Soil Sub Technologies Limited ABN 39 078 388 155

And Controlled Entities

Annual Report

For the Year Ended 30 June 2008

Soil Sub Technologies Limited ABN 39 078 388 155

And Controlled Entities

For the Year Ended 30 June 2008

Corporate Directory………………………………………………	1
Directors’ Report …………………………………………………	2
Corporate Governance Statement……………………………..	9
Auditor Independence Declaration…………………………….	11
Income Statement…………………………………………………	12
Balance Sheet……………………………………………………..	13
Cash Flow Statement………………………………………..…...	14
Statement of Changes in Equity………………………………..	15
Notes to the Financial Statements……………………………..	16
Directors’ Declaration……………………………………………	47
Independent Auditor’s Report………………………………….	48
Additional Information for Listed Public Companies………	50

CORPORATE DIRECTORY

Directors

Graeme Eric Scott Chairman

James Nicholas Callianiotis Executive

Alan Neil Atchison Non-Executive

John Leslie Saunders Non-Executive

Terence Henry Charles Timms Executive

Secretary

Michael Gerard Egan

Auditors

Bentleys

ACN 121 222 802 Level 1, 12 Kings Park Road West Perth WA 6005

Corporate Advisor

Egan Capital Pty Ltd ACN 110 372 202 9 Nixon Place Cherrybrook NSW 2126

Patent Attorney

Smoorenburg Patent & Trade Mark Attorneys Unit 1, 231 Maroondah Highway Ringwood VIC 3134

Registered Office

C/- Intuity Partners Pty Ltd ACN 009 447 974 Level 1, 26 Clive Street West Perth WA 6005

Business Office

Suite 18, 30 Park Road Milton QLD 4064

Lawyers to the Company

Share Registry

Computershare Investor Services Pty Limited ABN 48 078 279 277 Level 2, 45 St George’s Terrace Perth WA 6000

Mendelawitz Morton 39 Richardson Street West Perth WA 6005

Accountants

Intuity Partners Pty Ltd ACN 009 447 974 Level 1, 26 Clive Street West Perth WA 6005

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

DIRECTORS’ REPORT

Your directors present their report for the company and its controlled entities for the year ended 30 June 2008.

Directors

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

*Graeme Eric Scott*	Chairman (Executive)
Qualifications:	Fellow of Institute of Chartered Accountants in Australia with over 45 years standing.
Experience:	Mr Scott was a partner of Ernest & Young and its predecessor firms for 17 years
	before establishing Graeme Scott & Co Pty Ltd, a chartered accounting firm, in 1990.
	He is a trustee of a public charitable trust, a director of a number of companies, both
	public and private. Mr Scott was a former director of a licensed securities dealer, and a
	former director of the Heytesbury Group which has interests in the building,
	construction, agriculture, wine and theatre industries. Part of this group included the
	Stoll Moss Theatres based in London. Mr Scott was also a founding director of TFS
	Corporation Limited a publicly listed company. He has had substantial experience in
	managing and directing a wide range of businesses over an extended period of time.
Interest in shares and options:	8,680,266 ordinary shares in Soil Sub Technologies Ltd at 24 September 2008.
Special Responsibilities:	Responsible for financial control.
Directorships held in other listed
Entities:	None.
*Alan Neil Atchison*	Director (Non-executive)
Qualifications:	Member of Institute of Chartered Accountants in Australia
	Registered Tax Agent (Nominee)
	Fellow of the Taxation Institute in Australia
	Member of Australian Institute of Company Directors
	Affiliate Member of the Securities Institute of Australia
Experience:	Mr Atchison is a practising Chartered Accountant of approximately 15 years’ standing
	and a director of Intuity Partners Pty Ltd, a chartered accounting firm specialising in
	finance, taxation and general accounting services. Throughout his career, Mr Atchison
	has been providing management consulting services to a diverse range of clients
	across many industries. In addition to providing advice to clients, Mr Atchison has
	personally acted as director and secretary for a number of private and public
	companies, including incorporating industries.
Interest in shares and options:	1,660,382 ordinary shares in Soil Sub Technologies Ltd at 24 September 2008.
Special Responsibilities:	Member of the Audit Committee
Directorships held in other listed
Entities:	None.
*John Leslie Saunders*	Director (Non-executive)
Qualifications:	Bachelor of Laws
	Bachelor of Commerce
	Master of Laws
Experience:	Mr Saunders is a litigation partner of Shand Taylor Lawyers, a commercial law firm in
	Brisbane specialising in property law, commercial and corporate law, project
	development, commercial litigation and employment law. Since his admission as a
	solicitor over 22 years ago, Mr Saunders has provided legal advice and assistance to a
	range of clients, across many business sectors.

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

Interest in shares and options:	720,000 ordinary shares in Soil Sub Technologies Ltd at 24 September 2008.
Special Responsibilities:	Member of the Audit Committee
Directorships held in other listed
Entities:	None.
*James Nicholas Callianiotis*	Director (Executive)
Qualifications:	Nil
Experience:	Mr Callianiotis has had many years experience in strategic market planning and new
	market penetration. His team building ability together with his management,
	administrative and budgeting skills will play a large part in achieving the company's
	objectives at the earliest possible time.
Interest in shares and options:	839,999 ordinary shares in Soil Sub Technologies Ltd at 24 September 2008.
Special Responsibilities:	Marketing Director
Directorships held in other listed
Entities:	None.
*Terence Henry Charles Timms*	Managing Director (Executive). Appointed company director on 18 October 2007 and
	subsequently Managing Director on 12 September 2008
Qualifications:	Nil
Experience:	Mr Timms is Chairman of Timms Cho Group Limited, a Chinese investment company
	based in Hong Kong. Previously, Mr Timms was the Asia Pacific Vice President for
	Operations of Mincom Limited, which is Australia’s largest provider of specialist
	services to global mining, an asset intensive industry sector. Mr Timms has had
	extensive executive mining experience throughout Australia, South America, South
	Africa, Chile and the US working with companies such as BHP Billiton, Western Mining
	Corporation and Rio Tinto.
Interest in shares and options:	16,000,000 ordinary shares in Soil Sub Technologies Ltd at 24 September 2008.
Special Responsibilities:	None.
Directorships held in other listed
Entities:	None.

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

Meetings of Directors

During the year, 33 meetings of directors (including committees of directors) were held. Attendances by each director during the year were as follows:

uring the year were as follows:
	Directors	Meetings
	Number Eligible to Attend	Number Attended
Graeme Eric Scott	32	31
Alan Neil Atchison	32	31
John Leslie Saunders	32	30
James Nicholas Callianiotis	32	32
Terence Henry Charles Timms	16	16

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

Company Secretary

The company secretaries in office for the parent entity at any time during or since the end of the year are:

Oscar Giuseppe Enrico Pellizzon

Ceased being company secretary on 29 April 2008

Member of Institute of Chartered Accountants in Australia Fellow of the Taxation Institute of Australia

Mr Pellizzon is a Chartered Accountant with over 13 years experience advising small/medium business in relation to taxation, business management, capital raising and debt financing matters. He has advised clients across a broad range of industries including information technology, mining, oil and gas, engineering and the agriculture and forestry sectors. Mr Pellizzon is currently completing his MBA at the Australian Graduate School of Management.

Michael Gerard Egan

Appointed company secretary on 29 April 2008

Member of Institute of Chartered Accountants in Australia

Mr Egan is a finance specialist with a range of experience in the chartered accounting profession, in business and in consulting. As a chartered accountant, Mr Egan specialised in business consultancy and taxation advice for local Australians as well as international firms. His commercial experience covers a range of successful importing, manufacturing, distribution and marketing companies in media, consumer products and biotechnology industries. Mr Egan has held directorships in ASX listed companies dating back to 1985. He is currently the managing director of several biotech companies. Mr Egan was a founding director of ASX and AIM listed company Network Limited. He played an important role in the dual listing of Network Limited in both dealing with nomads, brokers and the structuring and regulatory requirements of the AIM Exchange and the Australian Securities Exchange.

The company secretaries have been in office since the start of the financial year to the date of this report unless otherwise stated.

Operating Results

The loss of the consolidated company for the year after providing for income tax amounted to ($1,098,434).

Financial Position

With regard to financial position of the company, the consolidated net assets of the company have increased from $180,351 to $22,715,043.

Significant Changes in State of Affairs

The company listed on the Australian Securities Exchange on 27 March 2008. Other than the listing, there were no significant changes in the company’s state of affairs occurred during the year.

Principal Activities

The principal activities of the company during the year were the ongoing development and marketing of a soil substitute. No significant change in the nature of these activities occurred during the year.

After Balance Date Events

On 12 September 2008 Mr Terence Timms was appointed as the Managing Director of the company. Mr Timms’ wealth of global experience means he is very well placed to provide the company with great insight into industry-related issues and the management requirements of the company. Mr Timms has had a close association with the company over the past few years and has been instrumental in helping the company forge strong and fruitful relationships in China.

There have been no shares issued by the company between balance date to the date of this report.

No other matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the economic entity, the results of those operations, or the state of affairs of the economic entity in future financial years.

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

Review of Operations

On 8 June 2007 the Company finalised a major marketing initiative by execution of an exclusive sub-licence agreement with Hong Kong based entity, Timms Cho Group Limited, for that entity to manufacture the NutriMix product throughout the Peoples’ Republic of China, Hong Kong, Taiwan, and Macau initially for the use the use in a bio-diesel project being undertaken by this group. The company will receive a licence fee of US$5,000,000 payable over 4 years, with ongoing minimum royalty revenue of US$6,250,000 each year for the first 4 years of the agreement relating specifically to the biodiesel project. Total revenue relating to the licence fee and the bio-diesel project will be not less than US$30,000,000 in the first 4 years. This agreement was subject to ratification by the company and the Timms Cho Group Limited within a 60 day period. Both companies have ratified this agreement within the prescribed period and the agreement is now binding.

Timms Cho Group Limited subsequently identified a retail market for a bagged NutriMix product. Accordingly, an extension to the original agreement was signed in April 2008 whereby, in addition to the royalty for the bio-diesel project, which is based on a per hectare planted, regardless of the quantity used, the projected used for the retail market will be based on volume. For this market the company will receive a royalty of 7.5% of gross revenue. Timms Cho Group Limited have budgeted on sales of up to 300,000 tonnes per year for the retail market within the first 2 to 3 years.

Future Developments, Prospects and Business Strategies

In addition to the China agreement, the company is in an advanced stage of negotiations for representation in the home (Australian) market. It is expected that an announcement in this regard will be made in the near future. Further advancements have also been made in respect to the Middle East region. Again an announcement regarding these advancements will be made in the near future. A number of further international opportunities are being pursued by the company and your directors expect some very positive developments to be made in the coming months.

The directors believe the Company has excellent prospects for international growth and the company will aggressively progress the sale, delivery and/or licensing of its products in several international regions.

Environmental Management

The company’s operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of a state or territory.

Dividends Paid or Recommended

No dividends were paid or declared since the start of the year.

Options

There were no options over issued shares or interests in the company granted during the year.

At the date of this report, there are no unissued ordinary shares of Soil Sub Technologies Limited under option. All options which were not exercised by 45 days after the company listed on the Australian Securities Exchange expired.

During the year ended 30 June 2008, the following ordinary shares of Soil Sub Technologies Limited were issued on the exercise of options granted. No amounts are unpaid on any of the shares.

