FOCUSING ON INVESTMENT TALENT

TREASURY GROUP LIMITED ANNUAL REPORT 2009

1 INTRODUCTION 2 ABOUT US 4 CHAIRMAN’S REPORT
6 MANAGING DIRECTOR’S REPORT 15 MANAGEMENT
16 DIRECTORS’ REPORT
26 AUDITOR’S INDEPENDENCE DECLARATION
27 CORPORATE GOVERNANCE STATEMENT 30 FINANCIAL STATEMENTS 35 NOTES TO THE FINANCIAL STATEMENTS
69 DIRECTORS’ DECLARATION
70 INDEPENDENT AUDITOR’S REPORT 72 ASX ADDITIONAL INFORMATION IBC CORPORATE INFORMATION

AGM

Treasury Group Limited’s Annual General Meeting will be held at The Mint, 10 Macquarie Street Sydney on 12 November 2009 commencing at 10:00am. All shareholders are invited to attend and are entitled to be present. Shareholders who are unable to attend the Annual General Meeting, but choose to vote on the proposed resolutions, are encouraged to complete a proxy form and lodge it at least 48 hours prior to the meeting with our share registry.

INTRODUCTION

TREASURY GROUP’S STRATEGY IS TO GENERATE SHAREHOLDER VALUE BY PARTNERING WITH OUTSTANDING INVESTMENT PROFESSIONALS IN THE BOUTIQUE FUNDS MANAGEMENT SECTOR.

Treasury Group Limited (Treasury Group or the Company) commenced its focus on funds management in 2000 and has since grown to be a market leader in boutique funds management.

The successful business model that we have developed empowers investment professionals to do what they do best — manage client funds. Our unique model comprises a suite of support services and infrastructure that streamlines operations and allows the investment teams to focus on achieving better results for their clients.

Today, the group has grown to include six boutique fund managers, with group-wide funds under management exceeding $11 billion.

Whether you are a client of one of the boutiques or a shareholder in Treasury Group we trust you will have a long and rewarding association with us.

TREASURY GROUP LIMITED 1

ABOUT US

OUR BUSINESS IS TO SUPPORT TALENTED FUND MANAGERS IN THEIR OWN BOUTIQUE FUNDS MANAGEMENT BUSINESSES.

COMPANY OVERVIEW

Treasury Group invests in, and supports the management of, small to medium sized asset management companies. The aim is to support talented fund managers in an environment which:

��
��
�� companies
�� with managing their funds
�� governance and client service

RARE Infrastructure Limited (RARE) was formed in July 2006, specialising in global listed infrastructure.

Cannae Capital Partners Limited (Cannae), led by Hugh Giddy invests in Australian and New Zealand equities, and commenced in October 2007.

VISION

Treasury Group’s vision is to be the leading developer of boutique funds management businesses in Australia. Our proven experience with boutique fund managers is based on our extensive network of valuable relationships, a robust back-office support capability and access to investment capital.

MISSION

PROFILE

The group currently includes six boutique fund management businesses. The first investments were in Australian equity managers, but we have since expanded to include three international equity managers.

In 2001, Treasury Group invested in Investors Mutual Limited (IML), a value manager in Australian equities.

Orion Asset Management Limited (Orion), a growth manager in Australian equities, was formed with Tim Ryan in 2003.

Global Value Investors Limited (GVI), a value manager in international equities, was formed in early 2005 as a joint venture with Investors Mutual.

Treasury Asia Asset Management Limited (TAAM), a specialist in Asia Pacific equities, was formed in association with Peter Sartori in 2005.

Our mission is to provide fund managers with full service capability and to maintain a culture based on partnering and support. The businesses will be founded on robust processes and systems and insightful knowledge of markets and clients. The goal is to achieve scalable returns in the medium term for the investment teams and our shareholders.

VALUE

We believe that the experience and skill of key investment professionals is critical when considering successful long-term investment goals. To back that up, we adopt a philosophy of supporting high quality investment professionals through lean and efficient operations, low bureaucracy, and a focus on long term business goals.

2 ANNUAL REPORT 2009

COMPANY STRUCTURE

OF OUR CURRENT SUITE OF BOUTIQUE ASSET MANAGERS, TREASURY GROUP’S LONGEST STANDING RELATIONSHIP IS WITH INVESTORS MUTUAL LTD. OTHER BOUTIQUES HAVE FOLLOWED OVER THE YEARS, WITH THE CURRENT STRUCTURE OF THE GROUP BEING AS FOLLOWS:

AUSTRALIAN EQUITIES	INTERNATIONAL EQUITIES SERVICES COMPANY

TREASURY GROUP LIMITED 3

CHAIRMAN’S REPORT

NPAT – $4.946 MILLION NORMALISED NPAT – $7.515 MILLION FULL YEAR FRANKED DIVIDEND OF 20 CENTS PER SHARE

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RESULTS

Treasury Group’s normalised profit fell 57% over the financial year as our earnings were impacted by one of the most severe market corrections in 80 years. The decline in underlying funds under management, particularly in the retail market, reduced revenues. While we adjusted our cost base including staff reductions and a sharp reduction in variable compensation, the decline in revenues from cyclical highs, flowed into our profitability.

Despite the investment market conditions, our investment managers continued to deliver strong relative performance. With positive net inflows, particularly in our Treasury Asia Asset Management, GVI, Orion and RARE businesses, our funds declined 12.6% during the financial year, falling at a significantly slower rate than the decline in the Australian and International Equity indexes.

Overall I am pleased with the robustness of our business during this unprecedented period of market volatility. Our debt free balance sheet and the strength of our boutique partners, places Treasury Group in a strong position for future growth.

OUTLOOK

During the year a number of commentators questioned whether the development of boutique investment groups remains a viable business model in a more difficult investment environment. Our experience indicates that boutiques, working with a strong partner such as Treasury Group, are extremely well placed during periods of market volatility. As a result of our focus on working with only the highest quality investment managers, our boutiques have been in a position to perform well during the market downturn and continue to attract funds under management. They have also been in a position to take a medium term view to business management during this period and continue to focus on client needs and requirements at all times. A focused boutique model, where the key principals have a significant stake in the success of their client’s portfolios, has been confirmed as an outstanding approach to asset management. We believe that this can offer superior outcomes when compared with large financial conglomerates.

4 ANNUAL REPORT 2009

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Number of Investment
Professionals within the group
($M)
60
50
40
30
20
10
0
2003 2004 2005 2006 2007 2008 2009
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During the year, the Board decided to reduce the dividend as our earnings where impacted by the market downturn and to allow capital to be used for future investment opportunities. Importantly the balance sheet position of the company remains strong, leaving Treasury Group in a position to continue to pursue world class investment talent and look to attract them to the boutique model.

We also added to our senior management team, with the appointment of Mark Burgess as Managing Director. Mark brings considerable global investment experience, having been in the industry for over 24 years and previously held the position of Executive Vice Chairman of Credit Suisse Asset Management, based in London. Working with David Cooper as Executive Director, we are confident that Treasury Group is well positioned to take advantage of future growth opportunities and to continue to attract outstanding investment talent.

We also focused on expense management during the year. Staffing levels were reduced and variable compensation was sharply curtailed, particularly at the senior management level. While our boutiques focused on expense management, a number also took the opportunity to attract outstanding investment talent which became available during this downturn. Looking forward, with a strong balance sheet and boutiques of the highest quality, we are looking to add to our boutique line up, taking advantage of Treasury Group’s outstanding position in the market, solid distribution capability both in Australia and offshore, and reputation for working with investment teams to build strong asset management companies. We expect to attract new boutique partners during this period of market weakness, and we look forward to working with talented investment managers.

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M Fitzpatrick Chairman

TREASURY GROUP LIMITED 5

MANAGING DIRECTOR’S REPORT

REVIEW OF 2009 FINANCIAL YEAR

DESPITE A DECLINE IN PROFITABILITY DURING THE FINANCIAL YEAR, TREASURY GROUP’S UNDERLYING FINANCIAL POSITION REMAINS STRONG.

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By avoiding many of the excesses during the market peak — such as building up debt or supporting exotic financial products — the Treasury Group model remains strong. During the year, we saw organic growth in a number of our businesses and our earnings streams have continued to diversify. The ability to attract assets during a market downturn, is indicative of the quality of the investment boutiques, the strength of distribution and a consistent focus on client requirements.

We also continued to grow our client base both in Australia and offshore. During the year we saw an expansion in assets managed through our Dublin UCITS III funds (TG Funds), the expansion of our European client base and the winning of US corporate pension clients. Through offshore expansion we are able to diversify our earnings stream, attract high quality clients and increase the attractiveness of the Treasury Group model to future investment boutiques.

Our Australian investment managers are well placed with strong relative investment performance. IML has offered a consistent investment approach and has delivered solid protection against the market downturn, focusing on quality companies at reasonable prices. Orion continues to attract assets with consistent investment returns and Cannae’s investment performance during the financial year was strong against benchmark.

During the year Global Value Investors (GVI) added further resources to the investment team and has begun a concerted focus on growing in the institutional market place. Treasury

Asia Asset Management (TAAM) saw growth in funds under management and with a Singapore and Sydney office, TAAM has attracted considerable interest from both Australian and international clients.

RARE Infrastructure (RARE) also continues to perform well, with further growth in assets under management. With the expansion of clients in Australia, Europe and the US, clients are noting RARE’s unique investment position and are attracted by the diversification and return opportunities available in listed infrastructure.

During the year we focused particularly on expense management, reducing staff by 10% in Treasury Group and sharply reducing the variable compensation of our staff, particularly for the senior executive team. Our boutiques also targeted expense management over the period while remaining focused on the long term growth of their businesses.

Although we were disappointed by the decline in profitability, we were pleased with the robust nature of our business model during this difficult period, and with a strong balance sheet and strong boutique businesses, we are confident that the outlook for Treasury Group remains strong.

Looking forward, we are focused on attracting the highest quality investment staff, while also working to capture the opportunities available during the current period of market weakness. Our growing domestic and global client base is of importance to new boutique opportunities and we are working to secure the growth opportunities available to us.

6 ANNUAL REPORT 2009

Funds Under Management ($ billions) All managers associated with Treasury Group June 2002 to July 2009

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18
16
14
12 11.5
10
8
6
4
2
June 02Sept Dec Mar June 03SeptDec Mar June 04SeptDec Mar June 05SeptDec Mar June 06SeptDec Mar June 07SeptDec Mar June 08SeptDec Mar June 09July 09
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Funds Under Management — By Manager July 2009

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CANNAE 0%
TRILOGY
10%
RARE 9% IML 27%
TAAM 12%
GVI 5%
Orion 37%
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TREASURY GROUP LIMITED 7
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MANAGING DIRECTOR’S REPORT CONTINUED.

TREASURY GROUP INVESTMENT SERVICES (TIS) — A WHOLLY OWNED SUBSIDIARY

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CLOCKWISE FROM LEFT TO RIGHT:
RISK & COMPLIANCE:
ALISON SMITH, JAMES VELLA BARDON, ELIZABETH
CALNAN, NICK IRELAND, DONNA MADDEN
ADMINISTRATION / HR / OPERATIONS:
ANNE-MAREE LYNCH, JUSTINE WILLIAMSON,
CAROLYN KIFFIN, VANESSA HODGSON
FINANCE:
REMY IGONIA, WEINA ZHU, IAN PERRY, RON PATEL,
JADE CHUNG, MARIA BATOON
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Treasury Group, through TIS, provides its managers with a full suite of business support services and is the Responsible Entity (RE) for investment products issued by group managers. TIS also acts as investment manager for the listed investment company, Premium Investors Ltd.

TIS offers a critical range of services to our managers, in key areas of support for our boutiques. Importantly, it is TIS’s focus on these areas of support which enables the world class investment teams operating inside the boutiques, to largely focus on investment management without distraction. We believe that there will be increased government and client focus on key areas such as compliance, risk and legal hurdles and TIS plays a critical role in supporting the managers in these areas.

We have seen greater client review of the support function, as they look to ensure that the manager is well supported. TIS consistently receives outstanding ratings from clients. TIS has also supported our boutiques in offshore expansion. The Dublin fund range is gaining client flows and during this year, TIS, working with RARE Infrastructure, developed a US platform which enables the management of US Corporate pension plans. This growth in platforms across regulatory boundaries will be a critical element of future fund expansion.

During the year, TIS also launched Compli-Space — an automated compliance system which increases the efficiency of compliance management. This will offer an improved compliance service to all managers.

8 ANNUAL REPORT 2009

INVESTORS MUTUAL LIMITED (IML)

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FROM LEFT TO RIGHT: FRONT: ROB BISHOP, JULIAN BEAUMONT, ANTON TAGLIAFERRO, HUGH DIVE, CHRIS PRUNTY BACK: DON FACCHINO, SIMON CONN, PAUL WINTER, MAKE WADE, TONY RICHARD-PRESTON, JASON TEH

IML continues to adhere to its long held value philosophy. During this year the IML approach of focusing on high quality companies resulted in significant outperformance, as IML looked to protect against capital loss during the downturn. In an industry where focusing on short term performance has often taken place to the detriment of long term client returns, we are pleased to confirm that IML’s medium term focus has delivered excellent relative returns.

IML saw a move up in investment ratings over the year, but did suffer fund outflows, particularly during the periods of market distress as retail investors looked to reduce their equity weightings. The distribution team worked tirelessly during the year to ensure that clients were updated on IML’s outlook for the investment markets and how IML had portfolios positioned. IML also focused on expanding into the institutional market with tax effective investment funds.

IML added to its investment team during the year. The team is well resourced with an experienced group of analysts and portfolio managers focused on investment returns for clients.

TREASURY GROUP LIMITED 9

MANAGING DIRECTOR’S REPORT CONTINUED.

ORION ASSET MANAGEMENT LIMITED (ORION)

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FROM LEFT TO RIGHT: FRONT: LEAH HASAPIS, REBECCA WALLER, MELANIE HASSAPIS, LISA CHAPMAN BACK: GEORGINA TAYLOR, TIM RYAN, TRISTIAN PATIENCE, DUSHKO BAJIC, JOHN LOBB, DOMINIC FALLINS

With another solid year of investment returns against benchmark, Orion continued to gain net new assets under management. Orion remains a premier boutique manager of assets with a reputation for high quality investment and excellent client relationships.

Orion’s distribution relationships with Trilogy Advisors of New York, continues to be beneficial for both groups with Trilogy managing assets for a high quality list of Australian clients.

10 ANNUAL REPORT 2009

GLOBAL VALUE INVESTORS LIMITED (GVI)

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FROM LEFT TO RIGHT
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MATTHEW SADDINGTON, DANIEL FITZGERALD, WILLIAM TOMAC, ROY CHEN, MATTHEW HEGARTY, AYUSH SRIVASTAVA

GVI had strong relative investment performance, particularly in the first three quarters of the year. There were moderate net new client flows during the year, an outstanding achievement given the period of market weakness — testament to the team’s relationship with the retail base and an outstanding

contribution from the distribution team. GVI also moved to grow its presence in the institutional client base with a strong push into this market.

GVI strengthened its investment management group during the year with the addition of an outstanding investment manager.

TREASURY GROUP LIMITED 11

MANAGING DIRECTOR’S REPORT CONTINUED.

TREASURY ASIA ASSET MANAGEMENT LIMITED (TAAM)

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FROM LEFT TO RIGHT

SYDNEY OFFICE: USHANTHI JAYASINGHE, ANNA MAXWELL, PETER SARTORI, SHELDON RIVERS SINGAPORE OFFICE: MICHELLE MAK, STEPHEN LEE, ENG TECK TAN, KATHY NG

TAAM’s client base continued to grow during the year, as investors globally focused on increasing their exposure to the Asian markets.

With offices in both Singapore and Sydney, a stable investment team and well diversified client base, TAAM is well positioned for future growth. The quality of the client base is extremely high and is testament to the investment team, its investment

processes and the work undertaken by the distribution team. TAAM also gained representation on a number of leading retail platforms and is progressing on the institutional front with solid ratings from the major asset consultants.

With Asia likely to be a key driver of future global economic growth, TAAM is well positioned to participate in this growth.

12 ANNUAL REPORT 2009

RARE INFRASTRUCTURE LIMITED (RARE)

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FROM LEFT TO RIGHT:

FRONT: CHRISTINA ZAHRA, NICK LANGLEY, RICHARD ELMSLIE, SARAH MADDOX, EMMA YOUNG, SARAH SHAW BACK: MATT DELL, BEN DALY, ROD CHISHOLM, TIM SNELGROVE, TIM HUMPHRIES, DAVID MAYWALD, JONATHAN REYES

RARE had an outstanding year with investment returns outperforming competitors and assets growing strongly. Clients were gained in Europe and Australia and for the first time in the US. The US corporate pension clients represent an important step for RARE, opening up a significant market for future client growth.

RARE’s two core funds — global and emerging market — offer clients access to an important and unique asset class. With governments globally focused on increasing spend into infrastructure, we believe that RARE is well positioned for future growth as the listed infrastructure market continues to expand. RARE’s funds also offer an important potential source of dividend yield, in an environment where yielding assets are becoming increasingly attractive for those entering retirement.

TREASURY GROUP LIMITED 13

MANAGING DIRECTOR’S REPORT CONTINUED.

CANNAE CAPITAL PARTNERS LIMITED (CANNAE)

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FROM LEFT TO RIGHT: FRONT: MICHAEL O’NEILL, HUGH GIDDY, DANIEL MUELLER BACK: ALISON WILLIAMSON, ANDY FORSTER, DANIEL MOORE

Cannae’s investment performance against benchmark was strong over the year. The team settled into its second year as a boutique, creating a strong investment and collegiate culture. Although Cannae remains in the early stage of development, the team is focused on outstanding investment returns, and presenting their investment style and process to the institutional market.

CONCLUSION

The long term business goals of Treasury Group remain focused on growing the number of managers we partner with, continuing to enhance the support we provide to our managers and to grow our assets with clients both in Australia and offshore.

With the investment environment having been one of the most difficult in many decades, we believe that the Treasury Group boutique model has performed well, with a strong balance sheet and good fund flows.

The foundation of Treasury Group is our relationship with our boutique partners. By working with outstanding investment teams who are focused on achieving client objectives, we have come through this difficult period in a solid position. Treasury Group provides support services to our managers and we are focused on providing the best possible service at all times. We look forward to continuing this relationship and further enhancing our service offering during the upcoming year.

Our growth of clients both domestically and offshore, allows Treasury Group to build a diversified client base and attract future investment teams. The Dublin platform and growth of US based clients should hold us in a good position for future growth in offshore clients.

I would like to thank the staff at Treasury Group and our boutique partners for the work done during this year. In particular the investment teams worked hard during the year always focused on protecting client monies and meeting client expectations during a very difficult period.

