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ANNUAL REPORT 2009
Make your Wealth Creation
Count
Our vision is clear;
we aim to excel in both our financial performance
and service to clients andthe community.
Our mission is our challenge;
to be an ethical, efficient and cost effective provider of services to our franchisees and members,
so they can in turn build successful, independently-owned financial advisory businesses.
2002
1997
CountFin
wealth-e-account®
1999
2005
1987
2000 2004
1998
Count Financial Limited (Count) is Australia’s largest independently-owned franchised network of financial planning/wealth accountants and advisers. Count has over
$17 billion of clients’ funds and loans under advice and is listed on the Australian Stock Exchange (COU). Count comprises two franchised networks of around 400 firms
Australia-wide – Count Wealth Accountants for professional accountants in public practice and Count Financial Limited for independent financial advisers (IFAs). We also
have a growing network of almost 300 mainly accounting and financial firms which are Members of finconnect and utilise services that are not related to our Australian
Financial Services Licence. These services include home loans, business loans and business asset and equipment finance. We use our resources and buying power to
provide our network with quality services, support, systems and competitive products so that our advisers can give both sound and cost-effective advice to Australians.
CONTENTS
Our Track Record 4
Financial Highlights 5
Operating Profit/EBIT Results 6
Chairman’s Report 8
CEO’s Report 10
Investments and Savings 14
Wealth Protection 15
Research and Compliance 16
The Future Counts 18
Count Team 20
Annual Conference 22
finconnect 24
Countplus 26
CountGPS 28
Business Growth and Development 29
Our Franchisees 30
Count Charitable Foundation 32
Board Profiles 36
2007
Risk Report 38
Corporate Governance 40
Directors’ Report 44
Audit Independence Declaration 56
FINANCIALS
Income Statement 58
2007/08 Balance Sheet 59
Statement of Changes in Equity 60
Cash Flow Statement 62
Notes to the Financial Statements 63
Directors’ Declaration 103
2008
Independent Audit Report 104
ASX Additional Information 106
Investors’ Information 107
Corporate Directory 108
2008/09 – The Year in Brief 109
Shareholders’ Calendar 110
Our Track Record
Count’s History
Incorporated > August 1980 as a private company
Listed on Australian Stock Exchange > 12 December 2000
Consecutive Profits > 29 years
Financials
Pre-Listing Post-Listing
1999 2000 2001 2002 2003 2004 2005* 2006 2007 2008 2009
Earnings before interest, 2.93 4.12 5.88 6.15 8.06 10.85 15.6 23.18 28.92 33.42 23.43
investments income
and tax (EBIT) ($M)
Net profit after-tax ($M) 3.37 3.88 4.05 4.72 5.87 9.01 11.53 17.6 22.69 21.30 19.37
Dividend paid and 2.50 3.36 4.40 4.84 5.26 7.74 10.28 14.02 19.21 22.03 25.66
proposed ($M)
Earnings (¢ per share) 2.15 2.68 4.10 5.12 7.60 9.53 8.70 7.60
Dividend paid and 2.20 2.42 3.50 4.50 6.00 8.00 10.00 7.00
proposed (¢ per share)
* Indicates adjusted for new International Accounting standards (IFRS).
EBIT Earnings Per Share Dividends Per Share
EARNINGS BEFORE INTEREST, (CENTS) POST-LISTING (CENTS) POST-LISTING
INVESTMENTS INCOME AND TAX ($M)
$35 12 12
$30 10 10
$25
8 8
$20
6 6
$15
4 4
$10
2 2
$5
$0 0 0
2009
2001
2002
2003
2004
2005
2006
2007
2008
2001
2002
2003
2004
2005
2006
2007
2008
2009
1997
1998
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Our aim is to grow our earnings per share by 20% pa by taking full We pay quarterly fully franked
advantage of our scale and franchising structure. dividends and we aim to grow our
dividends by an average of 10% pa.
4 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
Financial Highlights
FINANCIAL 2009
Operating profit (EBIT) Down 30%
Net profit after-tax (NPAT) Down 9%
FINANCIAL 2009 Targeted Achieved Targeted 2010
Earnings per share Down 13% + 20% X + 20%
Dividend per share Down 30% + 10% X + 10%*
Expense/income ratio 45% < 40% X < 40%
OPERATIONAL
Funds Under Advice (FUA) Down 14%
– Investment platforms
Total FUA Down 16% As an advice company, quantitative
targets for new business are not appropriate.
Loans outstanding Down 1%
Insurance premiums (in force) Up 19%
*While Count aims to grow its dividends by 10% pa this may not be achieved in 2010, as for 2009, due to the need to fund new business opportunities.
≠ Count targets an expense/income ratio of below 40%. While this will be difficult to achieve in 2010, Count expects this ratio to reduce by keeping
expense growth low as financial markets recover and investing conditions improve..
Share Price Performance Graph: COU vs MARKET
DECEMBER 2000 – JUNE 2009 (WEEKLY)
Base of $100 COU
All Ords
$800
$700
$600
$500
$400
$300
$200
$100
$0
Dec 00
Dec 01
Dec 02
Dec 03
Dec 04
Dec 05
Dec 06
Dec 07
Jun 01
Jun 02
Jun 03
Jun 04
Jun 05
Jun 06
Jun 07
Jun 08
Dec 08
Jun 09
Count listed on ASX 12/12/2000
5
Operating Profit/EBIT Results
Table 1
2H09
Operating 03/04 04/05 05/06 06/07 07/08 08/09 Increase 1H09 2H09 increase
Profit/EBIT $M $M $M $M $M $M (Decrease) $M $M (Decrease)
1 Net fees and 11.20 12.25 14.10 16.13 17.34 14.29 (18%) 7.33 6.96 (5%)
Retail revenue
2 Asset-based 10.55 13.60 19.87 25.62 31.57 25.13 (20%) 13.72 11.41 (17%)
revenue
3 Other fees 3.53 3.86 3.01 3.24 3.07 3.12 2% 1.08 2.04 89%
4 Net Income 25.28 29.71 36.98 44.99 51.98 42.54 (18%) 22.13 20.41 (8%)
Less Expenses
5 Employment 7.85 7.91 7.70 8.23 8.82 9.06 3% 4.79 4.27 (11%)
6 Other Expenses 6.58 5.40 4.61 5.58 6.67 6.51 (2%) 3.34 3.17 (5%)
7 Share based - 0.80 1.49 2.26 3.07 3.54 15% 1.73 1.81 5%
payments
8 Total Expenses 14.43 14.11 13.80 16.07 18.56 19.11 3% 9.86 9.25 (6%)
9 EBIT 10.85 15.60 23.18 28.92 33.42 23.43 (30%) 12.27 11.16 (9%)
10 % Change 32% 44% 49% 25% 16% (30%)
11 Expense Ratio 57% 47% 37% 36% 36% 45%
NB: The above income figures are net of related expenses and as a result may vary from the financial statement figures.
6 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
Table 1 Line Item
1. Net Fees and Retail Revenue (Line Item 1)
This line item (down 18%) is fees and revenue from retail superannuation and investments, lending (through the
finconnect subsidiary), asset finance and life insurance. Strong growth from life insurance revenue partially offset the
decline in lending and investment income in this line.
2. Asset-based Revenue (Line Item 2)
Asset-based revenue (down 20%) has been impacted by financial market conditions. This line is driven primarily from
funds under advice (FUA) in 6 recommended platforms from 4 providers – BT/Westpac, IOOF (after acquisition of
Skandia), Colonial First State/CBA and Perpetual. FUA in these platforms was down 14% for the year. Traditionally
this item lags market movement. Over time, FUA is expected to resume its growth. Count is able to use its buying
power to improve financial arrangements from platforms and fund managers and so charge franchises less. In return
franchises are able to pass on better terms to their clients.
3. Other Fees (Line Item 3)
This represents income from franchise fees and other services. Approximately 50% of franchises pay no annual
membership fee as they contribute more to the above line items. It is expected that no established franchises will pay
an annual membership fee within a few years. Income from newer services such as SuperCentral and CountGPS have
partially offset the decline in franchise fee income.
4. Total Expenses (Line Item 8)
Expenses grew by 3%. Employment costs (line 5) remains the largest expense at $9.06 million (up 3%). Other
expenses (line 6) were $6.51 million, (down 2%). Share based payments (line 7) of 3.54 million (up 15%) relate to the
non-cash expensing of options granted to franchises and employees. The expense to income ratio increased to 45%
(see Table 2) primarily due to the 18% decrease in net income (line 4 in Table 1) caused by the deterioration in financial
market conditions. Count’s target is to reduce this ratio to back below 40%. Expenses are expected to reduce when
Countplus lists on the ASX, due in the 2010/11 financial year.
Table 2: Expense Control
98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 Target
69% 67% 61% 64% 61% 57% 47% 37% 36% 36% 45% < 40%
7
CHAIRMAN’S REPORT
29th year of consecutive profit
Welcome to Count’s ninth Annual Report as a listed company.
Profits and Dividends Countplus (CP) – Future growth engine
performs strongly
I am pleased to report a solid result in a very difficult
year. Net Profit After Tax of $19.37 million, down 9.1% Countplus (Page 26) is our professional service firm
(Earnings Per Share (EPS) down 12.6%). Operating aggregator that buys quality accounting and financial
Profit/EBIT (Earnings Before Interest/Investment Income services businesses with a view to listing the combined
and Tax) of $23.43 million, down 30% primarily due to business on the stock market. Whilst CP will only be
our revenue being down 18% as a result of the Global part owned by Count, it will become an important and
Financial Crisis and the resultant market down turn enduring long-term growth engine for Count.
expenses rose 3%. Our largely fixed expenses have
worked against Count’s profits this year but will, as it At the time of writing, CP has acquired a minimum
has in prior years, work for us when markets recover. of 25% interest in twelve accounting businesses
with more pending. CP has announced that it intends
Count’s reduced profits and the need for capital to fund to list on the ASX around the end of 2010 with a
further Countplus and other possible acquisitions has targeted 20 businesses. Most of those businesses
resulted in Count reducing its dividends for the first have been identified.
time since listing in 2000. A fourth and final fully franked
“Risk/Reward” dividend of one cent is to be paid on Acquisitions via CP to date have been low risk as
15 October, 2009. A first unchanged interim “Christmas” Count Management have generally known the
dividend of two cents fully franked has also been vendors for many years and as Count Franchisees
declared and is payable on 15 December 2009. their financial planning is already with Count, thereby
eliminating integration risks. Whilst the CP acquisitions
My expectation, at this time, is that Count’s profits will will be many, individually they will be small – generally
grow in 2010 and that Count can achieve its long term $3m - $6m in revenue and value. This diversification
goal for growing dividends at 10% pa where practical. via a portfolio of firms should also deliver a lower
The reduced dividend of seven cents is delivering a risk of underperformance.
return of 17.5% fully franked on the December 2000
list price of 40 cents. Despite the Global Financial Crisis our CP businesses
on average have grown their profits over the year and
since acquisition. All CP’s development and Head Office
expenses are being charged to Count’s profits as they
are incurred, however post CP’s listing, Count will not
incur any more CP costs and will receive a dividend from
its investment in CP as well as a 20% fee in the 2010/11
year to compensate Count for: costs incurred; services
rendered; concessional agreements entered into;
and risks taken. This once-off market based success
and expense fee/reimbursement will assist Count to
substantially lift its 2011 EBIT from current levels.
8 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
Barry Lambert
FOUNDER AND EXECTUTIVE CHAIR
MAN
CountGPS Count Share Price
CountGPS is a joint venture between Count and As shown on page 5, the Count Share Price has had a
CP investee, Specialised Business Solutions. rollercoaster ride in the last 12-18 months despite sound
profit guidance. Markets anticipate the future. Count’s
CountGPS is expected to be the platform for the business has been negatively impacted by the GFC and
CP accounting franchise. market downturn. Count’s business however is solid
CountGPS was first released at Count’s 2008 and will respond as soon as markets pick up. However
Conference and post the 2009 conference an upgrade growth in the retail market (where Count operates) will
was released. The user base has continued to grow be slower than in more recent times. The success of
to more than 148 firms and CountGPS has now been CP and CountGPS should compensate for the slow
released to non-Count accounting firms. return of the retail investor.
CountGPS and Acclipse Limited (Acclipse) have recently The Count Team
entered into a technology partnership to further assist
CountGPS members (and accounting firms generally) The Board was unchanged during 2008/2009 and our
to grow their revenue while managing workflows and Count Team remained very stable. Despite a difficult year
reducing workloads. Acclipse have over 1,000 practices in terms of markets our franchisees remain rock solid
using their software across Australia and New Zealand. and ready to service their large client base. The quality,
strength and stability of our total team are the reasons
CountGPS have also entered into a marketing why Count will continue to prosper. I remain proud of
agreement with Xero, an internet-based accounting their performance.
system which has the potential to revolutionise
accounting for small businesses and therefore the I look forward to meeting many of you at our 29th
way accountants do business. Annual General Meeting to be held in our offices Tuesday
10 November 2009 and urge you to vote in favour of the
Rationalisation of the Financial resolutions put to the meeting.
Advice Industry It has been a pleasure to serve you as Chairman
and I wish our shareholders good health, wealth and
Whilst opportunities are increasing, Count will only
happiness in the years ahead.
make purchases where the target is compatible with our
business and the price is right. Organic growth (apart
from our Countplus business) will remain our focus whilst
ever dealer groups remain excessively priced.
Barry Lambert | Founder & Executive Chairman
PS: If at any time you have any information that I
should know about, please feel free to ring me on
(02) 8272 0212.
9
CHIEF EXECUTIVE OFFICER’S REPORT
Make your wealth creation journey…Count
The theme for this year’s Annual Report is a reminder
that wealth creation is a journey.
Count has delivered a creditable EBIT result of this year we will take that service offering outside the
$23.43 million. This was down 30%, due to weakened Count network. This will help Count service and build
investment markets that have been impacted by the relationships with accountants outside of Count.
