Ironbark Capital Limited
ABN 89 008 108 227
Annual Report
For the year ended 30 June 2014
Ironbark Capital Limited
ABN 89 008 108 227
Annual Report
For the year ended 30 June 2014
Contents
Corporate Directory
Review of Operations and Activities
Corporate Governance Statement
Portfolio Shareholdings at 30 June 2014
Directors’ Report
Auditor’s Independence Declaration
Financial Statements
Directors’ Declaration
Independent Auditor’s Report to the Members
Shareholder Information
Page
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44
45
47
Ironbark Capital Limited
ABN 89 008 108 227
Corporate Directory
Directors
Michael J Cole B Ec, M Ec Sydney, F Fin
Ross J Finley B Comm NSW
Ian J Hunter BA LLB Sydney, MBA MGSM
Company Secretary
Jill Brewster MBA MGSM, AGIA, ACIS, FIPA
Principal Registered Office
Share Registrar
Investment Manager
Accounting & Administration
Auditors
Level 22
44 Market Street
Sydney NSW 2000
Telephone: (02) 8917 0399
Boardroom Pty Limited
GPO Box 3993
Sydney NSW 2001
Shareholder enquiries telephone: (02) 9290 9600
Kaplan Funds Management Pty Limited
Level 22
44 Market Street
Sydney NSW 2000
Telephone: (02) 8917 0300
Kaplan Funds Management Pty Ltd
Level 22, 44 Market Street
Sydney NSW 2000
Telephone: (02) 8917 0399
Fax: (02) 8917 0355
MNSA Pty Ltd
Level 1
283 George Street
Sydney NSW 2000
Website
www.ironbarkcapital.com
Company Secretarial & all other enquiries
Telephone: (02) 8917 0399
Email: enquiries@ironbarkcapital.com
Stock Exchange
Australian Securities Exchange
ASX code: IBC
1
Ironbark Capital Limited
ABN 89 008 108 227
Review of Operations and Activities
Year ended 30 June 2014
Review of Operations and Activities
The Directors consider the investment management performance of IBC to be satisfactory in the
latest financial year. The year’s performance maintains the solid investment returns achieved over the
last five years. The IBC portfolio lifted 12.4% over the period, achieving our internal target of 1% per
month. This level underperformed the ASX 300 benchmark by 4.9% as the broad market index
recorded another strong performance of 17.3%. The IBC performance reflects the portfolio’s balanced
structure and income emphasis.
Preservation of shareholder capital continues to be paramount and the markedly lower volatility of the
IBC portfolio means that the embedded risk is lower than the market.
As the table below indicates, over the longer term of more than a decade since inception, the IBC
portfolio has almost achieved the same performance as the ASX 300 accumulation index.
Relative Performance to 30 June 2014
Ironbark Capital Limited
ASX 300 Accum Index
Relative performance
Volatility IBC
Volatility ASX300
Inception
(11.5 yrs)
% pa
8.98
9.79
(0.81)
6.7
13.2
5 Yr
% pa
10.52
10.95
(0.43)
5.2
12.5
3 Yr
% pa
8.35
9.95
(1.60)
4.8
12.0
1 Yr
% pa
12.36
17.25
(4.89)
2.9
8.9
6 Mths
%
4.42
2.86
1.56
2.4
9.4
3 Mths
%
2.36
0.86
1.50
The share price discount to NTA and the payment of fully franked dividends continue to be the
Directors focus.
With 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
continue to reduce. However, at the close of the latest financial year and comparing it to the previous
corresponding period, the NTA discount has increased from 5.3% to 6.0%. As the 2015 milestone
approaches we anticipate this will narrow.
IBC’s capacity to pay fully franked dividends continues to depend on the accumulation of franking
credits and income generation. IBC distributed fully franked dividends of 2.25 cents per share in FY14
and in June announced a 2 cents per share fully franked dividend payable in December, as corporate
profits created 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.
IBC CORPORATE OUTLOOK
At the close of the current financial year IBC shareholders will be given access to the full NTA of their
shares through a buy back offer. We anticipate shareholders will reserve their decision to participate
for some or all their shareholding until much closer to the offer date. However in the absence of
massive participation by the larger shareholders in that offer it is expected that IBC will continue to
operate as an ASX listed investment company (LIC) in the following financial year.
The Directors consider that the proposed buy back offer to IBC shareholders is a very effective way to
provide liquidity to IBC shareholders at the full NTA of their shares. Accordingly the Directors have
now adopted as a policy to offer the buy back at regular three year intervals in the future. This policy
will assist to positively influence the share price to fully reflect the NTA per share between share
buyback events.
2
Ironbark Capital Limited
ABN 89 008 108 227
Review of Operations and Activities
Year ended 30 June 2014
Review of Operations and Activities (continued)
In the period until the close of the current financial year the Directors continue to set a policy direction
for IBC consistent with our view of the best opportunities for the company in the current investment
climate.
It is our view there continues to be investor demand for a low volatility, absolute return and fully
franked dividend focussed investment portfolio offered in a LIC structure. Accordingly the Board have
resolved to undertake a non-renounceable one for ten rights issue at $0.50. If fully subscribed by
shareholders the rights issue would raise approximately $7.8 million. The IBC Directors and the Fund
Managers associated interests intend to subscribe for their full entitlements. The details of the IBC
Rights Issue are set out below.
Finally the Directors in conjunction with the fund manager, Kaplan Funds Management (KFM) have
reviewed the investment management agreement which has now been in place for over a decade.
We have reaffirmed the continued importance of protecting shareholders’ capital through a low
volatility investment portfolio and our aspirational investment return target of 1% per month or 12 %
per annum remains intact.
In relation to the investment management fee, a reduced rate of 0.40% pa will apply from the start of
the next financial year.
The Directors believe that performance fees are an important tool to align the interests of the key
stakeholders of the shareholders and the fund manager. Accordingly the performance incentive has
been adjusted from an ASX relative benchmark to absolute return alternative. It will be calculated by
reference to the one year interest swap rate plus 6%. The investment return will include the benefit of
franking received in the calculation. Based on the current one year swap rate the absolute return
hurdle would be approximately 9%. The performance fee benchmark will be reset and apply for the
current financial year. A highwater mark will apply within each 3 year reset period.
IBC RIGHTS ISSUE
Ironbark will undertake a non-renounceable entitlement offer of 1 new share for every 10 existing
shares held by eligible shareholders on the record date (Entitlement Offer). The issue price of each
new share would be $0.50, representing a discount of approximately 12% to the ASX closing price of
$0.57 for Ironbark shares on 21 August 2014 (being the last trading day prior to the announcement of
the Entitlement Offer / the date of this report), and a discount of 16% to the net tangible asset backing
as at 31 July 2014.
New shares issued under the Entitlement Offer will rank pari passu with existing ordinary shares and
be entitled to the forthcoming 2 cent fully franked dividend (ex-date 15 December 2014) on the same
basis as all existing shares.
