AUSTRALIA RRL AU Price (at 7:29, 13 2 GMT) Outperform A$1.29 Valuation A$ - DCF (WACC 9.%, beta 1.5, ERP 5.%, RFR 3.8%) 1.68 12-month target A$ 1.7 12-month TSR % +37.2 Volatility Index High GICS sector Materials ket cap A$m 645 3-day avg turnover A$m 6.6 Number shares on issue m 499.8 Investment fundamentals Year end 3 Jun 214A 2E 216E 217E Revenue m 371.2 434.6 492.7 67.7 EBIT m 8.1 94. 13.7 232. Reported profit m -147.8 64.1 92. 165.3 Adjusted profit m 141.7 64.1 92. 165.3 Gross cashflow m 21.3 125.5 168.9 244.3 CFPS 4.3 25.1 33.8 48.9 CFPS growth % 4.4-37.7 34.6 44.6 PGCFPS x 3.2 5.1 3.8 2.6 PGCFPS rel x.34.54.46.34 EPS adj 28.4 12.8 18.4 33.1 EPS adj growth % -3.9-54.9 43.5 79.8 PER adj x 4.5.1 7. 3.9 PER rel x.26.55.49.3 Total DPS. 3. 11. 19. Total div yield %. 2.3 8.5 14.7 Franking % nmf ROA % 14.1 19.8 23.7 32.9 ROE % 32.9 18.1 21.7 31.9 EV/EBITDA x 4.7 4.2 3.2 2.1 Net debt/equity %.4-5.1-3.3-51. P/BV x 2. 1.7 1.4 1.1 RRL AU vs Small Ordinaries, & rec history Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period. Source: FactSet, Macquarie Research, ch 2 (all figures in AUD unless noted) 13 ch 2 Macquarie Securities (Australia) Limited Strong 1H result Event RRL has reported a strong set of half year financials with NPAT of $47.7m coming in ~12% ahead of our expectation. The company has also released a presentation detailing guidance for the remainder of FY. Impact Record gold sales deliver strong 1H. Record gold sales and a strong A$ gold price delivered revenue of $24.5m in the half, 2% ahead of our expectation. Operating costs were kept under control despite the grade issues at Garden Well, delivering operating EBITDA of $14.4m, in line with our expectation. Other costs were broadly in line with EBIT of $68.8m translating to NPAT of $47.7m, ~12% ahead of our forecast for $42.4m. Debt reduction and restructure. RRL reduced its net debt to $9.2m and subsequent to the half restructured its debt facility into a single bullet payment due on 3 June 217. As expected, no interim dividend was declared but we forecast a 3cps full year dividend. FY guidance provides upside to our forecasts. Rainfall that limited access to high-grade was the key driver of the weak production in February. RRL s detailed production and cost guidance for the 2H provides some upside to our forecasts. We model Moolart Well delivering 98koz at $633/oz C1, in line with guidance but our production and cost forecasts for Garden Well and Rosemont are 2% and 4% below RRL s expectation. That being said, it is worth cautioning that more wet weather is expected in the WA Goldfields over the weekend with the passage of Cyclone Olwyn. Near-term additions to Moolart mine life. Infill drilling of the 87koz Dogbolter deposit, km south of Moolart Well, is nearing completion. This drilling is expected to convert Dogbolter to reserves in 2, which will be added to the mine schedule in 216. Drilling is also being done at MW oxides and Petra with the intention of conversion to reserves and addition to the schedule on a similar timeline. The drill out of Erlistoun is also nearly complete with a target of adding its 23koz reserve to the Garden Well schedule in 216. Earnings and target price revision After incorporating RRL s 1H result we lift our FYE earnings 9%, our forecasts beyond FY are unchanged as is our target price of $1.7/sh. Price catalyst 12-month price target: A$1.7 based on a DCF methodology. Catalyst: The recent operational update would appear to have removed the ch quarterly production result as a catalyst. We believe there is potential for a positive surprise should the apparent recovery continue in ch. Action and recommendation Maintain Outperform. We recently upgraded RRL to Outperform after what we saw as over selling post the recently issued operational update. Whilst grade issues persist at Garden Well, we are confident in the company s ability to manage its assets and maintain our view. Please refer to page 6 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures.
