22 july for personal use only - australian securities exchange · the last yea en investig...

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APA FINANCIAL SERVICES LTD ACN 057 046 607

2011 ANNUAL REPORT

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CONTENTS

Page

Corporate directory 1

Directors’ report 2

Auditor’s independence declaration 9

Corporate governance statement 10

Statement of comprehensive income 16

Statement of financial position 17

Statement of changes in equity 18

Statement of cash flows 19

Notes to the financial statements 20

Directors’ declaration 39

Independent auditor’s report to the members 40

Additional Information 42

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CORPORATE DIRECTORY

For the year ended 30 June 2011

APA Financial Services Ltd | Annual Report 2011| Page 1

Directors Share registry

Michael Hackett Non-Executive Chairman Computershare Investor Services Pty Limited

Graham Anderson Non-Executive Director Level 2

Steven Rowley Non-Executive Director 45 St Georges Terrace

Perth WA 6000

Investor Enquiries: 1300 557 010

Company secretary Auditor

Richard Brennan Hayes Knight Audit (QLD) Pty Ltd

Level 19

127 Creek Street

Brisbane QLD 4000

Telephone: (07) 3229 2022

Facsimile: (07) 3229 3277

Registered office and principal place of business Stock exchange listing

Level 1 Australian Stock Exchange Limited

41 Edward Street (Home Branch - Perth)

Brisbane QLD 4001 ASX Code: APP

Telephone: (07) 3020 3020

Facsimile: (07) 3020 3080

Bankers Website

Macquarie Bank Limited www.apafs.com.au

Allendale Square

77 St George's Terrace

Perth WA 6000

Westpac Banking Corporation

1257 Hay Street

West Perth WA 6005

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http://www.apafs.com.au/

DIRECTORS’ REPORT



Your Directors present their report on the Company for the year ended 30 June 2011.

DIRECTORS

The following persons were Directors of APA Financial Services Ltd during the financial year and up to the date

of this report:

Michael Hackett Non-Executive Chairman (Appointed Chairman 16 December 2010)

Graham Anderson Non -Executive Director (Resigned Chairman 16 December 2010)

Steven Rowley Non-Executive Director

PRINCIPAL ACTIVITIES

During the year the principal continuing activity of the Company was investment. However during the

financial year, the Directors commenced preliminary activities in corporate advisory areas. Refer to the section

headed Operating and Financial Review for further details of this activity.

DIVIDENDS

No dividends were paid during the year and the Directors do not recommend the payment of a dividend.

OPERATING AND FINANCIAL REVIEW

The commencement of corporate advisory activities has evolved from the Directors investigation of potential

investments for the Company. The finding in several was that while the potential investees were considered

not suitable for direct investment by the Company, there appeared to be considerable scope to obtain

remuneration for advisory assistance.

No income from this activity was derived in the year ended 30 June 2011, however, a small but encouraging

pipeline of prospective business has been developed which may provide revenue in the 2012 year. Currently

the services provided by the Company have been provided by the Directors on a nil charge basis to attempt

to identify and establish a future for the Company.

The Directors are also considering further involvement in the advisory area including participation as a

financial services licensee, continuing with the Company’s historical business activity. The Directors will report

further to shareholders on this matter at the forthcoming annual general meeting.

The loss of the Company for the year after income tax was $56,575 (2010: Profit $206,557).

The Company disposed of its investment in Australian Portfolio Administrators Pty Ltd and recognised a share of

net loss of associates amounting to $32,435 in the 2010 comparative year.

Other operating costs of $66,449 have been reduced from $258,080 in the 2010 comparative year as a result of

cost cutting and rationalisation of operations over the last 12 months.

The Company remains debt free and the Board has continued to evaluate other corporate opportunities for

the Company, both complimentary and independent to the existing investment in OneVue Holdings Limited.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

During the year the Company made the following changes:

Graham Anderson, while remaining as a non executive director, stepped down as Chairman and

Company Secretary. Michael Hackett was appointed as Chairman and Richard Brennan as

Company Secretary.

The registered office of the Company was changed to Level 1, 41 Edward Street, Brisbane Qld 4000,

which is the Brisbane executive office of Trustees Australia Limited, the Company’s largest shareholder.

Effective for the half year ended 31 December 2010, the financial accounts were prepared by

Corporate Solutions Pty Ltd, a subsidiary of Trustees Australia Limited, which also assumed responsibility

for future day-to-day accounting and communications.

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DIRECTORS’ REPORT



SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS (cont’d)

Michael Hackett is a Director and Richard Brennan is Company Secretary of Trustees Australia Limited.

EVENTS SUBSEQUENT TO REPORTING DATE

No matters have arisen since 30 June 2011 that have significantly affected or may significantly affect the

Company.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

The Company will continue to evaluate a number of corporate opportunities for the Company, both

complimentary and independent to the existing investment in OneVue Holdings Limited that could provide

growth for shareholders.

INFORMATION ON DIRECTORS

Michael Hackett Non-Executive Chairman

Qualifications Mr Hackett is a member of the Institute of Chartered Accountants.

Experience Mr Hackett is a Chartered Accountant who is the Managing Director of

Trustees Australia Limited (ASX CODE: TAU). He has a Bachelor of Commerce

from the University of Queensland and is a Fellow of the Institute of Chartered

Accountants in Australia. Michael has had considerable experience in

managing and operating a wide range of businesses and property

developments.

Interest in Shares and

Options

20,855,325 Ordinary Shares in APA Financial Services Ltd.

Special Responsibilities Mr Hackett is a Member of the Audit Committee, Nominating Committee and

Remuneration Committee.

Directorships held in other

listed entities in the last

three years

Mr Hackett is currently a Director of Trustees Australia Limited.

Graham Anderson Non-Executive Director

Qualifications Mr Anderson is a member of the Institute of Chartered Accountants.

Experience Mr Anderson is a Chartered Accountant who operates his own specialist

accounting and management consultancy practice. He has extensive

experience in providing a range of corporate services to ASX Listed

companies.


Options


Special Responsibilities Mr Anderson is a Member of the Audit Committee, Nominating Committee

and Remuneration Committee.



three years

Mr Anderson is currently a Director of Echo Resources Ltd, Mako Energy Ltd,

Pegasus Metals Limited and Tangiers Petroleum Ltd and a former Director of

Dynasty Metals Australia Limited and Ethan Minerals Ltd.

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DIRECTORS’ REPORT



INFORMATION ON DIRECTORS (cont’d)

Steven Rowley Non-Executive Director

Qualifications Nil

Experience Mr Rowley has been a Board member of APA Financial Services Ltd since 1

January 2002. He has had a career in financial services spanning more than

30 years. Having a background as an insurance multi agent, Steven has

developed and maintained strong relationships with many of the life offices.

Since then, Steven obtained a proper authority with IAPS and in 2000 founded

the financial planning firm – London Partners VIC Pty Ltd, of which he is also

the Managing Director.


Options


Special Responsibilities Mr Rowley is a Member of the Audit Committee, Nominating Committee and

Remuneration Committee.



three years

No other current or former Directorships with ASX listed companies.

INFORMATION ON COMPANY SECRETARY

Richard Brennan Company Secretary

Qualifications B.Sc, B.Bus

Experience Mr Brennan was appointed company secretary of APA Financial Services Ltd

on 16 December 2010. Richard has consulted to Trustees Australia Limited for

over 8 years as special project manager and financial accountant. He is also

the company secretary of Trustees Australia Limited and all of its subsidiary

companies.


Options

Nil

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DIRECTORS’ REPORT



MEETINGS OF DIRECTORS

The number of meetings of the Company’s Board of Directors and of each Board committee held during the

year ended 30 June 2011, including the number of meetings attended by each Director were:

Directors

Directors’ Meetings Audit Committee Meetings

Number held

while a Director Number attended

Number held while

a Director

Number

attended

Graham Anderson 3 3 - -

Michael Hackett 3 3 - -

Steven Rowley 3 3 - -

The Audit, Nominating and Remuneration Committees did not meet separately during the year.

SHARES UNDER OPTION

There are no unissued ordinary shares of the Company under option at the date of this report. All options in the table below have expired or were issued under the Employee Share Option Plan (ESOP) and did not meet the terms and conditions of two years of continuous service following the issue of the options and have consequently been cancelled.

Grant date

Vesting date

Expiry date

Exercise

price

Value per

option at

grant date

Number

of Options

ESOP shares

28 October 2006 27 October 2008 27 October 2010 $0.50 $0.26 50,000

22 June 2007 21 June 2009 21 June 2011 $0.55 $0.23 30,000

14 August 2007 13 August 2009 13 August 2011 $0.50 $0.21 50,000

21 September 2007 20 September 2009 20 September 2011 $0.45 $0.15 110,000

4 December 2007 3 December 2009 3 December 2011 $0.50 $0.20 450,000

Total 690,000

No options were exercised during the year (2010: nil).

