ARIADNE AUSTRALIA LIMITED
2023 Annual Report
20 23 A N N U A L R E P O R T
Corporate Information
Directors
Mr David Hancock
(Independent Non-Executive Chairman)
Mr Christopher Barter
(Independent Non-Executive Director)
Mr John Murphy
(Independent Non-Executive Director)
Mr Benjamin Seymour
(Non-Executive Director)
Mr Kevin Seymour, AM
(Non-Executive Alternate Director to Mr Ben Seymour)
Mr Dean Smorgon
(Independent Non-Executive Director)
Dr Gary Weiss, AM
(Executive Director)
Company Secretary
Mr Natt McMahon
Registered Office and Principal Place of Business
Level 27, 2 Chifley Square, Chifley Tower
Sydney NSW 2000
Telephone: (02) 8227 5500
Facsimile: (02) 8227 5511
Share Register
Computershare Investor Services Pty Ltd
Level 3, 60 Carrington Street,
Sydney NSW 2000
Telephone: 1300 850 505 or +61 3 9415 4000
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
20 23 A N N U A L R E P O R T
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ABN 50 010 474 067
This report covers the consolidated entity comprising Ariadne Australia Limited (“Ariadne”) and its controlled entities (“the Group”).
The Group’s functional and presentation currency is Australian dollars (AUD).
A R I A D N E A U S T R A L I A L I M I T E D
20 23 A N N U A L R E P O R T
Chairman’s Letter
Dear Shareholders
I am honoured to address you as the new Chairman of Ariadne.
Our financial report this year shows an underlying loss of $5.4 million, stemming largely from mark-to-market valuations. However, I wish
to draw your attention to the resilience shown by our investment division, which posted a net profit before tax of $16.6 million. While
we cannot overlook the overall financial results, it is pivotal to acknowledge the sturdy position Ariadne retains with multiple investments.
We remain optimistic about these ventures and believe they hold the potential to yield substantial returns in upcoming years.
On a more sombre note, our company faced a profound loss with the passing of our previous Chairman, Mr. David Baffsky AO. His
unparalleled dedication, diligence, and significant contributions to Ariadne have left an indelible mark on the company. His mentorship and
guiding hand will be sorely missed by the entire team.
As I take on this role, I assure you of my commitment to Ariadne to continue to work towards delivering returns to shareholders.
I would like to thank Gary and the team for their work during the year and I am positive that we shall navigate the challenges and capitalise
on the opportunities that lie ahead.
Warm regards,
Mr David Hancock
Chairman
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Executive Director’s Review
20 23 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 2023.
Results for the period (millions)
30 June 2023
30 June 2022
Net profit / (loss) attributable to members
Other comprehensive income attributable to members
Total comprehensive income attributable to members
Total comprehensive income per share (cents)
Net tangible assets per share (cents)
Net operating cash inflow / (outflow)
11.1
(16.5)
(5.4)
(2.78)
83.65
13.1
(6.6)
29.9
23.3
11.89
87.09
(1.7)
Investments
The Investment division recorded a net profit before tax of $16.6 million (FY22: $2.7 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 division’s share of joint ventures and associates results for the period was a net profit of $1.6 million (FY22: $1.4 million).
Dividends received during the period were $12.0 million (FY22: $0.9 million), of which $11.1 million related to the cash dividend
received from Ardent Leisure Group Limited (“Ardent”).
The trading portfolio recorded a net profit for the period of $2.7 million (FY22: $2.0 million loss) and a portion of the strategic
portfolio, revalued through profit or loss, recorded a net gain of $0.5 million (FY22: $2.5 million) due to mark-to-market revaluations.
The strategic portfolio recorded a net loss of $15.2 million (FY22: $31.2 million gain) during the period due to mark-to-market
revaluations mainly arising from the Group’s investments in ClearView Wealth Ltd and Ardent Leisure Group Ltd (“Ardent”), being
$4.7 million and $11.1 million respectively. The mark-to-market reduction in Ardent’s value was partly attributable to and offset by
the cash dividend. These movements are recorded through other comprehensive income and not included in the reported net profit.
During the period the Group sold its holding in MSL Solutions Ltd (MSL), which was the subject of a takeover offer, at a profit of
$3.1 million.
While the overall result for FY23 was a loss, progress was made in a number of our significant investments which should lead to
improved returns for the future.
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%, contributed negatively to the overall result.
The Group’s share of loss associated with its investment in Orams during the period was $4.0 million (FY22: $3.9 million profit). This
result included a, net of deferred tax, revaluation loss of $2.3 million in relation to the residential site at Orams.
In addition, a net of deferred tax, revaluation loss of $3.6 million was reported through the Statement of Comprehensive Income in
relation to Orams Marine Village property asset.
A $2.7 million gain was also recognised in reported net profit relating to the Contingent Consideration, equivalent to 30% of the
decrease in Orams NZ Unit Trust’s (“ONZUT”, our Orams holding trust) net assets during the period. The Contingent
Consideration relates to an agreement made in July 2020 to acquire a 30% interest in ONZUT with the terms providing 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 now expected to be before December 2028.
During the period, Orams completed the construction of the two new large refit and maintenance buildings, where the 820-tonne
travel lift can move superyachts of around 60 metres in length inside. Together with the 85-tonne work building completed last year,
the new maintenance buildings have significantly expanded Orams Marine’s ability to work on multiple vessels in a controlled
environment and produce world leading results.
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Executive Director’s Review
20 23 A N N U A L R E P O R T
Along with the new buildings, 13,000 square metres of fully serviced hardstand and three new 90 metre marina pontoons, Orams
has the most comprehensive refit and boat maintenance infrastructure facilities in the Southern Hemisphere, cementing Orams’
position as the super yacht hub of the South Pacific and this is being reflected in its operational performance and results. Further
stages of the development will feature commercial buildings and a residential apartment component.
A highlight of the last six months has been the significant level of bookings and enquiries from a wide range of superyachts, domestic
vessels, and commercial craft, substantially exceeding expectations following the lifting of New Zealand's border restrictions in August
2022. The 820-tonne travel lift has hauled out more than double the number of vessels that were originally budgeted, contributing
to an operating performance 30% above budget for the period, despite the impact of construction activities on the site which were
only completed in March this year.
Orams Marine has a solid pipeline of work through to 2025 and is continuing to expand its resources to service its large order book.
With current commercial tenancies at full capacity, strong rental growth prospects and an improving operational contribution from
Orams Marine, Orams is well-placed to increase earnings.
While the significant investment in Orams over the last three years has trebled the capacity of the site to service the marine industry,
there was no change during the period to the book value of the operating business, Orams Marine Services, which is carried at
historical cost plus the cost of plant and equipment acquired over that period.
Ardent Leisure Group Limited (“Ardent”)
As stated in the HY23 Review, the mark-to-market reduction in Ardent’s value was partly attributable to and offset by the cash
dividend paid and return-of-capital ($10.4 million) in July 2022, a result of Ardent distributing proceeds from the sale of its Main Event
business in June 2022, following the successful turnaround in Main Event’s operating performance over the last few years.
During the period there was continuing progress of Ardent’s Theme Parks & Attractions business, with FY23 revenues representing
the highest annual revenue for the business since FY16 and was achieved notwithstanding international visitation remaining well below
historical levels.
Ardent has a strong balance sheet, with no debt and holding cash balances of approximately $141.4 million at balance date.
Ardent has announced a pipeline of new rides and attractions totalling $50–60 million to be delivered over the next two years as it
looks to return to historical levels of profitability.
Ardent has also announced that it is seeking a Preliminary Development Approval across its 55 hectare site at Coomera in South
East Queensland.
Hillgrove Resources Limited (“Hillgrove”)
Hillgrove has been a very disappointing investment for Ariadne over many years.
During the period, however, Hillgrove’s prospects appear to have improved significantly.
In March 2023, Hillgrove raised $38 million to fund development of its underground resource at Kanmantoo and exploration to
continue to expand the resource.
The fund raising was supported by Freepoint Metals & Concentrates LLC, a leading global commodities trader and financer, a long-
term offtake partner of Hillgrove, which resulted in Freepoint holding 19.98% of Hillgrove’s issued capital.
Following the significant capital raising, Ariadne’s interest in Hillgrove was reduced to 11.28%.
