Ironbark Capital Limited
Annual Report 2021

Plain-text annual report

Ironbark Capital Limited ABN 89 008 108 227 Annual Report For the year ended 30 June 2021 Ironbark Capital Limited ABN 89 008 108 227 Annual Report For the year ended 30 June 2021 Contents Corporate Directory Review of Operations and Activities Corporate Governance Statement Investment Manager Report Portfolio Shareholdings at 30 June 2021 Directors’ Report Auditor’s Independence Declaration Financial Statements Directors’ Declaration Independent Auditor’s Report to the Members Shareholder Information Page 1 2 4 5 8 9 14 15 37 38 43 Ironbark Capital Limited ABN 89 008 108 227 Corporate Directory Directors Michael J Cole AM BEcon, MEcon, FFin, Chairman Ross J Finley BCom Ian J Hunter BA LLB, MBA Company Secretary Jill Brewster MBA, AGIA, ACG (CS), FIPA, FFA Principal Registered Office Share Registrar Investment Manager Accounting & Administration Auditors Suite 607 180 Ocean Street Edgecliff NSW 2027 Telephone: (02) 8917 0399 Boardroom Pty Limited GPO Box 3993 Sydney NSW 2001 Shareholder enquiries telephone: (within Australia) 1300 737 760 (outside Australia) +61 2 9290 9600 Kaplan Funds Management Pty Limited Suite 607 180 Ocean Street Edgecliff NSW 2027 Telephone: (02) 8917 0300 Kaplan Funds Management Pty Ltd Suite 607, 180 Ocean Street Edgecliff NSW 2027 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 For the year ended 30 June 2021 Review of Operations and Activities The 2021 year saw good performance results from Ironbark, as the market recovered, investor confidence improved and equity market valuations in some instances moved to historically record levels. Investment Performance For the year to 30 June 2021, the portfolio returned 16.5% inclusive of franking credits, outperforming the Benchmark (1 year swap + 6%p.a.) by 10.4%. This was a very satisfactory result with performance achieved with a portfolio that has a lower volatility than the market. The performance over 10 years of 7.7% inclusive of franking credits, is in line with the Benchmark return. The Investment Manager's report by Kaplan Funds Management (KFM) which follows the Chairman’s Report, sets out in detail the investment experience in the 2021 financial year. Results for the Year The positive performance of the portfolio contributed to the $6.66m profit after tax, up from a loss of $2.61m on the previous corresponding year. The strong performance in the market contributed to the $9.16m unrealised gain, particularly from BHP, the banks, and certain property & infrastructure trusts. Revenue excluding net gains and losses on the trading portfolio was down 4.1% on the prior year, with dividends and distributions rebounding in the second half, as the economy recovered in an extremely low interest rate environment. The 2021 year saw a reduction in the MER from 0.93% to 0.86% aided by the rising equity market. Since the end of the financial year, the Directors have declared a fully franked dividend of 1.25 cents per share to be paid on 29 September 2021. Based on the current legislation, this dividend will be franked at the 25% tax rate. Dividend Outlook While profits have been substantial, the ability to pay fully franked dividends was constrained in FY21 by a lack of franking credits. The Company accumulates franking credits from the receipt of franked dividends from its investments and the Company has not paid tax during the year because profit was largely comprised of unrealised gains. The Company pays tax when there are realised gains, after having regard to realised tax losses. Dividends from underlying investments improved in the 2nd half of FY21 as the impact of government stimulus assisted the faster recovery and confidence was restored post the March 2020 decline. We expect to see this continue in 1st half FY22 with better than expected corporate earnings providing the catalyst for improved dividends. As companies navigate the conditions from the COVID uncertainties, corporate earnings may be variable. Capital Management Since the AGM approval and announcement of the Buy-Back in November 2020, the share price has rallied and the discount on the Ironbark shares has narrowed. The Buy-Back of up to 30% of shares is scheduled to occur for a 4 week period, commencing on 5 October 2021 and ending on 1 November 2021. The Buy- Back price in October will be referenced to the NTA excluding net deferred tax assets (i.e. deferred tax assets less deferred tax liabilities). As at 31 July 2021 the reference NTA was $0.545. The Board continues to monitor capital management initiatives in the LIC industry, taking into account the scale of the Company, and we note significant actions such as the Buy-Back in October are always subject to shareholder approval. 2 Ironbark Capital Limited ABN 89 008 108 227 Review of Operations and Activities For the year ended 30 June 2021 Ironbark Outlook The outlook for 2022 will be subject to the economic conditions arising from the pandemic recovery as vaccinations are deployed to combat the ongoing impact of COVID-19 and its variants. As economies recover and confidence resumes, inflationary concerns remain, and we expect continued volatility as the challenges emanating from the COVID-19 pandemic continue. Going forward, the Ironbark portfolio remains positioned to deliver satisfactory returns within an acceptable risk profile. Michael J Cole AM Chairman 3 Ironbark Capital Limited ABN 89 008 108 227 Corporate Governance Statement For the year ended 30 June 2021 Corporate Governance Statement The Board of Ironbark Capital Limited are committed to achieving high standards of corporate governance. Ironbark Capital Limited has reviewed its corporate governance practices against the ASX Corporate Governance Principles and Recommendations (4th edition) published by the ASX Corporate Governance Council. The 2021 Corporate Governance Statement is dated as at 30 June 2021 and reflects the corporate governance practices in place throughout the 2021 financial year. The 2021 Corporate Governance statement was approved by the Board on 24 August 2021. The Corporate Governance Statement can be viewed on www.ironbarkcapital.com/about/corporate-governance the Company’s website at 4 Ironbark Capital Limited ABN 89 008 108 227 Investment Manager Report Year Ended 30 June 2021 Investment Manager Report –financial year to 30 June 2021 The manager’s focus is to deliver consistent returns and a high fully franked dividend yield from the portfolio. IBC’s performance benchmark is the 1-year swap rate plus 6% per annum. Performance measurement includes franking credits and option premium income. Franking credits are a significant source of return from