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

Stratatel Limited ABN 63 088 257 729

Level 1, 1254 Hay Street West Perth WA 6005 PO Box 1673 West Perth WA 6872

[T] +61 8 9212 4000 [F] +61 8 9212 4001 [W] stratatel.com.au

28 August 2009

STRATATEL INCREASES REVENUE BY 31% AND EBITDA BY 36% AND DECLARES FURTHER DIVIDEND

Dear Sir/Madam,

Final Report and Audited Accounts

Stratatel Limited presents below the information requirements in accordance with ASX Listing Rule 4.3A and the Corporations Act 2001. The Company’s audited Annual Financial Report for the period ended 30 June 2009 is also attached.

Reporting Period

The operating results for the year to 30 June 2009 are shown with comparisons to the previous corresponding period, being the twelve months to 30 June 2008.

Results For Announcement To The Market

	2009 $’000s	2008 $’000s	Percentage change over previous corresponding period
Revenue from ordinaryactivities	8,164	6,225	31.1
Profit for the period before tax	1,286	1,035	24.3
Netprofit after tax	1,129	1,381	(18.2)

Dividends

On 14 April 2009 the company paid an unfranked interim dividend of 0.25 cents per share to shareholders.

The Board of Directors is pleased to announce a final unfranked dividend for the 2008-09 financial year of 0.25 cents per shares. The record date for the dividend will be 9 September 2009, with payment expected to be made on 15 October 2009.

Net Tangible Assets / Earnings Per Share

Net Tangible Assets / Earnings Per Share
	Current Period	Previous Corresponding period
Net tangible assetsper ordinaryshare (centsper share)	1.12	0.82
Basic earnings per ordinary share (cents per share)	1.00	1.62

Independent Audit Report

The Independent Audit Report is included in the Annual Financial Report.

Stratatel Limited Appendix 4E Final Report

Accounting Policies, Estimation Methods and Measurements

The accounting policies, estimation methods and measurement bases used in the Appendix 4E are the same as those used in the previous annual report and half-year report.

Explanation of Result

Total revenue generated by the Company for the twelve months to 30 June 09 increased 31% to $8.2m over the previous corresponding period (2008: $6.2m) reflecting continuing sales momentum from the Company’s software solutions.

Diagram 1: Graph showing growth in revenue since 2003 by product suite

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1. Stratatel acquired the business assets of Softlog Systems Pty Ltd, including the Softlog.Enterprise software suite on 1 May2007

2. Stratatel acquired the business assets of Phoneware Communications Systems Pty Ltd including the Call Accounting and Directory Services ( CADS ) suite on 1 May 2008. Phoneware forms part of the Fleetmanager division.

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

Review of Operations

Overview

The 2008–09 result for the Company was a positive one given poor global economic conditions. Two key measures for the Company’s financial performance, revenue and EBITDA both increased significantly on the prior year performance. The operating performance of the Company has improved with revenue and net profit before tax increasing. Net profit after tax has however decreased as a result of tax accountability for research and development expenditure in 2009.

The Company’s expense management and cost recovery software solutions proved resilient to the market conditions as they assisted customers monitor and manage expenditure at a time of economic uncertainty. The FleetManager/Phoneware business proved to be most resilient reflecting the size and quality of its client base. New sales of Softlog.Enterprise in contrast were less than expected with Softlog’s target client base being predominantly small to medium sized legal firms.

Stratatel Limited Appendix 4E Final Report

Whilst the Company experienced a large number of sales deferrals for new business from customers, the business remained very focussed on sales and marketing efforts and flexible in terms of product pricing. Consequently the Company has a solid sales pipeline of opportunities moving forward.

Throughout the year the Company remained focussed on innovation and building new functionality into existing products and new products for future sale. This commitment to innovation and product development positions Stratatel to achieve revenue growth in future years.

Business Structure

In July 2009 the Company acquired the business assets of Resource Systems Pty Ltd, an accredited IBM business partner. This acquisition has diversified the Company’s operations and further developed its business structure to more effectively and efficiently support existing business activities and support revenue and earnings growth.

The Company now has two operating divisions, namely the Stratatel Expense Management Division ( EMD ) and Stratatel Resource as outlined below.

Diagram 1 The new structure for Stratatel showing business divisions and shared group services

The Company is able to provide group services to both Stratatel Resource and Stratatel EMD by way of finance, marketing and product development.

The Technical Board sets the research and product development strategy and priorities for the Company.

Outlook for the Company

The Company has committed additional resources to sales and marketing for both the Stratatel EMD and Stratatel Resource divisions in 2009-10 in an effort to drive revenue growth.

Whilst the purchasing decisions of some customers are still being deferred, the Company has a solid pipeline of sales opportunities and is optimistic of a strong year of revenue growth ahead. Stratatel expects revenue growth from both divisions including new revenue generation from new products.

The Company believes the acquisition of the Stratatel Resource business and partnership with IBM provides an opportunity for strong revenue and earnings growth in the future

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28 August 2009

Date

Mike Fairclough Managing Director Stratatel Limited

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Stratatel Limited (ABN 63 088 257 729)

Annual Financial Report For the year ended 30 June 2009

Stratatel Limited

Contents	Page
Corporate Information	3
Directors’ Report	4
Corporate Governance Statement	15
Auditor’s Independence Declaration	21
Income Statement	22
Balance Sheet	23
Cash Flow Statement	24
Statement of Changes in Equity	25
Notes to the Financial Statements	26
Directors’ Declaration	64
Independent Auditor’s Report	65
Additional Information for Listed Public Companies	67

Stratatel Limited

CORPORATE INFORMATION

ABN 63 088 257 729

Directors

Mr Ian Macliver Mr Michael Fairclough Mr Geoffrey Lambert Mr Graham Baillie

Company Secretary

Ms Emma McCormack Mr Paul Brown (Resigned 30 June 2009)

Registered office

Level 1, 1254 Hay Street West Perth Western Australia 6005

Principal place of business

Level 4 22 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

Stratatel Limited

DIRECTORS’ REPORT

Your directors submit the annual financial report of the consolidated entity for the financial year ended 30 June 2009. 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 is the Managing Director of Grange Consulting Pty Ltd, a firm that provides specialist corporate advisory services to both listed and unlisted companies. He is also Executive Chairman of Grange’s securities arm, Max Capital Pty Ltd, which specialises 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 12 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 Sep 2007 Wedgetail Mining Ltd

Graham Baillie (Non-Executive Director)

Mr Baillie joined the company in September 2007 as a non-executive Director.

In 1994, Mr Baillie established Outsource Australia Pty Ltd (OSA) to provide outsourcing services to the Australian market. In his capacity as majority shareholder and Chief Executive Officer he developed the company nationally and internationally.

Today, Outsource Australia Pty Ltd is known as Converga and has an impressive list of “blue-chip” clients in both the public and private sectors.

Prior to this, Mr Baillie was with AUSDOC during its formative years through to its ultimate ASX listing in September 1993. In this time he was not only integral to the development of the company throughout Australia but was also involved in establishing similar business operations in New Zealand, USA and United Kingdom.

Stratatel Limited

DIRECTORS’ REPORT (continued)

Company Secretary

Emma Jane McCormack B.Com, CA, SA Fin

Emma was appointed Company Secretary Emma on 1 July 2009. Emma is a Senior Executive at Grange Consulting, where she specialises in providing corporate and strategic advice, due diligence investigations, compliance and valuation advice. Emma is also currently the Company Secretary of Otto Energy Limited. Prior to joining Grange Consulting, Emma was an executive at KPMG Corporate Finance where she was involved in a range of corporate advisory engagements gaining extensive experience in financial and strategic analysis, due diligence reviews, project financing and financial modelling. Emma specialised in providing business and corporate valuation advice to various listed and unlisted companies across a wide range of industries. Emma is a Chartered Accountant and is also a senior associate of Finsia.

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 G Baillie	Ordinary Shares Options over Ordinary Shares
	2,500,000 - 10,235,516 1,000,000 2,000,000 - 5,089,460 -

During the financial year 1,000,000 share options were granted to the executives listed below:

Director: M Fairclough Executive: P Brown_(Resigned as Company Secretary 30 June 2009) J Butchers D Farrell M Parry J Worsfold(Resigned 3 October 2008)_ J Williams	Number of options granted Number of options over ordinary shares held at date of this report
	- 1,000,000 200,000 500,000 300,000 300,000 - 500,000 500,000 1,100,000 - 300,000 - 300,000
Total	1,000,000 4,000,000

Stratatel Limited

DIRECTORS’ REPORT (continued)

Interests in the shares and options of the company and related bodies corporate (continued)

Details of unissued ordinary shares under options are as follows:

Stratatel Limited Stratatel Limited Stratatel Limited Stratatel Limited Stratatel Limited Stratatel Limited Total	Number of options Executives option holdings_#_ Exercise price Expiry date 1,000,000 1,000,000 $0.10 15 Jan 2011 1,000,000 500,000 $0.12 25 May 2011 1,200,000 1,200,000 $0.10 30 Nov 2011 300,000 300,000 $0.15 24 June 2013 500,000 500,000 $0.10 31 July 2013 500,000 500,000 $0.15 17 October 2013 4,500,000 4,000,000

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

# Allocation of Executive options holdings on page 5

Dividends

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

A final ordinary dividend for the year ended 30 June 2008 of 0.25 cents per fully paid share unfranked was paid on 17 October 2008.
An interim ordinary dividend for the year ended 30 June 2009 of 0.25 cents per fully paid share unfranked was paid on 14 April 2009.

