ARIADNE AUSTRALIA LIMITED
2022 Annual Report
202 2 A N N U A L R E P O R T
Corporate Information
Directors
Mr David Baffsky, AO
(Independent Non-Executive Chairman)
Mr Kevin Seymour, AM
(Non-Executive Deputy Chairman)
Mr Christopher Barter
(Independent Non-Executive Director)
Mr John Murphy
(Independent Non-Executive Director)
Mr Benjamin Seymour
(Non-Executive Alternate Director to Mr Kevin Seymour)
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
www.computershare.com.au
Bankers
ANZ Banking Group Limited
Auditors
Grant Thornton Audit Pty Ltd
Level 17, 383 Kent Street
Sydney NSW 2000
Website
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 Profit or Loss and Other 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
202 2 A N N U A L R E P O R T
2
3
6
17
18
19
20
21
22
45
46
49
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
202 2 A N N U A L R E P O R T
Chairman’s Letter
Dear Shareholders
Our Executive Director’s report clearly sets out how the past financial year’s results have been achieved.
The writedown of our Redfern/Kippax exposures marred an otherwise good result for Ariadne. We will take all steps to seek to recover
as much of the impact of our Redfern exposure as possible.
We continue to believe that your Company is well positioned to generate and further crystalise significant value while continuing to focus
on core assets such as Orams Marine Village in New Zealand.
Yours sincerely
Mr David Baffsky, AO
Chairman
2
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
202 2 A N N U A L R E P O R T
The Directors present the Annual Report of Ariadne Australia Ltd (“Ariadne” or “the Group”) for the period ended 30 June 2022.
For the 2022 financial year (“FY22”) Ariadne reported a total comprehensive income attributable to members of $23.3 million (FY21:
$36.7 million). This result comprises two elements:
-
-
a net loss attributable to members of $6.6 million (FY21: $10.6 million profit); and
a positive contribution attributable to members of $29.9 million (FY21: $26.1 million) reported through the Statement of
Comprehensive Income.
The total comprehensive income per share was 11.89 cents compared to 18.69 cents for the previous corresponding period.
The net tangible assets per share increased during the period by 15% from 75.90 cents per share to 87.09 cents per share at balance
date.
The net operating cash outflow during the period was $1.7 million (FY21: $1.0 million).
The overall result for FY22, while positive for the full year, was adversely impacted by the write-down (of $8.4 million) in the carrying
value of our investments involving Kippax Property during the second half of FY22. This write-down was the largest contributor to
the reduction in the Group’s total comprehensive income attributable to members of $34.7 million for HY22 to $23.3 million as at
30 June 2022.
Investments
The Investment division recorded a net profit before tax of $2.7 million (FY21: $15.0 million).
The result is derived from interest on cash reserves, share of profits and losses from the Group’s investments in associates, and
dividend and trading income from the trading portfolio.
The strategic portfolio recorded a net gain of $31.2 million (FY21: $16.4 million) during the period due to mark-to-market
revaluations mainly arising from Ariadne’s investments in ClearView Wealth Ltd and Ardent Leisure Group Ltd (“Ardent”), being
$5.4 million and $9.5 million respectively. This gain is recorded through other comprehensive income and not included in the reported
net profit.
A smaller investment in MSL Solutions Ltd also contributed positively to the overall result.
Ariadne’s 54% interest in Freshxtend International Pty Ltd, with its 17% investment in the NatureSeal group, again contributed
positively during the period.
Subsequent to balance date the Group received a $21.5 million cash distribution from Ardent by way of return of capital and special
dividend following the completion of the sale of Ardent’s interest in its US business, Main Event Entertainment.
King River Capital (“King River”)
A significant proportion of the Group’s Comprehensive Income arose out of Ariadne’s investments with King River.
The three investments listed below in particular are performing well and contributed a combined uplift in value of $16.2 million during
the financial year as a result of revaluations following fundraisings during the period:
•
FinClear Holdings Limited: a gain of $7.7 million as a result of a pre-IPO round;
• Cover Genius Holdings Pty Ltd: a gain of $4.9 million as a result of a Series C round;
•
Lark Technologies, Inc.: a gain of $3.7 million as a result of a Series D round
At balance date, the carrying value of Ariadne’s King River-related investments was $35.3 million in aggregate, representing an overall
unrealised gain of $23.4 million over cost.
Ariadne’s involvement with King River to date has been rewarding and we look forward to further growth in the value of our
investments over coming periods.
3
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
202 2 A N N U A L R E P O R T
Orams
The Group’s investment in our associates, Orams Group Ltd and Orams Residential Ltd (together “Orams”), where Ariadne holds
an indirect equity interest of 61%, also contributed positively to the overall result.
The Group’s share of profit and interest from Orams during the period was $4.6 million. This result included a revaluation gain of
$3.7 million in relation to the residential site at Orams.
During the period, Orams completed the initial stage of its new state-of-the-art marine refit facility. The new 13,000 square metre
yard, and three new 90 metre marinas, have near tripled the capacity for Orams Marine Services’ marine maintenance and refit
business. The Orams facilities now offer the most comprehensive refit and boat maintenance infrastructure in the Southern
Hemisphere. With three travel lifts (820, 85 and 75 tonnes), as well as the existing 600 tonne slipway, Orams can haul out vessels
from superyachts to domestic vessels, and a wide range of commercial boats including the regional ferry fleet. The next stage of
works consists of three marine work sheds – one 580 square metre shed to accommodate the 85 tonne travel lift which was
completed during the period and two superyacht sheds to accommodate the 820 tonne travel lift scheduled for completion early
2023. The new superyacht sheds will expand Orams’ ability to provide specialised superyacht services within a controlled
environment, cementing Orams’ position as the superyacht hub of the South Pacific. Further stages of the development will feature
commercial buildings and a residential component on the northern end of the site.
FY22 saw the continued application of restrictions to New Zealand’s international border, restricting the entry of international
superyachts. During this period, Orams serviced a wide array of the domestic market including barges, ferries, police and navy vessels
– highlighting the versatility of the business to temporarily pivot from its typical work program of servicing and refitting overseas
superyachts. With the end of the border restrictions from July, the level of inquiries from overseas superyacht owners to service
boats at Orams has been encouraging. Orams continues to build staff numbers across all aspects of the business in anticipation of the
return of the overseas market and the recently complete expansion of the hard stand’s servicing capacity. With the majority of the
redevelopment works now completed, or soon to be completed, and the lifting of New Zealand's border restrictions with effect
from 1 August 2022, Orams looks forward to a productive FY23.
Kippax Property (“Kippax”)
For the past 2 years, Kippax has been pursuing a planning approval for a site in Redfern (“the Redfern site”), located in the Botany
Road Precinct, over which Kippax holds an option to purchase. The NSW State Government’s objective for the Botany Road Precinct
is to activate State Government infrastructure investment and attract technology and other knowledge-based businesses to Sydney’s
Innovation Corridor.
In August 2021 Council reported its planning proposal (“PP”) which included changing the planning controls for the Redfern site to
a floor space ratio (“FSR”) of 8.5:1 and 17-storeys. The PP then received a Gateway Determination from the NSW State Government
and went on public exhibition in November 2021, ahead of the City of Sydney Council (“Council”) election. During the public
exhibition there were a small number of public submissions relating to the Redfern end of the Botany Road Precinct which raised
some concern with the proposed changes in the immediate area around the site. Notwithstanding these concerns Council advised
Kippax that the benefits of the PP outweighed the impact predicated on the future condition they would be creating in the area.
Kippax continued to work closely with the Council to respond to public comments and included ways the scheme could be adjusted
to address matters raised in the submissions. The Council also advised that three key issues needed to be addressed and Kippax
submitted a revised scheme with a reduced maximum height from 17-storeys to 11-storeys and an FSR of 7.3:1 which addressed
these issues.
However, Council advised in late May that the Redfern site and neighbouring properties would be excluded from the Botany Road
Precinct and the controls were to remain as they are today. Thereafter, at a Council meeting in June the Council voted to remove
the Redfern site and certain other properties from the Council’s PP. This was on the basis of a small number of objectors (c.1% out
of over 5,000 residents and community groups who were emailed the PP).
While there is a potential pathway for the Redfern site to still receive a planning uplift, it is too early to determine the likely prospects
of success. As a result Ariadne has impaired its $8.4 million loan receivable to nil value at balance date.
Subsequent to balance date, Ariadne has also reviewed its investment in Kippax and has decided to exit this joint venture. Ariadne
will take control of the option over the Redfern site and explore all pathways to recover value.
4
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
202 2 A N N U A L R E P O R T
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 2022.
$M
44.4
Liabilities
Payables and Provisions
Other Payables
Minority Interests
Debt
Total Liabilities
Shareholders’ Funds
$M
3.1
14.6
15.3
24.4
57.4
170.9
Assets
Cash *
Investments
Orams
ClearView
FinClear
Freshxtend
Ardent *
Hillgrove
King River
Cover Genius
Trading Portfolio
Lark Technologies
Other Strategic Assets
Foundation Life
$M
80.0
16.7
13.2
11.8
10.2
10.1
8.1
7.2
6.4
5.6
5.3
4.9
Total Investments
Fixed Assets and Other Receivables
179.5
4.4
Total Liabilities &
Total Assets
* Adjusted to include the $21.5 million cash distribution from Ardent by way of return of capital and special dividend received 13 July 2022.
Shareholders’ Funds
228.3
228.3
Tax
Ariadne has substantial carry forward revenue and capital losses available to offset future taxable profits. At 30 June 2022 these are
estimated to be $89.6 million (30 June 2021: $80.4 million) and $72.3 million (30 June 2021: $72.3 million) respectively. As at balance
date, Ariadne recognised a deferred tax asset of $3.6 million, at Ariadne’s income tax rate of 25% to offset an equal deferred tax
liability relating to temporary differences of the Group’s strategic portfolio, leaving a deferred tax asset of $36.9 million which is not
recognised in Ariadne’s accounts.
Dividends and Capital Management
The Board has determined to apply a cautious approach to deploying capital to new investment opportunities, as and when they
arise, given the ongoing volatility in market conditions.
A final fully franked dividend of 0.75 cents per share has been declared by the directors, bringing the total dividends for FY22 to 1.00
cents per share (FY21: 0.50 cents per share).
On 21 February 2022, Ariadne announced the extension of its on-market share buy-back facility as part of ongoing capital management
initiatives.
Dr Gary Weiss, AM
Executive Director
5
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 2 A N N U A L R E P O R T
The Directors submit their report for the year ended 30 June 2022.
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 and property.