IBC’s hybrid investments and for shareholders. Option premium income is generated from buy & write activity and varies with market conditions. Over the financial year, realised option premium income recorded a loss of $1.26m (2.1% of the portfolio) from rolling to higher option strike prices. Option premium losses were more than offset by higher unrealised stock gains. The calculation of the portfolio’s current running yield of 5.7% excludes option income because realised option premiums are highly variable from year to year. IBC recorded a good portfolio return of 16.5% over the financial year outperforming its benchmark return of 6.1%. Since inception, over 18.5 years including two crisis periods (GFC & Covid-19) the portfolio achieved a return of 9.0%pa with risk measured in terms of volatility approximately 56% of equity market risk. n r u t e r % 30 25 20 15 10 5 0 IBC Performance  since inception to 30 June 2021 9.0 9.6 8.0 7.7 8.1 7.8 7.5 6.7 7.3 7.3 8.4 7.2 7.7 7.1 8.5 6.8 16.5 6.3 5.6 6.1  18.5yrs %pa  10yrs %pa  9yrs %pa  7yrs %pa  6yrs %pa  5yrs %pa  4yrs %pa  3yrs %pa  2yrs %pa  1 yr %pa IBC portfolio+franking BENCHMARK (1 yr swap+6%pa) ASX300 Accum Index IBC’s focus on income generation and capital preservation from a balanced portfolio structure has delivered very good risk adjusted returns compared to the equities market over the longer term. The portfolio recovered strongly from the pandemic sell off last year to record a return well in excess of the absolute return benchmark in the 2021 financial year. IBC Portfolio Volatility vs ASX Index Volatility 6 month rolling period  (risk measurement) 50% 40% 30% 20% 10% 0% 3 0 ‐ n u J 3 0 ‐ c e D 4 0 ‐ n u J 4 0 ‐ c e D 5 0 ‐ n u J 5 0 ‐ c e D 6 0 ‐ n u J 6 0 ‐ c e D 7 0 ‐ n u J 7 0 ‐ c e D 8 0 ‐ n u J 8 0 ‐ c e D 9 0 ‐ n u J 9 0 ‐ c e D 0 1 ‐ n u J 0 1 ‐ c e D 1 1 ‐ n u J 1 1 ‐ c e D 2 1 ‐ n u J 2 1 ‐ c e D 3 1 ‐ n u J 3 1 ‐ c e D 4 1 ‐ n u J 4 1 ‐ c e D 5 1 ‐ n u J 5 1 ‐ c e D 6 1 ‐ n u J 6 1 ‐ c e D 7 1 ‐ n u J 7 1 ‐ c e D 8 1 ‐ n u J 8 1 ‐ c e D 9 1 ‐ n u J 9 1 ‐ c e D 0 2 ‐ n u J 0 2 ‐ c e D 1 2 ‐ n u J IBC Volatility ASX Index Volatility 5   Ironbark Capital Limited ABN 89 008 108 227 Investment Manager Report Year Ended 30 June 2021 Portfolio The portfolio is structured with an emphasis on income through yield orientated securities (hybrids and corporate bonds, utilities, property trusts) and buy & write positions in Banks, BHP, Telstra and other leading companies. The portfolio’s running yield was 5.7% inclusive of franking credits but excluding option premium income. The buy & write strategy involves buying selective shares and selling, subject to appropriate timing, call options over those shares. This strategy gives away some of the upside potential from a shareholding but generates option premium income consistent with the income emphasis of the portfolio. The portfolio is diversified across 26 different entities. Higher risk exposures in banks, industrials and resources are largely held through buy & write option positions for income enhancement or added protection. The portfolio’s hybrid and corporate bond holdings are mostly floating rate securities with little duration risk. Approximately 38% of the portfolio was held in hybrids and corporate bonds and 18% in buy & writes in Banks, Telstra, and BHP. The balance was represented by 21.2% in property trusts, 2.3% in mid-cap and small companies, 4.9% in utilities and 15.9% held in cash & option delta. Asset allocation reflects a cautious stance. IRONBARK CAPITAL ASSET ALLOCATION  ‐ 30 June 2021 Bank Notes & Hybrids Basel III 5.9% 2.3% 12.3% 15.9% 25.6% 38% Corporate Sub Notes Non Bank Hybrids & Corp Prefs  Utilities & Infrastructure Property Trusts 5.6% 6.5% 4.9% Banks 21.2% portfolio running yield 5.7% (includes franking credits but excludes option premium income) Top 50 Industrials Ex Top 50 Industials Materials & Energy Cash & Option Delta 6 Ironbark Capital Limited ABN 89 008 108 227 Investment Manager Report Year Ended 30 June 2021 Portfolio Performance-financial year to 30 June 2021 The portfolio recorded a good return of 16.5% for the financial year, increasing 7.1% in the June half and 8.9% in the December half period. Hybrids and corporate bonds representing around 38% of the portfolio gained 7.9% with more than half of the return driven by margin compression. Average bank hybrid margins compressed over the year from around 3.7% to around 2.2%. Major bank capital positions remained strong and new issuance was largely replacement securities. The portfolio benefited from the early redemption of NAB Income Securities (NABHA) that returned 12.7%. The portfolio participated in successful sub debt issuance by Ampol and Ausnet marking the return of investment grade corporate sub debt carrying a higher margin for partial equity credit. Regulated utilities exposure through Spark Infrastructure (SKI) was increased to 4.9% of the portfolio. SKI retuned 10.1% over the year and subsequent to June, SKI received a takeover bid at a 30% premium. Our preference for the stability offered by regulated utilities proved beneficial compared to losses experienced by utilities exposed to electricity generation markets. Property trusts holdings performed well gaining 17.1%, representing 21% of the portfolio. Upward property revaluations for the 6 months to June and bond yield compression supported gains. Property revaluations in the six months to June were strongest for industrial that rose 12%, followed by long WALE trusts +9%, neighbourhood retail +5% and office +3%. The portfolio was weighted towards long wale and industrial trusts. Buy & writes were focused on the banks and BHP. These stocks lead the market rally with gains of over 40%. Good returns from buy & writes were delivered of 27% even though call option writing constrained the upside. IRONBARK CAPITAL Jun 2021 12 months ‐ performance & sector contribution Benchmark (1yr swap+6%) PORTFOLIO TOTAL hybrids & corp bonds buy & writes & equities utilities property trusts cash 6.06% 9.39% 16.54% 3.16% 3.56% 0.43% 0.00% ‐7.0% ‐2.0% 3.0% 8.0% 13.0% 18.0% IRONBARK CAPITAL Jun 2021 12 months‐ comparative sector returns hybrids & corp bonds buy & writes & equities utilities ‐18.6% property trusts cash 7.1% 7.9% 10.1% 28.5% 26.9% *ASX300 Accum Index 33.2% 17.1% 0.1% 0.1% ASX Index Returns Fund Sector Returns ‐40.0% ‐20.0% 0.0% 20.0% 40.0% KAPLAN FUNDS MANAGEMENT 7 Ironbark Capital Limited ABN 89 008 108 227 Portfolio Shareholdings as at 30 June 2021 ASX Code Security Market Value* $'000 % of portfolio % exposure** ANZ CBA NAB WBC ALD1280 AMPPA ANZPG/PI AUS1080 AYUPA BOQPE/PF BENPG CBAPG/PI IAGPD MAC05 MBLPC MQGPC/PD NABPD/PF/PH NAB25 NAB25F QUBHA