ORCODA LIMITED — Annual Report 2006

Oct 5, 2006

2006 Annual Report

ABN 86 009 065 650

SmartTrans Holdings Limited

2006 Annual Report

TABLE OF CONTENTS

Chairman's Report
Directors' Report
Independent Audit Report
Directors' Declaration
Income Statements
Balance Sheets
Statements of Changes in Equity
Cash Flow Statements
Notes to the Financial Statements
Auditor's Independence Declaration
Corporate Governance
Shareholder Information
Summary of Mining Tenements

CORPORATE DIRECTORY

Directors

John P C FORSYTH AM Chairman James P LAURIE Executive Director BSc, MAusIMM, FAICD Andrew D FORSYTH Non-executive Director LIb. FAICD

Company Secretary

John W MILLARD

Senior Management

James P LAURIE

Executive Director

Registered Office

Suite 3, First Floor 614 Newcastle Street Leederville WA 6007

Head Office

Suite 3, First Floor 614 Newcastle St LEEDERVILLE WA 6007 Telephone: (61-8) 9228 1199 Facsimile: $(61-8)$ 9228 2299

email: smarttrans@smarttrans.com.au Homepage: www.smarttrans.com.au

Auditors

RSM Bird Cameron Partners 8 St Georges Terrace PERTH WA 6000

Bankers

Westpac Banking Corporation 275 George Street SYDNEY NSW 2000

Solicitors

Deacons Level 2. 1 Alfred Street Circular Quay SYDNEY NSW 2000

Securities Quoted

Australian Stock Exchange Limited Home Exchange - Australian Stock Exchange (Perth) Limited

Share Registry

Computershare Registry Services Level 2, 45 St Georges Terrace PERTH WA 6000

Telephone:	$(61-8)$ 9323 2000
Facsimile:	$(61-8)$ 9323 2033

CHAIRMAN'S REPORT

EXPLORATION PROJECTS

South Connors Arch Project (109,000 hectares)

This project covers thirteen tenements in the South Connors Arch Province which is prospective for porphyrystyle copper gold deposits and epithermal gold deposits. The Company holds 60% equity in eight tenements in the "Connors Arch Joint Venture" and 29% equity in five other tenements in the "Waitara Joint Venture".

SmartTrans conducted a ground magnetics survey and a drilling program of widely spaced deep holes at the "Instinct" Prospect near Mount Mackenzie. Gold, copper, silver, lead and zinc mineralisation was intersected in highly altered breccias and intrusive rocks. This is interpreted to be in the periphery of a large porphyry system situated below a thick mantle of younger nonmineralised volcanic rocks. In other locations, these systems are known to yield world-class deposits of copper and gold. Further work, including additional geophysical surveys and deep drilling, is planned for this project.

At Waitara, Midas Resources completed a review of all prospects and identified two important targets. One is a strong copper-molybdenum anomaly covering an area of eight to ten square kilometres and the second is an epithermal gold prospect with similarities to the Vera-Nancy deposit in North Queensland. Midas intends to carry out further evaluation of these prospects. Midas withdrew from the joint venture in respect of EPMs 10131, 10133 and 12355. Equity in these tenements has reverted to SmartTrans (60%) and AOM (40%).

Riversleigh Base Metals Project (78,000 hectares)

This project covers the "Grevillea" prospect and various other zinc-lead-silver prospects in the Carpentaria Zinc Province in Northern Queensland. These prospects have the potential to host a significant zinc-lead-silver deposit and the Company's consultant, Flagstaff Geoconsultants, advised that there is an interesting similarity in size and mineralogy between the Grevillea West deep conductor and the mineralised Macarthur River sub-basin.

SmartTrans has accepted an offer from Zinifex Limited to form a joint venture covering all of the Company's tenements at Riversleigh.

Under the terms of the proposed agreement, Zinifex Limited can earn 70% equity in the tenements by expenditure of at least \$10 million over 7.5 years to the completion of a Bankable Feasibility Study.

Zinifex and SmartTrans are currently in the process of finalising the formal Joint Venture Agreement and neither party is bound until that agreement is signed.

CONSIGNMENT, ROUTE AND DELIVERY OPTIMISATION, PROOF OF DELIVERY AND MOBILE DATA SUBSIDIARY (95% equity)

SmartTrans Limited marginally increased its revenue over the previous year and, whilst it incurred a significant loss, the business continues to expand.

Three major clients, Sigma Pharmaceuticals, ISS Cleaning, and John Fairfax Holdings, signed contracts with SmartTrans during the year and several current clients have indicated their intention to expand their existing installations to cover other sites and additional SmartTrans products and services.

The Company has integrated its consignment, route and delivery optimisation, proof-of-delivery and mobile data products into a new additional single product, "SmartTrans $\sim$ Solution $\sim$ This provides an attractive opportunity for customers to improve their profitability and enhance customer benefits.

Details of these systems and the benefits they provide to our customers can be seen on the Company's website www.smarttrans.com.au.

On behalf of Directors, my thanks go to our team of staff who have worked extremely hard during the year.

John Forsyth AM Chairman

22 September 2006

DIRECTORS' REPORT

Your directors present their report on the economic entity consisting of SmartTrans Holdings Limited and the entity it controls at the end of and during the year ended 30 June 2006.

Directors

The directors' names and qualifications during the financial year and up to the date of this report are:

John P C Forsyth AM James P Laurie BSc, MAusIMM, FAICD Andrew D Forsyth LIb, FAICD

John P C Forsyth AM - Chairman

Chairman of directors of the Dymocks Group of Companies, SmartTrans Ltd, Tandragee Pty Limited, Coolgardie Units Pty Limited and Jamajon Pty Ltd. No Directorships of other listed companies are held.

James P Laurie - Director

Director and geologist with over twenty years in mining and exploration for gold and base metals. Also a director of SmartTrans Limited. No Directorships of other listed companies are held.

Andrew D Forsyth - Director

Solicitor and a director of Dymocks Group of Companies, SmartTrans Limited, Tandragee Pty Limited, Coolgardie Units Pty Limited and Jamajon Pty Ltd. No Directorships of other listed companies are held.

Company Secretary

John W Millard

Greater than 40 years in company secretarial practice and financial accounting.

Dividends

There were no dividends declared or paid during the course of the financial year and no dividend is recommended.

Principal Activities

The principal activities of the Company during the year were mineral exploration and an investment in a consignment, route and delivery optimisation, proof of delivery and mobile data company.

Operating Results

The consolidated operating loss of the economic entity amounted to \$1,449,620 (2005: \$1,295,202 loss).

Review of Operations

For further information refer to Chairman's Report.

Changes in State of Affairs

During the financial year there was no significant change in the state of affairs of the economic entity except that the Company raised \$2.1 million from the exercise of options.

Likely Developments and Results

The likely developments, future prospects and business strategies, of the economic entity for subsequent years will depend upon exploration success at all or any of its projects and the success of the consignment, route and delivery optimisation, proof of delivery and mobile data business.

Significant Events after the Balance Date

There has not been any matter or circumstance that has arisen since the end of the financial year that has or may significantly affect the operations, results or state of affairs of the economic entity in future financial years.

Environmental Regulation

The Company is committed to environmental care and aims to carry out its activities in an environmentally-responsible and scientifically-sound way. In performing exploration activities, some disturbance of the land in the creation of tracks, drill rig pads, sumps and the clearing of vegetation occurs. These activities have been managed in a way that reduces environmental impact to a practical minimum. Rehabilitation of any land disturbance commences as soon as practicable after exploration activity in an area has been completed.

The Company has, as far as the directors are aware, complied with all statutory requirements relating to its exploration activities.

Non-Audit Services

The economic entity has engaged RSM Bird Cameron on assignments additional to their statutory audit duties. These assignments involved provision of professional services, accounting assistance and preparation of the Company's income tax return for which RSM Bird Cameron was paid \$7,600 and \$3,500 respectively.

The Board of Directors is satisfied that the provision of non-audit services by the auditor did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

• a) all non-audit services have been reviewed by the Board of Directors to ensure they do not impact on the integrity and objectivity of the auditor; and
• none of the services undermines the general principles b). relating to auditor independence as set out in Professional Statement F1.

Directors' and Executives' Emoluments

Directors' and Executives' emoluments are disclosed in Note 15.

DIRECTORS' REPORT (Cont.)

