JCURVE SOLUTIONS LTD — Annual Report 2007

Aug 30, 2007

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Stratatel Limited ABN 63 088 257 729

Ground Floor 1 Atchison Street St Leonards NSW 2065

Companies Announcement Office Australian Securities Exchange Exchange Centre Level 4, 20 Bridge Street Sydney NSW 2000

[T] +61 2 9467 9200 [F] +61 2 9467 9201 [W] stratatel.com.au

31[st] August 2007

STRATATEL INCREASES PROFIT AND DECLARES MAIDEN DIVIDEND!

Dear Sir/Madam,

Preliminary Final Report and Audited Accounts

In accordance with ASX Listing Rule 4.3A and the requirements of the Corporations Act 2001 we hereby present Stratatel Limited’s Preliminary Final Report for the period ended 30 June 2007.

Reporting Period:

The operating results for the year to 30 June 2007 are shown with comparisons to the previous corresponding period, being the twelve months to 30 June 2006.

Results For Announcement To The Market:

Results For Announcement To The Market:
	2007 $’000s	2006 $’000s	Percentage change over previous corresponding period
Revenue from ordinaryactivities	3,291	1,931	70.5
Profit/(loss) for the period before tax	398	(387)	202.8
Netprofit/(loss) after tax	689	(266)	359.4

Dividend:

As a result of the company’s continued improvement in performance the Board of Directors is pleased to announce that a maiden 0.25 cents per share unfranked dividend will be paid to shareholders. The record date for the Dividend is Tuesday 2[nd] October 2007, with payment of the dividend expected to be made in the week beginning 15[th] October 2007.

Net Tangible Assets Per Security:

Net Tangible Assets Per Security:
	Current period	Previous corresponding period
Net tangible assets perordinary share	$0.028	$0.021

Independent Audit Report:

The Preliminary Final Report is based on accounts which have been audited.

Further Information Required by Listing Rule 4.3A

Further information required by Listing Rule 4.3A can be found in the Preliminary Final Report. Additional information will be provided in the Annual Report which will be sent to shareholders towards the end of September.

Explanation of Result:

Total revenue generated by the consolidated group for the twelve months to 30 June 07 increased by 70% over the previous corresponding period, reflecting continuing sales momentum and increasing units under management from the company’s mobile management products MobileFleet[®] and FleetManager[® ] products as well as the additional $538k in revenue generated by the subsidiaries, taking total group revenue to $3,291k (2006: $1,931k).

Table 1: Graph showing growth in revenue since 2003 for the major income generating products

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3,000
2,500
2,000
1,500
1,000
500
0
2003 2004 2005 2006 2007
Financial Period
M obileFleet Income OnTrac Income Softlog Income - Sales
Revenue ('000s)
----- End of picture text -----

Please refer to the Directors’ Report in the Annual Accounts and Review of Operations below for additional explanation of the financial results.

Review of Operations

Overview

The 2006-2007 year saw a significant broadening in the business operations of the company with the acquisitions of a competitor, Vircom Pty Limited, in December 2006 and the assets of Softlog Systems Pty Ltd in May 2007, an expense and cost recovery company.

Importantly, through integration and leveraging the available economies of scale Vircom adds approximately $450k per annum in revenue and contributes to the net profit of the group.

Softlog, a free-standing business in its own right is expected to add approximately $2m in revenue in the 2007-2008 financial year as well as making a positive contribution to company earnings.

The FleetManager division will manage all asset and expense management solutions developed or acquired including MobileFleet, Infratel, AutoManager, Pool Car Manager, On Trac and importantly the modular application FleetManager, which provides users with a single web-based application to manage a range of assets and related expenditure.

The Softlog division will maintain focus on the cost recovery solutions for the legal and accounting markets whilst further research and development is undertaken to provide a disbursement expense management solution for the corporate market.

FleetManager Division

FleetManager[®]

The FleetManager division incorporates the FleetManager[®] system, the company’s ‘best of breed’ asset and expenditure management solution, incorporating the functionality from the existing MobileFleet[®] system and integrating these with a more powerful and flexible database structure allowing for the addition of new asset classes such as credit cards, fuel cards, taxi card expenses etc.

At the date of this report the company has provided FleetManager[®] to clients to manage their mobile telephony expenditure, with a small number of clients managing their fuel cards and taxi vouchers and associated expenditure. In coming months the full TaxiManager™ module of FleetManager[®] will be launched to our existing and prospective clients.

Whilst the complete FleetManager[®] solution remains in development the mobiles management module has been deployed and in the 2007 financial year earned nearly $850k in revenue (2006: $113k)

MobileFleet[®]

MobileFleet[®] was the company’s original expense management solution for corporate and government clients to manage their increasingly larger and more cumbersome fleet of mobile telephones. Coming into its’ eighth year MobileFleet continues to be widely used by Stratatel clients and generated $2.3m in revenue in the 2007 financial year (2006: $1.6m), an increase of around $700k.

During the year all new clients contracted have been implemented onto the mobile telephone management module within FleetManager[®] .

Infratel™

Infratel is the fixed line management solution designed around the original MobileFleet[®] . Despite not being the prime focus of marketing efforts Infratel[®] generated $97k in revenue for 2007 (2006 $109k).

All new clients contracted for fixed line telephone management will utilise the fixed line module within FleetManager[®] .

Pool Car Manager / AutoManager

Pool Car Manager is in essence an on-line booking system for vehicles in a pool vehicle situation. Clients with pooled vehicles have found that by using Pool Car Manager they have located vehicles that have only ever been used a few times, depreciating in value whilst incurring the expense of being parked idly in a car park. Knowing where every vehicle is and how much it is being used can lead to significant vehicle usage efficiencies and savings.

The AutoManager and Pool Car Manager software products and intellectual property were acquired from Efleet Pty Ltd in February 2006.

AutoManager is a vehicle fleet management application that provides a vehicle fleet manager with the necessary information at their fingertips to be able to determine the exact state of a vehicle within their fleet, including details on repairs, service history, tyre replacement history, fuel usage, leasing and registration details and insurance.

In addition to the ‘usage’ aspect of vehicle fleet management AutoManager will also report on the ‘Life to date’ costs of each vehicle for costs, accident management, FBT, driver history, fuel and workshop history.

Collectively Pool Car Manager and AutoManager generated $98k in revenue in the 2007 year.

On Trac (Vircom product)

In the seven months since acquisition in December 2006 On Trac has contributed $294k to revenue. On Trac was partly a competitive product to MobileFleet and FleetManager® so the acquisition of Vircom also brings to the group additional resources with strong development and telephony management experience.

The FleetManager[®] Value Proposition

FleetManager[®] is designed and built with a ‘One System, One Password, For Life’ ™ approach, enabling an organisation or agency to seamlessly manage all of their assets and related expenditure in one easy to access system, dramatically reducing administrative and processing costs and providing corporate governance visibility on how these assets are used.

Over time it is expected that each of the distinct and separate software applications above will be integrated completely into the FleetManager® system to provide holistic reporting at an organisations business unit level.

Softlog Division

Softlog Systems is one of Australia’s most experienced software developers of cost recovery solutions for the legal and accounting markets.

Since 1986 Softlog has been designing and building its’ extensive suite of integrated expense management and cost recovery solutions. This commitment to being a market leader is best demonstrated in the current softlog.enterprise suite of fully integrated industry-standard modules that eliminate those “proprietary” or “dedicated” style systems. Instead, softlog.enterprise allows firms to take charge and apply the power of the very latest industry-standard workstation technology for seamless, automated cost recovery.

Recent activity has seen the launch of softlog.onboard, an embedded software application that resides directly on the Multi-Function Device (MFD) (photocopier / fax / scanner) used in many professional firms.

It is this kind of innovation that has enabled Softlog to achieve international success, with hundreds of customers in many countries around the world now enjoying the benefits of Softlog’s expense management and cost recovery solution

The Softlog Value Proposition

softlog.enterprise and softlog.onboard provide Softlog clients with the tools to recover up to 80% of their disbursement expenses, providing a rapid return on investment.

softlog.enterprise, like FleetManager® is a modular software application that can be tailored to accurately and simply assist clients recover disbursements using one or more of the following modules: Copy-Fax, Phone, Print, Email, Scan, Import and Sundries.

Business Structure

In addition to the FleetManager and Softlog divisions the company has also created divisions for Group Finance and Group Sales to support the product related divisions. An outline of the Stratatel structure can be seen in the diagram below.

The benefit of this structure is that new businesses that are acquired can be integrated into the organisation quickly and with a minimum of fuss. Economies of scale become more simple to identify and action, and resource requirements become more identifiable and can be more rapidly deployed.

Table 2: The new structure of Stratatel showing the main business divisions

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Stratatel
FleetManager Group Group Softlog
Operations Finance Sales Operations
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Outlook for the Company

In the 2007-2008 financial year the company expects sales of FleetManager[®] and Softlog to continue to grow and recurrent revenue to rise. Stratatel is also actively investigating compatible acquisitions.

For further information please contact:

Mike Fairclough Managing Director Stratatel Limited Telephone: +61 2 9467 9200 Facsimile: +61 2 9467 9201

About Stratatel

Stratatel Limited is a public company listed on the Australian Stock Exchange (ASX: STE). The business of Stratatel was formed in 1997 to provide specialist independent telecommunications advice, brokerage and facilities management services to the corporate and government sectors.

Stratatel has developed unique and proprietary management systems that are designed to effectively and efficiently manage the cost and administration of assets and related expenditure.

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Stratatel Limited (ABN 63 088 257 729)

Annual Financial Report For the year ended 30 June 2007

Stratatel Limited

Contents	Page
Corporate Information	3
Directors’ Report	4
Corporate Governance Statement	13
Auditor’s Independence Declaration	18
Consolidated Income Statement	19
Consolidated Balance Sheet	20
Consolidated Cash Flow Statement	21
Consolidated Statement of Changes in Equity	22
Notes to the Financial Statements	23
Directors’ Declaration	56
Independent Auditor’s Report	57
ASX Additional Information	59

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Stratatel Limited

CORPORATE INFORMATION

ABN 63 088 257 729

Directors

Mr Ian A Macliver Mr Michael J Fairclough Mr Geoff Lambert

Company Secretary

Mr Paul K Brown

Registered office

Level 1, 1254 Hay Street West Perth Western Australia 6005

Principal place of business

Ground Floor 1-3 Atchison Street St Leonards New South Wales 2065

Share Register

Computershare Investor Services Pty Ltd Level 2 Reserve Bank Building 45 St George’s Terrace Perth Western Australia 6000

Solicitors

Talbot Olivier Level 8, Wesfarmers House 40 The Esplanade Perth Western Australia 6000

Auditors

HLB Mann Judd Level 2, 15 Rheola Street West Perth WA 6005

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Stratatel Limited

DIRECTORS’ REPORT

Your directors submit the annual financial report of the consolidated entity for the financial year ended 30 June 2007. In order to comply with the provisions of the Corporations Act, the directors report as follows:

Directors

The names of directors who held office during or since the end of the year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.

Names, qualifications, experience and special responsibilities

Ian Alexander Macliver B.Comm., CA, F Fin, MAICD (Non-Executive Chairman)

Mr Macliver joined the company in July 2000. He also is a member of the company’s Audit Committee and Remuneration Committee.

Mr Macliver also holds the both the position of Managing Director of Grange Consulting Pty Ltd, a firm that provides specialist corporate advisory services to both listed and unlisted companies and Executive Chairman of Max Capital Pty Ltd which is the securities arm of Grange Consulting Group specialising in capital raisings and corporate finance transactions

During the last three years, Mr Macliver has also served as a Non-Executive Director of the following listed companies:

Dec 1994	current	Port Bouvard Limited
Feb 2001	current	Mount Gibson Iron Limited
Jan 2004	current	Otto Energy Limited
May 2006	current	Empire Beer Group Limited

Mr Macliver was also a former Director of Bioprospect Limited from February 2000 to April 2007

Michael James Fairclough MAICD (Managing Director)

Mr Fairclough founded the company in 1997 and has been actively involved in the communications and technology industry throughout Australia for over 10 years. Mr Fairclough is responsible for the co-ordination of all sales and marketing activities and the overall management of the company.

Geoffrey Ernest Lambert M.Econ., SAFin, FAICD (Non-Executive Director)

Mr Lambert is a member of the company’s Audit Committee and Remuneration Committee and has had 30 years experience as a director of public companies

During the last three years, Mr Lambert has also served as a director of the following listed companies:

Mar 2003	current	Reward Minerals Ltd
Jun 1999	current	ICS Global Ltd
Nov 1999	current	Wedgetail Mining Ltd
Mar 2004	Oct 2005	Prairie Downs Metals Ltd
Jul 2003	Sept 2004	Riversdale Mining Ltd

James Donald Cullen B.Comm., CA, F Fin, FAICD (Non-Executive Director)

Mr Cullen resigned as a director of the company on 31 December 2006.

