ABN 74 606 695 854
For the year ended 30 June 2019
Annual report
Contents
Page
1
2
8
16
17
18
19
20
21
39
40
45
46
Chairman's Letter to Shareholders
Investment Manager's Report
Directors' Report
Auditor's Independence Declaration
Statement of Profit or Loss and Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors' Declaration
Independent Audit Report to the Members
Top 20 Shareholders
Corporate Directory
ii
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019 Chairman’s Letter to Shareholders
Dear fellow Shareholders,
In keeping with previous years, I would like to again take the
opportunity to remind Shareholders of what we are setting out to
achieve. Our aim is to provide you with a concentrated portfolio
of securities that are undervalued and under appreciated by the
market. We have no interest in building a portfolio that tracks
commonly used benchmarks, but to instead, focus on investing
in outstanding opportunities. We believe that our disciplined and
patient approach will deliver strong absolute risk-adjusted returns
over the long term, whilst preserving shareholder capital.
Ryder Capital Limited, (Ryder or Company) has had another
successful year, its third full financial year since being established
in September 2015. Portfolio performance remained positive
but lower than the prior period resulting in total comprehensive
income after tax decreasing to $3,086,827 from $10,801,804.
Gross portfolio performance of 5.78%, fell short of the Company’s
performance benchmark and that of the Company’s medium to
longer term target after what was a more difficult year investing in
smaller capitalised stocks. It is important to understand that our
longer term investment return targets will from time to time be
interrupted by periods of lower returns.
During the year, the Manager sold several long-term investments
from the portfolio on valuation grounds, realising material gains
which are reflected in the Company’s distributable profits reserve
increasing by $8,040,054 from $3,384,226 to $11,424,280 or 19.23
cents per share.
At 30 June 2019 approximately 75.5% of the Company’s capital
was deployed in equities and 24.5% held in cash, term deposits or
other liquid investments.
During the year, 22,511,173 of the Company’s Initial Options
(RYDO) were exercised at $1.25 adding $28,138,966 to the
Company’s capital. Balancing this the Company was able to
buyback 3,312,297 ordinary shares for an outlay of $3,996,449
equating to an average buyback price of $1.2065 per share,
providing both accretion to the Company’s NTA and the
dilutionary impact of option capital inflows. In accordance with
the terms of the Company’s 2015 Prospectus, the Company issued
a total of 26,732,673 $1.50 strike, December 2021 expiry Secondary
Options (RYDOA) as a function of the exercise of the equivalent
amount of RYDO Options during FY18 and FY19.
In reviewing the Company’s investment performance for FY19,
it is important to account for the material option dilution that
occurred during the year, and as such we focus on measuring the
Company’s pre-tax undiluted NTA period to period, adjusted for
dividends which resulted in a gain of 3.84%. This return and that
of the Company’s diluted pre-tax NTA together with a detailed
portfolio disclosure, discussion, performance and risk analysis is
presented in the Investment Manager’s Report which I encourage
you to read.
The Company’s share price was unchanged during the year,
closing at $1.25. Inclusive of the $0.03 fully franked dividends paid,
resulted in a small return of 2.4%, compared to the undiluted pre-
tax return of 3.84%.
It remains disappointing to me and your fellow Directors to see
the share price trade at a consistent discount to NTA. I strongly
believe that over time, the Company’s discount to NTA will narrow
as a consequence of medium term risk-adjusted outperformance
of not only the Company’s benchmarks, but also alternative
managers and a more stable capital structure post the expiry
of the Company’s Initial Options (in December 2018). It is worth
noting that the prospective exercise of Secondary Options
(RYDOA) will have a substantially less dilutionary impact on the
Company’s expanded capital base and as such should be less of
a drag on both NTA and share price performance in the coming
years.
The Manager remains strongly aligned to perform in two ways.
Firstly, through a performance incentive to increase the value of
the Company’s portfolio above an absolute return benchmark
(RBA cash rate + 4.25%). For the year ended FY19, the Company’s
portfolio underperformed the performance benchmark, as a
result the Manager did not receive a performance fee for the
year. Importantly, the underperformance was marginal with an
immaterial performance make up for FY20, thereby ensuring this
important element of alignment remains in place. The second
critical alignment measure is that both David and I are the largest
shareholders in the Company, and larger than when we last
reported to you having exercised Initial Options in the Company at
$1.25 during the year. This level of alignment ensures a continued,
very high level of discipline in regard to the management of
the portfolio, stock selection and the performance of both the
Company and its share price.
The Company enters FY20 in a strong position with a portfolio of
investments expected to perform well over the near and medium
term. Cash and equivalents are currently at the higher end of our
targeted weighting at approximately 24.5% providing the Manager
substantial flexibility to capitalise on opportunities as they arise.
Following continued positive investment performance, large
realised capital gains flowing through to the profits reserve
together with a positive start and outlook to FY20, the Board
declared a 3.0 cent fully franked final dividend (+50% on FY18),
bringing the full year FY19 dividend to 5.0 cents per share fully
franked.
The Annual General Meeting (AGM) will be held in Sydney on
22 October 2019 where the formal business of the Company
will be conducted. At the AGM there will be an opportunity for
Shareholders to ask questions regarding the investment portfolio,
investment markets and the outlook for the Company at that time.
Finally, I would like to thank all Shareholders for their continued
support, and I look forward to seeing you at our AGM.
Yours faithfully,
Peter Constable
Chairman
1
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019 Investment Manager's Report
For the year to 30 June 2019 (FY19) gross portfolio performance was a positive 5.78%. This return was achieved whilst holding an
average cash balance of approximately 23.3%. It should be noted that these returns exclude the various costs associated with running
and administering the Company, such as management and performance fees, ASX listing fees and other third-party expenses as stated
in the Annual Report.
Set out in the table below is the Company’s Gross Portfolio Performance and pre-tax undiluted net tangible assets (NTA) performance(3)
to 30 June 2019 which takes into account the dilution of pre-tax NTA caused by the exercise of 22.5m options, net of capital bought
back during the period via the Company’s share buyback.
3 Months
(%)
6 Months
(%)
1 Year
(%)
3 Years
(% per annum)
Since Inception(2)
(%)
Since Inception(2)
(% per annum)
19.37
14.89
12.51
5.84
Gross Portfolio Performance
6.88
13.00
5.78
25.10
NTA Return (Pre-tax Undiluted)(3)
6.55
12.14
3.84
19.78
NTA Return (Pre Tax)(1)
6.72
12.31
-1.92
16.65
94.94
68.78
55.93
Hurdle
RBA Cash Rate + 4.25% Return
Excess Return
NTA Return (Pre-tax Undiluted)(3) -
RBA Cash Rate + 4.25%(4)
1.39
2.79
5.73
5.75
23.87
5.17
9.35
-1.88
14.02
44.90
9.05
1. Unaudited investment performance less all costs of operating Ryder Capital Ltd including investment management and performance fees including the dilutionary impact of options exercised to date and ignoring the dilutionary
impact of unexercised outstanding RYDOA options.
2. Inception Date is 22 September 2015.
3. Pre-tax NTA return adjusted for the dilution of the exercised 26.7m RYDO options.
4. Excess Return will be calculated with reference to undiluted NTA return as of February 2019 to better reflect underlying fund performance consistent with the Manager’s performance measurement.
This report is focussed on portfolio performance, however it is important to reinforce that Shareholders should review performance at
both the portfolio (Gross Portfolio Performance) and Company (pre-tax undiluted NTA return) levels adjusted for any dividends or other
distributions for the Company during the reporting period.
As in previous years, we note that some of our peers continue to present “gross” portfolio returns for the purposes of measuring
investment performance and in some cases further exaggerate these returns by grossing up for franked income received. We consider
these practices to be misleading for the investor as they artificially inflate returns by excluding the fees and expenses incurred in
achieving their returns and as such comparing them to ours is not meaningful.
We encourage Shareholders to focus on the net movement in Ryder’s pre-tax undiluted NTA from period to period and compare those
returns to that of cash and other relevant equity market indices as per below.
Annual Returns to 30 June 2019
1 year
(%)
3 years
(% per annum)
Since Inception(2)
(% per annum)
Ryder Capital - Gross Portfolio Performance
Ryder Capital (Pre-tax undiluted NTA)(3)
Ryder Capital (Pre-tax NTA)(1)
S&P / ASX All Ordinaries Accumulation
S&P / ASX Small Ordinaries Accumulation
RBA Cash Rate
Ryder Capital Ltd Hurdle Rate
Source: Bloomberg + Mainstream
5.78
3.84
-1.92
11.04
1.92
1.48
5.73
25.10
19.78
16.65
12.62
10.66
1.50
5.75
19.37
14.89
12.51
12.33
13.60
1.59
5.84
1. Unaudited investment performance less all costs of operating Ryder Capital Ltd including investment management and performance fees including the dilutionary impact of options exercised to date and ignoring the dilutionary impact
of unexercised outstanding RYDOA options.
2. Inception Date is 22 September 2015.
3. Pre-tax NTA return adjusted for the dilution of the exercised 26.7m RYDO options.
4. Excess Return will be calculated with reference to undiluted NTA return as of February 2019 to better reflect underlying fund performance consistent with the Manager’s performance measurement
2
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Investment Manager's Report
Ticker
Total Value ($)
Total (%)
UPD
SRG
CDA
NXT
MAH
2BE
PEA
FXL
BCI
MCP
COI
JMS
MCE
VEE
UBN
VTG
AMI
CAJ
ALG
BET
9,621,292
8,696,380
6,565,375
6,490,000
4,804,368
4,725,000
4,393,417
3,668,066
2,652,467
2,340,486
2,260,536
1,897,500
1,755,323
1,131,872
1,089,489
950,062
944,663
907,248
810,629
722,551
1,080,031
67,506,755
21,871,808
89,378,563
10.76
9.73
7.35
7.26
5.38
5.29
4.92
4.10
2.97
2.62
2.53
2.12
1.96
1.27
1.22
1.06
1.06
1.02
0.91
0.81
1.21
75.53
24.47
100.00
Portfolio – 30 June 2019
Name
Updater Inc
SRG Global Ltd
Codan Ltd
NextDC Ltd
MacMahon Holdings Ltd
Tubi Ltd
Pacific Energy Ltd
Flexigroup Ltd
BCI Minerals Ltd
McPherson's Ltd
Comet Ridge Ltd
Jupiter Mines Ltd
Matrix Composites & Engineering Ltd
Veem Ltd
Urbanise.com Ltd
Vita Group Ltd
Aurelia Metals Ltd
Capitol Health Ltd
Ardent Leisure Group Ltd
Betmakers Technology Group Ltd
Other Equities
Total Equities
Cash and Term Deposits
Total Portfolio Pre Tax
Portfolio Performance
Overall, gross portfolio performance for the period of 5.78% fell short of our performance hurdle and that of historical returns since inception.
Capital gains and investment income were offset by material mark to market falls from our large exposure in key long-term holdings Updater
Inc. and NextDC Ltd. Amplifying this performance drag has been our bias to a value approach of investing and subsequent lack of ownership
of the much vaunted technology highflyers, growth and other large capitalised stocks that have collectively delivered much of the market’s
recent strong performance.
We have stuck to our knitting, maintaining relatively low portfolio turnover while adhering to our risk and return thresholds.
For FY19 the portfolio generated $9,364,949 of capital gains (realised and unrealised) which were offset by capital losses (realised and
unrealised) of $5,887,337 resulting in a net capital gain before interest and dividend income of $3,477,612 for the year.
Dividend income received for FY19 was $1,382,725 fully franked, while interest income received on term deposits and cash was $356,647.
At 30 June 2019, approximately 75.5% of the Company’s capital was in equities with approximately 24.5% held in cash, term deposits and
net receivables.
3
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019 Aurelia Metals Ltd
Bigtincan Holdings Ltd
Codan Ltd
Investment Manager's Report
FY19 Top 3 Contributors and Detractors
Matrix Composites & Engineering Ltd
NEXTDC Ltd
Updater Inc
$(2,000,000)
$(1,000,000)
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
The portfolios top three contributors to performance during the period came from Aurelia Metals Ltd, Bigtincan Holdings Ltd and
Codan Ltd – all realised at the time of writing this report. The three largest detractors for the period came from Updater Inc, NextDC Ltd
and Matrix Composites & Engineering Ltd – all are currently unrealised mark to market losses for the reporting period.
