VERIS LIMITED - Annual Report 2008

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EMERSON STEWART GROUP LIMITED Old Swan Brewery Suite 10, Part Level 1, 171-175 Mounts Bay Road Perth WA 6000

T: +61 8 9424 9555 F: +61 8 9485 1339 www.emersonstewart.com

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Page

Directors’ Report	1
Auditors Independence Declaration	15
Directors Declaration	16
Income Statement	17
Balance Sheet	18
Statement of Changes in Equity	19
Statement of Cash Flows	20
Notes to the Financial Statements	21
Independent Audit Report	39
Additional Information	41

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Directors’ Report

The directors of Emerson Stewart Group Limited ABN 80 122 958 178 (the “Company” or “Emerson Stewart”) submit the following report in respect of the company and the consolidated entity for the financial year ended 30 June 2008:

The following persons were directors of the Company during the financial year until the date of this report, unless otherwise stated:

Steven Cole LLB (Hons) FAICD

non-executive independent chairman (appointed 31[st] March 2008)

Steven Cole has 35 years’ professional, corporate and business experience through senior legal consultancy, as well as a range of executive management and non-executive appointments.

Steven’s extensive boardroom and board sub-committee experience includes ASX-listed, statutory, proprietary and not-for-profit organisations covering the industrial, financial, educational, professional services, health and resources sectors.

In particular, Steven has a wealth of leadership experience of professional services organizations having held senior executive management roles with major law firms Parker & Parker and Allens Arthur Robinson before retiring from legal practice in 2007.

His current corporate appointments include:

Chairman of ASX-listed company, Solco Limited
Deputy Chairman of Reed Resources Limited
Chairman of Great Southern Managers Australia Limited
Chairman of two private investment trust companies with over $20 million under management
Deputy chairman of the Professional Standards Councils around Australia (statutory authorities governing professional standards)
Vice president of the Australian Institute of Company Directors (Western Australian division)
Deputy chairman of Brightwater Care Group Inc, a major charitable non-governmental organisation.

Dario Amara BEng (Distn) FIEAust CPEng Registered Builder

managing director/chief executive (appointed 29[th] January 2008)

Dario Amara is an engineer with extensive business experience gained over 29 years in the Australian and international markets and across the resources and infrastructure sectors.

For the past 16 years, he has occupied senior executive roles with major construction and engineering groups. Dario has a record of achievement in establishing, growing and rejuvenating businesses and strategic leadership. Prior to co-founding Emerson Stewart, Dario successfully led GRD Minproc as managing director/chief executive and John Holland Asia as chief executive officer.

He is currently a non-executive director of Austal and non-executive chairman of Mission New Energy (both ASX listed), chairman of the City of Perth Heritage Appeal and a board member of the Perth International Arts Festival.

Dario has also served as chairman of the West Australian Opera Company and the Art Gallery of Western Australia.

Angelo Dabala MAICD

executive director/director energy (appointed 29[th] January 2008, resigned 25[th] September 2008) Angelo Dabala has more than 26 years’ experience in the energy and resources sectors. Angelo has worked on resource industry projects globally, in onshore and offshore oil and gas, power generation, alumina, mineral sands, gold, brewing, food and manufacturing.

Prior to co-founding Emerson Stewart, Angelo co-founded engineering consulting group PCT Engineers where he served as managing director.

In 1992, PCT Engineers was recognised as one of Australia's 100 fastest growing private companies. In 2007, PCT Engineers was sold to GHD.

In 1996-97, Angelo held the position of President of the Institute of Instrumentation and Control of Australia.

David Richardson MIE Aust

non executive director (appointed 31[st] March 2008)

David Richardson is a mechanical engineer with 34 years experience in the mining and resource industries.

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David started as a graduate engineer at Alcoa Pinjarra refinery and worked for Alcoa at Pinjarra and on the design and construction of a new refinery at Wagerup.

He was a co founder of the successful Toussaint and Richardson P/L a company specializing in design and execution of Process Plant projects in the mining and resource industry.

David has extensive involvement in Project and Design management at both a senior executive and director level and has participated in Joint Venture committees and Alliance boards as both director and sponsor.

David served as an executive director of Worley Parsons after the sale of Toussaint and Richardson to Worley in 2000 and established the Mining and Metals division of Worley prior to the public listing in 2003.

Since 2003 he has pursued various projects and investments in the Agriculture and forestry industries, and was until recently the managing director of Solco Limited.

David brings a vast commercial experience to the role in both the conceptual and execution of resource and infrastructure projects and a technical and contractual understanding of both the mining and renewable energy sectors.

James Cullen BCom CA FFin FAICD

non-executive director (appointed 31[st] March 2008)

James Cullen is a qualified Chartered Accountant with extensive commercial experience covering several industries and countries.

James is currently an executive director of Repcol Limited. From 1994 to 2007, James was managing director of PCH, an ASX-listed Australian company providing a range of industrial services to numerous industry sectors. These sectors included mining and processing, oil and gas, petrochemicals, pharmaceuticals, infrastructure, commercial and residential.

PCH grew from a small Perth-based supplier into a highly regarded international multidisciplined contractor. The company built a market-leading position in the Australian natural resources sector, servicing clients such as BHP Billiton, BP, Rio Tinto, Shell and Woodside. Internationally, PCH developed successful businesses in Asia, the Arabian Gulf and Caspian Sea regions, largely servicing construction and maintenance activity in the oil and gas and natural resource sectors.

James was previously involved in the motion picture industry in Los Angeles, California in management, financial and company director capacities. Prior to that, he worked for Price Waterhouse (now PricewaterhouseCoopers) in Australia, New Zealand and the United States of America, servicing a multitude of clients in numerous industries.

Graeme Yukich – Chairman (resigned 31[st] March 2008)

Graeme Yukich holds a bachelor of commerce degree from the University of Western Australia and is the founder and managing director of Perth based investment advisory firm Entrust Private Wealth Management (“Entrust”). Entrust specialises in private client portfolio management, capital raisings, funds management and investment analysis.

Prior to Entrust in 2002, Graeme was employed by stockbroking firm Hartleys for 12 years, with his principal role being investment analysis and advice to retail and wholesale clients.

Graeme was previously employed by Ernst and Young in the audit and advisory division for 5 years and is a member of the Institute of Chartered Accountants.

Andrew Fry – Non Executive Director (resigned 29[th] January 2008)

Andrew Fry holds a bachelor of commerce degree and is a director of Entrust Private Wealth Management Pty Ltd. Prior to joining Entrust, Andrew was employed as a stockbroker with Hartley’s for 6 years where he gained significant experience in the financial services industry encompassing company analysis and capital raising initiatives. Andrew was admitted as a member of the Australian Institute of Chartered Accountants in 1996, having previously gained 5 years experience in an audit and advisory capacity.

Brad Gordon – Non Executive Director (resigned 31[st] March 2008)

Brad Gordon is a director and senior investment adviser with Entrust Private Wealth Management Pty Ltd. Prior to joining Entrust, Brad held senior management and advisory positions with Hartley’s and Porter Western. He has almost 20 years experience in the financial services industry in the provision of portfolio management advice and investment analysis to high net worth clients.

Brad is a member of the Securities Institute of Australia and Financial Planning Association of Australia.

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Company Secretary

Chris Mews was appointed Company Secretary of Emerson Stewart Group Ltd (formerly Howard Capital Group Ltd) in December 2006. He has over 10 years experience in the financial industry holding financial positions at both MLC and Guardian Funds Management Ltd prior to joining Entrust.

Chris holds a Bachelor of Business from Edith Cowan University, is a qualified Certified Practising Accountant and is an Associate of the Institute of Chartered Secretaries and Administrators.

Rod Smith was appointed Co Company Secretary of Emerson Stewart Group Limited in July 2008. Rod has 17 years financial and commercial experience in the resources industry, in positions with GRD Minproc, WorleyParsons and Rio Tinto and holds Bachelor of Business degree and is a qualified Certified Practising Accountant.

Principal Activities

Emerson Stewart provides advisory, project implementation and development services across three business lines:

Resources: all commodities
Infrastructure : urban development; mining/remote area housing; water and waste water; airports; heavy rail; roads and highways
Energy: power generation; power distribution.

Review of Operations

Emerson Stewart has delivered a strong performance in 2008, resulting in sustained growth across the business and an expansion of the Company’s client base.

During the year an Infrastructure Business Line was established, providing a further dimension to the range of services that the Company provides, such as high level advisory and project implementation services in the urban development, built form, water and wastewater, transport and remote accommodations.

There is an increasing demand for Emerson Stewart’s services as a result of strong growth in the resources, infrastructure and energy sectors in Australia and internationally and the Company is well placed to capture growth within each of its business lines.

The 2008 result includes a net profit after tax for the 12 months to 30 June 2008 of $784 thousand, an increase of 222.9% on the $242 thousand net profit reported for the same period to 30 June 2007.

The result was earned on revenue of $ 10,461 thousand, an increase of 137.4% on the $4,407 thousand earned in the previous corresponding period.

EBITDA for the period was $1,430 thousand, an increase of 304% from the corresponding period. The EBITDA margin for the Company increased to 13.7% from 8.0% reported in 2007 (excluding one-off acquisition costs the EBITDA for the Company was $2,173 thousand, which equates to an EBITDA margin of 20.8%). The Company’s net profit after tax margin on revenue increased to 7.5% from 5.5% reported in the previous corresponding period.

Earnings per share were 1.1 cents per share, an increase of 185.0% above the 0.4 cents per share for the previous period.

