2010 perpetual annual report

8/2/2019 2010 Perpetual Annual Report

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P e r p e t u a l L i m i t e d A B N 8 6 0 0 0 4 3 1 8 2 7



Final dividend payment 28 September 2010

Annual General Meeting 26 October 2010

Interim proit and dividend announcement 23 February 2011

P .

shareholder calendar



Five year proile .........................................................................................................02

Five year results at a glance ......................................................................03

Chairman and CEO Report ........................................... ..................................04

Message rom the Chairman-elect ............................................. ........... 07

Business unit review......................................... ................................................. .. 08

Board and management ................................................. .................................... 14

Directors’ Report ............................................. ................................................. ...........19

− Corporate Responsibility Statement ................................................ 25

− Remuneration Report ......................................................................................34

Management’s Discussion and Analysis o Financial

Condition and Results o Operations (MD&A) ..............................61

Financial Statements........................................................... ................................ 88

Securities exchange and investor inormation ......................... 146

Contents



fve year

profle

Perpetual Limited and its controlled entities’ comparative perormance or inancial years 2006 to 2010 inclusive.

2006 2007 2008 2009 2010

Ttal revenue1

Underlying EBITDA2

Underlying prit bere tax3

Underlying prit ater tax (UPAT)3

Net prit ater tax (NPAT)4

Earnings per share – UPAT5

Earnings per share – NPAT5

Return n average sharehlders’ equity – UPAT6

Return n average sharehlders’ equity – NPAT7

Dividend per share – rdinary8

Dividend per share – special8

Ttal sharehlders’ equity at 30 June

Capital expenditure

Market capitalisatin

N. shares n issue – weighted average9

N. shares n issue at 30 June9

Share price at 30 June

Share price range r year

$m

$m

$m

$m

$m

cents

cents

%

%

cents

cents

$m

$m

$m

m

m

$

$ lw$ high

402.8

206.6

178.0

122.4

135.3

300

332

40.8

45.1

326

100

331.0

26.4

2,977

40.8

40.7

73.15

57.6074.00

466.2

238.0

206.9

145.3

182.1

353

442

43.2

54.2

360

-

341.0

17.9

3,234

41.2

41.2

78.51

67.8084.20

495.7

227.1

193.6

133.5

128.8

321

309

40.7

39.3

330

-

314.4

17.7

1,794

41.6

42.0

42.77

40.9583.27

375.1

135.7

98.2

65.7

37.7

156

89

21.8

12.5

100

-

290.0

14.0

1,214

42.2

42.5

28.55

21.6052.44

422.3

152.0

107.7

72.8

90.5

169

211

22.4

27.9

210

-

361.0

11.8

1,227

43.0

43.4

28.26

25.3641.15

1 Excludes incme rm structured investments.

2 EBITDA represents earnings bere interest, taxatin, depreciatin, amrtisatin intangible assets, equity remuneratin expense and signicant items.

3 Excludes signicant items and csts majr strategic initiatives.

4 Attributable t equity hlders Perpetual Limited.

5 Diluted earnings per share calculated using the weighted average number rdinary shares and ptential rdinary shares n issue.

6 Calculated using underlying prt ater tax.

7 Calculated using net prt ater tax.

8 Dividends declared with respect t the nancial year.

9 Includes rdinary shares and ptential rdinary shares.


http://slidepdf.com/reader/full/2010-perpetual-annual-report 5/152PERPETUAL LIMITED AND ITS CoNTRoLLED ENTITIES | 3

Earnings per share – NPAT v dividendsor year ended 30 JuneReturn on equity – NPATor year ended 30 June

Net proft ater tax or year ended 30 June

Underlying proft ater tax or year ended 30 June

fve year results at a glance

$ m i l l i o n

2007

145.3

2008

133.5

2009

65.7

2010

72.8

2006

122.4

p e r c e n t

2007

54.2

2008

39.3

2009

12.5

2010

27.9

2006

45.1

$ m i l l i o n

2007 2008 2009 20102006

182.1

128.8

37.7

90.5

135.3

c e n t s

p e r s h

a r e

2007 2008 2009 20102006

442

360

309

330

89

100

211

210

332

326

Earnings per share

Dividends



Surce: Australian Securities Exchange

Rbert Savage, AM (let) and David Deverall.

4

We are pleased t reprt that r the year t 30 June 2010,

Perpetual’s perrmance and nancial psitin imprved

cnsiderably ver the previus year.

our net prt increased substantially, allwing us t mre than

duble ur dividend payments t sharehlders, and the duble-

digit grwth ur underlying prt bdes well r the uture.We urther strengthened ur already strng balance sheet and

cntinued t reduce ur risk prle.

We als cntinued t invest in ur peratinal capability, the

quality ur client services, ur adviser base, and ur brand.

At the same time, we have made changes t ensure all ur

businesses are clearly cused n meeting the requirements

their key client segments.

Having saely steered thrugh the glbal nancial crisis by

cntrlling csts, reducing risk and imprving ur nancial

strength, we have emerged in gd shape t execute ur visin:

‘t be the leading prvider wealth management services t

nancially successul investrs and their advisers, and t be theleading crprate trustee’.

Times change are times pprtunity and we are cndent

we have the experience, values and capability t nce again

benet rm the majr changes underway in the sectrs in which

we perate.

In the eighties and nineties, we transrmed rm a traditinal

trustee huse int ne Australia’s leading und managers

and played a rmative rle in the develpment the cuntry’s

securitisatin industry. In the rst decade this century, we have

becme a brad-based wealth manager, prviding specialised

prducts, services and advice r peple wh want t take activerespnsibility r their nancial wellbeing.

We have develped ur Private Wealth business t er premium

advice and services specically r nancially successul

Australians and their amilies. In additin t strategic nancial

planning and investment advice, we prvide estate planning,

philanthrpic services, and duciary services, where we prtect

clients’ interests and assets as trustee r custdian.

our Crprate Trust business has als expanded its ering

t nancial services cmpanies t include mrtgage

prcessing services.

Improved operating environmentover the past year, we experienced a much imprved perating

envirnment cmpared t the prir year.

Bth equity and credit markets cntinued t imprve thrugh the

rst three quarters the year. In the urth quarter, cncerns

ver gvernment debt levels, particularly in Eurpe, caused

renewed market instability, althugh this subsided smewhat

as the nancial year clsed.

Retail investr cndence gradually imprved during mst the

year but remains ragile. While new infws remained subdued,

there was sme mvement by investrs rm risk-averse cash

and xed incme unds twards managed unds with higher

ptential returns. These mre actively managed unds als

generate higher revenue r us.

The glbal nancial crisis will nt be rgtten by investrs

r sme time. The cncerns abut svereign debt that

caused glbal market instability in the nal quarter reminded

investrs that its ater-eects will impact gvernment ecnmic

management, regulatin and markets r years t cme.

chairman

and ceo report



net prt ater tax, in keeping with ur plicy paying

dividends t sharehlders between 80 and 100 per cent

net prt ater tax n an annualised basis.

Underlying prt ater tax r the year, which excludes signicant

items such as the EMCF recveries, was $72.8 millin, a slid

11 per cent increase n the previus year.

The largest infuence n ur revenue is the perrmance

the Australian sharemarket, which directly impacts ur unds

under management and unds under advice. As at 30 June 2010,

we calculate that each 1 per cent mvement in the Australian

All ordinaries Index aects ur annualised revenue by$2 t $2.5 millin.

Strnger markets in the rst three quarters the year saw average

unds under management r the year increase 7 per cent ver

the prir year. Due t market declines in the urth quarter as

well as net utfws, year-n-year t 30 June 2010, unds under

management nly increased 3 per cent t $26.9 billin.

As investrs started t shit t asset classes with higher ptential

returns, cash and xed interest unds saw a $1.4 billin net

utfw. Similarly, quantitative unds saw a general trend away

rm this type investment apprach.

* Attributab le t Perpetual Limited rdinary equity hlders.

In this envirnment, clients will preer t deal with wealth

management institutins that are nancially strng in their wn

right, with established reputatins r managing their clients’

mney and prtecting their interests. Perpetual’s track recrd

thrugh the glbal nancial crisis, and ver the past 124 years,

means we are well placed t benet.

Securitisatin markets r residential mrtgage backed securities,

in which ur crprate trustee business is the market leader, saw

a tentative rebund in activity, althugh it is still at much reduced

levels when cmpared t thse prir t the glbal nancial crisis.

Results overview The Grup’s net prt ater tax* r the year ended

30 June 2010 was $90.5 millin, a 140 per cent increase n

the previus year. This included a $20 millin ater tax recvery

past lsses rm the Exact Market Cash Fund (EMCF).

our return n equity r the year based n net prt ater tax

was 27.9 per cent, up rm 12.5 per cent in the prir year.

We have been able t increase dividend payments t

sharehlders t 210 cents per share r the year, cmpared

t 100 cents the previus year. This represents 100 per cent

3,250

3,500

3,750

4,000

4,250

4,500

4,750

5,000

5,250

Sep 2008 Dec 2008 Mar 2009 Jun 2009 Sep 2009 Dec 2009 Mar 2010 Jun 2010

FY09 Avg All Ords

FY09

Spot close All Ords

FY10 Avg All Ords

FY10

Avg All Ords

I n d e x

Perpetual’s perormance

and inancial positionimproved considerablyover the previous year.

Australian sharemarket July 2008 - June 2010

S&P ASX All ordinaries Price Index 1 July 2008 t 30 June 2010.



This shit in asset preerences had a psitive eect n ur

active share unds, which recrded $600 millin in net infws,

a $1.2 billin turnarund rm the $600 millin net utfws

these unds recrded last year.

our Private Wealth average unds under advice r the year

increased 17 per cent. Year-n-year t 30 June 2010, they

increased 22 per cent t $8.3 billin, including $900 millin

unds rm the acquisitin the advice businesses, Grsvenr

and Frdham.

Crprate Trust’s securitised unds under administratin

decreased by 13 per cent t $210 billin at 30 June 2010 as the

run- rm the existing prtli residential mrtgage backed

securities (RMBS) was nt cmpensated r by the vlume rm

new issues. Hwever, issuance increased ver the prir year,

including the rst new issues since the glbal nancial crisis

undertaken withut Australian Gvernment supprt.

Grup expenses r the year increased ver the previus yearby $41.7 millin r 15 per cent t $318.6 millin. This increase

was predminantly the result the acquisitin nancial advice

businesses t better psitin Private Wealth, the expansin ur

mrtgage services capability, and higher perrmance-related

sta remuneratin linked t ur imprved results.

over the curse the year, we urther strengthened ur balance

sheet by increasing ur equity and cash resurces. We als

cntinued t reduce ur expsure t capital guaranteed and

structured prducts.

Investing in uture growthDuring the year we cntinued t invest in imprving the systems,

prcesses and stang that mst impact the quality ur client

services. In Private Wealth, ur new client management system

imprved ur eciency and ability t prvide a mre seamless

service and a brader range erings.

We als cntinued t execute n ur strategy t acquire and

integrate adviser grups with prven capabilities and track

recrds in servicing key segments the high net wrth market.

Melburne-based Frdham Grup, which prvides nancial

advice and services t private business wners, expands ur

specialist expertise and presence in Victria. Sydney-based

Grsvenr Financial Services is predminantly serving medical

and legal pressinals. Bth these grups are being integratedint ur Private Wealth business.

In Perpetual Investments, we have brught tgether ur

Australian and internatinal equities teams int a single business

unit. This will imprve business eciencies and deepen the

expertise and resurces available t ur und managers.

We urther blstered ur investment team, which remains ne

the mst experienced and stable in the industry, and has a clear

and disciplined investment prcess cused n quality, value and

risk. This means clients can rely n us t manage their investments

the way they expect, whatever the market cnditins.

In Crprate Trust, we have invested in sta and technlgy t meet

the increased demand r ur mrtgage prcessing business.

our brand remains a great strength and was again the unds

management brand rated highest by advisers. We have

cntinued t invest in targeted advertising campaigns t increase

awareness ur credentials and erings amngst prspective

clients and their advisers.

Regulatory environmentFllwing the extensive Gvernment reviews int taxatin,

superannuatin and nancial advice, we are hpeul that the

prpsed rerms reslve sme the key issues that have

undermined the cndence sme retail investrs in recent years.

We supprt the plans r strnger pressinal standards and

transparent remuneratin r nancial advisers, including the

phasing ut cmmissins by 2012. Likewise, plans t increase

eciencies acrss the industry thrugh mre standardised

prcesses are welcmed.

These initiatives are in line with the lngstanding principlesat the cre Perpetual’s apprach t nancial advisry services.

our expertise in duciary duties wuld als cnrm us as a

thught leader in an industry where such duties culd nd

wider applicatin.

The prpsal t increase mandatry emplyer superannuatin

cntributins t 12 per cent salary by 2020 and establish

MySuper as a deault und wuld help ensure minimum

standards r everyne wh cntributes t superannuatin,

even i they are nt actively engaged in hw their retirement

savings are managed.

Hwever, ur expertise is primarily directed at peple wh wish

t take a mre active apprach t prviding r their retirement,

r example thrugh sel managed super unds and actively

managed investments.

We believe Australia’s market r quality nancial advice and

active wealth management will cntinue t grw strngly in

cming years as mre peple chse t take cntrl their

wn nancial wellbeing. This is clearly illustrated by the dramatic

grwth in sel managed super unds, nw the largest sectr

superannuatin by assets, and an area in which we er

specialist expertise.

Leadership renewal This is ur nal annual reprt as Chairman and CEo respectively,

ater lengthy tenures in these rles. We believe it is an apprpriate

time t renew bth the Bard and senir leadership team.

Perpetual is in a strng nancial psitin, having successully

negtiated the market turmil recent years. At the same time,

we have sharpened ur peratinal capability and market cus,

and with the impending changes t the industry ahead, it is an

ideal time r a new Chairman and CEo t take charge.

Fllwing ur Annual General Meeting n 26 octber 2010,

Mr Peter Sctt will becme the new Chairman yur Bard.

Mr Sctt has utstanding credentials r this rle. He has

an extensive backgrund in nancial services, and wealthmanagement in particular. He was previusly chie executive

cer majr wealth manager MLC, and held senir

management rles at bth Natinal Australia Bank and

Lend Lease.



Perpetual operates through three

business units, each o which ocuses

on a specifc fnancial services sector:

Perpetual Investments on unds

management, Private Wealth on

fnancial advice, and Corporate Trust

on trustee services.

CorporateTrust

PrivateWealth

PerpetualInvestments

52%

24%

24%

Perpetual Investments

PerPetual Investments Is one o

australIa’s most hIghly regarded und

managers, oerIng a broad range

o Investment, suPerannuatIon and

retIrement Income Products. We have a

strong Investment caPabIlIty In all major

asset classes, IncludIng australIan and

InternatIonal equItIes, ProPerty securItIes,multI-sector and multI-manager unds,

mortgages, Ixed Income and cash.

We actively manage investment prtlis based n ur intensive

analysis quality, value and risk. While prices can fuctuate

greatly with prevailing market sentiment, we believe that, ver the

lng term, they shuld refect undamental value. In Nvember

2009 Perpetual Investments signed the United Natins Principles

r Respnsible Investment, which means we rmally incrprate

envirnmental, scial and gvernance actrs as part ur

investment decisin-making and wnership practices.

Quality investment management requires highly trainedpressinals, clear principles and prcesses, and eective

teamwrk. over the past year, we have again retained all ur

key investment managers and cntinued t attract talented new

sta wh value ur reputatin as a und manager with strng

principles and prven track recrd.

Average unds under management r the year increased

7 per cent ver the prir year due t strnger markets in the rst

three quarters. Due t market declines in the urth quarter as

well as net utfws, year-n-year t 30 June 2010, unds under

management nly increased 3 per cent t $26.9 billin.

Revenue r the year increased 6 per cent t $216.9 millin, mainly

due t increased revenue rm actively managed equity unds.

Perpetual Investments’ prt bere tax r the year ended

30 June 2010 was $72.1 millin, a 22 per cent increase

n the previus year.

As the glbal nancial system stabilised and the wrst ears a

glbal ecnmic recessin subsided, the past year saw investrs

and their advisers gradually becme mre cndent abut

Results or the year ended 30 June

2009

$m

2010

$m

change

$m

change

%

Revenues 203.0 216.9 13.9 7%

Expenses (144.0) (144.8) (0.8) (1%)

Proit beore tax 59.0 72.1 13.1 22%

business unit

review

Contribution to 2010 underlying proit beore tax



making investment decisins r the lnger term. This imprving

cndence was smewhat dampened in the June quarter, when

markets reacted negatively t cncerns abut the nances andcredit-wrthiness sme Eurpean cuntries.

The change in investr and adviser attitudes was clearly refected

in ur net fws r the year. While ur quantitative equity unds

recrded net utfws $1 billin, ur actively managed equity

unds recrded net infws $600 millin.

Net utfws rm cash and xed interest unds were $1.4 billin,

as investrs mved mney rm risk-averse cash investments t

asset classes with ptentially higher returns. Mst the cash

and similar unds generate lwer ee margins than ur mre

actively managed unds.

While there has been a brad market trend ver the past decade

twards passive investment strategies, particularly index unds,

we believe demand r actively managed unds will cntinue

but investrs will be mre selective in chsing a prven,

quality manager.

our business cuses n ur key client segments – institutins,

high net wrth and mass afuent clients and their respective

advisers, and direct investrs.

Fr high net wrth clients and their advisers, we will cntinue

t develp specialised unds, able t meet particular investment

bjectives, such as the Pure Value Share Fund, Glbal Resurces

Fund and Diversied Incme Fund.

Fr the mass afuent client segment, ur majr equity, cash

and xed incme unds are available thrugh Perpetual, as well

as thrugh a brad range adviser grups and ther nancialinstitutins. Similarly, ur WealthFcus platrm ers a brad

range investment chices rm Perpetual and ther leading

und managers.

We enjy strng relatinships with many institutins and are able

t cnstruct and manage custmised prtlis t meet their

specic risk and return bjectives. Fr example, ver the past

year we develped a sustainable investment und specically r

ne Australia’s largest super unds and wn ther substantial

mandates r cncentrated equities and smaller cmpanies.

During calendar 2010, the Australian and internatinal equities

teams were brught tgether int a single business unit s theycan share resurces and expertise in bth business management

and investment.

over the past year, we invested cnsiderable resurces in ur

systems and prcesses t imprve eciency and the service ur

clients receive – whether this is receiving tax statements as sn

as pssible ater year-end, reduced call centre waiting times r a

mre inrmative and easier-t-use website.

In managing investments, there is ne thing we never lse sight

: the act that it is nt ur mney we are managing, it is ur

clients’ mney, entrusted t us t manage n their behal.

Annualised

returns

Industrial

Share Fund

Australian

Share Fund

Small Companies Fund Concentrated Equity

Fund

International

Share Fund

1 year + 0.07% + 5.90% + 14.64% + 2.80% - 0.36%

3 years + 4.07% + 4.13% + 6.13% + 5.83% + 2.43%

5 years + 2.57% + 2.53% + 4.17% + 3.76% + 1.20%

7 years + 2.40% + 2.66% + 2.49% + 2.68% N/A

10 years + 4.46% + 4.21% + 8.28% + 5.06% N/A

Grss utperrmance per annum against benchmarks t end June 2010.

Perpetual Investments – unds’ outperormance



Private Wealth

PrIvate Wealth Is the grouP’s sPecIalIstInancIal servIces and advIce busIness,

ProvIdIng a broad range o servIces

to InancIally successul australIans

and theIr amIlIes. We take a holIstIc

aPProach to ProvIdIng advIce, WhIch

covers strategIc PlannIng, Investment

strategy, suPerannuatIon and retIrement

Income, estate PlannIng, tax, and

Personal Insurance.

Drawing n ur experience as a trustee r generatins

Australians, we als prvide a range trustee and duciary

services t help peple prtect and manage their assets and

incme in their lietime and beynd. We are able t establish and

manage an array trusts including private trusts, testamentary

trusts, philanthrpic trusts, and special purpse trusts t manage

cmpensatin settlements.

We are ne Australia’s largest managers philanthrpic

trusts, with ver $1.1 billin in unds under management n

behal 450 trusts.

our duciary services als include estate planning and

administratin, enduring pwers attrney, and businesssuccessin planning.

With the grwth in sel managed super unds and the need r estate

planning as the ppulatin ages, the market r these duciary

services is set t expand strngly in cming years and we believe

there are exciting pprtunities t market ur services thrughexternal adviser grups and ther pressinal reerral netwrks.

The past ew years have been challenging r many ur clients

as their investments have been subject t the intense vlatility

nancial markets. Hwever, ur prudent, lng-term apprach

t investing helped shield them rm the wrst the dwnturn

and enabled them t benet rm the market recvery. We cus

strngly n ensuring we understand ur clients’ circumstances

and bjectives, and in turn they clearly understand ur advice

and the nging service they will receive.

Average unds under advice r the year increased 17 per cent.

Year-n-year t 30 June 2010, it increased 22 per cent t

$8.3 billin, including $900 millin unds rm the acquisitin advice businesses Grsvenr and Frdham.


2009

$m

2010

$m

change

$m

change

%

Revenues 85.7 111.6 25.9 30%

Expenses (56.6) (79.0) (22.4) (40%)

Proit beore tax 29.1 32.6 3.5 12%

We have become a broad-based wealth manageror people who want to take active responsibilityor their fnancial wellbeing.



Revenue increased by $25.9 millin t $111.6 millin, 30 per cent

up n the prir year. In additin t increased ees earned rm

unds under advice, revenue was blstered by revenue rm theacquired advice businesses, which cntributed t a $10 millin

increase in ee revenue r accunting and tax services.

Private Wealth’s prt bere tax r the year increased by 12 per

cent t $32.6 millin. This refected the imprvement in investment

markets, set by investment in the business as well as the

acquisitin and integratin csts the acquired businesses.

over the past year, we cntinued t invest in imprving the

service we prvide t clients acrss all areas the business.

We hired new client acing sta, including advisers, and added

substantial capacity and specialist expertise in accunting and

taxatin services, and strategic cnsulting. We als urther

strengthened ur investment research team with a number

highly experienced pressinals and enhanced ur equities

selectin and mdel prtli cnstructin prcesses.

our new client relatinship management system, intrduced in

the prir year, was urther integrated int ur business peratins

and enhanced during the past year. It puts ur clients at the

centre all ur prcesses and helps us prvide better service

t ur clients acrss the range services we can prvide. It als

imprves reprting, cmpliance and risk management.

The acquisitins Grsvenr and Frdham have nt nly

strengthened ur adviser resurces in the key markets Sydney

and Melburne, but have given us specialist expertise in servingthe nancial needs private business wners and medical and

legal pressinals.

We intend t acquire ther advice businesses that meet ur

acquisitin criteria, pressinal standards and values, particularly

i they er specialist expertise we can leverage r ur brader

client base and service ering.

We are well psitined t transitin t the prpsed new

regulatins r adviser respnsibilities and remuneratin, as

mst ur revenue is already derived rm pressinal ees

rather than cmmissins. our duciary duty t ur clients has

always been paramunt as a trustee and is demnstrated bythe way we deliver impartial advice. We als ensure ur advisers

have pressinal qualicatins well abve the minimum

standards required.

As the nancial advice sectr enters a majr perid change,

we believe many gd advisers and their clients are attracted t

Perpetual because the quality ur brand and ur reputatin

r integrity in managing and prtecting ur clients’ interests.

2009

$b

Net lows

$b

Acquired1

$b

Market2

$b

2010

$b

Financial advisory

Superannuatin 2.4 - 0.7 0.2 3.3

Nn-superannuatin 1.8 - 0.2 0.2 2.2

4.2 - 0.9 0.4 5.5

Fiduciary services

Philanthrpic 1.0 - - 0.1 1.1

Trusts and estates 1.6 - - 0.1 1.7

2.6 - - 0.2 2.8

Total unds under advice 6.8 - 0.9 0.6 8.3

1 Includes FUA acquired thrugh the purchase Grsvenr Financial Services in September 2009 and Frdham Business Advisrs in January 2010.2 Includes reinvestments, distributins, incme and asset grwth.

Perpetual Private Wealth – unds under advice as at 30 June



Residential mortgage backedsecurities – non-bank

20102009

$241b$211b

Commercial mortgageand asset backed securities

Residential mortgage backedsecurities – repos

Residential mortgage backedsecurities – bank

20102009

95, 687

199, 257

Corporate Trust

our corPorate trust busIness Is the

leadIng ProvIder o sPecIalIst trustee

and related busIness servIces to other

InancIal InstItutIons. thIs Includes

actIng as trustee or a broad range

o Investment unds, securItIsatIon o

mortgage PortolIos, and mortgage

ProcessIng and admInIstratIon.

While residential mrtgage backed securities (RMBS) in Australia

avided the prblems assciated with securitised sub-prime lans

in the US, Australia’s securitisatin market was nevertheless greatlyimpacted by the negative repercussins that aected all credit

and securitisatin markets wrldwide. During the glbal nancial

crisis, the Australian Gvernment prvided assistance t supprt

securitisatin issuance in rder t maintain an ecient market.

over the past year, mre stable credit markets generally and

reduced credit spreads n RMBS have revived interest in this

market, althugh at a much reduced level cmpared t the

perid prir t the glbal nancial crisis.

In a psitive sign r the uture, new securitisatin issues increased

ver the prir year, including the rst new issues since the glbal

nancial crisis undertaken withut Australian Gvernment supprt.

Hwever, while Crprate Trust increased its market share during

the curse the year, new issuance did nt make up r the run-

the existing prtli as lw interest rates allwed peple t

pay existing mrtgages mre quickly. Hwever, this trend has

slwed as interest rates have risen.

As a result, Crprate Trust’s securitised unds under

administratin decreased by 13 per cent r the year t

$210.5 billin.

Revenue increased 9 per cent t $87.5 millin, largely driven by

increased demand r ur mrtgage services. Perpetual Lenders

Mrtgage Services (PLMS) mre than dubled the amunt

mrtgage transactins prcessed t almst 200,000, increasing

its revenue by 46 per cent ver the prir year.

Crprate Trust recrded a prt bere tax $32.3 millin r

the year ended 30 June 2010, an 11 per cent decrease n the

prir year, due t lwer securitisatin revenues and a 25 per cent

increase in expenses ver the prir year t $55.2 millin. The

increased expenses primarily related t a substantial investment

in the scale PLMS in rder t service the dramatic increase in

demand r its services.

our extensive knwledge nancial markets, tgether with ur

trustee experience, means we cntinue t be entrusted by many

Australia’s majr institutins t administer key aspects their

business and t prtect the interests investrs.


2009

$m

2010

$m

change

$m

change

%

Revenues 80.3 87.5 7.2 9%

Expenses (44.2) (55.2) (11.0) (25%)

Proit beore tax 36.1 32.3 (3.8) (11%)

Securitisation unds under administration as at 30 June Mortgage transactions or the year ended 30 June



o

We are trustworthy

We keep raising the bar

We consistently deliver

We succeed together



Mr Brasher brings t the Bard his lcal and glbal experience as

a senir executive and directr, particularly in the areas strategy,

audit and risk management, and public cmpany gvernance.

Meredith J Brooks, Independent Director

BA, FIAA (Age 48)

Appinted as a Directr in Nvember 2004. She is a member

Perpetual’s Audit Risk and Cmpliance Cmmittee and

Investment Cmmittee.

Ms Brks brings t the Bard ver 20 years experience as a senir

unds management executive, bth in Australia and internatinally.

Philip Bullock, Independent Director

BA, MBA, Dip Ed, GAICD (Age 57)

Appinted as a Directr in June 2010. He is a member Perpetual’s

Investment Cmmittee and Peple and Remuneratin Cmmittee.

Mr Bullck brings t the Bard his brad management

experience in Australia and Asia in technlgy, sales and

board and

managementPerpetual Board

Robert M Savage AM, Chairman and Independent Director

FASCPAS, FAICD, FAIM (Age 68)

Appinted as a Directr in 2001 and as Chairman in octber2005. Mr Savage will retire as Chairman and Directr at the

cnclusin the Annual General Meeting n 26 octber 2010.

He is a member Perpetual’s Nminatins Cmmittee and the

Peple and Remuneratin Cmmittee.

Mr Savage brings t the Perpetual Bard his experience

as a senir executive in Australia and the Asian regin,

including experience in peple management and rganisatin

eectiveness and several years as a nn-executive directr and

chairman acrss a range Australian cmpanies.

Paul V Brasher, Independent Director

BEc (Hons), FCA (Age 60)

Appinted as a Directr in Nvember 2009. He is a member

Perpetual’s Audit Risk and Cmpliance Cmmittee and Peple

and Remuneratin Cmmittee.



client management, prduct and brand management, industry

slutins and equity jint ventures.

E Paul McClintock AO, Independent Director

BA, LLB (Age 61)

Appinted as a Directr in April 2004. He is Chairman Perpetual’s

Investment Cmmittee and a member the Nminatins

Cmmittee and Peple and Remuneratin Cmmittee.

Mr McClintck brings t the Bard ver 30 years experience

as a legal adviser, investment banker and senir plicy adviser

t Gvernment and crpratins.

Elizabeth M Proust AO, Independent Director

BA (Hons), LLB, FAICD (Age 59)

Appinted as a Directr in January 2006. She is Chairman

Perpetual’s Peple and Remuneratin Cmmittee and a member


Nminatins Cmmittee.

Ms Prust brings t the Bard her strengths in change management,

human resurces, public aairs and strategy develpment, and

her strng knwledge bard prcesses and gvernance gained

thrugh her many senir executive and bard rles.

Peter B Scott, Independent Director

BE (Hons), MEngSc (Age 56)

Appinted as a Directr in July 2005. Mr Sctt was appinted as

Chairman-elect n 23 July 2010, t succeed Rbert Savage AM,

wh will be retiring at the cnclusin the Annual General Meeting

n 26 octber 2010. He is Chairman the Nminatins Cmmittee

and a member Perpetual’s Investment Cmmittee and Peple


Mr Sctt has mre than 20 years experience as a senir

executive in publicly listed cmpanies and extensive knwledge

the wealth management industry.

Philip J Twyman, Independent Director

BSc, MBA, FAICD (Age 66)

Appinted as a Directr in Nvember 2004. He is Chairman

Perpetual’s Audit Risk and Cmpliance Cmmittee and a member

the Investment Cmmittee and Nminatins Cmmittee.

As an experienced internatinal executive and directr,

Mr Twyman brings t the Bard his backgrund in nancial

services, investment and wealth management, tgether with

practical experience in audit and risk management issues.

David M Deverall, Managing Director

BE (Hons), MBA (Stanord) (Age 44)

Appinted Managing Directr in September 2003. Mr Deverall

gave ntice his resignatin n 23 June 2010 and will stay

until the new CEo has been appinted r until 31 March 2011,

whichever ccurs rst.

Mr Deverall brings t Perpetual a cmbinatin strategic

ability, cmmercial drive and skills in prduct innvatin andmanagement experience acrss a brad range investment

prducts and services. He als pssesses an extensive

understanding the wealth management and wider nancial

services industries.

Alternate DirectorsRoger Burrows – Chie Financial Ofcer

Ivan Holyman – Chie Risk Ofcer

Fr mre detailed inrmatin n the Bard Perpetual Limited,

please reer t page 20.

Let t right: Philip Bullck, Paul McClintck Ao,Meredith Brks, David Deverall, Rbert Savage AM, Peter Sctt,

Elizabeth Prust Ao, Paul Brasher, Philip Twyman.



Perpetual management

Richard Brandweiner, BEc, CFA

Group Executive, Income and Multi Sector

Richard is respnsible r Perpetual’s unds management

business cvering cash, xed incme and multi-strategyprtlis. He chairs Perpetual’s Investment Review Cmmittee,

Credit Cmmittee and Multi-Manager Investment Cmmittee.

Richard jined Perpetual in 2001 and has previusly held the

rles General Manager, Investments acrss all asset classes

and Prtli Manager, Diversied Funds. Prir t jining

Perpetual, Richard wrked in investment manager research

at ASSIRT and Advance Asset Management.

He is currently Vice President the Chartered Financial Analysts

Sciety Sydney and a member the Financial Services

Cuncil Investment Cmmittee.

Roger Burrows, BCom, CPA, MAICD

Chie Financial Ofcer

Rger is respnsible r Perpetual’s verall nance unctin,

including strategy, business planning, treasury, capital

management and investr relatins. He is als a Directr

the Grup’s regulated/licensed entities, including Chairman

Perpetual Superannuatin Limited. He is Alternate Directr r

Rbert Savage, Perpetual’s Chairman, and is a member the

Perpetual Fundatin Cmmittee Management.

Rger jined Perpetual in April 2008 as Chie Financial ocer.

He has mre than 25 years nance experience in a diverse range

industries, including prperty, nancial services, inrmatin

technlgy services, pressinal services and manuacturing.

Prir t jining Perpetual, Rger was Grup Chie Financial

ocer at Lend Lease. During 20 years with Lend Lease he

held a number senir nance rles in perating cmpanies in

Australia and verseas, including heading grup investr relatins

and crprate aairs. Rger cmmenced his career with BHP

Steel Internatinal and KPMG Chartered Accuntants.

He is Chairman the UTS Bachelr Accunting Steering

Cmmittee, which he has been a member r ver 10 years.

He is als a member the Grup 100 Natinal Executive.

Cathy Doyle

BSocSc, GradDipPsych, GradDipVET, MBA, GAICD

Group Executive, Equities

Cathy is respnsible r Perpetual’s unds management business

cvering Australian and Glbal Equities. She is a Directr

Perpetual Investment Management Limited and a member

Perpetual’s Investment Review Cmmittee and the Perpetual

Fundatin Cmmittee Management. Prir t assuming her

current rle in April 2010, Cathy held the psitins Grup

Executive Perpetual Investments Business Services, Chie

operating ocer Australian Equities and Grup Executive

Peple and Culture.

Prir t jining Perpetual in 2006, Cathy held senir rles in human

resurces, change management, strategy and sales in several

cmpanies and industries. This included rles as Grup General

Manager Peple r Qantas, Executive General Manager, Peple

and Change at Cmmnwealth Bank, and General Manager

Human Resurces and Strategy at NRMA Member Services.

Since 2007 Cathy has been Chairman odyssey Huse, whichcnducts rehabilitatin prgrams r peple with drug, alchl

r gambling prblems.

Chris Green, BCom, MBA, LLB, MAICD

Group Executive, Corporate Trust

Chris heads up Perpetual’s Crprate Trust securitisatin and

mrtgage services businesses. He jined Perpetual in July 2006

and was appinted Grup Executive in Nvember 2008.

Prir t jining Perpetual, Chris was at JP Mrgan Chase Bank

r 10 years, mst recently as Australasia Business Head –

Institutinal Trust Services based in Sydney and previusly

as Vice President – Head Accunt Management and Vice

President – Head Analytics based in Lndn, cvering the

Eurpean, Middle Eastern and Arican markets. Chris began

his career as a slicitr r Crrs Chambers Westgarth.

Ivan Holyman, BEc, LLB

Chie Risk Ofcer

Ivan is respnsible r Perpetual’s Risk Management ramewrk

and reprting. He is a Directr a number the Grup’s

regulated/licensed entities, and Alternate Directr r David Deverall,

Perpetual’s Managing Directr. He is a member the Perpetual

Fundatin Cmmittee Management, the Investment Review

Cmmittee and the Cmpliance Cmmittees Perpetual Investment

Management Limited and Perpetual Trust Services Ltd.

Ivan jined Perpetual in June 2004 as Chie Risk ocer. Prir

t jining Perpetual he was invlved in a number private

equity ventures. He previusly spent 19 years with UBS AG

(and predecessr rganisatins), during which time he held

the psitins Chie operating ocer, Asia Pacic, as well as

Directr Crprate Finance, Head Risk and Chie operating

ocer r Australia/New Zealand. Prir t UBS Ivan wrked with

merchant bank Samuel Mntagu & C. in Lndn, and at Blake

Dawsn Waldrn, Slicitrs in Melburne.

Geo Lloyd – Barrister at Law, LLM

Group Executive, Private Wealth

Ge is respnsible r Perpetual’s Private Wealth business,which prvides nancial advisry services and slutins. Ge

jined Perpetual in August 2010 as Grup Executive, Private

Wealth. He is a member the Perpetual Fundatin Cmmittee

Management.

Prir t jining Perpetual Ge was General Manager, Advice

and Private Banking at BT Financial Grup, llwing the merger

with St Gerge’s wealth management business. Prir t this,

he was Grup Executive St Gerge’s wealth management

business, r which he held a number rles, including CEo

Asgard Wealth Slutins and the nancial planning, private

banking and platrm businesses St Gerge. Ge previusly

held many senir rles at BT Financial Grup, including Chie Legal Cunsel and Head the Custmer and Business Services

Divisin. Early in his career Ge wrked at the Australian

Securities Cmmissin.



Michael Miller, CA, BCom

Group Executive, Superannuation and Operations

Michael is respnsible r Perpetual Investments peratins,

inrmatin technlgy and und accunting, and the business

cmprising ur investment platrm, structured prducts and

smartsuper service r sel managed super unds. He was

appinted a Grup Executive in January 2010.

Michael is a directr Perpetual Investment Management

Limited and Perpetual Superannuatin Limited, and is a member

the Superannuatin Investment Cmmittee. He jined

Perpetual in 2001 and previusly held the psitins Chie

Financial ocer r Perpetual Investments asset management

businesses and Deputy Chie Financial ocer Perpetual

Limited, as well as Head External Reprting, Grup Strategy

Manager and Head Internal Reprting.

Prir t jining Perpetual, Michael wrked with Delitte in

Brisbane, Lndn and Sydney.

Janine Stewart

Group Executive, People and Culture

Janine is respnsible r verall Peple and Culture plicy and

practices including talent and successin planning, remuneratin,

diversity, recruitment and ccupatinal health and saety.

She was appinted Grup Executive, Peple and Culture in

September 2008.

Janine jined Perpetual in 2007, initially respnsible r

remuneratin, benets and emplyee relatins. She is chairman

Perpetual’s Wrkplace Giving Cmmittee.

Janine has ver 20 years experience in custmer service strategy

and design, emplyee relatins, peple and leadership, and

cultural change, primarily in the aviatin industry.

Centre: David Deverall, CEo and Managing Directr. Grup

Executives, clckwise rm tp let: Richard Brandweiner,

Chris Green, Cathy Dyle, Michael Miller, Rger Burrws,

Janine Stewart, Ivan Hlyman, Ge Llyd.



Contents o the Directors’ Report Page no.

di ..................................................................................................................................20

a i .............................................................................................................22

cp i.......................................................................................................22

di’ i ............................................................................................................ 22

Piip iii............................................................................................................... 23

riw pi........................................................................................................23

dii .................................................................................................................................23

s i .....................................................................................................................24

e pi ....................................................................24

li p .........................................................................................................24

ei i ................................................................................................24

Iiii i i.............................................................24

I .................................................................................................................................24

cp rpiii s .....................................................................25

ri rp .......................................................................................................34

Glssary ................................................................................................................................. 34

Remuneratin utcmes r 2010 ........................................................................................... 35

Changes t the executive remuneratin ramewrk t apply rm 1 July 2010 ........................ 35

The rle the Peple and Remuneratin Cmmittee ..............................................................37

overview remuneratin r 2010 ......................................................................................... 38

– Managing Directr and Grup Executives ............................................................................ 38

– Nn-executive Directrs ....................................................................................................... 39

– Asset manager remuneratin arrangements ........................................................................ 40

Shrt-term incentives .............................................................................................................. 40

– Hw STI is unded ................................................................................................................ 40

– Allcatin the PPP ............................................................................................................ 40

– Delivery STI ...................................................................................................................... 40Lng-term incentives............................................................................................................... 40

– Executive share prgram and executive ptins prgram .................................................... 40

– Emplyee share plans ...........................................................................................................42

Summary cmpany perrmance ....................................................................................... 44

– Prt participatin pl payments r 2010 .......................................................................... 44

– Unvested LTI issued t key management persnnel (KMP) .................................................. 44

Key management persnnel ...................................................................................................45

Appendices .............................................................................................................................46

ci ei oi’ ci ii

oi’ di .........................................................................................................60

n-i i ............................................................................................................60ri ...........................................................................................................................60

l i’ ip i ...........................................................60

directors’ reportor the year ended 30 June 2010

PERPETUAL LIMITED AND ITS CoNTRoLLED ENTITIES | 19


http://slidepdf.com/reader/full/2010-perpetual-annual-report 22/15220 | PERPETUAL LIMITED AND ITS CoNTRoLLED ENTITIES

The directors present their report together with the consolidated fnancial report o Perpetual Limited, (‘Perpetual’ or the ‘Company’)

and its controlled entities (the ‘consolidated entity’), or the year ended 30 June 2010 and the auditor’s report thereon.

Directors The directrs the Cmpany at any time during r since the end

the nancial year are:

Robert M Savage AM, Chairman and Independent Director

FASCPAS, FAICD, FAIM (Age 68)

Appinted as a Directr in 2001 and as Chairman in octber

2005. Mr Savage will retire as Chairman at the cnclusin

the Annual General Meeting n 26 octber 2010. He was

rmerly Chairman and Managing Directr IBM Australia and

New Zealand. He is Chairman David Jnes Limited and a

directr Fairax Media Limited. He is a member Perpetual’s

Nminatins Cmmittee and a member the Peple and

Remuneratin Cmmittee.

Mr Savage brings t the Perpetual Bard his experience as asenir executive in Australia and the Asian regin, including

experience in peple management and rganisatin eectiveness

issues and several years as a nn-executive directr and

chairman acrss a wide range Australian cmpanies.

Listed cmpany directrships held during the past three

nancial years:

▪ David Jnes Limited rm octber 1999 (current)

▪ Smrgn Steel Grup Limited rm April 2000 t August 2007

▪ Mincm Limited (Chairman) rm May 2002 t May 2007

▪ Fairax Media Limited rm June 2007 (current).

Paul V Brasher, Independent Director

BEc (Hons), FCA (Age 60)

Appinted as a Directr in Nvember 2009. Mr Brasher

was rmerly Chairman the Glbal Bard

PricewaterhuseCpers Internatinal. He previusly chaired

the Bard PricewaterhuseCpers’ Australian rm and held

a number ther senir management and client services rles

during his career with the rm. Mr Brasher was Client Service

Partner and/r Lead Engagement Partner r sme the rm’s

mst signicant clients. He als spent signicant perids wrking

with PricewaterhuseCpers in the US and UK.

Mr Brasher is currently Chairman the Reach Fundatin,

a Bard member the Victrian Arts Centre Trust and Hnrary

Treasurer Visin Australia’s i-access prject. He is a member

Perpetual’s Audit Risk and Cmpliance Cmmittee and Peple


Mr Brasher brings t the Bard his lcal and glbal experience

as a senir executive and directr, particularly in the areas

strategy, audit and risk management, and public cmpany

gvernance.

Meredith J Brooks, Independent Director

BA, FIAA (Age 48) Appinted as a Directr in Nvember 2004. She was rmerly

Managing Directr, US Institutinal Investment Services r Frank

Russell Cmpany based in New Yrk. Prir t that she held the

psitin Managing Directr Frank Russell Australasia r

ve years and was previusly Directr, Eurpean Funds based

in Lndn. Ms Brks is Chair Synergy & Taikoz Limited and

has been appinted t the industry advisry bard Macquarie

University Faculty Business and Ecnmics. She is a member


Investment Cmmittee.

Ms Brks brings t the Bard ver 20 years senir unds

management experience, bth in Australia and internatinally.

Philip Bullock, Independent Director

BA Maths, MBA, Dip Ed (Age 57)

Appinted as a Directr in June 2010. Mr Bullck was rmerly

Vice President, Systems and Technlgy Grup, IBM Asia

Pacic, Shanghai, China. Prir t that he was CEo and Managing

Directr IBM Australia and New Zealand in a career spanning

almst 30 years in the Asia Pacic regin. Mr Bullck is a directr

CSG Limited and Healthscpe Limited. He als prvides

advice t the Federal Gvernment thrugh his rle as Chair

Skills Australia, as a member the Educatin Investment Fund

and as a member the recently cncluded Natinal Resurces

Sectr Emplyment Taskrce. He is a member Perpetual’s Investment Cmmittee and Peple and


Mr Bullck brings t the Bard his brad management

experience in Australia and Asia in technlgy, sales and

client management, prduct and brand management, industry

slutins and equity jint ventures.


nancial years:

▪ Healthscpe Limited rm September 2007 (current)

▪

CSG Limited rm August 2009 (current).

E Paul McClintock AO, Independent Director

BA, LLB (Age 61)

Appinted as a Directr in April 2004. He is Chairman

Thales Australia, Medibank Private Limited and the CoAG

Rerm Cuncil, and has served as Secretary t Cabinet and

Head the Cabinet Plicy Unit in the Australian Gvernment.

He is Chairman Perpetual’s Investment Cmmittee and

a member the Nminatins Cmmittee and Peple and


Mr McClintck brings t the Bard ver 30 years experience as

a legal adviser, investment banker and senir plicy adviser t

Gvernment and crpratins.




nancial years:

▪ Symbin Health Limited (Chairman) rm June 2005

t February 2008

▪ Intll Management Limited (rmerly Macquarie Inrastructure

Investment Management Limited) rm May 2003 (current).

Elizabeth M Proust AO, Independent Director

BA (Hons), LLB, FAICD (Age 59)

Appinted as a Directr in January 2006. She was rmerly

Managing Directr Esanda, part the ANZ Grup. Prir

t jining ANZ, she was Secretary (CEo) the Victrian

Department the Premier and Cabinet and Chie Executive

ocer the City Melburne. She is currently Chairman

Nestlé Australia Ltd, a directr Sptless Grup Limited,

Insurance Manuacturers Australia Pty Ltd and Sinclair Knight

Merz Pty Ltd. She is Chairman Perpetual’s Peple and

Remuneratin Cmmittee and a member Perpetual’s Audit

Risk and Cmpliance Cmmittee and Nminatins Cmmittee.

In additin t her skills rm her leadership rles in signicant

change management prgrams, Ms Prust brings t the

Bard her strengths in human resurces, public aairs and

strategy develpment, and her strng knwledge bard

prcesses and gvernance gained thrugh her many senir

executive and bard rles.


nancial years:

▪ Sptless Grup Limited rm June 2008 (current).

Peter B Scott, Independent Director

BE (Hons), MEngSc (Age 56)

Appinted as a Directr in July 2005. Mr Sctt was appinted as

Chairman-elect n 23 July 2010, t succeed Rbert Savage AM,

wh will be retiring at the cnclusin the Annual General

Meeting n 26 octber 2010. He was rmerly the Chie

Executive ocer MLC, an Executive General Manager

Natinal Australia Bank, and held a number senir psitins

with Lend Lease. He is Chairman Sinclair Knight Merz Pty

Limited and a directr Stckland Crpratin Limited.

Mr Sctt is an advisry bard member Piltlight Australia

and an advisry panel member Laing o’Rurke Australia.

He is Chairman the Nminatins Cmmittee and a member

Perpetual’s Investment Cmmittee and Peple and


Mr Sctt has mre than 20 years senir business experience in

publicly listed cmpanies and extensive knwledge the wealth

management industry.


nancial years:

▪ Stckland Crpratin Limited rm August 2005 (current).

Philip J Twyman, Independent Director

BSc, MBA, FAICD (Age 66) Appinted as a Directr in Nvember 2004. He was rmerly

Grup Executive Directr Lndn-based Aviva plc, ne

the wrld’s largest insurance grups, with extensive und

management and wealth management businesses. Mr Twyman

was als rmerly Chairman Mrley Fund Management, a

directr the Quilter Grup, a UK private client stckbrker,

and a senir executive AMP in Australia. He has als been

Chie Financial ocer General Accident plc, Aviva plc and

the AMP Grup. Since returning t Australia, Mr Twyman has

jined the bard IAG Limited, Medibank Private Limited and

the lcal bards the Swiss Re Grup. He is als Chairman

ANZ Lenders Mrtgage Insurance Pty Ltd and overseas

Cuncil Australia. He is Chairman Perpetual’s Audit Riskand Cmpliance Cmmittee and a member the Investment

Cmmittee and Nminatins Cmmittee.

As an experienced internatinal executive and directr,

Mr Twyman brings t the Perpetual Bard his backgrund in

nancial services, investment and wealth management, tgether

with cnsiderable practical experience in relatin t the audit and

risk management issues aced by public cmpanies in Australia

and verseas.


nancial years:

▪ IAG Limited rm July 2008 (current).

David M Deverall, Managing Director

BE (Hons), MBA (Stanord) (Age 44)

Appinted Managing Directr in September 2003. Mr Deverall

gave ntice his resignatin n 23 June 2010 and will stay

until the new CEo has been appinted r until 31 March 2011,

whichever ccurs rst. Prir t his appintment as Managing

Directr and CEo Perpetual, Mr Deverall held senir

management psitins at Macquarie Bank Limited r seven

years, including Grup Head the Funds Management Grup

and Head Strategy and Planning. He was previusly a strategy

cnsultant with Bain and Cmpany and The LEK Partnership.

Mr Deverall is Chair the Financial Services Cuncil and amember the Executive Cuncil the Faculty Business at

the University Technlgy Sydney.

Mr Deverall brings t Perpetual a cmbinatin strategic ability

and cmmercial drive and skills in prduct innvatin, and

experience in management acrss a brad range investment

prducts and services. He als pssesses an extensive verall

understanding the wealth management and wider nancial

services industry.



Alternate directorsRoger L Burrows, Alternate Director

BCom, CPA, MAICD (Age 46) Alternate Directr r Mr Savage rm December 2008. He jined

Perpetual as Chie Financial ocer in March 2008. Mr Burrws

has ver 25 years experience as a senir nance executive in a

diverse range industries, including prperty, nancial services,

IT services, pressinal services and manuacturing. Prir t

wrking at Perpetual, Mr Burrws was with Lend Lease r

20 years, including three years as Grup Chie Financial ocer.

Ivan D Holyman, Alternate Director

BEc, LLB (Age 54)

Alternate Directr r Mr Deverall rm May 2006. He jined

Perpetual in June 2004 as Chie Risk ocer. Prir t jining

Perpetual he held the psitin Chie operating ocer AsiaPacic r UBS Warburg and spent 19 years with UBS AG (and

its predecessr rganisatins) in varius psitins. Prir t UBS

AG he spent tw years with Samuel Mntagu & C Limited

(a UK merchant bank) and ur years with Blake Dawsn

Waldrn, Slicitrs in Melburne.

Company secretariesJoanne Hawkins, Company Secretary

BCom, LLB, Grad Dip CSP, FCIS Appinted Cmpany Secretary in June 2003. Prir t this,

Ms Hawkins was Assistant Cmpany Secretary Macquarie

Bank and ord Minnett and was Cmpany Secretary, Natinal

Bank the Slmn Islands. Ms Hawkins has als wrked as

a slicitr and legal adviser in New Zealand. Ms Hawkins is als

head Perpetual’s legal team.

Glenda Charles, Deputy Company Secretary

Grad Dip Corp Gov ASX Listed Entities, CSA (Cert)

Jined Perpetual in August 1994. She was appinted Assistant

Cmpany Secretary Perpetual in 1999 and Deputy Cmpany

Secretary in 2009. Ms Charles has ver 15 years experience in

cmpany secretarial practice and administratin and has wrkedin the nancial services industry r ver 25 years.

Directors’ meetings The number directrs’ meetings that directrs were eligible t attend (including meetings bard cmmittees) and the number

meetings attended by each directr during the nancial year t 30 June 2010 were:

Director Board Audit Risk and ComplianceCommittee

InvestmentCommittee

Nominat ions Committee People & RemunerationCommittee

Eligible toattend

AttendedEligible to

attend Attended

Eligible toattend

AttendedEligible to

attend Attended

Eligible toattend

Attended

R M Savage¹ 11 11 3 2 - - 2 2 6 6

P Brasher² 6 6 4 4 - - - - 3 3

M J Brooks 11 11 7 7 7 7 - - - -

P Bullock³ 1 1 - - - - - - - -

E P McClintock 11 11 - - 7 7 2 2 6 6

E M Proust 11 11 7 7 - - 2 2 6 6

P B Scott4 11 10 - - 7 7 - - 6 6

P J Twyman 11 11 7 7 7 7 2 2 - -

D M Deverall5 11 11 - - - - - - - -

1 Rbert Savage retired rm the Audit Risk and Cmpliance Cmmittee n 17 Nvember 2009 and retired as Chairman the Nminatins Cmmittee n23 July 2010, but remains as a member that Cmmittee until his retirement rm the Bard n 26 octber 2010.

2 Paul Brasher was appinted t the Bard n 1 Nvember 2009, the Audit Risk and Cmpliance Cmmittee n 17 Nvember 2009 and the Peple andRemuneratin Cmmittee n 16 February 2010.

3 Philip Bullck was appinted t the Bard n 1 June 2010 and t the Investment Cmmittee and Peple and Remuneratin Cmmittee n 9 August 2010.

4 Peter Sctt became Chairman-elect and Chairman the Nminatins Cmmittee n 23 July 2010.

5 Mr Deverall gave ntice his resignatin n 23 June 2010 and will stay until the new CEo has been appinted r until 31 March 2011, whichever ccurs rst.



Principal activities The principal activities the cnslidated entity during the

nancial year were unds management, prtli management,nancial planning, trustee, respnsible entity and cmpliance

services, executr services, investment administratin and

custdy services and mrtgage prcessing services.

Review o operations A review peratins is included in the Management’s

Discussin and Analysis Financial Cnditin and Results operatins (MD&A) sectin the Annual Reprt.

Fr the nancial year t 30 June 2010, Perpetual reprted a prt

ater tax $90.5 millin cmpared t the prt ater tax r the

nancial year t 30 June 2009 $37.8 millin.

The recnciliatin net prt ater tax t underlying prt ater tax r the 2010 nancial year is as llws:

Reconciliation o underlying proit ater tax 30 June 2010

$’000

30 June 2009

$’000

Net proit ater tax attributable to equity holders o Perpetual Limited 90,506 37,749

Add/(less): Prit/(lss) ater tax attributable t minrity interests1 216 (58)

Net proit ater tax 90,722 37,691

Add: Lss n sale investments (ater tax) 2,388 6,081

Add: Restructuring csts (ater tax) - 8,115

(Less)/add: Exact Market Cash Fund (gains)/lsses (ater tax) (20,317) 13,810

Underlying proit ater tax 72,793 65,697

1 Prt/(lss) ater tax attributable t minrity interests arising rm the sale underlying investments within a seed und.

Dividends

Dividends paid r prvided by the Cmpany t members since the end the previus nancial year were:

Centsper share

Total amount$’000

Franked # /unrankedDate o

payment

Declared and paid during the inancial year 2010

Final 2009 rdinary 60 25,506 Franked 30 Sep 2009

Interim 2010 rdinary 105 45,398 Franked 1 Apr 2010

Total 70,904

Declared ater end o year

Ater balance sheet date, the directrs declared the llwing dividend:


Total 45,588

# All ranked dividends declared r paid during the year were ranked at a tax rate 30 per cent and paid ut retained earnings.

The nancial eect dividends declared ater year end are nt refected in the 30 June 2010 nancial statements and will be recgnised

in subsequent nancial reprts.



State o aairsSignicant changes in the state aairs the cnslidated

entity during the nancial year were as llws:

▪ The cnslidated entity’s net prt bere tax increased by

$29.0 millin as a result its guarantee the benchmark

return t Exact Market Cash Fund 1 investrs.

▪ The cnslidated entity acquired Grsvenr Financial

Services Pty Ltd and Frdham Business Advisrs Pty Ltd r

cnsideratin ttalling $54.9 millin.

Events subsequent to reporting date The Directrs are nt aware any event r circumstance since

the end the nancial year nt therwise dealt with in this reprt

that has aected, r may signicantly aect, the peratins thecnslidated entity, the results thse peratins r the state

aairs the cnslidated entity in subsequent nancial years.

Events subsequent t balance sheet date are set ut in Nte 37

t the cnslidated Financial Statements.

Likely developmentsFurther inrmatin abut likely develpments in the peratins

the cnslidated entity and the expected results thse

peratins in uture nancial years has nt been included in this

reprt because disclsure the inrmatin wuld be likely t

result in unreasnable prejudice t the cnslidated entity.

Environmental regulation The cnslidated entity acts as trustee r custdian r a

number prperty trusts, which have signicant develpments

thrughut Australia. These duciary peratins are subject

t envirnmental regulatins under bth Cmmnwealth and

State legislatin in relatin t prperty develpments. Apprvals

r cmmercial prperty develpments are required by state

planning authrities and envirnmental prtectin agencies.

The licence requirements relate t air, nise, water and waste

dispsal. The respnsible entity r manager each these

prperty trusts is respnsible r cmpliance and reprting under

the gvernment legislatin.

The cnslidated entity is nt aware any material

nn-cmpliance in relatin t these licence requirements

during the nancial year.

The cnslidated entity has determined that it is nt required t

register t reprt under the National Greenhouse and Energy

Reporting Act 2007, which is Cmmnwealth envirnmental

legislatin that impses reprting bligatins n entities that

reach reprting threshlds during the nancial year.

