20
annual report
09
Katana Capital will combine its listed investment company structure
with the proven ability of its Manager (“Katana Asset Management
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.
Contents
Welcome Letter from Chairman
Investment 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
Directors’ Declaration
Auditors’ Report
01
02
04
15
17
18
19
20
21
45
46
Corporate Governance Statement
48
ASX additional information
60
Corporate Directory
Katana Capital Limited
ABN 56 116 054 301
Directors
Dalton Gooding
Peter Wallace
Giuliano Sala Tenna
Company Secretary
Gabriel Chiappini
Registered Office
Level 36, Exchange Plaza
2, The Esplanade
Perth, Western Australia 6000
Telephone (08) 9326 7672
(08) 9326 7676
Facsimile
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
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.
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
1
Chairman’s Letter
Dear Shareholder
The Financial Year ended 30 June 2009 was a difficult year for financial service companies with a rolling series of crises having
a major impact on the industry.
The All Ordinaries Index experienced its worst investment returns in over 70 years, with the Index down by 25.97%. Financial
Year 2009 was characterised by the collapse of Lehman Brothers, a severe reduction in liquidity in the global credit markets,
a global decline in equity markets and the worst contraction in global GDP numbers since 1945. These events have since been
referred to as the Global Financial Crisis or GFC.
As these events unfolded, your Company did not escape its effects and experienced a decline in its gross investment returns
of 23.57%. Although this was less of a decline than that of the All Ordinaries Index we do appreciate that many shareholders
would be disappointed in the company’s performance during this time.
The Company reported a Financial Year 2009 after tax loss of $7,711,901 and cash reserves of approximately $7.52m or
23.62% of the total value of the portfolio. The higher than usual cash position provides the Company with significant flexibility
to take advantage of investment opportunities as they continue to present themselves in these volatile markets.
The Company, via its Fund Manager Katana Asset Management, continues to have a focused long-term investment theme in
the Energy and Resources Sector.
Post 30 June 2009 the Company reported, via the ASX Net Tangible Asset (after tax) announcements, an NTA per share
increase from $0.82 to $0.961 (unaudited) As at 30 September 2009. The Company’s cash reserves has also continued to
increase to $9.07m and the unaudited net profit after tax for the first quarter of Financial Year 2010 is $5.445m.
The Company continues to have complete confidence in the Fund Manager concerning the ongoing management of the
investment portfolio and would like to take this opportunity to thank the Fund Manager in what has been an extremely trying
time in the financial markets.
On behalf of the Board of Directors I would also like to thank you for your continued support of the Company throughout this
difficult year.
Yours sincerely
Dalton Gooding
Chairman
2
K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Investment Report
30 June 2009
Katana Asset Management 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 2009.
Performance Summary
The 2008/09 financial year was characterised by a substantial
capitulation of global equity markets as a result of the global
financial crisis and was followed by a partial claw back of the
significant losses. The Manager was disappointed that the
fund posted a negative return despite outperforming the
All Ordinaries Index once again. In percentage terms, the
portfolio yielded a gross investment return of -23.57% before
operating expenses and tax. The Fund’s stated benchmark,
the All Ordinaries index, returned -25.97% over the same
period.
Katana Capital Ltd listed in December 2005 and throughout
the period to 30 June 2009, the Manager has outperformed
the All Ordinaries index in every financial year, producing
an average investment return of 7.25% pa versus -2.30% pa
for the All Ordinaries index. This equates to an average out
performance of 51% per annum.
The Fund’s outperformance over the financial year was largely
attributable to it being overweight resources, underweight
financials and its avoidance of property trusts (sectors which
were particularly hard hit). Although commodity prices and
therefore resource stocks were materially affected, prices
subsequently rebounded as investors focused once again on
growth in developing countries.
The Fund recorded operating earnings per share of -$0.185,
and a statutory accounting loss after tax of $7,711,901 was
incurred after the inclusion of net unrealised losses. The
unrealised losses have no impact on the Fund’s operations
except they prevented the Fund from paying a final dividend.
The Manager is optimistic that the Fund will be in a position
to pay dividends in the foreseeable future.
As at the close of the 2009 financial year, the portfolio had
cash reserves of approximately $7.52m or 23.62% of the
total value of the portfolio.
% Porfolio Invested
Jul 08
Sep 08 Nov 08
Jan 09 Mar 09 May09
100.00%
80.00%
60.00%
40.00%
20.00%
0.00%
Year Ending
2006
2007
2008
2009
Average
Return
9.95%
49.03%
-6.41%
-23.57%
7.25%
Index
6.90%
25.36%
-15.49%
-25.97%
-2.30%
Relative Out
Performance
to Index
44.20%
93.34%
58.62%
9.24%
51.35%
2009 Financial Year Review
The All Ordinaries index declined by 25.97% in 2008/09
financial year (and by a total of 55.03% from its peak in
November 2007) to its low-point in March 2009, producing
the worst investment returns for over 70 years. In the
midst of the down-turn and following the Lehman Brothers
collapse, substantial and well-run companies were unable
to externally fund their operations as banks severely
curtailed lending and equity raisings evaporated. A massive
deleveraging took place as investors scrambled to switch their
investments to safe havens such as cash.
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
3
As at the end of the financial year there were 74 companies
in the portfolio. This diversification continued to assist the
Manager to reduce the overall risk to the portfolio.
Top 10 Current Holdings
% of
Total
Portfolio
MIN BHP GCS WPL RIO PTM BYL BFG IMF
IAG
ASX Code
Looking forward it is difficult to become too negative
after global equity markets fell by over 50% from peak to
trough and investor sentiment was abysmal by any measure.
However, following the very sharp run-up in stock prices
combined with large dilutionary equity raisings, the Manager
believes it is likely that there will be a mild correction in the
short-term.
The Manager is cautiously optimistic on the medium-term
outlook for the Australian share market based on:
• A return to global growth, albeit at a much slower pace;
• An expectation that monetary policy will remain at
expansionary levels for some time, providing sufficient
liquidity;
• Generally well capitalised Australian banks (top four
Australian banks now ranked in the top 8 in the world);
• A continuing belief that the commodity price cycle has
Outlook
longevity;
The global economy appears to have avoided another
Great Depression due to the massive stimulus packages
and highly expansionary monetary policies adopted by
world governments and central banks. China is currently
experiencing robust GDP growth and the U.S. economy
appears to be bottoming out. Global equity markets have
rallied strongly since the lows of March 9 2009 and credit
markets are now functioning at the levels witnessed before
the collapse of Lehman Brothers. The stablisation of the
global economy has helped put in place the first stepping
stones towards the path of recovery, although the Manager
believes this will be patchy as the substantial transfer of debt
from the private sector to the public sector will eventually
have to be repaid by taxpayers. There is also a risk that
inflation could increase to elevated levels if governments
over-stimulate economies in the medium-term and financial
checks and balances are not put in place.
The Manager believes that interest rates have bottomed
in Australia and although the unemployment rate is likely
to continue to trend upwards, it should peak at around
7.5% as stimulus measures such as infrastructure spending
and the increase in the first home owners grant, continue
to revive key areas of the Australian economy. Although
business expenditure has decreased, this could be boosted if
large resource projects – such as the Gorgon LNG Project
– receive timely approval. Overall, this is a remarkable
turnaround, given the bleak outlook just six months ago.
• The Australian share market is trading well below the level
prior to the Lehman Brothers’ collapse in September 2008;
• Improved corporate balance sheets, with many companies
now focused on growth, rather than how to roll over debt;
• Vast cash holdings will eventually be reinvested in shares and
other asset classes as investors seek out superior returns.
The Manager remains confident that emerging economies
will not only recover quicker than the debt-laden developed
economies, but will also provide substantial opportunities for
investors in Australia. This is reflected in the Manager’s bias
towards companies which have exposure to the emerging
economies.
The Manager’s investment themes continue to include energy,
(via thermal coal, oil, gas and uranium), funds management
companies and industrial stocks that have strong cash flows,
pricing power and robust business models.
Brad Shallard Matthew Ward Romano Sala Tenna
Investment Managers
Katana Asset Management Limited
(formerly Classic Capital Pty Ltd, AFSL# 288412)
4
K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
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 2009 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:
Information on Directors
Dalton Leslie Gooding BBus, FCA.
(Non-Executive Chairman)
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 the managing 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*
• Avita Medical Limited*
• Brierty Limited*
• Visiomed Group Limited
* 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 42 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 as Head of Corporate Advisory for Bell Potter
Securities Ltd and 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
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
12 years in various fields and is currently the Head of
Institutional Sales with HFA Asset Management, an Australian
based fund of hedge fund manager with over $2 billion assets
under management.
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.
Derek La Ferla BA B Juris LLB.
(Non-Executive Director)
Resigned 28 November 2008.
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
5
COMPANY SECRETARY
Committee membership
As at the date of this report the Company had an Audit and
Compliance Committee.
Members acting on the Audit and Compliance Committee
of the Board at the date of this report are:
• Peter Wallace (Chairman of Committee)
• Dalton Gooding
• Giuliano Sala Tenna
(i) During the financial year, the Audit Committee was
merged with the Compliance Committee.
Gabriel Chiappini BBus, CA
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 2009, and the numbers of meetings attended
by each director were:
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
Dalton Leslie Gooding
Peter Wallace
Giuliano Sala Tenna
Derek La Ferla (resigned on 28 November 2008)
Directors’ meetings
Meetings of committees (i)
Audit
Compliance
A
7
7
7
3
B
7
7
7
3
A
2
2
2
-
B
2
2
2
-
A
1
1
1
-
B
1
1
1
-
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K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Directors’ Report
EARNINGS PER SHARE
CORPORATE INFORMATION
30 June
2009
Cents
30 June
2008
Cents
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.