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Remuneration Report

DIRECTOR AND EXECUTIVE DISCLOSURES

(a) Details of Specified Directors and Specified Executives

	Position	Appointed on	Resigned on
Directors
Dario Amara	Executive Director/Chief	28 January 2008		-
	Executive Officer
Angelo Dabala	Executive Director	28 January 2008	25 September	2008
Steven Cole	Non-Executive	31 March 2008		-
	Director/Chairperson
James Cullen	Non-Executive Director	31 March 2008		-
David Richardson	Non-Executive Director	31 March 2008		-
Graeme Yukich	Non-Executive Director	1 December 2006	31 March	2008
Brad Gordon	Non-Executive Director	1 December 2006	31 March	2008
Andrew Fry	Non-Executive Director	1 December 2006	29 January	2008
Executives/ Officers
John Morhall	Business Line Director	1 July 2007		-
Marino Evangelisti	Business Line Director	2 January 2008		-
Chris Mews	Company Secretary	1 December 2006		-
Rod Smith	Chief Financial Officer	26 May 2008		-

(b) Remuneration Policy

Emerson Stewart has demanding expectations of its people, especially its executive leadership team. Emerson Stewart aligns the performance outcomes of its executives with its own corporate outcomes and as such remuneration will be based on merit, performance and responsibilities assigned and undertaken.

The Company has established a nominations and remuneration committee, which is responsible for:

Assessing appropriate remuneration policies, levels and packages for Board Members, the CEO, and (in consultation with the CEO) other senior executive officers.

Monitoring the implementation by the Group of such remuneration policies Recommending the Company’s remuneration policy so as to:

motivate directors and management to pursue the long-term growth and success of the Company within an appropriate control framework;

demonstrate a clear relationship between key executive performance and remuneration

The Company has entered into executive services agreement (Executive Agreements) with the executive Directors and senior managers of the Company.

The initial term of the Executive Agreements expire on 30 June 2011.

In addition to salary payable, the Executives are entitled to a short term incentive bonus (STIB) and a long term incentive bonus.

The STIB will be calculated as a percentage of a bonus pool, capped at 40% of EBIT performance above targets set by the Board from time to time, and will be dependent on the Executive achieving various key performance indicators for their relevant business line. The chief executive’s STIB will be calculated on a combination of each business line’s performance and the Company’s performance as a whole. The STIB for each Executive is capped at 100% of their salary.

Emerson Stewart bases its Long Term Incentive benefits on a combination of continued valued service of the particular executive and overall corporate performance of Emerson Stewart as a whole so as to align each of the executive’s incentives with the total performance of Emerson Stewart.

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The long term incentive bonus will be payable in the form of Executive Options. A portion of the options are subject to attainment of designated special key performance indicators at the scheduled time of their vesting. These KPI’s involve comparing the Company’s Total Shareholder Return to a Ranking Group at 30 June 2011 and the three years leading up to that time, thereby aligning the company performance with that of the executive.

(c) Remuneration of Directors and Specified Executives

Directors Dario Amara FY08 FY07 Angelo Dabala FY08 FY07 Steven Cole FY08 FY07 James Cullen FY08 FY07 David Richardson FY08 FY07 Total FY08 FY07	Short Term Employee Benefits Post Employment Benefits Total Cash Salary Superannuation 229,358 20,642 250,000 218,654 19,679 238,333 229,358 20,642 250,000 218,654 19,679 238,333 13,761 1,239 15,000 - - - 9,174 826 10,000 - - - 9,174 826 10,000 - - -
	490,825 44,175 535,000 437,308 39,358 476,666

Specified Executives John Morhall FY08 FY07 Marino Evangelisti (commenced 2 January 2008) FY08 FY07 Rod Smith (commenced 26 May 2008) FY08 FY07 Total FY08 FY07	Short Term Employee Benefits Post Employment Benefits Total Cash Salary Superannuation 363,700 - 363,700 - - - 157,170 - 157,170 - - - 9,792 881 10,673 - - -
	530,662 881 531,543 - - -

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(d) Shares issued, held and transacted by Directors and Specified Executives

Directors Dario Amara Angelo Dabala Steven Cole James Cullen David Richardson Graeme Yukich Brad Gordon Andrew Fry Total Executives/ Officers John Morhall Marino Evangelisti Chris Mews Rod Smith Total	Balance at 30/06/2007 Issued as part of reverse acquisition Other movements Balance at 30/06/2008 - 31,250,000 3,125,000 34,375,000 - 31,250,000 - 31,250,000 - - 500,000 500,000 - - 150,000 150,000 - - 500,000 500,000 950,000 - 60,000 1,010,000 475,000 - - 475,000 475,000 - 200,000 675,000
	1,900,000 62,500,000 4,535,000 68,935,000
	- - - - - - - - - - 20,000 20,000 - 25,000 25,000
	- - 45,000 45,000

(e) Options issued, held and transacted by Directors and Specified Executives

There were no options issued or held by Directors and Specified Executives for the year ended 30 June 2008.

Options Granted Since Balance Date Dario Amara Angelo Dabala John Morhall Marino Evangelisti Marino Evangelisti Rod Smith Claire Ingham Claire Ingham Total	Options Granted Fair Value of Options Exercise Price per option 3,000,000 $0.04 $0.24 1,000,000 $0.04 $0.24 1,000,000 $0.04 $0.24 1,000,000 $0.04 $0.24 3,000,000 $0.06 $0.20 100,000 $0.06 $0.24 75,000 $0.06 $0.24 75,000 $0.06 $0.24 9,250,000	Options Vested in Current Year Vesting date - 30/06/2011 - 30/06/2011 - 30/06/2011 - 30/06/2011 - 30/06/2011 - 30/06/2010 - 30/06/2008 - 30/06/2010 -

(f) Other transactions with Directors and Specified Executives

Fees were paid to Entrust Funds Management Ltd of $14,410. The fees related to payment for the services of Chris Mews as Company Secretary. Entrust Funds Management Ltd are considered a related entity to the Group due to the positions occupied at Entrust Funds Management Ltd by Graeme Yukich, Brad Gordon and Andrew Fry, all of whom were directors of Emerson Stewart during the reporting period.

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Corporate Governance Statement

The Company listed on the Australian Securities Exchange 25 June 2008. Prior to this date the Company formally adopted a Corporate Governance Charter in May 2008, which is designed to encourage Directors and other Emerson Stewart personnel to focus their attention on accountability, risk management and ethical conduct.

The Charter addresses each of the ASX Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice Recommendations 2003 (“Recommendations”). A copy of the Company’s Corporate Governance Charter is located on the “Corporate Governance” page of the Company’s website www.emersonstewart.com. The Company anticipates transitioning its corporate governance reporting to the ASX second edition revised recommendations for the year ending 30 June 2009 in compliance with those revised recommendations. The Corporate Governance statement set out below covers the period from the listing date to the end of the reporting period.

Principle 1: Lay solid foundations for management and oversight

Recommendation 1.1 – Formalise and disclose the functions reserved to the board and those delegated to management.

The role and responsibilities of the Board compared with those delegated to management are reflective of the Recommendations. Please refer to the Company’s Corporate Governance Charter which has been placed on its website.

The Company is not aware of any departure from Recommendation 1.1

Principle 2: Structure the Board to add value

Recommendation 2.1 – A majority of the Board should be independent directors.

The Board respects independence of thought and decision making as critical to effective governance.

Since the listing date of 25 June 2008 the majority of the Board were independent. The composition of the Board is as follows:

Steven Cole Non-Executive/Independent Chairperson Dario Amara Managing Director/Executive Director David Richardson Non-Executive Director/Independent Angelo Dabala Executive Director James Cullen Non-Executive Director/Independent

Recommendation 2.2 – The chairperson should be an independent director.

The Chairperson was an independent director.

Recommendation 2.3 – The roles of chairperson and chief executive officer should not be exercised by the same individual.

The roles of the Chairperson and the Chief Executive Officer were not exercised by the same individual.

Recommendation 2.4 – The Board should establish a nomination committee.

The Board did establish a Nomination and Remuneration Committee.

Recommendation 2.5 – Provide the information indicated in Guide to reporting on Principle 2.

Contained in the Directors’ Report section of this report are details of:

the skills, experience and expertise relevant to the position of director held by each Director in office at the date of this report;
the term of office held by each Director in office at the date of this report.

The Company’s Corporate Governance Charter empowers a director to take independent professional advice at the expense of the Company.

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The terms of office, and their status as executive/non-executive/independent, for each director for the year ending 30 June 2008 were as follows (with all directors noted as continuing as at 30 June 2008 still being in office at the date of this annual report, with the exception of Angelo Dabala, who retired 25 September 2008):

Steven Cole	non-executive/independent – 31/3/08 to 30 June 2008 (cont)
David Richardson	non-executive/independent – 31/3/08 to 30 June 2008 (cont)
James Cullen	non-executive/independent – 31/3/08 to 30 June 2008 (cont)
Dario Amara	executive – 29/1/08 to 30 June 2008 (cont)
Angelo Dabala	executive – 29/1/08 to 30 June 2008 (continued until 25 September 2008)

The Company has accepted the definition of “independence” in the Recommendations.

Members of the Board’s Nominations and Remuneration Committee, and their attendance at meetings of that committee, are as follows (a total of 1 meeting was held):

Director	Number of Meetings Eligible to Attend	Number of Meetings Attended
James Cullen Steven Cole (Chairperson) David Richardson	1 1 1	- 1 1

Principle 3: Promote ethical and responsible decision-making

Recommendation 3.1: Establish a code of conduct to guide the directors, the chief executive officer (or equivalent), the chief financial officer (or equivalent) and any other key executives as to:

3.1.1: The practices necessary to maintain confidence in the company’s integrity;

3.1.2: the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.