Indemnifcation o directors and

ofcers The Cmpany and its cntrlled entities have reslved t

indemniy the current directrs and cers the cmpanies

against all liabilities t anther persn (ther than the cmpany

r a related bdy crprate) that may arise rm their psitin

as directrs the cnslidated entity, except where the liabilities

arise ut cnduct invlving a lack gd aith. The reslutin

stipulates that the Cmpany and its cntrlled entities will

meet the ull amunt any such liabilities, including csts

and expenses.

InsuranceIn accrdance with the prvisins the Corporations Act 2001

the Cmpany has a directrs and cers’ liability plicy, whichcvers all directrs and cers the cnslidated entity. The

terms the plicy specically prhibit disclsure details the

amunt the insurance cver and the premium paid.



Corporate Responsibility

StatementPerpetual’s Bard and management have a lng-standing

cmmitment t gd crprate gvernance. The success

Perpetual’s cre businesses – the management ther peple’s

mney and the saekeeping assets and securities – relies n

a reputatin abslute trustwrthiness. This statement sets ut

ur apprach t crprate gvernance. Cpies r summaries

dcuments that are underlined like this in this Crprate

Gvernance Statement are available n ur website at

www.perpetual.cm.au

ASX Corporate Governance Council’s

Corporate Governance Principles and

Recommendations At Perpetual, gd crprate gvernance includes a genuine

cmmitment t the ASX Crprate Gvernance Cuncil’s

Principles and Recmmendatins (ASX Principles). This includes

recent amendments t the ASX Principles that will nt cme int

eect r Perpetual until the nancial year ending 30 June 2012,

which we have apprached with a view t implementing their

substance as early as pssible.

The Bard cnsiders that it cmplies with all the ASX Principles,

and has dne s thrughut the reprting perid.

Principle/Recommendation Relevantsection(s)

Comply?

Principle 1 – Lay solid oundations or management and oversight

1.1 Establish and disclse the unctins reserved t the bard and thse delegated t management. 1 Yes

1.2 Disclse the prcess r evaluating the perrmance senir executives. 1 Yes

1.3 Prvide the inrmatin indicated in the guide t reprting n Principle 1. * Yes

Principle 2 – Structure the board to add value

2.1 A majrity the bard shuld be independent directrs. 3 Yes

2.2 The chair shuld be an independent directr. 3 Yes

2.3 The rles chair and managing directr shuld nt be exercised by the same individual. 2 Yes

2.4 The bard shuld establish a nminatin cmmittee. 9 Yes

2.5 Disclse the prcess r evaluating the perrmance the bard, its cmmittees and individual directrs. 10 Yes


Principle 3 – Promote ethical and responsible decision-making

3.1 Establish and disclse a cde cnduct utlining:

▪ the practices necessary t maintain cnidence in the cmpany’s integrity

▪ the practices necessary t take int accunt legal bligatins and the reasnable expectatins stakehlders

▪ the respnsibility and accuntability individuals r reprting and investigating reprts unethical practices.

13 Yes

3.2 Establish and disclse the plicy cncerning trading in cmpany securities by directrs, senir managementand emplyees.

14 Yes


Principle 4 – Saeguard integrity in inancial reporting

4.1 Establish an audit cmmittee. 9 Yes

4.2 Structure the audit cmmittee s that it:

▪ cnsists nly nn-executive directrs;

▪ cnsists a majrity independent directrs;

▪ is chaired by an independent chair, wh is nt the chair the bard; and

▪ has at least three members.

9 Yes

4.3 The audit cmmittee shuld have a rmal charter. 9 Yes


Principle 5 – Make timely and balanced disclosure

5.1 Establish and disclse written plicies designed t ensure cmpliance with ASX Listing Rule disclsurerequirements and t ensure accuntability at a senir management level r that cmpliance.

19 Yes


Principle 6 – Respect the rights o shareholders6.1 Design and disclse a cmmunicatins strategy t prmte eective cmmunicatin with sharehlders and

encurage eective participatin at general meetings.20 Yes




Principle/Recommendation Relevantsection(s)

Comply?

Principle 7 – Recognise and manage risk

7.1 Establish and disclse plicies r the versight and management material business risks. 15 Yes

7.2 Require management t design and implement the risk management and internal cntrl system t manage thecmpany’s material business risks and reprt t the bard n whether thse risks are being managed eectively.

The bard shuld disclse whether management has reprted t it n the management thse risks.

15, 16 Yes

7.3 Disclse whether the bard has received assurance rm the managing directr and the chie inancial icer thatthe declaratin prvided under s295A the Act is unded n a sund system risk management and internalcntrl that is perating eectively in all material respects in relatin t inancial reprting risks.

16 Yes


Principle 8 – Remunerate airly and responsibly

8.1 The bard shuld establish a remuneratin cmmittee. 9 Yes

8.2 Distinguish the structure nn-executive directrs’ remuneratin rm that executive directrs and senirmanagement.

211 Yes


* The whle this Crprate Respnsibility Statement cvers n the requirements t include inrmatin indicated in the ‘guide t reprting’ sectins the ASX Principles.

1 Full details the remuneratin plicies and structures Perpetual Limited and its cntrlled entities (Perpetual Grup) are set ut in the Remuneratin Reprtsectin the Directrs’ Reprt n pages 34 t 59 this Reprt.

1. Role o the Board

The Bard has its wn Bard Charter, which sets ut the

unctins and respnsibilities reserved t the Bard and

delegatins made t management. The Bard delegates day

t day respnsibility r the management and peratin the

cmpany t the Managing Directr but remains respnsible r

verseeing management’s perrmance.

The Bard’s specic respnsibilities include:

▪ reviewing and apprving Perpetual’s strategy

▪ selecting the Managing Directr and apprving the

appintment and remval Grup Executives

▪ setting the remuneratin the Managing Directr

▪ setting the nn-executive directr remuneratin within

sharehlder apprved limits

▪ setting Perpetual’s values and standards

▪ mnitring business perrmance and the Perpetual Grup’s

nancial psitin

▪ verseeing the integrity the Perpetual Grup’s nancial

accunts and reprting

▪ mnitring the Perpetual Grup’s investment activities and

investment perrmance

▪ mnitring that signicant business risks are identied and

managed eectively

▪ ensuring that the perrmance the Bard, Managing Directr

and senir management are regularly assessed.

The Bard Charter is reviewed annually t ensure the balance

respnsibilities remains apprpriate t Perpetual.

The rles and respnsibilities Perpetual’s Bard and

management are established in accrdance with ASX Principle 1.

Each year, the Bard’s Peple and Remuneratin Cmmittee

versees the perrmance review prcess r the Managing

Directr and Grup Executives. The Grup Executives reprt

directly t the Managing Directr.

The Managing Directr’s perrmance bjectives are set by the

Bard at the beginning each nancial year.

At the end the nancial year, the Chairman the Bard

reviews the Managing Directr’s perrmance against his/her

gals with input rm all Bard members.

The Managing Directr sets perrmance bjectives r

each Grup Executive at the beginning each nancial year.

The Bard’s Peple and Remuneratin Cmmittee reviews

the perrmance bjectives set r the Grup Executives.

The Managing Directr carries ut the perrmance review

each Grup Executive against their bjectives with inputrm apprpriate stakehlders, including Bard members.

In 2010, perrmance reviews were cnducted in accrdance

with this prcess.

Grup Executives wh are new t Perpetual participate in

Perpetual’s rientatin prgram and an additinal inductin

prcess tailred t their wn respnsibilities. Perpetual has an

rientatin prgram r all new emplyees cvering Perpetual’s

histry, business strategy, values, risk and cmpliance bligatins

and perrmance management.

2. Board structure

The Bard currently cmprises nine directrs: eight nn-executive directrs and the Managing Directr. The rles

Chairman and Managing Directr are separate.

The Chairman is respnsible r leadership the Bard and

ensuring the Bard perrms its rle and unctins.



He is als respnsible r acilitating the eective cntributin

directrs by ensuring that each directr ully participates in the

Bard’s activities.

Details the backgrund, experience, pressinal skills and

perid in ce each directr are set ut n pages 20 t 22

the Directrs’ Reprt.

The structure the Bard accrds with ASX Principle 2.

3. Director independence

The Bard cnsiders all nn-executive directrs t be

independent directrs, including the Chairman.

In assessing the independence each directr, the Bard

cnsiders, n a directr-by-directr basis, whether he r she has

any relatinships that wuld materially aect the directr’s abilityt exercise unettered and independent judgment in the interests

Perpetual’s sharehlders. Cnsistent with the emphasis n

‘substance ver rm’ advcated by the ASX Principles, Perpetual

takes a qualitative apprach t materiality rather than setting

strict quantitative threshlds, and cnsiders each directr’s

individual circumstances n its merits.

The independence each directr is rmally reviewed each

May and at any time when a change ccurs that may aect a

directr’s independence. Nn-executive directrs als rmally

advise the Chairman any relevant inrmatin, and update the

Chairman i their circumstances change at any time.

In determining the psitin individual directrs, the Bard

has cnsidered the relevant elements the denitin

independence adpted by the Bard. These elements include

whether the directr:

▪ has a substantial sharehlding in Perpetual r is an cer

a cmpany that has a substantial sharehlding in Perpetual

(r is therwise assciated with a substantial sharehlder

Perpetual)

▪ has been emplyed by the Perpetual Grup at any stage and

in any capacity within the previus three years

▪

has been invlved with the Perpetual Grup in a materialadvising r cnsulting rle at any time within the previus

three years

▪ is (r is assciated with) a material supplier r custmer

the Perpetual Grup

▪ is in a material cntractual relatinship with the Perpetual

Grup (ther than as a directr).

Until March 2010, Paul McClintck was a directr Macquarie

Inrastructure Investment Management Limited (nw Intll

Management Limited), a cmpany that perated in the nancial

services sectr and whse businesses may, in part, cmpete

with Perpetual.

In cnsidering whether such circumstances materially aect

the independence individual directrs, the Bard cnsiders

the extent cmpetitin relative t each rganisatin’s ttal

business, and the requency with which directrs may be

required t absent themselves rm Bard deliberatins

by reasn cnficts interest.

In the case Paul McClintck, the Bard cnsidered that in hispsitin as a directr Perpetual, he is suciently remved rm

Perpetual’s peratins s as t make the likelihd any actual

r perceived cnfict interest between his Perpetual and his

utside rle minimal.

During the year, Meredith Brks prvided advisry and

cnsulting services t Perpetual’s Glbal Equities business r

a xed perid six mnths. Ms Brks tk n the shrt-term

rle in rder t prvide strategic supprt t the Glbal Equities

business during the critical perid leading up t and llwing the

departure Emili Gnzalez. Ms Brks did nt have a ‘hands

n’ management rle and was at n time an ‘emplyee’

Perpetual.

The Bard cnsidered that the prvisin the services did

nt aect Ms Brks’ independent status. In arriving at this

cnclusin the Bard had regard t the ‘ne ’ transitinal

nature the cnsultancy. In particular, the Bard tk accunt

the act that the rle was established with a nite timerame

and r a specic nn-recurring purpse.

Paul Brasher receives superannuatin benets rm his rmer

emplyer, PricewaterhuseCpers (PwC). Frm time t time,

PwC prvides cnsulting services t Perpetual which are nt

cnsidered material in nature r quantity.

Frm time t time, unds managed by the Perpetual Grup maytake hldings, including substantial hldings in securities listed

entities. Perpetual directrs may als serve as nn-executive

directrs n the bards these entities. This actr alne is nt

cnsidered t impact directr independence as decisins as t

stck selectin are nt made by the Bard Perpetual but by

Perpetual’s asset management team in accrdance with client

r und investment mandates.

It is the Bard’s view that n directrs currently hld ther

psitins that materially aect their ability t exercise independent

judgement in the interests Perpetual sharehlders.

4. Contracts with directorsIn the 2010 nancial year, n directr disclsed a material

persnal interest in any cntract entered int by any member

the Perpetual Grup ther than the remuneratin paid t the

directrs as utlined in this Annual Reprt, Meredith Brks’

cnsultancy cntract and the deeds indemnity described belw.

5. Indemnity o directors and oicers

Perpetual has entered int deeds t indemniy directrs and

cers the Perpetual Grup, t the extent permissible by law,

rm all liabilities incurred as directrs r cers. Liabilities t the

Perpetual Grup, and liabilities that arise ut cnduct that was

nt in gd aith are nt cvered in the indemnities. In additin,Perpetual has directrs and cers’ insurance against claims

Perpetual may be liable t pay under these indemnities. This

plicy insures directrs and cers directly.



6. Board access to inormation and

independent advice

Directrs receive regular updates n changes in the regulatryenvirnment aecting Perpetual and the nancial services

industry. Directrs are als encuraged t attend relevant

cnerences and seminars.

Nn-executive directrs regularly cner withut management

present and the Chairman presides ver these sessins. All

directrs have unrestricted access t cmpany recrds and

inrmatin. Perpetual has a rmal plicy allwing the Bard r

an individual directr t seek independent pressinal advice

at the Perpetual Grup’s expense, prvided that the directr has

btained the prir apprval the Chairman, r i the relevant

directr is the Chairman, the prir apprval a majrity

Perpetual’s nn-executive directrs. In the 2010 nancial year,

n directr sught pressinal advice under this plicy.

7. Nomination, appointment, re-election and

retirement o directors

Cnsistent with ASX Principle 2, the Bard has a Nminatins

Cmmittee with its wn Terms Reerence.

The Nminatins Cmmittee is respnsible r reviewing the size

and structure the Bard. The aim is t ensure that the Bard

cmprises an apprpriate balance skills, diversity, experience

and independence in rder t enhance Bard perrmance and

maximise value r sharehlders. The Nminatins Cmmittee

is respnsible r administering Perpetual’s Plicy n the Appintment Directrs, which sets ut the selectin prcess

and selectin criteria r identiying candidates t ll bard

vacancies. Cnsistent with recent amendments t the ASX

Principles regarding disclsure bard selectin prcesses,

the Plicy is disclsed in ull n ur website. I a bard vacancy

arises, the Nminatins Cmmittee will cnduct a search in

accrdance with the Plicy and the Bard will appint the mst

suitable candidate, having regard t the recmmendatin the

Nminatins Cmmittee. External cnsultants may be engaged

t assist with the identicatin apprpriate candidates.

A directr appinted t ll a casual vacancy must stand r

electin at the next Annual General Meeting.

Upn appintment, new directrs receive a detailed letter

appintment and participate in a cmprehensive inductin

prgram designed t amiliarise them with Perpetual’s

business, strategy, peratins, Grup Executives and senir

management team.

Directrs wh have been in ce withut re-electin r

three years since their last appintment must retire and seek

re-electin at the cmpany’s Annual General Meeting. In rder t

revitalise the Bard, directrs agree nt t seek re-electin ater

three terms three years unless the Bard requests them t d

s. The nine year principle des nt displace sharehlders’ rights

t vte n the appintment and remval directrs, as set ut in

the ASX Listing Rules and the Corporations Act 2001.

8. Meetings o the Board

In the 2010 nancial year, the Bard met 11 times, including

a strategic planning sessin held ver tw days. The Bardreceives perrmance, peratins and risk reprts rm the

Managing Directr, the Chie Financial ocer, the Chie Risk

ocer and the heads each business divisin. The Bard als

receives reprts and updates n strategic issues.

In additin, directrs spend time reading and analysing bard

papers and reprts submitted by management and they engage

in regular inrmal discussins with management. The views

the Chairman and the nn-executive directrs are canvassed

regularly by the Managing Directr and the Grup Executives n

a range strategic and peratinal issues.

The Chie Financial ocer and Cmpany Secretary attend

all bard meetings. other Grup Executives and senirmanagement attend bard and cmmittee meetings t reprt n

particular issues and t engage in discussin n these issues.

Senir executive attendance at bard and cmmittee meetings is

subject t the verriding requirement that n senir executive will

be directly invlved in deciding their wn remuneratin.

Attendance directrs at bard and cmmittee meetings is set

ut in the Directrs’ Reprt n page 22.

9. Board committees

A key cmpnent the Bard’s gvernance structure are its

ur bard cmmittees. Each cmmittee has written Terms

Reerence.

Unless mre requent meetings are required, all cmmittees

except the Nminatins Cmmittee generally meet at least

quarterly. The Nminatins Cmmittee meets at least twice a

year. The Managing Directr attends all cmmittee meetings

except where matters relating t his wn remuneratin and

perrmance are discussed.

The qualicatins and skills the members each cmmittee

are set ut n pages 20 t 22 the Directrs’ Reprt.

The membership and key respnsibilities each the bard

cmmittees (as at the date this reprt) are set ut belw.

Audit Risk and Compliance Committee

Members: Philip Twyman (Chairman), Meredith Brks,

Elizabeth Prust and Paul Brasher

Changes t the cmmittee since last Reprt:

Rbert Savage retired Nvember 2009

Paul Brasher appinted Nvember 2009

The Cmmittee’s rle is t versee the Perpetual Grup’s

accunting plicies and practices, the integrity nancial

statements and reprts, the scpe, quality and independence

Perpetual’s external audit arrangements, the mnitring

the internal audit unctin, the eectiveness risk managementplicies and the adequacy insurance prgrams, and t

reprt n these matters t the Bard. This Cmmittee is

als respnsible r mnitring verall legal and regulatry

cmpliance.



All members the Cmmittee are independent nn-executive

directrs and are required t be nancially literate. At least ne

member must have accunting r nance related expertise.

Members are als required t have an understanding thenancial services industry in which Perpetual perates.

Investment Committee

Members: Paul McClintck (Chairman), Meredith Brks,

Philip Bullck, Peter Sctt and Philip Twyman


Philip Bullck appinted August 2010

The Cmmittee’s rle is t mnitr management t ensure

that it has in place, and carries ut, apprpriate investment

strategies and prcesses r the investment activities cnducted

bth r third parties and n the Grup’s wn behal. ThisCmmittee des nt select stcks r individual Perpetual

unds as stck selectin is carried ut by Perpetual’s asset

management team. All members the Cmmittee are

independent nn-executive directrs.

People and Remuneration Committee

Members: Elizabeth Prust (Chairman), Rbert Savage,

Peter Sctt, Paul McClintck, Paul Brasher and Philip Bullck


Paul Brasher appinted February 2010

Philip Bullck appinted August 2010

The Cmmittee’s rle is t mnitr the Perpetual Grup’s peple

and culture plicies and practices, including the diversity

Perpetual’s wrkrce, and t assist the Managing Directr t

implement air, eective and market cmpetitive remuneratin

and incentive prgrams designed t retain high calibre

emplyees and which demnstrate a clear relatinship between

perrmance and remuneratin. The Cmmittee is authrised

t directly engage external remuneratin advisers and ater

btaining their advice as and when apprpriate, the Cmmittee

recmmends remuneratin r nn-executive directrs, the

Managing Directr, the Grup Executives and ther senir

managers, t the Bard. The Cmmittee als reviews successin

and career plans r key executives.

All members the Cmmittee are independent nn-executive

directrs. New cmmittee cmpsitin requirements t prmte

greater independence are prpsed r intrductin int the

ASX Listing Rules. Perpetual’s Cmmittee already cmplies with

these requirements even thugh they have nt yet rmally cme

int eect.

Nominations Committee

Members: Peter Sctt (Chairman), Rbert Savage,

Paul McClintck, Elizabeth Prust and Philip Twyman


Peter Sctt appinted July 2010

The Cmmittee’s rle is t recmmend t the Bard nminees

r appintment/electin (including re-electin existing bard

members) and t review bard successin plans.

At least annually, the Cmmittee reviews the size and structure

the Bard t ensure that the Bard cmprises apprpriately

qualied and experienced peple. This Cmmittee is als

respnsible r the rmal evaluatin the Bard’s perrmanceas a whle. All members the Cmmittee are independent

nn-executive directrs.

10. Board perormance

The Bard undertakes nging sel-assessment and review

the perrmance the Bard, its cmmittees and individual

directrs annually. In 2010, the Bard undertk a review

bard and cmmittee perrmance with the assistance an

external cnsultant. The Chairman als reviewed with each

directr their individual perrmance and, ater btaining

eedback rm the ther directrs, a nminated directr reviewed

the Chairman’s perrmance. The bard review prcess aims tensure that individual directrs cntinue t cntribute eectively

t the Bard’s perrmance and that the Bard as a whle and its

cmmittees cntinue t unctin eectively.

11. Company secretaries

The Bard has access t the services and advice Janne

Hawkins, the Cmpany Secretary and Glenda Charles, Deputy

Cmpany Secretary. The Cmpany Secretary is accuntable t

the Bard n gvernance matters. Details the experience and

qualicatins Janne Hawkins and Glenda Charles are set ut

in the Directrs’ Reprt n page 22.

12. Perpetual’s subsidiary boards

The bards Perpetual’s subsidiaries are generally made

up executive directrs. The exceptins are Perpetual

Superannuatin Limited and Garnet Superannuatin Pty Limited,

which carry ut Perpetual’s superannuatin activities, and PI

Investment Management Limited, which perates Perpetual’s

glbal equities business. The bards these cmpanies include

nn-executive directrs. These nn-executive directrs are nt

directrs any ther Perpetual Grup cmpanies. Perpetual’s

crprate gvernance plicies are applied t its subsidiaries

but adapted t refect the size and nature each subsidiary’s

peratins and recgnise that the bards mst subsidiaries d

nt cmprise nn-executive directrs. The subsidiary bards are

a key cmpnent Perpetual’s Risk Management Framewrk.

13. Ethical conduct

Perpetual has a Cde Cnduct which draws rm and expands

n Perpetual’s values. The Cde Cnduct applies t all

directrs, executives and emplyees and is designed t assist

them in making ethical business decisins. It is based n the

llwing principles:

▪ acting with integrity

▪ managing cnficts interests apprpriately

▪ uphlding the spirit as well as the letter the law

▪ cmmitment t ur clients and cnsistently delivering

sharehlder value



▪ respecting privacy and cndentiality

▪ maintaining a air and sae wrk envirnment

▪ prtecting thse wh reprt wrngding.

Additinal plicies deal with a range ethical issues such as the

bligatin t maintain client cndentiality and prtect cmpany

inrmatin, the need t make ull and timely disclsure any

price sensitive inrmatin and t prvide a sae wrkplace

r emplyees, which is ree rm discriminatin. The Cde

Cnduct and assciated plicies are in keeping with ASX

Principle 3.

Perpetual’s Chie Risk ocer is Perpetual’s Cde Cnduct

mbudsman and is available t all sta r a cndential

discussin in relatin t Cde Cnduct matters. All new

Perpetual emplyees are required t amiliarise themselves

with the Cde Cnduct as part their inductin training

requirements.

Perpetual has a Whistleblwing Plicy t prtect emplyees

wh make gd aith reprts wrngding, prejudice r

disadvantage. As part Perpetual’s Whistleblwing Plicy, a

third party has been engaged t prvide an independent and

cndential htline r Perpetual emplyees wh preer t raise

their cncern with an external rganisatin.

14. Share dealings by directors and employees

Perpetual’s verriding plicy is that there shuld be n dealings

in the cmpany’s shares by any directr r emplyee wh is in

pssessin price sensitive inrmatin r where the dealing

is r shrt-term r speculative gain. Prvided they d nt

have price sensitive inrmatin, directrs and emplyees are

permitted t deal in the cmpany’s shares nly in ne mnth

perids cmmencing:

▪ 24 hurs ater annuncement the hal year and ull year

nancial results

▪ 24 hurs ater release the Chairman’s May Letter t

Sharehlders

▪

at the cnclusin the Annual General Meeting.

The Share Dealing Plicy requires prir apprval r any share

dealings rm the Chairman in the case directrs, rm

a nminated directr in the case the Chairman and rm

the Managing Directr in the case senir executives. Prir

apprval is als required rm the Managing Directr r Cmpany

Secretary in the case certain emplyees wh are mre likely t

have access t ptentially price sensitive inrmatin thrugh their

psitin in the cmpany.

Perpetual’s Share Dealing Plicy prhibits emplyees rm

entering int ‘hedging arrangements’ in relatin t Perpetual

securities. Perpetual emplyees cannt trade in nancial

prducts issued ver Perpetual securities by third parties r

trade in any assciated prducts that limit the ecnmic risk

hlding Perpetual securities. Perpetual emplyees and

directrs are prhibited rm margin lending in relatin t

Perpetual securities.

A vendr an entity, acquired by Perpetual during the

nancial year, has been permitted t cntinue a margin lan

ver Perpetual securities. The lan was entered int prir

t cmmencing emplyment with Perpetual. The Perpetualsecurities were part the cnsideratin r the acquisitin and

the vendr became an emplyee llwing the acquisitin.

Emplyees wh may have access t sensitive inrmatin in

relatin t Perpetual’s investment activities (such as the asset

management team) are required t btain prir apprval r

persnal trading in any securities.

Perpetual’s Share Dealing Plicy cvers the suggested cntents

in ASX Principle 3.2 r a plicy its type.

15. Risk management

The Bard is cmmitted t eective risk management and allGrup Executives are accuntable r managing risk within

their area respnsibility. They are als required t manage

risk as part their business bjectives, with risk management

integrated acrss business prcesses.

The Chie Risk ocer leads a grup risk management

pressinals, including lawyers, wh prvide the ramewrk,

tls, advice and assistance t enable management t eectively

identiy, assess and manage risk.

Cnsistent with ASX Principle 7, Perpetual’s Risk Management

Framewrk is designed t manage Perpetual’s material business

risks. one cmpnent the ramewrk includes Perpetual’splicies that are designed t address key areas risk including

strategic, nancial and cmpliance risk. Perpetual’s grup

plicies are utlined in Perpetual’s Risk Management Framewrk.

Thrugh mnitring, the Bard and its cmmittees are prvided

with assurance the eectiveness Perpetual’s management

its material business risks. In additin, the Bard reviews

Perpetual’s key risks semi-annually as part the Key Risk

Assessment prcess, urther detailed in Perpetual’s Risk

Management Framewrk.

Perpetual als has an internal audit unctin. The Head Internal

Audit reprts t the Audit Risk and Cmpliance Cmmittee as

well as t the Chie Risk ocer and is independent rm theexternal auditr. Internal audit prvides independent assurance

ver the eectiveness Perpetual’s risk management, internal

cntrl, and gvernance prcesses. The Internal Audit team d

nt make management decisins r engage in ther activities

that culd be perceived as cmprmising their independence.

Each the Chie Risk ocer, Chie Financial ocer and

the Head Internal Audit have the right t and d meet with

the Audit Risk and Cmpliance Cmmittee in the absence

ther management.

Tgether with the Managing Directr and Chie Financial ocer,

Perpetual’s Chie Risk ocer reprts t the Bard n theeectiveness Perpetual’s management its material business

risks in accrdance with ASX Principle 7. The Bard received this

reprt in 2010 tgether with the statements utlined in sectin 16

n the llwing page.



16. Financial reporting

The Bard has adpted plicies designed t ensure that

Perpetual’s nancial reprts:

▪ are true and air

▪ meet high standards disclsure and audit integrity

▪ when read with the Perpetual’s ther reprts t sharehlders,

prvide all material inrmatin necessary t understand

Perpetual’s nancial perrmance and psitin.

T underpin the integrity Perpetual’s nancial reprting and

risk management ramewrk, it is Perpetual’s practice r the

Managing Directr and Chie Financial ocer t reprt t the

Bard in writing that, in their respective pinins:

▪ the nancial recrds the Cmpany have been prperly

maintained in accrdance with sectin 286 the Corporations

Act 2001, and

▪ the nancial statements and ntes cmply with the accunting

standards and give a true and air view the nancial psitin

and perrmance the Cmpany and cnslidated entity.

It is als Perpetual’s practice r the Managing Directr, Chie

Financial ocer and Chie Risk ocer t state t the Bard in

writing that, in their respective pinins:

▪ the statements made regarding the integrity the nancial

statements are unded n a sund system riskmanagement and internal cmpliance and cntrl systems,

which implement the plicies adpted by the bard directrs

▪ the risk management and internal cmpliance and cntrl

systems, t the extent they relate t nancial reprting, are

perating eectively and eciently, in all material respects,

based n the risk management ramewrk adpted by

the Cmpany

▪ the Cmpany’s material business risks (including nn-nancial

risks) are being managed eectively.

The statements reerred t abve are supprted by written

statements rm senir management, detailed nancial analysisand Perpetual’s Risk Management Framewrk. As previusly

nted, the Chie Financial ocer is present when the Bard

cnsiders nancial matters, as s/he attends all bard meetings.

The statements made by the Managing Directr, Chie Financial

ocer and Chie Risk ocer are cnsistent with ASX Principle

7.3. In 2010 the Bard received the statements reerred t abve.

17. Audit process

The Perpetual Grup’s nancial accunts are subject t an

annual audit by an independent, pressinal auditr, wh als

reviews the Grup’s hal yearly nancial statements. The Audit

Risk and Cmpliance Cmmittee versees this prcess n behal the Bard, in accrdance with its Terms Reerence.

The external auditr attends each meeting the Cmmittee, and

it is the Cmmittee’s plicy t meet with the auditr r part

these meetings in the absence management. The Cmmittee

chairman meets with the audit partner at least nce every

quarter, als in the absence management. The auditr has a

standing invitatin t meet with the Cmmittee, its chairman rwith the Bard’s Chairman in the absence management. The

auditr attends the bard meetings at which the annual and hal

yearly accunts are adpted.

The current external auditr is KPMG. The lead audit partner

r 2010 was Andrew Yates and the engagement partner

was Brendan Twining. This is the rst year that Andrew

Yates supervised Perpetual’s audit llwing the retirement

Dr Andries Terblanché ater ve years, in accrdance with

Perpetual’s plicy utlined belw. Brendan Twining has acted

as engagement partner r three years.

18. Auditor independence The Bard has plicies in place relating t the quality

and independence Perpetual’s external auditr. These

plicies include:

▪ the audit must be tendered at least every seven years and ater

the th year, the Bard must make a psitive decisin each

year n whether t retain existing arrangements

▪ the audit partners must be rtated at least every ve years,

with a tw year gap bere a partner may be reappinted

▪ rmer audit partners and audit rm emplyees invlved in

ur audit cannt becme directrs r emplyees PerpetualGrup cmpanies r at least tw years

▪ the external audit rm is prhibited rm prviding nn-audit

services that may materially cnfict with its ability t exercise

bjective and impartial judgment n issues that may arise

within Perpetual’s audit, such as:

– services related t mergers and acquisitins

– tax planning and strategy

– senir management recruitment

– signicant valuatins and appraisals

– design and implementatin nancial inrmatin systems.

In 2010, the greater part ees paid t KPMG r wrk ther

than audit Perpetual Grup accunts was r audit services in

relatin t investment unds which Perpetual cmpanies are

the respnsible entity, manager r trustee. It is the Bard’s view

that these services are apprpriately prvided by KPMG and are

nt services a kind that might impair their impartial judgement

in relatin t the Perpetual Grup’s audit.

19. Market disclosure

Perpetual has a Market Disclsure Plicy t ensure cmpliance

with its cntinuus disclsure bligatins under ASX Listing Rule

3.1 and the Corporations Act 2001. The Managing Directr, Chie

Financial ocer, Chie Risk ocer and Cmpany Secretary are

members the Cntinuus Disclsure Cmmittee respnsible

r deciding inrmatin that is required t be disclsed t the



ASX. Perpetual ensures that all senir management give regular

sign-s as t whether there are matters that require disclsure

t the ASX. The Bard cnsiders its disclsure bligatins at

each scheduled bard meeting. Perpetual’s Market DisclsurePlicy cntains the matters recmmended by ASX Principle 5.

Perpetual’s website includes cpies annuncements ldged

with the ASX by Perpetual. Cnsistent with recent amendments

t the ASX Principles, advance nticatin scheduled analyst

briengs are prvided t sharehlders and the briengs are

webcast. These can be und n the cmpany’s website alng

with media releases, briengs and annual reprts r the last

ve years.

20. Shareholders

The Bard is cmmitted t ensuring that sharehlders are

ully inrmed material matters that aect Perpetual’s psitin

and prspects. It seeks t accmplish this thrugh a strategy that

includes:

▪ the hal year results released in February each year

▪ the Chairman’s May Letter t Sharehlders each year

▪ the ull year results released in August each year

▪ the Annual Reprt released in September each year

▪ the Chairman’s and Managing Directr’s addresses t the

Annual General Meeting

▪ the psting market briengs and ther signicant inrmatin

n Perpetual’s website as sn as it is disclsed t the market.

Perpetual hlds its Annual General Meeting in octber and a

cpy the ntice Annual General Meeting is psted n the

Perpetual website. The Bard encurages sharehlders t attend

the Annual General Meeting r t appint a prxy t vte n their

behal i they are unable t attend. The rmal addresses at the

Annual General Meeting are webcast r thse sharehlders wh

are unable t be present. In accrdance with the Corporations

Act 2001, a representative the external auditr, KPMG, attends

the Annual General Meeting r the purpse answering

sharehlder questins abut the audit reprt and audit prcess.

21. Remuneration

Perpetual has rmed a Peple and Remuneratin Cmmittee

cnsistent with ASX Principle 8.1. Its rle is set ut n page 37

this reprt. Details bard and executive remuneratin

are set ut in the remuneratin reprt which cmmences n

page 34. In accrdance with the ASX Principles, the structure

nn-executive directr remuneratin is clearly distinguished rm

that executive directrs and senir management.

22. Stakeholders

At Perpetual we take advantage pprtunities t build ur

scial, envirnmental and nancial perrmance in ways that

enhance ur cre values and business sustainability. We draw n

ur peple’s experience, knwledge and expertise in investing,

gvernance, nancial advice and trusteeship t cntribute

psitively t the cmmunity. We cus n activities where we can

add value while minimising ur envirnmental impact.

our activities include:

▪ having high standards crprate gvernance and

business prbity

▪ investing respnsibly and encuraging sustainable business

practices

▪ cntributing time and mney t charities

▪ reducing the envirnmental impact ur peratins

▪ encuraging practices that recgnise the imprtance

ur peple.

Sme examples hw we are achieving these gals include:

Governance

Perpetual has received a number awards r crprate

gvernance ver the years. one the mre recent was the

award equal rst and ve stars in the 2009 WHK Hrwarth

Crprate Gvernance Reprt, an independent assessment

crprate gvernance structures and plicies Australian’s tp

250 cmpanies.

Investment

Long-term investment approach

Perpetual’s asset managers cus n quality investments rthe lng-term. Their initial investment criteria include:

▪ the strength the cmpany’s balance sheet

▪ whether the cmpany can demnstrate a recurring

earnings stream

▪ the quality the business and

▪ the sundness management running the cmpany.

Perpetual believes this apprach encurages behaviur in the

lng-term interests sharehlders.

Signatory to the United Nations Principles or Responsible

Investment

In octber 2009, Perpetual became a signatry t the United

Natins Principles r Respnsible Investment (PRI), representing

a cmmitment t take envirnmental, scial and gvernance

actrs int accunt in ur investment decisin-making and

wnership practices. PRI encurages institutinal investrs t

adpt sustainable business practices, a stance which is aligned

t Perpetual’s lng-term investment apprach.

Social

Philanthropy and the Perpetual Foundation

Perpetual has been managing charitable mney r ver 120

years. In 1998, we established the Perpetual Fundatin, which

brings the genersity individuals and rganisatins tgether

with ur resurces and expertise in managing charitable unds.



The Philanthrpic team supprts the nt-r-prt sectr via

annual grant seeker wrkshps, quarterly newsletters t charities

and acilitating a number knwledge sharing pprtunities.

The Perpetual Fundatin has als spnsred sectr researchincluding research at the Australian Centre r Philanthrpy and

Nn-Prt Studies.

Sta giving

Perpetual supprts its wn emplyees wh wish t give back t

the cmmunity thrugh its sta giving prgram.

Thrugh the prgram, Perpetual emplyees are able t make

regular dnatins t a range cmmunity rganisatins rm

their pre-tax pay. Perpetual matches emplyees’ dnatins

thrugh the Perpetual Fundatin.

Political donations

In 2010, Perpetual made n plitical dnatins.

Environmental

Carbon Disclosure Project

Perpetual has respnded t the last three Carbn Disclsure

Prject (CDP) surveys and has been included in the Climate

Disclsure Leadership Index (Australia and New Zealand) n all

three ccasins.

Our people

Perpetual is cmmitted t attracting, develping and engaging

emplyees in a culture that is underpinned by Perpetual’s values.

Perpetual’s inclusive culture is based n team wrk and

cllabratin and allws high perrming emplyees t excel and

be rewarded r their success. There is a cus n develping

leaders rm within Perpetual and n emplyee engagement.

Emplyee engagement is assessed annually and results are used

t develp uture peple initiatives.

The wellbeing emplyees is supprted by nancial, insurance,

health, tness and wrk/lie balance emplyee benets. Sme

the plicies that supprt emplyee wrk/lie balance include:

▪ Cntributin Leave plicy, which prvides an additinal week

‘Cntributin Leave’ t allw emplyees t make a dierence

t their cmmunity, amily r persnal well-being

▪ Purchased Leave plicy, which enables emplyees t apply r

up t three weeks additinal leave t spend mre time with

amily, r hlidays r greater wrk/lie balance

▪ Sabbatical Leave and Leave Withut Pay plicies, which allw

emplyees t take an extended perid unpaid leave where

they may chse t take time ut t be with their amily, travel

verseas r undertake urther study

▪ Wrking Frm Hme plicy, which allws emplyees t wrk

rm hme r greater wrk/lie balance.

Perpetual aims t meet the needs emplyees at dierent

stages their lives and parental leave benets are available r

bth men and wmen.

Flexible wrking arrangements prvide emplyees with urther

pprtunities t achieve wrk/lie balance and increase emplyee

engagement. Perpetual is currently develping a tailred fexible

wrking prgram t supprt managers and emplyees inmanaging requests r fexibility.

Diversity

Perpetual has implemented a number initiatives t supprt an

inclusive culture r its diverse emplyees, including the creatin

a Diversity Strategy. The Diversity Strategy is cusing n the

llwing key areas:

▪ representatin wmen in senir management rles

▪ meeting the needs the generatins – Baby bmer,

Generatin X and Generatin Y

▪ fexibility r emplyees

▪ ethnicity and cultural diversity.

T encurage greater representatin wmen at the mst senir

levels the rganisatin, high perrming and senir wmen are

ered career develpment, mentring and quarterly netwrking

rums t acilitate learning and knwledge sharing pprtunities.

There are urther initiatives in develpment including rening

recruitment prcesses r leadership psitins t increase emale

representatin at the mst senir levels the rganisatin.

In May 2010 all Perpetual emplyees were invited t participate in

an annymus Diversity Survey t gauge the needs emplyeesrm dierent demgraphic grups including gender, age, religin

and culture. The results this survey will be used t establish

uture diversity initiatives.

Perpetual’s Bard and Peple and Remuneratin Cmmittee

are cnsidering apprpriate diversity targets r Perpetual’s

wrkrce and this will be publicly reprted in uture years.

Sharehlders wh wish t knw mre abut Perpetual’s

crprate plicies are invited t review ur website

www.perpetual.cm.au r cntact us by email at

[email protected]. Cmments and suggestins rm

sharehlders are welcme.



Dear Shareholder

Welcme t Perpetual’s Remuneratin Reprt r 2010. We hpe yu fnd the reprt inrmative and that it prvides a clear

understanding the remuneratin strategy at Perpetual.

While the recmmendatins rm the Prductivity Cmmissin have yet t be legislated, we supprt the recmmendatins that seek

t simpliy the remuneratin reprt and better engage sharehlders. In this regard, while the detail the pending legislatin is still

unknwn, we have aimed t present a reprt that cmplies with the spirit the Prductivity Cmmissin’s recmmendatins while

cntinuing t meet high standards disclsure.

Last year, we advised that we had cnducted a majr review ur executive remuneratin plicy and arrangements. Frm this

we cnfrmed that Perpetual strikes an apprpriate risk/reward balance that treats ur emplyees, sharehlders and clients airly.

During the year ending 30 June 2010, we have cntinued t refne ur executive remuneratin strategy based n eedback rm ur

sharehlders, and as the utcmes rm varius Australian Gvernment initiatives have been annunced and market practice has

develped. We are cmmitted t urther refnement ur remuneratin strategy as new legislatin is fnalised and market practice

cntinues t evlve.

The Peple and Remuneratin Cmmittee has als cnducted an assessment ur practices against the APRA Prudential

Standards. Althugh cmpliance with these standards is nt mandatry r Perpetual, we believe they represent gvernance best

practice and have vluntarily agreed t adpt them.

on 23 June 2010, Perpetual annunced that Managing Directr, David Deverall, had given ntice his resignatin. As a result, the

changes t the remuneratin structure r Grup Executives rm 1 July 2010 as described in this reprt will nt apply t Mr Deverall,

hwever they will apply t the new Managing Directr when appinted. As set ut in the ASX annuncement, Mr Deverall has a

cntractual entitlement t receive a shrt-term incentive r the year ended 30 June 2010, and a pr-rata shrt-term incentive r

the year ending 30 June 2011. N lng-term incentives will vest as a result Mr Deverall’s resignatin, and all unvested lng-term

incentives will be reited n ceasing emplyment.

Thank yu r taking the time t read this reprt. As always, we welcme yur eedback.

Elizabeth Proust, AO

Chairman, Peple and Remuneratin Cmmittee

Remuneration Report

Glossary i pEPS Earnings per share – r the purpses measuring the grwth in

EPS t determine the vesting lng-term incentive awards made t

executives, EPS is dened as basic Earnings Per Share ater tax andany adjustments determined by the PARC.

KMP Key management persnnel – these are the individuals wh havethe authrity and respnsibility r planning, directing and cntrllingthe cmpany’s activities directly r indirectly. This includes directrs,whether executive r therwise, the Perpetual cnslidated grup.

LTI Lng-term incentive – LTI is a key eature Perpetual’s remuneratinstrategy and seeks t align executive remuneratin with sustainablesharehlder wealth creatin. LTI is granted in the rm shares and,in the case the Managing Directr, ptins. Mre details abut LTIis included n page 40.

NPAT Net prt ater tax – NPAT, r the purpses calculating PPP, isdened as net prt ater tax with the pst-tax amunt the PPPadded back, and adjusted r any ther items determined by theBard’s Audit Risk and Cmpliance Cmmittee and Peple andRemuneratin Cmmittee (r example, capital items that d nt

refect management perrmance r day-t-day business peratinsand activities).

PPP Prt Participatin Pl – a pl created t und STI payments r themajrity emplyees based n the cmpany’s net prt ater tax.N pl is created unless the cmpany’s Return n Equity (RoE)perrmance measure is met. This is explained in mre detail n page 40.

ROE Return n equity – RoE is a measure hw well a cmpany has usedsharehlders’ unds and reinvested earnings t generate additinal

earnings. RoE is equal t Perpetual’s net prt ater tax divided byweighted average sharehlders’ equity, expressed as a percentage.

STI Shrt-term incentive – an incentive paid r meeting annual targetsaimed at delivering ur lnger term strategic plan. Under the STI Planemplyees may be paid a discretinary incentive (less applicable taxesand superannuatin) based n their individual perrmance as well asthe perrmance their team, their divisin and Perpetual as a whle.Mre details abut the STI Plan is included n page 40.

TSR Ttal sharehlder return – TSR is dened as share price grwthplus dividends paid ver the measurement perid. Dividends areassumed t be reinvested n the ex-dividend date. Where applicable,adjustments may be made r any capital recnstructins r rights rbnus issues.

UPAT Underlying prt ater tax – UPAT, r the purpses calculating PPPprir t 2010, is dened as underlying prt ater tax with the pst-tax amunt the PPP added back, and adjusted r any ther items

determined by the Bard’s Audit Risk and Cmpliance Cmmitteeand Peple and Remuneratin Cmmittee. Fllwing eedback rmsharehlders, this measure was replaced with NPAT r the purpses calculating the PPP r 2010.



Remuneration outcomes

or 2010 This sectin prvides a summary remuneratin utcmes

at Perpetual r the year ended 30 June 2010.

Fixed remuneration There was n increase in xed remuneratin r the Managing

Directr r Grup Executives in 2009/10. Fixed remuneratin

increases r emplyees were nly granted n prmtin r r

signicant increases in rles and respnsibilities.

Short-term incentive paymentsFllwing eedback rm sharehlders, we have replaced

underlying prt ater tax (UPAT) with net prt ater tax (NPAT)

r the purpses determining the Prt Participatin Pl

(PPP) used t und shrt-term incentive (STI) payments. This

mre clsely aligns the unding the PPP r emplyees with

sharehlder utcmes.

The STI pl available t emplyees increased by 113%, refecting

the increase in NPAT r the year 142%.

Long-term incentive vesting outcomesLng-term incentive (LTI) grants made t the Managing Directr

in 2006 that were due t vest in 2010 have been reited as the

stretch ttal sharehlder return (TSR) and earnings per share(EPS) grwth targets were nt met. N LTI grants made t the

Managing Directr in 2007 have vested as a result the initial

test the perrmance targets n 30 June 2010 and will lapse

n his resignatin, alng with ther unvested LTI.

LTI grants made t Grup Executives in 2006 will be re-tested

n 1 octber 2010 and appear unlikely t vest. Grants made

t Grup Executives in 2007 are als unlikely t vest.

Non-executive director ees There were n increases in directrs’ ees during 2009/10.

A mdest increase in ees 3% r the Chairman and members

the Bard, and the chairmen and members bardcmmittees, will apply rm 1 July 2010. This will be the rst

increase in directr ees since 1 July 2007. See page 57 r

urther details.

Changes to the executive

remuneration ramework toapply rom 1 July 2010Fllwing the majr review ur executive remuneratin plicy

and arrangements in 2009, we have cntinued t rene the

remuneratin strategy in light emerging market practice and

the new regulatry envirnment. The llwing key changes

will apply t Grup Executives rm 1 July 2010 and t the new

Managing Directr n appintment:

▪ individuals must satisy certain risk and behaviur measures as

assessed by the Bard t be eligible t receive a STI payment

▪

the threshld rm which STI payments must be deerred intshares has been lwered

▪ the LTI vesting schedule r the EPS perrmance hurdle has

been amended s that vesting cmmences when Perpetual’s

EPS grwth is 5% per annum

▪ re-testing LTI perrmance measures has been remved

▪ accelerated vesting LTI n terminatin under certain

circumstances has been remved

▪ a minimum sharehlding guideline has been intrduced.

We believe that these changes will strengthen the alignment perrmance-based remuneratin t Perpetual’s risk management

ramewrk and be mre meaningul r participants.



The table belw prvides mre detail n these changes:

Feature Arrangements or 2009/10 Arrangements rom 1 July 2010 Rationale or change

A risk and behavioursgateway on STI hasbeen introduced

▪ A Grup return n equity (RoE) perrmancemeasure must be met bere any STI pl iscreated.

▪ Each individual has perrmance gals thatinclude risk and behaviur measures. Hweverthese are nt explicitly used as a gateway tdetermine eligibility r a STI payment.

▪ The existing RoE perrmance measure willcntinue t apply.

▪ Individuals must als satisy certain risk andbehaviur measures as assessed by the Bardt be eligible t receive an STI payment.

▪ Strengthens therelatinship betweenrisk management andremuneratin.

STI deferral ▪ Threshld: the threshld rm which STIpayments must be paid in shares rather thancash is tw times target STI.

▪ Deerral perid: shares are subject t athree-year trading restrictin.

▪ Freiture: shares are nly reited i theexecutive is summarily dismissed during thedeerral perid.

▪ Threshld: the threshld rm which STIpayments must be paid in shares rather thancash will be lwered t ne times target STI.

▪ Deerral perid: shares may vest tw yearsrm the date they are granted, and may besubsequently traded subject t the Perpetualshare dealing plicy.

▪ Freiture: leaver prvisins apply such that

i, during the deerral perid, the executiveresigns rm Perpetual, r his r heremplyment is terminated withut ntice rdue t pr perrmance, the shares shall bereited. Sme r all shares held in deerralmay be reited i the Bard subsequentlydetermines that the STI was awarded nunrealised prts that did nt eventuate,inaccurate inrmatin (r example, thatrequires the nancial statements t berestated), r rm unacceptable risk-taking.

▪ Strengthens therelatinship betweenrisk management andremuneratin.

EPS performancemeasure

▪ Full vesting ccurs when Perpetual’s EPSgrwth is at least 10% pa. N vesting ccurs i Perpetual’s EPS grwth is less than 10% pa.

▪ Fr LTI grants made ater 1 July 2010, theEPS vesting schedule will be changed s thatvesting cmmences when Perpetual’s EPSgrwth is 5% pa. Vesting will be scaled s that2% vests r ever y 0.1% EPS grwth ver5.0% pa and increasing t 100% vesting when

Perpetual’s EPS grwth is 10% pa.

▪ Reduces the‘cli-edge’ eect the vestingschedule, and

▪ makes LTI mremeaningul texecutives.

Re-testing of LTIperformance measures

▪ The EPS and TSR perrmance measuresare tested at the end the three-yearperrmance perid, and any unvested LTIater this test is re-tested at the end theurth year.

▪ N re-testing will apply t LTI grants made ater1 July 2010.

▪ This change has beenmade in respnset eedback rmsharehlders.

Treatment of LTIon termination

▪ LTI awards r Grup Executives have theptential t accelerate vesting n terminatinin certain cases such as retrenchment, deathr permanent disablement, r terminatinwith ntice.

▪ Fr grants made ater 1 July 2010, leaverprvisins will be amended s that in caseswhere LTI is retained n terminatin (rexample, in the case retrenchment rterminatin with ntice), vesting will remainsubject t the riginal perrmance measuresand perrmance perid. Any LTI unvestedater 24 mnths rm terminatin will lapse.

▪ Strengthens thealignment between theinterests executivesand sharehldersin the lng-termperrmance Perpetual, extendingbeynd theexecutive’s tenure.

Introduction ofminimum shareholdingguidelines

▪ N guidelines currently apply. ▪ Executives are expected t establish and hlda minimum sharehlding t the value :

– Managing Directr: 1.5 times ixedremuneratin

– Grup Executives: 0.5 times ixedremuneratin.

▪ Under these guidelines, the value eachvested share r ptin held in tax deerral bythe executive is treated as being equal t 50% that share r ptin.

▪ A ve-year transitin perid, cmmencing n1 July 2010 r current executives, will giveexecutives a reasnable amunt time tmeet their sharehlding guideline.

▪ Strengthens thealignment between theinterests executivesand sharehldersin the lng-termperrmance Perpetual.



1. The role o the People and Remuneration

Committee

The Peple and Remuneratin Cmmittee (PARC) is cmmittedt assisting the Bard in ullling its respnsibilities t

sharehlders thrugh a strng cus n gd gvernance, and

in particular, the principles accuntability and transparency.

PARC perates under delegated authrity rm the Bard

and its activities are gverned by the Terms Reerence.

The Cmmittee’s Terms Reerence are available n ur website

www.perpetual.cm.au and are shwn graphically belw.

As can be seen, the PARC’s Terms Reerence are brad,

with remuneratin as well as executive develpment, talent

management and successin planning being key areas cus.

This enables the PARC t spend time n ensuring there is high

quality successin planning and executive develpment at all

levels Perpetual.

The members the Cmmittee r 2010 were:

▪ Elizabeth Prust (Chairman)

▪ Paul Brasher

▪ Paul McClintck

▪ Rbert Savage

▪ Peter Sctt.

The Cmmittee met six times during the year and attendance at

these meetings is set ut n page 22 the Directrs’ Reprt.

At the invitatin the Cmmittee, David Deverall (Managing

Directr) and Janine Stewart (Grup Executive Peple and

Culture) attended meetings except where matters assciated

with their wn perrmance evaluatin, develpment and

remuneratin were cnsidered.

The PARC cnsiders advice and views rm thse invited t

attend meetings and draws n services rm a range external

surces, including remuneratin cnsultants. Hewitt Assciates

were engaged by the PARC as ur principal remuneratin adviser

during the year.

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2. Overview o remuneration or year ended 30 June 2010

This reprt sets ut remuneratin arrangements r all key management persnnel (KMP). We have assessed the KMP t be the

nn-executive directrs Perpetual Limited, the Managing Directr and Grup Executives, as detailed in sectin 6 this reprt. The inrmatin in this remuneratin reprt has been audited as required by sectin 308(3C) the Corporations Act 2001.

2.1 Managing Director and Group Executives

Item Summary

Remuneration policy The PARC has apprved a remuneratin plicy r emplyees based n the llwing ive key principles:

▪ Variable pay shuld be a eature all emplyees’ remuneratin. Fr the Managing Directr and Grup Executives variable

pay rms a signiicant part verall remuneratin. Fixed remuneratin shuld be cmpetitive with cmparable jbs in

apprpriate cmparatr rganisatins.

▪ Variable pay is linked t sharehlder wealth creatin and individuals are clear n perrmance criteria.

▪ Shrt-term incentives (STI) payments are based n yearly perrmance and uncapped t allw r recgnitin perrmance.

▪ STI payments shuld be made ut the net prit the cmpany.

▪

Equity participatin within the cmpany shuld be used t encurage a sense wnership, be apprpriately tied t stretchtargets and encurage retentin key individuals. At 30 June 2010 there was 8.50% share capital in the emplyee share

plans, 7.63% this was held in unvested shares and 0.87% in unvested ptins. Unvested shares and unvested ptins are

subject t perrmance hurdles.

Remuneration structure The structure ur remuneratin r the Managing Directr and Grup Executives cmprises three cmpnents:

▪ A ixed remuneratin cmpnent (Fixed)

▪ An STI cmpnent

▪ A cmpnent related t lnger-term perrmance and retentin (LTI).

We seek t ensure that remuneratin is air, reasnable and aligned t perrmance.

The target remuneratin mix is determined in cnsideratin perrmance-based incentives, increasing with the level respnsibility and criticality the executive’s rle.

Alignment with soundrisk management

The structure ur remuneratin ensures that risk management is a key perrmance metric in determining at-risk elements remuneratin, thrugh speciic perrmance gals and targets. Sund risk management practices include strict gvernance and

deerred elements remuneratin t ensure a lng-term cus and alignment t sharehlders.

Fixed remuneration Fixed remuneratin is typically set arund the crrespnding median the market r each emplyee. By participating inrelevant remuneratin surveys and clsely mnitring the market, we develp remuneratin plicies by cmparing ur cmpanyt ther Australian-based inancial institutins. In sme circumstances, such as r specialist technical psitins, we maycmpare the psitin t a mre targeted grup cmparable cmpanies.

We calculate ixed remuneratin n a ‘ttal cst t cmpany’ basis, including the cst emplyee beneits such as mtrvehicles, superannuatin and car parking, tgether with ringe beneits tax (FBT) applicable t thse beneits.

There are n guaranteed increases t ixed remuneratin in emplyee cntracts.

Short-term incentive (STI) Shrt-term incentives are incentives paid r meeting annual targets aimed at delivering ur lnger term strategic plan.

Fur principles deine ur apprach t shrt-term incentives:

▪ The majrity permanent emplyees are eligible t receive a STI payment.

▪ Incentive payments are a signiicant part executives’ remuneratin.

▪ Incentive payments r mst emplyees are unded ut net prit ater tax, linking STI t sharehlder wealth creatin.

Incentive payments r a small number ther emplyees are based n achievement speciic perrmance targets.

▪ Individual incentive payments are uncapped t allw r recgnitin perrmance that signiicantly exceeds expectatins.

Fr the majrity emplyees, STI is paid thrugh the Prit Participatin Pl. It is awarded based n emplyee perrmanceand is available t emplyees immediately as cash, except where the STI payment exceeds tw times the emplyee’s target STI.In these cases the excess abve tw times will be autmatically awarded as shares. These shares vest immediately upn beinggranted t the emplyee, hwever they may nt be traded until a perid three years has lapsed, even i this is beynd theemplyee’s terminatin date.

Long-term incentive (LTI) A key eature Perpetual’s remuneratin strategy is ensuring a level equity participatin that aligns remuneratin withsustainable sharehlder wealth creatin.

The key principles that underpin LTIs are that:

▪ we prvide LTI as equity in the cmpany s that executives eel a sense wnership

▪ LTI grants represent an imprtant prprtin executive remuneratin

▪ we encurage sustained perrmance rm ur executives by setting challenging targets.

LTI is granted in the rm shares and, in the case the Managing Directr, ptins. These typically vest ver three yearsi Perpetual’s TSR exceeds the median the S&P/ASX 100 (excluding listed prperty trusts), and Perpetual’s EPS exceedsa set target. The perrmance hurdles perate independently and carry an equal weighting.

I the targets are met at the three-year testing pint, then the LTI vests; i the targets have nt been met they are retestedat the ur-year mark and, t the extent the targets have nt been met, the LTI lapses and is reited.



Item Summary

Link to performance A key tenet ur remuneratin philsphy is that remuneratin is clsely aligned t Perpetual’s verall perrmance. Thrughut this reprt, the varius measures cmpany perrmance r the year ended 30 June 2010 illustrate hw thesehave impacted n remuneratin utcmes. This is set ut in mre detail in sectin 5 this remuneratin reprt.