Grant Date Exercise Price 7 August 2007 $0.01 10 August 2007 $0.01 27 August 2007 $0.01	Number of Shares Issued 8,601 6,150 2,343
	17,094

Remuneration Report

This report details the nature and amount of the remuneration for each key management person of Soil Sub Technologies Ltd and for the executives receiving the highest remuneration.

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

Remuneration policy

The remuneration policy, which sets the terms and conditions for the key management personnel, was developed by the board of directors after seeking professional advice from independent consultants and was approved by the board. All executives receive a base salary, superannuation, fringe benefits, performance incentives and retirement benefits. The board of directors reviews executive packages annually by reference to company performance, executive performance, comparable information from industry sectors and other listed companies and independent advice. The performance of executives is measured against criteria agreed half yearly which is based on the forecast growth of the company’s profits and shareholders value. The policy is designed to attract the highest calibre executives and reward them for performance which results in long-term growth in shareholder value.

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

All remuneration paid to executives is valued at the cost to the company and expensed. Shares given to executives are valued as the difference between the market price of those shares and the amount paid by the executive. Options are valued using the Black-Scholes methodology.

The board expects that the remuneration structure implemented will result in the company being able to attract and retain the best executives to run the consolidated group. It will also provide executives with the necessary incentives to work to grow long-term shareholder value.

The payment of bonuses, options and other incentive payments are reviewed by the board as part of the review of executive remuneration. All bonuses, options and incentives must be linked to predetermined performance criteria. The board can exercise its discretion in relation to approving incentives, bonuses and options. Any changes must be justified by reference to measurable performance criteria.

Performance based remuneration

As part of each number of the key management personnel’s remuneration package there is a performance-based component, consisting of key performance indicators (KPIs). The intention of this program is to facilitate goal congruence between key management personnel with that of the business and shareholders. The KPIs are set annually, with a certain level of consultation with key management personnel to ensure buy-in. The measures are specifically tailored to the areas each key management personnel is involved in and has a level of control over. The KPIs target areas the board believes hold greater potential for group expansion and profit, covering financial and non-financial as well as short- and long-term goals. The level set for each KPI is based on budgeted figures for the group and respective industry standards.

Performance in relation to the KPIs is assessed annually, with bonuses being awarded depending on the number and deemed difficulty of the KPIs achieved. Following the assessment, the KPIs are reviewed by the board in light of the desired and actual outcomes, and their efficiency is assessed in relation to the group’s goals and shareholder wealth, before the KPIs are set for the following year.

Company performance, shareholder wealth and director and executive remuneration.

The remuneration policy has been tailored to increase goal congruence between shareholders, directors and executives. This will be achieved via offering performance incentives based on key performance indicators.

The company is continuing to develop its product and to date the directors and executives of the company have been focussing on securing distribution agreements and the listing of the company on the Australian Securities Exchange. In view of this, and the current stage of development of the company, an analysis of revenue growth is not considered appropriate and has not been provided.

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

Details of remuneration for the year ended 30 June 2008

2008
Key Management
Personnel
Mr GE Scott
Mr AN Atchison
Mr JL Saunders
Mr JN Callianotis
Mr THC Timms
Mr OGE Pellizzon
Mr MG Egan

Short-term Benefits
Post-
employment
Benefits
Other
Long-term
Benefits
Share based Payment
Total
Total Remune-
ration Repre-
sented by
Options
Performa
nce
Related
Cash, salary
& fees
Cash profit
share
Non-cash
benefit
Other
Super-
annuation
Other
Equity1
Options*
$ $ $ $ $ $ $ $ %
%
0
0
0
120,000
0
0
0
0
120,000
0
0
0
0
0
24,000
0
0
0
0
24,000
0
0
0
0
0
0
0
0
0
0
0
0
0
150,000
0
0
0
15,000
0
0
0
165,000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
71,846
0
0
0
0
71,846
0
0
0
0
0
0
0
0
0
0
0
0
0
150,000
0
0
215,846
15,000
0
0
0
380,846

Fees paid to key management personnel via a related entity as follows;

Key Management Person Related Entity Mr GE Scott Steynton Nominees Pty Ltd Mr AN Atchison Intuity Partners Pty Ltd Mr OGE Pellizzon Intuity Partners Pty Ltd	Amount $ 120,000 24,000 71,846
	215,846

2007
Key Management		Short-term	Benefits		Post- employment	Other Long-term	Share based	Payment	Total	Total Remune- ration Repre-	Performa nce
Personnel					Benefits	Benefits				sented by	Related
										Options
	Cash, salary	Cash profit	Non-cash	Other *	Super-	Other	Equity1	Options
	& fees	share	benefit		annuation
	$		$	$	$	$	$	$	$	%	%
Mr GE Scott	0	0	0	180,000	0	0	0	0	180,000	0	0
Mr AN Atchison	0	0	0	24,000	0	0	0	0	24,000	0	0
Mr JL Saunders	0	0	0	0	0	0	0	0	0	0	0
Mr JN Callianotis	134,386	0	0	0	11,500	0	60,750	0	206,636	0	0
Mr THC Timms	0	0	0	0	0	0	0	0	0	0	0
Mr OGE Pellizzon	0	0	0	48,410	0	0	0	0	48,410	0	0
	134,386	0	0	252,410	11,500	0	60,750	0	459,046

Fees paid to key management personnel via a related entity as follows;

Key Management Person Related Entity Mr GE Scott Steynton Nominees Pty Ltd Mr AN Atchison Graeme Scott & Co. Pty Ltd Mr OGE Pellizzon Graeme Scott & Co Pty Ltd	Amount $ 180,000 24,000 48,410
	252,410

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

Indemnifying Officers or Auditors

No indemnities have been given or insurance premiums paid, during or since the end of the financial year, for any person who is or has been an officer or auditor of the company.

Proceedings on Behalf of 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.

Non-audit Services

During the year, there were no non-audit services provided to the economic entity by the auditors of the company.

Auditor’s Independence Declaration

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 11.

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

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GRAEME ERIC SCOTT, DIRECTOR

DATED this 30th day of September 2008

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

CORPORATE GOVERNANCE STATEMENT

Unless disclosed below, all the best practice recommendations of the ASX Corporate Governance Council have been applied for the entire financial year ended 30 June 2008.

Board Composition

The skills, experience and expertise relevant to the position of each director who is in office at the date of the annual report and their term of office are detailed in the director’s report.

The name of the independent director of the company is:

John Leslie Saunders

When determining whether a non-executive director is independent the director must not fail any of the following materiality thresholds:

less than 10% of company shares are held by the director and any entity or individual directly or indirectly associated with the director;
no sales are made to or purchases made from any entity or individual directly or indirectly associated with the director; and
none of the directors’ income or the income of an individual or entity directly or indirectly associated with the director is derived from a contract with any member of the economic entity other than income derived as a director of the entity.

Independent directors have the right to seek independent professional advice in the furtherance of their duties as directors at the company’s expense. Written approval must be obtained from the chair prior to incurring any expense on behalf of the company.

The company does not comply with ASX Corporate Governance Council Recommendation 2.1 as the majority of the board are not independent directors. It is considered that the current structure and composition of the board is appropriate at this stage of the company’s development.

The company does not comply with ASX Corporate Governance Council Recommendation 2.2 as the chairperson is not an independent director.

The company does not comply with ASX Corporate Governance Council Recommendation 2.4 as the board did not believe it was necessary to establish a nomination committee prior to listing. The board undertook the role and responsibilities of the nomination committee in accordance with the company’s policies on nominations. The board considers the responsibility of the nomination committee to be the responsibility of the entire board of directors and has processes in place which raise the issues that would otherwise be considered by the nomination committee. The board will seek the advice of external advisors in connection with the suitability of applicants for board membership.

Trading Policy

The company’s policy regarding directors and employees trading in its securities is set by the finance committee. The policy restricts directors and employees from acting on material information until it has been released to the market and adequate time has been given for this to be reflected in the security’s prices.

Audit Committee

The names and qualifications of those appointed to the audit committee and their attendance at meetings of the committee are included in the directors’ report.

The company does not comply with ASX Corporate Governance Council Recommendation 4.2 due to the composition of the board. While it is not possible to have only independent directors on the audit committee, the committee has an independent chairman. The audit committee is currently composed of two members and will be expanded.

Performance Evaluation

An annual performance evaluation of the board and all board members was conducted for the financial year ended 30 June 2008. The chairman has reviewed the composition of the board and the performance of each director to ensure that the board continues to have a mix of the skills and expertise necessary for the conduct of the company’s activities.

Remuneration Policies

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

performance of executives is measured against criteria agreed half yearly which is based on the forecast growth of the company’s profits and shareholders value. The policy is designed to attract the highest calibre executives and reward them for performance which results in long-term growth in shareholder value.

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

The amount of remuneration for all key management personnel for the company and the five highest paid executives, including all monetary and non-monetary components, are detailed in the directors report under the heading Remuneration Report. All remuneration paid to executives is valued at the cost to the company and expensed. Shares given to executives are valued as the difference between the market price of those shares and the amount paid by the executive. Options are valued using the Black-Scholes methodology.

The payment of bonuses, options and other incentive payments are reviewed by the board annually as part of the review of executive remuneration. All bonuses, options and incentives must be linked to predetermined performance criteria. The board can exercise its discretion in relation to approving incentives, bonuses and options. Any changes must be justified by reference to measurable performance criteria.

Remuneration Committee

The company does not comply with ASX Corporate Governance Council Recommendation 8.1 due to the composition of the board. The role of the remuneration committee has been assumed by the entire board operating under the company’s Corporate Governance Policy. The board considers it appropriate for the board to fulfil the requirements of a remuneration committee. The board will from time to time rely on external consultants in direct relation to remuneration issues.

There are no schemes for retirement benefits other than statutory superannuation for non-executive directors.

Other Information

Further information relating to the company’s corporate governance practices and policies has been made publicly available on the company’s web site at www.soilsub.com.

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

To The Board of Directors

Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

This declaration is made in connection with our audit of the financial report of Soil Sub Technologies Limited and Controlled Entities for the year ended 30 June 2008 and in accordance with the provisions of the Corporations Act 2001.

We declare that, to the best of our knowledge and belief, there have been:

no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
no contraventions of the Code of Professional Conduct of the Institute of Chartered Accountants in Australia in relation to the audit.

