For personal use only - ASX · 2011. 2. 28. · Final 30 June 2010 - - Interim 31 December 2010 - - Record Date for interim dividend. N/A Brief Explanation of results The Board of

__________________________________________________________________________

Excela Limited

ACN 108 069 003

Appendix 4D Half-Year Report

For The Period Ended 31 December 2010 (previous corresponding period being

the half-year ended 31 December 2009)

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Excela Limited ACN 108 069 003

Half-Year Ended 31 December 2010

Results for Announcement to the Market $’000 % Change Revenue from ordinary activities 2,637 76.6 Profit from ordinary activities after tax attributable to members

(176) (119.4)

Net profit attributable to members (176) (119.4)

Dividends Per Share Cents per share % Franked Final 30 June 2010 - - Interim 31 December 2010 - -

Record Date for interim dividend. N/A

Brief Explanation of results The Board of Excela Limited reports an Earnings Before Interest, Tax & Amortisation (EBITA) of $162,784 for the half-year ended 31 December 2010, with a Net Profit/(Loss) After Tax (NPAT) (and amortisation) of $(176,030). This is a decrease of $1,084,152 or 119.4% on the corresponding period last year. These results reflect the acquisition of Excela Equities Ltd and its stockbroking business on the 12th August 2010; whilst the comparative period only reflected the company’s investment management activities. Stockbroking

Excela’s stockbroking business generated revenues of $1,613,816 for the period from 13th August to 31 December 2010, contributing $530,438 to group NPAT. This business segment continues to grow and will see further broker appointments in 2011. Funds Mangagement

The funds management business generated revenues of $458,691, whilst decreasing group NPAT by $(936,697). As noted in the company’s release to the market on the 2nd June 2010, it is the company’s intention to grow its Funds Under Management (FUM) to $100 million by the 30th June 2012. As such, significant resources have already been expended towards achieving this goal. Investment Management

Investment management activities generated revenues of $564,545 and contributed $466,868 to group NPAT in the period. This reflects the liquidation of the bulk of the company’s direct investment portfolio and the associated gains made on the disposal of these holdings.

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Based on the weighted average number of shares on issue, the loss result equates to after tax earnings of (0.64) cents per share, a decrease of 111.7% on the previous corresponding period’s result. Net tangible assets per security, after tax, were $0.2020 as at 31 December 2010, compared with $0.6669 as at 31 December 2009. The exclusion of net intangible assets acquired during the period reduced this figure by $0.2998 per share. On the 14th July 2010 Excela Ltd announced the proposed acquisition of Excela Equities Ltd (formerly Freeman Fox Stockbroking Pty Ltd). This acquisition was approved at an extraordinary general meeting of shareholders on the 12th August 2010, with completion taking place the same day. As consideration for the shares in Excela Equities Ltd, 6,375,000 shares ($2,550,000) in Excela Ltd were issued to Freeman Fox Securities Pty Ltd (the vendor, a company controlled by Mr Peter Spann) and remain under escrow until 11 August 2012. In addition $1,950,000 was paid in cash, with performance hurdle payments of $1,500,000 due over the next three financial years, these tied to the EBITDA of Excela Equities Ltd. On the 2 July 2007 Excela Limited announced it intended to proceed with an on market buy-back of its shares. At the Company’s annual general meeting in November 2010, shareholders resolved to extend the period of the on market buy-back to 25 November 2011, covering up to 20% of the ordinary shares. At the date of this report, 5,943,646 shares have been purchased under the buy-back plan. This Preliminary Final Report for Excela Limited is based on accounts that have been reviewed and are not subject to disputes or qualifications.

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EXCELA LIMITED GROUP

FINANCIAL STATEMENTS and REVIEW REPORT

For the period ended 31 December 2010

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ACN 108 069 003

For the half year ended 31 December 2010

Contents

Page

Managing Director's Report 1

Directors' Report 4

Auditors' Independence Declaration 5

Statement Of Comprehensive Income 6

Statement Of Financial Position 7

Statement Of Cash Flows 8

Statement Of Changes In Equity 9

Notes To The Financial Statements 10

Directors' Declaration 20

Independent Auditor's Review Report 21

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Managing Director’s Report

Hello fellow Shareholders,

I am very pleased to be writing to you to update you, mid-year on our progress.