(a) Basic earnings per share
Loss from continuing operations attributable
to the ordinary equity holders of the company
(18.53)
Katana Capital Limited is incorporated and domiciled in
Australia.
(6.64)
The registered office is located at 2 The Esplanade, Perth, WA
6000, Australia.
(b) Diluted earnings per share
Principal activity
Loss from continuing operations attributable
to the ordinary equity holders of the company
(18.53)
The principle activity of the Company is that of an Investment
Company with an ‘all opportunities’ investment strategy.
(6.64)
Employees
The weighted average number of ordinary shares on issue
used in the calculation of basic earnings per share was
41,620,466 (2008: 41,684,400).
DIVIDENDS
The following dividends have been paid by the Company or
declared by the directors since the commencement of the
financial year ended 30 June 2009:
30 June
2009
$
30 June
2008
$
Final ordinary dividend for the year ended
30 June 2008 of 1.0 cents (2007 2.5 cents)
per fully paid share paid on 20 November 2008
416,848 1,042,120
Interim ordinary dividend for the year
ended 30 June 2009 of nil cents
(2008 2.0 cents) per fully paid share
-
833,680
416,848 1,875,800
As at 30 June 2009 the Company did not have any full time
employees.
OPERATING AND FINANCIAL REVIEW
Company overview
Katana Capital was incorporated in September 2005 with
the aim of combining its listed investment structure with the
proven ability of Katana Asset Management 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
$11.80m. The majority of these returns were generated from
the downturn in equity holdings.
In percentage returns, the portfolio yielded a gross investment
return of -23.57% before operating expenses and tax. This
compared favourably to the Company’s stated benchmark
the – All Ordinaries index – which returned -25.97% over the
same period.
Operating results for the year
The loss before tax for the year was $11,481,608 (2008:
$4,438,000 loss) and loss after tax for the year was
$7,711,901 (2008: $2,766,949 loss).
Operating costs for the year were kept to a minimum, with
administration costs (exclusive of Fund Manager’s fee) coming
in at 2.05% of funds under management (2008: 1.28%).
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
7
Investments for future performance
Liquidity and funding
The Manager and Company is cautiously optimistic on the
medium-term outlook for the Australian share market
based on:
The Company foresees no need to raise additional equity
and will use its remaining cash reserves to invest into the
Australian equities market.
• A return to global growth, albeit at a much slower pace;
• An expectation that monetary policy will remain at
expansionary levels for some time, providing
sufficient liquidity;
• Generally well capitalised Australian banks (top four
Australian banks now ranked in the top 8 in the world);
• The Australian share market is trading well below
the level prior to the Lehman Brothers’ collapse in
September 2008;
Improved corporate balance sheets, with many
companies now focused on growth rather than how to
roll over debt;
•
• Vast cash holdings will eventually be reinvested in shares
and other asset classes as investors seek out superior
returns.
The Manager and Company remains confident that emerging
economies will not only recover quicker than the debt
laden developed economies, but will also provide substantial
opportunities for investors in Australia. This is reflected in
the Manager’s and Company’s bias towards companies which
have exposure to the emerging economies.
The Manager’s and Company’s investment themes continue
to include energy, (via thermal coal, oil, gas and uranium),
funds management companies 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 flows from operations was $1,719,047 during the
year which reflects the Company’s investment from the
Australian equities market.
Net cash flows for the financial year ending 30 June 2010 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.
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 Fund
Manager. The Fund Manager is primarily responsible for all
matters associated with risk management associated with the
Equity Markets and Investment of the Company’s funds.
SIGNIFICANT CHANGES IN STATE OF
AFFAIRS
In the opinion of the directors, there were no significant
changes in the state of affairs of the consolidated entity that
occurred during the year.
SIGNIFICANT CHANGES AFTER
BALANCE DATE
A final dividend for the 30 June 2009 financial year has
not been declared by the Company. The Directors note
that there has been a significant 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 2009 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.
8
K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Directors’ Report
LIKELY DEVELOPMENTS AND
EXPECTED RESULTS
SHARE OPTIONS
Unissued shares
The global economy appears to have avoided another
Great Depression due to the massive stimulus packages
and highly expansionary monetary policies adopted by
world governments and central banks. China is currently
experiencing robust GDP growth and the U.S. economy
appears to be bottoming out. Global equity markets have
rallied strongly since the lows of March 9th 2009 and credit
markets are now functioning at the levels witnessed before
the collapse of Lehman Brothers. The stabilization of the
global economy has helped put in place the first stepping
stones towards the path of recovery, although the Investment
Manager (“Manager” – Katana Asset Management Limited)
and Company believes this will be patchy as the substantial
transfer of debt from the private sector to the public sector
will eventually have to be repaid by taxpayers. There is
also a risk that inflation could increase to elevated levels if
Governments over stimulate economies in the medium-term
and financial checks and balances are not put in place.
The Manager and Company believes that interest rates have
bottomed in Australia and although the unemployment rate is
likely to continue to trend upwards, it should peak at around
7.5% as stimulus measures such as infrastructure spending
and the increase in the first home owners grant, continue
to revive key areas of the Australian economy. Although
business expenditure has decreased, this could be boosted if
large resource project – such as the Gorgon LNG. Overall,
this is a remarkable turnaround, given the bleak outlook just
six months ago.
Looking forward it is difficult to become too negative
after global equity markets fell by over 50% from peak to
trough and investor sentiment was abysmal by any measure.
However, following the very sharp run up in stock prices
combined with large dilutionary equity raisings, the Manager
and Company believes it is likely that there will be a mild
correction in the short-term.
ENVIRONMENTAL REGULATION AND
PERFORMANCE
The principal activities of the Company are not subject to any
particular or significant environmental regulations.
There were 1,000,000 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 and group receiving the highest
remuneration.
This report outlines the remuneration arrangements in place
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, Katana Asset
Management Ltd. Katana Asset Management 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.
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
9
(a) Details of Key Management Personnel
Remuneration structure
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 (resigned 28 November 2008)
Giuliano Sala Tenna
(b) Other key management personnel
In addition to the Directors noted above, Katana Asset
Management Limited (previously named Classic Capital Pty
Ltd), 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 Katana Asset Management 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.
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.
In accordance with best practice corporate governance, the
structure of Non-Executive director and senior management
remuneration is separate and distinct.
(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 2009 is detailed in Table 1 of this report.
1 0
K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Directors’ 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 Katana Asset Management
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 Katana Asset Management Limited. Consequently, no
compensation as defined in AASB 124 ‘Related Party
Disclosures’ is paid by the Group to the Directors of Katana
Asset Management Limited as Key Management Personnel.
Compensation is paid to the Fund Manager in the form of
fees and the significant of the agreement and the 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. The
commencement date (Commencement Date) is the date on
which the company listed on the Australian Stock Exchange
23 December 2005.
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, breach,
non observance or non performance of any of
the terms of and conditions contained in the
Management Agreement; or
(d) a receiver or receiver and manager is appointed
to the whole or part of the undertakings of the
Company; and
(2) such notice is given not less than two years after the
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;
(2) the Fund Manager’s AFSL is suspended or cancelled at
any time for any reason;
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
1 1
(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;
(9) 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
(10) the Fund Manager is not lawfully able to continue 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 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.
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 receives a monthly management fee
equal to 0.104167% of the Portfolio value calculated at the
end of each month. The fee for 2009 was $395,395 (2008:
$652,461). The Directors and shareholders of Katana Asset
Management Ltd are also shareholders in Katana Capital
Limited.
(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 2009 was $nil (2008: $nil).
Company performance
The profit/(loss) after tax for the group from the date of
incorporation (19 September 2005) is as follows:
Profit/(loss) after tax expense
($7,711,901)
($2,766,949)
$7,510,531
$1,060,378
2009
2008
2007
19 Sept 05 to
30 June 06
1 2
K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Directors’ Report
Directors’ Report
Table 1: Directors’ and officers’ (including 5 highest paid executives) remuneration for the year
ended 30 June 2009
2009
Short-term employee benefits
Post-
employment
benefits
Long-
term
benefits
Share-based
payments
Salary and
fees
$
Other
$
Cash STI
$
Super
annuation
$
Termination
benefits
$
Options
$
Total
$
% of
remuneration
which is
performance
based
%
70,000
40,000
16,667
40,000
166,667
64,031
230,698
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,930
3,600
1,500
3,600
15,630
-
15,630
-
-
-
-
-
-
-
-
-
-
-
-
-
-
76,930
43,600
18,167
43,600
182,297
64,031
246,328
-
-
-
-
-
-
-
Name
Non-executive directors
Dalton Leslie Gooding
Peter Wallace
Derek La Ferla*
Giuliano Sala Tenna
Subtotal
non-executive directors
Other key management
personnel (Group)
Gabriel Chiappini
Total key management
personnel Compensation
(Group)
* Mr Derek La Ferla resigned on 28 November 2008
2008
Short-term benefits
Post-
employment
benefits
Long-
term
benefits
Share-based
payments
Salary and
fees
$
Other
$
Cash STI
$
Super
annuation
$
Termination
benefits
$
Options
$
Total
$
% of
remuneration
which is
performance
based
%
71,499
37,500
37,500
37,500
183,999
86,166
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
-
-
-
-
-
-
-
Name
Non-executive directors
Dalton Leslie Gooding
Peter Wallace
Derek La Ferla
Giuliano Sala Tenna
Subtotal
non-executive directors
Other key management
personnel (Group)
Gabriel Chiappini
Total key management
personnel compensation
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
1 3
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
% remuneration consisting of options
Number of
ordinary shares
Number of options
over ordinary
shares*
2009
2008
Directors of Katana Capital Limited
Dalton Leslie Gooding
Peter Wallace
Derek La Ferla
(resigned on 28 November 2008)
100,000
300,000
250,000
250,000
100,000
250,000
Giuliano Sala Tenna
100,000
250,000
-
-
-
-
-
-
-
-
* 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 year.