REMUNERATION REPORT (audited)

This report details the nature and amount of remuneration for each Director of APA Financial Services Ltd and

for the executives receiving the highest remuneration.

The remuneration policy has been designed to align Director and executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific long-term incentives based on key performance areas affecting the Company’s financial results. The Board of APA Financial Services Ltd believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best executives and Directors to run and manage the Company, as well as create goal congruence between Directors, executives and shareholders.

The remuneration report is set out under the following main headings:

A Principles used to determine the nature and amount of remuneration

B Details of remuneration

C Service agreements

D Share-based compensation

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DIRECTORS’ REPORT



REMUNERATION REPORT (audited) (cont’d)

The information provided includes remuneration disclosures that are required by Section 300 A (1) of the

Corporations Act 2001.

A Principles used to determine the nature and amount of remuneration

The Board assesses the appropriateness of the nature and amount of remuneration of Directors and senior

executives 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 and executive

team. In accordance with best practice corporate governance, the structure of non-executive director and

executive remuneration is separate and distinct.

Non-Executive Directors

The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to

attract and retain Directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.

Fees and payments to non-executive Directors reflect the demands which are made on, and the

responsibilities of, the Directors. Non-executive Directors’ fees and payments are reviewed annually by the

Board. The Board has received advice of independent remuneration consultants to ensure non-executive

Directors’ fees and payments are appropriate and in line with the market. The chairman’s fee is determined

independently to the fees of non-executive Directors based on comparative roles in the external market.

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. The maximum currently stands at $240,000 per

annum.

There is no direct link between remuneration paid to any non-executive Directors and corporate performance.

There are no termination or retirement benefits for non-executive Directors other than statutory

superannuation.

Short-term incentives

No bonus payments were made for the year ended 30 June 2011.

Long-term incentives

Long term incentives are designed to reward executive Directors, officers and senior management for their

role in achieving corporate objectives. These incentives are provided as options issued either under the terms

and conditions of the Company’s Employee Share Option Plan or otherwise under the terms and conditions

determined at the time of issue by the Board. Other remuneration

There is no other performance-linked remuneration. B Details of remuneration

Directors

The following persons were Directors of APA Financial Services Ltd during the financial year:

Michael Hackett (Non Executive Chairman) Graham Anderson (Non Executive Director) Steven Rowley (Non Executive Director)

Other key management personnel

There were no other key management personnel in the 2011 financial year.

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DIRECTORS’ REPORT



REMUNERATION REPORT (audited) (cont’d)

2011

Short-term benefits Post-

employment

Share-based

payment

Directors’

fees

Salary

and

wages

Motor

vehicle

Super

contributions Options Total

$ $ $ $ $ $


Graham Anderson - - - - - -

Steven Rowley - - - - - -

Michael Hackett - - - - - -

Total - - - - - -

2010

Short-term benefits Post-

employment

Share-based

payment

Directors’

fees

Salary

and

wages

Motor

vehicle

Super

contributions Options Total

$ $ $ $ $ $


Graham Anderson - - - - - -

Steven Rowley - - - - - -

Michael Hackett - - - - - -

Total - - - - - -

The remuneration of the Directors is fixed. There is not a component linked to performance. C Service Agreements There are no employment contracts or service contracts in place at the date of this report. D Share-based compensation Shares During the year there were no shares issued as equity compensation benefits. Options Options are granted by the Board as an incentive to key employees. Options are granted for no consideration and have a term of four years. Details of options over ordinary shares in the Company provided as remuneration to each Director of the Company are set out below.

Directors

Number of options granted

during the year

Number of options vested during

the year

2011 2010 2011 2010

Steven Rowley - - - -

Michael Hackett - - - -

Graham Anderson - - - -

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DIRECTORS’ REPORT



INDEMNIFYING OFFICERS

During the financial year, the Company has paid an insurance premium in respect of a Directors’ and Officers’ Liability Insurance Contract. The insurance premium is paid to insure each of the Directors and officers against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of Director of the Company, other than conduct involving a wilful breach of duty or improper use of information or position to gain personal advantage.

PROCEEDINGS ON BEHALF OF COMPANY

No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under

section 237 of the Corporations Act 2001.

ASSURANCE SERVICES

During the year, the Company’s auditor, Hayes Knight Audit (QLD) Pty Ltd, has not performed any other services apart from their statutory duties. The previous auditors for the year ended 30 June 2010 were BDO Audit (WA) Pty Ltd. Details of the amounts paid to the auditor of the Company are set out below. There were no non-audit services provided during the year by Hayes Knight Audit (QLD) Pty Ltd and its related practices or by BDO Audit (WA) Pty Ltd for the year ended 30 June 2010.

2011 2010

Statutory audit $ $

- audit and review of financial reports – Hayes Knight Audit (QLD) Pty Ltd 11,500 -

- audit and review of financial reports – BDO Audit (WA) Pty Ltd - 27,222

AUDITOR’S INDEPENDENCE DECLARATION A copy of the lead auditor’s independence declaration as required under section 307C of the Corporations Act set out on page 9.

This Directors’ Report, incorporating the remuneration report is signed in accordance with a resolution of the

Directors

Michael Hackett

Director

Dated the 20 day of July 2011

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INDEPENDENT AUDITOR’S DECLARATION



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CORPORATE GOVERNANCE STATEMENT



The Board of Directors is responsible for corporate governance of the Company. The Board considers good

corporate governance a matter of high importance and aims for best practice in the area of corporate

governance. This section describes the main corporate governance practices of the Company.

In reviewing the corporate governance structure of the Company, the Board has reviewed and considered

the ASX Corporate Governance Council’s recommendations. Comment is made where key principles are not

followed due to the size and nature of the Company.

Board responsibilities

The Board's key responsibilities are:

overseeing the operation of the Company including establishing, reviewing and changing corporate

strategies;

ensuring that appropriate internal control, reporting, risk management and compliance frameworks are in

place;

appointing, removing, reviewing and monitoring the performance of the Chief Executive Officer to whom

the Board have delegated the day to day management of the Company

approval of the annual report (including the accounts), the budget and the business plan of the

Company;

regular (at present at least monthly) review of the Company's performance against the budget and the

business plan;

approving material contractual arrangements including all major investments and strategic commitments;

making decisions concerning the Company's capital structure, the issue of any new securities and the

dividend policy;

enhancing and protecting the reputation of the Company;

establishing and monitoring appropriate committees of the Board;

reporting to shareholders; and

ensuring the Company's compliance with all legal requirements including the ASX Listing Rules.

Structure of Board

The Company for the year under review had 3 Directors on the Board. A Director may be appointed by

resolution passed at a general meeting or in the case of casual vacancies, by the Directors.

Potential additions to the Board are carefully considered by the Board prior to being nominated to

shareholders or appointed as casual vacancies.

The skills, experience, expertise and period of office of each of the Directors are set out in the Directors’

Report.

Under ASX guidelines none of the current Directors are considered to be an independent Director. The Board

is satisfied that the structure of the Board is appropriate for the size of the Company and the nature of its

operations and is a cost effective structure for managing the Company.

The Company facilitates and pays for Directors and Board committee members to obtain professional

independent advice if they require it.

Code of Conduct

The Company has a Code of Conduct as well as a number of internal policies and operating procedures

aimed at providing guidance to Directors, senior management and employees on the standards of personal

and corporate behaviour required of all the Company personnel.

The Code of Conduct covers specific issues such as trading in Company securities by Directors, officers and

employees and also provides guidance on how to deal with business issues in a manner that is consistent with

the Company's responsibilities to its shareholders.

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Audit and Risk Committee

The Board has an audit and risk committee. Given the current size of the Board all Board members are

responsible for ensuring:

the system of internal control which management has established effectively safeguards the assets of the

economic entity;

accounting records are properly maintained in accordance with statutory requirements;

financial information provided to shareholders is accurate and reliable; and

the external audit function is effective.

The Board is responsible for the appointment of the external auditor and ensures that the incumbent firm (and

the responsible service team) has suitable qualifications and experience to conduct an effective audit.

The external audit partner will be required to rotate every five balance dates in accordance with Clerp 9

requirements.

The Board meets to review the half-year and annual results of the Company, and to review the audit process,

and those representations made by management in support of monitoring the Company’s commitment to

integrity in financial reporting.

Disclosure

The Company's policy is that shareholders are informed of all major developments that impact on the

Company. The Company treats its continuous disclosure obligations seriously and has a number of internal

operating policies and principles (including the Code of Conduct referred to above) that are designed to

promote responsible decision-making and timely and balanced disclosure.

The Board is ultimately responsible for ensuring compliance by senior management and employees of the

Company with the Company policies and therefore requires that senior management and employees have

an up to date understanding of ASX listing requirements.

The Company also ensures that the Directors and senior management obtain timely and appropriate external

advice where necessary.