Ironbark directors in aggregate have agreed to underwrite or procure the underwriting of
approximately $1.31 million of new shares, representing approximately 20% of the aggregate number
of new shares that will be issued under the Entitlement Offer.
The Entitlement Offer would result in the issue of up to 15,571,548 new shares, raising gross
proceeds of approximately $7.8 million before expenses. Ironbark would use the net proceeds from
the Entitlement Offer for further investments consistent with Ironbark’s income focussed low volatility
investment strategy.
Shortfall Offer
In the event that there is a shortfall in applications under the Entitlement Offer, shareholders could
apply (at the time they are applying for allocations under the Entitlement Offer) for additional new
shares under a shortfall offer (Shortfall Offer). Allocations of new shares under the Shortfall Offer
would be capped at the same number of shares each shareholder is entitled to apply for under the
Entitlement Offer. In the event of an over-subscription under the Shortfall Offer, applications would be
scaled back pro rata according to the shareholdings as at the record date.
3
Ironbark Capital Limited
ABN 89 008 108 227
Review of Operations and Activities
Year ended 30 June 2014
Review of Operations and Activities (continued)
No new shares will be issued under the Shortfall Offer to a shareholder which will result in the
shareholder increasing its voting power in the company above 20%, or if the shareholder has an
existing voting power in the company above 20%, increasing their voting power by 3% or more.
Directors’ underwriting
The Directors have agreed to underwrite or procure one of its nominees to underwrite 2.62 million
shares out of a total of 15.57 million new shares to be issued under the Entitlement Offer. There is no
underwriting fee payable by the company for the Directors' underwriting commitment.
To the extent a Director (or its nominee) applies for new shares under the Entitlement Offer, its
obligation to underwrite the shortfall will be reduced by the number of new shares subscribed. In
addition, if the Shortfall Offer is over-subscribed by the other shareholders, the new shares to be
issued to the Directors (or their nominees) pursuant to the underwriting agreement will be scaled back
pro rata according to their shareholding as at the record date on the same basis as the other
shareholders under the Shortfall Offer. Therefore, the Directors (or their nominees) will be required to
assume the risk of any shortfall arising from the Entitlement Offer, but their entitlement to apply for
additional New Shares under the underwriting agreement is capped on the same basis as the other
shareholders under the Shortfall Offer.
Further details about the Entitlement Offer, the Shortfall Offer, and Directors' underwriting
arrangements will be set out in the offer booklet for the Entitlement Offer.
M J Cole
Chairman
22 August 2014
4
Ironbark Capital Limited
ABN 89 008 108 227
Corporate Governance Statement
Year ended 30 June 2014
Corporate Governance Statement
The board of Ironbark Capital Limited (the “Company”) is committed to complying with the standards
of corporate governance as set out
the ASX Corporate Governance Principles and
Recommendations with 2010 Amendments (2nd Edition), unless otherwise stated. A description of
the Company’s main corporate governance practices is set out below.
in
Principle 1: 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 Limited
(Investment Manager and Administration Manager). This entity incorporates the specialist wholesale
investment and administration personnel who undertake the Company’s executive operations.
Previously the administration was outsourced to White Outsourcing Pty Limited.
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. The Chairman
meets with each Director individually to discuss issues including performance and effectiveness of the
Board. This is part of the continuous review of Directors by the Chairman. The Chairman reports on
the general outcome of these meetings to the Nomination Committee and action items are
implemented as required.
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.
Principle 2: Structure the board to add value
The names of the directors of the company are set out in the Directors’ Report on page 13.
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 Directors’ Report on page 13. Directors of Ironbark Capital Limited
are considered to be 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.
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.
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Ironbark Capital Limited
ABN 89 008 108 227
Corporate Governance Statement
Year ended 30 June 2014
Principle 2: Structure the board to add value (continued)
The term in office held by each director in office at the date of this report is as follows:
Name
M J Cole
R J Finley
I J Hunter
Term in office
12 years
28 years
12 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
M J Cole
R J Finley
I 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.
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 subject to prior
consultation with the Chairman may seek independent professional advice at the entity’s expense. A
copy of advice received by any 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,
investment strategy and outcomes.
Submissions are circulated in advance.
financials, shareholder communications and
6
Ironbark Capital Limited
ABN 89 008 108 227
Corporate Governance Statement
Year ended 30 June 2014
Principle 2: Structure the board to add value (continued)
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 J.P Morgan Chase Bank N.A.
(Sydney Branch) and Kaplan Funds Management Pty Limited is the subject of continuous oversight
by the Chairman and the Board as a whole.
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 15 of the Directors’ Report.
Principle 3: 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 the Company
by acquiring and holding shares on a long-term basis. Short term trading in the Company’s shares by
directors is not permitted.
The Board has adopted the following policies concerning dealing in the Company’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.
7
Ironbark Capital Limited
ABN 89 008 108 227
Corporate Governance Statement
Year ended 30 June 2014
Principle 3: Promote ethical and responsible decision making (continued)
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.
Principle 4: Safeguard integrity in financial reporting
It is a requirement of the Board that the Administration Manager sign-off on the content of the financial
statements, and that these statements represent a true and fair view of the Company.
Kaplan Funds Management Pty Limited (previously White Outsourcing Pty Limited) 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 Kaplan Funds Management Pty
Limited (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 and report to the Committee.
The members of the Audit Committee during the year were:
• I J Hunter (Chairman)
• R J Finley
• M J 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 controls
system.
8
Ironbark Capital Limited
ABN 89 008 108 227
Corporate Governance Statement
Year ended 30 June 2014
Principle 4: Safeguard integrity in financial reporting (continued)
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 15 of the Directors’ Report.
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.
Principle 5: Make timely and balanced disclosure
information
lodged with
The Board informs shareholders of all major developments affecting the Company’s state of affairs as
follows:
• All
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’s website at
is available on
the ASX
The Company Secretary is responsible for ensuring the Company complies with its continuous
disclosure obligations. All relevant staff of 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 when 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 Kaplan Funds Management Pty Limited.
Where time does not permit approval by the Board, the Chairman of the Board 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.
Principle 6: 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 the Company, to lodge questions to be responded by
the Board, and are able to appoint proxies.
9
Ironbark Capital Limited
ABN 89 008 108 227
Corporate Governance Statement
Year ended 30 June 2014
Principle 7: 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. J.P. Morgan Chase
Bank, N.A.)(Sydney Branch)(custody and associated reporting), and Kaplan Funds Management Pty
Limited (investment management, and accounting and company secretarial). Risk issues associated
with these activities are handled in accordance with the service providers' policies and procedures.
Kaplan Funds Management Pty Limited is responsible for recognising and managing administrative
risks including (a) operational, (b) compliance and (c) financial reporting. Insurance Certificates of
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 Limited (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, the investment manager is required to report half-yearly that Kaplan Funds Management Pty
Limited has 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.
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.