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Mark Burgess Managing Director

14 ANNUAL REPORT 2009

MANAGEMENT

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FROM LEFT TO RIGHT CHRISTINE FELDMANIS, JOSEPH FERRAGINA, ROB SULLIVAN

CHRISTINE FELDMANIS

Christine Feldmanis is the Managing Director of Treasury Group Investment Services Limited (TIS) and director of TG Investment Funds plc. TIS is responsible for all back office support functions of the managers including risk and compliance.

ROB SULLIVAN

Rob Sullivan, Head of Distribution, has extensive experience in developing key long term client relationships and building assets under management derived both locally and globally, for Treasury Group boutiques.

JOSEPH FERRAGINA

Joseph Ferragina is our Chief Financial Officer and leads the team responsible for accounting, finance and tax across the group. Joseph also sits on the boards of RARE Infrastructure, Orion Asset Management and Treasury Asia Asset Management.

TREASURY GROUP LIMITED 15

DIRECTORS’ REPORT

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FROM LEFT TO RIGHT DIRECTORS: MICHAEL FITZPATRICK, MARK BURGESS, DAVID COOPER, PETER KENNEDY, REUBERT HAYES COMPANY SECRETARY: REEMA RAMSWARUP

Your Directors submit their report for the year ended 30 June 2009.

DIRECTORS

The names and details of the Company’s Directors in office during the financial year and until the date of this report are listed below. Directors were in office for this entire period unless otherwise stated.

NAMES, QUALIFICATIONS, EXPERIENCE AND SPECIAL RESPONSIBILITIES

MICHAEL FITZPATRICK,

(Chairman) B. Eng, B (Oxon) Honours

Mr Fitzpatrick joined the Board on 5 October 2004. He was the founder and Managing Director of Hastings Funds Management Limited. Prior to establishing Hastings in 1994, he was a Director of Credit Suisse First Boston. He is also a Director of Rio Tinto Ltd, Rio Tinto plc, Chairman of the Australian Football League and former Chairman of the Australian Sports Commission and was a Director of Hastings High Yield Fund and Hastings Diversified Utilities Fund. Mr Fitzpatrick is a member of the Audit Committee, Remuneration Committee and Nomination Committee.

MARK BURGESS,

(Managing Director) (appointed 17 December 2008)

Mark Burgess joined the Board on 17 December 2008, having been the Chief Executive Officer (CEO) of the company since October 2008. Prior to joining the Company, Mr Burgess worked at Credit Suisse Asset Management as Executive Vice Chairman and CEO for Europe, Middle East & Africa.

DAVID COOPER,

(Executive Director) B. Ec. /Fin.

David Cooper joined the Board on 8 August 2005, and was the Chief Executive Officer (CEO) of the company from July 2004 until October 2008. Mr Cooper joined Treasury Group Limited in July 2002 as Strategic Investments Manager. Prior to joining the Company, he was the Head of the Institutional Division at Perpetual Investments Ltd.

RODNEY GREEN, (NON-EXECUTIVE DIRECTOR) CA, ASIA (resigned 12 November 2008)

Mr Green joined the Board on 14 November 2001, resigning on 12 November 2008 and has over 30 years experience in the financial services industry. Prior to joining Treasury Group Limited Mr Green was the Chief Investment Officer and then Chief Executive Officer of Perpetual Investments

16 ANNUAL REPORT 2009

Ltd with total funds under management then of $15 billion. Mr Green was also a member of the Remuneration Committee.

PETER KENNEDY,

�� of Treasury Group Limited in October 2005.

(Non-Executive Director) B.Ec. L.L.M.

Mr Kennedy joined the Board on 4 June 2003 and is a senior partner with Madgwick lawyers and has over 30 years experience in commercial law. He is the Chairman of the Audit Committee and the Remuneration Committee.

During the past three years Mr Kennedy has also served as a Chairman of the following other listed companies:

��

REUBERT HAYES,

��

�� Hayes has 41 years experience in investment management and stockbroking research, and was a founder and CEO of Ausbil Dexia Limited, a specialist wholesale boutique asset management operation. Mr Hayes was also a joint founder of Barclays Bank investment operations in Australia in 1984, and was CEO of that business for 12 years until 1996. Prior to this Mr Hayes held senior investment roles with AMP and �� of Company Directors. Mr Hayes has also been a director of Premium Investors Limited (a listed investment company) since ��

He is the Chairman of the Nomination Committee.

COMPANY SECRETARIES

REEMA RAMSWARUP,

BA (Justice Administration)

Ms Ramswarup commenced with Treasury Group Limited in March 2008. She has worked in company secretarial roles at Wattyl and AMP and has secretariat experience in local government and professional services. Ms Ramswarup is

currently completing her Graduate Diploma in Applied Corporate Governance through Chartered Secretaries Australia.

��

�� experience in a range of funds management companies including

�� AND RELATED BODIES CORPORATE

As at the date of this report, the interests of the Directors in the shares and options of Treasury Group Limited were:

	Ordinary	Ordinary	Options over
	Shares		Ordinary Shares
M. Burgess		—	1,000,000
D. Cooper	633,000		650,000
��	��	��	�
R. Hayes		—	—
P. Kennedy	120,978		—
Earnings per share			Cents
Basic earnings per share			21.43
Diluted earnings per share			21.43
Dividends		Cents	$
��
� ��		��	��
Dividend paid in the year:
Interim for the year
� ��
paid on 27 March 2009		10.0	2,307,076
��
in the 2008 report
� ��
paid on 26 September 2008		30.0	6,929,830

��

Corporate structure

Treasury Group Limited is a company limited by shares that is incorporated and domiciled in Australia. Treasury Group Limited has prepared a consolidated financial report incorporating the entities that it controlled and jointly controlled during the financial year. The Group’s corporate structure as at the date of this report is as follows:

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TREASURY GROUP LIMITED
TREASURY GROUP ORION ASSET TREASURY ASIA
�� RARE
�� MANAGEMENT ASSET MANAGEMENT RARE IP TRUST
MUTUAL LIMITED ��
�� (AUST) PTY LTD LIMITED (40%)
(47.5%) (40%)
(100%) (41.9%) (40%)
��
�� CANNAE CAPITAL
(28% TREASURY PARTNERS LTD
GROUP LIMITED (SEE PAGE 18)
��
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TREASURY GROUP LIMITED 17

DIRECTORS’ REPORT (CONT.)

As described in the half year report ended 31 December 2008, during the year the Company has re-evaluated its accounting for investments in the light of changes in the Company’s equity ownership interests in the underlying boutiques due to increased equity participation by employees of the boutiques. The re-evaluation included consideration of the impact of other powers conferred by the underlying shareholder agreements between the Company and other investors in each of the underlying boutiques. During this review it transpired that in making its initial assessments of the classification of these investments the Company had not fully considered the impact of certain of these powers, primarily in respect of the ability of other shareholders to influence financial and operating decision making. As a result of this review the Company has reassessed its accounting for its investments as follows:

	Previous classifcation	Revised classifcation
Investors Mutual Limited �� Treasury Asia Asset Management Ltd Orion Asset Management Ltd RARE Infrastructure Ltd Cannae Capital Partners Ltd	Subsidiary �� Subsidiary Associate Associate Investment at fair value through proft and loss	Jointly controlled entity �� Jointly controlled entity Jointly controlled entity Jointly controlled entity Associate

The comparative consolidated financial information as at 30 June 2008 has been restated accordingly, with restatement of opening retained earnings at 1 July 2007. There has been no impact on net profit after tax attributable to members of the parent or equity attributable to equity holders of the parent.

Nature of operations and principal activities

The principal activities of the consolidated entity during the financial year were:

Provision of funds management services to:

��
��
��
��

There have been no significant changes in the nature of those activities during the year.

Employees

The consolidated entity employed 23 full time equivalent employees as at 30 June 2009 (2008: 25 employees). The consolidated group includes Treasury Group Limited and Treasury Group Investment Services Limited.

��

Funds Management

Investors Mutual Limited (IML) provides a funds management capability to both institutional and retail investors. The consolidated entity holds 47.5% of the issued capital of the Company. Investors Mutual Limited is considered a jointly controlled entity of the Group.

Orion Asset Management Ltd, a wholly-owned controlled entity of Orion Asset Management (Aust) Pty Ltd, provides funds management services to a range of institutions. Orion Asset Management Ltd is considered a jointly controlled entity of the Group.

�� companies that exhibit recurring earnings, and a strong, stable and competitive business. Treasury Group Limited holds 28% of the �� controlled entity of the Group.

Treasury Asia Asset Management Ltd (TAAM) commenced operation on 12 July 2005. Treasury Asia Asset Management Ltd is a boutique asset manager specialising in the Asia Pacific Region. Treasury Asia Asset Management Ltd is considered a jointly controlled entity of the Group.

RARE Infrastructure Ltd (RARE) and RARE IP Trust (RIP) were launched in July 2006 and is a boutique asset manager specialising in listed global infrastructure. RARE is considered as a jointly controlled entity of the Group.

Treasury Group Limited owns a convertible note that entitles it to convert the notes into a 35% holding in Cannae Capital Partners Ltd (Cannae) and an option which entitles Treasury Group Limited to purchase a further 5%. Cannae was launched in July 2007 and is a boutique asset manager specialising in Australian and New Zealand Equities. Cannae is considered an associate of the Group.

18 ANNUAL REPORT 2009

Funds Management, Administration & Compliance Services

Treasury Group Investment Services Ltd, a wholly-owned controlled entity of Treasury Group Limited, is the manager of a listed ��

��

The consolidated net profit attributable to members of Treasury Group Limited amounted to $4,945,543 (2008: $17,244,317). �� Measurement. The standard requires that financial assets be reviewed and tested for impairment if there is evidence of an impairment event. The accounts reflect an impairment charge of $497,123 in relation to the loan issued to Cannae Capital Partners (Cannae). Whilst the Board is fully supportive of Cannae during the difficult stage of early business development, the Board is cognisant of the need to apply accounting standards that may not necessary be reflective of its commercial view. The impairment charge was based on using probability analysis as to the likely future performance of Cannae and comparing those cash flows to the existing loan.

�� would have shown the following consolidated Income Statement:

would have shown the following consolidated Income Statement:
	Year ended	Year ended
	30 June 2009	30 June 2008
	$	$
Continuing operations
Revenues	45,327,156	62,913,506
Other (losses) / income	(5,322,558)	1,816,157
Expenses	(27,546,041)	(30,561,877)
Share in net profts of equity accounted investments	3,164,388	6,409,267
Proft from continuing operations before income tax expense	15,622,945	40,577,053
Income tax expense	(4,106,969)	(10,975,059)
Net proft for the period	11,515,976	29,601,944
Attributable to minority interest	6,570,433	12,357,677
Attributable to the members of the parent	4,945,543	17,244,317

EARNINGS PER SHARE

The earnings for the last financial year reflect the volatile and turbulent global financial markets experienced during the last 12 months.

	2009	2008	2007	2006	2005
Basic earnings per share (cents)	21.4	75.3	80.8	65.4	60.4
Diluted earnings per share (cents)	21.4	75.0	79.4	63.7	58.1

��

CAPITAL STRUCTURE

The Group has a sound capital structure. This is evident from the Company’s positive cash flow position and that no borrowing facilities have been required to date to fund the growth activities of the Group.

In addition, no new capital by way of the exercise of options on ordinary shares was provided (2008: $4,809,907) to the Company.

During the financial year the Company bought back shares on the Australian Securities Exchange and reduced its share capital by $466,055 (2008: $1,555,477).

��

Net cash flow from operating activities decreased by $7.46m to $6.52m or by 53% over the year. This result reflects the volatile and turbulent global financial markets experienced during the past 12 months.

During the year, the Company paid $9.24m in dividends. Consolidated cash balance as at 30 June 2009 is $10.52m.

TREASURY GROUP LIMITED 19

DIRECTORS’ REPORT (CONT.)

RISK MANAGEMENT

The Group takes a proactive approach to risk management. The Board is responsible for ensuring that risks, and also opportunities, are identified on a timely basis and that the Group’s objectives and activities are aligned with the risks and opportunities identified by the Board.

The Group believes that it is crucial for all Board members to be a part of this process, and as such the Board has not established a separate risk management committee. Instead all Board members are involved in the risk management process. The Board has a number of mechanisms in place to ensure that management’s objectives and activities are aligned with the risks identified by the Board. These include the following:

�� budgets and Board monitoring of progress against these budgets, including the monitoring of key performance ��
�� express purpose of examining new asset management opportunities for the Group.

�� There have been no other significant changes in the state of affairs of the Company during the financial year.

�� BALANCE DATE

�� Limited declared a final dividend on ordinary shares in respect of the 2009 financial year. The total amount of the dividend is $2,307,076, which represents a fully franked dividend of 10 cents per share. The dividend has not been provided for in the 30 June 2009 financial statements.
�� shareholders of RARE Infrastructure Limited, Treasury Group Limited provided an unconditional guarantee of RARE’s liabilities to trustees of pension plans governed under the United States of America Employee Retirement Income Security Act 1974 (“ERISA Clients”) to enable RARE to comply with the necessary regulatory requirements to act as investment manager to ERISA Clients. The guarantee terminates if RARE ceases to act as an investment adviser in respect to all ERISA clients or if RARE’s shareholders equity meets or exceeds $USD 1,000,000.

��

In the opinion of the Directors, disclosure of information regarding likely developments in the operations of the Group and the expected results of those operations, other than matters referred to in the Chairman’s address, would prejudice the consolidated entity’s interests. Accordingly no further information is included in this report.

SHARE OPTIONS

UNISSUED SHARES

As at the date of this report, there were 2,715,000 unissued ordinary shares under options (2,715,000 at reporting date) held by employees of the Group and jointly controlled entities.

�� included in Note 21 to the financial report.

�� During the financial year, no options were exercised to acquire fully paid ordinary shares of Treasury Group Limited. No additional options were exercised since the end of the financial year.

��

The Company has entered into an agreement for the purpose of indemnifying Directors and officers of the Company against all losses and liabilities incurred by the Directors or officers on behalf of the Company.

The following liabilities, except for a liability for legal costs, are excluded from the above indemnity:

��
(b) A liability for pecuniary penalty order under section 1317G or a compensation order under section 1317H of the ��
(c) A liability owed to someone other than the Company or a related body corporate and did not arise out of conduct in ��
(d) Any other liability against which the Company is precluded by law from indemnifying the Director.

The insurance contract prohibits the disclosure of the insurance premium for insuring officers of the company against a liability which may be incurred in that person’s capacity as an officer of the Company.

REMUNERATION REPORT (AUDITED)

This report outlines the remuneration arrangements for Directors and Executives of Treasury Group Limited in accordance with the requirements of the Corporations Act 2001 and its Regulations. It also provides the remuneration disclosures required by paragraphs Aus 25.4 to Aus 25.7.2 of AASB 124 Related Party Disclosures , which have been transferred to the Remuneration Report in accordance with �� report Key Management Personnel (KMP) of the Group are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, directly or indirectly, including any Director (whether executive or otherwise) of the parent company, and includes the five executives in the Parent and the Group receiving the highest remuneration.

�� encompasses the Managing Director and senior executives of the Parent and the Group.

REMUNERATION PHILOSOPHY

The performance of the Company depends upon the quality of its Directors and Executives. To prosper, the Company must attract, motivate and retain highly skilled Directors and Executives.

To this end, the Company embodies the following principles in its remuneration framework:

20 ANNUAL REPORT 2009

��
��
�� dependent upon meeting pre-determined performance benchmarks.

REMUNERATION COMMITTEE

The Remuneration Committee of the Board of Directors of the Company is responsible for determining and reviewing compensation arrangements for the Directors, the Managing Director and the Executive Team. The Remuneration Committee assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality board and executive team.

REMUNERATION STRUCTURE

In accordance with best practice corporate governance, the structure of Non-Executive Director and Executive remuneration is separate and distinct.

Structure

Remuneration consists of the following key elements:

��
��
��
Long Term Incentive (LTI)

The proportion of fixed remuneration and variable remuneration is established by the Remuneration Committee.

��

Objective

The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to the position and is competitive in the market.

�� Committee and the process consists of a review of performance, relevant comparative remuneration in the market and advice on policies and practices.

��

Objective

��

Objective

The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract and retain Directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.

Structure

�� remuneration of Non-Executive Directors is determined from time to time by a general meeting. An amount not exceeding the amount determined is then divided between the Directors as agreed. The latest determination was at the Annual General Meeting held on 15 November 2006 when shareholders approved an aggregate remuneration of $650,000 per year for services of Directors as directors of the Company and its subsidiaries.

The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned amongst Directors is reviewed annually. Non-Executive Directors do not receive performance based bonuses from Treasury Group Limited.

��

Objective

The Company aims to reward executives with a level and mix of remuneration commensurate with their position and responsibilities within the company and so as to:

�� individual performance targets set by reference to ��
��
��
��

The objective of the STI plan is to link the achievement of the Company’s operational targets with the remuneration received by the Executives charged with meeting those targets. The STI is fully discretionary in the hands of the Remuneration Committee. The Remuneration Committee receives a recommendation from the Managing Director on executive performance. The Managing Director bases his report on a number of tailored KPIs for each Executive. The total potential STI available is set at a level so as to provide sufficient incentive to the Executive to achieve the operational targets such that the cost to the Company is reasonable.

Structure

Actual STI payments granted to each Executive depend on the achievement of annual corporate profitability measures and each Executive exceeding expectations on their KPIs. Secondary consideration is given to their general value add to the business.

The aggregate of annual STI payments available for Executives across the Company is subject to the approval of the Remuneration Committee. Payments are usually delivered as a cash and equity bonus.

��

Objective

The objective of the LTI plan is to reward Executives in a manner which aligns this element of remuneration with the creation of shareholder wealth.

Structure

LTI grants are delivered in the form of options and / or shares. The Company uses the share price as the performance hurdle for the long term incentive plan to ensure alignment between shareholder return and reward for Executives.

Details of the nature and amount of each element of the remuneration of each Director of the Company and each of the Key Management Personnel of the Company and the consolidated entity for the financial year are as follows:

TREASURY GROUP LIMITED 21

DIRECTORS’ REPORT (CONT.)

