Barramundi Annual Report and Section 209C provided
ANNUAL REPORT
30 JUNE 2018
BARRAMUNDI LIMITED
03 About Barramundi
06 Directors’ Overview
10 The STEEPP Process
12 Manager’s Report
17 Barramundi Portfolio Stocks
26 Board of Directors
27 Corporate Governance Statement
33 Directors’ Statement of
Responsibility
34 Financial Statements Contents
53 Independent Auditor’s Report
57 Shareholder Information
58 Statutory Information
61 Glossary
63 Directory
CONTENTSCALENDAR
Next Dividend Payable
28 SEPTEMBER 2018
Annual Shareholders’ Meeting
Ellerslie Event Centre, Auckland
10:30am
19 OCTOBER 2018
Interim Period End
31 DECEMBER 2018
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This report is dated 21 September 2018 and is signed on behalf of the Board of
Barramundi Limited by Alistair Ryan, Chair, and Carmel Fisher, director.
Alistair Ryan, Chair Carmel Fisher, Director
ABOUT BARRAMUNDI
Barramundi Limited (“Barramundi” or “the company”) is a listed investment
company that invests in growing Australian companies. The Barramundi portfolio
is managed by Fisher Funds Management Limited (“Fisher Funds” or “the
Manager”), a specialist investment manager with a track record of successfully
investing in quality, growth companies. Barramundi listed on NZX Main Board on
26 October 2006 and may invest in companies that are listed on an Australian stock
exchange (with a primary focus on those outside the top 20 at the time of investment)
or unlisted companies.
INVESTMENT OBJECTIVES
The key investment objectives of Barramundi are to:
• achieve a high real rate of return, comprising both income and capital growth,
within risk parameters acceptable to the directors; and
• provide access to a diversified portfolio of Australian quality, growth stocks through
a single tax efficient investment vehicle.
INVESTMENT APPROACH
The investment philosophy of Barramundi is summarised by the following broad
principles:
• invest as a medium to long-term investor exiting only on the basis of a fundamental
change in the original investment case;
• invest in companies that have a proven track record of growing profitability; and
• construct a diversified portfolio of investments, based on the ‘STEEPP’ investment
criteria (see pages 10 and 11).
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For the 12 months ended 30 June 2018
AT A GLANCE
$20.5M
Net profit
+10.1%
Total shareholder return
Dividends paid during the year ended 30 June 2018 (cents per share)
DIVIDENDS PAID
29 September
2017
1.30
22 December
2017
1.31
29 March
2018
1.38
29 June
2018
1.33
+22.6%
Adjusted NAV return
As at 30 June 2018
$0.60
Share price
$0.71
NAV per share
$1.61
Adjusted NAV per share
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As at 30 June 2018
LARGEST INVESTMENTS
As at 30 June 2018
SECTOR SPLIT
7%
CSL Limited
7%
SEEK
6%
Carsales.com
5%
Commonwealth
Bank
4%
National Australia
Bank
Healthcare 24%
Information Technology 22%
Financials 19%
Consumer Discretionary 12%
Industrials 11%
Cash 5%
Materials 5%
Real Estate 2%
DIRECTORS’ OVERVIEW
“2018 was an excellent
year for Barramundi
and we look forward
to discussing the key
performance drivers
with you”
Alistair Ryan
Chair
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Barramundi delivered a strong result for
shareholders, returning 22.6%
1
after fees and
tax for the 12 months to 30 June 2018, and a net
profit of $20.5m. The result was driven by sound
stock selection and portfolio construction,
enabling Barramundi to outperform its
benchmark
2
which rose 14.9% for the year. The
portfolio gains were broad based, with the large
core holdings making a significant contribution
to the year’s performance.
REVENUES AND EXPENSES
The 2018 net profit result comprised gains on investments
of $20.1m, dividend and interest income of $2.9, other
income of $1.3m (a result of a refund of GST and related
use of money interest), less operating expenses of $4.1m.
A small tax benefit of $0.3m was recorded for the period.
Fisher Funds was paid a $2.0m performance fee for the
portfolio’s performance, consistent with the terms of
the Management Agreement. Operating expenses were
$1.8m higher than the previous corresponding period,
primarily due to the performance fee being earned by the
Manager, whereas no performance fee had been earned
during the previous corresponding period given the
subdued performance.
CAPITAL MANAGEMENT
The share price discount to NAV widened to 15.5% as at
30 June 2018. Share buybacks present an opportunity
to enhance shareholder value and are utilised when
the share price to NAV is sufficiently deep. During the
2018 financial year, Barramundi took advantage of the
increasing discount and acquired approximately 3.8m
shares on market under the buyback programme. Shares
acquired under the buyback programme are held as
treasury stock and are generally reissued under the
dividend reinvestment plan. Treasury stock was also used
to settle a portion of the performance fee paid to Fisher
Funds for the period.
Total shareholder return was 10.1% for the 2018 period,
reflecting the wider discount between the share price
and the value of the Barramundi portfolio. The total
shareholder return for the period was largely driven by
the 5.32 cents per share paid in dividends during the 2018
financial year, and the next dividend will be 1.40 cents
per share to be paid on 28 September 2018 with a record
date of 13 September 2018. Barramundi continues to
offer its dividend reinvestment plan where shareholders
are able to reinvest all or part of any cash dividends in
fully paid ordinary shares
3
.
Barramundi also has a regular warrants programme
in place as part of its capital management initiatives.
Barramundi’s last warrant issue expired in November
2017, raising $8.6m for further investment. The board
continually monitors a range of factors to determine
the potential timing for further warrant issues. It is the
board’s intention that warrant issues occur regularly,
pending market conditions, and it is anticipated a
further Barramundi warrant issue will be considered
later this year.
PEOPLE
As discussed in the Barramundi Interim Report, portfolio
manager Manuel Greenland announced his resignation
late in 2017 and an extensive recruitment search for his
replacement ensued. We were pleased to announce in
March this year that Fisher Funds had appointed Robbie
Urquhart as the Senior Portfolio Manager responsible for
Australian equities, including the Barramundi portfolio.
We welcome Robbie to the Barramundi team and
encourage you to read his views on the portfolio and the
Australian market in the Manager’s Report on page 12.
CONCLUSION
2018 was an excellent year for Barramundi and we look
forward to discussing the key performance drivers with
you in more depth at the upcoming Annual Shareholders’
Meeting which will be held on Friday 19 October at
10.30am at the Ellerslie Event Centre in Auckland.
All shareholders are encouraged to attend the Annual
Shareholders’ Meeting, with those who are unable to
attend invited to cast their vote on resolutions prior to the
meeting.
We would like to thank shareholders for your continued
support of Barramundi.
On behalf of the board,
Alistair Ryan, Chair
Barramundi Limited
21 September 2018
1
Adjusted NAV return
2
S&P/ASX200 (70% hedged to NZD)
³ To participate in the dividend reinvestment plan, a completed participation notice must be received by Barramundi before the
next record date. Full details of the dividend reinvestment plan can be found in the Barramundi Dividend Reinvestment Plan
Offer Document, a copy of which is available at www.barramundi.co.nz/investor-centre/capital-management-strategies/
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DIRECTORS’ OVERVIEW CONTINUED
COMPANY PERFORMANCE
FOR THE YEAR ENDED 30 JUNE 20182 0 1720162 0152 0145 YEARS
(ANNUALISED)
Total Shareholder Return10.1%6.2%0.4%15.7%3.2%7. 0%
Adjusted NAV Return22.6%2.7%6.2%10.1%(6.8%)6.5%
Dividend Return8.9%8.7%8.2%8.7%9.0%-
Net Profit$20.5m$2.7m$5.4m$8.3m($6.2m)-
Basic Earnings per Share12.99cps1.82cps4 .17c p s6.68cps(5.20)cps-
OPEX ratio3.7%2.1%2.1%2.4%1.6%-
OPEX ratio (before performance fee)1.8%2.1%2.1%2.2%1.6%-
AS AT 30 JUNE20182 0 1720162 0152 014
Audited NAV$0.71$0.64$0.67$0.70$0.69
Adjusted NAV$1.61$1.32$1. 28$1. 21$1.10
Share price$0.60$0.60$0.62$0.67$0.64
Warrant price-$0.01-$0.04-
Share price discount to NAV¹15.5%6.3% 7. 5% 2.9%7. 2%
PORTFOLIO PERFORMANCE
FOR THE YEAR ENDED 30 JUNE 20182 0 1720162 0152 0145 YEARS
(ANNUALISED)
Gross Performance Return24.3%6.0%11. 0%13.0%(3.4%)9.8%
Blended Index²14.9%14.7%3.3%13.0%2.8%9.6%
Performance fee hurdle³9.0%9.2%9.9%10.7%9.8%
NB: All returns have been reviewed by an independent actuary.
¹ Share price discount to NAV (including warrant price on a pro-rated basis).
² Blended index: S&P/ASX Small Ords Industrial Gross Index until 30 September 2015 & S&P/ASX 200 index (hedged 70% to
NZD) from 1 October 2015. Returns shown gross in NZ dollar terms.
³ The performance fee hurdle is the Benchmark Rate (NZ 90 Day Bank Bill Index +7%).
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NON-GAAP FINANCIAL INFORMATION
Barramundi uses the following non-GAAP measures:
• adjusted net asset value – the underlying value of the investment portfolio adjusted for capital allocation
decisions after fees and tax,
• adjusted NAV return – the net return to an investor after fees and tax,
• gross performance return – the Manager’s portfolio performance in terms of stock selection and currency
hedging before fees and tax,
• total shareholder return – the return to an investor who reinvests their dividends, and if in the money, exercises
their warrants at warrant maturity date for additional shares,
• OPEX ratio - the percentage of Barramundi’s assets used to cover operating expenses, excluding tax and
brokerage, and
• dividend return – how much Barramundi pays out in dividends each year relative to its share price.
All references to the above measures in this Annual Report are to such non-GAAP measures. The calculations applied
to non-GAAP measures are described in the Barramundi Non-GAAP Financial Information Policy and in the Glossary
on page 61. A copy of the policy is available at http://barramundi.co.nz/about-barramundi/barramundi-policies/
TOTAL SHAREHOLDER RETURN
June
2007
June
2008
June
2009
June
2010
June
2011
June
2012
June
2013
June
2015
June
2017
June
2014
Share Price/Total Shareholder Return
$
1.00
$
1.20
$
0.80
$
0.60
$
0.40
$
1.60
$
0.20
$
0.00
$
1.40
June
2016
June
2018
Share Price Total Shareholder Return
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STRENGTH OF
THE B USINESS
What is the company’s
competitive advantage? Is it
sustainable? Is the company a
market leader? Does it have a
dominant position? A strong
business is one that can maintain
its profit margins by employing a
unique strategy.
TR A CK
RECORD
How has the company performed
in the past? Has the company
performed under the same
management team? Has it grown
organically or by acquisition? How
did the company react during a
downturn? Fisher Funds prefers to
buy established companies that
have executed well in the past.
EARNINGS
HISTO R Y
How fast has the company been
able to grow its earnings in the
past? How consistent has earnings
growth been? Fisher Funds prefers
to buy companies that exhibit
secular growth characteristics
where the company has proven
its ability to provide a high or
improving return on invested
capital.
Fisher Funds employs a process that it calls STEEPP to analyse existing and potential portfolio
companies. This analysis gives each company a score against a number of criteria that Fisher Funds
believes need to be present in a successful portfolio company. All companies are then ranked
according to their STEEPP score to broadly determine their portfolio weighting (or indeed whether
they make the grade to be a portfolio company in the first place).
The STEEPP criteria are as follows:
STE
Applying this STEEPP analysis, Fisher Funds constructed a portfolio
for Barramundi which comprised 26 securities as at 30 June 2018.
THE STEEPP PROCESS
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EARNINGS GROWTH
FORECAST
What is the company’s earnings
growth forecast over the next
three to five years? What is the
probability of achieving the
forecast? What does Fisher Funds
expect the company’s earnings
potential to be? Fisher Funds
notices that too many analysts
focus on short-term earnings. As
long-term growth investors, Fisher
Funds thinks about where the
company’s earnings could be in
three to five years.
PEOPLE/
MANAGEMENT
Who are the management team
and how long have they been in
their roles? Who are the directors,
what is their history with the
company, and what do they bring
to the board? What is the depth of
management in the organisation
and is there a succession plan for
the key executive roles? Do the
management team own shares
in the business and how are
they rewarded? Has the board
and management exhibited
good corporate behaviour in the
areas of environmental, social
and governance considerations?
For Fisher Funds, the quality of
the company management and
its corporate governance is of
paramount importance.
PRICE/
VALUATION
How much of the future earnings
growth is already reflected in
the share price? Where does the
current share price sit in relation
to Fisher Funds’ worst to best case
valuation range? A company will
generate a higher score where the
market price currently reflects little
of that company’s upside potential.
EPP
MANAGER’S REPORT
Robbie Urquhart
Senior Portfolio Manager
“Barramundi’s
portfolio provided
us with little to
complain about
during the year”
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For the year ended 30 June 2018 the
Barramundi gross performance return was
24.3%. This was a strong result in what was a
positive year for the market overall with the
Barramundi benchmark
1
returning 14.9%.
I am pleased to be delivering my inaugural Manager’s
Report to shareholders after what has been a
strong year of performance for the Barramundi
portfolio. Having only started as the Senior Portfolio
Manager in June of 2018, I’d like to acknowledge
the Fisher Funds investment team of Frank Jasper,
Terry Tolich and Delano Gallagher (and also the
former Barramundi Senior Portfolio Manager Manuel
Greenland) for this result.
Fisher Funds’ clearly defined investment process
resonates deeply with me. The fundamental ‘bottom-
up’ stock picking process is underpinned by the firm’s
sound investment philosophy neatly encapsulated by
the STEEPP acronym which we describe in more detail
elsewhere in this report.
THE YEAR IN REVIEW
At the start of the 2018 financial year, Barramundi was
invested in approximately 30 companies spanning the
healthcare (including health insurance), technology,
digital/online classifieds, outdoor advertising, and
retirement community living sectors. The portfolio
also had an exposure to the major banks and two
bellwether high quality, diversified miners. The
portfolio also owned a company in the fast food
business and a domestic retailer.
At a sector level, the Barramundi portfolio had no
exposure to the energy, telecommunication services
or utilities sectors. While the portfolio has held some
investments in these sectors in the past, during the
year, companies within these sectors didn’t pass muster
for us when put through the STEEPP lens.
Barramundi’s portfolio provided us with little to
complain about during the year. Positive returns
were broad based, with over 25 individual positions
delivering positive returns across the year. A small
handful of companies delivered negative returns, with
only two of those (Technology One and Ramsay
Health Care) standing out as meaningful detractors on
the loss side of the ledger.
Pleasingly, the returns of our portfolio’s larger positions
such as CSL +41% for the year, Carsales.com 35%
and Seek 32% were particularly positive, and on
the whole the management teams and staff of the
portfolio companies delivered reasonable results,
corroborating the investment theses underlying each
of the positions. Three of Barramundi’s portfolio
companies, ToxFree Solutions +4 4%, APN Outdoor
+36% and Gateway +12% were subject to takeover
bids during the period which gave their share prices a
boost. It was pleasing to see the market recognise the
latent value that we saw in these businesses.
For this year’s Manager’s Report, we thought it
would be helpful to delve a little deeper into two of
the portfolio companies mentioned above, CSL and
Technology One. These two companies generated
divergent return experiences for the portfolio over the
year, one positive and one negative. Below we provide
some deeper context into what they do, why they
performed the way they did and why we believe it is
appropriate they still hold a place in the Barramundi
portfolio.
CSL, one of the largest positions in the Barramundi
portfolio, is, in our view, one of Australia’s great
companies. Founded over a century ago in 1916 in
Melbourne as Commonwealth Serum Laboratories,
CSL was set up as a government body focused on
vaccine manufacture. Saving lives and protecting the
health of people stricken with medical conditions has
been central to its DNA from inception and remains
core to the culture of the firm. Over time, it has
expanded its range of products to include amongst
others antivenene (snake venom vaccine), the
production of insulin, polio vaccine and penicillin.
