ABN 89 008 108 227
IRONBARK CAPITAL LIMITED
APPENDIX 4E & ANNUAL REPORT
FOR THE YEAR ENDED
30 JUNE 2023
IRONBARK CAPITAL LIMITED
Results for Announcement to the Market
_________________________________________________________________
Year Ended 30 June 2023
This report is based on audited financial statements. The previous corresponding period is the
year ended 30 June 2022.
2023
2022
% Change
Revenue and Profit
Investment revenue from ordinary activities
$'000
7,059
$'000
1,375
Up
413.4%
Net profit after income tax expense
5,470
1,353
Up
304.3%
Earnings
2023
Cents
2022
Cents
% Change
Earnings per share
4.97
1.18
Up
321.2%
Net Tangible Asset Backing per share (NTA)
30-Jun-23 30-Jun-22
% Change
NTA before provision for tax on unrealised gains
$
0.567
$
0.535
Up
6.0%
NTA after provision for tax on unrealised gains
$
0.559
$
0.533
Up
4.9%
The NTA is after 2.35 cents per share of fully franked dividends paid in the period
and after the buy-back of 496,293 shares.
The final fully franked dividend for the 2023 financial year is 1.25 cents per share which is
to be paid on 27 September 2023 for shareholders registered as at record date of 6
September 2023. This is franked at the corporate tax rate of 25%.
The final fully franked dividend for the 2022 financial year was 1.25 cents per share which
was paid on 28 September 2022.
The interim dividend paid to shareholders on 30 March 2023 was 1.1 cents per share, fully
franked. The interim dividend for the corresponding period was 1 cent per share fully
franked.
The Dividend Reinvestment Plan remains suspended.
Ironbark Capital Limited
ABN 89 008 108 227
Annual Report
For the year ended 30 June 2023
Ironbark Capital Limited
ABN 89 008 108 227
Annual Report
For the year ended 30 June 2023
Contents
Corporate Directory
Chairman’s Report
Investment Manager Report
Portfolio Shareholdings at 30 June 2023
Directors’ Report
Auditor’s Independence Declaration
Financial Statements
Directors’ Declaration
Independent Auditor’s Report to the Members
Shareholder Information
Page
1
2
4
7
8
15
16
39
40
45
Ironbark Capital Limited
ABN 89 008 108 227
Corporate Directory
Directors
Michael Cole AM BEc, MEc, FFin, Chairman
Ian Hunter BA, LLB, MBA
Sam Kaplan BEc, MBA, FFin
Neal Hornsby MIPA, MBA, DipFS(FP), CertPM
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
Chairman’s Report
For the year ended 30 June 2023
Chairman’s Report
The 2023 financial year saw impressive results from Ironbark in a strong equity market despite the
inflationary pressures in Australia and globally.
Investment Performance
For the year to 30 June 2023, the Ironbark portfolio returned 13.7% inclusive of franking credits,
outperforming the Benchmark (1 year swap + 6%p.a.) by 3.9%. This was a very positive result with
performance achieved with a portfolio that has a lower volatility than the market. The performance over
3 years of 11.3%p.a. and over 7 years of 8.5%p.a. inclusive of franking credits, exceeds their benchmark
returns by 3.7% and 1.0% respectively, and has been achieved in disruptive and uncertain economic times.
The portfolio return over 20 years since inception is a very satisfactory 9.0%p.a.
The Ironbark performance reflects the Investment Manager’s absolute return focus and income emphasis
including the writing of call options. The Investment Manager's report by Kaplan Funds Management
(KFM) which follows the Chairman’s Report, sets out in detail the investment experience in this 2023
financial year.
Results for the Financial Year
The profit after tax of $5.5 million was up 304.3% from the $1.4 million achieved in the previous
corresponding year.
Investment revenue from ordinary activities of $7.1 million was up 413.4% on the prior year result. A key
component of the result is the change in fair value for the year of the underlying investments, which
results in the fluctuation in profit results in any year. The unrealised gains of $2.2m represented the
improvement in valuations for the year reflecting the strength in domestic and global equity markets and
was a key contributor to the good year end result. Realised gains for the year were $1.7 million,
predominantly from sales in the materials, financial services and property trust sectors, and option income
from the writing of call options.
Interest income increased by 275% reflecting the significant rise in interest rates and the addition to the
portfolio of unlisted subordinated notes during the financial year. The decrease in dividend income
reflects the change from the prior year’s record payout by BHP with the associated in-specie dividend of
Woodside Energy.
NTA per share after provision for tax on unrealised gains was $0.559, up 4.9% compared to the previous
period. The NTA is after payment of fully franked dividends of 2.35 cents per share.
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 27 September 2023.
Capital Management
In accordance with the Company’s announcement at the start of the financial year of an on-market share
buy-back for up to 10% of the Company’s shares over 12 months, the program was activated, and 496,293
shares were bought back in the period to 30 June 2023.
In accordance with the Company’s capital management program, the program has been extended for a
further 12 months until 19 July 2024. This provides the mechanism for the Company to buy back its shares
during prolonged periods of share price volatility when there is a significant discount to underlying NTA.
2
Ironbark Capital Limited
ABN 89 008 108 227
Chairman’s Report
For the year ended 30 June 2023
Dividend Outlook
The Corporate earnings of the underlying investments and the associated fully franked dividends received
allowed the Company to pay fully franked dividends in the 2023 financial year of 2.35 cents per share, and
subsequent to year end declare a 1.25 cents per share fully franked dividend payable in September 2023.
