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INTERIM REPORT 31 DECEMBER 2014
I N T E R I M R E P O R T31 DECEMBER 2014
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UPCOMING EVENTS TO 30 JUNE 2015
Dividend Payment 27 March 2015 (ex-date 11 March, record date 13 March)
Quarter End 31 March 2015
March Quarter Update Newsletter May 2015
Financial Year End 30 June 2015
CONTENTS
03 Directors’ Overview
08 Manager’s Report
16 Independent Review Report
17 Statement of Comprehensive Income
18 Statement of Changes in Equity
19 Statement of Financial Position
20 Statement of Cash Flows
21 Notes to the Interim Financial Statements
33 Directory
The interim report is provided for information purposes only and does not constitute an offer, invitation, basis for a contract, �nancial 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 interim report is not �nancial advice for the purposes of the Financial Advisers Act 2008 and should not be relied upon when making an investment decision. Professional �nancial advice from an authorised �nancial adviser should be taken before making an investment.
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The Marlin portfolio continued to produce positive results in the six months to 31 December 2014, with the portfolio value up 2.4% after adjusting for 3.65 cents per share dividends paid. Over the same period, the MSCI World Small Cap Index was down in US dollar terms but up 7.7% in New Zealand dollars, due to a weakening New Zealand dollar compared to the US dollar.
The six months saw divergent results among global markets and concerns about global growth caused investors to favour higher yielding, blue chip stocks in developed markets, especially the US. The Board is pleased that the Marlin management team has continued to focus on companies with sustainable competitive advantages, strong fundamentals and extensive growth prospects as international markets deal with economic uncertainties.
First Half Result (six months ended 31 December 2014)For the six months ended 31 December 2014, Marlin’s net profit was $2.5m, more modest than the corresponding six month period’s record first half net profit of $12.2m.
The portfolio fell in value slightly ($0.6m) in local currency terms, though it fell by less than the index. However, currency gains from a falling New Zealand dollar, which weakened against most of the portfolio’s major currencies in the period, added significantly ($4.5m) to income.
Total shareholder return (TSR)*, which includes the change in the share price plus dividends paid per share, was 4.6% for the six months.
12 Month Result (12 months ended 31 December 2014)Marlin’s net profit of $1.4m for the 12 months ended 31 December 2014 follows a very strong net profit of $21.5m achieved in the corresponding 12 month period last year following a broad based recovery in world economies.
For the 12 months ended 31 December 2014, adjusted net asset value (NAV)* increased 1.2% and TSR* increased 12.3% as the share price discount to NAV narrowed from 15.7% to 7.6% over the period. The MSCI World Small Cap Index was up 7.3% during the same period.
DIRECTORS' OVERVIEWMarlin continues to grow despite global volatility.
Alistair Ryan,Chairman.
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4 DIRECTORS' OVERVIEW CONTINUED
Five-Year SummaryFigure 1 (on page 6) summarises the five-year performance history for the six month periods ended 31 December 2010-2014. The summary shows adjusted NAV has increased each year from 2011, and TSR has been positive in four out of the five years.
Share Price and Dividends (TSR*)Marlin’s share price closed at $0.83 on 31 December 2014 (30 June 2014: $0.83). Over the six month period the share price has fluctuated between $0.80 and $0.85. Since interim end, the share price has increased, closing at $0.85 at the end of February 2015.
In accordance with Marlin’s current distribution policy (2.0% of average NAV per quarter), the company paid 3.65 cents per share in dividends over the six month period (September and December dividends). The next dividend will be 1.82 cents per share to be paid on 27 March 2015 with a record date of 13 March 2015.
Since InceptionSince inception in November 2007, Marlin’s adjusted NAV* is up 34.9%, slightly behind the MSCI World Small Cap Index which is up 37.1%.
A total of 36 cents per share has been paid out to shareholders in dividends since inception, which has resulted in a positive TSR* of 31.5% since listing.
Figure 2 (on page 7) tracks the Marlin share price, dividends paid and TSR* since inception.
Revenue and ExpensesThe key components of the first half result were gains on financial assets of $3.8m (including currency gains of $4.5m), dividend and interest income of $0.4m, less operating expenses and tax of $1.7m.
Operating expenses were $1.3m lower than the corresponding period due to Marlin not accruing a performance fee for the six months to 31 December 2014. A performance fee is paid for outperformance, above the Bank Bill Index plus 5% and above the High Water Mark (the highest NAV at the end of the previous financial year in which a performance fee was paid).
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ConclusionThe Board is pleased with the first half result for the 2015 financial year which builds on the record full year result in 2014. The Board continues to have confidence in the Manager’s ability to hand pick high quality companies and believes Marlin’s diversified portfolio is well placed to continue to benefit from future growth.
Further details of the Marlin portfolio are discussed in the Manager’s Report.
On behalf of the Board,
Alistair RyanChairmanMarlin Global Limited16 March 2015
*Adjusted NAV and Total Shareholder Return assume all dividends are reinvested, but exclude imputation credits.
Adjusted Net Asset Value
The adjusted NAV is calculated using NAVs as released to the NZX (audited at the end of each �nancial year) and adds back dividends paid to shareholders.
The adjusted NAV metric is unaudited but has been reviewed by an independent actuary.
The directors believe this metric to be useful as it re�ects the underlying performance of the investment portfolio adjusted for dividends.
Total Shareholder Return
TSR is calculated using the share price performance plus dividends paid to shareholders.
The TSR metric is unaudited but has been reviewed by an independent actuary.
The directors believe this metric to be useful as it mirrors the return of an investor who reinvests their dividends. No metric has been included for investors who take their dividend in cash as the return on those cash dividends will differ per shareholder.
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FIGURE 1: FIVE YEAR PERFORMANCE SUMMARY
NB: All figures are unaudited. NAV and Adjusted NAV are net of fees and tax, and include the dilution effect of warrants exercised.
1 Reviewed by an independent actuary.
2 The annual performance benchmark rate is the change in the NZ 90 Day Bank Bill Index plus 5%. For the purposes of this five year performance summary, the premium has been calculated at half the annual rate (2.5%) for the interim periods.