Operating Results for the Year
The consolidated net loss after income tax, attributable to the Group for the financial year was $5,710 (2021: $11,534 net profit). The
consolidated net loss after tax attributable to members, on the same basis, for the financial year was $6,595 (2021: $10,572 net profit). In
addition, a positive contribution (net of deferred tax) attributable to members of $29,923 (2021: $26,106) was reported through the
Statement of Profit or Loss and Other Comprehensive Income, resulting in a total comprehensive income attributable to members of
$23,328 (2021: $36,678). Net tangible assets at the end of the reporting period were 87.09 cents per share (2021: 75.90 cents). Total
earnings per share were -3.36 cents (2021: 5.39 cents). Total comprehensive earnings per share were 11.89 cents (2021: 18.69 cents).
Investments
The Investment division recorded a profit of $2,672 (2021: $14,980).
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 2022 were $22,880 (2021: $28,629). Ariadne also returned $1,472 (2021: $1,374) during the
period by way of dividends. 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 profit of $1,418 (2021: $26).
The trading portfolio recorded a net loss of $2,049 (2021: $4,969 net gain) and the strategic portfolio revalued through profit or loss
recorded a net gain of $2,517 (2021: $47 loss), including a gain $3,489 (2021: $244 loss) arising out of the Group’s investments in King
River Capital’s funds, during the reporting period due to mark-to-market revaluations.
The strategic portfolio revalued through other comprehensive income recorded a gain net of tax of $31,158 (2021: $16,364) during the
reporting period due to mark-to-market revaluations including a $5,431 markup (2021: $6,579) of the Group’s investment in ClearView
Wealth Limited, a $9,522 markup (2021: $13,377) of the Group’s investment in Ardent Leisure Group Limited, and some of the Group’s
unlisted investments including a markup of $7,685 (2021: $1,537) for FinClear, a markup of $4,881 (2021: $189 loss) for Lark and a markup
of $3,660 (2021: $45 loss) for Cover Genius. The mark-to-market gains attributable to the strategic portfolio are not included in the
reported net profit.
Ariadne’s investment in Foundation Life NZ Limited continues to perform in line with expectations, contributing NZ$368 (2021: NZ$342)
of loan note interest during the period.
Ariadne’s 54% interest in Freshxtend International Pty Ltd with its 17% investment in the NatureSeal Group continues to contribute
positively to the Investment division’s results.
6
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 2 A N N U A L R E P O R T
Property
The Group’s Property division recorded a loss of $4,688 (2021: $273 loss).
The division’s result is derived from the Group’s 61% indirect share interest in Orams Residential Limited (“Residential”) and Orams
Group Limited (“Orams”) - the owner of Orams Marine Village (“the Marina”) and Orams Marine Services, New Zealand’s premier marine
facility and largest marine maintenance and refit services business respectively in addition to the interest received on its loan to Orams.
The result also includes Ariadne’s 50% interest in the Kippax Property Trust (“Kippax”) and the investment in the Kippax Redfern Trust
(“Kippax Redfern”).
The Group’s share of profit from Residential during the period was $3,663 (2021: nil), representing the Group’s share of the uplift in
valuation of the residential land holding, and Orams was $739 (2021: $5,263) and its interest earned on the associated loan to Orams was
$206 (2021: $168). In addition, a positive contribution of $323 (2021: $12,878) representing the Group’s share of the uplift in valuation of
the marina was reported through other comprehensive income. A $27 loss (2021: $4,631 loss) relating to the Contingent Consideration,
due to and equal to 30% of the increase in ONZUT’s net assets during the period, was also recognised in reported net profit. The terms
of the Contingent Consideration provide that the purchase price will be determined and paid following completion of the Site 18 Stage 1
Works (as defined in the Development Agreement with Panuku Development Auckland) which is expected to be before June 2026.
During the period, Orams completed the initial stage of its new state-of-the-art marine refit facility. The new 13,000 square metre yard,
and three new 90 metre marinas, have near tripled the capacity for Orams Marine Services’ marine maintenance and refit business. The
Orams facilities now offer the most comprehensive refit and boat maintenance infrastructure in the Southern Hemisphere. With three
travel lifts (820, 85 and 75 tonnes), as well as the existing 600 tonne slipway, Orams can haul out vessels from superyachts to domestic
vessels, and a wide range of commercial boats including the regional ferry fleet. The next stage of works consists of three marine work
sheds – one marine shed to accommodate the 85 tonne travel lift which was completed during the period and two superyacht sheds to
accommodate the 820 tonne travel lift scheduled for completion early 2023. The new superyacht sheds will expand Orams’ ability to
provide specialised superyacht services within a controlled environment, cementing Orams’ position as the superyacht hub of the South
Pacific. Further stages of the development will feature commercial buildings and a residential component on the northern end of the site.
We believe that the development has the potential to create significant value for shareholders over time.
For the past 2 years, Kippax has been pursuing a planning approval for a site in Redfern (“the Redfern site”), located in the Botany Road
Precinct, over which Kippax holds an option to purchase. Despite working closely and collaboratively with the City of Sydney Council for
a long period of time, in June the Council voted to remove the Redfern site and neighbouring properties from the Botany Road Precinct.
While there is a potential pathway for the Redfern site to receive a planning uplift, it is too early to determine the likely prospects of
success. As a result, Ariadne has impaired its $8,400 loan receivable to nil value at balance date. Subsequent to balance date, Ariadne has
also reviewed its investment in Kippax and has decided to exit this joint venture. Ariadne will take control of the option over the Redfern
site and explore all pathways to recover value.(cid:6783)(cid:6783)
Taxation
Ariadne has significant carried forward revenue and capital losses available to offset future taxable profits. At 30 June 2022, these are
estimated at $89,602 (2021: $80,378) and $72,377 (2021: $72,292) 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 a deferred tax asset of $3,563, at the Ariadne’s income
tax rate of 25%, be recognised to offset an equal deferred tax liability relating to temporary differences of the Group’s strategic portfolio.
Employees
The number of employees, including directors, at balance date is 11 (2021: 11), 73% male and 27% female (2021: 73%:27%).
2. DIVIDENDS AND CAPITAL MANAGEMENT
The Directors have declared a fully franked final dividend of $1,472 (0.75 cents per share) in relation to the 2022 financial year. As
the final dividend for 2022 was declared after balance date, no liability was recognised at balance date. The FY22 interim dividend of
$490 (0.25 cents per share) declared in February 2022 was paid on 28 March 2022.
On 21 February 2022, 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.
7
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
3. DIRECTORS
202 2 A N N U A L R E P O R T
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.
Amongst previous roles, Mr Baffsky was a Director of Destination NSW, The George Institute, 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 of King River Capital, an Australian/US venture capital fund based in Sydney. King River invests in
fintech, digital healthcare, decentralised finance, gaming, and other highly disruptive software ventures. 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. He originally joined Goldman Sachs in Frankfurt in
1993. He was named a Managing Director in 2000, made Partner in 2004, and served on the Firmwide Growth Markets Operating
Committee. Mr Barter is currently a Director of CoverGenius Ltd, FinClear Ltd, Splash, CNG Fuels, and Cici Environmental Trust,
a member of the Audit and Risk Committee for Bush Heritage and serves on the President’s Leadership Council at Brown University.
Mr Barter earned a BSc in Physics and a BA in Russian Literature from Brown University and an MSc in Physics from Harvard
University.
Mr Barter was appointed as a member of the Audit and Risk Management Committee on 22 March 2019.
8
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 2 A N N U A L R E P O R T
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 is currently the Chairman of
Alloggio Group Limited (appointed November 2021) and director of Shriro Holdings Limited (appointed 23 May 2022).
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.
Benjamin Seymour, LLB (Hons), BBusMan, GDLP
Non-Executive Alternate Director to Mr Kevin Seymour
Mr Seymour, was appointed as an Alternate Director of Ariadne on 15 December 2020.
Mr Seymour is an Associate Director of Seymour Group, one of Queensland’s most prominent privately-owned property development
and investment companies established by his grandparents, Kevin and Kay in 1976. On completion of his university studies Mr Seymour
spent time in QIC’s Global Real Estate business working throughout investment and funds management. He is admitted as a solicitor in
the Supreme Court of Queensland and the High Court of Australia, and currently practices as a corporate lawyer with a focus on mergers
and acquisitions. Mr Seymour’s business interests and activities extend into high-end residential and commercial property development
through his directorship of Queensland Prime Investments, in conjunction with investments across private equity, venture capital and global
equities through his family office, Seymour Private Capital. He obtained a Bachelor of Laws (Honours) and Bachelor of Business
Management majoring in Property Development and Real Estate from the University of Queensland, and is a member of the Australian
Institute of Company Directors, the Urban Development Institute of Australia and the Queensland Law Society.
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),
Estia Health Ltd (appointed 1 January 2017, having been a Director since 24 February 2016), and Cromwell Property Group (appointed
17 March 2021, having been elected as a director on 18 September 2020) and a director of 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 Chairman of Ridley Corporation Limited (appointed 1 July 2015, having been
appointed Director on 21 June 2010 and resigned 26 August 2020) and, Director of The Straits Trading Company Limited (appointed on
1 June 2014 and resigned on 30 September 2020).
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
After the balance date, the Directors declared a final dividend on ordinary shares in respect of the 2022 financial year. The total amount
of the dividend is $1,472 which represents a fully franked dividend of 0.75 cents per share.
On 13 July 2022 the Group received a $21,539 cash distribution from Ardent Leisure Group (“Ardent”) by way of return of capital and
special dividend following the completion of the sale of Ardent’s interest in its US business, Main Event Entertainment.
Apart from the matters above, there is no other matter of circumstance that has arisen since 30 June 2022 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.
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
6. LIKELY DEVELOPMENTS AND EXPECTED RESULTS
202 2 A N N U A L R E P O R T
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.
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 shareholders’ 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.
10
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
Executive Remuneration
202 2 A N N U A L R E P O R T
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:
•
•
•
•
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.
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. All cash bonuses are granted at the discretion of the Board, there are no fixed guidelines.
The amount determined by the Board is paid out in totality. No amounts remain payable, and no portion relates to future financial years.
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.
11
A R I A D N E A U S T R A L I A L I M I T E D
202 2 A N N U A L R E P O R T
Directors’ Report
Details of Key Management Personnel Remuneration
(a) Details of Key Management Personnel
(i) Directors
D Baffsky, AO
K Seymour, AM
C Barter
J Murphy
B Seymour
G Weiss, AM
Independent Non-Executive Chairman
Non-Executive Deputy Chairman
Independent Non-Executive Director
Independent Non-Executive Director
Non-Executive Alternate Director to K Seymour, AM
Executive Director
(ii) Executives
N McMahon
D Weiss
(b) Remuneration of Directors and Executives
Chief Financial Officer / Company Secretary
Investment Officer
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.