The Company has established formal code of conduct in the Company’s Corporate Governance Charter to guide the Directors, the CEO, the CFO (or equivalent) and other key executives with respect to the practices necessary to maintain confidence in the Company’s integrity and the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.

Recommendation 3.2: Disclose the Policy Concerning Trading in Company Securities by directors, officers and employees.

The Company’s policy concerning trading in Company securities by Directors, officers and employees is set out in the Company’s Corporate Governance Charter which has been placed on the Company’s website.

Recommendation 3.3 : Provide the information indicated in Guide to Reporting Principle 3.

There were no departures from Recommendations 3.1, 3.2 or 3.3.

Copies of the Company’s current Board Members Code of Conduct and Group Code of Conduct/Values and the Company’s Share Trading policy are publicly available on the Company website in the corporate governance section.

Principle 4: Safeguard integrity in financial reporting

Recommendation 4.1: Require the Chief Executive Officer (or equivalent) and the Chief Financial Officer (or equivalent) to state in writing to the Board that the Company’s financial reports present a true and fair view, in all material respects, of the Company’s financial condition and operational results and are in accordance with relevant accounting standards.

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The Company’s CEO and CFO have stated in writing to the Board that the Company’s financial reports present a true and fair view, in all material aspects, of the Company’s financial condition and operational results and are in accordance with relevant accounting standards.

Recommendation 4.2: The Board should establish an Audit Committee.

The Board did establish a combined Audit and Risk Management Committee.

Recommendation 4.3: Structure the Audit Committee so that it consists of :

only non-executive directors
a majority of independent directors
an independent chairperson, who is not chairperson of the Board;
at least three members.

The Audit and Risk Management Committee formed 1 May 2008,comprised the following members during the year, all of whom were non-executive and independent directors:

James Cullen (Chairman)
Steven Cole
David Richardson

Recommendation 4.4: The Audit Committee should have a formal charter.

The Company’s Audit and Risk Management Committee has a formal charter.

Recommendation 4.5: Provide the information indicated in Guide to reporting on Principle 4.

Members of the Board’s Audit and Risk Management Committee, and their attendance at meetings of that Committee were as follows (a total of 1 meeting was held):

Director	Number of Meetings Eligible to Attend	Number of Meetings Attended
James Cullen (Chairperson) Steven Cole DavidRichardson	1 1 1	- 1 1

The qualifications of the Directors on the Audit and Risk Management Committee appear in the Directors’ Report section of this report.

The Company’s Audit and Risk Management committee charter and information on procedures for the selection and appointment of the external auditor, and for the rotation of external audit engagement partners, are publicly available on the Company’s website in the corporate governance section.

Principle 5: Make timely and balanced disclosure

Recommendation 5.1: Establish written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior management level for that compliance.

The Company has established written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at senior management levels for the compliance.

Recommendation 5.2 : Provide the information indicated in Guide to reporting on Principle 5.

The Company is not aware of any departure from Recommendation 5.1 or 5.2.

The Company’s current written policies and procedures on ASX Listing Rule disclosure requirements are publicly available on the Company’s website in the corporate governance section under the heading “Release of Price Sensitive Information”.

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Principle 6: Respect the rights of shareholders

Recommendation 6.1: Design and disclose a communication strategy to promote effective communication with shareholders and encourage effective participation at general meetings.

The Company’s Corporate Governance Charter contains a section formally setting out the Company’s communication strategy with its Stakeholders including the effective use of electronic communications.

Details of the Company’s communications strategy are publicly available on the Company’s website in the corporate governance section under the heading “Communications with Stakeholders”.

Recommendation 6.2: Request the external auditor to attend the annual general meeting and be available to answer shareholder questions about the conduct of the audit and the preparation and content to the Auditor’s Report.

The external auditor is required to attend the annual general meeting and be available to answer shareholders’ questions about the conduct of the audit and the preparation and content of the Auditor’s Report.

The Company is not aware of any departure from Recommendation 6.1 or 6.2.

Principle 7: Recognise and manage risk

Recommendation 7.1: The Board or appropriate Board committee should establish policies on risk oversight and management.

The Company’s Corporate Governance Charter includes a formal policy on risk oversight and management and the Board also established the Audit and Risk Management Committee of the Board.

The Company is developing a quality system called tw3 “the way we work”, which includes strategies and process addressing these matters. In addition, the executives have also actioned a more robust system for identifying, assessing, monitoring and managing material risk throughout the organization, including internal compliance and control systems, and procedures based on AS/NZ4360.

Recommendation 7.2: The chief executive officer (or equivalent) and the chief financial officer (or equivalent) should state to the Board in writing that:

7.2.1 – the statement given in accordance with best practice recommendation 4.1 (the integrity of financial statements) is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board

7.2.2 – the company’s risk management and internal compliance and control system is operating efficiently and effectively in all material respects.

The Company’s CEO and CFO (or equivalent) provided the Board a written statement in compliance with Recommendation 4.1, and also stated to the Board that the financial statements were founded on a sound system of risk management and internal compliance and control and that the risk management and internal compliance and control system was operating efficiently and effectively in all material respects.

Recommendation 7.3 : Provide the information indicated in Guide to reporting on Principle 7.

The Company is not aware of any departure from Recommendations 7.1 or 7.2 although notes it is continuing to develop and refine its risk management and internal control processes and procedures.

Details of the Company’s risk management policy are publicly available in its Corporate Governance Charter and on the Company’s website in the corporate governance section.

Principle 8: Encourage enhanced performance

Recommendation 8.1: Disclose the process for performance evaluation of the Board, its committees and individual directors, and key executives.

Board and Director Evaluations

The Company is committed to the ongoing evaluation and development of Individual Directors, Board committees, and the Board as a whole.

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The Company has adopted policies and procedures in its Corporate Governance Charter concerning the evaluation and development of its directors, executives and Board committee. These are within the remit of the Nominations and Remuneration Committee and are facilitated by the Company Chairman. Procedures include an induction protocol and a performance management system for the Board and its directors. Each Board committee also formally reports to the Board annually on it operations in the context of its remit.

Senior Executive Evaluations

The Company’s Corporate Governance Charter contains a section formally setting out the Company’s Board and Management Performance Enhancement Policy.

As the Board in its current form has only been appointed since March 2008, and in order to give the Board a reasonable opportunity to “work together” before subjecting it to performance review, the Board agreed to defer implementation of the Company’s Performance Enhancement System until Q2 of 2009.

The Company is not aware of any departure from Recommendation 8.1.

Details of the Company’s Policy on these matters are publicly available on the Company’s website in the corporate governance section.

Principle 9: Remunerate fairly and responsibly

Recommendation 9.1: Provide disclosure in relation to the Company’s remuneration policies to enable investors to understand (i) the costs and benefits of those policies and (ii) the link between remuneration paid to directors and key executives and corporate performance.

Remuneration Policy

Executives were to receive a base salary (based on factors such as skills, experience, value to the Company and length of service), superannuation and performance incentives (including by way of short term incentive bonuses and longer term share options. The Nomination and Remuneration Committee (on reference from, and in consultation with, the CEO) was to review executive packages from time to time by reference to the Company’s performance, executive performance and comparable information from industry standards.
The Company’s Constitution provides that the remuneration of non-executive Directors will not be more than the aggregate fixed sum determined by a general meeting. The aggregate remuneration for nonexecutive Directors has been set at an amount not to exceed $250,000 per annum. The non-executive Directors are also entitled to fees or other amounts as the Board determines where they perform special duties or otherwise perform services outside the scope of the ordinary duties of a Director. Directors may also be reimbursed for reasonable expenses incurred in attending Board or committee meetings, on Company business or carrying out their duties.

Greater details of the remuneration arrangements for Directors, Officers and senior executives are contained in the Remuneration Report comprised in the Directors’ Report forming part of this Annual Report.

Recommendation 9.2: the Board should establish a remuneration committee.

The Board established a combined Nomination and Remuneration Committee. Refer reporting on Recommendation 2 above.

Recommendation 9.3: Clearly distinguish the structure of non-executive directors’ remuneration from that of executives.

The structure of non-executive remuneration is clearly distinguishable from that of executives as appears from the details provided in response to Recommendation 9.1 above.

Recommendation 9.4: Ensure that payment of equity-based executive remuneration is made in accordance with thresholds set in plans approved by shareholders.

Executive options have been incorporated into the Executive Agreements for the Executive Management team. These were established prior to the company listing and details of these Executive Agreements were set out in the Company’s IPO prospectus.

Prior to listing the company developed a employee incentive option scheme, to attract, motivate and retain employees, details of which were set out in the Company’s IPO prospectus. Options have been granted to particular employees. The terms and conditions of the options issued under the ESOP were at the discretion of the Board, in accordance with the workings of the ESOP.

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Further details of the options that have been issued to personnel are contained in the Remuneration Report on page 4.

Recommendation 9.5: Provide the information indicated in Guide to reporting on Principle 9.

Company’s Remuneration Policy

An overview of the Company’s remuneration policies is set out in the above response to Recommendation 9.1.

Remuneration Committee (names of members and attendance at meetings)

Refer to the response to Recommendation 2 above concerning the Company’s combined Nominations and Remuneration Committee.

Non-Executive Director Retirement Benefits

Non-executive directors are entitled to statutory superannuation. There are no other schemes for retirement benefits for non-executive directors.

