ARIADNE AUSTRALIA LIMITED
2020 Annual Report
Corporate Information
202 0 A N N U A L R E P O R T
Directors
Mr David Baffsky, AO
(Independent Non-Executive Chairman)
Mr Kevin Seymour, AM
(Non-Executive Deputy Chairman)
Mr Chris Barter
(Independent Non-Executive Director)
Mr John Murphy
(Independent Non-Executive Director)
Dr Gary Weiss, AM
(Executive Director)
Company Secretary
Mr Natt McMahon
Registered Office and Principal Place of Business
Level 27, 2 Chifley Square, Chifley Tower
Sydney NSW 2000
Telephone: (02) 8227 5500
Facsimile: (02) 8227 5511
Share Register
Computershare Investor Services Pty Ltd
Level 3, 60 Carrington Street,
Sydney NSW 2000
Telephone: 1300 850 505 or
+61 3 9415 4000
+61 3 9473 2500
Facsimile:
www.computershare.com.au
Bankers
ANZ Banking Group Limited
Auditors
Deloitte Touche Tohmatsu
Internet Address
www.ariadne.com.au
ABN
50 010 474 067
A R I A D N E A U S T R A L I A L I M I T E D
Contents
Chairman’s Letter
Executive Director’s Review
Directors’ Report
Auditor’s Independence Declaration
Financial Statements
Statement of Comprehensive Income
Balance Sheet
Statement of Changes in Equity
Statement of Cash Flows
Notes to Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
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ABN 50 010 474 067
This report covers the consolidated entity comprising Ariadne Australia Limited (“Ariadne”) and its controlled entities (“the Group”).
The Group’s functional and presentation currency is Australian dollars (AUD).
A R I A D N E A U S T R A L I A L I M I T E D
Chairman’s letter
Chairman’s letter
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202 0 A N N U A L R E P O R T
Dear Shareholders
Dear Shareholders
On behalf of your Board, thank you for your loyalty and understanding during these unprecedented and unpredictable times.
On behalf of your Board, thank you for your loyalty and understanding during these unprecedented and unpredictable times.
Our Executive Director has continued to steer the Company in a clear and decisive way and I commend his review to you.
Our Executive Director has continued to steer the Company in a clear and decisive way and I commend his review to you.
We are particularly proud of the achievements of the Orams team in New Zealand as they create a truly unique asset.
We are particularly proud of the achievements of the Orams team in New Zealand as they create a truly unique asset.
The decision not to declare a dividend was not taken lightly but we believe that it is the responsible one in the current environment.
The decision not to declare a dividend was not taken lightly but we believe that it is the responsible one in the current environment.
Your Directors are committed to enhancing the Company and I thank each of them for their time and input. Their diverse backgrounds
Your Directors are committed to enhancing the Company and I thank each of them for their time and input. Their diverse backgrounds
and experiences are invaluable for the benefit of the Company.
and experiences are invaluable for the benefit of the Company.
Yours sincerely
Yours sincerely
Mr David Baffsky, AO
Mr David Baffsky, AO
Chairman
Chairman
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A R I A D N E A U S T R A L I A L I M I T E D
Executive Director’s Review
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The Directors present the Annual Report of Ariadne Australia Ltd (“Ariadne”) for the period ended 30 June 2020.
For the 2020 financial year (“FY20”) Ariadne reported a net loss attributable to members of $7.1 million, (2019: $2.9 million loss).
In addition, a negative contribution attributable to members of $18.1 million (2019: $23.8 million negative contribution) was reported
through the Statement of Comprehensive Income, resulting in a total comprehensive loss attributable to members of $25.2 million
(2019: $26.7 million loss).
The net tangible assets per share decreased during the period from 73.29 cents per share to 58.80 cents per share at balance date,
after taking account of the 1.00 cent FY19 final and 0.70 cent interim dividends declared during the period.
The total comprehensive loss per share was 12.83 cents compared to a loss of 13.48 cents for the previous corresponding period.
The net operating cash flow during the period was $7.3 million (2019: $21.3 million). The inflow in the prior year was boosted by
the distributions received from associates following the sale of the commercial property located at 40 Tank Street, Brisbane.
The reported net loss for the year was significantly impacted by further poor operating results recorded by Hillgrove Resources
Limited (“Hillgrove”), an associate of the Group, with Ariadne booking an equity-accounted loss of $4.8 million, being its 25% share
of Hillgrove’s results during the period.
Also included in the FY20 results are other significant non-cash items of $26.0 million relating to mark-to-market losses on our listed
share portfolio, particularly our holdings in Ardent Leisure Group Limited (“Ardent”) and ClearView Wealth Limited (“ClearView”).
These mark-to-market losses are unrealised and have been recorded through Other Comprehensive Income and not included in the
reported net profit.
One positive outcome in an otherwise very challenging year was continued progress with Orams Group Ltd’s (“OGL”) development
of Site 18 in the Wynyard Quarter in Auckland, New Zealand. As foreshadowed in the half-year results, Ariadne reviewed the
carrying value of its indirect investment in OGL at balance date, resulting in an uplift of $11.0 million in the value of Ariadne’s interest
in Orams NZ Unit Trust (“ONZUT”). This increase in value has been reported through the Statement of Comprehensive Income.
Ardent
Our investment in Ardent (22.6 million shares - representing 4.73% of Ardent’s issued capital) declined in value by $15.0 million
during the period.
As reported in Ardent’s half-year results released on 28 February 2020, substantial progress had been made in improving the
underlying performance of both of Ardent’s businesses and a gradual market re-rating was well underway (with the Ardent share
price rising to $1.60 in January this year).
However, the advent of COVID-19 has had a very significant impact on these businesses.
On 18 March 2020, Ardent announced the temporary closure of all its Main Event Entertainment centres in the US in accordance
with the various US federal and state government guidelines to stop the spread of the virus.
This was then followed a few days later by the cessation of operations at Ardent’s Theme Parks division in Australia.
The consequence of these closures was to put substantial pressure on both businesses, particularly in terms of ongoing liquidity.
To address these challenges, on 15 June 2020 Ardent announced that it had entered into a partnership transaction with RedBird
Capital Partners (“RedBird”) for Main Event Entertainment in terms of which RedBird acquired a 24.2% interest in Main Event
Entertainment via a preferred equity investment of US$80.0 million. Ardent also announced that Main Event Entertainment had
obtained significant support from its lenders, including near-term covenant relief.
In relation to its Australian businesses, Ardent announced on 7 August 2020 that it had received financial assistance for its Theme
Parks division from the Queensland Government, involving a package for a three-year term totalling $69.9 million.
Ardent has accordingly put in place funding initiatives to enable its businesses to navigate the currently challenging conditions brought
on by the current pandemic and to ensure that it is well positioned for future growth once market conditions begin to improve.
Hillgrove
Ariadne first invested in Hillgrove in 2013, attracted by the prospect of significant returns from its mining operations at Kanmantoo.
Hillgrove has, however, proven to be a serial under-performer and, overall, a highly disappointing investment to date for Ariadne.
FY20 produced another unsatisfactory result for Ariadne’s investment in Hillgrove, generating as already indicated a $4.8 million
equity-accounted loss.
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Executive Director’s Review
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On 2 June 2020, Hillgrove announced that its current focus is the evaluation of the underground mining project at Kanmantoo “which,
if successful, is a path forward to return the Company to cash generation as quickly as possible”.
With a new streamlined board and senior management in place, and the ability to resume production in the near-term for relatively
low capital investment due to the infrastructure already in place at Kanmantoo, there is the potential to restore value for shareholders
if the current drilling program generates positive results.
ClearView
Ariadne’s ClearView holding further declined in value by $11.2 million during the period, reflecting the continuing uncertainty and
disruption underway in the Australian financial services sector.
ClearView’s current share price does not reflect the underlying value of ClearView’s business, trading at a significant discount to
Embedded Value of $0.95 per share (as set out in ClearView’s FY20 results).
King River Capital (“King River”)
As previously reported, Ariadne is a Limited Partner of King River, a venture capital fund investing in Australian and US technology
companies. In addition to its fund commitment, Ariadne has co-invested in several of King River’s portfolio companies. Two
investments, in particular, are performing well in the current environment:
FinClear: Australia's only full-stack technology platform that provides settlement, execution, and managed account capabilities to
brokers, platforms and wealth managers. Growth has been above projections during the COVID-19 crisis as FinClear continues to
be a major disruptor in the wealth management industry.
Lark Technologies: a digital healthcare company based in California that has built a fully-AI driven platform for chronic disease
management. Lark is a direct beneficiary of the telemedicine revolution in the wake of the COVID-19 crisis. Its true AI offers insurers,
employers and health plans highly scalable and cost-efficient product solutions under the backdrop of unprecedented demand on the
health system.
Property
The Group’s property division recorded a loss before tax of $0.1 million (2019: $1.8 million profit).
The division’s result is derived from Ariadne’s 50% interest (at balance date) in ONZUT and interest received on its secured loan to
ONZUT. The result also includes Ariadne’s 50% interest in the recently-established Kippax Property Pty Ltd (“Kippax”) joint venture.
ONZUT
The Group’s share of ONZUT loss during the period was $0.2 million (2019: $1.2 million profit). In addition, a positive contribution
of $11.0 million, representing the Group’s share of the uplift in valuation of the underlying property assets of OGL, was reported
through the Statement of Comprehensive Income.
During the period, OGL completed the lease acquisitions of Site 18 and Sites 32/33 pursuant to its Development Agreement with
Panuku Development Auckland and now holds pre-paid leases over a total of 32,000 sqm of waterfront land area in the city’s Wynyard
Quarter, New Zealand’s largest urban revitalisation project.
OGL also commenced construction of the Stage 1A Works, involving principally the remediation of the new marine area including a
concrete encasement slab, groundwater cut-off wall and the strengthening of the seawall on the site. This latter work has largely
been completed – on time and within budget to date.
On 14 July 2020, subsequent to balance date, Ariadne acquired an additional 30% equity interest in ONZUT from an existing
unitholder, increasing Ariadne’s indirect equity interest in OGL from 38% to 61%.
Kippax
In December 2019, Ariadne established the Kippax joint venture, with an emphasis on pursuing real estate opportunities around
evolving infrastructure investment and urban renewal precincts. The partnership brings together a mix of investment and development
expertise, long term landowner relationships, capital solutions and a proven technical and delivery track record of commercial,
residential, and mixed-use projects.
Kippax has commenced building a strong pipeline of potential opportunities that have prospects for either development or
repositioning. Despite the challenges of a COVID-19 environment, Kippax secured its first site in Redfern, Sydney in May
2020. Kippax has a 50% interest in this property which has been secured by a call option and Kippax is the Development Manager
for the project.
Kippax is currently pursuing planning for redevelopment of an innovative and sustainable commercial office scheme on the site. This
project plays directly to Kippax’s strategy and is set to benefit from the NSW State Government’s infrastructure and stimulus
investment through the upgrade of the nearby Redfern Station, the new Waterloo Metro Station, the confirmation and
commencement of The Sydney Innovation and Technology Precinct and the City of Sydney’s ambitions for the area.
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Executive Director’s Review
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Kippax is continuing with the momentum of this opportunity and is pursuing further target opportunities, which would provide a
solid platform for growth in 2021 and beyond.
Car Parking
The Group’s car parking division recorded a profit before tax of $0.1 million (2019: $0.7 million).
The division’s result reflects the trading performance of its leased car park which terminated in June 2020. The previous year’s result
also included the reversal of a provision relating to the sale of Secure Parking in 2017.
Simplified Balance Sheet
Ariadne is in a sound financial position as shown in the following presentation of the Group’s assets and liabilities as at 30 June 2020.
$M
34.9
Liabilities
Payables and Provisions
Debt
Minority Interests
Total Liabilities
Shareholders’ Funds
$M
3.0
5.5
6.2
14.7
115.4
Assets
Cash
Investments
Orams
Freshxtend
Ardent
ClearView
Other Strategic Assets
Hillgrove
Foundation Life
FinClear
Trading Portfolio
Kippax
Cover Genius
King River
$M
28.9
13.2
8.8
7.8
7.7
5.5
5.1
4.1
3.9
2.5
2.4
2.2
Total Investments
Fixed Assets and Other Receivables
Total Assets
92.1
3.1
130.1
Total Liabilities &
Shareholders’ Funds
130.1
Tax
Ariadne has substantial carry forward revenue and capital losses available to offset future taxable profits. At 30 June 2020 these are
estimated to be $83.9 million (30 June 2019: $82.9 million) and $70.6 million (30 June 2019: $78.4 million) respectively. As at balance
date, Ariadne has a deferred tax asset of $42.5 million which is not recognised in Ariadne’s accounts.
Dividends and Capital Management
A partially franked interim dividend of 0.7 cent per share was declared by the directors in February. Due to market dislocations in
March the payment of this dividend was deferred and will now be paid in September 2020.
In light of the ongoing volatility in market conditions, the Board has determined to preserve cash reserves during this highly uncertain
period. As a result, no final dividend for FY20 will be paid.
On 20 February 2020, Ariadne announced the extension of its on-market share buy-back facility as part of ongoing capital management
initiatives. During the period Ariadne repurchased and cancelled 0.65 million shares at a cost of $0.4 million.
Dr Gary Weiss, AM
Executive Director
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Directors’ Report
202 0 A N N U A L R E P O R T
The Directors submit their report for the year ended 30 June 2020.
The term “Group” is used throughout this report to refer to the parent entity, Ariadne Australia Limited (“Ariadne”) and its controlled
entities.
All amounts included in this report, other than those forming part of the Remuneration Report, are quoted in thousands of dollars unless
otherwise stated.
1. OPERATING AND FINANCIAL REVIEW
Group Overview
Ariadne’s objective is to hold a portfolio of assets and investments in order to provide attractive investment returns which can generate
regular dividends to shareholders and capital growth in the value of the shareholders’ investments.
The Board of Directors (“Board”) and management have extensive experience investing in securities, financial services, property, merchant
banking and operating businesses.
Ariadne’s principal activities include investing in securities; financial services; property and maritime operations.
Operating Results for the Year
The consolidated net loss before income tax, attributable to the Group from continuing operations for the financial year was $6,835 (2019:
$5,443 profit). The consolidated net loss before tax attributable to members, on the same basis, for the financial year was $7,142 (2019:
$4,599 profit). After tax, the net loss attributable to members for the financial year was $7,142 (2019: $2,912 loss). In addition, a negative
contribution (net of deferred tax) attributable to members of $18,068 (2019: $23,752 negative contribution) was reported through the
Statement of Comprehensive Income, resulting in a total comprehensive loss attributable to members of $25,210 (2019: $26,664 loss).