Since the end of the financial year the directors have recommended the payment of a final ordinary dividend of 0.25 cents per fully paid share unfranked to be paid on or about 15 October 2009 out of profits for the year ended 30 June 2009.

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.

Phoneware’s suite of CADS software solutions has been successfully integrated into Stratatel’s asset and expense management solutions business following the acquisition of the business assets in May 2008. The revenue contribution from Phoneware Pty Ltd for the full year was $2.8m.

Review of operations

The Company’s expense management and cost recovery software solutions proved resilient to the market conditions as they assisted customers to monitor and manage expenditure at a time of economic uncertainty. The FleetManager/Phoneware business proved to be most resilient reflecting the size and quality of its client base. New sales of Softlog.Enterprise in contrast were less than expected with Softlog’s target client base being predominantly small to medium sized legal firms.

Whilst the Company experienced a large number of sales deferrals for new business from customers, the business remained very focused on sales and marketing efforts and flexible in terms of product pricing. Consequently the Company has a solid sales pipeline of opportunities moving forward.

Throughout the year the Company remained focused on innovation and building new functionality into existing products and new products for future sale. This commitment to innovation and product development positions Stratatel to achieve revenue growth in future years.

Group overview

The Company now has two operating divisions, namely the Stratatel Expense Management Division (EMD) and Stratatel Resource as outlined below.

Diagram 1 The new structure for Stratatel showing business divisions and shared group services

The Company is able to provide group services to both Stratatel Resource and Stratatel EMD by way of finance, marketing and product development.

The Technical Board sets the research and product development strategy and priorities for the Company.

Stratatel Limited

DIRECTORS’ REPORT (continued)

Operating results for the year

Overall there has been steady growth in the financial performance with $1.53m EBITDA for year ending 2009 compared to 2008 which was $1.13m EBITDA. The net profit before tax was$1.29m ($1.13m net profit after tax) for the 2009 financial year against a $1.03m net profit before tax ($1.38m net profit after tax) the previous reporting period. The net profit after tax has been adjusted for tax accountability relating to research and development expenditure in the 2009 financial year. This is a strong financial result, despite very challenging market conditions.

Shareholder returns

Due to the company’s strong financial performance a final unfranked dividend of 0.25 cents per share was paid to shareholders on 17 October 2008 for the 2007-08 financial period.

An interim unfranked divided of 0.25 cents per share was paid to shareholders on 14 April 2009 due to continued solid financial performance.

The total unfranked dividends paid to shareholders since the start of the financial year was 0.50 cents per share held.

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.

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

Stratatel Limited acquired the business and assets of Resource Systems & Services Pty Ltd through its wholly owned subsidiary Card Manager Pty Ltd (re-named Resource Systems Pty Ltd trading as Stratatel Resource) on 1 July 2009 for total consideration of $500,000 to be paid in eight monthly instalments from the Company’s existing cash reserves.

Resource is a leading certified IBM Business Partner in WA with experience in Domino, Rational, WebSphere and Lotus, and has developed proprietary software solutions for corporate customers using IBM software technology to address business requirements including document management and helpdesk solutions. In addition Resource provides ongoing application management services in support of these customised IBM software solutions.

Matt Parry was appointed as Chief Executive Officer (CEO) of Stratatel’s Expense Management Division (EMD) incorporating Softlog, Phoneware and FleetManager on 1 July 2009. Matt Parry now has overall responsibility for the day-to-day management of this business as well as achieving the forecasted revenue and profit. Mike Fairclough will continue as Managing Director with an increased focus on business development and strategic growth opportunities for Stratatel Limited.

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.

Stratatel Limited

DIRECTORS’ REPORT (continued)

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.

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 13 November 2008 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 2009 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.

Stratatel Limited

DIRECTORS’ REPORT (continued)

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.

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 Managing Director, Mr. Michael Fairclough, is employed under contract. This current contract commenced on 1 January 2009 and terminates on 31 December 2011, 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 $400,000 including 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 2009

	Primary benefits Post employment Equity Total
	Salary & Fees $ Bonuses/ Commission $ Allowances $ Superan nuation $ Prescribed benefits $ Options $ $ Performance related %
I Macliver Chairman (non executive) 2008 2009	67,500 85,000 - - - - 6,075 7,650 - - - - 73,575 92,650 - -
M Fairclough Managing Director 2008 2009	311,922 366,778 - - - - 28,073 33,010 - - - - 339,995 399,788 - -
G Lambert Director (non executive) 2008 2009	55,500 65,000 - - - - 4,995 5,850 - - - - 60,495 70,850 - -
G Baillie Director (non executive) 2008 2009	36,000 55,000 - - - - 3,240 4,950 - - - - 39,240 59,950 - -

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Stratatel Limited

DIRECTORS’ REPORT (continued)

Remuneration of directors and named executives

Table 2: Remuneration of the named executives who received the highest remuneration for the year ended 30 June 2009

	Primary benefits	Post employment	Equity Total
	Salary & Fees $ Bonuses/ Commission $ Allowances $	Superan nuation $ Prescribed benefits $	Options $ $ Performance related %
P Brown_(Resigned 30 June 2009) _Chief Information Officer/Secretary 2008 2009	142,565 149,655 15,596 5,000 - -	14,234 13,919 - -	- 1,358 172,395 169,932 9 3
M Parry General Manager – Operations 2008 2009	160,953 189,811 17,430 20,000 - -	16,054 18,883 - -	3,426 7,559 197,863 236,253 9 8
J Worsfold_(Resigned 3 October 2008) _General Manager – Sales 2008 2009	143,910 55,377 25,174 11,200 - -	15,218 5,992 - -	- - 184,302 72,569 13 15
J Butchers Chief Financial Officer 2008 2009	108,496 192,619 - 5,000 - -	9,765 17,786 - -	- 2,037 118,261 217,442 - 2
D Farrell Branch Manager – Softlog Systems 2008 2009	130,185 130,280 - - 500 -	11,717 11,725 - -	- - 142,402 142,005 - -
J Slaiman_(Promoted 1 October 2008)* _General Manager – Sales 2008 2009	- 111,031 - 13,162 - -	- 11,570 - -	- - - 135,763 - 10

* Remuneration disclosed from promotion

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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 options granted at grant date Value of options exercised at exercise date Value of options lapsed at time of lapse Total value of options granted, exercised and lapsed Value of options lapsed during year Value of options included in remuneration for the year % remuneration consisting of options for the year
P Brown J Butchers M Parry	1,358 - - 1,358 - 1,358 0.8 2,037 - - 2,037 - 2,037 0.9 7,559 - - 7,559 - 7,559 3.2

For details on the valuation of the options, including models and assumptions used, please refer to Note 15. 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’ REPORT (continued)

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:	12	2	1
Number of meetings attended:
I Macliver	12	2	1
M Fairclough	12	n/a	1
G Lambert	12	2	1
G Baillie	12	2	n/a

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 21 and forms part of this Directors’ Report for the year ended 30 June 2009.

Non-Audit Services

There were no non-audit related activities carried out by our auditors during the year ended 30 June 2009.

Signed in accordance with a resolution of the directors.

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I Macliver

Chairman

Dated at PERTH this 28[th] day of August 2009

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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. Remunerate fairly and responsibly

Stratatel Limited’s corporate governance practices were in place throughout the year ended 30 June 2009 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; and
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.

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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 Macliver Chairman, Non-Executive G Lambert Non-Executive Director G Baillie 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 Macliver 9 years M Fairclough 11 years G Lambert 9 years G Baillie 2 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 and Managing Director 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.

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. She 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.

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.

16 -

Stratatel Limited

CORPORATE GOVERNANCE STATEMENT (continued)

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 of two non-executive directors and one executive director during the period.

Members of the Remuneration Committee throughout the year were :

I Macliver (Chairman)

G Lambert

M Fairclough

For details on the number of meetings of the Remuneration Committee held during the year and the attendees at those meetings, refer to page 14 of the Directors’ Report.

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.

The Board has established a Code of Conduct for Directors which is designed to ensure that Directors have a clear understanding of the Company’s expectations of their conduct. This Code deals with the following issues:

Fiduciary Responsibilities
Duties
Conflict of Interest
Disclosure of Benefits
Needs in Relation to Information and Advice
Confidentiality
Trading in Company Securities
Responsibility for Accounts
Obligations in Relation to Health, Safety and Environment
Product Integrity
Deed of Access, Indemnity and Insurance

A Code of Conduct has also been established for application to Directors, staff and consultants. This Code deals with the following issues:

Ethics
Treatment of Colleagues
The Law
Secret Commissions and Gifts
Conflicts of Interest
Confidentiality and Protection of Assets and Information
Unauthorised Public Statements
Trading in Company Securities
Political Contributions or Donations
Breaches of the Code of Conduct
17 -

Stratatel Limited

CORPORATE GOVERNANCE STATEMENT (continued)

The Code of Conduct for Directors and the Code of Conduct (for directors, staff and consultants) are posted on the Company’s web site.

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 independant non-executive directors.

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

Name Qualifications Ian Macliver B.Comm., CA, F Fin Geoffrey Lambert M.Econ., SAFin, FAICD Graham Baillie

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 14 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.

18 -

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.

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 11 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.

19 -

Stratatel Limited

CORPORATE GOVERNANCE STATEMENT (continued)

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.

20 -

==> picture [146 x 61] intentionally omitted <==

Auditor’s Independence Declaration

As lead auditor for the audit of the financial report of Stratatel Limited for the year ended 30 June 2009, 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.