12
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
Short Term Employee Benefits
Non-
Monetary
Benefits(i)
Cash
Bonus
Salary &
Fees
202 2 A N N U A L R E P O R T
Post-
Employment
Benefits
Share
Based
Payment
Superan-
nuation
Options(ii)
Total
% at Risk
Table 1: Emoluments of Directors of Ariadne
—
35,000
130,000
130,000
D Baffsky, AO (Chairman)
2022
2021
K Seymour, AM (Deputy Chairman) (iii)
2022
2021
C Barter
2022
2021
J Murphy
2022
2021
B Seymour, AM (Alternate Director to K Seymour, AM) (iii)
2022
2021
G Weiss, AM (Executive Director)
2022
2021
674,167
570,000
80,000
80,000
70,000
70,000
70,000
35,000
Total Remuneration: Directors
2022
2021
1,024,167
920,000
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
15,161
15,071
30,322
30,142
Table 2: Emoluments of the Executive Officers of the Group
N McMahon (Chief Financial Officer / Company Secretary)
2022
2021
D Weiss (Investment Officer)(iv)
2022
2021
379,873
406,317
307,398
282,513
40,000
—
50,000
—
—
—
15,161
15,071
15,161
15,071
13,000
12,350
—
—
—
—
—
—
—
—
—
—
—
—
—
—
158,161
157,421
—
38,325
77,000
76,650
88,000
87,600
77,000
38,325
719,328
615,071
1,119,489
1,013,392
—
—
—
—
—
—
—
—
—
—
—
—
—
—
6,073
1,955
—
1,955
380,970
309,468
468,602
445,037
12.09%
0.63%
10.67%
0.44%
—
3,325
7,000
6,650
8,000
7,600
7,000
3,325
30,000
30,000
65,000
63,250
27,500
25,000
23,568
21,694
Total Remuneration: Executives
2022
2021
687,271
688,830
90,000
—
15,161
15,071
51,068
46,694
6,073
3,910
849,573
754,505
11.31%
0.52%
(i)
(ii)
(iii)
(iiv)
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 K Seymour has provided instructions for his director salary to be paid to his alternate director Mr B Seymour.
Mr D Weiss’s 2021 salary and fees included $59,238 of annual leave paid out in cash.
Table 3: Option holdings of Directors and Executives
Executives
N McMahon
D Weiss
Total
Balance
1 July 2021
Granted as
Remuneration
Options
Exercised
Options
Expired
Balance
30 June 2022
Vested and
Exercisable
500,000
500,000
1,000,000
300,000
—
300,000
—
—
—
—
—
—
800,000
500,000
1,300,000
500,000
500,000
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, there are no other
vesting conditions. If options are not exercised in the exercise period, they lapse.
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 total cost of the options, being the fair value
of options at grant date multiplied by the number of options granted, is recognised over the vesting period.
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 2 A N N U A L R E P O R T
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)
18/08/2017 17/08/2022
17/08/2018 16/08/2023
1/04/2022 31/03/2027
2.6%
5.3%
1.1%
25.2%
34.9%
31.3%
2.2%
2.2%
1.8%
3.5
3.5
3.5
73.0
63.0
65.0
76.0
65.5
67.0
13.4
12.1
16.4
Table 4: Shareholdings of Directors and Executives
Ordinary shares held in
Ariadne
Directors
D Baffsky, AO
K Seymour, AM
C Barter
J Murphy
B Seymour
G Weiss, AM
Executives
N McMahon
D Weiss
Total
Balance
1 July 2021
On Exercise
of Options
Net Change
Other
Balance
30 June 2022
5,182,713
13,987,394
2,000,000
586,632
386,692
65,739,743
440,428
2,199
88,325,801
—
—
—
—
—
—
—
—
—
—
—
(1,800,000)
199,515
—
—
—
—
(1,600,485)
5,182,713
13,987,394
200,000
786,147
386,692
65,739,743
440,428
2,199
86,725,316
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 to / from Directors and Executives
A three-month non-interest-bearing loan from an entity controlled by Mr Kevin Seymour, AM for $6,500,000 was made to the Company
on 15 April 2021. During the period the loan became a payable-on-demand 10% fixed interest-bearing facility and repayments totalling
$4,500,000 were made leaving $2,247,063, including $247,063 of interest, outstanding at balance date. No other loans to or 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
Purchases / Payments
Mr Barter is an Executive Director of King River Capital Management Pty Ltd (“KRC”). The Group made investments of $1,869,427 (2021:
$1,196,732) during the period which were associated with or otherwise managed by KRC. The Group paid management fees of $336,679
(2021: $195,701) relating to investments managed by KRC.
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 $44,000 (2021: $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
King River Capital Management Pty Ltd
Shriro Holdings Limited
Thorney Opportunities Limited
Dr G Weiss
Mr C Barter
Dr G Weiss
Mr C Barter
Mr J Murphy
Dr G Weiss
Chairman
Non-Executive Director
Non-Executive Director
Executive Director
Non-Executive Director
Non-Executive Director
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
202 2 A N N U A L R E P O R T
(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 (%) (i)
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)
2022
2021
2020
2019
2018
23,328
36,678
(28,329)
(26,664)
10,209
14.6%
11.89
0.75
70.00
87.09
28.1%
18.69
—
55.00
75.90
(22.1%)
(14.42)
1.70
39.00
57.21
(16.6%)
(13.48)
1.70
62.50
73.29
5.8%
5.10
3.50
65.00
88.25
Shares on issue (number at 30 June)
(i) Return on equity is calculated as total comprehensive income for the period divided by average equity for the period.
196,242,360
196,242,360
196,242,360
196,892,360
199,669,088
Remuneration Report (Audited) Ends
9. DIRECTORS’ MEETINGS
The number of meetings of Directors (including meetings of committees of Directors) held during the year and the number of meetings
attended by each of the Directors were as follows:
Directors’
Meetings
Meetings of Committees
Audit & Risk Management
Number of meetings held:
Number of meetings attended:
D Baffsky, AO
K Seymour, AM
C Barter
J Murphy
B Seymour (Alternate Director to Mr Kevin Seymour)
G Weiss, AM
Committee membership
5
5
4
5
5
5
5
4
4
n/a
4
4
n/a
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 the page
17 and forms part of the Directors’ Report for the year ended 30 June 2022.
15
A R I A D N E A U S T R A L I A L I M I T E D
202 2 A N N U A L R E P O R T
Directors’ Report
12. NON-AUDIT SERVICES
There were no non-audit services provided by Ariadne’s auditor, Grant Thornton Audit Pty Ltd in the current financial year.
Signed in accordance with a resolution of the Directors
Mr David Baffsky, AO
Chairman
Sydney
29 August 2022
16
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 2 A N N U A L R E P O R T
Grant Thornton Audit Pty Ltd
Level 17
383 Kent Street
Sydney NSW 2000
Locked Bag Q800
Queen Victoria Building NSW
1230
T +61 2 8297 2400
Auditor’s Independence Declaration
To the Directors of Ariadne Australia Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit
of Ariadne Australia Limited for the year ended 30 June 2022, I declare that, to the best of my knowledge and
belief, there have been:
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
M R Leivesley
Partner – Audit & Assurance
Sydney, 29 August 2022
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
w
17
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 Profit or Loss and Other
Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2022
202 2 A N N U A L R E P O R T
GROUP
Notes
2022
$’000
2021
$’000
CONTINUING OPERATIONS
Interest income
Dividend income
Net fair value movement of the trading portfolio
Net gain on equity accounted investments reclassified as securities
Fair value loss on financial liabilities
Net gain on foreign currency denominated accounts
Other income, gains & losses
Share of joint ventures’ and associates’ profits
Employee benefits expense
Depreciation
Administration expenses
Finance costs
Impairment (provisions) / reversals
(LOSS) / PROFIT BEFORE INCOME TAX
Income tax expense
(LOSS) / PROFIT AFTER TAX FOR THE PERIOD
Attributable to:
Non-controlling interests
MEMBERS OF ARIADNE
4(a)
4(b)
13(b)
4(c)
4(d)
5(a)
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
Items that may be reclassified subsequently to profit or loss
Net fair value movement of property assets, net of tax
Exchange difference on translation of foreign operations
OTHER COMPREHENSIVE INCOME FOR THE PERIOD, NET OF TAX
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)
Comprehensive Earnings per share
Basic earnings per share (cents)
Diluted earnings per share (cents)
6
6
6
6
711
942
(2,049)
—
(27)
272
2,943
5,760
(2,812)
(463)
(1,134)
(1,417)
(8,436)
(5,710)
—
(5,710)
885
(6,595)
987
401
4,969
8,979
(4,631)
—
485
5,068
(2,267)
(586)
(983)
(1,016)
128
11,534
—
11,534
962
10,572
31,158
16,364
323
(1,544)
29,937
12,878
(1,091)
28,151
24,227
39,685
899
23,328
3,007
36,678
(3.36)
(3.36)
11.89
11.86
5.39
5.39
18.69
18.69
The statement of profit or loss and other comprehensive income 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
Balance Sheet
AS AT 30 JUNE 2022
ASSETS
Current Assets
Cash and cash equivalents
Receivables
Financial assets
Other current assets
Total Current Assets
Non-Current Assets
Receivables
Financial assets
Investments in joint ventures and associates
Right of use assets
Property, plant and equipment
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Lease liabilities
Loans and borrowings
Provisions
Total Current Liabilities
Non-Current Liabilities
Lease liabilities
Loans and borrowings
Financial 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.
