
752,000
10,890,326
(10,890,326)
-
752,000
1,213,248
There were no transfers between levels during the financial year.
Unless otherwise stated, the carrying amounts of financial assets and liabilities reflect their fair value. The carrying
amounts of trade receivables and trade payables are assumed to approximate their fair values due to their short-term
nature. The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current
market interest rate that is available for similar financial instruments.
Sequoia Financial Group Limited - Annual Report 2016
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Notes to the Financial Statements
Note 23. Key Management Personnel Compensation
Refer to the Remuneration Report contained in the Directors Report for details of the compensation paid or payable to
each member of the Group’s key management personal (KMP) for the year ended 30 June 2016.
Short-term employee benefits
Post-employment benefits
Share based payments
Short-term employee benefits
Consolidated
2016
$
1,036,311
57,750
-
1,094,061
2015
$
839,497
47,761
120,000
1,007,258
These amounts include fees and benefits paid to the non-executive chairman as well as all salary, paid leave benefits,
fringe benefits and cash bonuses awarded to executive directors and other KMP.
Post-employment benefits
These amounts are the current-year’s estimated costs of providing for the Group’s defined benefits scheme post-
retirement, superannuation contributions made during the year and post-employment life insurance benefits.
Share-based payments
These amounts represent the expense related to the participation of KMP in equity-settled benefit schemes as measured
by the fair value of the options, rights and shares granted on grant date.
Further information in relation to KMP remuneration can be found in the Directors’ Report.
Note 24. Remuneration of Auditors
During the financial year the following fees were paid or payable for services provided by Hall Chadwick, the auditor of
the Company, and its related practices:
Consolidated
2016
$
2015
$
Audit services
Audit or review of the financial report, including licences
134,000
86,000
Other services
Tax services
Note 25. Contingent Liabilities
23,000
157,000
20,000
106,000
The consolidated entity provided a credit card facility guarantee to its bankers of $100,000 (2015: $25,000).
Other than the above, there are no contingent liabilities as at 30 June 2016 and 30 June 2015.
Sequoia Financial Group Limited - Annual Report 2016
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Notes to the Financial Statements
Note 26. Capital and Operating Leasing Commitments
Less than one year
Between one and five years
More than five years
Consolidated
2016
$
531,069
417,409
-
948,478
2015
$
138,543
33,750
-
172,293
Commitments relate to the lease of the Group’s Melbourne and Sydney premises, insurance commitments and leased
technology equipment. The property leases are a non-cancellable lease with rent payable monthly in advance.
Contingent rental provisions within the lease agreement require that minimum lease payments shall be increased by 4%
per annum. The Group has two five-year operational lease for printers; leased at a flat rate commenced in January 2013
and August 2014.
Note 27. Related Party Transactions
The Groups Main related parties are as follows
Parent entity
Sequoia Financial Group Limited is the parent entity and ultimate controlling entity.
Subsidiaries
Interests in subsidiaries are set out in Note 29.
Key management personnel
Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly
or indirectly, including any director (whether executive or otherwise) of that entity, are considered key management
personnel. Disclosures relating to key management personnel are set out in Note 23 and the Remuneration Report in
the Directors’ Report.
Transactions with related parties
The following transactions occurred with related parties which were made on normal commercial terms and conditions
no more favourable then those available to other parties unless otherwise stated.
