Ryder Capital Limited
Appendix 4E Final Report
For the year ended 30 June 2020
Details of Reporting Period
Current:
Previous corresponding:
Year ended 30 June 2020
Year ended 30 June 2019
Results for announcement to the market
Revenue from ordinary activities
Profit from ordinary activities
before tax attributable to members
Profit from ordinary activities
after tax attributable to members
Total comprehensive income
for the period attributable to members
Details of dividends
$
Movement
% Movement
3,392,069
392,995
752,318
7,677,559
Up
Up
Up
Up
91%
8%
33%
149%
2020 Interim dividend (cents per share) - paid on 23 March 2020
2020 Final dividend (cents per share)
2.0
3.0
2.0
3.0
27.5%
30%
Cents per share
Franked amount
per share
Tax rate for
franking
Final Dividend Dates
Declaration date
Ex-dividend date
Record date
Payment date
Dividend Reinvestment Plan (DRP)
N/A
Net Tangible Assets
14 August 2020
19 August 2020
20 August 2020
09 September 2020
Net Tangible Assets (per share) backing before tax*
Net Tangible Assets (per share) backing after tax*
30 June 2020
30 June 2019
1.64
1.49
1.50
1.40
* Post exercise of Nil options in FY20 and 22,511,173 options in FY19, respectively at $1.25; and buyback of 639,598 shares in
FY20 and 3,312,297 in FY19
Audit
This report is based on the financial report which has been audited. All the documents comprise the information required by
Listing Rule 4.3A.
Annual General Meeting (AGM)
The AGM is to be held on 22 October 2020.
Signed on behalf of Ryder Capital Limited
Peter Constable Chairman
Ryder Capital Limited Sydney, 14 August 2020
i
ABN 74 606 695 854
Annual report
For the year ended 30 June 2020
Contents
Page
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
iii
1
2
9
18
19
20
21
22
23
42
43
48
49
Chairman’s Letter to Shareholders
Dear fellow Shareholders,
In keeping with previous years, I would like to take the
opportunity to remind Shareholders what we are setting
out to achieve. Our aim is to provide Shareholders with a
concentrated portfolio of securities 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 what we consider to be
outstanding and, in some cases, unique opportunities.
We believe that our disciplined and patient approach will
continue to deliver strong absolute risk-adjusted returns over
the long term, whilst preserving shareholder capital in times
of heightened uncertainty and volatility.
Ryder Capital Limited (Ryder or Company) has had another
successful year, its fourth full financial year since listing in
September 2015. Portfolio performance was strong both
nominally and relatively in what was broadly a difficult
year for equity markets. Total comprehensive income after
tax increased 149% from $3,086,827 to $7,677,559. Gross
portfolio performance of 16.1%, comfortably exceeded the
Company’s performance benchmark.
During the year, the Manager sold several long-term portfolio
investments on valuation grounds and realised material
gains as a consequence of two takeovers which are reflected
in the Company’s capital profits reserve increasing 48%
from $11,424,280 to $16,944,472 which when added to the
increase to company’s profit reserve to $1,916,989 takes total
distributable profits to $18,861,461 equivalent to $0.321 per
share. This increase is net of dividends paid during the period
of $2,956,336.
Dividends for FY20 totalled $0.05 fully franked per share,
an increase of $0.01 or +25% on the prior year. With
approximately $0.321 cents per share of distributable profits
at 30 June 2020, the Company is in a healthy position to
continue to pay steady to increasing fully franked dividends
over time.
At 30 June 2020 approximately 82.1% of the Company’s
capital was deployed in equities and 17.9% held in cash, term
deposits or other liquid investments.
As the Company’s share price continued to trade at a discount
to Net Tangible Assets (NTA) the Company’s buyback took
advantage of this mis-pricing via the accretive purchase of
639,598 ordinary shares for an outlay of $827,182 equating to
an average buyback price of $1.2933 per share. The Company
will continue to buy back shares where it is accretive,
balanced against the benefits of holding available cash for
investing in generating further performance and growth in
the Company’s NTA.
When reviewing the Company’s investment performance
for FY20 we focus on measuring the Company’s pre-tax
undiluted NTA period to period, which once adjusted for
dividends resulted in a gain of 12.34%. 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.
1
The Company’s share price increased from $1.25 to $1.33
during the year. When taking into account the $0.05 fully
franked dividends paid during the year, the share price return
of 10.40% for FY20 compares to the undiluted pre-tax NTA
return of 12.34% reflecting a small widening of the discount to
NTA, though noting this analysis excludes the tax benefits of
franking credits received.
It remains disappointing to my fellow Directors and I to
see the share price trade at a consistent discount to NTA.
There are a number of factors at play, some of which are
manageable by us while others will naturally resolve over
the medium term as we continue to demonstrate the
Company’s superior risk-adjusted outperformance of equity
market indices and that of alternative Investment Managers.
The prospective exercise of Secondary Options (RYDOA)
in December 2021 will have a substantially less dilutionary
impact on the Company’s expanded capital base than the first
option series (RYDO) had and as such should be less of a drag
on both NTA and share price performance.
As the investment in Updater Inc. (Updater) involves an
unlisted investment, underlying operational progress and
value accretion is not easily reflected in the Company’s NTA
until such time as a liquidity event can validate progress. Your
Investment Manager, together with the Directors have formed
a view that the value of Updater remains fairly reflected in the
Company’s accounts and that Updater remains prospective as
a contributor to future portfolio performance.
The Company enters FY21 having made a strong start in July
+6.91%, with a balanced portfolio of investments that are
well positioned to perform in what is inevitably going to be a
more challenging environment to generate returns. Cash and
equivalents are currently at 17.9% providing the Investment
Manager substantial flexibility to capitalise on opportunities
as they arise.
Following continued positive investment performance, large
realised capital gains flowing through to the capital profits
reserve and together with a positive start and outlook to
FY21, the Board declared a $0.03 fully franked final dividend
bringing the full year FY20 dividend to $0.05 per share fully
franked, an increase of 25% from FY19.
The Annual General Meeting (AGM) will be held on 22
October 2020 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
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020 Investment Manager's Report
Gross portfolio performance for the year to 30 June 2020 (FY20) was 16.1%. This return was achieved whilst holding an average
cash balance though the year of approximately 18.65%. 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 2020 which takes into account the historical NTA dilution caused by the exercise of 22.5m options in
December 2018 and net of capital reductions as a result of the Company’s share buyback.
3 Months
(%)
6 Months
(%)
1 Year
(%)
3 Years
(% per
annum)
Since
Inception(2)
(%)
Since
Inception(2)
(% per annum)
Gross Portfolio Performance
22.86
3.33
16.09
20.40
126.31
NTA Return (Pre-tax Undiluted)(3)
20.64
2.46
12.34
15.68
89.57
NTA Return (Pre Tax)(1)
20.64
2.61
12.62
12.77
75.60
Hurdle
RBA Cash Rate + 4.25% Return
Excess Return
NTA Return (Pre-tax Undiluted)(3) -
RBA Cash Rate + 4.25%
1.10
2.31
4.93
5.47
29.97
19.54
0.14
7.41
10.21
59.59
18.65
14.33
12.51
5.64
8.69
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.
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.
In keeping with previous years, we call out some of our peers who continue to present “gross” portfolio returns for the
purposes of measuring investment performance. We consider these practices to be misleading given they artificially inflate
returns as they deliberately exclude the fees and expenses incurred in achieving their returns and therefore comparing theirs
to ours is not meaningful in our opinion.