Additionally, the Company ensures that its external auditor is represented at the annual general meeting to

answer shareholder questions about the conduct of the audit and the preparation of the Auditor's Report.

Business risk management

The Company endeavours at all times to minimise and effectively manage risk. The Board reviews the control

systems and policies of the Company in relation to risk management on an ongoing basis and maintains a

diagrammatic representation of the key operating and control systems of the Company.

The Board reviews key matters of business risk management and ensures appropriate measures are in place to

protect the assets of the Company including the security of its software, the security of its premises and the

appropriate provisioning of insurance policies.

In addition, the audit and risk committee provides specific advice or recommendations to the Board

regarding the existence and status of business risks that the Company faces.

Performance and remuneration

The Board monitors and reviews the performance of the Chief Executive Officer as well as the performance of

management. The Board receives regular updates of the performance of the Company as a whole. The

Board also has responsibility for ensuring that the Company:

has coherent remuneration policies and practices to attract and retain executives and Directors who

will create value for shareholders;

observes those remuneration policies and practices; and

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fairly and responsibly rewards executives having regard to the performance of the Company, the

performance of the executives and the general pay environment.

The Board receives external assistance and advice to assist it in determining appropriate levels of

remuneration for the Directors of the Company.

Remuneration details of each of the Directors and senior management are set out in the Remuneration Report

section of the Directors’ Report.

In March 2003, the Australian Stock Exchange (ASX) Corporate Governance Council released a document entitled Principles of Good Corporate Governance and Best Practice recommendations. These Principles and Recommendations were updated in June 2010. These are to be adopted for financial years commencing on or after 1 January 2011. No major changes to disclosure are anticipated as a result of the updates. Since that time, APA Financial Services Ltd has ensured adoption of those recommendations where possible. The table below summarises those recommendations and APA Financial Services Ltd’s current practice, including explanations in the rare instance where the Company does not comply.

Recommendation APA Financial Services Ltd’s current practice

1.

1.1 Companies should establish the functions reserved to the Board and those delegated to senior executives and disclose those functions.

The Board is comprised of a Non-Executive Chairman

and two Non Executive Directors. Management of the

Company is carried out by the Board. The full Board

meets on a regular basis for both Management and

Board meetings.

1.2 Companies should disclose the process for evaluating the performance of senior executives.

Due to the size and structure of the Board a formal

evaluation process is not conducted.

The Company uses consultants for geological and

Company secretarial functions and pays market rates for

experienced professionals.

1.3 Companies should provide the information indicated in the Guide to reporting to Principle 1.

Refer comments above.

2.

2.1 A majority of Board members should be independent Directors

None of the three Directors are independent according

to the ASX definition of independence due to all Directors

being either substantial or significant shareholders in the

Company. In view of the size of the Company and the

nature of its activities the Board considers that the current

Board is a cost effective and practical method of

directing and managing the Company.

2.2 The Chairperson should be an independent Director

As stated above the Chairman is a Non-Executive

Director and is not considered independent under the

ASX definition. The Company is mindful of the costs and

availability of an experienced Non-Executive

Independent Chairman and is satisfied the current Board

structure is appropriate for the size of the Company and

the nature of its activities.

2.3 The roles of Chairperson and chief executive officer should not be exercised by the same individual

As stated above the Company operates with a Non-Executive Chairman and management of the Company is carried out by the Board

2.4 The Board should establish a nomination committee

The Board has established a nomination Committee which comprises the full Board.

2.5 Companies should disclose the process for evaluating the performance of the Board, its committees and individual Directors.

Due to the size and structure of the Board a formal

evaluation process is not conducted.

2.6 Companies should provide the information in the guide to reporting on Principle 2.

Refer comments above

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3.

3.1 Companies should establish a code of conduct

and disclose the code or a summary of

the code as to:

- the practices necessary to maintain

confidence in the Company’s integrity

- the practices necessary to take into

account their legal obligations and the

reasonable expectations of their

stakeholders - the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.

In view of the size of the Company and the

nature of its activities, the Board has considered

that an informal code of conduct is appropriate

to guide executives, management and

employees in carrying out their duties and

responsibilities.

3.2 Companies should establish a policy concerning trading in Company securities by Directors, senior executives and employees, and disclose the policy or a summary of that policy

The Company has a formal policy which sets out

time restrictions on share dealings. The Company

policy is that of the Corporations Act 2001 and

ASX Listing Rules which state that dealings are

not permitted at any time whilst in the possession

of price sensitive information not already

available to the market.



4.

4.1 The Board should establish an audit committee The Board has established an Audit Committee

that comprises the full Board.

4.2 The audit committee should be structured so that

it:

- consists only of non-executive Directors

- consists of a majority of independent

Directors

- is chaired by an independent chair,

who is not chair of the Board

- has at least three members.


4.3 The audit committee should have a formal

charter


4.4 Companies should provide the information indicated in the Guide to reporting on Principle 4.


5.

5.1 Companies should establish written policies

designed to ensure compliance with ASX Listing

Rule disclosure requirements and to ensure

accountability at a senior executive level for that

compliance and disclose those policies or a

summary of those policies.

Due to its size and structure the Board is able to

meet on a regular basis for both Management

and Board meetings to ensure compliance with

ASX Listing Rule disclosure requirements. The full

Board is accountable for ASX compliance.


See comments above.

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6.

6.1 Companies should design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose their policy or a summary of that policy.

The Company keeps shareholders and the

market regularly informed through the annual,

half year and quarterly reports. The Company

discloses material developments to the ASX and

the media as required. All announcements are

also available from the Company’s website. The

Board encourages full participation of

shareholders at the AGM to ensure a high level

of accountability and identification of the

Company’s strategies and goals.



7.

7.1 Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies

In view of the size of the Company and the

nature of its activities, the Board has considered

that establishing a formally constituted risk

oversight and management committee would

contribute little to its effective management.

Accordingly risk oversight and management

issues and policies are reviewed by the Board as

a whole and approved by resolution of the

Board (with abstentions from relevant Directors

where there is a conflict of interest).

7.2 The Board should require management to design

and implement the risk management and internal

control system to manage the Company’s

material business 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.


7.3 The Board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial office (or equivalent) 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.

The Managing Directors and Company

Secretary are required to sign a declaration

addressing the integrity of the financial

statements and maintenance of financial

records in accordance with s286 of the

Corporations Act and any other matters that

are prescribed by the Regulations for the

purpose of Section 295S(2) in relation to the

financial statements and notes for the

financial year are satisfied.



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8.

8.1 The Board should establish a remuneration committee.

The Board has established a remuneration committee which comprises the full Board.

8.2 Companies should clearly distinguish the structure of non-executive Directors’ remuneration from that of executive Directors and senior executives.

Executive Directors are paid consulting fees to entities which they control. Directors’ fees are paid separately to all Directors. The different types of remuneration including fringe benefits, superannuation, consulting fees and Directors’ fees are all clearly outlined in the Annual Report.

8.3 Companies should provide the information indicated in the guide to reporting on Principle 8.

See comments above and refer to the Remuneration Report included in the Directors’ Report in the Annual Report.

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STATEMENT OF COMPREHENSIVE INCOME



2011 2010

Notes $ $

Revenue from continuing operations 2 9,874 4,691

Other income 2 - 286,018

Total revenue 9,874 290,709

Legal expense 6,597 5,372

IT maintenance and supplies - 769

Marketing expense - 127

Other expenses 59,852 222,687

Share of associate loss 3 - 32,435

Impairment of investment 3 - 29,125

66,449 290,515

Profit/(loss) before income tax benefit (56,575) 194

Income tax benefit 4 - 206,363

Profit / (loss) for the year (56,575) 206,557

Other comprehensive income:

Other comprehensive income for the year, net of tax - -

Total comprehensive income for the year attributable to

the members of APA Financial Services Ltd - -

Cents Cents

Earnings per share:

Basic earnings/(loss) per share 17 (0.09) 0.41

The above statement of comprehensive income should be read in conjunction with the accompanying notes.

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STATEMENT OF FINANCIAL POSITION



The above statement of financial position should be read in conjunction with the accompanying notes.