As at 31 December 2014 2013 2012 2011 2010
NAV $0.90 $0.96 $0.83 $0.84 $1.08
Adjusted NAV1 $1.31 $1.30 $1.04 $0.97 $1.15
Share Price $0.83 $0.81 $0.67 $0.72 $0.97
Share Price Discount to NAV1 7.6% 15.7% 19.2% 14.6% 10.5%
Six month period ended 31 December 2014 2013 2012 2011 2010
Total Shareholder Return1 4.6% 19.7% 0.9% (20.0%) 22.3%
Adjusted NAV Return1 2.4% 13.1% 0.0% (17.0%) 4.6%
MSCI World Small Cap Index1 (includes dividends, in NZ dollar terms) 7.7% 12.9% 6.9% (8.1%) 15.0%
NZ 90 Day Bank Bill Index +2.5% (half the performance fee premium)1,2
4.4% 3.8% 3.8% 3.9% 4.1%
Dividends paid in six months 3.65cps 3.58cps 3.47cps 3.89cps 4.16cps
Earnings per Share 2.32cps 11.47cps 0.16cps (17.65cps) 5.28cps
DIRECTORS' OVERVIEW CONTINUED
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N Dividends Share Price Total Shareholder Return
$0.025
$0.020
$0.015
$0.010
$0.005
$0.000Dec 2007
Jun 2008
Dec2008
Jun2009
Dec2009
Jun 2010
Dec2010
Jun2011
Dec2011
Jun2012
Dec2012
Dec2013
Dec2014
Jun2013
Jun2014
$1.40$1.30$1.20$1.10$1.00$0.90$0.80$0.70$0.60$0.50$0.40
FIGURE 2: TOTAL SHAREHOLDER RETURN The below Total Shareholder Return graph assumes all dividends are reinvested, but excludes imputation credits:
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*Adjusted NAV assumes all dividends are reinvested, but excludes imputation credits.
The global economy is still not performing to its full potential. The US is currently the engine of global growth and Chinese growth remains impressive by global standards, although it is slowing. However, both Europe and Japan are struggling to grow and there are concerns as to how successful aggressive monetary policy will be in breathing life back into their economies. Additionally, uncertainty arises from the significant currency movements that have occurred which are having an important impact on corporate earnings, particularly for those companies that generate a significant proportion of their earnings and revenues from international sources. As a consequence, many US companies that generate revenue overseas are seeing their earnings forecasts being downgraded, while the opposite is true for European and to a lesser extent Japanese companies.
The MSCI World Small Cap Index fell over this period in US dollar terms. However, a weak NZ dollar meant that the return in NZ dollar terms was up 7.7%. Marlin participated in this rally, but to a lesser degree with Marlin’s adjusted NAV* up 2.4% in NZ dollars terms. The underperformance relative to the MSCI Index was due to a large underweight in the outperforming US market and also due to the significant underperformance of two stocks in the portfolio – Brazilian construction services company Mills Estruturas e Servicos and smartphone game developer Gameloft (which are discussed in more detail later in the report). Strong positive contributors to portfolio returns included Chinese smart meter supplier Wasion Group which continues to benefit from China’s drive for energy efficiency through the nationwide instalment of advanced digital smart meters for its electricity. The company is now involved in the rollout of second generation meters as well as advanced systems which can manage the flow of electricity within a city. Diagnostics systems manufacturer Stratec Biomedical also made a strong contribution as the company put recent earnings disappointments (due to a lost contract) and flooding problems behind them, and are now returning to a healthy growth path.
Portfolio UpdateMost stocks in the portfolio continue to deliver both solid operational performance and growth, supported by sustainable moats and sound execution of their business strategies.
MANAGER'S REPORTVolatility in global equity markets increased in the first half of the 2015 financial year as investors struggled with a number of uncertainties relating to global growth, as well as interest rate and currency movements and their impact on corporate earnings.
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*Adjusted NAV assumes all dividends are reinvested, but excludes imputation credits.Carmel Fisher,
Managing Director.
In Europe, payments processor Wirecard continues to build an envious track record of growth as online retail transactions continue to increase and they continue to build out a global network. Wirecard has a scalable model which means its revenues and earnings are highly geared to increasing online payments and market share gains. Icon is a contract research organisation that carries out clinical research for pharmaceutical companies. They continue to benefit from strong outsourcing trends by the pharmaceutical companies seeking to reduce the time it takes for new drugs to be available on market. Furthermore, Icon is broadening their client base with around half of their new business now coming from biotech and smaller pharmaceutical companies. This helps reduce the reliance on their top five clients. German internet service provider United Internet delivered a strong set of third quarter results and earnings growth is expected to be in excess of 50% for FY2014. United Internet is benefitting from continued growth in broadband and mobile internet usage in Germany, offering highly competitive packages to their client base. Zodiac manufactures cabin interiors and safety equipment for aircrafts. They continue to benefit from strong aircraft build-out programmes by Boeing and Airbus, driven by aircraft demand from most airlines in response to increasing travel and a desire for greater fuel efficiency. Furthermore, Zodiac is a major beneficiary of a weaker Euro as almost all of its revenues are in US dollars. Dental equipment provider Sirona Dental Systems continues to expand its global infrastructure while their computer assisted design technology is gaining traction with dentists, helped by dentistry schools going ‘digital only’. Sirona is at the cutting edge of technology development in dentistry equipment with the biennial International Dentistry Show being an important launch pad for new innovative products. The next show is in Cologne in March and we are expecting Sirona to reveal the next generation of imaging product.
We believe there will be a positive bias in global equity markets this year as companies continue to deliver positive earnings growth.
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10 MANAGER'S REPORT CONTINUED
In the US, eBay recovered well in the second half of 2014 following earlier challenges arising from a security breach which required some users to reset their passwords in order to regain access to their platform. PayPal continues to be the company’s key driver of growth, due to strong growth in ecommerce. This is a wide moat company, and despite competitive risks from ApplePay and GoogleWallet, PayPal continues to benefit from early mover advantage and sound industry growth tailwinds. Plantronics is the market leader in audio communication headsets for businesses, with over 60% market share. Plantronics is levered to the implementation of unified communications (UC) systems by multinational companies, which are increasingly rolling out products like Microsoft Lync that allow employees to message, host conference calls, and share and edit documents collaboratively with multiple users in real-time. An important part of this trend is high quality audio headsets, where Plantronics is the market leader. Plantronics’ recent results have reinforced our positive view on UC systems, which are growing at 20-30% per annum. Current UC system penetration globally is around 5%, and given the strong value proposition, we believe there is a very long growth runway for Plantronics. Oncology systems provider Varian Medical Systems continues to deliver sound operational performance and has been gaining market share in a number of different markets. Varian is the market leader in systems for treating cancer through radiotherapy, an area which continues to grow strongly on the back of technological improvements (which Varian is driving), increasing demand for quality healthcare in emerging markets, and integration of software and services into oncology systems. Varian has an excellent track record and is proving to be a reliable compound growth story with strong cash flow which they return to shareholders.
