Quarterlytics / Financial Services / Asset Management - Income / Pinnacle Investment Management Group

Pinnacle Investment Management Group

pni · ASX Financial Services
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Exchange ASX
Sector Financial Services
Industry Asset Management - Income
Employees 51-200
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FY2023 Annual Report · Pinnacle Investment Management Group
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Contents ..................................................................................................................................... 1 

Pinnacle Glossary ....................................................................................................................... 3 

Chair’s Letter .............................................................................................................................. 6 

Overview, Operating and Financial Report ................................................................................ 8 

Nature of operations and principal activities ..................................................................................... 9 

Key financial highlights ..................................................................................................................... 10 

Pinnacle Affiliates .............................................................................................................................. 13 

Business strategies and prospects for future financial years ........................................................... 19 

Economic conditions and material business risks ............................................................................. 19 

Review of Group Results ................................................................................................................... 20 

Statement of Comprehensive Income .............................................................................................. 20 

Consolidated Statement of Financial Position .................................................................................. 21 

Corporate Sustainability .......................................................................................................... 22 

Directors’ Profiles ..................................................................................................................... 23 

Directors’ Report ...................................................................................................................... 27 

Remuneration Report ....................................................................................................................... 29 

Letter from the Chair of the Remuneration and Nominations Committee ...................................... 30 

Key Management Personnel ............................................................................................................. 32 

Role of Remuneration and Nominations Committee ....................................................................... 33 

Executive remuneration policy and framework for the Company ................................................... 34 

Links between performance and outcomes ..................................................................................... 40 

Details of Executive Key Management Personnel remuneration ..................................................... 41 

Executive service agreements........................................................................................................... 43 

Non-executive director remuneration .............................................................................................. 45 

Share-based payment compensation ............................................................................................... 47 

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Equity instrument disclosures relating to Key Management Personnel .......................................... 48 

Loans to Key Management Personnel .............................................................................................. 49 

Equity Capital .................................................................................................................................... 50 

Auditor’s Independence Declaration ....................................................................................... 54 

Financial Statements ................................................................................................................ 56 

Consolidated statement of profit or loss .......................................................................................... 57 

Consolidated statement of comprehensive income ......................................................................... 58 

Consolidated statement of financial position ................................................................................... 59 

Consolidated statement of changes in equity .................................................................................. 60 

Consolidated statement of cash flows .............................................................................................. 61 

Notes to the consolidated financial statements ............................................................................... 62 

Directors’ Declaration ............................................................................................................ 117 

Independent Auditor's Report ............................................................................................... 118 

Shareholder Information ....................................................................................................... 125 

Corporate Directory ............................................................................................................... 129 

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01 

3

Annual Report     

 
Term 

Meaning 

2022 Annual Report 

the Group’s annual report for the 2022 financial year. 

2022 Financial Year 

the period 1 July 2021 to 30 June 2022. 

2023 Annual Report 

this document. 

2023 Financial Year 

the period 1 July 2022 to 30 June 2023. 

Affiliates or Pinnacle Affiliates 

Pinnacle affiliated investment managers, being Aikya, Antipodes, Coolabah, Firetrail, Five V, Hyperion, 
Langdon, Longwave, Metrics,  Palisade, Plato, Resolution Capital, Riparian, Solaris and Spheria. 

Aikya  

Antipodes 

ASX Principles 

Auditor  

Board 

Board Committees 

Chair 

Company 

Aikya Investment Management Limited. 

Antipodes Partners Limited. 

the Corporate Governance Principles and Recommendations 4th Edition, published by the ASX 
Corporate Governance Council. 

PricewaterhouseCoopers Australia. 

the Board of Directors. 

the Audit, Compliance and Risk Management Committee and the Remuneration and Nominations 
Committee. 

Alan Watson, the Chair of the Board. 

Pinnacle Investment Management Group Limited. 

Company Secretary 

Calvin Kwok, who held the position during the 2023 financial year. 

Coolabah or CCI 

Coolabah Capital Investments Pty Ltd.  

Corporations Act 

Corporations Act 2001 (Cth). 

EOSP 

Firetrail 

Five V 

Foundation 

FUM 

Pinnacle Employee Option Share Plan. 

Firetrail Investments Pty Limited. 

Five V Capital Pty Ltd. 

the Pinnacle Charitable Foundation. 

Funds Under Management. 

Group or Pinnacle Group 

Pinnacle and the entities that it controls. 

Hyperion 

Hyperion Asset Management Limited. 

Key Management Personnel 

the individuals identified as such on page 32 of the 2023 Annual Report. 

Langdon 

LTI 

Longwave 

Langdon Equity Partners Ltd. 

long-term incentives offered to individuals who are employees of the Group. 

Longwave Capital Partners Pty Limited. 

Managing Director 

Ian Macoun, who was appointed as an executive director on 25 August 2016. 

Metrics or MCP 

Metrics Credit Partners Pty Limited. 

New Loans 

is a reference to the loans more fully described at page 49. 

NPAT 

NPBT 

net profit after tax. 

net profit before tax. 

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Term 

Omega 

Palisade 

PIML 

Meaning 

Omega Global Investors Pty Limited. 

Palisade Investment Partners Limited. 

Pinnacle Investment Management Limited, the principal operating subsidiary of the Group. 

PIML Acquisition 

the transaction approved by shareholders on 16 August 2016, pursuant to which the Company 
acquired the 24.99% equity stake in PIML it did not already own. 

Pinnacle or PNI 

Pinnacle Investment Management Group Limited. 

Pinnacle Omnibus Plan 

the Pinnacle Omnibus Incentive Plan described on page 39 of the 2023 Annual Report. 

Plato 

PL8 

Plato Investment Management Limited. 

Plato Income Maximiser Limited (ASX: PL8) 

Principal Investments 

investments made by the Group in listed and unlisted equities and unit trusts on its own behalf. 

Resolution Capital or ResCap 

Resolution Capital Limited. 

Riparian 

Solaris 

Spheria 

STI 

Riparian Capital Partners Pty Limited. 

Solaris Investment Management Limited. 

Spheria Asset Management Pty Limited. 

short-term incentives offered to individuals who are employees of the Group. 

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02 

Dear Fellow Shareholders, 

I am pleased to present Pinnacle's Annual Report for the 
financial year ended 30 June 2023.  

Over the year, your Company has delivered Net Profit 
After Tax of $76.5 million, fully diluted earnings of 39.0c 
per share and full year dividends of 36c per share.  

Throughout this 2023 financial year, the market 
continued to grapple with the economic consequences 
of the war in Ukraine, other geopolitical tensions and 
global spiralling inflation, with central banks responding 
by increasing interest rates at unprecedented speed. 
Amongst this heightened uncertainty, we experienced 
dislocation in some markets which are important to us. 
For example, high growth stocks were under pressure in 
the first half and rebounded strongly in the second, 
whilst other market sectors – for example, REITs – 
remained under pressure throughout. Against this 
backdrop, we saw caution across virtually the full 
spectrum of our client base with net inflows 
substantially lower than we have experienced in past 
years. These market and funds flow conditions served to 
significantly moderate our result relative to our original 
expectations.  

As we have stated previously, we do not seek to predict 
market conditions, but we seek to deliberately and 
carefully diversify our platform, across client types, 
Affiliates and asset classes, which we believe enables 
the business to remain relatively resilient throughout 
periods of volatility such as we have recently 
experienced and provides the platform from which the 
Company can prosper again once conditions become 
more favourable. Throughout our history, Pinnacle and 
Affiliates have continued to invest significantly, adding 
additional capabilities and strategies that, over the 
medium-term, provide additional sources of growth for 
the Company, and this has been continued in the 
current financial year. This year, together with our 
Affiliate partners, around $28 million has been invested 
in Horizon 2. These additional costs serve to moderate 
our earnings in the short-term, yet such Horizon 2 
investments have been a major driver of the Company’s 
growth to date and remain an important component of 
our growth strategy. 

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Following a very modest contribution in the first half, we 
were pleased that performance fees were earned this 
financial year by eleven Affiliates, once again a record 
breadth. Still, the revenue contribution from 
performance fees was modest relative to longer term 
potential at $58.2 million in aggregate, up only slightly 
from $57.8 million in FY22 as, once again, none of our 
large performance fee FUM strategies, other than 
Coolabah and Palisade, contributed meaningfully. This is 
further evidence of the strength of our diversified 
platform and performance fee potential. 

As a result of the circumstances described above, our 
key financial results have been lower than we would 
otherwise expect, with a very small increase in our 
profitability compared with FY22 and a small decline in 
our earnings per share. Our people continue to work 
exceptionally hard in what have been difficult conditions 
for generating new business, and I wish to acknowledge 
their good work and thank them for their commitment 
on behalf of all shareholders. As a result, we believe our 
Company is in excellent shape and retains strong, high 
quality capability in all areas to support the Affiliates. 

Whilst we are pleased with the work ethic of our team, 
we recognize that ultimately the financial results of the 
Company must be a key consideration when 
determining remuneration. Remuneration outcomes for 
all staff have therefore been moderated significantly 
from what they would have been in a normal year.  

Further operational detail is discussed in the Operating 
and Financial Report commencing on page 8. Details on 
our approach to remuneration are described from page 
29 in the Remuneration Report, including the letter from 
the Chair of the Remuneration and Nominations 
Committee. 

During the year, two long serving Directors, Adrian 
Whittingham and Gerard Bradley, retired. On behalf of 
all shareholders I reiterate our thanks and gratitude to 
both Adrian and Gerard for their valuable contributions 
during their years as Directors. The Board is currently 
undertaking a process which will increase the 
independent Non-Executive Director cohort.  

 
It has been previously advised that the Board and Ian 
had agreed that Ian would remain as Managing Director 
until “at least December 2023”. The Board and Ian have 
regular discussions concerning his succession, and as 
part of these we recognise that in businesses such as 
Pinnacle, continuity and consistency of approach are 
very important to all stakeholders, but particularly to 
clients, Affiliates and employees. With that in mind, 
following the most recent discussion between the Board 
and Ian in relation to his succession, I can confirm that 
his retirement is not imminent, and that both the Board 
and Ian continue to approach the subject in a 
deliberately flexible manner. Over the past few years, 
Ian has been consistent that he would neither overstay 
his tenure, nor would he leave the Company in an 
inconvenient position or in a manner which might set 
back the ongoing success and growth of the business. 
This continues to be the case. The Board thanks Ian for 
his flexibility and looks forward to working with him 
over the period ahead, and will keep shareholders 
appraised of plans as they develop.  

Finally, we wish to again express our thanks to you, our 
owners, for your continued support of our Company as 
shareholders, notwithstanding the ongoing challenging 
market conditions. We are grateful for your 
understanding and recognition of the virtues of our 
Company’s capabilities and strategies for growth over 
the medium- to long-term. We look forward to 
welcoming you to the Company’s Annual General 
Meeting in Sydney on 27 October, 2023. 

Yours sincerely, 

Alan Watson 
2 August 2023 

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03   

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Nature of operations and 
principal activities 
Pinnacle is a global multi-affiliate investment management 
firm, headquartered in Australia. Our mission is to establish, 
grow and support a diverse stable of world-class investment 
management firms. 

 

independence, including separate management 
reporting structures and boards of directors, whilst 
still offering the economies of scale and financial 
support inherent in being part of a larger 
investment group. 

The principal activities of the Group during the 2023 financial 
year continued to be:  

Founded in 2006, Pinnacle currently consists of 15 investment 
Affiliates. At 30 June 2023, the Pinnacle Affiliates collectively 
managed approximately $91.9 billion in assets across a 
diverse range of asset classes. Pinnacle offers the Affiliates: 

 

 

building, growing and operating investment 
management businesses; and  

providing distribution services, business support 
and responsible entity services to the Pinnacle 
Affiliates. 

The diagram below shows the Pinnacle Affiliates and 
Pinnacle’s effective interest in each as at 30 June 2023. 

 

 

equity, seed capital and working capital; 

superior distribution services, business support, 
product development and management and 
responsible entity services, to allow investment 
managers to focus on delivering investment 
outperformance; and 

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Key financial highlights 

During the 2023 financial year, the Group held shareholdings (through its principal 
operating subsidiary, PIML) of between 23.5% and 49.9% in each of the Pinnacle 
Affiliates, which together have $91.9 billion in FUM as at 30 June 2023. 
In the 2023 financial year: 

Pinnacle Affiliates generated aggregate revenues (at 100%) of $511.6 million, 
slightly up from $505.5 million in the previous year. Of this, $58.2 million was 
performance fees ($57.8m in the previous year). 

Pinnacle generated total NPAT attributable to shareholders of $76.5 million, up 
0.1% from $76.4 million in the prior year. 

Pinnacle’s share of NPAT from Pinnacle Affiliates was $67.4 million, down 11.0% on 
the prior year. 

The table below outlines the performance of the Pinnacle Group for the 2023 and 
2022 financial years: 

Pinnacle Affiliates (100% aggregate basis) 

FY2023 

FY2022 

FUM ($billion)* 

Revenue ($million) 

Net profit before tax 

Tax expense 

Net profit after tax 

Pinnacle Group ($million) 

Revenue 

Expenses 

Write-down of investment 

Share of Pinnacle Affiliates net profit after tax 

NPBT from continuing operations attributable to 
shareholders 

Taxation 

NPAT from continuing operations attributable to 
shareholders 

Discontinued operations 

Total profit attributable to shareholders 

Basic earnings per share (cents): 

From continuing operations 

Total attributable to shareholders 

*Non-statutory measure 

91.9 

511.6 

228.4 

(61.1) 

167.3 

45.5 

(36.4) 

- 

67.4 

76.5 

- 

76.5 

- 

76.5 

39.3 

39.3 

83.7 

505.5 

264.0 

(70.9) 

193.1 

46.0 

(43.5) 

(1.8) 

75.7 

76.4 

- 

76.4 

- 

76.4 

40.2 

40.2 

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1 Pinnacle FUM includes 100% of FUM managed by Pinnacle Affiliates. 
2 Revenue shown is 100% of all Pinnacle Affiliates’ revenue. This is shown to indicate trend and excludes revenue derived by Pinnacle itself. 

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Pinnacle and the Affiliates 
continued to focus on 
growth and diversification, 
with the cost to Pinnacle 
of these initiatives being in 
the order of $14m 
(Pinnacle share, after tax), 
together with careful 
exploration of attractive 
expansion opportunities. 

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Pinnacle Affiliates 

Pinnacle remains strongly focused on supporting each of the Pinnacle Affiliates and assisting them to grow their businesses 
and profitability over the medium-term. Pinnacle continues to carefully invest in additional resourcing ahead of further 
growth, in both distribution and in infrastructure, with a continuing focus on growing the Group's international distribution 
and infrastructure capabilities. Pinnacle Affiliates have also invested significantly in growth initiatives, with Pinnacle’s 
continuing support. 

Pinnacle also continues to explore opportunities for growth, both organic and inorganic, within Australia and 
internationally. 

The quality of the Pinnacle Affiliates was again affirmed and demonstrated during the year. Following is an overview of 
each of the Pinnacle Affiliates during the 2023 financial year: 

Aikya 

Aikya Investment Management was founded in London in 2020 and specialises 
in managing Emerging Markets equity portfolios. The team maintains a small 
and simple organisational structure in order to avoid the bureaucracy and 
distractions that often arise in larger, more complex investment management 
businesses. 

Aikya’s edge is their long-term approach, which primarily focuses on assessing 
the quality of the business owners and managers in Emerging Markets. Aikya 
looks to identify long-term stewards who have grown cash flows, navigated a 
few economic cycles and demonstrated fairness to all stakeholders. Their 
approach has proven over time that such people create shareholder value and 
drive long-term investment returns. 

Sustainability is at the heart of Aikya's investment approach. The name Aikya 
means oneness in Sanskrit which reflects the team's core belief that true 
stewards align their businesses with the interests of all stakeholders. Companies 
that take short cuts when it comes to customers, employees, suppliers, the 
environment, or broader society are unlikely to be rewarding long-term 
investments. 

During FY23, Aikya onboarded its first clients domiciled in the United States. 
Aikya’s investment solutions are now available through vehicles domiciled in 
Australia, Ireland and the United States, serving a wide range of end markets. 

Antipodes Partners 

Antipodes was founded in 2015 and manages global and emerging markets 
equities. Its 40+ member team serves a global client base from offices in Sydney, 
London and Toronto. 

Antipodes adopts a ‘pragmatic value’ style and aspires to grow client wealth 
over the long-term by generating absolute returns in excess of the benchmark at 
below market levels of risk. Antipodes’ approach seeks to take advantage of the 
market’s tendency for irrational extrapolation around change, identify great 
businesses that are not valued as such and build high conviction portfolios with 
a capital preservation focus. 

During FY23, Antipodes continued to expand and diversify its client base and 
product suite, with pooled vehicles now available in Australia, New Zealand, 
Europe and the United States.  

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Coolabah  

Coolabah Capital Investments Pty Ltd (CCI) is an independent long and long-short 
active credit manager founded in 2011. Pinnacle initially acquired an equity 
interest in Coolabah in 2019. 

CCI is responsible for managing numerous institutional mandates, the Smarter 
Money Investments’ product suite and the BetaShares Active Australian Hybrid 
ETF (ASX: HBRD).  

CCI’s edge is in alpha generation in liquid, high-grade credit in contrast to 
traditional fixed-income strategies that drive returns through adding more 
interest rate duration, credit default and/or illiquidity risk (beta). This alpha is a 
function of the world-class analytical insights rendered by CCI’s human capital, 
which includes 38 executives with a long-term track-record of delivering 
prescient insights. In 2019, CCI’s portfolio managers were selected as one of     
FE fundinfo’s Top 11 “Alpha Managers” based on their risk-adjusted 
performance across all asset-classes. 

During FY23, CCI’s portfolios delivered class-leading performance, despite the 
extraordinary volatility in global bond and interest rate markets. 

Firetrail Investments 

Firetrail Investments is a boutique asset manager, founded in 2018, specialising 
in high conviction investing. Firetrail has a simple mission: to generate 
outstanding long-term performance for its clients.  

Firetrail manages Australian equities, Global equities and Alternatives strategies. 
It has a diverse range of clients including superannuation funds, institutional 
investors, financial advisors, HNW individuals and retail investors. 

The Firetrail investment team has a deep history managing high conviction 
portfolios with many senior team members working together for more than 15 
years. Importantly, the firm is majority owned by its investment staff and the 
team invests alongside their clients in their high conviction strategies.  

During FY23, Firetrail continued to increase the depth of its investment team 
and the availability of its investment products, with the Global Opportunities 
Fund listed on the ASX under the ticker S3GO on 11th November, 2022. 

Five V Capital 

Five V Capital, a Certified B Corporation, is a leading private equity and venture 
capital boutique founded in 2016. Pinnacle acquired an equity interest in Five V in 
November 2021. 

Five V’s strategies span private equity, growth equity and venture capital, so they 
can draw on a range of unique insights and experience from both well-established 
businesses primed for growth, and start-ups working on some of the newest 
ideas, models and industries destined for future success. The core principle of Five 
V is alignment: the team are among the largest investors in Five V’s funds and 
share the entrepreneurial resilience and passion of founders to go the extra mile.  

Five V partners with leading founders and businesses in Australia and New 
Zealand. Their recent Venture Capital Fund II sits alongside the Five V private 
equity Fund I, Fund II, Fund III, Fund IV and Venture Fund I portfolios, taking its 
current funds under management to over $1.4bn. 

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Five V believes that building long lasting, personal relationships with the people 
who drive their portfolio companies, their investors and those around them 
defines its success. 

During FY23, Five V reached a successful first close in its VC Fund II and worked 
towards the launch of its Horizons Fund, with a significantly lower investment 
amount, ahead of an anticipated opening in early FY24. 

Hyperion Asset Management 

Hyperion Asset Management (Hyperion) was founded in 1996. The firm exists to 
sustainably grow clients’ capital over the long term. When investing capital in 
listed companies, it has the mindset of a long-term business owner, not a short-
term trader. The average holding period for the companies in Hyperion’s 
portfolios is ten years, and long-term economic sustainability is core to its 
philosophy. 

Hyperion’s mindset is centred on achieving attractive long-term positive real 
(inflation-adjusted) portfolio returns.  

Its investment philosophy and process aim to compound returns above the 
relevant passive benchmarks over long time horizons. 

During FY23, Hyperion continued implementing its long-term, consistent 
investment process, despite the elevated volatility in global markets. 

Langdon Equity Partners 

Langdon is a global and Canadian smaller companies investment boutique 
founded in Toronto, Canada, in 2022. They are active and engaged owners of 
world class smaller companies. 

Langdon approaches the public equity markets as a long-term owner of 
businesses. They are a patient, primary research-led investment firm, 
performing intensive due diligence on every investment idea pursued. 

Langdon is focused on high quality, growing companies that are fundamentally 
undervalued, with their bottom-up process resulting a in a concentrated, high-
conviction portfolio. 

During FY23, Langdon launched their inaugural funds, in Canada and Australia, 
delivering above benchmark returns for their clients across all portfolios. 

Longwave Capital Partners  

Longwave is a boutique investment manager dedicated to delivering superior, 
more consistent, long-term results through the innovative combination of 
technology, experience and insight. 

The founding partners of Longwave have a long history of investing in markets 
and designing, building and managing highly successful investment strategies. 
From pioneering the Schroders Australia small cap and micro cap strategies to 
running global multi-asset portfolios, they have worked with a broad range of 
institutional, retail, charitable and sovereign wealth fund clients. 

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Longwave currently offers investors a unique, diversified small companies fund 
focusing on high quality companies likely to be tomorrow’s winners. 

During FY23, Longwave continued to deliver performance ahead of benchmark 
whilst working to further broaden their client base. 

Metrics 

Metrics is an independent, alternative asset manager, founded in 2011.  

Metrics is the leading Australian non-bank corporate lender with a presence in 
Sydney, Melbourne and Auckland NZ. Metrics specialises in fixed income, 
private credit, equity and capital markets. Through its managed funds Metrics 
provides unrivalled access to the highly attractive Australian private debt market 
to investors ranging from individuals to global institutions. 

Metrics launched its first wholesale fund in June 2013 and is the manager of a 
number of wholesale and retail investment trusts in addition to the Metrics 
Master Income Trust (ASX: MXT), which successfully listed on the ASX in October 
2017. Metrics’ second ASX-listed vehicle, Metrics Income Opportunities Trust 
(ASX: MOT), was successfully listed on the ASX in April 2019. Pinnacle acquired 
an equity interest in Metrics in August 2018, having been its distribution partner 
for a number of years.  

During FY23, Metrics continued to expand its operations with a focus on 
growing its sustainable finance business, real estate equity funds and 
distribution of a range of products to offshore investors and the further 
investment in building its commercial and consumer finance product offerings. 

Palisade 

Palisade is a specialist, independent infrastructure manager, founded in 2007. 

Palisade provides institutional and wholesale investors with access to 
infrastructure assets through co-mingled funds, co-investment mandates and 
tailored portfolios. Palisade’s multi-disciplinary and experienced team focuses on 
attractive mid-market assets that are essential to the efficient functioning of the 
communities and economies they serve. 

Palisade manages investments in assets within the Transport, Energy, Utilities, 
Renewables, Agri-infrastructure and Social (PPP) sectors. Each asset is specifically 
targeted in sectors where Palisade believes it can exhibit a competitive advantage.  

During FY23, Palisade secured its first assets in North America and continues to 
work towards building out its suite of investment solutions and ability to provide 
these into a wider range of end markets. 

Plato Investment Management 

Plato was founded in Sydney, Australia, in 2006 and is majority owned and 
operated by its investment staff.  

Plato is a stable, research-led organisation focused on and aligned to client 
outcomes. Plato has a team of highly experienced investment professionals, 
portfolio managers and quantitative analysts. Plato provides a number of actively 
managed strategies, encompassing global and Australian equities, including 

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strategies that are tailored to specific investor objectives of wealth accumulation, 
income generation and downside protection. 

During FY23, Plato continued to build out its suite of complementary solutions, 
now offering Low Beta, Fixed Income, Enhanced Low Carbon and ESG-focused 
strategies, with the ability to tailor portfolios to specific investor needs, all of 
which draw from the team’s deep quantitative research base. 

Resolution Capital 

ResCap is a highly rated specialist global listed real assets manager, investing in 
both listed real estate and infrastructure. The firm was founded in 2004 and the 
investment team has a 28 year track record. The firm is majority employee-
owned by eight key staff and is headquartered in Sydney, Australia and 
maintains an office in New York. The firm and staff co-invest in the funds that 
ResCap manages. 

ResCap is an active investment manager with the objective of delivering 
superior risk adjusted long-term returns, compared with recognised industry 
benchmarks. This is achieved through investment in concentrated portfolios of 
carefully selected listed real estate and infrastructure securities with an 
emphasis on avoiding fundamental flaws, which could reasonably result in 
permanent impairment of the underlying investments. This aligns ResCap’s 
investment process and security selection with clients’ objectives of long term 
real wealth creation and avoids the culture of index hugging. 

The firm continues to grow and diversify its investment capabilities, The firm 
also continues to diversify its client base and has notably grown its funds 
sourced from international markets.  The firm launched an active ETMF for its 
Global REIT strategy (Resolution Capital Global Property Securities Fund 
(Managed Fund)) on the ASX on 22 February 2022 under the ticker RCAP. 

During FY23, the firm secured a cornerstone client for its Global Listed 
Infrastructure strategy and continued to grow its retail client base, in a 
challenging capital raising market. 

Riparian Capital Partners 

Riparian is a specialist water, agriculture and food investment firm, established 
in early 2019 with the specific purpose of identifying, acquiring and managing 
investments across the agricultural sector. 

The team has proven its ability to identify key areas for operational and 
environmental efficiency, expansion and redevelopment of agri-sector assets 
while driving value through active management of water portfolios and 
exposures. With investments that span Australian water markets, irrigated 
horticulture, annual crops and agricultural infrastructure, the team is focused on 
sustainable agri-food systems that drive investor returns. 

During FY23, Riparian continued to diversify and grow their client base, from 
both Australia and overseas.  

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Solaris Investment Management 

Solaris is a style neutral, Australian equities fund manager, founded in 2008. The 
Solaris team consists of a diverse and experienced group of investment 
professionals. 

Solaris uses fundamental analysis to choose stocks, to exploit market 
inefficiencies in forecasts and valuations. All investment decisions are supported 
by detailed analysis of the securities and key financial markets, with an eye on 
the global perspective. 

Solaris analysts are empowered as portfolio managers, making them fully 
accountable for their investment ideas and decisions. Solaris’s tried and tested 
investment process offers Core, High Alpha, Income and Long Short strategies 
with after-tax investment as a specialty. 

During FY23, Solaris continued to increase the depth of its team and maintain 
strong ratings across all products. 

Spheria 

Spheria is a fundamental-based investment manager, founded in 2016, 
specialising in small and micro cap companies.  

Spheria’s mission is to achieve strong investment performance for its clients 
with an emphasis on risk management. The team has grown to nine highly 
skilled investment professionals, providing clients with deep expertise in small 
and microcap investing.  

Spheria’s investment philosophy is to purchase securities where the present 
value of future free cash flows can be reasonably ascertained and the security is 
trading at a discount to its intrinsic value. Assessing risk is fundamental to 
Spheria’s investment philosophy. Explicit risk controls include a preference for 
companies with low or no balance sheet gearing.  

During FY23, Spheria integrated domestic and global research into a single, 
unified team, with added depth. 

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Business strategies and 
prospects for future financial 
years 
We continue to build Pinnacle by taking a measured, 
medium-term approach to growth, supporting each of 
the Pinnacle Affiliates and assisting them to grow their 
businesses and profitability, together with careful 
exploration of expansion opportunities. 

We are carefully investing in additional resources, 
particularly in support of our retail and international 
distribution capabilities, to enable and drive this growth. 
We will also continue to invest in and seed new Affiliates 
and strategies where management teams have a strong 
track record and growth potential, even though this may 
moderate our profitability somewhat in the short-term. 

Similarly, growth initiatives are also underway in a 
significant number of our Affiliates, which moderate their 
profitability in the short-term but provide a range of 
additional growth options over the medium-term. 

Our platform is strong and sufficiently adaptable to 
consider both organic and inorganic growth, both in 
Australia and overseas. We will consider acquisitions only 
when we believe they are complementary to our existing 
core, will not place the Company at risk and offer the 
potential of a high medium-term return on the capital 
deployed. We retain conviction in the value potential 
provided by Horizon 2 and Horizon 3 growth initiatives, 
but will pursue these only when quality and price are 
sufficiently compelling.  

Economic conditions and 
material business risks 
The major business risks facing the Group are investment 
market conditions and regulatory risk. 

Investment market conditions 

The Group’s results and outlook are influenced by 
prevailing equity market conditions and by broader 
economic trends and investor sentiment. 

During FY23, markets experienced significant volatility as 
central banks around the world implemented rapid, 
globally synchronised hikes in interest rates, responding 
to spiralling inflation following the supply chain 
dislocation and monetary stimulation resulting from the 
COVID-19 pandemic and the fallout from Russia’s invasion 
of Ukraine. This initially truncated the valuations of high 
growth stocks, before reversing in the second half of the 
financial year as markets began to anticipate the end of 
the tightening cycle, particularly in the United States. 