CSL first entered the production of blood plasma
derived products in 1952 through plasma
fractionation (a process to separate plasma into its
various components which can then be processed into
products used to treat various disorders). Today, the
company’s core focus is on its range of plasma derived
products and the affiliated supply chain. CSL also has
a burgeoning influenza vaccine business (through
subsidiary Seqirus).
The company was privatised and corporatised as CSL
Ltd in 1994, and listed on the ASX at an IPO price
of $2.30 a share. Since then, it has grown to be a
A$90bn market cap company with its share price
topping $200 a share. Along the way, it has delivered
compounded total annualised returns to shareholders
of +28% per annum.
There are a number of reasons for and key planks
underpinning this sustained growth and superb long-
term performance.
Firstly, CSL has a long history of strong innovation
and focus on development. It has in excess of
1,500 research and development experts globally
and invests substantially each year in adding to its
range of biotherapy products, vaccines and support
programmes. Affiliated with this, the company’s
1
S&P/ASX200 (70% hedged to NZD)
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global scale and nature of its product suites (and the
whole plasma supply chain) pose significant barriers
to entry for competitors that wish to enter CSL’s key
markets.
Extracting plasma from people at scale, fractionating
the product and turning it into useful products that
receive all necessary regulatory approvals is not
straightforward. It requires trust and integrity across
the supply chain journey. This starts when the plasma
donors walk into collection centres to have needles
stuck in their arms, and applies to the storage,
transportation (and traceability) of the plasma, to the
fractionation, development, approval process and
finally through to the distribution and marketing of
the final products.
CSL competes against a small handful of companies
globally so (relative to many other sectors) the
competitive dynamic is manageable. Its research and
development programmes give it a reasonable chance
of staying at the forefront of innovation and product
development globally and the breadth of its product
range gives some diversification to earnings as well.
While small, we have also been encouraged by the
growth within CSL’s influenza vaccine business,
which is one of three global players in this flu
vaccine market.
At a corporate/head office level, CSL is well capitalised
and has a long history of stable, competent
management. Through successive management
teams, CSL has been astute in allocating the cash
flow generated by the company to organic growth
options as well as growth through acquisition. The
larger acquisitions CSL undertook in the mid-2000s
of Aventis Behring and ZLB Central Laboratory have
paid their way for CSL and its shareholders, helping to
cement CSL’s leadership position in the market. In our
experience, allocating capital sensibly through mergers
and acquisition activity is not that common for
companies, so this history gives us some confidence
that CSL will continue to be a responsible steward of
capital within their control going forward.
The broader macro backdrop provides a decent
structural tailwind for demand of CSL’s products.
Ageing populations, especially across the developed
world, continue to lead to rising health and medical
complications that need solving. In addition,
medical advancements in identifying and hence
driving the need for solutions to rare and poorly
understood medical conditions is another source of
structural growth.
To be clear, there is of course risk affiliated with
owning CSL shares – it is not all a bed of roses. CSL
is not a monopoly and does face decent competition
from the small handful of global peers. From time
to time, the market may also get too optimistic
on extrapolating the earnings potential of its
development pipeline of products. However, as long
as management keeps as focused on building the
company and its culture as they have been in the last
100+ years, over time we think CSL will continue to
deliver sound return on capital deployed within its
businesses and sound returns for shareholders.
Now for one of 2017/18’s problem children.
Technology One had a torrid period of share
price performance in the 12 months to 30 June
2018 where it fell 25% for shareholders (including
dividends). Given that the company’s reported net
earnings grew at around +9% in the 2017 financial
year over the previous year (underlying growth was
higher), and the current and longer-term outlook
on growth appears sound – why such share price
volatility?
Well, to set the scene as a quick refresher of its
history, Technology One was founded in Queensland
by Adrian Di Marco in 1987. Since then, it has grown
to become one of Australia’s largest enterprise
software companies. Technology One provides
enterprise software (akin to the ‘plumbing’ for the
general running of operations) to customers. These
include higher education institutions like universities,
healthcare companies (including hospitals) and
government agencies. This software enables clients
to manage a broad range of their business operations
including customer records management, invoicing,
human resources and payroll.
Technology One has a long history of growing
earnings in a profitable manner largely in Australia
with some growth coming out of New Zealand. In
fact, the company has recently announced contracts
to provide software to the New Zealand Treasury and
the Department of the Prime Minister and Cabinet.
Technology One also has a small foothold in the UK
market.
The past year or so has proved to be one of
transition for the company. In May 2017, Adrian Di
Marco stepped aside as CEO, passing the reins to
Mr Edward Chung (the previous COO). Around this
time, Technology One was involved in a public spat
with one of its clients. At its September 2017 year
end results, the company missed guidance although
earnings growth was still positive. And then, in
addition to this, it telegraphed that a new accounting
standard, which is coming into effect in 2019, would
have consequences for how it would report its
earnings. Initially, Technology One could not provide
clarity on exactly how the new standard would affect
its accounts. The combination of these key factors
put the company in the penalty box from the stock
market’s perspective.
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There it stayed until July 2018, when Technology
One reduced some of the uncertainty by clarifying
how the pending new accounting changes would
impact their reporting. At the same time, the
company reiterated guidance and provided some
commentary on its long-term growth strategy. A
‘relief rally’ in the share price ensued.
While the recent market concerns are legitimate,
in our view the company’s recent hiccups did not
fundamentally derail the earnings power of the
business and the three core trends and tailwinds
driving growth:
(1) Growing customer base: Technology One has a
reasonable runway of untapped customers within
Australia (and New Zealand) that it can target.
(2) Upselling to existing clients: Technology One
invests consistently in research and development,
adding new functionality and modules to its
existing product offering which it upsells to
existing clients. Over the last decade, it has
increased the number of products used per
customer from approximately three to five, and is
aiming to lift this by another three products over
the next decade.
(3) Increased cloud computing: Technology One
is experiencing a tailwind of growth from moving
its existing customers into the cloud – a process
which will run (and add to revenue) for a number
of years yet.
Additionally, Technology One has spent a number of
years establishing a foothold in the UK market. While
the UK presence has not borne fruit for them yet, it
remains a watching brief and may in the future be a
growth lever for the company. Watch this space.
Technology One was first added to the Barramundi
portfolio in December 2012 and we remain
comfortable that the investment thesis and longer-
term growth opportunity remains intact.
KEY PORTFOLIO CHANGES
We initiated two new positions during the year
in NextDC (data centres) and Xero (‘beautiful’
accounting software).
NextDC is one of the main data centre providers in
Australia. The company is benefitting from the strong
growth in demand for data storage facilities as data
usage in general increases, from businesses moving
their software and data into the cloud, through to
consumers watching more online streamed television
at home. NextDC is currently in a capital hungry
period of growth as it rolls out additional data centres
across the major metropolitan areas in Australia. To
fund this growth, the company has raised significant
amounts of equity and debt over the past year.
NextDC has had a decent track record over the past
decade of executing well, and earning a good return
through time from the money it has spent on the
older generation data centres.
Founded in New Zealand, Xero is one of the market
leading providers of cloud based accounting software
to small and medium-sized businesses in New Zealand,
Australia and the UK, with growing presences in the
US and other international markets. Xero’s software
is typically rated as best in class and continues to
pioneer innovative new functionality to attract and
retain customers. The size of the ultimate opportunity
is large as more and more businesses globally adopt
accounting based software. We think there are many
years of potential profit growth in front of Xero.
We exited six of the Barramundi portfolio positions
during the 2018 financial year; Baby Bunting (retailer),
Gateway (retirement community living), Medibank
(health insurance), Reliance Worldwide (building
products), Tox Free Solutions (waste management),
and Virtus Health (fertility healthcare).
In the case of Tox Free Solutions and Gateway, both
companies were subject to takeover activity which
drove the exit, and in assessing the other four we felt
the investment opportunity set was better elsewhere.
INVESTMENT SUMMARY AND
OUTLOOK
At an economic level, the Australian outlook, while
positive, has a few more clouds on the horizon than
has been evident in recent years. Tightening lending
standards and a cooling housing market are putting
the brakes on consumer confidence. There is a note
of caution driven by the threat of trade wars amongst
key Australian trading partners. By the time I write
to you in next year’s report, Australia will likely have
gone through a general election, so political risk and
noise is likely to be a feature of the landscape as
well. This noise may provide active managers such as
Barramundi with interesting investment opportunities.
We shall see.
On the positive side of the ledger, GDP growth seems
to be ticking along and employment remains robust.
Offsetting some consumer softness, the resources
sector seems to be in a rising investment cycle again,
which is stimulatory, and similarly infrastructure
spending is experiencing some tailwinds. The scale
advantage and diversity of the Australian economy
(relative to New Zealand) and a floating currency
provide some useful economic buffers which helps
with economic stability.
Similar to global equity markets, the Australian equity
market has risen a long way from the market lows of
March 2009. From an investment style perspective,
investing in high quality and growth companies (which
is what we aim to do with Barramundi) has been a
good place to be in the past year.
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2018
MANAGER’S REPORT CONTINUED
On various valuation multiple metrics, it is true
that many companies are trading at higher prices
and multiples today than they have done in recent
years. The reasons for this and prognostications of
where share prices and ‘the market’ goes from here
is the source of endless debate amongst market
participants.
There will come a time when the equity market
falls and when our style of investing is out of vogue
with the market and these events may even possibly
coincide – although that is not common. However,
looking forward from here, we don’t profess to know
when either will happen. It is the nature of markets
that these factors are out of our control. While we
are respectful of market cycles, we do aim to do
less handwringing about where the proverbial ‘Mr
Market’ will take us. Rather, we spend more of our
time focused on finding quality, growing companies
and let time and patience do its magic trick of
compounding returns.
Barramundi’s portfolio companies have a significant
proportion of their income derived internationally –
providing ballast against potential domestic economic
headwinds. They have strong balance sheets and a
number are in a net cash position, providing a buffer
against future shocks. They have strong management
teams that have proven through time to be good
stewards of capital invested in their operations – they
are working hard for their shareholders. A number
face structural tailwinds (especially in the technology
holdings), and have a multi-year runway of growth
in front of them – providing longer-term upside in
earnings.
The combination of all these factors leave us
optimistic that through time, the Barramundi portfolio
companies will do well and provide sound returns.
Robbie Urquhart / Senior Portfolio Manager
Fisher Funds Management Limited
21 September 2018
PORTFOLIO HOLDINGS
SUMMARY AS AT 30 JUNE 2018
Company
%
Holding
Ansell3.6%
APN Outdoor1.4%
ARB Corporation4.3%
AUB Group3.1%
BHP Billiton3.1%
Brambles4.3%
Carsales.com6.5%
Commonwealth Bank4.6%
Credit Corp3.9%
CSL7.1%
Domino's Pizza3.3%
Ingenia Communities1.6%
Link Administration Holdings3.4%
Nanosonics3.0%
National Australia Bank4.5%
NEXTDC3.6%
Ooh! Media2.6%
Ooh! Media Placement1.1%
Ramsay Health Care3.2%
ResMed3.6%
Rio Tinto2.0%
SEEK7.1%
Sonic Healthcare3.0%
Technology One1.7%
Westpac2.8%
Wisetech Global3.1%
Xero3.3%
Equity Total94.8%
Australian dollar cash4.9%
New Zealand dollar cash0.8%
Total Cash5.7%
Centrebet Rights 0.0%
Forward foreign exchange contracts- 0.5%
TOTAL100.0%
16
Barramundi Limited
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Annual Report |
2018
WHAT DOES IT DO?
ARB is Australia’s largest
manufacturer and distributor of
4×4 accessories. The company’s key
strength is its product leadership,
with ARB-branded products
enjoying a material price premium
to competitors. This has been
established through a prolonged
R&D focus which has resulted in
ARB having the best products. ARB
products are distributed through
a network of its own stores and
independent stores in Australia, and
a network of distributors around the
world that sees it export to more than
100 countries.
WHY DO WE OWN IT?
ARB dominates a very specific
market niche. This leaves potential
competitors little scope to successfully
enter its market. The company
is run by its founders who have
taken a long-term view in building
the business. This has produced
an excellent record of growth,
capital allocation and returns. We
therefore believe in management’s
decision to continue investment into
capacity to meet future domestic
and international demand. Based on
supportive trends in its home market,
and the probability and potential scale
of success in the export market, we
believe the market under-estimates
ARB’s long-term earnings power.
THE BARRAMUNDI
PORTFOLIO STOCKS
WHAT DOES IT DO?
Ansell designs, develops,
manufacturers and markets a wide
range of hand and arm protection
solutions for use in various industrial
and manufacturing activities and
in healthcare. It is essentially an
industrial materials business that
transforms natural rubber latex
and synthetic latex into these value
added products. It is a leading
player (#1 or #2) in its key market
segments.
WHY DO WE OWN IT?
Ansell has an attractive combination
of businesses that benefit when the
world economy grows, and those
that enjoy relatively resilient demand
even when economies are weak.
We expect the company’s earnings
growth to be driven by increasing
global industrial production,
adoption of better occupational
safety standards in emerging
markets, and by its own initiatives
to differentiate its products through
branding and innovation and to
strengthen its relationship with key
distributors.
WHAT DOES IT DO?
APN Outdoor is a leading Out of
Home advertising company with
a dominant share in the Roadside
and Transit sectors. The company
sells advertising opportunities
on its wide network of signs and
digital screens, allowing advertisers
to reach consumers in new and
exciting ways.
WHY DO WE OWN IT?
There are two major prevailing
dynamics in the advertising
industry. Firstly, audiences are
increasingly fragmented, meaning
that advertisers have to find ways
to reach small target audiences
with relevant adverts, or risk being
ignored. Secondly, technology is
disrupting traditional media, causing
major categories like Print and
Television to lose audiences, and
new categories like Online, Mobile
and Out of Home to gain audiences.
With the advent of digital screens,
Out of Home advertising offers a
new, dynamic, high-tech media
through which to reach consumers.
These two powerful industry
dynamics should see sustained
growth in Out of Home advertising
for the foreseeable future.
Note in June 2018, APN Outdoor
was subject to a takeover offer
from French listed JC Decaux which
recieved ACCC
1
approval in August.
+17%
TOTAL SHAREHOLDER RETURN
The following is a brief introduction to each of your portfolio companies, with a description
of why they deserve a position in the Barramundi portfolio. Total shareholder return is for
the year to 30 June 2018 and is based on the closing price for each company plus any capital
management initiatives. For companies that are new additions to the portfolio during the
year, total shareholder return is for the period of holding to 30 June 2018.
+36%
TOTAL SHAREHOLDER RETURN
+48%
TOTAL SHAREHOLDER RETURN
Total shareholder returns in Australian dollar terms sourced from Factset.
1
Australian Competition and Consumer Commission.
17
Barramundi Limited
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Annual Report |
2018
18
Barramundi Limited
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Annual Report |
2018
WHAT DOES IT DO?
AUB Group operates a general
insurance broking network
focused on the small to medium-
sized business market.
WHY DO WE OWN IT?
We like AUB’s owner-driven
business model where member
firms are strongly incentivised
to grow. We believe insurance
broking is an industry ripe for
consolidation, allowing AUB
to be an aggregator of smaller
broking firms. The combination
of adding more firms to the
network, long-term organic
growth in the insurance market
and the benefits of scale should
drive healthy earnings growth
for AUB over time.
+8%
TOTAL SHAREHOLDER RETURN
+27%
TOTAL SHAREHOLDER RETURN
-6%
TOTAL SHAREHOLDER RETURN
WHAT DOES IT DO?
BHP Billiton is among the most
competitive mining companies
in the world, with particularly
advantageous positions in the
copper and iron ore markets. BHP
also has an attractive position in
US oil and gas.
WHY DO WE OWN IT?
BHP Billiton enjoys significant cost
advantages over its competitors.
Its large mining operations deliver
scale benefits and high grade
ore bodies enhance the sales
value of its produce. Importantly,
BHP’s mines are relatively close
to its customers, reducing the
cost of getting goods to market.
The combination of these
advantages sees the company
earning superior profits over the
commodity price cycle, and faring
better than peers in periods of
weakness.
WHAT DOES IT DO?