Employment agreements Cre remuneratin entitlements and terms and cnditins emplyment, including terminatin arrangements, are set utin each executive’s emplyment agreement and summarised in this reprt.

Remuneration receivedin 2010

This reprt details the remuneratin the Managing Directr and Grup Executives r the year ended 30 June 2010.See tables n pages 47 t 59.

Hedging and sharetrading policy

Perpetual’s share dealing plicy prhibits emplyees and directrs rm entering int hedging arrangements in relatin tPerpetual securities. Perpetual emplyees and directrs cannt trade in inancial prducts issued ver Perpetual securities bythird parties r trade in any assciated prducts that limit the ecnmic risk hlding Perpetual securities. Share dealing cannly take place during agreed trading windws thrughut the year and is subject t certain apprvals (as set ut n page 43 this reprt).

2.2 Non-executive directors

Item Summary

Remuneration policy The cmpany’s remuneratin plicy r nn-executive directrs aims t ensure Perpetual can attract and retain suitably skilled,experienced and cmmitted individuals t serve n the Bard.

Ttal remuneratin available t nn-executive directrs is apprved by sharehlders and is currently $2,250,000, as apprvedat the 2006 Annual General Meeting. Ttal ees paid t nn-executive directrs in 2010 were $1,780,644.

Nn-executive directrs d nt receive perrmance-related remuneratin and are nt entitled t receive perrmance sharesr ptins ver Perpetual shares.

Fee framework Nn-executive directrs receive a base ee. With the exceptin the Chairman, they als receive ees r participating n bardcmmittees, either as chairman r as a member the cmmittee.

In additin t the base ee, Perpetual pays superannuatin cntributins up t 9% nn-executive directr ees, cappedat the maximum superannuatin cntributins base prescribed under Superannuatin Guarantee legislatin. Emplyersuperannuatin cntributins may be received in ne Perpetual’s emplyee superannuatin unds r a cmplyingsuperannuatin und their chice.

Nn-executive directrs may als salary sacriice additinal superannuatin cntributins ut their base ee i they s chse.

Alignment with shareholderinterests

In accrdance with the cmpany’s cnstitutin, nn-executive directrs are required t acquire a minimum 500 Perpetualshares n appintment and at least 1,000 shares when they have held ice r three years r mre.

The Nn-executive Directr Share Purchase Plan allws nn-executive directrs t sacriice up t 50% their directrs’ ees tacquire shares in Perpetual. Shares acquired via ee sacriice are nt subject t perrmance targets as they are acquired in lieu cash payment by the cmpany. Fllwing changes t taxatin rules, this plan has been clsed since 1 July 2009.

Shares are held in the plan until the earlier a perid ten years r until the directr retires rm the Bard.

Nn-executive directrs d nt receive share ptins. Directrs’ hldings held directly r indirectly (r example, thrugh asuperannuatin und) are shwn in the table n page 59.

Fees received in 2010 This reprt includes details each nn-executive directr’s remuneratin r the year ended 30 June 2010. See page 58.

Retirement policy Directrs wh have held ice r three years since their last appintment must retire and seek re-electin at the cmpany’s Annual General Meeting (AGM).

In rder t revitalise the Bard, nn-executive directrs agree nt t seek re-electin ater three terms three years. Hwever,the Bard may invite a nn-executive directr t cntinue in ice beynd nine years i it is advantageus t the cmpany rreasns such as Bard leadership r cntinuity.

2.1 Managing Director and Group Executives (continued)



2.3 Asset manager remuneration arrangements

The remuneratin arrangements r asset managers are

structured t ensure that we remunerate them apprpriately

within a highly cmpetitive market place, as well as ensuring

reward r adding value t client prtlis.

It is an arrangement that cnsists xed and variable

cmpnents primarily driven by investment perrmance

utcmes ver shrt and lng-term investment hrizns. In

many cases incentives are paid utside the PPP and linked t

utperrming benchmark indices which are aligned with client

bjectives. Incentives are paid as a mixture cash and shares

and expensed as part Perpetual’s net prt ater tax. Where

paid as shares, these shares vest prgressively ver many years.

This prvides r reward r sustainable lng-term perrmance

and supprts retentin bjectives.

3. Short-term incentives

Shrt-term incentives are incentives paid in the rm cash and

deerred shares r meeting annual targets aimed at delivering

ur lnger term strategic plan.

3.1 How STI is unded

A Prt Participatin Pl (PPP) is created each year t und STI

r the majrity emplyees. The size the PPP is determined

by the cmpany’s net prt ater tax.

Sme asset managers, whse STI is linked explicitly t

investment perrmance, are excluded rm the PPP. In additin,

participants in the Private Wealth and Crprate Trust Sales

Incentive Plans als have a prprtin their STI unded utside

the PPP.

The PPP is linked t prt perrmance, where increased prts

create a larger pl and decreased prts result in a smaller pl.

We use return n equity (RoE) and net prt ater tax (NPAT) t

gvern the peratin the PPP.

The PPP perates as llws:

▪ The prt pl begins t accumulate nly when Perpetual’s

RoE r the current year exceeds 65% cmpanies listed n

the S&P/ASX100 (excluding listed prperty trusts) measured na rlling three-year basis.

This measure was chsen t ensure that Perpetual’s capital

utilisatin des nt all t unacceptable levels as the cmpany

seeks t grw net prts.

▪ once the RoE target is met, the prt pl accumulates based

n a percentage NPAT. Althugh the value the pl is

uncapped, the accumulatin rate is ultimately capped at ne

third incremental NPAT where year-n-year NPAT grwth is

in excess 40%.

This measure was chsen t encurage year-n-year grwth in

net prt and t ensure a high crrelatin exists between NPATperrmance and incentive utcmes.

▪ I there is a year-n-year all in NPAT, mechanisms are included

within the plan t limit the pl size in uture years until the

previus NPAT ‘high water mark’ is passed.

NPAT is dened as net prt ater tax with the pst-tax

amunt the prt pl added back, and adjusted r items

determined by the Audit Risk and Cmpliance Cmmittee and

Peple and Remuneratin Cmmittee (r example, capital

items such as realised gains n the sale an investment

that d nt refect management perrmance r day-t-day

business peratins and activities).

▪ Prir t 2010, underlying prt ater tax (UPAT) was used

r the purpses determining the PPP. Frm 2010, UPAT

has been replaced by NPAT because it mre clsely aligns

the unding the PPP paid t emplyees with sharehlder

utcmes.

3.2 Allocation o the PPP

Each year perrmance targets and ther perrmance gals are

set r all emplyees, in line with divisin and cmpany targets.

These perrmance bjectives are classied int six categries

(being Financial, Strategic, operatinal, Peple, Risk and Values).

The perrmance bjectives are assessed thrughut the year

as part the perrmance management prcess in which all

emplyees participate. At year end, an annual assessment

each emplyee’s perrmance is made and the PPP is then

allcated based n relative divisinal and emplyee perrmance.

Allcatins t the Managing Directr and Grup Executives are

subject t Bard apprval.

3.3 Delivery o STI

STI payments are delivered in cash except where the STI

utcme is mre than tw times the target STI, in which case

the excess amunt must be taken as Perpetual shares subject t

a three-year trading restrictin. Dividends n shares are paid t

emplyees during the restrictin perid.

Emplyees may elect t sacrice up t $1,000 their cash STI

payment int shares under the Tax Exempt Share Plan. Shares

acquired via this sacrice are nt subject t perrmance targets

as they are acquired in lieu a cash payment by the cmpany;

hwever the plan’s trading restrictins cntinue t apply until theearlier three years rm the date grant r n terminatin

emplyment, bere the shares can be released.

4. Long-term incentives

Lng-term incentives within Perpetual are paid as shares and, in

the case the Managing Directr, ptins. This sectin prvides

details the plans in place and an verview hw they wrk.

4.1 Executive share program and executive

options program

This sectin utlines the details the LTI plans in which the

Managing Directr and Grup Executives participate.

Executive shares

The Executive Share Plan (ESP) was apprved by sharehlders at

the 1997 AGM and amended at the 1999 AGM.



The issue price shares under this plan is the weighted average

price Perpetual’s shares traded n the ASX during the ve

business days preceding the issue date r annuncement date

r relevant individuals.

Shares are either purchased n market r issued by the

cmpany and are held in trust r a maximum ten years.

They are subject t reiture i perrmance targets and

tenure cnditins are nt met.

The Managing Directr and Grup Executives receive dividends

and have vting rights while the shares are held in trust; the nly

exceptin t this, as apprved by the PARC in 2009, is that uture

share grants with business targets will have dividends reinvested

r held as cash, with the reinvested shares and cash being subject

t the same perrmance targets as the underlying shares. N lan

is made available r cnsideratin payable by the executives tacquire shares under the ESP. Reer t the table shwing unvested

and vested share hldings r the Managing Directr and Grup

Executives n pages 52 t 54 r urther details.

Executive options

The Executive optin Plan was apprved by sharehlders at the

1998 Annual General Meeting.

optins are granted ver rdinary shares. The exercise price,

determined in accrdance with plan rules, is based n the

weighted average price Perpetual’s shares traded n the ASX

during the ve business days preceding the date ptin grant.

N cnsideratin is payable t acquire the ptin and n vting

r dividend rights are attached t the ptin r the unissued

rdinary share underlying the ptin.

When exercisable, each ptin is cnverted int ne rdinary

share Perpetual Limited. optins vest ver three r ur

years, depending upn when and i perrmance targets are

met. All vested ptins may be exercised n r ater the vesting

date. optins expire at the end the exercise perid six years

ater the grant date. Reer t the table ‘optin hldings

Managing Directr and Grup Executives’ n page 51 r details

ptins granted.

other than a grant in accrdance with the Managing Directr’scntract, n ptins were granted in 2010.

Perormance targets

LTI perrmance targets are directly linked t cmpany

perrmance.

Each share r ptin grant is divided int tw equal tranches,

with the llwing perrmance targets being applied t each

respective tranche:

▪ The rst tranche vests based n Perpetual’s ttal sharehlder

return (TSR), measured against cmpanies listed n the S&P/

ASX100 (excluding listed prperty trusts) determined at thedate the LTI is granted. TSR is measured independently by Link

Market Services and reprted t the PARC.

▪ The secnd tranche vests based n grwth in Perpetual’s EPS.

Shares are held in trust r a maximum 10 years rm the

grant date, while vested ptins may be exercised up t the sixth

anniversary grant date.

TSR perormance target

TSR is dened as share price grwth plus dividends paid ver

the perrmance perid rm the initial TSR measurement date.

Dividends are assumed t be reinvested n the ex-dividend date.

Where applicable, adjustments may be made r any capital

recnstructins r rights r bnus issues t ensure participants are

neither advantaged nr disadvantaged by such capital events.

The TSR perrmance target requires Perpetual’s TSR ver

the perrmance perid t be equal t r better than the TSR

hal the cmparatr grup cnsisting cmpanies listed

n the S&P/ASX100 (excluding listed prperty trusts). Fr TSR

perrmance greater than median, a sliding scale applies tdetermine the vesting percentage:

TSR vesting schedule

Perpetual’s TSR ranking relative to thecomparator group

Percentage o shares and optionsthat will vest

Less than median 0%

Median 50%

Greater than median but less than75th percentile

2% r every ne percentile increasein Perpetual’s relative psitin

Greater than 75th percentile 100%

EPS perormance target

The EPS perrmance target requires Perpetual’s EPS grwth

during the perrmance perid t be equal t r greater than the

target set by the Bard. This target, which is currently 10% per

annum, may be reviewed by the Bard rm time t time.

I Perpetual’s EPS grwth is at r abve the target, 100%

shares and ptins vest; nne vest i the target is nt achieved.

EPS vesting schedule

Perpetual’s growth in EPSPercentage o shares and options

that will vest

EPS grwth less than target 0%

EPS grwth at r abve target 100%

The achievement this perrmance target links the individual’s

remuneratin t the cmpany’s grwth in earnings.

Business perormance targets

Tw executives (and tw departed executives) have previusly

received LTI allcatins that are linked t the achievement

stretch business targets. These targets include achievement

specic business bjectives related t prt grwth, unds

under management, and successin planning r their respective

business units.

The shares may vest in accrdance with a scale specic t each

business target.



Dividends r unvested grants with business targets are

reinvested int urther Perpetual shares r are held as cash,

and are als subject t the same perrmance targets as the

riginal grant.

N LTI with business perrmance targets was granted t the

Managing Directr r Grup Executives during 2010.

Perormance target testing and re-testing guidelines

An initial three-year perrmance testing perid applies t TSR

and EPS targets. Three-year TSR and EPS perrmance is

calculated and tested against the respective target n the third

anniversary the grant date. I the target is nt met, it is re-

tested n the urth anniversary the grant date, against

ur-year TSR and EPS targets. I the perrmance target is nt

met ater this re-test, the prtin the LTI that has nt vested

is reited.

Fr ther emplyees wh received LTI allcatins ater 30 June

2006, there is n retesting the EPS target i the target is nt

achieved n the third anniversary the grant date.

Termination o employment

I an executive leaves the cmpany, any unvested shares

and/r ptins will be reited at the terminatin date, except

as nted belw:

▪ I an executive dies r resigns due t ttal and permanent

disability, all unvested shares and ptins vest t the emplyee

at the date death r n terminatin.

▪ I an executive is made redundant r retires, the executive

will be entitled t a pr-rata prtin the grant calculated n

the basis the length their emplyment (inclusive any

ntice perid actually given and any nminal ntice perid in

respect which any payment in lieu ntice is made). The

pr-rata amunt will be calculated based n the mst recent

perrmance targets t determine the number shares and

ptins that will vest.

4.2 Employee share plans

Fllwing the changes t the legislatin gverning the taxatin

emplyee share schemes, a review was cnducted t assess the

uture viability each plan.

A summary the emplyee share plans at Perpetual llws.

The llwing are pen plans:

Open plans Description

Executive Share Plan (ESP)

237 members

This is the main plan used r LTI grants t eligible emplyees, including the Managing Directrand Grup Executives.

Deerred Share Plan (DSP)7 members

This plan is used r a small number emplyees as part their incentive arrangements.N KMP participate in this plan.

Tax Exempt Employee Share Purchase Plan (TESP)172 members

This plan allws all emplyees, including the Managing Directr and Grup Executives,t purchase shares using a salary-sacriice arrangement.

Tax Deerred Share Purchase Plan (TDSP)84 members

This plan was previusly used by emplyees, including the Managing Directr and GrupExecutives, t purchase shares using a salary sacriice arrangement. The plan was clsed tany new salary sacriice purchases during 2010. The plan cntinues t be used r awardsmade under Perpetual’s sales incentive plans.

Executive Option Plan (EOP)1 member

This plan is used r ptins granted as part the LTI arrangements r the Managing Directrand previusly sme Grup Executives.

other than a grant in accrdance with the Managing Directr’s cntract, n ptins weregranted in 2010.

Global Employee Share Trust (GEST)11 members

This plan is used r a small number emplyees in Perpetual’s Ireland and UK peratin aspart their incentive arrangements. N KMP are eligible t participate in the plan.

The llwing plans are clsed t new issues:

Plans closed to new issues Description

Employee Share Purchase Plan (ESPP)219 members

This plan was used r granting shares under a nn-recurse lan arrangement. It has beenclsed t new issues since 2004.

Non-executive Director Share Purchase Plan (NEDSPP)5 members

This plan was used nly by nn-executive directrs and was clsed t new purchases n1 July 2009.



LTI arrangements or asset management employees based

in Australia

The Deerred Share Plan (DSP) was established in 2005 t deliver

LTI and retentin arrangements r a number key emplyees

in the cmpany’s asset management team. Shares held in the

plan vest ver the lng term subject t achievement investment

perrmance and successin targets.

The plan ensures the interests these key emplyees are

aligned with thse sharehlders and clients ver the lnger

term and prvides a strng retentin element as emplyees wh

cease emplyment with Perpetual during the vesting perid

reit any unvested shares.

In additin t LTI, sme asset management emplyees

als receive STI in cash and shares based n investment

perrmance targets.

LTI arrangements or asset management employees based

in the United Kingdom and Ireland

The Glbal Emplyee Share Trust (GEST) was established in

2005 t deliver LTI and retentin arrangements r key individuals

lcated in Perpetual’s ces in the United Kingdm and Ireland

wh are pivtal t the lng-term success Perpetual’s glbal

asset management perrmance.

Shares held in the plan vest ver a number years subject t

achievement agreed perrmance targets.

All shares are reited i the emplyee resigns r is terminated byPerpetual r pr perrmance r miscnduct prir t vesting.

LTI arrangements or other employees

Prir t 30 June 2006, LTI perrmance targets r a small

number ther emplyees were the same as the Managing

Directr and Grup Executives.

Fr these ther emplyees wh received LTI allcatins ater

30 June 2006, the perrmance target used is linked nly t

EPS grwth. The TSR target was nt used as EPS grwth

represents a measure that better aligns perrmance with

their respnsibilities.

Frm octber 2010, LTI grants made t senir emplyees

(excluding the Managing Directr and Grup Executives, and

asset managers with specic LTI perrmance hurdles) will be

divided int tw equal tranches, with the llwing perrmance

targets being applied t each respective tranche:

▪ The rst tranche shall vest subject t a three-year time-based

hurdle and prvided the emplyee cntinues t achieve a

‘Gd’ r higher individual perrmance rating during the

measurement perid

▪ The secnd tranche vests based n Perpetual’s EPS grwth.

This change has been made t assist in the retentin keyemplyees belw Grup Executive level.

There is n retesting the EPS grwth target i the target is nt

achieved n the third anniversary the grant date.

Other employee share schemes

The cmpany has tw urther equity-based benet prgrams

generally available t all Perpetual emplyees – the Tax Exempt

Emplyee Share Plan (TESP) and the Tax Deerred Share Plan

(TDSP). These plans superseded the Emplyee Share Purchase

Plan (ESPP), which made its nal issue shares t Perpetual

emplyees in December 2004.

In additin, eligible Private Wealth and Crprate Trust emplyees

have the ptential t receive a share allcatin under the TDSP as

part an annual sales-based incentive plan.

Fllwing the intrductin the new tax rules, a review these

plans was cnducted in 2010. It was decided t nly er the

TESP t emplyees wishing t purchase shares thrugh salary

sacrice arrangements ging rward.

The ESPP and anther inactive plan, the Emplyee Reward Share

Plan, are discussed in Nte 26 t the Financial Statements.

Non-executive Director Share Purchase Plan

A share purchase plan r nn-executive directrs was apprved

by sharehlders at the Annual General Meeting in octber 1998.

Under this plan, each nn-executive directr was able t sacrice

up t ty percent their directrs’ ees t acquire shares in the

cmpany. These shares were purchased ur times per year at

market value and have a dispsal restrictin ten years, r when

the directr ceases t be a directr the cmpany. Shares are

held in the plan until the earlier a perid ten years r until the

directr retires rm the Bard.

Fllwing changes t taxatin rules, this plan has been clsed

since 1 July 2009.

Dilution limits or share plans

Shares awarded under Perpetual’s emplyee share plans may

be purchased n market r issued subject t Bard discretin

and the requirements the Corporations Act 2001 and the ASX

Listing Rules.

The Bard will manage the issue shares under emplyee

incentive plans t balance remuneratin needs emplyees

with sharehlder returns, subject t the relevant regulatryrequirements.

Share dealing approval

Any share dealings, whether these shares are held persnally

r were acquired as part remuneratin, require prir apprval.

The table belw shws the apprval required:

Person wishing to deal in shares Approval required rom

Managing Directr Chairman

Directr Chairman

Chairman Nminated directr

Grup Executive Managing Directr

An emplyee likely t haveprice-sensitive inrmatin

Managing Directr/Cmpany Secretary



5. Summary o company perormance

The llwing table shws the ve-year cmpany perrmance. This perrmance determines hw much STI and LTI are paid

t emplyees.Five-year company perormance

Year ended

30 June 2006 30 June 2007 30 June 2008 30 June 2009 30 June 2010

Net profit after tax reported ($’000s) 135,320 182,108 128,813 37,749 90,506

Underlying profit after tax reported ($’000s) 122,436 145,336 133,464 65,755 72,793

Ordinary dividend per share declared withrespect to the year ($)

3.26 3.60 3.30 1.00 2.10

Special dividend per share declared withrespect to the year ($)

1.00 - - - -

Total dividends 4.26 3.60 3.30 1.00 2.10

Basic earnings per share – UPAT ($) 3.21 3.76 3.42 1.67 1.83

Closing share price ($) 73.15 78.51 42.77 28.55 28.26

5.1 Proit Participation Pool payments or 2010

Five-year cmpany perrmance is shwn in the table abve.

The relatinship between STI and Perpetual’s perrmance is

urther demnstrated in the graph belw, where the relative

mvement in ttal STI granted t all emplyees is shwn against

NPAT mvements.

As described earlier in the reprt, ne the ve key principles

ur remuneratin plicy is that variable pay is linked tsharehlder wealth creatin (ie grwth in the share price and

dividends payments). The chart belw demnstrates the clse

alignment between the prt measure and the STI pl payable

t emplyees.

Short-term incentives and NPAT are highly correlated

20

40

60

80

100

120

140

160

180

200

50

100

150

200

250

NPAT ($M)STI Index

2010 = 100

182.1

128.8

06 07 08 09 10

NPAT

STI

135.3

37.7

90.5

5.2 Unvested LTI issued to key management

personnel (KMP)

The llwing charts shw the percentage all LTI issued t

KMP rm the 2005, 2006 and 2007 grants that actually vested.

It can be seen that n LTI has vested in respect t grants made

in 2007, and nly minimal vesting ccurred r grants made in

2005 and 2006, illustrating the clear link between cmpany

perrmance and remuneratin at Perpetual.

The perrmance hurdles r the 2005 allcatin were initially

tested in 2008 and then the unvested shares and ptins were

retested in 2009. Frm this allcatin, the pie chart shws that

95% shares remained unvested and cnsequently thse

unvested shares and ptins lapsed.

Similarly, the perrmance hurdles r the 2006 allcatin were

rst tested in 2009 with unvested shares and ptins t be

retested in 2010. Frm this allcatin, the pie chart shws that10% the shares and ptins granted in 2006 have vested.

The 2007 allcatin was rst tested in 2010 and the unvested

shares will be retested in 2011. All shares that d nt then vest

will be reited.

2007 grants

0%

100%

2005 grants

95%

5%

2006 grants

90%

10%

Vested

Unvested



6. Key management personnel

Key management persnnel (KMP) are the individuals wh

have the authrity and respnsibility r planning, directingand cntrlling the cmpany’s activities directly r indirectly.

This includes directrs, whether executive r therwise, the

cnslidated entity. The llwing were KMP Perpetual during

the nancial year:

Name Position

Non-executive Directors

Robert Savage Chairman and Independent Directr

Paul Brasher Independent Directr1

Meredith Brooks Independent Directr

Philip Bullock Independent Directr2

Paul McClintock Independent Directr

Elizabeth Proust Independent Directr

Peter Scott Independent Directr

Philip Twyman Independent Directr

Managing Director

David Deverall Chie Executive oicer and Managing Directr3

Group Executives

Richard Brandweiner* Grup Executive Incme and Multi Sectr

Roger Burrows* Chie Financial oicer

Cathy Doyle* Grup Executive Equities

Christopher Green* Grup Executive Crprate Trust

Ivan Holyman* Chie Risk oicer

Michael Miller Grup Executive Superannuatin andoperatins4

Matt Pancino Grup Executive operatins5

Janine Stewart Grup Executive Peple and Culture

Rory MacIntyre Acting Grup Executive Glbal Equities6

Paul Ryan C-acting Grup Executive Private Wealth

7

Shailendra Singh C-acting Grup Executive Private Wealth8

KMP who departed during the year

Group Executives

Emilio Gonzalez Grup Executive Glbal Equities9

John Nesbitt Grup Executive Private Wealth10

Eric Wang Grup Executive Superannuatin andInvestment Slutins11

* The ve highest paid cers the Grup and Cmpany during the yearended 30 June 2010.

1 Appinted 1 Nvember 2009.

2 Appinted 1 June 2010.

3 on 23 June 2010, Perpetual annunced that Managing Directr,David Deverall, had given ntice his resignatin.

4 Held the psitin Chie operating ocer Perpetual Investments upt 18 January 2010, at which pint he was appinted t the rle Grup

Executive Superannuatin and Investment Slutins. on 26 July 2010,he was appinted t the rle Grup Executive Superannuatinand operatins.

5 Has given ntice his resignatin eective 15 octber 2010.

6 Held the psitin Head Glbal Equities up t 1 Nvember 2009,at which pint he was temprarily appinted t this rle.

7 Held the psitin General Manager Business Acquisitins up t1 December 2009, at which pint he was temprarily appinted t this rle.

8 Held the psitin Chie Financial ocer Private Wealth up t1 December 2009, at which pint he was temprarily appinted t this rle.

9 Resigned 20 January 2010.

10 Resigned 1 May 2010.

11 Resigned 30 September 2009.

Related party disclosures

Fr a xed perid six mnths cmmencing n2 Nvember 2009 and ending n 2 May 2010, Meredith

Brks was engaged t prvide advisry and cnsulting

services t Perpetual Investment’s Glbal Equities business.

In accrdance with the cnsultancy agreement, Ms Brks

received $196,900 r prviding thse services. This cash

payment is in additin t the ees Ms Brks received in her

capacity as a nn-executive directr.

N ther KMP have entered int material cntracts with the

cmpany r members the cnslidated entity since the end

the previus nancial year and there were n material cntracts

invlving KMP interests subsisting at the year end.



7. Appendices

Index to tables

Table Page number

Remunertin Managing Directr and Grup Executives 47

Actual remuneratin Managing Directr and Grup Executives 49

Remuneratin cmpnents as a prprtin ttal remuneratin 50

Lans t Grup Executives under the ESPP 51

optin hldings the Managing Directr and Grup Executives 51

Value unvested remuneratin that may vest in uture years 52

Vested sharehldings the Managing Directr and Grup Executives 52

Unvested sharehldings the Managing Directr and Grup Executives 53

Cntract terms r the Managing Directr 55

Terminatin prvisins r Grup Executives 56

Nn-executive directr ee schedule 57

Cntract terms engagement and nn-executive directr ees and respnsibilities 58

Remuneratin received by nn-executive directrs 58

Shares, ptins, dividends and units held by nn-executive directrs 59

Nn-executive directr hldings held directly r indirectly 59



Details o Managing Director and Group Executive remuneration or 2010

Remuneration o Managing Director and Group Executives

The llwing table shws the remuneratin amunts recrded in the nancial statements in the year.

Name

Total Fixed remuneration STI

Fixedremuneration

& STI

LTI

Short-term Postemployment

Total ixedremuneration

Share-based6 Total LTI

Cash salary,ees and

short-termcompensated

absences1

Non-monetarybeneits2

Other3 Pension andsuper

Cash proitsharing

and otherbonuses4

Shares5 Options5

$ $ $ $ $ $ $ $ $ $ $

Managing Director

D Deverall

2010 1,371,412 976,539 - 1,825 23,461 1,001,825 800,000 1,801,825 (189,956) (240,457) (430,413)

2009 195,925 956,043 - 3,106 43,958 1,003,107 331,000 1,334,107 (315,679) (822,503) (1,138,182)

Group Executives

R Brandweiner*

2010 680,534 310,539 - 2,149 14,461 327,149 290,000 617,149 63,385 - 63,385

2009 434,335 322,637 - 2,116 13,745 338,498 78,000 416,498 17,837 - 17,837

R Burrows*

2010 1,004,296 512,137 14,402 1,825 23,461 551,825 220,000 771,825 232,471 - 232,471

2009 825,018 489,173 13,344 1,825 47,745 552,087 98,000 650,087 174,931 - 174,931

C Doyle*

2010 1,129,727 441,950 44,596 1,825 14,461 502,833 300,000 802,833 326,894 - 326,894

2009 1,066,376 445,522 40,733 1,825 13,745 501,825 120,000 621,825 444,551 - 444,551

C Green*

2010 690,528 335,539 - 1,825 14,461 351,825 280,000 631,825 58,703 - 58,703

2009 652,800 319,682 - 3,200 13,745 336,627 225,000 561,627 91,173 - 91,173

I Holyman*

2010 866,781 362,500 - 1,825 46,710 411,035 240,000 651,035 215,746 - 215,746

2009 655,053 306,571 1,983 3,083 95,945 407,582 25,000 432,582 222,471 - 222,471

M Miller

2010 494,401 287,720 - 2,126 19,050 308,895 155,000 463,895 30,506 - 30,506

M Pancino

2010 416,644 305,054 30,485 1,825 14,461 351,825 - 351,825 64,819 - 64,819

2009 463,981 295,987 32,558 1,510 17,116 347,171 100,000 447,171 16,810 - 16,810

J Stewart

2010 475,568 285,539 - 1,825 14,461 301,825 135,000 436,825 38,743 - 38,743

2009 355,103 266,589 - 1,370 18,745 286,704 60,000 346,704 8,399 - 8,399

R MacIntyre

2010 419,819 277,539 - 2,447 38,461 318,447 90,000 408,447 11,372 - 11,372



Name

Total Fixed remuneration STI

Fixedremuneration

& STI

LTI

Short-term Postemployment

Total ixedremuneration


Cash salary,ees and

short-termcompensated

absences1

Non-monetarybeneits2

Other3 Pension andsuper

Cash proitsharing

and otherbonuses4

Shares5 Options5

$ $ $ $ $ $ $ $ $ $ $

Group Executives (continued)

P Ryan

2010 426,722 253,978 - 1,825 24,122 279,925 130,000 409,925 16,797 - 16,797

S Singh

2010 442,398 255,539 - 601 14,461 270,601 155,000 425,601 16,797 - 16,797

Departed Group Executives

E Gonzalez

2010 85,392 267,469 - 139,467 9,454 416,390 - 416,390 (222,111) (108,887) (330,998)

2009 1,160,712 486,255 - 3,638 13,745 503,638 100,000 603,638 448,187 108,887 557,074

J Nesbitt

2010 328,912 425,872 6,079 601 61,270 493,822 - 493,822 (151,547) (13,363) (164,910)

2009 1,067,025 488,247 12,977 1,825 98,776 601,825 125,000 726,825 326,837 13,363 340,200

E Wang

2010 110,472 93,600 2,785 604,552 3,615 704,552 - 704,552 (260,674) (333,406) (594,080)

2009 854,853 372,952 13,304 4,532 13,745 404,533 - 404,533 200,259 250,061 450,320

Total 2010 8,943,607 5,391,512 98,348 766,544 336,371 6,592,775 2,795,000 9,387,775 251,945 (696,113) (444,168)

Ttal 2009 7,731,181 4,749,658 114,899 28,030 391,010 5,283,597 1,262,000 6,545,597 1,635,776 (450,192) 1,185,584

Ttal 2009r executivesdisclsed in20097

8,556,971 5,121,121 146,149 614,931 397,882 6,280,083 1,262,000 7,542,083 1,465,080 (450,192) 1,014,888

* Five highest paid cers the grup and cmpany during the year ended 30 June 2010.

1 Cash salary is the rdinary cash salary received in the year.

2 Nn-mnetary benets relate t the salary sacrice cmpnent remuneratin and represents benets such as mtr vehicles and car parking.3 other shrt-term benets relate t Salary Cntinuance and Death and Ttal and Permanent Disability insurance prvided as part the remuneratin package,

interest n lans arising rm shares issued under the ESPP (reer t page 51 ‘Lans t Grup Executives under the ESPP’) and nal payments in respect executives wh departed during r since the end the year (including any terminatin benets $138,268 paid t Gnzalez and $603,951 paid t Wang).

4 Cash prt sharing and ther bnuses equate t the best estimate the incentive perrmance bnus, based n available inrmatin at year end.

5 Share-based remuneratin has been valued using the binmial methd which takes int accunt the perrmance hurdles relevant t each issue an equityinstrument. The value each equity instrument has been prvided by PricewaterhuseCpers.

6 Share-based remuneratin is the amunt expensed in the nancial statements r the year and includes adjustments t refect the mst current expectatin

vesting LTI grants with nn-market cnditin hurdles. Fr grants with nn-market cnditins, including Earnings Per Share hurdles, the number shares expectedt vest is estimated at the end each reprting perid and the amunt t be expensed in the nancial statements is adjusted accrdingly. Fr grants with marketcnditins such as Ttal Sharehlder Return hurdles, the number grants expected t vest is nt adjusted during the lie the grant and n adjustment is made tthe amunt expensed in the nancial statements. The accunting treatment nn-market and market cnditins is in accrdance with Accunting Standards.

7 The ttals shwn relate t executives disclsed in the 2009 Annual Reprt and s d nt equal the 2009 ttals r executives disclsed in this table.

Remuneration o Managing Director and Group Executives (continued)



In additin t the abve table, which shws the accunting treatment share and ptin based remuneratin cmpnents, the llwing

table sets ut the actual market value shares n the date they vested and ptins n the date they were exercised during the year.

This highlights the alignment between sharehlder return and emplyee reward.

Actual remuneration o Managing Director and Group Executives

The table belw shws the remuneratin amunts received in the year.

Name

Total Fixed remuneration & STI LTI


Shares vested Options exercised

$ $ $ $ $

Managing Director

D Deverall

2010 1,801,825 1,801,825 - - -

2009 1,334,107 1,334,107 - - -Group Executives

R Brandweiner

2010 617,149 617,149 - - -

2009 416,498 416,498 - - -

R Burrows

2010 771,825 771,825 - - -

2009 650,087 650,087 - - -

C Doyle

2010 802,833 802,833 - - -

2009 621,825 621,825 - - -

C Green

2010 704,435 631,825 72,610 - 72,610

2009 644,031 561,627 82,404 - 82,404

I Holyman

2010 651,035 651,035 - - -

2009 432,582 432,582 - - -

M Miller

2010 463,895 463,895 - - -

M Pancino

2010 351,825 351,825 - - -

2009 447,171 447,171 - - -

J Stewart

2010 436,825 436,825 - - -

2009 346,704 346,704 - - -

R MacIntyre

2010 408,447 408,447 - - -

P Ryan

2010 409,925 409,925 - - -



Name

Total Fixed remuneration & STI LTI

Share-based1

Total LTIShares vested Options exercised

$ $ $ $ $


S Singh

2010 425,601 425,601 - - -


E Gonzalez

2010 416,390 416,390 - - -

2009 2,095,002 603,638 - 1,491,3642 1,491,364

J Nesbitt

2010 493,822 493,822 - - -

2009 726,825 726,825 - - -

E Wang

2010 704,552 704,552 - - -

2009 404,533 404,533 - - -

Total 2010 9,460,385 9,387,775 72,610 - 72,610

Ttal 2009 8,119,365 6,545,597 82,404 1,491,364 1,573,768

1 Share based remuneratin represents the air value shares vested and ptins exercised during the year. Shares and ptins have been valued based n their

market value n the date the shares vested and ptins were exercised.

2 These ptins were granted in 2002.

Remuneration components as a proportion o total remuneration1

Name Fixed beneits %Perormance linked beneits

Total %STI % LTI %

Managing Director

D Deverall 56% 44% 0% 100%

Group Executives

R Brandweiner 48% 43% 9% 100%

R Burrows 55% 22% 23% 100%

C Doyle 45% 27% 28% 100%

C Green 51% 41% 8% 100%

I Holyman 47% 28% 25% 100%

M Miller 62% 31% 7% 100%

M Pancino 84% 0% 16% 100%

J Stewart 63% 28% 9% 100%

R MacIntyre 76% 21% 3% 100%

P Ryan 66% 30% 4% 100%

S Singh 61% 35% 4% 100%


E Gonzalez 100% 0% 0% 100%

J Nesbitt 100% 0% 0% 100%

E Wang 100% 0% 0% 100%

1 The remuneratin cmpnents are determined based n the ‘Remuneratin Managing Directr and Grup Executives’ table n page 47.

Actual remuneration o Managing Director and Group Executives (continued)



Loans to Group Executives under the ESPP

Name Balance at the start

o the year

Repayment o loan Interest paid and

payable or the year

Balance at the end

o the year

Interest not

charged1

Highest balance in

period

$ $ $ $ $ $

Group Executives

R Brandweiner 3,505 (3,505) - - 324 3,505

M Miller 3,202 (313) - 2,889 301 3,202

R MacIntyre 6,658 (726) - 5,932 622 6,658

Departed Group Executive

E Gonzalez 8,024 (8,024) - - 598 8,024

1 Interest nt charged has been calculated at 9.8% n the weighted average lan balance as at 30 June 2010 and 30 June 2009, r r terminated speciedexecutives, n the pr-rata lan balances r the perid up t six mnths rm the date leaving emplyment. The terms these lans are discussed in mre detail

in Nte 26 the Financial Statements.The lans were available t all executives except r the Managing Directr. They were als nt available t the nn-executive directrs.

N ther Grup Executives have lans.

Option holdings o the Managing Director and Group Executives

Movement during the year

Name Grant date Exerciseperiod

Exerciseprice

Held at1 July 2009

Granted Foreited Exercised Held at 30June 2010

Vested &exercisableat 30 June

2010

Fair valueper option atgrant date1

Proceedsreceived on

exercise

$ No. o options No. o options No. o options No. o options $ $

Managing Director

D Deverall

2

optins granted prir t 1 July 2008

3

295,508 - 28,144 - 267,364 978

1 Jul 081 Jul 11 -1 Jul 14

42.73 57,390 - - - 57,390 - 8.97 -

29 Jun 091 Jul 12 -29 Jun 15

28.34 47,585 - - - 47,585 - 9.58 -

3 Jul 091 Jul 12 -29 Jun 15

28.34 - 5,911 - - 5,911 - 9.58 -

Aggregate Value $56,627 $1,599,986 - -


E Gonzalez 20 Jan 0930 Jun 13 -20 Jan 15

31.42 182,215 - 182,215 - - - 6.60 -

Aggregate Value - $5,725,195 - -

J Nesbitt 9 Jun 09

30 Jun 12 -

30 Jun 14 28.34 58,939 - 58,939 - - - 9.06 -


E Wang 31 Mar 0831 Mar 11 -31 Mar 13

52.71 75,301 - 75,301 - - - 9.96 -


optins granted t the Managing Directr and Grup Executives are granted rm the Executive optin Plan. N ther Grup Executives hld ptins ver

Perpetual shares.

1 Equity instruments issued have been valued by PricewaterhuseCpers (PwC) using a Binmial optin Pricing mdel at grant date.

2 Apprval r the issue ptins t D Deverall was btained under ASX Listing Rule 10.14 at Perpetual’s AGMs held n 19 octber 2004, 17 octber 2006,

30 octber 2007, 28 octber 2008 and 22 octber 2009.

3 These ptins were granted n 19 octber 2004 (978), 1 July 2005 (28,144), 1 July 2006 (29,950) and 1 July 2007 (236,436). on 23 June 2010, the cmpany

annunced that Managing Directr, David Deverall, had given ntice his resignatin. As a result, n lng term incentives, including the ptins utstanding as at30 June 2010, will vest as a result Mr Deverall’s resignatin and all unvested ptins will be reited n ceasing emplyment. The ptins utstanding as at30 June 2010 have a carrying value $Nil.

4 Percentage ttal remuneratin received as ptins r the Managing Directr and Grup Executives are: D Deverall (0%), E Gnzalez (0%), J Nesbitt (0%) andE Wang (0%).



Value o unvested remuneration that may vest in uture years

Name Estimates o the maximum and minimum cost in uture years relating to equity based remuneration granted by the Company

30 June 2011 30 June 2012 30 June 2013

Minimum Maximum Minimum Maximum Minimum Maximum

Managing Director

D M Deverall1 - - - - - -

Group Executives

R Brandweiner - 105,435 - 113,402 - 28,232

R Burrows - 323,591 - 255,084 - 61,599

C Doyle - 413,736 - 305,694 - 35,932

C Green - 98,986 - 103,948 - 25,667

I Holyman - 212,046 - 191,306 - 46,198

R MacIntyre - 24,877 - 34,384 - 9,329

M Miller - 99,145 - 122,978 - 33,366

M Pancino2 - - - - - -

P Ryan - 44,392 - 58,039 - 15,747

S Singh - 44,392 - 58,039 - 15,747

J Stewart - 64,552 - 63,760 - 15,397

1 The maximum value equity that may vest in uture years r Mr Deverall has been calculated t be zer n the basis that he has given ntice his resignatin.

2 The maximum value equity that may vest in uture years r Mr Pancin has been calculated t be zer n the basis that he has given ntice his resignatin.

Vested shareholdings o the Managing Director and Group Executives

Name

Balance at the start o the year LTI Shares vesting in the period Other changes during the year Balance at the end o the year1

No. o shares

Managing Director

D Deverall 35,540 - - 35,540

Group Executives

R Brandweiner 402 - - 402

R Burrows - - - -

C Doyle - - - -

C Green 2,056 2,740 - 4,796

I Holyman 2,736 - - 2,736

M Miller 234 - - 234

M Pancino - - - -

J Stewart - - - -

R MacIntyre 16,893 - - 16,893

P Ryan - - - -

S Singh - - - -


E Gonzalez 88,279 - (69,632) 18,647

J Nesbitt 7,417 - - 7,417

E Wang 600 - - 600

1 Date departure r Grup Executives that departed in the year.

other changes during the year represent shares acquired via bnus sacr ice, cnversin ptins int shares and dispsal shares.

Dispsals during the year include E Gnzalez (69,632).



Unvested shareholdings o the Managing Director and Group Executives


Name Grant date Issue price Vesting date Held at1 July 2009 Granted Foreited Vested Held at30 June 2010 Fair value pershare TSRhurdle17

Fair valueper sharenon-TSRhurdle17

No. o shares No. o shares No. o shares $ $

Managing Director

D Deverall1 Shares granted prir t 1 July 20082 58,532 - 7,036 - 51,496

1 July 2008 42.73 1 July 2011 11,993 - - - 11,993 38.97 50.80

29 June2009

28.34 1 July 2012 18,083 - - - 18,083 21.30 28.01

Aggregate Value - $399,997 -

Group Executives

R Brandweiner Shares granted prir t 1 July 20083 2,748 - 1,389 - 1,359

1 octber

2008

48.63 1 octber

2011

4,112 - - - 4,112 38.97 50.80

1 octber2009

38.15 1 octber2012

- 7,208 - - 7,208 29.02 37.93

Aggregate Value $274,985 $96,582 -

R Burrows Shares granted prir t 1 July 20084 11,383 - - - 11,383

1 octber2008

48.63 1 octber2011

12,338 - - - 12,338 38.97 50.80

1 octber2009

38.15 1 octber2012

- 15,727 - - 15,727 29.02 37.93

Aggregate value $599,985 - -

C Doyle Shares granted prir t 1 July 20085 25,531 - - - 25,531

1 octber2008

48.63 1 octber2011

7,197 - - - 7,197 38.97 50.80

1 octber2009

38.15 1 octber2012

- 9,174 - - 9,174 29.02 37.93

Aggregate Value $349,988 - -

C Green Shares granted prir t 1 July 20086 5,031 - - 2,740 2,291

1 octber2008

48.63 1 octber2011

4,112 - - - 4,112 38.97 50.80

1 octber2009

38.15 1 octber2012

- 6,553 - - 6,553 29.02 37.93

Aggregate Value $249,997 - $ 199,938

I Holyman Shares granted prir t 1 July 20087 16,464 - 4,472 - 11,992

1 octber2008

48.63 1 octber2011

9,253 - - - 9,253 38.97 50.80

1 octber2009

38.15 1 octber2012

- 11,795 - - 11,795 29.02 37.93


M Miller Shares granted prir t 1 July 20088 3,308 - 1,677 - 1,631

1 octber2008

48.63 1 octber2011

2,467 - - - 2,467 38.97 50.80

1 octber2009

38.15 1 octber2012

- 8,519 - - 8,519 29.02 37.93


M Pancino Shares granted prir t 1 July 20089 4,159 - 1,865 - 2,294

1 octber2008

48.63 1 octber2011

5,140 - - - 5,140 38.97 50.80

1 octber2009

38.15 1 octber2012

- 6,553 - - 6,553 29.02 37.93


J Stewart Shares granted prir t 1 July 200810 584 - - - 584

1 octber2008

48.63 1 octber2011

3,084 - - - 3,084 38.97 50.80

1 octber2009

38.15 1 octber2012

- 3,931 - - 3,931 29.02 37.93

Aggregate Value $149,968 - -




Name Grant date Issue price Vesting date Held at1 July 2009 Granted Foreited Vested Held at30 June 2010 Fair value pershare TSRhurdle17

Fair valueper sharenon-TSRhurdle17

No. o shares No. o shares No. o shares $ $


P Ryan Shares granted prir t 1 July 200811 2,946 - 1,451 - 1,495

1 octber2008

48.63 1 octber2011

2,287 - - - 2,287 38.97 50.80

1 octber2009

38.15 1 octber2012

- 3,538 - - 3,538 29.02 37.93


S Singh Shares granted prir t 1 July 200812 1,931 - 566 - 1,365

1 octber2008

48.63 1 octber2011

2,261 - - - 2,261 38.97 50.80

1 octber2009

38.15 1 octber2012

- 3,538 - - 3,538 29.02 37.93


R MacIntyre Shares granted prir t 1 July 200813 9,498 - 2,257 - 7,241

1 octber2008

48.63 1 octber2011

1,028 - - - 1,028 38.97 50.80

1 octber2009

38.15 1 octber2012

- 2,096 - - 2,096 29.02 37.93


Departed Executives

E Gonzalez Shares granted prir t 1 July 200814 26,622 - 26,622 - -

1 octber2008

48.63 1 octber2011

16,450 - 16,450 - - 38.97 50.80

20 January

2009

31.42 30 June

2013

39,783 - 39,783 - - N/A 31.42

Aggregate Value - $ 3,949,872 -

J Nesbitt Shares granted prir t 1 July 200815 23,004 - 23,004 - -

1 octber2008

48.63 1 octber2011

16,450 - 16,450 - - 38.97 50.80

9 June 2009 29.74 30 June2012

20,174 - 20,174 - - N/A 29.74

1 octber2009

38.15 1 octber2012

- 20,969 20,969 - - 29.02 37.93

Aggregate Value $799,967 $3,849,818 - -

E Wang Shares granted prir t 1 July 200816 21,832 - 21,832 - -

1 octber2008

48.63 1 octber2011

6,169 - 6,169 - - 38.97 50.80

Aggregate Value - $1,595,883 -

1 Apprval r the issue shares t David Deverall was btained under ASX Listing Rule 10.14 at Perpetual’s AGM held n 19 octber 2004, 17 octber 2006,30 octber 2007, 28 octber 2008 and 22 octber 2009.

2 These shares were granted n 1 July 2005 (7,036; 100% reited in the current year), 1 July 2006 (7,130) and 1 July 2007 (44,366).3 These shares were granted n 30 September 2005 (745; 100% reited in the current year), 2 octber 2006 (644; 100% reited in the current year) and

1 octber 2007 (1,359).4 These shares were granted n 31 March 2008 (11,383).5 These shares were granted n 4 December 2006 (1,645), 1 octber 2010 (4,759) and 20 February 2008 (19,127).6 These shares were granted n 1 octber 2007 (2,291) and 17 July 2006 (2,740; 100% vested in the current year).7 These shares were granted n 30 September 2005 (4,472; 100% reited in the current year), 2 octber 2006 (5,873) and 1 octber 2007 (6,119).8 These shares were granted n 30 September 2005 (641; 100% reited in the current year), 2 octber 2006 (1,036; 100% reited in the current year) and

1 octber 2007 (1,631).9 These shares were granted n 14 August 2006 (255), 2 octber 2006 (1,865; 100% reited in the current year) and 1 octber 2007 (2,039).10 These shares were granted n 10 September 2007 (584).11 These shares were granted n 2 octber 2006 (1,451; 100% reited in the current year) and 1 octber 2007 (1,495).12 These shares were granted n 3 July 2006 (139), 2 octber 2006 (566; 100% reited in the current year) and 1 octber 2007 (1,226).13 These shares were granted n 30 September 2005 (876; 100% reited in the current year), 2 octber 2006 (1,381; 100% reited in the current year),

1 octber 2007 (1,359) and 3 December 2007 (5,882).14 These shares were granted n 30 September 2005 (7,453; 100% reited in the current year), 2 octber 2006 (8,291; 100% reited in the current year) and

1 octber 2007 (10,878; 100% reited in the current year).15 These shares were granted n 30 September 2005 (5,217; 100% reited in the current year), 2 octber 2006 (6,909; 100% reited in the current year) and

1 octber 2007 (10,878; 100% reited in the current year).16 These shares were granted n 30 September 2005 (1,729; 100% reited in the current year), 2 octber 2006 (1,796; 100% reited in the current year),

1 octber 2007 (4,079; 100% reited in the current year) and 31 March 2008 (14,228; 100% reited in the current year).17 Grants perrmance shares ater 30 June 2003 cntain 50% the shares with a perrmance hurdle linked t TSR and 50% the shares granted with a

perrmance hurdle linked t EPS. Where applicable, the air value shares with a TSR perrmance hurdle are disclsed. The air value TSR-linked shares iscalculated by PwC using valuatin techniques that take int accunt the prbability vesting as refected in the air value at grant.

Unvested shareholdings o the Managing Director and Group Executives (continued)



Contract terms or the Managing Director

Contract details David Deverall, Chie Executive Oicer and Managing Director

Term of contract Mr Deverall’s appintment as Chie Executive oicer and Managing Directr cntinues rm the date the agreement(24 September 2007) until terminated in accrdance with its terms.

Fixed remuneration $1,000,000 per annum, reviewable in accrdance with Perpetual’s plicies.

STI STI up t the maximum STI r previus year multiplied by the change in the Prit Participatin Pl.

20% the STI will be subject t the Bard’s assessment annually additinal perrmance criteria.

LTI-Group Eligible t receive LTI-Grup grants equivalent t $1.025 millin per annum (r such greater amunts as may be determinedby the Bard rm year t year). 50% the LTI-Grup beneits is prvided by way perrmance shares and 50% by way ptins. Grants are divided int tw prtins.

The irst prtin is subject t a TSR target. I Perpetual’s grwth in TSR relative t the cmparatr grup is:

▪ less than the median, 0% vests

▪ at the median, 50% vests

▪ greater than the median but less that 75%, 50% plus 2% r every percentile increase vests

▪ 75% r abve, 100% vests. The secnd prtin is subject t an EPS target. I Perpetual’s grwth in EPS is:

▪ less than 10% per annum, 0% vests

▪ at 10% r mre, 100% vests.

The TSR and EPS targets are irst tested n the third anniversary the grant date. I any prtin remains unvested, it isretested n the urth anniversary the grant date. Ater this date, any unvested prtin is reited.

LTI-Business – one-off grantmade on 1 July 2007

Eligible t receive LTI-Business grants up t $6,000,000. 50% the LTI-Business beneit is prvided by way shares and50% by way ptins. LTI-Business beneit will vest n 30 June 2012 subject t cmpund annual grwth in EPS targetsand UPAT targets.

A threshld cmpund annual grwth in EPS 11% ver the ive-year perrmance perid is required bere any sharesr ptins can vest in 2012. once the threshld is achieved, vesting perates as llws:

▪ vesting 10% the ttal shares and ptins ccurs upn achievement cmpund annual grwth in EPS 11% andrequired UPAT target

▪ 100% the shares and ptins will vest i cmpund annual grwth in EPS is 20% and required UPAT target is achieved

▪ a sliding scale vesting perates i cmpund annual grwth in EPS is greater than 11% and belw 20% and requiredUPAT targets are achieved.

There is an pprtunity r accelerated vesting as at 30 June 2010 up t 67% ($4,000,000) the riginal beneit. A threshld cmpund annual grwth in EPS 15% is required bere any shares r ptins can vest in 2010. once thethreshld is achieved, vesting perates as llws:

▪ vesting shares and ptins valued at $2,000,000 ccurs upn achievement a cmpund annual grwth in EPS 15%and required UPAT target

▪ shares and ptins valued at a ttal $4,000,000 will vest upn achievement a cmpund annual grwth in EPS 25%and required UPAT target

▪ a sliding scale vesting perates i cmpund annual grwth in EPS is greater than 15% and belw 25% and requiredUPAT targets are achieved.

Mr Deverall is nt permitted t transer r exercise any shares r ptins that vest under these accelerated vesting prvisinsuntil ater 30 June 2011. I accelerated vesting is achieved, the balance the LTI-Business will vest n 30 June 2012 subjectt the riginal targets. There is n prvisin r retesting i perrmance targets are nt achieved as 30 June 2012. Anyshares and ptins that d nt vest will be reited as at 30 June 2012.



Contract details David Deverall, Chie Executive Oicer and Managing Director

Termination of employment Mr Deverall can resign by prviding 12 mnths’ ntice. Perpetual can terminate Mr Deverall’s emplyment at any time byprviding 12 mnths’ ntice; immediately r miscnduct r ther circumstances justiying summary dismissal; as a result Mr Deverall’s illness by prviding 12 mnths’ ntice; and r pr perrmance by prviding 6 mnths’ ntice. When ntice isrequired, the Cmpany can make a payment in lieu all r part any ntice perid.

Immediate termination without notice in certain circumstancesSTI – n entitlement in respect year in which terminatin ccurs.

LTI-Grup – shares and ptins nt vested at terminatin date are reited.

LTI-Business – shares and ptins nt vested at terminatin date are reited.

Termination by Perpetual on notice or due to illness – 12 months’ written notice (or payment in lieu)STI – pr-rated, based n prir year entitlements.

LTI-Grup – eligible t receive vesting shares and ptins that have nt vested at the terminatin date r a perid 24 mnths ater the terminatin date, subject t the riginal perrmance hurdles and perrmance perid.

LTI-Business – entitled t the greater a pr-rata prprtin shares and ptins (subject t perrmance targetsmeasured at the date terminatin) and 1/10th the LTI-Business.

Termination by Perpetual due to poor perormance – 6 months’ written notice (or payment in lieu)STI – n entitlement in respect year in which terminatin ccurs.

LTI-Grup – shares and ptins nt vested at the terminatin date are reited.

LTI-Business – entitled t the greater a pr-rata prprtin shares and ptins (subject t perrmance targetsmeasured at the date terminatin) and 1/10th the LTI-Business.

Voluntary termination – 12 months’ written notice (or payment in lieu)STI – pr-rated, based n previus year entitlements.

LTI-Grup – shares and ptins nt vested at the terminatin date are reited.

LTI-Business – shares and ptins nt vested at the terminatin date are reited.

Death o Mr DeverallSTI – pr-rata entitlement based n previus year’s STI.

LTI-Grup – eligible t receive vesting shares and ptins that have nt vested at the terminatin date, subject t theriginal perrmance hurdles and perrmance perid.

LTI-Business – eligible t receive allcated but unvested equity at the discretin the Bard.

As previusly nted, n 23 June 2010 Perpetual annunced that Managing Directr, David Deverall, had given ntice his resignatin.

As set ut in the ASX Annuncement, Mr Deverall has a cntractual entitlement t receive a STI r the year ended 30 June 2010, and a

pr-rata STI r the year ending 30 June 2011. N LTI will vest as a result Mr Deverall’s resignatin, and all unvested LTI will be reited

n ceasing emplyment.

Termination provisions or Group Executives

The material terms r the Grup Executives are summarised belw:

Term Who Conditions

Duration of contract All Grup Executives onging until ntice is given by either party

Notice to be provided by Group Executiveto terminate the employment agreement Jhn Nesbitt 6 mnths

Janine Stewart 12 weeks

Paul Ryan 2 mnths

Shailendra Singh 2 mnths

All ther Grup Executives 3 mnths

Notice to be provided by Perpetual toterminate the employment agreement forpoor performance

Jhn Nesbitt 12 mnths

Rger Burrws 6 mnths


Paul Ryan 2 mnths



Contract terms or the Managing Director (continued)



Term Who Conditions

Notice to be provided by Perpetual to terminate

the employment agreement without cause

Jhn Nesbitt 12 mnths

Rger Burrws 6 mnths

Ivan Hlyman 3 mnths’ ntice plus 3 weeks per cmpleted year service (up t 52 weeks)


Paul Ryan 2 mnths



Termination payments and/or benefits to bemade on termination without cause

Payment in lieu o notice

All Grup Executives Grup Executives are entitled t payment in lieu

any unexpired part the ntice perid.

STI

All Grup Executives Subject t the terms and cnditins the STI Plan.

LTI

All Grup Executives Subject t the terms the oer and LTI Plan.

Termination for cause Payment in lieu o notice

All Grup Executives Nne – immediate terminatin r cause.

STI

All Grup Executives Subject t the terms and cnditins the STI Plan.

LTI

All Grup Executives Subject t the terms the oer and LTI Plan.

Post-employment restraints All Grup Executives 6 mnth nn-slicitatin restraint.