The Hybrid portfolio will continue to benefit from the high interest rates in the near term.
The Year Ahead
The year ahead will see the economic impact of inflation and the sharp interest rate rises on companies
and consumers. Whilst the conditions in the short to medium term may result in uncertain and challenging
times, the Ironbark portfolio remains well positioned to deliver fully franked dividends and satisfactory
returns within an acceptable risk profile.
Michael J Cole AM
Chairman
3
Ironbark Capital Limited
ABN 89 008 108 227
Investment Manager Report year ended 30 June 2023
Investment Manager Report – financial year to 30 June 2023
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 year, realised
option premium income was around $1.23m (2% of the portfolio). The calculation of the portfolio’s
current running yield of 7.4% excludes option income because realised option premiums are highly
variable from year to year.
IBC recorded a pleasing portfolio return of 13.7% over the financial year, outperforming its benchmark
return of 9.7% (1 year swap rate +6%pa). The ASX 300 Accumulation Index gained 14.4% over the year.
Since inception, over 20 years including two crisis periods (GFC & Covid-19) the portfolio achieved a
return of 9.0%pa with 53% of equity market risk measured in terms of volatility.
PERFORMANCE TO 30/6/23
Inception
10 Yr
5 Yr
3 Yr
2 Yr
1 Yr
FUM $61.1m
20.4 yrs % pa
% pa
% pa
% pa
% pa
% pa
IBC pre fees plus franking
1 yr swap +6%
Relative performance
volatility IBC
volatility ASX300
ASX 300 Accum
Vol relative to ASX
9.03
9.50
-0.48
7.2
13.7
8.87
53%
7.84
7.77
0.07
7.6
13.9
8.55
55%
8.58
7.42
1.16
9.5
16.5
7.12
58%
11.30
7.58
3.72
6.1
13.8
11.07
44%
8.77
8.34
0.43
7.1
14.8
3.27
48%
13.70
9.77
3.93
6.1
15.0
14.40
41%
KAPLAN FUNDS MANAGEMENT
IBC Portfolio performance before management fees + franking credits
(common based 5 years to 30 June 2023)
1.60
1.50
1.40
1.30
1.20
1.10
1.00
0.90
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IBC Portfolio (incl. franking credits)
All Bond & Hybrid Index
1 yr swap rate +6%
ASX 300 Accum
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 year, elevated
4
Ironbark Capital Limited
ABN 89 008 108 227
Investment Manager Report year ended 30 June 2023
volatility benefited the portfolio’s buy & write strategy and aggressive interest rate hikes supported
good returns from floating rate hybrids and corporate bonds.
IBC Portfolio Volatility vs ASX Index Volatility
6 month rolling period (risk measurement)
50%
40%
30%
20%
10%
0%
Portfolio
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ASX Index Volatility
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IBC Volatility
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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 leading companies. The
portfolio’s running yield was 7.4% 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 23 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 45.5% of the portfolio was held in hybrids and corporate bonds and 28% in buy & write
physical exposures (19.3% net of delta) in Banks, BHP and Woodside. The balance was represented by
19% in property trusts, 4% in mid-small industrial companies, 2.4% in small resources and 9.8% held in
cash & option delta.
IRONBARK CAPITAL ASSET ALLOCATION - 30 June 2023
Bank Notes & Hybrids Basel III
Corporate Sub Notes
32.9%
Non Bank Hybrids & Corp Prefs
9.8%
12.1%
4.1%
0.2%
9.5%
18.9%
4.3%
0.0%
8.3%
portfolio running yield 7.4%
(includes franking credits but excludes option premium income)
5
Utilities & Infrastructure
Property Trusts
Banks
Top 50 Industrials
Ex Top 50 Industials
Materials & Energy
Cash & Option Delta
Ironbark Capital Limited
ABN 89 008 108 227
Investment Manager Report year ended 30 June 2023
Portfolio Performance-financial year to 30 June 2023
The portfolio recorded a good return of 13.7% for the financial year period.
The main change to the portfolio over the year involved increased exposure to wholesale unlisted fixed
interest from 14% to 23% of the portfolio. The narrowing of trading margins between listed hybrid
securities and unlisted subordinated debt made the latter more attractive from a risk/return perspective
without loss of liquidity. The portfolio participated in primary issuance in CBA, ANZ, and QBE
subordinated notes.
Hybrid and corporate bonds returned 8.2% supported by a strong rise in floating rate distribution yields
with the 90 day bank bill reference rate increasing from 1.81% to 4.35% over the year.
Buy & writes returns of 25% benefited from a tilt towards resources and high option premiums from
elevated volatility. Option writing contributed 1.9% (realised and unrealised profits) to the total portfolio
return over the year.
Property trust holdings returned 8% rebounding from the aggressive sell off experienced in June last
year.