Portfolio Activity
During the year we all but exited our largest investment in Aurelia Metals Ltd on valuation grounds, selling ~90% of our holding
at prices averaging over $0.90 per share, resulting in a material capital profit being realised. Our long held position in Codan Ltd
which has performed well over many years of ownership recently reached a price that exceeded our valuation for this business and
as such we have at the time of writing this report sold our holding, again realising a large capital profit. Finally, we sold out of our
holding in sales enablement software business Bigtincan Holdings Ltd at prices averaging ~$0.50 on both valuation grounds and a
weakening conviction.
Additional exposure was acquired in Updater Inc (during the delisting period at prices around our carrying value of $0.995 per CDI),
SRG Global Ltd, Pacific Energy Ltd and NextDC Ltd, all on valuation grounds. New additions during the period were McMahon
Holdings Ltd, McPhersons Ltd and Tubi Ltd.
Portfolio Strike Rate
Shareholders will recall our interest in following Strike Rate analysis. In prior years we have presented a consistent yet somewhat
imperfect analysis that looks at both realised and unrealised profits against realised and unrealised losses on the portfolio during a
given period. Now, with the portfolio having completed its third full financial year and almost fourth year since inception and some of
our longer-term positions being realised, we can revert to a more meaningful construct of this analysis on a cumulative, since inception
realised profits only basis. This will now be the basis of all Strike Rate analysis in the future.
Strike Rate Analysis – Inception to Date (30 June 2019)
Strike Rate Analysis
Gross Realised Portfolio Profits
Gross Realised Portfolio Losses
Net Realised Portfolio Profit
Win/Loss
Strike Rate
Portfolio
$22,152,257
-$4,533,123
$17,619,134
79.54%
4.89
Note: ignores dividends, interest, taxes and expenses and relies on unaudited management analysis
4
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019 Investment Manager's Report
Referring to the analysis above, the portfolio segment identifies the portfolio’s gross realised profits since inception to 30 June 2019 of
$22,152,257 compared to the portfolio’s gross realised losses since inception of ($4,533,123). The net of these results is a net realised
portfolio profit since inception of $17,619,134.
Observing the above, we note that:
1.
the net realised portfolio profit of $17,619,134 is 79.54% of the gross realised portfolio profit of $22,152,257, that is we
retained ~79.54% of gains, or thinking of it as a decision ratio, our poor decisions eroded our successful decisions by
approximately 20.46%; and
2.
that total profits divided by total losses for the period (since inception to 30 June 2019) has been 4.89x, indicating that for
every $4.89 profit made, $1.00 was lost.
Risk Adjusted Returns & Relative NTA Performance
At the risk of stating the obvious, not all investment returns are equal - some returns are achieved by taking significantly greater or less
risk than other returns. Our goal at Ryder is to achieve medium to long term returns above the Company’s hurdle of RBA Cash rate +
4.25% while minimising risk. To measure this, we need to establish and analyse the relationship between risk and return.
Investment risk is commonly measured using the standard deviation of returns over time from the mean return of an asset or in our
case Ryder’s pre-tax undiluted NTA return. The higher the standard deviation (think volatility) the riskier the underlying investment and/
or strategy. Having additional risk is of course acceptable, provided additional returns are earnt to compensate for that additional risk,
with the opposite relationship applicable for lower standard deviations requiring lower returns. Typically, the two travel together, that is
risk and return correlate over time.
There are two commonly accepted ratios for analysing risk and return, the first being the Sharpe Ratio (excess return over a benchmark
divided by standard deviation of return over time). Simply put excess return divided by volatility (standard deviation or risk). The Sharpe
ratio measures excess return per unit of risk, including both downside and upside volatility. The second ratio is a variant on the Sharpe
Ratio, called the Sortino Ratio which is similar to the Sharpe ratio except that it only looks at downside standard deviation, i.e. downside
volatility with respect to a specified benchmark, the most commonly used being the cash rate. This would be the most appropriate
measure to consider since upside volatility is what investors seek to target, i.e. positive returns and therefore upside volatility should not
be taken into account the same way as downside volatility. The Sortino ratio measures excess return per unit of downside risk only, a
greater amount of consistent positive monthly performance compared to negative performance over time will result in a higher Sortino
ratio value.
The below table sets out Ryder's Sharpe and Sortino ratios and those of two ASX market indices for comparator purposes:
Ryder
Small Ords
Accumulation Index
All Ords
Accumulation Index
Sharpe
ratio
Sortino
ratio
1 year
2 years
3 years
ITD
1 year
2 years
3 years
ITD
0.26
1.22
1.59
1.22
0.40
3.10
4.31
2.86
0.03
0.90
0.76
0.99
0.04
1.33
1.16
1.57
0.85
1.18
1.22
1.12
1.25
1.77
1.96
1.75
5
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019 Investment Manager's Report
Ryder’s Sharpe and Sortino ratios demonstrate superior medium term risk adjusted investment returns than the comparator ASX
market indices. Of particular note is our strong Sortino ratio which is logical given we have a value bias (stocks perform better in
a negative market) and we consistently hold relatively large amounts of cash, dampening downside risk/volatility. In summary, the
positive Sortino ratio above comparator demonstrates Ryder's ability to deliver outperformance with less risk.
Further to the above, we have also taken the opportunity to illustrate how Ryder has performed on a pre-tax undiluted basis versus
its peers (44 other ASX Listed Investment Companies (LIC) from the Macquarie Research and Morningstar universe). Note some
funds have been excluded as the data does not allow for meaningful comparison due to factors such as period of operation (fund
commenced after September 2015), fund strategy, fund size and data integrity. This analysis is a little imperfect as each fund pursues
slightly different strategies, however the one common goal for each fund and manager is to generate the highest available return per
unit of risk over time. As such, analysing each LIC’s relative returns, Sharpe and Sortino ratios is instructive when reviewing absolute
and comparative performance over time.
Set out below are Ryder’s Since Inception (Sept 2015) to Date (ITD) returns, Sharpe and Sortino ratios in comparison to 44 other ASX
LIC’s (also using an inception date of September 2015).
Total Return ITD (annualised)
20.00%
15.00%
10.00%
5.00%
0.00%
-5.00%
-10.00%
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
-0.20
-0.40
-0.60
6
N S C
M
C D
A LF
G V F
PIA
P A F
T G G
G C1
P M C
N C C
CIE
CIN
E GI
W A A
E AI
P AI
P G F
Q V E
B TI
F G X
H
A M
B KI
W A M
PIC
W A X
E G F
F G G
M IR
DJ W
H F
A LI
W
M LT
A R G
A FI
O Z G
W IC
C V F
C LF
A UI
A C Q
D UI
T O P
R Y D
M FF
ITD Sharpe ratio (1.5% benchmark)
M
N S C
C D
A LF
P A F
G C1
T G G
PIA
P G F
P M C
N C C
E AI
G V F
E GI
CIN
P AI
C EI
B TI
O Z G
H
B KI
A M
H F
DJ W
W
W A A
M IR
W A X
C LF
Q V E
E G F
C V F
F G X
A LI
W IC
M LT
PIC
F G G
W A M
A FI
A R G
A C Q
A UI
T O P
M FF
D UI
R Y D
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019 Investment Manager's Report
ITD Sortino ratio (1.5% benchmark)
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
-0.50
-1.00
M
N S C
C D
A LF
G C1
P A F
T G G
PIA
P G F
P M C
N C C
E AI
E GI
CIN
G V F
CIE
H
P AI
A M
B KI
O Z G
H F
W
W A X
M IR
DJ W
W A A
F G X
E G F
C LF
Q V E
B TI
M LT
W A M
A LI
PIC
W IC
F G G
C V F
A FI
A R G
T O P
A UI
M FF
A C Q
D UI
R Y D
1. Total ITD returns are calculated during the period of 30 Sep 2015 to 30 June 2019 using monthly pre-tax NTA values including dividends (excluding franking) and adjusted for the dilutionary impact of options exercised resulting in
an increase in issued capital by 5% or greater during the period
2. Funds included in this analysis are only a selection of Listed Investment Companies (LIC) on the ASX and are intended to form a representative sample of LICs based on strategy, size and past performance
3. Sharpe ratio is calculated as excess total ITD return (annualised) above the risk free rate (1.5% p.a.) divided by standard deviation of monthly returns (annualised)
4. Sortino ratio is calculated as excess total ITD return (annualised) above the risk free rate (1.5% p.a.) divided by downside deviation of monthly returns (annualised), using a benchmark of 1.5% p.a.
Ryder has performed both absolutely and relatively well, only bettered by the investment performance of MFF Capital Investments Ltd
which has benefited from being predominately invested in US equities during a period of relative AU equity underperformance.
Outlook
After a volatile period for equities late last calendar year in response to a tightening US monetary policy environment, markets are
now grinding higher as the US Federal Reserve adjusts its outlook on further monetary tightening, indicating they now stand ready to
ease policy if growth falters. This change in policy stance has driven global interest rates meaningfully lower, supporting equity market
valuations and in some cases, inflating already overpriced assets further. However, more recently with the escalation in global geo
political risk, in particular the US and China trade issues, we are of the opinion that we are pushing closer to a material negative market
event, without line of sight of exactly how close we are, forming the basis of our increasingly cautionary stance.
Subject to markets not unravelling, together with the strong start in July we anticipate an improved year from the portfolio as a number
of larger positions continue to make solid operational progress not yet reflected in their respective share price values while a number of
newer positions have been acquired at what we assess as material discounts to their intrinsic worth.
Overall, we remain cautiously positioned, holding approximately 24.5% cash with a portfolio of sound value biased investments.
Peter Constable
Chief Investment Officer / Portfolio Manager
David Bottomley
Portfolio Manager
7
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019 Directors' Report
Your directors present their report on Ryder Capital Limited ("Company") for the year ended 30 June 2019.
Information on directors
The following persons were directors of the Company from registration date and up to the date of this report (unless otherwise indicated):
Peter Constable - BEc
Chairman
Experience and Expertise
Peter has over 25 years’ experience in both Australian and international equity capital markets. He holds a Bachelor of Economics from
Macquarie University and has broad investment experience covering identification, evaluation, strategic analysis and management
of capital.
Peter began his career in 1993 as a graduate funds manager with the United Bank of Kuwait, London. Peter established AM Constable
Limited in 1999 which merged with MMC Asset Management Ltd in 2003 (MMC). In his capacity as Chief Investment Officer and
Executive Director Peter was responsible for over $500m of shareholder and third party capital invested in the Australian markets. Peter
resigned in June 2008 as an Executive and as a Non-Executive Director of MMC Contrarian Ltd in August 2009.
Peter co-founded Ryder Investment Management in July 2008 where he is Chairman and Chief Investment Officer.
Other Current Directorships
Peter is not currently serving a directorship for any other listed companies.
Former directorships in the last 3 years
Nil.
Special responsibilities
Chairman of the Board, member of the Nomination and Corporate Governance Committee, member of the Audit and Risk Committee.
Interests in shares and options
Details of Peter's interests in shares of the Company are included later in this report.
Interest in contracts
Peter has no interests in contracts of the Company.
David Bottomley - BA LLB (Hons) F Fin
Director and Company Secretary
Experience and Expertise
David has over 20 years’ experience in company valuation and M&A and equity capital markets advisory. He holds a BA (Economic
History) from Sydney University, LLB from Bond University and is a Fellow of the Financial Services Institute of Australasia.
David previously held executive positions at Kleinwort Benson (UK Corporate Finance division), Merrill Lynch & Co (London)
investment banking division and was managing director, Australia of US investment bank GMCG, LLC from 2004 until June 2008.
David co-founded Ryder Investment Management in July 2008, where he is Portfolio Manager and Company Secretary.
Other Current Directorships
David is not currently serving a directorship for any other listed companies.
Former directorships in the last 3 years
Nil.