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 2020
1 year
(%)
3 years
(% per annum)
Since Inception(1)
(% per annum)
Ryder Capital - Gross Portfolio Performance
Ryder Capital (Pre-tax undiluted NTA)
Ryder Capital (Pre-tax NTA)
S&P / ASX All Ordinaries Accumulation
S&P / ASX Small Ordinaries Accumulation
RBA Cash Rate
Ryder Capital Ltd Hurdle Rate
Source: Bloomberg + Mainstream
1. Inception Date is 22nd September 2015
2
16.09
12.34
12.62
-7.21
-5.67
0.68
4.93
20.40
15.68
12.77
5.43
6.10
1.22
5.47
18.65
14.33
12.51
7.55
9.29
1.39
5.64
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
Investment Manager's Report
Portfolio – 30 June 2020
Name
Ticker
Total Value ($)
Total (%)
MacMahon Holdings Ltd
Updater Inc
NextDC Ltd
Betmakers Technology Group Ltd
Cash Converters International Ltd
SRG Global Ltd
3P Learning Ltd
Aurelia Metals Ltd
Capitol Health Ltd
BCI Minerals Ltd
Urbanise.com Ltd
Fineos Corporation Holdings PLC - CDI
Imdex Ltd
Flexigroup Ltd
Terragen Holdings Ltd
Jupiter Mines Ltd
Countplus Ltd
Vita Group Ltd
Tubi Ltd
Ramelius Resources Ltd
Other Equities
Total Equities
Cash and Cash Equivalents
Total Portfolio Pre Tax
Portfolio Performance
MAH
UPD
NXT
BET
CCV
SRG
3PL
AMI
CAJ
BCI
UBN
FCL
IMD
FXL
TGH
JMS
CUP
VTG
2BE
RMS
10,572,112
9,859,225
8,398,000
6,824,090
4,838,750
4,244,973
3,783,382
3,352,203
2,508,550
2,505,108
2,324,244
2,092,791
1,997,715
1,968,750
1,610,000
1,560,720
1,547,354
1,541,808
1,486,568
1,395,860
5,859,741
80,271,942
17,499,484
97,771,426
10.81
10.08
8.59
6.98
4.95
4.34
3.87
3.43
2.57
2.56
2.38
2.14
2.04
2.01
1.65
1.60
1.58
1.58
1.52
1.43
5.99
82.10
17.90
100
Gross portfolio performance for the period of 16.1% comfortably exceeded our performance hurdle and that of all other Australian
equity market indices despite a high allocation to cash and the COVID-19 induced market volatility.
Tactically, the Portfolio was well positioned for the COVID-19 market sell off in March with approximately 24.3% held in cash as at 29
February 2020. With the downturn came a loss in market liquidity in many of our holdings, causing us to utilise our hedging ability by
selling Share Price Index futures (SPI) to manage market risk, successfully adding a net 1.16% to gross performance.
Strong gains in our long held positions of Betmakers Technology Group Limited, NextDC Limited and more recently acquired
position in MacMahon Holdings Limited were partially offset by mark to market losses in SRG Global Limited and Tubi Limited and a
realised loss in Comet Ridge Limited where we exited entirely.
Despite strategic and operational progress at Updater Inc., the Directors have assessed that there was no change in the underlying
carrying USD value per share.
3
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020 Investment Manager's Report
FY20 Top 3 Contributors and Detractors
Betmakers Technology Group Ltd
NextDC Ltd
Macmahon Holdings Ltd
Comet Ridge Ltd
Tubi Ltd
SRG Global Ltd
$(6,000,000)
$(4,000,000)
$(2,000,000)
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
For FY20 the portfolio generated $28,188,931 of capital gains (realised and unrealised) which were offset by capital losses
(realised and unrealised) of $14,852,493 resulting in a net capital gain before interest and dividend income of $13,336,438 for
the year.
FY20 dividend income received was $2,395,790 fully franked while interest income received on term deposits and cash was
$158,191.
At 30 June 2020, approximately 82% of the Company’s capital was in equities with approximately 18% held in cash, term
deposits and net receivables.
Portfolio Activity
During the year we exited our long held investment in Pacific Energy Limited (PEA) by way of a takeover. Despite a long
holding period where PEA traded consistently and materially below its intrinsic worth, the emergence of motivated buyers
and PEA’s attractive market position and annuity style income resulted in a competitive process that culminated in a takeover
valuation approximately double our book cost inclusive of an attractive franking credit component. Our investment in media
company QMS Limited was short lived with a takeover by Quadrant Private Equity taking us out in under six months at what
we considered to be only fair value at the time, but now in hindsight and post COVID-19 a good price. On valuation grounds
we reduced our holdings in NextDC Limited prior to COVID-19 and then with the work from home cloud computing dynamics
enhancing NXT’s prospects, we used the April 2020 capital raising to rebuild our exposure at attractive prices. Consistent with
our broader concerns around currency devaluations driven by central bank money printing we increased our defensive posture
with increased exposure to gold through holdings in Australian gold producers, Gold Road Limited, Ramelius Resources
Limited and Silver Lake Resources Limited which together with a rebuilt position in Aurelia Metals Limited represents portfolio
exposure of ~8% to gold.
Additional exposure was acquired in SRG Global Limited as it stumbled through successive earnings downgrades and an
underperforming share price. New additions during the period include 3P Learning Limited, Cash Converters Intl Limited,
Fineos Corporation Holdings PLC - CDI and Imdex Limited.
Portfolio Strike Rate
Shareholders will recall our interest in presenting our Strike Rate form. Consistent with the analysis presented last year and
given the portfolio has now completed its fourth full financial year, the measures set our below are based only on realised
profits since inception.
4
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020 Investment Manager's Report
Strike Rate Analysis – Inception to Date (30 June 2020)
Strike Rate Analysis
Gross Realised Portfolio Profits
Gross Realised Portfolio Losses
Net Realised Portfolio Profit
Win/Loss
Strike Rate
Portfolio
$37,063,028
-$9,020,474
$28,042,554
75.66%
$4.11
Note: ignores dividends, interest, taxes and expenses and relies on unaudited management analysis
Referring to the analysis above, the portfolio segment identifies the Portfolio’s gross realised profits since inception to 30 June
2020 of $37,063,028 compared to the Portfolio’s gross realised losses since inception of ($9,020,474). The net of these results is
a net realised portfolio profit since inception of $28,042,554.
Observing the above, we note that:
1.
the net realised portfolio profit of $28,042,554 is 75.66% of the gross realised portfolio profit of $37,063,028, that
is we retained ~75.66% of gains, or thinking of it as a decision ratio, our poor decisions eroded our successful
decisions by approximately 24.34%; and
2.
that total profits divided by total losses for the period (since inception to 30 June 2020) is 4.11x, indicating that for
every $4.11 profit made, $1.00 was lost.
Given the volatility and uncertainty FY20 has presented, our ability to maintain a high strike rate is pleasing. While this number
is slightly lower than last year, there are considerable mark-to-market gains in the portfolio yet to be realised which will further
strengthen the strike rate in the future.
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.
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. Typically, the two travel together, that is risk and return correlate over time since additional risk
should be compensated for with additional returns
The following chart plots returns against risk and helps to illustrate the quality of returns achieved. The ideal position is
towards the top left corner with the highest returns and lowest level of risk. Over the past three years, Ryder has outperformed
the index and other domestic managers, generating materially higher returns for a similar level of risk.
.
