A N N U A L R E P O R T
08
02
03
05
15
16
17
18
19
20
43
45
45
Welcome Letter from Chairman
Fund Manager’s Report
Financial Statements
Directors’ Report
Independent Audit Declaration
Income Statement
Balance Sheet
Statement of Changes in Equity
Cash Flow Statement
Notes to the Financial Statements
Auditors’ Report
Corporate Governance Statement
ASX additional information
CORPORATE
DIRECTORY
Katana Capital Limited
ABN 56 116 054 301
Directors
Dalton Gooding
Peter Wallace
Derek La Ferla
Giuliano Sala Tenna
Company Secretary
Gabriel Chiappini
Registered Office
Level 37, Exchange Plaza
2, The Esplanade
Perth, Western Australia 6000
Telephone (08) 9326 7672
Facsimile
(08) 9326 7676
www.katanacapital.com.au
Share Registry
Computershare Investor Services Pty
Ltd
Level 2 45 St George’s Terrace,
Perth WA 6000
Telephone (08) 9323 2000
(08) 9323 2033
Facsimile
Auditor
Ernst & Young
The Ernst & Young Building
11 Mounts Bay Road
PERTH WA 6000
ASX Code: KAT
Katana Capital will combine its listed investment
company structure with the proven ability of
its Manager (“Classic Capital Ltd”) to provide
investors with access to comprehensive investment
techniques aimed at providing strong capital and
income returns.
The Company and the Manager share similar
investment philosophies. The role of the Company
is to assess and monitor the Manager and liaise
with the Manager with respect to its Mandate
as detailed in the Management Agreement.
In addition, the Company will seek to identify
appropriate investment opportunities for review
by the Manager.
Our investment philosophy
As an ‘All Opportunities’ fund, the
underlying goal of the Manager is to assess
the risk adjusted return of every potential
opportunity identified by the Manager.
The Manager’s intended approach
includes selectively and modestly taking
higher-risk positions, provided that
the potential return exceeds the
additional risk – preferably in terms
of both value and time.
Whilst the Manager intends to combine
the best principles of value investing,
fundamental and technical analysis,
it does not wish to be constrained by
the constructs of any one approach.
The key to the long-term success of the
Company is seen as the capacity of the
Manager to integrate the best principles
of each discipline with the extensive
and varied experiences of the Manager.
This is achieved by encouraging flexibility
and adaptability, but within the confines
of an overall framework that controls risk.
VOTING RIGHTS
Each shareholder is entitled to receive notice of and
attend and vote at general meetings of the company. At
a general meeting, every shareholder present in person or
by proxy, representative or attorney will have one vote on
a show of hands and on a poll, one vote for each share
held. Any shares which are not fully paid shall be entitled
to a fraction of a vote equal to that proportion of a vote
that the amount paid on the relevant share bears to the
total issue price of the share.
KATANA CAPITAL LTD 2008 ANNUAL REPORT
CONTENTS
02
05
5
6
7
8
9
20
43
45
Fund Manager’s Report
Financial Statements
Directors’ Report
Independent Audit Declaration
Income Statement
Balance Sheet
Statement of Changes in Equity
Cash Flow Statement
Notes to the Financial Statements
Auditors’ Report
ASX additional information
VOTING RIGHTS
Each shareholder is entitled to receive notice of and attend and vote at
general meetings of the company. At a general meeting, every shareholder
present in person or by proxy, representative or attorney will have one vote
on a show of hands and on a poll, one vote for each share held. Any shares
which are not fully paid shall be entitled to a fraction of a vote equal to that
proportion of a vote that the amount paid on the relevant share bears to
the total issue price of the share.
02
KATANA CAPITAL LTD 2008 ANNUAL REPORT
Fund Manager’s
Investment
Report
Classic Capital Pty Ltd as manager (‘Manager’) for Katana Capital Limited
(‘Company’) has attached a report on the performance of the Company’s
portfolio for the 12 months to June 30th 2008.
Performance Summary
Although the Fund once again outperformed its respective
benchmark, the Manager was disappointed that the return
drifted into negative territory. In percentage terms, the
portfolio yielded a gross investment return of -6.41%
before operating expenses and tax. This did however
compare favourably to the Company’s stated benchmark
– the All Ordinaries index – which returned –15.49% over
the same period.
Importantly since listing in December 2005, the Manager
has outperformed the All Ordinaries index for each
financial year. During this three year period, the Manager
has produced an average investment return of 17.52%
pa versus 5.59% pa for the All Ordinaries index. This is an
excellent achievement, yielding an average out performance
of 65% per annum.
Year
Ending
Average
Return
All Ords
Index
Out
Performance
2006
2007
2008
9.95%
49.03%
-6.41%
Average
17.52%
6.90%
25.36%
-15.49%
5.59%
44.20%
93.34%
58.62%
65.39%
2008 Financial Year Review
Global equity markets endured a difficult year with the All
Ordinaries falling 15.49% for the 12 months to the 30th
June 2008. The month of June alone witnessed the ASX
All Ordinaries falling 7.6%. This was the worst performance
in June since the French surrendered to the Germans in
1940! The industrial sector bore the brunt of the initial sell
off, however the down draft in equity markets eventually
overflowed into the resource sector.
The catalyst for the current market volatility has been the
continued decline in the sub prime mortgage market in the
United States, which we first highlighted
in our annual investment review some 12 months ago.
What commenced as a US/UK-centric sub-prime mortgage
crisis has evolved into a full blown credit crisis. This has
resulted somewhat inevitably in the expansion of debt risk
premiums from their historically low and unsustainable
levels. The higher premiums and tighter credit markets
have in turn resulted in the commencement of a debt
de-leveraging cycle the likes of which we have not seen
in many decades. When the debt levers begin to work
in reverse, a decline in the capital or equity position of a
financial institution will invariably be multiplied many times
over in terms of the impact on the funds available to lend.
Another key feature over the last financial year was the
relentless rise in the oil price. This has proved to be a
serious concern for central banks around the world due to
the inflationary pressures of an escalating oil price and the
dampening effect that it has on economic growth.
Accordingly, the Fund had a bias towards the energy,
resource and resource servicing sectors during the financial
year. Additionally during the month of November (2007)
the Fund sold two of its remaining three bank holdings
– ANZ and NAB – with the view that the domestic banking
sector offered minimal growth opportunities in the short to
medium term. The Fund also avoided the melt down in the
infrastructure and listed property trust segments by holding
almost nil weightings in both of those sectors.
On the negative side, the largest single loss for the financial
year was incurred in the overweight position secured in
Brierty Limited during the December IPO. The overweight
position was established as the stock fitted very clearly into
the resource servicing theme, was well priced, had a 26 year
record of continuous profitability and was undergoing a
period of unprecedented revenue growth. However despite
a solid debut, two successive profit downgrades wrought
by a number of mismanaged contracts, saw the stock close
60% lower for the year. The Manager continues to monitor
KATANA CAPITAL LTD 2008 ANNUAL REPORT
03
Top 10 Current Holdings
10.00%
% of
Total
Portfolio
8.00%
6.00%
4.00%
2.00%
0.00%
BHP
MIN WPL GCS
BYL
RIO
ASX Code
JML
BFG PTM HFA
the company very closely, and is cautiously optimistic that
Brierty Limited is putting in place the changes required to
translate revenue growth into higher recurring profitability.
As at the close of the 2008 financial year, the portfolio had
cash reserves of approximately $5.85m or 13.16% of the
total value.
% of Portfolio Invested
During the first half of the financial year, the Manager
participated in a number of Initial Public offerings and
placements. However as global equities retreated in the
second half of the financial year, the pipeline of capital
raisings dried up. The Manager believes the immediate
outlook for capital raising opportunities remains limited.
STOCKS HELD AS AT 30 JUNE 2008
100.00%
95.00%
90.00%
85.00%
80.00%
75.00%
31/7/07
30/9/07 31/11/07 31/1/08 31/3/08 31/5/08
As at the end of the financial year there were 73 companies
in the portfolio. This diversification continued to assist the
Manager to reduce the overall risk to the portfolio.
The Fund’s single largest position is an investment in BHP
Billiton Ltd (ASX code BHP). The Manager’s bias towards
the resource sector and resource servicing companies
contributed to the Fund’s out performance over the All
Ordinaries index. The Manager believes that the resource
sector and the resource servicing sector will continue to
provide investors with superior returns. Long term Chinese
economic growth continues to be driven by the ongoing
urbanisation and industrialisation of the rural population.
This stance is demonstrated by the Manager’s weightings
in not only BHP Billiton Limited but also Mineral Resources
Limited, Woodside Petroleum Limited, Brierty Limited and
RIO Tinto Limited.
On a separate note, the Manager has also increased the
Fund’s exposure to the funds management sector by adding
to HFA Limited, Platinum Capital Limited and Perpetual
Limited. This reflects the Manager’s inherent confidence
in the medium term outlook for the Australian equity
market, along with the desire to capitalise on the growing
superannuation pool. Additionally, the extraordinarily
high free cashflow and gross profit margins are simply too
compelling to ignore, despite the overwhelmingly negative
sentiment towards this sector.
ACONCAGUA RESOURCES LTD
ADCORP AUSTRALIA LTD
ADITYA BIRLA MIN LTD
ADVANCED SHARE LTD
ALARA URANIUM LTD
ALUMINA LIMITED
ARC ENERGY LIMITED
AUSTIN ENGINEERING LTD
AVOCA RESOURCE LIMITED
BABCOCK & BROWN LTD
BELL FINANCIAL GROUP
BHP BILLITON LIMITED
BLACKHAM RESOURCES LTD
BRIERTY LIMITED
CENTREPOINT ALLIANCE
CHEMROK LIMITED
CO2 GROUP LIMITED
CSR LIMITED
DRAGON MOUNTAIN GOLD
EMECO HOLDINGS LTD
ENERGY RESOURCE AUSTRALIA LTD
FORGE GROUP LIMITED
FUTURIS CORP LTD
GLOBAL CONSTRUCTION SERVICES LTD
GREAT SOUTHERN PLANTATIONS LTD
GREENCROSS LIMITED
HFA HOLDINGS LTD
IMF (AUSTRALIA) LTD
IMX RESOURCES LTD
INCREMENTAL PETROL LTD
INDIA RESOURCES LTD
INSURANCE AUSTRALIA GROUP
INTERSTAFF RECRTMNT
IRESS MARKET TECHNOLOGY LTD
ISPIRE LIMITED
JABIRU METALS LTD
JINDALEE RESOURCES
LOGICAMMS LIMITED
257,500
159,750
219,000
47,500
106,028
590,000
577,813
104,500
331,500
403,150
1,045,000
4,089,940
96,000
1,505,860
147,000
680,155
276,000
486,000
245,541
428,000
338,250
136,960
330,000
1,645,170
542,500
425,402
1,035,000
493,500
155,400
345,000
112,500
703,800
120,000
313,000
140,000
1,175,625
95,550
690,000
04
KATANA CAPITAL LTD 2008 ANNUAL REPORT
MACQUARIE GROUP LTD
METCASH LIMITED
MINERAL RESOURCES
MONARCH GOLD MINING
NAVITAS LIMITED
NEW HOPE CORP LTD
NEXUS ENERGY LIMITED
NORTH QUEENSLAND
NORTHERN IRON LTD
ORION EQUITIES LTD
OVER FIFTY GROUP
PANORAMIC RES LTD
PEEL EXPLORATION
PERPETUAL TRUSTEES AUST.
PLATINUM ASSET MNG
PORT BOUVARD LIMITED
QBE INSURANCE GROUP
RIO TINTO LTD
ROC OIL CORPORATION
SAI GLOBAL LIMITED
SEVEN NETWORK LTD
STRIKE RESOURCES LTD
SUNCORP METWAY LTD
TREASURY GROUP LTD
TRI ORIGIN MINERALS
VITA GROUP LTD
WATPAC LIMITED
WEBJET LTD
WESFARMERS LTD
WESTPAC BANKING CORPORATION
WOODSIDE PETROLEUM
680,680
925,000
3,215,000
118,000
967,854
527,000
64,436
195,143
205,000
585,000
187,230
202,000
130,500
895,650
1,044,960
122,000
222,600
1,487,310
397,813
230,000
375,000
954,000
945,750
276,300
61,600
146,250
107,575
405,000
273,877
400,000
1,685,000
The Manager believes that global economic growth will
continue to slow due to tepid (or negative) growth in the
US, Europe and Japan in the near term. Longer term,
the Manager remains cautiously optimistic that increasing
demand from the BRIC economies will eventually provide
a catalyst for growth to resume. Ultimately over the long
term, resource-rich countries such as Australia should
benefit as the large BRIC populations progressively move to
urban areas, necessitating spending on large infrastructure
developments, with new personal wealth driving demand
for a range of consumer goods and services.