Company Secretary

Paul Kenneth Brown BSc, MAICD

Mr Brown was appointed to the position of company secretary shortly after joining the company in the capacity of chief financial officer in July 2003. Prior to this position Mr Brown held the role of interim chief financial officer for Jetset Travelworld Ltd after having been a finance manager and management accountant for a number of companies in the UK.

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Stratatel Limited

DIRECTORS’ REPORT (continued)

Interests in the shares and options of the company and related bodies corporate

As at the date of this report, the interests of the directors in the shares and options of Stratatel were:

I A Macliver M J Fairclough G E Lambert	Ordinary Shares Options over Ordinary Shares
	751,442 - 8,761,064 - 625,943 -

During the financial year 1,200,000 share options were granted to the executives listed below and on 31 July 2007 an additional 1,000,00 share options were issued the directors listed:

	Number of	Number of options	Number of fully paid
	options granted	over ordinary shares	ordinary shares
Director:
M J Fairclough	1,000,000	1,000,000	-
Executive:
P K Brown	300,000	300,000	-
M Parry	300,000	300,000	-
J Worsfold	300,000	300,000	-
J Williams	300,000	300,000	-
Details of unissued ordinary shares under options are as follows:
	Number of	Exercise price	Expiry date
	options
Stratatel Limited	1,000,000	$0.10	15 Jan 2011
Stratatel Limited	1,200,000	$0.10	30 Nov 2011

No ordinary shares were issued during the financial year as a result of the exercise of an option.

Dividends

Dividends Stratatel Limited Final dividends recommended: On ordinary shares Per ordinary shares unfranked	2007 2006 80,340,717 - $0.0025 -
	$200,852 -

The financial impact of this dividend has not been included in the financial statements

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Stratatel Limited

DIRECTORS’ REPORT (continued)

Principal Activities

The principal activities of the company during the year were the development and marketing of asset management and cost reduction systems to corporate and government clients. Current activities include the development of similar products and solutions to manage credit cards, cab charge cards and fuel cards.

On the 8[th] December 2006 Vircom Pty Limited was acquired from Intermoco Limited for $125,000 in cash plus an additional $80,000 in deferred instalments, $38,467 of which has been paid, the remainder $41,533 is dependent on future events, the achievement of which cannot be measured reliably and has not been brought to account.

Vircom designed and developed fixed line bill and call management web-based applications for corporate and government and were a direct competitor to Stratatel.

On the 1[st] May 2007 Stratatel acquired 100% of the business assets from Softlog Systems Pty Ltd through its’ wholly owned subsidiary Infratel.com Pty Ltd; whose name was subsequently changed to Softlog Systems Pty Ltd for $800,000 in four equal cash instalments over 18 months and an additional $1,200,000 in equal amounts of cash and ordinary shares payable in three instalments at the end of the next three financial periods based on specific events that cannot be reliably forecast.

Softlog Systems Pty Ltd developed cost recovery and apportionment software for the legal and accounting professions to provide them with a greater level of accuracy over the capturing, reporting and charging of disbursements.

Review of operations

Information regarding Stratatel’s operations and results can be found within the Chairman’s Letter, and the Review of Operations. This information is to be read in conjunction with the Directors’ Report.

Group overview

Information regarding an overview of the Group can be found within the Chairmans’ Letter and the Summary of Operations. This information is to be read in conjunction with the Directors’ Report.

Operating results for the year

The Group report a consolidated result for the first time, having acquired another two businesses this reporting period.

Overall there has been a significant improvement in financial performance with $689,302 net profit after tax ($397,555 net profit before tax) for the 2007 financial year against a net loss after tax of $265,678 ($386,637 loss before tax) the previous reporting period.

Shareholder returns

An unfranked divided of 0.25 cents per share was declared after the year end.

Risk management

The Board is committed to the identification and quantification of risk. Directors receive regular reports on areas where significant business risk or exposure concentrations may exist and on the management of those risks. The Board committee structures form an important part of the risk management process.

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Stratatel Limited

DIRECTORS’ REPORT (continued)

Significant changes in the state of affairs

There have been no significant changes in the state of affairs of the consolidated entity to the date of this report.

Significant events after balance date

As announced to the ASX on 31 July 2007 the company issued another 2,000,000 unlisted employee options, of which 1,000,000 were issued to the Managing Director, Mr. Michael Fairclough and are subject to approval at the company’s Annual General Meeting on 8[th] November 2007 and 1,000,000 issued to the vendors of Softlog as part of the acquisition.

Likely developments and expected results

Disclosure of information regarding likely developments in the operations of the consolidated entity in future financial years and the expected results of those operations is likely to result in unreasonable prejudice to the consolidated entity. Therefore, this information has not been presented in this report.

Environmental legislation

The consolidated entity is not subject to any significant environmental legislation.

Indemnification and insurance of Directors and Officers

The company has agreed to indemnify all the directors and officers for any breach of laws and regulations arising from their role as directors and officers. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

Stratatel has not indemnified or agreed to indemnify an auditor of the company or any related body corporate against liability incurred as an auditor.

Remuneration report

This report outlines the remuneration arrangements in place for directors and executives of Stratatel Limited (the “company”).

Remuneration philosophy

The performance of the company depends upon the quality of the directors and executives. The philosophy of the company in determining remuneration levels is to:

• set competitive remuneration packages to attract and retain high calibre employees;

• link executive rewards to shareholder value creation; and

• establish appropriate, demanding performance hurdles for variable executive remuneration.

Remuneration committee

The Remuneration Committee of the Board of Directors of the company is responsible for determining and reviewing compensation arrangements for the directors, the CEO and the executive management team.

The Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of directors and senior executives on a periodic basis by reference to relevant employment market conditions with an overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team.

Remuneration structure

In accordance with best practice Corporate Governance, the structure of non-executive director and executive remuneration is separate and distinct.

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Stratatel Limited

DIRECTORS’ REPORT (continued)

Non-executive director remuneration

The Board seeks to set aggregate remuneration at a level that provides the company with the ability to attract and retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.

The ASX Listing Rules specify that the aggregate remuneration of non-executive directors shall be determined from time to time by a general meeting. The latest determination was at the Annual General Meeting held on 23[rd] November 2006 when shareholders approved an aggregate remuneration of $250,000 per year.

The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned amongst directors is reviewed annually. The Board considers advice from external shareholders as well as the fees paid to non-executive directors of comparable companies when undertaking the annual review process.

Each director receives a fee for being a director of the company. An additional fee is also paid for each Board committee on which a director sits. The payment of additional fees for serving on a committee recognises the additional time commitment required by directors who serve on one or more sub committees.

The remuneration of non-executive directors for the period ended 30 June 2007 is detailed in Table 1 of this report.

Senior executive and executive director remuneration

Remuneration consists of fixed remuneration and variable remuneration (comprising short-term and long-term incentive schemes).

Fixed Remuneration

Fixed remuneration is reviewed annually by the Remuneration Committee. The process consists of a review of relevant comparative remuneration in the market and internally and, where appropriate, external advice on policies and practices. The Committee has access to external, independent advice where necessary.

Executives are given the opportunity to receive their fixed (primary) remuneration in a variety of forms including cash and fringe benefits such as motor vehicles and expense payment plans. It is intended that the manner of payment chosen will be optimal for the recipient without creating undue cost for the Group.

The fixed remuneration component of the 5 most highly remunerated Group and company executives is detailed in Table 2 of this report.

Variable Remuneration

Short Term Incentive (STI)

The objective of the short term incentive program is to link the achievement of the company's operational targets with the remuneration received by the executives charged with meeting those targets. The total potential STI available is set at a level so as to provide sufficient incentive to the executive to achieve the operational targets and such that the cost to the company is reasonable in the circumstances.

Actual payments granted to each executive depend on the extent to which specific operating targets set at the beginning of the financial year are met. The operational targets consist of a number of Key Performance Indicators (KPIs) covering both financial and non-financial measures, such as contribution to net profit after tax, customer service, revenue growth and leadership/ team contribution. Only when predetermined targets are met will any STI payment be made.

The aggregate of annual payments available for executives across the company is subject to the approval of the Remuneration Committee. Payments made are delivered as a cash bonus in the following reporting period.

The company also makes long term incentive payments to reward executives in a manner that aligns this element of remuneration with the creation of shareholder wealth.

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Stratatel Limited

DIRECTORS’ REPORT (continued)

Long Term Incentive (LTI)

The LTI plan was designed to reward executives in a manner that rewards the creation of shareholder wealth over the longer term. As such LTIs are made only to executives who are able to influence the generation of shareholder wealth through company performance against the relevant long term performance hurdle.

LTI grants to executives are delivered in the form of options.

The company uses improvement in overall company performance as an indicator of prospective shareholder wealth over the longer term, reflected in earnings per share performance.

The directors are of the opinion that these results can be, in part, attributed to the previously described remuneration policy and is satisfied that this continued improvement should result in increased wealth to shareholders over the short to medium term.

Employment Contracts

The Chief Executive Officer, Mr. Michael Fairclough, is employed under contract. This current contract commenced on January 1 2007 and terminates on December 31 2009, at which point the company may wish to enter into a new employment contract with Mr. Fairclough.

This contract provides Mr. Fairclough with an annual salary of $330,000 plus superannuation.

The company may terminate this employment agreement at any time and without prior notice if serious misconduct has occurred. In this event only the fixed proportion of the remuneration is payable and only up until the date of the termination.

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Stratatel Limited

DIRECTORS’ REPORT (continued)

Remuneration of directors and named executives

Table 1: Directors’ remuneration for the year ended 30 June 2007

	Primary benefits Post employment	Equity Total
	Salary & Fees $ Bonuses/ Commission $ Allowances $ Superan nuation $ Prescribed benefits $	Options $ $ Performance related %
I Macliver Chairman (non executive) 2006 2007	45,000 52,500 - - - - 4,050 4,725 - -	- - 49,050 57,225 - -
M Fairclough Managing Director/ CEO 2006 2007	275,223 293,290 - - - - 24,770 26,396 - -	- - 299,993 319,686 - -
J Cullen_(resigned 31 Dec 2006) _Director (non executive) 2006 2007	36,000 18,000 - - - - 3,240 1,620 - -	- - 39,240 19,620 - -
G Lambert Director (non executive) 2006 2007	36,000 42,000 - - - - 3,240 3,780 - -	- - 39,240 45,780 - -

Table 2: Remuneration of the named executives who received the highest remuneration for the year ended 30 June 2007

	Primary benefits Post employment	Equity Total
	Salary & Fees $ Bonuses/ Commission $ Allowances $ Superan nuation $ Prescribed benefits $	Options $ $ Performance related %
P Brown Chief Financial Officer/Secretary 2006 2007	127,020 127,425 - - - - 11,432 11,468 - -	- 7,473 138,452 146,366 - -
M Parry General Manager – Operations 2006 2007	124,822 143,931 - - - - 11,234 12,954 - -	- 7,473 136,056 164,358 - -
J Worsfold General Manager – Sales 2006 2007	127,506 133,817 1,768 16,105 - - 11,635 13,493 - -	- 7,473 140,909 170,888 1 9
J Williams_(Appointed 1 July 2006) _General Manager - Development 2006 2007	- 85,000 - - - - - 7,650 - -	- 7,472 - 100,123 - -
V Patel_(Resigned 30 June 2006) _General Manager - Development 2006 2007	91,743 - - - - - 8,257 - - -	- - 100,000 - - -

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Stratatel Limited

DIRECTORS’ REPORT (continued)

Remuneration of directors and named executives

Table 3: Options granted as part of remuneration

	Value of	Value of	Value of	Total value of	Value of options	Value of options	% remuneration
	options	options	options lapsed	options granted,	lapsed during	included in	consisting of
	granted at	exercised at	at time of lapse	exercised and	year	remuneration for	options for the
	grant date	exercise date		lapsed		the year	year
P Brown	7,473	-	-	7,473	-	7,473	5.1
M Parry	7,473	-	-	7,473	-	7,473	4.5
J Worsfold	7,473	-	-	7,473	-	7,473	4.4
J Williams	7,472	-	-	7,472	-	7,472	7.5

For details on the valuation of the options, including models and assumptions used, please refer to Note 13. There were no alterations to the terms and conditions of options granted as remuneration since their grant date.

