HARRIS TECHNOLOGY GROUP LIMITED - Annual Report 2008

THE SWISH GROUP LIMITED ABN 93 085 545 973 AND CONTROLLED ENTITIES

FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2008

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2008

	Page
Managing Director’s Letter	3
Corporate Directory	4
Directors’ Report	5
Auditor’s Independence Declaration	14
Corporate Governance Statement	15
Financial Report for the Year Ended 30 June 2008
Consolidated Income Statement	19
Consolidated Balance Sheet	20
Consolidated Statement of Changes in Equity	21
Consolidated Statement of Cash Flows	22
Notes to the Financial Statements	23
Directors’ Declaration	59
Independent Audit Report	60
ASX Additional Information	62

THE SWISH GROUP LIMITED MANAGING DIRECTOR’S LETTER

Dear Shareholder,

I have pleasure in enclosing the Annual Report for The Swish Group Limited (“Swish Group ”) and its controlled entities for the financial year ended 30 June 2008.

The Company continues to develop and expand its various digital media businesses in the rapidly growing digital media sector. The growth is partially reflected in the revenue of the Group growing rapidly from $2.5 million in the first half of the 2008 financial year to $4.9m in the second half, an increase of 96%. At the same time the Company has continued to significantly improve its operating performance from an EBITDA loss of $1.3m in the first half of the 2008 financial year to $0.3m in the second half of 2008. On current indications the Company believes that this trend will continue in the 2009 financial year.

The Company has spent the past 2-3 years establishing the foundations of its current businesses and now believes it is in a position to capitalise on the positions it has established. The Company has achieved market leadership in Australia in a number of the areas in which it operates, in particular in its digital signage, digital music and its film and television, advertising production and content distribution businesses.

The Company’s Digital Signage business continues to grow rapidly in terms of number of sites on which it sells advertising and the revenues it has been able to generate. The Good Health TV and the Pharmacy TV networks, which have audio visual screens in medical centres, hospitals and pharmacies throughout Australia, are becoming increasingly accepted by retailers and advertisers as a significant advertising medium because of their greater efficiency, flexibility and cost-effectiveness in delivering information and advertising when compared with traditional static merchandising. The Company continues to believe that digital signage will become an increasingly accepted and utilised advertising medium.

In the 2008 financial year the Company renewed its exclusive license agreement with The Orchard, the largest distributor and marketer of independent music in the world for a further 5 years until 2012. This effectively entrenches the Company’s leading position in the online music business in Australia, New Zealand and the Pacific for the foreseeable future. During the financial year the Company also extended its agreement with The Orchard and now has a similar exclusive arrangement for 5 years for all countries in South East Asia. Sales of digital music through the internet are expected to continue to grow rapidly and The Orchard/Swish AmpHead catalogue now consists of over 1.2 million tracks and 3,500 hours of video content, making it a significant player in this area.

The Company continues to increase its production and film distribution businesses, in particular its Indian feature film production business with an increase in the number of Indian/Bollywood studios wanting to shoot feature films in Australia and the USA and the Company has a number of Bollywood films that are at various stages of development. The increasing popularity of Indian/Bollywood films in Australia is also driving the success of our film, television, CD and DVD distribution business.

The Company continues to believe that the businesses it has established, acquired and developed, in the digital media area are well placed to continue the rapid growth they have experienced recently and justify the patience that shareholders have exhibited while these businesses have been developed. The Company remains extremely confident as to its prospects and looks forward to your continued support.

Yours faithfully,

Cary P. Stynes Managing Director Melbourne 22 September 2008

THE SWISH GROUP LIMITED CORPORATE DIRECTORY

DIRECTORS

Cary Peter Stynes (Managing Director) Stephen Layton (Non Executive Director) William Graham (Non Executive Director)

COMPANY SECRETARY

Peter Kenneth Crafter

REGISTERED OFFICE

1/102 Toorak Road South Yarra Victoria 3141

AUDITORS

Ernst & Young 8 Exhibition Street Melbourne Victoria 3000

BANKERS

National Australia Bank Limited 67 Ashley Street West Footscray Victoria 3012

SHARE REGISTRY

Computershare Registry Services GPO Box 242 Melbourne Victoria 3001

Tel: 1300 137 328

STOCK EXCHANGE LISTING

The Swish Group Limited’s ordinary shares are quoted on the Australian Stock Exchange Limited. (Stock Code: SWG).

STATE OF INCORPORATION

Victoria

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2008

The Directors present their report together with the financial report of the consolidated entity consisting of The Swish Group Limited and the entities it controlled, for the financial year ended 30 June 2008 and independent auditor’s report thereon. This financial report has been prepared in accordance with Australian Equivalents of International Financial Reporting Standards. Compliance with AIFRS ensures compliance with International Financial Reporting Standards (IFRS).

INFORMATION ON DIRECTORS AND COMPANY SECRETARY

The qualifications, experience and special responsibilities of each person who has been a Director of The Swish Group Limited, together with details of the Company Secretary, during the financial year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.

Names, qualifications, experience and special responsibilities

Name	Particulars
Mr. Cary Peter Stynes	Managing Director
LL.B (Melb), MAICD	Appointed 14 January 2003 Mr. Stynes spent six years in senior finance and management roles for a number of
	international hotel organisations. He spent five years as a commercial lawyer with
	international law firm Minter Ellison specialising in commercial litigation, insolvency,
	media, tourism, mergers and acquisition and corporate advisory work. In 1993 he co-
	founded Point of Sale Media Pty Ltd, which was subsequently acquired in 1995 by
	ASX-listed Media Entertainment Group Limited. He was appointed to the board of
	Media Entertainment Group Limited in 1995 and was Managing Director from 1997 to
	1999. He was Managing Director of ASX-listed Software Communication Group
	Limited from 2000 to 2001 and CBD Energy Limited from 2002 to 2003. He has been
	Managing Director of The Swish Group Limited since 2003. Mr. Stynes is also a Non
	Executive Director of ASX-listed Traffic Technologies Limited and a director of a range
	of private companies.
Mr. Stephen Layton	Non Executive Director
	Appointed 16 January 2004
	Mr. Layton has 25 years experience in all aspects of stockbroking in the UK and
	Australia. He became a member of the London Stock Exchange in 1985. He has
	experience in a number of stockbroking firms including Peake Lands Kirwan Pty Ltd,
	Bain Securities Ltd, Austock Brokers Pty Ltd and Terrain Securities Pty Ltd. He is
	currently a Director of Melbourne Capital Limited, a boutique corporate advisory
	group. He has experience in capital raisings and advises on initial public offerings,
	seed and secondary market capital raisings, mergers and acquisitions and project and
	financial valuations. He has been a Non-Executive Director of The Swish Group
	Limited since 2004.
Mr. William Gerard	Non Executive Director
Graham	Appointed 21 March 2007
	Mr. Graham has an extensive background in accounting and business having
	founded, developed and subsequently sold technology company NJS Technology
	Limited. NJS Technology which was established in 1990 held the Intel licence for
	Australia and was sold in 1995. Mr. Graham is one of Australia’s largest and most
	respected bookmakers having been involved in the racing industry for almost 40
	years. Mr. Graham is a former Non Executive Director of ASX-listed Betcorp Limited
	and is a director of a range of private companies. He has been a Non-Executive
	Director of The Swish Group Limited since 2006.

THE SWISH GROUP LIMITED DIRECTORS’ REPORT (Continued)

INFORMATION ON DIRECTORS AND COMPANY SECRETARY (Continued)

Company Secretary

Mr. Peter Kenneth Crafter LL.B (Hons), MBA, FCA, CA, MCT, FAICD, FCIS

Chief Financial Officer and Company Secretary Appointed 14 January 2003

Mr. Crafter is a Chartered Accountant in both Australia and the UK and qualified Corporate Treasurer with extensive experience in financial management including several years with KPMG and Touche Ross in the United Kingdom. He holds an honours degree in Law from the University of London and an MBA from Heriot-Watt University, Scotland. He was Chief Financial Officer of Software Communication Group Limited from 1999 to 2002 and was Acting Chief Executive Officer of that Company from 2001 to 2002. He was Chief Financial Officer of ASX listed CBD Energy Limited from 2002 to 2003. He has been Chief Financial Officer and Company Secretary of The Swish Group Limited since 2003 and was a Director from 2003 to 2006. He is also Company Secretary of ASX listed Traffic Technologies Limited.

Directors’ Meetings

The number of meetings of the Board of Directors held during the financial year and the number of meetings attended by each Director (while they were a Director) were as follows:

	Meetings	Meetings
	Eligible to	Attended
Director	Attend
Mr. Cary Stynes	7	7
Mr. Stephen Layton	7	7
Mr. William Graham	7	7

Board Committees

During the financial year and as at the date of this report, the Company did not have separately established nomination, audit or remuneration committees (refer Corporate Governance Statement below).

Directors’ Interests in Shares and Options of the Company

As at the date of this report, the relevant interests of the Directors in the shares and options of the Company were:

Director Mr. Cary Peter Stynes Mr. Stephen Layton Mr. William Graham	Fully Paid Ordinary Shares Options 83,660,0001 41,485,000 90,520,0002 39,760,000 27,346,840 2,000,000	Options

Includes shares held by Media Entertainment Pty Ltd in which the director holds a 47.5% interest. In addition shares and options are held by the director individually and his director related entity.
Includes shares held by Media Entertainment Pty Ltd in which the director holds a 47.5% interest. In addition shares and options are held by director individually and his director related entity.

Directors’ Interests in Contracts

Directors’ interests in contracts are disclosed in note 26 to the financial statements.

EARNINGS PER SHARE

EARNINGS PER SHARE
	Cents
Basic earnings per share	(0.3)
Diluted earnings per share	(0.3)

DIVIDENDS, PAID, RECOMMENDED AND DECLARED

No dividends were paid, declared or recommended since the start of the financial year ended 30 June 2008.

THE SWISH GROUP LIMITED DIRECTORS’ REPORT (Continued)

CORPORATE INFORMATION

Corporate structure

The Swish Group Limited is a company limited by shares that is incorporated and domiciled in Australia and listed on the ASX. The Swish Group Limited has prepared a consolidated financial report incorporating the entities that it controlled during the financial year. The Company’s subsidiary entities are set out in note 11 to the financial statements.

Nature of operations and principal activities

The consolidated entity’s principal activities in the course of the financial year were in the area of digital signage, digital music, film and television production and distribution, and telecommunications marketing and sales services businesses. There has been no significant change in the nature of these activities during the financial year.

Employees

The consolidated entity employed 48 employees as at 30 June 2008 (2007: 20 employees).

OPERATING AND FINANCIAL REVIEW

Group overview

Swish Group was listed on ASX in 1999. A new Board and management team were appointed in January 2003 and the Company was restructured and recapitalised and its shares re-quoted on ASX in May 2003. The Company operates Australia’s largest digital signage network in medical centres, hospitals and pharmacies throughout Australia, is Australia’s largest wholesaler of independent digital music to online music retailers and telecommunication companies, has a significant film and television production and distribution business and a telecommunication sales and marketing business. The Company’s principal divisions are Digital Signage, Digital Music, Film and Television Production and Distribution, and Telecommunications Marketing and Sales Services.

Review of operations

A review of the operations of the consolidated entity during the financial year and the results of those operations are as follows:

Digital Signage

Swish Digital Signage produces specially designed entertainment, information and advertising programmes for retail outlets, medical centres, hospitals and pharmacies. Swish Group owns and operates the Good Health Television, and Pharmacy TV digital signage networks.

Digital Music

The Company operates Australia’s largest independent wholesale online digital music and video content business combining online retail, wholesale rights management and label publishing. The Company has an exclusive agreement with USA based The Orchard, the world’s largest aggregator and marketer of independent music content which is expected to greatly enhance the Company’s production and content aggregation division. The Company, through its agreement with The Orchard, provides online music retailers and telecommunications companies with access to an international catalogue of over 1,200,000 music tracks and 3,500 hours of video content.

Digital Production

The Company produces all forms of digital audio and video content including the Company’s digital signage programmes and provides digital production services to the film, television and advertising industries. The Company has line produced a number of Indian/Bollywood feature films in Australia and the USA.

Digital Distribution

The Company distributes Indian/Bollywood films in Australia for screening at leading cinemas chains including Hoyts and Greater Union.

THE SWISH GROUP LIMITED DIRECTORS’ REPORT (Continued)

OPERATING AND FINANCIAL REVIEW (Continued)

Telecommunications Services

The Company provides marketing and sales services for leading telecommunications companies Vodafone and Primus Telecoms.

Results

Total revenue for the year ended 30 June 2008 was $7,436,071 (2007: $4,558,394). During the financial year the Company continued to commercialise its digital signage, digital music, film and television production and distribution and telecommunications sales and marketing services businesses. Overheads were at a similar level to the previous financial year. The Company has continued to exercise strict cost controls given its continued reliance on capital raisings.

Earnings before interest, tax, depreciation and amortisation ( EBITDA ) were a loss of $1,643,217 (2007: loss $1,744,958). Depreciation was $100,875 (2007: $172,641). The consolidated entity incurred a net loss of $1,765,089 in the year ended 30 June 2008 (2007: loss $1,974,567). Of the EBITDA losses incurred in the 2008 financial year, approximately $1.3 million was incurred in the first half of the financial year and accordingly the Company has experienced a significant improvement in its operating performance during the second half of the financial year.

Financial position

Net liabilities at 30 June 2008 were $53,581 (2007: net liabilities $362,977).

Receivables were $788,552 as at 30 June 2008 (2007: $208,786).

The Company had $219,455 net book value of plant and equipment as at 30 June 2008 (2007: $253,839). As at 30 June 2008 the Company had $865,500 (2007: $760,500) of intangible assets, representing goodwill.

Payables were $1,903,054 at 30 June 2008 (2007: $1,438,468). The Company had net borrowings of $110,512 as at 30 June 2008 (2007: $336,277).

Cash flows

The consolidated entity incurred net operating cash outflows of $1,409,155 during the year ended 30 June 2008 (2007: net outflow $1,442,327). Net investing cash inflows were $66,491 in the year ended 30 June 2008 (2007: net inflow $62,211).

Net financing cash inflows of $1,386,285 (2007: net inflow $1,465,638) in the year ended 30 June 2008 included $1,620,000 proceeds from equity capital raisings. Because the Company’s digital media businesses are still being commercialised the Company’s income for the year ended 30 June 2008 has been insufficient, on its own, to service its operating expenses. Accordingly, the Company has undertaken a number of small capital raisings during the year to fund the continuing development of its digital media businesses. During the financial year the Company, took out new borrowings of $404,218, repaid borrowings of $547,183 and incurred capital raising costs of $90,750.

Cash balances were $121,703 as at 30 June 2008 (2007: $211,064).

Likely developments and expected results

The Company will continue to pursue its strategy of developing and commercialising its various digital media businesses, with particular emphasis on its digital signage, digital music and film and television production and distribution businesses. The Company will continue to seek out suitable acquisition and joint venture opportunities in the digital media sector as opportunities arise. The Board is not yet in a position to give an accurate forecast of revenue and profitability for the financial year ending 30 June 2009.

RISK MANAGEMENT

The Board takes a proactive approach to risk management. The Board is responsible for ensuring that risks, and also opportunities, are identified on a timely basis and that the Company’s objectives and activities are aligned with the risks and opportunities identified by the Board. The Company believes that it is crucial for all Board members to be a part of this process and, as such, the Board has not established a separate risk management committee.