Net tangible assets at the end of the reporting period were 58.80 cents per share (2019: 73.29 cents). Total earnings per share were -3.64
cents (2019: -1.47 cents). Total comprehensive earnings per share were -12.83 cents (2019: -13.48 cents).
Investments
The Investment division recorded a loss of $4,213 (2019: $7,155 profit).
The division’s result is derived from interest on cash reserves, share of profits / losses from the Group’s investments in associates, dividends
received, trading income from the trading portfolio and net gains / losses on the strategic portfolio revalued through profit and loss.
Cash and cash equivalents as at 30 June 2020 were $34,916 (2019: $41,981). Ariadne also returned $2,369 (2019: $5,293) during the
period by way of dividends and share buy-backs. Ariadne continues to maintain a prudent approach to cash management.
The division’s share of joint ventures and associates results for the period was a net loss of $3,908 (2019: $2,525 net profit). The current
period includes a $4,823 equity accounted loss, being the Group’s 25% share of Hillgrove Resources Limited results for the period.
The trading portfolio recorded a net loss of $1,955 (2019: $1,091 gain) and the strategic portfolio revalued through profit or loss recorded
a net gain of $1,003 (2019: $1 gain) during the reporting period due to mark-to-market revaluations.
The strategic portfolio revalued through other comprehensive income recorded a loss net of tax of $28,899 (2019: $24,866 net loss)
during the reporting period due to mark-to-market revaluations including a $11,156 markdown of the Group’s investment in ClearView
Wealth Limited and a $14,963 markdown of the Group’s investment in Ardent Leisure Group Limited. The Board anticipates that the
respective share prices of these holdings will recover to reflect their intrinsic value over time. Both the mark-to-market loss and any
associated deferred tax benefit attributable to the strategic portfolio are not included in the reported net profit.
The Group also received NZ$362 (2019: NZ$258) from Foundation Life (NZ) Ltd during the year comprised of loan note interest.
Ariadne’s 53% interest in Freshxtend International Pty Ltd, with its 17% investment in the NatureSeal group, again contributed positively
during the period, albeit at lower levels than previously as the patent expiration of key NatureSeal products continues to impact on overall
margins.
Car Parking
The Group’s Car Parking division recorded a profit of $45 (2019: $675).
The division’s result reflects the trading performance of its leased car park which terminated in June 2020. The FY19 year result also
included the reversal of a provision relating to the sale of Secure Parking in 2017.
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Directors’ Report
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Property
The Group’s Property division recorded a loss of $67 (2019: $1,764 profit).
The division’s result is derived from the Group’s 50% interest in Orams NZ Unit Trust (“ONZUT”) and interest received on its secured
loan to ONZUT. The result also includes Ariadne’s 50% interest in recently established Kippax Property Trust.
The Group’s share of ONZUT’s loss for the period was $249 (2019: $1,194 profit), and the interest earned on the associated loan to
ONZUT net of New Zealand withholding tax was $339 (2019: $396). In addition, a positive contribution of $10,796 (2019: $354), including
the Group’s share of the uplift in valuation of the underlying property assets, was reported through the Statement of Comprehensive
Income.
As announced to the market on 23 October 2019, ONZUT merged its business and property assets with Orams Marine Services Limited
to create Orams Group Limited (“the Merger” or together “Orams Group”). At balance date, ONZUT held a 76% equity interest in the
Orams Group, with Ariadne indirectly holding a 38% equity interest via its interest in the ONZUT.
Orams Group now operates the Marina and Orams Marine Services, New Zealand’s premier marine facility and largest marine maintenance
and refit services business respectively. It is also undertaking the development of a new marine refit facility on the adjoining property known
as Site 18 in Auckland’s Wynyard quarter. In conjunction with the Merger, the acquisition conditions for Site 18, as included in the
development agreement signed in February 2019 between the Orams Group and Auckland City’s regeneration agency Panuku
Development Auckland, were satisfied and the prepayment for the 125-year ground lease and associated water space was completed. The
lease acquisition by the Orams Group was funded utilising a debt facility procured for the acquisition and development of Site 18 -
Stage 1A Works enabling the Marina to triple the capacity of its vessel refit operation. During the period a 125-year prepayment for the
remaining ground lease and associated water space was also completed. The targeted completion of the Stage 1A Works is aligned with
the 36th Americas Cup to be held in Auckland in early 2021. The three-stage development will feature a marine haul out and refit facility,
commercial buildings and a residential component on the northern end of Site 18. The facility will target marine vessels (including
superyachts) up to 800 tonnes. The development will also provide increased maintenance facilities for Auckland’s ferries, fishing vessels
and commercial vessels. Existing marine businesses within the Marina will also be accommodated in the new development.
During the period, Ariadne, entered into conditional agreements to acquire an additional 30% equity interest in the ONZUT from an
existing unitholder. As noted in Section 5 ‘significant events after the balance date’ of this report, post balance date the conditions to the
acquisition were satisfied and the transaction completed on 14 July 2020.
Taxation
Ariadne has significant carried forward revenue and capital losses available to offset future taxable profits. At 30 June 2020, these are
estimated at $83,940 (2019: $82,947) and $70,599 (2019: $78,388) respectively.
In accordance with the Group’s accounting policy for income tax, an assessment was undertaken to estimate the probable recoverability
and sufficiency of the Group’s deferred tax assets. The assessment determined that no deferred tax asset would be recorded on the
Group’s Balance Sheet at 30 June 2020 (2019: nil).
Employees
The number of employees, including directors, at balance date is 10 (2019: 13), 70% male and 30% female (2019: 62%:38%).
2. DIVIDENDS AND CAPITAL MANAGEMENT
Dividends paid or declared during the 2020 financial year
(cents per share)
($’000)
FY19 Final – paid 26 September 2019
FY20 Interim – declared 28 February 2020
1.0
0.7
1.7
1,967
1,374
3,341
In light of the ongoing volatility in market conditions, the Board has determined to preserve cash reserves during this highly uncertain
period. As a result, no final dividend for FY20 will be paid. Payment of the interim dividend, of 0.7 cents per share declared in
February 2020 and deferred in March 2020, will be paid on 24 September 2020.
During the period Ariadne bought back and cancelled 650,000 shares (2019: 2,776,728) at a cost of $402 (2019: $1,918). On 20
February 2020, Ariadne announced the twelve month extension of its on-market share buy-back facility as part of ongoing capital
management initiatives. The buy-back is for the purpose of acquiring shares where they are trading at prices below the Board’s view of
the intrinsic value of the shares, such acquisitions benefiting all shareholders.
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Directors’ Report
3. DIRECTORS
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The names and details of Ariadne’s Directors in office at the date of this report are set out below. All Directors were in office for the
entire period unless otherwise stated.
Names, qualifications, experience and special responsibilities
David Baffsky, AO, LLB
Independent Non-Executive Chairman
Mr Baffsky AO, was appointed as a Director of Ariadne on 18 March 2008 and Chairman of the Board on 13 January 2009.
Mr Baffsky holds a law degree from the University of Sydney and was the founder, and until 1991, the senior partner of a Sydney legal
firm specialising in commercial and fiscal law. Mr Baffsky is Honorary Chairman (formerly Executive Chairman between 1993 and 2008)
of Accor Asia Pacific, which is the largest hotel management company in the Asia Pacific region. He is Chairman of Investa Property
Group and a board member of Destination NSW. Amongst previous roles, Mr Baffsky was a Director of The George Institute and The
Australian Brandenburg Orchestra and a board member of Sydney Olympic Park Authority. He was a Director of SATS Limited,
Chairman of Food & Allied Support Services Corporation Ltd, a Trustee of the Art Gallery of NSW, Chairman of Voyages Indigenous
Tourism Ltd and a Director of the Indigenous Land Corporation. He was a member of the Business Government Advisory Group on
National Security and a member of the Federal Government’s Northern Australia Land and Water Taskforce. In 2001 Mr Baffsky was
made an Officer in the General Division of the Order of Australia and in 2003 he received the Centenary Medal. In 2004 he was
recognised as the Asia Pacific Hotelier of the Year. In 2012 he was awarded the Chevalier in the Order of National Légion d’Honneur of
France.
Mr Baffsky was appointed to the Ariadne Audit and Risk Management Committee on 18 March 2008.
Kevin Seymour, AM
Non-Executive Deputy Chairman
Mr Seymour AM, was appointed as a Director of Ariadne on 23 December 1992.
Mr Seymour is the Executive Chairman of Seymour Group, one of the largest private property development and investment
companies in Queensland and has substantial experience in the equities market in Australia and has extensive management and
business experience including company restructuring. Mr Seymour holds board positions with several private companies in Australia.
Mr Seymour was previously a Director of UNiTAB and then Tatts Group Limited. When the merger was completed between Tatts
Group and Tabcorp Limited he completed his term as Director on 22 December 2017. Mr Seymour was also previously the
Chairman of Watpac Limited, the Chairman of the RBH Herston Taskforce Redevelopment, Independent Chairman of the
Queensland Government’s and Brisbane City Council's Brisbane Housing Company Limited and Chairman of Briz31 Community
TV. He has also served on the Brisbane Lord Mayor's Drugs Taskforce and is an Honorary Ambassador for the City of Brisbane. In
June 2003, Mr Seymour received the Centenary Medal for distinguished service to business and commerce through the construction
industry, and in June 2005 he was awarded the Order of Australia Medal for his service to business, the racing industry, and the
community.
Christopher Barter, BSc Phy, Msc Phy
Independent Non-Executive Director
Mr Barter was appointed as a Director of Ariadne on 22 February 2018.
Mr Barter is a managing partner at King River, a global technology investment fund based in Sydney. He was previously at Goldman
Sachs for 19 years, based in Frankfurt, London and Moscow where he was the CEO of Russia and CIS from 2007 to 2012 responsible
for the securities, investment banking and private equity investing activities. In that role, Mr Barter built out the firm’s bank and
broker-dealer operations, established many key business and political relationships, and led many of its landmark investments in the
region. Prior to this, his roles at Goldman Sachs included co-Head of the European Financial Institutions Group (2003-2007) and
Head of the European Insurance and Pension Fund Industry Group (1998- 2003). He was named a Managing Director in 2000 and
was made Partner in 2004, and served on the Firmwide Growth Markets Operating Committee. Mr Barter currently serves on the
boards of CNG Fuels (UK energy infrastructure), FinClear (Australian financial services), and on the advisory board of GreenSync
(Australian energy SaaS). He also serves on the President’s Leadership Council at Brown University. Mr Barter obtained a BSc in
Physics from Brown University (1990) and an MSc in Physics from Harvard University (1993).
Mr Barter was appointed as a member of the Audit and Risk Management Committee on 22 March 2019.
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John Murphy, B Com, M Com, CA, FCPA
Independent Non-Executive Director
Mr Murphy, was appointed as a Director of Ariadne on 6 December 2006.
Mr Murphy was a partner in international accounting firm Arthur Andersen where he specialised in merger and acquisition and insolvency
and reconstruction. He held management positions in that firm at the Australian, regional and global level. He has also spent twenty years
as the founder and managing director of various private equity funds including Investec Wentworth Private Equity Limited and Adexum
Capital limited. He was a Director of Investec Bank Australia Limited from 2004 until 2013.
Mr Murphy has extensive public company experience having been a Director of listed companies Southcorp Limited, Specialty Fashion
Group Limited, Vocus Communications Limited, Gale Pacific Limited, Redflex Limited, and Australian Pharmaceutical Industries Limited.
Mr Murphy was appointed to the Ariadne Audit and Risk Management Committee on 6 December 2006 and was elected Committee
Chairman on 18 March 2008.
Dr Gary Weiss, AM, LLB (Hons), LLM, JSD
Executive Director
Dr Weiss, was appointed as a Director of Ariadne on 28 November 1989.
Dr Weiss is Chairman of Ardent Leisure Limited (appointed 29 September 2017, having been appointed Director on 3 September 2017),
Ridley Corporation Limited (appointed 1 July 2015, having been a Director since 21 June 2010) and Estia Health Ltd (appointed 1 January
2017, having been a Director since 24 February 2016) and a Director of several other listed companies including, The Straits Trading
Company Limited (appointed 1 June 2014), Hearts and Minds Investments Limited (appointed 12 September 2018), and Thorney
Opportunities Ltd (appointed 21 November 2013). Dr Weiss was also appointed a Commissioner of the Australian Rugby League
Commission on 30 August 2016.
During the past three years, Dr Weiss has also served as a Director of Tag Pacific Limited (appointed 1 October 1998 and resigned 31
August 2017), Pro-Pac Packaging Limited (appointed 28 May 2012 and resigned 27 November 2017) and Premier Investments Limited
(appointed 11 March 1994 and resigned 28 July 2018).
4. COMPANY SECRETARY
Natt McMahon, B Com, M AppFin, SA Fin, CA, FGIA, FCIS
Mr McMahon was appointed Chief Financial Officer and Company Secretary for the Group on 18 May 2012.
Prior to joining Ariadne, Mr McMahon held senior financial roles with various local and overseas entities.
5. SIGNIFICANT EVENTS AFTER THE BALANCE DATE
On 28 February, Ariadne, entered into conditional agreements to acquire an additional 30% equity interest in the ONZUT from an
existing unitholder subject to obtaining the approval of the New Zealand Overseas Investment Office as well as other necessary consents.
After the balance date, on 14 July 2020, Ariadne announced that all approvals and necessary consents had been received and that the
additional 30% interest had been transferred to Ariadne, increasing its interest in the ONZUT to 80% and its indirect holding in Orams
Group to 61%. The ONZUT is now a subsidiary of Ariadne and its results will be consolidated by Ariadne in FY21.
The outbreak of COVID-19 and the subsequent quarantine measures imposed by the Australian and other governments as well as the
travel and trade restrictions imposed by Australia and other countries in early 2020 have caused significant and widespread disruption to
businesses and economic activity in Australia. Since the reporting date, government policy in response to COVID-19 continues to change
in response to a potential “second wave”, and further lockdown regulations imposed by the Victorian State Government in August
2020. The Directors continue to actively monitor the Group’s exposure and take measures as considered necessary to lessen the financial
impact.
Apart from the matters above, there is no other matter of circumstance that has arisen since 30 June 2020 that has significantly affected,
or may significantly affect the Group’s operations, the results of those operations, or the Group’s state of affairs in the future financial
periods.
6. LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Ariadne intends to continue its investment activities as it has done for many years. The results of these investment activities depend on
the performance of the companies and securities in which the Group invests. Their performance in turn depends on many economic
factors. These include economic growth rates, inflation, interest rates, exchange rates and taxation levels. There are also industry and
company specific issues including management competence, capital strength, industry economics and competitive behaviour. The
composition of the Group’s investment portfolio can change dramatically from year to year. As a consequence profit flows are
unpredictable as the rewards from a successful long term investment may be accrued in a single transaction.
9
A R I A D N E A U S T R A L I A L I M I T E D
Directors’ Report
202 0 A N N U A L R E P O R T
Ariadne does not believe it is possible or appropriate to make a prediction on the future course of markets or the performance of its
investments. Accordingly, Ariadne does not provide a forecast of the likely results of its activities. However, the Group’s focus is on
results over the medium to long term and its twin objectives are to provide shareholders with regular dividends and capital growth in
the value of their investments.
7. ENVIRONMENTAL REGULATION AND PERFORMANCE
The Group’s environmental obligations are regulated by relevant federal, state and local government ordinances. The Group’s policy is
to comply with its environmental performance obligations. No material exposure to environmental or social risks were identified
during the period.
8. REMUNERATION REPORT (AUDITED)
All amounts in the Remuneration Report are stated in whole numbers unless otherwise specified.
The Remuneration Report outlines the Director and Executive remuneration arrangements of the Group in accordance with the
requirements of the Corporations Act 2001 and its Regulations.
Remuneration Philosophy
The performance of the Group depends upon the quality of its Directors, Executive Officers and employees.
Remuneration of Directors and Executive Officers of the Group is established by annual performance review, having regard to market
factors and a performance evaluation process. For Executive Officers remuneration packages generally comprise salary, superannuation
and a performance-based bonus.
Remuneration Structure
In accordance with good corporate governance the structure of Non-Executive Director and Executive Officer remuneration is separate
and distinct.
Non-executive Remuneration
Objective
The Board seeks to set aggregate remuneration at a level which provides the Group with the ability to attract and retain Directors of
the highest calibre, whilst incurring a cost which is acceptable to shareholders.
Structure
Ariadne’s Constitution and the Australian Securities Exchange (“ASX”) Listing Rules specify that the aggregate remuneration of Non-
Executive Directors shall be determined from time to time by a general meeting. An amount not exceeding the amount determined is
then divided between the Directors as agreed. The latest determination, approved by shareholders on 24 November 2011, provided for
an aggregate limit of Non-Executive Directors’ remuneration (including superannuation) of $500,000 per annum.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned amongst
Directors is reviewed annually. The Board considers fees paid to Non-Executive Directors of comparable companies when undertaking
the annual review process.
Directors are also reimbursed for reasonable travel expenses in attending Board and Committee meetings and other costs associated
with representing the Group in specific matters from time to time.
Executive Remuneration
Objective
The Group aims to reward Executives with a level and mix of remuneration commensurate with their position and responsibilities within
the Group so as to:
•
•
•
•
10
reward Executives for performance against targets set by reference to appropriate benchmarks;
align the interests of Executives with those of shareholders;
link reward with the strategic goals and performance of the Group; and
ensure total remuneration is competitive by market standards.
A R I A D N E A U S T R A L I A L I M I T E D
Directors’ Report
202 0 A N N U A L R E P O R T
Structure
In determining the level and make up of Executives’ remuneration, the Board considers market levels of remuneration for comparable
roles and employee performance. Remuneration consists of the following key elements:
•
•
Fixed remuneration
Variable remuneration
The Board establishes the proportion of fixed and variable remuneration for each Executive.
Fixed Remuneration
Objective
The level of fixed remuneration is set so as to provide a base level of remuneration, which is both appropriate to the position and is
competitive in the market. Fixed remuneration is reviewed annually.
Structure
Fixed remuneration is paid in cash.
Variable Remuneration
Objective
The objective of variable remuneration is to reward Executives in a manner which aligns this element of remuneration with the creation
of shareholder wealth.
Structure
Variable remuneration is generally only offered to Executives who are able to influence the generation of shareholder wealth and have a
direct impact on the Group’s performance. Due to the operations of the Group, the value of variable remuneration may be linked to the
outcome of specific transactions in addition to the Group’s overall financial performance. Comprehensive Earnings per Share (“CEPS”),
Return on Equity (“ROE”), and project Internal Rate of Return (“IRR”) as calculated in accordance with applicable accounting standards
and accepted valuation techniques may be used as key indicators of performance.
Variable remuneration may be in the form of cash bonuses or longer term incentives in the form of Ariadne share options. Cash based
variable remuneration is used to reward Executives for exceptional performance. The nature of the Group’s activities lends itself to a
market where cash based incentives are prevalent. While individual performance may be rewarded by way of cash based payments, the
Board also considers the use of longer-term incentives in order to align the interests of employees and shareholders.
A share option plan has been established where the Board may grant options over the ordinary shares of Ariadne to Executives as a long-
term incentive payment. The options, issued for nil consideration, are granted as variable remuneration. All options are issued at the
discretion of the Board, there are no fixed guidelines.
Each option entitles the holder to subscribe for one fully paid ordinary share in Ariadne at a specified price. The options are issued for a
term of five years and are exercisable two years from the date of grant. The options cannot be transferred and will not be quoted on the
ASX. Option holders do not have any right, by virtue of the option, to participate in any share right issues or dividends.
Details of Key Management Personnel Remuneration
(a) Details of Key Management Personnel
(i) Directors
D Baffsky, AO
K Seymour, AM
C Barter
J Murphy
G Weiss, AM
(ii) Executives
N McMahon
D Weiss
Independent Non-Executive Chairman
Non-Executive Deputy Chairman
Independent Non-Executive Director
Independent Non-Executive Director
Executive Director
Chief Financial Officer / Company Secretary
Investment Officer
11
A R I A D N E A U S T R A L I A L I M I T E D
Directors’ Report
(b) Remuneration of Directors and Executives
202 0 A N N U A L R E P O R T
Remuneration Policy
The Board acts as the Group’s Remuneration Committee and is responsible for determining and reviewing compensation arrangements
for the Directors and the Executive team. The Directors assess the appropriateness of the nature and amount of emoluments on a
periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder
benefit from the retention of a high quality Board and Executive team.
Directors’ remuneration primarily consists of a base salary.
Officers receive their base emolument in the form of cash payments. Once the Directors’ approval is granted, bonuses are paid by way
of cash or longer term incentives in the form of Ariadne share options. The Directors link the nature and amount of Executive Directors’
and Officers’ emoluments to the Group’s financial and operational performance.
Superannuation Commitments
All superannuation payments on behalf of the Group’s Directors and staff are paid to externally administered superannuation funds. The
Group makes contributions in accordance with Superannuation Guarantee Legislation.
Short Term Employee Benefits
Non-
Monetary
Benefits(i)
Cash
Bonus
Salary &
Fees
Post-
Employment
Benefits
Share
Based
Payment
Superan-
nuation
Options(ii)
Total
% at Risk
Table 1: Emoluments of Directors of Ariadne
D Baffsky, AO (Chairman)(iii)
2020
2019
K Seymour, AM (Deputy Chairman)
2020
2019
C Barter
2020
2019
M Loomes(iv)
2020
2019
J Murphy
2020
2019
G Weiss, AM (Executive Director)
2020
2019
130,000
130,000
70,000
70,000
70,000
70,000
—
60,487
80,000
80,000
672,748
695,000
Total Remuneration: Directors
2020
2019
1,022,748
1,105,487
—
—
—
—
—
—
—
—
—
—
—
—
—
—
15,512
15,248
12,350
12,350
—
—
—
—
—
—
—
—
15,512
15,248
31,024
30,496
6,650
6,650
6,650
9,005
—
5,746
7,600
7,600
30,000
30,000
63,250
71,351
Table 2: Emoluments of the Executive Officers of the Group
—
—
—
—
—
—
—
—
—
—
—
—
—
—
157,862
157,598
76,650
76,650
76,650
79,005
—
66,233
87,600
87,600
718,260
740,248
1,117,022
1,207,334
—
—
—
—
—
—
—
—
—
—
—
—
—
—
N McMahon (Chief Financial Officer / Company Secretary)
2020
2019
D Weiss (Investment Officer)
2020
2019
281,822
281,350
347,079
347,079
Total Remuneration: Executives
2020
2019
628,901
628,429
—
—
—
—
—
—
—
—
15,512
15,248
15,512
15,248
25,000
25,000
21,003
20,531
17,335
29,867
17,335
29,867
324,157
336,217
400,929
412,725
5.35%
8.88%
4.32%
7.24%
46,003
45,531
34,670
59,734
725,086
748,942
4.78%
7.97%
(i)
(ii)
(iii)
(iv)
12
Non-monetary benefits represent the cost of car parking (including associated fringe benefits tax).
Refer to Table 3 - Option holdings of Directors and Executives.
Mr Baffsky, AO (Chairman) performed various consulting services to the Group outside of his Director’s duties. Mr Baffsky was paid additional fees of
$43,800 not included above for consulting work performed during the period.
Mr Loomes retired as a Director of Ariadne on 10 May 2019.
A R I A D N E A U S T R A L I A L I M I T E D
Directors’ Report
202 0 A N N U A L R E P O R T
Table 3: Option holdings of Directors and Executives
Executives
N McMahon
D Weiss
Total
Balance
1 July 2019
Granted as
Remuneration
Options
Exercised
Options
Expired
Balance
30 June 2020
Vested and
Exercisable
500,000
1,000,000
1,500,000
—
—
—
—
—
—
—
—
—
500,000
1,000,000
1,500,000
250,000
750,000
1,000,000
Each option entitles the holder to purchase one Ariadne share at a specified price. The options have a vesting period of two years from
the date the option is issued followed by an exercise period of three years. The options may not be exercised during the vesting period.
In accordance with the terms and conditions, options are either exercised, lapse or expire on cessation of employment in the event where
vesting conditions have not yet been met. If options are not exercised in the exercise period, they lapse, and therefore have a nil value.
Options granted as part of Executive emoluments have been valued using the Black Scholes pricing model, which takes account of factors
including the option exercise price, the volatility of the underlying share price, the risk-free interest rate, expected dividends on the
underlying share, market price of the underlying share and the expected life of the option. The amortised cost to the Group has been
calculated as the fair value of options at grant date, prorated over the vesting period of the options. The actual value of the options will
only be determined after the exercise period commences and when the options are exercised.
Key inputs used in valuing the options on issue at balance date are as follows:
Grant
Date
Expiry
Date
Dividend
Yield
Expected
Volatility
Risk Free
Interest
Rate
Expected Life of
Options from Grant
Date (years)
Exercise
Price
(cents)
Share Price at
Grant Date
(cents)
Fair Value of
Option at Grant
Date (cents)
28/08/2015 27/08/2020
18/08/2017 17/08/2022
17/08/2018 16/08/2023
2.5%
2.6%
5.3%
26.5%
25.2%
34.9%
2.0%
2.2%
2.2%
3.5
3.5
3.5
35.0
73.0
63.0
39.5
76.0
65.5
8.2
13.4
12.1
Table 4: Shareholdings of Directors and Executives
Ordinary shares held in
Ariadne
Directors
D Baffsky, AO
K Seymour, AM
C Barter
J Murphy
G Weiss
Executives
N McMahon
D Weiss
Total
Balance
1 July 2019
On Exercise
of Options
Net Change
Other
Balance
30 June 2020
5,182,713
11,634,174
2,000,000
586,296
65,739,743
440,428
2,199
85,585,533
—
—
—
—
—
—
—
—
—
2,353,220
—
—
—
—
—
2,353,220
5,182,713
13,987,394
2,000,000
586,296
65,739,743
440,428
2,199
87,938,753
All equity transactions with Directors and Executives other than those arising from the exercise of remuneration options have been
entered into under terms and conditions no more favourable than those the entity would have adopted if dealing at arm’s length. Currently
no Director or Executive has disclosed to Ariadne that they have used hedging instruments to limit their exposure to risk on either shares
or options in Ariadne. The Group’s policy is that the use of such hedging instruments is prohibited.
(c) Indemnification and insurance of Directors and Officers
Insurance and indemnity arrangements concerning Officers of the Group are in place. Ariadne’s Constitution provides an indemnity (to
the extent permitted by law) in favour of each Director, Secretary and Executive Officer. The indemnity is against any liability incurred by
that person in their capacity as a Director, Secretary or Executive Officer to another person (other than Ariadne or a related body
corporate), unless the liability arises out of conduct involving a lack of good faith. The indemnity includes costs and expenses incurred by
an Officer in successfully defending that person’s position. The Group has paid a premium insuring each Director, Secretary and full-time
Executive of the Group against certain liabilities incurred in those capacities, to the extent permitted by law. Disclosure of premiums and
coverage has not been included as such disclosure is prohibited under the terms of the contract of insurance.
(d) Loans from Directors and Executives
No loans from Directors and Executives were made, repaid or outstanding during the current and prior financial periods.
(e) Other transactions and balances with Directors and Executives
13
A R I A D N E A U S T R A L I A L I M I T E D
Directors’ Report
202 0 A N N U A L R E P O R T
Purchases / Payments
Mr Barter is an Executive Director of King River Capital Management Pty Ltd (“KRC”). The Group invested $559,635 (2019: $1,714,846)
in other financial assets during the period which were associated with or otherwise related entities of KRC.
Mr Barter, KRC and entities associated with KRC are appointed as authorised representatives for one of the Group’s wholly owned
subsidiaries, which holds an Australian Financial Services Licence, under an agreement established in the prior period. During the period,
the Group received $30,000 (2019: $17,500) from KRC relating to this agreement.
Mr Baffsky performed various consulting services to the Group outside of his Director’s duties. Mr Baffsky was paid on commercial terms
for consulting work performed of $43,800 (2019: $43,800). Mr Baffsky, in his role as Chairman of the Board of Directors and for other
purposes, utilises an office and car park at premises leased by the Group.
Investments
The Group holds investments in, or managed by, entities where the officers of the Group hold a board position:
Ardent Leisure Group Limited
FinClear Pty Ltd
Hearts and Minds Investments Limited
Thorney Opportunities Limited
King River Capital Management Pty Ltd
Dr G Weiss
Mr C Barter
Dr G Weiss
Dr G Weiss
Mr C Barter
Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Executive Director
(f) Historical Group Performance
The table below illustrates the Group’s performance over the last five years. These results include non-recurring items and asset
impairment write-downs.
