CADENCE OPPORTUNITIES FUND
LIMITED
A.B.N. 37 627 359 166
ANNUAL REPORT
FOR THE YEAR ENDED
30 JUNE 2024
CONTENTS
Company Particulars
2
Manager’s Report
3
Top 20 Positions
5
Directors’ Report to Shareholders
6
Auditor’s Independence Declaration
12
Statement of Profit or Loss and Other Comprehensive Income
13
Statement of Financial Position
14
Statement of Changes in Equity
15
Statement of Cash Flows
16
Notes to the Financial Statements
17
Consolidated Entity Disclosure Statement
34
Directors’ Declaration
35
Independent Auditor’s Report
36
ASX Additional Information
40
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
2
COMPANY PARTICULARS
DIRECTORS:
Karl Siegling
Wayne Davies
Susan Oakes
Jolanta Masojada
SECRETARY:
Wayne Davies
MANAGER OF THE COMPANY:
Cadence Asset Management Pty Limited
ABN: 68 106 551 062
REGISTERED OFFICE:
Level 6, 131 Macquarie Street
Sydney, NSW 2000
CONTACT DETAILS:
Level 6, 131 Macquarie Street
Sydney, NSW 2000
Telephone: (02) 8298 2450
Fax: (02) 8298 2499
Email:
info@cadencecapital.com.au
Website:
www.cadencecapital.com.au
For enquiries regarding net asset backing (as
advised each month to the Australian Securities
Exchange) refer to asx.com.au or call
(02) 8298 2450
PRIME BROKER:
BNP Paribas
10 Harewood Avenue
London NW1 6AA
SHARE REGISTRAR:
Boardroom Pty Limited
Mail Address: GPO Box 3993, Sydney NSW 2001
Telephone:
(02) 9290 9600
Fax:
(02) 9279 0664
For all enquiries relating to shareholdings, dividends
(including participation in the Dividend Reinvestment
Plan) and related matters, please contact the share
registrar.
AUDITORS:
HLB Mann Judd Assurance (NSW) Pty Ltd
Level 5/10 Shelley Street
Sydney, NSW 2000
ASX CODE:
Cadence Opportunities Fund Limited
Ordinary Shares (CDO)
COUNTRY OF INCORPORATION:
Australia
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
3
MANAGER’S REPORT
SUMMARY OF RESULTS
•
Profit before tax of $2.9m
•
Profit after tax of $2.3m
•
Fund up 10.8% in FY24
•
7.0c fully franked final dividend
•
Annualised yield of 7.8% fully franked (11.2% gross including franking)
•
Dividend re-investment program (DRP) will be operating for the final dividend
•
On-market buy-back planned to buy back shares issued under DRP when shares are trading at a
discount to NTA
COMPANY PERFORMANCE
Cadence Opportunities Fund Limited (ASX: CDO) ended the financial year returning a gross
performance of +10.8% and earning a profit after tax of $2.3 million. The top contributors to
performance during the financial year were Meta Platforms, Alumina, Austin Engineering, Netflix,
Capstone Copper, Westgold Resources/ Karora and Whitehaven Coal. The largest detractors from
performance were Sierra Rutile, Zillow, Strike Energy and Syrah Resources.
Investing in turnaround situations was a strong driver of returns for the fund over the past financial
year. Both Meta Platforms and Netflix were fundamentally cheap after falling significantly in early
2022. The upward trend that began in late 2022 has continued for both stocks, with Meta Platforms
reaching new highs, and Netflix recovering to the high it reached in late 2021.
The performance of resource companies was mixed over the past financial year. While lithium miners
performed poorly, CDO had little exposure to lithium assets. Copper, aluminium and gold all
performed well which was positive for our investments in Capstone Copper, Alumina, and Westgold
Resources. Whitehaven Coal performed well after acquiring the Daunia and Blackwater coal mines
from BHP at an attractive price.
DIVIDENDS
The Company announced a 7.0 cents per share fully franked year-end dividend, an increase of 0.5
cents on the interim dividend, bringing the full year dividend to 13.5 cents per share fully franked. This
full year dividend equates to a 7.8% fully franked yield or a 11.2% gross yield (grossed up for franking
credits) based on the share price of $1.722 per share on the day of the announcement.
Importantly this equated to a 7.1% dividend yield based on the pre-tax NTA of $1.91 on the day of the
announcement, as the Company shares were trading at a discount to NTA. After paying this dividend
the fund still has 15.5 cents per share of profits reserves to pay future dividends.
The Ex-Date for the dividend is the 15 October 2024. The payment date for the dividend is the 31
October 2024.
The dividend re-investment plan (DRP) will be in operation for this final dividend. We would
encourage shareholders to participate in the DRP as an efficient mechanism to add to existing
holdings in the fund. The DRP will be priced at the weighted average share price over the relevant
DRP pricing period. The Company will buy-back the shares it issues under the DRP. This buy-back
will operate when the CDO share price is trading at a discount to the Pre-Tax NTA.
If you are not registered for the DRP and you would like to participate, please contact Boardroom on
1300 737 760.
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
4
MANAGER’S REPORT (Continued)
The graph below details the movement of Pre-Tax NTA per share from 30 June 2023 to 30 June
2024.
OUTLOOK
We continue to believe that the current uptrend in interest rates is one of the most important trends to
monitor in determining the direction of future asset prices. The US Federal Reserve recently cut
interest rates for the first time in over 4 years, with speculation that there may be further cuts in the
coming months.
We increased cash levels in the fund in July 2024 and were better positioned for the significant market
falls that happened in early August due to concerns about an economic slowdown in the U.S. and
China. We expect volatility to remain high in the coming months and we continue to focus on
implementing the Cadence process that has served us well through market cycles.
As Investment Manager of your Company, we aim to provide shareholders with clear and transparent
communication. We do this through monthly investment updates, quarterly webcasts, investor
presentations, market insights, as well as annual and half yearly profit announcements. We would
encourage you to register on https://www.cadencecapital.com.au/newsletter-cdo/ to receive regular
updates.
Please feel free to contact us at info@cadencecapital.com.au with any feedback to improve our
communication and engagement with you.
I would like to take this opportunity to thank our investors for their continued support.
Karl Siegling
Managing Director
Cadence Asset Management Pty Limited
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
5
TOP 20 POSITIONS AS AT 30 JUNE 2024
LONG AND SHORT POSITIONS
Long Positions
Company Name Exposure % of
$ Equity
WHC
Whitehaven Coal Ltd
$2,187,999
6.72%
QBE
QBE Insurance Group
$1,764,946
5.42%
NFLX US
Netflix Inc
$1,718,117
5.27%
CS CN
Capstone Copper Corp
$1,444,933
4.44%
META US
Meta Platforms Inc
$1,394,022
4.28%
RSG
Resolute Mining Ltd
$1,343,255
4.12%
BHP
BHP Group Ltd
$1,342,926
4.12%
KRR CN
Karora Resources Inc
$1,309,613
4.02%
AWC
Alumina Ltd
$1,221,781
3.75%
ORG
Origin Energy Ltd
$1,155,841
3.55%
RBX CN
Robex Resources Inc
$950,284
2.92%
RPL
Regal Partners Ltd
$899,663
2.76%
COE
Cooper Energy Ltd
$871,564
2.68%
ANG
Austin Engineering Ltd
$859,403
2.64%
BSE
Base Resources Ltd
$799,156
2.45%
SUN
Suncorp Group Limited
$750,771
2.30%
EVN
Evolution Mining Ltd
$697,494
2.14%
BPT
Beach Energy Ltd
$679,254
2.09%
EIQ
ECHOIQ Ltd
$594,000
1.82%
Short Positions
Company Name
Exposure
% of
$
Equity
UUUU US
Energy Fuels Inc
$598,170
1.84%
Total Top 20 Long and Short Positions Exposure $21,386,853 65.65%
TOTAL PORTFOLIO POSITIONS:
Portfolio Net Exposure Long Positions
$33,959,077 104.24%
Portfolio Net Exposure Short Positions
$1,117,728 3.43%
Total Portfolio Net Exposure
$32,841,349 100.81%
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
DIRECTORS’ REPORT TO SHAREHOLDERS
FOR THE YEAR ENDED
30 JUNE 2024
6
The Directors of Cadence Opportunities Fund Limited (“the Company”) submit herewith their report together
with the financial report of Cadence Opportunities Fund Limited for the financial year ended 30 June 2024.
PRINCIPAL ACTIVITY
The principal activity of the Company is investing primarily in securities listed both in Australia and
internationally. The Company may take short positions and may also deal in derivatives for hedging
purposes. No significant changes in the nature of these activities occurred during the financial year.
OPERATING RESULTS
Investment operations over the year resulted in an operating profit before tax of $2,924,183 (2023: operating
loss before tax of $2,305,260) and an operating profit after tax of $2,340,605 (2023: operating loss after tax
of $1,342,875).
REVIEW OF OPERATIONS
Investments are valued continuously to market value. For the year ended 30 June 2024, net investments
were valued at $34,576,446 (2023: $14,368,149). Further information regarding the performance of the entity
during the reporting period is provided in the Manager’s Report, which precedes this report.
