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2009 aNNUaL rEPOrt

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Ready foR GRowth Clarius Annual Report 2009– Ready for Growth 1

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Dear Shareholders

In 2009 Clarius celebrated its 25th year as a business and corporate entity. 2009 is also the Clarius Group’s twelfth year as a listed company on the Australian Securities Exchange. Geoff Moles, founder of the business, was Managing Director for the initial 17 years before assuming the position of Chairman of the Board eight years ago. Subsequent to the departure of Diana Eilert as CEO in November 2008, Geoff was appointed CEO and it was at this time the full impact of the Global Financial Crisis became apparent.

We are indeed fortunate that Geoff offered to reassume the role of CEO during a very critical and volatile time for Clarius and the economy in general. Geoff’s vast recruitment, operational experience and business acumen enabled the business to be stabilised, costs reduced and refocussed on basic business strategies. Recruitment is a people business and our major assets are our clients, staff and management team. To this end Geoff has focused our people on the job ahead to maintain and improve client relationships and sustainable profitability.

We are fortunate the company is in a strong position during this cycle which has enabled Clarius to remain profitable, albeit at a lower level (before the impairment write down) and cash flow positive for the financial year ending June 30 2009.

Upon the appointment of Geoff Moles to the position of Managing Director, the Board considered that the roles of Chairman and Managing Director should be split to maintain governance best practice. As a result of this decision, I was appointed in June 2009 as non executive Chairman of the Board. I am delighted to take on this new role in a challenging environment and am confident that with the restructured management team and a refocus on the basics, Clarius is in a strong position to benefit from an improvement in the economy. I would like to commend the counsel, diligence and commitment of my fellow non-executive directors during a very difficult period and thank them for their support.

I encourage you to read the annual report, in particular the Managing Director’s report to shareholders.

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Lawrence Gibbs Chairman

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Clarius Annual Report 2009– Ready for Growth

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----- Start of picture text -----

Beijing
Shanghai
Hong Kong
Kuala Lumpur
Singapore
Brisbane
Perth
Auckland
Sydney
Adelaide Canberra
Wellington
Clarius Group is represented Melbourne
throughout the Asia Pacific region
by a network of over 30 offices
Specialist White-Collar Recruitment for Permanent, Contract & Temporary Staff
Corporate Services and Financial Services
Information and Communications Technology
Accounting and Finance
Executive
Engineering and Technical Personnel
Library and Records Management
Aligned Services
IT Services
Clarius Annual Report 2009 – Ready for Growth
----- End of picture text -----

2009 aNNUaL rEPOrt

The Annual General Meeting of Clarius Group Limited will be held at 3 p.m. on Tuesday, 17 November 2009, at Level 3, The Establishment, 252 George Street, Sydney.

A separate Notice of Meeting and Proxy Form are included with this report.

Clarius Group is a company limited by shares, incorporated and domiciled in Australia.

Financial Results

The group announced a result of $3.2m Net Profit After Tax (pre non-recurring one off costs and impairment)

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Strong operating cash flow of $8.3m for FY09

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Total Revenue of $293.4m

2 Clarius Annual Report 2009 – Ready for Growth

Ready for Growth

Solid platform ready for growth after restructure. The company now has a highly motivated management team and consultants

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Focus on operating cash has resulted in a significant turnaround in the cash position through improvements to the billing and collection process

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Strong focus throughout FY09 on cost control and improvements in efficiency. Head count is down 25% and associated salaries are down 31%

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Following the equity raising, Clarius Group will be strongly positioned to capitalise on consolidation opportunities moving forward

Clarius Annual Report 2009– Ready for Growth 3

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Managing Director’s report

4 Clarius Annual Report 2009 – Ready for Growth

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With the difficult trading conditions and additional costs of restructuring we were in breach of one of our bank covenants in the December quarter. This breach was subsequently waived by the bank. As a result of which, the opportunity was taken to revise the covenant in question, which we have since complied with. We have also negotiated the renewal of our overall finance facilities and have the continued support of our bankers.

Dear Fellow Shareholders

Since founding the business in 1984 we have managed through four economic downturns prior to the Global Financial Crisis (GFC) in 2008. I believe that we have the necessary skills and experience and most importantly knowledge of the business and industry to lead us out of the GFC and into the future with confidence. Personally, I am an investor and reasonably significant shareholder in the company and can assure shareholders that I will continue to do all that I can to maximise shareholder return.

In light of the current results and business environment the board considers that it remains in the best interest of shareholders to retain cash at present and therefore not pay a dividend. We see this as only a temporary situation and hope in the future to reinstate the company’s dividend policy which has been to pay in the order of 75% of profit after tax as dividends.

The GFC has been a challenging period and it would be remiss of me not to mention the commitment and effort of our management team and staff. We have some great people who all worked very hard in a difficult market and thanks to their efforts we have a strong organisation ready to take advantage of improvement in the market. I can’t thank them enough for their support.

Capital Raising

On 28 August we announced to the ASX an equity capital raising to raise $15.2 million. This was achieved through an institutional placement and a fully underwritten pro rata renounceable rights issue of ordinary shares.

Results

Shareholders can ascertain from the financial highlights earlier in this report that the year has been challenging. The effect of the GFC negatively impacted our permanent placement business by 60%. Conversely the challenges of the past year only saw our contract and temporary business down by 10%. The overall mix of business in terms of gross margin is 65% contract and temporary placements and 35% permanent recruitment. By maintaining this diversification in our revenue stream we have managed to limit the overall impact of the tough economic climate. Unfortunately however, two of our most recent acquisitions, Lloyd Morgan and EL Consult Asia were primarily permanent recruitment business and as such were affected to a greater extent than our other businesses. This resulted in an impairment write down of goodwill in December of $10.1 million and significant reduction in permanent recruitment gross margins.

We were very pleased with the institutional placement which was heavily oversubscribed. The overall result of the capital raising will be a strengthening of our balance sheet through the retirement of debt as well as enabling us to capitalise on emerging consolidation opportunities in our industry should they arise.

Outlook

I am confident that with the core of the business not only intact but performing relatively well, we have a solid platform from which to move forward. We have positioned the business for growth as demand for our services increases coming out of the GFC. Our ability to grow and capitalise on an improvement in demand will not require any significant additional fixed cost as we have capacity with our existing resources. We are already seeing some positive signs that demand is increasing, although to a modest level at this stage and mainly in temporary staff and contracting. I remain cautiously optimistic about improvement in our trading environment in the year ahead.

The effect of the GFC was felt almost immediately in November. As a company we responded swiftly and appropriately by reviewing all aspects of the business and our operating costs. The result of which necessitated a program of cost reduction, rationalisation and, where necessary redundancies, while maintaining our existing performance management procedures. The one off cost associated with this overall restructuring was $1.4 million after tax. The result for the full year, normalised for the impairment and restructuring, was a profit of $3.2 million after tax.

The action taken reduced our staff numbers by 25% and produced a salary saving of 31% on 2008. In broader terms the gross margin was down by $20 million from 2008 whilst at the same time normalised profit after tax was down $8 million on 2008. This demonstrates the level of cost saving that was achieved in a relatively short time. All of this activity was done with due care and compassion to ensure that the morale of our people remained intact.

Geoffrey J Moles Managing Director

We are pleased with the cash flow for the second half which was a healthy $13.9 million. This in turn allowed for the reduction in borrowings from December to $12.2 million at balance date.

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Clarius Annual Report 2009– Ready for Growth 5

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Corporate GovernanCe Statement

6 Clarius Annual Report 2009 – Ready for Growth

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This statement sets out the material governance principles and processes of the Clarius Group Limited (‘the Group’). The Board of Directors (‘the Board’) of The Group supports the ASX Principles of Good Corporate Governance and Good Practice Recommendations released by the ASX Corporate Governance Council. The Directors have resolved to consider and apply these Recommendations unless it is determined that, in the circumstances of the group, there is a sound reason in the interests of shareholders not to do so.

The role of the Board is to represent the shareholders and to promote and protect the interests of the group. Through its governance of the group the Board guides and monitors the business and affairs of the group on behalf of the shareholders.

The responsibilities and accountabilities of the Board have been framed in a Board Charter which reflects its governance principles. During the year the Board met 19 times. Meetings are held at regular intervals throughout the year supplemented by additional meetings as required in the conduct of the Board’s responsibilities.

Structure of the Board

The Board comprises four Directors. The Board considers this number appropriate in the present circumstances of the group. The Board Charter requires that there be a majority of Directors who are independent and non-executive. Three of the four Directors in office are independent and non-executive.

Directors in Office at the Date of this Statement

Name	Position	Date of appointment
Mr Geoffrey J. Moles	Managing Director	1 March 1984
Mr Lawrence J. Gibbs	Non-Executive Chairman	29 August 2001
Mr Peter D. Bunting	Non-Executive Director	6 July 2004
Ms Penelope Morris	Non-Executive Director	23 August 2005

Biographical details showing the relevant skills, experience and expertise held by each Director are included in the Directors’ Report on pages 12-13.

Independence

The Board has established a policy on Directors’ independence. An ‘independent Non-Executive Director’ is independent of Management, free of any significant business or other relationships that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of their unfettered and independent judgement, and otherwise meets the criteria for independence set out in the Best Practice Recommendations published by the ASX Corporate Governance Council.

The Board considers the appointment or retirement of Directors annually under succession plan principles having regard to the size of the group and to the appropriate skills and experience of Directors. Skills and experience regarded as important include experience as Chief Executive; recruitment and broader service industry experience; experience in financial markets, including acquisitions; financial experience; and broad experience in governance and risk management, including ASX-listed companies.

Directors are considered to be independent if they meet the following criteria:

they are not a substantial (5% or greater) shareholder of the group or an officer of a substantial shareholder of the group;

The Chairman carries out a formal review of performance with each Director, which also involves an opportunity for the Chairman and each Director to provide feedback relevant to the ongoing value of the Board as a whole. The Chairman reports to the Board on the outcomes of this review.

they have not been employed in an executive capacity in the last three years by the group or a subsidiary of the group;

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Clarius Annual Report 2009– Ready for Growth 7

they have not been employed as a Principal of a material professional advisor to the group during the past three years;
they are not a material supplier or customer of the Parent
Entity, or any subsidiary of the group;
they have no material contractual relationship with the group (other than as a Director); and
they are free from any interest, business or personal, which could, or could reasonably, be perceived to materially interfere with the Director’s ability to act in the best interests of the group.

In determining whether or not a material relationship exists with a third party such as a supplier, professional advisor or customer, the Board considers that relationship to be material if it meets the following criteria:

the customer accounts for more than 5% of the group’s
consolidated gross revenue per annum;
the group accounts for more than 5% of the supplier’s
consolidated revenue;
the total value of any contract or relationship between the group and the Director (other than as a Director of the group) exceeds $200,000.

Each Director has the right to seek independent professional advice at the group’s expense. The Board’s prior consent to obtaining such advice is required. The Director concerned does not participate in the Board’s consideration of its consent.

The Chairman

The Chairman’s responsibilities are expressly identified in the Board’s Charter. The Chairman, is responsible for ensuring that the Board receives timely, clear and relevant information to facilitate the efficient organisation and conduct of the Board’s duties in regard to strategic direction, governance and monitoring the performance of management. He is also responsible for ensuring that procedures to assess the performance of the Board and Directors are operating; facilitating Board discussion and effective contribution of all Directors; and overseeing representations to and communications with the shareholders.

Board Committees

The Board has two formally constituted committees, the Board Audit, Risk and Compliance Committee, and the Board Remuneration and Nominations Committee.

The Board Audit, Risk and Compliance Committee operates under a charter approved by the Board. Its objectives are to assist the Board in safeguarding integrity in financial reporting; making timely and balanced disclosure to shareholders, and potential shareholders in accordance with the principles of continuous disclosure; recognising and managing risk; and oversighting the company’s process for monitoring compliance with laws and regulations and the

code of conduct The Committee comprises a minimum of three Directors all of whom are to be, and are, independent Non-Executive Directors.

The members of the Committee during the year were:

Mr Peter D. Bunting (Chairman)
Mr Lawrence J. Gibbs
Ms Penelope Morris

Qualifications of Committee members are set out on pages 12-13 of the Directors’ Report.

The Committee, which is accountable to the Board, is required by its Charter to meet at least twice per year. Details of the number of meetings of the Committee held during the year, and the attendees at those meetings, are set out on page 23 of the Directors’ Report.

The responsibilities of the Board Audit, Risk and Compliance Committee are delegated by the Board and include:

monitoring the integrity of statutory reporting and reviewing, with recommendations, the policies and disclosures inherent in the half-year and full-year accounts;
reviewing and approving financial policies and procedures so as to ensure the effectiveness of financial management and reporting; the completeness of compliance obligations; and adherence with continuous disclosure requirements;
monitoring and appropriately advising the Board in relation
to related party transactions;
monitoring and assessing the group’s internal control frameworks and risk management strategies and processes, including recommending the insurance strategy;
overseeing the scope, cost and performance of external audit; and directing the strategies and scope of internal audit;
recommending the appointment of external auditors and monitoring the independence of external auditors.

The Board Remuneration and Nominations Committee operates under a Charter approved by the Board. The Committee’s objective is to assist the Board in the consideration of personnel and remuneration issues within the group. The Committee comprises a minimum of three Directors, a majority of whom are, and are to be, NonExecutive Directors:

The members of the Committee during the year were:

Mr Lawrence J. Gibbs (Chairman)
Mr Geoffrey J. Moles
Mr Peter D. Bunting
Ms Penelope Morris

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8 Clarius Annual Report 2009 – Ready for Growth

The responsibilities of the Board Remuneration and Nominations Committee are delegated by the Board and include:

recommending the structure and constituency of the Board such that it has the effective composition, size and commitment to properly discharge its responsibilities and duties;
ensuring appropriate Board succession planning, including identification, induction and training of new Directors as required;
performance assessment in relation to the Board and
individual Directors;
assisting the Chairman in relation to the efficacy of Board
processes;

Internal Audit

The Board Audit Risk and Compliance Committee endorses the Internal Audit Strategic Plan and approves the Internal Audit Plan for the year. The Internal Audit function is headed by an experienced and qualified internal audit manager who reports to the Board Audit Risk and Compliance Committee.

Internal Audit reviews the various areas of the Groups business on an ongoing basis employing a risk based audit approach which focuses on the higher risk activities in each business as assessed by the Board Audit Risk and Compliance Committee with input from management. The International Standard for the Professional Practice of Internal Auditing is adopted. The Board Audit Risk and Compliance Committee receive formal reports on significant issues.

recommending Chairman and Non-Executive Director
remuneration;
recommending remuneration framework and levels for the Managing Director and other senior management;
assisting the Chairman in relation to performance
goals for, and assessment of, the Managing Director and
senior management;
policies and procedures regarding the senior management team for recruitment, retention, remuneration, training and succession planning;
policies on superannuation arrangements for the group.

For details on the amount of remuneration, and all monetary and non-monetary components for each of the highest paid Executives who were not Directors during the year, and for all Directors, refer to pages 18-19 of the Directors’ Report. In relation to the payment of bonuses, options, and other incentive payments, discretion is exercised by the Board having regard to the overall performance of the group and the performance of the individual during the period.

There is no scheme to provide retirement benefits to NonExecutive Directors, other than statutory superannuation.

Risk Management

The Board is responsible for approving strategies and policies in relation to the identification of and management of risk and compliance. Including delegation to the Board Audit Risk and Compliance Committee and to management, the Board oversights the effective management of risk and compliance. The risk management framework includes an Executive Risk Committee that reports to the Board Audit Risk and Compliance Committee on a regular basis. The Board Audit Risk and Compliance Committee reports to the Board on the effectiveness of the risk and compliance management framework that is in place and all material business risks.

External Auditors

The group’s policy is to appoint external auditors who are independent and who demonstrate that independence.

An analysis of fees paid to the external auditors, including a breakdown of fees for non-audit services, is provided in the Directors’ Report and in notes to the Financial Statements. It is the policy of the external auditors to provide an annual declaration of their independence to the Board and to explain the basis upon which non-audit services do not impair their independence.

The external auditor will attend the Annual General Meeting and will be available to answer shareholder questions about the conduct of the audit and preparation, and the content of the Audit Report.

Statement by Managing Director and General Manager – Finance

The Managing Director and the General Manager – Finance have stated, in writing, to the Board that the group’s financial statements for the year ended 30 June 2009 present a true and fair view in all material respects of the group’s financial position and its operations for the year, and that they are in accordance in all material respects with all relevant accounting standards. The Managing Director and the General Manager – Finance have further stated to the Board in writing that the group’s records have been properly maintained under law; that the financial statements are underpinned by sound systems of risk management and internal controls which are operating effectively in all material respects; and that there are no post 30 June 2009 events which would materially impact the effectiveness of those systems.