Insurance of Officers or Auditors

During the financial year, SmartTrans Holdings Ltd paid a premium of \$48,730 to insure all Directors and Officers of the economic entity for all liabilities and costs relating to any claim made against them arising out of their conduct whilst acting as a Director or Officer of the economic entity, other than conduct involving a wilful breach of duty in relation to the economic entity.

Meetings of Directors

The following table sets out the number of meetings of the Company's directors during the year ended 30 June 2006 and the number of meetings attended by each director:

Number of meetings held: 6

Director	No. of meetings	No. of
	held whilst	Meetings
	Director	Attended
John P C Forsyth AM	h	6
James P Laurie	6	6
Andrew D Forsyth	h	6

Corporate Governance

In recognising the need for the highest standards of corporate behaviour and accountability, the directors of SmartTrans Holdings Limited support and have adhered to the principles of corporate governance. The Company's statement of corporate governance practice is included in this Annual Report.

Proceedings on Behalf of Company

No person has applied for leave of Court to bring proceedings on behalf of the Company or to 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 vear.

Adoption of Australian Equivalents to IFRS

As a result of the introduction of Australian equivalents to International Financial Reporting Standards (IFRS), the Company's financial report has been prepared in accordance with those Standards. There is no major impact on the Income Statement of the Company as a result of the adoption of IFRS.

REMUNERATION REPORT (AUDITED)

Your directors present their Remuneration Report for the period 1 July 2005 to 30 June 2006.

Role of Board of Directors

The Board determines the appropriate nature and amount of remuneration. The Board seeks to ensure that executive reward satisfies the following criteria for good reward governance practice:

• competitiveness and reasonableness: $\bullet$
• $\bullet$ acceptability to shareholders;
• alignment of executive remuneration to performance; $\bullet$
• transparency: and $\bullet$
• capital management.

Non-Executive Directors

Fees paid to non-executive directors reflect the demands which are made on non-executive directors in the current corporate governance environment and are reviewed annually by the Board of Directors to ensure such fees are appropriate and not out of line with the market. Remuneration of non-executive directors is comprised of a base fee only. Non-executive directors are not entitled to participate in share-based compensation.

Executives

Executive director and key management personnel remuneration comprises base salary and superannuation. Base pay is reviewed annually by the Board having regard to the overall levels of remuneration of executives in comparable Australian companies.

Chairman

The services of the Chairman are provided by Dymocks Pty Ltd to the Company, the details of which are disclosed in Note 17(b), and were confirmed by the Board at a meeting held on November 22, 1990. The level of the remuneration was recommended to the Board by the then Chief Executive Officer with the benefit of research into published information as to the level of remuneration paid to chairpersons of comparable companies.

Letter of Appointment

Remuneration and other terms of employment for the executive director are formalised in a letter of appointment that also contains comprehensive provisions in relation to termination, confidentiality and suspension.

Remuneration of Directors and Key Management Personnel

Note 15 sets out the remuneration of SmartTrans Holdings directors and key management personnel.

DIRECTORS' REPORT (Cont.)

Directors' Interest in Shares

Director	No. of Shares
John P C Forsyth AM	328.723.957
Andrew D Forsyth	19.845.738
James P Laurie	128.571

Auditor's Independence Declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is included in these financial statements.

Signed in accordance with a resolution of the Board of Directors.

Tames Caurie.

JAMES P LAURIE Director Perth, Western Australia

Dated: 22 September 2006

Chartered Accountants

RSM Bird Cameron Partners

8 St Georges Terrace Perth WA 6000 GPO Box R1253 Perth WA 6844 T+61 8 9261 9100 F+61 8 9261 9111 www.rsmi.com.au

INDEPENDENT AUDIT REPORT

TO THE MEMBERS OF

SMARTTRANS HOLDINGS LIMITED

Scope

The financial report, remuneration disclosures and directors' responsibility

The financial report comprises the balance sheet, income statement, statement of changes in equity, cash flow statement, accompanying notes to the financial statements and the directors' declaration for both SmartTrans Holdings Limited (the company) and SmartTrans Holdings Limited and its controlled entities (the consolidated entity), for the year ended 30 June 2006. The consolidated entity comprises both the company and the entities it controlled during that year.

The company has disclosed information about the remuneration of key management personnel (remuneration disclosures) as required by Accounting Standards AASB 124 Related Party Disclosures (AASB 124), under the heading "remuneration report" on page 3 of the directors' report, as permitted by the Corporations Regulations 2001.

The directors of the company are responsible for the preparation and true and fair presentation of the financial report in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error and for the accounting policies and accounting estimates inherent in the financial report. The directors are also responsible for the remuneration disclosures contained in the directors' report.

Audit approach

We conducted an independent audit in order to express an opinion to the members of the company. Our audit was conducted in accordance with Australian Auditing Standards, in order to provide reasonable assurance as to whether the financial report is free of material misstatement and the remuneration disclosures comply with AASB 124 and the Corporations Regulations 2001. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal control and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected.

We performed procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001, including compliance with Accounting Standards and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the company's and the consolidated entity's financial position and of their performance as represented by the results of their operations, changes in equity and cash flows. We also performed procedures to assess whether the remuneration disclosures comply with AASB 124 and the Corporations Regulations 2001.

$-5 -$

Liability limited by a scheme approved under Professional Standards Legislation

Major Offices in: Perth, Sydney, Melbourne, Adelaide and Canberra ABN 36 965 185 036

RSM Bird Cameron Partners is an independent member firm of RSM International, an affiliation of independent accounting and consulting firms.

1999-1999
1999 - Paris Hornes, Amerikaansk politik
1999 - Paris Hornes, Amerikaansk politik

We formed our audit opinion on the basis of these procedures, which included:

• examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial report and remuneration disclosures; and
• assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors.

While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal controls.

Independence

In conducting our audit, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

Audit Opinion

In our opinion,

• the financial report of SmartTrans Holdings Limited: $(a)$
• gives a true and fair view, as required by the Corporations Act 2001 in Australia, of the financial position of the company and the consolidated entity as at 30 June 2006 and of their performance for the year ended on that date; and
• is presented in accordance with the Corporations Act 2001, Accounting Standards and other mandatory financial reporting requirements in Australia and the Corporations Regulations 2001.
• the remuneration disclosures that are contained on page 3 of the directors' report comply with AASB 124 and the $(b)$ Corporations Regulations 2001.

RSM Bird Cameron Partners

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

RSM BIRD CAMERON PARTNERS Chartered Accountants

Suunitt

S C CUBITT Partner

Perth, WA Dated: 22 September 2006

DIRECTORS' DECLARATION

In the directors' opinion:

• the financial statements and notes as set out in pages 8 to 25, are in accordance with the Corporations Act 2001 a. including:
• complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional i. reporting requirements; and
• ii. giving a true and fair view of the company's and consolidated entity's financial position as at 30 June 2006 and of its performance, as represented by the results of their operations, changes in equity and their cash flows for the financial year ended on that date; and
• there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and $\mathbf b$ . payable; and
• the audited remuneration disclosures set out on page 3 of the directors' report comply with Accounting Standards $\mathbf{c}$ . AASB 124 Related Party Disclosures and the Corporations Regulations 2001.

The directors have been given the declarations by the chief executive officer and chief financial officer required by section 295A of the Corporations Act 2001.

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

armes Cauvie.