FINANCIAL POSITION
The net asset value of the Company for the current financial year ended was $32,577,882 (2023:
$32,180,952).
DIVIDENDS PAID OR RECOMMENDED
On 16 August the Board declared a 7.0 cents per share fully franked final dividend payable on the 31
October 2024. The Ex-Date for the dividend is 15 October 2024.
Dividends paid are as follows:
$
Fully franked 2024 interim dividend of 6.5 cents per share was paid on 30 April 2024
1,014,636
Fully franked 2023 final dividend of 6.5 cents per share was paid on 31 October 2023
1,014,636
Fully franked 2023 interim dividend of 7.5 cents per share was paid on 28 April 2023
1,156,095
Fully franked 2022 final dividend of 7.5 cents per share was paid on 28 October 2022
1,142,547
DIRECTORS
The names of the Directors of Cadence Opportunities Fund Limited who held office during or since the end
of the financial year are:
Karl Siegling
Wayne Davies
Susan Oakes
Jolanta Masojada
The following persons were Directors of the Company during the financial year and up to the date of this
report:
INFORMATION ON DIRECTORS
Karl Siegling (Chairman)
Karl Siegling has over 30 years investment experience in the financial sector both in Australia and overseas.
He holds a Bachelor of Commerce and a Law degree from the University of Melbourne and a MBA from
INSEAD in France. Karl holds a Post Graduate Diploma in Finance with the Securities Institute of Australia
(FINSIA). He commenced work in the Financial Services sector in Australia with Deutsche Morgan Grenfell,
trading overnight currencies, bonds and bond options on the Sydney Futures Exchange. He then worked
within the Equities Research Division of Deutsche Morgan Grenfell before studying an MBA at INSEAD and
working as a Summer Associate within the equities division of Goldman Sachs in London.
Upon returning to Australia, Karl was the Managing Director of eFinancial Capital Limited (a subsidiary of
Challenger international Limited) focused on investing in early stage and expansion capital for financial
services and technology companies. Karl worked as a consultant for Wilson Asset Management, researching
stocks, before setting up Cadence Asset Management Pty Limited.
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
DIRECTORS’ REPORT TO SHAREHOLDERS
FOR THE YEAR ENDED
30 JUNE 2024
7
INFORMATION ON DIRECTORS (Continued)
Karl Siegling (Chairman) (Continued)
Karl has been the Chairman and Managing Director of Cadence Asset Management Pty Limited (the
Manager), for 20 and a half years. Karl is also a Director of Cadence Capital Limited. Karl has been the
Chairman and Managing Director of Cadence Capital Limited for 18 and a half years. Karl has been a
Director of the Company for the past 6 years. Karl was previously a Director of Webcentral Group Limited
(WCG).
Wayne Davies (Non-Executive Director and Company Secretary)
Wayne Davies has over 20 years funds management experience in Equity Long/Short Funds both in
Australia and overseas. He is both a member of the South African Institute of Chartered Accountants and the
Chartered Institute of Management Accountants. Wayne Davies is a long standing member of the Cadence
Asset Management team and has been the Chief Operating Officer of Cadence Asset Management for the
past 17 years. Wayne Davies previously worked with Theorema Asset Management in London and was a
Director of Theorema Europe Fund and Theorema Europe Fund Plus. Wayne has been a Director of
Cadence Capital Limited for the past 10 and a half years. Wayne has been a Director of the Company for the
past 6 years. Wayne is a member of the Audit & Risk Committee and a member of the Nomination and
Remuneration Committee. Wayne has not resigned as a director from a listed company in the past three
years.
Susan Oakes (Non-executive Director)
Susan Oakes has over 30 years financial services industry experience. Susan has worked in trading room
roles in Sydney, London and New York. Susan is a former Director and Head of Trading and Sales at Merrill
Lynch and has also worked as a risk consultant at the Commonwealth Bank of Australia.
Susan possesses extensive experience and knowledge in trading and portfolio management. Susan Oakes
holds a Bachelor of Health Science, an MBA from the Australian Graduate School of Management, UNSW,
specialising in business risk and is also a graduate member of the Australian Institute of Company Directors
(GAICD). Susan has been a Director of the Company for the past 6 years. Susan is the Chairman of the
Audit & Risk Committee and a Member of the Nomination and Remuneration Committee. Susan has not
resigned as a director from a listed company in the past three years.
Jolanta Masojada (Non-executive Director)
Jolanta Masojada is Principal of MasMarket Advisers, providing strategic investor relations and
communications advice to listed companies. She has more than 25 years’ experience in financial markets
and equity research in the media and technology sectors in Australia and the US. Jolanta was formerly
Director of Equity Research at Credit Suisse and Deutsche Bank, with previous roles at Macquarie Bank and
Pierson Sal. Oppenheim in New York.
Jolanta is a graduate of the University of KwaZulu-Natal and Cambridge University. She is a Non-Executive
Director of Bailador Technology Investments (ASX: BTI), a fellow of the Financial Services Institute of
Australasia, a graduate of the Australian Institute of Company Directors and a Certified Investor Relations
Officer (CIRO) of the Australasian Investor Relations Association (AIRA). Jolanta has been a Director of the
Company for the past 2 and a half years. Jolanta is the chairman of the Nomination and Remuneration
Committee and a member of the Audit & Risk Committee. Jolanta has not resigned as a director from a listed
company in the past three years.
COMPANY SECRETARY
Wayne Davies held the position of Company Secretary at the end of the financial year.
DIRECTORS’ MEETINGS
No. eligible to attend
Attended
Karl Siegling (Chairperson)
4
4
Wayne Davies
4
4
Susan Oakes
4
4
Jolanta Masojada
4
4
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
DIRECTORS’ REPORT TO SHAREHOLDERS
FOR THE YEAR ENDED
30 JUNE 2024
8
AUDIT COMMITTEE MEETINGS
No. eligible to attend
Attended
Susan Oakes (Chairperson)
2
2
Jolanta Masojada
2
2
Wayne Davies
2
2
REMUNERATION REPORT (AUDITED)
This report details the nature and amount of remuneration for each Director of Cadence Opportunities Fund
Limited.
(a) Remuneration
There are no executives that are paid by the Company. Cadence Asset Management Pty Limited provides
day to day management of the Company and is remunerated as outlined below.
Cash Salary
Superannuation
Total
2024
$
$
$
Short-term Employee Benefits -
Directors Fees:
Susan Oakes
27,027
2,973
30,000
Jolanta Masojada
27,027
2,973
30,000
Wayne Davies
13,514
1,486
15,000
67,568
7,432
75,000
Cash Salary
Superannuation
Total
2023
$
$
$
Short-term Employee Benefits -
Directors Fees:
Susan Oakes
27,149
2,851
30,000
Jolanta Masojada
27,149
2,851
30,000
Wayne Davies
13,575
1,425
15,000
67,873
7,127
75,000
The following table reflects the Company's performance and Director's remuneration since the Company’s
inception:
2024
2023
2022
2021
2020
Operating profit/(loss)after tax($)
2,340,605
(1,342,875)
(1,520,202)
5,594,046
1,540,980
Dividends (cents per share)
13.5
14.0
15.0
15.0
6.0
NTA after tax ($ per share)
2.08
2.06
2.30
2.44
1.64
Total directors remuneration($)
75,000
75,000
61,875
22,500
22,500
Shareholders equity($)
32,577,882
32,180,952
35,008,765
21,965,936
8,429,424
(b) Director Related Entities Remuneration
All transactions with related entities were made on normal commercial terms and conditions.
Karl Siegling is the sole Director and a beneficial owner of Cadence Asset Management Pty Limited, the
entity appointed to manage the investment portfolio of Cadence Opportunities Fund Limited. In its capacity
as Manager, Cadence Asset Management Pty Limited was paid a management fee of $439,180 (inclusive of
GST) (2023: $467,941). This is equivalent to 0.125% of the value of the portfolio calculated on the last
business day of each month. Over a full year, the monthly management fee will be comparable to a fee of
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
DIRECTORS’ REPORT TO SHAREHOLDERS
FOR THE YEAR ENDED
30 JUNE 2024
9
REMUNERATION REPORT (Continued)
(b) Director Related Entities Remuneration (Continued)
1.25% of the gross value of the portfolio per annum. As at 30 June 2024, the management fee payable to the
Manager was $39,619 (inclusive of GST) (2023: $35,268).
The duties of the Manager are to manage the portfolio and to manage and supervise all investments,
maintain the corporate and statutory records of the Company, liaise with the ASX with respect to compliance
with the ASX listing rules, liaise with ASIC with respect to compliance with the Corporations Act and liaise
with the share registrar of the Company.
In addition, Cadence Asset Management Pty Limited is to be paid, annually in arrears, a performance fee,
being 15% (plus GST) of the amount of the increase in the value of the portfolio.
