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ANNUAL REPORT AND FINANCIAL STATEMENTS
PERIOD ENDED 30 JUNE 2006
CONTENTS
PAGE
CORPORATE DIRECTORY
CHAIRMAN’S REPORT
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
BALANCE SHEET
INCOME STATEMENT
STATEMENT OF CHANGES IN EQUITY
CASH FLOW STATEMENT
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDIT REPORT
CORPORATE GOVERANCE STATEMENT
ASX ADDITIONAL INFORMATION
2
3
4
11
12
13
14
15
16
31
32
34
39
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
1
CORPORATE DIRECTORY
DIRECTORS
AUDITORS
Howard Dawson (Chairman)
Jim Malone (Non-Executive Director)
Mark Thompson (Executive Director)
RSM Bird Cameron Partners
8 St Georges Terrace
Perth WA 6000
COMPANY SECRETARIES
Bryan Dixon
Lisa Wynne
REGISTERED OFFICE & PRINCIPAL PLACE OF
BUSINESS
Level 1
89 St George’s Terrace
Perth, Western Australia 6000
Phone:
+618 9415 1714
Facsimile: +618 9481 2200
Email:
info@catalystmetals.com
Website: www.catalystmetals.com
SHARE REGISTRY
Security Transfer Registrars
770 Canning Hwy
Applecross WA 6153
Telephone: +618 9315 2333
Facsimile: +618 9315 2233
STOCK EXCHANGE LISTING
The Company is listed on Australian Stock
Exchange Limited
Home Exchange – Perth
ASX Code:
CYL
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
2
CHAIRMAN’S REPORT
Dear Shareholder,
Pursuant to Section 292 of the Corporations Act 2001 the following documents form part of
the annual report for Catalyst Metals Limited ("Catalyst") for the period ending 30 June 2006.
Catalyst listed on the Australian Stock Exchange on 26 July 2006 after a highly successful
capital raising of $3,200,000 which was oversubscribed.
For the period under review in this report Catalyst was a public unlisted company whose
focus during the period had been the acquisition, through an option agreement, of the
Minnie Creek project. Full details of the Minnie Creek project area, and, in particular the
Minnie Springs molybdenum discovery which is the initial target of exploration within the
project, are contained within the Catalyst prospectus which was prepared to undertake the
$3,200,000 capital raising.
Catalyst looks forward to an exciting year of exploration and on behalf of my fellow directors,
Jim Malone and Mark Thompson, I would like to thank all shareholders for their support to
date and look forward to reporting the results of our exploration over the coming year.
Yours sincerely,
Howard Dawson
Chairman
24 October 2006
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
3
DIRECTORS’ REPORT
The Directors present their report on Catalyst Metals Limited for the period ended 30 June 2006.
BOARD OF DIRECTORS
The names and details of the Catalyst Metals Ltd (“Company”) directors in office during the financial
period and until the date of this report are as follows. Directors were in office for this entire period unless
otherwise stated.
Howard Dawson
(Non-Executive Chairman)
Mr Dawson was appointed to the Board in March 2006. Mr Dawson had a 11 year career as a geologist
before entering the securities industry as a research analyst in 1987. Over the subsequent 16 years he
fulfilled a number of complimentary roles within the securities industry including research, corporate
advisory, business development and management for firms including Hartley Poynton, McIntosh
Securities, Merrill Lynch and ABN AMRO Morgan Limited.
Mr Dawson brings to the Board of Catalyst Metals technical, financial and corporate skills that will be
used to assist the Company in the evaluation of the Minnie Creek project as well as additional resource
projects as the company develops.
Responsibilities:
Chairman of the Nomination and Remuneration Committee and a member of the
Audit Committee. Mr Dawson also has responsibilities for capital raising, risk
identification and independent technical and financial review of projects.
Qualifications:
Bachelor of Science (Geology)
Assoc. Securities Institute of Australia
Directorships:
Discovery Capital Limited - Executive Chairman
Lunalite International Limited - Non Executive Director
Uranium King Limited – Non Executive Chairman
Latin Gold Limited – Non-Executive Director
Past directorships: Comet Resources Limited
Bounty Industries Limited
Jim Malone
(Non-Executive Director)
Mr Malone was appointed to the Board in March 2006. Mr Malone has worked successfully as an
accountant, stockbroker, business analyst and CEO of a medium sized business for the past 18 years.
Mr. Malone had worked for Arthur Anderson accountants, Hartley Poynton stockbrokers, CSFB and
Lehman Brothers merchant banks in London and for the West Coast Eagles and Richmond Football
Clubs, the latter as CEO from 1994 to 2000.
Responsibilities:
Ongoing business development, all capital raisings, investor relations, ASX liaison, risk
identification, corporate governance and financial management of the Company.
Mr Malone is Chairman of the Audit Committee and a member of the Nomination
and Remuneration Committee.
Qualifications:
Mr Malone has a Bachelor of Commerce degree from the University of Western
Australia and is an Associate of the Australian Society of CPA’s.
Directorships:
Livingstone Petroleum Limited - Non Executive Chairman
Latin Gold Limited – Managing Director
Uranium King Limited – Non Executive Director
Discovery Capital Limited - Non Executive Director
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
4
DIRECTORS’ REPORT
Mark Thompson (Executive Director – Appointed 22 May 2006)
Mr Thompson has worked extensively throughout Africa, USA, South America and Australia on mineral
exploration, resource development and palaeontologic projects since 1989. Mr Thompson has worked
for companies including Western Mining Corp, Equatorial Mining Ltd, Panorama Resources Ltd and
Centenary International Mining Ltd. He has successfully vendored the lead properties for other
companies such as Image Resources NL and Meteoric Resources Ltd. Prior to returning to full time
exploration in 2005, Mr Thompson was based in America to help explore and develop palaeontology
resources in Montana and Wyoming. Mr Thompson is a member of the Society of Vertebrate
Palaeontology, the National Speakers Association of Australia and an Editorial Board member/author of
the Encyclopaedia of Anthropology. He brings to Catalyst a strong technical as well as practical
experience in the exploration for mineral deposits.
Responsibilities:
Mr Thompson’s role encompasses the management of all mineral exploration,
identification and operational functions of the company. His responsibilities also
include health, safety and environment management.
Directorships:
None
Bryan Dixon
(Non-Executive Director - Appointed 7 March 2006, Resigned 22 May 2006)
(Company Secretary- Appointed 7 March 2006)
Bryan has 12 years experience in the finance and the administration of public and listed companies and
has previously been employed by KPMG, Resolute Limited and Société Générale. Bryan specialises in
the administration and compliance of emerging ASX and AIM listed resource companies. Bryan brings
additional financial, corporate, legal, investment analysis and taxation skills to the Company.