Special responsibilities
Member of the Nomination and Corporate Governance Committee, member of the Audit and Risk Committee.
Interests in shares and options
Details of David's interests in shares of the Company are included later in this report.
Interest in contracts
David has no interests in contracts of the Company.
8
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019 Directors' Report
Ray Kellerman - BEc , LLB, MBA, F Fin
Non-Executive Director
Experience and Expertise
Ray has over 30 years' of experience in the funds management and corporate and structured finance industries. Ray was with Perpetual
Trustees Australia for 10 years before establishing his own compliance consulting and advisory business in 2001.
He currently acts as a director and audit, risk and compliance committee member for a number of major unlisted fund managers and
financial institutions.
Ray is an owner and Executive Director of Quentin Ayers, an implemented asset consultant specialising in alternative private
market investments.
Other Current Directorships
Other than acting as Chairman of Countplus Limited, Ray does not act as a director for any other listed companies.
Former directorships in the last 3 years
Nil.
Special responsibilities
Chair of the Nomination and Corporate Governance Committee, Chair of the Audit and Risk Committee.
Interests in shares and options
Details of Ray's interests in shares of the Company are included later in this report.
Interest in contracts
Ray has no interests in contracts of the Company.
Attendance at Meetings
Board of Directors Meetings
Director
Peter Constable
David Bottomley
Ray Kellerman
Nomination and Corporate Governance Committee Meetings
Director
Peter Constable
David Bottomley
Ray Kellerman
Audit Committee Meetings
Director
Peter Constable
David Bottomley
Ray Kellerman
Principal Activity
Meetings Held
and Entitled to Attend
Meetings
Attended
4
4
4
4
4
4
Meetings Held
and Entitled to Attend
Meetings
Attended
1
1
1
1
1
1
Meetings Held
and Entitled to Attend
Meetings
Attended
3
3
3
3
3
3
The principal activity of the Company during the year was investing in a concentrated portfolio of ASX and NZX listed micro and small
capitalisation securities, bonds and cash consistent with the Company’s permitted investments and stated investment objective of
achieving long term growth in capital in excess of its benchmark (RBA cash rate plus 4.25% p.a.).
9
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019 Directors' Report
Review of Operations
The Company’s opening Net Asset Value (NAV) on 30 June 2018 was $57,406,933 and the closing NAV on 30 June 2019 was
$83,034,684 reflecting an increase in gross assets of $25,627,751.
During the year 22,511,173 of the Company’s Initial Options (RYDO) were exercised at $1.25 per share adding $28,138,966 to the
Company’s capital. Balancing this the Company was able to acquire 3,312,297 shares for an outlay of $3,996,449 equating to an average
buyback price of $1.2065 per share, providing both accretion to the dilutionary option capital and the Company’s NTA. Inclusive of the
RYDO options exercised in FY18, the Company issued 26,732,673 $1.50 strike December 2021 Secondary Options (RYDOA), consistent
with the terms of the Company’s 2015 Prospectus.
Net Tangible Assets (NTA) per share before tax decreased from 156.53 cents per share to 150.31 cents per share during the reporting
period. Noting this decrease was after the payment of 3.0 cents per share fully franked and the dilutionary impact of the exercise of
22,511,173 $1.25 RYDO options during the year. After adjusting for the exercise of 22,511,173 $1.25 RYDO options during the year and
dividends paid, the underlying pre-tax NTA rose by approximately 3.84%.
During the year, the Manager sold several long-term investments from the portfolio on valuation grounds, realising material gains which
are reflected in the Company’s distributable profits reserve increasing by $8,040,054 from $3,384,226 to $11,424,280 or 19.23 cents
per share.
At 30 June 2019 approximately 75.5% of the Company’s capital was deployed in equities with approximately 24.5% held in cash, term
deposits and net receivables.
The delisting of Updater Inc. (Updater) in October 2018 from the ASX to become an unlisted private Delaware incorporated company
has resulted in the investment being reclassified as a level 3 investment under AASB 13 Fair Value Measurement which is defined as
“measurements based on unobservable inputs from the asset or liability”. As such the Auditor has provided a qualified audit opinion in
relation to the investment in Updater. Specifically, the Auditor has sighted a lack of observable market or other data as at the date of
this report, and therefore they were unable to satisfy by alternative means the carrying value of the Company’s investment in Updater.
As the valuation of investments is incorporated into the determination of the financial position of the Company, and as they were
unable to determine whether adjustments might have been necessary to the investment value of Updater, the Auditor consequently
was unable to determine whether adjustments were necessary to the current year’s movement in fair value of investments recorded
through other comprehensive income in the statement of profit or loss and other comprehensive income, and the fair value of
investments recorded on the statement of financial position.
Directors remain of the opinion that until Updater completes a material capital raising at arm’s length with a third party or parties (with
or without a contingent buyback) the investment will be carried at the lower value of $24.875 per Common Stock (equivalent to last
traded ASX Chess Depositary Interest (CDI) price of $0.995). The current carrying value of the investment is $9,621,292.
Directors have concluded that there is no observable reason or other reliable available information to adjust the carrying value of
Updater and at the time of writing this report Updater was is in the process of finalising a material capital raising that when completed
will be used by Directors to determine the appropriate future carrying value of the Updater investment in the portfolio.
As of June 2019, the Manager determined that it was not in the interests of the Company to continue to give detailed monthly disclosure
on investments and holdings movements, except where such disclosure was material or in the interests of the Company. As such,
Directors have determined that the Company will provide a more extensive report from the Portfolio Manager including the investment
holdings, investment performance, risk and associated commentary in this annual report.
Dividends
On 7 August 2018, the Directors declared a fully franked dividend of 2.00 cent per share paid on 19 October 2018 on ordinary shares as
at record date 5 October 2018.
On 21 February 2019, the Directors declared a fully franked dividend of 1.00 cent per share paid on 25 March 2019 on ordinary shares as
at record date 11 March 2019.
On 9 August 2019, the Directors declared a fully franked dividend of 3.0 cent per share which will be paid on 4 September 2019 on
ordinary shares held as at record date 15 August 2019 (ex-dividend date of 14 August 2019).
10
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Directors' Report
Unissued shares
Upon the exercise of an Initial Option, the Company issued holders a Secondary Option over one Share, with each Secondary Option
exercisable at $1.50 on or before 10 December 2021. As at the date of this report all Initial Options have been exercised or lapsed and
consequently the Company has issued 26,732,673 Secondary Options.
Initial Option over unissued ordinary shares
Secondary Option over unissued ordinary shares
-
26,732,673
Net Assets
As at 30 June 2019 the net assets of the Company were $83,034,685 (30 June 2018: $57,406,933). Please refer to the Statement of
Financial Position for further details.
State of Affairs
During the financial year there was no significant change in the state of affairs of the Company.
Events Subsequent to Balance Date
No matter or circumstance has arisen since the end of the financial year that has significantly affected or may significantly affect the
operations of the Company, the result of those operations or the state of affairs of the Company in subsequent financial years.
Likely Developments
The Company will be managed in accordance with the Constitution and investment objectives as detailed in the Prospectus dated 12
August 2015. Please refer to the Chairman's and Investment Manager's Reports for further guidance.
Insurance of officers
During the financial year, the Company paid a premium for an insurance policy insuring all directors and officers against liabilities for
costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in their capacity as
director or officer of the Company, other than conduct involving a wilful breach of duty in relation to the Company. In accordance with
common commercial practice, the insurance policy prohibits disclosure of the nature of the liability insured against and the amount of
the premium.
Environmental Regulations
The Company’s operations are not subject to any significant environmental regulations.
Rounding of amounts to nearest dollar
In accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, the amounts in the directors’
report and in the financial report have been rounded to the nearest dollar (where indicated).
11
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Remuneration Report
This remuneration report sets out information about the remuneration of the Company’s directors for the year ended 30 June 2019,
under the requirements of Section 300A(1) of the Corporations Act 2001.
Key management personnel
The directors and other key management personnel of the Company during the whole of the financial year, and up to the date of this
report are (unless otherwise indicated):
Peter Constable - Chairman
David Bottomley - Director and Company Secretary
Ray Kellerman - Non-executive Director
Directors’ Remuneration
The Company has a Nomination and Corporate Governance Committee which reviews and advises the Board on the composition of
the Board and its committees.
Directors’ base fees are set out in the Constitution at an amount that must not be more in aggregate than the maximum amount
approved by the Company in a general meeting.
Directors’ remuneration received or receivable was as follows:
Year ended 30 June 2019
Director
Position
Peter Constable
Chairman
David Bottomley
Director
Ray Kellerman1
Non-executive Director
Year ended 30 June 2018
Director
Position
Peter Constable
Chairman
David Bottomley
Director
Ray Kellerman1
Non-executive Director
Short-term employee
benefits
Cash salary
$
Post-employment
benefits
Superannuation
$
Total
$
-
-
31,963
31,963
-
-
3,615
3,615
Short-term employee
benefits
Cash salary
$
Post-employment
benefits
Superannuation
$
Total
$
-
-
27,397
27,397
-
-
2,603
2,603
-
-
35,578
35,578
-
-
30,000
30,000
¹ Director fees (for the sole non-executive Director) total $40,000 per annum including superannuation.
12
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Director Related Entity Remuneration
The Company has outsourced its investment management function to Ryder Investment Management Pty Limited (the "Manager")
a company controlled by Peter Constable and David Bottomley. The Manager is privately owned and was incorporated in
November 2008.
(a) Management fee
The Manager is entitled to be paid a management fee equal to 1.25% p.a. (plus GST) of the Portfolio Net Asset Value. The
management fee is paid monthly in arrears.
(b) Performance fee
The Manager is entitled to receive a performance fee of 20% (plus GST) of the outperformance of the Portfolio above the
Benchmark. The Benchmark is the RBA Cash Rate plus 4.25%. The performance fee is accrued monthly but is not paid until the
end of each 12 month period ending on 30 June (Performance Calculation Period).
Management and performance fees paid to the Manager during the year were as follows:
Management fees paid and payable during the year
Performance fees payable during the year
Management fees payable at year end
Year ended
30 June 2019
$
1,080,946
-
94,122
Year ended
30 June 2018
$
773,639
2,953,362
69,445
Equity Instrument Disclosures Relating to Directors
The relevant interests of the Directors and their related entities in the Securities of the Company were:
Shares as at 30 June 2019
Director
Peter Constable 1
David Bottomley 1
Ray Kellerman
Options (RYDOA) as at 30 June 2019
Director
Peter Constable
David Bottomley
Ray Kellerman
Balance at
30 June 2018
Acquisitions/
Options Exercised
Shares acquired/
(disposed)
Number of shares
5,378,500
2,145,000
510,000
8,033,500
3,062,500
1,130,000
510,000
4,702,500
-
(252,000)
-
(252,000)
8,441,000
3,023,000
1,020,000
12,484,000
Balance at
30 June 2018
400,000
172,500
-
572,500
Issued/Acquired
Lapsed/Exercised
Number of options
3,062,500
852,500
510,000
4,425,000
-
-
-
-
3,462,500
1,025,000
510,000
4,997,500
1 As at the date of incorporation one share in the Company was held by Ryder Investment Management Pty Ltd, a company controlled by Peter Constable and David Bottomley.
13
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019 Options (RYDO) as at 30 June 2019
Director
Peter Constable
David Bottomley
Ray Kellerman
Shares as at 30 June 2018
Director
Peter Constable 1
David Bottomley 1
Ray Kellerman
Balance at
30 June 2018
4,562,500
1,795,000
510,000
6,867,500
Issued/Acquired
Lapsed/Exercised
Number of options
-
-
-
-
(4,562,500)
(1,795,000)
(510,000)
(6,867,500)
-
-
-
-
Balance at
30 June 2017
Acquisitions/
Options Exercised
Shares acquired/
(disposed)
Number of shares
4,978,500
1,967,500
510,000
7,456,000
400,000
172,500
-
572,500
-
5,000
-
5,000
5,378,500
2,145,000
510,000
8,033,500
Options (RYDOA) as at 30 June 2018
Director
Peter Constable
David Bottomley
Ray Kellerman
Options (RYDO) as at 30 June 2018
Director
Peter Constable
David Bottomley
Ray Kellerman
Balance at
30 June 2017
-
-
-
-
Balance at
30 June 2017
4,962,500
1,967,500
510,000
7,440,000
Issued/Acquired
Lapsed/Exercised
Number of options
400,000
172,500
-
572,500
-
-
-
-
400,000
172,500
-
572,500
Issued/Acquired
Lapsed/Exercised
Number of options
-
-
-
-
(400,000)
(172,500)
-
(572,500)
4,562,500
1,795,000
510,000
6,867,500
1 As at the date of incorporation one share in the Company was held by Ryder Investment Management Pty Ltd, a company controlled by Peter Constable and David Bottomley.