1H financial result analysis Record gold sales deliver strong half yearly result Record gold sales of 168,68oz at an average sale price of $1,426/oz delivered revenue of $24.5m in the half, 2% ahead of our expectation. Operating costs were kept under control despite the grade issues at Garden Well, delivering operating EBITDA of $14.4m in line with our expectation. Other costs were broadly in line with expectation with EBIT of $68.8m translating to NPAT of $47.7m ~12% ahead of our forecast $42.4m. Fig 1 RRL 1H Earnings summary Macq Actual Variance Total Revenue A$m 236.2 241.3 2% Operating Costs A$m 138.9 14.4 1% Operational EBITDA A$m 97.4.9 4% EBITDA A$m 93.2 94.3 1% D&A A$m 31.2 24.1-23% Reported NPAT A$m 42.4 47.7 12% Cash flow also in line Operating cash flow of $61.3m was slightly weaker than we expected but free cash flow of $23.8m was in line thanks to a lower capital spend of $37m. Fig 2 RRL 1H Cash flow summary Macq Actual Variance Net Operating cash flow A$m 69. 61.3-11% Capex A$m 45.2 37.5-17% Free cash flow A$m 23.8 23.8 % Debt reduction and restructure, leaving the door open for a return to dividends RRL s repaid $2m of its corporate debt facility, bringing net debt down to $9.2m. Subsequent to the half the company restructured its debt facility into a single bullet payment due on 3 June 217. As expected, RRL will not pay an interim dividend however the restructure of the debt has been designed to allow RRL to return to dividends. We forecast a 3cps full year dividend. Changes to our forecasts and target price After incorporating RRL s 1H result, we lift our FY earnings forecast 9% to $64m. Our forecasts beyond FY are essentially unchanged as is our target price of $1.7/sh. Fig 3 Earnings changes YE June FYe FY16e FY17e FY18e NPV Net profit (A$m) - old 58.9 92.3 165.7 23.9 842 Net profit (A$m) - new 64.1 92. 165.3 23.4 838 Change 9% % % % % 13 ch 2 2
12 Dec 12 13 Jun 13 13 Dec 13 14 Jun 14 14 Dec 14 Jun Dec 16 Jun 16 16 Dec 16 17 Jun 17 17 Dec 17 Fig 4 Moolart Well production and costs Fig 5 Garden Well production and costs 35 6 1,4 3 5 25 2 5 11 11 12 12 13 13 14 14 16 16 17 17 8 6 4 2 4 3 2 8 6 4 2 Moolart Well gold production (koz) Cash costs (A$/oz) Garden Well gold production (koz) Cash costs (A$/oz) Source: RRL, Macquarie Research, ch 2 Source: RRL, Macquarie Research, ch 2 Fig 6 Rosemont production and costs Fig 7 Operating and free cash flow 3 1,6 4. 25 2 5 1,4 8 6 4 2 35. 3. 25. 2... 5.. -5. -. FY11 FY12 FY13 FY14 FYe FY16e FY17e FY18e FY19e FY2e Rosemont gold production (koz) Cash costs (A$/oz) Operating cash flow (A$m) Free cash flow (A$m) Source: RRL, Macquarie Research, ch 2 Source: RRL, Macquarie Research, ch 2 Fig 8 Cumulative cash build Fig 9 RRL valuation breakdown 14 12 Undeveloped Resources 8% Forwards -4% 8 6 4 2-2 Rosemont 16% Moolart Well 19% Garden Well incl Erlistoun 53% Net cash (A$M) ket cap (A$m) Source: RRL, Macquarie Research, ch 2 Source: RRL, Macquarie Research, ch 2 13 ch 2 3
ASX: RRL Price: (A$ps) 1.29 Year end: Jun Rating: Outperform Up/dn TSR Mkt cap: (A$m) 645 Diluted shares (m) 499.8 Target: 1.7 32% 37% ASSUMPTIONS FY11 FY12 FY13 FY14 FYe FY16e FY17e ATTRIBUTABLE MINE OUTPUT FY11 FY12 FY13 FY14 FYe FY16e FY17e Exchange Rate A$/US$ 1.2 1.1 1.1.91.85.77.8 Gold production (equity) Spot Gold (US$/oz) 1,371 1,672 1,64 1,295 1,231 1,314 1,48 Moolart Well (koz) 8.9 5.4 5.7 4.8 97.6 84. 79.7 Garden Well (incl Erlistoun) (koz) - - 163.3 137.2 1.9 134.7 175.8 RATIO ANALYSIS FY11 FY12 FY13 FY14 FYe FY16e FY17e Rosemont (koz) - -. 29.8 95.1 9.6 9.6 Diluted share capital m 44.1 461.9 494.1 499.8 499.7 499.7 499.7 Total (koz) 8.9 5.4 269. 