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Clarius Annual Report 2009– Ready for Growth 9

Ethical Standards

The Board has adopted a Code of Conduct applicable to all Directors and to all employees. The Code directs standards of behaviour and of interpersonal dealings. Within the letter and spirit of the Code, the Directors and all employees are expected to act lawfully, in a professional manner, and with the utmost integrity and objectivity in their dealings with clients, contractors, candidates and competitors, the community and each other, striving at all times to enhance the reputation and performance of the group.

The group has implemented a ‘tip-off’ or whistleblower policy empowering employees to report instances of workplace misconduct. The procedures are protective of the interests and concerns of employees who are genuinely exposed to such instances.

Occupational Health and Safety

The group recognises the importance of occupational health and safety issues and is committed to the highest level of performance. The Risk Committee, constituted by senior management and monitored by the Board Audit, Risk and Compliance Committee, facilitates the systematic identification of issues relevant to all workers under the group’s responsibility, and ensures effective management of them.

Shareholders

The Board aims to ensure that shareholders are informed of all major developments affecting the group’s state of affairs.

Information is communicated to shareholders through the following channels:

the Annual Report is distributed to all shareholders and includes relevant information about the operations of the group during the year, changes in the state of affairs of the group and details of future developments, in addition to other disclosures required by the Corporations Act 2001;

announcements are made to the Australian Securities Exchange in respect of annual and half-yearly results, and on other occasions when the group becomes aware of information that might materially affect the price of its shares; and the use of the website www.clarius.com.au to publish releases by the group.

Continuous Disclosure

The Group’s practice, as reflected in the Board Charter and the Board Audit Risk and Compliance Committee Charter, is to release all price-sensitive information in a timely manner and in accordance with practices directed by the ASX Listing Rules. For disclosure purposes, price-sensitive information is taken to be information that a reasonable person would expect to have a material effect on the price of the Group’s securities.

Transactions in Shares of the Group

Directors and employees of the group are not permitted to undertake any transactions in relation to shares in the group in the period between the end of the financial half or full year until the release of the financial information relating to that period. Directors and employees of the group are further prohibited from undertaking transactions involving the group’s shares at any time whilst in possession of information which is not in the public domain and which could reasonably lead to a change in the share price of the group.

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10 Clarius Annual Report 2009 – Ready for Growth

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Directors’ report

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Clarius Annual Report 2009– Ready for Growth 11

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Geoffrey J Moles

Managing Director

Geoffrey Moles has over 37 years commercial experience in information technology (IT) and recruitment at senior management levels. In 1984, he established Candle Computer Services Pty Limited which became Candle Australia Limited when it listed on the ASX in 1997 before changing its name to Clarius Group Limited in 2007. Prior to Candle, Geoff worked in the IT industry with Burroughs Limited and Datec Pty Limited, one of Australia’s leading systems integration companies.

Lawrence J Gibbs

Non-Executive Chairman

Lawrence Gibbs is currently Managing Director of BG Capital Corporation Limited, an independent investment banking firm. Lawrence was previously executive director and head of investment banking at Burdett Buckeridge & Young Limited, a well known Australian stockbroking and investment banking firm. He has 34 years experience in the financial services industry, including senior executive positions in funds management, corporate advisory, investment banking and stockbroking. Lawrence is a director of several private investment companies. Lawrence holds a Bachelor of Economics degree.

He is also a member of the Board Audit, Risk and Compliance Committee and the chairman of the Board Remuneration and Nominations Committee.

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12 Clarius Annual Report 2009 – Ready for Growth

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Peter D Bunting

Non-Executive Director

Peter Bunting LLB FCA, worked for 30 years in the accounting profession, with 16 years as a partner in Deloittes. From 2000 to 2005 he was chairman of the Health Insurance Commission, then a major Federal Government agency, delivering health programs including Medicare and the PBS. He is a director of several unlisted companies.

Peter is chairman of the Board Audit, Risk and Compliance Committee and is a member of the Board Remuneration and Nominations Committee.

Penelope Morris AM

Non-Executive Director

Penny Morris has been a professional company director since 1994 serving on a diverse range of public company and government enterprise boards. She is currently a director of Aristocrat Leisure Limited, Mirvac Limited, NSW Institute of Teachers and Bowel Cancer & Digestive Research Institute Australia. Prior to this period, Penny held senior executive positions with Lend Lease in Sydney, and the Commonwealth Government in Canberra. Penny has a Bachelor of Architecture (Hons.), a Masters of Environmental Science and Diplomas of Company Directorship and International Company Directorship.

Penny is also a member of the Board Audit, Risk and Compliance Committee and a member of the Board Remuneration and Nominations Committee.

Diana J Eilert

Managing Director – Ceased Employment 3 November 2008

Diana Eilert was appointed as Managing Director with Clarius Group Limited on 28 August 2007. Prior to joining the Company, Diana was a Group Executive with Suncorp, responsible for People, Technology, Marketing and Joint Ventures for the entire Suncorp Group. She joined Suncorp in 2003 and ran Suncorp’s entire General Insurance – a business with 3500 employees, $2.6 billion in revenues and $677 million NPBT - until mid-2006.

Diana worked in financial services for over 21 years, commencing her career with NRMA and AAMI before joining Citibank in 1986 where she held a number of general management positions including Head of Citibank Direct. In addition she has worked in strategy consulting as a Principal with AT Kearney and a Partner with IBM. Diana holds a Bachelor of Science in Pure Maths (Syd) and a Master of Commerce in Finance and Marketing (UNSW).

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Clarius Annual Report 2009– Ready for Growth 13

Your Directors present their report on Clarius Group Limited, (the “Company”) and its controlled entities (the “consolidated entity”) for the financial year ended 30 June 2009.

Directors

The names of Directors in office at any time during or since the end of the year are:

Geoffrey J Moles	Managing Director
Lawrence J Gibbs	Non-Executive Chairman
Peter D Bunting	Non-Executive Director
Penelope Morris	Non-Executive Director
Diana J Eilert	Managing Director	Ceased employment 3 Nov 2008

Diana Eilert was the Managing Director from the beginning of the financial year until her resignation on 3 November 2008.

Geoffrey Moles was Non-Executive Chairman until 3 November 2008 when he was appointed Executive Chairman. On the 23 June 2009, Lawrence Gibbs was appointed chairman and Geoffrey Moles was appointed Managing Director and continues in office at the date of this report.

Principal Activities

Clarius Group (ASX: CND) is a specialist in the employment services market providing recruitment, contractor and staff services across the Asia Pacific region.

Established over twenty five years ago and listed on the Australian Stock Exchange in 1997, Clarius Group has a reputation for high-quality delivery and remains one of the largest, longest standing and best performing recruitment suppliers in the region.

Clarius Group operates through a number of quality specialist brands:

Recruitment

Candle ICT Information and Communications Technology
Alliance Recruitment Corporate Services and Financial Services
Lloyd Morgan Accounting and Finance
The One Umbrella Library and Records Management
SouthTech Personnel Technical and Engineering
JAV IT Managed IT Services and Professional IT

Clarius Group employs over 350 staff through a network of offices located in Sydney, Melbourne, Brisbane, Perth, Adelaide and Canberra in Australia; Auckland and Wellington in New Zealand; Hong Kong, Beijing, Shanghai, in China; Kuala Lumpur in Malaysia; and Singapore.

There were no significant changes in the nature of the consolidated entity’s principal activities during the financial year.

Operating Results

The consolidated loss of the consolidated entity after providing for income tax for the financial year amounted to $8.322 million (2008: profit $11.333 million).

Dividends Paid or Recommended

Dividends paid to members during the financial year were as follows:

		2009
		$000
	Fully franked fnal dividend of 7.0 cents per share was paid on 30 September 2008:	4,018
	No interim dividend was paid:	-

On 25 August 2009 the Directors resolved not to declare a final dividend.

Review of Operations

Operating profit after tax (before specific one off items and other significant items such as impairment) was $3.2 million which is in line with market guidance. The reduction in the operating profit is a result of the impact of the Global Financial Crisis.

The statutory net loss after tax is $8.322 million compared to last year’s profit of $11.333 million. The statutory loss includes the impairment write down announced at the half year and other one-off non-recurring costs associated with restructuring and redundancies.

The cash flow for the second half was positive at $13.6 million resulting in a full year positive operating cash flow of $8.3 million. The gearing ratio at balance date was 13.1%.

Focus on cost control has seen significant reduction in the cost base of the business which was necessary to maintain the profitability. Although the gross margin of the business was down by $20 million, the profit after tax was only down by $8.1 million. The Board took the necessary action to protect the business and remain profitable in a climate of reduced demand for our services.

Staff numbers are down from 450 to 350 in line with the reduced demand for services. As a result the company has maintained the productivity of the sales force throughout the year.

Office premises have been consolidated which has resulted in savings and efficiencies.

As mentioned at the half year there has been a strong emphasis on cash management which has seen a reduction in borrowings and has funded the payments that were made during the year for prior acquisitions.

At the date of this report, all earn out arrangements have been finalised with the exception of the operating companies based in South East Asia which are still in earnout.

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14 Clarius Annual Report 2009 – Ready for Growth

Financial Position

The net assets of the consolidated entity have decreased by $7 million from 30 June 2008 due to the non-cash impairment write down that was disclosed at the half year. The impairment write down was in relation to the Lloyd Morgan businesses in Australia and Asia which were adversely affected by the Global Financial Crisis.

Overall the consolidated entity is in a sound position with gearing at 13.1%, un-drawn financing facilities and the potential to raise further capital as and when required. The Directors believe the consolidated entity is in a financial position to continue to grow both organically and through opportunistic acquisitions when they arise.

Significant Changes in State of Affairs

There were no significant changes in the state of affairs of the consolidated entity during the financial year.

Future Developments

The likely developments in the operations of the consolidated entity and the expected results of those operations in financial years subsequent to the year ended 30 June 2009 are included in greater detail in the Managing Director’s review section of the annual report.

These developments, together with the current strategy of continuous productivity improvement, are expected to assist in the achievement of the Company’s long term goals.

Director’s Interests in Shares and Options

At the date of this report, the particulars of shares and options in which each director has a relevant interest either directly or indirectly are:

Geoffrey J Moles 2,970,290 ordinary shares

Lawrence J Gibbs 52,185 ordinary shares

Peter D Bunting 7,500 ordinary shares Penelope Morris 40,000 ordinary shares

Company Secretary

Nicholas Geddes FCA FCIS was appointed company secretary on 18 November 1996. Mr Geddes is the principal of Australian Company Secretaries, a company secretarial practice that he formed in 1993. Nicholas is the President of the National Council of Chartered Secretaries Australia. His previous experience, as a chartered accountant and company secretary, includes investment banking and development and venture capital in Europe, Africa, the Middle East and Asia. Nicholas is a Fellow of the Institute of Company Secretaries in Australia and a Fellow of the Institute of Chartered Accountants in England and Wales.

Remuneration Report

After Balance Date Events

No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in subsequent financial years other than the following:

Issue of 995,636 ordinary fully paid shares on 1 July 2009, to the vendor of JAV IT in settlement of the purchase of the business.
On 25 August 2009 the Company resolved to appoint Patersons Corporate Finance to investigate a capital raising on behalf of the company

Environmental Issues

The remuneration report is set out under the following headings:

Non-Executive Director remuneration
Principles used to determine the nature and amount of
executive remuneration
Details of Directors and key management personnel
remuneration
Employment contracts
Share-based payments

The information provided under these headings includes remuneration disclosures that are required under the Corporations Act 2001. These disclosures have been transferred from the financial report and have been audited.

The consolidated entity’s operations are regulated by the relevant Commonwealth and State legislation.

The nature of the Company’s business does not give rise to any significant environmental issues.

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Clarius Annual Report 2009– Ready for Growth 15

Non-Executive Director Remuneration

The Board’s policy is to remunerate non-executive directors at market rates for comparable companies. Such remuneration is provided in recognition of the time, commitment and responsibilities assumed by non-executive directors. The Remuneration and Nominations Committee determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by shareholders at the Annual General Meeting. Fees for nonexecutive directors are not linked to the performance of the consolidated entity. Non-executive directors do not receive options or any form of equity as remuneration.

Principles Used to Determine the Nature and Amount of Executive Remuneration

Executive Remuneration Policy

The Board Remuneration and Nominations Committee Terms of Reference (Executive Remuneration Policy), set out the terms and conditions by which the chief executive and other senior executives remuneration is determined. The Executive Remuneration Policy was developed by the Remuneration and Nominations Committee and approved by the Board after seeking professional advice from independent external consultants where required. All executives receive a base salary (which is based on factors such as length of service and experience), superannuation, fringe benefits, options and performance incentives. The Remuneration and Nominations Committee reviews executive remuneration annually, as requested by the Managing Director, by reference to the consolidated entity’s performance, executive performance and comparable information from industry sectors and other listed companies in similar industries.

The Board Executive Remuneration Policy has been designed to align executive and shareholder interests and objectives. The Board believes the Executive Remuneration Policy to be appropriate and effective in attracting and retaining skilled executives to run and manage the business.

The performance of executives is measured against criteria agreed annually with each executive and the criteria are based predominantly on the forecast growth of the consolidated entity’s profits and shareholder value. Bonuses and incentives are linked to predetermined performance criteria. The Board may, however, exercise its discretion in relation to approving incentives, bonuses and options, and can recommend changes to the Board Remuneration and Nominations Committee’s recommendations. Any changes must be justified by reference to measurable performance criteria. The policy is designed to attract skilled executives and reward them for performance that results in long-term growth in shareholder wealth.

The non-executive directors and executives are entitled to a superannuation guarantee contribution required by the Government and do not receive any other retirement benefits.

All remuneration paid to executives is valued at cost to the Company and expensed. Options are valued using the American Call Option Pricing methodology.

Performance Based Remuneration

As part of the chief executive and senior executives’ remuneration package there is a performance-based component, related to Key Performance Indicators (KPIs). The intention of this program is to facilitate congruence of goals between executives and those of the business and shareholders. The KPIs are set annually, with a degree of consultation with executives to ensure their commitment to achieving those goals. The measures are specifically tailored to the areas of each executive’s involvement within the business and over which they have control.

The annual KPI’s target the areas the Board believes hold the greatest potential for the consolidated entity’s expansion and profitability, covering financial and non-financial as well as short-term and long-term goals. The level set for each KPI is based on budgeted figures for the consolidated entity and respective industry standards.

Performance in relation to the KPIs is assessed annually, with bonuses being awarded depending on the number and deemed difficulty of the KPIs achieved. Following the annual assessment, the KPIs are reviewed by the Managing Director, with assistance as may be required from the Board Remuneration and Nominations Committee in light of the desired and actual outcomes, and their efficiency is assessed in relation to the consolidated entity’s goals and shareholder wealth, before the KPIs are set for the following year.

In determining whether or not a financial KPI has been achieved, the Company bases the assessment on audited figures, however, where the KPI involves comparison of the consolidated entity or a division within the consolidated entity to the market, independent reports are obtained from organisations such as Standard & Poors.

Options Issued as Part of Remuneration

Options may be issued to the Managing Director and senior executives as part of their remuneration. The options are not issued based on performance criteria alone, as they are also issued to encourage staff retention within the consolidated entity. The key goal is to increase congruence of goals between executives, staff, directors and shareholders.

Executives are also entitled to participate in the employee share option arrangements.