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Stratatel Limited

Directors’ Meetings

The number of meetings of directors (including meetings of committees of directors) held during the year and the number of meetings attended by each director were as follows:

		Meetings of	Committees
	Directors’
	Meetings	Audit	Remuneration
Number of meetings held:	6	2	1
Number of meetings attended:
I Macliver	6	2	1
M Fairclough	6	n/a	1
J Cullen_(resigned 31 December 2006)_	3	1	-
G Lambert	6	1	1

Proceedings on behalf of the company

No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings.

The company was not a party to any such proceedings during the year.

Auditor Independence and Non-Audit Services

Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the directors of the Company with an Independence Declaration in relation to the audit of the annual report. This Independence Declaration is set out on page 18 and forms part of this Directors’ Report for the year ended 30 June 2007.

Non-Audit Services

There were no non-audit related activities carried out by our auditors during the year ended 30 June 2007.

Signed in accordance with a resolution of the directors.

M J Fairclough

Managing Director

Dated at PERTH this 31[st] day of August 2007

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Stratatel Limited

CORPORATE GOVERNANCE STATEMENT

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

Stratatel Limited’s Corporate Governance Statement is structured with reference to the Corporate Governance Council’s principles and recommendations, which are as follows:

Principle	1.	Lay solid foundations for management and oversight
Principle	2.	Structure the board to add value
Principle	3.	Promote ethical and responsible decision making
Principle	4.	Safeguard integrity in financial reporting
Principle	5.	Make timely and balanced disclosure
Principle	6.	Respect the rights of shareholders
Principle	7.	Recognise and manage risk
Principle	8.	Encourage enhanced performance
Principle	9.	Remunerate fairly and responsibly
Principle	10.	Recognise the legitimate interests of stakeholders

Stratatel Limited’s corporate governance practices were in place throughout the year ended 30 June 2007 and were fully compliant with the Council’s best practice recommendations except where noted.

Lay solid foundations for management and oversight

The Board of Directors are accountable to the shareholders for the proper management of the business and affairs of Stratatel. The Board and executive management use their diverse skills and knowledge to work towards consistently operating in the best interests of the company.

The Board has confirmed its roles and responsibilities in a written charter.

The role of the Board is to oversee the strategic direction and management of the company and to oversee the financial position on behalf of its shareholders. The Board undertakes to serve and protect the interests of shareholders, as well as employees, customers and all other interested stakeholders.

The Board undertakes the following primary functions and responsibilities:

• oversight of the company;

• approve, monitor and modify the strategic direction of the company;

• ratify the appointment of the Chief Executive Officer, Chief Financial Officer and Company Secretary;

• monitor the performance of executive management

• ratifying systems of risk management and internal compliance and control, codes of conduct and legal compliance;

• monitor and approve financial results

• approve and monitor the progress of major capital expenditure, capital management, acquisitions and divestures;

• comply with the reporting and other requirements of the law.

• The Board has delegated the daily financial and operational management of the company to the executive management, who are responsible to the Board.

Structure of the Board

The skills, experience and expertise relevant to the position of director held by each director in office at the date of the annual report is included in the Directors’ Report. Directors of Stratatel Limited are considered to be independent when they are independent of management and free from any business or other relationship that could materially interfere with – or could reasonably be perceived to materially interfere with – the exercise of their unfettered and independent judgment.

• 13 -

Stratatel Limited

CORPORATE GOVERNANCE STATEMENT (continued)

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

In accordance with the definition of independence above, and the materiality thresholds set, the following directors of Stratatel Limited are considered to be independent:

Name Position I A Macliver Chairman, Non-Executive G E Lambert Non-Executive Director

There are procedures in place, agreed by the Board, to enable directors in the furtherance of their duties to seek independent professional advice at the company’s expense.

The term in office held by each director in office at the date of this report is as follows:

Name Term in Office I A Macliver 7 years M J Fairclough 9 years G E Lambert 7 years

Performance

The performance of the Board and key executives is reviewed regularly against both measurable and qualitative indicators. During the reporting period, the Chairman conducted performance evaluations that involved an assessment of each Board member’s and key executive’s performance against specific and measurable qualitative and quantitative performance criteria. The performance criteria against which directors and executives are assessed are aligned with the financial and non-financial objectives of Stratatel Limited. Directors whose performance is consistently unsatisfactory may be asked to retire.

Remuneration Committee

It is the company’s objective to provide maximum stakeholder benefit from the retention of a high quality Board and executive management by remunerating directors and key executives fairly and appropriately with reference to relevant employment market conditions. To assist in achieving this objective, the Remuneration Committee links the nature and amount of executive directors and executives emoluments to the company’s financial and operational performance.

The expected outcomes of the remuneration structures are:

• retention and motivation of key executives;

• attraction of high quality management to the company; and

• performance incentives that allow executives to share the success of the company.

For a full discussion of the company’s remuneration philosophy and framework and the remuneration received by directors and executives in the current period please refer to the Remuneration Report, which is contained within the Directors’ Report.

There is no scheme to provide retirement benefits, other than statutory superannuation, to non-executive directors.

The Board is responsible for determining and reviewing compensation arrangements for the directors themselves and the Chief Executive Officer and executive team. The Board has established a Remuneration Committee, comprising all nonexecutive directors during the period.

Members of the Remuneration Committee throughout the year were :

I A Macliver (Chairman)

G E Lambert

J D Cullen (resigned 31 December 2006)

For details on the number of meetings of the Remuneration Committee held during the year and the attendees at those meetings, refer to page 12 of the Directors’ Report.

• 14 -

Stratatel Limited

CORPORATE GOVERNANCE STATEMENT (continued)

Promote ethical and responsible decision making

All directors, officers, executive management and employees are expected to act with integrity and objectivity, striving at all times to enhance the performance and reputation of the company. They must always act in accordance with the interests of shareholders, employees, customers and other interested stakeholders.

Share Trading

The company’s Share Trading Policy regulates dealings by the company’s directors, officers, executive management, vendors, consultants and employees in shares, options and other securities issued by the company.

Consistent with the legal prohibition relating to insider trading all of the parties listed are prohibited from trading in the company’s shares, options or other securities whilst in the possession of unpublished price sensitive information which concerns the company.

Price sensitive information is information that a reasonable person would expect to have a material effect on the price or value of the company’s securities.

The Share Trading Policy restricts the trading of securities in the company throughout the year without express permission of the Board, except during the 21 days immediately following the release of Stratatel’s half-yearly and yearly results, and then only if the individual is not in possession of price sensitive information.

Safeguard integrity in financial reporting

The company has in place policies and procedures to ensure the accuracy and factual presentation of its financial position. The Board also undertakes to monitor and assess the integrity of the financial reports.

Stratatel requires that the Chief Executive Officer and Chief Financial Officer state in writing to the Board that the company’s financial reports present a true and fair view, in all material aspects, of Stratatel’s financial condition and operational results and that they are in accordance with relevant accounting standards.

Audit Committee

The Board has established an Audit Committee, which operates under a charter approved by the Board. It is the Board’s responsibility to ensure that an effective internal control framework exists within the entity. This includes internal controls to deal with both the effectiveness and efficiency of significant business processes, the safeguarding of assets, the maintenance of proper accounting records, and the reliability of financial information as well as non financial considerations such as the benchmarking of operational key performance indicators. The Board has delegated responsibility for establishing and maintaining a framework of internal control and ethical standards to the Audit Committee.

The Committee also provides the Board with additional assurance regarding the reliability of financial information for inclusion in the financial reports. All members of the Audit Committee are non-executive directors.

The members and qualifications of the Audit Committee during the year were:

Name	Qualifications
Ian A Macliver	B.Comm., CA, F Fin
James D Cullen	B.Comm., CA, F Fin, FAICD (resigned 31 December 2006)
Geoffrey E Lambert	M.Econ., SAFin, FAICD (appointed to the Audit Committee 3	January 2007)

Whilst the ASX Guidelines recommend that this Committee should exist with a minimum of three directors, the majority of which are independent, it is felt that the size of the Board renders this unnecessary. The company is confident that its current Committee members bring valuable knowledge, skills and experience to Committee deliberations.

The Audit Committee’s Charter contains details about the Committee’s roles and responsibilities, composition, structure and membership requirements. It also contains information on the procedures for the selection and appointment of the external auditor and for the rotation of external audit partners.

The meetings and attendance of the Audit Committee are detailed on page 12 of the Directors’ Report.

Make timely and balanced disclosure

In compliance with the continuous disclosure requirements of the Corporations Act 2001 and the ASX Listing Rules, the company is committed to the principles of timely and balanced disclosure through the adoption and adherence of a Continuous Disclosure Policy.

• 15 -

Stratatel Limited

CORPORATE GOVERNANCE STATEMENT (continued)

Stratatel’s Chief Executive Officer and Company Secretary, with Board approval, carry the responsibility and accountability to ensure the principles of continuous disclosure are upheld an maintained. These principles ensure the ASX and media releases are timely, reviewed, and that they are factual and are presented in a clear and balanced way.

Respect the rights of shareholders

Stratatel recognises the importance of this principle and will at all times strive to communicate regularly and clearly with its shareholders.

The Stratatel website includes a section for investors where all announcements released by the company to the ASX can be viewed, including general releases, meeting information, financial reports and investor presentations. This is updated as announcements are released to the ASX so that shareholders have ready access to company information.

Investors and shareholders can also subscribe to the company’s electronic mailing list to receive all company announcements as they are uploaded to the Stratatel website. Interested parties are encouraged to visit the Stratatel website and complete the on-line e-mail subscription form.

Shareholders are encouraged to attend and participate at general meetings. They are encouraged to vote on resolutions presented at the Annual General Meeting including the appointment and aggregate remuneration of directors, the granting of options and shares to directors and changes to the Stratatel Constitution.

Stratatel will request the attendance at the Annual General Meeting of the external auditors so they are readily available to answer questions about the conduct of the audit and the preparation and content of the Auditor’s Report.

Recognise and manage risk

The Board, together with executive management, continuously seek to identify, monitor and mitigate risk. The Audit Committee is responsible for adopting policies on risk oversight and management.

Currently the company has the following risk management controls embedded in the company’s management and reporting system:

• a comprehensive annual insurance program;

• strategic and operational business plans; and

• annual budgeting and monthly reporting systems which enable the monitoring of performance against expected targets and the evaluation of trends.

• The company requires the Chief Executive Officer and the Chief Financial Officer state to the Board, in writing, that:

• the integrity of financial statements is founded on a sound system of risk management and internal compliance and control; and

• Stratatel’s risk management and internal compliance and control system is operating efficiently and effectively in all material aspects.

Encourage enhanced performance

The Board acknowledges the work of the directors, executive management and employees can always be improved and that their performance should be examined regularly against both measurable and qualitative indicators.

Whilst the Board has not established a formal Nomination Committee due to the relatively small size of the company, the role of the Nomination Committee is adequately exercised by the Board in its entirety. The Board, in this capacity, are responsible for ensuring the effectiveness of the reviews and also that adequate induction procedures are implemented to allow new Board appointees and executive management to fully participate in Board deliberations and Stratatel operations, respectively, at the earliest opportunity.

Directors, executive management and employees have access to continuing education and training to enable them to enhance and improve their knowledge and skills.

The Company Secretary is appointed by and reports to the Board on all corporate governance issues. He is responsible for the provision of timeframes and information to enable the Board to effectively discharge its duties and responsibilities. All directors of Stratatel have access to the Company Secretary to assist them in carrying out their role.

• 16 -

Stratatel Limited

CORPORATE GOVERNANCE STATEMENT (continued)

Remunerate fairly and responsibly

Stratatel’s current remuneration practices are set to enable the company to attract and retain highly talented and motivated directors, executive management, and employees.

The Remuneration Report details and discloses the annual remuneration for key management personnel.

The company has established a Remuneration Committee to adopt and review remuneration policies which will:

• enable the company to attract and retain directors (executive and non-executive) and senior management who will create sustainable value for all stakeholders; and

• fairly and responsibly reward executive management and directors, having regard to the performance of the company, the performance of the individual and the market indicators.

Details of the Remuneration Committee members and meetings attended can be found earlier in this Statement.

Fees paid to non-executive directors are detailed in Table 1 on page 10 of the Directors’ Report. The Board are paid their fees in cash, including statutory superannuation contributions. They do not receive any bonus payments nor are they entitled to any payment upon retirement or resignation.

Recognise the legitimate interest of stakeholders

The Board recognises the importance of this principle and continues to develop and implement procedures to ensure compliance with legal and other obligations to shareholders, employees, customers and other legitimate stakeholders.

To assist the company in meeting stakeholder expectations a formal Compliance Policy will be established. This will further detail the company’s commitment to its statutory and ethical obligations for the benefit of shareholders, employees, customers and other legitimate stakeholders.