IRONBARK CAPITAL Jun 2023
12 months - performance & sector contribution
Benchmark (1yr swap+6%)
9.77%
PORTFOLIO TOTAL
13.70%
hybrids & corp bonds
3.68%
buy & writes & equities
8.29%
property trusts
cash
1.67%
0.06%
-7.0%
-2.0%
3.0%
8.0%
13.0%
18.0%
IRONBARK CAPITAL Jun 2023
12 months- comparative sector returns
hybrids & corp bonds
buy & writes & equities
property trusts
7.5%
8.2%
8.1%
8.0%
14.4%
*ASX300 Accum Index
25.1%
cash
2.6%
2.2%
ASX Index Returns
Fund Sector Returns
0.0%
10.0%
20.0%
30.0%
KAPLAN FUNDS MANAGEMENT
6
Ironbark Capital Limited
ABN 89 008 108 227
Portfolio Shareholdings as at 30 June 2023
ASX Code
Security
Market
Value*
$'000
% of
portfolio
%
exposure**
ANZ
CBA
WBC
ALD26/27
ANZPI/PJ/PK
ANZ29
AUS1080
AYUPA
BOQPE/PF
CBA03/04/11
CBAPI/PM
IAGPE
MAC05/06
MBLPC
MQGPC/PD/PF
NABPF/PH/PI
NAB25
NAB29
NAB27
QBE39
QUBHA
RHCPA
SUNPG/PI
SUN06
WBCPK
BHP
SMR
WDS
AUHW
CIP
CLW
WPR
SDF
TLS
D2O
Banks
ANZ Banking Group Limited
Commonwealth Bank of Australia Limited
Westpac Banking Corporation Limited
Hybrids & Corporate Bonds
Ampol Limited - Subordinated Notes (Unlisted)
ANZ Banking Group Limited - Capital Notes
ANZ Banking Group Limited - Subordinated Notes (Unlisted)
AusNet Services Limited - Subordinated Notes (Unlisted)
Australian Unity Limited - Fixed Mutual Capital Instrument
Bank of Queensland Limited - Capital Notes
Commonwealth Bank of Australia Limited -Subordinated Notes(Unlisted)
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)
National Australia Bank Limited - Subordinated Notes (Unlisted)
QBE Insurance Group Limited - Subordinated Notes (Unlisted)
Qube Holdings Limited - Subordinated Notes
Ramsay Healthcare Limited - Perpetual Preference Securities
Suncorp Group Limited - Capital Notes
Suncorp Group Limited - Subordinated Notes (Unlisted)
Westpac Banking Corporation Limited - Capital Notes
Materials & Energy
BHP Billiton Limited
Stanmore Resources Limited
Woodside Energy Group Limited
Property
Australian Unity Healthcare Wholesale Fund (Unlisted)
Centuria Industrial REIT
Charter Hall Long WALE REIT
Waypoint REIT
Financial Services
Steadfast Group Limited
Communication Services
Telstra Group Limited
Utilities & Infrastructure
Duxton Water Limited
Cash
2,912
2,804
2,927
8,643
2,279
862
1,015
1,001
1,007
596
6,141
1,007
819
1,021
633
1,724
1,763
511
421
519
505
1,308
795
2,140
502
1,251
27,820
6,754
1,483
1,265
9,502
3,504
88
3,812
4,113
11,517
2,340
2,340
210
210
138
138
647
4.8
4.6
4.8
14.2
3.7
1.4
1.7
1.6
1.7
1.0
10.1
1.7
1.3
1.7
1.0
2.8
2.9
0.8
0.7
0.9
0.8
2.2
1.3
3.5
0.8
2.1
45.7
11.1
2.4
2.1
15.6
5.8
0.1
6.3
6.8
19.0
3.9
3.9
0.3
0.3
0.2
0.2
1.1
3.0
2.3
3.8
9.1
3.7
1.4
1.7
1.6
1.7
1.0
10.1
1.7
1.3
1.7
1.0
2.8
2.9
0.8
0.7
0.9
0.8
2.2
1.3
3.5
0.8
2.1
45.7
7.8
2.4
1.6
11.8
5.8
0.1
6.3
6.8
19.0
3.9
3.9
0.2
0.2
0.2
0.2
10.1
*Includes market value of options written against holdings
**Includes option delta written against holdings
60,817
100.0
100.0
7
Ironbark Capital Limited
ABN 89 008 108 227
Directors’ Report
Year ended 30 June 2023
Directors’ Report
The Directors present their report on the Company for the year ended 30 June 2023.
Directors
The following persons were Directors of Ironbark Capital Limited during the financial year and up to the
date of this report:
Michael Cole AM
Neal Hornsby (appointed 1 August 2023)
Ian Hunter
Sam Kaplan
Directors have been in office since the start of the financial year to the date of this report unless
otherwise stated.
Principal activities
The principal activity of the Company is the investment in securities listed on the Australian Securities
Exchange. The primary focus emanating from this activity is the payment of fully franked dividends and
the preservation of capital.
Review of Operations
The profit from ordinary activities after income tax amounted to $5.47 million (2022: Profit $1.35 million).
The profit reflects the positive return of the investment portfolio of 13.7% for the year inclusive of
franking credits, compared to the Benchmark (1 year swap + 6%p.a.) of 9.8%, a very satisfactory result.
A key component of the result is the change in fair value for the year of the underlying investments,
which results in the fluctuation in profit results in any year. The unrealised gains of $2.2m represented
the improvement in valuations for the year reflecting the strength in domestic and global equity markets
and was a key contributor to the good year end result. Realised gains for the year were $1.7 million,
predominantly from sales in the materials, financial services and property trust sectors, and gains from
the trading of call options.
