VERIS LIMITED — Annual Report 2012

Oct 7, 2012

OTOC LIMITED 2012 AnnuAL REpORT

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CONTENTS

CORPORATE DIRECTORY

Highlights 2012 1 DIRECTORS Chairmans’ Report 2 Derek La Ferla non-Executive Chairman Adam Lamond Chief Executive Officer Managing Directors’ Report 3 Tom Lawrence non-Executive Director OTOC Australia 4 Dario Amara non-Executive Director Whelans 5 About us 6 EXECUTIVE TEAM Brian Mangano Chief Financial Officer Health safety and environment 8 David Russell General Manager, OTOC Australia Annual Financial Report 1 Brian Hill Managing Director, Whelans Lisa Wynne Company Secretary

PRINCIPAL REGISTERED ADDRESS

Level 1, 43 Kishorn Road, Applecross WA 6153 postal: Locked Bag 14, Canning Bridge WA 6153 p: +61 8 9317 0600 F: +61 8 9317 0611

ABn: 80 122 958 178 ASX CODE: OTC

OPERATIONAL OFFICES

OTOC Group Pty Ltd trading as OTOC Australia Level 1, 43 Kishorn Road, Applecross WA 6153 postal: Locked Bag 14, Canning Bridge WA 6153 p: +61 8 9317 0600 F: +61 8 9317 0611 E: info@otoc.com.au www.otoc.com.au

ADDRESS

Level 1, 43 Kishorn Road, Applecross WA 6153 p: +61 8 9317 0600 www.otoclimited.com.au

Whelans (WA) Pty Ltd

133 Scarborough Beach Road, Mount Hawthorn WA 6016 postal: pO Box 99, Mount Hawthorn WA 6915 p: +61 8 9443 1511 F: + 61 8 9444 3901 E: whelans@whelans.com.au www.whelans.com.au

ABOUT THIS REPORT

This Annual Report is a summary of OTOC Limited’s (OTC) operations, activities and financial position as at 30 June 2012.

AUDITOR

KPMG

235 St Georges Terrace, perth WA 6000 p: +61 8 9263 7171 F: +61 8 9263 7129

References in the report refer to ‘the year’ or ‘the reporting period’ relate to the financial year, which is 1 July 2011 to 30 June 2012, unless otherwise stated. All dollar figures are expressed in Australian currency.

SOLICITORS

OTOC Limited is the parent company of OTOC Group pty Ltd trading as OTOC Australia and Whelans (WA) pty Ltd trading as Whelans.

Steinepreis Paganin Level 4, The Read Buildings, 16 Milligan Street perth WA 6000

In its efforts to reduce its impact on the environment OTC will only post printed copies of this Annual Report to those shareholders who elect to receive one through the share registry. An electronic copy of this Annual Report will be available on our website at www.otoclimited.com.au

SHARE REGISTRY

Security Transfer Registrars 770 Canning Highway, Applecross WA 6153 p: +61 8 9315 2333 F: +61 8 9315 2233

HIGHLIGHTS 2012

• Group revenue $152 million

• Net profit after tax of $5.5 million

• OTOC Transaction completed and core businesses positioned for growth

• Strong pipeline of new projects, with over $300 million in tenders submitted

• Strengthened management team in place

• Core businesses have strong order books and well positioned for growth

• Net assets after performance share issue $17.4 million

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CHAIRMAnS’ REpORT

MAnAGInG DIRECTORS’ REpORT

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Your company is now completely focused on driving earnings in its two main businesses OTOC Australia and Whelans.

I am pleased to present OTOC’s annual report for FY2012. It has been an exciting year for the OTOC group, having delivered a substantial increase in revenue, the merger of the OTOC Group and the divestment of Emerson Stewart’s Consulting business.

OTOC’s strategic focus for FY2013 is to drive further improvement in the group’s operating margins and earnings as opposed to purely focusing on turnover in order to maximise returns from its operating entities in order to deliver further value to our stakeholders.

OTOC group revenue grew from $53.3 million to $152.2 million including Whelans contribution of $20 million. This turnover generated net profit after tax from operations of $7.2 million for FY2012, which was a significant improvement from the prior year.

Rapid growth brings with it many challenges. In order to provide the Group with the most appropriate platform to manage these challenges, the management team of the Company’s major operation, OTOC Australia have been substantially restructured. We have continued to develop and grow our operational capabilities by implementing new systems, best practice procedures and investing in high calibre staff throughout the OTOC Group. This has allowed both OTOC Australia and Whelans to tender and manage larger projects and provide superior quality services. We now have a strong base with experienced employees, improved systems, quality suppliers, tier one customers and financial stability to grow the business to the next level.

Whilst there will be some uncertainty over the timing and value of new resources projects in the medium term we still see a strong pipeline of projects into the future and both OTOC Australia and Whelans have a strong order book as we move into 2013. I believe demand from the energy and resources sectors will continue to underpin infrastructure construction activity throughout the north West and with the recently completed Macedon Project, OTOC is well positioned to take advantage of continued development in both the oil and gas and iron ore sectors.

On behalf of the Board of OTOC I would like to thank all employees, past and present for their efforts and contribution over the past year. I look forward to reporting to you on OTOC’s progress during the year ahead as the benefits of the measures we have put in place bear fruit in FY2013.

Derek La Ferla CHAIRMAn 28 September 2012

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Years of red dirt, heat and a myriad of opportunities in the north-west saw the formation of Ocean to Outback Electrical back in 2003. This was the start of an incredible journey which led to the restructure of Ocean to Outback Contracting (OTOC) in 2008 and a sustained period of hard work, much change and tremendous growth.

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Our operations at Whelans also has a first class reputation with its customers, from developers, resource companies, through to government departments. Whelans is an established part of the Western Australian professional landscape.

OTOC is now an ASX listed group of companies with interests in infrastructure, surveying, town planning and mapping, spread over a dozen locations where our three hundred plus employees now work.

It is through the commitment, loyalty, and dedication of our staff that we have been able to shape the success of the OTOC group and remain focussed on our culture of teamwork, safety and work life balance.

For both OTOC and Whelans, opportunities for further expansion into the Energy sector will provide the group with not only increased revenue and earnings, but the ability to broaden our client base.

I’m often asked about the future of the resources sector in Australia, and believe that the outlook remains positive, with a large number of projects committed and demand for infrastructure continuing well into the future. The world’s demand for energy and resources has not stopped. Mining and allied services form the backbone of the Western Australian and Australian economies. This is not something that will change overnight.

The OTOC group achieved a 185% increase in revenue during FY2012 to $152 million. This produced a profit from operating activities of $7.2 million and a profit after tax from continuing operations of $6.2 million. Whilst I am pleased with our FY2012 results I believe that we can do better in FY2013. This belief is based on our behind the scenes work investing in the right systems, resources and people so that we face FY2013 as a stronger more efficient business group.

I believe the prospects for both OTOC Australia and Whelans during FY2013 to be strong, with multiple projects in our pipeline, and further projects due to be awarded over the period.

OTOC Australia has an enviable tender success rate that is above industry average. This is not something that came about overnight, but is the result of years of delivering quality projects on time, and on budget. We have developed in-depth and detailed understanding of our customer’s requirements. This relates not only to our tier one clients but also to the ultimate user, their employees.

Further details on our performance for the year are contained in the sections that follow. I encourage you to read them.

Adam Lamond MAnAGInG DIRECTOR 28 September 2012

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OTOC AuSTRALIA

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OTOC has established a strong reputation designing and building critical support infrastructure for companies like Rio Tinto, BHp and FMG. We are ready to take on any remote area non-process infrastructure project from start to finish.

“We build the facilities that keep people comfortable and work-ready in harsh and remote environments”

OTOC has specialist teams across five disciplines:

• Project Management

• Hydraulics

• Electrical

• Communications

• Construction/Civil

Specific capabilities:

Our services include:

• Concept design development and building cost estimation

• Mine site non-process infrastructure

• Final design and engineering, detailed quotation and project timeline

• Administration buildings

• Workshops and warehouses

• Civil engineering

• Village facilities

• On-site construction

• permanent and temporary accommodation

• Electrical, Hydraulics and Communications services

• Fire maintenance services

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WHELAnS

Whelans specialises in Surveying, Mapping and Spatial Town planning, Mapping and Consulting • GIS and provides services to Mine Mapping mining and infrastructure projects, • Stockpile Volumes construction, land subdivision • Site Rehabilitation and all aspects of development. • Coastal Analysis Mapping Coastal Analysis Mapping The Company’s head office is • Ortho-image Digital based in perth and has a strong Imagery prints regional presence with offices in Town Planning Karratha, Broome, Kununurra and Kalgoorlie. • Strategic planning

With over 35 years experience, Whelans are committed to providing innovative and professional services to their clients in Western Australia.

• Coastal Analysis Mapping

• Statutory planning

Surveying

• Land Tenure Advice

• Resource/Infrastructure Surveys

• Development Management

• Engineering Surveys

• Rezoning

• Cadastral Surveys

• Advocacy Submissions and appeals

• Land Development

• Mining Surveys

• Concept and Structure planning

• Lease Surveys

• Special Rural Subdivision

• Asset and Facility Surveys

• Land Subdivision

• Laser Scanning

  - Feasibility and Land use Assessment

• Hydrographic Surveys

• Sewerage and water treatment plants

• Maintenance programs

• End-to-end project management

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ABOuT uS

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OUR VALUES

OUR MISSION

OUR HERITAGE

The foundation of OTOC’s success can be sourced back to our commitment and loyalty to our values and culture, coupled with our team’s dedicated and professional work ethic. Moving forward into the new financial year and beyond, we are equally determined to continue with this winning combination to ensure even more success for all of us to share in. Our heritage and solid reputation will form the platform for OTOC to move forward with its shared vision of continued improvement, passion for our people, products and the communities in which we operate.

Our mission is a simple one and We have great mix of one we are passionate about. experienced people who are fully And although the nature of our aware and prepared for the effort operations sees our workforce required to deliver our mission. spread over multiple work fronts There are many examples from and remote regional areas, we previous years of these same focus on seeing and applying people going beyond the call ourselves as “One Team”, of duty and exemplifying our committed to “safely deliver values and work ethic to ensure quality projects on time and on we deliver on our commitments. budget”. The reason why we have such a powerful synergy within our team and why our people adhere and uphold our values is because they created them. Those values are;

Equality – Leadership – Integrity – Teamwork - Enjoyment

OUR CULTURE

Everyone knows and understands that we all play an important part and contribute to the success of OTOC through our actions. Therefore supporting those values are attitudes and behaviors which have been purposefully agreed to by everyone to ensure we create our culture by design, which has been accredited to our success and sets the standard we expect at OTOC.

OUR BEHAVIORS

Equality – This means to us that everyone must roll up their sleeves and shoulder their fair share of the workload. no one is too big or hides from the tasks at hand. We all put in a full days effort and if required a bit more to ensure we deliver on our commitments.

Leadership – Our culture empowers our people, as we trust them to demonstrate “personal Leadership” and to do the right thing, even when nobody is looking, as it’s all about ensuring we deliver on our commitments.

Integrity – This means to us that we follow through on what we said we would do. And if we can’t, we are not afraid to ask for help, because we are “One Team” and it’s all about ensuring we deliver on our commitments.

Teamwork – There will be times when your team mate will need hand to complete the task. It doesn’t matter if they are from yours or a different department, we get in and help out, because

we are “One Team” and it’s about ensuring we deliver on our commitments.

Enjoyment - We’re not lazy

because we are passionate about what we do and it shines through in the finished product. We reward and recognize our people through meaningful celebrations of our success as “One Team” once we have delivered on our commitments.

OUR TRAINING

OTOC understands that the skills and attitudes of our people, influence the outcome of our products. Therefore we are passionate about continual improvement and growing our people through consistent and quality training, coaching and mentoring. To facilitate this, the company has invested in both the human and material resources to establish the OTOC Academy. During the next 12 months, we will be continuing to conduct our in-house Certificate IV in Frontline Management for all our current and for those identified as future Supervisors. The next level to this training program will be to introduce Diploma level training which will be made available for those leadership positions who require it. Both internal and external trainers will continue to conduct site based and corporate training covering subject matter relevant to industry, community and life skills.

OUR COMMUNITY RESPONSIBILITY

OTOC understands and prioritises its corporate responsibility by giving back to local communities through various initiatives. Starting at the grass roots, we sponsor sporting organisations like the Three Springs netball Club, CBC Cricket team through to Cockburn Cougars. Our CEO participated in the ST Vincent’s CEO Sleepout and we regularly denote to Humanitarian 1%, Leukaemia Foundation, WA Special needs Children’s Christmas party, Royal Flying Doctors Service and WA School Canteen.