Firstly, and encouragingly, the EBITDA result for the company for the first half was a profit of

$162,784.

The Excela Group has continued to expand since our last report.

You might remember that we have been aggressively working to change the operations of the

company from direct investing (valued on NTA) to a company that would be valued on earnings.

Shortly after the end of the last financial year, we successfully acquired Freeman Fox

Stockbroking Limited (now Excela Equities Ltd) and this, along with Excela Funds Management

Pty Ltd now make up approximately 58% of our total business assets.

Considering a further 26% of company assets are invested in our own funds, only 16% of the

company’s assets are now invested directly in either cash, equities or derivativesi. We are

pleased with the progress we’ve made in achieving this stated goal for the business.

We have appointed a Chief Operating Officer to oversee operations and grow our two core

businesses – Equities and Funds Management.

Now, our focus as Shareholders is on earnings and my report brings you up to date with the

larger developments and performance of our two core businesses.

We will continue to work diligently to integrate the new acquisitions.

Excela Equities Ltd

The last ½ of 2010 saw the ASX rally over 5.5% but substantially underperform the US markets,

with the Dow Jones Industrial average climbing over 10.5% while the broader S&P500 index

rallied over 14% for the same period.

In the commodities sector, Gold rallied to historically high levels, breaching the US$1420 an

ounce, while crude also managed to maintain its upward momentum, closing the year well

above US$90 a barrel.

Both hard and soft commodities performed extremely well in light of strong demand from the

emerging economies in conjunction with an overall positive outlook for a recovery in the US and

Europe.

Excela Equities Ltd performed quite strongly over this period, with monthly commissions on

average around $80,000 higher than the previous financial year.

A new Head of Equities was appointed in August. As well as a focus on our historical strength of

the Buy-Write, the division also introduced a number of new trading strategies which saw both

portfolio performance and revenues achieve strong results over the period.

If the share market continues to perform well the outlook for this division will be positive.

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Excela Funds Management Pty Ltd

Our Funds Under Management (FUM) continued to grow steadily over the second half of the

year with the majority of FUM inflow generated through our planning partners Freeman Fox.

Total net inflows were $1,685,211 over the 6 month period.

The performance of our Funds has been positive and the Investment Management Team made

some adjustment to the underlying Funds in both Maximiser and Emergent at the end of the

year which we believe will better position both those funds over the coming year.

The MOO Fund had a total return in December 2010 of 2.46%, and paid a distribution of just

over 1.7 cents per unit (cpu) for the month. For the six months to December the Fund had a total

return, which includes all distributions and fees, of 11.84%.

Much progress has been made on the development of an aggressive, multi-channel direct

marketing program for the company and our MOO Fund (which will shortly be re-branded as

the Accelerator Equity Income Fund) and we expect to be rolling out our first test campaign

towards June 2011.

Whilst there is a considerable start up cost for this development we remain confident it will be

returned to us in the long run.

I have been very involved in developing the campaign and associated materials and I am very

excited to see things coming together after many months of development. Soon you will see the

campaign which will include television and press advertising supported by online and direct

mail marketing.

Leads generated from the campaign will receive a comprehensive information kit which

includes a 30 minute story on the fund and some of its investors hosted by well known

Australian identity Rachel Friend, and featuring Bernard Salt and Louise Bedford.

We have also been actively developing relationships within the industry and will shortly

commence a program to increase our distributor network.

I am continuing to work closely with our marketing partners on the Accelerator campaign and I

look forward to reporting on the results of that in my next update.

Sincerely,

Peter Spann

Managing Director.

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ACN 108 069 003

Directors’ Report

4

Your directors present their report on the Group, being Excela Limited (the Company)

and its controlled entities for the half-year year ended 31 December 2010.