10
Ironbark Capital Limited
ABN 89 008 108 227
Corporate Governance Statement
Year ended 30 June 2014
Principle 8: Remunerate fairly and responsibly
The Company has a Remuneration Committee which reviews and makes 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:
• MJ Cole (Chairman)
• R J Finley
• I J Hunter
As previously noted, the executive function of the Company has been outsourced to Kaplan Funds
Management Pty Limited (funds management, accounting and administration), 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’ 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 16 of the Directors’ 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 charter
• Communication policy
• Risk management policy
• Trading policy
• Code of Conduct and Ethics
11
Ironbark Capital Limited
ABN 89 008 108 227
Portfolio Shareholdings at 30 June 2014
Portfolio Shareholdings at 30 June 2014
ASX Code
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IOF
SCP
Large Industrial
Telstra Corporation Limited
Materials & Energy
BHP Billiton Limited
Bathurst Resources Limited
Pact Group Holdings Limited
Woodside Petroleum Limited
Property Trusts
Australian Industrial REIT
Cromwell Property Group
DEXUS Property Group
Folkestone Limited
Investa Office Fund
Shopping Centres Australasia Property Group
12
Market
Value*
$'000
% of
%
portfolio exposure**
3,591
5,370
2,832
5,352
17,145
1,068
4,243
1,077
1,357
1,274
8,632
2,152
1,088
4,038
2,678
2,226
4,214
2,080
4,584
2,916
1,495
45,122
10,086
10,086
8,286
20
635
407
9,348
578
533
402
110
298
488
2,409
4.1
6.1
3.2
6.1
19.5
1.2
4.8
1.2
1.6
1.5
9.8
2.5
1.2
4.6
3.1
2.5
4.8
2.4
5.2
3.3
1.7
51.4
11.5
11.5
9.4
0.0
0.7
0.5
10.6
0.7
0.6
0.5
0.1
0.3
0.6
2.8
1.9
0.9
3.1
3.3
9.3
1.2
4.8
1.2
1.6
1.5
9.8
2.5
1.2
4.6
3.1
2.5
4.8
2.4
5.2
3.3
1.7
51.4
4.0
4.0
7.9
0.0
0.7
0.3
9.0
0.7
0.6
0.5
0.1
0.3
0.6
2.8
Ironbark Capital Limited
ABN 89 008 108 227
Portfolio Shareholdings at 30 June 2014
Portfolio Shareholdings at 30 Jun 2014 (continued)
ASX Code
Security
IQE
JHC
SDF
TPI
VRT
DUE
SKI
SPN
Small Industrial
Intueri Education Group
Japara Healthcare Limited
Steadfast Group Limited
Transpacific Industries Group Limited
Virtus Health Limited
Utilities & Infrastructure
DUET Group
Spark Infrastructure Group
SP Australia Networks
Cash
Total
*Includes market value of options written against holdings
**Includes option delta written against holdings
Market
Value*
$'000
% of
%
portfolio exposure**
439
294
511
76
155
1,475
835
210
190
1,235
977
0.5
0.3
0.6
0.1
0.2
1.7
1.0
0.2
0.2
1.4
1.1
0.5
0.3
0.6
0.1
0.2
1.7
1.0
0.2
0.2
1.4
20.5
87,797
100.0
100.0
13
Ironbark Capital Limited
ABN 89 008 108 227
Directors’ Report
Year ended 30 June 2014
Directors’ Report
Your Directors present their report on the Company for the year ended 30 June 2014.
Directors
The following persons were Directors of Ironbark Capital Limited during the financial year and up to
the date of this report:
Michael J Cole
Ross J Finley
Ian J Hunter
Directors have been in office since the start of the financial year to the date of this report unless
otherwise stated.
Principal activities
During the year the principal activities of the Company included investments in securities listed on the
Australian Stock Exchange.
Dividends
Dividends paid to members since the end of the previous financial year were as follows:
Record
Date
Dividend
Rate
Total Amount
$’000
Date of
Payment
% Franked
2014
Ordinary shares -
Final
Ordinary shares –
Interim
2013
Ordinary shares -
Final
Ordinary shares –
Interim
13/06/2014
1.0cps
$1,557
27/06/2014
100
17/12/2013
1.25cps
$1,946
27/12/2013
100
20/06/2013
2.0 cps
$3,114
28/06/2013
100
17/12/2012
2.0cps
$3,114
28/12/2012
100
In respect of the financial year ended 30 June 2014, the directors recommended in June 2014 the
payment of a dividend of 2 cents per share franked to 100% and payable to the holders of fully paid
ordinary shares on 30 December 2014.
Review of Operations
Information on the operations and financial position of the Company and its business strategies and
prospects is set out in the review of operations and activities on page 2 of this Annual Report.
The profit from ordinary activities after income tax amounted to $7,675,000 (2013: $6,186,000)
The net tangible asset backing for each ordinary share as at 30 June 2014 amounted to $0.585 per
share (2013: $0.549 per share).
14
Ironbark Capital Limited
ABN 89 008 108 227
Directors’ Report
Year ended 30 June 2014
Earnings per share
2014
Basic and diluted earnings per share (cents per share) 5.05
2013
4.09
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the Company during the financial year
other than as disclosed in the financial statements.
Matters subsequent to the end of the financial year
On 22 August 2014, the Company announced details of a 1:10 non-renounceable rights issue at
$0.50 per share which will raise approximately $7.8m.
No other matter or circumstance has occurred subsequent to year end that has significantly affected,
or may significantly affect the operations of the Company, the results of those operations or the state
of affairs of the Company in subsequent financial years.
Likely developments and expected results of operations
IBC will continue to be managed in accordance with the investment objectives set out in the governing
documents and in accordance with the Constitution. 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.
Environmental regulation
The Company is not affected by any significant environmental regulation in respect of its operations.
To the extent that any environmental regulations may have an accidental impact on the Company’s
operations the Directors of the Company are not aware of any breach by the Company of those
regulations.
Information on directors
Michael J Cole B Ec, M Ec Sydney, F Fin Chairman
Experience and expertise
Investment manager and investment banker
Other current directorships
Chairman of Platinum Asset Management Ltd; Chairman, IMB Ltd; Director, NSW Treasury Corp;
Chairman, Challenger Listed Investments Ltd.
Interests in shares
9,000,000 shares
Ross J Finley B Comm NSW
Experience and expertise
Investment manager and stockbroker
Other current directorships
Director of Century Australia Investments Ltd
Interests in shares
1,640,000 shares
15
Ironbark Capital Limited
ABN 89 008 108 227
Directors’ Report
Year ended 30 June 2014
Information on directors (continued)
Ian J Hunter BA LLB Sydney, MBA MGSM Audit Committee Chairman
Experience and expertise
Banking and finance
Former directorships
During the past three years, Mr Hunter also served as a Director of Rubik Financial Ltd.
Interests in shares
2,435,596 shares
The particulars of directors’ interests in shares of the Company are as at the date of this report.