No performance fee is payable in respect of any performance period, where the portfolio has decreased in
value over that period. For the year ended 30 June 2024, $32,352 (inclusive of GST) (2023: nil). was
payable to Cadence Asset Management Pty Limited. As at 30 June 2024, the balance payable to the
Manager was $32,352 (2023: nil).
Cadence Asset Management Pty Limited employs accounting personnel to provide accounting services to
the Company. These services are provided on commercial terms and include a standard charge of $4,180
(inclusive of GST) per month and an increased charge of $6,600 (inclusive of GST) is charged for preparing
the half year and full year financial statements. As at 30 June 2024, the balance payable to the Manager for
these services was $6,600 (inclusive of GST) (2023: $6,600).
(c) Compensation Practices
The Board from time to time determines remuneration of Non-Executive Directors within the maximum
amount approved by the shareholders. Non-Executive Directors are not entitled to any other remuneration.
Fees and payments to Non-Executive Directors reflect the demands that are made on and the
responsibilities of, the Directors and are reviewed annually by the Board. The Company determines the
remuneration levels and ensures they are competitively set to attract and retain appropriately qualified and
experienced Directors.
Directors’ base fees are presently limited to a maximum of $100,000 per annum between the directors. Non-
Executive Directors do not receive bonuses nor are they issued options on securities. Directors’ fees cover
all main board activities and membership of committees. Directors’ fees are not linked to the performance of
the Company.
(d) Shareholdings
The Company’s key management personnel (KMP) directly and indirectly held the following shares in the
Company:
Balance at
Acquisitions
Disposals
Balance at
Shareholdings
1 July 2023
30 June 2024
Karl Siegling
3,350,330
400,675
-
3,751,005
Wayne Davies
131,962
9,910
-
141,872
Jolanta Masojada
11,587
870
-
12,457
Susan Oakes
34,486
2,590
-
37,076
3,528,365
414,045
-
3,942,410
Directors and Director related entities disposed of and acquired ordinary shares in the Company on the
same terms and conditions available to other shareholders. As at the date of this report Karl Siegling holds
3,856,530 shares in the Company. There have been no other changes in KMP interests between balance
date and the date of this report.
End of Remuneration Report.
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
DIRECTORS’ REPORT TO SHAREHOLDERS
FOR THE YEAR ENDED
30 JUNE 2024
10
EVENTS AFTER THE REPORTING PERIOD
On 16 August 2024, the Board have declared a 7.0 cents per share fully franked final dividend payable on
the 31 October 2024. The Ex-Date for the dividend is 15 October 2024.
Other than the above there has not arisen in the interval between the end of the financial year and the date
of this report any other item, transaction or event of material and unusual nature likely, in the opinion of the
Company, to significantly affect the operations of the entity, the results of those operations, or the state of
affairs of the entity, in future financial years.
FUTURE DEVELOPMENTS
The Company will continue to pursue its policy of investment during the next financial year.
ENVIRONMENTAL ISSUES
The Company’s operations are not regulated by any environmental regulation under a law of the
Commonwealth or of a State or Territory.
INDEMNIFICATION AND INSURANCE OF OFFICERS OR AUDITORS
During the year the Company paid a premium in respect of a contract insuring the Directors of the Company,
the Company Secretary and any related body corporate against liability incurred as such by a Director or
Secretary to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
No indemnities have been given or insurance premiums paid during or since the end of the financial year, for
any person who is or has been an auditor of the Company.
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the
Company for all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
NON-AUDIT SERVICES
During the year HLB Mann Judd Assurance (NSW) Pty Ltd, the Company’s auditor, did not perform other
services in addition to their statutory duties for the Company. Details of the amounts paid to the auditors and
their related parties are disclosed in Note 2 to the financial statements.
CORPORATE GOVERANCE STATEMENT
The Company’s Corporate Governance Statement for the year ended 30 June 2024 is provided on the
Company’s
website
at
https://www.cadencecapital.com.au/wp-content/uploads/2024/09/CDO-Corp-
Governance-Statement-September-2024.pdf.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the Auditor’s Independence Declaration as required under Section 307C of the Corporations Act
2001 is set out on page 12 of this Annual Report.
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
DIRECTORS’ REPORT TO SHAREHOLDERS
FOR THE YEAR ENDED
30 JUNE 2024
11
Signed in accordance with a resolution of the Board of Directors of the Company:
Karl Siegling
Director
Dated in Sydney, this 24th day of September 2024
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
12
Auditor’s Independence Declaration
To the directors of Cadence Opportunities Fund Limited:
As lead auditor for the audit of the financial report of Cadence Opportunities Fund Limited for the year
ended 30 June 2024, I declare that, to the best of my knowledge and belief, there have been no
contraventions of:
(a) the auditor independence requirements as set out in the Corporations Act 2001 in relation to the
audit; and
(b) any applicable code of professional conduct in relation to the audit.
Sydney, NSW
K L Luong
24 September 2024
Director
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
13
Note
2024
2023
$
$
INCOME
Net realised and unrealised gain /(loss) on investments
2,580,010
(2,415,947)
Dividends received
1,251,212
1,318,141
Interest received
508,617
433,222
Other income
1,125
14,326
Net revenue and income/ (loss)
4,340,964
(650,258)
EXPENSES
Finance costs
(351,028)
(269,720)
Brokerage expenses on share purchases
(89,972)
(273,912)
Directors fees
(75,000)
(75,000)
Dividends on short positions
(242,107)
(235,956)
Stock loan fees
(6,446)
(107,671)
Custody fees
(7,358)
(29,871)
Audit and taxation fees
2
(71,283)
(95,900)
Management fees
(409,236)
(436,036)
Performance fees
(30,147)
-
ASX Fees
(46,885)
(48,632)
Registry fees
(21,311)
(17,103)
Other expenses from ordinary activities
(66,008)
(65,201)
Total expenses
(1,416,781)
(1,655,002)
Profit/ (loss) before income tax
2,924,183
(2,305,260)
Income tax (expense)/ benefit
3(a)
(583,578)
962,385
Profit/ (loss) attributable to members of the Company
2,340,605
(1,342,875)
Other comprehensive income
Other comprehensive income for the year, net of tax
-
-
Total comprehensive income/ (loss) for the year
attributable to members of the Company
2,340,605
(1,342,875)
Basic earnings/ (loss) per share
12
15.0 cents
(8.7) cents
Diluted earnings/ (loss) per share
12
15.0 cents
(8.7) cents
The accompanying notes form part of these financial statements.
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
14
Note
2024
2023
$
$
ASSETS
Cash and cash equivalents
11(a)
3,469,417
21,196,633
Trade and other receivables
5
78,892
519,980
Financial assets at fair value through profit or loss
6
35,623,574
18,085,246
Current tax asset
3(c)
-
207,104
Deferred tax asset
3(b)
1,349,737
1,296,957
TOTAL ASSETS
40,521,620
41,305,920
LIABILITIES
Cash overdrafts
11(a)
6,704,765
3,956,359
Trade and other payables
7
161,588
1,451,512
Financial liabilities at fair value through profit or loss
8
1,047,128
3,717,097
Current tax liability
3(c)
30,257
-
TOTAL LIABILITIES
7,943,738
9,124,968
NET ASSETS
32,577,882
32,180,952
EQUITY
Issued capital
9(a)
32,819,799
32,734,202
Profits reserve
10
3,522,195
5,551,467
Accumulated losses
(3,764,112)
(6,104,717)
TOTAL EQUITY
32,577,882
32,180,952
The accompanying notes form part of these financial statements.
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
15
Note
Issued capital
$
Accumulated
losses
$
Profits
reserve
$
Total equity
$
Balance at 1 July 2022
31,920,498
(4,761,842)
7,850,109
35,008,765
Loss for the year
-
(1,342,875)
-
(1,342,875)
Other comprehensive income
for the year
-
-
-
-
Transactions with owners:
Shares issued via DRP
9(a)
813,704
-
-
813,704
Dividends paid
4(a)
-
-
(2,298,642)
(2,298,642)
Balance at 30 June 2023
32,734,202
(6,104,717)
5,551,467
32,180,952
Profit for the year
-
2,340,605
-
2,340,605
Other comprehensive income
for the year
-
-
-
-
Transactions with owners:
Shares issued via DRP
9(a)
559,053
-
-
559,053
On-market share buy-back
9(a)
(473,456)
-
-
(473,456)
Dividends paid
4(a)
-
-
(2,029,272)
(2,029,272)
Balance at 30 June 2024
32,819,799
(3,764,112)
3,522,195
32,577,882
The accompanying notes form part of these financial statements.