271.8 33.6 39.3 346.1 EPS (diluted and pre sig. items) A 8.4.2 3.2 28.4 12.8 18.4 33.1 Cash costs P/E x.3x 8.5x 4.3x 4.5x.1x 7.x 3.9x Moolart Well (A$/oz) 559 512 552 587 633 726 766 CFPS A 7. 17.4 42.7 24.8 24. 38.1 59.2 Garden Well (incl Erlistoun) (A$/oz) - - 671 959 984 859 77 P/CF x 18.4x 7.4x 3.x 5.2x 5.4x 3.4x 2.2x Rosemont (A$/oz) - - 1,387 848 95 95 DPS A.... 3. 11. 19. Group (A$/oz) 559 512 624 862 829 837 772 Dividend yield %.%.% 11.6%.% 2.3% 8.5% 14.7% AISC Cash Costs Franking Level % % % % % % % % Moolart Well (A$/oz) 627 594 631 694 781 91 952 Book value per share x.32.52 1.9.64.77.93 1. Garden Well (incl Erlistoun) (A$/oz) - - 1,2 1,319 1,263 1,1 921 P/Book value x 4.x 2.5x 1.2x 2.x 1.7x 1.4x 1.1x Rosemont (A$/oz) - - - 1,831 1,89 1,171 1,177 R.O.E. (pre sig items) % 26% 29% 27% 44% 17% 2% 29% Group (A$/oz) 627 594 856 1,134 1,53 1,73 995 R.O.A. (pre sig items) % 19% 23% 3% 17% 19% 21% 29% Operational EBITDA Contribution (pre hedging) Interest Cover x -49x -64x -279x 123x 52x -184x -56x Moolart Well A$m 125 146 9 73 76 73 EBITDA per share A$ps.12.21.49.28.31.42.62 Garden Well (incl Erlistoun) A$m - - 139 55 45 5 174 EV/EBITDA x 11.9x 6.9x 2.4x 4.9x 4.x 2.4x 1.1x Rosemont A$m - - - -1 52 67 72 OPERATIONAL OUTLOOK EARNINGS FY11 FY12 FY13 FY14 FYe FY16e FY17e Moolart Well (koz) Garden Welll (koz) Rosemont (koz) 4 Sales Revenue A$m 8 17 416 371 435 493 68 AISC (A$/oz) Gold (A$/oz) 2, Other Revenue A$m 1 2 4 4 1 35 1,8 Total Revenue A$m 8 172 42 375 435 493 68 1,6 Operating Costs A$m (45) (62) (164) (225) (27) (278) (29) 3 Operational EBITDA A$m 63 111 256 165 214 318 1,4 Exploration Expense/Write-offs A$m (1) (1) (1) () () () () 25 Corporate & Other Costs A$m (8) (12) (11) (11) () (7) (7) EBITDA A$m 55 98 243 139 5 27 311 2 D&A A$m (19) (24) (43) (59) (61) (77) (79) 8 EBIT A$m 36 74 2 8 94 131 232 6 Net Interest A$m 1 1 1 (1) (2) 1 4 Profit Before Tax A$m 36 75 21 79 92 131 236 4 Tax Expense A$m (7) (55) 62 (28) (39) (71) 5 2 Minorities A$m Adjusted NPAT A$m 36 68 146 142 64 92 165 FY11 FY12 FY13 FY14 FYe FY16e FY17e FY18e FY19e FY2e FY21e Significant Items (post tax) A$m (29) Reported NPAT A$m 36 68 146 (148) 64 92 165 RESERVES AND RESOURCES (ATTRIBUTABLE) Reserves Project Mt g/t koz CASHFLOW FY11 FY12 FY13 FY14 FYe FY16e FY17e Moolart Well 8.2.9 246 Net Profit A$m 36 68 146-148 64 92 165 Garden Well 51.8.9 1,551 Interest/Tax/D&A A$m 4 18 7 (17) 81 7 141 Erlistoun 2.7 2.3 23 Working Capital/other A$m () (6) (5) 289 (25) (9) () Rosemont 12.8 1.3 528 Net Operating Cashflow A$m 31 8 211 124 12 191 296 Total 75.5 1.4 2,528 Capex A$m (38) (123) (124) (147) (67) (55) (89) Resources Investments A$m 1 () () () Project Mt g/t koz Sale of PPE and Other A$m Moolart Well 55.3.74 1,313 Free cash flow A$m (7) (41) 87 (23) 53 136 27 Garden Well 88.8.89 2,55 Dividends Paid A$m (75) () (55) Erlistoun 5.3 1.89 322 Debt A$m () (3) 4 (2) (19) Rosemont 3.4 1.33 1,296 Equity Issuance A$m 9 3 3 Satellites 3.3 2.98 316 Other A$m McPhillamys 73.1.94 2,2 Net Financing Cashflow A$m 25 (27) (32) (2) () (74) Total 256.2.97 8,7 Net change in cash A$m 18 (26) 6 (55) 33 121 133 EQUITY DCF VALUATION Macquarie forecasts Spot prices Projects A$m A$ps A$m A$ps BALANCE SHEET FY11 FY12 FY13 FY14 FYe FY16e FY17e Moolart Well 177.35 141.28 Cash A$m 27 1 61 7 39 16 293 Garden Well incl Erlistoun 494.99 54 1.8 PP&E & Mine Development A$m 12 262 348 265 262 24 25 Rosemont 4.31 146.29 Exploration A$m 25 29 25 6 114 123 132 Undeveloped Resources 75. 83.17 Total Assets A$m 191 318 667 467 485 616 794 Unpaid capital.. Debt A$m 3 3 4 2 2 1 Forwards (4) (.8) (42) (.8) Total Liabilities A$m 51 81 127 146 99 3 22 Corporate (27) (.5) (25) (.5) Total Net Assets / Equity A$m 14 238 54 321 386 463 573 Net cash (debt) 5.1 13.3 Net Debt / (Cash) A$m 3 29 (61) 33 (2) (14) (292) Net Equity Value (@ 9% WACC) 838 1.68 855 1.71 Gearing (net debt/(nd + equity)) % 2% 11% (13%) 9% (5%) (44%) (4%) Price Target 1.7 1.71 Gearing (net debt/equity) % 2% 12% (11%) % (5%) (3%) (51%) RRL Blended price target Blend 1.7 13 ch 2 4