==> picture [167 x 53] intentionally omitted <==

Perth, Western Australia 28 August 2009

W M CLARK Partner, HLB Mann Judd

HLB Mann Judd (WA Partnership) ABN 22 193 232 714

==> picture [16 x 14] intentionally omitted <==

Level 2 15 Rheola Street West Perth 6005 PO Box 263 West Perth 6872 Western Australia. Telephone +61 (08) 9481 0977. Fax +61 (08) 9481 3686. Email: [email protected]. Website: http://www.hlb.com.au Liability limited by a scheme approved under Professional Standards Legislation

HLB Mann Judd (WA Partnership) is a member of

International, a world-wide organisation of accounting firms and business advisers

21 -

Stratatel Limited

INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2009
		Consolidated	Consolidated	Parent	Parent
	Notes	2009	2008	2009	2008
		$	$	$	$
Revenue	2	8,163,796	6,224,656	2,807,091	2,857,116
Cost of goods sold		(477,565)	(457,299)	(136,524)	(168,391)
Employee benefits expense		(3,751,122)	(2,881,159)	(695,434)	(1,107,688)
Other employee related expense		(607,444)	(570,728)	(207,511)	(292,772)
Communications expense		(162,220)	(128,507)	(82,402)	(69,603)
Advertising and marketing		(33,604)	(8,324)	(20,846)	(6,249)
Professional fees		(715,917)	(389,858)	(271,786)	(248,388)
Occupation expense		(500,714)	(382,915)	(224,530)	(206,637)
Listing expense		(75,374)	(37,492)	(50,964)	(32,023)
Depreciation and amortisation expense		(298,270)	(162,397)	(269,440)	(135,192)
Finance costs		(6,288)	(3,606)	(5,800)	(3,069)
Other expenses		(249,315)	(167,519)	(125,701)	(104,686)
Profit before income tax		1,285,963	1,034,852	716,153	482,418
Income tax (expense)/benefit	3	(157,371)	345,933	36,122	346,744
Profit after tax		1,128,592	1,380,785	752,275	829,162
Basic earnings per share (cents per share)	5	1.00	1.62	0.66	0.97
Diluted earnings per share (cents per share)	5	1.00	1.62	0.66	0.97

The accompanying notes form part of these financial statements

22 -

Stratatel Limited

BALANCE SHEET AS AT 30 JUNE 2009

Notes Assets Current Assets Cash and cash equivalents 7 Trade and other receivables 8 Inventory 9 Other current assets 10 Total Current Assets Non-Current Assets Property, plant and equipment 12 Development 13 Intangible assets 13 Investments in subsidiaries 23 Other receivables 8 Other financial assets 11 Deferred tax asset 3 Total Non-Current Assets Total Assets Liabilities Current Liabilities Trade and other payables 16 Current tax liabilities Total Current Liabilities Non-Current Liabilities Provisions 17 Other payables 16 Total Non-Current Liabilities Total Liabilities Net Assets Equity Issued capital 18 Reserves 18 Accumulated losses Total Equity	Consolidated Consolidated Parent Parent 2009 2008 2009 2008 $ $ $ $
	1,300,359 1,066,455 1,183,768 896,487 1,310,689 1,860,687 598,550 574,852 50,180 46,928 - - 54,285 95,628 10,183 44,948
	2,715,513 3,069,698 1,792,501 1,516,287
	227,601 206,755 108,664 100,822 2,097,445 1,558,724 1,403,624 1,260,419 4,123,785 4,123,785 54,171 54,171 - - 170,204 170,204 28,118 38,061 3,114,509 3,031,796 105,639 51,348 84,213 29,923 345,487 439,036 393,979 357,857
	6,928,075 6,417,709 5,329,364 5,005,192
	9,643,588 9,487,407 7,121,865 6,521,479
	1,993,248 2,530,866 521,177 496,806 70,606 81,990 - -
	2,063,854 2,612,856 521,177 496,806
	65,233 79,501 38,871 5,990 - 200,000 - -
	65,233 279,501 38,871 5,990
	2,129,087 2,892,357 560,048 502,796
	7,514,501 6,595,050 6,561,817 6,018,683
	8,568,924 8,215,208 8,568,924 8,215,208 111,164 107,769 111,164 107,769 (1,165,587) (1,727,927) (2,118,271) (2,304,294)
	7,514,501 6,595,050 6,561,817 6,018,683

The accompanying notes form part of these financial statements

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Stratatel Limited

CASH FLOW STATEMENT

FOR THE YEAR ENDED 30 JUNE 2009

Notes Cash flows from operating activities Receipts from customers Payments to suppliers and employees Interest received Interest paid Income tax (paid)/ received Net cash provided by operating activities 7 Cash flows from investing activities Purchase of businesses, net of cash acquired Investment in subsidiaries Loans to subsidiaries Purchase of non-current assets Payment for other investments Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares Dividends paid Share issue costs paid Net cash (used in)/ provided by financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at 1 July 2008 Cash and cash equivalents at 30 June 2009	Consolidated Consolidated Parent Parent 2009 2008 2009 2008 Inflows/ (Outflows) $ Inflows/ (Outflows) $ Inflows / (Outflows) $ Inflows / (Outflows) $
	8,597,195 4,925,226 2,733,329 2,661,985 (6,500,536) (3,762,260) (1,601,861) (2,020,864) 51,648 71,628 50,064 69,102 (6,288) (3,606) (5,800) (3,069) (75,206) 45,093 - 127,083
	2,066,813 1,276,081 1,175,732 834,237
	(600,000) (1,763,381) - - - - - - - - (82,713) (2,314,183) (92,937) (78,423) (61,282) (39,771) (754,721) (1,205,746) (359,205) (338,552)
	(1,447,658) (3,047,550) (503,200) (2,692,506)
	- 2,165,000 - 2,165,000 (385,251) (389,708) (385,251) (389,708) - (133,250) - (133,250)
	(385,251) 1,642,042 (385,251) 1,642,042
	233,904 (129,427) 287,281 (216,227) 1,066,455 1,195,882 896,487 1,112,714
	1,300,359 1,066,455 1,183,768 896,487

The accompanying notes form part of these financial statements

24 -

Stratatel Limited

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2009

Consolidated As at 1 July 2007 Profit for the period Income tax benefit Dividends declared Recognition of equity based payments Share issue costs Shares issued Balance at 30 June 2008 As at 1 July 2008 Profit for the period Income tax (expense)/benefit Dividends declared Recognition of equity based payments Shares issued Balance at 30 June 2009 Parent As at 1 July 2007 Profit for the period Income tax benefit Dividends declared Recognition of equity based payments Share issue costs Shares issued Balance at 30 June 2008 As at 1 July 2008 Profit for the period Income tax benefit Dividends declared Recognition of equity based payments Shares issued Balance at 30 June 2009	Ordinary Shares Accumulated Losses Equity Benefits Reserve Total $ $ $ $
	5,846,808 (2,707,008) 29,891 3,169,691 - 1,034,852 - 1,034,852 - 345,933 - 345,933 - (401,704) - (401,704) - - 77,878 77,878
	5,846,808 (1,727,927) 107,769 4,226,650 (133,250) - - (133,250) 2,501,650 - - 2,501,650
	8,215,208 (1,727,927) 107,769 6,595,050
	8,215,208 (1,727,927) 107,769 6,595,050 - 1,285,963 - 1,285,963 - (157,371) - (157,371) - (566,252) - (566,252) - - 3,395 3,395
	8,215,208 (1,165,587) 111,164 7,160,785 353,716 - - 353,716
	8,568,924 (1,165,587) 111,164 7,514,501
	Ordinary Shares Accumulated Losses Equity Benefits Reserve Total $ $ $ $
	5,846,808 (2,731,752) 29,891 3,144,947 - 482,418 - 482,418 - 346,744 - 346,744 - (401,704) - (401,704) - - 77,878 77,878
	5,846,808 (2,304,294) 107,769 3,650,283 (133,250) - - (133,250) 2,501,650 - - 2,501,650
	8,215,208 (2,304,294) 107,769 6,018,683
	8,215,208 (2,304,294) 107,769 6,018,683 - 716,153 - 716,153 - 36,122 - 36,122 - (566,252) - (566,252) - - 3,395 3,395
	8,215,208 (2,118,271) 111,164 6,208,101 353,716 - - 353,716
	8,568,924 (2,118,271) 111,164 6,561,817

25 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

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 2009, the Group has adopted 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 2008. Details of the impact of the adoption of these new accounting standards are set out in the individual accounting policy notes set out below. The Group has also adopted the following Standards as listed below which only impacted on the Group’s financial statements with respect to disclosure:

AASB 101 ‘Presentation of Financial Instruments’
AASB 7 ‘Financial Instruments: Disclosures’

The Group has also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the year ended 30 June 2009. As a result of this review the Directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change necessary to Group accounting policies.

(c) Statement of Compliance

The financial report was authorised for issue on 28 August 2009.

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:

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Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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

(i) 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 14.

(ii) 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 15.

(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.

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Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(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.

(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

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Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(l) Income tax (continued)

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.

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.

29 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(n) Property, plant and equipment (continued)

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.

(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 (or 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.

30 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

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

The FleetManager[®] system as commercialised in July 2007 has been amortised using the straight line method over the 2009 financial year based on an estimated useful life of 10 years. Additional modules in development will be amortised when commercialised. Softlog and Phoneware products will be amortised when their modules are commercialised.

