Ironbark Capital Limited
ABN 89 008 108 227
Financial Statements
For the year ended 30 June 2012
Ironbark Capital Limited
ABN 89 008 108 227
Contents
For the year ended 30 June 2012
Directory
Directors' review
Corporate governance policy statement
Portfolio shareholdings at 30 June 2012
Directors' report
Auditor's Independence declaration
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors' declaration
Independent audit report to the members
Members Information as at 11 September 2012
Pages
3
4-5
6-13
14-15
16-19
20
21
22
23
24
25-38
39
40-41
42-43
2
Share Registrar
Boardroom Pty Limited
GPO Box 3993
Sydney NSW 2001
Shareholder enquiries telephone: (02) 9290 9600
Company secretarial & all other enquiries
Telephone: (02) 8236 7701
Email: ironbarkcapital@whiteoutsourcing.com.au
Ironbark Capital Limited
ABN 89 008 108 227
Directory
Investment Manager
Kaplan Funds Management Pty Limited
Level 22
44 Market Street
Sydney NSW 2000
Telephone: (02) 8917 0300
Directors
Michael J Cole (Chairman)
Ross J Finley
Ian J Hunter
Company Secretary
Peter Roberts
Registered Office
Level 7, 20 Hunter Street
Sydney NSW 2000
Telephone: (02) 8236 7701
Accounting & Administration
White Outsourcing Pty Ltd
Level 7, 20 Hunter Street
Sydney NSW 2000
Telephone: (02) 8236 7701
Fax: (02) 9221 1194
Auditors
MNSA Pty Ltd
Level 2, 333 George Street
Sydney NSW 2000
3
Ironbark Capital Limited
ABN 89 008 108 227
Directors’ Review
The Directors consider the investment management performance of IBC to be
satisfactory in the latest financial year. The IBC portfolio lifted 2.5% over the period.
This level significantly outperformed the ASX 300 benchmark by 9.5% as the broad
market index recorded a negative performance of -7.0%.Clearly this was a year where
preservation of shareholder capital was paramount and the Manager did an
outstanding job in that regard. However the very difficult equity market environment
meant that we fell short of our internal target of 1% per month.
Last year’s performance maintains the solid investment returns achieved over the last
five year’s which was a difficult period making capital preservation the overarching
objective.
The table in the Investment Managers Report, reproduced below, highlights that IBC
has generated significant out-performance above the ASX 300 Index over the most
recent 1, 3 and 5 year periods. In addition, the share portfolio volatility is approximately
half that of the Index volatility over all of these periods.
Over the longer term approaching a decade since inception, the IBC portfolio has also
exceeded the ASX 300 index performance by a small margin. IBC also recorded
around half the volatility of the index. This performance is consistent with the solid
growth, high yield and low risk of the IBC portfolio.
The markedly lower volatility of the IBC investments means the risk embedded in the
portfolio is much less than the market. Accordingly the investment returns are generally
expected to be below long only fund managers. In this context it can be noted the
strength and consistency of IBC’s investment performance being in the top quartile for
periods up to three years when compared to other domestic managers in the Mercer
Investment Performance survey.
Relative Performance to 30 June 2012
Inception
(31/12/02) % pa
5 Yr
% pa
3 Yr
% pa
2 Yr
% pa
1 Yr
%
3 mths
%
Ironbark Capital Ltd
ASX 300 Accum Index
Relative Performance
Volatility IBC
Volatility ASX
8.48
7.84
0.65
7.3
13.8
2.25
9.94
8.75
2.51
-0.39
-4.15
5.56
2.01
-7.01
-5.02
6.40
4.38
6.74
9.52
4.63
8.9
6.2
6.1
6.9
16.6
14.0
12.1
14.8
Whilst the performance of the IBC investment portfolio has been satisfactory, the
Directors remain challenged by two important issues. Firstly, the share price discount
to NTA and secondly the payment of fully franked dividends.
Firstly, Directors understand that IBC shareholders are frustrated by the large discount
of the ASX share price of IBC shares to the Net Tangible Asset (NTA) backing of the
shares. The Directors considered that if there was certainty that the full NTA backing
could be realised at a specific future date, the discount of the ASX share price to the
4
NTA would narrow. With adoption last year of the Constitutional amendment potentially
providing certainty for Shareholders to access the full NTA value of the shares in mid-
2015, it was anticipated the share price discount to NTA would reduce. It is pleasing to
report that measuring the NTA discount at the close of the latest financial year and
comparing it to the previous corresponding period, the NTA discount has reduced from
15.2% to 9.7% and we anticipate a further narrowing as mid 2015 approaches.
The second major challenge facing the Directors is the declaration of fully franked
dividends to IBC shareholders. As previously advised the ATO amended the dividend
paying requirement so that a listed investment company must not only be solvent but
also must have sufficient retained earnings to support the declaration of a fully franked
dividend. In the case of Ironbark, franking credits are collected from company
investment dividends received, however due to existing accounting policies, unrealised
changes to the value of the investment portfolio must also be taken to account through
the profit and loss report. In the difficult equity markets of recent times this can result in
a discrepancy between the level of franking credits accumulated and the retained
earnings available to support a fully franked dividend declaration.
It is IBC corporate policy to fully distribute franking credits held to shareholders by
attaching them to corporate earnings recorded over the course of each financial year.
Thus fully franked dividends will be declared as the generation of corporate profits
creates the opportunity to do so. Whilst these dividends are declared on an irregular
basis they will be paid twice a year at the end of December and June to be most cost
efficient.
The ATO has recently announced a number of modifications to the fully franked
dividend regime. Whilst Directors are taking advice on the implications of these
changes our preliminary view is that the recent ATO ruling, will provide greater
flexibility to pay franked dividends as franking credits arise. The Board are also
intending to early adopt AASB 9 Financial Instruments from 1 July 2012. This change
will see assets classified as “available for sale” which better reflects the longer term
investment style of the manager than the “held for trading” classification adopted under
the current accounting standard. This reclassification will see all price movements on
investments (both realised and unrealised movements) reflected directly in reserves
rather than through the current year profit and loss, which will increase the likelihood of
recorded profits being available from which to pay dividends. As a result, there will be
no alteration to the current fully franked dividend paying approach outlined above.
M J Cole
Chairman
22 August 2012
5
Ironbark Capital Limited
ABN 89 008 108 227
Corporate Governance Policy Statement
This statement outlines the main corporate governance practices adopted by the
Company, which comply with the ASX Corporate Governance Council Principles and
Recommendations (2nd Edition, August 2007) unless otherwise stated.
Lay solid foundations for management and oversight
The Board’s primary role is the protection and enhancement of long-term shareholder
value. To fulfill this role the Board seeks to address:
(a) the prudential control of the Company’s operations;
(b) the resourcing, review and monitoring of executive management;
(c) the timeliness and accuracy of reporting to shareholders; and
(d) the determination of the Company’s broad objectives.
The Company’s operations are conducted through Kaplan Funds Management Pty Ltd
(Investment Manager) and White Outsourcing Pty Limited (Administration Manager).
These entities incorporate the specialist wholesale investment and administration
personnel who undertake the Company’s executive operations.
The Company’s executive management arrangements have been structured to provide
investors with a cost efficient investment vehicle and access to a significant depth of
professional resources. Individual directors are subject to continuous review by the
Chairman.
The Board has established a number of Board Committees including a Nomination
Committee, a Remuneration Committee and an Audit Committee. These committees
have written mandates and operating procedures which are reviewed on a regular
basis. The Board has also established a range of policies which govern its operation.
The Nomination Committee is responsible for the review of the Board’s performance as
a whole. A performance evaluation of the Board and all Board members is conducted
annually. This review took place in May for the 2012 calendar year. Individual directors
are subject to continuous review by the Chairman.
Recommendation 1.2 requires the disclosure of the process for evaluating the
performance of senior executives. The Company does not comply with this
recommendation as there are no senior executive officers of the Company.
Structure the Board to add value
The names of the directors of the Company in office at the date of this statement are
set out in the directors’ report on page 16.
The skills, experience and expertise relevant to the position of each director in office at
the date of the annual report is included in the Director’s Report on page 17. Directors
of Ironbark Capital Limited are considered to be independent when they are
independent of management and free from any business or other relationship that
could materially interfere with – or could reasonably be perceived to materially interfere
with – the exercise of their unfettered and independent judgment.
6
Ironbark Capital Limited
ABN 89 008 108 227
Corporate Governance Policy Statement (continued)
The composition of the Board is determined using the following principles:
• A minimum of three directors;
• An independent, non-executive director as Chairman; and
• A majority of independent non-executive directors.
The term in office held by each director in office at the date of this report is as follows:
Name
Michael J Cole
Ross J Finley
Ian J Hunter
Term in office
10 years
26 years
10 years
Directors have a usual term of two years, and a maximum term of 3 years before
standing for re-election.
An independent director is considered to be a director:
(a) who is not a member of management;
(b) who has not within the last three years been employed in an executive capacity by
the Company or been a principal of a professional adviser or consultant to the
Company;
(c) is not a significant supplier to the Company;
(d) has no material contractual relationship with the Company other than as a director;
and
(e) is free from any interest or business or other relationship which could materially
interfere with the director’s ability to act in the best interests of the Company.
In the context of director independence, “materiality” is considered from both the
company and individual director’s perspective. The determination of materiality requires
consideration of both quantitative and qualitative elements. An item is presumed to be
quantitatively immaterial if it is equal or less than 5% of the appropriate base amount. It
is presumed to be material (unless there is qualitative evidence to the contrary) if it is
equal to or greater than 10% of the appropriate base amount. Qualitative factors
considered include whether a relationship is strategically important, the competitive
landscape, the nature of the relationship and the contractual or other arrangements
governing it and other factors which point to the actual ability of the directors in
question to shape the direction of the company’s loyalty.