19
A R I A D N E A U S T R A L I A L I M I T E D
202 2 A N N U A L R E P O R T
GROUP
Notes
2022
$’000
2021
$’000
8
9
10
11
13(b)
18(a)
18(a)
14
18(a)
14
18(c)
15(a)
15(c)
15(d)
22,880
1,572
6,428
67
30,947
10,343
97,668
87,480
1,871
9
197,371
228,318
227
401
13,603
919
15,150
1,470
10,823
14,613
16
26,922
42,072
28,629
1,863
8,448
107
39,046
18,992
65,755
84,846
57
122
169,772
208,818
254
53
15,046
628
15,981
—
13,960
14,586
11
28,557
44,538
186,246
164,280
378,156
216,860
(424,100)
170,916
15,330
186,246
378,156
182,543
(411,750)
148,949
15,331
164,280
Statement of Changes in Equity
202 2 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
378,156
—
—
—
—
—
—
—
140,155
16,319
26,106
42,425
(41)
—
4
—
(406,044)
(5,747)
—
(5,747)
112,267
10,572
26,106
36,678
41
—
—
—
—
—
4
—
6,211
962
2,045
3,007
—
6,636
—
(523)
GROUP
$’000
118,478
11,534
28,151
39,685
—
6,636
4
(523)
378,156
182,543
(411,750)
148,949
15,331
164,280
FOR THE YEAR ENDED 30 JUNE 2021
At 1 July 2020
Profit / (loss) for the period
Other comprehensive income
Total comprehensive income for the period
Transfer of reserves to accum. losses
Acquisition of non-controlling interest
Cost of share-based payment
Dividends
At 30 June 2021
FOR THE YEAR ENDED 30 JUNE 2022
At 1 July 2021
378,156
182,543
(411,750)
148,949
15,331
164,280
Profit / (loss) for the period
Other comprehensive income
Total comprehensive income for the period
Transfer of reserves to accum. losses
Cost of share-based payment
Cost of shares bought back
Equity transactions with equity holders
Dividends
At 30 June 2022
—
—
—
—
—
—
—
—
5,353
29,923
35,276
500
13
—
—
(1,472)
(11,948)
(6,595)
—
(11,948)
(500)
—
—
98
—
29,923
23,328
—
13
—
98
885
14
899
—
—
(62)
(98)
(5,710)
29,937
24,227
—
13
(62)
—
378,156
216,860
(424,100)
170,916
15,330
186,246
(1,472)
(740)
(2,212)
The statement of changes in equity should be read in conjunction with the accompanying notes.
20
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 Cash Flows
FOR THE YEAR ENDED 30 JUNE 2022
Cash flows from operating activities
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 used in operating activities
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 disposals
Payments for strategic portfolio additions
Loans repaid
Loans advanced
Loans divested
Acquisition of subsidiary, net of cash acquired
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 in non-controlling interest
Dividends paid to members of the parent entity
Dividends paid to non-controlling interests
Net cash flows (used in) / from financing activities
Cash and cash equivalents at beginning of period
Net decrease in cash and cash equivalents
Cash and cash equivalents at end of period
202 2 A N N U A L R E P O R T
GROUP
Notes
2022
$’000
2021
$’000
79
(3,550)
2,946
—
(30)
62
(1,153)
(17)
(1,663)
(2)
—
—
4,631
(2,869)
50
(1,900)
3,000
—
2,910
(343)
(5,879)
1,500
(62)
(1,472)
(740)
(6,996)
28,629
(5,749)
22,880
1,496
(4,017)
2,009
430
—
111
(1,001)
(16)
(988)
(5)
492
(1,075)
—
(1,446)
71
(7,918)
—
39
(9,842)
(364)
(1,396)
8,200
—
(1,374)
(523)
4,543
34,916
(6,287)
28,629
18(a)
16
11
11
18
7
8
The statement of cash flows should be read in conjunction with the accompanying notes.
21
A R I A D N E A U S T R A L I A L I M I T E D
202 2 A N N U A L R E P O R T
Notes to Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
1. CORPORATE INFORMATION
The consolidated financial statements of Ariadne Australia Limited (“Ariadne”) and its controlled entities (“the Group”) for the year ended
30 June 2022 were authorised for issue in accordance with a resolution of the Directors on 29 August 2022.
Ariadne is a for profit company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities
Exchange.
A description of the Group's operations and of its principal activities is included in the Directors' Report on pages 6 to 16.
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 financial instruments and property assets which
have been measured at fair value.
Where necessary, comparatives have been reclassified and repositioned for consistency with current year disclosures.
The Group has adopted all of the new and revised Standards and Interpretations issued by the AASB that are relevant and effective for the
current year. There are no new, revised Standards, amendments thereof or Interpretations effective for the current year that have had a
material impact on the Group.
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.
(b) Compliance
The financial report also complies with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting
Standards Board.
(c) Future changes
There are no standards or Interpretations that are not yet effective and that are expected to have a material impact on the Group in the
current or future reporting periods and on foreseeable future transactions.
22
A R I A D N E A U S T R A L I A L I M I T E D
202 2 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2022
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(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 of the significant judgements and estimates made in relation to;
•
•
•
•
•
the accounting policies applied when assessing the recoverable amount of the Group’s assets and assets of joint ventures are
disclosed in Note 2(f), Note 2(i) and in Note 13,
the recoverability of income tax losses are disclosed in Note 5,
the recoverability of receivables are disclosed in Note 10,
determining the fair value of investment property are disclosed in Note 2(h),
determining the fair value of investments are disclosed in Note 2(i) and Note 17(g).
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.
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.
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 20. Unrealised gains and losses on transactions between the Group and its associates and joint ventures are eliminated
to the extent of the Group’s interest in those entities. Where unrealised losses are eliminated, the underlying asset is also tested for
impairment.
23
A R I A D N E A U S T R A L I A L I M I T E D
202 2 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2022
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(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 Profit or Loss and Other 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.
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.
(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.
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 Profit or Loss and Other 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 fair value of investments are determined as set out in Note 17(g).
Investments remeasured to fair value are disclosed in Note 9 and Note 11.
(k) Recognition and derecognition of financial instruments
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial
instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset
and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled
or expires.
24
A R I A D N E A U S T R A L I A L I M I T E D
202 2 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2022
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(l) 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 allowance for expected credit losses is recognised when a credit risk exists. Bad debts are written off when identified.
For receivables carried at amortised cost, gains and losses are recognised in the Statement of Profit or Loss and Other Comprehensive
Income when the receivables are derecognised or impaired, as well as through the amortisation process.
(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 Profit or Loss and Other 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 Profit or Loss and Other 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”).
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 Profit or Loss and Other 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.
25
A R I A D N E A U S T R A L I A L I M I T E D
202 2 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2022
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(q) Leases
The Group assesses whether a contract is or contains a lease at inception of the contract. A lease conveys the right to direct the use and
obtain substantially all of the economic benefits of an identified asset for a period of time in exchange for consideration.
Some lease contracts contain both lease and non-lease components. These non-lease components are usually associated with facilities
management services at offices and servicing and repair contracts in respect of motor vehicles. The Group has elected to not separate its
leases for offices into lease and non-lease components and instead accounts for these contracts as a single lease component. For its other
leases, the lease components are split into their lease and non-lease components based on their relative stand-alone prices.
Measurement and recognition of leases as a lessee
At lease commencement date, the Group recognises a right-of-use asset and a lease liability in its consolidated statement of financial
position. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs
incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made
in advance of the lease commencement date (net of any incentives received).
The Group depreciates the right-of-use asset on a straight-line basis from the lease commencement date to the earlier of the end of the
useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such
indicators exist.
At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date,
discounted using the Group’s incremental borrowing rate because as the lease contracts are negotiated with third parties it is not possible
to determine the interest rate that is implicit in the lease. The incremental borrowing rate is the estimated rate that the Group would have
to pay to borrow the same amount over a similar term, and with similar security to obtain an asset of equivalent value. This rate is adjusted
should the lessee entity have a different risk profile to that of the Group.
Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable
payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options
reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced by lease payments that are allocated between repayments of principal and
finance costs. The finance cost is the amount that produces a constant periodic rate of interest on the remaining balance of the lease
liability.
The lease liability is reassessed when there is a change in the lease payments. Changes in lease payments arising from a change in the lease
term or a change in the assessment of an option to purchase a leased asset. The revised lease payments are discounted using the Group’s
incremental borrowing rate at the date of reassessment when the rate implicit in the lease cannot be readily determined. The amount of
the remeasurement of the lease liability is reflected as an adjustment to the carrying amount of the right-of-use asset. The exception being
when the carrying amount of the right-of-use asset has been reduced to zero then any excess is recognised in profit or loss.
Payments under leases can also change when there is either a change in the amounts expected to be paid under residual value guarantees
or when future payments change through an index or a rate used to determine those payments, including changes in market rental rates
following a market rent review. The lease liability is remeasured only when the adjustment to lease payments takes effect and the revised
contractual payments for the remainder of the lease term are discounted using an unchanged discount rate. Except for where the change
in lease payments results from a change in floating interest rates, in which case the discount rate is amended to reflect the change in interest
rates.
(r) Revenue and other income
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 marina and office space 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.
26
A R I A D N E A U S T R A L I A L I M I T E D
202 2 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2022
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(s) 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 and superannuation.
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
The current income tax charge is calculated on the basis of the tax laws enacted or substantially enacted at the end of the reporting period
in the countries where the company and its subsidiaries and associates operate and generate taxable income. Management periodically
evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and considers
whether it is probable that a taxation authority will accept an uncertain tax treatment. The group measure its tax balances either based on
the most likely amount of the expected value, depending on which method provides a better prediction of the resolution of the uncertainty.
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)
(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.
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 Profit or Loss and Other
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.
27
A R I A D N E A U S T R A L I A L I M I T E D
202 2 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2022
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(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.
(w) Land and buildings
As relating to our investments in joint ventures and associates, 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. Depreciation for land and water right-of-use assets is recognised on a straight-line basis over 125 years to write down
the cost less estimated residual value. 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 property asset 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 property asset 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 and property. The investments division comprises the Group’s investments in securities.
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.
28
A R I A D N E A U S T R A L I A L I M I T E D
P
U
O
R
G
)
i
(
D
E
T
A
C
O
L
L
A
N
U
Y
T
R
E
P
O
R
P
S
T
N
E
M
T
S
E
V
N
I
1
2
0
2
0
0
0
$
’
2
2
0
2
0
0
0
’
$
1
2
0
2
0
0
0
$
’
2
2
0
2
0
0
0
’
$
1
2
0
2
0
0
0
$
’
2
2
0
2
0
0
0
’
$
1
2
0
2
0
0
0
$
’
2
2
0
2
0
0
0
’
$
s
e
t
o
N
n
o
i
t
a
m
r
o
f
n
i
t
n
e
m
g
e
s
e
b
a
t
r
o
p
e
R
l
T
R
O
P
E
R
L
A
U
N
N
A
2
2
0
2
)
d
e
u
n
i
t
n
o
C
(
s
t
n
e
m
e
t
a
t
S
l
a
i
c
n
a
n
F
o
t
i
s
e
t
o
N
2
2
0
2
E
N
U
J
0
3
D
E
D
N
E
R
A
E
Y
E
H
T
R
O
F
)
d
e
u
n
i
t
n
o
C
(
I
N
O
T
A
M
R
O
F
N
I
T
N
E
M
G
E
S
.