THE SWISH GROUP LIMITED DIRECTORS’ REPORT (Continued)

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

On 6 July 2007 the Company completed a placement of 20,000,000 shares to sophisticated investors at 1 cent per share raising $200,000 to provide working capital and to finance potential acquisitions and issued 1,000,000 shares to vendors at 1.3 cents per share raising $13,000 as purchase consideration for businesses acquired by the Company.

On 14 September 2007 the Company completed a placement of 100,000,000 shares to sophisticated investors at 1 cent per share raising $1,000,000 to provide working capital and to finance potential acquisitions.

On 23 November 2007 the Company issued 30,000,000 shares to vendors at 1 cent per share raising $300,000 as purchase consideration for businesses acquired by the Company.

On 5 December 2007 the Company completed a placement of 20,000,000 shares to Directors at 1 cent per share raising $200,000, a placement of 22,000,000 shares to sophisticated investors at 1 cent per share raising $220,000 to provide working capital and to finance potential acquisitions and a placement of 2,500,000 shares to vendors at 1 cent per share raising $25,000 as purchase consideration for businesses acquired by the Company.

On 16 May 2008 the Company completed a placement of 11,500,000 shares on conversion of convertible notes at 0.72 cents per share raising $82,800 to retire debt and a placement of 8,000,000 shares to vendors at 1.1 cents per share raising $88,000 as purchase consideration for businesses acquired by the Company.

AFTER BALANCE DATE EVENTS

The following are significant matters which have arisen post 30 June 2008 that may affect the consolidated entity in financial years subsequent to 30 June 2008:

On 7 July 2008 the Company completed a placement of 11,574,028 shares on conversion of convertible notes at 0.72 cents per share raising $83,333 to retire debt.

On 2 September 2008 the Company completed a placement of 64,583,250 shares to sophisticated investors and Directors at 0.8 cents per share raising $516,666 to provide working capital, retire debt, and as consideration for businesses acquired by the Company and a placement of 13,020,937 shares on conversion of convertible notes at 0.64 cents per share raising $83,334 to retire debt.

On 8 September 2008 the Company acquired an internet television business swishtv.com.au which will be incorporated into the Company’s existing digital media businesses.

The financial effects of the above transactions have not been brought to account at 30 June 2008.

ENVIRONMENTAL REGULATION

The consolidated entity’s operations are not subject to any significant Commonwealth or State environmental regulations or laws.

SHARE OPTIONS

A total of 16,100,000 options were issued to staff during the financial year ended 30 June 2008. A total of 5,650,000 options lapsed during the financial year. No options have been issued since 30 June 2008. No options have been exercised during the financial year ended 30 June 2008 and until the date of this report. As at the date of this report, there were 289,302,342 options outstanding. Refer to note 17 of the financial statements and the Remuneration Report for further details of options outstanding.

THE SWISH GROUP LIMITED DIRECTORS’ REPORT (Continued)

INDEMNIFICATION AND INSURANCE OF DIRECTORS, OFFICERS AND AUDITORS

No indemnities have been given or insurance premiums paid during or since the end of the financial year for any Directors, officers or auditors of the consolidated entity.

PROCEEDINGS ON BEHALF OF THE CONSOLIDATED ENTITY

No person has applied for leave of Court to bring proceedings on behalf of the consolidated entity.

REMUNERATION REPORT (Audited)

This report outlines the remuneration arrangements in place for Directors and executives of the Company.

Remuneration policy

The performance of the Company depends upon the quality of its Directors and executives. To be successful, the Company must attract, motivate and retain highly skilled Directors and executives. To this end, the Company seeks to provide competitive rewards to attract high calibre executives. The Board of Directors is responsible for determining and reviewing remuneration arrangements for the Directors, the Managing Director and the executive team. The Board of Directors assesses the appropriateness of the nature and amount of remuneration of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team.

Remuneration committee

In view of the size of the Company, the Company does not have a separately established remuneration committee.

Remuneration structure

In accordance with best practice corporate governance, the structure of non-executive Director and executive remuneration is separate and distinct.

Executive Director and senior manager remuneration

Objective

The Company aims to reward executives with a level and mix of remuneration commensurate with their position and responsibilities within the Company so as to:

Reward executives for Company and individual performance;
Align the interests of executives with those of shareholders;
Link reward with the strategic goals and performance of the Company; and
Ensure total remuneration is competitive by market standards.

Structure

Currently remuneration is paid in the form of cash remuneration, superannuation contributions and share options where applicable. The Company’s remuneration policy is not currently directly related to Company performance. The Company paid no bonuses during the financial year ended 30 June 2008. Further details of the remuneration of the Directors and Key Management Personnel are provided in note 26 to the financial statements.

THE SWISH GROUP LIMITED DIRECTORS’ REPORT (Continued)

REMUNERATION REPORT (Audited) (Cont)

Share options

All Directors and employees have the opportunity to qualify for participation in the Company Share Option Plan. The issue of options under this plan is at the discretion of the Board and is not currently based on Company performance. Options are used by the Company as a non-cash form of remuneration and have the objective of aligning employee interests with the objective of increasing shareholder wealth. Any issue of options under the plan to Directors is subject to shareholder approval. No options were granted as part of Directors’ remuneration during the year ended 30 June 2008 (2007: 10,000,000 options). Details regarding the issue of share options under the Company Share Option Plan to Directors during the year are provided in note 17 to the financial statements. A total of 16,100,000 options were issued to executives or staff during the year ended 30 June 2008 (2007: Nil).

Employment contracts

The Managing Director has a formal service agreement with the Company. Other staff are employed on contracts which are generally terminable on either party giving between one week and one month’s written notice. Any options not exercised are forfeited if not exercised within 28 days of termination of employment.

Non-Executive Director remuneration

The Company’s constitution provides that the total amount of remuneration provided to all non-executive Directors must not exceed an amount set by the Company in general meeting.

Director’s remuneration

Details of the nature and amount of each element of the emoluments of each Director of the Company for the financial year ended 30 June 2008 are as follows:

Name 2008 Mr. Cary Stynes Managing Director Mr. Stephen Layton Non Executive Mr. William Graham Non Executive Total 2007 Mr. Cary Stynes Managing Director Mr. Stephen Layton Non Executive Mr. William Graham Non Executive Total	Primary Emoluments Post Employment Equity Base Salary $ Director’s Fees $ Superannuation Contributions $ Number of Options Granted No. Value of Options Granted $ Percentage of options value that represent remuneration % Total $ $291,271 - - - - - $291,271 - $36,000 - - - - $36,000 - $36,000 - - - - $36,000
	$291,271 $72,000 - - - - $363,271
	$180,000 - - 6,000,000 $29,800 14% $209,800 - - - 2,000,000 $11,000 100% $11,000 - - - 2,000,000 $11,000 100% $11,000
	$180,000 - - 10,000,000 $51,800 $231,800

Mr. Stynes’ salary included $182,683 (2007: $116,545) of accrued emoluments not paid to him during the financial year. Non-executive director fees of $36,000 were accrued during the financial year but not paid to each of Mr. Layton and Mr. Graham.

THE SWISH GROUP LIMITED DIRECTORS’ REPORT (Continued)

REMUNERATION REPORT (Audited) (Cont)

Executives

Details of the nature and amount of each element of the emoluments of each Key Management Personnel of the Company for the financial year ended 30 June 2008 are as follows:

Name 2008 Mr. Peter Crafter Company Secretary Mr. Gary Mackenzie Digital Music and Telecommunications Services Manager Mr. Marcus Georgiades Digital Production Manager Mr. Craig Harris Brand Management Services Manager Total Name 2007 Mr. Peter Crafter Company Secretary Mr. Gary MacKenzie Digital Music and Telecommunications Services Manager Mr. Marcus Georgiades Digital Production Manager Mr. Craig Harris Brand Management Services Manager (Started May 2007) Mr. Darren Altman Digital Signage Manager Total (Started Feb 2007)	Primary Emoluments Post Employment Equity Base Salary $ Superannuation Contributions $ Number of Options Granted No. Value of Options Granted $ Total $ $40,000 $3,600 2,000,000 $706 $44,306 $133,578 - 2,000,000 $706 $134,284 $173,543 - 1,000,000 $353 $173,896 $193,600 - 1,000,000 $353 $193,953
	$540,721 $3,600 6,000,000 $2,118 $546,439
	Primary Emoluments Post Employment Equity Base Salary $ Superannuation Contributions $ Number of Options Granted No. Value of Options Granted $ Total $ $37,450 $24,626 - $- $62,076 $88,038 $- - $- $88,038 $113,667 $- - $- $113,667 $29,333 $- - $- $29,333 $35,277 $3,175 - $- $38,452
	$303,765 $27,801 - $- $331,566

Options

No options were granted as part of Directors’ remuneration during the year ended 30 June 2008 (2007: 10,000,000). During the financial year ended 30 June 2007, Mr. Stynes was issued with a total of 6,000,000 options following shareholder approval at the Company’s AGM on 29 November 2006, of which 2,000,000 Options are exercisable at 2 cents per share vesting on 1 December 2006, and expiring on 30 November 2011, 2,000,000 Options exercisable at 3 cents per Share vesting on 1 December 2006, and expiring on 30 November 2011 and 2,000,000 Options exercisable at 4 cents per Share vesting on 1 December 2006, and expiring on 30 November 2011. Each of Mr. Layton and Mr. Graham were issued with 2,000,000 options following shareholder approval at the Company’s AGM on 29 November 2006. The options vested on 1 December 2006, expire on 30 November 2011 and have an exercise price of 2 cents per share. None of the options are subject to any performance conditions. The purpose of the option issue was to incentivise the Directors.

A total of 16,100,000 options were issued to executives or staff during the year ended 30 June 2008 (2007: Nil).

Options granted as remuneration are valued at grant date in accordance with AASB 2 Share-based Payments. A total of 5,650,000 options previously granted as remuneration lapsed during the year. No options previously granted as remuneration were exercised during the year.

The purpose of prior period option issues to executives was to incentivise executives. None of the options are subject to any performance conditions. Options vested on the date they were granted.

THE SWISH GROUP LIMITED DIRECTORS’ REPORT (Continued)

Fair value of options

A total of 16,100,000 were issued to staff in the financial year ended 30 June 2008 (2007: 10,000,000 options were issued to staff). The fair value of each option has been estimated at the date of grant using the Binomial option-pricing model with the following weighted average assumptions used:

Dividend yield Expected volatility Risk-free interest rate Expected life of option	2008 Nil 50% 6.43% 3.0 years	2007 Nil 15% 5.500% 5.0 years

The dividend yield reflects the assumption that no dividends will be paid by the Company for the foreseeable future. The expected life of the options is based on the term of the options and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may not necessarily be the actual outcome. All options issued to date have vested. Refer to note 17 of the financial statements for further details.

All options are vested as at the date of grant.

TAX CONSOLIDATION

The Company and its subsidiaries have not as at the date of this report elected to form a tax consolidated group.

AUDITOR’S INDEPENDENCE DECLARATION

A copy of an auditor’s independence declaration in relation to the audit for the financial year is provided with this report.

NON-AUDIT SERVICES

The auditor, Ernst & Young, did not provide any non-audit services to the Company during the financial year ended 30 June 2008.

Signed in accordance with a resolution of the Directors.

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Cary P. Stynes Managing Director

Melbourne 22 September 2008

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Auditor’s Independence Declaration to the Directors of The Swish Group Limited

In relation to our audit of the financial report of The Swish Group Limited for the financial year ended 30 June 2008, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

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Ernst & Young

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Robert J Dalton Partner 22 September 2008

Liability limited by a scheme approved under Professional Standards Legislation

THE SWISH GROUP LIMITED CORPORATE GOVERNANCE STATEMENT

The Board of Directors of The Swish Group Limited is responsible for the corporate governance of the consolidated entity. The Board guides and monitors the business and affairs of the Company on behalf of the shareholders by whom they are elected and to whom they are accountable.

The Board of Directors has implemented the Best Practice Recommendations of the ASX Corporate Governance Council to the extent appropriate for the size and nature of the Company’s business as described below. References contained in this Corporate Governance Statement are to the ASX Corporate Governance Council’s “Corporate Governance Principles and Recommendations” 2[nd] Edition. The Corporate Governance Statement must contain specific information and also report on the Company’s adoption of the Council’s best practice recommendations on an exception basis, whereby disclosure is required of any recommendations that have not been adopted by the Company, together with the reasons why they have not been adopted. The Company’s corporate governance practices were in place throughout the year ended 30 June 2008.

Board Functions

The Board has been structured to ensure that an appropriate mix of experience and expertise is available to provide strategic guidance for the Company and effective oversight of management.

The Board acts on behalf of and is accountable to shareholders. The Board seeks to identify the expectations of shareholders, as well as other regulatory and ethical expectations and obligations. In addition, the Board is responsible for identifying areas of significant business risk and ensuring arrangements are in place to adequately manage those risks. In accordance with Recommendation 1.1, the functions reserved to the Board are as follows:

Approving and periodically reviewing the business and financial objectives and strategies and plans of the Company;
Monitoring the financial performance of the Company, including approval of the Company’s financial statements;
• Ensuring that adequate internal control systems and procedures exist and that compliance with these systems and procedures is maintained;
Identifying areas of significant business or financial risk to the Company and ensuring management takes appropriate action to manage those risks;
Reviewing the performance and remuneration of Board members and key members of staff;
Monitoring the operations of the consolidated entity and the performance of management;
Establishing and maintaining appropriate ethical standards; and
Reporting to the shareholders, the Australian Securities and Investments Commission and the Australian Stock Exchange as required.

The Board delegates to the Managing Director and the executive team responsibility for the operation and administration of the Company.

In accordance with Recommendation 1.2, the performance of senior executives is reviewed regularly against the results of the part of the business for which they are responsible.

Structure of the Board

The Directors in office and the term in office held by each Director at the date of this report are as follows:

Name	Position	Term in office
Cary Stynes	Managing Director	5 years 8 months
Stephen Layton	Non-Executive Director	4 years 8 months
William Graham	Non-Executive Director	2 years 6 months

The skills, experience and expertise relevant to the position held by each Director in office at the date of the annual report is included in the Directors’ Report. Directors are considered to be independent when they are independent of management, are not a substantial shareholder and are free from any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of their unfettered and independent judgement.

In the context of Director independence, “materiality” is considered from both the company and individual Director perspective. The determination of materiality requires consideration of both quantitative and qualitative elements. An item is presumed to be quantitatively immaterial if it is equal or less than 5% of the appropriate base amount. It is presumed to be material (unless there is qualitative to the contrary) if it is equal to or greater than 10% of the appropriate base amount. Qualitative factors considered include where a relationship is strategically important, the competitive landscape, the nature of the relationship and the contractual or other arrangements governing it and other factors which point to the actual ability of the Director in question to shape the direction of the company’s loyalty.

THE SWISH GROUP LIMITED CORPORATE GOVERNANCE STATEMENT (Continued)

Recommendation 2.1 requires that a majority of the Board be independent Directors. The Corporate Governance Council defines independence as being free from any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of unfettered and independent judgement. In accordance with this definition, none of the Directors of the Company are considered to be independent, as they are all substantial shareholders in the Company. It is the Company’s objective that a majority of independent Directors be appointed in due course.

Recommendation 2.2 requires the chair of the Company to be independent. Recommendation 2.3 requires that the roles of the chair and chief executive officer should not be exercised by the same individual. The Company is not yet in a position to appoint an independent chair. It is the Company’s objective that an independent chair be appointed in due course. Mr. Cary Stynes, the Managing Director, will continue to chair Board and shareholder meetings until the appointment of a suitably qualified chair at which time the roles of chair and Managing Director will be split.