RHCPA SUNPF/PG WBCPG TLS BHP AUHW CIP CLW GOZ SCP WPR SDF D2O SKI Banks ANZ Banking Group Limited Commonwealth Bank of Australia Limited National Australia Bank Limited Westpac Banking Corporation Limited Hybrids & Corporate Bonds Ampol Limited - Subordinated Notes (Unlisted) AMP Limited - Capital Notes ANZ Banking Group Limited - Capital Notes AusNet Services Limited - Subordinated Notes (Unlisted) Australian Unity Limited - Fixed Mutual Capital Instrument Bank of Queensland Limited - Capital Notes Bendigo & Adelaide Bank Limited - Convertible Preference Shares Commonwealth Bank of Australia Limited - Capital Notes Insurance Australia Group Limited - Capital Notes Macquarie Bank Limited - Subordinated Notes (Unlisted) Macquarie Bank Limited - Capital Notes Macquarie Group Limited - Capital Notes National Australia Bank Limited - Capital Notes National Australia Bank Limited - Capital Notes (Unlisted) National Australia Bank Limited - Fixed Capital Notes (Unlisted) Qube Holdings Limited - Subordinated Notes Ramsay Healthcare Limited - Perpetual Preference Securities Suncorp Group Limited - Capital Notes Westpac Banking Corporation Limited - Capital Notes Large Industrial Telstra Corporation Limited Materials & Energy BHP Billiton Limited Property Australian Unity Healthcare Wholesale Fund (Unlisted) Centuria Industrial REIT Charter Hall Long WALE REIT Growthpoint Properties Australia SCA Property Group Waypoint REIT Small Industrial Steadfast Group Limited Utilities & Infrastructure Duxton Water Limited Spark Infrastructure Group Cash 3,010 3,969 2,083 3,542 12,604 1,312 301 1,078 1,045 1,075 2,625 487 1,231 2,091 530 653 1,552 3,116 525 509 1,339 801 2,686 1,938 24,894 340 340 8,276 8,276 2,666 719 5,441 512 239 4,566 14,143 1,474 1,474 64 3,209 3,273 1,243 4.6 6.0 3.1 5.3 19.0 2.0 0.5 1.6 1.6 1.6 4.0 0.7 1.9 3.2 0.8 1.0 2.3 4.7 0.8 0.8 2.0 1.2 4.0 2.9 37.6 0.5 0.5 12.5 12.5 4.0 1.1 8.2 0.8 0.4 6.9 21.4 2.2 2.2 0.1 4.8 4.9 1.9 2.7 4.5 1.6 3.5 12.3 2.0 0.5 1.6 1.6 1.6 4.0 0.7 1.9 3.2 0.8 1.0 2.3 4.7 0.8 0.8 2.0 1.2 4.0 2.9 37.6 - - 5.9 5.9 4.0 1.1 8.2 0.8 0.4 6.9 21.4 2.2 2.2 0.1 4.8 4.9 15.7 *Includes market value of options written against holdings **Includes option delta written against holdings 66,247 100.0 100.0 ` 8 Ironbark Capital Limited ABN 89 008 108 227 Directors’ Report Year ended 30 June 2021 Directors’ Report Your Directors present their report on the Company for the year ended 30 June 2021. 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 AM 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 Securities Exchange. Dividends Dividends paid to members during the financial year were as follows: Record Date Dividend Rate Total Amount $’000 Date of Payment % Franked 2021 Ordinary shares - Interim 2020 Ordinary shares - Final Ordinary shares – Interim 26/02/2021 1.0cps $1,231 23/03/2021 100 16/06/2020 1.0cps $1,231 26/06/2020 100 20/02/2020 1.2cps $1,478 12/03/2020 100 Subsequent to year end, the Directors declared a final fully franked dividend of 1.25 cents per share with record date of 3 September 2021 and payable on 29 September 2021. Review of Operations The profit from ordinary activities after income tax amounted to $6,660,000 (2020: Loss $2,614,000). The net tangible asset backing before tax on unrealised gains for each ordinary share as at 30 June 2021 amounted to $0.555 per share (2020: $0.492 per share). The NTA was after payment of 1.0 cents per share fully franked dividends. At the Company’s 2020 Annual General Meeting held on 10 November 2020, the shareholders approved an on-market buy-back for up to 30% of the shares on issue. The on-market buy-back is scheduled for a period of one month commencing 5 October 2021 and ending 1 November 2021. Earnings per share 2021 Basic and diluted earnings per share (cents per share) 5.41 2020 (2.12) 9 Ironbark Capital Limited ABN 89 008 108 227 Directors’ Report Year ended 30 June 2021 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 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 or economic entity in subsequent financial years. Likely developments and expected results of operations As stated in the Chairman's Review of Operations & Activities, the Company expects continued volatility as the challenges emanating from the COVID-19 pandemic recovery evolves. The Company 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 in the current economic climate. 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 AM B Ec, M Ec, F Fin Chairman Experience and expertise Investment manager and investment banker Former directorships Chairman of Platinum Asset Management Limited. Chairman, IMB Limited. Interests in shares 2,300,000 shares Ross J Finley B Comm Experience and expertise Investment manager and stockbroker Other current directorships Director, WAM Leaders Limited Director, The Shepherd Foundation Director, Century Australia Investments Limited Interests in shares 700,000 shares 10 Ironbark Capital Limited ABN 89 008 108 227 Directors’ Report Year ended 30 June 2021 Ian J Hunter BA LLB, MBA Audit Committee Chairman Experience and expertise Banking and finance Other directorships Director, Platinum Asia Investments Limited Interests in shares 1,663,631 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. She has been Company Secretary for a number of companies 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. Meetings of directors The numbers of meetings of the Company’s Board of Directors and Audit Committee held during the year ended 30 June 2021, and the numbers of meetings attended by each Director were: Board meetings Audit Committee Michael J Cole Ross J Finley Ian J Hunter A 4 4 4 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 B 4 4 4 A 2 2 2 B 2 2 2 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, 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. The Company has no employees as the investment management and administration services are outsourced. 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. Notwithstanding this, Board members are subject to ongoing performance monitoring and regular performance reviews. 11 Ironbark Capital Limited ABN 89 008 108 227 Directors’ Report Year ended 30 June 2021 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 table shows details of the remuneration received by the Directors of the Company for the current and previous financial year. 2021 Name MJ Cole RJ Finley IJ Hunter 2020 Name MJ Cole RJ Finley IJ Hunter Cash salary and fees $ Superannuation $ 22,000 22,000 22,000 66,000 - - - - Cash salary and fees $ Superannuation $ 22,000 22,000 22,000 66,000 - - - - Total $ 22,000 22,000 22,000 66,000 Total $ 22,000 22,000 22,000 66,000 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 from Ironbark Capital Limited. Kaplan Funds Management Pty Limited is remunerated for services rendered pursuant to an Administrative Services Agreement effective 1 April 2014. 