The Manager recognises that Australia may be currently
facing the greatest external financial crisis since the great
depression. However in due course as sentiment recovers
and volatility settles, the Manager is cautiously optimistic
on the longer term outlook for the Australian share market
based upon:
• Continued albeit reduced GDP growth, driven by
improved terms of trade for key exports;
• Coordinated measures taken to address global
liquidity issues and bank equity ratios
• Further domestic interest rates declines alongside
aggressive FISCAL stimulus
• A continuing belief that the commodity price cycle
has longevity, despite near term weakness;
• Australian share market price earnings ratios, which
are trading well below their 10 year averages; and
• Strong corporate balance sheets, which continue to
support the capacity of companies to make dividend
and special dividend payments, capital returns and
TOTAL
38,627,420
undertake share buybacks.
Outlook
The current credit crisis will continue to weigh on global
equity markets as investment banks around the world
grapple with further write-downs and the recapitalisation of
balance sheets. Significantly, the US is establishing a facility
to inject much-needed liquidity into the banking system;
has ‘nationalised’ key financial institutions such as Freddie
Mac, Fannie Mae and AIG, which were carrying large, low-
quality debt; and reduced interest rates. Many countries
have implemented strategies to limit aggressive short selling
and although equity markets are likely to remain volatile
over the coming months, there is good reason to believe,
based on history that the bulk of the falls in equity markets
have now occurred.
In Australia the RBA recently reduced interest rates after
a six year tightening cycle and more cuts are expected
over the coming year, which should alleviate some of the
weakness in consumer confidence and demand. The
Manager believes the Australian share market is currently
forming a base although stock selection will again play an
integral part to the success of the portfolio.
Given the recent declines in share prices, the Manager’s
preferred investment themes include energy, (via thermal
coal, liquefied natural gas, oil and uranium), soft
commodities such as wheat/grains, beef, wood pulp etc.
and out of favour high yielding industrials and hybrids.
Additional Appointment
The Manager is pleased to highlight the appointment
of Matthew Ward as a member of the investment team.
Matthew has over 25 years experience analysing companies
for both corporates and stockbroking firms. He has an
economics degree with honours and is a qualified chartered
accountant.
Brad Shallard
Investment Manager
Romano Sala Tenna
Investment Manager
KATANA CAPITAL LTD 2008 ANNUAL REPORT
05
FINANCIAL
STATEMENTS
30 JUNE 2008
DIRECTORS’ REPORT
Your directors present their report with respect to the results of
Katana Capital Limited (the “Company” or “Katana Capital”) for the year
ended 30 June 2008 and the state of affairs of the Company at that date.
DIRECTORS
The following persons were directors of Katana Capital
Limited during the whole of the financial year and up to
the date of this report:
Dalton Leslie Gooding BBus, FCA.
(Non-executive Chariman)
Mr Gooding was appointed to the Board on
11 November 2005. Mr Gooding, formerly a long
standing partner at Ernst & Young, is a Fellow of the
Institute of Chartered Accountants in Australia. He is
currently a partner of Gooding Pervan and advises to
a wide range of businesses with particular emphasis
relating to taxation and accounting issues, due
diligence, feasibilities and general business advice. Mr
Gooding also has a number of other directorships of
companies in many different segments of business.
During the past three years Mr Gooding has also served
as a director of the following other listed companies:
• Australian Wine Holdings Limited*
• SIPA Resources Limited*
• Briety Limited*
• Avita Capital
* denotes current directorship
Peter Wallace SF Fin, FAICD, AFAIM.
(Non-executive Director)
Mr Wallace was appointed to the Board on
19 September 2005. Mr Wallace has had 39 years
in the Banking and Finance industry with experience
gained in all aspects of debt and equity raising. Past
Executive positions held include COO of a major
Regional Bank as well as Chief Credit Officer and other
General Management roles. Most recently has directed
the capital raisings for several large Public companies
as well as providing a variety of Corporate Advisory
services to a wide range of companies, both private and
publicly owned. During the past three years Mr Wallace
has also served as a director of the following other
listed companies:
• Evans and Tate Limited
• Paladio Group Limited*
• RuralAus Investments Limited*
• Tethyan Copper Company Limited
* denotes current directorship
Derek La Ferla BA B Juris LLB.
(Non-executive Director)
Mr La Ferla was appointed to the Board on
19 September 2005. Mr La Ferla is a long standing
corporate lawyer in Perth, he was a partner at Deacons
and led the business unit leader for the Perth
Corporate group.
Mr La Ferla’s areas of practice include corporate
governance and advice, capital raising and mergers
and acquisitions. He acts for a wide range of clients
including listed public companies, stockbroking houses,
venture capital funds and large unlisted public and
private companies.
Giuliano Sala Tenna BCom, FFIN, GAICD.
(Non-executive Director)
Mr Sala Tenna was appointed to the Board on
19 September 2005.
Mr Sala Tenna has worked in the Finance Industry
for over 10 years in various fields and is currently the
National Manager – Institutional Sales with HFA Asset
Management, an Australian based fund of hedge
fund manager with over $3.8 billion assets under
management.
06
KATANA CAPITAL LTD 2008 ANNUAL REPORT
DIRECTORS’ REPORT
Mr Sala Tenna has completed a Bachelor of Commerce
degree at Curtin University of Technology with a double
major in Economics and Finance graduating with
Distinctions, the Graduate Diploma in Financial Planning
at the Financial Services Institute of Australasia, the
Company Directors Course at the Australian Institute of
Company Directors and is an ASX Derivatives Accredited
Adviser.
Mr Sala Tenna is a Member of the Golden Key National
Honour Society, a Graduate Member of the Australian
Institute of Company Directors and a Fellow of the
Financial Services Institute of Australasia.
COMPANY SECRETARY
Mr Chiappini has been Company Secretary since
14 November 2005. Mr Chiappini has worked in Chief
Financial Officer and Company Secretarial roles in both
local and international environments and also holds the
position of Company Secretary with several ASX listed
and unlisted companies. Mr Chiappini has experience
in diverse and varied industry sectors including
the following, Investment Banking (UK), Property
Development & Investment (UK), Telecommunications
(Australia) and Biotechnology (Australia).
DIRECTORS’ MEETINGS
The numbers of meetings of the Company’s Board of
Directors and of each Board Committee held during the
year ended 30 June 2008, and the numbers of meetings
attended by each director were:
Committee membership
As at the date of this report the Company had an Audit
and Risk Management Committee.
Members acting on the Audit and Risk Management
Committee of the Board at the date of this report are:
• Peter Wallace (Chairman of Committee)
• Dalton Gooding
• Giuliano Sala Tenna
Members acting on the Compliance Committee of the
Board at the date of this report are:
• Derek La Ferla (Chairman of Committee)
• Peter Wallace
• Gabriel Chiappini (Company Secretary)
EARNINGS PER SHARE
(a) Basic earnings per share
Profit from continuing operations
attributable to the ordinary
equity holders of the company
(b) Diluted earnings per share
Profit from continuing operations
attributable to the ordinary
equity holders of the company
30 June
2008
Cents
30 June
2007
Cents
(6.64)
30.38
(6.64)
28.6
The weighted average number of ordinary shares on
issue used in the calculation of basic earnings per share
was 41,684,400 (2007: 24,722,986).
Directors’
Meetings
Audit & Risk
Management
Compliance
A
6
6
4
5
B
6
6
6
6
A
1
2
0
2
B
2
2
0
2
A
0
2
2
0
B
0
2
2
0
Dalton Gooding
Peter Wallace
Derek La Ferla
Giuliano Sala Tenna
A = Number of meetings attended
B = Number of meetings held during the time the director held office or was a member of the committee during the year
KATANA CAPITAL LTD 2008 ANNUAL REPORT
07
DIVIDENDS
OPERATING AND FINANCIAL REVIEW
The following dividends have been paid by the
Company or declared by the directors since the
commencement of the financial year ended 30 June
2008:
30 June
2008
$
30 June
2007
$
Final ordinary dividend for
the year ended 30 June 2007
of 2.5 cents (2007 – 1.5 cents)
per fully paid share paid on
19 September 2007
Interim ordinary dividend for
the year ended 30 June 2008
of 2 cents (2007 – 2.0 cents
interim & 2 cents special)
per fully paid share paid on
30 April 2008
1,042,120 321,000
833,680 1,480,974
1,875,800 1,801,974
CORPORATE INFORMATION
The Company was incorporated on 19 September 2005.
During the 30 June 2007 financial year it incorporated a
wholly owned subsidiary Kapital Investments (WA) Pty Ltd.
Katana Capital Limited is incorporated and domiciled in
Australia.
The registered office is located at 2 The Esplanade,
Perth, WA 6000, Australia.
Principal activity
The principle activity of the Company is that of an
Investment Company with an ‘all opportunities’
investment strategy.
Employees
As at 30 June 2008 the Company did not have any full
time employees.
Company overview
Katana Capital was incorporated in September 2005
with the aim of combining its listed investment structure
with the proven ability of Classic Capital Limited (its
“Fund Manager”) to provide investors with access
to comprehensive investment techniques aimed at
providing strong capital and income returns.
The Fund Manager is disappointed with the
performance of the portfolio, with an investment loss
totalling approximately $3.30m. The majority of these
returns were generated from the downturn in equity
holdings.
In percentage returns, the portfolio yielded a gross
investment return of -6.41% before operating
expenses and tax. This compared favourably to the
Company’s stated benchmark – the All Ordinaries index
– which returned -15.49% over the same period.
Operating results for the year
The loss before tax for the year was $4,438,000 (2007:
$10,538,992 profit) and loss after tax for the year was
$2,766,949 (2007: $7,510,531 profit).
Operating costs for the year were kept to a minimum,
with administration costs (exclusive of Fund Manager’s
fee) coming in at 1.28% of funds under management
(2007: 1.03%).
Investments for future performance
The current credit crisis will continue to weigh on
global equity markets as investment banks around
the world grapple with further write-downs and the
recapitalisation of balance sheets. Significantly, the
US is establishing a facility to inject much needed
liquidity into the banking system; has ‘nationalised’
key financial institutions such as Freddie Mac, Fannie
Mae and AIG, which were carrying large, low-quality
debt; and reduced interest rates. Many countries have
implemented strategies to limit aggressive short selling
and although equity markets are likely to remain
volatile over the coming months, there is good reason
to believe, based on history that the bulk of the falls in
equity markets have now occurred.
08
KATANA CAPITAL LTD 2008 ANNUAL REPORT
DIRECTORS’ REPORT
The Manager’s preferred investment themes currently
include energy, (via thermal coal, liquefied natural gas,
oil and uranium), soft commodities such as wheat/
grains, beef, wood pulp etc. and industrial stocks that
have strong cash flows, pricing power and robust
business models.
Capital structure
There were no listed options converted into fully paid
ordinary shares during the year.
Cash from operations
Net cash outflows used in operations was $5,399,084
during the year which reflects the Company’s
investment into the Australian equities market.
Net cash flows for the financial year ending 30 June
2009 are expected to increase subject to the Company
continuing to take advantage of opportunities within
the Australian equities market and the general
performance of the market.
Liquidity and funding
The Company foresees no need to raise additional
equity and will use its remaining cash reserves to invest
into the Australian equities market.
Risk management
The Board is responsible for overseeing the
establishment and implementation of an effective risk
management system and reviewing and monitoring the
Company’s application of that system.
Implementation of the risk management system and
day-to-day management of risk is the responsibility of
the Board, with the assistance from the Fund Manager
as required. The Board together with the Fund Manager
is responsible for all matters associated with risk
management.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
There were no significant changes in the state of affairs
of the Company during the financial year.
