FAST SCOUT LIMITED

ABN 94 088 488 724

FULL YEAR REPORTS:

ASX Appendix 4E Preliminary Final Report Directors' Report Auditor's Independence Declaration Financial Report Audit Report

30 June 2005

www.fastscout.com

FAST SCOUT LIMITED

A.B.N. 94 088 488 724

Level 14, 221 St Georges Terrace, Perth WA 6000 $T$ | + 61 (8) 9214 9700 $F$ | + 61 (8) 9322 1515

ASX Appendix 4E
Preliminary Final Report	2
Directors' Report	5.
(which includes
Auditor's Independence Declaration)	18
Statements of Financial Performance	20
Statements of Financial Position	21
Statements of Cash Flows	22
Notes to Financial Statements	23
Directors' Declaration	38
Independent Audit Report	39

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CORPORATE DIRECTORY

BOARD Farooq Khan

Azhar Chaudhri Yagoob Khan Victor P H Ho

Chairman and Managing Director Executive Director Executive Director Executive Director

COMPANY SECRETARY Victor P H Ho

PRINCIPAL & REGISTERED OFFICE

Level 14, The Forrest Centre 221 St Georges Terrace Perth Western Australia 6000

Telephone: Facsimile:

+61 8 9214 9700 +61 8 9322 1515

Email: Internet: [email protected] www.fastscout.com

SHARE REGISTRY

Advanced Share Registry Services 110 Stirling Highway Nedlands Western Australia 6009

Telephone: +61 8 9389 8033 Facsimile: +61 8 9389 7871

STOCK EXCHANGE

Australian Stock Exchange Perth, Western Australia

ASX CODE FSL

AUDITORS

Stanton Partners 1 Havelock Street West Perth Perth Western Australia 6005

BANKER

National Australia Bank Level 1, 50 St Georges Terrace Perth Western Australia 6000

APPENDIX 4E PRELIMINARY FINAL REPORT

This Preliminary Final Report is provided to the Australian Stock Exchange (ASX) under ASX Listing Rule 4.3A

Current Reporting Period:	Financial year ended year ended 30 June 2005
Previous Corresponding Period:	Financial year ended year ended 30 June 2004
Balance Date:	30 June 2005
Company:	Fast Scout Limited (FSL)
Consolidated Entity:	FSL and controlled entity:
	Virtual Web Pty Ltd (a wholly owned subsidiary).(1)

RESULTS FOR ANNOUNCEMENT TO THE MARKET

Consolidated Entity	2005$	2004$	%Change	Up / Down
Total revenues from ordinary activitiesTotal expenses from ordinary activities	494.2742.193.221	194,8641,787,239	153.65%22.72%	UpUp
Loss from ordinary activities before tax	(1.698.947)	(1,592,375)	6.69%	Up.
Income tax expense				Unchanged
Loss from ordinary activities after tax attributableto members	(1.698.947)	(1.592.375)	6.69%	Up
Basic loss per share (cents)	(2.082)	(1.952)	6.69%	Up
Pre and post tax NTA backing per share (cents)	0.2807	2.2915	(87.75%)	Down

Dividends

No dividends have been paid or declared during the financial year. The Company is not in a position to pay a final dividend for the year ended 30 June 2005.

Brief Explanation of Results

Fast Scout has accounted for its 32.25% interest in ASX listed Altera Capital Limited ABN 55 082 541 437 (formerly Bigshop.com.au Ltd) (Altera Capital or AEA) as at Balance Date as an investment in an Associate entity (on an equity accounting basis) pursuant to Accounting Standard AASB 1016 "Accounting for Investment in Associates." The Consolidated Entity expensed $348,301 losses attributable to AEA (2004: $391,756 loss).

On 22 July 2005, the Company received its entitlements under an AEA equal return of capital (which was approved by AEA shareholders on 30 June 2005), being:

475,511 shares in ASX listed investment entity Central Exchange Limited (CXL); and $(i)$
11,694,539 shares in ASX listed Sofcom Limited (SOF). The Company has become the largest $(ii)$ shareholder in SOF with 12,420,439 shares (27.8%).

Fast Scout will also be accounting for its 27.8% interest in SOF as an investment in an Associate entity (on an equity accounting basis).

APPENDIX 4E PRELIMINARY FINAL REPORT

parties regarding a sale of its interest in these companies. FSL accounts for its shareholding in these companies without reflecting any potential "control premium" upon a possible sale of such shareholdings.

Revenues from ordinary activities include:

$(1)$ $27,411 sales revenue (2004: $38,349);
$(2)$ $441.979 gross proceeds from the sale of share investments (2004; $81.000);
$17,627 dividend income (2004: $8,145). $(3)$

Expenses from ordinary activities include:

$473,486 costs of disposal of share investments (2004: $60,000); $(1)$
$(2)$ $54,873 provision for diminution of investments (2004: $39,186);
$345,882 professional fees (2004: nil) and $30,068 costs related to investments (2004: nil) this $(3)$ comprises principally the Company's share of legal fees relating to litigation involving Scarborough Equities Limited (formerly Rivkin Financial Services Limited) as described in Section 4.3 of the Review of Operations section of the attached Directors' Report.

The Consolidated Entity derived a $31,507 net loss on the disposal of share investments (2004: $21,000 net qain).

During the financial year, the Company received a total of 439,135 (2004: 255,697) classified business-related website URL's from Data Base Systems Limited (DBS) (pursuant to a portal classification agreement) at a cost of $1,715,260 (2004: $971,911), comprising:

$1,404,266 (2004: $817,667) drawn-down from prepayments of $10,060,340; and $(i)$
a cash component of $310,994 (2004: $154,243). $(ii)$

$206,311 of the above cash component remained outstanding at Balance Date.

The Company notes that pursuant to a settlement and termination of the portal classification agreement with DBS on 19 August 2005 (which was approved by shareholders at a general meeting held on 22 July 2005), the outstanding cash component of the classifications works to Balance Date were reduced to $142,189 and 20,965,814 new shares were issued to DBS (at an issue price of 2 cents per share).

The Company incurred total Portal Technology classification and development works expenses of $1,747,639 (2004: $1,027,147) during the financial year, including the above classification costs. However, $1,348,052 of write-downs on the Portal Technology asset in previous periods were written-back against such expenses such that the net expenses were only $399,587 for the financial year (2004: $1,125,512).

The Company notes that the value of its investment in the Portal Technology assets at Balance Date comprising Prepaid Classification Works and Classification Works has been written down (expensed) to a carrying value of nil at Balance Date (2004: $56,214).

COMMENTARY ON RESULTS AND OTHER SIGNIFICANT INFORMATION

Please refer to the attached Directors' Report and Financial Report for further information on a review of the Consolidated Entity's operations and the financial position and performance of the Consolidated Entity and Company for the year ended 30 June 2005.

APPENDIX 4E PRELIMINARY FINAL REPORT

STATUS OF AUDIT

This Preliminary Final Report is based on:

$$ \overline{\mathbf{x}} $$

Accounts that have been audited.

For and on behalf of the Directors,

Date: 12 September 2005

Victor Ho Company Secretary

Telephone: Email:

+61 8 9214 9700 [email protected]

The Directors present their report on Fast Scout Limited (Company or Fast Scout or FSL) and its controlled entities (the Consolidated Entity) for the financial year ended 30 June 2005 (Balance Date).

Fast Scout is a company limited by shares that is incorporated and domiciled in Western Australia and has been listed on the Australian Stock Exchange (ASX) since 7 March 2000.

Fast Scout has prepared a consolidated financial report incorporating the entities that it controlled during the financial year. The only controlled entity is Virtual Web Pty Ltd ABN 12 102 978 370 (controlled throughout the financial year).

Fast Scout has also accounted for its 32.25% interest in ASX listed Altera Capital Limited ABN 55 082 541 437 (formerly Bigshop.com.au Ltd) (Altera Capital or AEA) as at Balance Date as an investment in an Associate entity (on an equity accounting basis) pursuant to Accounting Standard AASB 1016 "Accounting for Investment in Associates"

On 22 July 2005, the Company received its entitlements under an AEA equal return of capital (which was approved by AEA shareholders on 30 June 2005), being:

475,511 shares in ASX listed investment entity Central Exchange Limited (CXL); and $(i)$
11,694,539 shares in ASX listed Sofcom Limited (SOF). The Company has become the largest $(ii)$ shareholder in SOF with 12,420,439 shares (27.8%).

Fast Scout will also be accounting for its 27.8% interest in SOF as an investment in an Associate entity (on an equity accounting basis).

PRINCIPAL ACTIVITIES

The principal activities of the Consolidated Entity during the financial year were the sale and marketing and ongoing development of its Virtual Web Internet filtering and monitoring software solution, the pursuit of other Internet technologies and the management of its net assets/investments.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

There was no significant change in the state of affairs of the Consolidated Entity during the financial year, save for a proposed termination and settlement of a portal classification agreement with controlling (62%) shareholder. Data Base Systems Limited (DBS), which was approved by shareholders at a general meeting on 22 July 2005 (as described in Section 1 of Review of Operations) and otherwise as outlined in the Review of Operations.

OPERATING RESULTS

Consolidated	2005	2004
Total revenues from ordinary activities	494.274	194,864
Total expenses from ordinary activities	2.193,221	1,787,239
Loss from ordinary activities before tax	(1,698,947)	(1,592,375)
Income tax on ordinary activities
Loss from ordinary activities after income tax	(1,698,947)	(1,592,375)

Revenues from ordinary activities include:

$(1)$ $27.411 sales revenue (2004: $38.349):

$(2)$ $441,979 gross proceeds from the sale of share investments (2004: $81,000);

$17,627 dividend income (2004: $8,145). $(3)$

Expenses from ordinary activities include:

$473,486 costs of disposal of share investments (2004: $60,000); $(1)$
$(2)$ $54.873 provision for diminution of investments (2004; $39.186);
$(3)$ $345,882 professional fees (2004: nil) and $30,068 costs related to investments (2004: nil) - this comprises principally the Company's share of legal fees relating to litigation involving Scarborough Equities Limited (formerly Rivkin Financial Services Limited) as described in Section 4.3 of Review of Operations.

The Consolidated Entity expensed $348,301 losses attributable to its Associate, Altera Capital (2004: $391,756 loss).

The Consolidated Entity derived a $31,507 net loss on the disposal of share investments (2004: $21,000 net gain).

During the financial year, the Company received a total of 439.135 (2004; 255.697) classified business-related website URL's from Data Base Systems Limited (DBS) (pursuant to a portal classification agreement) at a cost of $1,715,260 (2004: $971,911), comprising:

$(i)$ $1,404,266 (2004: $817,667) drawn-down from prepayments of $10,060,340; and
a cash component of $310,994 (2004: $154,243). $(ii)$

$206,311 of the above cash component remained outstanding at Balance Date.

