Appendix 4E
Preliminary final report
1. Company details
Name of entity:
Sequoia Financial Group Limited
ABN:
90 091 744 884
Reporting period:
For the year ended 30 June 2021
Previous period:
For the year ended 30 June 2020
2. Results foR announCement to the maRket
Revenues from ordinary activities
up
37.8%
to 116,462,659
$
Profit from ordinary activities after tax attributable to
the owners of Sequoia Financial Group Limited
Profit for the year attributable to the owners of
Sequoia Financial Group Limited
Dividends
Final dividend declared for the year ended 30 June 2021
Interim dividend paid for the year ended 30 June 2021
*The record date for determining entitlement to the 2021 Final
dividend is 13 September 2021 and is to be paid on 11 October
2021
up
187.1%
to
5,548,262
up
187.1%
to
5,548,262
amount per
security
Cents
franked amount per
security
Cents
0.60
0.40
0.60
0.40
3. net tangible assets
Net tangible assets per ordinary security
Calculated as follows:
Net assets
Less: Right-of-use assets
Less: Intangibles
Add: Lease liabilities
Total tangible assets
Total shares issued
Reporting period
Cents
previous period
Cents
10.44
8.08
Consolidated
2021
$
2020
$
41,117,459
33,238,582
(2,130,577)
(2,764,559)
(28,241,840)
(24,317,249)
2,979,338
13,724,380
3,632,287
9,789,061
131,507,805
121,216,770
i
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021
Appendix 4E
Preliminary final report
4. ContRol gained oveR entities
Name of entities (or group of entities)
PantherCorp CST Pty Ltd
Date control gained
1 February 2021
Contribution of such entities to the reporting entity’s profit/(loss)
from ordinary activities before income tax during the period
(where material)
Profit/(loss) from ordinary activities before income tax of the
controlled entity (or group of entities) for the whole of the previous
period (where material)
5. loss of ContRol oveR entities
$
332,982
412,340
Name of entities (or group of entities)
Interprac Finance Service Pty Ltd and Interprac Mortgage
Management Pty Ltd
Date control lost
January 2021
Contribution of such entities to the reporting entity’s profit/(loss)
from ordinary activities before income tax during the period (where
material)
Profit/(loss) from ordinary activities before income tax of the
controlled entity (or group of entities) whilst controlled during the
whole of the previous period (where material)
6. dividends
Current period
Final dividend declared for the year ended 30 June 2021
Interim dividend paid for the year ended 30 June 2021
Previous period
$
30,829
97,628
amount per
security
Cents
franked amount per
security
Cents
0.60
0.40
0.60
0.40
amount per
security
Cents
franked amount per
security
Cents
Final dividend declared for the year ended 30 June 2020
0.40
0.40
i i
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Appendix 4E
Preliminary final report
7. dividend Reinvestment plans
The Company has resolved to implement a Dividend Reinvestment Plan (‘DRP’), which will be active
for the 2021 Final Dividend. The Directors have determined that a 2.5% discount will apply to the 2021
Final Dividend. Shares allocated to shareholders under the DRP for the 2021 Final Dividend will be
allocated at an amount equal to 97.5% of the average of the daily volume weighted average market
price of ordinary shares of the Company trades on the ASX over the period of 5 trading days prior to
Friday, 1 October 2021. The last date for receipt of election notices for the dividend or distribution plan
is Friday, 1 October 2021.
8. details of assoCiates and joint ventuRe entities
Reporting entity’s
percentage holding
Contribution to profit/(loss)
(where material)
Reporting
period
previous
period
Reporting
period
previous
period
name of associate / joint venture
%
%
$
$
Taking Control Pty Ltd (joint venture)
50.00%
-
26,246
Group’s aggregate share of associates and joint
venture entities’ profit/(loss) (where material)
Profit/(loss) from ordinary activities before income tax
Income tax on operating activities
9. foReign entities
Details of origin of accounting standards used in compiling the report:
Not applicable.
10. audit qualifiCation oR Review
26,246
7,874
Details of audit/review dispute or qualification (if any):
The financial statements have been audited by the Company’s independent auditor and an
unqualified opinion has been issued.
11. attaChments
Details of attachments (if any):
The Annual Report of Sequoia Financial Group Limited for the year ended 30 June 2021 is attached.
-
-
-
i i i
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Appendix 4E
Preliminary final report
12. signed
Signed ___________________________
Date: 19 August 2021
John Larsen
Chairman
Sydney
i v
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Sequoia Financial
Group Limited
abn 90 091 744 884
Annual Report
3 0 JuN E 2021
Contents
Chief Executive Officer and Chairman’s report .............................................................................................3
Directors’ report ..................................................................................................................................................6
Auditor’s independence declaration ............................................................................................................21
Consolidated statement of profit or loss and other comprehensive income ...........................................22
Consolidated statement of financial position ...............................................................................................23
Consolidated statement of changes in equity .............................................................................................25
Consolidated statement of cash flows ..........................................................................................................26
Notes to the consolidated financial statements ...........................................................................................28
Directors’ declaration .......................................................................................................................................76
Independent auditor’s report to the members of Sequoia Financial Group Limited ...............................77
Shareholder information ................................................................................................................................. 83
Corporate directory ..........................................................................................................................................87
2
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Chief Executive Officer and Chairman’s report
30 June 2021
Dear Shareholders,
We continue to live in challenging times, with Australians forced to adapt to the unexpected
impacts of the COVID19 pandemic. This uncertainty has seen many reconsider their strategy
for spending, savings and investing.
supporting our market
The investment universe for retail investors is becoming more complex. We have witnessed
a big jump in the number of self-directed investors looking to trade shares and more
exotic types of commodities like cryptocurrencies and other shorter term, highly volatile
investments, without the appropriate training or knowledge of such instruments. I hasten to
add that these exotic and volatile investments are typically not recommendations from our
advisers, hence it is concerning that many new investors are behaving this way without any
guidance or knowledge of investment markets.
Coupled with increased complexity, the ability of advisers to provide services to all client
demographics is being hampered by ever increasing costs they are being asked to bear in
relation to matters such as compliance, professional education, and professional indemnity
insurance post the Hayne Royal Commission. This is putting pressure on the cost of their
services hence reducing the cost of professional advice has become paramount in an
adviser’s thinking.
Within our Wealth Division, our core purpose is to assist financial planners, risk insurance
advisers, accountants and third-party licensees reduce their ‘cost of servicing’ through our
synergies of scale. We are doing this at a time where the number of groups like ours has
reduced.
Our business is one of a small number of emerging businesses that has increased adviser
numbers and our business-to-business service offering is rather unique within the industry.
Some of the value-add services being provided by our Group include:
• Licensing and regulatory assistance
• Education
• Media
• Product Research
• Compliance and other administrative services
• Business coaching
• Technical support
• Technology
• Marketing
• Equity and ETO clearing and execution
• Insurance
• Finance
With the large banks and insurers recently exiting the wealth management industry there is
a growing demand of Australians who are seeking out advice for longer term solutions for
their families. This includes the intergenerational transfer of wealth taking place off the back
of very strong property prices and the increased disposable income within the baby boomer
demographic.
The baby boomers are very keen to receive advice on how to better build and protect
wealth for the so-called ‘rainy-day events’ such as retirement, estate planning, moving
3
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Chief Executive Officer and Chairman’s report
30 June 2021
parents to aged care and how to manage direct equity investments in place of passive
investments like bonds and term deposits that have historically been accessed without
advice when returns for this asset class were higher.
As mentioned however, despite this increased demand for service provision, the number of
those who provide advisory services is falling at an alarming rate. This has been particularly
noticeable in the adviser group nearing retirement age. In the last two years, the numbers of
advisers registered on the government financial advice registry has fallen sharply, and this is
expected to continue to fall to as low as 13,000 by the 2024/25 financial year.
seq’s financial performance
When reviewing our results, longer term shareholders would recall the Sequoia vision shared
in the back half of 2018 was a vision to increase the scale of all our core businesses, so each
generated a minimum return on non-cash equity of at least 15% without needing to increase
pricing to our adviser networks. The results for the full year 2021 show all four Operating
Divisions surpassed this objective, and even more pleasingly outperformed cash generation
budgets for the year by a significant margin.
Whilst revenue growth of 37% was solid, Operating Profit or EBITDA of $11.5m was well above
the $6.4m budget (without budgeting any acquisitions) we set at the start of the period.
From a consolidated viewpoint this resulted in a 28% Return on Shareholder Equity, giving us
confidence, the business model of a diversified service offering enhances profitability and
has growing demand.
Our focus is to continue building scale in each of the Operating Divisions, both organically
and through strategic bolt on acquisitions, using a mix of cash and equity to fund such
acquisitions. Throughout FY21 we paid cash of more than $2.5M for acquisitions, dividends of
$0.7M and reduced debt by more than $0.5M, whilst shareholder cash and liquid investments
increased to approximately $17M.
Despite the debt/equity ratio improving, we are determined to maintain a relatively
conservative dividend payout ratio in FY21, although we are increasing the dividend from
0.4 cents per share in FY20 to 1.0 cent per share in FY21. The main reason behind this strategy
is our intention to continue using cash as the key funding mechanism in future acquisition
opportunities, thus minimising the dilution of shareholder equity, particularly at our current
share price.
the future
One future growth focus area remains our Wealth Division, where our mission remains
increasing the numbers of advisers, we service from a current market share of around 3%
towards 8% of the reduced pool of 13,000 advisers we expect in 2025.
Our Equity Markets Division aims to continue winning market share organically at the current
rate of growth, so benefiting from the significant investment we made in 2019/20 to build a
business where our scale can drive consistent ‘toll road’ type margins once turnover exceeds
our ‘break-even volume’ each month.
Another important step for our Group is to grow the size of our Professional Services Division
over the coming years. We expect to achieve this via a mix of organic growth, cross
marketing, and bolt on acquisitions such as the recent Panthercorp acquisition in WA and
some general insurance portfolios we are targeting.
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Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Chief Executive Officer and Chairman’s report
30 June 2021
In summary, the Group is expecting to continue the last 2 years’ revenue growth rate over
the coming 12 months. Given the advice environment is seeing an increase in demand yet a
reduction in supply, we believe we are well placed to achieve this.
In addition, the trend of product and strategy further separating is very positive for the
advice industry. This improvement in the sector’s professional ethics is seeing the community
have a greater level of confidence in seeking advice, because the clear legal obligation
of each adviser is to put the client’s interest first and ensure the services provided have
measurable value.
The road to get to this point has not been an easy one for an industry that has previously
been dominated by product sales, and the move to value added professional advice is one
that Sequoia is very much supporting.
I would particularly like to thank my fellow Directors, the staff, customers, and the
shareholders that have entrusted us with their capital, to develop a robust and relevant
business offering that is making a meaningful and positive contribution to the Australian
financial services community.
Garry Crole
Managing Director/CEO
John Larsen
Chairman of the board
5
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Directors’ report
30 June 2021
The directors present their report, together with the financial statements, on the consolidated entity
(referred to hereafter as the ‘Group’) consisting of Sequoia Financial Group Limited (referred to
hereafter as the ‘Company’ or ‘parent entity’) and the entities it controlled at the end of, or during, the
year ended 30 June 2021.
diReCtoRs
The following persons were directors of Sequoia Financial Group Limited during the whole of the financial
year and up to the date of this report, unless otherwise stated:
Garry Crole
John Larsen
Kevin Pattison
Charles Sweeney
Managing Director and Chief Executive Officer
Non-Executive Director and Chairman
Non-Executive Director
Non-Executive Director
pRinCipal aCtivities
The Group’s principal activity is to offer financial planners, stockbrokers, self-directed investors,
superannuation funds and accountants a range of services that include but is not limited to licensing
services, business support and advice, coaching, compliance, education, wholesale clearing and
execution, legal document establishments, investments, media and administration services.
There was no change in the principal activities during the financial year.
dividends
Details of Dividends
Dividends paid during the financial year were as follows:
Consolidated
2021
$
2020
$
Final dividend for the year ended 30 June 2020 of 0.40 cents per ordinary share*
506,901
Interim dividend for the year ended 30 June 2021 of 0.40 cents per ordinary share**
520,097
1,026,998
* The dividend comprised of a cash dividend paid of $316,579 and dividend reinvestment allotment of $190,322
** The dividend comprised of a cash dividend paid of $403,137 and dividend reinvestment allotment of $116,960.
All dividends are fully franked.
Dividends declared
On 19 August 2021, the Company declared a final dividend for the year ended 30 June 2021 of 0.60
cents per share, fully franked. The record date for determining entitlements to the dividend is 13
September 2021 and is to be paid on 11 October 2021. The financial effect of these dividends has
not been brought to account in the financial statements for the year ended 30 June 2021 and will be
recognised in subsequent financial periods.
-
-
-
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Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Directors’ report
30 June 2021
Review of opeRations
The profit for the Group after providing for income tax amounted to $5,548,262 (30 June 2020:
$1,932,474).
Operating revenue from ordinary operating activities of the Group increased to $116,462,659, up from
$84,498,650 in the previous year, an increase of 37.8%.
Underlying Profitability
The Directors are of the view that the best guide to the Group’s performance is the underlying
normalised EBITDA or Profit which is defined as earnings before interest, tax, depreciation and
amortisation (‘EBITDA’) excluding the impact of:
• Non-operational items (i.e. acquisition-related costs, redundancy costs, impairment charges, fair value
adjustments and gains/losses on the sale of investments); and
• Non-cash amortisation charges relating to separately identifiable intangible assets acquired under
business combinations and other intangible assets.
The underlying profit over the financial year ended 30 June 2021 increased by 138.7% from $4,825,701
to $11,516,560. This was in line with the commentary provided by the Group at the 2020 annual general
meeting of shareholders where the directors outlined the 5 key focuses for the Group over a 3-year
period to 2022.
These 5 initiatives remain the core focus of your board and management teams:
(1) To generate strong cash flow from all 4 operating divisions;
(2) To provide a ROE* on non-cash equity of 15% or above;
(3) To rebuild investor confidence in the Company’s ability to generate ROE of 15%;
(4) To have the share price trading at or above equity per share; and
(5) To distribute shareholder dividend payments at 20-50% of Net Profit After Tax (‘NPAT’).
* Return on Equity (‘ROE’) is underlying profit over Total equity.
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Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Directors’ report
30 June 2021
The Company has made significant progress on each of the 5 key focuses. Operating revenue and
underlying Profit compared to the prior year are presented in the following table:
Financial Performance
2021
$
2020
$
Change
$
Change
%
Operating revenue from ordinary activities
116,462,659
84,498,650
31,964,009
Statutory NPAT
Underlying Profit*
5,548,262
1,932,474
3,615,788
11,516,560
4,825,701
6,690,859
37.8%
187.1%
138.7%
* underlying Profit or EBITDA is the measure that the Group uses to assess performance as it excludes certain non-cash and one-off or non-operational
items. Refer to the table in the next section for a reconciliation of underlying profit to Statutory NPAT.