Company Secretary
The Company Secretary is Ms Jill Brewster. Ms Brewster was appointed to the role of Company
Secretary in April 2014 to replace Mr Peter Roberts who resigned effective 31 March 2014. She is the
Company Secretary and Group Finance Manager of Kaplan Funds Management Pty Limited and has
held senior management and advisory roles across corporate, finance and operations in the
investment and financial services industry. She is a member of The Governance Institute of Australia,
formerly known as Chartered Secretaries Australia.
Meetings of directors
The numbers of meetings of the Company’s Board of Directors and of each board committee held
during the year ended 30 June 2014, and the numbers of meetings attended by each Director were:
Michael J Cole
Ross J Finley
Ian J Hunter
Meetings of Committees
Board meetings
Audit
A
4
4
4
B
4
4
4
A
2
2
2
B
2
2
2
Nomination
A
B
1
1
1
1
1
1
Remuneration
A
B
1
1
1
1
1
1
A = Number of meetings attended
B = Number of meetings held during the time the Director held office or was a member of the
Committee during the year
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.
Remuneration report
This report details the nature and amount of remuneration for each Director and Key Management
Personnel of Ironbark Capital Limited in accordance with the Corporations Act 2001.
Remuneration policy
The Board determines the remuneration structure of Non-Executive Directors (based on the
recommendation of the Remuneration Committee), having regards 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, remuneration of Non-Executives is not explicitly linked to the Company’s
performance.
16
Ironbark Capital Limited
ABN 89 008 108 227
Directors’ Report
Year ended 30 June 2014
Remuneration report (continued)
Notwithstanding this, Board members 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 Directors’ 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.
Details of remuneration
The following tables show details of the remuneration received by the Directors of the Company for
the current and previous financial year.
2014
Name
Michael J Cole
RJ Finley
IJ Hunter
2013
Name
Michael J Cole
RJ Finley
IJ Hunter
Cash salary
and fees
$
Superannuation
$
22,000
22,000
22,000
66,000
-
-
-
-
Total
$
22,000
22,000
22,000
66,000
Cash salary
and fees
$
Superannuation
$
Total
$
20,000
20,000
20,000
60,000
-
-
-
-
20,000
20,000
20,000
60,000
Directors are paid a maximum remuneration of $22,000 each per annum.
Accounting and company secretarial duties are outsourced to Kaplan Funds Management Pty
Limited. Ms Brewster received no fees as an individual. Kaplan Funds Management Pty Limited is
remunerated for services rendered pursuant to an Administrative Services Agreement effective 1 April
2014. Up until 31 March 2014, the accounting and company secretarial duties were outsourced to
White Outsourcing Pty Limited.
(a)
Equity instruments held by key management personnel
Options
(i)
No options were granted over issued shares or interests during the financial year or since the financial
year end by the Company to Directors or any other officers.
17
Investment income from trading portfolio
Revenue
Net gains/(losses) on trading portfolio
Total investment income from trading portfolio
Expenses
Management fees
Brokerage expense
Accounting fees
Share registry fees
Custody fees
Tax fees
Directors' liability insurance
Legal fees
Directors' fees
ASX fees
Audit fees
Options expense
Other expenses
Total expenses
Profit before income tax
Income tax expense
Net profit for the year
Ironbark Capital Limited
ABN 89 008 108 227
Statement of Profit or Loss and Other
Comprehensive Income
For the year ended 30 June 2014
Notes
2014
$'000
2013
$'000
6
6
19 (b)
19 (a)
17
4,583
5,933
10,516
4,702
3,807
8,509
(601)
(46)
(52)
(39)
(36)
(10)
(23)
(2)
(66)
(44)
(39)
(33)
(9)
(1,000)
(577)
(79)
(83)
(42)
(34)
(11)
(23)
(4)
(60)
(40)
(40)
(27)
(22)
(1,042)
9,516
7,467
7
(1,841)
(1,281)
7,675
-
7,675
Cents
5.05
6,186
-
6,186
Cents
4.09
Other comprehensive income/(loss) for the year net of tax
Total comprehensive income for the year
Basic and diluted earnings per share
22
The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
20
Ironbark Capital Limited
ABN 89 008 108 227
Statement of Financial Position
As at 30 June 2014
Notes
2014
$'000
2013
$'000
8
9
10
12
13
16
14
15
977
3,792
86,820
-
4
91,593
123
615
84,737
332
4
85,811
27
27
606
606
91,620
86,417
336
70
3,114
3,520
754
754
4,274
118
-
-
118
11
11
129
87,346
86,288
86,901
4,561
(4,116)
86,901
-
(613)
87,346
86,288
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Trading portfolio
Current tax assets
Other assets
Total current assets
Non- current assets
Deferred tax assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Current tax liabilities
Provision for dividend
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Profit reserve
Accumulated losses
Total equity
The above Statement of Financial Position should be read in conjunction with the accompanying notes
21
Ironbark Capital Limited
ABN 89 008 108 227
Statement of Changes in Equity
For the year ended 30 June 2014
Issued
capital
$'000
Profit
reserve
$'000
Accumulated
losses
$'000
Total
equity
$'000
Notes
Balance at 1 July 2013
86,901
Profit for the year
Transfer between reserves
Total comprehensive income for the
year
Transactions with owners in their
capacity as owners:
Dividends declared
Dividends paid
16
16
-
-
-
-
-
-
-
-
(613)
86,288
7,675
7,675
7,675
(7,675)
-
7,675
-
7,675
(3,114)
-
-
-
(3,503)
-
(3,114)
(3,503)
-
Balance at 30 June 2014
86,901
4,561
(4,116)
87,346
Balance at 1 July 2012
80,156
Profit for the year
Other comprehensive income for the
Total comprehensive income for the
year
Transactions with owners in their
capacity as owners:
Dividends provided for or paid
Contributions of equity from rights
issue, net of transaction costs
16
Balance at 30 June 2013
-
-
-
-
6,745
86,901
-
-
-
-
-
-
-
(571)
79,585
6,186
6,186
-
-
6,186
6,186
(6,228)
(6,228)
-
6,745
(613)
86,288
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes
22
Ironbark Capital Limited
ABN 89 008 108 227
Statement of Cash Flows
For the year ended 30 June 2014
Notes
2014
$'000
2013
$'000
Cash flows from operating activities
Interest received
Proceeds from sale of trading portfolio
Purchase of trading portfolio
Dividends & trust distributions received
Other income received
Management fees paid
Other expenses paid
Income tax paid
Net cash inflow/(outflow)from operating activities
Cash flows from financing activities
Dividends paid to shareholders
Proceeds from rights issue
Transaction costs paid for rights issue
Net cash (outflow)/inflow from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at the end of the financial year
21
16
8
775
33,855
(32,999)
3,838
13
(597)
(409)
(119)
4,357
(3,503)
-
-
(3,503)
854
123
977
945
59,457
(65,380)
3,711
130
(573)
(375)
(435)
(2,520)
(6,228)
6,795
(71)
496
(2,024)
2,147
123
The above Statement of Cash Flows should be read in conjunction with the accompanying notes
23
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2014
1. General information
Ironbark Capital Limited (the "Company") is a listed public company domiciled in Australia. The address of
Ironbark Capital Limited's registered office is Level 22, 44 Market Street, Sydney NSW 2000. The financial
statements of Ironbark Capital Limited are for the year ended 30 June 2014. The Company is primarily
involved in making investments, and deriving revenue and investment income from listed securities and
unit trusts in Australia.