In June 2023, Hillgrove announced a formal positive Final Investment Decision (FID) to proceed with the Stage 1 Development of the
Kanmantoo underground mine.
The project is fully funded without debt and has sufficient working capital to reach sustainable copper production planned to occur
in the first quarter of 2024.
Hillgrove’s plant and infrastructure is already in place and the mining operations are fully permitted. In addition, Hillgrove has carried
forward tax losses of $233 million and franking credits of $17.5 million.
Ariadne’s exposure to Hillgrove provides significant leverage to the copper price, which is forecast to increase due to the
electrification of the global economy to meet decarbonisation targets.
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Executive Director’s Review
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ClearView Wealth Limited (“ClearView”)
ClearView has been another disappointing investment for Ariadne, with its shares having traded substantially below Embedded Value
(91.2cps as at 30 June 2023) for a significant period of time.
After a difficult period, ClearView appears to have regained its business momentum, with premiums growing strongly, aided by
improved market and macroeconomic conditions and expanding market share.
There is scope for the difference between Embedded Value per share and the market price to narrow, thereby potentially further
increasing the market value of our holding.
King River Capital (“King River”)
A significant proportion of the Group’s investment portfolio is managed by King River. At balance date, the aggregate carrying value
of Ariadne’s King River-related investments was $35.6 million, representing an overall unrealised gain of $23.4 million over cost.
A rigorous review of each investment, to determine fair value, was undertaken at balance date. This review resulted in our investment
in Lark Technologies Inc being written down 10% from its December 2022 valuation due to its slower than anticipated performance,
but still strong, revenue growth. Our investments in Cover Genuis Holdings Pty Ltd, FinClear Holdings Limited and Immutable Pty
Ltd all maintained their December 2022 valuations as they continue to perform in line with budget.
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.
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 2023.
$M
75.5
13.5
13.2
12.5
11.8
10.2
9.5
7.4
6.2
5.7
4.2
3.5
Assets
Cash
Investments
Orams
Freshxtend
FinClear
Hillgrove
ClearView
Ardent
King River
Cover Genius
Foundation Life
Other Strategic Assets
Lark Technologies
Trading Portfolio
Total Investments
Fixed Assets and Other Receivables
Total Assets
Tax
$M
36.7
Liabilities
Payables and Provisions
Other Payables
Minority Interests
Debt
Total Liabilities
Shareholders’ Funds
$M
3.4
11.9
14.2
19.8
49.3
163.9
173.2
3.3
213.2
Total Liabilities &
Shareholders’ Funds
213.2
Ariadne has substantial carry forward revenue and capital losses available to offset future taxable profits. At 30 June 2023 these are
estimated to be $75.9 million (30 June 2022: $89.6 million) and $72.1 million (30 June 2022: $72.3 million) respectively. As at balance
date, Ariadne had a deferred tax asset of $37.0 million which is not recognised in Ariadne’s accounts.
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Executive Director’s Review
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Dividends and Capital Management
The Board has determined that it is appropriate to continue to retain a conservative financial position in light of the ongoing
uncertainties in markets, as the Group looks to recycle capital as opportunities arise.
A final fully franked dividend of 0.25 cents per share has been declared by the directors, bringing the total dividends for FY23 to 0.25
cents per share (FY22: 0.75 cents per share).
On 28 February 2023, Ariadne announced the extension of its on-market share buy-back facility as part of ongoing capital management
initiatives.
Board Composition and Renewal
As previously reported, on 4 December 2022, Ariadne’s Chairman, David Baffsky AO, passed away following a short illness.
On 28 February 2023 Ariadne announced the appointment of two new independent non-executive directors – David Hancock and
Dean Smorgon – to its Board.
The Board elected David Hancock as Chairman.
Both David and Dean bring considerable skills and experience which will greatly benefit the Group as we look to continue to build
shareholder value for the future.
In addition, Benjamin Seymour (formerly an Alternate Director) became a Director, with Kevin Seymour becoming an Alternate
Director for Benjamin.
Dr Gary Weiss, AM
Executive Director
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Directors’ Report
20 23 A N N U A L R E P O R T
The Directors submit their report for the year ended 30 June 2023.
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 profit after income tax, attributable to the Group for the financial year was $10,273 (2022: $5,710 net loss). The
consolidated net profit after tax attributable to members, on the same basis, for the financial year was $11,070 (2022: $6,595 net loss). In
addition, a negative contribution (net of deferred tax) attributable to members of $16,516 (2022: $29,923 positive contribution) was
reported through the Statement of Profit or Loss and Other Comprehensive Income, resulting in a total comprehensive loss attributable
to members of $5,446 (2022: $23,328 profit). Net tangible assets at the end of the reporting period were 83.65 cents per share (2022:
87.09 cents). Earnings per share were 5.64 cents (2022: -3.36 cents). Total comprehensive earnings per share were -2.78 cents (2022:
11.89 cents).
Investments
The Investment division recorded a profit of $16,568 (2022: $2,672).
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 2023 were $36,731 (2022: $22,880). Ariadne returned $1,630 (2022: $1,472) during the period by
way of dividends and buy-backs. Ariadne continues to maintain a prudent approach to cash management.
The division’s share of joint ventures and associates results for the period was a net profit of $1,561 (2022: $1,418).
The trading portfolio recorded a net profit of $2,654 (2022: $2,049 net loss) and the strategic portfolio revalued through profit or loss
recorded a net gain of $457 (2022: $2,517), including a net gain $457 (2022: $3,489 gain) arising out of the Group’s investments in King
River Capital’s funds, during the reporting period due to mark-to-market revaluations.
During the period the Group sold its holding in MSL Solutions Ltd (MSL), which was the subject of a takeover offer, at a profit of $3,069.
This was a satisfactory outcome and followed Ariadne’s involvement in supporting board and management changes at MSL in September
2019. Since that time, MSL has grown its business significantly, culminating in a takeover of the company at a price of 29.5 cents per share
– a substantial premium over the price of 7.5 cents per share at which Ariadne participated in the recapitalisation of MSL in 2019.
Dividends received during the period were $12,027 (2022: $942), the substantial increase from prior period was due to the large one-off
$11,094 cash dividend received (together with a $10,445 return of capital) from Ardent Leisure Group Limited (“Ardent”) following the
sale of its US business, Main Event Entertainment in June 2022.
The balance of the strategic portfolio revalued through other comprehensive income recorded a net loss of $15,163 (2022: $31,158 gain)
during the period due to mark-to-market revaluations mainly arising from Ariadne’s investment in ClearView Wealth Limited and Ardent,
being $4,747 and $11,094 respectively. The mark-to-market reduction in Ardent’s value was partly attributable to and offset by the cash
dividend.
Ariadne’s investment in Foundation Life NZ Limited continues to perform in line with expectations, contributing NZ$443 (2022: NZ$368)
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.
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Directors’ Report
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Property
The Group’s Property division recorded a loss of $2,533 (2022: $4,688 loss).
The division’s result is derived from the Group’s 76% debt and equity interest in Orams Residential Limited (“Residential”) and Orams
Group Limited (“Orams”) - the owner of Orams Marine Village (“the Marina”) and Orams Marine Services (“Orams Marine”), New
Zealand’s premier marine facility and largest marine maintenance and refit services business respectively as well as the Group’s investment
in an option over land in Redfern, Sydney (“Redfern Project”).
The Group’s loss associated with its investment in Orams during the period was $4,038 (2022: $3,912 profit).
The Group’s share of loss from Orams and Residential during the period was $2,782 (2022: $4,402 profit) and its interest earned on the
associated loan to Orams was $375 (2022: $206). The Group’s share of the movement in value of the residential land holding through
profit and loss was $2,277 markdown (2022: $3,725 markup). Other financing and administration costs associated at the interposed Orams
NZ Unit Trust level were $1,631 (2022: $696). The steep rise in New Zealand dollar interest rates over the past six months has resulted
in financing costs slightly outpacing the success of Orams' operations at the ‘before interest’ level, resulting in a small bottom-line loss being
recorded for each entity at period end. In addition the Group’s share of the movement in value of the Marina through other comprehensive
income recorded a markdown of $3,591 (2022: $323 markup).
A $2,744 gain (2022: $27 loss) relating to the Contingent Consideration, due to and equal to 30% of the decrease in Orams NZ Unit
Trust’s net assets during the period, was also recognised in reported net profit. The terms of the Contingent Consideration, relating to
an agreement made in July 2020 to acquire a 30% interest in ONZUT, 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 now expected to be before December 2028.