	Short term	Short term	Post employment	Share based payments	Share based payments	Other	Total	Performance related
	Salary & fees	Cash bonus	Super- annuation	Shares	Options	Termination benefts
	$	$	$	$	$	$	$
Directors �� 2009 2008	97,248 97,248	— —	8,752 8,752	— —	— —	— —	106,000 106,000	— —
D. Cooper — Executive Director2009 2008	436,255 486,871	— 300,000	13,744 13,129	— —	420,575 425,697	— —	870,574 1,225,697	48% 59%
R. Green — Non-Executive 2009 Director (resigned 2008 12 November 2008)	22,046 60,550	— —	1,984 5,450	— —	— —	— —	24,030 66,000	— —
P. Kennedy — 2009 Non-Executive Director 2008	91,000 91,000	— —	— —	— —	— —	— —	91,000 91,000	— —
R. Hayes — Non-Executive 2009 Director (appointed 2008 ��	64,220 64,220	— —	5,780 5,780	— —	— —	— —	70,000 70,000	— —
M. Burgess — Managing Director2009 (appointed 17 December 2008)	381,316	—	10,309	—	52,569	—	444,194	12%
Executives ��2009 �� ��	297,265 ��	— ��	13,744 ��	— ��	59,626 ��	— �	370,635 ��	16% ��
E. Jurgeleit Treasury Group Ltd2008 Group — Manager — Risk and New Developments (Resigned ��	157,916	—	8,834	—	—	—	166,750	—
�� 2009 Investment Services Ltd — 2008 Managing Director	286,256 275,204	— 161,467	13,744 13,129	— 83,525	31,927 62,120	— —	331,927 595,445	10% 52%
R. Sullivan Treasury Group Ltd —2009 Head of Distribution 2008	286,254 213,954	560,384 297,517	13,744 13,129	— 17,907	120,299 84,316	— —	980,681 626,823	69% 64%
Total remuneration: 2009 Key Management and 2008 Highest Paid Personnel	1,961,860 1,716,335	560,384 858,650	81,801 81,332	— 144,146	684,996 677,599	— —	3,289,041 3,478,062	38% 44%

Remuneration options: Granted and vested during the year

Remuneration options: Granted and vested during the year	Remuneration options: Granted and vested during the year	Remuneration options: Granted and vested during the year	Remuneration options: Granted and vested during the year
				Terms and Conditions for Each Grant
2009	Vested number	Granted number	Grant date	Value per option at grant date*	Exercise price per option	First exercise date	Last exercise date
Directors M. Burgess M. Burgess	— —	600,000 400,000	16/12/2008 16/12/2008	$0.45 $0.33	10.00 10.00	16/12/2013 16/12/2011	16/12/2014 16/12/2012
Total	—	1,000,000

During the year ended 30 June 2009 options were granted as equity compensation benefits to certain key management personnel as disclosed above. No options were issued to the non-executive members of the Board of Directors under this scheme. The options were issued free of charge. Each option entitles the holder to subscribe for one fully paid ordinary share in the entity at various exercise prices.

22 ANNUAL REPORT 2009

The fair value of options granted is estimated on the day of grant using a Binomial option-pricing model with the following �� a dividend consistent with the current policy of the Company and other variables as contained in the Notes to the financial report.

During 2009 410,000 options lapsed held by certain key management personnel (2008: 90,000).

All options have a vesting condition of continuous service between grant date and first exercise date.

				Terms and Conditions for Each Grant	Terms and Conditions for Each Grant	Terms and Conditions for Each Grant	Terms and Conditions for Each Grant
2008	Vested number	Granted number	Grant date	Value per option at grant date	Exercise price per option	First exercise date	Last exercise date
Directors D. Cooper	—	500,000	14/11/2007	$1.94	$20.00	01/07/2010	31/12/2010
Executives R. Sullivan R. Sullivan �� ��	— — � �	150,000 125,000 �� ��	13/07/2007 12/03/2008 �� ��	$1.43 $1.15 �� ��	$20.00 $12.07 �� ��	01/07/2010 12/03/2011 �� ��	31/12/2010 12/09/2011 �� ��
Total	—	925,000

During the year ended 30 June 2008 options were granted as equity compensation benefits to certain key management personnel as disclosed above. No options were issued to the non-executive members of the Board of Directors under this scheme. The options were issued free of charge. Each option entitles the holder to subscribe for one fully paid ordinary share in the entity at various exercise prices.

All options have a vesting condition of continuous service between grant date and first exercise date.

Options granted as part of remuneration

2009	Value of options granted during the year $	Value of options exercised during the year $	Value of options forfeited during the year $	Total value of options granted exercised and lapsed during the year $	Remuneration consisting of options for the year %
M. Burgess D. Cooper R. Sullivan �� ��	402,000 — — � �	— — — � �	— (372,500) — �� ��	402,000 (372,500) — �� ��	12% 48% — �� ��
2008	Value of options granted during the year $	Value of options exercised during the year $	Value of options forfeited during the year $	Total value of options granted exercised and lapsed during the year $	Remuneration consisting of options for the year %
D. Cooper R. Sullivan �� �� E Jurgeleit	970,000 358,723 �� �� —	— — � � —	— — � � (182,555)	970,000 358,723 �� �� (182,555)	35% 13% �� �� —

There were no alterations to the terms and conditions of options granted as remuneration since their grant date.

The maximum grant, which will be expensed assuming that all service criteria are met, is equal to the number of options granted multiplied ��

TREASURY GROUP LIMITED 23

DIRECTORS’ REPORT (CONT.)

(d) Shares issued on exercise of remuneration options (Consolidated)

During the current financial year ended 30 June 2009 and the prior financial year ended 30 June 2008 the Company did not issue any shares to Key Management Personnel on exercise of remuneration options.

The Company uses the fair value measurement provisions of AASB 124 “Related Party Disclosures” and the AASB 2 “Share-based Payment” prospectively for all options granted to Directors and relevant Executives which had not vested as at 1 July 2004. The fair value of such grants is being amortised and disclosed as part of Director and Executive emoluments on a straight-line basis over the vesting period.

�� Executive emoluments have been valued using a Binomial option pricing model, which takes account of factors including the option exercise price, the current level and volatility of the underlying share price, the risk-free interest rate, expected dividends on the underlying share, current market price of the underlying share �� the issuance and value of options are contained in Note 21 to the financial report.

(e) Shares granted as part of a deferred share plan (Consolidated) 2009

During the financial year ended 30 June 2009 the Company issued no deferred shares during the year.

2008

During the financial year ended 30 June 2008 the Company issued 16,122 deferred shares to Rob Sullivan and 12,898 �� Australian Securities Exchange and will vest on 12 March 2011.

EMPLOYMENT CONTRACTS

The Managing Director, Mark Burgess, is employed under contract. His employment contract commenced on 29 September 2008 with an original base salary package of $550,000 (gross, including superannuation) and has no predetermined termination date. Under the terms of the present contract, a base salary of $450,000 (gross, including superannuation) is being paid.

As long term incentive, Mr Burgess was awarded 1,000,000 $10 options on 17 December 2008.

Mr Burgess is also eligible for a bonus based on a number of clearly defined KPI’s. Any bonus payment is at the sole discretion of the Remuneration Committee.

Additional terms in the contract include:

�� without notice if serious misconduct has occurred. Where termination with cause occurs Mr Burgess is only entitled to that portion of remuneration which is fixed, and only up to the date of termination. On termination with cause any unvested options will immediately be forfeited.
�� if Mr Burgess becomes incapacitated by accident or an illness such that he is unable to perform his duties for

90 consecutive days or for an aggregate period of 90 days in any period of 12 months.

Where employment is terminated no further payments will be paid by the company except unpaid salary accrued to the date of termination and accrued annual leave.

Where the employment is terminated due to a decision by the Company to make the position redundant, the Company will pay Mr Burgess an amount the equivalent to 1 year’s salary, which includes any payment to which Mr Burgess is entitled in relation to a notice period.

The Executive Director, Mr Cooper, is employed under contract. The current employment contract commenced on 1 January 2009 and has no predetermined termination date. Under the terms of the present contract, a base salary of $400,000 (gross including superannuation) is being paid.

As long term incentive, Mr Cooper was awarded 500,000 $20 options on 14 November 2007.

Mr Cooper is also eligible for a bonus based on a number of clearly defined KPI’s. Any bonus payment is at the sole discretion of the Remuneration Committee.

Additional terms in the contract include:

�� without notice if serious misconduct has occurred. Where termination with cause occurs Mr Cooper is only entitled to that portion of remuneration which is fixed, and only up to the date of termination. On termination with cause any unvested options will immediately be forfeited.
�� if Mr Cooper becomes incapacitated by accident or an illness such that he is unable to perform his duties for 90 consecutive days or for an aggregate period of 90 days in any period of 12 months.

Where employment is terminated no further payments will be paid by the company except unpaid salary accrued to the date of termination and accrued annual leave.

Where the employment is terminated due to a decision by the Company to make the position redundant, the Company will pay Mr Cooper an amount the equivalent to 1 year’s salary, which includes any payment to which the Employee is entitled in relation to a notice period.

�� under contract. The current employment contract has no predetermined termination date. Under the terms of the ��

The Managing Director of Treasury Group Investment Services �� has no predetermined termination date. Under the terms of the ��

The Head of Distribution, Mr Sullivan is employed under a contract with no predetermined termination date. Under the terms of the contract Mr Sullivan may terminate the contract by giving three months written notice with no termination benefits.

24 ANNUAL REPORT 2009

DIRECTORS’ MEETINGS

The number of meetings of Directors (including meetings of Committees of Directors) held during the year and the number of meetings attended by each Director were as follows:

	Directors Meetings	Directors Meetings	Audit Committee Meetings	Audit Committee Meetings	Remuneration Committee Meetings	Remuneration Committee Meetings	Nomination Committee Meetings	Nomination Committee Meetings
	Meetings eligible to attend	Meetings Attended	Meetings eligible to attend	Meetings Attended	Meetings eligible to attend	Meetings Attended	Meetings eligible to attend	Meetings Attended
M. Burgess* D. Cooper �� R. Green^ P. Kennedy R. Hayes	6 10 �� 4 10 10	6 9 �� 3 10 10	— — � — 6 6	— — � — 6 5	1 — � — 1 1	1 — � — 1 1	— — � — — —	— — � — — —

^ Resigned during the year
Appointed during the year

COMMITTEE MEMBERSHIP

As at the date of this report, the Company had an Audit Committee, a Remuneration Committee and a Nomination Committee of the Board of Directors.

Members acting on the Committees of the Board during the year were:

Audit	Remuneration	Nomination
P. Kennedy (Chairman) �� R. Hayes	P. Kennedy (Chairman) �� M. Burgess R. Hayes	R. Hayes (Chairman) ��

��

Effective 1 July 2003, for the purposes of income taxation, Treasury Group Limited and its 100% owned controlled entities have formed a tax consolidated group.

��

In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of Treasury Group Limited support the Principles of Corporate Governance. The Company’s Corporate Governance Statement is contained in the following section of this annual report.

��

The Group’s operations are not presently subject to significant environmental regulation under the law of the Commonwealth and State.

��

The Directors are satisfied that the provision of non-audit services, during the year, by the auditor is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.

��

The Directors received the independence declaration from the auditors of Treasury Group Limited. A copy of the declaration is set out on page 26.

Signed in accordance with a resolution of the Directors.

==> picture [113 x 34] intentionally omitted <==

M Fitzpatrick Chairman Sydney, 26 August 2009

TREASURY GROUP LIMITED 25

AUDITOR’S INDEPENDENCE DECLARATION

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Deloitte Touche Tohmatsu A.B.N. 74 490 121 060 Grosvenor Place 225 George Street Sydney NSW 2000 PO Box N250 Grosvenor Place Sydney NSW 1217 Australia

DX 10307SSE Tel: +61 (0) 2 9322 7000 Fax: +61 (0) 2 9322 7001 www.deloitte.com.au

The Board of Directors Treasury Group Limited Level 5, 50 Margaret Street Sydney NSW 2000

26 August 2009

Dear Board Members

Treasury Group Limited

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Treasury Group Limited.

As lead audit partner for the audit of the financial statements of Treasury Group Limited for the financial year ended 30 June 2009, I declare that to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

(ii) any applicable code of professional conduct in relation to the audit.

Yours sincerely

==> picture [150 x 31] intentionally omitted <==

DELOITTE TOUCHE TOHMATSU

==> picture [78 x 30] intentionally omitted <==

A H Young Partner Chartered Accountants

==> picture [82 x 19] intentionally omitted <==

Liability limited by a scheme approved under Professional Standards Legislation.

26 ANNUAL REPORT 2009

��

�� on what it considers to be best practice in conducting the �� companies to disclose their compliance with the guidelines on an “if not, why not” basis in their annual report to shareholders. The Guidelines are set out recommended practice in the form of eight principles

Lay solid foundations for management and oversight
Structure the Board to add value
Promote Ethical and Responsible Decision Making
Safeguard integrity in financial reporting
Make Timely and Balanced Disclosure
Respect the Rights of Shareholders
Recognise and Manage Risk
Remunerate fairly and responsibly

Treasury Group Limited’s (the Company) adherence to each of these principles, together with details of the policies adopted by the Board to ensure compliance is described on a principle by principle basis below.

�� copies of its governance policies, charters and procedures on its website www.treasurygroup.com

Principle 1: Lay solid foundations for management and oversight

The Board’s role is to govern the Company rather than to manage it. The Board recognises the importance of clearly delineating between its roles and the roles of management, and has adopted a formal statement of matters reserved to itself and a list of delegations to management. It is the responsibility of the Board to oversee the activities of management in carrying out these delegated duties.

In carrying out its governance role, the main task of the Board is to drive the performance of the Company. The Board must also ensure that the Company complies with all of its contractual, statutory and any other legal obligations, including the requirements of any regulatory body. The Board is accountable to shareholders for the successful operations of the Company.

�� in the Board Charter, a copy of which is contained in the Corporate Governance section on the Company’s website.

Role of senior executives

It is the role of senior executives to manage the Company in accordance with the direction and delegations of the Board and the responsibility of the Board to oversee the activities of senior executives in carrying out these delegated duties. The Board conducts an annual review of the performance of senior executives against pre-determined qualitative and quantitative key performance indicators. Senior executives undergo an induction programme to gain an understanding of the Company’s financial position, its strategies, operations and risk management policies as well as the rights, duties, responsibilities and roles of the Board and senior executives.

Principle 2: Structure the Board to add value

The Board considers independent decision-making as critical to effective governance, and the Company recognises the importance of independent directors and the external perspective and advice that they can offer. The names of the

Directors and their qualifications and experience are included in the profiles in the Directors Report, along with the term of office held by each of the Directors.

The Company does not have a majority of independent directors ��

Mr Kennedy and Mr Hayes are Non-Executive Directors, and ��

�� the Company, but is a major shareholder of the Company �� independence. However, his experience and knowledge of the Company make his contribution to the Board such that it is appropriate for him to remain as Chairman of the Board.

The Company’s CEO is Mr Mark Burgess. The Company’s Chairman and CEO have separate roles. The division of responsibilities between the Chairman and the CEO are set out in the Board charter.

All directors bring an independent judgment to bear in Board deliberations.

The Board established a Nomination Committee in 2004, to help achieve a structured Board that adds value to the Company by ensuring an appropriate mix of skills are present in Directors on the Board at all times.

�� the Company believes that the present Committee structure is adequate to perform its duties. The members of the Nomination ��

The Nomination Committee’s charter and a description of the process for selection and appointment of new directors are available on the Company’s website.

The Board Charter provides for the undertaking of annual Board and Committee performance evaluation. The Board’s performance is measured against both qualitative and quantitative indicators. The objective of this evaluation is to provide best practice Corporate Governance to the Company.

The Nomination Committee oversees management succession plans including the CEO and his direct reports and evaluates the Board, Committee and Executive’s performance and makes recommendations for the appointment and removal of Directors.

In order to achieve continuing improvement in Board performance, all Directors are encouraged to undergo continual professional development. Specifically, Directors are provided with the resources and training to address skills gaps where they are identified.

In order to provide a specific opportunity for performance matters to be discussed with each Director, each year the Board Chairman conducts a formal Director review process. Self and peer evaluations are completed and the Chairman meets with each Director individually to discuss issues including performance and discusses with the Board as a whole the effectiveness of the Board and its Committees. Given the nature of the Company’s activities, the Board believes that there is sufficient formality in the process of evaluation of the Board, individual Directors and the Chairman.

New directors undergo an induction process in which they are given a full briefing on the Company. Where possible, this

TREASURY GROUP LIMITED 27

��

includes meetings with key executives, tours of the premises, an induction package and presentations. Information conveyed to new directors includes:

��
��
��
��
��
��
��
��
�� Company including a copy of the current strategic plan ��
��

Each director has the right of access to all Company information and to Company’s executives. The Board collectively and each Director, subject to informing the Chairman, has the right to seek independent professional advice from a suitably qualified advisor, at the Company’s expense, up to specified limits, to assist them to carry out their responsibilities. Where appropriate, a copy of this advice is to be made available to all other members of the Board.

Principle 3: Promote ethical and responsible decision-making

To ensure that the Company maintains the highest standards of integrity, honesty and fairness in its dealings with all stakeholders, the Board has established a formal Code of Conduct for management and employees and also a Code of Ethical Conduct for the Board. These Codes act as a guide for compliance with legal and other obligations that the Company has to stakeholders which include customers, clients, government authorities, creditors, employees and the community as whole. These Codes govern all the Company’s commercial operations and the conduct of the Board, employees, consultants, contractors, advisors and all other people when they represent the Company.

These Codes also outline the responsibility and accountability of individuals for reporting and investigating unethical practices and can be viewed in the Corporate Governance section on the Company’s website.

The Company has a Securities Trading and Insider Trading Policy under which Directors and employees and their associates may only trade in the Company’s securities during specific period trading windows. This policy can be viewed in the Corporate Governance section of the Company’s website.

Principle 4: Safeguard integrity in financial reporting

The Board established an Audit Committee in 2004. The Audit Committee has a formal charter, which can be found in the Corporate Governance section of the Company’s website.

The Audit Committee comprises of three non-executive directors, two of whom are independent, and the Committee is also chaired by an independent director. During the year under review, the members of the Audit Committee were Mr Kennedy ��

is not independent, the Company believes that the Committee structure is adequate to perform its duties independently. All members can critically evaluate financial statements and are otherwise financially literate. Mr Kennedy, the Chairman, has a commerce background with experience in financial and accounting matters. Details of members’ qualifications may be found in the director profiles in the Directors’ Report.

The Audit Committee held six meetings for the year and details of attendance of the members of the Audit Committee are contained in the Directors’ Report.

Information on procedures for the selection and appointment of the external auditor and for the rotation of external audit engagement partners may be found in the Corporate Governance section of the Company’s website.

Principle 5: Make timely and balanced disclosure

The Board has established a Continuous Disclosure Policy �� requirements. This policy is located in the Corporate Governance section of the Company’s website.

The Board has designated the Company Secretary as the person responsible for overseeing and coordinating disclosure ��

�� expect to have a material effect on the price or value of ��
�� commonly invest in securities in deciding whether to acquire or dispose of the Company’s securities.

�� all information disclosed in accordance with this policy on the Company’s website in an area accessible by the public.

To enhance clarity and balance of reporting and to enable investors to make an informed assessment of the Company’s performance, financial results are accompanied by a commentary.