Interest income increased by 275% reflecting the significant rise in interest rates and the addition to the
portfolio of unlisted subordinated notes during the financial year. The decrease in dividend income
reflects the change from the prior year’s record payout by BHP with the associated in-specie dividend
of Woodside Energy.
NTA per share after provision for tax on unrealised gains was $0.559, up 4.9% compared to the previous
period. The NTA is after payment of fully franked dividends of 2.35 cents per share.
In accordance with the Company’s announcement at the start of the financial year of an on-market
share buy-back for up to 10% of the Company’s shares over 12 months, the program was activated, and
496,293 shares were bought back in the period to 30 June 2023.
In accordance with the Company’s capital management program, the program has been extended for
a further 12 months until 19 July 2024. This provides the mechanism for the Company to buy back its
shares during prolonged periods of share price volatility when there is a significant discount to
underlying NTA.
8
Ironbark Capital Limited
ABN 89 008 108 227
Directors’ Report
Year ended 30 June 2023
Dividends
Subsequent to year end, the Directors declared a final fully franked dividend of 1.25 cents per share
with record date of 6 September 2023 and payable on 27 September 2023.
The following dividends paid to members during the financial year were fully franked at the corporate
tax rate of 25%:
Record
Date
Dividend
Rate
Total Amount
$’000
Date of
Payment
% Franked
2023
Ordinary shares -
Interim
Ordinary shares -
2022 Final
07/03/2023
1.1cps
$1,211
30/03/2023
100
02/09/2022
1.25cps
$1,377
28/09/2022
100
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
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 subject to the current economic climate.
Environmental regulation
The Company is not subject to any significant environmental regulation under Commonwealth or State
law.
Information on directors
Michael Cole AM B Ec, M Ec, F Fin Chairman - Non-Executive Independent Director
Experience and expertise
Investment manager and investment banker
Former directorships in last 3 years
Chairman of Platinum Asset Management Limited.
Interests in shares
500,000 shares
9
Ironbark Capital Limited
ABN 89 008 108 227
Directors’ Report
Year ended 30 June 2023
Information on directors (continued)
Ian Hunter BA, LLB, MBA Chairman, Audit Committee - Non-Executive Independent Director
Experience and expertise
Banking and finance
Other current directorships
Director, Platinum Asia Investments Limited
Director, Platinum Capital Limited
Interests in shares
250,000 shares
Sam Kaplan B Ec, MBA, F Fin Non-Executive Non-Independent Director
Experience and expertise
Funds management and capital management
Other current directorships
Deputy Chairman, Qube Holdings Limited
Interests in shares
Details of Sam Kaplan’s interests in shares of the Company included later in this report.
Neal Hornsby MIPA, MBA, DipFS(FP), CertPM, Non-Executive Independent Director
(appointed 1 August 2023)
Experience and expertise
Financial services, risk management & compliance
Other current directorships
Director, AVALONfs Pty Ltd
Director, PacReef Asset Management Pty Ltd
Interests in shares
30,000 shares
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 and
holds an MBA and accounting qualifications.
10
Ironbark Capital Limited
ABN 89 008 108 227
Directors’ Report
Year ended 30 June 2023
Meetings of directors
The numbers of meetings of the Company’s Board of Directors and Audit Committee held during the
year ended 30 June 2023, and the numbers of meetings attended by each Director were:
Michael Cole
Ian Hunter
Sam Kaplan
Board meetings
Audit Committee
A
4
4
4
B
4
4
4
A
2
2
2
B
2
2
2
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 currently consists of Mr Ian Hunter, Mr Michael Cole, Mr Sam Kaplan and Mr Neal
Hornsby. 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.
Directors’ benefits
This report details the nature and amount paid to each Director of the Company during the financial
year.
11
Ironbark Capital Limited
ABN 89 008 108 227
Directors’ Report
Year ended 30 June 2023
(i) Remuneration of Directors
The following table shows details of the remuneration received by the Directors of the Company for the
current and previous financial year.
2023
Name
MJ Cole
IJ Hunter
S Kaplan
2022
Name
MJ Cole
RJ Finley (resigned 15/12/2021)
IJ Hunter
S Kaplan (appointed 15/12/2021)
Directors fees
$
Superannuation
$
Total
$
22,000
22,000
5,000
49,000
-
-
-
-
Directors fees
$
22,000
11,000
22,000
2,708
57,708
Superannuation
$
-
-
-
-
-
22,000
22,000
5,000
49,000
Total
$
22,000
11,000
22,000
2,708
57,708
The Board may determine the remuneration of Directors within the maximum amount approved by
shareholders. The maximum remuneration approved was $22,000 each per annum.
Accounting and company secretarial duties are outsourced to Kaplan Funds Management Pty Limited.
Kaplan Funds Management Pty Limited is remunerated for services rendered pursuant to an
Administrative Services Agreement effective 1 April 2014.
(ii) Remuneration of Director Related Entities
The Company has an Investment Management Agreement and an Administrative Agreement with
Kaplan Funds Management Pty Ltd, the Investment Manager, 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. Sam Kaplan is Managing Director of Kaplan Funds
Management Pty Limited,
An entity associated with Sam Kaplan, Kaplan Partners Pty Limited, holds 100% of the shares of Kaplan
Funds Management Pty Limited.