LOSS PER SHARE

Consolidated	2005	2004
Basic loss per share (cents)	(2.082)	(1.952)
Weighted average number of ordinary sharesoutstanding during the year used in thecalculation of basic loss per share	81.593.281	81,593,281

FINANCIAL POSITION

Consolidated	2005$	2004$
Investments in Associates	147,425	640,092
Other investments	376,750	573,827
Cash	54,197	686,850
Receivables	169,959	52,089
Internet technologies and other intangibles		58,284
Other assets	47,309	61,886
Gross assets	795,640	2,073,028
Liabilities	(566, 601)	(145, 042)
Net assets	229,039	1,927,986

Contributed equity	16,414,372	16,414,372
Accumulated losses	(16, 185, 333)	(14, 486, 386)
Total equity	229,039	1,927,986

NET TANGIBLE ASSET BACKING

Consolidated	2005$	2004$
Net assets	229,039	1,927.986
Less intangible assets:
Portal Technologies
Prepaid classification works	$\overline{r}$
Portal development works		(56, 214)
Other		(2,070)
Net tangible assets	229,039	1,869,702
Fully paid ordinary shares on issue at Balance Date	81.593,281	81,593.281
Net tangible asset backing per fully paid ordinary shareas at Balance Date (cents)	0.2807	2.2915

The Company is the largest shareholder in AEA and SOF both of which are ASX listed companies, currently suspended awaiting a potential recapitalisation and re-admission to ASX. FSL is in discussions with a number of parties regarding a sale of its interest in these companies. FSL accounts for its shareholding in these companies without reflecting any potential "control premium" upon a possible sale of such shareholdings.

DIVIDENDS

No dividends have been paid or declared during the financial year. The Company is not in a position to declare a dividend in respect of the financial year.

SECURITIES IN THE COMPANY

At Balance Date, there were 81,593,281 fully paid ordinary shares (and no other securities) on issue.

There were no securities issued or granted by the Company during the financial year.

On 19 August 2005, the Company issued 20,965,814 new shares to Data Base Systems Limited (DBS) pursuant to shareholder approval (on 22 July 2005) of the proposed termination and settlement of a portal classification agreement between the Company and DBS (as described in Section 1 of Review of Operations).

At the date of this report, there were 102,559,095 fully paid ordinary shares on issue.

REVIEW OF OPERATIONS

$\mathbf{1}$ . Termination and Settlement of Portal Classification Agreement (PCA)

On 19 August 2005, the Company issued 20,965.814 new shares to DBS and reduced a cash liability owed to DBS from $189,586 to $142,189, pursuant to shareholder approval on 22 July 2005 of a proposed termination and settlement of the PCA.

$1.1.$ Summary of Final Settlement Terms

	Website URL's delivered by DBS to 22 July 2005 (date of general meeting)2,083,372
	Cash fees outstanding for works performed from November 2004 to 22 July 2005	$189,586
	Balance of website URL's to be classified under the PCACash cost component of balance of websites to be to be classified under the PCA	1,062,628$743,840
$933,426Total existing and future cash liability payable to DBS by FSL
	Settlement components:
(1)	Cash - 75% of cash fees outstanding	$142.189
(2)	New FSL shares (at 2 cents each) - 25% of cash fees outstanding	2.369.824
(3)	18,595.990New FSL shares (at 2 cents each) - 50% of Balance of URL's under PCA
	Total new FSL shares issued to DBS on 19 August 2005	20 965.814

The Company cash settlement sum of $142,189 remains outstanding at the date of this report (accruing interest at 7% per annum).

Prior to the issue of such settlement shares, DBS was the holder of 50,226,700 shares (61.56% of FSL's then total issued share capital of 81,593,281 shares). After the issue of the settlement shares, DBS's 71,192,514 shareholding comprise 69.42% of FSL's expanded total issued share capital of 102,559,095 shares.

$1.2.$ Approval at General Meeting

The Company held a general meeting on 22 July 2005 (General Meeting) seeking shareholder approval for the Company to:

settle amounts: $(i)$
- $(a)$ which were currently outstanding; and
- $(b)$ which were due and payable as at the date of the General Meeting.

to Data Base Systems Limited (DBS) under the Portal Classification Agreement (PCA) by payment in cash (in respect of 75%) and by the issue of new shares at an issue price of 2 cents each (in respect of 25%); and

$(ii)$ terminate the PCA with DBS on terms that the Company issue to DBS new shares at an issue price of 2 cents each in respect of 50% of the outstanding cash amount which would otherwise become payable to DBS during the balance of the term of the PCA for classification of websites pursuant to the PCA, and otherwise on terms that neither the Company nor DBS shall have any other claims against the other.

DBS (and its associates) were not permitted to vote on the resolution at the General Meeting.

$1.3.$ Reasons for Proposed Settlement and Termination

As reported in FSL's December 2004 half year and 2004 annual reports, the Company was mindful of the costs of commercial advancement of its Virtual Web Internet filtering and monitoring solution relative to the amount of its cash reserves/liquid assets and the ability of the Company to raise further monies to advance its commercial objectives.

The Company believed that given the significant size of its existing database of classified business-related websites already provided under the PCA, and given the development of the three different access modes of Virtual Web for ISA Server 2000/2004 (which allow for user customisation of access to Internet websites) that it was appropriate to review the commercial benefits to be received by the further classification of websites from DBS.

The cash amount which would become due and payable to DBS if the balance of the classification works were completed by DBS pursuant to the PCA was in excess of the Company's cash reserves/liquid assets. The termination of the PCA and settlement of all claims between the parties on terms predominantly requiring the issue of new FSL shares to DBS allowed the Company to preserve its cash reserves/liquid asset position without materially detracting from the on-going commercialisation of Virtual Web.

Negotiations for the settlement of the PCA on the terms put to shareholders at the 22 July 2005 general meeting were made by the independent Directors of the Company and were arrived at on an arms length commercial basis that the Directors believed was in the best interests of the Company and shareholders. In this regard, shareholders are advised that (amongst other matters referred to in the general meeting documentation including the accompanying independent expert's report of BDO Consultants (WA) Pty Ltd, which stated that the proposed settlement was fair and reasonable to the unassociated shareholders of FSL), the settlement of the outstanding obligations under the PCA have been reached principally through the issue of shares in the Company at a price (2) cents per share) significantly in excess of the market price and the NTA backing of the Company.

$2.$ Virtual Web Internet Filtering and Monitoring Solution

Fast Scout's Virtual Web for Microsoft ISA Server 2004 and 2000 is designed as a plug-in application that enhances and adds to the security features of ISA Server 2004/2000 to allow organisations to more effectively control and monitor their Internet access. Microsoft ISA Server 2004/2000 is an enterprise firewall and Web cache designed to help provide secure, fast, and manageable Internet connectivity and is widely used by organisations around the world. The Company has received Microsoft Certified Partner (MCP) Status for the Virtual Web for Microsoft ISA Server solution.

Fast Scout has also teamed up with another Australian public listed company, WebSpy Limited, to add comprehensive monitoring and reporting functionality to the Virtual Web.

Virtual Web for ISA Server 2004/2000 comes pre-configured with three different access modes:

Lockdown mode, which is the most secure in that it allows access only to web sites that have been preapproved;
Preview mode, which warns users each time they are about to access a website that has not yet been pre-approved: and
Protected mode, which allows users greater freedom, blocking access only to known objectionable or inappropriate websites.

Prospective customers from anywhere in the world can download a free, fully functioning evaluation copy of Fast Scout's Virtual Web software from the Virtual Web website (www.virtualweb.com.au) and install it within minutes.

Fast Scout have also introduced Virtual Web to key world markets through its relationship with WebSpy, who have dedicated distribution and sales channels in the United States and the United Kingdom. In July 2004, the Company formally appointed WebSpy as a worldwide reseller for Virtual Web.

Notwithstanding the settlement of the PCA, the Company remains cautious about preserving its cash reserves and will continue to monitor Virtual Web's development, sales and marketing activity to ensure an appropriate balance between revenues and expenditure.

CORPORATE $\overline{3}$ .

3.1. Altera Capital Limited (AEA) Shareholding

The Company currently holds 20,002,860 shares (32.253%) in Altera Capital Limited (AEA) being the largest shareholding in the company, acquired at a total cost of $1,289,816.

On 22 July 2005, the Company received its entitlements under an AEA equal return of capital, being:

475,511 shares in ASX listed investment entity Central Exchange Limited (CXL); and $(a)$
11,694,539 shares in ASX listed Sofcom Limited (SOF). $(b)$

AEA currently has minimal net assets and has been suspended from ASX since 13 June 2003 and has advised that its suspension will continue until the company is recapitalised and re-complies with admission requirements under the ASX Listing Rules.

FSL is in discussions with a number of parties regarding a sale of its interest in AEA. FSL accounts for its shareholding in such company without reflecting any potential "control premium" upon a possible sale of such shareholding.

Sofcom Limited (SOF) Shareholding $3.2.$

At Balance Date, the Company held 725,900 (1.63%) in SOF, being the second largest holding in the company, behind AEA (81%), acquired at a cost of $43,944.

On 18 July 2005, the Company received its entitlements under a SOF equal return of capital, being:

$7,318 cash; and $(a)$
29,515 shares in CXL. $(b)$

After the AEA and SOF returns of capital, the Company has become the largest shareholder in SOF with 12,420,439 shares (27.8%).

SOF currently has minimal net assets and has been suspended from ASX since 29 June 2005 and has advised that its suspension will continue until the company is recapitalised and re-complies with admission requirements under the ASX Listing Rules.

FSL is in discussions with a number of parties regarding a sale of its interest in SOF. FSL accounts for its shareholding in such company without reflecting any potential "control premium" upon a possible sale of such shareholding.

3.3. Scarborough Equities Limited (SCB) Litigation

In June 2004. Fast Scout undertook an investment in SCB (formerly Rivkin Financial Services Limited (RFS)) - 908,471 shares (0.91% of SCB's then issued capital) acquired at a total cost of $ 219,284.

On 14 July 2004, SCB, under the direction of former SCB Managing Director, Alan Andrew Davis, commenced proceedings in the Federal Court of Australia in Sydney against FSL, Sofcom Limited (SOF) and Altera Capital Limited (AEA) for conduct allegedly contrary to the insider trading provisions of the Corporations Act (in relation to the three companies' collective acquisition of an initial aggregate 5% interest in SCB Shares).

As part of the defence of the action, SOF, FSL and AEA commenced cross-claims against SCB and Network Limited (Network), Cole Kablow Superannuation Pty Ltd (Cole Kablow), Alan Davis Group Pty Ltd (ADG) and former SCB Managing Director, Alan Andrew Davis.

Justice Emmett handed down his judgment on 26 November 2004. Justice Emmett dismissed the claim made by SCB against SOF, FSL and AEA and SOF, FSL and AEA's cross-claims against SCB and the other cross-defendants.

On 29 November 2004, the board of SCB was replaced with nominees of SOF, FSL and AEA - Messrs Farooq Khan, Simon Cato and Christopher Ryan.

On 10 December 2004, Justice Emmett made the following orders as to costs:

In relation to the claim brought by SCB against SOF, FSL and AEA, the Court awarded costs to the $(a)$ defendants on a "party-party" basis;
In relation to the cross claims brought by SOF, FSL and AEA, the Court ordered SOF, FSL and $(b)$ AEA to pay all of SCB' and the other cross defendants' costs on an "indemnity basis" provided such costs have been reasonably incurred.

On 17 December 2004, SOF, FSL and AEA lodged an appeal against that part of the decision of Justice Emmett dismissing their cross-claim against each of SCB and the other cross defendants. The appeal covers a number of the findings made by Justice Emmett in his reasons for decision including his decision on costs.