)
.
a
p
%
(
n
r
u
t
e
r
t
e
n
x
a
t
-
e
r
P
20.00%
15.00%
10.00%
5.00%
0.00%
-5.00%
-10.00%
RYD
RYD
All Ords Index
Small Ords Index
Domestic equities manager median
1 year return
3 year return
Domestic equities manager median
All Ords Index
Small Ords Index
0.00%
5.00%
10.00%
Pre-tax net return standard deviation
15.00%
20.00%
25.00%
30.00%
35.00%
1. Returns are calculated 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. A sample of 40 domestic equity managers are included in this analysis taken from the Bell Potter and Morningstar research universe. 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 LIC’s based on strategy, size and past performance
5
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
Investment Manager's Report
Risk and return can be analysed using two well known ratios, the first being the Sharpe Ratio which is calculated as excess
return over a benchmark divided by volatility (standard deviation). 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
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. 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:
Sharpe ratio
Sortino ratio
Ryder
Small Ords
Accumulation Index
All Ords
Accumulation Index
1 year
2 years
3 years
ITD
1 year
2 years
3 years
ITD
0.53
0.45
0.93
1.01
0.77
0.66
1.56
1.71
**
**
0.28
0.51
**
**
0.38
0.71
**
0.06
0.30
0.49
**
0.07
0.37
0.64
** Sharpe/Sortino ratio values which are negative are not appropriate for analysis and have therefore been excluded
Ryder’s Sharpe and Sortino ratios demonstrate superior 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 indices demonstrates Ryder's ability to deliver outperformance with less risk.
Another way to compare the level of risk between the returns of Ryder and that of the ASX market indices is to look at the
distribution of monthly returns. Whilst we do not usually focus on short term returns, it is important to note that long term
returns are made up of a series of short term returns over time and therefore should still be examined. The tables below
analyse the distribution of Ryder’s monthly returns since inception with two comparator ASX indices. On average, Ryder
significantly outperforms during negative periods for both indices consistent with the Sharpe and Sortino ratio analysis above.
This is a reflection of the importance Ryder places on assessing risk in our investment framework.
Average monthly return
Average monthly return in Small Ords positive month
Average monthly return in Small Ords negative month
Positive months
Negative months
Averag monthly return
Average monthly return in All Ords positive month
Average monthly return in All Ords negative month
Positive months
Negative months
6
RYD
1.21%
2.45%
-0.61%
56%
44%
RYD
1.21%
1.59%
-0.38%
56%
44%
Small Ords Accumulation Index
0.88%
3.71%
-3.30%
60%
40%
All Ords Accumulation Index
0.73%
2.79%
-3.38%
67%
33%
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
Investment Manager's Report
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 (48 other ASX Listed Investment Companies (LIC) from the Bell Potter 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 investment 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 to Date (ITD) returns, Sharpe and Sortino ratios in comparison to 48 other ASX LICs
(using an inception date of September 2015).
Annualised returns (September 2015 to June 2020)
20.00%
15.00%
10.00%
5.00%
0.00%
-5.00%
1.20
1.00
0.80
0.60
0.40
0.20
0.00
-0.20
-0.40
7
M
C D
N S C
CIN
A LF
P AF
CIE
G C 1
S N C
C A M
Q VE
P M C
T G G
P G F
G VF
N C C
DJ W
T O P
W A A
B KI
IB C
W A X
PIA
M LT
A LI
A R G
W A M
F G X
W
H F
C VF
PIC
K A T
E AI
E GI
AFI
CLF
H
A UI
A M
E G F
N A C
P AI
M IR
F G G
W IC
D UI
O Z G
FSI
A C Q
M FF
R Y D
Sharpe ratio (September 2015 to June 2020 - 0.25% benchmark)
M
C D
N S C
CIN
P AF
A LF
CIE
G C 1
S N C
C A M
Q VE
P G F
T O P
N C C
T G G
DJ W
P M C
B KI
W A X
W A A
G VF
M LT
A R G
H F
W A M
W
W IC
N A C
CLF
F G X
C VF
PIC
E GI
A UI
PIA
IB C
O Z G
A LI
AFI
H
M IR
A M
E AI
K A T
A C Q
FSI
D UI
P AI
M
M F
E G F
F G G
R Y D
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020 Investment Manager's Report
Sortino ratio (September 2015 to June 2020 - 0.25% benchmark)
2.00
1.50
1.00
0.50
0.00
-0.50
M
C D
N S C
CIN
P AF
CIE
A LF
G C 1
S N C
C A M
Q VE
P G F
T O P
N C C
DJ W
T G G
P M C
W A A
B KI
W A X
G VF
A R G
M LT
W A M
H F
W
W IC
F G X
IB C
N A C
CLF
A UI
E GI
PIC
C VF
AFI
M IR
PIA
A LI
O Z G
A M
H
K A T
E AI
A C Q
FSI
D UI
M FF
E G F
P AI
F G G
R Y D
1. Annualised returns are calculated during the period of 30 Sep 2015 to 30 June 2020 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 annualised return above the risk free rate (0.25% p.a.) divided by standard deviation of monthly returns (annualised) for the period of 30 Sep 2015 to 30 June 2020
4. Sortino ratio is calculated as excess annualised return above the risk free rate (0.25% p.a.) divided by downside deviation of monthly returns (annualised), using a benchmark of 0.25% p.a. for the period of 30 Sep
2015 to 30 June 2020
Ryder has outperformed both absolutely and relatively on all measures.
Outlook
As we look ahead there are substantially fewer knowns and substantially more unknowns than at any other time in our recent
memory and certainly at any other time during Ryder’s existence. Investors are chasing the knowns and paying a very high
price for these which is particulary evident in growth, healthcare and technology stocks both domestically and internationally.
The worlds, regional and domestic economies are battling the COVID-19 health pandemic with the economic impacts
remaining highly uncertain in depth, breadth and timing. Geopolitical tensions are increasing beyond the US and China and as
the US enters a critical election period those tensions could intensify further with volatility likely to be directly correlated.
This backdrop is not one that should be supportive of record high asset prices however, the magic of zero interest rates and
record fiscal stimulus has forced risk aversion aside and created an environment where it seems almost anything goes. This
may go on for some time longer, as ultimately we are in uncharted waters with little in the way of fundamentals or historic
analysis to guide us.
With a mixed backdrop and divergent views we expect to see more opportunities for mispricing and opportunities for Ryder.
In the absence of sensible, value oriented opportunities we will look to increase our cash weightings, maintain or increase
our exposure to gold and other safe havens while actively looking to increase our portfolio exposure to low multiple cash
generative companies and at the same time staying away from the momentum driven high priced market stars of late.
Peter Constable
Chief Investment Officer / Portfolio Manager
David Bottomley
Portfolio Manager
8
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020 Directors' Report
Your Directors present their report on Ryder Capital Limited ("Company") for the year ended 30 June 2020.
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 later merged with MMC Asset Management Ltd in 2003 (MMC). Peter was the Chief Investment
Officer and Executive Director of MMC until June 2008.
Peter co-founded Ryder Investment Management Pty Ltd in July 2008 where he is the Chief Investment Officer. He has acted as
Executive Chairman of Ryder Capital Ltd since the Company's inception in September 2015.
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 Constable's interests in shares of the Company are included later in this report. There has been no change in
the shareholdings since year end to the date of 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 corporate finance, M&A and equity capital markets advisory. He holds a Bachelor of Arts
(Economic History) from the University of Sydney, Bachelor of Laws (Hons) 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-based investment bank GMCG, LLC from 2004 until June 2008.