2. Summary of significant accounting policies
The principal accounting policies adopted in the preparation of these financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise stated.
The financial statements are for the entity Ironbark Capital Limited.
(a) Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and interpretations issued by the Australian Accounting Standards Board and the Corporations
Act 2001. The Company is a ‘for profit’ entity.
The Financial Statements were authorised for issue by the directors on 22 August 2014.
(i) Compliance with IFRS
Australian Accounting Standards include Australian equivalents to International Financial Reporting
Standards (AIFRS). AIFRS ensures that the financial statements and notes comply with International
Financial Reporting (IFRS).
(ii) New and amended standards adopted by the Company
The Company has adopted the following new standard:
AASB 13 Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards
arising from AASB 13
AASB 13 Fair Value Measurement aims to improve consistency and reduce complexity by providing a
precise definition of fair value and a single source of fair value measurement and disclosure requirements
for use across Australian Accounting Standards. The standard does not extend the use of fair value
accounting but provides guidance on how it should be applied where its use is already required or
permitted by other Australian Accounting Standards.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date in the market to which the Company has
access at that date. When applicable, the Company measures the fair value of an instrument using the
quoted prices in an active market for that instrument. A market is regarded as active if transactions for the
asset or liability take place with sufficient frequency and volume to provide pricing information on a
continuing basis.
The Company has adopted AASB 13 Fair Value Measurement with effect from 1 July 2013. The change
had no material impact on the measurement of the Company's assets and liabilities.
(iii) Historical cost convention
These Financial Statements have been prepared under the accruals basis and are based on historical cost
convention, except that financial instruments are stated at their fair value.
(iv) Critical accounting estimates
The preparation of financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgment in the process of applying the Company's accounting
policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and
estimates are significant to the financial statements are disclosed in Note 4.
24
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2014
2 Summary of significant accounting policies (continued)
(b) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as
revenue are net of rebates and amounts collected on behalf of third parties.
(i) 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 Profit or Loss and Other Comprehensive Income in the year
they are earned/incurred.
(ii) Dividends and trust distributions
Dividends and trust distributions are recognised as revenue when the right to receive payment is
established.
(iii) Interest income
Interest income is recognised using the effective interest method.
(iv) Other income
The Company recognises other income when the amount of revenue can be reliably measured, it is
probable that future economic benefits will flow to the entity and specific criteria have been met for each of
the Company's activities as described below.
(c) Income tax
The income tax expense or revenue for the period is the tax payable on the current period's taxable income
based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets
and liabilities attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantially enacted at
the end of the reporting period. Management periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions
where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the Financial Statements. Deferred
income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the
end of the reporting period and are expected to apply when the related deferred income tax asset is
realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax
assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends
either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss in the Statement of Profit or Loss and Other
Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive
income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively.
(d) Cash and cash equivalents
For the purpose of presentation in the Statement of Cash Flows, cash and cash equivalents includes cash
on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with
original maturities of three months or less that are readily convertible to known amounts of cash and which
are subject to an insignificant risk of changes in value.
25
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2014
2 Summary of significant accounting policies (continued)
(e) Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised
cost using the effective interest method, less provision for impairment. Trade and other receivables are
generally due for settlement within 30 days. They are presented as current assets unless collection is not
expected for more than 12 months after the reporting date.
Collectability of trade and other receivables is reviewed on an ongoing basis. Debts which are known to be
uncollectible are written off by reducing the carrying amount directly.
(f) Trading portfolio
Classification
The trading portfolio comprises securities held for short term trading purposes, including exchange traded
option contracts that are entered into, as described 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.
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 Profit or Loss and Other Comprehensive Income.
Securities in the trading portfolio are classified as "assets measured at fair value through profit or loss".
Recognition and derecognition
Purchases and sales of financial assets are recognised on trade date - the date on which the Company
commits to purchase or sell the asset. Financial assets are derecognised when the right to receive cash
flows from the financial assets have expired or have been transferred and the Company has transferred
substantially all the risks and rewards of ownership.
Measurement
At initial recognition, the Company measures a financial asset or financial liability at its fair value.
Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or
loss.
Subsequent to initial recognition, the financial instruments are measured at fair value with changes in their
fair value recognised in the Statement of Profit or Loss and Other Comprehensive Income.
When disposal of an investment occurs, the cumulative gain or loss is recognised as realised gains and
losses on trading portfolio in the Statement of Profit or Loss and Other Comprehensive Income.
The objective of determining fair value for a financial instrument that is traded in an active market is to
arrive at the price at which a transaction would occur at the end of the reporting period. The existence of
published price quotations in an active market is the best evidence of fair value and is used to measure the
financial asset or financial liability.
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 Profit or Loss and Other Comprehensive Income.
(g) Derivatives
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.
26
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2014
2 Summary of significant accounting policies (continued)
(h) Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of
financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of
recognition. Trade and other payables are presented as current liabilities unless payment is not due within
12 months from the reporting date. They are recognised initially at their fair value and subsequently
measured at amortised cost using the effective interest method.
(i)
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
(j) 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.
(k) Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
the profit attributable to owners of the Company, excluding any costs of servicing equity other than
ordinary shares
by the weighted average number of ordinary shares outstanding during the financial year,
adjusted for bonus elements in ordinary shares issued during the year and excluding treasury
shares.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take
into account:
the after income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares, and
the weighted average number of additional ordinary shares that would have been outstanding
assuming the conversion of all dilutive potential ordinary shares.
(l) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST
incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of
acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net
amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or
payables in the Statement of Financial Position.
27
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2014
2 Summary of significant accounting policies (continued)
( l) Goods and Services Tax (GST) (continued)
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to the taxation authority, are presented as
operating cash flows.
(m) Rounding of amounts
The Company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and
Investments Commission, relating to the 'rounding off' of amounts in the financial statements. Amounts in
the financial statements have been rounded off in accordance with that Class Order to the nearest
thousand dollars, or in certain cases, the nearest dollar.
(n) Functional and presentation currency
The functional and presentation currency of the Company is Australian dollars.
(o) Comparatives
Where necessary, comparative information has been reclassified to be consistent with the current reporting
period.
(p) Operating Segments
The Company operated in Australia only and the principal activity is investment.