SIGNIFICANT CHANGES AFTER
BALANCE DATE
A final dividend for the 30 June 2008 financial year
has not been declared by the Company. The Directors
note that there has been a substantial correction in the
markets in which the Company invests between the
balance sheet date and the date of this report. Changes
in the value of the Company’s investments are reflected
in the Company’s Net Tangible Asset Backing per share
which is reported to the Australian Securities Exchange
(ASX) monthly and is available via the ASX website.
The Directors are not aware of any other matter or
circumstance that has arisen since 30 June 2008 that
has significantly affected, or may significantly affect:
(a) the Company’s operations in future financial
years, or
(b) the results of those operations in future financial
years, or
(c) the Company’s state of affairs in future financial
years.
LIKELY DEVELOPMENTS AND EXPECTED
RESULTS
The Company continues to focus on implementing its
investment strategy in accordance with the Investment
Mandate pursuant to the Classic Capital Limited
agreement:
• achieve a pre tax return which outperforms the ASX
All Ordinaries Index; and
• preserve the capital invested.
ENVIRONMENTAL REGULATION AND
PERFORMANCE
The principal activities of the Company are not
subject to any particular or significant environmental
regulations.
KATANA CAPITAL LTD 2008 ANNUAL REPORT
09
SHARE OPTIONS
Unissued shares
There were1,000,000 unlisted options as at the date of
this report expiring 19 December 2009 with an exercise
price of $1.10. These options were issued to the
directors of the Company as approved by shareholders
at the Annual General Meeting in November 2006.
Option holders do not have any right, by virtue of
the option, to participate in any share issue of the
Company.
Shares issued on the exercise of options
There were no options exercised during the financial
year to acquire fully paid ordinary shares in the
Company.
REMUNERATION REPORT (AUDITED)
This remuneration report outlines the director
and executive remuneration arrangements of the
Company in accordance with the requirements of the
Corporations Act 2001 and its Regulations. For the
purposes of this report, key management personnel
(KMP) of the Company are defined as those persons
having authority and responsibility for planning,
directing and controlling the major activities of the
Company, directly or indirectly, including any director
(whether executive or otherwise) and includes the
five executives in the Company receiving the highest
remuneration.
This report outlines the remuneration arrangements
inplace for directors of Katana Capital. Katana Capital
at this early stage of its development does not employ
executive directors and does not have a Managing
Director or a Chief Executive Officer. The Company
has outsourced the management of the investment
portfolio to the Fund Manager, Classic Capital Ltd.
Classic Capital Ltd reports directly to the Board and
is invited to attend all Board meetings to present its
investment strategy and to discuss and review the
financial performance of the Company.
(a) Details of Key Management Personnel
The following persons were directors of Katana Capital
Limited during the financial year:
(i) Chairman – non-executive
Dalton Leslie Gooding
(ii) Non-executive directors
Peter Wallace
Derek La Ferla
Giuliano Sala Tenna
(b) Other key management personnel
In addition to the Directors and Officer noted above,
Classic Capital Pty Limited, the Fund Manager for the
Group, is considered to be Key Management Personnel
with the authority for the strategic direction and
management of the investments of the Group. The
directors of Classic Capital Pty Limited are Brad Shallard
and Romano Sala Tenna.
Officer
The company secretary is not considered to be a key
management person as he does not have the authority
and responsibility for planning, directing or controlling
the activities of the Company and is not involved in the
decision making process, with his main duties being
aligned to his compliance function.
Remuneration philosophy
The performance of the Company depends upon the
quality of its directors. To prosper, the Company must
attract, motivate and retain skilled non-executive
directors.
The remuneration policy is not linked to company
performance.
Remuneration committee
The Company does not have a remuneration
committee. The Board of Directors acts as the
Remuneration Committee and is responsible
for determining and reviewing compensation
arrangements for the Company. The Board will assess
the appropriateness of the nature and amount of
emoluments of such officers on a periodic basis, by
reference to relevant employment market conditions
with the overall objective of ensuring maximum
stakeholder benefit from the retention of a high quality
board.
Remuneration structure
In accordance with best practice corporate governance,
the structure of non-executive director and senior
management remuneration is separate and distinct.
0
KATANA CAPITAL LTD 2008 ANNUAL REPORT
DIRECTORS’ REPORT
(i) Non-executive director remuneration
Objective
The Board seeks to set aggregate remuneration at a
level which provides the Company with the ability to
attract and retain directors of the highest calibre, whilst
incurring a cost which is acceptable to shareholders.
Structure
The constitution and the ASX listing rules specify that
the aggregate remuneration of non-executive directors
shall be determined from time to time by a general
meeting. An amount not exceeding the amount
determined is then divided between the directors
as agreed. At present the aggregate remuneration
totals $200,000 per year in respect of fees payable to
non-executive directors. This amount was approved by
shareholders at the annual general meeting held on the
10 November 2005.
The amount of aggregate remuneration, including the
issue of options sought to be approved by shareholders
and the manner in which it is apportioned amongst
directors, is reviewed annually. The Board considers
advice from external consultants as well as the fees paid
to non-executive directors of comparable companies
when undertaking the annual review process.
There are no performance conditions attached to
the options issued as the options are considered to
form part of the directors’ remuneration package and
have been issued to attract and retain quality board
members. The Board considers that the majority of the
Company’s performance lies with the fund manager.
Each director receives a fee for being a director of
the Company and includes attendance at Board and
Committee meetings. Any additional services provided
are charged at a daily rate agreed in advance by the
Chairman.
The remuneration of non-executive directors for the
year ended 30 June 2008 is detailed in Table 1 of this
report.
(ii) Officer remuneration
The company secretary is considered to be an officer
of the Company, the Board seeks to set aggregate
remuneration at a level which provides the Company
with the ability to attract and retain the company
secretary, whilst incurring a cost which is acceptable to
shareholders. The fees paid to the company secretary
for normal services is based on a fixed monthly
remuneration. Fees remunerated outside of the
company secretary’s normal services are remunerated on
an hourly basis and approved by the Board.
(iii) Senior manager and executive director
remuneration
As previously noted the Company at present does not
employ any executive directors or senior management.
If the Company chooses in the future to employ
executive directors the Company will review the
remuneration packages.
Employment contracts
As noted above the Company does not currently
employ any executive directors or senior management,
it does however have an agreement in place with
Classic Capital Ltd to provide the Company with
investment management services.
Compensation by other Key Management
Personnel
No amount is paid by the Group directly to the
Directors of Classic Capital Pty Limited. Consequently,
no compensation as defined in AASB 124 ‘Related
Party Disclosures’ is paid by the Group to the Directors
of Classic Capital Pty Limited as Key Management
Personnel.
Compensation is paid to the Fund Manager in the form
of fees and the significant terms of the agreement and
amount of compensation is disclosed below.
The Company has entered into the Management
Agreement with the Fund Manager with respect to the
management of the Portfolio. The main provisions of
the Management Agreement are summarised below.
The Management Agreement is for an initial period
of 10 years from its commencement date (Initial Term)
unless earlier terminated in accordance with its terms.
KATANA CAPITAL LTD 2008 ANNUAL REPORT
The commencement date (Commencement Date) is the
date on which the company listed on the Australian
Stock Exchange 23 December 2005.
(2) the Fund Manager’s AFSL is suspended or cancelled
at any time for any reason;
The Management Agreement will renew for a further
period of 10 years on expiry of the Initial Term if the
following conditions are satisfied:
(1) the Shareholders of the Company approve such
renewal by ordinary resolution;
(2) the Fund Manager is not in breach of the
Management Agreement; and
(3) the Fund Manager has not in the
reasonable opinion of the Board materially breached
the management Agreement during the Initial Term.
The Fund Manager may terminate the Management
Agreement at any time by providing a written notice at
least three months prior to termination, if:
(1) at any time during the term:
(a) the Company fails to make payment of
the remuneration in accordance with the
Management Agreement and the failure
continues for 21 days from the delivery of a
written notice by the Fund Manager to the
Company requesting payment;
(b) the Company enters into liquidation (except
voluntary liquidation for the purpose of
reconstruction);
(c) the Company is guilty of any gross default,
(3) the Fund Manager commits a fundamental default
or breach of its obligations under the Management
Agreement or is in breach of any conditions of
its AFSL and such default or breach is not remedied
within 30 days after the Company has notified the
Fund Manager in writing to remedy that default or
breach;
(4) the Fund Manager enters into liquidation
(except voluntary liquidation for the purpose of
reconstruction);
(5) a receiver or receiver and manager is appointed
to the whole or part of the undertaking of the Fund
manager;
(6) a change in control of the Fund manager occurs
without the Fund Manager obtaining at least 30
days prior written consent from the Company;
(7) the Fund Manager is guilty of any gross default,
breach, non-observance or non-performance of
any of the terms and conditions contained in the
Management Agreement;
(8) the Fund Manager fails to remedy a breach of
the Management Agreement within the time period
reasonably specified in a notice from the Company
requiring it to do so;
breach, non-observance or non-performance
of any of the terms of and conditions contained
in the Management Agreement; or
(9)
(d) a receiver or receiver and manager is appointed
to the whole or part of the undertakings of the
Company; and
the Fund Manager persistently fails to ensure that
investments made on behalf of the Company are
consistent with the investment strategy applicable
to the Company at the time the relevant
investment is made; or
(2) such notice is given not less than two years after the
(10) the Fund Manager is not lawfully able to continue
commencement of the Initial Term.
The Company may immediately terminate the
Management Agreement if:
(1) the Fund Manager or any of its directors or servants
are found guilty of grave misconduct in relation to
the affairs of the Company;
to provide services to the Company pursuant to
the terms of the Management Agreement.
The Company may, by written notice to the Fund
Manager at any time within six months after the end
of any five year period during the term, terminate
the Management Agreement if Shareholders pass an
ordinary resolution to terminate and the average
2
KATANA CAPITAL LTD 2008 ANNUAL REPORT
DIRECTORS’ REPORT
Portfolio return for the five 12 month periods
comprising the relevant five year period is less than the
average percentage increase in the ASX All Ordinaries
Index for those five 12 month periods.
2008 was $652,461 (2007: $405,214). The Directors
and shareholders of Classic Capital Pty Ltd are also
shareholders in Katana Capital Limited.
The Board on a regular basis reviews the Management
Agreement and Mandate to ensure compliance with the
terms of the agreement.
Management and performance fees
(1) Management fee
The Fund Manager will receive a monthly management
fee equal to 0.104167% of the Portfolio value
calculated at the end of each month. The fee for
(2) Performance fee
Performance fee to be paid in respect of each
performance calculation period of 18.5% of the
amount by which the Fund Manager outperforms
the ASX All Ordinaries during the calculation period
(calculated annually for the 12 month period ending 30
June). The fee for 2008 was $nil (2007: $1,125,707).
Table 1: Directors’ & officers remuneration for the period ended 30 June 2008
2008
Short-term benefits
Post
Employ-
ment
Long-
Term
Benefits
Share-
based
Payments
Salary &
Fees
$
Super-
Other Cash STI annuation
$
$
$
Termin-
ation
Benefits
$
Options
$
Total
$
Name
% of
Remuneration
Performance
based
$
Non-executive directors
Dalton Leslie Gooding
71,499
Peter Wallace
Derek La Ferla
Giuliano Sala Tenna
Sub total non-
37,500
37,500
37,500
executive directors
183,999
Other key management
personnel (Group)
Gabriel Chiappini
86,166
Total key management
personnel
compensation (Group) 270,165
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,850
3,375
3,375
3,375
15,975
-
15,975
-
-
-
-
-
-
-
-
-
-
-
-
-
-
77,349
40,875
40,875
40,875
199,974
86,166
286,140
-
-
-
-
-
-
-
KATANA CAPITAL LTD 2008 ANNUAL REPORT
3
2007
Short-term benefits
Post
Employ-
ment
Long-
Term
Benefits
Share-
based
Payments
Salary &
Fees
$
Super-
Other Cash STI annuation
$
$
$
Termin-
ation
Benefits
$
Name
Non-executive directors
Dalton Leslie Gooding
Peter Wallace
Derek La Ferla
Giuliano Sala Tenna
50,000
30,000
30,000
30,000
Sub-total non-
executive directors
140,000
Other key management
personnel (Group)
Gabriel Chiappini
68,045
Total key management
personnel compensation 208,045
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,500
2,700
2,700
2,700
12,600
-
12,600
-
-
-
-
-
-
-
Options
$
Total
$
25,275
25,275
25,275
25,275
79,775
57,975
57,975
57,975
101,100
253,700
-
68,045
101,100
321,745
% of
Remuneration
Performance
based
$
-
-
-
-
-
-
-
Options
There were 1,000,000 options issued to directors as
part of their remuneration package as approved by
shareholders at the Annual General Meeting held in
November 2006.