Total comprehensive income / (loss) after tax
attributable to members
Return on equity (%) #
Total comprehensive earnings per share (cents)
Dividends paid / declared (cents)
Share price (cents at 30 June)
Net tangible assets per security (cents at 30 June)
2020
2019
2018
2017
(25,210)
(26,664)
10,209
91,522
(19.4%)
(12.83)
1.70
39.00
58.80
(16.6%)
(13.48)
1.70
62.50
73.29
5.8%
5.10
3.50
65.00
88.25
70.2%
45.50
2.00
76.00
86.58
2016
9,927
11.9%
4.90
1.00
34.00
43.09
Shares on issue (number at 30 June)
# Return on equity is calculated as total comprehensive income for the period divided by average equity for the period.
196,242,360
196,892,360
199,669,088
201,227,785
201,077,785
Remuneration Report (Audited) Ends
14
A R I A D N E A U S T R A L I A L I M I T E D
Directors’ Report
9. DIRECTORS’ MEETINGS
202 0 A N N U A L R E P O R T
The number of meetings of Directors (including meetings of committees of Directors) held during the year and the number of meetings
attended by each of the Directors were as follows:
Number of meetings held:
Number of meetings attended:
D Baffsky, AO
K Seymour, AM
C Barter
J Murphy
G Weiss, AM
Committee membership
Directors’
Meetings
Meetings of Committees
Audit & Risk Management
6
6
4
6
6
6
4
3
n/a
4
4
n/a
As at the date of this report, Ariadne had an Audit and Risk Management Committee. Members acting on the Committee during the
year were:
J Murphy (Chairman)
D Baffsky, AO
C Barter
10. ROUNDING
The amounts contained in the financial report have been rounded to the nearest thousand dollars (where rounding is applicable) under
the option available to Ariadne in accordance with ASIC Instruction 2016/191.
11. AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS
A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act 2001 is set out on page 16
and forms part of the Directors’ Report for the year ended 30 June 2020.
12. NON-AUDIT SERVICES
There were no non-audit services provided by Ariadne’s auditor, Deloitte Touche Tohmatsu in the current financial year.
Signed in accordance with a resolution of the Directors
David Baffsky, AO
Chairman
Sydney
28 August 2020
15
A R I A D N E A U S T R A L I A L I M I T E D
Auditor’s Independence Declaration
202 0 A N N U A L R E P O R T
Deloitte Touche Tohmatsu
A.B.N. 74 490 121 060
Grosvenor Place
225 George Street
Sydney NSW 2000
PO Box N250 Grosvenor Place
Sydney NSW 1217 Australia
DX 10307SSE
Tel: +61 (0) 2 9322 7000
Fax: +61 (0) 2 9322 7001
www.deloitte.com.au
The Board of Directors
Ariadne Australia Limited
Level 27, Chifley Tower
2 Chifley Square
Sydney NSW 2000
Australia
28 August 2020
Dear Board Members
Auditor’s Independence Declaration to Ariadne Australia Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of Ariadne Australia Limited.
As lead audit partner for the audit of the financial statements of Ariadne Australia Limited for
the financial year ended 30 June 2020, I declare that to the best of my knowledge and
belief, there have been no contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
Yours faithfully
DELOITTE TOUCHE TOHMATSU
John M Clinton
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte Network.
16
A R I A D N E A U S T R A L I A L I M I T E D
Statement of Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2020
202 0 A N N U A L R E P O R T
CONTINUING OPERATIONS
Rental income
Interest income
Dividend income
Other income
Share of joint ventures’ and associates’ (losses) / profits
Rental expenses
Employee benefits expense
Depreciation and amortisation
Administration expenses
Finance costs
Impairment provisions
(LOSS) / PROFIT BEFORE INCOME TAX
Income tax expense
LOSS AFTER TAX FOR THE PERIOD
Attributable to:
Non-controlling interests
MEMBERS OF ARIADNE
GROUP
Notes
2020
$’000
2019
$’000
4(a)
4(b)
13(c)
4(c)
4(d)
5(a)
8,732
1,854
347
221
(4,488)
(938)
(2,434)
(8,199)
(936)
(523)
(471)
(6,835)
—
(6,835)
307
(7,142)
8,080
2,027
2,624
1,976
3,899
(8,086)
(2,870)
(242)
(1,543)
(422)
—
5,443
(7,511)
(2,068)
844
(2,912)
OTHER COMPREHENSIVE INCOME
Items that will not be reclassified subsequently to profit or loss
Net fair value movement of the strategic portfolio revalued through OCI, net of tax 11,15(c)
Items that may be reclassified subsequently to profit or loss
Net fair value movement of cash flow hedges
Net fair value movement of property assets
Exchange difference on translation of foreign operations
15(c)
15(c)
(28,899)
(24,866)
(6)
11,009
(50)
316
—
1,090
OTHER COMPREHENSIVE INCOME FOR THE PERIOD, NET OF TAX
(17,946)
(23,460)
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
Attributable to:
Non-controlling interests
MEMBERS OF ARIADNE
Earnings per share
Basic earnings per share (cents)
Diluted earnings per share (cents)
(24,781)
(25,528)
429
(25,210)
1,136
(26,664)
(3.64)
(3.63)
(1.47)
(1.46)
The statement of comprehensive income should be read in conjunction with the accompanying notes.
17
A R I A D N E A U S T R A L I A L I M I T E D
202 0 A N N U A L R E P O R T
GROUP
Notes
2020
$’000
2019
$’000
8
9
10
11
13(c)
14
15(a)
15(c)
15(d)
34,916
2,476
5,872
43,264
16,759
30,249
39,036
760
86,804
130,068
2,033
5,450
818
8,301
170
170
8,471
41,981
2,229
6,291
50,501
14,212
58,165
32,816
597
105,790
156,291
266
4,835
463
5,564
267
267
5,831
121,597
150,460
378,156
143,274
(406,044)
115,386
6,211
121,597
378,558
163,680
(397,934)
144,304
6,156
150,460
Balance Sheet
AS AT 30 JUNE 2020
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total Current Assets
Non-Current Assets
Receivables
Other financial assets
Investments in joint ventures and associates
Property, plant and equipment
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Interest-bearing loans and borrowings
Provisions
Total Current Liabilities
Non-Current Liabilities
Provisions
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
EQUITY ATTRIBUTABLE TO MEMBERS OF ARIADNE AUSTRALIA LIMITED
Non-controlling interests
TOTAL EQUITY
The balance sheet should be read in conjunction with the accompanying notes.
18
A R I A D N E A U S T R A L I A L I M I T E D
Statement of Change in Equity
202 0 A N N U A L R E P O R T
Issued
capital
$’000
Note 15(a)
Reserves
$’000
Note 15(c)
Accumulated
losses
$’000
Note 15(d)
ARIADNE
$’000
Non-
controlling
interest
$’000
380,476
—
—
—
(1,918)
—
—
170,033
20,714
(23,752)
(3,038)
—
60
(3,375)
(374,308)
(23,626)
—
(23,626)
—
—
—
176,201
(2,912)
(23,752)
(26,664)
(1,918)
60
(3,375)
378,558
163,680
(397,934)
144,304
5,717
844
292
1,136
—
—
(697)
6,156
FOR THE YEAR ENDED 30 JUNE 2019
At 1 July 2018
Profit / (loss) for the period
Other comprehensive income
Total comprehensive income for the period
Cost of shares bought back
Cost of share-based payment
Dividends
At 30 June 2019
FOR THE YEAR ENDED 30 JUNE 2020
At 1 July 2019
378,558
163,680
(397,934)
144,304
6,156
Profit / (loss) for the period
Other comprehensive income
Total comprehensive income for the period
Cost of shares bought back
Cost of share-based payment
Dividends
At 30 June 2020
—
—
—
(402)
—
—
968
(8,110)
(7,142)
(18,068)
(17,100)
—
35
(3,341)
—
(18,068)
(8,110)
(25,210)
—
—
—
(402)
35
(3,341)
378,156
143,274
(406,044)
115,386
307
122
429
—
—
(374)
6,211
GROUP
$’000
181,918
(2,068)
(23,460)
(25,528)
(1,918)
60
(4,072)
150,460
150,460
(6,835)
(17,946)
(24,781)
(402)
35
(3,715)
121,597
The statement of changes in equity should be read in conjunction with the accompanying notes
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202 0 A N N U A L R E P O R T
GROUP
Notes
2020
$’000
2019
$’000
9,605
727
(4,869)
1,837
226
(1,000)
1,285
(309)
(213)
7,289
(4)
—
(1,151)
2,383
(3,237)
151
(2,430)
(4,288)
(7,941)
(332)
950
(402)
(1,967)
(374)
(10,066)
(7,065)
41,981
34,916
8,888
616
(13,553)
21,079
4,691
(2,026)
2,027
(422)
—
21,300
(23)
15,227
(50)
975
(9,176)
1,435
(2,000)
6,388
—
(2,742)
—
(1,918)
(3,375)
(697)
(8,732)
18,956
23,025
41,981
Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2020
Cash flows from operating activities
Receipts from rental income
Receipts from other income
Payments to suppliers and employees
Dividends and trust distributions received
Receipts from trading portfolio sales
Payments for trading portfolio purchases
Interest received
Interest and borrowing costs paid
Lease liability interest paid
Net cash flows from operating activities
16
Cash flows from investing activities
Payments for plant and equipment
Divestments of joint ventures and associates
Investments in joint ventures and associates
Proceeds from strategic portfolio sales
Payments for strategic portfolio purchases
Loans repaid by other parties
Loans advanced to other parties
Net cash flows from / (used in) investing activities
Cash flows from financing activities
Repayment of lease liabilities
Repayments of borrowings
Proceeds from borrowings
Payments under share buy-back
Dividends paid to members of the parent entity
Dividends paid to non-controlling interests
Net cash flows used in financing activities
Net (decrease) / increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
15(a)
7
8
The statement of cash flows should be read in conjunction with the accompanying notes.
20
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202 0 A N N U A L R E P O R T
Notes to Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
1. CORPORATE INFORMATION
The consolidated financial statements of Ariadne Australia Limited (“Ariadne”) and its controlled entities (“the Group”) for the year ended
30 June 2020 were authorised for issue in accordance with a resolution of the Directors on 28 August 2020.
Ariadne is a for profit company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities
Exchange (“ASX”).
A description of the Group's operations and of its principal activities is included in the Directors' Report on pages 6 to 15.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation
The consolidated financial statements include the parent entity, Ariadne, and its controlled entities. The financial report is a general-purpose
financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting
Standards as issued by the Australian Accounting Standards Board (“AASB”).
The financial report has been prepared on a historical cost basis, except for investments in equity instruments and derivative financial
instruments which have been measured at fair value.
Where necessary, comparatives have been reclassified and repositioned for consistency with current year disclosures.
The Group has also adopted all of the new and revised Standards and Interpretations issued by the AASB that are relevant and effective
for the current year. New and revised Standards and amendments thereof and Interpretations effective for the current year that are
relevant to the Group include:
• AASB 2017-6 ‘Amendments to Australian Accounting Standards – Prepayment Features with Negative Compensation’
• AASB 2017-7 ‘Amendments to Australian Accounting Standards – Long-term Interests in Associates and Joint Ventures’
• AASB 2018-1 ‘Amendments to Australian Accounting Standards – Annual Improvements 2015-2017’
• AASB 2018-2 ‘Amendments to Australian Accounting Standards – Plan Amendment, Curtailment or Settlement’
• AASB 16 ‘Leases’
•
•
Interpretation 22 Foreign Currency Transactions and Advance Consideration
Interpretation 23 Uncertainty over Income Tax Treatments
The Group adopted AASB 16 Leases on 1 July 2019. AASB 16 replaces the previous AASB 117 Leases standard and provides a new
lease accounting model which requires a lessee to recognise a right of use asset representing its right to use the underlying asset and
lease liabilities for all leases with a term of more than 12 months, unless the underlying asset is of a low value. The amortisation of the
right of use asset and interest on the lease liability has been recognised in the consolidated income statement, further details are set
out at Note 4(d) and Note 18(a).
In the application of the Group’s accounting policies, management is required to make judgements, estimates, and assumptions about
the carrying amounts of assets and liabilities that are not readily available or apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from
these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised if the revision effects only that period, or in the period of the revision and future periods if the
revision affects both current and future periods.
On 27 February 2020, the Australian government declared COVID-19 a national pandemic. The Governor General of Australia on 18
March 2020 soon after declared COVID-19 a Human Biosecurity Emergency. Governmental measures aimed at suppressing the
transmission of coronavirus in Australia have had a consequential impact on economic activity generally across companies and securities
in which the Group invests. The assessment of indicators of impairment and expected credit losses included a consideration of the
possible implications that COVID-19 may have on the recoverability of the Group’s investments or the customer’s ability to pay. Refer
Note 10 and Note 11.
(b) Compliance
The financial report also complies with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting
Standards Board.
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Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2020
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(c) Future changes
There are a number of Standards and Interpretations that will be mandatory in future reporting periods. The Group has not elected to
early adopt these Standards and Interpretations and does not expect them to have a material effect on the financial position or performance
of the Group.
Affected Standards and Interpretations
Periods beginning
on or after
Application date
for Group
AASB 2018-7 Amendments to Australian Accounting Standards – Definition of material
1 January 2020
30 June 2021
AASB 2019-1 Amendments to Australian Accounting Standards – References to the
Conceptual Framework
AASB 2019-5 Amendments to Australian Accounting Standards – Disclosure of the
Effect of New IFRS Standards Not Yet Issued in Australia
AASB 2020-1 Amendments to Australian Accounting Standards – Classification of
Liabilities as Current or Non-Current
1 January 2020
30 June 2021
1 January 2020
30 June 2021
1 January 2022
30 June 2023
AASB 2020-3 Amendments to Australian Accounting Standards – Annual Improvements
2018-2020 and Other Amendments
1 January 2022
30 June 2023
(d) Basis of consolidation
The consolidated financial statements comprise the financial statements of Ariadne and its controlled entities. Control is achieved when
the Group;
•
•
•
has power over the investee;
is exposed, or has rights, to variable returns from its involvement with the investee; and
has the ability to use its power to affect its returns.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of
the three elements of control listed above.
The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting
policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist.
Subsidiaries are fully consolidated from the date on which control is obtained by the Group and cease to be consolidated from the date
on which control is transferred out of the Group. Where there is loss of control of a subsidiary, the consolidated financial statements
include the results for that part of the reporting period during which Ariadne had control.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profits and losses
resulting from intra-group transactions, have been eliminated in full.
(e) Significant judgements and estimates
Critical accounting policies for which significant judgements, estimates and assumptions are made are detailed below. Actual results may
differ from these estimates under different assumptions and conditions and may materially affect the financial result or the financial position
reported in future periods.