3
7
8
9
1
0
4
2
3
2
)
7
4
(
0
0
3
9
6
9
4
,
9
7
9
8
,
)
1
3
6
4
(
,
—
8
6
0
5
,
8
5
2
6
1
,
4
3
5
1
1
,
—
4
3
5
1
1
,
6
4
8
4
8
,
2
7
9
3
2
1
,
8
1
8
8
0
2
,
6
8
5
6
1
0
1
,
8
2
1
4
6
3
6
1
,
8
3
5
4
4
,
1
1
7
2
4
9
6
2
4
7
1
5
2
,
)
9
4
0
2
(
,
—
—
)
7
2
(
2
7
2
0
6
7
5
,
2
5
5
8
,
)
0
1
7
5
(
,
—
)
0
1
7
5
(
,
0
8
4
7
8
,
8
3
8
0
4
1
,
8
1
3
8
2
2
,
3
6
4
7
1
4
1
,
8
5
1
1
3
,
)
6
3
4
8
(
,
2
7
0
2
4
,
—
—
8
0
2
—
—
—
—
—
—
—
—
—
4
0
2
—
—
—
—
—
—
—
8
0
2
)
3
7
1
3
(
,
4
0
2
)
4
9
6
3
(
,
—
2
7
1
8
,
2
7
1
8
,
6
8
5
7
3
—
—
—
9
6
8
4
,
9
6
8
4
,
2
4
—
—
3
6
4
0
0
2
—
—
—
—
—
—
—
1
1
6
2
4
0
5
,
)
3
7
2
(
)
1
3
6
4
(
,
7
0
3
3
7
,
9
7
3
5
1
,
6
8
6
8
8
,
—
9
6
7
—
—
4
6
9
9
,
9
6
0
7
,
5
0
0
0
3
,
—
0
2
2
2
2
2
—
—
—
—
)
7
2
(
6
8
2
2
4
3
4
,
3
4
0
5
,
)
8
8
6
4
(
,
7
1
8
5
,
7
4
6
5
7
,
4
6
4
1
8
,
—
—
7
1
2
1
,
)
0
0
4
8
(
,
9
8
3
0
3
,
7
8
7
1
0
4
4
2
9
6
9
4
,
)
7
4
(
0
0
3
9
7
9
8
,
—
—
6
2
9
3
4
5
1
,
0
8
9
4
1
,
9
3
5
1
1
,
1
2
4
0
0
1
,
0
6
9
1
1
1
,
—
0
1
2
4
6
3
6
1
,
8
2
1
9
6
5
4
,
1
9
4
2
4
9
—
7
1
5
2
,
)
9
4
0
2
(
,
—
—
—
)
4
1
(
8
1
4
1
,
5
0
3
3
,
2
7
6
2
,
3
3
8
1
1
,
2
5
1
0
3
1
,
5
8
9
1
4
1
,
—
8
5
1
)
6
3
(
4
1
6
4
,
8
5
1
1
3
,
)
a
(
4
)
b
(
4
)
b
(
4
)
b
(
3
1
)
a
(
5
)
b
(
3
1
0
1
s
s
o
l
/
t
i
f
o
r
p
h
g
u
o
r
h
t
o
i
l
o
f
t
r
o
p
c
i
g
e
t
a
r
t
s
o
i
l
o
f
t
r
o
p
g
n
d
a
r
t
i
t
l
u
s
e
R
d
n
a
e
u
n
e
v
e
R
e
m
o
c
n
i
t
s
e
r
e
t
n
I
e
m
o
c
n
i
d
n
e
d
i
v
i
D
e
m
o
c
n
i
r
e
h
t
O
f
o
t
n
e
m
e
v
o
m
e
u
l
a
v
r
i
a
f
t
e
N
f
o
t
n
e
m
e
v
o
m
e
u
l
a
v
r
i
a
f
t
e
N
s
e
i
t
i
r
u
c
e
s
s
a
d
e
i
f
i
s
s
a
l
c
e
r
s
t
n
e
m
t
s
e
v
n
i
d
e
t
n
u
o
c
c
a
y
t
i
u
q
e
n
o
n
i
a
g
t
e
N
i
s
t
n
u
o
c
c
a
d
e
t
a
n
m
o
n
e
d
y
c
n
e
r
r
u
c
n
g
i
e
r
o
f
n
o
n
i
a
g
t
e
N
s
e
i
t
i
l
i
b
a
i
l
l
a
i
c
n
a
n
i
f
n
o
s
s
o
l
e
u
l
a
v
r
i
a
F
x
a
t
e
m
o
c
n
i
e
r
o
f
e
b
r
a
e
y
e
h
t
r
o
f
)
s
s
o
l
(
/
t
i
f
o
r
p
t
e
N
)
i
i
(
e
m
o
c
n
i
r
e
h
t
o
d
n
a
e
u
n
e
v
e
r
t
n
e
m
g
e
s
l
a
t
o
T
e
s
n
e
p
x
e
x
a
t
e
m
o
c
n
I
d
o
i
r
e
p
e
h
t
r
o
f
x
a
t
e
m
o
c
n
i
r
e
t
f
a
)
s
s
o
l
(
/
t
i
f
o
r
p
t
e
N
s
t
n
e
m
t
s
e
v
n
i
d
e
t
n
u
o
c
c
a
y
t
i
u
q
E
s
t
e
s
s
a
r
e
h
t
O
s
t
e
s
s
a
l
a
t
o
T
s
t
e
s
s
A
n
o
i
t
a
m
r
o
f
n
i
t
n
e
m
g
e
s
r
e
h
t
O
s
e
t
a
i
c
o
s
s
a
d
n
a
s
e
r
u
t
n
e
v
t
n
o
i
j
f
o
t
i
f
o
r
p
f
o
e
r
a
h
S
t
n
e
m
t
s
e
v
n
i
d
e
t
n
u
o
c
c
a
y
t
i
u
q
e
f
o
t
n
e
m
t
s
e
v
i
d
n
o
n
i
a
g
t
e
N
I
C
O
h
g
u
o
r
h
t
o
i
l
o
f
t
r
o
p
c
i
g
e
t
a
r
t
s
e
h
t
f
o
t
n
e
m
e
v
o
m
e
u
l
a
v
r
i
a
f
t
e
N
n
o
i
t
a
i
c
e
r
p
e
D
s
t
s
o
c
e
c
n
a
n
F
i
.
s
e
i
t
i
l
i
b
a
i
l
d
n
a
s
t
e
s
s
a
e
t
a
r
o
p
r
o
c
r
e
h
t
o
d
n
a
s
t
s
o
c
e
t
a
r
o
p
r
o
c
,
e
m
o
c
n
i
D
E
T
I
M
I
L
A
I
L
A
R
T
S
U
A
E
N
D
A
I
R
A
9
2
.
s
s
o
l
d
n
a
t
i
f
o
r
p
h
g
u
o
r
h
t
d
e
d
r
o
c
e
r
s
e
s
s
o
l
/
s
n
i
a
g
r
e
h
t
o
d
n
a
s
e
s
s
o
l
/
s
t
i
f
o
r
p
’
s
e
t
a
i
c
o
s
s
a
d
n
a
’
s
e
r
u
t
n
e
v
t
n
o
i
j
f
o
e
r
a
h
s
s
’
p
u
o
r
G
e
h
t
e
d
u
l
c
n
i
s
e
u
n
e
v
e
r
l
a
t
o
T
t
n
e
m
e
g
a
n
a
m
s
e
d
u
l
c
n
i
t
n
e
m
g
e
s
d
e
t
a
c
o
l
l
a
n
U
s
l
a
s
r
e
v
e
r
/
)
s
n
o
i
s
i
v
o
r
p
(
t
n
e
m
r
i
a
p
m
I
s
e
i
t
i
l
i
b
a
i
l
t
n
e
m
g
e
S
)
i
(
)
i
i
(
Notes to Financial Statements (Continued)
202 2 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2022
4. REVENUES AND EXPENSES
Revenue and Expenses from Continuing Operations
(a) Dividend income
Received from trading portfolio
Received from strategic portfolio
GROUP
Notes
2022
$’000
2021
$’000
595
347
942
2,517
—
426
2,943
347
54
401
(47)
300
232
485
(b) Other income, gain and losses
Net fair value movement of the strategic portfolio through profit or loss
Net gain on divestment of equity accounted investments
Other income
11
Investments in the 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 the strategic portfolio is disclosed in Note 11.
(c) Employee benefits expense
Salaries, wages and on costs
Leave provisions
Superannuation
Share-based payment expense
(d) Depreciation
Plant and equipment depreciation
Right of use asset depreciation
2,350
296
153
13
2,812
115
348
463
2,058
68
137
4
2,267
242
344
586
18(a)
30
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 2 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2022
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
2022
$’000
2021
$’000
GROUP
Group accounting (loss) / profit after tax reported in the Statement of Profit or Loss and OCI
Income tax expense reported in the Statement of Profit or Loss and OCI
Group accounting (loss) / profit before income tax
At the Group’s statutory income tax rate of 25% (2021: 26%)
Permanent differences
Other movements
Tax losses carried forward / (utilised)
Income tax expense reported in the Statement of Profit or Loss and OCI
(b) Deferred tax balances
(5,710)
—
(5,710)
(1,428)
(1,645)
857
2,224
—
10,572
—
10,572
2,749
(1,866)
305
(1,188)
—
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 2022, these are
estimated at $89,602 (2021: $80,378) and $72,377 (2021: $72,292) respectively. The full 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 (2021: nil) deferred tax asset for the revenue tax losses carried by the Group be 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 assessment also 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, a deferred tax asset of $3,435 (2021: nil), equal to the deferred
tax liability on the net temporary differences of financial assets held on capital account, has been recognised at balance date. The recognised
and unrecognised value of the Group’s deferred tax asset relating to capital tax losses is set out in the table below.
Recognised deferred tax assets / (liabilities) comprises:
Tax losses - revenue
Tax losses - capital
Temporary differences
Financial assets held in the strategic portfolio
Net deferred tax asset recognised
Unrecognised deferred tax assets comprises:
Tax losses - revenue
Tax losses - capital
Net deferred tax asset unrecognised
—
3,563
(3,563)
—
22,400
14,531
36,931
—
—
—
—
20,898
18,796
39,694
31
A R I A D N E A U S T R A L I A L I M I T E D
202 2 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2022
6. EARNINGS PER SHARE
Basic EPS amounts are calculated by dividing net profit or loss for the year attributable to ordinary equity holders of Ariadne by the
weighted average number of ordinary shares outstanding during the year as outlined in Note 2(v).
Diluted EPS amounts are calculated by dividing the net profit or loss attributable to ordinary equity holders of the parent by the weighted
average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued
on the conversion of all the dilutive potential ordinary shares into ordinary shares.