Yours faithfully

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BENTLEYS Chartered Accountants

RANKO MATIC Director

DATED at PERTH this 30th day of September 2008

INCOME STATEMENT

for the year ended 30 June 2008

Note	Consolidated 2008 2007 $ $	Consolidated 2008 2007 $ $	Parent 2008 2007 $ $	Parent 2008 2007 $ $
2 2 3 3 3 3 4(a) 5	5,420,929 20,719 (213,226) (318,897) (2,133,809) (641,522) (213,660) (697,763) (537,712) 33,212 (166,790) (167,049) (110,027) (408,849) (484,747) (619,191) (479,243) (1,098,434) (1,098,434) (1.37)	6,605 90,194 (2,423) (300,509) (107,548) (550,920) (156,934) (386,832) 0 2,000 (86,374) (74,838) (3,586) (277,058) (198,152) (2,046,375) 659,766 (1,386,609) (1,386,609) (2.65)	3,019 284 (211,812) (306,443) (111,911) (609,463) (233,811) (664,431) 0 335,008 (158,048) (159,588) 0 (418,419) (216,286) (2,751,901) 766,794 (1,985,107) (1,985,107)	65 47 (973) (283,357) (116,115) (461,312) (156,934) (386,832) 0 (112,005) (55,484) (60,920) (410) (281,865) (132,869)
				(2,038,964) 642,239
				(1,396,725)

				(1,396,725)

The accompanying notes form part of these financial statements

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

BALANCE SHEET

as at 30 June 2008

Note	Consolidated 2008 2007 $ $	Consolidated 2008 2007 $ $	Parent 2008 2007 $ $	Parent 2008 2007 $ $
6 7 8 9 10 11 12 4(c) 13 14 15 16 4(c) 17 18	695 1,581,055 1,581,750 62,109 16,184,927 0 4,357,542 5,935,861 2,211,811 28,752,250 30,334,000 333,539 4,900,571 49,125 5,283,235 941,438 1,394,284 2,335,722 7,618,957 22,715,043 28,431,597 0 (5,716,554) 22,715,043	3,323 104,838 108,161 22,488 1,679,995 0 0 9,200 1,296,770 3,008,453 3,116,614 998,180 1,879,866 58,217 2,936,263 0 0 0 2,936,263 180,351 4,706,647 91,824 (4,618,120) 180,351	217 22,390,729 22,390,946 58,057 1,621,342 1 0 18,190 2,004,430 3,702,020 26,092,966 329,343 3,767,240 47,858 4,144,441 0 0 0 4,144,441 21,948,525 28,431,597 0 (6,483,072) 21,948,525	3,322 82,820
				86,142
				17,803 1,679,569 1 0 8,800 1,237,636
				2,943,809
				3,029,951
				824,950 1,868,906 35,589
				2,729,445
				0 0
				0
				2,729,445
				300,506
				4,706,647 91,824 (4,497,965)
				300,506

The accompanying notes form part of these financial statements

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

CASH FLOW STATEMENT

for the year ended 30 June 2008

Note	Consolidated 2008 2007 $ $	Consolidated 2008 2007 $ $	Parent 2008 2007 $ $	Parent 2008 2007 $ $
6(c) 6(d)	545,340 (2,870,326) 3,019 (55,179) (2,377,146) (51,925) (43,924) 0 29,400 (66,449) 3,010,289 100,000 (750,000) 2,360,289 (83,306) (355,391) (438,697)	190,355 (1,321,388) 66 (50,678) (1,181,645) (20,328) (6,366) 0 2,000 (24,694) 797,201 300,000 (51,401) 1,045,800 (160,539) (194,852) (355,391)	405,302 (3,040,454) 3,019 (55,034) (2,687,167) (50,916) (43,023) 0 326,075 232,136 3,010,289 100,000 (750,000) 2,360,289 (94,742) (344,433) (439,175)	79,281 (1,092,765) 66 (49,513)
				(1,062,931)
				(14,932) (5,461) (112,005) 0
				(132,398)
				797,201 300,000 (51,401)
				1,045,800
				(149,529) (194,904)
				(344,433)

The accompanying notes form part of these financial statements

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

STATEMENT OF CHANGES IN EQUITY

for the year ended 30 June 2008

Share Capital Ordinary $	Accumulated Losses $	Option Reserves $	Total $
3,572,839 209,921 923,887 4,706,647 4,706,647 23,724,950 28,431,597 3,572,839 209,921 923,887 4,706,647 4,706,647 23,724,950 28,431,597	(3,074,091) (1,386,609) (157,420) (4,618,120) (4,618,120) (1,098,434) (5,716,554) (2,943,819) (1,396,725) (157,421) (4,497,965) (4,497,965) (1,985,107) (6,483,072)	100,460 (8,636) 91,824 91,824 (91,824) 0 100,460 (8,636) 91,824 91,824 (91,824) 0	599,208 (1,386,609) 52,501 (8,636) 923,887
			180,351
			180,351 (1,098,434) (91,824) 23,724,950
			22,715,043
			729,480 (1,396,725) 52,500 (8,636) 923,887
			300,506
			300,506 (1,985,107) (91,824) 23,724,950
			21,948,525

The accompanying notes form part of these financial statements

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2008

1. Statement of Significant Accounting Policies

This financial report includes the consolidated financial statements and notes of Soil Sub Technologies Limited and controlled entities (‘Consolidated Group’ or ‘Group’), and the separate financial statements and notes of Soil Sub Technologies Limited as an individual parent entity (‘Parent Entity’). Soil Sub Technologies Limited is a company limited by shares, incorporated and domiciled in Australia.

Basis of Preparation

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

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions to which they apply. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below. They have been consistently applied unless otherwise stated.

The financial report has been prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

(a) Basis of consolidation

The consolidated financial statements comprise the financial statements Soil Sub Technologies Limited and its subsidiary as at 30 June each year ('the Group'). Details of the subsidiary are set out in note 21.

A controlled entity is any entity Soil Sub Technologies Limited has the power to control the financial and operating policies of so as to obtain benefits from its activities. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are considered.

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

Adjustments are made to bring into line any dissimilar accounting policies that may exist.

All intercompany balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.

Subsidiaries are 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.

Where there is loss of control of a subsidiary, the consolidated financial statements include the results for the part of the reporting period during which Soil Sub Technologies Limited has control.

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

(b) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised as an expense when incurred

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2008

(c) Intangible assets

Acquired both separately and from a business combination

Intangible assets acquired separately are capitalised at cost and from a business combination are capitalised at fair value as at the date of acquisition. Following initial recognition, the cost model is applied to the class of intangible assets. The useful lives of these intangible assets are assessed to be either finite or indefinite.

Where amortisation is charged on assets with finite lives, this expense is taken to the income statement through the ‘amortisation’ line item.

Intangible assets are tested for impairment where an indicator of impairment exists and in the case of indefinite lived intangibles annually, either individually or at the cash generating unit level. Useful lives are also examined on an annual basis and adjustments, where applicable, are made on a prospective basis.

A summary of the policies applied to the Group's intangible assets is as follows:

	Patents and trademarks	Website development costs	Exclusivity licence
Useful lives	Finite	Finite	Finite
Method used	Amortised over the term of the patent and revalued to fair value where deemed appropriate	Amortised over 2 ½ years and revalued to fair value where deemed appropriate	Amortised over the term of the licence and revalued to fair value where deemed appropriate
Internally generated /Acquired	Acquired	Acquired	Acquired
Impairment test / Recoverable amountTesting	Annually and where an indicator of impairment exists	Annually and where an indicator of impairment exists	Annually and where an indicator of impairment exists

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 the income statement when the asset is derecognised.

Research and development

Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when technical feasibility studies identify that the project will deliver future economic benefits and these benefits can be measured reliably.

Development costs have a finite life and are amortised on a systematic basis matched to the future economic benefits over the useful life of the project.

(d) Impairment of assets

At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.

Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset's value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

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.

(e) Cash and cash equivalents

Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less.

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, shown in short-term borrowings in current liabilities on the balance sheet.

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2008

(f) 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.

Where 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 asset 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 determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

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

(g) Revenue and Other Income

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:

Interest

Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount of the financial asset.

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

(h) Income Tax

The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income).

Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.

Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well unused tax losses.

Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity.

Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.

Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.

Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2008

(i) Goods and Services Tax (GST)

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

where 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 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.

(j) Comparative Figures

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

(k) Going Concern

The financial statements have been prepared on a going concern basis. The ability of the company to continue operations as a going concern and pay its debts as and when they fall due is dependent on the continued support of the company’s guarantor and other related parties and/or the capital raising initiatives undertaken by the directors.

(l) Property, Plant and Equipment

Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses.

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. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

The cost of fixed assets constructed within the economic entity includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Increases in the carrying amount arising on revaluation of land and buildings are credited to a revaluation reserve in equity. Decreases that offset previous increases of the same asset are charged against fair value reserves directly in equity; all other decreases are charged to the income statement. Each year the difference between depreciation based on the revalued carrying amount of the asset charged to the income statement and depreciation based on the asset’s original cost is transferred from the revaluation reserve to retained earnings.

Depreciation

The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding freehold land, 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. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

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

Plant & Equipment 15% - 100%

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

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2008

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. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.

(m) Leases

Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that is transferred to entities in the economic entity, are classified as finance leases.

Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term.

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

Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term.”

(n) Financial Instruments

Recognition and initial measurement

Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity becomes a party to the contractual provisions of the instrument. Trade date accounting is adopted for financial assets that are delivered within timeframes established by marketplace convention.

Financial instruments are initially measured at fair value plus transactions costs where the instrument is not classified as at fair value through profit or loss. Transaction costs related to instruments classified as at fair value through profit or loss are expensed to profit or loss immediately. Financial instruments are classified and measured as set out below.

Derecognition

Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the entity is no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expire. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.

Classification and Subsequent Measurement

Financial assets at fair value through profit and loss

Financial assets are classified at fair value through profit or loss when they are held for trading for the purpose of short term profit taking, where they are derivatives not held for hedging purposes, or designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Realised and unrealised gains and losses arising from changes in fair value are included in profit or loss in the period in which they arise.

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.

Held-to-maturity investments

These investments have fixed maturities, and it is the group’s intention to hold these investments to maturity. Any heldto-maturity investments held by the group 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.

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2008

Financial liabilities

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

Derivative instruments

Derivative instruments are measured at fair value. Gains and losses arising from changes in fair value are taken to the income statement unless they are designated as hedges.

Fair value

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.

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 an impairment has arisen. Impairment losses are recognised in the income statement.

(o) Employee Benefits

Provision is made for the company’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. 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.

(p) Government Grants

Government grants are recognised at fair value where there is reasonable assurance that the grant will be received and all grant conditions will be met. Grants relating to expense items are recognised as income over the periods necessary to match the grant to the costs they are compensating. Grants relating to assets are credited to deferred income at fair value and are credited to income over the expected useful life of the asset on a straight-line basis.”

(q) Foreign Currency Transactions and Balances

Functional and presentation currency

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

Transaction and balances

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items are recognised in the income statement, except where deferred in equity as a qualifying cash flow or net investment hedge.

Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the income statement.

(r) Accrued Income

Accrued income is recognised as revenue in the income statement where contracts to supply product have been entered into, and completed, during the financial year but not invoiced until after 30 June 2008.

(s) Unearned Income

Amounts have been received during the financial year in relation to Royalties that are not due until after the end of the financial year. These amounts have been deferred as unearned income.

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2008

(t) Critical Accounting Estimates and Judgements

The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group.

Impairment of Intangible Assets

No impairment has been recognised in respect of intangible assets for the year ended 30 June 2008. The directors believe that the carrying value is appropriate given that the company has entered into agreements with the Timms Cho Group Limited, and other potential markets for the company’s product. The impairments recorded for the year ended 30 June 2007 have been reversed in the current year.

Key assumptions adopted in the discounted cash flows prepared to support this position are set out in note 9.

Deferred Tax Asset

Based on the agreements entered into with the Timms Cho Group Limited, the directors believe that the deferred tax asset recognised at 30 June 2008 is fully recoverable.

The financial report was authorised for issue on 30 September 2008 by the board of directors.