Details in relation to the accounting policies applied when assessing the recoverable amount of the Group’s assets and assets of joint
ventures are included in Note 2(f) and in Note 2(i).
Details of the significant judgements and estimates made in relation to the treatment of available income tax losses have been disclosed in
Note 5.
No other significant judgements or estimates that require additional disclosure in the financial report in the process of applying the Group’s
accounting policies have been made.
Investments in joint ventures and associates
(f)
An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and
operating policy decisions of the investee but is not control or joint control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the
joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about
the relevant activities require unanimous consent of the parties sharing control.
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202 0 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2020
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Investments in joint ventures and associates (continued)
(f)
The results, assets and liabilities of associates or joint ventures are incorporated in these consolidated financial statements using the equity
method of accounting, except when the investment, or a portion thereof, is classified as held for sale, in which case it is accounted for in
accordance with AASB 5 Non-current Assets Held for Sale and Discontinued Operations.
Under the equity method, an investment in an associate or a joint venture is initially recognised in the consolidated statement of financial
position at cost and adjusted thereafter to recognise the Group's share of the profit or loss and other comprehensive income of the
associate or joint venture. When the Group's share of losses of an associate or a joint venture exceeds the Group's interest in that
associate or joint venture (which includes any long-term interests that, in substance, form part of the Group's net investment in the
associate or joint venture), the Group discontinues recognising its share of further losses. Additional losses are recognised only to the
extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture. An
investment in an associate or a joint venture is accounted for using the equity method from the date on which the investee becomes an
associate or a joint venture.
The fair value accounting for Orams Marine Village requires significant management judgement in respect of the capitalisation rate adopted
within the Capitalisation Method Valuation and the discount rate and terminal yield adopted within the Discounted Cash Flow Valuation.
When a group entity transacts with an associate or a joint venture of the Group, profits or losses resulting from the transactions with the
associate or joint venture are recognised in the Group’s consolidated financial statements on a gross basis. Related party transactions are
disclosed in Note 19.
(g) Foreign currency translation
Both the functional and presentation currency of Ariadne and all of its subsidiaries is Australian dollars (“AUD”).
All transactions in foreign currencies are initially recorded in the functional currency of the relevant entity at the exchange rate applicable
at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the functional currency
of the entity at the rate of exchange applicable at the Balance Sheet date.
Revenues derived and expenses incurred by entities with a functional currency other than AUD are translated into the Group’s
presentation currency using the average exchange rate applicable in the reporting period. Assets and liabilities are translated into AUD at
the rate of exchange applicable at the Balance Sheet date. All exchange differences arising on the translation into the presentation currency
of the Group are recorded in the foreign currency translation reserve.
(h) Investment properties
Investment properties are initially measured at cost, including any associated transaction costs of acquisition. Costs incurred in the day-to-
day servicing of the asset are excluded from the cost base of the asset.
Subsequent to initial recognition, investment properties are stated at fair value. Market conditions applicable to the asset at Balance Sheet
date are considered in assessing fair value. Gains or losses arising from changes in fair values are recognised in the consolidated Statement
of Comprehensive Income in the year in which they arise.
When investment property is transferred to development inventories, the deemed cost of the inventory is its fair value as at the date of
the change in use.
(i) Recoverable amount of assets
At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment
exists, the Group makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount
the asset is considered impaired and is written down to its recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset’s
value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely
independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash-generating
unit to which the asset belongs.
Investments
(j)
The Group has two separate and distinct investment portfolios and designates its investments as either trading or strategic. The strategic
portfolio is further broken down into strategic portfolio revalued through profit and loss and strategic portfolio revalued through other
comprehensive income, both held for long term capital appreciation but differentiated by their accounting treatment under accounting
standard AASB 9 – Financial instruments.
Additions, for all portfolios, are initially recognised at cost, being the fair value of the consideration given and including acquisition charges
associated with the investment.
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202 0 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2020
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Investments (continued)
(j)
Investments within all the portfolios are remeasured to fair value based on the appropriate level inputs at the end of the reporting period.
Gains or losses on investments in the trading portfolio and the strategic portfolio revalued through profit and loss are recognised in the
Statement of Comprehensive Income. In contrast, gains or losses on the strategic portfolio revalued through other comprehensive income
are recognised as a separate component of equity and are not reclassified to the profit or loss on either its disposal or on recognition of
an impairment charge.
The Australian accounting standards set out the following hierarchy for fair value measurement for investments in financial instruments
which are set out as below:
Level 1: - Quoted prices in active markets for identical assets or liabilities.
Level 2: - Inputs other than quoted prices, which can be observed either directly (as prices) or indirectly (derived from prices).
Level 3: - Inputs that are not based on observable market data.
Investments remeasured to fair value are disclosed in Note 9 and Note 11.
For investments carried at amortised cost, gains and losses are recognised in the Statement of Comprehensive Income when the
investments are derecognised or impaired, as well as through the amortisation process.
(k) Derecognition of financial instruments
The derecognition of a financial instrument takes place when the Group no longer controls the contractual rights that comprise the financial
instrument, which is normally the case when the instrument is sold, or all the cash flows attributable to the instrument are passed through
to an independent third party.
(l) Trade and other receivables
Trade receivables, which generally have 30-day terms, are recognised and carried at original invoice amount less an allowance for any
uncollectible amounts. An estimate for doubtful debts is made for expected credit losses. Bad debts are written off when identified.
(m) Cash and cash equivalents
Cash and short-term deposits in the Balance Sheet comprise cash at bank and in hand and short-term deposits which are readily convertible
to known amounts of cash and are subject to an insignificant change in value.
For the purposes of the Statement of Cash Flows, cash and cash equivalents are as defined above, net of outstanding bank overdrafts.
(n) Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs associated with
the borrowing.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest
method. Amortised cost is calculated by taking into account any issue costs, and any discount or premium on settlement.
Gains and losses are recognised in the Statement of Comprehensive Income when the liabilities are derecognised and as well as through
the amortisation process.
(o) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an
outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation.
Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is
recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in
the Statement of Comprehensive Income net of any reimbursement.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax
rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
(p) Share-based payment transactions
The Group provides benefits to employees (including Directors) of the Group in the form of share-based payment transactions, whereby
employees render services in exchange for shares or rights over Ariadne shares (“equity-settled transactions”).
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A R I A D N E A U S T R A L I A L I M I T E D
202 0 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2020
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(q) Share-based payment transactions (Continued)
The cost of these equity-settled transactions is measured with reference to the fair value at the date at which the shares or rights over
shares are granted. Fair value is determined using a Black Scholes model.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the
performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (“vesting
date”).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects the extent to which
the vesting period has expired.
Previously recognised share based payment expenses are reversed in the Statement of Comprehensive Income to the extent that awards
do not ultimately vest.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified.
In addition, an expense is recognised for any increase in the value of the transactions as a result of the modification, as measured at the
date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised
for the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement
award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as
described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.
(r) Leases
Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised
at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments.
Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest
on the remaining balance of the liability. Finance charges are charged directly to the Statement of Comprehensive Income.
Right of use assets, representing the Groups right to use the underlying asset, and corresponding lease liabilities for all leases with a term
of more than 12 months are recognised on balance sheet, unless the underlying asset is of a low value. The amortisation of the right of use
asset and interest on the lease liability is recognised over the term of the lease in the consolidated income statement.
Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Operating
lease payments are recognised as an expense in the Statement of Comprehensive Income on a straight-line basis over the lease term.
(s) Revenue
Revenue is recognised at an amount that reflects the consideration for which the Group is expecting to be entitled for transferring goods
or services. The following specific recognition criteria must also be met before revenue is recognised:
Rental income
Rental income, which includes car parking and marina revenue, is recognised at transfer of service, which is generally at the time of delivery.
Interest income
Revenue is recognised as the interest accrues using the effective interest method (which is the rate that exactly discounts estimated future
cash receipts through the expected life of the financial instrument to the net carrying amount of the financial asset).
Dividend income
Revenue is recognised when the shareholder’s right to receive the payment is established.
Rendering of services
Revenue from the rendering of services is recognised at amounts which reflect the transfer of those services to the customer.
(r) Employee benefits
Provision is made for employee benefits accumulated as a result of employees rendering services up to the reporting date. These benefits
include salaries/wages and on costs, leave provisions, superannuation and share based payments.
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202 0 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2020
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(s) Employee benefits (Continued)
Liabilities arising in respect of wages and salaries, annual leave, and any other employee benefits expected to be settled within twelve
months of the reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when
the liability is settled. All other employee benefit liabilities are measured at the present value of the estimated future cash outflow to be
made in respect of services provided by employees up to the reporting date. In determining the present value of future cash outflows, the
market yield as at the reporting date on national government bonds, which have terms to maturity approximating the terms of the related
liability, are used.
Employee benefit expenses and revenues arising in respect of the following categories:
(cid:190) wages and salaries, non-monetary benefits, annual leave, long service leave, and other leave benefits; and
(cid:190) other types of employee benefits
are recognised against profits on a net basis in their respective categories.
(t) Income tax
Deferred income tax is provided on all taxable temporary differences at the Balance Sheet date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences:
(cid:190) except where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not
a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
in respect of taxable temporary differences associated with investments in subsidiaries and interests in joint ventures, except
where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences
will not reverse in the foreseeable future.
(cid:190)
Deferred income tax assets are recognised for all deductible temporary differences, including unused tax losses, to the extent that it is
probable taxable profit will be available against which the deductible temporary differences, and the carry-forward tax losses can be utilised:
(cid:190) except where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of
an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; and
in respect of deductible temporary differences associated with investments in subsidiaries, interests in joint ventures, deferred tax
assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future
and taxable profit will be available against which the temporary differences can be utilised.
(cid:190)
The carrying amount of deferred income tax assets is reviewed at each Balance Sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised
or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the Statement of Comprehensive Income.
(u) Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
(cid:190) where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the
GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
receivables and payables are stated with the amount of GST included.
(cid:190)
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the Balance
Sheet.
Cash flows are included in the Cash Flow Statement on a gross basis and the GST component of cash flows arising from investing and
financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.
(v) Earnings per share (“EPS”)
Basic EPS is calculated as net profit attributable to members, adjusted to exclude costs of servicing equity (other than dividends), divided
by the weighted average number of ordinary shares. Diluted EPS is calculated as net profit attributable to members, adjusted for
costs of servicing equity (other than dividends) and preference share dividends; and
(cid:190)
(cid:190) other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential
ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.
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202 0 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2020
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(w) Derivative financial instruments and hedging
Interest rate swaps are used to hedge risks associated with interest rate fluctuations. The Group may also become party to stock call
options in its favour, that are entered into to ensure the Group benefits from upward movements in stock prices underlying loans provided
to external parties.
Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are
subsequently remeasured to fair value. Derivatives are carried as assets when their fair value is positive and as liabilities when their fair
value is negative. Any gains or losses arising from changes in the fair value of derivatives, except for those that qualify as cash flow hedges,
are taken directly to the Statement of Comprehensive Income.
The fair values of interest rate swap contracts are determined by reference to market values for similar instruments.
For the purpose of hedge accounting, hedges are classified as cash flow hedges when they hedge the exposure to variability in cash flows
that is attributable either to a particular risk associated with a recognised asset or liability or to a forecast transaction.
Cash flow hedges
Cash flow hedges are hedges of exposure to variability in cash flows that is attributable to a particular risk associated with a recognised
asset or liability that is a firm commitment and that could affect profit or loss. The effective portion of the gain or loss on the hedging
instrument is recognised directly in equity, while the ineffective portion is recognised in profit or loss.
The Group tests each of the designated cash flow hedges for effectiveness at the end of each period. For interest rate cash flow hedges,
any ineffective portion is taken to the Statement of Comprehensive Income. If the hedging instrument expires or is sold, terminated or
exercised without replacement or rollover, or if its designation as a hedge is revoked (due to it being ineffective), amounts previously
recognised in equity remain in equity until the forecast transaction occurs.
(x) Land and buildings
Land and buildings held for use in the production or supply of goods or services for rental to others (excluding investment properties), or
for administrative purposes, are stated in the statement of financial position at their revalued amounts, being the fair value at the date of
revaluation, less any accumulated depreciation and accumulated impairment losses. Revaluations are performed with sufficient regularity
such that the carrying amount does not differ materially from that which would be determined using fair values at the reporting date.
Any revaluation increase arising on the revaluation of such land and buildings is credited to the properties revaluation reserve, except to
the extent that it reverses a revaluation decrease for the same asset previously recognised as an expense, in which case the increase is
credited to profit or loss to the extent of the decrease previously expensed. A decrease in carrying amount arising on the revaluation of
such land and buildings is charged as an expense to the extent that it exceeds the balance, if any, held in the properties revaluation reserve
relating to a previous revaluation of that asset.
3. SEGMENT INFORMATION
Segment accounting policies
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses,
whose operating results are regularly reviewed by the entity’s chief operating decision maker. The Group’s operating segments are
identified by internal reporting used by the Board in assessing performance and determining investment strategy. The operating segments
are based on a combination of the type and nature of products sold and/or services provided, and the type of business activity. Discrete
financial information about each of these operating divisions is reported to the Board on a regular basis.
Reportable segments are based on aggregated operating segments determined by the similarity of the products sold and/or the services
provided, and the type of business activity as these are the sources of the Group’s major risks. Operating segments are aggregated into
one reportable segment when they meet the qualitative and quantitative requirements for aggregation as prescribed by AASB 8 Operating
Segments.
Segment products and locations
The Group’s reportable segments are investments, car parking and property. The investments division comprises the Group’s investments
in securities. The car parking division includes gross revenues and expenses from car park leases owned by the Group up to the date of
termination or surrender. The property division includes all results derived from property and marina assets held by the Group, either
directly or through joint venture entities or joint venture operations.
The consolidated entity’s operations are located in Australasia.
27
A R I A D N E A U S T R A L I A L I M I T E D
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i
202 0 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2020
4. REVENUES AND EXPENSES
Revenue and Expenses from Continuing Operations
Notes
(a) Dividend income
Received from trading portfolio
Received from strategic portfolio
(b) Other income
Net fair value (loss) / gain on trading portfolio
Net fair value movement of the strategic portfolio through profit or loss
Other income
GROUP
2020
$’000
2019
$’000
347
—
347
(1,955)
1,003
1,173
221
340
2,284
2,624
1,091
1
884
1,976
Investments in the trading portfolio and strategic portfolio revalued through profit or loss, are remeasured to fair value based on the
appropriate level inputs at the end of the reporting period as outlined in Note 2(j). The carrying values of these portfolios are disclosed in
Note 9.