Non-executive director ee schedule

2010 2011

$ $

Chairman 455,000 468,500

Directrs 165,000 170,000

Audit Risk and Cmpliance Cmmittee Chairman 38,500 40,000

Audit Risk and Cmpliance Cmmittee Member 19,250 20,000

Peple and Remuneratin Cmmittee Chairman 27,500 28,500

Peple and Remuneratin Cmmittee Member 13,750 14,250

Investment Cmmittee Chairman 27,500 28,500

Investment Cmmittee Member 13,750 14,250

Nminatins Cmmittee Member 13,750 14,250

Note: In additin t the base ee, Perpetual pays superannuatin cntributins t nn-executive directrs up t 9% nn-executive directr ees, capped at themaximum superannuatin cntributins base prescribed under Superannuatin Guarantee legislatin. Emplyer superannuatin cntributins may be received inne ur emplyee superannuatin unds r an eligible superannuatin und their chice.



Contract terms o engagement and non-executive director ees and responsibilities*

Robert MSavage1

Paul Brasher2 Meredith JBrooks

Philip Bullock 3 E PaulMcClintock

Elizabeth MProust

Peter B Scott4 Philip JTwyman

$ $ $ $ $ $ $ $

Board ees (per annum)

Chairman 455,000 - - - - - - -

Independent director - 165,000 165,000 165,000 165,000 165,000 165,000 165,000

Committee ees (per annum)

Audit Risk and Compliance Committee

Chairman - - - - - - - 38,500

Member - 19,250 19,250 - - 19,250 - -

People and Remuneration Committee

Chairman - - - - - 27,500 - -

Member - 13,750 - - 13,750 - 13,750 -

Investment Committee

Chairman - - - - 27,500 - - -

Member - - 13,750 - - - 13,750 13,750

Nomination Committee

Member - - - - 13,750 13,750 - 13,750

Appointed August 2001as Directrand octber2005 asChairman

Nvember2009

Nvember2004

June 2010 April 2004 January2006

July 2005 Nvember2004

* In additin t cmmittee ees, directrs are entitled t minimum superannuatin guarantee cntributins.

1 Rbert Savage retired rm the Audit, Risk and Cmpliance Cmmittee n 17 Nvember 2009 and retired as Chairman the Nminatins Cmmittee n23 July 2010 but remains as a Member that Cmmittee until his retirement rm the Bard n 26 octber 2010.

2 Paul Brasher was appinted t the Bard n 1 Nvember 2009, as a member the Audit Risk and Cmpliance Cmmittee n 17 Nvember 2009 and the

Peple and Remuneratin Cmmittee n 16 February 2010.

3 Philip Bullck was appinted t the Bard n 1 June 2010, and as a member the Investment Cmmittee and the Peple and Remuneratin Cmmittee n9 August 2010.

4 Peter Sctt became Chairman-elect and Chairman the Nminatins Cmmittee n 23 July 2010.

Remuneration received by non-executive directors

Name Total Short-term Post employment Share-based

Cash salary, ees and short-term

compensated absences1 Pension and superannuation Equity settled1,3

2010 2009 2010 2009 2010 2009 2010 2009

$ $ $ $ $ $ $ $

R M Savage 469,461 468,745 447,421 335,378 22,040 72,700 - 60,667

P Brasher 133,969 - 83,969 - 50,000 - -

M J Brooks 212,461 211,745 198,000 198,000 14,461 13,745 - -

P Bullock 14,955 - 13,750 - 1,205 - -

E P McClintock 234,461 232,636 220,000 174,891 14,461 13,745 - 44,000

E M Proust 262,915 225,495 248,454 200,750 14,461 13,745 - 11,000

P B Scott 206,961 207,797 192,500 166,552 14,461 13,745 - 27,500

P J Twyman 245,461 244,745 231,000 176,000 14,461 13,745 - 55,000

TOTAL 1,780,644 1,591,162 1,635,094 1,251,572 145,550 141,424 - 198,167

1 Cash salary is the rdinary cash salary. Under a share purchase plan r nn-executive directrs apprved by sharehlders n 20 octber 1998, nn-executivedirectrs may sacrice up t 50% their ees t acquire shares in the cmpany.

2 Nn-executive directrs d nt receive any nn-cash benets as part their remuneratin.

3 Shares issued as remuneratin have been valued and recrded as remuneratin as at the date issue.



Shares, options, dividends and units held by non-executive directors

Name Ordinary shares Dividends received Options Registered scheme interests1

2010 2009 2010 2009 2010 2009 2010 2009No. No. $ $ No. No. $ $

R M Savage 9,609 9,380 15,560 13,417 - - 2,015,797 4,484,416

P V Brasher² 1,000 - 1,050 - - - 497,825 -

M J Brooks 5,753 5,500 9,165 8,345 - - 1,568,458 1,545,392

P Bullock³ 1,000 - - - - - - -

E P McClintock 8,768 8,485 14,102 12,596 - - 188,674 170,528

E M Proust 3,245 3,147 5,227 5,005 - - - -

P B Scott 2,140 2,047 3,410 1,979 - - 73,888 56,744

P J Twyman 8,107 8,772 13,544 11,013 - - 2,045,167 2,526,899

1 Amunts invested in Perpetual ’s prducts.

2 Paul Brasher was appinted as a directr n 1 Nvember 2009.

3 Philip Bullck was appinted as a directr n 1 June 2010.

Non-executive director holdings held directly or indirectly

Name Balance at the start o the year,or or directors appointed in the

year, the date o appointment

Shares acquired via ee sacriiceduring the year

Other changes during the year Balance at the end o the year or,or directors who retired in the

year, the date o retirement

No. o shares

R M Savage 9,380 - 229 9,609

P Brasher - - 1,000 1,000

M J Brooks 5,500 - 253 5,753

P Bullock - - 1,000 1,000

E P McClintock 8,485 - 283 8,768

E Proust 3,147 - 98 3,245

P B Scott 2,047 - 93 2,140

P J Twyman 8,772 - (665) 8,107



Chie Executive Oicer’s and Chie Financial

Oicer’s Declaration

The Chie Executive ocer and Chie Financial ocer declared

in writing t the Bard, in accrdance with sectin 295A the Corporations Act 2001 that the nancial recrds the

Cmpany r the nancial year have been prperly maintained,

the Cmpany’s nancial reprts r the year ended 30 June 2010

cmply with accunting standards and present a true and air

view the Cmpany’s nancial cnditin and peratinal results.

This statement is required annually.

Non-audit services

During the year KPMG, the Cmpany’s auditr, did nt perrm

ther nn-audit services in additin t their statutry duties

(2009: Nil).

The Bard has a review prcess in relatin t any nn-auditservices prvided by the external auditr. The Bard will

cnsider any nn-audit services prvided by the auditr and,

in accrdance with written advice prvided by reslutin the

Audit Risk and Cmpliance Cmmittee, ensure it is satised

that the prvisin these nn-audit services by the auditr

is cmpatible with, and des nt cmprmise, the auditr

independence requirements the Corporations Act 2001 r the

llwing reasns:

▪ all nn-audit services are subject t the crprate gvernance

prcedures adpted by the Cmpany and are reviewed by the

Audit Risk and Cmpliance Cmmittee t ensure they d nt

impact the integrity and bjectivity the auditr

▪ the nn-audit services prvided d nt undermine the general

principles relating t auditr independence as set ut in APES

110 Cde Ethics r Pressinal Accuntants, as they

d nt invlve reviewing r auditing the auditr’s wn wrk,

acting in a management r decisin making capacity r the

Cmpany, acting as an advcate r the Cmpany r jintly

sharing risks and rewards.

The Lead Auditr’s independence declaratin r the

30 June 2010 nancial year is included at the end this reprt.

Rounding o

The Cmpany is a kind reerred t in ASIC Class order98/100 dated 10 July 1998 and in accrdance with that order,

amunts in the nancial reprt and the directrs’ reprt have

been runded t the nearest thusand dllars, unless

therwise stated.

This reprt is made in accrdance with a reslutin

the directrs:

Lead Auditor’s Independence

Declaration Under Section 307C o the

Corporations Act 2001

T: The Directrs Perpetual Limited

I declare that, t the best my knwledge and belie, in relatin

t the audit r the nancial year ended 30 June 2010 there

have been:

(i) n cntraventins the auditr independence requirements

as set ut in the Corporations Act 2001 in relatin t the

audit; and

(ii) n cntraventins any applicable cde pressinal

cnduct in relatin t the audit.

KPMG

Andrew J Yates

Partner

Sydney 24 August 2010

David DeverallChie Executive ocer and Managing Directr

Robert Savage, AMChairman

Sydney 24 August 2010

Directors’ Report or the year ended 30 June 2010 (continued)



oiw ..................................................................................................................................62

Segment results summary .......................................................................................................62

operating envirnment ........................................................................................................... 64

Regulatry envirnment .......................................................................................................... 66

Sharehlder returns .................................................................................................................67Dividends .................................................................................................................................67

riw i ......................................................................................................68

Perpetual Investments ............................................................................................................. 68

Private Wealth ..........................................................................................................................72

Crprate Trust ........................................................................................................................74

Grup and Supprt Services ...................................................................................................76

t gp p ...................................................................................................... 76

siii i ...................................................................................................................77

cpi ........................................................................................................ 78

Interest rate risk .......................................................................................................................79

Credit risk.................................................................................................................................79

Equity risk ................................................................................................................................79

Market risk ...............................................................................................................................79

operatinal risk ........................................................................................................................79

Financial strength .................................................................................................................... 80

Cash fw ................................................................................................................................ 80

s ci b s ................................................................81

appi a: s .....................................................................................82

appi b: a um ............................................................................................85

g ...................................................................................................................................86

management’s discussion

and analysiso inancial condition and results o operations (MD&A)

or the 12 months ended 30 June 2010

Perpetual is a diversied nancial services company

operating in three main markets: unds management, nancial

advisory and trustee services. The Group operates primarily

in Australia. Market actors infuencing the perormance o

these sectors include global economic perormance, stability

o nancial markets and government policy.

The llwing is a discussin and analysis ur results

peratins r the 12 mnths ended 30 June 2010 (FY10).

It als includes a discussin ur nancial cnditin as at

30 June 2010.

The llwing inrmatin shuld be read in cnjunctin with

the Grup’s audited cnslidated nancial statements and

assciated ntes r the nancial year ended 30 June 2010.

All amunts shwn are stated in Australian dllars unless

therwise nted, and subject t runding.

Additinal inrmatin is available n the Grup’s website

www.perpetual.cm.au

A glssary requently used terms and abbreviatins can be

und at the end the discussin.



Overview

The macr-ecnmic cnditins in the 2010 nancial year

imprved signicantly ver the previus year, which underpinned

strnger equity and credit markets. Perpetual was able t imprve

its perating leverage t the markets by preserving the benets the cst savings initiatives undertaken in the 2009 nancial

year. This ensured the mre psitive market envirnment had a

benecial impact n the Grup’s nancial results. Hwever, investr

sentiment remained cautius thrughut the year, particularly in

the nal quarter the nancial year, when markets were vlatile.

Net prt ater tax (NPAT) attributable t Perpetual Limited

rdinary equity hlders was $90.5m r the year ended 30 June

2010 (FY10), up 140% cmpared t $37.7m r the year ended

30 June 2009 (FY09). The imprvement in NPAT was mainly

attributable t:

▪ the increase in perating revenue in line with imprved equity

and credit markets▪ cst management, set by targeted investment in business

initiatives

▪ the recvery prir perid lsses in relatin t the Exact

Market Cash Fund (EMCF)

▪ the absence any material restructuring expenses.

A nal FY10 ully ranked dividend 105 cents per share was

declared, payable n 28 September 2010 and bringing ttal ully

ranked dividends in respect FY10 t 210 cents per share, up

110 cents per share r 110% n FY09.

FY10 underlying prt a ter tax (UPAT) was $72.8m, an 11%

imprvement n FY09. This prgress was the result the Grup

maintaining much the xed cst saving initiatives implemented

in FY09 and increased perating revenues.

The Grup’s nancial strength imprved in FY10, with net tangible

assets per share increasing by 13% t $3.95, cmpared t $3.51

at the end FY09. At the end FY10, the Grup increased its

hldings cash, cash equivalents and liquid investments by 30%t $237.4m, cmpared t $182.8m at the end FY09.

Segment results summary

For the period endedOperating revenue EBITDA 1 Proit beore/

ater taxFY09

$m

FY10

$m

FY09

$m

FY10

$m

FY09

$m

FY10

$m


Private Wealth

Crprate Trust

Grup & Supprt Services

203.0

85.7

80.3

6.1

216.9

111.6

87.5

10.3

84.9

33.5

39.6

(22.3)

102.4

37.7

35.6

(23.7)

59.0

29.1

36.1

(26.0)

72.1

32.6

32.3

(29.3) Ttals bere tax and signiicant items

Incme tax expense

375.1 426.3 135.7 152.0 98.2

(32.5)

107.7

(34.9)

Underlying proit ater tax (UPAT)2 beore signiicant items 65.7 72.8

Signiicant items ater tax:

▪ EMCF gains/(lsses)

▪ Gain/(lss) n sale/impairment investments

▪ Restructuring csts

(13.8)

(6.1)

(8.1)

20.3

(2.6)

-

Net proit ater tax (NPAT) attributable to Perpetual Limited ordinaryequity holders

37.7 90.5


2 UPAT excludes certain items that are either signicant by virtue their size and impact n net prt ater tax, r are ‘ne-’ in nature. UPAT has been calculated inaccrdance with the guidelines issued by the AICD and Finsia. It refects management’s assessment the result r the nging business activities the cmpany.

The llwing table presents the change in underlying prt bere tax by business unit r the six mnths ended 30 June 2010 (2H10)

cmpared t the six mnths ended 30 June 2009 (2H09), and the six mnths ended 31 December 2009 (1H10); and FY10 cmpared

t FY09.

Change in Underlying ProitBeore Tax

2H10 v 2H09

$m

2H10 v 2H09

% change

2H10 v 1H10

$m

2H10 v 1H10

% change

FY10 v FY09

$m

FY10 v FY09

% change


Private Wealth

Crprate Trust

Grup & Supprt Services

11.9

6.4

(1.6)

0.9

+51%

+55%

-10%

+6%

(1.7)

3.6

(3.3)

1.1

-5%

+25%

-19%

+7%

13.1

3.5

(3.8)

(3.3)

+22%

+12%

-11%

-13%

Total 17.6 +49% (0.3) -1% 9.5 +10%

Frm the abve table, the Grup’s perating leverage t Australian equity market perrmance is apparent. The 49% imprvement inthe Grup’s 2H10 underlying prt bere tax cmpared t 2H09 was mainly driven by imprved equity market perrmance. Underlying

perrmance in FY10 imprved by arund 10% cmpared t FY09, whilst perrmance between 1H10 and 2H10 was bradly unchanged.



The prtability each business unit is heavily infuenced

by its key revenue drivers:

▪ unds under management (FUM) r Perpetual Investments

▪

unds under advice (FUA) r Private Wealth

▪ unds under administratin (FUA) r Crprate Trust.

The Grup earns the majrity its revenue based n a

percentage ttal assets under management, advice r

administratin. Arund 27% the Grup’s revenues are charged

n a per transactin r time basis, hwever, this is expected

t change ver time as the Grup expands its ee r service

activities in Private Wealth and Crprate Trust.

The table belw, and n the next page, summarises the

mvements in each business unit’s key revenue driver acrss

the year. Mre detailed analysis is cntained within the ‘Review

Businesses’ sectin.

Movements in key revenue drivers and operating

environment

The largest drivers ttal revenue are the value FUM within

Perpetual Investments and FUA within Private Wealth, which are

mainly infuenced by the level the Australian equity market.

At the end FY10, Perpetual Investments’ FUM and Private

Wealth’s FUA was arund 75% and 55% expsed t dmestic

and internatinal equity markets, respectively.

The key asset classes managed by the Grup are equities and

cash and xed interest. Average Grup FUM increased by 7% in

FY10 due t imprving equity markets in the rst three quarters the year. Hwever, the year-n-year increase in Grup FUM r

FY10 was limited t 3% as a result the sharp decline in markets

in the last quarter the year.

In FY10 there was $1.9b net utfws in Perpetual Investments,

cmpsed as llws:

▪ The equities asset class experienced an aggregate $0.4b

net utfw – a net $0.3b imprvement n FY09. While

aggregate fw in equities was negative, ur actively managedequity strategies enjyed net infws $0.6b in FY10

cmpared t $0.6b net utfws in FY09. Quantitative

investment strategies, which typically earn a lwer ee, had

net utfw arund $1.0b in FY10 cmpared t $0.1b net

utfw in FY09.

▪ The cash and xed interest asset class experienced net

utfws arund $1.4b, versus $100m net infw in FY09,

as investrs sught expsure t ther investment strategies.

▪ A $0.1b reductin in investment assets backing Perpetual

Prtected Investments (PPI) in respnse t lan repayments

by investrs.

Private Wealth FUA increased by 22% ver FY10, driven by

a cmbinatin imprved equity and credit markets and

tw acquisitins: Grsvenr Financial Services and Frdham

Business Advisrs.

Crprate Trust FUA decreased by 13% ver FY10 in respnse t

the lwer levels RMBS issuance by the industry during the year

when cmpared t levels prir t the Glbal Financial Crisis (GFC)

and increased run- rates, in excess histrical levels. The

Grup cntinued t grw its mrtgage services business in FY10

with vlumes dubling cmpared t FY09.

The llwing table details the mvement in each business unit’s

key revenue drivers:

At end o FY08

$b

FY09

$b

Net

lows

$b

Other

$b

FY10

$b

FY10

v FY08

% variance

FY10

v FY09

% variance

Perpetual Investments FUM (including Direct)

Private Wealth FUA

Crprate Trust FUA

30.3

7.7

222.9

26.2

6.8

241.4

(1.9)

-

(30.9)

2.6

1.5

-

26.9

8.3

210.5

-11%

+8%

-6%

+3%

+22%

-13%

The llwing chart shws the Grup’s average FUM and revenue margin ver the last three years:

A v g F U M $

b

R e v e n u e m a r g i n ( b p s )

1H08 2H08 1H09 2H09 1H10 2H10

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

0.10 bps

0.20 bps

0.30 bps

0.40 bps

0.50 bps

0.60 bps

0.70 bps

0.80 bps

Australian Equities

Cash and fixed interest

Quantative Investments

Margin excluding performance fees

Global Equities

Other



Average Group FUM 1H08

$b

2H08

$b

1H09

$b

2H09

$b

1H10

$b

2H10

$b

FY09

$b

FY10

$bPerpetual Investments

Private Wealth

36.9

1.9

31.3

1.9

26.8

1.6

23.2

1.4

26.8

1.6

26.8

1.6

25.0

1.5

26.8

1.6

Total average FUM 38.8 33.2 28.4 24.6 28.4 28.4 26.5 28.4

Average FUM revenue margin 82 bps 82 bps 74 bps 77 bps 75 bps 78 bps 75 bps 76 bps

Average FUM revenue margin excludingperrmance ees

80 bps 76 bps 74 bps 69 bps 75 bps 76 bps 72 bps 76 bps

The Grup reprts the majrity the abve FUM-related revenue

in the Perpetual Investments business segment. In additin,

revenue attributable t the Grup’s retail custmers wh invest

directly in Perpetual Investments’ range prducts is reprted

as part Private Wealth’s revenue.

The Grup’s main surce revenue is rm its unds under

management. Average FUM revenue margin r FY10 was

bradly in line with FY09 at 76 and 75 bps respectively. Excluding

the impact perrmance ees, the Grup’s average FUM

revenue margin increased by 4 bps t 76 bps in FY10 rm

72 bps in FY09.

Management calculates the expected impact n revenue,

acrss all its businesses, r each 1% mvement in the All

ords. Based n the level the All ords at the end FY10, a

1% mvement in the market changes annualised revenue by

apprximately $2.0m t $2.5m. It is wrth nting this mvement

is nt linear t the verall value the market. This means that asthe market reaches higher r lwer levels, a 1% mvement may

have a larger r smaller eect n revenue as FUM and FUA are

cmprised bth equity market and nn-equity market-sensitive

asset classes.

Operating environment

FY10 has been characterised by a recvery in the glbal

ecnmy and the nancial markets since the equity market lw

pint March 2009.

Ater a sharp cntractin in demand during the latter part

2008 and early 2009, the glbal ecnmy started t stabilise and

resume grwth in respnse t the substantial ecnmic stimulusprvided by gvernments arund the wrld. Grwth has been

led by the emerging wrld, particularly China, impacting ther

ecnmies in the regin and cmmdity markets. Ecnmic

expansin in majr established ecnmies has been mre

mdest due t a mre prlnged impact the GFC.

During FY10 the unctining glbal nancial markets imprved,

allwing a gradual winding back the extrardinary supprt

rm many gvernments and central banks arund the wrld.

In line with this, sentiment in glbal nancial markets imprved

cnsiderably in FY10. This general imprvement came despiteperidic setbacks leading t perids heightened risk aversin.

The mst recent incident in this regard ccurred in the June

2010 quarter, when investrs became cncerned abut the

scal psitin and creditwrthiness sme Eurpean cuntries,

particularly Greece. This credit threat appeared t pse a new

challenge r the glbal ecnmy at the precise pint where its

recvery is transitining between the ading impact rebund

actrs such as scal stimuli and a mre mature phase during

which GDP gains will increasingly depend n a recvery in

private investment and cnsumptin. Glbal equity markets

ell signicantly in the June 2010 quarter in respnse t these

munting cncerns.

In Australia, ecnmic cnditins were better than anticipated in

the previus year. Ater cntracting in the December quarter

2008, the ecnmy expanded at a reasnable pace thrughut

calendar 2009, with activity supprted by the stimulatry settings

mnetary and scal plicy, Australia’s strng trade links with a

rapidly recvering Asia, a relatively high rate ppulatin grwth

and a sund nancial system. Unemplyment peaked at arund

5.8% at the beginning FY10, and was at 5.1% by the end

the perid.

As the risk a serius ecnmic cntractin in Australia

subsided, the Reserve Bank Australia (RBA) in octber 2009

decided t reduce the level mnetary stimulus by increasingthe vernight cash rate rm 3.0%, initially t 3.25%. Since then,

the vernight cash rate has been raised by 0.25% ve mre

times, mst recently in May 2010, taking it t 4.5%.

The S&P ASX All ordinaries Price Index (All ords) increased in

value during FY10 by arund 10%, clsing at 4,324.8 at the end

the perid, cmpared t 3,947.8 at the end FY09.

The llwing table details the mvements in average Grup unds under management and revenue margins:



The llwing chart shws the mvement in bth the All ords and average index r FY09 and FY10:

J u l 0

8

A u g 0 8

S e p 0 8

O c t 0

8

N o v 0

8

D e c 0 8

J a n 0 9

F e b

0 9

M a r

0 9

A p r 0

9

M a y

0 9

J u n 0 9

J u l 0

9

A u g 0 9

S e p 0 9

O c t 0

9

N o v 0

9

D e c 0

9

J a n 1 0

F e b

1 0

M a r

1 0

A p r 1

0

M a y

1 0

J u n 1 0

3,250

3,500

3,750

4,000

4,250

4,550

4,750

5,000

5,250

I n d e x

FY09 FY10

FY10 Avg All Ords

FY09 Avg All Ords

Avg All Ords 2nd half avg All Ords1st half avg All OrdsSpot close All Ords

S&P ASX All ordinaries Price Index 1 July 2008 - 30 June 2010

The Australian unds management industry has been experiencing a return net infws as investrs cntinued t transitin assets ut

lw yielding risk-averse bank depsit and cash management style prducts int a greater variety investment strategies. Based n

the mst recent market data, the industry returned t a net infw arund $6.2b in the 12 mnths t March 2010, cmpared t a net

utfw arund $29.0b in the previus year. Cnsistent with experience in ther cuntries, there was an increase in und fw t indexmanagers, away rm active managers such as Perpetual.

Total market quarterly net lows since June 2006

J u n 0 6

S e p 0 6

D e c 0 6

M a r

0 7

J u n 0 7

S e p 0 7

D e c 0 7

M a r

0 8

J u n 0 8

S e p 0 8

D e c 0 8

M a r

0 9

J u n 0 9

S e p 0 9

D e c 0 9

M a r

1 0

(20.0)

(20.0)

0

10.0

20.0

30.0

40.0

$ b

Surce: Plan r Lie March 2010

The abve chart demnstrates the recvery infws int the Australian unds management industry. Hwever, investr cndence

remains ragile with net infws still well belw pre-GFC levels.

The imprvement in credit market cnditins in FY10 fwed int the residential mrtgage backed securities market (RMBS), where

spreads cntinued t narrw, increasing the cndence bth issuers and investrs.



RMBS issuance quarterly

0

10

20

30 250

200

150

100

50

0

$ b

A v e r a g e r e v a l u a t i o n m a r g i n b p s – 2 y e a r s e n

i o r

00 01 02 03 04 05 06 07 08 09 10

Non AOFM AOFM

Spread margin

Year ended 30 June

Surce: www.AoFM.gv.au; S&P, Macquarie Bank and Perpetual

During FY10, bth issuance and pricing imprved, with increased

participatin rm real mney investrs amid reduced reliance n

the Federal Gvernment’s AoFM supprt prgram. These trends

are apparent rm the abve chart.

Regulatory environment

The past nancial year has been characterised by signicant

regulatry review. In particular, ur areas pssible regulatry

rerm have the ptential t infuence the perating envirnment

Perpetual:

▪ The Gvernment’s respnse t the Henry Review (a review

Australia’s taxatin system, including structural settings r

superannuatin) had a strng cus n measures t underpin

the adequacy Australia’s superannuatin savings. Mst

signicantly, it expressed the intentin t gradually increase

cmpulsry superannuatin cntributins (the SGC) rm the

current 9% t 12% by 2020.

▪ The Gvernment’s Future Financial Advice plicy (whichrepresents its respnse t the recmmendatins the Ripll

Parliamentary Inquiry) is likely t impact directly n nancial

advisers and indirectly n payment structures r many

participants in wealth management, including asset managers

and prviders administratin platrms and services.

▪ The Super System Review (Cper Review) envisins

substantial changes in the delivery superannuatin

t members.

▪ The Australian Financial Services Frum (Jhnsn Review)

prpses changes aimed at psitining Australia as a

nancial services hub, including enhancing the internatinal

cmpetitiveness Australia’s unds management sectr.

These areas prpsed rerm are at diering levels

develpment and have nt been nalised. Signicantimplementatin detail remains t be wrked thrugh. Therere, the

nal impact prpsed changes will nt be claried until regulatry

details and the exact rm legislative change is knwn.

Perpetual is well psitined t capitalise n the pprtunities and

respnd t the challenges presented by regulatry change.

Its track recrd as a prvider ee-r-service nancial advice,

prducts and services t high net wrth individuals, and its

cntinued ability t generate abve benchmark returns r its

active management equity unds allw Perpetual t er a

sund value prpsitin t its target custmer segments in

any envirnment.

Perpetual believes that regulatry change is mst likely t create

challenges r wealth management mdels that cus n prviding

basic and standardised cmmissin-based advice r mass

market investrs, a segment in which Perpetual des nt perate.



Shareholder returns

For the period ended1,2 1H09 2H09 1H10 2H10 FY09 FY10

Diluted earnings per share (EPS) n UPAT

Diluted EPS n NPAT

Annualised return n average equity (RoE) n UPAT

Annualised RoE n NPAT

cents

cents

%

%

99.0

33.8

29.1

9.9

56.8

55.5

17.6

17.2

85.1

115.0

22.9

30.9

84.1

95.6

20.6

23.4

155.6

89.4

21.8

12.5

169.3

210.5

22.4

27.9

1 EPS is calculated using the weighted average number rdinary shares and ptential rdinary shares n issue.

2 The returns n equity quted in the abve table are an annualised rate return based n actual results r each perid. RoE is calculated using the NPATattributable t rdinary equity hlders r the perid, divided by average equity attributable t the Grup’s rdinary equity hlders, multiplied by the number suchperids in a calendar year in rder t arrive at an annualised return n equity.

In FY10, EPS and RoE based n UPAT bth increased:

▪ Diluted EPS 169.3 cents per share represented an 8.8%

increase n FY09, in line with the imprvement in underlying

prtability, and

▪ RoE increased by 60 bps t 22.4% rm 21.8% in FY09.

Bth EPS and RoE n NPAT were substantially higher in FY10

cmpared t FY09, predminantly due t the recvery prir

perid lsses n the EMCF, cmpared t lsses incurred in FY09

and the absence any restructuring expenditure in FY10.

During FY10, the number shares n issue increased by 2%

(+0.9m shares) t 43.4m shares due t:

▪ emplyee share plan related rdinary share issues

▪ the acquisitin Grsvenr Financial Services within ur

Private Wealth business, which was partly nanced by an issue

rdinary shares

▪ participatin in the Grup’s dividend reinvestment plan (DRP)

that accmpanied the FY09 nal dividend paid 30 September

2009 and the FY10 interim dividend paid 1 April 2010.

Average sharehlders’ equity r FY10 increased by 7.5%

cmpared t FY09 due t:

▪ the nal dividend r FY09 (paid 30 September 2009) and the

interim dividend r FY10 (paid 1 April 2010) being lwer than

FY10 NPAT, which increased retained earnings

▪ the issue rdinary shares in relatin t the acquisitin

Grsvenr Financial Services, which increased

cntributed equity

▪ participatin in the DRP, which increased cntributed equity.

Dividends

For the period ended 1H09 2H09 1H10 2H10 FY09 FY10

Fully ranked dividend per rdinary share

Dividend payut rati1

Prprtin NPAT paid/payable as dividend2

cents

%

%

40.0

118.3

119.6

60.0

108.1

108.5

105.0

91.3

92.3

105.0

109.8

110.42

100.0

111.9

112.7

210.0

99.8

100.52

1 Dividend payut rati is calculated using dividend(s) declared r the relevant perid, divided by the diluted earnings per share.

2 Based n rdinary ully paid capital at end FY10.

The Grup’s dividend plicy is t pay dividends within a range

80-100% NPAT n an annualised basis, with a galt maximise ully ranked dividends t sharehlders. The

dividend plicy is designed t be sustainable ver the lng

term while prviding the Grup with an apprpriate degree

nancial fexibility.

An FY10 nal ully ranked dividend 105 cents per share will be

payable n 28 September 2010 (ex-dividend date 1 September

2010 and recrd date 7 September 2010).

This brings ttal ully ranked dividends r FY10 t 210 cents per

share, cmpared t ttal ully ranked dividends 100 cents per

share in FY09.

The FY10 ttal dividend is derived rm tw cmpnents prt:

▪ UPAT $72.8m which equates t 169 cents per share

▪ signicant items $17.7m ater tax which equates t 41 cents

per share – signicant items, which include EMCF recveries,are nt cnsidered t be maintainable earnings.

The DRP will be peratinal r the FY10 nal dividend and will be

met by issuing new shares t DRP participants. The issue price

per share r the FY10 nal dividend DRP will be the average

market price, as dened in the DRP terms1, less a 2.5% discunt.

The pricing perid r the FY10 nal dividend DRP will be the

10 trading days cmmencing 8 September 2010 and ending

21 September 2010.

The Grup’s ranking credit balance as at the end FY10

was $62.5m, which will enable it t ully rank $145.8m cash

dividends. Ater payment the nal dividend r FY10, the

ranking balance is capable ully ranking a urther $100.2m

dividends.

1 The Grup’s DRP Rules can be und at http://sharehlders.perpetual.cm.au/Sharehlder services/Dividend Reinvestment Plan.



Review o businesses


Perpetual Investments is ne Australia’s mst highly regarded investment und managers, ering a brad range prducts r

persnal investment, superannuatin and retirement.

We er investrs strng investment capabilities acrss a range asset classes, including Australian and internatinal equities, prperty

securities, multi-sectr and multi-manager unds, mrtgages, xed interest and cash.

Perpetual Investments’ inancial summary

For the period ended1H09

$m

2H09

$m

1H10

$m

2H10

$m

FY09

$m

FY10

$m

Revenues

operating expenses

105.4

(56.3)

97.6

(61.8)

105.9

(54.4)

111.0

(60.1)

203.0

(118.1)

216.9

(114.5)

EBITDA

Depreciatin and amrtisatin

Equity remuneratin expense

49.1

(2.3)

(11.1)

35.8

(3.1)

(9.4)

51.5

(2.9)

(11.7)

50.9

(2.4)

(13.3)

84.9

(5.4)

(20.5)

102.4

(5.3)

(25.0)

Proit beore tax 35.7 23.3 36.9 35.2 59.0 72.1

Average FUM revenue margin (nrmalised FUM basedrevenues/average FUM) 70 bps 74 bps 71 bps 74 bps 72 bps 73 bps

Average FUM revenue margin excluding perrmance ees 70 bps 66 bps 71 bps 73 bps 68 bps 72 bps

Average FUM (excludes Direct & AERF1) $26.8b $23.2b $26.8b $26.8b $25.0b $26.8b

1 Direct reers t the Grup’s retail custmers wh invest directly in Perpetual Investments range prducts. This FUM and assciated revenue is nt included in thiscalculatin average FUM r Average Margin in the abve table.

Functional units

Asset class

Equities

Income and

Multi-Sector

Superannuation and Investment

Solutions

Equities

Cash and ixed interest

other FUM related

other nn-FUM related

✓

✗

✗

✓

✓

✓

✓

✓

✓

✓

✓

✓

FY10 prt bere tax $72.1m represented a 22% increase n

FY09. 2H10 prt bere tax $35.2m represented a decrease

5% n 1H10 but a 51% increase n 2H09.

Average FUM in FY10 increased 7% n FY09. 2H10 average

FUM was fat n 1H10 due t the dwnward mvement in equity

markets experienced during the June 2010 quarter. 2H10 averageFUM was up 15% n 2H09 as a result a strng recvery in

equity markets in 1H10, set by a sharp decline in these same

markets in 2H10. These verall mvements in FUM crrelate with

the mvements in the equity markets ver these perids but have

als been impacted by net utfws acrss all asset classes.

The average FUM revenue margin in FY10 was 73 bps, slightly

higher than in FY09. Margins in FY09 have been nrmalised r

the $5.1m negative revenue adjustments that related t prir

years. Revenues used t calculate the average FUM margin

exclude nn-FUM related revenue such as net interest earned n

PPI lans and smartsuper revenue.

The margin in 2H10 imprved n 1H10 as a result the

recgnitin sme perrmance ees, which aligns with the time

perid when perrmance ees are determined. Excluding the

impact perrmance ees, the average FUM revenue margin

increased by 4 bps t 72 bps in FY10 rm 68 bps in FY09.

Perpetual Investments manages investments acrss a number

asset classes, including equities, xed interest and cash. It als

manages a number administrative businesses such as sel

managed superannuatin und (SMSF) administratin

and a platrm business administering unds managed by

Perpetual and ther und managers. Perpetual Investments’

asset classes are categrised acrss a number unctinal

units in the table belw.

Revenue rm equities is earned acrss each unctinal unit Perpetual Investments, including multi-sectr unds within

Incme and Multi Sectr, and rm Perpetual unds ered via

the WealthFcus platrm within Superannuatin and Investment

Slutins.

other FUM related revenue includes revenue earned n external

unds hsted n the Grup’s platrms, smartsuper revenue

and revenue generated rm structured prducts unds under

management.

other nn-FUM related revenue includes net interest margin n

the structured prducts’ lan bk and interest revenue earned

n peratinal bank accunts acrss all the unctinal units.

Revenue generally increases r decreases as FUM increases r

decreases. Increases in FUM result rm market appreciatin,

psitive investment perrmance r custmers r asset infws

rm new and existing custmers. Investment int ur unds is

generally thrugh either institutinal investrs, rm whm we

generally receive lwer margins, and rm intermediary/retail

investrs, wh typically invest small amunts but rm whm we

receive a higher margin.



We er ur investrs an array unds in which t invest. Sme these unds are tailred r bth institutinal and intermediary/retail

investrs, whilst sme unds are available t intermediary/retail investrs nly. Funds that are ered exclusively r ur intermediary/retail

investrs typically incur a higher ee. Decreases in FUM can result rm market depreciatin, negative investment perrmance r asset

utfws due t redemptins by ur custmers. Perrmance ees will fuctuate rm perid t perid and may nt crrelate with general

market changes, since these ees are driven by relative perrmance t the respective benchmark rather than abslute perrmance.

The llwing table prvides an analysis revenue by asset class:

Revenue or the period ended1H09

$m

2H09

$m

1H10

$m

2H10

$m

FY09

$m

FY10

$m

By asset class:

▪ Equities

▪ Cash and xed interest

▪ other FUM related

▪ other nn-FUM related

81.2

10.9

6.5

6.8

74.3

11.1

5.6

6.6

83.6

13.3

5.4

3.6

87.6

13.4

5.9

4.1

155.5

22.0

12.1

13.4

171.2

26.7

11.3

7.7

Perpetual Investments ttal revenue 105.4 97.6 105.9 111.0 203.0 216.9

Equities – FY10 revenue rm equities, cmprising Australianand glbal equities, increased by $15.7m r 10% n FY09 t

$171.2m, driven by avurable market mvements. 2H10 revenue

increased 5% r $4.0m n 1H10 as a result avurable

market mvements and net infws int ur higher revenue

margin strategies. Partially setting this were net utfws rm

lwer revenue margin strategies – in particular ur quantitative

investment strategy. In additin, 2H10 revenues beneted rm

perrmance ees, albeit at a lwer level than in 2H09.

Cash and xed interest – FY10 revenue increased by $4.7m, r

21% n FY09 t $26.7m, primarily due t peratinal errrs that

adversely aected FY09 revenue by $3.8m. 2H10 revenues were

relatively fat n 1H10, with higher ees received rm EMCF2set by reduced revenue due t net utfws rm mrtgages,

cash and credit unds.

Other FUM related – includes management ees r external

unds n ur WealthFcus platrm and structuring ees n the

PPI structured prducts. Revenue declined by $0.8m in FY10 t

$11.3m cmpared t FY09, mainly due t lwer PPI ees rm the

cmbinatin cntinued run- and the absence new issues

in the last 12 mnths.

Other non-FUM related – revenue decreased by $5.7m t $7.7m

in FY10, primarily due t:

▪ reduced PPI lan interest incme as the bk cntinues t

run

▪ in FY10, respnsibility r AERF and IDPS prducts was

transerred t Private Wealth (ie n impact at Grup level) t

prvide peratinal eciency and alignment with advisers,

reducing nn-FUM revenue by $5.1m.

Perpetual Investments manages the structured prducts lan

bk, where investrs have brrwed unds t invest in a capital

prtected range investments ered within the Perpetual

Prtected Investments (PPI) prduct range. In FY09, additinal

structured prduct lending was suspended as the Grup

determined that it will n lnger use its balance sheet t nancethis type activity.

The capital prtectin prvided t investrs is based n cnstant

prprtin prtli insurance (CPPI) technlgy, which invlves

rebalancing the custmer’s prtli investments during theterm the prduct between equity style investments and less

vlatile assets. Due t the sharp declines in equity markets in

FY09, all the investrs in Series 1 and 2 and sme the

investrs in Series 3 were entirely invested in less vlatile assets

and n lnger had any expsure t equity markets, up r dwn.

In FY10, the Grup presented ‘cash lcked’ investrs in Series

1, 2 and 3 with an er that wuld enable their underlying

investment t regain expsure t equity markets. These ers

were taken up by many investrs, which required them t invest

additinal unds.

In FY10, the utstanding lan bk declined by $130.8m rm

$319.6m at the end FY09 t $188.8m, bradly in line with theGrup’s expectatins, given that arund $108m repayments

in 1H10 were already advised in June 2009. At the end FY10,

the Grup received lan repayment and prduct redemptin

nticatins rm clients t the value arund $23m.

Lans in arrears are actively managed and the ttal

the dubtul debts reserve at the end FY10 was $2.6m

(FY09: $1.0m).

The Grup’s credit expsure is limited t a lss 6% the lan

bk r Series 1 and 2 and 7% r the Series 3 lan bk, given

the limited recurse terms the brrwings used t und these

prtlis. The Grup’s ttal lss expsure t the PPI prtlis at

the end FY10 was $11.4m, versus $16.1m at the end FY09.

FY10 perating expenses $114.5m were 3% lwer than FY09

expenses $118.1m, refecting:

▪ the maintenance cst saving initiatives implemented in FY09

relating t reductins sta and discretinary expenditure

▪ a strnger AUD/EUR exchange rate (the average AUD/EUR rate

was 17% strnger than in the prir year) as well as a reductin

in csts, resulting in lwer expenses incurred in the Grup’s

verseas peratin

▪

the transer the IDPS and AERF prducts t Private Wealth(ie n impact at Grup level)

▪ FY09 included the negative impact rm $3.3m unit

pricing errrs.



This was partially set by:

▪ an increase in PPI lan dubtul debt prvisins and a ull year

smartsuper csts against nine mnths expense in FY09,

as the business was acquired in September 2008

▪ increase in registry ees rm ur custdian in FY10

▪ FY10 including a higher level variable cmpensatin

payments r sta in line with imprved perrmance the

Grup, as well as an increased likelihd equity-based

remuneratin vesting.

Funds under management (FUM)

The table belw details the clsing FUM r the last three scal

years. In FY10, ttal FUM grew by arund 3% t $26.9b. Equities

FUM grew by arund 9% in FY10 t $18.9b. Hwever, grwth in

average FY10 equities FUM was 15% ver average FY09 equities

FUM (detailed in Appendix B), in line with the average All ords,which was 15% higher in FY10.

Fr mst FY10, there were marked imprvements in bth

equity and credit markets glbally and this resulted in investrs

increasing their appetite r risk assets. The resulting mvement

away rm cash triggered infws int a variety investment

strategies.

In FY10, the equities asset class experienced $0.4b net

utfws, cmprising $0.6b net infws int ur actively

managed equity unds, set by $1.0b net utfws rm ur

quantitative investments strategies.

Whilst investrs appear t have chsen t increase theirdmestic equity market allcatins t index and multi-manager

unds in preerence t active single und managers, we enjyed

net infws $0.6b int ur actively managed equity unds in

FY10, underpinned by ur lng-term recrd delivering market

utperrmance r ur investrs. This represented a $1.2b

imprvement n FY09, when we recrded $0.6b net utfws.

In FY10, we experienced net utfws arund $1.0b rm ur

institutinal quantitative investments strategies, cmpared t anet utfw $0.1b in FY09 as investrs redeplyed unds int

ther strategies.

This ttal net utfw $0.4b FUM rm the equities asset

class in FY10 did nt translate int an abslute all in revenue as

the Grup earns higher ees rm its active unds management

activities in cmparisn t the revenue earned rm institutinal

quantitative strategies, which earn lwer base ees.

The belw table shws the mvement in clsing FUM ver the

last 12 mnths. The mve away rm cash was refected in FY10

net utfws $1.4b in the Grup’s cash and xed interest asset

class, which includes the Grup’s mrtgage unds1.

Perpetual’s active management investment style has generated

strng relative perrmance against its respective benchmarks

(knwn as alpha) in virtually all ur unds ver the lng term.

Psitive alpha benets the Grup in three primary ways:

▪ it demnstrates ur expertise in actively managing ur

custmers’ unds and we expect that this will be a psitive

actr in retaining unds and attracting uture infws

▪ it keeps FUM higher

▪ a number institutinal client mandates include perrmance

ee incentives based n the level alpha generated.

FUM at end oFY08

$b

FY09

$b

Net lows

$b

Other2

$b

FY10

$b

Institutinal

Intermediary (master und and wrap)

Retail (including Direct)

8.3

14.8

7.2

8.5

11.9

5.8

(1.2)

(0.3)

(0.4)

0.8

1.3

0.5

8.1

12.9

5.9

All channels 30.3 26.2 (1.9) 2.6 26.9

Australian equities

Glbal equities

19.7

1.5

16.0

1.4

(0.4)

-

1.9

-

17.5

1.4

Equities


other

21.2

7.5

1.6

17.4

7.5

1.3

(0.4)

(1.4)

(0.1)

1.9

0.6

0.1

18.9

6.7

1.3

All asset classes 30.3 26.2 (1.9) 2.6 26.9

2 Includes reinvestments, distributins, incme and asset grwth.

1 In octber 2008, the Grup mved t a quarterly redemptin prcess in respnse t the intrductin guarantees n bank depsits which prmpted a sharp

increase in redemptins rm mrtgage unds acrss the industry. Whilst sme ther und managers have either rzen redemptins r are in the prcess windingup their mrtgage unds, the Grup cntinues t er investrs access t their unds via a quarterly redemptin prcess.



The table belw highlights the cnsistent utperrmance against benchmark (alpha) ur main unds ver shrt and lng-term perids.

Excess investment perormance pa – gross as at end June 2010 Annualised returns(ex 3 months)

Indus tr ia l Share Fund Aust ral ian Share Fund Small Companies Fund Concent ra ted Equ it y Fund Internat ional Share Fund

3 mnths

1 year

+2.29%

+0.07%

+2.39%

+5.90%

+5.03%

+14.64%

+1.80%

+2.80%

-0.07%

-0.36%

3 years +4.07% +4.13% +6.13% +5.83% +2.43%

5 years

7 years

10 years

+2.57%

+2.40%

+4.46%

+2.53%

+2.66%

+4.21%

+4.17%

+2.49%

+8.28%

+3.76%

+2.68%

+5.06%

+1.20%

N/A

N/A

Net fws unds by distributin channel and asset class r the last 24 mnths are detailed in the llwing table:

For the period ended

1H09

Net lows

$b

2H09

Net lows

$b

1H10

Net lows

$b

2H10

Net lows

$b

FY09

Net lows

$b

FY10

Net lows

$b

Institutinal

Intermediary (master und and wrap)

Retail (including Direct)

0.5

(0.9)

(0.4)

0.5

(0.2)

(0.2)

(0.9)

0.1

(0.3)

(0.3)

(0.4)

(0.1)

1.0

(1.1)

(0.6)

(1.2)

(0.3)

(0.4) All distribution channels (0.8) 0.1 (1.1) (0.8) (0.7) (1.9)

Australian equities

Glbal equities

(0.4)

(0.1)

(0.3)

0.1

-

-

(0.4)

-

(0.7)

-

(0.4)

-

Equities


other

(0.5)

(0.2)

(0.1)

(0.2)

0.3

-

-

(1.0)

(0.1)

(0.4)

(0.4)

-

(0.7)

0.1

(0.1)

(0.4)

(1.4)

(0.1)

All asset classes (0.8) 0.1 (1.1) (0.8) (0.7) (1.9)

The Grup surces FUM thrugh three primary distributin

channels:

Institutional – industry unds and clients wh invest large sums.

We earn ur lwest revenue margin rm this channel. Hwever,institutinal FUM des nt require cmplex technlgy and

service structures, such as call centres and dedicated sales and

distributin supprt, s the servicing cst is lwer.

In FY10, the institutinal channel experienced $1.2b net

utfws, principally rm ur cash investment prducts, with net

utfws rm equities $0.1b n the back strng infws

$0.9b int ur active style unds, set by utfws $1.0b rm

ur quantitative investment strategies.

Intermediary – this channel includes FUM rm nancial advisers

wh invest with Perpetual via external platrm prviders. This is

ur largest surce FUM.

FY10 intermediary net fws imprved $0.8b n FY09, with net

utfws $0.3b in FY10. In FY10, we experienced net infws

acrss ur range equities unds, with sme the Grup’s

newer unds, which appeal t high net wrth investrs, nding

gd supprt rm this channel. outfws experienced were

mainly cncentrated thrugh ur Industrial Share Fund and

ur diversied investment unds and mrtgage prducts.

This cmpares with FY09, where investrs mved int mre

deensive assets, cnsistent with the brader industry.

Retail – this channel surces FUM rm advisers and clients wh

invest with Perpetual directly and investrs wh cme thrugh

ur wn WealthFcus platrm, where sme FUM fws int

third party prducts. This FUM earns the highest grss margin.

Hwever, it requires a signicant supprt inrastructure, whichmakes the cst t service this channel the highest.

In FY10, ur retail fws imprved by $0.2b n FY09. This channel

experienced net utfws $0.4b in FY10, spread acrss bth

equities and cash asset classes.

Relative share FUM and underlying revenue by each the

abve channels has remained relatively stable ver the last

18 mnths. The institutinal channel als benets rm the

ptential t earn perrmance ees.

The abve table als cmpares net fws by asset class

acrss the last 24 mnths. As nted previusly, there has been

a perid-t-perid imprvement in net fws in equities, with net

utfws reducing rm $0.5b in 1H09 t neutral in 1H10. Whilst

2H10 shws $0.4b in net utfw in equities, this is nt refective

the Grup’s strng perrmance in actively managed equities.

As discussed previusly, these unds recrded net infws

$0.3b in bth 1H10 and 2H10, set by net utfws $0.3b

and $0.7b in quantitative style managed unds ver 1H10 and

2H10 respectively.

Net fws in cash and xed interest generally refect the sentiment

investrs as they mve t and rm cash style prducts

depending n prevailing cnditins in equity markets.



Private Wealth

Private Wealth is the Grup’s specialist nancial services

business, which prvides hlistic nancial slutins r high net

wrth individuals. It aims t be the leading prvider wealth

management services t nancially successul Australians and

their amilies.

Private Wealth als services the Grup’s retail custmers wh

invest directly in Perpetual Investments’ range prducts.

Financial slutins range rm strategic advice, nging

investment advice and management, DIY superannuatin

services, custdial slutins, estate planning, estate

administratin, executrial services and trustee services,

including charitable trusts. Fllwing the acquisitin Grsvenr

Financial Services and Frdham Business Advisrs in FY10,

the Grup has urther increased its capabilities in specialist

accunting and taxatin advice.

Each client receives highly individualised attentin, custmised

t his r her needs and based n a lng-term plan cused n

wealth creatin and prtectin.

Private Wealth manages nancial assets r ver 6,800 private

clients, estates, trusts and charitable trusts, with unds under

advice $8.3b at the end FY10, up 22% rm $6.8b at the

end FY09.

The Grup is ne the largest managers private charitable

undatins in Australia, with ver $1.1b in unds under

management as at the end FY10. Perpetual is trustee t mre

than 450 charitable trusts, supprting cultural, medical, scial,

envirnmental, religius and educatinal causes.

In FY10, the Grup cntinued t execute n its grwth strategy

thrugh a cmbinatin rganic and inrganic initiatives.

organic initiatives undertaken during the year have increased ur

cmpetency and capability in the llwing cre activities:

▪ Investment and strategic advice – investment teams have been

strengthened and a new direct equities investment prcess

has been deplyed

▪ Fiduciary – imprved quality and cnsistency services

▪ Philanthrpy – increased transparency and simplied

prcesses t make applicatins t the 450 philanthrpic trusts

we manage

▪ Custmer service erings – an increase in the number

client acing sta, including senir nancial cnsultants and

cntinued imprvements t the client management system,

which nw delivers mre ecient prcesses and an increased

cus n quality and risk management.

The Grup als cntinued t implement its inrganic grwth

strategy with the acquisitin tw cmplementary businesses

that specialise in the high net wrth segment the advice

market:

▪ In September 2009, the Grup acquired a 100% interest in

Grsvenr Financial Services, a Sydney-based advisry rm

specialising in medical, dental and legal pressins. Grsvenr

prvides clients with strategic nancial and taxatin advice

and investment management. Cnsideratin was $20.1m and

cmprised a cmbinatin cash and shares subject t earn-

uts. Acquired FUA was arund $0.4b.

▪ In January 2010, the Grup acquired 100% Frdham

Business Advisrs, a Melburne-based advisry rm

specialising in private business wners and their amilies.

Frdham prvides clients with accunting, taxatin and

strategic nancial advice and investment management.

Cnsideratin was $34.8m, cmprising cash and deerred

cnsideratin subject t earn-uts. Acquired FUA was arund

$0.5b. In FY09, wealth management ees cmprised 25% Frdham’s revenue.

Financial summary

Private Wealth’s FY10 prt bere tax increased by 12%

t $32.6m cmpared t $29.1m in FY09. This refects the

imprvement in investment markets, partially set by increased

investment in the cre business activities.

FY10 prt bere tax included acquisitin and integratin csts

plus amrtisatin identiable intangibles assciated with recent

acquisitins $3.3m bere tax, versus $0.4m in FY09.


$m

2H09

$m

1H10

$m

2H10

$m

FY09

$m

FY10

$m

Revenues

operating expenses

45.0

(25.3)

40.7

(26.9)

47.4

(30.6)

64.2

(43.3)

85.7

(52.2)

111.6

(73.9)

EBITDA



19.7

(1.1)

(1.2)

13.8

(1.3)

(0.8)

16.8

(1.4)

(0.9)

20.9

(2.5)

(0.3)

33.5

(2.4)

(2.0)

37.7

(3.9)

(1.2)

Proit beore tax 17.4 11.7 14.5 18.1 29.1 32.6

Clsing unds under advice (FUA) $6.5b $6.8b $8.1b $8.3b $6.8b $8.3b

Average unds under advice (FUA) $7.1b $6.6b $7.8b $8.5b $6.9b $8.1b

Private Wealth nancial summary



The main surce Private Wealth revenue is FUA, which

accunted r 78% FY10 revenue, versus 81% in FY09.

FY10 revenues increased by $25.9m r 30%, t $111.6m,

cmpared t $85.7m in FY09. This increase in revenue was

primarily attributable t the llwing:

▪ $12.4m rm increased FUA, which $5.6m related t

acquired businesses

▪ $10.0m increase in ee revenue r accunting and tax

services and ther advisry services, mainly rm the acquired

businesses

▪ $5.1m rm AERF and IDPS business, which was transerred

rm Perpetual Investments (ie nil impact at Grup level), set

by a

▪ $1.6m reductin in interest incme rm peratinal cash fws.

In FY10, revenue $15.4m was earned rm the llwing

recently acquired businesses:

▪ Grsvenr Financial Services, acquired in September 2009

(nine mnths revenue $4.6m in FY10 versus nil in FY09)

▪ Frdham Business Advisrs, acquired in January 2010

(six mnths revenue $10.8m in FY10 versus nil in FY09).

Arund $13.7m r 90% the revenue rm the acquired

businesses was earned in 2H10, versus $1.7m r 10% in 1H10,

refecting bth the timing and size each the acquisitins.

Arund $9.8m r 65% the FY10 acquired revenue was

nn-FUA related. The main surce r this nn-FUA revenuewas the Frdham Business Advisrs acquisitin which

accunted r arund 95%, predminantly accunting and

tax services revenue.

operating expenses increased in FY10 by $21.7m r 42%,

t $73.9m. This increase was attributable t the llwing:

▪ $12.9m rm recently acquired businesses, predminantly

persnnel csts, which arund $1.1m was incurred in 1H10

and $11.8m was incurred in 2H10

▪ $2.0m integratin and acquisitin csts r the recently

acquired businesses, which arund $0.9m and $1.1m were

incurred in 1H10 and 2H10 respectively

▪ $6.8m relating mainly t increased persnnel csts as the

business cntinued t invest in rganic grwth initiatives.

This included increasing the number client acing sta and

strengthening ur advisry teams. In additin, the imprved

nancial perrmance the Grup in FY10 cmpared t FY09

led t higher variable cmpensatin.

Depreciatin and amrtisatin expense $3.9m was incurred in

FY10, cmpared t $2.4m in FY09. This increase $1.5m was

primarily due t $1.3m amrtisatin identiable intangibles

due t the Grup’s recent acquisitins.

Equity remuneratin expense $1.2m was incurred in FY10

cmpared t $2.0m in FY09. The key driver r this decrease

was the resignatin persnnel whse unvested entitlements

t shares and ptins under lng-term incentive plans were

reited, giving rise t a write-back expense recgnised in

prir perids.

In FY10, the Grsvenr and Frdham acquisitins bth made a

small psitive cntributin t the Grup’s nancial perrmance

ater taking int accunt acquisitin, integratin, amrtisatin anddepreciatin charges.

Funds under advice (FUA)

FUA at end oFY08

$b

FY09

$b

Net lows

$b

Acquired 1

$b

Other 2

$b

FY10

$b

Financial advisry:

▪ superannuatin

▪ nn-superannuatin

2.7

2.0

2.4

1.8

-

-

0.7

0.2

0.2

0.2

3.3

2.2

4.7 4.2 - 0.9 0.4 5.5

Fiduciary services:

▪ philanthrpic

▪ trusts and estates

1.1

1.9

1.0

1.6

-

-

-

-

0.1

0.1

1.1

1.7

3.0 2.6 - - 0.2 2.8

Total unds under advice 7.7 6.8 - 0.9 0.6 8.3

1 Includes FUA acquired thrugh the purchase Grsvenr Financial Services in September 2009 and Frdham Business Advisrs in January 2010.

2 Includes reinvestments, distributins, incme and asset grwth.



Private Wealth’s FUA increased by 22% in FY10, driven by a

cmbinatin imprved investment markets, FUA acquired rm

businesses purchased during the year and an imprvement in net

fws. At the end FY10, arund 55% Private Wealth’s FUA

was linked t equity market mvements.

Net fws imprved in FY10, with neutral net fws cmpared

t net utfws arund $0.2b in FY09. In FY10, there was

an increase in grss infws and a reductin in grss utfws

cmpared t FY09. This imprvement was driven by a

cmbinatin imprved investr cndence and higher infws

rm reerrals rm existing clients and leads generated thrugh

an enhanced alliance partner netwrk.