Normalised adjustments have been applied as set out in the following reconciliation between the
Group’s underlying Profit and the Statutory NPAT for the current and prior periods:
Normalised EBITDA for the year
Add/(deduct) normalised adjustments:
Acquisition costs
Restructure costs
Share of profits of joint venture
Non-operating other income
Statutory EBITDA for the year
Adjusted for:
Consolidated
2021
$
2020
$
11,516,560
4,825,701
(316,339)
(67,738)
26,246
63,626
(74,648)
-
-
-
11,222,355
4,751,053
Interest revenue calculated using the effective interest method
15,631
109,837
Depreciation and amortisation
Finance costs
(2,879,359)
(1,812,709)
(230,836)
(166,944)
Statutory net profit before income tax for the year
8,127,791
2,881,237
Income tax expense
Statutory NPAT for the year
(2,579,529)
(948,763)
5,548,262
1,932,474
signifiCant Changes in the state of affaiRs
During the period, the Group finalised the asset acquisitions from Phillip Capital Ltd and Total Cover
Australia.
On 1 February 2021, Sequoia Financial Group successfully completed the acquisition of all shares
in PantherCorp CST Pty Ltd, a corporate legal document company based in Western Australia, for
$1.7 million, and the purchase of the customer list of First Option Financial Management Pty Ltd for
approximately $900,000. The considerations for both transactions are payable in cash and share issues
over a period of twelve months.
There were no other significant changes in the state of affairs of the Group during the financial year.
8
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Directors’ report
30 June 2021
matteRs subsequent to the end of the finanCial yeaR
On 1 July 2021, the Group announced the launch of Sequoia Family Office within the Sequoia Wealth
Group. The new business will target high net worth investors with investable funds of $5.0 million to
$100.0 million who are looking for specialist services in managing their financial affairs. On 1 July 2021,
the Group acquired the client books of Macro Investment Advisory Pty Ltd for up to $600,000. This is the
initial investment in the family office space with the aim to grow the funds under advice to $2.0 billion
over the next 5 years.
Apart from the dividend declared as discussed above, no other matter or circumstance has arisen
since 30 June 2021 that has significantly affected, or may significantly affect the Group’s operations, the
results of those operations, or the Group’s state of affairs in future financial years.
likely developments and expeCted Results of opeRations
The Group does not expect any major developments or variation to results if the Group continues to
operate as normal. However major variations would occur if the Group undertook a key strategic
initiative such as a material acquisition. Currently nothing of this nature is expected to take place in the
foreseeable future but the Group remains open to look at opportunities in this space whenever they are
presented.
enviRonmental Regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or
State law.
infoRmation on diReCtoRs
Name: garry peter Crole
Title: Managing Director and Chief Executive Officer
Experience and expertise: Garry is a highly experienced and well-regarded
Financial Services Executive. He founded Deakin Financial Planning, an ASX listed
company that was later acquired by IOOF. In more recent years, Garry started
Interprac Financial Planning Pty Ltd, which is a leading independently owned
Australian Financial Services Licensee.
Other current directorships: None
Former directorships (last 3 years): Non-Executive Director of Diversa Ltd (ASX: DVA) and Non-Executive
Director of Glennon Small Companies Limited (ASX: GC1)
Special responsibilities: Member of Risk and Compliance Committee, Audit Committee and
Remuneration and Nomination Committee
Interests in shares: 11,026,733 ordinary shares (directly held) and 965,240 ordinary shares (indirectly held)
Interests in options: 1,000,000 options
Interests in rights: None
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Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Directors’ report
30 June 2021
Name: john larsen
Title: Non-Executive Director and Chairman
Experience and expertise: John brings in excess of 30 years’ experience in
financial services to the Company, including senior management positions and
directorships across various businesses licensed to provide financial services
including funds management and stock broking. John has significant experience
in the management of private portfolios and individually managed accounts. He
was also the Chairman of Odyssey Funds Management between 2002 and 2009, part of the investment
committee responsible for ASX listed, Huntley Investment Company Limited, between 2006 and 2008
and previously held the position of Group Investment Manager at ING (then Mercantile Mutual Group)
retaining responsibility for the entire Australian investments portfolio with over $500 million of funds under
management.
Other current directorships: Non-Executive Director of Glennon Small Companies Limited (ASX: GC1)
Former directorships (last 3 years): None
Special responsibilities: Chair of Audit Committee and member of Remuneration and Nomination
Committee
Interests in shares: 103,693 ordinary shares (directly held) and 1,480,627 ordinary shares (indirectly held)
Interests in options: 1,000,000 options
Interests in rights: None
Name: kevin pattison
Title: Non-Executive Director
Experience and expertise: Kevin has over 40 years’ experience in financial
services, specialising in distribution, strategic planning and business remediation.
He has been a Non-Executive Director for the past 4 years on private companies
and prior to that he was the CEO of various large national businesses in the
financial services sector. He is currently the Chairman of Master Builders Insurance
Brokers.
Other current directorships: None
Former directorships (last 3 years): None
Special responsibilities: Chair of Remuneration and Nomination Committee and member of Risk and
Compliance Committee
Interests in shares: 542,166 ordinary shares (indirectly held)
Interests in options: 500,000 options
Interests in rights: None
1 0
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Directors’ report
30 June 2021
Name: Charles sweeney
Title: Non-Executive Director
Qualifications: B.Comm, LL.B (Melb), Partner of Cooper Grace Ward Lawyers
Experience and expertise: Charles is a partner in Cooper Grace Ward’s corporate
and commercial group. Charles provides wide-ranging general commercial
advice to clients, with particular areas of focus including corporate advisory
and intellectual property / information technology. Acting for listed and unlisted
public and private clients, Charles advises across a broad range of industries, including agribusiness,
financial services, technology and mining. Charles has served as a non-executive director of an ASX
listed company (including during its ASX listing) and has practical experience of the issues faced by
boards in relation to corporate governance, dealings with regulators (especially ASX and ASIC), major
transactions and capital raisings. Charles is also a regular presenter on such topics.
Other current directorships: None
Former directorships (last 3 years): None
Special responsibilities: Chair of Risk and Compliance Committee and member of Audit Committee
Interests in shares: 306,336 ordinary shares (indirectly held)
Interests in options: 500,000 options
Interests in rights: None
‘Other current directorships’ quoted above are current directorships for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
‘Former directorships (last 3 years)’ quoted above are directorships held in the last 3 years for listed
entities only and excludes directorships of all other types of entities, unless otherwise stated.
Company seCRetaRy
Rebecca Weir was appointed as Secretary of the Company on 9 October 2020. Rebecca is an
employee of Boardroom Pty Ltd, the Company’s Corporate Secretarial Services provider. Rebecca is an
associate member of the Governance Institute of Australia and an affiliate member of the Chartered
Governance Institute. Rebecca holds a Bachelor of Laws (LLB) with Forensic Science and has recently
completed the Graduate Diploma in Applied Corporate Governance and Risk Management.
1 1
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Directors’ report
30 June 2021
meetings of diReCtoRs
The number of meetings of the Company’s Board of Directors (‘the Board’) and of each Board
committee held during the year ended 30 June 2021, and the number of meetings attended by each
director were:
G Crole
J Larsen
K Pattison
C Sweeney
G Crole
J Larsen
K Pattison
C Sweeney
full board
audit Committee
attended
held
attended
held
8
8
8
8
Risk and Compliance
Committee
attended
held
3
-
3
3
8
8
8
8
3
-
3
3
3
3
-
3
Remuneration and nomination
Committee
attended
held
4
4
4
-
Held: represents the number of meetings held during the time the director held office or was a member of the relevant committee.
RemuneRation RepoRt (audited)
The remuneration report details the key management personnel remuneration arrangements for the
Group, in accordance with the requirements of the Corporations Act 2001 and its Regulations.
The remuneration report contains the following sections:
(a) Key management personnel covered in this report
(b) Executive reward framework
(c) Remuneration and nomination committee
(d) Non-executive directors’ arrangement
(e) Elements of remuneration
(f) use of remuneration consultants
(g) Voting and comments made at the Company’s 2020 Annual General Meeting (AGM)
(h) Details of key management personnel remuneration
(i) Service agreements
(j) Share-based compensation
(k) Other disclosures relating to key management personnel
(a) Key management personnel covered in this report
The key management personnel are defined as those persons having authority and responsibility
for planning, directing and controlling the activities of the Group, directly or indirectly, including all
directors.
3
3
-
3
4
4
4
-
1 2
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Directors’ report
30 June 2021
The key management personnel of the Group during the financial year are as follows:
• Garry Crole - Managing Director and Chief Executive Officer
• John Larsen - Chairman and Non-Executive Director
• Kevin Pattison - Non-Executive Director
• Charles Sweeney - Non-Executive Director
Other key management personnel:
• Lizzie Tan - Chief Financial Officer
(b) Executive reward framework
The objective of the Group’s executive reward framework is to ensure reward for performance is
competitive and appropriate for the results delivered. The framework aligns executive reward with the
achievement of strategic objectives and the creation of value for shareholders, and it is considered
to conform to the market best practice for the delivery of reward. The Board of Directors ensures that
executive reward satisfies the following key criteria for good reward governance practices:
• competitiveness and reasonableness;
• acceptability to shareholders;
• performance linkage / alignment of executive compensation; and
• transparency.
(c) Remuneration and Nomination Committee
The Board of Directors, through its Remuneration and Nomination Committee, accepts responsibility for
determining and reviewing remuneration arrangements for the directors and the senior management
team. The Remuneration and Nomination 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.
In accordance with best practice corporate governance, the structure of non-executive director and
executive director remuneration is separate.
(d) Non-executive directors’ arrangement
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 19 November 2020 where the shareholders approved an aggregate
remuneration of $300,000.
1 3
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Directors’ report
30 June 2021
(e) Elements of remuneration
Executive remuneration comprises:
• Fixed remuneration component;
• Variable remuneration component including short-term incentive (‘STI’)
• Variable remuneration including long-term incentive (‘LTI’); and
• An Employee Share Option Plan that 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.
Variable remuneration – short-term incentive (‘STI’)
STIs are available to executives who achieve performance criteria including compliance. The Board is
responsible for determining who is eligible to participate in STI arrangements as well as the structure of
those arrangements.
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.
Sequoia Employee Incentive Plan (‘SEIP’)
On 1 February 2017, the Company established an employee equity scheme, called the Sequoia
Employee Incentive Plan to offer options and performance rights to certain employees employed in the
Company.
(f) Use of remuneration consultants
During the financial year ended 30 June 2021, the Group did not engage remuneration consultants, to
review its existing remuneration policies and provide recommendations.
(g) Voting and comments made at the Company’s 2020 Annual General Meeting (‘AGM’)
At the 19 November 2020 AGM, 100% of the votes received supported the adoption of the remuneration
report for the year ended 30 June 2020. The Company did not receive any specific feedback at the
AGM regarding its remuneration practices.
1 4
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Directors’ report
30 June 2021
(h) Details of key management personnel remuneration
Details of the remuneration of key management personnel of the Group are set out in the following
tables.
short-term benefits
post-
employment
benefits
share-based
payments
Cash salary
and fees
$
Cash
bonus
$
directors’
fees
$
movement
in leave
entitlements
$
super-
annuation
$
options
$
total
$
89,709
-
-
-
-
-
-
63,967
64,167
-
-
-
8,522
-
-
47,769
23,884
23,884
146,000
87,851
88,051
2021
Non-Executive Directors:
J Larsen
K Pattison
C Sweeney
Managing Director:
G Crole*
378,247
60,000
Other Key Management
Personnel:
L Tan
219,178
40,000
-
-
687,134
100,000
128,134
* Cash salary and fees include expense payment of $4,547.
25,014
21,694
47,769
532,724
14,910
39,924
20,822
51,038
35,885
330,795
179,191
1,185,421
short-term benefits
post-
employment
benefits
share-based
payments
Cash salary
and fees
$
Cash
bonus
$
directors’
fees
$
movement
in leave
entitlements
$
super-
annuation
$
options
$
total
$
73,059
-
-
-
-
-
-
55,000
55,000
-
-
-
6,941
-
-
2020
Non-Executive Directors:
J Larsen
K Pattison
C Sweeney
Managing Director:
G Crole*
340,558
50,000
Other Key Management
Personnel:
L Tan**
30,942
5,769
-
-
444,559
55,769
110,000
31,726
21,003
3,952
35,678
2,939
30,883
* Cash salary and fees include expense payment of $792.
** Remuneration from date of appointment 23 April 2020 to 30 June 2020.
-
-
-
-
-
-
80,000
55,000
55,000
443,287
43,602
676,889
1 5
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Directors’ report
30 June 2021
The proportion of remuneration linked to performance and the fixed proportion are as follows:
name
2021
2020
2021
2020
2021
2020
fixed remuneration
at risk - sti
at risk - lti
Non-Executive Directors:
J Larsen
K Pattison
C Sweeney
Managing Director:
G Crole
Other Key Management
Personnel:
67%
73%
73%
100%
100%
100%
-
-
-
-
-
-
33%
27%
27%
80%
89%
11%
11%
9%
L Tan
77%
87%
12%
13%
11%
-
-
-
-
-
(i) Service agreements
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 one to three months’ notice required for termination by either party.
(j) Share-based compensation
Issue of shares, options and performance rights
During the year, options were granted to the directors and other key management personnel of the
Company as part of their compensation. The number of options over ordinary shares in the Company
held during the financial year by each director and the other member of the key management
personnel of the Group, including their personally related parties, is set out below:
balance at
the start of
the year
granted
exercised
expired/
forfeited/
other
balance at
the end of
the year
Options over ordinary shares
G Crole
J Larsen
K Pattison
C Sweeney
L Tan
-
-
-
-
-
-
1,000,000
1,000,000
500,000
500,000
500,000
3,500,000
-
-
-
-
-
-
-
-
-
-
-
-
1,000,000
1,000,000
500,000
500,000
500,000
3,500,000
1 6
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Directors’ report
30 June 2021
(k) Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each director and the other
member of the key management personnel of the Group, including their personally related parties, is set
out below:
Ordinary shares
G Crole*
J Larsen*
K Pattison
C Sweeney*
L Tan*
balance at
the start of
the year
Received
as part of
remuneration
additions
disposals/
other
balance at
the end of
the year
11,747,286
1,551,549
542,166
300,000
52,500
14,193,501
-
-
-
-
-
-
244,687
32,771
-
6,336
469
284,263
-
-
-
-
-
-
11,991,973
1,584,320
542,166
306,336
52,969
14,477,764
* Shares acquired via on-market trade or dividend re-investment plan.
Transactions with key management personnel and their related parties
During the financial year, $71,726 was paid or payable for services provided by Cooper Grace Ward, a
related party entity of director, Charles Sweeney.
This concludes the remuneration report, which has been audited.