There is also a contingent second option available to directors which is under the same terms and conditions offered to all other
option holders.
End of remuneration report.
14
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019 Proceedings on behalf of the Company
There are no proceedings that the Directors have brought, or intervened in, on behalf of the Company.
Non-Audit services
The Board of Directors, in accordance with advice from the Audit and Risk Committee, is satisfied that the provision of non-audit
services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
The Directors are satisfied that the services disclosed in Note 11 did not compromise the external auditor's independence for the
following reasons:
(a) all non-audit services have been reviewed by the Audit and Risk Committee to ensure they do not impact the impartiality
and objectivity of the auditor;
(b) none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics
for Professional Accountants
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 16.
Signed in accordance with a resolution of the directors.
Peter Constable
Chairman
Ryder Capital Limited
Sydney, 27 August 2019
15
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Auditor's Independence Declaration
Level 16, Tower 2 Darling Park
201 Sussex Street
Sydney NSW 2000
Postal Address
GPO Box 1615
Sydney NSW 2001
p. +61 2 9221 2099
e. sydneypartners@pitcher.com.au
Auditor’s Independence Declaration
To the Directors of Ryder Capital Limited
ABN 74 606 695 854
In relation to the independent audit of Ryder Capital Limited for the year ended 30 June 2019, to the
best of my knowledge and belief there have been:
(i) no contraventions of the auditor independence requirements of the Corporations Act 2001;
and
(ii) no contraventions of any applicable code of professional conduct.
To be supplied
S M WHIDDETT
Partner
PITCHER PARTNERS
Sydney
27 August 2019
Adelaide Brisbane Melbourne Newcastle Perth Sydney
16
Pitcher Partners is an association of independent firms.
An independent New South Wales Partnership. ABN 17 795 780 962. Liability limited by a scheme approved under Professional Standards Legislation.
Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
pitcher.com.au
16
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Statement of Profit or Loss and Other Comprehensive Income
Note
Year ended
30 June 2019
Year ended
30 June 2018
Investment Income
Interest income
Dividend income net of franking credits
Net gain on net financial liabilities at fair value through profit
or loss
Net foreign exchange realised loss
Other income
Total investment income
Expenses
Management fees
Directors' fees
Performance fees
Other operating expenses
Total expenses
Profit/(loss) for the year before income tax expense
Income tax benefit
Profit/(loss) for the year
Other comprehensive income
Items that will not be reclassified to profit or loss:
13
13
13
4(a)
$
356,647
1,382,725
1,035
-
36,326
1,776,733
$
(1,007,245)
(33,647)
-
(370,529)
(1,411,421)
365,312
201,002
566,314
$
75,896
623,525
126,984
(70,505)
1,134
757,034
$
(720,891)
(30,323)
(2,953,362)
(182,438)
(3,887,014)
(3,129,980)
1,066,349
(2,063,631)
Movement in fair value of long term equity investments,
net of tax
10(d)
Total comprehensive income for the year
2,520,513
3,086,827
12,865,435
10,801,804
Basic earnings/(losses) per share
Diluted earnings/(losses) per share
5
5
1.06 cents
(5.61) cents
1.06 cents
(5.61) cents
The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the Notes to the Financial
Statements which follow.
17
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019 Statement of Financial Position
Assets
Current assets
Cash and cash equivalents
Receivables
Current tax asset
Total current assets
Non-current assets
Long-term equity investments
Deferred tax asset
Total non-current assets
Total assets
Liabilities
Current liabilities
Payables
Current tax liability
Total current liabilities
Non-current liabilities
Deferred tax liability
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Accumulated losses
Capital profits reserve
Asset revaluation reserve
Total equity
Note
12(a)
6
4(c)
7, 3
4(d)
8
4(c)
4(d)
9(a)
10(a)
10(c)
10(d)
As at
30 June 2019
$
22,525,023
69,844
-
22,594,867
As at
30 June 2018
$
11,572,347
39,564
28,201
11,640,112
67,506,755
499,263
68,006,018
54,342,809
515,930
54,858,739
90,600,885
66,498,851
823,457
3,150,713
3,974,170
3,592,031
3,592,031
3,040,321
-
3,040,321
6,051,597
6,051,597
7,566,201
9,091,918
83,034,684
57,406,933
65,050,053
(2,876,206)
11,424,280
9,436,557
40,904,728
(2,836,231)
3,384,226
15,954,210
83,034,684
57,406,933
The above Statement of Financial Position should be read in conjunction with the Notes to the Financial Statements which follow.
18
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019 Statement of Changes in Equity
Note
Issued
capital
Retained
earnings/
(losses)
Profits
reserve
Capital
profit
reserve
Asset
revaluation
reserve
Total equity
$
$
$
$
$
$
Balance at 30 June 2017
36,594,817
(772,600)
121,720
1,944,229
4,773,152
42,661,318
Loss for the year
Net revaluation of investments
Total comprehensive income for the year
Other
Transfer of realised gains on sale of
investments, net of tax
10(c)
Transactions with owners in their
capacity as owners
Shares and options issued during the year
Shares acquired under buy-back during
the year
Transactions costs on shares acquired
under buy-back
Income tax on transactions costs
9(a)
9(a)
9(a)
9(a)
Dividends provided for or paid
10(b),(c)
-
-
-
-
5,276,875
(962,681)
(1,981)
(2,302)
-
4,309,911
-
(2,063,631)
-
-
-
-
-
-
-
-
Balance at 30 June 2018
40,904,728
(2,836,231)
Profit for the year
Net revaluation of investments
Total comprehensive income for the year
Other
Transfer of realised gains on sale of
investments, net of tax
Transfer to profit reserve
10(c)
10(a)
-
-
-
-
-
-
566,314
-
566,314
-
-
(2,063,631)
-
-
-
-
-
(2,063,631)
12,865,435
12,865,435
12,865,435
10,801,804
1,684,377
(1,684,377)
1,684,377
(1,684,377)
-
-
-
-
-
-
-
-
-
-
-
-
5,276,875
(962,681)
(1,981)
(2,302)
(366,100)
3,943,811
(121,720)
(244,380)
(121,720)
(244,380)
3,384,226
15,954,210 57,406,933
-
-
-
-
566,314
2,520,513
2,520,513
2,520,513
3,086,827
9,038,166
(9,038,166)
(606,289)
606,289
-
-
(606,289)
606,289
9,038,166
(9,038,166)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Transactions with owners in their capacity as owners
Shares and options issued during the year
Shares acquired under buy-back during
the year
Transactions costs on shares acquired
under buy-back
Income tax on transactions costs
9(a)
9(a)
9(a)
9(a)
Dividends provided for or paid
10(b),(c)
28,138,966
(3,987,676)
(8,227)
2,262
-
24,145,325
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(606,289)
(606,289)
(998,112)
(998,112)
-
-
-
-
-
-
28,138,966
(3,987,676)
(8,227)
2,262
(1,604,401)
22,540,924
Balance at 30 June 2019
65,050,053 (2,876,206)
-
11,424,280
9,436,557 83,034,684
The above Statement of Changes in Equity should be read in conjunction with the Notes to the Financial Statements which follow.
19
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019 Statement of Cash Flows
Cash flows from operating activities
Interest received
Dividends received
Management fees paid
Performance fees paid
Directors' fees paid
Other operating expenses paid
Other income received
Income tax paid
Note
Year ended
30 June 2019
Year ended
30 June 2018
$
310,657
1,382,725
(982,568)
(2,953,362)
(41,147)
(354,819)
36,326
(19,040)
$
83,683
623,525
(699,649)
(1,035,193)
(35,879)
(269,944)
1,134
(508,634)
Net cash used in operating activities
12(b)
(2,621,228)
(1,840,957)
Cash flows from investing activities
Proceeds from sale of investments
Payments for purchase of investments
19,951,361
(28,918,381)
18,617,030
(15,676,665)
Net cash provided in investing activities
(8,967,020)
2,940,365
Cash flows from financing activities
Dividends paid
Proceeds from shares issued
Payments for shares buy-back
Issue costs (paid)
(1,604,401)
28,138,966
(3,987,676)
(5,965)
(366,100)
5,276,875
(962,681)
(1,981)
Net cash provided by financing activities
22,540,924
3,946,113
Impact of exchange rate changes on cash and cash equivalents
-
4,469
Net increase in cash held
10,952,676
5,049,990
Cash and cash equivalents at beginning of the financial year
11,572,347
6,522,357
Cash and cash equivalents at end of the financial year
12(a)
22,525,023
11,572,347
The above Statement of Cash Flows should be read in conjunction with the Notes to the Financial Statements which follow.
20
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019 Notes to the Financial Statements
1. GENERAL INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Ryder Capital Limited ("the Company") is a publicly listed company, incorporated and domiciled in Australia. The Company was
incorporated with the Australian Securities and Investments Commission ("ASIC") on 26 June 2015. The registered office and principal place
of business of the Company is Level 25, 88 Phillip Street, Sydney NSW 2000. The Company's principal activity is investing in a concentrated
portfolio of ASX and NZX listed micro and small capitalisation securities, bonds and cash consistent with the Company's permitted
investments and stated investment objective of achieving long term growth in capital and income.
Updater Inc. (ASX:UPD) delisted from the ASX in October 2018 and became a privately held Delaware incorporated company. In September
2018, the Board of Directors resolved to amend the Company’s investment strategy to allow for continued ownership of Updater Inc.
notwithstanding it being an unlisted Delaware incorporated company.
These general purpose financial statements are for the year ended 30 June 2019, and were authorised for issue by the Directors on
27 August 2019.
The material accounting policies adopted by the Company in the preparation of the financial statements is set out below:
(a) Basis of preparation
These general purpose financial statements have been prepared in accordance with the Australian Accounting Standards, issued by the
Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001. For the purposes of preparing financial statements, the
Company is a for-profit entity.
The Company is a for-profit entity for financial reporting purposes under Australian Accounting Standards.
The financial statements, except for cash flow information, have been prepared on an accruals basis and are based on historical costs,
modified where applicable, by the measurement of fair value of selected assets and liabilities.
(b) Statement of Compliance
The financial statements and notes thereto comply with Australian Accounting Standards as issued by the AASB and International Financial
Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
(c) Investments
i)
Recognition/derecognition
The Company recognises financial assets and financial liabilities on the date it becomes party to the contractual agreement (trade
date) and recognises changes in fair value of the financial assets or financial liabilities from this date.
Investments are derecognised when the right to receive cash flows from the investments have expired or the Company has
transferred substantially all risks and rewards of ownership.
ii)
Classification and Measurement
The Company’s investments are categorised as follows:
Financial instruments held at fair value through profit or loss (short-term equity investments)
Financial assets and liabilities held at fair value through profit or loss are measured initially at fair value excluding any transaction
costs that are directly attributable to the acquisition or issue of the financial asset or financial liability. Transaction costs on financial
assets and financial liabilities at fair value through profit or loss are expensed immediately. Subsequent to initial recognition, all
instruments held at fair value through profit or loss are measured at fair value with changes in their fair value recognised in the
statement of profit or loss.
Derivative financial instruments such as options and forward contracts are included under this classification. The Company does not
designate any derivatives as hedges in a hedging relationship.
Financial instruments designated at fair value through other comprehensive income (long-term equity investments)
Long-term equity investments are recognised initially at cost and the Company elects to present subsequent changes in the fair value
of the investments in the Statement of Other Comprehensive Income.