Private Wealth has cntinued t cus n executing initiatives

t deliver n ur visin being the leading prvider wealth

management services t nancially successul Australians and

their amilies. Inrganic initiatives are designed t deliver bth

scale and capability t Private Wealth. The businesses that wehave acquired have allwed us t increase ur capacity and

ability t prvide hlistic service erings t the high net wrth

client market.

The Sydney-based Grsvenr acquisitin in 1H10 enhanced

the Grup’s knwledge, capability and understanding the

nancial needs the medical, dental and legal pressins. The

acquisitin Melburne-based Frdham has added signicant

scale t ur presence in Victria and enhanced ur natinal

capability in the private business wner market, as well as ur

tax and accunting services.

our rganic initiatives aim t imprve the quality ur

service t clients and allw cntinued develpment ur

prcesses and systems t increase eciency levels and

scalability. our investment in client acing sta has resulted

in increased persnnel csts, with limited grwth in revenues

in FY10. Hwever, as new client acing sta becme amiliar

with the Grup’s diverse prduct and service erings as well

as intrduce new clients t the Grup, we expect t see

increased revenue.

In FY10, there were a number regulatry reviews related t

the nancial services industry. We believe ur Private Wealth

business remains especially well psitined given ur hlistic

advisry ering, tgether with ur cus n high net wrth

clients. our duciary duties t ur clients have always been

paramunt, evidenced by the delivery impartial advice. In

additin, ur revenues are based n a ee r service mdel and

nt n trail cmmissins.

We believe the rganic investment in the business during FY10,

tgether with ur recent acquisitins, has imprved the Grup’scapabilities and has enhanced the uture prspects the

business.

Corporate Trust

Crprate Trust is a leading prvider crprate trustee,

mrtgage and transactin supprt services t the nancial

services industry. Prducts and services include trustee services

r mrtgage-backed and ther securitisatin prgrams r

majr banks and nn-bank rganisatins; regulatry cmpliance

services r und managers; custdy, unit registry and accunting

services r prperty and mrtgage unds; trusteeships r

crprate debt issues, inrastructure prjects and ther

structures; and mrtgage prcessing services r nancialinstitutins.

Financial summary

As detailed in the llwing table, Crprate Trust’s prt bere

tax decreased 11% t $32.3m r FY10 cmpared t FY09. The

$3.8m decrease in prt has been caused by:

▪ the $2.8m reductin revenue within Trust and Fund Services,

primarily as a result a decline in RMBS FUA

▪ the investment t supprt the rapid grwth ur Mrtgage

Services business– primarily incurred in 2H10.

our Mrtgage Services business, which perates at a lwer

margin than the Trust and Fund Services business unit, has

grwn signicantly during FY10. In rder t supprt this revenue

grwth, Crprate Trust incurred signicant ne- csts

assciated with establishing and rlling ut initiatives t meet the

substantial increase in demand r its service prpsitin.

In 2H10, prt bere tax decreased by 19% against 1H10 due

t the arementined investment and client n-barding csts

assciated with the Mrtgage Services business unit t service

the signicant increase in vlume. This increased investment in

Mrtgage Services, alng with the decline in revenue Trust and

Fund Services, unavurably impacted 2H10 earnings.

Corporate Trust nancial summary


$m

2H09

$m

1H10

$m

2H10

$m

FY09

$m

FY10

$m

Revenues

operating expenses

41.0

(19.3)

39.3

(21.4)

41.6

(22.2)

45.9

(29.7)

80.3

(40.7)

87.5

(51.9)

EBITDA



21.7

(1.6)

(0.1)

17.9

(1.7)

(0.1)

19.4

(1.5)

(0.1)

6.2

(1.6)

(0.1)

9.6

(3.3)

(0.2)

5.6

(3.1)

(0.2)

Proit beore tax 20.0 16.1 17.8 14.5 36.1 32.3



FY10 revenues increased 9% n FY09, t $87.5m, with 2H10 revenues up 17% n 2H09. Trust and Fund Services revenue declined due

t the cntinued run- securitisatin FUA. This was partially mitigated by new business grwth within the Fund Services business and

increased revenue in ur Mrtgage Services business as vlumes increased thrugh the year. The llwing table details the revenue split

between Trust and Fund Services, and Mrtgage Services:

Revenue or the period ended1H09

$m

2H09

$m

1H10

$m

2H10

$m

FY09

$m

FY10

$m

Trust and Fund Services

Mrtgage Services

29.9

11.1

28.5

10.8

27.9

13.7

27.7

18.2

58.4

21.9

55.6

31.9

Revenues 41.0 39.3 41.6 45.9 80.3 87.5

FY10 perating expenses increased 28% t $51.9m rm FY09 and were up 34% rm 1H10 t 2H10, largely due t expansin within

the Mrtgage Services business t supprt new business vlumes. Expenses als included apprximately $2m in nn-recurring csts as

a result taking n a number new clients. The imprved nancial perrmance the Grup in FY10 cmpared t FY09 led t higher

variable cmpensatin expense. Cst savings achieved within prir years have been largely maintained thrugh strng expense discipline.

Funds under administration (FUA)

As detailed in the llwing table, Crprate Trust’s FUA at the end FY10 decreased 13% t $210.5 billin cmpared t the end

FY09, with declines acrss all asset classes. The largest decline was seen in the CMBS and ABS markets, which still remain largely

clsed t new issuance.

At end o1H09

$b

FY09

$b

1H10

$b

FY10

$b

CMBS and ABS

RMBS – nn-bank

RMBS – reps

RMBS – bank

52.2

71.0

29.2

70.5

42.3

62.8

76.8

59.5

31.8

57.7

81.2

51.7

30.4

55.2

74.6

50.3

Total unds under administration 222.9 241.4 222.4 210.5

During FY10, Australian RMBS market cnditins cntinued t imprve, althugh they still remained subdued relative t the issuance levels

experienced pre-GFC. The Australian Gvernment’s decisin in Nvember 2009 t extend its AoFM crnerstne investment prgramme

with an additinal $8.0b has had a psitive infuence n the market. Since the extensin the crnerstne investment prgramme, the

AoFM’s level supprt via investment in new issuance has reduced in line with increased participatin by ther end investrs.

The ther actr infuencing the revival in the securitisatin market in FY10 has been the cntractin in credit spreads, particularly r

RMBS, which is making RMBS a mre ardable surce term unding r nn-bank and reginal bank lenders. This was evident by the

upsizing a number deals, and the act that in sme cases AoFM supprt was nt required.

Run- rates acrss existing RMBS still remained relatively high during FY10 as histrically lw interest rates have allwed brrwers t

pay dwn mre principal n their mrtgages. Hwever, with the RBA increasing the vernight cash rate rm 3.0% in octber 2009 t

4.5% in May 2010, there was a slwdwn in run- rates in 2H10.

Mortgage Services

our Mrtgage Services business cnsists tw primary service erings: Perpetual Lenders Mrtgage Services (PLMS) and lan

servicing. Revenue rm Mrtgage Services has increased rm $10.8m and $13.7m in 2H09 and 1H10 respectively t $18.2m in 2H10,driven by the grwth in business vlumes within PLMS. This strng grwth is evidenced by 2H10 vlumes exceeding FY09 vlumes, as

shwn in the table belw.

Number o matters 1H09 2H09 1H10 2H10 FY09 FY10

PLMS vlumes 45,176 50,511 81,329 117,928 95,687 199,257

PLMS has cntinued t cus its grwth strategy n the banking sectr. Rapid peratinal expansin in PLMS has been necessary t

deliver this strategy natinally, with FY10 incurring a number expenses t allw r the expansin.

PLMS revenue split by customer 1H09

%

2H09

%

1H10

%

2H10

%

FY09

%

FY10

%

Bank

Nn-bank

54

46

65

35

72

28

82

18

59

41

77

23

PLMS’ primary strategy is t cntinue t attract new clients, and deliver cst eciencies and increased EBITDA margins thrugh

ecnmies scale. Delivering n this strategy has seen the revenue mix attributable t bank clients cntinue t grw as a prprtin

ttal PLMS revenue, driven by new business. Reginal and reign banks as well as the nn-bank sectr remain imprtant client bases

r the PLMS business.



Group and Support Services

Grup and Supprt Services includes the CEo and Bard and cvers unctins that prvide supprt t the brader Grup,

including Grup Finance, Strategy, operatins, Risk, Peple and Culture, Grup Marketing, Media and Investr Relatins, and

Cmpany Secretariat.

Group and Support Services inancial summary


$m

2H09

$m

1H10

$m

2H10

$m

FY09

$m

FY10

$m

Revenues

operating expenses

3.2

(12.7)

2.9

(15.7)

5.2

(17.4)

5.1

(16.6)

6.1

(28.4)

10.3

(34.0)

EBITDA



Interest expense

(9.5)

(1.1)

1.2

(1.6)

(12.8)

(1.0)

(0.3)

(0.9)

(12.2)

(1.2)

(0.6)

(1.2)

(11.5)

(1.2)

0.2

(1.6)

(22.3)

(2.1)

0.9

(2.5)

(23.7)

(2.4)

(0.4)

(2.8)

Proit/(loss) beore tax (11.0) (15.0) (15.2) (14.1) (26.0) (29.3)

Revenue rm the Grup’s cash and principal investments increased in FY10 cmpared t FY09, predminantly due t the

tightening credit spreads within the Grup’s cash enhanced credit investments and additinal interest revenue assciated withrising shrt-term rates and increased cash balances.

Expenses increased in FY10 against FY09, primarily due t the current perid accruing a higher level variable cmpensatin

payments r sta in respnse t the imprved nancial perrmance in FY10. The FY10 expense base als includes an increase in csts

t supprt business develpment in Private Wealth and Crprate Trust and the cst assciated with the brand marketing campaign

undertaken in FY10.

Total Group expenses Ttal Grup expenses increased by 15% t $318.6m in FY10 cmpared t FY09.

The increase was led by investment in new business initiatives and acquisitins. The Grup has made several acquisitins in FY09 and

FY10, namely smartsuper, Financial Pursuit, Grsvenr Financial Services and Frdham Business Assciates. These have increased

the FY10 cst base as well as perating revenues. Business develpment within Crprate Trust, via its PLMS business, increased inrespnse t higher demand r its mrtgage services. Private Wealth als increased the number client acing sta and investment

specialists in additin t its acquisitins.

Movement in Group expenses


$m

2H09

$m

1H10

$m

2H10

$m

FY09

$m

FY10

$m

Emplyment

occupancy

Administratin & general

other intangibles

(87.3)

(8.5)

(36.0)

(0.7)

(95.5)

(8.5)

(39.5)

(0.9)

(100.0)

(8.2)

(36.7)

(1.2)

(122.2)

(10.5)

(37.7)

(2.1)

(182.8)

(17.0)

(75.5)

(1.6)

(222.2)

(18.7)

(74.4)

(3.3)

Total expenses (132.5) (144.4) (146.1) (172.5) (276.9) (318.6)

The key drivers this increase in Grup expenses in FY10 are set ut in the llwing table.

$m

FY09 expenses

Private Wealth acquisitins – including $2.0m acquisitin and integratin csts

Increased csts assciated with uplit in Mrtgage Services – including arund $2m ne- csts

Increase in variable remuneratin as a result imprved Grup inancial perrmance and increase in base remuneratin

Increase in rganic Private Wealth initiatives

Brand marketing

Increase in registry ees

Increase in amrtisatin ther identiiable intangibles

Increase in varius ther expenses

Net reductin in peratinal errrs

276.9

14.8

11.1

9.8

4.7

1.9

1.8

1.7

1.4

(5.5)

FY10 expenses 318.6

Increased emplyment csts in FY10 refect the grwth in emplyees resulting rm acquisitins and business initiatives, as well

as an increase in variable cmpensatin. Increases t base remuneratin were limited t apprximately 1% in FY10.



Increased ccupancy csts in FY10 refect the impact acquisitins and additinal premises required t supprt new business initiatives.

Administratin and general expenses were bradly unchanged in FY10. FY09 expenses were adversely impacted by net unit pricing

errrs ttalling $6.5m, cmpared t a net $1.0m in FY10.

Amrtisatin expense related t ther intangibles increased in FY10 as a result recently cmpleted acquisitins. This gave riset an increase in identiable intangible assets carried n the Grup’s balance sheet that are subject t amrtisatin.

Tax expense

Perpetual’s average tax rate in FY10 was 32.4% (FY09: 33.1%), calculated rm UPBT. The average tax rate is higher than the Australian

crprate tax rate 30%, mainly due t the nn-deductibility the amrtisatin expense acquired intangible assets in the Australian

peratins and the impact lsses rm verseas peratins nt being recgnised as deerred tax assets.

Signiicant Items

The Grup separately disclses items that were material t the nancial perrmance the Grup, but are cnsidered t be either

nn-recurring r nt part the perating result as a signicant item. Signicant items are excluded rm UPAT.


Proit/(Loss) Beore Tax

1H09

$m

2H09

$m

1H10

$m

2H10

$m

FY09

$m

FY10

$m

Signiicant items:

1. EMCF gains/(lsses)

2. Gain/(lss) n sale/impairment investments

3. Restructuring csts

(21.3)

(5.9)

(12.0)

1.6

(1.8)

0.4

15.8

2.5

-

13.2

(6.0)

-

(19.7)

(7.7)

(11.6)

29.0

(3.5)

-

Total signiicant items (39.2) 0.2 18.3 7.2 (39.0) 25.5


Proit/(Loss) Ater Tax

1H09

$m

2H09

$m

1H10

$m

2H10

$m

FY09

$m

FY10

$m

Signiicant items:

1. EMCF gains/(lsses)

2. Gain/(lss) n sale/impairment investments

3. Restructuring csts

(14.9)

(4.1)

(8.4)

1.1

(2.0)

0.3

11.1

1.7

-

9.2

(4.3)

-

(13.8)

(6.1)

(8.1)

20.3

(2.6)

-

Total signiicant items (27.4) (0.6) 12.8 4.9 (28.0) 17.7

1. Perpetual Exact Market Cash Funds (EMCF)

The EMCF prducts are investment unds managed by the Grup that invest in a diversied prtli cash and credit securities,

ering investrs a guaranteed return linked t the UBS Bank Bill Index. The Grup delivers the guaranteed return t investrs via a

swap agreement.

For the 6 months ended1H09

$m

2H09

$m

1H10

$m

2H10

$m

FY09

$m

FY10

$m

EMCF1 impact n inancial perrmance1:

▪

realised lsses ▪ hedging gains/(lsses)

▪ mark-t-market lsses versus benchmark

▪ hld t maturity gains versus benchmark

(3.0)0.1

(18.4)

-

(1.0)3.9

(9.0)

7.7

--

-

15.8

--

-

13.2

(4.0)4.0

(27.4)

7.7

--

-

29.0

Prit/(lss) bere tax

Tax beneit/(expense)

(21.3)

6.4

1.6

(0.5)

15.8

(4.7)

13.2

(4.0)

(19.7)

5.9

29.0

(8.7)

Proit/(loss) ater tax (14.9) 1.1 11.1 9.2 (13.8) 20.3

1 Under the swap agreement, ver and underperrmance against the index is cash settled n a mnthly basis between the Grup and the EMCF.

In March 2009, the Grup annunced a change t the swap agreement valuatin methdlgy between EMCF1 and Perpetual. The

underlying investments are nw valued n a hld-t-maturity basis r unit pricing purpses, which is cnsistent with the way in which

Perpetual nw manages the prtli. The underlying assets r EMCF1 were valued at their air value at the date change, which r

many assets was at a discunt t their maturity value. The discunt t maturity value will be amrtised ver the remaining term the

assets. This change in valuatin methdlgy has n impact n the investment returns t investrs in EMCF1.

As investments mature in EMCF1, prceeds are currently being reinvested in bank bills r cash, in line with the Grup’s decisin

t reduce risk n its balance sheet. As assets in the prtli mature, the unrealised mark-t-market lsses recrded in prir years are

being recvered. The reductin in assets in EMCF1 has been partially set by the increase in assets in EMCF2.



The majrity the unrealised mark-t-market lsses rm prir perids in the EMCF1 prtli are expected t be recvered as the

prtli matures, particularly in the remainder calendar 2010 and 2011, as the average maturity the prtli is arund 1.7 years.

The recvery rate is expected t decline ver time based n the maturity prle.

EMCF liabilities at end o1H09

$m

FY09

$m

1H10

$m

FY10

$m

EMCF1

EMCF2

1,753.9

338.0

1,089.3

409.0

808.4

472.8

695.1

495.2

Total EMCF liabilities 2,091.9 1,498.3 1,281.2 1,190.3

Ttal unds invested in the EMCF prducts have reduced ver the last 12 mnths by arund 26% and by 43% ver the last 18 mnths.

Since the end 1H09, the EMCF1 has reduced by ver 60%, whilst the EMCF2 has experienced grwth arund 47%.

At the end FY10, the carrying value EMCF1 assets was $693.2m (cmpared t $1,086.0m at the end FY09) and was a decit t

the air value its liabilities by $1.9m, cmpared t a decit $3.3m at the end FY09.

EMCF2 was established in July 2008. It has a similar structure t EMCF1 but, in additin, there are specic rules that gvern the

withdrawal unds. EMCF2 assets are held n a hld-t-maturity basis r unit pricing purpses. There has been n change since

its inceptin. At the end FY10, the carrying value EMCF2 assets was $497.8m (cmpared t $409.8m at the end FY09), which

exceeded their liabilities by $2.6m, cmpared t an excess $0.8m at the end FY09. The nancial perrmance EMCF2 is reprted

in the cash and xed interest asset class in Perpetual Investments.

2. Gain/(loss) on sale/impairment o investments


$m

2H09

$m

1H10

$m

2H10

$m

FY09

$m

FY10

$m

Prit/(lss) n sale part investment prtli/seed unds

Impairment available r sale securities

(5.2)

(0.7)

(1.4)

(0.4)

2.8

(0.3)

0.8

(6.8)

(6.6)

(1.1)

3.6

(7.1)

Ttal prit/(lss) bere tax n sale/impairment investments

Incme tax beneit/(expense)

(5.9)

1.8

(1.8)

(0.2)

2.5

(0.8)

(6.0)

1.7

(7.7)

1.6

(3.5)

0.9

Total proit/(loss) ater tax on sale/impairment o investments (4.1) (2.0) 1.7 (4.3) (6.1) (2.6)

Lss n sale/impairment investments in FY10 was $2.6mater tax, cmparing avurably t a $6.1m lss in FY09. In FY10,

certain assets classied as available r sale became impaired.

This resulted in a cumulative lss $7.1m bere tax, previusly

recgnised in the available r sale reserve t be transerred t

the prt and lss statement, set by a credit t the available r

sale reserve. These lsses primarily related t seed investments

rm discntinued businesses. Sme these assets have been

subsequently dispsed pst 30 June 2010 at a price equal t

the FY10 mark-t-market valuatin.

3. Restructuring costs

N restructuring csts were incurred in FY10.

In FY09, the Grup respnded t alling revenues and declining

prtability by reducing its largely xed cst base. In FY09,

csts ttalling $8.1m ater tax t implement the restructure were

disclsed as a signicant item utside UPAT.

Capital management

The Grup manages its capital and liquidity t sustain a strng

and fexible balance sheet. We have adpted this cnservative

and prudent plicy t ensure we:

▪ can eciently supprt all ur businesses

▪ can hld capital t prvide r uncertainty and peratinal risk

that resides within ur businesses

▪ can maintain adequate liquidity t ensure nancial fexibility,

such as nt being reliant and restricted by capital supplied by

debt nanciers

▪ have sucient capital resurces t take advantage inrganicgrwth pprtunities as they arise.

The Grup uses a risk-based capital mdel based n the Basel II

ramewrk t assess its capital requirements. The mdel requires

capital t be set aside r peratinal, credit and market risk

and any knwn capital cmmitments. The amunt ecnmic

capital assessed by the mdel exceeds the Grup’s $62.6m

regulatry capital needs by mre than tw times. At the

end FY10, ttal ecnmic capita l requirements were $141m,

cmpared t $212m available liquid unds.

The Grup maintains a cnservative balance sheet, which

has cntinued t be de-risked llwing the dicult tradingenvirnment experienced in prir perids. During FY10, the

Grup has cntinued t execute a number strategies t

strengthen its balance sheet, including:

▪ Finalisatin the transitin t a plicy paying dividends

within a range 80-100% NPAT n an annualised basis,

with a gal t maximise ully ranked dividends. This plicy

ensures that dividends d nt exceed current year earnings.

The FY10 dividend payut rati was 99.8%.

▪ Initiatin a new DRP, cmmencing with the payment

the nal dividend FY09 in 1H10, and satisying the DRP

demand arund 13% the ttal dividend thrugh the issue

new shares.

▪ Satisying the DRP demand r the FY10 interim dividend by

issuing new shares t participants.



▪ Increase the cmmitted debt acility rm ur lng-term

banking partner rm $45.0m t $70.0m in July 2009. The

additinal $25.0m remains undrawn as at 24 August 2010.

▪ Cntinued imprvement the verall credit quality and

liquidity the Grup’s risk assets and cntinued reductin expsure t structured prducts n the balance sheet.

▪ Fcus n ensuring strng discretinary expense discipline

acrss each business unit and supprt grup.

Interest rate risk

Perpetual’s balance sheet is subject t interest rate risk.

The Grup generates psitive cash fws rm peratins rm

a relatively light capital structure. Cash balances are held in high

quality credit and highly liquid investment unds managed by the

Grup. These investments generally invest in shrt-term assets

and earn a variable interest rate.

Perpetual has bth crprate and peratinal debt acilities.

The crprate acility has a variable interest rate. As at 24 August

2010, there are n interest rate hedges against the drawn prtin

($45.0m) this acility.

operatinal debt acilities are used t nance custmers int

capital prtected investment prducts. The acilities are a

cmbinatin xed and variable rate brrwings used t nance

a cmbinatin xed and variable structured prduct lans.

T minimise interest rate risk between these xed rate assets and

variable rate liabilities, management uses interest rate swaps t

bradly match xed rate assets t fating rate liabilities.

Credit risk

Credit risk is the risk deault and change in the credit quality

issuers securities, cunterparties and intermediaries t whm

the Grup has expsure.

The Grup is subject t credit risk in the llwing areas its

business:

▪ All cash and cash equivalent balances are subject t credit risk

as they represent depsits made by the Grup with external

banks and ther institutins. We primarily invest ur crprate

cash balances in cash unds managed by the Grup.

▪ The Grup is expsed t the perrmance assets held in the

EMCF prducts thrugh a swap agreement, where the Grup

pays a return based n the UBS Bank Bill Index and receives

the return n the underlying prtli, which cntains credit

and market risks.

▪ The Grup is expsed t credit risk n its lan assets t

PPI custmers. This risk is generally limited t 6% the

utstanding lan bk r Series 1 and 2, and 7% the

utstanding lan bk r Series 3 as the brrwings used t

und these lans are limited recurse in nature.

The Grup limits the number cunterparties upn which we

are willing t take credit risk. This can lead t cncentratins credit risk. We d nt expect any cunterparties t ail t

meet their bligatins beynd what has been prvided r in the

carrying value thse assets.

Equity risk

Equity risk is the risk change in value an issued equity

security t which the Grup has an expsure.

The Grup is subject t equity risk rm its investments in

managed unds. These investments ‘seed’ new investment undsr the Grup t develp a track recrd and examine the viability

the und t the investment cmmunity. I the investment und is

successul, the und is pened t third party investrs.

Market risk

The Grup’s revenue is signicantly dependent n FUM and FUA,

which are infuenced by equity market mvements. Management

calculates the expected impact n revenue, acrss all its

businesses, r each 1% mvement in the All ords. Based n the

level the All ords at the end FY10, a 1% mvement in the

market changes annualised revenue by apprximately $2.0m t

$2.5m. It is wrth nting this mvement is nt linear t the verall

value the market. This means that as the market reacheshigher r lwer levels, a 1% mvement may have a larger r

smaller eect n revenue as FUM and FUA are cmprised bth

equity market and nn-equity market-sensitive asset classes.

Operational risk

operatinal risk is the risk arising rm the daily unctining the

Grup’s businesses. operatinal risk is mitigated thrugh internal

cntrls, active management verview and regular reviews by ur

independent Risk Grup unctin.

Each business and supprt head is respnsible r identiying

risks within their businesses and ensuring they are apprpriately

managed. The Risk Grup assists the business by prviding theramewrk, tls, advice and assistance t enable the business

t eectively identiy, assess and manage risk.

The Bard Directrs versees the risk management within

the business, ensuring it is within an accepted risk tlerance

range, and that all rganic and inrganic business initiatives are

cnsistent with the Grup’s strategy and cnducted ethically,

respnsibly and with the highest degree integrity. The Bard’s

versight risk management is assisted by the Audit Risk and

Cmpliance Cmmittee (ARCC).

ARCC’s main respnsibilities are t versee Grup accunting

plicies and practices; the integrity nancial statements and

reprts; the scpe, quality and independence external auditarrangements; the mnitring the internal audit unctin; the

eectiveness risk management plicies; and the adequacy

insurance.

During FY09, the Grup identied a number peratinal errrs.

The Grup has strengthened its operatins unctins t enhance

its und accunting team and created a plicies and prcedures

team whse unctin is t review all existing peratinal

prcesses, implement cntrl and prcedural changes as

required and ensure rbust cntrls are established r new

prducts. In FY10, the Grup cntinued its review all existing

peratinal prcesses and cntrls and it identied sme urther

peratinal errrs t the value apprximately $5.5m. Hwever,

this was set by a $4.5m reductin in the FY09 errrs, leaving

net peratinal errrs in FY10 $1.0m. In additin, the review

prcess discvered sme additinal revenue items $0.8m,

which urther reduced the prt bere tax impact t a net $0.2m.

This cmpared t $12.8m ttal errrs reprted in FY09.



1 Ttal dividend paid was $25.5m; hwever, $3.3m was paid in the rm new shares issued t sharehlders wh elected t participate in the Cmpany’s DividendReinvestment Plan.

2 Ttal dividend paid was $45.4m; hwever $6.0m was paid in the rm new shares issued t sharehlders wh elected t participate in the Cmpany’s Dividend

Reinvestment Plan.

Financial strength

At end o 1H09 2H09 1H10 2H10 FY09 FY10

Ttal equity

Cash

Crprate debt

$m

$m

$m

261.0

107.7

(45.0)

290.0

146.1

(45.0)

347.5

179.0

(45.0)

361.0

187.5

(45.0)

290.0

146.1

(45.0)

361.0

187.5

(45.0)Net cash $m 62.7 101.1 134.0 142.5 101.1 142.5

Crprate debt t capital rati(crprate debt/(crprate debt + equity))1

% 14.7 13.4 11.5 11.1 13.4 11.1

Interest cverage calculatin (EBITDA/interestexpense)2 r the perid ended

times 51x 61x 63x 48x 54x 54x

Net tangible assets per share $ 3.15 3.51 4.52 3.95 3.51 3.95

1 Excludes structured prduct unding, which is peratinal debt used t und PPI lans.


At the end FY10, Perpetual’s grss crprate debt was

$45.0m. The Grup’s crprate debt t capital rati remains lw

at 11.1% and is well within its stated risk appetite limit 30%.

FY10 interest cverage at 54 times, unchanged rm FY09,was als well in excess nancial cvenant requirements.

Financial cvenants under the debt acilities include minimum

sharehlders’ unds, leverage and interest cverage ratis

and caps n peratinal debt. At the end FY10, we were in

cmpliance with all ur debt cvenants.

Crprate debt $45.0m is currently surced slely rm

dmestic banks and is presently limited t ne prvider, a

lng-term banking relatinship.

The Grup actively manages liquidity risk by preparing cash

fw recasts r uture perids, reviewing them regularly with

senir management, maintaining a cmmitted credit acility and

engaging regularly with its debt prviders.

The Grup increased its existing cmmitted bank crprate

debt acility during July 2009 t $70.0m rm $45.0m t urther

strengthen its liquidity psitin. At 24 August 2010, $25.0m

remains undrawn.

Net tangible assets per share increased rm $3.51 at the end

FY09 t $3.95 at the end FY10.

Cash low


$m

2H09

$m

1H10

$m

2H10

$m

FY09

$m

FY10

$m

Net cash rm perating activities

Net cash prvided by/(used in) investing activities

Net cash used in inancing activities

9.4

(26.3)

(58.5)

53.3

2.1

(17.0)

65.6

(9.5)

(23.3)

87.0

(38.8)

(39.6)

62.7

(24.2)

(75.5)

152.6

(48.3)

(62.9)

Net increase/(decrease) in cash and cash equivalents (75.4) 38.4 32.8 8.6 (37.0) 41.4

FY10 perating cash fws $152.6m, versus $62.7m in FY09,

represent the underlying cash fws rm the perating businesses,

including signicant items. operating cash fws increased in

FY10 in line with the verall imprvement in the Grup’s nancial

perrmance, refecting bth the imprved perating envirnment

and the recvery prir year lsses the EMCF.

Cash fws used in investing activities include seed und

investments, capital expenditure within the Grup, mainly

n stware, and the acquisitin new businesses such as

smartsuper in 1H09, Financial Pursuit in 2H09, Grsvenr

Financial Services in 1H10 and Frdham Business Advisrs in

2H10. Net cash used in investing activ ities increased by $24.1m

in FY10, primarily refecting the additinal cash resurces used t

und business acquisitins in Private Wealth.

Cash used in nancing activities principally relates t the payment

the Grup’s dividends and share transactins invlving cash.

Cash fw analysis captures the dividend in the reprting perid

in which it is paid, nt the perid in which the prt was earned,

ie the FY08 nal dividend $59.2m was paid in 1H09, the FY09

interim dividend $17.0m was paid in 2H09, the FY09 nal net

cash dividend1 $22.2m was paid in 1H10, and the FY10 net

cash interim dividend2 $39.4m was paid in 2H10. Cash used in

nancing activities declined by $12.6m t $62.9m in cmparisn

t FY09. This reductin was principally driven by a reductin in

cash dividends paid during the year in respnse t the transitin

t the revised dividend plicy and the Grup issuing new shares

t satisy demand rm DRP participants.



Summary Consolidated Balance Sheet

At end o1H091

$m

FY091

$m

1H101

$m

FY101

$m

Assets

Cash and cash equivalents

Liquid investments

Structured prducts – PPI lans t custmers

Gdwill and ther intangibles

Stware intangibles

other assets

107.7

60.5

340.6

81.3

23.2

153.2

146.1

36.7

319.7

86.2

26.5

159.4

179.0

47.6

199.4

104.4

27.4

145.1

187.5

49.9

188.8

134.9

28.6

160.8

Total assets 766.5 774.6 702.9 750.5

Liabilities

Crprate lan acility

Structured prducts – PPI inance acilities

other liabilities

45.0

330.7

129.8

45.0

318.7

120.9

45.0

202.7

107.7

45.0

189.6

154.9

Total liabilities 505.5 484.6 355.4 389.5

Net assets 261.0 290.0 347.5 361.0

Shareholder unds

Cntributed equity

Reserves

Retained earnings

168.8

24.6

64.6

174.2

43.3

72.4

199.0

49.6

97.8

206.0

56.9

96.5

Total shareholder unds

Minrity interest

258.0

3.0

289.9

0.1

346.4

1.1

359.4

1.6

Total equity 261.0 290.0 347.5 361.0

1 Nte: excludes the setting asset and liability r the EMCF structured prduct, which was $2,091.9m in 1H09. At 2H09, the EMCF asset was $1,495.8m, with theliability being $1,498.3m. At 1H10, the EMCF asset was $1,285.3m, with the liability being $1,281.2m. At 2H10, the EMCF asset was $1,191.1m, with the liabilitybeing $1,190.3m. The net liability $2.5m at FY09 has been included abve within ther liabilities and $4.1m at 1H10 and $0.7m at FY10 with ther assets.

Cash and cash equivalents cntinued t increase during FY10,

with increased cash fws rm peratins and EMCF prts

set by the acquisitins Grsvenr Financial Services andFrdham Business Advisrs.

Liquid investments increased due t the cmbinatin

the rise in equity markets and the seeding new managed

und investments.

Structured prduct lans t custmers declined in FY10 due t

lan repayments rm custmers. Mst repayments ccurred in

August 2009. This, in turn, has reduced the PPI nance acility

liability by a similar amunt.

Gdwill and ther intangibles have increased during FY10 with

the acquisitin Grsvenr Financial Services and Frdham

Business Advisrs. other intangibles are amrtised ver their

useul lie.

Net tangible assets increased rm $149.1m at the end FY09

t $171.5m at the end FY10, refecting an increase in issued

capital, ttal cmprehensive incme in excess dividends paid

and avurable mvements in reserves less increases in net

intangible assets that ccurred thrugh the year.

Management cnducted an impairment review all nn-nancial

assets at the end FY10 and determined that n impairment

charges were required.

The expected amrtisatin r FY11 and the next three nancial

years existing identiable intangible assets that have arisen in

recent acquisitins is as llws:

FY11

$m

FY12

$m

FY13

$m

FY14

$m

Amrtisatin identiiableintangibles1 3.7 3.1 2.4 2.4

1 Based n $21.3m net bk value at end FY10.

As the Grup cntinues t acquire businesses in line with its

strategic gals, the level identiable intangible assets carried

n the balance sheet is likely t increase, which in turn will

increase the amrtisatin identiable intangible assets.

Cntributed equity increased during FY10 due t shares being

issued under the DRP n the FY09 nal dividend and the FY10

interim dividend, the acquisitin Grsvenr Financial Services

and the issue shares as emplyee share plans have vested.

The minrity interest cmprises third party interests in

cnslidated unds managed by the Grup.



Appendix A: Segment results

For the period ended Operating revenue

1H09

$m

2H09

$m

1H10

$m

2H10

$m

FY09

$m

FY10

$m


Private Wealth

Crprate Trust

Grup and Supprt Services

105.4

45.0

41.0

3.2

97.6

40.7

39.3

2.9

105.9

47.4

41.6

5.2

111.0

64.2

45.9

5.1

203.0

85.7

80.3

6.1

216.9

111.6

87.5

10.3

Underlying prit bere tax and signiicant items

Incme tax expense

194.6 180.5 200.1 226.2 375.1 426.3

Underlying proit ater tax (UPAT)2 beore signiicant items

Signiicant items:

▪

EMCF gains/(lsses) ▪ Gain/(lss) n sale/impairment investments

▪ Restructuring csts

Net proit ater tax (NPAT) attributable to Perpetual Limited ordinaryequity holders


2 Underlying prt ater tax (UPAT) excludes certain items that are either signicant by virtue their size and impact n net prt ater tax, r are ‘ne-’ in nature.UPAT has been calculated in accrdance with the guidelines issued by the AICD and Finsia.



EBITDA 1 Proit beore/ater tax

1H09

$m

2H09

$m

1H10

$m

2H10

$m

FY09

$m

FY10

$m

1H09

$m

2H09

$m

1H10

$m

2H10

$m

FY09

$m

FY10

$m

49.1

19.7

21.7

(9.5)

35.8

13.8

17.9

(12.8)

51.5

16.8

19.4

(12.2)

50.9

20.9

16.2

(11.5)

84.9

33.5

39.6

(22.3)

102.4

37.7

35.6

(23.7)

35.7

17.4

20.0

(11.0)

23.3

11.7

16.1

(15.0)

36.9

14.5

17.8

(15.2)

35.2

18.1

14.5

(14.1)

59.0

29.1

36.1

(26.0)

72.1

32.6

32.3

(29.3)

81.0 54.7 75.5 76.5 135.7 152.0 62.1

(20.5)

36.1

(12.0)

54.0

(17.6)

53.7

(17.3)

98.2

(32.5)

107.7

(34.9)

41.6 24.1 36.4 36.4 65.7 72.8

(14.9)(4.1)

(8.4)

1.1(2.0)

0.3

11.11.7

-

9.2(4.3)

-

(13.8)(6.1)

(8.1)

20.3(2.6)

-

14.2 23.5 49.2 41.3 37.7 90.5



Analysis o segment results

1H10

PI

$m

PW

$m

CT

$m

Group& SS

$m

Total

$m

operating revenue

operating expenses

105.9

(54.4)

47.4

(30.6)

41.6

(22.2)

5.2

(17.4)

200.1

(124.6)

EBITDA

Depreciatin & amrtisatin

Equity remuneratin

51.5

(2.9)

(11.7)

16.8

(1.4)

(0.9)

19.4

(1.5)

(0.1)

(12.2)

(1.2)

(0.6)

75.5

(7.0)

(13.3)

EBIT

Interest expense

36.9

-

14.5

-

17.8

-

(14.0)

(1.2)

55.2

(1.2)

UPBT 36.9 14.5 17.8 (15.2) 54.0

1H09

PI

$m

PW

$m

CT

$m

Group& SS

$m

Total

$m

operating revenue

operating expenses

105.4

(56.3)

45.0

(25.3)

41.0

(19.3)

3.2

(12.7)

194.6

(113.6)

EBITDA

Depreciatin & amrtisatin

Equity remuneratin

49.1

(2.3)

(11.1)

19.7

(1.1)

(1.2)

21.7

(1.6)

(0.1)

(9.5)

(1.1)

1.2

81.0

(6.1)

(11.2)

EBIT

Interest expense

35.7

-

17.4

-

20.0

-

(9.4)

(1.6)

63.7

(1.6)

UPBT 35.7 17.4 20.0 (11.0) 62.1

PI = Perpetual Investments PW = Private Wealth CT = Corporate Trust Group & SS = Group & Support Services



2H10 FY10

PI

$m

PW

$m

CT

$m

Group& SS

$m

Total

$m

PI

$m

PW

$m

CT

$m

Group& SS

$m

Total

$m

111.0

(60.1)

64.2

(43.3)

45.9

(29.7)

5.1

(16.6)

226.2

(149.7)

216.9

(114.5)

111.6

(73.9)

87.5

(51.9)

10.3

(34.0)

426.3

(274.3)

50.9

(2.4)

(13.3)

20.9

(2.5)

(0.3)

16.2

(1.6)

(0.1)

(11.5)

(1.2)

0.2

76.5

(7.7)

(13.5)

102.4

(5.3)

(25.0)

37.7

(3.9)

(1.2)

35.6

(3.1)

(0.2)

(23.7)

(2.4)

(0.4)

152.0

(14.7)

(26.8)

35.2

-

18.1

-

14.5

-

(12.5)

(1.6)

55.3

(1.6)

72.1

-

32.6

-

32.3

-

(26.5)

(2.8)

110.5

(2.8)

35.2 18.1 14.5 (14.1) 53.7 72.1 32.6 32.3 (29.3) 107.7

2H09 FY09

PI

$m

PW

$m

CT

$m

Group& SS

$m

Total

$m

PI

$m

PW

$m

CT

$m

Group& SS

$m

Total

$m

97.6

(61.8)

40.7

(26.9)

39.3

(21.4)

2.9

(15.7)

180.5

(125.8)

203.0

(118.1)

85.7

(52.2)

80.3

(40.7)

6.1

(28.4)

375.1

(239.4)

35.8

(3.1)

(9.4)

13.8

(1.3)

(0.8)

17.9

(1.7)

(0.1)

(12.8)

(1.0)

(0.3)

54.7

(7.1)

(10.6)

84.9

(5.4)

(20.5)

33.5

(2.4)

(2.0)

39.6

(3.3)

(0.2)

(22.3)

(2.1)

0.9

135.7

(13.2)

(21.8)

23.3

-

11.7

-

16.1

-

(14.1)

(0.9)

37.0

(0.9)

59.0

-

29.1

-

36.1

-

(23.5)

(2.5)

100.7

(2.5)

23.3 11.7 16.1 (15.0) 36.1 59.0 29.1 36.1 (26.0) 98.2

Appendix B: Average FUM

Average FUM1H08

$b

2H08

$b

1H09

$b

2H09

$b

1H10

$b

2H10

$b

FY09

$b

FY10

$b

%

change

Australian equities

Glbal equities

Quantitative investments

25.4

1.7

1.4

21.0

1.4

1.4

16.9

1.2

1.2

13.8

1.1

1.0

17.8

1.3

0.9

18.7

1.3

0.4

15.3

1.2

1.1

18.3

1.3

0.6

20%

8%

-45%

Equities 28.5 23.8 19.3 15.9 20.0 20.4 17.6 20.2 15%


other

9.3

1.0

8.2

1.2

7.9

1.2

7.6

1.1

7.3

1.1

6.8

1.2

7.7

1.2

7.0

1.2

-9%

0%

Total 38.8 33.2 28.4 24.6 28.4 28.4 26.5 28.4 7%



Glossary m’ dii ai

1H08 Six mnths ended 31 December 2007 EUR Eur currency unit

1H09 Six mnths ended 31 December 2008 Finsia Financial Services Institute Australasia

1H10 Six mnths ended 31 December 2009 FTE Full time equivalent

2H08 Six mnths ended 30 June 2008 FUA Funds under advice r unds under administratin

2H09 Six mnths ended 30 June 2009 FUM Funds under management

2H10 Six mnths ended 30 June 2010 FY08 12 mnths ended 30 June 2008

ABS Asset backed securities FY09 12 mnths ended 30 June 2009

ADI Apprved depsit-taking institutin FY10 12 mnths ended 30 June 2010

AERF Australian Eligible Rllver Fund, which is a

superannuatin und that accepts member benets

rm ther superannuatin unds r peple wh may

have been lst by that und r are n lnger eligible r

membership that und

FY11 12 mnths ended 30 June 2011

AICD Australian Institute Cmpany Directrs GFC Glbal Financial Crisis

All ords S&P ASX All ordinaries Price Index Grup Perpetual Limited and its cntrlled entities (the

cnslidated entity) and the cnslidated entity’s

interests in assciates

Alpha outperrmance relative t benchmark IDPS Investr Direct Prtli Services

AoFM Australian oce Financial Management LTI Lng-term incentive

APRA Australian Prudential Regulatin Authrity m Millin

ARCC Audit Risk and Cmpliance Cmmittee MTM Mark-t-market

ASX Australian Securities Exchange NPAT Net prt ater tax

AUD Australian dllar PLMS Perpetual Lenders Mrtgage Services

b Billin PPI Perpetual Prtected Investments

bps Basis pint (0.01 1%) RBA Reserve Bank Australia

CMBS Cmmercial mr tgage backed securities RMBS Residential mr tgage backed securities

CPPI Cnstant prprtin prtli insurance RoE Return n equity

DPS Dividend(s) per share SAF Small APRA und

DRP Dividend Reinvestment Plan SMSF Sel managed superannuatin und

EBITDA Earnings bere tax, depreciatin and amrtisatin

intangible assets, equity remuneratin expense and

signicant items

TSR Ttal sharehlder return

EMCF Perpetual Exact Market Cash Fund UPAT Underlying prt ater tax

EPS Earnings per share



Financial statements o Perpetual Limited and its

controlled entities or the year ended 30 June 2010

fnancial statements

Table o contents Page no.

s cpi I ..........................................................................89

b s ............................................................................................................................... 91

s c i ei .......................................................................................92

c w s ..............................................................................................................94

n ii

Nte 1. Reprting entity ..............................................................................................................95

Nte 2. Summary signicant accunting plicies ...................................................................95

Nte 3. Revenue ........................................................................................................................ 105

Nte 4. Net prt bere tax ..................................................................................................... 105

Nte 5. Individually signicant items included in prt r the year ............................................105

Nte 6. Segment inrmatin .....................................................................................................106

Nte 7. Auditr’s remuneratin .................................................................................................. 107

Nte 8. Incme tax expense ...................................................................................................... 108

Nte 9. Deerred tax assets/(liabili ties) ....................................................................................... 109

Nte 10. Dividends .......................................................................................................................111

Nte 11. Earnings per share .........................................................................................................112

Nte 12. Cash and cash equivalents ............................................................................................112

Nte 13. Receivables ...................................................................................................................113

Nte 14. other nancial assets .....................................................................................................113

Nte 15. Interest in assciates using the equity methd ..............................................................114

Nte 16. Derivative nancial instruments .....................................................................................114

Nte 17. Prperty, plant and equipment.......................................................................................115

Nte 18. Intangibles .....................................................................................................................115

Nte 19. Prepayments ..................................................................................................................116

Nte 20. Payables .......................................................................................................................117

Nte 21. Structured prducts - incme received in advance ......................................................117

Nte 22. Nn-current interest-bearing liabilities ............................................................................117

Nte 23. Prvisins ......................................................................................................................117

Nte 24. Cntributed equity .........................................................................................................118

Nte 25. Reserves .......................................................................................................................119

Nte 26. Emplyee benets .........................................................................................................119

Nte 27. Financial arrangements ................................................................................................ 122

Nte 28. Financial risk management ........................................................................................... 122

Nte 29. Structured prducts assets and liabilities...................................................................... 128

Nte 30. Cmmitments .............................................................................................................. 130

Nte 31. Cntingencies ...............................................................................................................130

Nte 32. Related parties .............................................................................................................130

Nte 33. Cntrlled entities ........................................................................................................ 131

Nte 34. Parent entity disclsures ............................................................................................... 133

Nte 35. Ntes t the Cash Flw Statement ............................................................................... 134

Nte 36. Business cmbinatins ................................................................................................. 134

Nte 37. Subsequent events ....................................................................................................... 136

Nte 38. Remuneratin details prvided as part the nancial reprt ....................................... 138

di’ di ............................................................................................................. 144Ip i’ p

Pp lii ................................................................................................................ 145

sii i ii ..................................................... 146



Statement o Comprehensive Income or the year ended 30 June 2010

Consolidated

Note 2010 2009

$’000 $’000

Revenue rm the prvisin services 407,923 365,528

Incme rm structured prducts 83,595 107,440

Investment incme 14,422 9,570

3 505,940 482,538

Sta related expenses excluding equity remuneratin expense 4 (195,441) (168,584)

occupancy expenses (18,734) (17,019)

Administrative and general expenses (60,076) (61,423)

Distributins and expenses relating t structured prducts

(50,606) (127,169)

Earnings beore interest, tax, depreciation, amortisation, equityremuneration expense, proit/(loss) on disposal o investments,impairment o available-or-sale securities and share o proit/ (loss) o equity accounted investees 181,083 108,343

Financing csts (2,772) (2,507)

Equity remuneratin expense 4 (26,755) (25,930)

Depreciatin and amrtisatin expense 4 (14,857) (13,163)

(44,384) (41,600)

Prceeds rm sale investments 36,977 60,328

Cst investments dispsed (33,064) (67,001)

Prit/(lss) n dispsal investments 5 3,913 (6,673)

Impairment available-r-sale securities 5 (7,085) (1,065)

Share prit/(lss) equity accunted investees, net incme tax (16) 111

Net proit beore tax 133,511 59,116

Incme tax expense (43,573) (23,082)

Incme tax beneit n dispsal investments 784 1,657

Income tax expense 8 (42,789) (21,425)


(Prit)/lss ater tax attributable t nn-cntrlling interests (216) 58

Net proit ater tax attributable to equity holders o Perpetual Limited 90,506 37,749

The Statement Cmprehensive Incme is t be read in cnjunctin with the ‘Ntes t the Financial Statements’ set ut n

pages 95 t 143.



Statement o Comprehensive Income or the year ended 30 June 2010 (continued)

Consolidated

Note 2010 2009

$’000 $’000


other cmprehensive incme/(expense), net tax

Available-r-sale reserve

Reclassiicatin available-r-sale inancial assets upn impairment 5,259 1,065

Reclassiicatin previusly impaired available-r-sale inancialassets upn dispsal

(423) (2,279)

Net change in air value available-r-sale inancial assets 2,051 (7,709)

Cash lw hedge reserve

Eective prtin changes in air value cash lw hedges 301 (3,599)

Freign currency reserve

Freign exchange translatin dierences (2,856) 197

Other comprehensive income/(expense), net o income tax 4,332 (12,325)

Total comprehensive income 95,054 25,366

Ttal cmprehensive incme is attributable t:

Nn-cntrlling interests 216 (58)

Equity hlders Perpetual Limited 94,838 25,424

Total comprehensive income 95,054 25,366

Basic earnings per share attributable to ordinary equity holders– cents per share

11 227.1 96.0

Diluted earnings per share attributable to ordinary equity holders– cents per share

11 210.5 89.4

The Statement Cmprehensive Incme is t be read in cnjunctin with the ‘Ntes t the Financial Statements’ set ut n

pages 95 t 143.



Balance Sheet as at 30 June 2010

Consolidated

Note 2010 2009

$’000 $’000

Current assets

Cash and cash equivalents 12 187,539 146,138

Receivables 13 86,843 78,148

other inancial assets 14 100 100

Structured prducts – EMCF assets 29 1,191,066 1,495,790

Structured prducts – receivable rm investrs 29 26,157 108,935

Derivative inancial instruments 16 11 145

Prepayments 19 7,447 11,820

Total current assets 1,499,163 1,841,076

Non-current assets

Receivables 13 3,648 4,200

Interest in assciates using the equity methd 15 - 6,924

Shares in ther cmpanies, investments in 14 49,949 36,709

unlisted unit trusts and ther inancial assets

Structured prducts – lans receivable 29 162,675 210,716

Prperty, plant and equipment 17 27,796 27,730

Intangibles 18 163,508 112,660

Deerred tax assets 9 33,219 30,381

Prepayments 19 858 -

Total non-current assets 441,653 429,320

Total assets 1,940,816 2,270,396

Current liabilities

Payables 20 40,661 35,442

Structured prducts – EMCF liabilities 29 1,190,342 1,498,254

Structured prducts – interest-bearing liabilities 29 24,818 107,683

Structured prducts – incme received in advance 21 13,918 13,563

Derivative inancial instruments 16 662 821

Current tax liabilities 16,736 150

Emplyee beneits 26 35,880 29,296

Prvisins 23 7,670 6,796

Total current liabilities 1,330,687 1,692,005

Non-current liabilities

Payables 20 6,206 1,819

Interest-bearing liabilities 22 45,000 45,000

Structured prducts – interest-bearing liabilities 29 164,807 211,065

Deerred tax liabilities 9 7,198 2,137

Emplyee beneits 26 2,894 2,371

Prvisins 23 23,000 25,958

Total non-current liabilities 249,105 288,350

Total liabilities 1,579,792 1,980,355

Net assets 361,024 290,041

Equity

Cntributed equity 24 206,017 174,222

Reserves 25 56,861 43,298

Retained earnings 96,494 72,413

Total equity attributable to holders o Perpetual Limited 359,372 289,933

Nn-cntrlling interest 1,652 108

Total equity 361,024 290,041

The Balance Sheet is t be read in cnjunctin with the ‘Ntes t the Financial Statements’ set ut n pages 95 t 143.



Statement o Changes in Equity or the year ended 30 June 2010

Consolidated Gross contributedequity

Treasury sharereserve

Total contributedequity

Available-or-salereserve

$’000

Balance at 1 July 2009 347,350 (173,128) 174,222 (4,016)

Total comprehensive income/(expense) - - - 6,887

Issue rdinary shares 19,864 - 19,864 -

Emplyee Share Purchase Plan lan repayments during the year - 157 157 -

Treasury shares issued during the year 17,584 (17,584) - -

Treasury shares purchased n market - (1,271) (1,271) -

Treasury shares vested during the year - 13,110 13,110 -

Fair value adjustment n recycled and vested TSR shares (5,406) 5,406 - -

Dividends n treasury shares used t purchase equity - (65) (65) -

Dividends paid t sharehlders - - - -

Dividends paid n treasury shares - - - -

Equity remuneratin expense - - - -

Nn-cntrlling interest - - - -

Balance at 30 June 2010 379,392 (173,375) 206,017 2,871

Balance at 1 July 2008 324,703 (160,892) 163,811 4,907

Total comprehensive income/(expense) - - - (8,923)

optins exercised 2,347 - 2,347 -

Emplyee Share Purchase Plan lan repayments during the year - 394 394 -

Treasury shares issued during the year 26,153 (26,153) - -

Treasury shares purchased n market - (410) (410) -

Treasury shares vested during the year - 8,534 8,534 -

Fair value adjustment n recycled and vested TSR shares (5,853) 6,003 150 -

Dividends n treasury shares used t purchase equity - (604) (604) -

Dividends paid t sharehlders - - - -

Dividends paid n treasury shares - - - -

Equity remuneratin expense - - - -

Nn-cntrlling interest - - - -

Balance at 30 June 2009 347,350 (173,128) 174,222 (4,016)

The Statement Changes in Equity is t be read in cnjunctin with the ‘Ntes t the Financial Statements’ set ut n pages 95 t 143.



General reserve Foreign currencytranslation

reserve

Equitycompensation

reserve

Cash low hedgereserve

Total reser ves Ret ained earnings Total Non- controllinginterest

Total

103 (491) 48,457 (755) 43,298 72,413 289,933 108 290,041

- (2,856) - 301 4,332 90,506 94,838 216 95,054

- - - - - - 19,864 - 19,864

- - - - - - 157 - 157

- - - - - - - - -

- - - - - - (1,271) - (1,271)

- - (13,110) - (13,110) - - - -

- - - - - - - - -

- - 65 - 65 - - - -

- - - - - (70,904) (70,904) - (70,904)

- - (4,479) - (4,479) 4,479 - - -

- - 26,755 - 26,755 - 26,755 - 26,755

- - - - - - - 1,328 1,328

103 (3,347) 57,688 (454) 56,861 96,494 359,372 1,652 361,024

103 (688) 37,114 2,844 44,280 105,574 313,665 745 314,410

- 197 - (3,599) (12,325) 37,749 25,424 (58) 25,366

- - (1,250) - (1,250) - 1,097 - 1,097

- - - - - - 394 - 394

- - - - - - - - -

- - - - - - (410) - (410)

- - (8,534) - (8,534) - - - -

- - (150) - (150) - - - -

- - 604 - 604 - - - -

- - - - - (76,167) (76,167) - (76,167)

- - (5,257) - (5,257) 5,257 - - -

- - 25,930 - 25,930 - 25,930 - 25,930

- - - - - - - (579) (579)

103 (491) 48,457 (755) 43,298 72,413 289,933 108 290,041



Cash Flow Statement or the year ended 30 June 2010

Consolidated

Note 2010 2009

$’000 $’000

Cash lows rom operating activities

Cash receipts in the curse peratins 484,067 406,814

Cash payments in the curse peratins (310,896) (312,969)

Dividends received 838 1,196

Interest received 12,386 5,898

Interest paid (2,772) (2,507)

Incme taxes paid (31,070) (35,707)

Net cash rom operating activities 35 152,553 62,725

Cash lows rom investing activities

Payments r prperty, plant, equipment and stware (11,816) (14,035)

Payments r investments (38,141) (42,933)

Repayments advances made under the Emplyee SharePurchase Plan

157 394

Acquisitin businesses, net cash acquired (35,449) (19,173)

Prceeds rm the sale investments 36,977 60,328

Tax paid n sale investments - (8,799)

Net cash used in investing activities (48,272) (24,218)

Cash lows rom inancing activities

Prceeds rm issue shares 9,295 1,097

Payments r n market share purchase (1,271) (410)

Dividends paid (70,904) (76,167)

Net cash used in inancing activities (62,880) (75,480)

Net increase/(decrease) in cash and cash equivalents 41,401 (36,973)

Cash and cash equivalents at 1 July 146,138 183,111

Cash and cash equivalents at 30 June 12 187,539 146,138

The Cash Flw Statement is t be read in cnjunctin with ‘Ntes t the Financial Statements’ set ut n pages 95 t 143.



Notes to and orming part o the fnancial statements or the year ended

30 June 2010

Note 1. Reporting entity

Perpetual Limited (the Cmpany) is dmiciled in Australia.

The cnslidated nancial reprt the Cmpany as at and r

the year ended 30 June 2010 cmprises the Cmpany and its

cntrlled entities (tgether reerred t as the cnslidated entity)

and the cnslidated entity’s interests in assciates.

The nancial reprt was authrised r issue by the directrs

n 24th August 2010.

The cnslidated annual reprt r the cnslidated entity

as and r the year ended 30 June 2010 is available at

www.perpetual.cm.au

Note 2. Summary o signiicant accounting

policies

a. Statement o compliance

The nancial reprt is a general purpse nancial reprt prepared

in accrdance with Australian Accunting Standards (including

Australian Interpretatins) adpted by the Australian Accunting

Standards Bard (AASB) and the Corporations Act 2001.

The nancial reprt the cnslidated entity als cmplies

with Internatinal Financial Reprting Standards and

interpretatins (IFRS) adpted by the Internatinal Accunting

Standards Bard (IASB).

b. Basis o preparation The cnslidated nancial statements have been prepared n a

histrical cst basis, except r available-r-sale nancial assets

and derivative nancial instruments which are measured at air

value. Nn-current assets are stated at the lwer carrying

amunt r air value less selling csts.

The cnslidated nancial statements are presented in Australian

dllars, which is the unctinal currency the majrity the

cnslidated entity. Functinal currency is the currency the

primary ecnmic envirnment in which the cmpany perates.

The Cmpany is a kind reerred t in ASIC Class order 98/100

dated 10 July 1998 and in accrdance with that Class order,all nancial inrmatin presented in Australian dllars has been

runded t the nearest thusand unless therwise stated.