JAMES P LAURIE Director

Perth, Western Australia

Dated: 22 September 2006

INCOME STATEMENTS

For the year ended 30 June 2006

		Consolidated		Company
	Note	2006	2005	2006	2005
		\$	\$	\$	S
Revenue	2	1,044,417	898,355	567,029	188,525
Employee salaries and benefits expense		(1,069,817)	(722, 543)	(318, 184)	(254, 581)
Depreciation and amortisation expense	3	(131,986)	(133,754)	(6,076)	(10, 268)
Management and administration services expense	17(b)	(240,000)	(240,000)	(240,000)	(240,000)
Other expenses		(494, 632)	(618, 678)	(168,050)	(455, 240)
Material and installation costs		(557, 602)	(478, 582)
Provisions	3			(1, 130, 576)	(467, 460)
Loss before income tax	3	(1,449,620)	(1,295,202)	(1, 295, 857)	(1,239,024)
Income tax expense	4
Loss for the year		(1,449,620)	(1,295,202)	(1,295,857)	(1,239,024)
Loss attributable to minority equity interests
Loss attributable to members of the parent entity		(1,449,620)	(1,295,202)	(1,295,857)	(1.239, 024)
Basic loss per share (cents per share)	18	(0.34)	(0.54)
Diluted loss per share (cents per share)	18	(0.34)	(0.54)

BALANCE SHEETS

As At 30 June 2006

			Consolidated		Company
	Note	2006	2005	2006	2005
		\$	$\pmb{\mathbb{S}}$	\$	\$
Current Assets
Cash and eash equivalents	5	2,584,044	2,047,970	2,492,636	1,982,278
Trade and other receivables	6	234,425	196,637	11,302	71,762
Other current assets	7	6,516	12,337	872	830
Total Current Assets		2,824,985	2,256,944	2,504,810	2,054,870
Non-Current Assets
Trade and other receivables	6	64,342	64,192	855,775	498,775
Other financial assets	8	36,379	36,379	36,381	36,381
Property, plant and equipment	9	65,299	249,340	8,419	187,463
Exploration, evaluation and development costs	10	4,404,968	4,279,929	4,404,968	4,279,929
Intangible assets	$\mathbf{1}$	452,246	372,180
Total Non-Current Assets		5,023,234	5,002,020	5,305,543	5,002,548
TOTAL ASSETS		7,848,219	7,258,964	7,810,353	7,057,418
Current Liabilities
Trade and other payables	12	417,588	406,336	133,047	92,267
Provisions	13	198,434	162,359	133,636	117,172
TOTAL LIABILITIES		616,022	568.695	266,683	209,439
NET ASSETS		7,232,197	6.690.269	7,543,670	6,847,979
Equity
Issued capital	14	53,053,388	51,061,840	53,053,388	51,061,840
Accumulated losses		(45,821,191)	(44,371,571)	(45,509,718)	(44,213,861)
Parent interest		7,232,197	6,690,269	7,543,670	6,847,979
Minority equity interest
TOTAL EQUITY		7,232,197	6,690,269	7,543,670	6,847,979

STATEMENTS OF CHANGES IN EQUITY

For the year ended 30 June 2006

	Note		Consolidated
		Ordinary Share Capital	Accumulated Losses	Total Equity
		\$	\$	\$
Balance at 1 July 2004		49,130,498	(43,076,369)	6,054,129
Shares issued during the year		2,105.810		2,105.810
Transaction costs		(174, 468)	$\overline{\phantom{a}}$	(174, 468)
Loss attributable to members of parent entity		$\overline{r}$	(1,295,202)	(1, 295, 202)
Balance at 30 June 2005		51,061,840	(44,371,571)	6,690,269
Balance at 1 July 2005		51,061,840	(44,371,571)	6,690,269
Shares issued during the year		2,026,751		2,026,751
Transaction costs		(35,203)		(35,203)
Loss attributable to members of parent entity			(1, 449, 620)	(1, 449, 620)
Balance at 30 June 2006	14	53,053.388	(45,821,191)	7,232,197

		Ordinary Share Capital	Accumulated Losses	Total Equity
		\$	\$	\$
Balance at I July 2004		49,130.498	(42,974,837)	6,155,661
Shares issued during the year		2,105,810		2,105,810
Transaction costs		(174, 468)		(174, 468)
Loss attributable to members of parent entity			(1,239,024)	(1,239,024)
Balance at 30 June 2005		51,061.840	(44,213,861)	6,847,979
Balance at 1 July 2005		51,061,840	(44,213,861)	6,847,979
Shares issued during the year		2,026,751		2,026,751
Transaction costs		(35,203)		(35,203)
Loss attributable to members of parent entity			(1, 295, 857)	(1,295,857)
Balance at 30 June 2006	14	53,053,388	(45,509,718)	7,543,670

CASH FLOW STATEMENTS

For the year ended 30 June 2006

			Consolidated		Company
	Note	2006	2005	2006	2005
		\$	$\mathbb{S}$	\$	S
Cash Flows from Operating Activities
Receipts from customers		782,556	718,453	9,387	41,361
Payments to suppliers and employees		(2,314,022)	(1,657,136)	(575,754)	(700, 487)
Exploration and evaluation expenditure		(688, 141)	(460,215)	(688, 141)	(460,215)
Interest received		91,174	55,124	90,071	54,387
Net cash used in Operating Activities	21	(2,128,433)	(1,343,774)	(1,164,437)	(1,064,954)
Cash Flows from Investing Activities
Payments for plant and equipment	9	(38, 564)	(9,732)	(7,069)
Proceeds from sale of plant and equipment		256,099		256,099
Payments for software development	$\overline{11}$	(169, 484)	(66,219)
Loans to controlled entities				(1, 190, 691)	(410, 119)
Net cash provided by/(used in) Investing Activities		48,051	(75, 951)	(941, 661)	(410, 119)
Cash Flows from Financing Activities
Proceeds from joint venture partners		624,908	442,000	624,908	442,000
Proceeds from Issue of Shares, net		1,991,548	1,931,342	1,991,548	1,931,342
Repayment of borrowings			(2,052)
Net cash provided by Financing Activities		2,616,456	2,371,290	2.616,456	2.373.342
Net increase in cash and cash equivalents		536,074	951,565	510,358	898,269
Cash and eash equivalents at the beginning of year		2,047,970	1,096,405	1,982,278	1,084,009
Cash and cash equivalents at the end of year	5	2,584,044	2,047,970	2,492,636	1,982,278

For the year ended 30 June 2006

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards, Urgent Issues Group Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The financial statements cover the economic entity of SmartTrans Holdings Limited and controlled entities and SmartTrans Holdings Limited as an individual parent entity. SmartTrans Holdings Limited is a listed public company, incorporated and domiciled in Australia.

The financial statements of Smarttrans Holdings Limited and controlled entities, and SmartTrans Holdings Limited as an individual parent entity comply with all Australian equivalents to International Financial Reporting Standards (AIFRS) in their entirety.

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

Basis of Preparation

First-time Adoption of Australian Equivalents to International Financial Reporting Standards

SmartTrans Holdings Limited and controlled entities, and SmartTrans Holdings Limited as an individual parent entity have prepared financial statements in accordance with the Australian Equivalents to International Financial Reporting Standards (AIFRS) from 1 July 2005. Except for the reclassification of the route optimisation and mobile data systems technology, amounting to \$372,180 as at 30 June 2005, from the property, plant and equipment to intangibles, the adoption of Australian Equivalents to International Financial Reporting Standards has no material impact on the Income Statements of the Company and controlled entities.

The accounting policies set out below have been consistently applied to all years presented.

Reporting Basis and Conventions

The financial statements have been prepared on an accruals basis and are based on historical costs except for financial assets and financial liabilities for which the fair value basis of accounting has been applied.

Accounting Policies

(a) Principles of consolidation

A controlled entity is any entity SmartTrans Holdings Limited has the power to control the financial and operating policies of so as to obtain benefits from its activities.

A list of controlled entities is contained in Note 8 to the financial statements. All controlled entities have a June financial year end.

All inter-company balances and transactions between entities in the economic entity, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the parent entity.

Where controlled entities have entered or left the economic entity during the year, their operating results have been included/excluded from the date control was obtained or until the date control ceased.

Minority equity interests in the equity and results of the entities that are controlled are shown as a separate item in the consolidated financial report.

(b) Income tax

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

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

For the year ended 30 June 2006 (Cont)

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)

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

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

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

(c) Recoverable amount of non-current assets

The carrying values of non current assets are recorded at their recoverable amounts, which are determined by reference to the present value of future net eash flows expected to be generated by those assets.

The present value of future net cash flows expected to be generated by the parent entity's investment in SmartTrans Ltd cannot be assessed with certainty as it is dependent upon a continuation of the successful development and commercialisation of the route optimisation and mobile data systems technology. Although the directors are budgeting for the business to be profitable from and including the year ending 30 June 2007, on the basis of conservatism and prudence, the directors have elected to raise provisions against the parent entity's investment in and loan to SmartTrans Ltd until the budgeted profit has been achieved.

(d) Property, plant and equipment

Each class of property, plant and equipment is carried at cost less any accumulated depreciation and any impairment losses.

Property

Freehold land and buildings are carried at cost and the property was sold during the year.

Plant and equipment

Plant and equipment are measured on the cost basis.

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets.

Depreciation

The depreciable amount of all fixed assets is depreciated on a straight-line basis over their useful lives to the economic entity commencing from the time the asset is held ready for use.

The useful lives for each class of depreciable assets are:

Class of Fixed Asset	Useful lives
Buildings	40 years
Plant and equipment	$3$ to $5$ years

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the income statement.