Directors The names of directors in office at any time during or since the end of the year are:

� Peter John Spann

� Michael Willis

� Howard Graham Woolcott

� Alan Bennett

Review and Results of Operations On 12 August 2010 the company acquired all of the issued shares in Excela Equities Ltd.

In settlement of this transaction, 6,375,000 ordinary shares were issued at a price of

$0.40, these shares remaining under escrow until 11 August 2012; whilst $1,950,000 was

paid in cash. The remaining consideration is subject to Excela Equities Ltd performance

hurdles over the next three financial years.

The net profit/(loss) for the group for the year ended 31 December 2010 after providing

for income tax amounted to $(176,030) (2009: $908,122). This result is impacted by

$326,876 after the amortisation of identifiable intangible assets, Excela Funds

Management Pty Ltd’s fund management agreements ($230,726) and Excela Equities

Ltd’s stockbroking customer relationships ($96,150).

Net Tangible Assets per Share (NTA)

At 31 December 2010 the NTA per share was $0.20 per share (2009: $0.67 per share).

The exclusion of net intangible assets acquired during the year reduced this figure by

$0.30 per share.

On Market Share Buy-Back

On 26 November 2010 the Shareholders resolved by ordinary resolution to extend the

period of the on market share buy-back to 25 November 2011, covering up to 20% of the

ordinary shares. During the period 1 July 2010 to 31 December 2010, 30,500 shares

were bought back at a cost of $9,830.

Dividends Paid or Recommended No dividends were paid or declared during or since the end of the reporting period.

Auditors’ Independence Declaration A copy of the independence declaration provided by the group’s auditors in accordance

with s307c of the Corporations Act 2001 in relation to the audit of the 31 December

2010 financial report is presented on page 5 and forms part of this Director’s Report.

Signed in accordance with a resolution of the Board of Directors:

Director

Peter John Spann

Dated this 28th day of February 2011

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Grant Thornton Audit Pty Ltd ABN 91 130 913 594 ACN 130 913 594 Ground Floor 102 Adelaide Street Brisbane Queensland 4000 GPO Box 1008 Brisbane Queensland 4001 T + 61 7 3222 0200 F + 61 7 3222 0444 E [email protected] W www.grantthornton.com.au

Page 5

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together

with its subsidiaries and related entities, delivers its services independently in Australia.

Liability limited by a scheme approved under Professional Standards Legislation

AUDITOR’S INDEPENDENCE DECLARATION

TO THE DIRECTORS OF EXCELA LIMITED & ITS

CONTROLLED ENTITIES

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead

auditor for the review of Excela Limited and its controlled entities for the half-year ended

31 December 2010, I declare that, to the best of my knowledge and belief, there have been:

1 No contraventions of the auditor independence requirements of the Corporations

Act 2001 in relation to the review; and

2 No contraventions of any applicable code of professional conduct in relation to the

review.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

M S Bell

Director, Audit & Assurance

Brisbane, Dated 28 February 2011

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ACN 108 069 003


Statement Of Comprehensive Income

31.12.2010 31.12.2009

Note $ $

Revenue 3(i) 2,637,052 1,492,674

Commission expense (480,289) -

Management & administration expenses (254,550) (171,648)

Marketing costs (423,434) -

Due diligence costs - (260,712)

Amortisation expense (326,876) -

Employment expenses (401,344) -

Occupancy expenses (313,144) -

Consultants fees (135,425) (96,827)

Services fees (114,660) -

Other expenses from ordinary activities (271,263) (862)

Directors fees (80,159) (54,503)

Profit/(loss) before income tax (164,092) 908,122

Income tax expense (11,938) -

Other comprehensive income - -

Total comprehensive income for the year (176,030) 908,122

Overall operations:

Basic and diluted earnings per share (0.01) 0.05

The above statement should be read in conjunction with the accompanying notes.