Brambles is a supply-chain
logistics company operating in
more than 50 countries. The
group specialises in the pooling
of unit-load equipment and
associated services, focusing on
the outsourced management
of pallets (CHEP), crates and
containers.
WHY DO WE OWN IT?
Although Brambles is a capital
intensive business, it generates
attractive returns on capital.
It is difficult for potential
competitors to replicate the scale
of Brambles’ pallet pool and its
extensive service centre network.
Moreover, there is considerable
IP in managing the flow of pallets
through the supply chain and
keeping control of the assets.
We expect sound growth from
Brambles for years to come as
the penetration of pooled, rental
unit-load equipment continues
to increase in developed markets
and as modern supply chains are
established in emerging markets.
Purchased during the year
BARRAMUNDI PORTFOLIO STOCKS CONTINUED
19
Barramundi Limited
|
Annual Report |
2018
WHAT DOES IT DO?
Carsales owns a network of
classified advertising websites in
Australia. Carsales’ main website,
www.carsales.com.au, is the
leading automotive classifieds
website in Australia.
WHY DO WE OWN IT?
A first mover advantage
is important in online
marketplaces; think of eBay,
Amazon or TradeMe. Carsales
enjoys the first mover advantage
in all its markets, making it
hard for competition to build.
In addition, the company is a
beneficiary of the shift in spend
from traditional media like
newspapers to digital media.
Carsales is a strong business
with attractive growth prospects
and interesting global options.
WHAT DOES IT DO?
Commonwealth Bank of Australia
(CBA) operates a leading banking
franchise in both Australia and
New Zealand (through subsidiary
ASB) and has a strong presence
in all spheres of retail and
business banking. CBA has built
a profitable portfolio of assets
and positioned itself to benefit
from key growth areas in the
Australian and NZ economies. The
bank also enjoys an enviable scale
advantage in gathering deposits,
allowing it an important source of
stable and low-cost funding.
WHY DO WE OWN IT?
The “big four” Australian banks
enjoy a supportive industry
structure and wide economic
moats. Their scale, regulatory
expertise, technology and brands
constitute significant barriers to
entry for potential competitors,
allowing the banks to earn
healthy returns on their capital.
CBA’s significant share in core
Australian (and NZ) lending and
deposit gathering should ensure
it continues to profit and grow
over time.
+35%
TOTAL SHAREHOLDER RETURN
-7%
TOTAL SHAREHOLDER RETURN
+5%
TOTAL SHAREHOLDER RETURN
WHAT DOES IT DO?
Credit Corp purchases and then
collects, on its own account,
portfolios of defaulted debt.
These are primarily bought from
banks. In more recent times,
the company has diversified,
leveraging its understanding of
the sub-prime market to provide
consumer credit. It also has a
developing US purchased debt
ledger (PDL) operation.
WHY DO WE OWN IT?
We like Credit Corp’s leading
market position and strong
reputation with Australia’s major
banks, which have allowed it a
healthy share of the PDL market.
The business enjoys a scale
advantage versus competitors, has
a conservative balance sheet and
is tightly managed. The mature
Australian PDL business should
deliver sound growth, with the
company’s burgeoning consumer
lending business and US PDL
operation providing significant
opportunities.
20
Barramundi Limited
|
Annual Report |
2018
+41%
TOTAL SHAREHOLDER RETURN
+3%
TOTAL SHAREHOLDER RETURN
+23%
TOTAL SHAREHOLDER RETURN
WHAT DOES IT DO?
Domino’s Pizza is the master
franchisor of the Domino’s
brand in Australia, New Zealand,
France, Belgium, the Netherlands
and Japan and has a majority
share of master franchise rights
in Germany. The company has
revolutionised the pizza restaurant
industry in its key markets by
focusing on meeting consumer
taste, convenience and value
needs.
WHY DO WE OWN IT?
Dominos is an Australian
growth stock with multi-year
store expansion, productivity
and margin improvement
opportunities. The business has
significant scale, technology
expertise and a powerful brand,
all of which combine to create
a formidable barrier to entry
for potential competitors.
With meaningful contributions
from businesses around the
world, Dominos offers quality
diversification from the
Australian economy.
WHAT DOES IT DO?
Ingenia Communities is a
retirement living operator
focused on the value end of the
market. The company primarily
operates both rental villages
where retirees rent its homes and
Land-Lease Communities (LLCs)
with relocatable modular housing
where Ingenia earns a ground rent
from the residents who own the
homes themselves. In both cases,
retirees often receive government
assistance towards the rental
payment.
WHY DO WE OWN IT?
We see significant organic and
acquisitive growth opportunities
for Ingenia. The company enjoys
the demographic tailwind of
ageing baby boomers and it has
already developed a strong track
record in acquiring operating
retirement living assets at
good prices that come with
attached development options.
The combination of high, free
cash yields from rental villages
and LLCs villages along with
development opportunities will
drive solid long-term earnings
growth.
WHAT DOES IT DO?
CSL is a leader in the growing
global plasma therapies and
influenza markets. Plasma
therapies address severe
autoimmune and nerve
degeneration conditions.
WHY DO WE OWN IT?
CSL’s therapies address
conditions for which drug trials
are typically difficult to conduct,
giving existing companies with
approved therapies a tremendous
advantage. As a result, CSL enjoys
healthy returns on capital and
strong earnings growth over
very long product lifecycles. In
addition to owning several leading
therapies, CSL have historically
and continue to invest significant
resources in plasma supply and
research and development,
securing future earnings growth.
BARRAMUNDI PORTFOLIO STOCKS CONTINUED
21
Barramundi Limited
|
Annual Report |
2018
WHAT DOES IT DO?
National Australia Bank (NAB)
is one of Australia’s “big four”
banks. It operates a leading
banking franchise in both
Australia and New Zealand and
has a strong presence in all
spheres of retail and business
banking. NAB has a formidable
stable of brands supporting its
top tier position in both deposit
gathering and lending.
WHY DO WE OWN IT?
The “big four” Australian banks
enjoy a supportive industry
structure and wide economic
moats. Their scale, regulatory
expertise, technology and brands
constitute significant barriers to
entry for potential competitors,
allowing the banks to earn healthy
returns on their capital. NAB has
emerged from a restructuring
with a relatively strong balance
sheet and compelling portfolio of
opportunities, positioning it well
for the future.
WHAT DOES IT DO?
Link is the largest provider of
fund administration services
to Australia’s superannuation
industry. It is the second largest
Australasian share registry and the
leading provider of shareholder
management and analytics.
The company also has registry
businesses in a number of other
countries, and this year acquired a
major asset services business that
operates in the UK and Europe.
WHY DO WE OWN IT?
Link has many of the qualities
that we look for in a company:
the leading market position
by a significant margin in
outsourced Australian super fund
administration; a strong value
proposition for its customers;
defensive, recurring revenues;
and a high level of customer
captivity. We expect the company
to produce solid earnings growth
as it integrates an acquisition
made in 2014 that doubled the
size of its funds administration
business. With the scale advantage
that Link now enjoys, it is well-
positioned to participate in further
expected consolidation of the fund
administration sector. The recently
acquired Link Asset Services
business provides a new growth
opportunity for the company.
WHAT DOES IT DO?
Nanosonics has developed an
innovative technology for point
of use, high-level disinfection.
The company’s first product
to market, the Trophon EPR, is
revolutionising disinfection in the
sonograph market and is now
being distributed globally by
Nanosonics and in partnership
with leading companies like GE
Healthcare, Phillips and Miele.
WHY DO WE OWN IT?
Hospitals, medical facilities and
healthcare regulators around the
world are increasingly focused
on preventing infection through
more stringent disinfection
requirements. With a strong
patent portfolio and the first
product to market, the Trophon
EPR, Nanosonics is well-
positioned for healthy future
earnings growth. Nanosonics
continues to invest in research
and development, and expects
to launch the second generation
Trophon in the second half of
2018, and further disinfection
products in time.
-5%
TOTAL SHAREHOLDER RETURN
+24%
TOTAL SHAREHOLDER RETURN
-1%
TOTAL SHAREHOLDER RETURN
22
Barramundi Limited
|
Annual Report |
2018
WHAT DOES IT DO?
Next DC is an Australian data
centre business. It currently
operates seven data centres across
Australia and has one major
new data centre development
underway. Next DC provides only
the data centre infrastructure
within which its customers can
locate their servers. Its unique
proposition is to create a valuable
ecosystem within its data centres
by assembling a community of
customers for whom it makes
commercial sense to be in close
data proximity.
WHY DO WE OWN IT?
Next DC benefits from the
strong secular growth trends
in cloud computing, data use
and connectivity. The Australian
cloud services market is forecast
to grow three-fold by 2022.
Assisted by this tailwind, Next
DC’s earnings should multiply as
the capacity of its existing data
centres becomes fully utilised and
as the capacity of its new data
centres comes on-stream over
the next couple of years.
+81%
TOTAL SHAREHOLDER RETURN
+30%
TOTAL SHAREHOLDER RETURN
-25%
TOTAL SHAREHOLDER RETURN
WHAT DOES IT DO?
Ooh! Media is a leading Out
of Home advertising company
with a dominant share in the
Retailing sector. The company
sells advertising opportunities
on its wide network of signs and
digital screens, allowing advertisers
to reach consumers in new and
exciting ways.
WHY DO WE OWN IT?
There are two major prevailing
dynamics in the advertising
industry. Firstly, audiences are
increasingly fragmented, meaning
that advertisers have to find ways
to reach small target audiences
with relevant adverts, or risk being
ignored. Secondly, technology
is disrupting traditional media,
causing major categories like Print
and Television to lose audiences,
and new categories like Online,
Mobile and Out of Home to gain
audiences. With the advent of
digital screens, Out of Home
advertising offers a new, dynamic,
high-tech media through which
to reach consumers. These two
powerful industry dynamics
should see sustained growth in
Out of Home advertising for the
foreseeable future.
WHAT DOES IT DO?
Ramsay Healthcare is Australia’s
leading hospital operator. It has
hospitals and day surgery facilities
across Australia, the United
Kingdom, France, Indonesia and
Malaysia.
WHY DO WE OWN IT?
Ramsay benefits from the
increasing health demands
of an ageing population. This
longer-term structural organic
growth is supplemented by an
attractive pipeline of development
opportunities in Australia, France
and Indonesia. In Australia,
Ramsay can generate incremental
profits in reasonable timeframes
on new investments because
most of its growth comes from
adding capacity in existing
hospitals. In France, Ramsay has
established the country’s largest
private hospital group and has
scope to achieve substantial cost
efficiencies. Ramsay is a strong
Australian company going global.
Purchased during the year
BARRAMUNDI PORTFOLIO STOCKS CONTINUED
23
Barramundi Limited
|
Annual Report |
2018
WHAT DOES IT DO?
ResMed is a global leader in the
treatment of sleep disordered
breathing conditions like
obstructive sleep apnoea. The
company provides a range of
treatment options for patients
with these conditions, including
CPAP flow generators and
consumables. The firm is a global
leader in what is an oligopoly
market with competitors
Respironics and New Zealand’s
Fisher & Paykel Healthcare.
WHY DO WE OWN IT?
ResMed benefits from an ageing
and fattening population and
increasing awareness and
treatment of sleep disordered
breathing. The company has
posted solid profit growth over
a number of years, leveraging
heavy, ongoing investment in
research and development (R&D).
This R&D investment provides
a strong intellectual property
advantage from which long-
run earnings growth should
follow. The company is highly
cash generative, and is led by
a capable and experienced
management team.
WHAT DOES IT DO?
Rio Tinto is among the most
competitive mining companies
in the world, with particularly
advantageous positions in the
iron ore, bauxite & aluminium and
copper markets.
WHY DO WE OWN IT?
Rio Tinto enjoys significant cost
advantages over its competitors.
It’s large mining operations deliver
scale benefits and high grade
ore bodies enhance the sales
value of its produce. Importantly,
Rio Tinto’s mines are relatively
close to its customers, reducing
the cost of getting goods to
market. The combination of these
advantages sees the company
earning superior profits over
the commodity cycle, and faring
better than peers in periods of
weakness.
+42%
TOTAL SHAREHOLDER RETURN
+17%
TOTAL SHAREHOLDER RETURN
+32%
TOTAL SHAREHOLDER RETURN
Purchased during the year
WHAT DOES IT DO?
SEEK is the largest global online
employment marketplace.
Operating across Australia,
New Zealand, South East Asia,
China, Brazil and Mexico, SEEK’s
employment marketplaces are
exposed to approximately 2.6
billion people and more than 20%
of global GDP.
WHY DO WE OWN IT?
In Australia and New Zealand,
SEEK has a strong competitive
position by virtue of being “front
of mind” for job seekers. Seek
Australia has a database of
millions of Australian CVs which
attracts recruiters and employers
to the site. This in turn attracts
additional job seekers to the
site, and so the cycle continues.
Domestically, successful
development of its talent search
platform would provide a high
value new revenue stream while
its international investments give
SEEK exposure to faster growing,
less mature employment markets.
24
Barramundi Limited
|
Annual Report |
2018
+5%
TOTAL SHAREHOLDER RETURN
-25%
TOTAL SHAREHOLDER RETURN
+2%
TOTAL SHAREHOLDER RETURN
WHAT DOES IT DO?
TechnologyOne is one of
Australia’s largest enterprise
software companies. It is focused
on the government, education,
healthcare and utilities sectors.
The company develops, markets,
sells, implements and supports
its own integrated enterprise
software.
WHY DO WE OWN IT?
TechnologyOne has a strong
historical track record of sales
and profit growth. The company
is deeply integrated into its
customers’ operations and is
at the forefront of technology
innovation in its niches. With a
strong commitment to research
and development driving constant
product innovation, we see
TechnologyOne as well-positioned
for long-term growth, particularly
as it migrates existing customers
to its cloud platform.
WHAT DOES IT DO?
Westpac is Australia’s oldest
bank and corporation. It
operates a leading banking
franchise in both Australia
and New Zealand and has a
strong presence in all spheres
of retail and business banking.
Westpac has a formidable stable
of brands supporting its top
tier position in both deposit
gathering and lending.
WHY DO WE OWN IT?
The “big four” Australian banks
enjoy a supportive industry
structure and wide economic
moats. Their scale, regulatory
expertise, technology and brands
constitute significant barriers to
entry for potential competitors,
allowing the banks to earn healthy
returns on their capital. Westpac’s
significant share in core Australian
lending and deposit gathering
should ensure it continues to
profit and grow over time.
WHAT DOES IT DO?
Sonic Healthcare is a leading
global provider of medical
diagnostic services. It is a global
leader in pathology testing, and a
significant player in the Australian
diagnostic imaging market.
WHY DO WE OWN IT?
The combination of an ageing
population, an increasing focus
on preventative medicine and
more effective diagnostic tests
drives Sonic’s substantial long-
term growth opportunity.
Regulated medical prices are
typically set to allow small
independent companies to make
a reasonable profit, which allows
Sonic to achieve significant
additional profitability from its
substantial scale.
BARRAMUNDI PORTFOLIO STOCKS CONTINUED
25
Barramundi Limited
|
Annual Report |
2018
WHAT DOES IT DO?
WiseTech Global is a logistics
software business with a presence
in key global regions and with
key global customers. Its main
product, Cargowise One, offers
clients a complete suite of
logistics services and general
business solutions. An early lead
in the freight forwarding software
domain confers a key technology
moat, increases customer
switching costs and establishes
a nascent network benefit to
participants using its technology.
WHY DO WE OWN IT?
While increasing trade flows
are supportive, customers need
better technology to help them
manage greater supply chain
complexity, comply with more
onerous regulation and address
vociferous competition. WiseTech
is an early leader in an industry
with low penetration of a clear
internet-based technology
solution, making for significant
growth prospects should the
company retain its leading
position in the sphere.
WHAT DOES IT DO?
Xero is the market leading
provider of cloud-based
accounting software for small
to medium businesses and their
accountants in NZ, Australia and
the UK, with growing presence in
the US and other markets such as
SE Asia and Africa.
WHY DO WE OWN IT?