The Company does not have a policy that prohibits Directors and Executives from entering into arrangements to protect the
value of unvested options. This includes entering into contracts to hedge their exposure to options or shares granted as part of
their remuneration package.
End of Remuneration Report
1 4
K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Directors’ Report
INDEMNIFICATION OF DIRECTORS
AND OFFICERS
The total amount of insurance contract premiums paid was
$39,600 (2008: $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.
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
22 September 2009
Perth, Western Australia
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
1 5
Auditor’s Independence
Declaration
Ernst & Young Building
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
www.ey.com/au
Auditor’s Independence Declaration to the Directors of Katana Capital
Limited
In relation to our audit of the financial report of Katana Capital Limited for the financial year ended 30
June 2009, to the best of my knowledge and belief, there have been no contraventions of the auditor
independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.
Ernst & Young
C B Pavlovich
Partner
Perth
22 September 2009
CP:MB:KATANA:039
13
Liability limited by a scheme approved
under Professional Standards Legislation
1 6
K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Financial Statements - 30 June 2009
Financial Report
Income Statements
Balance Sheet
Statements of Changes in Equity
Cash Flow Statements
Directors’ Declaration
Independent Auditor’s Report to the Members
17
18
19
20
45
46
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
1 7
Income Statement
for the year ended 30 June 2009
Notes
Year ended
Consolidated
30 June
2008
$
1,251,718
415,168
1,666,886
30 June
2009
$
1,158,598
173,118
1,331,716
Year ended
Parent
30 June
2008
$
1,214,193
401,823
1,616,016
30 June
2009
$
1,158,598
169,125
1,327,723
3
(11,801,269)
(4,912,211)
(11,801,269)
(4,181,844)
(395,395)
(83,029)
(188,666)
(344,965)
-
-
(652,461)
(115,930)
(242,392)
(180,718)
-
(1,174)
(395,395)
(83,029)
(188,666)
(344,965)
-
-
(652,461)
(112,748)
(242,392)
(180,718)
(414,778)
(1,174)
(12,813,324)
(6,104,886)
(12,813,324)
(5,786,115)
Investment income
Dividends
Interest
Total investment income
Expenses
Investment loss
Fund manager’s fees
Legal and professional
Directors’ fees and expenses
Administration expenses
Impairment of intercompany receivable
Interest expense
Total expenses
Loss before income tax
Income tax benefit
Loss from continuing operations
(11,481,608)
(4,438,000)
(11,485,601)
4
3,769,707
1,671,051
3,769,747
(7,711,901)
(2,766,949)
(7,715,854)
(4,170,099)
1,601,684
(2,568,415)
Loss for the year attributable to
members of Katana Capital Limited
(7,711,901)
(2,766,949)
(7,715,854)
(2,568,415)
Cents
Cents
Loss per share attributable to the
ordinary equity holders of the
company:
Loss per share
Diluted Loss per share
22
22
(18.53)
(18.53)
(6.64)
(6.64)
The above income statements should be read in conjunction with the accompanying notes.
1 8
K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Balance Sheet
as at 30 June 2009
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
Deferred tax assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Financial liabilities
Dividends payable
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/(accumulated loss)
Total equity
Consolidated
Notes
30 June
2009
$
30 June
2008
$
30 June
2009
$
Parent
30 June
2008
$
5
6
7
8
11
9
10
12
13
14
15
16
16
7,073,483
5,851,873
7,073,483
5,604,607
777,191
282,582
777,191
282,582
24,051,056
38,627,420
24,051,056
38,627,420
30,567
61,591
78,620
42,127
30,567
61,591
78,620
42,127
31,993,888
44,882,622
31,993,888
44,635,356
-
-
2,683,755
2,683,755
-
-
-
-
120
-
2,683,673
2,683,793
120
251,259
-
251,379
34,677,643
44,882,622
34,677,681
44,886,735
440,356
1,404,243
440,356
1,404,243
54,200
3,316
-
6,869
54,200
3,316
-
6,869
497,872
1,411,112
497,872
1,411,112
-
-
1,085,954
1,085,954
-
-
1,086,076
1,086,076
497,872
2,497,066
497,872
2,497,188
34,179,771
42,385,556
34,179,809
42,389,547
40,081,234
40,158,270
40,081,234
40,158,270
101,100
101,100
101,100
101,100
(6,002,563)
2,126,186
(6,002,525)
2,130,177
34,179,771
42,385,556
34,179,809
42,389,547
The above balance sheets should be read in conjunction with the accompanying notes.
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
1 9
Statement of changes in equity
for the year ended 30 June 2009
CONSOLIDATED
Balance at 1 July 2007
Profit/(loss) for year
Total recognised income and expense
for the half-year
Dividends provided for or paid
Balance at 30 June 2008
26
CONSOLIDATED
Balance at 1 July 2008
Profit/(loss) for year
Total recognised income and expense
for the year
Buy-back of shares
Dividends provided for or paid
Balance at 30 June 2009
PARENT
Balance at 1 July 2007
Profit/(loss) for year
Total recognised income and expense
for the year
Dividends provided for or paid
Balance at 30 June 2008
26
Issued
capital
Option
premium
reserve
Retained
earnings
Notes
$
$
$
Total
$
40,158,270
101,100
6,768,935
47,028,305
-
-
-
-
-
-
(2,766,949)
(2,766,949)
(2,766,949)
(2,766,949)
(1,875,800)
(1,875,800)
40,158,270
101,100
2,126,186
42,385,556
40,158,270
101,100
2,126,186
42,385,556
-
-
15
26
(77,036)
-
-
-
-
-
(7,711,901)
(7,711,901)
(7,711,901)
(7,711,901)
-
(416,848)
(77,036)
(416,848)
40,081,234
101,100
(6,002,563)
34,179,771
40,158,270
101,100
6,574,392
46,833,762
-
-
-
-
-
-
(2,568,415)
(2,568,415)
(2,568,415)
(2,568,415)
(1,875,800)
(1,875,800)
40,158,270
101,100
2,130,177
42,389,547
PARENT
Balance at 1 July 2008
Option issued
Profit/(loss) for year
Total recognised income and expense
for the year
Buy-back of shares
Dividends provided for or paid
Balance at 30 June 2009
40,158,270
101,100
2,130,177
42,389,547
-
-
-
15
26
(77,036)
-
-
-
-
-
-
-
-
(7,715,854)
(7,715,854)
(7,715,854)
(7,715,854)
-
(416,848)
(77,036)
(416,848)
40,081,234
101,100
(6,002,525)
34,179,809
The above statements of changes in equity should be read in conjunction with the accompanying notes.
2 0
K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Cashflow Statement
for the year ended 30 June 2009
Year ended
Consolidated
30 June
2009
$
30 June
2008
$
30 June
2009
$
Notes
Year ended
Parent
30 June
2008
$
Cash flows from operating activities
Proceeds on sale of financial assets
37,762,881
24,387,886
37,762,881
24,387,886
Payments for purchases of financial assets
(36,458,449)
(28,577,244)
(36,207,190)
(28,558,239)
Payments to suppliers and employees
(1,048,933)
(2,297,452)
(1,300,192)
(2,480,631)
Interest received
Dividends received
Other revenue
Interest paid
Tax paid/(refund)
Net cash (outflow) inflow from
operating activities
Cash flows from investing activities
Cash flows from financing activities
Dividends paid
Payments for shares bought back
Repayment of borrowings from subsidiary
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
171,851
415,168
167,858
401,823
1,238,382
1,242,943
1,238,382
1,205,418
24,727
-
24,727
-
-
(1,174)
-
(1,174)
28,588
(569,211)
28,588
(555,082)
19
1,719,047
(5,399,084)
1,715,054
(5,599,999)
(420,401)
(1,989,135)
(420,401)
(1,989,135)
(77,036)
-
-
-
(77,036)
251,259
-
-
(497,437)
(1,989,135)
(246,178)
(1,989,135)
1,221,610
(7,388,219)
1,468,876
(7,589,134)
5,851,873
13,240,092
5,604,607
13,193,741
Cash and cash equivalents at
5
7,073,483
5,851,873
7,073,483
5,604,607
end of year
The above cash flow statements should be read in conjunction with the accompanying notes.
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
2 1
Notes to the Financial Statements
30 June 2009
1 Corporate Information
The financial report of Katana Capital Limited (“the Company”) for the year ended 30 June 2009 was authorised for issue in
accordance with a resolution of the directors on 22 September 2009.
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, Australian Accounting Standards 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
issued by the International Accounting Standards Board.
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 2009. The impact of these new or
amended Accounting Standards whilst not expected to give rise to material changes in the Group’s financial statements, are yet
to be assessed.
(c) Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of the subsidiary of Katana Capital Limited as at 30
June 2009 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.
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.
2 2
K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Notes to the Financial Statements
30 June 2009
2 Summary of Significant Accounting Policies (continued)
(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.
Financial assets held for trading
(i)
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
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.
Interest income
(i)
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.
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
2 3
(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.
(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.
Collectability 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.
2 4
K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Notes to the Financial Statements
30 June 2009
2 Summary of Significant Accounting Policies (continued)
Interest bearing loans and borrowings
(j)
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.
(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.
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
2 5
2 Summary of Significant Accounting Policies (continued)
(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.