1 7
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Directors’ report
30 June 2021
shares under option
unissued ordinary shares of Sequoia Financial Group Limited under option at the date of this report are
as follows:
grant date
19 November 2020 Type 1
19 November 2020 Type 2
18 January 2021 Type 1
18 January 2021 Type 2
expiry date
30 June 2022
30 June 2024
30 June 2022
30 June 2024
exercise price
number under option
$0.360
$0.450
$0.360
$0.450
1,500,000
1,500,000
650,000
500,000
4,150,000
No person entitled to exercise the options had or has any right by virtue of the option to participate in
any share issue of the Company or of any other body corporate.
shaRes undeR peRfoRmanCe Rights
There were no unissued ordinary shares of Sequoia Financial Group Limited under performance rights
outstanding at the date of this report.
shaRes issued on the exeRCise of options
The following ordinary shares of Sequoia Financial Group Limited were issued during the year ended 30
June 2021 and up to the date of this report on the exercise of options granted:
date options granted
16 March 2021
exercise price
number of shares issued
$0.300
1,000,000
shaRes issued on the exeRCise of peRfoRmanCe Rights
The following ordinary shares of Sequoia Financial Group Limited were issued during the year ended 30
June 2021 and up to the date of this report on the exercise of performance rights granted:
date performance rights granted
share price as at date of exercise
number of shares issued
9 July 2020
19 July 2021
$0.270
$0.620
97,500
97,500
195,000
indemnity and insuRanCe of offiCeRs
The Company has indemnified the directors and executives of the Company for costs incurred, in their
capacity as a director or executive, for which they may be held personally liable, except where there is
a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors
and executives of the Company against a liability to the extent permitted by the Corporations Act
2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the
premium.
1 8
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Directors’ report
30 June 2021
indemnity and insuRanCe of auditoR
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify
the auditor of the Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the
auditor of the Company or any related entity.
pRoCeedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene in any proceedings to which the Company
is a party for the purpose of taking responsibility on behalf of the Company for all or part of those
proceedings.
non-audit seRviCes
Details of the amounts paid or payable to the auditor for non-audit services provided during the
financial year by the auditor are outlined in note 26 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the
auditor (or by another person or firm on the auditor’s 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 26 to the financial statements do
not compromise the external auditor’s independence requirements of the Corporations Act 2001 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 APES 110 Code of Ethics for Professional Accountants (including Independence Standards) issued
by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the
auditor’s 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.
1 9
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Directors’ report
30 June 2021
auditoR’s independenCe deClaRation
A copy of the auditor’s independence declaration as required under section 307C of the Corporations
Act 2001 is set out immediately after this directors’ report.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the
Corporations Act 2001.
On behalf of the directors
___________________________
John Larsen
Chairman
19 August 2021
Melbourne
2 0
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Auditor’s independence declaration
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 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 2021
there have been:
— no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
— no contraventions of any applicable code of professional conduct in relation to the
audit.
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
N. S. Benbow
Director
Melbourne, 19 August 2021
2 1
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021
Consolidated statement of profit or loss and other comprehensive income
Revenue
expenses
Data fees
Dealing and settlement
Commission and hedging
Employee benefits
Occupancy
Telecommunications
Marketing
General and administrative
Operating profit
Interest revenue calculated using the effective interest method
Share of profits of joint venture accounted for using the equity method
Restructure costs
Non-operating other income
Depreciation and amortisation
Acquisition costs
Finance costs
Profit before income tax expense
Income tax expense
Profit after income tax expense for the year attributable to the owners of
sequoia financial group limited
other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Gain/(loss) on the revaluation of financial assets at fair value through other
comprehensive income, net of tax
Other comprehensive income for the year, net of tax
total comprehensive income for the year attributable to the owners of
sequoia financial group limited
Basic earnings per share
Diluted earnings per share
Consolidated
note
2021
$
2020
$
5
116,462,659
84,498,650
(1,648,306)
(1,643,769)
(17,848,953)
(10,834,498)
(63,076,085)
(50,151,379)
6
(14,973,184)
(11,573,780)
(289,670)
(316,390)
(1,665,917)
(1,408,483)
(304,714)
(331,463)
(5,139,272)
(3,408,769)
11,516,558
4,830,119
15,631
26,246
(67,738)
63,626
109,837
-
-
-
(2,879,357)
(1,817,127)
(316,339)
(74,648)
(230,836)
(166,944)
8,127,791
2,881,237
(2,579,529)
(948,763)
5,548,262
1,932,474
6
6
6
7
93,889
93,889
(35,801)
(35,801)
5,642,151
1,896,673
Cents
Cents
33
33
4.324
4.188
1.607
1.591
The above consolidated statement of profit or loss and other comprehensive income should be read
in conjunction with the accompanying notes
2 2
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Consolidated statement of financial position
assets
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets and deferred costs
Inventories
Other current financial assets
Derivative financial instruments
Deposits
Prepayments
Total current assets
non-current assets
Contract assets and deferred costs
Investments accounted for using the equity method
Derivative financial instruments
Other non-current financial assets
Plant and equipment
Right-of-use assets
Intangibles
Deferred tax
Deposits
Total non-current assets
total assets
Consolidated
note
2021
$
2020
$
8
9
10
11
9
11
12
13
14
7
34,643,167
32,858,840
7,797,637
37,259
1,797,447
9,202,491
-
881,331
22,961,750
12,250,064
8,989,093
6,875
443,759
2,928,246
455,854
877,740
87,218,172
48,913,381
3,316,919
51,246
13,074,689
62,322
1,534,735
2,130,577
5,820,757
-
9,695,887
110,546
1,712,799
2,764,559
28,241,840
24,317,249
6,056,870
723,738
7,267,653
678,448
55,192,936
52,367,898
142,411,108
101,281,279
The above consolidated statement of financial position should be read in conjunction
with the accompanying notes
2 3
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Consolidated statement of financial position
liabilities
Current liabilities
Trade and other payables
Contract liabilities and deferred revenue
Borrowings
Lease liabilities
Derivative financial instruments
Income tax payable
Employee benefits
Contingent consideration
Total current liabilities
non-current liabilities
Contract liabilities and deferred revenue
Lease liabilities
Derivative financial instruments
Deferred tax
Employee benefits
Contingent consideration
Client trading and security bond
Total non-current liabilities
total liabilities
net assets
equity
Issued capital
Reserves
Accumulated losses
total equity
Consolidated
note
2021
$
2020
$
15
16
17
18
11
19
16
18
11
7
19
20
21
51,028,728
10,602,740
317,253
785,499
9,202,491
1,349,648
1,453,637
1,400,000
22,380,247
12,637,235
662,414
682,415
2,928,246
961,932
727,467
957,701
76,139,996
41,937,657
4,205,041
2,193,839
13,074,689
3,967,939
288,687
479,350
944,108
7,977,273
2,949,872
9,695,887
4,903,818
98,840
479,350
-
25,153,653
26,105,040
101,293,649
41,117,459
68,042,697
33,238,582
51,524,175
48,497,215
765,224
434,571
(11,171,940)
(15,693,204)
41,117,459
33,238,582
The above consolidated statement of financial position should be read in conjunction
with the accompanying notes
2 4
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Consolidated statement of changes in equity
Consolidated
issued
capital
$
financial
assets at fair
value
reserve
$
share-
based
payments
reserve
$
accumulated
losses
$
total
equity
$
Balance at 1 July 2019
48,025,034
430,308
149,400
(17,625,678)
30,979,064
Profit after income tax expense for the year
Other comprehensive income for the year,
net of tax
Total comprehensive income for the year
Transactions with owners in their capacity
as owners:
Contributions of equity, net of transaction costs
(note 20)
Vesting of share-based payments
Share-based payments forfeited
-
-
-
-
(35,801)
(35,801)
472,181
-
-
-
-
-
-
-
-
-
(38,025)
(71,311)
1,932,474
1,932,474
-
(35,801)
1,932,474
1,896,673
-
-
-
472,181
(38,025)
(71,311)
Balance at 30 June 2020
48,497,215
394,507
40,064
(15,693,204)
33,238,582
Consolidated
issued
capital
$
financial
assets at fair
value
reserve
$
share-
based
payments
reserve
$
accumulated
losses
$
total
equity
$
Balance at 1 July 2020
48,497,215
394,507
40,064
(15,693,204)
33,238,582
Profit after income tax expense for the year
Other comprehensive income for the year,
net of tax
Total comprehensive income for the year
Transactions with owners in their capacity
as owners:
Contributions of equity, net of transaction costs
(note 20)
Vesting of share-based payments
Dividends paid (note 22)
-
-
-
3,000,635
26,325
-
-
93,889
93,889
-
-
-
-
-
-
-
236,764
5,548,262
5,548,262
-
93,889
5,548,262
5,642,151
-
-
3,000,635
263,089
-
(1,026,998)
(1,026,998)
Balance at 30 June 2021
51,524,175
488,396
276,828
(11,171,940)
41,117,459
The above consolidated statement of changes in equity should be read in conjunction
with the accompanying notes
2 5
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Consolidated statement of cash flows
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Net cash from client related operations
Interest received
Interest and other finance costs paid
Income taxes paid
Net cash from operating activities
Cash flows from investing activities
Payment for purchase of business, net of cash acquired
Payments for investments
Payments for plant and equipment
Payments for asset acquisitions
Proceeds from disposal of investments
Proceeds of distribution from investment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from exercise of options
Repayment of borrowings
Repayment of lease liabilities
Dividends paid
Consolidated
note
2021
$
2020
$
118,961,645
83,180,817
(108,043,943)
(80,852,728)
7,986,328
7,234,413
18,904,030
15,631
(104,276)
9,562,502
109,837
(166,944)
(2,088,199)
(1,509,427)
16,727,186
7,995,968
(366,963)
(983,447)
(347,939)
(2,351,060)
621,787
15,000
(1,031,350)
(70,546)
(546,893)
(855,950)
89,649
-
(3,412,622)
(2,415,090)
300,000
(345,161)
(863,837)
(724,149)
-
(860,469)
(610,688)
-
32
30
12
22
Net cash used in financing activities
(1,633,147)
(1,471,157)
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
11,681,417
22,961,750
4,109,721
18,852,029
Cash and cash equivalents at the end of the financial year
34,643,167
22,961,750
The above consolidated statement of cash flows should be read in conjunction
with the accompanying notes
2 6
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Consolidated statement of cash flows
Cash and cash equivalents
Cash at bank*
Client funds**
Consolidated
2021
$
2020
$
13,692,472
20,950,695
12,490,845
10,470,905
34,643,167
22,961,750
* The Group holds cash reserves which are required to meet its broker licensing conditions. The conditions of the license, amongst other requirements,
mandate that its wholly owned subsidiary, Morrison Securities, must maintain at all times core capital greater than $7,500,000 (30 June 2020: $7,500,000),
where at least 90% of this core capital is cash at bank.
** Client funds are not available for general use by the Group.
The above consolidated statement of cash flows should be read in conjunction
with the accompanying notes
2 7
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 note 1. geneRal infoRmation
The financial statements cover Sequoia Financial Group Limited as a Group consisting of Sequoia
Financial Group Limited (‘Company’ or ‘parent entity’) and the entities it controlled at the end of, or
during, the year (referred to in these financial statements as the ‘Group’). The financial statements are
presented in Australian dollars, which is Sequoia Financial Group Limited’s functional and presentation
currency.
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 are:
Registered office
principal place of business
Level 7
Level 8
7 Macquarie Place
525 Flinders Street
Sydney NSW 2000
Melbourne VIC 3000
A description of the nature of the Group’s operations and its principal activities are included in the
directors’ report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 19
August 2021. The directors have the power to amend and reissue the financial statements.
note 2. signifiCant aCCounting poliCies
The principal accounting policies adopted in the preparation of the financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise stated.
new or amended accounting standards and interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued
by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting
period. The adoption of these Accounting Standards and Interpretations did not have any significant
impact on the financial performance or position of the Group.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not
been early adopted.
basis of preparation
These general purpose financial statements have been prepared in accordance with Australian
Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’)
and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements
also comply with International Financial Reporting Standards as issued by the International Accounting
Standards Board (‘IASB’).
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where
applicable, the revaluation of financial assets at fair value through other comprehensive income,
financial assets and liabilities at fair value through profit or loss and derivative financial instruments.
2 8
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 2. signifiCant aCCounting poliCies (Continued)
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It
also requires management to exercise its judgement in the process of applying the Group’s accounting
policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions
and estimates are significant to the financial statements, are disclosed in note 3.
parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the
Group only. Supplementary information about the parent entity is disclosed in note 29.
principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Sequoia
Financial Group Limited as at 30 June 2021 and the results of all subsidiaries for the year then ended.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when
the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. They are de-consolidated from
the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the
Group are eliminated. unrealised losses are also eliminated unless the transaction provides evidence of
the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change
in ownership interest, without the loss of control, is accounted for as an equity transaction, where the
difference between the consideration transferred and the book value of the share of the non-controlling
interest acquired is recognised directly in equity attributable to the parent.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities
and non-controlling interest in the subsidiary together with any cumulative translation differences
recognised in equity. The Group recognises the fair value of the consideration received and the fair
value of any investment retained together with any gain or loss in profit or loss.
operating segments
Operating segments are presented using the ‘management approach’, where the information
presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers
(‘CODM’). The CODM is responsible for the allocation of resources to operating segments and assessing
their performance.
2 9
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 2. signifiCant aCCounting poliCies (Continued)
Revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected
to be entitled in exchange for transferring goods or services to a customer. For each contract
with a customer, the Group: identifies the contract with a customer; identifies the performance
obligations in the contract; determines the transaction price which takes into account estimates of
variable consideration and the time value of money; allocates the transaction price to the separate
performance obligations on the basis of the relative stand-alone selling price of each distinct good or
service to be delivered; and recognises revenue when or as each performance obligation is satisfied in
a manner that depicts the transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer
such as discounts, rebates and refunds, any potential bonuses receivable from the customer and any
other contingent events. Such estimates are determined using either the ‘expected value’ or ‘most
likely amount’ method. The measurement of variable consideration is subject to a constraining principle
whereby revenue will only be recognised to the extent that it is highly probable that a significant reversal
in the amount of cumulative revenue recognised will not occur. The measurement constraint continues
until the uncertainty associated with the variable consideration is subsequently resolved. Amounts
received that are subject to the constraining principle are recognised as a refund liability.
Timing of revenue recognition
Sequoia Equity Markets Group: A business in this Group offers structured products to investors seeking
exposure to investment opportunities. Management determined after lengthy evaluation that there
are different types of structured product revenue. Each revenue type has numerous and distinct
performance obligations, which allows for a different treatment to each of these revenue streams.
The different revenue streams include:
• application fee revenue is recognised up-front (upon execution of delivery of product to the
customer) and is non-refundable;
• structured product revenue is released over the duration of the contract as it is earned over a period
of time (duration of the contract); and
• coupon premium revenue is earned upon completion of the contract, as it is earned upon concluding
the contract (conclusion of contract).