On the negative side, there were two stocks that made a disproportionately negative impact on returns. Mills Estruturas e Servicos is a construction services company headquartered in Sao Paolo, Brazil. Their core business is to rent out construction equipment to companies in the construction business. It is the largest player in the Brazilian market, has strong client relationships and provides equipment specifically designed to meet the needs of its client base – large local and international construction companies. Their long-term growth outlook is attractive as Brazil has massively under spent on infrastructure. Furthermore, the value proposition of renting versus buying remains strong for the construction sector as it replaces a large capital expenditure (buying equipment) with a smaller operating expenditure (hiring equipment). Prior to 2014, Mills had a strong track record of growth with four year revenue growth of 25% per annum, very attractive returns, together with a reputation of sound execution and reliability. However, Mills derated dramatically in 2014. Initial concerns over a slowdown in activity, especially in the real estate division were compounded by an unexpected slowdown in their rental and heavy construction divisions during the soccer world cup then subsequently during the presidential elections. As investors were attempting to price this temporary slowdown in growth
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(which amounted to contract delays as opposed to cancellations), there was a corruption scandal involving Brazilian oil company Petrobras and large construction firms (some of which are Mills clients – but not Mills itself). This event raised questions over the timing of any construction recovery as it remains unclear what checks and balances will be put in place to ensure more transparency in the tender process and less room for corrupt practices. The speed and extent of the derating of Mills is not supported by their long-term fundamentals in our view, although Mills high operating leverage is evident in a weaker demand environment. Earnings and profitability have been hit hard. The near term outlook remains relatively bleak, with industry overcapacity expected to persist for the next quarter at least and pressure on rental prices to continue. Longer term nothing changes, the outlook remains very attractive. Furthermore, Mills is in a strong position to weather the storm in the near term, has made sound moves to reduce costs and improve cash-flow and continues to run near record backlogs in their heavy construction division.
Smartphone game developer Gameloft struggled in 2014 as it looked to better manage its way through a rapidly changing marketplace. Their strategy focused on producing fewer games but with more features and a longer game life in the belief that games with more user engagement and social features with continuous updates would be easier to monetise. However, the transition to this new model has not been without issues. This aim to improve the overall user experience has resulted in game release delays thereby challenging their 2014 revenue and earnings growth. However, this is just a timing issue and we expect a significant acceleration in game launches in 2015 with more attractive features and believe the share price reflects excessive pessimism in the outlook for the company.
Roger Garrett,Senior Portfolio Manager.
Any volatility will provide opportunities to further deliver a portfolio of high quality growth companies with sustainable economic moats and we will look to opportunistically add companies that we believe will generate higher earnings on a three to five year time frame.
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Portfolio ActivityWe remain focused on delivering a portfolio of high quality companies with sustainable competitive advantages that generate strong cash flows and are not at excessive valuations. During the second half of 2014 we looked to further deliver on this strategy with four new additions.
We initiated a position in Blackhawk. This is a unique company that was separately listed by US listed grocery chain Safeway in April 2014. Blackhawk is the leading prepaid gift card network in the US (think iTunes $50 gift cards that you would buy as a Christmas gift), with a monopoly in the US supermarket distribution channel. Blackhawk’s network and IT platform allows for the purchase and activation of gift cards at distributors, for use at content providers (e.g. Nike), and the activation and use of gift cards at the content provider’s retail stores. Blackhawk is a wide moat company, with a dominant position in its distribution channels reinforced by a strong added value for all stakeholders (distributors, content providers and customers). We expect double digit revenue and earnings per share growth over the medium term (management guide to 20% per annum) with the potential for rapid international growth given lower current usage of gift cards in international markets. Blackhawk is highly profitable and has a good track record of delivery.
We also bought into Expedia, one of the pioneering online travel agents with a solid track record of creating value for shareholders. The way we research and book travel has changed materially over time, with greater use of search engines, Tripadvisor, and new platforms like Kayak.com and Trivago.com. However, Expedia has continued to be a critical part of the online booking process. They have a robust moat given their integration with a huge network of hotels, advertising power, and a portfolio of strong brands such as Expedia.com, Wotif.com, Hotels.com & Trivago.com. Expedia also benefits from solid travel industry growth of 6% per annum globally and the ongoing move to online booking (still only around 30% of travel is currently booked online). They also command the #1 market position in the US and #2 position in Europe behind Priceline’s Booking.com.
We bought a position in LKQ, the largest distributor of replacement parts and components needed to repair cars and trucks in the US and Europe. LKQ distributes a variety of aftermarket, recycled and refurbished parts to collision and mechanical repair shops (these parts include wheels, bumper covers, panels, lights, remanufactured engines, etc.). The value proposition is strong as these alternative parts cost 20%-50% less than new parts and have been growing in popularity with auto repair shops and insurers. LKQ is the only nationwide distributor of these parts in the US. The company has a strong growth track record driven by the increasing use of refurbished parts and the market share gains at the expense of smaller players
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in the industry. They have also been busy acquirers with an aim to build their US network, increase scale (which allows for considerable cost savings) and improve profit growth. We expect this strategy to continue, augmented by their increasing footprint in Europe and Australia. We believe LKQ can grow strongly over the next few years with minimum impact from the economic cycle.
Finally we initiated a position in adidas, a company that requires little introduction as the largest manufacturer of sportswear and sporting equipment in Europe, and sponsor of our very own All Blacks. The company’s core brands include Adidas, Reebok and TaylorMade. Adidas is a global brand and well managed company with good underlying growth. However, the share price has plummeted (down 37% in 2014) due to a perfect storm of factors which are largely outside of management’s control. Weak Russian sales, significant price discounting in golfing equipment (arising from industry overstocking) and until recently a strong Euro, provide a near term headwind for corporate earnings. Adidas has underlying business strengths and we believe the current share price gives us an opportunity to buy a great company going through a difficult period.
As part of the process to improve the overall quality of the portfolio we exited the following stocks.