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).

31 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

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.

(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).

32 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(t) Share-based payment transactions (continued)

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 15.

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.

33 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(w) Foreign currency translation

Both the functional and presentation currency of Stratatel Limited and its Australian subsidiaries is Australian dollars. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date.

All exchange differences in the consolidated financial report are taken to profit or loss with the exception of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken directly to equity until the disposal of the net investment, at which time they are recognised in profit or loss.

Tax charges and credits attributable to exchange differences on those borrowings are also recognised in equity.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction.

Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

(x) Reclassifications of Financial Statements and Comparative Figures

Certain reclassifications have been made to the presentation of the accompanying consolidated financial statements. The balance sheet has been presented in a format which allows for enhanced disclosure of assets and current liabilities, in particular current provisions and current tax liabilities.

As Stratatel Limited changed the presentation and classification of balance sheet line items in the financial statements for 2009, comparative amounts for 2008 were reclassified in accordance with the requirements AASB 101 Presentation of Financial Statements.

Where necessary, the following comparative figures for 2008 have been adjusted to conform with changes in presentation for 2009, namely:

Security deposits totalling $29,431 were reclassified in the Balance Sheet from other current (financial) assets to non current other financial assets.
Rental bond of $21,917 for Perth office space was reclassified from investments to other financial assets.
Current tax liabilities of $81,990 are disclosed separately and not included within line item trade and other payables.

These reclassifications had no effect on previously reported net income or total shareholders' equity.

34 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 2: REVENUES AND EXPENSES

(a) Revenue Operating activities Consultancy income MobileFleet®income FleetManager®– mobiles Infratel income PoolCarManager income Development income OnTrac income Softlog sales income Softlog maintenance income Phoneware installation income Phoneware CADS income Phoneware vendor provided income Phoneware Octel income Interest income Non-Operating activities Other income (b) Expenses Interest expense Depreciation of non-current assets Operating lease rental expense: minimum lease payments	Consolidated Consolidated Parent Parent 2009 2008 2009 2008 $ $ $ $
	32,893 13,007 10,500 5,726 1,608,705 1,438,573 1,608,705 1,438,573 1,244,400 1,171,707 1,091,905 1,139,022 - 76,033 - 76,033 20,792 52,915 20,792 52,915 34,494 90,680 24,250 75,745 245,115 446,538 - - 1,093,346 1,459,116 - - 1,053,287 858,190 - - 10,278 20,390 - - 2,487,306 427,523 - - 166,589 88,679 - - 111,869 9,477 - - 51,648 71,628 50,064 69,102 3,074 200 875 -
	8,163,796 6,224,656 2,807,091 2,857,116
	6,288 3,606 5,800 3,069 82,270 71,967 53,440 44,762 368,132 287,040 151,209 155,179

35 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 3: INCOME TAX Income tax recognised in profit or loss The major components of tax expense are: Current tax expense R&D tax offset Deferred tax asset: Origination and reversal of temporary differences Benefit of tax losses recognised Recognition of other deferred tax balances not previously recognised Total tax expense/(benefit) 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 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 Recognition of other deferred tax balances not previously recognised R & D tax effect Other Income tax expense/(benefit) reported in the income statement Net Deferred Tax Asset Analysis of deferred tax assets: Tax losses available to offset against future taxable income Accruals and provisions Analysis of deferred tax liabilities: Capitalised research and development Net Deferred Tax Asset	Consolidated Consolidated Parent Parent 2009 2008 2009 2008 $ $ $ $
	78,677 150,801 - 68,811 - (147,971) - (127,083) 162,951 (118,763) 38,618 (58,472) (542,486) (230,000) (484,386) (230,000) 458,229 - 409,646 -
	157,371 (345,933) (36,122) (346,744)
	1,285,963 1,034,852 716,153 482,418
	385,788 310,456 214,845 144,725 23,857 56,397 20,226 50,566 (16,432) (17,800) (16,432) (17,800) - 2,634 - - (153,081) (68,811) (153,081) (68,811) (484,386) (236,943) (484,386) (230,000) 458,229 - 409,646 - (56,604) (147,971) (26,940) (127,083) - (243,895) - (98,341)
	157,371 (345,933) (36,122) (346,744)
	751,769 230,000 693,670 230,000 205,476 209,036 99,796 127,857 957,245 439,036 793,466 357,857 (611,758) - (399,487) - (611,758) - (399,487) - 345,487 439,036 393,979 357,857

36 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 4: SEGMENT REPORTING

Segment Information

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

Consolidated

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 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:	2009 2008 Cents per share Cents per share
	1.00 1.62
	1.00 1.62
	$ $ 1,128,592 1,380,785
	No. No. 113,402,988 84,714,130 $ $ 1,128,592 1,380,785
	No. No. 113,402,988 84,714,130

37 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 5: EARNINGS PER SHARE (continued)

NOTE 5: EARNINGS PER SHARE (continued) (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 Weighted average number of shares used in the calculation of diluted earnings per share (ii) The following potential ordinary shares are not dilutive and are therefore excluded from the calculation in (i) above: Employee options – expiring various dates NOTE 6: DIVIDENDS Paid dividends On fully paid ordinary shares: • Final unfranked ordinary dividend of 0.25 cents per fully paid share for the year ended 30 June 2008 paid to shareholders on 17 October 2008 • Interim unfranked ordinary dividend for the 2009 financial year of 0.25 cents per fully paid share paid to shareholders on 14 April 2009 Total dividends paid in 2009 financial year The company had no available franking credits.	2009 2008 No. No. 113,402,988 84,714,130 113,402,988 84,714,130 3,917,808 3,296,849 Consolidated Parent 2009 2009 $ $ 282,074 282,074 284,178 284,178 566,252 566,252	2009 2008 No. No. 113,402,988 84,714,130 113,402,988 84,714,130 3,917,808 3,296,849 Consolidated Parent 2009 2009 $ $ 282,074 282,074 284,178 284,178 566,252 566,252
		282,074 282,074 284,178 284,178
		566,252 566,252

NOTE 7: CASH AND CASH EQUIVALENTS


OTE 7: CASH AND CASH EQUIVALENTS Cash at bank and on hand	Consolidated Consolidated Parent Parent 2009 2008 2009 2008 $ $ $ $ 1,300,359 1,066,455 1,183,768 896,487
	1,300,359 1,066,455 1,183,768 896,487

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.

38 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 7: CASH AND CASH EQUIVALENTS (continued)

(iii) 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 and amortisation Equity settled share based payment (Increase)/decrease in assets: Current receivables Current inventories Other current assets Non-current receivables Other financial assets Deferred tax assets Increase/(decrease) in liabilities: Current payables Current tax provision 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 NOTE 9: INVENTORIES Raw materials – at cost Finished goods – at net realisable value NOTE 10: OTHER CURRENT ASSETS Prepayments	Consolidated Consolidated Parent Parent 2009 2008 2009 2008 $ $ $ $
	1,128,592 1,380,785 752,275 829,162 298,270 162,397 269,440 135,192 3,395 74,452 3,395 74,452 549,998 (1,171,141) (23,698) (69,583) (3,252) (5,182) - - 41,343 (62,197) 34,765 (32,850) 9,943 9,719 9,943 9,719 (54,291) - (54,291) - 93,549 (300,840) (36,122) (219,661) 24,918 1,137,155 187,144 105,947 (11,384) - - - (14,268) 50,933 32,881 1,859
	2,066,813 1,276,081 1,175,732 834,237
	1,319,799 1,869,797 607,660 583,962 (9,110) (9,110) (9,110) (9,110) 1,310,689 1,860,687 598,550 574,852 - - 3,086,391 2,993,735 28,118 38,061 28,118 38,061 28,118 38,061 3,114,509 3,031,796 22,250 31,982 - - 27,930 14,946 - - 50,180 46,928 - - 54,285 95,628 10,183 44,948 54,285 95,628 10,183 44,948

39 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 11: OTHER FINANCIAL ASSETS Security Deposits Other NOTE 12: PLANT AND EQUIPMENT Plant and equipment, at cost Less accumulated depreciation Net carrying amount Leasehold improvements, at cost Less accumulated depreciation Net carrying amount Total net carrying amount Reconciliations: Consolidated Movements: Net carrying amounts as at 1 July 2007 Additions Depreciation charges Net carrying amounts as at 30 June 2008 Additions Depreciation charges Net carrying amounts as at 30 June 2009 Reconciliations: Parent Net carrying amounts as at 1 July 2007 Additions Depreciation charges Net carrying amounts as at 30 June 2008 Additions Depreciation charges Net carrying amounts as at 30 June 2009	Consolidated Consolidated Parent Parent 2009 2008 2009 2008 $ $ $ $
	103,065 51,348 81,639 29,923 2,574 - 2,574 -
	105,639 51,348 84,213 29,923
	578,713 499,005 376,188 328,134 (369,960) (292,250) (277,992) (227,312)
	208,753 206,755 98,196 100,822
	23,408 - 13,228 - (4,560) - (2,760) -
	18,848 - 10,468 -
	227,601 206,755 108,664 100,822
	Plant & Equipment Leasehold Improvements Total $ $ $ 230,695 - 230,695 78,433 - 78,433 (102,373) - (102,373) 206,755 - 206,755 79,708 23,408 103,116 (77,710) (4,560) (82,270) 208,753 18,848 227,601 106,579 - 106,579 39,771 - 39,771 (45,529) - (45,529) 100,822 - 100,822 48,054 13,228 61,282 (50,680) (2,760) (53,440) 98,196 10,468 108,664