Certain sectors of the market were more directly 
impacted by the increase in lending rates; the REIT 
market declined by 8.8% in the first half and a further 
3.9% over the second half, as markets sought to 

19

Annual Report     

anticipate the impact of higher rates on property values. 
Conversely, returns in floating rate fixed income and 
credit were boosted by those higher underlying base 
rates. 

Against this uncertainty, investors across the spectrum 
have remained defensively positioned. In the Australian 
retail investor market, the negative sentiment that 
characterised the second half of FY22 continued across 
FY23 as investors and their advisors continued to grapple 
with market volatility and the prospect of protractedly 
higher cash rates, with industry-wide flow trends into 
managed funds overwhelmingly negative. Whilst these 
trends have impacted our ability to generate new 
business, we have experienced modest retail net inflows 
across the financial year, of $0.6 billion, underscoring the 
benefits of our diversified model. 

Institutionally, consolidation in the superannuation sector 
continues apace, which presents both a risk, of fewer 
allocators, and an opportunity, with larger allocations on 
offer. We have been impacted by both during this 
financial year. Overwhelmingly, major institutions remain 
defensively positioned and we are not yet seeing a 
significant shift back to risk assets. Having experienced 
negative domestic institutional flows of $2.5 billion in the 
first half of FY23, we were pleased to generate positive 
net inflows of $2.3 billion in the second half; we note that 
this does not appear to represent a change in the 
sentiment of buyers, but is as a result of the Affiliates 
seizing market share. 

Outside of Australia, in a similarly challenging market for 
generating new business, we are growing the assets 
under management of the Affiliates and strategies, which 
is a result of the careful and deliberate expansion of our 
distribution capability in those markets. During the 
financial year, we successfully raised in excess of $1 
billion of net new money. The opportunity for the 
Affiliates in those international markets remains sizeable 
and we will continue to expand our capabilities to 
support their growth. 

We remind shareholders that our earnings and net 
inflows can moderate during times of market dislocation. 
As we have explained in the past, we have deliberately 
sought to build a robust, diverse business that is able to 
succeed across market cycles. The growth in size and 
breadth of the Affiliate base is delivering clear benefits to 
shareholders, with greater diversification across different 
asset classes and investment strategies and enhanced 
performance fee potential across a range of strategies 
and market conditions. 

We recognize that global economic conditions remain 
uncertain due to, among other things, shifts in monetary 
policy and continuing geopolitical tensions, which could 
have a significant impact on wider market conditions and 
sentiment. We are, however, confident that our business 
is in excellent shape and there is cause for optimism for 
what lies ahead. 

 
 
Regulatory risk 

The Group operates within a highly regulated 
environment. The Group remains vigilant with regard to 
regulatory requirements which are continually evolving 
and, in response, Pinnacle will continue to develop its 
business model to accommodate the changing 
environment within which it operates. We continue to 
invest in our Risk and Compliance function, including in 
support of our expansion outside of Australia with the 
recruitment of a Head of Risk and Compliance (UK) in 
June 2023 providing additional market specific expertise. 

Review of Group Results 
Total net profit after tax (NPAT) attributable to 
shareholders for the 2023 financial year was $76.5 
million. NPAT from continuing operations attributable to 
shareholders was also $76.5 million. 

 

 

 

 

 

The Group delivered a $76.5 million total 
NPAT attributable to shareholders for 
the 2023 financial year, a 0.1% increase 
compared with the 2022 financial year. 
Pinnacle’s share of net profits from the 
Pinnacle Affiliates decreased by 11.0% to 
$67.4 million (of which $13.9 million was 
Pinnacle's share of performance fees 
earned by eleven Affiliates during the 
financial year, after tax, compared with 
$14.7 million from ten Affiliates in the 
2022 financial year), largely due to the 
ongoing spend in Affiliates in support of 
future growth, as well as due to the 
impact of market dislocation and lower 
flows during FY23. 

FUM Increased by 9.8% to $91.9 billion 
in the 2023 financial year. 

Of the increase in FUM over the 2023 
financial year, $6.7 billion was due to 
market movements/investment 
performance, whilst there were net 
inflows of $1.5 billion. 

Diluted earnings per share attributable 
to shareholders of 39.0 cents have 
decreased by 1.3% from 39.5 cents. 

The Board has declared a fully franked 
final dividend of 20.4 cents per share 
payable on 15 September 2023. 

Consolidated Statement of 
Comprehensive Income 
The following commentary provides an analysis of 
revenues and expenses for the 2023 financial year in 
comparison to the prior financial year. 

During the 2023 financial year, the Group’s revenues and 
expenses were derived from Pinnacle and its controlled 
entities, which excludes the revenues and expenses of the 

20

Annual Report     

Pinnacle Affiliates, the effect of which is reflected through 
Pinnacle’s share of equity accounted net profits. 

Revenue from Continuing Operations 

Revenue from continuing operations decreased $0.5 
million to $45.5 million, from $46.0 million in the prior 
financial year. Shareholders will be aware that there is 
typically a 'skew' in revenues towards the second half of 
the financial year, when certain 'performance-based' 
distribution fee revenues crystallize. Due to ongoing 
dislocation and volatility in markets and the lower retail 
net inflows across the financial year, these performance-
based fees were lower than might otherwise have been 
expected. Revenues were $22.8 million in the first half of 
the financial year and $22.7 million in the second half.  

Further information regarding revenues is provided below 
and at note 1 of the financial statements. 

Return on financial assets at fair value 
through profit or loss 

This reflects the mark-to-market gains or losses on the 
Group’s Principal Investments. 

During the year to 30 June 2023, the Group made a net 
$14.2 million return on its Principal Investments, on a 
mark-to-market basis. This gain consists of distribution 
and dividends received of $6.1 million, and net realized 
and unrealized gains of $8.1 million. As shareholders will 
be aware, we substantially hedge our direct equity 
market exposure on these investments. We have a $120 
million facility from the CBA, with $20 million of that 
facility provided as seed capital to Palisade Real Assets to 
enable them to acquire the first asset in their energy 
transition portfolio, on which Pinnacle earns a preferred 
return of 8% (see note 26d(iii) for further information), 
with the balance of the facility invested predominantly in 
non-duration and floating rate credit strategies, managed 
by Affiliates. The sharp rise in central bank lending rates 
has led to a significant increase in returns generated by 
these strategies. Offsetting these higher returns 
somewhat was the higher interest cost on our CBA 
facility, which was $5.9 million in FY23 compared with 
$2.2 million in FY22.  

Expenses from Continuing Operations 

During FY23, the Group continued to carefully add 
additional resources to support future growth. Employee 
benefits expense increased by $2.6 million to $22.5 
million. 

STI expense for FY23 was $4.7 million, down from $6.6 
million in FY22. Whilst we have an outstanding group of 
people who continue to perform at high levels, 
remuneration challenges every year are to balance the 
need to reward outstanding performance with the 
interests of shareholders, both in the short- and long-
term. As our results for the year fell short of our 
expectations, STI levels have been reduced accordingly. 

 
Share of net profit of jointly controlled 
entities 

Share of net profit of jointly controlled entities accounted 
for using the equity method relates to the Group’s share 
of the profits of the Pinnacle Affiliates. Pinnacle’s share of 
the net profits after tax from Pinnacle Affiliates for the 
2023 financial year was $67.4 million (of which $13.9 
million was Pinnacle's share of performance fees earned 
by eleven Affiliates during the financial year, after tax, 
compared with $14.7 million from ten Affiliates in the 
2022 financial year); down 11.0% or $7.8 million on the 
prior financial year. Underlying base management fees 
within the Pinnacle Affiliates were slightly ahead of the 
prior financial year, with costs higher than the prior year 
due predominantly to spending across a number of 
Affiliates in support of future growth, in new asset classes 
and strategies. 

Pinnacle Affiliates’ FUM, which underpins the share of 
Pinnacle Affiliates’ profits, increased by 9.8% to $91.9 
billion in the 2023 financial year. We remind shareholders 
that a significant proportion of Affiliates' FUM is linked to 
movements in equity markets which, although broadly up 
across the financial year, experienced significant periods 
of volatility during the year. Certain sectors of the market 
(in particular, the REIT market) were down over the 
financial year. 

Further information is provided in note 23 to the financial 
statements. 

Consolidated Statement of 
Financial Position 

The following commentary provides an analysis of assets 
and liabilities for the 2023 financial year. 

Cash. Cash and cash equivalents decreased by $10.7 
million to $27.6 million at year-end compared to $38.3 
million at the end of the prior financial year. Cash 
inflows from operating activities were $55.0 million, 
which included a further $5.9 million invested in funds 
managed by Affiliates and dividends received from 
Affiliates of $66.1 million (compared with $68.6 million 
in the prior financial year). Our facility with the CBA of 
$120.0 million remained fully drawn at 30 June 2023.  

Total cash and Principal Investments, net of the CBA 
debt facility, was $67.2 million at 30 June 2023, 
compared with $58.2 million at 30 June 2022. 

Further information is provided at notes 6 and 25.  

Trade and other receivables. The value of trade and 
other receivables increased by $1.4 million during the 
year. Further information is provided at note 7 of the 
financial statements. 

Financial assets at fair value through profit or loss were 
$163.2 million, an increase of $20.3 million on the prior 
year. During the year, Pinnacle continued to support the 
Affiliates in both equity recycling and through the 
provision of seed and foundation FUM for strategies 

21

Annual Report     

managed by the Affiliates. Of the $163.2 million, $148.5 
million was held in strategies managed by Pinnacle 
Affiliates. The Group substantially hedged its equity 
market exposure to movements in the underlying 
indices. 

Assets held at amortised cost. The value of current and 
non-current assets held at amortised cost increased by 
$3.2 million to $6.5 million at year end. This balance 
includes loans to entities under joint control. There were 
advances to Affiliate executives during the current 
financial year to assist with further equity recycling. 
Further information is provided at note 9 of the financial 
statements. 

Investments accounted for using the equity method 
reflects the carrying value of Pinnacle’s investments in 
the Pinnacle Affiliates. This increased by $3.2 million 
during the period to $328.5 million. The change is 
attributable to the equity accounted profits of $67.4 
million from Pinnacle Affiliates, less the dividends 
received from the Pinnacle Affiliates of $66.1 million, 
plus additional net capital contributed to the Pinnacle 
Affiliates during the year of $1.9 million. Further 
information is provided at note 23 of the financial 
statements. 

Intangible assets decreased by $0.3 million. Plato, the 
investment manager of PL8, and the Group previously 
entered into a distribution agreement for a period of 
three years. The costs associated with the acquisition of 
that contract were capitalized as an intangible asset and 
were being amortised over the distribution agreement 
period of three years that ended in September 2022. 
During the prior year, Pinnacle acquired the distribution 
contracts previously owned by Winston Capital Partners 
for an upfront consideration of $2.0 million. The 
distribution contracts acquired are being amortized over 
a period of 20 years as revenues are earned. Further 
Information is provided at note 13.  

Trade and other payables decreased by $3.6 million to 
$6.8 million. The decrease largely relates to the 
reduction in accrued incentives. Further information is 
provided at note 14 of the financial statements. 

Provisions. The value of current and non-current 
provisions increased by $0.3 million compared with the 
prior financial year. The balance relates directly to the 
increase in staff costs. Further information is provided at 
note 15 of the financial statements. 

Lease liabilities decreased by $1.2 million and Right-of-
use assets decreased by $1.2 million compared with the 
prior year. The Group leases offices in Brisbane and 
Sydney. Further information is provided at note 12. 

Borrowings remained at $120.0 million. The Group has a 
$120.0 million facility with CBA, which was fully drawn 
as at 30 June 2023. The entire facility is currently 
invested in certain investment strategies managed by 
Affiliates. Further information is provided at note 19. 

 
04 

We are focused on continuous improvement, striving to do better by 
building a long-term, sustainable firm that focuses on our 
employees, customers and shareholders, as well as the communities 
in which we engage.  

Further information is set out in our Corporate Sustainability Report, 
which can be viewed at 
https://pinnacleinvestment.com/sustainability-report/.  

22

Annual Report     

 
 
 
 
 
05 

23

Annual Report     

Alan Watson  

(Non-executive Independent Chair; member of Audit, Compliance and Risk Management Committee 
and Remuneration and Nominations Committee) BSc, GAICD 

Mr Watson became Chair of Pinnacle in 2016. 

During his executive career, Mr Watson worked in investment banking, accumulating over 30 years of 
experience within various global equity markets. During this period, he was responsible for starting 
and leading a number of securities businesses both in Europe and Asia, advising many companies on 
capital structuring, initial public offerings, takeovers and mergers and investment relations strategies. 
Mr Watson held positions as Managing Director at Barclays de Zoete Wedd Limited, Donaldson, 
Lufkin & Jenrette Securities Corporation, at Lehman Brothers Holdings Inc and as Head of Securities 
Europe for Macquarie Capital (Europe) Ltd., concluding his executive career in 2011.  

Subsequent to this he has been an independent director of various public companies, both in 
Australia and North America. In addition to Pinnacle, currently Mr Watson is also an independent 
director of Airboss of America, listed on the Toronto Stock Exchange and an independent non-
executive director of Australis Oil and Gas, listed on the ASX. 

ASX Listed Company Directorships held in  
last 3 years (current & recent): 

Interests in shares and options at 30 June 2023 

 

Current Director of Australis 
Oil & Gas 

 

174,172 ordinary shares in the 
Company 

 
 
 
 
 
 
 
  
Ian Macoun 

(Managing Director) CFA, B Com, MFM, Dip FinSer (FP), FCPA, FAICD 

Mr Macoun was appointed Managing Director of the Company on 17 August 2016 and an Executive 
Director on 25 August 2016, having been the Managing Director and Chair of PIML since 2006. Mr 
Macoun’s career to date has included more than 30 years as the CEO and chief investment officer of 
investment management firms, including the establishment of Australia's first "multi-boutique" funds 
management firm (Perennial Investment Partners – founding Managing Director from 1998), building 
a major new investment corporation (Queensland Investment Corporation (QIC) - inaugural Chief 
Executive from 1988), and the management of a major Australian bank's investment operation 
(Westpac Investment Management; Managing Director from 1993). 

Mr Macoun’s early experience, in more than 10 years at Queensland Treasury, included extensive 
involvement with many major Australian and International financial market participants, and the 
Queensland Government’s commercial participation in many major industrial development projects 
during the late 1970s and the 1980s. He was a First Assistant Under Treasurer when he moved to 
build and lead QIC. 

Mr Macoun is also a director of the following Pinnacle Affiliates: Aikya, Antipodes, Coolabah, Firetrail 
Hyperion, Langdon, Metrics, Palisade, Plato, Resolution Capital and Solaris. 

ASX Listed Company Directorships held in  
last 3 years (current & recent)  

Interests in shares and options at 30 June 2023 

  None 

 

18,276,077 ordinary shares in 
the Company  

Deborah Beale AM 
(Non-executive Independent Director, Chair of Remuneration and Nominations Committee and 
member of the Audit, Compliance and Risk Management Committee) B Comm, Grad Dip App 
Fin, MBA 

Ms Beale began her working career in the finance industry where she was employed by Merrill Lynch 
for over a decade. She then moved to Ernst & Young where she specialised in risk management, 
governance and public and government relations. Ms Beale also served and continues to serve on a 
number of government, public, private and not-for-profit boards. Her broad experience includes the 
areas of finance, corporate governance, risk management, government and public relations. 

Ms Beale is also the Chair of the Melbourne Convention Bureau and a director of Visit Victoria. 

ASX Listed Company Directorships held in  
last 3 years (current & recent)  

Interests in shares and options at 30 June 2023 

  None 

 

129,439 ordinary shares in the 
Company 

24

Annual Report     

 
 
 
 
 
 
 
 
Lorraine Berends  

(Non-executive Independent Director, Chair of Audit Compliance and Risk Management 
Committee and member of Remuneration and Nominations Committee) B Sc, FIAA, MAICD and 
FASFA 

Ms Berends has worked in the financial services industry for over 40 years and possesses extensive 
experience in both investment management and superannuation. Before moving to a non-executive 
career in 2014, she worked for 15 years with US based investment manager Marvin & Palmer 
Associates. Ms Berends contributed extensively to industry associations throughout her executive 
career, serving on the boards of the Investment Management Consultants Association (IMCA 
Australia, now the CIMA Society of Australia) for 13 years (7 as Chair) and the Association of 
Superannuation Funds Australia (ASFA) for 12 years (3 as Chair). Ms Berends has been awarded Life 
Membership of both the CIMA Society and ASFA. Ms Berends holds a BSc from Monash University, is 
a Fellow of the Actuaries Institute and a Fellow of ASFA. 

Ms Berends is an independent non-executive director of Plato Income Maximiser Limited, Spheria 
Emerging Companies Limited and Hearts and Minds Investments Limited (listed investment 
companies), a company appointed director of Qantas Superannuation Limited, a non-executive 
director of the Pinnacle Charitable Foundation and an independent member of the Australian 
Commonwealth Games Foundation Investment Committee. 

ASX Listed Company Directorships held in  
last 3 years (current & recent)  

Interests in shares and options at 30 June 2023 

 

27,000 ordinary shares in the 
Company 

 

 

 

 

Current Director of Plato 
Income Maximiser Limited 

Current Director of Spheria 
Emerging Companies Limited 

Current Director of Hearts and 
Minds Investments Limited 

Former Director of Antipodes 
Global Investment Company 
Limited (resigned 17 December 
2021) 

25

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
Andrew Chambers 

(Executive Director) MSc, B Arts (Hons), Grad Dip App Fin 

Mr Chambers was appointed Executive Director of the Company on 1 September 2016 and is Head of 
Institutional and International Distribution. He has been a senior executive with PIML since he 
commenced with the firm in March 2008.  

Mr Chambers has extensive multi-channel (retail, wholesale and institutional) and multi-jurisdictional 
distribution experience and is currently responsible for leading the firm’s institutional and 
international distribution divisions. Prior to joining Pinnacle, Mr Chambers worked for Franklin 
Templeton, one of the world’s largest, multi-affiliate investment management firms. 

Mr Chambers is also a director of the following Pinnacle Affiliates: Five V, Metrics, Plato and Riparian. 

ASX Listed Company Directorships held in  
last 3 years (current & recent)  

Interests in shares and options at 30 June 2023 

  None 

 

5,303,614 ordinary shares in 
the Company 

26

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
06 

Your directors present their report on the Group, consisting of the 
Company and the entities it controlled at the end of, or during, the 
year ended 30 June 2023. 

Directors 

The directors of the Company during the whole of the financial year and up to the date of this report were:  

  Mr A Watson 

  Mr I Macoun 

  Ms D Beale AM 

  Ms L Berends 

  Mr G Bradley AO (retired 1 January 2023)  

  Mr A Chambers 

  Mr A Whittingham (retired 14 November 2022) 

Information on the qualifications, experience and responsibilities of the directors is included in the directors’ profiles on 
pages 23 to 26 of the 2023 Annual Report. 

27

Annual Report     

 
 
 
 
 
 
 
 
 
 
Earnings per share 

From continuing operations 

Basic earnings per share 

Diluted earnings per share 

Total attributable to shareholders 

Basic earnings per share 

Diluted earnings per share 

Dividends 

39.3 

39.0 

39.3 

39.0 

40.2 

39.5 

40.2 

39.5 

In the 2023 financial year, the following dividends were paid: 

 

 

a fully franked final dividend of 17.5 cents per share on 16 September 2022. 

a fully franked interim dividend of 15.6 cents per share on 17 March 2023. 

Since the end of the financial year, the Company has declared: 

 

a fully franked final dividend of 20.4 cents per share, to be paid on 15 September 2023. 

Total dividends declared in respect of the FY23 financial year were 36.0 cents per share (2022: 35.0 cents per share). 

Operating and Financial Review 

The Operating and Financial Review can be found at pages 8 to 21 of the 2023 Annual Report. 

Significant changes in the state of affairs 

There were no significant changes in the state of affairs of the Group during the reporting period. 

Matters subsequent to the end of the financial year 

Other than as outlined in note 30 of the financial statements at page 103, there has not arisen in the interval between the 
end of the financial year and the date of this directors’ report any item, transaction or event of a material and unusual 
nature likely, in the opinion of the directors of the Company, to significantly affect: 

 

 

 

the Group’s operations in future financial years; or 

the results of those operations in future financial years; or 

the Group’s state of affairs in future financial years. 

28

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
Remuneration Report 

The Group’s 2023 Remuneration Report sets out remuneration information for the Group’s Key Management Personnel. 

The Remuneration Report contains the following sections: 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

Letter from the Chair of the Remuneration and Nominations Committee 

Key Management Personnel 

Role of Remuneration and Nominations Committee 

Executive remuneration policy and framework for the Company 

Links between performance and outcomes 

Details of Executive Key Management Personnel remuneration 

Executive service agreements 

Non-executive director remuneration 

Share based payment compensation 

10.  Equity instrument disclosures relating to Key Management Personnel 

11.  Loans to Key Management Personnel 

12.  Equity Capital 

Information in this Remuneration Report has been audited as required by section 308(3C) of the Corporations Act. 

29

Annual Report     

 
 
 
 
 
 
1. 

Letter from the Chair of the Remuneration and Nominations 
Committee   

Dear Fellow Shareholders 

In presenting the Remuneration Report for the year ended 30 June 2023 I would like to reinforce our commitment to 
delivering strong results for our clients and shareholders.  The complexity of the macroeconomic and geopolitical 
environment, including high inflation, high energy prices, the ongoing war in Ukraine and residual pandemic effects have 
resulted in understandable impacts on market volatility and challenging operating environments.   

Despite these conditions, our people remain energised and determined to deliver outstanding results.  We remain focused 
on hiring top talent who align with our Purpose and Values and have a strong passion for serving our clients and 
shareholders.  The Company is committed to ongoing professional development, capability building and career growth for 
our employees.  Many employees progressed their career and increased their areas of responsibility in a year that saw 
colleagues come back together to collaborate in person to best serve the interests of our stakeholders.   We continue to 
focus on providing employees with tools and resources to manage their lives and careers, and in turn deliver better overall 
commercial outcomes for all.   

Our pay-for-performance compensation approach strives to recognise and reward performance with competitive and fair 
pay for the work performed at all levels of the Company. Pay equity is fundamental to our Purpose and Values and in FY23, 
we conducted a pay equity analysis to examine employee pay.  The Company aims to ensure that our reward outcomes fairly 
reflect performance and the meritocratic environment in which we operate. 

We believe our remuneration approach is well suited to support our ambitions and provide strong alignment with 
shareholder outcomes. Our approach supports pay for performance principles and incentivises both outstanding short-term 
and long-term performance.  The Company continues to require an assessment of both quantitative and qualitative criteria, 
which are weighted differently depending on role, to determine overall performance and remuneration outcomes. Flexibility 
is preserved to enable rewarding employees whose results and impact on the business have been outstanding.   

As results for shareholders this year are below the expectations we had at the start of the financial year, we have been 
focused and disciplined on keeping overall remuneration outcomes modest.  Recognising the impact of inflationary pressures 
and a heightened competition for talent, at a Group level we have carefully adjusted salaries only in circumstances where it 
was appropriate to do so.  In recognition that our financial and FUM results were lower than expectations, we have 
moderated short-term incentives across the organisation.  LTI awards have been proposed only in circumstances where role 
scope or responsibility has significantly increased.  As we enter the 2024 financial year, salaries for our senior executives 
remain unchanged. 

Each year we report to shareholders on the key quantifiable factors which have been considered in determining STI grants 
for the year. Our financial results and quantitative outcomes are discussed on page 40 of this report, and I repeat the key 
factors here for completeness: 

• 

• 

• 

• 

• 

• 

decrease in diluted earnings per share attributable to shareholders of 1.3% in the 2023 financial year; compound 
annual growth rate (CAGR) in basic earnings per share attributable to shareholders of 24.2% over the five years to 
30 June 2023 

growth in total NPAT attributable to shareholders from $76.4 million in the 2022 financial year to $76.5 million in 
the 2023 financial year; CAGR in total NPAT attributable to shareholders of 27.1% over the five years to 30 June 
2023 

increase in FUM from $83.7 billion as at 30 June 2022 to $91.9 billion as at 30 June 2023 

net FUM inflows of $1.5 billion during the 2023 financial year 

net retail FUM inflows of $0.6 billion during the 2023 financial year 

81% of Affiliate strategies and products that have a track record of at least 5 years outperformed their benchmarks 
over the 5 years to 30 June 2023 

30

Annual Report     

 
The process used to determine remuneration outcomes remains unchanged. The Managing Director puts forward 
recommendations to the Remuneration and Nominations Committee for STI and LTI payment amounts for every eligible 
person. The Remuneration and Nominations Committee reviews the recommended amounts, considers Company results 
and decides on the amounts that it will recommend to the Board. Payments to KMP, and the aggregate amounts to be paid 
by Pinnacle, are reported and subject to shareholder review in our Annual Report and financial statements. 

Our remuneration framework is designed to attract, reward, motivate, empower and retain our most important asset, our 
people.  We remain confident this approach aligns the interests of our people and shareholders while meeting business 
needs and strategy goals.   

We hope you find the information set out in this letter and the Remuneration Report that follows to be instructive and 
helpful. 

Deborah Beale AM 
Chair of Remuneration and Nominations Committee 

31

Annual Report

2.

Key Management Personnel 
This Remuneration Report provides details of the remuneration of the Key Management Personnel of the Group for the 
year ended 30 June 2023. The Key Management Personnel for this period are listed in the tables below: 









Alan Watson, Deborah Beale, Lorraine Berends and Gerard Bradley (retired 1 January 2023), each being 
non-executive directors of the Company;

Ian Macoun, Andrew Chambers and Adrian Whittingham (retired 14 November 2022), each being 
executive directors of the Company; 

Dan Longan as Chief Financial Officer; 

Calvin Kwok as Chief Legal and Commercial Officer.

In accordance with the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 
2011 (Cth), the Key Management Personnel of the Group during the year ended 30 June 2023 comprised: 

Executive Key Management Personnel 

Name 

Ian Macoun 

Position 

Managing Director and Executive Director 

Andrew Chambers 

Executive Director 

Adrian Whittingham 

Executive Director (retired 14 November 2022) 

Dan Longan 

Calvin Kwok 

Chief Financial Officer 

Chief Legal and Commercial Officer 

Non-Executive Key Management Personnel 

Name 

Alan Watson 

Position 

Chair 

Deborah Beale AM 

Non-executive Director 

Lorraine Berends 

Non-executive Director 

Gerard Bradley AO 

Non-executive Director (retired 1 January 2023) 

32

Annual Report

3. 

Role of Remuneration and Nominations Committee 

The Remuneration and Nominations Committee is a committee of the Board. The committee performs its role consistent 
with the overall objective of ensuring maximum shareholder benefit from the retention of a high quality, high performing 
Board and executive team. Its responsibilities during the 2023 financial year included the following: 















reviewing and making recommendations in relation to the Group’s remuneration policies and practices 
to ensure that the Group provides a competitive and flexible remuneration structure; fairly and 
responsibly rewards employees; recognises categories of financial and non-financial performance; links 
reward to the creation of shareholder value; and adopts an appropriate balance between fixed 
remuneration, short-term incentives and long-term incentives;

reviewing executive remuneration and incentives and making recommendations to the Board in 
relation to share option schemes and equity participation plans;

setting the terms and conditions of the employment of the Managing Director; advising the Board on 
the Managing Director’s remuneration package; and reviewing the performance of the Managing 
Director at least annually including progress made towards achieving the Group’s strategic goals;

reviewing the remuneration of non-executive directors for serving on the Board or any committee
(both individually and in total) and recommending to the Board the remuneration and retirement
policies for non-executive directors having regard to market trends and shareholder interests;

setting the entitlements and expenses policy for the Chair, non-executive directors and the Managing 
Director;

ensuring the Group’s remuneration policies and practices comply with the provisions of the ASX Listing
Rules and the Corporations Act and have regard to the ASX Principles;

facilitating the review of individual directors’ performance and of the Board annually;

 making recommendations to the Board concerning the appointment of new directors and, to the extent

delegated to it by the Board, the Managing Director;











identifying individuals who, by virtue of their experience, expertise, skills, qualifications, backgrounds,
contacts or other qualities, are suitable candidates for appointment to the Board and recommending
individuals accordingly for consideration by the Board;

establishing procedures, for recommendation to the Chair, for the proper oversight of the Board and 
management;

preparing, recommending for approval by the Board and overseeing the implementation of the 
Company’s diversity policy;

on an annual basis, reviewing the proportion of women who are employed by the Company, receiving a
pay equity analysis and submitting a report to the Board outlining its findings; and

reviewing and approving relevant policies delegated to the Remuneration and Nominations Committee 
by the Board.

During the 2023 financial year, the Remuneration and Nominations Committee received recommendations on the 
remuneration for employees from the Managing Director. These recommendations were reviewed and, following 
discussion, recommendations were made to the Board. 

The Charter for the Remuneration and Nominations Committee is incorporated in the Company’s Corporate Governance 
Board Charters which can be found on the Company’s website at 
https://pinnacleinvestment.com/shareholders/#corporate-governance 

33

Annual Report

4. 

Executive remuneration policy and framework for the Company 

The Board remains focused on achieving sustainable growth and attractive returns for investors in the medium to long-
term. During the 2023 financial year, we have applied our remuneration framework consisting of base salary, short-term 
incentives and long-term incentives and our remuneration policy which is aimed at motivating and retaining highly-skilled 
executives and aligning their interests with shareholders. Section 5 of this Remuneration Report illustrates the sustained 
growth in Earnings Per Share (EPS) that the Company has delivered for its shareholders over a number of years. We made 
some important changes in 2021 to the hurdles in our LTI plan to further align future outcomes for employees with our 
shareholders, which we explain in further detail in the sections following.  