On 4 February 2005, SOF, FSL and AEA entered into a deed of settlement with each of Network and Cole Kablow to discontinue the appeals against, and to settle the costs payable to, each such party in consideration of the payment by SOF, FSL and AEA of $350,000 to Network and $125,000 to Cole Kablow. Such costs were paid by SOF initially. FSL's share of such costs ($85,500) accrued interest at 7% per annum.

In April 2005, SCB and SOF, FSL and AEA reached agreement to resolve the outstanding matters between them by SOF, AEA and FSL discontinuing the appeal with no order as to the costs and by SOF, AEA and FSL paying an amount of $382,500 to SCB (net of SCB' payment obligations to these parties). SOF, AEA and FSL had until 30 June 2005 to pay the costs settlement with interest accruing at 10% p.a. If the settlement sum was not paid by 30 June 2005, SOF, AEA and FSL had agreed to pay an additional amount of $100,000 to SCB and interest would have accrued at 15% p.a.

On 18 May 2005, SOF, FSL and AEA agreed to pay $310,000 to ADG to settle the costs in the discontinued appeal and under the cost orders of Justice Emmett described above. SOF, AEA and FSL had until 31 August 2005 to pay the costs settlement with interest accruing at 10% p.a.

On 30 June 2005, SOF paid:

$(1)$ $389,985 (being the settlement sum of $382,500 plus accrued interest) to SCB; and
$(2)$ $313,482 (being the settlement sum of $310,000 plus accrued interest) to ADG.

Such payment concludes all outstanding matters between the parties to the litigation.

The above settlement costs (and all other legal and related costs incurred in relation to SCB) are shared between SOF/FSL/AEA in proportion to each company's relative interest in their collective stake in SCB (prior to the sale of shares to CXL as described above) - SOF's share is 67%; FSL's share is 18% and AEA's share is 15%.

Sofcom, as the major shareholder in SCB (of the three companies), have had primary conduct of the litigation and the payment of the costs of the litigation proceedings and legal cost settlement amounts arising therein. On 15 July 2005, FSL paid $120,000 (with approximately $125,000 remaining outstanding accruing interest at 7% p.a.) towards FSL's share of the balance of costs incurred in relation to SCB. including the 30 June 2005 costs settlement payments.

On 15 July 2005, the Company disposed of the balance of its 846,101 shares in SCB in consideration for $126,915.

FUTURE DEVELOPMENTS

Disclosure of information regarding likely developments in the operations of the Consolidated Entity in future financial years and the expected results of those operations is likely to result in unreasonable prejudice to the Consolidated Entity. Accordingly, this information has not been disclosed in this report.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Consolidated Entity is not subject to any particular or significant environmental regulation under either Commonwealth or State legislation. To the extent that any environmental regulations may have an incidental impact on the Consolidated Entity's operations, the Directors are not aware of any breach by the Consolidated Entity of those regulations.

DIRECTORS AND COMPANY SECRETARY

Information concerning Directors in office during or since the financial year are:

Farooq Khan	- Executive Chairman and Managing Director
	Appointed - 9 September 1999
	$Qualifications$ $\rightarrow$ BJuris, LLB. (Western Australia)
	Experience — Mr Khan is a qualified lawyer having previously practised principally in the field of corporate law. MrKhan has extensive experience in the securities industry, capital markets and particularly capitalraisings, mergers and acquisitions and investments. Mr Khan has also led the executivemanagement of a number of ASX listed companies through their establishment and growth
Relevant interest in $-20$ sharesshares
Responsibilities	Special $-$ Chairman of the Board and Managing Director
directorships in listedentities	Other current - Current Chairman and Managing Director of:Queste Communications Limited (since 10 March 1998);(1)(2)Altera Capital Limited (since 26 November 2001);(3)Sofcom Limited (since 3 July 2002).
	Current Chairman of:(4)Bentley International Limited (director since 2 December 2003).(5)Scarborough Equities Limited (since 29 November 2004)
Former directorships $-$in other listed entitiesin past 3 years	Formerly Chairman and Managing Director of Central Exchange Limited (4 October 1999 to 4 July2003).

Victor P. H. Ho	- Executive Director and Company Secretary
	Appointed - Secretary since 9 March 2000 and Director since 12 October 2000
	Qualifications - BCom, LLB (Western Australia)
	$Experience$ — Mr Ho has been in company secretarial/executive roles with a number of public listed companiessince early 2000. Previously, Mr Ho had 9 years experience in the taxation profession with theAustralian Tax Office and in a specialist tax law firm. Mr Ho has been actively involved in thestructuring and execution of a number of corporate transactions, capital raisings and capitalmanagement matters and has extensive experience in public company administration,corporations law and stock exchange compliance and shareholder relations.
Relevant interest in $-50,000$ sharesshares
Special - NoneResponsibilities
listed entities	Other positions held in $-$ Current Executive Director and Company Secretary of:Altera Capital Limited (26 November 2001);(1)(2)Central Exchange Limited (Secretary since 2 August 2000 and Director since 4 July 2003):(3)Sofcom Limited (Director since 3 July 2002 and Secretary since 23 July 2003).
	Current Company Secretary of:(4)Queste Communications Limited (since 30 August 2000);(5)Bentley International Limited (since 5 February 2004);Scarborough Equities Limited (since 29 November 2004).(6)
Former directorships - Nonein other listed entitiesin past 3 years

$\overline{a}$

DIRECTORS' REPORT

Azhar Chaudhri	- Executive Director
	Appointed - 9 September 1999
	Qualifications — Bachelor of Science degree in Maths and Physics and a Masters degree in Economics andpostgraduate computer studies
	Experience — Mr Chaudhri has considerable expertise in computer systems, analysis and design and advancedprogramming experience, particularly with respect to business and information technology systemsand Data Base computing. In particular Mr Chaudhri has formed and led software developmentteams creating integrated database and management information systems for utilities, localgovernment land tax departments, hospitals, libraries and oil terminals.
Relevant interest in $-2.507.521$ sharesshares
$Special - None$Responsibilities
directorships in listedentities	Other current - Current Director of:Queste Communications Limited (since 4 August 1998)(1)
Former directorships - Nonein other listed entitiesin past 3 years

Yaqoob Khan	- Executive Director
Appointed	9 September 1999
	Qualifications — BCom (Western Australia), Master of Science in Industrial Administration (Camegie Mellon)
	Experience — After working for several years in the Australian Taxation Office, Mr Khan completed hispostgraduate Masters degree and commenced work as a senior executive responsible for productmarketing, costing systems and production management. Mr Khan has been founding ExecutiveDirector of 2 ASX floats - Queste Communications Limited in 1998 and Fast Scout Limited in2000. He was an integral member of the team responsible for the pre-IPO structuring and IPOpromotion and has been actively involved in the executive management of such companies sincetheir floats. Mr Khan brings considerable international experience in key aspects of corporatefinance and the strategic analysis of listed investments
Relevant interest in $-20$ sharesshares
SpecialResponsibilities	None
directorships in listedentities	Other current - Current Director of:(2)Queste Communications Limited (since 10 March 1998);(3)Central Exchange Limited (since 5 November 1999).
Former directorships - Nonein other listed entitiesin past 3 years

At the Balance Date, Messrs Azhar Chaudhri and Yaqoob Khan were resident overseas.

DIRECTORS' MEETINGS

The following table sets out the numbers of meetings of the Company's Directors held during the financial year (including Directors' circulatory resolutions), and the numbers of meetings attended by each Director of the Company:

Name of Director	Meetings Attended	Maximum Possible Meetings
Faroog Khan	14	14
Victor Ho	14	14
Azhar Chaudhri	12	14
Yaqoob Khan	13	14

There were no meetings of committees of the Board.

Board Committees

During the financial year and as at the date of this Directors' Report, the Company did not have separate designated Audit or Remuneration Committees. In the opinion of the Directors, in view of the size of the Board and nature and scale of the Consolidated Entity's activities, matters typically dealt with by an Audit or Remuneration Committee are dealt with by the full Board.

REMUNERATION REPORT

This report details the nature and amount of remuneration for each Director of the Company and Executive Officer of the Consolidated Entity.

$(1)$ Remuneration Policy

The Board determines the remuneration structure of all Directors and Executive Officers having regard to the Consolidated Entity's nature, scale and scope of operations and other relevant factors, including the frequency of Board meetings, length of service, particular experience and qualifications.

The Executive and Non-Executive Directors (if any) of the Company are paid a fixed amount per annum plus employer superannuation contributions (for Australian resident directors only).

Pursuant to the Company's Constitution, each Director is also entitled to receive:

Payment for the performance of extra services or the undertaking of any executive or other work for $(1)$ the Company beyond his or her general duties.
$(2)$ Payment for travelling and other expenses properly incurred by a Director in attending meetings of the Company or the Board or in connection with the Company's business.

The Company does not presently have any equity (shares or options) based remuneration arrangements pursuant to any executive or employee share or option plan or otherwise.

The Company does not presently provide retirement benefits or incentive/performance based benefits to Directors or the sole Executive Officer.

The Company does not presently have formal service agreements or employment contracts with the Directors or the current sole Executive Officer.

The Company has not had during the financial year and does not currently have a directors' and officers' liability insurance policy which covers all Directors and officers of the Company and its wholly-owned subsidiaries.

$(2)$ Details of Remuneration of Directors

Details of the nature and amount of each element of remuneration of each Director of the Company paid or payable by the Consolidated Entity during the financial year are as follows:

Name ofDirector	Office Held	SalaryЪ	FeesS	Superannuation£	OtherBenefitss	Total$
Faroog Khan	Chairman andManaging Director	100.000	۰	9.000	$\overline{\phantom{a}}$	109,000
Victor Ho	Executive Director andCompany Secretary	30,000	$\bullet$	2,700	$\overline{\phantom{a}}$	32,700
AzharChaudhri	Executive Director	$\mathbf{r}$	50.000	$\blacksquare$		50,000
Yaqoob Khan	Executive Director	$\mathbf{r}$	14.602	$\blacksquare$	$\overline{\phantom{a}}$	14,602

Note: All Directors and the Company Secretary have agreed to suspend receipt of their remuneration payable to them from July 2005.

$(3)$ No Executive Officers

The Company did not have any Executive Officers (other than Executive Directors) during the financial year.

$(4)$ Directors' Deeds

In addition to the rights of indemnity provided under the Company's Constitution (to the extent permitted by the Corporations Act), the Company has also entered into a deed with each of the Directors to regulate certain matters between the Company and each Director, both during the time the Directors holds office and after the Director ceases to be an officer of the Company (or wholly owned subsidiaries), including the following matters:

The Company's retention of and the Director's access to Board papers and company books $(i)$ (subject to confidentiality and privilege) both while the Director is a director of the Company and after the Director ceases to hold office, for the purposes expressly permitted by the deed.
$(ii)$ The Company's obligation to use its best efforts to ensure that so far as practical (having regard to the cost of coverage and its availability), that there is an appropriate directors' and officers' insurance cover (as permitted by the Corporations Act) for the period that each Director is a director of the Company and for 7 years after that Director ceases to hold office;
$(iii)$ The Company's obligation to indemnify a Director for liabilities or legal costs incurred as an officer of the Company (to the extent permitted by the Corporations Act);
$(iv)$ Subject to the terms of the deed and the Corporations Act, the Company may, at the request of the Director and on such terms as it thinks fit, advance monies to the Director to meet any costs or expenses of the Director incurred in circumstances relating to the indemnities provided under the deed and prior to the outcome of a legal proceeding. The Company cannot make such an advance to a Director in respect of legal costs incurred in a legal proceeding initiated by the Company against the Director. Advances must be repaid by the Director once the outcome of the legal proceeding is known, but may be set-off by indemnities from the Company (where permitted by the deed and the Corporations Act); and

The Company's and Director's rights and obligations in respect of confidential information, legal $(v)$ proceedings against the Director, disclosure of Director's benefits and notifiable interests, costs of independent advice and related party benefits.