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2008

Consolidated 2008 2007 $ $	Consolidated 2008 2007 $ $	Parent 2008 2007 $ $	Parent 2008 2007 $ $
342,302 219,184 4,859,443 5,420,929 12,394 0 8,325 0 20,719 216,165 3,019 219,184 540,486 157,277 697,763 (33,212) 537,712 12,303 12,303 98,500 2,750 1,436,627 583,629 2,121,506 236,623 (45,759) 22,796 213,660	6,540 65 0 6,605 57,531 32,616 0 47 90,194 0 65 65 386,832 0 386,832 (2,000) 0 5,753 5,753 98,228 3,567 0 0 101,795 150,136 (49,702) 56,500 156,934	0 3,019 0 3,019 0 0 0 284 284 0 3,019 3,019 523,820 140,611 664,431 (335,008) 0 10,661 10,661 98,500 2,750 0 0 101,250 201,873 12,269 19,669 233,811	0 65 0
			65
			0 0 0 47
			47
			0 65
			65
			386,832 0
			386,832
			112,005 0 5,039
			5,039
			97,509 3,567 0 0
			101,076
			150,136 (49,702) 56,500
			156,934

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2008

Consolidated 2008 2007 $ $	Consolidated 2008 2007 $ $	Parent 2008 2007 $ $	Parent 2008 2007 $ $
0 479,243 479,243 (619,191) (185,757) 676,188 (11,188) 479,243 (77%) 108,000 1,286,284 1,394,284 21,963 0 38,908 2,150,940 0 2,211,811 1,296,770 (479,243) 0 0 817,527	0 (659,766) (659,766) (2,046,375) (613,913) (31,641) (14,212) (659,766) 32% 0 0 0 59,657 0 45,037 1,192,076 0 1,296,770 637,003 649,202 0 10,565 1,296,770	0 (766,794) (766,794) (2,751,901) (825,570) 69,964 (11,188) (766,794) 17% 0 0 0 21,582 0 38,908 1,943,940 0 2,004,430 1,237,636 766,794 0 0 2,004,430	0 (642,239)
			(642,239)
			(2,038,964)
			(611,690)
			(16,337) (14,212)
			(642,239)
			31% 0 0
			0
			31,905 100,502 45,037 1,060,192 0
			1,237,636
			595,397 642,239 0 0 1,237,636

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

for the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

*. Taxation(CONTINUED)* Consolidated Parent 2008 2007 2008 2007 $ $ $ $ Deferred Tax Assets The overall movement in the deferred asset tax account is as follows: Accruals and Provisions Opening Balance 59,657 50,514 132,407 101,638 (Charged)/credit to income statement (37,694) (1,422) (110,825) 30,769 (Charged)/credit to equity 0 0 0 0 Under-provision for income tax in prior years 0 10,565 0 0 Closing Balance 21,963 59,657 21,582 132,407 Prepayments Opening Balance 45,037 0 45,037 0 (Charged)/credit to income statement (6,129) 45,037 (6,129) 45,037 (Charged)/credit to equity 0 0 0 0 Closing Balance 38,908 45,037 38,908 45,037 Losses available for offset against future taxable income Opening Balance 1,192,076 586,489 1,060,192 493,759 (Charged)/credit to income statement 958,864 605,587 883,748 566,433 (Charged)/credit to equity Closing Balance 2,150,940 1,192,076 1,943,940 1,060,192 Deferred Tax Liabilities The overall movement in the deferred liability tax account is as follows: Opening Balance 0 0 0 0 (Credit)/charged to income statement (1,394,284) 0 0 0 (Credit)/charged to equity 0 0 0 0 Under-provision for income tax in prior years 0 0 0 0 Closing Balance (1,394,284) 0 0 0 e) Deferred tax assets not brought to account, the benefit of which will only be realised if the conditions for deductibility in note 1h occur - Temporary difference 606,077 0 0 0 . Earnings Per Share Consolidated Group 2008 2007 $ $ Earnings used in calculating basic earnings per share (1,098,434) (1,386,609) No. No.** Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share 79,954,829 52,238,158	Consolidated 2008 2007 $ $	Consolidated 2008 2007 $ $	Parent 2008 2007 $ $	Parent 2008 2007 $ $
		50,514 132,407 101,638 (1,422) (110,825) 30,769 0 0 0 10,565 0 0 59,657 21,582 132,407 0 45,037 0 45,037 (6,129) 45,037 0 0 0 45,037 38,908 45,037 586,489 1,060,192 493,759 605,587 883,748 566,433 1,192,076 1,943,940 1,060,192 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Consolidated Group 2008 2007 $ $ (1,098,434) (1,386,609) No. No. 79,954,829 52,238,158		101,638 30,769 0 0
				132,407
				0 45,037 0
				45,037
				493,759 566,433
				1,060,192
				0 0 0 0
				0

4. Taxation (CONTINUED)

5. Earnings Per Share

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2008

6. Cash and Cash Equivalents

Consolidated 2008 2007 $ $	Parent 2008 2007 $ $ 217 3,322 217 3,322 (424,580) (347,755) (14,812) 0 (439,175) (344,433) (1,985,107) (1,396,725) 111,911 106,115 335,008 112,005 517,393 374,607 0 52,500 205,685 118,050 0 0 0 0 (284) 0 0 5,000 0 (8,889) (309,515) 132,335 (530) (766,794) (642,240) (9,390) (7,590) (930,679) 208,469 0 0 12,270 16,297 0 0 (2,687,167) (1,062,931)	Parent 2008 2007 $ $ 217 3,322 217 3,322 (424,580) (347,755) (14,812) 0 (439,175) (344,433) (1,985,107) (1,396,725) 111,911 106,115 335,008 112,005 517,393 374,607 0 52,500 205,685 118,050 0 0 0 0 (284) 0 0 5,000 0 (8,889) (309,515) 132,335 (530) (766,794) (642,240) (9,390) (7,590) (930,679) 208,469 0 0 12,270 16,297 0 0 (2,687,167) (1,062,931)
3,323 3,323 (358,714) 0	217 217 (424,580) (14,812) (439,175) (1,985,107) 111,911 335,008 517,393 0 205,685 0 0 (284) 0 0 (309,515) 132,335 (766,794) (9,390) (930,679) 0 12,270 0 (2,687,167)

(355,391)		(344,433)
(1,386,609) 107,548 (2,000) 364,043 52,500 118,050 0 0 0 5,000 (11,315) 0 (7,088) (659,767) (7,590) 233,813 0 11,676 94 (1,181,645)		(1,396,725) 106,115 112,005 374,607 52,500 118,050 0 0 0 5,000 (8,889) (530) (642,240) (7,590) 208,469 0 16,297 0 (1,062,931)

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2008

6. Cash and Cash Equivalents (CONTINUED)

d) Non Cash Financing and Investing Activities

Sub-licence agreement with Timms Cho Group Limited

Pursuant to the sub-licence agreement entered into with Timms Cho Group Limited in August 2007, 16,000,000 shares were issued to the sub-licencee. Further as a result of the successful negotiation of the sub-licence agreement, shares were issued to the following parties as a success fee or introduction fee:

Steynton Nominees Pty Ltd 550,000 ordinary shares Pannah Pty Ltd 550,000 ordinary shares Rewothtous Limited 5,000,000 ordinary shares

The share issues and resulting non current assets totalling $21,550,000 are not reflected in the cash flow statement.

7. Trade and Other Receivables

. Trade and Other Receivables CURRENT Trade debtors Other debtors Accrued Income Fringe benefits tax Related party receivables Director related entities Wholly-owned subsidiary Less: Accumulated Impairment	Consolidated 2008 2007 $ $	Consolidated 2008 2007 $ $	Parent 2008 2007 $ $	Parent 2008 2007 $ $
	15,029 328,161 360,000 1,404 876,461 0 0 1,581,055	0 99,080 0 4,618 34,352 0 (33,212) 104,838	0 245,066 0 0 34,352 22,111,311 0 22,390,729	0 81,680 0 0 34,352 301,796 (335,008)
				82,820

Trade and other receivables are non-interest bearing.

For terms and conditions relating to related party receivables refer to note 21.

There are no balances within trade and other receivables that contain assets that are not impaired and are past due. It is expected these balances will be received when due.

Impaired assets are provided for in full.

8. Property, Plant & Equipment

Plant & Equipment Less Accumulated Depreciation	82,081 (19,972) 62,109	30,157 (7,669) 22,488	75,673 (17,616) 58,057	24,758 (6,955)
				17,803

(a) Movements in carrying amounts

Consolidated Entity Balance at 1 July 2007 of the year Additions Disposals Depreciation expense Carrying Value at 30 June 2008	Plant & Equipment $	Total $
	22,488 51,924 0 (12,303) 62,109	22,488 51,924 0 (12,303)
		62,109

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2008

Consolidated 2008 2007 $ $	Consolidated 2008 2007 $ $	Parent 2008 2007 $ $	Parent 2008 2007 $ $
1,994,658 (374,145) 1,620,513 9,330 (8,289) 1,041 16,000,000 (1,436,627) 14,563,373 16,184,927 Patents & Licences $	1,951,849 (275,645) 1,676,204 9,330 (5,539) 3,791 0 0 0 1,679,995 Web Site Costs $	1,994,446 (374,145) 1,620,301 9,330 (8,289) 1,041 0 0 0 1,621,342 Exclusivity Licence $	1,951,423 (275,645)
			1,675,778
			9,330 (5,539)
			3,791
			0 0
			0

			1,679,569
			Total $
1,772,874 (1,066) (95,604) 1,676,204 1,676,204 43,024 (98,715) 1,620,513	2,949 4,409 (3,567) 3,791 3,791 0 (2,750) 1,041	0 0 0 0 0 16,000,000 (1,436,627) 14,563,373	1,775,823 3,343 (99,171)
			1,679,995
			1,679,995 16,043,024 (1,538,092)
			16,184,927

No impairment loss was charged for continuing operations in the year ended 30 June 2008.

The carrying value of these licences and patents are dependent upon the company being able to successfully commercialise its soil substitute product which at the date of this financial report can not be reasonably determined.

Impairment Disclosures

Intangible assets are allocated to cash-generating units which are based on the group’s reporting segments. The group has only one segment being the manufacture of soil substitutes throughout Australia.

Manufacture of soil substitutes throughout Australia	Consolidated Parent 2008 2007 2008 2007 $ $ $ $
	16,184,927 1,679,995 1,621,342 1,679,569

The recoverable amount of each cash-generating unit above is determined based on value-in-use calculations. Value-inuse is calculated based on the present value of cash flow projections over a five-year period based on minimum performance criteria in agreements with a third party. A terminal value of 8 times net cash inflows from operating activities and investing activities in the fifth year of the initial five-year period. No growth rate was assumed in the initial five year term.

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2008

9. Intangible Assets (CONTINUED)

The cash flows are discounted using the yield of RBA official cash rate at the beginning of the budget period. The following assumptions were used in the value-in-use calculations:

he following assumptions were used in the value-in-use	calculations:
Manufacture of soil substitutes throughout Australia	Growth Rate Discount Rate: Low Discount Rate: High
	Nil% 13.2% 17.5%

Management has based the value-in-use calculations on forecasts for each reporting segment. These forecasts were based on contracted revenue at minimum performance levels set out in the agreement. As the revenue is licence and royalty in nature, no direct costs relate to revenue in the calculations. Indirect costs were estimated based on historical information and directors forecasts.

Discount rates are pre-tax and are adjusted to incorporate associated risks.