Fundamentals Macquarie Quant View The quant model currently holds a strong negative view on Regis Resources. The strongest style exposure is Growth, indicating this stock has good historic and/or forecast growth. Growth metrics focus on both top and bottom line items. The weakest style exposure is Price Momentum, indicating this stock has had weak medium to long term returns which often persist into the future. 948/89 Global rank in Materials % of BUY recommendations 4% (8/2) Number of Price Target downgrades 13 Number of Price Target upgrades 1 Attractive Quant Local market rank Global sector rank Displays where the company s ranked based on the fundamental consensus Price Target and Macquarie s Quantitative Alpha model. Two rankings: Local market (Australia & NZ) and Global sector (Materials) Macquarie Alpha Model ranking A list of comparable companies and their Macquarie Alpha model score (higher is better). Factors driving the Alpha Model For the comparable firms this chart shows the key underlying styles and their contribution to the current overall Alpha score..9.. -.1 -.4-1. -1.2-3. -2. -1.. 1. 2. 3. -% -8% -6% -4% -2% % 2% 4% 6% 8% % Valuations Growth Profitability Earnings Momentum Price Momentum Quality Macquarie Earnings Sentiment Indicator The Macquarie Sentiment Indicator is an enhanced earnings revisions signal that favours analysts who have more timely and higher conviction revisions. Current score shown below. Drivers of Stock Return Breakdown of 1 year total return (local currency) into returns from dividends, changes in forward earnings estimates and the resulting change in earnings multiple..4 -.3..3. -.4 -.4-3. -2. -1.. 1. 2. 3. -% -5% % 5% % Dividend Return Multiple Return Earnings Outlook 1Yr Total Return What drove this Company in the last 5 years Which factor score has had the greatest correlation with the company s returns over the last 5 years. Consensus Recommendation 3m Earnings Revisions EBITDA Revisions 3 Month 3M Price Target Revisions Return on Equity FY ROIC FY Altman Z-Score Earnings Stability -44% -49% Negatives Positives -41% -41% 39% 34% 33% 44% -6% -4% -2% % 2% 4% 6% How it looks on the Alpha model A more granular view of the underlying style scores that drive the alpha (higher is better) and the percentile rank relative to the sector and market. Alpha Model Score Valuation Growth Profitability Earnings Momentum Price Momentum Quality Capital & Funding Liquidity Risk Technicals & Trading Normalized Score -1.16 -..42 -.53.39-1.31-1.25 -.56-1.3-1.19.42 Percentile relative to sector(/89) Percentile relative to market(/48) 5 5 1 1 Source (all charts): FactSet, Thomson Reuters, and Macquarie Research. For more details on the Macquarie Alpha model or for more customised analysis and screens, please contact the Macquarie Global Quantitative/Custom Products Group (cpg@macquarie.com) 13 ch 2 5