We are also ambassadors for the initiative “Kids Helping Kids”, which supplies food and fuel vouchers to families with serious ill or disadvantage children, in regional areas, via the professional services at local hospitals. Due to remote locations, travel expenses and the costs of medical costs some families experience severe financial pressure and therefore these vouchers help alleviate some of burden. The Kids Helping Kids initiative also encourages healthy children to do extra chores around the house so they too can donate part of their pocket money to help these families. OTOC is committed to contributing back to the communities where we derive our existence from.

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ANNUAL REPORT 2012 - OTOC LIMITED 7

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TABLE OF CONTENTS
HEALTH, SAFETY AnD EnVIROnMEnT AnnuAL FInAnCIAL REpORT 2012
OTOC AuSTRALIA
OTOC Performance Growth CONTENTS PAGE
800000
Outstanding HSE Performance 600000 Directors’ Report 2
• Increase in personnel hours over the past 400000
four years. Remuneration Report – Audited 7
200000
• One Million Hours Zero Lost Time
0 Corporate Governance Statement 14
Injuries recorded 2008-09 2009-10 2010-11 2011-12
• TRIFR remains steady within industry limits Financial Reporting Years Consolidated Statement of Comprehensive Income 23
SAI Global Certification Consolidated Statement of Financial position 24
OTOC YTD Total Recordable Injury Frequency Rate
• AS/NZS 4801:2001 • ISO 14001:2004 3025 7000060000 Consolidated Statement of Changes in Equity 25
20 50000 Consolidated Cash Flow Statement 26
40000
Continuous Improvement Initiatives • Supervisor HSE Enabling Program. 1510 3000020000 notes to the Financial Statements 27
• HSE Advisor Trainee Initiative 50 100000 Independent Auditors Report 65
• Hygiene (Dust & Noise) Surveys Undertaken Aug Sep Oct nov Dec Jan Feb Mar Apr May Jun Jul
Statistics per Month Hours TRIFR Lead Auditor’s Independence Declaration 67
• Injury Management Process defined.
• Behavioural Based Safety Program Directors’ Declaration 68
• Training Database Implemented Additional Information 69
• Operational Control Initiative
WHELAnS Whelans Performance Growth
400000
Outstanding HSE Performance 300000
• Increase in personnel hours over the past 200000
four years. 100000
• Zero Lost Time Injuries recorded 0
• TRIFR reduced to Zero 2008-09 2009-10 2010-11 2011-12
BSI Certification Financial Reporting Years
• AS/NZS 4801:2001
Continuous Improvement Initiatives Whelans YTD Total Recordable Injury Frequency Rate
• HSE Risk Management program 10.00 30000
• SWp implemented for all High Risk activities 8.00 25000
20000
• Lead indicators show improved Culture 6.00
15000
• Return to work process defined. 4.00 10000
•
Ongoing training needs identified 2.00 5000
• updates to the HSE management system and Manuals 0.00 Aug Sep Oct nov Dec Jan Feb Mar Apr May Jun Jul 0
Statistics per Month Hours TRIFR
Personnel Hours
Frequency Rate
Number of Personnel Hours Worked
Personnel Hours
Frequency Rate
Number of Personnel Hours Worked
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ANNUAL FINANCIAL REPORT 2012 - OTOC LIMITED 1

DIRECTORS’ REpORT

The Directors present their report together with the consolidated financial statements of OTOC Limited ABN 80 122 958 178 (“the Company”, “OTOC” or “Group”) and the entities it controlled at the end of, or during, the year ended 30 June 2012.

DIRECTORS’ REpORT

1. INFORMATION ON DIRECTORS (continued)

Adam Lamond

Chief Executive Officer

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Appointed 13 October 2011

1. INFORMATION ON DIRECTORS

The Directors of the Company in office during the financial year until the date of this report are set out below: Derek La Ferla (Non-Executive Chairman – appointed 2 November 2011)

Adam Lamond (Chief Executive Officer – appointed 13 October 2011) Tom Lawrence (Non-Executive Director – appointed 13 October 2011) Dario Amara (Non-Executive Director – appointed 29 January 2008)

Mr Lamond is a qualified electrician and electrical contractor with over 17 years of experience in the mining industry. Mr Lamond has particular expertise in the electrical trade and camp installations in remote Western Australia.

Mr Lamond began his career in the mining industry in 1995, working for a private electrical contractor and subsequently as a sub-contractor. He founded his own electrical contracting business in 2003 before merging it with several other private contracting businesses to form Ocean to Outback Contracting Pty Ltd, and held the position of Chief Executive Officer.

Special Responsibilities

Managing Director.

The Directors of the Company in office during the financial year until the date of their resignations are set out below: Steven Cole (Non-Executive Chairman – resigned 16 October 2011)

Former directorships in last 3 years

None.

Jamie Cullen (Non-Executive Director – resigned 16 October 2011)

Tom Lawrence

Derek La Ferla

Non-Executive Chairman

Appointed 28 October 2011

Mr La Ferla is a partner with the Perth office of international law firm Norton Rose. He is Non-Executive Chairman of ASX listed Sandfire Resources Limited and of unlisted public company Cashmere Iron Ltd.

He has been a director of a number of public and private companies over the years (including ASX listed Katana Capital Limited) and has served on the board of the predecessor firm to Norton Rose in Australia (Deacons).

As a senior corporate solicitor over the past 26 years, Mr La Ferla has worked closely with the boards and management of many public, private and statutory corporations, with particular emphasis over the past eight years on corporate governance, director responsibilities and balancing commercial, risk and management considerations.

Mr La Ferla holds Bachelor of Arts and Bachelor of Laws degrees and is a Fellow of the Australian Institute of Company Directors.

Non-Executive Director

Appointed 13 October 2011

Mr Lawrence is a qualified accountant and taxation law expert with a Masters Degree in taxation. Mr Lawrence has been the principal of Lawrence Business Management for over 15 years, providing tax and management advice to a diverse range of businesses. Mr Lawrence has been an advisor to OTOC from its inception.

Special Responsibilities

Mr Lawrence is Chairman of the audit committee and a member of the nomination and remuneration committee.

Former directorships in last 3 years

None.

Dario Amara

Non-Executive Director

Special Responsibilities

Mr La Ferla is Chairman of the nomination and remuneration committee and a member of the audit committee.

Former directorships in last 3 years

Sandfire Resources Limited (May 2010 – Current)

Appointed 29 January 2008

Dario Amara is a civil engineer and executive with extensive business experience and networks gained over 30 plus years in the Australian and international markets and spanning the property, infrastructure and industrial sectors.

Prior to founding Emerson Stewart Group Limited (now OTOC Limited) in 2005 and for over 16 years, he occupied senior executive roles with major construction and engineering groups. He is currently a non-executive director of Austal Limited (ASX listed), non-executive chairman of Mission NewEnergy (ASX, NASDAQ listed) and a board member of the Murdoch University Art Collection.

Dario has served as Chairman of the West Australian Opera Company, the Art Gallery of Western Australia and Heritage Perth and as a director of the Perth International Arts Festival. He is a graduate from the Curtin University of Technology, a Fellow of the Institution of Engineers Australia, a chartered professional engineer and a Registered Builder.

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DIRECTORS’ REpORT

1. INFORMATION ON DIRECTORS (continued)

Special Responsibilities

Mr Amara is a member of the audit committee and the nomination and remuneration committee.

Former directorships in last 3 years

Austal Limited (December 2011 – Current)

Mission Newenergy Limited (March 2006 – Current)

2. INFORMATION ON COMPANY SECRETARY

Lisa Wynne was appointed Company Secretary on 6 July 2012 following the resignations of joint Company Secretaries, Gene Lilly and Vince Salsano.

Ms Wynne is a Chartered Accountant with significant experience in the administration of ASX and TSX listed companies, corporate governance and financial accounting. Ms Wynne is Company Secretary of a number of ASX listed resources companies and an owner of corporate advisory firm Blue Horse Corporate Pty Ltd specialising in the provision of corporate services to public companies.

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DIRECTORS’ REpORT

4. DIRECTORS INTERESTS

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

	Number of Ordinary Shares	Number of Performance Shares	Number of Options
		(not quoted on the ASX)
Derek La Ferla	250,000	-	-
Adam Lamond	37,732,000	10,200,000	-
Tom Lawrence	1,125,713	-	-
Dario Amara	10,442,858	-	-
5. DIVIDENDS
Dividends paid to members during the year were as follows:
		2012	2011
		$000’s	$000’s
Pre-acquisition distribution - Fully franked dividend		950	1,170

3. DIRECTOR’S MEETINGS

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

Director Derek La Ferla Adam Lamond Tom Lawrence Dario Amara Steven Cole Jamie Cullen	Board Meetings Audit & Risk Committee Remuneration & Nomination Committee A B A B A B
	7 8 0 1 1 1 10 10 16 6 6 10 10 16 6 6 N/A 1 3 2 2 N/A 1 3 2 2 N/A 1 1 0 0 N/A 1 1 0 0

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

6. PRINCIPAL ACTIVITIES

OTOC through its wholly owned subsidiaries OTOC Group Pty Ltd and Whelans (WA) Pty Ltd (“Whelans”) provides construction and turnkey camp/ village installations, environmental, surveying, mapping, town planning, engineering, project delivery and specialist consulting services across the infrastructure, resources and energy sectors. The group has 6 offices located at strategic locations within Western Australia and approximately 360 staff.

There were no changes to the principal activities of the Company during the financial year under review.

7. REVIEW OF OPERATIONS

For the year ended 30 June 2012 the Company achieved net profit after tax of $5,535,000 (2011: loss $796,136).

The acquisition of OTOC Group Pty Ltd (“OGPL”) was successfully completed on the 13 October 2011 and shortly thereafter the Company changed its name to OTOC Limited to better reflect the underlying business of the group. The acquisition has been deemed to be a reverse acquisition under AASB 3 Business Combinations and as such these financial statements are deemed to be those of OGPL and the results of the existing OTOC Limited business have been consolidated from the date of acquisition.

The Company achieved operating revenue of $152,200,000 and net profit after tax from continuing operations of $5,535,000. The profit after tax includes a non-cash gain of $3,400,000 on the revaluation of the contingent consideration relating to Performance Shares on the OGPL acquisition. The results were achieved from the Company’s wholly owned subsidiaries OGPL (12 months of operations) and Whelans (WA) Pty Ltd (9 months of operations being from date of acquisition of OGPL to 30 June 2012).

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DIRECTORS’ REpORT

The Company’s other wholly owned subsidiary Emerson Stewart Pty Ltd contributed a loss after tax of $678 thousand (9 months of operations being from date of acquisition of OGPL to 30 June 2012). Shortly after the end of the reporting period OTOC sold the Emerson Stewart business.

8. SIGNIFICANT CHANGES IN STATE OF AFFAIRS

On 30 August 2011, in anticipation of the OTOC transaction referred to in 7 above progressing, the shareholders of OTOC in general meeting resolved to consolidate the shares and options on issue in OTOC on the basis of 2 shares/options for every 7 shares/options on issue. The consolidation was undertaken on 1 September 2011.

On 13 October 2011, the Company announced the completion of the OTOC transaction referred to in 7, effectively concluding the merger of OTOC and OGPL. The transaction was concluded by the issue of 50 million Shares and 20 million performance Shares to the vendors as consideration for the acquisition.

On 3 November 2011 the Company completed a pro rata non-renounceable entitlement issue on the basis of three Shares for every four Shares held by Shareholders on the record date and raised $1,316 thousand through the issue of 6,578,201 Shares.

There were no other significant changes in the state of affairs of the Group other than that referred to in the financial statements or notes thereto.

9. EVENTS SUBSEQUENT TO REPORTING DATE

On 3 July 2012, the Company announced it had entered into an Asset Sale and Purchase Deed for the sale of ESC’s Emerson Stewart Consulting Division which provides environmental, engineering and project delivery consulting services (Emerson Stewart Consulting Division) to PDC Design Pty Ltd. Following a thorough strategic review by the Company, the board resolved that the Emerson Stewart Consulting Division business was regarded as noncore to the strategic future of OTOC and the decision was made to divest the division to crystallise value for OTOC shareholders. The sale was completed on 3 September 2012 and OTOC received approximately $1,000 thousand as consideration for the sale of the Emerson Stewart business.