David co-founded Ryder Investment Management Pty Ltd in July 2008 where he is a Portfolio Manager. He has acted as an
Executive Director of Ryder Capital Ltd since inception and currently serves on the board of Trimph Pty Ltd
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 Bottomley’s interests in shares of the Company are included later in this report. There has been no change in
the shareholdings since year end to the date of this report.
Interest in contracts
David has no interests in contracts of the Company.
9
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020 Directors' Report
Ray Kellerman - BEc , LLB, MBA, F Fin Non-Executive Director
Experience and Expertise
Ray was appointed as an Independent Director of Ryder Capital Limited in June 2015.
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 fund managers and
financial services companies including as Chairman of CountPlus Limited and Foundation Life (NZ) Limited.
Ray is an owner and Executive Director of Quentin Ayers Pty Ltd, an implemented asset consultant specialising in alternative
private market investments.
Previous appointments include Independent Chairman of ClearView Wealth, an ASX listed life insurance and financial services
company; and Independent Chairman of Credit Suisse Asset Management Australia.
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 Kellerman’s interests in shares of the Company are included later in this report. There has been no change in the
shareholdings since year end to the date of 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
Meetings Held
and Entitled to Attend
Meetings
Attended
7
7
7
7
7
7
Nomination and Corporate Governance Committee Meetings
Meetings Held
and Entitled to Attend
Meetings
Attended
2
2
2
2
2
2
Director
Peter Constable
David Bottomley
Ray Kellerman
10
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020 Audit and Risk 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
The principal activity of the Company during the year was investing in a concentrated portfolio of ASX 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.).
11
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020 Directors' Report
Review of Operations
The Company’s opening Net Asset Value (NAV) on 30 June 2019 was $83,034,684 and the closing NAV on 30 June 2020 was
$96,245,789 reflecting an increase in gross assets of $13,211,105.
During the year, the Company was able to acquire 639,598 ordinary shares for an outlay of $827,182 equating to an average
buyback price of $1.2933 per share. The Company will continue to buy back shares where it is accretive, balanced against
the benefits of holding available cash for investing in generating further performance and growth in the Company’s NTA.
Net Tangible Assets (NTA) per share before tax increased from 150.31 cents per share to 163.81 cents per share during the
reporting period. Noting this increase was after the payment of 5.0 cents per share fully franked.
In the period, the Investment Manager sold several long-term portfolio investments on valuation grounds and realised material
gains as a consequence of two takeovers which are reflected in the Company’s capital profits reserve increasing by 48% or
$5,520,192 to $16,944,472 which when added to the increase to Company’s profit reserve to $1,916,989 takes total distributable
profits to $18,861,461, equivalent to $0.321 per share. This increase is net of dividends paid during the period of $2,956,336.
At 30 June 2020 approximately 82.10% of the Company’s capital was deployed in equities with approximately 17.90% held in
cash, term deposits and net receivables.
Updater completed a debt and equity raising in December 2019 to assist with the strategic acquisition of Bridgevine LLC.
The capital raised exceeded the acquisition funding requirements, providing Updater with additional growth capital. As a
consequence of this and the impacts of COVID-19 on Updater, the Investment Manager conducted a detailed review of the
valuation of Updater as of 30 June 2020. Directors are satisfied that Updater’s business plan whilst impacted by the initial fall
in the number of movers in America during Q2 2020 remains intact and the company is well positioned to execute against its
plans as American mobility returns in the second half of 2020 and into 2021.
In March 2020, as a consequence of the COVID-19 induced currency volatility (Australian dollar versus the US dollar) the
Investment Manager requested that Directors of Ryder Capital Ltd approve a change in the underlying reporting currency of
the Updater common shares to US dollars (in order to better reflect the underlying equity value of this investment as distinct
from movements in the currency). This change created a US Dollar equity asset in the Portfolio which will allow the Investment
Manager to manage currency risk as distinct from equity risk. To date the Investment Manager has not hedged any of the US
dollar Updater exposure. This change had no material impact on the carrying value of Updater, and overall provided a net
benefit during the period equating to $237,933.
COVID-19 has brought unprecedented challenges for individuals, companies and consequentially, global equity markets. The
Investment Manager demonstrated strong nominal and relative performance in the period and successfully managed market
risk and portfolio volatility within the Company’s Investment Guidelines. The Investment Manager and the Company are
conscious of the ongoing impact and uncertainty of COVID-19 and the Portfolio has been actively managed to reduce risk while
taking advantage of attractive opportunities as they arise in this period of increased market volatility. Ryder has taken steps to
ensure that the Investment Manager is able to continue operations uninterrupted with employees having the facilities to work
from home if required.
The Company is aware of the likelihood that investee companies may continue to decrease, delay or cancel dividends. Ryder
is well positioned against dividend fluctuations as the Portfolio’s primary objective is long term capital growth with income
generation as a secondary objective. Notwithstanding, the Company’s dividend payments for the year were increased from
4.0 cents fully franked in FY19 to 5.0 cents fully franked in FY20. The Board anticipates that due to strong profit reserves,
shareholder dividends should be well insulated in the short to medium term.
Dividends
On 9 August 2019, the Directors declared a fully franked dividend of 3.00 cents per share paid on 4 September 2019 on
ordinary shares held as at record date 15 August 2019.
On 18 February 2020, the Directors declared a fully franked dividend of 2.00 cents per share paid on 23 March 2020 on
ordinary shares held as at record date 9 March 2020.
On 14 August 2020, the Directors declared a fully franked dividend of 3.00 cents per share which will be paid on 9 September
2020 on ordinary shares held as at record date 20 August 2020 (ex-dividend date of 19 August 2020).
12
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
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. During the year, the Company issued nil Secondary Options (30 June 2019: issued 26,732,673).
As at the date of this report
Initial Option over unissued ordinary shares
Secondary Option over unissued ordinary shares
-
26,732,673
Net Assets
As at 30 June 2020 the net assets of the Company were $86,928,789 (30 June 2019: $83,034,684). 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
Except in relation to the dividend declared subsequent to balance date and referred to in the Note 15, 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 (unless otherwise indicated).
13
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
Remuneration Report
This remuneration report sets out information about the remuneration of the Company’s directors for the year ended 30 June
2020, 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 2020
Director
Position
Peter Constable
Chairman
David Bottomley
Director
Ray Kellerman
Non-executive Director
Year ended 30 June 2019
Director
Position
Peter Constable
Chairman
David Bottomley
Director
Ray Kellerman
Non-executive Director
Short-term employee
benefits
Cash salary
$
Post-employment
benefits
Superannuation
$
-
-
36,530
36,530
-
-
3,470
3,470
Short-term employee
benefits
Cash salary
$
Post-employment
benefits
Superannuation
$
-
-
31,963
31,963
-
-
3,615
3,615
Total
$
-
-
40,000
40,000
Total
$
-
-
35,578
35,578
14
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020 Director Related Entity Remuneration
The Company has outsourced its investment management function to Ryder Investment Management Pty Limited (the
"Investment Manager") a company controlled by Peter Constable and David Bottomley. The Investment 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 during the year and payable to the Manager at year end 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 2020
$
1,313,629
1,416,708
102,679
Year ended
30 June 2019
$
1,080,946
-
94,122
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 2020
Director
Peter Constable1
David Bottomley1
Ray Kellerman
Opening balance
Acquisitions/
Options exercised
Shares acquired/
(disposed)
Closing balance as
at 30 June 2020
8,441,000
3,023,000
1,020,000
12,484,000
-
-
-
-
234,000
25,000
-
259,000
8,675,000
3,048,000
1,020,000
12,743,000
Options (RYDOA) as at 30 June 2020
Director
Peter Constable
David Bottomley
Ray Kellerman
Opening balance
Issued/acquired
Lapsed/exercised
3,462,500
1,025,000
510,000
4,997,500
-
-
-
-
-
-
-
-
Closing balance as
at 30 June 2020
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.