40 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 13: INTANGIBLE ASSETS AND GOODWILL

Consolidated Year ended 30 June 2008 At 1 July 2007, net of accumulated amortisation and impairment Additions Amortisation charge At 30 June 2008, net of accumulated amortisation and impairment Year ended 30 June 2009 At 1 July 2008, net of accumulated amortisation and impairment Additions Amortisation charge At 30 June 2009, net of accumulated amortisation and impairment In-house developed software is expected to have an estimated useful life of ten years following commercialisation. Goodwill is subject to annual impairment testing (see Note 14). No impairment loss was recognised for continuing operations in the 2009 financial year.	Software Development Goodwill Total $ $ $
	1,055,218 997,799 2,053,017 593,936 3,125,986 3,719,922 (90,430) - (90,430)
	1,558,724 4,123,785 5,682,509
	1,558,724 4,123,785 5,682,509 754,721 - 754,721 (216,000) - (216,000)
	2,097,445 4,123,785 6,221,230

Parent Year ended 30 June 2008 At 1 July 2007, net of accumulated amortisation and impairment Additions Amortisation charge At 30 June 2008, net of accumulated amortisation and impairment Year ended 30 June 2009 At 1 July 2008, net of accumulated amortisation and impairment Additions Amortisation charge At 30 June 2009, net of accumulated amortisation and impairment Goodwill is subject to annual impairment testing (see Note 14). No impairment loss was recognised for continuing operations in the 2009 financial year.	Software Development Goodwill Total $ $ $
	1,012,297 54,171 1,066,468 338,552 - 338,552 (90,430) - (90,430)
	1,260,419 54,171 1,314,590
	1,260,419 54,171 1,314,590 359,205 - 359,205 (216,000) - (216,000)
	1,403,624 54,171 1,457,795

41 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 14: IMPAIRMENT TESTING OF GOODWILL AND INTANGIBLES WITH INDEFINITE LIVES

Goodwill acquired through business combinations has been allocated to 5 individual cash generating units (CGU), for impairment testing as follows:

FleetManager[®]
Phoneware
Vircom
Softlog
eFleet

FleetManager[®]

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

The discount rate applied to cash flow projections, including a factor for risk, is 12.50% (2008: 12.00%) and cash flows beyond five years have not been 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.

Phoneware

The recoverable amount of the Phoneware 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 four year period.

The discount rate applied to cash flow projections, including a factor for risk, is 12.50% (2008: 12.00%) and cash flows beyond four years have not been 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 Phoneware products in general.

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, including a factor for risk, is 12.50% (2008: 12.00%) and cash flows beyond two years have not been 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 five year period.

The discount rate applied to cash flow projections, including a factor for risk, is 12.50% (2008: 12.00%) and cash flows beyond five years have not been 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 softlog.onboard™ applications that reside within the operating system of the Multi-Function Device (MFD) in addition to new applications.

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 three year period.

42 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 14: IMPAIRMENT TESTING OF GOODWILL AND INTANGIBLES WITH INDEFINITE LIVES (continued)

The discount rate applied to the cash flow projections, including a factor for risk, is 12.50% (2008: 12.00%). Senior management believes this rate is justified given the reliance by the clients on the products.

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

At 30 June 2009 Carrying amount of goodwill Carrying amount of developed software Carrying amount of acquired intellectual property Total	Consolidated Softlog Phoneware Vircom eFleet FleetManager Total $ $ $ $ $ $
	1,280,585 2,618,217 170,812 - 54,171 4,123,785 510,469 183,352 - - 1,331,624 2,025,445 - - - 72,000 - 72,000
	1,791,054 2,801,569 170,812 72,000 1,385,795 6,221,230

At 30 June 2009 Carrying amount of goodwill Carrying amount of developed software Carrying amount of acquired intellectual property Carrying amount of goodwill	Parent eFleet FleetManager Total $ $ $
	- 54,171 54,171 - 1,331,624 1331,624 72,000 - 72,000
	72,000 1,385,795 1,457,795

At 30 June 2008 Carrying amount of goodwill Carrying amount of developed software Carrying amount of acquired intellectual property Carrying amount of goodwill	Consolidated Softlog Phoneware Vircom eFleet FleetManager Total $ $ $ $ $ $
	1,280,585 2,618,217 170,812 - 54,171 4,123,785 272,301 26,004 - - 1,152,419 1,450,724 - - 108,000 108,000 108,000
	1,552,886 2,644,221 170,812 108,000 1,206,590 5,682,509

At 30 June 2008 Carrying amount of goodwill Carrying amount of developed software Carrying amount of acquired intellectual property Carrying amount of goodwill	Parent eFleet FleetManager Total $ $ $
	- 54,171 54,171 - 1,152,419 1,152,419 108,000 - 108,000
	108,000 1,206,590 1,314,590

43 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 14: IMPAIRMENT TESTING OF GOODWILL AND INTANGIBLES WITH INDEFINITE LIVES (continued)

Key assumptions used in value in use calculations for 30 June 2009 and 30 June 2008

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.
Cash rate – a base rate of 3% as per the Reserve Bank of Australia has been used.
Risk factor – an additional amount of 9.5% has been factored for general business risk.

NOTE 15: 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 Ownership 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 18.

The following table illustrates the number (No.) and weighted average exercise prices of and movements in share 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	2009 No. 2009 Weighted average exercise price 2008 No. 2008 Weighted average exercise price
	3,750,000 $0.12 1,450,000 $0.12 1,000,000 $0.12 2,300,000 $0.12 - - - - 250,000 $0.20 - -
	4,500,000 $0.12 3,750,000 $0.12
	4,500,000 3,750,000

The weighted average remaining contractual life for the share options outstanding as at 30 June 2009 is between 3 and 5 years (2008: 3 and 5 years).

The range of exercise prices for options outstanding at the end of the year was $0.10 - $0.20 (2008:$0.10 - $0.20)

The weighted average fair value of options granted during the year was $0.12 (2008: $0.12).

44 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 15: SHARE BASED PAYMENT PLANS (continued)

The outstanding balance as at 30 June 2009 is represented by:

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;
1,000,000 options over ordinary shares with an exercise price of $0.10 each, exercisable upon meeting the above conditions and until 15 January 2011;
1,000,000 options over ordinary shares with an exercise price of $0.12 each, exercisable upon meeting the above conditions and until 29 May 2011; and
300,000 options over ordinary shares with an exercise price of $0.15 each, exercisable upon meeting the above conditions and until 24 June 2012
500,000 options over ordinary shares with an exercise price of $0.10 each, exercisable upon meeting the above conditions and until 31 July 2013
500,000 options over ordinary shares with an exercise price of $0.15 each, exercisable upon meeting the above conditions and until 17 October 2013

The following table lists the inputs to the model used for the years ended 30 June 2008 and 30 June 2009:

	2009	2008
Volatility (%)	35.15	36.78
Risk-free interest rate (%)	6.23	6.56
Expected life of option (years)	5	5
Exercise price (cents)	10.0 to 15.0	10.0 to 15.0
Weighted average share price at grant date (cents)	7.2	7.7

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.

45 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 16: TRADE AND OTHER PAYABLES

Current: Trade payables (i) Other payables Payables – deferred consideration Provision for annual leave Accrued expenses Unearned Income Non-current: Deferred consideration	Consolidated Consolidated Parent Parent 2009 2008 2009 2008 $ $ $ $
	78,830 179,154 62,095 85,648 308,133 259,340 148,984 96,821 200,000 800,000 - - 230,954 208,374 122,168 116,542 453,675 297,381 187,930 197,795 721,656 786,617 - -
	1,993,248 2,530,866 521,177 496,806
	- 200,000 - -
	- 200,000 - -

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

Information regarding the effective interest rate and credit risk of current payables is set out in Note 19.

NOTE 17: PROVISIONS

Non-current: Provision for long service leave	65,233 79,501 38,871 5,990
	65,233 79,501 38,871 5,990

46 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 18: ISSUED CAPITAL AND RESERVES

Ordinary shares issued and fully paid	Consolidated Consolidated Parent Parent 2009 2008 2009 2008 $ $ $ $
	8,568,924 8,215,208 8,568,924 8,215,208

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

Movement in ordinary shares on issue At 1 July 2007 Issued on 9 May 2008 pursuant to a rights issue Issued on 9 May 2008 as part consideration for acquisition of business assets Issued on 24 June 2008 pursuant to the Stratatel Dividend Reinvestment Plan Share Issue costs At 1 July 2008 Issued on 15 September 2008 as part consideration for acquisition of business assets Issued on 17 October 2008 pursuant to the Stratatel Dividend Reinvestment Plan Issued on 16 April 2009 pursuant to the Stratatel Dividend Reinvestment Plan At 30 June 2009	No. $
	80,340,717 5,846,808 27,062,500 2,165,000 3,000,000 300,000 426,163 36,650 - (133,250)
	110,829,380 8,215,208
	2,000,000 200,000 841,836 56,403 1,908,093 97,313
	115,579,309 8,568,924

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 15.

granted to certain executives and other employees. Refer	Note 15.
*Reserves* Movements in reserves were as follows: Balance 1 July 2008 Equity benefits reserve – options issued to staff Balance 30 June 2009	Consolidated Consolidated Parent Parent 2009 $ 2008 $ 2009 $ 2008 $ 107,769 29,891 107,769 29,891 3,395 77,878 3,395 77,878
	111,164 107,769 111,164 107,769

Nature and purpose of reserves

Employee Equity benefits reserve

This reserve is used to record the value of equity benefits provided to employees as part of their remuneration. Refer to Note 15 for further details of these plans.