Information Publicly Available

The Company’s Corporate Governance Charter contains a section formally setting out the charter of the Company’s Nomination and remuneration Committee. Details are publicly available on the Company’s website in the corporate governance section.

Principle 10: Recognise the legitimate interests in stakeholders

Recommendation 10.1: Establish and disclose a code of conduct to guide compliance with legal and other obligations to legitimate stakeholders.

The Company’s Corporate Governance Charter contains sections dealing with Board Members Code of Conduct, and Group Code of Conduct/Values. Copies of these are publicly available on the Company’s website in the corporate governance section.

The Company is not aware of any departure from Recommendation 10.1.

EXECUTIVE SUMMARY OF COMPLIANCE WITH RECOMMENDATIONS FOR PERIOD 25 JUNE TO 30 JUNE 2008

EXECUTIVE SUMMARY OF COMPLIANCE WITH RECOMMENDATIONS FOR PERIOD 25 JUNE TO 30 JUNE 2008	EXECUTIVE SUMMARY OF COMPLIANCE WITH RECOMMENDATIONS FOR PERIOD 25 JUNE TO 30 JUNE 2008	EXECUTIVE SUMMARY OF COMPLIANCE WITH RECOMMENDATIONS FOR PERIOD 25 JUNE TO 30 JUNE 2008	EXECUTIVE SUMMARY OF COMPLIANCE WITH RECOMMENDATIONS FOR PERIOD 25 JUNE TO 30 JUNE 2008
Recommendation #	Compliant	Non – Compliant	If not, why not?
1	✓	-	N/A
2	✓	-	N/A
3	✓	-	N/A
4	✓	-	N/A
5	✓	-	N/A
6	✓	-	N/A
7	✓	-	N/A
8	✓	-	N/A
9	-	Partial	Refer response to recommendation 9.4 above
10	✓	-	N/A

Directors’ meetings

The number of directors’ meetings and number of meetings attended by each of the directors of the Company during the financial year are:

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Director	Board Meetings	Board Meetings	Audit & Risk Committee	Audit & Risk Committee	Remuneration & Nomination Committee	Remuneration & Nomination Committee
	A	B	A	B	A	B
Dario Amara	4	4	1	1	1	1
Steven Cole	4	4	1	1	1	1
James Cullen	3	3	-	1	-	1
Angelo Dabala	3	4	-	-	-	-
Andrew Fry	2	2	-	-	-	-
Bradley Gordon	3	3	-	-	-	-
David Richardson	3	3	1	1	1	1
Graeme Yukich	3	3	-	-	-	-

A – Number of Meetings attended B – Number of meetings held during the time the director held office during the year

Dividends

Dividends paid by Emerson Stewart Limited to members since the end of the previous financial year were $0.30 per share paid 11/12/07 and $0.25 per share paid 25/1/08.

Events subsequent to reporting date

A parcel of 250,000 options was issued to employees after 30 June 2008, vesting June 2010.

Since the end of the financial year, the Directors are not aware of any other matter or circumstance not otherwise dealt with in this report or the financial statements that has significantly or may significantly affect the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity in subsequent financial years.

Directors’ interests

At the date of this report, the Directors have relevant interests in Securities of the Company as follows:

	Number of Shares
Steven Cole	500,000
James Cullen	150,000
David Richardson	500,000
Dario Amara	34,375,000
Angelo Dabala (resigned 25 September 2008)	31,250,000

Indemnification and insurance of officers

During the financial year the company paid insurance premiums to insure the directors, secretaries and executive officers of the Company and its subsidiary companies.

The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the directors and officers in their capacity as directors and officers of Emerson Stewart Group Limited and its subsidiary companies, and any other payments arising from liabilities incurred by the officers in connection with such proceedings, other than where such liabilities arise out of conduct involving wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else to cause detriment to the company.

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Non-audit services

During the year PKF, the Company’s auditor, has performed other services in addition to their statutory duties. The board has considered the non-audit services provided during the year and is satisfied that the provision of those non-audit services during the year by the auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reason:

The non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in management or decision making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.

Details of the amounts paid to the auditor of the Company, PKF, for audit and non-audit services provided during the year are set out below.

	Consolidated Group	Consolidated Group		Parent Entity	Parent Entity
	2008	2007		2008	2007
	$000’s	$000’s		$000’s	$000’s
Audit and review of financial reports		22	6		22	5
Services other than statutory audit
Preparation of Independent Accountant Report on	109		-	109		-
Historical and Forecast Financial Information for the
Prospectus issued 8 May 2008.

The Lead auditor’s independence declaration is set out on page 15 and forms part of the Directors’ report for financial year ended 30 June 2008.

Proceedings on behalf of the Company

There are no proceedings on behalf of the Company under Section 237 of the Corporations Act 2001 in the financial year or at the date of the report.

Environmental Regulation and Performance

In the majority of Emerson Stewart’s business situations, Emerson Stewart is not the owner or operator of plant and equipment requiring environmental licences. Emerson Stewart typically assists its clients with the management of their environmental responsibilities, rather than holding those responsibilities directly.

The Company is not aware of any breaches by Emerson Stewart of any environmental regulations under the laws of the Commonwealth of Australia, or of a State or Territory.

Cash used in a way consistent with objectives

Emerson Stewart listed on the ASX 25 June 2008. From that date to the end of the financial period the proceeds raised from the Initial Public Offering have been used in a manner consistent with the Company’s objectives, in accordance with listing rule 4.10.19.

Rounding Off

The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with that class Order, amounts in the financial report and director’s report have been rounded off to the nearest thousand dollars, unless otherwise stated.

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AUDITOR'S INDEPENDENCE DECLARATION

As lead auditor for the audit of Emerson Stewart Group Limited for the year ended 30 June 2008, I declare that to the best of my knowledge and belief, there have been:

(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Emerson Stewart Group Limited and the entities it controlled during the year.

PKF

Chartered Accountants

Conley Manifis Partner

Dated in Perth, Western Australia on this 30[th] day of September 2008

PKF is a national association of independent chartered accounting and consulting firms, each trading as PKF. PKF Australia Ltd is also a member of PKF International, an association of legally independent chartered accounting and consulting firms.

Liability limited by a scheme approved under Professional Standards Legislation

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DIRECTORS' DECLARATION

The directors of Emerson Stewart Group Limited declare that:

(a) in the directors’ opinion the financial statements and notes on pages 17 to 38, and the remuneration disclosures that are contained in the Remuneration report in the Directors’ report, set out on pages 4 to 6 are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the company’s and the consolidated entity’s financial position as at 30 June 2008 and of their performance, for the financial year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and Corporations Regulations 2001.
(b) the financial report also complies with International Financial Reporting Standards as disclosed in note 1 and
(c) the remuneration disclosures that are contained in the Remuneration report in the Directors’ report comply with Australian Accounting Standard AASB 124 Related Party Disclosures, the Corporations Act 2001 and the Corporations Regulations 2001; and
(d) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

The directors have been given the declarations by the chief executive officer and chief financial officer for the financial year ended 30 June 2008, required by Section 295A of the Corporations Act 200.

Signed in accordance with a resolution of the directors.

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.......................................................

Steven Cole Chairman Perth, 30 September 2008

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INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2008

Note Consulting revenue 3 Cost of sales Gross profit Financial income 3 Marketing expenses Occupancy expenses Administration expenses Finance costs 4 Depreciation and amortisation expenses Cost on Acquisition 4 Profit/(Loss) before income tax Income tax benefit/ (expense) 5 Net Profit After Tax Profit attributable to members of the parent entity/ (Loss for the year) Profit (loss) per share attributable to ordinary equity holders of the company: Note Basic earnings (loss) per share (cents per share) 19 Diluted earnings (loss) per share (cents per share) 19 Dividends per share: Dividend paid 11/12/07 (cents per share) 16 Dividend paid 25/1/08 (cents per share) 16	Consolidated Group Parent Entity 2008 2007 2008 2007 $000’s $000’s $000’s $000’s 10,461 4,407 - - (6,744) (3,384) - -
	3,717 1,023 - - 142 5 189 56 (29) (14) - - (114) (58) - - (1,400) (596) (95) (120) (2) (2) - - (23) (15) - - (744) - (400) -
	1,547 342 (306) (64) (763) (100) 63 -
	784 242 (369) (64)
	784 242 (369) (64)
	2008 2007 1.107 0.387 1.107 0.387 2008 2007 2008 2007 30.0 - - - 25.0 - - -

The accompanying notes form part of these financial statements.

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BALANCE SHEET AS AT 30 JUNE 2008

BALANCE SHEET AS AT 30 JUNE 2008
Note Current Assets Cash and cash equivalents 6 Trade and other receivables 7 Work in progress Prepayments Total Current Assets Non Current Assets Plant and equipment 8 Deferred tax assets 13 Other financial assets 9 Intangible assets 10 Total Non Current Assets Total Assets Current Liabilities Trade and other payables 11 Short term borrowings 12 Current tax liabilities Short-term provisions 14 Total Current Liabilities Non Current Liabilities Provision for employee benefits 14 Deferred tax liability 13 Total Non Current Liabilities Total Liabilities Net Assets Equity Share capital 15 Retained earnings/ (Accumulated losses) Total Equity	Consolidated Group Parent Entity 2008 2007 2008 2007 $000’s $000’s $000’s $000’s 10,729 240 10,487 2,099 2,073 425 80 18 124 357 - - 52 3 - -
	12,978 1,025 10,567 2,117
	76 38 - - 229 15 186 - - - 10,000 - 44 2 - -
	349 55 10,186 -
	13,327 1,080 20,753 2,117
	1,805 732 580 26 - 19 - - 348 8 80 - 84 16 - -
	2,237 775 660 26
	9 - - - 55 107 - -
	63 107 - -
	2,300 882 660 26
	11,027 198 20,093 2,091
	10,865 20 20,526 2,155 162 178 (433) (64)
	11,027 198 20,093 2,091

The accompanying notes form part of these financial statements.