2011 2010

Notes $ $

Current assets

Cash and cash equivalents 6 409,402 288,193

Trade receivables 7 - 206,363

Other current assets 8 6,225 4,831

Total current assets 415,627 499,387

Non-current assets

Available for sale financial assets 9 470,875 470,875

Total non-current assets 470,875 470,875

Total assets 886,502 970,262

Current liabilities

Trade and other payables 10 29,139 56,324

Total current liabilities 29,139 56,324

Total liabilities 29,139 56,324

Net assets 857,363 913,938

Equity

Contributed equity 11 7,866,059 7,866,059

Reserves 13 - 182,188

Accumulated losses 12 (7,008,696) (7,134,309)

Total equity 857,363 913,938

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STATEMENT OF CHANGES IN EQUITY



Share capital

ordinary Reserves

Accumulated

losses Total

Notes $ $ $ $

2011

Balance 1 July 2010 11, 12, 13 7,866,059 182,188 (7,134,309) 913,938

Comprehensive income:

Profit / (loss) for the year - - (56,575) (56,575)

Other comprehensive income for the year - - - -

Total comprehensive income for the year - - (56,575) (56,575)

Other:

Transfer from reserves to accumulated losses - (182,188) 182,188 -

Total other - (182,188) 182,188 -

Balance at 30 June 2011 7,866,059 - (7,008,696) 857,363

2010

Balance 1 July 2009 11, 12, 13 7,609,104 742,128 (7,900,806) 450,426

Comprehensive income:

Profit / (loss) for the year - - 206,557 206,557

Other comprehensive income for the year - - - -

Total comprehensive income for the year - - 206,557 206,557

Transactions with owners in their capacity as

owners and other transfers:

Shares issued during the year 256,955 - - 256,955

Total transactions with owners and other

transfers 256,955 - - 256,955

Other:

Transfer from reserves to accumulated losses - (559,940) 559,940 -

Total other - (559,940) 559,940 -

Balance at 30 June 2010 7,866,059 182,188 (7,134,309) 913,938

The above statement of changes in equity should be read in conjunction with the accompanying notes.

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STATEMENT OF CASH FLOWS



Notes

2011 2010

$ $

Cash flows from operating activities

Receipts from customers - 3,588

Payments to suppliers and employees (95,028) (181,256)

Interest received 9,874 1,103

R&D grants 206,363 -

Net cash (outflow) from operating activities

5 121,209 (176,565)

Cash flows from investing activities

Proceeds from sale of investment - 247,000

Net cash inflow from

investing activities - 247,000

Cash flows from financing activities

Proceeds from Rights issue - 270,288

Repayment of borrowings - (213,328)

Net cash inflow / (outflow) from financing activities - 56,960

Net increase (decrease) in cash held 121,209 127,395

Cash and cash equivalents at the beginning of the financial

year 288,193 160,798

Cash and cash equivalents at the end of the financial year 6 409,402 288,193

The above statement of cash flows should be read in conjunction with the accompanying notes.

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NOTES TO FINANCIAL STATEMENTS



NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These financial statements and notes represent those of APA Financial Services Ltd.

The financial statements were authorised for issue on 20 July 2011 by the Directors of the Company.

Basis of preparation

The financial statements are general purpose financial statements that have been prepared in accordance

with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative

pronouncements of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001.

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in

financial statements containing relevant and reliable information about transactions, events and conditions.

Compliance with Australian Accounting Standards ensures that the financial statements and notes also

comply with International Financial Reporting Standards as issued by the IASB. Material accounting policies

adopted in the preparation of these financial statements are presented below and have been consistently

applied unless otherwise stated.

The financial statements have been prepared on an accruals basis and are based on historical costs,

modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets

and financial liabilities.

The company has a wholly owned subsidiary, incorporated in Australia, which is dormant. Consequently,

consolidated financial statements have not been prepared.

(a) Business combinations

Business combinations occur where an acquirer obtains control over one or more businesses.

A business combination is accounted for by applying the acquisition method, unless it is a combination

involving entities or businesses under common control. The business combination will be accounted for from

the date that control is attained, whereby the fair value of the identifiable assets acquired and liabilities

(including contingent liabilities) assumed is recognised (subject to certain limited exemptions).

When measuring the consideration transferred in the business combination, any asset or liability resulting from

a contingent consideration arrangement is also included. Subsequent to initial recognition, contingent

consideration classified as equity is not remeasured and its subsequent settlement is accounted for within

equity. Contingent consideration classified as an asset or liability is remeasured each reporting period to fair

value, recognising any change to fair value in profit or loss, unless the change in value can be identified as

existing at acquisition date.

All transaction costs incurred in relation to the business combination are expensed to the statement of

comprehensive income.

The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.

(b) Income tax

The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred

tax expense (income).

Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax

liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation

authority.

Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances

during the year as well unused tax losses.

Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax

relates to items that are recognised outside profit or loss.

Except for business combinations, no deferred income tax is recognised from the initial recognition of an asset

or liability where there is no effect on accounting or taxable profit or loss.

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NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period

when the asset is realised or the liability is settled and their measurement also reflects the manner in which

management expects to recover or settle the carrying amount of the related asset or liability.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent

that it is probable that future taxable profit will be available against which the benefits of the deferred tax

asset can be utilised.

Where temporary differences exist in relation to investments in subsidiaries, branches, associates and joint

ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the

temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable

future.

Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended

that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur.

Deferred tax assets and liabilities are offset where: (a) a legally enforceable right of set-off exists; and (b) the

deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the

same taxable entity or different taxable entities where it is intended that net settlement or simultaneous

realisation and settlement of the respective asset and liability will occur in future periods in which significant

amounts of deferred tax assets or liabilities are expected to be recovered or settled.

(c) Financial instruments

Initial recognition and measurement

Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual

provisions to the instrument. For financial assets, this is equivalent to the date that the company commits itself

to either the purchase or sale of the asset (i.e. trade date accounting is adopted).

Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is

classified “at fair value through profit or loss”, in which case transaction costs are expensed to profit or loss

immediately.

Classification and subsequent measurement

Finance instruments are subsequently measured at fair value, amortised cost using the effective interest rate

method, or cost.

Amortised cost is the amount at which the financial asset or financial liability is measured at initial recognition

less principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation of

the difference between that initial amount and the maturity amount calculated using the effective interest

method.

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are

applied to determine the fair value for all unlisted securities, including recent arm’s length transactions,

reference to similar instruments and option pricing models.

The effective interest method is used to allocate interest income or interest expense over the relevant period

and is equivalent to the rate that discounts estimated future cash payments or receipts (including fees,

transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably

predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or

financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying

value with a consequential recognition of an income or expense item in profit or loss.

The company does not designate any interests in subsidiaries, associates or joint venture entities as being

subject to the requirements of Accounting Standards specifically applicable to financial instruments.

i. Financial assets at fair value through profit or loss

Financial assets are classified at “fair value through profit or loss” when they are held for

trading for the purpose of short-term profit taking, derivatives not held for hedging purposes,

or when they are designated as such to avoid an accounting mismatch or to enable

performance evaluation where a group of financial assets is managed by key

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management personnel on a fair value basis in accordance with a documented risk

management or investment strategy. Such assets are subsequently measured at fair value

with changes in carrying value being included in profit or loss.

ii. Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable

payments that are not quoted in an active market and are subsequently measured at

amortised cost.

Loans and receivables are included in current assets, where they are expected to mature

within 12 months after the end of the reporting period.

iii. Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets that have fixed maturities and

fixed or determinable payments, and it is the company’s intention to hold these to maturity.

They are subsequently measured at amortised cost.

Held-to-maturity investments are included in non-current assets where they are expected to

mature within 12 months after the end of the reporting period. All other investments are

classified as current assets.

iv. Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are either not

suitable to be classified into other categories of financial assets due to their nature, or they

are designated as such by management. They comprise investments in the equity of other

entities where there is neither a fixed maturity nor fixed or determinable payments.

They are subsequently measured at fair value with changes in such fair value (i.e. gains or

losses) recognised in other comprehensive income (except for impairment losses and foreign

exchange gains and losses). When the financial asset is derecognised, the cumulative gain or

loss pertaining to that asset previously recognised in other comprehensive income is

reclassified into profit or loss.

Available-for-sale financial assets are included in non-current assets where they are expected

to be sold within 12 months after the end of the reporting period. All other financial assets are

classified as current assets.

v. Financial liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently

measured at amortised cost.

Derivative instruments

The company designates certain derivatives as either:

i. hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value

hedge); or

ii. hedges of highly probable forecast transactions (cash flow hedges).

At the inception of the transaction the relationship between hedging instruments and hedged items, as well as

the company’s risk management objective and strategy for undertaking various hedge transactions, is

documented.

Assessments, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in

hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or

cash flows of hedged items, are also documented.

i. Fair value hedge

Changes in the fair value of derivatives that are designated and qualify as fair value hedges

are recorded in the statement of comprehensive income, together with any changes in the

fair value of hedged assets or liabilities that are attributable to the hedged risk.

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ii. Cash flow hedge

The effective portion of changes in the fair value of derivatives that are designated and

qualify as cash flow hedges is deferred to a hedge reserve in equity. The gain or loss relating

to the ineffective portion is recognised immediately in the statement of comprehensive

income. Amounts accumulated in the hedge reserve in equity are transferred to the

statement of comprehensive income in the periods when the hedged item will affect profit or

loss.

Impairment

At the end of each reporting period, the company assesses whether there is objective evidence that a

financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged

decline in the value of the instrument is considered to determine whether an impairment has arisen.