Finance and treasury committee

The role of the Finance and Treasury Committees is handled by the Board. The Board is responsible for:

• establishing and monitoring the company’s capital management strategy, including dividend payment strategies, for consideration;

• assessing the company’s funding requirements and assessing specific funding proposals; and

• monitoring borrowings from financial institutions and compliance with borrowing covenants;

• monitoring the financial risks and exposure from movements in interest rates and exchange rates s undertaken by the board.

Due to the size of the company a formal Finance and Treasury Committee has not been established with the Board undertaking this role as part of its duties.

Nomination Committee

The Board has not formally established a Nomination Committee, with the Board performing the function of the Nomination Committee when required, including when necessary, selecting candidates for the position of director.

• 17 -

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Auditor’s Independence Declaration

As lead auditor for the audit of the financial report of Stratatel Limited for the year ended 30 June 2007, I declare that to the best of my knowledge and belief, there have been:

• a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

• b) no contraventions of any applicable code of professional conduct in relation to the audit.

• This declaration is in respect of Stratatel Limited.

Perth, Western Australia 31[st] August 2007

N G NEILL Partner, HLB Mann Judd

Partners: Terry M Blenkinsop, Litsa Christodulou, Wayne M Clark, Lucio Di Giallonardo, Colin D Emmott, Trevor G Hoddy, Norman G Neill, Peter J Speechley

==> picture [17 x 14] intentionally omitted <==

HLB Mann Judd (WA Partnership) 15 Rheola Street West Perth 6005. PO Box 263 West Perth 6872 Western Australia. DX 238 (Perth) Telephone +61 (08) 9481 0977. Fax +61 (08) 9481 3686. Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au

HLB Mann Judd (WA Partnership) is a member of

International and the HLB Mann Judd National Association of independent accounting firms

Stratatel Limited

INCOME STATEMENT

FOR THE YEAR ENDED 30 JUNE 2007

Notes Revenue 2 Cost of goods sold Employee benefits expense Other employee related expense Communications expense Advertising and marketing Professional fees Occupation expense Listing expense Depreciation and amortisation expense Finance costs Other expenses Profit/(loss) before income tax Income tax benefit/(expense) 3 Profit/(loss) after tax Basic earnings per share (cents per share) 5 Diluted earnings per share (cents per share) 5	Consolidated Parent 2007 $ 2007 $ 2006 $
	3,291,304 2,753,023 1,930,823 (171,003) (136,796) (104,432) (1,816,603) (1,448,327) (1,252,479) (261,956) (220,694) (237,025) (75,812) (62,670) (59,420) (3,320) (3,320) (10,922) (240,750) (228,005) (349,180) (194,270) (162,316) (136,038) (22,048) (21,453) (22,213) (51,222) (43,128) (31,279) (4,168) (3,982) (2,649) (52,597) (49,522) (111,823)
	397,555 372,810 (386,637) 291,747 291,747 120,959
	689,302 664,557 (265,678)
	0.87 0.84 (0.40) 0.86 0.83 N/A

The accompanying notes form part of these financial statements

• 19 -

Stratatel Limited

BALANCE SHEET AS AT 30 JUNE 2007

Notes Assets Current Assets Cash and cash equivalents 7 Trade and other receivables 8 Inventory 9 Other financial assets Total Current Assets Non-Current Assets Property, plant and equipment 10 Development 11 Intangible assets 11 Investments in subsidiaries Other receivables 8 Investments 7 Deferred tax asset Total Non-Current Assets Total Assets Liabilities Current Liabilities Trade and other payables 14 Total Current Liabilities Non-Current Liabilities Provisions 15 Other payables 14 Total Non-Current Liabilities Total Liabilities Net Assets Equity Issued capital 16 Reserves 16 Accumulated losses Total Equity	Consolidated Parent 2007 $ 2007 $ 2006 $
	1,195,882 1,112,714 1,549,290 689,546 505,269 332,478 41,746 - - 62,862 20,104 20,554
	1,990,036 1,638,087 1,902,322
	230,695 106,579 97,334 1,055,218 1,012,297 683,151 997,799 54,171 54,171 - 170,204 - 48,320 390,776 - 21,917 21,917 20,662 138,196 138,196 -
	2,492,145 1,894,140 855,318
	4,482,181 3,532,227 2,757,640
	683,919 379,429 387,610
	683,919 379,429 387,610
	28,568 7,849 7,849 600,000 - -
	628,568 7,849 7,849
	1,312,487 387,278 395,459
	3,169,694 3,144,949 2,362,181
	5,846,808 5,846,808 5,758,488 29,891 29,891 - (2,707,005) (2,731,750) (3,396,307)
	3,169,694 3,144,949 2,362,181

The accompanying notes form part of these financial statements

• 20 -

Stratatel Limited

CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2007

CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2007
		Consolidated	Parent
	Notes	2007	2007	2006
		$	$	$
		Inflows/
		(Outflows)	Inflows/(Outflows)
Cash flows from operating activities
Receipts from customers		3,268,655	2,758,883	1,947,508
Payments to suppliers and employees		(2,914,869)	(2,561,299)	(2,308,205)
Interest received		72,729	72,157	41,453
Interest paid		(4,168)	(3,982)	(2,649)
Income tax benefit		153,551	153,551	120,959
Rebates and refunds		-	-	8,648
Net cash provided by/(used in) operating activities	7	575,898	419,310	(192,286)
Cash flows from investing activities
Proceeds from disposal of non-current assets		-	-	8,141
Purchase of businesses, net of cash acquired		(467,147)	-	-
Investment in subsidiaries		-	(170,204)	-
Loans to subsidiaries		-	(342,456)	-
Purchase of non-current assets		(54,210)	(52,374)	(55,487)
Payment for other investments		(407,949)	(290,852)	(428,909)
Net cash provided by/(used in) investing activities		(929,306)	(855,886)	(476,255)
Cash flows from financing activities
Proceeds from issue of shares		-	-	1,382,439
Net cash provided by/(used in) financing activities		-	-	1,382,439
Net increase/(decrease) in cash and cash equivalents		(353,408)	(436,574)	713,898
Cash and cash equivalents at 1 July 2006		1,549,290	1,549,290	835,392
Cash and cash equivalents at 30 June 2007		1,195,882	1,112,714	1,549,290

The accompanying notes form part of these financial statements

• 21 -

Stratatel Limited

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2007

Parent As at 1 July 2005 Profit/ (loss) for the period Income tax benefit Total profit/ (loss) for the period Share issue costs Shares issued Balance at 30 June 2006 As at 1 July 2006 Profit/ (loss) for the period Income tax benefit Total profit/ (loss) for the period Share issue costs Shares issued Balance at 30 June 2007 Consolidated As at 1 July 2006 Profit/ (loss) for the period Income tax benefit Total income/ (expense) for the period Share issue costs Shares issued Balance at 30 June 2007	Ordinary Shares Accumulated Losses Equity Benefits Reserve Total $ $ $ $
	4,376,049 (3,130,629) - 1,245,420 - (386,637) - (386,637) - 120,959 - 120,959
	- (265,678) - (265,678) (140,610) - - (140,610) 1,523,049 - - 1,523,049
	5,758,488 (3,396,307) - 2,362,181
	5,758,488 (3,396,307) - 2,362,181 - 372,810 29,891 402,701 - 291,747 - 291,747
	5,758,488 (2,731,750) 29,891 3,056,629 - - - - 88,320 - - 88,320
	5,846,808 (2,731,750) 29,891 3,144,949
	Ordinary Shares Accumulated Losses Equity Benefits Reserve Total $ $ $ $
	5,758,488 (3,396,307) - 2,362,181 - 397,555 29,891 427,446 - 291,747 - 291,747
	5,758,488 (2,707,005) 29,891 3,081,374 - - - - 88,320 - - 88,320
	5,846,808 (2,707,005) 29,891 3,169,694

• 22 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 Accounting Standards and Interpretations and complies with other requirements of the law. The financial report has also been prepared on a historical cost basis, except for investment properties, land and buildings, derivative financial instruments and available-for-sale investments, which have been measured at fair value. The carrying values of recognised assets and liabilities that are hedged items in fair value hedges, and are otherwise carried at cost, are adjusted to record changes in the fair values attributable to the risks that are being hedged.

The financial report is presented in Australian dollars and all values are rounded to the nearest dollar.

The company is a listed public company, incorporated in Australia.

(b) Adoption of new and revised standards

In the year ended 30 June 2007, the Group has reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for annual reporting periods beginning on or after 1 July 2006. It has been determined by the Group that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change is necessary to Group accounting policies.

(c) Statement of Compliance

The financial report was authorised for issue on 31[st] August 2007.

The financial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS).

(d) Basis of Consolidation

The consolidated financial statements comprise the financial statements of Stratatel Limited and its subsidiaries as at 30 June each year (the Group).

The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.

In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from intra-group transactions have been eliminated in full. Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. Control exists where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The acquisition of subsidiaries has been accounted for using the purchase method of accounting. The purchase method of accounting involves allocating the cost of the business combination to the fair value of the assets acquired and the liabilities and contingent liabilities assumed at the date of acquisition. Accordingly, the consolidated financial statements include the results of subsidiaries for the period from their acquisition.

(e) Significant accounting judgments, estimates and assumptions

The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:

Impairment of goodwill and intangibles with indefinite useful lives:

The Group determines whether goodwill and intangibles with indefinite useful lives are impaired at least on an annual basis. This requires an estimation of the recoverable amount of the cash generating units to which the goodwill and intangibles with indefinite useful lives are allocated. The assumptions used in this estimation of recoverable amount and the carrying amount of goodwill and intangibles with indefinite useful lives are discussed in Note 12.

• 23 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(e) Significant accounting judgments, estimates and assumptions (continued)

Share-based payment transactions:

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an external valuer using a Black - Scholes model, using the assumptions detailed in Note 13.

(f) Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

(i) Sale of goods

Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Risks and rewards of ownership are considered passed to the buyer at the time of delivery of the goods to the customer.

(ii) Rendering of services

Revenue from the rendering of services is recognised upon delivery of the service to the customer.

(iii) Interest income

Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial asset.

(g) Borrowing Costs

Borrowing costs are recognised as an expense when incurred except those that relate to the acquisition, construction or production of qualifying assets where the borrowing cost is added to the cost of those assets until such time as the assets are substantially ready for their intended use or sale.

(h) Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Assets held under finance leases are initially recognised at their fair value or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.

Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the general policy on borrowing costs - refer Note 1(g).

Finance leased assets are depreciated on a straight line basis over the estimated useful life of the asset.

Operating lease payments are recognised as an expense on a straight line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

(i) Cash and cash equivalents

Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.

For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

• 24 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(j) Trade and other receivables

Trade receivables, which generally have 30-90 day terms, are recognised and carried at original invoice amount less an allowance for any uncollectible amounts. An allowance for doubtful debts is made when there is objective evidence that the Group will not be able to collect the debts. Bad debts are written off when identified.

• (k) Inventories

Inventories are valued at the lower of cost and net realisable value.

Costs incurred in bringing each product to its present location and condition are accounted for as follows:

Raw materials – purchase cost on an average cost basis; and

Finished goods and work-in-progress – cost of direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs.

• Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

(l) Income tax

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date.

Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences except:

when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or

when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:

• when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or

• when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.

Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.

• 25 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(l) Income tax (continued)

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

(m) Other taxes

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

• when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• receivables and payables, which are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.

Cash flows are included in the Cash Flow Statement on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

(n) Property, plant and equipment

Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement only if it is eligible for capitalisation.

Land and buildings are measured at fair value less accumulated depreciation on buildings and less any impairment losses recognised after the date of the revaluation.

Depreciation is calculated on a diminishing value basis over the estimated useful life of the assets as follows:

Plant and equipment – 7.5% - 40%

The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end.

(i) Impairment

The carrying values of plant and equipment are reviewed for impairment at each reporting date, with recoverable amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired.

The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the cash-generating unit to which the asset belongs, unless the asset's value in use can be estimated to be close to its fair value.

An impairment exists when the carrying value of an asset or cash-generating units exceeds its estimated recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount.

For plant and equipment, impairment losses are recognised in the income statement in the cost of sales line item. However, because land and buildings are measured at revalued amounts, impairment losses on land and buildings are treated as a revaluation decrement.

• 26 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(n) Property, plant and equipment (continued)

(ii) Derecognition and disposal

An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.

(o) Goodwill

Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the business combination over the Group’s interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities.

Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.

Goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.

For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.

Each unit or group of units to which the goodwill is so allocated:

• represents the lowest level within the Group at which the goodwill is monitored for internal management purposes; and

• is not larger than a segment based on either the Group’s primary or the Group’s secondary reporting format determined in accordance with AASB 114 Segment Reporting .

Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of cashgenerating units), to which the goodwill relates. When the recoverable amount of the cash-generating unit (group of cash-generating units) is less than the carrying amount, an impairment loss is recognised. When goodwill forms part of a cash-generating unit (group of cash-generating units) and an operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this manner is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.

Impairment losses recognised for goodwill are not subsequently reversed.

(p) Intangible assets

Intangible assets acquired separately or in a business combination are initially measured at cost. The cost of an intangible asset acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is charged against profits in the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised over the useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed at least at each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, which is a change in accounting estimate. The amortisation expense on intangible assets with finite lives is recognised in profit or loss in the expense category consistent with the function of the intangible asset.

• 27 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(p) Intangible assets (continued)

Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cashgenerating unit level. Such intangibles are not amortised. The useful life of an intangible asset with an indefinite life is reviewed each reporting period to determine whether indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from indefinite to finite is accounted for as a change in an accounting estimate and is thus accounted for on a prospective basis.

Research and development costs

Research costs are expensed as incurred. An intangible asset arising from development expenditure on an internal project is recognised only when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the development and the ability to measure reliably the expenditure attributable to the intangible asset during its development. Following the initial recognition of the development expenditure, the cost model is applied requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses. Any expenditure so capitalised is amortised over the period of expected benefits from the related project.

The carrying value of an intangible asset arising from development expenditure is tested for impairment annually when the asset is not yet available for use, or more frequently when an indication of impairment arises during the reporting period.

A summary of the policies applied to the Group’s intangible assets follows. These policies are consistent with those of the previous financial year unless otherwise stated.

Development Costs

Useful life

Finite

Amortisation method used

Not currently being amortised due to the non-completion or commercialisation of the multi-modular aspect of the FleetManager[®] system, as per the original design and intent.

Internally generated or acquired

Internally generated

Impairment testing

Annually for assets not yet available for use and more frequently when an indication of impairment exists. The amortisation method is reviewed at each financial year-end.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the asset is derecognised.

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset's value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is treated as a revaluation decrease).

• 28 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(p) Intangible assets (continued)

An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

(q)

Trade and other payables

Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services.

(r) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate assets but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the income statement net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability.

When discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.

(s) Employee leave benefits

(i) Wages, salaries, annual leave and sick leave

Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date, They are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable.

(ii) Long service leave

The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures, and period of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.

• 29 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(t) Share-based payment transactions

(i) Equity settled transactions:

The Group provides benefits to employees (including senior executives) of the Group in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions).

There are currently two plans in place to provide these benefits:

• the Employee Share Option Plan (ESOP), which provides benefits to directors and senior executives; and

• the Employee Share Loan Plan (ESLP), which provides benefits to all employees, excluding senior executives and directors.

The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an external valuer using the Black- Scholes model, further details of which are given in Note 13.

In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Stratatel Limited (market conditions) if applicable.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the vesting period).

The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The income statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition.

If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.

If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph.

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share (see Note 5).

(u) Issued capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(v) Earnings per share

Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element.

Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:

• costs of servicing equity (other than dividends) and preference share dividends;

• the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and

other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

• 30 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 2: REVENUES AND EXPENSES (a) Revenue Operating activities Consultancy income MobileFleet income FleetManager – mobiles FleetManager – other modules Infratel income PoolCarManager income Development income Broker services income OnTrac income Softlog sales income Softlog maintenance income Interest income Non-Operating activities Other income Rebates & refunds (b) Expenses Interest expense Depreciation of non-current assets Operating lease rental expense: minimum lease payments	Consolidated Parent 2007 $ 2007 $ 2006 $
	44,048 44,048 143,188 1,492,523 1,492,523 1,468,507 825,523 825,523 112,522 23,456 23,456 - 97,474 97,474 108,513 97,936 97,936 13,790 91,830 91,830 17,613 - - 4,833 293,667 - - 205,022 - - 35,031 - - 72,729 72,157 41,453 12,065 8,076 11,756 - - 8,648
	3,291,304 2,753,023 1,930,823
	4,168 3,982 2,649 51,222 43,128 31,279 149,285 124,410 109,924

• 31 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 3: INCOME TAX Income tax recognised in profit or loss The major components of tax expense are: Deferred tax asset: Benefit of tax losses recognised R & D tax offset Total tax expense/(income) The prima facie income tax expense on pre-tax accounting profit from operations reconciles to the income tax expense in the financial statements as follows: Accounting profit/(loss) before tax Income tax expense calculated at 30% Non-deductible expenses Share issue expenses – deductible Unrecognised tax losses Utilisation of tax losses brought forward Recognition of losses not previously recognised R & D tax offset Other Income tax benefit reported in the consolidated income statement	Consolidated Parent 2007 $ 2007 $ 2006 $
	(138,196) (138,196) - (153,551) (153,551) (120,959)
	(291,747) (291,747) (120,959)
	397,555 372,810 (386,637)
	119,267 111,843 (115,991) 24,028 20,997 12,464 (11,812) (11,812) (22,123) 6,734 - 97,364 (110,728) (110,728) - (138,196) (138,196) - (153,551) (153,551) (120,959) (27,489) (10,300) 28,286
	(291,747) (291,747) (120,959)

The Group has tax losses arising in Australia of $3,099,620 (2006: $3,517,675) that are available indefinitely for offset against future taxable profits of the companies in which the losses arose.

NOTE 4: SEGMENT REPORTING

Segment Information

The company operates predominantly in one business and geographical segment being the software development industry throughout Australia.

• 32 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007
NOTE 5: EARNINGS PER SHARE Basic earnings per share Diluted earnings per share Basic Earnings per share: The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share is as follows: Earnings/(loss) Weighted average number of ordinary shares for the purposes of basic earnings per share Diluted earnings per share: The earnings and weighted average number of ordinary shares used in the calculation of diluted earnings per share is as follows: Earnings Weighted average number of ordinary shares for the purposes of diluted earnings per share (refer (i) and (ii)	Consolidated 2007 2006 Cents per share Cents per share
	0.87 0.40
	0.86 N/A
	$ $ 689,302 (265,678)
	No. No. 79,574,716 66,128,301 $ $ 689,302 N/A
	No. No. 80,278,278 N/A

• 33 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 5: EARNINGS PER SHARE (continued)

NOTE 5: EARNINGS PER SHARE (continued)		2007		2006
			No.	No.
(i) The weighted average number of ordinary shares for the purposes of diluted
earnings per share reconciles to the weighted average number of ordinary shares
used in the calculation of basic earnings per share as follows:
Weighted average number of shares used in the calculation of basic earnings per
share		79,574,716		N/A
Shares deemed to be issued for no consideration in respect of:
Employee options		703,562		N/A
Weighted average number of shares used in the calculation of diluted earnings per
share		80,278,278		N/A
(ii) The following potential ordinary shares are not dilutive and are therefore
excluded from the calculation in (i) above:
Employee options			-	1,150,000
NOTE 6: DIVIDENDS	Consolidated		Parent
		2007	2007	2006
		$	$	$
Proposed dividends (not recognised as a liability as at 30 June):
On fully paid ordinary shares:	200,852		200,852	-
• Final unfranked divided for 2007 of 0.25 cents.
The company currently has no available franking credits.
NOTE 7: CASH AND CASH EQUIVALENTS
Cash at bank and on hand		945,882	862,714	26,692
Short-term deposits		250,000	250,000	1,522,598
	1,195,882		1,112,714	1,549,290

Cash at bank earns interest at floating rates based on daily bank deposit rates.

Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.

(i) Cash balances not available for use 21,917 21,917 20,662

The company has committed a rent bond under an operating lease for office space

• 34 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 7: CASH AND CASH EQUIVALENTS (continued)

(ii) Acquisition of business

• a) On 8[th] December 2006, the parent entity acquired 100% of Vircom Pty Limited, a software development and support company specialising in the provision of web-based telecommunications expense management based in Perth, WA.

• Vircom Pty Limited became wholly owned on acquisition on payment of a one-off instalment to Intermoco Limited of $125,000 plus an additional $80,000 in deferred instalments, $38,467 of which has been paid, the remainder $41,533 is dependent on future events, the achievement of which cannot be measured reliably and has not been brought to account.

Details of the acquisition are as follows: Consideration Cash and cash equivalents Deferred consideration Other costs Amount paid Fair value of net assets acquired Current assets Cash and cash equivalents Receivables Non-current assets Property, plant and equipment Current liabilities Payables Net assets acquired Goodwill arising on acquisition Net cash outflow on acquisition Cash and cash equivalents consideration Less: cash and cash equivalents acquired Net cash outflow	Consolidated Parent 2007 $ 2007 $ 2006 $
	125,000 125,000 - 38,467 38,467 6,737 6,737 -
	170,204 170,204 -
	4,968 4,968 - 41,198 41,198 - 19,513 19,513 - (65,679) (65,679) -
	- - - 170,204 170,204 -
	170,204 170,204 -
	170,204 170,204 - 4,968 4,968 -
	165,236 165,236 -

The assets and liabilities arising from the acquisition are recognised at fair value, which are equal to their carrying value at acquisition date.

If the combination had taken place at the beginning of the year, the profit of the Group would have increased by $75,000 and revenue from continuing operations would have increased by an additional $200,000.

• 35 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 7: CASH AND CASH EQUIVALENTS (continued)

(ii) Acquisition of business (continued)

• b) On 1[st] May 2007, Infratel.com Pty Ltd, a wholly owned subsidiary of Stratatel Ltd, acquired 100% of the business assets of Softlog Systems Pty Limited (Softlog), a software design and development company specialising in the provision of cost recovery and management solutions for Multi-Function Devices (MFDs), based in Queensland. Pursuant to the acquisition Infratel.com Pty Ltd changed its name to Softlog Systems Pty Ltd.

• The business assets were acquired on payment of a single installment to Softlog Systems Pty Ltd of $200,000, $46,138 for stock plus an additional $600,000 in deferred installments to be paid in equal amounts over the following 18 months. Additional contingent amounts of up to $1,200,000 in equal proportions of cash and shares divided equally over a three year period have been agreed based on specific targets, the achievement of which cannot be measured reliably and has not been brought to account.

has not been brought to account.
Details of the acquisition are as follows: Consideration Cash and cash equivalents Other costs Deferred consideration (refer Note 14) Fair value of net assets acquired Current assets Inventory Non-current assets Property, plant and equipment Non-current liabilities Provisions Net assets acquired Goodwill arising on acquisition Net cash outflow on acquisition Cash and cash equivalents consideration Less: cash and cash equivalents acquired Net cash outflow	Consolidated Parent 2007 $ 2007 $ 2006 $
	246,138 - - 55,773 - - 600,000 - -
	901,911 - -
	38,337 - - 110,860 - - (20,710) - -
	128,487 - - 773,424 - -
	901,911 - -
	301,911 - - - - -
	301,911 - -

The assets and liabilities arising from the acquisition are recognised at fair value, which are equal to their carrying value at acquisition date.

If the combination had taken place at the beginning of the year, the profit of the Group would have increased by around $200,000 and revenue from continuing operations would have increased by $1,500,000.

• 36 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 7: CASH AND CASH EQUIVALENTS (continued)

(ii) Acquisition of business (continued)

• c) On 28[st] February 2006, Stratatel Ltd, acquired the business assets of Efleet Pty Ltd (efleet), a software development and support company specialising in the provision of automobile management and booking systems

The business assets were acquired on payment of a single cash installment to efleet of $68,000 plus 266,666 fully paid ordinary shares in Stratatel that will be issued 12 months following the acquisition. The shares were issued and allotted in June 2007.

	Consolidated		Parent
	2007	2007		2006
	$	$		$
Details of the acquisition are as follows:
Consideration
Cash and cash equivalents	68,000	68,000		68,000
Deferred consideration	40,000	40,000		-
	108,000	108,000		68,000
Fair value of net assets acquired
Non-current assets
In house developed software	108,000	108,000		68,000
	108,000	108,000		68,000
Net cash outflow on acquisition
Cash and cash equivalents consideration	68,000	68,000		68,000
Shares issued	40,000	40,000
Less: cash and cash equivalents acquired	-	-		-
Net cash outflow	108,000	108,000		68,000

The assets and liabilities arising from the acquisition are recognised at fair value, which are equal to their carrying value at acquisition date.

Stratatels’ 2007 consolidated result includes the financial effect of the acquisition of efleet since 1 July 2006.