During the period, Orams completed the construction of the two new large refit and maintenance buildings, where the 820-tonne travel
lift can move superyachts of around 60 metres in length inside. Together with the 85-tonne work building completed last year, the new
maintenance buildings have significantly expanded Orams Marine’s ability to work on multiple vessels in a controlled environment and
produce world leading results. Along with the new buildings, 13,000 square metres of fully serviced hardstand and three new 90 metre
marina pontoons, Orams has the most comprehensive refit and boat maintenance infrastructure facilities in the Southern Hemisphere,
cementing Orams’ position as the super yacht hub of the South Pacific and this is being reflected in its operational performance and results.
Further stages of the development will feature commercial buildings and a residential apartment component.
A highlight of the last six months has been the significant level of bookings and enquiries from a wide range of superyachts, domestic vessels,
and commercial craft, substantially exceeding expectations following the lifting of New Zealand's border restrictions in August 2022. The
820-tonne travel lift has hauled out more than double the number of vessels that were originally budgeted, contributing to an operating
performance 30% above budget for the period, despite the impact of construction activities on the site which were only completed in
March this year. Orams Marine has a solid pipeline of work through to 2025 and is continuing to expand its resources to service its large
order book. With current commercial tenancies at full capacity, strong rental growth prospects and an improving operational contribution
from Orams Marine, Orams is well-placed to increase earnings.
The Group’s loss associated with its investment in the Redfern Project during the period was $1,576.
During the period the Group entered into agreements to exit its investment in the Kippax Property Trust and restructure its investment
in the Redfern Trust from debt to equity. The Group is exploring potential pathways for a re-zoning of the Redfern Project.
Taxation
Ariadne has significant carried forward revenue and capital losses available to offset future taxable profits. At 30 June 2023, these are
estimated at $75,859 (2022: $89,602) and $72,081 (2022: $72,377) respectively.
In accordance with the Group’s accounting policy for income tax, an assessment was undertaken to estimate the probable recoverability
and sufficiency of the Group’s deferred tax assets. The assessment determined that no deferred tax asset be recognised at 30 June 2023
(2022: $3,563).
Employees
The number of employees, including directors, at balance date is 12 (2022: 11), 75% male and 25% female (2022: 73%:27%).
2. DIVIDENDS AND CAPITAL MANAGEMENT
The Directors have declared a fully franked final dividend of $490 (0.25 cents per share) in relation to the 2023 financial year. As the
final dividend for 2023 was declared after balance date, no liability was recognised at balance date.
On 28 February 2023, Ariadne announced the twelve month extension of its on-market share buy-back facility as part of ongoing
capital management initiatives. The buy-back is for the purpose of acquiring shares where they are trading at prices below the Board’s
view of the intrinsic value of the shares, such acquisitions benefiting all shareholders.
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Directors’ Report
3. DIRECTORS
20 23 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 Hancock, BBA
Independent Non-Executive Chairman
Mr Hancock, was appointed as a Director and elected Chairman of Ariadne on 1 March 2023.
Mr Hancock is the Chairman of FinClear Ltd, Australia’s leading independent provider of technology, wholesale execution and clearing
services as well as Chairman of Geometrica Funds Management Pty Ltd. Mr Hancock has over 30 years of broad experience in
financial services. This experience includes being Group Head and an Executive Director of Afterpay Limited, Chief Executive Officer
of listed Tower Limited, Executive General Manager at the Commonwealth Bank of Australia, with a variety of roles including capital
markets, fixed income and equities. Prior to that, he served in senior investment banking roles at JPMorgan where he was a Managing
Director, and Citi (formerly County Natwest) where he was Managing Director and Co-Head of Investment Banking. Mr Hancock
also serves on a number of mentoring programmes, has established an incubator and works with young start-up founders. He is
actively involved in a number of investments across a variety of technology and industries both locally and globally. Together with his
wife, he has established a Foundation focussed upon giving back to a variety of marginalised groups and causes. Mr Hancock holds a
Bachelor of Business (Economics/Marketing) and is a graduate member of the Australian Institute of Company Directors.
Mr Hancock was appointed as a member of the Ariadne Audit and Risk Management Committee on 26 April 2023.
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 AI,
fintech, blockchain and other 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. He originally joined Goldman Sachs in Frankfurt
in 1993, was named a Managing Director in 2000 and Partner in 2004, as well as serving on the Firmwide Growth Markets Operating
Committee. Mr Barter is currently a Director of OfLoad Ltd, FinClear Ltd, Mindset Ltd, and Cici Environmental Trust. 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 Ariadne Audit and Risk Management Committee on 22 March 2019.
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 6 August 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 as a member of 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 Director
Mr Seymour, was appointed as a Director of Ariadne on 1 March 2023.
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 at Herbert Smith
Freehills specialising in 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. Mr Seymour 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 currently undertaking a Masters of Science in Global Finance at New York University. He is a member of the Australian
Institute of Company Directors, the Urban Development Institute of Australia and the Queensland Law Society.
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Kevin Seymour, AM
Non-Executive Alternate Director to Mr Ben Seymour
Mr Seymour AM, was appointed as an Alternate Director of Ariadne on 1 March 2023.
Mr Seymour is the Executive Chairman of Seymour Group, one of the largest private and longest established 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, having previously served as a Deputy Chairman of Ariadne for many years, was first appointed as a Director of Ariadne in
December 1992 and served as Managing Director/Executive Chairman from 1997-2002. He oversaw many strategic investments and
initiatives of the Group until stepping down from office in March 2023, at which time he was appointed an Alternate Director.
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.
Dean Smorgon, BEc
Independent Non-Executive Director
Mr Smorgon, was appointed as a Director of Ariadne on 1 March 2023.
Mr Smorgon is an Executive Director of Canaccord Genuity Wealth Management Australia, a full-service investment banking and financial
services company specialising in wealth management and brokerage in capital markets. Through his extensive network, Mr Smorgon
provides clients of Canaccord Genuity Wealth Management a variety of investment opportunities in equities, fixed interest, bonds and
property. Mr Smorgon services a diverse client base of private clients, family offices and institutions. With over three decades of investment
experience as an active investor and advisor in the stock market, as well as serving on the investment committee of the David Smorgon
family office, which invests in equities, property, private equity, venture capital and private debt, Mr Smorgon has significant experience in
corporate transactions, financial markets, and trends. Mr Smorgon graduated from Monash University with a Bachelor of Economics before
commencing his stockbroking career with ANZ McCaughan Securities. Following this, he joined HSBC James Capel in 1996 where he
continued to develop his industry knowledge base. He later took up the role of senior advisor at ABN AMRO in 1998 and then continued
on as Associate Director until 2008 at ABN AMRO Morgans. Mr Smorgon currently serves on the Investment Committees of DBR
Corporation & Generation Investments (Family Office) and Jewish Care Victoria.
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 2023 financial year. The total amount
of the dividend is $490 which represents a fully franked dividend of 0.25 cents per share.
There is no other matter of circumstance that has arisen since 30 June 2023 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.
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
6. LIKELY DEVELOPMENTS AND EXPECTED RESULTS
20 23 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.
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A R I A D N E A U S T R A L I A L I M I T E D
Directors’ Report
Executive Remuneration
20 23 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.
12
A R I A D N E A U S T R A L I A L I M I T E D
20 23 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 Hancock
C Barter
J Murphy
B Seymour
K Seymour, AM
D Smorgon
G Weiss, AM
(ii) Executives
N McMahon
D Weiss
Independent Non-Executive Chairman
Independent Non-Executive Director
Independent Non-Executive Director
Non-Executive Director
Non-Executive Alternate Director to Mr Ben Seymour
Independent Non-Executive Director
Executive Director
Chief Financial Officer / Company Secretary
Chief Investment Officer
(b) Remuneration of Directors and Executives
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.