As at the date of this report, the interest of the directors
in the shares and options of the Company were:
Name
Directors of Katana Capital Limited
Dalton Leslie Gooding
Peter Wallace
Derek La Ferla
Giuliano Sala Tenna
% remuneration
consisting of options
Number of
Number of
options over
ordinary shares ordinary shares*
2008
2007
100,000
300,000
100,000
100,000
250,000
250,000
250,000
250,000
32
44
44
44
* Options were issued in December 2006 following approval at the shareholders Annual General Meeting held on 30 November 2006. The options
are unlisted and have an exercise price of $1.10 and expire on 19 December 2009. Options were fully vested when issued.
No options were exercised during the period.
4
KATANA CAPITAL LTD 2008 ANNUAL REPORT
DIRECTORS’ REPORT
INDEMNIFICATION OF DIRECTORS AND
OFFICERS
NON-AUDIT SERVICES
Ernst & Young did not receive any amounts for the
provision of non-audit services.
Signed for an on behalf of the Directors in accordance
with a resolution of the Board.
Dalton Gooding
Chairman
29 September 2008
Perth, Western Australia
The Company has, during the financial period, entered
into deeds of access and indemnity with each Director.
These deeds provide access to documentation and
indemnification against liability for loss suffered, as a
result of any act or omission, to the extent permitted
by the Corporations Act 2001, from conduct of the
consolidated entity’s business.
During the financial year, the Company has paid
premiums in respect of a contract insuring all the
Directors of the Company against costs incurred in
defending proceedings except for conduct involving:
• a wilful breach of duty; or
• a contravention of sections 182 or 183 of the
Corporations Act 2001, as permitted by section
199B of the Corporations Act 2001
The total amount of insurance contract premiums paid
was $39,760. This amount has not been included in
Directors and Executives remuneration.
AUDITOR INDEPENDENCE AND
NON-AUDIT SERVICES
The Directors have obtained an independence
declaration from the Company’s auditors Ernst & Young
as presented on page 15 of this Annual Report.
KATANA CAPITAL LTD 2008 ANNUAL REPORT
5
AUDITOR’S
INDEPENDENCE
DECLARATION
6
KATANA CAPITAL LTD 2008 ANNUAL REPORT
INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2008
Investment Income
Dividends
Interest
Investment income/(loss)
Total investment income
Expenses
Fund manager’s fees
Legal and professional
Directors’ fees and expenses
Administration
Impairment of intercompany receivable
Interest expense
Total expenses
NOTE
CONSOLIDATED
2007
$
2008
$
PARENT ENTITY
2007
$
2008
$
1,251,718
415,168
658,339
386,597
(4,912,211) 11,559,874
(3,245,325) 12,604,810
1,214,193
401,823
658,339
379,817
(4,181,844) 11,286,914
(2,565,828) 12,325,070
3
(652,461) (1,530,921)
(114,567)
(115,930)
(258,696)
(242,392)
(158,228)
(180,718)
-
-
(3,406)
(1,174)
(1,192,675) (2,065,818)
(652,461) (1,530,921)
(113,715)
(112,748)
(258,696)
(242,392)
(157,258)
(180,718)
-
(414,778)
(3,406)
(1,174)
(1,604,271) (2,063,996)
Profit/(loss) before income tax
(4,438,000) 10,538,992
(4,170,099) 10,261,074
Income tax expense/(benefit)
Profit/(loss) from continuing operations
4
1,671,051 (3,028,461)
(2,766,949) 7,510,531
1,601,684 (2,945,086)
(2,568,415) 7,315,988
Profit/(loss)for the year attributable to
members of Katana Capital Limited
(2,766,949) 7,510,531
(2,568,415) 7,315,988
Earnings per share for profit attributable
to the ordinary equity holders of the
company:
Basic earnings per share
Diluted earnings per share
Cents
Cents
23
23
(6.64)
30.38
(6.64)
28.56
The above income statements should be read in conjunction with the accompanying notes.
KATANA CAPITAL LTD 2008 ANNUAL REPORT
7
BALANCE SHEET
FOR THE YEAR ENDED 30 JUNE 2008
NOTE
CONSOLIDATED
2007
2008
$
$
PARENT ENTITY
2007
$
2008
$
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Investments – held for trading
Current tax receivables
Other assets
Total current assets
Non-current assets
Investments
Receivables
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Financial liabilities
Interest bearing liabilities
Dividends payable
Income tax liability
Total current liabilities
Non-current liabilities
Deferred tax liability
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Issued capital
Option premium reserve
Retained earnings
5
6
7
8
11
9
12
13
14
282,582
5,851,873 13,240,092
404,065
38,627,420 38,083,334
-
26,903
44,882,622 51,754,394
78,620
42,127
282,582
5,604,607 13,193,741
404,065
38,627,420 37,371,974
-
25,844
44,635,356 50,995,624
78,620
42,127
-
-
-
-
-
-
120
251,259
251,379
120
480,733
480,853
44,882,622 51,754,394
44,886,735 51,476,477
1,404,243 1,314,548
53,895
10,121
120,204
470,395
1,411,112 1,969,163
-
-
6,869
-
1,404,243 1,314,548
53,895
10,121
120,204
456,267
1,411,112 1,955,035
-
-
6,869
-
15
1,085,954 2,756,926
1,085,954 2,756,926
1,086,076 2,687,680
1,086,076 2,687,680
2,497,066 4,726,089
2,497,188 4,642,715
42,385,556 47,028,305
42,389,547 46,833,762
16
17
40,158,270 40,158,270
101,100
2,126,186 6,768,935
101,100
40,158,270 40,158,270
101,100
2,130,177 6,574,392
101,100
Total equity
42,385,556 47,028,305
42,389,547 46,833,762
The above balance sheets should be read in conjunction with the accompanying notes.
8
KATANA CAPITAL LTD 2008 ANNUAL REPORT
STATEMENT OF
CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2008
CONSOLIDATED
Balance at 1 July 2006
Profit/(loss) for year
Total recognised income and expense
for the year
Dividends provided for or paid
Conversion of $0.95 options into fully paid
ordinary shares
Share-based payments
Balance at 30 June 2007
CONSOLIDATED
Balance at 1 July 2007
Profit /(loss)for year
Total recognised income and expense
for the year
NOTE
ISSUED
CAPITAL
$
$
OPTION
PREMIUM
RESERVE
$
RETAINED
EARNINGS
TOTAL
EQUITY
$
$
20,887,710
-
-
-
27
-
-
-
-
1,060,378 21,948,088
7,510,531
7,510,531
7,510,531
7,510,531
(1,801,974)
(1,801,974)
19,270,560
-
40,158,270
-
101,100
101,100
- 19,270,560
101,100
-
6,768,935 47,028,305
40,158,270
-
101,100
-
6,768,935 47,028,305
(2,766,949)
(2,766,949)
-
-
(2,766,949) (2,766,949)
Dividends provided for or paid
Balance at 30 June 2008
27
-
40,158,270
-
101,100
(1,875,800)
(1,875,800)
2,126,186 42,385,556
PARENT
Balance at 1 July 2006
Profit/(loss) for year
Total recognised income and expense for the year
20,887,710
-
-
27
-
-
-
-
-
1,060,378 21,948,088
7,315,988
7,315,988
7,315,988
7,315,988
(1,801,974)
(1,801,974)
Dividends provided for or paid
Conversion of $0.95 options into fully
paid ordinary shares
Share-based payments
Balance at 30 June 2007
19,270,560
-
40,158,270
-
101,100
101,100
- 19,270,560
101,100
-
6,574,392 46,833,762
PARENT
Balance at 1 July 2007
Profit /(loss)for year
Total interest recognised and expense for the year
40,158,270
-
-
101,100
-
-
6,574,392 46,833,762
(2,568,415)
(2,568,415)
(2,568,415) (2,568,415)
Dividends provided for or paid
Balance at 30 June 2008
27
-
40,158,270
-
101,100
(1,875,800)
(1,875,800)
2,130,177 42,389,547
The above statements of changes in equity should be read in conjunction with the accompanying notes.
KATANA CAPITAL LTD 2008 ANNUAL REPORT
9
CASHFLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE 2008
NOTE
CONSOLIDATED
2007
2008
$
$
PARENT ENTITY
2007
$
2008
$
Cash flows from operating activities
Proceeds on sale of financial assets
24,387,886 15,570,278
24,387,886 15,178,679
Payments for purchases of financial assets
(28,577,244) (28,846,925)
(28,558,239) (28,016,925)
Payments to suppliers and employees
(2,297,452)
(789,535)
(2,480,631)
(786,654)
Interest received
Dividends received
Interest paid
Taxes paid
Net cash (outflow) inflow from
operating activities
Cash flows from investing activities
Investment in subsidiary
Loan provided to subsidiary
Net cash (outflow) inflow from
investing activities
Cash flows from financing activities
Proceeds from issues of shares
Dividends paid
Proceeds from/(repayments of) borrowings
Net cash inflow (outflow) from
financing activities
Net increase (decrease) in cash and
cash equivalents
Cash and cash equivalents at the beginning
of the financial year
415,168
386,597
401,823
379,817
1,242,943
658,339
1,205,418
658,339
(1,174)
(3,406)
(1,174)
(3,406)
(569,211)
(37,692)
(555,082)
(37,692)
20
(5,399,084) (13,062,344)
(5,599,999) (12,627,842)
-
-
-
-
-
-
-
-
-
(120)
(480,733)
(480,853)
- 19,270,560
- 19,270,560
(1,989,135)
(1,681,771)
(1,989,135) (1,681,771)
-
(2,210)
-
(2,210)
(1,989,135) 17,586,579
(1,989,135) 17,586,579
(7,388,219)
4,524,235
(7,589,134) 4,477,884
13,240,092
8,715,857
13,193,741 8,715,857
Cash and cash equivalents at end of year
5
5,851,873 13,240,092
5,604,607 13,193,741
The above cash flow statements should be read in conjunction with the accompanying notes.
20
KATANA CAPITAL LTD 2008 ANNUAL REPORT
NOTES TO THE
FINANCIAL STATEMENTS
30 JUNE 2008
1 Corporate Information
The financial report of Katana Capital Limited (“the Company”) for the year ended 30 June 2008 was authorised for
issue in accordance with a resolution of the directors on 29 September 2008.
The Company was incorporated on 19 September 2005. In July 2006 it incorporated a wholly owned subsidiary
– Kapital Investments (WA) Pty Ltd.
Katana Capital Limited is a company limited by shares, incorporated and domiciled in Australia and whose shares are
publicly traded on the Australian Stock Exchange.
The nature of the operations and principle activities are described in the Directors’ Report.
2 Summary of Significant Accounting Policies
(a) Basis of preparation
The financial report is a general purpose financial report, which has been prepared in accordance with the
requirements of the Corporations Act 2001 and other authoritative pronouncements of the Australian Accounting
Standards Board. The financial report has also been prepared on a historical cost basis except for the investments
held for trading and derivative financial instruments, which have been measured at fair value.
The principal accounting policies adopted in the preparation of the financial report are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated. The financial report includes
separate financial statements for Katana Capital Limited as an individual entity and the consolidated entity consisting
of Katana Capital Limited and its subsidiaries.
The financial report is presented in Australian dollars.
(b) Statement of compliance
The financial report complies with Australian Accounting Standards and International Financial Reporting Standards
(“IFRS”) as adopted by the International Accounting Standards Board.
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting
Standards Board (the “AASB”) that are relevant to the operations of the Group and effective for reporting periods
beginning on or after 1 July 2007. The adoption of these standards give rise to additional disclosure which did not
have a material effect on the financial statements of the Group.