Our approach to remuneration is aligned with our purpose, to enable better lives through investment excellence, and our 
values. Pinnacle has a core set of KPIs, against which the performance of all employees is measured, in addition to KPIs set 
at a team or individual level, to ensure that these values are embedded in the behaviours of all employees and considered 
consistently as part of the remuneration process. These common KPIs are set out below: 

Pinnacle Purpose and Values 

Understand, and contribute strongly to Pinnacle’s Purpose and Values 

Client Focus 

Flexibility 

Work Ethic 

Innovation 

Risk 

Sustainability 

Demonstrate commitment to and accountability for strong client service and satisfaction, 
both with external clients and Affiliates through delivering on the promises we make to our 
clients 

Demonstrate flexibility and a preparedness to adapt to the changing needs of the Company 

Demonstrate a strong personal work ethic and commitment to being highly productive at all 
times 

Contribute to a culture of innovation and continuous improvement by suggesting ways in 
which we can enhance the manner in which we operate and interact with clients 

Foster a risk aware culture in which business activity occurs within Pinnacle’s Risk 
Management Framework and Risk Appetite Statement 
Contribute to a culture of acting lawfully, ethically and responsibly by complying with our 
legal, regulatory and ethical obligations in particular adhering to Pinnacle’s Code of Conduct 
and policies relevant to your role 

Contribute to an inclusive culture that enables performance and fosters collaboration, 
leading to investment excellence 

The remuneration framework and policy apply to Pinnacle employees only as Affiliates independently determine their own 
remuneration practices. 

Base salary 

Base salary is structured as a package, which may be delivered as a combination of cash and prescribed non-financial 
benefits and includes superannuation contributions.  

Employees are offered a competitive base salary, which is reviewed on promotion or a substantial change in 
responsibilities. 

There are no guaranteed base salary increases included in any employee’s contract. 

On 1 July 2021, there were revisions to the salaries of Executive Key Management personnel, recognizing the significant 
increase in responsibilities across the Group as the business has grown. There were no revisions to base salaries for 
Executive Key Management Personnel during FY23 and none are proposed in the annual review cycle at the 
commencement of FY24. 

34

Annual Report     

 
 
 
 
 
 
Short-term incentives (STI) 

STI is a discretionary ‘at risk’ cash incentive payment which is paid to employees on an annual basis and in accordance with 
remuneration policies and the terms and conditions of employment. 

The Remuneration and Nominations Committee is responsible for reviewing recommendations from the Managing 
Director for STI and recommending them to the Board for approval. 

All executives have an annual ‘maximum’ STI expectation (up to, but not exceeding, 100% of their base salaries) and, if 
their personal performance is strong, their work unit delivers on its key objectives and overall business performance meets 
or exceeds our objectives, then they should receive that expectation. We are clear that ‘results matter’ in determining 
remuneration, both at an individual and overall business level, and we have regard to performance against each of the 
common KPIs in determining STI, ensuring that all employees exhibit behaviours aligned with our values, together with 
individual performance. We do not believe, however, that inflexible, formulaic targets against which personal performance 
is measured would achieve the best outcomes for shareholders. We have a group of 15 Affiliates and supporting those 
which are early in their development and those which may be facing more challenging circumstances is as important to 
preserving and growing the value of our business as is continuing to deliver for Affiliates in times of great success. Certain 
initiatives require a significant investment of time, with no immediate reward, in order to lay the foundation for future 
growth in profitability. It is important that we are able to reward people for genuine high-performance, even when the 
results of their efforts do not immediately translate into numerical success. It is on that basis that STI is largely 
discretionary, with final determination by the Remuneration and Nominations Committee, following recommendations 
from the Managing Director, incorporating the input of all members of the leadership group.  

As well as individual performance, we also consider the performance of the business as a whole when determining STI for 
any given year. During the current financial year, results fell below our expectations and, even though this was to some 
extent due to circumstances outside of our control, it is important that the remuneration of our people reflects this, and 
reductions are therefore being made to the ‘maximum STI’ people are eligible to receive in respect of results and 
performance for FY23. We must always strike a balance between rewarding individual excellence, and recognizing that we 
are accountable, as a group, for the overall outcomes of the business.  

Performance against KPIs for the five Executive KMP is set out in the tables below: 

Managing Director 

Key Performance Indicators 

Outcomes 

 

Growth in NPAT 

 

Growth in diluted EPS 

 

Institutional and international net inflows, with 
particular reference to the Contained Annual 
Revenue of net inflows (FUM x Fee rate) 

 

Net Retail FUM inflows 

 

Investment performance of Affiliates 

 

 

 

 

 

 

Satisfaction from Affiliate MDs with respect to 
Pinnacle Distribution and Infrastructure Services 

Progress of Horizon 2 and Horizon 3 initiatives 

Succession plans in place for Pinnacle and Affiliate 
critical roles 

Drive high performance culture 

Enhance operational effectiveness 

No significant regulatory issues in AU, EU, USA 

 

 

 

 

 

 

 

 

 

 

 

NPAT increased by less than 1% to $76.5m 
KPI not met 

Diluted EPS decreased by 1% to 39.0c per share 
KPI not met 

Net institutional and international FUM inflows 
of $0.9 billion  
Net FUM inflows low but Contained Annual 
Revenue impact was positive - KPI not met 

Net Retail FUM inflows of $0.6 billion 
KPI not met 

81% of Affiliate strategies and products that 
have a track record of at least 5 years 
outperformed their benchmarks over the 5 
years to 30 June 2023 
KPI met 

KPI met 

KPI met 

Emergency, ready now succession plans and 
medium-term succession processes in place  
KPI met 

KPI met  

KPI met  

KPI met 

Financial 

Growth Strategy, Client and 
Investment Performance 

People 

Operations, Risk Management 
and Regulatory 

35

Annual Report     

 
 
 
Pinnacle Purpose and Values 

Client Focus 

Flexibility 

Work Ethic 

Innovation 

Risk 

Sustainability 

 

 

 

 

 

 

 

 

 

Protect and enhance the reputation of Pinnacle and 
promote a culture of risk management and 
disclosure 

Understand, and contribute strongly to Pinnacle’s 
Purpose and Values 

Demonstrate commitment to and accountability for 
strong client service and satisfaction, both with 
external clients and Affiliates 

Demonstrate flexibility and a preparedness to adapt 
to the changing needs of the Company 

Demonstrate a strong personal work ethic and 
commitment to being highly productive at all times 

Lead a culture of innovation and continuous 
improvement  

Lead a risk aware culture in which business activity 
occurs within Pinnacle’s Risk Management 
Framework and Risk Appetite Statement 

Lead a culture of acting lawfully, ethically and 
responsibly by complying with our legal, regulatory 
and ethical obligations in particular adhering to 
Pinnacle’s Code of Conduct and policies  
Lead an inclusive culture that enables performance 
and fosters collaboration, contributing to 
investment excellence 

 

 

 

 

 

 

 

KPI met 

KPI met 

KPI met 

KPI met 

KPI exceeded 

KPI met 

KPI met 

 

KPI met  

Executive Director, Institutional 
and International Distribution 

Key Performance Indicators 

Outcomes 

Financial 

People 

Pinnacle Purpose and Values 

Client Focus 

Flexibility 

Work Ethic 

Innovation 

Risk 

Sustainability 

 

 

 

 

 

 

 

 

 

 

Institutional and international net inflows, with 
particular reference to the Contained Annual 
Revenue of net inflows (FUM x Fee rate) 

Drive high performance culture 

Understand, and contribute strongly to Pinnacle’s 
Purpose and Values 

 

 

 

Net institutional and international FUM inflows 
of $0.9 billion  
Net FUM inflows low but Contained Annual 
Revenue impact was positive - KPI not met 

KPI met  

KPI met 

Demonstrate commitment to and accountability for 
strong client service and satisfaction, both with 
external clients and Affiliates 

 

KPI met 

Demonstrate flexibility and a preparedness to adapt 
to the changing needs of the Company 

Demonstrate a strong personal work ethic and 
commitment to being highly productive at all times 

Lead a culture of innovation and continuous 
improvement  

Lead a risk aware culture in which business activity 
occurs within Pinnacle’s Risk Management 
Framework and Risk Appetite Statement 

Lead a culture of acting lawfully, ethically and 
responsibly by complying with our legal, regulatory 
and ethical obligations in particular adhering to 
Pinnacle’s Code of Conduct and policies  
Lead an inclusive culture that enables performance 
and fosters collaboration, contributing to 
investment excellence 

 

 

 

KPI met 

KPI exceeded 

KPI met 

 

KPI met 

 

KPI met  

36

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Chief Financial Officer 

Key Performance Indicators 

Outcomes 

Financial 

Clients 

Process 

People 

Pinnacle Purpose and Values 

Client Focus 

Flexibility 

Work Ethic 

Innovation 

Risk 

Sustainability 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lead a culture of cost control and focus on value 
Optimise aggregate costs across the Affiliates 
leveraging scale 

Clients (Affiliates, LICs, Pinnacle Foundation) are 
satisfied with the quality and value of services 
delivered 

Deliver Services to Affiliates in a compliant manner 
in accordance with agreed SLAs 
Ensure PNI, Affiliate and Fund audits are delivered 
on time and within budget 
Deliver a technology platform that allows Pinnacle 
and Affiliates to operate in a secure, scalable 
manner 

Drive high performance culture 

Understand, and contribute strongly to Pinnacle’s 
Purpose and Values 

Demonstrate commitment to and accountability for 
strong client service and satisfaction, both with 
external clients and Affiliates 

Demonstrate flexibility and a preparedness to adapt 
to the changing needs of the Company 

Demonstrate a strong personal work ethic and 
commitment to being highly productive at all times 

Lead a culture of innovation and continuous 
improvement  

Lead a risk aware culture in which business activity 
occurs within Pinnacle’s Risk Management 
Framework and Risk Appetite Statement 

Lead a culture of acting lawfully, ethically and 
responsibly by complying with our legal, regulatory 
and ethical obligations in particular adhering to 
Pinnacle’s Code of Conduct and policies  
Lead an inclusive culture that enables performance 
and fosters collaboration, contributing to 
investment excellence 

 

KPI met 

 

KPI met 

 

KPI met 

 

 

KPI met  

KPI met 

 

KPI met 

 

 

 

KPI met 

KPI exceeded 

KPI met 

 

KPI met 

 

KPI met  

Chief Legal and Commercial 
Officer and Company Secretary 

Financial 

Corporate Activity 

Consistency and efficiency of 
performance 

Professional development and 
additional responsibilities 

People 

Pinnacle Purpose and Values 

Client Focus 

Key Performance Indicators 

Outcomes 

 

 

 

 

 

 

 

Optimise internal and external legal counsel 
spending commensurate with workload levels 

 

KPI met 

Involvement and contribution towards new 
corporate activity of the Company and Affiliates, 
including corporate action projects (capital raising, 
acquisitions, equity arrangements) and new 
strategic initiatives (Affiliates, products, 
geographies) 

Demonstrate ability to meet deadlines and maintain 
quality of work and advice 

Develop new competencies and taking on or 
expanding scope of additional responsibilities 

Drive high performance culture 

Understand, and contribute strongly to Pinnacle’s 
Purpose and Values 

 

KPI met 

 

 

 

 

KPI met 

KPI met 

KPI met  

KPI met 

Demonstrate commitment to and accountability for 
strong client service and satisfaction, both with 
external clients and Affiliates 

 

KPI met 

37

Annual Report     

 
 
 
 
 
 
 
Flexibility 

Work Ethic 

Innovation 

Risk 

Sustainability 

 

 

 

 

 

 

Demonstrate flexibility and a preparedness to adapt 
to the changing needs of the Company 

Demonstrate a strong personal work ethic and 
commitment to being highly productive at all times 

Lead a culture of innovation and continuous 
improvement  

Lead a risk aware culture in which business activity 
occurs within Pinnacle’s Risk Management 
Framework and Risk Appetite Statement 

Lead a culture of acting lawfully, ethically and 
responsibly by complying with our legal, regulatory 
and ethical obligations in particular adhering to 
Pinnacle’s Code of Conduct and policies  
Lead an inclusive culture that enables performance 
and fosters collaboration, contributing to 
investment excellence 

 

 

 

KPI met 

KPI exceeded 

KPI met 

 

KPI met 

 

KPI met  

Following the assessment of each KMP’s performance as outlined above, the following STI awards were made: 

KMP 

Ian Macoun 

Andrew Chambers 

Adrian Whittingham (retired 14 
November 2022) 

Dan Longan 

Calvin Kwok 

% of Maximum STI 
awarded  

25% 

50% 

0% 

50% 

50% 

Further detail relating to the Company’s approach to STI is set out in the letter from the Chair of the Remuneration and 
Nominations Committee at the beginning of this Remuneration Report. 

38

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term incentives (LTI) 

LTI is designed to encourage alignment of the interests of employees with increased value to shareholders in the long-
term. Participants are granted LTI, which only vest subject to specific conditions being met by the end of the vesting 
period. 

LTI awards are granted at the Board’s discretion following recommendations from the Remuneration and Nominations 
Committee, which has responsibility for reviewing recommendations made by the Managing Director in relation to LTI 
awards. 

Omnibus incentive plan 

On 22 August 2018, the Board approved the Pinnacle Omnibus Incentive Plan, which constitutes a set of LTI arrangements 
that provide for the ability to offer options, performance rights and loan funded shares to employees. 

Executives will principally be offered loan funded ordinary shares in the Company, whereby the Company will provide 
limited recourse loans to executives to acquire shares at their current market value at the time of grant. Shares issued 
prior to FY21 only vest if the employee remains employed with the Group for 5 years from the time of grant, with a portion 
vesting only upon the satisfaction of the following performance condition (in addition to the 5 year service condition): the 
Company’s earnings per share grows by an average annual growth rate of at least 15% per annum over the 5 year period.  

Shares issued from 1 July 2021 and beyond are 100% are subject to the satisfaction of various performance conditions and 
employment, as follows: 

o 

o 

o 

for Operations employees, 100% of their award will vest on a graduated basis, based on EPS growing by an 
average annual growth rate of at least 10% - 15% p.a. over a five-year period; 

for Retail Distribution employees, 50% of their award will vest on a graduated basis, based on EPS growing by an 
average annual growth rate of at least 10% - 15% p.a. over a five-year period, and the remaining 50% will be 
earnt on a graduated basis, subject to the satisfaction of total annual retail net inflow targets; and 

for Institutional Distribution employees, 50% of their award will vest on a graduated basis, based on EPS growing 
by an average annual growth rate of at least 10% - 15% p.a. over a five-year period, and the remaining 50% will 
be earnt on a graduated basis, subject to the satisfaction of Contained Annual Revenue in net inflow targets 

During the 2023 financial year, 150,000 loan shares were forfeited by departing employees. Additionally, 1,017,000 loan 
shares and 100,000 options were issued to existing employees.  

39

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5. 

Links between performance and outcomes 

During the 2023 financial year, the Managing Director conducted performance reviews of executives and made 
recommendations to the Remuneration and Nominations Committee in respect of their STIs and any awards of LTI. In 
making those recommendations, regard was given to the Group, team and individual performance relative to expectations 
(both financial and non-financial) over the period, as well as to the degree of responsibility involved in each role. 

The table below shows key financial performance indicators which have been applied consistently over many years, with 
the support and encouragement of shareholders, to measure the progress of the Group’s performance during the 2023 
financial year and over the last five financial years. 

 

 

 

 

 

 

decrease in diluted earnings per share attributable to shareholders of 1.3% in the 2023 financial year; 
compound annual growth rate (CAGR) in basic earnings per share attributable to shareholders of 24.2% 
over the five years to 30 June 2023 

growth in total NPAT attributable to shareholders from $76.4 million in the 2022 financial year to $76.5 
million in the 2023 financial year; CAGR in total NPAT attributable to shareholders of 27.1% over the 
five years to 30 June 2023 

increase in FUM from $83.7 billion as at 30 June 2022 to $91.9 billion as at 30 June 2023 

net FUM inflows of $1.5 billion during the 2023 financial year 

net retail FUM inflows of $0.6 billion during the 2023 financial year 

81% of Affiliate strategies and products that have a track record of at least 5 years outperformed their 
benchmarks over the 5 years to 30 June 2023 

Key indicators of the Company’s progress towards achieving its medium-term objectives included:  

Net profit/(loss) after tax from continuing operations attributable to 
shareholders ($m) 

76.5 

Total net profit/(loss) after tax attributable to shareholders ($m) 

76.5 

Funds Under Management ($bn)* 

Net FUM Inflows* 

Net Retail FUM Inflows* 

Closing share price ($) 

Dividend per share (cents) 

Basic earnings per share (cents) from continuing operations 

Diluted earnings per share (cents) from continuing operations 

Basic earnings per share (cents) attributable to shareholders 

Diluted earnings per share (cents) attributable to shareholders 

* Non-statutory measure 

91.9 

1.5 

0.6 

9.98 

36.0 

39.3 

39.0 

39.3 

39.0 

76.4 

76.4 

83.7 

0.6 

3.6 

7.03 

35.0 

40.2 

39.5 

40.2 

39.5 

67.0 

67.0 

89.4 

16.7 

4.5 

32.4 

32.2 

58.7 

3.0 

0.9 

30.5 

30.5 

54.3 

6.5 

2.9 

11.97 

3.92 

4.38 

28.7 

38.2 

36.5 

38.2 

36.5 

15.40 

15.40 

18.9 

18.0 

18.8 

17.9 

18.3 

17.1 

18.3 

17.1 

40

Annual Report     

 
 
 
 
 
 
6. 

Details of Executive Key Management Personnel remuneration 

The relative weightings of the three remuneration components for Key Management Personnel are set out in the table 
below for the year to 30 June 2023. 

71% 

46% 

100% 

46% 

44% 

STI 

17% 

23% 

0% 

21% 

22% 

LTI 

12% 

31% 

0% 

33% 

34% 

Ian Macoun 

Andrew Chambers 

Adrian Whittingham 

Dan Longan 

Calvin Kwok 

Ian Macoun 

Mr Macoun’s base salary remained unchanged at $750,000 per annum (inclusive of superannuation) during the year. For 
FY23, he earned an STI of $187,500 (inclusive of superannuation).  STI is a performance incentive of up to 100% of base 
salary awarded on the basis of meeting business and strategic objectives.  

Andrew Chambers 

Mr Chambers’ base salary remained unchanged at $510,000 per annum (inclusive of superannuation) during the year. For 
FY23, he earned an STI of $255,000 (inclusive of superannuation). STI is a performance incentive of up to 100% of base 
salary awarded on the basis of meeting business and strategic objectives. 

Adrian Whittingham 

Mr Whittingham’s base salary remained unchanged at $450,000 per annum (inclusive of superannuation). For FY23, he 
earned an STI of nil. STI is a performance incentive of up to 100% of base salary awarded on the basis of meeting business 
and strategic objectives. Mr Whittingham retired from the board on 14 November 2022 and was a KMP until this date. He 
ceased employment on 31 December 2022. 

Dan Longan 

Mr Longan’s base salary remained unchanged at $350,000 per annum (inclusive of superannuation) during the year. For 
FY23, he earned an STI of $175,000 (inclusive of superannuation). STI is a performance incentive of up to 100% of base 
salary awarded on the basis of meeting business and strategic objectives. 

Calvin Kwok 

Mr Kwok’s base salary remained unchanged at $352,000 per annum (inclusive of superannuation) during the year. For 
FY23, he earned an STI of $176,000 (inclusive of superannuation). STI is a performance incentive of up to 100% of base 
salary awarded on the basis of meeting business and strategic objectives. 

Remuneration details for Executive Key Management Personnel (calculated in accordance with applicable accounting 
standards) are set out in the table below:   

41

Annual Report     

 
 
 
 
 
Short-term 
employee 
benefits 

Post-
employm
ent 
benefits 

Cash salary 
& fees 
$ 

Cash Bonus (STI) 
$ 

Non-
monetar
y 
benefits 
$ 

Super 
annu 
ation 
$ 

Retire
-ment 
Benef
its 
$ 

Long-
term 
benef
its 

Long 
Service 
leave 
$ 

Total  
short-
term and 
post-
employ-
ment 
benefits 
$ 

Share based 
pay-ments 

Termi
nation 
benefi
ts 
$ 

Total 
$ 

Options & Rights (LTI) 
$ 

Portion 
of 
remun
eration 
at risk - 
STI 
% 

Portion of 
remunerati
on at risk - 
LTI 
% 

Name 
Managing 
Director 

Ian Macoun 

2023 

2022 

722,500 

187,500 

722,500 

375,000 

-  

-  

27,500 

27,500 

-- 

-- 

937,500 

11,695 

129,917 

1,125,000  48,358 

129,917 

Other Key 
Management 
Personnel 
Andrew 
Chambers 

2023 

2022 

Adrian 
Whittingham 

482,500 

255,000 

482,500 

357,000 

2023* 

197,500 

- 

2022 

422,500 

315,000 

Dan Longan 

2023 

2022 

Calvin Kwok 

2023 

2022 

Totals 

2023 

2022 

322,500 

175,000 

322,500 

245,000 

324,500 

176,000 

324,500 

246,400 

2,049,500 

793,500 

2,274,500 

1,538,400 

* Remuneration is pro-rated to 31 December 2022.  

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

27,500 

27,500 

27,500 

27,500 

27,500 

27,500 

27,500 

27,500 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

765,000 

8,214 

346,447 

867,000 

12,957 

346,447 

225,000 

(7,930) 

765,000 

6,318 

- 

- 

525,000 

18,821 

271,871 

595,000 

13,593 

271,871 

528,000 

7,054 

276,363 

598,400 

20,409 

276,363 

137,500` 

-- 

2,980,500  37,854 

1,024,598 

137,500` 

-- 

3,950,400  101,635 

1,024,598 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

-- 

1,079,112 

17% 

12% 

1,303,275 

29% 

9% 

1,119,661 

23% 

31% 

1,226,404 

29% 

28% 

217,070 

0% 

0% 

771,318 

41% 

0% 

815,692 

21% 

33% 

880,464 

28% 

31% 

811,417 

22% 

34% 

895,172 

27% 

31% 

4,042,952 

5,076,633 

42

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7. 

Executive service agreements 

Remuneration and other terms of employment for Executive Key Management Personnel are formalised in service 
agreements. 

Ian Macoun 

Mr Macoun’s contract provides for termination by either party upon giving three months’ notice except where termination 
is due to misconduct. In addition, as part of the PIML Acquisition, shareholders voted to approve the payment of 
termination benefits to Mr Macoun in an amount of $900,000 or 12 months’ salary (whichever is higher), should Mr 
Macoun’s employment be terminated in certain circumstances and consistent with his previous terms of employment. The 
termination provisions were agreed between Mr Macoun and PIML as part of his employment agreement in 2006 when he 
was initially employed by the Group. Termination benefits are not payable in the event of misconduct. No termination 
benefits were paid during the 2023 financial year. 

In November 2018, 300,000 loan shares were issued to Mr Macoun under the Pinnacle Omnibus Plan, approved by the 
board on 22 August 2018. The shares were subject to service and performance conditions and vested after three years. The 
loans are interest free and limited in recourse to the shares. They are repayable 10 years from grant date, on termination 
of employment or when the underlying equity is sold, whichever occurs earlier.  

Andrew Chambers 
Andrew Chambers, an executive director of the Company, is engaged under an employment agreement dated 9 March 
2008 and subsequently amended on 7 May 2015 and 25 August 2016. The contract provides for termination by either 
party on at least three months’ notice, except where termination is due to misconduct. 

In June 2009, July 2011 and January 2012, PIML advanced to Mr Chambers’ nominated shareholding entity three 
unsecured, limited recourse and interest free loans to acquire shares in PIML. The loans were immediately repayable if Mr 
Chambers ceased employment with the Company or sold some or all of his shares. 

In November 2018, 800,000 loan shares were issued to Mr Chambers under the Pinnacle Omnibus Plan, approved by the 
board on 22 August 2018. The shares are subject to service and performance conditions and will vest after five years, if 
those conditions are met. The loans are interest free and limited in recourse to the shares. They are repayable 10 years 
from grant date, on termination of employment or when the underlying equity is sold, whichever occurs earlier.  

Adrian Whittingham 

Mr Whittingham retired from the board on 14 November 2022 and ceased employment on 31 December 2022. 

Dan Longan 

Dan Longan, the Chief Financial Officer, is engaged under an employment agreement dated 9 November 2015. The 
contract provides for termination by either party on one month’s notice except where termination is due to misconduct. 

In September 2018, 150,000 loan shares were issued to Mr Longan under the Pinnacle Omnibus Plan, approved by the 
board on 22 August 2018. The shares are subject to service and performance conditions and will vest after five years, if 
those conditions are met. The loans are interest free and limited in recourse to the shares. They are repayable 10 years 
from grant date, on termination of employment or when the underlying equity is sold, whichever occurs earlier. 

In September 2020, a further 200,000 loan shares were issued to Mr Longan under the Pinnacle Omnibus Plan. The shares 
are all subject to both service and performance conditions and will vest after five years, if all of those conditions are met. 
The loans are interest free and limited in recourse to the shares. They are repayable on termination of employment or 
when the underlying equity is sold, whichever occurs earlier. 

In September 2021, a further 100,000 loan shares were issued to Mr Longan under the Pinnacle Omnibus Plan. The shares 
are all subject to both service and performance conditions and will vest after five years, if all of those conditions are met. 
The loans are interest free and limited in recourse to the shares. They are repayable on termination of employment or 
when the underlying equity is sold, whichever occurs earlier. 

43

Annual Report     

 
 
Calvin Kwok 

Calvin Kwok, the Chief Legal and Commercial Officer, is engaged under an employment agreement dated 10 November 
2014. The contract provides for termination by either party on one month’s notice except where termination is due to 
misconduct. 

In September 2018, 250,000 loan shares were issued to Mr Kwok under the Pinnacle Omnibus Plan, approved by the board 
on 22 August 2018. The shares are subject to service and performance conditions and will vest after five years, if those 
conditions are met. The loans are interest free and limited in recourse to the shares. They are repayable 10 years from 
grant date, on termination of employment or when the underlying equity is sold, whichever occurs earlier. 

In September 2020, a further 200,000 loan shares were issued to Mr Kwok under the Pinnacle Omnibus Plan. The shares 
are all subject to both service and performance conditions and will vest after five years, if all of those conditions are met. 
The loans are interest free and limited in recourse to the shares. They are repayable on termination of employment or 
when the underlying equity is sold, whichever occurs earlier. 

In September 2021, a further 50,000 loan shares were issued to Mr Kwok under the Pinnacle Omnibus Plan. The shares are 
all subject to both service and performance conditions and will vest after five years, if all of those conditions are met. The 
loans are interest free and limited in recourse to the shares. They are repayable on termination of employment or when 
the underlying equity is sold, whichever occurs earlier. 

44

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8. 

Non-executive director remuneration 

The structure of non-executive director remuneration is separate and distinct from that of executive remuneration. 

The Board seeks to set aggregate remuneration at a level that provides the Group with the ability to attract and retain non-
executive directors with the appropriate skills and experience while incurring a cost that is acceptable to shareholders and 
other stakeholders. 

Non-executive directors’ fees are determined within an aggregate non-executive directors’ fee pool limit, with any increase 
in the fee pool requiring approval by shareholders. The fee pool is a maximum annual limit and does not indicate that fees 
will necessarily be increased according to that limit. During the previous financial year, the fee pool was increased from 
$600,000 per annum to $1,200,000 per annum. The increase in the fee pool was: 

- 

- 

to allow for some growth in non-executive directors’ remuneration now and in the future to align closer to non-
executive director remuneration of companies of similar size, profitability, growth and risk profile in the financial 
services sector; and 

to enable the Board to appoint up to two new non-executive directors in the future and to ensure that the 
Company has the ability to remunerate competitively and attract and retain high calibre non-executive directors. 

The increase in the fee pool to $1,200,000 per annum was approved by shareholders at the Company’s annual general 
meeting on 26 October 2021.  

Non-executive directors are able to sacrifice up to 100% of their fees in favour of immediately vesting performance rights 
under the Pinnacle Omnibus Incentive Plan, as approved at the AGM on 15 November 2018. To align the interests of non-
executive directors with the long term interests of shareholders, each non-executive director is required to acquire and 
hold Company shares equal to 150% of their annual gross Director Fees (inclusive of Board Committee fees). During the 
2023 financial year, nil (2022: 5,274) performance rights were granted to non-executive directors; 3,516 (2022: 19,497) 
were exercised during the year. The performance rights were granted in lieu of fees. 

The annual fees paid to non-executive directors for Board and Committee positions are set out in the table below: 

Chair 

Non-executive Director 

Audit Compliance and Risk Management Committee 

 

 

Chair 

Member 

Remuneration and Nominations Committee 

 

 

Chair 

Member 

Base fees 

$240,000 

$130,000 

$20,000 

$7,500 

$20,000 

$7,500 

Non-executive directors do not receive, nor are eligible for, STI, any non-monetary benefits, termination allowances, long-
service leave or LTI. The Company does not provide retirement allowances for non-executive directors, which is consistent 
with the guidance contained in the ASX Principles. Superannuation contributions required under the Australian 
superannuation guarantee legislation are deducted from the relevant directors’ overall fee entitlements where their fees 
are paid through payroll. 