$(5)$ Other Directors' Benefits

No Director of the Company has, since the end of the previous financial year, received or become entitled to receive a benefit, other than a remuneration benefit as disclosed above, by reason of a contract made by the Company or a related entity with the Director or with a firm of which he is a member, or with a Company in which he has a substantial interest.

AUDITOR

Details of the amounts paid or payable to the auditor for audit and non-audit services provided during the financial year are set our below:

Consolidated
Audit & Review Fees	Fees for Other Services	Total

11.715	2.000	11.715

The Board is satisfied that the provision of non audit services by the auditor during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Board is satisfied that the nature of the non-audit services disclosed above did not compromise the general principles relating to auditor independence as set out in the Institute if Chartered Accountants in Australia and CPA Australia's Professional Statement F1: Professional Independence, including reviewing or auditing the auditor's own work, acting in a management or decision making capacity for the Company, acting as advocate for the Company or jointly sharing economic risk and rewards.

A copy of the Auditor's Independence Declaration as required under section 307C of the Corporations Act 2001 forms part of this Directors Report and is set out on page 18. This relates to the Audit Report, where the Auditors state that they have issued an independence declaration.

EVENTS SUBSEQUENT TO BALANCE DATE

The Directors are not aware of any matters or circumstances at the date of this Directors' Report, other than those referred to in this Directors' Report (in particular, in Review of Operations) or the financial statements or notes thereto (in particular Subsequent Events Note 25), that have significantly affected or may significantly affect the operations, the results of operations or the state of affairs of the Company in subsequent financial years.

ROUNDING OF AMOUNTS

The Company is of a kind referred to in Class Order 98/0100 issued by the Australian Securities & Investments Commission, relating to the "rounding off" of amounts in the directors' report and financial statements to the nearest dollar. Amounts have been rounded off in this directors' report and financial statements in accordance with this class order.

STANTON PARTNERS

1 HAVELOCK STREET WEST PERTH 6005 WESTERN AUSTRALIA

TELEPHONE: (08) 9481 3188

Facsimile: (08) 9321 1204

e-mail: [email protected]

12 September 2005

Board of Directors Fast Scout Limited Level 14 Forrest Centre 221 St Georges Terrace PERTH WA 6000

Dear Directors

RE: FAST SCOUT LIMITED

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Fast Scout Limited.

As Audit Partner for the audit of the financial statements of Fast Scout Limited for the ended 30 June 2005, I declare that to the best of my knowledge and belief, there have been no contraventions of:

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

Yours sincerely STANTON PARTNERS

Stanton SartienWender

John Van Dieren Partner

Signed for and on behalf of the Directors in accordance with a resolution of the Board.

Farooq KhanChairman and Managing Director

Perth, Western Australia

12 September 2005

Victor Ho Executive Director and Company Secretary

STATEMENTS OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2005

		Consolidated Entity		Company
		2005	2004	2005	2004
	Note	$	$	$	$
Sales revenue	$\overline{2}$	27,411	38,349	1,344
Cost of sales		(139, 948)	(82, 891)	(99, 882)	(55, 870)
Gross Profit		(112, 537)	(44, 542)	(98, 538)	(55, 870)

Other revenue from operating activities	2	7,257	67,370	7,257	67,345
Non-operating revenue	$\overline{2}$	459,606	89,145	459,606	89,145

Classification works costs	2	(1,747,639)		$(1,027,147)$ $(1,747,639)$ $(1,027,147)$
Occupancy costs	$\overline{2}$	(28, 176)	(26, 428)	(28, 177)	(26, 428)
Finance costs	2	(1, 546)	(2,609)	(1,488)	(2, 374)
Borrowing costs	2	(2,179)	(33)	(2, 179)	(26)
Corporate costs
- Provision for diminution in share investments	2	(54, 873)	(39, 186)	(400, 523)	(39, 186)
- Cost of shares sold		(473, 486)	(60,000)	(473, 486)	(60,000)
- Internet Technology (amortisation) / write back	2	1,348,052	(98, 365)	1,348,052	(98, 365)
- Professional Fees	2	(345, 882)	$\sim$	(345,882)
- Personnel costs	2	(220, 450)	(295, 688)	(220, 450)	(295, 688)
- others	2	(115, 715)	(125, 203)	(115, 254)	(113, 339)
	2	(63,078)	(82, 836)	(63,078)	(82, 631)
Administration costs	2
Equity share of Associate net losses		(348, 301)	(391,756)
Write back of provision for diminution in value
of investment in Associate	2		444,903
Loss from ordinary activities before income taxexpense			$(1,698,947)$ $(1,592,375)$ $(1,681,779)$ $(1,644,564)$

Income tax expense relating to ordinary activities
Loss from ordinary activities after income taxexpense			$(1,698,947)$ $(1,592,375)$ $(1,681,779)$ $(1,644,564)$
Total revenues, expenses and valuation adjustmentsattributable to members of the parent entityrecognised directly in equity

Total changes in equity other than thoseresulting from transactions with owners asowners	17	(1,698,947)		$(1,592,375)$ $(1,681,779)$	(1,644,564)

Loss per share
Basic loss (cents per share)	18	(2.08)	(1.95)	(2.06)	(2.02)
Weighted average number of ordinary sharesoutstanding during the year used in calculation ofbasic earnings per share		81,593,281	81,593,281	81,593,281	81,593,281

$\bar{\beta}$

The statements of financial performance should be read in conjunction with the accompanying notes.

STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2005

		Consolidated Entity			Company
		2005	2004	2005	2004
	Note	$	$	$	$
CURRENT ASSETS
Cash assets	22(b)	54,197	686,850	50,956	682,888
Receivables	7	169,459	32,823	166,623	17,935
TOTAL CURRENT ASSETS		223.656	719,673	217,579	700,823
NON CURRENT ASSETS
Receivables	8	500	19,266	500	19,266
Property, plant and equipment	9	47,309	61,886	47,309	61,886
Other financial assets	10	376,750	573,827	526,927	1,214,019
Investments accounted for using equity method	11	147,425	640,092
Internet technologies
Prepaid classification works	12
Other development works	12		56,214		56,214
Intangibles	13		2,070
TOTAL NON CURRENT ASSETS		571,984	1,353,355	574,736	1,351,385
TOTAL ASSETS		795,640	2,073,028	792,315	2,052,208
CURRENT LIABILITIES
Payables	14	544,869	129,733	544,869	129,406
Provisions	15	21,732	15,309	21,732	15,309
TOTAL CURRENT LIABILITIES		566,601	145,042	566,601	144,715
TOTAL LIABILITIES		566,601	145,042	566,601	144,715
NET ASSETS		229,039	1,927,986	225,714	1,907,493
EQUITY
Contributed equity	16	16,414,372	16,414,372	16,414,372	16,414,372
Accumulated losses	17		$(16, 185, 333)$ $(14, 486, 386)$ $(16, 188, 658)$		(14, 506, 879)
TOTAL EQUITY		229,039	1,927,986	225,714	1,907,493

$\bar{\beta}$

The statements of financial position should be read in conjunction with the accompanying notes.

STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2005

		Consolidated Entity		Company
		2005	2004	2005	2004
	Note	$	$	$	$
CASH FLOWS FROM OPERATING ACTIVITIES	22.
Receipts from customers		39,879	40,387	1,344
Payments to suppliers and employees		(695, 280)	(793, 403)	(656, 024)	(753, 617)
Dividends received		25,772	25	25,772
Interest received		7.257	86,711	7,257	86,711
Interest paid		(205)	(33)	(205)	(26)
NET CASH OUTFLOW FROM OPERATING
ACTIVITIES		(622, 577)	(666, 313)	(621, 856)	(666, 932)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for plant and equipment		(1,370)	(7,784)	(1, 370)	(7,784)
Payments for Internet Technologies		(104, 684)	(98, 365)	(104, 684)	(98, 365)
Payments for investments in listed securities		(346,001)	(317, 480)	(346,001)	(317, 480)
Proceeds from sale of investments		441,979	81,000	441,979	81,000
NET CASH OUTFLOW FROM INVESTING
ACTIVITIES		(10,076)	(342, 629)	(10, 076)	(342, 629)
CASH FLOWS FROM FINANCING ACTIVITIES
Payment for share buy back			(170)		(170)
NET CASH OUTFLOW FROM FINANCINGACTIVITIES			(170)		(170)

NET DECREASE IN CASH ASSETS HELD		(632, 653)	(1,009,112)	(631, 932)	(1,009,731)
Add opening cash assets brought forward		686,850	1,695,962	682,888	1,692,619
CLOSING CASH ASSETS AT END OF YEAR	22	54,197	686,850	50,956	682,888

$\bar{z}$

The statements of cash flows should be read in conjunction with the accompanying notes.

NOTE TO THE FINANCIAL STATEMENTS for the vear ended 30 June 2005

SUMMARY OF ACCOUNTING POLICIES $\blacksquare$

Financial Reporting Framework

The Financial Report is a general purpose Financial Report, which has been prepared and is based on historical costs in accordance with the Corporations Act 2001, applicable Accounting Standards and Urgent Issues Group Consensus Views, and complies with other requirements of the law.

The Financial Report has been prepared on an accrual basis and on the basis of historical costs, and except where stated does not take into account changing money values or current valuations of non-current assets. Cost is based on the fair values of the consideration given in exchange for assets.

The financial report has been prepared on the going concern basis, which contemplates continuity of normal business activities and realisation of assets and settlement of liabilities in the ordinary course of business. The going concern of the consolidated entity is dependant upon the consolidated entity obtaining additional funds through successful capital raising

The directors continue to monitor the ongoing funding requirements of the consolidated entity and are at present considering various funding alternatives.

The directors are confident that sufficient funding will be secured to enable the consolidated entity to continue as a going concern and as such are of the opinion that the financial report has been appropriately prepared on a going concern basis.

Significant Accounting Policies

Accounting policies are selected and applied in a manner that ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

The following significant accounting policies have been adopted in the preparation and presentation of the Financial Report. The accounting policies have been consistently applied unless otherwise stated.

Principles of Consolidation $111$

The consolidated Financial Statements are prepared by combining the Financial Statements of all the entities that comprise the Consolidated Entity, being the Company (the Company) and its controlled entities. Control exists where the Company has the capacity to dominate the decision making in relation to the financial and operating policies of another entity so that the other entity operates with the Company to achieve the objectives of the Company. A list of controlled entities is contained in Note 10 to the Financial Statements

All inter-company balances and transactions between entities in the Consolidated Entity, including any unrealised profits or losses, have been eliminated on consolidation. Outside interest in the equity and results of the entity that are controlled are shown as a separate item in the consolidated financial report.