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. (ii) Share holdings The relevant interest in the shares of the Company of each director and as notified to the ASX is as follows: Insurance and indemnification of officers and auditors During the financial year, the Company paid a premium in respect of a contract insuring the Directors of the Company, the Company Secretary and any related body corporate against liability incurred as such by a Director or Secretary to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. No indemnities have been given or insurance premiums paid during or since the end of the financial year, for any person who is or has been an auditor of the Company. 12 Ironbark Capital Limited ABN 89 008 108 227 Directors’ Report Year ended 30 June 2021 2021 Name Balance at the start of the year Net movement Balance at the end of the year Directors of Ironbark Capital Limited Ordinary shares Michael J Cole Ross J Finley Ian J Hunter 2,152,971 700,000 1,663,631 4,516,602 147,029 - - 147,029 2,300,000 700,000 1,663,631 4,663,631 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 or intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001. Non-audit services No non-audit services were performed by the auditors or consultation fees were incurred by the Company during the year ended 30 June 2021 (2020: $nil). Auditor’s independence declaration A copy of the auditor‘s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 14. Rounding of amounts The Company is of a kind referred to in Instrument 2016/191, issued by the Australian Securities and Investments commission, relating to the ‘rounding off’ of amounts in the financial statements and Directors’ Report. Amounts in the Directors’ Report have been rounded off in accordance with that Instrument to the nearest thousand dollars, or in certain cases, to the nearest dollar. This report is made in accordance with a resolution of the Directors. Michael J Cole AM Director Sydney 25 August 2021 13 IRONBARK CAPITAL LIMITED ABN 89 008 108 227 AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF IRONBARK CAPITAL LIMITED I declare that, to the best of my knowledge and belief, during the year ended 30 June 2021 there have been no contraventions of: i. ii. the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and any applicable code of professional conduct in relation to the audit. MNSA Pty Ltd Mark Schiliro Director Sydney 25th August 2021 14 Ironbark Capital Limited ABN 89 008 108 227 Statement of Profit or Loss and Other Comprehensive Income For the year ended 30 June 2021 Notes 6 6 19 (b) 19 (a) 17 2021 $'000 2020 $'000 2,643 6,441 9,084 2,758 (6,443) (3,685) (258) - (34) (48) (23) (32) (12) (28) (6) (66) (44) (37) (27) (23) (638) (265) 30 (18) (41) (28) (30) (13) (18) - (66) (46) (37) (18) (29) (579) Investment income from trading portfolio Revenue Net gains/(losses) on trading portfolio Total investment income from trading portfolio Expenses Management fees Performance 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/(loss) before income tax 8,446 (4,264) Income tax (expense)/benefit 7 (1,786) 1,650 Net profit/(loss) for the year Other comprehensive income/(loss) for the year net of tax Total comprehensive income for the year Basic and diluted earnings per share 22 6,660 - 6,660 Cents 5.41 (2,614) - (2,614) Cents (2.12) The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. 15 Ironbark Capital Limited ABN 89 008 108 227 Statement of Financial Position As at 30 June 2021 Notes 2021 $'000 2020 $'000 8 9 10 12 13 14 15 1,243 424 65,004 4 66,675 2,214 2,214 645 296 58,146 3 59,090 2,501 2,501 68,889 61,591 441 441 1,504 1,504 1,945 71 71 5 5 76 66,944 61,515 67,374 5,805 (6,235) 67,374 376 (6,235) 66,944 61,515 ASSETS Current assets Cash and cash equivalents Trade and other receivables Trading portfolio Other assets Total current assets Non- current assets Deferred tax assets Total non-current assets Total assets LIABILITIES Current liabilities Trade and other payables 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 16 Ironbark Capital Limited ABN 89 008 108 227 Statement of Changes in Equity For the year ended 30 June 2021 Issued capital $'000 Profit reserve $'000 Accumulated losses $'000 Total equity $'000 Notes Balance at 1 July 2020 67,374 376 (6,235) 61,515 Profit for the year Transfer to profit reserve Total comprehensive income for the year Transactions with owners in their capacity as owners: Dividends paid 16 - - - - - 6,660 6,660 6,660 (6,660) - 6,660 (1,231) - - 6,660 (1,231) Balance at 30 June 2021 67,374 5,805 (6,235) 66,944 Balance at 1 July 2019 Loss for the year Transfer to profit reserve Total comprehensive income for the year Transactions with owners in their capacity as owners: Dividends paid 16 67,374 961 (1,496) 66,839 - - - - - (2,614) (2,614) 2,125 (2,125) - 2,125 (4,739) (2,614) (2,710) - (2,710) Balance at 30 June 2020 67,374 376 (6,235) 61,515 The above Statement of Changes in Equity should be read in conjunction with the accompanying notes 17 Ironbark Capital Limited ABN 89 008 108 227 Statement of Cash Flows For the year ended 30 June 2021 Notes Cash flows from operating activities Interest received Net proceeds/(purchases) of trading portfolio Dividends and trust distributions received Other income received Management fees paid Performance fees paid Other expenses paid Net cash inflow/(outflow) from operating activities 21 2021 $'000 121 62 2,277 23 (256) - (398) 1,829 2020 $'000 124 1,516 2,740 - (267) (786) (281) 3,046 Cash flows from financing activities Dividends paid to shareholders Net cash (outflow)/inflow from financing activities 16(a) (1,231) (1,231) (2,710) (2,710) Net increase 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 8 Non cash: Distribution reinvestment 598 645 1,243 100 336 309 645 43 The above Statement of Cash Flows should be read in conjunction with the accompanying notes 18 Ironbark Capital Limited ABN 89 008 108 227 Notes to the Financial Statements For the year ended 30 June 2021 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 Suite 607, 180 Ocean Street, Edgecliff NSW 2027. The financial statements of Ironbark Capital Limited are for the year ended 30 June 2021. The Company is primarily involved in making investments and deriving revenue and investment income from listed securities and unit trusts in Australia. 2. 