45

Annual Report     

 
 
 
 
 
 
Total remuneration for the non-executive directors in relation to the Company, Committee positions and subsidiaries for 
the 2023 financial year was $652,250 and is presented in accordance with applicable accounting standards and shown in 
the table below: 

Name 

Non-executive Directors 

Alan Watson 

2023 

2022 

Deborah Beale AM 

2023 

2022 

Gerard Bradley AO 

2023* 

2022* 

Lorraine Berends 

2023 

2022 

Totals 

2023 

2022 

Cash salary & fees 
$ 

Superannuation 
$ 

Performance Rights 
$ 

Total 
$ 

227,107 

180,875 

126,527 

92,692 

70,871 

136,461 

136,878 

121,212 

561,383 

531,240 

23,518 

18,088 

13,285 

9,269 

7,441 

- 

14,372 

12,121 

58,616 

39,478 

- 

27,704 

17,688 

43,039 

17,688 

43,039 

- 

- 

35,376 

113,782 

250,625 

226,667 

157,500 

145,000 

96,000 

179,500 

151,250 

133,333 

655,375 

684,500 

*Includes $17,250 (2022: $34,500) fee for Pinnacle Fund Services Limited compliance committee. Mr Bradley retired from the board on 1st January 2023. 

New non-executive director appointments 

On appointment to the Board, new non-executive directors are provided with a letter of appointment setting out the 
Company’s expectations, their responsibilities, rights and the terms and conditions of their engagement. All new non-
executive directors participate in an induction process, which covers the operation of the Board and its committees and 
financial, strategic, operational and risk management issues. For further detail, refer to the Corporate Governance 
Statement on the Company’s website. 

46

Annual Report     

 
 
 
 
 
 
9. 

Share-based payment compensation 

Loan Shares 
The terms and conditions of each grant of equity and associated loan to Key Management Personnel is provided at pages 
43 to 44. Details of the loan arrangements affecting remuneration in the previous, this or future reporting periods as at 30 
June 2023 are as follows: 

Share based 
payments value 
(i) 

Vesting date 

Number of 
shares vested 

Value ($) of 
shares vested 
(ii) 

Final 
repayment 
date 

Number 
of 
shares 
forfeited 
/lapsed 
/sold 

Value ($) of 
shares 
forfeited 
/lapsed /sold 

Date of 
grant 

Number of loan 
shares 

Loan value at 
date of grant 

Name 

Key Management Personnel of the Group 

Ian Macoun 

Loan 
shares 
Loan 
Shares 
Loan 
Shares 
Loan 
Shares 
Sub-
Total 

25-Aug-16  288,210 

$273,799 

$30,799 

31-Dec-18 

288,210 

$1,265,242 

25-Aug-16  287,888 

$273,494 

$33,846 

31-Jan-20 

287,888 

$1,378,984 

25-Aug-16  1,111,112 

$500,000 

$14,162 

25-Aug-16 

1,111,112 

$1,955,555 

15-Nov-18  300,000 

$1,697,460 

$649,587 

14-Nov-21 

300,000 

$5,385,000 

1,987,210 

$2,744,753 

$728,394 

1,987,210 

$9,984,781 

Andrew Chambers 

Loan 
Shares 
Loan 
Shares 
Loan 
Shares 
Loan 
Shares 
Loan 
Shares 
Sub-
Total 

25-Aug-16  133,509 

$126,834 

$1,221 

21-Mar-17  133,509 

$311,076 

25-Aug-16  288,210 

$273,799 

$30,799 

31-Dec-18 

288,210 

$1,265,242 

25-Aug-16  287,888 

$273,494 

$36,392 

31-Dec-20 

287,888 

$2,044,005 

25-Aug-16  1,111,112 

$500,000 

$14,162 

25-Aug-16 

1,111,112 

$1,955,555 

15-Nov-18  800,000 

$4,526,560 

$1,732,233 

14-Nov-23 

- 

- 

2,620,719 

$5,700,687 

$1,814,807 

1,820,719 

$5,575,878 

Adrian Whittingham 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

25-Aug-16  1,111,112 

$500,000 

$14,162 

25-Aug-16 

1,111,112 

$1,955,555 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

18-Mar-22 

18-Mar-22 

25-Aug-21 

18-Mar-22 

18-Mar-22 

25-Aug-21 

25-Aug-21 

Loan 
Shares 
Loan 
Shares 
Sub-
Total 

15-Nov-18  300,000 

$1,697,460 

$649,587 

14-Nov-23 

- 

- 

300,000  $1,697,460 

1,411,112 

$2,197,460 

$663,749 

1,111,112 

$1,955,555 

300,000  $1,697,460 

Dan Longan 

Loan 
Shares 
Loan 
Shares 
Loan 
Shares 
Sub-
Total 

17-Sep-18  150,000 

$1,093,755 

$388,592 

16-Sep-23 

11-Sep-20  200,000 

$1,048,080 

$497,565 

10-Sep-25 

17-Sep-21  100,000 

$1,681,750 

$597,724 

16-Sep-26 

450,000 

$3,823,585 

$1,483,881 

Calvin Kwok 

Loan 
Shares 
Loan 
Shares 
Loan 
Shares 

Sub-
Total 

17-Sep-18  250,000 

$1,822,925 

$647,653 

16-Sep-23 

11-Sep-20  200,000 

$1,048,080 

$497,565 

10-Sep-25 

17-Sep-21  50,000 

$840,890 

$298,862 

16-Sep-26 

500,000 

$3,711,895 

$1,444,080 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

(i) Fair values are calculated using a Black-Scholes option pricing model that takes into account the exercise price, the terms of the arrangement, the share price at grant date and 
expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the arrangement.  (ii) The amount is based on the intrinsic 
value of the option or right at vesting date. 

47

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10. 

Equity instrument disclosures relating to Key Management 
Personnel 

Options and rights holdings 

The number of options and rights over ordinary shares in the Company held during the 2023 financial year by the directors 
of the Company and other Key Management Personnel of the Group, including personally related parties, are set out 
below. 

Balance start of the year 

Granted as compensation 

Exercised 

Expired and another changes 

Balance at end of the year 

Shareholdings  

2023 

3,516 

- 

2022 

17,739 

5,274 

(3,516) 

(19,497) 

- 

- 

- 

3,516 

The numbers of shares in the Company held during the financial year by each director of the Company and other Key 
Management Personnel of the Group, including their related parties, are set out below. 

Non-executive directors 

Alan Watson 

Lorraine Berends 

Deborah Beale AM 

Gerard Bradley AO (retired 1 January 
2023) 

Executive directors 

Ian Macoun 

Andrew Chambers 

Adrian Whittingham (retired 14 
November 2022) 

Key Management Personnel 

Dan Longan 

Calvin Kwok 

Balance at 
start of year 

174,172 

27,000 

127,681 

77,430 

18,276,077 

5,303,614 

2,228,614 

450,000 

514,014 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Granted 
during 
reporting  
year as 
compensation 

Received 
during the 
year on the 
exercise of 
rights 

Other 
changes 
during the 
year 

Balance at the 
end of the year 
or on date of 
ceasing to be 
KMP if earlier 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

1,758 

1,758 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

174,172 

27,000 

129,439 

79,188 

18,276,077 

5,303,614 

2,228,614 

450,000 

514,014 

48

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
 
11. 

Loans to Key Management Personnel 

Details of loans made to directors of the Company and other Key Management Personnel of the Group, including their 
related parties, are set out below. 

(i)  Aggregates for Key Management Personnel 

Other 
changes 
during the 
year 
$ 

Balance at 
start of year 
$ 

Repayments 
made 
$ 

New Loans 
Issued 
$ 

Loan Shares 
Forfeited 
$ 

Interest paid 
and payable for 
the year 
$ 

Interest not 
charged 
$ 

Balance at 
end of year 
$ 

Number 
in Group at 
end of year 

2023 

12,938,391 

- 

(528,132) 

- 

- 

- 

726,667 

12,410,259  4 

Details of options provided as remuneration to Executive Key Management Personnel are set out below. 

(ii)  Individuals with loans above $100,000 during the financial year  

Other 
changes 
during the 
year 
$ 

Balance at 
start of year 
$ 

Repayments 
made 
$ 

New Loans 
Issued 
$ 

Loan Shares 
Forfeited 
$ 

Interest paid 
and payable for 
the year 
$ 

Interest not 
charged 
$ 

Balance at 
end of year 
$ 

Highest 
indebtedne
ss during 
the year 

Ian Macoun 

1,522,568 

Andrew Chambers  4,294,442 

Adrian 
Whittingham 

- 

Dan Longan 

3,645,015 

Calvin Kwok 

3,476,323 

- 

- 

- 

- 

- 

(75,180) 

(214,882) 

- 

(112,770) 

(125,300) 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

85,130 

1,447,388  1,522,568 

239,750 

4,079,560  4,294,442 

- 

- 

- 

205,941 

3,532,245  3,645,015 

195,845 

3,351,023  3,476,323 

The loans referenced in the above table comprise: 

 

 

 

loans originally advanced by PIML for the purpose of acquiring shares in PIML 

the New Loans 

loans granted under the Pinnacle Omnibus Plan. 

As part of the PIML Acquisition, shareholders approved the repayment of the original loans with the proceeds of loans 
reissued by the Company on 25 August 2016, as well as the advance of the New Loans. See pages 43 to 44 for further detail 
on the terms of the loans. 

During the year to 30 June 2022, 150,000 loan shares were issued to Key Management Personnel (having been granted in 
relation to FY21). No further loan shares were Issued to Key Management Personnel during FY23. See pages 43 to 44 for 
further details on the terms of the loans. 

The amounts shown for interest not charged in the tables above represent the difference between the amount paid and 
payable for the year and the amount of interest that would have been charged on an arms’ length basis. 

End of Remuneration Report 

49

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity Capital 

Shares under option  

Unissued ordinary shares of the Company under option at 30 June 2023 are as follows: 

Date options granted 

Expiry date 

Exercise price of options 

Number under option 

15 November 2018 

15 November 2028 

25 March 2020 

25 March 2030 

11 September 2020 

11 September 2030 

30 December 2020 

30 December 2030 

$5.6582 

$2.9683 

$5.2404 

$6.8447 

17 September 2021 

17 September 2031  

$16.8178 

30 September 2022 

30 September 2032  

$8.6456 

TOTAL 

100,000 

200,000 

200,000 

100,000 

100,000 

100,000 

800,000 

On 15 November 2018, 250,000 options were issued to overseas employees under the Pinnacle Omnibus Plan. 150,000 of 
these options were forfeited by departing employees during the year ended 30 June 2021. 

On 25 March 2020, 200,000 options were issued to overseas employees under the Pinnacle Omnibus Plan.  

On 11 September 2020 and 30 December 2020, 200,000 and 100,000 options respectively were issued to overseas 
employees under the Pinnacle Omnibus Plan. 

On 17 September 2021, 100,000 options were issued to overseas employees under the Pinnacle Omnibus Plan. 

On 30 September 2022, 100,000 options were issued to overseas employees under the Pinnacle Omnibus Plan.  

50

Annual Report     

 
 
 
 
 
 
 
Meetings of Board and Board Committees 

The number of meetings of the Company’s Board and of the Board Committees held during the year ended 30 June 2023 
and the number of meetings attended by each director were as follows: 

Board 

Audit, Compliance and Risk 
Management Committee 

Remuneration and Nominations 
Committee 

Attended 

Eligible to Attend 

Attended 

Eligible to Attend 

Attended 

Eligible to Attend 

A Watson 

I Macoun 

D Beale AM 

12 

12 

12 

G Bradley AO (retired 
1 January 2023) 

6 

L Berends 

A Chambers 

12 

12 

12 

12 

12 

6 

12 

12 

6 

6 

6 

3 

6 

- 

3* 

-** 

6 

3 

6 

- 

8 

8 

8 

4 

8 

- 

8 

-** 

8 

4 

8 

- 

A Whittingham 
(retired 14 November 
2022) 
* A Watson was appointed member of the Audit, Compliance and Risk Management Committee (ACRMC) on 30 January 2023. Prior to 30 January 2023, A Watson attended ACRMC 
meetings by invitation. 
** I Macoun attended respective meetings by invitation. 

3 

3 

- 

- 

- 

- 

Board Committee Membership 

As at the date of this report, the Company had an Audit, Compliance and Risk Management Committee and a 
Remuneration and Nominations Committee. 

Members acting on the Board Committees are: 

Audit, Compliance and Risk Management 
Committee 

L Berends (Chair) 

D Beale AM 

A Watson 

Company Secretary 

Remuneration and Nominations Committee 

D Beale AM (Chair) 

L Berends 

A Watson 

The role of Company Secretary is performed by Mr Calvin Kwok. Mr Kwok is also Chief Legal and Commercial Officer of the 
Company with prior experience at Herbert Smith Freehills, UBS Global Asset Management and Deutsche Bank. Mr Kwok 
holds a Masters of Applied Finance, a Graduate Diploma of Applied Corporate Governance, a Bachelor of Laws and a 
Bachelor of Commerce. 

Environmental regulation 

The Group is not affected by any significant environmental regulation in respect of its operations. 

51

Annual Report     

 
 
 
 
 
 
 
 
Insurance of officers 

The Company has paid a premium for a contract insuring all directors and executive officers of the Company and certain 
related bodies corporate against all liabilities and expenses arising as a result of work performed in their respective 
capacities, to the extent permitted by law. The directors have not included in this report details of the nature of the 
liabilities covered or the amount of the premium paid in respect of the directors and executive officers insurance liability 
contract as disclosure is prohibited under the terms of the contract. 

The Company has agreed to indemnify each person who is, or has been, a director, officer or agent of the Company and/or 
of certain of its related bodies corporate against all liabilities to another person (other than the Company or a related body 
corporate) that may arise from their position as director, officer or agent, except where the liability arises out of conduct 
involving a lack of good faith. The Company is required to meet the full amount of any such liabilities, including costs and 
expenses for a period of seven years. 

No liability has arisen since the end of the previous financial year which the Company would, by operation of the above 
indemnities, be required to meet. 

Audit and non-audit services 

The Company may decide to employ the Auditor (PricewaterhouseCoopers Australia) on assignments additional to their 
statutory audit duties. 

Details of the amounts paid or payable to the Auditor for audit and non-audit services provided during the year are set out 
below. 

The Board has considered the position and, in accordance with the advice received from the Audit, Compliance and Risk 
Management Committee, is satisfied that the provision of the non-audit services is compatible with the general standard 
of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the provision of non-
audit services by the Auditor, as set out below, did not compromise the auditor independence requirements of the 
Corporations Act 2001 for the following reasons: 

 

 

all non-audit services have been reviewed by the Audit, Compliance and Risk Management Committee 
to ensure they do not impact the impartiality and objectivity of the Auditor; and 

none of the services undermine the general principles relating to auditor independence as set out in 
APES 110 Code of Ethics for Professional Accountants, including reviewing or auditing the Auditor’s own 
work, acting in a management or a decision-making capacity for the Company, acting as advocate for 
the Company or jointly sharing economic risk and rewards. 

52

Annual Report     

 
 
During the 2023 financial year the following fees were paid or are payable for services provided by the Auditor, its related 
practices and non-related audit firms: 

(i) Audit and other assurance services 

Audit and review of financial statements 

289,635 

291,100 

Other assurance services: 

Audit of regulatory returns 

Audit of compliance plan – Responsible entity * 

Other assurance services 

25,560 

131,905 

- 

24,000 

137,350 

- 

Total remuneration for audit and other assurance services 

447,100 

452,450 

(ii) Taxation services 

Tax services 

Total remuneration for taxation services 

(iii) Other services 

Other services 

Total remuneration of PricewaterhouseCoopers Australia 

Total remuneration of auditors 

37,165 

37,165 

- 

484,265 

484,265 

56,657 

56,657 

- 

509,197 

509,197 

* Compliance plan audit charges are on-charged to managed funds to which responsible entity services are provided. 

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 55 of the 2023 Annual Report. 

Rounding of amounts 

The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors reports) Instrument 2016/191, 
issued by the Australian Securities and Investments Commission, relating to the 'rounding off' of amounts in the directors’ 
report. 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. 

Auditor 

PricewaterhouseCoopers continues in office in accordance with section 327 of the Corporations Act. This report is made in 
accordance with a resolution of directors. 

A Watson 
Chair 
Pinnacle Investment Management Group Limited 

Sydney 
2 August 2023 

53

Annual Report     

 
 
 
 
  
 
 
 
07 

54

Annual Report

Auditor’s Independence Declaration 

As lead auditor for the audit of Pinnacle Investment Management Group Limited for the year ended 30 
June 2023, I declare that to the best of my knowledge and belief, there have been:  

(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in

relation to the audit; and

(b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Pinnacle Investment Management Group Limited and the entities it 
controlled during the period. 

Ben Woodbridge 
Partner 
PricewaterhouseCoopers 

Brisbane 
2 August 2023 

PricewaterhouseCoopers, ABN 52 780 433 757 
480 Queen Street, BRISBANE  QLD  4000, GPO Box 150, BRISBANE  QLD  4001 
T: +61 7 3257 5000, F: +61 7 3257 5999, www.pwc.com.au 

Liability limited by a scheme approved under Professional Standards Legislation. 

5

  Annual Report

5

08 

Pinnacle Investment Management Group Limited 

ABN 22 100 325 184 

Financial Report – 30 June 2023 

Contents 

Consolidated statement of profit or loss 

Consolidated statement of comprehensive income 

Consolidated statement of financial position 

Consolidated statement of changes in equity 

Consolidated statement of cash flows 

Notes to the consolidated financial statements 

57 

58 

59 

60 

61 

62 

These financial statements are the consolidated financial statements of the consolidated entity consisting of Pinnacle 
Investment Management Group Limited and its subsidiaries. The financial statements are presented in the Australian 
currency. 

Pinnacle Investment Management Group Limited is a Company limited by shares, incorporated and domiciled in Australia. 
Its registered office is Level 19, 307 Queen St, Brisbane QLD 4000 and its principal place of business is Level 25, 264 George 
Street, Sydney NSW 2000. 

A description of the nature of the consolidated entity’s operations and its principal activities is included in the directors' 
report, which is not part of these financial statements. 

These financial statements were authorised for issue by the directors on 2 August 2023. The directors have the power to 
amend and reissue the financial statements. 

Through the use of the internet, we have ensured that our corporate reporting is timely and complete. All press releases, 
financial reports and other information are available at the ‘about us’ and investor relations pages on our website: 
www.pinnacleinvestment.com/shareholders-investor-centre 

56

Annual Report     

 
 
 
 
Consolidated statement of profit or loss 

For the year ended 30 June 2023 

Revenue from contracts with customers and other revenue 

1 

45,513 

45,997 

Fair value gains/(losses) on financial assets at fair value through profit or loss 

8,095 

(3,875) 

Fair value gains/(losses) on financial assets at fair value through profit or loss (non-current) 

600 

- 

Notes 

2023 
$’000 

2022 
$’000 

Employee benefits expense 

Short-term incentives expense 

Long-term incentives expense  

Professional services expense 

Property expense 

Travel and entertainment expense 

Technology and communications expense 

Donations 

Finance cost 

(22,541) 

(19,991) 

(4,711) 

(6,586) 

28 

(3,408) 

(2,848) 

(1,817) 

(1,681) 

2 

(1,308) 

(973) 

(1,076) 

(676) 

(1,842) 

(1,484) 

(709) 

(760) 

(6,064) 

(2,382) 

(1,619) 

(2,251) 

- 

(1,811) 

Other expenses from operating activities 

Provision for impairment of jointly controlled entities 

2 

23 

Share of net profit of associates and joint ventures accounted for using the equity method 

23(d) 

67,359 

75,686 

Profit before income tax 

Income tax expense 

76,472 

76,365 

3 

- 

- 

Profit from continuing operations 

76,472 

76,365 

Profit/(loss) from discontinued operations (attributable to equity holders of the Company) 

- 

- 

Profit for the year 

Profit for the year is attributable to: 

76,472 

76,365 

Owners of Pinnacle Investment Management Group Limited 

76,472 

76,365 

Earnings per share: 

Cents 

Cents 

For profit from continuing operations attributable to owners of Pinnacle Investment Management Group Limited 

Basic earnings per share 

Diluted earnings per share 

For profit attributable to owners of Pinnacle Investment Management Group Limited 

Basic earnings per share 

Diluted earnings per share 

The above consolidated statement of profit or loss should be read in conjunction with the accompanying notes. 

5 

5 

5 

5 

39.3 

39.0 

39.3 

39.0 

40.2 

39.5 

40.2 

39.5 

57

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated statement of comprehensive income  

For the year ended 30 June 2023 

Profit for the year 

Other comprehensive income: 

Items that may be reclassified to profit or loss 

Notes 

2023 
$’000 

2022 
$’000 

76,472 

76,365 

Changes in the fair value of financial assets at fair value through other comprehensive income 

- 

- 

Total comprehensive income/(loss) for the year 

76,472 

76,365 

Total comprehensive income for the year is attributable to: 

Owners of Pinnacle Investment Management Group Limited 

Total comprehensive income for the year attributable to owners of Pinnacle Investment Management 
Group Limited arises from: 

Continuing operations 

Discontinued operations 

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes. 

76,472 

76,472 

76,365 

76,365 

76,472 

76,365 

- 

- 

76,472 

76,365 

58

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated statement of financial position  

For the year ended 30 June 2023 

Notes 

2023 
$’000 

2022 
$’000 

6 

7 

8 

13 

9 

23 

8 

13 

12 

11 

14 

12 

19 

15 

12 

19 

15 

27,616 

24,632 

38,265 

23,258 

159,594 

139,912 

- 

911 

167 

552 

212,753 

202,154 

328,465 

325,252 

3,600 

76 

1,821 

336 

5,585 

3,000 

111 

1,921 

1,584 

2,736 

339,883 

334,604 

552,636 

536,758 

6,834 

357 

20,137 

2,414 

29,742 

10,445 

1,223 

85 

2,236 

13,989 

- 

348 

100,000 

120,000 

321 

237 

100,321 

120,585 

130,063 

134,574 

422,573 

402,184 

16 

17(a) 

17(b) 

418,479 

412,066 

(43,282) 

(47,099) 

47,376 

37,217 

422,573 

402,184 

ASSETS 

Current assets 

Cash and cash equivalents 

Trade and other receivables 

Financial assets at fair value through profit or loss 

Intangible assets 

Assets held at amortised cost 

Total current assets 

Non-current assets 

Investments accounted for using the equity method 

Financial assets at fair value through profit or loss 

Property, plant and equipment 

Intangible assets 

Right-of-use assets 

Assets held at amortised cost 

Total non-current assets 

Total assets 

LIABILITIES 

Current liabilities 

Trade and other payables 

Lease liabilities 

Borrowings 

Provisions 

Total current liabilities 

Non-current liabilities 

Lease liabilities 

Borrowings 

Provisions 

Total non-current liabilities 

Total liabilities 

Net assets 

EQUITY 

Contributed equity 

Reserves 

Retained Earnings/(Losses) 

Total equity 

The above consolidated statement of financial position should be read in conjunction with the accompanying notes. 

59

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated statement of changes in equity 

For the year ended 30 June 2023 

Balance at 1 July 2021 

266,274 

(50,494) 

28,112 

243,892 

Total comprehensive income for the year 

- 

- 

76,365 

76,365 

Contributed 
equity 
$’000 

Reserves 
$’000 

Retained 
earnings 
$’000 

Notes 

Total equity 
$’000 

TRANSACTIONS WITH OWNERS IN THEIR CAPACITY AS OWNERS: 

Share-based payments 

17(a) 

- 

2,848 

Institutional placement (net of issue costs)  

Shares issued via underwritten DRP 

108,876 

31,158 

Dividends paid to shareholders 

18 

1,379 

- 

- 

2,848 

108,876 

31,158 

(67,260) 

(65,881) 

114 

4,812 

- 

- 

- 

- 

(15) 

562 

129 

16, 17(a)  4,250 

145,792 

3,395 

(67,260) 

81,927 

412,066 

(47,099) 

37,217 

402,184 

412,066 

(47,099) 

37,217 

402,184 

Performance rights 

Employee loan arrangements 

Balance at 30 June 2022 

Balance at 1 July 2022 

Total comprehensive income for the year 

- 

- 

76,472 

76,472 

TRANSACTIONS WITH OWNERS IN THEIR CAPACITY AS OWNERS: 

Share-based payments 

17(a) 

- 

3,408 

Shared issued on exercise of options  

Dividends paid to shareholders 

Performance rights 

1,572 

18 

3,234 

64 

Employee loan arrangements 

16, 17(a)  1,543 

- 

- 

(29) 

438 

- 

- 

3,408 

1,572 

(66,313) 

(63,079) 

35 

- 

1,981 

6,413 

3,817 

(66,313) 

(56,083) 

Balance at 30 June 2023 

418,479 

(43,282) 

47,376 

422,573 

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. 

60

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated statement of cash flows  

For the year ended 30 June 2023 

Cash flows from operating activities 

Receipts from customers 

Payments to suppliers and employees 

Notes 

2023 
$’000 

2022 
$’000 

40,646 

40,248 

(41,291) 

(37,608) 

Dividends and distributions received from financial assets at fair value through profit or loss 

905 

916 

Dividends and distributions received from jointly controlled entities 

66,090 

68,591 

Interest received 

Finance and borrowings costs paid 

Proceeds from disposal of financial assets at fair value through profit or loss 

Payments for financial assets at fair value through profit or loss 

551 

(6,002) 

85,568 

130 

(2,279) 

66,081 

(91,426) 

(151,005) 

Net cash inflow/(outflow) from operating activities 

25 

55,041 

(14,926) 

Cash flows from investing activities 

Payments for property, plant and equipment 

Proceeds from sale of investments accounted for using the equity method 

Payments for intangible assets 

(9) 

- 

- 

(13) 

2,907 

(2,000) 

Payments for investments accounted for using the equity method 

(4,389) 

(140,927) 

Loan repayments from employee shareholders 

Loan repayments from related parties 

Loan advances to related parties 

Net cash inflow/(outflow) from investing activities 

Cash flows from financing activities 

Dividends paid to shareholders 

Lease payments 

Proceeds from borrowings 

Proceeds from issue of shares, net of issue costs 

Net cash (outflow)/inflow from financing activities 

Net increase/(decrease) in cash and cash equivalents 

Cash and cash equivalents at the beginning of the financial year 

Cash and cash equivalents at end of year 

6 

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes. 

1,980 

734 

(1,276) 

(2,960) 

4,813 

872 

(1,375) 

(135,723) 

(63,079) 

(65,881) 

(1,223) 

- 

(1,375) 

20,000 

1,572 

140,034 

(62,730) 

92,778 

(10,649) 

(57,871) 

38,265 

27,616 

96,136 

38,265 

61

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements 

Group Results 

1 

2 

3 

4 

5 

Revenue 

Expenses 

Income tax expense 

Segment information 

Earnings per share 

Operating Assets and Liabilities 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

Cash and cash equivalents 

Trade and other receivables 

Financial assets at fair value through profit or loss 

Assets held at amortised cost 

Net deferred tax assets 

Assets held at amortised cost – non-current 

Leases 

Intangible assets 

Trade and other payables 

Provisions 

Capital and Financial Risk Management 

16 

17 

18 

19 

20 

21 

Group Structure 

22 

23 

24 

Other Notes 

25 

26 

27 

28 

29 

30 

31 

32 

Contributed equity 

Reserves and retained earnings 

Dividends 

Borrowings and financing arrangements 

Financial risk management 

Contingencies and commitments 

Subsidiaries 

Investments accounted for using the equity method 

Parent Entity financial information 

Additional cash flow information 

Related party transactions 

Key Management Personnel 

Share-based payments 

Remuneration of auditors 

Events occurring after the reporting period 

Critical accounting estimates and judgements 

Summary of significant accounting policies 

62

Annual Report     

Page 

63 

64 

64 

65 

66 

67 

67 

68 

68 

69 

69 

70 

71 

72 

72 

73 

75 

76 

77 

78 

85 

86 

87 

90 

91 

92 

94 

95 

103 

103 

104 

105 

 
 
 
 
 
 
 
 
 
Group Results 

This section provides information regarding the results and performance of the group during the year, including further 
detail regarding revenue and expenses, income tax, segment reporting and earnings per share. 

1.  Revenue from contracts with customers and other income 

a)  Disaggregation of revenue from contracts with customers and other income 

The Group derives its revenue from contracts with customers from the transfer of services over time. A disaggregation of 
the Group’s revenue is shown below. 

Revenue from contracts with customers 

Service charges – over time 

Other income 

Interest received or due 

Dividends and distributions 

Other income 

Total revenue and other income 

Dividends and distributions are received from financial assets held at fair value through profit or loss. 

