FSA GROUP LIMITED — Interim / Quarterly Report 2011

Feb 24, 2011

Appendix 4D

Half yearly report

Introduced 1/1/2003.

Name of entity

FSA Group Limited

ABN or equivalent company reference 98 093 855 791	Half year ended (‘current reporting period’)	‘Previous corresponding period’
98 093 855 791	31 December 2010	31 December 2009

Results for announcement to the market

				$A'000
Revenue and Income from ordinary activities (net of	up	10.5%	To		27,276
Finance Expense)
Profit from ordinary activities after tax attributable to	up	11.7%	To		3,975
members
Net profit for the period attributable to members	up	11.7%	To		3,975
Dividends
It is not proposed to pay a dividend.

NTA backing Net tangible asset backing per ordinary security, after adjusting for Non-controlling interests	Current period	Previous corresponding Period
	31.3 cents	27.1cents

FSA GROUP LTD

ABN 98 093 855 791

FINANCIAL REPORT

FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

DIRECTORS' REPORT

The directors submit their report for the half-year ended 31 December 2010.

DIRECTORS

The names of the directors of FSA Group Limited (“FSA Group”) in office during the half-year and until the date of this report are shown below.

Sam Doumany (Non-Executive Chairman) Tim Odillo Maher (Executive Director) Deborah Southon (Executive Director) Hugh Parsons (Non-Executive Director) Stan Kalinko (Non-Executive Director) Sally Herman (Non-Executive Director) - appointed 24 January 2011

RESULTS AND REVIEW OF OPERATIONS

Principal activities

The principal activities of FSA Group are the provision of debt solutions and direct lending services to individuals and businesses.

Operating Results

FSA Group’s profit after tax attributable to members (now termed “comprehensive income attributable to owners of the parent”) for the half year ended 31 December 2010 was $3.97m. This result represents an 11.7% increase when compared to the half year ended 31 December 2009.

The key indicators compared to the previous corresponding period are:

• Revenue and Income (net of Finance Expense) of $27.3m up 10.5%

• Profit before Income Tax Expense of $7.10m up 17.2%

• Net Assets of $49.4m up 10.2% (from June 2010)

• Net Tangible Asset Backing per Share of 31.3 cents up 15.4%

• Basic Earnings per Share of 2.9 cents down 3.3% due to the issue of director’s options and the conversion of the last tranche of convertible redeemable preference shares in early 2010.

The directors are reinvesting earnings into high growth divisions particularly home loan lending and therefore have not recommended a dividend.

Overview

FSA Group is the largest provider of debt solutions to individuals in Australia. The business operates across three key divisions, Services, Home Loan Lending and Business Services and Lending. The profitability of each division is as follows:

Profitability	1HFY2010 1HFY2011 %
Services	$4.32m $4.36m Up 0.9%
Home Loan Lending	$1.60m $1.72m Up7.5%
Business Services and Lending	$0.21m $1.12m Up433%
Other	($0.07m) ($0.10m) -
Profit before income tax expense	$6.06m $7.10m Up17.2%
Profit after tax attributable to members	$3.56m $3.97m Up11.7%

During the first half of the 2011 financial year, FSA Group achieved a significant uplift in operating cash flow to $3.5m.

	FY2009 FY2010 1HFY2011
Cashflowfrom operations	$1.06m $5.26m $3.47m

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DIRECTORS' REPORT Continued

Overview continued

During the first half of the 2011 financial year the total number of clients administered under debt agreements increased to 12,800. Each debt agreement client pays an average fee to FSA Group of around $100 per month for 4.5 years. FSA Group forecasts that client numbers will grow to around 17,500 by the end of the 2012 financial year. The costs of administering these additional clients will be negligible and therefore we will continue to see a steady and sustained increase in operating cash flow.

We will now provide more detail around the operational performance of each division.

Operational Performance

Services

FSA Group offers a range of simple and convenient services to assist clients wishing to enter into a payment arrangement with their creditors. These services include informal arrangements, debt agreements, personal insolvency agreements, bankruptcy assistance and other solutions.

FSA Group is the largest provider of debt agreements with around 50% market share and is one of the largest registered trustees for personal insolvency agreements and bankruptcies in Australia.