10. Financial Assets NON-CURRENT Available for sale financial assets: Unlisted investments, at cost - Shares in controlled entities	Consolidated Parent 2008 2007 2008 2007 $ $ $ $
	0 0 1 1

11. Other Receivables

NON-CURRENT Related party receivables Licence Fee Receivable 12. Other Non Current Assets Security Bonds Trade Mark Application Exclusivity Licence Costs At Cost Accumulated amortisation	4,357,542 18,190 1,300 6,500,000 (583,629) 5,916,371 5,935,861	0 8,800 400 0 0 0 9,200	0 18,190 0 0 0 0 18,190	0
				8,800 0 0 0
				0
				8,800

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2008

12. Other Non Current Assets (CONTINUED)

*2. Other Non Current Assets(CONTINUED)***
Consolidated Entity: Reporting period ended 30 June 2007: At 1 July 2006 net of accumulated amortisation Additions Amortisation At 30 June 2007 net of accumulated amortisation Reporting period ended 30 June 2008: At 1 July 2007 net of accumulated amortisation Additions Amortisation At 30 June 2008 net of accumulated amortisation	Exclusivity Licence Costs $	Total $
	0 0 0 0 0 6,500,000 (583,629) 5,916,371	0 0 0
		0
		0 6,500,000 (583,629)
		5,916,371

13. Trade and Other Payables CURRENT Unsecured Liabilities Sundry creditors and accrued expenses Related party payables Director related entities	Consolidated 2008 2007 $ $	Consolidated 2008 2007 $ $	Parent 2008 2007 $ $	Parent 2008 2007 $ $
	125,897 207,642 333,539	640,957 357,223 998,180	122,929 206,414 329,343	475,043 349,907
				824,950

Trade payables are non-interest bearing and are normally settled on 30-day terms. Other payables are non-interest bearing.

For terms and conditions relating to related parties refer to note 21.

The net of GST payable and GST receivable is remitted to the appropriate tax body on a quarterly basis.

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2008

Consolidated 2008 2007 $ $	Consolidated 2008 2007 $ $	Parent 2008 2007 $ $	Parent 2008 2007 $ $
424,580 347,754 0 10,960 840,413 752,071 10,000 10,000 702,554 659,081 909,777 0 100,000 100,000 207,043 0 1,236,631 0 139,001 0 224,693 0 62,500 0 43,379 0 4,900,571 1,879,866 Consolidated 2008 2007 $ $		424,580 347,754 0 0 840,413 752,071 10,000 10,000 702,554 659,081 343,111 0 100,000 100,000 207,043 0 669,966 0 139,001 0 224,693 0 62,500 0 43,379 0 3,767,240 1,868,906 Parent 2008 2007 $ $	347,754 0 752,071 10,000 659,081 0 100,000 0 0 0 0 0 0
			1,868,906
424,580 840,413 1,264,993	358,714 752,071 1,110,785	424,580 840,413 1,264,993	347,754 752,071
			1,099,825

b. A charge over all assets of the company has been pledged as security for the above secured liabilities. The carrying amounts of non-current assets pledged as security are as recognised in the balance sheet.
c. The bank overdraft of the parent entity is secured by a guarantee and indemnity for $475,000 given by Graeme Scott.
d. The loan from Ardisia Pty Ltd is secured by a mortgage over the undertaking of the company, its assets, rights and property.

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2008

14. Financial Liabilities (CONTINUED)

$10,000 Nil interest loan

This loan is unsecured and repayable on demand and bears a nil% interest rate over the term of the loan.

$28,528 loan

This loan is unsecured and is repayable within 12 months of 30 June 2008 and bears an interest rate of 1% per month over the term of the loan.

$100,000 loan

This loan is unsecured and repayable on demand and bears an interest rate of 10% per annum.

$840,413 loan

This loan is secured by a mortgage over the undertaking of the company, its assets, rights and property. The loan bears an interest rate of 2.858% per month and is repayable on demand after 1 January 2008.

$207,043 Nil interest loan

This loan is unsecured and repayable on demand after 31 March 2009 and bears a nil% interest rate over the term of the loan.

$881,249 loan

This loan is unsecured and is repayable on demand after 31 March 2009 and bears an interest rate of 1% per month over the term of the loan. The terms of the loan are the same for both the consolidated and parent loan.

$702,554 loan

This loan is unsecured and is repayable on demand after 1 January 2009 and bears an interest rate of 2.50% per month over the term of the loan.

$1,236,631 loan

$139,001 Nil interest loan

This loan is unsecured and repayable on demand after 31 March 2009 and bears a nil% interest rate over the term of the loan.

$224,693 Nil interest loan

This loan is unsecured and repayable on demand after 31 March 2009 and bears a nil% interest rate over the term of the loan.

$62,500 Nil interest loan

This loan is unsecured and repayable on demand after 31 March 2009 and bears a nil% interest rate over the term of the loan.

$43,379 Nil interest loan

This loan is unsecured and repayable on demand after 31 March 2009 and bears a nil% interest rate over the term of the loan.

Consolidated 2008 2007 $ $	Consolidated 2008 2007 $ $	Parent 2008 2007 $ $	Parent 2008 2007 $ $
49,125 58,217 (9,092) 49,125	58,217 41,919 16,298 58,217	47,858 35,589 12,269 47,858
			35,589
			19,291 16,298
			35,589

15. Provisions

A provision has been recognised for employee entitlements relating to annual leave. The measurement and recognition criteria relating to employee benefits have been included in note 1 to this report.

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2008

Consolidated 2008 2007 $ $	Consolidated 2008 2007 $ $	Parent 2008 2007 $ $	Parent 2008 2007 $ $
250,000 691,438 941,438 32,707,528 (4,275,931) 28,431,597	0 0 0 4,706,647 0 4,706,647	0 0 0 32,707,528 (4,275,931) 28,431,597	0 0 0
			4,706,647 0
			4,706,647

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

for the year ended 30 June 2008

NOTES TO THE FINANCIAL STATEMENTS

17. Issued Capital *(CONTINUED)* a) Ordinary Shares Movement in ordinary shares on issue At the beginning of the reporting period Issued on 7 July 2006 for cash of $1.25 each Issued on 17 August 2006 for cash of $0.01 Issued on 17 August 2006 for cash of $1.00 Issued on 17 August 2006 for cash of $1.25 Issued on 22 August 2006 for cash of $0.01 Issued on 10 October 2006 for cash of $1.00 Issued on 12 October 2006 for cash of $0.01 Issued on 12 October 2006 for cash of $1.00 Issued on 27 October 2006 for cash of $1.25 Issued on 24 January 2007 for cash of $0.45 Issued on 31 January 2007 for cash of $0.45 Issued on 16 March 2007 for cash of $0.01 Issued on 30 March 2007 for cash of $0.40 Issued on 30 March 2007 for cash of $0.50 Issued on 5 May 2007 for cash of $0.50 Issued on 5 May 2007 for cash of $0.01 Issued on 9 May 2007 for cash of $0.50 Issued on 15 June 2007 for cash of $0.01 Issued on 22 June 2007 for cash of $0.65 Issued on 29 June 2007 for cash of $0.60 Issued on 19 July 2007 for cash of $0.50 Issued on 19 July 2007 for non-cash of $0.50 Issued on 23 July 2007 for cash of $0.50 Issued on 1 August 2007 for cash of $0.50 Issued on 7 August 2007 for cash of $0.01 Issued on 7 August 2007 for cash of $0.50 Issued on 7 August 2007 for non-cash of $0.50 Issued on 7 August 2007 for non-cash of $1.00 Issued on 10 August 2007 for cash of $0.01 Issued on 10 August 2007 for cash of $0.50 Issued on 27 August 2007 for cash of $0.01 Issued on 27 August 2007 for cash of $0.50 Issued on 19 September 2007 for cash of $0.50 Issued on 19 September 2007 for cash of $0.60 Issued on 19 September 2007 for cash of $0.65 Issued on 26 September 2007 for cash of $0.50 Issued on 26 September 2007 for cash of $0.65 Issued on 26 September 2007 for non-cash of $1.00 Issued on 23 October 2007 for cash of $0.50 Issued on 23 October 2007 for non-cash of $0.50 Issued on 26 October 2007 for non-cash of $0.50 Issued on 30 November 2007 for cash of $0.50 Issued on 5 December 2007 for cash of $0.50 Issued on 11 December 2007 for cash of $0.50 Issued on 21 January 2008 for cash of $0.50 Issued on 14 March 2008 for cash of $0.50 Issued on 14 March 2008 for cash of $0.80 Issued on 14 March 2008 for cash of $1.00 Issued on 12 May 2008 for cash of $0.25 Issued on 18 June 2008 for cash of $0.25 Issued on 18 June 2008 for cash of $0.50 Issued on 18 June 2008 for non-cash of $0.65 Issued on 18 June 2008 for non-cash of $0.80 Issued on 18 June 2008 for non-cash of $1.00 At 30 June 2008	Consolidated 2008 2007 No. No.	Consolidated 2008 2007 No. No.	Parent 2008 2007 No. No.	Parent 2008 2007 No. No.
	53,240,292 - - - - - - - - - - - - - - - - - - - - 130,000 2,500 100,000 54,000 8,601 30,000 1,100,000 21,000,000 6,150 230,000 2,343 6,000 139,225 35,000 150,000 139,000 50,000 10,000 890,000 325,000 6,025,891 580,000 76,000 20,000 200,000 410,000 757,256 376,200 800,000 600,000 50,000 16,922 7,594 145,000 87,712,974	51,682,692 20,000 8,300 50,000 4,000 2,150 50,000 2,150 200,000 24,000 60,000 135,000 4,000 562,000 200,000 10,000 4,000 20,000 2,000 150,000 50,000 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 53,240,292	53,240,292 - - - - - - - - - - - - - - - - - - - - 130,000 2,500 100,000 54,000 8,601 30,000 1,100,000 21,000,000 6,150 230,000 2,343 6,000 139,225 35,000 150,000 139,000 50,000 10,000 890,000 325,000 6,025,891 580,000 76,000 20,000 200,000 410,000 757,256 376,200 800,000 600,000 50,000 16,922 7,594 145,000 87,712,974	51,682,692 20,000 8,300 50,000 4,000 2,150 50,000 2,150 200,000 24,000 60,000 135,000 4,000 562,000 200,000 10,000 4,000 20,000 2,000 150,000 50,000 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
				53,240,292

Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held.

At the shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2008

17. Issued Capital (CONTINUED)

b) Capital Management

Management controls the capital of the group in order to maintain a good debt to equity ratio, provide the shareholders with adequate returns and ensure that the group can fund its operations and continue as a going concern.

The group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.

There are no externally imposed capital requirements.

Management effectively manages the group’s capital by assessing the group’s financial risks and adjusting its capital structure in response to changes in these risks and the market. These responses include the management of debt levels and share issues.