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. Basis of preparation (a) 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 25 August 2021. (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 Standards (IFRS). (ii) New and amended standards adopted by the Company Several amendments and interpretations apply for the first time in 2021, but do not have an impact on the Financial Statements of the Company:  AASB 2020-8: Interest Rate Benchmark Reform - Phase 2 Effective for annual reporting periods beginning on or after 1 January 2021 This phase focuses on issues that might affect financial reporting upon replacement of existing interest rate benchmarks, and amends the requirements in AASB 9, AASB 139, AASB 7, AASB 4 Insurance Contracts and AASB 16 Leases. The objective of the amendments is to minimise financial reporting consequences of a change in benchmark interest rates that Australian Accounting Standards may otherwise require, such as the derecognition or remeasurement of financial instruments, and the discontinuation of hedge accounting. Provided that the interest rate will be substantially similar before and after the replacement, the amendments:  Require changes to future cash flows that are directly required by the IBOR reform to be treated as if they were changes to a floating interest rate. Applying this expedient would not affect the carrying amount of the financial instrument. It also relieves entities of the need to assess whether modification or derecognition accounting applies under AASB 9 and AASB 139. These amendments had no impact on the financial statements of the Company. (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 through profit or loss. 19 Ironbark Capital Limited ABN 89 008 108 227 Notes to the Financial Statements For the year ended 30 June 2021 2. Significant accounting policies (continued) (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, refer to Note 4. Revenue recognition (b) Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns and trade allowances. (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 above. (c) Income tax The income tax expense (or tax benefit) for the period is the tax payable on the current period's taxable income based on the applicable income tax rate 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 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. 20 Ironbark Capital Limited ABN 89 008 108 227 Notes to the Financial Statements For the year ended 30 June 2021 2. Significant accounting policies (continued) 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. (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. 21 Ironbark Capital Limited ABN 89 008 108 227 Notes to the Financial Statements For the year ended 30 June 2021 2. Significant accounting policies (continued) 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 are 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. (h) Trade and other payables Trade and other payables represent liabilities for goods and services provided to the Company prior to the end of financial year that remain 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) Profit reserve The Profit Reserve is made up of amounts transferred from current and retained earnings that are preserved for future dividend payments. (k) 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. 22 Ironbark Capital Limited ABN 89 008 108 227 Notes to the Financial Statements For the year ended 30 June 2021 2. Significant accounting policies (continued) (l) (i) Earnings per share 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. (m) 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 Australian Taxation Office (ATO). In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the Statement of Financial Position. Cash flows are presented in the Statement of Cash Flows on a gross basis, except for the GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the ATO and are presented as operating cash flows. (n) Rounding of amounts The Company is of a kind referred to in Instrument 2016/191, 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 Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar. (o) Functional and presentation currency The functional and presentation currency of the Company is Australian dollars. (p) Operating Segments The Company operated in Australia only and the principal activity is investment. (q) New accounting standards for application in future periods Certain new accounting standards and interpretations, including AASB 17 (Insurance Contracts) have been published that are not mandatory for 30 June 2021 reporting periods and have not yet been adopted in the financial statements. None of these are expected to have a material impact on the financial statements. 23 Ironbark Capital Limited ABN 89 008 108 227 Notes to the Financial Statements For the year ended 30 June 2021 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. The Company's investments split by sector as at 30 June are set out below: Sector Financials Property Materials & Energy Utilities & Infrastructure Corporate floating rate notes Subordinated notes Corporate fixed rate notes Small Industrials Telecommunications services Healthcare & biotechnology Consumer staples Cash Total 2021 (%) 2020 (%) 19.0 21.3 12.5 5.0 30.8 4.4 2.4 2.2 0.5 - - 1.9 100.0 16.2 22.6 13.8 3.6 36.8 2.2 - 1.9 0.6 0.4 0.8 1.1 100.0 Securities representing over 5 percent of the trading portfolio at 30 June 2021 were: BHP Billiton Limited Charter Hall Long Wale REIT Commonwealth Bank of Australia Limited Waypoint REIT Westpac Banking Corporation Limited 2021 (%) 12.5 8.2 6.0 6.9 5.3 38.9 The Company is also not directly exposed to currency risk as all its investments are quoted in Australian dollars. 24 Ironbark Capital Limited ABN 89 008 108 227 Notes to the Financial Statements For the year ended 30 June 2021 3. Financial risk management (continued) The following table illustrates the effect on the Company's profit or loss based on an increase or fall in market prices of 5% and 10% on the investment assets in the Company’s portfolio at reporting date, assuming a flat tax rate of 26 percent (2020: 27.5 percent): Index Change in variable by +5%/-5% (2020: +5%/-5%) Change in variable by +10%/-10% (2020: +10%/-10%) (ii) Cash flow and fair value interest rate risk Impact on post-tax profit 2021 2020 $'000 $'000 $'000 $'000 2,405 4,810 (2,405) (4,810) 2,108 4,216 (2,108) (4,216) 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 risk. It includes the Company's assets and liabilities at fair values, categorised by the earlier of contractual repricing or maturity dates. 