3
Investment income/(loss)
Realised gains/(losses) on investments
held for trading
Unrealised gains/(losses) on investments
held for trading
Changes in fair value of options
Foreign exchange gains (net)
Other income
Year ended
Consolidated
30 June
2009
$
30 June
2008
$
30 June
2009
$
Year ended
Parent
30 June
2008
$
(5,110,432)
7,157,716
(5,110,432)
7,888,083
(7,131,860)
(12,250,427)
(7,131,860)
(12,250,427)
416,395
(99)
24,727
114,532
416,395
114,532
-
65,968
(99)
24,727
-
65,968
(11,801,269)
(4,912,211)
(11,801,269)
(4,181,844)
2 6
K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Notes to the Financial Statements
30 June 2009
4
Income Tax Expense
Year ended
Consolidated
Year ended
Parent
30 June
2009
30 June
2008
30 June
2009
30 June
2008
$
-
$
-
$
-
$
-
(3,769,707)
(1,671,051)
(3,769,747)
(1,601,684)
(3,769,707)
(1,671,051)
(3,769,747)
(1,601,684)
(a) Income tax expense/(benefit)
Current tax expense/(benefit)
Deferred tax
Deferred income tax/(benefit) expense included in
income tax expense comprises:
(Decrease)/increase in deferred tax assets (note 10)
2,691,772
(634,334)
2,691,812
Decrease/(increase) in deferred tax liabilities (note 14)
1,077,935
(1,036,638)
1,077,935
Other
-
(79)
-
(634,374)
(967,230)
(80)
3,769,707
(1,671,051)
3,769,747
(1,601,684)
Year ended
Consolidated
Year ended
Parent
30 June
2009
$
30 June
2008
$
30 June
2009
$
30 June
2008
$
(b) Numerical reconciliation of income tax
expense to prima facie tax payable
Loss from continuing operations before income tax
expense
(11,481,608)
(4,438,000)
(11,485,601)
(4,170,099)
Tax at the Australian tax rate of 30% (2008 – 30%)
(3,444,482)
(1,331,400)
(3,445,680)
(1,251,030)
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
Income tax expense/(benefit)
325
1,082
325
139,522
146,994
139,522
1,082
141,170
(465,072)
(486,648)
(465,072)
(470,567)
-
-
(1,079)
-
1,158
(22,339)
-
-
(3,769,707)
(1,671,051)
(3,769,747)
(1,601,684)
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
2 7
(c) Tax consolidation legislation
Katana Capital Limited and its wholly owned Australian controlled entities implemented the tax consolidation legislation from
1 July 2007.
(i) Members of the tax consolidated Group and the tax sharing arrangement
Katana Capital Limited and its 100% owned Australian resident subsidiaries formed a tax consolidated Group from 1 July
2007. Katana Capital Limited is the head entity of the tax consolidated Group. Members of the Group have entered into a tax
sharing agreement that provides for the allocation of income tax liabilities between the entities should the head entity default
on its tax payment obligations. No amounts have been recognised in the financial statements in respect of this agreement on
the basis that the possibility of default is remote.
(ii) Tax effect accounting by members of the tax consolidated Group
Tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences are recognised in the
separate financial statements of the members of the tax consolidated Group using the Group allocation method. Current
tax liabilities and assets and deferred tax assets arising from unused tax losses and tax credits of the members of the tax
consolidated Group are recognised by Katana Capital Limited, the head entity of the tax consolidated Group.
Members of the tax consolidated Group has entered into a tax funding agreement. Amounts are recognised as payable to
or receivable by the Company and each member of the consolidated Group in relation to tax contribution amounts paid
or payable between the parent entity and other members of the tax consolidated group in accordance with this agreement.
Where the tax contribution amount recognised by each member of the tax consolidated Group for a particular period is
different to the aggregate of the current tax liability or asset and any deferred tax asset arising from unused tax losses and tax
credits in respect of that period, the distribution is recognised as a contribution from (or distribution to) equity participants.
5 Current assets – Cash and Cash Equivalents
Bank balances
Deposits at call
At
Consolidated
30 June
2008
$
30 June
2008
$
30 June
2009
$
At
Parent
30 June
2008
$
6,976,849
5,851,873
6,976,849
5,604,607
96,634
-
96,634
-
7,073,483
5,851,873
7,073,483
5,604,607
6 Current Assets – Trade and Other Current Receivables
At
Consolidated
30 June
2009
$
761,108
1,267
14,816
30 June
2008
$
30 June
2009
$
187,982
761,108
-
94,600
1,267
14,816
777,191
282,582
777,191
At
Parent
30 June
2008
$
187,982
-
94,600
282,582
Unsettled trades – listed equities
Interest receivable
Dividend receivable
There are no receivables past due or impaired.
2 8
K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Notes to the Financial Statements
30 June 2009
7 Current Assets – Investments
At
Consolidated
30 June
2009
$
30 June
2008
$
30 June
2009
$
At
Parent
30 June
2008
$
Listed equities – classified or held for trading
24,051,056
38,627,420 24,051,056
38,627,420
24,051,056
38,627,420 24,051,056
38,627,420
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
At
Consolidated
30 June
2009
$
14,300
47,291
61,591
30 June
2008
$
14,300
27,827
42,127
30 June
2009
$
14,300
47,291
61,591
9 Non-current Assets – Non-current Receivables
At
Consolidated
30 June
2009
$
30 June
2008
$
30 June
2009
$
At
Parent
30 June
2008
$
14,300
27,827
42,127
At
Parent
30 June
2008
$
Receivable from wholly owned subsidiary
Receivable
Impairment allowance
-
-
-
-
-
-
414,778
666,037
(414,778)
(414,778)
-
251,259
The loan is non-interest bearing and has no fixed maturity date or repayments.
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
2 9
10 Non-current Assets – Deferred Tax Assets
The balance comprises temporary differences attributable to:
Tax losses
Other
Share issue costs
Options
Provisions
Other
At
Consolidated
30 June
2009
$
30 June
2008
$
30 June
2009
$
At
Parent
30 June
2008
$
3,387,592
688,319
3,387,592
688,319
35,836
1,426
38,119
67
71,630
-
11,250
67
35,754
1,426
38,119
67
71,508
-
11,250
67
Total deferred tax assets
3,463,040
771,266
3,462,958
771,144
Set off of deferred tax liabilities pursuant to set
off provisions (note 14)
Net deferred tax assets
Movements – Consolidated
At 1 July 2007
(Charged)/credited to the income statement
At 30 June 2008
At 30 June 2008
(Charged)/credited to the income statement
At 30 June 2009
Movements – Parent entity
At 1 July 2007
(Charged)/credited to the income statement
At 30 June 2008
At 30 June 2008
(Charged)/credited to the income statement
At 30 June 2009
(779,285)
(771,266)
(779,285)
(771,144)
2,683,755
-
2,683,673
-
Tax losses
$
Share issue
costs
$
-
688,319
688,319
688,319
2,699,273
3,387,592
107,262
(35,632)
71,630
71,630
(35,794)
35,836
Tax losses
$
Share issue
costs
$
-
688,319
688,319
688,319
2,699,273
3,387,592
107,262
(35,754)
71,508
71,508
(35,754)
35,754
Other
$
29,670
(18,353)
11,317
11,317
28,295
39,612
Other
$
29,508
(18,191)
11,317
11,317
28,295
39,612
Total
$
136,932
634,334
771,266
771,266
2,691,774
3,463,040
Total
$
136,770
634,374
771,144
771,144
2,691,814
3,462,958
The deferred tax asset is being carried forward as an asset due to the company’s view that the tax asset will be utilised as
global stock exchanges correct themselves, global economic activity increases and the company realises profits.
3 0
K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Notes to the Financial Statements
30 June 2009
11 Non-current Assets – Investments
Investment in controlled entity at cost
At Parent
30 June
2009
$
120
120
30 June
2008
$
120
120
The investment in the controlled entity is for 100% of the issued capital of Kapital Investments (WA) Pty Ltd.
12 Current Liabilities – Trade and Other Payables
At
Consolidated
30 June
2009
$
30 June
2008
$
30 June
2009
$
At
Parent
30 June
2008
$
Unsettled trades – listed equities
275,638
1,202,648
275,638
1,202,648
Accrual – Fund Manager’s management fee
103,468
144,186
103,468
144,186
Trade creditors
Employee pay as you go tax instalments
Custody fees payable
33,552
5,280
22,418
49,489
7,920
-
33,552
5,280
22,418
49,489
7,920
-
440,356
1,404,243
440,356
1,404,243
13 Current Liabilities – Financial Liabilities
Exchange traded options-held for trading at fair value*
At
Consolidated
30 June
2009
$
54,200
54,200
30 June
2008
$
-
-
30 June
2009
$
54,200
54,200
At
Parent
30 June
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 30 July 2009.