For the year ended 30 June 2006 (Cont)

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)

(e) Exploration, evaluation and development expenditure

Exploration, evaluation and development expenditure is accumulated in respect of each identifiable area of interest. The expenditure relating to an area of interest is carried forward provided the rights to tenure of the area of interest are current, and provided further that either:-

• it is expected that the expenditure will be recovered through successful development and exploitation of the area of $(i)$ interest, or alternatively by its sale, or
• exploration and/or evaluation activities in the area of interest have not yet reached a stage which permits a reasonable $(ii)$ assessment of the existence or otherwise of economically recoverable reserves and active and significant operations in, or in relation to, the area are continuing.

Accumulated expenditure in relation to an abandoned area is written off in full against profit in the year in which the decision to abandon the area is made.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward expenditure in relation to an area of interest.

Site restoration is completed after the end of each exploration phase and the restoration costs are included as part of the explorations costs.

(f) Financial instruments

Recognition

Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.

Held- to- maturity investments

The investments have fixed maturities, and it is the group's intention to hold these investments to maturity. Any held-tomaturity investments held by the group are stated at amortised cost using the effective interest rate method.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method.

Available-for-sale financial assets

Available-for-sale financial assets include any financial assets not included in the above categories. Available-for-sale financial assets are reflected at fair value. Unrealised gains and losses arising from changes in fair value are taken directly to equity.

Financial liabilities

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

Impairment

At each reporting date, the group assess whether there is objective evidence that a financial instrument has been impaired. In the case of available-for sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether impairment has arisen. Impairment losses are recognised in the income statement.

(g) Impairment of assets

At each reporting date, the group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset's fair value less costs to sell and value in use, is compared to the asset's carrying value. Any excess of the asset's carrying value over its recoverable amount is expensed to the income statement.

Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the eash-generating unit to which the asset belongs.

For the year ended 30 June 2006 (Cont)

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)

(h) Interests in joint ventures

The economic entity's share of the assets, liabilities, revenue and expenses of joint venture operations are included in the appropriate items of the consolidated income statements and balance sheets. Details of the economic entity's interests are shown in Note 22.

(i) Intangibles

Goodwill

Goodwill on consolidation is initially recorded at the amount by which the purchase price for a business or for an ownership interest in a controlled entity exceeds the fair value attributed to its net assets at date of acquisition. Goodwill on consolidation was written off to income statements in previous years.

Research and development

Expenditure during the research phase of a project is recognised as an expense when incurred. Products and software development costs, including the consolidated entity's route optimisation and mobile data systems technology, are capitalised only when technical feasibility studies identify that the project will deliver future economic benefits and these benefits can be measured reliably.

Products and software development costs have a finite life and are amortised on a systematic basis over the useful live of the project which is estimated to be 4 to 5 years.

(j) Employee benefits

Provision is made for the Company's liability for employee benefits arising from services rendered by employees to balance sheet date. Employee benefits expected to be settled within one year together with benefits arising from wages and salaries and annual leave which will be settled after one year, have been measured at their nominal amount. Other employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

(k) Earnings per share

Basic earnings per share is determined by dividing the operating loss after income tax attributable to members of SmartTrans Holdings Limited by the weighted average number of ordinary shares outstanding during the financial year.

Diluted earnings per share are calculated by dividing the operating loss after income tax attributable to members of SmartTrans Holdings Limited by the weighted average number of ordinary shares outstanding during the financial year, adjusted for the effects of all dilutive potential ordinary shares.

(l) Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and less bank overdrafts if any.

(m) Comparative figures

Where required by Accounting Standards comparative figures have been adjusted to conform with changes in presentation for the current financial year.

(n) Revenue

Revenue from the sale of goods is recognised upon the delivery of goods to customers. Revenue from the rendering of a service is recognised upon the delivery of the service to the customers. Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

For the year ended 30 June 2006 (Cont)

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)

(o) Goods and services tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheets are shown inclusive of GST.

Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

(p) Provisions

Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

	Consolidated		Company
	2006	2005	2006	2005
	S	\$	\$	\$
NOTE 2: REVENUE
Operating activities:
Consulting fees	189,788	321,157	94.624	92,777
Maintenance contracts	171,647	106,797
Installations	289,789	203,301		÷
Access fees	213,080	166,376		$\mathbf{r}$
	864.304	797,631	94.624	92,777
Non-operating activities:
Proceeds from sale of plant and equipment	76,062		76.062
Interest received	91.174	55,124	90.071	54,387
Other revenue	12,877	45,600	9,387	41,361
Interest on amounts due from a controlled entity		۰	296,885	$\overline{\phantom{a}}$
	180,113	100,724	472,405	95,748
	1,044,417	898,355	567,029	188,525

NOTE 3: LOSS BEFORE INCOME TAX

Loss before income tax has been determined after charging the following items:

Expense

Depreciation and amortisation:
building	1.008	4.000	1.008	4.000
plant and equipment	41,560	48.095	5.068	6.268
leased plant and equipment	۰	2,052		$\cdot$
route optimisation and mobile data systems technology	89,418	79.607
	131.986	133,754	6.076	10,268
Bad or doubtful debts	49,412	31.236
Mineral exploration and evaluation written off	258	308.958	258	308.958
Provision for non recovery of loan to controlled entity – Note 1 $(c)$	۰.	$\sim$	1,130,576	467,460
Rental expense on operating leases	104,224	99.484	28.862	28.207

For the year ended 30 June 2006 (Cont)

NOTE 4: INCOME TAX EXPENSE

No income tax is payable by the Company or Economic Entity as they incurred losses for income tax purposes for the year. The Company and Economic Entity also have available for recoupment, income tax and capital losses at balance date.

		Consolidated		Company
	2006	2005	2006	2005
	\$	S	\$	\$
(a) Reconciliation
The prima facie income tax benefit on the loss from ordinary
activities is reconciled as follows:
Loss from ordinary activities before income tax	1,449,620	1,295,202	1,295,857	1,239,024
Income tax benefit at 30%	(434, 886)	(388, 561)	(388,757)	(371,707)
Less tax effect of permanent differences
Expenditure and amortisation not deductible	318,250	141,334	316,419	140,254
Tax effect of timing differences not brought to account as future income tax benefits
	116,636	247,227	72,338	231,453
Income tax expense
(b) Future income tax benefits
The directors estimate that the potential future income tax benefits at 30 June 2006 at 30% not brought to account are in respect of:
Tax losses	7.359.549	6,899,244	5,747,976	5,643,947
Capital losses	1,093,920	1,103,789	1,093,920	1,103,789
(c) Deferred Tax Assets not recognised:
Provision for investments			388,550	388,550
Provision for impairment	127,178	29,356	1.242.311	903,138
Other provisions	65.595	63,934	41,846	48,054
Total Deferred Tax Assets not recognised	192,733	93.290	1,672,707	1,339,742
(d) Deferred Tax Liabilities not recognised:
Mining and exploration expenditure	1,246,491	1,208,978	1,246,491	1,208,978
Plant and equipment	72.061	71,752
Total Deferred Tax Liabilities not recognised	1,318,552	1,289,730	1.246.491	1,208,978

The above benefits will only be obtained if:

The Company and Economic Entity derive future assessable income of a nature and of an amount sufficient to enable the $(i)$ benefits to be realised;

$(ii)$ the Company and economic entity continue to comply with the conditions for deductibility imposed by tax legislation; and

no changes in tax legislation adversely affect the Company and economic entity in realising the benefits. $(iii)$

	Consolidated		Company
	2006	2005	2006	2005
NOTE 5: CASH AND CASH EQUIVALENTS	\$
Cash on hand	1.374	1,374	1.000	1.000
Cash at bank	211.788	369,876	120.755	304.558
Deposits at call	2,370,882	1,676,720	2,370,881	1,676,720
	2.584,044	2,047,970	2,492,636	1,982,278

The effective interest rate on short-term deposits was 5.73 % (2005: 5.24%); these deposits have an average maturity of 30 days.