Services payable to related parties
Payment of services to Symon Financial Services Pty Ltd (director, related entity of
Richard Symon), paid in full
Payment of services to Sarah Guy Pty Ltd (key person, related entity of Andrew
Phillips), paid in full
Accounts receivable/(payables) from/(to) related parties
Trade receivable from Sequoia Wealth Management Pty Ltd
Loans to/(from) key management personal
Trade receivable from Mr SL Beeton
Trade payable to Ms JC Khoo
Trade payable to Mr PJ Stirling
Trade payable to Mr CB Foley
Remuneration of loan to/(from) key management personal
Beginning of the year
Loan advanced to KMP
Loan advanced from KMP
Loan repayment from KMP
Loan repaid to KMP
Conversion of loan to equity
End of financial year
1 Refer to Note 31(a)
Consolidated
2016
$
2015
$
-
-
- 1
-
-
-
-
(50,923)
-
-
(87,100)
70,523
67,500
-
60,000
60,000
231
87,100
(40,000)
(27,500)
(70,523)
-
87,100
(138,023)
-
-
-
(50,923)
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Notes to the Financial Statements
Note 28. Parent Entity Information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after tax
Total comprehensive income
Statement of financial position
Total current assets
Total non- current assets
Total assets
Parent
2016
$
2015
$
(846,739)
(503,920)
(846,739)
(503,920)
11,892
12,460,829
12,472,721
260,010
11,186,816
11,446,826
Total current liabilities
3,097,755
3,376,226
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
Total equity
3,097,755
3,376,226
9,374,966
8,070,600
62,351,171
-
60,388,442
-
(52,976,205)
(52,317,842)
9,374,966
8,070,600
Contingent liabilities
There are no contingent liabilities with the parent Company as at 30 June 2016 and 30 June 2015.
Capital commitments – Plant and equipment
The parent entity had no capital commitments for property plant and equipment as at 30 June 2016 and 30 June 2015.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in Note 1,
except for investments in subsidiaries are accounted for at cost, less any impairment.
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Notes to the Financial Statements
Note 29. Subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in Note 1:
Name of entity
Subsidiaries of Sequoia Financial Group Limited
Sequoia Financial Group Limited (A)
(formerly MDS Financial Group Limited)
Sequoia Group Holdings Pty Ltd (B)
(A) Subsidiaries of Sequoia Financial Group Limited
Bourse Data Pty Ltd
The Cube Financial Group Pty Ltd
D2MX Pty Ltd
Market Data Services Pty Ltd
MDSnews.com Pty Ltd (A1)
(A1) Subsidiaries of MDSnews.com Pty Ltd
Sequoia Direct Pty Ltd
(formerly Trader Dealer Online Pty Ltd)
Finance TV Pty Ltd
(B) Subsidiaries of Sequoia Group Holdings Pty Ltd
Sequoia Superannuation Pty Ltd (B1)
Sequoia Specialist Investments Pty Ltd (B2)
Sequoia Asset Management Pty Ltd (B3)
Sequoia Lending Pty Ltd
Sequoia Funds Management Pty Ltd
Sequoia Wealth Group Pty Ltd (B4)
(B1) Subsidiaries of Sequoia Superannuation Pty Ltd
Sequoia Brisbane Pty Ltd
(B2) Subsidiaries of Sequoia Specialist Investments Pty Ltd
Sequoia Nominees No 1 Pty Ltd
(B3) Subsidiaries of Sequoia Asset Management Pty Ltd
Acacia Administrative Services Pty Ltd*
(B4) Subsidiaries of Sequoia Wealth Group Pty Ltd
Sequoia Wealth Management Pty Ltd
Sequoia Corporate Finance Pty Ltd
Country of
Incorporation
Percentage Owned
(%)
2016
2015
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100
100
100
100
100
100
100
100
100
Australia
100
Australia
50.09
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100
100
100
100
100
100
100
100
100
100
100
-
100
-
100
100
100
100
100
100
100
-
100
100
100
100
100
-
100
100
100
-
-
* Acacia Administrative Services Pty Ltd acts as a service entity for the Group with all employees engaged under this
entity.
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Notes to the Financial Statements
Note 30. Events Occurring After the Reporting Date
There were no subsequent events that occurred after the date of this report.
Note 31. Business Combinations
a. Acquisition of Sequoia Wealth Group Pty Ltd (SWG)
Summary of acquisition
On 14 October 2015, the Group acquired 100% of the issued capital of Sequoia Wealth Group Pty Ltd (“SWG”), a
financial services and wealth management Company, for a purchase consideration of $750,000. As contracted, the
financial performance of SWG was taken into the results of the Group from 1 October 2015.
The acquisition is part of the Group’s overall strategy to expand its diversified financial service offerings. Through
acquiring 100% of the issued capital of SWG, the Group has obtained control of the Company.
The purchase was satisfied by the issue of 375,000,000 ordinary shares at an issue price of $0.002 each. The issue
price was based on the market price on date of purchase.