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
3 1
14 Non-current Liabilities – Deferred Tax Liabilities
At
Consolidated
30 June
2009
$
30 June
2008
$
30 June
2009
$
At
Parent
30 June
2008
$
774,460
1,828,840
774,460
1,828,840
4,445
380
28,380
-
4,445
380
779,285
1,857,220
779,285
28,380
-
1,857,220
(771,144)
1,086,076
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
(779,285)
(771,266)
(779,285)
Net deferred tax liabilities
-
1,085,954
-
Movements – Consolidated
At 1 July 2007
Charged/(credited) to the income statement
At 30 June 2008
At 30 June 2008
Charged/(credited) to the income statement
At 30 June 2009
Movements – Parent
At 1 July 2007
Charged/(credited) to the income statement
At 30 June 2008
At 30 June 2008
Charged/(credited) to the income statement
At 30 June 2009
Investments
$
2,853,012
Other
$
40,846
Total
$
2,893,858
(1,024,172)
(12,466)
(1,036,638)
1,828,840
1,828,840
28,380
28,380
1,857,220
1,857,220
(1,054,380)
(23,555)
(1,077,935)
774,460
4,825
779,285
Investments
$
2,783,604
(954,764)
1,828,840
Other
$
40,846
(12,466)
28,380
Total
$
2,824,450
(967,230)
1,857,220
1,828,840
28,380
1,857,220
(1,054,380)
(23,555)
(1,077,935)
774,460
4,825
779,285
3 2
K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Notes to the Financial Statements
30 June 2009
15 Issued Capital
Ordinary shares
Fully paid
(a) Movements in ordinary share capital:
Date
1 July 2007
30 June 2008
1 July 2008
Details
Opening balance
Balance
Opening balance
Buy back of shares
At
At
Parent entity Parent entity
30 June
2009
Shares
30 June
2008
Shares
30 June
2009
Shares
30 June
2008
Shares
41,494,313
41,684,800 40,081,234
40,158,270
Number of shares
$
41,684,800
40,158,270
41,684,800
40,158,270
41,684,800
40,158,270
(190,487)
(77,036)
41,494,313
40,081,234
30 June 2009
Balance
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
During the period from December 2008 to February 2009, 190,487 shares were bought back on market and were
subsequently cancelled. The shares were acquired at an average price of $0.4044 with the price ranging from $0.35 to $0.425
per share.
(b) Movements in options:
Date
Details
1 July 2008
30 June 2009
Opening balance
Balance
30 June 2009
30 June 2008
Number of options Number of options
1,000,000
1,000,000
1,000,000
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.
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
3 3
16 Reserves and Retained Profits
Option premium reserve
Retained profits/(accumulated losses)
Movements in retained profits/(losses) were as follows:
At
Consolidated
30 June
2009
$
101,100
30 June
2008
$
101,100
30 June
2009
$
101,100
At
Consolidated
30 June
2009
$
30 June
2008
$
Opening retained earnings
Net (loss) after tax attributable to members of the Company
Dividends paid
2,126,186
(7,711,901)
(416,848)
6,768,935
(2,766,949)
(1,875,800)
30 June
2009
$
2,130,177
(7,715,854)
(416,848)
At
Parent
30 June
2008
$
101,100
At
Parent
30 June
2008
$
6,574,392
(2,568,415)
(1,875,800)
Balance 30 June
(6,002,563)
2,126,186
(6,002,525)
2,130,177
17 Key Management Personnel Disclosures
(a) Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Management fee to Fund Manager
Year ended
Consolidated
Year ended
Parent
30 June
2009
$
166,667
15,630
395,395
577,692
30 June
2008
$
183,999
15,975
652,461
852,435
30 June
2009
$
166,667
15,630
395,395
577,692
30 June
2008
$
183,999
15,975
652,461
852,435
3 4
K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Notes to the Financial Statements
30 June 2009
(b) Equity instrument disclosures relating to key management personnel
(i) Option holdings
2009
Name
Directors of Katana Capital Limited
Dalton Leslie Gooding
Peter Wallace
Derek La Ferla (resigned on 28
November 2008)
Giuliano Sala Tenna
Other key management personnel
of the Group
Brad Shallard
Romano Sala Tenna
2008
Name
Directors of Katana Capital Limited
Dalton Leslie Gooding
Peter Wallace
Derek La Ferla
Giuliano Sala Tenna
Other key management personnel
of the Group
Brad Shallard
Romano Sala Tenna
(ii) Share holdings
Balance at start
of the year
Granted as
compensation
Exercised
Other
changes
Balance at end
of the year
Vested and
exercisable
Unvested
250,000
250,000
250,000
250,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
-
-
-
-
-
-
-
-
-
-
Balance at start
of the year
Granted as
compensation
Exercised
Other
changes
Balance at end
of the year
Vested and
exercisable
Unvested
250,000
250,000
250,000
250,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
-
-
-
-
-
-
-
-
-
-
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.
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
3 5
Received during
the year on
Balance at
the start of
the year
the exercises Other changes
of options during the year
Balance at
the end of
the year
100,000
300,000
100,000
100,000
2,040,125
2,267,870
-
-
-
-
-
-
-
-
-
-
100,000
300,000
100,000
100,000
-
-
2,040,125
2,267,870
Received during
the year on
Balance at
the start of
the year
the exercises Other changes
of options during the year
Balance at
the end of
the year
2009
Name
Directors of Katana Capital Limited
Ordinary shares
Dalton Leslie Gooding
Peter Wallace
Derek La Ferla (resigned 28 November 2008)
Giuliano Sala Tenna
Other key management personnel of the Group
Ordinary shares
Brad Shallard
Romano Sala Tenna
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
100,000
300,000
100,000
100,000
580,000
980,000
-
-
-
-
-
-
-
-
-
-
100,000
300,000
100,000
100,000
1,460,125
1,287,870
2,040,125
2,267,870
Opening balance adjustment made to reflect holdings as at 1 July 2008
(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.
3 6
K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Notes to the Financial Statements
30 June 2009
18 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.
(b) Related party transactions
Transactions between the Parent Company and related parties noted above during the year are outlined below:
(i) Dalton Gooding is a partner of Gooding Pervan Chartered Accounting firm and as part of providing taxation advisory
services, Gooding Pervan received $31,250 (2008: $18,492) 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 2009 is $nil (2008:
$251,259).
19 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
Change in operating assets and liabilities
Year ended
Consolidated
30 June 2009
$
(7,711,901)
-
-
30 June2008 30 June 2009
$
(7,715,854)
-
-
$
(2,766,949)
-
(53,895)
Year ended
Parent
30 June 2008
$
(2,568,415)
414,778
(53,895)
7,131,860
12,250,427
7,131,860
12,250,427
(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
(514,073)
7,498,704
-
(963,887)
48,053
(3,769,709)
106,259
(12,794,513)
-
79,574
(549,015)
(1,670,972)
(514,073)
7,498,704
-
(963,887)
48,053
(3,769,749)
(80,104)
(13,505,873)
-
79,574
(534,887)
(1,601,604)
Net cash (outflow) inflow from operating activities
1,719,047
(5,399,084)
1,715,054
(5,599,999)
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
3 7
20 Financial Risk Management
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.
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 on page 38 unless the prior
approval of the Board is received to do otherwise.
•
3 8
K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Notes to the Financial Statements
30 June 2009
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.
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
investment
per security
Maximum
investment
per security
As a percentage of total portfolio
ASX S&P Top 20
ASX S&P Top 100/Cash Hybrids
ASX S&P Top 500
Outside of ASX S&P Top 500/Other Instruments
1%
1%
No minimum
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 macroeconomic 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.
Market risk
(a)
(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 held for trading. 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:
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
3 9
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.
•
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 40 summarises the impact of an increase/decrease in the Australian Securities Exchange All Ordinaries Index
on the Company’s net assets attributable to shareholders at 30 June 2009. The analysis is based on the assumptions that the
index increased/decreased by 10% (2008 – 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.
4 0
K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Notes to the Financial Statements
30 June 2009
The table below summarises the Company’s exposure to financial assets/liabilities at the balance sheet date.
Weighted
Average
Year ended
Consolidated
Year ended
Parent
Interest
30 June
Rate (% pa)
2009
30 June
2008
30 June
2009
30 June
2008
Financial Assets
Cash and short-term deposits –
floating
Current receivables
Due from brokers – for securities sold
Financial assets held for trading
Non-current receivables
Financial Liabilities
Payables
Due to brokers – payable for
securities purchased
Financial liabilities held for trading
3.62%
7,073,484
5,851,873
7,073,484
5,604,607
-%
-%
-%
-%
-%
-%
-%
16,803
761,108
94,600
187,982
16,803
761,108
94,600
187,982
24,051,056
38,627,420
24,051,056
38,627,420
-
-
-
251,259
31,902,451 w44,761,875
31,902,451
44,765,868
164,718
275,638
201,595
1,202,648
164,718
201,595
275,638
1,202,648
54,200
-
54,200
-
494,556
1,404,243
494,556
1,404,243
(b) Summarised sensitivity analysis
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 (2008: +/ -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.
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 2009
30 June 2008
Impact on Operating Profit/Equity
(2,405,106)
(3,862,742)
2,405,106
3,862,742
(24,016)
(36,955)
24,016
36,955
Price Risk Interest Rate Risk
+50bps
-50bps
+10%
-10%
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
4 1
(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 2009 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 2009 the Company held three 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.
(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.
21 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.
4 2
K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Notes to the Financial Statements
30 June 2009
22 Earnings Per Share
(a) Basic earnings per share
Loss from continuing operations attributable to the ordinary equity holders
of the company
(b) Diluted earnings per share
Loss from continuing operations attributable to the ordinary equity holders
of the company
(c) Reconciliations of earnings used in calculating earnings per share
Basic earnings per share
Loss from continuing operations
Year ended
Consolidated
30 June
2008
Cents
30 June
2009
Cents
(18.53)
(6.64)
(18.53)
(6.64)
Year ended
Consolidated
30 June
2008
$
30 June
2009
$
(7,711,901)
(2,766,949)
Loss attributable to the ordinary equity holders of the company used in calculating basic
earnings per share
(7,711,901)
(2,766,949)
Diluted earnings per share
Loss 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
(7,711,901)
(2,766,949)
Year ended
Consolidated
30 June
2008
Number
30 June
2009
Number
Weighted average number of ordinary shares used as the denominator in calculating
basic earnings per share
41,620,466
41,684,440
Adjustments for calculation of diluted earnings per share:
Options
-
-
Weighted average number of ordinary shares and potential ordinary shares used as
the denominator in calculating diluted earnings per share
41,620,466
41,684,440
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
4 3
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 2009, as disclosed in Note 15 are not dilutive for the year ended 30 June 2009.
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 2009 (2009: nil).