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As at 31 December 2010

Statement Of Financial Position

31.12.2010 30.06.2010

Note $ $

ASSETS

CURRENT ASSETS

Cash and cash equivalents 1,190,780 905,618

Trade and other receivables 397,873 118,183

Financial assets 3,666,370 7,039,750

Current tax assets - 5,810

Other current assets 834,765 15,275

TOTAL CURRENT ASSETS 6,089,788 8,084,636

NON-CURRENT ASSETS

Intangibles 8 8,664,669 2,610,959

TOTAL NON-CURRENT ASSETS 8,664,669 2,610,959

TOTAL ASSETS 14,754,457 10,695,595

LIABILITIES

CURRENT LIABILITIES

Trade and other payables 316,255 424,971

TOTAL CURRENT LIABILITIES 316,255 424,971

TOTAL LIABILITIES 316,255 424,971

NET ASSETS 14,438,202 10,270,624

EQUITY

Issued Capital 2 25,746,784 21,403,176

Retained earnings (11,308,582) (11,132,552)

TOTAL EQUITY 14,438,202 10,270,624


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ACN 108 069 003


Statement Of Cash Flows

31.12.2010 31.12.2009

Note $ $

CASH FLOWS FROM OPERATING ACTIVITIES

Proceeds from trading investments 3,536,259 15,594,600

Payments for trading investments (103,435) (15,498,247)

Commission income 2,072,490 -

Investment income 225,428 1,534,832

Payments to suppliers & employees (3,159,862) (1,019,142)

Payments related to management and administration

fees (254,550) (171,648)

Tax refund 5,810 -

Net cash provided by / (used in) operating activities 2,322,140 440,395

CASH FLOWS FROM INVESTING ACTIVITIES

Payment for subsidiary, net of cash acquired (2,027,148) -

Net cash provided by / (used in) investing activities (2,027,148) -

CASH FLOWS FROM FINANCING ACTIVITIES

Shares bought back (9,830) (1,195,668)

Net cash provided by / (used in) financing activities (9,830) (1,195,668)

Net increase / (decrease) in cash held 285,162 (755,273)

Cash and cash equivalents at the beginning of the

financial year 905,618 1,041,999

Cash and cash equivalents at end of financial year 1,190,780 286,726


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ACN 108 069 003

As at 31 December 2010

Statement Of Changes In Equity

Share Capital Retained Options

Ordinary Earnings Reserve Total

Note $ $ $ $

Balance 1.7.09 18,218,178 (7,741,848) - 10,476,330

Shares issued during the year - - - -

Shares bought back during the

year (1,195,668) - - (1,195,668)

Directors' options reserve

transferred to share capital on

expiration of options - -

Profit attributable to members - 908,122 - 908,122

Sub-total 17,022,510 (6,833,726) - 10,188,784

Dividends paid or provided for - - - -

Balance at 31.12.09 17,022,510 (6,833,726) - 10,188,784

Balance 1.7.10 21,403,176 (11,132,552) - 10,270,624

Shares issued during the year 3,458,438 - - 3,458,438

Deferred equity consideration

recognised 895,000 895,000

Shares bought back during the

year (9,830) - - (9,830)

Loss attributable to members - (176,030) - (176,030)

Sub-total 25,746,784 (11,308,582) - 14,438,202

Dividends paid or provided for - - - -

Balance at 31.12.10 25,746,784 (11,308,582) - 14,438,202


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Notes To The Financial Statements 1. Statement of significant accounting policies

10

The financial report is a general purpose financial report for the interim half year reporting period

ended 31 December 2010 and has been prepared in accordance with Accounting Standards, Australian Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

This interim financial report does not include all the notes of the type normally included in an

annual financial report. Accordingly, this report is to be read in conjunction with the annual

report for the year ended 30 June 2010 and any public announcements made by Excela Ltd during

the interim reporting period in accordance with the continuous disclosure requirements of the

Corporations Act 2001.

The financial report covers Excela Limited and its controlled entities as a consolidated entity

(“Group”). Excela Limited is an ASX listed public company incorporated and domiciled in Australia.

The financial report of Excela Limited complies with all International Financial Reporting Standards

(IFRS) in their entirety.

Basis of preparation

The same accounting policies and methods of computation have been followed in this interim

financial report as were applied in the most recent annual financial statements.