For the year ended 30 June 2023 the management fee (net of RITC) was $248,932 (2022: $257,521). The
administrative fee for accounting and secretarial services (net of RITC) was $54,294 (2022: $56,047).
Under the terms of the Investment 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. As at 30 June
2023 the performance fee is negative 0.1% below the high water mark and there was no performance
fee payable. (2022: Nil)
12
Ironbark Capital Limited
ABN 89 008 108 227
Directors’ Report
Year ended 30 June 2023
(iii) Equity instruments of Directors and related parties
As at the date of this report, the relevant interest in the shares of the Company of each director and as
notified to the ASX is as follows:
2023
Name
Ordinary shares
Michael Cole
Ian Hunter
Sam Kaplan*
Neal Hornsby**
Balance at
the start of
the year
Net movement
Balance at
the end of
the year
450,000
250,000
47,206,340
-
47,906,340
50,000
-
-
30,000
80,000
500,000
250,000
47,206,340
30,000
47,986,340
*Includes shares in which Mr Kaplan has only deemed relevant interest under the
Corporations Act 2001 from which Mr Kaplan may receive no economic benefit.
**Appointed 1 August 2023
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.
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. The Company was not party to any such proceedings during the year.
Non-audit services
There were no non-audit services provided by the auditors during the year ended 30 June 2023.
Corporate Governance Statement
The Company’s Corporate Governance Statement for the year ended 30 June 2023 is found on the
Company’s website https://ironbarkcapital.com/about/corporate-governance/
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 15.
13
Ironbark Capital Limited
ABN 89 008 108 227
Directors’ Report
Year ended 30 June 2023
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. Amounts in this 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
24 August 2023
14
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF
THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF IRONBARK CAPITAL LIMITED
ABN 89 008 108 227
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of Ironbark Capital Limited.
As the auditor for the audit of the financial report of Ironbark Capital Limited for the year ended 30 June
2023, I declare that, to the best of my knowledge and belief, there have been no contraventions of:
i.
ii.
the auditor independence requirements of 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
Dated this 24th August 2023
15
Ironbark Capital Limited
ABN 89 008 108 227
Statement of Profit or Loss and
Other Comprehensive Income
For the year ended 30 June 2023
Notes
6
6
19 (b)
19 (a)
17
7
22
2023
$'000
2022
$'000
3,245
3,814
7,059
3,814
(2,439)
1,375
(249)
(20)
(54)
(30)
(29)
(14)
(37)
(8)
(49)
(45)
(40)
(12)
(22)
(609)
6,450
(980)
5,470
-
5,470
Cents
4.97
(258)
(39)
(56)
(27)
(29)
(12)
(34)
(7)
(58)
(47)
(38)
(13)
(44)
(662)
713
640
1,353
-
1,353
Cents
1.18
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)/benefit
Net profit 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
The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
16
Ironbark Capital Limited
ABN 89 008 108 227
Statement of Financial Position
As at 30 June 2023
Notes
2023
$'000
2022
$'000
8
9
10
12
13
14
15
647
285
60,170
6
61,108
1,563
1,563
1,299
264
56,148
6
57,717
2,064
2,064
62,671
59,781
65
317
382
875
875
310
501
811
213
213
1,257
1,024
61,414
58,757
60,250
9,751
(8,587)
60,475
6,869
(8,587)
61,414
58,757
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
Current tax liabilities
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
17
Ironbark Capital Limited
ABN 89 008 108 227
Statement of Changes in Equity
For the year ended 30 June 2023
Notes
Issued
capital
$'000
Profit
reserve
$'000
Accumulated
losses
$'000
Total
equity
$'000
Balance at 1 July 2022
60,475
6,869
(8,587)
58,757
Profit for the year
Transfer to profit reserve
Total comprehensive income for the
year
Transactions with owners in their
capacity as owners:
Dividends paid
Buy-back of shares
16(a)
15(c)
-
5,470
5,470
5,470
(5,470)
-
5,470
(2,588)
(225)
-
-
-
-
5,470
(2,588)
(225)
Balance at 30 June 2023
60,250
9,751
(8,587)
61,414
Balance at 1 July 2021
Profit for the year
Transfer to profit reserve
Total comprehensive income for the
year
Transactions with owners in their
capacity as owners:
Dividends paid
Buy-back of shares
Balance at 30 June 2022
16(a)
15(c)
67,374
5,805
(6,235)
66,944
-
1,353
1,353
3,705
(3,705)
-
3,705
(2,352)
1,353
(2,641)
(6,899)
-
-
-
(2,641)
(6,899)
60,475
6,869
(8,587)
58,757
-
-
-
-
-
-
-
-
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes
18
Ironbark Capital Limited
ABN 89 008 108 227
Statement of Cash Flows
For the year ended 30 June 2023
Notes
21
16(a)
15(c)
2023
$'000
603
(458)
2,620
1
(248)
(359)
2,159
(2,588)
(223)
(2,811)
(652)
1,299
2022
$'000
164
6,404
3,691
3
(261)
(405)
9,596
(2,641)
(6,899)
(9,540)
56
1,243
8
647
1,299
Cash flows from operating activities
Interest received
Net (payments)/proceeds of trading portfolio
Dividends and trust distributions received
Other income received
Management fees paid
Other expenses paid
Net cash inflow from operating activities
Cash flows from financing activities
Dividends paid to shareholders
Payments for shares bought back
Net cash (outflow) from financing activities
Net (decrease)/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
Non cash: Distribution reinvestment
-
116
The above Statement of Cash Flows should be read in conjunction with the accompanying notes
19
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2023
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 2023. The Company is
primarily involved in making investments and deriving revenue and investment income from listed
securities, wholesale fixed interest 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 24 August 2023.