Details of payments to executives for the 2008/09 financial year are disclosed in the Directors’ Report. Core entitlements of any new executives will be disclosed at the time when they are agreed as well as at the time the actual payment is made.

Principle 6: Respect the rights of shareholders

The Company respects the rights of its shareholders and to facilitate the effective exercise of those rights the Company is committed to:

�� information mailed to shareholders and the general ��
�� understandable information about the Company and ��
��
�� meeting and be available to answer shareholder questions about the conduct of the audit and the preparation and content of the auditor’s report.

28 ANNUAL REPORT 2009

The Shareholder Communications Policy is published on the Company’s website in its Corporate Governance section.

Principle 7: Recognise and manage risk

The Board’s Charter clearly establishes that it is responsible for ensuring that there is a sound system for overseeing and managing risk. The Audit Committee is also responsible for establishing policies on risk oversight and management. A summary of the Company’s Risk Management and internal compliance and control system is available on the Company’s website in its Corporate Governance section.

�� separate internal audit function or Risk Management Committee. This internal audit is independent of the external auditor.

�� writing to the Board:

“That

�� the Corporations Act is founded on a sound system of risk management and internal compliance and control which ��
�� and control system is operating efficiently and effectively in all material respects in relation to financial reporting risks.”

The Company’s Risk and Compliance Services team has designed and implemented a risk management and internal control system to manage Treasury Group’s material business risks. Risk is managed on an enterprise wide basis, with risks being reviewed across the whole group of companies, as well as risks arising from key stakeholder relationships and external events.

Management provides monthly board reports on the effectiveness of managing the Company’s business risks.

Principle 8: Remunerate fairly and responsibly

The Board has established a Remuneration Committee to assist the Board in making appropriate decisions about incentive schemes and superannuation arrangements. The role of the Remuneration Committee is to assist the Board in fulfilling its responsibilities in respect of establishing appropriate remuneration levels and incentive policies for employees.

�� members of the Remuneration Committee. Mr Kennedy, the Chairman of the Remuneration Committee is an Independent Director. The Remuneration Committee held one meeting throughout the year and details of attendance of the members of the Committee are contained in the Directors’ Report. The Remuneration Committee has a formal charter which is available on the website of the Company in the Corporate Governance Section.

The Board have endorsed the following Senior Executive Remuneration Policy and the Non-Executive Director Remuneration Policy.

Remuneration Policy the remuneration of senior executive may be comprised of the following:

��
�� by the individual of performance objectives and for materially ��
��
��

By remunerating Senior Executives through performance and long-term incentive plans in addition to their fixed remuneration, the Company aims to align the interests of senior executives with those of shareholders and enhance Company performance. The amount of remuneration, including both monetary and non-monetary components, for each of the Key Management Personnel during the year (discounting accumulated entitlements) is detailed in the Directors’ Report.

The value of shares and options granted to Senior Executives has been calculated using the Binomial method.

The objective behind using this remuneration structure is to drive improved Company performance and thereby increase shareholder value as well as aligning the interests of executives and shareholders.

The Board may use its discretion with respect to the payment of bonuses, stock options and other incentive payments. This discretion is exercised on the following basis:

��
��
�� the rewards of the success of the Company.

The Company has a Share Purchase Plan and an Officer and Employee Option Plan that have been approved by shareholders in which executives may participate. The number of shares and options issued under the plans is reasonable in relation to the existing capitalisation of the Company and all payments under the plans are made in accordance with thresholds set in plans approved by shareholders.

Non-Executive Director Remuneration Policy Non-Executive Directors are paid their fees out of the maximum aggregate amount approved by shareholders for the remuneration of Non-Executive Directors. Non-Executive Directors do not receive performance based bonuses and do not participate in the option scheme of the Company. Non-Executive Directors are entitled to statutory superannuation.

The payment to Directors is based on a workload criterion. Consequently, all Non-Executive Directors, except the Chairman receive a fixed amount plus a load for Committee Membership and Committee chairing. The Chairman receives an extra loading given the duties and extra time associated with the position.

Current Director Remuneration

Senior Executive Remuneration Policy

The Company is committed to remunerating its senior executives in a manner that is market-competitive and consistent with best practice as well as supporting the interests of shareholders. Consequently, under the Senior Executive

The aggregate amount of remuneration paid to Non-Executive Directors is approved by shareholders and is currently $650,000.

�� can be found in the Directors’ Report.

TREASURY GROUP LIMITED 29

INCOME STATEMENT ��

		Consolidated	Consolidated	Treasury Group Limited	Treasury Group Limited
			2008
		2009	Restated	2009	2008
	Notes	$	$	$	$
Revenues	5 (a)	5,986,084	6,983,152	7,443,561	23,423,412
Gains / (losses) on investments	5 (b)	(1,817,651)	162,707	(1,522,284)	980,295
Salaries and employee benefts expenses	5 (c)	(5,727,259)	(5,437,335)	(3,357,794)	(3,206,013)
��		��	��	�	�
Other expenses	5 (c)	(3,331,313)	(3,026,805)	(1,813,125)	(1,994,456)
Share of net profts of equity accounted investments	13 (c) (iv)	9,103,298	19,404,129	—	—
Proft before income tax expense		3,285,081	16,706,489	750,358	19,203,238
Income tax beneft	6 (c)	1,667,970	343,829	1,380,119	289,529
Net proft for the year		4,953,051	17,050,318	2,130,477	19,492,767
Attributable to:
Minority interest	19 (g)	7,508	(193,999)	—	—
Members of the parent	19 (e)	4,945,543	17,244,317	2,130,477	19,492,767
Earnings per share (cents per share)
��
equity holders of the parent	23	21.43	75.29
��
equity holders of the parent	23	21.43	75.02
Franked dividends paid or proposed per share
(cents per share) for the fnancial year	7	20.00	60.00

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

30 ANNUAL REPORT 2009

BALANCE SHEET AS AT 30 JUNE 2009

		Consolidated	Consolidated	Treasury Group Limited	Treasury Group Limited
			2008
		2009	Restated	2009	2008
	Notes	$	$	$	$
Current assets
Cash and cash equivalents	8 (a)	10,515,123	10,301,071	7,637,530	5,555,422
Trade and other receivables	9	5,186,227	12,608,068	1,790,252	7,816,158
Other assets		285,760	197,815	134,548	115,146
Total current assets		15,987,110	23,106,954	9,562,330	13,486,726
Non-current assets
Trade and other receivables	9 (c)	254,429	189,240	239,229	174,040
Available-for-sale investments	10	4,380,241	—	4,615,821	9,518,282
Investments at fair value through proft and loss	11	2,036,033	12,150,595	128,640	340,000
Loans and other receivables	12	7,617,143	6,567,050	7,617,143	6,567,050
Deferred tax assets	6 (d)	2,676,529	1,163,788	2,399,313	1,248,940
Investments accounted for under the equity method	13	21,029,777	18,238,826	—	—
Plant and equipment	14	137,922	172,350	49,878	69,040
Intangibles	15	18,389	12,469	2,735	4,558
Other fnancial assets	16	—	—	17,427,221	17,431,978
Other assets		64,466	161,164	35,813	89,536
Total non-current assets		38,214,929	38,655,482	32,515,793	35,443,424
Total assets		54,202,039	61,762,436	42,078,123	48,930,150
Current liabilities
Trade and other payables	17	3,172,104	3,540,510	262,730	765,587
Provisions	18	274,191	184,940	164,568	112,720
Total current liabilities		3,446,295	3,725,450	427,298	878,307
Non-current liabilities
Provisions	18	52,154	56,250	52,154	56,250
Deferred tax liabilities	6 (d)	607,602	698,530	605,941	685,301
Total non-current liabilities		659,756	754,780	658,095	741,551
Total liabilities		4,106,051	4,480,230	1,085,393	1,619,858
Net assets		50,095,988	57,282,206	40,992,730	47,310,292
Equity
Equity attributable to equity holders of the parent
Contributed equity	19 (a)	29,594,265	30,060,320	29,594,265	30,060,320
Reserves	19 (f)	3,440,809	2,634,340	3,465,804	2,210,882
Retained profts	19 (e)	16,868,015	21,084,394	7,932,661	15,039,090
Parent interests		49,903,089	53,779,054	40,992,730	47,310,292
Minority interests	19 (g)	192,899	3,503,152	—	—
Total equity		50,095,988	57,282,206	40,992,730	47,310,292

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

TREASURY GROUP LIMITED 31

��

	Consolidated	Consolidated	Consolidated	Consolidated	Consolidated	Consolidated	Consolidated
	Ordinary shares	Share options	Net unrealised gains	Foreign exchange Reserve	Retained earnings	Minority interest	Total
	$	$	$	$	$	$	$
Restated at 1 July 2008	30,060,320	2,605,784	—	28,556	21,084,394	3,503,152	57,282,206
Net gains on revaluation available-for-sale investments	—	—	150,029	—	—	—	150,029
Total income and expense for the period recognised directly in equity	—	—	150,029	—	—	—	150,029
Proft for the period	—	—	—	—	4,945,543	7,508	4,953,051
Total income and expense for the period Shares bought back Share-based payments Deconsolidation of entities no longer controlled Minority interest relating to acquisitions Dividends paid	— (466,055) — — — —	— — 684,996 — — —	150,029 — — — — —	— — — (28,556) — —	4,945,543 — — 74,984 — (9,236,906)	7,508 — — (3,502,952) 185,191 —	5,103,080 (466,055) 684,996 (3,456,724) 185,391 (9,236,906)
At 30 June 2009	29,594,265	3,290,780	150,029	—	16,868,015	192,899	50,095,988

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

	Consolidated	Consolidated	Consolidated	Consolidated	Consolidated	Consolidated	Consolidated
	Ordinary shares	Share options	Net unrealised gains	Foreign exchange Reserve	Retained earnings	Minority interest	Total
	$	$	$	$	$	$	$
Previously reported at 1 July 2007	26,805,890	2,222,914	1,260,079	—	18,686,710	5,478,007	54,453,600
Effect of Restatement per Note 2 (a)	—	(194,406)	(1,260,079)	—	111,151	(5,478,007)	(6,821,341)
Restated as at 1 July 2007	26,805,890	2,028,508	—	—	18,797,861	—	47,632,259
Total income and expense for the period recognised directly in equity
Proft for the period	—	—	—	—	17,244,317	(193,999)	17,050,318
Total income and expense for the period Shares issued Shares bought back Share-based payments �� Minority interest relating to acquisitions Dividends paid	— 4,809,907 (1,555,477) — � — —	— — — 577,276 � — —	— — — — � — —	— — — — �� — —	17,244,317 — — — � — (14,957,784)	(193,999) — — — � 3,697,151 —	17,050,318 4,809,907 (1,555,477) 577,276 �� 3,697,151 (14,957,784)
At 30 June 2008	30,060,320	2,605,784	—	28,556	21,084,394	3,503,152	57,282,206

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

32 ANNUAL REPORT 2009

��

	Treasury Group Limited	Treasury Group Limited	Treasury Group Limited	Treasury Group Limited	Treasury Group Limited
	Ordinary shares	Share options	Retained earnings	Unrealised gains/losses	Total
	$	$	$	$	$
At 1 July 2008	30,060,320	2,605,784	15,039,090	(394,902)	47,310,292
Net gains on revaluation of available-for-sale investments	—	—	—	175,024	175,024
Transfer to income statement on disposal of investments Transfer to income statement on impairment of available for sale investments Total income and expense for the period recognised directly in equity	— — —	— — —	— — —	305,707 89,195 569,926	305,707 89,195 569,926
Proft for the period	—	—	2,130,477	—	2,130,477
Total income and expense for the period Shares bought back Share-based payments Dividends paid	— (466,055) — —	— — 684,996 —	2,130,477 — — (9,236,906)	— — — —	2,130,477 (466,055) 684,996 (9,236,906)
At 30 June 2009	29,594,265	3,290,780	7,932,661	175,024	40,992,730

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

	Treasury Group Limited	Treasury Group Limited	Treasury Group Limited	Treasury Group Limited	Treasury Group Limited
	Ordinary shares	Share options	Retained earnings	Unrealised losses	Total
	$	$	$	$	$
At 1 July 2007	26,805,890	2,028,508	10,504,107	—	39,338,505
Net losses on revaluation of available-for-sale investments Total income and expense for the period recognised directly in equity	— —	— —	— —	(394,902) (394,902)	(394,902) (394,902)
Proft for the period	—	—	19,492,767	—	19,492,767
Total income and expense for the period Shares issued Shares bought back Share-based payments Dividends paid	— 4,809,907 (1,555,477) — —	— — — 577,276 —	19,492,767 — — — (14,957,784)	— — — — —	19,492,767 4,809,907 (1,555,477) 577,276 (14,957,784)
At 30 June 2008	30,060,320	2,605,784	15,039,090	(394,902)	47,310,292

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

TREASURY GROUP LIMITED 33

��

		CONSOLIDATED	CONSOLIDATED	TREASURY GROUP LIMITED	TREASURY GROUP LIMITED
			2008
		2009	Restated	2009	2008
	Notes	$	$	$	$
Cash fows from operating activities
Receipts from customers (inclusive of GST)		4,393,660	7,578,661	641,356	390,190
Payments to suppliers and employees (inclusive of GST)		(9,916,323)	(12,270,704)	(5,239,468)	(3,948,085)
Dividends and distributions received		10,676,987	17,499,883	10,676,987	18,495,378
Interest received		1,361,672	1,168,563	1,261,012	809,200
Net cash fows from operating activities	8(b)	6,515,996	13,976,403	7,339,887	15,746,683
Cash fows from investing activities
Purchase of plant and equipment		(48,085)	(42,175)	(3,029)	(5,318)
Purchase of intangible assets		(14,067)	(10,960)	—	(2,100)
Proceeds from disposal of plant and equipment		4,500	—	4,500	—
Purchase of investments at fair value through proft and loss		(417,363)	(12,311,691)	—	—
Purchase of available-for-sale investments		—	—	(200,000)	(10,199,717)
Proceeds from disposal of investment at fair value
through proft and loss		291,572	—	—	—
Proceeds from disposal of available-for-sale investments		4,581,886	—	4,581,866	—
Proceeds from disposal of jointly controlled entities		500	—	500	—
Proceeds from disposal of subsidiaries		1,000,000	1,086,706	1,000,000	1,086,706
Advance to jointly controlled entities		(120,000)	(901,671)	(120,000)	(901,671)
Advance to associates		(943,000)	(1,130,000)	(943,000)	(1,130,000)
Repayment of loans made		158,345	1,565,087	158,345	1,565,087
Net cash fows from / (used in) investing activities		4,494,288	(11,744,704)	4,445,182	(9,587,013)
Cash fows from fnancing activities
Proceeds from issue of equity instruments		185,191	7,058,801	—	4,872,647
Payment for equity bought back		(466,055)	(1,811,622)	(466,055)	(1,555,477)
Equity dividends paid on ordinary shares		(9,236,906)	(14,957,784)	(9,236,906)	(14,957,784)
Net cash fows (used in) fnancing activities		(9,517,770)	(9,710,605)	(9,702,961)	(11,640,614)
��		—	20,584	—	—
Net increase / (decrease) in cash and cash equivalents		1,492,514	(7,458,322)	2,082,108	(5,480,944)
Cash and cash equivalents at beginning of year		10,301,071	17,645,669	5,555,422	11,036,366
Cash and cash equivalents relating to entities joining the
Group during the year		—	113,724	—	—
Cash held by deconsolidated entities		(1,278,462)	—	—	—
Cash and cash equivalents at end of year	8(a)	10,515,123	10,301,071	7,637,530	5,555,422

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

34 ANNUAL REPORT 2009

��

�� issue in accordance with a resolution of the Directors on 26 August 2009.

Treasury Group Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian ��

The nature of operations and principal activities of the Group are disclosed in the Directors’ Report.

��

The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board. The financial report has also been prepared on a historical cost basis, except for available-for-sale investments, which have been measured at fair value, convertible notes, which are fair valued through profit and loss and loans and receivables, which are measured at amortised cost.

The financial report is presented in Australian dollars.

As reflected in the half year report ended 31 December 2008, during the year the Company has re-evaluated its accounting for investments in the light of proposed changes in the Company’s equity ownership interests in the underlying boutiques due to increased equity participation by employees of the boutiques. The re-evaluation included consideration of the impact of other powers conferred by the underlying shareholder agreements between the Company and other investors in each of the underlying boutiques. During this review it transpired that in making its initial assessments of the classification of these investments the Company had not fully considered the impact of certain of these powers, primarily in respect of the ability of other shareholders to influence financial and operating decision making. As a result of this review the Company has reassessed its accounting for its investments as follows:

	Previous classifcation	Revised classifcation
Investors Mutual Limited �� Treasury Asia Asset Management Ltd Orion Asset Management Ltd RARE Infrastructure Ltd Cannae Capital Partners Ltd	Subsidiary �� Subsidiary Associate Associate Investment at fair value through proft and loss	Jointly controlled entity �� Jointly controlled entity Jointly controlled entity Jointly controlled entity Associate

The comparative consolidated financial information as at 30 June 2008 has been restated accordingly, with restatement of opening retained earnings at 1 July 2007. There has been no impact on net profit after tax attributable to members of the parent or equity attributable to equity holders of the parent.

Interests in jointly controlled entities in which the Group has joint control are accounted for under the equity method in the consolidated financial statements and the cost method in the company financial statements.

��

The financial report complies with Australian Accounting Standards as issued by the Australian Accounting Standards Board and ��

(C) NEW ACCOUNTING STANDARDS AND INTERPRETATIONS

At the date of authorisation of the financial report, the Standards and Interpretations relevant to the Group listed below were in issue but not yet effective.

Initial application of the following Standards will not affect any of the amounts recognised in the financial report, but will change the disclosures presently made in relation to the Group and the Company’s financial report:

TREASURY GROUP LIMITED 35

��

		Expected to be
	Effective for annual reporting	initially applied in the
Standard	periods beginning on or after	fnancial year ending
��	1 January 2009	30 June 2010
��
��
Australian Accounting Standards arising from AASB 101’
��	1 January 2009	30 June 2010
Australian Accounting Standards arising from AASB 123’
��	AASB 3 (business	30 June 2010
��	combinations occurring
to Australian Accounting Standards arising from AASB 3 and AASB 127’	after the beginning of annual
	reporting periods beginning
	1 July 2009), AASB 127 and
	AASB 2008-3 (1 July 2009)
��	1 January 2009	30 June 2010
��
��	1 January 2009	30 June 2010
arising from the Annual Improvements Project’
��	1 July 2009	30 June 2010
Standards arising from the Annual Improvements Project’
��	1 January 2009	30 June 2010
Cost of an Investment in a Subsidiary, Jointly Controlled Entity
or Associate
��	1 July 2009	30 June 2010
Eligible Hedged Items’
��	1 October 2008	30 June 2010
Operation’
��	1 July 2009	30 June 2010
��
AASB Interpretation 17 — Distributions of Non-cash Assets to Owners’
��	1 July 2009	30 June 2010
of assets from customers received on or after 1 July 2009)
��	1 January 2009	30 June 2010
��	(and that ends on or
	after 30 April 2009)
��	1 July 2009	30 June 2010
arising from the Annual Improvements Process’
��	1 January 2010	30 June 2011
Standards arising from the Annual Improvements Process’
AASB 2009-6 “Amendments to Australian Accounting Standards”	1 January 2009	30 June 2010
AASB 2009-7 “Amendments to Australian Accounting Standards”	1 July 2009	30 June 2010

36 ANNUAL REPORT 2009

�� POLICIES (CONT.)
(C) NEW ACCOUNTING STANDARDS AND INTERPRETATIONS (CONT.)