For the year ended 30 June 2006 (Cont)

		Consolidated			Company
		2006	2005	2006	2005
		\$	\$	\$	\$
NOTE 6 : TRADE AND OTHER RECEIVABLES
Current
Trade debtors		333,482	193,145
Provision for doubtful debts		(147, 352)	(97,940)
		186,130	95,205
Sundry debtors		48,295	101,432	11,302	71,762
		234,425	196.637	11.302	71.762
Non Current
Amounts owing by a controlled entity (Refer Note 8)				4,935,711	3,448,135
Provision for non recovery		$\overline{a}$		(4,141,036)	(3,010,460)
				794,675	437,675
Performance bonds		64,342	64,192 64,192	61,100 855,775	61,100 498,775
The amounts owing by a controlled entity are unsecured, bear interest		64,342
at 6.4% per annum and are payable on demand
NOTE 7: OTHER CURRENT ASSETS
Prepayments		6,516	12,337	872	830
NOTE 8 : OTHER FINANCIAL ASSETS
Shares in controlled entities $-\cos t$				1,295,167	1,295,167
Provision for impairment		$\overline{a}$		(1, 295, 165)	(1, 295, 165)
		$\overline{a}$	÷	2	$\overline{2}$
Specimen gold		36,379	36,379	36,379	36,379
		36,379	36,379	36,381	36,381
Investment in Controlled Entities:	Place of				Parent Entity
	Incorporation		Equity Holding		Investment
		2006	2005	2006	2005
Parent Entity:				S	S
SmartTrans Holdings Limited	Australia
Controlled Entities:
SmartTrans Limited	Australia	95%	95%
E-Trans Pty Ltd	Australia	100%	100%	$\overline{2}$ $\overline{2}$	2 $\overline{2}$
NOTE 9: PROPERTY, PLANT AND EQUIPMENT
			Consolidated	$\sim$ $\sim$ $\sim$ $\sim$	Company

	2006	2005	2006	2005
		S
Land and buildings
Cost		172,000		172,000
Accumulated depreciation		(36,000)		(36.000)
		136,000.		136,000
Plant and equipment
Cost	505,240	511.732	197,194	235,181
Accumulated depreciation	(439, 941)	(398,392)	(188, 775)	(183, 718)
	65,299	113,340	8,419	51,463
Total property, plant and equipment	65,299	249,340	8.419	187,463

For the year ended 30 June 2006 (Cont)

NOTE 9: PROPERTY, PLANT AND EQUIPMENT (Cont) $\frac{1}{2}$ and $\frac{1}{2}$ and $\frac{1}{2}$

Consolidated	Land and	Plant and
	Buildings	Equipment	Total
	\$	S	S
Balance at the beginning of the year	136,000	113,340	249,340
Additions		38,564	38,564
Disposals	(134,992)	(45,045)	(180, 037)
Depreciation	(1,008)	(41.560)	(42, 568)
Carrying amount at the end of year		65,299	65,299
Company	Land and	Plant and	Total
	Buildings	Equipment
	\$	S	\$
Balance at the beginning of the year	136,000	51,463	187,463
Additions		7.069	7,069
Disposals	(134,992)	(45,045)	(180, 037)
Depreciation	(1,008)	(5,068)	(6,076)
Carrying amount at the end of year		8.419	8,419

	Consolidated		Company
	2006 2005		2006	2005
NOTE 10: EXPLORATION, EVALUATION AND DEVELOPMENT COSTS
Exploration tenements – at cost	4,404,968	4.279.929	4,404,968	4,279,929
Balance at beginning of the year	4,279,929	4.508,970	4,279,929	4,508,970
Expenditure incurred during the year	125,297	79.917	125.297	79.917
Expenditure written off during the year	(258)	(308,958)	(258)	(308.958)
Balance at end of the year	4,404,968	4.279.929	4,404,968	4,279,929

The ultimate recoupment of exploration and evaluation expenditure carried forward is dependent on the successful development and commercial exploitation, or alternatively, the sale of the respective areas as further discussed in Note 1(e)

	Consolidated			Company
	2006	2005	2006	2005
	\$	\$	S	\$
NOTE 11: INTANGIBLE ASSETS
Route Optimisation and Mobile Data Systems Technology
Cost	786,851	617,367
Accumulated Amortisation	(334, 605)	(245, 187)
	452,246	372,180
	Consolidated
	Route
	Optimisation
	System
Year ended 30 June 2005	S
Balance at beginning of the year	385,568
Additions	66,219
Amortisation charge	(79, 607)
Carrying value at 30 June 2005	372,180
Year ended 30 June 2006
Balance at beginning of the year	372,180
Additions	169,484
Amortisation charge	(89, 418)
Carrying value at 30 June 2006	452,246

The route optimisation and mobile data systems technology have useful lives of $4 - 5$ years. The current amortisation charges in respect of intangible assets are included under depreciation and amortisation expenses in the income statement.

For the year ended 30 June 2006 (Cont)

2006 2005 2006 2005 \$ \$ \$ \$ NOTE 12: TRADE AND OTHER PAYABLES Trade creditors and accruals 369,167 11,286 325,355 84,626 Advance from joint venture 48,421 80,981 48,421 80,981 417,588 406,336 92,267 133,047 NOTE 13: PROVISIONS 198,434 162,359 133,636 117,172 Employee entitlements 112,584 Balance at the beginning of the year 162,359 150,578 117,172 26,933 Additional provisions 69,179 92,220 26,615 Amount used (57, 398) (22, 345) (56, 145) (10, 151) Balance at end of the year 198,434 162,359 133,636 117,172 NOTE 14: ISSUED CAPITAL 53,053,388 566,644,711 (2005: 382,394,604) fully paid ordinary shares 51,061,840 53,053,388 51,061,840 (a) Ordinary Shares Number Number Number Number 382,394,604 190.957.302 382,394,604 190,957,302 At beginning of the year Shares issued in 2005 191,437,302 191,437,302 Shares issued during the year 4 October 2005 (Conversion of Options) 132,857 132,857 27 October 2005 (Conversion of Options) 300,000 300,000 18 November 2005 (Conversion of Options) 100,000 100,000 ÷ 10 January 2006 (Conversion of Options) 105,000 105,000 21 February 2006 (Conversion of Options) 2,216,428 2,216,428 15 March 2006 (Conversion of Options) 2,528,479 2,528,479 21 March 2006 (Conversion of Options 4,212,153 4,212,153 $\overline{r}$ 27 March 2006 (Conversion of Options) 173,877,409 173,877,409 6 April 2006 (Conversion of Options) 777,781 777,781 382,394,604 566,644,711 382,394,604 At the end of year 566,644,711	Consolidated		Company

Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held. At shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

(b) Options

On 21 March 2005, 190,957,302 options were granted to the holders of ordinary shares to apply for ordinary shares at an exercise price of 1.1 cents each. The options were exercisable on or before 21 March 2006. A total of 480,000 were exercised in 2005 and 184,250,107 were exercised during 2006. The remaining 6,227,195 options lapsed.

For the year ended 30 June 2006 (Cont)

NOTE 15: REMUNERATION OF DIRECTORS AND EXECUTIVES

(a) Names and positions held of Parent Entity Directors and Key Management Personnel in office at any time during the financial year are:

Parent Entity Directors
John P. C. Forsyth AM	Chairman — Non-Executive
James P. Laurie	$Director - Executive$
Andrew D. Forsyth	Director — Non-Executive

Key Management Personnel

Chief Operating Officer (SmartTrans Limited) Bryan E. Carr

(b) Parent Entity Directors' Remuneration

			Primary					Total
	Salary, Fees &		Superannuation
	Commissions		Contribution		Other – Note 17 $(b)$
	2006	2005	2006	2005	2006	2005	2006	2005
John P.C. Forsyth AM					240,000	240,000	240.000	240,000
James P. Laurie	186,881	186.881	10.519	10.519	۰		197.400	197,400
Andrew D. Forsyth			20,000	20.000			20,000	20,000
Total	186,881	186,881	30,519	30.519	240,000	240,000	457,400	457.400

The service and performance criteria set to determine remuneration are included per Note 15(e). There was no directors' share-based key management personnel compensation during the year.

(c) Key Management Personnel Remuneration

--- - --------------------------------	Primary				Total
		Salary & Fees	Superannuation	Contribution
	2006	2005	2006	2005	2006	2005
Bryan E. Carr	145,000	145,000	13.050	13.050	158,050	158.050
Total	145,000	145,000	13,050	13.050	158.050	158.050

The service and performance criteria set to determine remuneration are included per Note 15 (e). There was no key management personnel share-based compensation during the year.