In accordance with the definition of independence above, and the materiality thresholds
set, the following directors, being the entire Board, are considered to be independent:
Name
Michael J Cole
Ross J Finley
Ian J Hunter
Position
Chairman, Non-Executive Director
Non-Executive Director
Non-Executive Director
The Board considers that although Michael Cole is a substantial shareholder, this does
not affect his independence as he satisfies all other suggested criteria for assessing
independence set out in Recommendation 2.1.
7
Ironbark Capital Limited
ABN 89 008 108 227
Corporate Governance Policy Statement (continued)
Recommendation 2.3 requires that “the roles of the Chair and Chief Executive Officer
of the Company should not be exercised by the same individual”. The Company does
not comply with this recommendation as there is no Chief Executive Officer of the
Company.
Each director has the right of access to all relevant Company information and to the
Company’s executives and subject to prior consultation with the Chairman, may seek
independent professional advice at the entity’s expense. A copy of advice received by
the director is made available to all other members of the Board.
The Board will hold four scheduled meetings each year plus any other strategic
meetings as and when necessitated by the Company’s operations. The agenda for
meetings is prepared through the input of the Chairman and the Company Secretary.
Standing items include matters of compliance and reporting, financials, shareholder
communications and investment strategy and outcomes. Submissions are circulated in
advance.
The Nomination Committee considers the appropriate size and composition of the
Board, criteria for membership, identification of potential candidates and the terms and
conditions of appointment to and retirement from the Board.
The Committee is responsible for:
• Conducting an annual review of the Board membership with regard to the present
and future requirements of the Company and making recommendations as to
composition and appointments;
• Review of Board succession plans, including succession of the Chairman, to
maintain an appropriate balance of skills, experience and expertise, taking into
account the need for diversity in gender, age, ethnicity and cultural background;
• Conducting an annual review of the time required from non-executive directors, and
whether the directors are meeting this;
• Requesting non-executive directors to inform the Chair and the Chair of the
nomination committee before accepting any new appointments as directors;
• Conducting an annual review of the independence of directors; and
• Recommendations to the Board on necessary and desirable competencies of
directors.
The Committee’s target is to ensure that (as a minimum) directors collectively have
investment accounting, general business experience and shareholder representation.
The terms and conditions of the appointment and retirement of non-executive directors
are set out in a letter of appointment. The Committee is responsible for the
performance review of the Board and its Committees. Individual directors are subject
to continuous review by the Chairman. The Chairman reports on the general outcome
of the meetings to the Board annually. Directors whose performance is unsatisfactory
are asked to retire.
In addition, the performance of service providers (JP Morgan, White Outsourcing Pty
Limited and Kaplan Funds Management Pty Ltd) is the subject of continuous oversight
by the Chairman and the Board as a whole.
8
Ironbark Capital Limited
ABN 89 008 108 227
Corporate Governance Policy Statement (continued)
The Nomination Committee comprised the following members during the year:
• Michael Cole (Chairman) - Independent Non-Executive
•
Ian Hunter - Independent Non-Executive
• Ross Finley - Independent Non-Executive
The Nomination Committee meets annually unless otherwise required. For details on
the number of meetings of the Nomination Committee held during the year and the
attendees at those meetings, refer to page 18 of the Director’s Report.
Promote ethical and responsible decision-making
The Board expects all non-executive directors to act professionally in their conduct and
with the utmost integrity and objectivity. All non-executive directors must comply with
the Company’s Code of Conduct and Ethics. The directors in acting professionally in
their conduct means that they will act with high standards of honesty, integrity and
fairness, avoiding conflicts of interest, acting lawfully and ensuring confidential
information is dealt with in accordance with the Company’s Privacy Policy.
The Company encourages directors to have a significant personal financial interest in
Ironbark Capital Limited (“IBC”), by acquiring and holding shares on a long-term basis.
Short term trading in IBC’s shares by directors is not permitted.
The Board has adopted the following policies concerning dealing in IBC’s shares by
directors.
•
Insider trading laws prohibit Directors and their associates from dealing in the
Company’s shares whilst in possession of price sensitive information that is not
generally available.
• As a matter of practice, market disclosure will be made whenever the gross
portfolio value moves by more than 2.5% since the previous NTA announcement.
Directors’ trading will be allowed, provided such an announcement has been made
and a reasonable amount of time allowed for the dissemination of the information
into the market.
The composition of the Board is monitored (both in respect of size, diversity and
membership) to ensure that the Board has a balance of skill and experience
appropriate to the needs of the Company. When a vacancy arises, the Board will
identify candidates with appropriate expertise and experience and appoint the most
suitable person taking into account the need for diversity in gender, age, ethnicity and
cultural background. Given the Company has no employees, consideration of diversity
does not extend beyond the Board and further disclosures in relation to policies are not
considered relevant.
Safeguard integrity in financial reporting
It is a requirement of the Board that White Outsourcing Pty Ltd sign-off on the content
of the financial statements, and that these statements represent a true and fair view of
the Company’s operations and financial position of the Company.
9
Ironbark Capital Limited
ABN 89 008 108 227
Corporate Governance Policy Statement (continued)
White Outsourcing Pty Ltd provides a declaration to the Board twice annually, to certify
that the Company’s financial statements and notes present a true and fair view, in all
material respects, of the Company’s financial condition and operational results and that
they have been prepared and maintained in accordance with relevant Accounting
Standards and the Corporations Act 2001. In respect of the current financial year all
necessary declarations have been submitted to the Board. In addition, White
Outsourcing Pty Ltd (accounting and Company Secretarial) confirms in writing to the
Board that the declaration provided above is founded on a sound system of risk
management and internal control and that the system is operating effectively in all
material respects in relation to financial reporting risks.
The Company has an Audit Committee with a documented Charter, approved by the
Board. All members must be non-executive directors and the majority be independent
directors. The Chairman is not the Chairman of the Board. The Committee is
responsible for considering the effectiveness of the systems and standards of internal
control, financial reporting and any other matter at the request of the Board. The Audit
Committee will meet at least two times per year.
The Audit Committee may have in attendance at their meeting such members of
management as may be deemed necessary to provide information and explanations.
The external auditors attend meetings by invitation to report to the Committee.
The members of the Audit Committee during the year were:
Ian Hunter (Chairman)
•
• Ross Finley
• Michael Cole
The responsibilities of the Audit Committee are to ensure that:
1. Relevant, reliable and timely information is available to the Board to monitor the
performance of the Company;
2. External reporting
is consistent with committee members’
information and
knowledge and is adequate for shareholder needs;
3. Management processes support external reporting in a format which facilitates
ease of understanding by shareholders and institutions;
4. The external audit arrangements are adequate to ensure the maintenance of an
effective and efficient external audit. This involves:
(a) reviewing the terms of engagement, scope and auditor’s independence;
(b) recommendations as to the appointment, removal and remuneration of an
auditor; and
(c) reviewing the provision of non-audit services provided by the external auditor
ensuring they do not adversely impact on audit independence;
5. Review the Company’s risk profile and assess the operation of the Company’s
internal control system.
The external auditor is required to attend the Annual General Meeting and is available
to answer shareholder questions.
For details on the number of meetings of the Audit Committee held during the year and
the attendees at those meetings, refer to page 18 of the Director’s Report.
10
Ironbark Capital Limited
ABN 89 008 108 227
Corporate Governance Policy Statement (continued)
The Board as a whole monitors the performance of the annual & half-yearly audit
performed by the external auditor. If the Board considers that the external auditor of the
Company should be changed a special resolution will be put to shareholder vote at the
following Annual General Meeting. External audit engagement partners are required
by legislation to rotate their appointment every five years.
Make timely and balanced disclosure
The Board informs shareholders of all major developments affecting the Company’s
state of affairs as follows:
• All information lodged with the ASX is available on the Company’s website at
www.ironbarkcapital.com via a direct link to the ASX website;
• An Annual Report will be mailed to shareholders at the close of the financial
year, where requested; and
• Net asset backing per share is released to the ASX by the 14th day following
each month-end and is sent via email to shareholders who register their
interest.
The Company Secretary is responsible for ensuring Ironbark Capital Limited complies
with its continuous disclosure obligations. All relevant staff of White Outsourcing Pty
Limited and Kaplan Funds Management Pty Limited are made aware of these
obligations and are required to report any price sensitive information to the Company
Secretary immediately they become aware of it. The Company Secretary in
consultation with the Chairman will decide whether the information should be disclosed
to the ASX.
Where possible, all continuous disclosure releases to the ASX are approved by the
Board, except the monthly net asset backing per share which is approved by White
Outsourcing Pty Limited in consultation with Kaplan Funds Management Pty Limited.
Where time does not permit approval by the Board, the Chairman of the directors must
approve the release.
Any information of a material nature affecting the Company is disclosed to the market
through release to the ASX as soon as the Company becomes aware of such
information, in accordance with the ASX Continuous Disclosure requirement.
Respect the rights of shareholders
Shareholders are entitled to vote on significant matters impacting on the business,
which include the election and remuneration of directors, changes to the constitution
and are able to receive the annual and interim financial statements if requested.
Shareholders are strongly encouraged to attend and participate in the Annual General
Meetings of Ironbark Capital Limited, to lodge questions to be responded by the Board,
and are able to appoint proxies.