Earnings and share data used in the calculations of basic and diluted earnings per share:
Net (loss) / profit attributable to members ($’000)
Earnings used in calculating basic and diluted EPS ($’000)
Total comprehensive income attributable to members ($’000)
Total comprehensive earnings used in calculating basic and diluted EPS ($’000)
Weighted average number of ordinary shares used in calculating basic EPS
Effect of dilutive securities:
Employee share options
Weighted average number of ordinary shares used in calculating diluted EPS
Basic EPS (cents per share)
Diluted EPS (cents per share)
Total comprehensive EPS (cents per share)
Total comprehensive diluted EPS (cents per share)
7. DIVIDENDS PAID AND PROPOSED ON ORDINARY SHARES
Dividends paid during the year:
FY21 Final 40% franked dividend of 0.50 cents per share (2020: nil)
FY22 Interim fully franked dividend of 0.25 cents per share (2021: 70% franked 0.70 cents)
Dividends proposed:
Final fully franked dividend of 0.75 cent per share (2021: 40% franked 0.50 cent)
ARIADNE
2022
2021
(6,595)
(6,595)
23,328
23,328
10,572
10,572
36,678
36,678
196,242,360
196,242,360
500,000
196,742,360
—
196,242,360
(3.36)
(3.36)
11.89
11.86
5.39
5.39
18.69
18.69
$’000
$’000
981
491
1,472
1,472
1,472
—
1,374
1,374
981
981
The Directors have declared a fully franked final dividend of $1,472 (0.75 cents per share) in relation to the 2022 financial year. As
the final dividend for 2022 was declared after balance date, no liability was recognised at balance date. The FY22 interim dividend of
$490 (0.25 cents per share) declared in February 2022 was paid on 28 March 2022.
Franking Account
The amount of franking credits available for distribution from the franking account at year end was $566 (2021: $456). The final dividend
for 2022 is fully franked.
8. CASH AND CASH EQUIVALENTS
Cash at call
Cash on term deposit
GROUP
Notes
2022
$’000
2021
$’000
22,880
—
22,880
28,629
—
28,629
32
A R I A D N E A U S T R A L I A L I M I T E D
202 2 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2022
9. FINANCIAL ASSETS (CURRENT)
Investments in the trading portfolio were valued at $6,428 (2021: $8,448) at period end and are remeasured to fair value based on the
appropriate level inputs at the end of the reporting period as outlined in Note 2(j).
10. RECEIVABLES (NON-CURRENT)
Gross related entity loans and advances
Impairment
Net related entity loans and advances
Other loans and advances
Notes
20(ii)
(i)
(ii)
GROUP
2022
$’000
2021
$’000
13,336
(8,400)
4,936
5,407
10,343
14,463
—
14,463
4,529
18,992
(i) The Group holds a $8,400 loan receivable from the Kippax Redfern Unit Trust (“Kippax Redfern”), a related entity. For the past 2 years, Kippax
Redfern has been pursuing a planning approval for a site in Redfern (“the Redfern site”), located in the Botany Road Precinct, over which Kippax
Redfern holds an option to purchase (“the Option”). Despite working closely and collaboratively with the City of Sydney Council for a long period of
time, in June the Council voted to remove the Redfern site and neighbouring properties from the Botany Road Precinct. While the Option is now
considered ‘out-of-the-money’, there is a potential pathway for the Redfern site to receive a planning uplift although it is too early to determine the
likely prospects of success. As a result, the Group has impaired its $8,400 loan receivable to nil value at balance date.
(ii) The remaining loans to related entities include $127 to the Kippax Property Unit Trust and $4,809 to Orams Group Limited, both loans are directly
supported by the assets of the borrower. Further related party details are included at Note 20.
11. FINANCIAL ASSETS (NON-CURRENT)
Cost
Accumulated fair value adjustments
Net carrying amount
Reconciliations for listed strategic investments
Opening balance
Additions
Reclassified securities
Fair value adjustments through other comprehensive income
Disposals
Net carrying amount of listed investments
Reconciliations for unlisted strategic investments
Opening balance
Additions
Reclassified securities
Fair value adjustments through profit or loss
Fair value adjustments through other comprehensive income
Disposals
Net carrying amount of unlisted investments
83,417
14,251
97,668
49,341
1,000
—
13,818
(3,113)
61,046
16,414
1,869
—
2,517
17,340
(1,518)
36,622
85,223
(19,468)
65,755
18,223
1,544
14,232
15,342
—
49,341
12,026
1,539
1,874
(47)
1,022
—
16,414
(i)
(ii)
(i)
(i)
(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.
33
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 2 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2022
12. CONTROLLED ENTITIES
NAME
Ariadne Administration Pty Ltd
Ariadne Capital Pty Ltd
Ariadne Financial Services Pty Ltd
Ariadne Freehold Pty Ltd
Ariadne Holdings Pty Ltd
Ariadne Investment Holdings Pty Ltd
Ariadne Marinas Oceania Pty Ltd
Ariadne Properties Pty Ltd
Delta Equities Pty Ltd
Freshxtend International Pty Ltd
Orams NZ Unit Trust
Portfolio Services Pty Ltd
Place of
incorporation
Percentage of equity held by
Ariadne
QLD
QLD
NSW
NSW
ACT
QLD
QLD
QLD
NSW
QLD
QLD
QLD
2022
100
100
100
100
100
100
100
100
100
53
80
100
2021
100
100
100
100
100
100
100
100
100
53
80
100
13. INVESTMENTS IN JOINT VENTURES AND ASSOCIATES
(a) Details of the Group’s investment in joint ventures and associates
Name
Principal activity
Orams Group Limited
Orams Residential Limited
Kippax Property Trust
Lake Gold Pty Ltd
AgriCoat NatureSeal Limited
NatureSeal Inc
Marina management
Residential development
Property investment
Mineral exploration
Food life extension technology
Food life extension technology
(b) Aggregate information of joint ventures and associates
Place of
incorporation
Proportion of ownership
interest and voting power held
by the Group
NZ
NZ
AUS
AUS
UK
US
Notes
2022
76%
76%
50%
50%
17%
17%
2022
$’000
GROUP
2021
76%
76%
50%
50%
17%
17%
2021
$’000
35,917
5,068
11,798
801
54,717
(16,593)
(5,253)
(1,608)
84,846
Balance at the beginning of the reporting period
Share of joint ventures’ and associates’ profits
Share of joint ventures’ and associates’ reserves
Net investment in joint ventures and associates
Joint ventures and associates included via the additional acquisition in ONZUT
Joint ventures and associates reclassified as subsidiary on business combination
Joint ventures and associates reclassified as securities on loss of significant influence
Distributions received from joint ventures and associates
Carrying amount of investment in joint ventures and associates at reporting period end
84,846
5,760
(1,122)
—
—
—
—
(2,004)
87,480
The Group’s share of joint ventures’ and associates’ commitments and contingent liabilities is disclosed in Note 18.
34
A R I A D N E A U S T R A L I A L I M I T E D
202 2 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2022
13. INVESTMENTS IN JOINT VENTURES AND ASSOCIATES (Continued)
(c) Summary financial information of material joint ventures and associates
Orams NZ Unit Trust (“ONZUT”), Orams Group Limited (“Orams”) and Orams Residential Limited (“ORL”)
On 14 July 2021, acquired an additional 30% interest in ONZUT, increasing its interest in ONZUT to 80% and its indirect holding in
Orams Group Limited to 61%. Although ONZUT owns 76% of the equity and voting interest in Orams and ORL, the Shareholders
Agreements require that the two majority shareholders must act together to direct the relevant activities of the company, therefore
no individual shareholder has control.
Orams is the owner of Orams Marine Village and Orams Marine Services, New Zealand’s premier marine facility and largest marine
maintenance and refit services business respectively and during the period, completed the initial stage of its new state-of-the-art marine
refit facility. The new 13,000 square metre yard, and three new 90 metre marinas, have near tripled the capacity for Orams Marine Services’
marine maintenance and refit business. The Orams facilities now offer the most comprehensive refit and boat maintenance infrastructure
in the Southern Hemisphere. With three travel lifts (820, 85 and 75 tonnes), as well as the existing 600 tonne slipway, Orams can haul out
vessels from superyachts to domestic vessels, and a wide range of commercial boats including the regional ferry fleet. The next stage of
works consists of three marine work sheds – one marine shed to accommodate the 85 tonne travel lift which was completed during the
period and two superyacht sheds to accommodate the 820 tonne travel lift scheduled for completion early 2023. The new superyacht
sheds will expand Orams’ ability to provide specialised superyacht services within a controlled environment, cementing Orams’ position
as the superyacht hub of the South Pacific. Further stages of the development will feature commercial buildings and a residential component
on the northern end of the site.
Financial metrics for Orams
Revenue
Interest expense
Depreciation
Income tax
Profit
Share of profit at 76%
Other comprehensive income
Share of other comprehensive income at 76%
Cash and cash equivalents
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Share of net assets at 76%
Notes
2022
NZ$’000
2021
NZ$’000
20,128
(2,833)
(1,759)
(209)
978
743
472
359
856
47,982
223,960
(11,093)
(119,792)
104,168
79,116
21,415
(886)
(1,151)
(2,947)
7,462
5,667
18,148
13,783
4,307
50,151
214,305
(11,218)
(111,586)
102,719
78,015
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 2 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2022
14. LOANS AND BORROWINGS
Current
Non-interest bearing facilities
Interest bearing facilities
NZ-dollar interest bearing facilities
Non-current
NZ-dollar interest bearing facilities
Total loans and borrowings
GROUP
2022
$’000
2021
$’000
—
10,897
2,706
13,603
6,500
7,150
1,396
15,046
Notes
(i)
(ii)
(iii)
(iii)
10,823
13,960
24,426
29,006
(i) The Group received a non-interest-bearing loan of $6,500 from an entity associated with the Deputy Chairman, Mr Kevin Seymour during the prior
period which became a payable-on-demand 10% fixed interest-bearing facility during the period. The loan was paid down to $2,247, including
capitalised interest of $247, during the period, see also Note 20.
(ii) The Group drew down $1,500 (2021: $1,700) from its bank loan facility during the period, reducing the Group’s unused and available loan facility to
$875 (2021: $2,546) as summarised in the table below. The 12-month rolling facility is a variable interest rate facility that averaged 2.5% during the
period. Ariadne has provided a guarantee for this finance facility, refer to Note 18(c).
(iii) ONZUT repaid NZ$1,500 (2021: NZ$1,500) during the period, leaving a facility balance of NZ$15,000 (2021: NZ$16,500) at period end. The
variable interest rate facility averaged 5.4% (2021: 4.3%) during the period and was extended by a further four months to September 2023. Ariadne
has provided a guarantee on behalf of ONZUT for this finance facility, refer to Note 18(c).