The Company’s constitution provides that a Director other than the Managing Director may not retain office for more than three calendar years or beyond the third annual general meeting following his or her election, whichever is longer, without submitting for re-election. One third of the Directors retire each year and are eligible for re-election. The Directors who retire by rotation at each annual general meeting are those with the longest length of time in office since their appointment or last election. All Directors must be elected by the members. It is not a requirement for a person who is a Director to own shares in the Company.

Recommendation 2.4, 4.2 and 9.2 require listed entities to establish nomination, audit and remuneration committees. During the financial year ended 30 June 2008, the Company did not have separately established nomination, audit or remuneration committees. In view of the size of the Company the Board considers that establishing formally constituted committees for board nominations, audit, and remuneration would contribute little to its effective management. Accordingly, the nomination of new Directors, audit matters and the setting and review of remuneration levels of Directors and senior executives are reviewed by the Board as a whole and approved by resolutions of the Board (with abstentions from relevant Directors where there is a conflict of interest). Where the Board considers that particular expertise or information is required, which is not available from within their number, appropriate external advice will be taken and reviewed prior to a final decision being made by the Board.

The Company provides the capacity for any Director to obtain separate professional advice on any matter being discussed by the Board and for the Company to pay the cost incurred. Before the engagement is made, the Director is required to obtain the Chairman of the Board's approval. Approval will not be unreasonably denied and the Director will be expected to provide the Board with a copy of that advice.

Performance

In accordance with Recommendation 2.5, the performance of the Board and individual Directors are evaluated on an ongoing basis by the Board as a whole. During the reporting period, the Board reviewed the performance of each Board member and key executive. The performance criteria against which Directors and executives are assessed are aligned with the financial and non-financial objectives of the Company. Directors whose performance is consistently unsatisfactory may be asked to retire.

Ethics

All Directors and officers of the Company are required to discharge their responsibilities ethically and with integrity.

The Board has drawn up a code of conduct to guide Board members, executives and employees in carrying out their duties and responsibilities, to guide compliance with legal and other obligations and to maintain confidence in the Company’s integrity, as required by Recommendation 3.1. Executives and employees are encouraged to report to Board members any concerns regarding potentially unethical practices.

Trading Policy

Dealings are not permitted in the Company’s securities at any time when Directors, officers or employees are in the possession of price sensitive information not already available to the market, as required by Recommendation 3.2. In addition, the Corporations Act 2001 prohibits the purchase or sale of securities whilst a person is in possession of inside information and the ASX Listing Rules require disclosure of any trading undertaken by Directors or their related entities in the Company’s securities. The Company Secretary must be notified of any trading and must also be provided with confirmation that the trading has occurred. As required by the ASX Listing Rules, the Company notifies the ASX of any transaction conducted by the Directors in the securities of the Company.

THE SWISH GROUP LIMITED CORPORATE GOVERNANCE STATEMENT (Continued)

Audit Committee

Principle 4 requires listed entities to establish an audit committee. In view of the size of the Company, the Company did not have a separately established audit committee during the financial year ended 30 June 2008. In view of the size of the Company and the Board, the Board considers that establishing a formally constituted audit committee would contribute little to its effective management.

Disclosure

The Company has established written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior management level for that compliance, as required by Recommendation 5.1. All ASX announcements are handled by the Managing Director or Company Secretary and there are requirements within the Company to ensure that the ASX’s continuous disclosure requirements are strictly followed and that unauthorised disclosure of price sensitive information is not made other than through the ASX’s Company Announcements Office.

Shareholder Communication

The Board recognises the importance of communicating effectively with its shareholders, as required by Recommendation 6.1. Information is communicated to shareholders and the market through:

The Annual Report which is distributed to shareholders;
The Annual General Meeting and other shareholder meetings called to obtain approval for Board action as appropriate and required;
The Half-Yearly Financial Report and Quarterly Cash Flow Statements;
Other announcements made in accordance with ASX Listing Rules; and
Information provided on the Company’s website www.swishgroup.com.au, including the Company’s Annual Report, a link to announcements made to the market and other information for investors.

The Company’s reports and ASX announcements may be viewed and downloaded from the ASX website: www.asx.com.au (stock code: SWG).

It is the Company’s policy that the external auditor attends the Annual General Meeting of the Company and is available to answer shareholder questions about the conduct of the audit and the preparation and content of the auditor’s report, as required by Recommendation 6.2.

Risk

The Board determines the Company’s risk profile and is responsible for ensuring that risks, and also opportunities, are identified on a timely basis and that the Company’s objectives and activities are aligned with the risks and opportunities identified by the Board. The Company believes that it is crucial for all Board members to be a part of this process and, as such, the Board has not established a separate risk management committee.

The Board has established policies on the oversight and management of material business risk, as required by Recommendation 7.1, including risks related to the Company’s business operations, financial position, safeguarding its assets and the interests of its stakeholders, including its security holders, employees, customers, suppliers and bankers. The executive Directors are closely involved in the day-to-day management of the Company’s operations and, given the current size of the operations of the consolidated entity, are in a position to continually monitor risk with the assistance of the executive team.

In accordance with Recommendation 7.2, the Board has required 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. Management reports to the Board on the effectiveness of the Company’s management of its material business risks.

Managing Director and CFO Certification

The Managing Director and Chief Financial Officer have provided a written statement to the Board 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, as required by Recommendation 7.3.

THE SWISH GROUP LIMITED CORPORATE GOVERNANCE STATEMENT (Continued)

Remuneration

The Board is responsible for determining and reviewing remuneration arrangements for the Directors themselves, the Managing Director and the executive team. It is the Company’s objective to provide maximum stakeholder benefit from the retention of a high quality Board and executive team by remunerating Directors and key executives fairly and appropriately with reference to relevant employment market conditions and their experience and expertise. To assist in achieving this objective, the Board takes account of the Company’s financial and operating performance in setting the nature and amount of executive Directors’ and executives’ remuneration. In relation to the payment of bonuses, options or other incentive payments, discretion is exercised by the Board, having regard to the overall performance of the Company and the performance of the individual during the period. The expected outcomes of the remuneration structure are:

Attraction of quality management to the Company.
Retention and motivation of key executives.
Performance incentives which allow executives to share the rewards of the success of the Company.

In view of the size of the Company and the Board, the Company does not have a separately established remuneration committee, as required by Recommendation 8.1.

Further details of the Company’s remuneration policy, including details of the amount of remuneration and all monetary and non-monetary components for each of the five highest paid (non-Director) executives during the year and for each of the Directors, are set out in the Remuneration Report forming part of the Directors’ Report in accordance with Recommendation 8.2.

Non-executive Directors are not remunerated on the same basis as executives, in accordance with the Guidelines for Non-Executive Recommendation included in Principal 8. The Company’s constitution provides that the total amount of remuneration provided to all non-executive Directors must not exceed an amount set by the Company in general meeting. Non-Executive Directors do not receive bonus payments. There is no scheme to provide retirement benefits, other than statutory superannuation, to non-executive Directors. The Non-Executive Directors have received options in respect of their services to the Company, although Shareholder approval is required and has been obtained for all equity-based remuneration payable to Board members.

THE SWISH GROUP LIMITED AND CONTROLLED ENTITES CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2008

Note Revenue 5 Cost of sales Film Production costs Employee costs 6 Administrative expenses 6 Impairment losses 6 Depreciation expense 6 Finance costs 6 Other 6 Loss before income tax Income tax expense 7 Loss attributable to the members of the parent 18 Basic earnings per share (cents) Diluted earnings per share (cents) 8 8	Consolidated Consolidated Company Company 2008 2007 2008 2007 $ $ $ $ 7,436,071 4,558,394 1,552 113,772 (2,421,470) (417,478) - - (2,805,442) (3,119,194) - - (2,808,465) (1,519,615) (503,054) (623,152) (1,043,911) (738,409) (1,846,294) (433,401) - (12,500) - (12,500) (100,875) (172,641) (26,592) (14,166) (20,997) (26,968) (12,646) (6,219) - (526,156) - (1,559,356)
	(1,765,089) (1,974,567) (2,387,034) (2,535,022) - - - -
	(1,765,089) (1,974,567) (2,387,034) (2,535,022)
	(0.3) (0.3) (0.5) (0.5)

The accompanying notes form part of these financial statements.

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2008

Note ASSETS Current assets Cash and cash equivalents 9 Trade and other receivables 10 Total current assets Non-current assets Investments 11 Plant and equipment 12 Intangible assets 13 Total non-current assets TOTAL ASSETS LIABILITIES Current liabilities Trade and other payables 14 Short-term borrowings 15 Provisions 16 Total current liabilities TOTAL LIABILITIES NET ASSETS/(DEFICIENCY) EQUITY Equity attributable to equity holders of the parent Contributed equity 17 Options granted reserve 17 Accumulated losses 18 TOTAL EQUITY	Consolidated Consolidated Company Company 2008 2007 2008 2007 $ $ $ $ 121,703 211,064 97,595 171,188 788,552 208,786 42,439 444,330
	910,255 419,850 140,034 615,518
	- - 865,500 760,500 219,455 253,839 55,991 36,491 865,500 760,500 - -
	1,084,955 1,014,339 921,491 796,991
	1,995,210 1,434,189 1,061,525 1,412,509
	1,903,054 1,438,468 929,921 822,943 110,512 336,277 99,732 257,949 35,225 22,421 35,225 22,421
	2,048,791 1,797,166 1,064,878 1,103,313
	2,048,791 1,797,166 1,064,878 1,103,313
	(53,581) (362,977) (3,353) 309,196
	20,275,413 18,206,613 20,275,413 18,206,613 57,485 51,800 57,485 51,800 (20,386,479) (18,621,390) (20,336,251) (17,949,217)
	(53,581) (362,977) (3,353) 309,196

The accompanying notes form part of these financial statements.

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2008

TOTAL EQUITY AT THE BEGINNING OF THE YEAR Loss for the year Exchange differences on translation of foreign operations Total recognised income and expense for the period Options reserve Option based payments Transactions with equity holders in their capacity as equity holders: Shares Issued Transaction costs on share issues Options issued to investors TOTAL EQUITY AT THE END OF THE YEAR	Consolidated Consolidated Company Company 2008 2007 2008 2007 $ $ $ $ (362,977) (246,280) 309,196 987,813
	(1,765,089) (1,974,567) (2,387,034) (2,535,022) - 1,465 - -
	(1,765,089) (1,973,102) (2,387,034) (2,535,022)
	5,685 51,800 5,685 51,800
	5,685 51,800 5,685 51,800
	2,128,800 (60,000) - 1,364,000 - 440,605 2,128,800 (60,000) - 1,364,000 - 440,605
	2,068,800 1,804,605 2,068,800 1,804,605
	(53,581) (362,977) (3,353) 309,196

The accompanying notes form part of these financial statements.

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2008

Note Cash flows from operating activities Receipts from customers Payments to suppliers and employees Interest received Borrowing costs Net cash used in operating activities 9 Cash flows from investing activities Proceeds from sale of plant and equipment Purchase of plant and equipment Purchase of businesses Net cash provided by (used in) investing activities Cash flows from financing activities Proceeds from share and option issues Proceeds from borrowings Repayment of borrowings Capital raising costs Advances to controlled entities Net cash provided by (used in) financing activities Net increase/ (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 9	Consolidated Consolidated Company Company 2008 2007 2008 2007 $ $ $ $ 6,854,669 5,345,542 - 122,961 (8,244,463) (6,762,069) (420,674) (829,464) 1,636 1,168 1,552 1,257 (20,997) (26,968) (12,646) (6,219)
	(1,409,155) (1,442,327) (431,768) (711,465)
	- 219,570 - - (66,491) (18,359) (46,092) (18,359) - (139,000) - (139,000)
	(66,491) 62,211 (46,092) (157,359)
	1,620,000 1,780,605 1,620,000 1,780,605 404,218 227,747 - 227,747 (547,183) (470,714) (75,417) (207,572) (90,750) (72,000) (90,750) (72,000) - - (1,049,566) (714,394)
	1,386,285 1,465,638 404,267 1,014,386
	(89,361) 85,522 (73,593) 145,562 211,064 125,542 171,188 25,626
	121,703 211,064 97,595 171,188

The accompanying notes form part of these financial statements.

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

1. CORPORATE INFORMATION

The financial report of The Swish Group Limited and controlled entities for the year ended 30 June 2008 was authorised for issues in accordance with a resolution of the directors on 22 September 2008.

The Swish Group Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Stock Exchange.

The consolidated entity’s principal activities in the course of the financial year were in the area of digital media, including digital signage/location television, hotel digital video on demand and high speed internet access, film and television production and post production, advertising sales and equipment supply.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards , other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The financial report covers The Swish Group Limited as an individual parent entity and The Swish Group Limited and controlled entities as a consolidated entity. The Swish Group Limited is a listed public company, limited by shares, incorporated and domiciled in Australia.

The financial report has been prepared in accordance with the historical cost convention and, except where stated, does not take into account changing money values or current valuations of non-current assets. Cost is based on the fair values of the consideration given in exchange for assets. The financial report is presented in Australian dollars.

The following is a summary of material accounting policies adopted by the consolidated entity in the preparation and presentation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

(b) Statement of compliance

The financial report The Swish Group Limited and controlled entities and The Swish Group Limited as an individual parent entity comply with Australian Accounting Standards as issued by the Australian Accounting Standards Board and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

New accounting standards and interpretations:

Reference	Title	Summary	Application date of standard*	Impact on Group financial report	Application date for *Group **
AASB Int. 4 (Revised)	Determining whether an Arrangement contains a Lease	The revised Interpretation specifically scopes out arrangements that fall within the scope of AASB Interpretation 12.	1 January 2008	Refer to AASB Int. 12 and AASB 2007-2 above.	AASB Int. 4 (Revised)
AASB 8 and AASB 2007- 3	Operating Segments and consequential amendments to other Australian Accounting Standards	New standard replacing AASB 114_Segment_ Reporting, which adopts a management reporting approach to segment reporting.	1 January 2009	AASB 8 is a disclosure standard so will have no direct impact on the amounts included in the Group's financial statements, although it may indirectly impact the level at which goodwill is tested for impairment. In addition, the amendments may have an impact on the Group’s segment disclosures.	1 July 2009

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

2. SUMMARY OF ACCOUNTING POLICIES (Continued)

Reference	Title	Summary	Application date of standard*	Impact on Group financial report	Application date for *Group **
AASB 123 (Revised) and AASB 2007-6	Borrowing Costs and consequential amendments to other Australian Accounting Standards	The amendments to AASB 123 require that all borrowing costs associated with a qualifying asset be capitalised.	1 January 2009	These amendments to AASB 123 require that all borrowing costs associated with a qualifying asset be capitalised. The Group has no borrowing costs associated with qualifying assets and as such the amendments are not expected to have any impact on the Group's financial report.	1 July 2009
AASB 101 (Revised) and AASB 2007-8	Presentation of Financial Statements and consequential amendments to other Australian Accounting Standards	Introduces a statement of comprehensive income. Other revisions include impacts on the presentation of items in the statement of changes in equity, new presentation requirements for restatements or reclassifications of items in the financial statements, changes in the presentation requirements for dividends and changes to the titles of the financial statements.	1 January 2009	These amendments are only expected to affect the presentation of the Group’s financial report and will not have a direct impact on the measurement and recognition of amounts disclosed in the financial report. The Group has not determined at this stage whether to present a single statement of comprehensive income or two separate statements.	1 July 2009
AASB 2008-1	Amendments to Australian Accounting Standard – Share-based Payments: Vesting Conditions and Cancellations	The amendments clarify the definition of 'vesting conditions', introducing the term 'non-vesting conditions' for conditions other than vesting conditions as specifically defined and prescribe the accounting treatment of an award that is effectively cancelled because a non-vesting condition is not satisfied.	1 January 2009	The Group has share-based payment arrangements that may be affected by these amendments. However, the Group has not yet determined the extent of the impact, if any.	1 July 2009
AASB 3 (Revised)	Business Combinations	The revised standard introduces a number of changes to the accounting for business combinations, the most significant of which allows entities a choice for each business combination entered into – to measure a non-controlling interest (formerly a minority interest) in the acquiree either at its fair value or at its proportionate interest in the acquiree’s net assets. This choice will effectively result in recognising goodwill relating to 100% of the business (applying the fair value option) or recognising goodwill relating to the percentage interest acquired. The changes apply prospectively.	1 July 2009	The Group may enter into some business combinations during the next financial year and may therefore consider early adopting the revised standard. The Group has not yet assessed the impact of early adoption, including which accounting policy to adopt.	1 July 2009

