 Investment
Philosophy
The investment philosophy of the Company is summarised
by the following broad principles:
- The Company
seeks to buy and hold shares in companies for the
medium to long term.
- The Company's
preference is to invest in companies that have a proven
track record of growing profitability.
- The Company
will construct a diversified portfolio of investments
and will invest on a case-by-case basis. The Company
will usually refrain from taking a majority position
in any company, unless the opportunity is compelling.
- The Company
invests as a long-term investor and sells only on
the basis of a fundamental change in the original
investment case. Such a fundamental change might be
a new and unknown management team, the emergence of
a new competitor, a change in industry dynamics or
a diversification into a new business sector.
- The Company
will focus on absolute returns rather than out-performing
a market index.
Permitted Investments
The Manager is permitted to undertake investments on
behalf of the Company in accordance with the Management
Agreement.
The Manager is permitted to invest in the following
on behalf of the Company:
- Equity Securities
listed on the ASX (as defined in the Management Agreement).
- Equity Securities
in Australian companies listed on other stock exchange.
- Unlisted Australian
equities.
- Underwriting
or sub-underwriting commitments relating to Australian
equities otherwise authorised in the Management Agreement.
- Bank deposits
or other money market securities, in New Zealand dollars
and/or Australian dollars, the maturity of which is
no greater than 30 days from the time of investment.
- Forward currency
exchange contracts denominated in either New Zealand
or Australian dollars. Click
here for full details of the Foreign Exchange
Risk Management Policy by the manager.
- Futures, warrants,
options or other derivative contracts to purchase
any investment or futures, warrants, options or other
derivative contracts to sell any investment which
is a permitted investment. Derivatives may not be
used to introduce leverage into the portfolio.
- Any other
type of security approved by the Company and notified
to the Management in accordance with the Management
Agreement.
Borrowings
The Company will procure a debt facility from a registered
bank to a maximum value of 20% of the Gross Asset Value
of the Company at the time of draw down.
The Manager has the authority to draw on this facility
with the prior written approval of the Board.
The Manager may use the borrowings where it believes
they will enhance the management and/or return of the
portfolio.
Acquisition of Own Shares or Warrants
The Company may acquire its own shares or warrants
or provide financial assistance in connection with the
purchase of its own shares or warrants, with shareholder
approval by ordinary resolution and without shareholder
approval if effected pro-rata to existing holders, or
in certain other limited circumstances. The Company
may also elect to acquire its own shares for distribution
through any dividend reinvestment plan.
Capital Management
The Board will from time to time consider buying shares
or warrants in Barramundi if in the opinion of the Board
the value of the shares and warrants do not appropriately
reflect the underlying asset value. Any decision by
the Board to acquire Barramundi shares or warrants will
also involve consideration of other investment alternatives
and whether any acquisition is in the best interest
of the remaining shareholders.
Dividend Policy
As an investment company investing in growth companies,
Barramundi can be expected to generate greater long-term
value for shareholders through capital growth than through
dividend income. However, the Board recognises the importance
of dividends to many shareholders and announced a new
dividend policy on 21 August 2009.
Under the new long-term distribution policy Barramundi
will pay out to shareholders 2% per quarter of its average
Net Asset Value (NAV). The payments will be made in
March, June, September and December.
To meet the payment, Barramundi will firstly utilise
income from its investments and realised capital gains.
If these are insufficient to cover the targeted payout
Barramundi will then liquidate part of its capital base
and return it to shareholders.
As a Portfolio Investment Entity (PIE), these distributions
will be tax-free to NZ Resident Barramundi shareholders.
Investors in Barramundi Limited should refer to ‘PIE
regime’ under the FAQ’s
section of the website or their financial advisor
for further information.
The Directors intend that imputation credits will be
attached to dividends to the fullest extent possible.
To the extent that the dividend is not imputed, the
dividend should be treated as excluded income for New
Zealand resident investors.
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