23 Commitments and Contingencies
There are no contingent liabilities or contingent assets as at 30 June 2009 (2008: nil).
Katana Capital Limited has entered into a 10 year Management Agreement with the Fund Manager, Katana Asset Management
Ltd. 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).
24 Events Occurring After the Balance Sheet Date
A final dividend for the 30 June 2009 financial year has not been declared by the Company. The Directors note that there has
been a significant 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 variable via the ASX website.
25 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
Year ended
Consolidated
30 June
2008
$
30 June
2009
$
Year ended
Parent
30 June
2008
$
30 June
2009
$
45,500
45,500
45,500
45,500
45,500
45,500
45,500
45,500
-
-
-
-
-
-
-
-
45,500
45,500
45,500
45,500
4 4
K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Notes to the Financial Statements
30 June 2009
26 Dividends
Final dividend for the year ended 30 June 2008 of 1.0 cents (2007 – 2.5 cents)
per fully paid share paid on 20 November 2008 (2007 – 8 November 2007)
Fully franked (2007 – 37% franked) based on tax paid @ 30% – 1 cents
(2007 – 2 cents interim & 2 cents special) per share
Interim dividend for the year ended 30 June 2009 of NIL cents (2008 2 cents)
per fully paid share (2008 – paid 30 April 2008)
NIL franked (2008– fully franked) based on tax paid @ 30% – NIL cents
(2008 – 2 cents interim) per share
Total dividends provided for or paid
Dividends paid in cash or satisfied by the issue of shares under the dividend reinvestment
plan during the years ended 30 June 2009 and 2008 were as follows:
Paid in cash
Year ended
Consolidated
Year ended Parent
30 June
30 June
2009
$
2008
$
416,848
1,042,120
-
833,680
416,848
1,875,800
416,848
416,848
1,875,800
1,875,800
Year ended
30 June
30 June
30 June
2009
$
2008
$
2009
$
Parent
30 June
2008
$
Franking credits available for subsequent financial years
based on a tax rate of 30% (2008: 30%)
487,495
249,124
487,495
249,124
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.
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
4 5
Directors’ Declaration
In the Directors’ opinion:
(a)
the financial statements and notes of the consolidated entity set out on pages 17 to 46 are in
accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards, Corporations Regulations 2001and 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 2009 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 with the provisions of the Company’s
Constitution.
The directors have been given the declarations by the fund manager’s 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
22 September 2009
Perth, Western Australia
4 6
K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Auditor’s Report
Ernst & Young Building
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
www.ey.com/au
Independent auditor’s report to the members of Katana Capital Limited
Report on the Financial Report
We have audited the accompanying financial report of Katana Capital Limited, which comprises the balance
sheet as at 30 June 2009, and the income statement, statement of changes in equity and cash flow
statement for the year ended on that date, a summary of significant accounting policies, other explanatory
notes and the directors’ declaration of the consolidated entity comprising the company and the entities it
controlled at the year’s end or from time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation and fair presentation of the financial
report in accordance with the Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining
internal controls relevant to the preparation and fair presentation of the financial report that is free from
material misstatement, whether due to fraud or error; selecting and applying appropriate accounting
policies; and making accounting estimates that are reasonable in the circumstances. In Note 2, the
directors also state that the financial report, comprising the financial statements and notes, complies with
International Financial Reporting Standards as issued by the International Accounting Standards Board.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply
with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report. The procedures selected depend on our judgment, including the assessment of the risks of
material misstatement of the financial report, whether due to fraud or error. In making those risk
assessments, we consider internal controls relevant to the entity’s preparation and fair presentation of the
financial report in order to design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by the directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Independence
In conducting our audit we have met the independence requirements of the Corporations Act 2001. We
have given to the directors of the company a written Auditor’s Independence Declaration, a copy of which
is included in the directors’ report.
CP:MB:KATANA:038
45
Liability limited by a scheme approved
under Professional Standards Legislation
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
4 7
Auditor’s Report
Auditor’s Opinion
In our opinion:
1.
the financial report of Katana Capital Limited is in accordance with the Corporations Act 2001,
including:
i
ii
giving a true and fair view of the financial position of Katana Capital Limited and the
consolidated entity at 30 June 2009 and of their performance for the year ended on that
date; and
complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001.
2.
the financial report also complies with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 6 to 12 of the directors’ report for the year
ended 30 June 2009. The directors of the company are responsible for the preparation and presentation
of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Auditor’s Opinion
In our opinion the Remuneration Report of Katana Capital Limited for the year ended 30 June 2009
complies with section 300A of the Corporations Act 2001.
Ernst & Young
C B Pavlovich
Partner
Perth
22 September 2009
CP:MB:KATANA:038
46
4 8
K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Corporate Governance Statement
The Board of Directors of Katana Capital Limited (Katana) is responsible for the corporate governance of the consolidated
entity. The Board guides and monitors the business and affairs of Katana on behalf of the shareholders by whom they are
elected and to whom they are accountable.
In accordance with the ASX Corporate Governance Council’s corporate governance guidelines contained in Corporate
Governance Principles and Recommendations (Second Edition Corporate Governance Guidelines), the Katana Corporate
Governance Statement contains certain specific information and discloses the extent to which the Company has followed the
guidelines during the period. Where a recommendation has not been followed it is disclosed together with reasons for the
departure.
The Katana Corporate Governance Statement is structured with reference to the Second Edition Corporate Governance
Guidelines, which are as follows:
Principle 1 Lay solid foundations for management and oversight
Principle 2 Structure the board to add value
Principle 3 Promote ethical and responsible decision making
Principle 4 Safeguard integrity in financial reporting
Principle 5 Make timely and balances disclosure
Principle 6 Respect the rights of shareholders
Principle 7 Recognise and manage risk
Principle 8 Remunerate fairly and responsibly
For further information on corporate governance policies adopted by Katana, refer to our websitewww.katanacapital.com.au
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
4 9
Principle
Corporate Governance best practice recommendation
Compliance
1.1
Establish and disclose the functions reserved to the Board and those delegated to senior executives
The Board has a Corporate Governance Statement which outlines the role and duties of the Board.
The Company considers that the primary responsibility of the Board is to oversee the Company’s business
activities and management for the benefit of the shareholders by:
(a) supervising the Company’s framework of control and accountability systems to enable risk to be assessed
and managed which includes but is not limited to the points noted below:
(b) ensuring the Company is properly managed by:
(i) setting and communicating clear objectives;
(ii) appointing and removing the Managing Director of the Company;
(iii) ratifying the appointment and, where appropriate, the removal of the Chief Financial Officer and the
Company secretary;
(v) input into and final approval of management’s development of corporate strategy and performance
objectives;
(iv) reviewing and ratifying systems of risk management and internal compliance and control, codes of
conduct, and legal compliance;
(vi) monitoring senior management’s performance and implementation of strategy, and ensuring appropriate
resources are available;
(c) approving and monitoring the progress of major capital expenditure, capital management, and acquisitions
and divestitures;
(d) approval of the annual budget;
(e) monitoring the financial performance of the Company;
(f) approving and monitoring financial and other reporting;
(g) overall corporate governance of the Company, including conducting regular reviews of the balance of
responsibilities within the Company to ensure division of functions remain appropriate to the needs of
the Company;
(h) liaising with the Company’s external auditors either directly or via the Audit Committee as appropriate;
and
(i) monitoring, and ensuring compliance with, all of the Company’s legal obligations, in particular those
obligations relating to the environment, native title, cultural heritage and occupational health and safety.
Katana does not employ a Chief Executive Officer or Managing Director, but instead has a Fund Manager that is
responsible for the Investment Risk Management and management of the equity Portfolio. The Fund Manager is
responsible for running the affairs of the Company under delegated authority from the Board and to implement
the policies and strategy set by the Board. In carrying out their responsibilities the Fund Manager must report to
the Board in a timely manner and ensure all reports to the Board present a true and fair view of the Company’s
financial condition and operational results.
Matters which are not covered by the delegations require Board approval.
The Corporate Governance Statement is available on the Company’s website in the Corporate Governance
section.
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K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Corporate Governance Statement
Principle
Corporate Governance best
practice recommendation
Compliance
How we comply
1.2
Disclose the process for evaluating
the performance of senior
executives
1.3
1.3.1
1.3.2
Provide the following information in
the annual report:
An explanation of any departure
from recommendations 1.1, 1.2 and
1.3
Whether a performance evaluation
for senior executives has taken
place in the reporting period and
whether it was in accordance with
the process disclosed.
2.1
A majority of the Board should be
independent directors
2.2
The chairperson should be an
independent director
2.3
The roles of chairperson and chief
executive officer should not be
exercised by the same individual
There are no senior executives in the Company, however the board
reviews the performance of the Fund Manager in accordance with the
Mandate. Refer to Annual Report for Katana’s mandate with the Fund
Manager.
Not applicable.
Refer 1.2, performance of the Fund Manager is reviewed by the board in
accordance with the Fund Manager’s Mandate.
The majority of the Board is independent where an independent
director is a non-executive director who meets the criteria for
independence included in the ASX Best Practice Recommendations.
The company currently has two out three of its directors classified as
independent directors.
The Chairman, Mr Gooding as noted above in 2.1 does not meet
the Governance Council’s independence criteria, however the board
believes that Mr Gooding will at all times act independently and
discharge his duties for the benefit of all shareholders.
Mr Gooding is not strictly independent as noted above due to him
being a Partner of Chartered Accounting firm Gooding Pervan, which
from time to time provides professional tax advice as required on a
commercial basis, for further information refer to the related party note
in the accounts. This is not considered to be a material transaction for
Mr Gooding.