15
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020 Shares as at 30 June 2019
Director
Peter Constable1
David Bottomley1
Ray Kellerman
Options (RYDOA) as at 30 June 2019
Director
Peter Constable
David Bottomley
Ray Kellerman
Options (RYDO) as at 30 June 2019
Director
Peter Constable
David Bottomley
Ray Kellerman
Opening balance
Acquisitions/
Options Exercised
Shares Acquired/
(disposed)
Closing balance as
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)
-
8,441,000
3,023,000
1,020,000
(252,000)
12,484,000
Opening balance
Issued/Acquired
Lapsed/Exercised
400,000
172,500
-
572,500
3,062,500
852,500
510,000
4,425,000
-
-
-
-
Closing balance as
at 30 June 2019
3,462,500
1,025,000
510,000
4,997,500
Opening balance
Issued/Acquired
Lapsed/Exercised
Closing balance as
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)
-
-
-
-
1 Director and shareholder (>20%) of Ryder Investment Management Pty Ltd 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.
The options outstanding and available to Directors are on the same terms and conditions as offered to all other option holders.
End of remuneration report.
16
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020 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 contravene the independence requirements of the Corporations Act 2001 or any applicable code
of professional conduct in relation to the audit.
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 18.
Signed in accordance with a resolution of the directors.
Peter Constable
Chairman
Ryder Capital Limited
Sydney, 14 August 2020
17
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020 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 2020, 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 APES 110 Code of Ethics for Professional Accountants (including
Independence Standards).
S M Whiddett
Partner
Pitcher Partners
Sydney
14 August 2020
Adelaide Brisbane Melbourne Newcastle Perth Sydney
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
18
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
Statement of Profit or Loss and Other Comprehensive Income
Note
Year ended
30 June 2020
Year ended
30 June 2019
Investment Income
Interest income
Dividend income net of franking credits
Net gain on financial instruments at fair value through
profit or loss
Other income
Total investment income
Expenses
Management fees
Directors' fees
Performance fees
Other operating expenses
Total expenses
Profit for the year before income tax benefit
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)
$
158,191
2,395,790
820,525
17,563
3,392,069
(1,224,063)
(40,000)
(1,416,708)
(318,303)
(2,999,074)
392,995
359,323
752,318
$
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
Movement in fair value of long term equity investments,
net of tax
10(d)
6,925,241
2,520,513
Total comprehensive income for the year
7,677,559
3,086,827
Basic earnings/(losses) per share
Diluted earnings/(losses) per share
5
5
1.27 cents
1.06 cents
1.27 cents
1.06 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.
19
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020 Statement of Financial Position
Assets
Current assets
Cash and cash equivalents
Receivables
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
Retained earnings/(losses)
Profit reserve
Capital profits reserve
Asset revaluation reserve
Note
12(a)
6
7, 3
4(d)
8
4(c)
4(d)
9(a)
10(a)
10(b)
10(c)
10(d)
As at
30 June 2020
As at
30 June 2019
$
$
17,433,819
223,281
17,657,100
80,271,942
2,760
80,274,702
22,525,023
69,844
22,594,867
67,506,755
499,263
68,006,018
97,931,802
90,600,885
1,683,253
5,375,334
7,058,587
823,457
3,150,713
3,974,170
3,944,426
3,944,426
3,592,031
3,592,031
11,003,013
7,566,201
86,928,789
83,034,684
64,222,935
(5,221,011)
1,916,989
16,944,472
9,065,404
65,050,053
(2,876,206)
-
11,424,280
9,436,557
Total equity
86,928,789
83,034,684
The above Statement of Financial Position 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 2020 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 2018
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)
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)
Balance at 30 June 2019
65,050,053
(2,876,206)
752,318
-
752,318
-
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)
-
-
-
-
-
-
Transactions with owners in their
capacity as owners
Shares acquired under buy-back during the year
9(a)
(825,366)
Transactions costs on shares acquired under
buy-back
Income tax on transactions costs
Dividends provided for or paid
9(a)
9(a)
10(b),(c)
(1,725)
(27)
-
(827,118)
$
$
$
3,384,226
15,954,210
57,406,933
-
-
-
-
566,314
2,520,513
2,520,513
2,520,513
3,086,827
$
$
40,904,728
(2,836,231)
-
566,314
-
566,314
-
-
-
-
-
-
9,038,166
(9,038,166)
(606,289)
606,289
-
-
(606,289)
606,289
9,038,166
(9,038,166)
28,138,966
(3,987,676)
(8,227)
2,262
-
24,145,325
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(606,289)
(998,112)
(606,289)
(998,112)
-
-
-
-
-
-
28,138,966
(3,987,676)
(8,227)
2,262
(1,604,401)
22,540,924
11,424,280
9,436,557
83,034,684
-
-
-
-
752,318
6,925,241
6,925,241
6,925,241
7,677,559
$
-
-
-
-
-
-
-
-
-
-
7,296,394
(7,296,394)
(3,097,123)
3,097,123
-
-
(3,097,123)
3,097,123
7,296,394
(7,296,394)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,180,134)
(1,776,202)
(1,180,134)
(1,776,202)
-
-
-
-
-
(825,366)
(1,725)
(27)
(2,956,336)
(3,783,454)
Balance at 30 June 2020
64,222,935
(5,221,011)
1,916,989
16,944,472
9,065,404
86,928,789
The above Statement of Changes in Equity should be read in conjunction with the Notes to the Financial Statements which follow.
21
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020 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 2020
Year ended
30 June 2019
$
204,181
2,198,280
(1,215,506)
$
310,657
1,382,725
(982,568)
-
(2,953,362)
(40,000)
(320,220)
17,563
-
(41,147)
(354,819)
36,326
(19,040)
Net cash provided by / (used in) operating activities
12(b)
844,298
(2,621,228)
Cash flows from investing activities
Proceeds from sale of investments
Payments for purchase of investments
51,868,382
(54,020,457)
19,951,361
(28,918,381)
Net cash used in investing activities
(2,152,075)
(8,967,020)
Cash flows from financing activities
Dividends paid
Proceeds from shares issued
Payments for shares buy-back
Issue costs (paid)
(2,956,336)
-
(825,366)
(1,725)
(1,604,401)
28,138,966
(3,987,676)
(5,965)
Net cash (used in) / provided by financing activities
(3,783,427)
22,540,924
Net (decrease) / increase in cash held
(5,091,204)
10,952,676
Cash and cash equivalents at beginning of the financial year
22,525,023
11,572,347
Cash and cash equivalents at end of the financial year
12(a)
17,433,819
22,525,023
The above Statement of Cash Flows should be read in conjunction with the Notes to the Financial Statements which follow.
22
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020 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 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. 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 2020, and were authorised for issue by the Directors on
14 August 2020.
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 has 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 and Other Comprehensive Income.
Derivative financial instruments such as futures are included under this classification. The Company does 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 has irrevocably elected to present subsequent
changes in the fair value of the investments in the Statement of Profit or Loss and 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.
23
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
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 other comprehensive income. Net exchange gains and losses arising on the revaluation of long-term equity
investments are included in gains and losses presented in the Statement of Profit or Loss and Other Comprehensive Income.
(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.
24
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
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 include 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. The entity has applied the simplified approach to measure expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, a review is undertaken of the nature of the receivables, the counterparty, the
days overdue and the economic environment.