• 37 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 7: CASH AND CASH EQUIVALENTS (continued) (vi) Reconciliation of profit for the year to net cash flows from operating activities Profit for the year Non Cash flows in operating profit/(loss): Depreciation Allowances (Gain)/loss on sale or disposal of non-current assets Equity settled share based payment Employee benefits Interest income received and receivable (Increase)/decrease in assets: Current receivables Current inventories Other current assets Deferred tax assets Increase/(decrease) in liabilities: Current payables Non-current provisions Net cash from operating activities NOTE 8: TRADE AND OTHER RECEIVABLES Current: Trade receivables Allowance for doubtful debts Non-Current: Loans to subsidiaries Employee share loans	Consolidated Parent 2007 $ 2007 $ 2006 $
	689,302 664,557 (265,678) 51,222 43,129 31,279 - - (191) - - (365) 29,891 29,891 - - - 23,123 (315,870) (172,791) (130,486) (3,409) - - (42,308) 901 (3,790) (138,196) (138,196) - 305,266 (8,181) 145,973 - - 7,849
	575,898 419,310 (192,286)
	704,192 519,915 347,124 (14,646) (14,646) (14,646)
	689,546 505,269 332,478
	- 342,456 - 48,320 48,320 -
	48,320 390,776 -

• 38 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007
NOTE 9: INVENTORIES	Consolidated	Parent
	2007	2007	2006
	$	$	$
Raw materials – at cost	22,055	-	-
Finished goods – at net realisable value	19,691	-	-
	41,746	-	-
Inventory write-downs charged to cost of sales totalled $239 (2006: $Nil)
NOTE 10: PLANT AND EQUIPMENT
Cost	420,572	288,363	235,989
Accumulated depreciation and impairment losses	(189,877)	(181,784)	(138,655)
	230,695	106,579	97,334
Parent
		Accumulated
	Cost	Depreciation	TOTAL
Movements:	$	$	$
Balance as at 1 July 2005	181,500	(107,375)	74,125
Additions	55,487	-	55,487
Disposals	(998)	(1)	(999)
Depreciation charges	-	(31,279)	(31,279)
Impairment losses	-	-	-
Balance as at 30 June 2006	235,989	(138,655)	97,334
Additions	52,374	-	52,374
Depreciation charges	-	(43,129)	(43,129)
Balance as at 30 June 2007	288,363	(181,784)	106,579
Consolidated
Balance as at 1 July 2006	235,989	(138,655)	97,334
Additions	54,210	-	54,210
Acquisition of a subsidiary	130,373	-	130,373
Depreciation charges	-	(51,222)	(51,222)
Impairment losses	-	-	-
Balance as at 30 June 2007	420,572	(189,877)	230,695

• 39 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 11: INTANGIBLE ASSETS AND GOODWILL

Consolidated Year ended 30 June 2006 At 1 July 2005, net of accumulated amortisation and impairment Additions Amortisation charge At 30 June 2006, net of accumulated amortisation and impairment Year ended 30 June 2007 At 1 July 2006, net of accumulated amortisation and impairment Additions Acquisition of a subsidiary (Note 7) At 30 June 2007, net of accumulated amortisation and impairment	Software Development Goodwill Total $ $ $
	254,242 54,891 309,133 428,909 - 428,909 - (720) (720)
	683,151 54,171 737,322
	683,151 54,171 737,322 372,067 - 372,067 - 943,628 943,628
	1,055,218 997,799 2,053,017

In-house developed software is expected to have an estimated useful life of ten years following commercialisation.

Goodwill is not amortised but is subject to annual impairment testing (see Note 12).

No impairment loss was recognised for continuing operations in the 2007 financial year.

Parent Year ended 30 June 2006 At 1 July 2005, net of accumulated amortisation and impairment Additions Amortisation charge At 30 June 2006, net of accumulated amortisation and impairment Year ended 30 June 2007 At 1 July 2006, net of accumulated amortisation and impairment Additions Acquisition of a subsidiary (Note 7) At 30 June 2007, net of accumulated amortisation and impairment	Software Development Goodwill Total $ $ $
	254,242 54,891 309,133 428,909 - 428,909 - (720) (720)
	683,151 54,171 737,322
	683,151 54,171 737,322 329,146 - 329,146 - 170,204 170,204
	1,012,297 224,375 1,236,672

Goodwill is not amortised but is subject to annual impairment testing (see Note 12).

No impairment loss was recognised for continuing operations in the 2007 financial year.

• 40 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 12: IMPAIRMENT TESTING OF GOODWILL AND INTANGIBLES WITH INDEFINITE LIVES

Goodwill acquired through business combinations have been allocated to 5 individual cash generating units (CGU), which are reportable segments, for impairment testing as follows:

• FleetManager®

• Vircom

• Softlog

• Efleet

• Mobilefleet®

FleetManager®

The recoverable amount of the FleetManager unit has been determined based on a value in use calculation using cash flow projections based on financial budgets approved by senior management covering a two year period.

The discount rate applied to cash flow projections is 5.97% (2006: 6.00%) and cash flows beyond two years have not been extrapolated or prepared due to the asset not being impaired.

Senior management believes this forecast is justified based on the client base and the reliance on the FleetManager application in general. Focus is firmly locked on client retention to reduce client loss, whilst a sales team actively sources new opportunities and the FleetManager application continues to be developed to provide a comprehensive asset and expense management product for multiple asset classes such as mobile telephones, taxi charge cards and credit cards.

Additionally the group continues to invest in sales and marketing activity to promote the FleetManager® solution throughout Australia.

Vircom

The recoverable amount of the Vircom unit has been determined based on a value in use calculation using cash flow projections based on financial budgets approved by senior management covering a two year period.

The discount rate applied to cash flow projections is 5.97% (2006: N/A) and cash flows beyond two years have not been extrapolated or prepared due to the asset not being impaired.

Senior management believes this forecast is justified based on the client base and the reliance on the Vircom products in general.

Softlog

The recoverable amount of the Softlog unit has been determined based on a value in use calculation using cash flow projections based on financial budgets approved by senior management covering a two year period.

The discount rate applied to cash flow projections is 5.97% (2006: N/A%) and cash flows beyond two years have not been extrapolated or prepared due to the asset not being impaired.

Senior management believes this forecast is justified based on the sales activity shown since acquisition on 1 May 2007 being higher than the same time the previous year with more advanced cost recovery systems continuing to be developed for the accounting and legal markets. Softlog continue to build and enhance their onboard™ applications that reside within the operating system of the Multi-Function Device (MFD).

Additionally, the group has committed to investing in an additional high calibre professional sales individual to promote and market the Softlog solutions in the state of NSW, a previously under performing market due to a lack of direct sales activity.

Efleet

The recoverable amount of the Efleet unit is also determined based on a value in use calculation using cash flow projections based on financial budgets approved by management covering a 2 year period.

The discount rate applied to the cash flow projections is 5.97% (2006: 6.00%].

Senior management believes this growth rate is justified given the investment the company made in appointing additional quality senior managers to increase the sales and support activities of the company. The expected improvements have been visible from the winning of the Australian Department of Defence contract in November with NEC to the more recent sales activity that has been seen as a result of our target sales approach.

• 41 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 12: IMPAIRMENT TESTING OF GOODWILL AND INTANGIBLES WITH INDEFINITE LIVES (continued)

MobileFleet

The recoverable amount of the MobileFleet unit is also determined based on a value in use calculation using cash flow projections based on financial budgets approved by management covering a 2 year period.

The discount rate applied to the cash flow projections is 5.97% (2006: 6.00%].

Senior management believes this growth rate is justified given the investment the company made in appointing additional quality senior managers to increase the sales and support activities of the company. The expected improvements have been visible from the winning of the Australian Department of Defence contract in November with NEC to the more recent sales activity that has been seen as a result of our target sales approach.

Carrying amount of goodwill allocated to each of the cash generating units

At 30 June 2007 Carrying amount of goodwill Carrying amount of developed software Carrying amount of acquired intellectual property	Consolidated Softlog Vircom Efleet FleetManager Total $ $ $ $ $
	773,424 170,204 - 54,171 997,799 - - - 904,297 904,297 - - 108,000 - 108,000
	773,424 170,204 108,000 958,468 2,010,096

At 30 June 2007 Carrying amount of goodwill Carrying amount of developed software Carrying amount of acquired intellectual property Carrying amount of goodwill At 30 June 2006 Carrying amount of goodwill Carrying amount of developed software Carrying amount of acquired intellectual property Carrying amount of goodwill	Vircom	Parent eFleet FleetManager Total
	170,204 - -	- 54,171 224,375 - 904,297 904,297 108,000 - 108,000
	170,204	108,000 958,468 1,236,672
		Parent eFleet FleetManager Total
		- 54,171 54,171 - 615,151 615,151 68,000 - 68,000
		68,000 669,322 737,322

Key assumptions used in value in use calculations for 30 June 2007 and 30 June 2006

The following describes each key assumption on which management has based its cash flow projections when determining the value in use of all the cash generating units.

• Budgeted gross margins – the basis used to determine the value assigned to the budgeted gross margins is the average gross margins achieved in the year immediately before the budgeted year, increased for expected efficiency improvements. Thus, values assigned to gross margins reflect past experience, except for efficiency improvements.

• Bond rates - the yield on a 3 year government bond rate at the beginning of the budgeted year is used.

• 42 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 13: SHARE BASED PAYMENT PLANS

Employee Share Option Plan

The Employee Share Option Scheme provides for employees and executives to receive options over ordinary shares for no consideration. Each option is convertible to one ordinary share. There are no voting rights or dividend rights attached to unissued ordinary shares.

The contractual life of each option granted is 5 years. There are no cash settlement alternatives.

General Employee Share Loan Plan

All other employees are entitled to a share loan once they have been in service for 1 year. The loans are interest free with recourse limited to the underlying shares. The loans are made based on the market price of the underlying shares on the grant date and are not subject to any specific vesting conditions.

The expense recognised in the income statement in relation to share-based payments is disclosed in Note 16.

The following table illustrates the number (No.) and weighted average exercise prices of and movements in share options issued during the year:

options issued during the year:
Outstanding at the beginning of the year Granted during the year Forfeited during the year Exercised during the year Expired during the year Outstanding at the end of the year Exercisable at the end of the year	2007 No. 2007 Weighted average exercise price 2006 No. 2006 Weighted average exercise price 1,150,000 $0.20 3,250,000 $0.20 1,200,000 $0.10 - - - - - - - - - - 900,000 $0.20 2,100,000 $0.20
	1,450,000 $0.12 1,150,000 $0.20
	1,450,000 1,150,000

The outstanding balance as at 30 June 2007 is represented by:

• 250,000 options over ordinary shares with an exercise price of $0.20 each, exercisable upon meeting the above conditions and until 21 July 2008; and

• 1,200,000 options over ordinary shares with an exercise price of $0.10 each, exercisable upon meeting the above conditions and until 30 November 2011

The weighted average remaining contractual life for the share options outstanding as at 30 June 2006 is between 3 and 4 years (2006: <1 and 2 years).

The range of exercise prices for options outstanding at the end of the year was $0.10 - $0.20 (2006:$0.20)

The weighted average fair value of options granted during the year was $0.10 (2006: $Nil).

• 43 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 13: SHARE BASED PAYMENT PLANS (continued)

The following table lists the inputs to the model used for the years ended 30 June 2006 and 30 June 2007:

The following table lists the inputs to the model used for the years ended 30	June 2006 and 30 June 2007:
	2007	2006
Volatility (%)	31.10	-
Risk-free interest rate (%)	5.59	-
Expected life of option (years)	5	-
Exercise price (cents)	10.0	-
Weighted average share price at grant date (cents)	9.7	-

The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome. No other features of options granted were incorporated into the measurement of fair value.

The fair value of the options is measured at the grant date using the Black-Scholes option pricing model taking into account the terms and conditions upon which the instruments were granted. The services received and a corresponding expense is recognised over the expected vesting period.

NOTE 14: TRADE AND OTHER PAYABLES

Current: Trade payables (i) Accrued expenses Non-current: Deferred consideration	Consolidated Parent 2007 $ 2007 $ 2006 $
	420,674 210,460 257,394 263,245 168,969 130,216
	683,919 379,430 387,610
	600,000 - -

(i) Trade payables are non-interest bearing and are normally settled on 60-day terms

Information regarding the effective interest rate and credit risk of current payables is set out in Note 18

NOTE 15: PROVISIONS Employee benefits: Provision for long service leave	Consolidated Parent 2007 $ 2007 $ 2006 $
	28,568 7,849 7,849

• 44 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007
NOTE 16: ISSUED CAPITAL AND RESERVES Ordinary shares issued and fully paid	Consolidated Parent 2007 $ 2007 $ 2006 $
	5,846,808 5,846,808 5,758,488

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

Movement in ordinary shares on issue At 1 July 2005 Issued on 1 May 2006 for cash on exercise of share options Issued on 13 March 2006 pursuant to a placement Share issue costs At 1 July 2006 Issued on 29 June 2007 as consideration for acquisition of business assets Issued on 29 June 2007 pursuant to the Employee Share Ownership Plan At 30 June 2007	No. $
	62,647,727 4,376,049 5,555,555 500,000 11,367,214 1,023,049 - (140,610)
	79,570,496 5,758,488 266,666 40,000 503,555 48,320
	80,340,717 5,846,808

Share options

The company has one share based option scheme under which options to subscribe for the company's shares have been granted to certain executives and other employees. Refer Note 13.