Financing facilities available
Total facilities
Bank loan facilities
Other facilities
Other facilities not recorded on the Group’s Balance Sheet (i)
Facilities used at reporting date
Bank loan facilities
Other facilities
Other facilities not recorded on the Group’s Balance Sheet
Facilities unused at reporting date
Bank loan facilities
Other facilities
Other facilities not recorded on the Group’s Balance Sheet
20(iii)
18(c)
23,054
2,247
9,544
22,179
2,247
9,431
875
—
113
25,052
6,500
304
22,506
6,500
304
2,546
—
—
(i) Other facilities not recorded on the Group’s Balance Sheet include a $525 Bank Guarantee facility and a NZ$10,000 Standby Letter of Credit facility.
15. CONTRIBUTED EQUITY AND RESERVES
(a) Ordinary Ariadne shares on issue
At beginning of the reporting period
Shares bought back
Balance at reporting period end
Note
2022
2021
Number of
shares
196,242,360
—
196,242,360
$’000
378,156
—
378,156
Number of
shares
196,242,360
—
196,242,360
$’000
378,156
—
378,156
On 21 February 2022, as part of ongoing capital management initiatives, Ariadne extended its on-market buy-back facility, allowing up to
10% of its capital to be repurchased, 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.
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 2 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2022
15. CONTRIBUTED EQUITY AND RESERVES (Continued)
(b) Share Options
Employee options over Ariadne ordinary shares
At beginning of the reporting period
Employee share options issued
Employee share options expired
Employee share options exercised
Balance at reporting period end
ARIADNE
2022
2021
Number of
options
Number of
options
1,000,000
650,000
—
—
1,650,000
1,500,000
—
500,000
—
1,000,000
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.
(c) Reserves
At 1 July 2020
Current year profits to profit reserve
Movements through OCI, net of tax
Movements within reserves
Transfer of reserves to accum. losses
Cost of share-based payment
At 30 June 2021
Current year profits to profit reserve
Movements through OCI, net of tax
Movements within reserves
Transfer of reserves to accum. losses
Cost of share-based payment
Dividends
At 30 June 2022
Nature and purpose of reserves
Share
options
reserve
Financial
asset
revaluation
reserve
Property
asset
revaluation
reserve
Foreign
currency
translation
reserve
$’000
164
$’000
(39,788)
—
—
—
(41)
4
—
16,364
—
—
—
$’000
7,890
—
10,330
(8,030)
—
—
$’000
1,985
—
(588)
(27)
—
—
Profits
reserve
$’000
98,665
16,319
—
27
—
—
Capital
profits
reserve
$’000
71,239
—
—
8,030
—
—
ARIADNE
$’000
140,155
16,319
26,106
—
(41)
4
127
(23,424)
10,190
1,370 115,011
79,269 182,543
—
—
—
—
13
—
—
31,158
(1,031)
500
—
—
—
258
—
—
—
—
—
(1,493)
—
—
—
—
5,353
—
—
—
—
(1,472)
—
—
1,031
—
—
—
5,353
29,923
—
500
13
(1,472)
140
7,203
10,448
(123) 118,892
80,300 216,860
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 joint ventures’ and associates’ movements in the fair value of property
assets 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 net of tax 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.
37
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 2 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2022
15. CONTRIBUTED EQUITY AND RESERVES (Continued)
(c) Reserves (Continued)
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 2022 amount carried to profits reserve (in accordance with director resolutions) of $5,353 (2021: $16,319) includes an amount
of $4,866 (2021: $16,319) relating to subsidiary entities and is not available for distribution as frankable dividends to the equity holders of
Ariadne at 30 June 2022.
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.
$1,031 (2021: $8,030) was carried to capital profits reserve during the period.
(d) Accumulated losses
Opening balance
Transfer of reserves to accum. losses
Equity transactions with equity holders
Net loss not carried to profit reserve
Closing balance
Notes
GROUP
2022
$’000
(411,750)
(500)
98
(11,948)
(424,100)
2021
$’000
(406,044)
41
—
(5,747)
(411,750)
16. CASH FLOW STATEMENT RECONCILIATION
Reconciliation of the net (loss) / profit after tax to the net cash flows from operations
Net (loss) / profit after tax
(5,710)
11,534
Adjustments for:
Share options expense
Depreciation 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
Net gain on equity accounted investments reclassified as securities
Fair value loss on financial liability
Transfers to provisions:
Employee entitlements
4(c)
18(a)
13(b)
13(b)
13
348
115
8,436
(5,760)
2,004
—
27
4
344
242
(128)
(5,068)
1,608
(8,979)
4,631
4(c)
296
68
Changes in assets and liabilities:
(Increase) / decrease in 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 used in operating activities
4(b)
(940)
2,049
(2,517)
41
(57)
(8)
(1,663)
387
(4,539)
47
(18)
(1,085)
(36)
(988)
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 2 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2022
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, loans 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
2022
$’000
2021
$’000
22,880
4,936
27,816
24,425
24,425
3,390
28,629
14,463
43,092
22,506
22,506
20,586
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)
10
(10)
187
(187)
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.
(c) Foreign currency risk
As at 30 June 2022, the Group did not have any significant exposure to movements in foreign exchange rates on any of its financial
instruments.
The Group holds material investments in joint ventures and associates that are located in foreign currency jurisdictions where the Group’s
share of results denominated in foreign currencies are translated to Australian Dollars. At reporting date, the exposure to joint ventures
and associates reporting in a foreign currency was $86,839 (2021: $84,145). If the foreign exchange rates of investments in foreign joint
ventures and associates had been 10% higher or lower at balance date, the Group would be impacted through equity by $8,684 higher or
lower (2021: $8,415).
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 2 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2022
17. FINANCIAL INSTRUMENTS (Continued)
(c) Foreign currency risk (Continued)
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 $67,474 (2021: $57,789). 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 $6,747 higher
or lower (2021: $5,779).
(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.
Other than the $8,400 loan to the Kippax Redfern Unit Trust, 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
$’000
6 – 12 months
$’000
1 – 5 years
$’000
GROUP
$’000
30 June 2022
Trade and other payables
Lease liabilities
Loans and borrowings
Other payables
Total financial liabilities exposed to liquidity risk
30 June 2021
Trade and other payables
Lease liabilities
Loans and borrowings
Other payables
Total financial liabilities exposed to liquidity risk
227
200
2,247
—
2,674
254
53
6,500
—
6,807
—
201
11,356
—
11,557
—
—
8,546
—
8,546
—
1,470
10,823
14,613
26,906
—
—
13,960
14,586
28,546
227
1,871
24,426
14,613
41,137
254
53
29,006
14,586
43,899
(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:
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 2 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2022
17. FINANCIAL INSTRUMENTS (Continued)
(g) Fair values (Continued)
Cash
The carrying amount approximates fair value because of its short-term to maturity.
Trade and other receivables
The carrying amount approximates fair value.
Investments
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.
The following table shows the levels within the hierarchy of financial assets and liabilities measured at fair value on a recurring basis as at
30 June 2022.
Financial Assets
30 June 2022
Listed trading investments
Listed strategic investments
Unlisted strategic investments
Total Financial Assets
30 June 2021
Listed trading investments
Listed strategic investments
Unlisted strategic investments
Total Financial Assets
Notes
Level 1
Level 2
Level 3
Total
9
11
11
9
11
11
6,428
61,046
—
67,474
8,448
49,341
—
57,789
—
—
36,622
36,622
—
—
16,414
16,414
—
—
—
—
—
—
—
—
6,428
61,046
36,622
104,096
8,448
49,341
16,414
74,203
The Group has two separate and distinct investment portfolios and designates its investments as either trading or strategic.
Investments within all the portfolios are remeasured to fair value based on the appropriate level inputs at the end of the reporting
period. 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. Non-equity accounted unlisted securities are remeasured to fair values using Level 2
inputs calculated by reference to the fair value of the underlying investments or last transaction price at balance date.
Financial Liabilities
30 June 2022
Contingent Consideration
Total Financial Liabilities
30 June 2021
Contingent Consideration
Total Financial Liabilities
Level 1
Level 2
Level 3
Total
—
—
—
—
14,613
14,613
14,586
14,586
—
—
—
—
14,613
14,613
14,586
14,586
Contingent Consideration has been remeasured to fair value using a Level 2 input, share of net assets. For more information refer
to Note 18(c).
Trade and other payables
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.
41
A R I A D N E A U S T R A L I A L I M I T E D
202 2 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2022
18. LEASES, COMMITMENTS AND CONTINGENCIES
(a) Leases
The Group enters into operating leases as a means of acquiring access to office space. The Group’s lease liabilities total $1,871 (2021: $53)
with $401 (2021: $53) current and $1,470 (2021: nil) non-current.
During the period, right of use assets were depreciated by $348 (2021: $344) and lease rental payments of $360 (2021: $380) were used
to reduce the lease liabilities by $343 (2021: $364) and meet $17 (2021: $16) of lease liability interest. At balance date, the carrying value
of the Group’s right of use assets were $1,871 (2021: $57).
(b) Commitments
The Group enters into contractual capital commitments with investment vehicles from time to time, as at balance date the Group’s uncalled
capital commitments were $2,816 (2021: $4,567).
(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.
The Group acquired an additional 30% equity interest in ONZUT from an existing unitholder on 14 July 2020. The Contingent
Consideration for the acquisition was estimated to be $14,613 (2021: $14,586) at balance date, although the terms of the acquisition
provide that the ultimate purchase price will be determined and paid following completion of the Site 18 Stage 1 Works (as defined
in the Development Agreement with Panuku Development Auckland) which is expected to be before June 2026.
Details of finance facilities for the controlled entities are included in Note 14. Ariadne has guaranteed $19,069 (2021: $10,000) of the
borrowing obligations under these facilities which includes a NZ$10,000 Standby Letter of Credit issued to Westpac NZ on behalf of
Orams.
Ariadne has also provided a guarantee on behalf of ONZUT for finance facilities totalling NZ$12,000 (2021: NZ$13,200). The assets
provided by ONZUT as security in relation to its finance facilities are sufficient to meet its obligations.
19. 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
ARIADNE
2022
$’000
2021
$’000
500
37,662
—
—
378,156
2,955
28,728
140
(372,317)
37,662
487
487
—
38,634
—
—
378,156
2,955
29,713
127
(372,317)
38,634
(4)
(4)
The nature and purpose of each reserve is disclosed in Note 15(c) and details of guarantees given are recorded in Note 18(c).
The financial information for the parent entity has been prepared on the same basis as the consolidated financial statements, except
investments in subsidiaries, associates and joint venture entities are accounted for at cost and dividends received from associates are
recognised in the parent entity’s profit or loss when its right to receive the dividend is established.