Global Financial Crisis. It has been a tough year for
The Count Wealth Accountants and Count Financial
shareholders, franchisees, investors and employees
Advisers brands remain the full financial planning offering
and the downturn has understandably brought their
for established accounting and financial planning firms.
confidence in investing under pressure. Restoring
As reported in previous annual reports, since the 2002
consumer confidence will take time and will largely
financial services reform Count’s strategy has been to
be determined by market volatility, the actions of
consolidate the Count Franchisees to ensure quality. This
governments and the solvency of some global financial
year ended with 418 Franchisees and we successfully
institutions. Whilst these factors may not be directly
recruited 15 new quality Franchisees into Count. The net
in our control, Count’s business is sound and remains
membership only grew by 1.5% primarily due to merger
well positioned to benefit when markets resume their
and acquisition activity and as some Franchisees moved
long-term growth via our trusted and long-standing
to finconnect to focus on their lending and asset finance
accounting based franchised network. Over the last
business. This year was a challenging year for recruiting
12 months Management have stayed focused on factors
firms, given most financial planning practices continue
within our control via our three-plank growth strategy.
to be under pressure as a result of market conditions
and moving to a new financial advisory network would
Count’s wealth creation journey is our be added work. Count maintains a strong position on
three plank growth strategy. research and compliance and we seek firms with good
Over the year Count’s Board Members and Management track records on this front. Our pipeline of future firms
have remained unchanged, and we continue to focus is strong and we believe we can attract new firms into
on our long term growth strategies, with some minor the network.
refinements to what has been discussed in previous We also offer prospective Count Franchisees a first
years. Our three-plank growth strategy is to: step entry position into financial services if they do not
want to start in the full financial planning advice model.
1. Grow the number of quality Members in the network;
Under this arrangement, firms can join as Members of
2. Enhance the productivity of existing Members in finconnect, a wholly owned subsidiary of Count, that
the network; and only offers lending and asset finance solutions. This
3. Add non-investment products, services model (see page 24) is also for established firms that
and businesses. simply want to use our solutions or refer to professional
Lending Managers. finconnect Membership now stands
We also aim to maintain strong cost control
at 296 firms nationally.
by Management.
Countplus has also opened another avenue to Count
Strategy 1: Grow the number of quality Members since acquired businesses must be licensed via
in the network Count to join. Countplus growth is progressing well
The Count network includes Count Franchisees, as outlined on page 26.
finconnect Members and Countplus firms. At the Count
conference in 2008, we launched CountGPS and
10 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
Marianne Perkovic
CHIEF EXECUTIVE OFFICER
MANAGING DIRECTOR
Full Financial Planning offering for
Accountants & Financial Planners
Mortgage aggregator for Members & Referrers for
Residential, Commercial Lending & Asset Finance only
Wealth Creation Integration Model for Accounting
& financial planning firms
Accounting based best practice templates, procedures
& tools website. Joint venture between Count and
Countplus Member Specialised Business Solutions
Strategy 2: Improve the efficiency of existing compliant documents. Further, this aims to free up
Members in the network Count Advisers’ time to effectively service the needs
of new and existing clients. This year weakness in
Our existing professional network is strong and stable.
financial markets saw demand for services decline.
To enhance our organic growth in the short to medium
As a result, we took this time to focus on training and
term our strategy is to improve franchisee efficiency.
developing our Advisers and delivering communication
Our focus is to systematise supporting financial planning
and education tools for investors. This improves and
processes and our commitment to this strategy is to
maintains our high quality advice standards and meets
ensure that clients of Count Franchisees pay for advice
ASIC requirements for professional development.
and not for the inefficiencies often involved in producing
We also focused head office resources to review our
operations to deliver efficiency solutions in the advice
Net Growth in Franchisees & finconnect Members,
as at 30 June each year process. We achieve this strategy through ongoing
Note: finconnect Members were known as ProfitPlus pre 2007 enhancements of Count’s proprietary internet-based
800 systems, which include WealthNet, an online knowledge
700 bank, and Wealth Planner, Count’s (financial planning
600 software). This year significant improvements were
500
delivered in the area of advice document generation for
400
300
Statements of Advice and Records of Advice.
200
100
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Count Franchisees finconnect Members
11
CHIEF EXECUTIVE OFFICER’S REPORT continued
“My overall impression is that Count’s procedures for monitoring and
supervising its representatives are of a high order. In fact, they are among
the best that I have seen anywhere.”
– Grant Holley, Holley Nethercote, Commercial Lawyers, AFSL Compliance Report: Dec 2008
Preferred Platform Update Funds Under Advice: Platforms
The core of our business is the preferred platforms 8 35
we use to facilitate the advice process. The revenue 7 30
generated through these platforms is reported as 6
$billions
$millions
25
5
asset-based income. Over the 12 months Funds under 20
4
Advice (FUA) has been impacted by market conditions 3
15
and declined by 14%, this compares to the industry 2 10
5
FUA which was down 23.6% and the All Ordinaries 1
0 0
Index decline of 26% for the same period. Jun 99
Jun 00
Jun 01
Jun 02
Jun 03
Jun 04
Jun 05
Jun 06
Jun 07
Jun 08
Jun 09
Strategy 3: Add non-investment products, services platform2 First Choice WealthFocus FUM
Skandia One FUM Wealth-e-account (incl. Essentials FUM)
and businesses Platform Income (Right hand scale)
To help Count Advisers provide a true one stop service,
we extend our service offering to include non-investment
products and services. Further, this strategy allows
Count Advisers and Count to diversify their businesses. Number of SuperCentral Deeds Established
This year we introduced:
• Pacfic East Coast, this is a direct property
buying service offered through an established
Accounting firm.
• Class Super, an online Self Managed Super Fund
Administration platform. Count also invested a small
stake in the company that owns Class Super
– Super IP.
Sept 06
Dec 06
Mar 07
Jun 07
Sept 07
Dec 07
Mar 08
Jun 08
Sept 08
Dec 08
Mar 09
Jun 09
Other successful and ongoing growth
services include:
• CountGPS: Count Growth Profit System as outlined
on page 28.
Cost control
• Outsourced Wealth Protection. To assist with
60 70
Australia’s current insurance gap, Count has a focus
60
on delivering effective solutions to help our network 50
50
service the Wealth Protection needs of their clients 40
$million
40
see page 15.
%
30
30
20
• SuperCentral: Launched over three years ago, this 20
10
service is an online Self Managed Super Fund deed 10
generation service. Since its inception, over 4,500 0
2002 2003 2004 2005 2006 2007 2008 2009
0
deeds have been generated. Total Expenses Net Income Expense to Income Ratio (%)
12 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
Maintain cost control by Management network, will be in a strong position to gain market share
and see growth opportunities through acquisitions.
Management and the team always look for further cost
efficiencies and improvements to position the business This year’s challenging market conditions were mostly
for the future without compromising our service offering borne by our Franchisees and finconnect Members,
or standards in both bull and bear markets. We don’t who had the difficult task of communicating with and
expand in bull markets to only have to shrink our educating their clients about the many factors outside
expenses in bear markets to deliver better results. This of their control. I thank and applaud their dedication and
year the income to expense ratio increased to 45%. determination to deliver the best possible outcomes to
This was mainly due to the Training & Education cost their clients and for their loyalty to Count.
of the network, as well as legal and accounting fees for
Thank you to our Count Team. Our team culture is to
the set up of our new businesses and services. We also
develop a group of business owner minded individuals –
invested further to maintain our technological edge. We
as such our team is rewarded through profit growth and
expect expenses to remain flat for the coming year.
share option scheme arrangements, which have both
been impacted. Despite this we had little turnover and
Thank you for making your wealth
continue to have a motivated team.
creation journey Count.
I always make myself available to discuss Count
We remain optimistic about the long-term prospects
with our shareholders. You are welcome to
of our industry. The nation is still faced with the same
contact me via phone (02) 8272 0215 or email
pre Global Financial Crisis events – inadequate savings
Marianne.Perkovic@count.com.au.
(as a nation we like to spend more than we save), and
secondly, underinsurance (we like to insure material Thank you for allowing Count to be part of your
possessions but not our income or life). Further, we are wealth creation journey.
supported by Australia’s compulsory superannuation
regime and the Australian financial service industry,
despite the ongoing examination and recent negative
media, is one of the world’s leaders.
We embrace industry developments that drive the cost Marianne Perkovic
of investment down for clients and we support and stay Managing Director and Chief Executive Officer
ahead of government and industry initiatives aimed at
simplifying the advice process. There is a lot of positive
change that will come and Count Management will
work with regulators and industry bodies to ensure
management of any change is in the right hands,
so industry participants don’t repeat mistakes and
the Financial Planning industry reputation as a whole
is improved.
Australians continue to need advice and the one stop
financial planning service Count offers means Count
Advisers can assist clients throughout their life stages
(see page 18). It is likely that industry changes will result
in some consolidation of advice providers and well
managed companies like Count, with a trusted and loyal
13
Investment and Savings
Count’s sound research process There is an ongoing need to educate Australians about
financial planning and seeking advice. It is never too
Count has a well established Research Committee and soon or too late for all ages to learn more about their
process for selecting the investment funds and platforms own financial security or the security of their family.
that our Advisers can choose for their clients based on
the suitability of their needs. The core of this process is The last 12 months has been difficult for Advisers and
using an external research house called van Eyk. Only clients to understand the Global Financial Crisis and
funds rated highly by van Eyk make it for discussion stay motivated about investing. However over the longer
at the monthly Count Research Committee. How has term a disciplined approach to savings, understanding of
Count supported our Franchisees to ensure our clients’ investment principles such as compounding and dollar
financial future is protected? cost averaging can assist with the journey of
wealth creation.
Superannuation As part of Investor Education initiatives, Count
The evolution of simpler super legislation allows more developed a national series of seminars in 2009 for
and more Australians to act on their long term goals advisers to assist with ongoing client education.
as well as gain access to more efficient savings and
Government incentives. It is also clear that Australians Australians need 3 pools of wealthTM
need advice and financial perspective to make their Having money for short, medium, and long term savings
savings go the distance in today’s society and pools is no longer just for the very wealthy – the 3 pools
in the future. of wealth™ are essential for every person to meet their
The Government is currently reviewing the financial goals throughout their lifetime. Count Advisers
superannuation system under the “Cooper Review”. are able to help clients of all ages and at all stages of life
Count will be making a submission to this review, due by efficiently plan ahead.
June 2010. Professional financial advice is increasingly Peace of mind wealth
important in light of rising health costs, increased life
This savings pool, ideally about six months salary, is
expectancies, and the extent of Government pension
easily accessible for emergencies and planned short-
payments in the foreseeable future. Count Advisers
term expenses, and might include Cash Management
assist their clients on choice of super fund, investment
Trust savings.
selection, contributing to super, and pension payments.
Also, Count’s unique network of financial planning Lifestyle wealth
accountants is a great strength to further assist clients to This pool of wealth includes savings invested for the
tax-effectively reach their financial goals. medium term, to afford lifestyle goals before retirement.
For all of these services, Count Franchisees continue Savings options might include managed funds, shares,
to be premier sources of professional financial advice in or investment properties.
communities around the country, with superannuation Retirement wealth
continuing as a key savings platform for all Australians. This is wealth to fund a secure, enjoyable, varied and
comfortable lifestyle in retirement. This might include
On the path to investment success superannuation, income streams, or self managed
Count offers a wide range of services. With the client super funds.
always in mind, investment products and opportunities
Protect all three pools of wealth!TM
are thoroughly researched (see page 16) and include a
Wealth protection can provide peace of mind, and could
diverse range of asset classes, countries,
provide benefits to maintain quality of life. Having done
and companies.
so much to support a client’s wealth creation, Count
Count’s wide range of quality investment choice means Advisers are in the best position to help protect that
that clients are given the best opportunities to reduce wealth as well.
risk, smooth out and increase returns over time, and
successfully reach their short, medium and long
term goals.
14 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
Protecting Wealth
The value of a quality advice service • Provision of strong training content at our Annual
Conference on a wide variety of topics by accessing
Through a proactive financial planning service, Count the resources of our Insurance partners. Additionally,
Franchisees provide their clients with the opportunity to several Insurers also shared their facilities and
ensure they are adequately covered so that their families resources by conducting Count-specific training days
do not have to face a serious financial shortfall in their throughout the year; and
time of need.
• Franchisees who choose to outsource their wealth
As there is significant variability in the types of policies protection service to specialists have been ably
available in the marketplace and with most clients supported by Count Franchisees Curo Financial and
requiring guidance on their individual needs, advice Special Risk Managers, whose services have gone
is crucial to ensure that protection decisions are from strength-to-strength.
customised and appropriate. The wealth protection
solutions offered by Count Franchisees involve skilful
advice and access to highly-rated products which offer A Count client story.
benefits over a wide range of health events in case of
death, disability or illness. Media attention continues to focus on the Global
Financial Crisis, however closer to home the Australian
Wealth Protection was a significant growth area for Institute of Health & Welfare (AIHW) found that 1 in 3
our Franchisees in FY2008/09, with New Business working age Australians (aged 25 – 64) are managing a
increasing by 52% from $4.6m to $7.0m. The premiums chronic disease, and that they are 60% more likely to not
be in the labour force, when compared to people without
managed overall also increased by over 19% from
chronic disease2.
$28.9m to $34.4m.
These statistics are reflected in real-life experiences of
How has Count supported our our Franchisees’ clients, such as Troy, his wife Slavica
Franchisees to ensure our clients’ financial and their three children. In 2002, Troy was working full-
time and his family had just purchased a new home.
future is protected? Soon after however, Troy was diagnosed with a malignant
This year, our commitment to support our brain tumour and given six months to live. He underwent
several operations and although his condition improved,
Franchisees in delivering a quality advice service
it was still terminal.
was demonstrated through:
Troy visited a Count Adviser to consolidate his
• Becoming an official supporter of IFSA’s Lifewise superannuation funds and, learning of his medical
campaign1 – an industry initiative aimed at educating history, the Adviser investigated Troy’s personal
all Australians on the dangers of underinsurance and insurance portfolio. Although it was too late to apply
what they can do to change that; for further cover, the Adviser discovered that Troy held
insurance through one of his super funds. This led to
• The release of a range of strategies in February 2009, a claim and a successful payout to Troy and his family.
anticipating that, given current economic conditions,
While the payout was quite worthwhile as it has helped
some clients may experience cashflow issues and
his family manage their debt, it was insufficient to replace
would require alternative solutions to their wealth the financial contribution Troy would have made to his
protection needs; family’s ongoing needs had this difficult situation not
occurred. This is an example of how Count Advisers
• Addressing the needs of our small to medium
assist their clients.
enterprise (SME) clients in specialist advice areas
such as Business Succession Planning, through a
series of webinars presented by technical experts and
1. www.lifewise.org.au
the release of in-house support tools;
2. Australian Institute of Health and Welfare 2009.
Chronic disease and participation in work.