(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 2023, but do not have an impact on the
Financial Statements of the Company:
AASB 17: Insurance Contracts
AASB 2020-3: Amendments to Australian Accounting Standards – Annual Improvements 2018-
2020 and Other Amendments.
AASB 2021-2: Amendments to Australian Accounting Standards – Disclosure of Accounting
Policies and Definition of Accounting Estimates.
AASB 2021-5: Amendments to Australian Accounting Standards – Deferred Tax related to
Assets and Liabilities arising from a Single Transaction.
(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.
20
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2023
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.
21
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2023
2. Significant accounting policies (continued)
(c) Income Tax (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.
22
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2023
2. Significant accounting policies (continued)
(f) Trading Portfolio (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.
23
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2023
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.
24
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2023
2. Significant accounting policies (continued)
(q)
New accounting standards for application in future periods
The following new accounting standards and interpretations, have been published that are not mandatory
for 30 June 2023 reporting periods and have not yet been adopted in the financial statements:
AASB 2020-1: Amendments to Australian Accounting Standards – Classification of Liabilities as
Current or Non-current.
IFRS S1 – General requirements for disclosure of sustainability – related financial information
IFRS S2 – Climate related disclosures
The above accounting standards are effective for annual reporting periods on or after 1 January 2024.
None of these are expected to have a material impact on the financial statements.
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:
2023
(%)
Sector
Financials
Property
Materials & Energy
Utilities & Infrastructure
Corporate floating rate notes
Subordinated notes
Fixed rate notes
Financial Services
Communication Services
Healthcare
Cash
Total
14.2
18.9
15.6
0.2
19.9
23.5
2.4
3.9
0.3
-
1.1
100.0
25
2022
(%)
13.8
20.6
15.0
0.2
29.5
12.5
2.6
3.1
-
0.4
2.3
100.0
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2023
3. Financial risk management (continued)
(a) Market risk (continued)
(i) Price risk (continued)
Securities representing over 5 percent of the trading portfolio at 30 June 2023 were:
Australian Unity Healthcare Property Fund
BHP Billiton Limited
Charter Hall Long Wale REIT
Growthpoint Properties Australia
2023
(%)
5.8
7.8
6.3
6.8
26.7
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 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 25 percent (2022: 25 percent):
Index
Change in variable by +5%/-5% (2022: +5%/-5%)
Change in variable by +10%/-10% (2022: +10%/-10%)
This illustration does not take into account covered call option positions
(ii)
Cash flow and fair value interest rate risk
Impact on post-tax profit
2023
2022
$'000
$'000
$'000
$'000
2,256
4,513
(2,256)
(4,513)
2,106
4,211
(2,106)
(4,211)
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 2023
Financial Assets
Cash and cash equivalents
Trade and other receivables
Trading portfolio
Other assets
Financial liabilities
Trade and other payables
Current tax liability
Floating
interest rate
$'000
Fixed
interest rate
$'000
Non-interest
bearing
$'000
647
-
26,392
-
27,039
-
-
-
-
-
1,428
-
1,428
-
-
-
285
32,350
6
32,641
(65)
(317)
(382)
Total
$'000
647
285
60,170
6
61,108
(65)
(317)
(382)
Net exposure
27,039
1,428
32,259
60,726
26
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2023
3. Financial risk management (continued)
(a) Market risk (continued)
(ii) Cash flow and fair value interest rate risk (continued)
30 June 2022
Financial Assets
Cash and cash equivalents
Trade and other receivables
Trading portfolio
Other assets
Financial liabilities
Trade and other payables
Current tax liability
Floating
interest rate
$'000
Fixed
interest rate
$'000
Non-interest
bearing
$'000
1,299
-
24,158
-
25,457
-
-
-
-
-
1,467
-
1,467
-
-
-
264
30,523
6
30,793
(310)
(501)
(811)
Total
$'000
1,299
264
56,148
6
57,717
(310)
(501)
(811)
Net exposure
25,457
1,467
29,982
56,906
The weighted average interest rate of the Company's cash and cash equivalents at 30 June 2023 is
1.07% pa (2022: 0.00% pa).
Sensitivity
At 30 June 2023, 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 $152,096 higher/
$152,096 lower (2022: changes of 75 bps/75 bps: $117,092 higher/$117,092 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 2023.
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 overdue 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.
27
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2023
3. Financial risk management (continued)
(c) Liquidity risk (continued)
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.
Contractual maturities of financial liabilities
At 30 June 2023
Non-derivatives
Trade and other payables
Current tax liability
Total non-derivatives
At 30 June 2022
Non-derivatives
Trade and other payables
Current tax liability
Total non-derivatives
Less than 1
month
$'000
More than 1
month
$'000
65
-
65
-
317
317
Less than 1
month
$'000
More than 1
month
$'000
310
-
310
-
501
501
(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.