11
Ironbark Capital Limited
ABN 89 008 108 227
Corporate Governance Policy Statement (continued)
Recognise and manage risk
The Board acknowledges that it is responsible for the overall system of internal control
but recognises that no cost effective internal control system will preclude all errors and
irregularities. The Board has delegated responsibility for reviewing the risk profile and
reporting on the operation of the internal control system to the Audit Committee.
The Audit Committee (a) requires executive management to report annually on the
operation of internal controls, (b) reviews the external audit of internal controls and
liaises with the external auditor and (c) conducts any other investigations and obtains
any other information it requires in order to report to the Board on the effectiveness of
the internal control system. In respect of the current financial year all necessary
declarations have been submitted to the Board.
The Board identifies the following business risks as having the potential to significantly
or materially impact the company’s performance (a) administrative risks including
operational, compliance and financial reporting (b) market related risks.
Administrative Risks
The Company has outsourced its administrative functions to service providers, JP
Morgan (custody), White Outsourcing Pty Limited (accounting and Company
Secretarial) and Kaplan Funds Management Pty Limited (investment management).
Risk issues associated with these activities are handled in accordance with the service
providers policies and procedures. White Outsourcing Pty Limited is responsible for
recognising and managing administrative risks including (a) operational, (b) compliance
and (c) financial reporting. Certificates of insurance currency are obtained annually
from all key service providers.
Market Risks
The Board is primarily responsible for recognising and managing market related risks.
By its nature as a Listed Investment Company, the Company will always carry
investment risk because it must invest its capital in securities which are not risk free.
However, the Company seeks to reduce this investment risk by a policy of
diversification of investments across industries and companies operating in various
sectors of the market. Kaplan Funds Management Pty Ltd (investment manager), is
required to act in accordance with the Board approved investment management
agreement and reports to the Board quarterly on the portfolio’s performance, material
actions of the investment manager during that quarter and an explanation of the
investment manager’s material proposed actions for the upcoming quarter. In addition,
that Kaplan Funds
the
Management Pty Ltd have invested the Company’s assets in accordance with the
approved investment mandate and complied with the Investment Management
Agreement requirements during the reporting period. In respect of the current financial
year all necessary declarations have been submitted to the Board. In assessing the
Company’s risk tolerance level the Board considers any instance which materially
affects the Company’s monthly Net Tangible Asset backing announcement released to
the ASX.
to report half-yearly
investment manager
is required
12
Ironbark Capital Limited
ABN 89 008 108 227
Corporate Governance Policy Statement (continued)
The Audit Committee and the Board perform a risk review on an annual basis to ensure
that adequate controls are in place to mitigate risk associated with investment manager
performance, market risk, fraud, transaction reporting errors, material reporting risks
and compliance risk.
Remunerate fairly and responsibly
reviews and makes
The Company has a Remuneration Committee which
recommendations to the Board on remuneration of the directors themselves. The
Remuneration Committee meets once a year. Full details on Directors’ remuneration
are provided in the Directors’ Report.
The members of the Remuneration Committee during the year were:
• Michael Cole (Chairman)
•
Ian Hunter
• Ross Finley
As previously noted, the executive function of the Company has been outsourced to
White Outsourcing Pty Limited (accounting and administration) and Kaplan Funds
Management Pty Limited (funds management), therefore, there are no executive
directors of the Company. The responsibility for considering and recommending
appropriate remuneration of the non-executive directors’ packages for the Board lies
with the Remuneration Committee. Non-executive directors are remunerated by way of
cash payments.
Recommendation 8.3 states that the Company should “clearly distinguish the structure
of non-executive directors’ remuneration from that of executive directors and senior
executives”. The Company does not comply with this recommendation as there are no
executive directors or senior executives.
For details on the number of meetings of the Remuneration Committee held during the
year and the attendees at those meetings, refer to page 18 of the Director’s Report.
Board policies and charters covering the following are available on the Company’s
website at www.ironbarkcapital.com:
• Board charter
• Nomination Committee charter
• Audit Committee charter
• Remuneration Committee
• Disclosure policy
• Communication policy
• Risk management policy
• Trading policy
• Code of Conduct and Ethics
13
Ironbark Capital Limited
ABN 89 008 108 227
Portfolio shareholdings at 30 June 2012
ASX code
Security
* Market Value
$'000
% of portfolio
1,846
4,388
3,003
3,296
2.4
5.7
3.9
4.3
12,533
16.3
997
4,565
850
695
712
8,183
1,757
1,442
3,172
1,004
4,045
1,981
1,630
1,371
4,756
925
1.3
5.9
1.1
0.9
0.9
10.6
2.3
1.9
4.1
1.3
5.2
2.6
2.1
1.8
6.2
1.2
38,085
49.4
223
6,257
6,480
0.3
8.1
8.4
ANZ
CBA
NAB
WBC
Banks
ANZ Banking Group Limited
Commonwealth Bank of Australia Limited
National Australia Bank Limited
Westpac Banking Corporation Limited
Hybrids
AGL Energy Limited - Subordinated Notes
ANZ Banking Group Ltd - Convertible Preference Shares
ANZ Banking Group Ltd - Subordinated Notes
AXA AsiaPacific - Subordinated Notes
Bendigo Bank - Preference Securities
AGKHA
ANZPA/PB/PC
ANZHA
AXJHA
BENPB/PC
CBAPA/PB/PCAPA Commonwealth Bank Perls III & Perls IV & Perls V
IAGPC
IANG
NABHA
NABHB
ORGHA
RHCPA
SVWPA
Insurance Australia Group - Convertible Preference Securities
Insurance Australia Group - Perpetual Reset Exchangeable Notes
National Australia Bank Limited Income Securities
National Australia Bank Limited - Subordinated Notes
Origin Energy Limited Notes
Ramsay Health Care Ltd - Convertible Equity Securities
Seven Group Holdings Limited - Convertible Redeemable
Preference Securities
Suncorp-Metway Limited - Convertible Preference Securities
SBKPB
WCTPA/WBCPA Westpac- Preferred Securities
WOWHC
Woolworths Limited - Notes
IAG
TLS
Large Industrial (Top 50)
Insurance Australia Group Ltd
Telstra Corporation Limited
* Includes market value of options written against holdings
14
Ironbark Capital Limited
ABN 89 008 108 227
Portfolio shareholdings at 30 June 2012 (continued)
ASX code
Security
* Market Value
$'000
% of portfolio
AMC
BHP
BTU
NCM
ORG
RIO
STO
WHC
WPL
CPA
DXS
IOF
MGR
AIO
CIF
DUE
HDF
SPN
SKI
EGP
TPI
Materials & Energy
Amcor Limited
BHP Billiton Ltd
Bathurst Resources Limited
Newcrest Mining Limited
Origin Energy Ltd
Rio Tinto Limited
Santos Limited
Whitehaven Coal Limited
Woodside Petroleum Limited
Property Trusts
Commonwealth Property Office Fund
Dexus Property Group
Investa Office Fund
Mirvac Group
Utilities & Infrastructure
Asciano Limited
Challenger Infrastructure Fund
DUET Group Securities
Hastings Diversified Utilities Fund
SP AusNet
Spark Infrastructure Group
Small Industrial (ex Top 50)
Echo Entertainment Group Limited
Transpacific Industries Group Ltd
62
9,656
136
261
134
91
874
83
525
11,822
730
337
237
502
1,806
145
551
1,766
713
147
779
4,101
62
181
243
0.1
12.5
0.2
0.3
0.2
0.1
1.1
0.1
0.7
15.3
0.9
0.4
0.3
0.7
2.3
0.2
0.7
2.3
0.9
0.2
1.0
5.3
0.1
0.2
0.3
Cash and Term Deposit
Total
2,147
77,217
2.7
100.0
* Includes market value of options written against holdings
15
Ironbark Capital Limited
ABN 89 008 108 227
Directors' report
For the year ended 30 June 2012
In respect of the financial year ended 30 June 2012, the directors of the Company submit the following report together with the
financial report of Ironbark Capital Limited ("the Company").
Directors in office at any time during or since the end of the financial year and up to the date of this report are:
M J Cole (Chairman)
R J Finley
I J Hunter
Period of directorship
Appointed 31/10/2002 to current
Appointed 30/01/1987 to current
Appointed 31/10/2002 to current
The directors have been in office since the start of the financial year to the date of this report.
Principal Activities
The principal activity of the Company during the year was investment in securities listed on the Australian Stock Exchange.
Dividends Paid or Recommended
Details of dividends in respect of the current year are as follows:
Interim Ordinary Dividend of 1.0c per share paid on 29th June 2012
Interim Ordinary Dividend of 0.8c per share paid on 9th February 2012
Interim Ordinary Dividend of 1.5c per share paid on 15th March 2011
Interim Ordinary Dividend of 2.0c per share paid on 21st September 2010
2012
$'000
1,416
1,132
2011
$'000
2,124
2,831
Since the end of the financial year, the directors declared a fully franked dividend of 0.5 cents per share payable on 28
December 2012.
Operating Results and Review of Operations for the Year
Gain before income tax expense
Income tax benefit/(expense)
Gain after income tax expense
1,033
758
1,791
10,258
(2,382)
7,876
The net tangible asset backing of the Company as at 30 June 2012 was 57.10 cents per share excluding the deferred tax
asset on unrealised investment losses (2011: 56.4 cents per share). This increase in net tangible asset per share is after the
payment of 1.8 cents per share in dividends.
Financial Position
The net assets of the Company have decreased by $0.7 million from 30 June 2011 to $79.6 million in 2012. This decrease has
largely resulted from depreciation in trading portfolio due to general decreases in investment markets.