The Group has adopted AASB 7 Financial Instruments: Disclosures and all consequential amendments which
became applicable on 1 July 2007. The adoption of this standard has only affected the disclosure in these financial
statements. There has been no affect on profit or loss or the financial position of the Group.
During the period, a number of Australian Accounting Standards and Interpretations have been issued or amended
but are not yet effective. These have not been adopted by the Group for the annual reporting period ending 30 June
2008. The impact of these new or amended Accounting Standards is not expected to give rise to material changes in
the Group’s financial statements.
(c) Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of the subsidiary of Katana Capital
Limited as at 30 June 2008 and the results of the subsidiary for the year then ended. Katana Capital Limited and its
subsidiary together are referred to in this financial report as the “Company” or the consolidated entity.
KATANA CAPITAL LTD 2008 ANNUAL REPORT
2
The subsidiary is the entity (including a special purpose entity) over which the Company has the power to govern the
financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights.
The existence and effect of potential voting rights that are currently exercisable or convertible are considered when
assessing whether the Company controls another entity.
The subsidiary is fully consolidated from the date on which control is transferred to the Company. It is de-
consolidated from the date that control ceases.
The financial statements of the subsidiary are prepared for the same reporting period as the parent company using
consistent accounting policies.
(d) Investments and other financial assets
Financial assets are classified as either financial assets held for trading, loans and receivables, held to maturity
investments or available for sale investments, as appropriate.
When financial assets are initially recognised they are recorded at fair value, plus in the case of investments not held
for trading, directly attributable transaction costs. The Fund Manager determines the classification of its financial assets
after initial recognition and when allowed and appropriate, re evaluates this designation at each financial year end.
(i) Financial assets held for trading
After initial recognition investments which are classified as held for trading are measured at fair value, gains and
losses on these investments are recognised in the profit and loss. For financial assets that are actively traded in
organised financial markets, fair value is determined by reference to Stock Exchange quoted market bid prices at the
close of business on the balance sheet date.
For financial assets where there is no quoted market price, fair value is determined by reference to the current market
value of another instrument which is substantially the same or is calculated based on the expected cash flows of the
underlying net asset base of the financial assets. The fair value of options is determined using an appropriate option
pricing model.
Purchases and sales of financial assets that require delivery of assets within the time frame generally established
by regulation or convention in the market place are recognised on the trade date i.e. the date that the Company
commits to purchase the asset.
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed and determinable payments that are not quoted
in an active market. Such assets are carried at amortised cost using the effective interest method.
Amortised cost is calculated by taking into account any discount or premium on acquisition. For financial assets
carried at amortised cost, gains and losses are recognised in the income statement when the financial assets are
derecognised or impaired, as well as through the amortisation process.
(iii) Derecognition of financial assets
A financial asset (or where applicable, a part of a financial asset or part of a group of similar financial assets) is
derecognised when:
•
•
the rights to receive cash flows from the asset have expired;
the company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in
full without material delay to a third party lender under a “pass-through” arrangement; or
22
KATANA CAPITAL LTD 2008 ANNUAL REPORT
NOTES TO THE
FINANCIAL STATEMENTS
30 JUNE 2008
2 Summary of Significant Accounting Policies (continued)
•
the company has transferred its rights to receive cash flows from the asset and either (a) has transferred
substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the
risks and rewards of the asset, but has transferred control of the asset.
(e) Revenue recognition
The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future
economic benefits will flow to the entity and specific criteria have been met for each of the Group’s activities as
described below.
(i) Interest income
Interest income is recognised on an accruals basis using the effective interest method, which is the rate that exactly
discounts estimated future cash flows through the expected life of the financial instrument to the net carrying
amount of the financial instrument. Interest on cash on deposit is recognised in accordance with the terms and
conditions that apply to the deposit.
(ii) Dividends
Dividends are recognised as revenue when the right to receive payment is established.
(f) Income tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based
on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the
deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction
other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or
loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by
the reporting date and are expected to apply when the related deferred income tax asset is realised or the deferred
income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax
bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the
temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax
liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net
basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly
in equity.
KATANA CAPITAL LTD 2008 ANNUAL REPORT
23
(g) Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term deposits with an
original maturity of three months or less.
For the purposes of the Cash Flow Statement, cash and cash equivalents includes deposits held at call with banks or
financial institutions.
(h) Trade and other receivables
Receivables may include amounts for dividends, interest and securities sold where settlement has not yet occurred.
Receivables are recognised and carried at the original invoice amount and interest accrues (using the effective interest
rate method, which is the rate that discounts estimated future cash receipts through the effective life of the financial
instrument) to the net carrying amount of the financial asset. Amounts are generally received within 30 days of being
recorded as receivables.
Collectibility of trade receivables is reviewed on an ongoing basis at an operating unit level. Individual debts that
are known to be uncollectible are written off when identified. An impairment provision is recognised when there is
objective evidence that the Group will not be able to collect the receivable. Financial difficulties of the debtor, default
payments or debts more than 60 days overdue are considered objective evidence of impairment. The amount of the
impairment loss is the receivable carrying amount compared to the present value of estimated future cash flows,
discounted at the original effective interest rate.
(i) Trade and other payables
Liabilities for creditors and other amounts are carried at amortised cost, which is the fair value of the consideration to
be paid in the future for goods and services received, whether or not billed to the Company.
Payables include outstanding settlements on the purchase of investments and distributions payable. The carrying
period is dictated by market conditions and is generally less than 30 days.
(j) Interest bearing loans and borrowings
All loans and borrowings are initially recognised at the fair value of the consideration received less directly
attributable transaction costs.
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using
the effective interest method.
Gains and losses are recognised in profit or loss when the liabilities are derecognised.
(k) Goods and Services Tax (GST)
Incomes, expenses and assets, with the exception of receivables and payables, are recognised net of the amount of
GST, to the extent that GST is recoverable from the Australian Tax Office (ATO). Where GST is not recoverable it is
recognised as part of the cost of the asset or as part of the expense item as applicable.
Reduced input tax credits (RITC) recoverable by the Company from the ATO are recognised as receivables in the
Balance Sheet.
Cash flows are included in the cash flow statement on a gross basis and the GST component of the cash flows
arising from investing and financing activities, which is recoverable from or payable to the taxation authority are
classified as operating cash flows.
24
KATANA CAPITAL LTD 2008 ANNUAL REPORT
NOTES TO THE
FINANCIAL STATEMENTS
30 JUNE 2008
2 Summary of Significant Accounting Policies (continued)
(l) Earnings per share
Basic earnings per share (EPS) is calculated as net profit attributable to shareholders divided by the weighted average
number of units.
Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:
•
•
costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses; and
• other non-discretionary changes in revenues or expenses during the period that would result from the dilution of
potential ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any
bonus element.
(m) Significant accounting judgements, estimates and assumptions
The determination of fair value of unlisted securities requires the application of a discounted cashflow valuation
model. A discounted cashflow model requires that certain judgements and assumptions are made, including an
estimate for the discount rate applied and an estimation of future uncertain cashflows.
The Company determines the fair value of unlisted options using the Black-Scholes formula, taking into account the
terms and conditions upon which the instruments were granted. The Black-Scholes formula requires the estimation
of certain assumptions including the volatility of the underlying shares and an estimation as to the anticipated date at
which the option will be exercised.
(n) Derivative financial instruments
The Company uses derivative financial instruments such as exchanged traded options to manage its risks associated
with share price fluctuations. Such derivative financial instruments are initially recognised at fair value on the date on
which a derivative contract is entered into and are subsequently remeasured to fair value. Derivatives are carried as
assets when their fair value is positive and as liabilities when their fair value is negative.
Any gains or losses arising from changes in the fair value of derivatives are taken directly to net profit or loss
for the year.
Exchange traded options
The Company writes and then trades Exchange Traded Options (‘ETO’s’), the Company’s policy for managing its risk
for ETO’s is to ensure it only writes ETO’s against shares that it physically holds. ETO’s are governed by the Australian
Stock Exchange (“ASX”) and are traded on the ASX.
ETO’s are recognised as liabilities at fair value. Any gains or losses arising from changes in the fair value of ETO’s, are
taken directly to net profit or loss for the year.
(o) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in
equity as a deduction, net of tax, from the proceeds.
(p) Pension benefits
Defined contribution plan
Contributions to superannuation funds are charged to the income statement when due.
KATANA CAPITAL LTD 2008 ANNUAL REPORT
25
3
Investment Income
CONSOLIDATED
PARENT ENTITY
2008
$
2007
$
2008
$
2007
$
Realised gains/(losses) on investments
held for trading
Unrealised gains/(losses) on investments held for trading
Changes in fair value of options
7,157,716
(12,250,427)
114,532
3,920,741
7,888,083
7,225,50 (12,250,427)
114,532
350,179
3,879,141
6,994,140
350,179
Other income
65,968
(4,912,211)
63,454
11,559,874
65,968
63,454
(4,181,844) 11,286,914
4
Income Tax Expense
(a) Income tax expense
Current tax
Deferred tax
Income tax expense is attributable to:
Profit from continuing operations
Aggregate income tax expense
Deferred income tax (benefit) expense included
in income tax expense comprises:
Decrease (increase) in deferred tax assets (note 10)
(Decrease) increase in deferred tax liabilities (note 15)
Other
CONSOLIDATED
PARENT ENTITY
2008
$
2007
$
2008
$
2007
$
-
(1,671,051)
(1,671,051)
487,764
2,540,697
3,028,461
-
(1,601,684)
(1,601,684)
473,635
2,471,451
2,945,086
(1,671,051)
(1,671,051)
3,028,461
3,028,461
(1,601,684)
(1,601,684)
2,945,086
2,945,086
(634,334)
(1,036,638)
(79)
(1,671,051)
6,084
2,532,701
1,912
2,540,697
(634,374)
(967,230)
(80)
(1,601,684)
6,246
2,463,293
1,912
2,471,451
26
KATANA CAPITAL LTD 2008 ANNUAL REPORT
NOTES TO THE
FINANCIAL STATEMENTS
30 JUNE 2008
4
Income Tax Expense (continued)
(b) Numerical reconciliation of income tax expense
CONSOLIDATED
PARENT ENTITY
2008
$
2007
$
2008
$
2007
$
to prima facie tax payable
Profit from continuing operations before
income tax expense
Tax at the Australian tax rate of 30% (2007 – 30%)
Tax effect of amounts which are not deductible
(taxable) in calculating taxable income:
Non-deductible expenses
Franking credits
Franking rebate
Other
Under provision from prior year
(4,438,000)
10,538,992
(4,170,099) 10,261,074
(1,331,400)
3,161,697
(1,251,030)
3,078,322
1,082
146,994
(486,648)
(1,079)
-
30,667
70,455
(234,851)
-
493
1,082
141,170
(470,567)
(22,339)
-
30,667
70,455
(234,851)
-
493
Income tax expense/(benefit)
(1,671,051)
3,028,461
(1,601,684)
2,945,086
(c) Tax consolidation legislation
Katana Capital Limited and its wholly owned Australian controlled entities implemented the tax consolidation
legislation from 1 July 2007. The accounting policy in relation to this legislation is set out in note 2(f).
5 Current Assets – Cash and Cash Equivalents
Bank balances
Short-term bank bills
CONSOLIDATED
2007
2008
PARENT ENITY
2007
2008
$
5,851,873
-
5,851,873
$
3,245,298
9,994,794
13,240,092
$
5,604,607
-
$
3,198,947
9,994,794
5,604,607 13,193,741
There were no short-term bank bills as at 30 June 2008. For 2007, short-term bank bills had an approximate term of
30 days and had been achieving a yield of between 5.95% and 6.44%.
6 Current Assets – Trade and Other Current Receivables
Unsettled trades – listed equities
Dividend receivable
CONSOLIDATED
2007
2008
PARENT ENITY
2007
2008
$
187,982
94,600
282,582
$
318,240
85,825
404,065
$
187,982
94,600
282,582
$
318,240
85,825
404,065
KATANA CAPITAL LTD 2008 ANNUAL REPORT
27
7 Current Assets – Investments
Listed equities – held for trading
Initial public offering applications
2008
$
38,627,420
-
38,627,420
CONSOLIDATED
2007
$
36,290,179
1,793,155
38,083,334
2008
$
PARENT ENITY
2007
$
38,627,420 35,578,819
1,793,155
38,627,420 37,371,974
-
Held for trading investments consist of investments in ordinary shares and therefore have no fixed maturity date
or coupon rate. Fair value is determined by reference to Stock Exchange quoted market bid prices at the close of
business at the balance sheet date.