47 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 19: FINANCIAL INSTRUMENTS

(a) Capital risk management

Capital risk is managed and monitored by liaising with banks and communicating with shareholders.

Stratatel considers new government legislation and monitors the market place by canvassing information from stockbrokers and investors.

When managing capital, management's objective is to ensure the entity continues as a going concern as well as to maintain optimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain a capital structure that ensures the lowest cost of capital available to the entity.

Management are constantly adjusting the capital structure to take advantage of favourable costs of capital or high returns on assets. As the market is constantly changing, management may change the amount of dividends to be paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

		Consolidated	Consolidated	Parent
		2009	2008	2009	2008
		$	$	$	$
*(a)*	*Categories of financial instruments*
Financial assets
Loans and receivables		1,310,689	1,860,687	598,550	574,852
Cash	and cash equivalents	1,300,359	1,066,455	1,183,768	896,487

Financial liabilities

The Group has no derivative instruments in designated hedging relationships.

(i) Loans and receivables designated as at fair value through profit or loss

Carrying amount of loans and receivables designated as
‘fair value through profit or loss’	1,310,689	1,860,687	598,550	574,852
Changes in fair value attributable to changes in credit risk are recognised during the period.

(b) Financial Risk Management

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.

The Group’s principal financial liabilities are trade payables and hire purchase contracts. The main purpose of these financial liabilities is to raise finance for the Group’s operations. The Group has various financial assets such as trade receivables and cash and short-term deposits, which arise directly from its operations.

It is, and has been throughout 2008 and 2009, the Group’s policy that no trading in derivatives shall be undertaken. The main risks arising from the Group’s financial instruments are cash flow interest rate risk, liquidity risk, and credit risk. The Board of Directors reviews and agrees policies for managing each of these risks which are summarised below.

48 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 19: FINANCIAL INSTRUMENTS (continued)

(c) Price risk – Equity and Commodity

The Group's exposure to commodity and equity securities price risk is minimal.

(d) Foreign currency risk

The Group has minimal exposure to foreign currency risk as the Group trades mainly within Australia.

(e) Interest rate risk

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

Year ended 30 June 2009	within 1year $ 1 to 5 years $ Total $ Weighted average effective interest rate % 1,310,689 - 1,310,689 - 1,310,689 - 1,310,689 1,300,359 - 1,300,359 4.73 1,300,359 - 1,300,359 2,611,048 - 2,611,048 1,993,248 - 1,993,248 - - - 1,993,248 - 1,993,248 within 1year $ 1 to 5 years $ Total $ Weighted average effective interest rate % 1,860,687 - 1,860,687 - 1,860,687 - 1,860,687 1,066,455 - 1,066,455 7.04 1,066,455 - 1,066,455 2,927,142 - 2,927,142 2,530,866 - 2,530,866 - - 200,000 200,000 - 2,530,866 200,000 2,730,866
Consolidated Financial assets Fixed rate: Trade and other receivables Floating rate: Cash Assets Financial liabilities Payables Other payables Year ended 30 June 2008
Consolidated Financial assets Fixed rate: Trade and other receivables Floating rate: Cash Assets Financial liabilities Payables Other payables

Year ended 30 June 2009

within
1year
$
1 to 5
years
$
Total
$
Weighted
average
effective
interest rate
%
1,310,689
-
1,310,689
-
1,310,689
-
1,310,689
1,300,359
-
1,300,359
4.73
1,300,359
-
1,300,359
2,611,048
-
2,611,048
1,993,248
-
1,993,248
-
-
-
1,993,248
-
1,993,248
within
1year
$
1 to 5
years
$
Total
$
Weighted
average
effective
interest rate
%
1,860,687
-
1,860,687
-
1,860,687
-
1,860,687
1,066,455
-
1,066,455
7.04
1,066,455
-
1,066,455
2,927,142
-
2,927,142
2,530,866
-
2,530,866
-
-
200,000
200,000
-
2,530,866
200,000
2,730,866

Consolidated
Financial assets
Fixed rate:
Trade and other receivables
Floating rate:
Cash Assets
Financial liabilities
Payables
Other payables
Year ended 30 June 2008

Consolidated
Financial assets
Fixed rate:
Trade and other receivables
Floating rate:
Cash Assets
Financial liabilities
Payables
Other payables

49 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 19: FINANCIAL INSTRUMENTS (continued)

					Weighted
					average
Year ended 30 June 2009	within	1 to 5			effective
	1year	years		Total	interest rate
	$	$		$	%
Parent
Financial assets
Fixed rate:
Trade and other receivables	598,550		-	598,550	-
	598,550		-	598,550
Floating rate:
Cash Assets	1,183,768		-	1,183,768	4.73
	1,183,768		-	1,183,768
	1,782,318		-	1,782,318
Financial liabilities
Payables	521,177		-	521,177	-
	521,177		-	521,177
					Weighted
					average
	within	1 to 5			effective
Year ended 30 June 2008	1year	years		Total	interest rate
	$	$		$	%
Parent
Financial assets
Fixed rate
Trade and other receivables	574,852		-	574,852	-
	574,852		-	574,852
Floating rate
Cash Assets	896,487		-	896,487	7.04
	896,487		-	896,487
	1,471,339		-	1,471,339
Financial liabilities
Payables	496,806		-	496,806	-
	496,806		-	496,806

For all financial instruments, the net fair value approximates their carrying value.

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

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

Interest rate risk sensitivity analysis

The sensitivity analysis below has been determined based on the exposure to interest rates for both derivative and nonderivative instruments at the reporting date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the change in interest rates.

50 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 19: FINANCIAL INSTRUMENTS (continued)

At reporting date, if interest rates had been 50 basis points higher or lower and all other variables were held constant, the Group’s net profit before tax would increase by $5,460 and decrease by $5,460 respectively (2008: $5,087). This is mainly attributable to the Group’s exposure to interest rates on its variable rate cash deposits.

(f) Credit risk

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

The Group does not hold any credit derivatives to offset its credit exposure.

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

It is the Group's policy that all customers who wish to trade on credit terms are subject to credit verification procedures including an assessment of their independent credit rating, financial position, past experience and industry reputation. Risk limits are set for each individual customer in accordance with parameters set by the board. These risk limits are regularly monitored.

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 and financial instruments are spread amongst a number of financial institutions to minimise the risk of default of counterparties.

Accounts Receivable and Provision

Trade Receivables – Past Due Not Impaired

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

			0-30	31-60	61-90	61-90	+91	+91
			days	days	day	days	days	days
		Total			PDNI*	CI*	PDNI*	CI*
2009	Consolidated	1,310,689	468,562	52,060	84,083	-	50,896		-
	Parent	598,550	308,304	178,368	47,063	-	44,594		-
2008	Consolidated	1,860,687	1,668,360	62,597	36,059	-	93,671		-
	Parent	574,852	510,551	40,842	22,025	-	1,434		-

Past due not impaired ('PDNI') Considered impaired ('CI')

Receivables past due but not considered impaired are: Consolidated $134,979 (2008: $129,730); Parent $91,657 (2008: $23,459).

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

51 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 19: FINANCIAL INSTRUMENTS (continued)

Movements in Allowance for Impairment (Trade Receivables)

Movements in the allowance for impairment loss on trade receivables were as follows:

At 1 July 2008 Reduction in allowance At 30 June 2009	Consolidated Parent 2009 2008 2009 2008 $ $ $ $ 9,110 9,110 9,110 9,110 - - - -
	9,110 9,110 9,110 9,110

At the reporting date there are no significant concentrations of credit risk relating to loans and receivables at fair value through profit or loss. The carrying amount reflected above represents the Group’s maximum exposure to credit risk for such loans and receivables.

(g) Liquidity Risk Management

Ultimate responsibility for liquidity risk management rests with the board of directors, who have built an appropriate liquidity risk management framework for the management of the Group’s short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

NOTE 20: 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 Consolidated Parent Parent 2009 2008 2009 2008 $ $ $ $
	200,000 400,000 200,000 400,000 - 200,000 - 200,000

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 claims

As at 30 June 2009 there is one current employee claim regarding post employment remuneration for which Stratatel may be required to expend funds. Stratatel is defending the claim and the case is continuing. The claim is an unquantifiable contingency. Currently it is not possible to estimate the amounts of any eventual payments, which may be required in relation to this claim.

Guarantees

Stratatel Limited has the following guarantees at 30 June 2009:

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.
52 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 21: EVENTS AFTER THE BALANCE SHEET DATE

Subsequent to the end of the period, Stratatel Limited acquired the business and assets of Resource Systems & Services Pty Ltd through its wholly owned subsidiary Card Manager Pty Ltd (re-named Resource Systems Pty Ltd trading as Stratatel Resource) for total consideration of $500,000 to be paid in eight monthly instalments from the Company’s existing cash reserves.

The financial effects of the above transaction have not been brought into account at 30 June 2009. The operating results and assets and liabilities of the company will be brought into account from 1 July 2009.

Stratatel Limited notes the following changes in the roles and responsibilities of Key Management Personnel, effective 1 July 2009:

Matt Parry was appointed as Chief Executive Officer of Stratatel’s Expense Management Division incorporating Softlog, Phoneware and FleetManager. Matt Parry now has overall responsibility for the day-to-day management of this business as well as achieving the forecasted revenue and profit.
Derek Farrell reduced his work commitments and, from 1 August 2009, acts in a consultancy role to Stratatel Softlog on a part-time basis. A new Branch Manager in Queensland will be appointed.