We sold our position in natural cosmetics company L’Occitane as we became increasingly concerned over the intensifying competitive landscape, especially in the Chinese market but also in other key markets where the large cosmetic companies (L’Oreal) with significantly larger advertising budgets are becoming more prominent and aggressive. Furthermore, L’Occitane has been struggling to effectively execute their strategy with product mistakes in Asia and underinvestment in the US that are not quick fix problems.
We sold winter tyre manufacturer Nokian Tyres due to the huge uncertainties arising from the deteriorating situation in their important Russian market, and intensifying competition in the winter tyre market as more producers target this lucrative market segment. The sale of De La Rue came after a profit warning which confirmed the overcapacity situation in the banknote substrate industry would persist for some time, but also that two of their other divisions were underperforming. De La Rue is in an industry with extremely high barriers to entry but growth visibility has always been an issue due to the nature of their business – making money (literally). Consequently, management guidance becomes an important factor when assessing growth prospects. However, with De La Rue issuing three profit warnings in the last two years, our confidence in management has declined significantly and we felt it prudent to exit the stock.
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14 MANAGER'S REPORT CONTINUED
We also exited Hyflux, a water treatment company. Conceptually this is a strong idea given expected water shortage challenges facing many economies in the future. However, despite sound long-term demand (large pipeline of potential projects), competition for desalination and water treatment projects by Chinese operators has intensified and Hyflux lacks the financial strength to give us confidence that it would benefit from an increase in demand.
Portfolio OutlookWe expect that global equities will remain relatively volatile in 2015 as investors assess the pace of transition of key economies to higher and lower growth rates. For instance, in Europe and Japan, monetary policy is targeted at achieving higher economic growth rates but views vary widely over the effectiveness of this policy while in the US, expected interest rate increases could challenge equity investors' views on this market.
However we believe there will be a positive bias in global equity markets this year as companies continue to deliver positive earnings growth. Furthermore, we believe any volatility will provide opportunities to further deliver a portfolio of high quality growth companies with sustainable economic moats and we will look to opportunistically add companies that we believe will generate higher earnings on a three to five year time frame.
Carmel FisherManaging DirectorFisher Funds Management Limited 16 March 2015
Roger GarrettSenior Portfolio ManagerFisher Funds Management Limited 16 March 2015
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Portfolio Holding Summary as at 31 December 2014Location Company % Holding
Brazil Mills Estruturas e Servicos 1.0%China China Automation Group 0.1% Wasion Group 3.0%Denmark Coloplast 3.3%France Gameloft 1.3% Zodiac 3.4%Germany adidas 0.7% Biotest 4.9% Stratec Biomedical 3.2% Tom Tailor 2.0% United Internet 2.5% Volkswagen 2.5% Wirecard 5.1%Ireland Icon 2.7%Israel Sarine Technologies 3.7%Italy Brembo 4.1%Japan Horiba 2.7% Park 24 1.8% Prestige International 1.8%Mexico Genomma Lab 1.7%United Kingdom IMI 2.3%United States Blackhawk 2.6% eBay 4.8% Expedia 2.1% Google 4.1% Hanger Orthopedic Group 2.6% Harley Davidson 2.8% Hibbett Sports 1.8% LKQ 1.2% Plantronics 3.2% Sirona Dental Systems 3.5% UFP Technologies 2.9% United Parcel Service 3.7% Varian Medical Systems 4.2% Equity Total 93.3% Total foreign cash 5.6% New Zealand dollar cash 0.5% Cash Total 6.1% Forward foreign exchange contracts 0.6% TOTAL 100.0%
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Independent Auditor’s Report Barramundi Limited Opinion In our opinion, the financial statements on pages 26 to 44:
(i) comply with generally accepted accounting practice in New Zealand;
(ii) comply with International Financial Reporting Standards; and
(iii) give a true and fair view of the financial position of the Company as at 30 June 2012, and its financial performance and cash flows for the year then ended.
Report on Other Legal and Regulatory Requirements We also report in accordance with Sections 16(1)(d) and 16(1)(e) of the Financial Reporting Act 1993. In relation to our audit of the financial statements for the year ended 30 June 2012:
(i) we have obtained all the information and explanations that we have required; and
(ii) in our opinion, proper accounting records have been kept by the Company as far as appears from an examination of those records.
Restriction on Distribution or Use This report is made solely to the Company’s shareholders, as a body, in accordance with Section 205(1) of the Companies Act 1993. Our audit work has been undertaken so that we might state to the Company’s shareholders those matters which we are required to state to them in an auditors’ 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.
Chartered Accountants Auckland 28 August 2012
PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland 1142, New Zealand T: +64 (9) 355 8000, F: +64 (9) 355 8001, www.pwc.com/nz
Independent Auditor’s Report to the shareholders of Barramundi Limited Report on the Financial Statements We have audited the financial statements of Barramundi Limited on pages 2 to 18, which comprise the statement of financial position as at 30 June 2013, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, and the notes to the financial statements that include a summary of significant accounting policies and other explanatory information. Directors’ Responsibility for the Financial Statements The Directors are responsible for the preparation of these financial statements in accordance with generally accepted accounting practice in New Zealand and that give a true and fair view of the matters to which they relate and for such internal controls as the Directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing (New Zealand) and International Standards on Auditing. These standards require that we comply with relevant ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal controls relevant to the Company’s preparation of financial statements that give a true and fair view of the matters to which they relate, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. We have no relationship with, or interests in, Barramundi Limited other than in our capacities as auditor and provider of other assurance services. These services have not impaired our independence as auditor of the Company. Opinion In our opinion, the financial statements on pages 2 to 18:
(i) comply with generally accepted accounting practice in New Zealand; (ii) comply with International Financial Reporting Standards; and (iii) give a true and fair view of the financial position of the Company as at 30 June 2013, and its financial
performance and cash flows for the year then ended. Report on Other Legal and Regulatory Requirements We also report in accordance with Sections 16(1)(d) and 16(1)(e) of the Financial Reporting Act 1993. In relation to our audit of the financial statements for the year ended 30 June 2013:
(i) we have obtained all the information and explanations that we have required; and (ii) in our opinion, proper accounting records have been kept by the Company as far as appears from an
examination of those records.
Restriction on Distribution or Use This report is made solely to the Company’s shareholders, as a body, in accordance with Section 205(1) of the Companies Act 1993. Our audit work has been undertaken so that we might state to the Company’s shareholders 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.