Other current investments have been measured at cost.
8 Current Assets – Other Current Assets
Prepayments – insurance
GST recoverable
CONSOLIDATED
PARENT ENTITY
2008
$
14,300
27,827
42,127
2007
$
19,351
7,552
26,903
2008
$
14,300
27,827
42,127
2007
$
18,292
7,552
25,844
9 Non-current Assets – Non-current Receivables
Receivable from wholly owned subsidiary
Receivable
Impairment allowance
CONSOLIDATED
PARENT ENTITY
2008
$
2007
$
2008
$
2007
$
-
-
-
-
-
-
666,037
(414,778)
251,259
480,733
-
480,733
The loan is non-interest bearing and has no fixed maturity date or repayments.
10 Non-current Assets – Deferred Tax Assets
The balance comprises temporary differences
attributable to:
Tax losses
Other
Share issue costs
Options
Provisions
Other
Total deferred tax assets
CONSOLIDATED
2007
$
2008
$
PARENT ENTITY
2008
$
2007
$
688,319
-
688,319
-
71,630
-
11,250
67
771,266
107,262
21,536
7,500
634
136,932
71,508
-
11,250
67
771,144
107,262
21,536
7,500
472
136,770
28
KATANA CAPITAL LTD 2008 ANNUAL REPORT
NOTES TO THE
FINANCIAL STATEMENTS
30 JUNE 2008
10 Non-current Assets – Deferred Tax Assets (continued)
Set-off of deferred tax liabilities pursuant
to set-off provisions (note 15)
Net deferred tax assets
Movements – Consolidated
At 1 July 2006
(Charged)/credited to the income statement
At 30 June 2007
At 30 June 2007
(Charged)/credited to the income statement
At 30 June 2008
Movements – Parent Entity
At 1 July 2006
(Charged)/credited to the income statement
At 30 June 2007
At 30 June 2007
(Charged)/credited to the income statement
At 30 June 2008
11 Non-current Assets – Investments
Investment in controlled entity at cost
CONSOLIDATED
PARENT ENTITY
2008
$
2007
$
2008
$
2007
$
(771,266)
-
(136,932)
-
(771,144)
-
(136,770)
-
Tax losses
$
-
-
-
-
688,319
688,319
Tax losses
$
-
-
-
-
688,319
688,319
Share Issue
Costs
$
143,016
(35,754)
107,262
Other
$
-
29,670
29,670
107,262
(35,632)
71,630
29,670
(18,353)
11,317
Share Issue
Costs
$
143,016
(35,754)
107,262
107,262
(35,754)
71,508
Other
$
-
29,508
29,508
29,508
(18,191)
11,317
Total
$
143,016
(6,084)
136,932
136,932
634,334
771,266
Total
$
143,016
(6,246)
136,770
136,770
634,374
771,144
CONSOLIDATED
PARENT ENTITY
2008
$
-
-
2007
$
-
-
2008
$
120
120
2007
$
120
120
The investment in the controlled entity is for 100% of the issued capital of Kapital Investments (WA) Pty Ltd.
KATANA CAPITAL LTD 2008 ANNUAL REPORT
29
12 Current Liabilities – Trade and Other Payables
Unsettled trades – listed equities
Accrual – Classic Capital management fee
Trade creditors
Employee pay as you go tax instalments
CONSOLIDATED
PARENT ENTITY
2008
$
1,202,648
144,186
49,489
7,920
1,404,243
2007
$
-
1,303,082
5,346
6,120
1,314,548
2008
$
1,202,648
144,186
49,489
7,920
1,404,243
2007
$
-
1,303,082
5,346
6,120
1,314,548
13 Current Liabilities – Financial Liabilities
Exchange traded options – at fair value*
CONSOLIDATED
2007
$
53,895
53,895
2008
$
-
-
PARENT ENTITY
2007
$
53,895
53,895
2008
$
-
-
* The Company writes and then trades Exchange Traded Options (ETO’s), the company’s policy for managing its Risk
for ETO’s is to ensure it only writes ETO’s against shares that it physically holds. ETO’s are governed by the Australian
Stock Exchange (ASX) and are traded on the ASX. The ETO’s had an average expiry date of 12 August 2007.
14 Current Liabilities – Interest Bearing Liabilities
Insurance premium funding
CONSOLIDATED
PARENT ENTITY
2008
$
-
-
2007
$
10,121
10,121
2008
$
-
-
2007
$
10,121
10,121
15 Non-current Liabilities – Deferred Tax Liabilities
The balance comprises temporary differences
attributable to:
Deferred tax liabilities
Investments
Dividends receivable
Other
Total deferred tax liabilities
Set-off of deferred tax liabilities pursuant
to Set-off provisions
Net deferred tax liabilities
Opening balance at 1 July
Charged/(credited) to the income statement
Other
CONSOLIDATED
PARENT ENTITY
2008
$
2007
$
2008
$
2007
$
1,828,840
28,380
-
1,857,220
2,853,012
25,747
15,099
2,893,858
1,828,840
28,380
-
1,857,220
2,783,604
25,747
15,099
2,824,450
(771,266)
1,085,954
(136,932)
2,756,926
(771,144)
1,086,076
(136,770)
2,687,680
2,893,858
(1,036,638)
-
1,857,220
218,140
2,540,697
(1,911)
2,893,858
2,824,450
(967,230)
-
1,857,220
218,140
2,471,451
(1,911)
2,824,450
30
KATANA CAPITAL LTD 2008 ANNUAL REPORT
NOTES TO THE
FINANCIAL STATEMENTS
30 JUNE 2008
15 Non-current Liabilities – Deferred Tax Liabilities (continued)
Movements – Consolidated
At 1 July 2006
Charged/(credited) to the income statement
At 30 June 2007
At 30 June 2007
Charged/(credited) to the income statement
At 30 June 2008
Movements – Parent
At 1 July 2006
Charged/(credited) to the income statement
At 30 June 2007
At 30 June 2007
Charged/(credited) to the income statement
At 30 June 2008
16 Issued Capital
Ordinary shares
Fully paid
(a) Movements in ordinary share capital:
Date
1 July 2006 Opening balance
Details
Options converted into fully paid
ordinary shares at $0.95
30 June 2007 Balance
1 July 2007 Opening balance
30 June 2008 Balance
Investments
$
343,733
2,509,279
2,853,012
Other
$
17,424
23,422
40,846
Total
$
361,157
2,532,701
2,893,858
2,853,012
(1,024,172)
1,828,840
40,846
(12,466)
28,380
2,893,858
(1,036,638)
1,857,220
Investments
$
343,733
2,439,871
2,783,604
Other
$
17,424
23,422
40,846
Total
$
361,157
2,463,293
2,824,450
2,783,604
(954,764)
1,828,840
40,846
(12,466)
28,380
2,824,450
(967,230)
1,857,220
PARENT ENTITY
2007
Shares
2008
Shares
PARENT ENTITY
2008
$
2007
$
41,684,800
41,684,800
40,158,270 40,158,270
Number of shares
21,400,000
20,284,800
41,684,800
41,684,800
41,684,800
$
20,887,710
19,270,560
40,158,270
40,158,270
40,158,270
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Effective 1 July 1998 the Corporations legislation abolished the concept of authorised capital and par value shares.
Accordingly, the company does not have authorised capital nor par value in respect of its issued shares.
Equity has been the Company’s only source of funds since incorporation.
KATANA CAPITAL LTD 2008 ANNUAL REPORT
3
30 June 2008
Number of options
30 June 2007
Number of options
1,000,000
21,400,000
-
-
-
(20,284,800)
(1,115,200)
1,000,000
1,000,000
(b) Movements in options:
Details
Date
1 July 2006 &
30 June 2007
Opening balance
Options converted into fully paid
ordinary shares at $0.95
Options expiring 31 May 2007
Options issued to directors pursuant
to the AGM held in November 2006
30 June 2008
Balance
1,000,000
Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company.
(c) Capital management
When managing capital, management’s objective is to ensure the entity continues as a going concern as well as to
maintain optimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain a
capital structure that ensures the lowest cost of capital available to the entity. Management is constantly adjusting
the capital structure to take advantage of favourable costs of capital or high returns on assets.
17 Reserves and Retained Profits
Retained profits
Movements in retained profits were as follows:
Opening retained earnings
Net profit/(loss) after tax attributable
to members of the Company
Dividends paid
Balance 30 June
18 Key Management Personnel Disclosures
(a) Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Share-based payments
2008
$
6,768,935
CONSOLIDATED
2007
$
1,060,378
PARENT ENTITY
2008
$
6,574,392
2007
$
1,060,378
(2,766,949)
(1,875,800)
2,126,186
7,510,531
(1,801,974)
6,768,935
(2,568,415)
(1,875,800)
2,130,177
7,315,988
(1,801,974)
6,574,392
CONSOLIDATED
2007
$
140,000
12,600
101,100
253,700
2008
$
183,999
15,975
-
199,974
PARENT ENTITY
2008
$
183,999
15,975
-
199,974
2007
$
140,000
12,600
101,100
253,700
32
KATANA CAPITAL LTD 2008 ANNUAL REPORT
NOTES TO THE
FINANCIAL STATEMENTS
30 JUNE 2008
18 Key Management Personnel Disclosures (continued)
(b) Equity instrument disclosures relating to key management personnel
(i) Option holdings
2008
Name
Balance at Granted as
start of the
year
compen-
sation
Excercised
Other
changes
Balance at
end of the
year
Vested and
excercisable Unvested
Directors of
Katana Capital Limited
Dalton Leslie Gooding
Peter Wallace
Derek La Ferla
Giuliano Sala Tenna
250,000
250,000
250,000
250,000
Other key management
personnel of the Group
Brad Shallard
Romano Sala Tenna
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
-
-
-
-
-
-
-
-
-
-
2007
Name
Directors of
Katana Capital Limited
Dalton Leslie Gooding
Peter Wallace
Derek La Ferla
Guiliano Sala Tenna
Other key management
personnel of the Group
Brad Shallard
Romano Sala Tenna
Balance at Granted as
start of the
year
compen-
sation
Excercised
Other
changes
Balance at
end of the
year
Vested and
excercisable Unvested
50,000
150,000
50,000
50,000
250,000
250,000
250,000
250,000
(50,000)
(150,000)
(50,000)
(50,000)
-
-
-
-
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
215,000
325,000
-
-
(215,000)
(325,000)
-
-
-
-
-
-
-
-
-
-
-
-
(ii) Share holdings
The numbers of shares in the Company held during the financial year by each director of Katana Capital Limited and
other key management personnel of the Group, including their personally related parties, are set out below.
All equity transactions with key management personnel, other than those arising from the exercise of remuneration
options, have been entered into under terms and conditions no more favourable that those the Group would have
adopted if dealing at arm’s length.
KATANA CAPITAL LTD 2008 ANNUAL REPORT
33
2008
Name
Directors of Katana Capital Limited
Ordinary shares
Dalton Leslie Gooding
Peter Wallace
Derek La Ferla
Giuliano Sala Tenna
Other key management personnel
of the Group
Ordinary shares
Brad Shallard
Romano Sala Tenna
2007
Name
Directors of Katana Capital Limited
Ordinary shares
Dalton Leslie Gooding
Peter Wallace
Derek La Ferla
Giuliano Sala Tenna
Other key management personnel
of the Group
Ordinary shares
Brad Shallard
Romano Sala Tenna
Balance at the
start of the
year
Received during
the year on the
excercise of
options
Balance at
Other changes
during the year
the end of
the year
100,000
300,000
100,000
100,000
580,000
980,000
-
-
-
-
-
-
-
-
-
-
100,000
300,000
100,000
100,000
580,000
980,000
Balance at the
start of the
year
Received during
the year on the
excercise of
options
Other changes
during the year
Balance at
the end of
the year
50,000
150,000
50,000
50,000
50,000
150,000
50,000
50,000
-
-
-
-
100,000
300,000
100,000
100,000
215,000
225,000
215,000
325,000
150,000
430,000
580,000
980,000
(c) Other transactions and balances with key management personnel
There were no transactions or balances with key management personnel other than those disclosed in the
remuneration report of the Director’s Report.