Xero’s software is consistently
rated as best in class and it
continues to pioneer innovative
new functionality to attract and
retain customers. As a result,
Xero has a significant share of
the cloud-based accounting
software market and is growing
subscriber numbers rapidly. The
size of the ultimate opportunity
for Xero is significant and there
are many years of material
growth ahead given the industry
is only in the early stages of
migration to the cloud.
+127%
TOTAL SHAREHOLDER RETURN
+29%
TOTAL SHAREHOLDER RETURN
Purchased during the year
Pictured left to right: Carol Campbell, Carmel Fisher, Andy Coupe and Alistair Ryan.
ALISTAIR RYAN MComm (Hons), CA
Chair and Independent Director
Chair of Remuneration and Nominations Committee
Member of the Audit & Risk Committee
Member of the Investment Committee
Alistair Ryan is an experienced company director
and corporate executive with extensive corporate
and finance sector experience in the listed company
sector in New Zealand and Australia. He is a director
of Kingfish, Marlin Global, Kiwibank, Christchurch
Casinos, Evolve Education and Metlifecare. Alistair
had a 16-year career with SKYCITY Entertainment
Group Limited (from pre-opening and pre-listing
in 1996 through 2012). Alistair was a member of
the senior executive team, holding the positions of
General Manager Corporate, Company Secretary
and Chief Financial Officer. Prior to SKYCITY, Alistair
was a Corporate Services Partner with international
accounting firm Ernst & Young, based in Auckland.
He is a Fellow of Chartered Accountants Australia and
New Zealand. Alistair’s principal place of residence
is Auckland.
Alistair was first appointed to the Barramundi board
on 10 February 2012.
ANDY COUPE LLB
Chair of Investment Committee
Independent Director
Andy Coupe has extensive commercial and capital
markets experience having worked in a number
of sectors within the financial markets over the
last 30 years. Andy was formerly a consultant in
investment banking at UBS New Zealand Limited,
where his role principally encompassed equity capital
markets involving numerous initial public offerings
and secondary market transactions, and takeover
transactions. Andy is a director of Kingfish, Marlin
Global, Briscoe Group, Coupe Consulting and
Gentrack Group. He is also Chair of Farmright, the
New Zealand Takeovers Panel and Deputy Chair of
Television New Zealand. Andy’s principal place of
residence is Hamilton.
Andy was first appointed to the Barramundi board on
1 March 2013.
CAROL CAMPBELL BCom, CA, CMInstD
Chair of Audit and Risk Committee
Independent Director
Member of the Remuneration & Nomination Committee
Member of the Investment Committee
Carol Campbell is a chartered accountant and a
member of Chartered Accountants Australia and New
Zealand. Carol has extensive financial experience and
a sound understanding of efficient board governance.
Carol holds a number of directorships across a broad
spectrum of companies, including T&G Global, New
Zealand Post, Asset Plus and NZME where she is also
Chair of the Audit and Risk Committee. Carol is also
a director of Kingfish and Marlin Global. Carol was a
director of The Business Advisory Group, a chartered
accountancy practice, for 11 years and prior to that
a partner at Ernst & Young for over 25 years. Carol’s
principal place of residence is Auckland.
Carol was first appointed to the Barramundi board on
5 June 2012.
CARMEL FISHER BCA
Director
Member of the Remuneration & Nomination
Committee
Member of the Investment Committee
Carmel Fisher established Fisher Funds Management
Limited in 1998. Carmel’s interest and involvement in
the New Zealand share market spans nearly 30 years
and she is widely recognised as one of New Zealand’s
pre-eminent investment professionals. Carmel’s
career started when she left Victoria University with
an accounting degree to spend four years in the
sharebroking industry. She then managed funds for
Prudential Portfolio Managers and Sovereign Asset
Management before launching Fisher Funds. Carmel
is also a director of Kingfish, Marlin Global and New
Zealand Trade & Enterprise. Carmel’s principal place of
residence is Auckland.
Carmel was first appointed to the Barramundi board on
30 January 2004.
BOARD OF DIRECTORS
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FOR THE YEAR ENDED 30 JUNE 2018
CORPOR ATE
GOVERNANCE STATEMENT
Barramundi’s board recognises the importance of
good corporate governance and is committed to
ensuring that the company meets best practice
governance principles to the extent that it is
appropriate for the nature of the Barramundi
operations. Strong corporate governance practices
encourage the creation of value for Barramundi
shareholders, while ensuring the highest standards
of ethical conduct and providing accountability and
control systems commensurate with the risks involved.
The board is responsible for establishing and
implementing the company’s corporate governance
frameworks, and is committed to fulfilling this role
in accordance with best practice having appropriate
regard to applicable laws, the NZX Corporate
Governance Best Practice Code (“NZX Code”) and the
Financial Markets Authority Corporate Governance
- Principles and Guidelines. The board oversees the
management of Barramundi, with the day-to-day
management responsibilities of Barramundi being
delegated to Fisher Funds Management Limited
(“Fisher Funds” or “the Manager”).
As at 30 June 2018, Barramundi was in compliance
with the NZX Code, with the exception of
recommendations 4.3 and 5.3 for the reasons
explained under the relevant principles.
The corporate governance policies and procedures,
and board and committee charters, are regularly
reviewed by the board against the corporate
governance standards set by NZX, any regulatory
changes, and developments in corporate
governance practices.
The Barramundi constitution and each of the
charters, codes and policies referred to in this section
are available on the Barramundi website (www.
barramundi.co.nz ) under the “About Barramundi”
“Policies” section.
Principle 1 – Code of ethical behaviour
Directors should set high standards of ethical
behaviour, model this behaviour and hold
management accountable for these standards being
followed throughout the organisation.
CODE OF ETHICS & STANDARDS OF
PROFESSIONAL CONDUCT
Barramundi’s Code of Ethics & Standards of
Professional Conduct details the ethical and
professional behavioural standards required of the
directors and those employees of the Manager who
work on Barramundi matters.
The Code of Ethics & Standards of Professional
Conduct covers a wide range of areas including:
standards of behaviour, conflicts of interest, proper
use of company information and assets, compliance
with laws and policies, reporting concerns and
receiving gifts.
Any person who becomes aware of a breach or
suspected breach of the Code of Ethics & Standards
of Professional Conduct is required to report it
immediately in accordance with the procedure set
out in the Code of Ethics & Standards of Professional
Conduct.
Training on the Code of Ethics & Standards of
Professional Conduct is included as part of the
induction process for new directors and employees
of the Manager.
SECURITIES TRADING POLICY
The Securities Trading Policy details the trading
restrictions on persons nominated by Barramundi
(including its directors and employees of the Manager
who work on Barramundi matters) in Barramundi
shares and other securities.
In relation to Barramundi shares, nominated persons,
with the permission of the board of Barramundi, may
trade in Barramundi shares only during the trading
window commencing immediately after Barramundi’s
weekly disclosure of its net asset value to the New
Zealand Stock Exchange (“NZX”) and ending at the
close of trading two days following the net asset
value disclosure.
Nominated persons may not trade in Barramundi
shares when they have price sensitive information that
is not publicly available.
CONFLICTS OF INTEREST POLICY
The Conflicts of Interest Policy outlines the board’s
policy on conflicts of interest. The policy details the
process to be adopted for identifying conflicts of
interests and managing any such conflicts.
Principle 2 – Board composition and
performance
To ensure an effective board, there should be
a balance of independence, skills, knowledge,
experience and perspectives.
BOARD CHARTER
Barramundi’s board operates under a written
charter which defines the respective functions and
responsibilities of the board, focusing on the values,
principles and practices that provide the corporate
governance framework.
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CORPORATE GOVERNANCE STATEMENT CONTINUED
The board has overall responsibility for all decision
making within Barramundi. The board is responsible
for the direction and control of Barramundi and
is accountable to shareholders and others for
Barramundi’s performance and its compliance with
the appropriate laws and standards. The board
has delegated the day-to-day management of
Barramundi to the Manager.
The board uses committees to address certain
matters that require detailed consideration.
The board retains ultimate responsibility for the
function of its committees and determines their
responsibilities. The board is assisted in meeting
its responsibilities by receiving reports and plans
from Fisher Funds and through its annual work
programme.
Directors have access to key employees of the
Manager who are connected to the activities of
Barramundi and can request any information they
consider necessary for informed decision making.
NOMINATION AND APPOINTMENT
OF DIRECTORS
In accordance with Barramundi’s constitution
and NZX Listing Rules, one third of the directors
are required to retire by rotation and may offer
themselves for re-election by shareholders
each year. Procedures for the appointment and
removal of directors are also governed by the
constitution. The Remuneration and Nominations
Committee is responsible for identifying and
nominating candidates to fill director vacancies
for board approval.
WRITTEN AGREEMENT
The company provides a letter of appointment
to each newly appointed director setting out the
terms of their appointment. The letter includes
information regarding the board’s responsibilities,
expectations of directors, tenure and independence,
expected time commitments, indemnity and
insurance provisions, declaration of interests and
confidentiality. New directors are required to
consent to act as a director.
DIRECTOR INFORMATION AND
INDEPENDENCE
The board comprises four directors with diverse
backgrounds, skills, knowledge, experience and
perspectives. Information about each director
including a profile of experience is available on
page 26 of this Annual Report and also on the
Barramundi website.
The board takes into account guidance provided under
the NZX Main Board/Debt Market Listing Rules in
determining the independence of directors. Director
independence is considered annually. Directors have
undertaken to inform the board as soon as practicable
if they think their status as an independent director
has or may have changed.
As at 30 June 2018, the board considers that Alistair
Ryan (Chair), Carol Campbell and Andy Coupe are
independent directors. As at 30 June 2018, the board
considers that Carmel Fisher is not an independent
director by virtue of the Management Agreement
between Barramundi and Fisher Funds, and her being
a director of Fisher Funds.
Information in respect of directors’ ownership
interests is available on page 58.
DIVERSITY
Barramundi has a formal Diversity Policy. The board
views diversity as including but not being limited
to, skills, qualifications, experience, gender, race,
age, ethnicity and cultural background. The board
recognises that having a diverse board will enhance
effectiveness in key areas.
All appointments to the board will be based on merit,
and will include consideration of the board’s diversity
needs, including gender diversity. Under the policy,
the principal measurable diversity objective is to
embed gender diversity as an active consideration in
all succession planning for board positions. During the
year, there were no appointments to the board.
The board’s gender composition was as follows:
NumberProportion
2018 positionFemaleMaleFemaleMale
Directors2250%50%
Corporate
Manager
1100%
NumberProportion
2017 positionFemaleMaleFemaleMale
Directors2250%50%
Corporate
Manager
1100%
The board believes that Barramundi has achieved the
objectives set out in its Diversity Policy for the year
ended 30 June 2018.
DIR ECTOR TR A INING
All directors are responsible for ensuring they remain
current in understanding their duties as directors.
To ensure ongoing education, directors are regularly
informed of developments that affect the company’s
industry and business environment.
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ASSESSMENT OF DIRECTOR
PERFORMANCE
The Remuneration and Nominations Committee
conducts a formal review of director, committee and
board performance annually. Appropriate strategies
for improvement are recommended to the board as
and when required. The Chair of the board also has
discussions with directors on individual performance.
SEPARATION OF THE CHAIR AND
CHIEF EXECUTIVE
Barramundi delegates its management personnel
requirements to Fisher Funds pursuant to an
Administration Services Agreement. The Chair of
Barramundi is a different person to the Chief Executive
of Fisher Funds.
Principle 3 – Board committees
The board should use committees where this will
enhance its effectiveness in key areas, while still
retaining board responsibility.
The board has three standing committees: the
Audit and Risk Committee, the Remuneration
and Nominations Committee and the Investment
Committee.
Each committee operates under a charter approved
by the board. The charter of each committee is
reviewed annually.
DIRECTOR MEETING ATTENDANCE
A total of eight board meetings, two Audit and
Risk Committee meetings, one Remuneration
and Nominations Committee meeting and two
Investment Committee meetings were held in
2018. Director attendance at board meetings and
committee member attendance at committee
meetings is shown below.
DirectorBoard
Audit and
Risk
Committee
Remuneration
and
Nominations
Committee
Investment
Committee
Carol
Campbell
8/82/21/12/2
Andy
Coupe
8/82/21/12/2
Carmel
Fisher*
8/82/21/12/2
Alistair
Ryan
8/82/21/12/2
*Carmel Fisher was an attendee at the Audit and Risk
Committee meetings.
AUDIT AND RISK COMMITTEE
The Audit and Risk Committee Charter sets out
the objectives of the Audit and Risk Committee,
which are to provide assistance to the board
in fulfilling its responsibilities in relation to the
company’s financial reporting, internal controls
structure, risk management systems and the
external audit function.
The Audit and Risk Committee focuses on audit
and risk management and specifically addresses
responsibilities relative to financial reporting and
regulatory compliance.
The Audit and Risk Committee is accountable for
ensuring the performance and independence of
the external auditor, including that the external
auditor or lead audit partner is changed at least
every five years.
The Audit and Risk Committee also reviews the
appropriateness of any non audit services and
recommends to the board which services, other
than the statutory audit, may be provided by
PricewaterhouseCoopers as auditor.
The auditor has a clear line of direct communication
at any time with either the Chair of the Audit and
Risk Committee or the Chair of the board, both of
whom are independent directors. During the year,
the Audit and Risk Committee held private sessions
with the auditor.
The Audit and Risk Committee currently comprises
independent directors Carol Campbell (Chair), Alistair
Ryan and Andy Coupe, all of whom have appropriate
financial experience and an understanding of the
industry in which Barramundi operates.
The Audit and Risk Committee may have in
attendance the Corporate Manager and/or other
employees of the Manager and such other persons
including the external auditor as it considers
necessary to provide appropriate information and
explanations.
R EMUNER ATION AND
NOMINATIONS COMMITTEE
The Remuneration and Nominations Committee
Charter sets out the objectives of the
Remuneration and Nominations Committee
which are to set and review the level of directors’
remuneration, ensure a formal rigorous and
transparent procedure for the appointment of new
directors to the board, and evaluate the balance of
skills, knowledge and experience on the board. The
Remuneration and Nominations Committee also
assesses the performance of directors, the board
and board sub-committees.
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The Remuneration and Nominations Committee
currently comprises independent directors Alistair
Ryan (Chair), Carol Campbell, Andy Coupe and non-
independent director Carmel Fisher.
INVESTMENT COMMITTEE
The Investment Committee Charter sets out the
objective of the Investment Committee which is to
oversee the investment management of Barramundi
to ensure the portfolio is managed in accordance
with the investment mandate and with the long-term
performance objectives of Barramundi.
The Investment Committee currently comprises
independent directors Andy Coupe (Chair), Carol
Campbell, Alistair Ryan and non-independent director
Carmel Fisher.
TAKEOVER RESPONSE PROTOCOLS
The board has adopted a formal Takeover Response
Protocol as an internal framework that sets out the
process to be followed if there is a takeover offer for
Barramundi.
Principle 4 – Reporting and disclosure
The board should demand integrity in financial and
non-financial reporting, and in the timeliness and
balance of corporate disclosures.
CONTINUOUS DISCLOSURE
Barramundi is committed to promoting investor
confidence by providing complete and equal access
to information in accordance with the NZX Listing
Rules. Barramundi has a Continuous Disclosure
Policy designed to ensure this occurs. The Corporate
Manager is responsible for ensuring compliance
with the NZX continuous disclosure requirements
and overseeing and co-ordinating disclosure to the
exchange.
CHARTERS AND POLICIES
The key corporate governance documents, including
policies and charters, are available on Barramundi’s
website under the “About Barramundi” “Policies”
section.
FINANCIAL REPORTING
Barramundi believes its financial reporting is balanced,
clear and objective. Barramundi is committed to
ensuring integrity and timeliness in its financial and
non-financial reporting, ensuring the market and
shareholders are provided with an objective view on
the performance of the company.
The Audit and Risk Committee oversees the quality
and integrity of external financial reporting, including
the accuracy, completeness and timeliness of financial
statements. The Audit and Risk Committee reviews
half-yearly and annual financial statements and
makes recommendations to the board concerning
accounting policies, areas of judgement, compliance
with accounting standards, stock exchange and legal
requirements and the results of the external audit.