Purchase consideration – equity issued
Less: Fair value of net assets at acquisition date
Goodwill (ii)
Fair value of net assets:
Cash
Trade and other receivables (i)
Plant and equipment
Other assets
Trade and other payables
Identifiable assets acquired and liabilities assumed
Fair Value
$
750,000
(75,314)
674,686
7,089
381,228
4,589
8,963
(326,555)
75,314
(i) The Directors believe the receivables are fully recoverable and no provision for impairment is required.
(ii) The goodwill is attributable to Sequoia Wealth Group Pty Ltd’s strong position and developing service offering which
complements the Company’s business offerings.
Net profit and revenue resulting from the acquisition of Sequoia Wealth Group Pty Ltd amounting to $2,145,171 and
$830,473 respectively are included in the consolidated statement of profit or loss and other comprehensive income for
the year ended 30 June 2016.
If the acquisition had occurred on 1 July 2015, consolidated revenue and profit for the Group for the year ended 30 June
2016 would have been $23,669,931 and $245,131 respectively.
At the time the financial statements were authorised for issue, the Group had not yet completed the accounting for
acquisition of SWG. In particular, the fair values of the net assets and liabilities disclosed above have only been
determined provisionally as the independent valuations have not been finalised.
Purchase consideration – cash inflow
Outflow of cash to acquire subsidiary, net of cash acquired
Less: Cash acquired
Inflow of cash – investing activities
$
-
(7,089)
(7,089)
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Notes to the Financial Statements
Note 31. Business Combinations (continued)
b. Acquisition of Finance TV Pty Ltd (FNN)
Summary of acquisition
In 2013, the Group acquired 11.56% of the share capital of Finance TV Pty Ltd ("FNN" or "Finance News Network"). On
12 February 2016, the Group acquired a further 38.53% of the share capital and obtained control of FNN, an independent
news organisation that specialises in both the production and distribution of financial news content, digital
communications and productions services to ASX-listed companies and manage funds. The Group now holds 50.09%
of the share capital of FNN.
As a result of the acquisition, the Group is expected to increase its presence in these markets. The goodwill of $554,789
arising from the acquisition is attributable to the acquired economies of scale expected from combining the operations of
FNN and the Group. None of the goodwill recognised is expected to be deductible for income tax purposes.
Purchase consideration – equity issued
Fair value of equity interest in FNN held before the business combination
Less Fair value of net assets at acquisition date
Goodwill
Fair value of net assets:
Cash
Trade and other receivables (i)
Plant and equipment
Trade and other payables
Employee benefits
Less: Non-controlling interest
Identifiable assets acquired and liabilities assumed
Fair Value
$
650,000
-
(99,222)
550,778
71,671
270,401
28,522
(115,314)
(57,193)
198,087
(98,865)
99,222
(i) The Directors believe the receivables are fully recoverable and no provision for impairment is required.
The acquired business contributed revenues of $523,209 and net loss of $69,454 to the Group for the period from 12
February 2016 to 30 June 2016.
If the acquisition had occurred on 1 July 2015, consolidated revenue and profit for the Group for the year ended 30 June
2016 would have been $23,738,931 and $317,156 respectively.
At the time the financial statements were authorised for issue, the Group had not yet completed the accounting for
acquisition of SWG. In particular, the fair values of the net assets and liabilities disclosed above have only been
determined provisionally as the independent valuations have not been finalised.
Purchase consideration – cash inflow
Outflow of cash to acquire subsidiary, net of cash acquired
Less: Cash acquired
Outflow of cash – investing activities
$
650,000
(71,671)
578,329
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Notes to the Financial Statements
Note 31. Business Combinations (continued)
c. Acquisition of Sequoia Group Holdings Pty Ltd (SFG)
In 2015, SEQ acquired 100% of the issued capital of Sequoia Group Holdings Pty Ltd (“SGH”). SGH is a private
Company. The acquisition was seen as an opportunity to use the existing listed Company structure of SEQ, to provide
existing shareholders of SEQ the opportunity to participate in significant future opportunities that the arrangement offers.
The acquisition was achieved following a share issue of 2,618,445,438 to SGH shareholders. Following completion, the
previous shareholders of SEQ hold 31.2% and shareholders of SGH held 68.8% respectively. As a consequence of this
and other factors, for accounting purposes the acquisition is accounted for as a reverse acquisition.