(c) Employee benefits expense
Salaries, wages and on costs
Leave provisions
Superannuation
Share-based payment expense
(d) Depreciation and amortisation
Plant and equipment depreciation
Right of use asset amortisation
2,361
(105)
143
35
2,434
242
7,957
8,199
2,534
111
165
60
2,870
242
—
242
The adoption of AASB 16 Leases on 1 July 2019 resulted in right of use assets of $8,358 of and a corresponding amount of lease liabilities
being recorded to the balance sheet. During the period, right of use assets were amortised by $7,957 and lease rental payments of $8,154
were used to reduce the lease liabilities by $7,941 and meet $213 of lease liability interest. At balance date, the carrying value of the
Group’s right of use assets were $401 and lease liabilities were $417. A reconciliation a operating lease commitments as at 30 June 2019
to the lease liabilities recognised at 1 July 2019 and 30 June 2020 is set out at Note 18(a).
29
A R I A D N E A U S T R A L I A L I M I T E D
Notes to Financial Statements (Continued)
202 0 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2020
5. INCOME TAX
(a) Income tax expense reconciliation
A reconciliation between income tax expense and accounting profit before income
tax multiplied by the Group’s applicable income tax rate is as follows:
Notes
Group accounting loss after tax reported in the Statement of Comprehensive Income
Income tax expense reported in the Statement of Comprehensive Income
Group accounting profit before income tax
At the Group’s statutory income tax rate of 27.5%
Permanent differences
Other movements
Prior year under provision
Tax losses not recognised
Movement in recognised deferred tax asset
Income tax expense reported in the Statement of Comprehensive Income
(b) Deferred tax balances
GROUP
2020
$’000
2019
$’000
(7,141)
—
(7,141)
(1,964)
(60)
899
(796)
1,921
—
—
(2,068)
7,511
5,443
1,497
(2,201)
(1,130)
(352)
(2,502)
12,199
7,511
Ariadne and its wholly owned Australian resident subsidiaries are part of a tax consolidated group. Ariadne, the head company, currently
has significant carried forward income and capital tax losses that are available to offset future taxable profits. At 30 June 2020, these are
estimated at $83,940 (2019: $82,947) and $70,599 (2019: $78,388) respectively. The value attributable to these tax losses have not been
recognised as an asset on the Balance Sheet.
In accordance with the Group’s accounting policy for income tax, an assessment was undertaken to estimate the probable recoverability
and sufficiency of the Group’s deferred tax assets. The assessment determined that no deferred tax asset would be recorded on the
Group’s Balance Sheet at 30 June 2020 (2019: nil).
A deferred tax asset for the revenue tax losses carried by the Group has not been recognised at reporting date, as realisation of the benefit
is not regarded as probable. The unrecognised value of the Group’s deferred tax asset relating to revenue tax losses is set out in the table
below. The value of the deferred tax asset relating to revenue tax losses will only be realised if:
(a) future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised; and
(b) the conditions for deductibility imposed by tax legislation continue to be complied with; and
(c) no changes in tax legislation adversely affect the consolidated entity in realising the benefit.
The Board has concluded that there is insufficient evidence to estimate future capital gains and losses other than those non-current assets
which are carried at fair value under accounting standards. As such, no deferred tax asset of has been recognised at balance date (2019:
nil), The unrecognised value of the Group’s deferred tax asset relating to revenue tax losses is set out in the table below.
Unrecognised deferred tax assets comprises:
Tax losses - revenue
Tax losses - capital
Net deferred tax asset unrecognised
23,083
19,415
42,498
22,810
21,557
44,367
30
A R I A D N E A U S T R A L I A L I M I T E D
202 0 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2020
6. EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of Ariadne by the
weighted average number of ordinary shares outstanding during the year as outlined in Note 2(v).
Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the
weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would
be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.
Earnings and share data used in the calculations of basic and diluted earnings per
share:
Net profit / (loss) attributable to members ($’000)
Earnings used in calculating basic and diluted earnings per share ($’000)
Total comprehensive income attributable to members ($’000)
Total comprehensive earnings used in calculating basic and diluted earnings per share ($’000)
ARIADNE
2020
2019
(7,142)
(7,142)
(25,210)
(25,210)
(2,912)
(2,912)
(26,664)
(26,664)
Weighted average number of ordinary shares used in calculating basic earnings per share
Effect of dilutive securities:
Employee share options
Weighted average number of ordinary shares used in calculating diluted earnings per share
196,429,922
197,858,141
500,000
196,929,922
1,000,000
198,858,141
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Total comprehensive earnings per share (cents per share)
Total comprehensive diluted earnings per share (cents per share)
7. DIVIDENDS PAID AND PROPOSED ON ORDINARY SHARES
Dividends paid or declared during the year:
FY19 Final 70% franked dividend of 1.0 cents per share (2018: 60% franked 1.0 cents)
FY20 Interim 70% franked dividend of 0.7 cents per share (2019: fully franked 0.7 cents)
(3.64)
(3.63)
(12.83)
(12.80)
(1.47)
(1.46)
(13.48)
(13.41)
$’000
$’000
1,967
1,374
3,341
1,997
1,378
3,375
In light of the ongoing volatility in market conditions, the Board has determined to preserve cash reserves during this highly uncertain
period. As a result, no final dividend for FY20 will be paid. Payment of the FY20 interim dividend, of 0.7 cents per share declared in
February 2020 and deferred in March 2020, will be paid on 24 September 2020.
Franking Account
The amount of franking credits available for distribution from the franking account at year end was $649 (2019: $1,023).
31
A R I A D N E A U S T R A L I A L I M I T E D
Notes to Financial Statements (Continued)
202 0 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2020
8. CASH AND CASH EQUIVALENTS
Cash at call
Cash on term deposit
9. OTHER CURRENT ASSETS
Trading portfolio
Strategic portfolio revalued through profit or loss
Prepayments and other assets
GROUP
Notes
2020
$’000
2019
$’000
24,916
10,000
34,916
3,908
1,874
90
5,872
21,981
20,000
41,981
5,089
1,000
202
6,291
Investments in the trading portfolio and strategic portfolio revalued through profit or loss, are remeasured to fair value based on the
appropriate level inputs at the end of the reporting period as outlined in Note 2(j). The fair value movement of these portfolios are
disclosed in Note 4(b).
10. RECEIVABLES (NON-CURRENT)
Related entity loans and advances
Other loans and advances
The loans to related entities are directly supported and secured by the assets of the borrower.
11. OTHER FINANCIAL ASSETS
Cost
Accumulated fair value adjustments
Net carrying amount
Reconciliations for listed strategic investments
Opening balance
Additions
Fair value adjustments through other comprehensive income
Disposals
Net carrying amount of listed investments
Reconciliations for unlisted strategic investments
Opening balance
Additions
Fair value adjustments through profit or loss
Fair value adjustments through other comprehensive income
Disposals
Net carrying amount of unlisted investments
(i)
(ii)
(i)
(i)
10,932
5,827
16,759
8,400
5,812
14,212
69,909
(39,660)
30,249
46,431
185
(26,011)
(2,382)
18,223
11,734
3,052
128
(2,888)
—
12,026
67,837
(9,672)
58,165
79,820
2,426
(35,815)
—
46,431
3,877
4,775
—
4,438
(1,356)
11,734
(i)
Investments in the strategic portfolio are remeasured to fair value based on the appropriate level inputs at the end of the reporting period
as outlined in Note 2(j).
(ii) Material additions during the period include investments associated with King River Capital Management Pty Ltd.
32
A R I A D N E A U S T R A L I A L I M I T E D
Notes to Financial Statements (Continued)
202 0 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2020
12. CONTROLLED ENTITIES
NAME
Ariadne Administration Pty Ltd
Ariadne Capital Pty Ltd
Ariadne Freehold Pty Ltd
Ariadne Holdings Pty Ltd
Ariadne Insurance Pty Ltd
Ariadne Investment Holdings Pty Ltd
Ariadne Marinas Oceania Pty Ltd
Ariadne Properties Pty Ltd
Delta Equities Pty Ltd
Freshxtend International Pty Ltd
Kings Parking Corporate Pty Ltd
Portfolio Services Pty Ltd
Entities deregistered during the reporting period
Ariadne Property Investments Pty Ltd
Freshxtend Technologies Corp
Valjul Pty Ltd
Place of
incorporation
Percentage of equity held by
Ariadne
QLD
QLD
NSW
ACT
NSW
QLD
QLD
QLD
NSW
QLD
QLD
QLD
QLD
CAD
QLD
2020
100
100
100
100
100
100
100
100
100
53
100
100
—
—
—
2019
100
100
100
100
100
100
100
100
100
53
100
100
100
53
100
13. INVESTMENTS IN JOINT VENTURES AND ASSOCIATES
(a) Details of the Group’s investment in joint ventures and associates
Name
Principal activity
Place of
incorporation
Proportion of ownership
interest and voting power held
by the Group
Chifley Investment Partners Trust 1
Lake Gold Pty Ltd
Orams NZ Unit Trust ^
Kippax Property Trust
Hillgrove Resources Limited *
AgriCoat NatureSeal Limited
NatureSeal Inc
Investment management
Mineral exploration
Marina management
Property investment
Mining exploration
Food life extension technology
Food life extension technology
AUS
AUS
AUS
AUS
AUS
UK
US
2020
50%
50%
50%
50%
25%
17%
17%
2019
50%
50%
50%
—
25%
17%
17%
Entities deregistered during the reporting period
Seyaal Unit Trust
Property investment
AUS
—
50%
^Refer to Note 13(c)
* Included in Hillgrove Resources Limited‘s FY20 half year accounts, lodged on 26 August 2020, was a heading ‘Material uncertainty related to going concern’
within the independent auditor’s review report drawing attention to the company ability to continue as a going concern being reliant on additional funding
within the next twelve months.
(b) Aggregate information of joint ventures and associates
Balance at the beginning of the reporting period
Share of joint ventures’ and associates’ profits
Share of joint ventures’ and associates’ reserves
Net investment / (divestment) in joint venture and associates
Distributions received from joint ventures and associates
Carrying amount of investment in joint ventures and associates at reporting period end
32,816
(4,488)
11,047
1,151
(1,490)
39,036
61,269
3,899
1,280
(15,177)
(18,455)
32,816
The Group’s share of joint ventures’ and associates’ commitments and contingent liabilities is disclosed in Note 18.
33
A R I A D N E A U S T R A L I A L I M I T E D
202 0 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2020
13. INVESTMENTS IN JOINT VENTURES AND ASSOCIATES (Continued)
(c) Summary financial information of material joint ventures and associates
Orams NZ Unit Trust (“ONZUT”)
Revenue
Profit
Share of profit at 50%
Other comprehensive income
Share of other comprehensive income at 50%
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Share of net assets at 50%
Notes
2020
$’000
2019
$’000
3,276
(497)
(249)
21,591
10,796
226
66,442
(229)
(27,098)
39,344
19,672
9,364
2,389
1,195
708
354
132
47,332
(5,180)
(29,081)
18,251
9,125
As announced to the market on 23 October 2019, ONZUT merged its business and property assets with Orams Marine Services Limited to
create Orams Group Limited (“the Merger” or together “Orams Group”). At balance date, ONZUT held a 76% equity interest in the Orams
Group, with Ariadne indirectly holding a 38% equity interest via its interest in ONZUT.
The assets and liabilities acquired by Orams Group under the Merger were booked at their fair values as at the date of the merger with the
property assets also remeasured to fair value on balance date. Ariadne’s share of loss for the period was $249. In addition, a positive
contribution of $10,796 (2019: $354), including the Group’s share of the uplift in valuation of the underlying property asset - Orams Marine
Village, was reported through the Statement of Comprehensive Income. The fair value accounting for Orams Marine Village requires significant
management judgement in respect of the capitalisation rate adopted within the Capitalisation Method Valuation and the discount rate and
terminal yield adopted within the Discounted Cash Flow Valuation.
Orams Group now operates the Marina and Orams Marine Services, New Zealand’s premier marine facility and largest marine maintenance
and refit services business respectively. It is also undertaking the development of a new marine refit facility on the adjoining property known
as Site 18 in Auckland’s Wynyard quarter. In conjunction with the Merger, the acquisition conditions for Site 18, as included in the development
agreement signed in February 2019 between the Orams Group and Auckland City’s regeneration agency Panuku Development Auckland, were
satisfied and the prepayment for the 125-year ground lease and associated water space was completed. The lease acquisition by the Orams
Group was funded utilising a debt facility procured for the acquisition and development of Site 18 - Stage 1A Works enabling the Marina to
triple the capacity of its vessel refit operation. During the period a 125-year prepayment for the remaining ground lease and associated water
space was also completed. The targeted completion of the Stage 1A Works is aligned with the 36th Americas Cup to be held in Auckland in
early 2021. The three-stage development will feature a marine haul out and refit facility, commercial buildings and a residential component on
the northern end of Site 18. The facility will target marine vessels (including superyachts) up to 800 tonnes. The development will also provide
increased maintenance facilities for Auckland’s ferries, fishing vessels and commercial vessels. Existing marine businesses within the Marina will
also be accommodated in the new development.
During the period Governmental measures aimed at suppressing the transmission of coronavirus in New Zealand have had a consequential
impact on economic activity generally. Orams Group offered support to its tenants with several of them taking up an option to extend payment
terms or enter into an acceptable payment arrangement. Orams Marine Village remains fully tenanted. Orams Marine Village also benefits from
superyachts arriving from outside New Zealand for servicing at Orams’ facilities. A scheme recently outlined by the New Zealand Government
has allowed superyachts to continue to enter New Zealand under strict conditions. Orams has, to date, received two superyachts under this
scheme with further visitations anticipated over the coming period. The Directors continue to actively monitor the Orams Group’s exposure
and take measures as considered necessary to lessen the financial impact. At the date of this financial report we expect any shortfall in revenue
and operating cash flows can be covered by operating profits, and available cash in Orams Group. Notwithstanding this, the Directors have
also considered subsequent events based on all available information, including an update from independent valuers up to the date of signing
the Directors declaration in these financial statements. Based on this update and considering all other information available, the Directors have
concluded that there is no evidence of a material change in the fair value of Orams Group underlying property asset between 30 June 2020
and the date of signing the Directors declaration in these financial statements.