There have been no changes in the strategy adopted by management to control the capital of the group since the prior year. The gearing ratios for the year ended 30 June 2008 and 30 June 2007 are as follows:

Note	Consolidated 2008 2007 $ $	Consolidated 2008 2007 $ $	Parent 2008 2007 $ $	Parent 2008 2007 $ $
13,14 6	5,234,110 (695) 5,233,415 22,715,043 27,948,458 19%	2,878,046 (3,323) 2,874,723 180,351 3,055,074 94%	4,096,583 (217) 4,096,366 21,948,525 26,044,891 16%	2,693,856 (3,322)
				2,690,534 300,506
				2,991,040
				90%

18. Reserves

Option reserve

The option reserve is used to record the issue of options available to be excised for ordinary shares. On the 11 March 2005, 1,962,753 options were granted at a premium of $750,000 to RRA Enterprises Limited (formerly FI Ventures Limited), a related party, to accept ordinary shares at an exercise price of $0.01 each. Options outstanding are exercisable within 45 days of the company listing on an approved stock exchange. The company listed on the Australian Securities Exchange on 27 March 2008 – outstanding options expired 45 days later on 11 May 2008. Details of options exercised and outstanding are as follows:

Options outstanding at 1 July 2007 Exercised on 7 August 2007 Exercised on 10 August 2007 Exercised on 27 August 2007 Expired on 11 May 2008 Options outstanding at 30 June 2008	240,303 8,601 6,150 2,343 223,209 0

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2008

19. Financial Risk Management Policies

The following information is set out to provide disclosures that enable users to evaluate:

the significance of financial instruments for the entity's financial position and performance; and
the nature and extent of risks arising from financial instruments to which the entity is exposed during the period and at the reporting date, and how the Company manages those risks.

The Company conducts transactions in the following financial instruments:

cash and cash equivalents;
receivables;
deposits;
payables; and
borrowings, including bank facilities and third party loans.

The Company is exposed to financial risks as a result of these transactions. These risks can be classified into credit risk, liquidity risk and market risk (in respect of interest rate risk, foreign currency risk and other price risks).

The Company has in place a risk management framework that mitigates these risks, with the purpose of mitigating overall risk to financial performance. Financial risk management policies are approved by the board of directors.

The Company does not conduct derivative transactions nor trade speculatively in financial instruments, derivative or otherwise.

Interest rates are fixed on certain bank and other loans, as approved by the board of Directors on a case by case basis.

The Company manages its risks in consideration of both its financial results and its underlying financial position.

The financial risks associated with the Company’s transactions and the Company’s related risk management policies, are set out below.

Credit Risk

Credit risk is the risk that the fair value of a financial asset will decrease due to the failure of an entity with whom the Company transacts to fulfil its contractual obligations.

Currently the company’s credit risk rests with one customer however it is the company’s intention to expand its customer base which will spread the credit risk.

The primary source of credit risk for the Company is trade receivables relating to customers who have credit terms for the settlement of outstanding amounts in respect of the supply of goods and services.

The Company has developed procedures to manage these risks. These procedures have been developed considering the fact that the Company has appointed several licensees for its product in major territories. These procedures include:

review of the licensees capacity to fulfil their obligations prior to their appointment as a licensee;
requirement for the licensee to pay an advance payments or other collateral held as security; and
ongoing assessments of trade receivables and, where appropriate, a provision for bad and doubtful debtors against those assets which require it.

The maximum exposure to credit risk is the carrying value of trade receivables net of any provisions.

Liquidity Risk

Liquidity risk is the inherent risk that the Company will have difficulties in meeting its financial commitments as and when they fall due. All financial liabilities with a contractual maturity date contribute to the Company’s liquidity risks.

The procedures in place to manage these risks include ongoing cash flow forecasting and the maintenance of a cash policy that requires a minimum level of cash and cash equivalents, and a minimum level of undrawn bank facilities.

The contractual maturity date for financial liabilities is set out in note 14.

Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The market risk of the company comprises interest rate risk and currency risk.

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2008

19. Financial Risk Management Policies (CONTINUED)

The Company does not hedge interest rate or foreign currency risk or use derivatives to manage its interest rate and foreign currency risk.

Credit Risk Exposure

The credit risk on financial assets of the consolidated entity is generally the carrying amount of trade receivables, net of any provisions for doubtful debts.

Interest Rate Risk Exposure

Interest rate risk is the risk that the fair value of a financial instrument or its cash flows will vary, due to changes in interest rates. Interest bearing financial assets comprise cash at bank and in hand. Surplus cash at bank is used to reduce working capital facilities, therefore there is minimal interest rate risk on financial assets.

Financial liabilities relate to debt and borrowings from the Company’s primary banker and other parties. Cash flow interest rate risk arises mainly from borrowings that attract variable interest rates. Working capital facilities attract a variable interest rate. The Company manages the interest rate exposure on this facility in accordance with targeted ratios of fixed interest debt to variable interest rate debt. These targets are continually reviewed.

The Company does not hedge interest rate risk or use derivatives to manage its interest rate risk. All interest rates applicable are Australian interest rates.

The Company’s interest rate risk exposure arises mainly from liabilities bearing variable interest rates.

Details of the Group’s interest rate exposure are set out below.

All other assets and liabilities are non-interest bearing.

The net fair value of non-interest bearing monetary financial assets and financial liabilities of the consolidated entity approximates their carrying amounts.

CONSOLIDATED

2008 Financial assets Cash and cash equivalent Weighted average interest rate (pa) Trade and other receivables Weighted average interest rate (pa) Total financial assets Financial liabilities Trade and other payables Weighted average interest rate (pa) Bank overdrafts Weighted average interest rate (pa) Borrowings Weighted average interest rate (pa) Total financial liabilities	Floating rate Fixed interest rate maturing in Non interest bearing Total < 1year 1to 5 years >5 years
	695 0 0 0 0 695 6.00% N/A N/A N/A N/A 6.00% 0 0 0 0 5,955,383 5,955,383 N/A N/A N/A N/A N/A N/A
	695 0 0 0 5,955,383 5,956,078
	0 0 0 0 1,274,977 1,274,977 N/A N/A N/A N/A N/A N/A 424,580 0 0 0 0 424,580 13.73% N/A N/A N/A N/A 13.73% 0 3,689,375 0 0 786,616 4,475,991 N/A 20.51% N/A N/A N/A 16.90%
	424,580 3,689,375 0 0 2,061,593 6,175,548

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2008

19. Financial Risk Management Policies (CONTINUED)

2007 Financial assets Cash and cash equivalent Weighted average interest rate (pa) Trade and other receivables Weighted average interest rate (pa) Total financial assets Financial liabilities Trade and other payables Weighted average interest rate (pa) Bank overdrafts Weighted average interest rate (pa) Borrowings Weighted average interest rate (pa) Total financial liabilities PARENT 2008 Financial assets Cash and cash equivalent Weighted average interest rate (pa) Trade and other receivables Weighted average interest rate (pa) Total financial assets Financial liabilities Trade and other payables Weighted average interest rate (pa) Bank overdrafts Weighted average interest rate (pa) Borrowings Weighted average interest rate (pa) Total financial liabilities	Floating rate Fixed interest rate maturing in Non interest bearing Total < 1year 1 to 5years > 5years
	3,323 0 0 0 0 3,323 5.40% N/A N/A N/A N/A 5.40% 0 0 0 0 113,638 113,638 N/A N/A N/A N/A N/A N/A
	3,323 0 0 0 113,638 116,961
	0 0 0 0 998,180 998,180 N/A N/A N/A N/A N/A N/A 358,714 0 0 0 0 358,714 12.05% N/A N/A N/A N/A 12.05% 0 1,411,152 0 0 110,000 1,521,152 N/A 32.29% N/A N/A 29.96%
	358,714 1,411,152 0 0 1,108,180 2,878,046
	217 0 0 0 0 217 6.00% N/A N/A N/A N/A 6.00% 0 0 0 0 22,408,919 22,408,919 N/A N/A N/A N/A N/A N/A
	217 0 0 0 22,408,919 22,409,136
	0 0 0 0 329,343 329,343 N/A N/A N/A N/A N/A N/A 424,580 0 0 0 0 424,580 13.73% N/A N/A N/A N/A 13.73% 0 2,527,516 0 0 815,144 3,342,660 N/A 24.42% N/A N/A N/A 18.46%
	424,580 2,527,516 0 0 1,144,487 4,096,583

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2008

19. Financial Risk Management Policies CONTINUED)

2007 Financial assets Cash and cash equivalent Weighted average interest rate (pa) Trade and other receivables Weighted average interest rate (pa) Total financial assets Financial liabilities Trade and other payables Weighted average interest rate (pa) Bank overdrafts Weighted average interest rate (pa) Borrowings Weighted average interest rate (pa) Total financial liabilities	Floating rate Fixed interest rate maturing in Non interest bearing Total < 1year 1 to 5years > 5years
	3,322 0 0 0 0 3,322 5.40% N/A N/A N/A N/A 5.40% 0 0 0 0 91,620 91,620 N/A N/A N/A N/A N/A N/A
	3,322 0 0 0 91,620 94,942
	0 0 0 0 824,950 824,950 N/A N/A N/A N/A N/A N/A 347,754 0 0 0 0 347,754 12.05% N/A N/A N/A N/A 12.05% 0 1,411,152 0 0 110,000 1,521,152 N/A 32.29% N/A N/A N/A 29.96%
	347,754 1,411,152 0 0 934,950 2,693,856

Sensitivity Analysis

The table below sets out the effect on profit and equity after tax if interest rates had been higher or lower during the year by an amount of 50 basis points (or 0.5% per annum). This amount has been used as it is the rate movement that is reasonably possible in the current economic environment, and confirmed by market expectations that interest rates in Australia are more likely to move up then down in the coming year. If interest rates were higher by 0.5% per annum, profit and equity will be decreased due to:

increased interest expense on variable rate borrowings; and
increased interest expense on fixed interest borrowings taken out in the year, due to increases in the prevailing interest rate at the time the borrowings were taken out.

These two factors are partially offset by an increase in interest income from cash balances. A corresponding decrease would occur in interest expense (and thus an increase in profit and equity) if interest rates were lower by 50 basis points (or 0.5% per annum).

CONSOLIDATED: Interest rates higher by 0.5% with all other variables held constant Interest rates lower by 0.5% with all other variables held constant PARENT: Interest rates higher by 0.5% with all other variables held constant Interest rates lower by 0.5% with all other variables held constant	Net Profit Equity 2008 2007 2008 2007 $ $ $ $
	(17,152) (6,580) (17,152) (6,580) 17,152 6,580 17,152 6,580 (13,185) (6,541) (13,185) (6,541) 13,185 6,541 13,185 6,541

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2008

19. Financial Risk Management Policies (CONTINUED)

Foreign Currency Risk Exposure

Foreign currency risk is the risk that the fair value of a financial instrument or its cash flows will vary, due to changes in foreign currency rates.

The Group conducts transactions in Australian dollars and United States dollars.

The Company does not hedge foreign currency risk or use derivatives to manage its foreign currency risk.

Sensitivity Analysis

It is estimated that a general movement of one hundred basis points (or 1%) in the value of the Australian Dollar against United States dollar would change the group’s profit after tax by approximately $39,357 for the year ended 30 June 2008 (2007: $Nil). This calculation is based on changing the actual exchange rate of Australian dollars to United States dollar during the year by 1% and applying the adjusted rates to the individual local currency revenue generated in the current financial year.

Other Price Risk

Other price risk is the risk that the fair value of available for sale financial assets will fluctuate due to changes in market prices, other than those arising from interest rate risk and currency risk.

The Company has no other price risks.

Financial Assets and Financial Liabilities

The fair value of all financial assets and liabilities approximates their carrying values. Consequently, in accordance with AASB 7 paragraph 29, fair values and carrying values for each class of financial assets and financial liabilities are not disclosed in this note, as the carrying values of these assets and liabilities are set out elsewhere in the financial statements.

Breaches

During the year the Company has not breached any of its agreements with its lenders, suppliers, customers or employees.