Purchase consideration
Less: Fair value of net assets at acquisition date
Goodwill (i)
Fair value of net assets:
Current assets
Non – current assets
Total assets
Current liabilities
Total liabilities
Net Assets
Fair Value
$
8,553,731
(14,268)
8,539,463
982,834
1,975,971
2,958,805
2,973,073
2,973,073
(14,268)
(i) The acquisition resulted in goodwill of $8,539,463 which has been impaired in the year ended 30 June 2015.
(ii) Receivables and payables have been included at their fair value. Directors were of the opinion that these were fully
recoverable and that no impairment of these was required.
Sequoia Financial Group Limited - Annual Report 2016
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Notes to the Financial Statements
Note 32. Reconciliation of Profit/(loss) after Income Tax to Net Cash from Operating Activities
(a) Reconciliation of loss for the year to net cash flow used in
operating activities:
Consolidated
2016
$
2015
$
Profit/(loss) for the year
285,733
(17,974,212)
Non-cash flows in operating profit/(loss):
Depreciation, amortisation and impairment
Fair value adjustment on investments
Impairment of receivables
Loss on disposal of financial assets
Share-based payments
Others
Changes in working capital and provisions:
(Increase)/decrease in trade and other receivables
(Increase)/decrease in other assets
(Increase)/decrease in deferred costs
(Increase)/decrease in deferred tax assets
(Decrease)/increase in deferred tax liability
(Decrease) in trade and other payables
(Decrease) in deferred revenue
Increase/(decrease) in income tax liabilities/assets
Increase in employee benefits
160,861
-
30,000
8,402
118,816
-
1,609,278
730
1,736,399
839,750
(802,327)
(2,348,726)
(1,963,190)
10,529
64,947
17,130,595
361,536
-
-
98,488
1,562,757
(234,479)
64,657
(649,461)
104,289
(1,487,929)
(78,969)
(745,564)
86,767
Net cash used in operating activities
(248,798)
(1,761,525)
Note 33. Earnings per Share
Earnings per share from continuing operations
Profit/ (loss) after income tax attributable to the owners of the
Company was used in calculating basic and diluted earnings per
share
Weighted average number of ordinary shares used in
calculating basic earnings per share
Adjustments for calculation of ordinary shares used in
calculating basic earnings per share:
Options
Weighted average number of ordinary shares used in
calculating diluted earnings per share
Basic earnings per share
Diluted earnings per share
Consolidated
2016
$
2015
$
320,397
(17,974,212)
Number
Number
4,479,817,035
44,948,808
360,000,000
-
4,839,817,035
44,948,808
Cents
Cents
0.008
0.007
(40.00)
(40.00)
Sequoia Financial Group Limited - Annual Report 2016
64
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Notes to the Financial Statements
Note 34. Transaction with Non-Controlling Interest
Set out below is the summarised financial information for Finance TV Pty Ltd that has non-controlling interest that are
material to the Group, before any intragroup eliminations. Note that Finance TV Pty Ltd became a controlled entity of the
Group during the reporting year ended 30 June 2016.
Summarised Financial Position
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Carrying amount of non-controlling interests
Summarised Financial Performance
Revenue
Loss after tax
Other comprehensive income after tax
Total comprehensive income
Loss attributable to non-controlling interests
Summarised Cash Flow Information
Net cash from operating activities
Net cash (used in) financing activities
Net increase in cash and cash equivalents
2016
$
230,000
28,522
(127,859)
-
130,663
64,201
523,209
73,030
-
73,030
34,664
38,327
(16,000)
22,327
Sequoia Financial Group Limited - Annual Report 2016
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Directors’ Declaration
In the directors’ opinion
the attached financial statements and notes thereto comply with the Corporations Act 2001, the Accounting
Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes thereto comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board as described in note 1 to the financial statements;
the attached financial statements and notes thereto give a true and fair view of the consolidated entity’s financial
position as at 30 June 2016 and of its performance for the year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
The directors have been given the declarations required by section 259A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5) of the Corporations Act 2001.