Important disclosures: Recommendation definitions Macquarie - Australia/New Zealand Outperform return >3% in excess of benchmark return Neutral return within 3% of benchmark return Underperform return >3% below benchmark return Benchmark return is determined by long term nominal GDP growth plus 12 month forward market dividend yield Macquarie Asia/Europe Outperform expected return >+% Neutral expected return from -% to +% Underperform expected return <-% Macquarie First South - South Africa Outperform expected return >+% Neutral expected return from -% to +% Underperform expected return <-% Macquarie - Canada Outperform return >5% in excess of benchmark return Neutral return within 5% of benchmark return Underperform return >5% below benchmark return Macquarie - USA Outperform (Buy) return >5% in excess of Russell 3 index return Neutral (Hold) return within 5% of Russell 3 index return Underperform (Sell) return >5% below Russell 3 index return Volatility index definition* This is calculated from the volatility of historical price movements. Very high highest risk Stock should be expected to move up or down 6 % in a year investors should be aware this stock is highly speculative. High stock should be expected to move up or down at least 4 6% in a year investors should be aware this stock could be speculative. Medium stock should be expected to move up or down at least 3 4% in a year. Low medium stock should be expected to move up or down at least 25 3% in a year. Low stock should be expected to move up or down at least 25% in a year. * Applicable to Asia/Australian/NZ/Canada stocks only Recommendations 12 months Note: Quant recommendations may differ from Fundamental Analyst recommendations Financial definitions All "Adjusted" data items have had the following adjustments made: Added back: goodwill amortisation, provision for catastrophe reserves, IFRS derivatives & hedging, IFRS impairments & IFRS interest expense Excluded: non recurring items, asset revals, property revals, appraisal value uplift, preference dividends & minority interests EPS = adjusted net profit / efpowa* ROA = adjusted ebit / average total assets ROA Banks/Insurance = adjusted net profit /average total assets ROE = adjusted net profit / average shareholders funds Gross cashflow = adjusted net profit + depreciation *equivalent fully paid ordinary weighted average number of shares All Reported numbers for Australian/NZ listed stocks are modelled under IFRS (International Financial Reporting Standards). Recommendation proportions For quarter ending 31 December 214 AU/NZ Asia RSA USA CA EUR Outperform 51.8% 58.6% 45.7% 44.42% 6.54% 46.81% (for US coverage by MCUSA, 5.29% of stocks followed are investment banking clients) Neutral 31.8% 27.37% 3.99% 5.% 35.37% 33.51% (for US coverage by MCUSA, 3.8% of stocks followed are investment banking clients) Underperform 16.39% 14.57% 23.94% 5.48% 4.8% 19.68% (for US coverage by MCUSA,.44% of stocks followed are investment banking clients) RRL AU vs Small Ordinaries, & rec history (all figures in AUD currency unless noted) Note: Recommendation timeline if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period. Source: FactSet, Macquarie Research, ch 2 12-month target price methodology RRL AU: A$1.7 based on a DCF methodology Company-specific disclosures: RRL AU: Macquarie and its affiliates collectively and beneficially own or control 1% or more of any class of Limited's equity securities. Important disclosure information regarding the subject companies covered in this report is available at www.macquarie.com/disclosures. Date Stock Code (BBG code) Recommendation Target Price 6--2 RRL AU Outperform A$1.7 28-Jan-2 RRL AU Neutral A$1.9 -Jan-2 RRL AU Neutral A$1.86 7-Nov-214 RRL AU Outperform A$1.75 31-Oct-214 RRL AU Outperform A$1.8 22--214 RRL AU Outperform A$1.75 9--214 RRL AU Outperform A$1.77 3-Jul-214 RRL AU Outperform A$1.98 23-May-214 RRL AU Neutral A$1.8 21-Feb-214 RRL AU Neutral A$2.7 16-Jan-214 RRL AU Neutral A$3. 14-Jan-214 RRL AU Neutral A$3.3 25-Oct-213 RRL AU Neutral A$3.6 26--213 RRL AU Outperform A$4.4 17--213 RRL AU Outperform A$4. 23-Jul-213 RRL AU Outperform A$3.6 25-Apr-213 RRL AU Outperform A$4. 6--213 RRL AU Outperform A$5. 26-Feb-213 RRL AU Outperform A$5.8 18-Jan-213 RRL AU Outperform A$6. 3-Oct-212 RRL AU Outperform A$5.8 17-Jul-212 RRL AU Outperform A$4.7 13 ch 2 6