As at 30 June 2018, Barramundi does not have a
formal environmental, social and governance (ESG)
framework. Barramundi will continue to assess
whether it is appropriate that an ESG framework is
adopted in the future.
Principle 5 – Remuneration
The remuneration of directors and executives
should be transparent, fair and reasonable.
DIRECTORS’ REMUNERATION
The Director Remuneration Policy sets out the
structure of the remuneration to non-executive
directors, the review process and reporting
requirements.
Directors’ fees are determined by the board on
the recommendation of the Remuneration and
Nominations Committee within the aggregate amount
approved by shareholders. The current directors’ fee
pool limit of $125,000 (plus GST if any) was approved
by shareholder resolution at the 2015 Annual
Shareholders’ Meeting.
Each year the Remuneration and Nominations
Committee reviews the level of directors’
remuneration. The Remuneration and Nominations
Committee considers the skills, performance,
experience and level of responsibility of directors
when undertaking the review, and is authorised to
obtain independent advice on market conditions.
The following table sets out the remuneration
received by each director from Barramundi for the
year ended 30 June 2018.
Directors’ remuneration* for the 12 months
ended 30 June 2018
A B Ryan (Chair)$50,000
(1)
C A Campbell$ 37, 5 0 0
(2)
R A Coupe$ 37, 5 0 0
(3)
*excludes GST
(1) $5,000 of this amount was applied to the purchase of
8,440 shares under the Barramundi share purchase plan.
(2) $3,750 of this amount was applied to the purchase of
6,330 shares under the Barramundi share purchase plan.
C A Campbell receives $5,000 as Chair of Audit and Risk
Committee.
(3) $3,750 of this amount was applied to the purchase
of 6,330 shares under the Barramundi share purchase
plan. R A Coupe receives $5,000 as Chair of Investment
Committee.
CORPORATE GOVERNANCE STATEMENT CONTINUED
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For the 2018 financial year, Carmel Fisher did not
receive a director’s fee.
Details of remuneration paid to directors are also
disclosed in note 4 to the financial statements. The
directors’ fees disclosed in the financial statements
include a portion of non-recoverable GST expensed by
Barramundi.
DIRECTORS’ SHAREHOLDING -
SHARE PURCHASE PLAN
A Share Purchase Plan was introduced by the board in
2012 which requires each director to allocate 10% of
their annual director’s fee to the purchase (on market)
of Barramundi shares. Once an individual director’s
shareholding reaches 50,000 shares, the director can
elect whether to continue with the plan. The intention
of the Share Purchase Plan is to further align the
interests of directors with those of shareholders.
CEO R EMUNER ATION
Barramundi delegates its management personnel
requirements to Fisher Funds pursuant to an
Administration Services Agreement. Consequently,
Fisher Funds is responsible for non-director
remuneration matters.
Principle 6 – Risk management
Directors should have a sound understanding of
the material risks faced by the issuer and how to
manage them. The board should regularly verify
that the issuer has appropriate processes that
identify and manage potential and material risks.
RISK MANAGEMENT FRAMEWORK
The board has overall responsibility for Barramundi’s
system of risk management and internal control.
Barramundi has in place policies and procedures
to identify areas of significant business risk and
implements procedures to manage those risks
effectively.
Key risk management tools used by Barramundi
include the Audit and Risk Committee function,
outsourcing of certain functions to service providers,
internal controls, financial and compliance reporting
procedures and processes and business continuity
planning. Barramundi also maintains insurance policies
that it considers adequate to meet its insurable risks.
The Audit and Risk Committee and board receive
regular reports on the operation of risk management
policies and procedures. Significant risks are discussed
at each board meeting, and/or as required.
In addition to Barramundi’s policies and procedures in
place to manage business risks, Fisher Funds has its own
comprehensive risk management framework. The board
is informed of key changes to Fisher Funds’ framework.
HEALTH AND SAFETY
Barramundi’s Manager operates under a Health and
Safety Policy. Under this policy, Fisher Funds assumes
responsibility for the health and safety of its employees.
Principle 7 – Auditors
The board should ensure the quality and
independence of the external audit process.
Barramundi’s Audit and Risk Committee makes
recommendations to the board on the appointment
of the external auditor. The Audit and Risk Committee
monitors the independence and effectiveness of the
external auditor and approves and reviews any non-
audit services performed by the external auditor. An
External Auditor Independence Policy which documents
the framework of Barramundi’s relationship with its
external auditor was adopted in August 2018.
The Audit and Risk Committee meets with the external
auditor to approve their terms of engagement, audit
partner rotation (at least every five years) and audit fee,
and to review and provide feedback in respect of the
annual audit plan. The Audit and Risk Committee holds
private sessions with the auditor.
Barramundi’s current external auditor is
PricewaterhouseCoopers (“PwC”), and was appointed
by shareholders at the 2007 annual meeting in
accordance with the provisions of the Companies Act
1993 (“the Act”). PwC is automatically reappointed as
auditor under Part 11, Section 207T of the Act.
The Audit and Risk Committee has assessed PwC to be
independent and confirmed that the non-audit services
provided in relation to confirming the amounts used in
the performance fee calculation have not compromised
PwC’s independence.
PwC, as external auditor of the 2018 financial
statements, is invited to attend this year’s annual
meeting and will be available to answer questions
about the conduct of the audit, preparation and
content of the auditor’s report, accounting policies
adopted by Barramundi, and their independence in
relation to the conduct of the audit.
Barramundi delegates the day-to-day management
responsibilities to Fisher Funds and the designated
Corporate Manager is responsible for operational and
compliance risks across Barramundi’s business.
Principle 8 – Shareholder rights and relations
The board should respect the rights of shareholders
and foster constructive relationships with
shareholders that encourage them to engage with
the issuer.
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INFORMATION FOR SHAREHOLDERS
The board recognises the importance of providing
shareholders with comprehensive, timely and equal
access to information about its activities. The board
aims to ensure that shareholders have available to
them all information necessary to assess Barramundi’s
performance.
Barramundi’s website, www.barramundi.co.nz,
provides information to shareholders and investors
about the company. Barramundi’s ‘Investor Centre’
contains a range of information including periodic
and continuous disclosures to the NZX, half year and
annual reports and content related to the Annual
Shareholders’ Meeting. The website also contains
information about Barramundi’s directors, copies of
key corporate governance documents and general
company information.
The board recognises that other stakeholders may
have an interest in Barramundi’s activities. While
there are no specific stakeholders’ interests that are
currently identifiable, Barramundi will continue to
review policies in consideration of future interests.
COMMUNICATING W ITH
SHAREHOLDERS
Barramundi communicates regularly with its
shareholders through its monthly and quarterly
updates. The company receives questions from
shareholders from time to time, and has processes
in place to ensure shareholder communications are
responded to within a reasonable timeframe. The
company’s website sets out Barramundi’s appropriate
contact details for communications from shareholders.
Barramundi also provides options for shareholders
to receive and send communications by post or
electronically.
CORPORATE GOVERNANCE STATEMENT CONTINUED
SHAREHOLDER VOTING RIGHTS
In accordance with the Companies Act 1993,
Barramundi’s Constitution and the NZX Main Board
Listing Rules, Barramundi refers major decisions which
may change the nature of Barramundi to shareholders
for approval. Barramundi conducts voting at its
shareholder meetings by way of poll and on the basis
of one share, one vote.
NOTICE OF ANNUAL MEETING
The 2018 Barramundi Notice of Annual Meeting will
be available on the Barramundi website at least 28
days prior to the meeting.
This year’s meeting will be held at 10.30am on
19 October 2018, at the Ellerslie Event Centre
in Auckland. Full participation of shareholders is
encouraged at the annual meeting and shareholders
are encouraged to submit questions in writing prior to
the meeting.
MANAGEMENT AGREEMENT
RENEWAL
The Management Agreement between Barramundi
and Fisher Funds is subject to renewal every five
years. The Management Agreement is next subject to
renewal in 2021.
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FOR THE YEAR ENDED 30 JUNE 2018
DIRECTORS’ STATEMENT
OF RESPONSIBILITY
We present the financial statements for Barramundi Limited for the year ended 30 June 2018.
We have ensured that the financial statements for Barramundi Limited present fairly the financial position of the
company as at 30 June 2018 and its financial performance and cash flows for the year ended on that date.
We have ensured that the accounting policies used by the company comply with generally accepted accounting
practice in New Zealand and believe that proper accounting records have been kept. We have ensured
compliance of the financial statements with the Financial Markets Conduct Act 2013.
We also consider that adequate controls are in place to safeguard the company’s assets and to prevent and
detect fraud and other irregularities.
The Barramundi board authorised these financial statements for issue on 20 August 2018.
Alistair Ryan Carmel Fisher
Carol Campbell Andy Coupe
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FINANCIAL
STATEMENTS CONTENTS
35 Statement of Comprehensive Income
36 Statement of Changes in Equity
37 Statement of Financial Position
38 Statement of Cash Flows
39 Notes to the Financial Statements
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The accompanying notes form an integral part of these financial statements.
BARRAMUNDI LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
NOTES 2018 2 0 17
$000$000
Interest income 101 131
Dividend income 2, 811 2,512
Net changes in fair value of financial assets and liabilities2 20,133 2,986
Other income3 1,308 65
Total net income 24,353 5,694
Operating expenses4 (4,159) (2,400)
Operating profit before tax 20,19 4 3,294
Total tax benefit/(expense)5 293 (634)
Net operating profit after tax 20,487 2,660
Other comprehensive income 0 0
Total comprehensive income after tax 20,487 2,660
Basic earnings per share7 12.99c 1.82c
Diluted earnings per share7 12.84c 1.80c
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The accompanying notes form an integral part of these financial statements.
BARRAMUNDI LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018
ATTRIBUTABLE TO SHAREHOLDERS OF THE COMPANY
NOTES
SHARE
CAPITAL
PERFORMANCE
FEE RESERVE
ACCUMULATED
DEFICITS
TOTAL
EQUIT Y
$000$000$000$000
Balance at 1 July 2016 127, 419 0 (30,087)97, 332
Comprehensive income
Profit for the year 0 0 2,660 2,660
Other comprehensive income 0 0 0 0
Total comprehensive income for the year
ended 30 June 2017
0 0 2,660 2,660
Transactions with owners
Share buybacks6 (225) 0 0 (225)
Warrant issue costs6 (13) 0 0 (13)
Dividends paid6 0 0 ( 7, 8 8 9 ) ( 7, 8 8 9 )
New shares issued under dividend reinvestment
plan
6 2,684 0 0 2,684
Shares issued from treasury stock under dividend
reinvestment plan
6 216 0 0 216
Total transactions with owners for the year
ended 30 June 2017 2,662 0 (7, 8 8 9) (5,227)
Balance at 30 June 2017 130,081 0 (35,316) 94,765
Comprehensive income
Profit for the year 0 0 20,487 20,487
Other comprehensive income 0 0 0 0
Total comprehensive income for the year
ended 30 June 2018 0 0 20,487 20,487
Transactions with owners
Shares issued for warrants exercised6 8,564 0 0 8,564
Share buybacks6 (2,252) 0 0 (2,252)
Dividends paid6 0 0 (8,501) (8,501)
New shares issued under dividend reinvestment
plan
6 962 0 0 962
Shares issued from treasury stock under dividend
reinvestment plan
6 2,137 0 0 2,137
Manager's performance fee to be settled with
ordinary shares
16 0 1,0 02 0 1,0 02
Total transactions with owners for the year
ended 30 June 2018
9,411 1,002 (8,501) 1,912
Balance at 30 June 2018 139,492 1,002 (23,330) 117,16 4
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The accompanying notes form an integral part of these financial statements.
BARRAMUNDI LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
NOTES 2018 2 0 17
$000$000
SHAREHOLDERS' EQUITY6117,16 494,765
Represented by:
ASSETS
Current Assets
Cash and cash equivalents 10 7, 6 4 4 7,70 3
Trade and other receivables 8 364 234
Financial assets at fair value through profit or loss 2 111,97 8 88,343
Current tax receivable5 1 0
Total Current Assets 119,987 96,280
Non-current Assets
Other receivable8 37 186
Deferred tax asset5 309 0
Total Non-current Assets 346 186
TOTAL ASSETS 120,333 96,466
LIABILITIES
Current Liabilities
Trade and other payables 9 2,489 1,14 4
Current tax payable5 0 513
Financial liabilities at fair value through profit or loss2 680 10
Total Current Liabilities 3,169 1,667
Non-current Liabilities
Deferred tax liability5 0 34
Total Non-current Liabilities 0 34
TOTAL LIABILITIES 3,169 1,701
NET ASSETS 117,16 4 94,765
These financial statements have been authorised for issue for and on behalf of the board by:
A B Ryan / Chair C A Campbell / Chair of the Audit and Risk Committee
20 August 2018 20 August 2018
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The accompanying notes form an integral part of these financial statements.
BARRAMUNDI LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2018
NOTES 2018 2 0 17
$000$000
Operating Activities
Sale of investments 36,781 63,980
Interest received 100 132
Dividends received 2,678 2,512
Other income received 1,142 117
Purchase of investments (39,162) (55,525)
Operating expenses (2,132) (2,403)
Taxes paid (560) (615)
Net cash (outflows)/inflows from operating activities10 (1,153) 8 ,19 8
Financing Activities
Proceeds from warrants exercised 8,564 0
Warrant issue costs 0 (13)
Share buybacks (2,234) (225)
Dividends paid (net of dividends reinvested) (5,402) (4,989)
Net cash inflows/(outflows) from financing activities 928 (5,227)
Net (decrease)/increase in cash and cash equivalents held (225) 2,971
Cash and cash equivalents at beginning of the year 7,70 3 4,780
Effects of foreign currency translation on cash balance 166 (48)
Cash and cash equivalents at end of the year10 7,6 4 4 7,703
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BARRAMUNDI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1 BASIS OF ACCOUNTING
Reporting Entity
Barramundi Limited (“Barramundi” or “the company”) is listed on the NZX Main Board, is registered
in New Zealand under the Companies Act 1993 and is a FMC Reporting Entity under the Financial
Markets Conduct Act 2013.
The company’s registered office is Level 1, 67-73 Hurstmere Road, Takapuna, Auckland.
Basis of Preparation
These financial statements have been prepared in accordance with the requirements of Part 7
of the Financial Markets Conduct Act 2013, the NZX Main Board listing rules and New Zealand
Generally Accepted Accounting Practice (NZ GAAP). They comply with New Zealand equivalents to
International Financial Reporting Standards (NZ IFRS) as appropriate for profit-oriented entities, and
International Financial Reporting Standards (IFRS).
The financial statements have been prepared on the historical cost basis, as modified by the fair
valuation of certain assets as identified in specific accounting policies and in the accompanying
notes. The financial statements are presented in New Zealand dollars, rounded to the nearest one
thousand dollars.
The financial statements include GST where it is charged by other parties as it cannot be reclaimed.
Foreign Currency Transactions and Translations
Foreign currency transactions are converted into New Zealand dollars using exchange rates
prevailing at transaction date. Foreign currency assets and liabilities are translated into New Zealand
dollars using the exchange rates prevailing at the balance date.
Foreign exchange gains or losses relating the financial assets and liabilities at fair value through
profit or loss are presented in the Statement of Comprehensive Income within “Net changes in fair
value of financial assets and liabilities”.
Foreign exchange gains and losses relating to cash and cash equivalents, trade and other
receivables, and trade and other payables are presented in the Statement of Comprehensive Income
within “Other income”.
Accounting Policies
Accounting policies that summarise the recognition and measurement basis used and are relevant
to an understanding of the financial statements, are provided throughout the notes to the financial
statements and are designated by a
symbol.
The accounting policies adopted have been consistently applied to all years presented, unless
otherwise stated. NZ IFRS 9: Financial Instruments is a standard relevant to the company which is
not yet effective and has not yet been applied in preparing the financial statements. Based on the
company’s assessment, NZ IFRS 9 is not expected to have a material impact on the classification and
measurement of the company’s financial assets. Minor changes are expected to disclosures about
the company’s financial assets, particularly in the year of adoption of the new standard.
There are no other accounting standards that have been issued but are not yet effective that are
expected to have a material impact on these financial statements.