On behalf of the directors
Michael Carter
Chairman
31 August 2016
Sequoia Financial Group Limited - Annual Report 2016
66
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SEQUOIA FINANCIAL GROUP LIMITED
ABN 90 091 744 884
AND ITS CONTROLLED ENTITIES
AUDITOR’S INDEPENDENCE DECLARATION UNDER S 307C OF THE
CORPORATIONS ACT 2001 TO THE DIRECTORS OF
SEQUOIA FINANCIAL GROUP LIMITED
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2016
there have been no contraventions of:
i.
the auditor’s independence requirements as set out in the Corporations Act 2001 in
relation to the audit; and
ii.
any applicable code of professional conduct in relation to the audit.
HALL CHADWICK
Level 40, 2 Park Street
Sydney NSW 2000
DREW TOWNSEND
Partner
Dated: 31 August 2016
For personal use only
SEQUOIA FINANCIAL GROUP LIMITED
ABN 90 091 744 884
AND ITS CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
SEQUOIA FINANCIAL GROUP LIMITED
Report on the Financial Report
We have audited the accompanying financial report of Sequoia Financial Group Limited
and its controlled entities, which comprises the consolidated statement of financial position
as at 30 June 2016, the consolidated statement of profit or loss and other comprehensive
income, the consolidated statement of changes in equity and the consolidated statement of
cash flows for the year then ended, notes comprising a summary of significant accounting
policies and other explanatory information and the directors’ declaration of the consolidated
entity comprising the company and the entities it controlled at the year’s end or from time to
time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that
gives a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001 and for such internal control as the directors determine is necessary
to enable the preparation of the financial report that is free from material misstatement,
whether due to fraud or error. In Note 1, the directors also state, in accordance with
Accounting Standard AASB 101: Presentation of Financial Statements that the financial
statements comply with International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We
conducted our audit in accordance with Australian Auditing Standards. Those standards
require that we comply with relevant ethical requirements relating to audit engagements
and plan and perform the audit to obtain reasonable assurance whether the financial report
is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material misstatement of the financial
report, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair presentation of the
financial report in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the
directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the
Corporations Act 2001.
For personal use only
SEQUOIA FINANCIAL GROUP LIMITED
ABN 90 091 744 884
AND ITS CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
SEQUOIA FINANCIAL GROUP LIMITED
Auditor’s Opinion
In our opinion:
a.
the financial report of Sequoia Financial Group Limited and its controlled entities is in
accordance with the Corporations Act 2001, including:
i.
ii.
giving a true and fair view of the consolidated entity’s financial position as at
30 June 2016 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations
Regulations 2001; and
b.
the financial report also complies with International Financial Reporting Standards as
disclosed in Note 1.
Emphasis of Matter
Without modifying our opinion, we draw attention to Note 1(b) in the financial report, which
indicates that the consolidated entity had a working capital deficiency of $2,686,923 and
negative cash flows from operating activities of $248,798 during the year ended 30 June
2016. These conditions, along with other matters as set forth in Note 1(b), indicate the
existence of a material uncertainty that may cast significant doubt about the consolidated
entity’s ability to continue as a going concern and therefore, the consolidated entity may be
unable to realise its assets and discharge its liabilities in the normal course of business and
at the amount stated in the financial report.
Report on the Remuneration Report
We have audited the remuneration report included in pages 20 to 23 of the directors’ report
for the year ended 30 June 2016. The directors of the company are responsible for the
preparation and presentation of the remuneration report in accordance with s 300A of the
Corporations Act 2001. Our responsibility is to express an opinion on the remuneration
report, based on our audit conducted in accordance with Australian Auditing Standards.
Auditor’s Opinion
In our opinion the remuneration report of Sequoia Financial Group Limited and its
controlled entities for the year ended 30 June 2016 complies with s300A of the
Corporations Act 2001.
HALL CHADWICK
Level 40, 2 Park Street
Sydney NSW 2000
DREW TOWNSEND
Partner
Dated: 31 August 2016
For personal use only
Additional ASX Information (un-audited)
SHARE HOLDER INFORMATION
Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed
elsewhere in this report. This additional information was applicable as at 30 August 2016.
1.