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
Short Term Employee Benefits
Non-
Monetary
Benefits(i)
Salary &
Fees
Cash
Bonus
Table 1: Emoluments of Directors of Ariadne
43,333
—
70,000
70,000
54,667
130,000
D Hancock (Chairman)
2023
2022
D Baffsky, AO (iii)
2023
2022
C Barter
2023
2022
J Murphy
2023
2022
B Seymour
70,000
2023
2022
70,000
K Seymour, AM (Alternate Director to B Seymour)
—
2023
2022
—
D Smorgon
2023
2022
G Weiss, AM (Executive Director)
2023
2022
695,000
674,167
23,333
—
80,000
80,000
Total Remuneration: Directors
2023
2022
1,036,333
1,024,167
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
8,020
15,161
—
—
—
—
—
—
—
—
—
—
15,354
15,161
23,374
30,322
Table 2: Emoluments of the Executive Officers of the Group
N McMahon (Chief Financial Officer / Company Secretary)
2023
2022
D Weiss (Chief Investment Officer)
2023
2022
335,167
307,398
412,041
379,873
—
40,000
—
50,000
—
—
15,354
15,161
20 23 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
4,550
—
5,740
13,000
7,350
7,000
8,400
8,000
7,350
7,000
—
—
2,450
—
30,000
30,000
65,840
65,000
27,500
27,500
25,292
23,568
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
47,883
—
68,427
158,161
77,350
77,000
88,400
88,000
77,350
77,000
—
—
25,783
—
740,354
719,328
1,125,547
1,119,489
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
24,627
6,073
30,700
—
387,294
380,971
483,387
468,602
6.36%
12.09%
6.35%
10.67%
Total Remuneration: Executives
2023
2022
(i)
(ii)
(iii)
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 D Baffsky, AO passed away on 4 December 2022.
747,208
687,271
—
90,000
15,354
15,161
52,792
51,068
55,327
6,073
870,681
849,573
6.35%
11.31%
Table 3: Option holdings of Directors and Executives
Executives
N McMahon
D Weiss
Total
Balance
1 July 2022
Granted as
Remuneration
Options
Exercised
Options
Expired
Balance
30 June 2023
Vested and
Exercisable
800,000
500,000
1,300,000
300,000
600,000
900,000
—
—
—
(250,000)
(250,000)
(500,000)
850,000
850,000
1,700,000
250,000
250,000
500,000
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.
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
20 23 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)
17/08/2018
1/04/2022
30/6/2023
16/08/2023
31/03/2027
01/07/2028
5.3%
1.1%
1.0%
34.9%
31.3%
24.0%
2.2%
1.8%
4.0%
3.5
3.5
3.5
63.0
65.0
51.0
65.5
67.0
58.0
12.1
16.4
15.7
Table 4: Shareholdings of Directors and Executives
Ordinary shares held in
Ariadne
Directors
D Hancock
C Barter
J Murphy
B Seymour
K Seymour, AM
D Smorgon
G Weiss, AM
Executives
N McMahon
D Weiss
Total
Balance
1 July 2022
On Exercise
of Options
Net Change
Other
Balance
30 June 2023
—
200,000
786,147
386,692
13,987,394
—
65,739,743
440,428
2,199
81,542,603
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
200,000
786,147
386,692
13,987,394
—
65,739,743
440,428
2,199
81,542,603
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 10% fixed interest-bearing payable-on-demand facility is provided to the Company by an entity controlled by non-executive alternate
director Mr Kevin Seymour, AM. The facility’s outstanding balance as at balance date is $2,483,758, including $236,330 of interest capitalised
during the period. 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 $1,005,501 (2022:
$1,869,427) during the period which were associated with or otherwise managed by KRC. The Group paid management and performance
fees of $340,482 (2022: $336,679) 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 $18,587 (2022:
$44,000) on commercial terms for consulting work performed. Mr Baffsky, in his role as Chairman of the Board of Directors and for other
purposes, up until his passing on 4 December 2022, utilised 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 D Hancock
Mr C Barter
Dr G Weiss
Mr C Barter
Mr J Murphy
Dr G Weiss
Chairman
Non-Executive Chairman & Founder
Non-Executive Director
Non-Executive Director
Executive Director
Non-Executive Director
Non-Executive Director
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A R I A D N E A U S T R A L I A L I M I T E D
Directors’ Report
20 23 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)
2023
2022
2021
2020
2019
(5,446)
23,328
36,678
(28,329)
(26,664)
(3.3%)
(2.78)
0.75
58.00
83.65
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
196,242,360
196,892,360
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.
195,969,167
196,242,360
196,242,360
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 Hancock
D Baffsky, AO (passed away on 4 December 2022)
C Barter
J Murphy
B Seymour
K Seymour, AM (Alternate Director to Mr Ben Seymour)
D Smorgon
G Weiss, AM
Committee membership
5
2
1
4
5
5
5
2
5
4
1
1
4
4
n/a
n/a
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)
C Barter
D Hancock (appointed on 26 April 2023)
D Baffsky, AO (passed away on 4 December 2022)
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
18 and forms part of the Directors’ Report for the year ended 30 June 2023.
16
A R I A D N E A U S T R A L I A L I M I T E D
20 23 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 Hancock
Chairman
Sydney
30 August 2023
17
A R I A D N E A U S T R A L I A L I M I T E D
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 2023, I declare that, to the best of my knowledge and
belief, there have been:
a no contraventions of the auditor independence requirements of the Corporati ons 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, 30 August 2023
www.grantthornton.com.au
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.
#10102845v2w
18
Statement of Profit or Loss
and Other Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2023
20 23 A N N U A L R E P O R T
GROUP
Notes
2023
$’000
2022
$’000
CONTINUING OPERATIONS
Interest income
Dividend income
Net fair value movement of the trading portfolio
Net fair value gain / (loss) on financial liabilities
Net (loss) / gain on foreign currency denominated accounts
Other income, gains & losses
Share of joint ventures’ and associates’ (losses) / profits
Employee benefits expense
Depreciation
Administration and other expenses
Finance costs
Impairment provisions
PROFIT / (LOSS) BEFORE INCOME TAX
Income tax expense
PROFIT / (LOSS) AFTER TAX FOR THE PERIOD
Attributable to:
Non-controlling interests
MEMBERS OF ARIADNE
4(a)
18(c)
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
Attributable to:
Non-controlling interests
MEMBERS OF ARIADNE
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
2,193
12,027
2,654
2,744
(252)
1,080
(1,221)
(2,509)
(410)
(2,023)
(2,327)
(1,683)
10,273
—
10,273
(797)
11,070
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)
(15,163)
31,158
(3,591)
2,049
(16,705)
(189)
(16,516)
323
(1,544)
29,937
14
29,923
(6,432)
24,227
(986)
(5,446)
899
23,328
5.64
5.60
(2.78)
(2.78)
(3.36)
(3.36)
11.89
11.86
The statement of profit or loss and other comprehensive income 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
Balance Sheet
AS AT 30 JUNE 2023
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.
20
A R I A D N E A U S T R A L I A L I M I T E D
20 23 A N N U A L R E P O R T
GROUP
Notes
2023
$’000
2022
$’000
8
9
10
11
13(b)
18(a)
18(a)
14
18(a)
14
18(c)
15(a)
15(c)
15(d)
36,731
2,045
3,477
1,756
44,009
10,231
73,965
83,764
1,270
—
169,230
213,239
1,124
406
15,228
882
17,640
989
4,594
11,870
21
17,474
35,114
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
178,125
186,246
377,998
217,184
(431,258)
163,924
14,201
178,125
378,156
216,860
(424,100)
170,916
15,330
186,246
Statement of Changes in Equity
20 23 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
378,156
—
—
—
—
—
—
—
—
182,543
5,353
29,923
35,276
500
13
—
—
(1,472)
(411,750)
(11,948)
—
(11,948)
(500)
—
—
98
—
148,949
(6,595)
29,923
23,328
—
13
—
98
(1,472)
378,156
216,860
(424,100)
170,916
Non-
controlling
interest
$’000
15,331
885
14
899
—
—
(62)
(98)
GROUP
$’000
164,280
(5,710)
29,937
24,227
—
13
(62)
—
(740)
15,330
(2,212)
186,246
FOR THE YEAR ENDED 30 JUNE 2022
At 1 July 2021
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
FOR THE YEAR ENDED 30 JUNE 2023
At 1 July 2022
378,156
216,860
(424,100)
170,916
15,330
186,246
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
Dividends
At 30 June 2023
—
—
—
—
—
(158)
18,294
(16,516)
1,778
(66)
84
—
—
(1,472)
(7,224)
11,070
—
(16,516)
(7,224)
(5,446)
66
—
—
—
—
84
(158)
(1,472)
(797)
(189)
(986)
—
—
—
(143)
10,273
(16,705)
(6,432)
—
84
(158)
(1,615)
377,998
217,184
(431,258)
163,924
14,201
178,125
The statement of changes in equity 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
Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2023
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 from / (used in) operating activities
Cash flows from investing activities
Payments for plant and equipment
Proceeds from strategic portfolio disposals / return of capital
Payments for strategic portfolio additions
Payments for other strategic assets
Loans repaid
Loans advanced
Loans divested
Net cash flows from investing activities
Cash flows from financing activities
Repayment of lease liabilities
Repayments of borrowings
Proceeds from borrowings
Payments under share buy-back
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 financing activities
Cash and cash equivalents at beginning of period
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at end of period
20 23 A N N U A L R E P O R T
GROUP
Notes
2023
$’000
2022
$’000
216
(4,435)
12,417
8,410
(2,806)
1,382
(2,054)
(37)
13,093
—
12,003
(3,006)
(1,100)
127
—
—
8,024
(376)
(5,117)
—
(158)
—
(1,472)
(143)
(7,266)
22,880
13,851
36,731
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
18(a)
16
11
11
18
15(a)
7
8
The statement of cash flows should be read in conjunction with the accompanying notes.