Chartered Accountants Auckland 15 August 2013
PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland 1142, New Zealand T: +64 (9) 355 8000, F: +64 (9) 355 8001, www.pwc.com/nz
Independent Review Report to the shareholders of Marlin Global Limited Report on the Interim Financial Statements We have reviewed the accompanying financial statements of Marlin Global Limited (the “Company”) on pages 1 to 10, which comprise the statement of financial position as at 31 December 2014, and the statement of comprehensive income, the statement of changes in equity and the statement of cash flows for the period ended on that date, and a summary of significant accounting policies and selected explanatory notes. Directors’ Responsibility for the Financial Statements The Directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with New Zealand Equivalent to International Accounting Standard 34 Interim Financial Reporting (“NZ IAS 34”) and for such internal controls as the Directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Our Responsibility Our responsibility is to express a conclusion on the accompanying financial statements based on our review. We conducted our review in accordance with the New Zealand Standard on Review Engagements 2410 Review of Financial Statements Performed by the Independent Auditor of the Entity (“NZ SRE 2410”). NZ SRE 2410 requires us to conclude whether anything has come to our attention that causes us to believe that the financial statements, taken as a whole, are not prepared in all material respects, in accordance with NZ IAS 34. As the auditor of the Company, NZ SRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial statements. A review of financial statements in accordance with NZ SRE 2410 is a limited assurance engagement. The auditor performs procedures, primarily consisting of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International Standards on Auditing (New Zealand). Accordingly we do not express an audit opinion on these financial statements. Other than in our capacity as auditor and providers of other assurance and non-assurance services, we have no relationship with, or interests in the Company. Appropriate safeguards were applied to reduce the threats to independence from the provision of other services to an acceptable level. The provision of these other services has not impaired our independence as auditor of the Company. Conclusion Based on our review, nothing has come to our attention that causes us to believe that these financial statements of the Company are not prepared, in all material respects, in accordance with NZ IAS 34. Restriction on Use of Our Report This report is made solely to the Company’s shareholders, as a body. Our review work has been undertaken so that we might state to the shareholders those matters which we are required to state to them in our review 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 review procedures, for this report, or for the conclusion we have formed. Chartered Accountants Auckland 26 February 2015
Report on the Interim Financial Statements We have reviewed the accompanying financial statements of Marlin Global Limited (the “company”) on pages 17 to 32, which comprise the statement of financial position as at 31 December 2014, and the statement of comprehensive income, the statement of changes in equity and the statement of cash flows for the period ended on that date, and a summary of significant accounting policies and selected explanatory notes.
Directors’ Responsibility for the Financial Statements The directors of the company are responsible for the preparation and fair presentation of these financial statements in accordance with New Zealand Equivalent to International Accounting Standard 34 Interim Financial Reporting (“NZ IAS 34”) and for such internal controls as the directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Our Responsibility Our responsibility is to express a conclusion on the accompanying financial statements based on our review. We conducted our review in accordance with the New Zealand Standard on Review Engagements 2410 Review of Financial Statements Performed by the Independent Auditor of the Entity (“NZ SRE 2410”). NZ SRE 2410 requires us to conclude whether anything has come to our attention that causes us to believe that the financial statements, taken as a whole, are not prepared in all material respects, in accordance with NZ IAS 34. As the auditor of the company, NZ SRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial statements.
A review of financial statements in accordance with NZ SRE 2410 is a limited assurance engagement. The auditor performs procedures, primarily consisting of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International Standards on Auditing (New Zealand). Accordingly we do not express an audit opinion on these financial statements.
Other than in our capacity as auditor and providers of other assurance and non-assurance services, we have no relationship with, or interests in the company. Appropriate safeguards were applied to reduce the threats to independence from the provision of other services to an acceptable level. The provision of these other services has not impaired our independence as auditor of the company.
Conclusion Based on our review, nothing has come to our attention that causes us to believe that these financial statements of the company are not prepared, in all material respects, in accordance with NZ IAS 34.
Restriction on Use of Our ReportThis report is made solely to the company’s shareholders, as a body. Our review work has been undertaken so that we might state to the shareholders those matters which we are required to state to them in our review 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 review procedures, for this report, or for the conclusion we have formed.
Chartered Accountants Auckland 26 February 2015
Independent Review Report to the shareholders of Marlin Global Limited
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The Notes to the Interim Financial Statements set out on pages 21 to 32 should be read in conjunction with this Statement of Comprehensive Income.
FOR THE SIX MONTHS ENDED 31 DECEMBER 2014
MARLIN GLOBAL LIMITED
Interest income 26 14 Dividend income 377 423 Other income/(losses) 1(i) 315 (571)Net changes in fair value of financial assets 1(ii) 3,504 14,708
Total net income 4,222 14,574 Operating expenses 1(iii) (1,152) (2,422)
Operating profit before tax 3,070 12,152
Total tax (expense)/refund 3 (572) 45
Net operating profit after tax attributable to shareholders 2,498 12,197
Other comprehensive income 0 0
Total comprehensive income after tax attributable to shareholders 2,498 12,197
Earnings per share Basic and diluted earnings per share Profit attributable to owners of the company ($000) 2,498 12,197 Weighted average number of ordinary shares on issue net of treasury stock ('000) 107,600 106,329
2.32c 11.47c
6 months 6 months ended ended 31/12/14 31/12/13 Notes unaudited unaudited
$000 $000
STATEMENT OF COMPREHENSIVE INCOME
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The Notes to the Interim Financial Statements set out on pages 21 to 32 should be read in conjunction with this Statement of Changes in Equity.
STATEMENT OF CHANGES IN EQUITYFOR THE SIX MONTHS ENDED 31 DECEMBER 2014
MARLIN GLOBAL LIMITED
Balance at 1 July 2013 (audited) 103,014 (8,749) 94,265
Comprehensive income Profit for the period 0 12,197 12,197 Other comprehensive income 0 0 0
Total comprehensive income for the period ended 31 December 2013 0 12,197 12,197
Transactions with owners Share buybacks (1,578) 0 (1,578)Dividends paid 0 (3,794) (3,794)Dividends reinvested 1,549 0 1,549
Total transactions with owners for the period ended 31 December 2013 (29) (3,794) (3,823)
Balance at 31 December 2013 (unaudited) 102,985 (346) 102,639
Balance at 1 July 2014 (audited) 103,385 (5,433) 97,952
Comprehensive income Profit for the period 0 2,498 2,498 Other comprehensive income 0 0 0
Total comprehensive income for the period ended 31 December 2014 0 2,498 2,498
Transactions with owners Share buybacks 2 (573) 0 (573)Dividends paid 0 (3,919) (3,919)Dividends reinvested 2 1,637 0 1,637
Total transactions with owners for the period ended 31 December 2014 1,064 (3,919) (2,855)
Balance at 31 December 2014 (unaudited) 104,449 (6,854) 97,595
Share Accumulated Total Notes Capital De�cits Equity
$000 $000 $000
Attributable to shareholders of the company
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The Notes to the Interim Financial Statements set out on pages 21 to 32 should be read in conjunction with this Statement of Financial Position.