19 Related Party Transactions
(a) Directors
The names of persons who were Directors of the Katana Capital Limited at any time during the financial year and up
to the date of this report are as follows: Mr Dalton Gooding, Mr Derek La Ferla, Mr Giuliano Sala Tenna and Mr Peter
Wallace.
34
KATANA CAPITAL LTD 2008 ANNUAL REPORT
NOTES TO THE
FINANCIAL STATEMENTS
30 JUNE 2008
19 Related Party Transactions (continued)
(b) Related party transactions
Transactions between the Parent Company and related parties noted above during the year are outlined below
(i) Mr Derek La Ferla who was a partner of Deacons law firm during the year and as part of providing corporate
legal services, Deacons received $10,870 (2007: $5,895) for legal services provided.
(ii) Dalton Gooding is a partner of Gooding Pervan Chartered Accounting firm and as part of providing taxation
advisory services, Gooding Pervan received $18,492 (2007: $14,331) for tax services provided.
All related party transactions are made in arms length transactions on normal commercial terms and conditions.
Outstanding balances at period end are unsecured and settlement occurs in cash.
Wholly owned group transactions
Loans from Katana Capital Limited to its wholly owned subsidiary are repayable on demand, unsecured and interest
free, though are not expected to be repaid within the next 12 months. Loan balance to subsidiary at 30 June 2008 is
$251,259 (2007: $480,733).
20 Reconciliation of Profit/(loss) after Income Tax to Net Cash Inflow from
Operating Activities
Profit/(loss) for the year
Impairment of intercompany
Other non-cash items
(Gains)/losses recognised on measurement
to fair value of held for trading investments
Loss recognised on remeasurement to fair value
of exchange trade options
Change in operating assets and liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in financial assets
held for trading
(Increase) decrease in other assets
(Decrease)/increase in trade and other payables
(Decrease)/increase in current tax liabilities
(Decrease)/increase in deferred tax liabilities
Net cash (outflow) inflow from operating activities
21 Financial Risk Management
2008
$
(2,766,949)
-
(53,895)
CONSOLIDATED
2007
$
7,510,531
-
-
PARENT ENTITY
2008
$
(2,568,415)
414,778
(53,895)
2007
$
7,315,988
-
-
12,250,427
(7,225,500)
12,250,427
(6,994,140)
-
70,141
-
71,786
106,259
(345,985)
(80,104)
(353,537)
(12,794,513)
-
79,574
(549,015)
(1,670,972)
(5,399,084)
(16,190,851) (13,505,873) (15,657,542)
-
-
90,859
79,574
429,204
(534,887)
(1,601,604)
2,469,540
(5,599,999) (12,627,842)
-
90,859
489,675
2,538,786
(13,062,344)
The Company’s activities expose it to a variety of financial risks: market risk (including price risk and interest rate risk),
credit risk and liquidity risk.
The Company’s overall risk management programme focuses on ensuring compliance with the Company’s
Investment Mandate and seeks to maximise the returns derived for the level of risk to which the Company is
exposed.
KATANA CAPITAL LTD 2008 ANNUAL REPORT
35
The Company uses derivative financial instruments to alter certain risk exposures. Financial risk management is
carried out by the Investment Manager under policies approved by the Board of Directors (the Board).
The Company uses different methods to measure different types of risk to which it is exposed. These methods
include sensitivity analysis in the case of interest rate, foreign exchange and other price risks and ratings analysis for
credit risk.
Mandate
The Fund Manager must manage the Portfolio in accordance with guidelines for management set out in the
Mandate, which may be amended by written agreement between the Company and the Fund Manager from time to
time. The Mandate provides that the Portfolio will be managed with the following investment objectives:
to achieve a pre tax and pre expense return which outperforms the ASX All Ordinaries Index; and
•
the preservation of capital invested. The Mandate permits the Fund Manager to undertake investments in:
•
(1) listed securities;
(2) rights to subscribe for or convert to listed securities (whether or not such rights are tradeable on a securities
exchange);
(3) any securities which the Fund Manager reasonably expects will be quoted on the ASX within a 24 month
period from the date of investment;
(4) listed securities for the purpose of short selling;
(5) warrants or options to purchase any investment and warrants or options to sell any investment;
(6) discount or purchase of bills of exchange, promissory notes or other negotiable instruments accepted,
drawn or endorsed by any bank or by the Commonwealth of Australia, any State or Territory of Australia,
or by any corporation of at least an investment grade credit rating granted by a recognised credit rating
agency in Australia;
(7) deposits with any bank or corporation declared to be an authorised dealer in the short-term money market;
(8) debentures, unsecured notes, loan stock, bonds, promissory notes, certificates of deposit, interest bearing
accounts, certificates of indebtedness issued by any bank or by the Commonwealth of Australia, any State or
Territory of Australia, or any Australian government authority, or a corporation of at least an investment
grade credit rating granted by a recognised credit rating agency in Australia;
(9) units or other interest in cash management trusts;
(10) underwriting or sub underwriting of securities as and where permitted by relevant laws and regulations and
the Fund Manager’s AFSL; and
(11) any other investment, or investment of a particular kind, approved by the Company in writing as and where
permitted by the Fund manager’s AFSL.
The Mandate specifies the following risk control features:
The Portfolio may comprise securities in up to 80 companies from time to time.
• no investment may represent more than 10.0% of the issued securities of a company at the time of investment.
•
total cumulative gearing on the Portfolio may not exceed 50% of the total value of the net tangible assets of the
Company after tax.
the Fund Manager will adhere to the parameters on a per stock basis as set out in the table below unless the
prior approval of the Board is received to do otherwise.
•
Portfolio composition and management
The aim of the Fund Manager is to build for the Company a portfolio of 20 to 60 companies, with an emphasis
towards holding a larger number of smaller positions. Under the current Mandate, the Company’s Portfolio may vary
from between 0 to 80 securities, depending upon investment opportunities and prevailing market conditions. The
Fund Manager may construct a Portfolio comprising of any combination of cash, investment and debt, subject to the
gearing limits in the Mandate. Under the Mandate, total cumulative gearing on the Portfolio may not exceed 50% of
the total value of the net tangible assets of the Company after tax.
36
KATANA CAPITAL LTD 2008 ANNUAL REPORT
NOTES TO THE
FINANCIAL STATEMENTS
30 JUNE 2008
21 Financial Risk Management (continued)
The capacity to short sell securities, as well as employ debt, is designed to ensure the Fund Manager has flexibility
to implement an absolute return strategy. It should also be noted that, despite the focus on emerging and green
chip companies, in periods of overly negative market or stock sentiment, the best investment opportunities on
a risk return basis are often found in the ASX S&P Index Top 20 and ASX S&P Index Top 100 stocks by market
capitalisation. Often the larger stocks rebound first, hence providing not just safer returns, but quicker returns.
Under the current Mandate, the following parameters will apply to individual investments unless the prior approval of
the Directors is received to do otherwise:
Size of company
Minimum investment
per security
Indicative benchmark
investment per security
Maximum investment
per security
As a percentage of total portfolio
1%
ASX S&P Top 20
1%
ASX S&P Top 100/Cash Hybrids
ASX S&P Top 500
No minimum
Outside of ASX S&P Top 500/Other Instruments No minimum
5%
3%
2%
1%
12.5%
10%
7.5%
5%
Asset allocation
The Fund Manager’s allocation of the Portfolio will be weighted in accordance with various macro economic factors.
These factors will invariably impact the medium and long term Performance of the Company. These factors include:
• global economy;
• Australian economy and positioning within the economic cycle;
•
sectors within the Australian market;
• phase of the interest rate cycle; and
•
state of the property market (eg comparative investment merit).
The Fund Manager may form views on the factors outlined above, and may re weight the Portfolio accordingly.
(a) Market risk
(i) Price risk
The Company is exposed to equity securities and derivative securities price risk. This arises from investments held by
the Company for which prices in the future are uncertain. Where non-monetary financial instruments are
denominated in currencies other than the Australian dollar, the price in the future will also fluctuate because of
changes in foreign exchange rates. Paragraph (ii) below sets out how this component of price risk is managed and
measured. They are classified on the balance sheet as at fair value through profit or loss. All securities investments
present a risk of loss of capital. Except for equities sold short, the maximum risk resulting from financial instruments
is determined by the fair value of the financial instruments. Possible losses from equities sold short can be unlimited.
The Investment Manager mitigates this price risk through diversification and a careful selection of securities and
other financial instruments within specified limits set by the Board. The mandate specifies that following risk control
features:
The Portfolio may comprise securities in up to 80 companies from time to time:
• no investment may represent more than 10.0% of the issued securities of a company at the time of investment
•
total cumulative gearing on the Portfolio may not exceed 50% of the total value of the net tangible assets of the
Company after tax
the Fund Manager will adhere to the parameters on a per stock basis as set out in the table below unless the
prior approval of the Board is received to do otherwise.
•
KATANA CAPITAL LTD 2008 ANNUAL REPORT
37
The aim of the Fund Manager is to build for the Company a portfolio of 20 to 60 companies, with an emphasis
towards holding a larger number of smaller positions. Under the current Mandate, the Company’s Portfolio may vary
from between 0 to 80 securities, depending upon investment opportunities and prevailing market conditions. The
Fund Manager may construct a Portfolio comprising of any combination of cash, investment and debt, subject to the
gearing limits in the Mandate. Under the Mandate, total cumulative gearing on the Portfolio may not exceed 50% of
the total value of the net tangible assets of the Company after tax.
The capacity to short sell securities, as well as employ debt, is designed to ensure the Fund Manager has flexibility
to implement an absolute return strategy. It should also be noted that, despite the focus on emerging and green
chip companies, in periods of overly negative market or stock sentiment, the best investment opportunities on
a risk return basis are often found in the ASX S&P Index Top 20 and ASX S&P Index Top 100 stocks by market
capitalisation. Often the larger stocks rebound first, hence providing not just safer returns, but quicker returns.
The table on page 38 summarises the impact of an increase/decrease of the Australian Securities Exchange All
Ordinaries on the Company’s net assets attributable to shareholders at 30 June 2008. The analysis is based on the
assumptions that the index increased/decreased by 10% (2007 – 10%) with all other variables held constant and
that the fair value of the Company’s portfolio of equity securities and derivatives moved according to the historical
correlation with the index. The impact mainly arises from the possible change in the fair value of listed equities,
unlisted unit trusts and equity derivatives.
(ii) Foreign exchange risk
The Company does not hold any monetary and non-monetary assets denominated in currencies other than the
Australian dollar.
(iii) Interest rate risk
The Company’s interest bearing financial assets expose it to risks associated with the effects of fluctuations in the
prevailing levels of market interest rates on its financial position and cash flows. The risk is measured using sensitivity
analysis.
Compliance with the Company’s policy is reported to the Board on a monthly basis. The Company may also enter
into derivatives financial instruments to mitigate the risk of future interest rate changes.
The table below summarises the Company’s exposure to interest rate risks. It includes the Company’s assets and
liabilities at fair values.
Weighted
Average
Interest
Rate (%pa)
Year ended
Consolidated
30 June
2008
Year ended
Parent
30 June
2007
30 June
2008
30 June
2007
Financial Assets
Cash and short-term deposits – floating
Cash fixed interest rate
Current receivables
Due from brokers – for securities sold
Financial assets held for trading
Non-current receivables
5.58%
-%
-%
-%
-%
-%
5,851,873
-
94,600
187,982
38,627,420
-
44,761,875
5,604,607
-
94,600
187,982
3,245,298
9,994,794
85,825
318,240
38,083,334
-
3,198,947
9,994,794
85,825
318,240
38,627,420 37,389,865
480,733
51,727,491 44,765,868 51,468,404
251,259
38
KATANA CAPITAL LTD 2008 ANNUAL REPORT
NOTES TO THE
FINANCIAL STATEMENTS
30 JUNE 2008
21 Financial Risk Management (continued)
Weighted
Average
Interest
Rate (%pa)
Year ended
Consolidated
30 June
2008
Year ended
Parent
30 June
2007
30 June
2008
30 June
2007
Financial Liabilities
Payables
Due to brokers – payable for securities purchased
Financial liabilities
Interest bearing liabilities
-%
-%
-%
-%
201,595
1,202,648
-
-
1,404,243
1,306,996
-
53,895
10,121
1,371,012
201,595
1,202,648
-
-
1,404,243
1,306,996
-
53,895
10,121
1,371,012
The table below summarises the impact of an increase/decrease of interest rates on the Company’s operating profit
and net assets attributable to shareholders through changes in fair value or changes in future cash flows. The analysis
is based on the assumption that interest rates changed by +/- 50 basis points (2007 – +/- 50 basis points) from the
year end rates with all other variables held constant. The impact mainly arises from changes in the fair value of fixed
interest securities.