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

2. SUMMARY OF ACCOUNTING POLICIES (Continued)

Reference	Title	Summary	Application date of standard*	Impact on Group financial report	Application date for *Group **
AASB 127 (Revised)	Consolidated and Separate Financial Statements	Under the revised standard, a change in the ownership interest of a subsidiary (that does not result in loss of control) will be accounted for as an equity transaction.	1 July 2009	If the Group changes its ownership interest in existing subsidiaries in the future, the change will be accounted for as an equity transaction. This will have no impact on goodwill, nor will it give rise to a gain or a loss in the Group’s income statement.	1 July 2009
AASB 2008-3	Amendments to Australian Accounting Standards arising from AASB 3 and AASB 127	Amending standard issued as a consequence of revisions to AASB 3 and AASB 127.	1 July 2009	Refer to AASB 3 (Revised) and AASB 127 (Revised) above.	1 July 2009
Amendments to International Financial Reporting Standards	Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate	The main amendments of relevance to Australian entities are those made to IAS 27 deleting the ‘cost method’ and requiring all dividends from a subsidiary, jointly controlled entity or associate to be recognised in profit or loss in an entity's separate financial statements (i.e., parent company accounts). The distinction between pre- and post- acquisition profits is no longer required. However, the payment of such dividends requires the entity to consider whether there is an indicator of impairment. AASB 127 has also been amended to effectively allow the cost of an investment in a subsidiary, in limited reorganisations, to be based on the previous carrying amount of the subsidiary (that is, share of equity) rather than its fair value.	1 January 2009	Recognising all dividends received from subsidiaries, jointly controlled entities and associates as income will likely give rise to greater income being recognised by the parent entity after adoption of these amendments. In addition, if the Group enters into any group reorganisation establishing new parent entities, an assessment will need to be made to determine if the reorganisation meets the conditions imposed to be effectively accounted for on a ‘carry-over basis’ rather than at fair value.	1 July 2009
Amendments to International Financial Reporting Standards	Improvements to IFRSs	The improvements project is an annual project that provides a mechanism for making non-urgent, but necessary, amendments to IFRSs. The IASB has separated the amendments into two parts: Part 1 deals with changes the IASB identified resulting in accounting changes; Part II deals with either terminology or editorial amendments that the IASB believes will have minimal impact.	1 January 2009 except for amendments to IFRS 5, which are effective from 1 July 2009.	The Group has not yet determined the extent of the impact of the amendments, if any.	1 July 2009

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

2. SUMMARY OF ACCOUNTING POLICIES (Continued)

(c) Going concern basis of accounting

The financial statements have been prepared on a going concern basis. The consolidated entity incurred a loss for the year ended 30 June 2008 of $1,765,089 and has a deficiency in net assets as at 30 June 2008 of $53,581. The consolidated entity’s income has been insufficient on its own to service its debt obligations and other running expenses. The operations of the consolidated entity for the year ended 30 June 2008 were funded out of revenues and the proceeds of share issues. Without the continued ability to raise capital, and the ability to utilise its equity credit facilities, there is uncertainty as to whether the consolidated entity will be able to continue as a going concern and it may become necessary for it to realise its assets and extinguish its liabilities other than in the normal course of business and at amounts different from those stated in the financial statements. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the Company not continue as a going concern.

In view of the circumstances outlined above, the Directors are of the opinion that the consolidated entity will have sufficient funding and that it is appropriate to prepare the accounts on a going concern basis.

(d) Principles of consolidation

The consolidated financial statements are those of the consolidated entity, comprising the financial statements of the parent entity and of all entities, which The Swish Group Limited controlled from time to time during the year and at balance date. Details of the controlled entities are contained in note 11.

The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies, which may exist. All intercompany balances and transactions, including any unrealised profits or losses have been eliminated on consolidation. Minority interests in the equity and results of the entities that are controlled are shown separately in the consolidated financial report. Where a minority interest is in a loss position, 100% share of the loss is reflected by the consolidated entity.

A controlled entity is any entity controlled by The Swish Group Limited. Control exists where The Swish Group Limited has the capacity to dominate the decision-making in relation to the financial and operational policies of another entity so that the other entity operates with The Swish Group Limited to achieve the objectives of The Swish Group Limited.

(e) Revenue recognition

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Revenue from the provision of services to customers is recognised upon delivery of the service to the customer.

Government grants received that relate to specific assets or expenses are deferred and recognised as income in the same period as the asset is consumed or when the associated expenses are incurred. Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

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

(f) Cash and cash equivalents

Cash and cash equivalents include cash on hand and at banks, short-tem deposits with an original maturity of three months or less held at call with financial institutions and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

2. SUMMARY OF ACCOUNTING POLICIES (Continued)

(g) Property, plant and equipment

Cost

Property, plant and equipment is stated at cost less depreciation and any accumulated impairment losses.

The carrying amount of plant and equipment is reviewed for impairment annually by the Directors for events or changes in circumstances that indicate the carrying value may not be recoverable. If any such indication exists and where the carrying value exceeds the estimated recoverable amount, the assets are written down to their recoverable amount.

Depreciation

The depreciable amounts of fixed assets are depreciated on a straight-line basis or diminishing balance basis as appropriate over their estimated useful lives commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

The useful lives for each class of assets are:

	2008	2007
Plant and equipment:	2 to 10 years	2 to 10 years
Leasehold improvements:	2 to 10 years	2 to 10 years

(h) Leases

Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and benefits incidental to ownership.

Finance Leases

Leases of fixed assets, where substantially all of the risks and benefits incidental to ownership of the asset, but not the legal ownership, are transferred to entities within the consolidated entity are classified as finance leases. Finance leases are capitalised, recording at the inception of the lease an asset and liability equal to the present value of the minimum lease payments, and disclosed as plant and equipment under lease. Leased assets are depreciated over the shorter of the estimated useful life of the assets and the lease term.

Lease payments are allocated between interest expense and reduction of the lease liability. The interest expense is calculated using the interest rate implicit in the lease and is included in finance costs in the Income Statement.

The cost of improvements to or on leasehold property is capitalised, disclosed as leasehold improvements, and amortised over the unexpired period of the lease or the estimated useful lives of the improvements, whichever is the shorter.

Operating Leases

Lease payments for operating leases, where substantially all of the risks and benefits remain with the lessor, are charged as expenses in the period in which they are incurred.

(i) Intangibles

Goodwill

Goodwill on consolidation represents the excess of the cost of an acquisition over the fair value of the Group’s share of net identifiable assets of the acquired entities at the date of acquisition.

Goodwill is not amortised but is tested annually for impairment, or more frequently if events or changes in circumstances indicate that it might be impaired. Goodwill is carried at cost less accumulated impairment losses.

(j) Impairment of assets

Assets with an indefinite useful life are not amortised but are tested annually for impairment in accordance with AASB 136. Assets subject to annual depreciation or amortisation are reviewed for impairment whenever events or circumstances arise that indicate that the carrying amount of the asset may be impaired. An impairment loss is recognised where the carrying amount of the asset exceeds its recoverable amount. The recoverable amount of an asset is defined as the higher of its fair value less costs to sell and value in use.

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

2. SUMMARY OF ACCOUNTING POLICIES (Continued)

(k) Taxes

Current income tax expense is the tax payable on the current period’s taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities.

A balance sheet approach is adopted under which deferred tax assets and liabilities are recognised for temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred tax asset or liability is recognised in relation to temporary differences arising from the initial recognition of an asset or a liability if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.

Deferred tax assets are recognised for temporary differences and unused tax losses only when it is probable that future taxable amounts will be available to utilise those temporary differences and losses

Current and deferred tax balances attributable to amounts recognized directly in equity are also recognised directly in equity.

(l) Employee benefits

Liabilities arising in respect of wages and salaries, annual leave and any other employee benefits expected to be settled within twelve months of the reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled. All other employee benefit liabilities are measured at the present value of the estimated future cash outflow to be made in respect of services provided by employees up to the reporting date.

Share-based payments

The group operates an employee share option plan.

The total amount to be expensed over the vesting period is determined by reference to the fair value of the options at grant date. The fair value of options at grant date is determined using a Black-Scholes option pricing model, and is recognised as an employee expense over the period during which the employees become entitled to the option.

(m) Financial instruments

Classification

The group classifies its financial instruments in the following categories: loans and receivables and financial liabilities. The classification of investments depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition.

Loans and Receivables

Loan and receivables are measured at fair value at inception and subsequently at amortised cost using the effective interest rate method.

Financial Liabilities

Financial liabilities include trade payables, other creditors and loans from third parties including inter-company balances and loans from or other amounts due to director-related entities.

Non-derivative financial liabilities are recognised fair value and carried at amortised cost, comprising original debt less principal payments and amortisation.

(n) Foreign Currencies

Functional and Presentation Currency

The financial statements of each group entity are measured using its functional currency, which is the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars, as this is the parent entity’s functional and presentation currency.

Transactions and Balances

Transactions in foreign currencies of entities within the consolidated entity are translated into functional currency at the rate of exchange ruling at the date of the transaction.

Foreign currency monetary items that are outstanding at the reporting date (other than monetary items arising under foreign currency contracts where the exchange rate for that monetary item is fixed in the contract) are translated using the spot rate at the end of the financial year.

Resulting exchange differences arising on settlement or re-statement are recognised as revenues and expenses for the financial year.

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

2. SUMMARY OF ACCOUNTING POLICIES (Continued)

Group Companies

The financial statements of foreign operations whose functional currency is different from the group’s presentation currency are translated as follows:

Assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
Income and expenses are translated at average exchange rates for the period; and
All resulting exchange differences are recognised as a separate component of equity.

Exchange differences arising on translation of foreign operations are transferred directly to the group’s foreign currency translation reserve as a separate component of equity in the balance sheet.

(o) Share based payments for the acquisition of a business

The company has acquired businesses during the year paying cash and issuing shares. Shares are issued at fair value at the time of the acquisition.

(p) Adoption of new accounting standard

The Group has adopted AASB 7 Financial Instruments: Disclosures and all consequential amendments which became applicable on 1 January 2007. The adoption of this standard has only affected the disclosure in these financial statements. There has been no effect on profit and loss or the financial position of the entity.

(q) Comparatives

Where necessary, comparative information has been reclassified and repositioned for consistency with current year disclosures.

(r ) Convertible notes

The component of convertible notes that exhibits characteristics of a liability is recognised as a liability in the balance sheet, net of transaction costs.

On issuance of the convertible note, the fair value of the liability component is determined using a market rate for an equivalent convertible bond and this amount is carried as a liability on an amortised cost basis until extinguished on conversion or redemption. The increase in the liability due to the passage of time is recognised as a finance cost.

The remainder of the proceeds is allocated to the conversion option that is recognised and included in shareholder’s equity, net of transaction costs. The carrying amount of the conversion option is not remeasured in subsequent years.

Interest on the liability component of the instrument is recognised as an expense in profit and loss.

Transaction costs are apportioned between the liability and equity components of the convertible note based on the allocation of proceeds to the liability and equity component when the instruments are first recognised.

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s principal financial instruments comprise cash, receivables, payables, borrowings, finance leases and hire purchase agreements and convertible notes.

The Group manages its exposure to key financial risks, including interest rate risk in accordance with the Group’s financial risk management policy. The objective of the policy is to support the delivery of the Group’s financial targets whilst protecting future financial security.

The main risks arising from the Group’s financial instruments are interest rate risk, credit risk and liquidity risk. The Group uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to interest rate risk and assessments of market forecasts for interest rates. Ageing analyses and monitoring of specific credit allowances are undertaken to manage credit risk. Liquidity risk is monitored through the development of future rolling cash flow forecasts.

The Board reviews and agrees policies for managing each of these risks as summarised below.

Primary responsibility for identification and control of financial risks rests with the Board. The Board reviews and agrees policies for managing each of the risks identified below, including the setting of limits for interest rate risk, credit allowances and future cash flow forecast projections.

Risk exposures and responses

Interest rate risk

The Group’s exposure to market interest rates relates primarily to the Group’s debt facilities. The level of debt is disclosed in note 15.

At balance date, the Group had the following mix of financial assets and liabilities exposed to Australian both fixed and variable interest rate risk:

Financial assets Cash and cash equivalents Financial liabilities Short-term borrowings Net exposure	Consolidated Consolidated Company Company 2008 2007 2008 2007 $ $ $ $ 121,703 211,064 97,595 171,188
	(110,512) (336,277) (99,732) (257,949)
	(110,512) (336,277) (99,732) (257,949)
	11,191 (125,213) (2,137) (86,761)

The Group constantly analyses its interest rate exposure. Within this analysis consideration is given to potential renewals of existing positions, alternative financing and the mix of fixed and variable interest rates.

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)

Risk exposures and responses (Continued)

The interest rate risk of financial assets and liabilities recorded is as follows:

	Average Interest	Rate	Consolidated	Amount
	2008		2008
	Fixed	Variable	Interest	Non-interest
			Bearing	Bearing
Assets
Cash	1.26%	-	121,703	-
Receivables	-	-	-	788,552
Liabilities
Trade payables and accruals	-	-	-	1,903,054
Hire Purchase liability	-		-	-
Short term borrowings	13.11%	--	110,512	-
	Average Interest	Rate	Consolidated	Amount
	2007		2007
	Fixed	Variable	Interest	Non-interest
			Bearing	Bearing
Assets
Cash	0.65%	-	211,064	-
Receivables	-	-	-	208,786
Liabilities
Trade payables and accruals	-	-	-	1,438,468
Hire Purchase liability	8.60%		88,530	-
Short term borrowings	-	--	247,747	-

The following sensitivity analysis is based on the interest rate risk exposures in existence at the balance sheet date:

At 30 June 2008, if interest rates had moved, as illustrated in the table below, with all other variables held constant, post tax loss and equity would have been affected as follows:

	Post Tax Loss		Equity
	Higher/	(Lower)	Higher/	(Lower)
	2008	2007	2008	2007
	$	$	$	$
Consolidated
+1% (100 basis points)	78	(876)	78	(876)
-0.5% (50 basis points)	(39)	438	(39)	438
Parent
+1% (100 basis points)	(15)	(607)	(15)	(607)
-0.5% (50 basis points)	7	304	7	304

The movements in post tax loss and equity are due to higher/lower interest costs from variable rate debt and cash balances. The sensitivity is lower in 2008 than in 2007 because of a reduction in outstanding borrowings that has occurred because of the repayment of Hire Purchase liabilities during the financial year ended 30 June 2008.