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16 Clarius Annual Report 2009 – Ready for Growth

Details of Directors’ and Key Management Personnel Remuneration

The remuneration of each director is as follows:

Parent Entity	Short-Term Employee Benefts Post- Employment Benefts Long-Term Benefts Share- Based Payments
	Salary $ Directors’ fees $ Other $ Short- Term Incentive $ Superannuation $ Long- Service Leave $ Termination Payments $ Annualised Value $ Total Remuneration Paid $
Directors
Geoffrey J Moles
2009	200,000 108,410 - - 9,756 - - - 318,166
2008	- 100,000 - - 9,000 - - - 109,000
Lawrence J Gibbs
2009 - 66,546 - - 5,989 - - - 72,535
2008 - 55,240 - - 4,972 - - - 60,212
Peter D Bunting
2009 - 75,024 - - 6,752 - - - 81,776
2008 - 60,240 - - 5,422 - - - 65,662
Penelope Morris
2009 - 71,290 - - - - - - 71,290
2008 - 52,740 - - - - - - 52,740
Diana J Eilert(1)
2009 200,467 - - - 11,530 - 250,000 - 461,997
2008 462,180 - 7,783 400,000 13,129 - - 90,350 973,442

(1) Diana J Eilert ceased employment 3 November 2008

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Clarius Annual Report 2009– Ready for Growth 17

The remuneration of key management personnel of the Consolidated Entity not included above is as follows:

Consolidated	Short-Term Employee Benefts Post- Employment Benefts Long-Term Benefts Share- Based Payments
	Salary $ Other $ Short-Term Incentive $ Superannuation $ Long- Service Leave $ Termination Payments $ Annualised Value $ Total Remuneration Paid $(1)
Key Management Personnel
Kym L Quick
2009 264,319 65,000 13,744 - - 57,549 400,612
2008 253,738 - 50,000 13,009 4,422 - 68,603 389,772
Paul A Barbaro
2009 256,255 - 70,000 13,744 - - 67,415 407,414
2008 306,881 6,341 120,000 13,129 - - 70,735 517,086
Kerryn L Divall
2009 172,166 - 25,000 13,744 - - 1,777 212,687
2008 141,500 - 13,500 12,218 - - 1,128 168,346
David M Stewart
2009 244,615 - 103,877 12,073 - - 14,524 375,089
2008 - - - - - - - -
Jane A Bianchini(1)
2009 68,794 - - 3,436 - - - 72,230
2008 306,891 7,783 - 13,129 - - 66,482 394,285
David A Marshall(2)
2009 131,713 - - 6,872 - 148,707 - 287,292
2008 161,507 4,670 96,600 8,641 - - 47,522 318,940
Gregory M Smith(3)
2009 109,766 - - 12,950 - 55,869 - 178,585
2008 134,076 - 50,000 9,501 - - - 193,577

(1) Jane A Bianchini ceased employment 12 September 2008

(2) David A Marshall ceased employment 1 December 2008

(3) Gregory M Smith ceased employment 15 December 2008

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18 Clarius Annual Report 2009 – Ready for Growth

The relative proportions of the remuneration that are linked to performance and those that are fixed are as follows:

		Performance-Based
	Fixed Remuneration	Payments	Share-Based Payments
	%	%	%
Directors
Geoffrey J Moles
2009	100	-	-
2008	100	-	-
Lawrence J Gibbs
2009	100	-	-
2008	100	-	-
Peter D Bunting
2009	100	-	-
2008	100	-	-
Penelope Morris
2009	100	-	-
2008	100	-	-
Diana J Eilert
2009	100	-	-
2008	84	-	16
Key management personnel
Kym L Quick
2009	70	16	14
2008	71	12	17
Paul A Barbaro
2009	67	17	16
2008	64	23	13
Kerryn L Divall
2009	89	11	-
2008	92	8	-
David M Stewart
2009	70	27	3
2008	-	-	-
Jane A Bianchini
2009	100	-	-
2008	84	-	16
David A Marshall
2009	100	-	-
2008	56	30	14
Gregory M Smith
2009	100	-	-
2008	100	25	-

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Clarius Annual Report 2009– Ready for Growth 19

The basis of the performance based bonus is described above.

The remuneration of key management personnel and the returns to the company’s shareholders are aligned through the remuneration policies implemented by the board as follows:

The KPI’s assigned to key management personnel directly impact the amount of bonus payments made and potential salary increases. These KPI’s are directly linked to the profitability of the Company and the achievement of the Company’s financial goals during the respective twelve month service period. Therefore, the level of remuneration of key management personnel is directly linked to the performance of the Company in each twelve month period.

Employment Contracts

Remuneration and other terms of employment for the Managing Director and other key management personnel are formalised in contracts of employment. Each of these agreements provide for the remuneration terms including the provision of performance-related cash bonuses and other benefits. There are no specified lengths of service included within the contract. The Managing Director’s contract may be terminated by either party with six months notice. All other contracts with key management personnel may be terminated by either party with between two and six months notice.

The vesting conditions relating to the Employee and Executive Option plans include a requirement for the Company’s share price to exceed the relevant ASX share price index for similar sized companies. Notwithstanding the fact that the Company’s share price is impacted by external factors and market movements that are outside the control of key management personnel, the extent of the benefit that key management personnel may derive from participation in the plan increases as the Company’s share price increases over the longer term.

	Name and Position Term of Agreement Basis of Salary Payment Notice Period
	Geoffrey J Moles – Managing Director On-going until terminated by either party Base salary, inclusive of superannuation, for the 8 months ended 30 June 2009 of $213,475, to be reviewed annually by the Board Remuneration and Nominations Committee Notice period of 6 months by either party.
	Kym L Quick – Executive General Manager – Lloyd Morgan Australia On-going until terminated by either party Base salary, inclusive of superannuation, for the year ended 30 June 2009 of $250,000 to be reviewed annually by the Managing Director Notice period of 2 months by either party.
	Paul A Barbaro – Executive General Manager – Alliance On-going until terminated by either party Base salary, inclusive of superannuation, for the year ended 30 June 2009 of $250,000, to be reviewed annually by the Managing Director Notice period of 2 months by either party.
	Kerryn L Divall – General Manager, Finance On-going until terminated by either party Base salary, inclusive of superannuation, for the year ended 30 June 2009 of $203,745, to be reviewed annually by the Board Remuneration and Nominations Committee Notice period of 3 months by either party.
	David M Stewart – Chief Executive Offcer - ICT On-going until terminated by either party Base salary, inclusive of superannuation, for the year ended 30 June 2009 of $313,745, to be reviewed annually by the Managing Director Notice period of 3 months by either party.
	Jane A Bianchini – Executive General Manager – Candle ICT (ceased employment 12 September 2008) Agreement terminated effective 12 September 2008 Base salary, inclusive of superannuation, 6 weeks ended 30 June 2009 of $283,745.
	Diana J Eilert – Managing Director (appointed as CEO on 30 July 2007 and Managing Director on 28 August 2007) Agreement terminated effective 3 November 2008 Base salary, inclusive of superannuation, for the 4 months ended 30 June 2009 of $513,745
	David A Marshall – Chief Financial Offcer (ceased employment 1 December 2008) Agreement terminated effective 1 December 2008 Base salary, inclusive of superannuation, for the 5 months ended 30 June 2009 of $290,615.
	Gregory M Smith – Executive General Manager – Lloyd Morgan Australia (ceased employment 15 December 2008) Agreement terminated effective 15 December 2008 Base salary, inclusive of superannuation, for the 6 months ended 30 June 2009 of $243,102

Share-Based Payments

Non-cash Benefits include the annualised value of the options granted over unissued ordinary shares during the financial year valued using the American Call Option Pricing model. Options vest over four financial years and only on the satisfaction of a performance hurdle.

Option Holdings

	Balance			Lapsed/	Balance	Vested
	01/07/2007	Granted	Exercised	Forfeited	30/06/2008	30/06/2008
Directors
Geoffrey J Moles	-	-	-	-	-	-
Lawrence J Gibbs	-	-	-	-	-	-
Peter D Bunting	-	-	-	-	-	-
Penelope Morris	-	-	-	-	-	-
Diana J Eilert	2,100,000	-	-	(2,100,000)	-	-
Key Management	Personnel
Kym L Quick	930,000	300,000	-	(30,000)	1,200,000	-
Paul A Barbaro	700,000	300,000	-	-	1,000,000	-
Kerryn L Divall	15,000	80,000	-	-	95,000	-
David M Stewart	-	400,000	-	-	400,000	-
Jane A Bianchini	700,000	-	-	(700,000)	-	-
David A Marshall	800,000	-	-	(800,000)	-	-
Gregory M Smith	-	200,000	-	(200,000)	-	-
Total	5,245,000	1,280,000	-	(3,830,000)	2,695,000	-

Options that were granted over unissued ordinary shares pursuant to the rules of the Share Option Plan, during the financial year by the Company to key management personnel as part of their remuneration are as follows:

				Fair Value at		Fair Value
		Exercise	Expiration	Grant Date	Vesting Period	Option at Grant
	No. Options	Price	Date	(dollars)	(years)	Date (cents)
Options Granted to
Kym L Quick	200,000	$1.49	1 Sep 12	$39,790	3	$0.30
Kym L Quick	50,000	$0.30	5 Jan 13	$1,764	3	$0.06
Kym L Quick	50,000	$0.55	29 Jun 13	$3,179	3	$0.11
Paul A Barbaro	200,000	$1.49	1 Sep 12	$39,790	3	$0.30
Paul A Barbaro	50,000	$0.30	5 Jan 13	$1,764	3	$0.06
Paul A Barbaro	50,000	$0.55	29 Jun 13	$3,179	3	$0.11
Kerryn L Divall	50,000	$0.30	5 Jan 13	$1,764	3	$0.06
Kerryn L Divall	30,000	$0.55	29 Jun 13	$1,907	3	$0.11
David M Stewart	300,000	$1.44	8 Sep 12	$52,848	3	$0.29
David M Stewart	50,000	$0.30	5 Jan 13	$1,764	3	$0.06
David M Stewart	50,000	$0.55	29 Jun 13	$3,179	3	$0.11
Gregory M Smith	200,000	$1.49	1 Sep 12	$39,790	3	$0.30

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Clarius Annual Report 2009– Ready for Growth 21

Shareholdings

Shareholdings
	Balance	Received as		Options			Balance
	01/07/2008	Remuneration		Exercised		Movement	30/06/2009
Directors
Geoffrey J Moles	1,325,324		-		-	1,644,966	2,970,290
Lawrence J Gibbs	49,238		-		-	2,947	52,185
Peter D Bunting	7,500		-		-	-	7,500
Penelope Morris	40,000		-		-	-	40,000
Diana J Eilert	200,000		-		-	(200,000)	-
Key Management Personnel
Kym L Quick	-		-		-	-	-
Paul A Barbaro	-		-		-	-	-
Kerryn L Divall	-		-		-	-	-
David M Stewart	-		-		-	-	-
David A Marshall	-		-		-	-	-
Jane A Bianchini	-		-		-	-	-
Gregory M Smith	5,000		-		-	(5,000)	-
Total	1,627,062		-		-	1,442,913	3,069,975

Shares Issued on Exercise of Options during the Year

					Amount
	Number of		Amount Paid		Unpaid Per
	Shares Issued		Per Share $		Share $
Directors
Diana J Eilert		-		-		-
Key Management Personnel
Kym L Quick		-		-		-
Paul A Barbaro		-		-		-
Kerryn L Divall		-		-		-
David M Stewart		-		-		-
David A Marshall		-		-		-
Jane A Bianchini		-		-		-
Gregory M Smith		-		-		-

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22 Clarius Annual Report 2009 – Ready for Growth

Meetings of Directors

During the financial year, nineteen meetings of directors were held. Attendances were:

	Number of Meetings	Number of Meetings
Director	Held(1)	Attended
Geoffrey J Moles	19	17
Peter D Bunting	19	18
Lawrence J Gibbs	19	19
Penelope Morris	19	18
Diana J Eilert(Ceased employment 3 November 2008)	9	9

(1) The number of meetings held during the time the Director was a member of the Board.

Board Audit Risk and Compliance Committee Meetings

During the financial year, four Committee meetings were held. Attendances were:

	Number of Meetings	Number of Meetings
Director	Held(2)	Attended
Lawrence J Gibbs	4	4
Peter D Bunting	4	4
Penelope Morris	4	4

(2) The number of meetings held during the time the Director was a member of the Board Audit Risk and Compliance Committee.

Board Remuneration and Nominations Committee Meetings

During the financial year, three Committee meetings were held. Attendances were:

	Number of Meetings	Number of Meetings
Director	Held(3)	Attended
Geoffrey J Moles	2	2
Peter D Bunting	3	3
Lawrence J Gibbs	3	3
Penelope Morris	3	3

(3) The number of meetings held during the time the Director was a member of the Board Remuneration and Nominations Committee.

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Clarius Annual Report 2009– Ready for Growth 23

Indemnifying Officers or Auditor

The Company has entered into deeds of indemnity, insurance and access with each of the directors and the company secretary. These were approved by shareholders at the 2001 annual general meeting. The indemnity will only indemnify a director to the extent permitted by the law and the Company’s constitution.

The Company has not, during or since the end of the financial year, in respect of any person who is or has been an officer or auditor of the Company or a related body corporate:

indemnified or made any relevant agreement for indemnifying against a liability incurred as an officer, including costs and expenses in successfully defending legal proceedings; or

Proceedings on Behalf of the Company

No person has applied for leave of Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceeding to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.

No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001.

Non-Audit Services

paid or agreed to pay a premium in respect of a contract insuring against a liability incurred as an officer for the costs of expenses to defend legal proceedings; with the exception of the following;
during the year the Company paid a premium to insure the directors listed in this report against liabilities for the costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of directors of the Company. The terms of the policy prohibit disclosure of the premium paid.

Directors’ Benefits

No director has received or become entitled to receive, during or since the end of the financial year, a benefit because of a contract made by the Company, controlled entity or a related body corporate with a director, a firm of which a director is a member or an entity in which a director has a substantial financial interest other than as disclosed in note 8 of the financial statements.

This statement excludes a benefit included in the aggregate amount of emoluments received or due and receivable by directors and shown in the Company’s financial statements, or the fixed salary of a full-time employee of the Company, controlled entity or a related body corporate.

The Board of Directors, in accordance with the advice from the Board Audit Risk and Compliance Committee, is satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons:

the nature and scope of all non-audit services are reviewed and approved by the Board Audit Risk and Compliance Committee prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and
the nature of the services provided do not compromise the general principles relating to auditor independence as set out in the Institute of Chartered Accountants in Australia and CPA Australia’s Professional Statement F1: Professional Independence.

The following fees for non-audit services were paid to the external auditors during the year ended 30 June 2009:

		Amount Paid $
	Taxation Services	32,000
	Business Services	10,915
	Total	42,915

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24 Clarius Annual Report 2009 – Ready for Growth

Auditor’s Independence

The lead auditor’s independence declaration for the year ended 30 June 2009 has been received and can be found on page 25 of the directors’ report.

Rounding of Amounts

The Company has applied the relief available to it in ASIC Class Order 98/100, and accordingly, amounts in the financial statements and the directors’ report have been rounded to the nearest thousand dollars.

Auditor’s Independence Declaration

As lead auditor for the audit of Clarius Group Limited and controlled entities for the year ended 30 June 2009, I declare that, to the best of my knowledge and belief, there have been:

no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relations to the audit.

This declaration is in respect of Clarius Group Limited and the entities it controlled during the period.

Signed in accordance with a resolution of the Board of Directors

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Geoffrey J Moles Managing Director

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Peter D Bunting Director

WHK Howath Sydney

Roger Wong

Dated at Sydney this 25th day of August 2009

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Clarius Annual Report 2009– Ready for Growth 25

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Financial StatementS

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26 Clarius Annual Report 2009 – Ready for Growth

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Income Statement[(1)]

For the year ended 30 June 2009

Income Statement(1) For the year ended 30 June 2009
	Consolidated Parent Entity
	Note 2009 $000 2008 $000 2009 $000 2008 $000
Revenues from continuing operations	4 293,438 321,429 199,646 236,044
On hired labour costs	(234,007) (240,453) (162,898) (188,002)
Employee benefts expense	(40,367) (45,575) (19,747) (23,723)
Depreciation and amortisation expense	5 (1,256) (1,432) (584) (743)
Operating rental expense	(3,568) (3,445) (1,272) (1,410)
Borrowing costs expense	5 (1,437) (1,488) (1,362) (1,443)
Other expenses	(9,971) (12,650) (1,770) (9,888)
Impairment of Investments	(10,120) - (6,289) -
(Loss) / Proft before income tax	(7,288) 16,386 5,724 10,835
Income tax expense	6 (1,034) (5,053) (1,046) (3,411)
(Loss) / Proft for the year attributable to the members of Clarius GroupLimited	(8,322) 11,333 4,678 7,424
	Cents Per Share 10 (14.0) 20.3 10 (12.1) 19.0
Basic earnings per share
Diluted earnings per share

(1) The above Income Statement should be read in conjunction with the accompanying notes.