Adoption of new accounting standards

Since 1 July 2007 the Company has early adopted AASB 2 �� a result the Group has classified investors in the funds that have been consolidated as minority interests rather than liabilities.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. Minority interests not held by the Group are allocated their share of net profit after tax in the Income Statement and are presented within equity in the Consolidated Balance Sheet, separately from parent shareholders’ equity.

Subsidiaries are carried at cost in the parent company’s separate financial statements with the exception of RARE Series Emerging �� as available-for-sale investments and are carried at market value.

��

Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Service fees

�� companies are recognised as revenue as the services are provided.

Management fees

Management fees receivable on asset management activities are accrued in accordance with terms and conditions of the underlying management agreements.

Interest income

Revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

Dividends and distributions

Revenue is recognised when the Group’s right to receive the payment is established.

��

The consolidated financial statements comprise Treasury Group Limited and its subsidiaries as at 30 June each year (the Group). Interests in jointly controlled entities and associates are equity accounted and are not part of the consolidated Group (see note (j) below).

Subsidiaries are all those entities over which the Group has the power to govern the financial and operating policies so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether a group controls another entity.

The financial statements of the subsidiaries are prepared for the same reporting period as the parent company.

In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from intra-group transactions have been eliminated in full.

��

Cash and short-term deposits in the Balance Sheet comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.

�� equivalents consist of cash and cash equivalents as defined above.

��

Trade receivables, which are generally 30 day terms, are recognised at fair value and subsequently valued at amortised cost using the effective interest method, less any allowance for uncollectible amounts. Cash flows relating to short term receivables are not discounted as any discount would be immaterial.

Collectibility of trade receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off when identified. An allowance for doubtful debts is raised when there is objective evidence that the Group will not be able to �� payments are considered objective evidence of impairment. The amount of the impairment loss is the receivable carrying amount compared to the present value of estimated future cash flows, discounted at the original effective interest rate.

The Group did not have any impaired trade receivables (2008: Nil).

��

(i) Financial assets

A financial asset (or, where applicable, a part of the financial asset or part of a group of similar financial assets) is derecognised when:

��
�� from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group’s continuing involvement in the asset.

TREASURY GROUP LIMITED 37

��

�� POLICIES (CONT.)

�� LIABILITIES

(ii) Financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.

��

The Group assesses at each balance sheet date whether a financial asset or group of financial assets is impaired.

If there is objective evidence that an available-for-sale investment is impaired, an amount comprising the difference between its cost (net of any principal repayment and amortisation) and its current fair value, less any impairment loss previously recognised in the Income Statement, is transferred from equity to the Income Statement. Reversals of impairment losses for equity instruments classified as available-for-sale are not recognised in profit. The Group’s available-for-sale investments consist of investments in unlisted unit trusts which are valued at market value. The Group would consider that there was objective evidence of impairment if there was a significant or prolonged decline in market value to below cost.

post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from associates are recognised in the parent entity’s Income Statement, while in the consolidated financial statements they reduce the carrying amount of the investment.

Investments in associates are carried at cost in the parent company’s separate financial statements.

The reporting dates of the associates and the Group are identical and the associates’ accounting policies conform with those used by the Group for like transactions and events in similar circumstances.

�� Interests in jointly controlled entities in which the Group has joint control are accounted for under the equity method in the consolidated financial statements and the cost method in the company financial statements, similar to investments in associates as described in note 2(j).

��

Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses.

Major depreciation methods and periods are:

2009 & 2008

��

The Group’s investments in its associates are accounted for using the equity method of accounting in the consolidated financial statements. The associates are entities in which the Group has significant influence and which are neither a subsidiary nor a joint venture.

Under the Standards, significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control of those policies.

The Group generally deems they have significant influence if they have over 20% of the voting rights or potential voting right or Board representation.

Under the equity method, the investments in the associates are carried in the Consolidated Balance Sheet at cost plus post-acquisition changes in the Group’s share of net assets of the associates.

Goodwill acquired in a business combination represents payment made by the acquirer in anticipation of future economic benefits from assets that are not capable of being individually identified and separately recognised. It is initially measured as cost being the excess of the cost of the business combination over the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities. Goodwill relating to the associates is included in the carrying amount of the investments and is not amortised. After application of the equity method, the Group determines whether it is necessary to recognise any additional impairment loss with respect to the Group’s net investment in the associates.

The Group’s share of its associates’ post-acquisition profits or losses is recognised in the Income Statement, and its share of

��	��	��
��	��	��
��	��	��

The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year end.

Disposal

An item of plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.

(M) INTANGIBLES

Intangible assets acquired separately are initially measured at �� at cost less any accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is recognised in profit or loss in the year in which the expenditure is incurred.

Intangible assets with finite lives are amortised over the useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed at least at each financial year end.

38 ANNUAL REPORT 2009

�� POLICIES (CONT.)

��

�� Instruments: Recognition and Measurement, are classified as either financial assets at fair value through profit and loss, loans and receivables, held-to-maturity investments, or available-forsale investments. The classification depends on the purpose for which the investments were acquired. Designation is reevaluated at each financial year end, but there are restrictions on reclassifying to other categories.

When financial assets are recognised initially they are measured at fair value, plus, in the case of assets not at fair value through profit or loss, directly attributable transaction costs.

Recognition and Derecognition

All regular way purchases of sales of financial assets are recognised on the trade date, i.e. the date that the Group commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets under contracts that require delivery of the assets within the period established generally by regulation or convention in the market place. �� flows from the financial assets have expired or been transferred.

(i) Financial assets at fair value through profit or loss

�� are acquired for the purpose of selling in the near term with the intention of making a profit.

Derivatives are also classified as held for trading unless they are designed as effective hedging instruments. Gains or losses on financial assets held for trading are recognised in profit or loss and the related assets are classified as current assets in the balance sheet.

The Group has designated its investment in convertible notes as at fair value through profit and loss as it contains an embedded

The fair value of financial assets at fair value through profit or loss is determined by reference to quoted market bid prices at the close of business on that balance sheet date.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains or losses are recognised in profit or loss when the loan and receivables are derecognised or impaired, as well as through the amortisation process.

�� of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.

(iii) Available-for-sale investments

Available-for-sale investments are those non-derivative financial assets that are designated as available-for-sale or are not classified as any of the three other categories. After initial recognition, available-for-sale investments are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is recognised in profit or loss.

The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business on that balance sheet date.

��

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date.

Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences except:

�� initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

Tax Consolidation

Effective 1 July 2003, for the purposes of income taxation, Treasury Group Limited and its 100% owned controlled entities have formed a tax consolidated group. Treasury Group Limited is the head entity of the tax consolidated group. Members of the tax consolidated group have entered into a tax sharing arrangement in order to allocate income tax expense to the wholly-owned controlled entities on a pro-rata basis. Under a tax funding agreement, each member of the tax consolidated group is responsible for funding their share of any tax liability. 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. At the balance date, the possibility of default is remote.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:

TREASURY GROUP LIMITED 39

��

�� POLICIES (CONT.)

��

Tax Consolidation (cont.)

�� temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither ��
�� with investments in subsidiaries, jointly controlled entities or associates, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Unrecognised deferred income tax assets are assessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.

Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

�� THAN GOODWILL

Amortising intangible assets and property, plant and equipment are tested for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. Recoverable amount is the higher of an asset’s fair value less �� impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows that are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are tested for possible reversal of the impairment whenever events or changes in circumstances indicate that the impairment may have reversed.

(R) TRADE AND OTHER PAYABLES

Trade payables and other payables are carried at amortised cost and due to their short term nature they are not discounted. They represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of the goods and services. The amounts are unsecured and are usually paid within 30 days of recognition.

��

(i) Wages, salaries, annual leave and sick leave

Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulated sick leave expected to be settled within 12 months of the reporting date are recognised in provisions in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for nonaccumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable.

��

Revenues, expenses and assets are recognised net of the amount of GST except:

�� services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item, ��
�� of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the Balance Sheet.

�� basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.

(ii) Long service leave

The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments, including on-costs, to be made in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures, and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.

��

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

40 ANNUAL REPORT 2009

�� POLICIES (CONT.)

(U) LEASES

The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.

Operating leases

Operating lease payments are recognised as an expense in the Income Statement on a straight-line basis over the lease term. Operating lease incentives are recognised as a liability when received and subsequently reduced by allocating lease payments between rental expense and reduction of the liability.

��

Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude costs of servicing equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted for any bonus element. Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:

��
�� with dilutive potential ordinary shares that have been ��
�� during the period that would result from the dilution of ��

divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element, if any.

(W) SHARE-BASED PAYMENTS

Equity-settled transactions:

The Group provides benefits to employees (including Senior Executives and Directors) of the Group in the form of sharebased payment transactions, whereby employees render services in exchange for shares or rights over shares (equitysettled transactions).

There are currently three plans in place to provide these benefits:

(i) The Employee Share Option Plan, which provides benefits to Directors, Senior Executives and employees.
(ii) The Employee Share Plan, which provides the opportunity to the employees (including Directors) of the Group to purchase shares in the parent company at a discount.
(iii) The Executive Share plan, which provides benefits to the Senior Executives of Treasury Group Ltd and Treasury Group Investment Services Ltd.

The cost of the equity-settled employee share option plan is measured by reference to the fair value at the date at which they are granted. The fair value is determined using a Binomial model.

In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Treasury Group Ltd (market conditions), if applicable.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the vesting period).

The cumulative expense recognised for equity-based transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The Income Statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

No cumulative expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition.

If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition an expense is recognised for any modification that increases the total fair value of the of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.

If an equity-settled award is cancelled, it is treated as if it has vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award as described in the previous paragraph.

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share.

��

A business segment is a distinguishable component of the entity that is engaged in providing products or services that are subject to risks and returns that are different to those of other business segments. Management has assessed the reportable business segments under AASB 114 Segment Reporting and have determined that on adoption of AASB 8 Segment Reporting (applicable for accounting period beginning after 1 January 2009), additional operating segments are likely to be reported. A geographical segment is a distinguishable component of the entity that is engaged in providing products or services within a particular economic environment and is subject to risks and returns that are different than those of segments operating in other economic environments.

TREASURY GROUP LIMITED 41

��

(i) Functional and presentation currency

Both the functional and presentation currency of Treasury Group Limited and its Australian subsidiaries is Australian dollars ($).

(ii) Transactions & balances

Transactions in foreign currencies are initially recorded in the functional currency by applying an average spot exchange rate for the period. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date.

Non-monetary items are measured in terms of historical cost in a foreign currency and are translated using the exchange rate at the date the fair value was determined.

(iii) Translation of Group Companies functional currency to presentation currency

The results of the overseas subsidiaries are translated into Australian Dollars at an average rate for the period. Assets and liabilities are translated at exchange rates prevailing at balance date.

Exchange variations resulting from the translation are recognised in the foreign currency translation reserve in equity.

On consolidation exchange differences arising from the translation of the net investment in the overseas subsidiaries are taken to the foreign currency translation reserve.

��

Where necessary, comparative information has been reclassified and repositioned for consistency with current year disclosures. The comparative consolidated financial information as at 30 June 2008 was restated as described in note 2(a), with restatement of opening retained earnings at 1 July 2007.

��

The Group’s principal financial instruments comprise of cash, short-term deposits, available-for-sale investments, investments at fair value through profit and loss, receivables, payables and convertible notes held.

Details of significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity

��

Interest rate risk

The Group’s exposure to market interest rates relates primarily to the Group’s cash and short term investments.

At balance date the Group had the following mix of financial assets exposed to Australian variable interest rate risk:

	Consolidated	Consolidated	Treasury Group Limited	Treasury Group Limited
		2008
	2009	Restated	2009	2008
	$	$	$	$
Financial Assets
Cash at bank and in hand	10,515,123	3,824,188	7,637,530	562,814
Commercial Bills	—	6,476,883	—	4,992,608
	10,515,123	10,301,311	7,637,530	5,555,422

�� day-to-day cash flow needs of the Group.

The following sensitivity analysis is based on the interest rate risk exposures in existence at the balance sheet date.

At 30 June 2009, if interest rates had moved, as illustrated in the table below, with all other variables held constant, post tax profit and reserves would have been affected as follows:

42 ANNUAL REPORT 2009

��

��
	Post tax Proft		Reserves
	Higher / (Lower)		Higher / (Lower)
		2008
	2009	Restated	2009	2008
	$	$	$	$
Consolidated
+0.25% (25 basis points)	17,325	33,244	—	—
��	��	��	�	�
Parent
+0.25% (25 basis points)	13,467	24,888	—	—
��	��	��	�	�

The movements in profit are due to higher/lower interest income from cash and short term deposit balances.

The Group does not have any significant exposure to fixed interest rate risk as the loans made by Treasury Group to its related parties, which are the only assets or liabilities exposed to fixed interest rate risk, are carried at amortised cost.

Credit risk

Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents, trade and other receivables, available-for-sale financial assets, investments at fair value through profit and loss, and loans receivable from related entities. The Group’s exposure to credit risk arises from potential default of the counter party, with the maximum exposure equal to the carrying amount of these instruments. Exposure at balance date is addressed in each applicable note.

The Group does not hold any credit derivatives to offset its credit exposure.

The Group trades only with recognised, creditworthy third parties, and as such collateral is not requested nor is it the Group’s policy to securitise its trade and other receivables.

Receivables balances and loans made to related entities are monitored on an ongoing basis at board level and remain within approved levels, with the result that the Group’s exposure to bad debts is not significant.

It is a core part of Treasury Group’s policy to extend loans to new companies in the group to provide them financing until they reach profitability. As with all new start-ups there is a risk that a new venture will fail, in which case Treasury Group would have to write the loan off. All loans made to new ventures are monitored on an ongoing basis at board level to minimise the risk of a write off occurring. The maximum exposure to credit risk is the value of the loans.

Liquidity risk

The Group does not have any external financing liabilities and has significant cash balances. As such management is of the opinion that it does not face significant liquidity risks. Management prepares cash flow forecasts on a monthly basis to ensure that it has sufficient liquid assets to meet its liabilities.

The Group’s objective is to maintain financial flexibility and only invests surplus funds in cash and short-term deposits.

Both in the current and proceeding year all of the Group’s and parent entity’s financial liabilities are due within 6 months or less.

Price risk

Equity security price risk arises from investments in unlisted managed trusts, which mainly invest their funds in equities listed on �� The investments are made by members of the Group for the purpose of seeding new products. Equity securities price risk also arises from investments in equity markets made by the consolidated funds.

�� considering the determination of a reasonably possible change. In the preparation of this analysis the following assumptions and sources of information have been used:

��
��
�� weekly returns
��

TREASURY GROUP LIMITED 43

��

Price risk (cont.)

��
��
��

In relation to international investments a 10 year historical annualised return for the MSCI Global Index has been used sourced from MSCI Barra.

As at 30 June 2009, the Group had the following exposure to equity security price risks:

	Consolidated	Consolidated	Treasury Group Limited	Treasury Group Limited
		2008
	2009	Restated	2009	2008
	$	$	$	$
Available-for-sale investments
— Units in managed investment trusts	4,379,402	—	4,615,821	9,435,856
— Units in other corporations	839	—	—	—
Investment at fair value through proft and loss
— Listed shares in other corporations	1,855,356	11,627,867	—	—
— Unlisted shares in other corporations	13,350	—	—	—
— Units in managed investment trusts	38,687	182,728	—	—
	6,287,634	11,810,595	4,615,821	9,435,856

As at 30 June 2009, if the unit price for the Group’s investments had moved, as illustrated in the table below, with all other variables held constant, post tax profit and reserves would have been affected as follows:

	Post tax Proft	Post tax Proft	Reserves	Reserves
	Higher /	(Lower)	Higher /	(Lower)
		2008
	2009	Restated	2009	2008
	$	$	$	$
Consolidated
��	��	��	��	�
��	��	��	��	�
MSCI World index +2.59%	7,537	181,655	79,399	—
��	��	��	��	�
Parent
MSCI World index +2.59%	—	—	83,684	177,012
��	�	�	��	��

The investments that are classified as available-for-sale and any movements in market value are captured in an Unrealised Gains Reserve and do not impact reported profit unless they are deemed to be impaired at reporting date.

Foreign Currency Risk

As at 30 June 2009 the Group has invested $2,250,169 (2008: $7,730,536) in Euro denominated investments, $173,634 (2008: Nil) in British Pound denominated investments and $1,959,081 (2008: $5,932,986) in US Dollar denominated investments �� Board. The Group has not hedged its foreign currency exposure.

44 ANNUAL REPORT 2009

��

Foreign Currency Risk (cont.)

A simple analysis has been conducted using past economic data to provide some perspective when considering the determination of a reasonably possible change. In the preparation of this analysis the following assumptions and sources of information have been used:

��
��
�� weekly returns
��
��
��
��

The Group does not have any significant transactional currency exposures.