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
16
Note
2024
2023
$
$
CASH FLOWS FROM OPERATING ACTIVITIES
Proceeds from the sale of investments
51,113,194
153,277,915
Payments for the purchase of investments
(69,678,391)
(156,027,512)
Dividends received
1,251,212
1,322,452
Interest received
552,845
388,994
Other income received
1,125
14,326
Management fees paid
(404,885)
(440,509)
Brokerage expenses on share purchases
(89,972)
(273,912)
Dividends on shorts
(254,142)
(230,028)
Finance costs
(351,028)
(269,720)
Income tax paid
(399,000)
(153,231)
Administration expenses paid
(272,905)
(404,893)
NET CASH USED BY OPERATING
ACTIVITIES
11(b)
(18,531,947)
(2,796,118)
CASH FLOWS FROM FINANCING ACTIVITIES
On-market share buy-back (473,456)
-
Dividends paid (1,470,219)
(1,484,938)
NET CASH USED IN FINANCING
ACTIVITIES
(1,943,675)
(1,484,938)
NET DECREASE IN CASH AND CASH
EQUIVALENTS HELD
(20,475,622)
(4,281,056)
CASH AND CASH EQUIVALENTS AS AT
BEGINNING OF THE FINANCIAL YEAR
17,240,274
21,521,330
CASH AND CASH EQUIVALENTS AS AT
END OF THE FINANCIAL YEAR
11(a)
(3,235,348)
17,240,274
NON-CASH TRANSACTIONS:
Shares issued via dividend reinvestment plan
9(a)
559,053
813,704
The accompanying notes form part of these financial statements.
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
17
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Cadence Opportunities Fund Limited (“the Company”) is a listed public company, incorporated and domiciled
in Australia.
Basis of Preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations, issued by the Australian Accounting Standards Board (‘AASB’) and the
Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply
with International Financial Reporting Standards as issued by the International Accounting Standards Board
(‘IASB’).
Australian Accounting Standards set out accounting policies that the Australian Accounting Standards Board
has concluded would result in financial statements containing relevant and reliable information about
transactions, events and conditions to which they apply. Significant accounting policies adopted in the
preparation of these financial statements are presented below. They have been consistently applied unless
otherwise stated.
The financial statements have been prepared under the historical cost convention, except for, where
applicable, cash flow information, “held-for-trading” financial assets and certain other financial assets and
liabilities, which have been measured at fair value.
The statement of financial position is presented on a liquidity basis. Assets and liabilities are presented in
decreasing order of liquidity and do not distinguish between current and non-current. The Company
manages financial assets and financial liabilities at fair value through profit or loss based on the economic
circumstances at any given point in time, as well as to meet any liquidity requirements. As such, it is
expected that a portion of the portfolio will be realised within 12 months, however, an estimate of that amount
cannot be determined as at reporting date.
The preparation of the financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the Company’s accounting
policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the financial statements are disclosed in Note 1(i).
The financial statements are presented in Australian dollars, which is the Company's functional and
presentation currency.
The financial report was authorised for issue on 24th September 2024 by the Board of Directors.
Accounting Policies
(a) Investments
i) Classification
Investments consist of shares in publicly listed and unlisted companies and fixed interest securities.
Financial assets are classified ‘at fair value through profit or loss’ when they are held for trading for the
purpose of short-term profit taking. Realised and unrealised gains and losses arising from changes in fair
value are included in the Statement of Profit or Loss and Other Comprehensive Income in the period in which
they arise.
The Company makes short sales in which a borrowed security is sold in anticipation of a decline in the
market value of that security, or it may use short sales for various arbitrage transactions. Short sales are
classified as financial liabilities at fair value through the profit or loss.
ii) Recognition and Initial Measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity
becomes a party to the contractual provisions of the instrument. Trade date accounting is adopted for
financial assets that are delivered within timeframes established by marketplace convention. Trade date is
the date on which the Company commits to purchase or sell the assets.
Financial instruments are initially measured at fair value plus transactions costs where the instrument is not
classified as at fair value through profit or loss. Transaction costs related to instruments classified as at fair
value through profit or loss are expensed to the profit or loss immediately.
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
18
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(a) Investments (Continued)
ii) Recognition and Initial Measurement (Continued)
Financial assets are classified and measured at fair value with changes in value being recognised in the
profit or loss.
iii) Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is
transferred to another party whereby the entity no longer has any significant continuing involvement in the
risks and benefits associated with the asset. Financial liabilities are derecognised where the related
obligations are either discharged, cancelled or expired. The difference between the carrying value of the
financial liability extinguished or transferred to another party and the fair value of consideration paid,
including the transfer of non-cash assets or liabilities assumed, is recognised in the profit or loss.
iv) Valuation
All investments are classified and measured at fair value, being market value, including the potential tax
charges that may arise from the future sale of the investments. These fair value adjustments are recognised
in the profit or loss. Valuation techniques are applied to determine the fair value for all unlisted securities,
including recent arm’s length transactions and reference to similar instruments.
v) Investment Income
Dividend income is recognised in the profit or loss on the day on which the relevant investment is first quoted
on an “ex-dividend” basis.
Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset.
vi) Derivative Instruments
Derivative instruments are measured at fair value. Gains and losses arising from changes in fair value are
taken to the profit or loss.
vii) Financial Liabilities
Borrowed stock is classified as financial liabilities at fair value through the profit or loss. Realised and
unrealised gains and losses arising from changes in fair value are included in the profit or loss in the year in
which they arise.
(b) Income Tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on
the applicable income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods,
where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply
when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or
substantively enacted, except for:
•
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an
asset or liability in a transaction that is not a business combination and that, at the time of the
transaction, affects neither the accounting nor taxable profits; or
•
When the taxable temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, and the timing of the reversal can be controlled and it is probable that the
temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed each reporting date.
Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable
profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
19
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(b) Income Tax (Continued)
are recognised to the extent that it is probable that there are future taxable profits available to recover the
asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current
tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate
to the same taxable entity or different taxable entity's which intend to settle simultaneously.
(c) Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other
short-term, highly liquid investments with original maturities of three months or less that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. For
the statement of cash flows presentation purposes, cash and cash equivalents also includes bank overdrafts,
which are shown within the current liabilities on the statement of financial position.
(d) Trade and Other Receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised
cost using the effective interest method, less provision for expected credit loss. Trade and other receivables
are generally due for settlement within 30 days. They are presented as current assets unless collection is
expected for more than 12 months after the reporting date.
(e) Trade and Other Payables
These amounts represent liabilities for outstanding settlements as well as services provided to the Company
prior to the end of the financial year and which are unpaid. Due to their short-term nature they are measured
at nominal amounts and are not discounted. The amounts are unsecured and are usually paid within 30 days
of recognition. The carrying amount of trade and other payables represent their fair value.
(f) Impairment
At each reporting date, the Company shall measure the loss allowance on financial assets at amortised cost
(cash due from broker and receivables) at an amount equal to the lifetime expected credit losses if the credit
risk has increased significantly since initial recognition. If, at the reporting date, the credit risk has not
increased significantly since initial recognition, the Company shall measure the loss allowance at an amount
equal to 12-month expected credit losses. Significant financial difficulties of the counter party, probability that
the counter party will enter bankruptcy or financial reorganisation, and default in payments are all considered
indicators that a loss allowance may be required. If the credit risk increases to the point that it is considered
to be credit impaired, interest income will be calculated based on the gross carrying amount adjusted for the
loss allowance. A significant increase in credit risk is defined by management as any contractual payment
which is more than 30 days past due. Any contractual payment which is more than 90 days past due is
considered credit impaired.
(g) Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), unless
GST incurred is not recoverable from the Australian Taxation Office (ATO). In this case it is recognised as
part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount
of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in
the Statement of Financial Position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to the tax authority, are presented as operating
cash flows.
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
20
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(h) Comparative Figures
Where required by accounting standards, comparative figures have been adjusted to conform with changes
in presentation for the current financial year.
(i) Critical Accounting Estimates and Judgements
The Directors evaluate estimates and judgements incorporated into the financial report based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future
events and are based on current trends and economic data, obtained both externally and within the
Company.
Income tax
The entity is subject to income taxes in the jurisdictions in which it operates. Significant judgement is
required in determining the provision for income tax. There are many transactions and calculations
undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The
Company recognises liabilities for anticipated tax audit issues based on the Company’s current
understanding of the tax law. Where the final tax outcome of these matters is different from the carrying
amounts, such differences will impact the current and deferred tax provisions in the period in which such
determination is made.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the Company considers it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
Future taxable amounts are determined based on the historical performance of the Company. Deferred tax
assets are reviewed at each reporting period.
Other than discussed above, there are no estimates or judgements that have a material impact on the
Company’s financial results for the period ended 30 June 2024 (2023: none). All material financial assets are
valued by reference to quoted prices and therefore no significant estimates or judgements are required in
respect of their valuation.
(j) Issued Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
(k) Profits Reserve
The profits reserve is made up of amounts transferred from earnings that are preserved for future dividend
payments.
(l) Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the
Company.
(m) Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in profit or loss.
(n) New and amended standards adopted by the Company
There are no standards, interpretations or amendments to existing standards that are effective for the first
time for the financial year beginning on 1 July 2023 that has had a material impact on the accounts
recognised in the prior periods or will affect the current or future periods.
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
21
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(o) New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations have been issued but are not yet
effective at 30 June 2024. These have not been early adopted in preparing these financial statements and
are not expected to have a material impact when adopted.