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Clarius Annual Report 2009– Ready for Growth 27

Balance Sheet[(1)]

As at 30 June 2009

Balance Sheet(1) As at 30 June 2009
	Consolidated Parent Entity
	Note 2009 $000 2008 $000 2009 $000 2008 $000
Current assets
Cash assets and cash equivalents	12 2,701 3,484 1,670 532
Trade and other receivables	13 50,134 63,109 72,273 64,651
Total current assets	52,835 66,593 73,943 65,183
Non-current assets
Trade and other receivables	13 - - 12,329 10,782
Plant and equipment	15 1,929 2,441 662 964
Deferred tax assets	14 2,475 2,855 1,153 1,760
Other fnancial assets	16 - - 12,828 19,074
Intangible assets	18 67,719 77,108 18,876 21,270
Total non-current assets	72,123 82,404 45,848 53,850
Total assets	124,958 148,997 119,791 119,033
Current liabilities
Trade and other payables	19 21,534 36,210 16,457 21,410
Bank overdraft	11 639 2,085 - 1,562
Interest Bearing Liabilities	11 15,000 15,000 15,000 15,000
Current tax Liabilities	20 (664) (396) (547) (3,042)
Provisions	21 1,330 1,936 534 873
Total current liabilities	37,839 54,835 31,444 35,803
Non-current liabilities
Trade and other payables	19 - - - -
Deferred tax liabilities	20 22 66 - -
Provisions	21 1,188 1,161 789 753
Total non-current liabilities	1,210 1,227 789 753
Total liabilities	39,049 56,062 32,233 36,556
Net Assets	85,909 92,935 87,558 82,477
Equity
Contributed equity	22 74,636 71,611 74,636 71,611
Reserves	23 955 (76) 1,219 (177)
Retained Profts	24 10,318 21,400 11,703 11,043
Total equity	85,909 92,935 87,558 82,477

(1) The above Balance Sheet should be read in conjunction with the accompanying notes.

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28 Clarius Annual Report 2009 – Ready for Growth

Statement of Changes in Equity[(1)]

For the year ended 30 June 2009

Statement of Changes in Equity(1) For the year ended 30 June 2009
	Consolidated Parent Entity
	Note 2009 $000 2008 $000 2009 $000 2008 $000
Total equity at the beginning of the fnancial year	92,935 84,435 82,477 77,651
	92,935 84,435 82,477 77,651
Exchange difference on translation of foreign operations	23 902 (1,493) 9 -
Adjustment to prior year	30 1,258 - 1,258 (1,258)
Net income recognised directly in equity	2,160 (1,493) 1,267 (1,258)
(Loss) / Proft for the year	(8,322) 11,333 4,678 7,424
Total recognised income and expense for the year	86,773 94,275 88,422 83,817
Dividends paid or provided for	7 (4,018) (10,447) (4,018) (10,447)
Shares issued during the year	22 3,025 8,690 3,025 8,690
Share based payments	23 129 417 129 417
Total equity at the end of the fnancial year	85,909 92,935 87,558 82,477

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

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Clarius Annual Report 2009– Ready for Growth 29

Cash Flow Statement[(1)]

For the year ended 30 June 2009

Cash Flow Statement(1) For the year ended 30 June 2009
	Consolidated Parent Entity
	Note 2009 $000 2008 $000 2009 $000 2008 $000
Cash fows operating activities
Receipts from customers	336,799 342,502 227,711 262,066
Payments to suppliers and employees	(307,227) (312,815) (200,599) (238,197)
Interest received	41 55 - 4
Interest and other borrowing costs paid	(1,437) (1,488) (1,362) (1,443)
Income tax paid	(964) (7,322) 2,056 (7,102)
GST paid	(18,847) (21,263) (10,775) (14,865)
Net cashprovided byoperatingactivities	11 8,365 (331) 17,031 463
Cash fows investing activities
Payment for purchase of business	(4,796) (8,132) - 1,710
Purchase of plant and equipment	(425) (854) (213) -
Proceeds from disposal of non-current assets	- - 63 131
Payments for software development and intangible assets	(108) (177) (61) 82
Net cash(used in)/provided byinvestingactivities	(5,329) (9,163) (211) 1,923
Cash fows fnancing activities
Proceeds from borrowings	- 15,000 - 15,000
Loan from/(payment to) related party	41 (55) (11,445) (12,478)
Dividends paid to shareholders	(2,675) (8,614) (2,675) (8,614)
Proceeds from the issue of shares	- 4,743 - 4,743
Net cash (used in) / provided by fnancing activities	(2,634) 11,074 (14,120) (1,349)
Net increase / (decrease) in cash held	402 1,580 2,700 1,036
Cash at the beginning of the fnancial year	1,399 101 (1,030) (2,066)
Effect of exchange rates on cash holdings in foreign currencies	261 (282) - -
Cash at the end of the fnancial year	12 2,062 1,399 1,670 (1,030)

(1) The above Cash Flow Statement should be read in conjunction with the accompanying notes.

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30 Clarius Annual Report 2009 – Ready for Growth

1. Statement of Significant Accounting Policies

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

The financial report is compliant to the International Financial Reporting Standards (IFRS) in their entirety.

The financial report covers the consolidated entity of Clarius Group Limited and controlled entities and Clarius Group Limited as an individual entity. Clarius Group Limited is a listed public company, incorporated and domiciled in Australia.

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

Basis of Preparation

Reporting Basis and Conventions

The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

(a) Principles of Consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Clarius Group Limited as at 30 June 2009 and the results of all subsidiaries for the year ended 30 June 2009. Clarius Group Limited and its subsidiaries are collectively referred to in this financial report as the consolidated entity.

Subsidiaries are all those entities (including special purpose entities) over which the consolidated entity has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the consolidated entity controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are deconsolidated from the date that control ceases.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the consolidated entity. Minority interest in the results and equity of subsidiaries are shown separately in the consolidated income statement and balance sheet respectively. Investments in subsidiaries are accounted for at cost in the individual financial statements of Clarius Group Limited.

Intercompany transactions, balances and unrealised gains on transactions between entities comprising the consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity.

(b) Revenue

Revenue is measured at the fair value of the consideration received or receivable. The consolidated entity recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the consolidated entity activities as described below.

Revenue is recognised for the major business activities as follows:

(i) Contracting Revenue

Contracting revenue is brought to account when the services are provided. Services provided but not yet billed are taken up as accrued revenue.

(ii) Permanent Recruitment Revenue

Permanent recruitment revenue is brought to account on the following basis:

Executive positions – on signing of the contract of employment by each party

Administration positions – on start date of the employee

(iii) Payroll Services

Where the consolidated entity provides only payroll services to clients, only the fee derived is accounted for in revenue.

(iv) Interest Income

Interest income is recognised on a time proportion basis using the effective interest method. When a receivable is impaired, the consolidated entity reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loans is recognised using the original effective interest rate.

(v) Dividends

Dividends are recognised as revenue when the right to receive payment is established.

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Clarius Annual Report 2009– Ready for Growth 31

(c) Income Tax

The charge for current income tax expense is based on profit for the year adjusted for any non-assessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the consolidated entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by law.

Tax Consolidation Legislation

Clarius Group Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under the Tax Consolidation Regime.

The head entity, Clarius Group Limited and the controlled entities in the tax consolidated group continue to account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a stand alone taxpayer in its own right.

In addition to its own current and deferred tax amounts, Clarius Group Limited also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from the controlled entities in the tax consolidated group.

Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable from or payable to other entities in the consolidated entity. Details about the tax funding agreement are disclosed in note 6.

(d) Employee Benefits

Provision is made for the Company’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits expected to be settled within one year together with entitlements arising from wages and salaries and annual leave which will be settled after one year, have been measured as the amounts expected to be

paid when the liability is settled, plus related on-costs. Other employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

Contributions are made by the consolidated entity to employee superannuation funds and are charged as expenses when incurred.

Share Based Payments

The fair value of options granted is recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to the options.

The fair value at grant date is independently determined using the American option call pricing model that takes into account the exercise price, the term of the option, the vesting and performance criteria, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.

The employee benefits expense recognised in the equity reserve is based on the revised number of options that have vested as at balance date. The impact of the revision to original estimates, if any, is recognised in the income statement with a corresponding adjustment to equity.

Termination Benefits

Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The consolidated entity recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after reporting date are discounted to present value.

(e) Leases

Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership, are transferred to the consolidated entity are classified as finance leases. Finance leases are capitalised, recording an asset and a liability equal to the present value of the minimum lease payments, including any guaranteed residual values. Leased assets are amortised over their estimated useful lives. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

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

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32 Clarius Annual Report 2009 – Ready for Growth

(f) Intangible Assets

(i) Candidate Databases and Logos

Candidate databases and logos represent the consolidated entity’s candidate databases that were acquired. These assets are recorded at their respective cost of acquisition, which were supported by independent valuations performed immediately prior to the respective acquisitions.

The candidate databases represent accumulated private and proprietary information regarding the technical resource base of the various businesses. They are amortised on a straight line basis over a period of two years from the date of acquisition.

The only candidate databases recorded in the balance sheet are those that were purchased. Therefore, the candidate databases for the Candle ICT division in New South Wales and Australian Capital Territory, which were not purchased, have not been recorded.

The candidate databases are constantly updated as an integral part of the business and are the major basis for the generation of revenue and profit. All costs incurred in maintaining, upgrading and improving the candidate databases are expensed as incurred.

(ii) Goodwill

Goodwill is recorded initially at the amount by which the purchase price for a business exceeds the fair value attributed to its net assets at the date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill acquired in business combinations is not amortised. Instead, goodwill is tested at each balance date for impairment or more frequently if events or changes in circumstances indicate that it might be impaired, and carried at cost less accumulated impairment losses.

(iii) Software Development Costs

Software development costs are capitalised where future benefits are expected to contribute to a future period financial benefit through revenue generation and/or cost reduction. Otherwise such costs are expensed in the period in which they are incurred. Capitalised software development costs include external direct cost of materials and services, direct payroll and payroll related costs of every employee’s time spent on the project. These costs are amortised on the basis of the expected useful life of the software.

Unamortised costs are reviewed at each balance date to determine the amount (if any) that is no longer recoverable. Any amount so identified is written off.

(g) Business Combinations

The purchase method of accounting is used to account for all business combinations, including business combinations involving entities or businesses under common control, regardless of whether equity instruments or other assets are acquired. Cost is measured as the fair value of the assets

given, shares issued, or liabilities incurred or assumed at the date of exchange plus costs directly attributable to the acquisition. Where equity instruments are issued in an acquisition, the fair value of the instruments is their published market price at the date of exchange. Transaction costs arising on the issue of equity instruments are recognised directly in equity.

Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The excess of the cost of acquisition over the fair value of the net assets acquired is recorded as goodwill.

Where settlement of any part of the cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

(h) Plant and Equipment

Plant and equipment is brought to account at cost less, where applicable, any accumulated depreciation or amortisation. The carrying amount of property, plant and equipment is reviewed annually to ensure it is not in excess of the recoverable amount from these assets.

The recoverable amount is assessed on the basis of the expected net cash flows which will be received from the assets’ employment and subsequent disposal. The expected net cash flows have not been discounted to their present values in determining recoverable amounts.

The depreciable amount of all fixed assets, including capitalised leased assets is depreciated over their useful lives to the consolidated entity commencing from the time the asset is held ready for use. Leasehold improvements are amortised over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. The cost method of accounting is used for all acquisitions of assets regardless of whether shares or other assets are acquired. Cost is determined as the fair value of the consideration at the date of acquisition plus costs incidental to the acquisition.

The gain or loss on disposal of all fixed assets, is determined as the difference between the carrying amount of the asset at the time of disposal and the proceeds of disposal, and is included in operating profit before income tax of the consolidated entity in the year of disposal.

The depreciation rates and methods used for each class of depreciable assets are:

	Class of Asset	Rate	Method
	Plant & Equipment	9% - 37.5%	Diminishing Value
	Leasehold Improvements	11% - 50%	Straight Line/ Diminishing Value

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Clarius Annual Report 2009– Ready for Growth 33

(i) Impairment of Assets

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment or more frequently if events or changes in circumstances indicate that they might be impaired.

Other assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).

(k) Cash and Cash Equivalents

For the purpose of the statement of cash flows, cash includes:

(i) cash on hand and at call deposits with banks or financial institutions, net of bank overdrafts; and
(ii) investments in money market instruments with less than 14 days to maturity.
(iii) bank overdrafts are shown within borrowings in current liabilities on the balance sheet.

(l) Rounding of Accounts

The Company has applied the relief available under ASIC Class Order 98/100 and accordingly, amounts in the financial report and Directors’ report have been rounded to the nearest thousand dollars.

(j) Foreign Currency Transactions and Balances

(i) Functional and Presentation Currency

Items included in the financial statements of each of the entities that make up the consolidated entity are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Australian dollars, which is Clarius Group Limited’s functional and presentation currency.

(ii) Transactions and Balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

(iii) Clarius Group Limited Group Companies

The results and financial position of all the entities making up the consolidated entity (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

(m) Trade Receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Trade receivables are generally due for settlement within 30 days.

Recoverability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for impairment of trade receivables is established when there is objective evidence that the consolidated entity will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will become insolvent, and default or delinquency in payments outside the trading terms are considered indicators that the trade receivable is impaired. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to short term receivables are not discounted if the effect of discounting is immaterial.

The amount of the provision is recognised in the income statement in other expenses. When a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in the income statement.

income and expenses for each income statement are translated at average exchange rates unless this is not a reasonable approximation of the accumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions; and
all resulting exchange differences are recognised as a separate component of equity.

Goodwill and fair value adjustments arising from the acquisition of a foreign entity are treated as assets and liabilities of a foreign entity and translated at the closing rate.

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34 Clarius Annual Report 2009 – Ready for Growth

(n) Financial Instruments

Classification

The consolidated entity classifies its financial assets in the following categories: loans and receivables and heldto-maturity investments. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition.

(i) Loans and Receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the consolidated entity provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in the current assets, except for those with maturities greater than 12 months after balance sheet date which are classified as non-current assets. Loans and receivables are included in receivables in the balance sheet.

(o) Provisions

Provisions are recognised when the consolidated entity has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cashflows estimated to settle the present obligation, its carrying amount is the present value of those cashflows. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability.

(p) Dividends

A provision is recognised for dividends when they have been declared, determined or publicly recommended by the Directors on or before the end of the year but not distributed at balance date.

(ii) Held-to-Maturity Investments

Available for sale financial assets, comprising principally investments in subsidiaries, are non derivatives that are either designated in this category or not classified in any other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the reporting date. Investments are designated as available for sale if they do not have fixed maturities and fixed or determinable payments and management intends to hold them for the medium to long term.

Recognition and Derecognition

Regular purchases and sales of financial assets are recognised on trade-date - the date on which the consolidated entity commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership.

Subsequent Measurement

Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method.

Impairment

The consolidated entity assesses at each balance date whether there is objective evidence that a financial asset or group of financial assets is impaired. If there is evidence of impairment for any of the consolidated entity’s financial assets carried at amortised cost, the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, excluding future credit losses that have not been incurred. The cash flows are discounted at the financial asset’s original effective interest rate. The loss is recognised in the income statement.

(q) Financial Liabilities

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

(r) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST. The GST components of cashflows arising from investing or financing activities which are recoverable from or payable to the taxation authority are presented as operating cashflows.

(s) Earnings per Share

(i) Basic Earnings per Share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the year, adjusted for bonus elements in ordinary shares issued during the year.

(ii) Diluted Earnings per Share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the dilutive effect of outstanding employee options. The adjustment takes account of the weighted average income tax effect of interest and other associated financing costs.

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Clarius Annual Report 2009– Ready for Growth 35

(t) Critical Accounting Estimates and Judgements

(i) Estimated Impairment of Goodwill

The consolidated entity tests at each balance date whether goodwill has suffered any impairment, in accordance with the accounting policy in note 1(f). The recoverable amounts of cash generating units have been determined based on value-in-use calculations. These calculations require the use of assumptions. Refer to note 18 for details of these assumptions.

(ii) Income Taxes

The consolidated entity is subject to income taxes in Australia and jurisdictions where it has foreign operations. Significant judgement is required in determining the consolidated entity’s provision for income taxes. The consolidated entity recognises liabilities for anticipated tax based on estimates of whether any additional taxes are due.

(iii) Impairment of Receivables / Provision of Bad Debts Included in trade receivables is an allowance for doubtful debt. At reporting date this amount represents balances that are uncertain in relation to collectability however it is expected that the amounts will be recovered.

(u) Segment Reporting

A business segment is identified for a group of assets and operations engaged in providing services that are subject to risks and returns that are different to those of other business segments. A geographical segment is identified when services are provided within a particular economic environment subject to risks and returns that are different from those of segments operating in other economic environments.

(v) New Accounting Standards and Interpretations

Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2009 reporting periods. The consolidated entity’s and parent entity’s assessment of the impact of these new standards and interpretations is set out below:

(i) AASB 8 Operating Segments and AASB 2007-3 Amendments to Australian Accounting Standards arising from AASB 8 (effective from 1 January 2009)

AASB 8 will result in a significant change in the approach to segment reporting, as it requires adoption of a “management approach” to reporting on financial performance. The information being reported will be based on what the key decision makers use internally for evaluating segment performance and deciding how to allocate resources to operating segments. The consolidated entity will adopt AASB 8 from 1 July 2009. It is likely to result in an increase in the number of reportable segments presented. In addition, the segments will be reported in a manner that is more consistent with the internal reporting provided to the chief operating

decision-maker. As goodwill is allocated by management to groups of cash-generating units on a segment level, the change in reportable segment may also require a reallocation of goodwill. However, this is note expected to result in any additional impairment of goodwill.