Reserves

Reserves
Movements in reserves were as follows: Balance 1 July 2006 Equity benefits reserve – options issued to staff Balance 30 June 2007	- - - 29,891 29,891 -
	29,891 29,891 -

Nature and purpose of reserves

Employee Equity benefits reserve

This reserve is used to record the value of equity benefits provided to employees and directors as part of their remuneration. Refer to Note 13 for further details of these plans.

• 45 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 17: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 1 to the financial statements.

Credit risk

The Group trades only with recognised, creditworthy third parties.

It is the Group's policy that all customers who wish to trade on credit terms are subject to credit verification procedures.

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

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

With respect to credit risk arising from the other financial assets of the Group, which comprise cash and cash equivalents, available-for-sale financial assets and certain derivative instruments, the Group’s exposure to credit risk arises from default of the counter party, with a maximum exposure equal to the carrying amount of these instruments.

Since the Group trades only with recognised third parties, there is no requirement for collateral.

Liquidity risk

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, debentures, preference shares, finance leases and hire purchase contracts.

The Group manages liquidity risk maintaining adequate reserves by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

NOTE 18: FINANCIAL INSTRUMENTS

No financial assets and financial liabilities are readily traded on organised markets in standardised forms.

Interest rate risk

The following table sets out the carrying amount, by maturity, of the financial instruments exposed to interest rate risk:

Year ended 30 June 2007	within 1year $ 1 to 5 years $ Total $ Weighted average effective interest rate % 689,546 - 689,546 - 689,546 - 689,546 1,195,882 - 1,195,882 5.60 1,195,882 - 1,195,882 1,885,428 - 1,885,428 683,919 - 683,919 - - 28,568 28,568 - 683,919 28,568 712,487
Consolidated Financial assets Fixed rate: Trade and other receivables Floating rate: Cash Assets Financial liabilities Payables Provisions

• 46 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 18: FINANCIAL INSTRUMENTS (continued)

					Weighted
					average
Year ended 30 June 2007	within	1 to	5		effective
	1year	years		Total	interest rate
	$	$		$	%
Parent
Financial assets
Fixed rate:
Trade and other receivables	505,269		-	505,269	-
	505,269		-	505,269
Floating rate:
Cash Assets	1,112,714		-	1,112,714	5.60
	1,112,714		-	1,112,714
	1,617,983		-	1,617,983
Financial liabilities
Payables	379,430		-	379,430	-
Provisions	-	7,849		7,849	-
	379,430	7,849		387,279
					Weighted
Year ended 30 June 2006	within	1 to	5		average effective
	1year	years		Total	interest rate
	$	$		$	%
Parent
Financial assets
Fixed rate
Trade and other receivables	332,478		-	332,478	-
Bank bills	250,000		-	250,000	6.00
	582,478		-	582,478
Floating rate
Cash Assets	1,299,290		-	1,299,290	5.60
	1,299,290		-	1,299,290
	1,881,768		-	1,881,768
Financial liabilities
Payables	387,610		-	387,610	-
Provisions	-	7,849		7,849	-
	387,610	7,849		395,459

The net fair value of term debtors and fixed interest securities are determined by discounting cash flows, at the market rates of similar securities, to their present value.

For other assets and other liabilities the net fair value approximates their carrying value.

No financial assets and financial liabilities are readily traded on organised markets in standardised forms.

• 47 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 18: FINANCIAL INSTRUMENTS (continued)

Interest on financial instruments classified as floating rate is repriced at intervals of less than one year. Interest on financial instruments classified as fixed rate is fixed until maturity of the instrument. The other financial instruments of the company and Parent that are not included in the above tables are non-interest bearing and are therefore not subject to interest rate risk.

NOTE 19: COMMITMENTS AND CONTINGENCIES

Remuneration Commitments Commitments for the payment of salaries and other remuneration under long-term employment contracts in existence at the reporting date but not recognised as liabilities, payable: Within one year After one year but not more than five years	Consolidated Parent 2007 $ 2007 $ 2006 $
	330,000 330,000 300,000 445,000 445,000 300,000

Amounts disclosed as remuneration commitments include commitments arising from the service contracts of directors and executives referred to in the Remuneration Report of the Directors’ Report that are not recognised as liabilities and are not included in the directors' or executives' remuneration.

Legal claim

There are no legal claims against the Group

Guarantees

Stratatel Limited has the following guarantees at 30 June 2007:

• that all obligations required under an operating lease for office space utilised by its’ wholly owned subsidiary Softlog Systems Pty Ltd are guaranteed by the parent.

NOTE 20: EVENTS AFTER THE BALANCE SHEET DATE

As announced to the ASX on 31 July 2007 the company issued another 2,000,000 unlisted employee options, of which 1,000,000 were issued to the Managing Director, Mr. Michael Fairclough and are subject to approval at the company’s Annual General Meeting on 8[th] November 2007 and 1,000,000 issued to the vendors of Softlog as part of the acquisition.

NOTE 21: AUDITORS' REMUNERATION

The auditors of Stratatel Limited is HLB Mann Judd. Amounts received or due and receivable by HLB Mann Judd for: An audit or review of the financial report of the entity and any other entity in the consolidated group	Consolidated Parent 2007 $ 2007 $ 2006 $
	23,500 23,500 19,000

• 48 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 22: RELATED PARTY DISCLOSURE

The consolidated financial statements include the financial statements of Stratatel Limited and the subsidiaries listed in the following table.

following table.
	Country of	% Equity	Interest	Investment	($)
Name	Incorporation	2007	2006	2007	2006
Vircom Pty Limited	Australia	100	-	170,204	-
Softlog Systems Pty Ltd	Australia	100	-	-	-

Stratatel Limited is the ultimate Australian parent entity and ultimate parent of the Group. Vircom Pty Limited and Softlog Systems Pty Ltd are both incorporated in Australia.

The Group has no plans to dispose of any subsidiaries.

Guarantees provided or received for any related party receivables or payables have been disclosed in Note 19.

For the year ended 30 June 2007, the Group has not made any allowance for doubtful debts relating to amounts owed by related parties due to solid payment history (2006: $nil). An impairment assessment is undertaken each financial year by examining the financial position of the related party and the market in which the related party operates to determine whether there is objective evidence that a related party receivable is impaired. When such objective evidence exists, the Group recognises an allowance for the impairment loss.

The following table provides the total amount of transactions that were entered into with related parties for the relevant financial year.

financial year.
		Purchases	Amounts
	Sales to	From	Owed by	Amounts
	related	Related	Related	Owed to
	parties	Parties	parties	Related parties
Related party	$	$	$	$
2007
Grange Consulting Group Pty Ltd	-	22,000	-	-
2006
Grange Consulting Group Pty Ltd	-	33,000	-	-

Fees paid are in respect of corporate advice received from Grange Consulting Group Pty Ltd of which a director, Mr Ian Macliver, is a director.

Terms and conditions of transactions with related parties

Sales to and purchases from related parties are made in arm's length transactions both at normal market prices and on normal commercial terms.

Outstanding balances at year-end are unsecured, interest free and settlement occurs in cash.

• 49 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 23: DIRECTORS AND EXECUTIVE DISCLOSURES

(a) Details of Key Management Personnel

(i) Directors
Ian A Macliver	Chairman (non-executive)
Michael J Fairclough	Chief Executive Officer / Managing Director
Geoffrey E Lambert	Director (non-executive)
James D Cullen	Director (non-executive)		resigned 31 Dec 2006
(ii) Executives
Paul Brown	Company Secretary / Chief Financial Officer	appointed 14 Jul 2003
Vinod Patel	Chief Information Officer	appointed 7 Apr 2005	resigned 30 Jun 2006
John Williams	General Manager – Development	appointed 1 July 2006
Matthew Parry	General Manager - Operations	appointed 18 Jul 2005
James Worsfold	General Manager - Sales	appointed 11 Jul 2005

Other than the resignation of Vinod Patel, there were no other changes of the CEO or key management personnel after reporting date and the date the financial report was authorised for issue.

(b) Compensation of Key Management Personnel

(i) Compensation Policy

The performance of the Group depends upon the quality of its directors and executives. To prosper, the Group must attract, motivate and retain highly skilled directors and executives. The philosophy of the company in determining remuneration levels is to:

• set competitive remuneration packages to attract and retain high calibre employees;

• link executive rewards to shareholder value creation; and

• establish appropriate, demanding performance hurdles for variable executive remuneration.

(A) Remuneration Committee

The Remuneration Committee of the Board of Directors of the Parent is responsible for determining and reviewing compensation arrangements for the directors, the chief executive officer (CEO) and all other key management personnel.

The Remuneration Committee assesses the appropriateness of the nature and amount of compensation of key management personnel on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality board and executive team.

(B) Remuneration Structure

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

(C) Non-executive Director Compensation

Objective

The Board seeks to set aggregate remuneration at a level that provides the company with the ability to attract and retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.

The ASX Listing Rules specify that the aggregate remuneration of non-executive directors shall be determined from time to time by a general meeting. The latest determination was at the Annual General Meeting held on 23[rd] November 2006 when shareholders approved an aggregate remuneration of $250,000 per year.

The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned amongst directors is reviewed annually. The Board considers advice from external shareholders as well as the fees paid to non-executive directors of comparable companies when undertaking the annual review process.

• 50 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 23: DIRECTORS AND EXECUTIVE DISCLOSURES (continued)

(b) Compensation of Key Management Personnel (continued)

Each director receives a fee for being a director of the company. An additional fee is also paid for each Board committee on which a director sits. The payment of additional fees for serving on a committee recognises the additional time commitment required by directors who serve on one or more sub committees.

The remuneration of non-executive directors for the period ended 30 June 2007 is detailed in Table 1 of this report.

Senior executive and executive director remuneration

Remuneration consists of fixed remuneration and variable remuneration (comprising short-term and long-term incentive schemes).

Fixed Remuneration

Fixed remuneration is reviewed annually by the Remuneration Committee. The process consists of a review of relevant comparative remuneration in the market and internally and, where appropriate, external advice on policies and practices. The Committee has access to external, independent advice where necessary.

Executives are given the opportunity to receive their fixed (primary) remuneration in a variety of forms including cash and fringe benefits such as motor vehicles and expense payment plans. It is intended that the manner of payment chosen will be optimal for the recipient without creating undue cost for the Group.

The fixed remuneration component of the 5 most highly remunerated Group and company executives is detailed in Table 2 of this report.

Variable Remuneration

Short Term Incentive (STI)

The objective of the short term incentive program is to link the achievement of the company's operational targets with the remuneration received by the executives charged with meeting those targets. The total potential STI available is set at a level so as to provide sufficient incentive to the senior manager to achieve the operational targets and such that the cost to the company is reasonable in the circumstances.

Actual payments granted to each senior manager depend on the extent to which specific operating targets set at the beginning of the financial year are met. The operational targets consist of a number of Key Performance Indicators (KPIs) covering both financial and non-financial measures, such as contribution to net profit after tax, customer service, revenue growth and leadership/ team contribution. Only when predetermined targets are met will any STI payment be made.

The aggregate of annual payments available for executives across the company is subject to the approval of the Remuneration Committee. Payments made are delivered as a cash bonus in the following reporting period.

The company also makes long term incentive payments to reward senior executives in a manner that aligns this element of remuneration with the creation of shareholder wealth.

Long Term Incentive (LTI)

The LTI plan was designed to reward executives in a manner that rewards the creation of shareholder wealth over the longer term. As such LTIs are made only to executives who are able to influence the generation of shareholder wealth through company performance against the relevant long term performance hurdle.

LTI grants to executives are delivered in the form of options.

The company uses improvement in overall company performance as an indicator of prospective shareholder wealth over the longer term, reflected in earnings per share performance.

The directors are of the opinion that these results can be, in part, attributed to the previously described remuneration policy and is satisfied that this continued improvement should result in increased wealth to shareholders over the short to medium term.