NOTE 22: AUDITOR’S REMUNERATION

The auditor 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 Consolidated Parent Parent 2009 2008 2009 2008 $ $ $ $
	55,000 61,783 33,000 37,180

53 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 23: 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	2009	2008	2009	2008
Vircom Pty Limited	Australia	100	100	170,204	170,204
Softlog Systems Pty Ltd	Australia	100	100	-	-
Phoneware Pty Ltd	Australia	100	100	-	-

Stratatel Limited is an Australian entity and ultimate parent of the Group. Vircom Pty Limited, Softlog Systems Pty Ltd and Phoneware Pty Ltd are all 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 20.

For the year ended 30 June 2009, the Group has not made any allowance for doubtful debts relating to amounts owed by related parties due to solid payment history (2008: $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.

Transactions with Directors

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

The following table provides the total amount of transactions that were financial year.	entered into with related parties for the relevant
Purchases from Related Parties	2009 $ 2008 $
Grange Consulting Group Pty Ltd Corporate Consultancy Secreterial Services	29,927 31,593 3,937 - 33,864 31,593

Stratatel Limited Chairman Mr Ian Macliver, is the Managing Director of Grange Consulting Group Pty Ltd, which has provided corporate advisory services to the consolidated entity amounting to $29,927 (2007 $31,593) net of GST.

Paul Brown officially handed the Company Secretary responsibilities to Emma McCormack of Grange Consulting Group Pty Ltd in July 2009.The company secretarial services provided by Grange Consulting include providing guidance on corporate compliance requirements pursuant to the Company’s constitution, ASX Listing Rules and Corporations Act, assistances in drafting notices of meeting and announcements; Board documentation, and assistance with preparation of annual and half yearly financial reports. Company ssecretarial service fees for transitional services for June 2009 amounted to $3,937 net of GST.

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.

54 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 24: DIRECTORS AND EXECUTIVE DISCLOSURES

(a) Details of Key Management Personnel

(i) Directors

(i) Directors
I Macliver	Chairman (non-executive)
M Fairclough	Chief Executive Officer / Managing Director
G Lambert	Director (non-executive)
G Baillie	Director (non-executive)
(ii) Executives
P Brown	Company Secretary / Chief Information Officer	Resigned 30 June 2009
M Parry	General Manager – Operations
J Butchers	Chief Financial Officer
J Worsfold	General Manager – Sales	Resigned 3 October 2009
J Slaiman	General Manager – Sales	Promoted 1 October 2009
D Farrell	Branch Manager – Softlog Systems
J Williams	General Manager – Development

Matt Parry was appointed as Chief Executive Officer of Stratatel’s Expense Management Division incorporating Softlog, Phoneware and FleetManager on 1 July 2009. Matt Parry now has overall responsibility for the day-to-day management of this business as well as achieving the forecasted revenue and profit. Mike Fairclough will continue as Managing Director with an increased focus on business development and strategic growth opportunities for Stratatel Limited.

Derek Farrell resigned as Branch Manager, effective from 1st August 2009 and acts in a consultancy role to Stratatel Softlog on a part-time basis.

Paul Brown resigned as Company Secretary and Chief Information Officer (CIO) effective 30 June 2009. Emma McCormack of Grange Consulting Group Pty Ltd was appointed Company Secretary on 1 July 2009 and John Williams assumed responsibilities of the CIO function.

There are no other changes of the key management personnel after the reporting date and the date the financial report was authorised for issue.

55 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 24: DIRECTORS AND EXECUTIVE DISCLOSURES (continued)

(b) Compensation of Key Management Personnel (continued)

(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 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

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 nonexecutive directors of comparable companies when undertaking the annual review process.

The remuneration of non-executive directors for the year ended 30 June 2009 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 incentives).

Fixed Remuneration

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

56 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 24: DIRECTORS AND EXECUTIVE DISCLOSURES (continued)

(b) Compensation of Key Management Personnel (continued)

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 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)

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, in part, be attributed to the remuneration policy and is satisfied that this continued improvement should result in increased wealth to shareholders over the short to medium term.

57 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 24: DIRECTORS AND EXECUTIVE DISCLOSURES (continued)

(b) Compensation of Key Management Personnel (continued)

(ii) Compensation of Key Management Personnel for the year ended 30 June 2009

Table 1: Directors’ remuneration for the year ended 30 June 2009

Table 1: Directors’ remuneration for the year ended 30 June 2009
	Primary benefits Post employment Equity Total
	Salary & Fees $ Bonuses/ Commission $ Allowances $ Superan nuation $ Prescribed benefits $ Options $ $ Performance related %
I Macliver Chairman (non executive) 2008 2009	67,500 85,000 - - - - 6,075 7,650 - - - - 73,575 92,650 - -
M Fairclough Managing Director 2008 2009	311,922 366,778 - - - - 28,073 33,010 - - - - 339,995 399,788 - -
G Lambert Director (non executive) 2008 2009	55,500 65,000 - - - - 4,995 5,850 - - - - 60,495 70,850 - -
G Baillie Director (non executive) 2008 2009	36,000 55,000 - - - - 3,240 4,950 - - - - 39,240 59,950 - -

58 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 24: DIRECTORS AND EXECUTIVE DISCLOSURES (continued)

(b) Compensation of Key Management Personnel (continued)

(ii) Compensation of Key Management Personnel for the year ended 30 June 2009 (continued)

Table 2: Remuneration of the named executives who received the highest remuneration for the year ended 30 June 2009

	Primary benefits Post employment Equity Total
	Salary & Fees $ Bonuses/ Commission $ Allowances $ Superan nuation $ Prescribed benefits $ Options $ $ Performance related %
P Brown_(Resigned 30 June 2009) _Chief Information Officer/Secretary 2008 2009	142,565 149,655 15,596 5,000 - - 14,234 13,919 - - - 1,358 172,395 169,932 9 3
M Parry General Manager – Operations 2008 2009	160,953 189,811 17,430 20,000 - - 16,054 18,883 - - 3,426 7,559 197,863 236,253 9 8
J Worsfold_(Resigned 3 October 2008) _General Manager – Sales 2008 2009	143,910 55,377 25,174 11,200 - - 15,218 5,992 - - - - 184,302 72,569 13 15
J Butchers Chief Financial Officers 2008 2009	108,496 192,619 - 5,000 - - 9,765 17,786 - - - 2,037 118,261 217,442 - 2
D Farrell Branch Manager – Softlog Systems 2008 2009	130,185 130,280 - - 500 - 11,717 11,725 - - - - 142,402 142,005 - -
J Slaiman_(Promoted 1 October 2008)* _General Manager – Sales 2008 2009	- 111,031 - 13,162 - - - 11,570 - - - - - 135,763 - 10

* Remuneration disclosed from promotion

59 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 24: DIRECTORS AND EXECUTIVE DISCLOSURES (continued)

(b) Compensation of Key Management Personnel (continued)

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

	Consolidated	Consolidated	Parent	Parent
	2009	2008	2009	2008
	$	$	$	$
Short-term	1,454,913	1,215,731	1,324,633	1,085,046
Post employment	131,335	109,371	119,610	97,654
Other long-term	10,954	3,426	10,954	3,426
	1,597,202	1,328,528	1,455,197	1,186,126

(iv) Contract for Services

This contract, following a salary review provides Mr. Fairclough with a renegotiated annual salary package of $400,000 which includes superannuation.

(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 a key manager as disclosed below. 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 15.

	Vested	Granted		Terms	and Conditions for each	and Conditions for each	Grant
				Fair Value	Exercise
				per option at	price per		First
			Grant	grant date	option($)		Exercise	Last Exercise
30 June 2009	No.	No.	Date	($)	(note 15)	Expiry Date	Date	Date
Executives
P Brown	200,000	200,000	20/10/08	0.0068	0.15	17/10/13	21/10/08	17/10/13
J Butchers	300,000	300,000	20/10/08	0.0068	0.15	17/10/13	21/10/08	17/10/13
M Parry	500,000	500,000	14/05/09	0.0151	0.10	31/07/13	15/05/09	31/07/13
Total	1,000,000	1,000,000

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Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 24: DIRECTORS AND EXECUTIVE DISCLOSURES (continued)

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

30 June 2009 Directors M Fairclough Executives P Brown_(Resigned 30 June 2009) J Butchers D Farrell M Parry J Worsfold(Resigned 3 October 2008) J Williams Total # Includes forfeitures_ 30 June 2008		Balance 01 Jul 08 Granted as remuneration Options exercised Net change Other # Balance 30 Jun 09
		1,000,000 - - - 1,000,000 300,000 200,000 - - 500,000 - 300,000 - - 300,000 500,000 - - - 500,000 600,000 500,000 - - 1,100,000 300,000 - - - 300,000 300,000 - - - 300,000
		3,000,000 1,000,000 - - 4,000,000
		Balance 01 Jul 07 Granted as remuneration Options exercised Net change Other # Balance 30 Jun 08
Directors M Fairclough Executives P Brown D Farrell M Parry J Worsfold J Williams Total		1,000,000 - - - 1,000,000 300,000 - - - 300,000 - - - 500,000 500,000 300,000 300,000 - - 600,000 300,000 - - - 300,000 300,000 - - - 300,000
		2,200,000 300,000 - 500,000 3,000,000