Impairment losses are recognised in profit or loss. Also, any cumulative decline in fair value previously

recognised in other comprehensive income is reclassified to profit or loss at this point.

Financial guarantees

Where material, financial guarantees issued that require the issuer to make specified payments to reimburse

the holder for a loss it incurs because a specified debtor fails to make payment when due are recognised as a

financial liability at fair value on initial recognition.

The guarantee is subsequently measured at the higher of the best estimate of the obligation and the amount

initially recognised less, when appropriate, cumulative amortisation in accordance with AASB 118: Revenue.

Where the entity gives guarantees in exchange for a fee, revenue is recognised under AASB 118.

The fair value of financial guarantee contracts has been assessed using a probability-weighted discounted

cash flow approach. The probability has been based on:

– the likelihood of the guaranteed party defaulting in a year period;

– the proportion of the exposure that is not expected to be recovered due to the guaranteed party

defaulting; and

– the maximum loss exposed if the guaranteed party were to default.

Derecognition

Financial assets are derecognised where the contractual rights to receipt of cash flows expire or the asset is

transferred to another party whereby the entity no longer has any significant continuing involvement in the

risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations

are discharged, cancelled or expired. The difference between the carrying value of the financial liability

extinguished or transferred to another party and the fair value of consideration paid, including the transfer of

non-cash assets or liabilities assumed, is recognised in profit or loss.

(d) Impairment of assets

At the end of each reporting period, the company assesses whether there is any indication that an asset may

be impaired. The assessment will include the consideration of external and internal sources of information,

including dividends received from subsidiaries, associates or jointly controlled entities deemed to be out of

pre-acquisition profits. If such an indication exists, an impairment test is carried out on the asset by comparing

the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in

use, to the asset’s carrying amount. Any excess of the asset’s carrying amount over its recoverable amount is

recognised immediately in profit or loss, unless the asset is carried at a revalued amount in accordance with

another Standard (e.g. in accordance with the revaluation model in AASB 116). Any impairment loss of a

revalued asset is treated as a revaluation decrease in accordance with that other Standard.

Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the

recoverable amount of the cash-generating unit to which the asset belongs.

Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.

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(e) Employee benefits

Provision is made for the company’s liability for employee benefits arising from services rendered by

employees to the end of the reporting period. Employee benefits that are expected to be settled within one

year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits

payable later than one year have been measured at the present value of the estimated future cash outflows

to be made for those benefits. In determining the liability, consideration is given to employee wage increases

and the probability that the employee may satisfy vesting requirements. Those cash flows are discounted using

market yields on national government bonds with terms to maturity that match the expected timing of cash

flows.

Defined superannuation plans

In respect of defined benefit plans, the cost of providing the benefits is determined using the projected unit

credit method. Actuarial valuations are conducted every three years, with interim valuations performed on an

annual basis. Consideration is given to any event that could impact the funds up to the end of the reporting

period where the interim valuation is performed at an earlier date.

The amount recognised in the statement of financial position represents the present value of the defined

benefit obligations adjusted for any unrecognised actuarial gains and losses and unrecognised past service

costs less the fair value of the plan’s assets. Any asset recognised is limited to unrecognised actuarial losses,

plus the present value of available refunds and reductions in future contributions to the plan.

Actuarial gains and losses are amortised over the expected average remaining working lives of the

participating employees in the plan. Gains or losses on the curtailment or settlement of a defined benefit plan

are recognised in the statement of comprehensive income when the company demonstrates commitment to

the curtailment or settlement.

Past services costs are recognised when incurred to the extent that benefits are vested, and are otherwise

amortised on a straight-line basis over the vesting period.

Equity-settled compensation

Share-based compensation benefits are provided via the Employee Share Option Plan and through unlisted

options issued to Directors and senior executives. Information relating to these option plans is set out in note 23.

The fair value of options granted under the option plans is recognised as an employee benefit expense with a

corresponding increase in equity. The fair value is measured at grant date and recognised over the period

during which the option holders become unconditionally entitled to the options.

The fair value at grant date is independently determined using a Black-Scholes option pricing model that

takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant

date and expected price volatility of the underlying share, the expected dividend yield and the risk free

interest rate for the term of the option.

The fair value of the options granted is adjusted to reflect market vesting conditions, but excludes the impact

of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting

conditions are included in assumptions about the number of options that are expected to become

exercisable. At each reporting date, the entity revises its estimate of the number of options that are expected

to become exercisable. The employee benefit expense recognised each period takes into account the most

recent estimate.

Under the Employee Share Option Plan, options are issued to employees for no cash consideration.

Employees can exercise the options after two years of continuous employment from the option grant date.

(f) Provisions

Provisions are recognised when the company has a legal or constructive obligation, as a result of past events,

for which it is probable that an outflow of economic benefits will result and that outflow can be reliably

measured.

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Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of

the reporting period.

(g) Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits available on demand with banks, other short-term

highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts

are reported within short-term borrowings in current liabilities in the statement of financial position.

(h) Revenue and other income

Revenue from agency fees were recognised on an accruals basis. Fees were accrued daily and paid on

either a monthly or quarterly basis. Rebates were payable to advisor groups to reflect efficient operational

deliverables. Interest revenue is recognised as received.

The research and development rebate from the Australian Tax Office is recognised as income when the right

to receive the rebate is established.

All revenue is stated net of the amount of goods and services tax (GST).

(i) Goods and services tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST

incurred is not recoverable from the Australian Taxation Office (ATO).

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount

of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the

statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or

financing activities which are recoverable from, or payable to, the ATO are presented as operating cash flows

included in receipts from customers or payments to suppliers.

(j) Comparative figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in

presentation for the current financial year.

Where the company has retrospectively applied an accounting policy, made a retrospective restatement of

items in the financial statements or reclassified items in its financial statements, an additional statement of

financial position as at the beginning of the earliest comparative period will be disclosed.

(k) Segment reporting

Management has determined the operating segments based on the reports reviewed by the Board of

Directors that are used to make strategic decisions. The Company does not have any operating segments

with discrete financial information. The Company does not have any customers, and all the Company’s assets

and liabilities are located within Australia. The Board of Directors review internal management reports on a

monthly basis that is consistent with the information provided in the statement of comprehensive income,

statement of financial position and statement of cash flows. As a result no reconciliation is required because

the information as presented is what is used by the Board to make strategic decisions.

(l) Critical accounting estimates and judgments

The Directors evaluate estimates and judgments incorporated into the financial statements based on historical

knowledge and best available current information. Estimates assume a reasonable expectation of future

events and are based on current trends and economic data, obtained both externally and within the

company. See Note 20.

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(m) New accounting standards for application in future periods

The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory

application dates for future reporting periods and which the company has decided not to early adopt. A

discussion of those future requirements and their impact on the Company is as follows:

AASB 9: Financial Instruments (December 2010) (applicable for annual reporting periods commencing on or

after 1 January 2013).

This Standard is applicable retrospectively and includes revised requirements for the classification and

measurement of financial instruments, as well as recognition and derecognition requirements for financial

instruments. The company has not yet determined any potential impact on the financial statements.

The key changes made to accounting requirements include:

– simplifying the classifications of financial assets into those carried at amortised cost and those carried

at fair value;

– simplifying the requirements for embedded derivatives;

– removing the tainting rules associated with held-to-maturity assets;

– removing the requirements to separate and fair value embedded derivatives for financial assets

carried at amortised cost;

– allowing an irrevocable election on initial recognition to present gains and losses on investments in

equity instruments that are not held for trading in other comprehensive income. Dividends in respect

of these investments that are a return on investment can be recognised in profit or loss and there is no

impairment or recycling on disposal of the instrument;

– requiring financial assets to be reclassified where there is a change in an entity’s business model as

they are initially classified based on: (a) the objective of the entity’s business model for managing the

financial assets; and (b) the characteristics of the contractual cash flows; and

– requiring an entity that chooses to measure a financial liability at fair value to present the portion of

the change in its fair value due to changes in the entity’s own credit risk in other comprehensive

income, except when that would create an accounting mismatch. If such a mismatch would be

created or enlarged, the entity is required to present all changes in fair value (including the effects of

changes in the credit risk of the liability) in profit or loss.

AASB 1053: Application of Tiers of Australian Accounting Standards and AASB 2010–2: Amendments to

Australian Accounting Standards arising from Reduced Disclosure Requirements [AASB 1, 2, 3, 5, 7, 8, 101, 102,

107, 108, 110, 111, 112, 116, 117, 119, 121, 123, 124, 127, 128, 131, 133, 134, 136, 137, 138, 140, 141, 1050 & 1052

and Interpretations 2, 4, 5, 15, 17, 127, 129 & 1052] (applicable for annual reporting periods commencing on or

after 1 July 2013).