22
A R I A D N E A U S T R A L I A L I M I T E D
20 23 A N N U A L R E P O R T
Notes to Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
1. CORPORATE INFORMATION
The consolidated financial statements of Ariadne Australia Limited (“Ariadne”) and its controlled entities (“the Group”) for the year ended
30 June 2023 were authorised for issue in accordance with a resolution of the Directors on 30 August 2023.
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 7 to 17.
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.
(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.
23
A R I A D N E A U S T R A L I A L I M I T E D
20 23 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2023
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(d) Basis of consolidation (continued)
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).
determining the fair value of financial liabilities are disclosed in Note 17(g) and 18(c).
AASB 10 Consolidated Financial Statements requires the parent company of a group to determine whether it meets the definition of an
investment entity. An investment entity does not consolidate its subsidiaries, instead it measures an investment in a subsidiary at fair value
through profit or loss. Management has assessed the criteria to be met that determine whether a parent company is an investment entity.
Management have concluded that whilst some of the elements of an investment entity are present, all three elements are not present and
therefore the investment entity definition is not met. The subsidiaries of Ariadne Australia Limited are therefore consolidated in accordance
with the accounting policy in Note 2(d).
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.
24
A R I A D N E A U S T R A L I A L I M I T E D
20 23 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2023
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.
25
A R I A D N E A U S T R A L I A L I M I T E D
20 23 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2023
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.
26
A R I A D N E A U S T R A L I A L I M I T E D
20 23 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2023
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.
27
A R I A D N E A U S T R A L I A L I M I T E D
20 23 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2023
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:
➢ wages and salaries, non-monetary benefits, annual leave, long service leave, and other leave benefits; and
➢ 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:
➢
➢ 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:
➢ 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.
➢
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:
➢ 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.
➢
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.
28
A R I A D N E A U S T R A L I A L I M I T E D
20 23 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2023
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
➢
➢ 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.
29
A R I A D N E A U S T R A L I A L I M I T E D
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2023
3. SEGMENT INFORMATION (Continued)
20 23 A N N U A L R E P O R T
Reportable segment information
Notes
INVESTMENTS
2023
$’000
2022
$’000
PROPERTY
2022
$’000
2023
$’000
UNALLOCATED (i)
2022
2023
$’000
$’000
GROUP
2023
$’000
2022
$’000
4(a)
4(b)
4(b)
18(c)
13(b)
5(a)
13(b)
Revenue and Result
Interest income
Dividend income
Other income
Net fair value movement of trading portfolio
Net fair value movement of strategic portfolio through profit/loss
Net fair value gain / (loss) on financial liabilities
Net gain / (loss) on foreign currency denominated accounts
Share of joint ventures’ and associates’ profit / (loss)
Total segment revenue and other income (ii)
Net profit / (loss) for the year before income tax
Income tax expense
Net profit / (loss) after income tax for the period
Assets
Equity accounted investments
Other assets
Total assets
Other segment information
Depreciation
Finance costs
Net fair value movement of the strategic portfolio through OCI
Impairment provisions
Segment liabilities
1,783
12,027
—
2,654
457
—
6
1,561
18,488
16,568
491
942
—
(2,049)
2,517
—
(14)
1,418
3,305
2,672
404
—
407
—
—
2,744
(258)
(2,782)
515
220
—
222
—
—
(27)
286
4,342
5,043
6
—
216
—
—
—
—
—
222
(2,533)
(4,688)
(3,762)
—
—
204
—
—
—
—
—
204
(3,694)
2,193
12,027
623
2,654
457
2,744
(252)
(1,221)
19,225
10,273
—
10,273
711
942
426
(2,049)
2,517
(27)
272
5,760
8,552
(5,710)
—
(5,710)
13,515
116,469
129,984
11,833
130,152
141,985
—
424
(15,163)
1,053
4,143
—
158
31,158
36
4,614
70,249
8,953
79,202
—
1,605
—
630
24,422
75,647
5,817
81,464
—
1,217
—
8,400
30,389
—
4,053
4,053
410
298
—
—
—
4,869
4,869
83,764
129,475
213,239
87,480
140,838
228,318
463
42
—
—
410
2,327
(15,163)
1,683
35,114
463
1,417
31,158
8,436
42,072
6,548
7,069
(i)
(ii)
Unallocated segment includes management income, corporate costs and other corporate assets and liabilities.
Total revenues include the Group’s share of joint ventures’ and associates’ profits /losses and other gains / losses recorded through profit and loss.
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)
20 23 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2023
4. REVENUES AND EXPENSES
Revenue and Expenses from Continuing Operations
(a) Dividend income
Received from trading portfolio
Received from strategic portfolio (i)
GROUP
Notes
2023
$’000
2022
$’000
446
11,581
12,027
595
347
942
(i) The Group received a $11,094 cash distribution during the period from Ardent Lesure Group (“Ardent”) by way of dividend following the completion
of the sale of Ardent’s interest in its US business, Main Event Entertainment.
(b) Other income, gain and losses
Net fair value movement of the strategic portfolio through profit or loss (i)
Other income
11
457
623
1,080
2,517
426
2,943
(i)
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) and Note 17(g). 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
2,299
(32)
158
84
2,509
9
401
410
2,350
296
153
13
2,812
115
348
463
18(a)
31
A R I A D N E A U S T R A L I A L I M I T E D
Notes to Financial Statements (Continued)
20 23 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2023
5.
INCOME TAX
(a)
Income tax expense reconciliation
A reconciliation between income tax expense and accounting profit / (loss) before
income tax multiplied by the Group’s applicable income tax rate is as follows:
Notes
2023
$’000
2022
$’000
GROUP
Group accounting profit / (loss) 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 profit / (loss) before income tax
At the Group’s statutory income tax rate of 25% (2022: 25%)
Permanent differences
Other movements
Tax losses (utilised) / carried forward
Income tax expense reported in the Statement of Profit or Loss and OCI
(b) Deferred tax balances
10,273
—
10,273
2,568
677
498
(3,734)
—
(5,710)
—
(5,710)
(1,428)
(1,645)
857
2,224
—
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 2023, these are
estimated at $75,859 (2022: $89,602) and $72,081 (2022: $72,377) 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 (2022: 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:
future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised; and
the conditions for deductibility imposed by tax legislation continue to be complied with; and
(a)
(b)
(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 the accumulated fair value adjustments to financial assets at balance
date were negative (refer to Note 11), no deferred tax asset (2022: $3,563) has been recognised at balance date. The recognised and
unrecognised value of the Group’s deferred tax asset relating to capital tax losses is set out in the table below.
Recognised deferred tax assets / (liabilities) comprises:
Tax losses - revenue
Tax losses - capital
Temporary differences
Financial assets held in the strategic portfolio
Net deferred tax asset recognised
Unrecognised deferred tax assets comprises:
Tax losses - revenue
Tax losses - capital
Net deferred tax asset unrecognised
—
—
—
—
18,965
18,020
36,985
—
3,563
(3,563)
—
22,400
14,531
36,931
32
A R I A D N E A U S T R A L I A L I M I T E D
20 23 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2023
6. EARNINGS PER SHARE
Basic EPS amounts are calculated by dividing net profit or loss for the year attributable to ordinary equity holders of Ariadne by the
weighted average number of ordinary shares outstanding during the year as outlined in Note 2(v).