Earnings per share
Basic and diluted gain per share (cents per share)
2012
1.27
2011
5.57
Significant changes in state of affairs
No significant changes in the Company's state of affairs occurred during the financial year.
Share buy-back
A special resolution was passed at the General Meeting held on 21st July 2011 where the Constitution of the company has
been entrenched with a requirement for the Directors to put a resolution to shareholders after 30 June 2014 and before 30
April 2015 offering to buyback all shares held by the Company shareholders in mid 2015 at a price equal to the net tangible
asset backing of the shares at the time, after deduction of transaction costs associated with the transaction.
16
Ironbark Capital Limited
ABN 89 008 108 227
Directors' report (continued)
For the year ended 30 June 2012
After Balance Date Events
Other than the dividend declared after year end as mentioned in the previous page, no matter or circumstance has arisen
since 30 June 2012 to the signing date of this report that has significantly affected, or may significantly affect:
(a) the Company's operations in future financial years; or
(b) the results of those operations in future financial years; or
(c) the Company's state of affairs in future financial years.
Environmental Issues
The Company's operations are not subject to any significant environmental regulations under either Commonwealth or State
legislation.
To the extent that any environmental regulations may have an incidental impact on the Company's operations, the Directors of
the Company are not aware of any breach by the Company of those regulations.
Future developments, Prospects and Business Strategies
The Company will continue to pursue its investment objectives for the long term benefit of the members. This will require
continual review of the investment strategies that are currently in place and may require changes to these strategies to
maximise returns.
Information on Directors
Director
Experience
Michael J Cole
B.Ec, M.Ec Sydney, F Fin
Investment manager
Investment banker
Ross J Finley
B.Comm NSW
Investment banker
Stockbroker
Special
responsibilities
Particulars of
directors' interest
in shares of the
company
Chairman
8,000,000
1,400,000
2,032,364
Ian J Hunter
B.A, LLB Sydney, MBA MGSM
Banking and
finance
Audit Committee
Chairman
Other current directorships
Ross J Finley is a Director of Century Australia Investments Ltd.
Ian Hunter is a Director of Rubik Financial Limited.
Michael Cole is the Chairman of Platinum Asset Management Limited; Chairman, IMB Ltd; Director, NSW Treasury Corp;
Chairman, Challenger Listed Investments Ltd.
The particulars of directors' interests in shares of the Company are as at the date of this report.
17
Ironbark Capital Limited
ABN 89 008 108 227
Directors' report (continued)
For the year ended 30 June 2012
Meetings of Directors of the Company
The following table sets out the numbers of meetings of the Company's directors held during the year ended 30 June 2012,
and the numbers of meetings attended by each director of the Company:
Board meetings
Number of
meetings held
Meetings
attended
Audit Committee meetings
Meetings
attended
Number of
meetings held
Michael J Cole
Ross J Finley
Ian J Hunter
4
4
4
4
4
4
2
2
2
2
2
2
Remuneration Committee meetings
Number of
meetings held
Meetings
attended
Nomination Committee meetings
Number of
meetings held
Meetings
attended
1
1
1
1
1
1
1
1
1
1
1
1
Michael J Cole
Ross J Finley
Ian J Hunter
Company Secretary
Mr Peter Roberts is a member of the Institute of Chartered Accountants and is the Company Secretary for a number of Listed
Investment Companies.
Remuneration Report and Policy
The Board determines the remuneration structure of Non-Executive Directors (based on the recommendation of
the
Remuneration Committee), having regard to the scope of the Company’s operations and other relevant factors including the
frequency of Board meetings as well as directors’ length of service, particular experience and qualifications. The Board makes
a recommendation to shareholders as to the level of Non-Executive Directors remuneration which is then put to shareholders
at the Annual General Meeting for approval.
As the Company does not provide share or option schemes to Directors and Executives, remuneration of Executives and Non-
executives is not explicitly linked to the Company’s performance. Notwithstanding this, Board members and Company
executives are subject to ongoing performance monitoring and regular performance reviews.
Directors' benefits
No Director of the Company has, since the end of the previous financial year, received or become entitled to receive a benefit,
other than a remuneration benefit as disclosed in the Director's Report, by reason of a contract made by the Company or a
related entity with the director or with a firm of which he is a member, or with a Company in which he has a substantial interest.
Options
No options over issued shares or interests in the Company were granted during the financial year and there were no options
outstanding at the end of this report.
Audit committee
The Audit Committee consists of Mr Ian Hunter, Mr Michael Cole and Mr Ross Finley. The Chairman is Mr Ian Hunter, who is
not the Chairman of the Board.
18
Ironbark Capital Limited
ABN 89 008 108 227
Directors' report (continued)
For the year ended 30 June 2012
Company Executives' Remuneration
For the year ended 30 June 2012
Ross J Finley
Michael J Cole (Chairman)
Ian J Hunter
For the year ended 30 June 2011
Ross J Finley
Michael J Cole (Chairman)
Ian J Hunter
Base fee
$
Superannuation
$
Total
$
20,000
20,000
20,000
60,000
20,000
20,000
20,000
60,000
-
-
-
-
-
-
-
-
20,000
20,000
20,000
60,000
20,000
20,000
20,000
60,000
Directors are paid a maximum remuneration of $20,000 each per annum.
Mr Peter Roberts, Company Secretary, is a shareholder and employee of White Outsourcing Pty Ltd. During the year White
Outsourcing Pty Ltd received fees exclusive of RITC of $64,721 (2011: $67,003) for the administration of the Company, out of
which costs of accounting, administration and Company Secretarial are paid.
Insurance of directors
During the year ended 30 June 2012, the Company paid liability insurance premiums relating to directors'
insurance. The
Directors have not included details of the nature of the liabilities covered or the amount of premium paid in respect of the
directors' and officers' liability and legal expense's insurance contracts, as such disclosure is prohibited under the terms of the
contract.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of
the Company, or to 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 part of those proceedings. No proceedings have been brought against or intervened in on
behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001 .
Non-Audit Services
The Directors of
Corporations Act 2001 has been met as there has been no provision of non-audit services by the external auditor.
the Company are satisfied that
the general standard of
independence for auditors imposed by the
Rounding of amounts
The Company is of a kind referred to in Class Order 98/100 issued by the Australian Securities & Investment Commission,
relating to the "rounding off" of amounts in the directors' report and financial statements to the nearest $1,000 or in certain
cases to the nearest dollar. Amounts have been rounded off in the directors' report and financial statements in accordance
with this class order.
Auditor's Independence Declaration
Independence declaration for the year ended 30 June 2012 has been received and can be found on page 20.
This report is made in accordance with a resolution of the Directors of the Company.
M J Cole
Director
Dated at Sydney this 22nd day of August 2012
19
Ironbark Capital Limited
ABN 89 008 108 227
Statement of comprehensive income
For the year ended 30 June 2012
Notes
2012
$'000
2011
$'000
3
4
Investment income from trading portfolio
Revenue from trading portfolio
Net unrealised (losses)/gains in the net fair value of investments
Realised gains on sale of investments
Total investment income from trading portfolio
Other income
Other income
Total other income
Total income
Expenses
Investment manager's fees
Audit fees
Share registry fees
Directors fees
ASX listing and other fees
Accounting and company secretarial fees
Custody fees
Tax fees
Legal fees
Brokerage expense
Futures and options expenses
Other (including insurances)
Total expenses
Profit before income tax benefit/(expense)
Income tax benefit/(expense)
5(a)
Profit after income tax benefit/(expense) attributable to members
of Ironbark Capital Limited
Other comprehensive income
Total comprehensive income
Basic and diluted earnings per share
18
4,649
(4,624)
1,866
1,891
32
32
4,231
3,784
3,201
11,216
9
9
1,923
11,225
(526)
(34)
(50)
(60)
(38)
(65)
(28)
(13)
(2)
(21)
(21)
(32)
(890)
1,033
758
1,791
-
1,791
Cents
1.27
(521)
(34)
(70)
(60)
(35)
(67)
(30)
(16)
(16)
(50)
(34)
(34)
(967)
10,258
(2,382)
7,876
-
7,876
Cents
5.57
The above Statement of comprehensive income should be read in conjunction with the accompanying notes to the financial
statements.
21
Ironbark Capital Limited
ABN 89 008 108 227
Statement of financial position
As at 30 June 2012
Current assets
Cash assets
Trade and other receivables
Trading portfolio (held for trading)
Current tax assets
Other
Total current assets
Non- current assets
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Current tax liabilities
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Retained earnings/(accumulated losses)
Total equity
Notes
12(b)
6
7
5(f)
8
5(e)
9
5(c)
5(d)
10
11
2012
$'000
2011
$'000
2,147
697
75,070
7
21
77,942
1,816
1,816
6,249
496
72,978
13
22
79,758
959
959
79,758
80,717
102
57
159
14
14
173
374
-
374
1
1
375
79,585
80,342
80,156
(571)
79,585
80,156
186
80,342
The above Statement of financial position should be read in conjunction with the accompanying notes
to the financial statements.
22
Ironbark Capital Limited
ABN 89 008 108 227
Statement of changes in equity
For the year ended 30 June 2012
Balance at 1 July 2010
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Share
Capital
$'000
80,239
-
-
-
Retained
Earnings
$'000
(2,735)
7,876
-
Total
$'000
77,504
7,876
-
7,876
7,876
Dividends paid
Buy back of shares
-
(83)
(4,955)
-
(4,955)
(83)
Balance at 30 June 2011
80,156
186
80,342
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Dividends paid
-
-
-
-
1,791
-
1,791
-
1,791
1,791
(2,548)
(2,548)
Balance at 30 June 2012
80,156
(571)
79,585
The above Statement of changes in equity should be read in conjunction with the accompanying notes to the financial
statements.