Long term equity investments comprise holdings in marketable equity securities which are intended to be held for the long term.
iii)
Fair Value
The Company determines the fair value of listed investments at the last quoted price. The fair value of investments that are not traded
in an active market are determined using valuation techniques. These include the use of arm's length market transactions, reference
to the current fair value of a substantially similar other instrument, discounted cash flow techniques, option pricing models or any
other valuation techniques that provide a reliable estimate of prices obtained in actual market transactions.
21
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Notes to the Financial Statements
1. GENERAL INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(c) Investments (continued)
iv)
Impairment of financial assets
The Company assesses whether the credit risk on a financial asset has increased significantly based on the change in the risk of
default since initial recognition. In making this assessment, the Company considers both quantitative and qualitative information that
is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or
effort. Such information includes:
-
contractual payments are more than 30 days past due, unless the Company has reasonable and supportable information
that indicates otherwise;
The Company considers the following to represent default events for the purpose of measuring expected credit losses:
-
contractual payments are more than 30 days past due, unless the Company has reasonable and supportable information
that indicates a more lagging default criterion is more appropriate;
The foregoing indicators of default have been selected based on the Company’s historical experience.
(d) Foreign currency translation
(i)
Functional and presentation currency
Items included in the Company’s financial statements are measured using the currency of the primary economic environment in
which it operates (the “functional currency”). This is the Australian dollar, which reflects the currency of the economy in which the
Company competes for funds and is regulated. The Australian dollar is also the Company’s presentation currency.
(ii) Transactions and balances
Transactions during the period denominated in foreign currency have been translated at the exchange rate prevailing at the
transaction date. Overseas investments and currency, together with any accrued income, are translated at the exchange rate
prevailing at the balance date. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the
translation at balance date exchange rates of monetary assets and liabilities denominated in foreign currencies, are recognised in
profit or loss. Net exchange gains and losses arising on the revaluation of investments are included in gains on investments.
(e) Income tax
The charge for current income tax expense is based on the taxable income for the period. It is calculated using the tax rates that have been
enacted or substantively enacted at the end of the reporting period.
Deferred tax is accounted for using the liability method in respect of temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an
asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Current
and deferred taxes are recognised in profit or loss except where they relate to items that may be recognised directly in equity, such as
unrealised gains and losses on long-term equity, in which case they are adjusted directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible
temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will
occur in income taxation legislation and the anticipation that the Company will derive sufficient future assessable income to enable the
benefit to be realised and comply with the conditions of deductibility imposed by law.
(f) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from
the Australian Taxation Office (ATO). In these circumstances, the GST is recognised as being part of the cost of acquisition of the asset or as
part of an item of expense. Receivables and payables in the statement of financial position are shown inclusive of GST.
The net amount of GST recoverable from, or payable to, the ATO is included as an asset or liability in the statement of financial position.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing
activities, which are disclosed as operating cash flows.
22
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Notes to the Financial Statements
1. GENERAL INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(g) Income
Revenue is recognised when it is probable that the economic benefit will flow to the entity and the revenue can be reliably measured.
Revenue is measured at the fair value of the consideration received or receivable.
Dividend income is recognised in profit or loss on the day on which the relevant investment is first quoted on an “ex-dividend” basis.
Interest revenue is recognised as it accrues using the effective interest method, taking into account the effective yield on the financial asset.
Realised and unrealised gains and losses arising from changes in the fair value of the 'financial assets at fair value through profit or
loss' category are included in profit or loss in the period in which they arise. This may also include foreign exchange gains and losses
when applicable.
(h) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to
an insignificant risk of changes in value.
Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset.
(i) Receivables
Receivables may include amounts for dividends, interest and securities sold. Dividends are receivable when they have been declared
and are legally payable. Interest is accrued at the balance date from the time of last payment. Amounts receivable for securities sold are
recorded when a sale has occurred.
Such assets are reviewed at the end of each reporting period to determine whether there is objective evidence of impairment.
Receivables are reviewed at the end of each reporting period to determine the need to raise a loss allowance for expected credit losses. To
measure the expected credit losses, review is undertaken of the nature of the receivables, days overdue and any expected impacts of future
economic conditions.
(j) Payables
These amounts represent liabilities for amounts owing by the Company at period end which are unpaid. The amounts are unsecured and
are usually paid within 30 days of recognition. Amounts payable for securities purchased are recorded when the purchase has occurred.
(k) Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as
a deduction, net of tax, from the proceeds.
(l) Earnings per share
i)
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders 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 period.
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 shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Potential ordinary shares are anti-dilutive when their conversion to ordinary shares would increase earnings per share or decrease
the loss per share from continuing operations. The calculation of diluted earnings per share does not assume conversion, exercise or
other issue of potential ordinary shares that would have an anti-dilutive effect on earnings per share.
(m) Dividends
Provisions for dividends payable are recognised in the reporting period in which they are declared, for the entire undistributed amount,
regardless of the extent to which they will be paid in cash.
23
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Notes to the Financial Statements
1. GENERAL INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(n) Critical accounting judgements and key sources of estimation uncertainty
In the application of the Company’s accounting policies, management of the Company is required to make judgements, estimates and
assumptions about the carrying amounts of some assets and liabilities that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and various other factors that are considered to be relevant, and reasonable
under the circumstance. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if
the revision affects both current and future periods. The methods used in the valuation of investments are set out in Note 1(c) to these
financial statements.
(o) New and amended standards adopted by the Company
A number of new or amended standards became applicable for the current reporting period, however, the Company did not have to make
retrospective adjustments as a result of adopting these standards.
- AASB 9: Financial Instruments (effective 1 July 2018)
AASB 9 contains requirements in relation to the classification, measurement and de-recognition of financial assets and liabilities, replacing
the recognition and measurement requirements in AASB 139 Financial instruments: Recognition and Measurement. Under the new
requirements the four current categories of financial assets are replaced with three measurement categories: fair value through profit or
loss, fair value through other comprehensive income, and amortised cost. Financial assets can only be measured at amortised cost where
very specific conditions are met.
AASB 9 introduces new hedge accounting requirements including changes to hedge effectiveness testing, treatment of hedging costs, risk
components that can be hedged, and disclosures.
There was no impact on the Company upon adoption of AASB 9 as the Company currently classifies financial assets and financial liabilities
at fair value through profit or loss or amortised cost, and the Company does not apply hedge accounting.
AASB 9 also introduces a new impairment model. The Company’s receivables include dividend and settlement of share trade. As the
settlement period is short, the change in impairment rules did not have a material impact.
-AASB 15: Revenue From Contracts With Customers (effective 1 July 2018)
AASB 15 superseded AASB 18 Revenue and AASB 111 Construction Contracts. Although AASB 15 is principles-based, it is a significant
change from the current revenue requirements and will involve more judgements and estimates as revenue is recognised when control of a
good or service transfers to a customer, or on satisfaction of performance obligations under contracts, which replaces the existing notion of
risk and rewards.
There was no impact on the Company upon the adoption of AASB 15 as the Company’s revenue recognition of interest, dividends,
investment gains/(losses) and foreign exchange gains/(losses) were unaffected as these items are excluded from the scope of AASB 15.
There are no other standards that are not yet effective and that are expected to have a material impact on the Company in the current or
future reporting periods and on foreseeable future transactions.
(p) New accounting standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 July 2019, and
have not been early adopted in preparing these financial statements. None of these are expected to have a material effect on the financial
statements of the Company.
(q) Rounding of amounts to nearest dollar
In accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, the amounts in the directors’ report
and in the financial report have been rounded to the nearest dollar (where indicated).
2. FINANCIAL RISK MANAGEMENT
(a) Objectives, strategies, policies and processes
The objective of the Company is to achieve long term growth in capital and income through investments in a concentrated portfolio of
ASX and NZX listed micro and small capitalisation securities, bonds and cash consistent with the Company’s permitted investments. The
Company is managed from an Australian investor’s perspective with tax and currency exposures forming important considerations in the
daily management of the Company, whilst complying with the Company’s Prospectus dated 12 August 2015. Financial risk management is
carried out by the Investment Manager under the guidance of its Chief Investment Officer.
24
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Notes to the Financial Statements
2. FINANCIAL RISK MANAGEMENT (continued)
(a) Objectives, strategies, policies and processes
The Company’s activities are exposed to different types of financial risks. These risks include market risk (including currency risk, and price
risk), being the primary risk, and credit risk. The Company may employ derivative financial instruments to hedge these risk exposures in
order to minimise the effects of these risks.
(b) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge
an obligation.
Market prices generally incorporate credit risk assessments into valuations and risk of loss is implicitly provided for in the carrying value of
assets and liabilities as they are marked to market at balance date.
The total credit risk for assets is therefore limited to the amount carried in the Statement of Financial Position.
The Manager is responsible for ensuring there is appropriate diversification across counterparties and that they are of a sufficient quality
rating. The Manager minimises the Company's concentration of credit risk by undertaking most transactions in ASX listed securities with a
large number of approved brokers. Payment is only made once a broker has received securities and delivery of securities only occurs once
the broker received payment.
Cash
The majority of the Company's short term deposits are invested with financial institutions that have a Standard and Poor's credit rating of
AA-. The majority of maturities are within three months. The weighted average interest rate of the Company's cash and cash equivalents at
30 June 2019 is 1.71%, (2018: 1.56%).
Receivables
The majority of the Company's receivables arise from interest yet to be received.
None of these assets exposed to credit risk are overdue or considered to be impaired.
(c) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. This risk is
controlled through the Company’s investment in financial instruments, which under market conditions are readily convertible to cash.
In addition, the Company maintains sufficient cash and cash equivalents to meet normal operating requirements.
Maturity analysis for financial liabilities
The table in the succeeding page analyses the Company’s non-derivative financial liabilities into relevant maturity groupings based on the
remaining period at reporting date to the contractual maturity date. The amounts in the table are the contractual undiscounted cash flows.
As at 30 June 2019
Trade and other payables
Due to brokers - payable for securities purchased
Total Financial Liabilities
As at 30 June 2018
Trade and other payables
Due to brokers - payable for securities purchased
Total Financial Liabilities
(d) Market risk
Less than 1
month
$
99,943
723,514
823,457
3,036,128
4,193
3,040,321
1-6 months
6-12 months
Over 12
months
$
-
-
-
-
-
-
$
-
-
-
-
-
-
Total
$
99,943
723,514
823,457
3,036,128
4,193
3,040,321
$
-
-
-
-
-
-
Market risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market prices.
By its nature, as a listed investment company that invests in tradeable securities, the Company will always be subject to market risk as
it invests its capital in securities which are not risk free. The market prices of these securities can and do fluctuate in accordance with
multiple factors.
25
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Notes to the Financial Statements
2. FINANCIAL RISK MANAGEMENT (continued)
(d) Market risk (continued)
The Company seeks to reduce market risk by investing in equity securities where there is a significant 'margin of safety' between the
underlying companies' value and share price. The Company has set parameters as to a maximum amount of the portfolio that can be
invested in a single company or sector as prescribed in the Prospectus.
(i)
Interest rate risk
The Company's interest bearing financial assets expose it to risks associated with the effects of fluctuations in the prevailing levels of
market interest rates on its financial position and cash flows, the risk is measured using sensitivity analysis on page 27.
Interest rate risk is actively managed by the Investment Manager. The majority of the Company's interest bearing assets are held
with reputable banks to ensure the Company obtains competitive rates of return while providing sufficient liquidity to meet cash
flow requirements.
The table below summarises the Company's exposure to interest rates risk. It includes the Company's assets and liabilities at fair
values, categorised by the earlier of contractual repricing or maturity date.