(q) New accounting standards and interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for 30
June 2014 reporting periods and have not yet been applied in the Financial Statements. The Company's
assessment of the impact of these new standards and interpretations is set out below.
(i) AASB 9 Financial Instruments, (effective from 1 January 2017)
AASB 9 Financial Instruments addresses the classification, measurement and derecognition of financial
assets and financial liabilities, including hedge accounting. The standard is not applicable until 1 January
2017 but is available for early adoption. AASB 9 permits the recognition of fair value gains and losses in
other comprehensive income if they relate to equity investments that are not held for trading. The Directors
do not expect there will be any impact on the accounting for the Company’s financial assets or liabilities.
There are no other standards that are not yet effective and that are expected to have a material impact on
the entity in the current or future reporting periods and on foreseeable future transactions.
3. Financial risk management
The Company’s activities expose it to a variety of financial risks: market risk (including interest rate risk and
price risk), credit risk and liquidity risk. The Board of the Company has implemented a risk management
framework to mitigate these risks.
(a) Market risk
The standard defines this as the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices.
(i) Price risk
The Company is exposed to equity securities price risk. This arises from investments held by the Company
and classified in the Statement of Financial Position as trading portfolio.
The Company seeks to manage and constrain market risk by diversification of the investment portfolio
across multiple stocks and industry sectors. The Investment Manager of the trading portfolio has been
granted specific risk tolerance boundaries as set out in the Investment Management Agreement.
28
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial risk management (continued)
The Company's investments split by sector as at 30 June are set out below:
Sector
Financials
Energy
Healthcare and biotechnology
Industrials
Consumer discretionary
Utilities
Materials
Telecommunications services
Corporate floating rate notes
Property Trust
Total
2014
(%)
55.5
0.5
2.9
3.4
0.5
1.4
10.3
11.6
11.1
2.8
100.0
2013
(%)
53.4
0.9
2.7
3.5
-
3.3
9.9
9.7
14.3
2.3
100.0
Securities representing over 5 percent of the trading portfolio at 30 June 2014 were:
Telstra Corporation Limited
Commonwealth Bank Perls III & Perls V & Perls VI
BHP Billiton Limited
Commonwealth Bank of Australia Limited
Westpac Banking Corporation Limited
Suncorp Group Limited
2014
(%)
11.5
9.8
9.4
6.1
6.1
5.2
48.1
No other security represents over 5 percent of the trading portfolio at 30 June 2014.
The Company is also not directly exposed to currency risk as all its investments are quoted in Australian
dollars.
The following table illustrates the effect on the Company's profit or loss from possible changes in other
market risk that were reasonably possible based on the risk the Company was exposed to at reporting
date, assuming a flat tax rate of 30 percent:
Index
Change in variable by +5%/-5% (2013: +5%/-5%)
Change in variable by +10%/-10% (2013: +10%/-10%)
Impact on post-tax profit
2014
$'000
2013
$'000
3,039
6,078
2,966
5,932
29
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial risk management (continued)
(ii) Cash flow and fair value 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. The risk is measured
using sensitivity analysis.
The table below summarises the Company's exposure to interest rate risks. It includes the Company's
assets and liabilities at fair values, categorised by the earlier of contractual repricing or maturity dates.
Financial Assets
Cash and cash equivalents
Trade and other receivables
Trading portfolio
Financial liabilities
Trade and other payables
Current tax liability
Net exposure
30 June 2013
Financial Assets
Cash and cash equivalents
Trade and other receivables
Trading portfolio
Current tax assets
Financial liabilities
Trade and other payables
Floating interest
rate
$'000
Non-interest
bearing
$'000
Total
$'000
977
-
9,599
10,576
-
-
-
-
3,792
77,221
81,013
(336)
(70)
(406)
977
3,792
86,820
91,589
(336)
(70)
(406)
10,576
80,607
91,183
Floating
interest rate
$'000
Non-interest
bearing
$'000
Total
$'000
123
-
12,115
-
12,238
-
615
72,622
332
73,569
123
615
84,737
332
85,807
-
-
(118)
(118)
(118)
(118)
Net exposure
12,238
73,451
85,689
30
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial risk management (continued)
(ii) Cash flow and fair value interest rate risk (continued)
The weighted average interest rate of the Company's cash and cash equivalents at 30 June 2014 is 2.5%
pa (2013: 3.9% pa).
Sensitivity
At 30 June 2014, if interest rates had increased or decreased by 75 basis points from the year end rates
with all other variables held constant, post-tax profit for the year would have been $5,127 higher/$5,127
lower (2013:changes of 75 bps/75 bps: $644 lower/$644 higher), mainly as a result of higher/lower interest
income from cash and cash equivalents.
(b) 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.
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance
date to recognised financial assets, is the carrying amount, net of any provisions for impairment of those
assets, as disclosed in the Statement of Financial Position and Notes to the Financial Statements.
There are no material amounts of collateral held as security at 30 June 2014.
Credit risk is managed as noted in Note 8 with respect to cash and cash equivalents, Note 9 for trade and
other receivables and Note 10 for floating rate note trading portfolio. None of these assets are over-due or
considered to be impaired.
(c) Liquidity risk
The standard defines this as the risk that an entity will encounter difficulty in meeting obligations associated
with financial liabilities.
The Investment Manager monitors cash-flow requirements daily taking into account upcoming dividends,
tax payments and investing 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.
The assets of the Company are largely in the form of readily tradable 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.
31
3 Financial risk management (continued)
(c) Liquidity risk (continued)
At 30 June 2014
Non-derivatives
Trade and other payables
Current tax liability
Total non-derivatives
At 30 June 2013
Non-derivatives
Trade and other payables
Total non-derivatives
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2014
Less than 1
month
$'000
More than 1
month
$'000
336
-
336
-
70
70
Less than 1
month
$'000
More than 1
month
$'000
118
118
-
-
(d) Fair value measurements
The fair value of financial assets and financial liabilities must be estimated for recognition and
measurement or for disclosure purposes.
AASB 13 Fair Value Measurement requires disclosure of fair value measurements by level of the following
fair value measurement hierarchy:
(a) quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
(b) inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices) (level 2), and
(c) inputs for the asset or liability that are not based on observable market data (unobservable inputs)
(level 3).
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 judgment, considering factors specific
to the asset or liability.
The determination of what constitutes ‘observable’ requires significant judgment 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.
32
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2014
3 Financial risk management (continued)
(d) Fair value measurements (continued)
The following table presents the Company's financial assets and liabilities (by class) measured and
recognised at fair value according to the fair value hierarchy at 30 June 2014 and 30 June 2013:
Fair value hierarchy
30 June 2014
Financial assets
Trading portfolio
Total
30 June 2013
Financial assets
Trading portfolio
Total
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
86,820
86,820
-
-
-
-
86,820
86,820
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
84,737
84,737
-
-
-
-
84,737
84,737
The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and
trading and available-for-sale securities) is based on quoted market prices at the end of the reporting
period. The quoted market price used for financial assets held by the Company is included in level 1.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter
derivatives) is determined using valuation techniques. These valuation techniques maximise the use of
observable market data where it is available and rely as little as possible on entity specific estimates. If all
significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
If one or more of the significant inputs is not based on observable market data, the instrument is included in
level 3. This is the case for unlisted equity securities and loans.