$1.2$ Revenue Recognition

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

Sale of Licence and Disposal of Assets

Revenue is recognised when the Consolidated Entity has passed control of the licences, goods or other assets to the buyer. Control of goods or assets is considered to be passed to buyer upon delivery of asset to buyer or their agents.

Contributions of Assets

Revenue arising from the contribution of assets is recognised when the Consolidated Entity gains control of the contribution or the right to receive the contribution.

iii. Interest Revenue

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

Dividend Revenue

Dividend revenue is brought to account on the applicable ex-dividend entitlement date.

Other Revenue v.

Other revenue is recognised on a receipts basis.

Foreign Currency Transaction and Balances $1.3.$

All foreign currency transactions during the financial year are brought to account using the exchange rate in effect at the date of the transaction. Foreign currency monetary items at reporting date are translated at exchange rate existing at that date.

Income Tax $1.4.$

The Consolidated Entity adopts the liability method of taxeffect accounting whereby the income tax expense shown in the statement of financial performance is based on the operating profit from ordinary activities adjusted for any permanent differences.

Timing differences which arise due to the different accounting periods in which items of revenue and expense are included in the determination of operating profit before income tax and taxable income are brought to account as either a provision for deferred income tax or an asset described as future income tax benefit at the rate of income tax applicable to the period in which the benefit will be received or the liability will become payable.

Future income tax benefits are not brought to accountunless realisation of the asset is assured beyond reasonable doubt. Future income tax benefits in relation to tax losses are not brought to account unless there is virtual certainty of realisation of the benefit.

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

NOTE TO THE FINANCIAL STATEMENTS for the vear ended 30 June 2005

$15$ Goods and Services Tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:

$\mathbf{i}$ . Where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or
For receivables and payables which are recognised ii. inclusive of GST, the net amount of GSTrecoverable from, or payable to, the taxation authority is included as part of receivables or payables.

Cash flows are included in the statement of cash flows on a gross basis. The GST component of cash flows arising from investing and financing activities, which are recoverable from, or payable to, the Australian Taxation Office, are classified as operating cash flows.

16 Employee Benefits

Provision is made for benefits accruing to employees in respect of wages and salaries and annual leave ("employee benefits") when it is probable that settlement will be required and they are capable of being measured reliably. Employee benefits expected to be settled within one year, have been measured at their nominal amount. Other employee benefits expected to be payable later than one year have been measured at the present value of the estimated cash flows to be made for those benefits. Superannuation contributions are made by the Consolidated Entity in accordance with statutory obligations and are charged as expenses when incurred.

$1.7.$ Receivables

Trade receivables and other receivables are recorded at amounts due less any provision for doubtful debts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred

Investments $18$

Investments are recorded at cost. Investments in associates are accounted for under the equity method in the consolidated financial statements and the cost method in the company financial statements.

The Directors review investments bi-annually and where, in the opinion of the Directors, there has been a permanent diminution in value of an investment, the carrying amount of such an investment is written down to its net fair value. The net fair value is assessed from a listed investment's current market price or where unlisted or suspended, its net tangible asset value.

$1.9.$ Property, Plant and Equipment

Property, plant and equipment are brought to account at cost less any accumulated depreciation or amortisation. The carrying amount of property, plant and equipment is reviewed bi-annually by Directors to ensure it is not in excess of the recoverable amount from these assets.

The depreciable amount of all fixed assets is depreciated on a diminishing value basis over their expected useful lives to the Consolidated Entity commencing from the time the asset is held ready for use.

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

Class of Fixed Asset	DepreciationRate	Depreciation Method
Plant and Equipment	15-50%	DiminishingValue
Leasehold Improvements	15%	DiminishingValue

1.10. Valuation of Non Current Assets

The carrying amount of non-current assets are reviewed annually to determine whether they are in excess of the recoverable amount. Non-current assets are written down to recoverable amount where the carrying value of any noncurrent asset exceeds recoverable amount. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets' employment and subsequent disposal. The expected net cash flows have not been discounted to their present values in determining recoverable amounts.

1.11. Acquisition of Assets

Assets acquired are recorded at the cost of acquisition, being the purchase consideration determined as at the date of acquisition plus costs incidental to the acquisition.

1.12. Payables

Trade payables and other accounts payable are recognised when the Consolidated Entity becomes obliged to make future payments resulting from the purchase of goods and services.

1.13. Contributed Equity

Issued and paid up capital is recognised at the fair value of the consideration received by the Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

Earnings Per Share $1.14.$

Basic Earnings per Share i. Basic earnings per share is determined by dividing the operating result after income tax by the weighted average number of ordinary shares on issue during the financial year.

Ħ. Diluted Earnings per Share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share by taking into account amounts unpaid on ordinary shares and any reduction in earnings per share that will probably arise from the exercise of options outstanding during the financial year.

1.15. Research and Development Costs

Research and development costs are recognised as an expense when incurred, except to the extent that such costs, together with unamortised deferred costs in relation to that project, are expected, beyond any reasonable doubt, to be recoverable.

1.16 Classification Works

Classification works will be amortised over a 5 year period in which the corresponding benefits are expected to arise, commencing with the commercial application of the asset. The unamortised amount is reviewed annually to determine whether it is in excess of the recoverable amount. If the carrying value of the intellectual property exceeds its recoverable amount, the asset is written down to the lower value

NOTE TO THE FINANCIAL STATEMENTS for the vear ended 30 June 2005

$117$ The Impact of Adoption nf. Australian Equivalents to International Financial Reporting Standards

The Consolidated Entity is preparing and managing the transition to Australian Equivalents to International Financial Reporting Standards (AIFRS) effective for the financial years commencing from 1 January 2005. The adoption of AIFRS will be reflected in the Consolidated Entity's and the parent entity's financial statements for the year ending 30 June 2006. On first adoption of AIFRS, comparatives for the financial year ended 30 June 2005 are required to be restated. The majority of the AIFRS transitional adjustments will be made retrospectively against retained earnings at 1 July 2004.

The Consolidated Entity's management, with the assistance of external consultants, have assessed the significance of the expected changes and have prepared for their implementation. The impact of the alternative treatments and elections under AASB 1: First Time Adoption ofAustralian Equivalents to international Financial Reporting Standards has been considered where applicable.

The Directors are of the opinion that the key material differences in the Consolidated Entity's accounting policies on conversion to AIFRS and the financial effect of these differences where known, are as follows. Users of the financial statements should note, however that the amounts disclosed could change if there are any amendments by standard-setters to the current AIFRS or interpretation of the AIFRS requirements changes.

i. Income Tax

Currently, the Consolidated Entity adopts the "liability method" of tax-effect accounting whereby the income tax expense is based on the accounting profit adjusted for any permanent differences. Timing differences are currently brought to account as either a provision for deferred income tax or future income tax benefit.

Linder the AASB112: Income Taxes, the Consolidated Entity will be required to adopt a "balance sheet approach" under which temporary differences are identified for each asset and liability rather than the effects of timing and permanent differences between taxable income and accounting profit.

The effect of this change in the accounting policy gives rise to a potential deferred tax asset of $77,677 in addition to the deferred tax asset arising from tax losses amounting to $2,857,096 disclosed in Note 4, which would ordinarily reduce the loss from ordinary activities after tax. The Consolidated Entity has elected not to adjust the comparatives as the realisation of the benefit of the deferred tax asset realisation is not virtually certain.

Non-Current Investments

Hoder AASB 139: Financial Instruments: Recognition and Measurement. financial assets are required to be classified into four categories, which determines the accounting treatment of the item. The categories and various treatments are:

Held to maturity, measured at amortised cost:
Held for trading (or designated "as at fair valuethrough profit and loss" upon initial recognition), measured at fair value with unrealised gains or losses charged to the profit and loss:
Loans and receivables, measured at amortised cost: and
Available for sale instruments, measured at fair value with unrealised gains or losses taken to equity.

The Consolidated Entity's listed share investments are financial assets classified "as at fair value through profit and loss" upon initial recognition and are recognised in the Statement of Financial Position at fair value. During the period changes in the fair value of investment securities will be recognised in the Statement of Financial Performance. The fair value of financial assets will be measured at bid price and will exclude disposal costs

AASB 139: Financial Instruments: Under Recognition and Measurement, the measurement of available for sale instruments at fair value differs to current accounting policy which measures noncurrent investments at cost with an annual review by Directors to ensure the carrying amounts are not in excess of the recoverable value of the instrument.

AASB 1 provides an election whereby the requirements of AASB 139 dealing with financial instruments are not required to be applied to the AIFRS comparative year, and the first time adoption of this standard will apply from 1 July 2005. The Consolidated Entity has decided that it will adopt this election and will not restate comparative information for the 30 June 2005 financial vear.

З.

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2005

$2.$ LOSS FROM ORDINARY ACTIVITIES

The operating loss from ordinary activities before income tax includes the following items of revenue and expense:

	Consolidated Entity		Company
	2005	2004	2005	2004
(a) Operating revenue	$	$	$	$
Sales revenue	27,411	38,349	1,344
Other revenue
Interest received - other	7,257	67,345	7,257	67,345
Other		25
	34,668	105,719	8,601	67,345
(b) Non-operating revenue
Dividends from shares	17,627	8,145	17,627	8,145
Proceeds from sale of investments	441,979	81,000	441,979	81,000
	459,606	89,145	459,606	89,145
Total revenue	494,274	194,864	468,207	156,490
(c) Expenses
Cost of sales	139,948	82,891	99,882	55,870
Operating expenses
Classification and development works	1,747,639	1,027,147	1,747,639	1,027,147
Occupancy costs	28,176	26,428	28,177	26,428
Finance costs	1,546	2,609	1,488	2,374
Borrowing costs - interest paid	2,179	33	2,179	26
Administration costs
Communications	12,809	16,609	12,809	16,404
Consultancy fees	50,269	66,227	50,269	66,227
Corporate costs
Costs related to investments	30,068		30,068
Professional Fees	345,882	$\overline{\phantom{a}}$	345,882
Cost of shares sold	473,486	60,000	473,486	60,000
Depreciation - property, plant and equipment	15,947	22,030	15,947	22,030
Personnel costs
- provision for employee benefits	6,422	25,696	6,422	25,696
- others	220,450	295,688	220,450	295,688
Provision for diminution - share investments	54,873	39,186	400,523	39,186
Provision / (write back of previous provision)
for non recovery of loans to subsidiaryAmortisation /( write back of previous		(7, 445)	1,896	(19, 108)
amortisation) of Internet Technology	(1,348,052)	98,365	(1,348,052)	98,365
Write down intangibles	2,070
Write off subsidiary		7,708		7,708
Other corporate expense	61,208	77,214	60,921	77,013
Equity share of Associate's losses	348,301	391,756
Write back of provision for diminution in value
of investment in Associate		(444, 903)
	2,193,221	1,787,239	2,149,986	1,801,054
SALE OF ASSETS
Sale of assets in the ordinary course of business have givenrise to the following profits and losses:
(a) Net (Loss)/ GainInvestments	(31, 507)	21,000	(31, 507)	21,000

INCOME TAX EXPENSE	Consolidated Entity		Company
	2005	2004	2005	2004
(a) The prima facie income tax on operating loss isreconciled to the income tax provided in the accounts asfollows:	$	$	$	$
Loss from ordinary activities		$(1,698,947)$ $(1,592,375)$ $(1,681,779)$ $(1,644,564)$
Income tax expense calculated at 30% (2004:30%) ofoperating losses	(509, 684)	(477, 713)	(504, 534)	(493,369)
Permanent differences
Diminution in investments	16,462	11,756	120,157	11,756
Provision for non recovery		(2, 234)	569	(5,732)
Amortisation of Internet Technology	(404, 416)	29,510	(404, 416)	29,510
Other non-deductible items
Equity share of Associate's losses	104,490	117,527
Write back of provision for diminution in value	۰	(133, 471)
Tax losses not brought to account as
future income tax benefits	793,148	454,625	788.224	457,835
Income tax expense

(b) The future benefit of tax benefits have not been brought to account as realisation of the benefit cannot be regarded as virtually certain. These tax benefits will only be obtained if:

assessable income is derived of a nature and of amount sufficient to enable the benefit from deductions to $(i)$ be realised:
(ii) conditions for deductibility imposed by the law are complied with; and
(iii) no changes in taxation legislation adversely affect the realisation of the benefit from deductions.
(c) The approximate total income tax benefits associated with tax losses not brought to account are $2,857,096 $(2004: $2,063,948).$

DIRECTORS' AND EXECUTIVES' DISCLOSURES $\mathbf{s}$ .