Reporting Basis and Conventions

The financial report has been prepared on an accruals basis and is based on historical costs

modified by the revaluation of selected financial assets and financial liabilities for which the fair

value basis of accounting has been applied.

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Notes To The Financial Statements (cont)2. Issued Capital 31.12.2010 31.12.2009

No. of No. of

Shares Shares

Fully paid ordinary shares

Opening balance 22,242,624 17,238,774

Shares issued during the year:

- in consideration of the acquisition of Excela Equities Ltd

(formerly Freeman Fox Stockbroking Ltd) 6,375,000 -

Share buy back (30,500) (1,961,227)

28,587,124 15,277,547

31.12.2010 31.12.2009

$ $

Fully paid ordinary shares

Opening balance 21,403,176 18,218,178

Shares issued during the year:


(formerly Freeman Fox Stockbroking Ltd) 3,458,438 -

Deferred equity consideration recognised:


(formerly Freeman Fox Stockbroking Ltd) 895,000 -

Share buy back (9,830) (1,195,668)

25,746,784 17,022,510

3. Segment information

The Group has identified its operating segments based on the internal reports that are

reviewed and used by the Board of Directors in assessing performance and determining

the allocation of resources. The Group is managed primarily on the basis of the service areas

it provides, with segments determined on the same basis. Those segments are:

(i) investment management, comprising the management of an investment portfolio

consisting of direct equity and managed fund investments; and

(ii) funds management, being the provision of a multi-manager approach, using sector

specialists; and

(iii) stockbroking.

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Notes To The Financial Statements (cont)3. Segment information (cont)

Basis of accounting for purposes of reporting by operating segments

(a) Accounting policies adopted

Unless stated otherwise, all amounts reported to the Board of Directors, being the chief

decision maker with respect to operating segments, are determined in accordance with

accounting policies that are consistent to those adopted in the annual financial statements of

the Group.

(b) Inter-segment transactions

There are no inter-segment sales.

(c) Segment assets

Where an asset is used across multiple segments, the asset is allocated to that segment that

receives the majority of economic value from that asset.

(d) Segment liabilities

Liabilities are allocated to segments where there is a direct nexus between the incurrence

of the liability and the operations of the segment. Borrowings and tax liabilities are

generally considered to relate to the Group as a whole and are not allocated. Segment

liabilities include trade and other payables.

(e) Unallocated items

The following items of revenue, expenses, assets and liabilities are not allocated to

operating segments as they are not considered part of the core operations of any segment:

- company holding costs, where these costs are incurred independent of the company's

business activities;

- income tax expense

- current tax liabilities

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(i) Segment Performance Stock-

31 December 2010 Investment Funds Broking

M'ment M'ment 13/8-31/12/10 Total

REVENUE $ $ $ $

External revenue 544,461 458,691 1,613,816 2,616,968

Less inter-segment sales - - - -

Interest revenue 20,084 - - 20,084

Total segment and group revenue 564,545 458,691 1,613,816 2,637,052

Segment net profit/(loss) before tax 466,868 (705,971) 626,588 387,485

and amortisation from continuing operations

Less amortisation expense - (230,726) (96,150) (326,876)

Segment net profit/(loss) after tax 466,868 (936,697) 530,438 60,609

and amortisation from continuing operations

Reconciliation of segment result to group net

profit/(loss) before tax

Amounts not included in segment result but

reviewed by Board:

- company holding costs (224,701)

Net profit/(loss) before tax from 466,868 (936,697) 530,438 (164,092)

continuing operations

We draw attention to the stockbroking segment disclosed above, being in relation to Excela

Equities Limited which was acquired during the half-year period to 31 December 2010. Had the

acquisition date been as of the beginning of the annual reporting period, the revenues

and loss of the group for the current reporting period would be $3,361,640 and ($394,611)

respectively.