AASB 1053 establishes a revised differential financial reporting framework consisting of two tiers of financial

reporting requirements for those entities preparing general purpose financial statements:

– Tier 1: Australian Accounting Standards; and

– Tier 2: Australian Accounting Standards – Reduced Disclosure Requirements.

Tier 2 of the framework comprises the recognition, measurement and presentation requirements of Tier 1, but

contains significantly fewer disclosure requirements.

The following entities are required to apply Tier 1 reporting requirements (i.e. full IFRS):

– for-profit private sector entities that have public accountability; and

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– the Australian Government and state, territory and local governments.

Since the company is a for-profit private sector entity that has public accountability, it does not qualify for the

reduced disclosure requirements for Tier 2 entities.

AASB 2010–2 makes amendments to Australian Accounting Standards and Interpretations to give effect to the

reduced disclosure requirements for Tier 2 entities. It achieves this by specifying the disclosure paragraphs that

a Tier 2 entity need not comply with as well as adding specific “RDR” disclosures.

AASB 2010–4: Further Amendments to Australian Accounting Standards arising from the Annual Improvements

Project [AASB 1, AASB 7, AASB 101 & AASB 134 and Interpretation 13] (applicable for annual reporting periods

commencing on or after 1 January 2011).

This Standard details numerous non-urgent but necessary changes to Accounting Standards arising from the

IASB’s annual improvements project. Key changes include:

– clarifying the application of AASB 108 prior to an entity’s first Australian-Accounting-Standards

financial statements;

– adding an explicit statement to AASB 7 that qualitative disclosures should be made in the context of

the quantitative disclosures to better enable users to evaluate an entity’s exposure to risks arising from

financial instruments;

- amending AASB 101 to the effect that disaggregation of changes in each component of

equity arising from transactions recognised in other comprehensive income is required to be

presented, but is permitted to be presented in the statement of changes in equity or in the notes;

– adding a number of examples to the list of events or transactions that require disclosure under AASB

134; and

– making sundry editorial amendments to various Standards and Interpretations.

This Standard is not expected to impact the company.

AASB 2010–5: Amendments to Australian Accounting Standards [AASB 1, 3, 4, 5, 101, 107, 112, 118, 119, 121,

132, 133, 134, 137, 139, 140, 1023 & 1038 and Interpretations 112, 115, 127, 132 & 1042] (applicable for annual

reporting periods beginning on or after 1 January 2011).

This Standard makes numerous editorial amendments to a range of Australian Accounting Standards and

Interpretations, including amendments to reflect changes made to the text of IFRSs by the IASB. However,

these editorial amendments have no major impact on the requirements of the respective amended

pronouncements.

AASB 2010–6: Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial Assets

[AASB 1 & AASB 7] (applicable for annual reporting periods beginning on or after 1 July 2011).

This Standard adds and amends disclosure requirements about transfers of financial assets, especially those in

respect of the nature of the financial assets involved and the risks associated with them. Accordingly, this

Standard makes amendments to AASB 1: First-time Adoption of Australian Accounting Standards, and AASB 7:

Financial Instruments: Disclosures, establishing additional disclosure requirements in relation to transfers of

financial assets.

This Standard is not expected to impact the company.

AASB 2010–7: Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) [AASB 1,

3, 4, 5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023 & 1038 and Interpretations 2, 5,

10, 12, 19 & 127] (applies to periods beginning on or after 1 January 2013).

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This Standard makes amendments to a range of Australian Accounting Standards and Interpretations as a

consequence of the issuance of AASB 9: Financial Instruments in December 2010. Accordingly, these

amendments will only apply when the entity adopts AASB 9.

As noted above, the company has not yet determined any potential impact on the financial statements from

adopting AASB 9.

NOTE 2: REVENUE

2011 2010

$ $

From continuing operations

Agency fees - 3,589

Interest received – other persons/corporations 9,874 1,102

Total revenue from continuing operations 9,874 4,691

Other income

Sale of APAPL shareholding - 286,018

Total other income - 286,018

NOTE 3: EXPENSES

2011 2010

$ $

Profit/(Loss) before income tax includes the following specific expenses

Impairment of available for sale assets - 29,125

Share of loss of associate - 32,435

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NOTE 4: INCOME TAX EXPENSE

2011 2010

$ $

(a) Income tax benefit/(expense) - 206,363

(b) Profit/(loss) before income tax benefit/(expense) (56,575) 194

Tax at the Australian tax rate of 30% (16,973) 58

Tax effect of amounts which are not deductible (taxable) in calculating

taxable income:

Non-deductible expenses (881) 24,911

Other deductible expenses (1,725) -

R&D tax refund - 206,363

Movement in deferred tax assets not recognised 19,579 (24,969)

Income tax benefit - 206,363

(c) Tax losses

Unused tax losses for which no deferred tax asset has been recognised 5,479,904 5,414,642

Potential tax benefit @ 30% 1,643,971 1,624,393

NOTE 5: RECONCILIATION OF PROFIT / (LOSS) AFTER INCOME TAX TO NET CASH INFLOWS / (OUTFLOWS) FROM

OPERATING ACTIVITIES

2011 2010

$ $

Profit/(Loss) for the year (56,575) 206,557

Share of associate loss - 32,435

Impairment of available for sale financial assets - 29,125

Net (profit)/loss on sale of non-current assets - (286,019)

Decrease / ( Increase ) in trade receivables 206,363 (137,908)

Increase / ( Decrease ) in trade creditors (27,185) (23,295)

Decrease / ( Increase ) in other receivables (1,394) 2,540

Net cash inflow / (outflow) from operating activities 121,209 (176,565)

NOTE 6: CASH AND CASH EQUIVALENTS

2011 2010

$ $

Cash on hand - 46

Cash at bank 409,402 288,147

409,402 288,193

The above figures are reconciled to cash at the end of the financial year as per the statement of cash flows.

The Company’s exposure to interest rate risk is discussed in Note 21.

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NOTE 7: TRADE AND OTHER RECEIVABLES

2011 2010

Current $ $

Tax refund receivable - 206,363

Total other current receivables - 206,363

(a) Impaired trade receivables

There were no impaired trade receivables for the Company at 30 June 2011 (2010: $nil).

(b) Past due but not impaired

There were no amounts past due not impaired at 30 June 2011 (2010: $nil)

NOTE 8: OTHER ASSETS

2011 2010

Current $ $

Prepayments 6,225 4,831

Total other current assets 6,225 4,831

NOTE 9: AVAILABLE FOR SALE FINANCIAL ASSETS

Unlisted investment at fair value:

1,883,500 Shares in OneVue Holdings Pty Ltd “OHPL”

Available for sale financial assets OHPL at 1 July 470,875 -

OHPL acquired on 31 December 2009 - 500,000

Impairment of shares in OHPL - (29,125)

Fair value of available for sale assets as at 30 June 470,875 470,875

The holding of 1,883,500 fully paid ordinary shares in OHPL as at 30 June 2010 was assessed by the Board based

on an independent valuation and resulted in an adjusted value of $470,875. The Board has again assessed the

value for the year ended 30 June 2011 and are satisfied with the current value of $470,875 based on the latest

capital raising activities in OHPL.

NOTE 10: TRADE AND OTHER PAYABLES

2011 2010

$ $

Trade creditors 29,139 56,324

Details of the Company’s exposure to risks arising from current trade and other payables are set out in Note 21.

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NOTE 11: CONTRIBUTED EQUITY

2011 2010

$ $

Share capital

Fully paid ordinary shares 7,866,059 7,866,059

(a) Movements in ordinary share capital 2011 2011 2010 2010

Number of

Shares $

Number of

Shares $

Beginning of the financial year 60,986,733 7,866,059 43,856,379 7,609,104

Issued during the year - - - -

Pursuant to rights issue prospectus - - 17,130,354 256,955

End of the financial year 60,986,733 7,866,059 60,986,733 7,866,059

Ordinary shares entitle the holder to participate in dividends and a share of the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

(b) Share options 2011 2010

Options on issue - Unlisted

Options exercisable at 50 cents each expiring 27 October 2010 - 50,000

Options exercisable at 55 cents each expiring 21 June 2011 - 30,000

Options exercisable at 50 cents each expiring 13 August 2011 - 50,000

Options exercisable at 45 cents each expiring 20 September 2011 - 110,000

Options exercisable at 50 cents each expiring 3 December 2011 - 450,000

Total Options on issue at year end - 690,000

All options in the table above have expired or were issued under the Employee Share Option Plan (ESOP) and

did not meet the terms and conditions of two years of continuous service following the issue of the options and

have consequently been cancelled.

(c) Capital risk management

The Company’s objectives when managing capital are to safeguard their ability to continue as a going

concern and to maintain an optimal capital structure so as to maximise shareholder value. In order to

maintain or adjust the capital structure, the Company may issue new shares or reduce its capital, subject to

the provisions of the Constitution and any relevant regulatory requirements.