(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.
25
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
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
There are no new standards, interpretations or amendments to existing standards that are effective for the first time for the
financial year beginning 1 July 2019 that have a material impact on the Company.
(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
2020, 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 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.
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 Investment Manager is responsible for ensuring there is appropriate diversification across counterparties and that they are
of a sufficient quality rating. The Investment 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 2020 is 1.26% (2019: 1.71%).
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.
26
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
Notes to the Financial Statements
2. FINANCIAL RISK MANAGEMENT (continued)
(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.
Less than 1
month
1-6 months
6-12
months
Over 12
months
As at 30 June 2020
Trade and other payables
Due to brokers - payable for securities purchased
Total Financial Liabilities
As at 30 June 2019
Trade and other payables
Due to brokers - payable for securities purchased
Total Financial Liabilities
$
1,525,208
158,045
1,683,253
99,943
723,514
823,457
$
-
-
-
-
-
-
$
-
-
-
-
-
-
(d) Market risk
Total
$
1,525,208
158,045
1,683,253
99,943
723,514
823,457
$
-
-
-
-
-
-
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.
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 margin of safety in addition
to having set parameters regarding 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 29.
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.
27
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
Notes to the Financial Statements
2. FINANCIAL RISK MANAGEMENT (continued)
(d) Market risk (continued)
(i)
Interest rate risk (continued)
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.
Weighted
Average Effective
Interest Rate
Floating
Interest
Rate
Non
Interest
Bearing
Fixed
Interest
Rate
Total
%
$
$
$
$
1.26
17,415,941
-
-
-
17,878
223,281
70,412,717
9,859,225
17,415,941
80,513,101
-
-
1,683,253
1,683,253
1.71
22,525,023
-
-
-
-
69,844
57,885,463
9,621,292
22,525,023
67,576,599
-
-
823,457
823,457
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17,433,819
223,281
70,412,717
9,859,225
97,929,042
1,683,253
1,683,253
22,525,023
69,844
57,885,463
9,621,292
90,101,622
823,457
823,457
As at 30 June 2020
Financial Assets
Cash and cash equivalents
Trade and other receivables
Long-term equity investments:
Listed equities
Unlisted equities
Total Financial Assets
Financial Liabilities
Trade and other payables
Total Financial Liabilities
As at 30 June 2019
Financial Assets
Cash and cash equivalents
Trade and other receivables
Long-term equity investments:
Listed equities
Unlisted equities
Total Financial Assets
Financial Liabilities
Trade and other payables
Total Financial Liabilities
(ii) Other Price Risk
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.
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.
28
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
Notes to the Financial Statements
2. FINANCIAL RISK MANAGEMENT (continued)
(d) Market risk (continued)
(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 the Investment Manager’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
-10%
(8,027,194)
-10%
(6,750,676)
+10%
8,027,194
+10%
6,750,676
Income rate risk
Impact on other
comprehensive income
Foreign exchange risk
Impact on other
comprehensive income
-100 bps
-
-100 bps
-
+100 bps
-
+100 bps
-
-10%
(985,923)
-10%
-
+10%
985,923
+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
(1,742)
-100 bps
(3,962)
+100 bps
1,742
+100 bps
3,962
-10%
-
-10%
-
+10%
-
+10%
-
30 June 2020
30 June 2019
30 June 2020
30 June 2019
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.
29
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
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 2020 and
30 June 2019.
At 30 June 2020
Financial assets
Long-term equity investments
Listed investments
Unlisted investments
Total financial assets
At 30 June 2019
Financial assets
Long-term equity investments
Listed investments
Unlisted investments
Total financial assets
(b) Transfer between levels
Level 1
Level 2
Level 3
Total
$
70,412,717
-
70,412,717
$
-
-
-
$
$
-
70,412,717
9,859,225
9,859,225
9,859,225
80,271,942
Level 1
Level 2
Level 3
Total
$
57,885,463
-
57,885,463
$
-
-
-
$
$
-
57,885,463
9,621,292
9,621,292
9,621,292
67,506,755
The Investment Manager’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 2020
Transfer between levels
Unlisted investments
As at 30 June 2019
Transfer between levels
Unlisted investments
Level 1
Level 2
Level 3
$
-
$
-
Level 1
Level 2
Level 3
$
(9,621,292)
$
-
9,621,292
$
-
$
There were no transfers between levels in the fair value hierarchy at the end of the reporting period.
As at 30 June 2019, the Investment Manager had transferred the Company’s investments in listed equities from level 1 to level 3 on
the fair value hierarchy on the basis that security Updater Inc. (ASX: UPD) was removed from official list of ASX Limited on the 10
October 2018 and became an unlisted Delaware incorporated Company.
30
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
Notes to the Financial Statements
3. FAIR VALUE MEASUREMENT (continued)
(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 2020 by class of financial instrument.
Unlisted investments
Total
Opening balance – 1 July 2018
Transfer into/(out) from Level 3
Purchases
Sales
Unrealised gains recognised in the Statement of Profit or Loss and Other
Comprehensive Income
Closing balance – 30 June 2019
Transfer into/(out) from Level 3
Purchases
Sales
Unrealised gains recognised in the Statement of Profit or Loss and Other
Comprehensive Income
Closing balance – 30 June 2020
$
-
4,725,355
-
-
4,895,937
9,621,292
-
-
-
237,933
9,859,225
$
-
4,725,355
-
-
4,895,937
9,621,292
237,933
9,859,225
(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
Fair value
$
Unobservable
inputs
Range of inputs (probability-
weighted average)
Relationship of
unobservable inputs to fair
value
As at 30 June 2020
Updater Inc.
9,859,225
Last trade price
As at 30 June 2019
Updater Inc.
9,621,292
Last trade price
N/A
N/A
N/A
N/A
Updater Inc. (Updater) an unlisted Delaware incorporated company was carried at a value of A$24.875 per Common Stock as
at 30 June 2019. This was the equivalent value of its last traded ASX price (8 October 2018) for Updater post CDI to common
stock and stock consolidation at a ratio of 25:1 (CDI to Common Stock). During the period however, Ryder Investment
Management Pty Ltd (“RYDM”) decided to restate the investment into its base currency (USD) and then convert this in line with
the daily foreign exchange (FX) rate to AUD. As such, the investment is being carried at USD$17.55 per Common Stock, with a
total value of A$9.859m as at 30 June 2020 taking into account the FX movement during the year.
As at 30 June 2019, insufficient observable private market or other data was available to determine the fair value for the
Company’s Investment in Updater. As such, a qualified audit opinion was issued in the respect of this matter in the prior
year. Since then, Updater’s management have provided its shareholders with further information. Using this new information,
RYDM prepared a discounted cash flow model which supports the carrying value of the Company’s investment in Updater
as at 30 June 2020.
Valuation processes
(ii)
Portfolio reviews are undertaken regularly by the Investment Manager 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.
31
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
(iii)
Description of significant unobservable inputs to valuation
The significant unobservable inputs used in the fair value measurements categorised within Level 3 of the fair value
hierarchy, together with a quantitative sensitivity analysis as at 30 June 2020 are shown below.
Description
Unobservable inputs
Value
Sensitivity
Ordinary shares at fair value
through other comprehensive
income
5-Year Compounding
Annual Revenue Growth
rate
34.6%
5.00% increase would increase fair value
by $2,138,810 and a 5.00% decrease would
decrease fair value by $2,118,203
Discount rate
13.73%
Terminal growth rate
2.0%
1.00% increase would decrease fair value
by $773,203 and a 1.00% decrease would
increase fair value by $926,566
1.00% increase would increase fair value
by $577,704 and a 1.00% decrease would
decrease fair value by $486,948
(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 30%
(2019: 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
Tax effect on income tax rate uplift to 30%
Income tax benefit
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
Income tax benefit
(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.