15
Count’s sound research process
We cannot predict market movements, but we can rely on our sound
research process to see us through the cycle.
It has been a difficult year for financial markets The aim of the van Eyk review is to identify whether
and consequently for any products that invest into the fund manager has a sound business and has the
the market. Plunging sharemarkets have rocked necessary people and processes to manage money
superannuation balances and investor confidence, in a disciplined and reliable manner.
leaving many to question the value of investing. Yet
As well as the initial van Eyk screening, Count has an
markets move in cycles, and whilst this bear market was
internal research committee made up from different
deeper than any we have experienced in recent times,
parts of the business with different skill sets and many
it did come after several years of very strong returns,
years of industry experience. The individuals that make
making the adage that sharemarket investing is a long-
up the research committee have experience in financial
term proposition all the more important. Likewise, the
planning, risk and compliance, business development,
argument for diversification has been strengthened in
investment management and technical issues. These
recent times.
key areas combine to make sure that we consider all
Whilst poor returns driven by the market downturn are facets including the regulatory world that we operate
never a pleasant experience they are part and parcel of in, consideration from an adviser’s perspective when
investing and generally not avoidable. What is not an talking and recommending products to clients and also
ordinary part of investing and is avoidable are investment an understanding of the investment process behind the
failures. Investments that sound too good to be true products that actually make it onto our APL.
probably are, but it is not until the market turns down
This additional level of oversight ensures that we get a
that these types of investments come undone.
wide, yet focussed, input into the products that Count
Fortunately for clients invested through Count, our advisers can ultimately recommend to clients.
strong research process has meant that we have not
had the likes of Westpoint, Basis Capital and Great It’s not just the investment rating,
Southern on our Approved Product List. our balanced approach to investing
Before a product can get onto the Count APL and be
ensures that…..
able to be recommended to clients, it goes through Not all clients are the same and as such we do not
several stages. adopt a one size fits all approach to investing. Different
clients have different levels of risk tolerance and so we
The initial stage is outsourced to an independent
adapt product recommendations to suit. Most clients
research consultant, van Eyk, and only those funds
have a diversified portfolio across a number of different
with the highest rating make it for discussion at Count’s
asset classes and, whilst the mix between growth assets
monthly Research Committee meetings.
(such as equities) and defensive assets (such as cash)
The van Eyk process aims to identify superior fund can vary, this approach means that Count clients have
management organisations, with particular attention not, on the whole, been 100% exposed to falls
paid to: in sharemarkets.
• Business management; We also adopt a cautious approach to geared
• People and process; and investing, more commonly known as margin lending,
• Efficiency of value added. as we recognise that this type of investment is not for
everyone. Whilst risk tolerance is one consideration
16 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
R E S E A R C H C O M M I T T E E : ( f r o m l e f t ) T I M S A N D E R S O N , Te c h n i c a l S e r v i c e s M a n a g e r ; M I C H A E L S P U R R , C h i e f F i n a n c i a l
O f f i c e r ; P A U L I N E M C F A R L A N E , S e n i o r E x e c u t i v e – B u s i n e s s D e v e l o p m e n t a n d M a r k e t i n g ; M A R I A LY K O U R A S , S e n i o r
Executive Compliance, Risk and Legal; DEAN BORNOR, Senior Executive – Advice; MARIANNE PERKOVIC, Chief Executive
Officer; RACHEL GRIFFITH, Senior Executive – Research and Product; MICHAEL BEER, Research and Platforms Manager
when it comes to gearing, other considerations include Count’s research process through its many steps,
the age of the client and the ability to service any our research committee, diversified investment
associated debt comfortably. As such, our research approach and the added rules we place around certain
committee have put strict guidelines in place that need investments ensure that we are best placed to ride out
to be followed by Count advisers when it comes to the tough times and take advantage of the good times.
recommending a gearing strategy to clients. These
guidelines have been in place for many years and have
ensured that, through the current market downturn,
Count’s clients have not experienced the heartache and
stress that has been experienced by other investors that
were invested using more aggressive gearing strategies.
Our disciplined and transparent research
approach has held up well in difficult
market conditions.
We cannot predict the market cycle, but we do know
that every bear market ends in a bull market. The SOLUTION
investment cycle moves on and, whilst it is easy to make
hay when the sun shines, when things turn it is not so AHEAD
easy; as Warren Buffett once said “You only find out who
is swimming naked when the tide goes out”.
17
The Future Counts
Relationship Relationship
Young & Single In a Relationship With Young Children WithAdult Children Retired
• Superannuation • Superannuation
strategies and pensions
• Investment • Managing
strategies income
• Planning and
strategies for • Mortgage
• Sustaining long term • Lifestyle
superannuation
investment and expenses
• Family expenses
• First job, superannuation • Children’s Education
managing income • Medical
• Lifestyle expenses expenses
• Self-employed • Finance – mortgage,
• Income protection benefits car, renovations • Retirement goals
insurance • Estate planning
• Finance – mortgage, • Family expenses • Expenses and
• Lifestyle expenses, • Care and living
car, renovations financial care
education, travel • Investment expenses
for children living
• Income Protection strategies at home
• Setting goals • Government
Insurance
• Government support
• Estate planning
• Paying rent, or • Risk and Trauma allowances
saving for first home Insurance • Transition to
• Lifestyle expenses retirement
• Planning for future • Government
savings allowances • Retirement goals
• First investments, • Lifestyle expenses • Estate planning
savings plans
• Estate planning • Wealth Protection
Business Owners
• Self • Employee • Business • Business • Equipment • Succession
Managed benefits Insurance loans finance planning
Super funds & leasing and
managing
business
risk
18 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
“Count continues to deliver
products and services that
expand the way each adviser can
service their clients – ensuring a
full service approach in the best
interests of each client, whatever
their stage of life.”
19
Count Team
The Count network is supported by Count’s head office to legislation and the regulatory framework, this puts
Team. The company aims to foster a Team culture of Count many steps head of other groups. Their collective
business owner minded individuals. Count’s Senior experience ensures we can evolve and adapt to any
Executive Team has the responsibility of attracting, future changes.
retaining and developing our Team. The company gives
Team Members access to education, training and skills Future Senior Executives
development and places importance of maintaining a
Succession planning is important to any organisation
healthy work life balance. Career development is also a
and Count continually look to develop our talent to
journey and we try and ensure we create opportunities
provide for future opportunities. We focus on developing
for our Team to grow as the company grows.
paths for people starting in financial services right
through to developing careers in management and/
Senior Executives
or specialist roles. Some current Stars on this path
The Chairman, Barry Lambert and Chief Executive are pictured below with Barry Lambert and Marianne
Officer, Marianne Perkovic are supported by Count’s Perkovic. They are Shane Silver, Tim Sanderson, Michael
Senior Executive Team. Each have their area of expertise Beer and John Mihail.
and together they form Count’s leadership team. Their
objective is to provide excellence in service and delivery
of the operational objectives, whilst contributing to the
company’s current strategy and future vision. Most of
the Executive Team have been with Count for over 10
years and have built strong long standing relationships
with our franchisees. Further, their tenure means they
have worked through bull and bear markets, changes
Future Senior executiveS
From left: Shane Silver, Michael Beer, tim Sanderson, John Mihail
Senior executiveS
From left: Stephen Aguilera-Mendoza, rachel Griffith, Michael Spurr,
Maria Lykouras, colin Simkin, Pauline McFarlane, Dean Bornor, tanya Sale
20 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
21
Count’s Annual Conference
Count’s annual conference is a premier training event in the
financial services industry.
This year Adelaide hosted Count’s 24th Annual This year saw a record number of non Authorised
Conference. The conference provides opportunities Representative Accountants attend the dedicated
for franchisees and the industry to network in an accounting stream, enabling the accounting partners
environment which over the last 12 months, more than of franchisees to attend and learn more about financial
ever, has demanded us to deliver high quality on-going Advice solutions.
education, business development and the introduction
Count’s inaugural ‘Female Financial Planner of the Year’
of new services.
award was also presented. This award, in memory
The conference saw over 900 delegates, representing of the late Count Adviser, Julie Webb-Mole, will be
over 300 franchisees from across the country have presented at each Annual Conference going forward
the choice from over 100 workshops, covering core to recognise the achievements of an individual female
areas such as Superannuation & Retirement strategies, planner in the area of financial planning. This year’s
Compliance, Investment, Product and Business winner was Helga Baxter of local Adelaide firm, Crosby
Development. Including a Political and Economic Update Dalwood Pty Ltd. Helga joined Crosby Dalwood as
by The Honourable Paul Keating and The Current their dedicated Financial Planning support staff and
State of Play within our industry presented by Deborah decided early on that she wanted to help each client
Koromilas, Assistant Director, Financial Services with their individual goals. In 1997 Helga became a
Compliance, ASIC. Count Authorised Representative and in 2004 became
a Director of Crosby Dalwood, whilst during this time
becoming a mother to two sons, Jacob (9) and Harry (5).
22 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
The Count Annual Conference attracts Australia’s
largest fund managers, service providers and prominent
industry figures.
Count’s business partners proudly support events
and training including the Annual Conference where
Franchisees can take advantage of a range of industry
specialists and networking opportunities. Likewise,
Count’s business partners take the opportunity to
network with Count’s franchisees from around the country.
As Australia’s largest independently-owned network of
financial planning accountants and not tied to a product
provider, Count is in a position to carefully consider the
best products to suit the needs of clients. Therefore
Count’s business partners are considered for their good
service, competitive pricing and overall reduced risk,
so that Count Advisers have better access to sound From Left: Kristie-Lee Webb-Mole, Alan Webb-Mole, Helga Baxter,
Alexander Webb-Mole
investment products for their clients as well as long
term and stable services to keep their businesses
running smoothly.
23
2008/09 has seen:
A combination of the Federal Government doubling Financial Planner or Lawyer. This is the market in
the first home owners grant for existing dwellings and which finconnect sits.
trebling for newly built homes;
finconnect membership continues to grow across
The Reserve Bank of Australia lowering the cash interest Australia due to its wide range of lending and finance
rate to a 49-year low of 3% in a bid to cushion the solutions and its market position in the professional
economy from the global economic downturn; sector. As a wholly owned subsidiary of Count,
Lenders withdrawing from the market; finconnect distinguishes itself from many finance
providers by its strong parent and maintains its
The tightening of lending policies; and
independence by not being tied to any loan provider
Contraction of the commercial market due to lack or product.
of available funding.
In February 2009 finconnect was a winner in the
It would be fair to say that the last twelve months has category ‘Wholesaler/Originator Aggregator of the Year’,
been seen challenging times in the lending industry. at the MFAA 2009 Excellence Awards. A testament to
What all of this provides to our Members is an our Members and Lending Managers.
opportunity – an opportunity for the professional sector So what does the next twelve months hold? The big four
to really make their mark in the lending arena. banks will continue to dominate for the time being but
All loans outstanding the tide will eventually turn and there will be other players
in the market to ensure competition is alive and healthy;
5
our Members’ businesses will have weathered the storm
4 and grown in a market where others have failed.
$billions (pa)
3
2
1
0
Jun 00
Jun 01
Jun 02
Jun 03
Jun 04
Jun 05
Jun 06
Jun 07
Jun 08
Jun 09
There has been an exodus of mortgage brokers from
the industry which clearly indicated that they did not
have the necessary structures in the business to sustain
a downturn. This is contrasted with the Franchisees
of Count and finconnect who, as a whole, have
appreciated the value of having a wider customer service
offering for some time by having in place additional
income streams other than their core business.
More and more of the general public will turn to those
they trust in this environment such as their Accountant, From left: Marianne Perkovic, tanya Sale,
Barry Lambert
24 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
“As well as strengthening
Count’s existing lending
services, finconnect’s
objective is to offer an
exceptional opportunity
for both finconnect and
Count Franchisees to
expand their businesses
and provide new levels of
service to clients.”
- Tanya Sale, finconnect General Manager
25
“Countplus provides the opportunity for Principals to unlock the value
of their business, share best practice and aggregation benefits whilst
maintaining their branding and management control. It also provides an
ongoing incentive scheme for Principals and employees to act and think
like business owners, thereby ensuring their loyalty and commitment to
the business over the long term”
– Jeremy Wardell, Chief Executive Officer, Countplus
Countplus™ is a professional services firm aggregator To date Countplus has acquired a minimum of 25% in 12
seeking to acquire primarily accounting firms to list on accounting/financial planning businesses with combined
the ASX via Countplus and to evolve into a best practice revenues of $45M. It has an option to acquire the
accounting and wealth advice network. balance of their equity for Countplus shares on agreed
terms from 1 July 2010 prior to listing the business.
The Countplus business model is unique because it Five tuck-ins have also been completed by investees.
is based on a staged buy-out process pre-listing, the
structure of which provides incentives for profitable Countplus Listing
growth while minimising business and integration Countplus expects to list at the end of 2010 with around
risks. From a wealth creation perspective Countplus 20 fully owned businesses. Once we have secured the
provides a mechanism for Principals to obtain a listed 20 firms we will then concentrate on the listing before
market valuation of their business by participating in the resuming our targeted acquisition strategy and building
expected value uplift when Countplus lists. an accounting franchise.
Importantly Principals retain day to day management The IPO is expected to raise $15-$20M and it is
responsibilities and firm branding as well as benefiting proposed that existing Count shareholders will receive an
from an ongoing incentive scheme post listing that entitlement to take up all the shares in the public offering.
rewards both Principals and employees. Count will underwrite the IPO and remain Countplus’
largest shareholder post listing and Count will endeavor
This model is unlike the accounting consolidators who
to use its resources to ensure Countplus is a success.
have gone before who appear to have been focussed
on size and merging of businesses. Countplus is The graph below depicts actual cumulative NPAT against deemed
purchased NPAT for businesses that have been investees of Countplus
about quality and not size and post listing will resume for the full 2009 financial year.
controlled growth largely financed by the IPO and
Countplus Group Cumulative Earnings 2009
retained earnings. In the early years Countplus will aim
5
to purchase 5%-10% pa EPS growth. Organic growth
should average around 10% pa giving a targeted EPS 4
average growth of 15+% pa plus fully franked dividends.