The preparatin the nancial reprt requires management t

make judgements, estimates and assumptins that aect the

applicatin accunting plicies and the reprted amunts

assets, liabilities, incme and expenses. Actual results may dier

rm these estimates. Estimates and underlying assumptins are

reviewed n an nging basis. Revisins t accunting estimates

are recgnised in the perid in which the estimate is revised and

in any uture perids aected.

In particular, inrmatin abut signicant areas estimatin

uncertainty and critical judgements in applying accuntingplicies that have the mst signicant eect n the amunt

recgnised in the cnslidated nancial reprt is disclsed in:

▪ Nte 9. Deerred tax assets/(liabilities)

▪ Nte 16. Derivative nancial instruments

▪ Nte 18. Intangibles

▪ Nte 23. Prvisins

▪ Nte 26. Emplyee benets

▪ Nte 29. Structured prducts assets and liabilities

▪ Nte 31. Cntingencies

▪ Nte 36. Business cmbinatins.

Starting as 1 July 2009, the cnslidated entity has changed

its accunting plicies in the llwing areas:

▪ Accunting r business cmbinatins

▪ Determinatin and presentatin perating segments

▪ Presentatin nancial statements.

The accunting plicies set ut belw have been applied

cnsistently t all perids presented in the cnslidated

nancial statements, and have been applied cnsistently by

the cnslidated entity, except as explained in accunting

plicy ntes 2c(i), 2e(i), 2g and 2z(a), which address changes in

accunting plicies.

Certain cmparative amunts have been reclassied t cnrm

with the current year’s presentatin.

c. Basis o consolidation

(i) Business combinations

Change in accounting policy

The cnslidated entity has adpted revised AASB 3 Business

Combinations (2008) and amended AASB 127 Consolidated and

Separate Financial Statements (2008) r business cmbinatins

ccurring in the nancial year starting 1 July 2009. All business

cmbinatins ccurring n r ater 1 July 2009 are accunted r

by applying the acquisitin methd. The change in accunting

plicy is applied prspectively and had n material impact n

earnings per share.

The cnslidated entity has applied the acquisitin methd r

the business cmbinatin disclsed in nte 36.

Fr every business cmbinatin, the cnslidated entity identies

the acquirer, which is the cmbining entity that btains cntrl

the ther cmbining entities r businesses. Cntrl is the pwer

t gvern the nancial and perating plicies an entity s as

t btain benets rm its activities. In assessing cntrl, the

cnslidated entity takes int cnsideratin ptential vting rights

that currently are exercisable. The acquisitin date is the date n

which cntrl is transerred t the acquirer. Judgement is applied

in determining the acquisitin date and determining whether

cntrl is transerred rm ne party t anther.



Measuring goodwill

The cnslidated entity measures gdwill as the air value the

cnsideratin transerred including the recgnised amunt any

nn-cntrlling interest in the acquiree, less the net recgnised

amunt (generally air value) the identiable assets acquired

and liabilities assumed, all measured as the acquisitin date.

Cnsideratin transerred includes the air values the assets

transerred, liabilities incurred by the cnslidated entity t the

previus wners the acquiree, and equity interests issued by

the cnslidated entity. Cnsideratin transerred als includes

the air value any cntingent cnsideratin and share-based

payment awards the acquiree that are replaced mandatrily in

the business cmbinatin (see belw). I a business cmbinatin

results in the terminatin pre-existing relatinships between

the cnslidated entity and the acquiree, then the lwer the

terminatin amunt, as cntained in the agreement, and the value

the -market element is deducted rm the cnsideratin

transerred and recgnised in ther expenses.

Share-based payment awards

When share-based payment awards exchanged (replacement

awards) r awards held by the acquiree’s emplyees (acquiree’s

awards) relate t past services, then a part the market-based

measure the awards replaced is included in the cnsideratin

transerred. I the replacement awards require uture services,

then the dierence between the amunt included in cnsideratin

transerred and the market based measure the replacement

awards is treated as pst-cmbinatin cmpensatin cst.

Contingent liabilities

A cntingent liability the acquiree is recgnised in a

business cmbinatin nly i such a liability represents

a present bligatin and arises rm a past event, and its

air value can be measured reliably.

Non-controlling interest

The cnslidated entity measures any nn-cntrlling interest

at its prprtinate interest in the identiable net assets

the acquiree.

Transaction costs

Transactin csts that the cnslidated entity incurs in

cnnectin with a business cmbinatin, such as nder’sees, legal ees, due diligence ees, and ther pressinal and

cnsulting ees, are expensed as incurred.

(ii) Subsidiaries

Subsidiaries are entities cntrlled by the cnslidated entity.

Cntrl exists when the cnslidated entity has the pwer

t gvern the nancial and perating plicies an entity s

as t btain benets rm its activities. In assessing cntrl,

ptential vting rights presently exercisable are taken int

accunt. Financial statements subsidiaries are included in

the cnslidated nancial statements rm the date cntrl

cmmences until the date cntrl ceases.

(iii) Share plan entities

The cnslidated entity has established a number share plan

entities (SPE) in relatin t the administratin emplyee share

plans rather than r trading and investment purpses. A SPE

is cnslidated i, based n an evaluatin the substance

its relatinships within the cnslidated entity and the SPE’s

risks and rewards, the cnslidated entity cncludes that it

cntrls the SPE. SPEs cntrlled by the cnslidated entity

were established under terms that impse strict limitatins n

the decisin making pwers the SPE’s management and that

result in the cnslidated entity receiving the majrity the

benets related t the SPE peratins and net assets, being

expsed t risks incidental t the SPE’s activities and retaining

the majrity the residual r wnership risks related t the SPE

r their assets.

(iv) Associates

Assciates are thse entities in which the cnslidated entity

has signicant infuence, but nt cntrl, ver the nancial

and perating plicies. Signicant infuence is presumed t

exist when the cnslidated entity hlds between 20 and 50

per cent the vting pwer anther entity. Assciates areaccunted r using the equity methd. The cnslidated

nancial statements include the cnslidated entity’s share the

incme and expenses assciates, ater adjustments t align

the accunting plicies with thse the cnslidated entity,

rm the date signicant infuence cmmences until the date

signicant infuence ceases. When the cnslidated entity’s share

lsses exceeds its interest in an assciate, the carrying amunt

is reduced t nil and recgnitin urther lsses is discntinued

except t the extent that the cnslidated entity has incurred

legal r cnstructive bligatins t make payments n behal

an assciate.

(v) Transactions eliminated on consolidationIntra-grup balances and any unrealised incme and expenses

arising rm intra-grup transactins, are eliminated in preparing

cnslidated nancial statements. Unrealised gains arising

rm transactins with assciates are eliminated against the

investment t the extent the cnslidated entity’s interest in the

assciate. Unrealised lsses are eliminated in the same way as

unrealised gains, but nly t the extent that there is n evidence

impairment. Gains and lsses are recgnised when the

cntributed assets are cnsumed r sld by the assciates r,

i nt cnsumed r sld, when the cnslidated entity’s interest

in such entities is dispsed .

d. Foreign currency translation

(i) Foreign currency transactions and balances

Freign currency transactins are translated int the unctinal

currency using the exchange rates prevailing at the dates the

transactins. Freign exchange gains and lsses resulting rm the

settlement such transactins and rm the translatin at year

end exchange rates mnetary assets and liabilities denminated

in reign currencies are recgnised in the prt r lss.

Translatin dierences n nancial assets and liabilities carried

at air value are reprted as part their air value gain r lss.

Translatin dierences n nn-mnetary nancial assets and

liabilities such as equities held at air value thrugh prt and lss

are recgnised in prt and lss as part the air value gain rlss. Translatin dierences n nn-mnetary nancial assets

such as equities classied as available-r-sale nancial assets

are included in the available r sale reserve in equity.



(ii) Foreign operations

The results and nancial psitin subsidiaries that have a

unctinal currency dierent rm the presentatin currency are

translated int Australian dllars as llws:

▪ Assets and liabilities r each Balance Sheet presented aretranslated at the clsing rate at the date that balance sheet

▪ Incme and expenses r each Statement Cmprehensive

Incme are translated at average exchange rates (unless this is

nt a reasnable apprximatin the cumulative eect the

rates prevailing n the transactin dates, in which case incme

and expenses are translated at the dates the transactins).

Freign currency dierences are recgnised in ther

cmprehensive incme. Since 1 July 2004, the cnslidated

entity’s date transitin t AASBs, such dierences have been

recgnised in the reign currency translatin reserve (FCTR).

When a reign peratin is dispsed , in part r in ull, therelevant amunt in the FCTR is transerred t prt r lss r t

nn-cntrlling interest as part the prt r lss n dispsal.

e. Intangible assets

(i) Goodwill

Change in accounting policy

As rm 1 July 2009, the cnslidated entity has adpted

the revised AASB 3 Business Cmbinatins (2008) and the

amended AASB 127 Cnslidated and Separate Financial

Statements (2008). Revised AASB 3 and amended AASB 127

have been applied prspectively t business cmbinatins

with an acquisitin date n r ater 1 July 2009. The change inaccunting plicy had n material impact n earnings per share.

Measurement

Gdwill represents the excess acquisitin cst ver the air

value the cnslidated entity’s share the net identiable

assets the acquired subsidiary r assciate at the date

acquisitin. Gdwill n acquisitin subsidiaries is presented

with intangible assets and n acquisitin assciates is included

in investment in assciates. Gdwill is allcated t cash-

generating units and is nt amrtised, but tested r impairment

annually r mre requently i events r changes in circumstances

indicate that it might be impaired. When impaired, gdwill

is carried at cst less accumulated impairment lsses (seeaccunting plicy u).

Fr details n the initial recgnitin and measurement gdwill

related t business cmbinatins that ccurred during the

nancial year ended 30 June 2010, see nte 36.

Gains and lsses n the dispsal an entity include the carrying

amunt gdwill relating t the entity sld.

Negative gdwill arising n an acquisitin is recgnised directly

in prt r lss n the Statement Cmprehensive Incme.

(ii) Sotware

Certain internal and external csts directly incurred in acquiring

and develping stware have been capitalised and are

amrtised ver their useul lie. Develpment csts include nly

thse csts directly attributable t the develpment phase and

are nly recgnised llwing cmpletin a technical easibility

study and where the cnslidated entity has an intentin and

ability t use the asset. Csts incurred n stware maintenance

are expensed as incurred.

(iii) Other intangible assets

other intangible assets acquired by the cnslidated entity,

which have nite useul lives, are stated at cst less accumulated

amrtisatin (reer t accunting plicy e (v)) and impairment

lsses (see accunting plicy u).

(iv) Subsequent expenditure

Subsequent expenditure is capitalised nly when it increases

uture ecnmic benets embdied in the specic asset t which

it relates. All ther expenditure is expensed as incurred.

(v) Amortisation

Amrtisatin is calculated ver the cst the asset, r anther

amunt substituted r cst, less its residual value.

Amrtisatin is recgnised in prt and lss n a straight-line

basis ver the perid the benets rm the assets arise, unless

these assets are indenite lie assets. Gdwill and ther

intangible assets with an indenite useul lie are systematically

tested r impairment at each balance sheet date r mre

requently i events r changes in circumstances indicate that

they might be impaired. other intangible assets are amrtised

rm the date they are available r use.

The estimated useul lives in the current and cmparative perids

are as llws:

▪ capitalised stware csts: 2.5 - 7 years

▪ unds under management acquired: 5 years

▪ custmer cntracts and relatinships acquired: 5 - 10 years.

The useul lie Talisman, ur cre unit registry system, was

amended t 7 years rm 1 January 2010 (2009: 4 years).

This resulted in a reductin in amrtisatin $566,000 in the

nancial year.

Amrtisatin methds, useul lives and residual values are

reviewed at each nancial year-end and adjusted i apprpriate.

. Revenue and income recognition

Revenue is recgnised at air value cnsideratin received

r receivable net gds and services tax payable t the

taxatin authrity.

(i) Revenue rom the provision o services

Revenue is earned rm prvisin services t custmers

utside the cnslidated entity. Revenue is recgnised when

services are prvided.

(ii) Income rom structured products

Reer t accunting plicy (l) r details n incme rm

structured prducts.

(iii) Investment income

Interest incme is recgnised as it accrues taking int accunt

the eective yield the nancial asset.



Dividend incme is recgnised in prt r lss n the date the

entity’s right t receive payment is established which, in the case

quted securities, is the ex-dividend date.

Unit trust distributins are recgnised in prt r lss as they are

received.

(iv) Proceeds rom sale o investments

Net gains r lsses n dispsal nn-current assets are

included in prt r lss. The gain r lss arising rm dispsal

an item prperty, plant and equipment is determined as the

dierence between net dispsal prceeds, being the cash price

equivalent where payment is deerred, and the carrying amunt

the item.

Prt r lss n dispsal assets is brught t accunt at the

date an uncnditinal cntract sale is signed.

g. Segment reporting As 1 July 2009, the cnslidated entity determines and

presents perating segments based n the inrmatin that

internally is prvided t the Chie Executive ocer (CEo), wh

is the cnslidated entity’s chie perating decisin maker.

The change in accunting plicy is due t the adptin

AASB 8 Operating Segments. Previusly perating segments

were determined and presented in accrdance with AASB 114

Segment Reporting. The new accunting plicy in respect

perating segment disclsures is presented as llws.

Cmparative segment inrmatin has been re-presented in

cnrmity with the transitinal requirements AASB 8. Since

the change in accunting plicy nly impacts presentatin anddisclsure aspects, there is n impact n earnings per share.

An perating segment is a cmpnent the cnslidated

entity that engages in business activities rm which it may earn

revenues and incur expenses, including revenues and expenses

that relate t transactins with any the cnslidated entity’s

ther cmpnents. All perating segments’ perating results

are regularly reviewed by the cnslidated entity’s CEo t

make decisins abut resurces t be allcated t the segment

and assess its perrmance, and r which discrete nancial

inrmatin is available.

Segment results that are reprted t the CEo include items

directly attributable t a segment as well as thse that can be

allcated n a reasnable basis. Unallcated items cmprise

mainly crprate assets, head ce expenses, and incme tax

expenses, assets and liabilities.

h. Interest-bearing borrowings

Interest-bearing brrwings are initially recgnised at air

value net transactin csts incurred. Subsequent t initial

recgnitin, interest-bearing brrwings are stated at amrtised

cst with any dierence between initial carrying amunt and

redemptin value being recgnised in the prt r lss ver the

perid the brrwings using the eective interest methd.

Interest-bearing brrwings are remved rm the Balance Sheet

when the bligatin specied in the cntract is discharged,

cancelled r expired.

i. Income tax

Incme tax expense cmprises current and deerred tax. Incme

tax expense is recgnised in the net prt r lss except t the

extent that it relates t items recgnised directly in equity, in

which case it is recgnised in ther cmprehensive incme.

Current tax is expected tax payable n the taxable incme r

the year, using tax rates enacted r substantially enacted at

reprting date and any adjustment t tax payable in respect

previus years.

Deerred tax is recgnised in respect temprary dierences

between carrying amunts assets and liabilities r nancial

reprting purpses and amunts used r taxatin purpses.

Deerred tax is nt recgnised r the llwing temprary

dierences:

▪ the initial recgnitin gdwill

▪ the initial recgnitin assets r liabilities that aect neither

accunting nr taxable prt

▪ dierences relating t investments in subsidiaries t the extent

that they prbably will nt reverse in the reseeable uture.

Deerred tax is measured at the tax rates that are expected t be

applied t the temprary dierences when they reverse, based

n the laws that have been enacted r substantively enacted by

the reprting date.

A deerred tax asset is recgnised t the extent that it is

prbable that uture taxable prts will be available against which

temprary dierences can be utilised. Deerred tax assets are

reviewed at each balance sheet date and are reduced t the

extent that it is n lnger prbable that the related tax benet will

be realised.

Deerred tax assets and liabilities are set when there is a

legally enrceable right t set current tax assets and liabilities

and when the deerred tax balances relate t the same taxatin

authrity. Current tax assets and tax liabilities are set where

the entity has a legally enrceable right t set and intends

either t settle n a net basis, r t realise the asset and settle

the liability simultaneusly.

Additinal incme taxes that arise rm the distributin dividends are recgnised at the same time as the liability t pay

the related dividend is recgnised.

(i) Tax consolidation

The Cmpany and its whlly wned Australian resident entities

rmed a tax-cnslidated grup with eect rm 1 July 2003 and

are therere taxed as a single entity rm that date. The head

entity within the tax cnslidated grup is Perpetual Limited.

Current tax expense, deerred tax liabilities and deerred tax

assets arising rm temprary dierences the members

the tax cnslidated grup are recgnised in the separate

nancial statements the members the tax cnslidatedgrup using the ‘grup allcatin’ apprach by reerence t the

carrying amunts assets and liabilities in the separate nancial

statements each entity and the tax values applying under tax

cnslidatin.



Current tax liabilities r assets and deerred tax assets arising

rm unused tax lsses and tax credits subsidiaries are

assumed by the Cmpany in the tax-cnslidated grup and

are recgnised as amunts payable t r receivable rm ther

entities in the tax-cnslidated grup in cnjunctin with any

tax unding arrangement amunts (reer accunting plicy i (ii)). Any dierence between these amunts is recgnised by the

Cmpany as an equity cntributin r distributin.

The Cmpany recgnises deerred tax assets arising rm

unused tax lsses the tax-cnslidated grup t the

extent that it is prbable that uture taxable prts the tax-

cnslidated grup will be available against which the asset can

be utilised.

Any subsequent perid adjustments t deerred tax assets

arising rm unused tax lsses as a result revised assessments

the prbability recverability are recgnised by the head

entity nly.

(ii) Nature o tax unding arrangements and tax sharing

arrangements

The head entity, in cnjunctin with ther members the tax

cnslidated grup, has entered int a tax unding arrangement

which sets ut unding bligatins members the tax-

cnslidated grup in respect tax amunts.

The tax unding arrangements require payments t r rm the

head entity equal t the current tax liability r asset assumed by

the head entity and any tax lss deerred tax asset assumed by

the head entity, resulting in the head entity recgnising an inter-

cmpany receivable r payable equal t the tax liability r assetassumed. The inter-cmpany receivable r payable is at call.

Cntributins t und the current tax liabilities are payable as

per the tax unding arrangement and refect the timing the

head entity’s bligatin t make payments r tax liabilities t the

relevant tax authrities.

The head entity, in cnjunctin with ther members the

tax cnslidated grup, has als entered int a tax sharing

agreement. The tax sharing agreement prvides r the

determinatin the allcatin incme tax liabilities between

the entities shuld the head entity deault n its tax payment

bligatins. N amunts have been recgnised in the nancial

statements in respect this agreement as payment any

amunts under the tax sharing agreement is cnsidered remte.

j. Goods and services tax

Revenues, expenses and assets are recgnised net gds and

services tax (GST), except where GST incurred is nt recverable

rm the Australian Taxatin oce (ATo). In these circumstances

the GST is recgnised as part the cst acquisitin the

asset r as part the expense.

Receivables and payables are stated with GST included. The

net amunt GST recverable rm, r payable t, the ATo is

included as a current asset r liability in the Balance Sheet.

Cash fws are included in the Cash Flw Statements n a grss

basis. GST cmpnents cash fws arising rm investing and

nancing activities which are recverable rm, r payable t, the

ATo are classied as perating cash fws.

k. Investments

(i) Held-to-maturity investments

Investments are classied as held-t-maturity i the cnslidated

entity has the psitive intent and ability t hld t maturity. Held-

t-maturity investments are measured at amrtised cst usingthe eective interest methd, less any impairment lsses.

(ii) Available-or-sale inancial assets

The cnslidated entity’s investments in equity securities and

unlisted unit trusts are classied as available-r-sale nancial

assets. Subsequent t initial recgnitin, they are measured at

air value and changes therein, ther than impairment lsses

(see accunting plicy u), are recgnised in ther cmprehensive

incme. When an investment is derecgnised, the cumulative

gain r lss in equity is transerred t prt r lss.

The air value nancial instruments classied as available-r-

sale is their quted bid price at the reprting date.

(iii) Investments at air value through proit or loss

Investments are classied at air value thrugh prt r lss i they

are held r trading r designated as such upn initial recgnitin.

The cnslidated entity’s derivative instruments within asset

management incubatin unds are classied as held r trading

nancial assets. on initial recgnitin, attributable transactin

csts are recgnised in prt r lss when incurred.

Financial instruments designated at air value thrugh prt r

lss are measured at air value and changes recgnised in prt

r lss.

l. Structured products

Structured prducts cmprise prducts sld t investrs

where there is residual risk taken by the Cmpany. Currently,

structured prducts cmprise prducts such as the Exact

Market Cash Funds (the EMCF prduct) and Perpetual Prtected

Investments (PPI).

(i) Exact Market Cash Funds

The EMCF prduct cnsisting tw Funds (EMCF1 and EMCF2)

is cnslidated as the cnslidated entity is deemed t cntrl

the EMCF Funds since it retains the residual risks and benets

thrugh the swap agreements. The swap agreements result in

the benchmark rate return being paid t the unit hlders inthe Fund. The swap agreements are inter-cmpany transactins

between a subsidiary the Cmpany and the Funds and are

eliminated n cnslidatin.

Assets and liabilities the EMCF prduct are disclsed

separately n the ace the Balance Sheet as structured

prduct assets and structured prduct liabilities. The benchmark

return generated by the EMCF prduct and distributins

t unit hlders are shwn separately n the Statement

Cmprehensive Incme as distributins and expenses related

t structured prducts.

The nancial assets represented by the structured prductsassets balance are accunted r in accrdance with the

underlying accunting plicies the cnslidated entity.

These cnsist investments accunted r at air value as

available-r-sale nancial assets.



(ii) Perpetual Protected Investments

Lans t investrs which are held as nn-current assets at

amrtised cst n the Balance Sheet (reer t structured

prducts - lan receivables) are nn-derivative nancial assets

with xed r determinable payments that are nt quted in an

active market. Such assets are recgnised initially at air value

plus any directly attributable transactin csts. Subsequent

t initial recgnitin lans and receivables are measured at

amrtised cst using the eective interest methd, less any

impairment lsses.

Lans t investrs are subject t recurring review and

assessment r pssible impairment. Prvisins r lan lsses

are based n an incurred lss mdel, which recgnises a

prvisin where there is bjective evidence impairment at each

balance sheet date, and are calculated based n the discunted

values expected uture cash fws.

The incurred lss mdel makes specic prvisin where speciclan impairment is identied. Fr individual lans nt impaired,

assets with similar risk prles are pled and cllectively

assessed r lsses that may have been incurred but nt yet

identied. Bad debts are written in the perid in which they

are identied.

Management makes judgements whether there is any

bservable data indicating that there is a signicant decrease

in the estimated uture cash fws rm a prtli lans. This

evidence may include bservable data indicating that there has

been an adverse change in the payment status the brrwers

in a grup, r natinal r lcal ecnmic cnditins that crrelate

with deaults n assets in that grup.

m. Property, plant and equipment

(i) Recognition and measurement

Prperty, plant and equipment are measured at cst r deemed

cst less accumulated depreciatin and impairment lsses

(see accunting plicy u).

Cst includes expenditures that are directly attributable t the

acquisitin the asset. Cst sel-cnstructed assets includes

cst materials, direct labur, an apprpriate prprtin

verheads and where relevant, the initial estimate the csts

dismantling and remving the items and restring the site

n which they are lcated. Purchased stware that is integralt the unctinality the related equipment is capitalised as part

that equipment.

Where parts an item prperty, plant and equipment have

dierent useul lives, they are accunted r as separate items

prperty, plant and equipment.

Gains and lsses n dispsal an item prperty, plant

and equipment are determined by cmparing the prceeds

rm dispsal with the carrying amunt prperty, plant and

equipment. When revalued assets are sld, the amunts included

in the revaluatin reserve are transerred t retained earnings.

(ii) Subsequent costs

The cnslidated entity recgnises the cst replacing part

an item prperty, plant and equipment in the carrying

amunt that item when the cst is incurred, it is prbable

that uture ecnmic benets embdied within the item will

fw t the cnslidated entity and the cst the item can be

measured reliably. The carrying amunt the replaced part is

derecgnised. All ther csts are recgnised in prt r lss as

an expense when incurred.

(iii) Depreciation

Depreciatin is recgnised in the Statement Cmprehensive

Incme n a straight-line basis ver the estimated useul lives

each part an item prperty, plant and equipment. The

estimated useul lives r the current and cmparative perids are

as llws:

▪ plant and equipment: 4 - 10 years

▪ leasehld imprvements: 3 - 15 years.

The residual value, useul lie and depreciatin methd applied t

an asset are reassessed at least annually.

n. Loans and receivables

Lans and receivables are nancial assets with xed r

determinable payments that are nt quted in an active market.

Such assets are recgnised initially at air value plus any directly

attributable transactin csts.

Subsequent t initial recgnitin lans and receivables are

measured at amrtised cst using the eective interest methd

less impairment lsses (see accunting plicy u).

Lans and receivables cmprise trade and ther receivables.

Reer t accunting plicy l (ii) r structured-prducts lan

receivables.

o. Expenses

(i) Operating leases

operating lease payments are recgnised as an expense in

prt r lss n a straight-line basis ver the term the lease.

Incentives received by the cnslidated entity n entering a lease

agreement are recgnised n a straight-line basis ver the term

the lease.

The dierence between the cash amunt paid and the amunt

recgnised as an expense is recgnised as a lease prvisin in

the Balance Sheet (see accunting plicy q). The prvisin isexpected t be realised ver the term the underlying leases.

(ii) Financing costs

Financing csts cmprise interest payments n brrwings and

derivative nancial instruments calculated using the eective

interest methd, and unwinding discunts n prvisins.

p. Payables

Payables are nn-interest bearing and are stated at amrtised

cst, with the exceptin cntingent cnsideratin which is

recrded at air value at the acquisitin date.

Cntingent cnsideratin is classied as a nancial liability and issubsequently remeasured t air value with changes in air value

recgnised in prt r lss.



q. Provisions

A prvisin is recgnised in the Balance Sheet when the

cnslidated entity has a present legal r cnstructive bligatin

as a result a past event that can be measured reliably and it is

prbable that an utfw ecnmic benets will be required t

settle the bligatin.

Management exercise judgement in estimating prvisin

amunts. It may be pssible, based n existing knwledge, that

utcmes in the next annual reprting perid dier rm amunts

prvided and may require adjustment t the carrying amunt

the liability aected.

Prvisins are determined by discunting the expected

uture cash fws at a pre-tax rate that refects current market

assessments the time value mney and, where apprpriate,

the risks specic t the liability. The unwinding the discunt is

recgnised as a nance cst.

(i) Onerous leases and make good

A prvisin r nerus leases is recgnised when the expected

benets t be derived by the cnslidated entity rm a lease

cntract are lwer than the unavidable cst meeting its

bligatins under the cntract. The prvisin is measured at the

present value the lwer the expected cst terminating

the cntract and the expected net cst cntinuing with the

cntract. Bere a prvisin is established, the cnslidated

entity recgnises any impairment lss n the assets assciated

with that cntract. A prvisin r make gd is recgnised

when the cnslidated entity is respnsible r the make gd

leased premises n terminatin perating leases.

ii) Operational process review

A prvisin r peratinal prcess reviews is recgnised when

peratinal errrs in relatin t unit pricing are identied and

represents the cst that the cnslidated entity expects t incur

in recticatin and restitutin csts.

(iii) Sel-insurance

Prvisin r sel-insurance recgnises incurred but nt reprted

claims. These prvisins are measured at the cst that the

cnslidated entity expects t incur in settling the claim,

discunted using a gvernment bnd rate with a maturity date

apprximating the term the bligatin.

(iv) Legal provision

A prvisin r litigatin is recgnised when reprted litigatin

claims arise and are measured at the cst that the cnslidated

entity expects t incur in settling the claim.

(v) Lease expense

A prvisin r lease expense represents the dierence between

the cash amunt paid and the amunt recgnised as an

expense. The prvisin is expected t be realised ver the term

the underlying lease.

(vi) Employee beneitsReer t accunting plicy (x) r details n emplyee benets

prvisins.

r. Financial guarantee contracts

Financial guarantee cntracts are recgnised as a nancial

liability at the time the guarantee is issued. The liability is initially

measured at air value and subsequently at the higher the

amunt determined in accrdance with AASB 137 Provisions,

Contingent Liabilities and Contingent Assets and the amunt

initially recgnised less cumulative amrtisatin, where

apprpriate.

Where guarantees in relatin t lans r ther payables

subsidiaries are prvided r n cmpensatin, the air values are

accunted r as cntributins and recgnised as part the cst

the investment.

s. Share capital

(i) Ordinary shares

ordinary shares are classied as equity. Incremental csts

directly attributable t the issue rdinary shares are recgnisedas a deductin rm equity, net any tax eects.

(ii) Repurchase o share capital (treasury shares)

When share capital recgnised as equity is repurchased r held

by emplyee share plans and subject t vesting cnditins, the

amunt the cnsideratin paid, including directly attributable

csts, is recgnised as a deductin rm equity. When treasury

shares are sld r reissued subsequently, the amunt received

is recgnised as an increase in equity.

(iii) Dividends

Dividends are recgnised as a liability in the perid in which they

are declared.

t. Cash and cash equivalents

Cash and cash equivalents cmprise bank balances, depsits

at call and shrt-term depsits.

u. Impairment

(i) Financial assets (including receivables)

A nancial asset is assessed at each reprting date t determine

whether there is any bjective evidence impairment. A nancial

asset is cnsidered t be impaired i bjective evidence indicates

that ne r mre events have had a negative eect n the

estimated uture cash fws that asset.

objective evidence that nancial assets (including equity

securities) are impaired can include deault r delinquency by

a debtr, restructuring an amunt due t the cnslidated

entity n terms that the cnslidated entity wuld nt cnsider

therwise, indicatins that a debtr r issuer will enter bankruptcy

and the disappearance an active market r a security. In

additin, r an investment in an equity security, a signicant r

prlnged decline in air value belw its cst is bjective evidence

impairment.

The cnslidated entity cnsiders evidence impairment r

receivables and held-t-maturity investment securities at bth

a specic asset and cllective level. All individually signicant

receivables and held-t-maturity investment securities are

assessed r specic impairment. All individually signicant

receivables and held-t-maturity investment securities und



nt t be specically impaired are then cllectively assessed r

any impairment that has been incurred but nt yet identied.

Receivables and held-t-maturity investment securities that

are nt individually signicant are cllectively assessed r

impairment by gruping tgether receivables and held-t-

maturity investment securities with similar risk characteristics.

In assessing cllective impairment the cnslidated entity uses

histrical trends the prbability deault, timing recveries

and the amunt lss incurred, adjusted r management’s

judgement as t whether current ecnmic and credit cnditins

are such that the actual lsses are likely t be greater r less than

suggested by histrical trends.

An impairment lss in respect a nancial asset measured

at amrtised cst is calculated as the dierence between its

carrying amunt and the present value the estimated uture

cash fws discunted at the asset’s riginal eective interest

rate. Lsses are recgnised in prt and lss and refected in anallwance accunt against receivables. Interest n the impaired

asset cntinues t be recgnised thrugh the unwinding

the discunt. When a subsequent event causes the amunt

impairment lss t decrease, the decrease in impairment lss is

reversed thrugh prt r lss.

Impairment lsses n available-r-sale investment securities

are recgnised by transerring the cumulative lss that has been

recgnised in ther cmprehensive incme, and presented

in the available-r-sale reserve in equity, t prt r lss. The

cumulative lss that is remved rm ther cmprehensive

incme and recgnised in prt r lss is the dierence

between the acquisitin cst, net any principal repayment andamrtisatin, and the current air value, less any impairment lss

previusly recgnised in prt r lss.

I, in a subsequent perid, the air value an impaired available-

r-sale debt security increases and the increase can be related

bjectively t an event ccurring ater the impairment lss

was recgnised in prt r lss, then the impairment lss is

reversed, with the amunt the reversal recgnised in prt r

lss. Hwever, any subsequent recvery in the air value an

impaired available-r-sale equity security is recgnised in ther

cmprehensive incme.

(ii) Non-inancial assets

The carrying amunts the cnslidated entity’s nn-nancial

assets, ther than deerred tax assets (see accunting plicy

i), are reviewed at each reprting date t determine whether

there is any indicatin impairment. I any such indicatin

exists, the asset’s recverable amunt is estimated. Fr gdwill

and intangible assets that have indenite lives r that are nt

yet available r use, recverable amunt is estimated at each

balance sheet date.

The recverable amunt an asset r cash-generating unit is

the greater its value in use and its air value less csts t sell.

In assessing value in use, the estimated uture cash fws are

discunted t their present value using a pre-tax discunt rate

that refects current market assessments the time value

mney and the risks specic t the asset. Fr the purpse

impairment testing, assets that cannt be tested individually are

gruped tgether int the smallest grup assets that generates

cash infws rm cntinuing use that are largely independent

the cash infws ther assets r grups assets (the ‘cash-

generating unit’ r CGU). Subject t an perating segment ceiling

test, r the purpses gdwill impairment testing, CGUs t

which gdwill has been allcated are aggregated s that the

level at which impairment is tested refects the lwest level atwhich gdwill is mnitred r internal reprting purpses.

The cnslidated entity’s crprate assets d nt generate

separate cash infws. I there is an indicatin that a crprate

asset may be impaired, then the recverable amunt is

determined r the CGU t which the crprate asset belngs.

An impairment lss is recgnised i the carrying amunt

an asset r its cash-generating unit exceeds its recverable

amunt. Impairment lsses are recgnised in the Statement

Cmprehensive Incme. Impairment lsses recgnised in

respect cash-generating units are allcated rst t reduce the

carrying amunt any gdwill allcated t the units and then,t reduce the carrying amunt the ther assets in the unit n a

pr rata basis.

An impairment lss in respect gdwill is nt reversed.

In respect ther assets, impairment lsses recgnised in

prir perids are assessed at each balance sheet date r any

indicatins that the lss has decreased r n lnger exists.

An impairment lss is reversed i there has been a change in

the estimates used t determine the recverable amunt. An

impairment lss is reversed nly t the extent that the asset’s

carrying amunt des nt exceed the carrying amunt that

wuld have been determined, net depreciatin r amrtisatin,

i n impairment lss had been recgnised.

v. Derecognition o inancial assets and liabilities

The cnslidated entity initially recgnises lans and receivables

and depsits n the date that they are riginated. All ther

nancial assets (including assets designated at air value thrugh

prt r lss) are recgnised initially n the trade date at which

the cnslidated entity becmes a party t the cntractual

prvisins the instrument.

The cnslidated entity derecgnises a nancial asset when the

cntractual rights t the cash fws rm the asset expire, r it

transers the rights t receive the cntractual cash fws n the

nancial asset in a transactin in which substantially all the risks

and rewards wnership the nancial asset are transerred.

Any interest in transerred nancial assets that is created r

retained by the cnslidated entity is recgnised as a separate

asset r liability.

Financial liabilities (including liabilities designated at air value

thrugh prt r lss) are recgnised initially n the trade

date at which the cnslidated entity becmes a party t the

cntractual prvisins the instrument. The cnslidated entity

derecgnises a nancial liability when its cntractual bligatins

are discharged r cancelled r expire.

Financial assets and liabilities are set and the net amunt

presented in the balance sheet when, and nly when, thecnslidated entity has a legal right t set the amunts and

intends either t settle n a net basis r t realise the asset and

settle the liability simultaneusly.



w. Derivative inancial instruments

The cnslidated entity hlds derivative nancial instruments

within structured prducts and incubatin unds t hedge its

interest rate, reign exchange and market risk expsures.

on initial designatin the hedge, the cnslidated entityrmally dcuments the relatinship between the hedging

instrument and the hedged item, including the risk management

bjectives and strategy in undertaking the hedge transactin,

tgether with the methds that will be used t assess the

eectiveness the hedging relatinship. The cnslidated

entity makes an assessment, bth at the inceptin the hedge

relatinship as well as n an nging basis, whether the hedging

instruments are expected t be ‘highly eective’ in setting the

changes in the air value r cash fws the respective hedged

items during the perid r which the hedge is designated, and

whether the actual results each hedge are within a range

80-125 per cent. Fr a cash fw hedge a recast transactin,

the transactin shuld be highly prbable t ccur and shuldpresent an expsure t variatins in cash fws that culd

ultimately aect reprted net incme.

Derivatives are recgnised initially at air value. Attributable

transactin csts are recgnised in prt r lss when incurred.

Subsequent t initial recgnitin, derivatives are measured

at air value, and changes therein are accunted r as

described belw.

(i) Cash low hedges

T the extent that the hedge is eective, changes in the air

value a derivative hedging instrument designated as a cash

fw hedge are recgnised in the cash fw hedge reserve. Tthe extent that the hedge is ineective, changes in air value are

recgnised in the net prt and lss.

I the hedging instrument n lnger meets the criteria r hedge

accunting, expires r is sld, terminated r exercised, then

hedge accunting is discntinued prspectively. The cumulative

gain r lss previusly recgnised in equity remains there until

the recast transactin ccurs. When the hedged item is a nn-

nancial asset, the amunt recgnised in equity is transerred t

the carrying amunt the asset when it is recgnised. In ther

cases the amunt recgnised in equity is transerred t the net

prt r lss in the same perid that the hedged item aects

prt and lss.

(ii) Other derivatives

When a derivative nancial instrument is nt designated in a

qualiying hedge relatinship, any changes in air value are

recrded in prt and lss.

x. Employee beneits

(i) Deined contribution superannuation unds

A dened cntributin plan is a pst-emplyment benet plan

under which an entity pays xed cntributins int a separate

entity and will have n legal r cnstructive bligatin t pay

urther amunts. obligatins r cntributins t denedcntributin pensin plans are recgnised as an expense in the

perids during which services are rendered by emplyees.

(ii) Long service leave

The liability r lng service leave is recgnised in the prvisin

r emplyee benets and measured as the present value

expected uture payments t be made in respect services

prvided by emplyees up t the reprting date using the

prjected unit credit methd. Cnsideratin is given t expected

uture wage and salary levels, experience emplyee departures

and perids service. Expected uture payments are discunted

using market yields at the reprting date n natinal gvernment

bnds with terms t maturity and currency that match, as clsely

as pssible, the estimated uture cash utfws.

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

non-monetary beneits

Liabilities r emplyee benets r wages, salaries and annual

leave expected t be settled within 12 mnths the reprting

date represent present bligatins resulting rm emplyees’

services prvided t reprting date. These liabilities arecalculated at undiscunted amunts based n wage and salary

rates that the cnslidated entity expects t pay as at reprting

date including related n-csts, such as wrkers cmpensatin

insurance and payrll tax.

Nn-accumulating benets, such as sick leave, are nt prvided

r but are expensed as the benets are taken by the emplyees.

Nn-accumulating nn-mnetary benets, such as medical care,

husing, cars and ree r subsidised gds and services are

expensed based n the net marginal cst t the cnslidated

entity as the benets are taken by the emplyees.

A prvisin is recgnised r the amunt expected t be paidunder shrt-term bnus r prt-sharing plans i the cnslidated

entity has a present legal r cnstructive bligatin t pay this

amunt as a result past service prvided by the emplyee.

y. Share-based payment transactions

(i) Employee share purchase and option plans

Share ptin and share incentive prgrams allw emplyees t

acquire shares in the Cmpany. The air value shares and/

r ptins granted under these prgrams is recgnised as an

emplyee expense with a crrespnding increase in equity. Fair

value is measured at grant date and amrtised ver the perid

during which emplyees becme uncnditinally entitled t the

shares and/r ptins.

The air value the ptins granted is measured using a binmial

mdel, taking int accunt the terms and cnditins upn which

the ptins were granted. The amunt recgnised as an expense

is adjusted t refect the actual number share ptins that vest

except where reiture is due t share prices nt achieving their

threshld r vesting.

(ii) Deerred sta incentives

The Cmpany grants certain emplyees shares under lng-term

incentive and retentin plans. Under these plans, shares vest t

emplyees ver relevant vesting perids. T satisy the lng-term

incentives granted, the Cmpany purchases r issues shares

under the Executive Share Plan, Deerred Share Plan r the

Glbal Emplyees Share Trust.



The air value the shares granted is measured by the share

price adjusted r the terms and cnditins upn which the

shares were granted. This air value is amrtised n a straight-line

basis ver the applicable vesting perid.

The cnslidated entity make estimates n the number sharesthat are expected t vest. Where apprpriate, revised estimates

are refected in prt r lss with the crrespnding adjustment

t the equity cmpensatin reserve. Where shares cntaining a

market linked hurdle d nt vest, due t ttal sharehlder return

nt achieving the threshld r vesting, an adjustment is made t

cntributed equity and equity cmpensatin reserve.

z. Earnings per share

The cnslidated entity presents basic and diluted earnings

per share (EPS) data r its rdinary shares. Basic EPS is

calculated by dividing the net prt r lss attributable t rdinary

sharehlders the Cmpany by the weighted average number

rdinary shares utstanding during the perid, adjusted rshares held by the Cmpany’s emplyee share plan trust. Diluted

EPS is determined by dividing the net prt r lss attributable

t rdinary sharehlders by the weighted average number

rdinary shares utstanding, adjusted r shares held by

Cmpany’s spnsred emplyee share plan trust and r the

eects all dilutive ptential rdinary shares, which cmprise

shares and ptins granted t emplyees under lng-term

incentive and retentin plans.

z(a). Presentation o inancial statements

The cnslidated entity applies revised AASB 101 Presentation

of Financial Statements (2007), which became eective as

1 July 2009. As a result, the cnslidated entity presents in the

cnslidated statement changes in equity all wner changes

in equity, whereas all nn-wner changes in equity are presented

in the cnslidated statement cmprehensive incme.

Cmparative inrmatin has been re-presented s that it als

is in cnrmity with the revised standard. Since the change

in accunting plicy nly impacts presentatin aspects, there

is n impact n earnings per share.

z(b). New standards and interpretations not yet

adopted

The llwing standards, amendments t standards and

interpretatins have been identied as thse which may impactthe cnslidated entity in the perid initial applicatin. They are

available r early adptin at 30 June 2010, but have nt been

applied in preparing this nancial reprt:

▪ AASB 9 Financial Instruments includes requirements r the

classicatin and measurement nancial assets resulting

rm the rst part Phase 1 the prject t replace AASB

139 Financial Instruments: Recgnitin and Measurement.

AASB 9 will becme mandatry r the cnslidated entity’s

30 June 2014 nancial statements. Retrspective applicatin is

generally required, althugh there are exceptins, particularly i

the cnslidated entity adpts the standard r the year ended

30 June 2012 r earlier. The cnslidated entity has nt yetdetermined the ptential eect the standard.

▪ AASB 124 Related Party Disclosures (revised December 2009)

simplies and claries the intended meaning the denitin

a related party and prvides a partial exemptin rm the

disclsure requirements r gvernment – related entities.

The amendments, which will becme mandatry r the

cnslidated entity’s 30 June 2012 nancial statements, arent expected t have any impact n the nancial statements.

▪ AASB 2009-5 Further amendments to Australian Accounting

Standards arising from the Annual Improvements Process

that aect varius AASBs resulting in minr changes r

presentatin, disclsure, recgnitin and measurement

purpses. The amendments, which becme mandatry r the

cnslidated entity’s 30 June 2011 nancial statements, are

nt expected t have a signicant impact n the cnslidated

entity’s nancial statements.

▪ AASB 2009-8 Amendments to Australian Accounting

Standards - Group Cash-Settled Share-based PaymentTransactions reslves diversity in practice regarding the

attributin cash-settled share-based payments between

dierent entities within a grup. As a result the amendments

AI 8 Scope of AASB 2 and AI 11 AASB 2 – Group and Treasury

Share Transactions will be withdrawn rm the applicatin

date. The amendments, which becme mandatry r the

cnslidated entity’s 30 June 2011 nancial statements, are

nt expected t have a signicant impact n the cnslidated

entity’s nancial statements.



Note 3. Revenue

Consolidated2010 2009

$’000 $’000

Revenue rom the provision o services

Grss revenue rm ees and cmmissins 407,923 365,528

Total revenue rom the provision o services 407,923 365,528

Other income

Incme rm structured prducts 83,595 107,440

Total other income 83,595 107,440

Investment income

Dividends 901 1,075

Interest 13,213 5,741

Unit trust distributins 308 2,754

Total investment income 14,422 9,570

505,940 482,538

Note 4. Net proit beore tax

Net prit bere tax has been arrived at ater charging/(crediting) the llwing items:

Depreciatin prperty, plant and equipment:

– Leasehld imprvements 2,750 2,500

– Plant and equipment 2,996 2,345

5,746 4,845

Amrtisatin intangible assets:

– Capitalised stware 5,783 6,718

– other intangible assets 3,328 1,600

9,111 8,318

Depreciatin and amrtisatin expense 14,857 13,163

Rental charges – perating leases 14,729 13,558

Net lss n sale prperty, plant and equipment 78 470Net mvements in prvisin r:

– Emplyee beneits 7,107 (7,580)

– Bad and dubtul debts 251 182

– Credit lsses n structured prducts 1,644 991

Net reign exchange gain 2,421 1,731

Ttal sta related expenses:

– Sta related expenses 195,441 168,584

– Equity remuneratin expense 26,755 25,930

222,196 194,514

Note 5. Individually signiicant items included in proit

or the year

Lss n dispsal and impairment investments:

– Prit/(lss) n sale part investment prtli 3,913 (6,673)

– Impairment available-r-sale securities (7,085) (1,065)

Ttal lss n dispsal investments (3,172) (7,738)

Incme tax beneit applicable 784 1,657

Ttal lss n dispsal and impairment investments ater tax (2,388) (6,081)

Exact Market Cash Fund prit/(lss) 29,024 (19,729)

Incme tax (expense)/beneit applicable (8,707) 5,919

20,317 (13,810)

Restructuring csts - (11,593)

Incme tax beneit applicable - 3,478

- (8,115)



Note 6. Segment inormation

Perpetual Investments1 Private Wealth Corporate Trust Total

$’000 $’000 $’000 $’000

30 June 2010

External revenues 284,603 122,807 85,628 493,038Inter-segment revenue/(expense) 11,240 (11,240) - -

Interest revenue 759 6 1,840 2,605

Ttal revenue r reprtable segment 296,602 111,573 87,468 495,643

Depreciatin and amrtisatin (5,471) (3,944) (3,064) (12,479)

Reprtable segment net prit bere tax 101,027 32,581 32,349 165,957

Reprtable segment assets 1,472,485 128,990 48,989 1,650,464

Reprtable segment liabilities (1,422,994) (25,134) (5,380) (1,453,508)

Capital expenditure 1,006 3,702 766 5,474

30 June 2009

External revenues 299,605 95,808 79,911 475,324

Inter-segment revenue/(expense) 10,062 (10,062) - -

Interest revenue 758 - 354 1,112

Ttal revenue r reprtable segment 310,425 85,746 80,265 476,436

Depreciatin and amrtisatin (5,340) (2,376) (3,262) (10,978)

Reprtable segment net prit bere tax 39,314 29,136 36,084 104,534

Reprtable segment assets 1,915,684 63,079 43,553 2,022,316

Reprtable segment liabilities (1,867,083) (14,093) (7,643) (1,888,819)

Capital expenditure 7,301 4,651 588 12,540

1 Segment inrmatin r Perpetual Investments includes the Exact Market Cash Funds.

Consolidated

2010 2009

$’000 $’000

Reconciliations o reportable segment revenues, net proit beore tax, totalassets and liabilities

Revenues

Ttal revenue r reprtable segments 495,643 476,436

Grup and Supprt Services revenue 10,297 6,102

Ttal grup revenue 505,940 482,538

Net proit beore tax

Ttal net prit bere tax r reprtable segments 165,957 104,534

Financing csts (2,772) (2,507)

Prit/(lss) n dispsal investments 3,913 (6,673)

Impairment available-r-sale securities (7,085) (1,065)

Share (lss)/prit equity accunted investees (16) 111

Grup and Supprt Services expenses (26,486) (35,284)

Net prit bere tax 133,511 59,116

Total assets

Ttal assets r reprtable segments 1,650,464 2,022,316

Grup and Supprt Services assets 290,352 241,156

Investments in equity accunted investees - 6,924

Ttal assets 1,940,816 2,270,396

Total liabilities

Ttal liabilities r reprtable segments 1,453,508 1,888,819

Grup and Supprt Services liabilities 126,284 91,536

Ttal liabilities 1,579,792 1,980,355



Note 6. Segment inormation (continued)

The cnslidated entity has identied three perating segments based n the internal reprts that are reviewed and used by the

cnslidated entity’s CEo in assessing perrmance and in determining the allcatin resurces. Fr each the reprtable segments,

the cnslidated entity’s CEo reviews internal management reprts n a mnthly basis. The llwing summary describes the peratins

in each the reprtable segments:

a. Services provided

The cnslidated entity perates in the nancial services industry in Australia and prvides wealth management and crprate trust

services. The majr services rm which the reprtable segments derive revenue are:

Perpetual Investments Manuacturer nancial prducts, management and investment mnies n behal private,

crprate, superannuatin and institutinal clients.

Private Wealth Private Wealth prvides a wide range investment and nn-investment prducts and services. These

include a cmprehensive advisry service, prtli management, philanthrpic, executrial and trustee

services t high net wrth and emerging high net wrth Australians. Private Wealth als prvides many

these services t charities, nt r prt and ther philanthrpic rganisatins.

Corporate Trust The Crprate Trust divisin prvides duciary services incrprating sae-keeping and recrding

assets and transactins as custdian, trustee, registrar r agent r crprate and nancial services

clients and mrtgage prcessing services.

Cmparative segment inrmatin has been prepared in cnrmity with the requirement AASB 8 operating Segments.

b. Geographical segments

The cnslidated entity perates predminantly in Australia. Mre than 90 per cent revenue and nn-current assets relate t

peratins in Australia.

c. Major customers

The cnslidated entity des nt rely n any majr custmer.

Note 7. Auditor’s remuneration

Consolidated

2010 2009

$ $

Audit Services

Auditrs the Cmpany

KPMG Australia:

Audit and review the cnslidated and subsidiary inancial statements 595,568 549,500

Audit and review managed unds and superannuatin unds

r which the cnslidated entity acts as respnsible entity1

2,777,303 2,307,136

Audit services in accrdance with regulatry requirements 298,680 241,000

other assurance services 20,000 20,000

Overseas KPMG frms:

Audit and review inancial statements 63,800 50,000

other assurance services 2,400 2,000

3,757,751 3,169,636

1 These ees were paid r the audit 145 managed unds (2009: 138 managed unds) and 1,171 (2009: 1,114) DIY superannuatin unds and which cntainedassets ttalling $26.9 billin (2009: $26.2 billin).

other assurance services paid t KPMG are in accrdance with the Cmpany’s auditr independence plicy as utlined in Perpetual’s

Crprate Respnsibility Statement.



Note 8. Income tax expense

a. Income tax expense

Consolidated

2010 2009

$’000 $’000

Current tax expense 48,022 20,058

Deerred tax expense (4,798) 2,018

over prvided in prir years (435) (651)

Total 42,789 21,425

Deerred tax included in income tax expense comprises:

Increase/(decrease) in deerred tax assets 5,316 (651)

Increase in deerred tax liabilities (518) (1,367)

Ttal 4,798 (2,018)

The abve mvements in deerred tax assets and deerred tax liabilities

are net mvements in these balances recgnised directly in ther

cmprehensive incme.

b. Reconciliation o income tax expense to prima acie income tax payable

Consolidated

2010 2009

$’000 $’000

Prima acie incme tax expense calculated at 30% (2009: 30%) n prit r the year 40,053 17,735

Increase in incme tax expense due t:

– Taxable prit n dispsal investments 1,117 -

– Accunting write dwn n available-r-sale assets 2,125 -

– Accunting lss n credit unds - 723

– Accunting lss n dispsal investments - 2,321

– Imputatin grss-up n dividends received 60 138

– Freign surce lss – eect lwer tax rate 1,338 2,007

– Freign surce lss nt recgnised as a deerred tax asset 956 1,433

– other expenditure 1,702 787

7,298 7,409

Decrease in incme tax expense due t:

– Franking credits n dividends received (199) (461)

– Accunting prit n dispsal investments (1,174) -

– Realised net capital lsses - (1,734)

– Unrealised net capital lsses n available-r-sale assets (1,895) (645)

– Write back deerred tax liability arising rm business cmbinatins (361) -

– Sundry items (498) (228)

(4,127) (3,068)

Incme tax expense attributable t prit r the year bere tax 43,224 22,076

Less: Incme tax ver prvided in prir years (435) (651)

Income tax expense attributable to proit or the year 42,789 21,425

The realisatin the deerred tax assets relating t the realised and unrealised capital lsses is dependent n uture capital gains being

in excess the lsses shwn in nte 9 n the llwing page.

c. Current tax liabilities

The current tax liability r the cnslidated entity represents incme taxes payable in respect the current and prir nancial year. In

accrdance with tax cnslidatin legislatin, the Cmpany, as head entity the Australian tax-cnslidated grup, has assumed the

current tax liability recgnised by members in the tax cnslidated grup.

d. Income tax recognised in other comprehensive income

Consolidated

2010 2009$’000 $’000

Cash lw hedges (227) -

Available-r-sale inancial assets 2,705 (3,311)

2,478 (3,311)



Note 9. Deerred tax assets / (liabilities)

Consolidated

2010 2009

$’000 $’000

The balance comprises temporary dierences attributable to:Prperty, plant and equipment 1,819 4,181

Intangible assets - (3,685)

Emplyee beneits 10,970 8,102

Prvisins and accruals 11,589 10,288

Structured prducts-interest received in advance 4,175 4,281

Realised net capital lsses 1,433 1,734

Unrealised net capital lsses 2,636 5,157

other items 597 323

Total deerred tax assets 33,219 30,381

Intangible assets (6,845) -

Structured prducts-interest paid in advance - (1,575)

other items (353) (562)

Total deerred tax liabilities (7,198) (2,137)

Net deerred tax assets 26,021 28,244

At 30 June 2010, the cnslidated entity had carried rward

realised net capital lsses $4,778,000 (30 June 2009:

$5,781,000) which had a tax benet $1,433,000 (30 June

2009: $1,734,000); the tax benet these capital lsses has

been recgnised in deerred tax assets.

As at 30 June 2010, the cnslidated entity had carried rward

unrealised net capital lsses $8,787,000 (30 June 2009:$17,190,000) which had a tax benet $2,636,000 (30 June

2009: $5,157,000). o this amunt $8,732,000 (30 June 2009:

$8,876,000) which had a tax benet $2,620,000 (30 June

2009: $2,663,000) has been recgnised in prt and lss in

the current and prir perids, and $55,000 (30 June 2009:

$8,314,000) which had a tax benet $16,000 (30 June 2009:

$2,494,000) has been recgnised in ther cmprehensive

incme in the current and prir perids. The tax benet these

capital lsses has been recgnised in deerred tax assets.

The cnslidated entity had unrealised net capital gains

recgnised in prt r lss r the year ended 30 June 2010

$144,000 (2009: lss $8,876,000) which had a tax expense

$43,000 (2009: tax benet $2,663,000). The tax expense has

reduced the tax benet attributable t the unrealised net capital

lsses in deerred tax assets.

At 30 June 2010, the cnslidated entity has carried rwardreign tax lsses $58,311,000 (30 June 2009: $50,666,000)

which had a tax benet $7,289,000 (30 June 2009:

$6,333,000) at 12.5 per cent that was nt recgnised in the

Balance Sheet.



Note 9. Deerred tax assets/(liabilities) (continued)

Balance1 July 2009

Recognised in proitor loss

Recognised in othercomprehensive income

Acquired in businesscombinations

Balance30 June 2010

$’000 $’000 $’000 $’000 $’000

Movement in temporary dierences during the year

Consolidated

Deerred tax assets

Prperty, plant and equipment 4,181 (2,362) - - 1,819

Intangible assets (3,685) 3,685 - - -

Emplyee beneits 8,102 2,868 - - 10,970

Prvisins and accruals 10,288 1,301 - - 11,589

Structured prducts-interest receivedin advance

4,281 (106) - - 4,175

Realised net capital lsses 1,734 (301) - - 1,433

Unrealised net capital lsses 5,157 (43) (2,478) - 2,636

other items 323 274 - - 597

30,381 5,316 (2,478) - 33,219

Deerred tax liabilities

Intangible assets - (2,302) - (4,543) (6,845)

Structured prducts-interest paidin advance

(1,575) 1,575 - - -

other items (562) 209 - - (353)

(2,137) (518) - (4,543) (7,198)

28,244 4,798 (2,478) (4,543) 26,021

Balance1 July 2008

Recognised in proitor loss

Recognised in othercomprehensive income

Acquired in businesscombinations

Balance30 June 2009

$’000 $’000 $’000 $’000 $’000

Movement in temporary dierences during the year

Consolidated

Deerred tax assets

Prperty, plant and equipment 1,737 2,444 - - 4,181

Intangible assets (1,696) (1,989) - - (3,685)

Emplyee beneits 11,682 (3,580) - - 8,102

Prvisins and accruals 9,519 769 - - 10,288

Structured prducts-interest receivedin advance

6,354 (2,073) - - 4,281

Realised net capital lsses - 1,734 - - 1,734

Unrealised net capital lsses - 2,663 2,494 - 5,157

other items 942 (619) - - 323

28,538 (651) 2,494 - 30,381

Deerred tax liabilities

Structured prducts-interest paidin advance

- (1,575) - - (1,575)

Shares in ther cmpanies,investments in unlisted unit trustsand ther inancial assets

(817) - 817 - -

other items (770) 208 - - (562)

(1,587) (1,367) 817 - (2,137)

26,951 (2,018) 3,311 - 28,244



Note 10. Dividends

a. Dividends paid

Dividends paid r prvided r in the current and cmparative year are as llws:

Cents per share Total amount$’000

Franked1

/ Unranked Date o payment

2010


Interim 2010 rdinary 105 45,398 Franked 1 Apr 2010

Total amount 165 70,904

2009


Interim 2009 rdinary 40 16,986 Franked 13 Mar 2009

Total amount 181 76,167

1 All ranked dividends declared r paid during the year were ranked at a tax rate 30 per cent and paid ut retained earnings.