Qualifications: Bachelor of Commerce from the University of Western Australia
Chartered Accountant
Graduate Diploma in Company Secretarial Practice
Directorships: Hodges Resources Ltd – Non Executive Director
Blackham Resources Ltd – Managing Director
Lisa Wynne
(Company Secretary – Appointed 11 October 2006)
Lisa is a Chartered Accountant with 6 years experience working with listed entities in
senior financial roles responsible for management and financial reporting, taxation,
and ensuring continuous disclosure and compliance. Lisa presently works with a
number of emerging ASX and AIM listed resource companies and specialises in
financial and company secretarial transaction and corporate work.
Qualifications: Bachelor of Commerce from Edith Cowan University
Chartered Accountant
Currently studying Graduate Diploma in Applied Corporate Governance
Directorships: None
CORPORATE STRUCTURE
Catalyst Metals Ltd is a company limited by shares that is incorporated and domiciled in Australia.
Catalyst Metals Ltd had no controlled entities during the financial period.
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
The principal activity of the Company during the period was exploration of its Minnie Creek
Molybdenum project north east of Carnarvon in Western Australia.
Catalyst successful listed on the ASX on the 26 July 2006 raising $3.2 million before capital raising costs.
EMPLOYEES
The Company employed 3 employees as at 30 June 2006.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
5
DIRECTORS’ REPORT
REVIEW OF OPERATIONS
Catalyst Metals Limited was incorporated on 21 March 2006 for the purpose of acquiring and exploring
the Minnie Springs Molybdenum prospect.
On 27 March 2006 the Company raised $5,000 through the issue of 5 million ordinary shares to the
promoters of the Company. Additional capital of $8,000 was raised on 7 April 2006 through the issue of
8 million incentive shares. On 10 May 2006 the Company raised $160,000 in seed capital through the
issue of 2 million ordinary shares.
The Company was admitted to the Official List of the ASX during July 2006 following the closure of an
initial public offer of 16 million shares to raise $3,200,000.
A more detailed review of the Company’s operations during the financial period is set out in the
Chairman’s Report.
RESULTS OF OPERATIONS
The operating loss after income tax of the Company for the period ended 30 June 2006 was $47,310.
The Company’s basic loss per share for the period was 3 cents
No dividend has been paid during or is recommended for the financial period ended 30 June 2006.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Company during the financial period not
otherwise dealt with in this report and the financial statements.
FUTURE DEVELOPMENTS
Likely future developments in the operations of the Company are referred to in the Chairman’s Report.
Other than as referred to in this report, further information as to likely developments in the operations of
the Company and expected results of those operations would, in the opinion of the Directors, be
speculative and prejudicial to the interests of the Company and its shareholders.
SUBSEQUENT EVENTS
There has not been any matter or circumstance that has arisen since 30 June 2006, which has
significantly affected, or may significantly affect the operations of the Company, the result of those
operations, or the state of affairs of the Company in subsequent financial years, other than:
On 14 July 2006, the Company exercised its option over the Minnie Creek property acquiring a 90%
interest by paying $100,000 (before GST).
The Company was admitted to the Official List of the ASX on 26 July 2006 following the closure of an
initial public offer of 16 million shares to raise $3,200,000 before capital raising costs.
On 12 October the company lodged a short form prospectus with ASIC for a non renounceable
entitlements issue of 1 new option for every 2 ordinary shares held by shareholders at an issue price of 1
cent per new option to raise $115,000 before capital raising costs.
FINANCIAL POSITION
The Company’s working capital, being current assets less current liabilities was $125,690 at 30 June 2006.
In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they become due and payable.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
6
DIRECTORS’ REPORT
DIRECTORS’ MEETINGS
The number of meetings attended by each of the Directors of the Company during the financial period
was:
Howard Dawson
Jim Malone
Mark Thompson
Bryan Dixon
Board Meetings
Number held
and entitled to
attend
Number
Attended
4
4
1
4
4
4
1
4
No meetings of the Audit Committee of the Company were held during the financial period.
ENVIRONMENTAL ISSUES
The Company’s operations are subject to State and Federal laws and regulation concerning the
environment. Details of the Company performance in relation to environmental regulation are as
follows:
The Company’s exploration activities are subject to the Western Australian Mining Act. The Company
has a policy of complying with or exceeding its environmental performance obligations. The Board
believes that the Company has adequate systems in place for the management of its environmental
requirements. The Company aims to ensure the appropriate standard of environmental care is
achieved, and in doing so, that it is aware of and is in compliance with all environmental legislation. The
Directors of the Company are not aware of any breach of environmental legislation for the financial
period under review.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene
in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of
the Company for all or any part of those proceedings.
SHARE OPTIONS
As at the date of this report, there were 1,050,000 unissued ordinary shares under option.
No person entitled to exercise any option referred to above have or had, by virtue of the option, a right
to participate in any share issue of any other body corporate.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
7
DIRECTORS’ REPORT
REMUNERATION REORT
This report details the type and amount of remuneration for each director of Catalyst Metals Limited,
and for the executives receiving the highest remuneration.
Remuneration Policy
It is the company’s objective to provide maximum stakeholder benefit from the retention of a high
quality board by remunerating directors fairly and appropriately with reference to relevant employment
market conditions. To assist in achieving the objective the Board links the nature and amount of
executive directors’ emoluments to the company’s financial and operational performance. The
expected outcomes of this remuneration structure are:
•
•
Retention and Motivation of Directors
Performance rewards to allow Directors to share the rewards of the success of Catalyst Metals
Limited
The remuneration of an executive director will be decided by the Remuneration and Nomination
Committee. In determining competitive remuneration rates the Committee reviews local and
international trends among comparative companies and the industry generally. It also examines terms
and conditions for the employee share option plan.
The maximum remuneration of non-executive Directors is the subject of Shareholder resolution in
accordance with the Company’s Constitution, and the Corporations Act 2001 as applicable. The
appointment of non-executive Director remuneration within that maximum will be made by the Board
having regard to the inputs and value of the Company of the respective contributions by each non-
executive Director.
The Board may award additional remuneration to non-executive Directors called upon to perform extra
services or make special exertions on behalf of the Company.
There is no scheme to provide retirement benefits, other than statutory superannuation, to non-
executive directors.
All equity based remuneration paid to directors and executives is valued at the cost to the company
and expensed. Options are valued using the Black-Scholes methodology.
Performance Based Remuneration
The issue of options to directors in accordance with the Company’s employee share option plan to
encourage the alignment of personal and shareholder returns. The intention of this program is to align
the objectives of directors/executives with that of the business and shareholders. In addition all
directors and executives are encouraged to hold shares in the Company.
The Company has not paid bonuses to directors or executives to date.
Company Performance, Shareholder Wealth and Directors’ and Executives’ Remuneration
The remuneration policy has been tailored to maximise the commonality of goals between shareholders
and directors and executives. The method applied in achieving this aim to date being the issue of
options to directors to encourage the alignment of personal and shareholder interests. The company
believes this policy will be the most effective in increasing shareholder wealth.