30 June 2020
30 June 2019
$
$
117,899
100,461
220,952
(736,508)
42,527
(4,193)
(359,323)
91%
(902,405)
(59,253)
496,476
105,859
(359,323)
114,348
(415,811)
-
-
(201,002)
55%
(266,134)
(12,647)
14,405
63,374
(201,002)
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
(27)
(3,885,173)
(3,127,026)
(7,012,226)
(2,262)
(3,579,384)
(3,428,270)
(7,009,916)
32
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
Notes to the Financial Statements
4. TAXATION (continued)
(c) Movement in current tax liability/(assets)
Opening balance
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 30% (2019: 27.5%) on the following items:
Tax on unrealised gains on investment portfolio
Accrued interest
Dividend receivable
Movements:
Opening balance
Charged / (credited)
to profit or loss
directly to equity
Closing balance
Net deferred tax assets
Deferred tax assets comprises the estimated tax deductible at the
current income tax rate of 30% (2019: 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
33
As at
30 June 2020
As at
30 June 2019
$
3,150,713
-
(902,405)
3,127,026
5,375,334
$
(28,201)
16,778
(266,134)
3,428,270
3,150,713
3,885,173
-
59,253
3,944,426
3,579,384
12,647
-
3,592,031
3,592,031
6,051,597
59,253
293,142
3,944,426
12,647
(2,472,213)
3,592,031
113,949
(111,189)
-
2,760
499,263
(496,476)
(27)
2,760
116,871
(87,478)
469,870
499,263
515,930
(14,405)
(2,262)
499,263
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020 Notes to the Financial Statements
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
30 June 2020
30 June 2019
$
1.27 cents
1.27 cents
752,318
752,318
$
1.06 cents
1.06 cents
566,314
566,314
Weighted average number of ordinary shares used in the calculation
of basic earnings per share
59,067,077
53,381,128
Weighted average number of shares used in the calculation of diluted
earnings per share
59,067,077
53,381,128
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 2019 to 30 June 2020.
6. RECEIVABLES
Dividend recievable
Interest receivable
GST receivable
As at
30 June 2020
As at
30 June 2019
$
197,510
-
25,771
223,281
$
-
45,990
23,854
69,844
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.
34
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020 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 2020
$
70,412,717
9,859,225
80,271,942
As at
30 June 2019
$
57,885,463
9,621,292
67,506,755
Total financial assets
80,271,942
67,506,755
The total dividends received on these investments sold which are included in the Statement of Comprehensive Income were:
Dividend income compromises:
Listed equity securities held at year-end*
Listed equity securities sold during the year*
30 June 2020
30 June 2019
$
$
1,576,000
1,641,379
1,581,257
217,279
*Dividend income amounts are disclosed gross of franking credits.
During the year, the total fair value of investments sold in the normal course of the business and to preserve capital were:
Fair value at disposal date
Listed 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
30 June 2020
30 June 2019
$
$
57,611,200
19,948,910
7,296,394
8,414,843
As at
30 June 2020
As at
30 June 2019
$
102,679
1,416,708
1,821
4,000
158,045
1,683,253
$
94,122
-
1,821
4,000
723,514
823,457
35
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020 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
No options were issued during the year (2019: 26,732,673). At balance date the Company has 26,732,673 (2019: 26,732,673)
options on issue exercisable on or before 10 December 2021 for an exercise price of $1.50
(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
30 June 2020
30 June 2019
Units
$
Units
$
59,396,321
(639,598)
-
-
-
-
65,050,053
(825,366)
(1,725)
(27)
-
-
40,197,445
(3,312,297)
40,904,728
(3,987,676)
-
-
(8,227)
2,262
22,511,173
28,138,966
-
Closing balance
58,756,723
64,222,935
59,396,321
65,050,053
(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
26,732,673
-
-
-
Closing balance
26,732,673
-
-
-
-
-
32,607,000
(22,511,173)
(10,095,827)
26,732,673
26,732,673
-
-
-
-
-
36
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020 Notes to the Financial Statements
10.
RESERVES AND RETAINED PROFITS
(a) 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 2020
30 June 2019
$
$
(2,876,206)
752,318
(3,097,123)
(5,221,011)
(2,836,231)
566,314
(606,289)
(2,876,206)
(b) Profits reserve
The reserve is made up of amounts transferred from current and retained earnings that are preserved for future dividend
payments.
Balance at the beginning of the year
Dividends paid
Transfer from retained earnings
Balance at 30 June
-
(1,180,134)
3,097,123
1,916,989
(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
(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
11.
AUDITOR'S REMUNERATION
11,424,280
7,296,394
(1,776,202)
16,944,472
9,436,557
6,925,241
(7,296,394)
9,065,404
-
(606,289)
606,289
-
3,384,226
9,038,166
(998,112)
11,424,280
15,954,210
2,520,513
(9,038,166)
9,436,557
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 2020
30 June 2019
$
$
65,587
65,587
14,405
79,992
42,000
42,000
8,250
50,250
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.
37
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020 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 inflow/(outflow) from operating activities
Profit/(loss) attributable to members of the Company
Net gain on financial instruments at fair value through profit or loss
Income tax benefit
Net change in receivables
Net change in payables
Net cash provided by / (used in) operating activities
As at
30 June 2020
$
As at
30 June 2019
$
17,433,819
17,433,819
22,525,023
22,525,023
392,995
(820,525)
-
(153,437)
1,425,265
844,298
365,312
(1,035)
(19,040)
(30,280)
(2,936,185)
(2,621,228)
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 "Investment 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 Investment 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 Investment 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 during the year and payable to the Investment Manager at year end were as follows:
Management fees paid and payable during the year
Performance fees paid during the year
30 June 2020
30 June 2019
$
1,313,629
1,416,708
$
1,080,946
-
Management fees payable at year end
102,679
94,122
38
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
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
2020
Ordinary Shares
Peter Constable¹
David Bottomley¹
Ray Kellerman
2019
Ordinary Shares
Peter Constable¹
David Bottomley¹
Ray Kellerman
30 June 2020
30 June 2019
$
36,530
36,530
3,470
3,470
40,000
$
31,963
31,963
3,615
3,615
35,578
Opening balance
Acquisitions/
Options
Exercised
Shares acquired /
(disposed)
Balance at 30
June 2020
8,441,000
3,023,000
1,020,000
12,484,000
-
-
-
-
234,000
25,000
-
8,675,000
3,048,000
1,020,000
259,000
12,743,000
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)
-
8,441,000
3,023,000
1,020,000
(252,000)
12,484,000
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.
39
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
Notes to the Financial Statements
13. RELATED PARTY TRANSACTIONS (CONTINUED)
(d) Options to acquire shares
2020
Options (RYDOA)
Peter Constable
David Bottomley
Ray Kellerman
2019
Options (RYDOA)
Peter Constable
David Bottomley
Ray Kellerman
2019
Options (RYDO)
Peter Constable
David Bottomley
Ray Kellerman
Opening balance
Issued/ Acquired
Balance at 30
June 2020
3,462,500
1,025,000
510,000
4,997,500
-
-
-
-
3,462,500
1,025,000
510,000
4,997,500
Opening balance
Issued/ Acquired
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 2019
4,562,500
1,795,000
510,000
6,867,500
-
-
-
-
(4,562,500)
(1,795,000)
(510,000)
(6,867,500)
-
-
-
-
All shares and options acquired on the same basis as all shareholders.