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(i) Segment Performance (cont)

31 December 2009 Investment Funds Stock-

M'ment M'ment Broking Total

REVENUE $ $ $ $

External revenue 1,481,706 - - 1,481,706

Less inter-segment sales - - - -

Interest revenue 10,968 - - 10,968

Total segment revenue 1,492,674 - - 1,492,674

Segment net profit before tax from 908,122 - - 908,122

continuing operations

Stock-

(ii) Segment Assets Investment Funds Broking

31 December 2010 M'ment M'ment 13/8-31/12/10 Total

$ $ $ $

Segment assets 4,585,855 2,473,011 7,058,866

Segment asset increases for the period

- acquisitions - - 7,692,710 7,692,710

4,585,855 2,473,011 7,692,710 14,751,576

Reconciliation of segment assets to

Group assets

Unallocated assets:

- prepayments related to company holding costs 2,881

Total Group Assets 14,754,457

Segment Assets Investment Funds Stock-

30 June 2010 M'ment M'ment Broking Total

$ $ $ $

Segment assets 8,026,033 58,603 8,084,636

Total Group Assets 8,026,033 58,603 - 8,084,636

Reconciliation of segment assets to

Group assets

Unallocated assets:

- intangibles 2,610,959

Total Group Assets 10,695,595

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Stock-

(iii) Segment Liabilities Investment Funds Broking

31 December 2010 M'ment M'ment 13/8-31/12/10 Total

$ $ $ $

Segment liabilities 76,419 75,087 151,506

Segment liability increases for the

period - acquisitions - - 148,858 148,858

76,419 75,087 148,858 300,364

Reconciliation of segment liabilities to

Group liabilities

Unallocated liabilities:

- creditors related to company holding costs 15,891

Total Group Liabilities 316,255

Segment Liabilities Investment Funds Stock-

30 June 2010 M'ment M'ment Broking Total

$ $ $ $

Segment liabiltiies 368,615 56,356 424,971

Total Group Liabilities 368,615 56,356 - 424,971

(iv) Geographical Region

The Group currently operates in one geographical segment, being Australia.

4. Dividends

a. Distributions paid by the company

There were no dividends paid during the reporting period.

5. Events after the reporting period

No matters or circumstances have arisen since the end of the reporting period which

significantly affect or may significantly affect the operations of the Group, the results of those

operations or the state of affairs of the Group in subsequent reporting periods.

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Notes To The Financial Statements (cont)6. Controlled Entities

(a) Controlled Entities Consolidated

Country Of

Incorporation 31/12/2010 31/12/2009

Subsidiaries of Excela Ltd:

Excela Funds Management Pty Ltd Australia 100 -

Excela Equities Ltd Australia 100 -

(b) Acquisition of Controlled Entities

On 12 August 2010 the parent entity acquired 100% of the ordinary shares in Excela Equities Ltd.

The acquisition provided the Group with its own Australian Financial Services Licence and

brought in-house the stockbroking costs associated with its funds management business.

Acquiree's Fair

Carrying Amount value

Purchase consideration:

- ordinary shares * 4,353,438

- cash 1,950,000

6,303,438

Net Assets Acquired

Fair values of assets and liabilities acquired at acquisition date

- ASX Licence 130,000 130,000

- non-Excela customer relationships ** - 2,489,000

- Cash 235,173 235,173

- Payables (312,321) (312,321)

Identifiable assets acquired and liabilities assumed 52,852 2,541,852

Goodwill *** 3,761,586

* The consideration paid to acquire Excela Funds Management Pty Ltd consists of 6,375,000

ordinary shares at $0.40 each issued to the vendors of Excela Equities Ltd, and deferred equity

consideration. The fair value of the shares has been determined at 54.3c based on an

independent valuation at the date of acquisition undertaken by BDO Corporate Finance Sydney

as noted in the Independent Expert Report prepared for the purchased of Excela Equities Ltd.

The directors have determined that this is appropriate as the ASX market price was at a

substantial discount to the Net Tangible Asset position. These consideration shares remain

under voluntary escrow until 11 August 2012.

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Percentage Owned (%)

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Notes To The Financial Statements (cont)6. Controlled Entities (cont)

(b) Acquisition of Controlled Entities (cont)

** The non-Excela customer relationships represent the right of Excela Equities Ltd to

undertake stockbroking activities on behalf of its pre-existing customer base. For the last 3

financial years, an average of 80% of customers by value were repeat customers. These

customer relationships were the subject of an independent valuation undertaken by BDO

Corporate Finance, Sydney.