2023 
$’000 

38,650 

38,650 

727 

6,136 

- 

6,863 

45,513 

2022 
$’000 

41,771 

41,771 

126 

3,923 

177 

4,226 

45,997 

63

Annual Report     

 
 
 
 
 
 
 
2.  Expenses 

PROFIT BEFORE INCOME TAX INCLUDES THE FOLLOWING SPECIFIC EXPENSES: 

Finance cost expense – included in other expenses from operating activities 

Interest and finance charges 

Total finance cost expense 

Lease amortisation expense – included in property costs 

Depreciation and amortisation expense – included in other expenses from operating activities 

Depreciation – property, plant and equipment 

Amortization - intangible assets 

Total depreciation and amortisation expense 

3.  Income tax expense 

a)  Income tax expense/(benefit) 

Income tax expenses is attributable to: 

Continuing operations 

Discontinued operations 

Total income tax expense/(benefit) 

Current tax 

Deferred tax 

Adjustments for tax in respect of prior periods 

Total current tax expense 

Deferred income tax expense/(benefit) included in income tax expense/(benefit) comprises: 

(Increase)/decrease in deferred tax assets 

Increase in deferred tax liabilities 

Total deferred tax expense/(benefit) 

2023 
$’000 

6,064 

6,064 

1,247 

43 

267 

310 

2022 
$’000 

2,382 

2,382 

1,330 

55 

937 

992 

2023 
$’000 

2022 
$’000 

- 

- 

- 

- 

- 

- 

1,637 

5,379 

(1,637) 

(5,379) 

- 

- 

1,637 

- 

1,637 

- 

- 

5,379 

- 

5,379 

b)  Numerical reconciliation of income tax expense to prima facie tax payable 

Profit from continuing operations before income tax expense 

76,472 

76,365 

Profit /(Loss) from discontinued operations before income tax expense 

Profit before income tax 

Tax at the Australian tax rate of 30% (2022: 30%) 

- 

76,472 

22,942 

- 

76,365 

22,910 

64

Annual Report     

 
 
 
 
 
 
 
Tax effect of amounts which are not deductible (taxable) in calculating taxable income: 

Share of profits of entities under joint control 

(20,208) 

(22,163) 

Impairment 

Non-deductible expenditure 

Sundry items 

Adjustments for current tax in respect of prior periods 

Deferred tax assets not recognised 

Total income tax expense/(benefit) 

c)  Tax losses not recognised 

- 

1,092 

2,995 

6,821 

- 

- 

928 

2,659 

4,334 

- 

(6,821) 

(4,334) 

- 

- 

Unused tax losses for which no deferred tax asset has been recognised 

Potential tax benefit at 30% 

19,978 

5,993 

25,076 

7,523 

A deferred tax asset in relation to tax losses is regarded as recoverable and therefore recognised only when, on the basis of 
all available evidence, it can be regarded as probable that there will be suitable taxable profits against which to recover the 
losses and from which the future reversal of underlying timing differences can be deducted. Deferred tax assets have not 
been recognised in full on the basis that there remains uncertainty regarding the timing and quantum of the generation of 
taxable profits. 

d)  Tax consolidation legislation 

Pinnacle Investment Management Group Limited and its wholly-owned Australian controlled entities implemented the tax 
consolidation legislation from 1 July 2003. Next Financial Holding Company Pty Ltd (see note 22) and its subsidiaries joined 
the tax consolidated group on 1 April 2009. Pinnacle Investment Management Limited and its subsidiaries joined the tax 
consolidated Group on 25 August 2016. The accounting policy in relation to this legislation is set out in note 32(f) and 
further information is provided at Note 32(z). 

4.  Segment information 

The Group operates one business segment being the funds management operations of Pinnacle. The business is principally 
conducted in one geographic location, being Australia. 

65

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
5.  Earnings per share 

a)  Basic earnings per share 

From continuing operations 

2023 
Cents 

39.3 

Total basic earnings per share attributable to the ordinary equity shareholders of the Company 

39.3 

b)  Diluted earnings per share 

Attributable to the ordinary equity shareholders of the Company 

From continuing operations 

39.0 

Total diluted earnings per share attributable to the ordinary equity shareholders of the Company 

39.0 

c)  Reconciliations of earnings used in calculating earnings per share 

Basic and diluted earnings per share 

2022 
Cents 

40.2 

40.2 

39.5 

39.5 

Profit/(loss) attributable to the ordinary owners of the Company used in calculating basic and diluted earnings per share: 

From continuing operations 

Profit used in calculating basic and diluted earnings per share 

76,472 

76,472 

76,365 

76,365 

d)  Reconciliations of earnings used in calculating earnings per share 

Weighted average number of ordinary shares used as the denominator in calculating basic earnings 
per share 

194,353,235 

189,938,458 

Adjustments for calculation of diluted earnings per share: 

Weighted average treasury stock (see note 16(d)) 

1,402,386 

2,709,553 

Weighted average options 

340,502 

596,702 

Weighted average number of ordinary and potential ordinary shares used as the denominator in 
calculating diluted earnings per share 

196,096,123 

193,244,713 

e) 

Information concerning the classification of securities 

Options and loan shares granted to employees under the employee share schemes are considered to be potential ordinary 
shares and have been included in the determination of diluted earnings per share to the extent to which they are dilutive. 
The options and loan shares have not been included in the determination of basic earnings per share. 

66

Annual Report     

 
 
 
 
 
 
 
 
 
 
Operating assets and liabilities 

This section provides information regarding the assets and liabilities of the entity and includes more detailed breakdowns 
of individual balance sheet items. 

6.  Cash and cash equivalents 

Available cash at bank and on hand 

2023 
$’000 

27,616 

27,616 

2022 
$’000 

38,265 

38,265 

a)  Risk exposure 

The Group's exposure to interest rate risk is discussed in note 20. The maximum exposure to credit risk at the end of each 
reporting period is the carrying amount of each class of cash and cash equivalents mentioned above. 

b) 

Fixed term and at call deposits 

Fixed-term and at-call deposits bear floating interest rates between 0.25% and 5.21% (2022: 0.01% and 0.25%). At-call 
deposits have an average maturity of 30 days. Fixed-term deposits have a maturity ranging from 90 days to 1 year. 

7.  Trade and other receivables 

Trade receivables 

Income receivables 

Other receivables 

Prepayments 

2023 
$’000 

6,276 

2022 
$’000 

7,347 

14,422 

12,516 

3,043 

891 

2,657 

738 

24,632 

23,258 

a)  Fair values of trade and other receivables 

Due to the short-term nature of the current receivables, their carrying amount is considered to be the same as their fair 
value. 

b)  Impairment and risk exposure 

Information about the impairment of trade and other receivables and the Group's exposure to credit risk, foreign currency 
risk and interest rate risk can be found in note 20(a) and 20(b). 

67

Annual Report     

 
 
 
 
 
 
 
 
 
 
8. 

Financial assets at fair value through profit or loss 

Current 

Australian listed equity securities 

Unlisted unit trusts* 

Derivative financial assets 

Other unlisted instruments 

*see note 20 for further details 

Non-current 

Unlisted equity securities 

2023 
$’000 

14,884 

2022 
$’000 

7,430 

120,818 

126,749 

3,716 

20,176 

5,151 

582 

159,594 

139,912 

2023 
$’000 

3,600 

3,600 

2022 
$’000 

3,000 

3,000 

Risk exposure and fair value measurements 

Information about the Group's exposure to price risk and the methods and assumptions used in determining fair value is 
provided in note 20(d). See also note 26. 

9.  Assets held at amortised cost 

Loans to entities under joint control 

2023 
$’000 

911 

911 

2022 
$’000 

552 

552 

Loans to entities under joint control includes any adjustments for accumulated equity accounted losses where the 
associated equity investment value is less than zero as a result of accumulated losses being greater than the carrying value 
of the investment. 

68

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10.  Net deferred tax assets 

Deferred tax assets (a) 

Deferred tax liabilities (b) 

Net deferred tax assets 

a)  Deferred tax assets 

The deferred tax asset balance comprises temporary differences attributable to: 

Unrealised loss on fair value assets 

Lease liabilities 

Other 

Total deferred tax assets 

Set-off of deferred tax liabilities pursuant to set-off provisions 

Net deferred tax assets 

2023 
$’000 

2,618 

(2,618) 

- 

- 

- 

2,478 

2,478 

(2,478) 

- 

2022 
$’000 

579 

(579) 

- 

54 

475 

50 

579 

(579) 

- 

A deferred tax asset in relation to tax losses is regarded as recoverable and therefore recognised only when, on the basis of 
all available evidence, it can be regarded as probable that there will be suitable taxable income against which to recover 
the losses and from which the future reversal of underlying timing differences can be deducted. The deferred tax assets of 
the consolidated entity are currently not recognised under these criteria - refer note 3(c). 

b)  Deferred tax liabilities 

The deferred tax liabilities balance comprises temporary differences attributable to: 

Financial assets at fair value through profit or loss 

1,603 

579 

2023 
$’000 

2022 
$’000 

Intangible assets 

Right-of-use assets 

Receivables 

726 

101 

48 

- 

- 

- 

Total deferred tax liabilities 

2,478 

579 

11. 

Assets held at amortised cost – non-current 

Loans to entities under joint control 

Note 

26 

2023 
$’000 

5,585 

5,585 

2022 
$’000 

2,736 

2,736 

As outlined in note 32(l)(ii) loans to entities under joint control (including affiliate executives) are assessed at least annually 
for possible indicators of impairment. Where indicators of impairment exist, the recoverability of these loans is 
determined. If the carrying amount exceeds the recoverable amount an impairment expense is recorded. See note 26. 

69

Annual Report     

 
 
 
 
 
 
 
 
12.  Leases 

The Group leases offices in Brisbane and Sydney. Rental contracts are typically made for fixed periods of 3 – 5 years. See 
note 32(g) for further details. The Group moved to new premises in Sydney on 2 July 2023, with a new lease commencing 
on that date. 

The balance sheet shows the following amounts relating to leases: 

RIGHT-OF-USE ASSETS 

30 June 2023 
$'000 

30 June 2022 
$'000 

Office leases                                                                                                                            

4,249 

4,249 

Office leases – accumulated amortization 

Additions to the right-of-use assets during the 2023 financial year were $nil (2022: $nil) 

LEASE LIABILITIES 

Current 

Non-current 

The statement of profit or loss shows the following amounts relating to leases: 

DEPRECIATION CHARGE OF RIGHT-OF-USE ASSETS (INCLUDED IN PROPERTY EXPENSES) 

Office leases                                                                                                                            

Interest expense (included in other expenses from operating activities) 

(3,913) 

(2,665) 

336 

1,584 

357 

- 

357 

1,247 

1,247 

10 

1,223 

348 

1,571 

1,330 

1,330 

40 

70

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
13.  Intangible assets 

Software 
$'000 

Customer Contracts 
$'000 

Total 
$'000 

15 

(15) 

- 

- 

- 

- 

- 

15 

(15) 

- 

- 

- 

- 

- 

15 

(15) 

- 

2,574 

2,589 

(1,549) 

(1,564) 

1,025 

1,025 

1,025 

2,000 

(937) 

2,088 

1,025 

2,000 

(937) 

2,088 

4,574 

4,589 

(2,486) 

(2,501) 

2,088 

2,088 

2,088 

- 

(267) 

1,821 

2,088 

- 

(267) 

1,821 

4,574 

4,589 

(2,753) 

(2,768) 

1,821 

1,821 

AT 1 JULY 2021 

Cost 

Accumulated amortisation 

Net book value 

YEAR ENDED 30 JUNE 2022 

Opening net book value 

Additions 

Amortisation charge 

Closing net book value 

AT 30 JUNE 2022 

Cost 

Accumulated amortisation 

Net book value 

YEAR ENDED 30 JUNE 2023 

Opening net book value 

Additions 

Amortisation charge 

Closing net book value 

AT 30 JUNE 2023 

Cost 

Accumulated amortisation 

Net book value 

71

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
14.  Trade and other payables 

Trade payables 

Accrued expenses 

Accrued bonuses 

Other payables 

15.  Provisions 

Current 

Employee benefits - annual leave and long service leave 

Non-Current 

Employee benefits - long service leave 

a)  Movements in provisions 

Movements in each class of provision during the financial year, are set out below: 

Current 

BALANCE AT 1 JULY 2022 

Amounts provided for during the year 

Balance at 30 June 2023 

Non-Current 

BALANCE AT 1 JULY 2022 
- 

Amounts provided for during the year 
- 

Balance at 30 June 2023 

72

Annual Report     

2023 
$’000 

1,008 

723 

4,569 

534 

6,834 

2023 
$’000 

2,414 

2,414 

321 

321 

- 

2022 
$’000 

2,115 

1,017 

6,675 

638 

10,445 

2022 
$’000 

2,236 

2,236 

237 

237 

Employee Benefits 
$'000 

2,236 

178 

2,414 

237 

84 

321 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
16.  Contributed equity 

a)  Share capital 

Ordinary shares: 

2023 
Shares 

2022 
Shares 

2023 
$'000 

Fully paid contributed equity (b)      

194,601,091 

193,860,297 

418,479 

Total contributed equity 

194,601,091 

193,860,297 

418,479 

2022 
$'000 

412,066 

412,066 

b)  Movements in ordinary share capital 

Date 

Details 

Number of shares 

Issue price 

$'000 

1 July 2021 

Opening balance 

178,467,333 

266,274 

Share purchase plan, net of costs 

420,436 

$16.14 

6,720 

Share placement, net of costs 

6,287,426 

$16.70 

102,156 

Issue of ordinary shares via underwritten DRP, net of costs 

1,884,272 

$16.82 

31,158 

Issue of ordinary shares on exercise of performance rights 

19,497 

Transfer from performance rights reserve on exercise of 
performance rights 

- 

- 

- 

- 

129 

Dividend reinvestment 

Treasury stock vested (d) 

30 June 2022 

Closing Balance 

114,661 

$12.03 

1,379 

6,666,672 

193,860,297 

4,250 

412,066 

Issue of ordinary shares on exercise of options 

400,000 

$3.93 

1,572 

Issue of ordinary shares on exercise of performance rights 

Transfer from performance rights reserve on exercise of 
performance rights 

Dividend reinvestment 

Treasury stock vested (d) 

30 June 2023 

Closing Balance 

c)  Ordinary shares 

3,516 

- 

- 

- 

- 

64 

337,278 

$9.59 

3,234 

- 

194,601,091 

1,543 

418,479 

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. 

Ordinary shares have no par value and the Company does not have a limited amount of authorised capital. 

73

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
d)  Treasury stock 

Treasury stock are shares in Pinnacle Investment Management Group Limited that are subject to share mortgage under 
employee loans used for the purposes of acquiring interests in the Company. The value ascribed to treasury stock is the 
value of the loans secured by share mortgage at period end. 

Treasury stock movement for the year includes the issue of 1,017,000 and the forfeiture of 150,000 loan shares to 
employees, issued under the Pinnacle Omnibus Plan approved by the board on 22 August 2018.  

Date 

Details 

1 July 2021 

Opening balance 

Number of treasury 
shares 

$'000 

12,116,672 

34,400 

Issue of loan shares under Pinnacle Omnibus Plan 

700,000 

11,776 

Forfeited loan shares 

(450,000) 

(2,473) 

Treasury stock vested during the year 

(6,666,672) 

(4,250) 

30 June 2022 

Closing Balance 

5,700,000 

39,453 

Issue of loan shares under Pinnacle Omnibus Plan 

1,017,000 

8,792 

Forfeited loan shares 

(150,000) 

(1,285) 

Treasury stock vested during the year 

- 

(1,543) 

30 June 2023 

Closing Balance 

6,567,000 

45,417 

e)  Employee share plans 

Information relating to the Pinnacle Investment Management Group Employee Option Share Plan and Pinnacle Omnibus 
Plan, including details of options issued, exercised and lapsed during the financial year and options outstanding at the end 
of the financial year, is set out in note 28. 

f)  Capital risk management 

The Group's objective when managing capital is to safeguard its ability to continue as a going concern, so it can continue to 
provide returns for shareholders, benefits for other stakeholders and to maintain an optimal capital structure to reduce 
the cost of capital. 

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, 
return capital to shareholders, issue new shares or sell assets. 

The Group monitors capital on the basis of both Group liquidity and capital and liquidity ratios required under various 
licenses held by subsidiaries. 

There have been no reportable instances of non-compliance with externally imposed capital requirements in the current 
period. 

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Annual Report     

 
 
 
 
 
 
 
 
 
 
 
17.  Reserves and retained earnings 

a)  Reserves 

Share-based payments reserve 

2023 
$'000 

16,321 

2022 
$'000 

12,476 

Transactions with non-controlling interests reserve 

(59,603) 

(59,603) 

Performance rights reserve 

MOVEMENTS: 

Share-based payments reserve 

Balance at 1 July 

Share-based payments expense 

Employee loans subject to share-based payments arrangements 

- 

28 

(43,282) 

(47,099) 

12,476 

3,408 

437 

9,065 

2,848 

563 

Balance at 30 June 

16,321 

12,476 

Transactions with non-controlling interests reserve 

Balance at 1 July 

Balance at 30 June  

The share-based payments reserve is used to recognise: 

(59,603) 

(59,603) 

(59,603) 

(59,603) 

 

 

 

 

the grant date fair value of options issued to employees but not exercised; 

the grant date fair value of shares issued to employees; 

the issue of shares held by employee share plans to employees; and 

the grant date fair value of reissued loans under the Pinnacle Long-term Employee Incentive Plan 
and Pinnacle Omnibus Incentive Plan approved by the board on 22 August 2018. 

The transactions with non-controlling interests reserve is used to recognise the excess of the consideration paid to acquire 
non-controlling interests above the carrying value of the non-controlling interest at time of acquisition. 

The options reserve is used to recognise the value of zero-priced options issued by Pinnacle associated with investments in 
entities under joint control (see note 23). 

b)  Retained earnings 

Movements in retained earnings were as follows: 

Balance at 1 July 

2023 
$'000 

2022 
$'000 

37,217 

28,112 

Profit/(loss) for the year attributable to owners of Pinnacle Investment Management Group Limited 

76,472 

76,365 

Dividends paid to shareholders  

Balance at 30 June 

(66,313) 

(67,260) 

47,376 

37,217 

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Annual Report     

 
 
 
 
 
 
 
 
 
18.  Dividends 

a)  Ordinary shares 

2023 
$'000 

2022 
$'000 

Interim dividend for the year ended 30 June 2023 of 15.6 cents per fully paid ordinary share paid on 17 March 2023 (2022 – 17.5 cents paid on 18 
March 2022) 

Fully franked based on tax paid @ 30% 

31,389 

34,910 

Final dividend for the year ended 30 June 2022 of 17.5 cents per fully paid ordinary share paid on 16 September 2022 (2021 – 17.5 cents paid on 17 
September 2021) 

Fully franked based on tax paid @ 30% 

Total dividends paid 

34,924 

32,350 

66,313 

67,260 

b)  Dividends not recognised at the end of the reporting period 

In addition to the above dividends, since year end the directors have recommended the payment of a final dividend of 20.4 
cents per fully paid ordinary share (2022 – 17.5 cents). The aggregate amount of the proposed dividend to be paid on 15 
September 2023 out of retained earnings at 30 June 2023, but not recognised as a liability at year end, is $41,038,000 
(2022 – $34,924,000). 

c)  Franked dividends 

The final dividends recommended after 30 June 2023 will be fully franked out of existing franking credits. 

Franking credits available for subsequent financial years based on a tax rate of 30% (2022: 30%) 

19,582 

23,943 

2023 
$'000 

2022 
$'000 

The above amounts represent the balance of the franking account as at the end of the reporting period, adjusted for: 

a)  franking credits that will arise from the payment of the amount of the provision for income tax; 

b)  franking debits that will arise from the payment of dividends recognised as a liability at the reporting date; and 

c)  franking credits that will arise from the receipt of dividends recognised as receivables at the end of each reporting 

date. 

The consolidated amounts include franking credits that would be available to the Company if distributable profits of 
subsidiaries were paid as dividends. 

76

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
19.  Borrowings and Financing arrangements 

a)  Secured liabilities and assets pledged as security 

In June 2023, the Group entered into an amended facility deed, which is secured by a general security deed over the assets 
of the Group and guarantees provided by the Company and other Group entities. The availability periods for the Corporate 
Card Facility and Bank Guarantee are until 30 June 2024, for the Loan Facility (Tranche A and B) until 30 June 2025 and 
Tranche C until 15 September 2023. The Loan Facility remained unchanged at $120 million during the year. Further details 
regarding the Corporate Card Facility and Bank Guarantee are provided in Note 21. 

Secured 

Bank Loan 

2023 

Current 
$’000 

Non-Current 
$’000 

Total 
$’000 

20,137 

100,000 

120,137 

Total Borrowings 

20,137 

100,000 

120,137 

The amended facility agreement includes the following covenants: 

2022 

Current 
$’000 

85 

85 

Non-Current 
$’000 

Total 
$’000 

120,000 

120,085 

120,000 

120,085 

 

 

 

 

 

The interest cover ratio must be at least 4.0 times 

The net leverage cover ratio is no more than 2.0 times 

The minimum tangible net wealth in respect of any financial year must be at least the greater of:  

$130 million; and  

an amount equal to 75% of the tangible net wealth in respect of the previous financial year.  

The Group has provided the bank with a security interest over its property, excluding its holdings in Affiliates. Compliance 
with covenants is reviewed on a regular basis and compliance has been maintained during the period. As at 30 June 2023, 
the interest cover ratio was 14 times, the net leverage cover ratio was 1.12 times and the tangible net wealth was $420 
million (105% of the tangible net wealth at 30 June 2022). 

The Loan Facility is split into three Tranches – ‘Tranche A’ is $60 million and is for general corporate purposes. ‘Tranche B’ 
is $40 million and is for acquisitions, or investments into certain liquid investment strategies managed by the Pinnacle 
Affiliates. ‘Tranche C’ is $20 million and for investments into certain investment strategies managed by a specific Pinnacle 
Affiliate. The Loan Facility was fully drawn as at 30 June 2023. At 30 June 2023, $20 million of the facility was provided as 
seed capital to Palisade Real Assets to enable them to acquire the first asset in their energy transition portfolio, with the 
balance of the facility invested predominantly in non-duration and floating rate credit strategies, managed by Affiliates. 
The loan is a variable rate, Australian-dollar denominated loan, which is carried at amortised cost. The facility term is three 
years from drawdown. 

The carrying amounts of assets pledged as security at balance date in relation to the bank guarantees are set out below: 

Current 

Cash and cash equivalents 

Financial assets at fair value through profit or loss 

Assets held at amortised cost 

Receivables 

Total current assets pledged as security 

Non-current 

Plant and equipment 

Financial assets at fair value through profit or loss 

Assets held at amortised cost 

Total non-current assets pledged as security 

Total assets pledged as security 

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Annual Report     

2023 
$'000 

27,616 

159,594 

911 

24,632 

212,753 

76 

3,600 

5,585 

9,261 

2022 
$'000 

38,265 

139,912 

552 

23,258 

201,987 

111 

3,000 

2,736 

5,847 

222,014 

207,834 

 
 
 
b)  Interest rate risk exposure 

Information about the Group's exposure to interest rate changes are provided in note 20. 

20.  Financial risk management 

The Group's activities expose it to a variety of financial risks: market risk (including interest rate risk, foreign currency risk 
and price risk), credit risk and liquidity risk. A core focus of the Group's overall risk management program is on the volatility 
of the financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. 

Risk governance is managed through the Board’s Audit, Compliance and Risk Management Committee, which provides 
direct oversight of the Group's Risk Management Framework and performance. The Board approves written principles for 
risk management covering areas such as Principal Investments, including the use of appropriate hedging strategies, and 
cash flow management. Financial support to Affiliates or Affiliate executives is subject to Board approval, following 
consideration of the strategic merits of providing support and the financial standing of the counterparty. The management 
of risk throughout the Group is achieved through the procedures, policies, people competencies and risk monitoring 
functions that form part of the overall Group Risk Management Framework. This is achieved through regular updates in the 
form of targeted risk management analysis and reporting functions that provide an assessment of the Group's risk 
exposure levels and performance to benchmarks/tolerance limits. 

The Group holds the following financial instruments: 

Financial assets 

Cash and cash equivalents 

Trade and other receivables* 

2023 
$'000 

2022 
$'000 

27,616 

38,265 

23,741 

22,520 

Financial assets at fair value through profit or loss (current) 

159,594 

139,912 

3,600 

911 

5,585 

3,000 

552 

2,736 

221,047 

206,985 

2023  
$'000 

2022  
$'000 

6,834 

10,445 

357 

- 

20,137 

1,223 

348 

85 

100,000 

120,000 

127,328 

132,101 

Financial assets at fair value through profit or loss (non-current) 

Loans to jointly controlled associates (including Affiliate executives) (current) 

Loans to jointly controlled associates (including Affiliate executives) (non-current) 

*Excludes prepayments (see note 7) 

Financial liabilities 

Trade and other payables 

Lease liabilities (current) 

Lease liabilities (non-current) 

Borrowings (current) 

Borrowings (non-current) 

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Annual Report     

 
 
 
 
 
 
 
 
 
 
a)  Market risk 

(i)  Foreign exchange risk 

The Group is not materially exposed to foreign exchange risk. All of its major contracts with counterparties are 
denominated and settled in Australian dollars, which is the reporting and operating currency of the Group. Substantially all 
of the Group’s Principal Investments are also quoted and priced in Australian Dollars. 

(ii)  Price risk 

Through its business transactions and investments, the Group is exposed to equity securities price risk. This risk is the 
potential for losses in Group earnings as a result of adverse market movements and arises from investments held by the 
Group that are classified on the consolidated statement of financial position as financial assets at fair value through profit 
or loss (FVPL).  

The Group manages the price impact of market risk through an established Risk Management Framework. This includes the 
procedures, policies and functions undertaken by the business to manage market risk within tolerances set by the Board. 
Equity derivatives are used as an active risk mitigation function and the Group currently utilises such derivatives to reduce 
the market risk of its equity exposures. The performance of the Group’s direct equity exposures and market risk mitigants 
are monitored on a regular basis. 

The majority of the Group's equity investments are Australian listed equity securities and unlisted unit trusts as shown in 
the table below: 

30 June 2023 

ASSETS 

Australian listed equity securities 

Other unlisted instruments 

Unlisted unit trusts 

Derivative financial instruments 

Total assets at FVPL 

30 June 2022 

ASSETS 

Australian listed equity securities 

Other unlisted equity securities 

Unlisted unit trusts 

Derivative financial instruments 

Total assets at FVPL 

Sensitivity 

Total 
$'000 

14,884 

4,005 

120,818 

3,716 

143,423 

7,430 

3,582 

126,749 

5,151 

142,912 

The table below summarises the impact of increases/decreases in equity securities prices on the Group’s after tax profit for 
the year and on equity. The analysis is based on the assumption that equity securities prices had increased/decreased by 
+/- 15% (2022: +/- 15%) at 30 June 2023 with all other variables held constant and all the Group’s equity investments 
included in financial assets at fair value through profit and loss moved in correlation with the index. 

79

Annual Report     

 
 
 
Impact on after-tax profit 

Impact on equity 

2023  
$'000 

2022  
$'000 

2023  
$'000 

2022  
$'000 

Group 

+5,584/-5,584  +2,691/-2,691 

+5,584/-5,584 

+2,691/-2,691 

(iii) Interest rate risk 

The Group's main interest rate risk arises from holding cash and cash equivalents and borrowings with variable rates. 
During 2023 and 2022, substantially all of the Group’s cash and cash equivalents were denominated in Australian dollars. 
The Group’s borrowings were also denominated in Australian dollars. The Group reviews its interest rate exposure as part 
of the Group’s cash flow management and takes into consideration the yields, duration and alternative financing options 
as part of the renewal of existing positions. As at the reporting date, the Group had the following cash and cash 
equivalents and borrowings: 

30 June 2023 

30 June 2022 

Weighted  
average  
interest rate  
% 

Floating 
interest rate  
$'000 

Weighted  
average  
interest rate  
% 

Floating 
interest rate 
$'000 

Cash and cash equivalents 

3.86% 

27,616 

0.25% 

38,265 

Exposure to cash flow interest rate risk 

27,616 

38,265 

30 June 2023 

30 June 2022 

$’000 

% of total 
borrowings 

$’000 

% of total 
borrowings 

Variable rate borrowings 

120,000 

100% 

120,000 

100% 

Exposure to cash flow interest rate risk 

100% 

100% 

The Group's loans to jointly controlled associates (including Affiliate executives) are subject to fixed interest rates and 
carried at amortised cost. They are therefore not subject to interest rate risk as defined by AASB 7. 

Sensitivity 

At 30 June 2023, if interest rates had changed by -/+200 basis points from the year end rates with all other variables held 
constant, after tax profit and equity for the year would have been $1,293,000 lower/higher (2022: change of 100 basis 
points: $1,144,000 lower/higher). 

b)  Credit risk 

Credit risk arises from cash and cash equivalents, financial assets at fair value through profit or loss, loans to entities under 
joint control, loans to shareholders and outstanding receivables. 

Credit risk is managed on a Group basis. Credit risk relates to the risk of a client or counterparty defaulting on their 
financial obligations resulting in a loss to the Group. These obligations primarily relate to distribution and management 
fees. The Group does not carry significant trade receivable exposure to either a single counterparty or a group of 
counterparties. For banks and financial institutions, only independently rated parties with a minimum rating of BBB+ / A-1 
are accepted as counterparties. Loans to Affiliates or Affiliate executives are subject to Board approval, following 
consideration of the strategic merits of providing support and the financial standing of the counterparty. Additionally, 
loans to individuals to purchase shares are structured in such a way that they are either full recourse or secured on the 
shares issued.  As at the reporting date, the Group held the following credit risks: 

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Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents 

Trade and other receivables* 

Financial assets at fair value through profit or loss (current) 

Loans to jointly controlled associates (including Affiliate executives) (non-current) 

Loans to jointly controlled associates (including Affiliate executives) (current) 

*Excludes prepayments (see note 7). 