STATEMENT OF CHANGES IN EQUITY
AS AT 31 DECEMBER 2014
MARLIN GLOBAL LIMITED
ASSETS Current Assets Cash and cash equivalents 5,982 9,819 Trade and other receivables 119 53 Financial assets at fair value through profit or loss 4 91,863 89,029 Current tax receivable 0 97
Total Current Assets 97,964 98,998
TOTAL ASSETS 97,964 98,998
LIABILITIES Current Liabilities Trade and other payables 203 1,046 Current tax payable 166 0
Total Current Liabilities 369 1,046
TOTAL LIABILITIES 369 1,046
EQUITY Share capital 2 104,449 103,385 Accumulated deficits (6,854) (5,433)
TOTAL EQUITY 97,595 97,952
TOTAL EQUITY AND LIABILITIES 97,964 98,998
These interim financial statements have been authorised for issue for and on behalf of the Board by:
A B Ryan - Chairman C A Campbell - Chair of the Audit and Risk Committee26 February 2015 26 February 2015
31/12/14 30/06/14 Notes unaudited audited
$000 $000
STATEMENT OF FINANCIAL POSITION
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The Notes to the Interim Financial Statements set out on pages 21 to 32 should be read in conjunction with this Statement of Cash Flows.
FOR THE SIX MONTHS ENDED 31 DECEMBER 2014
MARLIN GLOBAL LIMITED
Operating Activities Cash was provided from:
- Sale of investments 11,677 20,101 - Interest received 26 13 - Dividends received 318 378 - Other income 155 0
Cash was applied to:
- Purchase of investments (11,007) (19,318)- Operating expenses (1,985) (1,154)- Taxes paid (309) (205)- Other losses 0 (71)
Net cash outflows from operating activities 5 (1,125) (256)
Financing Activities Cash was applied to:
- Share buybacks (596) (1,579)- Dividends paid (net of dividends reinvested) (2,282) (2,245)
Net cash outflows from financing activities (2,878) (3,824)
Net decrease in cash and cash equivalents held (4,003) (4,080)
Cash and cash equivalents at beginning of the period 9,819 10,909 Effects of foreign currency translation on cash balance 166 (491)
Cash and cash equivalents at end of the period 5,982 6,338
All cash balances comprise short-term cash deposits.
STATEMENT OF CASH FLOWS
6 months 6 months ended ended 31/12/14 31/12/13 Notes unaudited unaudited
$000 $000
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FOR THE SIX MONTHS ENDED 31 DECEMBER 2014
MARLIN GLOBAL LIMITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
General InformationEntity ReportingThe interim financial statements for Marlin Global Limited (“Marlin” or “the company”) have been prepared in accordance with the requirements of the Financial Reporting Act 2013.
Legal Form and Domicile Marlin is incorporated and domiciled in New Zealand.
The company is a limited liability company, incorporated under the Companies Act 1993 on 6 September 2007. The company is listed on the NZX Main Board and became an FMC Reporting Entity under the Financial Markets Conduct Act 2013 on 1 December 2014.
The company is a profit-oriented entity and began operating as a listed investment company on 1 November 2007.
The company’s registered office is Level 1, 67-73 Hurstmere Road, Takapuna, Auckland.
Authorisation of Interim Financial StatementsThe Marlin Board of Directors authorised these interim financial statements for issue on 26 February 2015.
No party may change these interim financial statements after their issue.
Accounting PoliciesPeriod Covered by Interim Financial StatementsThese financial statements cover the unaudited results from operations for the six months ended 31 December 2014.
Statement of ComplianceThe interim financial statements have been prepared in accordance with New Zealand Generally Accepted Accounting Practice ("NZ GAAP"), the Financial Reporting Act 2013 and the Financial Markets Conduct Act 2013. They comply with New Zealand equivalent to International Accounting Standard 34 ("NZ IAS 34") Interim Financial Reporting.
The interim financial statements do not include all of the information required for full year financial statements and should be read in conjunction with the company’s annual financial report for the year ended 30 June 2014.
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22NOTES TO THE INTERIM FINANCIAL STATEMENTS CONTINUEDFOR THE SIX MONTHS ENDED 31 DECEMBER 2014
MARLIN GLOBAL LIMITED
The company has applied consistent accounting policies in the preparation of these interim financial statements as for the 2014 full year financial statements.
There are no standards, amendments or interpretations that have been issued but are not yet effective that are expected to impact the company's financial statements.
Critical Judgements, Estimates and Assumptions The preparation of interim financial statements has not required the directors to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.
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NOTE 1 - STATEMENT OF COMPREHENSIVE INCOME
6 months 6 months ended ended 31/12/14 31/12/13 unaudited unaudited
$000 $000
(i) Other Income
Other income 0 50
Foreign exchange gains/(losses) on cash and cash equivalents 315 (621)
Total other income/(losses) 315 (571)
(ii) Net Changes in Fair Value of Financial Assets
Investments designated at fair value through profit or loss
International equity investments (649) 17,277 Foreign exchange gains/(losses) on equity investments 3,624 (3,205)
Total gains 2,975 14,072
Financial assets at fair value through profit or loss - held for trading
Gains on foreign exchange contracts 529 636
Total gains on assets held for trading 529 636
Total net changes in fair value of financial assets 3,504 14,708
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24NOTES TO THE INTERIM FINANCIAL STATEMENTS CONTINUEDFOR THE SIX MONTHS ENDED 31 DECEMBER 2014
MARLIN GLOBAL LIMITED
NOTE 1 - STATEMENT OF COMPREHENSIVE INCOME CONTINUED
6 months 6 months ended ended 31/12/14 31/12/13 unaudited unaudited
$000 $000(iii) Operating Expenses
Management fees (note 6) 710 709
Performance fees (note 6) 0 1,288
Custody and brokerage 121 149
Investor relations and communications (note 6) 72 60
Directors' fees (note 6) 70 70
Corporate management services (note 6) 69 67
NZX fees 31 28
Administration services (note 6) 27 0
Auditor's fees:
Statutory audit and review of financial statements 17 17
Other assurance services 1 1
Non assurance services 5 2
Professional fees 14 17
Other operating expenses 15 14
Total operating expenses 1,152 2,422
Other assurance services relate to a share register audit and non-assurance services relate to annual meeting and performance fee procedures. No other fees were paid to the auditor during the period (2013: nil).