*** The goodwill represents the residual cost of acquiring the business combination after

recognising the acquiree's identifiable assets and liabilities.

7. Related Party Transactions

31.12.2010 31.12.2009

$ $

(i) Administration Fee

An administration fee of $5,348 (2009: $5,348) per month

plus goods and services tax, was paid by Excela Ltd to Fox

Portfolio Pty Ltd, a company controlled by Mr Peter Spann

during the year. This fee covers the provision of

administration support services to the Group. Excela Ltd is a

financial services provider and can claim only 75% of the GST

paid. As such an unrecoverable expense of $462 (2009: $864)

in relation to the GST on the administration service fee is 32,550 32,952

incurred.

(ii) Premises and Services Fees

Excela Ltd paid, on behalf of Excela Equities Ltd, premises

and services fees to Smaartco Pty Ltd (as trustee for the

Libero Volpe Trust), a company controlled by Mr Peter

Spann, during the year. These fees are $53,846 and $25,360

per month, respectively. Persuant to the Premises

Agreement, Smaartco provides building, equipment,

utilities and communications services. Persuant to the

Services Agreement, Smaartco provided server, network,

telephone, CRM and broker application services. During

December 2010, the company pre-paid 11 months of charges

in order to access a 12% discount offered by the supplier.

Premises fees 243,448 -

Services fees 114,660 -

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Notes To The Financial Statements (cont)7. Related Party Transactions (cont)

31.12.2010 31.12.2009

$ $

(iii) Consultant Fees

Consultant fees were paid to Woolcott Corporate

Developments Pty Ltd, a company of which Mr Howard

Woolcott is a director. 21,250 -

(iv) Commissions

Excela Funds Management Pty Ltd (EFM), in its capacity as

fund manager of its funds Generator, Emergent, Maximiser

and the Managed Options Opportunities Fund, pays trail and

up-front commissions to Freeman Fox Ltd, a company

owned by Mr Peter Spann during the year:

- trail commission 120,745 -

- up-front commission 87,397 -

(v) Investments in Related Entities 31.12.2010 30.06.2010

$ $

On 20 January 2009, Excela Ltd acquired 675,000 shares (5%)

in Freeman Fox Securities Pty Ltd , a private company, at the

time of the transaction, 100% owned ultimately by Mr Peter

Spann, at a cost of $500,000.

Freeman Fox Securities Pty Ltd is the parent company of the

Freeman Fox Group and its associated business operations.

The directors are of the opinion that the investment is on at

least an arm's length basis and does not constitute a

substantial asset as defined in the ASX listing rules. 500,000 500,000

Following is the market value of NSX listed director related

entities held by the company at period end:

- Property Fox No.1 (PF1) * - 316,500

- Property Fox No.2 (PF2) ** 185,910 12,833

* PF1 conducted a share buy-back during the prior period, from

which Excela Ltd received $139,260 for 40% of its holding in

PF1

** During the prior period a successful takeover of PF1 was

completed by PF2, from which Excela Ltd received $7,596

and 341,820 shares in PF2.

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ACN 108 069 003


Notes To The Financial Statements (cont)7. Related Party Transactions (cont)

31.12.2010 31.12.2009

$ $

(vi) Office Rental

Office rental of $11,250 (2009: $nil) per month plus goods

and services tax, was paid by Excela Ltd to Ann Street

Administration Services Pty Ltd, a company controlled by Mr

Peter Spann during the year. This rent is for office space in

Freeman Fox's Sydney office. 69,696 -

8. Intangible Assets

31.12.2010 30.06.2010

$ $

Excela Funds Management Pty Ltd goodwill - -

Excela Funds Management Pty Ltd management rights 2,877,000 2,877,000

Accumulated amortisation (496,767) (266,041)

2,380,233 2,610,959

Excela Equities Ltd goodwill 3,761,586 -

Excela Equities Ltd customer relationship intangible 2,489,000 -

Accumulated amortisation (96,150) -

2,392,850

Australian Financial Services Licence 130,000 -

8,664,669 2,610,959

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ACN 108 069 003


Directors' Declaration

The directors of the company declare that:

1. The financial statements and notes, as set out on pages 6 - 19

a) comply with Accounting Standard 134: Interim Financial Reporting

and the Corporations Regulations; and

b) give a true and fair view of the economic entity's financial position

as at 31 December 2010 and of its performance for the half year

ended on that date.