Diluted EPS amounts are calculated by dividing the net profit or loss attributable to ordinary equity holders of the parent by the weighted
average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued
on the conversion of all the dilutive potential ordinary shares into ordinary shares.
Earnings and share data used in the calculations of basic and diluted earnings per share:
Net profit / (loss) attributable to members ($’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:
FY22 Final fully franked dividend of 0.75 cents per share (2021: 40% franked 0.50 cents)
No FY23 Interim dividend (2022: fully franked 0.25 cents)
Dividends proposed:
Final fully franked dividend of 0.25 cent per share (2022: fully franked 0.75 cents)
ARIADNE
2023
2022
11,070
11,070
(5,446)
(5,446)
(6,595)
(6,595)
23,328
23,328
196,191,315
196,242,360
1,450,000
197,641,315
500,000
196,742,360
5.64
5.60
(2.78)
(2.78)
(3.36)
(3.36)
11.89
11.86
$’000
$’000
1,472
—
1,472
490
490
981
491
1,472
1,472
1,472
The Directors have declared a fully franked final dividend of $490 (0.25 cents per share) in relation to the 2023 financial year. As the
final dividend for 2023 was declared after balance date, no liability was recognised at balance date.
Franking Account
The amount of franking credits available for distribution from the franking account at year end was $475 (2022: $566). The final dividend
for 2023 is fully franked.
8. CASH AND CASH EQUIVALENTS
Cash at call
Cash on term deposit
GROUP
Notes
2023
$’000
2022
$’000
14,131
22,600
36,731
22,880
—
22,880
33
A R I A D N E A U S T R A L I A L I M I T E D
20 23 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2023
9. FINANCIAL ASSETS (CURRENT)
Investments in the trading portfolio were valued at $3,477 (2022: $6,428) 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) and Note 17(g).
10. RECEIVABLES (NON-CURRENT)
Gross related entity loans and advances
Impairment
Net related entity loans and advances (i)
Other loans and advances
Notes
20(ii)
GROUP
2023
$’000
2022
$’000
5,237
—
5,237
4,994
10,231
13,336
(8,400)
4,936
5,407
10,343
(i) The related party loan of $5,237 to Orams Group Limited is 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
Fair value adjustments through other comprehensive income (i)
Return of capital / disposals(ii)
Net carrying amount of listed investments
Reconciliations for unlisted strategic investments
Opening balance
Additions(iii)
Fair value adjustments through profit or loss (i)
Fair value adjustments through other comprehensive income (i)
Disposals
Net carrying amount of unlisted investments
75,238
(1,273)
73,965
61,046
2,000
(15,377)
(10,507)
37,162
36,622
1,006
457
214
(1,496)
36,803
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
(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) and Note 17(g).
(ii) The Group received a $10,507 cash distribution during the period from Ardent Lesure Group (“Ardent”) by way of return of capital following the
completion of the sale of Ardent’s interest in its US business, Main Event Entertainment.
(iii) Material additions during the period include investments associated with King River Capital Management Pty Ltd.
34
A R I A D N E A U S T R A L I A L I M I T E D
Notes to Financial Statements (Continued)
20 23 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2023
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
ATP Tower Pty Ltd (i)
ATP Tower Unit Trust (i)
Delta Equities Pty Ltd
Freshxtend International Pty Ltd
Orams NZ Unit Trust (“ONZUT”)
Portfolio Services Pty Ltd
Redfern Property SPV 1 Pty Ltd (i)
Redfern Trust (i)
Place of
incorporation
Percentage of equity held by
Ariadne
QLD
QLD
NSW
NSW
ACT
QLD
QLD
QLD
NSW
NSW
NSW
QLD
QLD
QLD
NSW
NSW
2023
100
100
100
100
100
100
100
100
48
48
100
53
80
100
100
48
2022
100
100
100
100
100
100
100
100
—
—
100
53
80
100
—
—
(i) During the period the Group entered into agreements to exit its investment in the Kippax Property Trust, restructure its investment in the Redfern
Trust from debt to equity and establish a unitholders agreement for the Redfern Trust (“Redfern Transaction”). As a result, the Group gained control
of four entities (the “Redfern Entities”). Although the Group owns 48% of the equity and voting interest in the Redfern Trust, the Unitholders
Agreement provides for the Group to direct the relevant activities of the Redfern Trust and its controlled entities, the Group is therefore deemed to
control the Redfern Entities.
13. INVESTMENTS IN JOINT VENTURES AND ASSOCIATES
(a) Details of the Group’s investment in joint ventures and associates
Name
Principal activity
Place of
incorporation
Proportion of ownership
interest and voting power held
by the Group
Orams Group Limited (i)
Orams Residential Limited (i)
Kippax Property Unit Trust (ii)
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
NZ
NZ
AUS
AUS
UK
US
2023
76%
76%
—
50%
17%
17%
2022
76%
76%
50%
50%
17%
17%
(i) Although the Group owns 76% of the equity and voting interest in Orams Group Limited and Orams Residential Limited, the Shareholders
Agreement for each company requires that the two majority shareholders must act together to direct the relevant activities of the company,
therefore no individual shareholder has control.
(ii) As part of the ‘Redfern Transaction’ the Group divested its interest in the Kippax Property Unit Trust, see Note 12.
35
A R I A D N E A U S T R A L I A L I M I T E D
20 23 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2023
13. INVESTMENTS IN JOINT VENTURES AND ASSOCIATES (Continued)
(b) Aggregate information of joint ventures and associates
GROUP
2023
$’000
2022
$’000
Notes
Balance at the beginning of the reporting period
Share of joint ventures’ and associates’ (losses) / profits
Share of joint ventures’ and associates’ reserves
Impairment of joint ventures’ and associates’
Distributions received from joint ventures and associates
Carrying amount of investment in joint ventures and associates at reporting period end
The Group’s share of joint ventures’ and associates’ commitments and contingent liabilities is disclosed in Note 18.
(c) Summary financial information of material joint ventures and associates
87,480
(1,221)
(1,616)
(489)
(390)
83,764
84,846
5,760
(1,122)
—
(2,004)
87,480
Financial metrics for Orams Group Limited
Notes
2023
NZ$’000
2022
NZ$’000
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%
33,314
(8,152)
(2,031)
(127)
(612)
(465)
(5,113)
(3,883)
1,107
49,545
227,795
(13,169)
(129,350)
98,445
74,769
20,128
(2,833)
(1,759)
(209)
978
743
472
359
856
47,982
223,960
(11,093)
(119,792)
104,168
79,116
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)
20 23 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2023
14. LOANS AND BORROWINGS
Current
Interest bearing facilities (i)
NZ-dollar interest bearing facilities (ii)
Non-current
NZ-dollar interest bearing facilities (ii)
Total loans and borrowings
GROUP
2023
$’000
2022
$’000
Notes
10,634
4,594
15,228
10,897
2,706
13,603
4,594
10,823
19,822
24,426
(i) The Group repaid $500 (2022: drew down $1,500) of its bank loan facility during the period, increasing the Group’s unused and available loan
facility to $1,375 (2022: $875) as summarised in the table below. The 12-month rolling facility is a variable interest rate facility that averaged 5.5%
during the period. Ariadne has provided a guarantee for this finance facility, refer to Note 18(c).
(ii) ONZUT repaid NZ$5,000 (2022: NZ$1,500) during the period, leaving a facility balance of NZ$10,000 (2022: NZ$15,000) at period end. The
variable interest rate facility averaged 8.7% (2022: 5.4%) during the period and was extended by a further ten months to July 2024. 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 (i)
Other facilities not recorded on the Group’s Balance Sheet (ii)
Facilities used at reporting date
Bank loan facilities
Other facilities (i)
Other facilities not recorded on the Group’s Balance Sheet (ii)
Facilities unused at reporting date
Bank loan facilities
Other facilities (i)
Other facilities not recorded on the Group’s Balance Sheet (ii)
20(iii)
18(c)
18,714
2,484
20,281
17,339
2,484
20,168
1,375
—
113
23,054
2,247
9,544
22,179
2,247
9,431
875
—
113
(i) A 10% fixed interest-bearing payable-on-demand facility is provided to the Company by an entity controlled by non-executive alternate
director Mr Kevin Seymour, AM. The facility’s outstanding balance as at balance date is $2,484, including $236 of interest capitalised during the
period, see also Note 20(iii).