(d) Shareholdings

Number of Shares held by Parent Entity Directors and Key Management Personnel

	Balance 1 July 2005	Exercise of options	Net Change*	Balance 30 June 2006
Parent Entity Directors
John Forsyth AM	191.456,027	137,267,930	$\cdot$	328.723.957
Andrew Forsyth	13.230,492	6.615.246	$\cdot$	19.845.738
James Laurie	85,714	42,857	$\mathbf{r}$	128.571
Key Management Personnel
Bryan Carr	355,403	200.000	(355, 403)	200,000
Total	205, 127, 636	144,126,033	(355, 403)	348.898.266

*Net Change refers to shares bought and sold but does not include shares acquired on exercise of options, which relates to options issued as disclosed in Note 14(b).

For the year ended 30 June 2006 (Cont)

NOTE 15: REMUNERATION OF DIRECTORS AND EXECUTIVES (Cont)

(e) Remuneration Practices

The Company's policy for determining the nature and amount of emoluments of directors and key management personnel of the Company is as follows:

The remuneration structure for the executive director and key management personnel is based on a number of factors including length of service, particular experience of the individual concerned, and overall performance of the Company. Employment between the Company and the executive director and key management personnel is on a continuing basis, not formalized by service agreements, the terms of which are not expected to change in the immediate future. Upon retirement the executive director and key management personnel are paid employee benefit entitlements accrued to date of retirement. The executive director and key management personnel are paid a percentage of their salary (determined by the Board at the time) in the event of redundancy. Additionally, remuneration and other terms of employment for the executive director are formalised in a letter of appointment that also contains comprehensive provisions in relation to termination, confidentiality and suspension.

Non executive directors are renumerated on the basis disclosed in the Directors' Report.

	Consolidated		Company
	2006	2005	2006	2005
		S
NOTE 16 : REMUNERATION OF AUDITORS
Remuneration of the auditor of the parent entity for:
Auditing or reviewing the financial statements	14,396	15.750	8.496	7.750
Other Services	11.100	11.150	8.375	9.650
	25,496	26,900	16.871	17,400

NOTE 17: RELATED PARTY INFORMATION

(a) Names of directors

The names of persons who were directors of SmartTrans Holdings Limited at any time during the financial year are as follows:

• · John P.C. Forsyth AM
• Andrew D. Forsyth
• · James P. Laurie

(b) Transactions of directors and director-related entities

Transactions with directors during the year, that were made on normal commercial terms and conditions, were as follows:

• Dymocks Pty Ltd, a company of which Messrs John P.C. Forsyth AM, and Andrew D. Forsyth are directors, provided management, office accommodation and administrative services to the Company totalling \$240,000 (2005: \$240,000).
• Deacons, a firm of solicitors of which Andrew D. Forsyth was during the year a consultant, provided legal services to the Company and its controlled entity and was paid \$17,231 (2005: Nil).

(c) Directors' Shareholdings

Directors and director-related entities held directly, indirectly or beneficially at balance date, the following equity interests in the Company.

				Number of Unlisted
	Number of Shares			Options
	2006	2005	2006	2005
Parent Entity Directors
John P.C. Forsyth AM	328,723,957	191,456,027	$\blacksquare$	137,267,930
Andrew D. Forsyth	19.845.738	13,230,492	$\blacksquare$	6.615.246
James P. Laurie	128.571	85.714	-	42.857

(d) Economic entity

The economic entity consists of SmartTrans Holdings Limited and its subsidiaries as disclosed in Note 8. Transactions between the parent entities and other entities in the group consisted of the loans advanced as disclosed in Note 6. Additionally, the parent has provided a letter to a controlled entity, undertaking to give or arrange any financial assistance which the controlled entity may need to ensure that it is solvent at the date upon which it incurs a debt within the meaning of section 588G of the Corporations Act 2001. Such financial assistance is not quantifiable at balance date, as it is dependent upon the trading performance of the controlled entity in the succeeding financial year.

For the year ended 30 June 2006 (Cont)

		Consolidated
		2006	2005
	NOTE 18 : EARNINGS PER SHARE
(a)	Operating loss used to calculate basic and diluted EPS	(1,484,825)	(1,295,202)
(b)	Weighted average number of ordinary shares outstanding during the year used in calculating basic and diluted EPS	Number 430,596,369	Number 241,715,963

NOTE 19: SEGMENT INFORMATION

(a) Industry Segments

	Exploration			Transport	Consolidated
	2006	2005	2006	2005	2006	2005
	S	S	\$	\$	\$	\$
Revenue
External sales	270,144	188,525	774,273	709,830	1,044,417	898,355
Result
Segment result	(462, 166)	(771, 564)	(987, 454)	(523, 638)	(1,449,620)	(1,295,202)
Assets
Segment assets	7,015,678	6,619,741	832.541	639,223	7.848.219	7,258,964
Liabilities
Segment liabilities	266,683	209.439	349.339	359,256	616.022	568,695
Other
Acquisition of plant and equipment	7,069		31,496	9,732	38.564	9,732
Depreciation and amortisation	6,076	10.268	125,910	123,486	131,986	133,754
Non-cash expenses	258	308,958		$\overline{\phantom{a}}$	258	308,958

The economic entity operates from one geographical location, namely Australia.

(b) The economic entity derived income from the following activities; Exploration

$\bullet$ Exploration for gold and base metals in Australia.

Transport Logistics

Development and operation of logistics and mobile data systems for use in the transport industry to optimise efficiency of $\bullet$ consignment systems and to track vehicles.

(c) Intersegment Transactions

There are no intersegment transactions.

NOTE 20: COMMITMENTS

(a) Capital Expenditure

There are no capital expenditure commitments as at balance sheet date.

(b) Exploration Work

$\left($

The Company has certain obligations to perform minimum exploration work and expend minimum amounts of money on its mining tenements and its share of joint venture contractual commitments. The obligations are expected to amount to \$410,000 in the year ended 30 June 2007 (2006: \$211,300) and be fulfilled in the normal course of operations of the Company. The estimated expenditure may be varied as a result of expenditure by joint venturers or exemptions to be requested.

	Consolidated		Company
	2006	2005	2006	2005
c) Operating Lease Commitments
Payable
Not later than one year	52,530	80.637	30,530	28,862
Later than one year but not later than five years	12,050	64.580	12,050	42,580
Total operating lease liability	64,580	145.217	42.580	71.442

The property leases are non cancellable with three year terms. Rents are payable monthly in advance and are indexed annually to the CPL. Options exist to renew lease terms for an additional three years

For the year ended 30 June 2006 (Cont)

		Consolidated	Company
	2006 2005		2006	2005
	\$	\$	\$	\$
NOTE 21: NOTES TO THE CASH FLOW STATEMENTS
Reconciliation of net cash used in operating activities to net loss from ordinary activities
Net loss from ordinary activities after income tax	(1,449,620)	(1,295,202)	(1,295,857)	(1,239,024)
Non-cash flows in loss from ordinary activities
Exploration and evaluation expenditure	(782, 765)	(552,992)	(782, 765)	(552,992)
Depreciation	42.568	54,147	6.076	10,268
Amortisation	89,419	79,607
Exploration expenditure written off	258	308,958	258	308,958
Gain on disposal of plant and equipment	(76,062)		(76,062)
Provisions for diminution in value and non recovery		$\cdot$	1,130,576	467,460
Change in net assets and liabilities:
Increase in receivables	(16,391)	(76, 460)	(234,578)	(54,858)
Increase in other assets	(15,515)	(6,227)	(1,889)	(162)
Increase/(decrease) in payables	43.600	149,941	73.340	(9,191)
Increase/(decrease) in provisions	36,075	(5, 546)	16,464	4,587
Net Cash used in Operating Activities	(2,128,433)	(1.343,774)	(1,164,437)	(1,064.954)

NOTE 22: INTERESTS IN JOINT VENTURES

The Company is a participant in the South Connors Arch Project where it has earned a 60% interest in various tenements. No assets are employed by the joint venture. Expenditure incurred by the Company in respect of this joint venture is included in deferred exploration expenditure, (Note 10). Midas Resources Limited (Midas) has earned 51% equity in five tenements and SmartTrans has diluted to 29.4% equity.