Client numbers during the first half of the 2011 financial year were as follows:

Client Numbers	1HFY2010 vs. 1HFY2011
Debt Agreements	Up10%
Personal InsolvencyAgreements and Bankruptcy	Up16%

FSA Group manages over $260m of unsecured debt under debt agreements. The strength of FSA Group’s arrears and risk management capabilities is evidenced by the dividends paid to creditors. During the first half of the 2011 financial year FSA Group paid $29.8m in dividends to creditors which was an increase of 6% when compared to the previous corresponding period.

Home Loan Lending

FSA Group offers a range of simple and convenient products to assist clients with property wishing to consolidate their debt. FSA Group offers solutions both as a broker and lender of non-conforming home loans. FSA Group has firmly established a track record in non-conforming home loan lending. We have originated a high quality loan pool of around $220m which is outperforming those of our competitors.

In October 2010 our facility was increased to $235m and renewed for a further term until October 2012 by Westpac Banking Corporation.

Home Loan Lending
Loan PoolSize	$220m
SecurityType	1st Mortgage
Average Loan Size	$203,000
Average Weighted LVR	68%
% Full Doc Borrowers	98%
% Variable Rate Borrowers	100%
Geographical Spread	Australia Wide
> 30 dayarrears*	2.85%
Loss of Capital since inception	$132,000
Target loanpool 2013	$600m

• By comparison our competitors >30 day arrears as measured by the Standard & Poors Index was 11.93% as at November 2010

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DIRECTORS' REPORT Continued

Operational Performance continued

Business Services and Lending

FSA Group continues to grow its small business division which offers a range of debt solutions including the provision of factoring finance. Factoring finance assists small businesses with cash flow management. FSA Group has firmly established a track record in factoring finance. We have originated a high quality loan pool of around $16m. In June 2010 our facility was increased to $25m and renewed for a further term by Westpac Banking Corporation until June 2012.

Factoring Finance
Loan PoolSize	$16m
SecurityType	Assigned Receivables
Average Loan Size	$220,000
Average Weighted LVR	Ranges 55% to 65%
% Variable Rate Borrowers	100%
Geographical Spread	Australia Wide
>90 dayarrears	4%
Asset Insured	Yes
Loss of Capital since inception	Nil
Target loanpool 2013	$45m

Outlook

Continued high levels of consumer debt coupled with a higher interest rate environment are likely to drive demand for our products and services.

The lack of competition in the lending market has opened up an opportunity for FSA Group to expand its non-conforming home loan lending division. We are experiencing high quality demand for our home loan products but are unable to meet this demand due to funding constraints imposed by the capital markets. We are looking to secure additional lines of funding to meet this demand.

FSA Group is experiencing high quality demand for factoring finance because the availability of credit for small businesses continues to remain tight. We are confident we can secure additional funding to meet this demand.

On the 18 November 2010, FSA Group announced its launch into the prime home loan market as a mortgage manager for Bendigo and Adelaide Bank Limited. This move will complement our existing non-conforming home loan broking and lending activities.

Our strategy is to continue to develop and offer a range of additional solutions to support our clients throughout their entire financial lifecycle.

AUDITOR’S INDEPENDENCE DECLARATION

The auditor’s independence declaration under Section 307C is attached to this financial report on page 4.

Signed in accordance with a resolution of directors made pursuant to section 306(3) of the Corporations Act, on behalf of the board of directors.

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Tim Odillo Maher Director Sydney 25 February 2011

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FSA Group Limited

Condensed Statement of Comprehensive Income

FOR THE HALF-YEAR ENDED 31 DECEMBER 2010 Note REVENUE AND INCOME Fees from Services Finance Income Finance Expenses Net Finance Income OTHER INCOME 3 TOTAL REVENUE AND OTHER INCOME, NET OF FINANCE EXPENSE SHARE OF PROFITS OF AN ASSOCIATE USING THE EQUITY ACCOUNTING METHOD 4 MARKETING EXPENSES ADMINISTRATION EXPENSES OPERATING EXPENSES PROFIT BEFORE INCOME TAX EXPENSE INCOME TAX EXPENSE TOTAL COMPREHENSIVE INCOME FOR THE PERIOD TOTAL COMPREHENSIVE INCOME FOR THE PERIOD ATTRIBUTABLE TO: NON-CONTROLLING INTEREST OWNERS OF THE PARENT Basic earnings per share (cents per share) Diluted earnings per share (cents per share) 5 5	CONSOLIDATED 2010 2009 $ $ 20,212,932 18,832,873 14,909,621 9,848,740 (7,878,743) (4,738,414)
	7,030,878 5,110,326 32,340 760,890
	27,276,150 24,704,089
	18,827 7,293 (2,866,943) (3,416,161) (5,695,837) (4,359,931) (11,633,826) (10,876,229)
	7,098,371 6,059,061 (1,999,152) (1,759,874)
	5,099,219 4,299,187
	1,124,652 741,287 3,974,567 3,557,900 2.89 2.89 3.00 2.81