23
Ironbark Capital Limited
ABN 89 008 108 227
Statement of cash flows
For the year ended 30 June 2012
Cash flows from operating activities
Proceeds from sale of trading portfolio
Purchase of trading portfolio
Dividends & trust distributions received
Interest received
Other income received
Investment manager's fees paid
Income tax paid
Other expenses paid
Net cash used in operating activities
Cash flows from financing activities
Dividends paid
Share buy back
Net cash used in financing activities
Net decrease in cash held
Cash at the beginning of the financial year
Cash at the end of the financial year
Non-cash financial activities
Dividends paid by DRP
Notes
12(a)
12(b)
2012
$'000
38,036
(43,235)
4,466
77
31
(527)
(24)
(378)
(1,554)
(2,548)
-
(2,548)
(4,102)
6,249
2,147
-
-
2011
$'000
46,907
(55,153)
3,997
197
9
(518)
-
(365)
(4,926)
(4,955)
(106)
(5,061)
(9,987)
16,236
6,249
-
-
The above Statement of cash flows should be read in conjunction with the accompanying notes to the financial statements.
24
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the financial statements
For the year ended 30 June 2012
1
2
(a)
Reporting Entity
Ironbark Capital Limited is a company domiciled in Australia. The Company's registered office is Level 7, 20 Hunter
Street, Sydney NSW, 2000 . The financial statements of Ironbark Capital Limited are for the year ended 30 June 2012.
The Company is primarily involved in making investments and deriving revenue and investment income from listed
securities and unit trusts in Australia.
Summary of Significant Accounting Policies
Basis of Accounting
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 in
Australia.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial
statements containing relevant and reliable information about transactions, events and conditions. Compliance with
Australian Accounting Standards ensures that
the financial statements and notes also comply with International
Financial Reporting Standards.
The financial statements cover Ironbark Capital Limited which is a listed public company, incorporated and domiciled in
Australia. The financial statements have been prepared on an accruals basis, with the exception of valuation of
investments as described in Note 2(b) below.
The Statements are prepared from the records of the Company on an accrual basis and are based on historical costs
modified by the revaluation of selected financial assets and financial
liabilities for which the fair value basis of
accounting has applied. The directors revalue the trading portfolio on a daily basis.
The following is a summary of the material accounting policies adopted by the Company in the preparation of the
financial statements. The accounting policies have been consistently applied, unless otherwise stated.
(b)
Trading Portfolio
(i) Classification
The trading portfolio comprises securities held for short term trading purposes, including exchange traded option
contracts that are entered into, as described in Note 2(c) below. The purchase and the sale of securities are accounted
for at the date of trade. Trade date accounting is adopted for financial assets that are delivered within timeframes
established by market place convention.
Securities in the trading portfolio are classified as "assets measured at fair value through profit or loss".
(ii) Recognition
Financial instruments incorporating financial assets and financial liabilities are initially measured at fair value on trade
date, which excludes transaction costs on trade date, where the related contractual rights or obligations exist.
Transaction costs are expensed to the profit and loss immediately. Trade date accounting is adopted for financial
assets that are delivered within time frames established by market place conventions. Subsequent to initial recognition
these instruments are measured as set out below.
Realised and unrealised gains and losses arising from changes in the fair value of these assets are included in the
statement of comprehensive income in the period which they arise.
(iii) Valuation of trading portfolio
Securities are classified as held for trading financial assets as acquired principally for the purpose of selling in the short
term or if so designated by management and within the requirements of AASB139: Recognition and Measurement of
Financial Instruments.
(iv) Valuation of options written portfolio
Options are initially brought to account at the amount received upfront for entering the contract (the premium) and
subsequently revalued to current market value. Increments and decrements are taken through the statement of
comprehensive income.
25
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the financial statements (Continued)
For the year ended 30 June 2012
2
Summary of Significant Accounting Policies (Continued)
(v) Income from holdings of securities
Distributions relating to listed securities are recognised as income when those securities are quoted in the market on
an ex-distribution basis unless the distributions are capital returns on ordinary shares in which case the amount of the
distribution is treated as an adjustment to the carrying value of the shares.
The realised gain or loss on options written is not recognised until the option expires, is exercised or is repurchased
from the holder. All unrealised gains or losses which represents movements in the market value of the options are
recognised through the statement of comprehensive income.
Interest revenue on listed securities is recognised on the ex date, taking into account the effective yield on the financial
asset. Interest revenue on cash deposits is recognised as it accrues.
(vi) Determination of Fair Value
AIFRS defines fair value for the purpose of valuing holdings of securities that are listed or traded on an exchange to be
based on quoted "bid" prices for securities prevailing at the close of business on the balance date. AASB 139 and
AG72 states that the current bid price is usually the appropriate price to be used in measuring the fair value of actively
traded financial assets. Financial assets should be valued at their fair value without any deduction for transaction costs
that may be incurred on sale or other disposal. Certain costs in acquiring investments, such as brokerage and stamp
duty are expensed in the statement of comprehensive income.
(c)
Current Assets - Trading Portfolio
The Company enters into option contracts in the trading portfolio for the purpose of enhancing returns, offsetting risk or
providing opportunities to acquire or sell securities at advantage prices.
As at balance date there were call options outstanding which potentially required the Company, if they were exercised,
to deliver securities to the value of $1.1 million (30 June 2011: $1.4 million) held by the Company in its trading portfolio.
(d)
Income to Pay Dividends
In accordance with the Corporations Act 2001 , the Company may pay a dividend where the Company's assets exceed
its liabilities, the payment of the dividend is fair and reasonable to the Company's shareholders as a whole and the
payment of the dividend does not materially prejudice the Company's ability to pay its creditors.
It is the Directors’ policy to only pay fully franked dividends and to distribute the majority of franking credits received
each year. Franking credits are generated by receiving fully franked dividends from shares held in the Company's
investment portfolio, and from the payment of corporate tax on its other investment income, namely share option
premiums, unfranked income and net realised gains.
A provision for dividends payable is recognised in the reporting period in which dividends are declared, for the entire
undistributed amount, regardless of the extent to which they will be paid in cash.
26
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the financial statements (Continued)
For the year ended 30 June 2012
2
Summary of Significant Accounting Policies (Continued)
(e)
Taxation
The income tax expense/(benefit) for the year comprises current
expense/(benefit).
income tax expense/(benefit) and deferred tax
Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities
(assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the
year as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax relates to
items that are recognised outside profit or loss.
No deferred income tax is recognised from the initial recognition of an asset or liability, excluding a business
combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset
is realised or the liability is settled and their measurement also reflects the manner in which management expects to
recover or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against which the benefits of the deferred tax assets can be utilised.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax
assets and liabilities are offset where: (a) a legally enforceable right of set-off exists; and (b) the deferred tax assets
and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different
taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective
assets and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are
expected to be recovered or settled.
Trading Portfolio
A tax provision is made for the unrealised gain or loss on securities valued at fair value through the statement of
comprehensive income.
Where the Company disposes of such securities, tax is calculated on gains made according to the particular parcels
allocated to the sale for tax purposes offset against any losses carried forward.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with bank, other short-term highly liquid
investments with original maturities of three months or less, and bank overdrafts.
For the purposes of the statement of cash flows, cash includes deposits held at call with financial institutions net of
bank overdrafts.
Trade and Other Receivables
Trade and other receivables may include amounts for dividends,
interest and securities sold. Dividends and
distributions are brought to account when the Company's right to receive a dividend is established. Interest revenue is
recognised as it accrues taking into account the effective yield on the financial asset. Amounts received for securities
sold are recorded when a sale has occurred. Amounts are generally received within 30 days of being recorded as a
receivable.
(f)
(g)
27
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the financial statements (Continued)
For the year ended 30 June 2012
2
Summary of Significant Accounting Policies (Continued)
(h)
(i)
(j)
(k)
(l)
(m)
(n)
Revenue Recognition
• Trading Income - profits and losses realised from the sale of investments and unrealised gains and losses on
securities held at fair value are included in the statement of comprehensive income in the year they are incurred.
• Dividend Income - dividends and distributions are brought to account when the right to receive a dividend has been
established.
• Interest Income - interest income is recognised as it accrues, taking into account the effective yield on the financial
asset.
• Other Income - other revenue is recognised to the extent that it is probable that the economic benefits will flow to the
Company and when the revenue can be reliably measured.
Trade and Other Payables
Trade and other payables represent liabilities for goods and services provided to the Company prior to the end of the
financial year which are unpaid at the reporting date. Payables are unsecured and are usually paid within 30 days of
recognition.
Derivative Financial Instruments
The Company may invest in financial derivatives. Derivative financial instruments are accounted for on the same basis
as the underlying investment exposure. Gains and losses relating to derivatives are included in investment income as
part of realised or unrealised gains and losses on investments.
Earnings/(Loss) per Share
Basic and diluted earnings/(loss) per share is determined by dividing the operating result after income tax by the
weighted average number of ordinary shares on issue during the financial year, adjusted for any bonus element.
Goods and Services Tax (GST)
Revenue, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is
not recoverable from the Australian Tax Office.
In these circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial
position are shown inclusive of GST. Cash flows are presented in the statement of cash flows on a gross basis. The
GST components of cash flows arising from investing activities which are recoverable from/or payable to the ATO are
classified in the cash flows from operating activities.
Contributed Equity
Ordinary shares are classified as equity.
are shown in equity as a deduction, net of tax, from the proceeds.