NOTE 23 : FINANCIAL INSTRUMENTS

(a) Interest Rate Risk

The economic entity's exposure to interest rate risk, which is the risk that a financial instrument will fluctuate as a result of changes in market interest rates and effective average interest rates on those financial assets and liabilities, is set out below:

2006			Fixed interest maturing in:
	Floating			Non-interest
	interest rate	1 year or less	1 to 5 years	bearing	Total
	\$	\$	\$	\$	5
Financial assets
Cash	2,582,670			1,374	2,584,044
Receivables				298,767	298.767
	2,582,670			300,141	2,882,811
Weighted average effective
interest rate	5.73%
Financial liabilities
Payables		۰		(417,588)	(417,588)
Net financial assets	2,582,670			(117, 447)	2,465,223
2005		Fixed interest maturing in:
	Floating			Non-interest
	interest rate	1 year or less	1 to 5 years	bearing	Total
	\$	\$		S	S.
Financial assets
Cash	2,046,596			1,374	2,047,970
Receivables				260,829	260.829
	2,046,596	$\overline{\phantom{a}}$	$\cdot$	262,203	2,308,799
Weighted average effective
interest rate	5.24%
Financial liabilities
Payables				(406, 336)	(406, 336)
Net financial assets	2,046,596			(144, 133)	1,902,463

For the year ended 30 June 2006 (Cont)

NOTE 23: FINANCIAL INSTRUMENTS (Cont)

(b) Credit Risk

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date, to recognised financial assets is the carrying amount, net of any provisions for doubtful debts, as disclosed in the balance sheets and notes to the financial statements.

Surplus cash is placed with reputable banks.

(c) Net Fair Value of Financial Assets and Liabilities

The net fair value of financial assets and liabilities of the economic entity approximates their carrying amounts.

The economic entity has no financial assets and liabilities where the carrying amount exceeds the net fair values at balance date.

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

The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the balance sheets and in the notes to the financial statements.

NOTE 24 : SUBSEQUENT EVENTS

There has not arisen in the interval between the end of the financial year and the date of this report any matter or circumstance likely, in the opinion of the directors, to affect significantly the operations of the Company, the results of those operations, or the state of affairs of the Company in current and subsequent financial years.

NOTE 25: COMPANY DETAILS

The principal places of business are:

SmartTrans Holdings Limited Suite 3, First Floor 614 Newcastle Street Leederville WA 6007

SmartTrans Limited Suite 4, Level 7 11 Queens Road Melbourne Vic 3004

SmartTrans Limited 133 Alexander Street Crows Nest NSW 2065 Chartered Accountants

RSM Bird Cameron Partners

8 St Georges Terrace Perth WA 6000 8 St Georges Terrace Fermi via 0000
GPO Box R1253 Perth WA 6844
T+61 8 9261 9100 F+61 8 9261 9111 www.rsmi.com.au

AUDITOR'S INDEPENDENCE DECLARATION TO THE BOARD OF DIRECTORS OF SMARTTRANS HOLDINGS LIMITED

As lead audit partner for the audit of the financial report of SmarTtrans Holdings Limited for the year ended 30 June 2006, I declare that to the best of my knowledge and belief, there have been no contraventions of:

• $(i)$ the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
• any applicable code of professional conduct in relation to the audit. $(ii)$

RSM Bird Cameron Partners

RSM BIRD CAMERON PARTNERS Chartered Accountants

Sunit

Perth, WA Dated: 22 September 2006 S C CUBITT Partner

Liability limited by a scheme approved under Professional Standards Legislation

$-26 -$

Major Offices in: Perth, Sydney, Melbourne, Adelaide and Canberra ABN 36 965 185 036

RSM Bird Cameron Partners is an independent member firm of RSM International, an affiliation of independent accounting and consulting firms.

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

CORPORATE GOVERNANCE

The Company is committed to implementing the highest practical standards of corporate governance. The Company is pleased to advise that its practices are largely consistent with the ASX Corporate Governance Council's Principles of Good Corporate Governance and Best Practice Recommendations.

Where the Company's corporate governance practices differ from the practices recommended by the Council, the Company will explain its position bearing in mind that not all the practices are appropriate due to the size of the Company.

$\mathbf{1}$ . Board of Directors

$1.1$ Role of the Board

The Board's role is to govern the Company rather than to manage it. In governing the Company, the directors must act in the best interests of the Company as a whole. It is the role of senior management to manage the Company in accordance with the direction and delegations of the Board.

$1.2$ Composition of the Board

The Board does not comply with practices recommended as it does not have any independent directors. Directors are appointed based on the specific skills required by the Company and on the independence of their decision-making and judgment.

The current Board, comprising two non executive directors and one executive director, is appropriate for the size of the Company.

This issue will be kept under review and one or more independent directors will be appointed if and when it is appropriate to do so.

$1.3$ Responsibilities of the Board

Without intending to limit the role of the Board, the principal functions and responsibilities of the Board include the following.

• Leadership of the Organisation: $1.3.1$ overseeing the Company and establishing codes that reflect the values of the Company and guide the conduct of the Board, management and employees.
• $1.3.2$ Strategy Formulation: working with senior management to set and review the overall strategy and goals for the Company and ensuring that there are policies in place to govern the operation of the Company.
• $1.3.3$ Shareholder Liaison: effective ensuring communications with shareholders through an appropriate communications policy and promoting participation at general meetings of the Company.
• $1.3.4$ Company Finances: approving and monitoring acquisitions, divestitures and financial and other reporting.
• Delegation of Authority: delegating appropriate powers $1.3.5$ to senior management to ensure the effective day-to-day management of the Company.

$1.4$ Board Policies

$1.4.1$ Conflicts of Interest

Directors must disclose to the Board actual or potential conflicts of interest that may or might reasonably be thought to exist between the interests of the director and the interests of any other parties in carrying out the activities of the Company;

$1.4.2$ Related Party Transactions

Related party transactions include any financial transaction between a director and the Company and, if any, will be reported in writing to each Board meeting.

1.4.3 Trading in Company Shares

The Company has a Share Trading Policy under which directors and certain employees and their associates are prohibited from trading in the Company's securities during the 4 weeks preceding:

• the release by the Company of its half-yearly results to the ASX: and
• the release by the Company of its annual results to the ASX.

In addition, consistent with the law, designated officers are prohibited from trading in the Company's securities while in the possession of unpublished price sensitive information concerning the Company.

$\overline{2}$ . Board Committees

$2.1$ Audit Committee

As the whole Board only consists of only three members, and due to the size of the Company, it does not have a separate audit committee.

$2.2$ Remuneration Committee

As the whole Board only consists of only three members, and due to the size of the Company, it does not have a separate remuneration committee.

Non-executive director Remuneration Policy $2.2.1$

Non-executive directors are paid their fees out of the maximum aggregate amount (currently \$80,000) approved by shareholders for the remuneration of nonexecutive directors. Non-executive directors do not receive performance based bonuses and do not participate in equity schemes of the Company other than rights issues of securities and underwriting of the issue of securities.

The remuneration payable to the non-executive directors has remained constant since 2^nd November 1990.

$2.3$ Nomination Committee

As the whole Board only consists of only three members, and due to the size of the Company, it does not have a separate nomination committee.

CORPORATE GOVERNANCE (Cont.)

$\ddot{\mathbf{3}}$ . Company Code Of Conduct

As part of its commitment to recognising the legitimate interests of stakeholders, the Company has established a Code of Conduct to guide compliance with legal and other obligations to legitimate stakeholders. These stakeholders include employees, clients, customers, government authorities, creditors and the community as whole. This Code includes:

Responsibilities to Shareholders and the Financial Community Generally

The Company has processes in place designed to ensure the truthful and factual presentation of the Company's financial position.

Responsibilities to Clients, Customers and Consumers

Each employee has an obligation to use their best efforts to deal in a fair and responsible manner with each of the Company's clients, customers and consumers.

Employment Practices

The Company endeavours to provide a safe workplace in which there is equal opportunity for all employees at all levels of the Company. The Company does not tolerate the offering or acceptance of bribes or the misuse of Company assets or resources.

Obligations Relative to Fair Trading and Dealing

The Company aims to conduct its business fairly and to compete ethically and in accordance with relevant competition laws.

Conflicts of Interest

Employees and directors must avoid conflicts as well as the appearance of conflicts between personal interests and the interests of the Company.

SHAREHOLDER INFORMATION

The following details are according to the Share Registry's records as at 31^st August 2006.