2023  
$'000 

27,616 

23,741 

19,771 

5,585 

911 

2022  
$'000 

38,265 

22,520 

- 

2,736 

552 

77,624 

64,073 

Impaired trade, other and loan receivables 

The Group has the following types of financial assets that are subject to the expected credit loss model:  

 

 

Trade and other receivables 

Loans to jointly controlled associates (including affiliate executives) 

While cash and cash equivalents and financial assets at fair value through profit or loss are also subject to the impairment 
requirements of AASB 9, the identified impairment loss was nil (2022: nil).  

Loans to jointly controlled associates (including Affiliate executives) 

All loans to jointly controlled associates are considered low credit risk, have had no significant increase in credit risk during 
the year, and as such the loss allowance was limited to 12 months' expected credit losses. Loans to joint associates are 
considered to be low credit risk when they have a low risk of default and the borrower has a strong capacity to meet its 
contractual cash flow obligations in the near term. New loans provided to joint associates are only provided once the 
underlying prospects of the entity have been fully evaluated and are within our risk appetite. Additionally, loans to 
individuals to purchase shares are structured in such a way that they are either full recourse or secured on the shares 
issued. As such, at 30 June 2023 and 30 June 2022, the expected credit loss rate in relation to loans to joint associates was 
0% and the loss allowance was $nil.  

Refer to note 32(l) for more information on the investments and other financial assets policy of the Group. 

Financial assets at fair value through profit or loss 

Financial assets at fair value through profit or loss are considered to be low credit risk when the borrower has a strong 
capacity to meet its contractual cash flow obligations over the term. New funding provided to affiliates is only provided 
once the underlying prospects of the entity have been fully evaluated and are within our risk appetite. 

Trade and other receivables 

The group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss 
allowance for all trade receivables. The expected loss rate and loss allowance has been assessed as $nil as at 30 June 2023 
(30 June 2022: $nil). This is because there is no history of default, revenue is generated primarily through providing 
services to jointly controlled entities and cost recharges are also primarily to jointly controlled entities, hence the 
recoverability of receivables can be determined with a high degree of certainty on a forward-looking basis. Refer to note 
32(k) for more information on the trade receivables policy of the Group. 

The Group records trade receivables and loans in the following classifications: 

Neither past due nor impaired trade receivables and loans are those that are within their relevant contractual payment 
terms and thus have no expected credit loss due to the reasons above. 

Past due but not impaired trade receivables and loans are those that have fallen outside of their contractual settlement 
terms.  

81

Annual Report     

 
 
 
Past due and impaired trade receivables and loans are those that have fallen outside of the prescribed settlement terms 
and/or there is evidence to suggest that the client or counterparty will fail to meet their obligations and thus would result 
in an expected credit loss. This is $nil as at 30 June 2023 (2022 - $nil).  

Trade and other receivables 

Neither past due nor impaired 

Past due but not impaired 

Loans held at amortised cost 

Neither past due nor impaired 

Total trade, other and loan receivables 

Credit quality 

2023  
$'000 

2022  
$'000 

23,232 

22,520 

509 

- 

23,741 

22,520 

6,495 

6,495 

3,288 

3,288 

The credit quality of financial assets can be assessed by reference to credit ratings. These credit ratings are only available 
for cash assets: 

Cash at bank and short-term bank deposits 

AA- 

c)  Liquidity risk 

2023  
$'000 

2022  
$'000 

27,616 

38,265 

27,616 

38,265 

The Group manages liquidity risk by continuously monitoring actual and forecast cash flows. Due to the dynamic nature of 
the underlying businesses, the Group aims at maintaining flexibility in funding through available cash and readily 
liquefiable investments in the Group’s Principal Investments portfolio. At 30 June 2023 the Group has $187 million in 
available cash and Principal Investments ($67 million net of the $120 million debt facility). 

Subsidiaries of the Company, Pinnacle Funds Services Limited, Pinnacle Investment Management Limited and Pinnacle RE 
Services Limited hold Australian Financial Services Licences and hold amounts in liquid assets in accordance with relevant 
ASIC regulations on the basis of expected cash flows. In addition, the Group’s liquidity management policy involves 
projecting cash flows and considering the level of liquid assets necessary to meet these, monitoring liquidity ratios against 
internal and external regulatory requirements and maintaining debt financing plans. 

Maturities of financial liabilities 

The table below analyses the Group's financial liabilities. The financial liabilities are broken down into maturity groupings 
based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table 
are the contractual undiscounted cash flows. 

CONTRACTUAL MATURITIES OF FINANCIAL 
LIABILITIES 

1 - 30 days 

30 days to 90 
days 

90 days to 
1 year 

At 30 June 2023 

$'000 

$'000 

$'000 

Trade and other payables 

2,265 

4,569 

- 

Borrowings (see note 19) 

Lease liabilities (see note 12) 

- 

32 

20,029 

65 

Total financial liabilities 

2,297 

24,663 

108 

260 

368 

1 to 2 
years 

$'000 

Total 
contractual 
cash flows 

Carrying 
amount 

2 to 5 years 

$'000 

$'000 

$'000 

- 

- 

- 

- 

- 

6,834 

6,834 

100,000 

120,137 

120,137 

- 

357 

357 

100,000 

127,328 

127,328 

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Annual Report     

 
 
 
 
 
 
 
 
 
 
 
At 30 June 2022 

$'000 

$'000 

$'000 

$'000 

$'000 

$'000 

$'000 

Trade and other payables 

3,770 

6,675 

Borrowings (see note 19) 

- 

- 

Lease liabilities (see note 12) 

115 

232 

Total financial liabilities 

3,885 

6,907 

- 

85 

875 

960 

- 

- 

10,445 

10,445 

20,000 

100,000 

120,085 

120,085 

357 

- 

1,579 

1,571 

20,357 

100,000 

132,109 

132,101 

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) 

c) 

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 

inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3). 

The following table presents the Group's Principal Investments measured and recognised at fair value: 

Level 1 
$'000 

Level 2 
$'000 

Level 3 
$'000 

Total 
$'000 

30 June 2023 

ASSETS 

Australian listed equity securities 

14,884 

- 

- 

Other unlisted instruments 

Unlisted unit trusts 

- 

- 

Derivative financial instruments 

3,716 

- 

19,771 

4,005 

120,818 

- 

- 

14,884 

23,776 

120,818 

3,716 

Total assets 

18,600 

140,589 

4,005 

163,194 

No liabilities were held at fair value at 30 June 2023. 

30 June 2022 

ASSETS 

Australian listed equity securities 

Other unlisted equity securities 

Unlisted unit trusts 

7,430 

- 

- 

- 

- 

126,749 

Derivative financial instruments 

5,151 

- 

- 

3,582 

- 

- 

7,430 

3,582 

126,749 

5,151 

Total assets 

12,581 

126,749 

3,582 

142,912 

No liabilities were held at fair value at 30 June 2022. 

There were no transfers between levels for recurring fair value measurements during the current year. The Group's policy 
is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.  

83

Annual Report     

 
 
 
 
The fair value of Australian listed securities and exchange traded futures is based on quoted market prices at the end of 
the reporting period. The quoted price used for Australian listed securities and exchange traded options held by the Group 
is the current bid price. These instruments are included in level 1. 

The quoted market price used for unlisted unit trusts is the current exit unit price. These instruments are included in level 
2. The fair value of unlisted debt instruments (see note 26(d)(iii)) is based on observable and quoted returns third party 
investors would expect to earn for similar assets in markets. These instruments are included in level 2. 

The fair value of unlisted equity securities is determined using valuation techniques. The Group uses a variety of methods 
and makes assumptions that are based on market conditions existing at the end of each reporting period. In the 
circumstances where a valuation technique for these instruments is based on significant unobservable inputs, such 
instruments are included in level 3. 

The carrying amounts of cash and cash equivalents and trade receivables and payables are assumed to approximate their 
fair values due to their short-term nature. Loans to entities under joint control and loans to shareholders are carried at 
amortised cost. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future 
contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments. 

Fair value measurements using significant unobservable inputs (level 3) 

Level 3 items include unlisted equity securities held by the Group. The following table presents the changes in level 3 
instruments for the years ended 30 June 2023 and 30 June 2022: 

Closing balance 30 June 2021 

Contingent consideration received 

Assets acquired 

Fair value adjustments recognised in profit or loss 

Closing balance 30 June 2022 

Contingent consideration received 

Assets acquired 

Fair value adjustments recognised in profit or loss 

Closing balance 30 June 2023 

(i)  Valuation process 

Unlisted equity 
securities 
$'000 

631 

(471) 

3,000 

422 

3,582 

- 

- 

423 

4,005 

Unlisted equities valued under level 3 are investments in unlisted companies. Where available, the investments are valued 
based on the most recent transaction involving the securities of the company. Where there is no recent information or the 
information is otherwise unavailable, the value is derived from calculations based on the value per security of the 
underlying net tangible assets of the investee company. 

84

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
21.  Contingencies and commitments 

a)  Secured liabilities and assets pledged as security 

(i)  Guarantees 

Pinnacle Investment Management Group Limited has provided guarantees in relation to Australian Financial Services 
License Net Tangible Asset obligations (via bank guarantee) in respect of: 

(i)  Pinnacle Funds Services Limited - $5,000,000 (2022: $5,000,000) 

(ii)  Pinnacle RE Services Limited - $50,000 (2022: $50,000) 

The Group has also provided guarantees in respect of its leased premises: 

(iii)  Pinnacle Services Administration Pty Ltd - $2,480,000 (30 June 2022 - $632,000) 

The guarantee for the leases noted above is held between Pinnacle Investment Management Group Limited ($175,000), 
Pinnacle Investment Management Limited ($457,000) and Pinnacle Services Administration Pty Ltd ($1,848,000). The 
Group entered into a new premises lease that commences in July 2023 and was required to establish a guarantee in the 
current financial year. The guarantee for the expiring lease will be returned after the premises are vacated. 

The unused bank guarantee facility available at balance date was $275,000 (30 June 2022: $275,000). The Group has also 
provided guarantees in relation to its corporate credit card facility (facility limit of $400,000 of which $352,000 was unused 
at balance date).  

These guarantees may give rise to liabilities in the Company if the related entities do not meet their obligations that are 
subject to the guarantees.  

No material losses are anticipated in respect of any of the above contingent liabilities. 

b)  Commitments 

(i)  Capital commitments 

There were no capital expenditure commitments and no other expenditure commitments at balance sheet date. 

The Group has previously entered into agreements whereby it has agreed to advance sufficient funds to entities under 
joint control to cover their operating expenses until such time as the entity becomes profitable on a monthly basis and is 
generating positive cash flows. Further information in relation to these balances is provided in note 26. 

85

Annual Report     

 
 
 
 
 
 
 
 
 
 
Group Structure 

This section provides information regarding the Group’s subsidiaries and associates, and detail regarding discontinued 
operations. 

22.  Subsidiaries 

The consolidated financial statements incorporate the assets, liabilities and results of the following significant subsidiaries 
in accordance with the accounting policy described in note 32(b). The country of incorporation of all subsidiaries is also 
their principal place of business. 

Name of entity 

Country of 
incorporation 

Class of security 

Equity holding 

2023 
% 

2022 
% 

Pinnacle Investment Management Limited 

Australia 

Ordinary share 

Pinnacle Funds Services Limited 

Australia 

Ordinary share 

Pinnacle Services Administration Pty Ltd 

Australia 

Ordinary share 

Pinnacle RE Services Limited 

Australia 

Ordinary share 

Priority Funds Management Pty Ltd 

Australia 

Ordinary share 

Priority Investment Management Pty Ltd  

Australia 

Ordinary share 

Ariano Pty Ltd  

Australia 

Ordinary share 

Next Financial Holding Company Pty Ltd 

Australia 

Ordinary share 

PNI Option Plan Managers Pty Ltd 

Australia 

Ordinary share 

Pingroup IM Limited 

United States 

Ordinary share 

Pinnacle Investment Management (Canada) Ltd. 

Canada 

Ordinary share 

Pinnacle Investment Management (UK) Ltd 

United Kingdom 

Ordinary share 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

86

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
23.  Investment accounted for using the equity method 

a)  Carrying amounts 

The Group holds investments in entities under joint control that undertake investment management activities. Information 
relating to these entities under joint control is set out below. 

Ownership interest 

Carrying Value 

Name of company 

Principal Activity 

2023 

2022 

2023 

Unlisted 

% 

% 

$'000 

Plato Investment Management Limited 

Funds Management 

42.59 

42.59 

6,814 

2022 

$'000 

6,063 

Palisade Investment Partners Limited 

Funds Management 

35.90 

37.60 

12,424 

13,781 

Hyperion Holdings Limited 

Funds Management 

49.99 

49.99 

20,904 

21,723 

Foray Enterprises Pty Limited (holding company for 
Resolution Capital) 

SolCorp Holdings Pty Ltd (holding company for 
Solaris) 

Funds Management 

49.50 

49.50 

39,320 

35,840 

Funds Management 

44.50 

44.50 

5,596 

Spheria Asset Management Pty Ltd 

Funds Management 

40.00 

40.00 

2,241 

6,065 

3,585 

Antipodes Partners Holdings Pty Ltd 

Funds Management 

24.24 

25.54 

9,177 

10,033 

Firetrail Investments Limited 

Funds Management 

23.50 

23.50 

17,449 

18,096 

Metrics Credit Holdings Pty Limited 

Funds Management 

35.00 

35.00 

50,629 

50,090 

Longwave Capital Partners Pty Limited 

Funds Management 

40.00 

40.00 

3,069 

Riparian Capital Partners Pty Limited 

Funds Management 

40.00 

40.00 

1,362 

2,962 

1,382 

Coolabah Capital Investments Pty Ltd 

Funds Management 

35.00 

35.00 

73,886 

72,219 

Five V Capital Pty Ltd 

Funds Management 

25.00 

25.00 

76,481 

77,685 

Langdon Equity Partners Ltd 

Funds Management 

32.50 

32.50 

2,635 

983 

Aikya Investment Management Limited 

Funds Management 

32.50 

32.50 

6,478 

4,745 

328,465 

325,252 

Each of the above entities under joint control is incorporated and has their principal place of business in Australia (except 
for Aikya Investment Management Limited (United Kingdom) and Langdon Equity Partners Ltd (Canada). Each of the above 
entities is accounted for using the equity method.   

Impairment testing is carried out on the carrying value of the Group’s investments accounted for using the equity method 
at each reporting date. For the purpose of impairment testing, each investment is assessed individually as each represents 
a separate ‘cash generating unit’ (CGU), with the carrying value compared to the ‘recoverable amount’. The ‘recoverable 
amount’ is defined as the higher of each CGU’s fair value less costs of disposal and its value in use.  

An impairment trigger assessment was carried out at 30 June 2023 and no impairment triggers were deemed to exist at 
this date. As a result of these analyses, there has been no impairment to the Group’s investments accounted for using the 
equity method in the financial year ended 30 June 2023 (30 June 2022: Reminiscent Capital Pty Ltd $1,811,000). 

Revenues generated by Affiliates are impacted by movements in equities and other markets which, in turn, could impact 
the Group’s share of net profit of associates and joint ventures accounted for using the equity method. Revenues 
generated by Affiliates may also be impacted by movements in interest rates which, in turn, could impact the Group’s 
share of net profit of associates and joint ventures accounted for using the equity method. 

87

Annual Report     

 
 
 
 
 
 
 
 
 
b)  Summarised financial information for joint ventures 

The tables below provide summarised financial information for those joint ventures and associates that are material to the 
group. The Group assesses materiality based on each joint venture's relative contribution to share of carrying value and 
share of net profits, and other qualitative factors. The information disclosed reflects the amounts presented in the financial 
statements of the relevant associates and joint ventures and not Pinnacle Investment Management Group Limited’s share 
of those amounts. They have been amended to reflect adjustments made by the entity when using the equity method, 
including fair value adjustments and modifications for differences in accounting policy. 

Hyperion Holdings Limited 

Foray Enterprises Pty Limited*  Metrics Credit Holdings Pty Ltd 

Coolabah Capital Investments 
Pty Ltd 

2023 
$000 

2022 
$000 

2023 
$000 

2022 
$000 

2023 
$000 

2022 
$000 

2023 
$000 

2022 
$000 

Summarised statement of financial position 

Total current assets 

44,153 

38,759 

42,191 

40,227 

83,904 

54,373 

21,072 

14,368 

Total non-current assets 

6,386 

10,849 

5,932 

5,086 

354,911 

95,575 

11,593 

10,156 

Total current liabilities 

(8,909) 

(6,322) 

(14,585) 

(19,608) 

(221,007) 

(31,527) 

(7,154) 

(5,010) 

Total non-current liabilities 

(22) 

(47) 

(1,458) 

(677) 

(161,426) 

(64,566) 

(3,514) 

(2,611) 

Net Assets 

41,608 

43,239 

32,080 

25,028 

56,382 

53,855 

21,997 

16,903 

Reconciliation to carrying 
amounts: 

Opening net assets 1 July 

43,239 

37,050 

25,028 

18,885 

53,855 

44,207 

16,903 

13,582 

Issued shares 

Reserves 

- 

- 

- 

- 

- 

- 

- 

73 

1,200 

852 

1,294 

(806) 

262 

(81) 

1,717 

- 

Total comprehensive income  40,591 

40,179 

25,552 

33,070 

14,975 

23,160 

18,120 

13,169 

Dividends paid 

(42,222) 

(33,990) 

(18,500) 

(27,000) 

(14,500) 

(14,000) 

(13,207) 

(11,565) 

Closing net assets 

41,608 

43,239 

32,080 

25,028 

56,382 

53,855 

21,997 

16,903 

Non-controlling Interest 

- 

- 

- 

- 

4,514 

- 

- 

- 

Closing net assets (parent) 

41,608 

43,239 

32,080 

25,028 

51,868 

53,855 

21,997 

16,903 

Group share in % 

49.99% 

49.99% 

49.5% 

49.5% 

35.0% 

35.0% 

35.0% 

35.0% 

Group's share of net assets 

20,800 

21,615 

15,880 

12,388 

18,153 

18,849 

7,699 

5,916 

Excess consideration over 
share of net assets 

104 

108 

23,440 

23,452 

32,476 

31,241 

66,187 

66,303 

Carrying amount 

20,904 

21,723 

39,320 

35,840 

50,629 

50,090 

73,886 

72,219 

Summarised statement of comprehensive 
income 

Revenue 

70,898 

79,813 

67,687 

78,754 

102,146 

78,314 

41,950 

31,243 

Net profit for the year after 
tax 

40,591 

40,179 

25,552 

33,070 

14,975 

23,160 

18,120 

13,169 

Total comprehensive income  40,591 

40,179 

25,552 

33,070 

14,975 

23,160 

18,120 

13,169 

Non-controlling interest 

- 

- 

- 

- 

(1,063) 

(440) 

- 

- 

Total comprehensive income 
(parent) 
Dividends received from joint 
venture entities (Pinnacle 
share) 

40,591 

40,179 

25,552 

33,070 

16,038 

23,600 

18,120 

13,169 

21,111 

16,995 

9,158 

12,465 

5,075 

4,900 

4,676 

2,971 

*holding company for Resolution Capital Limited 

88

Annual Report     

 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually immaterial jointly controlled entities 

In addition to the interests disclosed above, the Group also has interests in a number of individually immaterial entities 
under joint control that are accounted for using the equity method. 

Aggregate carrying amount of individually immaterial joint ventures 

Aggregate amounts of the Group's share of: 

Profit for the year 

Other comprehensive income 

Total comprehensive income 

c)  Movements in carrying amounts 

Carrying amount at the beginning of the financial year 

Purchase of shares in entities under joint control 

Sales of shares in entities under joint control 

Share of profit after income tax 

Impairment provision of entities under joint control 

2023 
$'000 

143,726 

2022 
$'000 

145,380 

22,475 

27,937 

- 

- 

22,475 

27,937 

2023 
$'000 

325,252 

4,389 

(2,445) 

67,359 

- 

2022 
$'000 

186,957 

133,011 

- 

75,686 

(1,811) 

Dividends received/receivable 

(66,090) 

(68,591) 

Carrying amount at the end of the financial year 

328,465 

325,252 

d)  Share of entities' revenue, expenses and results 

2023 
$'000 

2022 
$'000 

193,591 

191,781 

(101,042) 

(87,701) 

92,549 

104,080 

(25,190) 

(28,394) 

67,359 

75,686 

Revenues 

Expenses 

Profit before income tax 

Income tax expense 

Profit after income tax 

89

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
e)  Summary of entities under joint control 

Current assets 

Non-current assets 

Total assets 

Current liabilities 

Non-current liabilities 

Total liabilities 

Net assets 

2023 
$'000 

142,537 

152,156 

294,693 

132,244 

65,010 

197,254 

97,439 

2022 
$'000 

132,279 

67,063 

199,342 

60,007 

25,711 

85,718 

113,624 

24.  Parent Entity financial information 

a)  Summary financial information 

The individual financial statements for the Parent Entity (PNI) show the following aggregate amounts: 

2023 
$'000 

2022 
$'000 

961 

704 

312,977 

317,177 

313,938 

317,881 

122 

9,483 

9,605 

180 

10,008 

10,188 

304,333 

307,693 

417,949 

407,356 

(65,490) 

(51,302) 

(48,126) 

(48,361) 

304,333 

307,693 

66,548 

67,442 

66,548 

67,442 

Statement of financial position 

Current assets 

Non-current assets 

Total assets 

Current liabilities 

Non-current liabilities 

Total liabilities 

Net assets 

Shareholders' equity 

Contributed equity 

Reserves 

Accumulated losses 

Total equity 

Profit/(loss) for the year 

Total comprehensive income/(loss) 

b)  Guarantees entered into by the Parent Entity 

Details of guarantees entered into by the Group are provided at note 21. 

90

Annual Report     

 
 
 
 
 
25.  Additional cash flow information 

a)  Reconciliation to cash at the end of the year 

For the purposes of the consolidated statement of cash flows, cash and cash equivalents include cash at bank and on hand, 
deposits at call and cash held in trust net of outstanding bank overdrafts. Cash and cash equivalents at the end of the 
reporting period as shown in the consolidated statement of cash flows can be reconciled to the related items in the 
consolidated statement of financial position as follows: 

Cash and cash equivalents 

Balances per statement of cash flows 

2023 
$'000 

27,616 

2022 
$'000 

38,265 

27,616 

38,265 

b)  Reconciliation of net cash flow from operating activities to profit 

Profit/(loss) for the year 

Depreciation and amortisation 

Impairment provision 

Right-of-use asset depreciation and interest charge 

2023 
$'000 

76,472 

310 

- 

1,257 

2022 
$'000 

76,365 

992 

1,811 

1,370 

Reinvested distributions received 

(5,684) 

(2,998) 

Equity settled share-based payments and performance rights 

3,443 

2,962 

Interest Expense 

52 

63 

Net losses/(gains) on financial assets at fair value through profit or loss 

(10,853) 

5,647 

Interest on assets at amortised cost 

(220) 

4 

Change in operating assets and liabilities, net of effects from acquisition and disposal of businesses: 

Trade and other receivables 

Investments accounted for using the equity method 

Financial assets at fair value through profit or loss 

Trade and other payables 

Provisions 

(1,374) 

(5,898) 

(1,272) 

(7,095) 

(3,745) 

(86,695) 

(3,607) 

(2,050) 

262 

598 

Net cash inflow/(outflow) from operating activities 

55,041 

(14,924) 

The reconciliation of net cash flow from operating activities to profit/(loss) includes continuing operations only. 

91

Annual Report     

 
 
 
 
 
 
 
 
 
26.  Related party transactions 

a)  Parent entity 

The Parent Entity of the Group is Pinnacle Investment Management Group Limited (refer note 24). 

b)  Subsidiaries and jointly controlled entities 

Interests in subsidiaries are set out in note 22. 

Interests in jointly controlled entities are set out in note 23. 

Details of service charges to jointly controlled entities are provided in note 1 and note 26(g). 

Details of dividend payments from entities under joint control are provided in note 23. 

c)  Key Management Personnel (KMP) and Compensation 

Disclosure relating to KMP is set out in note 27. 

Disclosure relating to share-based payments is set out in note 28. 

d)  Transactions with other related parties 

The following transactions occurred with related parties:  

(i)  Movement in loans to KMP - Loans re-issued 25 August 2016 

Upon acquisition of the non-controlling interest of Pinnacle Investment Management Limited, existing loans amounting to 
$4,303,485 issued by Pinnacle Investment Management Limited in prior years to its senior executives to assist executives 
to acquire equity were re-issued by the Company. This included existing loans to Mr Ian Macoun, Mr Adrian Whittingham 
and Mr Andrew Chambers who are or have been KMP of the Group. 

The loans date from 2009, 2011, 2012 and 2015 and were used to assist the executives to acquire equity in PIML. The loans 
are interest free and repayable on termination of employment or when the underlying equity is sold, whichever event 
occurs earlier. The re-issued loans are also secured by share mortgages with limited recourse to the shares. 

The value of re-issued loans for each of the KMP and repayments made during the year were as follows: 

Key Management 
Personnel 

Loan balance – 1 July 
2022 
$ 

Repayments made 
$ 

Other changes during the 
year 
$ 

Loan balance – 30 June 2023 
$ 

Andrew Chambers 

234,253 

(14,402) 

- 

219,851 

(ii)  Loan Shares issued under the Pinnacle Omnibus Plan 

During the year to 30 June 2023, no additional loan shares were issued to KMP under the Pinnacle Omnibus Plan (150,000 
loan shares were issued during the year to 30 June 2022).  

The loan shares issued in the year to 30 June 2022 and year to 30 June 2021 are subject to service and performance 
conditions and will vest after five years, if those conditions are met. The loans are interest free and limited in recourse to 
the shares. They are repayable on termination of employment or when the underlying equity is sold, whichever occurs 
earlier. 

The remaining loan shares are subject to service and performance conditions and will vest after five years, if the conditions 
are met. The loans are interest free and limited in recourse to the shares. They are repayable 10 years from grant date, on 
termination of employment or when the underlying equity is sold, whichever occurs earlier.  

The value of the loans issued for each of the KMP at period end and repayments made during the year were as follows: 

92

Annual Report     

 
 
 
 
Key Management 
Personnel 

Loan balance – 
1 July 2022 
$ 

Ian Macoun 

1,522,570 

Andrew Chambers 

4,060,187 

Dan Longan 

3,645,015 

Calvin Kwok 

3,476,323 

New loans issued 
$ 

Repayments made 
$*** 

Loan shares 
forfeited* $ 

Other changes 
during the year* 
$ 

Loan balance – 30 
June 2023 
$ 

- 

- 

- 

- 

(75,180) 

(200,480) 

(112,770) 

(125,300) 

- 

- 

- 

- 

1,447,390 

3,859,707 

3,532,245 

3,351,023 

***Repayments are from dividends received In relation to the loan shares. 

(iii) Loans to other Related Parties 

On 27 October 2017, a subsidiary of the Company provided loan funding totalling $5,226,000 to a number of executives of 
Palisade, to facilitate their purchase of shares in Palisade from an exiting shareholder. The loans have terms of between 
five and seven years, are interest-bearing and secured by shares in Palisade. During the current financial year, further loan 
funding totalling $2,493,000 was provided to facilitate further recycling of equity. The loans are recorded within other 
current and non-current assets in the consolidated statement of financial position. 

During the year, interest of $114,000 accrued on these loans and repayments of $375,000 were made. The balance of the 
loans at 30 June 2023 including capitalized interest was $3,590,000. 

During the year, Palisade Real Assets acquired its first energy transition asset in Malaby, Wiltshire, UK. This has been 
funded initially by Pinnacle, with a fixed return on the capital provided of 8% and a term of 1 year. The asset is recorded 
within financial assets at fair value through profit or loss in the statement of financial position. The balance at 30 June 2023 
including the return was $19,772,000. 

e)  Loans to/from related parties 

Loans to joint associates (including Affiliate executives) 

Balance at 1 July 

Loans advanced 

Interest accrued 

Loans repaid 

2023 
$ 

2022 
$ 

3,287,326 

2,788,054 

3,672,761 

1,374,951 

220,368 

121,897 

(685,090) 

(997,576) 

Share of equity accounted losses from Affiliates 

- 

- 

Balance at 30 June 

6,495,365 

3,287,326 

f)  Guarantees 

The Group has provided guarantees to subsidiaries as described in note 21. 