The costs of entering into the contract with wholesale counter parties are matched to the revenue
streams.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of
calculating the amortised cost of a financial asset and allocating the interest income over the relevant
period using the effective interest rate, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
3 0
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 2. signifiCant aCCounting poliCies (Continued)
Other revenue from client services
Revenues from other services, including brokerage, financial planning, superannuation and corporate
advisory services are performed as they are rendered to the customer, net of any commissions. For
brokerage, this occurs upon the date of settlement of clearing the underlying transaction on behalf of
the client. For corporate advisory income relating to a transaction, this occurs upon the execution of
the transaction. Where corporate advisory services relate to fees earned under a retainer agreement,
revenue is accrued pro-rata according to the servicing of that retainer.
Government grants
Government grants claimed during the COVID pandemic were reported as received and deducted
from employee benefit expenses. Refer to note 6 for further information.
Contract assets and contract liabilities
Contract assets relate to contract costs and contract liabilities relate primarily to structured product
revenues. The contract assets represent costs deferred and contract liabilities represent revenue
deferred due to recognition requirements where the revenue and cost are spread over the product life.
income tax
The income tax expense or benefit for the period is the tax payable on that period’s taxable income
based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred
tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment
recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected
to be applied 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 interests in subsidiaries, associates or 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.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at 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 entities
which intend to settle simultaneously.
3 1
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 2. signifiCant aCCounting poliCies (Continued)
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-
current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or
consumed in the Group’s normal operating cycle; it is held primarily for the purpose of trading; it
is expected to be realised within 12 months after the reporting period; or the asset is cash or cash
equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after
the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group’s normal operating
cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the
reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12
months after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other
short-term, highly liquid investments with original maturities of three months or less that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost
using the effective interest method, less any allowance for expected credit losses. Trade receivables are
generally due for settlement within 30 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a
lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been
grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
derivative financial instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and
are subsequently remeasured to their fair value at each reporting date. The accounting for subsequent
changes in fair value depends on whether the derivative is designated as a hedging instrument, and if
so, the nature of the item being hedged.
Derivatives are classified as current or non-current depending on the expected period of realisation,
based upon the maturity date set in the underlying derivative agreement.
3 2
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 2. signifiCant aCCounting poliCies (Continued)
joint ventures
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement
have rights to the net assets of the arrangement. Investments in joint ventures are accounted for
using the equity method. under the equity method, the share of the profits or losses of the joint
venture is recognised in profit or loss and the share of the movements in equity is recognised in other
comprehensive income. Investments in joint ventures are carried in the statement of financial position
at cost plus post-acquisition changes in the Group’s share of net assets of the joint venture. Goodwill
relating to the joint venture is included in the carrying amount of the investment and is neither amortised
nor individually tested for impairment. Distributions received from joint venture entities reduce the
carrying amount of the investment.
investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included
as part of the initial measurement, except for financial assets at fair value through profit or loss. Such
assets are subsequently measured at either amortised cost or fair value depending on their classification.
Classification is determined based on both the business model within which such assets are held and
the contractual cash flow characteristics of the financial asset unless an accounting mismatch is being
avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been
transferred and the Group has transferred substantially all the risks and rewards of ownership. When
there is no reasonable expectation of recovering part or all of a financial asset, its carrying value is
written off.
Financial assets at amortised cost
A financial asset is measured at amortised cost only if both of the following conditions are met: (i) it is
held within a business model whose objective is to hold assets in order to collect contractual cash flows;
and (ii) the contractual terms of the financial asset represent contractual cash flows that are solely
payments of principal and interest.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income
are classified as financial assets at fair value through profit or loss. Typically, such financial assets will be
either: (i) held for trading, where they are acquired for the purpose of selling in the short-term with an
intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition where
permitted. Fair value movements are recognised in profit or loss.
3 3
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 2. signifiCant aCCounting poliCies (Continued)
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial assets which are either
measured at amortised cost or fair value through other comprehensive income. The measurement of
the loss allowance depends upon the Group’s assessment at the end of each reporting period as to
whether the financial instrument’s credit risk has increased significantly since initial recognition, based on
reasonable and supportable information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a
12-month expected credit loss allowance is estimated. This represents a portion of the asset’s lifetime
expected credit losses that is attributable to a default event that is possible within the next 12 months.
Where a financial asset has become credit impaired or where it is determined that credit risk has
increased significantly, the loss allowance is based on the asset’s lifetime expected credit losses. The
amount of expected credit loss recognised is measured on the basis of the probability weighted present
value of anticipated cash shortfalls over the life of the instrument discounted at the original effective
interest rate.
For financial assets mandatorily measured at fair value through other comprehensive income, the loss
allowance is recognised in other comprehensive income with a corresponding expense through profit
or loss. In all other cases, the loss allowance reduces the asset’s carrying value with a corresponding
expense through profit or loss.
plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment.
Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of plant and
equipment (excluding land) over their expected useful lives as follows:
Leasehold improvements
Plant and equipment
Over the term of the lease
3 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at
each reporting date.
An item of plant and equipment is derecognised upon disposal or when there is no future economic
benefit to the Group. Gains and losses between the carrying amount and the disposal proceeds are
taken to profit or loss.
3 4
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 2. signifiCant aCCounting poliCies (Continued)
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is
measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable,
any lease payments made at or before the commencement date net of any lease incentives received,
any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of
costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site
or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. Where the Group expects to obtain ownership
of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of
use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-
term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these
assets are expensed to profit or loss as incurred.
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. Finite life 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 intangible assets 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
Goodwill arises on the acquisition of a business. 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.
Customer list
Customer lists are amortised on a straight-line basis over their finite life. The finite life is the period of
expected benefit, which ranges from 5 to 20 years depending on factors such as, their significance to
the Group, acquisition consideration and estimated customer turnover.
Regulatory memberships and licences
Costs in relation to regulatory memberships and licences are capitalised as an asset. These costs are
not subsequently amortised but reviewed annually for impairment. Management considers regulatory
memberships and licences to have indefinite useful lives because the potential to generate cash flows is
unlimited.
3 5
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 2. signifiCant aCCounting poliCies (Continued)
Impairment of non-financial assets
Goodwill is not subject to amortisation and is 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 of disposal 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.
trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the
financial year and which are unpaid. Due to their short-term nature, they are measured at amortised
cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of
recognition.
borrowings
Loans and 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.
The component of the convertible notes that exhibits characteristics of a liability is recognised as a
liability in the statement of financial position, net of transaction costs.
On the issue of the convertible notes the fair value of the liability component is determined using
a market rate for an equivalent non-convertible bond and this amount is carried as a non-current
liability on the amortised cost basis until extinguished on conversion or redemption. The increase in the
liability due to the passage of time is recognised as a finance cost. The remainder of the proceeds
are allocated to the conversion option that is recognised and included in shareholders equity as a
convertible note reserve, net of transaction costs. The carrying amount of the conversion option is not
remeasured in the subsequent years. The corresponding interest on convertible notes is expensed to
profit or loss.
lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially
recognised at the present value of the lease payments to be made over the term of the lease,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined,
the Group’s incremental borrowing rate. Lease payments comprise of fixed payments less any lease
incentives receivable, variable lease payments that depend on an index or a rate, amounts expected
to be paid under residual value guarantees, exercise price of a purchase option when the exercise
of the option is reasonably certain to occur, and any anticipated termination penalties. The variable
lease payments that do not depend on an index or a rate are expensed in the period in which they are
incurred.
3 6
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 2. signifiCant aCCounting poliCies (Continued)
Lease liabilities are measured at amortised cost using the effective interest method. The carrying
amounts are remeasured if there is a change in the following: future lease payments arising from a
change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and
termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding
right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave
expected to be settled wholly within 12 months of the reporting date are measured at the amounts
expected to be paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the
reporting date are measured at the present value of expected future payments to be made in respect
of services provided by employees up to the reporting date. Consideration is given to expected future
wage and salary levels, experience of employee departures and periods of service. Expected future
payments are discounted using market yields at the reporting date on high-quality corporate bonds with
terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure
purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants at the measurement date; and assumes
that the transaction will take place either: in the principal market; or in the absence of a principal
market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset
or liability, assuming they act in their economic best interests. For non-financial assets, the fair value
measurement is based on its highest and best use. Valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair value, are used, maximising
the use of relevant observable inputs and minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy
that reflects the significance of the inputs used in making the measurements. Classifications are
reviewed at each reporting date and transfers between levels are determined based on a reassessment
of the lowest level of input that is significant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal
expertise is either not available or when the valuation is deemed to be significant. External valuers are
selected based on market knowledge and reputation. Where there is a significant change in fair value
of an asset or liability from one period to another, an analysis is undertaken, which includes a verification
of the major inputs applied in the latest valuation and a comparison, where applicable, with external
sources of data.
3 7
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 2. signifiCant aCCounting poliCies (Continued)
issued capital
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.
dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of
the Company.
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 the
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.
goods and services tax (‘gst’) and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST
incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the
acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net
amount of GST recoverable from, or payable to, the tax authority is included in other receivables or
other payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing
or financing activities which are recoverable from, or payable to the tax authority, are presented as
operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable
to, the tax authority.
new accounting standards and interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but
are not yet mandatory, have not been early adopted by the Group for the annual reporting period
ended 30 June 2021. The Group has not yet assessed the impact of these new or amended Accounting
Standards and Interpretations.
3 8
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 3. CRitiCal aCCounting judgements, estimates
and assumptions
The preparation of the financial statements requires management to make judgements, estimates and
assumptions 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 (refer to the respective
notes) within the next financial year are discussed below.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic
has had, or may have, on the Group based on known information. This consideration extends to the
nature of the products and services offered, customers, supply chain, staffing and geographic regions in
which the Group operates. Other than as addressed in specific notes, there does not currently appear
to be either any significant impact upon the financial statements or any significant uncertainties with
respect to events or conditions which may impact the Group unfavourably as at the reporting date or
subsequently as a result of the Coronavirus (COVID-19) pandemic.
Business combination versus asset acquisition
During the financial year, the Directors evaluated each purchase and determined that the purchase
of PantherCorp CST Pty Ltd met the criteria of a business combination (refer to note 30), while the
purchases of the Yellow Brick Road Wealth Division, Phillip Capital and Total Cover Australia did not.
Goodwill
The Group tests annually, or more frequently if events or changes in circumstances indicate impairment,
whether goodwill has suffered any impairment, in accordance with the accounting policy stated in
note 2. 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.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The Group assesses impairment of non-financial assets other than goodwill and other indefinite life
intangible assets at each reporting date by evaluating conditions specific to the Group and to the
particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of
the asset is determined. This involves fair value less costs of disposal or value-in-use calculations, which
incorporate a number of key estimates and assumptions.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the Group considers it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
3 9
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 3. CRitiCal aCCounting judgements, estimates
and assumptions (Continued)
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease
liability. Judgement is exercised in determining whether there is reasonable certainty that an option to
extend the lease or purchase the underlying asset will be exercised, or an option to terminate the lease
will not be exercised, when ascertaining the periods to be included in the lease term. In determining the
lease term, all facts and circumstances that create an economical incentive to exercise an extension
option, or not to exercise a termination option, are considered at the lease commencement date.
Factors considered may include the importance of the asset to the Group’s operations; comparison
of terms and conditions to prevailing market rates; incurrence of significant penalties; existence of
significant leasehold improvements; and the costs and disruption to replace the asset. The Group
reassesses whether it is reasonably certain to exercise an extension option, or not exercise a termination
option, if there is a significant event or significant change in circumstances.
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate
is estimated to discount future lease payments to measure the present value of the lease liability at the
lease commencement date. Such a rate is based on what the Group estimates it would have to pay a
third party to borrow the funds necessary to obtain an asset of a similar value to the right-of-use asset,
with similar terms, security and economic environment.
Other significant estimates
Other significant estimates include fair value assessment of derivatives and investments. Refer to note 2,
Fair value measurement section, and note 24.
4 0
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 4. opeRating segments
Identification of reportable operating segments
The Group is organised into five operating segments, which 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.
The information reported to the CODM is on a monthly basis. The CODM reviews operating profit, which
is earnings before interest, taxation, depreciation and amortisation adjusted for impairment (adjusted
‘EBITDA’).
Types of products and services
The principal products and services of each of these operating segments are as follows:
sequoia
wealth group
The Wealth division is the core driver of the company business thematic.
The Wealth Group is the area of the business where we provide licensee services
to Financial Planners, Wealth Managers, Equity advisers and a Corporate advisory
business unit.
We specialise in providing the adviser market a full service licensing and support service
so they need can operate as an adviser in a market that is heavily legislated. Our role
is to charge a fee for service and assist with a range of value propositions including
compliance, marketing, coaching, education, research, and technical support.
The advisers are primarily accountants, financial planners, mortgage brokers,
insurance advisers, equity market advisers and investment professionals with their AFS
licensing, merger and acquisitions corporate advice.
The Professional Services Group provides services to our own licensed advisers as well
as other licensee holders and the industry. This includes the provision of SMSF solutions,
general insurance broking and legal document establishment services to Financial
Planners, Stock Brokers, Mortgage Brokers and Accountants Australia wide. This
division currently has relationships and provides one of its services to in excess of 3,000
accountants and financial planners across Australia.
Sequoia Equity Markets Group provides services to our own licensed advisers as
well as other licensee holders their advisers, self directed investors, superannuation
funds. The companies fully owned subsidiary Morrison Securities delivers white label
Australian Stockbroking and Specialised Investment solutions to third party institutional
and adviser networks that operate their own AFSL.
Sequoia Direct Investment Group provides general advice to self directed investors
who elect not to have a personal adviser and wish to undertake their own portfolio
management, SMSF management share trading, superannuation, and select their
own products and insurance. In addition this division provides market data, robo
advice and trading tools via various mediums including an independent news
organisation specialising in finance and business news updates, events and investor
communication for ASX listed companies.
sequoia
professional
services
group
sequoia equity
markets group
sequoia direct
investment
group
head office
Head Office relates to the corporate running costs of the Group.
All products and services are provided predominantly to customers in Australia.
4 1
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 4. opeRating segments (Continued)
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.