Details of Remuneration for Period Ended 30 June 2006
The remuneration for each director and of the one executive officer of the Company during the period
was as follows:
Directors and Executive Officers’ Emoluments
No remuneration was paid to Directors or Executives during the financial period ended 30 June 2006.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
8
DIRECTORS’ REPORT
Performance Income as a Proportion of Total Remuneration
1,050,000 options were issued to Mark Thompson in July 2006 and will be first amortisation in the June
2007 financial year.
Employment Contracts of Directors and Senior Executives
There were no formal contracts finalised as at the completion of the June 2006 financial period for Non-
executive Directors. Non-executive Directors are paid under the terms agreed to by a directors
resolution at rates detailed below:
Mr Dawson will receive director’s fees of $40,000 per annum inclusive of superannuation requirements.
Mr Malone will receive director’s fees of $30,000 per annum inclusive of superannuation requirements.
Mr Thompson has an employment agreement in place whereby he receives up to $60,000 per annum
fully inclusive of superannuation requirements. Lateral Minerals Pty Ltd, a related party of Mr Thompson,
is engaged by the Company and receives $3,800 per month for the provision of exploration and
development services.
The Company Secretaries have a monthly agreement on ordinary commercial terms.
DIRECTORS’ INTERESTS IN SHARES AND OPTIONS
As at the date of this report, the interests of the Directors in the ordinary shares and options of the
Company are:
Directors
Balance at
beginning of
period
Ordinary Shares
Purchased/(Sold)
Balance at
end of period
Balance at
beginning
of period
Options
Expired
Issued
Balance at
end of
period
H Dawson
J Malone
M Thompson
B Dixon
(resigned 22
May 2006)
-
-
-
-
1,040,000
1,040,000
965,000
965,000
1,090,000
1,090,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,050,000
1,050,000
-
-
As at the date of this report, the interests of the Directors in the Incentive shares of the Company are:
Class A Incentive Shares
Class B Incentive Shares
Directors
Balance at
beginning of
period
Purchased/(Sold)
Balance at
end of period
Balance at
beginning of
period
Purchased/(Sold)
Balance at
end of period
H Dawson
J Malone
M Thompson
B Dixon
(resigned 22
May 2006)
-
-
-
-
600,000
900,000
600,000
900,000
1,000,000
1,000,000
-
-
-
-
-
-
600,000
900,000
600,000
900,000
1,000,000
1,000,000
-
-
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
There are no insurance policies in place for Directors and Officers insurance. The Directors and Officers
have indemnities in place with the Company.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
9
DIRECTORS’ REPORT
NON-AUDIT SERVICES
The board of directors is satisfied that the provision of non-audit services during the period is compatible
with the general standard for audit independence imposed by the Corporations Act 2001. The directors
are satisfied that the services disclosed below did not compromise the external auditor’s independence
for the following reasons:
•
The nature of the services provided do not compromise the general principles relating to
auditor independence as set out in the Institute of Chartered Accountants in Australia and
CPA Australia’s Professional Statement F1: Professional Independence.
The following fees for non-audit services were paid to the external auditors during the period:
•
$5,000 Investigating Accountants Report
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the period ended 30 June 2006 has been received
and immediately follows the Directors’ Report.
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the
Directors of Catalyst Metals support and have adhered to the principles of sound corporate
governance.
The Board recognises the recent recommendations of the Australian Stock Exchange Corporate
Governance Council, and considers that Catalyst Metals is in compliance with those guidelines which
are of critical importance to the commercial operation of a junior listed resources company. During the
financial period, shareholders continued to receive the benefit of an efficient and cost-effective
corporate governance policy for the Company. The Company’s corporate governance statement
and disclosures are contained in the annual report.
This report is made in accordance with a resolution of the Directors.
Howard Dawson
Chairman
Perth, Western Australia
24 October 2006
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
10
BALANCE SHEET
As at 30 June 2006
Current Assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total Current Assets
Non-Current Assets
Exploration and evaluation expenditure
Total Non-Current Assets
TOTAL ASSETS
Current Liabilities
Trade and other payables
TOTAL LIABILITIES
NET ASSETS
Equity
Contributed equity
Accumulated losses
TOTAL EQUITY
Note
6
7
8
9
2006
$
96,338
8,850
53,468
158,656
-
-
158,656
10
32,966
32,966
125,690
173,000
(47,310)
125,690
11
12
The above balance sheet should be read in conjunction with the accompanying notes.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
12
INCOME STATEMENT
For the Period Ended 30 June 2006
Revenue
Occupancy costs
Professional fees
Administration costs
Exploration costs
Loss before income tax expense
Income tax expense
Net loss attributable to members of Company
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
Note
2006
$
2
3
3
3
3
5
4
4
1,009
(1,619)
(8,310)
(4,747)
(33,643)
(47,310)
-
(47,310)
(3.0 cents)
(1.4 cents)
The above income statement should be read in conjunction with the accompanying notes.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
13
STATEMENT OF CHANGES IN EQUITY
For the Period Ended 30 June 2006
Issued Capital
Accumulated
Reserves
Total
Balance on
incorporation
Loss
Issue of shares
$
-
-
173,000
losses
$
-
(47,310)
-
Balance at 30 June 2006
173,000
(47,310)
$
$
-
-
-
-
-
(47,310)
173,000
125,690
The above statement of changes in equity should be read in conjunction with the accompanying
notes.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
14
CASH FLOW STATEMENT
For the Period Ended 30 June 2006
Cash Flows from Operating Activities
Payments for exploration and evaluation
Payments to suppliers, contractors and employees
Interest received
Note
2006
$
(31,981)
(13,066)
1,009
Net cash flows used in operating activities
13
(44,038)
Cash Flows from Financing Activities
Proceeds from issue of shares
Pre-paid share issue expenses
Net cash flows from financing activities
Net increase cash and cash equivalents
Cash and cash equivalents at the beginning of the
financial period
Cash and cash equivalents at the end of the financial
period
6
173,000
(32,624)
140,376
96,338
-
96,338
The above cash flow statement should be read in conjunction with the accompanying notes.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
15
NOTES TO THE FINANCIAL STATEMENTS
For The Period Ended 30 June 2006
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(a)
Financial Reporting Framework
The financial report is a general purpose financial report that has been prepared in accordance
with Accounting Standards, Urgent
Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.
Accounting Standards include Australian equivalents to International Financial Reporting
Standards (‘A-IFRS’). Compliance with the A-IFRS ensures that the financial statements and notes
of the Company comply with International Financial Reporting Standards (‘IFRS’).
Issues Group
The financial report covers Catalyst Metals Limited, which at 30 June 2006 was an unlisted public
company, incorporated and domiciled in Australia. Catalyst Metals was admitted to the official
list of the Australian Stock Exchange subsequent to year end.
The financial report has been prepared on an accruals basis and is based on historical costs and
does not take into account changing money values or, except where stated, current valuations
of non-current assets. Cost is based on the fair values of the consideration given in exchange for
assets.