(ii) Revised AASB 123 Borrowing Costs and ASSB 2007-6 Amendments to Australian Accounting Standards arising from AASB 8 (effective from 1 January 2009)

The revised AASB 123 has removed the option to expense all borrowing costs and – when adopted – will require the capitalisation of all borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset. There will be no impact on the financial report of the consolidated entity.

(iii) Revised AASB 101 Presentation of Financial Statements and AASB 2007-8 Amendments to Australian Accounting Standards arising from AASB 101 (effective from 1 January 2009)

The September 2007 revised AASB 101 requires the presentation of a statement of comprehensive income and makes changes to the statement of changes in equity, but will not affect any of the amounts recognised in the financial statements. If an entity has made a prior period adjustment or has reclassified items in the financial statements, it will need to disclose a third balance sheet (statement of financial position), this one being as at the beginning of the comparative period. The consolidated entity will apply the revised standard from 1 July 2009.

(iv) AASB 2008-1 Amendments to Australian Accounting Standard – Share-based Payments: Vesting Conditions and Cancellations (effective from 1 January 2009)

AASB 2008-1 clarifies that vesting conditions are service conditions and performance conditions only and that other features of a share-based payment are not vesting conditions. It also specifies that all cancellations, whether by the entity or by other parties, should receive the same accounting treatment. The consolidated entity will apply the revised standard from 1 July 2009, but it is not expected to affect the accounting for the consolidated entity’s share-based payments.

(v) Revised AASB 3 Business Combinations, AASB 127 Consolidated and Separate Financial Statements and AASB 2008-3 Amendments to Australian Accounting Standards arising from AASB 3 and AASB 127 (effective 1 July 2009)

The revised AASB 3 continues to apply the acquisition method to business combinations, but with some significant changes. For example, all payments to purchase a business are to be recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently remeasured through the income statement. There is a choice on an acquisition-byacquisition basis to measure the non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. All acquisition-related costs must be expensed.

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36 Clarius Annual Report 2009 – Ready for Growth

(v) New Accounting Standards and Interpretations (continued)

This is different to the consolidated entity’s current policy which is set out in note 1(g) above.

The revised AASB 127 requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses, see note 1(a). The standard also specifies the accounting when control is lost. Any remaining interest in the entity is remeasured to fair value, and a gain or loss is recognised in profit or loss. This is consistent with the consolidated entity’s current accounting policy if significant influence is not retained. The consolidated entity will apply the revised standards prospectively to all business combinations and transactions with non-controlling interests from 1 July 2009.

(vi) AASB 2008 – 6 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project (effective 1 July 2009)

The amendments to AASB 5 Discontinued Operations and AASB 1 First-Time Adoption of Australian-Equivalents to International Financial Reporting Standards are part of the IASB’s annual improvements project published in May 2008. They clarify that all of a subsidiary’s assets and liabilities are classified as held for sale if a partial disposal sale plan results in loss of control. Relevant disclosures should be made for this subsidiary if the definition of a discontinued operation is met. The consolidated entity will apply the amendments prospectively to all partial disposals of subsidiaries from 1 July 2009.

(vii) AASB 2008-7 Amendments to Australian Accounting Standards - Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate (effective 1 July 2009)

In July 2008, the AASB approved amendments to AASB 1 First-time Adoption of International Financial Reporting Standards and AABS 127 Consolidated and Separate Financial Statements. The consolidated entity will apply the revised rules prospectively from 1 July 2009. After that date, all dividends received from investments in subsidiaries, jointly controlled entities or associates will be recognised as revenue, even if they are paid out of pre-acquisition profits, but the investments may need to be tested for impairment as a result of the dividend payment. Under the entity’s current policy, these dividends are deducted from the cost of the investment. Furthermore, when a new intermediate parent entity is created in internal reorganisations it will measure its investment in subsidiaries at the carrying amounts of the net assets of the subsidiary rather than the subsidiary’s fair value.

(viii) AASB 2008-8 Amendment to IAS 39 Financial Instruments: Recognition and Measurement (effective 1 July 2009)

AASB 2008-8 amends AASB 139 Financial Instruments: Recognition and Measurement and must be applied retrospectively in accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors. The amendment makes two significant changes. It prohibits designating inflation as a hedgeable component of a fixed rate debt. It also prohibits including time value in the one-sided hedged risk when designating options as hedges. The consolidated entity will apply the amended standard from 1 July 2009. It is not expected to have a material impact on the consolidated entity’s financial statements.

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Clarius Annual Report 2009– Ready for Growth 37

2. Financial Risk Management

The Board of the Company has a formally constituted Board Audit, Risk and Compliance Committee (the “Committee”). This Committee operates under a charter approved by the Board. Its objectives are to assist the Board in safeguarding integrity in financial reporting; making timely and balanced disclosure to shareholders and potential shareholders in accordance with the principles of continuous disclosure; and recognising and managing risk.

In meeting these objectives, the Committee is responsible for, among other matters, identifying, monitoring and assessing the consolidated entity’s internal control frameworks and risk management strategies and processes in relation to such specific risks associated with financial, economic, operational, compliance, intellectual capital, security and human capital.

The risks of the consolidated entity are periodically assessed and the Committee, with management, agree on risk mitigation strategies including monitoring and reporting.

In regard to financial risk, the consolidated entity has identified potential exposure to:

Market Risk (including foreign exchange risk and interest rate risk);
Credit Risk; and
Liquidity Risk

The consolidated entity uses a variety of methods to measure these financial risks including sensitivity analysis for market risks, ageing analysis and pre-trade credit assessment for credit risks and cashflow forecasting and debt covenant monitoring for liquidity risks.

The consolidated entity and the parent entity hold the following financial instruments:

	Consolidated Parent Entity
	Note 2009 $000 2008 $000 2009 $000 2008 $000
Financial Assets:
Cash and cash equivalents	12 2,701 3,484 1,670 532
Trade receivables	13 37,001 48,483 23,038 28,354
Accrued income	13 12,485 13,771 12,262 13,355
Loans to subsidiaries	13 - - 49,725 33,488
Other fnancial assets	16 - - 12,828 19,074
	52,187 65,738 99,523 94,803
Financial Liabilities:
Trade payables	19 21,534 36,210 16,421 21,410
Borrowings	11 15,639 17,085 15,000 16,562
	37,173 53,295 31,421 37,972

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38 Clarius Annual Report 2009 – Ready for Growth

(a) Market Risk

Foreign Exchange Risk

The consolidated entity and the parent entity operate internationally and are exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the New Zealand dollar, the Chinese renminbi, Hong Kong dollar, Singapore dollar, Malaysian ringgit and occasionally the US dollar.

The primary foreign exchange risk arises from loans to foreign subsidiaries. The parent entity has made foreign denominated loans to foreign subsidiaries for the purpose of acquiring foreign operations in Asia and New Zealand. The value of the loans to the foreign subsidiaries vary with variations in currency rates. Exchange movements are recognised in the income statement when the loans or part thereof have been realised.

Occasionally a minority of trade receivables, particularly in the Asian subsidiaries are denominated in a currency that is not the individual entity’s functional currency. At balance date all trade receivables were held in the individual entity’s functional currency. The foreign exchange risk is measured using sensitivity analysis.

On consolidation, the value of net assets of foreign subsidiaries vary with exchange movements.

The following table represents balances held within the consolidated entity that are not held in an individual entity’s functional currency. Amounts are stated in Australian dollar equivalents converted at exchange rates at balance date.

	30 June 2009
	HKD $000 NZD $000 CNY $000 SNG $000 MYR $000
Trade Receivables	- - - - -
Loans to foreign Subsidiaries from Parent Entity	8,013 3,116 - - -
Net Loans between Subsidiaries	437 - - - -
Net Assets of foreign subsidiaries on consolidation	(238) 1,782 808 24 (44)
	8,212 4,898 808 24 (44)

Consolidated Entity Sensitivity

The following table represents the impact of changes in different currencies against the Australian dollar on the consolidated entity’s net profit after tax and equity reserve.

	30 June 2009
	Impact of 10% Increase of AUD against foreign currencies on consolidated balances
	HKD $000 NZD $000 CNY $000 SNG $000 MYR $000
Loans to foreign Subsidiaries from Parent Entity	(728) (283) - - -
Net Assets of foreign subsidiaries on consolidation	22 (162) (73) (2) 4
Impact on Net Proft After Tax on consolidation	(14) (36) (35) (14) (7)

30 June 2009	30 June 2009
Impact of 10% (Decrease) of AUD against foreign currencies on consolidated balances HKD $000 NZD $000 CNY $000 SNG $000 MYR $000
	HKD $000 NZD $000 CNY $000 SNG $000 MYR $000
Loans to foreign Subsidiaries from Parent Entity	890 346 - - -
Net Assets of foreign subsidiaries on consolidation	(26) 198 90 3 (5)
Impact on Net Proft After Tax on consolidation	17 44 43 17 8

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Clarius Annual Report 2009– Ready for Growth 39

Cash Flow and Fair Value Interest Rate Risk

The consolidated entity’s main interest rate risk arises from the parent entity borrowings followed by potential utilisation of overdraft facilities in the Hong Kong and New Zealand subsidiaries.

For the parent borrowing facilities, the policy is to utilise a combination of its commercial bill and overdraft facilities to minimise its interest costs whilst maintaining the flexibility to accommodate short term working capital requirements that vary in particular with the on-hired labour funding cycle. By converting overdraft debt to commercial bill debt, interest rates effectively are converted from variable rates to fixed rates.

As at the reporting date, the consolidated entity had the following variable rate borrowings:

	30 June 2009 30 June 2008
	Note Weighted Average Interest Rate Balance $000 Weighted Average Interest Rate Balance $000
Bank Overdraft	11 10.5% 639 8.3% 2,085
Commercial Bill	11 4.0% 15,000 7.2% 15,000

The following two tables demonstrate the impact on Net Profit After Tax if the average interest rate had either increased or decreased by 1% over the whole year ending 30 June 2009.

Consolidated EntitySensitivity	30 June 2009		30 June 2008
	1% Increase in	1% Decrease in	1% Increase in	1% Decrease in
	Average Interest	Average Interest	Average Interest	Average Interest
	Rate	Rate	Rate	Rate
	$000	$000	$000	$000
Impact on Net Proft After Tax	(191)	191	(139)	139
Parent EntitySensitivity	30 June 2009		30 June 2008
	1% Increase	1% Decrease in	1% Increase in	1% Decrease in
	in Interest Rate	Interest Rate	Interest Rate	Average Interest
	$000	$000	$000	Rate
				$000
Impact on Net Proft After Tax	(187)	187	(137)	137

Price Risk

The consolidated entity does not hold any investments in equities or commodities and is therefore not subject to price risk for any recognised financial assets.

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40 Clarius Annual Report 2009 – Ready for Growth

(b) Credit Risk

Credit risk is managed on a group basis. Credit risk arises from credit exposures to customers accounts receivable balances. Independent credit assessments are used for all new customers and only those with a “low risk of default” rating are accepted. If there is insufficient credit history to give an accurate rating, other factors such as assessment of financial position, nature of proposed transactions and directors personal guarantees are considered. Compliance to credit limits is monitored internally by the consolidated entity’s finance executives. Receivables reports are submitted to the Board of Directors regularly for review.

The consolidated entity maintains standard credit terms in its terms and conditions. Some preferred supplier agreements dictate longer payment terms however the credit risk remains unaffected.

The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short term nature and relative compliance with credit terms. At balance date, examination of the consolidated trade debtors ledger reveals no reason for an impairment adjustment.

The following table demonstrates the consolidated entity’s aged receivables at balance date aged from their due dates.

Consolidated Entity Receivables

Consolidated Entity Receivables
Consolidated Entity Receivables	30 June 2009
	Current 30 Days $000 60 Days $000 90 Days $000 Total $000
	26,738 4,844 4,061 1,476 37,119
	72% 13% 11% 4% 100%

Parent Entity Receivables

Parent Entity Receivables	30 June 2009
	Current 30 Days $000 60 Days $000 90 Days $000 Total $000
	18,172 1,844 2,204 835 23,055
	79% 8% 9% 4% 100%

Management have reviewed all trade receivables that are currently held in the trade receivables ledger that are outside trade terms and are satisfied that adequate provisions have been made. Refer to note 13.

(c) Liquidity Risk

The consolidated entity manages liquidity risk by continuously monitoring forecast and actual cash flows. Due to the nature of on-hired labour working capital requirements, the group treasury function aims to maintain a balance of flexibility and cost effective cash flow funding.

Compliance with debt covenants are monitored as part of the cash flow management process.

Refer to note 11 Cash Flow information for a summary of credit facilities both available and utilised as at balance date.

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Clarius Annual Report 2009– Ready for Growth 41

3. Segment Reporting

(a) Segments

(a) Segments
	Australia		New	Zealand		Asia	Consolidated
	2009	2008	2009	2008	2009	2008	2009	2008
Geographic Segments	$000	$000	$000	$000	$000	$000	$000	$000
Revenue
External sales	278,140	302,194	8,231	10,385	6,779	8,404	293,150	320,983
Other revenue	261	293	24	150	3	3	288	446
Total segment revenue	278,401	302,487	8,255	10,535	6,782	8,407	293,438	321,429
Result
Segment result before tax and
Intercompany charges	(1,686)	14,370	29	1,059	(5,631)	957	(7,288)	16,386
Intercompany charges	436	492	(436)	(492)	-	-	-	-
Segment result before taxation	(1,250)	14,862	(407)	567	(5,631)	957	(7,288)	16,386
Income tax expenses							(1,034)	(5,053)
Net proft for the year							(8,322)	11,333
Segment assets	123,666	133,767	2,820	6,339	(1,528)	8,891	124,958	148,997
Segment liabilities	36,483	53,194	1,039	1,556	1,527	1,312	39,049	56,062
Intercompany balances	11,118	9,180	(3,116)	(3,044)	(8,002)	(6,136)	-	-
Net assets							85,909	92,935
Acquisitions of non-current
segment assets	(246)	1,058	23	(75)	78	17	(145)	1,000
Depreciation and
amortisation expense	1,096	1,326	43	43	117	63	1,256	1,432
Impairment of goodwill	6,290	-	-	-	3,830	-	10,120	-

(b) Segment Accounting Policies

Segment information is prepared in accordance with the accounting policies of the entity as disclosed in note 1(u) and accounting standard AASB 114: Segment Reporting. During the year, there were no changes in segment accounting policies that had a material effect on the segment information.

(c) Income

The consolidated entity derived income from the provision of contract and temporary personnel to and recruitment services for business and Government in Australia and New Zealand and Asia.

(d) Inter-Segment Transactions

The pricing of inter-segment transactions is the same as prices charged on transactions with parties outside the consolidated entity. Such transactions are eliminated on consolidation.

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42 Clarius Annual Report 2009 – Ready for Growth

4. Revenue

	Consolidated Parent Entity
	Note 2009 $000 2008 $000 2009 $000 2008 $000
From continuing operations:
Sales revenue	293,150 321,085 190,333 228,785
Interest received	4 (a) 41 55 415 446
	293,191 321,140 190,748 229,231

Other revenue:
Software royalties	247 289 247 290
Dividend from wholly-owned subsidiary	- - 8,651 6,523
	247 289 8,898 6,813
Total revenue	293,438 321,429 199,646 236,044

(a) Interest Revenue

(a) Interest Revenue
	Consolidated Parent Entity
	Note 2009 $000 2008 $000 2009 $000 2008 $000
Interest revenue receivable from:
Wholly owned subsidiaries	- - 414 442
Other persons	41 55 1 4
Total interest revenue	41 55 415 446

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Clarius Annual Report 2009– Ready for Growth 43

5. Expenses

Profit before income tax includes the following specific expenses:

Proft before income tax includes the following specifc expenses:
	Consolidated Parent Entity
	2009 $000 2008 $000 2009 $000 2008 $000
Finance costs: Other persons	1,437 1,488 1,362 1,443
Total borrowing costs and expenses	1,437 1,488 1,362 1,443
Depreciation of non-current assets Plant and equipment	585 786 284 411
Amortisation of non-current assets
Leasehold improvements	351 350 167 174
Capitalised computer software	210 197 133 158
Candidate databases	110 99 - -
Total amortisation	671 646 300 332
Total depreciation and amortisation expense	1,256 1,432 584 743
Bad and doubtful debts Trade debtors	359 (43) 100 (9)

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44 Clarius Annual Report 2009 – Ready for Growth

6. Income Tax Expense

	Consolidated Parent Entity
	Note 2009 $000 2008 $000 2009 $000 2008 $000
Current tax Deferred tax	326 5,476 439 3,311 708 (423) 607 100
	1,034 5,053 1,046 3,411
Deferred income tax expense included in income tax expense comprises:
Decrease / (Increase) in deferred tax assets	14 752 (479) 607 100
(Decrease) / Increase in deferred tax liabilities	20 (44) 56 - -
	708 (423) 607 100
The prima facie tax on proft before income tax is reconciled to the income tax as follows:
Prima facie tax payable on proft before income tax at 30%
Consolidated	(2,186) 4,916 - -
Parent entity	- - 1,717 2,873
	(2,186) 4,916 1,717 2,873
Add tax effect of:
Impairment	2,534 30 (671) -
Other non-allowable items	460 164 - 160
Tax rate adjustment on wholly-owned subsidiaries	226 (57) - -
Less tax effect of:
Non-taxable unrealised exchange loss/(gain) on loan to controlled entity	- - - 378

Total income tax expense	1,034 5,053 1,046 3,411

Tax Consolidation Legislation

Clarius Group Limited and its wholly owned Australian controlled entities have implemented the tax consolidation legislation. The accounting policy in relation to this legislation is set out in note 1(c).