As noted in 1.1 & 1.2 above Katana does not employ a Chief Executive
Officer but instead has a Mandate with the Fund Manager which covers
some of the functions a traditional Chief Executive Officer would
ordinarily perform. The Chairman, Mr Dalton Gooding, facilitates the
relationship between the Board and the Fund Manager.
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
5 1
Principle
Corporate Governance best
practice recommendation
Compliance
How we comply
2.4
The Board should establish a
nomination committee
2.5
The process for evaluating the
performance of the Board, its
committees and individual directors
should be disclosed.
2.6
2.6.1
2.6.2
2.6.3
2.6.4
Provide the following information in
the annual report:
The skills, expertise and experience
relevant to the position of director
held by each director in office at the
date of the annual report
The names of the directors
considered by the Board to be
independent directors and the
Company’s materially thresholds
A statement as to whether there is
a procedure agreed by the Board
of directors to take independent
professional advice at the expense
of the Company
The Board should state its reasons
if it considers a director to be
independent notwithstanding
that the director does not meet
the definition of independence
contained in the ASX Guidelines
The Board does not have a Nomination Committee. The duties of such
committee have been considered and adopted by the full Board.
The Company does not have a documented procedure for the
selection and appointment of directors. The Board informally reviews
the skill set of and market expectations for its directors on a regular
basis and considers these factors when appointing/re-electing directors.
The Board invites persons with relevant industry experience and
financial experience to assist it in its appointment of directors.
The Company does not have a documented procedure for the
evaluating the performance of the Board, its committees and directors.
An evaluation of the performance of the Board and its directors is
undertaken informally each year. The Chairman of the Board is the
driver of this process. This year the Chairman conducted interviews
with each director.
The evaluation of the performance of the Board’s various committees
is undertaken on an exception basis. This is also an informal process
which is driven by the Chairman of the Board.
Provided in the Annual Report.
Provided in the Annual Report.
Individual directors have the right in connection with their duties and
responsibilities as directors to seek independent professional advice
at the Company’s expense. The engagement of an outside adviser is
subject to prior approval of the Chairman and this will not be withheld
unnecessarily. If appropriate, any advice so received will be made
available to all Board members.
Refer 2.2.
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K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Corporate Governance Statement
Principle
Corporate Governance best
practice recommendation
Compliance
How we comply
Provided in the Annual Report.
Provided in the Annual Report.
An evaluation of the Board, its committees and directors was
undertaken and was in accordance with the process disclosed at 2.5.
Refer to comments at 2.1 and 2.2.
2.6.5
2.6.6
2.6.7
2.6.8
The period of office held by each
director in office at the date of the
annual report
The names of members of the
nomination committee and their
attendance at meetings of the
committee
Whether a performance evaluation
for the Board, its committees and
directors has taken place in the
reporting period and whether it
was in accordance with the process
disclosed
An explanation of any departure
from recommendations 2.1, 2.2, 2.3,
2.4 and 2.5
The following material should be
made publicly available, ideally on
the Company’s website in a clearly
marked corporate governance
section:
(a) a description of the procedure
for the selection and
appointment of new directors
to the Board
Refer 2.4 – The Board informally reviews the skill set of and market
expectations for its directors on a regular basis and considers these
factors when appointing/re-electing directors. The Board invites persons
with relevant industry experience and financial experience to assist it in
its appointment of directors.
(b) the charter of the nomination
Refer 2.4
committee or a summary of
the role, rights, responsibilities
and membership requirements
for the committee
(c) the nomination committee’s
Refer 2.4
policy for the appointment of
directors
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
5 3
Principle
Corporate Governance best
practice recommendation
Compliance
How we comply
3.1
Establish a code of conduct and
disclose the code or a summary of
the code as to:
(a) the practices necessary to
maintain confidence in the
Company’s integrity;
(b) the practices necessary to
take into account their legal
obligations and the reasonable
expectations of their
stakeholders;
(c) the responsibility and
accountability of individuals
for reporting and investigating
reports of unethical practices;
3.2
Establish a policy concerning trading
in Company securities by directors,
senior executives and employees
and disclose the policy or a
summary of the policy
The Company has implemented a suite of policies including a Code
of Business Conduct which provides guidelines aimed at maintaining
high ethical standards and corporate behaviour. The principals of the
policies include:
• Respect the law and act in accordance with it;
• Respect confidentiality and not misuse company information,
assets or resources;
• Avoid real or perceived conflicts of interest;
• Act in the best interest of stakeholders; and
• Perform their duties in ways that minimise environmental impacts
and maximise workplace safety.
Directors and employees are expected to comply with all Company
policies and to act professionally with integrity, honesty and responsibility
at all times.
The Company’s security trading policy imposes basic trading restrictions
on all directors and officers (including the Fund Manager) of the
Company with “inside information” and additional trading restrictions on
the directors of the Company. “Inside information” is information that:
• Is not generally available; and
• If it were generally available, it would, or would be likely to
influence investors in deciding whether to buy or sell the
Company’s securities.
Directors and employees are prohibited from trading in the Company’s
securities where they possess information which is not generally
available and that information, if readily available, may have a material
effect on the share price of the Company. Further, directors, officers
and employees involved in the preparation and release of financial
statements may not trade in the company’s securities for the period
commencing four weeks prior to the announcement of the results.
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K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Corporate Governance Statement
Principle
Corporate Governance best
practice recommendation
Compliance
How we comply
3.3
3.3.1
Provide the following information in
the annual report:
An explanation of any departure
from recommendations 3.1, 3.2 and
3.3
The following material should be
made publicly available, ideally on
the Company’s website in a clearly
marked corporate governance
section:
(a) any applicable code of conduct
or a summary of its main
provisions
(b) the trading policy or summary
of its main provisions
4.1
The Board should establish an audit
committee
4.2
Structure the audit committee so
that it consists of:
4.3
4.4
a) only non-executive directors
b) majority of independent directors
c) independent chairperson, who is
not the chairperson of the Board
d) at least three members
The audit committee should have a
formal charter
Provide the following information in
the annual report:
(a) Details of the names and
qualifications of those
appointed to the audit
committee and their
attendance at meetings of the
committee
(b) The number of meetings of
the audit committee
Not applicable
The Code of Conduct is available on the Company’s website in the
Shareholder Corporate Governance section.
The Share Trading Policy on Dealing Rules for Employees and Directors
is available on the Company’s website in the Corporate Governance
section.
The Audit, Compliance and Risk Committee assists the Board to meet
its oversight responsibilities in relation to the Company’s financial
reporting, internal control structure, risk management procedures
and the internal and external audit function. In doing so, it is the
Audit and Risk Committee’s responsibility to maintain free and open
communications between the Committee, the external auditors, the
internal auditors and the management of the Company.
The committee complies with the structure as required by the Best
Practice Recommendation 4.2.
The Audit, Compliance and Risk Committee Charter is available on the
Company’s website in the Corporate Governance section.
Refer to Director’s Report
Refer to Director’s Report
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
5 5
Principle
Corporate Governance best
practice recommendation
Compliance
How we comply
The following material should be
made publicly available, ideally on
the Company’s website in a clearly
marked corporate governance
section:
(a) the audit committee charter
(b) information on procedures for
the selection and appointment
of the external auditor, and for
the rotation of external audit
engagement partners
Establish written policies and
procedures designed to ensure
compliance with ASX Listing Rule
disclosure requirements and to
ensure accountability at a senior
executive level for that compliance.
These policies or a summary of the
policies should be disclosed.
Provide the following information in
the annual report:
An explanation of any departures
from recommendations 5.1and 5.2
and reasons for the departure
The following material should be
publicly available, ideally on the
Company’s website in a clearly
marked corporate governance
section:
•
A summary of the policies and
procedures designed to guide
compliance with Listing Rule
disclosure requirements
The charter of the Audit, Compliance and Risk Committee is available
on the Company’s website in the Corporate Governance section.
The committee manages the relationship between the Company and
external auditor on behalf of the Board. It recommends to the Board
potential auditors for appointment, re-appointment or replacement, the
terms of engagement and remuneration of the external auditor.
The Company’s continuous disclosure policy has been adopted to
ensure compliance with obligations under the continuous disclosure
regime of the Corporations Law and the Listing Rules of the Australian
Stock Exchange Limited and to ensure that all Katana shareholders have
access to material information about the Company and its prospects.
The disclosure obligations include:
All employees, Company officers and Directors must comply with the
ASX Listing Rules and Corporations Law provisions relating to a timely
disclosure of price sensitive information to the ASX. The Company
does this by releasing written announcements to the ASX.
The Fund Manager together with the board are accountable for the
establishment, communication and maintenance of this policy and
ensuring that material information is disclosed to the ASX.
Not applicable.
The Company’s Shareholder Communications Policy is available on the
Company’s website in the Corporate Governance section.
5.1
5.2
5.2.1
5.2.2
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K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Corporate Governance Statement
Principle
Corporate Governance best
practice recommendation
Compliance
How we comply
6.1
Design and disclose a
communications strategy to
promote effective communication
with shareholders and encourage
effective participation at general
meetings
The Company places considerable importance on effective
communications with shareholders and other stakeholders. Katana’s
communication strategy requires communication with shareholders
and other stakeholders in an open, regular and timely manner so that
the market has sufficient information to make informed investment
decisions on the operations and results of the company. The strategy
provides for the use of systems that ensure a regular and timely
release of information about the company is provided to shareholders.
Mechanisms employed include:
• Announcements lodged with ASX;
• Half Yearly Report
• Monthly Net Tangible Asset Backing ASX disclosure;
• Presentations at the Annual General Meeting;
• Annual Report
• Promote effective communication with shareholders; and
• Encourage shareholder participation at AGMs.
Not applicable.
The Company’s Shareholder Communications Policy is available on the
Company’s website in the Corporate Governance section.