Critical Judgements, Estimates and Assumptions
The preparation of financial statements requires the directors to make judgements, estimates and
assumptions that affect the application of policies and reported amounts of assets and liabilities,
income and expenses. Judgements are designated by a
j
symbol in the notes to the financial
statements. There were no material estimates or assumptions required in the preparation of these
financial statements.
Authorisation of Financial Statements
The Barramundi board of directors authorised these financial statements for issue on 20 August 2018.
No party may change these financial statements after their issue.
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BARRAMUNDI LIMITED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 2 INVESTMENTS
Investments are initially recognised at fair value and are subsequently revalued to reflect changes
in fair value. Net changes in the fair value of investments are recognised in the Statement of
Comprehensive Income.
Listed equity investments are classified as designated investment assets at fair value through profit
or loss. Forward foreign exchange contracts are classified as held for trading financial assets at fair
value through profit or loss.
Forward foreign exchange contracts can be used as economic hedges for equity investments
against currency risk. Therefore, they are accounted for on the same basis as those investments
and are recognised at their fair value.
All purchases and sales of investments are recognised at trade date, which is the date the
company commits to purchase or sell the investment and transaction costs are expensed as
incurred. When an investment is sold, any gain or loss arising on the sale is included in the
Statement of Comprehensive Income. Realised gains or losses are calculated as the difference
between the sale proceeds and the carrying amount of the item.
Dividend income from investments is recognised in the Statement of Comprehensive Income when
the company’s right to receive payments is established (ex-dividend date).
j
Barramundi has classified all its investments at fair value through profit or loss. This
designation on inception is to provide more relevant information given that the investment
portfolio is managed, and performance evaluated, on a fair value basis, in accordance with a
documented investment strategy.
The fair value of listed equity investments traded in active markets are based on last sale
prices at balance date, except where the last sale price falls outside the bid-ask spread for a
particular investment, in which case the bid price will be used to value the investment.
The fair value of forward foreign exchange contracts is determined by using valuation
techniques based on spot exchange rates and forward points supplied by The World Markets
Company PLC via Thomson Reuters.
20182 0 17
$000$000
Financial assets and liabilities at fair value through profit or loss
Financial Assets:
Investments designated at fair value through profit or loss
Australian listed equity investments111,97 888,343
Total financial assets at fair value through profit or loss111,97888,343
Financial Liabilities:
Financial liabilities at fair value through profit or loss - held for trading
Forward foreign exchange contracts68010
Total financial liabilities at fair value through profit or loss68010
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20182 0 17
$000$000
Net changes in fair value of financial assets and liabilities
Investments designated at fair value through profit or loss
Australian equity investments18,5522,631
Foreign exchange gains on equity investments3,451113
Total gains on designated financial assets22,0032,744
Investments at fair value through profit or loss - held for trading
(Losses)/gains on forward foreign exchange contracts (1,870)242
Total (losses)/gains on financial assets and liabilities held for
trading
(1,870)242
Net changes in fair value of financial assets and liabilities20,1332,986
The notional value of forward foreign exchange contracts held at 30 June 2018 was
$61,704,132 (30 June 2017: $50,191,641).
Investments recognised at fair value are categorised according to a fair value hierarchy that shows
the extent of judgement used in determining their fair value. Where unadjusted quoted prices
are used, the investments are categorised as Level 1. When inputs derived from quoted prices
are used, the investments are categorised as Level 2 and, if inputs are not based on observable
market data they are categorised as Level 3.
j
All equity investments held by Barramundi are categorised as Level 1 and all forward foreign
exchange contracts are classified as Level 2 in the fair value hierarchy. There were no financial
instruments classified as Level 3 at 30 June 2018 (30 June 2017: none).
NOTE 3 OTHER INCOME
20182 0 17
$000$000
GST refunds (note 11)1,3180
Foreign exchange (losses)/gains on cash and cash equivalents(10)65
Total other income1,30865
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BARRAMUNDI LIMITED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 4 OPER ATING EXPENSES
Management fee (note 11) 1,349 1,404
Performance fee (note 11) 1,999 0
Administration services (note 11) 159 159
Directors' fees (note 11) 132 14 4
Brokerage 199 371
Investor relations and communications 111 111
Custody and accounting fees 52 56
NZX fees 44 41
Professional fees 30 43
Auditor's fees:
Statutory audit and review of financial statements 35 33
Non-assurance services
1
5 2
Regulatory fees 9 2
Other operating expenses 35 34
Total operating expenses 4 ,159 2,400
1
Non-assurance services relate to agreed upon procedures performed in respect of the performance fee
calculation. No other fees were paid to the auditor during the year (2017: nil).
NOTE 5 TAXATION
Barramundi is a Portfolio Investment Entity (“PIE”) for tax purposes.
Taxation expense comprises both current and deferred tax. Current tax is the expected tax
payable on the taxable income for the year, using tax rates enacted at balance date, and any
adjustment to tax payable in respect of previous years. Current tax for current and prior periods
is recognised as a liability (or asset) to the extent that it is unpaid (or refundable). Deferred tax
(if any) is recognised as the differences between the carrying amounts of assets and liabilities in
the financial statements and the amounts used for taxation purposes. A deferred tax asset is only
recognised to the extent it is probable it will be utilised.
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20182 0 17
$000$000
Taxation expense is determined as follows:
Operating profit before tax 20,19 4 3,294
Non-taxable realised gain on financial assets and liabilities (7,499) (5,152)
Non-taxable unrealised (gain)/loss on financial assets and liabilities (14,306) 3,13 0
Fair Dividend Rate income 415 887
Exempt dividends subject to Fair Dividend Rate (142) (316)
Non-deductible expenses and other 290 332
Prior period adjustment 0 88
Taxable (loss)/income (1,048) 2,263
Tax at 28% (293) 634
Taxation expense comprises:
Current tax 46 613
Deferred tax (339) (4)
Prior period adjustment 0 25
Total tax (benefit)/expense (293) 634
Current tax balance
Opening balance (513) (491)
Prior period adjustment 0 (25)
Current tax movements (46) (634)
Tax paid 560 615
Credits used 0 22
Current tax receivable/(payable) 1 (513)
Deferred tax balance
Opening balance (34) (38)
Current year losses 389 0
Accrued dividends (50) 4
Other 4 0
Deferred tax asset/(liability)309(34)
j
A deferred tax asset has been recognised as it is probable that future tax profits will be available to
utilise the loss.
Imputation credits
The imputation credits available for subsequent reporting periods total $7,369 (2017: $518,376).
This amount represents the balance of the imputation credit account at the end of the reporting
period, adjusted for imputation credits that will arise from the receipt of dividends recognised as a
receivable at 30 June 2018.
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BARRAMUNDI LIMITED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 6 SHAREHOLDERS’ EQUITY
Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares and warrants are shown in equity as a deduction.
When shares are acquired by the company, the amount of consideration paid is recognised
directly in equity. Acquired shares are classified as treasury stock and presented as a deduction
from share capital. When treasury stock is subsequently sold or reissued, the cost of treasury
stock is reversed and the realised gain or loss on sale or reissue, net of any directly attributable
incremental transaction costs, is recognised within share capital.
Barramundi has 165,630,469 fully paid ordinary shares on issue (2017: 149,103,903). All ordinary
shares rank equally and have no par value. All shares carry an entitlement to dividends and one vote
is attached to each fully paid ordinary share.
Buybacks
Barramundi maintains an ongoing share buyback programme. As at 30 June 2018, Barramundi had
acquired 3,837,320 (2017: 349,361) shares under the programme which allows up to 5% of the
ordinary shares on issue (as at the date 12 months prior to the acquisition) to be acquired. Shares
acquired under the buyback programme are held as treasury stock and subsequently reissued to
shareholders under the dividend reinvestment plan. There was no treasury stock held at balance
date (2017: nil).
Warrants
On 22 November 2016, 36,471,368 Barramundi warrants were allotted and quoted on the NZX
Main Board on 23 November 2016. One new warrant was issued to all eligible shareholders for
every four shares held on record date (21 November 2016). On 24 November 2017, 14,832,269
warrants were exercised at $0.58 per warrant and the remaining 21,639,099 warrants lapsed.
Dividends
j
Dividend distributions to the company’s shareholders are recognised as a liability in the financial
statements in the period in which the dividends are declared by the Barramundi board.
Barramundi has a distribution policy where 2% of average NAV is distributed each quarter.
Dividends paid during the year comprised:
2018
$000
CENTS PER
SHARE
2 0 17
$000
CENTS PER
SHARE
29 Sep 20171,9321.3030 Sep 20162,0211.40
22 Dec 20172,13 41.3122 Dec 20162,0231.39
29 Mar 20182,2501.3831 Mar 20171,9081.30
29 Jun 20182,1851.3329 Jun 20171,9371.31
8,5015.327, 8 8 95.40
Dividend Reinvestment Plan
Barramundi has a dividend reinvestment plan which provides shareholders with the option to
reinvest all or part of any cash dividends in fully paid ordinary shares at a 3% discount to the five-
day volume weighted average share price from the date the shares trade ex-entitlement. During the
year ended 30 June 2018, 5,486,617 ordinary shares (2017: 4,830,043 ordinary shares) were issued
in relation to the plan for the quarterly dividends paid. To participate in the dividend reinvestment
plan, a completed participation notice must be received by Barramundi before the next record date.
Performance Fee Reserve
The portion of any performance fee to be paid in ordinary shares is an equity share-based
payment and is recognised at fair value in an equity reserve until the ordinary shares are issued.
See note 11(ii) for further details.
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NOTE 7 EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the
company by the weighted average number of ordinary shares on issue during the year. Diluted
earnings per share assumes conversion of all dilutive potential ordinary shares in determining the
denominator.
20182 0 17
Basic earnings per share
Profit attributable to owners of the company ($'000)20,4872,660
Weighted average number of ordinary shares on issue net of treasury stock
('000)
15 7,70 4146,188
Basic earnings per share12.99c1.82c
Diluted earnings per share
Profit attributable to owners of the company ($'000)20,4872,660
Weighted average number of ordinary shares on issue net of treasury stock
('000)
15 7,70 4146,188
Diluted effect of warrants on issue ('000)2491,528
Ordinary shares to be issued under performance fee arrangement ('000)1,6160
159,569147,716
Diluted earnings per share12.84c1.80c
NOTE 8 TRADE AND OTHER RECEIVABLES
Trade and other receivables are classified as loans and receivables and are initially recognised
at fair value, and subsequently measured at amortised cost less any provision for impairment.
Receivables are assessed on a case-by-case basis for impairment.
j
The fair value of trade and other receivables is equivalent to their carrying amount.
20182 0 17
$000$000
Current assets
Interest receivable 6 6
Dividends receivable 299 163
Other receivables and prepayments 59 65
Total current trade and other receivables 364 234
Non-current asset
Other receivables 37 186
Total non-current other receivable 37 186
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BARRAMUNDI LIMITED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 9 TRADE AND OTHER PAYABLES
Trade and other payables are classified as other financial liabilities and are initially recognised at
fair value, and subsequently measured at amortised cost.
j
The fair value of trade and other payables is equivalent to their carrying amount.
20182 0 17
$000$000
Related party payable (note 11) 1,133 126
Unsettled purchases of investments 1,233 927
Share buyback payable 18 0
Other payables and accruals 105 91
Total trade and other payables 2,489 1,14 4
NOTE 10 CASH AND CASH FLOW RECONCILIATION
Cash and Cash Equivalents
Cash and cash equivalents are classified as loans and receivables and comprise cash on deposit at
banks and short-term money market deposits.
20182 0 17
$000$000
Cash - New Zealand dollars 942 1,395
Cash - Australian dollars 6,702 6,308
Cash and Cash Equivalents 7,6 4 4 7,703
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Reconciliation of Net Operating Profit after Tax to Net Cash Flows from Operating Activities
20182 0 17
$000$000
Net operating profit after tax20,4872,660
Items not involving cash flows:
Unrealised (gains)/losses on cash and cash equivalents (166) 48
Unrealised (gains)/losses on revaluation of investments (13,634) 2,758
(13,800) 2,806
Impact of changes in working capital items
Increase in trade and other payables 1,345 749
Increase in trade and other receivables (130) (48)
Change in current and deferred tax (857) 18
358 719
Items relating to investments
Amount paid for purchases of investments (39,162) (55,525)
Amount received from sales of investments 36,781 63,980
Realised gains on investments (6,495) (5,743)
Increase in unsettled purchases of investments (306) (699)
(9,18 2) 2,013
Other
Increase in share buybacks payable (18) 0
Performance fee to be settled by issue of shares 1,0 02 0
984 0
Net cash (outflows)/inflows from operating activities (1,153) 8 ,19 8
NOTE 11 RELATED PARTY INFORMATION
Parties are considered to be related if one party has the ability to control or exercise significant
influence over the other party in making financial or operational decisions.
Transactions with related parties
The Manager of Barramundi is Fisher Funds Management Limited (“Fisher Funds” or “the
Manager”). Fisher Funds is a related party by virtue of the Management Agreement and having a
director in common. In return for the performance of its duties as Manager, Fishers Funds is paid the
following fees:
(i) Management fee: 1.25% (plus GST) per annum of the gross asset value, calculated weekly and
payable monthly in arrears. The fee reduces if the Manager underperforms, thereby aligning the
Manager’s interests with those of the Barramundi shareholders. For every 1% underperformance
(relative to the change in the NZ 90 Day Bank Bill Index) the management fee percentage is reduced
by 0.1%, subject to a minimum 0.75% per annum management fee.
(ii) Performance fee: Fisher Funds may earn an annual performance fee of 15% (plus GST) of
excess returns over and above the performance fee hurdle return (being the change in the NZ 90
Day Bank Bill Index plus 7%) subject to achieving the High Water Mark (“HWM”).
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NOTE 11 RELATED PARTY INFORMATION CONTINUED
The HWM is the dollar amount by which the net asset value per share exceeds the highest net asset
value per share (after adjustment for capital changes and distributions) at the end of any previous
calculation period in which a performance fee was payable, multiplied by the number of shares at
the end of the period.
In accordance with the terms of the Management Agreement, when a performance fee is earned,
it is paid within 30 days of the balance date and the Manager is required to apply half of the
performance fee to subscribe for shares, issued at a price equal to the volume weighted average
traded price (“VWAP”) of ordinary shares over the last five trading days ended 30 June for the
relevant year. Ordinary shares issued to the Manager rank equally in all respects with existing
ordinary shares in Barramundi.
Performance fees paid to the Manager are recognised as an expense in the Statement of
Comprehensive Income. The portion paid in share capital is an equity-settled share-based
payment and is recognised at the fair value of half of the performance fee expense (excluding
GST) as an equity reserve until the ordinary shares are issued. The component paid in cash is
treated in line with a typical operating expense.
At 30 June 2018, the Manager had achieved a return in excess of the performance fee hurdle return
and the HWM. For the year ended 30 June 2018, excess returns of $12,916,119 (2017: nil) were
generated and the net asset value per share before the deduction of a performance fee was $0.71
(2017: $0.64), which exceeded the HWM after adjustment for capital changes and distributions
of $0.52 (2017: $0.59). Accordingly, the company has expensed a performance fee of $1,999,437
(2017: nil) which is made up of $1,966,479 (including GST) earned by the Manager and $32,958
from a post balance date adjustment. See note 16 for full details of how the performance fee was
settled for the year ended 30 June 2018.
(iii) Administration fee: Fisher Funds provides corporate administration services and a fee is
payable monthly in arrears.
20182 0 17
$000$000
Fees earned and payable:
Fees earned by the Manager for the year ending 30 June
Management fees 1,349 1,404
Performance fees 1,999 0
Administration services 159 159
Total fees earned by the Manager 3,507 1,563
Fees payable to the Manager at 30 June
Management fees 122 113
Performance fees payable in cash 998 0
Administration services 13 13
Total fees payable to the Manager 1,133 126
Investments by the Manager
The Manager held shares in, and received dividends from, the company at 30 June 2018 which total
0.36% of the total shares on issue (2017: 0.40% and 0.41% of total warrants on issue).