$millions (pa)
3
The Global Financial Crisis has delayed some investee
2
recruitment over the 08/09 financial year, however, we
have a good pipeline of quality accounting and financial 1
services firms that will settle over the coming months 0
and more acquisitions will be made in early 2010.
Jul 08
Aug 08
Sept 08
Oct 08
Nov 08
Dec 08
Jan 09
Feb 09
Mar 09
Apr 09
May 09
Jun 09
Purchased NPAT
NPAT FY09
(NPAT = Net Profit after Tax before Amortisation)
26 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
C O U N T P L U S T E A M A N d B O A R d : ( f r o m l e f t ) B A R R Y L A M B E R T, C h a i r m a n ; L I N H T R U O N G , A c q u i s i t i o n s M a n a g e r ;
MARIANNE PERKOVIC, Director; JEREMY WARDELL, Chief Executive Officer; MICHAEL SPURR, Director;
S O P H I E T E A , B u s i n e s s A n a l y s t ; C A R E S S A N D R E W S , C o m p a n y S e c r e t a r y.
A brief summary of investee firms and their relative percentage contribution to Countplus budgeted EBIT
for the 2009/2010 financial year.
Lawrence Business Management – Perth WA Mogg Osborne – Regional VIC
The Principals of this corporatised accounting Located in regional Victoria at the centre
business are dedicated to providing a of Australia’s “food bowl”, the firm’s many
holistic solution for their clients that includes strengths include its established client
accounting, financial planning, lending relationships, its strong commitment to the
and legal services. local community and the value added services
Acquired 30 Nov 07 19% it provides.
Acquired 1 Jul 08 5%
The MBA Partnership – Gold Coast QLD
Crosby DalwooD & Co
Managed by a young Principal group, this Crosby Dalwood – Adelaide SA
business offers an extensive range of services This long established accounting business has
to help SMEs and taxpayers with all their one of the highest financial planning penetration
financial needs including accounting, levels relative to accounting services compared
taxation, corporate advisory and financial to other Countplus investees.
planning services. Acquired 2 Sep 08 4%
Acquired 30 Nov 07 6%
Cooper Reeves – Brisbane QLD
HMA Twomey Patterson – Regional NSW A new Count franchisee with four experienced
Servicing regional areas across south western principals one of whom is a main Board Director
NSW, this 5 office practice has operated for of CPA Australia. Cooper Reeves’ client mix
over 50 years and has built long term client is reflective of its transport hub location which
relationships and enjoys a high level of
includes manufacturing as well as the retail and
market penetration.
professional sectors.
Acquired 31 Jan 08 8%
Acquired 1 Nov 08 7%
Bentleys – Perth WA
The quality of this firm has been recognised MBT Accounting Services – Sydney NSW
by it being granted the exclusive Bentleys This well established accounting and financial
license for WA which has opened up additional planning business has a client mix that includes
networks and referral sources for the business. Australian branches or subsidiaries of multi-
Acquired 29 Feb 08 10% national corporations, SMEs, business owners
and high net wealth individuals.
Beames and Associates – Canberra ACT Acquired 1 Jul 09 9%
Highly competitive and driven, the Principals
of this business are well regarded in the ACT Evolution – Newcastle NSW
for their consulting advice and the tailoring This four Principal firm has bedded down a
of innovative expansion and wealth creation merger of two firms and is now located in new
strategies for their diverse range of clients. premises in a new industrial area within 15
Acquired 31 Mar 08 7% kilometres of Newcastle in the burgeoning Lake
Specialised Business Solutions – Brisbane QLD Macquarie district.
Centrally located in Brisbane, the business has Acquired 31 Jul 09 6%
a strong commitment to client service and best
Robson – Gosford NSW
practice. Since joining the Countplus group,
This two Principal firm is located at Gosford
this business has leveraged its internet-based
on the Central Coast between Sydney and
best practice services to approximately 200
firms via the “Count GPS” service which it has Newcastle. It has a best practice focus and
developed in a joint venture with is well established in this growth area on the
Count Financial. outskirts of Australia’s largest city.
Acquired 30 Apr 08 13% Acquired 31 Aug 09 6%
27
“We have used CountGPS to improve/re-engineer some processes as
we are always looking at better ways/more profitable ways of delivering
new initiatives to our clients.”
CountGPS is an internet based system of advanced
resources created for Accounting Firms to help them
grow their revenue, systemise their procedures and
reduce Partners’ and Directors’ workloads. The result
from using CountGPS is an increase in efficiency and an
improvement in the service provided to clients.
CountGPS is a 50/50 joint venture between Count
Financial Ltd and Specialised Business Solutions Pty Ltd
(SBS). SBS, a two Partner Accounting Firm with 24 team
members located in Brisbane, Queensland, has been
operating for over 19 years.
Included in the CountGPS system are the best available
document precedents, letters, reports, worksheets, From left: timothy Munro, Barry Lambert, Marianne Perkovic
and work processes, along with our exclusive ‘Client
Advice Wizards’. Using CountGPS, an Accountant can
generate Trust Deeds, Shelf Companies, Wills, Loan
manuals is available for self-paced learning about
Agreements and Confidentiality Agreements using
the entire CountGPS system and website, enabling
a simple, step by step online process. In addition,
Accountants and their team members to become
reports can be produced for clients outlining the most
familiar with the system and implement new processes
appropriate business structures for them and up to date
and procedures in a manner suitable for their firm.
estate planning advice. These are just a selection of
services Accountants can provide their clients using the CountGPS and Acclipse Limited (Acclipse) have recently
CountGPS system. entered into a technology partnership to further assist
CountGPS users to grow their revenue while managing
All legal documents generated using the CountGPS
workflows and reducing workloads. Acclipse have over
system are ratified and signed off by Cleary Hoare
1,000 practices using their software across Australia and
Solicitors. In this way, clients can be assured they have
New Zealand.
been provided with high quality advice without leaving
their Accountant’s office. In the instance where further CountGPS have also entered into a marketing
legal advice is required, CountGPS users have free agreement with Xero, an internet-based accounting
access to Cleary Hoare Solicitors. system which has the potential to revolutionise
accounting for small businesses and therefore the way
The exclusive processes in CountGPS allow Accounting
accountants do business.
Firm owners to effectively delegate high-value work to
junior team members with the confidence that they will More than 125 Accounting Firms across Australia are
get it right, the first time. A complete series of 19 training now using CountGPS!
28 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
A year to survive and thrive
“In the long term interests of our clients and our business, Count helps
us offer all of this to our clients, plus opportunities for more.”
In 1998 Lawrence Business Management (LBM) became The team have continued to deliver strong results
a Franchisee of Count with the vision to be able to and have positioned themselves as one of the most
provide the one stop full financial service to clients. successful Franchisees with the network, ranking within
Count’s Top 10 Franchisees nationally. The business
11 years later, with three offices in the suburbs of Perth joined Countplus in November 2007.
and Fremantle, Western Australia, this dynamic business
provides a total business solution for their clients that
includes accounting, financial planning and
legal services.
The economic downturn of 2008 forced many practices
to take a good look at how they delivered financial
services to their clients. However, with an enthusiastic,
dedicated team and a multi-disciplinary approach to
financial planning, Lawrence Business Management
survived and thrived. The firm has used their solid
relationship with all clients to work through a difficult
market cycle.
The ability to deliver quality advice across a broad
spectrum of areas such as wealth protection,
superannuation, investments and finance, means the
team at Lawrence Business Management service the
needs of their clients as each grows through their
personal life cycle.
LAWrence BuSineSS MAnAGeMent
FinAnciAL PLAnninG teAM
Left: SMOKIN’ JOE LAWRENCE,
Founder and Principal of
Lawrence Business Management,
SMoKin’ Joe LAWrence packing a punch at a
Corporate Charity event
that raised $300,000.
29
Our Franchisees
Members of the highest quality. Advisers you can count on!
“With our outstanding value proposition, we are the perfect
fit for high quality professional accounting firms”
– Colin Simkin, Senior Executive National Network Development
Our Franchisees: Evolution Wealth
Evolution Business & Personal Advisers is a Chartered
accounting practice and a leader in the provision of
accounting, advisory and financial services to Lake
Macquarie, Newcastle and the Hunter region generally.
Evolution Business and Personal Advisers was born from
the merger of two longstanding Chartered Accounting
firms, Sefton & Loudon and O’Shea Glover. The two
firms, with combined experience of nearly 150 years,
were renowned for providing high quality accounting,
taxation and business advisory services to clients in a
personal manner. The impetus behind the creation of
Evolution, was to develop services that will be of value
to clients across their business, professional and
personal lifecycles.
evoLution WeALtH teAM
The firm joined Count in 1993 enabling them to provide
a broad range of financial planning services to meet
their client’s growing needs. As a long standing and
highly successful Franchisee, this firm’s achievements
have been recognised as a recipient of the Award of
Excellence every year since 2000.
“The association Evolution has
with Count is imperative to our
business. It allows us to deliver
high quality financial services
as part of our lifecycle based
approach that we use with
our clients.”
evoLution’S neW PreMiSeS
– Warren Hodgson, Partner, Evolution Wealth
30 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
Our Franchisees: Cooper Reeves
Established in 1989 by Paul Cooper, a former
Queensland President of CPA Australia, the firm
expanded the accounting business to include David
Reeves as a director in May 1997 to form Cooper
Reeves. Since then three other directors, Peter Malanos,
Nathan Manning and Sarah Smith have come on board
as fellow directors.
Cooper Reeves is a professional Brisbane accounting
firm which has been providing business taxation,
consulting, accounting and financial planning services
to local, national and international businesses.
In October 2008, Cooper Reeves joined Count, having
moved from another dealer group. In addition to joining
Count, the firm has also become part of Countplus. tHe cooPer reeveS teAM
“Our strong Business Services
background allows us to offer
highly personalised financial
advice, providing clients with
value added solutions to meet
their needs and objectives”.
– Paul Cooper, Director, Cooper Reeves
31
Giving back to the community
The Count Charitable Foundation (CCF) was founded
in 2004 and has donated over $2 million to a wide
range of charities across Australia and overseas.
The CCF’s objectives are to: Our initiatives in 2008/09
• Accumulate capital, now over $6.3 million, to allow The Australian Red Cross Victorian Bushfire Appeal;
us to increase the amount of donations we make The Community Enterprise Foundation (Russell Crowe,
over time; Luc Longley & Coffs Harbour Council Victorian Bushfire
Appeal); Salvation Army, Mission Australia, The Smith
• Provide an easy and accessible way for Count
Family, Youth off the Streets, Arrow Bone Marrow
staff, advisers and clients to realise their charitable
Transplant Foundation and Social Ventures Australia
intentions; and,
received some of CCF’s larger donations for the financial
• Encourage philanthropy in Australia and across the year. The wider Count Network and Count team showed
wider community. their support for the Prostate Cancer Foundation’s
All Count Franchisees and Count team who opt to Movember and the Cancer Council’s Australia’s Biggest
donate to the CCF regularly are eligible to recommend Morning Tea.
the charities of their choice for consideration by the CCF. The CCF Advisory Committee, including 3 adviser
Therefore, with the help of the CCF, Count Franchisees representatives from the Count network, meets to
and Count team can continue to support their local recommend distribution of capital. Count Franchisees
charities or causes. and Count team who contribute regularly to the
CCF are eligible to put forward charities and causes
Donation strategy for consideration.
Many Count Franchisees and Count team remain active
The CCF Board reviews each charity’s last audited in fundraising and volunteering in their communities as
financial statements and review what percentage of their well as donating on a regular basis so that CCF initiatives
revenue actually reaches the people or cause that they can continue successfully. We thank everyone for your
were established to support. This helps the CCF Board continued support.
identify charities most worthy of its support.
$3,000,000
Support is provided on a national level and for the $2,255,183
$2,000,000 $1,740,663
interests of Australians and other people, with a donation
$1,036,725
$1,000,000
strategy outlined on the following areas:
$900,000
• Health/Medical Research and prevention
• Welfare Groups $800,000
• Education for prevention of anti social behaviour $700,000
• Natural Disasters $600,000 $597,420
• Environment preservation and protection
$500,000
• Overseas Aid/Charities
$400,000
$300,000
$200,000 $186,000
$100,000
$0
2004/05 2005/06 2006/07 2007/08 2008/09
32 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
Community Counts
Health/Medical Research and Prevention
Supporting Movember across the Count network
Movember is a regular event at Count Head Office, with more and
more Count Franchisees taking part every year to raise funds and
awareness for men’s health including prostate cancer and depression.
In November 2008, the CCF supported the Movember Foundation
with $20,000.
Count Turns Pink for the Cancer Council
In support of the Cancer Council’s Pink Ribbon Day in October 2008,
the CCF donated $20,000 in aid
of research toward a cure for Breast Cancer and in
support of those families who have been touched by
the disease.
Count treks Kokoda for the Heart Foundation
In October 2008 five Count team members tackled the
gruelling 96km Kokoda Track to raise money for the
Heart Foundation. Australia lost more than 600 Australian
soldiers in the Kokoda campaign in 1942. Today
cardiovascular disease claims 48,000 Australian lives every year or
one person every 10 minutes.
The CCF donated $15,000 to the Heart Foundation and a further
$3,000 was raised by the trekkers.
“My dad had a triple bypass operation
which really made me realise how
important it is to take care of your heart.
By taking on this challenge I am not only
improving my own health, but also raising
vital funds to help the Heart Foundation
continue their life-saving work” – Vikash Prasad
Cancer Council of NSW –
Australia’s Biggest Morning Tea $10,000
Cancer Council of NSW works to undertake and fund cancer research; prevent and control cancer and provide
information and support for people affected by cancer.
The Count Team joined in the activities of a “Mad Hatters Tea Party” to raise funds for the Australia’s Biggest Morning Tea
in May 2009. Noel Davis, Chairman of CCF presented a cheque for $10,000 to Cancer Council of NSW.
33
Community Counts (continued)
Natural Disasters involved. The competition culminated in an exhibition of
the student’s work at Count’s Head Office in the foyer of
the building near Circular Quay.
The Foundation will continue to assist disadvantaged
CCF donated $50,000 to the Channel 9 Telethon young people to achieve their goals by supporting Youth
Victorian Bushfire Appeal Off The Streets with a further $20,000 in support over
the next two years.