The capital structure of the Company consists of equity attributable to equity holders comprising contributed

equity, reserves and accumulated losses as disclosed in Notes 11, 12 and 13.

NOTE 12: ACCUMULATED LOSSES

2011 2010

$ $

Opening Balance (7,134,309) (7,900,806)

Total comprehensive income / (loss) for the period (56,575) 206,557

Transfer of share-based payment reserve to accumulated losses 182,188 -

Transfer of asset revaluation reserve to accumulated losses - 559,940

Closing Balance (7,008,696) (7,134,309)

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NOTE 13: RESERVES

2011 2010

$ $

Share-based payment reserve - 182,188

Total reserves - 182,188

Share-based payment reserve

The share-based payments reserve is used to recognise:

The grant date fair value of options issued to employees but not exercised

The grant date fair value of shares issued to employees

Opening Balance 182,188 182,188

Transfer to accumulated losses (182,188) -

Closing Balance - 182,188

NOTE 14: KEY MANAGEMENT PERSONNEL DISCLOSURES

(a) Directors

The following persons were Directors of APA Financial Services Ltd during the financial year:

Michael Hackett (Non Executive Chairman)

Graham Anderson (Non Executive Director)

Steven Rowley (Non Executive Director)

(b) Key management personnel compensation

Refer to the remuneration report contained in the Directors’ Report for details of remuneration to each

member of key management personnel.

The totals of remuneration paid to key management personnel for the year are as follows:

2011 2010

$ $

Short term employee benefits - -

Post-employment benefits - -

Share based payments - -

- -

(i) Share holdings

The numbers of shares in the Company held during the financial year by each Director of APA Financial Services Ltd and other key management personnel of the Company, including their personally related parties, are set out as follows.

2011 Balance at the start

of the year

Purchased during the

year

Balance at the

end of the year

Directors

Michael Hackett 20,725,325 130,000 20,855,325

Steven Rowley 8,349,932 - 8,349,932

Graham Anderson 5,470,014 - 5,470,014

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NOTE 14: KEY MANAGEMENT PERSONNEL DISCLOSURES (cont’d)

2010 Balance at the start

of the year

Purchased during the

year

Balance at the

end of the year

Directors

Michael Hackett 7,362,325 13,363,000 20,725,325

Steven Rowley 8,349,932 - 8,349,932

Graham Anderson 3,900,910 1,569,104 5,470,014

(ii) Option holdings

The numbers of options in the Company held during the financial year by each Director of APA Financial Services Ltd and other key management personnel of the Company is set out in the table below:

Name

Number of options granted

during the year

Number of options vested

during the year

2011 2010 2011 2010

Directors

Steven Rowley - - - -

Graham Anderson - - - -

Michael Hackett - - - -

Refer to Note 22 for other Key Management Personnel disclosures.

NOTE 15: REMUNERATION OF AUDITORS

2011 2010

$ $

Hayes Knight Audit (QLD) Pty Ltd (2010: BDO Audit (WA) Pty Ltd)

Statutory audit

- Audit and review of financial reports 11,500 27,222

No other services were provided by the auditor or its related entities.

NOTE 16: CONTINGENT LIABILITIES

The Company does not have any contingent liabilities.

NOTE 17: EARNINGS / (LOSS) PER SHARE

2011 2010

Cents Cents

(a) Basic earnings/(loss) per share

Basic profit / (loss) per share (0.09) 0.41

Diluted profit / (loss) per share (0.09) 0.41

(b) Reconciliation of earnings used in calculating earnings/(loss) per share 2011 2010

$ $ Profit/(loss) attributable to the ordinary equity holders of the Company used in calculating basic earnings per share:

(56,575) 206,557

(c) Weighted average number of shares used as the denominator 2011 2010

Number Number Weighted average number of ordinary shares used as the denominator in calculating basic earnings/(loss) per share

60,986,733 50,520,791

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NOTE 17: EARNINGS / (LOSS) PER SHARE (cont’d)

Weighted average number of options outstanding

- -

Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating diluted earnings/(loss) per share

60,986,733 50,520,791

NOTE 18: EVENTS AFTER THE BALANCE DATE

No matters have arisen since 30 June 2011 that have significantly affected or may significantly affect the

Company.

NOTE 19: SEGMENT INFORMATION

Management has determined that the Company operates in one reportable segment, being the financial

services industry in Australia.

NOTE 20: CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

Estimates and judgements are continually evaluated and are based on historical experience and other

factors, including expectations of future events that may have a financial impact on the entity and that are

believed to be reasonable under the circumstances. The Company makes estimates and assumptions

concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual

results.

The Directors do not consider that any of the estimates and assumptions adopted present a significant risk of

causing material adjustment to the carrying amounts of assets and liabilities within the 30 June 2011 financial

year.

Deferred tax

The Company expects to have carried forward tax losses which have not been recognised as deferred tax

assets as it is not considered sufficiently probable that these losses will be recouped by means of future profits

taxable in the relevant jurisdictions.

NOTE 21: FINANCIAL RISK MANAGEMENT

The Company’s activities expose it to a variety of financial risks in the following areas:

Market Risk

Credit Risk

Interest rate Risk

Liquidity Risk

The Company’s overall risk management program takes consideration of the unpredictability of the financial

markets and seeks to minimise potential adverse impacts on the financial performance of the Company. Risk

management is carried out by the Board of Directors.

(i) Market risk – price risk

The Company is exposed to equity securities price risk. This arises from investments held by the Company in the

statement of financial position as available-for-sale. The Company is not exposed to commodity price risk.

To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio.

Diversification of the portfolio is done in accordance with the limits set by the Company.

The table below summarises the impact of increases/decreases of these securities on the Company’s post-tax

profit for the year and on equity. The analysis is based on the assumption that the equity indexes had

increased by 10% decreased by 10% (2010 – had increased by 10% decreased by 10%) with all other variables

held constant and all the Company’s instruments moved according to the historical correlation with the index.

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NOTE 21: FINANCIAL RISK MANAGEMENT (cont’d)

Index

Impact on post-tax profit Impact on other components

of equity

2011

$

2010

$

2011

$

2010

$

Increase 10% (2010: Increase 10%) - - 47,087 47,087

Decrease 10% (2010: Decrease 10%) 47,087 47,087 - -

Total non-derivatives 47,087 47,087 47,087 47,087

Post-tax profit for the year would decrease as a result of losses on equity securities classified as available-for-

sale as the fair value of the assets would be below cost and therefore an impairment loss would be recognised

in profit or loss. Other components of equity would increase as a result of gains on equity securities classified as

available-for-sale.

(ii) Credit risk

The Company has no significant concentrations of credit risk in relation to trade receivables, other receivables

and cash at bank. The Company’s trade receivables are monitored on an ongoing basis with the result that

the Company’s exposure to bad debts is not significant.

(iii) Interest rate risk

Interest rate risk is where the value of a financial instrument may fluctuate as a result of changes in market

interest rates.

The Company is exposed to interest rate risks through the cash and cash equivalents that it holds. The majority

of the cash and cash equivalents are held by Westpac Bank. The objective of managing interest rate risk is to

minimise the Company’s exposure to fluctuations in interest rates that might impact its interest revenue and

cash flow. Interest rate risk in respect of interest received is not anticipated to be material.

(iv) Liquidity risk

Liquidity risk is where the Company may encounter difficulty in raising funds to meet its financial liabilities.

The Company is exposed to liquidity risk through its trade and other payables obligations. Responsibility for

liquidity risk rests with the Board who regularly review liquidity risk by monitoring undiscounted cash flow

forecasts and actual cash flows provided to them by the Company’s management at Board meetings to

ensure that the Company continues to be able to meet its debts as and when they fall due. Contracts are not

entered into unless the Board is satisfied that there is sufficient cash flow to fund the additional commitment.

The Board determines when reviewing the undiscounted cash flow forecasts whether the Company needs to

raise additional working capital from its existing shareholders, the equity capital markets or any other available

sources.

Contractual maturities of

financial liabilities

Less than 6

months

6 – 12

Months

Between 1

and 2 years

Between 2

and 5 years

Over 5

years

Total

contractual

cash flows

Carrying

amount

(assets/

liabilities)

30 June 2011 $ $ $ $ $ $ $

Financial liabilities

due for payment

Trade and other

payables

29,139 - - - - 29,139 29,139

Total financial

liabilities due for

payment

29,139 - - - - 29,139 29,139

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Contractual maturities of

financial liabilities

Less than 6

months

6 – 12

Months

Between 1

and 2 years

Between 2

and 5 years

Over 5

years

Total

contractual

cash flows

Carrying

amount

(assets/

liabilities)

30 June 2010 $ $ $ $ $ $ $

Financial liabilities

due for payment

Trade and other

payables

56,324 - - - - 56,324 56,324

Total financial

liabilities due for

payment

56,324 - - - - 56,324 56,324

(v) Fair value estimation

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or

for disclosure purposes. The carrying value less impairment provision of trade receivables and payables

approximate their fair values due to their short-term nature.