The above Condensed Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

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FSA Group Limited

Condensed Statement of Financial Position

AS AT 31 DECEMBER 2010

Note CURRENT ASSETS Cash and cash equivalents Trade and other receivables Other TOTAL CURRENT ASSETS NON-CURRENT ASSETS Trade and other receivables Investment in associate Plant and equipment Investment property Other financial assets Deferred tax assets Intangible assets TOTAL NON-CURRENT ASSETS ASSETS FINANCED BY NON-RECOURSE FINANCIAL LIABILITIES Cash and cash equivalents Mortgage finance assets 6 TOTAL ASSETS FINANCED BY NON-RECOURSE FINANCIAL LIABILITIES TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Current tax liabilities Borrowings Provisions TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Borrowings Provisions Deferred tax liabilities TOTAL NON-CURRENT LIABILITIES NON-RECOURSE FINANCIAL LIABILITIES Warehouse facilities 6 TOTAL NON-RECOURSE FINANCIAL LIABILITIES TOTAL LIABILITIES NET ASSETS	CONSOLIDATED 31 December 2010 30 June 2010 $ $ 8,369,546 7,394,759 36,499,789 32,564,893 747,297 245,697 45,616,632 40,205,349 25,762,803 24,508,906 60,367 47,188 373,046 450,003 308,737 313,051 930,390 898,050 64,898 40,788 3,443,384 3,413,633 30,943,625 29,671,619 8,324,980 6,605,211 220,146,693 200,434,621 228,471,673 207,039,832 305,031,930 276,916,800 10,432,199 12,750,551 1,050,284 629,453 2,678,114 3,361,542 732,283 588,535 14,892,880 17,330,081 16,966,327 11,893,779 313,032 251,012 9,374,167 8,150,799 26,653,526 20,295,590 214,118,173 194,541,639 214,118,173 194,541,639 255,664,579 232,167,310 49,367,351 44,749,490	CONSOLIDATED 31 December 2010 30 June 2010 $ $ 8,369,546 7,394,759 36,499,789 32,564,893 747,297 245,697 45,616,632 40,205,349 25,762,803 24,508,906 60,367 47,188 373,046 450,003 308,737 313,051 930,390 898,050 64,898 40,788 3,443,384 3,413,633 30,943,625 29,671,619 8,324,980 6,605,211 220,146,693 200,434,621 228,471,673 207,039,832 305,031,930 276,916,800 10,432,199 12,750,551 1,050,284 629,453 2,678,114 3,361,542 732,283 588,535 14,892,880 17,330,081 16,966,327 11,893,779 313,032 251,012 9,374,167 8,150,799 26,653,526 20,295,590 214,118,173 194,541,639 214,118,173 194,541,639 255,664,579 232,167,310 49,367,351 44,749,490
		40,205,349
		24,508,906 47,188 450,003 313,051 898,050 40,788 3,413,633
		29,671,619
		6,605,211 200,434,621
		207,039,832
		276,916,800
		12,750,551 629,453 3,361,542 588,535
		17,330,081
		11,893,779 251,012 8,150,799
		20,295,590
		194,541,639
		194,541,639
		232,167,310
		44,749,490

The above Condensed Statement of Financial Position should be read in conjunction with the accompanying notes

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FSA Group Limited

Condensed Statement of Financial Position Continued

AS AT 31 DECEMBER 2010

AT 31 DECEMBER 2010
Note EQUITY Share Capital 7 Reserves Retained earnings Non-Controlling interest TOTAL EQUITY	CONSOLIDATED 31 December 2010 30 June 2010 $ $ 11,692,255 11,692,255 692,760 664,374 34,263,963 30,289,397 2,718,373 2,103,464 49,367,351 44,749,490
		44,749,490

The above Condensed Statement of Financial Position should be read in conjunction with the accompanying notes.