The following is a summary of the material accounting policies adopted by the Company in the
preparation of the financial report. The accounting policies have been consistently applied,
unless otherwise stated.
(b)
Statement of compliance
Australian Accounting Standards that have recently been issued or amended but are not yet
effective have not been adopted for the annual reporting period ending 30 June 2006 because
they do not require a change to accounting policies and therefore have no impact or they are
not applicable to the Company.
(c)
Revenue
Interest revenue is recognised on a proportional basis taking into account the interest rates
applicable to the financial assets.
(d)
Impairment
Assets are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. The impairment loss is recognised for the amount
by which the assets’s carrying amount exceeds its recoverable amount. The recoverable amount
is the higher of an assets fair value less costs to sell and value in use.
(e) Cash and cash equivalents
For the purpose of the cash flow statement, cash includes cash on hand and at call deposits with
banks or financial institutions and investments in money market instruments with less than 30 days
to maturity.
(f)
Trade and other receivables
Trade receivables, loans, and other receivables are recorded at amortised cost less impairment.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
16
NOTES TO THE FINANCIAL STATEMENTS
For The Period Ended 30 June 2006
(g)
Exploration and Evaluation Expenditure
Exploration and evaluation expenditure
is
accumulated separately for each area of interest. Such expenditure comprises net direct costs
and an appropriate portion of related overhead expenditure. Each area of interest is limited to
a size related to a known or probable mineral resource capable of supporting a mining
operation.
incurred by or on behalf of the Company
Exploration expenditure for each area of interest is written off as incurred, except that it may be
carried forward provided that one of the following conditions is met:
• such costs are expected to be recouped through successful development and exploitation of
the area of interest or, alternatively, by its sale; or
• exploration activities in an area of interest have not, at balance date reached a stage which
permits a reasonable assessment of the existence or otherwise of economically recoverable
reserves.
The Company performs impairment testing when facts and circumstances suggest the carrying
amount has been impaired. If it was determined that the asset was impaired it would be
immediately written off to the income statement.
Expenditure is not carried forward in respect of any area of interest unless the Company’s right of
tenure to that area of interest is current. Expenditures incurred before the Company has
obtained legal rights to explore a specific area is expensed as incurred. Amortisation is not
charged on areas under development, pending commencement of production.
(h)
Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the
end of the financial year which are unpaid. The amounts are unsecured and are usually paid
within 30 days of recognition.
(i)
Provisions
Provisions are measured at the present value of management’s best estimate of the expenditure
required to settle the present obligation at the balance sheet date.
(j)
Employee entitlements
Provision is made for employee benefits accumulated as a result of employees rendering services
up to the reporting date. These benefits include wages and salaries, annual leave and long
service leave.
Liabilities arising in respect of wages and salaries, annual leave and any other employee benefits
expected to be settled within twelve months of the reporting date are measured at their nominal
amounts based on remuneration rates which are expected to be paid when the liability is settled.
All other employee benefit liabilities are measured at the present value of the estimated future
cash outflow to be made in respect of services provided by employees up to the reporting date.
In determining the present value of future cash outflows, the market yield as at the reporting
date on national government bonds, which have terms to maturity approximating the terms of
the related liabilities, are used.
Employee benefit expenses and revenues arising in respect of the following categories:
• wages and salaries, non-monetary benefits, annual leave, long service leave and other leave
benefits, and
• other types of employee benefits are recognised against profits on a net basis in their
respective categories.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
17
NOTES TO THE FINANCIAL STATEMENTS
For The Period Ended 30 June 2006
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(k)
Income tax
Current tax
Current tax is calculated by reference to the amount of income taxes payable or recoverable in
respect of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws
that have been enacted or substantively enacted by reporting date. Current tax for current and
prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).
Deferred tax
Deferred tax is accounted for using the comprehensive balance sheet liability method in respect
of temporary differences arising from differences between the carrying amount of assets and
liabilities in the financial statements and the corresponding tax base of those items.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred
tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be
available against which deductible temporary differences or unused tax losses and tax offsets
can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary
differences giving rise to them arise from the initial recognition of assets and liabilities (other than
as a result of a business combination) which affects neither taxable income nor accounting
profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary
differences arising from goodwill.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the
period(s) when the asset and liability giving rise to them are realised or settled, based on tax rates
(and tax laws) that have been enacted or substantively enacted by reporting date. The
measurement of deferred tax liabilities and assets reflects the tax consequences that would
follow from the manner in which the Company expects, at the reporting date, to recover or settle
the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same
taxation authority and the company intends to settle its current tax assets and liabilities on a net
basis.
Current and deferred tax for the period
Current and deferred tax is recognised as an expense or income in the income statement,
except when it relates to items credited or debited directly to equity, in which case the deferred
tax is also recognised directly in equity, or where it arises from the initial accounting for a business
combination, in which case it is taken into account in the determination of goodwill or excess.
(l)
Equity based payments
The Company determines the fair value of options issued to employees as remuneration and
recognises the expense in the income statement. This policy is not limited to options and also
extends to other forms of equity based remuneration.
Fair value is measured using a Black-Scholes option pricing model that takes into account the
exercise price, the term of the option, the impact of dilution, the share price at grant date and
expected price volatility of the underlying share, the expected dividend yield and the risk free
interest rate for the term of the option. The expected life used in the model has been adjusted,
based on management’s best estimate, for the effects of non-transferability, exercise restrictions,
and behavioural considerations. The fair value determined at the grant date of the equity-settled
share-based payments is expensed on a straight-line basis over the vesting period.
(m)
Earnings per share
Basic earnings per share is determined by dividing the profit from ordinary activities after related
income tax expense by the weighted average number of ordinary shares outstanding during the
financial year.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
18
NOTES TO THE FINANCIAL STATEMENTS
For The Period Ended 30 June 2006
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(n) Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except:
• where the GST incurred on a purchase of goods and services is not recoverable from the
taxation authority, in which case the GST is recognised as part of the cost of acquisition of
the asset or as part of the expense item as applicable; and
receivables and payables are stated with the amount of GST included.
•
The net amount of GST recoverable from, or payable to, the taxation authority is included as part
of receivables or payables in the balance sheet.
Cash flows are included in the cash flow statement on a gross basis and the GST component of
cash flows arising from investing and financial activities, which are recoverable from, or payable
to, the taxation authority, are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or
payable to, the taxation authority.
(o) Comparative amounts
This is the first financial report prepared by the Company which was incorporated in March 2006.
(p) Critical accounting estimates and judgments
The directors evaluate estimates and judgements incorporated into the financial report based on
historical knowledge and best available current information. Estimates assume a reasonable
expectation of future events and are based on current trends and economic date, obtained
both externally and within the Company.
Examples of those areas which require accounting estimates and judgments include carrying
values of exploration expenditure and share–based payments.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
19
NOTES TO THE FINANCIAL STATEMENTS
For The Period Ended 30 June 2006
2.