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NOTE 2 - SHARE CAPITAL
6 months Year ended ended 31/12/14 30/06/14 unaudited audited
$000 $000
Ordinary Shares
Opening balance 103,385 103,014
Shares issued from treasury stock under the dividend reinvestment plan 507 2,800
New shares issued under the dividend reinvestment plan 1,130 435
Share buybacks held as treasury stock (573) (2,864)
Closing balance 104,449 103,385
As at 31 December 2014 there were 108,657,614 (30 June 2014: 107,294,066) fully paid Marlin shares on issue, including treasury stock of 95,000 shares (30 June 2014: 35,000 shares).
All ordinary shares are classified as equity, rank equally and have no par value. All shares (with the exception of treasury stock) carry an entitlement to dividends and one vote attached to each fully paid ordinary share. All the shares acquired under the buyback scheme are initially held as treasury stock but are available to be re-issued. There were 697,194 shares bought back during the period (year to 30 June 2014: 3,648,931). The net cost of treasury stock is deducted from share capital.
Total dividends per share for the period ended 31 December 2014 were $0.0365 (2013: $0.0358). Dividends for the period ended 31 December 2014, and prior to any reinvestment totalled $3,919,000 (2013: $3,794,000).
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26NOTES TO THE INTERIM FINANCIAL STATEMENTS CONTINUEDFOR THE SIX MONTHS ENDED 31 DECEMBER 2014
MARLIN GLOBAL LIMITED
NOTE 3 - TAXATION
The company is a listed Portfolio Investment Entity (PIE). The tax payable under the PIE tax regime is dependent on the nature of the underlying investments held by Marlin. Taxable income will differ from the accounting profits or losses reported in the Statement of Comprehensive Income.
The tax rate used is the corporate tax rate of 28% payable by New Zealand corporate entities on taxable income under New Zealand tax law (31 December 2013 and 30 June 2014: 28%).
NOTE 4 - FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS
31/12/14 30/06/14 unaudited audited
$000 $000
Investments at fair value through profit or loss - designated
International listed equity investments 91,310 88,676
Financial assets at fair value through profit or loss - held for trading
Fair value of forward foreign exchange contracts 553 353
Total financial assets at fair value through profit or loss 91,863 89,029
Although investments at fair value through profit or loss are treated as current assets from an accounting point of view, the investment strategy of the company is to hold for the medium to long-term.
Investments at fair value through profit or loss are valued using last sale prices from an active market, with the exception of seven stocks where the last sale prices were outside the bid-ask spread on 31 December 2014 and therefore bid price was used. All investments are classified as Level 1 in the fair value hierarchy.
Forward foreign exchange contracts are valued using observable market prices (as they are not quoted) and they are classified as Level 2 in the fair value hierarchy. The notional value of foreign exchange contracts held at 31 December 2014 was $11,553,340 (30 June 2014: $10,573,253).
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NOTE 5 - RECONCILIATION OF OPERATING PROFIT/(LOSS) AFTER TAX TO NET CASH FLOWS FROM OPERATING ACTIVITIES
6 months 6 months ended ended 31/12/14 31/12/13 unaudited unaudited
$000 $000
Net profit after tax 2,498 12,197
Items not involving cash flows Unrealised foreign currency (gain)/loss on cash and cash equivalents (166) 491
Unrealised gain on investments (4,683) (11,506)
(4,849) (11,015)
Impact of changes in working capital items (Decrease)/increase in fees and other payables (843) 1,212
(Increase)/decrease in interest, dividends and other receivables (66) 336
Increase/(decrease) in current tax payable/(receivable) 263 (250)
(646) 1,298
Items relating to investments Net amount received from investments 670 783 Realised losses/(gains) on investments 1,179 (3,202)Decrease in unsettled purchases of investments 0 66 Decrease in unsettled sales of investments 0 (383)Decrease in share buybacks payable 23 0
1,872 (2,736)
Net cash outflows from operating activities (1,125) (256)
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28NOTES TO THE INTERIM FINANCIAL STATEMENTS CONTINUEDFOR THE SIX MONTHS ENDED 31 DECEMBER 2014
MARLIN GLOBAL LIMITED
NOTE 6 - 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.
The Manager of Marlin is Fisher Funds Management Limited ("Fisher Funds" or "the Manager"). Fisher Funds is a related party by virtue of the Manager's common directorship and a Management Agreement.
The Management Agreement with Fisher Funds provides for the provisional payment of a management fee equal to 1.25% (plus GST) per annum of the gross asset value, calculated weekly and payable monthly in arrears. This management fee is reduced by 0.10% for each 1.0% per annum by which the Gross Return achieved on the portfolio during each financial year is less than the change in the NZ 90 Day Bank Bill Index over the same period but subject to a minimum management fee of 0.75% (plus GST) per annum of the average gross asset value for that period. The annual management fee is finalised at 30 June and any adjustment (where the management fee is less than 1.25%), is offset against future management fee payments due to Fisher Funds. For the period ended 31 December 2014, there was no management fee adjustment required (31 December 2013: nil).
Management fees for the six months ended 31 December 2014 totalled $709,727 (31 December 2013: $709,137). The net amount payable to Fisher Funds at 31 December 2014 was $120,336 (31 December 2013: $118,573).
In addition, a performance fee may be earned by the Manager if portfolio returns exceed the performance fee hurdle of the change in NZ 90 Day Bank Bill Index plus 5% per annum, to the extent the high water mark is also exceeded. Performance fees are calculated weekly and payable annually at the end of each financial year. Therefore the actual amount payable at 30 June may be greater or less than a performance fee accrued at 31 December. No performance fee has been accrued for the six months’ performance to 31 December 2014 (31 December 2013: $1,287,922).
The consideration for any performance fee payable is calculated in accordance with the Management Agreement with Fisher Funds. Full details of the performance fee calculation methodology are included in the Marlin annual report for the year ended 30 June 2014.