14.
CONTINGENT LIABILITIES AND COMMITMENTS
As at 30 June 2020 and 30 June 2019, the Company had no contingent liabilities or commitments.
40
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
Notes to the Financial Statements
15.
DIVIDENDS
On 9 August 2019, the Directors declared a fully franked dividend of 3.00 cent per share paid on 4 September 2019 on
ordinary shares held as at record date 15 August 2019.
On 18 February 2020, the Directors declared a fully franked dividend of 2.00 cent per share paid on 23 March 2020 on
ordinary shares held as at record date 9 March 2020.
Subsequent to balance date, on 14 August 2020, the Directors declared a fully franked dividend of 3.0 cent per share which will
be paid on 9 September 2020 on ordinary shares held as at record date 20 August 2020 (ex-dividend date of 19 August 2020).
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
30 June 2020
30 June 2019
$
$
457,997
736,508
(1,121,369)
-
73,136
5,375,334
5,448,470
649,366
415,811
(608,566)
1,386
457,997
3,150,713
3,608,710
The impact on the dividend franking account of the dividends proposed after balance sheet date but not recognised as a
liability is to decrease it by $755,444 (2019: $673,732).
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
Except in relation to the dividend declared subsequent to balance date and referred to in the dividends note above, 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.
41
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
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
2020 and performance of the Company, for the year ended 30 June 2020;
(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, 14 August 2020
42
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020 Independent Auditor's Audit Report to the Members
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
Independent Auditor’s Report
To the Members of Ryder Capital Limited
ABN 74 606 695 854
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Ryder Capital Limited (“the Company”), which
comprises the statement of financial position as at 30 June 2020, the statement of
comprehensive income, the statement of changes in equity and the statement of cash flows
for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of Ryder Capital Limited is in accordance
with the Corporations Act 2001, including:
i.
ii.
giving a true and fair view of the Company’s financial position as at 30 June 2020
and of its financial performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations
Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities
for the Audit of the Financial Report section of our report. We are independent of the
Company in accordance with the auditor independence requirements of the Corporations Act
2001 and the ethical requirements of the Accounting Professional and Ethical Standards
Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (“the Code”) that are relevant to our audit of the financial report in Australia. We
have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which
has been given to the Directors of the Company, would be 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 opinion.
Adelaide Brisbane Melbourne Newcastle Perth Sydney
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
43
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
Independent Auditor's Audit Report to the Members
Independent Auditor’s Report
To the Members of Ryder Capital Limited
ABN 74 606 695 854
Emphasis of Matter
We draw attention to Note 3 of the financial report, which discloses that in the prior year, there
was a lack of observable private market or other data to assist in deriving a carrying value of
the Company’s Investment in Updater Inc. as at 30 June 2019. This caused us to qualify our
audit opinion on the 30 June 2019 financial report as we were unable to satisfy ourselves by
alternative means concerning the carrying value of the Company’s investment in Updater Inc.
as at that year end. Our opinion is not modified with respect to this matter.
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 and 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;
▪ 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
2019 to 30 June 2020 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 and 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.
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).
44
Pitcher Partners is an association of independent firms.
ABN 17 795 780 962.
An independent New South Wales Partnership.
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
Independent Auditor's Audit Report to the Members
Independent Auditor’s Report
To the Members of Ryder Capital Limited
ABN 74 606 695 854
Key audit matter
How our audit addressed the matter
Accuracy and Existence of Management and Performance Fees
Refer to Note 8: Payables and Note 13: Related party transactions
We focused our audit effort on the accuracy,
completeness and existence of management
and performance fees as they are significant
expenses of the Company and their calculation
requires adjustments and key inputs.
Adjustments include company dividends, tax
payments, capital raisings, capital reductions
and other relevant expenses. Key inputs include
portfolio movements, index benchmarking and
applying the correct set percentage in
accordance with the Investment Management
Agreement between the Company and the
Investment Manager.
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.
Our procedures included, amongst others:
▪ Obtaining an understanding of and
evaluating the processes and controls for
calculating the management and
performance fees;
▪ 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 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 2020, 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.
45
Pitcher Partners is an association of independent firms.
ABN 17 795 780 962.
An independent New South Wales Partnership.
36
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
Independent Auditor's Audit Report to the Members
Independent Auditor’s Report
To the Members of Ryder Capital Limited
ABN 74 606 695 854
Responsibilities of the Directors for the Financial Report
The Directors of the Company are responsible for the preparation of the financial report that
gives a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001 and for such internal controls 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:
•
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.
46
Pitcher Partners is an association of independent firms.
ABN 17 795 780 962.
An independent New South Wales Partnership.
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
Independent Auditor's Audit Report to the Members
Independent Auditor’s Report
To the Members of Ryder Capital Limited
ABN 74 606 695 854
We communicate with the Directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide the Directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of
most significance in the audit of the financial report of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 14 to 16 of the Directors’ Report
for the year ended 30 June 2020. In our opinion, the Remuneration Report of Ryder Capital
Limited, for the year ended 30 June 2020, complies with section 300A of the Corporations Act
2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit
conducted in accordance with Australian Auditing Standards.
S M Whiddett
Partner
14 August 2020
Pitcher Partners
Sydney
47
Pitcher Partners is an association of independent firms.
ABN 17 795 780 962.
An independent New South Wales Partnership.
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
Top 20 Shareholders
The Shareholder information set out below was applicable at 11 August 2020.
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
16
51
48
192
93
400
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
FARIWEST PTY LTD
S LE M SUPERANNUATION PTY LTD
LEYRTH PTY LTD
WORKING DOG INVESTMENTS PTY LTD
RK SYDNEY PTY LTD
WORKING DOG INVESTMENTS PTY LTD
MAYUMI AND ZENTA INVESTMENTS PTY LTD
MR ROBERT JULIAN CONSTABLE & MRS JANET MARIE CONSTABLE
HALE UNION PTY LTD
BS CARTER SUPERANNUATION FUND PTY LTD
C. Substantial shareholders
Peter Charles Constable
David Harold Bottomley
5,946
185,543
416,640
7,340,198
50,808,396
58,756,723
Shares
3,900,000
2,400,000
2,000,000
1,744,000
1,700,000
1,375,000
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
1,000,000
Shares
8,675,000
3,048,000
%
0.01
0.32
0.71
12.49
86.47
100.00
%
6.64
4.08
3.40
2.97
2.89
2.34
2.04
2.01
1.91
1.70
1.70
1.70
1.70
1.70
1.70
1.70
1.70
1.70
1.70
1.70
1.70
%
14.76
5.19
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 409 investment transactions during the period, total brokerage paid on these transactions was $162,437.18.
48
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020
Corporate Directory
Directors
Peter Constable (Chairman)
David Bottomley
Ray Kellerman
Company Secretary
David Bottomley
Claudia Rososinski (appointed on 28 August 2019)
Registered Office
Level 25
88 Phillip Street
Sydney NSW 2000
Contact Details
P: (02) 8211 2791
F: (02) 8211 0570
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 Sydney
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
49
Ryder Capital Limited Annual ReportFor the year ended 30 June 2020 T +61 (2) 8211 2791
F +61 (2) 8211 0570
Level 25, 88 Phillip Street
Sydney NSW 2000
E enquiries@rydercapital.com.au
W www.rydercapital.com.au
ABN 74 606 695
854