On adoption of the tax consolidation legislation, the entities in the tax consolidated group entered into a tax sharing agreement which, in the opinion of the directors, limits the joint and several liability of the wholly owned entities in the case of a default by the head entity, Clarius Group Limited.

The entities have also entered into a tax compensation deed and a deed of tax sharing under which the wholly-owned entities fully compensate Clarius Group Limited for any current tax payable assumed and are compensated by Clarius Group Limited for any current tax receivable that is transferred to Clarius Group Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the wholly-owned entities’ financial statements.

The amounts receivable/payable under the tax funding agreement are due upon the receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each financial year.

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Clarius Annual Report 2009– Ready for Growth 45

7. Dividends

	Consolidated Parent Entity
	2009 $000 2008 $000 2009 $000 2008 $000
2008 fnal fully franked dividend at 7.0 cents per share (2007 fnal: 10.0 cents per share and a special dividend of 2.0 cents per share)	4,018 5,361 4,018 5,361
2009 interim dividend (2008 interim: 9.0 cents per share)	- 5,086 - 5,086
	4,018 10,447 4,018 10,447
The balance of the franking account at period end adjusted for franking credits arising from payment of income tax payable and excludes payment of proposed dividends	14,070 14,658 14,183 11,064

8. Key Management Personnel Disclosures

The names of the parent entity Directors who have held office during the financial year are:

Geoffrey J Moles	Managing Director
Lawrence J Gibbs	Non-executive Chairman
Peter D Bunting	Non-executive Director
Penelope Morris	Non-executive Director
Diana J Eilert	Managing Director	Ceased employment effective 3 Nov 2008

The names of the persons who had authority and responsibility for planning, directing and controlling the activities of the consolidated entity directly or indirectly who held office during the financial year are:

Kym L Quick	Executive General Manager – Lloyd Morgan Australia
Paul A Barbaro	Executive General Manager – Alliance Recruitment
Kerryn L Divall	General Manager, Finance
David M Stewart	Chief Executive Offcer – Candle ICT
Gregory M Smith	Executive General Manager – Lloyd Morgan Australia	Ceased employment effective 15 December 2008
David A Marshall	Chief Financial Offcer	Ceased employment effective 1 December 2008
Jane A Bianchini	Executive General Manager – Candle ICT	Ceased employment effective 12 September 2008

The Company has taken advantage of the relief provided by the Corporations Amendment Regulations 2006 (no 4) and has transferred the detailed remuneration disclosures to the directors’ report. The relevant information can be found in the remuneration report on pages 17-21.

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46 Clarius Annual Report 2009 – Ready for Growth

Option Holdings

The number of options over ordinary shares in the Company held during the financial year by each director of Clarius Group Limited and other key management personnel of the consolidated entity, including their personally related parties, are set out below.

	Balance				Balance	Vested
	01/07/2008	Granted	Exercised	Other Change	30/06/2009	30/06/2009
Directors
Geoffrey J Moles	-	-	-	-	-	-
Lawrence J Gibbs	-	-	-	-	-	-
Peter D Bunting	-	-	-	-	-	-
Penelope Morris	-	-	-	-	-	-
Diana J Eilert(1)	2,100,000	-	-	(2,100,000)	-	-
Key Management	Personnel
Kym L Quick	930,000	300,000	-	(30,000)	1,200,000	-
Paul A Barbaro	700,000	300,000	-	-	1,000,000	-
Kerryn L Divall	15,000	80,000	-	-	95,000	-
David M Stewart	-	400,000	-	-	400,000	-
Jane A Bianchini(2)	700,000	-	-	(700,000)	-	-
David A Marshall(3)	800,000	-	-	(800,000)	-	-
Gregory M Smith(5)	-	200,000	-	(200,000)	-	-
Total	5,245,000	1,280,000	-	(3,830,000)	2,695,000	-

Prior Year

Prior Year
	Balance				Balance	Vested
	01/07/2007	Granted	Exercised	Other Change	30/06/2008	30/06/2008
Directors
Geoffrey J Moles	-	-	-	-	-	-
Lawrence J Gibbs	-	-	-	-	-	-
Peter D Bunting	-	-	-	-	-	-
Penelope Morris	-	-	-	-	-	-
Diana J Eilert(1)	-	2,100,000	-	-	2,100,000	-
Robert Collins(6)	1,800,000	-	(1,800,000)	-	-	-
Key Management	Personnel
Kym L Quick	771,000	200,000	(41,000)	-	930,000	163,333
Paul A Barbaro	500,000	200,000	-	-	700,000	-
Kerryn L Divall	-	15,000	-	-	15,000	-
David M Stewart	-	-	-	-	-	-
Jane A Bianchini(2)	500,000	200,000	-	-	700,000	-
David A Marshall(3)	-	800,000	-	-	800,000	-
Mark A Langan(4)	343,334	-	(143,334)	(200,000)	-	-
Gregory M Smith(5)	-	-	-	-	-	-
Total	3,914,334	3,515,000	(1,984,334)	(200,000)	5,245,000	163,333

Further information regarding the option plan is set out in note 27.

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Clarius Annual Report 2009– Ready for Growth 47

Shareholdings

Shareholdings
	Balance	Received as	Options		Balance
	01/07/2008	Remuneration	Exercised	Other Movement	30/06/2009
Directors
Geoffrey J Moles	1,325,324	-	-	1,644,966	2,970,290
Lawrence J Gibbs	49,238	-	-	2,947	52,185
Peter D Bunting	7,500	-	-	-	7,500
Penelope Morris	40,000	-	-	-	40,000
Diana J Eilert (1)	200,000	-	-	(200,000)	-
Key Management Personnel
Kym L Quick	-	-	-	-	-
Paul A Barbaro	-	-	-	-	-
Kerryn L Divall	-	-	-	-	-
David M Stewart	-	-	-	-	-
Jane A Bianchini (2)	-	-	-	-	-
David A Marshall (3)	-	-	-	-	-
Gregory M Smith (5)	5,000	-	-	(5,000)	-
Total	1,627,062	-	-	1,442,913	3,069,975

Prior Year

Prior Year
	Balance	Received as	Options		Balance
	01/07/2007	Remuneration	Exercised	Other Movement	30/06/2008
Directors
Geoffrey J Moles	1,796,825	-	-	(471,501)	1,325,324
Lawrence J Gibbs	45,275	-	-	3,963	49,238
Peter D Bunting	7,500	-	-	-	7,500
Penelope Morris	-	-	-	40,000	40,000
Diana J Eilert(1)	-	-	-	200,000	200,000
Robert Collins(6)	1,393,500	-	1,800,000
Key Management Personnel
Kym L Quick	-	-	41,000	(41,000)	-
Paul A Barbaro	-	-	-	-	-
Kerryn L Divall	-	-	-	-	-
David M Stewart	-	-	-	-	-
Jane A Bianchini(2)	2,653	-	-	(2,653)	-
David A Marshall(3)	-	-	-	-	-
Mark A Langan(4)	-	-	143,334	(143,334)	-
Gregory M Smith(5)	-	-	-	5000	5,000
Total	3,245,753	-	1,984,334	(3,603,025)	1,627,062

(1) Ceased employment effective 3 November, 2008 (4) Ceased employment effective 29 February, 2008 (2) Ceased employment effective 12 September, 2008 (5) Ceased employment effective 15 December, 2008 (3) Ceased employment effective 1 December, 2008 (6) Ceased employment effective 28 August, 2007

Other Transaction with Directors

There were no other transactions with Directors during the current financial year.

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48 Clarius Annual Report 2009 – Ready for Growth

9. Remuneration of Auditors

During the year, the following fees were paid or were payable for services provided by the auditor of the parent entity, its related practices and non-related audit firms:

	Consolidated Parent Entity
	2009 $ 2008 $ 2009 $ 2008 $
Remuneration of the auditor of the parent entity WHK Horwath Sydney for:
Auditing or reviewing the fnancial report	160,000 131,430 160,000 131,430
Taxation services	32,000 17,170 32,000 17,170
Business services	10,915 26,650 10,915 26,650
	202,915 175,250 202,915 175,250
Remuneration of other auditors unrelated to WHK Horwath Sydney of subsidiaries for: Auditing or reviewing the fnancial report of subsidiaries	94,573 97,799 - -

10. Earnings Per Share

	Consolidated 2009 cents 2008 cents
Basic earnings per share	(14.0) 20.3
Diluted earnings per share	(12.1) 19.0

(a) Reconciliation of Earnings used in Calculating Earnings Per Share

(a) Reconciliation of Earnings used in Calculating Earnings Per Share
	Consolidated
	2009 $000 2008 $000
Net proft (loss) after tax used in calculating basic earnings per share	(8,322) 11,333

Adjustments for calculation of diluted earnings per share: Interest earned on conversion of options	362 764
Netproft used in calculatingdiluted earningsper share	(7,960) 12,097

(b) Weighted Average Number of Shares used as the Denominator

	Consolidated
	2009 $000 2008 $000
Weighted average number of ordinary shares outstanding during the year used in the calculation of basic EPS	59,640 55,870
Adjustment for calculation of diluted earnings per share: Weighted average number of options	6,374 7,827
Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating diluted earnings per share	66,014 63,697

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Clarius Annual Report 2009– Ready for Growth 49

(c) Classification of Securities

Options granted to employees under the Employee Share Option Plan are considered to be potential ordinary securities and have been included in the determination of diluted earnings per share to the extent to which they are dilutive. The options have not been included in the determination of basic earnings per share. Details relating to the options are set out in note 27.

11. Cash Flow Information

(a) Reconciliation of Profit after Tax to Net Cash Flow from Operating Activities

	Consolidated Parent Entity
	2009 $000 2008 $000 2009 $000 2008 $000
Proft (loss) for the year Non-cash fows in operating proft:	(8,322) 11,333 4,678 7,424
Depreciation and amortisation	1,146 1,432 584 743
Impairment of Investments	10,194 - 6,259 -
Non-cash employee benefts expense – share based payments	129 417 129 417
Loss on Disposal of investment	- - 31 -
Unrealised foreign exchange movements on loan	- - - (1,258)
Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries:
(Increase) / Decrease in trade debtors and accrued income	12,944 (12,466) 5,315 547
(Increase) / Decrease in prepayments and accrued income	55 99 1,166 82
Increase / (Decrease) in trade creditors and accruals	(7,118) 1,022 (3,920) (3,596)
Increase / (Decrease) in provisions	(734) 101 (313) (205)
Movement in income taxes payable	(267) (1,845) 2,495 (3,791)
Movement in deferred taxes	338 (424) 607 100
Net cash provided by operating activities	8,365 (331) 17,031 463

(b) Non-Cash Financing and Investing Activities

Share issue – during the year the parent entity issued shares as set out in note 22.

(c) Credit Standby Arrangements with Banks

(c) Credit Standby Arrangements with Banks
	Consolidated Parent Entity
	2009 $000 2008 $000 2009 $000 2008 $000
Bank bill credit facility	15,000 15,000 15,000 15,000
Amount utilised	(15,000) (15,000) (15,000) (15,000)
Unused credit facility	- - - -

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50 Clarius Annual Report 2009 – Ready for Growth

(d) Overdraft Facilities

(d) Overdraft Facilities
	Consolidated Parent Entity
	2009 $000 2008 $000 2009 $000 2008 $000
Overdraft facility	10,838 11,617 9,000 10,000
Amount utilised	(639) (2,085) - (1,562)
Unused overdraft facility	10,199 9,532 9,000 8,438

The credit standby arrangement and parent entity overdraft are subject to half yearly reviews with a term of agreement due for renewal at 30 September 2009.

Bank overdrafts

The current interest rate on the parent overdraft facility is 10.5%. Bank overdraft facilities are arranged with both Australian ($9,000,000AUD), New Zealand ($1,000,000NZD) and Hong Kong banks ($6,500,000HKD) with the general terms and conditions being set out and agreed to on a regular basis. Interest rates are variable and subject to adjustment. Finance will be provided under all facilities provided the consolidated entity, or companies comprising the consolidated entity with overdraft facilities have not breached any borrowing requirements and the required financial ratios are met.

12. Cash and Cash Equivalents

	Consolidated Parent Entity 2009 $000 2008 $000 2009 $000 2008 $000
Cash at bank and on hand	2,523 3,478 1,670 532
Deposits at call	178 6 - -
	2,701 3,484 1,670 532

The deposits are bearing interest rates of 2.5% (2008: 6%). These deposits are at call.

Reconciliation of Cash

The above figures are reconciled to cash at the end of the financial year as shown in the statement of cash flows as follows:

	Consolidated Parent Entity
	2009 $000 2008 $000 2009 $000 2008 $000
Balances as above	2,701 3,484 1,670 532
Bank overdrafts (note 11)	(639) (2,085) - (1,562)
	2,062 1,399 1,670 (1,030)

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Clarius Annual Report 2009– Ready for Growth 51

13. Trade and Other Receivables

	Consolidated Parent Entity
	2009 $000 2008 $000 2009 $000 2008 $000
Current
Trade receivables	37,119 48,650 23,055 28,448
Allowance for doubtful debts	(118) (167) (17) (94)
	37,001 48,483 23,038 28,354

Accrued income	12,485 13,771 12,262 13,355
Amounts receivable from:
Wholly owned subsidiaries	- - 36,811 22,706
Related parties	- - - -
Prepayments	271 327 150 212
Other debtors	377 528 12 24
	50,134 63,109 72,273 64,651
Non-current Amounts receivable from: Controlled entities(1)	- - 12,329 10,782

(1) The parent company has agreed not to call upon these loans where it would be to the detriment of the company or its creditors for at least one year.

(a) Fair Values

The fair value approximates to the carrying value of the non-current receivables.

(b) Interest Rate Risk

The trade and other receivables are non-interest bearing.

(c) Credit and Foreign Exchange Risks

Refer to the disclosure in note 2.

(d) Trade Receivables Aging Analysis

Refer to the disclosure in note 2.

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52 Clarius Annual Report 2009 – Ready for Growth

(e) Movement in the Provision for Impairment of Trade Receivables

	Consolidated
	2009 $000 2008 $000
At July 1	167 224
Provision for impairment recognised during the year	139 167
Receivables written off as uncollectible subsequently recovered	- 43
Unused amount reversed	(188) (267)
	118 167

The creation and release of the provision for impaired receivables has been included in ‘other expenses’ in the income statement. Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash.

(f) Past Due but Not Impaired

	Consolidated Parent Entity
	2009 $000 2008 $000 2009 $000 2008 $000
60 Days	4,061 2,848 2,204 573
90 Days	1,476 1,044 835 159
	5,537 3,892 3,039 732

The other classes within trade and other receivables do not contain impaired assets and are not past due. Based on the credit history of these classes, it is expected that these amounts will be received when due. The Group does not hold any collateral in relation to these receivables.