On 28 February, Ariadne, entered into conditional agreements to acquire an additional 30% equity interest in ONZUT from an existing
unitholder subject to obtaining the approval of the New Zealand Overseas Investment Office as well as other necessary consents. After the
balance date, on 14 July 2020, Ariadne announced that all approvals and necessary consents had been received and that the additional 30%
interest had been transferred to Ariadne, increasing its interest in the ONZUT to 80% and its indirect holding in Orams Group Limited to
61%. ONZUT is now a subsidiary of Ariadne and its results will be consolidated by Ariadne in FY21.
34
A R I A D N E A U S T R A L I A L I M I T E D
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2020
14. INTEREST-BEARING LOANS AND BORROWINGS
202 0 A N N U A L R E P O R T
Current and non-current
Interest bearing facilities – current
Interest bearing facilities – non current
GROUP
2020
$’000
2019
$’000
5,450
—
5,450
4,835
—
4,835
The Group repaid a NZ$350 loan facility and drew down $950 from its main loan facility during the period, reducing the Group’s unused
and available loan facility to $4,296 (2019: $5,245) as summarised in the table.
Financing facilities available
Total facilities
Bank loan facilities
Other facilities not recorded on the Group’s Balance Sheet
Facilities used at reporting date
Bank loan facilities
Other facilities not recorded on the Group’s Balance Sheet
Facilities unused at reporting date
Bank loan facilities
Other facilities not recorded on the Group’s Balance Sheet
15. CONTRIBUTED EQUITY AND RESERVES
(a) Ordinary Ariadne shares on issue
9,746
304
5,450
304
4,296
—
10,080
304
4,835
304
5,245
—
At beginning of the reporting period
Shares bought back
Balance at reporting period end
Note
2020
2019
Number of
shares
196,892,360
(650,000)
196,242,360
$’000
378,558
(402)
378,156
Number of
shares
199,669,088
(2,776,728)
196,892,360
$’000
380,476
(1,918)
378,558
On 20 February 2020, as part of ongoing capital management initiatives, Ariadne extended its on-market buy-back facility for a further
twelve months. The buy-back is for the purpose of acquiring shares where they are trading at prices below the Board’s opinion of the
intrinsic value of the shares, such acquisitions benefiting all shareholders. Ordinary shares entitle their holder to one vote, either in person
or by proxy, at a meeting of Ariadne.
(b) Share Options
Employee options over Ariadne ordinary shares
At beginning of the reporting period
Employee share options issued
Employee share options exercised
Balance at reporting period end
ARIADNE
2020
2019
Number of
options
Number of
options
1,500,000
—
—
1,500,000
1,000,000
500,000
—
1,500,000
Each option entitles the holder to purchase one ordinary share. Further details of the terms and conditions of the options are set out in
the Remuneration Report.
35
A R I A D N E A U S T R A L I A L I M I T E D
Notes to Financial Statements (Continued)
202 0 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2020
15. CONTRIBUTED EQUITY AND RESERVES (Continued)
(c) Reserves
Share
options
reserve
Financial
asset
revaluation
reserve
Property
asset
revaluation
reserve
Cash
flow
hedge
reserve
Foreign
currency
translation
reserve
At 1 July 2018
Current year profits to profit reserve
Movements through OCI, net of tax
Cost of share-based payment
Dividends
At 30 June 2019
Current year profits to profit reserve
Movements through OCI, net of tax
Movements within reserves
Cost of share-based payment
Dividends
$’000
69
—
—
60
—
$’000
15,194
—
(24,866)
—
—
129
(9,672)
—
—
—
35
—
—
(28,899)
(1,217)
—
—
$’000
—
—
—
—
—
—
—
11,009
—
—
—
$’000
(310)
—
316
—
—
6
—
(6)
—
—
—
Profits
reserve
$’000
83,699
20,714
—
—
(3,375)
Capital
profits
reserve
$’000
70,022
—
—
—
—
ARIADNE
$’000
170,033
20,714
(23,752)
60
(3,375)
$’000
1,359
—
798
—
—
2,157 101,038
70,022 163,680
—
(172)
—
—
—
968
—
—
—
(3,341)
—
—
1,217
—
—
968
(18,068)
—
35
(3,341)
At 30 June 2020
164
(39,788)
11,009
—
1,985
98,665
71,239 143,274
Nature and purpose of reserves
Share options reserve
The share options reserve records the value of equity benefits outstanding, provided to employees and Directors as part of their
remuneration.
Property asset revaluation reserve
The property asset revaluation reserve records the Group’s share of movements in the fair value of property assets revalued through
other comprehensive income net of tax as recognised in other comprehensive income.
Financial asset revaluation reserve
The financial asset revaluation reserve records the Group’s share of movements in the fair value of the strategic portfolio revalued through
other comprehensive income net of tax as recognised in other comprehensive income.
Cash flow hedge reserve
The cash flow hedge reserve records the Group’s share of movements in the fair value of effective hedging instruments against hedged
risks as recognised in other comprehensive income.
Foreign currency translation reserve
The foreign currency translation reserve records exchange differences arising from the translation of the financial statements of foreign
subsidiaries, joint ventures and associates with a non-Australian dollar functional currency as recognised in other comprehensive income.
Profit reserve
The profit reserve is used to accumulate distributable profits, preserving the characteristics of profit by not appropriating against prior year
accumulated losses. The reserve can be used to pay taxable dividends.
The 30 June 2020 amount carried to profits reserve (in accordance with director resolutions) of $968 (2019: $20,714) includes an amount
of $503 (2019: $20,714) relating to subsidiary entities and is not available for distribution as frankable dividends to the equity holders of
Ariadne at 30 June 2020.
Capital profits reserve
The capital profits reserve is used to accumulate realised capital profits. The reserve can be used to pay dividends or issue bonus shares.
$1,217 was carried to capital profits reserve during the period. (2019: nil).
36
A R I A D N E A U S T R A L I A L I M I T E D
Notes to Financial Statements (Continued)
202 0 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2020
15. CONTRIBUTED EQUITY AND RESERVES (Continued)
(d) Accumulated losses
Opening balance
Net loss not carried to profit reserve
Closing balance
16. CASH FLOW STATEMENT RECONCILIATION
Reconciliation of the net loss after tax to the net cash flows from operations
GROUP
Notes
2020
$’000
2019
$’000
(397,934)
(8,110)
(406,044)
(374,308)
(23,626)
(397,934)
Net loss after tax
(6,835)
(2,068)
Adjustments for:
Share options expense
Amortisation of right of use assets
Depreciation of non-current assets
Impairments
Share of joint ventures’ and associates’ profits
Distributions received from joint ventures and associates
Income tax expense
Transfers to / (from) provisions:
Lease liabilities
Employee entitlements
Changes in assets and liabilities:
(Increase) / decrease in trade and other receivables
(Increase) / decrease in trading portfolios
(Increase) / decrease in strategic portfolio revalued through profit or loss
(Increase) / decrease in prepayments
(Decrease) / increase in payables and accruals
Effects of exchange rate changes on cash held in foreign currencies
Net cash from operating activities
4(c)
18(a)
13(c)
13(c)
5(a)
4(c)
4(b)
35
7,957
242
471
4,488
1,490
—
(55)
(105)
(1,072)
1,181
(1,003)
112
395
(12)
7,289
60
—
242
—
(3,899)
18,455
7,511
4
111
303
1,574
1
(81)
(905)
(8)
21,300
37
A R I A D N E A U S T R A L I A L I M I T E D
202 0 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2020
17. FINANCIAL INSTRUMENTS
(a) Financial risk management objectives and policies
The Group’s principal financial instruments include cash and short-term deposits, bank loans and receivables. These financial instruments
are maintained to ensure the Group’s operations are appropriately and efficiently financed through a combination of debt and equity, and
to enable future investment activities to be undertaken in accordance with the strategic directives of management and the Board.
The Group also has a number of other financial assets and liabilities, such as trade receivables and trade payables. These arise directly from
operating activities and comprise working capital balances.
The main risks arising from the Group’s financial instruments are price risk and credit risk. The Group’s price risk and credit risk policies
are included in Note 17(d) and Note 17(e) below. Policies for managing these risks are issued by the Board.
Details of the significant accounting policies and methods adopted, including criteria for recognition, the basis for measurement and the
basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are
disclosed in Note 2.
(b) Interest rate risk
The Group’s exposure to the risk of changes in interest rates primarily affects cash on deposit and receivables. The Group’s policy with
respect to controlling this risk is to utilise a mix of fixed and variable deposits with terms matched to known cash flows, taking into
consideration rates offered at various financial institutions. Reviews of cash deposits, future cash needs and rates offered on various financial
products take place regularly. Consideration is given to potential renewals of existing positions, alternative products and investment
options, substitute financing arrangements, alternative hedging positions, terms of deposits/borrowings and interest rate exposure. Where
appropriate, fixed rate interest instruments are negotiated to mitigate any significant rate movement.
At balance date, the Group had the following mix of financial assets and liabilities exposed to Australian variable interest rate risk:
Financial Assets
Cash and cash equivalents
Related party loans
Total financial assets exposed to interest rate risk
Financial Liabilities
Advanced facilities and commercial bills
Total financial liabilities exposed to interest rate risk
Net exposure
GROUP
2020
$’000
2019
$’000
34,916
9,102
44,018
5,450
5,450
38,568
41,981
8,400
50,381
4,835
4,835
45,546
The following sensitivity analysis is based on the interest rate risk exposures in existence throughout the period. If interest rates had been
higher or lower as illustrated in the table below, with all other variables held constant, post tax profit would have been affected as follows
(there would be no other effect on equity):
Group
+1% (100 basis points)
- 1% (100 basis points)
Post tax profit
higher / (lower)
424
(424)
385
(385)
The movement in profit is due to higher / lower interest rates from variable rate cash deposits, receivables and debt.
The estimated effect on Group profit that would arise as a result of a change to variable rates as disclosed above reflects the net cash
position of the Group throughout the year.
38
A R I A D N E A U S T R A L I A L I M I T E D
202 0 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2020
17. FINANCIAL INSTRUMENTS (Continued)
(c) Foreign currency risk
As at 30 June 2020, the Group did not have any significant exposure to movements in foreign exchange rates on any of its financial
instruments.
Throughout the year the Group conducted business with international associates and suppliers involving transactions in foreign currencies.
The Group’s exposure to movements in exchange rates is minimal due to the small number, size and nature of these operational
transactions.
(d) Price risk
The Group may at times be exposed to price risk arising from holding listed securities. Listed securities are held for both strategic and
trading purposes. All non-equity accounted listed securities are remeasured to fair values using Level 1 inputs as determined by reference
to the quoted market close price at balance date.
At reporting date, the exposure to non-equity accounted listed securities was $22,131 (2019: $51,520). If the price of non-equity accounted
listed securities had been 10% higher or lower at balance date, the Group would be impacted through income or equity by $2,213 higher
or lower (2019: $5,152).
(e) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group’s receivables and cash on deposit.
Management has credit policies in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed
on all counterparties and customers requiring material credit amounts. Credit risk is spread across counterparties when possible, and
where appropriate collateral and other guarantees in respect of financial assets are required.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the Balance Sheet.
There are no receivables as at the reporting date that management considered unlikely to be recoverable and no material receivables are
past due that have not already been provided for in Note 10.
(f) Liquidity risk
The Group manages liquidity risk by maintaining adequate cash reserves and banking facilities. Forecast and actual cash flows are
continuously monitored with the maturity profiles of the majority of financial assets and liabilities matched.
The liquidity analysis below has been determined based on contracted maturity dates and circumstances existing at reporting date. The
expected timing of actual cash flows from these financial instruments may differ.
Financial liabilities due within
6 months or less
6 – 12 months
1 – 5 years
Total financial liabilities exposed to liquidity risk
GROUP
2020
$’000
2019
$’000
2,215
5,632
53
7,900
5,079
22
—
5,101
(g) Fair values
The carrying amounts and estimated fair values of financial assets and financial liabilities for the Group held at balance date are determined
as disclosed below. The fair value of a financial asset or a financial liability is the amount at which the asset could be exchanged, or liability
settled in a current transaction between willing parties after allowing for transaction costs.
The fair values of the financial instruments of the Group approximates carrying values.
The following methods and assumptions are used to determine the net fair value of each class of financial instrument:
Cash
The carrying amount approximates fair value because of its short-term to maturity.
39
A R I A D N E A U S T R A L I A L I M I T E D
202 0 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2020
17. FINANCIAL INSTRUMENTS (Continued)
Investments
For financial instruments traded in organised financial markets, fair value is the current quoted market bid price for an asset or offer price
for a liability, adjusted for transaction costs necessary to realise the asset or settle the liability. For investments where there is no quoted
market price, a reasonable estimate of the fair value is determined by reference to the current market value of another instrument which
is substantially the same or is calculated based on the expected cash flows or the underlying net asset base of the investment.
Trade and other receivables
The carrying amount approximates fair value.
Accounts payable
The net fair value of accounts payable is based on the expected future cash out flows required to settle liabilities. As such carrying value
approximates fair value.
Loans to and from related parties
The net fair value of loans receivable and payable is based on expected future cash flows.
Advance facilities
The net fair value of advance facilities is equal to the face value of these facilities at balance date net of borrowing costs.
18. COMMITMENTS AND CONTINGENCIES
(a) Lease commitments
The Group, its joint ventures and its associates enter into operating leases as a means of acquiring access to property assets. The Group’s
and its share of lease commitments of its combined interests in joint ventures and associates is $417 (2019: $10,065).
The adoption of AASB 16 Leases on 1 July 2019 resulted in right of use assets of $8,358 of and a corresponding amount of lease liabilities
being recorded to the balance sheet. During the period, right of use assets were amortised by $7,957 and lease rental payments of $8,154
were used to reduce the lease liabilities by $7,941 and meet $213 of lease liability interest. At balance date, the carrying value of the
Group’s right of use assets were $401 and lease liabilities were $417. The following is a reconciliation to total operating lease commitments
as at 30 June 2019 to the lease liabilities recognised at 1 July 2019 and 30 June 2020.
Operating lease commitments disclosed as at 30 June 2019
Add operating lease commitments not previously included
Less operating lease commitments of joint ventures and associates
Less discounting using incremental borrowing rate
Discounted operating lease commitments as at 30 June 2019
Comprising
Current lease liabilities
Non-current lease liabilities
Lease liabilities recognised as at 1 July 2019
Add lease liability interest for the period
Less lease rental payments made during the period
Lease liabilities recognised as at 30 June 2020
Comprising
Current lease liabilities
Non-current lease liabilities
(b) Other commitments
10,065
349
(1,826)
(230)
8,358
7,972
386
8,358
213
(8,154)
417
364
53
The Group enters into contractual capital commitments with investment vehicles from time to time, as at balance date the uncalled capital
commitments for the Group were $2,094 (2019: $2,775).