Consolidated - 2021
Revenue
Revenue
sequoia
wealth
group
$
sequoia
professional
services
group
$
sequoia
equity
markets
group
$
sequoia
direct
investment
group
$
head
office
$
total
$
54,493,541
7,060,988
52,279,912
1,856,073
(48,595)
115,641,920
Gains on portfolio investments
804,501
-
16,239
-
-
820,739
total revenue
55,298,042
7,060,988
52,296,151
1,856,073
(48,595)
116,462,659
adjusted ebitda
6,123,786
2,106,165
5,898,463
594,460
(3,206,314)
11,516,560
Depreciation and amortisation
Acquisition costs
Interest revenue
Finance costs
Restructure costs
Share of profits of joint venture
accounted for using the equity method
Non-operating other income
Profit before income tax expense
Income tax expense
Profit after income tax expense
(2,879,359)
(316,339)
15,631
(230,836)
(67,738)
26,246
63,626
8,127,791
(2,579,529)
5,548,262
4 2
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 4. opeRating segments (Continued)
Consolidated - 2020
Revenue
Revenue
sequoia
wealth
group
$
sequoia
professional
services
group
$
sequoia
equity
markets
group
$
sequoia
direct
investment
group
$
head
office
$
total
$
40,661,203
4,668,453
36,994,395
2,224,429
56,575
84,605,055
Losses on portfolio investments
(96,586)
-
(9,819)
-
-
(106,405)
total revenue
40,564,617
4,668,453
36,984,576
2,224,429
56,575
84,498,650
adjusted ebitda
2,927,624
1,540,968
3,618,514
314,727
(3,576,132)
4,825,701
Depreciation and amortisation
Acquisition costs
Interest revenue
Finance costs
Profit before income tax expense
Income tax expense
Profit after income tax expense
note 5. Revenue
Sales revenue
Data subscriptions fees
Brokerage and commissions revenue
Superannuation product revenue
Structured product revenue
Corporate advisory fees
Media revenue
Leasing
Other income
Other revenue
(1,812,709)
(74,648)
109,837
(166,944)
2,881,237
(948,763)
1,932,474
Consolidated
2021
$
2020
$
529,247
712,453
73,803,588
52,914,957
2,306,465
2,414,279
27,902,934
22,944,283
8,087,523
830,834
-
2,980,337
1,086,477
620
2,181,329
1,551,649
115,641,920
84,605,055
Gains/(losses) on portfolio investments
820,739
(106,405)
Revenue
116,462,659
84,498,650
Other income includes revenue from settlement and general services.
4 3
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 5. Revenue (Continued)
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Consolidated - 2021
Timing of revenue recognition
Services transferred at a point
in time
sequoia
wealth
group
$
sequoia
professional
services
group
$
sequoia
equity
markets
group
$
sequoia
direct
investment
group
$
head
office
$
total
$
55,298,042
7,060,988
24,393,217
623,334
(48,595)
87,326,986
Services transferred over time
-
-
27,902,934
1,232,739
-
29,135,673
55,298,042
7,060,988
52,296,151
1,856,073
(48,595)
116,462,659
Consolidated - 2020
Timing of revenue recognition
Services transferred at a point
in time
sequoia
wealth
group
$
sequoia
professional
services
group
$
sequoia
equity
markets
group
$
sequoia
direct
investment
group
$
head
office
$
total
$
40,564,617
4,668,453
13,991,179
588,295
56,575
59,869,119
Services transferred over time
-
-
22,993,397
1,636,134
-
24,629,531
40,564,617
4,668,453
36,984,576
2,224,429
56,575
84,498,650
4 4
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 6. expenses
Profit before income tax includes the following specific expenses:
Depreciation
Leasehold improvements
Plant and equipment
Land and buildings - right-of-use assets
Total depreciation
Amortisation
Customer list
Regulatory memberships and licences
Other intangibles
Total amortisation
Consolidated
2021
$
2020
$
108,257
450,675
712,720
109,963
378,191
660,229
1,271,652
1,148,383
1,441,875
4,418
161,412
1,607,705
473,960
4,418
190,366
668,744
Total depreciation and amortisation
2,879,357
1,817,127
Finance costs
Interest and finance charges paid/payable on borrowings
Interest and finance charges paid/payable on lease liabilities
Finance costs expensed
Leases
Short-term lease payments
Employee benefits
Wages and salaries
Government COVID grants
Redundancies and terminations
Share-based payments
Commissions and discretionary bonus
Defined contribution superannuation expense
Other employment costs
Total employee benefits
104,276
126,560
230,836
15,887
151,057
166,944
-
268,472
9,162,489
(319,500)
87,715
290,764
2,415,598
992,253
2,411,603
7,574,999
(93,030)
296,646
(71,311)
1,060,434
771,598
2,034,444
15,040,922
11,573,780
4 5
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 7. inCome tax
Income tax expense
Current tax
Deferred tax - origination and reversal of temporary differences
Adjustment recognised for prior periods
Aggregate income tax expense
Deferred tax included in income tax expense comprises:
Decrease in deferred tax assets
Decrease in deferred tax liabilities
Consolidated
2021
$
2020
$
2,497,508
103,111
(21,090)
961,429
236,470
(249,136)
2,579,529
948,763
1,292,553
507,361
(1,189,442)
(270,891)
Deferred tax - origination and reversal of temporary differences
103,111
236,470
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Amortisation of intangibles
Net research and development credit
Sundry items
Adjustment recognised for prior periods
Income tax expense
8,127,791
2,881,237
2,438,337
864,371
318,591
143,513
(140,194)
(177,200)
(16,115)
367,215
2,600,619
1,197,899
(21,090)
(249,136)
2,579,529
948,763
4 6
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 7. inCome tax (Continued)
Deferred tax asset
Deferred tax asset comprises temporary differences attributable to:
Allowance for expected credit losses
Employee benefits
Accrued expenses
Deferred income
Net fair value loss on investment
Deferred tax assets attributable to business combinations
Lease incentives
Deferred tax asset
Movements:
Opening balance
Charged to profit or loss
Additions through business combinations (note 30)
Reclass
Closing balance
Deferred tax liability
Deferred tax liability comprises temporary differences attributable to:
Financial assets at fair value through other comprehensive income
Deferred expenses
Intangibles
Deferred tax liability
Movements:
Opening balance
Credited to profit or loss
Additions through business combinations (note 30)
Reclass
Closing balance
Consolidated
2021
$
2020
$
6,075
565,526
673,449
17,100
267,620
238,404
4,442,334
6,183,158
41,037
-
328,449
166,646
151,687
243,038
6,056,870
7,267,653
7,267,653
7,775,014
(1,292,553)
(507,361)
79,239
2,531
-
-
6,056,870
7,267,653
Consolidated
2021
$
2020
$
224,731
214,552
3,361,666
4,442,955
381,542
246,311
3,967,939
4,903,818
4,903,818
4,928,398
(1,189,442)
(270,891)
250,528
3,035
246,311
-
3,967,939
4,903,818
4 7
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 8. tRade and otheR ReCeivables
Current assets
Trade receivables
Less: Allowance for expected credit losses
Other receivables*
Consolidated
2021
$
2020
$
1,169,486
(20,250)
1,149,236
808,305
(57,000)
751,305
31,709,604
11,498,759
32,858,840
12,250,064
* Includes trade settlement receivable for Morrison Securities Pty Ltd of $29,800,778 in 2021 (30 June 2020: $9,428,581). The remaining balance relates to
commissions receivable.
Allowance for expected credit losses
The ageing of the receivables and allowance for expected credit losses provided for above are as
follows:
Consolidated
Not overdue
1 to 30 days overdue
31 to 60 days overdue
expected credit loss rate
Carrying amount
allowance for expected
credit losses
2021
%
2020
%
2021
$
2020
$
2021
$
2020
$
-
-
-
-
-
-
32,615,802
11,498,759
66,753
106,013
90,522
450,687
75,139
282,479
32,879,090
12,307,064
-
-
-
-
-
-
20,250
20,250
57,000
57,000
Over 60 days overdue
22.37%
20.18%
Movements in the allowance for expected credit losses are as follows:
Opening balance
Additional provisions recognised
Receivables written off during the year
unused amounts reversed
Closing balance
Consolidated
2021
$
2020
$
57,000
30,191
(28,366)
(38,575)
210,510
57,000
(199,810)
(10,700)
20,250
57,000
4 8
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 9. ContRaCt assets and defeRRed Costs
Current assets
Contract assets - deferred costs
Non-current assets
Contract assets - deferred costs
Consolidated
2021
$
2020
$
7,797,637
8,989,093
3,316,919
5,820,757
Contract assets – deferred costs relate to the costs of revenue contracts for structured products. These
costs (and associated revenues) are amortised over the life of the contract.
Changes in contract assets and liabilities reflect both:
(a) the release of deferred revenues and costs to the profit and loss through the performance of a
contract; and
(b) new receipts and prepayments for contracts that are yet to be performed.
note 10. otheR CuRRent finanCial assets
Current assets
Investment in shares
Reconciliation
Reconciliation of the fair values at the beginning and end of the current and previous
financial year are set out below:
Opening fair value
Net additions
Net disposals
Revaluation taken to profit or loss
Revaluation recognised in other comprehensive income
Reclassified from non-current financial assets
Consolidated
2021
$
2020
$
1,797,447
443,759
443,759
390,816
-
820,739
93,889
48,244
675,614
-
(21,267)
(106,405)
(104,183)
-
Closing fair value
1,797,447
443,759
Refer to note 24 for further information on fair value measurement.
Ordinary shares are held in ASX listed companies and are actively traded.
4 9
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 11. deRivative finanCial instRuments
Current assets
Derivatives - financial assets
Current assets
Derivatives - financial assets
Current liabilities
Derivatives - financial liabilities
Non-current liabilities
Derivatives - financial liabilities
Consolidated
2021
$
2020
$
9,202,491
2,928,246
13,074,689
9,695,887
(9,202,491)
(2,928,246)
(13,074,689)
(9,695,887)
Refer to note 23 for further information on financial instruments.
Refer to note 24 for further information on fair value measurement.
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 23).
The Group offers its clients investment products structured legally as loans, which provide clients a
derivative exposure to underlying market movements to those products. These exact market risks are in-
turn hedged with exact like-for-like products offered by commercial institutions, leaving the Group with
no exposure to the underlying market risks.
Information about the Group’s exposure to market risk, liquidity risk, and credit risk is disclosed in note 23.
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 has an obligation to its clients to pay the value of the investment at expiry. The current asset
amount and the non-current asset amount equals that of the investment obligation described as a
current liability and a non-current liability. The carrying amount equals the amount of the investment
obligation. The rise or fall offset each other.
note 12. plant and equipment
Non-current assets
Leasehold improvements - at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
Consolidated
2021
$
2020
$
921,060
921,060
(555,135)
(449,250)
365,925
471,810
5,561,044
5,264,550
(4,392,234)
(4,023,561)
1,168,810
1,240,989
1,534,735
1,712,799
5 0
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 12. plant and equipment (Continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous
financial year are set out below:
Consolidated
Balance at 1 July 2019
Additions
Depreciation expense
Balance at 30 June 2020
Additions
Additions through business combinations (note 30)
Depreciation expense
Balance at 30 June 2021
note 13. Right-of-use assets
Non-current assets
Buildings - right-of-use
Less: Accumulated depreciation
leasehold
improvements
$
plant and
equipment
$
total
$
581,773
1,072,287
1,654,060
-
546,893
546,893
(109,963)
(378,191)
(488,154)
471,810
1,240,989
1,712,799
2,372
-
356,565
21,931
358,937
21,931
(108,257)
(450,675)
(558,932)
365,925
1,168,810
1,534,735
Consolidated
2021
$
2020
$
4,478,783
3,424,788
(2,348,206)
2,130,577
(660,229)
2,764,559
The Group leases buildings for its offices under agreements of between three to seven years with, in
some cases, options to extend. The leases have various escalation clauses. On renewal, the terms of the
leases are renegotiated.
5 1
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 13. Right-of-use 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:
Consolidated
Balance at 1 July 2019
Recognised on adoption of AASB 16 (note 2)
Depreciation expense
Balance at 30 June 2020
Additions through business combinations (note 30)
Depreciation expense
Balance at 30 June 2021
buildings -
right-
of-use
$
-
3,424,788
(660,229)
2,764,559
78,738
(712,720)
2,130,577
For other lease related disclosures refer to the following:
• note 6 for details of depreciation on right-of-use assets, interest on lease liabilities and other lease
payments;
• note 18 for lease liabilities and maturities of lease liabilities; and
• consolidated statement of cash flow for repayment of lease liabilities.
note 14. intangibles
Non-current assets
Goodwill
Less: Impairment
Customer list - at cost
Less: Accumulated amortisation
Consolidated
2021
$
2020
$
12,192,932
11,842,072
(1,019,547)
(1,019,547)
11,173,385
10,822,525
13,425,614
8,896,030
(2,306,857)
(896,433)
11,118,757
7,999,597
Regulatory memberships and licences - at cost
3,836,285
3,840,703
Brand name - at cost
Other intangibles - at cost
Less: Accumulated amortisation
1,821,233
1,200,832
779,059
779,059
(486,879)
(325,467)
292,180
453,592
28,241,840
24,317,249
5 2
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 14. intangibles (Continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous
financial years are set out below:
Consolidated
goodwill
$
Customer
list
$
Regulatory
memberships
and
licences
$
Balance at 1 July 2019
10,773,876
5,364,398
3,845,121
Additions
-
2,288,120
Additions through business
combinations
Impairment from
adjustment to deferred
consideration
841,255
821,039
(488,715)
-
-
Impairment of assets
(303,891)
Amortisation expense
-
(473,960)
(4,418)
brand
name
$
other
intangibles
$
total
$
-
-
638,077
20,621,472
5,881
2,294,001
1,200,832
-
-
-
-
-
-
2,863,126
(488,715)
(303,891)
(190,366)
(668,744)
Balance at 30 June 2020
10,822,525
7,999,597
3,840,703
1,200,832
453,592
24,317,249
Additions
-
3,731,491
Additions through business
combinations (note 30)
Disposals
Amortisation expense
350,860
835,093
(5,549)
-
-
(1,441,875)
(4,418)
-
620,401
-
-
-
-
-
3,731,491
1,806,354
(5,549)
(161,412)
(1,607,705)
-
-
-
-
-
-
-
Balance at 30 June 2021
11,173,385
11,118,757
3,836,285
1,821,233
292,180
28,241,840
Impairment testing
Goodwill acquired through business combinations has been allocated to the following cash generating
units:
Cash generating units (‘CGus’):
Sequoia Wealth Group
Sequoia Professional Services Group
Sequoia Equity Markets Group
Sequoia Direct Investment Group
Consolidated
2021
$
2020
$
1,023,335
1,023,335
4,736,880
4,386,020
4,862,392
4,862,392
550,778
550,778
11,173,385
10,822,525
The recoverable amount of the Group’s goodwill has been determined by a value-in-use calculation
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.
5 3
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 14. intangibles (Continued)
The following key assumptions were used in the discounted cash flow model in relation to the goodwill
associated to various cash generating units:
key assumptions
Sequoia Wealth Group
Sequoia Professional Services Group
Sequoia Equity Markets Group
Sequoia Direct Investment Group
Revenue growth rate
%
Cost of sales growth rate
%
pre-tax discount rate
%
3.0%
3.0%
3.0%
1.0%
2.5%
2.5%
2.5%
2.5%
15.0%
15.0%
15.0%
15.0%
The goodwill is considered to be sensitive to these assumptions and is carried in the statement of
financial position at a written-down value.
Sensitivity
The directors have made judgements and estimates in respect of impairment testing of goodwill. Should
these judgements and estimates not occur the resulting goodwill carrying amount may decrease. The
sensitivities are as follows:
(a) Revenue growth would need to decrease by 1.0% before goodwill would need to be impaired, with
all other assumptions remaining constant.