14. Deferred Tax Assets

	Consolidated Parent Entity
	2009 $000 2008 $000 2009 $000 2008 $000
The balance comprises temporary differences attributable to:
Doubtful debts	22 39 5 28
Employee benefts	537 602 288 361
Provision for make good on leased premises	109 125 68 79
Lease incentive	69 136 - 21
Accruals	1,405 1,953 792 1,271
Losses	333 - - -
	2,475 2,855 1,153 1,760
Movements
Balance at the beginning of the year	2,855 2,376 1,760 1,860
Credited / (charged) to the income statement	(752) 479 (607) (100)
Losses	372 - - -
Balance at the end of the year	2,475 2,855 1,153 1,760

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Clarius Annual Report 2009– Ready for Growth 53

15. Plant and Equipment

	Consolidated Parent Entity
	2009 $000 2008 $000 2009 $000 2008 $000
Plant and equipment, at cost	8,007 8,124 4,605 4,573
Accumulated depreciation	(6,637) (6,470) (3,959) (3,759)
	1,370 1,654 646 814

Leasehold improvements, at cost	3,858 3,887 2,286 2,250
Accumulated amortisation	(3,299) (3,100) (2,270) (2,100)
	559 787 16 150
Total plant and equipment	1,929 2,441 662 964

(a) Movements in Carrying Amounts

(a) Movements in Carrying Amounts
	Plant and Equipment Leasehold Improvements Total
	$000 $000 $000
Consolidated
Balance at the beginning of the year	1,654 787 2,441
Additions	306 123 429
Disposals	(5) - (5)
Depreciation expense	(585) (351) (936)
Carrying amount at the end of the year	1,370 559 1,929
Parent entity
Balance at the beginning of the year	814 150 964
Additions	158 33 191
Disposals	(1) - (1)
Disposal to wholly owned subsidiary under corporate reconstruction	(41) - (41)
Depreciation expense	(284) (167) (451)
Carrying amount at the end of the year	646 16 662

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54 Clarius Annual Report 2009 – Ready for Growth

16. Other Financial Assets

	Consolidated Parent Entity
	2009 $000 2008 $000 2009 $000 2008 $000
Investments comprise: Shares in: Controlled entities at cost	- - 12,828 19,074
Movements in Investments:
Balance at the beginning of the year	- - 19,074 25,234
Additions	- - 87 363
Disposals	- - (74) (6,523)
Impairment write down	- - (6,259) -
Balance at the end of the year	- - 12,828 19,074

17. Subsidiaries

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 1(a):

	Equity Holding(1)
	Country of Incorporation Class of Shares 2009 % 2008 %
Freeman Adams Pty Limited	Australia ordinary 100 100
Candle IT & T Recruitment Pty Limited	Australia ordinary 100 100
Alliance Recruitment Pty Limited	Australia ordinary 100 100
Workskills Professionals Pty Limited	Australia ordinary 100 100
Premier Personnel Pty Limited	Australia ordinary 100 100
Candle Australia Pty Limited	Australia ordinary 100 100
The One Umbrella Pty Limited	Australia ordinary 100 100
Candle Holdings Limited	New Zealand ordinary 100 100
Candle New Zealand Limited	New Zealand ordinary 100 100
Doughty Contractors Limited	New Zealand ordinary 100 100
Candle IT & T Recruitment Limited	New Zealand ordinary 100 100
Choice IT Pty Limited	Australia ordinary 100 100
Lloyd Morgan Sydney Pty Limited	Australia ordinary 100 100
Lloyd Morgan International Pty Limited	Australia ordinary 100 100
Lloyd Morgan (Brisbane) Pty Limited	Australia ordinary 100 100
JAV IT Group Pty Limited	Australia ordinary 100 100
ACN 116 747 409 Pty Limited (formerly Reality Check Pty Limited)	Australia ordinary 100 100
Lloyd Morgan Limited	Hong Kong ordinary 100 100
Lloyd Morgan Hong Kong Limited	Hong Kong ordinary 100 100
Lloyd Morgan Singapore Pty Limited	Singapore ordinary 100 100
Lloyd Morgan Malaysia Sdn Bhd	Malaysia ordinary 100 100
Lloyd Morgan China Limited	China ordinary 89 89

(1) The proportion of ownership interest is equal to the proportion of voting power held.

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Clarius Annual Report 2009– Ready for Growth 55

18. Intangible Assets

	Consolidated Parent Entity
	2009 $000 2008 $000 2009 $000 2008 $000
Candidate databases	2,140 2,140 1,039 1,039
Accumulated amortisation	(1,973) (1,973) (1,037) (1,037)
	167 167 2 2

Capitalised software development costs	2,707 2,422 2,468 2,347
Accumulated amortisation	(2,601) (2,215) (2,360) (2,167)
	106 207 108 180

Goodwill – refer to note 18(a)	67,446 76,734 18,766 21,088
Other intangibles	- - - -
Total intangible assets	67,719 77,108 18,876 21,270

(a) Movements in Carrying Amounts

	Candidate Databases Capitalised Software Costs Goodwill Other Intangibles Total
	$000 $000 $000 $000 $000
Consolidated
Balance at the beginning of the year	167 207 76,734 - 77,108
Additions	- 285 282 - 567
Disposals/Write downs	- - (10,161) - (10,161)
Amortisation expense	- (386) - - (386)
Exchange differences	- - 1,880 - 1,880
Adjustment to contingent purchase price	- - (1,289) - (1,289)
Carryingamount at the end of theyear	167 106 67,446 - 67,719
Parent entity
Balance at the beginning of the year	2 180 21,088 - 21,270
Additions	- 121 - - 121
Disposals/Write downs	- - (2,322) - (2,322)
Amortisation expense	- (193) - - (193)
Carryingamount at the end of theyear	2 108 18,766 - 18,876

Intangible assets, other than goodwill have finite useful lives. The current amortisation charges in respect of intangible assets are included under depreciation and amortisation expense per the income statement.

Amounts stated in the parent entity for additions and disposals of goodwill represent movements in relation to internal corporate reconstruction.

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56 Clarius Annual Report 2009 – Ready for Growth

(b) Impairment Tests

Goodwill is allocated to the consolidated entity’s cash-generating units, which are based on the consolidated entity’s individual brands and geographical segments.

	Consolidated
	2009 $000 2008 $000
ICT	13,709 13,709
New Zealand	4,118 4,059
Alliance Recruitment	23,503 23,503
The One Umbrella	3,423 3,423
Lloyd Morgan Australia	5,290 11,548
Lloyd Morgan Asia	3,445 5,454
Reality Check	- 73
JAV IT Group	7,458 8,733
Southtech	6,500 6,231
Total	67,446 76,733

Impairment tests are carried out to ensure that assets are carried at amounts that are not in excess of their recoverable amount. Recoverable amount is assessed on the basis of value in use. Value in use is calculated using the present value of the future cash flows expected to be derived from each cash generating unit (CGU).

(c) Key Assumptions used in

value-in-use Calculations

The discounted cash flow (DCF) projections are based on current annual budgets and forecasts for the year following the current reporting period (except for Lloyd Morgan Australia, which is based on a three year forecast) extrapolated over a ten year period with a growth rate of 2%. Management derives its forecasts and input variables to the DCF model based on past performance and its expectations for the future.
Current estimated terminal values are between 3.85 and 5 times earnings before interest and taxation. Terminal values are used as an estimate to project beyond the forecast period.
The cash flows are discounted at 11.07%
All head office and shared services costs are allocated to the cash generating units in the DCF calculations in order to derive a stand alone basis for each CGU

(d) Impairment Test Result

DCF analysis using the midpoint of input variables and taking in to consideration current business plans and external factors such as economic environment, this resulted in an impairment write down of $10,089 million announced at the half year.

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Clarius Annual Report 2009– Ready for Growth 57

19. Trade and Other Payables

	Consolidated Parent Entity
	2009 $000 2008 $000 2009 $000 2008 $000
Current
Trade creditors	20,934 27,074 14,806 18,726
Amounts payable to:
Controlled entities	- - 1,651 2,640
Vendors of acquired businesses	600 9,136 - 44
	21,534 36,210 16,457 21,410
Non-current
Trade creditors	- - - -

(a) Interest Rate Exposure

All trade and other payables are non-interest bearing.

(b) Fair Value

The fair value approximates to the carrying value of the non-current payables.

(c) Financial Guarantees

There are the following unsecured guarantees within the consolidated entity:

(i) The parent entity has guaranteed the bank overdraft of Lloyd Morgan Hong Kong
(ii) The Australian and New Zealand subsidiaries have guaranteed the bank overdraft of the parent entity.

No liability was recognised by the parent entity or the consolidated entity in relation to these guarantees as the fair value of the guarantees is immaterial.

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58 Clarius Annual Report 2009 – Ready for Growth

20. Tax Liabilities

	Consolidated Parent Entity
	2009 $000 2008 $000 2009 $000 2008 $000
Current
Income tax	(664) (396) (547) (3,042)

Deferred tax liabilities	22 66 - -
The balance comprises temporary differences attributable to: Depreciation and Recognition of Income in Asia Subsidiaries	22 66 - -
Movements
Balance at the beginning of the year	66 10 - -
Charged / (Credited) to the income statement	(44) 56 - -
Balance at the end of the year	22 66 - -

21. Provisions

	Consolidated Parent Entity
	2009 $000 2008 $000 2009 $000 2008 $000
Current
Dividend cheques not presented	137 129 137 129
Employee benefts	963 1,392 397 673
Lease incentive	230 415 - 71
	1,330 1,936 534 873
Non-current
Employee benefts	827 727 563 527
Make good on leased premises	361 434 226 226
	1,188 1,161 789 753
	2,518 3,097 1,323 1,626

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Clarius Annual Report 2009– Ready for Growth 59

Dividend

This provision recognises dividends that were paid by cheque but not presented.

Employee Benefits

This provision represents annual leave and long service leave entitlements.

Lease Incentive

This provision represents the liability associated with rent free periods given under current operating contracts. Management has calculated this amount based on the current rental contracts.

Make Good

This amount represents the cost which will be paid on completion of current tenancy under the applicable rental contracts. The amount has been calculated based on an estimate of the costs to fulfil each individual rental contract requirements.

Movements in Provisions

Movements in each class of provision during the financial year, other than employee benefits, are set out below:

	Dividends Lease Incentive Make-Good Total
	$000 $000 $000 $000
Consolidated
Carrying amount at the start of the year	129 415 434 978
Dividend declared	4,018 - - 4,018
Dividend reinvestment plan	(1,335) - - (1,335)
Amounts utilised	(2,675) (185) (73) (2,933)
Carrying amount at the end of the year	137 230 361 728
Parent Entity
Carrying amount at the start of the year	129 71 226 426
Dividend declared	4,018 - - 4,018
Dividend reinvestment plan	(1,335) - - (1,335)
Amounts utilised	(2,675) (71) - (2,746)
Carrying amount at the end of the year	137 - 226 363

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60 Clarius Annual Report 2009 – Ready for Growth

22. Contributed Equity

	Consolidated Parent Entity
	2009 $000 2008 $000 2009 $000 2008 $000
61,007,901 fully paid ordinary shares (2008: 57,404,189)	74,636 71,611 74,636 71,611
Ordinary shares at the beginning of the year	71,611 62,921 71,611 62,921
Shares issued during the year:
Purchase consideration for acquisitions	1,690 2,154 1,690 2,154
Dividend Reinvestment Plan	1,335 1,793 1,335 1,793
Exercise of employee options	- 4,743 - 4,743
At the end of the year	74,636 71,611 74,636 71,611

Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held. At the shareholders meetings each fully paid ordinary share is entitled to one vote.

Ordinary Shares	Consolidated Parent Entity
	2009 2008 2009 2008
At the beginning of the year	57,404,189 53,392,527 57,404,189 53,392,527
Shares issued during the year:
Purchase consideration for acquisitions	2,462,559 892,068 2,462,559 892,068
Dividend Reinvestment Plan	1,141,153 792,925 1,141,153 792,925
Exercise of employee options	- 2,326,669 - 2,326,669
At the end of the year	61,007,901 57,404,189 61,007,901 57,404,189

Share Options

Further information relating to the Company share option plan is set out in note 27. Details of options granted to directors and executive officers are set out in the director’s report. At the 30 June 2009 there were 7,403,854 (2008: 8,257,255) options outstanding.

Capital Risk Management

The consolidated entity’s and the parent entity’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The consolidated entity and the parent entity monitor capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Total capital is calculated as ‘equity’ as shown in the balance sheet plus debt.

	Consolidated Parent Entity
	Note 2009 $000 2008 $000 2009 $000 2008 $000
Total borrowings	11 15,639 17,085 15,000 16,562
Less: cash and cash equivalents	12 2,701 3,484 1,670 532
Net debt	12,938 13,601 13,330 16,030
Total equity	85,909 92,935 87,558 82,477
Total capital	98,847 106,536 100,888 98,507

Gearing ratio	13.1% 12.8% 13.2% 16.3%

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Clarius Annual Report 2009– Ready for Growth 61

23. Reserves

	Consolidated Parent Entity
	Note 2009 $000 2008 $000 2009 $000 2008 $000
Share-based payments	23 (a) 1,210 1,081 1,210 1,081
Foreign currency translation	23 (a) (255) (1,157) 9 (1,258)
Total	955 (76) 1,219 (177)

(a) Movements

(a) Movements
	Consolidated Parent Entity
	Note 2009 $000 2008 $000 2009 $000 2008 $000
Share-based payments Movements during the year:
At the beginning of the year	1,081 664 1,081 664
Option expense	129 417 129 417
At the end of the year	1,210 1,081 1,210 1,081
Foreign currency translation reserve Movements during the year:
At the beginning of the year	(1,157) 336 (1,258) -
Adjustment for prior year	30 - - 1,258 (1,258)
Adjustment arising from the translation of foreign controlled entities’ fnancial statements	902 (1,493) 9 -
At the end of the year	(255) (1,157) 9 (1,258)

Nature and Purpose of Reserves

(i) Share-based payments

The share-based payments reserve is used to recognise the fair value of options issued over their vesting period.

(ii) Foreign currency translation reserve

The foreign currency translation reserve records exchange differences arising on translation of foreign controlled entities. The reserve is recognised in the profit and loss when the net investment is disposed.

Exchange differences arising on loans to foreign subsidiaries from the parent entity are recorded in the foreign currency translation reserve. The reserve is recognised in the profit and loss when the loans are re-paid and exchange differences realised.

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62 Clarius Annual Report 2009 – Ready for Growth

24. Retained Profits

	Consolidated Parent Entity
	Note 2009 $000 2008 $000 2009 $000 2008 $000
Retained profts at the beginning of the fnancial year	21,400 20,514 11,043 14,066
Adjustment for prior year	30 1,258 - - -
Net (loss) / proft for the year	(8,322) 11,333 4,678 7,424
Dividends paid	7 (4,018) (10,447) (4,018) (10,447)
Retained profts at the end of the fnancial year	10,318 21,400 11,703 11,043

25. Capital Commitments and Leasing

Commitments for minimum lease payments in relation to non-cancellable operating leases payable are as follows:

	Consolidated Parent Entity
	2009 $000 2008 $000 2009 $000 2008 $000
Within one year	2,451 2,375 1,332 851
Later than one year but not later than fve years	2,969 2,176 2,135 356
Later than fve years	- - - -
	5,420 4,551 3,467 1,207

Operating lease commitments refer to property leases for the 25 sites (2008: 27 sites) operating across Australia, New Zealand and Asia. In general leases are negotiated with fixed increases for the first three years and then a market review thereafter.

26. Contingent Liabilities

There are no material contingent liabilities.