Subsequent to year end, the Company made appointments to its operational and corporate team, including the appointment of General Manager - David Russell; Chief Financial Officer – Brian Mangano and Company Secretary – Lisa Wynne.

On 9 July 2012, 28,572 unlisted options exercisable at $0.84 on or before 30 June 2013 lapsed.

10. LIKELY DEVELOPMENTS

OTOC intends to focus on the growth of its two core businesses OTOC and Whelans to deliver strong returns to shareholder. Further information about the likely developments in the operations of the Group and the expected results of those operations in future financial years has not been included in this report because disclosure of the information would be likely to result in unreasonable prejudice to the Group.

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DIRECTORS’ REpORT

11. REMUNERATION REPORT – Audited

The directors are pleased to present your company’s 2012 remuneration report which sets out the remuneration information for OTOC Limited’s non-executive directors, executive directors and other key management personnel. The information provided in this Remuneration Report has been audited as required by section 308(3C) of the Corporations Act 2001. This Remuneration Report forms part of the Directors’ Report. For the purposes of this report ‘Key Management Personnel’ (KMP) of the Company are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company, directly or indirectly.

Director and Executive Disclosures

a) Details of directors and key management personnel disclosed in this report

Director	Position	Appointed on	Resigned on
Derek La Ferla	Non-Executive Chairman	2 November 2011	-
Adam Lamond	Chief Executive Officer	13 October 2011	-
Tom Lawrence	Non-Executive Director	13 October 2011	-
Dario Amara	Non-Executive Director	29 January 2008	-
Steven Cole	Non-Executive Chairman	31 March 2008	16 October 2011
Jamie Cullen	Non-Executive Director	31 March 2008	16 October 2011
Key Management	Personnel
Gene Lilly	Co-Company Secretary and Chief	5 September 2011	6 July 2012
	Financial Officer
Brian Hill	Managing Director Whelan’s	28 February 2010	-

b) Remuneration policy

The Group has high expectations of its people, especially its executive leadership team. The Group 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 Group has established a remuneration and nominations 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; and

• Recommending the Group’s remuneration policy so as to:

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

• demonstrate a clear relationship between key executive performance and remuneration.

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DIRECTORS’ REpORT

DIRECTORS’ REpORT

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11. REMUNERATION REPORT – Audited (continued)

Non-executive director remuneration policy

The Constitution and the ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be determined from time-to-time by a general meeting. The Constitution was amended by special resolution of the members on 30 November 2011 with the aggregate remuneration increasing from $250,000 to $300,000 per annum, which is to be apportioned amongst Non-Executive Directors.

The Company has entered into engagement letters with its current Non-Executive Directors; refer details of the contractual arrangements on page 10 and 12 of this remuneration report.

Retirement payments, if any, are agreed to be determined in accordance with the rules set out in the Corporations Act 2001 at the time of the Directors retirement or termination. Non-Executive Directors’ remuneration may include an incentive portion consisting of bonuses and/or options, as considered appropriate by the Board, which may be subject to shareholder approval in accordance with the ASX Listing Rules.

Executive remuneration policy

The Company’s broad remuneration policy is to ensure the remuneration package properly reflects the person’s duties and responsibilities and that remuneration is competitive in attracting, retaining and motivating people of the highest quality. The Company aims to reward executives with a level of remuneration commensurate with their position and responsibilities within the Company so as to attract and retain executives of the highest calibre, whilst incurring a cost that is acceptable to shareholders.

Remuneration is regularly compared with the external market by participation in industry salary surveys and during recruitment activities generally. If required, the Board may engage an external consultant to provide independent advice in the form of a written report detailing market levels of remuneration for comparable executive roles.

Performance Linked Compensation

The Group’s Short Term Incentive Benefit (“STIB”) is calculated as a percentage of a bonus pool, based on EBIT performance above targets set by the Board from time to time, and is dependent on the executive achieving various key performance indicators for their relevant business line. The STIB for each executive is capped at 100% of their salary.

There were no short-term incentives payments made to executives for the year ended 30 June 2012.

The Group bases its Long Term Incentive Benefit (“LTIB”) on a combination of continued valued service of the particular executive and overall corporate performance of the Group as a whole so as to align each of the executive’s incentives with the total performance of the Group.

The LTIB was payable in the form of executive options. A portion of the options were subject to attainment of designated special key performance indicators at the scheduled time of their vesting being 30 June 2012. These KPI’s involved comparing the Group’s Total Shareholder Return to the ASX Small Industrial’s Index at 30 June 2012 and the three years leading up to that time, thereby aligning the Group performance with that of the executive. The designated key performance indicators were not met and therefore the portion of executive options that were performance based lapsed as at 30 June 2012. Refer to Section (f) of this Remuneration Report.

11. REMUNERATION REPORT – Audited (continued)

As part of key management Executive Services Agreements, Brian Hill has been granted shares, which vest at varying periods. Refer to Section (g) of this Remuneration Report.

Contractual Arrangements

On appointment to the board, all non-executive directors enter into a service agreement with the Company in the form of a letter of appointment. The letter summarises the board policies and terms, including remuneration, relevant to the office of director.

Remuneration and other terms of employment for the managing director, chief financial officer and other key management personnel are also formalised in service agreements. Major provisions of the agreements relating to remuneration are set out below.

Name	Term of agreement	Base salary including superannuation	Termination (A)
Derek La Ferla	Mr La Ferla will hold office until the next annual general meeting of the Company where he may be subject to retirement by rotation under the company’s constitution.	$80,000	-
Adam Lamond	3years	$345,000	3 months’ notice
Dario Amara	Non-Executive Director letter - Mr Amara will hold office until the next annual general meeting of the Company where he may be subject to retirement by rotation under the company’s constitution.	$50,000	-
Tom Lawrence	Mr Lawrence will hold office until the next annual general meeting of the Company where he may be subject to retirement by rotation under the company’s constitution.	$50,000	-
Brian Hill (B)	Expires 24 February2013	$162,383	6 months’ notice

• (A) The key management personnel are also entitled to receive on termination of employment their statutory entitlements of accrued annual and long service leave, together with any superannuation benefits.

• (B) Each of these agreements provide for the provision of long-term incentives through the issue of shares under the Company’s Employee Share Plan (refer to section 11(f) of this remuneration report for further information)

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11. REMUNERATION REPORT – Audited (continued)

c) Remuneration of directors and key management personnel of the group for the current and previous financial year

year
	Short-term employee benefits		Post-employment benefits
	Salary & fees $	Non- monetary $	Superannuation $	Total $
Managing Director
Adam Lamond (appointed 13	2012 316,514	-	28,486	345,000
Oct 2011)	2011 346,800	-	-	346,800
Non-Executive Chairman
Derek La Ferla (appointed 2 Nov	2012 53,333	-	-	53,333
2011)	2011 -	-	-	-
Shane Kempton (resigned 27 July	2012 -	-	-	-
2011)	2011 19,691	-	-	19,691
Non-Executive Directors
Dario Amara	2012 80,045 2011 -	- -	- -	80,045 -
Tom Lawrence (appointed 13	2012 48,339	-	-	48,339
October 2011)	2011 -	-	-	-
Executive Directors
Mark Bertoli (resigned 27 July	2012 -	-	-	-
2011)	2011 135,992	-	6,666	142,658
Peter Wylie (resigned 27 July	2012 -	-	-	-
2011)	2011 23,759	-	-	23,759
Other Key Management
Brian Hill	2012 108,568 2011 -	- -	26,099 -	134,667 -
Gene Lilly (resigned 6 Jul 2012)	2012 172,018 2011 -	- -	15,482 -	187,500 -
Total	2012 778,817 2011 526,242	- -	70,067 6,666	848,884 532,908

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11. REMUNERATION REPORT – Audited (continued)

c) Options issued, held and transacted by directors and key management

There were no options over ordinary shares granted to directors and key management person during or since the end of the reporting period.

d) Shares provided on exercise of remuneration options

No options were exercised during or since the end of the reporting period.

e) Analysis of options and rights over equity instruments granted as compensation

No options granted as compensation.

f)

Analysis of shares granted as compensation

On 20 July 2009 shareholders approved the implementation of the ESW Employee share plan (‘the Plan’). The purpose of the plan is to attract, motivate and retain key employees. Persons eligible to participate in the Plan are all employees of the Company and its subsidiaries specifically excluding directors (‘Participants’). Shares are provided to Participants through a trust arrangement, either by issuing new Shares, acquiring existing Shares on market or off-market. OTC ESP Pty Ltd has been appointed as a trustee to administer the Plan (‘Trustee’). OTC ESP Pty Ltd is a company controlled by Mr Tom Lawrence, director of the Company. The Trustee does not have any discretion to act otherwise than for the benefit of the Participants of the Plan and in accordance with the directions of the Board. The Trustee will acquire Shares in accordance with the Share Purchase Agreement and in accordance with the direction of the Board from time to time will allocate those shares to units (‘Share Units’) and issue those Share Units to Participants. Participants may be allocated Share Units in recognition of successful achievement of the required performance criteria and/or as part of their total ordinary remuneration. Details of vesting profiles of the Shares granted as remuneration under the Plan to each key management person are detailed below:

g) Analysis of shares granted as compensation

	Shares	Granted	% vested in	% forfeited in	Date which
	Number (A)	Date	year(B)	year	grant vests
Brian Hill	37,143	15/2/2010	100%	0%	1/1/2012
	48,571	15/2/2010	0%	0%	1/1/2013

(A) Post-consolidation of share capital of OTOC in September 2011.

(B) The % vested in the year is due to key executive and management personnel meeting their annual continued service with the Group and level of performance.

THIS CONCLUDES THE AUDITED REMUNERATION REPORT

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12. SHARES UNDER OPTION

No terms of equity settled share based payments (including options granted as compensation to key management personnel) have been altered or modified by the issuing entity during the reporting period (except as a result of the consolidation of share capital in September 2011). No shares were issued during the year on the exercise of options granted as compensation. At the date of this report unissued ordinary shares of the Group under option are:

Expiry Date Exercise Price 30 June 2013 $0.84 30 June 2013 $0.70	Number of shares 28,572 428,572
	457,144

13. INDEMNIFICATION AND INSURANCE OF OFFICERS

During the financial year the Group paid insurance premiums of $40,570 (2011: $6,770) to insure the directors, secretaries and executive officers of the Group 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 OTOC 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 Group.

The directors have not included details of the nature of the liabilities covered or the amount of the premium paid in respect of the directors’ and officers’ liability and legal expenses’ insurance contracts, as such disclosure is prohibited under the terms of the contract.

14. NON-AUDIT SERVICES

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DIRECTORS’ REpORT

14. NON-AUDIT SERVICES

Consolidated

Audit services: Audit and review of the financial reports Services other than audit services: Other assurance services Other auditors: Audit and review of the financial reports	2012 $000 2011 $000 202 - 50 - 20 30
	272 30

15. ENVIRONMENTAL REGULATION AND PERFORMANCE

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

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

16. PROCEEDINGS ON BEHALF OF THE GROUP

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

During the year KPMG, the Group’s auditor, has performed certain other services in addition to their statutory duties.

The board has considered the non – audit services provided during the year by the auditor and in accordance with advice provided by the Audit and Risk Committee, are 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 reasons:

All non-audit services were subject to the corporate governance procedures adopted by the Group and have been reviewed by the audit committee to ensure they do not impact the integrity and objectivity of the auditor; and the nonaudit services provided do not undermine the general principals relating to the auditor independence as set out in APES110 Code of Ethics for the Professional Accountants , as they did not involve reviewing or auditing the auditors own work, acting in a management or decision making capacity for the Group, acting as an advocate for the Group or jointly sharing risks and rewards.

17. LEAD AUDITORS INDEPENDENCE DECLARATION

The lead auditor’s independence declaration is set out on page 67 and forms part of the directors’ report for the year ended 30 June 2012.

18. ROUNDING

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.

Details for the amounts paid to the auditor of the Group, KPMG, and its related practices for audit and non-audit services to the Group provided during the year are set out below.

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DIRECTORS’ REpORT

19. CORPORATE GOVERNANCE STATEMENT

DIRECTORS’ REpORT

19. CORPORATE GOVERNANCE STATEMENT (continued)

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Remuneration

OTOC is committed to implementing sound standards of corporate governance. In determining what those standards should involve, the Group has had regard to the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations with 2011 amendments (2nd Edition) (“ASX Recommendations”) .