As at 30 June 2019
Financial Assets
Cash and cash equivalents
Trade and other receivables
Current tax asset
Long-term equity investments:
Listed equities
Unlisted equities
Total Financial Assets
Financial Liabilities
Trade and other payables
Total Financial Liabilities
As at 30 June 2018
Financial Assets
Cash and cash equivalents
Trade and other receivables
Current tax asset
Long-term equity investments:
Listed equities
Total Financial Assets
Financial Liabilities
Trade and other payables
Total Financial Liabilities
(ii) Other Price Risk
Weighted
Average Effective
Interest Rate
Floating
Interest Rate
Non Interest
Bearing
Fixed
Interest
Rate
Total
%
$
1.71
22,525,023
-
-
-
-
$
-
69,844
-
57,885,463
9,621,292
22,525,023
67,576,599
-
-
823,457
823,457
1.56
11,572,347
-
-
-
-
39,564
28,201
54,342,809
11,572,347
54,410,574
3,040,321
-
3,040,321
$
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
22,525,023
69,844
-
57,885,463
9,621,292
90,101,622
823,457
823,457
11,572,347
39,564
28,201
54,342,809
65,982,921
3,040,321
3,040,321
Other Price Risk is the risk that fair value of equities decreases as a result of changes in market prices, whether those changes are
caused by factors specific to the individual stock or factors affecting the broader market. Other price risk exposure arises from the
Company's investment portfolio.
(iii) Foreign currency risk
Foreign currency risk is the risk that the value of a financial commitment, recognised asset or liability will fluctuate due to changes in
foreign currency rates.
26
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Notes to the Financial Statements
2. FINANCIAL RISK MANAGEMENT (continued)
(d) Market risk (continued)
(iii)
Foreign currency risk (continued)
The Company holds assets denominated in currencies other than the Australian dollar (being the functional currency) and is
therefore exposed to foreign currency risk when the value of assets denominated in other currencies fluctuates due to movements in
exchange rates.
The Company may enter into foreign exchange forward contracts both to hedge the foreign exchange risk implicit in the value
of portfolio securities denominated in foreign currency and to secure a particular exchange rate for a planned purchase or sale
of securities.
(iv) Sensitivity analysis
The following tables show the sensitivity of the Company’s operating profit/other comprehensive income and equity to price risk,
interest rate risk and foreign exchange risk. The reasonably possible movements in the risk variables have been determined based on
management’s best estimate, having regard to a number of factors, including historical levels of changes in interest rates, historical
correlation of the Company’s investments with the relevant benchmark and market volatility. However, actual movements in the risk
variables may be greater or less than anticipated due to a number of factors, including unusually large market shocks resulting from
changes in the performance of the securities in which the Company invests. As a result, historic variations in risk variables are not a
definitive indicator of future variations in the risk variables.
Price risk
Impact on other comprehensive
income
Income rate risk
Impact on other comprehensive
income
Foreign exchange risk
Impact on other comprehensive
income
-10%
(6,750,676)
-10%
(5,434,281)
+10%
6,750,676
+10%
5,434,281
-100 bps
-
-100 bps
-
+100 bps
-
+100 bps
-
-10%
-
-10%
-
+10%
-
+10%
-
Price risk
Impact on operating profit/(loss)
Income rate risk
Impact on operating profit/(loss)
Foreign exchange risk
Impact on operating profit/(loss)
-10%
-
-10%
-
+10%
-
+10%
-
-100 bps
(3,962)
-100 bps
(914)
+100 bps
3,962
+100 bps
914
-10%
-
-10%
-
+10%
-
+10%
-
30 June 2019
30 June 2018
30 June 2019
30 June 2018
3. FAIR VALUE MEASUREMENT
The Company measures and recognises the following assets and liabilities at fair value on a recurring basis:
- Long term equity investments
Fair value hierarchy
AASB 13: Fair value measurement requires disclosure of fair value measurements by level of the fair value hierarchy:
Level 1 - measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 - measurements based on inputs other than quoted prices included in level 1 that are observable for the asset or liability; and
Level 3 - measurements based on unobservable inputs from the asset or liability.
27
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Notes to the Financial Statements
3. FAIR VALUE MEASUREMENT (continued)
(a) Recognised fair value measurements
The following table presents the Company’s assets measured and recognised at fair value as at 30 June 2019 and 30 June 2018.
At 30 June 2019
Financial assets
Long-term equity investments
Listed investments
Total financial assets
At 30 June 2018
Financial assets
Long-term equity investments
Listed investments
Total financial assets
(b) Transfer between levels
Level 1
Level 2
Level 3
Total
$
57,885,463
57,885,463
$
-
-
$
$
9,621,292
67,506,755
9,621,292
67,506,755
Level 1
Level 2
Level 3
Total
$
54,342,809
54,342,809
$
-
-
$
-
-
$
54,342,809
54,342,809
Management’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.
The following table presents the transfers between levels at the end of the reporting period.
As at 30 June 2019
Transfer between levels 1 and 3
Listed investments
As at 30 June 2018
Transfer between levels 1 and 3
Listed investments
Level 1
Level 2
Level 3
$
(9,621,292)
$
-
$
9,621,292
Level 1
Level 2
Level 3
$
-
$
-
$
-
At the end of the current reporting period, management have transferred part of the Company’s investments in listed equities from level 1 to
level 3 on the fair value hierarchy on the basis that security of Updater Inc. (ASX: UPD) was removed from official list of ASX Limited on the
10 October 2018 and became an unlisted Delaware incorporated Company. There were no other transfers between levels in the fair value
hierarchy at the end of the reporting period.
(c) Fair value measurements using significant unobservable inputs (level 3)
The following table presents the movement in level 3 instruments for the year ended 30 June 2019 by class of financial instrument.
28
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Notes to the Financial Statements
3. FAIR VALUE MEASUREMENT (continued)
(c) Fair value measurements using significant unobservable inputs (level 3) (continued)
Opening balance – 1 July 2018
Transfer into level 3
Closing balance – 30 June 2019
Listed investments
Total
$
-
9,621,292
9,621,292
$
-
9,621,292
9,621,292
(i)
Valuation inputs and relationships to fair value
The following table summarises the quantitative information about the significant unobservable inputs used in the level 3 fair
value measurements.
Description
As at 30 June 2019
Fair value
$
Unobservable
inputs
Range of inputs (probability-
weighted average)
Relationship of unobservable
inputs to fair value
Updater Inc.
9,621,292
Last trade price
N/A
N/A
Updater Inc. (Updater) an unlisted Delaware incorporated company is carried at a value of $24.875 per Common Stock. This is the
equivalent value of $0.995 per Chess Depositary Interest (CDI) which was the last traded ASX price (8 October 2018) for Updater CDIs
prior to the delisting and stock consolidation at a ratio of 25:1 (CDI to Common Stock). This value compares to the last transacted
price of $1.25 per CDI ($31.25 Common Stock equivalent) relating to the Updater buyback which was completed on 16 October 2018.
Directors have determined that until Updater conducts a material capital raising at arm’s length with a third party (with or without a
contingent buyback) the investment will be carried at the lower value of $24.875 per Common Stock. The Company notes that CDIs
and CDI pricing are no longer relevant and as such all future references to Updater will be to its Common Stock.
Directors remain of the opinion that until Updater conducts a material capital raising at arm’s length with a third party (with or without
a contingent buyback) the investment will be carried at the lower value of $24.875 per Common Stock (equivalent to last traded ASX
Chess Depositary Interest (CDI) price of $0.995).
Directors have concluded that there is no observable reason or other reliable available information to adjust the carrying value of
Updater and at the time of writing this report Updater was is in the process of finalising a material capital raising that when completed
will be used by Directors to determine the appropriate future carrying value of the Updater investment in the portfolio.
(ii) Valuation processes
Portfolio reviews are undertaken regularly by management to identify securities that potentially may not be actively traded or have
stale security pricing. This process identifies securities which possibly could be regarded as being level 3 securities. Further analysis,
should it be required, is undertaken to determine the accounting significance of the identification. For certain security types, in
selecting the most appropriate valuation model, management performs back testing and considers actual market transactions.
Changes in allocation to or from level 3 are analysed at the end of each reporting period.
(d) Fair value of financial instruments not carried at fair value
The carrying value of trade receivables and trade payables approximate their fair value because of the short-term nature of the instruments
and low credit risk.
4. TAXATION
(a) Numerical reconciliation of income tax benefit
Prima facie tax payable/(benefit) on profit before income tax at 27.5%
(2018: 27.5%)
Adjusted for tax effect of amounts which are not deductible (taxable) in
calculating taxable income:
Imputation gross up on dividends received
Franking credits on dividends received
Prior year over provision
Income tax benefit
29
30 June 2019
30 June 2018
$
$
100,461
(860,745)
114,348
(415,811)
-
(201,002)
73,487
(267,225)
(11,866)
(1,066,349)
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Notes to the Financial Statements
4. TAXATION (continued)
(a) Numerical reconciliation of income tax benefit (continued)
Applicable weighted average effective tax rate
The income tax benefit results in a:
Current tax asset
Current tax liability
Deferred tax liability
Deferred tax asset
As at
30 June 2019
As at
30 June 2018
55%
$
(266,134)
(12,647)
14,405
63,375
(34%)
$
(611,745)
2,141
(442,605)
(14,140)
Income tax benefit
(201,002)
(1,066,349)
(b) Amounts recognised directly in equity
Aggregate deferred tax arising in the reporting period and not recognised
in profit or loss or other comprehensive income but debited or credited
directly to equity.
Transition costs on equity issue
Unrealised gains on long term equity investments
Realised gains on long term equity investments
Net deferred tax - debited directly to equity
(c) Movement in current tax liability/(assets)
Opening balance
2017 Balancing adjustment
Income tax refund/(payment)
Charged / (credited) to profit or loss
to profit or loss
directly to equity
Closing balance
(d) Net deferred tax liabilities
Deferred tax liabilities
Deferred income tax comprises the estimated tax payable at the current
income tax rate of 27.5% (2018: 27.5%) on the following items:
Tax on unrealised gains on investment portfolio
Accrued interest
Movements:
Opening balance
Charged / (credited)
to profit or loss
directly to equity
Closing balance
30
(2,262)
(3,579,384)
(3,428,270)
(7,009,916)
(28,201)
-
16,778
(266,134)
3,428,270
3,150,713
(545)
(6,051,597)
(568,923)
(6,621,065)
288,074
3,732
(277,184)
(611,745)
568,923
(28,201)
3,579,384
12,647
3,592,031
6,051,597
-
6,051,597
6,051,597
1,812,647
12,647
(2,472,213)
3,592,031
(2,141)
4,241,091
6,051,597
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019 Notes to the Financial Statements
4. TAXATION (continued)
(d) Net deferred tax liabilities (continued)
Net deferred tax assets
Deferred tax assets comprises the estimated tax deductible at the current
income tax rate of 27.5% (2018: 27.5%) on the following items:
Transition costs on equity issue
Reduction in transition costs on equity issue
Tax losses
Net deferred tax assets
Movements:
Opening balance
Charged / (credited)
to profit or loss
directly to equity
Closing balance
5. EARNINGS PER SHARE
Basic earnings/(losses) per share
Diluted earnings/(losses) per share
Earnings/(losses) used in calculating basic earnings/(losses) per share
Earnings/(losses) used in calculating diluted earnings/(losses) per share
As at
30 June 2019
$
As at
30 June 2018
$
116,871
(87,478)
469,870
499,263
515,930
(14,405)
(2,262)
499,263
30 June 2019
$
1.06 cents
1.06 cents
566,314
566,314
114,609
(68,549)
469,870
515,930
91,461
442,605
(18,136)
515,930
30 June 2018
$
(5.61) cents
(5.61) cents
(2,063,631)
(2,063,631)
Weighted average number of ordinary shares used in the calculation of
basic earnings per share
53,381,128
36,769,861
Weighted average number of shares used in the calculation of diluted
earnings per share
53,381,128
36,769,861
The weighted average number of shares used as a denominator in calculating basic and diluted earnings per share is based on the weighted average
number of shares 1 July 2018 to 30 June 2019.
6. RECEIVABLES
Interest receivable
GST receivable
As at
30 June 2019
As at
30 June 2018
$
45,990
23,854
69,844
$
-
39,564
39,564
Terms and conditions
GST receivable can be recovered from the Australian Tax Office. No interest is applicable to any of these amounts. The maximum credit risk exposure in
relation to receivables is the carrying amount.