CCF also donated $50,000 to The Community
Enterprise Foundation which joined contributions from
Russell Crowe, Luc Longley (from WA who played for the Welfare
Chicago Bulls), Coffs Harbour City Council, businesses
and individuals from the Coffs Harbour region and from
The CCF donated $40,000 to the
around Australia.
Salvation Army Red Shield Appeal
The funds will be applied towards building a 200 seat which is used to assist people in need in
theatre in the new Marysville township. This will give the Australia regardless of their nationality, race,
town and surrounding district a facility that it did not belief, sexuality, ability or behaviour. This includes those
have before the fires, and it will also create a focal point who are homeless; those who suffer domestic violence
for drawing visitors and tourists for many years to come. and families who struggle with the weekly budget.
Funds raised also support programmes like drug and
alcohol programmes, family housing programmes and
Behavioural Education women’s refuges.
The Smith Family –
Financial Literacy Program
$20,000
The Count Charitable
Youth off the Streets Foundation’s support has
$10,000 – Arts Program contributed to the delivery of The
The CCF recognises the Smith Family’s Financial Literacy program across
therapeutic benefits that Australia, providing positive outcomes for over a
creative stimulation can thousand disadvantaged children and more than
bring to young people who 300 families in
are overcoming traumatic 2008/2009.
circumstances. The
Foundation has supported
the Youth Off The Streets Art Therapy Program by
contributing a $10,000 grant to provide art materials and
education for homeless and disadvantaged teenagers
who are accessing the charity’s schools.
The Foundation also facilitated an art competition
to celebrate the achievements of the young people
34 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
Mission Australia – Overseas Aid
Triple Care Farm $10,000
Triple Care Farm is a residential Opportunity International $10,000 together with
program assisting young people $10,000 to be matched by Perpetual Investments
aged 16-21 at extreme risk whose Micro-finance is a sustainable, scaleable poverty
relationship with their family and other support networks alleviation response.
has broken down. Triple Care Farm covers 45 hectares
of farmland, offering up to 18 young people at a time the CCF and Perpetual donated a total of $20,000
chance to develop emotionally, socially and vocationally to Opportunity International’s – Sharada
in a safe and secure environment. Micro-Finance Program
The funds Opportunity International receives is lent to
clients as loans. The success of the clients creates
a ripple effect – benefiting the lives of clients’ family
members and communities. As clients invest their
loans into expanding their businesses, many will go
on to employ members of their families and the
local community
Environment
Australian Conservation Foundation –
Murray/Darling Basin Program $20,000
For over 42 years The Australian Conservation
Foundation has been a strong voice for the
environment, promoting solutions through research,
consultation, education and working with the
community, business and government to protect,
restore and sustain our environment.
The Australian Conservation Foundation is working
towards returning the Murray River back to its natural
state and to ensure the future of natural water systems
everywhere by pushing for a National Wetlands Initiative.
35
Board Profiles
BARRY MARTIN LAMBERT MARIANNE PERKOVIC NOEL ALBERT DAVIS JOYCELYN CHERYL MORTON
F C PA , S F F i n B.Ec, MBA LLB, AAII B . E c , F C PA , F C A , F C I S
Executive Chairman M a n a g i n g D i r e c t o r, C h i e f Non-Executive Director Non-Executive Director
Member of the Board Executive Officer Chair of the Board Risk and Chair of the Board Audit
Remuneration Committee Member of the Board Compliance Committee Committee
Member of the Board Risk and Remuneration Committee Member of the Board Audit Member of the Board Risk and
Compliance Committee Member of the Board Risk and Committee Compliance Committee
Director of Count Pty Ltd Compliance Committee C h a i r o f C o u n t P t y L t d ( Tr u s t e e
( Tr u s t e e o f C o u n t C h a r i t a b l e Director of Count Pty Ltd of Count Charitable Foundation) Joycelyn Morton is a Fellow of CPA
Foundation) ( Tr u s t e e o f C o u n t C h a r i t a b l e Australia, the Chartered Institute of
Foundation) Noel Davis is a Barrister practising Company Secretaries in Australia
Barry is a Fellow of CPA Australia Chair of Count Charitable in Sydney and has practised in and the Institute of Chartered
and a Senior Fellow of FINSIA. Foundation Advisory Board superannuation, life insurance and Accountants in Australia.
Barry Lambert established Count in Marianne has been an Executive tax for in excess of 30 years. He is
a former partner of legal firms Hunt Joycelyn’s extensive career spans
1980. Prior to establishing Count, Director of Count Financial Limited
& Hunt and Clayton Utz and was more than 28 years:
Barry worked for 19 years within the since March 2004 and was
Commonwealth Bank of Australia appointed Chief Executive Officer formerly a consultant to Mallesons ●● 2002-2005 Vice President –
including CBFC. Barry was a on 21 August 2006. At the time Stephen Jaques.
Accounting Services, Shell
Founding Director of the industry of her appointment Marianne was
Noel is a part-time member of International BV
body ASIFA (since merged to reported to be the youngest female
the Superannuation Complaints ●● 1998-2002 General Manager
become the FPA) in 1982, and was CEO of a publicly listed company.
Tribunal. He is a Director of – Taxation & Country Finance
elected NSW President in 1985 and Trust Company Superannuation Lead, The Shell Company of
Marianne has over 15 years
National President of ASIFA in 1988. Services Limited and Chair of Australia
experience within the financial
He is also Director of Count Finance services industry, with a strong its audit, risk and compliance ●● 1987–1998 Group Taxation
Pty Ltd, CountGPS Pty Ltd, Count superannuation and estate planning committee. He is also a Director Manager, Woolworths Limited
Legal Pty Ltd, Countplus Pty background. This year is her 11th of Pillar Administration, which
●● 1980–1987 Audit and Taxation
Limited Equity Loan Broking Pty year with Count. administers the NSW Government
superannuation schemes and some Divisions, Coopers & Lybrand.
Ltd, Equity Structured Products Pty
Marianne has a Bachelor of private sector funds, and chair of its In November 2005 Joycelyn
Ltd and finconnect (australia) pty
Economics with a Business Law compliance committee. was elected to the Board of
ltd. The above are all subsidiaries
major from Macquarie University the International Federation of
of Count Financial Limited. Noel is Author of “The Law of
and an MBA from Macquarie Accountants, representing both
He is also a Director of various Graduate School of Management. Superannuation in Australia”, a
loose-leaf book and editor of the CPA Australia and the Institute of
companies that Count has minor Chartered Accountants in Australia.
Marianne is a Director of Count Pty Australian Superannuation Law
direct or indirect shareholdings in, She is a member of the Planning
Ltd (Trustee of Count Charitable Bulletin.
including the subsidiary companies and Finance Committee and also
Foundation), Count Finance Pty Ltd,
of Countplus. Noel was appointed a Non- the Regulatory Liaison Group.
CountGPS Pty Ltd, Count Legal
Pty Ltd, Countplus Pty Limited, Executive Director on 13 February
Joycelyn was National President
Count Property Pty Ltd, Compound 2006. He is also a Non-Executive
Investments Limited, Equity Loan Director of Compound Investments for CPA Australia in 2000 and has
Limited. served on many other committees
Broking Pty Ltd, Equity Structured and councils.
Products Pty Ltd and finconnect
(australia) pty ltd. The above are Joycelyn is a non-executive Director
all subsidiaries of Count Financial of Noni B Limited, retail fashion
Limited. group and chairs the company’s
Audit and Risk Management
Count is a member of The Committee.
Investment and Financial Services
Association Limited (IFSA) and is Joycelyn was appointed a Non-
represented by Marianne on the Executive Director on 18 April
IFSA, Financial Advisory Network 2006. She is also a Non-Executive
Board Committee. This ensures Director of Compound Investments
that Count stays ahead of Industry Limited.
issues and is included in any
debate, provides feedback to the
Government and the Regulators as
part of a bigger group to shape
the Industry.
36 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
ANDREW WILLIAM GEDDES ALDEN JON HALSE RACHEL GRIFFITH CARESS TERESA ANDREWS
B.Com, Dip.Fin.Mgnt, M.Ec, CA B.Ec, M.EC, FFin, Grad.Dip. Deputy Company Secretary
F C PA , FA I C D Non-Executive Director AppCorpGov Member of the Count Charitable
Non-Executive Director Member of the Board Audit Company Secretary Foundation Advisory Board
Chair of the Board Remuneration Committee Senior Executive - Research &
Committee Product Caress joined Count in 2000 as
Member of the Board Audit Alden Halse is a Chartered Chief Audit Executive for Executive Assistant to the Chair
Committee Accountant and since July 1989 has Internal Audit & Managing Director and Annual
been a partner and senior member Member of the Count Charitable Conference Manager. Prior to
Andrew Geddes has specialised Foundation Advisory Board
of national Chartered Accounting joining Count Caress worked for
in professional service firm
firm, Ferrier Hodgson. a number of organisations in the
management and development Rachel joined Count in 1999 as
accounting, property and finance
for over 30 years and has worked Alden is registered as an Official the Research Manager. Prior to
industries.
with accountants and their clients Liquidator, Company Auditor and joining Count, Rachel worked for
creating one of Australia’s most Trustee in bankruptcy. a number of organisations in the Caress was officially appointed
successful business consulting and finance industry in the fixed income Deputy Company Secretary for
Alden has lectured and written area and funds management. As Count Financial Limited on 30
training companies, FMRC Smithink
extensively about Directors’ duties, the Research Manager, Rachel’s June 2006. She is also Company
in Sydney, NSW. He now works
corporate governance issues and role is to ensure that the products Secretary of Countplus Pty Limited
with larger multi-discipline practices
corporate and personal insolvency recommended by Count advisers and Equity Loan Broking Pty Ltd.
as a strategic development
issues. are good, solid investments that
specialist on their management
boards. pass Count’s stringent research
Alden is an Associate Member
process. In March 2006 Rachel
of the Institute of Chartered
Andrew is Chair of Greencross also took on the role of managing
Accountants, The Insolvency
Limited, a listed veterinary the product area, which is
Practitioners Association of
service company. responsible for overseeing wealth
Australia, The Australian Institute
protection and platforms that are
Andrew was appointed a Non- of Credit Management and The
used by Count Franchisees.
Executive Director on 15 August Australian Institute of Company
2000. He is also a Non-Executive Directors. Rachel was officially appointed
Director of Compound Investments Company Secretary for Count
Alden is a member of Council and
Limited. Financial Limited on 30 June
President of the Royal Automobile
2006. She is also Company
Club of WA (Inc) and is a Non-
Secretary of Count Pty Ltd, the
Executive Director of the ASX-listed
Trustee of the Count Charitable
IMF (Australia) Ltd.
Foundation, finconnect (australia)
Alden is also Non-Executive Chair pty ltd, Compound Investments
of RAC Insurance, a large home and Limited, Count Property Pty Ltd and
motor insurer in Western Australia. CountGPS Pty. Ltd.
Alden was appointed a Non-
Executive Director on 15 August
2000. He is also a Non-Executive
Director of Compound Investments
Limited.
37
Risk Report
Risks are an inherent part of any business and Count has focused on maximising opportunities while, at
the same time, identifying potential risks so that they can be assessed, monitored and, where possible,
managed on an ongoing basis.
Operating in a highly regulated industry and with its Australia-wide network of advisers providing financial
services through their independently owned practices, Count is proactive in identifying and addressing the
various potential operational, financial and business risks that may arise.
Some risks, such as the maintenance of the good conduct and skill of Count’s adviser network and the
protection of its financial, human and intellectual property resources are the particular focus of Count’s risk
management function as they can be monitored and, to varying degrees, controlled. Other risks, such as
market fluctuations, disasters and political or regulatory issues, are external and are largely beyond Count’s
control. Nevertheless their potential impact must be assessed and managed to the extent possible.
Count Risk and Compliance Committee
Oversight of material business risks is a core function of the Count Board. To assist the Board in discharging this function there is a
Board Risk and Compliance Committee and documented risk management procedures in place for all identified risks. The Risk and
Compliance Committee includes two Non-executive Directors - Noel Davis (Chairman of the Committee) and Joycelyn Morton and two
Executive Directors, Barry Lambert and Marianne Perkovic. Its function is to:
●● Enable the staff involved in compliance and risk management to report directly to the Board, via the Committee;
●● Monitor and review the Company’s identification and management of its risks and the procedures to minimise those risks;
●● Ensure compliance with ASIC and ASX requirements in relation to risk management as well as adherence to the Australian
Standard on Risk Management AS/NZS 4360 (2004);
●● Monitor the Company’s compliance with the law, the contracts it has entered into, and best practices; and
●● Report to the Board on significant compliance and risk management issues.
The management of business risks and the macro measures that have been put in place are reviewed on a regular basis at senior
management, Committee and Board level. The Committee meets five to six times a year to review various risk reports and issues. At
each subsequent Board Meeting, the Risk and Compliance Committee Chairman’s Report is a formal agenda item. Risk management
is also included in all business reports. This enables the directors to have a consolidated overview of risk while also ensuring their
adherence to corporate governance requirements and transparency.
Documented risk management and compliance procedures
Count has documented processes for:
●● Managing regulatory and statutory issues, including compliance with the Corporations Law and other financial services laws,
corporate governance requirements and codes of conduct;
●● Managing financial and human resources and maintaining required standards of competency, skills and conduct of Count’s
responsible managers and representatives;
●● Protection of information technology and other intellectual property;
●● Disaster recovery;
●● Dispute resolution, compensation arrangements and insurance.
Using the combination of likelihood and consequence to find what is referred to as the “Residual Risk rating”, the identification of the
major risks is facilitated by a systemic approach and ensures the management of higher risks are prioritised.
38 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
CONSEQUENCE
LIKELIHOOD Major Moderate Minor
Likely High High Medium
Possible High Medium Low
Unlikely Medium Low Low
In addition to its internal compliance processes, Count arranges, on an annual ongoing basis, for compliance audits by external
consultants to ensure Count’s adherence to its AFS licence conditions and the law and to provide advice as to how Count can better
interrogate its systems to reduce risk.