Cash at bank and short-term bank deposits

2011 2010

$ $

AA 377,487 263,760

A 31,915 24,387

409,402 288,147

(vi) Fair value measurements

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or

for disclosure purposes.

APA Financial Services Ltd has adopted the amendment to AASB 7 Financial Instruments: Disclosures which

requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:

(a) Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)

(b) Inputs other than quoted prices included within level 1 that are observable for the asset or liability,

either directly (as prices) or indirectly (derived from prices) (level 2), and

(c) Inputs for the asset or liability that are not based on observable market data (unobservable inputs)

(level 3).

The following table present the Company’s assets and liabilities measured and recognised at fair value at 30

June 2011. Comparative information has not been provided as permitted by the transitional provisions of the

new rules.

Contractual maturities of financial

liabilities

Level 1 Level 2 Level 3 Total

30 June 2011 $ $ $ $

Available -for-sale financial assets

Equity securities - 470,875 - 470,875

Total assets - 470,875 - 470,875

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Contractual maturities of financial

liabilities

Level 1 Level 2 Level 3 Total

30 June 2010 $ $ $ $

Available -for-sale financial assets

Equity securities - 470,875 - 470,875

Total assets - 470,875 - 470,875

NOTE 22: RELATED PARTY TRANSACTIONS

(a) The company’s main related parties are as follows:

(i) Key management personnel:

Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any Director (whether executive or otherwise) of that entity, are considered key management personnel. For details of disclosures relating to key management personnel, refer to Note 14: Key management personnel disclosures.

(ii) Entities subject to significant influence by the Company:

An entity that has the power to participate in the financial and operating policy decisions of an entity, but does not have control of those policies, is an entity which holds significant influence. Significant influence may be gained by share ownership, statue or agreement.

APA Equities Pty Ltd is a 100% owned subsidiary of the company. This subsidiary is dormant and had no related party transactions with the company for the year ended 30 June 2011.

(iii) Other related parties:

Other related parties include entities over which key management personnel exercise significant influence.

(b) Transactions with related parties Key management personnel

Graham Anderson Pty Ltd

During the year ended 30 June 2011, Graham Anderson Pty Ltd provided Chief Financial Officer, Company

Secretarial Services, accounting and administration services to APA Financial Services Limited. The total cost

of the provision of these services was $11,000 (2010: $41,250). Graham Anderson is a Director of Graham

Anderson Pty Ltd. No amounts were due at 30 June 2011.

Trustees Australia Limited

During the year ended 30 June 2011, Trustees Australia Limited provided Chief Financial Officer, Company

Secretarial Services, accounting and administration services to APA Financial Services Limited. The total cost

of the provision of these services was $9,000 (2010: $nil). Michael Hackett is a Director of Trustees Australia

Limited. No amounts were due at 30 June 2011.

NOTE 23: SHARE BASED PAYMENTS

Employee Share Option Plan

The Employee Share Option Plan (ESOP) was adopted by the Company in a general meeting on 13 April 2006.

The ESOP provides for the issue of options to persons engaged in full or part-time work for the Company, and

includes Directors, Secretary, and any contractor or consultant engaged by the Company.

Options issued under the ESOP are subject to certain terms and conditions including:

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NOTE 23: SHARE BASED PAYMENTS (cont’d)

(i) each option will be issued for no consideration;

(ii) each option will entitle the holder to subscribe for one ordinary share;

(iii) each option may only be exercised after two years of continuous service following issue of the option;

(iv) each option must be exercised before the expiry date (see details above);

(v) options issued under ESOP carry no dividend or voting rights;

(vi) all shares issued upon exercise of the options will rank equally with all other shares on issue, and the

Company will apply for quotation of the shares issued on exercise of an option within ten business days

of issue; and

(vii) the ESOP rules may not be amended without the prior approval of both shareholders of the Company in

general meeting and the ASX, if required.

There were no options issued to Directors and employees during the year (2010: $nil).

All options in the table below have expired or were issued under the Employee Share Option Plan (ESOP) and

did not meet the terms and conditions of two years of continuous service following the issue of the options and

have consequently been cancelled.

Grant date

Vesting date

Expiry date

Exercise

price

Value per

option at

grant date

Number

of Options

ESOP shares

28 October 2006 27 October 2008 27 October 2010 $0.50 $0.26 50,000

22 June 2007 21 June 2009 21 June 2011 $0.55 $0.23 30,000

14 August 2007 13 August 2009 13 August 2011 $0.50 $0.21 50,000

21 September 2007 20 September 2009 20 September 2011 $0.45 $0.15 110,000

4 December 2007 3 December 2009 3 December 2011 $0.50 $0.20 450,000

Total 690,000

NOTE 24: DIVIDENDS

The Company has not declared or paid any dividends during the year (2010: $nil).

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DIRECTOR’S DECLARATION



In the opinion of the Directors:

1) The financial statements and notes of the company are in accordance with the Corporations Act 2001,

including:

a) give a true and fair view of the Company’s financial position as at 30 June 2011 and of its

performance for the year ended on that date; and

b) comply with Accounting Standards; and

2) 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

This declaration has been made after receiving the declaration required to be made to the Directors in

accordance with sections 295A of the Corporations Act 2001 for the financial period ended 30 June 2011.

In the opinion of the Directors, as at the date of this declaration, there are reasonable grounds to believe that

the company will be able to meet any obligations or liabilities when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors and signed at Brisbane on

20 July 2011.

Michael Hackett

Director

Dated the 20 July 2011

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INDEPENDENT AUDITOR’S REPORT



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ADDITIONAL INFORMATION



Distribution of Shares as at 30 June 2011

Fully Paid

Distribution of holdings Number of holders

1-1,000 3

1,001 – 5,000 56

5,001 – 10,000 63

10,001 – 100,000 113

100,001 and over 51

286

20 Largest shareholders as at 30 June 2011

Shares %

TRUSTEES AUSTRALIA LIMITED 20,481,000 33.58

ROWLEY SUPER FUND PTY LTD <ROWLEY SUPER FUND A/C> 7,665,865 12.57

GRAHAM ANDERSON PTY LTD <ALNESS SUPER FUND A/C> 4,873,614 7.99

IDL SYSTEMS PTY LTD <THE WESTMAL FAMILY A/C NO 2> 4,667,842 7.65

MANAHIME HOLDINGS PTY LTD <MBOPO FAMILY A/C> 1,694,772 2.78

STANCLIFFE PTY LTD <TAYLOR FAMILY A/C> 1,596,176 2.62

MR TIMOTHY PHILLIP COLEMAN + MISS MARIA MARCINIAK 1,360,162 2.23

SIMON PHILIP WALLACE + JOHN NEVILLE SIMPSON <WALLACE FAMILY ACCOUNT A/C> 1,346,004 2.21

TROMSO PTY LIMITED 1,113,080 1.83

INTERDALE PTY LTD <MAPLE SUPER FUND A/C> 1,000,000 1.64

MR WAYNE EDWIN LEAR + MS HELEN MARY PARKER <LP SUPERANNUATION FUND A/C> 560,000 0.92

MR MICHAEL JAMES MEAD 516,328 0.85

ARUMVALE PTY LTD <TR BULLER SUPER FUND A/C> 515,000 0.84

MRS KIM PATRICIA GREEN 500,000 0.82

PAUL MALCOLM & SUSAN MALCOLM <MALOCLM SUPERANNUATION FUND> 498,000 0.82

MR GRAHAM DOUGLAS ANDERSON <KUDU A/C> 441,000 0.72

MR TIMOTHY PHILLIP COLEMAN 420,814 0.69

MR PAUL MALCOLM + M/S SUSAN MALCOLM <MALCOLM SUPER FUND> 419,242 0.69

AUSTFIN FINANCIAL SERVICES PTY LTD <AUSTFIN UNIT A/C> 400,000 0.66

CITICORP NOMINEES PTY LIMITED <DPSL A/C> 400,000 0.66

50,468,899 82.75

Substantial Shareholders

Fully Paid

Shares

%

TRUSTEES AUSTRALIA LIMITED 20,481,000 33.58

ROWLEY SUPER FUND PTY LTD <ROWLEY SUPER FUND A/C> 7,665,865 12.57

GRAHAM ANDERSON PTY LTD <ALNESS SUPER FUND A/C> 4,873,614 7.99

DL SYSTEMS PTY LTD <THE WESTMAL FAMILY A/C NO 2> 4,667,842 7.65

Voting Rights

Each shareholder is entitled to receive notice of and attend and vote at general meetings of the Company.

At a general meeting, every shareholder present in person or by proxy, representative or attorney will have

one vote on a show of hands and on a poll, one vote for each share held.

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