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

Faroog Khan	Chairman & Managing Director
Victor P H Ho	Executive Director & Company Secretary
Azhar Chaudhri	Executive Director
Yaqoob Khan	Executive Director

(b) Parent Entity Directors' Remuneration

		Primary Remuneration
Specified Directors		Salaries & Fees	Superannuation	Other Benefits	Total
		$	$	$	$
2005	Faroog Khan	100,000	9.000	$\overline{r}$	109,000
	Victor P H Ho	30,000	2,700	$\overline{a}$	32,700
	Azhar Chaudhri	50,000		×	50,000
	Yaqoob Khan	14,602		$\overline{a}$	14,602
2004	Faroog Khan	100,000	9,000	$\overline{a}$	109,000
	Victor P H Ho	30,000	2,700	$\overline{r}$	32,700
	Azhar Chaudhri	50,000		$\overline{a}$	50,000
	Yaooob Khan	40,000			40,000

5. DIRECTORS' AND EXECUTIVES' DISCLOSURES (continued)

(c) Specified Executives' Remuneration

The parent entity does not have any specified executives (other than executive directors).

(d) Number of fully paid shares held by Parent Entity Directors

	Balance at1 July 2004	Issued duringthe Year	Net Change	Balance at30 June 2005
Faroog Khan	53,793,866	$\cdot$	$\tilde{\phantom{a}}$	53,793,866
Victor P H Ho	75,000	$\cdot$	$\tilde{\phantom{a}}$	75.000
Azhar Chaudhri	52,774,221	$\cdot$	$\overline{ }$	52,774.221
Yagoob Khan	53,793,866	$\cdot$	$\tilde{\phantom{a}}$	53,793,866
	Specified Directors

The above disclosures of equity holdings are in accordance with Accounting Standard AASB 1046 (Director and Executive Disclosure by Disclosing Entities) which includes disclosure of direct and indirect holdings of spouses, relatives, spouses of relatives and entities under the control or significant influence of each of the same. There are instances of some overlap between the disclosed holdings in this regard.

(e) Remuneration Practices

The Company's policy for determining the nature and amount of emoluments to directors of the Company is as follows: The Board determines the remuneration structure of all Directors and Executive Officers having regard to the Consolidated Entity's nature, scale and scope of operations and other relevant factors, including the frequency of Board meetings, length of service, particular experience and qualifications.

All Directors and the Company Secretary have agreed to suspend receipt of their remuneration payable to them from July 2005.

		Consolidated Entity		Company
6.	AUDITORS' REMUNERATION	2005	2004	2005	2004
		$	$	$	$
	Amounts received or due and receivable by theConsolidated Entity's auditors for:
	Auditor of the parent entity
	Audit and review of financial reports	11,715	8,715	11,715	8,715
	Other services	2,000	1,000	2,000	1,000
		13,715	9,715	13,715	9,715
7.	CURRENT RECEIVABLES
	Amounts receivable from
	Trade debtors	2,340	14,489
	Sundry debtors	413	8,544	413	8,145
	Return of capital receivable	159,085	$\overline{\phantom{a}}$	159.085
	Goods and services tax recoverable	7,621	9,790	7,125	9,790
		169,459	32,823	166,623	17.935

The return of capital receivable pertains to the value (at balance date) of FSL's pro-rata entitlements to the returns of capital approved by shareholders of each of Altera Capital Limited (AEA) and Sofcom Limited (SOF) on 30 June 2005 and completed by SOF on 19 July 2005 and by AEA on 22 July 2005 (refer also Note 11).

8. NON - CURRENT RECEIVABLES

Bonds and quarantees	500	19.266	500	19.266

9. PROPERTY, PLANT AND EQUIPMENT

Consolidated Entity	Plant andEquipment	LeaseholdImprove-ments	Total
Gross Carrying Amount	$	$	$
Balance at 30 June 2004	154,315	21,788	176,103
Additions	1.370		1,370
Balance at 30 June 2005	155,685	21,788	177,473
Accumulated Depreciation
Balance at 30 June 2004	(103, 248)	(10,969)	(114, 217)
Depreciation expense	(14, 324)	(1,623)	(15, 947)
Balance at 30 June 2005	(117, 572)	(12, 592)	(130, 164)
Net Book Value
As at 30 June 2004	51,067	10,819	61,886
As at 30 June 2005	38,113	9,196	47,309
Company
Gross Carrying Amount
Balance at 30 June 2004	154,315	21,788	176,103
Additions	1,370		1,370
Balance at 30 June 2005	155,685	21,788	177,473
Accumulated Depreciation
Balance at 30 June 2004	(103, 248)	(10,969)	(114, 217)
Depreciation expense	(14, 324)	(1,623)	(15, 947)
Balance at 30 June 2005	(117, 572)	(12, 592)	(130, 164)
Net Book Value
As at 30 June 2004	51,067	10,819	61,886
As at 30 June 2005	38,113	9,196	47,309

Aggregate depreciation during the year is recognised as an expense (refer Note 2 of the Financial Statements).

OTHER NON-CURRENT FINANCIAL ASSETS	Consolidated Entity		Company
	2005	2004	2005	2004
	$	$	$	$
Investments comprise:
Shares and options in listed corporations - at cost	627,929	770,132	627.929	770,132
Shares in associated companies - at cost (Note 11)		$\overline{\phantom{a}}$	1,145,451	1,289,817
Shares in controlled entities - at cost		$\overline{\phantom{a}}$	100.	100
Less: Provision for diminution	(251,179)	(196,305)	(1,246,553)	(846,030)
	376,750	573,827	526,927	1,214,019
Market value of investments at 30 June 2005
Shares in listed companies	377,279	583,827	377,279	923,876
(a) Investment in Controlled Entities			Percentage of Ownership
			2005	2004
Virtual Web Pty Ltd			100%	100%

Incorporated in Australia, on 28 November 2002.

This company is currently engaged in providing Virtual Web services.

Consolidated Carrving

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2005

11. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

			Amount
Name of Associate Entity	Principal Activity	OwnershipInterest	2005$	2004$
Altera Capital Ltd	Software development, IT consultancyand investment management	32.25%	147,425	640,092
Movement in Investment in Associate
Equity accounted amount of investment at the beginning of the financial year			640,092	705.866
	Share of losses from ordinary activities before income tax expense		(348, 301)	(391,756)
Share of income tax expense related to ordinary activities
Return of capital receivable			(144.366)
Write back of provision for diminution in value				325,982

	Equity accounted amount of investment at the end of the financial year		147.425	640.092

	Directors' valuation (as no "market value" due to ASX suspension)		150.076	640.092

On 30 June 2005, AEA shareholders approved an equal return of capital of an in-specie distribution of all of the shares in Central Exchange Limited (CXL) to be received by the Company from a return of capital to be undertaken by Sofcom Limited (SOF) and all of the 36,258,535 SOF shares held by AEA. The SOF return of capital was completed on 18 July 2005 and AEA ultimately received an in-specie distribution of 1,474,306 CXL shares. However, SOF acquired the 1,815,043 CXL shares that was ultimately distributed in-specie to its shareholders in 2 tranches which settled on 30 June 2005 (812,810 CXL shares) and 1 July 2005 (1,002,233 CXL shares).

Accordingly, FSL has provided for a return of capital receivable from AEA in respect of only a portion of the AEA return of capital, being its pro-rata entitlement to the value of all of the SOF shares and the value of the portion of the CXL shares that was available for in-specie distribution by AEA, as at balance date.

FSL has valued such return of capital receivable from AEA based on valuations for SOF and CXL shares adopted by AEA in its capital return statement to FSL (dated 22 July 2005), being the market price of CXL shares and the net asset backing of SOF shares as at the date of the in-specie distributions effected by AEA.

The Directors' valuation for AEA as a balance date is the value of the AEA return of capital received by FSL on 22 July 2005 less the return of capital receivable provided for above.

Summarised Financial Position of Associate

	2005	2004
Current assets:	$	$
Cash	11,845	604,350
Receivables	768,750	64.308
Non-current assets:
Property, plant and equipment	1,730	5.340
Other financial assets	455,887	2,397,131
Current liabilities:
Pavables	(837,771)	(479, 675)
Provisions	(12, 945)	(37,886)
Net assets	387,496	2,553,568
Net losses	(1,080,007)	(1,242,801)

12. INTERNET TECHNOLOGIES Consolidated Entity Company 2005 2004 2005 2004 Ś ¢ $. ¢, $(a)$ Prepaid Classification Works 3.338.152 4.742.417 3,338.152 4.742.417 $(3.338.152)$ $(4.742.417)$ $(3.338.152)$ $(4.742.417)$ Recoverable Amount Written Down Total Prepaid Classification Works $(b)$ Portal Technology Development Works: 30,877 30,877 30,877 30,877 Category Works $(i)$ Recoverable Amount Written Down $(30, 877)$ $(30, 877)$ $(30, 877)$ $(30, 877)$ 156.153 Portal Delivery System Development Works 156.153 156.183 156.153 $(ii)$ $(156, 153)$ $(156, 183)$ $(156, 153)$ $(156, 153)$ Recoverable Amount Written Down 4.178.428 4.178.428 4,178,428 4.178.428 Classification Works $(iii)$ $(4, 178, 428)$ Recoverable Amount Written Down $(4, 122, 214)$ $(4, 178, 428)$ $(4, 122, 214)$ 56,214 56,214 56,214 Total Portal Technology Development Works 56,214 Summary of Portal Technology Prepaid Classification Works 3,338,152 4,742,417 3,338,152 4,742,417 Category Works 30,877 30,877 30,877 30.877 156,153 156,183 156,153 Portal Delivery System Development Works 156.153 4,178,428 4,178,428 4,178,428 4,178,428 Classification Works $(7,703,610)$ Accumulated write-downs $(9,051,691)$ $(7,703,610)$ $(9,051,661)$ Total Portal Technology 56,214 56.214 Virtual Web development works 98,365 98,365 98,365 98,365 Virtual Web development works Recoverable Amount Written Down $(98, 365)$ $(98, 365)$ $(98, 365)$ $(98, 365)$ 56,214 56,214 Total Development Works

Pursuant to a Portal Classification Agreement (PCA) for Data Base Systems Limited (DBS) to classify a total of 3,146,000 Internet website URL's (over a 5 1/2 year period). As advised in the Company's IPO Prospectus dated 12 January 2000, the Company prepaid a portion of such classification costs by the issue of 50,301,800 fully paid ordinary shares at an issue price of 20 cents per share (representing a notional $10,060,340) and was required to pay a further cash component being $272,700 for 286,000 websites to be classified during the first 6 months from commencement of classification works. Thereafter, the Company is required to pay $2,002,000 cash for the balance of 2,860,000 websites to be classified over the subsequent period of 60 months (at a rate of $0.70 per website URL classified).

