IOOF  | Annual Report 2012 Owing to recent retrospective changes in  Australian income tax regulations which  required that IOOF recognise a $63 million  deferred tax liability, the statutory profit  was significantly lower than the prior year.  This liability has not resulted in a cash  outflow for the group and will unwind  to profit in future periods in line with the  amortisation of the group’s intangible  assets. This entry has no impact on IOOF’s  dividend paying capacity. The key drivers affecting the underlying  financial performance for the financial  year ended 30 June 2012 were: decreased  revenues associated with decreases in the market value of the assets  underpinning IOOF’s Funds Under  Management, Administration, Advice and  Supervision (FUMAS) and net institutional  outflows in Funds Under Management.  This was partly offset by the increase in  funds under advice associated with the  DKN Financial Group acquisition. The uncertain economic environment  responsible for the market value declines  noted has also had an unfavourable  impact on other revenue lines, most  notably stockbroking where the sector’s  trade volumes generally remain low in comparison to the years preceding the global financial crisis.  IOOF constrained its costs to below  inflation with the exception of increasing  expenditure on its technology and brand to promote the long term interests  of its businesses. Independent and aligned financial advisers  are a key source of investment funds as  they provide a sales distribution network  for IOOF products. The number of advisers  supporting IOOF products, therefore,  influences the growth in FUMAS. Good investment performance attracts  funds. Individual fund performance is disclosed on the IOOF website at www.ioof.com.au The number of investors in IOOF products  affects the level of FUMAS and therefore  IOOF’s performance. Investments can  be placed into IOOF products through  superannuation funds, via independent  and aligned financial advisers or directly  with IOOF. Funds can be invested into  IOOF platforms or into external platforms  that include IOOF products. The largest contributor to the increase in FUMAS in 2012 was the acquisition of funds under advice associated with the DKN Financial Group. Generally, the performance of the markets in which  IOOF FUMAS is invested, in particular  equities, fixed interest and property, will influence financial performance. IOOF revenue will grow or reduce with  the positive or negative impact of market  valuations on average FUMAS for the  current reporting period relative to the  average FUMAS from the prior period. The major influences on the growth of FUMAS include: Total shareholder return (TSR) measures  the change in share value over a specified  period together with the return by way  of dividends received. IOOF’s TSR for the  year to 30 June 2012 was 20 per cent. TSR in the period from the acquisition of Australian Wealth Management on 30 April 2009 to 30 June 2012 is 73 per cent in total and 20 per cent on an annualised basis. Basic earnings per share decreased from 43.1 cents per share down to  8.4 cents per share. This is due to the  significant deferred tax liabilities raised in relation to intangible assets.  On a Diluted basis, earnings per share  were 8.3 cents per share compared to 42.9 cents per share for last year. On an underlying pre amortisation  earnings basis, where the impact  of certain non-operational and/or  accounting adjustments is removed, basic earnings per share were 41.6 cents per share compared to 48.4 cents per share for last year. This reflected a lower level of underlying earnings and a reasonably  stable weighted average number of issued shares. The balance of the franking account at 30 June 2012 of $42.7 million will  support the payment of fully franked  dividends as recommended by Directors. Franking credits Number of advisers Investment performance Number of investors Earnings per share Market performance  Total shareholder return Shareholder value Funds Under Management,  Administration, Advice and  Supervision (FUMAS) Understanding the data  behind our performance Shareholder value can be measured by: page 5