42
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 2 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2022
20. 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 balances and transactions
Balance / transaction type
Class of related party
Notes
Loans to other related parties
Loans advanced
Loans repaid
Loans outstanding
Loans impaired
Loans from other related parties
Loans received
Loans repaid
Loans outstanding
Investments in related parties
Equity accounted investment
Equity accounted investment
Equity accounted investment
Equity accounted investment
Director related entity
Director related entity
Director related entity
(i)
(i)
(ii)
(ii)
(iii)
(iii)
(iii)
GROUP
2022
$
2021
$
1,900,000
50,000
7,917,917
623,816
13,335,635
14,463,109
8,400,000
—
247,063
4,500,000
2,247,063
6,500,000
—
6,500,000
Investments in other financial assets
Director related entity
(iv)
1,869,427
1,196,732
Investments in equity accounted investments
Equity accounted investment
—
1,075
Other transactions
Rent received or receivable
Equity accounted investment
Interest received or receivable
Equity accounted investment
Interest paid or payable
Equity accounted investment
SBLC fee received or receivable
Equity accounted investment
Licence fees received or receivable
Director related entity
Management fees paid or payable
Director related entity
Consulting fees paid or payable
Director
Dividends and distributions received
Equity accounted investment
(v)
(vi)
(iii)
(vii)
(viii)
(iv)
13(b)
97,146
206,152
247,063
221,888
—
336,679
44,000
49,000
186,400
—
—
24,000
195,701
44,000
2,004,783
1,607,853
All transactions with related parties are conducted on normal commercial terms and conditions.
(i)
(ii)
The Group advanced $1,900,000 to entities associated with Kippax Property Trust (“KPT”) to fund real estate development projects and received
loan repayments of $50,000 from KPT during the period.
At balance date, the Group had carrying values of $126,855 for loans to entities associated with KPT, $8,526,855 in loans outstanding impaired by
$8,400,000 – refer to Note 10, and a $4,808,780 loan to Orams directly supported by the assets of the borrower.
(iii) The Group received a non-interest-bearing loan of $6,500,000 from an entity associated with the Deputy Chairman, Mr Kevin Seymour during the
prior period which became a payable-on-demand 10% fixed interest-bearing facility during the period. The loan was paid down to $2,247,063, including
capitalised interest of $247,063, during the period.
(iv) Mr Barter is an Executive Director of King River Capital Management Pty Ltd (“KRC”). The Group made investments of $1,869,427 during the
period which were associated or otherwise managed by entities related to KRC.
The Group earned rental income of $97,146 from KPT during the period.
(v)
(vi) Gross interest earned on loans to related entities.
(vii) The Group earned a fee of $221,888 for providing a NZ$10,000,000 Standby Letter of Credit (“SBLC fee”) to Orams during the period.
(viii) The Group paid investment management fees of $336,679 during the period to an entities related to KRC.
(ix) 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 $44,000. 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.
43
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 2 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2022
21. DIRECTOR AND EXECUTIVE DISCLOSURES
Remuneration of Key Management Personnel
Short term employee benefits
Post-employment benefits
Share based payments
Total remuneration
22. REMUNERATION OF AUDITORS
Amounts received or due and receivable by Grant Thornton Audit Pty Ltd
An audit or review of the financial report of the entity and any other entity in the Group
Services in relation to the entity and any other entity in the Group
Total amount to Grant Thornton Audit Pty Ltd
23. EVENTS AFTER THE BALANCE DATE
GROUP
2022
$
2021
$
1,846,921
116,068
6,073
1,969,062
1,654,043
109,944
3,910
1,767,897
144,200
—
144,200
126,500
—
126,500
After the balance date, the Directors declared a final dividend on ordinary shares in respect of the 2022 financial year. The total amount
of the dividend is $1,472 which represents a fully franked dividend of 0.75 cents per share.
On 13 July 2022 the Group received a $21,539 cash distribution from Ardent Leisure Group (“Ardent”) by way of return of capital and
special dividend following the completion of the sale of Ardent’s interest in its US business, Main Event Entertainment.
Apart from the matters above, there is no other matter of circumstance that has arisen since 30 June 2022 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.
44
A R I A D N E A U S T R A L I A L I M I T E D
202 2 A N N U A L R E P O R T
Directors’ Declaration
FOR THE YEAR ENDED 30 JUNE 2022
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 2022 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 2022.
On behalf of the Board
Mr David Baffsky, AO
Chairman
Sydney
29 August 2022
45
A R I A D N E A U S T R A L I A L I M I T E D
Independent Auditor’s Report
202 2 A N N U A L R E P O R T
Independent Auditor’s Report
To the Members of Ariadne Australia Limited
Report on the audit of the financial report
Opinion
Grant Thornton Audit Pty Ltd
Level 17
383 Kent Street
Sydney NSW 2000
Locked Bag Q800
Queen Victoria Building NSW
1230
T +61 2 8297 2400
We have audited the financial report of Ariadne Australia Limited (the “Company”) and its subsidiaries (the
“Group”), which comprises the consolidated statement of financial position as at 30 June 2022, the consolidated
statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and
consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements,
including a summary of significant accounting policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
a giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance for
the year ended on that date; and
b 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 and 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 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 of 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.
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389. ‘Grant Thornton’
refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms,
as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide
partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its
member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term
‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by
a scheme approved under Professional Standards Legislation.
w
46
A R I A D N E A U S T R A L I A L I M I T E D
Independent Auditor’s Report
202 2 A N N U A L R E P O R T
Key audit matter
How our audit addressed the key audit matter
Valuation of Orams Marine Village, Office Building Development Land, and Residential Land
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.
Orams NZ Unit Trust (‘ONZUT’), a subsidiary of Ariadne
Australia Limited, holds an equity-accounted investment in
Orams Group Limited (‘OGL’) and Orams Residential Limited
(‘ORL’), companies incorporated in New Zealand.
OGL records its holding of the Orams Marine Village and
Office Building Development at fair value in accordance with
NZ IAS 16 Property, Plant and Equipment. ORL holds
Residential Land, also recorded at fair value and in
accordance with NZ IAS 40 Investment Property.
OGL management engaged an independent expert to value
the Orams Marine Village, Office Building Development, and
the Residential Land.
The Group’s investment in OGL and ORL is recorded at
$75m. In the financial year ended 30 June 2022, The Group’s
share of the uplift in value of the Orams Marine Village and
Office Building Development is $0.3m, and the Group’s share
of the uplift in value of the Residential Land is $5.2m. This
area is a key audit matter given the significant judgement of
calculating the fair values, including determining key
assumptions.
Our procedures included, amongst others:
• Assessing the competency and objectivity of the
management expert with respect to the fair value of
Orams Marine Village, Office Building Development
Land and the Residential Land;
• Assessing the conclusions reached by management’s
expert with respect to the fair value of Orams Marine
Village, Office Building Development Land and
Residential Land;
• Challenging the appropriateness of key assumptions
utilised in the fair value calculations;
• Performing sensitivity analysis on the key
assumptions adopted in the valuations;
• Assessing the impact on deferred tax balances;
• Agreeing to management's budgeted costs to
complete contracted future works;
• On a sample basis, agreeing costs incurred during the
year in relation to Orams Marine Village and Office
Building Development;
• Agreeing the equity accounted share of profit or loss
and share of the reserve to the audited trial balance of
OGL and ORL; and
• Assessing the adequacy of associated disclosures
Valuation of unlisted investments
Refer to Note 11 and 17
The Group holds unlisted financial assets within its strategic
portfolio at a value of $36.62m.
Our procedures included, amongst others:
• Evaluating management’s valuation approach to value
Consistent with the requirements of AASB 9 Financial
Instruments, these financial assets are accounted for at fair
value in the Balance Sheet and classified as either fair
value through profit or loss ("FVPL") or fair value through
other comprehensive income ("FVOCI").
•
the unlisted investments;
Involving our valuation specialist to assess and
compare the valuation inputs adopted by management
to available market information relating to similar
transactions and companies with similar characteristics;
These financial assets are classified as ‘level 2’ in
accordance with AASB 13 Fair Value Measurement.
The measurement of level 2 financial assets is based on
inputs other than quoted prices that are observable for the
asset, either directly or indirectly. Therefore, the valuation
of level 2 financial instruments requires a higher level of
judgement.
We have focused on this area as a key audit matter due to
the Group being an investment company, the amounts
being material to the financial report and the inherent
judgment involved in determining the fair value of
investments.
• Challenging the appropriateness of key assumptions
utilised in the fair value calculations and methodologies
used;
• Obtaining relevant financial information of the unlisted
investee companies to assess the reasonableness of
valuations adopted;
• Substantiating the Group’s shareholding in each
investment;
• Recalculating fair value gains and losses and
comparing this to amounts recorded in the financial
statements; and
• Assessing the adequacy of associated disclosures
Grant Thornton Australia Limited
47
A R I A D N E A U S T R A L I A L I M I T E D
Independent Auditor’s Report
202 2 A N N U A L R E P O R T
Information other than the financial report and auditor’s report thereon
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 2022, but does not include the financial report and our auditor’s report
thereon.
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 Group’s ability 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 have 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.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf.This description forms part of
our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in the Directors’ report for the year ended 30 June 2022.
In our opinion, the Remuneration Report of Ariadne Australia Limited, for the year ended 30 June 2022 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.
Grant Thornton Audit Pty Ltd
Chartered Accountants
M R Leivesley
Partner – Audit & Assurance
Sydney, 29 August 2022
Grant Thornton Australia Limited
48
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 2 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 2022.
(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
237
522
191
244
95
1,289
Number of
shares
68,172
1,548,992
1,401,917
7,614,371
185,608,908
196,242,360
198
33,737
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
UBS Nominees Pty Ltd
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
BNP Paribas Noms Pty Ltd
Mr Ronald Langley + Mrs Rhonda Elizabeth Langley
Katdan Investments Pty Limited
Mr John Emery Kennedy
Mr David Zalmon Baffsky
LVS Nominees Pty Ltd
Mr Ronald Langley
Charanda Nominee Company Pty Ltd
Est Mr Ross Alexander Macpherson
Katdan Investments Pty Limited
Ms Katrina Louise Langley
64,666,395
21,255,078
21,043,100
17,484,127
5,485,100
4,580,000
3,922,294
3,664,000
3,661,164
3,615,603
2,134,923
2,000,000
2,000,000
1,983,230
1,757,173
1,380,000
1,250,000
1,213,700
1,199,483
1,155,511
165,450,881
32.95%
10.83%
10.72%
8.91%
2.80%
2.33%
2.00%
1.87%
1.87%
1.84%
1.09%
1.02%
1.02%
1.01%
0.90%
0.70%
0.64%
0.62%
0.61%
0.59%
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
13,987,394
10,494,743
(d) Voting rights
All ordinary shares carry one vote per share without restriction.
49
A R I A D N E A U S T R A L I A L I M I T E D