Foreign currency risk

The Group’s exposure to foreign currency risk is minimal.

Credit risk

Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents and trade and other receivables. The Group’s exposure to credit risk arises from potential default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments. Exposure at balance date is addressed in each applicable note.

The Group trades only with recognised, creditworthy third parties and as such collateral is not requested nor is it the Group’s policy to securitise its trade and other receivables.

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)

It is the Group’s policy that all customers who wish to trade on credit terms are assessed as to creditworthiness, including an assessment of their independent credit rating, financial position, past experience and industry reputation. Risk limits are set for individual customers.

In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant.

There are no significant concentrations of credit risk within the Group.

Liquidity risk

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank facilities, finance leases and hire purchase agreements, a convertible note facility and equity raisings.

At 30 June 2008, 100% of the Group’s debt will mature in less than one year (2007: 100%).

The table below reflects all contractually fixed pay-offs and receivables for settlement, repayments and interest resulting from recognised financial assets and liabilities. The respective undiscounted cash flows for the respective upcoming fiscal years are presented. Cash flows for financial assets and liabilities without fixed amount or timing are based on the conditions existing at 30 June 2008.

The remaining contractual maturities of the Group’s and parent entity’s financial liabilities are:

6 months or less 6-12 months 1-5 years Over 5 years	Consolidated Consolidated Company Company 2008 2007 2008 2007 $ $ $ $ 110,512 333,045 99,732 257,949 3,232 - - - - - - - - -
	110,512 336,277 99,732 257,949

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)

Risk exposures and responses (Continued)

Maturity analysis of financial assets and liabilities based on management’s expectation

The risk implied from the values shown in the table below, reflects a balanced view of cash inflows and outflows. Leasing obligations, trade payables and other financial obligations mainly originate from the financing of assets used in the Group’s ongoing operations such as property, plant and equipment and investments in working capital, e.g. trade receivables. These assets are considered in the Group’s overall liquidity risk. To monitor existing financial assets and liabilities as well as to enable an effective controlling of future assets, the Group has established risk reporting covering its business units that reflects expectations of management of expected settlement of financial assets and liabilities.

Consolidated Financial assets Cash and cash equivalents Trade and other receivables Consolidated Financial liabilities Trade and other payables Interest bearing loans and borrowings Net maturity Parent Financial assets Cash and cash equivalents Trade and other receivables Parent Financial liabilities Trade and other payables Interest bearing loans and borrowings Net maturity	< 6 months 6-12 months 1-5 Years 5 years Total $ $ $ $ $ 121,703 - - - 121,703 838,552 - - - 838,552
	960,255 - - - 960,255
	1,903,054 - - - 1,903,054 110,512 - - - 110,512
	2,013,566 - - - 2,013,566
	(1,053,311) - - - (1,053,311)
	97,595 - - - 97,595 42,439 - - - 42,439
	140,034 - - - 140,034
	929,921 - - - 929,921 99,732 - - - 99,732
	1,029,653 - - - 1,029,653
	(889,619) - - - (889,619)

At 30 June 2008, the Group had available approximately $4,989,220 of unused credit facilities available for its immediate use. Refer to Note 15 for details of used and unused facilities at 30 June 2008.

Fair value

The methods for estimating fair value are outlined in the relevant notes to the financial statements.

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are based on past performance and management’s expectations for the future.

Critical accounting estimates and assumptions

The group makes certain estimates and assumptions concerning the future, which, by definition, will seldom represent actual results. The estimates and assumptions that have a significant inherent risk in respect of estimates based on future events which could have a material impact on the assets and liabilities in the next financial year are discussed below:

(a) Estimated impairment of goodwill

Goodwill is allocated to cash generating units (CGU’s) according to applicable business operations. The recoverable amount of a CGU is based on value-in-use calculations. These calculations are based on projected cash flows approved by management covering a period not exceeding 5 years. Management’s determination of cash flow projections and gross margins are based on past performance and its expectation for the future. An expected growth rate of 10% for the next 2 – 5 years has been used. The present value of future cash flows has been calculated using a discount rate of 15% to determine value-in-use.

(b) Income taxes

Income tax benefits are based on the assumption that no adverse change will occur in the income tax legislation and the anticipation that the company will derive sufficient future assessable income to enable the benefit to be realised and comply with the deductibility imposed by the law.

5. REVENUE

Revenue from operating activities Revenue from sale of goods Revenue from services Total sales revenue Revenue from non-operating activities Other revenue Bank interest Total other revenue Total revenue	Consolidated Consolidated Company Company 2008 2007 2008 2007 $ $ $ $ - 79,633 - - 7,430,536 4,426,679 - -
	7,430,536 4,506,312 - -
	3,899 50,914 - 112,515 1,636 1,168 1,552 1,257
	5,535 52,082 1,552 113,772
	7,436,071 4,558,394 1,552 113,772

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

6. EXPENSES

Employee costs Wages and salaries Option based payments Workers’ compensation costs Payroll tax Superannuation costs Annual leave provision Total employee costs Administrative expenses Occupancy costs Advertising and marketing expenses Operating lease rentals Communications costs Professional fees Office administration costs Other expenses/(credits) Total administrative expenses Other expenses Bad debts expense Doubtful debts Net foreign exchange differences Provisions against subsidiary entities Other Impairment losses Impairment loss on goodwill Impairment loss on investments Depreciation expense Depreciation of non-current assets: Plant and equipment Leasehold improvements Total depreciation expense Finance costs Interest expense: Other interest Finance charges payable under hire purchase contracts Total finance costs	Consolidated Consolidate d Company Company 2008 2007 2008 2007 $ $ $ $ 2,560,454 1,394,589 340,880 485,075 5,685 51,800 5,685 51,800 9,506 (355) 9,506 276 115,644 53,385 115,644 58,247 104,372 22,826 18,535 22,826 12,804 (2,630) 12,804 4,928
	2,808,465 1,519,615 503,054 623,152
	161,017 115,947 19,412 84,336 33,519 19,395 - - 8,347 19,583 8,242 6,238 148,038 79,333 20,098 32,059 170,898 128,110 100,907 104,574 561,334 339,848 250,563 206,194 (39,242) 36,193 1,447,072 -
	1,043,911 738,409 1,846,294 433,401
	1,000 - - - - 2,953 - - - 36,678 - - - - 1,451,457 1,538,906 (40,242) (3,438) (4,385) 20,450
	(39,242) 36,193 1,447,072 1,559,356
	- 12,500 - - - - - 12,500
	- 12,500 - 12,500
	96,646 162,661 22,357 6,615 4,239 9,980 4,239 7,551
	100,875 172,641 26,596 14,166
	17,251 9,149 8,900 1,737 3,746 17,819 3,746 4,482
	20,997 26,968 12,646 6,219

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

7. INCOME TAX

	Consolidated	Consolidated	Company	Company
	2008	2007	2008	2007
	$	$	$	$
Current and deferred tax expense for the year ended 30 June	2008 were $nil	(2007: $nil)
A reconciliation between tax expense and the product of
accounting loss before income tax multiplied by the Group’s
applicable income tax rate is as follows:
Accounting loss before income tax	(1,765,089)	(1,974,567)	(2,387,034)	(2,535,022)
At the Group’s statutory income tax rate of 30% (2007:
30%)	529,527	592,370	716,110	760,507
Temporary differences and tax losses not brought to
account as deferred tax assets	(529,527)	(592,370)	(716,110)	(760,507)
Income tax benefit reported in the consolidated income
statement	-	-	-	-
Income tax losses
Deferred tax benefits not recognised as assets:	4,922,662	4,393,135	4,043,323	3,318,213

Tax Loss Deferred Tax Asset recognition

Deferred tax assets will only be recognised if:

(a) future assessable income is derived of a nature and of amount sufficient to enable the benefit from the deductions to be realised;

(b) the conditions for deductibility imposed by tax legislation are complied with; and

(c) no changes in tax legislation adversely affect the consolidated entity in realising the benefit. Deferred tax assets not recognised comprise estimated tax losses whose recoupment against future taxable profits is unconfirmed.

Tax consolidation

The Company and its subsidiaries have not as at the date of this report elected to form a tax consolidated group.

8. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing net loss for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share is calculated by dividing the net loss for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.

The following reflects the income and share data used in the calculations of basic and diluted earnings per share:

Basic earnings per share Diluted earnings per share Earnings used in calculating basic and diluted earnings per share Weighted average number of ordinary shares used in calculating basic earnings per share Effect of dilutive securities: Share options Adjusted weighted average number of ordinary shares used in calculating diluted earnings per share	Consolidated 2008 Consolidated 2007 Cents per share Cents per share (0.3) cents (0.5) cents (0.3) cents (0.5) cents ($1,765,089) ($1,974,567) Number of shares 2008 Number of shares 2007 620,884,915 423,557,997 285,319,009 86,962,508
	906,203,923 510,520,505

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

9. CASH AND CASH EQUIVALENTS

Reconciliation of cash Cash Deposits at call Security deposits Closing cash balance	Consolidated Consolidated Company Company 2008 2007 2008 2007 $ $ $ $ 121,703 186,045 97,595 146,169 - 19 - 19 - 25,000 - 25,000
	121,703 211,064 97,595 171,188

Cash includes cash on hand and in banks and investments in money market instruments, net of outstanding bank overdrafts. Cash at bank earns interest at floating rates based on daily bank deposit rates. Deposits at call earn interest at short-term deposit rates.

Security deposits as at 30 June 2007 comprised $25,000 which was held by National Australia Bank Limited to secure a bank guarantee in favour of the landlord to secure the Company’s lease obligations in respect of the Company’s previous offices at 170 Dorcas Street, South Melbourne.

Reconciliation of net loss after tax to net cash flows from operations Net loss after income tax Non-cash items: Depreciation of non-current assets Impairment losses Options issued to employees Bad and doubtful debts Gain on disposal of property, plant and equipment Provisions against subsidiary loans Changes in assets and liabilities: (Increase)/decrease in trade and other receivables Increase/(decrease) in trade and other payables Increase/(decrease) in provisions Net cash used in operating activities Acquisition of Subsidiaries During the period the group acquired a number of subsidiaries. The group did not acquire any assets and liabilities other than goodwill as a result of these acquisitions. Goodwill/investments acquired Less: consideration accrued Less: acquisition through share issue at fair value Cash flow on acquisition net of share issues	Consolidated Consolidated Company Company 2008 2007 2008 2007 $ $ $ $ (1,765,089) (1,974,567) (2,387,034) (2,535,022) 100,875 172,641 26,592 14,166 - 12,500 - 12,500 5,685 51,800 5,685 51,800 1,000 2,953 - - - (40,646) - - - - 1,451,457 1,538,906 (630,766) 669,145 (1,049,566) 104 866,336 (333,523) 1,508,294 184,081 12,804 (2,630) 12,804 22,000
	(1,409,155) (1,442,327) (431,768) (711,465)
	- 638,000 - 638,000 - (403,000) - (403,000) - (96,000) - (96,000)
	- 139,000 - 139,000

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

9. CASH AND CASH EQUIVALENTS (Continued)

Loan facilities At balance date, the following financing facilities had been negotiated and were available: Facilities Hire Purchase facility – National Australia Bank Limited Hire Purchase facility – Capital Finance Australia Limited Equity Line of Credit and Convertible Note Facility – Furneaux Equity Loan facility - National Australia Bank Limited Total Facilities used at reporting date Hire Purchase facility – National Australia Bank Limited Hire Purchase facility – Capital Finance Australia Limited Equity Line of Credit and Convertible Note Facility – Furneaux Equity Loan facility - National Australia Bank Limited Total Facilities unused at reporting date Hire Purchase facility – National Australia Bank Limited Hire Purchase facility – Capital Finance Australia Limited Equity Line of Credit and Convertible Note Facility – Furneaux Equity Loan facility - National Australia Bank Limited Total	Consolidated Consolidated Company Company 2008 2007 2008 2007 $ $ $ $ - 600,000 - - - 160,000 - 160,000 5,000,000 - 5,000,000 250,000 - -
	5,250,000 760,000 5,000,000 160,000
	- 78,328 - - - 10,202 - 10,202 250,000 250,000 10,780 - - -
	260,780 88,530 250,000 10,202
	- 521,672 - - - 149,798 - 149,798 4,750,000 4,750,000 239,220 - - -
	4,989,220 671,470 4,750,000 149,798

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

10. RECEIVABLES (CURRENT)

Trade receivables Provision for doubtful debts Other receivables Amounts receivable from related parties: Provision for related party loan Related party receivables	Consolidated Consolidated Company Company 2008 2007 2008 2007 $ $ $ $ 573,040 174,978 7,386 4,383 (30,192) (30,192) - -
	542,848 144,786 7,386 4,383 245,704 64,000 35,053 29,040 - - 5,158,964 (5,158,964) 4,118,414 (3,707,507) - - - 410,907
	788,552 208,786 42,439 444,330

(a) Terms and conditions

Terms and conditions relating to the above financial instruments

(i) Trade receivables are non-interest bearing and generally on 30-day terms.

(ii) Other receivables are non-interest bearing and have repayment terms between 30 and 90 days. (iii) For terms and conditions relating to related party receivables refer to note 29.

(b) Allowance for impairment loss

Trade receivables are non-interest bearing and are generally on 30 day terms. A provision for impairment loss is recognised when there is objective evidence that an individual trade receivable is impaired. An impairment loss of $Nil (2007: $30,192) has been recognised by the Group and $Nil (2007: $Nil) by the Company in the current year. These amounts have been included in the doubtful debts expense item.

Movements in the provision for impairment loss were as follows:

At 1 July Charge for the year Amounts written off At 30 June	Consolidated Consolidated Company Company 2008 2007 2008 2007 $ $ $ $ 30,192 - - - - 30,192 - - - - - -
	30,192 30,192 - -

At 30 June, the ageing analysis of trade receivables is as follows:

			0-30	31-60	31-60	61-90	61-90	+91	+91
		Total	days	days	days	days	days	Days	days
					CI*	PDNI*	CI*	PDNI*	CI*
2008	Consolidated	573,040	180,577	123,533	-	37,280	-	201,457	30,192
	Parent	7,386	-	3,003	-	-	-	4,383	-
2007	Consolidated	174,978	129,796	9,966	8,100	-	2,548	5,025	19,544
	Parent	4,383	-	-	-	-	-	4,383	-

Past due not impaired (‘PDNI’) Considered impaired (‘CI’)

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

10. RECEIVABLES (CURRENT) (Continued)

(b) Allowance for impairment loss (continued)

Receivables past due but not considered impaired are: Consolidated $288,737 (2007: $144,786); Parent $4,383 (2007: $4,383). Payment terms on these amounts have not been re-negotiated however credit has been stopped until full payment is made. The Company has been in direct contact with the relevant debtors and is satisfied that payment will be received in full.

Other balances within trade and other receivables do not contain impaired assets and are not past due. It is expected that these other balances will be received when due.

(c) Related party receivables

For terms and conditions of related party receivables refer to note 27.

(d) Fair value and credit risk

Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair value.

The maximum exposure to credit risk is the fair value of receivables. Collateral is not held as security, nor is it the Group’s policy to transfer (on-sell) receivables to special purpose entities.

(e) Foreign exchange and interest rate risk

Detail regarding foreign exchange and interest rate risk exposure is disclosed in note 3.