Investment transactions with related parties
Off-market transactions between Barramundi and other funds managed by Fisher Funds take place
for the purposes of rebalancing portfolios without incurring brokerage costs. These transactions are
conducted after the market has closed at last sale price (on an arm’s length basis). Purchases for the
year ended 30 June 2018 totalled $2,545,364 (2017: $13,498) and sales totalled $nil (2017: $nil).
BARRAMUNDI LIMITED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2018
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GST Refund
Fisher Funds historically charged Barramundi GST at the standard GST rate on the provision of
investment services. Last year the Inland Revenue Department (“IRD”) confirmed that the lower GST
fund manager rate of 1.5% could be charged to Barramundi (and this rate has been applied since 1
August 2017).
During April 2018, Barramundi received from Fisher Funds $1,330,764, being a refund of
overcharged GST of $1,235,042 plus use of money interest (“UOMI”) of $95,722 on the provision of
investment services to Barramundi for the eight year period from 1 August 2009 to 31 July 2017.
In the Statement of Comprehensive Income, the portion of the GST refund relating to historical years
of $1,221,780 and UOMI of $95,722, which totals $1,317,502, has been recognised as other income,
with the balance of $13,262 relating to the current year recognised as a reduction in management
fee expense. The GST refund and UOMI was excluded from the performance fee calculation as it
was not generated by investment activity.
Directors
The directors of Barramundi are the only key management personnel and they earn a fee for their
services. The directors’ fee pool is $125,000 (plus GST if any) per annum. The amount paid to
directors is disclosed in note 4 under directors’ fees (currently only independent directors earn a
director’s fee).
The directors also held shares in the company at 30 June 2018 which total 1.22% of total shares
on issue (30 June 2017: 1.07% of the total shares on issue and 1.09% of total warrants on issue).
Dividends were also received by the directors as a result of their shareholding.
NOTE 12 FINANCIAL RISK MANAGEMENT
The company is subject to a number of financial risks which arise as a result of its investment
activities, including market risk, credit risk and liquidity risk.
The Management Agreement between Barramundi and Fisher Funds details permitted
investments. Financial instruments currently recognised in the financial statements also comprise
cash and cash equivalents, forward foreign exchange contracts, trade and other receivables and
trade and other payables.
Market Risk
All equity investments present a risk of loss of capital, often due to factors beyond the company’s
control such as competition, regulatory changes, commodity price changes and changes in general
economic climates domestically and internationally. The Manager moderates this risk through careful
stock selection and diversification, daily monitoring of the market positions and regular reporting to
the board of directors. In addition, the Manager has to meet the criteria of authorised investments
within the prudential limits defined in the Management Agreement.
The market risk of the company is concentrated in Australia.
The maximum market risk resulting from financial instruments is determined as their fair value.
Price Risk
Price risk is the risk of gains or losses from changes in the market price of investments. The company
is exposed to the risk of fluctuations in the underlying value of its listed portfolio companies. There
were no companies individually comprising more than 10% of Barramundi’s total assets at 30 June
2018 (30 June 2017: none).
Interest Rate Risk
Interest rate risk is the risk of movements in interest rates. Surplus cash is held in interest bearing
Australian and New Zealand bank accounts. The company is therefore exposed to the risk of gains or
losses or changes in interest income from movements in both Australian and New Zealand interest
rates. There is no hedge against the risk of movements in interest rates.
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NOTE 12 FINANCIAL RISK MANAGEMENT CONTINUED
Currency Risk
Currency risk is the risk that the fair value or future cash flows of an investment will fluctuate
because of changes in foreign exchange rates. The company holds assets denominated in Australian
dollars and it is therefore exposed to currency risk as the value of Australian denominated equities
and cash held in Australian dollars will fluctuate with changes in the relative value of the New
Zealand dollar. The company mitigates this risk by entering into forward foreign exchange contracts
as and when the Manager deems it appropriate. At any time during the year, the portfolio may be
hedged by an amount deemed appropriate by the Manager.
Sensitivity Analysis
The table below summarises the impact on net operating profit after tax and shareholders’ equity to
reasonably possible changes arising from market risk exposure at 30 June as follows:
20182 0 17
$000$000
Price risk
1
Investments designated at fair value
(listed)
Carrying value 111,97 888,343
Impact of a 10% change in market prices: +/- 11,19 88,834
Interest rate risk
2
Cash and cash equivalentsCarrying value 7, 6 4 4 7,70 3
Impact of a 1% change in interest rates: +/- 76 77
Currency risk
3
Cash and cash equivalentsCarrying value6,7026,308
Impact of a +10% change in exchange rates(609)(573)
Impact of a -10% change in exchange rates745 701
Investments designated at fair value
(listed)
Carrying value111,97 888,343
Impact of a +10% change in exchange rates(10,18 0)(8,031)
Impact of a -10% change in exchange rates12,4 429,816
Financial assets and liabilities held for
trading
Carrying value(680)(10)
Impact of a +10% change in exchange rates5,6094,563
Impact of a -10% change in exchange rates(6,856)(5,577)
Net foreign currency payables/receivablesCarrying value(891)(573)
Impact of a +10% change in exchange rates81(116 )
Impact of a -10% change in exchange rates(99)142
1
A variable of 10% was selected for price risk as this is a reasonably expected movement based on historic
trends in equity prices.
2
A variable of 1% was selected as this is a reasonably expected movement based on past overnight cash rate
movements. The percentage movement for the interest rate sensitivity relates to an absolute change in the
interest rate rather than a percentage change in interest rate.
3
A variable of 10% was selected as this is a reasonably expected movement based on historic trends in
exchange rate movements.
BARRAMUNDI LIMITED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2018
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Credit Risk
Credit risk is the risk that a counterparty will default on its contractual obligations resulting in
financial loss to the company. In the normal course of its business, the company is exposed to credit
risk from transactions with its counterparties.
Other than cash at bank and short-term unsettled trades, there are no significant concentrations of
credit risk. The company does not expect non-performance by counterparties, therefore no collateral
or security is required.
Listed securities are held by an independent custodian, Trustees Executors Limited. All transactions in
listed securities are paid for on delivery according to standard settlement instructions. The company
invests cash with banks registered in New Zealand and Australia which carry a minimum short-term
credit rating of S&P A-1+ (or equivalent).
The maximum credit risk of financial assets is deemed to be their carrying amount as reported in the
Statement of Financial Position.
Liquidity Risk
Liquidity risk is the risk that the assets held by the company cannot readily be converted to cash
in order to meet the company’s financial obligations as they fall due. The company endeavours to
invest the proceeds from the issue of shares in appropriate investments while maintaining sufficient
liquidity (through daily cash monitoring) to meet working capital and investment requirements.
Liquidity to fund investment requirements can be augmented through the procurement of a debt
facility from a registered bank to a maximum value of 20% of the gross asset value of the company.
There were no such debt facilities at 30 June 2018 (2017: nil).
Capital Risk Management
The company’s objective is to prudently manage shareholder capital (share capital, reserves,
accumulated deficits and borrowings (if any)).
In order to maintain or adjust the capital structure, the company may adjust the amount of
dividends paid to shareholders, return capital to shareholders, undertake share buybacks, issue new
shares and secure borrowings in the short term.
The company was not subject to any externally imposed capital requirements during the year.
Since announcing a long-term distribution policy in August 2009, the company continues to pay 2%
of average net asset value each quarter.
NOTE 13 NET ASSET VALUE
The audited net asset value per share of Barramundi as at 30 June 2018 was $0.71 (30 June 2017:
$0.64), calculated as the net assets of $117,164,415 divided by the number of shares on issue of
165,630,469.
NOTE 14 COMMITMENTS AND CONTINGENT LIABILITIES
There were no unrecognised contractual commitments or contingent liabilities as at 30 June 2018
(2017: nil).
NOTE 15 FINANCIAL REPORTING BY SEGMENTS
The company operates in a single operating segment, being financial investment in Australia.
There has been no change to the operating segment during the year.
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BARRAMUNDI LIMITED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 16 SUBSEQUENT EVENTS
(i) In accordance with the terms of the Management Agreement, Barramundi settled the
performance fee due to Fisher Funds of $1,966,479 (including GST) relating to the year ended 30
June 2018 on 27 July 2018 as follows:
1. Fisher Funds used half of the performance fee (excluding GST) to subscribe for Barramundi
ordinary shares at the VWAP of ordinary shares over the last five trading days ended 30 June
2018, being $0.60 per share (rounded to two decimal places). Barramundi issued 1,615,592
ordinary shares totalling $968,709; and
2. The balance of $997,770 (including GST) was paid in cash to Fisher Funds.
(ii) A post balance date adjustment of $32,958 was made to increase the cost of the performance
fee, to recognise the difference between the VWAP of ordinary shares over the last five trading
days ended 30 June 2018 ($0.60) and the share price on 27 July 2018 when the performance fee
was paid to Fisher Funds ($0.62). This brings the total cost of the 1,615,592 shares issued for the
performance fee to $1,001,667.
(iii) The board declared a dividend of 1.40 cents per share on 20 August 2018. The record date for
this dividend is 13 September 2018 with a payment date of 28 September 2018.
There were no other events which require adjustment to or disclosure in these financial statements.
PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland 1142, New Zealand
T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz
Independent auditor’s report
To the shareholders of Barramundi Limited
Barramundi Limited’s financial statements comprise:
the statement of financial position as at 30 June 2018;
the statement of comprehensive income for the year then ended;
the statement of changes in equity for the year then ended;
the statement of cash flows for the year then ended; and
the notes to the financial statements, which include significant accounting policies.
Our opinion
In our opinion, the financial statements of Barramundi Limited (the Company), present fairly, in all
material respects, the financial position of the Company as at 30 June 2018, its financial performance
and its cash flows for the year then ended in accordance with New Zealand Equivalents to
International Financial Reporting Standards (NZ IFRS) and International Financial Reporting
Standards (IFRS).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) ISAs
(NZ) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the audit of the financial statements section of
our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
We are independent of the Company in accordance with Professional and Ethical Standard 1 (Revised)
Code of Ethics for Assurance Practitioners (PES 1) issued by the New Zealand Auditing and Assurance
Standards Board and the International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Our firm carries out other services for the Company in the area of agreed upon procedures in relation
to the performance fee calculation. The provision of this service has not impaired our independence.
PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland 1142, New Zealand
T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz
Independent auditor’s report
To the shareholders of Barramundi Limited
Barramundi Limited’s financial statements comprise:
the statement of financial position as at 30 June 2018;
the statement of comprehensive income for the year then ended;
the statement of changes in equity for the year then ended;
the statement of cash flows for the year then ended; and
the notes to the financial statements, which include significant accounting policies.
Our opinion
In our opinion, the financial statements of Barramundi Limited (the Company), present fairly, in all
material respects, the financial position of the Company as at 30 June 2018, its financial performance
and its cash flows for the year then ended in accordance with New Zealand Equivalents to
International Financial Reporting Standards (NZ IFRS) and International Financial Reporting
Standards (IFRS).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) ISAs
(NZ) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the audit of the financial statements section of
our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
We are independent of the Company in accordance with Professional and Ethical Standard 1 (Revised)
Code of Ethics for Assurance Practitioners (PES 1) issued by the New Zealand Auditing and Assurance
Standards Board and the International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Our firm carries out other services for the Company in the area of agreed upon procedures in relation
to the performance fee calculation. The provision of this service has not impaired our independence.
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PwC 6
Our audit approach
Overview
An audit is designed to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
Overall materiality: $585,700, which represents approximately 0.5% of the net
assets. We used this benchmark because, in our view, this is an appropriate
benchmark for a fund.
We agreed with the Audit and Risk Committee that we would report to them
misstatements identified during our audit above $56,200 as well as
misstatements below that amount that, in our view, warranted reporting for
qualitative reasons.
Because of the significance of the investments to the financial statements, we
have determined that there is one key audit matter: valuation and existence of
investments designated at fair value through profit or loss.
Materiality
The scope of our audit was influenced by our application of materiality.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Company materiality for the financial statements as a whole as set out above.
These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in the aggregate on the financial statements as a whole.
Audit scope
We designed our audit by assessing the risks of material misstatement in the financial statements and
our application of materiality. As in all of our audits, we also addressed the risk of management
override of internal controls including among other matters, consideration of whether there was
evidence of bias that represented a risk of material misstatement due to fraud.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an
opinion on the financial statements as a whole, taking into account the structure of the Company, type
of investments held by the Company, the use of third party service providers, the accounting processes
and controls, and the industry in which the Company operates.
The Directors are responsible for the governance and the control activities of the Company. The
Directors have delegated certain responsibilities to Fisher Funds Management Limited (the
Investment Manager) and Trustees Executors Limited (the Administrator). The Company has
appointed Trustees Executors Limited (the Custodian) to act as Custodian of the Company’s
investments.
In establishing our overall audit approach we assessed the risk of material misstatement, taking into
account the nature, likelihood and potential magnitude of any misstatement. As part of our risk
assessment, we considered the Company’s interaction with the Investment Manager and
Administrator and the control environment in place at the Administrator and the Custodian.
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PwC 7
Key audit matter
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial statements of the current year. Given the nature of the Company, we have
one key audit matter: valuation and existence of investments designated at fair value through profit or
loss. The matter was addressed in the context of our audit of the financial statements as a whole, and
in forming our opinion thereon, and we do not provide a separate opinion on the matter.
Key audit matter How our audit addressed the key audit matter
Valuation and existence of investments
designated at fair value through profit or loss
Investments designated at fair value through
profit or loss (the Investments) are valued at
$112.0 million and represent 93% of total
assets.
Further disclosures on the Investments are
included at note 2 to the financial statements.
This was an area of focus for our audit and the
area where significant audit effort was
directed.
As at 30 June 2018, all Investments are in
companies that are listed on the ASX and are
actively traded with readily available, quoted
market prices. The market prices are quoted in
Australian dollars, which are then translated to
New Zealand dollars using the exchange rate at
30 June 2018.
All Investments are held by the Custodian on
behalf of the Company and administered by
the Administrator.
Our audit procedures included updating our
understanding of the business processes employed by
the Company for accounting for, and valuing, their
investment portfolio.
We obtained confirmation from the Custodian that
the company was the registered owner of all the
recorded investments.
Our procedures also included assessing the
Administrator’s and Custodian’s Internal Controls
Report for Custody, Investment Accounting and
Registry services for the periods ended 30 September
2017 and 31 March 2018. The Administrator and
Custodian have confirmed that there has been no
material change to their control environment in the
period from 1 April 2018 to 30 June 2018.
Our audit procedures over the valuation of the
Investments included agreeing the price for all
Investments held at 30 June 2018, and the exchange
rate at which they have been converted from
Australian dollars to New Zealand dollars, to
independent third party pricing sources. We had no
matters arising from the procedures performed.
Information other than the financial statements and auditor’s report
The Directors are responsible for the annual report. The annual report is expected to be made available
to us after the date of this auditor's report.
Our opinion on the financial statements does not cover the other information included in the annual
report and we do not and will not express any form of assurance conclusion on the other information.
In connection with our audit of the financial statements, our responsibility is to read the other
information when it becomes available and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated.
When we read the annual report, if we conclude that there is a material misstatement therein, we are
required to communicate the matter to the Directors.
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PwC 8
Responsibilities of the Directors for the financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the financial statements in accordance with NZ IFRS and IFRS, and for such internal control as the
Directors determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the Directors either intend to liquidate the Company or to
cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements, as a whole,
are 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 ISAs (NZ) and ISAs 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 these financial statements.
A further description of our responsibilities for the audit of the financial statements is located at the
External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-report-2/
This description forms part of our auditor’s report.
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been
undertaken so that we might state those matters which we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s shareholders, as a body, for our
audit work, for this report or for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Richard Day.
For and on behalf of:
Chartered Accountants Auckland
20 August 2018
PwC8
Responsibilities of the Directors for the financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the financial statements in accordance with NZ IFRS and IFRS, and for such internal control as the
Directors determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparingthe financial statements, the Directors are responsible for assessing the Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the Directors either intend to liquidate the Company or to
cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements, as a whole,
are 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 ISAs NZ and ISAs 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 these financial statements.
A further description of our responsibilities for the audit of the financial statements is located at the
External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-report-2/
This description forms part of ourauditor’s report.