28
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2023
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 2023 and 30 June 2022:
30 June 2023
Financial assets
Trading portfolio
Total
30 June 2022
Financial assets
Trading portfolio
Total
Level 1
$'000
42,750
42,750
Level 1
$'000
44,683
44,683
Level 2
$'000
Level 3
$'000
17,420
17,420
Level 2
$'000
11,465
11,465
-
-
Level 3
$'000
-
-
Total
$'000
60,170
60,170
Total
$'000
56,148
56,148
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.
29
6. Investment income
Revenue
Dividends
Interest
Distributions
Other income
Net gains/(losses) on trading portfolio
Net realised gains 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 2023
2023
$'000
1,966
623
655
1
3,245
1,659
2,155
3,814
7,059
2022
$'000
2,866
166
779
3
3,814
2,110
(4,549)
(2,439)
1,375
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
2023
$'000
317
663
980
2022
$'000
501
(1,141)
(640)
980
(640)
(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 25% (2022: 25%)
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
Realised accounting investment (gain)
Adjustments for current tax of prior year
Income tax expense/(benefit)
30
2023
$'000
6,450
1,612
(770)
195
117
303
(414)
(63)
980
2022
$'000
713
178
(1,207)
302
(69)
686
(527)
(3)
(640)
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2023
2023
$'000
2022
$'000
647
1,299
8. Cash and cash equivalents
Cash at bank and in hand
Risk exposure
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- (2022: AA-) by Standard
& Poor's.
9. Trade and other receivables
Dividends and distributions receivable
Interest receivable
GST receivable
2023
$'000
237
41
7
285
2022
$'000
235
22
7
264
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.
31
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2023
10. Trading portfolio – held at fair value through profit or loss
Listed equities
Property 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
2023
$'000
2022
$'000
20,834
8,012
3,504
11,590
511
1,007
421
1,308
12,983
60,170
18,700
8,521
3,302
16,460
512
1,002
465
-
7,186
56,148
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.
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.
32
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2023
11. Derivative financial instruments (continued)
At year end, the notional principal amounts of derivatives held by the Company were as follows:
Notional
principal
amounts
2023
$'000
Notional
principal
amounts
2022
$'000
(471)
(433)
2023
$'000
2022
$'000
1,552
11
1,563
2,053
11
2,064
2,064
2,214
(501)
1,563
(150)
2,064
2023
$'000
22
3
40
65
2022
$'000
21
250
39
310
Australian exchange traded options
12. Deferred tax assets
The balance comprises temporary differences attributable to:
Tax losses
Other temporary differences
Movements:
Opening balance:
Charged/credited:
- to profit or loss
13. Trade and other payables
Management fees payable
Unsettled purchases
Other payables
Notes
19(c)
33
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2023
2023
$'000
2022
$'000
10
865
875
213
663
(1)
875
6
207
213
1,504
(1,141)
(150)
213
14. Deferred tax liabilities
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
- prior year adjustment
30 June
2023
Shares
30 June
2022
Shares
2023
$'000
2022
$'000
Ordinary shares - fully paid
109,658,101
110,154,394
60,250
60,475
(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 2022
Less:
On-market share buy-back
Balance at 30 June 2023
Balance at 1 July 2021
Less:
On-market share buy-back
Balance at 30 June 2022
Number of
shares
$'000
110,154,394
60,475
(496,293)
109,658,101
(225)
60,250
Number of
shares
$'000
123,166,545
67,374
(13,012,151)
110,154,394
(6,899)
60,475
34
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2023
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)
Dividends paid during the year
Final dividend
Interim dividends
Dividends not recognised at the end of the year
On 24 August 2023, the Directors declared a final dividend of 1.25 cents per share
fully franked payable on 27 September 2023, with a record date of
6 September 2023. 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
35
2023
$'000
1,377
1,211
2,588
2022
$'000
1,540
1,101
2,641
1,370
1,377
2023
$'000
490
770
(863)
397
44
44
441
2022
$'000
163
1,207
(880)
490
32
32
522
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2023
16. Dividends (continued)
(c)
Dividend rate
2023
Ordinary shares -
Final
Ordinary shares -
Interim
2022
Ordinary shares -
Final
Ordinary shares -
Interim
Record
Date
Dividend
Rate
Total Amount
$’000
Date of
Payment
% Franked
06/09/2023
1.25cps
$1,370
27/09/2023
100
07/03/2023
1.1cps
$1,211
30/03/2023
100
02/09/2022
1.25cps
$1,377
28/09/2022
100
04/03/2022
1.0cps
$1,101
31/03/2022
100
The dividends are fully franked at the corporate tax rate of 25% (2022:25%).
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
2023
$'000
30 June
2022
$'000
40
38
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 2023 (2022: nil).
36
19. Related party transactions
(a) Key management personnel
Short-term benefits
(b) Transactions with other related parties
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2023
2023
$'000
49
2022
$'000
58
The Company has an Investment 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 Investment 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%, subject to a
highwater mark. 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.
As at 30 June 2023 the performance fee is negative 0.1% below the high water mark and there was no
performance fee payable. (2022: Nil)
The following transactions occurred with related parties (net of RITC):
Management fees paid or payable
(c) Outstanding balances
2023
$'000
249
2022
$'000
258
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
2023
$'000
30 June
2022
$'000
22
21
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.