All Classification, Category and Portal Delivery System development costs incurred up to the launch date the Fast Scout Portal and Virtual Web service on 9 April 2002 were capitalised as an asset. Thereafter, all such costs are expensed as incurred.

During the financial year, the Company received a total of 439,135 (2004: 255,697) classified business-related website URL's from DBS at a cost of $1,715,260 (2004: $971,911), comprising:

$1,404,266 (2004: $817,667) drawn-down from prepayments of $10,060,340; and $(1)$

a cash component of $310,994 (2004: $154,243) $(ii)$

$206,311 of the above cash component remained outstanding at Balance Date.

The Company notes that pursuant to a settlement and termination of the PCA with DBS on 19 August 2005 (which was approved by shareholders at a general meeting held on 22 July 2005), the outstanding cash component of the classifications works to Balance Date was reduced to $142,189 and 20,965,814 new shares were issued to DBS (at an issue price of 2 cents per share).

12. INTERNET TECHNOLOGIES (continued)

The Company incurred total Portal technology classification and development works expenses of $1,747,639 (2004;$1,027,147) during the financial period, including the above costs. However, $1,348,052 of write-downs on the Portal Technology asset in previous periods were written-back against such expenses such that the net expenses were only $399,587 for the financial year (2004: $1,125,512).

The Company has also entered into an arrangement to commercially exploit a web based personalisation and information retrieval software programme that has been developed by Mr Farooq Khan, a director of the Company.

This arrangement involved the Company expending an initial amount of $145,000 towards the development, marketing and promotion of this programme. 100% of all revenues generated from the sale of this software shall be for the benefit of the Company until all monies applied by the Company have been repaid. Thereafter all profits shall be split between the parties in accordance with their respective interests (50:50 at balance date) in such software.

The Company has incurred $124,979 in costs in relation to the development, marketing and promotion of such programme during the financial year, which has been expensed.

13.	NON-CURRENT INTANGIBLES		Consolidated Entity		Company
		2005	2004	2005	2004
		$	$	$	$
	Internet website		2,070
14.	CURRENT PAYABLES
	Trade creditors	5,737	3,337	5,737	3,337
	Other creditors and accruals	51,340	40,056	51,340	39,729
	Payables on purchase of investments		22,842		22,842
	Amounts due to directors and director related entities
	(refer to Note 21)	482,236	57,942	482,236	57,942
	Unmarketable parcel trust account	5,556	5,556	5,556	5,556
		544,869	129,733	544,869	129,406
15.	NON-CURRENT PROVISIONS
	Provision for employee entitlements	21,732	15,309	21,732	15,309
	Number of employees (including Executive Directors andOfficers) at Balance Date		5		5
16.	CONTRIBUTED EQUITY	2005	Consolidated Entity2004	2005	Company2004
	(a) Issued and Paid-Up Capital	$	$	$	$
	81,593,281 fully paid ordinary shares	16,414,372	16,414,372	16,414,372	16,414,372
	(2004: 81, 593, 281)

Each fully paid ordinary share carries one vote per share and the right to participate in dividends.

			Consolidated Entity	Company
17.	ACCUMULATED LOSSES	2005	2004	2005	2004

	Balance at beginning of the period			$(14,486,386)$ $(12,894,011)$ $(14,506,879)$ $(12,862,315)$
	Net loss	(1.698.947)		$(1,592,375)$ $(1,681,779)$ $(1,644,564)$
	Balance at end of financial period				$(16, 185, 333)$ $(14, 486, 386)$ $(16, 188, 658)$ $(14, 506, 879)$

LOSSES PER SHARE	2005	2004	2005	2004
Basic loss per share (cents)	(2.08)	(1.95)	(2.06)	(2.02)
Net Loss			$(1,698,947)$ $(1,592,375)$ $(1,681,779)$ $(1,644,564)$
Weighted average number of ordinary shares outstandingduring the year used in calculation of basic earnings pershare	81.593.281	81,593,281	81,593,281	81.593.281

Diluted earnings per share has not been disclosed, as it does not show a position which is inferior to basic earnings per share.

EXPENDITURE COMMITMENTS	Consolidated Entity		Company
	2005	2004	2005	2004
Cash Contractual Commitments			s	s
Not longer than one year	$\overline{r}$	566,241	$\sim$	566.241
Longer than one year and not longer than 2 years	$\sim$	471.868	$\mathbf{r}$	471.868
		1.038.109		1,038,109

The above cash contractual commitments pertained to the Portal Classification Agreement (PCA) with Data Base Systems Limited (DBS) referred to in Note 12.

Pursuant to a settlement and termination of the PCA with DBS on 19 August 2005 (which was approved by shareholders at a general meeting held on 22 July 2005), the Company has ceased its commitments to DBS under the PCA.

20. SEGMENT REPORTING

The Consolidated Entity is based in Australia but offers its Virtual Web Internet related software for sale internationally via downloads from Internet.

	External Revenue		Operating Results
Segment Revenues & Results	2005	2004	2005	2004
	$	$	$	$
Internet Technologies	27,411	38,374	(514, 194)	(1,071,664)
Investments	459,606	89.145	(447.122)	43,106
	487,017	127,519	(961, 316)	(1,028,558)
Unallocated	7,257	67,345	(737.631)	(563,817)
	494,274	194,864
Loss from ordinary activities before income tax			(1,698,947)	(1, 592, 375)
Income tax expense relating to ordinary activities
Loss from ordinary activities after income tax			(1,698,947)	(1,592,375)

	Assets		Liabilities
	2005	2004	2005	2004
Segment Assets & Liabilities	$	$	$	$
Internet Technologies	2,340	72,773	(218.166)	(28,000)
Investments	524,175	1,222,063	$\mathbf{m}$	(22,842)
	526,515	1,294,836	(218, 166)	(50, 842)
Unallocated	269,125	778,192	(348, 435)	(94, 200)
	795.640	2,073,028	(566.601)	(145.042)

20. SEGMENT REPORTING (continued)

	Internet Technologies		Investments
Other Segment Information	2005	2004	2005	2004
	$	$	$	$
Carrying value of investments accounted for usingthe equity method			147.425	670.092
Share of net losses of associate company accountedfor under the equity method			(348.301)	(391,756)
Acquisition of segment assets	$\overline{r}$	100,435	(346.001)	(340, 322)
Other non-cash expenses
Write back/(amortisation) of Internet TechnologyDiminution of segment assets (write back)	1,348,052	(98, 365)	$\blacksquare$(54.873)	(39,186)

21. RELATED PARTY TRANSACTIONS

The names of each person holding the position of Director of the Company during the financial year were:

Victor P. H. Ho - Farooq Khan
Azhar Chaudhri - Yagoob Khan

(a) Transactions with Controlling Entity

Data Base Systems Limited holds a 61.65% interest in the issued fully paid ordinary share capital of the Company at Balance Date (2004: 61.65%) and is regarded as a controlling entity of the Company.

Contractual Services

During the financial year, Data Base Systems Limited provided services to the Company pursuant to a Portal Classification Agreement. There was an amount outstanding at the Balance Date by the Company. Interest is not charged on such outstanding amount.

Entity	Expenditure	Amounts Outstanding
Data Base Systems Limited
Cash Payments	310.994	206.311
Prepayment Draw-downs	1,404,266	$\mathbf{r}$
	1,715,260	206.311

As described in Note 12, pursuant to a settlement and termination of the PCA with DBS on 19 August 2005, the outstanding cash component of the classifications works to Balance Date was reduced to $142,189 and 20,965,814 new shares were issued to DBS (at an issue price of 2 cents per share).

(b) Transactions with Controlled Entities

Debtors

During the financial year, the Company incurred operating expenses on behalf of its subsidiary, Virtual Web Pty Ltd. There was an amount outstanding at the Balance Date by Virtual Web Pty Ltd. Interest is not charged on such outstanding amount.

Entity	Amounts Outstanding

Virtual Web Pty Ltd	21,988

(c) Transactions with Associate

Services and Creditors

During the financial year, Altera Capital Limited (which FSL is a 32.25% shareholder in and in which Messrs Farooq Khan and Victor Ho are also directors) provided software development, project management and IT consulting services to the Company at normal commercial rates. Interest is not charged on such outstanding Entity Expenditure Amounts Outstanding

		м.
Altera Capital Ltd	99.464	11.855

21. RELATED PARTY TRANSACTIONS (continued)

(c) Other Transactions

The Company incurred litigation costs (with Sofcom Limited (SOF) and Altera Capital Limited (AEA)) in relation to the 3 company's investment in Scarborough Equities Limited (formerly Rivkin Financial Services Limited) (SCB). SOF, as the major shareholder in SCB (of the three companies), had primary conduct of the payment of the costs of the litigation proceedings and legal cost settlement amounts arising therein. Such costs are shared between SOF/FSL/AEA in proportion to each company's relative interest in their collective stake in SCB (prior to the sale of SCB shares to CXL by SOF and AEA on 30 June 2005) - SOF's share is 67%; FSL's share is 18% and AEA's share is 15%. The following amount is payable by FSL to SOF as at balance date. Interest is charged at 7% per annum on such outstanding amounts.

Entity	Amounts Outstanding
Sofcom Limited	$245.957

FSL paid $120,000 of such outstanding amount to SOF on 15 July 2005.