Risk prevention measures for the Count adviser network and client services
In relation to its adviser network and the services the network offers, key risk prevention measures that Count has implemented include,
but are not limited to:
●● Conducting police and credit checks on all potential advisers;
●● Conducting detailed interviews with potential franchisees and inspections of business premises;
●● Only accepting accountants or established qualified financial advisers as franchisees;
●● Having preference for accountants who hold either CPA or ICAA membership;
●● Avoiding advisers with a conflict of interest, eg those who own property development companies or have other financial dealings;
●● Regular compliance auditing of franchisees and authorised representatives. Those found not to be satisfying Count, industry or
the regulators’ strict practice standards and requirements are not permitted to continue with Count;
●● Reporting requirements and procedures for advisers and staff for any potential law or licence breaches detected;
●● Continuous review and upgrading of our training and support systems;
●● Avoiding high commission and speculative investments and products from start-up companies;
●● Having external independent qualitative research to support our internal Research Committee for all products before they are
considered for approval on our list; and,
●● Maintaining and following well-documented procedures for all key business and compliance activities. This includes a series of
documented risk management procedures and a comprehensive compliance plan.
Compensation Arrangements
As an AFS licensee, Count is required under Section 912B of Corporations Act 2001 to have “adequate compensation arrangements”,
in place. Count had been self insured since 2004 when it was determined that despite the high premiums on the available Professional
Indemnity (PI) insurance policies, some of the biggest risk items were not being covered by the policies on offer. Up until the release
of ASIC Regulatory Guide 126 in November 2007, being self insured was considered appropriate as there had not been specific
guidelines in relation to what “adequate compensation arrangements” must comprise. However, with the requirements of the Guide
becoming effective from 1 July 2008, all AFS licensees who provide financial services to retail clients are now required to have either:
●● Adequate PI insurance or
●● Other arrangements approved in writing by ASIC.
In order to comply with these new requirements, Count has now put in place PI insurance with a $20 million limit and will continue to try
to avoid major risks whilst maintaining shareholder equity.
39
Corporate Governance
The Count Board of Directors acknowledges the need for the highest standards of corporate governance
practice and ethical conduct by all directors and employees of Count and is committed to upholding best
practice standards of governance and to acting in the best interests of Count’s stakeholders.
Count’s Corporate Governance Statement outlines the Company’s policies in line with the ASX Corporate
Governance Principles and Recommendations (Revised 2007). The Board Charter, Board Committee Charters
and Code of Ethics and Conduct are provided in full on the Company’s website www.count.com.au
The Board is of the view that the Company complies with all ASX principles as outlined below.
ASX Principle
PRINCIPLE 1 Lay solid foundations for management and oversight Does Count comply? YES
The relationship between the Count Board and Management and the separation of their respective roles and responsibilities are
outlined in Count’s Board Charter. The Charter also outlines the Board size, composition and responsibilities including the role and
responsibilities of the Chairman, Chief Executive Officer (CEO), Chief Financial Officer (CFO) and Senior Management.
The functions of the Count Board include:
a) Setting a strategic plan for the Company with involvement in planning and goal setting for the Company and its intended growth;
b) Monitoring the performance of the Company and its management team;
c) Selecting and appointing the Managing Director and/or Chief Executive Officer, planning for the succession of senior management
and setting appropriate remuneration packages;
d) Setting clearly defined lines of authority from the Board to the Managing Director and/or CEO;
e) Agreeing on performance indicators with management;
f) Taking appropriate steps to protect the Company’s financial position and its ability to meet its debts and other obligations as they fall
due;
g) Establishing and monitoring policies directed to ensuring that the Company complies with the Law and conforms to the highest
standards of financial and ethical behaviour;
h) Ensuring that the Company is adhering to reporting systems and appropriate internal controls (operational and financial) together
with appropriate monitoring of compliance activities; and
i) Ensuring that the Company accounts are true and fair in conformity with Australian Accounting Standards (AAS) and the
Corporations Regulations 2001.
Count management is required to supply the Board with information in a timeframe, form and quality that will enable it to effectively
discharge its duties and to request additional information if required to make informed decisions. This is facilitated by Count’s Company
Secretary who is responsible for completion and dispatch of Board agendas and briefing materials and is accountable to the Board
through the Chairman on all governance matters.
Board Committees
Audit Committee
The Board’s Audit Committee currently comprises four Non-executive Directors, Joycelyn Morton (Committee Chairman), A.J. Halse,
A.W. Geddes and Noel Davis. The Chair and Members of the Audit Committee are nominated by the Board for a limited term on the
basis set out in the Count Audit Committee Charter. The Charter requires rotation of the Chair every three years.
The Audit Committee’s primary functions are to:
a) Ensure compliance with statutory reporting responsibilities;
b) Assess the quality and review the scope of work of the external auditors;
c) Enable the auditors to communicate any concerns to the Board;
d) Advise the Board on the appointment of the external auditors and the results of their work;
e) Assess the adequacy of the accounting, financial and operating controls;
f) Assess the effectiveness of the management of business risk and reliability of management reporting; and
g) Report to the Board any significant deficiencies identified above.
40 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
Remuneration Committee
The Board’s Remuneration Committee is comprised of a minimum of three directors including an independent non-executive director as
Chair as stipulated by Count’s Remuneration Committee Charter. Its purpose is to implement and monitor the remuneration structure for
staff, executives and directors. The committee currently comprises Non-executive Director Andrew Geddes (Committee Chairman) and
Executive Directors Barry Lambert (Board Chairman) and Marianne Perkovic (Chief Executive Officer).
Risk & Compliance Committee
The Board’s Risk and Compliance Committee currently comprises two Non-Executive Directors, Noel Davis (Committee Chairman)
and Joycelyn Morton and two Executive Directors, Barry Lambert (Board Chairman) and Marianne Perkovic (Chief Executive Officer).
Operational staff involved in risk management and key risk areas may also attend the meetings by invitation. As set out in Count’s Risk
and Compliance Committee Charter, the Committee’s function is to:
a) Enable the staff involved in compliance and risk management to report directly to the Board, via the Committee;
b) Monitor the company’s identification and management of its risks and the procedures to minimise those risks;
c) Monitor the company’s compliance with the law, the contracts it has entered into and best practices; and
d) Report to the Board on significant compliance and risk management issues.
Performance and Evaluation of Senior Executives
The Chairman will formally review the performance of the CEO on an annual basis and report on this to the Board. The review will
include reference to performance in relation to business, financial and prudential achievements as well as to staff and human relations.
Half yearly performance reviews are undertaken of Count’s Senior Executives by the CEO including qualitative and quantitative
assessment. The CEO reports to the Remuneration Committee on the outcome and in relation to succession planning issues.
PRINCIPLE 2 Structure the Board to add value Does Count comply? YES
Count currently has a Board of six directors which is considered to be of a size and composition of skills best suited to the Company.
Count’s Charter states that a majority of the Board will comprise non-executive directors and at present there are four non-executive
directors. The Chairman and CEO are the only executive directors.
The skills and experience of the directors can be found in Count’s Board Profile (see page 36). The majority of the Board is independent
as defined by the ASX Corporate Governance Council. The independent members are Alden Halse, Andrew Geddes, Noel Davis and
Joycelyn Morton.
The current Chairman is retired Managing Director and founder of Count, Barry Lambert. His selection as Chairman of Count in an
executive role was made as a result of his extensive and ongoing involvement with and commitment to the company and the financial
planning industry since he established the business in 1981. His vast industry experience and standing within the financial services
community and the company was a key factor in his appointment.
Count’s Charter separates the role of Chairman and Chief Executive Officer.
At the present time, Count does not consider itself to be of a size to necessitate a nomination committee. In Count’s Charter, the
Chairman has responsibility for planning succession in Board appointments subject to Board and shareholder’s approval.
The Chairman has also been delegated responsibility for ensuring that the performance of the Board, its committees and individual
members are reviewed on a regular basis as well as for identifying candidates for appointment as directors. Count engages the services
of an external party from time to time to carry out evaluations on individual directors, the Board Committees and the Board as a whole.
Evaluations involve self and third party assessments by the directors and from the result of the written report, discussions are held to
examine any issues and consider changes to be made. A Board and director evaluation was commenced in the 2008/09 financial year.
Count’s directors all have a sound understanding of financial markets and each brings a unique area of expertise to provide the Board
with a diverse range of skills and experience as detailed in the Board Profiles on page 36.
All Count’s non-executive directors are independent. In its Charter, the Board has adopted AAS Board standard 1031 to determine
levels of materiality.
41
Corporate Governance (continued)
PRINCIPLE 3 Promote ethical and responsible decision-making Does Count comply? YES
Count aims for a culture of compliance and sound corporate governance and social responsibility to be embedded in its business
processes. Count’s Code of Ethics and Conduct promotes commitment by both the Board and Management to ensuring the highest
standards of ethical behaviour, responsible decision-making and conduct.
For Count employees, adherence to Count’s Employment Codes is one of the conditions of employment. The Code of Ethics and
Conduct addresses, amongst other things, ethical standards of behaviour, protection of Count’s reputation and its stakeholders,
financial integrity, privacy of personal information, dealing in shares of the company by directors and staff and dealing with potential
conflicts of interest. There are also guidelines for the acceptance of outside directorships by executive and non-executive directors.
Details of any outside directorships are outlined in the Board Profiles.
Count also has processes in place to ensure it will comply with the Standards Australia 2003 framework for good corporate governance
policies and practices which cover:
●● Good governance principles
●● Fraud and corruption control
●● Corporate social responsibility
●● Whistleblowing systems
●● Organisational codes of conduct
Directors, senior executives and staff must comply with Count’s share trading rules, which may from time-to-time be amended by the
directors. Specifically, Count requires that:
a) Unless there are unusual circumstances, trading in shares by directors and senior executives is limited to the following periods:
i. in the period between 24 hours and 30 working days after the release of Count’s half yearly and annual results announcement to
the ASX; and
ii. at such other times as the Board permits.
b) Directors and senior executives need to clear any intention to trade in shares outside of the above results window with an Executive
Director prior to any trade. Other staff, not in receipt of price sensitive data, may trade at any time; and
c) All staff and directors are prohibited from trading in shares if they are in possession of price sensitive information, in compliance with
the Corporations Act (2001).
Count has a well-deserved reputation for the high level of ethics and principles under which it operates and promotes an environment
of integrity and responsibility to staff at all levels. Required standards are clearly defined on the Company’s public website
www.count.com.au and on its internal staff website. In addition to Count’s documented Code of Ethics and Conduct, the Board Charter
and Corporate Governance Statement, it has established codes for handling conflicts of interest, breach reporting as well as compliance
plans and guidelines for compliance with its AFS licence conditions and other financial services activities.
PRINCIPLE 4 Safeguard integrity in financial reporting Does Count comply? YES
Responsibility for the integrity of the Company’s financial reporting lies with the Board and a structure is in place to independently
verify and safeguard the reports. The CEO and CFO provide letters of assurance to the Board for each half year and full year report.
Integrity of the reporting is assessed with the assistance of external consultants and the Company’s Audit Committee (see details
about the Company’s Audit Committee under ASX Principle 1 on page 40 of the Annual Report.) The Audit Committee also reviews the
performance and fees of the external auditor and makes recommendations in relation to their appointment.
Directors’ attendance at Audit Committee meetings is detailed in the Directors’ Report on page 44 of the Annual Report.
42 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
PRINCIPLE 5 Make timely and balanced disclosure Does Count comply? YES
Count has a continuous disclosure regime as outlined in its Market Disclosure and Communication Policy on www.count.com.au .
Count has an established record of meaningful and regular business reporting in addition to timely statutory reporting and the prompt
disclosure of any appropriate material. The Count website provides a readily available source of up-to-date information.
PRINCIPLE 6 Respect the rights of shareholders Does Count comply? YES
Count endeavours to keep shareholders properly and fully informed at all times and facilitates this via its continuously updated website
and by hard copy communication. All company announcements, including reports to the ASX and the media as well as half and full year
profit announcements, are placed on the website immediately on their release to the market. Webcasts are done of the half-year and
full-year financial report presentations and of the Chairman’s address to the AGM.
At all times, an external auditor is available at shareholder meetings to answer shareholder questions about the auditor’s report and
conduct thereof. By providing written questions in relation to the audit to the auditor five days before the AGM, shareholders’ queries
may be considered at the AGM.
PRINCIPLE 7 Recognise and manage risk Does Count comply? YES
The Company has a well-documented internal risk management and internal control system to manage the company’s material
business risks with established procedures that seeks to ensure:
●● Compliance with the law and required Australian standards;
●● Sound management of business risks including financial resources and disaster recovery processes;
●● Regular reporting to the Board by management through the CEO on the company’s key risks and the management of those risks;
●● Assurances are provided from the CEO and CFO about the soundness and effectiveness of the company’s risk management and
internal compliance and control system.
To assist the Board carry out its responsibility for oversight of material business risks, reports on risk issues and reviews of risk
management systems are reported to the Company’s Board Risk and Compliance Committee and then overseen by the full Board as
outlined above under ASX Principle 1 on page 40 in the Annual Report and in the Risk Report on Page 38.
PRINCIPLE 8 Remunerate fairly and responsibly Does Count comply? YES
Count has a Remuneration Committee chaired by a non-executive director.
The Remuneration Committee implements and monitors the remuneration policies for the Company. These are outlined in the
Remuneration Section of the Directors’ Report in the Annual Report on page 50 and comply with the Corporations Act disclosure
requirements for a listed company.
The Remuneration Committee’s Charter sets outs its role, responsibilities and membership terms. This information is provided in the
Remuneration section of the Directors’ Report in the Annual Report on page 45.
Any proposed equity based remuneration for Count directors is put to the shareholders. This information is provided on page 47 of the
Annual Report.
43
Directors Report
In accordance with the resolution of the Directors of Count Financial Limited (the Company), the Directors
submit their report for the financial year ended 30 June 2009.
Board of Directors and Company Secretaries
During the financial year and until the date of this report, the Directors of Count Financial Limited were:
B.M. Lambert Executive Chairman (appointed 7 Nov 2006)
Director (appointed 22 Aug 1980)
M. Perkovic Chief Executive Officer & Managing Director (appointed 21 Aug 2006)
Director (appointed 15 Mar 2004)
A.W. Geddes Non-Executive Director (appointed 15 Aug 2000)
A.J. Halse Non-Executive Director (appointed 15 Aug 2000)
N.A. Davis Non-Executive Director (appointed 13 Feb 2006)
J.C. Morton Non-Executive Director (appointed 18 Apr 2006)
R. Griffith Company Secretary (appointed 30 Jun 2006)
C.T. Andrews Deputy Company Secretary (appointed 30 Jun 2006)
Details of qualifications, experience and other directorships of listed companies for the Directors and the Company Secretary at the date
of this report are set out in the Board Profile Report on pages 36-37.