At 30 June 2009, the Group had the following exposure to foreign currency:

	Consolidated	Consolidated	Treasury Group Limited	Treasury Group Limited
		2008
	2009	Restated	2009	2008
	$	$	$	$
Available-for-sale investments — Euro	2,246,687	—	2,246,687	4,927,699
Available-for-sale investments — US Dollar	1,959,081	—	1,959,081	4,590,503
Available-for-sale investments — British Pound	173,634	—	173,634
Other assets — Euro	3,482	3,428,487	—	—
Other assets — USD	—	215,438	—	—
��	�	��	�	�
��	�	��	�	�
	4,382,884	13,663,522	4,379,402	9,518,202

As at 30 June 2009, had the Australian Dollar moved, as illustrated in the table below, with all other variables held constant, post tax profit and reserves would have been affected as follows:

tax proft and reserves would have been affected as follows:
	Post tax Proft		Reserves
	Higher / (Lower)		Higher /	(Lower)
		2008
	2009	Restated	2009	2008
	$	$	$	$
Consolidated
AUD/Euro +11%	—	541,830	172,995	—
��	�	��	��	�
AUD/US $ +12%	—	498,371	164,563	—
��	�	��	��	�
AUD/GBP +11%	—	—	13,370	—
��	�	�	��	�
Parent
AUD/Euro +11%	—	—	172,995	373,092
��	�	�	��	��
AUD/US $ +12%	—	—	164,563	385,602
��	�	�	��	��
AUD/GBP +11%	—	—	13,370	—
��	�	�	��	�

TREASURY GROUP LIMITED 45

��

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgments and estimates on experience and other factors, including expectations of future events that may have an impact on the Group. All judgments, estimates and assumptions made are believed to be reasonable based on the most current set of circumstances available to management. Actual results may differ from the judgments, estimates and assumptions. Significant judgments, estimates and assumptions made by management in the preparation of these financial statements are outlined below:

��

Taxation

The Group’s accounting policy requires management’s judgment as to the types of arrangements considered to be a tax on income in contrast to an operating cost. Judgement is also required in assessing whether deferred tax assets and certain deferred tax liabilities are recognised on the balance sheet. Deferred tax assets, including those arising from unrecouped tax losses, capital losses and temporary differences, are recognised only where it is considered more likely than not that they will be recovered, which is dependent on the generation of sufficient future taxable profits.

Assumptions about the generation of future taxable profits depend on management’s estimates of future cash flows. These depend on estimates of future income, operating costs, dividends and other capital management transactions. Judgements are also required about the application of income tax legislation. These judgements and assumptions are subject to risk and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities recognised on the balance sheet and the amount of other tax losses and temporary differences not yet recognised. In such circumstances, some or all of the carrying amounts of recognised deferred tax assets and liabilities may require adjustment, resulting in a corresponding credit or charge to the income statement.

Deferred tax assets

Deferred tax assets are recognised for deductible temporary differences as management considers that it is probable that future taxable profits will be available to utilise those temporary differences.

�� unrealised reserves except the impairments are recognised in profit and loss. The fair value of the investments has been determined by reference to the published unit price in an active market.

�� determined based on Directors’ valuation.

Impairment of non-financial assets

The Group assesses impairment of all assets at each reporting date by evaluating conditions specific to the Group and to the particular asset that may lead to impairment. These include performance, technological, economic and political environments and future product expectations. If an impairment trigger exists the recoverable amount of the asset is determined. This involves value in use calculations, which incorporate a number of key estimates and assumptions.

��

Share-based payment transactions

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using either a Binomial model or a Black-Scholes model, with the assumptions detailed in Note 21. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact expenses and equity.

Long service leave provision

The liability for long service leave is recognised and measured at the present value of the estimated future cash flows to be made in respect of all employees at balance date. In determining the present value of the liability, attrition rates and pay increases through promotion and inflation have been taken into account

Valuation and Impairment of Non Current Loans and Receivables

The Group carries loans and receivables at amortised cost with impairments for these loans and receivables are recognised in profit and loss. Determining whether non current loans and receivables are impaired requires an estimation of the future cash flows expected from the loans and apply a suitable discount rate in order to calculate present value. The carrying amount of non current loans and receivables at the balance sheet date was $7,617,143 (2008: $6,567,050) after an impairment loss of $497,123 (2008: nil) was recognised during the current financial year. Details of the impairment loss calculation are provided in note 12.

46 ANNUAL REPORT 2009

	Consolidated	Consolidated	Treasury Group Limited	Treasury Group Limited
		2008
	2009	Restated	2009	2008
	$	$	$	$
��
��
Fee income
��	��	��	�	�
Service fees
— jointly controlled entities	2,729,509	1,802,877	606,411	354,428
— associates	169,276	—	—	—
— other	176,010	171,372	—	—
Total fee income	4,743,962	4,392,341	606,411	354,428
Dividends and distributions
— subsidiaries	—	—	—	1,000,000
— jointly controlled entities	—	583,723	5,794,132	20,436,300
— other	88,595	23,160	—	—
Unit trust distribution	11,683	2,538	—	—
Total dividends and distributions	100,278	609,421	5,794,132	21,436,300
Interest
Related parties
— jointly controlled entities	486,473	498,750	486,473	498,750
— associates	155,193	57,040	155,193	57,040
Other persons/corporations	500,178	1,425,600	401,352	1,076,894
Total interest	1,141,844	1,981,390	1,043,018	1,632,684
Total revenues	5,986,084	6,983,152	7,443,561	23,423,412
��
��
investments at fair value through proft and loss	(580,231)	267,840	(211,360)	977,432
Net (losses) on disposal of investments at fair value through
proft and loss	—	(35,262)	—	—
Net (losses) on disposal of available-for-sale investments	(894,792)	—	(883,557)	—
Impairment of available-for-sale investments	(1,115,024)	—	(1,115,024)	—
��	��	��	��	��
Other gains / (losses)	18,304	(81,039)	8,640	287
Total gains / (losses) on investments	(1,817,651)	162,707	(1,522,284)	980,295

TREASURY GROUP LIMITED 47

��

		Consolidated	Consolidated	Treasury Group Limited	Treasury Group Limited
			2008
		2009	Restated	2009	2008
		$	$	$	$
��
��
Salaries and employee benefts
Salaries and employee benefts		4,945,564	4,828,448	2,651,004	2,673,571
Employee share plan expenses		96,699	32,233	53,721	17,907
Share-based payment expense arising from equity-settled
share-based payment transactions		684,996	576,654	653,069	514,535
		5,727,259	5,437,335	3,357,794	3,206,013
Depreciation and amortisation
Software	15(a)	8,147	3,215	1,823	1,755
��	��	��	��	��	��
Offce equipment	14(a)	34,428	50,005	15,045	29,535
Leasehold improvements	14(a)	6,600	4,297	5,595	3,669
Total depreciation and amortisation of non-current assets		59,861	65,858	27,215	37,619
��		��	��	��	��
Operating lease rental — minimum lease payments		355,610	230,025	187,295	122,905
��		��	��	��	��
��		��	��	��	��
Communication costs		66,408	90,457	19,189	41,972
Payroll tax		225,698	304,130	100,638	183,284
��		��	��	��	��
Consulting fee		288,784	372,627	37,539	349,932
Insurance charges		191,999	151,385	129,482	109,890
Directors’ fees (non-executives)		365,539	369,144	281,031	323,000
��		��	��	��	��
Training expenses		25,750	34,114	9,025	15,915
Share registry expenses		53,603	64,590	53,603	64,590
��		��	��	��	��
Subscriptions		75,617	68,786	39,973	38,471
Loss on disposal of plant and equipment		26,301	943	26,301	—
Write down of investment in jointly controlled entity	13(c)	24,311	140,552	6,538	140,552
Impairment on loan to associates	12	497,123	—	497,123	—
Other expenses		226,941	124,812	36,326	30,761
		3,247,141	2,960,947	1,785,910	1,956,837
Total other expenses		3,331,313	3,026,805	1,813,125	1,994,456

48 ANNUAL REPORT 2009

	Consolidated	Consolidated	Treasury Group Limited	Treasury Group Limited
		2008
	2009	Restated	2009	2008
	$	$	$	$
��
��
The major components of income tax beneft are:
Income Statement
Current income tax
Current income tax (charge) / beneft	883,468	609,933	789,598	550,952
Adjustments in respect of current income tax charge
of previous years	90,067	(42,521)	90,067	(42,521)
Deferred income tax
Relating to origination and reversal of temporary differences	694,435	(223,583)	500,454	(218,902)
Income tax beneft reported in the Income Statement	1,667,970	343,829	1,380,119	289,529
��
Deferred income tax related to income charged or credited
directly to equity
Unrealised gain on available-for-sale investments	124,482	—	244,255	(169,244)
Income tax expense reported in equity	124,482	—	244,255	(169,244)
��
��
��
A reconciliation between tax beneft and the product of
accounting proft before income tax multiplied by the
Group’s applicable income tax rate is as follows:
Accounting proft before income tax:	3,285,081	16,706,489	750,358	19,203,238
At the Group’s statutory income tax rate of 30% (2008: 30%)	(985,524)	(5,011,947)	(225,107)	(5,760,971)
Share-based payments	(195,921)	(154,361)	(195,921)	(154,361)
Share in net proft of jointly controlled entities	2,730,989	5,821,239	—	—
Tax offset for franked distribution	—	—	1,714,824	6,255,774
Expenditure not allowable for income tax purposes	(5,700)	(9,927)	(3,744)	( 8,392)
Under/(over) provision of previous year	90,067	(42,521)	90,067	(42,521)
Other	34,059	(258,654)	—	—
Aggregate income tax beneft	1,667,970	343,829	1,380,119	289,529

TREASURY GROUP LIMITED 49

��

	Balance Sheet	Balance Sheet	Income Statement	Income Statement
		2008		2008
	2009	Restated	2009	Restated
	$	$	$	$
��
��
Deferred income tax at 30 June relates to the following:
Consolidated
Deferred tax assets
Tax losses	2,257,695	963,431	—	—
Impairment on loan to associates	149,137	—	149,137	—
Write down of investment in associates	—	—	(42,166)	—
Provisions	161,881	65,896	64,997	(11,874)
Revaluation of available for sale investments at fair value	107,816	490,099	470,621	—
Other	—	(355,638)	(11,562)	61,711
	2,676,529	1,163,788
Deferred tax liabilities
Revaluations of investments at fair value through proft and loss	—	(3,923)	—	38,489
Revaluation of convertible notes to fair value	(574,822)	(638,230)	63,408	(258,000)
Receivables	(21,828)	(49,255)	—	(42,346)
Other	(10,952)	(7,122)	—	(11,563)
	(607,602)	(698,530)	694,435	(223,583)
Parent
Deferred tax assets
Tax losses	2,163,825	854,220	—	—
Impairment on loan to associates	149,137	—	149,137	—
Write down of investment in associate	—	42,166	(42,166)	42,166
Provisions	77,753	133,446	53,198	102,123
Unrealised losses	—	169,243	—	—
Other	8,598	49,865	276,877	(22,890)
	2,399,313	1,248,940
Deferred tax liabilities
Revaluation of convertible notes to fair value	(574,822)	(551,229)	63,408	(340,301)
Receivables	(20,194)	(134,072)	—	—
Other	(10,925)	—	—	—
	(605,941)	(685,301)	500,454	(218,902)

��

50 ANNUAL REPORT 2009

��

Tax effect accounting by members of the tax consolidated group

Members of the tax consolidated group allocate current taxes to members of the tax consolidated group in accordance with their accounting profit for the period, while deferred taxes are allocated to members of the tax consolidated group in accordance with the principles of AASB 112 Income Taxes. Allocations are made at the end of each half year.

The allocation of taxes is recognised as an increase / decrease in the subsidiaries’ inter-company accounts with the tax consolidated group head company, Treasury Group Limited. The Group has applied the group allocation approach in determining the appropriate amount of current taxes to allocate to members of the tax consolidated group.

amount of current taxes to allocate to members of the tax consolidated group.
	Treasury Group Limited
	2009	2008
	$	$
In preparing the accounts for Treasury Group Limited for the current year, the following
amounts have been recognised as tax-consolidation contribution adjustments:
Total decrease to tax expense of Treasury Group Limited	93, 870	49,619
Total increase to inter-company assets of Treasury Group Limited	(93,870)	(49,619)
��
��*
��	��	��
��
Current year interim
��	��	��
Previous year fnal
��	��	��
Total paid during the year (40 cents per share) (2008: 65 cents per share)	9,236,906	14,957,784
* Calculation based on the ordinary shares on issue as at 31 July 2009
��
The amount of franking credits available for the subsequent fnancial year are:
— franking account balance as at the end of the fnancial year at 30% (2008: 30%)	6,764,579	6,233,127
— franking credits that will arise from the receipt of dividends recognised as
receivables at the reporting date	620,596	2,746,711
	7,385,175	8,979,838
The amounts of franking credits available for future reporting periods:
— impact on the franking account of dividends proposed or declared
before the fnancial report was authorised for issue but not recognised
as a distribution to equity holders during the year	(988,747)	(2,971,213)
��	��	��

The tax rate at which paid dividends have been franked is 30% (2008: 30%). Dividends proposed will be franked at the rate of 30% (2008: 30%).

TREASURY GROUP LIMITED 51

��

	Consolidated	Consolidated	Treasury Group Limited	Treasury Group Limited
		2008
	2009	Restated	2009	2008
	$	$	$	$
��
��
Cash balance comprises:
— cash at bank and in hand	10,515,123	3,824,188	7,637,530	562,814
— commercial bills	—	6,476,883	—	4,992,608
Closing cash balance **	10,515,123	10,301,071	7,637,530	5,555,422
(B) RECONCILIATION
Net proft	4,953,051	17,050,318	2,130,477	19,492,767
Adjustments for
Depreciation and amortisation of non-current assets	59,861	65,858	27,215	37,619
Loss on disposal of fxed assets	26,301	—	26,301	—
Amortisation of deferred interest	—	(78,341)	—	(78,341)
Share of jointly controlled entities’ net profts	(9,103,298)	(19,404,129)	—	—
Dividend received from jointly controlled entities	5,716,081	19,852,577	—	—
Non-cash interest	(484,216)	(338,371)	(484,216)	(338,371)
Share-based payments	781,695	608,887	653,069	514,535
��	��	��	��	��
Write down of investment in jointly controlled entity	24,311	140,552	6,538	140,552
Losses on disposal of available-for-sale investments	894,792	—	883,577	—
Losses on disposal of investments at fair value through proft and loss	—	35,262	—	—
��
value through proft and loss	580,231	(267,840)	211,360	(977,432)
Impairment of available-for-sale investments	1,115,024	—	1,115,024	—
Impairment of loan to associates	497,123	—	497,123	—
Changes in assets and liabilities
(Increase)/decrease in trade and other receivables	7,421,841	(329,553)	5,025,906	(2,785,308)
(Increase)/decrease in trade and other receivable of
deconsolidated entities *	(3,269,353)	—	—	—
(Increase) in deferred tax assets	(1,512,741)	(697,359)	(1,150,373)	(679,448)
(Increase) in prepayments and other assets	(56,436)	(272,326)	(388,632)	(147,641)
(Decrease)/increase in trade and other payables	(368,406)	(2,549,938)	(502,857)	140,728
(Decrease)/increase in deferred tax liability	(90,928)	60,930	(79,360)	340,302
Increase in current provision	89,251	33,047	51,848	33,047
(Decrease)/increase in non-current provision	(4,096)	77,997	(4,096)	56,250
Net cash fow from operating activities	6,515,996	13,976,403	7,339,887	15,746,683

At reporting date, Treasury Group Limited did not have any financing facilities available.

Represents trade receivables of TG RARE and TG Asia which were deconsolidated entities during the period (2008: Nil).

�� as subsidiaries.

52 ANNUAL REPORT 2009

		Consolidated	Consolidated	Treasury Group Limited	Treasury Group Limited
			2008
		2009	Restated	2009	2008
		$	$	$	$
��
Current
Trade receivables		2,290,141	1,465,251	8,219	—
Sundry receivables		72,760	183,977	67,314	—
Receivable from disposal of subsidiary		—	1,000,000	—	1,000,000
Other receivables		333,354	2,620,680	153,302	388,905
Related party receivables
— Subsidiaries	— Other	—	—	—	12,831
— Jointly controlled entities	— Dividend	1,448,058	6,208,964	1,448,058	6,208,964
	— Other	775,297	911,163	113,359	205,458
— Associates	— Other	57,221	5,555
— Other related party		209,396	212,478	—	—
		5,186,227	12,608,068	1,790,252	7,816,158

��

Trade receivables are non-interest bearing and generally on 30 day terms. A provision for impairment loss is recognised when there is objective evidence that an individual trade receivable is impaired. No provision for impairment losses has been made. At 30 June, the ageing analysis of receivables is as follows:

			0–30	31–60 days	61–90	+91 days
		Total	days	PDNI*	days PDNI*	PDNI*
		$	$	$	$	$
2009	Consolidated	5,186,227	4,592,432	3,667	23,694	566,434
	Parent	1,790,252	1,712,566	—	—	77,686
2008	Consolidated	12,608,068	12,076,083	12,574	12,574	506,837
	Parent	7,816,158	7,752,358	3,190	3,190	57,420

��

No receivables are past due and impaired. Payment terms on these amounts have not been re-negotiated. Management is satisfied that payment will be received in full. All overdue amounts as at 30 June 2008 were received in full.

Other balances within trade and other receivables do not contain impaired assets and are not past due. It is expected that these other balances will be received when due.

��

Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair value.

The maximum exposure to credit risk is the fair value of receivables. Collateral is not held as security with the exception of the receivable from disposal of subsidiary, which was secured by the shares of the subsidiary disposed. It is not the Group’s policy to transfer (on-sell) receivables to special purpose entities.

Trade receivables represent the Group’s outstanding invoices for management fees. As the fees are receivable from large investment and superannuation funds, management regards the credit risk as very low.

Receivables from other related parties are due from Premium Investors Ltd, a listed investment company, with a high credit rating. Management regards the credit risk as very low.

TREASURY GROUP LIMITED 53

��

	Consolidated	Consolidated	Treasury Group Limited	Treasury Group Limited
		2008
	2009	Restated	2009	2008
	$	$	$	$
��
Non-current
Security deposits	254,429	189,240	239,229	174,040
	254,429	189,240	239,229	174,040
The amount receivable is in Australian Dollars, non-interest
bearing and is not considered past due or impaired.
��
Current
��	��	�	��	��
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Unlisted shares in other corporations	839	—	40	82,426
	4,380,241	—	4,615,821	9,518,282

During the period, management deemed that these are not subsidiaries and are therefore reclassified as available for sale investments in the Consolidated Balance Sheet.

Units are readily saleable with no fixed terms.

The fair value of the unlisted available for sale investments is based on the current unit price of the investments which is determined by the value of the underlying investments of the unit trust.

��

	Consolidated	Consolidated	Treasury Group Limited	Treasury Group Limited
		2008
	2009	Restated	2009	2008
	$	$	$	$
��
��
Current
At fair value through proft and loss
Convertible notes	128,640	340,000	128,640	340,000
Held for trading
Listed shares in other corporations *	1,855,356	11,627,867	—	—
Unlisted shares in other corporations	13,350	—	—	—
Units in managed investment trusts *	38,687	182,728	—	—
	2,036,033	12,150,595	128,640	340,000

��

Valuation assumptions

The convertible note converts at the option of Treasury Group Limited to 35% of the equity of Cannae Capital Partners Ltd (CCP). A valuation decrement of $211,360 was recognised as a fair value loss (2008: $290,000 gain). The fair value has been based on Directors’ valuation.

54 ANNUAL REPORT 2009

��

Valuation sensitivities

Based on the Directors’ valuation the potential effect of using reasonably possible alternatives as inputs to the valuation model the range of possible fair values is between $64,320 and $192,960.