Revenue
Interest received
3.
Expenses
Professional fees
Audit fees
Occupancy
Web site costs
Exploration costs written off (refer note 1(g))
4.
Earnings per Share
Weighted average number of ordinary shares outstanding
during the period used in calculation of earnings per share
Weighted average number of potential ordinary shares
outstanding during the period used in calculation of diluted
earnings per share
2006
$
1,009
3,310
5,000
1,619
2,400
33,643
2006
No. of Shares
1,600,000
3,463,014
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
20
NOTES TO THE FINANCIAL STATEMENTS
For The Period Ended 30 June 2006
5.
Income taxes
(a)
Income tax recognised in profit or loss
Prima facie tax on operating loss before income tax at
30%
Add:
Deferred tax asset not brought to account at balance
date as realisation of the benefit is not probable.
Income tax attributable to operating loss
2006
$
(14,193)
14,193
-
No income tax is payable by the Company. The Directors have considered it prudent not to bring to
account the deferred tax asset of income tax losses and exploration deductions until it is probable of
deriving assessable income of a nature and amount to enable such benefit to be realised.
6.
Cash and cash equivalents
Cash at bank
7.
Trade and other receivables
Current Receivables
Sundry debtors
Provision for doubtful debtors
8.
Other current assets
Prepaid capital raising costs
9.
Exploration and Evaluation Expenditure
Written down value - opening
Exploration expenditure
Write downs (refer note 1(g))
Written down value - closing
96,338
8,850
-
8,850
53,468
-
33,642
(33,642)
-
Exploration expenditure relates to expenditures incurred before the Company obtained legal rights to
explore a specific area. The Company exercised it’s option to acquire a 90% interest in the Minnie
Creek project area subsequent to year end.
10.
Trade and other payables
Current Payables
Trade creditors
Accruals
Payments due to directors (see Note 14(g))
25,903
5,000
2,063
32,966
Trade liabilities are non-interest bearing and normally settled on 30-day terms.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
21
NOTES TO THE FINANCIAL STATEMENTS
For The Period Ended 30 June 2006
11.
Contributed Equity
Ordinary shares
Fully paid
Incentive shares
Class A
Class B
2006
Number
2006
$
(a),(d)
7,000,000
165,000
(b),(e)
(c),(e)
4,000,000
4,000,000
4,000
4,000
15,000,000
173,000
(a) Movements in Ordinary Shares
Ordinary shares at beginning of period
Share placement at 0.1cent
Share placement at 8 cents
Ordinary shares at end of period
(b) Movements in Class A Incentive shares
Class A incentive shares at beginning of
period
Share placement at 0.1 cent
Class A incentive shares at end of period
-
5,000,000
2,000,000
7,000,000
-
5,000
160,000
165,000
-
4,000,000
4,000,000
-
4,000
4,000
(c) Movements in Class B Incentive shares
Class B incentive shares at beginning of
-
-
period
Share placement at 0.1 cent
Class B incentive shares at end of period
4,000,000
4,000,000
4,000
4,000
(d) Ordinary shares
On 27 March 2006 the Company raised $5,000 through the issue of 5,000,000 ordinary shares at
$0.001 per share to the promoters of the Company.
On 10 May 2006 the Company raised $160,000 in seed capital through the issue of 2,000,000
ordinary shares at an issue rice of $0.08 per share.
On a show of hands, every member present in person or by proxy shall have one vote and,
upon a poll, each share shall have one vote.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
22
NOTES TO THE FINANCIAL STATEMENTS
For The Period Ended 30 June 2006
11.
Contributed Equity (contd)
(e) Incentive Shares
On 7 April 2006 the Company raised $8,000 through the issue of 4,000,000 Class A incentive
shares at $0.001 per share and 4,000,000 Class B incentive shares at $0.001 per share.
Class A Incentive Shares
•
The Class A Incentive shares are a separate class of shares that will be convertible into
ordinary shares. They do no carry any voting rights in the company or rights to
participate in new issues (whether bonus or rights) in the Company.
•
Each incentive share will convert into one ordinary share upon the earlier of:
(i)
(ii)
(iii)
the volume weighted average price for 30 days of Catalyst Metals Limited
ordinary shares exceeds $0.50 or;
the Company directly or indirectly secures an asset with JORC measured,
indicated and inferred resources exceeding 150,000 gold equivalent ounces;
a takeover bid becoming unconditional; entering into and the Court approving
a solvent scheme of arrangement or reconstruction which as the effect of
changing the control of the Company.
•
If the above do not occur, within 3 years from the date the Company’s ordinary shares
are admitted to quotation of ASX, each 100,000 incentive shares will convert into one
ordinary share (with any fractional entitlement being rounded up to the nearest whole
full paid share.
• The incentive shares are unlisted but are transferable.
Class B Incentive Shares
•
The Class B Incentive shares are a separate class of shares that will be convertible into
ordinary shares. They do no carry any voting rights in the company or rights to
participate in new issues (whether bonus or rights) in the Company.
•
Each incentive share will convert into one ordinary share upon the earlier of:
(i)
(ii)
(iii)
the volume weighted average price for 30 days of Catalyst Metals Limited
ordinary shares exceeds $0.75 or;
the Company directly or indirectly secures an asset with JORC measured,
indicated and inferred resources exceeding 225,000 gold equivalent ounces;
a takeover bid becoming unconditional; entering into and the Court approving
a solvent scheme of arrangement or reconstruction which as the effect of
changing the control of the Company; and
conditional on the Minnie Creek Project being the main focus of the Company
at the time of the (i), (ii) and (iii) above.
•
If the above do not occur, within 3 years from the date the Company’s ordinary shares
are admitted to quotation of ASX, each 100,000 incentive shares will convert into one
ordinary share (with any fractional entitlement being rounded up to the nearest whole
full paid share.
• The incentive shares are unlisted but are transferable.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
23
NOTES TO THE FINANCIAL STATEMENTS
For The Period Ended 30 June 2006
12.
Accumulated Losses
Balance at the beginning of this period
Loss for the period
Balance at the end of the period
13.
Notes to the Cash Flow Statement
(a) Reconciliation of net cash used in operating activities
to operating loss after income tax
Operating loss after tax
Add non cash items:
Changes in net assets and liabilities
Increase in receivables
Increase in payables
2006
$
-
47,310
47,310
47,310
-
8,850
(12,122)
Net cash outflow from operating activities
44,038
(b) Non-cash financing and investing activities
None
14.
Key Management Personnel Compensation
(a) Directors and Specified Executives
The names and positions held by key management personnel in office at any
time during the period are:
Directors
H Dawson
J Malone
M Thompson
B Dixon
Non-Executive Chairman (Appointed 21 March 2006)
Managing Director (Appointed 21 March 2006)
Executive Director (Appointed 22 May 2006)
Non-Executive Director (Appointed 21 March 2006,
Resigned 22 May 2006)
Executives & Officers
B Dixon
Company Secretary (Appointed 21 March 2006)
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
24
NOTES TO THE FINANCIAL STATEMENTS
For The Period Ended 30 June 2006
14.