(ii) Other facilities not recorded on the Group’s Balance Sheet include a $525 Bank Guarantee facility and a NZ$21,500 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
2023
2022
Number of
shares
196,242,360
273,193
195,969,167
$’000
378,156
(158)
377,998
Number of
shares
196,242,360
—
196,242,360
$’000
378,156
—
378,156
On 28 February 2023, 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.
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)
20 23 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2023
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
2023
Number of
options
2022
Number of
options
1,650,000
1,150,000
(500,000)
—
2,300,000
1,000,000
650,000
—
—
1,650,000
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 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
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 2023
Nature and purpose of reserves
Share
options
reserve
Financial
asset
revaluation
reserve
Property
asset
revaluation
reserve
Foreign
currency
translation
reserve
$’000
127
$’000
(23,424)
$’000
10,190
$’000
1,370
Profits
reserve
$’000
115,011
—
31,158
(1,031)
500
—
—
—
258
—
—
—
—
—
5,353
(1,493)
—
—
—
—
—
—
—
—
(1,472)
Capital
profits
reserve
$’000
79,269
—
—
1,031
—
—
—
ARIADNE
$’000
182,543
5,353
29,923
—
500
13
(1,472)
7,203
10,448
(123)
118,892
80,300 216,860
—
(15,163)
(820)
—
—
—
—
(2,872)
—
—
—
—
—
1,519
—
—
—
—
18,294
—
—
—
—
(1,472)
—
—
820
—
—
—
18,294
(16,516)
—
(66)
84
(1,472)
158
(8,780)
7,576
1,396 135,714
81,120 217,184
—
—
—
—
13
—
140
—
—
—
(66)
84
—
Share options reserve
The share options reserve records the value of equity benefits outstanding, provided to employees 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.
38
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)
20 23 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2023
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 2023 amount carried to profits reserve (in accordance with director resolutions) of $18,294 (2022: $5,353) includes an amount
of $18,294 (2022: $4,866) relating to subsidiary entities and is not available for distribution as frankable dividends to the equity holders of
Ariadne at 30 June 2023.
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.
$820 (2022: $1,031) was carried to capital profits reserve during the period.
(d) Accumulated losses
Opening balance
Transfer of reserves to accumulated losses
Equity transactions with equity holders
Net loss not carried to profit reserve
Closing balance
Notes
GROUP
2023
$’000
(424,100)
66
—
(7,224)
(431,258)
2022
$’000
(411,750)
(500)
98
(11,948)
(424,100)
16. CASH FLOW STATEMENT RECONCILIATION
Reconciliation of the net profit / (loss) after tax to the net cash flows from operations
Net profit / (loss) after tax
10,273
(5,710)
Adjustments for:
Share options expense
Depreciation of right of use assets
Depreciation of non-current assets
Impairments
Share of joint ventures’ and associates’ losses / (profits)
Distributions received from joint ventures and associates
Fair value (gain) / loss on financial liability
Transfers to provisions:
(Decrease) / increase in employee entitlements
4(c)
18(a)
13(b)
13(b)
18(c)
84
401
9
1,683
1,221
390
(2,744)
13
348
115
8,436
(5,760)
2,004
27
4(c)
(32)
296
Changes in assets and liabilities:
(Increase) / decrease in receivables
(Increase) / decrease in trading portfolio
(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 flows from / (used in) operating activities
4(b)
(1,380)
2,950
(457)
11
269
415
13,093
(940)
2,049
(2,517)
41
(57)
(8)
(1,663)
39
A R I A D N E A U S T R A L I A L I M I T E D
20 23 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2023
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.
Interest rate risk
(b)
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
2023
$’000
2022
$’000
36,731
5,237
41,968
19,822
19,822
22,146
22,880
4,936
27,816
24,425
24,425
3,390
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)
247
(247)
10
(10)
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 2023, 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 $80,604 (2022: $86,839). 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 $8,060 higher or
lower (2022: $8,684).
40
A R I A D N E A U S T R A L I A L I M I T E D
20 23 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2023
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 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 listed securities was $40,639 (2022: $67,474). If the price of listed securities had been 10% higher or
lower at balance date, the Group would be impacted through income or equity by $4,064 higher or lower (2022: $6,747).
(e) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group’s receivables and cash on deposit.
Management has credit policies in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed
on all counterparties and customers requiring material credit amounts. Credit risk is spread across counterparties when possible, and
where appropriate collateral and other guarantees in respect of financial assets are required.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the Balance Sheet.
There are no material 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 2023
Trade and other payables
Lease liabilities
Loans and borrowings
Other payables
Total financial liabilities exposed to liquidity risk
30 June 2022
Trade and other payables
Lease liabilities
Loans and borrowings
Other payables
Total financial liabilities exposed to liquidity risk
1,124
203
2,484
—
3,811
227
200
2,247
—
2,674
—
203
12,744
—
12,947
—
201
11,356
—
11,557
—
989
4,594
11,869
17,452
—
1,470
10,823
14,613
26,906
1,124
1,395
19,822
11,869
34,210
227
1,871
24,426
14,613
41,137
(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 that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions.
The following methods and assumptions are used to determine the net fair value of each class of financial instrument:
41
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)
20 23 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2023
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 fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation techniques.
These valuation techniques maximise, to the extent possible, the observable market data. If all significant inputs required to measure
fair value are observable, the asset or liability is included in Level 2. If one or more significant inputs are not based on observable
market data, the asset or liability is included in Level 3.
The following table shows the levels within the hierarchy of financial assets measured at fair value on a recurring basis.
Financial Assets
30 June 2023
Listed trading investments
Listed strategic investments
Unlisted strategic investments
Total Financial Assets
30 June 2022
Listed trading investments
Listed strategic investments
Unlisted strategic investments
Total Financial Assets
Reconciliation of Level 3 - Financial Assets
Opening balance
Transfers in from Level 2
Closing balance
Notes
Level 1
Level 2
Level 3
Total
9
11
11
9
11
11
3,477
37,162
—
40,639
6,428
61,046
—
67,474
—
—
19,448
19,448
—
—
36,622
36,622
—
—
17,355
17,355
3,477
37,162
36,803
77,442
—
—
—
—
6,428
61,046
36,622
104,096
2023
$’000
—
17,355
17,355
2022
$’000
—
—
—
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 listed securities are remeasured to fair values using Level 1 inputs as determined by reference to the quoted market close
price at balance date. Unlisted securities are remeasured to fair values using Level 2 inputs calculated by reference to the fair value
of the underlying net assets or last transaction price at balance date.
In the absence of an active market for an identical asset or liability, the Group selects and uses one or more valuation techniques to
measure the fair value of the asset or liability. The Group selects a valuation technique that is appropriate in the circumstances and
for which sufficient data is available to measure fair value. The availability of sufficient and relevant data primarily depends on the
characteristics of the asset or liability being measured. The valuation techniques selected by the Group are consistent with one or
more of the following valuation approaches:
1. Market approach: Valuation techniques that use prices and other relevant information generated by market transactions
2.
for identical or similar assets or liabilities, including ongoing discussions with potential purchasers.
Income approach: Valuation techniques that convert estimated future cash flows or income and expenses into a single
discounted present value.
3. Cost approach: Valuation techniques that reflect the current replacement cost of an asset at its current service capacity.
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)
20 23 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2023
17. FINANCIAL INSTRUMENTS (Continued)
(g) Fair values (Continued)
Investments (continued)
Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing the asset or
liability, including assumptions about risks. When selecting a valuation technique, the Group gives priority to those techniques that
maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs that are developed using market data
(such as publicly available information on actual transactions) and reflect the assumptions that buyers and sellers would generally use
when pricing the asset or liability are considered observable, whereas inputs for which market data is not available and therefore are
developed using the best information available about such assumptions are considered unobservable.
Where an arm’s length transaction for an investment has occurred within twelve months to balance sheet date, this transaction is
adopted as fair value for the particular investment which is adjusted to reflect market development between the time of acquisition
and balance sheet date.