31
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019 Notes to the Financial Statements
7. INVESTMENTS
Financial assets designated at fair value through other
comprehensive income
Listed equities
Unlisted equities
Total financial assets designated at fair value through other
comprehensive income
As at
30 June 2019
$
57,885,463
9,621,292
67,506,755
As at
30 June 2018
$
54,342,809
-
54,342,809
Total financial assets
67,506,755
54,342,809
The total dividends received on these investments sold which are included in the Statement of Comprehensive Income were:
Dividend income:
Listed equity securities held at year-end
Listed equity securities sold during the year
30 June 2019
30 June 2018
$
1,581,257
217,279
$
825,422
65,328
During the year, the total fair value of investments sold in the normal course of the business and to preserve capital were:
30 June 2019
30 June 2018
$
$
57,885,463
9,621,292
54,342,809
-
8,414,843
1,697,066
As at
30 June 2019
As at
30 June 2018
$
94,122
-
1,821
4,000
723,514
823,457
$
69,445
2,953,362
9,321
4,000
4,193
3,040,321
Fair value at disposal date
Listed equity securities
Unlisted equity securities
Gain on disposal after tax
Listed equity securities
8. PAYABLES
Management fees payable
Performance fees payable
Directors fees payable
Other payable
Due to brokers - payable for securities purchased
32
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019 Notes to the Financial Statements
9. ISSUED CAPITAL
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number
of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is
entitled to one vote, and upon a poll each share is entitled to one vote.
Capital risk management
The Company’s policy is to maintain a strong capital base so as to maintain investor and market confidence. The overall strategy remains
unchanged. To achieve this, the Board of Directors monitor the monthly NTA results, investment performance and share price movements.
The Board is focused on maximising returns to shareholders with capital management a key objective of the Company. The Company is not
subject to any externally imposed capital requirements.
Options
22,511,173 ordinary shares in the Company and 26,732,673 secondary options were issued during the year following the exercise of the
same number of initial options at an exercise price of $1.25 per option. The initial options expired on 10 December 2018. The Company has
26,732,673 secondary options on issue exercisable at $1.50 on or before 10 December 2021.
(a) Movements in ordinary share capital
Opening balance
Shares buy-back
Transactions costs on shares acquired under buy-
back
Income tax on transaction costs
Shares issued upon the exercise of options
Costs of issued capital, net of tax
Closing balance
(b) Options issued
Opening balance
Options exercised during the year
Options not taken up as at date of expiry
Secondary options issued upon exercise of initial
options
Closing balance
30 June 2019
30 June 2018
Units
$
Units
$
40,197,445
(3,312,297)
-
-
22,511,173
40,904,728
24,151,290
36,812,934
(836,989)
36,594,817
(962,681)
(8,227)
2,262
-
-
(1,981)
-
4,221,500
-
5,276,875
(2,302)
59,396,321
65,050,053
40,197,445
40,904,728
32,607,000
(22,511,173)
(10,095,827)
26,732,673
26,732,673
-
-
-
-
-
36,828,500
(4,221,500)
-
-
32,607,000
-
-
-
-
-
33
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019 Notes to the Financial Statements
10. RESERVES AND RETAINED PROFITS
Retained earnings/(losses)
Balance at the beginning of the year
Net profit/(loss) attributable to members of the Company
Transfer to profit reserve
Balance at 30 June
30 June 2019
30 June 2018
$
$
(2,836,231)
566,314
(606,289)
(2,876,206)
(772,600)
(2,063,631)
-
(2,836,231)
(b) Profits reserve
The reserve is made up of amounts transferred from current and retained earnings that are preserved for future dividend payments.
121,720
Balance at the beginning of the year
(121,720)
Dividends paid
-
Transfer from retained earnings
-
Balance at 30 June
-
(606,289)
606,289
-
(c) Capital profits reserve
The reserve records gains or losses arising from disposal of long-term equity investments.
Balance at the beginning of the year
Realised profit on sale of investments, net of tax
Dividends paid
Balance at 30 June
3,384,226
9,038,166
(998,112)
11,424,280
(d) Asset revaluation reserve
The reserve records revaluations of long-term equity investments.
Balance at the beginning of the year
Movement in fair value of long-term equity investments, net of tax
Realised profit on sale of investments, net of tax transferred to capital
profits reserve
Balance at 30 June
15,954,210
2,520,513
(9,038,166)
9,436,557
1,944,229
1,684,377
(244,380)
3,384,226
4,773,152
12,865,435
(1,684,377)
15,954,210
11. AUDITOR'S REMUNERATION
During the year the following fees were paid or payable for services provided by the auditor of the Company, its related practices and non-
related audit firms:
Pitcher Partners
Audit and other assurance services
Audit and review of financial statements
Total remuneration for audit and other assurance services
Taxation Services
Total remuneration of Pitcher Partners
30 June 2019
30 June 2018
$
$
42,000
42,000
8,250
50,250
54,172
54,172
16,950
71,122
The Company's Audit and Risk Committee oversees the relationship with the Company's External Auditors. The Audit and Risk Committee
reviews the scope of the audit and the proposed fee. It also reviews the cost and scope of other audit-related tax compliance services
provided by the audit firm, to ensure that they do not compromise independence.
34
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Notes to the Financial Statements
12. CASH FLOW INFORMATION
(a) Reconciliation of cash
For the purposes of the statement of financial position and statement
of cash flows, cash and cash equivalents comprise:
Cash at bank
Total cash and cash equivalents
(b) Reconciliation of net profit/(loss) attributable to members of
the Company to net cash outflow from operating activities
Profit/(loss) attributable to members of the Company
Net gain on net financial liabilities at fair value through profit or loss
Net foreign exchange realised loss
Income tax benefit
Net change in receivables
Net change in payables
Net cash used in operating activities
As at
30 June 2019
$
As at
30 June 2018
$
22,525,023
22,525,023
11,572,347
11,572,347
365,312
(1,035)
-
(19,040)
(30,280)
(2,936,185)
(2,621,228)
(3,129,980)
(126,984)
70,505
(508,634)
(20,918)
1,875,054
1,840,957
13. RELATED PARTY TRANSACTIONS
All transactions with related entities were made on normal commercial terms and conditions no more favourable than transactions
with other parties unless otherwise stated.
(a) Management and Performance Fees
The Company has outsourced its investment management function to Ryder Investment Management Pty Limited (the
"Manager") a company controlled by Peter Constable and David Bottomley. The Manager is privately owned and was
incorporated in November 2008.
(i)
Management fee
The Manager is entitled to be paid a management fee equal to 1.25% p.a. (plus GST) of the Portfolio Net Asset Value. The
management fee is paid monthly in arrears.
(ii) Performance fee
The Manager is entitled to receive a performance fee of 20% (plus GST) of the outperformance of the Portfolio above the
Benchmark. The Benchmark is the RBA Cash Rate plus 4.25%. The performance fee is accrued monthly but is not paid
until the end of each 12 month period ending on 30 June (Performance Calculation Period).
Management and performance fees paid to the Manager during the year were as follows:
Management fees paid and payable during the year
Performance fees paid during the year
Management fees payable at year end
30 June 2019
30 June 2018
$
1,080,946
-
94,122
$
773,639
2,953,362
69,445
35
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Notes to the Financial Statements
13. RELATED PARTY TRANSACTIONS (CONTINUED)
(b)
Remuneration of Directors and Other Key Management Personnel
In accordance with Section 300A of the Corporations Act 2001, all detailed information regarding the remuneration of Directors
and other key management personnel has been included in the Remuneration Report in the Directors' Report of the Annual
Report.
A summary of the remuneration of Directors and other key management personnel for the year is set out below:
Cash salary, fees and commissions
Short-term employee benefits
Superannuation
Post-employment benefits
Total employment benefits
(c) Shareholdings
2019
Ordinary Shares
Peter Constable¹
David Bottomley¹
Ray Kellerman
2018
Ordinary Shares
Peter Constable¹
David Bottomley¹
Ray Kellerman
30 June 2019
30 June 2018
$
31,963
31,963
3,615
3,615
35,578
$
27,397
27,397
2,603
2,603
30,000
Opening balance
Acquisitions/
Options Exercised
Shares acquired /
(disposed)
Balance at 30
June 2019
5,378,500
2,145,000
510,000
8,033,500
3,062,500
1,130,000
510,000
4,702,500
-
(252,000)
-
(252,000)
8,441,000
3,023,000
1,020,000
12,484,000
Opening balance
Acquisitions/
Options Exercised
Shares acquired /
(disposed)
Balance at 30
June 2018
4,978,500
1,967,500
510,000
7,456,000
400,000
172,500
-
572,500
-
5,000
-
5,000
5,378,500
2,145,000
510,000
8,033,500
1. Director and shareholder (>20%) of Ryder Investment Management Pty Limited which has power to control the voting rights as a discretionary investment manager. As at the date of incorporation one share in the Company
was held by Ryder Investment Management Pty Ltd, a company controlled by Peter Constable and David Bottomley.
36
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Notes to the Financial Statements
13. RELATED PARTY TRANSACTIONS (CONTINUED)
(d) Options to acquire shares
2019
Options (RYDOA)
Peter Constable
David Bottomley
Ray Kellerman
2018
Options (RYDOA)
Peter Constable
David Bottomley
Ray Kellerman
2019
Options (RYDO)
Peter Constable
David Bottomley
Ray Kellerman
2018
Options (RYDO)
Peter Constable
David Bottomley
Ray Kellerman
Opening balance
Issued/ Acquired
Lapsed/ Exercised
Balance at 30
June 2019
400,000
172,500
-
572,500
3,062,500
852,500
510,000
4,425,000
-
-
-
-
3,462,500
1,025,000
510,000
4,997,500
Opening balance
Issued/ Acquired
Lapsed/ Exercised
Balance at 30
June 2018
-
-
-
-
400,000
172,500
-
572,500
-
-
-
-
400,000
172,500
-
572,500
Opening balance
Issued/ Acquired
Lapsed/ Exercised
Balance at 30
June 2019
4,562,500
1,795,000
510,000
6,867,500
-
-
-
-
(4,562,500)
(1,795,000)
(510,000)
(6,867,500)
-
-
-
-
Opening balance
Issued/ Acquired
Lapsed/ Exercised
Balance at 30
June 2018
4,962,500
1,967,500
510,000
7,440,000
-
-
-
-
(400,000)
(172,500)
-
(572,500)
4,562,500
1,795,000
510,000
6,867,500
14. CONTINGENT LIABILITIES AND COMMITMENTS
As at 30 June 2019 and 30 June 2018, the Company had no contingent liabilities or commitments.
37
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Notes to the Financial Statements
15. DIVIDENDS
On 7 August 2018, the Directors declared a fully franked dividend of 2.00 cent per share paid on 19 October 2018 on ordinary shares
as at record date 5 October 2018.
On 21 February 2019, the Directors declared a fully franked dividend of 1.00 cent per share paid on 25 March 2019 on ordinary
shares as at record date 11 March 2019.
On 9 August 2019, the Directors declared a fully franked dividend of 3.0 cent per share which will be paid on 4 September 2019 on
ordinary shares held as at record date 15 August 2019 (ex-dividend date of 14 August 2019).
30 June 2019
30 June 2018
Dividend franking account
Opening balance of franking account
Franking credits on dividends received
Franking credits on dividends paid
Tax payment made
Closing balance of franking account
Franking credits on tax payable in respect of the current period's profits
Adjusted franking account balance
$
649,366
415,811
(608,566)
1,386
457,997
3,150,713
3,608,710
$
201,819
267,225
(143,825)
324,147
649,366
(379,715)
269,651
The impact on the dividend franking account of the dividends proposed after balance sheet date but not recognised as a liability is
to increase it by $3,150,713.
The Company's ability to pay franked dividends is dependent upon the receipt of franked dividends from investments and the
payment of tax.
16. SEGMENT INFORMATION
The Company has only one reportable segment and one industry. It operates predominantly in Australia and in the securities
industry. It earns revenue from dividend income, interest income and other returns from the investment portfolio. The Company
invests in different types of securities, as detailed at Note 7 Investments, and Note 3 Fair Value Measurement.
17. EVENTS SUBSEQUENT TO REPORTING DATE
No matters or circumstances have arisen since the end of the period which significantly affected, or may significantly affect, the
operations of the Company, the results of those operations or the state of affairs of the Company in future financial years.