20. Commitments and Contingencies

The minimum commitments contracted for at reporting date, but not provided for are as follows:

Within one year: Related party (note 21) Other entities After one year but not more than five years: Related party (note 21)	Consolidated 2008 2007 $ $	Consolidated 2008 2007 $ $	Parent 2008 2007 $ $	Parent 2008 2007 $ $
	120,000 0 100,000 220,000	870,000 3,250,000 220,000 4,340,000	120,000 0 100,000 220,000	870,000 3,250,000 220,000
				4,340,000

All contracted expenditure is cancellable without penalty with a minimum of 90 days notice by either the contractor or the Company.

As a result of a sub-licence agreement signed after 30 June 2007 Soil Sub Technologies Limited was committed to the payment of an introduction fee of $2,500,000 to an unrelated party and success fees of $750,000 each to a related party and another unrelated party. These payments were made prior to 30 June 2008.

There are no contingent liabilities at balance date.

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2008

21. Related Party Disclosure

The consolidated financial statements include the financial statements of Soil Sub Technologies Limited and the subsidiaries listed in the following table.

Nutrimix Distribution Pty Limited	% Equity interest Country of Incorporation 2008 2007	Investment ($) 2008 2007	Investment ($) 2008 2007
	Australia 100% 100%	1 1	1
			1

Soil Sub Technologies Limited is the ultimate Australian parent company.

The following table provides the total amount of transactions which have been entered into with related parties for the relevant financial year.

relevant financial year.
Related party CONSOLIDATED Director related entities June 2008 June 2007 PARENT Director related entities June 2008 June 2007 Subsidiaries June 2008 June 2007	Sales to related parties Purchases from related parties Amounts owed by related parties Amounts owed to related parties $ $ $ $
	4,859,443 19,280,494 5,232,862 1,958,974 0 393,993 0 1,016,304 0 2,518,005 33,212 1,391,080 0 376,827 33,212 1,008,988 0 0 22,111,311 0 0 0 301,796 0

During the reporting period the company incurred costs of $2,495,000 (2007: $180,000) for services provided by Steynton Nominees Pty Ltd as trustee for The G E Scott Family Trust. This entity is director related. The costs related to:

Consulting services $120,000 (2007: $180,000) Bank guarantee fee $100,000 (2007: Nil) Financial support $25,000 (2007: Nil) Success fee – Timms Cho Group agreement $750,000 (2007: Nil) Success fee – listing of the company $1,500,000 (2007: Nil)

The amount outstanding at balance date totals $1,054,977.

The company paid commissions of $25,466 (2007: $5,390) to the children of Mr G Scott during the reporting period.

During the reporting period the company incurred costs of $260,028 (2007:$208,603) for accounting and management services from Intuity Partners Pty Ltd which is a director related entity. The amount outstanding at balance date totals $62,042.

The company paid Mr J Callianiotis a success fee as a result of the listing of the company of $500,000 (2007: Nil). Of this, $75,000 was paid to Homeshire Pty Ltd as trustee for The Callianiotis Family Superannuation Fund with the balance paid to Mr Callianiotis. The amount outstanding at balance date totals $139,001.

The company paid an exclusivity licence fee to Timms Cho Group Limited of $16,000,000 (2007: Nil) in connection with the licence agreement entered into during the year. The company recorded a licence fee payable by Timms Cho Group Limited during the year. The amount outstanding at balance date was $5,229,050. A further 4,000,000 shares will be issued to Timms Cho Group Limited subject to the achievement of certain sales targets as specified in the licence agreement dated 8 June 2007.

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2008

21. Related Party Disclosure (CONTINUED)

Transactions between all related parties are on normal commercial terms and conditions no more favourable that those available to other parties unless otherwise stated.

There have been no guarantees provided or received for any related party receivables.

For the year ended 30 June 2008, the group has not raised an impairment provision relating to amounts owed by related parties (June 2007: $301,796). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates in. When assessed as required the group raises such a provision.

22. Segment Reporting

The economic entity operates predominantly in one business and geographical segment being the manufacture of soil substitutes throughout Australia.

23. Key Management Personnel Compensation

a) Names and positions held of parent entity directors in office at any time during the financial year are:

Graeme Eric Scott Chairman – Executive Alan Neil Atchison Director – Non Executive John Leslie Saunders Director – Non Executive James Nicholas Callianiotis Director – Executive Terence Henry Charles Timms Managing Director – Executive (appointed 18 October 2007)

There are no other key management personnel.

The remuneration of key management personnel is disclosed in the Directors Report.

b) Number of shares held by Key Management Personnel

	Balance	Received as	Options	Received Under	Net Change	Balance
	1 July 2007	Compensation	Exercised	Agreement#	Other*	30 June 2008
Mr GE Scott
Steynton Nominees Pty Ltd as
trustee for The G E Scott Family	3,100,000	0	0	2,625,891	1,276,683	7,002,574
Trust
Steynton Nominees Pty Ltd as trustee for The Ericon Family Trust	10,000				21,400	31,400
Expo Document Copy Centre (WA)
Pty Ltd as trustee for The Expo Unit	0	0	0	0	15,000	15,000
Trust
Nesbitt Pastoral Co. Pty Ltd	0	0	0	0	200,000	200,000
Nutrimix International Pty Ltd	783,689	0	0	0	(133,422)	650,267
Valkar Holdings Pty Ltd	128,500	0	0	0	394,025	522,525
Mr MG Scott	72,000	0	0	0	0	72,000
Mrs TT Gresele	62,000	0	0	0	0	62,000
Mr P & Mrs TT Gresele	0	0	0	0	20,000	20,000
Mrs DM White	72,000	0	0	0	0	72,000
Mr A & Mrs DM White	0	0	0	0	32,500	32,500

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2008

23. Key Management Personnel Compensation (CONTINUED)

	Balance	Received as	Options	Received Under	Net Change	Balance
	1 July 2007	Compensation	Exercised	Agreement	Other*	30 June 2008
Mr AN Atchison
Nutrimix International Pty Ltd	783,689	0	0	0	(133,422)	650,267
Intuity Partners Pty Ltd	60,000	0	0	0	146,809	206,809
Expo Document Copy Centre (WA)
Pty Ltd as trustee for The Expo Unit	0	0	0	0	15,000	15,000
Trust
Heidi Atchison as trustee for The Atchison Family Trust	785,000	0	0	0	(15,000)	770,000
Heidi Atchison as trustee for The New Order Trust	0	0	0	0	18,306	18,306
Mr JL Saunders
Que Pasa Pty Ltd as trustee for The Saunders Family Trust	720,000	0	0	0	0	720,000
Mr JN Callianiotis
Mr JN Callianiotis	0	0	0	550,000	0	550,000
Homeshire Pty Ltd as trustee for The
Callianiotis Family Superannuation	135,666	0	0	150,000	0	285,666
Fund
Ms A Callianiotis	1,000	0	0	0	0	1,000
Mr N Callianiotis	1,000	0	0	0	0	1,000
Miss S Callianiotis	1,000	0	0	0	0	1,000
Ms J Johansen	1,000	0	0	0	333	1,333
Mr THC Timms
Timms Cho Group Limited	0	0	0	16,000,000	0	16,000,000

Received Under Agreement refers to shares received in relation to agreements entered into with the company or in shares issued by the company in payment of creditors.

Net Change Other refers to shares purchased or sold during the financial year including transactions prior to listing and after listing.

24. Share Based Payments

Soil Sub Technologies Limited granted the following equity instruments during the year in relation to services received and in connection with agreements made with the company. The fair values of the equity instruments issued were determined based on contracts and invoices received.

For the year ended 30 June 2008:

Related Parties

Related Parties
Measurement Date	CONSOLIDATED PARENT Number of Shares Price Per Share Weighted Average Fair Value Number of Shares Price Per Share		Weighted Average Fair Value
19 July 2007 7 August 2007 7 August 2007 26 October 2007	2,500 $0.50 16,000,000 $1.00 550,000 $0.50 2,775,891 $0.50 19,328,391	$1,250 2,500 $0.50 $16,000,000 16,000,000 $1.00 $275,000 550,000 $0.50 $1,387,946 2,775,891 $0.50 $17,664,196 19,328,391	$1,250 $16,000,000 $275,000 $1,387,946
			$17,664,196

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2008

24. Share Based Payments (CONTINUED)

Unrelated Parties

Measurement Date 7 August 2007 7 August 2007 26 September 2007 23 October 2007 26 October 2007 18 June 2008 18 June 2008 18 June 2008 Total Share Based Payments	CONSOLIDATED PARENT Number of Shares Price Per Share Weighted Average Fair Value Number of Shares Price Per Share 5,000,000 $1.00 $5,000,000 5,000,000 $1.00 550,000 $0.50 $275,000 550,000 $0.50 10,000 $1.00 $10,000 10,000 $1.00 325,000 $0.50 $162,500 325,000 $0.50 3,250,000 $0.50 $1,625,000 3,250,000 $0.50 145,000 $1.00 $145,000 145,000 $1.00 7,594 $0.80 $6,075 7,594 $0.80 16,922 $0.65 $10,999 16,922 $0.65 9,304,516 $7,234,574 9,304,516 28,632,907 $24,898,770 28,632,907	Weighted Average Fair Value $5,000,000 $275,000 $10,000 $162,500 $1,625,000 $145,000 $6,075 $10,999
		$7,234,574

		$24,897,770

For the year ended 30 June 2007:

Related Parties

Related Parties
Measurement Date	CONSOLIDATED PARENT Number of Shares Price Per Share Weighted Average Fair Value Number of Shares Price Per Share		Weighted Average Fair Value
31 January 2007 31 January 2007 30 March 2007 Total Share Based Payments	100,000 $0.45 35,000 $0.45 62,000 $0.40 197,000	$45,000 100,000 $0.45 $15,750 35,000 $0.45 $24,800 62,000 $0.40 $85,550 197,000	$45,000 $15,750 $24,800
			$85,550

There were no share based payments made to unrelated parties in the year ended 30 June 2007.

25. Events After The Balance Date

No further shares have been issued since balance date to the date of this report.

There were no further events after balance date to report.

26. Auditors’ Remuneration

6. Auditors’ Remuneration
Remuneration of the auditors of the parent entity for: Auditing or reviewing the financial report Other audit related services Other services	Consolidated 2008 2007 $ $		Parent 2008 2007 $ $
	54,747 10,122 0 64,869	20,186 0 0 20,186	54,747 10,122 0 64,869	20,186 0 0
				20,186

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2008

27. Company Details

The registered office of the company is:

Soil Sub Technologies Limited 1[st] Floor, 26 Clive Street WEST PERTH W.A. 6005

The principle place of business is:

Suite 17 & 18 30 Park Road MILTON QLD 4064

28. Change in Accounting Policy

The following Australian Accounting Standards which have been issued or amended and which are applicable to the parent entity and the consolidated group but are not yet effective and have not been adopted in preparation of the financial statements at reporting date.