Target price risk disclosures: RRL AU: Any inability to compete successfully in their markets may harm the business. This could be a result of many factors which may include geographic mix and introduction of improved products or service offerings by competitors. The results of operations may be materially affected by global economic conditions generally, including conditions in financial markets. The company is exposed to market risks, such as changes in interest rates, foreign exchange rates and input prices. From time to time, the company will enter into transactions, including transactions in derivative instruments, to manage certain of these exposures. Analyst certification: The views expressed in this research reflect the personal views of the analyst(s) about the subject securities or issuers and no part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in this research. The analyst principally responsible for the preparation of this research receives compensation based on overall revenues of Macquarie Group Ltd (ABN 94 122 169 279, AFSL No. 31862) ( MGL ) and its related entities (the Macquarie Group ) and has taken reasonable care to achieve and maintain independence and objectivity in making any recommendations. General disclosure: This research has been issued by Macquarie Securities (Australia) Limited (ABN 58 2 832 126, AFSL No. 238947) a Participant of the Australian Securities Exchange (ASX) and Chi-X Australia Pty Limited. This research is distributed in Australia by Macquarie Equities Limited (ABN 41 2 574 923, AFSL No. 23754) ("MEL"), a Participant of the ASX, and in New Zealand by Macquarie Equities New Zealand Limited ( MENZ ) an NZX Firm. Macquarie Private Wealth s services in New Zealand are provided by MENZ. Macquarie Bank Limited (ABN 46 8 583 542, AFSL No. 23752) ( MBL ) is a company incorporated in Australia and authorised under the Banking Act 1959 (Australia) to conduct banking business in Australia. None of MBL, MGL or MENZ is registered as a bank in New Zealand by the Reserve Bank of New Zealand under the Reserve Bank of New Zealand Act 1989. Any MGL subsidiary noted in this research, apart from MBL, is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Australia) and that subsidiary s obligations do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of that subsidiary, unless noted otherwise. This research is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice, you should consider the appropriateness of the advice having regard to your situation. 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The Macquarie Group, its officers and employees may have conflicting roles in the financial products referred to in this research and, as such, may effect transactions which are not consistent with the recommendations (if any) in this research. The Macquarie Group may receive fees, brokerage or commissions for acting in those capacities and the reader should assume that this is the case. The Macquarie Group s employees or officers may provide oral or written opinions to its clients which are contrary to the opinions expressed in this research. Important disclosure information regarding the subject companies covered in this report is available at www.macquarie.com/disclosures. 13 ch 2 7