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Effective from 1 November 2014, Marlin entered into an Administration Services Agreement with Fisher Funds for the provision of administration services. The nature of the administration services provided by Fisher Funds has not changed from those provided previously and the costs are similar. However, from 1 November 2014 a regular monthly fee is charged where previously there were separate charges for the costs associated with the corporate management team, including salaries and other personnel costs. All future administration services costs will be disclosed as such in note 1(iii) rather than corporate management services.
Included within investor relations and communications are marketing costs incurred by Fisher Funds on behalf of Marlin which amounted to $13,741 for the six months ended 31 December 2014 and were recharged in full to Marlin (31 December 2013: $10,297).
The directors of Marlin are the only key management personnel as defined by NZ IAS 24 Related Party Disclosures and they earn a fee for their services which is disclosed in note 1(iii) under directors’ fees (only independent directors earn a director's fee). The directors did not receive any other benefits which may have necessitated disclosure under NZ IAS 24 (paragraph 16).
NOTE 7 - FINANCIAL RISK MANAGEMENT POLICIES
The company is subject to a number of financial risks which arise as a result of its investment activities, including; market risk (price, interest rate and currency), credit risk and liquidity risk.
The Management Agreement between Marlin and Fisher Funds details permitted investments. Financial instruments currently recognised in the financial statements also comprise cash and short-term deposits, currency hedges, trade and other receivables and trade and other payables.
Capital Risk Management
The company’s objective when managing capital (share capital, reserves and borrowings [if any]) is to prudently manage shareholder capital.
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 make borrowings in the short-term.
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30NOTES TO THE INTERIM FINANCIAL STATEMENTS CONTINUEDFOR THE SIX MONTHS ENDED 31 DECEMBER 2014
MARLIN GLOBAL LIMITED
NOTE 7 - FINANCIAL RISK MANAGEMENT POLICIES CONTINUED
The company was not subject to any externally imposed capital requirements during the period.
In August 2010, the company announced a long-term distribution policy paying out 2% of average net asset value each quarter.
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 monthly 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 countries in which Marlin's market risk exposure is greater than 10% of the portfolio at 31 December 2014 are: United States 40% and Germany 21% (31 December 2013: United States 25% and Germany 23%, 30 June 2014: United States 28% and Germany 20%).
The maximum market risk resulting from financial instruments is determined as their fair value.
Price Risk
The company is exposed to the risk of fluctuations in the underlying value of its listed portfolio companies. At 31 December 2014 there were no companies that individually comprise more than 10% of Marlin's total assets (31 December 2013 and 30 June 2014: nil).
Interest Rate Risk
Surplus cash is held in foreign currency accounts overseas as well as in New Zealand bank accounts. Amounts held are subject to varying rates of interest and therefore the company is exposed to the risk of movements in these interest rates. There is no hedge against the risk of movements in interest rates.
The company may use short-term fixed rate borrowings to fund investment opportunities. There were no borrowings at 31 December 2014.
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Currency Risk
The company holds monetary and non-monetary assets denominated in international currencies. It is therefore exposed to currency risk as the value of international denominated equities and cash held in international currencies will fluctuate with changes in the relative value of the New Zealand dollar compared to the international currencies. The company mitigates against this risk by entering into forward foreign exchange contracts as and when the Manager deems it appropriate. At any time during the period the portfolio may be hedged by an amount deemed appropriate by the Manager.
Credit Risk
In the normal course of its business, the company is exposed to credit risk from transactions with its counterparties.
Other than cash in the bank, there are no significant concentrations of credit risk. The company does not expect non-performance by counterparties, therefore no collateral or security is required.
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 internationally which carry a minimum short-term credit rating of A-1 (Standard and Poor's).
Listed securities are held in trust by an independent trustee company.
The maximum credit risk of financial assets is deemed to be their carrying amount as reported in the Statement of Financial Position.
Liquidity Risk
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. Such liquidity can be augmented as necessary by short-term borrowings from a registered bank to a maximum value of 20% of the gross asset value of the company. No such borrowings have arisen to date.
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32NOTES TO THE INTERIM FINANCIAL STATEMENTS CONTINUEDFOR THE SIX MONTHS ENDED 31 DECEMBER 2014
MARLIN GLOBAL LIMITED
NOTE 8 - NET ASSET VALUE
The unaudited net asset value of Marlin as at 31 December 2014 was $0.90 per share (31 December 2013: $0.96 per share unaudited, 30 June 2014: $0.91 per share audited).
NOTE 9 - SUBSEQUENT EVENTS
At 24 February 2015, the unaudited net asset value of the company was $0.96 per share and the share price was $0.85.
On 26 February 2015, the Board declared a dividend of 1.82 cents per share. The record date for this dividend is 13 March 2015 with a payment date of 27 March 2015.
There were no other events which require adjustment to or disclosure in these interim financial statements.
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Nature of Business The principal activity of Marlin is investment in growing companies based outside New Zealand and Australia.
ManagerFisher Funds Management LimitedLevel 167–73 Hurstmere RoadTakapunaAuckland 0622
DirectorsIndependent DirectorsAlistair Ryan (Chairman)Carol CampbellAndy Coupe
Executive DirectorCarmel Fisher
Corporate ManagerGlenn Ashwell
RegistrarShareholders with enquiries about transactions and changes of address should contact Marlin’s share registrar:
Computershare Investor Services LimitedLevel 2159 Hurstmere RoadTakapunaAuckland 0622Phone: +64 9 488 8777Email: [email protected]
Alternatively, to change your address, update your payment instructions, and to view your investment portfolio including transactions, please visit: www.computershare.co.nz/investorcentre
AuditorPricewaterhouseCoopers New Zealand188 Quay StreetAuckland 1010
SolicitorBell GullyLevel 2148 Shortland StreetAuckland 1010
BankerANZ Banking Group LimitedLevel 9215–229 Lambton QuayWellington 6011
Investor Enquiries Marlin Global LimitedLevel 167–73 Hurstmere RoadTakapunaAuckland 0622Private Bag 93502TakapunaAuckland 0740Phone: +64 9 484 0365Fax: +64 9 489 7139Email: [email protected]
DIRECTORY
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Printed onto advance laser, which is produced from Elemental Chlorine Free (ECF) pulp from virgin wood. This wood is sourced from managed farmed trees in an ISO14001 and ISO9001 (International Quality Management Standard) accredited mill, that generates a portion of their power from tree waste, saving 200 million litres of diesel oil annually.