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STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2008

Consolidated Group Note Balance at 1 July 2006 Profit attributable to members of parent entity Balance at 1 July 2007 Profit attributable to members of parent entity Dividends Paid 16 Costs of Capital Raising Tax Effect of Capital Raising Success Fee on Acquisition of Emerson Stewart as shares Share based payment Proceeds from Capital Raising Cost of reverse business combination 22 Balance at 30 June 2008 Parent Entity Balance at 1 July 2007 Profit/(loss) attributable to members of parent entity Costs of Capital Raising Tax Effect of Capital raising Success Fee on Acquisition of Emerson Stewart as shares IPO Raising Shares issued for Reserve Acquisition Share based payment Share Placement Balance at 30 June 2008	Ordinary Share Retained Earnings (accumulated losses) Total $000’s $000’s $000’s 20 (64) (44) - 242 242
	20 178 198
	- 784 784 - (800) (800) (706) - (706) 169 169 400 - 400 8 - 8 8,000 - 8,000 2,974 - 2,974
	10,865 162 11,027
	2,155 (64) 2,091 - (369) (369) (706) - (706) 169 - 169 400 - 400 8,000 - 8,000 10,000 - 10,000 8 - 8 500 - 500
	20,526 (433) 20,093

The accompanying notes form part of the financial statements.

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CASH FLOW STATEMENT FOR THE YEAR ENDED	CASH FLOW STATEMENT FOR THE YEAR ENDED	30 JUNE 2008
	Note	Consolidated	Group	Parent	Entity
		2008	2007	2008	2007
		$000’s	$000’s	$000’s	$000’s
Cash Flow from Operating Activities
Receipts from customers		10,169	3,866	-	-
Payments to suppliers and employees		(8,858)	(3,681)	(132)	(105)
Income Tax Paid		(525)	-	-	-
Interest received		142	5	189	50
Net cash provided by (used in) operating	17	928	190	57	(55)
activities
Cash Flows from Investing Activities
Proceeds from sale of property, plant and		-	1	-	-
equipment
Purchase of Intangibles		-	(3)	-	-
Purchase of property, plant and	8,10	(103)	(9)	-	-
equipment
Cash Balance acquired from reverse	22	2,654	-	-	-
acquisition
Net cash provided by (used in) investing		2,551	(11)	-	-
activities
Cash Flow From Financing Activities
Loans to related parties		(19)	(14)	-	-
Proceeds from issue of shares		8,000	-	8,500	2,158
Payments from issue of shares		(169)	-	(169)	(4)
Dividends paid		(800)	-	-	-
Interest Paid		(2)	-	-	-
Net cash provided by (used in) financing		7,010	(14)	8,331	2,154
activities
Net increase in cash held		10,489	165	8,388	2,099
Cash at beginning of year		240	75	2,099	-
Cash at end of year	6	10,729	240	10,487	2,099

The accompanying notes form part of these financial statements.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

This general purpose financial report has been prepared in accordance with the measurement requirements of Australian Accounting Standards and Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The financial report is presented in Australian dollars and all values are rounded to the nearest thousand dollars ($’000) unless otherwise stated under the option available to the Company under ASIC Class Order 98/100. The Company is an entity to which the class order applies.

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

Statement of Compliance

The financial report of the Company complies with International Financial Reporting Standards (IFRS) and interpretations issued by the International Accounting Standards Board.

Basis of Preparation

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

Reporting Basis and Conventions

The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

Adoption of New Accounting Standards

Since 1 July 2007, the consolidated entity has adopted the following standards and interpretations which are mandatory for annual periods beginning on or after 1 January 2007.

AASB 7 “Financial Instruments: Disclosure”;

AASB 2005-10 “Amendments to Australian Accounting standards (AASB 132, 101, 114, 117, 133, 139, 1, 4, 1023 and 1038); and

AASB 2007-4 “Amendments to Australian Accounting Standards arising from ED151 and Other Amendments”.

Adoption of these standards affected only disclosures and did not have any effect on the financial position or performance of the consolidated entity.

New standards not yet applicable

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective have not been adopted by the Group for the annual reporting period ended 30 June 2008. These are not expected to have a material impact on the Group’s financial report in subsequent reporting periods.

The Group has early adopted AASB 3 amendments which permit the expensing of costs associated directly with business combinations.

Accounting Policies

a. Principles of Consolidation

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

A controlled entity is listed in Note 24 to the financial statements and has a June financial year end.

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

Where controlled entity has entered the consolidated group during the year, its operating results have been included from the date control was obtained.

b. Income Tax

The charge for current income tax expenses is based on the profit for the year adjusted for any nonassessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted by the balance sheet date.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

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

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

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

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

Emerson Stewart Group Limited and its wholly-owned Australian subsidiaries Emerson Stewart Pty Ltd and Xemi Pty Ltd have formed an income tax consolidated group under the Tax Consolidation Regime. Each entity in the group recognises its own current and deferred tax liabilities, except for any deferred tax liabilities resulting from unused tax losses and tax credits, which are immediately assumed by the parent entity. The current tax liability of each group entity is then subsequently assumed by the parent entity. The group notified the Tax office that it had formed an income tax consolidated group to apply from 29 January 2008.

c. Work in progress

Work in progress in the financial statements is measured with the hours spent by the employees at the per diem rates.

d. Plant and Equipment

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

Plant and equipment are measured on the cost basis less depreciation and impairment losses.

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets’ employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

Depreciation

The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding freehold land, is depreciated on a straight line basis over their useful lives to the consolidated group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

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

Class of Fixed Asset	Depreciation Rate
Plant and equipment	7.5 – 50%

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

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in the income statement. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.

e.

Financial Instruments

Recognition

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

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

instruments are measured as set out below.

Financial assets at fair value through profit and loss

A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management and within the requirements of AASB 139: Financial Instruments: Recognition and Measurement. Derivatives are also categorised as held for trading unless they are designated as hedges. Realised and unrealised gains and losses arising from changes in the fair value of these assets are included in the income statement in the period in which they arise.

Loans and receivables

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

Held-to-maturity investments

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

Available-for-sale financial assets

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

Financial liabilities

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

Derivative instruments

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

Fair value

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

Impairment

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

f. Impairment of Assets

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

Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.

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

g. Employee Benefits

Provision is made for the company’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

h. Provisions

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

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

reliably measured.

i. Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.
j. Revenue
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.
Revenue from the rendering of a service is recognised upon the delivery of the service to the customers.
All revenue is stated net of the amount of goods and services tax (GST).
k. Goods and Services Tax (GST)

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

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

l. Comparative Figures

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

m. Reverse Acquisition

Emerson Stewart Limited, legal subsidiary, having been identified as the acquirer pursuant to Accounting Standard AASB 3, was responsible for the reverse acquisition of the Company and, as required by the Standard, the business combination has been accounted for by applying the purchase method. The statements have been prepared based on the early adoption of AASB 3 ‘Business Combinations’.

n. Equity

Issued capital represents the amount of consideration received for shares issued by the Group. Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax benefit.

o. Intangible Asset

Identifiable intangible assets

The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised over the useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for prospectively by changing the amortization period or method, as appropriate, which is a change in accounting estimate. The amortisation expense on intangible assets with finite lives is recognised in profit or loss. The amortisation period is between three to 15 years. Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash generating unit level. Such intangible assets are not amortised. The useful life of an intangible asset with an indefinite life is reviewed each reporting period to determine whether indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from indefinite to finite is accounted for as a change in an accounting estimate and is thus accounted for on a prospective basis.

Critical Accounting Estimates and Judgments

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

Key estimates — Impairment

The group assesses impairment at each reporting date by evaluating conditions specific to the group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.

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Note 2: Financial Risks

Overview

The Company’s principal financial instruments comprise receivables, payables and cash and short term deposits. The Company has exposure to the following risks from its use of financial instruments:

credit risk;
liquidity risk; and
interest rate risk.

This note presents information about the Company’s exposure to each of the above risks, its objectives, policies and processes for measuring and managing risk, and the management of capital. Quantitative disclosures are included throughout this financial report.

The Board has overall responsibility for the establishment and oversight of the risk management framework. The Board has established the Audit and Risk Committee, which is responsible for approving and monitoring risk management policies. The Committee reports regularly to the Board on its activities.

Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Committee also oversees how management monitors compliance with the Company’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.

The risk exposures and the risk management strategies are being disclosed in Note 26.

Capital Management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board monitors the return on capital, which the Company defines as net operating income divided by total shareholders’ equity. The Board will also monitor the level of dividends to ordinary shareholders.

There were no changes in the Company’s approach to capital management during the year. Neither the Company nor any of its subsidiaries is subject to externally imposed capital requirements.