The Cmpany intrduced a Dividend Reinvestment Plan (DRP) in May 2009. The DRP is ptinal and ers rdinary sharehlders in

Australia and New Zealand the pprtunity t acquire ully paid rdinary shares, withut transactin csts. The shares may als be

issued at a discunt t the market price, which the directrs may determine rm time t time. The discunt applied t the DRP r the

interim and prpsed nal 2010 dividend is 2.5%. A sharehlder can elect t participate in r terminate their invlvement in the DRP at

any time.

b. Subsequent events

Since the end the nancial year, the directrs declared the llwing dividend. The dividends have nt been prvided r and there are

n tax cnsequences.

Cents pershare

Total amount2

$’000Franked1 / Unranked

Date opayment


1 All ranked dividends declared r paid during the year were ranked at a tax rate 30 per cent and paid ut retained earnings.2 Calculatin based n the rdinary shares n issue as at 30 June 2010.

The nancial eect this dividend has nt been brught t accunt in the nancial statements r the year ended 30 June 2010 and will

be recgnised in subsequent nancial reprts.

c. Dividend ranking account

2010 2009

$’000 $’000

30% ranking credits available t sharehlders r subsequent inancial years 62,474 44,876

The abve available amunts are based n the balance the dividend ranking accunt at 30 June 2010 adjusted r ranking credits

that will arise rm the payment the current tax liabilities, and ranking credits that will arise rm the receipt dividends recgnised

as receivables by the tax cnslidated grup at the year-end.

The ability t utilise the ranking credits is dependent upn there being sucient available prts t declare dividends. The impact n

the dividend ranking accunt dividends prpsed ater the balance sheet date, but nt recgnised as a liability, is t reduce it t

$42,936,000 (2009: $33,945,000).



Note 11. Earnings per share

Consolidated

2010 2009

Cents per share

Basic earnings per share 227.1 96.0

Diluted earnings per share 210.5 89.4

The llwing relects the incme and share inrmatinused in calculating the basic and diluted earnings per share:

$’000 $’000

Net prit ater tax attributable t equity hlders Perpetual Limited 90,506 37,749

Number o shares

Weighted average number rdinary shares used in the calculatin basic earnings per share

39,855,523 39,312,579

Eect dilutive securities:

Share ptins 27,893 7,206Weighted average number treasury shares n issue 3,115,243 2,912,403

Weighted average number rdinary shares and ptential rdinary shares usedin the calculatin diluted earnings per share

42,998,659 42,232,188

Subsequent t the reprting date, n ptins were exercised by emplyees wh have let the Cmpany (2009: nil).

Note 12. Cash and cash equivalents

Consolidated

2010 2009

$’000 $’000

Bank balances 54,345 67,270

Depsits at call 79,462 29,415

Shrt-term depsits 53,732 49,453

187,539 146,138

Bank balances include cash held by emplyee share trusts $664,000 (2009: $230,000) which are nt available r general perating

use and are set by a liability t emplyees in current payables.

Depsits at call are invested in a cash management trust perated by the cnslidated entity. Shrt-term depsits represent investments

in the Perpetual Credit Incme Fund and Perpetual Credit Enhanced Cash Fund. These unds have a Standard & Pr’s und credit

quality rating ‘A’ and invest in high grade credit prducts with the intentin generating a return in excess the UBS Bank Bill Index

and are generally available at seven days’ ntice.



Note 13. Receivables

Consolidated

2010 2009$’000 $’000

Current

Trade debtrs 70,699 65,312

Less: Prvisin r dubtul debts (522) (271)

70,177 65,041

other debtrs 16,666 13,107

86,843 78,148

Non-current

other debtrs 3,648 4,200

3,648 4,200

Mvements in the prvisin r bad and dubtul debts are as llws :

Balance as at 1 July 2009 271 89

Prvisin r impairment recgnised during the year 770 375

Receivables written during the year as uncllectible (214) (94)

Unused amunt reversed (305) (99)

Balance as at 30 June 2010 522 271

The creatin and release the prvisin r bad and dubtul debts has been included in administrative and general expenses in the

Statement Cmprehensive Incme. Amunts charged t the allwance accunt are generally written when there is n expectatin

recvering additinal cash.

This nte shuld be read in cnjunctin with Nte 28(a) (iii).

Note 14. Other inancial assets

Consolidated

2010 2009

$’000 $’000

Current

Gvernment, municipal and ther public securitiesheld t maturity

100 100

Non-current

Listed equity securities available-r-sale – at air value 36,030 22,060

Unlisted unit trusts available-r-sale – at air value 13,538 14,295

Gvernment, municipal and ther public securities held-t-maturity 122 122

Secured lans 259 232

49,949 36,709



Note 15. Interest in associates using the equity method

Consolidated

2010 2009

$’000 $’000

Investment in assciate - 6,924

Name o EntityCountry o

Incorporation Reporting Date Ownership Interest

2010 2009

Perpetual Whlesale Geared Internatinal Share Fund (PIWGIF) Australia 30 June 92% 46%

Perpetual Pure Value Share Fund (PIBIAS) Australia 30 June - 11%

PIWGIF was previusly accunted r in the cnslidated nancial statements using the equity methd accunting until redemptin

units by external unit hlders increased the cnslidated entity’s interests abve 50%. It is nw cnslidated in the nancial statements.

PIBIAS was accunted r in the cnslidated nancial statements using the equity methd accunting and was ully dispsed in

August 2009.

Note 16. Derivative inancial instruments

Consolidated

2010 2009

$’000 $’000

Assets

Current

Frward reign exchange cntracts 11 21

Interest rate swap cntracts - 124

11 145

Liabilities

Current

Interest rate swap cntracts 662 821

This nte shuld be read in cnjunctin with Nte 29 (b).

Instruments used by incubation unds

As part the cnslidated entity’s asset management incubatin

und strategy and t diversiy its investment prtli, seed capital

was invested in varius incubatin unds. These unds may be

party t derivative nancial instruments in the nrmal curse

business in rder t hedge expsure t fuctuatins in reign

exchange rates, interest rates, equity indices and t trade rm

their mvements in accrdance with the unds’ nancial risk

management plicy.

Forward oreign exchange contracts

The cnslidated entity has entered int rward exchange

cntracts which are ecnmic hedges but d nt satisy the

requirements r hedge accunting. These cntracts are subject

t the same risk management plicies as ther derivative

cntracts utlined. Accrdingly, they are accunted r as held

r trading nancial instruments.

These cntracts are air valued by cmparing the cntracted rate

t the current market rate r a cntract with the same remaining

perid t maturity. Any changes in air values are recrded in

prt r lss.

Interest rate swap contracts

Interest rate swap cntracts held r hedging purpses

assciated with the PPI structured prduct are disclsed in

Nte 29 (b).



Note 17. Property, plant and equipment

Consolidated

2010 2009

$’000 $’000

Plant and equipment – at cst 19,276 17,678

Accumulated depreciatin (12,653) (10,464)

6,623 7,214

Leasehld imprvements – at cst 30,820 27,955

Accumulated depreciatin (10,186) (7,439)

20,634 20,516

Prject wrk in prgress – at cst 539 -

27,796 27,730

Recnciliatins the carrying amunts r each class prperty, plant and equipment are set ut belw:

Plant and equipmentLeasehold

improvements

Project

work in progress

Total

$’000 $’000 $’000 $’000

Consolidated

Balance as at 1 July 2009 7,214 20,516 - 27,730

Acquisitins thrugh business cmbinatins 289 2,271 - 2,560

Additins 2,223 214 1,211 3,648

Transers rm wrk in prgress 289 383 (672) -

Depreciatin and amrtisatin (2,996) (2,750) - (5,746)

Dispsals (396) - - (396)

Balance as at 30 June 2010 6,623 20,634 539 27,796

Consolidated

Balance as at 1 July 2008 7,861 22,289 504 30,654

Additins 772 29 1,268 2,069

Transers rm wrk in prgress 936 836 (1,772) -

Depreciatin and amrtisatin (2,345) (2,500) - (4,845)

Dispsals (10) (138) - (148)

Balance as at 30 June 2009 7,214 20,516 - 27,730

Note 18. Intangibles

Consolidated

2010 2009

$’000 $’000

Gdwill – at cst 113,539 76,639113,539 76,639

other intangibles – at cst 27,618 12,478

Accumulated amrtisatin (6,276) (2,949)

21,342 9,529

Capitalised stware – at cst 76,749 68,683

Accumulated amrtisatin (53,704) (47,918)

23,045 20,765

Prject wrk in prgress – at cst 5,582 5,727

163,508 112,660



Note 18. Intangibles (continued)

Recnciliatins the carrying amunts r each class intangibles are set ut belw:

Goodwill Other intangibles Capitalised sotwareProject

work in progressTotal

$’000 $’000 $’000 $’000 $’000

Consolidated

Balance as at 1 July 2009 76,639 9,529 20,765 5,727 112,660

Acquisitins thrugh business cmbinatins 36,900 15,141 70 - 52,111

Additins - - 518 7,650 8,168

Transers rm wrk in prgress - - 7,586 (7,586) -

Amrtisatin r the year - (3,328) (5,783) - (9,111)

Dispsals - - (111) (209) (320)

Balance as at 30 June 2010 113,539 21,342 23,045 5,582 163,508

Balance as at 1 July 2008 62,124 4,266 12,137 9,429 87,956

Acquisitins thrugh business cmbinatins 14,515 6,863 - - 21,378

Additins - - 1,979 9,987 11,966

Transers rm wrk in prgress - - 13,689 (13,689) -

Amrtisatin r the year - (1,600) (6,718) - (8,318)

Dispsals - - (322) - (322)

Balance as at 30 June 2009 76,639 9,529 20,765 5,727 112,660

Consolidated

2010 2009

$’000 $’000

Amortisation

Amrtisatin is recgnised in the llwing line items in the Statement cmprehensive incme:

Amrtisatin expense 9,111 8,318

Impairment tests or cash generating units containing goodwill

The llwing cash generating units have signiicant carrying amunts gdwill:

Private Wealth 77,159 40,260

Securitisatin1 16,653 16,653

Perpetual Lenders Mrtgage Services1 5,648 5,648

smartsuper 10,583 10,583

Australian Equities 3,496 3,495

113,539 76,639

1 In 2009, cmbined as Crprate Trust divisin CGU.

Impairment testing these gdwill balances is based n each cash generating unit’s value in use, calculated as the present value

recast uture cash fws rm thse cash generating units using discunt rates between 12.5% and 15% (2009: discunt rates

between 12% and 17%). The recast uture cash fws used in the impairment testing are based n assumptins as t the level prtability r each business ver a recast perid. Frecast uture cash fws have been prjected r 5 years based n the 2011-2013

Annual operating Plan and the 5 year Strategic Plan which have been apprved by the bard and then prjected r an indenite perid

by including a terminal value with a grwth rate in perpetuity 2.5%.

Note 19. Prepayments

Consolidated

2010 2009

$’000 $’000

Current

Prepayments 7,447 11,820

Non-currentPrepayments 858 -



Consolidated

2010 2009

$’000 $’000

Flating rate bill acility 45,000 45,000

See Ntes 27 and 28(c)(ii) r additinal inrmatin. Bank acility assciated with the PPI structured prduct is disclsed in Nte 29(b).

Note 23. Provisions

Consolidated

2010 2009

$’000 $’000

Current

Internal insurance and legal prvisin1 5,404 880

onerus leases and make gd 75 172

operatinal prcess review prvisin 1,667 5,469

Lease expense prvisin 524 275

7,670 6,796

Non-current

Internal insurance and legal prvisin1 800 5,089

Lease expense prvisin 22,200 20,86923,000 25,958

1 The internal insurance and legal prvisin includes the prvisin r sel insurance and the prvisin r litigatin. The prvisin r sel-insurance recgnises incurredbut nt reprted claims. The prvisin r litigatin claims includes prvisins r legal cst and settlement amunts. These prvisins are measured at the cst thatthe entity expects t incur in deending and/r settling the claim.

Note 20. Payables

Consolidated

2010 2009

Current $’000 $’000

Trade creditrs 29,024 31,202

other creditrs and accruals 11,637 4,240

40,661 35,442

Non-current

other creditrs and accruals 6,206 1,819

This nte shuld be read in cnjunctin with Nte 28 (b).

Note 21. Structured products – income received in advance

Current

Interest incme 13,918 13,563

Incme received in advance cnsists deerred interest incme received assciated with the PPI structured prduct. The PPI structuredprduct is disclsed in Nte 29 (b).

Note 22. Non-current interest-bearing liabilities



Note 23. Provisions (continued)

Consolidated2010 2009

$’000 $’000

Recnciliatins the carrying amunts each class prvisin are set ut belw:

Internal insurance and legal provision

Carrying amunt at beginning year 5,969 6,165

Additinal prvisin made during the year 1,180 5,005

Payments made during the year (895) (4,065)

Unused amunts reversed during the year (50) (1,136)

Carrying amunt at end year 6,204 5,969

Onerous leases and make good

Carrying amunt at beginning year 172 400

Additinal prvisin made during the year 25 113

Payments made during the year

Carrying amunt at end year

(122) (341)

75 172

Operational process review provision

Carrying amunt at beginning year 5,469 -

Amunt transerred rm ther debtrs 1,406 -


Unused amunts reversed during the year (3,207) -

Payments made during the year (6,259) -

Amunts paid, recgnised as receivable (1,262) -


Lease expense provision

Carrying amunt at beginning year 21,144 18,410


Payments made during the year (11,310) (11,097)

Unused amunts reversed during the year (133) -

Unwinding prvisins 548 -


Note 24. Contributed equity

Share capital

43,417,478 (2009: 42,509,430) rdinary shares, ully paid 206,017 174,222

2010 2009Number

o shares$’000

Numbero shares

$’000

Movements in share capital

Balance at beginning year 39,358,781 174,222 39,197,876 163,811

Shares issued:

Issued in business cmbinatin 283,950 10,569 - -

Dividend reinvestment 255,682 9,295 - -

Exercise sta ptins - - 33,779 2,347

Executive share plans (vested during the year) 225,580 13,110 146,629 8,684

Emplyee equity allcatin purchased n market (29,465) (1,336) (19,503) (1,014)

Emplyee share plans (vested during the year) - 157 - 394

Balance at end year 40,094,528 206,017 39,358,781 174,222

ordinary shares ully paid (excluding unvestedshares rm share plans)

40,094,528 206,017 39,358,781 174,222

Unvested shares rm share plans 3,322,950 173,375 3,150,649 173,128

ordinary shares ully paid 43,417,478 379,392 42,509,430 347,350

Nte 26 prvides details shares issued n exercise ptins.

The Cmpany des nt have authrised capital r par value inrespect its issued shares.

Shares issued under the executive and emplyee share plans

were issued at market value.

Terms and conditions

Hlders rdinary shares are entitled t receive dividends asdeclared rm time t time and entitled t ne vte per share at

sharehlders’ meetings.

In the event winding up the cmpany, rdinary sharehlders

rank ater creditrs and are ully entitled t any surplus capital.



Note 25. Reserves

Consolidated

2010 2009

$'000 $'000

General 103 103

Available-r-sale-reserve 1 2,871 (4,016)

Equity cmpensatin reserve2 57,688 48,457

Cash lw hedge reserve3 (454) (755)

Freign currency translatin reserve4 (3,347) (491)

56,861 43,298

1 The Available-r-sale-reserve represents adjustments t changes in the carrying value shares and unit trusts t air values. When these assets are sld rcnsidered impaired, the cumulative gain / lss that had been recgnised directly in equity is recycled t prt and lss.

2 The Equity cmpensatin reserve represents the value the Cmpany’s wn shares held by an equity cmpensatin plan that the cnslidated entity is required tinclude in the cnslidated nancial statements. This reserve will be reversed against share capital when the underlying shares vest t the emplyee. N gain r lssis recgnised in prt and lss n the purchase, sale, issue r cancellatin the cnslidated entity’s wn equity instruments.

3 The Cash fw hedge reserve is used t recrd gains r lsses n hedging instruments designated as cash fw hedges as described in accunting plicyNte 2(w)(i). Amunts are recgnised in the Statement cmprehensive incme when the assciated hedged transactin aects prt and lss.

4 The Freign currency translatin reserve recrds the reign currency dierences arising rm the translatin sel-sustaining reign peratins, the translatin transactins that hedge the cmpany’s net investment in a reign peratin r the translatin reign currency mnetary items rming part the net investmentin a sel-sustaining peratin. Reer t accunting plicy Nte 2(d).

Note 26. Employee beneits

a. Aggregate liability or employee beneits, including on-costs

Consolidated

2010 2009

$'000 $'000

Current

Liability r annual leave 6,705 5,916

Liability r lng service leave 3,283 2,887

other emplyee beneits 25,852 19,689

Restructuring prvisin 40 804

35,880 29,296

Non-current

Liability r lng service leave 2,894 2,371

The nn-current prtin the lng service leave prvisin has been discunted using a rate 5.3 per cent (2009: 5.5 per cent).

The number ull time equivalent emplyees at 30 June 2010 was 1,550 (2009: 1,139).

b. Equity based plans

(i) Option plans

The Cmpany has an executive ptin plan which was apprved at the 1998 Annual General Meeting. Each ptin is cnvertible t ne

rdinary share. The exercise price the ptins, determined in accrdance with the rules the plan, is based n the weighted average

price the cmpany’s shares traded during the ve business days preceding the date granting the ptin.

All ptins are t be settled by physical delivery shares.

optins generally expire n the earlier the expiry date r terminatin the emplyee’s emplyment. There are n vting r dividend

rights attached t the ptin nr the unissued rdinary share underlying the ptin.



Note 26. Employee beneits (continued)

b. Equity based plans (continued)

(i) Option plans (continued)

A summary ptins ver unissued rdinary shares is set ut belw:

Weightedaverage

exercise price

Movement in number o options on issue Numbero options

exercisableGrant date Exercise date Expiry date 1 July 2009 Issued Foreited Exercised1

Outstanding at30 June 2010

Jul 2004 Jun 20074 Jul 2010 $47.08 978 - - - 978 978

Jul 2005 Jun 2008 Jul 2011 $56.85 28,144 - (28,144) - - -

Jul 2006 Jun 20094 Jul 2012 $71.88 29,950 - - - 29,950 -

Jul 2007 Jun 20104 Jul 2013 $79.17 236,436 - - - 236,436 -

Mar 2008 Mar 2011 Mar 2013 $52.71 75,301 - (75,301) - - -

Jul 2008 Jun 20114 Jul 2014 $42.73 57,390 - - - 57,390 -

Jan 2009 Jun 2013 Jan 2015 $31.42 182,215 - (182,215) - - -

Jun 2009 Jun 2012 Jun 2014 $29.74 58,939 - (58,939) - - -

Jun 2009 Jun 20124 Jun 2015 $28.34 47,585 - - - 47,585 -

Jul 2009 Jul 20124 Jun 2015 $28.34 - 5,911 - - 5,911 -716,938 5,911 (344,599) - 378,250 978

Weightedaverage

exercise price

Movement in number o options on issue Numbero options

exercisableGrant date Exercise date Expiry date 1 July 2008 Issued Foreited Exercised1

Outstanding at30 June 2009

oct 2002 oct 20052 oct 2008 $32.46 34,625 - (846) (33,779) - -

Jul 2004 Jun 20074 Jul 2010 $47.08 7,818 - (6,840) - 978 978

Jul 2005 Jun 20084 Jul 2011 $56.85 28,144 - - - 28,144 -

Jul 2006 Jun 20094 Jul 2012 $71.88 29,950 - - - 29,950 -

Jul 2007 Jun 20104 Jul 2013 $79.17 236,436 - - - 236,436 -

Mar 2008 Mar 20114 Mar 2013 $52.71 75,301 - - - 75,301 -

Jul 2008 Jun 20114 Jul 2014 $42.73 - 57,390 - - 57,390 -

Jan 2009 Jun 20133 Jan 2015 $31.42 - 182,215 - - 182,215 -

Jun 2009 Jun 20124 Jun 2014 $29.74 - 58,939 - - 58,939 -Jun 2009 Jun 20124 Jun 2015 $28.34 - 47,585 - - 47,585 -

412,274 346,129 (7,686) (33,779) 716,938 978

1 In certain circumstances, at the discretin the Peple and Remuneratin Cmmittee, ptins can be exercised prir t their earliest exercise date.

2 one third this class ptin can be exercised n this date with a urther third, ne year rm this date and the last third, tw years rm this date.

3 This ptin class will vest n the urth anniversary the date grant subject t the achievement perrmance hurdles.

4 This ptin class will vest n the third anniversary the date grant subject t the achievement perrmance hurdles. on 23 June 2010, the cmpanyannunced that Managing Directr, David Deverall, had given ntice his resignatin. As a result, n lng term incentives, including the ptins utstanding as at30 June 2010, will vest as a result Mr Deverall’s resignatin and all unvested ptins will be reited n ceasing emplyment. The ptins utstanding as at30 June 2010 have a carrying value $Nil.

The ptins utstanding at 30 June 2010 have an exercise price

in the range $28.34 t $79.17 (2009: $28.34 t $79.17) and a

weighted average cntractual lie 3 (2009: 3.3) years.

The weighted average share price at the date exercise r

share ptins exercised during the year ended 30 June 2010 was

nil (2009: $38.96).

The air value services received in return r share ptins

granted is based n the air value share ptins granted,

measured using a binmial lattice mdel, with the llwing inputs

(weighted average):

2010 2009

Fair value at grant date ($) 8.25 8.12

Share price ($) 28.54 32.15

Exercise price ($) 28.34 32.59

Expected vlatility (%) 45 35

optin lie (years) 5 5

Expected dividends (%) 5.6 5.57

Risk ree interest rate (%) 5.18 4.38

(ii) Executive Share Plan (ESP)

The ESP was apprved by sharehlders at the cmpany’s Annual

General Meeting in 1997 and was amended at the 1999 AGM.

The ESP rms part the structure r shrt and lng term

variable remuneratin cmpnents paid t emplyees. Grants

under the plan r shrt-term perrmance are made n

achievement specic perrmance gals. Lng-term grants

vest ater perids between three t ve years, and may include

the achievement specic perrmance hurdles.

The issue price grants shares is the weighted average the

prices at which shares were traded n the ASX r the ve days

up t the date issue. Shares are either purchased n market

r issued by the Cmpany t satisy the grants made t eligible

emplyees.

While shares are held by the ESP, emplyees receive dividends

and have vting rights.



(iii) Employee Share Purchase Plan (ESPP)

This plan was discntinued n 10 December 2004 and n urther

issues have been made under this plan.

The ESPP prvided eligible emplyees with a nn-recurse

interest ree lan, r a perid nt exceeding 10 years, tpurchase shares under the plan. The invitatin was pen t

emplyees wh cmmenced permanent emplyment with

Perpetual prir t 1 June 2004 with an er t purchase a

minimum number shares equivalent in value t $1,000 and a

maximum number shares equivalent in value t $4,000. The

issue price under the plan was the weighted average the prices

at which shares were traded n the ASX r the ve days up t

the date issue.

The shares vest when the lan is ully repaid.

(iv) Tax Exempt Share Plan (TESP)

Under the TESP, eligible emplyees will be able t salarysacrice up t $1,000 shrt term incentive t acquire an

equivalent value Perpetual shares. These shares cannt be

sld r transerred until the earlier three years ater the date

allcatin r the time the participant ceases t be an emplyee

Perpetual. Shares will be acquired in rdinary trading n the

Australian Securities Exchange r issued by Perpetual. Executive

directrs and executives are nt able t participate in this plan.

(v) The Tax Deerred Share Plan (TDSP)

Under the TDSP, eligible emplyees are able t salary sacrice all

r part their shrt term incentive t acquire an equivalent value

Perpetual shares. Shares are acquired in the rdinary curse

trading n the Australian Securities Exchange. Executive

directrs and executives have the pprtunity t participate in

this plan. Shares acquired under this plan by executive directrs

and executives are nt subject t perrmance hurdles because

they are acquired n a salary r bnus sacrice basis.

(vi) Deerred Share Plan (DSP)

The DSP rms part the structure r shrt-term and lng-term

variable remuneratin cmpnents paid t eligible emplyees

the Australian business. Grants under the plan vest subject t the

achievement specic perrmance hurdles and service.

The issue price grants is the weighted average the prices at

which shares traded n the Australian Securities Exchange r

the ve days up t the date issue. Shares are either purchased

n market r issued by the cmpany t satisy grants made t

eligible emplyees.

While shares are held by the DSP, eligible emplyees have vting

rights and receive dividends directly r reinvest dividends int

Perpetual shares.

(vii) Global Employee Share Trust (GEST)

The GEST rms part the structure r lng-term variable

remuneratin cmpnents paid t eligible emplyees the

Perpetual Investments Glbal Equities business.

The issue price grants is the weighted average the prices at

which shares traded n the Australian Securities Exchange r

the ve days prir t the date grant shares. Shares are either

purchased n market r issued by the cmpany t satisy grants

made t eligible emplyees.

Dividends paid n shares held by the GEST are retained in the

GEST r the benet the emplyee until perrmance hurdles

are tested, at which time the dividend accumulated may bedistributed t the emplyee. Vting rights attached t unvested

shares that are held in the GEST are exercisable by the trustee

the GEST.

Grants under the plan vest subject t the achievement specic

perrmance hurdles.

(viii) Details o the movement in employee shares

o share grants under the ESP, DSP and GEST in the 2010

nancial year, 368,416 shares were issued at market price and

264,449 shares were re-issued rm the reited share pl

at market price. Certain share plans stipulate that dividends

received n unvested lng-term incentive shares (39,572 sharesat last dividend payment) are t be reinvested int Perpetual

shares. During the perid 1,943 shares were purchased n

market at an average price $34.92 t satisy this requirement.

As a result changes in the emplyee share scheme rules

enacted in 2009, dividends that were being reinvested in

Perpetual shares n lng term incentive schemes are either nw

being received directly by the emplyees r held in the share plan

bank accunt depending n the likelihd the shares vesting.

The amunts recgnised in the nancial statements the

cnslidated entity in relatin t the share plans reerred t abve

during the year were amrtisatin perrmance shares ttalling

$26,755,000 (2009: $25,930,000) recgnised as an expense withthe crrespnding entry directly in equity.

(ix) Non-executive Director Share Purchase Plan

A share purchase plan r nn-executive directrs was apprved

by sharehlders at the annual general meeting in octber 1998,

under which each nn-executive directr can sacrice up t 50

per cent their directr’s ees t acquire shares in the Cmpany.

The shares are purchased ur times thrughut the year at

market value and have a dispsal restrictin 10 years, r when

the directr ceases t be a directr the Cmpany.

During this nancial year there were n directrs that purchased

shares n market in the Nn-executive directrs sharepurchase plan.

During the prir nancial year the llwing directrs participated

in this plan:

Shares purchased on market

Directors Number $

E P McClintck 1,675 49,486

E M Prust 419 12,378

R M Savage 2,134 60,659

P B Sctt 1,047 30,935

P J Twyman 2,095 61,891

7,370 215,349



Note 27. Financial arrangements

Consolidated

2010 2009

$'000 $'000

The cnslidated entity has accesst the llwing line credit:

Facilities utilised

Flating rate bank acility 45,000 45,000

Facilities not utilised

Flating rate bank acility 25,000 -

Bill acilities

The fating rate bank bill acility is unsecured and has a fating

interest rate 5.07 per cent at 30 June 2010 (30 June 2009: 3.58

per cent). Repayment the existing acility is due n 31 July 2011.

The cnslidated entity has agreed t varius debt cvenantsincluding sharehlders’ unds as a specied percentage ttal

assets, a minimum amunt sharehlders’ unds, a maximum

rati ttal debt, a minimum interest cver, a maximum amunt

structured prduct liabilities and a maximum prvisin r PPI

credit lsses as a specied percentage PPI investr lans.

The cnslidated entity is in cmpliance with the cvenants at

30 June 2010. Shuld the cnslidated entity nt satisy any

these cvenants, the utstanding balance the lans may

becme due and payable.

Bank acilities assciated with the PPI structured prduct are

disclsed in Nte 29 (b).

This nte shuld be read in cnjunctin with Nte 28 (c) (ii).

Note 28. Financial risk management

Perpetual recgnises that risk is part ding business and that

the nging management risk is critical t its success. The

apprach t managing risk is articulated in the Risk Management

Framewrk. The Risk Management Framewrk is supprted by theRisk Grup, wh are respnsible r the design and maintenance

the ramewrk, establishing and maintaining grup wide risk

management plicies, and prviding regular risk reprting t the

Bard, the Audit Risk and Cmpliance Cmmittee (ARCC) and

the Grup Executive Cmmittee. This ramewrk is apprved by

the Perpetual Bard Directrs (the Bard) and is reviewed r

adequacy and apprpriateness n an annual basis.

The Bard regularly mnitrs the verall r isk prle the grup

and sets the risk appetite r the grup, usually in cnjunctin

with the annual planning prcess. The Bard is respnsible

r ensuring that management have apprpriate prcesses in

place r managing all types risk, ranging rm nancial risk t

peratinal risk. T assist in prviding nging assurance and

cmrt t the bard, respnsibility r risk management versight

has been delegated t the ARCC. The main unctins this

cmmittee are t versee the cnslidated entity’s accunting

plicies and practices, the integrity nancial statements and

reprts, the scpe, quality and independence ur external audit

arrangements, the mnitring the internal audit unctin, the

eectiveness risk management plicies and the adequacy

ur insurance prgrams. This cmmittee is als respnsible r

mnitring verall legal and regulatry cmpliance.

The activities the cnslidated entity expse it t the llwing

nancial risks: credit risk, liquidity risk and market risk. These are

distinct rm the nancial risks brne by custmers which arise

rm nancial assets managed by the cnslidated entity in its

rle as und manager, trustee and respnsible entity.

The risk management apprach t and expsures arising rm

the Exact Market Cash Fund (EMCF) are disclsed in Nte 29.

The llwing discussin relates t nancial risks expsure t the

cnslidated entity in its wn right.

a) Credit risk

Credit risk is the risk nancial lss rm a cunterparty ailing

t meet their cntractual cmmitments. The cnslidated entity

is predminantly expsed t credit risk n its Perpetual PrtectedInvestments (PPI) lans which are issued nly in Australia t retail

custmers, derivative nancial instruments and depsits with

banks and nancial institutins, utstanding receivables and

cmmitted transactins.

The maximum expsure the cnslidated entity t credit risk

n nancial assets which have been recgnised n the balance

sheet is the carrying amunt, net any prvisin r dubtul

debts. The table n the llwing page utlines the cnslidated

entity’s maximum expsure t credit risk as at reprting date.



Consolidated

2010 2009

$'000 $'000

Cash and cash equivalents 187,539 146,138

Trade debtrs 70,177 65,041

Structured prducts - lans receivable (PPI) 188,832 319,651

other lan receivables 20,573 17,539

Available-r-sale listed equity securitiesand unlisted unit trusts 49,568 36,355

Held-t-maturity securities 222 222

Derivative inancial instruments used rhedging: assets 11 145

Credit risk is managed n a unctinal basis acrss the varius

business segments. As a result the swap agreements between

the EMCF and the cnslidated entity, the cnslidated entity is

als expsed t credit risk n its expsure t the $1,199 millin

(2009: $1,513 millin) underlying investments held by the

EMCF. This maximum expsure wuld nly be realised in the

unlikely event that the recverable value all the underlying

investments held by the EMCF decline t $nil. Further details

the credit risk relating t the EMCF are disclsed in Nte 29.

(i) Structured products – Perpetual Protected Investment loans

In rder t manage the credit risk arising rm lending t investrs

in PPI structured prduct erings, the cnslidated entity has

in place a dedicated Credit oce wh reprt t the General

Manager, Structured Prducts. The Credit oce is gverned by

the Credit Risk Plicy which stipulates the criteria that investrs are

required t meet prir t being granted a lan, and hence ensures

that all investrs under this arrangement pssess the desiredlevel credit wrthiness. The Credit Risk Plicy is reviewed

peridically by the Chie Risk ocer (CRo) t ensure its cntinued

cmpliance with the Grup’s Risk Management Framewrk. All

lans are secured by the investr’s investment in the structured

prduct and the cnslidated entity has recurse t the investr

and the investment in the event deault. A charge ver additinal

cllateral may be required r lans greater than $2 millin. As at

30 June 2010, lans r which Perpetual hlds additinal cllateral

amunted t $3.5 millin (30 June 2009: $3.5 millin).

The Credit oce mnitrs the lan prtli n a daily basis and

prvides reprts n a mnthly basis t Grup Finance and the

Risk Grup r review. Arrears abve 30 days are reviewed n a

mnthly basis by the Credit Cmmittee, and are llwed up and

managed by the Credit ocer and recvery initiatives can include

litigatin i required.

The cnslidated entity minimises cncentratins credit risk by

impsing a limit n the expsure it can have with each investr.

The maximum standard expsure per brrwer is set at $1 millin.

Fr amunts greater than $1 millin, apprval rm bth the CRo

and the Chie Financial ocer (CFo) is required.

There were n PPI lans that were past due but nt impaired as

at the reprting date. Further inrmatin n the risk management

apprach t and expsures arising rm the PPI structuredprduct erings is disclsed belw in this nte and in Nte 29.

(ii) Investments held by incubation unds

Perpetual incubates new investment strategies thrugh the

establishment seed unds r the purpse building

investment track recrds and develping asset management

skills bere releasing prducts t Perpetual’s investrs. Expsure

t credit risk arises n the cnslidated entity’s nancial assets

held by the incubatin unds mainly being depsits with nancial

institutins and derivative nancial instruments.

The expsure t credit risk is mnitred n an nging basis by

the unds’ investment manager and managed in accrdance withthe investment mandate the unds.

Credit risk is nt cnsidered t be signicant t the incubatin unds

as investments held by the unds are predminantly equity securities.

(iii) Other inancial assets

The cnslidated entity’s expsure t trade debtrs is infuenced

mainly by the individual characteristic each custmer.

Trade debtrs are managed by the accunts receivable

department. outstanding ees and receivables are mnitred

n a daily basis and an aged debtrs reprt is prepared and

mnitred by Grup Finance. Management assesses thecredit quality custmers by taking int accunt their nancial

psitin, past experience and ther actrs.

Credit risk urther arises in relatin t nancial guarantees given

t whlly wned subsidiaries. Such guarantees are nly prvided

in exceptinal circumstances and are subject t specic Bard

apprval and are mnitred n a quarterly basis as part the

cnslidated entity’s regulatry reprting.

Credit risk arising rm cash investments is mitigated by ensuring

they have a Standard & Pr’s rating ‘A’ r higher, and

transactins invlving derivatives are limited t high credit quality

nancial institutins.

The credit quality nancial assets that are neither past due nr

impaired is assessed by reerence t external credit ratings, i

available, r t histrical inrmatin n cunterparty deault rates.

The table belw prvides an aged analysis the nancial assets

which were past due but nt impaired as at the reprting date.

30 June 2010 30 June 2009

Less than30 days

30 to60 days

60 to90 days

More than90 days

Total Less than30 days

30 to60 days

60 to90 days

More than90 days

Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Consolidated

Trade debtrs 1,696 803 607 664 3,770 1,252 401 140 516 2,309

other receivables 697 10 - 95 802 554 - - 64 618

2,393 813 607 759 4,572 1,806 401 140 580 2,927



Note 28. Financial risk management (continued)

a) Credit risk (continued)

(iii) Other inancial assets (continued)

The trade debtrs in the abve table relate t a number

independent custmers and investrs r whm there is n recent

histry deault.

A lan $7.2 millin (2009: $6.6 millin) is included in other

debtrs – Current as at 30 June 2010. The lan, which was

riginally due r repayment n 2 June 2010, was extended t

2 August 2010. The lan was repaid in ull n 31 July 2010.

The nminal values nancial assets which were impaired are as

llws:

Consolidated

2010 2009

$'000 $'000

Trade debtrs 522 271

Structured prducts – lans receivable 2,635 991

3,157 1,262

The impaired nancial assets relate mainly t independent

custmers and investrs wh are in unexpectedly dicult

ecnmic situatins, where the cnslidated entity is the view

that the receivable cannt be recvered. The cnslidated entity

des nt hld any cllateral against the trade debtrs. Cllateral

held in respect PPI lans is discussed in Nte 28 (a)(i) abve. Fr

details the prvisins r impairment reer t Ntes 13 and 29.

b) Liquidity risk

Liquidity risk is the risk that the nancial bligatins the

cnslidated entity cannt be met as and when they all due

withut incurring signicant csts. The cnslidated entity’s

apprach t managing liquidity is t maintain a level cash

r liquid investments sucient t meet its nging nancial

bligatins. The cnslidated entity has a rbust liquidity risk

ramewrk in place which is principally driven by the Capital

Management Review (reer t capital management disclsed

belw in Nte 28 (d) r urther details).

The cnslidated entity manages liquidity risk by cntinually

mnitring recast and actual cash fws, and by matching the

maturity prles nancial assets and liabilities. Surplus undsare generally nly invested in instruments that are tradeable in

highly liquid markets. In additin, a three year recast liquid

assets, cash fws and balance sheet is reviewed by the Bard

n a semi-annual basis as part the Capital Management

Review t ensure there is sucient liquidity within the Grup.

The repayment the existing acility $45 millin (reer t

Nte 27) is due n 31 July 2011.

The $25 millin unutilised bank acility may be drawn at any time

at the discretin the cnslidated entity. The cnslidated

entity’s bank acilities are subject t annual review and

management intends t renance the existing acility r a urther

perid ater the due date.

Maturities o inancial liabilities

The tables belw shw the maturity prles the nancial

liabilities and grss settled derivative nancial instruments r

the cnslidated entity. These have been calculated using the

cntractual undiscunted cash fws.

c) Market risk

The cnslidated entity is subject t the llwing market risks:

(i) Currency risk

The expsure t currency risk, as dened in AASB 7 Financial Instruments: Disclosures, arises when nancial instruments are

denminated in a currency that is nt the unctinal currency

the entity and are a mnetary nature. Hence the gains/(lsses)

arising rm the translatin the cntrlled entities’ nancial

statements int Australian dllars are nt cnsidered in this nte.

A signicant prprtin the mnetary nancial instruments held

by the cnslidated entity, being liquid assets, receivables, lans

receivable, interest-bearing liabilities and payables, interest rate

swaps, are denminated in Australian dllars. Hence fuctuatins

30 June 2010 30 June 2009Less than

1 year1 to 5years

More than5 years

TotalLess than

1 year1 to 5years

More than5 years

Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Consolidated

Liabilities

Trade and ther payables 40,661 6,206 - 46,867 35,442 1,819 - 37,261

Interest bearing liabilities - 45,000 - 45,000 - 45,000 - 45,000

Structured prducts – interestbearing liabilities

24,818 164,807 - 189,625 107,683 84,590 126,475 318,748

65,479 216,013 - 281,492 143,125 131,409 126,475 401,009

Derivatives

Net settled – interest rate swaps 227 812 - 1,039 337 1,347 259 1,943

Grss settled – ther derivatives

– utlw 663 - - 663 2,469 - - 2,469

– (inlw) (663) - - (663) (2,469) - - (2,469)

227 812 - 1,039 337 1,347 259 1,943



in exchange rates d nt materially impact the prt/(lss) r the

year r sharehlders’ equity.

Investments held in listed securities and unlisted unit trusts

including incubatin unds are a nn-mnetary nature and

therere are nt expsed t currency risk as dened in AASB 7Financial Instruments: Disclosures. The currency risk relating t

nn-mnetary assets and liabilities is a cmpnent price risk

and arises as the value the securities denminated in ther

currencies fuctuates with changes in exchange rates.

(ii) Interest rate risk

Interest rate risk is the risk that the air value r uture cash

fws a nancial instrument will fuctuate because changes

in market interest rates. The cnslidated entity’s expsure t

interest rate risk arises predminantly n investr lans granted

under the PPI structured prduct ering.

PPI structured prduct lans bear interest rates which are eitherxed r the term the prduct (7 years), xed annually r variable.

The cnslidated entity has entered int xed and variable rate

banking acilities in rder t nance lans prvided t investrs as

a result expsure t interest rate risk arising rm:

(a) xed rate assets being nanced with fating rate

liabilities(b) maturity r duratin mismatches.

In rder t manage the interest rate risk relating t PPI structured

prducts, it is the cnslidated entity’s plicy t hedge at least

95 per cent its lan expsure by entering int fating-t-xed

interest rate swaps where the banking acilities have a variable

interest rate. The hedging interest rate expsure is managed by

Grup Finance and is reprted t the Audit Risk and Cmpliance

Cmmittee n a hal-yearly basis.

The cnslidated entity’s expsure t interest rate risk r the

nancial assets and liabilities is set ut as llws:

Floatinginterest rate

Fixed interest rate maturing in Non-interestbearing

Total

6 months or less 6-12 months 4-7 years

Note $’000 $’000 $’000 $’000 $’000 $’000

At 30 June 2010

Financial assets

Cash assets 12 187,239 250 50 - - 187,539

Receivables 13 7,165 - - - 83,326 90,491

other inancial assets 14 60 162 - - 49,827 50,049

Structured prducts – lans receivable

– current

29 26,157 - - - - 26,157

Structured prducts – lans receivable– nn-current

29 20,489 - 65,457 76,729 - 162,675

241,110 412 65,507 76,729 133,153 516,911

Financial liabilities

Payables 20 - - - - 46,867 46,867

Interest-bearing liabilities 22 45,000 - - - - 45,000

Structured prducts – interest-bearingliabilities – current

29 24,818 - - - - 24,818

Structured prducts – interest-bearingliabilities – nn-current

29 80,729 - 17,150 66,928 - 164,807

Eect interest rate swaps (50,815) - 43,600 7,215 - -

99,732 - 60,750 74,143 46,867 281,492

At 30 June 2009

Financial assets

Cash assets 12 146,138 - - - - 146,138

Receivables 13 6,575 - - - 75,773 82,348

other inancial assets 14 60 40 - - 36,709 36,809

Structured prducts – lans receivable– current

29 108,935 - - - - 108,935

Structured prducts – lans receivable– nn-current

29 13,400 - 101,417 95,899 - 210,716

275,108 40 101,417 95,899 112,482 584,946


Payables 20 - - - - 37,261 37,261

Interest-bearing liabilities 22 45,000 - - - - 45,000

Structured prducts – payable tinvestrs

29 107,683 - - - - 107,683

Structured prducts – interest-bearingliabilities

29 107,691 - 29,650 73,724 - 211,065

Eect interest rate swaps (61,915) - 54,500 7,415 - -

198,459 - 84,150 81,139 37,261 401,009



Note 28. Financial risk management (continued)

c) Market risk (continued)

(ii) Interest rate risk (continued)

The table belw demnstrates the impact a 1 per cent change

in interest rates, with all ther variables held cnstant, n the

prt ater tax and equity the cnslidated entity.

30 June 2010 30 June 2009

Impact onproit ater

tax

Impact onequity

Impact onproit ater

tax

Impact onequity

$’000 $’000 $’000 $’000

Consolidated

Change in variable

+ 1 per cent 1,016 1,758 784 1,689

- 1 per cent (1,016) (1,768) (784) (1,698)

The impact n prt ater tax r the year wuld be mainly asa result an increase/(decrease) in interest revenue earned

n cash and cash equivalents. The impact n equity wuld

be mainly the result an increase/(decrease) in the air value

the cash fw hedges assciated with variable interest rate

brrwings.

(iii) Market risks arising rom Funds Under Management and

Funds Under Advice

The cnslidated entity’s revenue is signicantly dependent n

Funds Under Management and Funds Under Advice which are

infuenced by equity market mvements. Management calculates

the expected impact n revenue r each 1 per cent mvement in

the All ords. Based n the level the All ords at the end 30 June 2010 (4,325), a 1 per cent mvement in the market

changes annualised revenue by apprximately $2.0m t $2.5m.

It is wrth nting this mvement is nt linear t the verall value

the market. This means that as the market reaches higher r

lwer levels, a 1 per cent mvement may have a larger r smaller

eect n revenue as FUM and FUA are cmprised bth equity

market and nn-equity market-sensitive asset classes.

(iv) Market risks arising rom incubation unds

The cnslidated entity is expsed t equity price risk n

investments held by its incubatin unds. The unds may als be

expsed, t a small extent, t the ther risks which infuence the

value thse shares r units (including reign exchange ratesand interest rates).

Market risk in the incubatin unds is limited by a predetermined

seed capital unding pl which has been allcated based n the

cnslidated entity’s balance sheet. The Investment Cmmittee

is respnsible r determining the size the pl and apprving

new incubatin und strategies. They als ensure management

has apprpriate prcesses and systems in place r managing

investment risk r each und. The unds’ specialist asset

managers aim t manage the impact price risks thrugh the use

cnsistent and careully cnsidered investment guidelines. Risk

management techniques are used in the selectin investments,

including derivatives, which are nly acquired i they meet speciedinvestment criteria. Daily mnitring trade restrictins and

derivative expsure against limits is undertaken with any breach

these restrictins reprted t the Chie Risk ocer.

These unds may be party t derivative nancial instruments in

the nrmal curse business in rder t hedge expsure t

fuctuatins in reign exchange rates, interest rates and equity

indices in accrdance with the unds’ investment guidelines.

The impact n the cnslidated prt ater tax a ptentialchange in the returns the unds in which the cnslidated

entity invested at year end is nt material. The ptential change

has been determined using histrical analysis and management’s

assessment an apprpriate rate return. The analysis is

based n the assumptin that the returns n asset classes have

mved, with all ther variables held cnstant and that the relevant

change ccurred as at the reprting date. Hwever, actual

mvements in the risk may be greater r less than anticipated

due t a number actrs, including unusually large market

shcks resulting rm changes in the perrmance ecnmies,

markets and securities in which the unds invest. As a result,

histric variatins in risk variables are nt a denitive indicatr

uture variatins in the risk variables.

The incubatin unds may be expsed t currency risk and

interest rate risk. Their investment managers may enter int

derivative cntracts (such as rwards, swaps, ptins and

utures) thrugh apprved cunterparties t minimise risk.

Hwever, the use these cntracts must be cnsistent with the

investment strategy and restrictins each incubatin und, and

agreed acceptable level risk. These unds are als expsed

t interest rate risk n cash hldings. Interest incme rm cash

hldings is earned at variable interest rates and investments in

cash hldings are at call.

(v) Market risks arising rom the Exact Market Cash Funds The cnslidated entity is urther subject t market risks thrugh

the establishment the Exact Market Cash Fund (EMCF). The

und was established with the purpse prviding an exact

return utilising the UBS Bank Bill Index (the benchmark index) t

investrs. The impact the EMCF n the cnslidated entity’s

nancial results is dependent n the perrmance the und

relative t the benchmark.

The risk management apprach t and expsures arising rm

the EMCF are disclsed in Nte 29.

d) Capital management

A Capital Management Review is carried ut n a semi-annualbasis and is submitted t the Bard r review and apprval.

The capital management plicy ensures that the level nancial

cnservatism is apprpriate r the Cmpany’s businesses

including acting as custdian and manager clients’ assets and

peratin as a trustee cmpany. This plicy als aims t prvide

business stability and accmmdate the grwth needs the

cnslidated entity. This plicy cmprises three parts:

(i) Dividend Policy

Dividends paid t sharehlders are t be in the range

80-100 per cent the cnslidated entity’s net prt ater

tax attributable t members the Cmpany, which is in line

with the histrical dividend range paid t sharehlders.



(ii) Review o capital and distribution o excess capital

A review the cnslidated entity’s capital base is perrmed

at least semi-annually and excess capital that is surplus t

the Grup’s current requirements is ptentially returned t

sharehlders in the absence a strategically aligned, value

accretive investment pprtunity.

(iii) Gearing Policy

The cnslidated entity seeks t maintain a cnservative nancial

management prle. Its gearing plicy includes a maximum debt

/debt and ttal equity rati 30 per cent and EBITDA interest

cver mre than 10 times. Crprate debt (excluding prduct

debt) has been maintained at $45 millin thrughut the year

(2009: $45 millin), and the cnslidated entity is within its stated

gearing plicy at year end.

The gearing rati r the cnslidated entity as at 30 June 2010

is 11 per cent (2009: 13 per cent) and an EBITDA interest cver

rati 54 times (2009: 54 times) was achieved.

e) Fair value

As 1 July 2009, Perpetual has adpted the amendment

t AASB 7 Financial Instruments: Disclosures which requires

disclsure air value measurements by level the llwing air

value measurement hierarchy:

(i) quted prices (unadjusted) in active markets r identical

assets r liabilities (level 1)

(ii) inputs ther than quted prices included within level 1 that

are bservable r the asset r liability, either directly (as

prices) r indirectly (derived rm prices) (level 2)

(iii) inputs r the asset r liability that are nt based n

bservable market data (unbservable inputs) (level 3).

The llwing tables present the cnslidated entity’s assets and

liabilities measured and recgnised at air value at 30 June 2010.

Cmparative inrmatin has nt been prvided as permitted by

the transitinal prvisins the new standard.

Consolidated

Level 1 Level 2 Level 3 Total

$’000 $’000 $’000 $’000

At 30 June 2010Financial assets

Available-r-sale listedequity securities 36,030 - - 36,030

Available-r-saleunlisted unit trusts - 13,538 - 13,538

Derivative inancialinstruments - 11 - 11

Structured prducts -EMCF assets1 - 1,154,517 - 1,154,517

36,030 1,168,066 - 1,204,096


Derivative inancialinstruments - 662 - 662

Deerred acquisitincnsideratin - - 11,819 11,819

- 662 11,819 12,481

1 The EMCF liability is nt included as it is accunted r at amrtised cst.

2010 Deerredacquisition

consideration

$'000

Consolidated

opening balance 2,440

Acquisitins thrugh business cmbinatins 8,583

Accrual interest 796

Closing balance 11,819

The air value nancial instruments traded in active markets

(such as publicly traded derivatives, and trading and available-r-

sale securities) is based n quted market prices at the reprting

date. The quted market price used r nancial assets held by

the cnslidated entity is the current bid price. Marketable shares

included in other nancial assets are traded in an rganised

nancial market and their air value is the current quted market

bid price r an asset. The carrying amunts bank term

depsits and receivables apprximate air value. The air value

investments in unlisted shares in ther crpratins is

determined by reerence t the underlying net assets and an

assessment uture maintainable earnings and cash fws

the respective crpratins.

Derivative cntracts classied as held r trading are air valued

by cmparing the cntracted rate t the current market rate r

a cntract with the same remaining perid t maturity.

The air value nancial instruments that are nt traded in

an active market (r example, ver-the-cunter derivatives) is

determined using valuatin techniques. The air value interestrate swaps is calculated as the present value the estimated

uture cash fws. The air value rward exchange cntracts is

determined using rward exchange market rates at the reprting

date. The estimates air value where valuatin techniques are

applied are subjective and invlve the exercise judgement.

Changing ne r mre the assumptins applied in valuatin

techniques t reasnably pssible alternative assumptins may

impact n the amunts disclsed.

The cnslidated entity’s nancial assets and liabilities included

in current assets and liabilities in the balance sheet are carried

at amunts in accrdance with Ntes 12, 13, 14, 20 and 29. The

carrying amunt nancial assets and nancial liabilities, lessany impairment, apprximates their air value, except r thse

utlined in the table belw.

2010 2009

Carryingamount

Fairvalue

Carryingamount

Fairvalue

$’000 $’000 $’000 $’000

Structured prducts –lans receivable(nn-current) 162,675 159,318 210,716 200,452

Structured prducts –interest bearing liabilities(nn-current) 164,807 154,309 211,065 202,473



Note 29. Structured products assets

and liabilities

a. Exact Market Cash Funds

Consolidated

2010 2009

$'000 $'000

Current assets

Exact Market Cash Fund 1 693,243 1,086,011

Exact Market Cash Fund 2 497,823 409,779

1,191,066 1,495,790

Current liabilities

Exact Market Cash Fund 1 695,129 1,089,263

Exact Market Cash Fund 2 495,213 408,991

1,190,342 1,498,254

The Exact Market Cash Funds current asset balances refect theair value the net assets held by the unds. The current liabilities

balances represent the cnslidated entity’s bligatin t the

unds investrs under the swap agreements and refect the net

assets the unds r unit pricing purpses.

The Exact Market Cash Fund 1 (EMCF1) was established during

the nancial year ended 30 June 2005 with the purpse

prviding an exact return that matched the UBS Bank Bill rate

(the benchmark index), r a variant theren, t investrs. The

und’s ability t pay the benchmark return t the investrs is

guaranteed by the cnslidated entity. The Natinal Australia

Bank has prvided the EMCF1 prduct with a guarantee t the

value $20 millin in 2010 (2009: $22.5 millin) t be called upnin the event that the cnslidated entity is unable t meet its

bligatins. Due t the guaranteed benchmark return t investrs,

the cnslidated entity is expsed t the risk that the return

the EMCF1 diers rm that the benchmark. The return the

EMCF1 is aected by risks t the underlying investments in the

EMCF1 prtli, which are market, liquidity, and credit risks.

In March 2009, the cnslidated entity changed the swap

agreement valuatin methdlgy between the und and the

cnslidated entity. The underlying investments are nw valued

n a hld t maturity basis r unit pricing purpses, which is

cnsistent with the way in which Perpetual nw manages the

prtli. The underlying assets were valued at their air valueat the date change, which r many assets was at a discunt

t their maturity value. The discunt t maturity value will be

amrtised ver the remaining term the assets. The change in

valuatin methdlgy will nt aect the investment returns t

investrs in the EMCF1.

The Exact Market Cash Fund 2 (EMCF2) was established in

July 2008 and aims t prvide an exact return that matches the

benchmark index t investrs in the und. It has a similar structure

t EMCF1, but in additin, there are specic rules that gvern

the withdrawal unds. EMCF2 invests in debt securities issued

by parties r securities with a minimum credit rating ‘BBB-’

by Standard & Pr’s r equivalent rating agency at the time

purchase. The investments held by EMCF2 are recrded at air

value within the und, and in the cnslidated entity’s nancial

statements. Natinal Australia Bank has prvided the und with a

guarantee t the value $6 millin (2009: $5 millin) t be called

upn in the event that Perpetual des nt meet its bligatins t

the und under the swap agreement

The EMCF1 prduct has been assigned a ‘AA’ und credit

quality rating by Standard & Pr’s and invests predminantly inPerpetual’s Credit Enhanced Cash Fund (AA) and Cash Alpha

Pl Fund the cnslidated entity. These unds cannt invest

in securities which have a Standard & Pr’s credit rating belw

‘BBB-’. They can invest in assets directly r indirectly by investing

in ther managed unds that have similar investment bjectives

and authrised investments. The underlying unds may invest in

a variety cash and debt securities, predminantly fating rate

securities, cash depsits and xed rate securities.

The EMCF2 prduct invests directly int a variety cash and

debt securities, predminantly fating rate securities, cash

depsits and xed rate securities with a minimum credit rating

band ‘BBB-’ by Standard & Pr’s r equivalent rating agencyat the time purchase.

EMCF1 and EMCF2 (EMCF) use pressinal investment

managers t manage the impact these risks by using prudent

investment guidelines and investment prcesses. The investment

manager explicitly targets lw vlatility and aims t achieve this

thrugh a quality-screening prcess that is designed t assess

the likelihd deault and dicult trading patterns during

perids rapid systematic risk reductin. There is a clearly

dened mandate r the inclusin sectrs and issuances.

In perids risk reductin, diversicatin may be narrwly

cused n cash and highly liquid investment-grade assets.

At times higher risk tlerance, apprpriate diversicatinshuld be expected.

Interest rate expsure is limited t +/- 90 days versus the

benchmark. The prtli is cnstructed with the gal having

a diversied prtli securities, while largely retaining the

lw-risk characteristics a cash investment.

Liquidity risk EMCF is managed by maintaining a level cash

r liquid investments in the prtli which are sucient t meet

a reasnable expectatin investr redemptins, distributins r

ther the und’s nancial bligatins. This is cmplemented by

a dynamic prtli management prcess that ensures liquidity

is increased when there is an expectatin a deteriratin in

market cnditins. Cash fw recasts are prepared r theunds, including the cnsideratin the maturity prle the

securities, interest and ther incme earned by the unds, and

prjected investr fws based n histrical trends and uture

expectatins.