2. AUDITOR’S REMUNERATION
2024
2023
Remuneration of the auditor of the Company for:
$
$
Audit and review the financial report:
-
HLB Mann Judd Assurance (NSW) Pty Ltd
45,000
-
-
Pitcher Partners Sydney
5,898
76,140
Non-audit Services
Other services provided by a related practice of the auditor:
Taxation services
20,385
19,760
71,283
95,900
3. TAXATION
(a) Current Income Tax Expense/ (Benefit)
The prima facie tax on profit/ (loss) from ordinary activities before income tax is reconciled to the income tax
expense/ (benefit) as follows:
Prima facie tax expense/ (benefit) on profit/ (loss) from
ordinary activities before income tax at 30%
877,255
(691,578)
Imputation credit gross up
116,383
120,575
Franked dividends received – current year
(387,942)
(401,917)
Foreign tax gross up
3,255
5,890
Foreign tax credits on dividends received – current year
(10,849)
-
Other
(14,524)
4,645
583,578
(962,385)
Effective tax rate
20.0%
(41.7%)
The effective tax rate for FY2024 is 20.0% reflecting the benefit to the Company of franking credits received on
dividend income during the year.
Total income tax expense/ (benefit) results in a:
Current tax asset expense
636,361
-
Movement in deferred tax assets/liabilities
(52,783)
(962,385)
583,578
(962,385)
(b) Deferred Tax Asset
Provisions
12,032
13,859
Capitalised share issue costs
34,008
51,897
Fair value adjustment
(277,576)
(335,552)
Tax losses
1,581,273
1,566,753
1,349,737
1,296,957
Movement in deferred tax asset
Balance at the beginning of the year
1,296,957
332,239
Credited to the profit or loss
52,783
962,385
Movement relating to (over)/ under adjustment
(3)
2,333
1,349,737
1,296,957
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
22
3. TAXATION (Continued)
2024
2023
$
$
(c) Current Tax (Liability)/ Asset
Movement in current tax (liability)/ asset
Balance at the beginning of the year
207,104
56,203
Current year income tax on operating profit
(636,361)
-
Income tax paid
608,434
209,434
Income tax received
(209,434)
(56,203)
Prior year under/(over)
-
(2,330)
(30,257)
207,104
4. DIVIDENDS
(a) Dividends paid
Dividends paid by the Company
2,029,272
2,298,642
2024
Dividends paid by the
Company for the year
ended 30 June 2024
Cents
Per
Share
Date of
payment
Tax Rate for
franking
Credit
%
franked
Total
Amount
$
Interim 2024 Ordinary
6.5
30 April 24
30%
100%
1,014,636
Final 2023 Ordinary
6.5
31 October 23
30%
100%
1,014,636
Total Amount
2,029,272
2023
Dividends paid by the
Company for the year
ended 30 June 2023
Cents
Per
Share
Date of
payment
Tax Rate
for franking
Credit
%
franked
Total
Amount
$
Interim 2023 Ordinary
7.5
28 April 23
30%
100%
1,156,095
Final 2022 Ordinary
7.5
28 October 22
30%
100%
1,142,547
Total Amount
2,298,642
(b) Dividend franking account
2024
2023
$
$
The balance of the franking account at year end is adjusted for
franking credits and debits arising from receipts or payments of
income tax and franking credits arising from dividends
receivable.
1,118,041
1,200,786
Subsequent to the reporting period, the franking account would be reduced by the proposed dividend disclosed
in (c) and be increased by any taxation payments made. The Company’s ability to continue to pay franked
dividends is dependent upon the receipt of franked dividends from investments and the Company paying tax.
(c) Dividends not recognised during the period
On 16 August 2024, the Directors declared a fully franked final dividend of 7.0 cents per share payable on 31
October 2024. The Ex-Date for the dividend is 15 October 2024.
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
23
5. TRADE AND OTHER RECEIVABLES
2024
2023
$
$
Trade debtors
63,800
462,448
Income receivable
-
44,228
Sundry debtors
15,092
13,304
78,892
519,980
Trade debtors relate to outstanding settlements, are non-interest bearing and are secured by the Australian
Securities Exchange – National Guarantee Fund. They are settled within 2 days of the purchase being
executed. Any expected credit loss on trade and other receivables is not material.
Income receivable relates to accrued interest income, it is non-interest bearing and is unsecured.
6. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Long positions - held for trading financial assets:
Listed Investments at fair value
35,463,031
18,085,246
Swap positions at fair value
160,543
-
35,623,574
18,085,246
7. TRADE AND OTHER PAYABLES
Trade creditors
-
1,335,558
Dividends payable on shorts
-
12,035
Sundry creditors - related parties
78,571
41,868
Sundry creditors - other
83,017
62,051
161,588
1,451,512
Trade creditors relate to outstanding settlements. They are non-interest bearing and are secured by the
Australian Securities Exchange – National Guarantee Fund. They are settled within 2 days of the purchase
being executed.
Sundry creditors – related parties, includes fees payable of $78,571 (inclusive of GST) (2023: $41,868) to
the manager, Cadence Asset Management Pty Limited.
Sundry creditors – other, are settled within the terms of payment offered, which is usually within 30 days.
8. FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS
Short positions - held for trading financial liabilities:
Listed investments at fair value
1,047,128
3,717,097
The Company’s Financial Assets and Cash are used as collateral for its Financial Liabilities. Refer to Note
13(b) for further information on Credit Risk.
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
24
9. ISSUED CAPITAL
2024
2023
$
$
(a) Paid-up Capital
Ordinary shares fully paid
33,028,501
32,942,904
Capitalised share issue costs
(298,146)
(298,146)
Deferred tax asset on capitalised share issue costs
89,444
89,444
32,819,799
32,734,202
2024
Share Price
No. of
Issue value
Date
Details
$
Shares
$
Balance at beginning of
the year
15,609,770
32,942,904
October 2023
Shares issued via DRP
$1.72235
88,390
152,238
October 2023
On-market share buy-back
$1.71665
(8,991)
(15,434)
November 2023
On-market share buy-back
$1.66275
(14,221)
(23,646)
December 2023
On-market share buy-back
$1.61511
(8,178)
(13,208)
January 2024
On-market share buy-back
$1.60015
(19,428)
(31,088)
February 2024
On-market share buy-back
$1.67116
(37,572)
(62,789)
April 2024
Shares issued via DRP
$1.80507
225,382
406,815
May 2024
On-market share buy-back
$1.71075
(95,433)
(163,262)
June 2024
On-market share buy-back
$1.73185
(94,713)
(164,029)
15,645,006
33,028,501
2023
Share Price
No. of
Issue value
Date
Details
$
Shares
$
Balance at beginning of
the year
15,233,945
32,129,200
October 2022
Shares issued via DRP
$2.2367
180,640
404,015
April 2023
Shares issued via DRP
$2.0918
195,185
409,689
15,609,770
32,942,904
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to
one vote per share at shareholder meetings. In the event of the winding up of the Company, ordinary
shareholders rank after creditors and share in any proceeds on winding up in proportion to the number of
shares held.
(b) Capital Management
Management controls the capital of the Company in order to maintain a good debt to equity ratio, provide the
shareholders with adequate returns and ensure that the Company can fund its operations and continue as a
going concern. The Company’s debt and capital includes ordinary share capital and financial liabilities,
supported by financial assets.
Management effectively manages the Company’s capital by assessing the Company’s financial risks and
adjusting its capital structure in response to changes in these risks and in the market. These responses
include the management of debt levels, distributions to shareholders and share issues. There has been no
change in the strategy adopted by the Board to control the capital of the Company. The Company is not
subject to any externally imposed capital requirements.
On 6 October 2023, the Company announced the approval of an on-market share buy-back of up to 600,000
of its ordinary shares. The share buy-back period commenced on 20 October 2023 and is due to finish on 18
October 2024.
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
25
10. PROFITS RESERVE
2024
2023
$
$
Profits Reserve
3,522,195
5,551,467
Movement in Profits Reserve
Opening balance
5,551,467
7,850,109
Dividends paid (Note 4)
(2,029,272)
(2,298,642)
3,522,195
5,551,467
The Profit Reserve is made up of amounts transferred from earnings that are preserved for future dividend
payments.
11. CASH FLOW INFORMATION
(a) Reconciliation of cash
Cash at the end of the year as shown in the Statement of Cash Flows is reconciled to the related items in the
Statement of Financial Position as follows:
Cash and cash equivalents
3,469,417
21,196,633
Cash overdrafts
(6,704,765)
(3,956,359)
(3,235,348)
17,240,274
The weighted average interest rate for cash and cash equivalents as at June 2024 is 4.0% (June 2023:
4.0%). The weighted average interest rate for cash overdrafts as at June 2024 is 6.0% (June 2023: 6.0%).
The Company has Prime Brokerage facilities, including lending, and Custody arrangements with BNP
Paribas. The Prime Brokerage facilities are secured by a first charge over the financial assets of the
Company.