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

11. NON-CURRENT INVESTMENTS

Interests in subsidiaries

nterests in subsidiaries
Name of entity Country of Incorporation Percentage of equity interest held by the consolidated entity Company Company 2008 % 2007 % Swish Digital Signage Pty Ltd Australia 100 100 Swish Interactive Pty Ltd Australia 100 100 Swish Afterpost Pty Ltd Australia 100 100 Swish Amphead Pty Ltd Australia 100 100 Swish Media Pty Ltd Australia 100 100 Swish Transit Pty Ltd Australia 100 100 Swish Films Pty Ltd Australia 100 100 Swish Black Cat Pty Ltd Australia 100 100 Australian Vision Systems Pty Ltd Australia 51 51 Swish TV Pty Ltd Australia 51 51 Swish Torque Communications Pty Ltd Australia 51 51 Swish MG Distribution Pty Ltd Australia 51 51 Swish MG Distribution (NZ) Limited New Zealand 51 51 Swish Communications Pty Ltd Australia 51 51 Swish Digital Spark Pty Ltd Australia 51 51 Swish Group (USA) Inc USA 51 51	Investment Company Company 2008 $ 2007 $ 50,000 50,000 - - - - 220,000 138,000 - - - - - - 85,500 72,500 - - - - 120,000 120,000 380,000 380,000 - - 10,000 - - - - -
	865,500 760,500

nterests in subsidiaries

Name of entity
Country of
Incorporation
Percentage of equity
interest held by the
consolidated entity
Company
Company
2008
%
2007
%
Swish Digital Signage Pty Ltd
Australia
100
100
Swish Interactive Pty Ltd
Australia
100
100
Swish Afterpost Pty Ltd
Australia
100
100
Swish Amphead Pty Ltd
Australia
100
100
Swish Media Pty Ltd
Australia
100
100
Swish Transit Pty Ltd
Australia
100
100
Swish Films Pty Ltd
Australia
100
100
Swish Black Cat Pty Ltd
Australia
100
100
Australian Vision Systems Pty Ltd
Australia
51
51
Swish TV Pty Ltd
Australia
51
51
Swish Torque Communications Pty
Ltd
Australia
51
51
Swish MG Distribution Pty Ltd
Australia
51
51
Swish MG Distribution (NZ) Limited
New Zealand
51
51
Swish Communications Pty Ltd
Australia
51
51
Swish Digital Spark Pty Ltd
Australia
51
51
Swish Group (USA) Inc
USA
51
51

Investment
Company
Company
2008
$
2007
$ 50,000
50,000
-
-
-
-
220,000
138,000
-
-
-
-
-
-
85,500
72,500
-
-
-
-
120,000
120,000
380,000
380,000
-
-
10,000
-
-
-
-
-

865,500
760,500

12. PLANT AND EQUIPMENT

(a) Carrying values Plant and equipment: At cost Accumulated depreciation Total plant and equipment Leasehold improvements: At cost Accumulated depreciation Total leasehold improvements Total written down amount Plant and equipment includes the following amounts held as security: Security for short term borrowings Security for hire purchase commitments	Consolidated Consolidated Company Company 2008 2007 2008 2007 $ $ $ $ 959,337 1,323,516 110,679 67,445 (748,375) (1,079,525) (63,181) (40,807)
	210,962 243,991 47,498 26,638
	29,479 26,597 25,639 22,762 (20,986) (16,749) (17,146) (12,909)
	8,493 9,848 8,493 9,853

	219,455 253,839 55,991 36,491
	- - - - - 185,650 - -
	- 185,650 - -

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

12. PLANT AND EQUIPMENT (Continued)

(b) Reconciliations

Reconciliations of the carrying amounts of each class of plant and equipment at the beginning and end of the current financial year:

Consolidated entity Balance at the beginning of the year Additions Disposals Depreciation expense Balance at the end of the year Parent entity Balance at the beginning of the year Additions Disposals Depreciation expense Balance at the end of the year	Plant and Equipment Leasehold Improvements Total $ $ $ 243,991 9,848 253,839 63,619 2,879 66,497 - - - (96,649) (4,239) (100,888)
	210,960 8,488 219,448
	26,638 9,853 36,491 43,219 2,879 46,098 - - - (22,357) (4,239) (26,597)
	47,500 8,493 55,992

13. INTANGIBLE ASSETS

(a) Carrying values Goodwill: At cost Total	Consolidated Consolidated Company Company 2008 2007 2008 2007 $ $ $ $ 865,500 760,500 - -
	865,500 760,500 - -

(b) Reconciliations

Reconciliations of the carrying amounts for each class of intangible assets at the beginning and end of the current financial year

Consolidated entity Balance at the beginning of the year Additions Impairment Balance at the end of the year	Goodwill Goodwill 2008 2007 $ $ 760,500 259,000 105,000 514,000 - (12,500)
	865,500 760,500

Impairment Testing of Goodwill

Goodwill acquired through business combinations has been allocated to the two individual cash generating units, which are reportable segments (note 28), Digital Media and Film Production, as follows:

The recoverable amount of goodwill acquired through business combinations for both cash generating units has been determined based on a value in use calculation, using cash flow projections for a five year period, based on a financial budget prepared by senior management for Year 1 and financial projections for a further four year period.

The discount rate applied to the cash flow projections was 15% with an expected growth rate of 10% for Years 2-5.

If an impairment indication arises and on an annual basis, the recoverable amount is estimated and an impairment loss is recognised to the extent that the recoverable amount is lower than the carrying amount.

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

14. TRADE AND OTHER PAYABLES (CURRENT)

Trade payables Other payables Related parties	Consolidated Consolidated Company Company 2008 2007 2008 2007 $ $ $ $ 959,562 765,873 148,085 224,021 439,841 522,757 278,185 449,084 503,651 149,838 503,651 149,838
	1,903,054 1,438,468 929,921 822,943

(a) Terms and conditions

Terms and conditions relating to the above financial instruments:

(i) Trade payables are non-interest bearing and are normally settled on 30-day terms.

(ii) Other creditors are non-interest-bearing and are normally payable within 30 and 90 days

(iii) Details of the terms and conditions of related party payables are set out in notes 26 and 27.

(b) Fair value

Due to the short term nature of these payables, their carrying value is assumed to approximate their fair value.

(c) Related party payables

For details of related party payables refer to note 27.

(d) Interest rate, foreign exchange and liquidity risk

Information regarding interest rate, foreign exchange and liquidity risk exposure is set out in note 3.

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

15. INTEREST-BEARING LOANS AND BORROWINGS

Current: Hire Purchase liabilities (see note 20 (b)) Convertible note facility NAB trade finance facility Capitalised borrowing costs Related parties Capital raising proceeds received in advance Related party loan	Consolidated Consolidated Company Company 2008 2007 2008 2007 $ $ $ $ - 88,530 - 10,202
	167,200 - 167,200 - 10,780 - - - (67,468) - (67,468) - - 47,747 - 47,747 - 200,000 - 200,000
	110,512 247,747 99,732 247,747
	- 47,747 - 47,747

(a) Terms and conditions

Terms and conditions relating to the above financial instruments:

(i) Hire Purchase liabilities as at 30 June 2007 were secured by the assets financed being plant and equipment. In addition, the National Australia Bank Limited had a fixed and floating charge over the assets of the Company and its subsidiary entity Swish Afterpost Pty Ltd. Hire Purchase facilities bore interest at rates between 7.95% - 10.7% and were repaid by 26 February 2008.
(ii) On 26 February 2008, the Company entered into facility agreements with Furneaux Equity Limited for a $5,000,000 equity line of credit including a $1,000,000 convertible note facility. Under the terms of the equity line of credit facility agreement the Company has the right to issue up to $5,000,000 shares in the Company in tranches of up to $250,000 each 20 trading days, at a 10% discount to the average share price over the preceding 10 day trading period to the issue. Under the terms of the convertible note facility, $1,000,000 of convertible notes can be issued with repayment required in a 150 day period, payable in cash or shares in the Company. The conversion price is the lower of 80% of the average share price in the 10 days preceding the note issue. Interest on the note is payable at the Bank Bill Swap Rate plus four percentage points. At 30 June 2008, $250,000 had been drawn down under the convertible note facility and $82,800 converted into equity.
(iii) The NAB trade finance facility is the liability of a subsidiary entity, Swish MG Distribution Pty Ltd and is unsecured. The secured loan facility bears interest at a margin of 1.85% over the Australian trade refinance rate at each drawing and is repayable within 30 days of each draw-down.
(iv) Details of the related party loan are contained in note 26.

(b) Fair values

Unless disclosed below, the carrying amount of the Group’s current and non-current borrowings approximate their fair value.

Hire Purchase liabilities Convertible note facility Secured loan facility Capitalised borrowing costs Related parties Capital raising proceeds received in advance	Carrying Amount Fair Value Carrying Amount Fair Value 2008 2008 2007 2007 $ $ $ $ - - 88,530 88,530 167,200 167,200 - - 10,780 10,780 - - (67,468) (67,468) - - - - 47,747 47,747 - - 200,000 200,000
	110,512 110,512 336,277 336,277

(c) Interest rate, foreign exchange and liquidity risk

Details regarding interest rate, foreign exchange and liquidity risk is disclosed in note 3.

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

16. PROVISIONS

Provision for annual leave The number of employees at year end	Consolidated Consolidated Company Company 2008 2007 2008 2007 $ $ $ $ 35,225 22,421 35,225 22,421
	48 20 48 20

17. CONTRIBUTED EQUITY

(a) Issued and paid up capital

Ordinary shares fully paid Issued options Contributed equity	Consolidated Consolidated Company Company 2008 2007 2008 2007 $ $ $ $ 19,834,808 17,766,008 19,834,808 17,766,008 440,605 440,605 440,605 440,605
	20,275,413 18,206,613 20,275,413 18,206,613

Fully paid ordinary shares carry one vote per share and carry the right to dividends.

(b) Movements in shares on issue

Beginning of the financial year Shares issued during the year 1. Issue of shares on 3 August 2006 2. Issue of shares on 16 August 2006 3. Issue of shares on 20 December 2006 4. Issue of shares on 8 May 2007 5. Issue of shares on 6 July 2007 6 Issue of shares on 14 September 2007 7. Issue of shares on 23 November 2007 8. Issue of shares on 5 December 2007 9. Issue of shares on 16 May 2008 Transaction costs relating to share issues As at the end of the financial year	2008 2008 2007 2007 Number of Shares $ Number of Shares $ 471,104,860 17,766,008 358,938,193 16,402,008 - - 33,333,333 400,000 - - 15,833,334 190,000 - - 33,000,000 396,000 - - 30,000,000 450,000 21,000,000 213,000 - - 100,000,000 1,000,000 - - 30,000,000 300,000 - - 44,500,000 445,000 - - 19,500,000 170,800 - - - (60,000) - (72,000)
	686,104,860 19,834,808 471,104,860 17,766,008

Beginning of the financial year
Shares issued during the year
1. Issue of shares on 3 August 2006
2. Issue of shares on 16 August 2006
3. Issue of shares on 20 December 2006
4. Issue of shares on 8 May 2007
5. Issue of shares on 6 July 2007
6 Issue of shares on 14 September 2007
7. Issue of shares on 23 November 2007
8. Issue of shares on 5 December 2007
9. Issue of shares on 16 May 2008
Transaction costs relating to share issues
As at the end of the financial year

2008
2008
2007
2007
Number of
Shares
$
Number of
Shares
$ 471,104,860
17,766,008
358,938,193
16,402,008
-
-
33,333,333
400,000
-
-
15,833,334
190,000
-
-
33,000,000
396,000
-
-
30,000,000
450,000
21,000,000
213,000
-
-
100,000,000
1,000,000
-
-
30,000,000
300,000
-
-
44,500,000
445,000
-
-
19,500,000
170,800
-
-
-
(60,000)
-
(72,000)

686,104,860
19,834,808
471,104,860
17,766,008

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

17. CONTRIBUTED EQUITY (Continued)

(b) Movements in shares on issue (Continued)

On 3 August 2006 the Company completed a placement of 33,333,333 shares to sophisticated investors at 1.2 cents per share raising $400,000 to provide working capital and to finance potential acquisitions.
On 16 August 2006 the Company completed a placement of 15,833,334 shares to sophisticated investors at 1.2 cents per share raising $190,000 to provide working capital and to finance potential acquisitions.
On 20 December 2006 the Company completed a placement of 25,000,000 shares with 25,000,000 attaching options exercisable at to sophisticated investors at 2 cents per share raising $300,000 to provide working capital and to finance potential acquisitions.and issued 8,000,000 shares to vendors at 1.2 cents per share raising $96,000 as purchase consideration for businesses acquired by the Company.
On 8 May 2007 the Company completed a placement of 30,000,000 shares with 15,000,000 attaching options exercisable at to sophisticated investors at 2 cents per share raising $450,000 to provide working capital and to finance potential acquisitions.
On 6 July 2007 the Company completed a placement of 20,000,000 shares to sophisticated investors at 1 cent per share raising $200,000 to provide working capital and to finance potential acquisitions.and issued 1,000,000 shares to vendors at 1.3 cents per share raising $13,000 as purchase consideration for businesses acquired by the Company.
On 14 September 2007 the Company completed a placement of 100,000,000 shares to sophisticated investors at 1 cent per share raising $1,000,000 to provide working capital and to finance potential acquisitions.
On 23 November 2007 the Company issued 30,000,000 shares to vendors at 1 cent per share raising $300,000 as purchase consideration for businesses acquired by the Company.
On 5 December 2007 the Company completed a placement of 20,000,000 shares to Directors at 1 cent per share raising $200,000 and.completed a placement of 22,000,000 shares to sophisticated investors at 1 cent per share raising $220,000 to provide working capital and to finance potential acquisitions and issued 2,500,000 shares to vendors at 1 cent per share raising $25,000 as purchase consideration for businesses acquired by the Company.
On 16 May 2008 the Company completed a placement of 11,500,000 shares on conversion of convertible notes at 0.72 cents per share raising $82,800 to retire debt.and issued 8,000,000 shares to vendors at 1.1 cents per share raising $88,000 as purchase consideration for businesses acquired by the Company.

(c) Terms and conditions of contributed equity

Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company. A total of 500,000 ordinary shares are held in escrow.