This corporate governance statement outlines the key principles and practices of the Company which in the terms of the Group’s Corporate Governance Charter, define the Group’s system of governance.

A copy of the Group’s Corporate Governance Charter (“Charter”) has been placed on the Group’s website in the corporate governance section, www.otoclimited.com.au

Board Responsibilities

The Board is responsible for the overall management and strategic direction of the Company and for delivering accountable corporate performance in accordance with the Company’s goals and objectives.

To ensure that the Board is well equipped to discharge its responsibilities, it has established guidelines for the nomination and selection of directors and for the operation of the Board as well as separate committees of the board including a Nomination committee and Remuneration and an Audit and Risk Management Committee.

Composition of the Board

The skills experience and expertise relevant to the position held by each director in office at the date of this report are included in the Directors Report forming part of this Annual Report. Members of the Board are appointed in the terms of the Company’s Constitution and under the guidance of the Nomination and Remuneration Committee. Although the election of Board members is substantially the province of the Shareholders in general meeting, the Company commits to the following principles:

The Board’s policy for determining the nature and amount of remuneration for Board members and senior executives of the economic entity was as follows:

• Executives receive a base salary (based on factors such as skills, experience, value to the Group and length of service), superannuation and, as appropriate, performance incentives, including by way of longer term share options and shorter term cash bonus entitlements. The Nomination and Remuneration Committee (on reference from, and in consultation with, the CEO) reviews executive packages from time to time by reference to the Group’s performance, executive performance and comparable information from industry standards.

• The maximum remuneration of non-executive directors is the subject of Shareholder resolution in accordance with the Group’s Constitution, the Corporations Act and the ASX Listing rules, as applicable. The apportionment of non-executive director remuneration within that maximum is made by the Board having regard to the inputs and value to the Group of the respective contributions by each non-executive director. The Board may also award additional remuneration to non-executive directors called upon to perform extra services or make special exertions on behalf of the Group.

Greater details of the remuneration arrangements for Directors and key management personnel are contained in the Remuneration Report comprised in the Directors’ Report forming part of this Annual Report.

Performance

The performance of all directors is to be reviewed annually by the Nomination and Remuneration Committee. Directors whose performance is unsatisfactory are asked to retire. No performance evaluation for the board, its committees and directors has taken place in the reporting period.

Independence

• The Board comprise of Directors with a blend of skills, experience and attributes appropriate for the Group and its businesses;

• The principal criterion for the appointment of new Directors is their ability to add value to the Group and its businesses

The term in office held by each director in office at the date of this report is as follows:

Name Term in Office Derek La Ferla Appointed 2 November 2011 Adam Lamond Appointed 13 October 2011 Dario Amara Appointed 29 January 2008 Tom Lawrence Appointed 13 October 2011

The Board has considered the guidance to Principle 2 of the ASX Recommendations and in particular the relationships affecting the independent status of directors. In its assessment of independence, the Board considers all relevant facts and circumstances. Relationships that the Board will take into consideration when evaluating independence are whether a Director:

• is a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company;

• is employed, or has previously been employed in an executive capacity by the Company or another Company member, and there has not been a period of at least three years between ceasing such employment and serving on the Board;

• has within the last three years been a principal of a material professional advisor or a material consultant to the Company or another Company member, or an employee materially associated with the service provided;

• is a material supplier or customer of the Company or other Company member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer; or

• has a material contractual relationship with the Company or another Company member other than as a Director.

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DIRECTORS’ REpORT

19. CORPORATE GOVERNANCE STATEMENT (continued)

The assessment of whether a Board member is independent is a matter of judgement for the Board as a whole and includes concepts of materiality. In the context of independence, materiality is considered from both a quantitative and qualitative perspective. An item is presumed to be quantitatively immaterial if it is equal to or less than 5% of an appropriate base amount. Qualitative factors considered include the nature of the relationship or contractual arrangement and factors that could materially interfere with the independent exercise of the director’s judgement. In accordance with the definition of independence above and the materiality thresholds, the following directors of OTOC are considered to be independent.

Name Position

Derek La Ferla Chairman Tom Lawrence Non-executive Director

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DIRECTORS’ REpORT

19. CORPORATE GOVERNANCE STATEMENT (continued)

The members of the Audit and Risk Management Committee throughout the year were as follows. Full details of the member’s qualifications and experience can be found in the Directors Report.

Name	Position
Tom Lawrence	Chairman of Committee and Non-Executive Director of Company, appointed 13 October 2011
Derek La Ferla	Chairman of Company, appointed 2 November 2011
Dario Amara	Non-Executive Director, appointed 29 January 2008
Steven Cole	Chairman, resigned 16 October 2011
James Cullen	Non-Executive Director, resigned 16 October 2011

Ethical standards

The Board recognises the ASX Recommendations that the majority of the Board should be comprised of independent directors and at this stage, the Company does not comply however the Board intends to appoint additional independent non-executive directors, as appropriate, with relevant corporate and industry experience to further strengthen its Board and guide its corporate and development strategy.

All directors, managers and employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the Group. Every employee has a nominated supervisor to whom they may refer any issues arising from their employment.

Conflict of Interest

Nomination and Remuneration Committee

The Board has appointed a Nomination and Remuneration Committee comprised of the following members throughout the year, further details of their experience and qualifications and number of meetings attended is contained in the Directors Report.

Name Position Derek La Ferla Chairman, appointed 2 November 2011 Dario Amara Non-Executive Director, appointed 29 January 2008 Tom Lawrence Non-Executive Director, appointed 13 October 2011

A summary of the Group’s Nomination and Remuneration Committee charter is publicly available on the Group’s website www.otoclimited.com.au.

Directors must keep the board advised, on an ongoing basis, of any interest that could potentially conflict with those of the Group. The board has developed procedures to assist directors to disclose potential conflicts of interest.

Where the board believes that a significant conflict exists for a director on a board matter, the director concerned does not receive the relevant board papers and is not present at the meeting whilst the item is considered. Each director is required by the Company to declare on an annual basis the details of any financial or other relevant interest they may have in the Company. There are procedures in place, to enable directors in furtherance of their duties to seek independent professional advice at the Company’s expense. Details of director related entity transactions with the Group are set out in note 26 to the consolidated financial statements.

Code of Conduct

The Group has developed a code of conduct which states the Group’s and its employees’ commitment to the conduct of its business with employees, customers, funders, retailers and other external parties.

The code is directed at maintaining high ethical standards and integrity. Employees are expected to adhere to the Group’s policies, perform their duties diligently, properly use Group resources, protect confidential information and avoid conflicts of interest.

Audit and Risk Management Committee

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

The chief executive officer and the chief financial officer have provided assurance, in writing to the board, that the financial reporting risk management and associated compliance and controls have been assessed and found to be operating effectively. The operational and other risk management compliance and controls have also been assessed and found to be operating effectively.

The Code is acknowledged by all employees and is publicly available on the Group’s website www.otoclimited.com.au.

Communication with shareholders

The board provides shareholders with information using a comprehensive Release of Price Sensitive Information Policy which includes identifying matters that may have a material effect on the price of the Group’s securities, notifying them to the ASX, posting them on the Group’s website, and issuing media releases. More details of the policy are available on the Group’s website www.otoclimited.com.au.

A summary of the Group’s Audit and Risk Management Committee charter is publicly available on the Group’s website www.otoclimited.com.au.

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DIRECTORS’ REpORT

19. CORPORATE GOVERNANCE STATEMENT (continued)

Diversity

The company is committed to diversity and recognises the benefits arising from employee and board diversity and the importance of benefiting from all available talent. Accordingly, the company has developed a diversity policy adopted by the current board in September 2012 which is available on the company’s website www.otoclimited.com.au. Diversity includes, but is not limited to, gender, age, ethnicity and cultural background.

The diversity policy outlines requirements for the Board to develop measurable objectives for achieving diversity, and annually assess both the objectives and the progress in achieving those objectives over time as director and senior management positions become vacant and appropriately qualified candidates become available.

Trading in securities by directors and employees

The Group’s Policy on Trading of Company’s Shares explains and reinforces the Corporations Act 2001 requirements relating to insider trading.

The policy applies to all directors, officers, key management personnel and employees of the Group, and their associates and closely related parties (“Relevant Persons”).

The policy is compliant with the ASX Listing Rules and expressly prohibit Relevant Persons buying or selling OTOC securities where the Relevant person or OTOC is in possession of price sensitive or ‘inside’ information and in any event without the prior approval of the Chairman or CEO. More details of the policy are available on the Group’s website www.otoclimited.com.au.

The table below summarises the Company’s compliance with the ASX Recommendations:

	PRINCIPLES AND RECOMMENDATIONS	COMPLY	COMMENT
1.	Lay solid foundations for management and oversight
1.1	Companies should establish the functions reserved to the board and those delegated to senior executives and disclose those functions.	Yes	The functions and responsibilities of the Board compared with those delegated to management are reflective of the ASX Recommendations. The roles and responsibilities of the board are formalised in the Company’s Board Charter available on the Company’s website at www.otoclimited.com.au.
1.2	Companies should disclose the process for evaluating the performance of senior executives.	Yes	The Nominations and Remuneration Committee is charged in the terms of the Charter with periodic review of the job description and performance of the CEO according to agreed performance parameters. The Nominations and Remuneration Committee conducts periodic reviews of the performance of the CEO with oversight reviews of the senior executives reporting directly to the CEO. No performance evaluation of senior executives has taken place during the period.

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DIRECTORS’ REpORT

1.3	Companies should provide the information indicated in the_Guide to reporting on Principle 1_.	Yes	The information is included within this Corporate Governance Statement.
2.	Structure the board to add value
2.1	A majority of the board should be independent directors.	No	The Board respects independence of thought and decision making as critical to effective governance, and while the majority of the board are not independent it is satisfied that its Board composition meets these requirements and notes that 50% of the Board are independent directors.
2.2	The chair should be an independent director.	Yes	Chairman, Derek La Ferla, is independent.
2.3	The roles of chair and chief executive officer should not be exercised by the same individual.	Yes	The roles of the Chairperson and the Chief Executive Officer are not exercised by the same individual.
2.4	The board should establish a nomination committee.	Yes	The Board has established a Nomination and Remuneration Committee comprising of three members, the majority of whom are independent directors and chaired by independent director, Derek La Ferla.
2.5	Companies should disclose the process for evaluating the performance of the board, its committees and individual directors.	Yes	The Nominations and Remuneration Committee is charged in the terms of the Charter with board and board committee membership, succession planning and performance evaluation, as well as board member induction, education and development. The Group has adopted policies and procedures in the Charter concerning the evaluation and development of its directors, executives and Board committee. 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 its operations in the context of its remit.
2.6	Companies should provide the information indicated in the_Guide to reporting on Principle 2_.	Yes	The information is included within this Corporate Governance Statement.
3.	Promote ethical and responsible decision-making
3.1	Companies should establish a code of conduct and disclose the code or a summary of the code as to:  the practices necessary to maintain confidence in the company’s integrity  thepractices necessaryto take into account	Yes	The Company has adopted a Group Code of Conduct, which can be accessed at the Company’s website. The Board understands the obligations for ethical and responsible decision making. All Directors and Officers are expected

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DIRECTORS’ REpORT

	their legal obligations and the reasonable expectations of their stakeholders  the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.		to: a) comply with the law; b) act in the best interests of the Company; c) be responsible and accountable for their actions; and d) observe the ethical principles of honesty and fairness, including prompt disclosure of potential conflicts.
3.2	Companies should establish a policy concerning diversity and disclose the policy or a summary of that policy. The policy should include requirements for the board to establish measureable objectives for achieving gender diversity and for the board to assess annually both the objectives and progress in achieving them.	Yes	OTOC is an equal opportunity employer and welcomes people from different backgrounds. Full details of the Company’s Diversity Policy can be found on the Company website.
3.3	Companies should disclose in each annual report the measureable objectives for achieving gender diversity set by the board in accordance with the diversity policy and progress in achieving them.	No	The Company is currently not of a size that justifies the establishment of measurable diversity objectives. The Board will seek to develop a reporting framework in the future to report the Company’s progress against the objectives and strategies for achieving a diverse workplace which can be used as a guide to be used by the Company to identify new directors, senior executives and employees.
3.4	Companies should disclose in each annual report the proportion of women employees in the whole organisation, women in senior executive positions and women on the board.	Yes	The proportion of women employees in the whole organisation is 18%. An executive office holding below the Board level, this being the position of Company Secretary; is held by a female.
3.5	Companies should provide the information indicated in the_Guide to reporting on Principle 3_.	Yes	The information is included within this Corporate Governance Statement and the Code of Conduct and Diversity Policy can be found at the Company’s website.
4.	Safeguard integrity in financial reporting
4.1	The board should establish an audit committee.	Yes	The Board has established a combined Audit and Risk Management Committee.
4.2	The audit committee should be structured so that it:  consists only of non-executive directors  consists of a majority of independent directors  is chaired by an independent chair, who is not chair of the board  has at least three members.	Yes	The committee is comprised of three non- executive directors, the majority of whom are independent and is chaired by independent director, Tom Lawrence who is not chair of the board.