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FSA Group Limited

Condensed Statement of Cash Flow

FOR THE HALF-YEAR ENDED 31 DECEMBER 2010 Note CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and debtors Payments to suppliers and employees Interest received Interest and other costs of finance paid Cashflow from operations Net cash receipts/(payments) for institutional creditor distributions 8 Income taxes paid NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of property, plant and equipment Acquisition of intangible assets Increase in specialty finance assets Decrease in bridging finance assets Increase in factoring finance assets NET CASH FLOWS USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Distributions paid to minority interests Share capital issued – net of issue costs Net Proceeds from borrowings NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at the beginning of the half-year CASH AND CASH EQUIVALENTS AT THE END OF THE HALF-YEAR Cash and cash equivalents at the end of the half year is represented by: CURRENT ASSETS Cash and cash equivalents ASSETS FINANCED BY NON-RECOURSE FINANCIAL LIABILITIES Cash and cash equivalents Total Cash and cash equivalents at the end of the half year		CONSOLIDATED 2010 2009 $ $ 19,244,310 14,221,043 (19,504,779) (16,177,814) 11,040,670 7,825,627 (7,311,714) (3,050,526) 3,468,487 2,818,330 (311,066) (1,876,894) (373,414) (471,437) 2,784,007 469,999 (94,952) (90,969) (94,694) (79,619) (19,147,366) (14,033,211) 7,000 1,272,932 (3,634,776) (3,838,841) (22,964,788) (16,769,708) (375,072) (455,678) - 5,049,095 23,250,409 9,992,903 22,875,337 14,586,320 2,694,556 (1,713,389) 13,999,970 19,691,971 16,694,526 17,978,582 8,369,546 8,324,980 16,694,526

The above Condensed Statement of Cash Flow should be read in conjunction with the accompanying notes.

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FSA Group Limited

Condensed Statement of Changes in Equity

FOR THE HALF-YEAR ENDED 31 DECEMBER 2010 CONSOLIDATED

CONSOLIDATED
At 1 July 2009 Total comprehensive income Transactions with owners in their capacity as owners Share based payments expense Share capital issued (net of issue costs) Distributions to minority interests At 31 December 2009 At 1 July 2010 Total comprehensive income Transactions with owners in their capacity as owners Share based payments expense Distributions to minority interests At 31 December 2010	Share Capital Reserves Retained earnings Non-Controlling Interest Total $ $ $ $ $ 7,137,472 611,570 22,768,833 1,550,591 32,068,466 - - 3,557,900 741,287 4,299,187 - 52,804 - - 52,804 5,049,095 - - - 5,049,095 - - - (471,752) (471,752)
	12,186,567 664,374 26,326,733 1,820,126 40,997,800
	11,692,255 664,374 30,289,396 2,103,464 44,749,489 - - 3,974,567 1,124,652 5,099,219 - 28,386 - - 28,386 - - - (509,743) (509,743)
	11,692,255 692,760 34,263,963 2,718,373 49,367,351

The above Condensed Statement of Changes in Equity should be read in conjunction with the accompanying notes.

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FSA Group Limited

Notes to the Consolidated Condensed Half-Year Financial Statements

31 DECEMBER 2010

1. BASIS OF PREPARATION OF THE FINANCIAL REPORTS

This interim consolidated financial report has been prepared in accordance with Accounting Standard AASB 134 “Interim Financial Reporting”, other authoritative pronouncements of the Australian Accounting Standards Board and Australian Accounting Interpretations as applicable. It is a general purpose financial report which is to be read in conjunction with the 30 June 2010 Annual Report and any public announcements made by the FSA Group Limited during the half-year in accordance with any continuous disclosure obligations arising under the Corporations Act 2001.

Notes of a type normally included in an annual financial report are not included.

The accounting policies and methods of computation have been consistently applied by the entities in the consolidated group and are consistent with those presented in the comparative financial information in the financial report.