Nature Of Operations And Principal Activities
The principal activities of the Company and its controlled entities (the Group) in the course of the financial year were providing financial
planning services, investment reviews, and advice on personal insurance, superannuation, home and investment loans, business
loans and leasing via its network of franchisees. Additionally, the Group provides loans, paraplanning and web design services to its
franchisees and provides loans and leasing services to other non-franchisee intermediaries.
Operating and Financial Review
The consolidated net profit for the financial year ended 30 June 2009 attributable to ordinary equity holders after the provision of income
tax, was $19.37 million (2008: $21.30 million), a decrease of 9.1% over the previous year’s profit.
A review of the operations, financials and results of Count Financial Limited and its controlled entities for the financial year ended
30 June 2009 are included on pages 4-13, 38-39. This contains the Company’s track record, financial highlights, the Chairman’s Report,
the Chief Executive Officer’s Report and the Risk Report.
The Directors are of the view that the results represent a true and fair view of the operations of the Company and the financial position
as at 30 June 2009 (refer to Directors’ Declaration on page 103).
Dividends and Distributions
The Company paid or provided for dividends and distributions on ordinary shares during the financial year as set out in the table below:
Financial year ended Payment type Status Cents per share Payment date
2009 Risk/Reward Paid 4 15 Oct 2008
2009 Christmas Paid 2 15 Dec 2008
2009 Easter Paid 2 15 Apr 2009
2010 Tax Paid 2 15 July 2009
All dividends are fully franked at the tax rate of 30%.
44 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
Significant Changes in the State of Affairs
During 2009, Countplus Pty Ltd acquired a further equity interest in 4 accounting firms. In each case, the interest acquired was 25%. As
at 30 June 2009, these investments in associates totalled $11.30 million.
A new subsidiary, Count Finance Pty Ltd was launched in 2009 to provide acquisition loans to franchisees and associates. It is wholly
owned by Count Financial Limited.
Directors’ Interests
At the date of this report, the relevant interests of the Directors in the shares and options of Count Financial Limited as notified to the
Australian Stock Exchange in accordance with the Corporations Act (2001) are:
Ordinary shares Options over ordinary shares
B.M. Lambert 91,150,078 -
M. Perkovic 885,083 447,000
A.W. Geddes 216,500 33,500
A.J. Halse 310,000 50,000
N.A. Davis 40,000 75,000
J.C. Morton 25,000 60,000
Directors’ Meetings
The Board of Directors has an Audit Committee, a Remuneration Committee and a Risk and Compliance Committee.
Members acting on the Committees of the Board during the year were:
Count Audit Remuneration Risk and Compliance
B.M. Lambert Executive Chair Member Member
M. Perkovic Chief Executive Officer Member Member
A.W. Geddes Non-Executive Member Chair
A.J. Halse Non-Executive Member
N.A. Davis Non-Executive Member Chair
J. C. Morton Non-Executive Chair Member
The number of meetings of the Directors (including meetings of committees of Directors) held during the year and the number of
meetings attended by each Director are as follows:
MeetingS OF COMMitteeS
Directors’ Meetings Audit Remuneration Risk and Compliance
Number of meetings held 4 4 1 5
Number of meetings attended: - - - -
B.M. Lambert 4 4 1
1 3
M. Perkovic 4 41 1 5
A.W. Geddes 3 3 1 -
A.J. Halse 4 4 - -
N.A. Davis 4 4 - 5
J.C. Morton 4 4 - 5
(1) Non-audit committee member - in attendance.
45
Directors Report (continued)
Significant Events After the Balance Date
On 31 July 2009, Countplus Pty Ltd made an investment for a 25% interest in a new associate (Evolution Advisers Pty Ltd),
totalling $585,586.
In the opinion of the Directors, there were no other significant changes in the state of affairs of the Company and its controlled entities
that occurred after the financial year under review and up to the date of this report.
Likely Developments and Expected Results
Disclosure of information relating to the future developments in the operations of the Company and its controlled entities is contained in
the reports of the Chairman and the Chief Executive Officer.
Share Options
The Company issues options annually to employees via the Employee Share Option Plan (ESOP) and to franchisees via the Franchisee
Incentive Option Plan (FIOP).
Further details on allocation of options to employees and Directors under ESOP are included in the Remuneration Report.
Franchisees qualify for options under FIOP by growing their contribution to the revenues of the Company each financial year by a set
benchmark. Features of the plan include:
●● Options are issued at no cost.
●● Each option entitles the holder to subscribe for one fully paid ordinary share in the Company at a fixed exercise price. The
exercise price is set at a 12.5% discount to the weighted average share price in the first full week after the August meeting of the
Board of Directors.
●● These options may vest after 3 years subject to minimum business requirements and expire after 5 years.
Unissued ordinary shares of the Company under the Employee Share Option Plan (ESOP) and Franchisee Incentive Option Plan (FIOP)
at 30 June 2009 numbered 47,659,134.
number of options
Options type Options grant date outstanding exercise price expiry date
eSOP 2004 14-Oct-04 262,900 84.74 cents 15-Nov-09
eSOP 2004 – Director (1)
16-Nov-04 - 84.74 cents 15-Nov-09
FiOP 2004 15-Jun-05 2,815,547 78.05 cents 15-Nov-09
eSOP 2005 15-Sep-05 831,800 143 cents 15-Nov-10
eSOP 2005 – Director (1)
16-Nov-05 67,000 143 cents 15-Nov-10
FiOP 2005 15-Dec-05 8,037,485 131 cents 15-Nov-10
eSOP 2006 13-Oct-06 1,141,619 210.3 cents 15-Nov-11
eSOP 2006 – Director (1)
7-Nov-06 398,500 210.3 cents 15-Nov-11
FiOP 2006 6-Feb-07 8,085,633 193.7 cents 15-Nov-11
eSOP 2007 12-Oct-07 1,418,900 268.7 cents 15-Nov-12
eSOP 2007 – Director (1)
13-Nov-07 100,000 268.7 cents 15-Nov-12
FiOP 2007 21-Dec-07 9,009,000 247.5 cents 15-Nov-12
eSOP 2008 10-Nov-08 2,014,950 154.2 cents 15-Nov-13
eSOP 2008 – Director(1) 10-Nov-08 200,000 154.2 cents 15-Nov-13
FiOP 2008 19-Dec-08 13,275,800 142 cents 15-Nov-13
total 47,659,134
(1) Options granted to Directors as approved by shareholders at each Annual General Meeting.
Further details of unissued ordinary shares of the Company under the Employee Share Option Plan (ESOP) and Franchisee Incentive
Option Plan (FIOP) are detailed in note 25 – FIOP and note 29 – ESOP of the financial statements.
46 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
Remuneration Report
This report outlines the remuneration arrangements in place for the Company’s Directors and Executives. This section of the
Directors’ report has been audited by the Company’s external auditors, Ernst & Young.
Remuneration Committee
The Remuneration Committee of the Board of Directors of Count Financial Limited is responsible for determining and reviewing
remuneration arrangements for the Directors, the Executive team and other team members. The committee meets at least annually.
The Committee’s purpose is to:
●● Make recommendations to the Board of Directors in relation to the remuneration of Executive and Non-Executive Directors;
●● Review and approve executive and employee remuneration policy; and
●● Evaluate potential candidates for executive positions and oversee the development of executive succession plans.
Any decision made by the Committee concerning an individual executive’s remuneration is made without the executive being present.
Remuneration Policy
Remuneration arrangements are based on an assessment of the appropriateness of the nature and amount of emoluments of the
Directors and other Key Management Personnel with the overall objective of ensuring maximum stakeholder benefit from the retention of
a high quality Board and executive team.
This assessment is based on:
●● Relevant market conditions - to ensure the remuneration is competitive;
●● Acceptability to shareholders – to ensure the remuneration is fair and reasonable; and
●● Company performance – to ensure the remuneration is linked with achievement of the Company’s profit targets.
To assist in achieving these objectives, the Remuneration Committee links the nature and amount of Executive Directors’ and Officers’
remuneration to the Company’s financial and operational performance. All permanent employees have the opportunity to qualify for
participation in the ESOP, including Key Management Personnel. Features of the plan include:
●● Options are issued at no cost.
●● Each option entitles the holder to subscribe for one fully paid ordinary share in the Company at a fixed exercise price. The
exercise price is set at a 5% discount to the weighted average share price in the first full week after the August meeting of the
Board of Directors.
●● The options vest proportionally over a three-year period (33% after 1 year, 33% after 2 years and 34% after 3 years) based on
continuing employment criteria with Board discretion.
Non-Executive Director Remuneration
In accordance with best practice corporate governance, the structure of Non-Executive Director remuneration is separate and distinct.
The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract and retain Non-
Executive Directors of a high calibre, whilst incurring a cost which is acceptable to shareholders.
The Constitution and the ASX Listing Rules specify that the total aggregate remuneration of Non-Executive Directors shall be determined
from time-to-time by a general meeting. The amount of aggregate remuneration put to shareholders for approval and the manner in
which it is apportioned amongst Directors, is reviewed annually.
Subject to shareholder approval, the Non-Executive Directors are issued options every three years under the Employee Share Option
Plan (ESOP). The options are in lieu of retirement benefits. Options to Non-Executive Directors were last granted in November 2006.
Non-Executive Directors do not have fixed term contracts with the Company.
Non-Executive Directors are encouraged to hold shares in the Company (purchased on market) and all Count non-executive Directors
do so. It is considered good governance for Directors to have a stake in the Company on whose Board he or she sits.
47
Directors Report (continued)
Remuneration of Executives
The basis of remuneration of Executives is detailed below.
General Remuneration Policy
Objective
The main principle underlying the Company’s employee remuneration policy is to ensure rewards are commensurate with the Company’s
objectives and the results delivered. Specifically, this is achieved by:
●● Remuneration reflects each employee’s position and responsibilities within the Company;
●● Executives are rewarded for company, business unit and individual performance against targets set by reference to appropriate
benchmarks;
●● The interests of all employees are aligned with those of shareholders;
●● Linking rewards with the strategic goals and performance of the Company; and
●● Ensure total remuneration is competitive by market standards.
All employees are remunerated with a base salary and superannuation at a rate of 10% of salary and wages. The statutory rate for
compulsory superannuation is currently 9%.
The Company also pays income protection (sickness and accident) insurance premiums for all eligible permanent employees. Subject
to conditions, the policy provides for up to 75% of base salaries to be paid for employees who are unable to attend work for a period in
excess of 30 days.
In addition to the above, two incentive structures apply to employees as outlined below.
1. A bonus based on team and individual objectives plus EPS growth target bonus
This process is based on the achievement of particular sets of goals - both personal and team related. Employees are rewarded to the
extent that the goals are achieved and to the extent to which they have assisted in achieving them as assessed by management. In
2009, this was assessed and paid twice per year at a maximum annual total of 20% of base salary plus superannuation benefits (10%).
Employees also have a bonus component linked to the Company meeting its earnings per share growth target. This incentive plan is not
pro-rated to the actual result achieved - it is paid from profits above the target up to 100% of the agreed amount.
2. Bonus based on EPS growth target only
All employees are granted an allocation of options annually under the company’s ESOP plan. Senior employees, including the Chief
Executive Officer and Key Management Personnel are allocated these options on the basis of their performance as determined by the
Remuneration Committee.
This allocation of options allows employees to have the opportunity to become shareholders in the company and therefore have an
interest in ensuring its long-term success.
Remuneration of Key Management Personnel is detailed on pages 50-54 of this report.
Contractual Arrangements
The CEO of Countplus, J.B. Wardell is employed under a 5 year contract which commenced on 21 August 2006.
Mr Wardell may resign from his position and terminate his contract by giving 4 months written notice at any time up to 6 months prior to
the expiration of the 5 year contractual term.
The company may terminate this employment agreement by giving 12 months notice within the first 4 years of the contractual period or
up to the expiration of the contractual term in the final year. No notice is required to be given by the employee or the company within 6
months of the expiration of the 5 year contractual term.
The company may also terminate the contract without notice in the event of serious mis-conduct. Where termination occurs, Mr Wardell
is entitled to that portion of his remuneration which is fixed, up to the date of termination plus any statutory entitlements.
All other executives and full-time employees are not subject to fixed term contracts with the Company. Upon employment,
all employees are subject to an employment contract, which covers their general and statutory rights and obligations, which is
reviewed annually.
48 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
Relationship between remuneration policy and the performance of the Company
The Company’s remuneration policy aims to achieve a link between the remuneration received by Key Management Personnel and the
creation of shareholder wealth. This is attained via the inclusion of the EPS growth target bonus and the awarding of options via ESOP.
●● The Company’s share price has fallen over the financial year from $1.50 to $1.41 and earnings per share has fallen 12.74%.
●● Earnings per share has grown by an average of 15.5% pa over the last 5 years (refer to Graph on page 4).
●● Dividends have grown by an average of 18% pa over the last 5 years.
●● Return on shareholders’ equity for the financial year is 45.33%.
●● During the financial year, the Company completed an on-market buy-back of 2.33 million shares at a total cost of $2.56 million.
These shares were all subsequently cancelled. Since listing, the Company has bought back and subsequently cancelled 25.20
million shares at a total cost of $32.86 million.