Substantial Shareholders $(a)$

The Company's register of substantial shareholders, prepared in accordance with the Corporations Law, recorded the information summarised below:

	ACN.	No. of Shares
Tandragee Pty Ltd	008 776 949	370.722.522
Coolgardie Units Pty Ltd	050 049 191	370,722,522
Jamajon Pty Ltd (includes subsidiaries)	008 502 770	357,501,126
Mr J P C Forsyth AM		357,501,126
Mr A D Forsyth and the following companies of
which he is a director:		80,094.291
Cotway Investments Pty Ltd;	008 429 528	80,094.291
Dileen Pty Ltd;	008 488 208	80,094.291
Willeroon Pty Ltd;	088 507 604	80.094.291
Canala Services Pty Ltd; (registered in the name of	079 016 630	80.094.291
Bond Street Custodian Ltd)

$(b)$ Twenty Largest Shareholders

The names of the twenty largest shareholders of fully paid shares in the Company are:

		No. of Ordinary Fully Paid Shares Held	Percentage Held Issued Ordinary Capital
$\mathbf{I}$	Dymocks Securities Pty Ltd	243,897,381	43.04%
$\mathfrak{D}$	Jamajon Pty Ltd	46,721,208	8.25%
3	Tandragee Pty Ltd	38,546,601	6.80%
4	Coolgardie Units Pty Ltd	28,326,294	5.00%
5	Kanaslex Pty Ltd	11,428,500	2.02%
6	ANZ Nominees Limited (Cash Income A/C)	9,771,835	1.72%
7.	Bond Street Custodian Limited	8,814,264	1.56%
8	Templevale Pty Ltd	8,250,000	1.46%
9	Isatsan Pty Ltd	5,916,528	1.04%
10	Andrew Dymock Forsyth	4,407,132	0.78%
$\mathbf{1}$	Mr Benjamin Corser	3,825,472	0.68%
$12^{\circ}$	Citicorp Nominees Pty Ltd	3,387,142	0.60%
13	Loxden Pty Ltd	3,000,000	0.53%
14	Rokadia Pty Limited	2,500,513	0.44%
15	Mrs Angela Tsoukatos	2,400,000	0.42%
16	Australian Consolidated Exploration Pty Ltd	2,000,000	0.35%
17	Mr David Edward Brown	1,920,000	0.34%
18	Mr John Selwyn Young & Mrs M D Young	1,887,008	0.33%
19	Mrs Kheng Yin Campbell	1,861,035	0.33%
20	Sarantina Capital Pty Ltd	1,744,782	0.31%
		430,605,695	76.0%

SHAREHOLDER INFORMATION (Cont.)

$\overline{c}$ Distribution of Shareholders

$(i)$ Ordinary Shareholders (Ordinary shares paid to 30 cents)

	Spread of Holding	Holders.	%	Shares Held
	$1 - 1,000$	233	0.03	142.582
	$1,001 - 5,000$	669	0.36	2,015,243
	$5,001 - 10,000$	520	0.74	4,183,041
	$10.001 - 100.000$	1.028	6.53	37,014,764
	$100,001$ and over	278	92.34	523,289,081
		2.728	100.00	566,644,711
(ii)	Shareholders of less than
	a marketable parcel	2.051	3.26	18.461.089

SUMMARY OF MINING TENEMENTS

Project	Tenements	Group Interest	Joint Venture Partners at 30 June 2006
Base Metals Project	EPM 10199	100%
	EPM 11130	100%
	EPM 11453	100%
	EPM 11711	100%
	EPM 11773	100%
	EPM 12195	100%
	EPM 12374	100%
	EPM 12747	100%
	EPM 7797	100%
South Connors Arch Joint Venture	EPM 9442	60%	Australia Oriental Minerals NL
	EPM 9777	60%	Australia Oriental Minerals NL
	EPM 10006	60%	Australia Oriental Minerals NL
	EPM 10131	60%	Australia Oriental Minerals NL & Midas Resources Ltd
	EPM 10132	60%	Australia Oriental Minerals NL
	EPM 10133	60%	Australia Oriental Minerals NL & Midas Resources Ltd
	EPM 11134	29.4%	Australia Oriental Minerals NL & Midas Resources Ltd
	EPM 11726	60%	Australia Oriental Minerals NL
	EPM 11727	60%	Australia Oriental Minerals NL
	EPM 12353	60%	Australia Oriental Minerals NL
	EPM 12355	60%	Australia Oriental Minerals NL & Midas Resources Ltd
	EPM 12361	29.4%	Australia Oriental Minerals NL & Midas Resources Ltd
	EPM 12546	60%	Australia Oriental Minerals NL

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SmartTrans

HOLDINGS LIMITED ACN 009 065 650

NOTICE OF ANNUAL GENERAL MEETING

Take notice that the 2006 Annual General Meeting of SmartTrans Holdings Ltd (the "Company") will be held in Room 17 on the 9^th Floor, 428 George Street, Sydney, on Friday $17^th$ November 2006 at 11.30 am.

AGENDA

To consider and, if thought fit, to pass the following resolutions as ordinary resolutions:

$\mathbf{1}$ . Financial Statements and Reports:

To receive and adopt the Financial Statements for the year ended 30 June 2006 and the related Directors' Report and Statement and Audit Report.

$\overline{2}$ . To Elect Director:

To elect John P C Forsyth, who retires by rotation in accordance with the Constitution and, being eligible, offers himself for re-election as a Director of the Company.

$3.$ Remuneration of Directors

That the remuneration of non-executive Directors remains at a maximum of \$80,000 per annum to be divided amongst current and any additional non-executive Directors in such proportions as may be approved by the Board.

4. Other Business

Any other business brought before the meeting in accordance with the Constitution of the Company.

JOHN W MILLARD Company Secretary

HOLDINGS LIMITED

ACN 009 065 650

The Company Secretary SmartTrans Holdings Ltd

Level 1, 614 Newcastle Street LEEDERVILLE WA 6007

PO Box 334 LEEDERVILLE WA 6903

Telephone: (08) 9228 1199 Facsimile: (08) 9228 2299 Email: smarttrans@smarttrans.com.au

FORM OF PROXY

I/We.
of
being a member of SmartTrans Holdings Limited ("the Company"), appoint
Name of Proxy:

Address of Proxy: ....................................

or failing him/her (or in the absence of the appointment of any person), the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held on Friday 17^th November 2006 at 11.30 am EDST and at any adjournment thereof.

If two proxies are being appointed, the proportion of the members voting rights this proxy is appointed to represent is ............... percent. (Additional proxy forms will be supplied by the Company on request).

Proxy Voting Instructions

If you wish to instruct your proxy how to vote, insert a tick in the appropriate box, otherwise your proxy will vote or abstain from voting as he/she thinks fit.

Resolutions		For	Against	Abstain
	1. To receive and adopt the Reports and Accounts	п
	2. To elect Director John P C Forsyth
	3. To approve Directors fees

Dated this day of
----------------------	--

If the member is a body corporate, then this proxy must be signed in accordance with section 127 of the Corporations Act 2001 or by an attorney appointed in writing by the body corporate.

$\big)$

$\mathcal{E}$

$\mathcal{F}$

€

EXECUTED by ACN in accordance with section 127 of the Corporations Act 2001

Director/Company Secretary

(Director)

Name of Director/Company Secretary (BLOCK LETTERS)

Name of Director (BLOCK LETTERS)

OR

If the member is an individual or joint holders:

Signature

Signature

• 1. A member entitled to attend and vote at the Annual General Meeting convened by the above Notice is entitled to appoint no more than 2 proxies to vote on the member's behalf.
• Where 2 proxies are appointed and the appointment does not specify the proportion or number of the $\overline{2}$ . member's votes, each proxy may exercise half of the member's voting rights.
• 1. A proxy need not be a member.
• 1. Proxy forms must be received at Level 1, 614 Newcastle Street, Leederville, Western Australia no later than 48 hours before the time fixed for holding the meeting. Any Proxy Form received after this time will not be valid for the meeting.
• 1. Appointment of a proxy by a member being a natural person must be under the hand of the member or of an attorney appointed in writing by the member.
• 1. Appointment of a proxy by a member being a body corporate must be executed in accordance with s127 of the Corporations Act 2001 or under the hand of an attorney appointed in writing by the body corporate.
• 1. If signing under a Power of Attorney, the Power of Attorney, or a certified copy of the Power of Attorney, must be received at the Company's registered office at Level 1 614 Newcastle Street, Leederville WA 6007 no later than 48 hours before the time fixed for holding the meeting.
• 1. A person attending as a representative of a corporate security holder or proxy must produce a Certificate of Appointment of Corporate Representative prior to admission to the meeting.
• 1. Documents may be lodged as follows:

IN PERSON.	Level 1 614 Newcastle Street, Leederville, WA 6007
BY MAIL-	P O Box 334, Leederville, WA 6903
BY FAX.	61 8 9228 2299