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DIRECTORS’ REpORT

4.3	The audit committee should have a formal charter.	Yes	The charter is available on the Company’s website.
4.4	Companies should provide the information indicated in the_Guide to reporting on Principle 4_.		The information is included within this Corporate Governance Statement and in the Directors Report contained in this Annual Report.
5.	Make timely and balanced disclosure
5.1	Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies.	Yes	The Group has established a Release of Price Sensitive Information Policy designed to ensure compliance with ASX listing rule disclosure requirements and to ensure accountability at senior executive level for the compliance.
5.2	Companies should provide the information indicated in_Guide to Reporting on Principle 5._	Yes	The information is included within this Corporate Governance Statement.
6.	Respect the rights of shareholders
6.1	Companies should design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose their policy or a summary of that policy.	Yes	Pursuant to ASX Recommendation Principle 6, the Company’s objective is to ensure effective communication with its shareholders at all time. The Company has adopted a Release of Price Sensitive Information Policy which can be accessed at the Company’s website.
6.2	Companies should provide the information indicated in the_Guide to reporting on Principle 6_.	Yes	The Company’s website has a dedicated ASX Announcements section which publishes all important Company information and relevant announcements made to the market. The Company has provided all further information in section 6. 1 above.
7.	Recognise and manage risk
7.1	Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies.	Yes	Details of the Group’s policy on these matters is set out in the Risk Management Policy in the Charter which is publicly available on the Group’s website.
7.2	The board should require management to design and implement the risk management and internal control system to manage the company’s material business risks and report to it on whether those risks are being managed effectively. The board should disclose that management has reported to it as to the effectiveness of the company’s management of its material business risks.	No	The Board has not received reports from management as to the effectiveness of the Company’s management of its material business risks.

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COnSOLIDATED STATEMEnT OF COMpREHEnSIVE InCOME

DIRECTORS’ REpORT

7.3	The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.	Yes	The Board has received assurance from the chief financial officer (or equivalent) in accordance with section 295A of the Corporations Act.
7.4	Companies should provide the information indicated in_Guide to Reporting on Principle 7._	Yes	The information is included within this Corporate Governance Statement.
8.	Remunerate fairly and responsibly
8.1	The board should establish a remuneration committee.	Yes	The Board has established a Nomination and Remuneration Committee
8.2	The remuneration committee should be structured so that it:  consists of a majority of independent directors  is chaired by an independent director  has at least three members	Yes	The committee consists of three non-executive directors, the, majority of whom are independent directors.
8.3	Companies should clearly distinguish the structure of non-executive directors’ remuneration from that of executive directors and senior executives.	Yes	The structure of non-executive remuneration is clearly distinguishable from that of executive directors and senior executives.
8.4	Companies should provide the information indicated in the_Guide to reporting on Principle 8_.	Yes	The information is included within this Corporate Governance Statement and in the Directors Report contained in this Annual Report.

This concludes the corporate governance statement.

Signed in accordance with a resolution of the directors.

Derek La Ferla Non-Executive Chairman Perth, 28 September 2012

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Note Revenue 9 Cost of sales 10 Gross profit Marketing expenses Occupancy expenses Administration expenses Results from operating activities Financial income 11 Finance costs 11 Net finance income/(costs) Profit before income tax Income tax expense 12 Profit/(loss) from continuing operations Discontinued operation Loss from discontinued operation 7 Profit/(loss) for the year Other comprehensive income for the period, net of income tax Total comprehensive income/(loss) for the period Earnings per share Basic earnings per share (cents per share) 23 Diluted earnings per share (cents per share) 23	2012 2011 $000’s $000’s 152,177 53,316 (132,157) (44,530)
	20,020 8,786 (205) (78) (1,452) (549) (11,120) (7,372)
	7,243 787 3,443 60 (1,645) (647)
	1,798 (587)
	9,041 200 (2,828) (996)
	6,213 (796)
	(678) -
	5,535 (796)
	- -
	5,535 (796)
	4.2 (0.8) 3.4 (0.8)

The accompanying notes form an integral part of these consolidated financial statements.

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COnSOLIDATED STATEMEnT OF FInAnCIAL pOSITIOn AS AT 30 JunE 2012

Note Assets Current assets Cash and cash equivalents 13 Trade and other receivables 14 Work in progress 15 Other current assets Asset held for sale 8 Total current assets Non-current assets Plant and equipment 16 Investments Other non-current assets Deferred tax assets 12 Intangible assets 17 Total non-current assets Total assets Liabilities Current liabilities Trade and other payables 18 Loans and borrowings 19 Employee benefits 20 Current tax payable Financial liability 29 Liabilities held for sale 8 Total current liabilities Non-current liabilities Loans and borrowings 19 Deferred tax liability 12 Employee benefits 20 Total non-current liabilities Total liabilities Net assets Equity Share capital 21 Retained earnings Total equity	2012 2011 $000’s $000’s 3,962 2,094 13,429 13,441 25,226 2,721 630 563 887 -
	44,134 18,819
	10,418 3,612 80 585 116 - - 109 1,052 -
	11,666 4,306
	55,800 23,125
	22,711 9,521 6,522 1,364 3,454 1,808 - 3,573 4,600 - 183 -
	37,470 16,266
	3,429 1,304 1,811 - 255 -
	5,495 1,304
	42,965 17,570
	12,835 5,555
	4,588 1,975 8,247 3,580
	12,835 5,555

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COnSOLIDATED STATEMEnT OF CHAnGES In EQuITY FOR THE YEAR EnDED 30 JunE 2012

Note Balance at 1 July 2011 Total comprehensive income for the period Profit for the year Total comprehensive income for the period Transactions with owners, recorded directly in equity Contributions by and distributions to owners Equity issued net of transaction costs 21 Dividends declared 22 Adjustment on reverse acquisition 21 Total contributions by and distributions to owners Total transactions with owners Balance at 30 June 2012 Note Balance at 1 July 2010 Total comprehensive income for the period Prior year adjustments (Loss) for the year Total comprehensive income for the period Transactions with owners, recorded directly in equity Contributions by and distributions to owners Dividend declared 22 Total contributions by and distributions to owners Total transactions with owners Balance at 30 June 2011	Share capital Retained earnings Total equity $000’s $000’s $000’s 1,975 3,580 5,555 - 5,535 5,535
	- 5,535 5,535
	1,316 - 1,316 - (950) (950) 1,297 82 1,379
	2,613 (868) 1,745
	2,613 (868) 1,745
	4,588 8,247 12,835
	Share capital Retained Earnings Total equity $000’s $000’s $000’s 1,975 5,547 7,522 - (1) (1) - (796) (796)
	- (797) (797)
	- (1,170) (1,170)
	- (1,170) (1,170)
	- (1,170) (1,170)
	1,975 3,580 5,555

The accompanying notes form an integral part of these consolidated financial statements.

The accompanying notes form an integral part of these consolidated financial statements.

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COnSOLIDATED STATEMEnT OF CASH FLOWS FOR THE YEAR EnDED 30 JunE 2012

Note Cash flow from operating activities Receipts from customers Payments to suppliers and employees Income tax (paid)/refund Interest paid 11 Interest received 11 Net cash from operating activities 13 Cash Flows from investing activities Proceeds from sale of property, plant and equipment Purchase of property, plant and equipment Cash acquired on acquisition of subsidiary 5(a)(ii) Acquisition of subsidiary 5(a)(ii) Net cash used in investing activities Cash flow from financing activities Loans from related parties Repayment of borrowings Proceeds from borrowings Dividends paid Net cash from financing activities Net increase in cash held Cash and cash equivalents at 1 July Cash and cash equivalents at 30 June 13	2012 2011 $000’s $000’s 155,014 49,866 (148,043) (46,877) (4,481) 1,815 (1,645) (641) 43 153
	888 4,316
	499 66 (5,609) (1,640) 6,808 - (5,280) -
	(3,582) (1,574)
	2,739 566 (2,226) (1,144) 4,049 1,532 - (1,170)
	4,562 (216)
	1,868 2,526 2,094 (432)
	3,962 2,094

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Note 1: Reporting entity

OTOC Limited (the “Company”) is a company domiciled in Australia. The consolidated financial report of the Company as at and for the year ended 30 June 2012 comprises the Company and its subsidiaries (together referred to as the “Group”). The consolidated annual financial report of the Group as at and for the year ended 30 June 2012 is available upon request from the Company’s registered office at Level 1, 43 Kishorn Road Applecross WA 6153. The Group primarily is involved in providing resources and infrastructure services.

Note 2: Basis of preparation

(a) Statement of compliance

The consolidated financial statements are general purpose financial statements and have been prepared in accordance with Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated financial statements comply with International Financial Reporting Standards (IFRSs) adopted by the International Accounting Standards Board (IASB).

This consolidated annual financial report was approved by the Board of Directors on 28 September 2012.

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 have been rounded off to the nearest thousand dollars, unless otherwise stated.

(b) Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for the following material items in the statement of financial position:

• contract revenue and work in progress

• financial instruments at fair value through profit or loss are measured at fair value

• available-for-sale financial assets are measured at fair value

• liabilities for cash-settled share-based payment arrangements are measured at fair value.

(c) Use of estimates and judgements

The preparation of the consolidated financial statements in conformity with IFRSs require management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing this consolidated interim financial report, the significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial report as at and for the year ended 30 June 2012.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period which the estimates are revised and in any future periods affected.

The accompanying notes form an integral part of these consolidated financial statements.

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Note 3: Significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements, and have been applied consistently by Group entities.

Note 3: Significant accounting policies (continued)

(b) Basis of consolidation

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(i) Statement of cash flows

(a) Reverse acquisition accounting

On 13 October 2011, Emerson Stewart Group Limited, subsequently renamed OTOC Limited (“OTOC”) completed an acquisition of OTOC Group Pty Ltd (OGPL). In accordance with the accounting standards, this acquisition has been treated as a reverse acquisition business combination for accounting purposes. In applying the requirements of AASB 3 Business Combinations to the Group:

• a) OTOC Limited remains the legal parent of the Group; and

• b) OGPL is deemed to the accounting acquirer.

The consolidated financial information incorporated the assets and liabilities of all the entities deemed to be acquired by OGPL, and the results from those entities from the date those entities are deemed to be acquired by OGPL. The assets and liabilities of OTOC were recorded at fair value while the assets and liabilities of OGPL were maintained at book value.

As the transaction occurred mid-month the results of OTOC have been consolidated effective 1 October 2011. The impacts of all transactions between the entities in the Group were eliminated in full. The impact on equity of treating the formation of the Group as a reverse acquisition is discussed in more detail in note 5.

AASB 3 Business Combinations requires that consolidated financial statements prepared following a reverse acquisition be issued under the name of the legal parent (OTOC), but be a continuation of the financial statements of the legal subsidiary (OGPL – the acquirer for accounting purposes). The impact of applying AASB on each of the primary financial statements comparatives is as follows:

(i) Statement of financial position

The statement of financial position as at 30 June 2011 represents OGPL only. The consolidated annual financial position as at 30 June 2012 represents the combined position of OTOC.

(ii) Statement of comprehensive income

The statement of comprehensive income for the period ending 30 June 2011 represents OGPL only. The consolidated statement of comprehensive income for the period ending 30 June 2012 includes the results of OGPL for the full year and OTOC from the date of acquisition (1 October 2011) to 30 June 2012.

(iii) Statement of changes in equity

The 2011 statement of changes in equity comprises OGPL only for the period to 30 June 2011. The 2012 opening retained earnings balances and other equity balances recognised are those of OGPL before the business combination.

The comprehensive income for the period includes the results of OGPL for the year to 30 June 2012, and the results of OTOC from the date of acquisition (1 October 2011) to 30 June 2012.

The statement of cash flows for the period to 30 June 2011 comprises OGPL only for the year to 30 June 2011. Cash flows for the period to 30 June 2012 includes those of OGPL for the year to 30 June 2012, and those of OTOC from the date of acquisition (1 October 2011) to 30 June 2012.