30 June 2021 Financial Assets Cash and cash equivalents Trade and other receivables Trading portfolio Other assets Financial liabilities Trade and other payables Net exposure 30 June 2020 Financial Assets Cash and cash equivalents Trade and other receivables Trading portfolio Other assets Financial liabilities Trade and other payables Net exposure Floating interest rate $'000 Fixed interest rate $'000 Non-interest bearing $'000 1,243 - 23,310 - 24,553 - - 1,584 - 1,584 - 424 40,110 4 40,538 Total $'000 1,243 424 65,004 4 66,675 - - - - (441) (441) (441) (441) 24,553 1,584 40,097 66,234 Floating interest rate $'000 Fixed interest rate $'000 Non-interest bearing $'000 Total $'000 645 296 58,146 3 59,090 (71) (71) - 296 35,210 3 35,509 (71) (71) 35,438 59,019 645 - 22,936 - 23,581 - - 23,581 - - - - - - - - 25 Ironbark Capital Limited ABN 89 008 108 227 Notes to the Financial Statements For the year ended 30 June 2021 3. Financial risk management (continued) The weighted average interest rate of the Company's cash and cash equivalents at 30 June 2021 is 0.001% pa (2020: 0.318% pa). Sensitivity At 30 June 2021, 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 $136,269 higher/ $136,269 lower (2020: changes of 75 bps/75 bps: $128,220 higher/$128,220 lower). (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 2021. 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. At 30 June 2021 Non-derivatives Trade and other payables Total non-derivatives Less than 1 month $'000 More than 1 month $'000 441 441 - - 26 3. Financial risk management (continued) At 30 June 2020 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 2021 Less than 1 month $'000 More than 1 month $'000 71 71 - - (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. 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 2021 and 30 June 2020: 30 June 2021 Financial assets Trading portfolio Total 30 June 2020 Financial assets Trading portfolio Total Level 2 $'000 Level 3 $'000 6,587 6,587 - - Level 2 $'000 Level 3 $'000 2,976 2,976 - - Total $'000 65,004 65,004 Total $'000 58,146 58,146 Level 1 $'000 58,417 58,417 Level 1 $'000 55,170 55,170 27 Ironbark Capital Limited ABN 89 008 108 227 Notes to the Financial Statements For the year ended 30 June 2021 3. Financial risk management (continued) 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 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, distribution and interest income and from the sale of its trading portfolio. 6. Investment income Revenue Dividends Interest Distributions Other income Net gains/(losses) on trading portfolio Net realised (losses) on trading portfolio Net unrealised gains/(losses) on trading portfolio 2021 $'000 1,575 128 918 22 2,643 (2,723) 9,164 6,441 2020 $'000 1,864 119 775 - 2,758 (1,870) (4,573) (6,443) 9,084 (3,685) 28 Ironbark Capital Limited ABN 89 008 108 227 Notes to the Financial Statements For the year ended 30 June 2021 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 2021 $'000 (540) 2,326 1,786 2020 $'000 (493) (1,157) (1,650) 1,786 (1,650) (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 26% (2020: 27.5%) 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 Realised taxable investment gain/(loss) Realised accounting investment (gain)/loss Adjustments for current tax of prior year Income tax expense/(benefit) 8. Cash and cash equivalents Cash at bank and in hand Risk exposure 2021 $'000 8,446 2,196 (585) 152 (156) (478) 708 (51) 1,786 2020 $'000 (4,264) (1,173) (798) 219 160 (540) 514 (32) (1,650) 2021 $'000 1,243 2020 $'000 645 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 National Australia Bank Limited which is rated AA- (2020: AA-) by Standard & Poor's. 29 9. Trade and other receivables Dividends and distributions receivable Interest receivable GST Receivable Ironbark Capital Limited ABN 89 008 108 227 Notes to the Financial Statements For the year ended 30 June 2021 2021 $'000 396 21 7 424 2020 $'000 280 13 3 296 Outstanding settlements are on the terms operating in the securities industry, which usually require settlement within two days of the date of a transaction. None of the receivables is past due or impaired at the end of the reporting period. 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 – held at fair value through profit or loss Listed equities Property and infrastructure trusts - listed Property trusts - unlisted Floating rate capital notes - listed Floating rate capital notes - unlisted Fixed rate notes - listed Fixed rate notes - unlisted Subordinated notes- listed Subordinated notes- unlisted 2021 $'000 2020 $'000 22,758 14,686 2,666 19,898 525 1,075 509 - 2,887 65,004 19,794 13,440 1,976 21,134 494 - - 802 506 58,146 The value of the trading portfolio includes the market value of options written against holdings (note 11). 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. 30 Ironbark Capital Limited ABN 89 008 108 227 Notes to the Financial Statements For the year ended 30 June 2021 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 buy 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 2021 $'000 Notional principal amounts 2020 $'000 (1,015) (1,422) 2021 $'000 - 2,202 12 2,214 2,501 (797) 510 2,214 2020 $'000 797 1,653 51 2,501 1,202 352 947 2,501 Australian exchange traded options 12. Deferred tax assets The balance comprises temporary differences attributable to: Net unrealised losses of investments Tax losses Other temporary differences Movements: Opening balance: Charged/credited: - (to)/from deferred tax liabilities - to profit or loss 31 Ironbark Capital Limited ABN 89 008 108 227 Notes to the Financial Statements For the year ended 30 June 2021 13. Trade and other payables Management fees payable Unsettled purchases Other payables 14. Deferred tax liabilities Notes 19(c) The balance comprises temporary differences attributable to: Accrued income Unrealised gains on investments Movements: Opening balance Charged/credited 15. Issued capital (a) Issued capital - to profit or loss - (from)/to deferred tax assets - prior year adjustment 2021 $'000 24 379 38 441 2020 $'000 22 - 49 71 2021 $'000 2020 $'000 5 1,499 1,504 5 2,326 (797) (30) 1,504 5 - 5 357 - (352) - 5 30 June 2021 Shares 30 June 2020 Shares 2021 $'000 2020 $'000 Ordinary shares - fully paid 123,166,545 123,166,545 67,374 67,374 (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. (c) Movements in ordinary share capital Balance at 1 July 2020 Balance at 30 June 2021 Number of shares 123,166,545 - 123,166,545 32 $'000 67,374 - 67,374 Ironbark Capital Limited ABN 89 008 108 227 Notes to the Financial Statements For the year ended 30 June 2021 15. Issued capital (continued) (d) 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. (e) 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 dividends Dividends not recognised at the end of the year On 25 August 2021, the Directors declared a final dividend of 