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

17. CONTRIBUTED EQUITY (Continued)

(d) Share options

Details of options outstanding and movements in options during the financial year are set out below:

Options outstanding

ptions outstanding
Balance at beginning of year Granted Expired Balance at end of year Exercisable at end of year	2008 2008 2007 2007 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price 278,852,342 $0.04 12,300,000 $0.04 16,100,000 (5,650,000) $0.02 $0.05 270,302,342 (3,750,000) $0.02 $0.05
	289,302,342 $0.04 278,852,342 $0.04
	289,302,342 $0.04 278,852,342 $0.04

Options held at the beginning of the reporting period

Options brought forward at
beginning of financial year
ended 30 June 2007
Employees and contractors
Vendors of Swish Ambient
business
Employees and contractors
Vendors of Swish Black Cat
business
Vendors of Swish Black Cat
business
Employees and contractors
Director Mr Cary Stynes
Director Mr Stephen Layton
Director Mr William Graham
Investors
Pro rata rights issue
Investors
Total

Number of
Options
Grant Date
Vesting Date
Expiry Date
Weighted Average
Exercise Price
100,000
16 Jan 2004
16 Jan 2004
16 Jan 2009
$0.05
4,000,000
18 Aug 2005
18 Aug 2005
18 Aug 2008
$0.025
1,000,000
18 Aug 2005
18 Aug 2005
18 Aug 2008
$0.025
2,000,000
29 Sep 2005
29 Sep 2005
29 Sep 2008
$0.025
500,000
18 Nov 2005
18 Nov 2005
29 Sep 2008
$0.025
950,000
15 Mar 2006
15 Mar 2006
15 Mar 2011
$0.02
6,000,000
29 Nov 2006
1 Dec 2006
30 Nov 2011
$0.02
2,000,000
29 Nov 2006
1 Dec 2006
30 Nov 2011
$0.03
2,000,000
29 Nov 2006
1 Dec 2006
30 Nov 2011
$0.04
25,000,000
20 Dec 2006
20 Dec 2006
31 Jan 2010
$0.02
220,302,342
30 March 2007
30 March 2007
31 Jan 2010
$0.02
15,000,000
8 May 2008
8 May 2008
31 Jan 2010
$0.02
278,852,342
$0.02

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

17. CONTRIBUTED EQUITY (Continued)

(d) Share options (Continued)

Options granted

Options granted during the
financial year ended 30
June 2008
Employees and contractors
Total
Options expiring
Options expiring during the
financial year ended 30
June 2008
Vendors of Swish Ambient
business
Employees and contractors
Employees and contractors
Total

Number of
Options
Grant Date
Vesting Date
Expiry Date
Weighted Average
Exercise Price
16,100,000
23 Nov 2007
23 Nov 2007
23 Nov 2010
$0.02
16,100,100
$0.02
Number of
Options
Grant Date
Vesting Date
Expiry Date
Weighted Average
Exercise Price
4,000,000
18 Aug 2005
18 Aug 2005
18 Aug 2008
$0.025
1,000,000
18 Aug 2005
18 Aug 2005
18 Aug 2008
$0.025
650,000
15 March 2006
15 March 2006
5 Dec 2007
$0.02
5,650,000
$0.025

Options exercised

No options were exercised during the financial year or until the date of this report.

Options held at the end of the reporting period

Options carried forward at
end of financial year ended
30 June 2008
Employees and contractors
Vendors of Swish Black Cat
business
Vendors of Swish Black Cat
business
Employees and contractors
Director Mr Cary Stynes
Director Mr Stephen Layton
Director Mr William Graham
Investors
Pro rata rights issue
Investors
Employees and contractors
Total

Number of
Options
Grant Date
Vesting Date
Expiry Date
Weighted Average
Exercise Price
100,000
16 Jan 2004
16 Jan 2004
16 Jan 2009
$0.05
2,000,000
29 Sep 2005
29 Sep 2005
29 Sep 2008
$0.025
500,000
18 Nov 2005
18 Nov 2005
29 Sep 2008
$0.025
350,000
15 Mar 2006
15 Mar 2006
15 Mar 2011
$0.02
6,000,000
29 Nov 2006
1 Dec 2006
30 Nov 2011
$0.02
2,000,000
29 Nov 2006
1 Dec 2006
30 Nov 2011
$0.03
2,000,000
29 Nov 2006
1 Dec 2006
30 Nov 2011
$0.04
25,000,000
20 Dec 2006
20 Dec 2006
31 Jan 2010
$0.02
220,302,342
30 March 2007
30 March 2007
31 Jan 2010
$0.02
15,000,000
8 May 2007
8 May 2007
31 Jan 2010
$0.02
16,100,000
15 Mar 2008
15 Nov 2008
15 Mar 2011
$0.02
289,352,342
$0.02

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

17. CONTRIBUTED EQUITY (Continued)

(d) Share options (Continued)

Company Share Option Plan

For further details of the Company Share Option Plan, refer note 21.

Fair value of options

The market value of ordinary shares in The Swish Group Limited closed at 1.1 cents per share on 30 June 2008 (1.4 cents per share on 30 June 2007).

The fair value of each option has been estimated at the date of grant using the Binomial option-pricing model with the following weighted average assumptions used:

Dividend yield Expected volatility Risk-free interest rate Expected life of option	2008 Nil 50% 6.430% 3.0 years	2007 Nil 15% 5.500% 5.0 years

All options are vested as at the date of grant.

An expense of $5,685 (2007: $51,800) was recognised in respect of these share based payments.

18. ACCUMULATED LOSSES

Balance at beginning of financial year Net loss for the year Balance at end of financial year 9. RESERVES Foreign currency translation reserve Balance at beginning of financial year Net movement for the year Balance at end of financial year Options granted reserve Balance at beginning of financial year Net movement for the year Balance at end of financial year	Consolidated Consolidated Company Company 2008 2007 2008 2007 $ $ $ $ (18,621,390) (16,646,823) (17,949,217) (15,414,195) (1,765,089) (1,974,567) (2,387,034) (2,535,022)
	(20,386,479) (18,621,390) (20,336,251) (17,949,217)
	Consolidated Consolidated Company Company 2008 2007 2008 2007 $ $ $ $ - (1,465) - - - 1,465 - -
	- - - -
	51,800 - 51,800 - 5,685 51,800 5,685 51,800
	57,485 51,800 57,485 51,800

19. RESERVES

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

20. COMMITMENTS

(a) Operating lease commitments Non-cancellable operating leases contracted for but not capitalised in the financial statements Premises No later than one year Later than one year and not later than five years Plant and equipment No later than one year Later than one year and not later than five years Operating lease payments are recorded as expense payments. Operating leases relate to the rental of the Company’s office premises and equipment primarily involved in the Company’s digital signage business. (b) Hire Purchase commitments No later than one year Later than one year and not later than five years Minimum hire purchase payments Less future finance charges Hire purchase liabilities Included in the financial statements as: Current borrowings (note 15) Refer note 15 for further details of HP liabilities.	Consolidated Consolidated Company Company 2008 2007 2008 2007 $ $ $ $ 118,570 96,800 70,400 96,800 170,135 230,003 170,135 230,003
	288,705 326,803 240,535 326,803
	- 4,777 - 3,639 - - - -
	- 4,777 - 3,639
	- 90,378 - 10,339 - - - -
	- 90,378 - 10,339 - (1,848) - (137)
	- 88,530 - 10,202
	- 88,530 - 10,202
	- 88,530 - 10,202

(c) Deferred consideration

Several of the Company’s subsidiary entities have been acquired under agreements which provide for deferred consideration to be paid by the Company, mostly in the form of shares, part of which is dependent on the future financial performance of those subsidiaries. The Company has made provision for such deferred consideration to the extent that the amount of such deferred consideration can be quantified at the date of this report.

21. EMPLOYEE ENTITLEMENTS

(a) Share options

Under the Swish Group’s Company Share Option Plan for Directors, employees and contractors of the Company under which the Board can issue options at no cash consideration to purchase fully paid ordinary shares in the Company on the basis of one option for one share at an exercise price to be determined by the Board at the time the options are issued. Options will be exercisable from the time of issue and will lapse on the fifth anniversary of the date of grant if they have not been exercised before that time. Options can be issued up to a maximum of 10% of the issued share capital of the Company. The options cannot be transferred and will not be quoted on the ASX. Eligible persons under the Company Share Option Plan are Directors, employees and contractors of the Company. If the Directorship, employment or contract of the participant terminates, the participant may, within 28 days after the date of termination, exercise all or part of those of the participant’s options, which the participant is then entitled to exercise. Any option not exercised within that 28 day period will lapse. For details of options outstanding and movements in options during the financial year, refer note 17.

(b) Superannuation commitments

The consolidated entity contributes 9% of employees’ wages and salaries to superannuation plans which provide various benefits on retirement, disability or death. Such contributions at the rate of 9% are legally enforceable in Australia.

(c) Employee entitlements

Details of the provision for accrued annual leave are set out in note 16.

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

22. BUSINESS COMBINATIONS

The Company acquired control over the following entitiy during the year ended 30 June 2008:

Date		Subsidiary entity	%	Description	Consideration	Goodwill
February	2008	Swish Digital Spark Pty Ltd	51%	Digital signage advertising	Nil	Nil

In February 2008 the Company formed a 51% owned subsidiary Swish Digital Spark Pty Ltd to provide digital signage advertising in pharmacies. No consideration was paid on acquisition of this business and no deferred consideration is payable.

In addition, during the financial year ended 30 June 2008 the Company paid $105,000 in cash and shares to vendors of previously acquired businesses ($13,000 for Swish Black Cat Pty Ltd, $82,000 for Swish Amphead Pty Ltd and $10,000 for Swish Communications Pty Ltd).

The Company acquired control over the following entities during the year ended 30 June 2007:

Date	Subsidiary entity	%	Description	Consideration	Goodwill
July 2006	Swish Torque	51%	Communications reseller	$120,000	$120,000
	Communications Pty Ltd
April 2007	Swish MG Distribution Pty	51%	Distributor of Indian feature films	$380,000	$380,000
	Ltd
May 2007	Swish Communications Pty	51%	Brand management services	$Nil	$Nil
	Ltd

In July 2006 the Company formed a 51% owned subsidiary Swish Torque Communications Pty Ltd to acquire the business of Torque Communications Pty Ltd a reseller of fixed and mobile telephone plans. The purchase agreement provided for initial consideration of $60,000 cash and $60,000 in shares (5,000,000 shares at 1.2 cents per share) and deferred consideration dependent on the financial performance of the business.

In April 2007 the Company formed a 51% owned subsidiary Swish MG Distribution Pty Ltd to acquire the business of MG Distribution Management Pty Ltd and MG Distribution NZ Limited distributors of Indian feature films in Australia and New Zealand. The purchase agreement provided for a consideration of $479,192 payable in instalments in cash and shares, the final instalment of $99,192 deferred consideration being dependent on the financial performance of the business.

In May 2007 the Company formed a 51% owned subsidiary Swish Communications Pty Ltd to acquire the business of Resonate Pty Ltd a brand management services business. The purchase agreement provided for initial consideration of $10,000 in shares (see above) (1,000,000 shares at 1 cent per share) and deferred consideration dependent on the financial performance of the business.

The Company did not acquire any assets or liabilities other than goodwill as a result of these acquisitions.

Operating details of entities over which control has been gained or lost during the period:

Gain of control of entities

Contribution to consolidated loss from ordinary activities after income tax by the controlled entities since the dates in the current period on which control was acquired.

Swish Digital Spark Pty Ltd

($17,405)

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

22. BUSINESS COMBINATIONS (Continued)

Loss of control of entities

The Company did not lose control of any entities during the year ended 30 June 2008.

During the year ended 30 June 2007 the Company lost control of its owned subsidiary entities Swish Ambient Pty Ltd (100%) and Swish Ambient New Zealand Limited (51%). Loss of control ceased as it was not considered commercially viable to continue these business relationships.

Names of entities

Swish Ambient Pty Ltd

Swish Ambient New Zealand Limited

Dates of loss of control

Control over Swish Ambient was lost in October 2006

Control over Swish Ambient New Zealand was lost in July 2006

Contribution to consolidated loss from ordinary activities after income tax by the controlled entities to the date in the current period when control was lost.

Swish Ambient Pty Ltd contributed ($2,099)

Swish Ambient New Zealand Limited contributed $Nil

Profit/(loss) from ordinary activities after tax of the controlled entities for the whole of the previous corresponding period

Swish Ambient Pty Ltd contributed ($17,942)

Swish Ambient New Zealand Limited contributed $19,740

23. CONTINGENT LIABILITIES

A company known as Mr Rentals Australia Pty Ltd has issued proceedings against the Company for a sum of $168,896 in respect of alleged unpaid rental of equipment. The Company has lodged a defence and counterclaim in respect of the same matter alleging the failure of the equipment and failure to service and monitor that equipment and consequential loss. The Company’s claim is for a sum exceeding $1,000,000. At the date of this report the likely financial impact of these proceedings cannot be determined.

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

24. AFTER BALANCE DATE EVENTS

The following are significant matters which have arisen post 30 June 2008 that may affect the consolidated entity in financial years subsequent to 30 June 2008:

On 7 July 2008 the Company completed a placement of 11,574,028 shares on conversion of convertible notes at 0.72 cents per share raising $83,333 to retire debt.

On 2 September 2008 the Company completed a placement of 64,583,250 shares to sophisticated investors and directors at 0.8 cents per share raising $516,666 to provide working capital, retire debt, and as consideration for businesses acquired by the Company and a placement of 13,020,937 shares on conversion of convertible notes at 0.64 cents per share raising $83,334 to retire debt.

On 8 September 2008 the Company acquired an internet television business swishtv.com.au which will be incorporated into the Company’s existing digital media businesses.

The financial effects of the above transactions have not been brought to account at 30 June 2008.

25. AUDITORS REMUNERATION

Amounts received or due and receivable by Ernst & Young (2007: Pitcher Partners) for: An audit or review of the financial report of the entity and any other entity in the consolidated entity Other services	Consolidated Consolidated Company Company 2008 2007 2008 2007 $ $ $ $ 50,000 45,826 50,000 45,826 - - - -
	50,000 45,826 50,000 45,826

26. DIRECTORS’ AND EXECUTIVES’ COMPENSATION

(a) Details of Key Management Personnel

(i) Directors

Mr. Cary Stynes Managing Director Mr. Stephen Layton Non-Executive Director Mr. William Graham Non-Executive Director

(i) Executives

Mr. Peter Crafter Company Secretary Mr. Gary Mackenzie Digital Music and Telecommunications Services CEO Mr. Marcus Georgiades Production and Distribution CEO Mr. Craig Harris Brand Management Services CEO

There were no changes after the reporting date and the date the financial report was authorised for issue.

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

26. DIRECTORS’ AND EXECUTIVES’ COMPENSATION (Continued)

(b) Remuneration options: granted and vested during the year

A total of 10,000,000 options were granted as part of Directors’ remuneration during the year ended 30 June 2007. No options were granted as part of Directors’ remuneration during the year ended 30 June 2008

(c) Shares issued on exercise of remuneration options

No shares were issued in the financial year ended 30 June 2008 as a result of the exercise of remuneration options (2007: Nil).

(d) Option holdings of Directors

Note Director Mr. Cary Stynes 1, 3 Mr. Stephen Layton 2, 3 Mr. William Graham 2 Total	Balance at 1 July 2007 No. Issued during year No. Purchased during year No. Exercised during year No. Balance at 30 June 2008 No. 41,485,000 - - - 41,485,000 39,760,000 - - - 39,760,000 2,000,000 - - - 2,000,000
	83,245,000 - - - 83,245,000

Notes

Mr. Stynes was issued with a total of 6,000,000 options following shareholder approval at the Company’s AGM on 29 November 2006, of which 2,000,000 Options are exercisable at 2 cents per share vesting on 1 December 2006, and expiring on 30 November 2011, 2,000,000 Options exercisable at 3 cents per Share vesting on 1 December 2006, and expiring on 30 November 2011 and 2,000,000 Options exercisable at 4 cents per Share vesting on 1 December 2006, and expiring on 30 November 2011.
Each of Mr. Layton and Mr. Graham were issued with 2,000,000 options following shareholder approval at the Company’s AGM on 29 November 2006. The options vested on 1 December 2006, expire on 30 November 2011 and have an exercise price of 2 cents per share.
Mr. Stynes and Mr. Layton participated in a non-renounceable rights issue of options which was completed on 30 March 2007. The entitlement offer was made on the basis of 1 option for every 2 ordinary shares held as at the entitlement date. The options, which are listed on ASX, were issued at a subscription price of 0.2 cents per option and are exercisable at a price of 2 cents per share. The options have an expiry date of 31 January 2010

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

26. DIRECTORS’ AND EXECUTIVES’ COMPENSATION (Continued)

(e) Shareholdings of Directors

Note Director Mr. Cary Stynes 1, 2 Mr. Stephen Layton 3, 4 Mr. William Graham Total	Balance at 1 July 2007 No. Purchased during year No. Placement during year No. Sold during year No. Balance at 30 June 2008 No. 70,970,000 2,690,089 10,000,000 - 83,660,089 75,520,000 5,000,000 10,000,000 - 90,520,000 27,346,840 - - - 27,346,840
	173,836,840 7,690,089 20,000,000 - 201,526,929

Notes

Includes shares held by Media Entertainment Pty Ltd in which the director holds a 47.5% interest.
Mr. Stynes holds shares both individually and in a director related entity.
Includes shares held by Media Entertainment Pty Ltd in which the director holds a 47.5% interest.
Mr Layton holds shares both individually and in a director related entity.