(ii) Business combinations

The Group has adopted revised AASB 3 Business Combinations (2008) and amended AASB 127 Consolidated and Separate Financial Statements (2008) for business combinations occurring in the financial year starting 1 July 2009. All business combinations occurring on or after 1 July 2009 are accounted for by applying the acquisition method.

For every business combination, the Group identifies the acquirer, which is the combining entity that obtains control of the other combining entities or businesses.

Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that currently are exercisable. The acquisition date is the date on which control is transferred to the acquirer. Judgement is applied in determining the acquisition date and determining whether control is transferred from one party to another.

Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are exposed as incurred.

The Group measures goodwill as the fair value of the consideration transferred including the recognised amount of any non-controlling interest in the acquiree, less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed, all measured as of the acquisition date.

Consideration transferred includes the fair values of the assets transferred, liabilities incurred by the Group to the previous owners of the acquiree, and equity interests issued by the Group. Consideration transferred also includes the fair value of any contingent consideration and share-based payments awards of the acquiree that are replaced mandatorily in the business combination. If a business combination results in the termination of pre-existing relationships between the Group and the acquiree, then the lower of the termination amount, as contained in the agreement, and the value of the off-market element is deducted from the consideration transferred and recognised in other expenses.

(iii) Subsidiaries

Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that currently are exercisable are taken into account.

The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group.

(iv) Transactions eliminated on consolidation

Intra-group balances, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

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Note 3: Significant accounting policies (continued)

(c) Financial instruments

(i) Non-derivative financial assets

The Group initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets (including assets designated at fair value through profit or loss) are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

Note 3: Significant accounting policies (continued)

(c) Financial instruments (continued)

(iii) Share capital

Ordinary shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects. Dividends on ordinary shares are recognised as a liability in the period in which they are declared.

Repurchase of share capital (treasury shares)

When share capital recognised as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented as a deduction from total equity. When treasury shares are sold or reissued subsequently, the amount received is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to / from retained earnings.

The Group has the following non-derivative financial assets: loans and receivables.

(d) Property, plant and equipment

Loans and receivables

(i) Recognition and measurement

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses.

Loans and receivables comprise trade and other receivables.

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

(ii) Non-derivative financial liabilities

The Group initially recognises financial liabilities (including liabilities designated at fair value through profit or loss) on the trade date at which the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

The Group has the following non-derivative financial liabilities: loans and borrowings, bank overdrafts, performance shares and trade and other payables.

Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at fair value for performance shares, and amortised cost using the effective interest rate method for all others.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised in profit or loss.

(ii) Subsequent costs

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

(iii) Depreciation

Depreciation is recognised in profit or loss on either a straight-line or diminishing value basis over the estimated useful lives of each part of an item of property, plant and equipment. Items of property, plant and equipment are depreciated from the date that they are installed and are ready for use.

• The depreciation rates for the current and comparative periods are as follows:  Plant and equipment 2.5% - 50%  Motor vehicles 25%

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

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Note 3: Significant accounting policies (continued)

(e) Intangible assets and goodwill

(i) Goodwill

Goodwill (negative goodwill) arises on the acquisition of subsidiaries, associates and jointly controlled entities. Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree. When the excess is negative (negative goodwill), it is recognised immediately in profit or loss.

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Note 3: Significant accounting policies (continued)

(f) Impairment (continued)

(i) Non-derivative financial assets (including receivables) (continued)

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.

Subsequent measurement

All impairment losses are recognised in profit or loss.

Goodwill is measured at cost less accumulated impairment losses (see note 3(f)(ii)). In respect of equity-accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment, and any impairment loss is allocated to the carrying amount of the equity-accounted investee as a whole.

(ii) Other intangible assets

Other intangible assets including customer relationships that are acquired by the Group, which have finite useful lives, are measured at cost less accumulated amortisation and accumulated impairment losses.

(iii) Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.

(iv) Amortisation

Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. The estimated useful lives for the current and comparative periods are as follows:

 Customer relationships 5 years

(f) Impairment

(i) Non-derivative financial assets (including receivables)

A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.

Objective evidence that financial assets are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, the disappearance of an active market for a security.

The Group considers evidence of impairment for receivables and are assessed for specific impairment. All individually significant receivables found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Receivables that are not individually significant are collectively assessed for impairment by grouping together receivables with similar risk characteristics.

In assessing collective impairment the Group uses historical trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for management’s judgment as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.

An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost, the reversal is recognised in profit or loss.

(ii) Non-financial assets

The carrying amounts of the Group’s non-financial assets, other than deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, the recoverable amount is estimated each year at the same time.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating units that are expected to benefit from the synergies of the combination.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

(g) Assets held for sale

Non-current assets, or disposal groups comprising assets and liabilities, that are expected to be recovered primarily through sale rather than through continuing use, are classified as held for sale. Immediately before classification as held for sale, the assets, or components of a disposal group, are remeasured in accordance with the Group’s accounting policies. Thereafter, generally the assets, or disposal group, are measured at the lower of their carrying amount and fair value less cost to sell. Any impairment loss on a disposal group first is allocated to goodwill, and then to remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets and employee benefit assets, which continue to be measured in accordance with the Group’s accounting policies. Impairment losses on initial classification as held for sale and subsequent gains of losses on remeasurment are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss.

Once classified as held for sale, intangible assets and property, plant and equipment are no longer amortised or depreciated.

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Note 3: Significant accounting policies (continued)

(h) Employee benefits

(i) Other long-term employee benefits

The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods plus related on-costs.

(ii) Short-term benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

Note 3: Significant accounting policies (continued)

(l) Leased assets

(i) Lease payments

Payments made under operating leases are recognised in profit or loss on a straight line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.

Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

(ii) Lease classification

A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(iii) Share-based payment transactions

The grant date fair value of options granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the options. The amount recognised as an expense is adjusted to reflect the actual number of share options for which the related service and nonmarket vesting conditions are met.

Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.

Other leases are operating leases and the leased assets are not recognised in the Group's statement of financial position. Investment property held under an operating lease is recognised on the Group's statement of financial position at its fair value.

(m) Finance income and expense

(i) Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

(j) Revenue

Revenue from the rendering of a service is recognised upon the delivery of the service to the customers. Construction contract revenue is recognised in profit or loss in proportion to the stage of completion of the transaction at the reporting date. The stage of completion is assessed by reference to surveys of work performed.

Contract revenue includes the initial amount agreed in the contract plus any variations in contract work, claims and incentive payments, to the extent that it is probable that they will result in revenue and can be measured reliably. As soon as the outcome of a construction contract can be estimated reliably, contract revenue is recognised in profit or loss in proportion to the stage of completion of the contract. Contract expenses are recognised as incurred unless they create an asset related to future contract activity.

(k) Work in progress

Work in progress represents the gross unbilled amount expected from customers for contract work performed to date. It is measured at cost plus profit recognised to date less progress billings and recognised losses. Cost includes all expenditure related directly to specific projects and an allocation of fixed and variable overheads incurred in the Group's contract activities based on normal operating capacity.

Finance income comprises interest income on funds invested and fair value gains on remeasurement to fair value of financial liabilities. Interest income is recognised as it accrues in profit or loss, using the effective interest method. Finance expenses comprise interest expense on borrowings. Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit and loss using the effective interest method.

(n) Income tax

Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend is recognised.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognised for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

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Note 3: Significant accounting policies (continued)

(n) Income tax (continued)

(i) Tax consolidation

The Group and its wholly-owned entities are part of a tax-consolidated group. As a consequence, all members of the taxconsolidated group are taxed as a single entity from that date. The head entity within the tax-consolidated group is OTOC Limited.

The Group recognises deferred tax assets arising from unused tax losses of the tax-consolidated group to the extent that it is probable that future taxable profits of the tax-consolidated group will be available against which the asset can be utilised.

Any subsequent period adjustments to deferred tax assets arising from unused tax losses as a result of revised assessments of the probability of recoverability is recognised by the head entity only.

(ii) Nature of tax funding arrangements and tax sharing arrangements

The head entity, in conjunction with other members of the tax-consolidated group, has entered into a tax funding arrangement which sets out the funding obligations of members of the tax-consolidated group in respect of tax amounts. The head entity in conjunction with other members of the tax-consolidated group has also entered into a tax sharing agreement. The tax sharing agreement provides for the determination of the allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations. No amounts have been recognised in the financial statements in respect of this agreement as payment of any amounts under the tax sharing agreement is considered remote.

(o) Goods and services tax

Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the balance sheet. Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.

(p) Earnings per share

The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to employees.

Note 3: Significant accounting policies (continued)

(q) Segment reporting

Determination and presentation of operating segments

The Group determines and presents operating segments based on the information that internally is provided to the CEO, who is the Group's chief operating decision maker. Comparative segment information has been re-presented in conformity with the transitional requirements of such standard. Since the change in accounting policy only impacts presentation and disclosure aspects, there is no impact on earnings per share.

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group's other components. All operating segments' operating results are regularly reviewed by the Group's CEO to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily the Group's headquarters), head office expenses, and income tax assets and liabilities.

Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment and intangible assets other than goodwill.

(r) New standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations were effective for annual periods beginning after 1 July 2011, and have not been applied in preparing these consolidated financial statements. None of these are expected to have a significant effect on the consolidated financial statements of the Group.

(s) Presentation of financial statements

The Group presents in the consolidated statement of changes in equity all owner changes in equity, whereas all nonowner changes in equity are presented in the consolidated statement of comprehensive income.

Comparative information has been re-presented so it also is in conformity with the revised standard. Since the change in accounting policy only impacts presentation aspects, there is no impact on earnings per share.

(t) Determination of fair values

A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and / or disclosure purposes based on the following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

(i) Property, plant and equipment

Following the reverse acquisition, earning per share have been calculated in accordance with the specific guidance provided in AASB 3 Business Combination .

The fair value of property, plant and equipment recognised as a result of a business combination is based on market values. The market value of property is the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. The market value of items of plant, equipment, fixtures and fittings is based on the quoted market prices for similar items.

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Note 3: Significant accounting policies (continued)

(u) Determination of fair values (continued)

(ii) Intangible assets

The fair value of customer relationships acquired in a business combination is determined using the multi-period excess earnings method, whereby the subject asset is valued after deducting a fair return on all other assets that are part of creating the related cash flows.

(iii) Trade and other receivables

The fair value of trade and other receivables, excluding construction work in progress, but including service concession receivables, is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date.

(iv) Share-based payment transactions

The fair value of employee stock options is measured using a binomial lattice model. The fair value of share appreciation rights is measured using the Black-Scholes and Monte Carlo formula.

Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic volatility adjusted for changes expected due to publicly available information), weighted average expected life of the instruments (based on historical experience and general option holder behaviour), expected dividends, and the risk-free interest rate (based on government bonds). Service and non-market performance conditions attached to the transactions are not taken into account in determining fair value.

Note 4: Estimates

The preparation of interim financial reports requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing this consolidated interim financial report, the significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial report as at and for the year ended 30 June 2011. The key estimates include valued work in progress and contractual revenue recognition.

Note 5: Business combination

a) Acquisition of OGPL by OTOC

On 23 September 2011 the acquisition of OGPL by OTOC was approved by shareholders at an Extraordinary General Meeting, with the acquisition taking place on 13 October 2011 (effective date 1 October 2011).

(i) Accounting and disclosure implication of the acquisition

Under the accounting standards, the acquisition of OGPL by OTOC is accounted for as a business combination. Given the Board and Management composition, equity holding of the respective parties as well as other factors, the transaction was deemed to be a reverse acquisition for accounting purposes. As such, OGPL is deemed to be the accounting acquirer, while OTOC remains the legal parent. Refer to note 3(a) for the implications of this reverse acquisition.

Under the accounting guidance, the consideration that OGPL is deemed to have paid for OTOC is the fair value of OTOC’s equity at the date of acquisition, which was $14.5 million. This value has been allocated to the fair value of the assets and liabilities acquired. Under the terms of the acquisition, an additional 20 million performance shares are to be issued to the existing OGPL vendors should the earnings before interest and tax (“EBIT”) of OGPL be greater than $5.5 million for the year to 30 June 2012, with an additional 5 shares issued for every dollar of EBIT over this (capped to a maximum of 40 million shares). The board has determined that OGPL is likely to meet the full $6.5 million target. As such, these shares have been included in the calculation of the consideration paid, and recorded as a financial liability on the date of acquisition (see note 29).