2. SEGMENT INFORMATION

FSA Group Limited is an Australian entity whose principal activities are:

• Services which includes debt agreement proposal preparation and administration, trustee services (including personal insolvency agreements and bankruptcy), home loan broking and other related services;

• Home Loan Lending which includes the provision of mortgage finance; and

• Business Services and Lending which includes corporate consultancy services and the provision of bridging finance and factoring finance.

These segments have been identified as reportable by the Group’s Chief Operating Decision Maker.

The Company operates in one geographical segment being Australia.

Business segment Revenue and Results

Half-year ended 31 December

Revenue and Income External sales Finance Income Finance expense Net Finance Income Other Income Internal sales and income Eliminations Total Revenue and Income (net of Finance Expense) Results Segment profit before tax Income tax (expense)/benefit Segment profit/(loss) for the period	Serv	ices	**Home Loa **	n Lending	Business Services and Lending	Business Services and Lending	Other/U	nallocated	Consolida	**ted Total **
	2010 $	2009 $	2010 $	2009 $	2010 $	2009 $	2010 $	2009 $	2010 $	2009 $
	18,120,651 20,916 (155)	17,277,106 54,092 (1,167)	- 12,393,902 (7,286,822)	- 8,557,414 (4,384,742)	1,986,917 2,480,248 (565,735)	1,449,538 1,206,519 (336,823)	105,364 14,555 (26,031)	106,229 30,715 (15,682)	20,212,932 14,909,621 (7,878,743)	18,832,873 9,848,740 (4,738,414)
	20,761 - 1,178,575 4,359,058 (1,314,418)	52,925 - 923,303 4,318,446 (1,302,976)	5,107,080 - 18,818 1,725,866 (369,096)	4,172,672 - 104,194 1,599,283 (378,413)	1,914,513 32,340 - 1,118,172 (338,541)	869,696 760,890 - 212,168 (66,159)	(11,476) - - (104,725) 22,903	15,033 - - (70,836) (12,326)	7,030,878 32,340 1,197,393 (1,197,393)	5,110,326 760,890 1,027,497 (1,027,497)
									27,276,150 7,098,371 (1,999,152)	24,704,089 6,059,061 (1,759,874)
	3,044,640	3,015,470	1,356,770	1,220,870	**779,631 **	146,009	(81,822)	(83,162)	5,099,219	**4,299,187 **

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FSA Group Limited

Notes to the Consolidated Condensed Half-Year Financial Statements

31 DECEMBER 2010

2. SEGMENT INFORMATION continued

Total Assets for which there has been a material change from the amount disclosed in the previous financial statements

Included in the “Home Loan Lending” segment are assets relating to the Fox Symes Home Loans Warehouse Trust #1, which have changed materially from the previous reported financial statements. The amount of the change is as follows:

	As at 31 December 2010	As	30 June 2010	Increase/(Decrease)
	$
			$	$
Cash and cash equivalents	8,324,980		6,605,211	1,719,769
Specialty Finance Assets	220,146,693		200,434,621	19,712,072

The increase in Specialty Finance Assets has been primarily financed by increases in Non-Recourse Financial Liabilities.

3. OTHER INCOME

31 December 2009

On 1 July 2009, a controlled entity of FSA Group Limited was granted an option to acquire ordinary shares in a company designated at “fair value through profit and loss”. The fair value of the options acquired at 31 December 2009 was $760,890.

4. DETAILS OF ASSOCIATES

The consolidated entity has 50% shareholding in its associate, Huntingdale Smythe Lawyers Pty Limited. There was no change to this percentage shareholding in the current or the comparative period.

5. EARNINGS PER SHARE

(a) Reconciliation of earnings used to calculated basic and dilutive earnings per share Comprehensive income for the period - Owners ($) Basic earning per share (cents) Diluted earning per share (cents) (b) Weighted average number of ordinary shares outstanding during the year Dilution effect of options Dilution effect of convertible redeemable preference shares Weighted average number of ordinary shares outstanding during the year used in calculating dilutive EPS		31 December 2010 31 December 2009 3,974,567 3,557,900 2.89 3.00 2.89 2.81 31 December 2010 31 December 2009 Number Number 137,536,752 118,527,746 - 195,122 - 8,000,000
		137,536,752 126,722,868