37
Ironbark Capital Limited
ABN 89 008 108 227
Notes to the Financial Statements
For the year ended 30 June 2023
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) on trading portfolio
Distribution reinvestment
Change in operating assets and liabilities
(Increase)/decrease in trade and other receivables
Increase in trade and other payables
- Less increase in trading portfolio payables
Increase/(decrease) in tax
(Increase)/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
2023
$'000
5,470
(2,155)
(1,659)
-
(21)
3
-
980
(459)
2,159
2022
$'000
1,353
4,549
(2,110)
(116)
159
247
(250)
(640)
6,404
9,596
2023
Cents
2022
Cents
4.97
4.97
1.18
1.18
2023
Cents
2022
Cents
4.97
4.97
1.18
1.18
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
38
2023
Number
2022
Number
110,079,696
114,997,016
Ironbark Capital Limited
ABN 89 008 108 227
Directors’ Declaration
In the Directors' opinion:
(a)
the financial statements and notes set out on pages 16 to 38 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 2023 and of
its performance for the year ended on that date.
(b)
(c)
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.
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
24 August 2023
39
INDEPENDENT AUDITOR’S REPORT TO THE OWNERS OF
IRONBARK CAPITAL LIMITED
ABN 89 008 108 227
Report on 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 2023, 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 the accompanying financial report of the Company is in accordance with the Corporations Act
2001, including:
a. giving a true and fair view of the Company’s financial position as at 30 June 2023 and of its financial
performance for the year then ended; and
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 (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.
40
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 2023. 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
2023 comprised of listed, unlisted
equity investments and exchange
traded options of $60 million
which constitutes 96% 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 in the
financial statements.
Revenue from Trading Portfolio
Auditing Standard ASAs presume
there are risks of fraud in revenue
recognition unless rebutted.
We focused on the cut-off,
accuracy and completeness of
dividend revenue, interest,
dividend receivables and interest
receivables.
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 2023, 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.
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 assessed 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.
There were no restrictions on our reporting of Key Audit Matters.
41
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information
included in the Company’s annual report for the year ended 30 June 2023, but does not include the financial
report and our auditor’s report thereon. Our opinion on the financial report does not cover the other
information and 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 preparing the financial report, the directors are responsible for assessing the ability of the Company to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with 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.
42
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Company to cease to continue
as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
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 safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.
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Report on the Remuneration Report
We have audited the remuneration report included within the directors’ report for the year ended 30 June 2023.
In our opinion, the remuneration report of Ironbark Capital Limited for the year ended 30 June 2023
complies with s 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the remuneration
report in accordance with s 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
Dated this 24th August 2023
44
Ironbark Capital Limited
ABN 89 008 108 227
Shareholder Information
Shareholder Information
As at 3 August 2023 there were 1,524 shareholders of fully paid ordinary shares in Ironbark Capital
Limited (ASX:IBC). These holdings 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
Total
There were 279 shareholders holding less than a marketable parcel of $500 (1,086 shares).
Shares
93,405
950,263
1,437,031
20,602,646
86,494,756
109,578,101
%
0.1
0.9
1.3
18.8
78.9
100.0
No. of
Shareholders
274
326
192
625
107
1,524
Major Shareholders
The top 20 shareholders as at 3 August 2023 are listed below:
Ordinary Shares
Holder Name
KAPLAN PARTNERS PTY LIMITED
NATIONAL NOMINEES LIMITED
MRS GLENDA CLAIRE ORGILL
AGO PTY LTD
LIANGROVE MEDIA PTY LIMITED
BOND STREET CUSTODIANS LIMITED
LIANGROVE GROUP PTY LTD
IOOF INVESTMENT SERVICES LIMITED
BOND STREET CUSTODIANS LIMITED
BOND STREET CUSTODIANS LIMITED
MISS SAMANTHA ORGILL
MR ANTHONY GEOFFREY HARTNELL
NETWEALTH INVESTMENTS LIMITED
BOND STREET CUSTODIANS LIMITED
BOND STREET CUSTODIANS LIMITED
SAVIVE PTY LTD
DANEJON PTY LIMITED
WENTRADING PTY LTD
BOND STREET CUSTODIANS LIMITED
PAMELA JOY KIESSLING & RICHARD ALBERT JOHNSON & SALLY JANE
ARMSTRONG
Number Held
41,838,109
9,756,892
2,634,348
2,609,056
1,943,456
1,389,077
1,166,081
933,234
806,127
712,982
668,260
638,982
636,783
618,750
616,331
615,000
600,000
584,293
546,885
546,725
%
38.18%
8.90%
2.40%
2.38%
1.77%
1.27%
1.06%
0.85%
0.74%
0.65%
0.61%
0.58%
0.58%
0.56%
0.56%
0.56%
0.55%
0.53%
0.50%
0.50%
Total Securities as per Register
69,861,371
63.75%
109,578,101
45
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 3 August 2023 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
26 Nov 2021
On-market buy-back
Ordinary Shares
%
Shareholding
46,864,158
42.77%
The Company has extended the on-market buy-back arrangement that was in place for the 12 months
to 20 July 2023. It continues for another 12 months for the buy-back of up to 10% of the Company’s
shares commencing 21 July 2023.
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.
Under the terms of the Investment 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%, subject
to a highwater mark. 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.
Transaction Summary
The Company recorded 489 security transactions (including options) during the financial year.
Brokerage paid during the year net of RITC claimable was $19,538.
46