(ii) Summary of acquisition

The details of consideration and the fair value of the identifiable assets acquired at 1 October 2011 are as follows:

Consideration Less: Fair value of identifiable net assets acquired Goodwill	$000’s 14,577 (14,577)
	-

The fair value of the ordinary shares acquired was based on the listed share price of OTOC at 13 October 2011 of $0.20 per share plus $7,180,000 in cash raised through a share placement. Payments to OTOC Group Pty Ltd shareholders on acquisition were $5,280,000.

The fair values of the net assets acquired by OGPL at 1 October 2011 are as follows:

Cash (a) Receivables/work in progress Other current assets Property plant and equipment Intangible assets Other non-current assets Trade & other payables Employee benefits Loans and borrowings Net fair value of identifiable net assets acquired	$000’s 6,808 9,881 769 4,080 1,380 636 (4,108) (2,148) (2,721)
	14,577

• (a) Cash includes Emerson Stewart Group cash balance of $308,000 plus $7,180,000 share placement receipts less $680,000 non-cash share transaction costs.

38

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Note 6: Operating segments

The Group has three reportable segments being managed separately by the service provided. Internal management reports on the performance of these reportable segments are reviewed monthly by the Chief Executive Officer. The following summary describes the operations in each of the Group’s reportable segments:

– OTOC Operations (“OTOC”) provides turnkey camp/village installations to the Western Australian resources and infrastructure sector.

– Whelans Consulting Operations (“Whelans”) provides surveying, mapping and town planning services throughout Western Australian.

Emerson Stewart Consulting Operations - provides environmental, engineering, project delivery and specialist consulting services to blue chip clients across the resources, infrastructure and energy sectors. As at 30 June 2012 the Directors were negotiation the sale of this business unit and disclosed as a discontinued operation.

Information regarding the results of each reportable segment is detailed below. Comparative segment information has been presented in conformity with the requirement of IFRS 8 Operating Segments.

Information about reportable segments

	OTOC Operations	OTOC Operations	Whelans	Corporate	Discontinued Operations	Total
	2012	2011	2012	2012	2012	2012	2011
	$000’s	$000’s	$000’s	$000’s	$000’s	$000’s	$000’s
External	133,460	53,316	19,841	-	5,317	158,618	53,316
revenues
Inter-segment	-	-	1,124	-	-	1,124	-
revenues
Depreciation	1,346	834	836	-	202	2,384	834
and
amortisation
Reportable	6,751	787	1,669	(1,177)	(548)	6,695	787
segment profit
before finance
costs and
income taxes
Reportable	38,359	23,016	14,876	230	2,335	55,800	23,016
segment assets
Reportable	28,706	17,570	5,407	7,969	883	42,965	17,570
segment
liabilities

Revenue from three major customers of the Group, individually representing more than 10% of total Group revenue, represented approximately $89 million (2011: $20 million).

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Note 6: Operating segments (continued)

Reconciliations of reportable segment revenues, profit or loss, assets and liabilities

Reconciliations of reportable segment revenues, profit or loss, assets and liabilities
Revenues Total revenue for reportable segments Elimination of discontinued operations Elimination of inter-segment revenue Consolidated revenue Profit or loss Total profit or loss for reportable segments before finance costs and taxes Loss from discontinued operations Net finance income Consolidated profit before income taxes	2012 $000’s 158,618 (5,317) (1,124)
	152,177
	6,695 548 1,798
	9,041

Note 7: Discontinued operation

As at 30 June 2012 Management had committed to a plan to sell its Emerson Stewart Consulting Operations (“ES Operations”) segment which provides project management, engineering and environmental science services across the infrastructure, resources and energy sectors. The Consolidated Statement of Comprehensive Income has been presented to show the ES Operations segment separately from continuing operations. Results for the ES Operations segment for the period 1 October 2011 (date of acquisition) to 30 June 2012 were as follows:

Results of discontinued operations Revenue Expenses Results from operating activities Tax Results from operating activities, net of tax (Loss) for the year Basic earnings (loss) per share Diluted earnings (loss) per share	2012 $000’s 5,317 (5,995) (548)
	(130) (678)
	(678)
	(0.5)
	(0.5)

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Note 8: Asset held for sale

On 3 July 2012, OTOC Limited announced that it had entered into an Asset Sale and Purchase Deed for sale of ES Operations. In the Directors’ opinion the division was considered to be noncore to the strategic future of the group. Proceeds from the transaction are expected to be approximately $1 million, and will be used as working capital to support the growth of the group’s core businesses. The sale was completed on 5 September 2012.

As at 30 June 2012 the disposal group comprised the following assets and liabilities:

Assets classified as held for sale

Work in progress Other current assets Liabilities classified as held for sale Employee benefits liability	2012 $000’s 839 48
	887
	183
	183

See discontinued operations note 7 for details of cumulative income or expense recognised in income.

Note 9: Revenue

ote 10: Cost of sales Rendering of services Construction contract revenue Labour Materials Depreciation Other	2012 $000’s 2011 $000’s 18,717 - 133,460 53,316
	152,177 53,316
	2012 $000’s 2011 $000’s 82,739 19,764 27,835 14,353 2,384 834 19,199 9,579
	132,157 44,530

Note 10: Cost of sales

Note 11: Finance income and expense

ote 11: Finance income and expense
Bank interest Fair value gain on contingent consideration (note 29) Finance income Interest expense Finance expense Net financial income/(expense) recognized in statement of comprehensive income	2012 $000’s 2011 $000’s 43 60 3,400 -
	3,443 60 (1,645) (647)
	(1,645) (647)
	1,798 (587)

Note 12: Income tax expense/(benefit)

Current tax expense	2012	2011
Tax recognised in profit or loss	$000’s	$000’s
Current tax	-	1,625
Deferred tax	2,698	(629)
Income tax expense relating to discontinued operation	130	-
Income tax expense reported in the income statements	2,828	996
The prima facie tax on the result from ordinary activities before income tax is reconciled to the income tax as follows:
Reconciliation of effective tax rate
Profit before income tax	9,041	200
Income tax at 30% (2011: 30%)	2,712	60
Add (less) tax effect of:
Other non-allowable/ assessable items	116	936
Income tax expense/ (benefit) attributable to entity	2,828	996

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Note 12: Income tax expense/(benefit) continued

Deferred Tax Assets/Liabilities

(a) Deferred tax liability	Assets		Liabilities		Net
	2012	2011	2012	2011	2012	2011
	$000’s	$000’s	$000’s	$000’s	$000’s	$000’s
Work in Progress	-	-	(7,454)	(278)	(7,454)	(278)
Plant & Equipment	-	-	(211)	-	(211)	-
Employee Benefits	1,125	387	-	-	1,125	387
Provisions	64	-	-	-	64	-
Carried forward unused tax losses*	4,324	-	-	-	4,324	-
Other	341	-	-	-	341	-
Tax assets/ (liabilities)	5,854	387	(7,665)	(278)	(1,811)	109
(b) Movement in deferred tax balances					2012	2011
					$000’s	$000’s
Opening Balance					109	(520)
Subsidiaries opening balances					634	-
Not brought to account					122	-
Charge to income					(2,676)	629
Closing deferred tax asset/(liability)					(1,811)	109

*Carried forward tax losses of $4,324,000 (at 30% tax rate) have been recognized as a deferred tax asset as management believe it is probable that future taxable profits will be available to utilize the benefits there from.

Note 13: Cash and cash equivalents

Cash at bank and in hand Cash and cash equivalents Cash and cash equivalents in the statement of cash flows	2012 $000’s 2011 $000’s 3,962 2,094
	3,962 2,094
	3,962 2,094

The Group’s exposure to interest rate risk and a sensitivity analysis for the financial assets and liabilities disclosed in note 28.

Reconciliation of cash flow from operations with profit after income tax

Reconciliation of cash flow from operations with profit after income tax
Cash flows from operating activities Profit/ (Loss) after income tax Non-cash flows in profit Gain on revaluation of finance liability Depreciation Impairment on intangible assets Amortisation of formation costs Other Deferred tax expense (Increase)/decrease in trade and other debtors (Increase)/decrease in other assets (Increase)/decrease in work in progress (Increase)/decrease in assets held for sale (Increase)/decrease in intangible assets Increase/(decrease) in trade creditors Increase/(decrease) in provisions and employee benefits Taxes paid Increase /(decrease) in tax movement Net cash provided by operating activities	2012 $000’s 2011 $000’s 5,535 (796) (3,400) - 2,384 909 - 1,005 - 89 82 - 2,828 -
	7,429 1,207 9,303 (6,170) 1,222 - (21,684) - (887) - 328 - 9,905 4,783 (247) 1,684 (4,481) - - 2,812
	888 4,316

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Note 14: Trade and other receivables

Trade receivables Other receivables	2012 $000’s 2011 $000’s 12,701 12,668 728 773
	13,429 13,441

At 30 June 2012 trade receivables include retentions of $531 thousand (2011: $926 thousand) related to construction contracts in progress.

The Group’s exposure to credit and currency risk is disclosed in note 28.

Note 15: Work in progress Work in progress Note 16: Plant and equipment Plant and equipment Less: accumulated depreciation Motor vehicles, at cost Less: accumulated depreciation Leased motor vehicles Less: accumulated depreciation Total written down value	2012 $000’s 2011 $000’s 25,226 2,721
	25,226 2,721
	2012 $000’s 2011 $000’s 11,512 4,881 (4,310) (1,775)
	7,202 3,106
	4,481 959 (1,342) (453)
	3,139 506
	149 - (72) -
	77 -
	10,418 3,612

Note 16: Plant and equipment (continued)

Reconciliations of the carrying amounts of each class of property, plant and equipment at the beginning and end of the current financial year are set out below.

2012 Carrying amount at 1 July 2011 Additions through business acquisition Additions at cost Disposals at carrying value Transfers between classes at carrying value Depreciation / amortisation Carrying amount at 30 June 2012	Leased Plant & Equipment $000’s Plant & Equipment $000’s Leased Motor Vehicles $000’s Motor Vehicles $000’s Total $000’s 3,106 - 506 - 3,612 3,144 936 4,080 2,993 86 2,314 216 5,609 (379) - (120) - (499) 86 (86) 91 (91) - (1,748) - (588) (48) (2,384)
	7,202 - 3,139 77 10,418

Reconciliations of the carrying amounts of each class of property, plant and equipment at the beginning and end of the comparative financial year are set out below.

2011 Carrying amount at 1 July 2010 Additions at cost Disposals at carrying value Transfers between classes at carrying value Depreciation / amortisation Carrying amount at 30 June 2011	Leased Plant & Equipment $000’s Plant & Equipment $000’s Leased Motor Vehicles $000’s Motor Vehicles $000’s Total $000’s 2,398 - 550 - 2,948 1,426 - 115 - 1,541 (43) - - - (43) - - - - - (675) - (159) - (834)
	3,106 - 506 - 3,612

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Note 17: Intangible assets

2012 Carrying value 1 July 2011 Acquisitions through business combination Amortisation Net carrying value at 30 June 2012	Goodwill Customer Relations Software Total $000’s $000’s $000’s $000’s - - - - 761 379 240 1,380 - (88) (240) (328)
	761 291 - 1,052

The $761,000 of goodwill acquired was allocated to the Whelans business unit. During the period 1 October 2011 to 30 June 2012 the business unit profit was $1,669,000 and is forecasted to increase in the 2013 financial year.

Note 18: Trade and other payables

Trade and other payables	2012 2011 $000’s $000’s 22,711 9,521
	22,711 9,521

The Group’s exposure to liquidity risk related to trade and other payables is disclosed in note 28.

Note 19: Loans and borrowings continued

Terms and debt repayment schedule

Terms and conditions of outstanding loans were as follows:

Nominal interest rate % Year of maturity Bank loan 6.8 - 7.3 2012 Hire purchase liabilities 6.8 – 8.2 2012 – 2016 Insurance premium funding loans 8.3 2012 - 2013 Loans from related parties 12.0 2012 - 2013	2012 2011 $000’s $000’s Face value Carrying amount Face value Carrying amount 650 650 - - 5,709 6,227 2,494 2,590 335 335 78 78 2,739 2,739 - -
	9,433 9,951 2,572 2,668

All loans and borrowings are denominated in Australian Dollars.

A bank guarantee of $67,500 was provided to the Landlord of 133 Scarborough Beach Road, Mt Hawthorn as per the renewal terms of the Lease in July 2009. A bank guarantee of $47,500 was also provided to the Landlord of Unit 3/16 Crane Circle, Karratha per the terms of the Lease in November 2011. The bank guarantees may be withdrawn by the bank without notice.