(b)
Director and Executive Disclosures (continued)
Remuneration of Directors
No payments were made to Directors during the financial period.
(c)
Remuneration of Executives and Officers
No payments were made to Executives and Officers during the financial period.
(d)
Remuneration Options: Granted and Vested during the Period
No options were issued to Directors or Executives during the financial period.
(e)
Option holdings of directors and officers
Nil
(f)
Shareholdings of directors and officers
Ordinary Shares
The numbers of ordinary shares in the company held during the financial year by each
director and other key management personnel of the Company, including their personally
related parties, are set out below:
Directors
H Dawson
J Malone
M Thompson
B Dixon (resigned 22 May 2006)
Balance at
beginning of
period
-
-
-
-
Ordinary Shares
Purchased/(Sold)
Balance at end of
period
1,040,000
915,000
1,000,000
935,000
1,040,000
915,000
1,000,000
935,000
Incentive shares
The numbers of incentive shares in the company held during the financial year by each
personally related parties, are set out below:
Directors
H Dawson
J Malone
M Thompson
B Dixon (resigned 22
May 2006)
(g)
Directors payables
Class A Incentive Shares
Class B Incentive Shares
Balance at
beginning of
period
Purchased
/(Sold)
Balance at
end of
period
Balance at
beginning of
period
Purchased
/(Sold)
Balance
at end of
period
-
-
-
-
600,000
600,000
900,000
900,000
1,000,000
1,000,000
-
-
600,000
900,000
600,000
900,000
- 1,000,000
1,000,000
762,500
762,500
-
762,500
762,500
Amounts payable to Directors and Director related entities at the
end of the financial year, included in current liabilities
2006
$
2,063
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
25
NOTES TO THE FINANCIAL STATEMENTS
For The Period Ended 30 June 2006
14.
Director and Executive Disclosures (continued)
(h)
Remuneration Policy
It is the company’s objective to provide maximum stakeholder benefit from the retention of a
high quality board by remunerating directors fairly and appropriately with reference to relevant
employment market conditions. To assist in achieving the objective the Board links the nature and
amount of executive directors’ emoluments to the company’s financial and operational
performance. The expected outcomes of this remuneration structure are:
• Retention and Motivation of Directors
• Performance rewards to allow Directors to share the rewards of the success of Catalyst Metals
Limited
The remuneration of an executive director will be decided by the Remuneration and Nomination
Committee. In determining competitive remuneration rates the Committee reviews local and
international trends among comparative companies and the industry generally. It also examines
terms and conditions for the employee share option plan.
The maximum remuneration of non-executive Directors is the subject of Shareholder resolution in
accordance with the Company’s Constitution, and the Corporations Act 2001 as applicable. The
appointment of non-executive Director remuneration within that maximum will be made by the
Board having regard to the inputs and value of the Company of the respective contributions by
each non-executive Director.
The Board may award additional remuneration to non-executive Directors called upon to
perform extra services or make special exertions on behalf of the Company.
There is no scheme to provide retirement benefits, other than statutory superannuation, to non-
executive directors.
All equity based remuneration paid to directors and executives is valued at the cost to the
company and expensed. Options are valued using the Black-Scholes methodology.
Performance Based Remuneration
The issue of options to directors in accordance with the Company’s employee share option plan
to encourage the alignment of personal and shareholder returns. The intention of this program is
to align the objectives of directors/executives with that of the business and shareholders. In
addition all directors and executives are encouraged to hold shares in the Company.
The Company has not paid bonuses to directors or executives to date.
Company Performance, Shareholder Wealth and Directors’ and Executives’ Remuneration
The remuneration policy has been tailored to maximise the commonality of goals between
shareholders and directors and executives. The method applied in achieving this aim to date
being the issue of options to directors to encourage the alignment of personal and shareholder
interests. The company believes this policy will be the most effective in increasing shareholder
wealth.
The following table shows the gross revenue, operating loss, net assets, number of mineral
properties and share price at the end of the respective financial years.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
26
NOTES TO THE FINANCIAL STATEMENTS
For The Period Ended 30 June 2006
15.
Related Party Disclosures
Key Management Personnel
Mr Thompson, is a related party of Lateral Minerals Pty Ltd. Catalyst Metals Limited has entered
into a contract with Lateral Minerals Pty Ltd during the year for the provision of exploration and
development services. Lateral Minerals Pty Ltd was not paid any fees under this contract during
the period.
The Company owed $2,063 at year end to Discovery Capital Ltd for the reimbursement of office
and administration costs. Messers Dawson and Malone are directors of Discovery Capital Limited.
Red Dog Option and Joint Venture Agreement (Red Dog Agreement)
Red Dog Prospecting Pty Ltd, a company which Mr Thompson is both a director and shareholder,
entered into an Option and Joint Venture Agreement with Catalyst on 25 May 2006. Red Dog
granted Catalyst an option to purchase a 90% interest in Tenements E09/1187, E09/1174 and
E09/1291 for a purchase price of $100,000 (Option). Catalyst exercised the Option in July 2006.
On the exercise of the Option by Catalyst, a joint venture was established between the parties
(with Catalyst having a participating share of 90% and Red Dog having a participating share of
10%) for the purposes of prospecting, exploring and, if so decided by the parties, mining of
marketable minerals and other commodities. Catalyst will be required to sole fund all exploration
costs up to completion of a feasibility study. Catalyst will be Manager of the joint venture and,
whilst it is solely funding exploration costs, it will have conduct of the joint venture operations as it
sees fit.
16.
Equity-based payments
The Company has entered into an Employee Share Option Plan that allows for share options to
be granted to eligible employees and officers of the Company. The number of share options that
can be issued under the plan cannot exceed 5% of the total number of shares on issue. The terms
and conditions of the share option issued under the plan are at the discretion of the Board
however, the maximum term of the share option is five years.
During the year Nil share options were granted to directors.
All options granted to directors and key management personnel are ordinary shares in Catalyst
Metals Limited, which confer a right of one ordinary share for every option held
17.
Auditors’ Remuneration
Amounts received or due and receivable by the auditors for:
Auditing accounts
Other services
2006
$
5,000
5,000
10,000
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
27
NOTES TO THE FINANCIAL STATEMENTS
For The Period Ended 30 June 2006
18.
Commitments
There were no outstanding commitments, which are not
disclosed in the financial statements as at 30 June 2006
other than:
(a) Remuneration Commitments
No later than 1 year
Later than 1 year but not later than 5 years
(b) Tenement commitments
No later than 1 year
Later than 1 year but not later than 5 years
105,600
105,600
211,200
123,500
-
123,500
334,700
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
28
NOTES TO THE FINANCIAL STATEMENTS
For The Period Ended 30 June 2006
19.