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Clarius Annual Report 2009– Ready for Growth 63

27. Share Based Payments

Set out below are summaries of options granted under the share based payment plan:

Consolidated and Parent Entity 2009

						Forfeited/
		Exercise	Balance at	Granted	Exercised	Lapsed	Balance at
	Date of	Price	Start of Year	during Year	during Year	during Year	End of Year
Grant Date	Expiry	$	No.	No.	No.	No.	No.
30 Jun 04	30 Jun 08	1.61	65,734	-	-	65,734	-
29 Nov 04	29 Nov 08	2.05	83,334	-	-	83,334	-
01 Jul 05	01 Jul 09	2.08	623,520	-	-	89,333	534,187
23 Dec 05	23 Dec 09	2.45	66,667	-	-	-	66,667
17 Mar 06	17 Mar 10	2.97	130,000	-	-	20,000	110,000
28 Sep 06	28 Sep 10	3.30	2,205,000	-	-	744,000	1,461,000
24 Apr 07	24 Apr 11	3.30	300,000	-	-	-	300,000
28 Jun 07	28 Jun 11	3.26	200,000	-	-	-	200,000
27 Sep 07	27 Sep 11	3.30	1,683,000	-	-	472,000	1,211,000
1 Nov 07	1 Nov 14	3.23	800,000	-	-	800,000	-
29 Nov 07	29 Nov 14	3.30	2,100,000	-	-	2,100,000	-
21 Jul 08	21 Jul 12	1.52	-	300,000	-	300,000	-
01 Sep 08	01 Sep 12	1.49	-	600,000	-	200,000	400,000
08 Sep 08	08 Sep 12	1.44	-	300,000	-	-	300,000
05 Jan 09	05 Jan 13	0.30	-	1,315,000	-	120,000	1,195,000
30 Mar 09	30 Mar 13	0.41	-	100,000	-	-	100,000
18 May 09	18 May 13	0.47	-	300,000	-	-	300,000
26 May 09	26 May 13	0.55	-	380,000	-	-	380,000
29 Jun 09	29 Jun 13	0.55	-	846,000	-	-	846,000
			8,257,255	4,141,000	-	4,994,401	7,403,854
Weighted Average Exercise Price			$3.16	$0.73	$-	$2.97	$2.20

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64 Clarius Annual Report 2009 – Ready for Growth

Consolidated and Parent Entity 2008

						Forfeited/
		Exercise	Balance at	Granted	Exercised	Lapsed	Balance at
	Date of	Price	Start of Year	during Year	during Year	during Year	End of Year
Grant Date	Expiry	$	No.	No.	No.	No.	No.
24 Jul 03	24 Jul 07	1.06	23,336	-	23,334	2	-
30 Jun 04	30 Jun 08	1.61	261,403	-	180,669	15,000	65,734
29 Nov 04	29 Nov 08	2.05	143,335	-	5,000	55,001	83,334
01 Jul 05	01 Jul 09	2.08	1,040,855	-	284,333	133,002	623,520
01 Jul 05	01 Jul 11	2.08	1,800,000	-	1,800,000	-	-
23 Dec 05	23 Dec 09	2.45	100,000	-	33,333	-	66,667
17 Mar 06	17 Mar 10	2.97	650,000	-	-	520,000	130,000
28 Sep 06	28 Sep 10	3.30	2,612,000	-	-	407,000	2,205,000
24 Apr 07	24 Apr 11	3.30	300,000	-	-	-	300,000
28 Jun 07	28 Jun 11	3.26	200,000	-	-	-	200,000
27 Sep 07	27 Sep 11	3.30	-	1,811,000	-	128,000	1,683,000
1 Nov 07	1 Nov 14	3.23	-	800,000	-	-	800,000
29 Nov 07	29 Nov 14	3.30	-	2,100,000	-	-	2,100,000
			7,130,929	4,711,000	2,326,669	1,258,005	8,257,255
Weighted Average Exercise Price			$2.75	$3.29	$1.91	$2.96	$3.16

The weighted average share price at the date of issue of options granted during the year ended 30 June 2009 was $0.73 (2008: $3.29)

The weighted average remaining contractual life of share options outstanding at the year end was 2.45 years (2008: 3.8 years).

Share Option Plan

A share option plan has been in place since the Company listed on the Australian Stock Exchange in 1997. The plan includes a performance hurdle for the exercise of options granted, whereby the Clarius Group Limited share price must outperform the relevant ASX Index on which the shares of Clarius Group Limited are listed.

The options hold no voting or dividend rights, and are not transferable.

Fair Value of Options Granted

The assessment of fair value of options is made at each grant date during the year. The range of fair values for options granted during the year was from $0.30 to $1.52 (2008: $0.51 to $0.77). The fair value at grant date is determined using, independently applied, the American Option Call Pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield, and the risk free interest rate for the term of the option. The expected price volatility is based on the historic volatility adjusted for any expected changes to future volatility due to publicly available information.

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Clarius Annual Report 2009– Ready for Growth 65

28. Related Party Disclosures

(a) Parent Entity

The ultimate parent entity and ultimate controlling party within the consolidated entity is Clarius Group Limited.

(b) Subsidiaries

Interests in subsidiaries are set out in note 17.

(c) Directors and Key Management Personnel

Disclosures relating to director and key management personnel are set out in note 8.

(d) Transactions with Related Parties

	Consolidated Parent Entity
	2009 $000 2008 $000 2009 $000 2008 $000
Sales of services Recruitment services supplied to related to parties	- - - 159
Purchases Recruitment services received from subsidiaries	- - 708 475
Tax consolidation legislation Current tax payable assumed from wholly owned tax consolidation entities	- - 3,109 1,857
Dividend revenue Subsidiaries	- - 8,651 6,523

(e) Loans

	Consolidated Parent Entity
	2009 $000 2008 $000 2009 $000 2008 $000
Loans to subsidiaries	- - 49,140 33,488
Loans to vendors of acquired business (secured)	- 97 - -
Loans from subsidiaries	- - 1,652 2,640

No provision for doubtful debts has been raised in relation to any outstanding balances, and no expense has been recognised in respect of bad or doubtful debts due from related parties.

(f) Terms and conditions

All transactions were made on normal commercial terms and conditions, except that there are no fixed terms for the repayment of loans between parties.

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66 Clarius Annual Report 2009 – Ready for Growth

29. Events Subsequent to the Reporting Date

On 2 July 2009 the Company issued 995,636 fully paid ordinary shares in final settlement to the vendor of the business of JAV IT.
On 25 August 2009 the Company resolved to not pay a final dividend.
On 25 August 2009 the Company resolved to appoint Patersons Corporate Finance to investigate a capital raising on behalf of the company

30. Prior Year Adjustment

Adjustment of $1,258 million has been made to the prior year retained earnings of the parent entity. During 2008 consolidation process, the elimination entry relating to foreign exchange of intercompany loan was booked at the parent level instead of consolidation level. This error had the effect of overstating other expenses, reserves and retained earnings by $1,258 million as at 30 June 2008.

The error has been corrected by restating each of the affected financial statement line items in the balance sheet. The reconciliation of the balance before and after the restatement is as follows:

	2008	Prior Year Error	2008 Restated
	$000	$000	$000
Income Statement
Other Expenses	11,146	(1,258)	9,888
Proft Before Tax	9,577	1,258	10,835
Proft After Tax	6,166	1,258	7,424
Equity
Reserves	1,081	(1,258)	(177)
Retained Earnings	9,795	1,258	11,043

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Clarius Annual Report 2009– Ready for Growth 67

Directors’ Declaration

The Directors of the Company Declare that:

The financial statements and notes, as set out on pages 27- 67, 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 view of the financial position as at 30 June 2009 and performance for the year ended on that date of the Company and the consolidated entity;
The Managing Director and General Manager Finance have each declared that:
(a) the financial records of the Company for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001;
(b) the financial statements and notes for the financial year comply with Accounting Standards; and
(c) the financial statements and notes for the financial year give a true and fair view.
In the directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and
The audited remuneration disclosures set out on pages 17-21 of the directors’ report comply with the Accounting Standards AASB 124 Related Party Disclosures and the Corporations Regulations 2001.

The directors have been given the declarations by the Managing Director and General Manager Finance required by section 295A of the Corporations Act 2001.

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

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Geoffrey J Moles Managing Director

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Peter D Bunting Director

Dated at Sydney this 25th day of August 2009

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68 Clarius Annual Report 2009 – Ready for Growth

Independent Audit Report to the Members of Clarius Group Ltd

Report on the Financial Report

We have audited the financial report of Clarius Group Limited (the company) and Clarius Group Limited and Controlled Entities (the consolidated entity), which comprises the balance sheets as at 30 June 2009, and the income statements, statements of changes in equity and cashflow statements for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the director’s declaration for 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 Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control 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, in accordance with the Accounting Standard AASB 101: Presentation of the Financial Statements, that compliance with the Australian equivalent to International Financial Reporting Standards (IFRS) ensures that the financial report, comprising the financial statements and notes, complies with IFRS.

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. Our responsibility is also to express an opinion on the remuneration disclosures contained in the directors’ report based on our audit.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control 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 control. 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 the basis for our audit opinion.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

Auditor’s Opinion

In our opinion the financial report of Clarius Group Limited and Clarius Group Limited and Controlled Entities is in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2009 and of their performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and

The financial report also complies with International Financial Reporting Standards as disclosed in note 1.

Auditors Opinion on the Remuneration Disclosures Contained in the Directors’ Report

In our opinion the remuneration disclosures that are contained in pages 15-22 of the directors’ report comply with accounting standards AASB 124.

Report on the Remuneration Report

We have audited the remuneration report included on pages 17-21 of the director’s report for the year ended. 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 the Australian Auditing Standards.

Auditor’s Opinion

In our opinion the remuneration report of Clarius Group Limited for the year ended 30 June 2009 complies with section 300A of the Corporation Act 2001.

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WHK Howath Sydney Roger Wong

Dated at Sydney this 25th day of August 2009

Clarius Annual Report 2009– Ready for Growth 69

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AdditionAl informAtion

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70 Clarius Annual Report 2009 – Ready for Growth

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The following information is required by the Australian Stock Exchange Limited.

(i) There is only one class of equity securities, being ordinary shares.
(ii) The number of shareholdings holding less than marketable parcels is 448.
(iii) The voting rights in respect of the ordinary shares are established by the Constitution, which reads as follows:
Clause 5.12: ‘one vote for every fully paid share’
(i) There is currently no On-Market Buy-Back

20 Largest Shareholders of Fully Paid Ordinary Shares as at 15 September 2009

Rank	Name of Holder		Balance at	%
			15-09-2009
1	RBC Dexia Investor Services Australia Nominees Pty Limited ,		7,753,510	11.6
2	HSBC Custody Nominees (Australia) Limited		3,618,111	5.4
3	National Nominees	Limited	2,606,330	3.9
4	Mr Victor John Plummer		2,070,806	3.1
5	Southside Technical Services Pty Ltd		1,879,705	2.8
6	Mr Geoff Moles & Mrs Janice Barbara Moles		1,595,165	2.4
7	Wingrove Park Pty	Limited	1,578,490	2.4
8	ANZ Nominees Limited		1,464,753	2.2
9	Perman Investments Pty Ltd		1,456,137	2.2
10	MFPH Superannuation Management Pty Ltd		1,326,521	2.0
11	Citicorp Nominees	Pty Limited	1,197,894	1.8
12	J P Morgan Nominees Australia Limited		773,197	1.2
13	Mr Ian Wallace Edwards & Mrs Josephine Edwards		742,681	1.1
14	Dr Mark Thompson		545,303	0.8
15	Engoordina Pty Ltd		404,860	0.6
16	Mr Grant John Montgomery		361,000	0.5
17	Ubs Wealth Management Australia Nominees Pty Ltd		295,468	0.4
18	Mr Alfred John Chown		264,804	0.4
19	UBS Nominees Pty Ltd		234,375	0.4
20	Mr Daryl Lindsay Allen		233,410	0.4
			30,402,520	45.587
Total IC			68,570,742
Analysis of Holdings as at 15 September 2009
Security	Classes	Holders	Total Units	%
1 – 1,000		775	435,855	0.64%
1,001 – 5,000		2,106	5,994,895	8.74%
5,001 – 10,000		862	6,576,912	9.59%
10,001 –	100,000	733	17,989,034	26.23%
100,001 and over		57	37,574,046	54.80%
		4,533	68,570,742	100%

The Names of Substantial Shareholders Listed in the Holding Company's Register as at 15 September 2009

Shareholder Perpetual Limited and Subsidiaries

Number of Ordinary Shares 7,881,510

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Clarius Annual Report 2009– Ready for Growth 71

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Corporate DireCtory

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72 Clarius Annual Report 2009 – Ready for Growth

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Corporate Directory

Registered Office

Head Office

Candle ICT

Australian Company Secretaries Pty Limited Level 9 20 Hunter Street Sydney NSW 2000 +61 2 9252 1933

Sydney Level 14 1 York Street Sydney NSW 2000 +61 2 9250 8100

Adelaide

Level 2 74 Pirie Street Adelaide SA 5000

Auckland

Postal Address GPO Box 4231 Sydney, NSW 2001

Level 16 1 Queen Street Auckland 1001

Alliance

Brisbane Level 14 500 Queen Street Brisbane QLD 4000

Brisbane

Company Secretary

Ground Floor 52 McDougall Street Brisbane QLD 4064

Mr Nicholas J V Geddes

Chatswood Level 3 815 Pacific Hwy Chatswood NSW 2067

Share Registrar

Canberra

Suite 2G 65 Canberra Avenue Griffith ACT 2603

Registries Limited Level 7 207 Kent Street Sydney NSW 2000 phone: +61 2 9290 9600 fax: +61 2 9279 0664

Melbourne Level 14 333 Collins Street Melbourne VIC 3000

Melbourne

Level 14 333 Collins Street Melbourne VIC 3000

Mt Waverley

Australian Stock Exchange Listing

Suite 32 1 Ricketts Rd Mount Waverley VIC 3149

Perth

CND

Level 3 191 St Georges Terrace Perth WA 6000

Parramatta

Auditors

Level 7, 3 Horwood Place Parramatta NSW 2150

Sydney

WHK Horwath Sydney Level 15 309 Kent Street Sydney NSW 2000

Level 5 1 York Street Sydney NSW 2000

Perth

Suite 4 1 Scarborough Beach Rd North Perth WA 6006

Wellington

Solicitors

Level 9, Lumley House 3-11 Hunter Street Wellington

Minter Ellison Aurora Place, 88 Phillip Street Sydney NSW 2000

Sydney Level 5 1 York Street Sydney NSW 2000

Bankers

Westpac Banking Corporation 273 George Street Sydney NSW 2000

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Clarius Annual Report 2009– Ready for Growth 73

Corporate Directory

JAV IT

Sydney Suite 1 13 Sirius Road Lane Cove NSW 2066

Lloyd Morgan (Asia)

Hong Kong 2403 World Trade Centre 280 Gloucester Road Causeway Bay Hong Kong

SouthTech

Sydney

862-868 Old Princes Highway Sutherland NSW 2232

Melbourne

Level 14 333 Collins Street Melbourne VIC 3000

Beijing

2W Guomen Building No 1 Zuojiazhuang Chaoyang District Beijing 10002

Level 14 333 Collins Street Melbourne VIC 3000

The One Umbrella

Lloyd Morgan

Brisbane

Level 14 500 Queen Street Brisbane QLD 4000

Shanghai 501 Pacheer Commercial Centre 555 Nan Jing West Road Shanghai 200041

Brisbane

Level 14 500 Queen Street Brisbane QLD 4000

Singapore

Chatswood

Level 3 815 Pacific Hwy Chatswood NSW 2067

Melbourne

Level 14 333 Collins Street Melbourne VIC 3000

Mt Waverley Suite 32 1 Ricketts Rd Mount Waverley VIC 3149

10 Hoe Chiang Road 14-02 Keppel Towers Singapore 089315

Kuala Lumpur C706 Metropolitan Square Mall Jalan PJU 8/1 Bandar Damansara Perdana 47820 Petaling Jaya Selangor Malaysia

Canberra

Suite 2G 65 Canberra Ave Griffith ACT 2603

Melbourne

Level 14 333 Collins Street Melbourne VIC 3000

Sydney Level 5 1 York Street Sydney NSW 2000

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74 Clarius Annual Report 2009 – Ready for Growth

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www.clarius.com.au 76 Clarius Annual Report 2009 – Ready for Growth

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AI assistant

IGNITE LIMITED — Annual Report 2009

65110_rns_2009-10-14_766b89c4-58e2-49ff-b579-a0d015ce1c0e.pdf

Dear Shareholders

2009 aNNUaL rEPOrt

Financial Results

Ready for Growth

Dear Fellow Shareholders

Capital Raising

Results

Outlook

Corporate GovernanCe Statement

Structure of the Board

Directors in Office at the Date of this Statement

Independence

The Chairman

Board Committees

Internal Audit

Risk Management

External Auditors

Statement by Managing Director and General Manager – Finance

Ethical Standards

Occupational Health and Safety

Shareholders

Continuous Disclosure

Transactions in Shares of the Group

Directors’ report

Geoffrey J Moles

Managing Director

Lawrence J Gibbs

Non-Executive Chairman

Peter D Bunting

Non-Executive Director

Penelope Morris AM

Non-Executive Director

Diana J Eilert

Managing Director – Ceased Employment 3 November 2008

Directors

Principal Activities

Recruitment

Operating Results

Dividends Paid or Recommended

Review of Operations

Financial Position

Significant Changes in State of Affairs

Future Developments

Director’s Interests in Shares and Options

Company Secretary

Remuneration Report

After Balance Date Events

Environmental Issues

Non-Executive Director Remuneration

Principles Used to Determine the Nature and Amount of Executive Remuneration

Executive Remuneration Policy

Performance Based Remuneration

Options Issued as Part of Remuneration

Details of Directors’ and Key Management Personnel Remuneration

Employment Contracts

Share-Based Payments

Option Holdings

Shareholdings

Shares Issued on Exercise of Options during the Year

Meetings of Directors

Board Audit Risk and Compliance Committee Meetings

Board Remuneration and Nominations Committee Meetings

Indemnifying Officers or Auditor

Proceedings on Behalf of the Company

Non-Audit Services

Directors’ Benefits

Auditor’s Independence

Rounding of Amounts

Auditor’s Independence Declaration

Financial StatementS

Income Statement[(1)]

Balance Sheet[(1)]

Statement of Changes in Equity[(1)]

Cash Flow Statement[(1)]

1. Statement of Significant Accounting Policies

Basis of Preparation

Reporting Basis and Conventions

IGNITE LIMITED Annual Report 2009