(b) The discount rate would be required to increase by 15.0% before goodwill would need to be
impaired, with all other assumptions remaining constant.
Management believes that other reasonable changes in the key assumptions on which the recoverable
amount of goodwill is based would not cause the cash-generating unit’s carrying amount to exceed its
recoverable amount.
If there are any negative changes in the key assumptions on which the recoverable amount of goodwill
is based, this would result in a further impairment charge for goodwill.
note 15. tRade and otheR payables
Current liabilities
Trade payables*
Deferred consideration**
Accrued expenses
Client trading and security bond
Other payables
* Includes Trade settlement payables for Morrison Securities Pty Ltd of $44,074,390 in 2021 (30 June 2020: $15,715,866).
** The Deferred consideration relates to the acquisition of Libertas Financial Planning Pty Ltd.
Refer to note 23 for further information on financial instruments.
Consolidated
2021
$
2020
$
44,962,720
16,406,623
-
800,100
4,999,217
4,247,240
-
1,066,791
819,108
107,176
51,028,728
22,380,247
5 4
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 16. ContRaCt liabilities and defeRRed Revenue
Current liabilities
Contract liabilities - deferred revenue
Non-current liabilities
Contract liabilities - deferred revenue
Consolidated
2021
$
2020
$
10,602,740
12,637,235
4,205,041
7,977,273
Contract liabilities - deferred revenue relate primarily to structured product revenues. The revenue is
deferred due to recognition requirements where the revenue and cost are spread over the product life.
Changes in contract assets and liabilities reflect both:
(a) the release of deferred revenues and costs to the profit and loss through the performance of a
contract; and
(b) new receipts and prepayments for contracts that are yet to be performed.
Unsatisfied performance obligations
The aggregate amount of the transaction price allocated to the performance obligations that are
unsatisfied at the end of the reporting period was $14,807,780 as at 30 June 2021 ($20,614,509 as at 30
June 2020) and is expected to be recognised as revenue in future periods as follows:
1 year or less
Between 1 and 2 years
Between 2 and 3 years
Between 3 and 4 years
Consolidated
2021
$
2020
$
10,602,740
12,637,235
3,929,131
6,635,191
275,909
1,154,242
-
187,841
14,807,780
20,614,509
Revenue recognition is calculated on the product term remaining up to the maturity date.
note 17. boRRowings
Current liabilities
Other unsecured loans
Convertible notes payable
Refer to note 23 for further information on financial instruments.
Consolidated
2021
$
2020
$
317,253
-
462,414
200,000
317,253
662,414
5 5
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 17. boRRowings (Continued)
Other unsecured loans
Other unsecured loans relates to funding for Professional Indemnity Insurance Premium.
Convertible notes payable
As at 30 June 2021, there were no convertible notes payable (30 June 2020: $200,000).
note 18. lease liabilities
Current liabilities
Lease liability
Non-current liabilities
Lease liability
Consolidated
2021
$
2020
$
785,499
682,415
2,193,839
2,949,872
The following table details the Group’s remaining contractual maturity for its lease liabilities:
1 year or
less
$
between 1
and
2 years
$
between 2
and
3 years
$
between 3
and
4 years
$
between 4
and
5 years
$
over
5 years
$
Remaining
contractual
maturities
$
2021
Lease liability
785,499
846,914
835,332
511,593
-
2020
Lease liability
682,415
756,033
846,914
835,332
511,593
-
-
2,979,338
3,632,287
The cash flow in the maturity analysis above are present values of future payments and are not
expected to occur significantly earlier than contractually disclosed.
note 19. Contingent ConsideRation
Current liabilities
Contingent consideration
Non-current liabilities
Contingent consideration
Consolidated
2021
$
2020
$
1,400,000
957,701
479,350
479,350
Contingent considerations relate to future instalment payments for the acquisition of the Yellow Brick
Road Wealth Division and various client books acquired during the year.
5 6
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 20. issued Capital
Consolidated
2021
shares
2020
shares
2021
$
2020
$
Ordinary shares - fully paid
131,507,805
121,216,770
51,524,175
48,497,215
Movements in ordinary share capital
details
date
shares
issue price
$
Balance
1 July 2019
119,009,824
48,025,034
Issue of shares on exercise of performance rights
24 July 2019
185,000
$0.165
30,525
Issue of shares on acquisition of Libertas Financial
Planning Pty Ltd
9 December 2019
1,500,000
$0.220
330,000
Issue of shares as a deposit for an asset acquisition
27 December 2019
Issue of shares on exercise of performance rights
5 February 2020
484,446
37,500
$0.215
$0.200
104,156
7,500
Balance
30 June 2020
121,216,770
48,497,215
Issue of shares on exercise of performance rights
9 July 2020
97,500
$0.270
26,325
Issue of fully paid shares to executives as part of
remuneration
Issue of shares on acquisition of Libertas Financial
Planning
Issue of shares on acquisition of Total Cover Australia's
customer base
9 July 2020
102,500
$0.270
27,675
9 July 2020
3,810,000
$0.210
800,100
6 August 2020
1,500,001
$0.220
330,000
Issue of shares on acquisition of YieldReport's assets
6 October 2020
Issue of shares for dividend reinvestment plan FY20
13 October 2020
100,000
574,799
Issue of shares on acquisition of Panthercorp CST Pty Ltd
1 February 2021
2,000,000
$0.300
$0.331
$0.400
30,000
190,322
800,000
Issue of shares as consideration under purchase of assets
agreement with First Option Management Pty Ltd
1 February 2021
625,000
$0.480
300,000
Issue of shares for dividend reinvestment plan HY21
15 March 2021
Issue of shares on exercise of options
23 April 2021
261,235
1,000,000
$0.448
$0.300
116,960
300,000
Issue of shares as part consideration for purchase of
assets agreement with InterPrac Securities Pty Ltd and
SFG Financial Services Pty Ltd
Issue of shares on acquisition of FF Planning Solutions
customer base
Share issue transaction costs
21 May 2021
20,000
$0.500
10,000
9 June 2021
200,000
$0.500
100,000
(4,422)
Balance
30 June 2021
131,507,805
51,524,175
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the
Company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary
shares have no par value and the Company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and
upon a poll each share shall have one vote.
5 7
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 20. issued Capital (Continued)
Share buy-back
The Company conducted an on-market buy-back. It was announced on the market on 15 June 2020
and covered the period 1 July 2020 to 30 June 2021. No shares have been brought back under the buy-
back.
Capital risk management
The Group’s objectives when managing capital is to safeguard its ability to continue as a going
concern, so that it can provide returns for shareholders and benefits for other stakeholders and to
maintain an optimum capital structure to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt.
Net debt is calculated as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid
to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The Group would look to raise capital when an opportunity to invest in a business or company was seen
as value adding relative to the current Company’s share price at the time of the investment. The Group
is not actively pursuing additional investments in the short term as it continues to integrate and grow its
existing businesses in order to maximise synergies.
The Group does not have any financing arrangement with covenants during the financial year.
Dividend Reinvestment Plan
The Company has an active Dividend Reinvestment Plan (‘DRP’), which forms part of its capital
management policy. Shareholders need to complete an Election Notice in order to participate. The
Company has issued both an interim dividend and declared a final dividend, which are based on 97.5%
of the arithmetic average of the daily volume weighted average market price of Sequoia’s ordinary
shares over a selected period. A variation notice is required to terminate the shareholders participation
in the plan. Refer to note 22 for further information.
note 21. ReseRves
Financial assets at fair value through other comprehensive income reserve
Share-based payments reserve
Consolidated
2021
$
2020
$
488,396
276,828
394,507
40,064
765,224
434,571
Financial assets at fair value through other comprehensive income reserve
The reserve is used to recognise increments and decrements in the fair value of financial assets at fair
value through other comprehensive income.
5 8
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 21. ReseRves (Continued)
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as
part of their remuneration, and other parties as part of their compensation for services.
note 22. dividends
Dividends
Dividends paid during the financial year were as follows:
Final dividend for the year ended 30 June 2020 of 0.40 cents per ordinary share*
Interim dividend for the year ended 30 June 2021 of 0.40 cents per ordinary share**
Consolidated
2021
$
2020
$
506,901
520,097
1,026,998
-
-
-
* The dividend comprised of a cash dividend paid of $316,579 and dividend reinvestment allotment of $190,322.
** The interim dividend comprised of a cash dividend paid of $403,137 and dividend reinvestment allotment of $116,960.
All dividends are fully franked.
Dividends declared
On 19 August 2021, the Company declared a final dividend for the year ended 30 June 2021 of 0.60
cents per share, fully franked. The record date for determining entitlements to the dividend is 13
September 2021 and is to be paid on 11 October 2021. The financial effect of these dividends has
not been brought to account in the financial statements for the year ended 30 June 2021 and will be
recognised in subsequent financial periods.
Franking credits
Consolidated
2021
$
2020
$
Franking credits available for subsequent financial years based on a tax rate of 30%
10,648,715
7,660,474
The above amounts represent the balance of the franking account as at the end of the financial year,
adjusted for:
• franking credits that will arise from the payment of the amount of the provision for income tax at the
reporting date
• franking debits that will arise from the payment of dividends recognised as a liability at the reporting
date
• franking credits that will arise from the receipt of dividends recognised as receivables at the reporting
date
5 9
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 23. finanCial instRuments
Financial risk management objectives
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 between 18 months and 48 months 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.
The Group’s activities expose it to a variety of financial risks: market risk (including interest rate risk), credit
risk and liquidity risk.
The Board of Directors monitor and manage 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 receivables
Derivative assets
Other financial assets
Total financial assets
financial liabilities
Trade and other payables
Derivative liabilities
Lease liabilities
Contingent consideration
Convertible notes
Other unsecured loans
Total financial liabilities
Consolidated
2021
$
2020
$
34,643,167
22,961,750
32,879,090
12,327,654
22,277,180
12,624,133
1,859,769
554,305
91,659,206
48,467,842
51,028,728
22,380,247
22,277,180
12,624,133
2,979,338
3,632,287
1,879,350
1,437,051
-
317,253
200,000
462,414
78,481,849
40,736,132
6 0
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 23. finanCial instRuments (Continued)
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 structured 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.
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 by ensuring that price risk in the financial instruments is offset
with one another. The difference in fair value between the financial asset and liability held through profit
or 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 price risk 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 price risk have been made.
The Group is, therefore, not exposed to any significant price risk in relation to issued structured products.
The Group has an exposure to price risk on its listed and unlisted equity investments and, as at year end,
a 20% increase or decrease in price would affect the shareholding value by approximately $368,000.
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, however the Directors of the
Group manage financial instruments to ensure that interest rate risk remains hedged and is therefore
offsetting.
The Group is also exposed to interest rate risk arising from long-term borrowings. Borrowings obtained
at variable rates expose the Group to interest rate risk. Borrowings obtained at fixed rates expose the
Group to fair value interest rate risk.
The Group is not exposed to any significant interest rate risk.
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.
The Group has adopted a lifetime expected loss allowance in estimating expected credit losses to
trade receivables through the use of a provisions matrix using fixed rates of credit loss provisioning.
These provisions are considered representative across all customers of the Group based on recent sales
experience, historical collection rates and forward-looking information that is available.
6 1
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 23. finanCial instRuments (Continued)
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.
Generally, trade receivables are written off when there is no reasonable expectation of recovery.
Indicators of this include the failure of a debtor to engage in a repayment plan, no active enforcement
activity and a failure to make contractual payments for a period greater than 1 year.
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 by 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. Investors are granted a charge which is held on trust by the security 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 an investment-grade (or better) bank or
a subsidiary of an investment-grade (or better) bank.
Investments grades are a rating or indicator of particular debt obligations which have a low risk of
default. Various rating agencies rate an investment bank’s creditworthiness. Different rating firms
use different designations. Sequoia Specialist Investments Pty Ltd hedge providers are considered
“investment grade” and the credit worthiness of our investment bank hedge contracts providers are
between high credit quality (‘AAA’ and ‘AA’ ) and medium credit quality (‘A’ and ‘BBB’). Therefore, the
risk of default of the selected hedge providers are considered low. In addition, if the investment bank
were to unexpectedly default the resulting financial risk would be ultimately borne by the end investor,
due to the pass through of the credit risk of the hedge provider to the end investor.
The following tables detail the Group’s potential exposure, should the counterparties be unable to meet
their obligations:
2021
Derivative assets
2020
Derivative assets
fair value
$
notional value
$
22,277,180
325,617,928
fair value
$
notional value
$
12,624,133
333,502,357
6 2
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 23. finanCial instRuments (Continued)
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and
cash equivalents) and available borrowing facilities to be able to pay debts as and when they become
due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing
facilities by continuously monitoring actual and forecast cash flows and matching the maturity profiles of
financial assets and liabilities.
Remaining contractual maturities
The following tables detail the Group’s maturity for its financial instrument liabilities. The tables have been
drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on
which the financial liabilities are required to be paid.
Consolidated - 2021
non-derivatives
Non-interest bearing
Trade payables
Other payables
Client trading and security bond
Contingent consideration
Interest-bearing - variable
Other unsecured loans
Total non-derivatives
derivatives
Value hedges, net settled
Total derivatives
1 year or less
$
between 1
and 5 years
$
Remaining
contractual
maturities
$
44,962,720
1,066,791
-
-
44,962,720
1,066,791
-
944,108
944,108
1,400,000
479,350
1,879,350
317,253
-
317,253
47,746,764
1,423,458
49,170,222
9,202,491
13,074,689
22,277,180
9,202,491
13,074,689
22,277,180
6 3
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 23. finanCial instRuments (Continued)
Consolidated - 2020
non-derivatives
Non-interest bearing
Trade payables
Other payables
Client trading and security bond
Contingent consideration
Interest-bearing - variable
Other unsecured loans
Interest-bearing - fixed rate
Convertible notes payable
Total non-derivatives
derivatives
Value hedges, net settled
Total derivatives
1 year or less
$
between 1
and 5 years
$
Remaining
contractual
maturities
$
16,406,623
107,176
819,108
957,701
462,414
200,000
-
-
-
16,406,623
107,176
819,108
479,350
1,437,051
-
-
462,414
200,000
18,953,022
479,350
19,432,372
2,928,246
9,695,887
12,624,133
2,928,246
9,695,887
12,624,133
The cash flows in the maturity analysis above are not expected to occur significantly earlier than
contractually disclosed above.