The Company has granted a charge over all of the Company’s right, title and interest in the assets
transferred to the Prime Broker. This includes those transferred to the Custodians and sub-custodians in
accordance with Prime Brokerage Agreements, and any right which arises after the date of the charges to
receive cash or return of property from the parties under the Prime Brokerage Agreement, as security for
payments and performance by the Company of all of its obligations to the Prime Brokers under the Prime
Brokerage Agreement.
(b) Reconciliation of Operating Profit/ (Loss) after Income
Tax
Operating profit/ (loss) after income tax
2,340,605
(1,342,875)
Movement in fair value on financial assets and liabilities
(20,208,297)
(1,289,240)
Changes in assets and liabilities:
Decrease in trade and other receivables
443,293
2,337,517
Decrease in trade and other payables
(1,292,129)
(1,385,901)
Increase in current tax liability/ (asset)
237,361
(150,901)
Increase in deferred tax asset
(52,780)
(964,718)
Net cash used by Operating Activities
(18,531,947)
(2,796,118)
(c) Non-cash Financing Activities
During the financial year and previous financial year the Company issued the following shares through its
Dividend Reinvestment Plan:
- 225,382 shares at $1.80507 on 30 April 2024
- 88,390 shares at $1.72235 on 31 October 2023
- 195,185 shares at $2.0918 on 28 April 2023
- 180,640 shares at $2.2367 on 28 October 2022
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
26
2024
2023
12. EARNINGS PER SHARE
Cents per
Cents per
Share
Share
Basic earnings/ (loss) per share
15.0
(8.7)
Diluted earnings/ (loss) per share
15.0
(8.7)
2024
2023
$
$
Profit/ (loss) after income tax used in the calculation of
earnings per share
2,340,605
(1,342,875)
No.
No.
Weighted average number of ordinary shares outstanding
during the year used in calculation of basic earnings per share
15,651,437
15,388,886
Weighted average number of ordinary shares during the year
used in calculation of diluted earnings per share
15,651,437
15,388,886
Reconciliation of weighted average number of shares:
Weighted average number of ordinary shares used in calculation
of basic earnings per share
15,651,437
15,388,886
Add:
Weighted average number of potential ordinary shares used in
the calculation of diluted earnings per share
-
-
Weighted average number of shares used in the calculation of
diluted earnings per share
15,651,437
15,388,886
As at the end of the year, there are no outstanding securities that are potentially dilutive in nature for the
Company.
13. FINANCIAL RISK MANAGEMENT
Financial Risk Management Policies
The Company’s financial instruments consist of money market instruments, short and long term investments,
accounts receivable and payable.
Financial Risk Exposures and Management
The main risks the Company is exposed to through its financial instruments are interest rate risk, liquidity
risk, credit risk, foreign currency risk and market price risk.
(a) Terms, Conditions and Accounting Policies
The Company’s accounting policies are included in Note 1, while the terms and conditions including interest
rate risk of each class of financial asset, financial liability and equity instrument, both recognised and
unrecognised at balance date are included under the appropriate note for that instrument.
(b) Credit Risk
The Company takes on exposure to credit risk, which is the risk that a counterparty (prime broker, custodian,
sub-custodian and broker) will be unable to pay amounts in full when due. The maximum exposure to credit
risk by class of recognised financial assets at the end of the reporting period excluding the value of any
collateral or other security held, is equivalent to the carrying amount and classification of those financial
assets (net of any provisions) as presented in the statement of financial position.
All transactions in listed securities are settled /paid for upon delivery using approved brokers. The risk of
default is considered minimal, as delivery of securities sold is only made once the broker has received
payment. Payment is made on a purchase once the securities have been received by the broker. The trade
will fail if either party fails to meet their obligation.
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
27
13. FINANCIAL RISK MANAGEMENT(Continued)
(b) Credit Risk (Continued)
There are risks involved in dealing with custodians or prime brokers who settle trades. Under certain
circumstances, including certain transactions where the Company’s assets are pledged as collateral for
leverage from a prime broker/custodian, or where the Company’s assets are held at a prime broker,
custodian or sub-custodian, the securities and assets deposited with the prime broker/custodian may be
exposed to a credit risk with regards to such parties. In addition, there may be practical or timing problems
associated with enforcing the Company’s rights to its assets in case of an insolvency of any such party.
The Company maintains Prime Brokerage facilities, including lending, and Custody facilities with its prime
broker and custodian BNP Paribas. There is no guarantee that these or any sub-custodian that BNP Paribas
may use or any other prime broker or custodian that the Company may use from time to time, will not
become insolvent. In the event of an insolvency or liquidation of a prime broker or custodian that is being
used by the Company, there is no certainty that the Company would not incur losses due to its assets being
unavailable for a period of time or ultimately less than full recovery of its assets, or both. As substantially all
of the Company’s assets may be held by a prime broker, custodian or sub-custodian and in some cases a
major Australian bank, such losses could be significant and materially impair the ability of the Company to
achieve its investment objective.
Any cash held by BNP Paribas is not treated as client money, but rather held as collateral and is not subject
to the client monies protections conferred by the Financial Conduct Authority rules relating to client money.
As a consequence, the Company’s money is held by the Prime Broker as banker and not as a trustee or
agent and the Prime Broker will not be required to place the Fund’s money in a segregated client account,
and the Company will therefore rank equally with BNP Paribas’s other account holders in relation thereto.
(c) Liquidity Risk
Liquidity risk represents the risk that an entity will encounter difficulty in meeting obligations associated with
financial liabilities. The Company’s major cash outflows are the purchase of securities and dividends paid to
shareholders, the levels of which are managed by the Board and the management company. The
Company’s inward cash flows depend upon the level of sales of securities, dividends, interest received and
any exercise of options that may be on issue.
The Company monitors its cashflow requirements daily by reference to known transactions to be paid or
received. The Company may hold a portion of its portfolio in cash and short-term fixed interest securities
sufficient to ensure that it has cash available to meet all payments. Alternatively, the Company can increase
its level of sales of the readily tradeable securities it holds to increase cash inflows or it can use its lending
facility with its Prime Broker.
(d) Market Price Risk
Market price risk represents the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices. By its nature, as an investment company that invests in
tradeable securities, the Company will always be subject to market price risk as it invests its capital in
securities which are not risk free as the market price of these securities can fluctuate.
The Company can seek to reduce market price risk by not being overly exposed to one company or one
particular sector of the market. The Company does not have set parameters as to a minimum or maximum
amount of the portfolio that can be invested in a single company or sector. The Company monitors its gross
and net exposures to the market on a daily basis.
(e) Foreign Currency Risk
The Company undertakes certain transactions and holds assets and liabilities denominated in currencies
other than Australian Dollar (AUD), the reporting currency of the Company. The Company is therefore
exposed to currency risk, as the value of the assets and liabilities denominated in other currencies will
fluctuate due to changes in exchange rates.
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
28
13. FINANCIAL RISK MANAGEMENT (Continued)
(e) Foreign Currency Risk (Continued)
The following table summarises the net amount of assets and liabilities which are denominated in currencies
that the Company is significantly exposed to:
United States Dollar
2024 2023
Investments
USD2,240,431
USD1,639,489
Bank Overdraft
USD(2,336,190)
USD(1,692,460)
USD(95,759)
USD(52,971)
AUD Equivalent
AUD(143,567)
AUD(79,460)
Canadian Dollar
Investments
CAD3,915,542
CAD1,117,265
Bank Overdraft
CAD(2,773,924)
CAD(1,120,104)
CAD1,141,618
CAD(2,839)
AUD Equivalent
AUD1,251,225
AUD(3,217)
(f) Interest Rate Risk
Any excess cash and cash equivalents of the Company are invested at short-term market interest rates.
Floating rate instruments expose the Company to cash flow risk, whereas short term fixed rate instruments
expose the Company to interest rate risk. Excess cash and cash equivalent balances are monitored closely
and can be moved into short-term bank bills or fixed term deposits.
(g) Financial instrument composition and maturity analysis
The tables below reflect the undiscounted contractual settlement terms for financial instruments of a fixed
period of maturity, as well as the Company’s expectations of the settlement period for all other financial
instruments. As such, the amounts may not reconcile to the Statement of Financial Position.