Incremental costs directly attributable to the issue of new shares or options
Adoption of New and Revised Accounting Standards
Certain new accounting standards and interpretations have been published that are not mandatory for the 30 June
2012 reporting period. The Directors' assessment of the impact of these standards (to the extent relevant to the Fund)
and interpretations is set out below:
(i) AASB 9 Financial Instruments and AASB 2009-11 Amendments to Australian Accounting Standards arising from
AASB 9 and AASB 2010 Amendment to Australian Accounting Standards arising from AASB 9 (December 2010)
(effective from 1 January 2013)
fair value gains and losses in other comprehensive income if
AASB 9 Financial Instruments addresses the classification, measurement and derecognition of financial assets and
financial liabilities. The standard is not applicable until 1 January 2013 but is available for early adoption. AASB 9
permits the recognition of
they relate to equity
investments that are not traded. The Directors are intending to early adopt AASB 9 Financial Instruments from 1 July
2012. This change will see assets classified as “available for sale” which better reflects the longer term investment
style of the manager than the “held for trading” classification adopted under the current accounting standard. This
reclassification will see all price movements on investments (both realised and unrealised movements) reflected
directly in reserves rather than through the current year profit and loss. Had this treatment under AASB 9 been adopted
in the year to 30 June 2012, unrealised losses of $4,624,000 and realised gains of $1,866,000 would have been
recorded as separate items in Other Comprehensive Income, and taken to reserves, rather than as line items in the
Statement of Comprehensive Income. This change would not have affected net assets.
28
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the financial statements (Continued)
For the year ended 30 June 2012
2
Summary of Significant Accounting Policies (Continued)
(ii) Revised AASB 124 Related Party Disclosures and AASB 2009-12 Amendments to Australian Accounting
Standards (effective from 1 January 2011).
In December 2009 the AASB issued a revised AASB 124 Related Party Disclosures . It is effective for accounting
periods beginning on or after 1 January 2011 and must be applied retrospectively. The amendment clarifies and
simplifies the definition of a related party and removes the requirement for government-related entities to disclose
details of all transactions with the government and other government-related entities. The Company applied the
amended standard from 1 July 2011. The amendments did not have any effect on the Company's financial statements.
(iii) AASB 2010-6 Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial Assets
(effective for annual reporting periods beginning on or after 1 July 2011).
In November 2010, the AASB issued AASB 2010-6 Disclosures on Transfers of Financial Assets which amends AASB
1 First-time Adoption of Australian Accounting and AASB 7 Financial Instruments: Disclosures to introduce additional
disclosures in respect of risk exposures arising from transferred financial assets. The amendments will affect
particularly entities that sell,
lend or otherwise transfer financial assets to other parties. The
amendments will not have any impact on the Company's disclosures. The Company applied the amendment from 1
July 2011.
factor, securitise,
(iv) AASB 1053 Application of Tiers of Australian Accounting Standards and AASB 2010-2 Amendments to Australian
Accounting Standards arising from Reduced Disclosure Requirements (effective from 1 July 2013)
On 30 June 2010 the AASB officially introduced a revised differential reporting framework in Australia. Under this
framework, a two-tier differential reporting regime applies to all entities that prepare general purpose financial
statements. The Company is listed on the ASX and is not eligible to adopt the new Australian Accounting Standards –
Reduced Disclosure Requirements. The two standards will therefore have no impact on the financial statements of the
entity.
(v) AASB 2010-8 Amendments to Australian Accounting Standards – Deferred Tax: Recovery of Underlying Assets
(effective from 1 January 2012)
In December 2010, the AASB amended AASB 112 Income Taxes to provide a practical approach for measuring
deferred tax liabilities and deferred tax assets when investment property is measured using the fair value model. AASB
112 requires the measurement of deferred tax assets or liabilities to reflect the tax consequences that would follow
from the way management expects to recover or settle the carrying amount of the relevant assets or liabilities, that is
through use or through sale. The amendment introduces a rebuttable presumption that investment property which is
measured at fair value is recovered entirely by sale. The Company will apply the amendment from 1 July 2012. It is
currently evaluating the impact of the amendment.
(vi) AASB 13 Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards arising
from AASB13 (effective 1 January 2013).
AASB 13 was released in September 2011. It explains how to measure fair value and aims to enhance fair value
disclosures. Application of the new standard will impact the type of information disclosed in the notes to the financial
statements. The Company does not intend to adopt the new standard before its operative date, which means that it
would be first applied in the annual reporting period ending 30 June 2014.
There are no other standards that are not yet effective that are expected to have a material impact on the Company in
the current or future reporting periods and on foreseeable future transactions.
(o)
(p)
(q)
Functional and Presentation Currency
The functional and presentation currency of the Company is Australian Dollars.
Operating Segments
The Company operated in Australia only and the principal activity is investment.
Fair Value of Financial Assets and Liabilities
The fair value of cash and cash equivalents, and non-interest bearing monetary financial assets and liabilities of the
Company approximates their carrying value. The fair value for assets that are actively traded on market is defined by
AASB 139 as 'last bid price'.
29
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the financial statements (Continued)
For the year ended 30 June 2012
2
(r)
Summary of Significant Accounting Policies (Continued)
Critical Accounting Estimates and Judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectation of future events that may have a financial
impact on the entity and that are believed to be
reasonable under the circumstances.
The Company has recognised deferred tax assets relating to carried forward tax losses to the extent there are sufficient
taxable temporary differences (deferred tax liabilities) relating to the same taxation authority against which the unused
tax losses can be utilised. However, utilisation of the tax losses also depends on the ability of the entity to satisfy
certain tests at the time the losses are recouped. There are some concerns that the entity may fail to satisfy the
continuity of ownership test and therefore has to rely on the same business test. If the entity fails to satisfy the test,
carried forward losses of nil (2011: $563,379) that are currently recognised as deferred tax asset would have to be
written off to income tax expense.
3
Revenue from Trading Portfolio
Dividends and trust distributions
Interest
4
Auditor's Remuneration
Amounts received and receivable, by
the auditor of the company for:
MNSA Pty Ltd Auditing or reviewing the accounts
PWC Audit report of custodian statement
5
(a)
Income Tax (Benefit)/Expense
Income tax expense recognised in the Statement of comprehensive
income
Current income tax expense
Deferred tax (benefit)/expense relating to the origination
and reversal of temporary differences
Total income tax (benefit)/expense
(b)
Income tax (benefit)/expense
The prima facie income tax expense on pre-tax accounting
profit reconciles to income tax (benefit)/expense as follows:
Prima facie income tax expense
calculated at 30% on the operating profit
Imputation gross up on dividends received
Franking credits on dividends received
Temporary differences
Over provision in prior year
Realised taxable investment gain/(loss)
Realised accounting investment gain/(loss)
Income tax (benefit)/expense
2012
$'000
4,529
120
4,649
26
8
34
644
(1,402)
(758)
310
450
(1,500)
(41)
(40)
623
(560)
(758)
2011
$'000
4,049
182
4,231
30
4
34
1,291
1,091
2,382
3,077
295
(983)
(49)
(27)
(960)
1,029
2,382
The applicable weighted average effective tax rates are as follows:
-73.39%
23.22%
30
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the financial statements (Continued)
For the year ended 30 June 2012
5
(c)
(d)
(e)
(f)
Income Tax (Benefit)/Expense (Continued)
Current tax liabilities
Income tax payable
Deferred tax liabilities
Provision for deferred income tax comprises the estimated expense
at current income tax rates of 30% on the following item:
Interest
Deferred tax assets
Provision for deferred tax assets comprises the estimated benefit at
current income tax rates of 30% on the following items:
Provision for income tax on unrealised losses on investments
Carry forward tax losses
Current tax assets
Current tax assets comprises the estimated expense at
current income tax rates on the following items:
Expenses not deductible in the current year
(g)
Reconciliation
The overall movement in the deferred tax account is as follows:
Opening balance
(Charges)/credit to statement of comprehensive income
Changes to equity
Closing balance
Trade and Other Receivables
Current
Accrued interest and dividends
Unsettled trades
Receivables are non-interest bearing and unsecured.
2012
$'000
2011
$'000
57
14
1,816
-
1,816
-
1
395
564
959
7
13
971
838
-
1,809
603
94
697
3,352
(2,381)
-
971
496
-
496
Outstanding settlements are on the terms operating in the securities industry, which usually require settlement within
three days of the date of a transaction.
The credit risk exposure of the Company in relation to receivables is the carrying amount.
Trading Portfolio
Listed equities at fair value
Units in listed property trusts at fair value
Floating rate notes at fair value - listed
64,749
1,805
8,516
75,070
66,940
1,712
4,326
72,978
The fair value of the trading portfolio equals the market value of the trading portfolio.
Credit risk exposures of the Company arise in relation to floating rate notes to the extent of their carrying values, in the
event of a shortfall on winding up the issuing companies.
Term deposits are held with St George Bank which is rated AA-/A-1+ by Standard and Poors.
Other Assets
Current
GST receivable
Prepayments
17
4
21
18
4
22
31
6
7
8
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the financial statements (Continued)
For the year ended 30 June 2012
9
Trade and Other Payables
Current
Trade creditors
Unsettled trades
Payables are non-interest bearing and unsecured.
2012
$'000
102
-
102
2011
$'000
119
255
374
Unsettled trades are on the terms operating in the securities industry, which usually require settlement within three
days of the date of a transaction.