22. CASH FLOW INFORMATION

Reconciliation of Loss from Ordinary Activities after Tax to Net Cash Flows from Operations $(a)$

	Consolidated Entity		Company
	2005	2004	2005	2004
	$	$	$	$
Operating loss after tax			$(1,698,947)$ $(1,592,375)$ $(1,681,779)$ $(1,644,564)$
Non cashflows in loss from ordinary activities
Depreciation - plant & equipment	15,947	22,030	15,947	22,030
Classification and development works	1,715,260	817,668	1,715,260	817,668
Loss/(Gain) on sale of investments	31,507	(21,000)	31,507	(21,000)
Loss on sale of assets
Provision for diminution - share investments	54,873	39,186	400,523	39,186
Write-down of Portal Technology	(1,348,052)	98,365	(1,348,052)	98,365
Write down intangibles	2,070
Equity share of Associate's losses	348,301	391,756
Write back of provision for diminution in value
of investment in Associate		(444, 903)
Decrease/(Increase) in assets:
Receivables	40,889	16,610	29,163	13,290
Other current assets		(4, 421)		(4, 421)
Increase/(Decrease) in liabilities:
Trade creditors and accruals	209,153	(2,348)	209,153	(605)
Provisions	6,422	13,119	6,422	13,119
Net cash outflows from operating activities	(622, 577)	(666, 313)	(621, 856)	(666,932)

$(b)$ Reconciliation of Cash

For the purposes of the statements of cash flows, cash includes cash on hand and in banks and investments in money market instruments, net of outstanding bank overdrafts. Cash at the end of the financial period as shown in the statement of cash flows is reconciled to the related items in the statement of financial position as follows:

Consolidated Entity		Company
2005	2004	2005	2004
			s
54,197	686,850	50.956	682.888
54.197	686.850	50.956	682.888

23. FINANCIAL INSTRUMENTS

(a) Interest Rate Risk Exposure

2005	WeightedAverage	Variable	FixedInterest Rate Interest Rate	Non-InterestBearing	Total
Financial assets	Interest Rate	$	$	$	$
Cash	3.76%	54,197			54,197
Receivables				169,959	169,959
Investment in Associates				147,425	147,425
Shares in listed companies			$\tilde{\phantom{a}}$	376,750	376,750
		54,197		694,134	748,331
Financial liabilities
Payables	7.00%		(245, 957)	(298, 912)	(544, 869)
Employee entitlements				(21, 732)	(21, 732)
		$\mathbf{u}$	(245, 957)	(320, 644)	(566, 601)
Net financial assets		54,197	(245, 957)	373,490	181,730

		Variable	Fixed	Non-Interest
2004			Interest Rate Interest Rate	Bearing	Total
Financial assets		$	$	$	$
Cash	5.67%	686,850			686,850
Receivables				52,089	52,089
Investment in Associates				640,092	640,092
Shares in listed companies				573,827	573,827
		686,850	$\ddot{\phantom{0}}$	1,266,008	1,952,858
Financial liabilities
Payables				(129, 733)	(129, 733)
Employee entitlements				(15, 309)	(15, 309)
		$\overline{a}$	÷,	(145, 042)	(145, 042)
Net financial assets		686,850	$\tilde{\phantom{a}}$	1,120,966	1,807,816

Reconciliation of net financial assets to net assets				Consolidated Entity
				2005	2004
				$	Ś
Net financial assets as above				181,730	1,807,816
Non-financial assets and liabilities
Property, plant and equipment				47,309	61,886
Portal Technology and Intangibles					58,284
				229.039	1,927,986

(b) Credit Risk Exposure

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with credit-worthy counterparties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company measures credit risk on a fair value basis.

The Company does not have any significant credit risk exposure to any single counterparty or any group counterparties having similar characteristics.

The carrying amount of financial assets recorded in the Financial Statements represents the Company's maximum exposure to credit risk without taking account of the value of collateral or other security obtained.

(c) Net Fair Value of Financial Assets and Liabilities

The carrying amount of financial assets and financial liabilities recorded in the Financial Statements represents their respective net fair values, determined in accordance with the accounting policies disclosed in Note 1 to the financial statements.

The Consolidated Entity does not have any contingent assets or liabilities.

25. SUBSEQUENT EVENTS

(a) On 22 July 2005, the Company received its entitlements under an Altera Capital Limited (AEA) equal return of
- (i) 475,511 shares in ASX listed investment entity Central Exchange Limited (CXL); and
- (ii) 11,694,539 shares in ASX listed Sofcom Limited (SOF). The Company has become the largest shareholder in SOF with 12,420,439 shares (27.8%).
(b) On 18 July 2005, the Company received its entitlements under a SOF equal return of capital, being 29,515 shares in CXL and $7,318 cash.
(c) On 22 July 2005, the Company paid $120,000 to SOF in relation to FSL's share of costs incurred in relation to Scarborough Equities Limited (SCB). The balance of the approximately $125,000 payable to SOF is accruing 7% interest per annum. $245,957 of such payable to SOF has been provided for at Balance Date - refer Note 14 and
(d) On 22 July 2005, shareholders approved the settlement and termination of the Portal Classification Agreement (PCA) with Data Base Systems Limited (DBS).
(e) On 19 August 2005, pursuant to the settlement and termination of the PCA, the outstanding cash component of the classifications works was reduced to $142,189 and 20,965,814 new shares were issued to DBS at an deemed issue price of 2 cents per share, valuing the shares at $419,316 which will be expensed for the year ended 30

The Company's expanded issued capital is 102,559,095 shares and DBS holds 71,192,514 shares (69.4%).

DIRECTORS' DECLARATION

The Directors of the Company declare that:

$\mathbf{1}$ The financial statements, comprising the Statements of Financial Performance, Position and Cash Flows, and accompanying notes as set out on pages 20 to 37, are in accordance with the Corporations Act 2001 and:
- comply with Accounting Standards and the Corporations Regulations 2001; and $(a)$
- give a true and fair view of the Company's and Consolidated Entity's financial position as $(b)$ at 30 June 2005 and of their performance for the year ended on that date;
$2.$ 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.
1. The Directors have been given the declarations required by section 295A of the Corporations Act 2001 by the Executive Chairman and Managing Director, the person who performs the chief executive function, and by the Company Secretary, the person who performs the chief financial officer function, for the purposes of section 295A, who 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 are in accordance with the Corporations Act 2001, comply with Accounting Standards and the Corporations Regulations 2001 and give a true and fair view of the Company's financial position as at 30 June 2005 and of its performance for the year ended on that date: and
- the financial statements are founded on a sound system of risk management and internal $(c)$ compliance and control which implements the policies adopted by the Board. The Company's risk management and internal compliance and control systems are operating efficiently and effectively in all material respects.

This declaration is made in accordance with a resolution of the Directors made pursuant to section 295(5) of the Corporations Act 2001.

Faroog Khan Chairman and Managing Director

Perth, Western Australia

12 September 2005

Victor Ho Executive Director and Company Secretary

STANTON PARTNERS

1 HAVELOCK STREET WEST PERTH 6005 WESTERN AUSTRALIA

TELEPHONE: (08) 9481 3188

Facsimile: (08) 9321 1204

e-mail: [email protected]

INDEPENDENT AUDIT REPORT

TO THE MEMBERS OF FAST SCOUT LIMITED

SCOPE

The financial report and directors' responsibility

The financial report comprises the statement of financial position, statement of financial performance, statement of cash-flows, accompanying notes to the financial statements, and the director's declaration for Fast Scout Limited (the Company) and the consolidated entity for the year ended 30 June 2005. The consolidated entity comprises both the company and the entities it controlled during the year.

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

Audit approach

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

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

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

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

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

INDEPENDENCE

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

In accordance with ASIC Class Order 05/83, we declare to the best of our knowledge and belief that the auditor's independence declaration set out on page 18 of the financial report has not changed as at the date of providing our audit opinion.

AUDIT OPINION

In our opinion, the financial report of Fast Scout Limited is in accordance with:

a) 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 2005 and of their performance for the year ended on that date; and
- (ii) complying with Accounting Standards in Australia and the Corporations Regulations 2001; and
b) other mandatory professional reporting requirements in Australia.

Inherent Uncertainty Regarding Going Concern

Without qualification to the opinion expressed above, attention is drawn to the following matters:

As referred to in note 1 to the financial statements, the financial statements have been prepared on a going concern basis.

At 30 June 2005 the consolidated entity had working capital of $229,039 and had incurred a loss for the year of $1,689,947. The ability of the Company and the consolidated entity to continue as going concerns and to meet planned and committed expenditure requirements is subject to the Company and its subsidiaries successfully exploiting the technology owned by the Company and its subsidiaries and the raising of further equity and/or loan capital.

In the event that the Company and the consolidated entity is not successful in raising further funds, the realisable value of the Company's and the consolidated entity's non-current assets may be significantly less than their current carrying values. Furthermore, the Company and the consolidated entity may not be able to continue in business in its current form.

STANTON PARTNERS

Starten Santier

JP Van Dieren Partner

Perth, Western Australia 12 September 2005

AI assistant

STRIKE RESOURCES LIMITED — Annual Report 2005

65855_rns_2005-09-12_83179eeb-bd0a-477f-a05c-5f3b0805fd94.pdf

FAST SCOUT LIMITED

FULL YEAR REPORTS:

30 June 2005

CONTENTS

www.fastscout.com

CORPORATE DIRECTORY

BOARD Farooq Khan

PRINCIPAL & REGISTERED OFFICE

SHARE REGISTRY

STOCK EXCHANGE

ASX CODE FSL

AUDITORS

BANKER

APPENDIX 4E PRELIMINARY FINAL REPORT

RESULTS FOR ANNOUNCEMENT TO THE MARKET

Dividends

Brief Explanation of Results

APPENDIX 4E PRELIMINARY FINAL REPORT

COMMENTARY ON RESULTS AND OTHER SIGNIFICANT INFORMATION

APPENDIX 4E PRELIMINARY FINAL REPORT

STATUS OF AUDIT

PRINCIPAL ACTIVITIES

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

OPERATING RESULTS

LOSS PER SHARE

FINANCIAL POSITION

NET TANGIBLE ASSET BACKING

DIVIDENDS

SECURITIES IN THE COMPANY

REVIEW OF OPERATIONS

$\mathbf{1}$ . Termination and Settlement of Portal Classification Agreement (PCA)

$1.1.$ Summary of Final Settlement Terms

$1.2.$ Approval at General Meeting

$1.3.$ Reasons for Proposed Settlement and Termination

$2.$ Virtual Web Internet Filtering and Monitoring Solution

CORPORATE $\overline{3}$ .

3.1. Altera Capital Limited (AEA) Shareholding

Sofcom Limited (SOF) Shareholding $3.2.$

3.3. Scarborough Equities Limited (SCB) Litigation

FUTURE DEVELOPMENTS

ENVIRONMENTAL REGULATION AND PERFORMANCE

DIRECTORS AND COMPANY SECRETARY

DIRECTORS' REPORT

DIRECTORS' MEETINGS

Board Committees

REMUNERATION REPORT

$(1)$ Remuneration Policy

$(2)$ Details of Remuneration of Directors

$(3)$ No Executive Officers

$(4)$ Directors' Deeds

$(5)$ Other Directors' Benefits

AUDITOR

EVENTS SUBSEQUENT TO BALANCE DATE

ROUNDING OF AMOUNTS

STANTON PARTNERS

TELEPHONE: (08) 9481 3188

RE: FAST SCOUT LIMITED

STATEMENTS OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2005

STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2005

STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2005

NOTE TO THE FINANCIAL STATEMENTS for the vear ended 30 June 2005

SUMMARY OF ACCOUNTING POLICIES $\blacksquare$

Financial Reporting Framework

Significant Accounting Policies

Principles of Consolidation $111$

$1.2$ Revenue Recognition

Sale of Licence and Disposal of Assets

Contributions of Assets

iii. Interest Revenue

Dividend Revenue

Other Revenue v.

Foreign Currency Transaction and Balances $1.3.$

Income Tax $1.4.$

NOTE TO THE FINANCIAL STATEMENTS for the vear ended 30 June 2005

$15$ Goods and Services Tax

16 Employee Benefits

$1.7.$ Receivables

STRIKE RESOURCES LIMITED Annual Report 2005