(b) Summarised sensitivity analysis
The following table summarises the sensitivity of the Company’s operating profit and equity to interest rate risk and
price risk. The reasonably possible movements in the risk variables have been determined based on management’s
best estimate, having regard to a number of factors, including historical levels of changes in interest rates and
historical correlation of the Company’s investments with the relevant benchmark and market volatility. However,
actual movements in the risk variables may be greater or less than anticipated due to a number of factors, including
unusually large market shocks resulting from changes in the performance of the economies, markets and securities
in which the Company invests. As a result, historic variations in risk variables are not a definitive indicator of future
variations in the risk variables.
30 June 2008
30 June 2007
-10%
Price Risk Interest Rate Risk
-50bps
+10%
Impact on Operating Profit/Equity
(3,862,742)
(3,808,333)
3,862,742
3,808,333
(36,955)
(32,487)
+50bps
36,955
32,487
(c) Credit risk
Credit risk primarily arises from investments in debt securities and from trading derivative products. Other credit
risk arises from cash and cash equivalents, deposits with banks and other financial institutions and amounts due
from brokers. None of these assets are impaired nor past due but not impaired.
As at 30 June 2008 the Company does not hold any debt securities.
The Company does trade in Exchange Traded Options the Investment Manager has established limits such that, at
any time, such that options are not traded without holding the physical security in the portfolio and contracts are
with counterparties included in the Board’s Approved Counterparties list. As at 30 June 2008 the Company did not
hold any Exchange Traded Options.
Compliance with the Company’s policy is reported to the Board on a monthly basis.
The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets.
The majority of cash assets are held with one bank.
KATANA CAPITAL LTD 2008 ANNUAL REPORT
39
(d) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated
with financial instruments. Cash flow interest rate risk is the risk that future cash flows on a financial instrument will
fluctuate because of changes in the market interest rates.
To control liquidity and cash flow interest rate risk, the Company invests in financial instruments which under normal
market conditions are readily convertible to cash. In addition the Company invests within the Mandate guidelines to
ensure that there is no concentration of risk.
The Company does not hold derivatives.
Financial liabilities of the Company comprise trade and other payables, distributions payable to shareholders. Trade
and other payables have no contractual maturities but are typically settled within 30 days.
(e) Fair value estimation
The carrying amounts of financial instruments recorded in the financial statements represent their fair value
determined in accordance with the accounting policies recorded in note 2.
•
Fair value in an active market
The fair value of financial instruments traded in active markets is based on their quoted market prices at balance
sheet date without any deduction for estimated future selling costs. Financial assets are priced at current bid prices,
while financial liabilities are priced at current asking prices.
22 Segment Information
Business segments
The Company operates solely in the financial investment industry.
Geographical segments
The Company operates from one geographic location, being Australia, from where its investing activities are
managed.
23 Earnings Per Share
(a) Basic earnings per share
Profit from continuing operations attributable to the
ordinary equity holders of the company
(b) Diluted earnings per share
Profit from continuing operations attributable to the
ordinary equity holders of the company
30 June
2008
Cents
Year ended
Consolidated
30 June
2007
Cents
(6.64)
30.38
(6.64)
28.56
40
KATANA CAPITAL LTD 2008 ANNUAL REPORT
NOTES TO THE
FINANCIAL STATEMENTS
30 JUNE 2008
23 Earnings Per Share (continued)
(c) Reconciliations of earnings used in calculating
earnings per share
Basic earnings per share
Profit from continuing operations
Profit attributable to the ordinary equity holders of the
company used in calculating basic earnings per share
Diluted earnings per share
Profit attributable to the ordinary equity holders of the
company used in calculating basic earnings per share
Profit attributable to the ordinary equity holders of the
company used in calculating diluted earnings per share
(d) Weighted average number of shares used
as the denominator
30 June
2008
$
Year ended
Consolidated
30 June
2007
$
(2,766,949)
7,510,531
(2,766,949)
7,510,531
(2,766,949)
7,510,531
(2,766,949)
7,510,531
30 June
2008
Number
Year ended
Consolidated
30 June
2007
Number
Weighted average number of ordinary shares used as the
denominator in calculating basic earnings per share
41,684,440
24,722,986
Adjustments for calculation of diluted earnings per share:
Amounts uncalled on partly paid shares and calls in arrears
-
1,571,368
Weighted average number of ordinary shares and potential
ordinary shares used as the denominator in calculating
diluted earnings per share
41,684,440
26,294,354
Basic earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders by
the weighted average number of ordinary shares outstanding during the period.
Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders by
the weighted average number of ordinary shares outstanding during the period plus the weighted average number
of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.
The options outstanding at 30 June 2008, as disclosed in note 16 are not considered dilutive for the year ended 30
June 2008.
The weighted average number of converted and lapsed potential ordinary shares included in diluted earnings per
share calculation is nil for the year ended 30 June 2008 (2007: 1,571,368).
KATANA CAPITAL LTD 2008 ANNUAL REPORT
4
24 Commitments and Contingencies
There are no contingent liabilities or contingent assets as at 30 June 2008 (2007: nil).
Katana Capital Limited has entered into a 10 year Management Agreement with the Fund Manager, Classic Capital
Limited. Under the terms of the contract the Fund Manager the Manager is obliged to manage the investment
portfolio on behalf of Katana Capital Limited. A management fee is payable to the manager as follows:
•
the Fund Manager will receive a monthly management fee equal to 0.104167% of the portfolio value calculated
at the end of the month
• performance fee to be paid in respect of each performance calculation period of 18.5% of the amount by which
the Fund Manager outperforms the ASX All Ordinaries during the calculation period (calculated annually for the
12 month period ending 30 June).
25 Events Occurring after the Balance Sheet Date
A final dividend for the 30 June 2008 financial year has not been declared by the Company. The Directors note that
there has been a substantial correction in the markets in which the Company invests between the balance sheet
date and the date of this report. Changes in the value of the Company’s investments are reflected in the Company’s
Net Tangible Asset Backing per share which is reported to the Australian Securities Exchange (ASX) monthly and is
available via the ASX website.
26 Remuneration of Auditors
(a) Audit services
Ernst & Young Australia
Audit and review of financial reports
Total remuneration for audit services
(b) Non-audit services
Other services
Other services
Total remuneration for non-audit services
CONSOLIDATED
2007
$
2008
$
PARENT ENTITY
2007
$
2008
$
45,500
45,500
37,500
37,500
45,500
45,500
37,500
37,500
-
-
45,500
-
-
37,500
-
-
45,500
-
-
37,500
27 Dividends
(a) Ordinary shares
Final dividend for the year ended 30 June 2007 of
2.5 cents (2006 – 1.5 cents) per fully paid share paid
on 8 November 2007 (2006 – 31 October 2006)
Fully franked (2006 – 31.9% franked) based on
tax paid @ 30% – 2.5 cents (2006 – 1.5 cents) per share
PARENT ENTITY
2007
$
2008
$
1,042,120
321,000
42
KATANA CAPITAL LTD 2008 ANNUAL REPORT
NOTES TO THE
FINANCIAL STATEMENTS
30 JUNE 2008
27 Dividends (continued)
Interim dividend for the year ended 30 June 2008 of
2 cents (2007 – 2 cents interim & 2 cents special) per fully
paid share paid 30 April 2008 (2007 – 14 May 2007)
Fully franked (2007 – 37% franked) based on tax paid @ 30% – 2 cents
(2007 – 2 cents interim & 2 cents special) per share
Total dividends provided for or paid
833,680
1,875,800
1,480,974
1,801,974
PARENT ENTITY
2007
$
2008
$
Dividends paid in cash or satisfied by the issue of shares
under the dividend reinvestment plan during the years ended
30 June 2008 and 2007 were as follows:
Paid in cash
1,875,800
1,875,800
1,801,974
1,801,974
CONSOLIDATED
2007
$
2008
$
PARENT ENTITY
2007
$
2008
$
Franking credit balance
Franking credits available for subsequent financial years
based on a tax rate of 30% (2007: 30%)
249,124
18,441
218,913
17,382
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
(a) franking credits that will arise from the payment of the amount of the current tax liability;
(b) franking debits that will arise from the payment of dividends recognised as a liability at the reporting date;
(c) franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date; and
(d) franking credits that may be prevented from being distributed in subsequent financial years.
In the Directors’ opinion:
(a) the financial statements and notes set out on pages 20 to 42 are in accordance with the Corporations Act 2001,
including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
(ii) giving a true and fair view of the Company’s and consolidated entity’s financial position as at 30 June 2008
and of their performance for the financial year ended on that date; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable; and
(c) the financial statements are in accordance wit hthe provisions of the Company’s Constitution.
The directors have been given the declarations by the chief executive officer and chief financial officer required by
section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
On behalf of the Board Katana Capital Limited
Dalton Gooding, Chairman
29 September 2008
Perth, Western Australia
KATANA CAPITAL LTD 2008 ANNUAL REPORT
43
AUDITORS’ REPORT
44
KATANA CAPITAL LTD 2008 ANNUAL REPORT
AUDITORS’ REPORT
KATANA CAPITAL LTD 2008 ANNUAL REPORT
ADDITIONAL
ASX INFORMATION
DISTRIBUTION OF SHARES and OPTIONS as at 29 August 2008
1-1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
20 LARGEST SHAREHOLDERS as at 25 September 2008
Holder
AUSTRALIAN EXECUTOR TRUSTEES LIMITED
WONDER HOLDINGS PTY LTD
HOPERIDGE ENTERPRISES PTY LTD
ORION EQUITIES LIMITED
MRS LINDA SALA TENNA + MRS LISA SHALLARD
JOVE PTY LTD
COOLAH HOLDINGS PTY LTD
TAXA JUNO NOMINEES PTY LTD
MISS LISA DUPEROUZEL
MR ROMANO SALA TENNA + MRS LINDA SALA TENNA
BLIGH PTY LTD
MR BRAD JOHN SHALLARD + MRS LISA MAREE DUPEROUZEL
MRS LINDA SALA TENNA
CAMBO INVESTMENTS PTY LTD
MR KENNETH CARSON + MR ROBIN GERRARD THYSSEN
KEFIR PTY LTD
LEDGE FINANCE LTD
UNITING CHURCH IN AUSTRALIA PROPERTY TRUST (WA)
MR STEPHEN JAMES LAMBERT + MRS RUTH LYNETTE LAMBERT + MR SIMON LEE LAMBERT
COLLORI PTY LTD
Fully Paid Shares
Distribution of holdings
Number of holders
14
46
172
353
74
659
Fully Paid Shares
%
Shares
2,341,503
2,244,035
2,000,000
1,200,000
1,071,016
1,044,086
1,010,000
850,000
783,064
775,212
640,000
605,569
510,007
500,000
500,000
5.62
5.38
4.8
2.88
2.57
2.5
2.42
2.04
1.88
1.86
1.54
1.45
1.22
1.2
1.2
500,000
1.2
460,000
400,000
18,023,967
1.1
096
43.25
SUBSTANTIAL SHAREHOLDERS
AUSTRALIAN EXECUTOR TRUSTEES LIMITED
WONDER HOLDINGS PTY LTD
Fully Paid
Shares
2,341,503
2,244,035
%
5.62
5.38
Katana Capital Ltd
ABN 56 116 054 301
Level 37, Exchange Plaza
2, The Esplanade
Perth, Western Australia 6000
Telephone: (08) 9326 7672
Facsimile:
(08) 9326 7676
www.katanacapital.com.au