Top 20 Shareholders
The names of the twenty largest shareholders of each class of listed securities are listed below:
Rank Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
BEETON ENTERPRISES PTY LTD
VISTA INVESTMENTS (NSW) PTY
PAMELA BEETON INVESTMENT PTY LTD
MR PETER STIRLING + MRS ROS STIRLING
ONE MANAGED INVT FUNDS LTD
INTERPRAC FINANCIAL PLANNING PTY LTD
AUST EXECUTOR TRUSTEES LTD
SOPHAT PTY LTD
MR BRADLEY JOHN MAGUIRE
KALI GANDAKI INVESTMENTS PTY LTD
MR HAMISH MCCATHIE
BURATU PTY LTD
AUSTRALIAN EXECUTOR TRUSTEES LIMITED
MANLY LANE PTY LTD
15.
MR RICHARD SYMON
16.
KALI GANDAKI INVESTMENTS PTY LTD
17.
JMN SERVICES PTY LTD
18.
19.
20.
TOTAL LEGEND SUPER P/L
KABILA INVESTMENTS PTY LIMITED
MR ANDREW PHILLIPS
Totals: Top 20 holders of FULLY PAID ORDINARY (TOTAL)
Total Remaining Holders Balance
2. Distribution of equity securities
Analysis of ordinary shareholders by size of holding:
Range
Total holders
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 999,999,999
1,000,000,000 - 9,999,999,999
Rounding
Total
29
6
14
106
240
1
396
Units
% of Units
1,089,618,392
22.33
407,982,375
358,606,243
223,750,000
114,000,000
104,706,501
100,000,000
97,004,676
83,070,001
83,025,000
83,025,000
80,388,999
72,500,000
71,793,466
68,666,669
66,165,797
60,000,000
60,000,000
53,500,000
53,071,429
3,330,874,548
1,548,996,084
8.36
7.35
4.59
2.34
2.15
2.05
1.99
1.70
1.70
1.70
1.65
1.49
1.47
1.41
1.36
1.23
1.23
1.10
1.09
68.26
31.74
Units
3,415
% of Issued
Capital
0.00
15,921
136,000
4,577,671
3,868,544,233
1,006,593,392
0.00
0.00
0.09
79.28
20.63
0.00
4,879,870,632
100.00
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70
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Additional ASX Information (un-audited)
3. Restricted Securities
There are no restricted securities on issue.
4. Voting Rights
The voting rights attaching to ordinary shares, set out in the Company’s Constitution are:
(a) at meetings of members, each member is entitled to vote in person or by proxy, attorney or representative; and,
(b) on a show of hands, every person present who is a member has one vote, and on a poll every member present
has a vote for each fully paid share owned.
There are no voting rights attached to un-listed ordinary shares or unlisted options, voting rights will be attached to un-
listed ordinary shares once issued and to options upon exercise.
5. On-market Buy Back
There is no current on-market buy back.
6. Review of Operations
A review of operations for the Group is set out on pages 2 to 3 and 18 to 19 of this annual report, commencing with the
Portfolio of Companies.
Sequoia Financial Group Limited - Annual Report 2016
71
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Directory
Company Directors
Mr Scott Lionel Beeton
Mr Michael Kenneth Carter
Mr Marcel John Collignon
Company Secretary
Mr Andrew Guy Phillips
Registered Office
Level 36
50 Bridge Street
Sydney NSW 2000
Telephone: + 61 2 8114 2222
Facsimile: + 61 2 8114 2200
Share Registry
Computershare Limited
Yarra Falls
452 Johnston Street
Abbotsford VIC 3067
Bankers
National Australia Bank
330 Collins Street
Melbourne VIC 3000
Westpac Australia Bank
275 George Street
Sydney NSW 2000
Auditor
Hall Chadwick
Level 40, 2 Park Street
Sydney NSW 2000
Securities Exchange
Managing Director
Non-Executive Chairman
Executive Director
The Company’s securities are quoted on the official list of the
Australian Securities Exchange Limited, the home branch
being Melbourne.
ASX Code
SEQ
Sequoia Financial Group Limited is a public Company limited
by shares incorporated and domiciled in Australia.
Sequoia Financial Group Limited - Annual Report 2016
72
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For personal use only