For investments which are considered to be early and development stage, when determining the fair value of the investment the
Group applies the revenue multiple method. Under this method, the enterprise value is derived by multiplying the normalised
historical or projected revenue of the business with a multiple or range of multiples. The multiple or range of multiples applied should
be an appropriate and reasonable indication of the value of each investee, given the investee’s size, risk profile, and growth prospects.
The multiple or range of multiples is usually derived from market data observed for entities considered comparable to the companies
being valued. Revenue multiples hold a positive linear relationship to the determination of fair value, such that as the multiple
increases/(decreases) so too does the calculated fair value.
Investee
Fair Value as
at June 2023
Level
Valuation
Technique
Significant
Unobservable Input
Range of
Unobservable Inputs
FinClear Holdings Limited
Lark Technologies Inc.
$13,175
$4,180
3
3
Revenue Multiple
Revenue Multiple
Revenue Multiple
Revenue Multiple
7.2x-14.6x
7.6x-17.8x
There were no changes during the year in the valuation techniques used by the Group to determine Level 3 fair values.
The following table shows the levels within the hierarchy of financial liabilities measured at fair value on a recurring basis.
Financial Liabilities
30 June 2023
Contingent Consideration
Total Financial Liabilities
30 June 2022
Contingent Consideration
Total Financial Liabilities
Notes
Level 1
Level 2
Level 3
Total
18(c)
18(c)
—
—
—
—
11,870
11,870
14,613
14,613
—
—
—
—
11,870
11,870
14,613
14,613
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.
43
A R I A D N E A U S T R A L I A L I M I T E D
20 23 A N N U A L R E P O R T
Notes to Financial Statements (Continued)
FOR THE YEAR ENDED 30 JUNE 2023
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 $1,395 (2022:
$1,871) with $406 (2022: $401) current and $989 (2022: $1,470) non-current.
During the period, right of use assets were depreciated by $401 (2022: $348) and lease rental payments of $413 (2022: $360) were used
to reduce the lease liabilities by $376 (2022: $343) and meet $37 (2022: $17) of lease liability interest. At balance date, the carrying value
of the Group’s right of use assets were $1,270 (2022: $1,871).
(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 $1,979 (2022: $2,816).
(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 estimated
Contingent Consideration for the acquisition was reduced by $2,744 (2022: increased by $27) during the period to be $11,870 (2022:
$14,613) 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 now expected to be before December 2028.
Details of finance facilities for the controlled entities are included in Note 14. Ariadne has guaranteed $29,776 (2022: $19,069) of the
borrowing obligations under these facilities which includes a NZ$21,500 (2022: 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$8,000 (2022: NZ$12,000). 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
ARIADNE
2023
$’000
2022
$’000
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
—
36,032
—
—
377,998
2,955
27,256
158
(372,335)
36,032
(84)
(84)
500
37,662
—
—
378,156
2,955
28,728
140
(372,317)
37,662
487
487
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.
44
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)
20 23 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2023
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 related parties
Loans advanced
Loans repaid
Loans outstanding
Loans impaired
Loans from 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)
(ii)
(i)
(iii)
(iii)
GROUP
2023
$
2022
$
336,121
126,855
5,236,901
—
1,900,000
50,000
13,335,635
8,400,000
236,330
—
2,483,758
247,063
4,500,000
2,247,063
Investments in financial assets
Director related entity
(iv)
1,005,501
1,869,427
Other transactions with related parties
Rent receivable / (impaired)
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
Management fees paid or payable
Director related entity
Consulting fees paid or payable
Director
(v)
(i)
(iii)
(vi)
(vii)
(viii)
Dividends and distributions received
Equity accounted investment
13(b)
All transactions with related parties are conducted on normal commercial terms and conditions.
(97,146)
373,468
236,330
407,481
340,482
18,587
390,061
97,146
206,152
247,063
221,888
336,679
44,000
2,004,783
(i)
At balance date, the Group had a $5,236,901 loan to Orams Group Limited (“OGL”), which includes an amount of $336,121 ($373,468 interest net
of withholding tax) capitalised during the period.
The Group received a loan repayment of $126,855 from Kippax Property Trust (“KPT”) during the period.
A 10% fixed interest-bearing payable-on-demand facility is provided to the Company by an entity controlled by non-executive alternate director Mr
Seymour, AM. The facility’s outstanding balance as at balance date is $2,483,758, including $236,330 of interest capitalised during the period.
(iv) Mr Barter is an Executive Director of King River Capital Management Pty Ltd (“KRC”). The Group made investments of $1,005,501 during the period
(ii)
(iii)
which were associated or otherwise managed by entities related to KRC.
The Group impaired rental income of $97,146 due from KPT during the period.
The Group earned a fee of $407,481 for providing a NZ$21,500,000 Standby Letter of Credit (“SBLC fee”) to OGL during the period.
The Group paid investment management and performance fees of $340,482 during the period to an entities related to KRC.
(v)
(vi)
(vii)
(viii) 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 $18,587. Mr Baffsky, in his role as Chairman of the Board of Directors and for other purposes, utilised an office and car park at
premises leased by the Group.
45
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)
20 23 A N N U A L R E P O R T
FOR THE YEAR ENDED 30 JUNE 2023
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
2023
$
2022
$
1,822,269
118,632
55,327
1,996,228
1,846,921
116,068
6,073
1,969,062
153,571
—
153,571
144,200
—
144,200
After the balance date, the Directors declared a final dividend on ordinary shares in respect of the 2023 financial year. The total amount
of the dividend is $490 which represents a fully franked dividend of 0.25 cents per share.
There is no other matter of circumstance that has arisen since 30 June 2023 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.
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A R I A D N E A U S T R A L I A L I M I T E D
20 23 A N N U A L R E P O R T
Directors’ Declaration
FOR THE YEAR ENDED 30 JUNE 2023
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 2023 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 2023.
On behalf of the Board
Mr David Hancock
Chairman
Sydney
30 August 2023
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
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 balance sheet as at 30 June 2023, 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 2023 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.
48
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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
$70m. In the financial year ended 30 June 2023, The
Group’s share of the decline in value of the Orams Marine
Village and Office Building Development is $3.5m (net of
deferred tax) and the Group’s share of the decline in value
of the Residential Land is $2.2m (net of deferred tax).
This area is a key audit matter given there is significant
judgement associated in 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 $36.8m.
Our procedures included, amongst others:
• Evaluating management’s valuation approach to
Consistent with the requirements of AASB 9 Financial
Instruments, these financial assets are accounted for at fair
value on the consolidated balance sheet and classified as
either fair value through profit or loss ("FVPL") or fair value
through other comprehensive income ("FVOCI").
•
These financial assets are classified as ‘level 2’ and ‘level
3’ 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. The measurement of level
3 financial assets is based on inputs that are not based on
observable market data. The valuations of level 2 and level
3 financial instruments therefore require judgement.
We have focused on this area as a key audit matter due to
the amounts being material to the financial report and the
49
value the unlisted investments;
Involving our valuation specialist to assess and
comparing the valuation inputs adopted by
management to available market information
relating to similar transactions and companies with
similar characteristics;
• 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;
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inherent judgment involved in determining the fair value of
investments.
• Recalculating fair value gains and losses and
comparing this to amounts recorded in the
financial statements; and
• Assessing the adequacy of associated disclosures
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 2023, 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 2023.
In our opinion, the Remuneration Report of Ariadne Australia Limited, for the year ended 30 June 2023
complies with section 300A of the Corporations Act 2001.
50
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Grant Thornton Audit Pty Ltd
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, 30 August 2023
51
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Shareholder Information
20 23 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 2023.
(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
233
506
193
228
96
1,256
Number of
shares
63,749
1,512,324
1,426,501
7,088,912
185,877,681
195,969,167
215
45,987
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
Katdan Investments Pty Limited
Ms Katrina Louise Langley
Croll Nominees Pty Ltd
64,666,395
21,255,078
21,043,100
18,195,465
5,485,100
4,580,000
3,922,294
3,664,000
3,655,666
3,615,615
2,134,923
2,000,000
2,000,000
1,983,230
1,757,173
1,380,000
1,250,000
1,199,483
1,155,511
924,040
165,867,073
33.00%
10.85%
10.74%
9.28%
2.80%
2.34%
2.00%
1.87%
1.87%
1.84%
1.09%
1.02%
1.02%
1.01%
0.90%
0.70%
0.64%
0.61%
0.59%
0.47%
84.64%
(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.
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