6 4
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 24. faiR value measuRement
Fair value hierarchy
The following tables detail the Group’s assets and liabilities, measured or disclosed at fair value, using
a three level hierarchy, based on the lowest level of input that is significant to the entire fair value
measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly
Level 3: unobservable inputs for the asset or liability
Consolidated - 2021
Assets
Listed ordinary shares
unlisted ordinary shares
Derivative financial instruments
Total assets
Liabilities
Derivative financial instruments
Contingent consideration
Total liabilities
Consolidated - 2020
Assets
Listed ordinary shares
unlisted ordinary shares
Derivative financial instruments
Total assets
Liabilities
Derivative financial instruments
Contingent consideration
Total liabilities
level 1
$
level 2
$
level 3
$
total
$
1,797,447
-
-
-
-
-
1,797,447
62,322
62,322
22,277,180
-
22,277,180
1,797,447
22,277,180
62,322
24,136,949
-
-
-
22,277,180
1,879,350
24,156,530
level 1
$
level 2
$
level 3
$
-
-
-
-
22,277,180
1,879,350
24,156,530
total
$
443,759
110,546
443,759
-
-
-
-
110,546
12,624,133
-
12,624,133
443,759
12,624,133
110,546
13,178,438
-
-
-
12,624,133
1,437,051
14,061,184
-
-
-
12,624,133
1,437,051
14,061,184
Convertible notes are held at amortised cost so are excluded from the fair value tables above.
The carrying amounts of trade and other receivables, trade and other payables and other financial
liabilities 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 liabilities.
6 5
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 24. faiR value measuRement (Continued)
Valuation techniques for fair value measurements categorised within level 2 and level 3
Financial instruments that are not traded in an active market are determined using valuation
techniques. These valuation techniques maximise the use of observable market data where it is
available and relies as little as possible on entity specific estimates. If all significant inputs required to fair
value an instrument are observable, the instrument is included in level 2. If one or more of the significant
inputs is not based on observable market data, the instrument is included in level 3.
unquoted investments have been valued using prices evident in recent third party transactions.
The valuation process is managed by the Chief Operating Decision Makers (‘CODM’) of the Group
who perform and validate valuations of non-property assets required for financial reporting purposes
(including level 3 fair values). Discussion on valuation processes and outcomes are held between the
CODM, CFO and audit committee every six months.
Level 3 assets and liabilities
Movements in level 3 assets and liabilities during the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2019
Additions
Balance at 30 June 2020
Transfers out level 3
Additions
Balance at 30 June 2021
unlisted
ordinary shares
$
40,000
70,546
110,546
(48,244)
20
62,322
note 25. key management peRsonnel disClosuRes
Compensation
The aggregate compensation made to directors and other members of key management personnel of
the Group is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
Refer to the ‘Remuneration report (audited)’ section of the Directors’ report.
Consolidated
2021
$
2020
$
955,192
51,038
179,191
646,006
30,883
-
1,185,421
676,889
6 6
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 26. RemuneRation of auditoRs
During the financial year the following fees were paid or payable for services provided by William Buck,
the auditor of the Company:
Audit services - William Buck Audit (Vic) Pty Limited
Audit or review of the financial statements
Other services - William Buck (Vic) Pty Limited
Tax services
Other services
Consolidated
2021
$
2020
$
158,500
165,959
18,515
19,153
37,668
26,755
14,994
41,749
196,168
207,708
note 27. Contingent liabilities
The Group has given a bank guarantee as at 30 June 2021 of $677,238 (30 June 2020: $677,238) in
relation to rental bonds. These are held in term deposit accounts with Westpac Banking Corporation.
The Group’s legal counsel is currently acting on several matters referred to the Australian Financial
Complaints Authority (‘AFCA’) relating to the provision of financial services to its retail clients. The Group
has assessed any potential obligations relating to these complaints after pursuing a recourse from the
advisers in the following manner:
• Those complaints for which there is a probable likelihood of restitution being paid, have been accrued
in these financial statements, together with any associated legal costs and net of any available
insurance cover; and
• The Directors have assessed complaints for which there is less than a probable likelihood of restitution
(including the impact of legal costs and insurance), and have chosen not to disclose the likely amount
as they are still subject to proceedings with AFCA and potential recourse from the advisers, and the
disclosure of such amounts is likely to prejudice those proceedings.
note 28. Related paRty tRansaCtions
Parent entity
Sequoia Financial Group Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 31.
Key management personnel
Disclosures relating to key management personnel are set out in note 25 and the remuneration report
included in the directors’ report.
6 7
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 28. Related paRty tRansaCtions (Continued)
Transactions with related parties
During the financial year, $71,726 (30 June 2020: $142,866) was paid or payable for services provided by
Cooper Grace Ward, a related party entity of director, Charles Sweeney.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
note 29. paRent entity infoRmation
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Profit/(loss) after income tax
Total comprehensive (loss)/income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Financial assets at fair value through other comprehensive income reserve
Share-based payments reserve
Accumulated losses
Total equity
parent
2021
$
2020
$
(1,236,360)
378,203
(1,236,360)
378,203
parent
2021
$
2020
$
715,334
115,366
75,740,720
63,154,128
2,991,480
3,201,009
44,662,579
34,613,806
87,457,293
84,430,344
46,070
276,828
46,070
40,064
(56,702,050)
(55,976,156)
31,078,141
28,540,322
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries.
Contingent liabilities
The parent entity has considerations payable relating to the acquisition of the Yellow Brick Road Wealth
Division and various client books acquired during the year.
6 8
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 29. paRent entity infoRmation (Continued)
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2021
and 30 June 2020.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in
note 2, in addition to the following:
• Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
• Dividends received from subsidiaries are recognised as other income by the parent entity and
are eliminated at the Group level.
note 30. business Combinations
PantherCorp CST Pty Ltd
On 10 November 2020, the Company announced the 100% equity acquisition of PantherCorp CST Pty
Ltd (‘Panthercorp’) from Easton Investments Ltd. Panthercorp provides services for the formation of
companies, trusts and SMSFs, in addition to company registry services and maintenance of company
records. The acquisition provides Sequoia with synergies by utilising existing processes and systems
used by Docscentre and providing the opportunity to offer existing services to approximately 750
accountants, predominantly based in Western Australia.
As part payment of the consideration, on 1 February 2021, the Company issued 2,000,000 fully paid
ordinary shares at 40 cents per share to the seller and paid cash of $450,000. A final payment of $450,000
is due on 1 February 2022.
Since acquisition, Panthercorp contributed revenue of $2,111,533 and operating profit of $332,982. If the
acquisition had happened at the beginning of the financial year, the contribution would have been
revenue of $4,360,849 and operating profit of $600,586.
6 9
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 30. business Combinations (Continued)
Details of the acquisition are as follows:
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Other assets
Plant and equipment
Right-of-use assets
Customer list
Other intangibles
Deferred tax asset
Trade and other payables
Deferred tax liability
Lease liability
Other liabilities
Net assets acquired
Goodwill
Acquisition-date fair value of the total consideration transferred
Representing:
Cash paid or payable to vendor
Sequoia Financial Group Limited shares issued to vendor
Deferred consideration
Acquisition costs expensed to profit or loss
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
Less: cash and cash equivalents
Less: deferred consideration
Less: shares issued by Company as part of consideration
Net cash used
fair value
$
83,037
324,864
13,941
4,350
4,036
21,931
78,738
835,093
620,401
79,239
(28,350)
(250,528)
(84,328)
(353,284)
1,349,140
350,860
1,700,000
450,000
800,000
450,000
1,700,000
40,175
1,700,000
(83,037)
(450,000)
(800,000)
366,963
7 0
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 31. inteRests in subsidiaRies
The consolidated financial statements incorporate the assets, liabilities and results of the following
subsidiaries with non-controlling interests in accordance with the accounting policy described in note 2:
parent
principal place
of business /
Country of
incorporation
ownership
interest
2021
%
ownership
interest
2020
%
name
Sequoia Financial Group Limited
Sequoia Group Holdings Pty Ltd
Sequoia Financial Australia Ltd
Sequoia Wealth Group Pty Ltd
My Own Super Fund Pty Ltd
Bourse Data Pty Ltd
The Cube Financial Group Pty Ltd
Trader Dealer Online Pty Ltd
MDSnews.com Pty Ltd
Docscentre Pty Ltd (formerly InterPrac Pty Ltd)
Libertas Financial Planning Pty Ltd
Sequoia Direct Pty Ltd
Finance TV Pty Ltd
Morrison Securities Pty Ltd
Sequoia Superannuation Pty Ltd
Sequoia Specialist Investments Pty Ltd
Sequoia Asset Management Pty Ltd
Sequoia Lending Pty Ltd
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
(a)
(a)
(a)
(a)
(a)
(a)
(a)
(a)
(a)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
Acacia Administrative Services Pty Ltd
(b) (1)
Australia
Sequoia Nominees No.1 Pty Ltd
Sequoia Wealth Management Pty Ltd
Sequoia Corporate Finance Pty Ltd
Centreboard Super Pty Ltd
Australian Practical Superannuation Fund Pty Ltd (formerly
Property Engine Pty Ltd)
Sequoia Family Office Pty Ltd (formerly Investor1st Pty Ltd)
(c)
(d)
(d)
Australia
Australia
Australia
(b) (e) (2)
Australia
(e)
(e)
Australia
Australia
InterPrac Financial Planning Pty Ltd
(e) (3)
Australia
Sage Capital Group Pty Ltd
InterPrac Securities Pty Ltd
InterPrac General Insurance Pty Ltd
InterPrac Corporate Insurance Pty Ltd
InterPrac Mortgage Management Pty Ltd
InterPrac Finance Services Pty Ltd
SMSF Engine Pty Ltd
(e)
(e)
(e)
(e)
(e) (4)
(e) (4)
(e)
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%
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%
100%
100%
100%
100%
100%
100%
-
100%
100%
100%
7 1
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 31. inteRests in subsidiaRies (Continued)
Tax Engine Pty Ltd
Yieldreport Pty Ltd (formerly Sequoia Private Clients Pty Ltd)
PantherCorp CST Pty Ltd
Morsec Nominees Pty Ltd
Taking Control Pty Ltd
(a) Subsidiary of Sequoia Financial Group Limited
(b) Subsidiary of Sequoia Group Holdings Pty Ltd
(c) Subsidiary of Sequoia Specialist Investments Pty Ltd
(d) Subsidiary of Sequoia Wealth Group Pty Ltd
(e) Subsidiary of Docscentre Pty Ltd (formerly InterPrac Pty Ltd)
(f) Subsidiary of Morrison Securities Pty Ltd
(e)
(e)
(e)
(f)
(5)
Australia
Australia
Australia
Australia
Australia
100%
100%
100%
100%
50%
100%
100%
-
100%
-
(1) Acacia Administrative Services Pty Ltd acts as a service entity for the Group with all employees engaged under this entity.
(2) 50% owned by Sequoia Group Holdings Pty Ltd and 50% owned by Docscentre Pty Ltd. Deregistered in July 2021.
(3) 50% owned by Docscentre Pty Ltd and 50% owned by Sage Capital Group Pty Ltd.
(4) Entities sold to Taking Control Pty Ltd in January 2021.
(5) Docscentre Pty Ltd owns 50% of Taking Control Pty Ltd.
7 2
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 32. Cash flow infoRmation
Reconciliation of profit after income tax to net cash from operating activities
Profit after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Net fair value gain on investments
Share-based payments
Impairment of assets
Net loss on disposal of non-current assets
Forfeit of options
Interest for lease accounting
Change in operating assets and liabilities:
Consolidated
2021
$
2020
$
5,548,262
1,932,474
3,009,359
1,812,709
(846,985)
290,764
-
(23,626)
-
126,560
-
-
308,309
106,405
(71,311)
151,057
Decrease/(increase) in trade and other receivables
165,876
(898,436)
Decrease/(increase) in client related receivables
Decrease in contract assets and deferred costs
Increase in inventories
Decrease in deferred tax assets
Increase in prepayments
Decrease/(increase) in other operating assets
Increase/(decrease) in trade and other payables
Increase in client related payables
Decrease in contract liabilities and deferred revenue
Increase/(decrease) in provision for income tax
Decrease in deferred tax liabilities
Increase in employee benefits
Increase in other operating liabilities
(20,372,197)
3,695,294
(30,384)
1,210,783
(76,831)
388,462
789,200
(489)
507,361
(66,691)
21,460
(498,744)
139,060
(1,076,605)
28,358,524
6,895,951
(5,802,747)
(1,365,002)
351,658
(1,071,110)
1,309,787
723,679
(797,134)
(270,891)
146,732
2,611
Net cash from operating activities
16,727,186
7,995,968
7 3
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 32. Cash flow infoRmation (Continued)
Changes in liabilities arising from financing activities
Consolidated
bank loans
and lease
chattel
mortgage
$
Capital
finance and
other
loans
$
Convertible
notes
$
lease
liability
$
total
$
Balance at 1 July 2019
831,558
400,100
200,000
-
1,431,658
Net cash used in financing activities
(831,558)
(28,911)
Leases recognised on the adoption of AASB 16
Make good provision
Adjustment to treatment lease incentive
Changes through business combinations (note 30)
Other changes
Balance at 30 June 2020
Net cash used in financing activities
Changes through business combinations (note 30)
Interest on lease liability
Balance at 30 June 2021
note 33. eaRnings peR shaRe
-
-
-
-
-
-
-
-
-
-
-
-
-
91,225
-
-
-
-
-
-
-
(610,688)
(1,471,157)
4,057,139
4,057,139
200,000
200,000
(638,727)
(638,727)
-
91,225
624,563
624,563
462,414
200,000
3,632,287
4,294,701
(145,161)
(200,000)
(862,297)
(1,207,458)
-
-
317,253
-
-
-
84,328
84,328
125,020
125,020
2,979,338
3,296,591
Consolidated
2021
$
2020
$
Profit after income tax attributable to the owners of Sequoia Financial Group Limited
5,548,262
1,932,474
Weighted average number of ordinary shares used in calculating basic earnings
per share
Adjustments for calculation of diluted earnings per share:
Options over ordinary shares
Performance rights
number
number
128,315,340
120,282,464
4,150,000
1,000,000
-
195,000
Weighted average number of ordinary shares used in calculating diluted earnings
per share
132,465,340
121,477,464
Basic earnings per share
Diluted earnings per share
Cents
Cents
4.324
4.188
1.607
1.591
7 4
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 note 34. events afteR the RepoRting peRiod
On 1 July 2021, the Group announced the launch of Sequoia Family Office within the Sequoia Wealth
Group. The new business will target high net worth investors with investable funds of $5.0 million to $100.0
million who are looking for specialist services in managing their financial affairs. On 1 July 2021, the
Group has acquired the client books of Macro Investment Advisory Pty Ltd for up to $600,000. This is the
initial investment in the family office space with the aim to grow the funds under advice to $2.0 billion
over the next 5 years.
Apart from the dividend declared as disclosed in note 22, no other matter or circumstance has arisen
since 30 June 2021 that has significantly affected, or may significantly affect the Group’s operations, the
results of those operations, or the Group’s state of affairs in future financial years.
7 5
Notes to the consolidated financial statementsSequoia Financial Group limited ANNuAl RepoRt — 30 JuNe 2021 Directors’ declaration
In the directors’ opinion:
• the attached financial statements and notes 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 comply with International Financial Reporting Standards
as issued by the International Accounting Standards Board as described in note 2 to the financial
statements;
• the attached financial statements and notes give a true and fair view of the Group’s financial position
as at 30 June 2021 and of its performance for the financial 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 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the
Corporations Act 2001.