Credit risk

The maximum credit risk related to the convertible notes is the carrying value of the notes.

Convertible Notes held during 2008

During the prior year ended 30 June 2008 convertible notes were converted at the option of Treasury Group Limited to 40% of the equity of RARE Infrastructure Ltd (RARE). Accordingly, an increment of $1,150,000 was recognised as a fair value gain for the year ended 30 June 2008. The �� that a 60% chance of RARE becoming profitable, at which point the conversion right would be exercised.

		Consolidated	Consolidated	Treasury Group Limited	Treasury Group Limited
			2008
		2009	Restated	2009	2008
	Notes	$	$	$	$
��
(NON-CURRENT)
Loans receivables due from:
Jointly Controlled Entities	26	5,837,847	5,384,325	5,837,847	5,384,325
Associates	26	2,276,419	1,182,725	2,276,419	1,182,725
Impairment of loan to Associates	26	(497,123)	—	(497,123)	—
		7,617,143	6,567,050	7,617,143	6,567,050
All amounts are receivable in Australian Dollars and loans to	Jointly
Controlled entities are not considered past due or impaired.
The following table is a reconciliation of the movement of impairment
charges on loans to Associates:
Impairment Losses on loans to Associates
Impairment losses, beginning balance		—	—	—	—
Impairment charge	5 (c)	(497,123)	—	(497,123)	—
Impairment losses, closing balance		(497,123)	—	(497,123)	—

(A) LOANS

The majority of non-current loans to associates and jointly controlled entities are subordinated to all other creditors as a condition ��

��

The fair values and carrying values of non-current receivables of the Group and the Company are as follows:

	2009		2008
	Carrying	Fair	Carrying	Fair
	Amount	Value	Amount	Value
	$	$	$	$
Loans to jointly controlled entities	5,837,847	5,837,847	5,384,325	5,384,325
Loans to associates	1,779,296	1,779,296	1,182,725	1,182,725
	7,617,143	7,617,143	6,567,050	6,567,050

Loan to Jointly Controlled Entities

Loan to Associate

The interest rate used to discount cash flow was a fixed rate of 9% based on the contacted loan rate as per the loan agreement holding the risk margin constant at 2%.

TREASURY GROUP LIMITED 55

��

		Consolidated	Consolidated
			2008
		2009	Restated
	Notes	$	$
��
Investment in associates	13 (a)	149,717	149,717
Investments in jointly controlled entities	13 (b)	20,880,060	18,089,109
		21,029,777	18,238,826

(A) INTERESTS IN ASSOCIATES

(A) INTERESTS IN ASSOCIATES
		Ownership interest held by
		consolidated entity
		2009 2008
Name	Balance Sheet date	% %
Cannae Capital Partners Ltd — preference shares	30 June	1 1

(i) Principal activity

Cannae Capital Partners Ltd is a wholesale fund management company in Australia.

(B) INTERESTS IN JOINTLY CONTROLLED ENTITIES

(B) INTERESTS IN JOINTLY CONTROLLED ENTITIES
		Ownership interest held by
		consolidated entity
			2008
		2009	Restated
Name	Balance date	%	%
Investors Mutual Ltd — ordinary shares	30 June	47.5	50.1
Orion Asset Management (Aust) Pty Ltd — ordinary shares	30 June	41.9	41.9
��	��	��	��
Treasury Asia Asset Management Ltd — ordinary shares	30 June	40	40
RARE Infrastructure Ltd — ordinary shares	30 June	40	40
RARE IP Trust — units	30 June	40	—
Confuence Asset Management Ltd — ordinary shares	30 June	—	35

��

(i) Principal activity

(a) Investors Mutual Limited provides a funds management capability to both institutional and retail investors.
(b) Orion Asset Management (Aust) Pty Ltd is the parent company of Orion Asset Management Ltd, a wholesale fund management company in Australia.
�� competitive business.
(d) Treasury Asia Asset Management Ltd is a boutique asset manager specialising in the Asia Pacific Region.
(e) RARE ( RARE Infrastructure Ltd and RARE IP Trust) is a funds management business specialising in listed global infrastructure assets.
(f) Confluence Asset Management Ltd was a funds management company which specialised in investing in companies with a small capitalisation in Australia. The company ceased trading on 30 June 2008.

These entities are incorporated and domiciled in Australia.

56 ANNUAL REPORT 2009

	Consolidated	Consolidated
		2008
	2009	Restated
	$	$
��
(C) ADDITIONAL DISCLOSURES
(i) Carrying amount of investments accounted for using the equity method
Balance at the beginning of the year	18,238,826	16,827,826
— new investment during fnancial year	—	2,000,000
— write-down of investment in jointly controlled entity (Confuence Asset Management Ltd)	(24,311)	(140,552)
— trust distribution received from jointly controlled entities for prior years	(583,723)	—
— realised losses on investment in associates	89,819	—
— share of jointly controlled entities’ net profts for the fnancial year	9,103,298	19,404,129
— dividends received from jointly controlled entities	(5,794,132)	(19,852,577)
Balance at the end of the year	21,029,777	18,238,826
(ii) Share of jointly controlled entities’ balance sheets:
Current assets	20,865,480	24,034,265
Non-current assets	757,851	2,770,731
Current liabilities	(8,475,199)	(17,316,163)
Non-current liabilities	(2,584,738)	(2,315,668)
Net assets	10,563,394	7,173,165
(iii) Share of jointly controlled entities’ revenues
Revenues	32,721,769	45,231,735
(iv) Share of jointly controlled entities’ net income
Profts before income tax	13,098,756	27,367,517
Income tax expense	(3,995,458)	(7,963,388)
Proft after income tax	9,103,298	19,404,129

There were no impairment losses relating to the investments in jointly controlled entities and associates and the Group had no capital commitments or other commitments relating to the jointly controlled entities and associates.

The investments in associates and jointly controlled entities are carried at cost on the Balance Sheet of Treasury Group Limited.

		Consolidated	Consolidated	Treasury Group Limited	Treasury Group Limited
			2008
		2009	Restated	2009	2008
	Notes	$	$	$	$
��
Furniture & fttings
At cost		79,682	104,271	13,091	38,026
Accumulated depreciation		(28,306)	(34,803)	(4,322)	(16,754)
	14(a)	51,376	69,468	8,769	21,272
Offce equipment
At cost		328,373	349,589	215,315	247,241
Accumulated depreciation		(259,713)	(254,723)	(190,585)	(204,977)
	14(a)	68,660	94,866	24,730	42,264

TREASURY GROUP LIMITED 57

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	Consolidated	Consolidated	Treasury Group Limited	Treasury Group Limited
		2008
	2009	Restated	2009	2008
Notes	$	$	$	$
��
Leasehold improvements
At cost	24,563	13,277	21,423	10,137
Accumulated depreciation	(6,677)	(5,261)	(5,044)	(4,633)
14(a)	17,886	8,016	16,379	5,504
Total written down amount	137,922	172,350	49,878	69,040
(A) RECONCILIATIONS
Reconciliations of the carrying amounts of plant and equipment
at the beginning and end of the current fnancial year.
Furniture & fttings
Opening balance	69,468	72,576	21,272	23,932
Additions	12,675	5,561	12,330	—
Disposals	(20,081)	(328)	(20,081)	—
Depreciation expense	(10,686)	(8,341)	(4,752)	(2,660)
Closing balance	51,376	69,468	8,769	21,272
Offce equipment
Opening balance	94,866	127,519	42,264	71,799
Additions	13,987	28,156	3,276	—
Disposals	(5,765)	(10,804)	(5,765)	—
Depreciation expense	(34,428)	(50,005)	(15,045)	(29,535)
Closing balance	68,660	94,866	24,730	42,264
Leasehold improvements
Opening balance	8,016	3,855	5,504	3,855
Additions	21,423	8,458	21,423	5,318
Disposals	(4,953)	—	(4,953)	—
Depreciation expense	(6,600)	(4,297)	(5,595)	(3,669)
Closing balance	17,886	8,016	16,379	5,504
15. INTANGIBLES
Software
At cost	31,709	17,644	8,118	8,118
Accumulated amortisation	(13,320)	(5,175)	(5,383)	(3,560)
15(a)	18,389	12,469	2,735	4,558
(A) RECONCILIATIONS
Reconciliations of the carrying amounts of intangibles
at the beginning and end of the current fnancial year.
Software
Opening balance	12,469	4,724	4,558	4,213
Additions	14,067	10,960	—	2,100
Amortisation expense	(8,147)	(3,215)	(1,823)	(1,755)
Closing balance	18,389	12,469	2,735	4,558

58 ANNUAL REPORT 2009

	Consolidated	Consolidated	Treasury Group Limited	Treasury Group Limited
		2008
	2009	Restated	2009	2008
Notes	$	$	$	$
��
Non-current
Investment in subsidiaries-unlisted at cost	—	—	5,001,943	5,000,202
Investment in jointly controlled entities	—	—	12,275,561	12,282,059
Investment in associates	—	—	149,717	149,717
	—	—	17,427,221	17,431,978
17. TRADE AND OTHER PAYABLES (CURRENT)
Trade payables	432,770	1,019,995	182,257	168,477
Other payables	465,453	996,595	79,662	597,110
Related party payables:
— subsidiaries	—	—	811	—
— jointly controlled entities	2,260,173	1,497,081	—	—
— associates	13,708	26,839	—	—
	3,172,104	3,540,510	262,730	765,587

(a) Fair value

Due to the short term nature of these payables, their carrying value is assumed to approximate their fair value.

(b) Related party payables

��

(c) Interest rate and liquidity risk

Trade and other payables are non-interest bearing. Liquidity risk exposure is not regarded as significant. Trade, other and related party payables are all due within less than 90 days.

party payables are all due within less than 90 days.
	Consolidated		Treasury Group Limited
		2008
	2009	Restated	2009	2008
	$	$	$	$
��
Current
Provision for annual leave, beginning balance	184,940	132,880	112,720	78,560
Provisions during the year	178,502	104,120	103,696	68,321
Annual leave taken	(89,251)	(52,060)	(51,848)	(34,161)
Provision for annual leave, closing balance	274,191	184,940	164,568	112,720
Non-Current
Provision for long service leave, beginning balance	56,250	1,113	56,250	1,113
Provisions during the year	7,800	110,274	7,800	110,274
Long service leave taken	(11,896)	(55,137)	(11,896)	(55,137)
Provision for long service leave, closing balance	52,154	56,250	52,154	56,250

TREASURY GROUP LIMITED 59

��

	Consolidated	Consolidated	Treasury Group Limited	Treasury Group Limited
		2008
	2009	Restated	2009	2008
	$	$	$	$
��
(A) ORDINARY SHARES
Issued and fully paid	29,594,265	30,060,320	29,594,265	30,060,320

Effective 1 July 1998, the Corporations legislation in place abolished the concepts of authorised capital and par value shares. Accordingly the Company does not have authorised capital nor par value in respect of its issued shares.

��

��
		Treasury Group Limited
	2009		2008
	Number		Number
	of shares	$	of shares	$
Balance at beginning of the fnancial year	23,127,023	30,060,320	22,582,591	26,805,890
Issued during the year
— exercise of options	—	—	704,001	4,809,907
— share buy-back	(56,268)	(466,055)	(159,569)	(1,555,477)
Balance at end of the fnancial year	23,070,755	29,594,265	23,127,023	30,060,320

(C) CAPITAL MANAGEMENT

The Company’s capital management policies focus on ordinary share capital. When managing capital, management’s objective is to ensure the entity continues as a going concern as well as to maintain optimal returns to shareholders and benefits to other stakeholders.

Management is constantly reviewing the capital structure to take advantage of favourable costs of capital or high returns on assets. As the market is constantly changing, management may change the amount of dividends to be paid to shareholders or to conduct share buybacks.

During the year ended 30 June 2009, management paid dividends of $9,236,906 (2008: $14,957,784). Management anticipates �� further shares on the market.

The Group does not have any external borrowings.

(D) SHARE OPTIONS

Options over ordinary shares:

During the financial year 1,000,000 options were issued over ordinary shares (2008: 925,000). The options had a weighted average exercise price of $10.00 (2008: $17.64).

At the end of the year there were 2,715,000 (2008: 2,125,000) unissued ordinary shares in respect of which 2,715,000 options (2008: 2,125,000) were outstanding to employees of the Group and jointly controlled entities.

	Consolidated	Consolidated	Treasury Group Limited	Treasury Group Limited
		2008
	2009	Restated	2009	2008
	$	$	$	$
��
Balance at the beginning of the year	21,084,394	18,797,861	15,039,090	10,504,107
Net proft for the year	4,945,543	17,244,317	2,130,477	19,492,767
Deconsolidation of entities no longer controlled	74,984	—	—	—
Dividends	(9,236,906)	(14,957,784)	(9,236,906)	(14,957,784)
Balance at end of year	16,868,015	21,084,394	7,932,661	15,039,090

60 ANNUAL REPORT 2009

	Consolidated	Consolidated	Treasury Group Limited	Treasury Group Limited
		2008
	2009	Restated	2009	2008
	$	$	$	$
��
��
Net unrealised gains reserve
Balance at the beginning of year	—	—	(394,902)	—
Transfer to income statement on disposal of investments	—	—	305,707	—
Transfer to income statement on impairment of
available-for-sale investments	—	—	89,195	—
Net unrealised (losses) / gains on available-for-sale investments	214,327	—	250,034	(564,144)
Tax effect of (losses) / gains on available-for-sale investments	(64,298)	—	(75,010)	169,242
Balance at end of year	150,029	—	175,024	(394,902)
Options reserve
Balance at the beginning of year	2,605,784	2,028,508	2,605,784	2,028,508
Share-based payments	653,069	514,535	653,069	514,535
Share-based payments recharged to related parties	31,927	62,741	31,927	62,741
Balance at end of year	3,290,780	2,605,784	3,290,780	2,605,784
��
Balance at the beginning of year	28,556	—	—	—
Deconsolidation of entities no longer controlled	(28,556)	—	—	—
��	�	��	�	�
Balance at end of year	—	28,556	—	—
Total reserves	3,440,809	2,634,340	3,465,804	2,210,882

Nature and purpose of reserves

Net unrealised gains reserve

The reserve records after tax fair value changes on available-for-sale investments

Options reserve

This reserve is used to record the value of equity benefits provided to employees and Directors as part of their remuneration. Refer to Note 21 for further details of these plans.

��

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries.

statements of foreign subsidiaries.
	Consolidated
		2008
	2009	Restated
	$	$
(G) MINORITY INTERESTS
Interest in earnings	7,508	(193,999)
	7,508	(193,999)
Interest in equity	192,899	3,503,152
	192,899	3,503,152

TREASURY GROUP LIMITED 61

��

20. COMMITMENTS AND CONTINGENCIES

Operating lease commitments

The Group has entered into commercial property leases to meet its office accommodation requirements. These non-cancellable leases have remaining terms of between 1 and 5 years. All leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions.

��

	Consolidated	Consolidated	Treasury Group Limited	Treasury Group Limited
		2008
	2009	Restated	2009	2008
Notes	$	$	$	$
Future minimum rentals:
Minimum lease payments
— not later than one year	358,557	298,463	179,278	175,279
— later than one year and not later than fve years	578,688	732,837	289,344	368,596
Aggregate lease expenditure contracted for at reporting date	937,245	1,031,300	468,622	543,875
Amounts not provided for:
— rental commitments	937,245	1,031,300	468,622	543,875
Total not provided for	937,245	1,031,300	468,622	543,875
Aggregate lease expenditure contracted for at reporting date	937,245	1,031,300	468,622	543,875

Note: (a) Properties under non-cancellable operating leases have been sub-let to controlled entities. The total of future minimum lease payments expected to be received from controlled entities at the reporting date is $468,623 (2008: $487,424).

��

Officer and Executive Option Plan

An Officer and Executive Option Plan has been established where Treasury Group Limited may, at the discretion of the Board of Directors, grant options over the ordinary shares of Treasury Group Limited to Directors, executives and certain members of staff of the consolidated entity. The options are granted in accordance with performance guidelines established by the Board of Directors of Treasury Group Limited, although the Board of Treasury Group Limited retains the final discretion on the issue of the options. Options are granted under the plan for no consideration and carry no dividend or voting rights. When exercisable, each option is �� have to be employed by the consolidated group during the vesting period, otherwise the options are forfeited.

The expense recognised in the Income Statement in relation to this share-based payments plan is $684,996 for the Consolidated Entities (2008: $576,654) and $653,069 (2008: $514,535) for the Parent.

The weighted average exercise price of options granted during the year was $10.00 for the consolidated entity (2008: $17.64) and $10.00 for the Parent (2008: $17.96).

The following table illustrates the number and weighted average exercise prices of and movements in share options outstanding during the year:

		2009		2008
	Number	Weighted average	Number	Weighted average
	of options	exercise price	of options	exercise price
Outstanding at beginning of year	1,565,000	$17.41	907,000	$15.68
— lapsed during the year^	(410,000)	$16.00	(90,000)	$17.00
— granted during the year	1,000,000	$10.00	925,000	$17.64
— exercised during the year	—	—	(175,000)	$10.00
— reduction on termination*	—	—	(2,000)	$7.16
Outstanding at the end of the year	2,155,000	$14.24	1,565,000	$17.41
Exercisable at the end of the year	—	—	—	—

^ During 2009 410,000 options lapsed held by certain key management personnel (2008: 90,000).
Some employees left the employment of the Group during the prior year, but were entitled to retain their options.

62 ANNUAL REPORT 2009

��

Officer and Executive Option Plan (cont.)

The outstanding balance as at 30 June 2009 is represented by:

��
��
��
��
��
�� and 16 December 2014

The fair value of options granted under the officer and executive option plan is estimated on the date of granting using a Binomial option-pricing model applying the following assumptions:

		2009	2008
�	��	��	��
�	��	��	��
�	��	��	��
�	��	��	��
�	��

The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumptions that the historical volatility is indicative of future trends, which may not necessarily be the actual outcome. No other features of options granted were incorporated the measurement of fair value.

Officer and Executive Long Term Incentive Share Plan

A long term incentive share plan has been established by Treasury Group Ltd and its 100% subsidiary Treasury Group Investment Services Ltd, where Treasury Group Ltd may, at the discretion of the Board of Directors, grant deferred shares to Directors and executives. Shares are granted under this plan for no consideration and carry a right to dividends but no voting rights. The shares are granted in accordance with performance guidelines established by the Board of Directors of Treasury Group Ltd. Employees have to be employed by the consolidated entity during the vesting period, otherwise the shares are forfeited.