# Includes forfeitures

61 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 24: DIRECTORS AND EXECUTIVE DISCLOSURES (continued)

(e) Shareholdings of Key Management Personnel (Consolidated)

Ordinary shares held in Stratatel Limited (number)

30 June 2009 Directors I Macliver M Fairclough G Lambert G Baillie Executives P Brown_(Resigned 30 June 2009) D Farrell M Parry J Worsfold(Resigned 3 October 2008)_ J Williams Total	Balance 01 Jul 08 Granted as remuneration On Exercise of Options Net Change Other Balance 30 Jun 09
	1,625,000 - - 875,000 2,500,000 9,386,064 - - 849,452 10,235,516 1,563,443 - - 436,557 2,000,000 4,375,000 - - 714,460 5,089,460 110,000 - - - 110,000 1,000,000 1,000,000 562,566 - - - 562,566 722,800 - - - 722,800 43,790 - - - 43,790
	19,388,663 - - 2,875,469 22,264,132

30 June 2008 Directors I Macliver M Fairclough G Lambert G Baillie Executives P Brown D Farrell M Parry J Worsfold J Williams Total	Balance 01 Jul 07 Granted as remuneration On Exercise of Options Net Change Other Balance 30 Jun 08
	751,442 - - 873,558 1,625,000 8,761,064 - - 625,000 9,386,064 625,943 - - 937,500 1,563,443 - - - 4,375,000 4,375,000 110,000 - - - 110,000 1,000,000 1,000,000 562,566 - - - 562,566 527,800 - - 195,000 722,800 33,790 - - 10,000 43,790
	11,372,605 - - 7,016,058 19,388,663

62 -

Stratatel Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

NOTE 24: DIRECTORS AND EXECUTIVE DISCLOSURES (continued)

(e) Shareholdings of Key Management Personnel (Consolidated)

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:

	Balance at							Balance at
	beginning		Interest		Payments /			end of	Number in
	of period	New loans	charged		reductions	Write-off		period	group
Total	$	$	$		$	$		$	No.
	19,500	-		-	13,333		-	6,167	1
2009	19,500	-		-	13,333		-	6,167	1
	Balance at							Balance at
	beginning		Interest		Payments /			end of	Number in	Nu
	of period	New loans	charged		reductions	Write-off		period	group
Total	$	$	$		$	$		$	No.
	20,000	-		-	(500)		-	19,500	2
2008	20,000	-		-	(500)		-	19,500	2

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, of which one loan has been fully repaid. 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.

63 -

Stratatel Limited

DIRECTORS’ DECLARATION

In the opinion of the directors:
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 2009 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.

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 2009.

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

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I Macliver

Chairman

Dated this 28[th] day of August 2009

64 -

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INDEPENDENT AUDITOR’S REPORT

To the members of STRATATEL LIMITED

Report on the Financial Report

We have audited the accompanying financial report of Stratatel Limited (“the company”), which comprises the balance sheet as at 30 June 2009, the income statement, statement of changes in equity, cash flow statement and notes to the financial statements for the year ended on that date, and the directors’ declaration for both the company and the consolidated entity as set out on pages 22 to 64. The consolidated entity comprises the company and the entities it controlled at the year’s end or from time to time during the 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 judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

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.

HLB Mann Judd (WA Partnership) ABN 22 193 232 714

HLB Mann Judd (WA Partnership) is a member of International, a world-wide organisation of accounting firms and business advisers

65 -

Independence

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

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 2009 and of their performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1(c).

Report on the Remuneration Report

We have audited the Remuneration Report included on pages 9 to 13 of the directors’ report for the year ended 30 June 2009. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s Opinion

In our opinion the Remuneration Report of Stratatel Limited for the year ended 30 June 2009 complies with section 300A of the Corporations Act 2001 .

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HLB MANN JUDD Chartered Accountants

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Perth, Western Australia 28 August 2009

W M CLARK Partner

66 -

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 29 14 47 167 125
	382

There are 45 shareholdings held in less than marketable parcels

(b)

Substantial shareholders

The names of the substantial shareholders listed in the company’s register as at 26 August 2009 are:

Shareholder	Number of ordinary shares held	% held of ordinary share capital
Moutier Pty Ltd	12,031,683	10.41
Mr Mark Jobling	11,690,000	10.11
Mr Michael Fairclough	10,235,516	8.85
ANZ Nominees Ltd	9,805,250	8.84

(c) Voting rights

At members’ meetings, each eligible voter (i.e 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 Emma McCormack

(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

67 -

Stratatel Limited

ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES (continued)

(g) Largest shareholders – ordinary shares (as of 26 August 2009)

			% held of
			issued
		Number of ordinary fully	ordinary
	Name	paid shares held	capital
1	MOUTIER PTY LTD	12,031,683	10.41
2	MR MARK CHRISTOPHER JOBLING	11,690,000	10.11
3	MR MICHAEL FAIRCLOUGH	10,235,516	8.85
4	ANZ NOMINEES LIMITED	9,805,250	8.84
5	JDV LIMITED	5,150,845	4.46
6	GRAMELL INVESTMENTS PTY LIMITED	5,089,460	4.40
7	UBS NOMINEES PTY LTD	3,679,069	3.18
8	CORNELA PTY LTD	2,500,000	2.16
9	MR DAVID SCHWARTZ	2,231,100	1.93
10	DEPONENT SERVICES PTY LTD	2,000,000	1.73
11	TT NICHOLLS PTY LTD	1,700,000	1.47
12	GLEN ALPINE PTY LTD	1,642,258	1.42
13	TOPSFIELD PTY LTD	1,633,333	1.41
14	BRINDLE HOLDINGS PTY LTD	1,533,308	1.33
15	MR G LORD + MRS N LORD + MR R PECK	1,526,115	1.32
16	ZAP NOMINEES	1,300,000	1.12
17	JWS INVESTMENT PTY LTD	1,298,042	1.12
18	STARLET PROPERTIES PTY LTD	1,119,795	0.97
19	TRADINGWORXS	1,062,186	0.92
20	MR D FARRELL AND MSD FARRELL	1,000,000	0.87
	Top 20 Shareholders (Grouped) as at 26 August 2009	76,227,960	68.55

(h) Stock exchange listing

Quotation has been granted for all the ordinary shares of the Company on the Australian Securities Exchange.

(i) Restricted securities

Restricted securities as at 28 August 2009 are 503,555 ordinary shares held by Company employees.

(j) Unquoted securities

The unquoted securities of the Company as at 28 August 2009 are 4,500,000 Options are outlined below

Number of Options	Exercise Price	Expiry Date	Number of Holders
1,200,000	$0.10	30/11/2011	4
1,000,000	$0.10	15/01/2011	1
1,000,000	$0.12	25/05/2011	2
500,000	$0.10	24/06/2013	1
300,000	$0.15	24/06/2013	1
500,000	$0.15	17/10/2013	2

68 -

AI assistant

JCURVE SOLUTIONS LTD — Annual Report 2009

65158_rns_2009-08-27_059f5cef-b5e5-44df-a79c-0e691d7d8db4.pdf

STRATATEL INCREASES REVENUE BY 31% AND EBITDA BY 36% AND DECLARES FURTHER DIVIDEND

Final Report and Audited Accounts

Reporting Period

Results For Announcement To The Market

Dividends

Net Tangible Assets / Earnings Per Share

Independent Audit Report

Accounting Policies, Estimation Methods and Measurements

Explanation of Result

Review of Operations

Overview

Business Structure

Outlook for the Company

Annual Financial Report For the year ended 30 June 2009

CORPORATE INFORMATION

ABN 63 088 257 729

Directors

Company Secretary

Registered office

Principal place of business

Share Register

Solicitors

Auditors

DIRECTORS’ REPORT

Directors

Names, qualifications, experience and special responsibilities

Michael James Fairclough MAICD (Managing Director)

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

Graham Baillie (Non-Executive Director)

DIRECTORS’ REPORT (continued)

Company Secretary

Emma Jane McCormack B.Com, CA, SA Fin

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

DIRECTORS’ REPORT (continued)

Interests in the shares and options of the company and related bodies corporate (continued)

Dividends

DIRECTORS’ REPORT (continued)

Principal Activities

Review of operations

Group overview

DIRECTORS’ REPORT (continued)

Operating results for the year

Shareholder returns

Risk management

Significant changes in the state of affairs

Significant events after balance date

Likely developments and expected results

Environmental legislation

Indemnification and insurance of Directors and Officers

DIRECTORS’ REPORT (continued)

Remuneration report

Remuneration philosophy

Remuneration committee

Remuneration structure

Non-executive director remuneration

Senior executive and executive director remuneration

Fixed Remuneration

DIRECTORS’ REPORT (continued)

Variable Remuneration

Short Term Incentive (STI)

Long Term Incentive (LTI)

Employment Contracts

DIRECTORS’ REPORT (continued)

DIRECTORS’ REPORT (continued)

DIRECTORS’ REPORT (continued)

Table 3: Options granted as part of remuneration

DIRECTORS’ REPORT (continued)

Directors’ Meetings

Proceedings on behalf of the company

Auditor Independence and Non-Audit Services

Non-Audit Services

CORPORATE GOVERNANCE STATEMENT

Lay solid foundations for management and oversight

Structure of the Board

CORPORATE GOVERNANCE STATEMENT (continued)

Performance

Remuneration Committee

JCURVE SOLUTIONS LTD Annual Report 2009