Note 3: Revenue

Note 3: Revenue
	Consolidated Group		Parent Entity
	2008	2007	2008	2007
	$000’s	$000’s	$000’s	$000’s
Operating Activities:
Services Revenue	10,461 4,407			-	-
Interest Received	142 5		189		56
Total Revenue	10,603 4,412		189		56
Note 4: Profit Before Income Tax Includes the Following		Expenses
	Consolidated Group		Parent Entity
	2008	2007	2008	2007
	$000’s	$000’s	$000’s	$000’s
Expenses
Finance costs:
Shareholders		- 2		-	-
Interest Expense		2 -		-	-
Total finance costs		2 2		-	-

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Note 4: Profit Before Income Tax Includes the Following Expenses

Employee Benefits Total Employee Benefits Cost on Acquisition: Impairment of goodwill from reverse acquisition Shared based success fee for acquisition	Consolidated Group Parent Entity 2008 2007 2008 2007 $000’s $000’s $000’s $000’s	Consolidated Group Parent Entity 2008 2007 2008 2007 $000’s $000’s $000’s $000’s
	3,232 1,212 35	-
	3,232 1,212 35	-
	344 - - 400 - -	- -
	744 - -	-

Note 5: Income Tax Expense

Note 5: Income Tax Expense
Note	Consolidated Group			Parent Entity
	2008	2007		2008	2007
a.	$000’s	$000’s		$000’s	$000’s
The components of tax expense comprise:
Current tax	851		16	80	-
Deferred tax	(88)		95	(17)	-
Recoupment of prior year tax losses		-	(8)	-	-
(Unused tax losses not recognised as		-	-	-	-
DTA)
Recognition of DTA in respect of prior		-	(3)	-	-
years
Income tax expense/ (benefit) reported	763		100	63	-
in the income statements
b.
The prima facie tax on profit from ordinary activities	before income tax is reconciled to the income tax as
follows:
Prima facie tax payable on profit from ordinary activities before		income tax at	30% (2007: 30%)
consolidated group	465		103	-	-
parent entity		-	-	(92)	(19)
Add: Tax effect of:
other non-allowable/ assessable items	277		8	157	-
adjustment to DTA on tax consolidation		20	-	-	20
Less: Tax effect of:
tax losses not brought to account		-	-	-	-
recoupment of prior year tax losses &		-	(11)	(2)	-
DTA not previously brought to account
Income tax expense/ (benefit)	763		100	63	-
attributable to entity

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Note 5: Income Tax Expense (cont) Note Unrecognised Deferred Tax Assets Deferred tax assets have not been recognised in respect of the following items: Deductible temporary difference Tax losses	Consolidated Group Parent Entity 2008 2007 2008 2007 $000’s $000’s $000’s $000’s - - - - - - - 20
	- - - 20

Note 6: Cash And Cash Equivalents

Note 6: Cash And Cash Equivalents
	Consolidated	Group	Parent Entity
	2008	2007	2008	2007
	$000’s	$000’s	$000’s	$000’s
Current
Cash at bank and in hand	10,729	240	10,487	2,099
	10,729	240	10,487	2,099
Reconciliation of cash
Cash at the end of the financial year as shown in the cash flow statement is reconciled			to items in the balance
sheet as follows:
Cash and cash equivalents	10,729	240	10,487	2,099
	10,729	240	10,487	2,099

Note 7: Trade and Other Receivables

Note 7: Trade and Other Receivables
Trade receivables GST Receivable Interest Receivable	Consolidated Group Parent Entity 2008 2007 2008 2007 $000’s $000’s $000’s $000’s 1,993 425 - - 80 - 80 11 - - - 6
	2,073 425 80 17

Note 8: Plant And Equipment

Note 8: Plant And Equipment
Plant and equipment: At cost Accumulated depreciation Total plant and equipment	Consolidated Group Parent Entity 2008 2007 2008 2007 $000’s $000’s $000’s $000’s 115 61 - - (39) (23) - -
	76 38 - -

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Note 8: Plant And Equipment (cont)

Note 8: Plant And Equipment (cont)
Movements in Carrying Amounts Movement in the carrying amounts for each class of plant and equipment Consolidated Group: Balance at start of period Additions Disposals Depreciation expense Balance at end of period Note 9: Other Financial Assets Investments in wholly owned subsidiary Note 10: Intangible Assets Computer software Cost Accumulated amortisation Net carrying value Note 11: Trade And Other Payables Current Unsecured liabilities Trade payables Sundry payables and accrued expenses		Consolidated Group Parent Entity 2008 2007 2008 2007 $000’s $000’s $000’s $000’s 38 44 - - 55 9 - - (1) (1) - - (16) (14) - -
		76 38 - -
		Consolidated Group Parent Entity 2008 2007 2008 2007 $000’s $000’s $000’s $000’s - - 10,000 -
		- - 10,000 -
		Consolidated Group Parent Entity 2008 2007 2008 2007 $000’s $000’s $000’s $000’s 51 3 - - (7) (1) - - 44 2 - - Consolidated Group Parent Entity 2008 2007 2008 2007 $000’s $000’s $000’s $000’s 1,007 403 461 22 798 329 119 4
		1,805 732 580 26

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Note 12: Borrowings

Note 12: Borrowings
Current Shareholders loans Note 13: Deferred Tax Consolidated Group Deferred Tax Liability Other Balance at 30 June 2007 Other Balance at 30 June 2008 Deferred Tax Assets Provisions Other Balance at 30 June 2007 Provisions Other Balance at 30 June 2008 Parent Entity Deferred Tax Liability Other Balance at 30 June 2007 Other Balance at 30 June 2008 Deferred Tax Assets Provisions Other Balance at 30 June 2007 Provisions Other Balance at 30 June 2008	Consolidated Group Parent Entity 2008 2007 2008 2007 $000’s $000’s $000’s $000’s - 19 - - - 19 - - Opening Balance Charged to Income Set off to tax asset/ liability Not brought to account (Reinstated) Closing Balance - - - - -	Consolidated Group Parent Entity 2008 2007 2008 2007 $000’s $000’s $000’s $000’s - 19 - -
		- 19 - -
	- 107 - - 107
	- (52) - - (52)
	- 55 - - 55
	- 10 - 1 11 2 2 4
	- 12 - 3 15
	- 26 - - 26 - 188 - - 188
	- 226 - 3 229
	Opening Balance Charged to Income Set off to tax asset/ liability Not brought to account (Reinstated) Closing Balance - - - - -
	- - - - -
	- - - - -
	- - - - -
	- - - - - - - - - -
	- - - - -
	- 1 - - 1 - 185 185
	- 186 - - 186

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Note 14: Provisions

Note 14: Provisions
Note 15: Issued Capital 4 fully paid A, B, C, and D class ordinary shares 1,000,000 (2006: 1,000,000) ordinary shares -December 2006 -February 2007 -January 2008, Purchaser shares issued at $0.16 per share -January 2008 – issued at $0.16 per share - February 2008 – issued at $0.16 per share - February 2008 – issued at $0.16 per share - June 2008 – issued at $0.20 per share Cost of reverse business combination Issue costs set off against equity Balance at Reporting Date Current Employee Benefits: Opening balance at 1 July 2007 Additional provisions raised during the year Balance at end of period Non Current Employee Benefits: Opening balance as at 1 July 2007 Additional provisions raised during the year Balance at end of period Parent Entity Opening balance at 1 July 2007 Additional provisions raised during the year Balance at end of period		Consolidated Group Parent Entity 2008 2007 2008 2007 $000’s $000’s $000’s $000’s 16 3 - - 68 13 - -
		84 16 - -
		- - - - - - - - 9 - - -
		9 - - -
		- - - - - - - -
		- - - -
		Consolidated Group Parent Entity 2008 2007 2008 2007 $000’s $000’s $000’s $000’s 20 20 - - - - - - 400 - - - - - 4 2,154 10,000 500 400 4 2,154 - - - 8 - 8 - 8,000 - 8,000 - 2,974 - - - (537) - (537) (3)
		10,865 20 20,526 2,155

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Note 15: Issued Capital (cont)

Note 15: Issued Capital (cont)
Ordinary Shares At the beginning of reporting period Shares acquired through reverse acquisition Shares exchanged in reverse acquisition Shares issued during the year December 2006 February 2007 - January 2008 – Purchaser Shares, issued at $0.016 per share - January 2008 – issued at $0.16 per share - February 2008 – issued at $0.16 per share - February 2008 – issued at $0.16 per share - June 2008 – issued at $0.20 per share At reporting date	Consolidated Group Parent Entity 2008 2007 2008 2007 No. No. No. No. 1,000,004 1,000,004 15,462,500 - 15,462,500 - - - (1,000,004) - - - - - 62,500,000 - - - - - 62,500,000 2,000,000 13,462,500 - 3,125,000 - 3,125,000 - 2,500,000 - 2,500,000 - 46,875 - 46,875 - 40,000,000 - 40,000,000 -
	123,634,375 1,000,004 123,634,375 15,462,500

Ordinary Shares
At the beginning of reporting period
Shares acquired through reverse acquisition
Shares exchanged in reverse acquisition
Shares issued during the year
December 2006
February 2007
- January 2008 – Purchaser Shares, issued at
$0.016 per share
- January 2008 – issued at $0.16 per share
- February 2008 – issued at $0.16 per share
- February 2008 – issued at $0.16 per share
- June 2008 – issued at $0.20 per share
At reporting date

Consolidated Group
Parent Entity
2008
2007
2008
2007
No.
No.
No.
No.
1,000,004
1,000,004
15,462,500
-
15,462,500
-
-
-
(1,000,004)
-
-
-
-
-
62,500,000
-
-
-
-
-
62,500,000
2,000,000
13,462,500
-
3,125,000
-
3,125,000
-
2,500,000
-
2,500,000
-
46,875
-
46,875
-
40,000,000
-
40,000,000
-

123,634,375
1,000,004 123,634,375
15,462,500

Note 16: Dividends

Dividends paid during the year were $0.30 per share paid 11/12/07 and $0.25 per share paid 25/1/08, which was prior to the IPO process and subsequent listing on the ASX on 25 June 2008.