6. MATURITY ANALYSIS

Specialty Finance Assets

Amounts to be received in less than 1 year Amounts to be received in greater than 1 year Provision for impairment	31 December 2010 30 June 2010 $ $ 2,492,270 2,199,038 217,821,867 198,455,788
	220,314,137 200,654,826
	(167,444) (220,205)
	220,146,693 200,434,621

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FSA Group Limited

Notes to the Consolidated Condensed Half-Year Financial Statements

31 DECEMBER 2010

6. MATURITY ANALYSIS continued

Warehouse Facilities

Amounts payable in less than 1 year	31 December 2010 30 June 2010 $ $ 214,118,173 194,541,639
	214,118,173 194,541,639

Warehouse facilities are used to fund mortgages and include revolving Senior and Mezzanine Note facilities. The drawdown limit under the Senior and Mezzanine Note facilities is $235 million.

The current Warehouse facilities are due to expire and be renewed on 15 October 2012.

7. SHARE CAPITAL

The following movements in Share Capital are material to the understanding of the interim period:

31 December 2010

Nil

1 January 2010 to 30 June 2010

On 27 January 2010, 500,000 ordinary shares were issued on exercise of 500,000 $0.25 options;

On 1 February 2010, 8 convertible redeemable preference shares ("CRPS") were converted pursuant to the terms of the purchase agreement of 180 Group, acquired on 21 April 2006, upon 180 Group meeting its cumulative profit target to 30 June 2008. The remaining 8 CRPS were redeemed at this time due to 180 Group not meeting its profit target for 30 June 2009.

31 December 2009

On 7 October 2009, FSA Group Limited issued 11,351,340 ordinary shares at $0.37 per share as part of a private placement of shares and in satisfaction of associated placement fees.

On 6 November 2009, FSA Group Limited issued 2,964,932 ordinary shares at $0.37 per share as part of an existing shareholders purchase plan.

8. DISTRIBUTIONS TO INSTITUTIONAL CREDITORS

For all debt agreements administered prior to 1 July 2007, cash is received by the company from debtors in satisfaction of payment arrangements under Part IX debt administrations. After payment of administration costs distributions are made to creditors on agreed payment dates. Due to legislative changes, for all debt agreements administered since 1 July 2007, monies are banked into a separate trust bank account, which is not part of the consolidated group. Debt Agreement administration fees are disbursed from this account along with monies owed to institutional creditors. As the number of debt agreements administrations prior to 1 July 2007 reduce, due to finalisation of these agreements, amounts received into and disbursed to creditors from the consolidated entity’s cash accounts will reduce.

9. CONTINGENT ASSETS AND CONTINGENT LIABILITIES

At reporting date loan applications that had been accepted by the Group but had not yet settled amount to $6,010,000.

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FSA Group Limited

Notes to the Consolidated Condensed Half-Year Financial Statements

31 DECEMBER 2010

10. CHANGES IN THE COMPOSITION OF THE ENTITY DURING THE INTERIM PERIOD

There were no changes in the composition of the entity during the interim period other than as follows:

2010

Subsidiaries

Incorporation of new subsidiary

Name and description of the entity	Incorporation date	Voting rights on incorporation	Consideration
Fox Symes Home Loans (Special Services) Pty Ltd,a loan servicingentity	10 December 2010	95%	$1

2009

Nil

11. SUBSEQUENT EVENTS

There have been no events since 31 December 2010 that impact upon the financial report as at 31 December 2010, except as below:

On 15 February 2011, 180 Capital Finance Pty Ltd renewed its cash advance loan facility which expired on 31 December 2010 for a further 2 year term expiring on 31 December 2012. The limit of the facility was reset to the utilised level of $2.5m and the pricing of the facility was reduced accordingly.

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Directors’ Declaration

In the Directors' opinion:

1. the attached financial statements and notes thereto comply with the Corporations Act 2001 , Australian Accounting Standard AASB 134 ' Interim Financial Reporting' , the Corporate Regulations 2001 and other mandatory professional reporting requirements;

2. the attached financial statements and notes thereto give a true and fair view of the consolidated entity's financial position as at 31 December 2010 and of its performance for the financial half-year ended on that date; and

3. there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of directors made pursuant to section 303(5) of the Corporations Act 2001, on behalf of the Directors.

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Tim Odillo Maher Director Sydney 25 February 2011

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