38
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Director's Declaration
The Directors declare that:
(a) In the Directors' opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001,
including compliance with Accounting Standards, and giving a true and fair view of the financial position as at 30 June 2019 and
performance of the Company, for the year ended 30 June 2019;
(b) In the Directors' opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable;
(c) In the Directors' opinion, the attached financial statements are in compliance with International Financial Reporting Standards, as
stated on Note 1(b) of the financial statements;
(d) The Directors have been given the declarations required by S.295A of the Corporations Act 2001; and
(e) The remuneration disclosures contained in the Remuneration Report comply with S300A of the Corporations Act 2001.
Signed in accordance with a resolution of the directors made pursuant to S.295(5) of the Corporations Act 2001.
On behalf of the Directors
Peter Constable
Chairman
Ryder Capital Limited
Sydney, 27 August 2019
39
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Independent Auditor's Audit Report to the Members
Independent Auditor’s Report
To the Members of Ryder Capital Limited
ABN 74 606 695 854
Report on the Audit of the Financial Report
Qualified Opinion
Level 16, Tower 2 Darling Park
201 Sussex Street
Sydney NSW 2000
Postal Address
GPO Box 1615
Sydney NSW 2001
p. +61 2 9221 2099
e. sydneypartners@pitcher.com.au
We have audited the financial report of Ryder Capital Limited (“the Company”), which comprises
the statement of financial position as at 30 June 2019 the statement of profit or loss and other
comprehensive income, statement of changes in equity and statement of cash flows for the year
then ended, and notes to the financial statements, including a summary of significant accounting
policies, and the directors’ declaration.
In our opinion, except for the matter referred to in the Basis for Qualified Opinion section of our
report, the accompanying financial report of Ryder Capital Limited, is in accordance with the
Corporations Act 2001, including:
(a) giving a true and fair view of the Company’s financial position as at 30 June 2019 and of its
To be supplied
performance for the year then ended; and
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Qualified Opinion
The Company’s investment in Updater Inc., is being carried at $9,621,292 on the statement of
financial position as at 30 June 2019 and is classified as a level 3 investment as a result of it
delisting from the Australian Securities Exchange during the year, as described in Note 3. We
also note that an unrealised gain (net of tax) of $3,427,156, in respect of Updater Inc. is recorded
in the Asset Revaluation Reserve as at 30 June 2019. Updater Inc. is now a private company and
there is a lack of observable private market or other data to assist in deriving a carrying value
for this investment. Accordingly as at the date of this report, we were unable to satisfy ourselves
by alternative means concerning the carrying value of the Company’s investment in Updater Inc..
Since the valuation of investments enters into the determination of the financial position of the
Company, we were unable to determine whether adjustments might have been necessary to
the current year’s movement
investments recorded through other
comprehensive income in the statement of profit or loss and other comprehensive income and
the fair value of investments recorded on the statement of financial position.
in fair value of
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Company in accordance with
the auditor independence requirements of the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of
Ethics for Professional Accountants “the Code” that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
Adelaide Brisbane Melbourne Newcastle Perth Sydney
40
Pitcher Partners is an association of independent firms.
An independent New South Wales Partnership. ABN 17 795 780 962. Liability limited by a scheme approved under Professional Standards Legislation.
Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
pitcher.com.au
40
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Independent Auditor's Audit Report to the Members
We confirm that the independence declaration required by the Corporations Act 2001, which
has been given to the directors of Ryder Capital Limited, would be on the same terms if given to
the directors as at the time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our qualified opinion.
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 of the current year. These matters were
addressed in the context of our audit of the financial report as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
How our audit addressed the matter
Existence and valuation of Financial Instruments
Refer to Note 3 Fair Value Measurement, Note 7: Investments
We focused our audit effort on the valuation
and existence of the Company’s financial
assets as they represent the most significant
driver of the Company’s Net Tangible Assets
and Total Comprehensive Income.
Our procedures included, amongst others:
▪ Obtaining an understanding of the
investment management process and
controls;
To be supplied
The majority of the Company’s investments
are considered to be non-complex in nature
with fair value based on readily observable
data from the ASX or other observable
markets. Consequently, these investments
are classified under Australian Accounting
Standards as either “level 1” (i.e. where the
valuation is based on quoted prices in the
market) and “level 3” (i.e. where inputs are
unobservable).
▪ Reviewing and evaluating the independent
audit report on internal controls (ASAE
3402 Assurance Reports on Controls at a
Service Organisation) for the period 1 July
2018 to 30 June 2019 for the Custodian;
▪ Obtaining a confirmation of the investment
holdings directly from the Custodian;
▪ Recalculating and assessing the Company’s
valuation of individual investment holdings
to independent pricing sources for Level 1
investments. For level 3 investments where
there was no observable market data,
obtaining and assessing other relevant
valuation data;
▪ Evaluating the accounting treatment of
revaluations of financial assets for
current/deferred tax and unrealised gains
or losses; and
▪ Assessing the adequacy of disclosures in
the financial statements.
Pitcher Partners is an association of independent firms.
ABN 17 795 780 962.
An independent New South Wales Partnership.
41
41
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Independent Auditor's Audit Report to the Members
include
the Company and
Our procedures included, amongst others:
▪ Obtaining an understanding of and
evaluating the processes and controls for
calculating the management and
performance fees;
Accuracy and Completeness of Management and Performance Fees
Refer to Note 9: Payables, Note 13: Related party transactions and Remuneration report
We focused our audit effort on the accuracy,
completeness and existence of management
and performance fees as they are significant
expenses of
their
calculation requires adjustments and key
company
inputs. Adjustments
dividends, tax payments, capital raisings,
reductions and other
capital
relevant
expenses. Key
include portfolio
inputs
index benchmarking and
movements,
in
applying the correct set percentage
Investment
accordance
with
Management Agreement between
the
Company and the Investment Manager.
▪ Making enquiries with the Investment
Manager and Those Charged With
Governance with respect to any significant
events during the period and associated
adjustments made as a result, in addition
to reviewing ASX announcements;
▪ Testing of adjustments such as company
dividends, tax payments, capital raisings,
capital reductions as well as any other
relevant expenses used in the calculation
of management and performance fees;
▪ Testing key inputs used in the calculation
To be supplied
the
In addition, to their quantum, as these
transactions are made with related parties,
there are additional inherent risks
associated with these transactions,
including the potential for these
transactions to be made on terms and
conditions more favourable than if they had
been with an independent third-party.
of management and performance fees and
recalculation in accordance with our
understanding of the Investment
Management Agreement; and
▪ Assessing the adequacy of disclosures
made in the financial statements.
Other Information
The Directors are responsible for the other information. The other information comprises the
information included in the Company’s Annual Report for the year ended 30 June 2019, but does
not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do
not express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We have nothing to report in this
regard.
Responsibilities of the Directors for the Financial Report
42
Pitcher Partners is an association of independent firms.
ABN 17 795 780 962.
An independent New South Wales Partnership.
42
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Independent Auditor's Audit Report to the Members
The Directors of the Company are responsible for the preparation of the financial report that
gives a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001 and for such internal control as the Directors determine is necessary to
enable the preparation of the financial report that gives a true and fair view and is free from
material misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the ability of the
Company to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Directors either intend to
liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole
is free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with the Australian Auditing Standards will
always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise
professional judgement and maintain professional scepticism throughout the audit. We also:
•
To be supplied
Identify and assess the risks of material misstatement of the financial report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the Directors.
• Conclude on the appropriateness of the Directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Company’s
ability to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s report to the related disclosures in the
financial report or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company to cease to continue as a
going concern.
• Evaluate the overall presentation, structure and content of the financial report, including
the disclosures, and whether the financial report represents the underlying transactions
and events in a manner that achieves fair presentation.
We communicate with the Directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
Pitcher Partners is an association of independent firms.
ABN 17 795 780 962.
An independent New South Wales Partnership.
43
43
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Independent Auditor's Audit Report to the Members
We also provide the Directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of
most significance in the audit of the financial report of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 12 to 14 of the Directors’ Report
for the year ended 30 June 2019. In our opinion, the Remuneration Report of Ryder Capital
Limited, for the year ended 30 June 2019, complies with section 300A of the Corporations Act
2001.
Responsibilities
To be supplied
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.
S M Whiddett
Partner
27 August 2019
Pitcher Partners
Sydney
Pitcher Partners is an association of independent firms.
ABN 17 795 780 962.
An independent New South Wales Partnership.
44
44
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Top 20 Shareholders
The Shareholder information set out below was applicable at 22 July 2019.
Additional information required by the ASX Listing Rules and not disclosed elsewhere in this report, is listed below.
A. Distribution of equity securities
Investors
Shares
Holding Ranges
1 to 1000
1001 to 5000
5001 to 10000
10001 to 100000
100001 and Over
Total
13
48
43
187
97
388
B. Equity security holders
Twenty largest equity security holders
CONSVEST PTY LTD
BNP PARIBAS NOMS PTY LTD
PETER CHARLES CONSTABLE
MR TIMOTHY LINDSAY MCCAUGHEY
MR ROBERT JULIAN CONSTABLE & MRS JANET MARIE CONSTABLE
DAHO PTY LTD
CEDAR PARTY PTY LIMITED
GERICHTER SUPER INVESTMENTS PTY LTD
GERICHTER FAMILY INVESTMENTS PTY LTD
CEDAYU PTY LTD
DOOHAN SUPERANNUATION PTY LTD
DHAULAGURI PTY LTD
WORKING DOG INVESTMENTS PTY LTD
S LE M SUPERANNUATION PTY LTD
RK SYDNEY PTY LTD
MR ROBERT JULIAN CONSTABLE & MRS JANET MARIE CONSTABLE
HALE UNION PTY LTD
BS CARTER SUPERANNUATION FUND PTY LTD
LEYRTH PTY LTD
MAYUMI AND ZENTA INVESTMENTS PTY LTD
C. Substantial shareholders
Peter Charles Constable
David Harold Bottomley
6,249
172,347
384,811
7,587,822
51,055,494
59,206,723
Shares
3,666,000
2,400,000
2,000,000
1,744,000
1,700,000
1,350,000
1,200,000
1,181,100
1,120,702
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
Shares
8,441,001
3,023,001
%
0.01
0.29
0.65
12.82
86.23
100.00
%
6.19
4.05
3.38
2.95
2.87
2.28
2.03
1.99
1.89
1.69
1.69
1.69
1.69
1.69
1.69
1.69
1.69
1.69
1.69
1.69
%
14.26
5.11
D. Voting Rights
The voting rights attaching to each class of equity security are set out below:
Each share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has one vote on a
show of hands. Options do not have any voting rights until they vest and are exercised.
E. Stock exchange listing
Quotation has been granted for all of the ordinary shares and options of the Company on all Member exchanges of the ASX Limited.
F. Unquoted securities
There are no unquoted securities.
G. Securities subject to voluntary escrow
There are no securities subject to voluntary escrow.
H. Investment transactions
There were 215 investment transactions during the period, total brokerage paid on these transactions was $91,120.34.
45
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019
Corporate Directory
Directors
Peter Constable (Chairman)
David Bottomley
Ray Kellerman
Company Secretary
David Bottomley
Registered Office
Level 25
88 Phillip Street
Sydney NSW 2000
Contact Details
P: (02) 8211 2791
F: (02) 8211 0555
W: www.rydercapital.com.au
Share Registry
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000
P: 1300 554 474
W: www.linkmarketservices.com.au
Auditor
Pitcher Partners
Level 16, Tower 2 Darling Park
201 Sussex Street
Sydney NSW 2000
P: (02) 9221 2099
Stock Exchange Listings
Ryder Capital Limited securities are listed on the Australian Stock
Exchange under the following exchange codes:
Shares RYD
Options RYDOA
46
Ryder Capital Limited Annual ReportFor the year ended 30 June 2019 T +61 (2) 8211 2791
F +61 (2) 8211 0555
Level 25, 88 Phillip Street
Sydney NSW 2000
E enquiries@rydercapital.com.au
W www.rydercapital.com.au
ABN 74 606 695 854