• 51 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 23: DIRECTORS AND EXECUTIVE DISCLOSURES (continued)

(b) Compensation of Key Management Personnel (continued)

(ii) Compensation of Key Management Personnel for the year-ended 30 June 2007

Table 1: Directors’ remuneration for the year ended 30 June 2007

Table 1: Directors’ remuneration for the year ended 30 June 2007
	Primary benefits Post employment Equity Total
	Salary & Fees $ Bonuses/ Commission $ Allowances $ Superan nuation $ Prescribed benefits $ Options $ $ Performance related %
I Macliver Chairman(non executive) 2006 2007	45,000 52,500 - - - - 4,050 4,725 - - - - 49,050 57,225 - -
M Fairclough Managing Director/ CEO 2006 2007	275,223 293,290 - - - - 24,770 26,396 - - - - 299,993 319,686 - -
J Cullen_(resigned 31 Dec 2006) _Director (non executive) 2006 2007	36,000 18,000 - - - - 3,240 1,620 - - - - 39,240 19,620 - -
G Lambert Director (non executive) 2006 2007	36,000 42,000 - - - - 3,240 3,780 - - - - 39,240 45,780 - -
Table 2: Remuneration of the named executives who received the highest remuneration for the year ended 30 June 2007 Primary benefits Post employment Equity Total Salary & Fees $ Bonuses/ Commission $ Allowances $ Superan nuation $ Prescribed benefits $ Options $ $ Performance related %
	Salary & Fees $ Bonuses/ Commission $ Allowances $ Superan nuation $ Prescribed benefits $ Options $ $ Performance related %
P Brown Chief Financial Officer/Secretary 2006 2007	127,020 127,426 - - - - 11,432 11,468 - - - 7,473 138,452 146,367 - -
M Parry General Manager – Operations 2006 2007	124,822 143,931 - - - - 11,234 12,954 - - - 7,473 136,056 164,358 - -
J Worsfold General Manager – Sales 2006 2007	127,506 133,817 1,768 16,105 - - 11,635 13,493 - - - 7,473 140,909 170,888 1 9
J Williams_(Appointed 1 July 2006) _General Manager - Development 2006 2007	- 85,000 - - - - - 7,650 - - - 7,472 - 100,123 - -
V Patel_(Resigned 30 June 2006) _General Manager - Development 2006 2007	91,743 - - - - - 8,257 - - - - - 100,000 - - -

• 52 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 23: DIRECTORS AND EXECUTIVE DISCLOSURES (continued)

(b) Compensation of Key Management Personnel (continued)

iii)Compensation by category: Key Management Personnel (continued)

iii)Compensation by category: Key Management Personnel (continued)
Short-term Post employment Other long-term	Consolidated Parent 2007 $ 2007 $ 2006 $
	912,069 912,069 865,082 82,086 82,086 77,858 29,891 29,891 -
	1,024,046 1,024,046 942,940

(iv) Contract for Services

The Chief Executive Officer, Mr. Michael Fairclough, is employed under contract. This current contract commenced on January 1 2007 and terminates on December 31 2009, at which point the company may wish to enter into a new employment contract with Mr. Fairclough.

This contract provides Mr. Fairclough with an annual salary of $330,000 plus superannuation.

The company may terminate this employment agreement at any time and without prior notice if serious misconduct has occurred. In this event only the fixed proportion of the remuneration is payable and only up until the date of the termination.

(c) Compensation options: Granted and vested during the year (Consolidated)

During the financial year options were granted as equity compensation benefits under the long-term incentive plan to certain key management personnel as disclosed above. No share options have been granted to the non-executive members of the Board of Directors under this scheme. The options were issued free of charge. For further details relating to the options, refer to Note 13.

30 June 2007 Executives P Brown M Parry J Worsfold J Williams Total	Vested Granted Terms and Conditions for each Grant No. No. Grant Date Fair Value per option at grant date ($) (note 19) Exercise price per option($) (note 19) Expiry Date First Exercise Date Last Exercise Date
	300,000 300,000 29/11/06 0.025 0.10 30/11/11 30/11/06 30/11/11 300,000 300,000 29/11/06 0.025 0.10 30/11/11 30/11/06 30/11/11 300,000 300,000 29/11/06 0.025 0.10 30/11/11 30/11/06 30/11/11 300,000 300,000 29/11/06 0.025 0.10 30/11/11 30/11/06 30/11/11 1,200,000 1,200,000

• 53 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 23: DIRECTORS AND EXECUTIVE DISCLOSURES (continued)

(d) Option holdings of Key Management Personnel (Consolidated)

30 June 2007 Executives P Brown M Parry J Worsfold J Williams Total # Includes forfeitures	Balance 01 Jul 06 Granted as remuneration Options exercised Net change Other # Balance 30 June 07
	- 300,000 - - 300,000 - 300,000 - - 300,000 - 300,000 - - 300,000 - 300,000 - - 300,000
	- 1,200,000 - - 1,200,000

No options were held by any director or Key Management Personnel during 2006

(e) Shareholdings of Key Management Personnel (Consolidated)

Ordinary shares held in Stratatel Limited (number)

30 June 2007 Directors I Macliver M Fairclough G Lambert Executives P Brown M Parry J Worsfold J Williams Total	Balance 01 Jul 06 Granted as remuneration On Exercise of Options Net Change Other Balance 30 June 07
	751,442 - - - 751,442 8,697,464 - - 63,600 8,761,064 625,943 - - - 625,943 10,000 - - 100,000 110,000 562,566 - - - 562,566 362,600 - - 165,200 527,800 28,990 - - 4,800 33,790
	11,039,005 - - 333,600 11,372,605

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Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

NOTE 23: DIRECTORS AND EXECUTIVE DISCLOSURES (continued)

(e) Shareholdings of Key Management Personnel (Consolidated) (continued)

Ordinary shares held in Stratatel Limited (number)

30 June 2006 Directors I Macliver M Fairclough G Lambert J Cullen Executives P Brown V Patel M Parry J Worsfold Total	Balance 01 Jul 05 Granted as remuneration On Exercise of Options Net Change Other Balance 30 June 06
	584,909 - - 166,533 751,442 7,816,909 - - 880,555 8,697,464 596,818 - - 29,125 625,943 1,489,000 - - (537,000) 952,000 10,000 - - - 10,000 438,818 - - 299,234 738,052 - - - 562,566 562,566 - - - 362,600 362,600
	10,936,454 - - 1,763,613 12,700,067

All equity transactions with key management personnel other than those arising from the exercise of remuneration options have been entered into under terms and conditions no more favourable than those the company would have adopted if dealing at arm's length.

(f) Loans to Key Management Personnel (Consolidated)

(i) Details of aggregates of loans to key management personnel are as follows:

Total 2007	Balance at beginning of period Interest charged Interest not charged Write-off Balance at end of period Number in group $ $ $ $ $ No.
	- - 20,000 - 20,000 2
	- - 20,000 - 20,000 2

There were no loans to Key Management Personnel in the 2006 financial year

Terms and conditions of loans

Loans to directors are interest free. Executives are not charged interest on Loans under the Employee Share Ownership Plan. There are no other loans to executives.

Two loans have been agreed for executives for $10,000 each under the Stratatel Employee Share Ownership Plan. This provides the opportunity to acquire shares in Stratatel at a 7.5% discount to the 30 day volume weighted average share price. Eligible executives (those serving longer than twelve months) are able to acquire 10% of their annual salary in ordinary shares in the parent, plus another 2% for every year of continuous service with the company, up to a maximum of $10,000 per year.

An interest free loan over three years provides the executive with the ability to pay for the shares in three equal instalments, with the first instalment being due 12 months after the shares are issued.

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Stratatel Limited

DIRECTORS’ DECLARATION

1. In the opinion of the directors:

2. the financial statements and notes of the company and of the consolidated entity are in accordance with the Corporations Act 2001 including:

giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2007 and of their performance for the year then ended; and

complying with Accounting Standards and Corporations Regulations 2001; and

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

1. This declaration has been made after receiving the declarations required to be made to the directors in accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2007.

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

M J Fairclough

Managing Director

Dated this 31[st] day of August 2007

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INDEPENDENT AUDITOR’S REPORT

To the members of STRATATEL LIMITED

We have audited the accompanying financial report of Stratatel Limited (“the company”), which comprises the balance sheet as at 30 June 2007, and the income statement, statement of changes in equity and cash flow statement for the year then ended, a summary of significant accounting policies and other explanatory notes and the directors’ declaration for both the company and the Stratatel Limited Group (“the consolidated entity”) as set out on pages 19 to 56. The consolidated entity comprises 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 controls relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

In Note 1 (c), the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.

Auditor’s Responsibility

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

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

Our audit did not involve an analysis of the prudence of business decisions made by directors or management.

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

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, provided to the directors of Stratatel Limited and included in the Directors’ Report, would be on the same terms if provided to the directors as at the date of this auditor’s report.

HLB Mann Judd (WA Partnership) 15 Rheola Street West Perth 6005. PO Box 263 West Perth 6872 Western Australia. DX 238 (Perth) Telephone +61 (08) 9481 0977. Fax +61 (08) 9481 3686. Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au

Partners: Terry M Blenkinsop, Litsa Christodulou, Wayne M Clark, Lucio Di Giallonardo, Colin D Emmott, Trevor G Hoddy, Norman G Neill, Peter J Speechley

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International and the HLB Mann Judd National Association of independent accounting firms

HLB Mann Judd (WA Partnership) is a member of

Independent Auditor’s Report

Auditor’s Opinion

In our opinion:

• (a) the financial report of Stratatel Limited 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 2007 and of their performance for the year then ended; and

• (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and

• (b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1 (c).

HLB MANN JUDD Chartered Accountants

Perth, Western Australia 31 August 2007

N G NEILL Partner

Stratatel Limited

ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES

Shareholder information

(a) Distribution of shareholder numbers

Category 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,000 - and over	Ordinary 27 16 45 180 126
	394

There are 36 shareholdings held in less than marketable parcels

(b) Substantial shareholders

The names of the substantial shareholders listed in the company’s register as at 27 August 2007 are:

Shareholder	Number
	ordinary
Mr Michael Fairclough	8,697,464
Moutier Pty Ltd	7,707,820
Mr Mark Jobling	7,090,000

(c) Voting rights

At members’ meetings, each eligible voter (ie eligible member, proxy, attorney or representative of an eligible member) has one vote on a show of hands; and one vote on a poll (except where a share has not been fully paid, that share will only confer that fraction of one vote which has been paid, and if the total number of votes does not constitute a whole number, the fractional part of that total will be disregarded). This is subject to the following:

• (i) Where any calls due and payable have not been paid;

• (ii) Where there is a breach of a Restriction Agreement;

• (iii) Where a member and their proxy or attorney are both present at the meeting, or if more than one proxy or attorney is present;

• (iv) Where a vote on a particular resolution is prohibited by the Corporations Act 2001, Listing Rules, ASIC or order of a Court.

(d) Company secretary

The name of the company secretary is Paul Kenneth Brown

(e) Registered office

The address of the principal registered office in Australia is: Level 1, 1254 Hay Street WEST PERTH WA 6005

(f) Register of securities

The registers of securities are held at the following address: Computershare Ltd Level 2, 45 St Georges Terrace PERTH WA 6000

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Stratatel Limited

ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES (continued)

(g) Largest shareholders – ordinary shares (as of 27 August 2007)

Name 1. Moutier Pty Ltd 2. Mr Michael Fairclough 3. Mr Mark Christopher Jobling 4. ANZ Nominees Limited 5. JDV Limited 6. UBS Nominees Pty Ltd 7. Keygrowth Trading Pty Ltd 8. Brindle Holdings Pty Ltd 9. JWS Investment Pty Ltd 10. Nicholls Nominees Pty Ltd 11. Jasper Hill Resources Pty Ltd 12. Starlet Properties Pty Ltd 13. Mr Murray McGill Mrs Suzanne McGill 14. Glen Alpine Pty Ltd 15. Mr David Ian Scott 16. Cornella Pty Ltd 17. Dr David Charles Shelley-Jones 18. Mr David Schwartz 19. Mr Theo Clark 20. Dr Peter Pollard Dr Alice Kuchler

Number of ordinary fully paid shares held % held of issued ordinary capital 7,707,820 9.63 7,646,464 9.55 7,090,000 8.85 3,465,504 4.33 2,777,778 3.47 2,626,003 3.28 1,726,115 2.16 1,533,308 1.91 1,298,042 1.62 1,100,000 1.37 1,000,000 1.25 1,000,000 1.25 999,460 1.25 992,258 1.24 806,699 1.01 751,442 0.94 701,750 0.88 648,500 0.81 643,614 0.80 626,083 0.78

45,140,840 56.38

(h) Stock exchange listing

Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian Stock Exchange Limited.

(i) Restricted securities

As at 27 August 2007 there were no restricted securities on issue.

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