10
Contributed Equity
2012
2011
Ordinary shares
No.'000
141,560
$'000
No.'000
$'000
80,156
141,560
80,156
Movements in ordinary contributed equity of the Company were as follows:
(a)
(b)
Opening balance
Bought back under on-market share buy
back
Closing balance
On market share buy back
No.'000
141,560
-
141,560
2012
2011
$'000
No.'000
$'000
80,156
141,751
80,239
-
80,156
(191)
141,560
(83)
80,156
For financial year ended 30 June 2012, the Company bought back nil (2011: 190,978) shares under an on market share buy
back.
Dividend reinvestment plan
Under the Company's dividend reinvestment plan, additional shares are allotted at a price calculated at 97.5% of the weighted
average share price. The DRP is currently suspended and as such,
there were no shares issued under the dividend
reinvestment plan during the year.
Terms and conditions
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, otherwise each member present at a meeting or by proxy has one vote on a show of hands. In
the event of winding up the Company ordinary shareholders rank after creditors and are fully entitled to any proceeds of
liquidation.
(c)
Capital Management
The Board's policy is to maintain a strong capital base so as to maintain investor and market confidence.
To achieve this the Board of Directors monitor the monthly NTA results, investment performance, the Company's management
expense ratio (MER) and share price movements.
There were no additional shares issued during the financial year.
The Company announced to the market in November 2009 the introduction of an on-market share buy-back of approximately
10% of the Company shares, to be conducted over a 12 month period, details of shares bought back are included in note 10
(b).
The Company is not subject to any externally imposed capital requirements.
11
Retained Earnings
Balance at the beginning of the financial year
Net profit for the current year
Dividends paid and payable
Balance at the end of the financial year
32
2012
$'000
186
1,791
1,977
(2,548)
(571)
2011
$'000
(2,735)
7,876
5,141
(4,955)
186
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the financial statements (Continued)
For the year ended 30 June 2012
12
(a)
Statement of cash flows
Reconciliation of net profit from ordinary activities after income tax to net
cash provided by/used in operating activities
Gain from ordinary activities after income tax expense/benefit
Unrealised losses/(gains) in the net fair value of investments
Realised gains on sale of investments
Change in operating assets and liabilities:
Increase in accrued interest and dividends
Decrease/(increase) in other current assets
Increase in trading portfolio
Increase/(decrease) in trade creditors
Increase/(decrease) in tax liabilities
Net cash used in operating activities
2012
$'000
1,791
4,624
(1,866)
(107)
1
(5,199)
(17)
(781)
(1,554)
2011
$'000
7,876
(3,784)
(3,201)
(37)
(3)
(8,195)
37
2,381
(4,926)
(b)
Components of cash
Cash at bank
2,147
6,249
The credit risk of the Company in relation to cash is the carrying amount and any unpaid interest. Cash investments
are made with JP Morgan which is rated A+/A-1 by Standards & Poors.
13
Dividends
Interim Dividend - Fully franked
Interim Dividend - Fully franked
Interim Dividend - Fully franked
Interim Dividend - Fully franked
Date of
payment
29/06/2012
9/02/2012
15/03/2011
21/09/2010
2012
$'000
1,416
1,132
2011
$'000
2,124
2,831
Since the end of the financial year, the directors declared a fully franked dividend of 0.5 cents per share payable on 28
December 2012.
Franking Account
Opening balance of franking account
Franking credits on dividends received
Tax paid / received during the year
Franking credits on ordinary dividends paid
Closing balance of franking account
Adjustments for tax payable/refundable in respect of the current year’s
profits and the receipt of accrued dividends
Impact on the franking account of dividends proposed or declared before the
financial report authorised for issue but not recognised as a distribution to
equity holders during the year
No unfranked dividends have been declared or paid during the year.
477
1,498
24
(1,092)
907
1,617
983
-
(2,123)
477
228
152
(303)
832
-
629
33
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the financial statements (Continued)
For the year ended 30 June 2012
14
(a)
Related party information
Key management personnel
The names of the persons who were the key management personnel of the Company during the financial year were:
Michael J Cole (Chairman, Director)
Ross J Finley (Director)
Ian J Hunter (Director)
(b)
Key management personnel remuneration
Details of the remuneration of Ironbark Capital key management personnel and their related entities is set out as
below:
Short-term
Employee
Benefit
Cash Salary &
Fees
$
60,000
60,000
Post-Employment
Benefit
Other Benefit
Superannuation
$
Other
$
-
-
-
-
Total
$
60,000
60,000
2012
2011
Detailed remuneration disclosures are provided in the remuneration report in the Directors' Report.
The Remuneration Committee of the Board of Directors of Ironbark Capital Ltd is responsible for determining and
reviewing compensation arrangements for the directors. The Remuneration Committee assesses the appropriateness
of the nature and amount of emoluments of each director on a periodic basis by reference to workload and market
conditions. The overall objective is to ensure maximum stakeholder benefit from the retention of a high quality board
whilst constraining costs.
(c )
Shareholdings of key management personnel (and their related entities)
2012
Ordinary Shares
Michael J Cole (Chairman)
Ross J Finley
Ian J Hunter
2011
Ordinary Shares
Michael J Cole (Chairman)
Ross J Finley
Ian J Hunter
Balance at
1 July 2011
Shares acquired/
(disposed)
Balance at
30 June 2012
8,000,000
1,400,000
1,662,448
11,062,448
-
-
369,916
369,916
8,000,000
1,400,000
2,032,364
11,432,364
Balance at
1 July 2010
Shares acquired
/ (disposed)
Balance at
30 June 2011
7,983,737
1,400,000
1,662,448
11,046,185
16,263
-
-
16,263
8,000,000
1,400,000
1,662,448
11,062,448
Directors' transactions on ordinary shares are on the same terms and conditions applicable to ordinary members.
There were no shares granted during the reporting period as compensation.
15
Segment information
The Company has only one reportable segment. The Company operates predominantly in Australia and in one industry
being the securities industry, deriving revenue from dividend income, interest income and from the sale of its trading
portfolio.
34
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the financial statements (Continued)
For the year ended 30 June 2012
16
Financial risk management
The Company's financial instruments consist mainly of deposits with banks, trading portfolio, accounts receivable and
payables. The Company's activities expose it to a variety of financial risks: market risk (including price risk and interest
rate risk), credit risk and liquidity risk.
(i) Credit risk
The standard defines this as the risk that one party to a financial instrument will cause a financial loss for the other
party by failing to discharge an obligation.
Credit risk is managed as provided in Note 6 with respect to receivables, Note 7 with respect to floating rate note
investments and Note 12 with respect to cash assets. None of these assets are over-due or considered to be
impaired.
(ii) Liquidity risk
Liquidity risk is defined as the risk that an entity will encounter difficulty in meeting obligations associated with financial
liabilities.
The Investment Manager monitors cash flow requirements daily in relation to the trading account taking into account
upcoming dividends, tax payments and trading activity.
The Company's inward cash flows depend upon the level of dividend and distribution revenue received. Should these
decrease by a material amount, the Company would amend its outward cash flows accordingly. As the Company's
major cash outflows are the purchase of securities and dividends paid to shareholders, the level of both of these is
managed by the Board and Investment Manager.
Furthermore, the assets of the Company are largely in the form of readily tradeable securities which can be sold on-
market if necessary.
The table below analyses the Company's non-derivative financial liabilities in relevant maturity groupings based on the
remaining period to the earliest possible contractual maturity date at the year end date. The amounts in the table are
contractual undiscounted cash flows.
At 30 June 2012
Trade and other payables
Current tax liabilities
Total financial liabilities
At 30 June 2011
Trade and other payables
Current tax liabilities
Total financial liabilities
Less than
1 month
$'000
More than
1 month
$'000
Total
102
-
102
374
-
374
-
57
57
-
-
-
102
57
159
374
-
374
The Fund does not have net settled derivative financial instruments in a loss position.
(iii) Interest rate risk
The Company's interest bearing financial assets expose it to risks associated with the effects of fluctuations in the
prevailing levels of market interest rates on its financial position and cash flows.
Sensitivity analysis - interest rate risk
An increase of 75 basis points in interest rates as at the reporting date (assuming a flat tax rate of 30 per cent) would
have increased the Company's equity and revenue from trading portfolio by $11,272 (2011: $32,807). A decrease of 75
basis points would have an equal but opposite effect.
35
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the financial statements (Continued)
For the year ended 30 June 2012
16
Financial risk management (Continued)
(iv) Market risk
The standard defined this as the risk that the fair value of future cash flows of a financial instrument will fluctuate
because of changes in market prices.
By its nature as a Listed Investment Company that invests, the Company can never be free of market risk as it invests
its capital in securities which are not risk free - the market price of these securities can fluctuate.
A general fall in market prices of 5 per cent and 10 per cent, if spread equally over all assets in the investment portfolio
would lead to a reduction in the Company's equity of $2.6 million (2011: $2.6 million) and $5.3 million (2011: $5.1
million) respectively, assuming a flat tax rate of 30 per cent.
The Company seeks to manage and constrain market risk by diversification of the investment portfolio across multiple
stocks and industry sectors. The Manager of
the investment portfolio has been granted specific risk tolerance
boundaries as set out in the Investment Management Agreement.
The Company's investment sector as at 30 June is as below:
Consumer discretionary
Energy
Financials
Healthcare
Industrials
Materials
Property trust
Telecommunications services
Utilities
Corporate floating rate notes
2012
%
0.08
2.15
51.57
2.64
2.61
13.60
2.41
8.33
5.27
11.34
100.00
2011
%
0.07
2.72
55.14
2.72
4.28
19.22
2.35
3.41
4.16
5.93
100.00
Securities representing over 5 per cent of the investment portfolio at 30 June 2012 were:
BHP Billiton Ltd
Commonwealth Bank Perls III, Perls IV & Perls V
Telstra Corporation Limited
Westpac- Preferred Securities
ANZ Banking Group Ltd - Convertible Preference Shares
Commonwealth Bank of Australia Limited
%
12.5
10.6
8.1
6.2
5.9
5.7
No other security represents over 5 per cent of the Company's trading portfolio.