Dividends Paid and Proposed Declared and paid during the year: Dividends on ordinary shares: Final franked dividend for 2007: 0 cents (2006: 0 cents) Interim franked dividend for 2008: 0.55 cents (2007: 0 cents) Proposed for approval at AGM (not recognised as a liability as at 30 June): Dividends on ordinary shares: Final franked dividend for 2008: 0 cents (2007: 0 cents)	Consolidated Group Parent Entity 2008 2007 2008 2007 $000’s $000’s $000’s $000’s - - - - 800 - 800 -
	800 - 800 - - - - -

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Note 16: Dividends (cont)

Note 16: Dividends (cont)
	Consolidated Group		Parent Entity
	2008	2007	2008	2007
	$000’s	$000’s	$000’s	$000’s
Franking credit balance
The amount of franking credits available for the subsequent
financial year are:
- Franking account balance as at the end of the	190	-	190	-
financial year at 30% (2007: 30%)
- Franking credits that will arise from the payment of	348	-	348	-
income tax payable as at the end of the financial
year
				-
-Franking debits that will arise from the payment of dividends
as at the end of the financial year
-Franking credits that will arise from the receipt of dividends	-	-	-	-
recognised as receivables at the reporting date
-Franking credits that the entity may be prevented from	-	-	-	-
distributing in the subsequent financial year
	538	-	538	-
The amount of franking credits available for future reporting
periods:
-impact on the franking account of dividends proposed or	-	-	-	-
declared before the financial report was authorised for issue
but not recognised as a distribution to equity holders during
the period. The tax rate at which paid dividends have been
franked is 30% (2007: 30%).	538	-	538	-
Dividends proposed will be franked at the rate of 30% (2007:
30%).

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Note 17: Cash Flow Information

Note 17: Cash Flow Information
	Consolidated Group		Parent	Entity
	2008	2007	2008	2007
	$000’s	$000’s	$000’s	$000’s
Reconciliation of Cash Flow from Operations with Profit after Income Tax
Profit/ (Loss) after income tax	784	242	(369)	(64)
Non-cash flows in profit
Depreciation	23	15	-	-
Interest not paid in cash		2	-	-
Share based success fee for acquisition	400	-	400	-
Impairment of goodwill	344		-	-
Share based expenses	7	-	7	-
Loss in disposal of P&E	1	1	-	-
Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries
(Increase)/ decrease in trade and term debtors	(1,629)	(185)	(45)	(17)
(Increase)/decrease in other assets	(49)	7	-	-
(Increase)/decrease in work in progress	233	(357)	-	-
Increase/(decrease) in trade creditors	508	289	(1)	26
Increase/(decrease) in sundry payables & accruals	-	(45)	-	-
Increase/(decrease) in provisions	76	13	-	-
Increase /(decrease) in tax movement	230	206	65	-
Net cash provided by (used in) operating activities	928	190	57	(55)

Note 18: Events After the balance

A parcel of 250,000 options was issued to employees after 30 June 2008, vesting June 2010.

No other matter or circumstances has arisen since the end of the financial period which has significantly affected, or may affect the operations of the consolidated group (“the Group”), the results of those operations or the state of affairs of the Group in the financial years subsequent to the financial period ended 30 June 2008.

Note 19: Earnings per Share

Note 19: Earnings per Share
	2008	2007
	$000’s	$000’s
Earnings used to calculate basic EPS	784	242
Weighted average number of ordinary shares outstanding during the period used in calculating basic EPS	70,800,347	62,500,000
Basic Earnings per share (cents per share)	1.107	0.387

Note 20: Contingent Liabilities and Contingent assets

The company is currently negotiating a claim brought against the company by a former employee in relation to their past employment. The company made a provision in the accounts for a possible settlement. The amount is based on legal advice and discussions with the claimant to date. The directors believe it represents the maximum potential financial amount that the company may be liable for.

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Note 21: Segment Reporting

The consolidated group operates predominantly in one business and geographical segment being providing project implementation services across the mining and metals, energy, and infrastructure sectors in Australia.

Note 22: Business combinations effected during the period

Combining entities comprised Howard Capital Group Ltd (renamed Emerson Stewart Group Limited) and Emerson Stewart Limited.

The acquisition date was 31 January 2008. 100% of shares were acquired by Emerson Stewart Limited.

Cost of Combination	$000’s
Shares	2,974
Costs directly attributable to combination	744
Shares issued:
Number	297,401
Fair Value	$2,974,000

Fair Value of the acquisition was determined by the directors.

Amounts of classes of acquiree's assets, liabilities and contingent liabilities recognised at acquisition date:

Current Assets Assets Total Current Assets Non Current Assets Deferred Tax Assets Total Non Current Assets Current Liabilities Trade & other payables Short term provisions Current Tax Liabilities Total Current Liabilities Net Assets	Carrying Amounts immediately before Amounts Recognised at Acquisition Date $000’s $000’s 2,654 2,654 2,654 2,654 8 8 8 8 6 6 4 4 22 22 32 32
	2,630 2,630

The cash acquired by Emerson Stewart through the acquisition of Howard Capital Group Ltd was $2,654,334.

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Note 23: Controlled Entities

The following entities are consolidated:

The following entities are consolidated:
	Ownership Interest
Name of Entity Country of Incorporation	2008 2007 % %
Parent Entity Emerson Stewart Group Limited Australia
Controlled Entity Emerson Stewart Pty Ltd (formerly Emerson Stewart Limited) Australia Xemi Pty Ltd Australia	100 - 100 -

Note 24: Commitments

Total future minimum lease payments under non- cancellable operating leases:

Not later than one year Later than one year but not later than five years Later than five years Total	Consolidated Group Parent Entity 2008 2007 2008 2007 $000’s $000’s $000’s $000’s 234 - - - 53 - - - - - - -
	287 - - -

Note 25: Related Party Transactions

Note	Consolidated Group	Consolidated Group	Parent	Entity
	2008	2007	2008	2007
	$000’s	$000’s	$000’s	$000’s

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

The following shareholders have made loans to the company. These loans are on the terms of commercial interest payable, unsecured and at call.

ayable, unsecured and at call.
- Dario Amara - Redsdale Pty Ltd	- 9 - - - 10 - -
	- 19 - -

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Note 26: Financial Instruments

As at the reporting date, the Consolidated and Parent entity's financial instruments comprise of (i) cash and cash equivalents; (ii) trade and other receivables; and (iii) trade and other payables.

Fair value of financial instruments

The fair values and carrying amounts of various financial instruments recognised at reporting date are noted below:

below:
Consolidated Group Note Cash and cash equivalents 6 Trade and other receivables 7 Trade and other payables 11 Short term loans 12	2008 2007 Carrying Amount Fair values Carrying Amount Fair values $000’s $000’s $000’s $000’s 10,729 10,729 240 240 2,073 2,073 425 425 (1,805) (1,805) (732) (732) - - (19) (19)
	10,997 10,997 (86) (67)

Parent Entity Note Cash and cash equivalents 6 Trade and other receivables 7 Trade and other payables 11	2008 2007 Carrying Amount Fair values Carrying Amount Fair values $000’s $000’s $000’s $000’s 10,487 10,487 2,099 2,099 80 80 18 18 (580) (580) (26) (26)
	9,987 9,987 2,091 2,091

The carrying amounts of the financial instruments are reasonable approximation of their fair values, on account of their short maturity cycle.

Risk management strategies

The entity is primarily exposed to (i) credit risks; (ii) liquiditiy risks; and (iii) interest rate risks. The nature and extent of risk exposure, and the entity's risk management strategies are noted below.

Credit risks

The entity's credit risks arise from failure of the customers to pay for the services rendered per the terms of the service contract.

Credit risk is kept continually under review and managed to reduce the incidence of material losses being incurred by the non-receipt of monies due.

Credit risk is managed through:

(a) monitoring and follow-up of accounts receivable on a regular basis; and

(b) follow up on overdue customer balances.

Bad debts are written off in the year in which they are identified. Specific provisions are made against identified doubtful debts. An assessment of expected losses are made based on past experience and customer payment history patterns.

There has been no change in the above policy since prior year.

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Note 26: Financial Instruments (cont)

The entity's maximum exposure to credit risk is:

The entity's maximum exposure to credit risk is:
Trade receivable GST receivable Interest receivable	Consolidated Group Parent Entity 2008 2007 2008 2007 $000’s $000’s $000’s $000’s 1,993 425 - - 80 - 80 11 - - - 6
	2,073 425 80 17

The entity does not hold collateral against the credit risks. However, the management considers the credit risks to be low on account of the risk management policy noted above.

The trading terms generally offer 30 days credit from the date of invoice. As of the reporting date, none of the receivables have been subject to renegotiated terms.

The ageing analysis of past due trade receivables at reporting date are:

Consolidated Group 0 - 30 days Past due 31 - 60 days Past due 61 - 90 days More than 90 days Total	2008 2007 $000’s $000’s 1,496 407 419 18 71 - 7 -
	1,993 425

The entity does not hold collaterals in relation to past due trade receivables.

The entity is also credit risks arising from the failure of financial institutions that hold enity's cash and cash equivalents. However the management considers this risk to be negligible.

Liquidity risks:

Liquidity risk is the risk that the entity will encounter difficulties to meet its contratual obligations arising from the financial liabilities.

Liquidity risk is constantly monitored and managed through forecasting short term operating cash requirements and the committed cash outflows on financial liabilities.

There has been no change in the above policy since prior year.