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been
undertaken so that we might state those matters which we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s shareholders, as a body, for our
audit work, for this report or for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Richard Day.
For and on behalf of:
Chartered AccountantsAuckland
21 August 2017
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SHAREHOLDER INFORMATION
SPREAD OF SHAREHOLDERS AS AT 08 AUGUST 2018
Holding Range
# of
Shareholders# of Shares% of Total
1 to 9991687 7, 28 90.1
1,000 to 4,9995141,346,8 420.8
5,000 to 9,9998275,451, 8243.3
10,000 to 49,9992,28450,117,72829.9
50,000 to 99,99945130,502,07918.2
100,000 to 499,99931155,385,71833.1
500,000 +2724,263,58114.6
TOTAL4,582167,145,0 61100.0
20 LARGEST SHAREHOLDERS AS AT 08 AUGUST 2018
Holder Name# of Shares% of Total
ASB NOMINEES LIMITED <339992 A/C>2,207,3351.32
ASB NOMINEES LIMITED <ACCOUNT 340941 - ML>1, 828 ,1921.09
IVOR ANTHONY MILLINGTON1,550,0000.93
COLLEEN ANNE KERR + WALTER MICK GEORGE YOVICH + JANET
MARY KERR + HEATHER ANNE PRYOR <J V & C A KERR FAMILY A/C>1,170,6 430.70
DEREK JOHN SMITH + MAUREEN MARGARET SMITH1,15 4,6 690.69
HOE SENG LIM1,076,7830.64
MIRJANA VILKE1,059,6000.63
FNZ CUSTODIANS LIMITED1,035,4250.62
LEWIS TAIT SUTHERLAND1,002,0370.60
FORSYTH BARR CUSTODIANS LIMITED <1-CUSTODY>931,2120.56
CUSTODIAL SERVICES LIMITED <A/C 3>897,8750.54
BRYAN THOMAS SEDDON + DOROTHY EDITH ALLISON SEDDON850,0000.51
ANTHONY JOHN SIMMONDS + MAUREEN SIMMONDS + HERON HILL
TRUSTEE COMPANY LIMITED <AJ & M SIMMONDS FAMILY A/C>839,5790.50
ROGER GEORGE JOBSON76 7, 2 370.46
FRANZ CHRISTIAN ELIAS749,5340.45
THOMAS VINCENT BRIEN + JILLIAN MAUREEN BRIEN736,1530.44
LESLIE BURGESS734,7710.44
GERARDUS VAN DEN BEMD730,8500.44
CUSTODIAL SERVICES LIMITED <A/C 2>621,0870.37
CUSTODIAL SERVICES LIMITED <A/C 4>601,9670.36
TOTAL20,544,94912.29
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DIRECTORS’ RELEVANT INTERESTS IN EQUITY SECURITIES AS AT 30 JUNE 2018
STATUTORY INFORMATION
INTERESTS REGISTER
Barramundi is required to maintain an interests register in which the particulars of certain transactions and matters
involving the directors must be recorded. The interests register for Barramundi is available for inspection at its
registered office. Particulars of entries in the interests register as at 30 June 2018 are as follows:
Ordinary Shares
Held DirectlyHeld by Associated Persons
A B Ryan
(1)
85,969
C M Fisher
(2)
1, 828 ,192
C A Campbell
(3)
64,822
R A Coupe
(4)
4 6,165
(1) A B Ryan purchased 8,440 shares on market in the year ended 30 June 2018 as per the Barramundi share purchase
plan (purchase price $0.59). A B Ryan received 7,292 shares in the year ended 30 June 2018, issued under the dividend
reinvestment plan (average issue price $0.57). A B Ryan exercised 13,320 warrants and was issued 13,320 ordinary shares in
the year ended 30 June 2018.
(2) Associated persons of C M Fisher exercised 365,639 warrants and was issued 365,639 ordinary shares in the year ended
30 June 2018.
(3) C A Campbell purchased 6,330 shares on market in the year ended 30 June 2018 as per the Barramundi share purchase
plan (purchase price $0.59). C A Campbell received 5,499 shares in the year ended 30 June 2018, issued under the dividend
reinvestment plan (average issue price $0.57). C A Campbell exercised 10,050 warrants and was issued 10,050 ordinary
shares in the year ended 30 June 2018.
(4) R A Coupe purchased 6,330 shares on market in the year ended 30 June 2018 as per the Barramundi share purchase
plan (purchase price $0.59). R A Coupe received 3,923 shares in the year ended 30 June 2018, issued under the dividend
reinvestment plan (average issue price $0.57). R A Coupe exercised 6,811 warrants and was issued 6,811 ordinary shares in
the year ended 30 June 2018.
DIRECTORS’ INDEMNITY AND INSURANCE
Barramundi has arranged directors’ and officers’ liability insurance covering directors acting on behalf of
Barramundi. Cover is for damages, judgements, fines, penalties, legal costs awarded and defence costs arising
from wrongful acts committed while acting for Barramundi. The types of acts that are not covered include
dishonest, fraudulent, malicious acts or omissions, wilful breach of statute or regulations.
Barramundi has granted an indemnity in favour of all current and future directors of the company in accordance
with its constitution.
DIRECTORS HOLDING OFFICE
Barramundi’s directors as at 30 June 2018 were:
• A B Ryan (Chair)
• C M Fisher
• C A Campbell
• R A Coupe
During the year, there were no appointments to the board.
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In accordance with the Barramundi constitution, at the 2017 Annual Shareholders’ Meeting, Andy Coupe retired
by rotation and being eligible was re-elected. Carol Campbell retires by rotation at the 2018 Annual Shareholders’
Meeting and being eligible, offers herself for re-election.
DIRECTORS’ RELEVANT INTERESTS
The following are relevant interests of Barramundi’s directors as at 30 June 2018:
A B RyanKingfish LimitedChair
Marlin Global LimitedChair
Christchurch Casinos LimitedDirector
Metlifecare LimitedDirector
Evolve Education Group LimitedChair
Audit Oversight CommitteeMember
Kiwibank LimitedDirector
C M Fisher Kingfish LimitedDirector
Marlin Global LimitedDirector
New Zealand Trade & EnterpriseDirector
Fisher Funds Management Limited Director
C A CampbellKingfish LimitedDirector
Marlin Global LimitedDirector
T&G Insurance LimitedDirector
Hick Bros Civil Construction Limited & associated companies Director
Woodford Properties LimitedDirector
alphaXRT LimitedDirector
New Zealand Post LimitedDirector
NZME LimitedDirector
Key Assets NZ LimitedDirector
Kiwibank LimitedDirector
Nica Consulting LimitedDirector
NPT LimitedDirector
Key Assets FoundationTrustee
Cord Bank LimitedDirector
Bankside Chambers LtdDirector
Chubb Insurance New Zealand LimitedDirector
R A CoupeKingfish LimitedDirector
Marlin Global LimitedDirector
New Zealand Takeovers PanelChair
Coupe Consulting LimitedDirector
Farmright LimitedChair
Gentrack Group LimitedDirector
Briscoe Group Limited Director
Television New Zealand LimitedDeputy Chair
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AUDITOR’S REMUNERATION
During the 30 June 2018 year, the following amounts were paid/payable to the auditor, PricewaterhouseCoopers
New Zealand.
$000
Statutory audit and review of financial statements35
Non assurance services5
PricewaterhouseCoopers New Zealand is a registered audit firm and its audit partners are licensed auditors under
the Auditor Regulation Act 2011.
DONATIONS
Barramundi did not make any donations during the year ended 30 June 2018.
STATUTORY INFORMATION CONTINUED
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GLOSSARY
NET ASSET VALUE (NAV)
The NAV per share represents the market value of the total assets of Barramundi (investments and cash) less
any liabilities (expenses and tax), divided by the number of shares on issue. The NAV is calculated at the close of
business each Wednesday and at month end. The NAV is reviewed by PwC at interim period end and audited at
the end of each financial year. The NAV is announced to the NZX each Thursday and at month end.
This metric is useful as it reflects the underlying value of the investment portfolio.
ADJUSTED NET ASSET VALUE (ADJUSTED NAV)
The adjusted NAV per share represents the total assets of Barramundi (investments and cash) minus any liabilities
(expenses and tax) divided by the number of shares on issue and adds back dividends paid to shareholders and
adjusts for the impacts of shares issued under the dividend reinvestment plan at the discounted reinvestment
price, shares bought off the market (share buy-backs) at a price different to the NAV and warrants exercised at a
price different to the NAV at the time exercised.
Adjusted NAV assumes all dividends are reinvested in the company’s dividend reinvestment plan and excludes
imputation credits.
This metric is useful as it reflects the underlying performance of the investment portfolio adjusted for dividends,
share buy-backs and warrants, which are a capital allocation decisions and not a reflection of the portfolio’s
performance.
ADJUSTED NAV RETURN
The Adjusted NAV Return is the percentage change in Adjusted NAV and is calculated monthly, so the Adjusted
NAV Return for multi-month periods is the compounded monthly returns. The Adjusted NAV Return is the net
return to an investor after fees and tax.
The Adjusted NAV calculation and the Adjusted NAV Return are reviewed by an independent actuary at each
interim and annual reporting period.
GROSS PERFORMANCE RETURN
Gross Performance Return is an estimated investment return on a before tax and before expenses basis. It is
calculated monthly and is appropriate for assessing the Manager’s performance against an index or benchmark.
The monthly gross performance is calculated by adding together the interest, dividend income and investment
gains (or losses) generated by Barramundi’s portfolio of investments over the month. The Gross Performance
Return represents the gross performance divided by Barramundi’s opening asset value for the month plus the net
cash flow for the month, assuming it was paid mid-month. The result is expressed as a percentage. The Gross
Performance Return for multi-month periods are the compounded monthly returns.
The Gross Performance Return is used to compare the Manager’s performance against a benchmark index return
(which are also on a gross basis with no fees, costs or tax).
This metric reflects the Manager’s portfolio performance in terms of stock selection and hedging of currency
movements.
The Gross Performance Return is reviewed by an independent actuary at each interim and annual
reporting period.
TOTAL SHAREHOLDER RETURN (TSR)
The TSR combines the share price performance, the warrant price performance (when warrants are on issue), the
net value of converting warrants into shares, and dividends paid to shareholders.
TSR assumes:
• all dividends paid are reinvested in the company’s dividend reinvestment plan at the discounted
reinvestment price and excludes imputation credits.
• all shareholders that have received warrants (for free), have subsequently exercised their warrants at the
warrant expiry date and bought shares (if they were in the money).
This metric is useful as it reflects the return of an investor who reinvests their dividends and, if in the money,
exercises their warrants at warrant maturity date for additional shares. No metric has been included for investors
who choose other investment options. The TSR is reviewed by an Independent Actuary at each Interim and
Annual reporting period.
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GLOSSARY CONTINUED
OPERATING EXPENSE (OPEX) RATIO
The OPEX ratio represents total expenses, excluding brokerage and tax, divided by Barramundi’s average net
asset value for the period. The result is expressed as a percentage.
This metric is useful when comparing Barramundi’s expenses to other investment vehicles.
The OPEX ratio may also be reported on an excluding performance fees basis.
The OPEX ratio is reviewed by an independent actuary at each annual reporting period.
DIVIDEND RETURN
The dividend return is calculated by dividing the dollar value of dividends paid per share by the opening share
price. This metric is useful as it indicates how much Barramundi pays out in dividends each year relative to its
share price.
The dividend return is reviewed by an independent actuary at each interim and annual reporting period.
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REGISTERED OFFICE
Barramundi Limited
Level 1
67 – 73 Hurstmere Road
Takapuna
Auckland 0622
DIRECTORS
Independent Directors
Alistair Ryan (Chair)
Carol Campbell
Andy Coupe
Director
Carmel Fisher
CORPORATE MANAGER
Wayne Burns
MANAGER
Fisher Funds Management
Limited
Level 1
67 – 73 Hurstmere Road
Takapuna
Auckland 0622
SHARE REGISTRAR
Computershare Investor Services
Limited
Level 2
159 Hurstmere Road
Takapuna
Auckland 0622
Private Bag 92119
A u c k l a n d 114 2
Phone: +64 9 488 8777
Email: enquiry@computershare.co.nz
FOR MORE INFORMATION
For enquiries about transactions, changes of address and dividend payments, contact the share registrar above.
Alternatively, to change your address, update your payment instructions and to view your investment portfolio
including transactions online, please visit: www.investorcentre.com/NZ
FOR ENQUIRIES ABOUT BARRAMUNDI CONTACT
Barramundi Limited
Level 1, 67 – 73 Hurstmere Road, Takapuna, Auckland 0622
Private Bag 93502, Takapuna, Auckland 0740
Phone: +64 9 489 7074 | Fax: +64 9 489 7139 | Email: enquire@barramundi.co.nz
AUDITOR
PricewaterhouseCoopers
New Zealand
Level 8
188 Quay Street
A u c k l a n d 114 2
SOLICITOR
Bell Gully
Level 21
48 Shortland Street
Auckland 1010
BANKER
ANZ Bank New Zealand Limited
23-29 Albert Street
Auckland 1010
NATURE OF BUSINESS
The principal activity of
Barramundi is investment in
quality, growing Australian
companies.
The information contained in this annual report is provided for information purposes only and does not constitute an offer,
invitation, basis for a contract, financial advice, other advice or recommendation to conclude any transaction for the purchase
or sale of any security, loan or other instrument. In particular, the information contained in this annual report is not financial
advice for the purposes of the Financial Advisers Act 2008 and should not be relied upon when making an investment decision.
Professional financial advice from an authorised financial adviser should be taken before making an investment.
DIRECTORY
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2018
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SHAREHOLDER COMMUNICATIONS
Section 209C Notice
Electronic Annual Reports
Dear Shareholder,
We are pleased to advise that the Barramundi Annual Report for the year ended 30 June 2018 is available on our
website at http://www.barramundi.co.nz/investor-centre/reports-and-annual-meetings/. Future Annual Reports and
Interim Reports will be publically available from the same website.
Even though the Annual Report and Interim Report are available electronically, you can request that a printed copy of the
Annual Report and Interim Report (when available) be mailed to you free of charge by ticking the box below and returning
this form to Computershare in the enclosed reply paid envelope. If you make this request, we will send you a hard copy of
the Annual Report and Interim Report each year until you request us not to or you stop being a shareholder.
Keeping in touch online
We provide a number of communications to keep you informed as a Barramundi shareholder: Monthly Updates, Quarter
Update Newsletters, Annual Meeting presentations, Annual Reports and Interim Reports. Each of these communications
can be found on our website www.barramundi.co.nz under the heading Investor Centre.
You can choose to receive email notification of when the reports are available to view online by entering your email
address below and returning this form in the enclosed reply paid envelope; or fax to (09) 488 8787; or scan and email
to ecomms@computershare.co.nz
Alternatively, you can elect your preferences for shareholder communications online, by visiting
www.investorcentre.com/nz. Select ‘My profile’ and click on the ‘Update’ button on the communication preferences tile.
You will need your CSN or Holder Number and FIN to initially access Investor Centre and register your account. Once you
have registered your account you will access this service with your own User ID and Password.
Please remember that our website, www.barramundi.co.nz, contains a lot of useful information, such as the weekly
NAV, current share price, portfolio performance, market announcements and key policies which is a resource
established for you as a shareholder. Please use the website, and if there is any additional information that you would
find valuable on the website don’t hesitate to let us know by emailing us at enquire@barramundi.co.nz
If you have any questions about changing how you receive shareholder communications, please contact
Computershare using the contact details at the top of this form.
Provide your email address here
Yes, I’d like to receive all Barramundi shareholder communications electronically. These communications
include the Annual and Interim Reports, payment advices, meeting documentation and any other company
related information which is appropriate to be sent electronically.
Yes, I would like to receive, free of charge, a printed copy of Barramundi’s Annual and Interim Reports (when
available) each year.
Update your information:
Enquiries:
Online:
www.investorcentre.com/nz
By Mail:
Computershare Investor Services Limited
Private Bag 92119, Auckland 1142
Phone: +64 9 488 8777
Fax: +64 9 488 8787
Email: ecomms@computershare.co.nz
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.