Interest Bearing
2024
Weighted
Average
Interest Rate
Less than
90 days
$
More than
1 year
$
Non-interest
bearing
$
Total
$
Assets
Financial assets
-
-
-
35,623,574
35,623,574
Cash and cash equivalents
4.0%
3,469,417
-
-
3,469,417
Trade Debtors(<90 days)
-
-
-
63,800
63,800
Other receivables
-
-
-
15,092
15,092
Total assets
3,469,417
-
35,702,466
39,171,883
Liabilities
Financial liabilities
-
-
-
1,047,128
1,047,128
Cash overdrafts
6.0%
6,704,765
-
-
6,704,765
Other payables
-
-
-
161,588
161,588
Total liabilities
6,704,765
-
1,208,716
7,913,481
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
29
13. FINANCIAL RISK MANAGEMENT (Continued)
(g) Financial instrument composition and maturity analysis (Continued)
Interest Bearing
2023
Weighted
Average
Interest Rate
Less than
90 days
$
More than
1 year
$
Non-
interest
bearing
$
Total
$
Assets
Financial assets
-
-
-
18,085,246
18,085,246
Cash and cash equivalents
4.0%
21,196,633
-
-
21,196,633
Trade Debtors(<90 days)
-
-
-
462,448
462,448
Other receivables
-
-
-
57,532
57,532
Total assets
21,196,633
-
18,605,226
39,801,859
Liabilities
Financial liabilities
-
-
-
3,717,097
3,717,097
Cash overdrafts
6.0%
3,956,359
-
-
3,956,359
Trade Creditors(<90 days)
-
-
-
1,335,558
1,335,558
Other payables
-
-
-
115,954
115,954
Total liabilities
3,956,359
-
5,168,609
9,124,968
(h) Financial Instruments Measured at Fair Value
AASB 13: Fair Value Measurement requires the disclosure of fair value information using a fair value
hierarchy reflecting the significance of the inputs in making the measurements. The fair value hierarchy
consists of the following levels:
Level 1:
Quoted prices in active markets for identical assets or liabilities.
Level 2:
Inputs other than quoted prices included within Level 1 that are observable for the asset or
liability either directly (as prices) or indirectly (derived from prices).
Level 3:
Inputs for the asset or liability are not based on observable market data (unobservable
inputs).
Included within Level 1 of the hierarchy are listed investments. The fair values of these financial assets and
liabilities have been based on the closing quoted last prices at the end of the reporting period, excluding
transaction costs.
Investments included in Level 2 of the hierarchy include amounts in relation to Contracts for Difference. The
fair value of Contracts for Difference have been determined using market inputs of the underlying
investments
Level 3 asset class is made of a pre-IPO investment in a company that operates in the energy sector. This
investment was purchased during last financial year and is valued at cost. Level 3 asset class also includes
unlisted options, warrants and special shares that were valued as at 30 June 2024 at ‘nil’ The unlisted
options and warrants were received during the past financial year whilst the unlisted special shares were
held by the company last year at 30 June 2023 and were also valued at that date at ‘nil’.
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
30
13. FINANCIAL RISK MANAGEMENT (Continued)
(h) Financial Instruments Measured at Fair Value
30 June 2024
Level 1
$
Level 2
$
Level 3
$
Total
$
Financial assets
35,143,031
160,543
320,000
35,623,574
Financial liabilities
(1,047,128)
-
-
(1,047,128)
Total
34,095,903
160,543
320,000
34,576,446
30 June 2023
Level 1
$
Level 2
$
Level 3
$
Total
$
Financial assets
18,085,246
-
-
18,085,246
Financial liabilities
(3,717,097)
-
-
(3,717,097)
Total
14,368,149
-
-
14,368,149
(i) Sensitivity Analysis
The Company has performed a sensitivity analysis relating to its exposure to interest rate risk, foreign
currency risk and market price risk at balance date. This sensitivity analysis demonstrates the effect on the
current year results and equity which could result from a change in these risks.
Interest Rate Sensitivity Analysis
The sensitivity analyses below have been determined based on the Company’s exposure to interest rates at
the reporting date and the stipulated change taking place at the beginning of the financial year and held
constant through the reporting period. The effect on profit/(loss) and equity as a result of changes in the
interest rate, with all other variables remaining constant would be as follows:
2024
2023
$
$
Change in profit before tax
- Increase in interest rate by 1%
67,890 100,249
- Decrease in interest rate by 1%
(67,890) (100,249)
Change in equity
- Increase in interest rate by 1%
47,523 70,174
- Decrease in interest rate by 1%
(47,523) (70,174)
Foreign Currency Risk Sensitivity Analysis
At 30 June 2024, the effect on profit and equity as a result of changes in the foreign currency risk, with all
other variables remaining constant would be as follows:
2024
2023
$
$
Change in profit before tax
- Depreciation of the AUD by 2%
18,974 (4,616)
- Appreciation of the AUD by 2%
(18,974) 4,616
Change in equity
- Depreciation of the AUD by 2%
13,282 (3,231)
- Appreciation of the AUD by 2%
(13,282) 3,231
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
31
13. FINANCIAL RISK MANAGEMENT (Continued)
(i) Sensitivity Analysis (Continued)
Market Price Risk Sensitivity Analysis
At 30 June 2024, the effect on profit and equity as a result of changes in the market price risk, with all other
variables remaining constant would be as follows:
2024
2023
$
$
Change in profit before tax
- Increase in market price by 2%
656,827 287,363
- Decrease in market price by 2%
(656,827) (287,363)
Change in equity
- Increase in market price by 2%
459,779 201,154
- Decrease in market price by 2%
(459,779) (201,151)
14. KEY MANAGEMENT PERSONNEL COMPENSATION
The names and position held of the Company’s key management personnel (including Directors) in office at
any time during the financial year are:
Karl Siegling
Chairman
Wayne Davies
Non-Executive Director and Company Secretary
Susan Oakes
Non-Executive Director
Jolanta Masojada
Non-Executive Director
(a) Remuneration
There are no executives that are paid by the Company. Cadence Asset Management Pty Limited, the
investment manager of the Company provides day to day management of the Company and is remunerated
as outlined in Note 15 – Related Party Transactions.
2024
$
2023
$
Short-term Employee Benefits - Directors’ Fees
67,568
67,873
Post-employment Benefits - Superannuation
7,432
7,127
75,000
75,000
(b) Compensation Practices
The Board from time to time determines remuneration of Non-Executive Directors within the maximum
amount approved by the shareholders. Non-Executive Directors are not entitled to any other remuneration.
Fees and payments to Non-Executive Directors reflect the demands that are made on, and the
responsibilities of, the Directors and are reviewed annually by the Board. The Company determines the
remuneration levels and ensures they are competitively set to attract and retain appropriately qualified and
experienced Directors.
Directors’ base fees are presently limited to a maximum of $100,000 per annum between the Directors. Non-
Executive Directors do not receive bonuses nor are they issued options on securities. Directors’ fees cover
all main board activities and membership of committees. Directors’ fees are not linked to the performance of
the Company.
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
32
14. KEY MANAGEMENT PERSONNEL COMPENSATION (Continued)
As at 30 June 2024, the Company’s key management personnel indirectly held the following shares in the
Company:
Balance at
Acquisitions
Disposals
Balance at
Shareholdings
1 July 2023
30 June 2024
Karl Siegling
3,350,330
400,675
-
3,751,005
Wayne Davies
131,962
9,910
-
141,872
Jolanta Masojada
11,587
870
-
12,457
Susan Oakes
34,486
2,590
-
37,076
3,528,365
414,045
-
3,942,410
Directors and Director related entities disposed of and acquired ordinary shares in the Company on the same
terms and conditions available to other shareholders. The Directors have not, during or since the end of the
financial year, been granted options over unissued shares or interests in shares of the Company as part of
their remuneration.
As at 30 June 2023, the Company’s key management personnel indirectly held the following shares in the
Company:
Balance at
Acquisitions
Disposals
Balance at
1 July 2022
30 June 2023
Karl Siegling
3,129,811
220,519
-
3,350,330
Wayne Davies
123,276
8,686
-
131,962
Jolanta Masojada
10,824
763
-
11,587
Susan Oakes
32,216
2,270
-
34,486
3,296,127
232,238
-
3,528,365
15. RELATED PARTY TRANSACTIONS
All transactions with related entities were made on normal commercial terms and conditions.
Karl Siegling is the sole Director and a beneficial owner of Cadence Asset Management Pty Limited, the
entity appointed to manage the investment portfolio of Cadence Opportunities Fund Limited. In its capacity
as Manager, Cadence Asset Management Pty Limited was entitled to a management fee of $439,180
(inclusive of GST) (2023: $467,941). This is equivalent to 0.104% of the value of the portfolio calculated on
the last business day of each month. Over a full year, the monthly management fee will be comparable to a
fee of 1.25% of the gross value of the portfolio per annum. As at 30 June 2024, the management fee payable
to the Manager was $39,619 (2023: $35,268).
The duties of the Manager are to manage the portfolio and to manage and supervise all investments,
maintain the corporate and statutory records of the Company, liaise with the ASX with respect to compliance
with the ASX listing rules, liaise with ASIC with respect to compliance with the Corporations Act and liaise
with the share registrar of the Company.
In addition, Cadence Asset Management Pty Limited is to be paid, annually in arrears, a performance fee,
being 15% (plus GST) of the amount of the increase in the value of the portfolio. No performance fee is
payable in respect of any performance period, where the portfolio has decreased in value over that period.
For the year ended 30 June 2024, $32,352 (inclusive of GST) (2023: nil). was payable to Cadence Asset
Management Pty Limited. As at 30 June 2024, the balance payable to the Manager was $32,352 (2023: nil).
Cadence Asset Management Pty Limited employs accounting personnel to provide accounting services to
Cadence Opportunities Fund Limited. These services are provided on commercial terms and include a
standard charge of $4,180 (inclusive of GST) per month and an increased charge of $6,600 (inclusive of
GST) is charged for preparing the half year and full year financial statements. As at 30 June 2024, the
balance payable to the Manager for these services was $6,600 (2023: $6,600).