93

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
g)  Transactions with other related parties and jointly controlled entities 

The following transactions occurred with related parties: 

 

 

 

 

 

 

 

Sales of services to other related parties/jointly controlled affiliates $36,959,227 (2022: $39,552,938) 

Transactions associated with Principal Investments managed by jointly controlled Affiliates  

Acquisition of financial assets at fair value through profit and loss $82,040,581 (2022: $131,005,069) 

Proceeds for disposal of financial assets at fair value through profit and loss $81,801,838 (2022: 
$46,081,234) 

Balance of financial assets at fair value through profit and loss at 30 June 2023 $148,456,759 (2022: 
$134,179,716) 

Dividend revenue $6,136,168 (2022: $3,922,607) 

Balance of trade receivables to jointly controlled entities at 30 June 2023 $19,832,525 (2022: 
$20,302,751) 

27.  Key Management Personnel  

a)  Key Management Personnel compensation 

Short-term employee benefits 

Post-employment benefits 

Long-term benefits 

Share-based payments  

Total Key Management Personnel compensation 

2023 
$ 

2022 
$ 

2,843,000 

3,812,900 

137,500 

137,500 

37,854 

101,635 

1,024,598 

1,024,598 

4,042,952 

5,076,633 

Certain Executive KMP are party to the long-term employee incentive arrangements described in note 32(s)(vii). At 30 June 
2023, the balance of loans issued to Executive KMP was $12,410,259 (2022: $12,938,391) relating to 2,296,583 shares 
issued in the Company (2022: 2,296,583 shares). 

Detailed remuneration disclosures for KMP are provided in the Remuneration Report. 

94

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
 
b)  Loans to Key Management Personnel 

Details of loans made to executive directors of Pinnacle Investment Management Group Limited and other Executive KMP 
of the Group, including their related parties, are set out below. 

(i)  Aggregates for Key Management Personnel 

Balance at the 
start of the 
year 
$ 

Interest paid 
and payable 
for the year 
$ 

Loans 
advanced 
during the year 
$ 

Loan repayments 
received  
$ 

Other 
Changes* 
$ 

Balance at the 
end of the year 
$ 

Interest not 
charged 
$ 

Number of 
KMP in 
Group at the 
end of the 
year 

2023 

12,938,391 

- 

- 

(528,132) 

2022 

12,993,205 

6,483 

2,522,670 

(2,583,967) 

- 

- 

12,410,259 

726,667 

12,938,391 

595,783 

4 

5 

The amounts shown for interest not charged in the table above represents the difference between the amount paid and 
payable for the year and the amount of interest that would have been charged on an arm’s length basis. 

28.  Share-based payments  

Options were granted for no consideration and vest based on fulfilment of specified service conditions. Vested options are 
exercisable for a period of 6 months after vesting. The fair value of options was determined using a Black-Scholes pricing 
model taking into account the exercise price, the term of the option, the share price at grant date and expected price 
volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the instrument. 

a)  Pinnacle Long-term Employee Incentive Plan 

Information regarding the Pinnacle Long-term Employee Incentive Plan is provided in notes 32(s)(vii) and 26(d). 

b)  Pinnacle Omnibus Plan 

The establishment of the Pinnacle Omnibus Plan was approved by the Board on 22 August 2018 and by shareholders at the 
AGM on 18 October 2018. The plan is designed to provide long-term incentives for employees (including executive and 
non-executive directors) to deliver long-term shareholder returns. The plan provides for the ability to offer options, 
performance rights and loan funded shares to employees. Under the plan, the shares and options only vest if certain 
service and performance conditions are met. Participation in the plan is at the Board's discretion and no individual has a 
contractual right to participate in the plan or to receive any guaranteed benefits. 

Set out below are summaries of options and loan shares granted under the plan. 

95

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
(i) Loan Shares

Grant 
date 

2023 

Expiry 
date 

Exercise 
price 

Balance at 
start of 
the year 

Granted 
during 
the year 

Exercised 
during 
the year 

Forfeit 
during 
the year 

Balance 
at end of 
the year 

Vested and 
exercisable 
at end of 
the year 

17 September 2018 

16 September 2023 

$7.2917 

1,850,000 

15 November 2018 

14 November 2023 

$5.6582 

1,100,000 

12 March 2019 

11 March 2024 

$5.1234 

400,000 

25 March 2020 

24 March 2025 

$2.9683 

150,000 

11 September 2020 

10 September 2025 

$5.2404 

1,150,000 

30 December 2020 

29 December 2025 

$6.8450 

350,000 

17 September 2021 

16 September 2026 

$16.8178 

700,000 

- 

- 

- 

- 

- 

- 

- 

30 September 2022 

29 September 2027 

$8.6451 

-

1,017,000

5,700,000 

1,017,000 

Weighted average exercise price 

$7.44 

$8.65 

2022 

17 September 2018 

16 September 2023 

$7.2917 

2,000,000 

15 November 2018 

14 November 2023 

$5.6582 

1,100,000 

12 March 2019 

11 March 2024 

$5.1234 

700,000 

25 March 2020 

24 March 2025 

$2.9683 

150,000 

11 September 2020 

10 September 2025 

$5.2404 

1,150,000 

30 December 2020 

29 December 2025 

350,000 

- 

- 

- 

- 

- 

- 

17 September 2021 

16 September 2026 

$6.8450 

-

700,000

5,450,000 

700,000 

Weighted average exercise price 

$6.10 

$16.82 

- 

- 

- 

- 

- 

- 

- 

-

-

-

- 

- 

- 

- 

- 

- 

- 

-

-

- 

- 

- 

- 

- 

- 

- 

1,850,000 

1,100,000 

400,000 

150,000 

1,150,000 

350,000 

700,000 

(150,000)

867,000 

(150,000)

6,567,000 

$8.65

$7.60 

(150,000) 

1,850,000 

- 

1,100,000 

(300,000) 

400,000 

- 

- 

- 

- 

150,000 

1,150,000 

350,000 

700,000 

(450,000)

5,700,000 

$5.84

$7.44 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

1,017,000 loan shares were issued to employees during the financial year and 150,000 loan shares were forfeited by 
employees during the year. The shares are subject to service and performance conditions and will vest after five years, if 
the conditions are met. The loans are interest free (until vesting date) and limited in recourse to the shares. They are 
repayable 10 years from grant date, on termination of employment or when the underlying equity is sold, whichever 
occurs earlier. 

Loan shares issued under the plan carry dividend and voting rights. 

96

Annual Report

Fair value of interests granted – 17 September 2018 

The fair value of loan shares were determined using a Black-Scholes pricing model taking into account the exercise price, 
the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected 
dividend yield and the risk free interest rate for the term of the instrument.  

 

 

 

 

 

 

 

 

Fair value at grant date: $2.59 per loan share 

Exercise price: $7.2917 

Grant date: 17 September 2018 

Vesting date: 16 September 2023 

Share price at grant date: $7.31 

Expected price volatility of the Company's shares: 36% 

Expected dividend yield: 0.0% 

Risk-free interest rate: 2.28% 

Fair value of interests granted – 15 November 2018 

The fair value of loan shares were determined using a Black-Scholes pricing model taking into account the exercise price, 
the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected 
dividend yield and the risk free interest rate for the term of the instrument. 

 

 

 

 

 

 

 

 

Fair value at grant date: $2.17 per loan share 

Exercise price: $5.6582 

Grant date: 15 November 2018 

Vesting date: 14 November 2023 

Share price at grant date: $5.64 

Expected price volatility of the Company's shares: 40% 

Expected dividend yield: 0.0% 

Risk-free interest rate: 2.28% 

Fair value of interests granted – 12 March 2019 

The fair value of loan shares were determined using a Black-Scholes pricing model taking into account the exercise price, 
the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected 
dividend yield and the risk free interest rate for the term of the instrument. 

 

 

 

 

 

 

 

 

Fair value at grant date: $2.31 per loan share 

Exercise price: $5.1234 

Grant date: 12 March 2019 

Vesting date: 11 March 2024 

Share price at grant date: $5.18 

Expected price volatility of the Company's shares: 49% 

Expected dividend yield: 0.0% 

Risk-free interest rate: 1.76% 

97

Annual Report     

 
 
 
Fair value of interests granted – 25 March 2020 

The fair value of loan shares were determined using a Black-Scholes pricing model taking into account the exercise price, 
the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected 
dividend yield and the risk free interest rate for the term of the instrument. 

 

 

 

 

 

 

 

 

Fair value at grant date: $1.02 per loan share 

Exercise price: $2.9683 

Grant date: 25 March 2020 

Vesting date: 24 March 2025 

Share price at grant date: $2.51 

Expected price volatility of the Company's shares: 53% 

Expected dividend yield: 0.0% 

Risk-free interest rate: 0.48% 

Fair value of interests granted – 11 September 2020 

The fair value of loan shares were determined using a Black-Scholes pricing model taking into account the exercise price, 
the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected 
dividend yield and the risk free interest rate for the term of the instrument. 

 

 

 

 

 

 

 

 

Fair value at grant date: $2.4878 per loan share 

Exercise price: $5.2404 

Grant date: 11 September 2020 

Vesting date: 10 September 2025 

Share price at grant date: $4.99 

Expected price volatility of the Company's shares: 61% 

Expected dividend yield: 0.0% 

Risk-free interest rate: 0.28% 

Fair value of interests granted – 30 December 2020 

The fair value of loan shares were determined using a Black-Scholes pricing model taking into account the exercise price, 
the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected 
dividend yield and the risk free interest rate for the term of the instrument. 

 

 

 

 

 

 

 

 

Fair value at grant date: $3.7704 per loan share 

Exercise price: $6.8450 

Grant date: 30 December 2020 

Vesting date: 29 December 2025 

Share price at grant date: $7.24 

Expected price volatility of the Company's shares: 61% 

Expected dividend yield: 0.0% 

Risk-free interest rate: 0.34% 

98

Annual Report     

 
 
Fair value of interests granted – 17 September 2021 

The fair value of loan shares were determined using a Black-Scholes pricing model taking into account the exercise price, 
the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected 
dividend yield and the risk free interest rate for the term of the instrument. 

 

 

 

 

 

 

 

 

Fair value at grant date: $5.9772 per loan share 

Exercise price: $16.8178 

Grant date: 17 September 2021 

Vesting date: 16 September 2026 

Share price at grant date: $17.08 

Expected price volatility of the Company's shares: 39% 

Expected dividend yield: 0.0% 

Risk-free interest rate: 0.65% 

Fair value of interests granted – 30 September 2022 

The fair value of loan shares were determined using a Black-Scholes pricing model taking into account the exercise price, 
the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected 
dividend yield and the risk free interest rate for the term of the instrument. 

 

 

 

 

 

 

 

 

Fair value at grant date: $3.8435 per loan share 

Exercise price: $8.6451 

Grant date: 30 September 2022 

Vesting date: 29 September 2027 

Share price at grant date: $8.31 

Expected price volatility of the Company's shares: 49% 

Expected dividend yield: 0.0% 

Risk-free interest rate: 3.76% 

99

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
(ii)  Options 

Grant 
date 

2023 

Expiry 
date 

Exercise 
price 

Balance at 
start of 
the year 

Granted 
during 
the year 

Exercised 
during 
the year 

Forfeited 
during 
the year 

Balance 
at end of 
the year 

Vested and 
exercisable 
at end of 
the year 

15 November 2018 

14 November 2023 

$5.6582 

100,000 

25 March 2020 

24 March 2025 

$2.9683 

200,000 

11 September 2020 

10 September 2025 

$5.2404 

200,000 

30 December 2020 

29 December 2025 

$6.8450 

100,000 

17 September 2021 

16 September 2026 

$16.8178 

100,000 

- 

- 

- 

- 

- 

30 September 2022 

29 September 2027 

$8.6451 

- 

100,000 

700,000 

100,000 

Weighted average exercise price 

$6.54 

$8.65 

2022 

15 November 2018 

14 November 2023 

$5.6582 

100,000 

25 March 2020 

24 March 2025 

$2.9683 

200,000 

11 September 2020 

10 September 2025 

$5.2404 

200,000 

30 December 2020 

29 December 2025 

$6.8450 

100,000 

- 

- 

- 

- 

17 September 2021 

16 September 2026 

$16.8178 

- 

100,000 

Weighted average exercise price 

$4.82 

$16.82 

600,000 

100,000 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

100,000 

200,000 

200,000 

100,000 

100,000 

100,000 

800,000 

$6.80 

100,000 

200,000 

200,000 

100,000 

100,000 

700,000 

$6.54 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Fair value of interests granted – 15 November 2018 

250,000 options were granted for no consideration and vest based on fulfilment of specified service and performance 
conditions and will vest after five years if the conditions are met. The fair value of options were determined using a Black-
Scholes pricing model taking into account the exercise price, the term of the option, the share price at grant date and 
expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of 
the instrument. 

 

 

 

 

 

 

 

 

Fair value at grant date: $1.86 per option 

Exercise price: $5.6582 

Grant date: 15 November 2018 

Vesting date: 14 November 2023 

Share price at grant date: $5.64 

Expected price volatility of the Company's shares: 40% 

Expected dividend yield: 1.6% 

Risk-free interest rate: 2.28% 

  Options issued under the plan carry no dividend and voting rights. 

100 

Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of interests granted – 25 March 2020 

200,000 options were granted for no consideration and vest based on fulfilment of specified service and performance 
conditions and will vest after five years if the conditions are met. The fair value of options were determined using a Black-
Scholes pricing model taking into account the exercise price, the term of the option, the share price at grant date and 
expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of 
the instrument. 

 

 

 

 

 

 

 

 

Fair value at grant date: $0.75 per option 

Exercise price: $2.9683 

Grant date: 25 March 2020 

Vesting date: 24 March 2025 

Share price at grant date: $2.51 

Expected price volatility of the Company's shares: 53% 

Expected dividend yield: 3.7% 

Risk-free interest rate: 0.48% 

  Options issued under the plan carry no dividend and voting rights. 

Fair value of interests granted – 11 September 2020 

200,000 options were granted for no consideration and vest based on fulfilment of specified service and performance 
conditions and will vest after five years if the conditions are met. The fair value of options were determined using a Black-
Scholes pricing model taking into account the exercise price, the term of the option, the share price at grant date and 
expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of 
the instrument. 

 

 

 

 

 

 

 

 

Fair value at grant date: $1.88 per option 

Exercise price: $5.2404 

Grant date: 11 September 2020 

Vesting date: 10 September 2025 

Share price at grant date: $4.99 

Expected price volatility of the Company's shares: 61% 

Expected dividend yield: 3.7% 

Risk-free interest rate: 0.28% 

  Options issued under the plan carry no dividend and voting rights. 

Fair value of interests granted – 30 December 2020 

100,000 options were granted for no consideration and vest based on fulfilment of specified service and performance 
conditions and will vest after five years if the conditions are met. The fair value of options were determined using a Black-
Scholes pricing model taking into account the exercise price, the term of the option, the share price at grant date and 
expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of 
the instrument. 

 

 

 

 

 

 

 

Fair value at grant date: $2.86 per option 

Exercise price: $6.8450 

Grant date: 30 December 2020 

Vesting date: 29 December 2025 

Share price at grant date: $7.24 

Expected price volatility of the Company's shares: 61% 

Expected dividend yield: 3.7% 

101 

Annual Report     

 

Risk-free interest rate: 0.34% 

  Options issued under the plan carry no dividend and voting rights. 

Fair value of interests granted – 17 September 2021 

100,000 options were granted for no consideration and vest based on fulfilment of specified service and performance 
conditions and will vest after five years if the conditions are met. The fair value of options were determined using a Black-
Scholes pricing model taking into account the exercise price, the term of the option, the share price at grant date and 
expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of 
the instrument. 

 

 

 

 

 

 

 

 

Fair value at grant date: $4.70 per option 

Exercise price: $16.8178 

Grant date: 17 September 2021 

Vesting date: 16 September 2026 

Share price at grant date: $17.08 

Expected price volatility of the Company's shares: 39% 

Expected dividend yield: 2.4% 

Risk-free interest rate: 0.65% 

  Options issued under the plan carry no dividend and voting rights. 

Fair value of interests granted – 30 September 2022 

100,000 options were granted for no consideration and vest based on fulfilment of specified service and performance 
conditions and will vest after five years if the conditions are met. The fair value of options were determined using a Black-
Scholes pricing model taking into account the exercise price, the term of the option, the share price at grant date and 
expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of 
the instrument. 

 

 

 

 

 

 

 

 

Fair value at grant date: $2.53 per option 

Exercise price: $8.6451 

Grant date: 30 September 2022 

Vesting date: 29 September 2027 

Share price at grant date: $8.31 

Expected price volatility of the Company's shares: 49% 

Expected dividend yield: 5.0% 

Risk-free interest rate: 3.76% 

  Options issued under the plan carry no dividend and voting rights. 

102 

Annual Report     

 
 
 
 
 
 
 
 
c)  Expenses arising from share-based transactions 

Total expenses arising from share-based payment transactions recognised during the period as part of incentive expenses 
were as follows: 

Pinnacle Investment Management Group Employee Option Share Plan 

Pinnacle Omnibus Plan 

Pinnacle Long-term Employee Incentive Plan 

2023 
$’000 

- 

3,408 

- 

2022 
$’000 

- 

2,848 

- 

Total share-based payment transactions 

3,408 

2,848 

29.  Remuneration of auditors  
During the year the following fees were paid or payable for services provided by the auditor of the Company and its related 
practices: 

2023 
$ 

2022 
$ 

PricewaterhouseCoopers Australia 

(i) 

The deferred tax asset balance comprises temporary differences attributable to: 

Audit and review of financial statements 

289,635 

291,100 

Other assurance services: 

Audit of regulatory returns 

25,560 

24,000 

Audit of compliance plan - Responsible entity * 

131,905 

137,350 

Other assurance services 

- 

- 

Total remuneration for audit and other assurance services 

447,100 

452,450 

(ii)  Taxation services 

Tax services 

Total remuneration for taxation services 

(iii)  Other services 

Other services 

37,165 

37,165 

56,657 

56,657 

- 

- 

Total remuneration of PricewaterhouseCoopers Australia 

484,265 

509,107 

Total remuneration of auditors 

484,265 

509,107 

* Compliance plan audit charges are on-charged to managed funds to which responsible entity services are provided. 

30.  Events occurring after the reporting period 

No matter or circumstance has occurred subsequent to year-end that has significantly affected, or may significantly affect, 
the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial 
years. 

103 

Annual Report     

 
 
 
 
 
 
31.  Critical accounting estimates and judgements 

Estimates and judgements 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 Group and that are believed to be reasonable under 
the circumstances. 

a)  Critical accounting estimates and assumptions 

The Group makes estimates and assumptions concerning the future in the preparation of the financial statements. The 
resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions 
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next 
financial year are discussed below. 

(i)  Estimated impairment of non-financial assets 

The Group tests at least annually whether assets have suffered any impairment, in accordance with the accounting policy 
stated in note 32(i). Where required, the recoverable amounts of assets have been determined based on value-in-use 
calculations. These calculations require the use of assumptions. For impairment policies regarding financial assets see 
notes 32(k) and 32(l). 

(ii)  Income taxes 

The Group can recognise deferred tax assets relating to carried forward tax losses and deductible timing differences to the 
extent that it is considered probable that there will be future taxable profits relating to the same taxation authority against 
which the carried forward tax losses and deductible timing differences will be utilized. As at the reporting date the 
deferred tax assets of the consolidated entity have not been recognised on the basis that their recovery is not considered 
probable. 

(b)  Critical judgements in applying the Group's accounting policies 

(i)  Fair value of financial assets 

The fair value of financial assets that are not traded in an active market is determined by using valuation techniques. The 
Group uses its judgement to select a variety of methods and make assumptions that are mainly based on market 
conditions existing at each reporting date (refer to note 20(d) for further details). 

(ii)  Entities subject to joint control 

Entities subject to joint control are not considered controlled entities for the purposes of AASB 10 on the basis that the 
group holds a minority shareholding (20%-49.99%) of the voting rights (with no preferential rights to returns) and there is a 
requirement for unanimous decision making in relation to a number of strategic matters contained in the shareholders 
agreements. (refer to note 32(b) for further details). 

(iii) Share-based payments 

The Group measures equity settled share-based payment transactions by reference to the fair value of the equity 
instruments at the date at which they are granted. The fair value is determined by management using option pricing 
models that use estimates and assumptions. Management exercises judgement in preparing the valuations and these may 
affect the value of any share-based payments recorded in the financial statements (refer to notes 32(s)(iv) and 26 for 
further details). 

104 

Annual Report     

 
 
 
 
 
 
 
32.  Summary of significant accounting policies 

The principal accounting policies adopted in the preparation of these consolidated 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 consolidated entity consisting of Pinnacle Investment Management Group Limited and its subsidiaries ("the 
Group") - refer to note 22. 

a)  Basis of preparation 

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and 
Interpretations issued by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The Group is a 
for profit entity for the purpose of preparing the financial statements. 

(i)  Compliance with AASB 

The consolidated financial statements of the Group also comply with International Financial Reporting Standards (IFRS) as 
issued by the International Accounting Standards Board (IASB). 

(ii)  New and amended standards adopted by the Group 

There are no new or amended standards adopted by the Group for the first time for their annual reporting period 
commencing 1 July 2022 that have had any impact on the Group's accounting policies nor have had any impact on the 
amounts recognised in prior periods and are not expected to significantly affect the current or future periods. 

(iii) Early adoption of standards 

The Group has elected not to apply any of the pronouncements before their operative date in the annual reporting period 
beginning 1 July 2022. 

(iv) Historical cost convention 

These financial statements have been prepared under the historical cost convention, as modified by the revaluation of 
available for sale financial assets, and financial assets (including derivative instruments) at fair value through profit or loss. 

b)  Principles of consolidation 

(i)  Subsidiaries 

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Pinnacle Investment 
Management Group Limited as at 30 June 2023 and the results of all subsidiaries for the year then ended. Pinnacle 
Investment Management Group Limited and its subsidiaries together are referred to in these financial statements as the 
“Group” or the “consolidated entity”. 

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity 
when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to 
affect those returns through its power to direct the activities of the entity. 

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated 
from the date that control ceases.  

The acquisition method of accounting is used to account for business combinations by the Group (refer to note 32(h)). 

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. 
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. 
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by 
the Group. 

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of 
comprehensive income, consolidated statement of changes in equity and consolidated statement of financial position, 
respectively. 

105 

Annual Report     

 
 
(ii)  Employee share trust 

The Group has formed a trust to administer the Group's employee share plans. Where the substance of the relationship is 
that control rests with the Group, the employee share trust is consolidated and any shares held by the trust are disclosed 
as treasury stock and deducted from contributed equity (refer to note 16 and note 28(a)). 

(iii) Entities under joint control 

Entities under joint control are all entities over which the Group has a shareholding of between 20% and 49.99% of the 
voting rights, which have been assessed to meet the classification of joint venture under AASB 11 Joint arrangements, due 
to the requirement for unanimous decision making in relation to a number of strategic matters contained in the 
shareholders agreements. Further, the Group does not have direct rights to the assets, and obligations for the liabilities of 
the entities. Investments in entities under joint control are accounted for in the consolidated financial statements using the 
equity method of accounting, after initially being recognised at cost. The Group's investment in entities under joint control 
includes goodwill (net of any accumulated impairment loss) identified on acquisition (refer to note 23). 

The Group’s share of the post-acquisition profits or losses and other comprehensive income of entities under joint control 
is recognised in the consolidated statement of comprehensive income. 

The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Dividends 
received or receivable from entities under joint control are recognised as a reduction in the carrying amount of the 
investment in the consolidated statement of financial position. 

When the Group's share of losses in an entity under joint control equals or exceeds its interest in the entity under joint 
control, including any other unsecured long-term receivables, the Group does not recognise further losses, unless it has 
incurred obligations or made payments on behalf of the entity under joint control. 

Unrealised gains on transactions between the Group and entities under joint control are eliminated to the extent of the 
Group's interest in the entities under joint control. Unrealised losses are also eliminated unless the transaction provides 
evidence of an impairment of the asset transferred. Accounting policies of entities under joint control have been changed 
where necessary to ensure consistency with the policies adopted by the Group. 

The carrying amounts of investments in entities under joint control is tested for impairment in accordance with the policy 
described in note 32(i). 

(iv) Changes in ownership interests 

The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with 
equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the 
controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the 
amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a separate 
‘transactions with non-controlling interests’ reserve within equity attributable to owners of Pinnacle Investment 
Management Group Limited. 

When the Group ceases to consolidate or equity account for an investment because of a loss of control, joint control or 
significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount 
recognised in the consolidated statement of comprehensive income. This fair value becomes the initial carrying amount for 
the purposes of subsequently accounting for the retained interest as an associate, entity under joint venture or financial 
asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are 
accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts 
previously recognised in other comprehensive income are reclassified to the consolidated statement of comprehensive 
income. 

If the ownership interest in an entity under joint control is reduced but joint control or significant influence is retained, 
only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or 
loss where appropriate. 

c)  Segment reporting 

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating 
decision maker. 

106 

Annual Report     

 
 
d)  Foreign currency translation 

(i)  Functional and presentation currency 

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary 
economic environment in which the entity operates (the ‘functional currency'). The consolidated financial statements are 
presented in Australian dollars, which is also the functional and presentation currency of all entities in the Group. 

(ii)  Transactions and balances 

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates 
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the 
translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised 
in the consolidated statement of comprehensive income. 

e)  Revenue recognition 

Revenue is measured at the fair value of the consideration received or receivable.  Amounts disclosed as revenue are net 
of amounts collected on behalf of third parties. The Group recognises revenue based on the principle that revenue is 
recognised when control of a good or service transfers to a customer.  

Revenue is recognised for the major business activities as follows: 

(i)  Service charges 

Revenue for providing services is recognised over time using the output method in the accounting period when the 
services are rendered. Fees are not recognised where there is a risk of significant revenue reversal. Where the contracts 
include multiple performance obligations, the transaction will be allocated based on the stand-alone selling prices. 
Consideration is payable when invoiced. 

(ii)  Interest received or due 

Interest income is recognised using the effective interest method. Interest income is calculated by applying the effective 
interest rate to the gross carrying amount of a financial asset except for financial assets that subsequently become credit-
impaired. For credit impaired financial assets, interest income is calculated by applying the effective interest rate to the net 
carrying amount of the financial asset (after deduction of the loss allowance). 

(iii) Dividends and distributions 

Dividends and distributions are recognised as revenue when the right to receive payment is established. This applies even 
if they are paid out of pre-acquisition profits. However, the investment may need to be tested for impairment as a 
consequence (refer to note 32(i)) 

f) 

Income tax 

The income tax expense or benefit for the period is the tax payable or receivable on the current period's taxable income 
based on the national 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 substantively enacted at the end of the 
reporting period in the countries where the Company's subsidiaries and entities under joint control operate and generate 
taxable income. 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 consolidated financial statements. However, deferred tax 
liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted 
for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the 
time of the transaction affects neither accounting nor taxable profit or loss.  

107 

Annual Report     

Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end 
of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred 
income tax liability is settled. 

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that 
future taxable amounts will be available to utilise those temporary differences and losses. 

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases 
of investments in controlled entities where the Company is able to control the timing of the reversal of the temporary 
differences and it is probable that the differences will not reverse in the foreseeable future. 

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, 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. 

(i)  Tax consolidation legislation 

Pinnacle Investment Management Group Limited and its wholly-owned Australian controlled entities have implemented 
the tax consolidation legislation. As a consequence, these entities are taxed as a single entity and the deferred tax assets 
and liabilities of these entities are set off in the consolidated statement of financial position. 

The head entity, Pinnacle Investment Management Group Limited, and the controlled entities in the tax consolidated 
group continue to account for their own current and deferred tax amounts. These tax amounts are measured as if each 
entity in the tax consolidated group continues to be a standalone taxpayer in its own right. 

In addition to its own current and deferred amounts, Pinnacle Investment Management Group Limited also recognises the 
current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed 
from controlled entities in the tax consolidated group. 

Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts 
receivable from or payable to other entities in the Group. Any difference between the amounts assumed and amounts 
receivable or payable under the tax funding agreement are recognised as a contribution to (or distribution from) wholly-
owned tax consolidated entities. Details about the tax funding agreement are disclosed in note 32(z)(ii). 

g)  Leases 

The Group leases offices in Brisbane and Sydney. Rental contracts are typically made for fixed periods of 3 – 5 years. The 
lease agreements do not impose any covenants. Until the current financial year, leases of property were classified as 
operating leases. Payments made under operating leases (net of any incentives received from the lessor) were charged to 
profit or loss on a straight-line basis over the period of the lease. 

Leases are recognized as a right-of-use asset and a corresponding liability at the date at which the leased asset is available 
for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to 
profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the 
liability for each period. The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term 
on a straight-line basis. 

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net 
present value of the following lease payments: 

 

 

 

 

 

fixed payments (including in-substance fixed payments), less any lease incentives receivable 

variable lease payments that are based on an index or a rate 

amounts expected to be payable by the lessee under residual value guarantees 

the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and 

payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that 
option. 

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Lease payments to be made under reasonably certain extension options are also included in the measurement of the 
liability. 

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the 
lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds 
necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions. 

To determine the incremental borrowing rate, the Group:  

  where possible, uses recent third-party financing received by the individual lessee as a starting point, 

adjusted to reflect changes in financing conditions since third party financing was received  

 

uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held 
by the Group, which does not have recent third party financing, and  

  makes adjustments specific to the lease, e.g. term, country, currency and security. 

Right-of-use assets are measured at cost comprising the following: 

 

 

 

 

the amount of the initial measurement of the lease liability 

any lease payments made at or before the commencement date, less any lease incentives received 

any initial direct costs, and 

restoration costs. 

h)  Business combinations 

The acquisition method of accounting is used to account for all business combinations, including business combinations 
involving entities or businesses under common control, regardless of whether equity instruments or other assets are 
acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair values of the assets 
transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also 
includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in 
the subsidiary. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and 
contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values 
at the acquisition date. On an acquisition by acquisition basis, the Group recognises any non-controlling interest in the 
acquiree either at fair value or at the non-controlling interest's proportionate share of the acquiree's net identifiable 
assets. 