Financial Instruments
Notes
Floating
Interest
Rate
$
1 year or
less
Over 1-5
years
$
$
Non
interest
bearing
$
Total
$
2006
Financial assets
Cash
equivalents
and
Trade
receivables
and
cash
other
6
7
-
-
Total financial assets
Financial liabilities
Trade
payables
and
other
10
Total financial liabilities
Net financial assets
Weighted average interest rate 5.35%
Reconciliation of net financial assets to net assets
Net Financial Assets
Prepayments
Net Assets
Interest rate risks
-
-
-
-
-
-
-
-
-
-
-
-
96,338
96,338
8,850
8,850
105,188
105,188
32,966
32,966
32,966
32,966
72,222
72,222
2006
$
72,222
53,468
125,690
The Company’s exposure to interest rate risk is the risk that a financial instrument’s value will
fluctuate as a result of changes in market interest rates. The Company does not have a formal
policy in place to mitigate such risks.
Credit risk
The maximum exposure to credit risk at balance date is the carrying amount (net of provision
of doubtful debts) of those assets as disclosed in the balance sheet and notes to the financial
statements. The Company has adopted a policy of only dealing with creditworthy
counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating
the risk of financial loss from defaults. The Company’s exposure and the credit ratings of its
counterparties are continuously monitored and the aggregate value of transactions
concluded are spread amongst approved counterparties.
Net fair value
The net fair value of all assets approximates their carrying value.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
29
NOTES TO THE FINANCIAL STATEMENTS
For The Period Ended 30 June 2006
20.
Segment Information
The Company operates in the one segment.
21.
Subsequent Events
There has not been any matter or circumstance that has arisen since 30 June 2006, which has
significantly affected, or may significantly affect the operations of the Company, the result of those
operations, or the state of affairs of the Company in subsequent financial years, other than:
On 14 July 2006, the Company exercised its option over the Minnie Creek property acquiring a 90%
interest by paying $100,000 (before GST).
The Company was admitted to the Official List of the ASX on 26 July 2006 following the closure of an
initial public offer of 16 million shares to raise $3,200,000 before capital raising costs.
On 12 October the company lodged a short form prospectus with ASIC for a non renounceable
entitlements issue of 1 new option for every 2 ordinary shares held by shareholders at an issue price
of 1 cent per new option to raise $115,000 before capital raising costs.
22.
Contingent Liabilities
The Company does not have any contingent liabilities.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
30
DIRECTORS’ DECLARATION
The Directors of the Company declare that:
1.
the financial statements and notes are in accordance with the Corporations Act 2001 and:
(a) comply with Accounting Standards and the Corporations Regulations 2001; and
(b) give a true and fair view of the financial position as at 30 June 2006 and of the
performance for the period ended on that date of the Company;
2.
the Managing Director and Chief Financial Officer have each declared that:
(a) the financial records of the Company for the financial year have been properly maintained
in accordance with section 286 of the Corporations Act 2001;
(b) the financial statements and notes for the financial period comply with the Accounting
Standards; and
(c) the financial statements and notes for the financial period give a true and fair view.
3.
in the Directors’ opinion there are reasonable grounds to believe that the Company will be
able to pay its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Howard Dawson
Chairman
Dated at Perth this 24th day of October 2006
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
31
CORPORATE GOVERNANCE STATEMENT
The Board of Directors of Catalyst Metals Limited is responsible for corporate governance of the
Company. The Board guides and monitors the business and affairs of Catalyst Metals Limited on behalf
of the shareholders by whom they are elected and to whom they are accountable.
For further information on corporate governance policies adopted by Catalyst Metals Limited, refer to
our website: www.catalystmetals.com
Board Objectives
The Board will develop strategies for the Company, review strategic objectives, and monitor the
performance against those objectives. The overall goals of the corporate governance process are to:
•
•
•
drive shareholders value;
assure a prudential and ethical base to the Company’s conduct and activities; and
ensure compliance with the Company’s legal and regulatory obligations.
Consistent with these goals, the Board assumes the following responsibilities;
•
•
•
•
•
developing initiatives for profit and assets growth;
reviewing the corporate, commercial and financial performance of the Company on a regular
basis;
acting on behalf of, and being accountable to, the Shareholders;
identifying business risks and implementing actions to manage those risks; and
developing and effecting management and corporate systems to assure quality.
The Company is committed to the circulation of relevant materials to Directors in a timely manner to
facilitate Directors’ participation in Board discussions on a fully informed basis.
Structure of the Board
The skills, experience and expertise relevant to the position of director held by each director in office at
the date of the annual report is included in the Directors’ Report.
Election of Board members is substantially the province of the Shareholders in general meeting.
However, the Company commits to the following principles:
•
•
the Board to comprise of Directors with a blend of skills, experience and attributes appropriate for
the Company and its business;
the principal criterion for the appointment of new Directors being their ability to add value to the
Company and its business.
The Board has accepted the ASX Corporate Governance Councils definition of an Independent
Director contained in their report titled “The Principles of Good Corporate Governance and Best
Practice Recommendations – March 2003”.
Given the size of the company and the industry in which is operates, the current Board structure is
considered to best serve the Company in meeting its objectives, given its small capitalisation, limited
resources and existing operations. The composition of the Board is reviewed on an annual basis to
ensure that the Board has the appropriate mix of expertise and experience.
There are procedures in place, as agreed by the board, to enable directors to seek independent
professional advice on issues arising in the course of their duties at the company’s expense.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
34
CORPORATE GOVERNANCE STATEMENT
The term in office held by each director in office at the date of this report is as follows:
Name
Term in office
Howard Dawson
Jim Malone
Mark Thompson
7 months
7 months
5 months
Remuneration and Nomination Committee
The Board appointed a Remuneration and Nomination Committee which operates under a charter of
the Board. Mr Malone and Mr Dawson are both members of the Remuneration and Nomination
Committee.
Nomination Arrangements
Where a vacancy is considered to exist, the Committee will select an appropriate candidate through
consultation with external parties and consideration of the needs of shareholders and the Company.
Such appointments will be referred to shareholders for re-election at the next annual general meeting.
All Directors, except the Managing Director, are subject to re-election by shareholders at least every
three years.
When a vacancy exists, through whatever cause, or where it is considered that the Board would benefit
from the services of a new director with particular skills, the Board will determine the selection criteria for
the position based on the skills deemed necessary for the Board to best carry out its responsibilities. The
Board will then appoint the most suitable candidate (assuming one is available) who must stand for
election at the next annual general meeting.
Performance
During the reporting period the Company did not have a formal process for evaluation of Directors and
Executives due to their only being three in total. The Chairman will undertake an annual assessment of
the performance of the individual directors and meet privately with each director to discuss this
assessment.