1.25 cents per share fully franked payable on 29 September 2021, with a record date of 3 September 2021. The aggregate amount of the proposed final dividend to be paid out of the Profit Reserve at the end of the year but not recognised as a liability is: (b) Dividend franking account Opening balance of franking account Franking credits on dividends received Franking credits on ordinary dividends paid Closing balance of franking account Franking credits on dividends received after year end 33 2021 $'000 - 1,231 1,231 2020 $'000 1,232 1,478 2,710 1,540 - 2021 $'000 7 589 (433) 163 63 63 226 2020 $'000 237 798 (1,028) 7 15 15 22 Ironbark Capital Limited ABN 89 008 108 227 Notes to the Financial Statements For the year ended 30 June 2021 16. Dividends (continued) (c) Dividend rate 2021 Ordinary shares - Final Ordinary shares - Interim 2020 Ordinary shares - Final Ordinary shares – Interim Record Date Dividend Rate Total Amount $’000 Date of Payment % Franked 03/09/2021 1.25cps $1,540 29/09/2021 100 26/02/2021 1.0cps $1,231 23/03/2021 100 16/06/2020 1.0cps $1,231 26/06/2020 100 20/02/2020 1.2cps $1,478 12/03/2020 100 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: Audit and other assurance services MNSA Pty Ltd - Audit and review of financial statements 30 June 2021 $'000 30 June 2020 $'000 37 37 18. Contingencies 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 2021 (2020: nil). 34 Ironbark Capital Limited ABN 89 008 108 227 Notes to the Financial Statements For the year ended 30 June 2021 2021 $'000 66 2020 $'000 66 19. Related party transactions (a) Key management personnel Short-term benefits (b) Transactions with other related parties 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. Under the terms of the Management Agreement, a performance fee of 15% is payable for outperformance of the investment portfolio above the benchmark of 1 year swap rate plus 6%. The manager’s performance is adjusted to include the value of franking credits received or accrued during a measurement period and after deduction of Management Fees and any applicable GST. A highwater mark is reset every 3 years. The following transactions occurred with related parties (net of RITC): Management fees paid or payable (c) Outstanding balances 2021 $'000 258 2020 $'000 265 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 30 June 2021 $'000 30 June 2020 $'000 24 22 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 Other than noted elsewhere in this report, the Directors are not aware of any matter or circumstance that 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. 35 Ironbark Capital Limited ABN 89 008 108 227 Notes to the Financial Statements For the year ended 30 June 2021 21. Reconciliation of profit after income tax to net cashflow from operating activities Profit/(loss) for the year Unrealised (gains)/losses on trading portfolio Realised losses on trading portfolio Distribution reinvestment Change in operating assets and liabilities (Increase)/decrease in trade and other receivables (Decrease)/increase in trade and other payables - Less increase in trading portfolio payables Increase/(decrease) in tax Decrease in trading portfolio Net cash inflow from operating activities 22. Earnings per share (a) Basic earnings per share From continuing operations attributable to the ordinary equity holders of the company 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 holders of the company Total diluted earnings per share attributable to the ordinary equity holders of the company 2021 $'000 6,660 (9,164) 2,723 (100) (129) 370 (379) 1,786 62 1,829 2020 $'000 (2,614) 4,574 1,870 (43) 209 (816) - (1,650) 1,516 3,046 2021 Cents 2020 Cents 5.41 (2.12) 5.41 (2.12) 2021 Cents 2020 Cents 5.41 5.41 (2.12) (2.12) 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. (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 36 2021 Number 2020 Number 123,166,545 123,166,545 Ironbark Capital Limited ABN 89 008 108 227 Directors’ Declaration In the Directors' opinion: (a) the financial statements and notes set out on pages 15 to 36 are in accordance with the Corporations Act 2001, including: (i) (ii) complying with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and giving a true and fair view of the entity's financial position as at 30 June 2021 and of its performance for the year ended on that date, and there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. Note 2(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. (b) (c) The Directors have been given a declaration by Jill Brewster on behalf of Kaplan Funds Management Pty Limited, as a person who performs the Chief Executive functions of the Company, required by section 295A of the Corporations Act 2001. This declaration is made in accordance with a resolution of the Board of Directors. Michael J Cole AM Director Sydney 25 August 2021 37 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IRONBARK CAPITAL LIMITED ABN 89 008 108 227 Report on the Audit of the Financial Report Opinion We have audited the financial report of Ironbark Capital Limited (the Company), which comprises the statement of financial position as at 30 June 2021, the statement of profit or loss and other comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors’ declaration. In our opinion: (a) the financial report of Ironbark Capital Limited is in accordance with the Corporations Act 2001, including: i. giving a true and fair view of the Company’s financial position as at 30 June 2021 and of its performance for the year then ended; and ii. complying with Australian Accounting Standards and the Corporations Regulations 2001. (b) the financial report also complies with the International Financial Reporting Standards as disclosed in Note 2(a). Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Company in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants(including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 38 Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the year ended 30 June 2021. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key Audit Matter How Our Audit Addressed the Key Audit Matter Valuation and Existence of Trading portfolio The trading portfolio at 30 June 2021 listed, unlisted equity comprised of investments and exchange traded options of $65 million which constitutes 94% of the Company’s total assets. We focused on the valuation and existence of investments because trading investment represents the principal element of the net asset value disclosed on the Statement of Financial Position financial statements. the in We tested the valuation of investments by vouching the share prices to independent market pricing information multiplying the investment quantity held as at 30 June 2021, to ensure they are fairly stated. We agreed the existence of a sample of purchases and sales that occurred during the period to the contract notes of investments; agreeing the contract notes to the purchases and sales reports. We assessed the disclosure in the financial statements with reference to the requirements of accounting standards. Consideration of Covid-19 impact on fair value at balance date and subsequent event disclosure accurately disclosed on note 3(d) Fair value measurement and note 20 Events occurring after the reporting period. Revenue from Trading portfolio Auditing Standard ASAs presume there are risks of fraud in revenue recognition unless rebutted. We assessed the accounting policy for revenue recognition for compliance with the accounting standards and performed testing to ensure that revenue had been accounted for in accordance with the accounting policy. We focused on the cut-off, accuracy and completeness of dividend revenue, interest, dividend interest receivables. receivables and We found that the accounting policies implemented were in accordance with the accounting standards, and that revenue has been accounted for in accordance with the accounting policy. We tested the accuracy and completeness of dividend revenue by agreeing the dividends and distributions of a sample of investments to supporting documentation obtained from share registries. We tested the cut-off of dividend revenue and dividend receivables by checking the dividend details of a sample of investments from external market information and ensured that dividends that were declared before, but payable after, the reporting date were recorded. Consideration of Covid-19 impact on dividend receivables. 39 Other Information The directors are responsible for the other information. The other information comprises the information in the Company’s annual report for the year ended 30 June 2021, but does not include the financial report and the auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 2(a), the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements, the financial statements comply with International Financial Reporting Standards. In preparing the financial report, the directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. 40 Auditor’s Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonab le assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:  Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.  Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.  Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our co nclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.  Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.  Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Company audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguard s. From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. 41 Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included within the directors’ report for the year ended 30 June 2021. In our opinion the remuneration report of Ironbark Capital Limited for the year ended 30 June 2021, complies with Section 300A of the Corporations Act 2001. Responsibilities The directors of Ironbark Capital Limited are responsible for the preparation and presentation of the Remuneration Report in accordance with Section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. MNSA Pty Ltd Mark Schiliro Director Sydney 25th August 2021 42 Shareholder Information As at 20 August 2021 there were 1,623 shareholders of fully paid ordinary shares in Ironbark Capital Limited (ASX:IBC). These holdings were distributed as follows: Ironbark Capital Limited ABN 89 008 108 227 Shareholder Information Holdings Range 1‐1,000 1,001‐5,000 5,001‐10,000 10,001‐100,000 100,001 and over Total No. of  Shareholders 279 338 206 683 117 1,623 Shares 98,854 981,108 1,547,908 22,314,586 98,224,089 123,166,545 % 0.08 0.80 1.25 18.12 79.75 100.00 There were 246 shareholders holding less than a marketable parcel of $500 (971 shares). Major Shareholders The top 20 shareholders as at 20 August 2021 are listed below: Holder Name KAPLAN PARTNERS PTY LIMITED NATIONAL NOMINEES LIMITED CITICORP NOMINEES PTY LIMITED MRS GLENDA CLAIRE ORGILL ABTOURK (SYD NO 415) PTY LTD  AUSTRALIAN EXECUTOR TRUSTEES LIMITED  AGO PTY LTD  LIANGROVE MEDIA PTY LIMITED SUPENTIAN PTY LIMITED  BOND STREET CUSTODIANS LIMITED  LIANGROVE GROUP PTY LTD BOND STREET CUSTODIANS LIMITED  BOND STREET CUSTODIANS LIMITED  MISS SAMANTHA ORGILL MR ANTHONY GEOFFREY HARTNELL BOND STREET CUSTODIANS LIMITED  BOND STREET CUSTODIANS LIMITED  BOND STREET CUSTODIANS LIMITED  DANEJON PTY LIMITED  WENTRADING PTY LTD  Ordinary Shares Number Held 41,838,109 10,786,308 4,429,452 2,485,242 2,300,000 2,204,912 2,149,044 1,943,456 1,663,631 1,389,077 1,166,081 806,127 712,982 668,260 633,562 618,750 616,331 601,912 600,000 584,293 % 33.97% 8.76% 3.60% 2.02% 1.87% 1.79% 1.74% 1.58% 1.35% 1.13% 0.95% 0.65% 0.58% 0.54% 0.51% 0.50% 0.50% 0.49% 0.49% 0.47% Total Securities as per Register  123,166,545 78,197,529 63.49% 43 Ironbark Capital Limited ABN 89 008 108 227 Shareholder Information Voting rights The Constitution provides for votes to be cast for fully paid ordinary shares as follows: i. ii. on a show of hands, one vote for each shareholder; and on a poll, one vote for each share held. Substantial shareholders As at 20 August 2021 the name and holding of each substantial holder as disclosed in the notice received by Ironbark Capital in respect of the shareholder and their associates: Holder Name KAPLAN PARTNERS PTY LIMITED Notice Date 28 Dec 2018  On-market buy-back Ordinary Shares % Shareholding 46,445,116 37.71% The Company has an on-market buy-back arrangement in place which is due to be activated on 5 October 2021 for a 4 week period ending on 1 November 2021. Investment Management Agreement The Investment Management Agreement with Kaplan Funds Management Pty Limited, the Investment Manager, provides for an annual Management Fee of 0.40% p.a. based on the portfolio value at the end of each month, which is charged monthly. At the end of each financial year, the Company will determine whether a performance fee is payable, based on a rate of 15% of the outperformance of the benchmark 1 year swap rate plus 6%, adjusted for the value of franking credits received (after adjustment for the Management Fee and the applicable GST). The high water mark is reset every 3 years. Transaction Summary The Company recorded 439 security transactions (including options) during the financial year. Brokerage paid during the year net of RITC claimable was $33,763. 44 

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