6.2
6.2.1
6.2.2
Provide the following information in
the annual report:
An explanation of any departures
from recommendation and reasons
for the departure
The Company should describe
how it will communicate with its
shareholders publically, ideally by
posting this information on the
company’s website in a clearly
marked corporate governance
section.
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
5 7
Principle
Corporate Governance best
practice recommendation
Compliance
How we comply
7.1
The Company should establish
policies on risk oversight and
management.
7.2
The Board should require
management to design and
implement the risk management
and internal control system to
manage the company’s material risks
and report to it on whether those
risks are being managed effectively.
The Board should disclose that
management has reported to
it as to the effectiveness of the
company’s management of its
material business risks.
The Company is committed to the identification; monitoring and
management of risks associated with its business activities and has
embedded in its management and reporting systems a number of risk
management controls. The Fund Manager is charged with implementing
appropriate risk management systems within the Company and in
particular with the investment process.
The Board monitors and receives advice on areas of operational and
financial risk, and considers strategies for appropriate risk management
arrangements.
Specific areas of risk identified initially and which will be regularly
considered at Board meetings include financial performance,
performance of portfolio, compliance within regulatory framework,
markets, statutory compliance and continuous disclosure obligations.
The Fund Manager has its own Investment Committee that regularly
reviews the Company’s portfolio and reviews the performance
of individual stocks. The Investment Committee also makes
recommendations on significant investments and conducts its own
research to assist with this process.
The annual report details material financial and investment risks which
arose during the reporting period (see notes to financial statements).
As part of the reporting process the Fund Manager has provided the
Board prior to the Board approving the annual and half-yearly accounts,
a written statement that the integrity of the financial statements (as
per ASX Recommendation 4.1) are founded on a system of risk
management and internal compliance and control which implements
the Board’s policies and the Company’s risk management and internal
control system is operating efficiently and effectively in all material
matters.
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K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Corporate Governance Statement
Principle
Corporate Governance best
practice recommendation
Compliance
How we comply
7.3
7.4
7.4.1
7.4.2
7.4.3
8.1
8.2
The Board should disclose
whether it has received assurance
from the Chief Executive Officer
and the Chief Financial Officer
that the declaration provided in
accordance with section 295A of
the Corporations Act is founded on
a sound system of risk management
and internal control and that the
system is operating effectively in
all material respects in relation to
financial reporting risks
Provide the following information in
the annual report:
An explanation of any departures
from recommendations 7.1, 7.2,
7.3 and 7.4 and reasons for the
departure
Whether the Board has received
the report from management under
recommendation 7.2
Whether the Board has received
assurance from the Chief Executive
Officer and Chief Financial Officer
under recommendation 7.3
The following material should be
made publicly available, ideally on
the Company’s website in a clearly
marked corporate governance
section:
•
a summary of the Company’s
policies on risk oversight
and management of material
business risks
The Board should establish a
remuneration committee
Companies should clearly distinguish
the structure of non-executive
directors’ remuneration from that
of executive directors and senior
executives
The Board has received assurance from the Fund Manager that the
s295A declaration is founded on a sound system of risk management
and internal control and the system is operating effectively in all material
respects in relation to financial risks.
Not applicable.
The Board has received the report from the Fund Manager pursuant to
recommendation 7.2 and periodically receives and reviews a summary
of significant risks.
The Board has received the assurance in accordance with
recommendation 7.3
The charter of the Audit and Risk Committee is available on the
Company’s website in the Corporate Governance section.
As the company does not presently have any employees including
employment of a Managing Director and Senior Executives there is no
requirement for remuneration committee
Refer Director’s Report
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
5 9
Principle
Corporate Governance best
practice recommendation
Compliance
How we comply
8.3
8.3.1
8.3.2
8.3.3
Provide the following information in
the annual report:
the names of the members of
the remuneration committee and
their attendance at meetings of the
committee, or where the Company
does not have a remuneration
committee, how the functions of
a remunerations committee are
carried out
the existence and terms of any
schemes for retirement benefits,
other than superannuation, for non-
executive directors
An explanation of any departures
from recommendation 8.1, 8.2 and
8.3 and reasons for the departure
The following material should be
made publicly available, ideally on
the Company’s website in a clearly
marked corporate governance
section:
Refer 8.1
Refer Director’s Report
Not applicable
(a) the charter of the
Refer 8.1
remuneration committee
or a summary of the role,
rights, responsibilities and
membership requirements for
that committee;
(b) a summary of the company’s
policy on prohibiting entering
into transactions in associated
products which limit the
economic risk of participating
in unvested entitlements under
any equity-based remuneration
schemes.
The Company does not enter into transactions in associated products
which limit the economic risk of participating in unvested entitlements
under any equity-based remuneration schemes.
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K ATA N A C A P I TA L LT D 2 0 0 9 A n n u a l R e p o r t
Additional ASX Information
KATANA CAPITAL LIMITED
ORDINARY FULLY PAID SHARES (TOTAL) As of 30 Sep 2009
Range of Units Snapshot
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 9,999,999,999
Rounding
Total
Unmarketable Parcels
Total holders
13
45
158
329
76
Units
4,614
186,170
1,322,367
11,889,511
28,091,651
Composition : ORD
% of Issued Capital
0.01
0.45
3.19
28.65
67.70
0.00
621
41,494,313
100.00
Minimum $ 500.00 parcel at $ 0.71 per unit
705
12
Minimum Parcel Size
Holders
Units
3823
Corporate Directory
Katana Capital Limited
ABN 56 116 054 301
Directors
Dalton Gooding
Peter Wallace
Giuliano Sala Tenna
Company Secretary
Gabriel Chiappini
Registered Office
Level 36, 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
Facsimile
(08) 9323 2033
Auditor
Ernst & Young
The Ernst & Young Building
11 Mounts Bay Road
PERTH WA 6000
ASX Code: KAT
K ATA N A C A P I TA L LT D 2 0 0 9 A n nu a l R e p o r t
6 1
KATANA CAPITAL LIMITED
Top Holders Snapshot - Ungrouped
ORDINARY FULLY PAID SHARES (TOTAL) As of 30 Sep 2009
Composition : ORD
Rank Name
Address
Units % of Units
AUSTRALIAN EXECUTOR TRUSTEES LIMITED
GPO BOX 546, ADELAIDE SA, 5001
2,286,318
WONDER HOLDINGS PTY LTD
6 ALNESS STREET, APPLECROSS WA, 6153
2,286,060
HOPERIDGE ENTERPRISES PTY LTD
C/- PORTFOLIO ADMIN, GPO BOX 4718,
MELBOURNE VIC, 3001
2,000,000
MRS LINDA SALA TENNA + MRS LISA SHALLARD
GPO BOX Z5364, PERTH ST GEORGES TCE WA, 6831
1,091,074
JOVE PTY LTD
6 PULO ROAD, BRENTWOOD WA, 6153
ORION EQUITIES LIMITED
COOLAH HOLDINGS PTY LTD
TAXA JUNO NOMINEES PTY LTD
LEVEL 14, THE FORREST CENTRE, 221 ST GEORGES
TERRACE, PERTH WA, 6000
C/- JT PORTFOLIO ADMIN, GPO BOX 4718,
MELBOURNE VIC, 3001
4 MYAMYN STREET, ARMADALE VIC, 3143
830,000
1.
2.
3.
4.
5.
6.
7.
8.
9.
MR ROMANO SALA TENNA + MRS LINDA SALA TENNA
GPO BOX Z5364, PERTH ST GEORGES TCE WA,
6831
10.
MISS LISA DUPEROUZEL
GPO BOX Z5364, PERTH ST GEORGES TCE WA,
6831
11.
MR BRAD JOHN SHALLARD + MRS LISA MAREE
GPO BOX Z5364, PERTH ST GEORGES TCE WA,
DUPEROUZEL
6831
MR STEPHEN JAMES LAMBERT + MRS RUTH LYNETTE
12.
LAMBERT + MR SIMON LEE LAMBERT
13.
MRS LINDA SALA TENNA
C/- PORT ADMIN GPO BOX 4718, MELBOURNE
VIC, 3001
681,165
1.64
GPO BOX Z5364, PERTH ST GEORGES TCE WA,
6831
14.
15.
16.
17.
18.
19.
20.
UNITING CHURCH IN AUSTRALIA PROPERTY TRUST
(WA)
GPO BOX M952, PERTH WA, 6843
CAMBO INVESTMENTS PTY LTD
21A DOUGLAS STREET, TOORAK VIC, 3142
KEFIR PTY LTD
11 IRVINE STREET, PEPPERMINT GROVE WA, 6011
METHUEN HOLDINGS PTY LTD
PO BOX 874, WEST PERTH WA, 6872
COLLORI PTY LTD
MR LAWRENCE HENRY DA SILVA
UNIT 1401/323 BAYVIEW STREET, HOLLYWELL
QLD, 4216
22 LORONG PUNTONG, COUNTRY GRANDEUR,
#13-01 576439, SINGAPORE
S & M O’REILLY PTY LTD
540 BONA VISTA ROAD, BONA VISTA VIC, 3820
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (TOTAL)
Total Remaining Holders Balance
5.51
5.51
4.82
2.63
2.56
2.46
2.43
2.00
1.90
1.75
1.66
1,063,639
1,020,000
1,010,000
789,730
726,896
687,744
519,559
509,363
500,000
500,000
500,000
400,000
400,000
1.25
1.23
1.20
1.20
1.20
0.96
0.96
400,000
18,201,548
23,292,765
Katana Capital Ltd
ABN 56 116 054 301
Level 36, Exchange Plaza
2, The Esplanade Perth, Western Australia 6000
Telephone: (08) 9326 7672 Facsimile: (08) 9326 7676
www.katanacapital.com.au