Key Management Personnel Disclosures
Key Management Personnel are the same for the parent and the consolidated entity. The remuneration and other related party
disclosures have been prepared in accordance with AASB 124: Related Party Disclosures. For the purposes of these disclosures,
all the individuals listed below have been determined to be Key Management Personnel as defined by the accounting standard for
2008 and 2009.
nAMe POSitiOn
B.M Lambert Executive Chairman
M. Perkovic Managing Director / Chief Executive Officer
A.W. Geddes Non Executive Director
A.J. Halse Non Executive Director
N.A. Davis Non Executive Director
J.C. Morton Non Executive Director
OtheR Key MAnAgeMent PeRSOnnel
M.J. Spurr Chief Financial Officer
R. Griffith Senior Executive – Research & Product, Company Secretary
C.J. Simkin Senior Executive – National Business Recruitment
J.B. Wardell Chief Executive Officer - Countplus Pty Ltd
T. E. Sale General Manager – finconnect (Australia) Pty Ltd
49
Directors Report (continued)
Compensation of Key Management Personnel
(including the five highest remunerated Executives)
Other
Post- long-term
employment employment termination Share-based
Short-term benefits benefits benefits benefits payments
Other % of
payments Amortised remunera- number
Salary and Superan- cost of tion as of options
2009 & fees Bonus benefits nuation options total options granted
nAMe $ $ $ $ $ $ $ $ %
DiReCtORS
B.M. Lambert
Executive Chairman 1 - 12,583 20,000 - - - 32,584 - -
M. Perkovic Chief
Executive Officer 191,973 90,909 12,168 28,288 - - 43,120 366,458 11.77% 200,000
A.W. Geddes
Non-Executive
Director 40,000 - - 4,000 - - 6,032 50,032 12.06% -
A.J. Halse
Non-Executive
Director 40,000 - - 4,000 - - 6,032 50,032 12.06% -
N.A. Davis
Non-Executive
Director 52,000 - - 5,200 - - 9,048 66,248 13.66% -
J.C. Morton
Non-Executive
Director 50,000 - - 5,000 - - 7,328 62,328 11.76% -
OtheR Key MAnAgeMent PeRSOnnel
M.J. Spurr
Chief Financial
Officer 162,281 24,054 6,352 18,634 - - 27,604 238,925 11.55% 100,000
R. Griffith
Senior Executive
Research &
Product /Company
Secretary 139,022 21,960 2,719 16,098 - - 20,034 199,833 10.03% 100,000
C.J. Simkin
Senior Executive-
National Business
Recruitment 106,611 21,825 14,327 12,844 - - 19,017 174,624 10.89% 60,000
J.B. Wardell
Chief Executive
Officer, Countplus 199,452 20,455 11,601 21,991 - - 15,897 269,396 5.90% 65,000
T.E. Sale
General Manager,
finconnect 175,938 27,273 12,672 20,321 - - 15,355 251,559 6.10% 125,000
total 1,157,277 206,476 72,423 156,375 - - 169,467 1,762,019 650,000
The elements of remuneration have been determined on the basis of the cost to the Company and the consolidated entity.
The fair value of options granted has been calculated for all ESOP options granted after November 2002 which have not vested by 1 July 2008. The fair value of such grants is being
amortised and disclosed on a pro-rata basis over the vesting period. The method used to determine fair value was the Cox, Ross and Rubinstein American option binomial model.
Options granted refer to options granted under the 2008 ESOP.
50 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
Other
Post- long-term
employment employment termination Share-based
Short-term benefits benefits benefits benefits payments
Other % of
payments Amortised remunera- number
Salary and Superan- cost of tion as of options
2008 & fees Bonus benefits nuation options total options granted
nAMe $ $ $ $ $ $ $ $ %
DiReCtORS
B.M. Lambert
Executive Chairman 1 - 22,217 20,000 - - - 42,218 - -
M. Perkovic
Chief Executive
Officer 184,493 18,182 20,036 20,268 - - 51,303 294,282 17.43% 100,000
A.W. Geddes
Non-Executive
Director 40,000 - - 4,000 - - 12,873 56,873 22.64% -
A.J. Halse
Non-Executive
Director 40,000 - - 4,000 - - 12,873 56,873 22.64% -
N.A. Davis
Non-Executive
Director 52,000 - - 5,200 - - 19,310 76,510 25.24% -
J.C. Morton
Non-Executive
Director 50,000 - - 5,000 - - 15,448 70,448 21.93% -
OtheR Key MAnAgeMent PeRSOnnel
M.J. Spurr
Chief Financial
Officer 143,835 13,636 11,392 15,747 - - 41,223 225,834 18.25% 60,000
R. Griffith
Senior Executive
Research & Product
/Company Secretary 123,890 12,500 2,719 13,639 - - 26,424 179,173 14.75% 50,000
C.J. Simkin
Senior Executive-
National Business
Recruitment 99,726 12,500 13,259 11,223 - - 27,970 164,677 16.98% 50,000
J.B. Wardell
Chief Executive
Officer, Countplus 199,452 7,955 15,480 20,741 - - 20,574 264,202 7.79% 40,000
T.E. Sale
General Manager,
finconnect 168,725 - 10,624 16,872 - - 13,180 209,402 6.29% 50,000
total 1,102,622 64,773 95,726 136,689 - - 241,180 1,640,491 350,000
The elements of remuneration have been determined on the basis of the cost to the Company and the consolidated entity.
The fair value of options granted has been calculated for all ESOP options granted after November 2002 which have not vested by 1 July 2007. The fair value of such grants
is being amortised and disclosed on a pro-rata basis over the vesting period. The method used to determine fair value was the Cox, Ross and Rubinstein American option
binomial model.
Options granted refer to options granted under the 2007 ESOP.
51
Directors Report (continued)
Options and Rights provided as Compensation to Key Management Personnel
and their related parties
Options granted refer to options granted under the ESOP 2007 and ESOP 2008 plans. The condition for vesting is continuing
employment subject to Board discretion. There is no amount paid or payable by the recipient.
ESOP 2007: The fair value of options granted to Directors was 53.89 cents and to other Key Management Personnel, 67.73c cents.
The grant date for directors was 13 November 2007 and for other Key Management Personnel, 12 October 2007. These options will
vest (and may be exercised) proportionally over 3 years from 15 November 2008 until 15 November 2010 and will expire on
15 November 2012.
ESOP 2008: The fair value of options granted to Directors and to other Key Management Personnel was 10.11 cents. The grant date for
directors and other Key Management Personnel was 10 November 2008. These options will vest (and may be exercised) proportionally
over 3 years from 15 November 2009 until 15 November 2011 and will expire on 15 November 2013.
Key MAnAgeMent PeRSOnnel AnD theiR RelAteD PARtieS – DiReCtORS
2009 tOtAl B.M. lambert M. Perkovic A.W. geddes A.J. halse n.A. Davis J.C. Morton
ESOP 2008 Options granted
during the financial year (Exercise
price is 154.2 cents) 200,000 - 200,000 - - -
Options vested during the
financial year 170,950 - 93,400 16,500 16,500 24,750 19,800
2008 tOtAl B.M. lambert M. Perkovic A.W. geddes A.J. halse n.A. Davis J.C. Morton
ESOP 2007 Options granted
during the financial year (Exercise
price is 268.7 cents) 100,000 - 100,000 - - - -
Options vested during the
financial year 136,950 - 59,400 16,500 16,500 24,750 19,800
Key MAnAgeMent PeRSOnnel AnD theiR RelAteD PARtieS – OtheR
2009 tOtAl M.J. Spurr R. griffith C.J. Simkin J.B. Wardell t.e. Sale
ESOP 2008 Options granted
during the financial year (Exercise
price is 154.2 cents) 440,000 100,000 100,000 50,000 65,000 125,000
Options vested during the
financial year 247,850 76,600 49,850 53,400 51,500 16,500
2008 tOtAl M.J. Spurr R. griffith C.J. Simkin J.B. Wardell t.e. Sale
ESOP 2007 Options granted
during the financial year (Exercise
price is 268.7 cents) 250,000 60,000 50,000 50,000 40,000 50,000
Options vested during the
financial year 165,900 66,300 36,600 46,500 16,500 -
52 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
equity inStRuMentS PROviDeD On exeRCiSe OF OPtiOnS gRAnteD AS COMPenSAtiOn tO Key MAnAgeMent PeRSOnnel – DiReCtORS
2009 tOtAl B.M. lambert M. Perkovic A.W. geddes A.J. halse n.A. Davis J.C. Morton
Shares issued - 2003 options exercised @ 60.0c - - - - - - -
Shares issued - 2004 options exercised @ 84.7c - - - - - - -
Shares issued - 2005 options exercised @ 143.0c - - - - - - -
Shares issued - 2006 options exercised @ 210.3c - - - - - - -
Shares issued - 2007 options exercised @ 268.7c - - - - - - -
2008 tOtAl B.M. lambert M. Perkovic A.W. geddes A.J. halse n.A. Davis J.C. Morton
Shares issued - 2003 options exercised @ 60.0c - - - - - - -
Shares issued - 2004 options exercised @ 84.7c 54,400 - 54,400 - - - -
Shares issued - 2005 options exercised @ 143.0c - - - - - - -
Shares issued - 2006 options exercised @ 210.3c 16,500 - - 16,500 - - -
equity inStRuMentS PROviDeD On exeRCiSe OF OPtiOnS gRAnteD AS COMPenSAtiOn tO Key MAnAgeMent PeRSOnnel – OtheR
2009 tOtAl M.J. Spurr R. griffith C.J. Simkin J.B. Wardell t.e. Sale
Shares issued - 2003 options exercised @ 60.0c - - - - -
Shares issued - 2004 options exercised @ 84.7c 10,200 10,200 - - - -
Shares issued - 2005 options exercised @ 143.0c - - - - -
Shares issued - 2006 options exercised @ 210.3c - - - - - -
Shares issued - 2007 options exercised @ 268.7c - - - - -
2008 tOtAl M.J. Spurr R. griffith C.J. Simkin J.B. Wardell t.e. Sale
Shares issued - 2003 options exercised @ 60.0c 13,600 - 13,600 - - -
Shares issued - 2004 options exercised @ 84.7c 20,100 - 20,100 - - -
Shares issued - 2005 options exercised @ 143c 6,300 - 6,300 - - -
Shares issued - 2006 options exercised @ 210.3c - - - - - -
Shares and options are ordinary shares and unlisted options in Count Financial Limited. All options exercised are fully paid
53
Directors Report (continued)
Value of options granted, exercised and lapsed in the current financial year
value of options granted as part of
value of options granted as part of remuneration and that are exercised value of options granted as part of
remuneration during the current or sold during the current financial remuneration and that lapse during
financial year year the financial year Aggregate
$ $ $ $
M. Perkovic 20,222 - - 20,222
M.J. Spurr 10,111 7,983 - 18,094
R. Griffith 10,111 - - 10,111
C.J. Simkin 6,067 - - 6,067
J.B. Wardell 6,572 - - 6,572
T.E. Sale 12,639 - - 12,639
PeRFORMAnCe RelAteD COMPOnentS AS A PROPORtiOn OF tOtAl ReMuneRAtiOn
Performance related remuneration Other total
M. Perkovic 39% 61% 100%
M.J. Spurr 23% 77% 100%
R. Griffith 22% 78% 100%
C.J. Simkin 25% 75% 100%
J.B. Wardell 14% 86% 100%
T.E. Sale 18% 82% 100%
Performance related remuneration consists of performance bonuses, the associated superannuation benefit and the amortised
cost of options.
The Non-Executive Directors do not have a performance related component as part of their remuneration.
Additional Information on Performance Remuneration
Performance remuneration granted under the ESOP for 2008 provides remuneration in future years. The value has been determined at
grant date and amortised over the vesting period. The options vest based on continuing employment criteria and with Board discretion.
PeRFORMAnCe ReMuneRAtiOn AFFeCting FutuRe PeRiODS
2010 ($) 2011 ($) 2012 ($)
M. Perkovic 8,030 4,195 8,531
M.J. Spurr 4,015 2,098 549
R. Griffith 4,015 2,098 549
C.J. Simkin 2,409 1,259 329
J.B. Wardell 2,610 1,363 357
T.E. Sale 5,019 2,622 686
Corporate Information
The financial report of Count Financial Limited for the year ended 30 June 2009 was authorised for issue in accordance with a resolution
of the Directors on 10 August 2009.
Corporate structure
Count Financial Limited (“Count”) is a Company limited by shares that is incorporated and domiciled in Australia. The Company
has prepared a consolidated financial report incorporating the entities that it controlled during the financial year, being Compound
Investments Limited, Countplus Pty Ltd, Count Property Pty Ltd, Equity Loan Broking Pty Ltd, finconnect (australia) pty ltd,
Count Finance Pty Ltd and Count GPS Pty Ltd. Count Financial Limited and Compound Investments Limited are Australian Financial
Services Licensees.
54 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
Environmental Regulation and Performance
The Company’s operation is not regulated by any significant environmental regulations under the Laws of the Commonwealth,
State or Territory.
Tax Consolidation
Effective 1 July 2003, for the purposes of income taxation, Count Financial Limited and its 100% owned subsidiaries formed a
tax consolidated group. Members of the group agreed to enter into a tax sharing arrangement in order to allocate income tax
expense to the wholly-owned subsidiaries on a pro-rata basis. In addition the agreement provides for the allocation of income
tax liabilities between the entities should the head entity default on its tax payment obligations.
Indemnification and Insurance of Directors and Officers
During the financial year, the Company paid premiums in respect of a contract insuring all the Directors and Officers of the
parent entity and its controlled entities against any claims and wrongful acts arising out of their conduct while acting in their
capacity as Director or Officer of the Company.
All Directors’ and Officers’ liability policies contain a Confidentiality Condition, which restricts the insured from disclosing certain
information in regard to this insurance.
Auditor’s Independence
1. Auditor’s Independence Declaration
Declaration of independence by Ernst & Young has been received and is set out on the attachment.
2. Non-Audit Services
During the financial year ended 30 June 2009 and to the date of the report, the auditors, Ernst & Young did not provide any
non-audit services to the Company. The Board Audit Committee is satisfied that the services provided by the auditors during
the year ended 30 June 2009 did not contravene the independence requirements as defined in the Corporations Act and has
advised the Board accordingly.
3. Directorships
During the financial year ended 30 June 2009 and to the date of this report, no Director or Officer of the Company is, or has
been a Director or Partner of Ernst & Young, the Company’s auditors.
Rounding
The amounts contained in this report and in the financial report have been rounded to the nearest $1,000 (where rounding is
applicable) under the option available to the Company under ASIC Class Order 98/0100. The Company is an entity to which the
Class Order applies.
Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of Count Financial
Limited support and have adhered to the principles of corporate governance. The Company’s Corporate Governance Statement
can be found on page 42.
Dated at Sydney this 13 of August 2009
Signed in accordance with a resolution of the Directors:
Barry M. Lambert
Executive Chairman
55
Audit Independence Declaration
Auditor’s Independence Declaration to the Directors of
Count Financial Limited
In relation to our audit of the financial report of Count Financial Limited for the financial year ended 30
June 2009, to the best of my knowledge and belief, there have been no contraventions of the auditor
independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.
Ernst & Young
Sean van Gorp
Partner
13 August 2009
Liability limited by a scheme approved
under Professional Standards Legislation
56 COUNT FINANCIAL LIMITED AND ITS CONTROLLED ENTITIES ANNUAL REPORT 2009