On behalf of the directors
___________________________
John Larsen
Chairman
19 August 2021
Melbourne
7 6
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Independent auditor’s report to the members
of Sequoia Financial Group Limited
Sequoia Financial Group Limited
Independent auditor’s report to members
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Sequoia Financial Group Limited (the Company)
and its controlled entities (together, the Group), which comprises the consolidated
statement of financial position as at 30 June 2021, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies and other explanatory
information, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group, is in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of
its financial performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations
2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our
responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of
the Corporations Act 2001 and the ethical requirements of the Accounting Professional and
Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants
(including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial report of the current period. These matters were
addressed in the context of our audit of the financial report as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
7 7
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021
Independent auditor’s report to the members
of Sequoia Financial Group Limited
BUSINESS COMINATIONS – PANTHERCORP CST PTY LTD
Area of focus
How our audit addressed it
The Group acquired Panthercorp CST Pty Ltd
on 1 February 2021. The business combination
was considered a significant purchase for the
group. Areas of complexity for this transaction
were around the following:
— Accounting and appropriately fair valuing
deferred consideration and consideration
paid for the transaction, including amounts
paid through cash and scrip;
— Identifying and allocating the intangible
assets acquired to the appropriate cash-
generating unit (CGU) for subsequent
impairment testing;
— Appropriately measuring and classifying in
the profit or loss transaction costs relating to
the acquisition;
— Determination of deferred tax assets arising
from the purchase price allocation; and
— Setting an appropriate accounting policy for
the amortisation of identifiable intangible
assets arising from the purchase.
We note that at reporting date the fair value
attribution accounting is complete (which under
Accounting Standards they are afforded 12
months from the date of acquisition), including:
a) the attribution of provisional goodwill
calculations to identifiable intangible assets;
b) the setting of tax cost bases for calculating
deferred tax assets and liabilities; and
c) identifying any vendor guarantees or
contingent liabilities that may be separately fair
valued as part of the business purchase.
Our audit procedures included:
— Reviewing the acquisition agreements to
understand the key terms and conditions of
the acquisition;
— Reviewed the accounting treatment adopted
by the Group to ensure the transaction met
the requirements of AASB 3 Business
Combinations;
— Comparing the completion accounting to
independent purchase price allocation
reports;
— Obtained a list of transaction costs related
to the purchase and on a sample ensured
appropriate treatment in being expensed
when incurred;
— Discussed with management their program
for ensuring that they complete their
analysis of fair values of assets and
liabilities acquired by the anniversary of the
acquisition date;
— Obtained the intangible asset allocation
journals processed and reviewed for
appropriateness of recognition and
valuation and assessed the independent
specialist;
— Verified and reviewed deferred tax bases to
tax calculations; and
— Assessed the appropriateness of the
allocation of intangible assets to their CGU,
as included in the Group’s impairment
calculations.
We also considered the adequacy of the
Group’s disclosures in relation to the business
combination.
7 8
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021
Independent auditor’s report to the members
of Sequoia Financial Group Limited
REVENUE RECOGNITION FOR SEQUOIA SPECIALIST INVESTMENTS PRODUCTS
Area of focus
How our audit addressed it
The Sequoia Specialist Investments business
segment (SSI) represents a significant portion of
the revenues and profitability of the Group. SSI
earns revenue by providing a counter-party
solution for its clients in their trading of market
risks (principally foreign exchange and equities)
in medium to long-term derivative products.
Sequoia effectively on-sells the derivative
exposure it has with its clients to Tier 1
investment banks with contracts that completely
match that derivative exposure.
The margin it earns from this arrangement is
priced separately and is deferred (together with
direct costs) on a straight-line over the course of
each contract on a gross basis in the financial
statements (deferred costs and deferred
revenue). The derivative positions, which are
held at fair value with changes in fair value
through the profit or loss, are also reflected at
their unhedged values on the statement of
financial position.
From our perspective, the key risks for this
arrangement include the following matters:
— For a sample of structured products, we
agreed the terms and conditions, including
but not limited to, interest rates, notional
hedged units, product maturity, trade dates
and hedge premiums paid to supporting
documents, including Product Disclosure
Statements, Market-to-Market (MTM)
valuations, Market registry allotment reports
and bank statements.
— We confirmed the valuations of the
derivative financial instruments at year end
through to supporting valuations obtained
from various investment banks.
— We re-calculated the model for deferral and
subsequent release of revenue and costs
relating to the structured products and
reconciled closing positions to the statement
of financial position and statement of
financial performance;
— An assessment of the credit worthiness of
the investment banks;
— We examined application fees and coupon
fees and ensured that they were accrued to
the appropriate accounting period; and
— We reviewed the accuracy of the current
and non-current classification of deferred
revenue and deferred costs.
- The risk that client-driven derivative
exposures are not matched 1-for-1 with
wholesale contracts;
- The risk of default by the investment
banks providing wholesale derivative
hedge positions; and
- The potential for revenue to be
recognised in-advance of the services
provided to the client, including other
revenues related with SSI including
non-refundable application fees, which
are earned up-front and at-risk coupon
fees, which are earned at the close of
each contract.
We also considered the adequacy of the
Group’s disclosures in relation to revenue
recognition.
We also reviewed the Group’s accounting
policies for its revenue and cost streams
attached to the SSI segment, to ensure
compliance with AASB 15.
7 9
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021
Independent auditor’s report to the members
of Sequoia Financial Group Limited
ASSESSMENT OF CARRYING VALUE OF INTANGIBLE ASSETS
Area of focus
How our audit addressed it
The Group’s net assets include a significant
amount of intangible assets, the majority of
which have originated from acquisitions in prior
years.
There is a risk that the entities in the Group may
not trade in line with initial expectations and
forecasts, resulting in the carrying amount of
intangible assets exceeding the recoverable
amount and therefore requiring impairment.
The recoverable amounts of the four cash
generating units (CGUs) have been calculated
based upon on their value-in-use. These
recoverable amounts use discounted cash flow
forecasts in which the Directors make
judgements over certain key inputs, for example
but not limited to revenue growth, discount rates
applied, long term growth rates and inflation
rates.
Overall due to the high level of judgement
involved, and the significant carrying amounts
involved, we have determined that this is a key
judgemental area that our audit concentrated
on.
Our audit procedures included:
— Evaluation of the Group’s determination of
CGUs. This includes reviewing internal
management reporting, comparison to our
knowledge and understanding of Group’s
operations and ensuring CGUs are no
larger than operating segments;
— A detailed evaluation of the Group’s
budgeting procedures upon which the
forecasts are based and testing the
principles and integrity of the discounted
future cash flow models;
— Testing the accuracy of the calculation
derived from each forecast model and we
assessed key inputs in the calculations such
as revenue growth, discount rates and
working capital assumptions, by reference
to the Board approved forecasts, data
external to the Group and our own views.
— We reviewed the historical accuracy by
comparing actual results with the original
forecasts.
We also considered the adequacy of the
Group’s disclosures in relation to the impairment
testing.
Other Information
The directors are responsible for the other information. The other information comprises the information in
the Group’s annual report for the year ended 30 June 2021, but does not include the financial report and
the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
8 0
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021
Independent auditor’s report to the members
of Sequoia Financial Group Limited
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with the Australian Auditing Standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of this financial report.
A further description of our responsibilities for the audit of these financial statements is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our independent auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2021.
In our opinion, the Remuneration Report of Sequoia Financial Group Limited, for the year ended 30 June
2021, complies with section 300A of the Corporations Act 2001.
8 1
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021
Independent auditor’s report to the members
of Sequoia Financial Group Limited
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
N. S. Benbow
Director
Melbourne, 19 August 2021
8 2
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021
Shareholder information
In accordance with ASX Listing Rule 4.10, the Company provides the following additional information to
shareholders not shown elsewhere in this Annual Report. The information is current as at 4 August 2021.
CoRpoRate goveRnanCe statement
The Board of Directors of Sequoia Financial Group Limited is committed to maintaining high standards
of Corporate Governance. This Corporate Governance Statement discloses the extent to which
the Company has followed the 4th Edition of the ASX Corporate Governance Council’s Corporate
Governance Principles and Recommendations (‘ASX Principles and Recommendations’).
The Corporate Governance Statement has been adopted by the Board and is current as at 30 June
2021. The Statement can be found in the Company’s Corporate Governance section:
www.sequoia.com.au/about-sequoia/corporate-governance/
numbeR of holdings of equity seCuRities
The number of holders in each class of equity securities on issue in the Company is as follows:
security type
Fully Paid Ordinary Shares
Options expiring 30 June 2022 with an exercise date of $0.36
Options expiring 30 June 2024 with an exercise date of $0.45
no of
securities
no of
shareholders
131,905,374
2,150,000
2,000,000
695
8
7
distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
ordinary shares
number
of holders
no of securities
% of total
shares issued
191
134
62
186
122
695
74,603
367,357
504,951
7,271,986
123,686,477
131,905,374
0.06
0.28
0.38
5.51
93.77
100.00
8 3
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Shareholder information
options expiring 30 june 2022
with an exercise date of $0.36
number
of holders
no of securities
% of total
shares issued
-
-
-
1
7
8
-
-
-
1
6
7
-
-
-
100,000
2,050,000
-
-
-
4.65
95.35
2,150,000
100.00
options expiring 30 june 2024
with an exercise date of $0.45
no of securities
% of total
shares issued
-
-
-
100,000
1,900,000
-
-
-
5.00
95.00
2,000,000
100.00
number
of holders
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
voting Rights
The only class of equity securities on issue in the Company that carries voting rights is ordinary shares.
unmaRketable paRCels
The number of holders of less than a marketable parcel of ordinary shares is as follows:
unmarketable parcels as at 4 august 2021
Minimum $500.00 parcel at $0.660 per unit
minimum parcel size
holders
units
757
146
33,253
8 4
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Shareholder information
equity seCuRity holdeRs
Twenty largest quoted equity security holders
The Company only has one class of quoted securities, being ordinary shares. The names of the twenty
largest security holders of quoted equity securities are listed below:
ordinary shares
number held
% of total
shares issued
MR GARRY CROLE
uNRANDOM PTY LTD (uNRANDOM A/C)
BNP PARIBAS NOMS PTY LTD (DRP)
EXLDATA PTY LTD
COJONES PTY LTD (JONES FAMILY NO 2 A/C)
STRATEGIC VALuE PTY LTD (TAL SuPER A/C)
HuNTLEY GROuP INVESTMENTS PTY LTD (HuNTLEY GRP INVESTMENT A/C)
J P MORGAN NOMINEES AuSTRALIA PTY LIMITED
TOCLO INVESTMENTS PTY LTD (THE TLC INVESTMENT TRuST)
LIBERTAS SOLuTIONS PTY LTD (MARK EuVRARD FAMILY A/C)
MR NEIL CLIFFORD DuNCAN
MR PETER STIRLING + MRS ROS STIRLING
TIBARRuM PTY LTD (PAuL ROBINSON FAM S/F A/C)
VONETTA PTY LTD (TRBC S/F A/C)
NATIONAL NOMINEES LIMITED
RuFFY STEEDEN LEGACY PTY LTD (RuFFY STEEDEN LEGACY SF A/C)
MR ANTHONY CHRISTOPHER JONES
LEOPARD ASSET MANAGEMENT PTY LTD
TRIFERN PTY LTD (SuPER FuND A/C)
DMX CAPITAL PARTNERS LIMITED
substantial holdeRs
11,026,733
10,886,746
7,957,068
7,129,800
6,529,110
5,898,894
4,210,000
4,020,588
3,505,902
3,310,000
2,960,000
2,237,500
1,885,000
1,678,101
1,643,347
1,560,000
1,524,303
1,495,697
1,480,627
1,400,000
8.36
8.25
6.03
5.41
4.95
4.47
3.19
3.05
2.66
2.51
2.24
1.70
1.43
1.27
1.25
1.18
1.16
1.13
1.12
1.06
82,339,416
62.42
The names of the substantial holders in the Company and the number of equity securities in which those
substantial holders and their associates have a relevant interest, as disclosed in substantial holding
notices given to the Company, are as follows:
ordinary shares
date of last notice
lodged
number held
% of total
shares issued
ANTHONY & RYAN YOuNG
COJONES PTY LTD
MR GARRY CROLE
uNRANDOM PTY LTD
ACORN CAPITAL LTD
21 June 2021
26 July 2018
26 July 2018
26 July 2018
2 September 2020
14,485,897
13,817,804
11,401,500
11,974,738
6,525,181
11.00
11.71
9.66
10.15
5.15
8 5
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Shareholder information
RestRiCted seCuRities
There are no restricted securities on issue.
seCuRities subjeCt to voluntaRy esCRow
There are no securities subject to voluntary escrow.
otheR infoRmation
The Company conducted on-market share buy-back starting from 1 July 2020 and ended on 30 June
2021. No shares were bought as part of the buy back.
There are no issues of securities approved for the purpose of Item 7 of Section 611 of the Corporations
Act which have not yet been completed.
No securities were purchased on-market during the reporting period under or for the purposes of an
employee incentive scheme or to satisfy the entitlements of the holders of options or other rights to
acquire securities granted under an employee incentive scheme.
8 6
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Directors
Corporate directory
Garry Crole
John Larsen
Kevin Pattison
Charles Sweeney
Company secretary
Rebecca Weir
Notice of annual general
meeting
The Company advises that its Annual General Meeting proposed
date is 18 November 2021. The time and other details relating to the
meeting will be advised in the Notice of Meeting. In accordance
with the ASX Listing Rules and the constitution, valid nominations for
the position of Director are required to be lodged at the registered
office of the Company, 35 Business days before the meeting - being
5:00pm (Melbourne) on 30 September 2021.
Registered office
Level 7
7 Macquarie Place
Sydney NSW 2000
Telephone: + 61 2 8114 2222
Facsimile: + 61 2 8114 2200
Principal place of business
Level 8
525 Flinders Street
Melbourne VIC 3000
Share register
Registry Direct Limited
Auditor
PO Box 18366
Collins Street East VIC 8003
Telephone: 1300 556 635
Facsimile: +61 3 9111 5652
William Buck
Level 20
181 William Street
Melbourne VIC 3000
8 7
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021 Corporate directory
Bankers
National Australia Bank
330 Collins Street
Melbourne VIC 3000
Westpac Australia Bank
Royal Exchange, Cnr Pitt & Bridge Streets
Sydney NSW 2000
Maldon & District Community Bank® Branch of Bendigo Bank
81 High Street
Maldon VIC 3463
Commonwealth Bank of Australia
Level 20, Tower 1 Collins Square
727 Collins Street
Melbourne VIC 3008
Australia and New Zealand Banking Group Limited
388 Collins Street
Melbourne VIC 3000
Stock exchange listing
Sequoia Financial Group Limited shares are listed on the Australian
Securities Exchange (ASX code: SEQ)
Website
www.sequoia.com.au
8 8
Sequoia Financial Group limited AnnuAl RepoRt — 30 June 2021