2. In the directors' opinion there are reasonable grounds to believe that the

company will be able to pay its debts as and when they become due and

payable.

The declaration is made in accordance with a resolution of the Board of Directors.

Director

Peter John Spann

Dated this 28th day of February 2011

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Grant Thornton Audit Pty Ltd ABN 91 130 913 594 ACN 130 913 594 Ground Floor 102 Adelaide Street Brisbane Queensland 4000 GPO Box 1008 Brisbane Queensland 4001 T + 61 7 3222 0200 F + 61 7 3222 0444 E [email protected] W www.grantthornton.com.au

Page 21

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together

with its subsidiaries and related entities, delivers its services independently in Australia.

Liability limited by a scheme approved under Professional Standards Legislation

INDEPENDENT AUDITOR’S REVIEW REPORT

TO THE MEMBERS OF EXCELA LIMITED & ITS

CONTROLLED ENTITIES

We have reviewed the accompanying half-year financial report of Excela Limited and its

controlled entities (“consolidated entity”), which comprises the consolidated financial

statements being the statement of financial position as at 31 December 2010, and the

statement of comprehensive income, statement of changes in equity and statement of cash

flows for the half-year ended on that date, a statement of accounting policies, other selected

explanatory notes and the directors’ declaration of the consolidated entity, comprising both

the Company and the entities it controlled at the half-year’s end or from time to time during

the half-year.

Directors’ responsibility for the half-year financial report

The directors of the consolidated entity are responsible for the preparation and fair

presentation of the half-year financial report in accordance with Australian Accounting

Standards (including the Australian Accounting Interpretations) and the Corporations Act

2001. This responsibility includes establishing and maintaining internal controls relevant to

the preparation and fair presentation of the half-year financial report that is free from

material misstatement, whether due to fraud or error; selecting and applying appropriate

accounting policies; and making accounting estimates that are reasonable in the

circumstances.

Auditor’s responsibility

Our responsibility is to express a conclusion on the consolidated half-year financial report

based on our review. We conducted our review in accordance with the Auditing Standard

on Review Engagements ASRE 2410: Review of a Financial Report Performed by the

Independent Auditor of the Entity, in order to state whether, on the basis of the procedures

described, we have become aware of any matter that makes us believe that the financial

report is not in accordance with the Corporations Act 2001 including giving a true and fair

view of the consolidated entity’s financial position as at 31 December 2010 and its

performance for the half-year ended on that date; and complying with Accounting Standard

AASB 134: Interim Financial Reporting and the Corporations Regulations 2001.

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Page 22

As the auditor of the consolidated entity, ASRE 2410 requires that we comply with the

ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons

responsible for financial and accounting matters, and applying analytical and other review

procedures. A review is substantially less in scope than an audit conducted in accordance

with Australian Auditing Standards and consequently does not enable us to obtain assurance

that we would become aware of all significant matters that might be identified in an audit.

Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we complied with the independence requirements of the

Corporations Act 2001.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that

makes us believe that the half-year financial report of the Group is not in accordance with

the Corporations Act 2001, including:

1 Giving a true and fair view of the consolidated entity’s financial position as at 31

December 2010 and of its performance for the half-year ended on that date; and

2 Complying with Accounting Standard AASB 134: Interim Financial Reporting and

Corporations Regulations 2001.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

M S Bell

Director, Audit & Assurance

Brisbane, Dated 28 February 2011

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Documents

For personal use only - ASX · 2011. 2. 28. · Final 30 June 2010 - - Interim 31 December 2010 - - Record Date for interim dividend. N/A Brief Explanation of results The Board of