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition 
date fair value of any previous equity interest in the acquiree over the fair value of the Group's share of the net identifiable 
assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the 
subsidiary acquired, the difference is recognised directly in the consolidated statement of comprehensive income as a 
bargain purchase. 

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their 
present value as at the date of exchange. The discount rate used is the Group’s incremental borrowing rate, being the rate 
at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions. 

Contingent consideration for a business combination is classified either as equity or a financial liability. Amounts classified 
as a financial liability are subsequently remeasured to fair value with changes in fair value recognised in the consolidated 
statement of comprehensive income. 

i) 

Impairment of non-financial assets 

Non-financial assets are tested for impairment whenever events or changes in circumstances indicate that the carrying 
amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount 
exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal and 
value-in-use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are 
separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets 
(cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible 
reversal of the impairment at the end of each reporting period. 

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j)  Cash and cash equivalents 

For the purpose of presentation in the consolidated statement of cash flows, cash and cash equivalents includes cash on 
hand, deposits held at call with financial institutions, and 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. 

k)  Trade receivables 

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective 
interest method, less loss allowance. Trade receivables are amounts due from customers for goods sold or services 
performed in the ordinary course of business. They are generally due for settlement within 30 days and therefore are all 
classified as current. Trade receivables are recognised initially at the amount of consideration that is unconditional unless 
they contain significant financing components, when they are recognised at fair value. The group holds the trade 
receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at 
amortised cost using the effective interest method. 

For trade receivables, the group applies the simplified approach permitted by AASB 9, which requires lifetime expected 
losses to be recognised from initial recognition of the receivables. The expected loss rates are based on the payment 
profiles of sales over a period of 36 months before the reporting date and the corresponding historical credit losses 
experienced within this period. The historical loss rates are also adjusted to reflect current and forward-looking 
information on factors affecting the ability of the customers to settle the receivables. 

Trade receivables are written off if there is no reasonable expectation of recovery. Indicators that there is no reasonable 
expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the group, and 
a failure to make contractual payments for a period of greater than 180 days past due. Impairment losses on trade 
receivables are presented as net impairment losses within operating profit. Subsequent recoveries of amounts previously 
written off are credited against the same line item. 

l) 

Investments and other financial assets 

Classification and measurement 

The classification and measurement of financial instruments is determined by the accounting standard AASB 9 Financial 
Instruments. AASB 9 Financial Instruments addresses the classification, measurement and derecognition of financial assets 
and liabilities, and is driven by the Group’s business model for managing the financial assets and the contractual cash flow 
characteristics of the financial instruments. 

In accordance with AASB 9 Financial Instruments: Recognition and Measurement, the Group's investments and other 
financial assets are categorised in one of the three categories: amortised cost, fair value through other comprehensive 
income and fair value through profit or loss. 

(i)  Financial assets at fair value through profit or loss 

Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this 
category if acquired principally for the purpose of selling in the short-term. Derivatives are also carried at fair value 
through profit or loss unless they are designated as hedges (see note 32(m) for further details about the types of derivates 
held).  

At initial recognition, the Group measures a financial instrument at fair value through profit or loss at its fair value. 
Transaction costs of financial assets and liabilities at fair value through profit or loss are expensed in the statement of 
comprehensive income. 

Subsequent to initial recognition, all financial assets at fair value through profit or loss are measured at fair value. Gains 
and losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are 
presented in the statement of comprehensive income within net gains/(losses) on financial instruments at fair value 
through profit or loss in the period in which they arise. 

Assets in this category are classified as current assets if they are expected to be settled within 12 months, otherwise they 
are classified as non-current. 

(ii)  Loans at amortised cost 

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A financial asset is classified at amortised cost if the objective of the business model is to hold the financial asset for the 
collection of the contractual cash flows and the contractual cash flows under the instrument represent solely payments of 
principal and interest (SPPI) on the principal outstanding. This comprises loans to joint associates (including Affiliate 
executives) which are included in other current and non-current assets within the statement of financial position. 

Loans are held for collection of contractual cash flows and the contractual cash flows under the instrument represent SPPI 
on the principal outstanding. Loans assets are measured initially at fair value plus transaction costs and subsequently at 
amortised cost using the effective interest rate method, less impairment losses if any. Such assets are reviewed at each 
reporting date to determine whether there is objective evidence of impairment. 

At each reporting date, the Group measures the loss allowance on loans at an amount equal to the lifetime expected credit 
losses if the credit risk has increased significantly since initial recognition. If, at the reporting date, the credit risk has not 
increased significantly since initial recognition, the Group shall measure the loss allowance at an amount equal to 12-
month expected credit losses. Significant financial difficulties of the counterparty, probability that the counterparty will 
enter bankruptcy or financial reorganisation, and default in payments are all considered indicators that a loss allowance 
may be required. If the credit risk increases to the point that it is considered to be credit impaired, interest income will be 
calculated based on the gross carrying amount adjusted for the loss allowance. 

The amount of the impairment loss is recognised in the statement of comprehensive income on a separate line item. When 
a loan receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it 
is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against 
other expenses in the statement of comprehensive income. 

Recognition and derecognition 

The Group recognises financial assets on the date it becomes party to the contractual agreement (trade date) and 
recognises changes in fair value of the financial assets from this date. 

Financial assets are derecognised when the right to receive cash flows from the investments has expired or the Group has 
transferred substantially all risks and rewards of ownership.  

m)  Derivative financial instruments 

Derivative instruments are initially recognised at fair value on the date a derivative contract is entered into and are 
subsequently remeasured to their fair value through profit and loss at each reporting date. Derivative instruments include 
equity futures, interest rate futures and equity options. 

The Group enters into transactions in certain derivative financial instruments which have certain risks. A derivative is a 
financial instrument or other contract which is settled at a future date and whose value changes in response to the change 
in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, 
credit rating or credit index or other variable. 

Derivative financial instruments require no initial net investment or an initial net investment that is smaller than would be 
required for other types of contracts that would be expected to have a similar response to changes in market factors. 

Derivative transactions include many different instruments such as forwards, futures and options. The Group uses 
derivatives to manage its exposure to equity investments held.  

The Group holds the following derivative instruments: 

Futures are contractual obligations to buy or sell financial instruments on a future date at a specified price established in 
an organised market. The futures contracts are collateralised by cash or marketable securities. Changes in futures 
contracts’ values are usually settled net daily with the exchange. 

n)  Property, plant and equipment 

All property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is 
directly attributable to the acquisition of the items. 

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when 
it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be 
measured reliably. All repairs and maintenance are charged to profit or loss during the reporting period in which they are 
incurred. 

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Annual Report     

Depreciation is calculated using the straight-line method to allocate their cost, net of their residual values, over their 
estimated useful lives or in the case of leasehold improvements, the shorter lease term as follows: 

- 

- 

- 

Plant and equipment 

Furniture and fittings 

2 - 5 years 

2 - 5 years 

Leasehold improvements 

3 - 10 years 

The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. 

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater 
than its estimated recoverable amount (note 32(i)). 

Gains and losses on disposal are determined by comparing proceeds with carrying amount. These are included in the 
consolidated statement of comprehensive income. 

o)  Intangible assets 

IT development and software  

Costs incurred in developing products or systems and acquiring software and licences that will contribute to future period 
financial benefits through revenue generation and/or cost reduction are capitalised to software and systems. The costs 
capitalised are external direct costs of materials and services, and where applicable the direct payroll and payroll related 
costs of employees' time spent on the project. Amortisation is calculated on a straight-line basis over periods generally 
ranging from 3 to 5 years from the point at which the asset is ready to use. 

IT development costs include only those costs directly attributable to the development phase that can be reliably 
measured and are only recognised following completion of technical feasibility and where the Group has an intention and 
ability to use the asset. 

Customer contracts 

Costs incurred which are directly associated with the acquisition of a customer contract, have been capitalized as an 
intangible asset and are being amortised over the agreement term of (3 years – 20 years). Amortisation is calculated on a 
straight-line basis over the contract term. 

p)  Trade and other payables 

These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which 
are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are 
presented as current liabilities unless payment is not due within 12 months after the reporting date. They are recognised 
initially at their fair value and subsequently measured at amortised cost using the effective interest method. 

q)  Borrowings 

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured 
at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is 
recognised in profit or loss over the period of the borrowings using the effective interest method.  

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or 
expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to 
another party and the consideration paid, including any noncash assets transferred or liabilities assumed, is recognised in 
profit or loss as other income or finance costs. 

Where the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor to extinguish 
all or part of the liability (debt for equity swap), a gain or loss is recognised in profit or loss, which is measured as the 
difference between the carrying amount of the financial liability and the fair value of the equity instruments issued. 

AASB101(69) Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement 
of the liability for at least 12 months after the reporting period. 

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Annual Report     

 
 
 
r)  Provisions 

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is 
probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. 
Provisions are not recognised for future operating losses. 

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is 
determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow 
with respect to any one item included in the same class of obligations may be small. 

Provisions are measured at the present value of management's best estimate of the expenditure required to settle the 
present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax 
rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase 
in the provision due to the passage of time is recognised as interest expense.  

s)  Employee benefits 

(i)  Short-term obligations 

Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled within 12 
months after the end of each reporting period in which the employees render the related service are recognised in respect 
of employees' services up to the end of the reporting period and are measured at the amounts expected to be paid when 
the liabilities are settled. The liability for annual leave is recognised in the provision for employee benefits. All other short-
term employee benefit obligations are presented as payables. 

(ii)  Other long-term employee benefit obligations 

The liabilities for long service leave and annual leave which are not expected to be settled wholly within 12 months after 
the end of the reporting period in which the employees render the related service are recognised in the provision for 
employee benefits. They are measured as the present value of expected future payments to be made in respect of services 
provided by employees up to the end of the reporting period using the projected unit credit method. Consideration is 
given to expected future wage and salary levels, experience of employee departures and periods of service. Expected 
future payments are discounted using market yields at the end of the reporting period on high quality corporate bonds 
with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. 
Remeasurement as a result of experience adjustments and changes in assumption are recognised in the consolidated 
statement of comprehensive income. 

The obligations are presented as current liabilities in the consolidated statement of financial position if the Group does not 
have an unconditional right to defer settlement for at least 12 months after the reporting period, regardless of when the 
actual settlement is expected to occur. 

(iii) Retirement benefit obligations 

Contributions to defined contribution funds are recognised as an employee benefits expense as they become payable. 
Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is 
available. The Group has no further payment obligations once the contributions have been paid. 

(iv) Share-based payments 

Share-based compensation benefits are provided to certain employees via the Pinnacle Investment Management Group 
Employee Option Share Plan, the Pinnacle Omnibus Plan and where applicable, Pinnacle long-term employee incentive 
agreements. Information relating to these schemes is set out in note 28. 

The fair value of options and rights granted under the plans is recognised as an employee benefits expense with a 
corresponding increase in share based payments reserve. The total amount to be expensed is determined by reference to 
the fair value of the options and rights granted, which includes any market performance conditions and the impact of any 
non-vesting conditions but excludes the impact of any service and non-market performance vesting conditions. 

Non-market performance vesting conditions are included in assumptions about the number of options that are expected to 
vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting 
conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of options and 
rights that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to 
original estimates, if any, in the consolidated statement of comprehensive income, with a corresponding adjustment to the 
share based payment reserve. 

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Annual Report     

The plan is administered by AET Structured Finance Services Pty Ltd, see note 32(b)(ii). When the options are exercised, the 
trust transfers the appropriate amount of shares to the employee. The proceeds received net of any directly attributable 
transaction costs are credited directly to equity.  

The fair value at grant date of the plans is determined using option pricing models that take into account the exercise 
price, the vesting period, the vesting and performance criteria, the impact of dilution, the share price at grant date, 
expected price volatility of the underlying share, the expected dividend yield, and the risk-free interest rate for the vesting 
period. 

(v)  Bonuses 

The Group recognises a liability and an expense for bonuses where contractually obliged or where there is a past practice 
that has created a constructive obligation. 

(vi) Termination benefits 

Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or 
when an employee accepts voluntary redundancy in exchange for these benefits. The group recognises termination 
benefits at the earlier of the following dates: (a) when the group can no longer withdraw the offer of those benefits; and 
(b) when the entity recognises costs for a restructuring that is within the scope of AASB 137 and involves the payment of 
terminations benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are 
measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after 
the end of the reporting period are discounted to present value. 

(vii)   Long-term employee incentive agreements 

The Group has long-term employee incentive schemes which enable certain employees of the Group, under full recourse 
and limited recourse loan arrangements, to acquire PNI shares. The schemes are designed to align the interests of the 
employees with those of shareholders. 

The fair value of the limited recourse loan arrangements under the long-term employee incentive schemes are recognised 
as an employee benefits expense with a corresponding increase in share-based payment reserve. The total amount to be 
expensed is determined by reference to the fair value of the limited recourse loan arrangements, which includes any 
market performance conditions and the impact of any non-vesting conditions but excludes the impact of any service and 
non-market performance vesting conditions. The total expense is recognised over the vesting period, which is the period 
over all of the specified vesting conditions are to be satisfied. The inflows and outflows associated with these 
arrangements are accounted for on a net basis, as the arrangements are expected to be settled net. 

Certain entities under joint control have similar incentive schemes and Pinnacle may provide cash funding to certain 
employees of these entities in order for the employees to acquire shares in the entities. Pinnacle accounts for these 
contributions as investments in entities under joint control. Remuneration of the employees is recorded in the entities 
under joint control and Pinnacle records its share of the profits or losses of these entities upon equity accounting. A liability 
is recorded to the extent that Pinnacle has a net obligation to the employee of a jointly-controlled entity under the 
employee contract. 

t)  Contributed equity 

Ordinary shares are classified as equity (note 16).  

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. 

u)  Dividends 

Provision is made for the amount of any dividend declared being appropriately authorised and no longer at the discretion 
of the Group, on or before the end of the reporting period but not distributed at the end of the reporting period. 

v)  Earnings per share 

(i)  Basic earnings per share 

Basic earnings after tax per share is calculated by dividing: 

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Annual Report     

 

 

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 (see note 16(d)). 

(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. 

w)  Goods and Services Tax (GST) 

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not 
recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part 
of the expense. 

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST 
recoverable from, or payable to, the taxation authority is included with other receivables or payables in the consolidated 
statement of financial position. 

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities 
which are recoverable from, or payable to, the taxation authority, are presented as operating cash flows. 

x)  Rounding of amounts 

The Company is of a kind referred to in ASIC Corporations (Rounding in Financial / Directors’ Reports) 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. 

y)  New accounting standards and interpretations not yet adopted 

Certain new accounting standards and interpretations have been published which are not mandatory for 30 June 2023 
reporting periods and have not been early adopted by the Group. These standards, amendments or interpretations are not 
expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future 
transactions. 

z)   Parent Entity financial information 

The financial information for the Parent Entity, Pinnacle Investment Management Group Limited, disclosed in note 24 has 
been prepared on the same basis as the consolidated financial statements, except as set out below. 

(i)  Investments in subsidiaries 

Investments in subsidiaries are accounted for at cost in the financial statements of Pinnacle Investment Management 
Group Limited.  

(ii)  Tax consolidation legislation 

Pinnacle Investment Management Group Limited and its wholly-owned Australian controlled entities have implemented 
the tax consolidation legislation – refer note 32(f)(i).  

The entities have entered into a tax funding agreement under which the wholly-owned entities fully compensate Pinnacle 
Investment Management Group Limited for any current tax payable assumed and are compensated by Pinnacle 
Investment Management Group Limited for any current tax receivable and deferred tax assets relating to unused tax losses 

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Annual Report     

or unused tax credits that are transferred to Pinnacle Investment Management Group Limited under the tax consolidation 
legislation. The funding amounts are determined by reference to the amounts recognised in the wholly-owned entities' 
financial statements. 

The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the 
head entity. The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax 
instalments. 

(iii) Share based payments 

The grant by the Parent Entity of options over its equity instruments to the employees of subsidiaries in the Group is 
treated as a capital contribution to that subsidiary. The fair value of employee services received, measured by reference to 
the grant date fair value, is recognised over the vesting period as an increase to investments in subsidiaries, with a 
corresponding credit to share based payment reserve. 

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09 

In the directors’ opinion: 

a)  the financial statements and notes set out on pages 56 to 116 are in accordance with the Corporations Act, including: 

(i) 

complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional 
reporting requirements, and 

(ii)  giving a true and fair view of the consolidated entity’s financial position as at 30 June 2023 and of its 

performance for the year ended on that date, and 

b)  there are reasonable grounds to believe that Pinnacle Investment Management Group Limited will be able to pay its 

debts as and when they become due and payable. 

Note 32(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 the declarations by the Managing Director and Chief Financial Officer required by section 
295A of the Corporations Act. 

This declaration is made in accordance with a resolution of the directors. 

Alan Watson, Chair 
Sydney, 2 August 2023 

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10 

118 

Annual Report

Independent auditor’s report 

To the members of Pinnacle Investment Management Group Limited 

Report on the audit of the financial report 

Our opinion 

In our opinion: 

The accompanying financial report of Pinnacle Investment Management Group Limited (the Company) 
and its controlled entities (together the Group) is in accordance with the Corporations Act 2001, 
including: 

(a) giving a true and fair view of the Group's financial position as at 30 June 2023 and of its financial

performance for the year then ended

(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.

What we have audited 
The Group financial report comprises: 

●
●
●
●
●
●

●

the consolidated statement of financial position
the consolidated statement of comprehensive income for the year then ended
the consolidated statement of profit or loss for the year then ended
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the notes to the consolidated financial statements, which include significant accounting policies
and other explanatory information
the directors’ declaration.

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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis 
for our opinion. 

Independence 
We are independent of the Group in accordance with the auditor independence requirements of the 
Corporations Act 2001 and the ethical requirements of the Accounting Professional & 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. 

PricewaterhouseCoopers, ABN 52 780 433 757 
480 Queen Street, BRISBANE  QLD  4000, GPO Box 150, BRISBANE  QLD  4001 
T: +61 7 3257 5000, F: +61 7 3257 5999 

Liability limited by a scheme approved under Professional Standards Legislation. 

11

 Annual Report

9

Our audit approach 

An audit is designed to provide reasonable assurance about whether the financial report is free from 
material misstatement. Misstatements may arise due to fraud or error. They are considered material if 
individually or in aggregate, they could reasonably be expected to influence the economic decisions of 
users taken on the basis of the financial report. 

We tailored the scope of our audit to ensure that we performed enough work to be able to give an 
opinion on the financial report as a whole, taking into account the geographic and management 
structure of the Group, its accounting processes and controls and the industry in which it operates. 

During the year, the Group held equity interests in fifteen affiliated fund managers (the Pinnacle 
Affiliates or Affiliates) with differing investment styles and offerings. The Group also provides 
distribution services, business support, and responsible entity services to the Pinnacle Affiliates and 
external parties via subsidiaries.  

The Group has minority shareholdings in the Pinnacle Affiliates and has assessed them to be joint 
ventures due to the requirement for unanimous decision making in relation to a number of strategic 
matters contained in the shareholders agreements. The financial results of the Group include the 
consolidation of subsidiaries and the share of net profit of associates and joint ventures accounted for 
using the equity method for the Pinnacle Affiliates. 

Materiality 

●

For the purpose of our audit we used overall Group materiality of $3,800,000 which represents
approximately 5% of the Group’s profit before tax from continuing operations.

● We applied this threshold, together with qualitative considerations, to determine the scope of

our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of
misstatements on the financial report as a whole.

● We chose Group profit before tax because, in our view, it is the benchmark against which the

performance of the Group is most commonly measured.

● We utilised a 5% threshold based on our professional judgement, noting it is within the range of

commonly acceptable thresholds.

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20

Audit scope 

● Our audit focused on where the Group made subjective judgements; for example, significant

accounting estimates involving assumptions and inherently uncertain future events.

● We audited the most financially significant subsidiaries within the Group, being Pinnacle

Investment Management Limited, Pinnacle Funds Services Limited, Pinnacle Services
Administration Pty Ltd and Pinnacle RE Services Limited. We performed targeted audit
procedures over the remaining significant balances and further audit procedures over the
consolidation process.

● We, or component auditors, performed an audit of each of the financially significant Pinnacle

Affiliates on a standalone basis. In establishing the overall approach to the Group audit, we
considered the type of work that needed to be performed by us, as the Group’s auditor, or by
the component auditors operating under our instructions.

● We audited the Group’s equity accounting for the Pinnacle Affiliates, including the Group’s
share of net profit of jointly controlled associates and joint ventures accounted for using the
equity method and the Group’s investments accounted for using the equity method recognised
in the Group financial statements.

Key audit matters 

Amongst other relevant topics, we communicated the following key audit matter to the Audit, 
Compliance and Risk Management Committee: 

• Share of net profit of associates and joint ventures accounted for using the equity method

This is further described in the Key audit matters section below.

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 current period. The key audit matter was 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. Further, any commentary on the outcomes of a 
particular audit procedure is made in that context.  

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Key audit matter 

How our audit addressed the key audit matter 

Share of net profit of associates and 
joint ventures accounted for using 
the equity method  

Refer to note 23(d) - $67,359k 

The share of net profit of associates and 
joint ventures accounted for using the 
equity method is calculated by reference 
to Pinnacle’s share of each Affiliate’s net 
profit for the year.  

Pinnacle Affiliates’ funds under 
management have the potential to earn 
performance fees, based on an 
assessment of actual performance 
relative to benchmarks. These 
benchmarks are agreed between the 
Affiliates and their clients and are set out 
in relevant Product Offering Documents 
and Investment Services Agreements.  

The performance fee revenue has a 
significant impact on Pinnacle’s share of 
net profits of jointly controlled associates 
and joint ventures accounted using the 
equity method.  

This was a key audit matter because the 
share of net profit of associates and joint 
ventures accounted for using the equity 
method is material, and the performance 
fee revenues recognised by Pinnacle 
Affiliates are material in nature, and the 
variability of returns can be significant 
depending on the performance relative 
to contractual benchmarks.  

We performed the following procedures, amongst 
others: 

● For a sample of Pinnacle Affiliates, we

● Obtained supporting evidence for a sample
of changes in Pinnacle’s equity ownership
during the year.

● Obtained the share registers of the Affiliates
and recalculated Pinnacle’s ownership
percentage.

● Obtained the Affiliates’ profit and loss

statement and recalculated Pinnacle’s share
of net profit.

●

Assessed whether the accounting policies
across the Group were reasonable and
consistent.

● For a sample of performance fees recorded by
Pinnacle Affiliates, we obtained the relevant
source documents and:

●

●

Assessed whether the calculation
methodologies used by management were
in accordance with the contractual
arrangements, the Group accounting policy
and requirements of Australian Accounting
Standards.

Compared the hurdle rates and any
accumulated deficiency clauses to the
relevant contracts.

● Obtained evidence from relevant external
sources to assess key inputs into the
calculations (for example net asset values
and fund returns).

●

Reperformed the performance fee
calculation with reference to the key inputs
used in the calculations.

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Other information 

The directors are responsible for the other information. The other information comprises the 
information included in the 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 on the other information that we obtained prior to the date of 
this auditor’s report, 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 Group 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 Group 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 the financial report. 

A further description of our responsibilities for the audit of the financial report is located at the Auditing 
and Assurance Standards Board website at: 
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our 
auditor's report. 

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Report on the remuneration report 

Our opinion on the remuneration report 

We have audited the remuneration report included in pages 29 to 49 of the directors’ report for the 
year ended 30 June 2023. 

In our opinion, the remuneration report of Pinnacle Investment Management Group Limited for the 
year ended 30 June 2023 complies with section 300A of the Corporations Act 2001. 

Responsibilities 

The directors of the Company are responsible for the preparation and presentation of the 
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility 
is to express an opinion on the remuneration report, based on our audit conducted in accordance with 
Australian Auditing Standards.  

PricewaterhouseCoopers 

Ben Woodbridge 
Partner 

Brisbane 
2 August 2023 

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11 

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Annual Report

The shareholder information set out below is correct as at 27 July 2023.  

Shares on issue 

Distribution of securities 

Range 

1 – 1,000 

1,001 – 5,000 

5,001 – 10,000 

10,001 – 100,000 

100,001 – 9,999,999,999 

Rounding 

Total 

No. of shareholders 

No. of shares 

% of issued 
shares 

3,574 

2,570 

621 

563 

112 

1,455,845 

6,409,561 

4,487,714 

14,917,599 

0.72 

3.19 

2.23 

7.42 

173,897,372 

86.44 

0.00 

7,440 

201,168,091 

100.00 

Unmarketable parcels 

Minimum $500 parcel at $10.58 per unit 

48 

301 

3610 

Minimum parcel size 

No. of shareholders 

No. of shares 

Twenty largest shareholders (as at 27 July 2023) 

Rank 

Name 

HSBC Custody Nominees (Australia) Limited  

No. of shares 

% of issued 
shares 

41,761,406 

20.76 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

J P Morgan Nominees Australia Pty Limited 

21,573,524 

10.72 

 Citicorp Nominees Pty Limited  

Macoun Generation Z Pty Ltd 

National Nominees Limited  

Andrew Chambers & Fleur Chambers  

Mr Alexander William Macdonald  

Macoun Superannuation Pty Ltd  

BNP Paribas Noms Pty Ltd 

HSBC Custody Nominees (Australia) Limited  

Mr David Francis Cleary  

14,665,698 

13,993,985 

6,258,516  

7.29 

6.96 

3.11 

5,303,614 

2.64 

5,045,090  

3,882,092  

3,707,535  

3,017,882  

2,807,149 

2.51 

1.93 

1.84 

1.50 

1.40 

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Annual Report     

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rank 

Name 

No. of shares 

% of issued 
shares 

12 

13 

14 

15 

16 

17 

18 

19 

20 

Mr David Noel Groth 

Vestinoz Pty Ltd  

Earlston Nominees Pty Ltd  

Kinauld Pty Ltd  

Mr Mark Bryant Cormack and Mrs Melanie Louise Cormack  

Warragai Investments Pty Ltd  

Kinauld Pty Ltd  

Ms Alison Jane Fraser 

Mr Adrian Whittingham  

Total 

Total remaining holders balance 

2,801,224 

2,752,766  

2,450,000 

2,000,000 

1,999,293 

1,950,000 

1,900,000 

1,346,657 

 1,228,614  

1.39 

1.37 

1.22 

0.99 

0.99 

0.97 

0.94 

0.67 

0.61 

140,445,045 

69.81% 

60,723,046 

30.19% 

The names of the shareholders who have notified the Company of a substantial holding in accordance with section 671B of 
the Corporations Act are: 

Substantial shareholder 

Steve Wilson and associates 

Ian Macoun and associates 

Ethical Partners Funds Management Pty Ltd  

No. of shares 

% of shares 

22,640,240   

11.25 

18,276,077 

9.1% 

10,604,041 

5.27% 

Voting rights 

Upon a poll each share shall have one vote. 

Options and performance rights on issue 

Distribution of securities 

Options 

There are 800,000 options on issue as at 27 July 2023. 

The options are held by:  

A&T Structured Finance Services Pty Ltd as trustee for the Pinnacle Investment Management Group Employee Option 
Share Plan; 

Alison Maschmeyer;  

Ben Cossey; and  

David Batty. 

The options are not listed. 

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Performance rights 

There are no performance rights on issue as at 27 July 2023.  

Voting rights 

There are no voting rights attaching to the options. 

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12 

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Pinnacle Investment Management Group Limited 

Incorporated in Queensland on 23 April 2002 

ABN 

22 100 325 184 

Directors 

Alan Watson,  
Chair (appointed director 15 July 2013, appointed Chair 23 October 
2015) 

Ian Macoun,  
Managing Director (appointed MD 17 August 2016; appointed 
director 25 August 2016) 

Deborah Beale AM (appointed 1 September 2016) 
Lorraine Berends (appointed 1 September 2018) 
Andrew Chambers (appointed 1 September 2016) 

Chief Legal and Commercial Officer 
 and Company Secretary 

Calvin Kwok 

Chief Financial Officer 

Dan Longan 

Share Registry 

Computershare Investor Services Pty Limited  
Level 1, 200 Mary Street 
Brisbane QLD 4000  
Telephone 1300 850 505 

ASX Code 

PNI 

Shares are listed on the Australian Securities Exchange. 

Bankers 

Commonwealth Bank of Australia 
240 Queen Street,  
Brisbane QLD 4000  

Auditor 

PricewaterhouseCoopers 
480 Queen Street,  
Brisbane QLD 4000 

Australia 

Brisbane 
Registered Office 
Level 19, 307 Queen Street 
Brisbane QLD 400 
Telephone 1300 651 577 

Sydney 
Level 25, 264 George Street  
Sydney NSW 2000 
Telephone 1300 651 577 

Melbourne 
Level 8, 90 Collins Street 
Melbourne VIC 3000 

United Kingdom 

London 
Floor 8, 125 Old Broad St 
London EC2N 1AR 

Canada 

Toronto 
7th Floor 
30A Hazelton Ave Suite 400 
Toronto, ON M5R 2E2 

United States 

New York 
Office 1146  
One Rockefeller Plaza 
11th floor 
New York, NY 10020 

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Website address 
www.pinnacleinvestment.com 

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