4. Critical accounting estimates and judgments
Estimates and judgments are continually evaluated and are based on historical experience and other
factors, including expectations of future events that may have a financial impact on the entity and that are
believed to be reasonable under the circumstances.
5. 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.
33
6. Investment income
Revenue
Dividends
Interest
Distributions
Other income
Net gains/(losses) on trading portfolio
Net realised gains/losses on trading portfolio
Net unrealised gains/losses on trading portfolio
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2014
2014
$'000
2013
$'000
3,471
755
344
13
4,583
1,105
4,828
5,933
3,229
936
406
131
4,702
(1,255)
5,062
3,807
10,516
8,509
7. Income tax expense
(a) Income tax expense recognised
in the Statement of Profit or Loss and Other
Comprehensive Income
Current tax
Deferred tax
Income tax expense/(benefit) is attributable to:
Profit from continuing operations
2014
$'000
2013
$'000
520
1,321
1,841
61
1,220
1,281
1,841
1,281
34
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2014
7 Income tax expense (continued)
(b) Numerical reconciliation of income tax expense/(benefit) to prima facie tax payable
Profit from continuing operations before income tax expense/(benefit)
Tax at the Australian rate of 30.0% (2013 - 30.0%)
Tax effect of amounts which are not deductible (taxable) in
calculating taxable income:
Franking credits on dividends received
Imputation gross up on dividend income
Timing differences
Permanent difference from adjustments to prior year income tax expense
Realised taxable investment loss/(gain)
Realised accounting investment (gain)/loss
Income tax expense
2014
$'000
9,516
2,855
2013
$'000
7,467
2,240
(1,432)
430
(163)
-
482
(331)
1,841
(1,340)
402
(255)
(53)
(89)
376
1,281
The applicable weighted average effective tax rates are as follows
19.3%
17.2%
8. Cash and cash equivalents
Cash at bank and in hand
2014
$'000
2013
$'000
977
123
(a)
Reconciliation to cash at the end of the year
The above figures are reconciled to cash at the end of the financial year as shown in the Statement of
Cash Flows as follows:
Balances as above
(b)
Risk exposure
2014
$'000
2013
$'000
977
123
The Company's exposure to interest rate risk is discussed in Note 3. The maximum exposure to credit risk
at the end of the reporting period is the carrying amount of each class of cash and cash equivalents
mentioned above.
Cash investments are made with JP Morgan which is rated A+ (2013: A+) by Standard & Poor's.
35
9. Trade and other receivables
Dividends and distributions receivable
Interest receivable
GST Receivable
Unsettled sales
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2014
2014
$'000
2013
$'000
457
19
18
3,298
3,792
481
38
19
77
615
Outstanding settlements are on the terms operating in the securities industry, which usually require
settlement within three days of the date of a transaction. None of the receivables is past due or impaired at
the end of the reporting period.
(a)
Fair value and credit risk
Due to the short-term nature of these receivables, their carrying amount is assumed to approximate their
fair value.
Risk exposure
The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class
of receivables mentioned above.
10. Trading portfolio
Listed equities
Units in listed property trusts
Floating rate notes - listed
2014
$'000
2013
$'000
74,813
2,408
9,599
86,820
67,877
4,745
12,115
84,737
(a)
Risk exposure and fair value measurements
Information about the Company's exposure to price risk and about the methods and assumptions used in
determining fair value is provided in note 3.
11. Derivative financial instruments
In the normal course of business, the Company enters into transactions in derivative financial instruments
with certain risks. A derivative is a financial instrument or other 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.
36
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2014
11 Derivative financial instruments (continued)
Derivatives are considered to be part of the investment process. The use of derivatives is an essential part
of the Company's portfolio management. Derivatives are not managed in isolation. Consequently, the use
of derivatives is multi-faceted and includes:
(i) hedging to protect an asset of the Company against a fluctuation in market values or to reduce volatility;
(ii) as a substitute for physical securities; and
(iii) adjustment of asset exposures within the parameters set out in the investment strategy.
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 amount of securities or a financial instrument at a predetermined price. The seller
receives a premium from the 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
2014
$'000
Notional
principal
amounts
2013
$'000
Australian exchange traded options
(1,097)
(799)
12. Deferred tax assets
The balance comprises temporary differences attributable to:
Net unrealised losses of investments
Other temporary differences
Movements:
Opening balance:
Charged/credited:
- to deferred tax liabilities
- to profit or loss
2014
$'000
2013
$'000
-
27
27
606
(573)
(6)
27
574
32
606
1,823
-
(1,217)
606
37
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2014
Notes
19(c)
2014
$'000
2013
$'000
54
282
336
50
68
118
2014
$'000
2013
$'000
6
748
754
11
170
573
754
11
-
11
14
(3)
11
13. Trade and other payables
Management fees payable
Other payables
14. Deferred tax liabilities
The balance comprises temporary differences attributable to:
Accrued income
Unrealised losses on investments
Movements:
Opening balance
Charged/credited - to profit or loss
- from deferred tax assets
15. Issued capital
(a)
Issued capital
Ordinary shares - fully paid
155,715,478
155,715,478
86,901
86,901
30 June
2014
Shares
30 June
2013
Shares
2014
$'000
2013
$'000
(b)
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the
Company in proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled
to one vote, and upon a poll each share is entitled to one vote.
38
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2014
15 Issued capital (continued)
(c)
Dividend reinvestment plan
Under the Company's dividend reinvestment plan (DRP), 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.
(d)
Capital risk management
To achieve this, the Board of Directors monitor the monthly NTA results, investment performance, the
Company's Indirect Cost Ratio (formerly known as 'Management Expense Ratio') and share price
movements.
The Company is not subject to any externally imposed capital requirements.
16. Dividends
(a)
Ordinary Shares recognised as paid
Final dividend
Interim dividend
2014
$'000
1,557
1,946
3,503
2013
$'000
3,114
3,114
6,228
In respect of the financial year ended 30 June 2014, the directors recommended in June 2014 the payment
of a dividend of 2 cents per share franked to 100% and payable to the holders of fully paid ordinary shares
on 30 December 2014.