(f) Shareholdings of Executives

Mr. Peter Crafter Mr. Gary Mackenzie Mr. Marcus Georgiades Mr. Craig Harris Total	Balance at 1 July 2007 No. Purchased during year No. Issued during year No. Sold during year No. Balance at 30 June 2008 No. - - - - - 8,000,000 - 18,000,000 8,000,000 18,000,000 - 160,000 22,500,000 12,142,000 10,518,000 - - 1,000,000 - 1,000,000
	8,000,000 160,000 41,500,000 20,142,000 29,518,000

(g) Total Remuneration of Key Management Personnel

Total remuneration of key management personnel is shown as follows:

2008 2007	Primary Emoluments Post Employment Equity Base Salary $ Superannuation Contributions $ Number of Options Granted No. Value of Options Granted $ Total $
	$831,992 $3,600 6,000,000 $2,118 $837,710
	$483,765 $27,801 - $29,800 $541,366

(h) Loans to Directors

There were no loans made to Directors during the financial year and none are outstanding as at the date of this report.

(i) Other transactions and balances with Directors

Loans with Director-related entities

In June 2006 Mr. William Graham made an unsecured, interest-free advance of $20,000 to the Company. The advance is repayable on demand. In March 2007, Mr. Graham participated in the non-renounceable rights issue of options to all shareholders, subscribing $27,747 for his entitlement. Due to an administrative error, no options were in fact issued to Mr. Graham and the amount subscribed has been treated in the financial statements as an unsecured, interest-free advance from Mr. Graham. The balance of the loan from Mr. Graham to the Company of $47,747 was repaid during the financial year ended 30 June 2008.

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

26. DIRECTORS’ AND EXECUTIVES’ COMPENSATION (Continued)

Payables to Director-related entities

Related party payables Loan from Director Accrued salary payable to Directors Accrued fees payable to Non Executive Directors Total related party payables	Consolidated Consolidated Company Company 2008 2007 2008 2007 $ $ $ $ 248,968 - 248,968 - 182,683 116,545 182,683 116,545 72,000 33,293 72,000 33,293
	503,651 149,838 503,651 149,838

Related party payables

During the financial year ended 30 June 2008, Mr. Cary Stynes made advances of $248,968 to the Company. The loan is interest-free, unsecured and repayable on demand.

Other transactions with Director-related entities

During the financial year ended 30 June 2008, the Company paid Melbourne Capital Limited (a company associated with Director, Mr. Stephen Layton) $60,000 in broking commission on capital raisings conducted by it (2007: $40,000). Melbourne Capital Limited earns broking commission through arranging equity capital raisings for the Company. The Company had a balance due to Melbourne Capital Limited due at 30 June 2008 of $Nil (2007: $22,500). These transactions were made under normal commercial terms and conditions.

During the financial year ended 30 June 2008 there were no other transactions with Director-related entities.

27. RELATED PARTY DISCLOSURES

Ultimate parent

The consolidated financial statements include the financial statements of The Swish Group Limited and its controlled entities. The Swish Group Limited is the ultimate parent company. Details of subsidiary entities are set out in note 11.

Inter-group transactions

Loans

The Swish Group Limited provided interest-free loans to fund the operations of its subsidiary entities during the financial year. Balances due from subsidiary entities to the parent entity amounted to $Nil at 30 June 2008 (2007: $410,907). Balances due to subsidiary entities by the parent entity were nil at 30 June 2008 (2007: nil).

Other transactions

Inter-company sales amounted to $Nil for the year ended 30 June 2008 (2007: $191,215). These sales have been eliminated on consolidation.

Transactions with Directors and Director-related entities

Transactions with Directors and Director-related entities are set out in note 26.

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

27. RELATED PARTY DISCLOSURES (Continued)

Other related party transactions

During the financial year ended 30 June 2008 the following other related party transactions took place:

The Company issued 1,000,000 at 1.3 cents per share (value $13,000) to Mr. Marcus Georgiades as further consideration in respect of the acquisition of the Swish Black Cat business.
The Company issued 13,500,000 at 1 cent per share (value $135,000) and 8,000,000 at 1.1 cents per share (value $88,000) to Mr. Marcus Georgiades as further consideration in respect of the acquisition of the Swish MG Distribution business.
The Company issued 5,000,000 at 1 cent per share (value $50,000) to Mr. Gary Mackenzie as further consideration in respect of the acquisition of the Swish Torque Communications business.
The Company issued 13,000,000 at 1 cent per share (value $130,000) to Mr. Gary Mackenzie as further consideration in respect of the acquisition of the Swish Amphead business.
The Company issued 1,000,000 at 1 cent per share (value $10,000) to Mr. Craig Harris as further consideration in respect of the acquisition of the Swish Communications business.

During the financial year ended 30 June 2007 the following other related party transactions took place:

The Company paid $24,000 cash to associates of Mr. Gary Mackenzie in respect of the acquisition of the Swish Amphead business and issued to Mr. Gary Mackenzie $36,000 of shares in respect of the acquisition of the Swish Amphead business. A further $78,000 was accrued as a balance payable to Mr. Gary Mackenzie in respect of this acquisition.
The Company issued to Mr. Gary Mackenzie $60,000 of shares and accrued a balance of $60,000 due to Mr. Gary Mackenzie in respect of the acquisition of the Swish Torque Communications business.
The Company paid $115,000 and accrued a balance of $265,000 due to Mr. Marcus Georgiades in respect of the acquisition of the Swish MG Distribution business.

THE SWISH GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

28. SEGMENT INFORMATION

The major services from which the economic entity derived revenue during the year were digital media and film production.

The economic entity operates in Australia. Inter-segment pricing is determined on an arms length basis.

Business Segments 2008 External sales Internal sales Total Revenue RESULT Segment operating loss after tax Segment Depreciation Segment other non-cash expenditure ASSETS Segment Assets LIABILITIES Segment liabilities 2007 External sales Internal sales Total Revenue RESULT Segment operating loss after tax Segment Depreciation Segment other non-cash expenditure ASSETS Segment Assets LIABILITIES Segment liabilities	Digital Media Film Production Elimination Consolidated 3,855,971 3,580,100 - 7,436,071 - - - -
	3,855,971 3,580,100 - 7,436,071
	(1,718,365) (46,724) - (1,765,089) (86,871) (14,004) - (100,875) - - - - 1,790,865 164,345 - 1,955,210 4,344,115 1,438,499 (3,733,823) 2,048,791
	Digital Media Film Production Elimination Consolidated
	2,166,249 2,392,145 - 4,558,394 191,215 - (191,215)
	2,357,464 2,392,145 (191,215) 4,558,394
	(3,430,296) (137,658) 1,593,387 (1,974,567) (172,641) - - (172,641) (253,881) - - (253,881) 1,791,430 53,666 (410,907) 1,434,189 5,687,990 254,006 (4,144,830) 1,797,166

Note: Digital Media in the segment information includes digital signage, digital music, film distribution and telecommunications sales and marketing services.

THE SWISH GROUP LIMITED DIRECTORS’ DECLARATION FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

The director declares that in the opinion of the directors, the financial statements and notes of The Swish Group Limited and its controlled entities are in accordance with the Corporations Act 2001:

(a) Comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
(b) Give a true and fair value of the financial position of the Company and of the consolidated entity as at 30 June 2008 and of their performance as represented by the results of their operations, change in equity and their cash flows for the year ended on that date;

In the directors’ opinion there are reasonable grounds to believe that The Swish Group Limited will be able to pay its debts as and when they become due and payable.

This declaration has been made after receiving the declarations required to be made by the chief executive officer and chief financial officer to the directors in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2008.

This declaration is made in accordance with a resolution of the directors.

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Cary P. Stynes Managing Director

Melbourne 22 September 2008

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Independent auditor’s report to the members of The Swish Group Limited

Report on the Financial Report

We have audited the accompanying financial report of The Swish Group Limited, which comprises the balance sheet as at 30 June 2008, and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with the Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 . This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1, the directors also state that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, we consider internal controls relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence

In conducting our audit we have met the independence requirements of the Corporations Act 2001 . We have given to the directors of the company a written Auditor’s Independence Declaration, a copy of which is attached to the directors’ report. In addition to our audit of the financial report, we were engaged to undertake the services disclosed in the notes to the financial statements. The provision of these services has not impaired our independence.

Liability limited by a scheme approved under Professional Standards Legislation

Auditor’s Opinion

In our opinion:

the financial report of The Swish Group Limited is in accordance with the Corporations Act 2001 , including:
i giving a true and fair view of the financial position of The Swish Group Limited and the consolidated entity at 30 June 2008 and of their performance for the year ended on that date; and
ii complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001 .
the financial report also complies with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Uncertainty Regarding Going Concern

Without qualification to the conclusion expressed above, attention is drawn to the following matter. As indicated in Note 1 (c) to the financial statements, the ability of The Swish Group Limited to continue as a going concern is dependent on the Company being able to generate sufficient funds from its operational activities, debt facilities, and equity raisings to fund its ongoing obligations.

Accordingly, without the ability to raise equity or enter into debt arrangements there would be significant uncertainty as to whether the Company would be able to continue as a going concern and therefore whether it would be able to pay its debts as and when they become due and payable, and realise its assets and extinguish its liabilities in the normal course of business, and at the amounts stated in the financial report. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the Company not continue as a going concern.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 10 to 13 of the directors’ report for the year ended 30 June 2008. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s Opinion

In our opinion the Remuneration Report of The Swish Group Limited for the year ended 30 June 2008, complies with section 300A of the Corporations Act 2001.

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Ernst & Young

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Robert J Dalton Partner Melbourne 22 September 2008

THE SWISH GROUP LIMITED ASX ADDITIONAL INFORMATION

Additional information required by the Australian Stock Exchange Limited and not shown elsewhere in this report is as follows. The information is current as at 17 September 2008.

(a) Distribution of Equity Securities

The number of shareholders, by size of holding, in each class of share are:

1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over Holdings less than a marketable parcel	Ordinary Shares Number of Holders Number of Shares 270 161,307 523 1,435,341 137 1,074,427 310 13,201,693 308 759,410,307
	1,548 775,283,075
	1,176 9,946,720

(b) Twenty Largest Holders

The names of the twenty largest holders of quoted shares are:

Name
1
Serec Pty Ltd
2
Media Entertainment Pty Ltd
3
Copulos Superannuation Pty Ltd
4
CPS Holdings Pty Ltd
5
Mrs. Marnie Graham
6
Challand Pty Ltd
7
Mungala Investments Pty Ltd
8
Stebur Investments Pty Ltd
9
Bodie Investments Pty Ltd
10
Mr. John Ernest Lynch
11
Furneaux Management Pty Ltd
12
Aurisch Investments Pty Ltd
13
Mr. Robert Reeves & Mrs. Mary Reeves
14
Yavern Creek Holdings Pty Ltd
15
Nelson River International Pty Ltd
16
MG Distribution Management Pty Ltd
17
Copulos Superannuation Pty Ltd
18
Amphead Entertainment Group Pty Ltd
19
Ms. Mooi Fah Lee
20
Resonate Pty Ltd
Total

Listed Ordinary Shares
Number of
Shares
Percentage of
Ordinary Shares
124,500,000
16.06%
70,520,000
9.10%
33,000,000
4.26%
32,940,089
4.25%
30,145,000
3.89%
24,000,000
3.10%
21,000,000
2.71%
21,000,000
2.71%
20,000,000
2.58%
20,000,000
2.58%
18,270,937
2.36%
17,204,201
2.22%
14,500,000
1.87%
14,000,000
1.81%
11,375,000
1.47%
10,600,000
1.37%
10,000,000
1.29%
9,000,000
1.16%
8,968,000
1.16%
8,458,250
1.09%
519,481,477
67.01%

Associated with Directors

THE SWISH GROUP LIMITED ASX ADDITIONAL INFORMATION

(c) Substantial Shareholders (greater than 5%)

The names of substantial holders who have notified the Company in accordance with section 671B of the Corporations Act 2001 are:

	Ordinary	Shares
Ordinary Shareholders	Number	Percentage
Mr. Angus Edgar	145,500,000	18.77%
Media Entertainment Pty Ltd*	70,520,000	9.10%

Associated with Directors

(d) Voting Rights

All ordinary shares carry one vote per share without restriction.

(e) Options

The following options are outstanding:

AI assistant

HARRIS TECHNOLOGY GROUP LIMITED — Annual Report 2008

65074_rns_2008-09-21_f2edfbce-4fbf-4fea-9b7e-fcfdea8d0728.pdf

TABLE OF CONTENTS

Dear Shareholder,

DIRECTORS

COMPANY SECRETARY

REGISTERED OFFICE

AUDITORS

BANKERS

SHARE REGISTRY

STOCK EXCHANGE LISTING

STATE OF INCORPORATION

INFORMATION ON DIRECTORS AND COMPANY SECRETARY

Names, qualifications, experience and special responsibilities

THE SWISH GROUP LIMITED DIRECTORS’ REPORT (Continued)

INFORMATION ON DIRECTORS AND COMPANY SECRETARY (Continued)

Company Secretary

Directors’ Meetings

Board Committees

Directors’ Interests in Shares and Options of the Company

Directors’ Interests in Contracts

EARNINGS PER SHARE

DIVIDENDS, PAID, RECOMMENDED AND DECLARED

CORPORATE INFORMATION

Corporate structure

Nature of operations and principal activities

Employees

OPERATING AND FINANCIAL REVIEW

Group overview

Review of operations

Digital Signage

Digital Music

Digital Production

Digital Distribution

OPERATING AND FINANCIAL REVIEW (Continued)

Telecommunications Services

Results

Financial position

Cash flows

Likely developments and expected results

RISK MANAGEMENT

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

AFTER BALANCE DATE EVENTS

ENVIRONMENTAL REGULATION

SHARE OPTIONS

INDEMNIFICATION AND INSURANCE OF DIRECTORS, OFFICERS AND AUDITORS

PROCEEDINGS ON BEHALF OF THE CONSOLIDATED ENTITY

REMUNERATION REPORT (Audited)

Remuneration policy

Remuneration committee

Remuneration structure

Executive Director and senior manager remuneration

Objective

Structure

REMUNERATION REPORT (Audited) (Cont)

Share options

Employment contracts

Non-Executive Director remuneration

Director’s remuneration

THE SWISH GROUP LIMITED DIRECTORS’ REPORT (Continued)

REMUNERATION REPORT (Audited) (Cont)

Executives

Options

THE SWISH GROUP LIMITED DIRECTORS’ REPORT (Continued)

Fair value of options

TAX CONSOLIDATION

AUDITOR’S INDEPENDENCE DECLARATION

NON-AUDIT SERVICES

Auditor’s Independence Declaration to the Directors of The Swish Group Limited

Board Functions

Structure of the Board

THE SWISH GROUP LIMITED CORPORATE GOVERNANCE STATEMENT (Continued)

Performance

Ethics

Trading Policy

Audit Committee

Disclosure

Shareholder Communication

Risk

HARRIS TECHNOLOGY GROUP LIMITED Annual Report 2008