After balance date on 14 July 2020, Ariadne, acquired an additional 30% equity interest in the ONZUT. The terms of the acquisition provide
that the ultimate purchase price will be determined following completion of the Site 18 Stage 1 Works (as defined in the Development
Agreement with Panuku Development Auckland). Refer to Note 13(c) for further information.
40
A R I A D N E A U S T R A L I A L I M I T E D
Notes to Financial Statements (Continued)
202 0 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2020
18. COMMITMENTS AND CONTINGENCIES (Continued)
(c) Contingent liabilities and guarantees
Controlled entities, associates and joint ventures
Ariadne, including some of its subsidiaries, have given guarantees and indemnities in relation to the borrowings and performance of several
of its controlled entities under agreements entered into by those entities. All borrowings and performance obligations are directly
supported by assets in the entities on the behalf of which these guarantees and indemnities have been provided.
Details of finance facilities for the controlled entities are included in Note 14. Ariadne has guaranteed $10,000 (2019: $10,384) of the
borrowing obligations under these facilities.
Ariadne has also provided a guarantee on behalf of ONZUT for finance facilities totalling NZ$14,400 as at 30 June 2020. The assets
provided by ONZUT as security in relation to its finance facilities are sufficient to meet its obligations.
19. RELATED PARTY DISCLOSURES
Ultimate parent
Ariadne Australia Limited is the ultimate parent company.
Related parties within the Group
Balances and transactions between Ariadne’s controlled entities have been eliminated on consolidation and are not disclosed in this note.
Details of transactions between the Group and other related parties are disclosed below.
Other related party transactions
Transaction type
Class of related party
Notes
GROUP
2020
$’000
2019
$’000
Loans to other related parties
Loans advanced / payables
Loans repaid / receivables
Investments in related parties
Equity accounted investment
Equity accounted investment
Investments in other financial assets
Other financial assets
Investments in equity accounted investments
Equity accounted investment
Other transactions
Rent received or receivable
Equity accounted investment
Interest received or receivable
Equity accounted investment
Licence fees received or receivable
Equity accounted investment
Management fees paid or payable
Equity accounted investment
Dividends and distributions received
Equity accounted investment
(i)
(i)
(ii)
(iii)
(iii)
(iv)
(v)
(vi)
2,778
151
2,628
1,000
27
348
30
73
—
—
15,227
1,715
—
—
440
18
44
13,873
All transactions with related parties are conducted on normal commercial terms and conditions.
(i) The Group advanced $948, including capitalised interest of $348, to ONZUT and $1,830 to an entity associated with Kippax Property Trust during the
period. The Group received a loan repayment of $151 from ONZUT during the period.
(ii) Mr Barter is an Executive Director of King River Capital Management Pty Ltd (“KRC”). The Group invested $2,628 (2019: $1,715) in other financial
assets associated or managed by entities related to KRC during the period.
(iii) The Group invested $1,000 for 50% to establish the Kippax Property Trust (“KPT”) and earned rental income of $23 from KPT during the period.
(iv) Gross interest earned on loans to related entities disclosed in Note 10.
(v) Mr Barter, KRC and entities associated with KRC were appointed as authorised representatives under an agreement with one of the Group’s wholly
owned subsidiaries, which holds an Australian Financial Services Licence. During the period, the Group received $30 (2019: $18) from KRC relating to this
agreement.
(vi) Mr Baffsky performed various consulting services to the Group outside of his Director’s duties. Mr Baffsky was paid on commercial terms for consulting
work performed of $44 (2019: $44). Mr Baffsky, in his role as Chairman of the Board of Directors and for other purposes, utilises an office and car park at
premises leased by the Group. The Group paid an investment management service fee of $29 (2019: nil) to an entity related to KRC during the period.
41
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202 0 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2020
20. EVENTS AFTER THE BALANCE DATE
During the period, Ariadne, entered into conditional agreements to acquire an additional 30% equity interest in the ONZUT from an
existing unitholder. As disclosed in Note 13(c) ‘Summary financial information of material joint ventures and associates’, post balance
date the conditions to the acquisition were satisfied and the transaction completed on 14 July 2020.
The outbreak of COVID-19 and the subsequent quarantine measures imposed by the Australian and other governments as well as the
travel and trade restrictions imposed by Australia and other countries in early 2020 have caused significant and widespread disruption to
businesses and economic activity in Australia. Since the reporting date, government policy in response to COVID-19 continues to change
in response to a potential “second wave”, and further lockdown regulations imposed by the Victorian State Government in August
2020. The Directors continue to actively monitor the Group’s exposure and take measures as considered necessary to lessen the financial
impact.
Apart from the matters above, there is no other matter of circumstance that has arisen since 30 June 2020 that has significantly affected,
or may significantly affect the Group’s operations, the results of those operations, or the Group’s state of affairs in the future financial
periods.
21. REMUNERATION OF AUDITORS
GROUP
2020
$
2019
$
Amounts received or due and receivable by Deloitte Touche Tohmatsu
An audit or review of the financial report of the entity and any other entity in the Group
140,800
140,400
Services in relation to the entity and any other entity in the Group
22. DIRECTOR AND EXECUTIVE DISCLOSURES
Remuneration of Key Management Personnel
Short term employee benefits
Post-employment benefits
Share based payments
Total remuneration
23. PARENT ENTITY INFORMATION
Information relating to Ariadne Australia Limited
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Reserve – capital profits
Reserve – profits
Reserve – options
Accumulated losses
Total shareholders’ equity
Profit / (loss) of the parent entity
Total comprehensive income of the parent entity
—
—
140,800
140,400
1,698
109
35
1,842
1,780
117
60
1,957
ARIADNE
2020
$’000
2019
$’000
500
38,634
—
—
378,156
2,955
29,713
164
(372,355)
38,633
465
465
3,300
41,876
—
—
378,558
2,955
32,589
129
(372,355)
41,876
(8,896)
(8,896)
The nature and purpose of each reserve is disclosed in Note 15(c) and details of guarantees given are recorded in Note 18(c).
42
A R I A D N E A U S T R A L I A L I M I T E D
202 0 A N N U A L R E P O R T
Directors’ Declaration
FOR THE YEAR ENDED 30 JUNE 2020
In accordance with a resolution of the Directors of Ariadne Australia Limited, I state that:
1. In the opinion of the Directors:
(a) the financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including;
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2020 and of its performance for the year
ended on that date; and
(ii) complying with the Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations 2001; and
(b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 2; and
(c) there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.
2. This declaration has been made after receiving the declarations required to be made to the Directors in accordance with section 295A
of the Corporations Act 2001 for the financial year ending 30 June 2020.
On behalf of the Board
David Baffsky, AO
Chairman
Sydney
28 August 2020
43
A R I A D N E A U S T R A L I A L I M I T E D
Independent Audit Report
202 0 A N N U A L R E P O R T
Deloitte Touche Tohmatsu
A.B.N. 74 490 121 060
Grosvenor Place
225 George Street
Sydney NSW 2000
PO Box N250 Grosvenor Place
Sydney NSW 1217 Australia
DX 10307SSE
Tel: +61 (0) 2 9322 7000
Fax: +61 (0) 2 9322 7001
www.deloitte.com.au
Independent Auditor’s Report to the members
of Ariadne Australia Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Ariadne Australia Limited (the “Company”) and its
subsidiaries (the “Group”) which comprises the consolidated balance sheet as at 30 June 2020, the
consolidated statement of comprehensive income, the consolidated statement of changes in equity
and the consolidated statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies and other explanatory
information, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
financial performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has
been given to the directors of the Company, would be in the same terms if given to the directors as
at the time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report for the current period. These matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte Network.
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A R I A D N E A U S T R A L I A L I M I T E D
Independent Audit Report
202 0 A N N U A L R E P O R T
Key Audit Matter
How the scope of our audit responded to the
Key Audit Matter
Valuation of Orams Marine Village,
Office Building Development Land, and
Residential Land
Our audit procedures in conjunction with our
property valuation specialists included, but were
not limited to:
Refer to Note 13.
The Group has a portfolio of investments in
joint ventures and associates, accounted
for in accordance with AASB 128
Investments in Associates and Joint
Ventures. The Group’s Investment Portfolio
consisted of $39.0m of equity accounted
investments in joint ventures and
associates, $19.8m of which is in relation
to Orams NZ Unit Trust (ONZUT). ONZUT
in turn holds an equity accounted
investment in Orams Group Limited (OGL),
a company incorporated in New Zealand.
OGL remeasures Orams Marine Village and
Office Building Development Land to fair
value in accordance with NZ IAS 16
(Property, Plant and Equipment) and
Residential Land at fair value in accordance
with NZ IAS 40 (Investment Property).
The fair value accounting for Orams Marine
Village requires significant management
judgement in respect of the capitalisation
rate adopted within the Capitalisation
Method Valuation and the discount rate and
terminal yield adopted within the
Discounted Cash Flow Valuation.
The fair value accounting for Office Building
Development Land and Residential Land
requires significant management
judgement in respect of rates per square
metre of land area compared to the
subject, under the Direct Sales Comparison
Approach.
The Group’s share of reserves in ONZUT of
$10.8m includes its share of the uplift in
the valuation of Orams Marine Village and
Office Building Development Land of
$10.8m.
The Group’s share of loss in ONZUT of
$0.2m includes its share of the decrease in
the valuation of Residential Land of $2.8m.
(cid:120) Reviewed management’s position paper
regarding the valuation of Orams Marine
Village, Office Building Development Land
and Residential Land;
(cid:120) Assessed the conclusions reached by
management’s expert with respect to the
fair value of Orams Marine Village, Office
Building Development Land and
Residential Land;
(cid:120) Challenged the appropriateness of the
capitalisation rate, discount rate and
terminal yield assumptions adopted by
management’s expert in their valuation of
Orams Marine Village by comparison to
industry and market data;
(cid:120) Challenged the appropriateness of the
rates per square meter assumptions
adopted by management’s expert in their
valuation of Office Building Development
Land and Residential Land by comparison
to market transactions of land holdings
with similar underlying zoning in
comparable locations;
Performed sensitivity analysis on the
assumptions adopted by management’s
expert;
(cid:120)
(cid:120) Assessed the competency and objectivity
of, and held discussions with
management’s expert;
(cid:120) Agreed management’s budgeted costs to
complete in relation to Orams Marine
Village, Office Building Development Land
and Residential Land to contracted future
works;
(cid:120) On a sample basis, agreed costs incurred
to date in relation to Orams Marine
Village, Office Development Land and
Residential Land during the year to
supporting documentation; and
(cid:120) Agreed equity accounted profit or loss and
share of reserves to the audited trial
balance of ONZUT and OGL.
We also assessed the appropriateness of the
disclosures in Note 13 to the financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2020, but does not
include the financial report and our auditor’s report thereon.
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A R I A D N E A U S T R A L I A L I M I T E D
Independent Audit Report
202 0 A N N U A L R E P O R T
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If,
based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of
the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the Group or to
cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
(cid:120)
Identify and assess the risks of material misstatement of the financial report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting
intentional omissions,
involve collusion,
fraud may
from error, as
misrepresentations, or the override of internal control.
forgery,
(cid:120) Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s internal control.
(cid:120) Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
(cid:120) Conclude on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Group’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial
report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern.
(cid:120) Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
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A R I A D N E A U S T R A L I A L I M I T E D
Independent Audit Report
202 0 A N N U A L R E P O R T
(cid:120) Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the financial report.
We are responsible for the direction, supervision and performance of the Group’s audit. We
remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 10 to 14 of the Directors’ Report for
the year ended 30 June 2020.
In our opinion, the Remuneration Report of Ariadne Australia Limited, for the year ended 30 June
2020, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
DELOITTE TOUCHE TOHMATSU
John M Clinton
Partner
Chartered Accountants
Sydney, 28 August 2020
47
A R I A D N E A U S T R A L I A L I M I T E D
Shareholder Information
202 0 A N N U A L R E P O R T
Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this report is as follows.
The information is current as at 31 July 2020.
(a) Distribution of equity securities
The number of shareholders, by size of holding, in each class of share are:
1
1,001
5,001
10,001
100,001
1,000
5,000
10,000
100,000
–
–
–
–
and over
Holding less than a marketable parcel
(b)
Twenty largest shareholders
Ordinary shares
Number of
holders
228
587
217
271
93
1,396
Number of
shares
63,803
1,788,099
1,610,170
8,175,374
184,604,914
196,242,360
235
71,247
Listed ordinary shares
The names of the twenty largest holders of quoted shares are:
Number of shares
% of shares
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Bivaru Pty Ltd
HSBC Custody Nominees (Australia) Limited
SLV Investments Pty Ltd
J P Morgan Nominees Australia Limited
W B K Pty Ltd
Seymour Group Pty Ltd
Kayaal Pty Ltd
Mr Con Zempilas
National Nominees Pty Ltd
Equitas Nominees Pty Limited
Katdan Investments Pty Limited
Mr John Emery Kennedy
Mr Ronald Langley + Mrs Rhonda Elizabeth Langley
LVF Nominees Pty Ltd
Mr David Zalmon Baffsky
Mr Ronald Langley
Mr Ross Alexander Macperhson
Katdan Investments Pty Limited
Croll Nominees Pty Limited
UBS Nominees Pty Ltd
64,666,395
21,909,840
21,043,100
20,728,628
5,485,100
4,580,000
3,922,294
3,664,000
2,757,445
2,000,000
2,000,000
2,000,000
2,000,000
1,627,173
1,500,000
1,380,000
1,213,700
1,199,483
924,040
891,167
165,492,365
32.95%
11.16%
10.72%
10.56%
2.80%
2.33%
2.00%
1.87%
1.41%
1.02%
1.02%
1.02%
1.02%
0.83%
0.76%
0.70%
0.62%
0.61%
0.47%
0.45%
84.32%
(c) Substantial shareholders
The names of substantial shareholders who have notified the Company in accordance with
section 671B of the Corporations Act 2001 are:
Bivaru Pty Ltd and associated entities
Thorney Holdings Pty Ltd and Thorney Pty Ltd and associated entities
Leigh Vanessa Seymour and associated entities
Kayaal Pty Ltd and associated entities
Phoenix Portfolios Pty Ltd
Number of shares
as per notice
67,639,743
21,720,617
21,181,898
11,634,220
10,494,743
(d) Voting rights
All ordinary shares carry one vote per share without restriction.
48
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Notes
202 0 A N N U A L R E P O R T