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
33
16. EVENTS AFTER THE REPORTING PERIOD
On 16 August 2024, the Board declared a 7.0 cents per share fully franked final dividend payable on the
31 October 2024. The Ex-Date for the dividend is 15 October 2024.
Other than the above, there has not arisen in the interval between the end of the financial year and the date
of this report any other item, transaction or event of material and unusual nature likely, in the opinion of the
Company, to significantly affect the operations of the entity, the results of those operations, or the state of
affairs of the entity, in future financial years.
17. CONTINGENT LIABILITIES
There were no material contingencies as at 30 June 2024 (2023: nil).
18. CAPITAL COMMITMENTS
2024
2023
$
$
Capital commitments exist for placements entered into before
30 June 2024, which settle after year end.
-
47,897
19. SEGMENT REPORTING
The Company has only one segment. The Company operates predominately in Australia and in one industry
being the securities industry, deriving revenue from dividend income, interest income and from the sale of its
financial assets at fair value through profit or loss, however the Company has foreign exposures as it invests
in securities which are listed Internationally.
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
34
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
Cadence Opportunities Fund Limited does not have any controlled entities and is not required by the
Accounting Standards to prepare consolidated financial statements. Therefore, section 295(3A)(a) of the
Corporations Act 2001 does not apply to the Company.
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
35
DIRECTORS’ DECLARATION
The Directors of Cadence Opportunities Fund Limited declare that:
1. The financial statements as set out in pages 13 to 33 and the additional disclosures included in the
Directors’ Report designated as ‘Remuneration Report’, as set out on pages 8 to 9 are in accordance with
the Corporations Act 2001, including:
(a) complying with Australian Accounting Standards, which, as stated in Note 1 to the financial
statements, constitutes compliance with International Financial Reporting Standards (IFRS), the
Corporations Regulations 2001 and other mandatory professional reporting requirements; and
(b) giving a true and fair view of the financial position of the Company as at 30 June 2024 and of its
performance for the year ended on that date.
2. The Directors have been given declaration required by section 295A of the Corporations Act 2001 from the
Manager, Cadence Asset Management Pty Limited declaring that:
(a) the financial records of the Company for the financial year have been properly maintained in
accordance with section 286 of the Corporations Act 2001;
(b) the financial statements and notes for the financial year comply with the Accounting Standards;
(c) the financial statements and notes for the financial year give a true and fair view; and
(d) the information disclosed in the consolidated entity disclosure statement is true and correct.
3. At the date of this declaration, in the Directors’ opinion there are reasonable grounds to believe that the
Company will be able to pay its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Karl Siegling
Director
Dated in Sydney, this 24th day of September 2024
36
INDEPENDENT AUDIT REPORT
TO MEMBERS OF
CADENCE OPPORTUNITIES FUND LIMITED
A.B.N. 37 627 359 166
Independent Auditor’s Report to the Members of Cadence Opportunities Fund Limited
REPORT ON THE AUDIT OF THE FINANCIAL REPORT
Opinion
We have audited the financial report of Cadence Opportunities Fund Limited (“the Company”) which comprises
the statement of financial position as at 30 June 2024, the statement of profit or loss and other comprehensive
income, the statement of changes in equity and the statement of cash flows for the year then ended, and notes
to the financial statements, including material accounting policy information, the consolidated entity disclosure
statement and the directors’ declaration.
In our opinion, the accompanying financial report of the Company is in accordance with the Corporations Act
2001, including:
(a)
giving a true and fair view of the Company’s financial position as at 30 June 2024 and of its financial
performance for the year then ended; 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 Company 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 (“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.
Key Audit Matter
How our audit addressed the key audit matter
Existence and Valuation of Cash and Investments
At 30 June 2024, the Company held “Cash and Cash
Equivalents” of $3,469,417and “Financial assets at fair
value through profit or loss” of $35,623,574, which
have been included in the Company’s Statement of
Financial Position at that date.
As disclosed in Note 1 to the financial report,
investments are initially held at fair value through profit
or loss including any transaction costs. Subsequent to
initial recognition they are accounted for at fair value,
We confirmed the Existence of the Cash and
Investments with the Custodian, and the Valuation of
the Investments using both the Custodian and third
party valuation information for listed securities, as well
as management’s valuation for unlisted securities.
37
with changes in those values recognised in profit or
loss.
We considered these areas to be key audit matters
due to the size of the amounts involved.
Completeness of Interest Bearing Liabilities and Other Financial Liabilities
At 30 June 2024, the Statement of Financial Position
shows “Bank overdrafts of $6,704,765 and “Financial
liabilities at fair value through profit or loss” of
$1,047,128.
We considered this area to be a key audit matter due
to the potential size of the liabilities.
We confirmed with the Custodian that all interest
bearing liabilities and other financial liabilities had
been recognised.
Completeness and Occurrence of Performance and Management Fees
The Company has an agreement with its Investment
Manager, Cadence Asset Management Pty Limited, to
pay management fees and, depending on
performance, performance fees to Cadence Asset
Management Pty Limited.
For the year ended 30 June 2024, the Company
incurred “performance fees” of $30,147and
“management fees” of $409,236 which have been
included in the Company’s Statement of Profit or Loss
and Other Comprehensive Income.
We focused on this area as a key audit matter as the
agreement is with the Investment Manager of the
Company.
We obtained copies of the Investment Manager’s
calculation of the performance and management fees.
We reviewed the calculation of the fees, ensuring that
the rates used were those in the agreement.
We confirmed with the Investment Manager that the
expense recognised by the Company reconciled to the
income received by the Investment Manager.
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 Company’s annual report for the year ended 30 June 2024, 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 accordingly 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.
38
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of:
(a) the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001; and
(b) the consolidated entity disclosure statement that is true and correct in accordance with the Corporations Act
2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
(i)
the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view
and is free from material misstatement, whether due to fraud or error; and
(ii)
the consolidated entity disclosure statement that is true and correct and is free of misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Company 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 Company 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 Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of this financial
report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
•
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Company’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the directors.
•
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Company to cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
39
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance in
the audit of the financial report of the current period and are therefore the key audit matters. We describe these
matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.
REPORT ON THE REMUNERATION REPORT
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 8 to 9 of the directors’ report for the year ended 30
June 2024.
In our opinion, the Remuneration Report of the Company for the year ended 30 June 2024 complies with section
300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
HLB Mann Judd Assurance (NSW) Pty Ltd
K L Luong
Chartered Accountants
Director
Sydney, NSW
24 September 2024
40
ASX ADDITIONAL INFORMATION
Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere in
this report.
SHAREHOLDINGS
Substantial shareholders (as at 31 August 2024)
The following shareholders have advised that they are a substantial shareholder of Cadence Opportunities Fund
Limited. The holding of a relevant interest does not infer beneficial ownership. Where two or more parties have a
relevant interest in the same shares, those shares have been included for each party.
Substantial ordinary shareholders as at ex-date
No. of shares
% of total
Esselmont Pty Ltd & associated entities
3,856,530
24.706
Distribution of shareholders (as at 31 August 2024)
No. of shareholders
1 – 1,000
71
1,001 – 5,000
216
5,001 – 10,000
110
10,001 – 100,000
238
100,001 and over
19
654
The number of shareholdings held in less than marketable parcels is 13.
41
Twenty largest shareholders - Ordinary shares (as at 31 August 2024)
Name
Number of
ordinary
shares
held
Percentage
of issued
capital held
Esselmont Pty Ltd and associates
3,856,530
24.706%
Ms Nicole Gallin & Mr Kyle Haynes
550,000
3.523%
Mr Cameron Mcfarlane
454,080
2.909%
Obtainium Pty Limited
386,440
2.476%
Melacca Pty Ltd
250,000
1.602%
Chillara Investments Pty Ltd
186,667
1.196%
Mr Neville Collins & Mrs Judith Collins
162,368
1.040%
Mr Luke Keighery & Mrs Angela Keighery
151,996
0.974%
Mr Charles Akrill Mitchell
145,984
0.935%
Lazy Vee Pty Ltd
145,328
0.931%
Andonandon Pty Limited
141,872
0.909%
Srog Investments Pty Ltd
120,000
0.769%
Mudspec Pty Ltd
120,000
0.769%
Auridium Pty Ltd
119,399
0.765%
Mr Allan Ross Lanes
104,260
0.668%
Mr Stephan Stapmanns & Mrs Tina Stapmanns
103,672
0.664%
Glenn Bakyew Pty Ltd
96,578
0.619%
Obtainium Pty Limited
94,779
0.607%
Ms Carolyn Earl & Mr John Nissen
90,200
0.578%
Robinson Page Management Pty Ltd
90,000
0.577%
7,370,153
47.217%
STOCK EXCHANGE LISTING
Quotation has been granted for all of the ordinary shares of the Company on all Member Exchanges of the ASX
Limited.