Furthermre, the credit quality nancial assets is managed

by the EMCF using Standard & Pr’s rating categries, in

accrdance with the investment mandate the EMCF. The

EMCF’s expsure in each credit rating categry is mnitred n

a daily basis. This review prcess allws assessment ptential

lsses as a result risks and the undertaking crrective

actins. The investment managers have undertaken t restrict the

asset prtli the underlying unds t securities, depsits rbligatins that meet Standard & Pr’s ‘AA’ und credit quality

rating criteria.



The investment managers the underlying unds invested by

the EMCF enter int a variety derivative nancial instruments

such as credit deault swaps and reign exchange rwards

in the nrmal curse business in rder t mitigate credit risk

expsure, and t hedge fuctuatins in reign exchange rates.

Details the assets held by the underlying unds are set

ut belw:

AAA to AA-

A+ to A-

BBB+ toBBB-

Total

$’000 $’000 $’000 $’000

30 June 2010

Crprate bnds 234,236 167,492 61,990 463,718

Mrtgage andasset backedsecurities

537,385 5,011 9,831 552,227

Cash 183,375 - - 183,375

954,996 172,503 71,821 1,199,320

30 June 2009

Crprate bnds 225,389 143,858 50,666 419,913

Mrtgage and assetbacked securities

595,969 9,217 15,562 620,748

Cash 472,545 - - 472,545

1,293,903 153,075 66,228 1,513,206

The impact the EMCF n the cnslidated prt ater tax is

dependent n the calculatin the swap agreement between

the und and the cnslidated entity and the perrmance

the und relative t the benchmark. I the und’s perrmance

is belw the benchmark return, then the cnslidated entity

will be bliged t make payments t the und under the swap

agreement. Cnversely, i the und’s perrmance is higher

than the benchmark, then the und will make payments t the

cnslidated entity.

The table belw demnstrates the impact a 1 per cent

deviatin the und rm the benchmark return n the

cnslidated prt bere tax.

2010 2009

$'000 $'000

EMCF perrmance 1 per cent higher thanbenchmark

11,993 15,132

EMCF perrmance 1 per cent lwer thanbenchmark

(11,993) (15,132)

b. Perpetual Protected Investments

The Perpetual Prtected Investments structured prduct (the

PPI prduct) was established in the nancial year ended 30 June

2007 r the purpse prviding investrs the ability t select

investments rm a menu managed unds while prviding

capital prtectin at maturity via a cnstant prprtin prtli

insurance structure. The seven-year investment allws investrs

t brrw up t 100 per cent their riginal invested amunt

(and their rst year’s interest i the interest is pre-paid), subject t

a minimum lan $50,000.

Structured prducts – lans receivable at reprting date cnsists

the llwing:

Consolidated

2010 2009

$'000 $'000

Current

Structured prducts – receivable rm investrs 26,157 108,935

26,157 108,935

Non-current

Structured prducts – lans receivable 165,690 212,247

Less: lan establishment ees (380) (540)

165,310 211,707

Less: prvisin r credit lsses (2,635) (991)

162,675 210,716

Mvements in the prvisin r credit lssesare as llws:

Balance as at 1 July 991 -

Prvisin r credit lsses recgnised duringthe year

2,376 991

Unused amunts reversed (732) -

Balance as at 30 June 2,635 991

In June 2010, a number investrs in the PPI prduct advised

the Grup that they intended t repay all r sme their lans.

This gave rise t the reclassicatin t current assets and

liabilities in relatin t the PPI and crrespnding bank unding

acilities. Repayments received rm investrs will be applied treduce the bank unding acilities used t nance these lans.

Investment and interest lans made t investrs are unded

by xed and variable interest rate banking acilities. Ttal bank

acilities available and utilised under these nancial arrangements

as at 30 June 2010 were $189.6 millin (2009: $318.7 millin).

It is the cnslidated entity’s plicy t hedge variable rate acilities

rm expsure t fuctuating interest rates in accrdance with its

nancial risk management plicies. Accrdingly, the cnslidated

entity has entered int interest rate swap cntracts in rder t hedge

expsure t fuctuatins in interest rates under which it is bliged

t receive interest at variable rates and t pay interest at xed rates.

Details the cnslidated entity’s expsure t risks arising rmPerpetual Prtected Investments are set ut in Nte 28.

The cntracts are settled n a net basis. Fr the 1 year interest

rate swap, the xed rate payment is paid either annually in

advance r mnthly in arrears, and the fating rate payment is

received mnthly in arrears; r the 7 years interest rate swap, the

xed rate leg is paid annually in advance, and the fating rate leg

is received quarterly in arrears.

Interest rate swap cntracts entered int cver apprximately

97 per cent (2009: 94 per cent) the variable interest rate

banking acilities and are timed t expire as each lan alls due.

The xed interest rates these swaps range rm 4.74 per centt 7.37 per cent (2009: 3.12 per cent t 7.37 per cent) and the

banking acilities’ variable interest rates range rm 5.89 per cent

t 6.1 per cent (2009: 4.42 per cent t 4.5 per cent).



The interest rates under the xed interest banking acilities range

rm 5.24 per cent t 7.77 per cent (2009: 3.53 per cent t

7.77 per cent). There were $84.1 millin xed interest banking

acilities at 30 June 2010.

Interest rate swaps have been bth terminated and entered int inaccrdance with the Grup’s prduct interest rate risk plicy.

The air value interest rate swap cntracts utstanding as at

reprting date and perid expiry are as llws:

2010 2009

Fair value Notionalamount

Fair value Notionalamount

$’000 $’000 $’000 $’000

Less than 1 year (11) 43,600 124 54,500

4-7 years (651) 7,215 (821) 7,415

(662) 50,815 (697) 61,915

The gain r lss rm re-measuring interest rate swap cntracts

at air value is deerred in ther cmprehensive incme in the

cash fw hedge reserve, t the extent that the hedge is eective,

and re-classied int net prt and lss when the hedged interest

expense is recgnised. The ineective prtin is recgnised in

net prt and lss immediately.

As at 30 June 2010, an unrealised lss $0.4 millin

(2009: lss $0.7 millin) was deerred in equity in the cash

fw hedge reserve.

Note 30. Commitments

Consolidated 2010 2009

$'000 $'000

Capital expenditure commitments

Cntracted but nt prvided r and payablewithin ne year 1,207 940

Capital expenditure cntracted but nt prvided r and payable

within ne year relates primarily t csts assciated with the

t ut Angel Place, Sydney and the csts assciated with

stware develpment.

Consolidated

2010 2009

$'000 $'000

Operating lease commitments

Future perating lease rentals nt prvided rin the inancial statements and payable:

Nt later than 1 year 15,761 13,405

Later than 1 year and nt later than 5 years 62,100 63,935

Later than 5 years 73,581 67,481

151,442 144,821

Note 31. Contingencies

The directrs are the pinin that the recgnitin liabilities

is nt required in respect these matters, as it is nt prbable

that uture sacrice ecnmic benets will be required and the

amunt is nt capable reliable measurement.

Consolidated

2010 2009

$'000 $'000

Contingent liabilities

A cntrlled entity has bank guarantees tthe avur the Australian Securities andInvestments Cmmissin in respect dealer'slicence arrangements.

20 20

Bank guarantees a cntrlled entity in avur the ASX Settlement and Transer CrpratinPty Limited with respect t nrmal tradingactivities.

1,000 1,000

Bank guarantees a cntrlled entity inavur varius lessrs r rental bndsn leased premises.

340 124

In the rdinary curse business, cntingent liabilities exist

in respect claims and ptential claims against entities in the

cnslidated entity. The cnslidated entity des nt cnsider

that the utcmes any such claims knwn t exist at the date

this reprt, either individually r in aggregate, are likely t have

a material eect n its peratins r nancial psitin.

Note 32. Related parties

Controlled entities and associates The cnslidated entity has a related party relatinship with its

Key Management Persnnel (see Nte 38).

Business transactins with related parties are n nrmal

cmmercial terms and cnditins n mre avurable than thse

available t ther parties unless therwise stated.

Fr a xed term rm 2 Nvember 2009 t 2 May 2010,

Meredith Brks prvided advisry and cnsulting services

t Perpetual Investment’s Glbal Equities business. In

accrdance with the cnsultancy agreement, Ms Brks

received $197,000 r prviding thse services. This cash

payment is in additin t the ees Ms Brks received in hercapacity as a nn-executive directr.



Note 33. Controlled entities

Beneicial interest Country

o

incorporation

2010 2009

Name o company % %

Perpetual Limited

Controlled Entities1

Australian Trustees Limited 100 100 Australia

Commonwealth Trustees Pty Limited2 100 100 Australia

Financial Pursuit Pty Limited 100 100 Australia

Fordham Business Advisors Pty Limited 100 - Australia

Grosvener Financial Services Pty Limited 100 - Australia

Investor Marketplace Limited 100 100 Australia

Perpetual Assets Pty Limited2 100 100 Australia

Perpetual Australia Pty Limited 100 100 Australia

Perpetual Investment Management Limited 100 100 Australia

Perpetual Loan Company Limited 100 100 Australia

Perpetual Loan Company No. 2 Limited 100 100 Australia

Perpetual Mortgage Services Pty Limited 100 100 Australia

Perpetual Nominees Limited 100 100 Australia

Perpetual Services Pty Limited2 100 100 Australia

Perpetual Trust Services Limited 100 100 Australia

Perpetual Trustee Company (Canberra) Limited 100 100 Australia

Perpetual Trustee Company Limited 100 100 Australia

Perpetual Trustees Consolidated Limited 100 100 Australia

Perpetual Trustees Queensland Limited 100 100 Australia

Perpetual Trustees SA Limited 100 100 Australia

Perpetual Trustees Victoria Limited 100 100 Australia

Perpetual Trustees WA Limited 100 100 AustraliaPI Investment Management Limited 100 100 Ireland

Queensland Trustees Pty Limited 100 100 Australia

smartsuper Pty Limited 100 100 Australia

Perpetual Legal Services Pty Limited 100 100 Australia

Perpetual Concentrated International Share Fund 100 100 Australia

Perpetual Resource Fund 92 99 Australia

Perpetual Wholesale Geared International Share Fund 92 46 Australia

Perpetual Asia Pool Fund 100 100 Australia

Perpetual Equity Imputation Portolio 100 100 Australia

Perpetual Capital Accumulation Portolio 100 100 Australia

Global equities UCITS Fund 100 - Australia

Perpetual Pure Value 2 Fund 100 - AustraliaExact Market Cash Fund 1 100 100 Australia

Exact Market Cash Fund 2 100 100 Australia

Entities under the control o Australian Trustees Limited

Wilsn Dilwrth Partnership Pty Limited2 100 100 Australia

Entities under the control o Fordham Business Advisors Pty Limited

Frdham Investment Management Pty Limited 100 - Australia

Garnet Investment Management Pty Limited 100 - Australia

Garnet Superannuatin Pty Limited 100 - Australia

Transcript Pty Limited2 100 - Australia

Entities under the control o Grosvenor Financial Services Pty Limited

Grsvenr Tax and Accunting Pty Limited 100 - Australia

Entities under the control o Perpetual Assets Pty Limited

Perpetual Asset Management Limited 100 100 Australia



Beneicial interest Country

o

incorporation

2010 2009

Name o company % %

Entities under the control o Perpetual Asset Management Limited1

Perpetual Superannuatin Limited 100 100 Australia

Entities under the control o Perpetual Trustee Company Limited

Perpetual Crprate Trust Limited 100 100 Australia

Perpetual Custdians Limited 100 100 Australia

Perpetual Service Netwrk Pty Limited2 100 100 Australia

PT Limited 100 100 Australia

Entities under the control o Perpetual Trustees Consolidated Limited

Perpetual Nminees (Canberra) Limited 100 100 Australia

Perpetual Custdian Nminees Pty Limited2 100 100 Australia

Entities under the control o Perpetual Trustees Victoria Limited

Perpetual Executrs Nminees Limited 100 100 Australia

AXA GESP Exempt (Aust) Pty Limited3 - 51 Australia

AXA GESP Deerred (Aust) Pty Limited3 - 51 Australia

Entities under the contro l o Perpetual Trustees WA Limited

Terrace Guardians Limited 100 100 Austr

Entities under the control o PT Limited1

Perpetrust Nminees Pty Limited2 100 100 Australia

Entities under the control o Wilson Dilworth Partnership Pty Limited1

Wilsn Dilwrth Limited 100 100 Australia

1 Entities in bld are directly wned by Perpetual Limited with the exceptin Perpetual Asset Management Limited, P.T. Limited and Wilsn Dilwrth PartnershipPty Limited which are wned by Perpetual subsidiaries.

2 A small prprietary cmpany as dened by the Corporations Act 2001 and is nt required t be audited r statutry purpses.

3 AXA GESP Exempt (Aust) Pty Limited and AXA GESP Deerred (Aust) Pty Limited were sld by Perpetual Trustees Victria Limited n 26 March 2010.

Note 33. Controlled entities (continued)



Note 34. Parent entity disclosures

Company

2010 2009

$'000 $'000

As at, and thrughut, the inancial year ending 30 June 2010 the parent entity the Grup was Perpetual Limited.

Result o the parent entity

Prit r the perid 56,296 80,748

other cmprehensive incme/(expense) 4,478 (8,279)

Ttal cmprehensive incme r the perid 60,774 72,469

Financial position o the parent entity at year end

Current assets1 154,815 132,193

Ttal assets 576,524 481,877

Current liabilities1 155,157 103,376

Ttal liabilities 190,121 128,610

Total equity o the parent entity comprising

Share capital 236,724 204,520

Reserves 50,509 39,447

Retained earnings 99,170 109,300

Ttal equity 386,403 353,267

1 Current liabilities exceed current assets by $342,000 as at 30 June 2010 which is primarily due t a net intercmpany payable t cntrlled entities $29,605,000. This will nt aect the parent entity’s ability t pay its debts as and when they becme due and payable. Ttal assets the parent entity exceedttal liabilities by $386,403,000.

Company

2010 2009

$'000 $'000

Parent entity contingencies

The directrs are the pinin that prvisins are nt required in respect these matters, as it is nt prbablethat a uture sacriice ecnmic beneits will be required r the amunt is nt capable reliable measurement.

Uncalled capital the cntrlled entities 9,893 10,903

In the rdinary curse business, cntingent liabilities exist in respect claims and ptential claims against theparent entity. The parent entity des nt cnsider that the utcme any such claims knwn t exist at the date this reprt, either individually r in aggregate, are likely t have a material eect n its peratins r inancialpsitin.

Capital expenditure commitments

Cntracted but nt prvided r and payable within ne year 1,207 940

Capital expenditure cntracted but nt prvided r and payable within ne year relates primarily t cstsassciated with the it ut Angel Place, Sydney and the csts assciated with stware develpment.

Operating lease commitmentsFuture perating lease rentals nt prvided r in the inancial statements and payable:

Nt later than 1 year 10,817 10,324

Later than 1 year and nt later than 5 years 55,340 55,075

Later than 5 years 53,946 66,897

120,103 132,296

operating leases are predminantly related t premises.

Parent entity guarantees

The Cmpany’s plicy is t prvide nancial guarantees nly t whlly-wned subsidiaries and has prvided nancial guarantees in

respect :

▪ Guarantee t secure a $70,000,000 bank acility ($45,000,000 is utilised) a cntrlled entity amunting t $70,000,000 (2009:

$45,000,000).

▪ Guarantees t secure lending assciated with structured prducts amunting t $11,371,000 (2009: $16,122,000).

▪ N liability was recgnised by the Cmpany in relatin t these guarantees as the air value these guarantees is cnsidered t be

immaterial. The Cmpany des nt expect the nancial guarantees t be called upn.



Note 35. Notes to the Cash Flow Statement

Consolidated

2010 2009

$'000 $'000

Cash lows rom operating activities

Prit r the year 90,506 37,749

Add/(less) items classiied as investing/inancing activities:

(Prit)/lss n sale investments (3,913) 6,673

Reinvestment dividends and unit distributins (512) (1,962)

Wrking capital acquired rm business cmbinatins 5,724 1,000

Leave liabilities acquired rm business cmbinatins (903) (80)

Deerred acquisitin cnsideratin (8,583) (2,439)

Deerred tax recgnised n intangibles acquired (4,543) -

Share lss/(prit) equity accunted investees, net incme tax 16 (111)

Tax paid n the sale investments (784) (1,657)

Add/(less) non-cash items:

Lss n sale prperty, plant and equipment 78 470

Transer rm cash lw hedge reserve t prit and lss - (14)

Depreciatin and amrtisatin expense 14,857 13,163

Equity remuneratin expense 26,755 25,930

Transer t reign currency translatin reserve (2,856) 197

Transer t available-r-sale reserve (1,125) (1,725)

Prit ater tax attributable t nn-cntrlling interests 216 58

Impairment available-r-sale securities 7,085 1,065

Net cash prvided by perating activities bere change in assets and liabilities 122,018 78,317

Change in assets and liabilities during the inancial year:

(Increase)/decrease in receivables (8,143) 6,155

Decrease/(increase) in net structured prducts assets 2,051 (812)

Decrease in derivative assets 134 15,358

(Decrease)/increase in derivative liabilities (159) 586

Increase/(decrease) in payables 9,606 (12,255)

Decrease/(increase) in prepayments 3,515 (4,039)

Increase/(decrease) in emplyee beneits 7,107 (7,580)

(Decrease)/increase in prvisins (2,084) 7,354

Increase/(decrease) in current tax liabilities 16,586 (25,258)

Increase in deerred tax assets (2,838) (1,517)

Increase in deerred tax liabilities 5,061 2,817

(Decrease)/increase in cash lw hedge reserve (301) 3,599

Net cash provided by operating activities 152,553 62,725

Note 36. Business combinations(i) Grosvenor Financial Services Pty Ltd

on 24 September 2009 the Cmpany acquired 100 per cent

the issued share capital Grsvenr Financial Services Pty Ltd,

which specialises in prviding nancial advice and services t

medical, dental and legal pressinals. The acquired entity is

based in the Sydney CBD.

The acquisitin Grsvenr is part the cnslidated entity’s

strategy t expand its private wealth business by acquiring

cmplementary businesses specialising in the high net wrth

segment the market.

The acquired business cntributed revenue $4.6 millin andnet lss ater tax $0.8 millin t the cnslidated entity r

the perid rm 24 September 2009 t 30 June 2010. I this

acquisitin had ccurred n 1 July 2009, the revenue and net

lss wuld have been $5.8 millin and $1.0 millin respectively.

The llwing summarises the majr classes cnsideratin

transerred, and the recgnised amunts assets acquired and

liabilities assumed at the acquisitin date:

Consideration transerred

$'000

Cash cnsideratin 8,875

Equity cnsideratin 10,569

Cntingent cnsideratin 682

Total consideration 20,126

The air value the rdinary shares issued (283,950) was based

n the listed share price the Cmpany at 24 September 2009

$37.22 per share.



Contingent consideration

The Cmpany has agreed t pay the selling stakehlder

additinal cash cnsideratin i the acquiree exceeds certain

pre-determined revenue hurdles. The Cmpany has included

$0.7 millin as cntingent cnsideratin related t the additinal

cnsideratin, which represents its air value at the acquisitin

date. The air value the cntingent cnsideratin was

calculated by applying the incme apprach using the expected

cntingent cnsideratin and a discunt rate 15 per cent.

Subsequent t the date acquisitin, the balance cntingent

cnsideratin has increased by $0.1 millin, representing the

unwinding the discunt in the perid since acquisitin.

Identiiable assets acquired and liabilities assumed

$'000

Intangible assets 6,041

Receivables 1,117

Cash and cash equivalents 48

Current tax assets 172

other current assets 418

Trade and ther payables (103)

Financial liabilities (100)

Current tax liabilities (497)

Deerred tax liabiliti es (1,813)

Prvisins (336)

Total identiiable net assets 4,947

All trade receivables are expected t be cllectible at the

acquisitin date.

Goodwill

$'000

Gdwill was recgnised as a result theacquisitin as llws:

Ttal cnsideratin transerred 20,126

Less value identiiable net assets (4,947)

Goodwill 15,179

The gdwill is attributable mainly t the skills and technical

talent the acquiree’s wrk rce, and the synergies expected t

be achieved rm integrating the cmpany int the cnslidatedentity. Nne the gdwill recgnised is expected t be

deductible r incme tax purpses.

Transactions separate rom the acquisition

The cnslidated entity incurred acquisitin-related csts

$0.3 millin relating t external legal ees and due diligence csts.

The legal ees and due diligence csts have been included in

administrative and general expenses in the cnslidated entity’s

Statement cmprehensive incme.

(ii) Fordham Business Advisors Pty Ltd

on 5 January 2010 the Cmpany acquired 100 per cent the

issued share capital Frdham Business Advisrs Pty Ltd,

which specialises in prviding nancial, investment and related

tax and accunting services r private business wners. The

acquired entity is based in the Melburne CBD.

The acquisitin Frdham is part the cnslidated entity’s

strategy t expand its private wealth business by acquiring

cmplementary businesses specialising in the high net wrth

segment the market.

The acquired business cntributed revenue $10.8 millin andnet prt ater tax $0.2 millin t the cnslidated entity r the

perid rm 5 January 2010 t 30 June 2010. I this acquisitin

had ccurred n 1 July 2009, the revenue and net prt wuld

have been $21.6 millin and $2.0 millin respectively.

The llwing summarises the majr classes cnsideratin

transerred, and the recgnised amunts assets acquired and

liabilities assumed at the acquisitin date:

Consideration transerred

$'000

Cash cnsideratin 16,900

Cash cnsideratin held in escrw 10,022

Cntingent cnsideratin 7,901

Total consideration 34,823

Contingent consideration

The Cmpany has agreed t pay the selling stakehlder

additinal cash cnsideratin i the acquiree exceeds certain

pre-determined grss prt and synergy hurdles. The Cmpany

has included $7.9 millin as cntingent cnsideratin related t

the additinal cnsideratin, which represents its air value at the

acquisitin date. The air value the cntingent cnsideratin

was calculated by applying the incme apprach using the

expected cntingent cnsideratin and a discunt rate 7.2

per cent. Subsequent t the date acquisitin, the balance

cntingent cnsideratin has increased by $0.2 millin,

representing the unwinding the discunt in the perid since

acquisitin.

Identiiable assets acquired and liabilities assumed

$'000

Intangible assets 9,100

Receivables 4,688

Cash and cash equivalents 300

other current assets 290

Prperty, plant & equipment 2,630

Trade and ther payables (424)

Deerred tax liabilities (2,730)

Prvisins (752)

Total identiiable net assets 13,102

All trade receivables are expected t be cllectible at the

acquisitin date.

Goodwill

$'000

Gdwill was recgnised as a result theacquisitin as llws:

Ttal cnsideratin transerred 34,823

Less value identiiable net assets (13,102)

Goodwill 21,721



The gdwill is attributable mainly t the skills and technical

talent the acquiree’s wrk rce, and the synergies expected t

be achieved rm integrating the cmpany int the cnslidated

entity. Nne the gdwill recgnised is expected t be

deductible r incme tax purpses.

Transactions separate rom the acquisition

The cnslidated entity incurred acquisitin-related csts $0.6

millin relating t external legal ees and due diligence csts.

The legal ees and due diligence csts have been included in

administrative and general expenses in the cnslidated entity’s

Statement cmprehensive incme.

Note 37. Subsequent events

The directrs are nt aware any ther event r circumstance

since the end the nancial perid nt therwise dealt with

in this reprt that has r may signicantly aect the peratins

the cnslidated entity, the results thse peratins rthe state aairs the cnslidated entity in subsequent

nancial years.

Note 38. Remuneration details provided as part

o the inancial report

The llwing disclsures required under AASB 124 are required

t be included in the Financial Reprt:

▪ Para 16 ‘Ttal Cmpensatin Key Management Persnnel’

▪ Para 25.7.3 ‘optins and Rights hldings’

▪ Para 25.7.4 ‘Equity Hldings and Transactins’

▪ Para 25.9 ‘Disclsure other Transactins’.

Total compensation o key management personnel

Consolidated

2010 2009

$'000 $'000

Shrt-Term 8,309,185 6,559,201

Pst-Emplyment 336,371 397,882

Terminatin beneits 742,219 585,000

Share-Based (444,168) 1,014,888

Total 8,943,607 8,556,971

Negative balances are a result adjustments made in the year t

refect the mst current expectatins vesting LTI grants with

nn-market cnditins hurdles.

Related party disclosures

Executives have nt entered int material cntracts with theCmpany r a member the cnslidated entity since the end

the previus nancial year and there were n material cntracts

invlving KMP’s interests existing at year end.



Option holdings o Executive Director and group executives

Name Grant date Exercise

periodExercise

price

$

Held at1 July 2009

Movement during the yearHeld at 30June 2010

Vested andexercisableat 30 June

2010


Proceedsreceived on

exerciseGranted Foreited Exercised

No. o options No. o options No. o options No. o options $ $Managing Director

D Deverall2 optins granted prir t 1 July 20083 295,508 - 28,144 - 267,364 978 - -

1 Jul 081 Jul 11 -1 Jul 14

42.73 57,390 - - - 57,390 - 8.97 -

29 Jun 091 Jul 12 -29 Jun 15

28.34 47,585 - - - 47,585 - 9.58 -

3 Jul 091 Jul 12 -29 Jun 15

28.34 - 5,911 - - 5,911 - 9.58 -

Aggregate value $56,627 $1,599,986 -


E Gonzalez 20 Jan 0930 Jun 13 -20 Jan 15

31.42 182,215 - 182,215 - - - 6.60 -

Aggregate value - $5,725,195 - -

J Nesbitt 9 Jun 09

30 Jun 12 -

30 Jun 14 28.34 58,939 - 58,939 - - - 9.06 -

Aggregate value - $1,670,331 -

E Wang 31 Mar 0831 Mar 11 -31 Mar 13

52.71 75,301 - 75,301 - - - 9.96 -

Aggregate value - $3,969,116 - -

optins granted t the Managing Directr and grup executives are granted rm the Executive optin Plan. R Brandweiner, R Burrws, C Dyle, C Green, I Hlyman,R MacIntyre, M Miller, M Pancin, P Ryan, S Singh and J Stewart d nt hld ptins ver Perpetual shares.

1 Equity instruments issued have been valued by PricewaterhuseCpers (PwC) using a Binmial optin Pricing mdel at grant date.2 Apprval r the issue ptins t D Deverall was btained under ASX Listing Rule 10.14 at Perpetual’s AGMs held n 19 octber 2004, 17 octber 2006,

30 octber 2007, 28 octber 2008 and 22 octber 2009.3 These ptins were granted n 19 octber 2004 (978), 1 July 2005 (28,144), 1 July 2006 (29,950) and 1 July 2007 (236,436). on 23 June 2010, the cmpany

annunced that Managing Directr, David Deverall, had given ntice his resignatin. As a result, n lng term incentives, including the ptins utstanding as at

30 June 2010, will vest as a result Mr Deverall’s resignatin and all unvested ptins will be reited n ceasing emplyment. The ptins utstanding as at30 June 2010 have a carrying value $Nil.

4 Percentage ttal remuneratin received as ptins r the Managing Directr and Grup Executives are: D Deverall (0%), E Gnzalez (0%), J Nesbitt (0%) and E Wang (0%).

Name Grant date Exercise

periodExercise

price

$

Held at1 July 2008

Movement during the yearHeld at 30June 2009

Vested andexercisableat 30 June

2009


Proceedsreceived on

exerciseGranted Foreited Exercised

No. o options No. o options No. o options No. o options $ $

Managing Director

D Deverall2 optins granted prir t 1 July 20073 65,912 - 6,840 - 59,072 978 - -

1 Jul 0730 Jun 10 -1 Jul 13

79.17 134,625 - - - 134,625 - 11.92 -

1 Jul 0730 Jun 12 -1 Jul 13

79.17 67,313 - - - 67,313 - 11.92 -

1 Jul 071 Jul 10 -1 Jul 17

79.17 34,498 - - - 34,498 - 11.92 -

1 Jul 081 Jul 11 -1 Jul 14

42.73 - 57,390 - - 57,390 - 8.97 -

29 Jun 09 1 Jul 12 -29 Jun 19

28.34 - 47,585 - - 47,585 - 9.58 -

Aggregate value $970,653 $322,027 -

Group Executives

E Gonzalez optins granted prir t 1 July 20074 33,334 - - 33,334 - - - -

20 Jan 0930 Jun 13 -20 Jan 15

31.42 - 182,215 - - 182,215 - 6.60 -

Aggregate value $1,202,619 - $409,342 $1,082,022

J Nesbitt 9 Jun 0930 Jun 12 -9 Jun 19

28.34 - 58,939 - - 58,939 - 9.06 -

Aggregate value $533,987 - - -

E Wang 31 Mar 0831 Mar 11 -31 Mar 13

52.71 75,301 - - - 75,301 - 9.96 -

Aggregate value - - - -

optins granted t the Managing Directr and grup executives are granted rm the Executive optin Plan. R Brandweiner, C Dyle, C Green, I Hlyman, M Pancin,and J Stewart d nt hld ptins ver Perpetual shares.1 Equity instruments issued have been valued by PricewaterhuseCpers using a Binmial optin Pricing mdel at grant date.2 Apprval r the issue ptins t D Deverall was btained under ASX Listing Rule 10.14 at Perpetual’s AGMs held n 19 octber 2004, 17 octber 2006,

30 octber 2007 and 28 octber 2008.3 These ptins were granted n 1 July 2004 (6,840; 100% reited in the current year), 19 octber 2004 (978), 1 July 2005 (28,144) and 1 July 2006 (29,950).4 These ptins were granted n 28 octber 2002 (33,334).



Note 38. Remuneration details provided as part o the inancial report (continued)

Unvested share holdings o Executive Director, group and other executives

Name Grant date Issue price Vesting dateHeld at

1 July 2009

Movement during the yearHeld at

30 June 2010

Fair value pershare ($) TSR

hurdle

Fair value pershare ($) non-

TSR hurdleGranted Foreited Vested

No. o shares No. o shares No. o shares

Executive Director


1 July 2008 42.73 1 July 2011 11,993 - - - 11,993 38.97 50.80

29 June 2009 28.34 29 June 2012 18,083 - - - 18,083 21.30 28.01

Aggregate value - $399,997 -

Group Executives

R Brandweiner Shares granted prir t 1 July 20083 2748 - 1,389 - 1,359

1 octber 2008 48.63 1 octber 2011 4,112 - - - 4,112 38.97 50.80

1 octber 2009 38.15 1 octber 2012 - 7,208 - - 7,208 29.02 37.93


R Burrows Shares granted prir t 1 July 20084 11,383 - - - 11,383

1 octber 2008 48.63 1 octber 2011 12,338 - - - 12,338 38.97 50.80

1 octber 2009 38.15 1 octber 2012 - 15,727 - - 15,727 29.02 37.93


C Doyle Shares granted prir t 1 July 20085 25,531 - - - 25,531

1 octber 2008 48.63 1 octber 2011 7,197 - - - 7,197 38.97 50.80

1 octber 2009 38.15 1 octber 2012 - 9,174 - - 9,174 29.02 37.93



1 octber 2008 48.63 1 octber 2011 4,112 - - - 4,112 38.97 50.80

1 octber 2009 38.15 1 octber 2012 - 6,553 - - 6,553 29.02 37.93

Aggregate value $249,997 - $199,938

I Holyman Shares granted prir t 1 July 20087 16,464 - 4,472 - 11,992

1 octber 2008 48.63 1 octber 2011 9,253 - - - 9,253 38.97 50.80

1 octber 2009 38.15 1 octber 2012 - 11,795 - - 11,795 29.02 37.93


M Miller Shares granted prir t 1 July 20088 3,308 - 1,677 - 1,631

1 octber 2008 48.63 1 octber 2011 2,467 - - - 2,467 38.97 50.80

1 octber 2009 38.15 1 octber 2012 - 8,519 - - 8,519 29.02 37.93


M Pancino Shares granted prir t 1 July 20089

4,159 - 1,865 - 2,294

1 octber 2008 48.63 1 octber 2011 5,140 - - - 5,140 38.97 50.80

1 octber 2009 38.15 1 octber 2012 - 6,553 - - 6,553 29.02 37.93


J Stewart Shares granted prir t 1 July 200810 584 - - - 584

1 octber 2008 48.63 1 octber 2011 3,084 - - - 3,084 38.97 50.80

1 octber 2009 38.15 1 octber 2012 - 3,931 - - 3,931 29.02 37.93


P Ryan Shares granted prir t 1 July 200811 2,946 - 1,451 - 1,495

1 octber 2008 48.63 1 octber 2011 2,287 - - - 2,287 38.97 50.80

1 octber 2009 38.15 1 octber 2012 - 3,538 - - 3,538 29.02 37.93





1 July 2009


30 June 2010


hurdle

Fair value pershare ($) non-

TSR hurdleGranted Foreited Vested


S Singh Shares granted prir t 1 July 200812 1,931 - 566 - 1,365

1 octber 2008 48.63 1 octber 2011 2,261 - - - 2,261 38.97 50.80

1 octber 2009 38.15 1 octber 2012 - 3,538 - - 3,538 29.02 37.93


R MacIntyre Shares granted prir t 1 July 200813 9,498 - 2.257 - 7,241

1 octber 2008 48.63 1 octber 2011 1,028 - - - 1,028 38.97 50.80

1 octber 2009 38.15 1 octber 2012 - 2,096 - - 2,096 29.02 37.93


Departed Executives

E Gonzalez Shares granted prir t 1 July 200814 26,622 - 26,622 - -

1 octber 2008 48.63 1 octber 2011 16,450 - 16,450 - - 38.97 50.80

20 January 2009 31.42 30 June 2013 39,783 - 39,783 - - N/A 31.42


J Nesbitt Shares granted prir t 1 July 200815 23,004 - 23,004 - -

1 octber 2008 48.63 1 octber 2011 16,450 - 16,450 - - 38.97 50.80

9 June 2009 29.74 30 June 2012 20,174 - 20,174 - - N/A 29.74

1 octber 2009 38.15 1 octber 2012 - 20,696 20,696 - - 29.02 37.93

Aggregate value $799,967 $3,849,818 -

E Wang Shares granted prir t 1 July 200816 21,832 - 21,832 - -

1 octber 2008 48.63 1 octber 2011 6,169 - 6,169 - - 38.97 50.80


1 Apprval r the issue shares t David Deverall was btained under ASX Listing Rule 10.14 at Perpetual’s AGM held n 19 octber 2004, 17 octber 2006,30 octber 2007, 28 octber 2008 and 22 octber 2009.

2 These shares were granted n 1 July 2005 (7,036; 100% reited in the current year), 1 July 2006 (7,130) and 1 July 2007 (44,366).

3 These shares were granted n 30 September 2005 (745; 100% reited in the current year), 2 octber 2006 (644; 100% reited in the current year) and1 octber 2007 (1,359).

4 These shares were granted n 31 March 2008 (11,383).

5 These shares were granted n 4 December 2006 (1,645), 1 octber 2010 (4,759) and 20 February 2008 (19,127).

6 These shares were granted n 1 octber 2007 (2,291) and 17 July 2006 (2,740; 100% vested in the current year).

7 These shares were granted n 30 September 2005 (4,472; 100% reited in the current year), 2 octber 2006 (5,873) and 1 octber 2007 (6,119).

8 These shares were granted n 30 September 2005 (641; 100% reited in the current year), 2 octber 2006 (1,036; 100% reited in the current year) and

1 octber 2007 (1,631).

9 These shares were granted n 14 August 2006 (255), 2 octber 2006 (1,865; 100% reited in the current year) and 1 octber 2007 (2,039).

10 These shares were granted n 10 September 2007 (584).

11 These shares were granted n 2 octber 2006 (1,451; 100% reited in the current year) and 1 octber 2007 (1,495).

12 These shares were granted n 3 July 2006 (139), 2 octber 2006 (566; 100% reited in the current year) and 1 octber 2007 (1,226).

13 These shares were granted n 30 September 2005 (876: 100% reited in the current year), 2 octber 2006 (1,381; 100% reited in the current year),1 octber 2007 (1,359) and 3 December 2007 (5,882).

14 These shares were granted n 30 September 2005 (7,453; 100% reited in the current year), 2 octber 2006 (8,291; 100% reited in the current year) and1 octber 2007 (10,878; 100% reited in the current year).

15 These shares were granted n 30 September 2005 (5,217; 100% reited in the current year), 2 octber 2006 (6,909; 100% reited in the current year) and

1 octber 2007 (10,878; 100% reited in the current year).

16 These shares were granted n 30 September 2005 (1,729; 100% reited in the current year), 2 octber 2006 (1,796; 100% reited in the current year),

1 octber 2007 (4,079; 100% reited in the current year) and 31 March 2008 (14,228; 100% reited in the current year).

Grants perrmance shares ater 30 June 2003 cntain 50% the shares with a perrmance hurdle linked t TSR and 50% the shares granted with a perrmancehurdle linked t EPS. Where applicable, the air value shares with a TSR perrmance hurdle are disclsed. The air value TSR-linked shares is calculated by PwCusing valuatin techniques which take int accunt the prbability vesting as refected in the air value at grant.

Unvested share holdings o Executive Director, group and other executives (continued)




Unvested share holdings o Managing Director, group and other executives (continued)


1 July 2008


30 June 2009


hurdle

Fair valueper share ($)

non-TSR hurdleGranted Foreited Vested


Managing Director


1 July 2007 79.17 1 July 2010 31,735 - - - 31,735 57.22 80.08

1 July 2007 79.17 30 June 2012 12,631 - - - 12,631 N/A 73.76

1 July 2008 42.73 1 July 2011 - 11,993 - - 11,993 38.97 50.80

29 June 2009 28.34 1 July 2012 - 18,083 - - 18,083 21.30 28.01

Aggregate value $1,024,933 $92,041 -

Group Executives

R Brandweiner Shares granted prir t 1 July 20073 1,500 - 111 - 1,389

1 octber 2007 73.54 1 octber 2010 1,359 - - - 1,359 57.22 80.08

1 octber 2008 48.63 1 octber 2011 - 4,112 - - 4,112 38.97 50.80


R Burrows 31 March 2008 52.71 31 March 2011 11,383 - - - 11,383 57.22 52.71

1 octber 2008 48.63 1 octber 2011 - 12,338 - - 12,338 38.97 50.80


C Doyle 4 December 2006 72.92 4 December 2009 1,645 - - - 1,645 52.13 72.92

1 octber 2007 73.54 1 octber 2010 4,759 - - - 4,759 57.22 80.08

20 February 2008 52.28 1 January 2011 19,127 - - - 19,127 N/A 52.28

1 octber 2008 48.63 1 octber 2011 - 7,197 - - 7,197 38.97 50.80


E Gonzalez Shares granted prir t 1 July 20074 15,744 - - - 15,744

1 octber 2007 73.54 1 octber 2010 10,878 - - - 10,878 57.22 80.08

1 octber 2008 48.63 1 octber 2011 - 16,450 - - 16,450 38.97 50.80

20 January 2009 31.42 30 June 2013 - 39,783 - - 39,783 N/A 31.42

Aggregate value $2,049,945 - -


1 octber 2007 73.54 1 octber 2010 2,291 - - - 2,291 57.22 80.08

1 octber 2008 48.63 1 octber 2011 - 4,112 - - 4,112 38.97 50.80

Aggregate value $199,967 - $150,026

I Holyman Shares granted prir t 1 July 20076 11,162 - 817 - 10,345

1 octber 2007 73.54 1 octber 2010 6,119 - - - 6,119 57.22 80.08

1 octber 2008 48.63 1 octber 2011 - 9,253 - - 9,253 38.97 50.80





1 July 2008


30 June 2009


hurdle

Fair valueper share ($)

non-TSR hurdleGranted Foreited Vested


J Nesbitt Shares granted prir t 1 July 20077 12,943 - 817 - 12,126

1 octber 2007 73.54 1 octber 2010 10,878 - - - 10,878 57.22 80.08

1 octber 2008 48.63 1 octber 2011 - 16,450 - - 16,450 38.97 50.80

9 June 2009 29.74 30 June 2012 - 20,174 - - 20,174 N/A 29.74

Aggregate value $1,399,938 $40,580 -

M Pancino Shares granted prir t 1 July 20078 2,120 - - - 2,120

1 octber 2007 73.54 1 octber 2010 2,039 - - - 2,039 57.22 80.08

1 octber 2008 48.63 1 octber 2011 - 5,140 - - 5,140 38.97 50.80


J Stewart 10 September2007

75.24 10 September2010

584 - - - 584 N/A 75.24

1 octber 2008 48.63 1 octber 2011 - 3,084 - - 3,084 38.97 50.80


E Wang Shares granted prir t 1 July 20079 4,006 - 481 - 3,525

1 octber 2007 73.54 1 octber 2010 4,079 - - - 4,079 57.22 80.08

31 March 2008 52.71 31 March 2011 14,228 - - - 14,228 N/A 52.71

1 octber 2008 48.63 1 octber 2011 - 6,169 - - 6,169 38.97 50.80



P Vernon Shares granted prir t 1 July 200710 8,557 - 8,557 - -

1 octber 2007 73.54 1 octber 2010 5,439 - 5,439 - - 57.22 80.08

Aggregate value - $992,953 -

1 Apprval r the issue shares t D Deverall was btained under ASX Listing Rule 10.14 at Perpetual ’s AGM held n 19 octber 2004, 17 octber 2006,30 octber 2007 and 28 octber 2008.

2 These shares were granted n 1 July 2004 (1,710; 100% reited in the current year), 19 octber 2004 (245; 100% reited in the current year), 1 July 2005 (7,036)and 1 July 2006 (7,130).

3 These shares were granted n 1 octber 2004 (111; 100% reited in the current year), 30 September 2005 (745) and 2 octber 2006 (644).4 These shares were granted n 30 September 2005 (7,453) and 2 octber 2006 (8,291).5 These shares were granted n 17 July 2006 (4,796; 43% vested in the current year).

6 These shares were granted n 1 octber 2004 (817; 100% reited in the current year), 30 September 2005 (4,472) and 2 octber 2006 (5,873).7 These shares were granted n 1 octber 2004 (817; 100% reited in the current year), 30 September 2005 (5,217) and 2 octber 2006 (6,909).8 These shares were granted n 14 August 2006 (255) and 2 octber 2006 (1,865).9 These shares were granted n 1 octber 2004 (481; 100% reited in the current year), 30 September 2005 (1,729) and 2 octber 2006 (1,796).10 These shares were granted n 1 octber 2004 (463; 100% reited in the current year), 30 September 2005 (2,981; 100% reited in the current year).

and 2 octber 2006 (5,113; 100% reited in the current year).

Shares granted t the Managing Directr and Grup Executives are granted rm the Executive Share Plan. Grants perrmance shares ater 30 June 2003 cntain50% the shares with a perrmance hurdle linked t TSR and 50% the shares granted with a perrmance hurdle linked t EPS. Where applicable, the air value shares with a TSR perrmance hurdle are disclsed. The air value TSR-linked shares is calculated by PwC using valuatin techniques which take int accunt theprbability vesting as refected in the air value at grant.

Unvested share holdings o Managing Director, group and other executives (continued)




Vested shareholdings o Managing Director, group and other executives

Name

Balance at 1 July 2009 LTI Shares vesting in the per iod Other changes dur ing the year Balance at 30 June 2010*

No. o shares

Managing Director

D Deverall 35,540 - - 35,540

Group Executives


R Burrows - - - -

C Doyle - - - -

C Green 2,056 2,740 - 4,796

I Holyman 2,736 - - 2,736

M Miller 234 - - 234

M Pancino - - - -

J Stewart - - - -

R MacIntyre 16,893 - - 16,893

P Ryan - - - -

S Singh - - - -


E Gonzalez 88,279 - (69,632) 18,647

J Nesbitt 7,417 - - 7,417

E Wang 600 - - 600

*r date departure r Grup Executives wh departed in the year.

other changes during the year represent shares acquired via bnus sacrice, cnversin ptins int shares and dispsal shares. Dispsals during the yearinclude E Gnzalez (69,632).

NameBalance at 1 July 2008 LTI Shares vesting in the per iod Other changes dur ing the year Balance at 30 June 2009*

No. o shares

Managing Director

D Deverall 35,540 - - 35,540

Group Executives


E Gonzalez 69,134 - 19,145 88,279

C Green - 2,056 - 2,056

I Holyman 2,736 - - 2,736

J Nesbitt 7,527 - (110) 7,417

E Wang 600 - - 600


P Vernon 1,580 - - 1,580

*r date departure r Grup Executives wh departed in the year.

other changes during the year represent shares acquired via bnus sacrice, cnversin ptins int shares and dispsal shares. Dispsals during the yearinclude E Gnzalez (14,189) and J Nesbitt (110).



Remuneration o Non-executive Directors

Directors’ individual shareholdings

Name

Balance at the start o the year,

or or directorsappointed in the year, the dateo appointment

Shares acquired via ee sacrifceduring the year Other changes during the year

Balance at the end o the year

or, or directors who retired in theyear, the date o retirement

Directors

R M Savage 9,380 - 229 9,609

P V Brasher1 - - 1,000 1,000

M J Brooks 5,500 - 253 5,753

P Bullock2 - - 1,000 1,000

E P McClintock 8,485 - 283 8,768

E Proust 3,147 - 98 3,245

P B Scott 2,047 - 93 2,140

P J Twyman 8,772 - (655) 8,107

1 Paul Brasher was appinted as a directr n 1 Nvember 2009.

2 Philip Bullck was appinted as a directr n 1 June 2010.

Prior year directors’ individual shareholdings

Name

Balance at the start o the year,or or directors

appointed in the year, the dateo appointment

Shares acquired via ee sacrifceduring the year1 Other changes during the year

Balance at the end o the yearor, or directors who retired in the

year, the date o retirement

Directors

R M Savage 7,246 2,134 - 9,380

M J Brooks 4,500 - 1,000 5,500

E P McClintock 6,810 1,675 - 8,485

E Proust 2,728 419 - 3,147

P B Scott 1,000 1,047 - 2,047

A Stevens2 1,500 - - 1,500

P J Twyman 5,677 2,095 1,000 8,772

1 Shares acquired r issued ur times thrughut the year.

2 Mr A Stevens jined Perpetual n 24 June 2008 and resigned n 3 February 2009.



Directors’ Declaration1 In the pinin the directrs Perpetual Limited

(the ‘Cmpany’):

a. the cnslidated nancial statements and ntes, and theRemuneratin reprt in the Directrs’ reprt, set ut n

pages 34 t 59, are in accrdance with the Corporations

Regulations 2001, including:

(i) giving a true and air view the Cnslidated Entity’s

nancial psitin as at 30 June 2010 and its

perrmance, r the nancial year ended n that date;

and

(ii) cmplying with Australian Accunting Standards

(including the Australian Accunting Interpretatins) and

the Corporations Regulations 2001;

b. the nancial reprt als cmplies with InternatinalFinancial Reprting Standards as disclsed in Nte 2(a);

c. there are reasnable grunds t believe that the

Cmpany will be able t pay its debts as and when they

becme due and payable.

2 The directrs have been given the declaratins required by

Sectin 295A the Corporations Regulations 2001 rm the

Chie Executive ocer and the Chie Financial ocer r the

nancial year ended 30 June 2010.

Signed in accrdance with a reslutin the directrs:

Dated at Sydney this 24th day August 2010.

Rbert Savage, AM David Deverall

Directr Directr



Independent auditor’s report to the members o Perpetual Limited

Report on the inancial report

We have audited the accmpanying nancial reprt the Grup

cmprising Perpetual Limited (the Cmpany) and the entitiesit cntrlled at the year’s end r rm time t time during the

nancial year, which cmprises the balance sheet as at 30 June

2010, and statement cmprehensive incme, statement

changes in equity and statement cash fws r the year ended

n that date, a summary signicant accunting plicies and

ther explanatry ntes 1 t 38 and the directrs’ declaratin.

Directors’ responsibility or the inancial report

The directrs the Cmpany are respnsible r the preparatin

and air presentatin the nancial reprt in accrdance with

Australian Accunting Standards (including the Australian

Accunting Interpretatins) and the Corporations Act 2001. This

respnsibility includes establishing and maintaining internalcntrl relevant t the preparatin and air presentatin the

nancial reprt that is ree rm material misstatement, whether

due t raud r errr; selecting and applying apprpriate

accunting plicies; and making accunting estimates that are

reasnable in the circumstances. In nte 2, the directrs als

state, in accrdance with Australian Accunting Standard AASB

101 Presentation of Financial Statements, that the nancial reprt,

cmprising the nancial statements and ntes, cmplies with

Internatinal Financial Reprting Standards.

Auditor’s responsibility

our respnsibility is t express an pinin n the nancial reprt

based n ur audit. We cnducted ur audit in accrdance with Australian Auditing Standards. These Auditing Standards require

that we cmply with relevant ethical requirements relating t

audit engagements and plan and perrm the audit t btain

reasnable assurance whether the nancial reprt is ree rm

material misstatement.

An audit invlves perrming prcedures t btain audit evidence

abut the amunts and disclsures in the nancial reprt.

The prcedures selected depend n the auditr’s judgement,

including the assessment the risks material misstatement

the nancial reprt, whether due t raud r errr. In making

thse risk assessments, the auditr cnsiders internal cntrl

relevant t the entity’s preparatin and air presentatin thenancial reprt in rder t design audit prcedures that are

apprpriate in the circumstances, but nt r the purpse

expressing an pinin n the eectiveness the entity’s internal

cntrl. An audit als includes evaluating the apprpriateness

accunting plicies used and the reasnableness accunting

estimates made by the directrs, as well as evaluating the verall

presentatin the nancial reprt.

We perrmed the prcedures t assess whether in all material

respects the nancial reprt presents airly, in accrdance with

the Corporations Act 2001 and Australian Accunting Standards

(including the Australian Accunting Interpretatins), a view which

is cnsistent with ur understanding the Grup’s nancialpsitin and its perrmance.

We believe that the audit evidence we have btained is sucient

and apprpriate t prvide a basis r ur audit pinin.

Independence

In cnducting ur audit, we have cmplied with the

independence requirements the Corporations Act 2001.

Auditor’s opinion

In ur pinin:

(a) the nancial reprt the Grup is in accrdance with the

Corporations Act 2001, including:

(i) giving a true and air view the Grup’s nancial psitin

as at 30 June 2010 and its perrmance r the year

ended n that date; and

(ii) cmplying with Australian Accunting Standards

(including the Australian Accunting Interpretatins) and

the Crpratins Regulatins 2001.

(b) the nancial reprt als cmplies with Internatinal Financial

Reprting Standards as disclsed in nte 2.

Report on the remuneration report

We have audited the Remuneratin Reprt included in pages 34

t 59 the directrs’ reprt r the year ended 30 June 2010.

The directrs the cmpany are respnsible r the preparatin

and presentatin the remuneratin reprt in accrdance with

Sectin 300A the Corporations Act 2001. our respnsibility is

t express an pinin n the remuneratin reprt, based n ur

audit cnducted in accrdance with auditing standards.

Auditor’s opinion

In ur pinin, the remuneratin reprt Perpetual Limited r

the year ended 30 June 2010, cmplies with Sectin 300A the

Corporations Act 2001.

KPMG

Andrew Yates

Partner

Sydney

24th August 2010



2010 Annual General Meeting

The 2010 Annual General Meeting the Cmpany will be

held in the Heritage Ballrm, Level 6, The Westin Sydney,

1 Martin Place, Sydney n Tuesday 26 octber 2010

cmmencing at 10:00 am.

Securities exchange listing

The rdinary shares Perpetual Limited are listed n the

Australian Securities Exchange under the ASX cde PPT, with

Sydney being the hme exchange. Details trading activity are

published in mst daily newspapers.

20 largest shareholders as at 31 July 2010

Number o Percentage o

Name ordinary shares issued capital

Queensland Trustees Pty Limited¹ 2,814,201 6.48%

HSBC Custdy Nminees (Australia) Limited¹ 2,211,749 5.09%

J P Mrgan Nminees Australia Limited¹ 1,583,903 3.65%

Natinal Nminees Limited¹ 1,268,387 2.92%

Australian Fundatin Investment Cmpany Limited 843,726 1.94%

Citicrp Nminees Pty Limited¹ 763,166 1.76%

Perpetual Trustee Cmpany Limited¹ 658,184 1.52%

Miltn Crpratin Limited 646,588 1.49%

RBC CEES Trustee Limited¹ 632,977 1.46%Washingtn H Sul Pattinsn & C Ltd 529,598 1.22%

UBS Wealth Management Australia Nminees Pty Ltd¹ 450,160 1.04%

Bnd Street Custdians Limited¹ 355,428 0.82%

Arg Investments Limited 350,880 0.81%

Cgent Nminees Pty Limited1 328,519 0.76%

ANZ Nminees Limited¹ 311,806 0.72%

Enbeear Pty Ltd 310,678 0.72%

RBC Dexia Investr Services Australia Nminees Pty Ltd¹ 284,366 0.65%

T Eustace 283,950 0.65%

Invia Custdian Pty Limited¹ 264,660 0.61%

Australian United Investment C. Limited 250,000 0.58%Total 15,142,926 34.89%

1 Held in capacity as executr, trustee r agent.

Substantial shareholders

Queensland Trustees Pty Limited is a substantial sharehlder

Perpetual Limited as at 31 July 2010.

Distribution schedule

o holdings

as at 31 July 2010

Number

o holders

Number

o shares

1 - 1,000 shares 23,115 8,483,188

1,001 - 5,000 shares 4,771 9,974,422

5,001 - 10,000 shares 451 3,236,002

10,001 - 100,000 shares 287 6,004,866

100,001 and ver shares 32 15,719,000

Total 28,656 43,417,478

Number sharehlders

with less than a marketable

parcel: 472 4,270

securities exchange and

investor inormation



Other inormation

Perpetual Limited, incrprated and dmiciled in Australia,

is a publicly listed cmpany limited by shares.

Voting rights

Under the Cmpany’s Cnstitutin, each member present

at a general meeting (whether in persn, by prxy, attrney

r crprate representative) is entitled:

▪ n a shw hands t ne vte; and

▪ n a pll t ne vte r each share held.

I a member is present in persn, any prxy that member

is nt entitled t vte.

Voting by proxy

Vting by prxy allws sharehlders t express their views n

the directin and management the ecnmic entity withut

attending a meeting in persn.

Sharehlders wh are unable t attend the 2010 Annual General

Meeting are encuraged t cmplete and return the prxy rm

that accmpanies the ntice meeting enclsed with this reprt.

On-market buy back

There is n current n-market buy back.

Final dividend

The nal dividend 105 cents per share will be paid n

28 September 2010 t sharehlders entitled t receive dividends

and registered n 7 September 2010 being the recrd date.

Enquiries

I yu have any questins abut yur sharehlding r matters

such as dividend payments, tax le numbers r change

address yu are invited t cntact the Cmpany’s share registry

ce belw, r visit their website at www.linkmarketservices.

cm.au r email [email protected]

Link Market Services Limited

Level 12

680 Gerge Street

Sydney NSW 2000

Australia

Lcked Bag A14

Sydney Suth NSW 1235

Australia

Perpetual Sharehlder Inrmatin Line

1300 732 806 r + 61 2 8280 7620

Fax + 61 2 9287 0303

Any ther enquiries which yu may have abut the Cmpany,

can be directed t the Cmpany’s registered ce r visit the

Cmpany’s website.

Principal registered oice

Level 12

123 Pitt Street

Sydney NSW 2000

Australia

Phne +61 2 9229 9000

Fax +61 2 8256 1461

Company Secretary

Janne Hawkins

www.perpetual.cm.au



contact a s ri ri of

Shareholder enquiriesI yu have any questins abut yur sharehlding

r matters such as dividend payments, tax le

numbers r change address please cntact

the Cmpany’s share registry ce r visit their

website www.linkmarketservices.cm.au r

email [email protected]

Link Market Services Limited

Level 12

680 Gerge StreetSydney NSW 2000

Australia

Lcked Bag A14

Sydney Suth NSW 1235

Australia

Perpetual Shareholder Inormation Line

Phne 1300 732 806 r +61 2 8280 7620

Fax +61 2 9287 0303

Fr any ther enquiries abut the Cmpany

please cntact the Cmpany’s registered cer visit ur website.

Principal registered oiceLevel 12

123 Pitt Street

Sydney NSW 2000

Australia

Phne +61 2 9229 9000

Fax +61 2 8256 1461

www.perpetual.cm.au

ABN 86 000 431 827

Perpetual’s 2010 Annual Reprt is printed n Splendrgel (cver and review)and Precisin (nancials) supplied by Spicers Paper. Splendrgel is an FSCMixed Surces Certied paper, which ensures that all pulp is derived rm

well-managed rests and cntrlled surces. It is elemental chlrine ree andis manuactured by an ISo 14001 certied mill. Precisin is PEFC Certied andmade rm elemental chlrine ree bleached pulp surced rm sustainablymanaged rests and nn-cntrversial surces. It is manuactured by an

ISo 14001 certied mill using renewable energy surces.

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