The expense recognised in the Income Statement in relation to this share-based payment plan is nil for the consolidated entity (2008: $27,756) and nil for the parent entity (2008: $13,430)

The following table illustrates the number and weighted average purchase price of shares purchased under the Officer and Executive Long Term Incentive Share Plan:

		2009		2008
	Number	Share Price	Number	Share Price
	of Shares	when purchased	of Shares	when purchased
Outstanding at beginning of year	29,020	10.00	—	—
— granted during the year	—	—	29,020	10.00
Outstanding at the end of the year	29,020	10.00	29,020	10.00

��

Employee Share Plan

The Employee Share Plan has been established whereby Treasury Group Limited, at the discretion of the Board of Directors, provides the opportunity to employees and Directors to purchase shares in Treasury Group Limited at market value less a discount of 5% to 20%. These shares are purchased via a salary sacrifice arrangement. The shares are held in trust at the employee’s request for a period between 2 and 10 years. Employees have to be employed by the consolidated group while taking part in the plan. There are 23 employees eligible to participate in the plan. Shares acquired under the Employee Share Plan vest immediately. During the year 21,032 (2008: 158,982) shares were purchased under the plan at a weighted average cost of $7.46 (2008: $13.45). The balance as at 30 June 2009 was 142,079 shares (2008: 193,521) of those shares 84,750 (2008: 72,531) were vested. The weighted average cost of all shares is $10.82 (2008: $11.95) per share.

TREASURY GROUP LIMITED 63

��

�� financial year. The total amount of the dividend is $2,307,076 which represents a fully franked dividend of 10 cents per share. The dividend has not been provided for in the 30 June 2009 financial statements.
�� unconditional guarantee in support of the obligations to clients governed under the American Employee Retirement Income Security Act 1974 (“ERISA”) of a wholly owned subsidiary of RARE Infrastructure Limited (“RARE”) and allow that business to maintain the status of a qualified professional asset manager in the United States of America. The guarantee supports unconditionally all liabilities owed by RARE to ERISA clients. The guarantee terminates if RARE ceases to act as an investment adviser in respect to all ERISA clients or if RARE’s shareholders equity meets or exceeds $USD 1,000,000.

23. EARNINGS PER SHARE

23. EARNINGS PER SHARE
	Consolidated
	2009	2008
	$	$
Net proft attributable to ordinary equity holders of the parent	4,953,051	17,244,317
	Number	of shares
Weighted average number of ordinary shares used in calculating basic earnings per share:	23,077,962	22,904,397
Effect of dilutive securities:
Dilutive effect of potential ordinary shares — share options	—	80,407
Adjusted weighted average number of ordinary shares used in calculating diluted
earnings per share	23,077,962	22,984,804
Earnings per share (cents per share)
� ��	��	��
� ��	��	��

Options do not have a dilutive affect on the Earnings per Share calculation due to the exercise price of all outstanding options being in excess of the average share price for the year.

24. KEY MANAGEMENT PERSONNEL DISCLOSURES

��

(i) Directors �� M. Burgess Managing Director, appointed 17 December 2008 D. Cooper Executive Director R. Green Director (non-executive), resigned 12 November 2008 P. Kennedy Director (non-executive) R. Hayes Director (non-executive) (ii) Executives �� R. Sullivan Head of Distribution

There were no changes to key management personnel between reporting date and the date the financial report was authorised for issue.

64 ANNUAL REPORT 2009

24. KEY MANAGEMENT PERSONNEL DISCLOSURES (CONT.)

��

��
	Consolidated		Treasury Group Limited
		2008
	2009	Restated	2009	2008
	$	$	$	$
Short-term	2,522,244	2,606,072	2,235,988	2,128,314
Post employment	81,800	84,130	68,056	68,203
Share-based payments	684,996	821,745	653,069	676,100
Termination benefts	—	—	—	—
Total remuneration	3,289,040	3,511,947	2,957,113	2,872,617

��

30 June 2009	Balance at 1 July 2008	Granted as remuneration	Options exercised	Options lapsed	Balance at 30 June 2009	Total vested and exercisable at 30 June 2009*
Directors �� D. Cooper M. Burgess ^ P. Kennedy R. Hayes Executives �� �� R. Sullivan	� 900,000 — — — �� �� 275,000	� — 1,000,000 — — � � —	� — — — — � � —	� (250,000) — — — �� �� —	� 650,000 1,000,000 — — �� �� 275,000	� — — — — � � —
Total	1,565,000	1,000,000	—	(410,000)	2,155,000	—
30 June 2008	Balance at 1 July 2007	Granted as remuneration	Options exercised	Options lapsed	Balance at 30 June 2008	Total vested and exercisable at 30 June 2008*
Directors �� D. Cooper R. Green # P. Kennedy R. Hayes Executives �� E. Jurgeleit �� R. Sullivan	� 400,000 — — — �� 90,000 �� —	� 500,000 — — — �� — �� 275,000	� — — — — � — � —	� — — — — � (90,000) � —	� 900,000 — — — �� — �� 275,000	� — — — — � — � —
Total	730,000	925,000	—	(90,000)	1,565,000	—

Options are exercisable once vested
Resigned during the year
^ Appointed during the year

TREASURY GROUP LIMITED 65

��

24. KEY MANAGEMENT PERSONNEL DISCLOSURES (CONT.)

��

30 June 2009 Ordinary shares held in Treasury Group Ltd (number)	Balance 1 July 2008	Granted as remuneration	On exercise of options	Net change other#	Balance 30 June 2009
Directors �� M. Burgess R. Green^ D. Cooper P. Kennedy R. Hayes Executives �� �� R. Sullivan	�� — 1,465,000 633,000 93,708 — �� �� 16,122	� — — — — — � � —	� — — — — — � � —	�� — (1,465,000) — 27,270 — � � —	�� — — 633,000 120,978 — �� �� 16,122
Total	4,910,897	—	—	(1,394,530)	3,516,367

^ Resigned during the year

In the above table, net change other is comprised of shares in Treasury Group Limited acquired or disposed of during the year by key management personnel and for persons who are no longer considered key management personnel the change in their relevant shareholding.

30 June 2008 Ordinary shares held in Treasury Group Ltd (number)	Balance 1 July 2007	Granted as remuneration	On exercise of options	Net change other#	Balance 30 June 2008
Directors �� R. Green D. Cooper P. Kennedy R. Hayes Executives �� E. Jurgeleit �� R. Sullivan	�� 1,465,000 633,000 60,000 — �� — �� —	� — — — — � — �� 16,122*	� — — — — � — � —	�� — — 33,708 — �� — �� —	�� 1,465,000 633,000 93,708 — �� — �� 16,122
Total	4,842,077	29,020	—	39,800	4,910,897

The shares were issued under a long term incentive plan with a vesting date of 12 March 2011. All equity transactions with Key Management Personnel other than those arising from the exercise of remuneration options have been entered into under terms and conditions no more favourable than those the entity would have adopted if dealing at arm’s length.

(E) TRANSACTIONS WITH DIRECTOR-RELATED ENTITY

Details of the transactions with Director-related entities are set out in Note 26. All transactions were conducted on commercial terms.

��

No loans have been advanced to key management employees at any stage during the financial year ended 30 June 2009 (2008: $Nil).

66 ANNUAL REPORT 2009

	Consolidated	Consolidated	Treasury Group Limited	Treasury Group Limited
		2008
	2009	Restated	2009	2008
	$	$	$	$
25. AUDITORS’ REMUNERATION
Auditor of Parent entity(Deloitte Touche Tohmatsu)
Amounts received or due and receivable by Deloitte Touche Tohmatsu:
— an audit or review of the fnancial report of the entity and any
other entity in the consolidated group	84,500	10,329	72,000	—
— non-audit services to the entity and any other entity in the
consolidated group	4,440	—	—	—
	88,940	10,329	72,000	—
Other auditor of Parent entity��
— an audit or review of the fnancial report of the entity and
any other entity in the consolidated group	21,600	121,935	—	94,500
— tax compliance*	—	11,525	—	11,525
	21,600	133,460	—	106,025

Non-audit services to other auditors are not required to be disclosed.

26. RELATED PARTY DISCLOSURES

The consolidated financial statements include the financial statements of Treasury Group Limited and the controlled entities in the following list:

26. RELATED PARTY DISCLOSURES The consolidated fnancial statements include the fnancial statements of Treasury Group Limited and following list:	the controlled	entities in the
	Percentage of	equity interest
	held by the consolidated entity
		2008
	2009	Restated
	%	%
Companies
Treasury Capital Management Pty Ltd	100	100
Treasury Group Investment Services Ltd	100	100
Treasury Group Nominees Pty Ltd	100	100
Funds
��	��	��
��	��	��
��	��	�
��	��	�
��	�	��
��	�	��

During the year, management deemed that these are not subsidiaries and are therefore adjusted as available for sale investments.

��

�� The Consolidated Entity has seeded a number of funds during the current and prior years.

TREASURY GROUP LIMITED 67

��

26. RELATED PARTY DISCLOSURES (CONT.)

Transactions with jointly controlled entities

Service fees

During the year, Treasury Group Limited and its wholly-owned controlled entity, Treasury Group Investment Services Limited provided administrative services to jointly controlled entities. Dealings were on commercial terms and conditions. Details of service fees and receivables at reporting date are disclosed in Note 5 and Note 9 to the financial report respectively.

Dividend

Dividends received and receivable at reporting date are disclosed in Note 5 and Note 9 to the financial report respectively.

Loans

Loans advanced by Treasury Group Limited to jointly controlled entities are with a fixed repayment date once repayment clause have been triggered. Interest on the loans is capitalised at commercial rates unless repayment clauses have been triggered.

During the year, Treasury Group Limited provided $120,000 in additional loans to jointly controlled entities (2008: $901,671) and $158,345 (2008: $1,565,087) in repayments were received, repaying the outstanding loan. Capitalised interest to jointly controlled entities during the year was $333,523 (2008: $285,646). Details of interest income and the amount remaining outstanding at year-end are disclosed in Note 5 and Note 12 to the financial report respectively.

Sub-let of operating lease

In the prior year property under operating lease was sub-let to jointly controlled entities.

��

�� the financial report.

Transactions with associates

Service fees

During the year, a controlled entity provided administrative services to associates. Dealings were on commercial terms and conditions. Details of service fees and receivables at reporting date are disclosed in Note 5 and Note 9 to the financial report respectively.

Loans

During the year, Treasury Group Limited provided $943,000 in additional loans to associates (2008: $1,130,000). During the year, capitalised interest was $150,693 (2008: $52,725). The existing loans have been in accordance with a working capital loan facility and are on a long-term basis. The loan term for repayment is 10 years upon the debtor reaching a breakeven profit position as defined in the loan agreement. No repayments were received from associates during the year (2008: $nil).

The carrying amount of non current loans and receivables at the balance sheet date was $7,617,143 (2008: $6,567,050) after an impairment loss of $497,123 (2008: nil) was recognised during the current financial year. Details of the impairment loss calculation are provided in note 12.

In accordance with the loan agreements, interest on the loans was capitalised at commercial fixed rates. Details of interest income are disclosed in Note 5 and Note 12 to the financial report.

��

The consolidated entity operates in one business segment, being fund management services, solely in Australia.

68 ANNUAL REPORT 2009

DIRECTORS’ DECLARATION

In accordance with a resolution of the Directors of Treasury Group Limited, I state that:

In the opinion of the Directors:
(a) the financial statements and notes of the Company and of the consolidated entity are in accordance with the Corporations Act 2001, including:
- (i) giving a true and fair view of the Company’s and Consolidated Entity’s financial position as at 30 June 2009 and of ��
- ��
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
This declaration has been made after receiving the declarations required to be made to the Directors in accordance with section 295A of the Corporations Act 2001 for the year ended 30 June 2009.

On behalf of the Board

==> picture [113 x 34] intentionally omitted <==

�� Chairman

Sydney, 26 August 2009

TREASURY GROUP LIMITED 69

INDEPENDENT AUDIT REPORT

==> picture [109 x 24] intentionally omitted <==

Deloitte Touche Tohmatsu A.B.N. 74 490 121 060 Grosvenor Place 225 George Street Sydney NSW 2000 PO Box N250 Grosvenor Place Sydney NSW 1217 Australia

DX 10307SSE Tel: +61 (0) 2 9322 7000 Fax: +61 (0) 2 9322 7001 www.deloitte.com.au

Independent Auditor’s Report to the Members of Treasury Group Limited

Report on the Financial Report

We have audited the accompanying financial report of Treasury Group Limited, which comprises the balance sheet as at 30 June 2009, and the income statement, cash flow statement and statement of changes in equity for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year as set out on pages 25 to 72.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation and fair presentation of the 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 control relevant to the preparation and fair presentation of the 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. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements , that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, comply with International Financial Reporting Standards.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

==> picture [82 x 19] intentionally omitted <==

Liability limited by a scheme approved under Professional Standards Legislation.

70 ANNUAL REPORT 2009

Pag 2 e

==> picture [120 x 26] intentionally omitted <==

Auditor’s Independence Declaration

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 .

Auditor’s Opinion

In our opinion:

(a) the financial report of Treasury Group Limited is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2009 and of their performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001 ; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 2.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 11 to 17 of the directors’ report for the year ended 30 June 2009. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Audit Standards

Auditor’s Opinion

In our opinion the Remuneration Report of Treasury Group Limited for the year ended 30 June 2009, complies with section 300A of the Corporations Act 2001.

==> picture [150 x 31] intentionally omitted <==

DELOITTE TOUCHE TOHMATSU

==> picture [78 x 30] intentionally omitted <==

A H Young Partner Chartered Accountants Sydney, 26 August 2009

TREASURY GROUP LIMITED 71

��

Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows. ��

��

�� ��
		Ordinary shares
Number of holders		Number of shares
��	��	��
��	��	��
��	��	��
��	��	��
100,001 and over	26	15,390,049
	2,949	23,070,755
The number of shareholders holding less than a marketable parcel of shares are:	52	2,776

(B) TWENTY LARGEST SHAREHOLDERS (AS AT 11 AUGUST 2009)

The names of the twenty largest holders of quoted shares are:

The	names of the twenty largest holders of quoted shares are:
		Listed	ordinary shares
		Number of shares	Percentage of ordinary shares
1	AKAT Investments Pty Ltd	3,133,940	13.58
2	Squitchy Lane Holdings Pty Ltd	2,401,500	10.41
3	HSBC Custody Nominees (Australia) Limited	1,346,207	5.84
4	Mini Investments Pty Ltd	1,010,000	4.38
5	Aust Executor Trustees NSW Ltd	858,583	3.72
6	RBC Dexia Investor Services Aus Nominees Pty Ltd	850,164	3.69
7	Mr Timothy Ryan	840,000	3.64
8	Mr David Cooper	633,000	2.74
9	ANZ Nominees Limited	597,649	2.59
10	Perpetual Trustees Consolidated Limited	591,187	2.56
11	Top Pocket Pty Ltd	511,390	2.22
12	Mr Michael Brendan de Tocqueville	415,000	1.80
13	JP Morgan Nominees Aus Ltd	391,218	1.70
14	Banson Nominees Pty Ltd	370,313	1.61
15	Citicorp Nominees Pty Ltd	327,571	1.42
16	Moat Investment Pty Ltd	251,760	1.09
��	��	��	��
��	��	��	��
19	Penswood Pty Ltd	199,000	0.86
20	National Nominees Ltd	190,658	0.83
		15,394,140	66.73%

(C) SUBSTANTIAL SHAREHOLDERS

The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations Act 2001 are:

2001 are:
	Number of Shares
Anton Tagliaferro and AKAT Investments Pty Ltd	3,133,940
��	��
Wasatch Advisers, Inc.	1,153,967
��

All ordinary shares (whether fully paid or not) carry one vote per share without restriction.

72 ANNUAL REPORT 2009

CORPORATE INFORMATION

ABN 39 006 708 792

BANKERS

Westpac Banking Corporation

DIRECTORS

M. Fitzpatrick (Chairman)

M. Burgess (appointed 17 December 2008)

D. Cooper

R. Green (resigned 12 November 2008)

P. Kennedy R. Hayes

CHIEF FINANCIAL OFFICER Joseph Ferragina

COMPANY SECRETARIES Reema Ramswarup Joseph Ferragina (resigned 26 August 2008)

SHARE REGISTER

Computershare Investor Services Pty Ltd 452 Johnston Street Abbotsford, Victoria, 3067 Phone (03) 9415 - 5000

AUDITORS Deloitte Touche Tohmatsu INTERNET ADDRESS www.treasurygroup.com

REGISTERED OFFICE Level 5 50 Margaret Street Sydney, NSW, 2000 Phone (02) 8243 - 0400 Facsimile (02) 8243 - 0410

AI assistant

PACIFIC CURRENT GROUP LIMITED — Annual Report 2009

65526_rns_2009-10-11_f03854b4-e12c-4f2f-a3b9-3db074217c0d.pdf

FOCUSING ON INVESTMENT TALENT

CONTENTS

AGM

INTRODUCTION

TREASURY GROUP’S STRATEGY IS TO GENERATE SHAREHOLDER VALUE BY PARTNERING WITH OUTSTANDING INVESTMENT PROFESSIONALS IN THE BOUTIQUE FUNDS MANAGEMENT SECTOR.

ABOUT US

OUR BUSINESS IS TO SUPPORT TALENTED FUND MANAGERS IN THEIR OWN BOUTIQUE FUNDS MANAGEMENT BUSINESSES.

COMPANY OVERVIEW

VISION

MISSION

PROFILE

VALUE

COMPANY STRUCTURE

CHAIRMAN’S REPORT

NPAT – $4.946 MILLION NORMALISED NPAT – $7.515 MILLION FULL YEAR FRANKED DIVIDEND OF 20 CENTS PER SHARE

RESULTS

OUTLOOK

MANAGING DIRECTOR’S REPORT

REVIEW OF 2009 FINANCIAL YEAR

INVESTORS MUTUAL LIMITED (IML)

GLOBAL VALUE INVESTORS LIMITED (GVI)

CONCLUSION

MANAGEMENT

CHRISTINE FELDMANIS

ROB SULLIVAN

JOSEPH FERRAGINA

DIRECTORS’ REPORT

DIRECTORS

MICHAEL FITZPATRICK,

MARK BURGESS,

DAVID COOPER,

PETER KENNEDY,

(Non-Executive Director) B.Ec. L.L.M.

REUBERT HAYES,

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COMPANY SECRETARIES

REEMA RAMSWARUP,

BA (Justice Administration)

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Corporate structure

Nature of operations and principal activities

Employees

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Funds Management

Funds Management, Administration & Compliance Services

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EARNINGS PER SHARE

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CAPITAL STRUCTURE

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RISK MANAGEMENT

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SHARE OPTIONS

UNISSUED SHARES

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REMUNERATION REPORT (AUDITED)

REMUNERATION PHILOSOPHY

REMUNERATION COMMITTEE

REMUNERATION STRUCTURE

Structure

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Objective

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Structure

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Structure

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Objective

Structure

PACIFIC CURRENT GROUP LIMITED Annual Report 2009

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INCOME STATEMENT ��

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