Remuneration Arrangements
It is the company’s objective to provide maximum stakeholder benefit from the retention of a high
quality board by remunerating directors fairly and appropriately with reference to relevant employment
market conditions. To assist in achieving the objective the Board links the nature and amount of
executive directors’ emoluments to the company’s financial and operational performance. The
expected outcomes of this remuneration structure are:
•
•
Retention and motivation of Directors
Performance rewards to allow Directors to share the rewards of the success of Catalyst Metals
Limited
The remuneration of an executive director will be decided by the Remuneration and Nomination
Committee. In determining competitive remuneration rates the Committee reviews local and
international trends among comparative companies and the industry generally. It also examines terms
and conditions for the employee share option plan.
The maximum remuneration of non-executive Directors is the subject of shareholder resolution in
accordance with the Company’s Constitution, and the Corporations Act 2001 as applicable. The
appointment of non-executive Director remuneration within that maximum will be made by the Board
having regard to the inputs and value of the Company of the respective contributions by each non-
executive Director.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
35
CORPORATE GOVERNANCE STATEMENT
The Board may award additional remuneration to non-executive Directors called upon to perform extra
services or make special exertions on behalf of the Company.
There is no scheme to provide retirement benefits, other than statutory superannuation, to non-
executive directors.
All remuneration paid to directors and executives is valued at the cost to the company and expensed.
Options are valued using the Black-Scholes methodology.
Audit Committee
The shareholders in a general meeting are responsible for the appointment of the external auditors of
the Company, and the Board from time to time will review the scope, performance and fees of those
external auditors.
The Board has established an audit committee in May 2006, which operates under a charter of the
Board. It is the Board’s responsibility to ensure that an effective internal control framework exists within
the Company. This includes both internal controls to deal with both the effectiveness and efficiency of
significant business processes, the safeguarding of assets, the maintenance of proper accounting
records, and the reliability of financial and non information. The Board has delegated the responsibility
for the establishment and maintenance of a framework of internal control of the Company to the audit
committee.
The members of the audit committee at the end of the period and date of this report were:
J Malone
H Dawson
B Dixon
Qualifications of audit committee members
Mr Malone has a bachelor of commerce and is an Associate of the Australian Society of CPA’s. Mr
Malone has worked successfully as an accountant, stockbroker, business analyst and CEO of a medium
sized business for the past 19 years.
Mr Dawson brings to the Committee additional technical, financial and corporate skills. Mr Dawson has
a Bachelor of Science (Geology) and is a Senior Fellow of FINSIA and MAIG.
Mr Dixon holds the office of Company Secretary. Mr Dixon has a degree in Commerce and is a
Chartered Accountant who has extensive experience as an auditor in a big four firm. Mr Dixon is also a
member of Chartered Secretaries Australia.
For details on the number of meetings of the Audit Committee held during the year and the attendees
at those meetings, refer to the Directors’ Report.
Identification and Management of Risk
The Board’s collective experience will enable accurate identification of the principal risks which may
affect the Company’s business. Management of these risks will be discussed by the Board at periodic
(at least annual) strategic planning meetings. In addition, key operational risks and their management,
will be recurring items for deliberation at Board meetings.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
36
CORPORATE GOVERNANCE STATEMENT
Ethical Standards
The Board is committed to the establishment and maintenance of appropriate ethical standards to
underpin the Company’s operations and corporate practices.
Corporate Governance Disclosures
During the financial year Catalyst Metals has complied with each of the 10 Essential Corporate
Governance Principles and the corresponding Best Practice Recommendations, other than in relation
to the matters specified below:
Best Practice Recommendation
Best Practice
Recommendation
Notification of
Departure
Explanation of Departure
2.1 Structure of the
Board
The majority of the
Board are not
independent
directors
2.2 The Chairperson
should
an
be
independent
director
The
chair, Mr
Howard Dawson is
not considered an
independent
director
The Board has determined that, consistent with the size of the
Company and its activities, the Board shall be comprised of
three Directors, two of whom, are non-executive.
The Board recognises that best practice occurs when the
Board comprises a majority of non-executive directors. The
Board continues to strive to meet the Principles of Good
Corporate Governance and Best Practice Recommendations
published by the ASX or other such principles and guidance as
the Board may consider appropriate from time to time,
however the Board also recognises that complying with the
ASX Corporate Governance Council Recommendation 2.1 “A
majority of the Board should be independent directors” is
impractical given the size of the company and the industry in
which is operates. The Board instead aims to assess the
independence of the Company’s non-executive Director on
an ongoing basis requiring full disclosure where conflicts of
interests arise.
refers to the criteria
The Board
independence as
recommended by the ASX in considering independence of
the Chairman.
for
In the interests of disclosure, the Board notes that Mr Dawson is
shareholder in the Company. Furthermore, the Board notes
that Mr Howard is not an executive and as such, the Board
considers that there is limited scope for Mr Dawson’s personal
interests to conflict with those of shareholders.
The Board (subject to members’ voting rights in general
meeting) is responsible for selection of new members and
succession planning, and has regard to a candidate’s
experience and competence
in areas such as mining,
exploration, geology, finance and administration. The wide
commercial experience of Mr Dawson assists Catalyst Metals
in meeting its corporate objectives and plans.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
37
CORPORATE GOVERNANCE STATEMENT
Best
Recommendation
Practice
Notification
Departure
of
Explanation of Departure
4.3 Structure of the
Audit Committee
Audit
Committee’s
Chairman
independent
is not
The Board has established an audit committee in May
2006, which operates under a charter of the Board and
consists of all Non-Executive Directors. The Board has
delegated the responsibility for the establishment and
maintenance of a framework of internal control of the
Company to the audit committee.
The Board recognises that best practice occurs when the
Audit committee comprises of only non-executive
directors; a majority of non-executive directors; an
independent chairperson who is not a chair of the board
and at least three members. The Board continues to strive
to meet the Principles of Good Corporate Governance
and Best Practice Recommendations published by the ASX
or other such principles and guidance as the Board may
consider appropriate from time to time, however the Board
also recognises that complying with the ASX Corporate
Governance Council Recommendation 4.3 is impractical
given the size of the company and the industry in which it
operates.
Catalyst Metals Limited ABN 54 1189 12495 Annual Report 2006
38
ASX ADDITIONAL INFORMATION
Additional information required by Australian Stock Exchange Limited and not shown elsewhere in this
Annual Report is as follows. The information is made up to 12 October 2006.
DISTRIBUTION OF SHAREHOLDERS
1-1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Fully Paid Ordinary Shares
No. of Holders
No. of Shares
% Of Issued Capital
1
28
83
344
31
487
1,000
81,187
812,580
12,747,130
9,358,103
23,000,000
0.00%
0.35%
3.53%
55.42%
40.70%
100%
HOLDERS OF NONMARKETABLE PARCELS
There are no fully paid ordinary shareholders who hold less than a marketable parcel of shares.
TWENTY LARGEST SHAREHOLDERS
The names of the twenty largest holders of ordinary shares are:
1
Lateral Minerals Pty Ltd
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