(b)
Dividend franking account
Opening balance of franking account
Franking credits on dividends received
Net tax paid 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
Franking credits on dividends received after year end
2014
$'000
2013
$'000
13
1,432
118
(1,502)
61
70
153
223
284
907
1,340
435
(2,669)
13
(332)
127
(205)
(192)
39
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2014
16 Dividends (continued)
(c)
Dividend rate
Record
Date
Dividend
Rate
Total Amount
$’000
Date of
Payment
% Franked
13/06/2014
1.0cps
$1,557
27/06/2014
100
17/12/2013
1.25cps
$1,946
27/12/2013
100
20/06/2013
2.0 cps
$3,114
28/06/2013
100
17/12/2012
2.0cps
$3,114
28/12/2012
100
2014
Ordinary shares -
Final
Ordinary shares –
Interim
2013
Ordinary shares -
Final
Ordinary shares –
Interim
17. Remuneration of auditors
During the year the following fees were paid or payable (GST inclusive) for services provided by the auditor
of the Company, its related practices and non-related audit firms:
(a)
Auditors
Audit and other assurance services
MNSA Pty Ltd - Audit and review of financial statements
Other assurance services
PWC - Audit of custodian statements
Total remuneration for audit and other assurance services
Other services
PWC - Consultation fees
Total remuneration for other services
Total auditor remuneration for assurance and other services
18. Contingencies
2014
$'000
2013
$'000
32
7
39
-
-
39
29
7
36
4
4
40
The Investment Management Agreement entered into by the Company with Kaplan Funds Management
Pty Ltd may be terminated by either party giving to the other no less than one-year written notice of its
intention to do so.
The Company had no other contingent liabilities at 30 June 2014 (2013: nil).
40
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2014
19. Related party transactions
(a)
Key management personnel
Short-term benefits
(b)
Transactions with other related parties
The following transactions occurred with related parties (exclusive of RITC):
2014
$'000
2013
$'000
66
60
2014
$'000
2013
$'000
Management fees paid or payable
601
577
The Company has entered into a Management Agreement with Kaplan Funds Management Pty Ltd such
that it will manage investments of the Company, ensure regulatory compliance with all the relevant laws
and regulations, and provide administrative and other services for a fee.
No performance fees were paid or payable to Kaplan Funds Management Pty Ltd for the year ended 30
June 2014 (2013: nil).
(c)
Outstanding balances
The following balances (GST inclusive) are outstanding at the end of the reporting period in relation to
transactions with related parties:
Management fees payable
(d)
Terms and conditions
2014
$'000
2013
$'000
54
50
Transactions between related parties are on normal commercial terms and conditions no more favourable
than those available to other parties unless otherwise stated.
20. Events occurring after the reporting period
On 22 August 2014, the Company announced details of a 1:10 non-renounceable rights issue at $0.50 per
share which will raise approximately $7.8m.
Other than the rights issue, no matter or circumstance has occurred subsequent to year end that has
significantly affected, or may significantly affect, the operations of the Company, the results of those
operations or the state of affairs of the Company or economic entity in subsequent financial years.
41
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2014
21. Reconciliation of profit after income tax to net cashflow from operating
activities
Profit for the year
Unrealised (gains)/losses on trading portfolio
Realised (gains)/losses on trading portfolio
Change in operating assets and liabilities
Decrease/(increase) in trade and other receivables
(Decrease)/increase in trade and other payables
Increase/(decrease) in tax liabilities
Decrease/(Increase) in trading portfolio
Net cash inflow/(outflow) from operating activities
22. Earnings per share
(a)
Basic earnings per share
From continuing operations attributable to the ordinary equity
Total basic earnings per share attributable to the ordinary
equity holders of the company
(b)
Diluted earnings per share
From continuing operations attributable to the ordinary equity
Total diluted earnings per share attributable to the ordinary
equity holders of the company
2014
$'000
2013
$'000
7,675
(4,828)
(1,105)
44
(9)
1,723
857
4,357
6,186
(5,062)
1,255
80
17
847
(5,843)
(2,520)
2014
Cents
2013
Cents
5.05
5.05
4.09
4.09
2014
Cents
2013
Cents
5.05
5.05
4.09
4.09
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.
42
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2014
22 Earnings per share (continued)
(c)
Weighted average number of shares used as denominator
Weighted average number of ordinary shares used as the
denominator in calculating basic and diluted earnings per
share
2014
Number
2013
Number
151,419,985
151,419,985
43
Ironbark Capital Limited
ABN 89 008 108 227
Shareholder Information
A.
Distribution of equity securities
As at 31 August 2014 there were 2,408 shareholders of ordinary shares in Ironbark Capital Limited.
These holders were distributed as follows:
Holdings range
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 and over
Totals
No of
shareholders
289
463
318
1,169
169
2,408
Shares
106,542
1,337,782
2,434,619
37,109,259
114,727,276
155,715,478
There were 245 holders of less than a marketable parcel of ordinary shares.
B.
Equity security holders
The 20 largest holdings of the Company’s shares as at 31 August 2014 are listed below:
Name
KAPLAN PARTNERS PTY LIMITED
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
ABTOURK (SYD NO 415) PTY LTD
EDSGEAR PTY LIMITED
QUESTOR FINANCIAL SERVICES LIMITED
ABTOURK (SYD NO 415) PTY LTD
SUPENTIAN PTY LIMITED
LIANGROVE MEDIA PTY LIMITED
GRANTULLY INVESTMENTS PTY LIMITED
BOND STREET CUSTODIANS LIMITED
DELTA ASSET MANAGEMENT PTY LTD
DOWLING TAYLER PTY LTD
H H ANG PTY LTD
BOND STREET CUSTODIANS LIMITED
LIANGROVE GROUP PTY LTD
MR DAVID STRINGER HILTON
BOND STREET CUSTODIANS LIMITED
COOLAL PTY LTD
TOLMIN PTY LIMITED
BOND STREET CUSTODIANS LIMITED
Ordinary shares
Number held
36,065,029
11,425,278
5,500,000
4,747,960
4,551,478
3,500,000
2,435,596
1,518,672
1,283,545
1,268,563
1,072,610
1,000,953
999,933
932,587
911,210
880,000
849,434
820,000
820,000
661,668
%
23.16
7.34
3.53
3.05
2.92
2.25
1.56
0.98
0.82
0.82
0.69
0.64
0.64
0.60
0.59
0.57
0.55
0.53
0.53
0.43
81,244,516
52.17
47
Ironbark Capital Limited
ABN 89 008 108 227
Shareholder Information
C.
Substantial shareholders
Substantial shareholders in the Company as at 31 August 2014 are set out below:
Name
KAPLAN PARTNERS PTY LIMITED
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
Number held
36,065,029
11,425,278
%
23.16
7.34
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.
E.
Company Secretary
The name of the Company Secretary is Ms Jill Brewster.
The registered office and principal place of business of the Company is:
Level 22
44 Market Street
Sydney, NSW 2000
Telephone: (02) 8917 0399
F.
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
G.
Stock Exchange Listing
Quotation has been granted for all of the 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.
H.
Transaction Summary
The Company conducted 672 security transactions during the financial year. Brokerage paid during
the year net of RITC claimable was $86,395.
48
Ironbark Capital Limited
ABN 89 008 108 227
Shareholder Information
I. Investment Management Agreement
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 Accumulation 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
interest of investors.
49