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Note 26: Financial Instruments (cont)

Maturity analysis of contractual undiscounted cash-flows on financial liabilities at reporting date.

2008 Trade and other payables 2007 Trade and other payables Short term loans	Consolidated Group Parent Entity $000’s $000’s $000’s $000’s < 3 months Total < 3 months Total (1,805) (1,805) (580) (580)
	(1,805) (1,805) (580) (580)
	(732) (732) (26) (26) (19) (19) - -
	(751) (751) (26) (26)

Interest rate risk

Interest rate risk is the risk that the fair values and cash-flows of the entity's financial instruments will be affected by changes in the market interest rates.

The entity's cash and cash equivalents are exposed to interest rate risks.

Sensitivity of the entity's financial instruments to changes in market interest rates:

The sensitivity of the entity's financial instruments to a 1% movement in market interest would have the following impact on the profits and equity:

following impact on the profits and equity:
Consolidated Group Cash and cash equivalents Parent Entity Cash and cash equivalents	2008 2007 +1% -1% +1% -1% $000’s $000’s $000’s $000’s 107 (107) 2 (2)
	105 (105) 21 (21)

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INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF EMERSON STEWART GROUP LIMITED

Report on the Financial Report

We have audited the accompanying financial report of Emerson Stewart Group Limited, which comprises the balance sheet as at 30 June 2008, and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies and other explanatory notes and the directors’ declaration for both Emerson Stewart Group Limited (“the Company”) and the consolidated entity. The consolidated entity comprises the entity and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

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

Auditor’s Responsibility

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

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

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

Liability limited by a scheme approved under Professional Standards Legislation

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Independence

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

Auditor’s Opinion

In our opinion:

(a) the financial report of Emerson Stewart Group Limited is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the entity’s and consolidated entity’s financial position as at 30 June 2008 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 4 to 6 of the directors’ report for the year ended 30 June 2008. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s Opinion

In our opinion the Remuneration Report of Emerson Stewart Group Limited for the year ended 30 June 2008, complies with section 300A of the Corporations Acts 2001.

PKF

Chartered Accountants

Conley Manifis Partner

Dated at Perth, Western Australia this 30[th] day of September 2008

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Additional Information per ASX Listing Rules [Unaudited]

Shareholder Information as at 19 September 2008

				% of
				Issued
		Shareholder	Shares	Capital
1	Amara Dario Angelo		34,375,000	27.8%
2	Redsdale Pl		31,250,000	25.3%
3	Argonaut		2,500,000	2.0%
4	G & F Yukich Super PL		1,070,000	0.8%
5	K & T Swick PL		750,000	0.6%
6	Areley Kings PL		696,000	0.5%
7	Arden Hldgs PL		675,000	0.5%
8	Fundhost Ltd		650,000	0.5%
9	Beelong PL		600,000	0.5%
10	Manford Records Mgnt PL		600,000	0.5%
11	Savvy Cap Mgnt PL		525,000	0.4%
12	Bain PL		500,000	0.4%
13	Gidleigh PL		500,000	0.4%
14	De Nicola Anthony & TL		500,000	0.4%
15	Gypsy Hill PL		500,000	0.4%
16	Crosbie Glen Anthony		500,000	0.4%
17	Akehurst John & Rachel		500,000	0.4%
18	Gordon Bradley W & JR		475,000	0.4%
19	Mahalingham Swaminathan		400,000	0.3%
20	Badenport PL		400,000	0.3%

Substantial holders of 5% or more of fully paid ordinary shares

Shareholder Amara Family Trust Redsdale Pty Ltd Entrust Private Wealth Management Pty Ltd Spread of Holdings Nil Holding 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100.000 100,001 - Total on Register	No of Shares Person's votes Voting Power 34,375,000 34,375,000 27.80% 31,250,000 31,250,000 25.28% 22,265,000 22,265,000 18.01% Holders Shares % of Issued Capital 1 50 .00% 7 25,758 .02% 21 210,000 0.17% 560 29,830,940 24.13% 109 93,567,627 75.68%
	698 123,634,375 100.00%

Shares held in Voluntary Escrow.

Currently 62,500,000 shares are held in voluntary escrow until 31 January 2010

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Corporate Information

The registered office of the company is: EMERSON STEWART GROUP LIMITED OLD SWAN BREWERY SUITE 10, PART LEVEL 1 171 – 175 MOUNTS BAY ROAD PERTH WA 6000

The principal place of business is: EMERSON STEWART GROUP LIMITED OLD SWAN BREWERY SUITE 10, PART LEVEL 1 171-175 MOUNTS BAY ROAD PERTH WA 6000

AI assistant

VERIS LIMITED — Annual Report 2008

66021_rns_2008-09-29_d6a5f564-deb0-47c3-ab6b-576cbaa3b247.pdf

CONTENTS

Directors’ Report

Steven Cole LLB (Hons) FAICD

non-executive independent chairman (appointed 31[st] March 2008)

Dario Amara BEng (Distn) FIEAust CPEng Registered Builder

managing director/chief executive (appointed 29[th] January 2008)

Angelo Dabala MAICD

David Richardson MIE Aust

James Cullen BCom CA FFin FAICD

non-executive director (appointed 31[st] March 2008)

Graeme Yukich – Chairman (resigned 31[st] March 2008)

Andrew Fry – Non Executive Director (resigned 29[th] January 2008)

Brad Gordon – Non Executive Director (resigned 31[st] March 2008)

Company Secretary

Principal Activities

Review of Operations

Remuneration Report

DIRECTOR AND EXECUTIVE DISCLOSURES

(a) Details of Specified Directors and Specified Executives

(b) Remuneration Policy

(c) Remuneration of Directors and Specified Executives

(d) Shares issued, held and transacted by Directors and Specified Executives

(e) Options issued, held and transacted by Directors and Specified Executives

(f) Other transactions with Directors and Specified Executives

Corporate Governance Statement

Principle 1: Lay solid foundations for management and oversight

Recommendation 1.1 – Formalise and disclose the functions reserved to the board and those delegated to management.

Principle 2: Structure the Board to add value

Recommendation 2.1 – A majority of the Board should be independent directors.

Recommendation 2.2 – The chairperson should be an independent director.

Recommendation 2.3 – The roles of chairperson and chief executive officer should not be exercised by the same individual.

Recommendation 2.4 – The Board should establish a nomination committee.

Recommendation 2.5 – Provide the information indicated in Guide to reporting on Principle 2.

Principle 3: Promote ethical and responsible decision-making

3.1.1: The practices necessary to maintain confidence in the company’s integrity;

3.1.2: the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.

Recommendation 3.2: Disclose the Policy Concerning Trading in Company Securities by directors, officers and employees.

Recommendation 3.3 : Provide the information indicated in Guide to Reporting Principle 3.

Principle 4: Safeguard integrity in financial reporting

Recommendation 4.2: The Board should establish an Audit Committee.

Recommendation 4.3: Structure the Audit Committee so that it consists of :

Recommendation 4.4: The Audit Committee should have a formal charter.

Recommendation 4.5: Provide the information indicated in Guide to reporting on Principle 4.

Principle 5: Make timely and balanced disclosure

Recommendation 5.1: Establish written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior management level for that compliance.

Recommendation 5.2 : Provide the information indicated in Guide to reporting on Principle 5.

Principle 6: Respect the rights of shareholders

Recommendation 6.1: Design and disclose a communication strategy to promote effective communication with shareholders and encourage effective participation at general meetings.

Recommendation 6.2: Request the external auditor to attend the annual general meeting and be available to answer shareholder questions about the conduct of the audit and the preparation and content to the Auditor’s Report.

Principle 7: Recognise and manage risk

Recommendation 7.1: The Board or appropriate Board committee should establish policies on risk oversight and management.

Recommendation 7.2: The chief executive officer (or equivalent) and the chief financial officer (or equivalent) should state to the Board in writing that:

7.2.1 – the statement given in accordance with best practice recommendation 4.1 (the integrity of financial statements) is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board

7.2.2 – the company’s risk management and internal compliance and control system is operating efficiently and effectively in all material respects.

Recommendation 7.3 : Provide the information indicated in Guide to reporting on Principle 7.

Principle 8: Encourage enhanced performance

Recommendation 8.1: Disclose the process for performance evaluation of the Board, its committees and individual directors, and key executives.

Board and Director Evaluations

Senior Executive Evaluations

Principle 9: Remunerate fairly and responsibly

Recommendation 9.1: Provide disclosure in relation to the Company’s remuneration policies to enable investors to understand (i) the costs and benefits of those policies and (ii) the link between remuneration paid to directors and key executives and corporate performance.

Remuneration Policy

Recommendation 9.2: the Board should establish a remuneration committee.

Recommendation 9.3: Clearly distinguish the structure of non-executive directors’ remuneration from that of executives.

Recommendation 9.4: Ensure that payment of equity-based executive remuneration is made in accordance with thresholds set in plans approved by shareholders.

Recommendation 9.5: Provide the information indicated in Guide to reporting on Principle 9.

Company’s Remuneration Policy

Remuneration Committee (names of members and attendance at meetings)

Information Publicly Available

Principle 10: Recognise the legitimate interests in stakeholders

Recommendation 10.1: Establish and disclose a code of conduct to guide compliance with legal and other obligations to legitimate stakeholders.

EXECUTIVE SUMMARY OF COMPLIANCE WITH RECOMMENDATIONS FOR PERIOD 25 JUNE TO 30 JUNE 2008

Directors’ meetings

Dividends

Events subsequent to reporting date

Directors’ interests

Indemnification and insurance of officers

VERIS LIMITED Annual Report 2008