The Company is also not directly exposed to currency risk as all its investments are quoted in Australian dollars.
36
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the financial statements (Continued)
For the year ended 30 June 2012
16
Financial risk management (Continued)
(v) Derivative financial instruments
A derivative is a financial contract whose value depends on, or is derived from, underlying assets, liabilities or indices.
Derivative transactions include a wide assortment of instruments, such as forwards, futures, options and swaps.
Derivatives are considered to be part of the investment process. The use of derivatives is an essential part of proper
portfolio management. Derivatives are not managed in isolation. Consequently, the use of derivatives is multi-faceted
and includes:
hedging to protect an asset of the company against a fluctuation in market values or to reduce volatility;
(i)
(ii) as a substitute for physical securities; and
(iii) adjustment of asset exposures within the parameters set out in the investment strategy.
Derivative financial instruments require no initial net investment or an initial net investment that is smaller than would
be required for other types of contracts that would be expected to have a similar response to changes in market
factors.
The Company holds the following derivative instruments:
Options
An option is a contractual arrangement under which the seller (writer) grants the purchaser (holder) the right, but not
the obligation, either to buy (a call option) or sell (a put option) at or by a set date or during a set period, a specific
instrument at a predetermined price. The seller receives a premium from the
amount of securities or a financial
purchaser in consideration for the assumption of future securities price. Options held are exchange-traded.
At year end, the notional principal amounts of derivatives held by the Company were as follows:
Notional
principal
amounts
2012
$'000
Notional
principal
amounts
2011
$'000
Australian exchange traded options
1,137
1,360
Fair value hierarchy
AASB 7 requires the Company to classify fair value measurements using a fair value hierarchy that reflects the
subjectivity of the inputs used in making the measurements. The fair value hierarchy has the following levels:
Level 1 - Quoted prices (unadjusted) 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 (that is, as prices) or indirectly (that is, derived from prices).
Level 3 - Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).
The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined
on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose,
the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement
uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a level
3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires
judgement, considering factors specific to the asset or liability.
The determination of what constitutes ‘observable’ requires significant judgement by the Directors. The Directors
consider observable data to be that market data that is readily available, regularly distributed or updated, reliable and
verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.
37
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the financial statements (Continued)
For the year ended 30 June 2012
16
Financial risk management (Continued)
Fair value hierarchy (continued)
The table below sets out the Company’s financial assets and liabilities (by class) measured at fair value according to
the fair value hierarchy.
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
At 30 June 2012
Trading portfolio (held for trading)
Total
At 30 June 2011
Trading portfolio (held for trading)
Total
75,070
75,070
72,978
72,978
-
-
-
-
-
-
-
-
75,070
75,070
72,978
72,978
Investments whose values are based on quoted market prices in active markets, and therefore classified within level 1,
include active listed equities, certain unlisted unit trusts and exchange traded derivatives.
Financial instruments that trade in markets that are not considered to be active but are valued based on quoted market
prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within level 2. The
Company has no investments that are classified within level 2.
Investments classified within level 3 have significant unobservable inputs, as they are infrequently traded. The
Company has no investments that are classified within level 3.
17
Events after the Statement of financial position date
Other than the dividend declared after year end as mentioned in Note 13, no significant events have occurred since the
reporting date which would impact on the financial position of the Company as disclosed in the Statement of Financial
Position as at 30 June 2012 and the results and cash flows of the Company for the year ended on that date. The
financial report was authorised for issue on 22 August 2012 by the Board of Directors.
18
Earnings per share
Basic and diluted earnings/(loss) per share (cents per share)
2012
1.27
2011
5.57
Weighted average number of ordinary shares outstanding used in the
calculation of basic earnings per share
141,559,525
141,566,636
Diluted earnings per share is the same as basic earnings per share. The Company has no securities outstanding which
have the potential to convert to ordinary shares and dilute the basic earnings per share.
19
Contingent liabilities
The Investment Management Agreement entered into by the Company with Kaplan Funds Management states that
either party will be entitled to give the other no less than 12 months written notice of termination of the agreement.
No other contingent liabilities existed at 30 June 2012.
20
Other information
Ironbark Capital Limited, incorporated and domiciled in Australia, is publicly listed and limited by shares.
The registered office and principal place of business of the Company is:
Level 7, 20 Hunter Street
Sydney NSW 2000
Telephone (02) 8236 7701
38
Ironbark Capital Limited
ABN 89 008 108 227
Directors' declaration
The Directors of Ironbark Capital Limited declare that:
1
2
3
The financial statements and notes, as set out on page 21 to page 38, are in accordance with the Corporations Act
2001 , and:
(a)
(b)
comply with Accounting Standards, which, as stated in accounting policy note 2 to the financial statements,
constitutes explicit and unreserved compliance with International Financial Reporting Standards (IFRS); and
give a true and fair view of
performance for the year ended on that date;
the financial position of
the Company as at 30 June 2012 and of
the
On behalf of White Outsourcing Pty Limited, Peter Roberts, as a person who performs the Chief Executive functions for
the purposes of the Act declared that:
(a)
(b)
(c)
the financial records of the Company for the financial year have been properly maintained in accordance
with section 286 of the Corporations Act 2001 ;
the financial statements and notes for the financial year comply with the Accounting Standards; and
the financial statements and notes for the financial year give a true and fair view.
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.
M J Cole
Director
Dated at Sydney this 22nd day of August 2012
39
Ironbark Capital Limited
ABN 89 008 108 227
Members Information as at 11 September 2012
1. Shareholding
Substantial holders
Shareholders
Kaplan Partners Pty Limited
RBC Investor Services Australia Nominees Pty Limited
Distribution of securities
(a)
Analysis of number of holders by size of holding:
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Number of
shares held
31,367,051
9,029,280
Number of
shareholders
Number of
shares held
280
486
354
1,201
157
2,478
105,997
1,406,893
2,698,874
36,974,210
100,373,551
141,559,525
(b)
(c)
There were 253 holders of less than a marketable parcel of shares.
The percentage of total holding of the 20 largest holders of ordinary shares currently comes to 50.40%
Twenty largest holders
The names of the 20 largest holders as at 11 September 2012 are listed below:
Name
KAPLAN PARTNERS PTY LIMITED
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
QUESTOR FINANCIAL SERVICES LIMITED
ABTOURK (SYD NO 415) PTY LTD
EDSGEAR PTY LIMITED
ABTOURK (SYD NO 415) PTY LTD
SUPENTIAN PTY LIMITED
DOWLING TAYLER PTY LTD
LIANGROVE MEDIA PTY LIMITED
BOND STREET CUSTODIANS LIMITED
BOND STREET CUSTODIANS LIMITED
H H ANG PTY LTD
BOND STREET CUSTODIANS LIMITED
BOND STREET CUSTODIANS LIMITED
MR DAVID STRINGER HILTON
BOND STREET CUSTODIANS LIMITED
LIANGROVE GROUP PTY LTD
COOLAL PTY LTD
TOLMIN PTY LIMITED
QUESTOR FINANCIAL SERVICES LIMITED
Number of
shares held
31,367,051
9,029,280
5,508,354
4,944,706
3,734,104
3,055,294
2,032,364
1,278,953
1,250,000
1,159,602
1,036,475
909,030
864,803
847,806
800,000
772,212
750,000
700,000
700,000
604,005
71,344,039
%
22.158
6.378
3.891
3.493
2.638
2.158
1.436
0.903
0.883
0.819
0.732
0.642
0.611
0.599
0.565
0.546
0.530
0.494
0.494
0.427
50.40
(d) Voting rights
At a general meeting, on the show of hands, every ordinary member present in person shall have one vote for every share
held. Proxies present at the meeting are not entitled to vote on a show of hands, but on a poll have one vote for every share
held.
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Ironbark Capital Limited
ABN 89 008 108 227
Members Information as at 11 September 2012 (Continued)
2.
3.
The name of the Company Secretary is Mr Peter Roberts.
The registered office and principal place of business of the Company is:
Level 7
20 Hunter Street
Sydney NSW 2000
Telephone: (02) 8236 7701
4.
Registry
Share registry functions are maintained by Boardroom Pty Limited and their details are as follows:
GPO Box 3993
Boardroom Pty Limited
Sydney NSW 2001
Shareholder enquiries telephone: (02) 9290 9600
5.
6.
7.
8.
9.
Stock Exchange Listing
Quotation has been granted for all ordinary shares of the Company on all Member Exchanges of the Australian Stock
Exchange Limited.
The Company has followed all applicable best practice recommendations set by ASX Corporate Governance Council
during the financial year.
The Company has used cash and assets in a form readily convertible to cash that it had at the time of admission
consistent with its business objectives.
The Company conducted 648 security transactions during the financial year. Brokerage paid during the year net of
RITC claimable was $21,486.
The Investment Management Agreement with Kaplan Funds Management Pty Limited provides for the payment of an
investment management fee of 0.65% per annum. In the event that the investment return on the IBC portfolio exceeds
the ASX300 index benchmark by a margin of 1% or more an additional performance fee of 15% of the performance
(adjusted for the value of franking credits received or accrued during the financial year and after the deduction of the
Management Fee and any applicable GST) of the Portfolio above the aggregate of the Benchmark plus 1% will be
payable. The agreement contains a highwater mark in relation to the performance fee to protect the interests of
investors.
43