AASB	Standard Affected	Standard Affected	Outline of Amendment	Outline of Amendment	Application	Application	Application
Amendment					date of		date for
					Standard		Group
AASB 2007–3	AASB 5	Non-current Assets	The disclosure	1 January 2009			1 July 2009
Amendments to		Held for Sale and	requirements of AASB
Australian		Discontinued	114: Segment
Accounting		Operations	Reporting have been
Standards	AASB 102	Inventories	replaced due to the
	AASB 107	Cash Flow Statements	issuing of AASB 8: Operating Segments in February 2007.
	AASB 119	Employee Benefits	These amendments
	AASB 127	Consolidated and	will involve changes
		Separate Financial Statements	to segment reporting disclosures within the
	AASB 134	Interim Financial	financial report. However, it is
		Reporting	anticipated there will
	AASB 136	Impairment of	be no direct impact on
		Assets	recognition and
	AASB	General Insurance	measurement criteria
	1023	Contracts	amounts included in
	AASB	Life Insurance	the financial report.
	1038	Contracts
AASB 8	AASB 114	Segment Reporting	As above	1January 2009		1	July 2009
Operating
Segments

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2008

28. Change in Accounting Policy (CONTINUED)

AASB	Standard Affected	Standard Affected	Outline of Amendment	Outline of Amendment	Application	Application
Amendment					date of	date for
					Standard	Group
AASB 2007–6	AASB 1	First time adoption	The revised AASB	1 January 2009 1		July 2009
Amendments to		of AIFRS	123: Borrowing Costs
Australian			issued in June 2007
Accounting			has removed the
Standards			option to expense all
	AASB 101	Presentation of	borrowing costs. This
		Financial	amendment will
		Statements	require the
	AASB 107	Cash Flow Statements	capitalisation of all borrowing costs directly attributable to
	AASB 116	Property, Plant and	the acquisition,
		Equipment	construction or
	AASB 138	Intangible Assets	production of a qualifying asset.
			However, there will be
			no direct impact to the
			amounts included in
			the financial group as
			they already capitalise
			borrowing costs
			related to qualifying
			assets.
AASB 123	AASB 123	Borrowing Costs	As above	1 January 2009 1		July 2009
Borrowing
Costs
AASB 2007–8	AASB 101	Presentation of	The revised AASB	1 January 2009 1		July 2009
Amendments to		Financial	101: Presentation of
Australian		Statements	Financial Statements
Accounting			issued in September
Standards			2007 requires the
			presentation of a
			statement of
			comprehensive
			income.
AASB 101	AASB 101	Presentation of	As above	1 January 2009 1		July 2009
		Financial
		Statements

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

DIRECTORS’ DECLARATION

The directors of the company declare that:

the financial statements and notes, as set out on pages 12 to 46, are in accordance with the Corporations Act 2001 and:
a. comply with Accounting Standards and the Corporations Regulations 2001; and
b. give a true and fair view of the financial position as at 30 June 2008 and of the performance for the year ended on that date of the company and consolidated group;
the Chief Executive Officer and Chief Finance Officer have each declared that:
a. the financial records of the company for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001 ;
b. the financial statements and notes for the financial year comply with the Accounting Standards; and
c. the financial statements and notes for the financial year give a true and fair view;
in the directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

At the date of this declaration, there are reasonable grounds to believe that the companies which are party to this deed of cross guarantee will be able to meet any obligations or liabilities to which they are, or may become subject to, by virtue of the deed.

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

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GRAEME ERIC SCOTT, DIRECTOR

DATED this 30th day of September 2008

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

Independent Audit Report

To the Members of Soil Sub Technologies Limited

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

As permitted by the Corporations Regulations 2001, the company has disclosed information about the remuneration of directors and executives (remuneration disclosures), required by Accounting Standard AASB 124: Related Party Disclosures, under the heading ‘Remuneration Report’ in pages 5 to 7 of the directors’ report and not in the financial report.

Directors Responsibility for the Financial Report

The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1, the directors also state, in accordance with Accounting Standards AASB 101: Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards (IFRS) ensures that the financial report, comprising the financial statements and notes, complies with IFRS.

The directors also are responsible for preparation and presentation of the remuneration disclosures contained in the directors’ report in accordance with the Corporations Regulations 2001.

Auditor’s Responsibility

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

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

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

Independence

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

Independent Auditor’s Report

To the Members of Soil Sub Technologies Limited

==> picture [75 x 37] intentionally omitted <==

Auditor’s Opinion

In our opinion:

a. The financial report of Soil Sub Technologies Limited and Soil Sub Technologies Limited and its Controlled Entities is in accordance with the Corporations Act 2001, including:
i. giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2008 and of their performance for the year ended on that date; and
ii. complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and
b. The financial report also complies with International Financial Reporting Standards as disclosed in Note 1
c. the remuneration disclosures that are contained in pages 5 to 7 of the directors’ report comply with Accounting Standard AASB 124.

Inherent Uncertainty Regarding the Carrying Value of Intangible Assets, Deferred Tax Assets and balances receivable

within the Group

Without qualification to our opinions expressed above, the balance sheet of the financial report indicates that the Group has recorded Licences and Patents with a carrying value of $1,620,513 as well as an exclusive supply agreement with Timms Cho Limited for with a carrying value of $14,563,373. In addition, the balance sheet includes Deferred Tax Assets totalling $2,211,811. This asset primarily relates to the tax benefit expected to be received in the future from carried forward income tax losses. The balance sheet of the parent also contains receivables due from the wholly owned subsidiary amounting to $22,111,311. The recoverability of these receivables is intrinsically linked to the carrying value of the exclusive supply agreement previously mentioned.

The company has recently entered into an exclusive sub-licence and royalty agreement with Timms Cho Group Limited with the first instalment not required to be paid until either 12 months from execution of the agreement - or 6 months after completing the first planting of 100,000 hectares of oil fruit bearing trees in China - which ever is the later. At the date of my report the later of point has not yet occurred, and as such, the amounts are not yet due to be paid.

Until such time as these contracts are substantially completed there still remains an inherent uncertainty regarding the carrying value of these assets. These items represent the major assets recorded by the Group and for which at this stage we have not been able to obtain sufficient information to determine the reasonableness of their carrying values.

Inherent Uncertainty Regarding Continuation as a Going Concern.

In addition, without further qualification to my opinion, readers attention is also drawn to Note 1(k) of the accounts which describes the significant uncertainty associated with the Company’s ability to continue as a going concern. This outcome will have an effect on whether the Company will be able to realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

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BENTLEYS Chartered Accountants

RANKO MATIC Director

DATED at PERTH this 30[th] day of September 2008

ADDITONAL INFORMATION FOR LISTED PUBLIC COMPANIES

1. Shareholding

a) Distribution of Shareholders as at 29 August 2008:

Category (size of holding)	Total Holders Total Number of Shares % of Issued Capital
1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 – and over Rounding Total	15 12,915 0.01 453 1,292,631 1.47 139 1,102,407 1.26 191 6,131,194 6.99 60 79,173,827 90.26
	0.01 858 87,712,974 100.00

b) The number of shareholdings held in less than marketable parcels as at 29 August 2008 is 40.
c) The names of the substantial shareholders listed in the holding company’s register as at 25 September 2008 are:

Shareholder	Number	% of Issued
	of Shares	Capital
Timms Cho Group Limited	16,000,000	18.24
Mattec Pty Ltd	13,509,267	15.40
Steynton Nominees Pty Ltd as trustee for The G E Scott Family Trust	7,002,574	7.98
Rewothtuos Pty Ltd	5,000,000	5.70

d) Voting Rights:

The voting rights attached to each class of equity security are as follows:

Ordinary shares
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has one vote on a show of hands.

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

e) 20 Largest Shareholders as at 25 September 2008 — Ordinary Shares

Shareholder

Number of
Ordinary Fully
Paid Shares
Held
% Held of
Issued
Ordinary
Capital

1.
Timms Cho Group Limited
2.
Mattec Pty Ltd
3.
Steynton Nominees Pty Ltd as trustee for The G E Scott
Family Trust
4.
Rewothuos Limited
5.
Trelridge Pty Ltd
6.
Global Managed Investment Pty Ltd
7.
Strusiner Investments Pty Ltd
8.
Pannah Pty Ltd
9.
Moggill Golf Pty Ltd as trustee for Stephens 2007 Super
Fund
10.
Mr John Wesley Stamp
11.
Mrs Janet Cobby
12.
Habour Corp Pty Ltd
13.
Dial A Valuer Pty Ltd
14.
Ardisia Pty Ltd
15.
Ms Diane Robyne McAuley
16.
Ms Janet Lee Holmes A Court
17.
Mr Daniel Roy Corbett
18.
Mrs Heidi Jane Atchison as trustee for The Atchison Family
Trust
19.
Que Pasa Pty Ltd as trustee for The Saunders Family Trust
20.
BRN Investments Pty Ltd

16,000,000
18.24
13,509,267
15.40
7,002,574
7.98
5,000,000
5.70
4,356,238
4.97
4,204,212
4.79
3,494,833
3.98
2,350,000
2.68
2,100,500
2.39
1,577,196
1.80
1,397,328
1.59
1,250,000
1.43
979,346
1.12
976,000
1.11
900,000
1.03
874,667
1.00
790,000
0.90
770,000
0.88
720,000
0.82
668,732
0.76

68,920,893
78.57

The name of the company secretary is Michael Gerard Egan
The address of the principal registered office in Australia is C/- Intuity Partners Pty Ltd, Level 1, 26 Clive Street, West Perth WA 6005.
The register of securities is held by Computershare Investor Services Pty Limited at Level 2, 45 St George’s Terrace, Perth WA 6005.
Stock Exchange Listing:

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

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

Unquoted Securities

Restricted Shares

As at 26 September 2008, 41,085,304 shares are unquoted due to escrow restrictions.

Soil Sub Technologies Limited ABN 39 078 388 155 And Controlled Entities

AI assistant

POINTERRA LIMITED — Annual Report 2008

64255_rns_2008-09-30_4c73e0da-175c-4b2f-8333-dc104bc00847.pdf

Soil Sub Technologies Limited ABN 39 078 388 155

And Controlled Entities

Annual Report

Soil Sub Technologies Limited ABN 39 078 388 155

And Controlled Entities

For the Year Ended 30 June 2008

Table of Contents

CORPORATE DIRECTORY

Directors

Secretary

Michael Gerard Egan

Auditors

Corporate Advisor

Patent Attorney

Registered Office

Business Office

Share Registry

Accountants

Directors

Company Secretary

Oscar Giuseppe Enrico Pellizzon

Michael Gerard Egan

Operating Results

Financial Position

Significant Changes in State of Affairs

Principal Activities

After Balance Date Events

Review of Operations

Future Developments, Prospects and Business Strategies

Environmental Management

Dividends Paid or Recommended

Options

Remuneration Report

Remuneration policy

Performance based remuneration

Company performance, shareholder wealth and director and executive remuneration.

Details of remuneration for the year ended 30 June 2008

Indemnifying Officers or Auditors

Proceedings on Behalf of Company

Non-audit Services

Auditor’s Independence Declaration

CORPORATE GOVERNANCE STATEMENT

Board Composition

Trading Policy

Audit Committee

Performance Evaluation

Remuneration Policies

Remuneration Committee

Other Information

Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

INCOME STATEMENT

BALANCE SHEET

as at 30 June 2008

CASH FLOW STATEMENT

for the year ended 30 June 2008

STATEMENT OF CHANGES IN EQUITY

for the year ended 30 June 2008

1. Statement of Significant Accounting Policies

Basis of Preparation

(a) Basis of consolidation

(b) Borrowing costs

(c) Intangible assets

Research and development

(d) Impairment of assets

(e) Cash and cash equivalents

(f) Provisions

(g) Revenue and Other Income

Interest

(h) Income Tax

(i) Goods and Services Tax (GST)

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

(j) Comparative Figures

(k) Going Concern

Plant and equipment

Depreciation

(m) Leases

(n) Financial Instruments

POINTERRA LIMITED Annual Report 2008