A bank guarantee of $490,000 was provided to the landlord of the Old Swan Brewery, 171 Mounts Bay Rd,

Note 19: Loans and borrowings

This note provides information about the contractual terms of the Group’s interest bearing loans and borrowings which are measured at amortised cost.

Current liabilities Bank loan Hire purchase liabilities Insurance premium funding loans Loans from related parties (note 25) Non-current liabilities Hire purchase liabilities	2012 2011 $000’s $000’s 650 - 2,798 1,286 335 78 2,739 -
	6,522 1,364
	3,429 1,304
	3,429 1,304

Perth as per the terms of the lease in December 2009. The bank guarantee may be withdrawn by the bank without notice. A bank guarantee of $195,795 is held in favour of the Group from the sub-lessee of portion of the office accommodation.

Lease liabilities are effectively secured as the rights to leased assets revert to the lessor in the event of default. The carrying value of leased assets is set out in note 16.

The insurance premium funding loans are repayable in monthly installments.

Hire Purchase Liabilities

Hire purchase liabilities of the Group are payable as follows:

Less than 1 year Between 1 & 5 years	Future minimum lease + HP payments 2012 Interest 2012 Present value of minimum lease + HP payments 2012 Future minimum lease +HP payments 2011 Interest 2011 Present value of minimum lease +HP payments 2011 $000’s $000’s $000’s $000’s $000’s $000’s 2,798 (358) 2,440 1,304 (67) 1,237 3,429 (160) 3,269 1,286 (29) 1,257
	6,227 (518) 5,709 2,590 (96) 2,494

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Note 20: Employee benefits

Current Annual leave Long service leave Other employee provisions Non-current Long service leave Note 21: Capital and reserves Share capital Balance at the beginning of the period 1 October 2011 Opening Emerson Stewart Group Ltd shares acquired 3 November 2011 Rights issue Balance at reporting date		2012 2011 $000’s $000’s 1,958 1,808 798 - 698 - 3,454 1,808 255 - 255 - 2012 2011 No. Of Shares No. Of Shares 73,600,000 73,600,000 72,884,311 - 6,578,201 -
		153,062,512 73,600,000

The Group does not have authorised capital or par value in respect of its issued shares.

The 73,600,000 opening balance shares were those issued to OTOC Group Pty Ltd shareholders on the legal acquisition by Emerson Stewart Group Limited. The accounting was a reverse acquisition (refer to note 6).

Total transaction costs relating to this issue of shares included in equity was $580,000.

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Group. All shares rank equally with regard to the Group’s residual assets.

Details of performance shares issued during the year are disclosed in note 29.

Note 22: Dividends

The following dividends were declared and paid by OTOC Group Pty Ltd prior to the acquisition of Emerson Stewart Group Limited.

Franking Credit Balance The amount of franking credits available for the subsequent financial year are: Franking account balance as at the end of financial year at 30% (2011:30%)	2012 2011 $000’s $000’s 950 1,170
	950 1,170
	2012 2011 3,978,895 1,184,141

The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends.

The above available amounts are based on the balance of the dividend franking account at year-end adjusted for:

• franking credits that will arise from the payment of the current tax liabilities;

• franking debits that will arise from the payment of dividends recognised as a liability at the year end;

• franking credits that will arise from the receipt of dividends recognised as receivables by the tax consolidated group at the year end; and

• franking credits that the entity may be prevented from distributing in subsequent years.

Note 23: Earnings per share

Earnings used to calculate basic EPS ($000’s) Weighted average number of ordinary shares outstanding during the period used in calculating basic EPS (number of shares) Basic earnings per share (cents per share) Weighted average number of ordinary shares Issued ordinary shares at 1 July Effect of shares issued related to business combination and share placement Effect of shares issued in November 2011 Weighted average number of ordinary shares 30 June	2012 2011 5,535 (796) 132,221,158 100,000,000
	4.2 (0.8)
	2012 000’s 2011 000’s 73,600 73,600 54,314 26,400 4,307 -
	132,221 100,000

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Note 23: Earnings per share (continued)

Note 24: Share-based payments

a) Employee Option Plan

Diluted earnings per share

The calculation of diluted earnings per share at 30 June 2012 was based on profit attributable to shareholders of $5,535,000 and a weighted average number of ordinary shares after adjustment for the effects of all dilutive performance shares of 40 million.

Earnings used to calculate diluted EPS ($000’s) Weighted average number of ordinary shares outstanding during the period used in calculating diluted EPS Diluted earnings per share (cents per share) Diluted weighted average number of ordinary shares Issued ordinary shares at 1 July Effect of shares issued related to business combination and share placement Effect of performance shares issued Effect of shares issued in November 2011 Weighted average number of ordinary shares 30 June	2012 2011 5,535 (796) 162,029,377 100,000,000
	3.4 (0.8)
	2012 000’s 2011 000’s 73,600 73,600 54,314 26,400 29,808 - 4,307 -
	162,029 100,000

On 31 March 2008 the Group established a share option programme that entitles key management personnel and senior employees to purchase shares in the Group. During July 2008 an initial grant was offered to these employee groups. The terms and conditions of the grants are as follows. All options are to be settled by physical delivery of shares.

Grant date / Balance at	Terms	Granted	Granted	Consolidation	Forfeited	Forfeited	Balance at	Vesting
employees start of		during				during	end of	conditions
entitled period(A)		period				period	period
Option grant to	$0.70
key management on 1,500,000	expiring 30/6/2013		-	(1,071,428)		-	428,572	3 years service
1 July 2008
Option grant to	$0.84
senior employees on 100,000	expiring 30/6/2013		-	(71,428)		-	28,572	2 years service
25 July 2008
Option grant to senior employees on 25 July 2008 2,000,000	$.84 expiring 31/12/2011		-	(1,428,570)	(571,430)		-	3 years service
Total share options 3,600,000			-	(2,571,426)	(571,430)		457,144
Thenumber and weighted average	exercise prices of share options are as follows:
	Weighted avg.		**Number of options **		Weighted		avg. exercise	Number of
	exercise price					price		options on
								issue(A)
		2012		2012			2011	2011
Outstanding at start of period Consolidation of share capital - September 2011		$0.24 -		3,600,000 (2,571,426)			$0.24 -	7,350,000 -
Forfeited during the period Exercised during the period		$0.71 -		(571,430) -			$0.24 -	(3,750,000) -
Outstanding at end of period		$0.71		457,144			$0.24	3,600,000
Exercisable at end of period				457,144				3,500,000
The options outstanding at 30 June 2012 have an exercise price in the range of $0.70 to $0.84 and a weighted average contractual life of 12 months. (A) Pre-consolidation of share capital of OTOC in September 2011.

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Note 24: Share-based payments (continued)

a) Employee Option Plan (continued)

No shares were issued during the period under the Employee share plan (‘the Plan’). At the end of the period, 625,713 Shares were on issue and held in trust for Participants of the Plan.

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Note 25: Related parties

a) Key management personnel compensation

The key management personnel compensation included in ‘employee benefits’ (see note 20) is as follows:

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----- Start of picture text -----

2012 2011
$ $
Short-term employee benefits 778,817 526,242
Post-employment benefits 70,067 6,666
848,884 532,908
----- End of picture text -----

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Note 25: Related parties (continued)

b) Equity Instrument Disclosure Relating to Key Management Personnel

(ii) Shares issued, held and transacted by directors and key management personnel

The number of ordinary shares in the Company held during the reporting period by each director and other key management personnel of the Group, including their personally related parties are set out below. There were no shares granted as compensation during the reporting period.

Directors Derek La Ferla Adam Lamond Tom Lawrence Dario Amara KMP’s Brian Hill Total	Balance at 30/06/2011(A) Movement(B) Balance at 30/06/2012
	- 250,000 250,000 - 37,732,000 37,732,000 - 1,275,713 1,275,713(C) 36,550,000 (26,107,142) 10,442,858 2,799,473 (1,932,330) 867,143
	39,349,473 11,218,241 50,567,714

• (A) Pre-consolidated of share capital of OTOC in September 2011

• (B) Movement represents the consolidation of share capital and shares acquired or sold.

• (C) Includes 775,713 post-consolidation shares held by OTC ESP Pty Ltd as trustee of the OTOC Employee Share Plan of which Tom Lawrence is a Director but in which shares Tom Lawrence has no beneficial interest.

(iii) Performance Shares issued, held and transacted by directors and key management personnel

On 13 October 2011, the Company issued 20 million Performance Shares for part consideration of the OTOC transaction referred to in section 7 of the Directors Report, effectively concluding the merger of OTOC and OGPL. Refer to Note 32 of this report for further details of the terms of the performance shares.

The number of Performance shares in the Company held during the reporting period by each director and other key management personnel of the Group, including their personally related parties are set out below. There were no shares granted as compensation during the reporting period.

Performance Shares Adam Lamond	Balance at 30/6/2011 Movement Balance at 30/6/2012
	- 10,200,000 10,200,000

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Note 25: Related parties (continued)

Individual directors and executives compensation disclosures

Information regarding individual directors and executive’s compensation and some equity instruments disclosures as required by Corporations Regulations 2M.3.03 is provided in the remuneration report section of the directors’ report on pages 7 to 11.

Apart from the details disclosed in this note, no director has entered into a material contract with the Group since the end of the previous financial year and there were no material contracts involving directors’ interests existing at yearend.

Other related party transactions

During the period, certain related parties made loans to the Company under normal commercial terms. The details of these loans are as follows:

Interest rate % Adam Lamond (Director) Shareholders 12 12	Amount $000’s 1,855 884
	2,739

Loans outstanding to related parties are made under normal commercial terms, and are repayable on demand. Interest is accrued monthly and paid upon maturity.

Note 27: Commitments

• (a) Commitments in relation to 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 Commitments not recognised in financial statements	2012 2011 $000’s $000’s 2,260 317 804 477 - -
	3,064 794

The non-cancellable operating leases are for the lease of office and staff accommodation. The leases are generally for a term of between 1 to 3 years. One of the leased properties has been sublet by the Group. The lease and sublease expire in December 2012. Sublease payments of $348,000 are expected to be received during the 2013 financial year.

Note 28: Financial instruments

Overview

The Group has exposure to the following risks from their use of financial instruments:

• credit risk

• liquidity risk

Note 26: Auditor’s remuneration

Audit and review services

KPMG Audit and review of financial reports Other services provided Other auditors Audit and review of financial reports	2012 2011 $ $ 201,619 - 50,000
	251,619 -
	20,000 30,000
	20,000 30,000

• market risk

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

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. The Board has established an Audit and Risk Management Committee, which is responsible for overseeing how management monitors risk and reviewing the adequacy of the risk management framework in relation to the risks faced by the Group. The committee reports regularly to the Board of Directors 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 Group, through their training and management standards and procedures, aim to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

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

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Note 28: Financial instruments (continued)

		2012		2011
		Carrying		Carrying
	Note	Amount	Fair values	Amount	Fair values
		$000’s	$000’s	$000’s	$000’s
Cash and cash equivalents	13	3,962	3,962	2,094	2,094
Trade and other receivables	14	13,429	13,429	13,441	13,441
Trade and other payables	18	(22,711)	(22,711)	(9,521)	(9,521)
Bank loan	19	(650)	(650)	-	-
Hire purchase liabilities	19	(6,227)	(6,227)	(2,590)	(2,590)
Insurance premium funding loans	19	(335)	(335)	(79)	(79)
Loans from related parties	25(b)(iii)	(2,739)	(2,739)	-	-
		(15,271)	(15,271)	3,345	3,345

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

Risk management strategies

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

Credit risks

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers.

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 monitoring and follow-up of accounts receivable on a regular basis, and 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 is made based on past experience and customer payment history patterns.

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

Note 28: Financial instruments (continued)

The Group's maximum exposure to credit risk is:

Cash and cash equivalents Trade receivables	2012 2011 $000’s $000’s 3,962 2,094 13,429 13,441
	17,391 15,535

The Group does not hold collateral against the credit risks, however, 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:

0 - 30 days not past due Past due 1 - 30 days Past due 31 – 60 days Past due 61 – 90 days Past due 90 days Provision for impairment Total	2012 2011 $000’s $000’s 9,218 6,782 2,226 6,124 504 387 358 - 1,455 148 (332) -
	13,429 13,441

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

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

The Group’s maximum exposure to credit risk for trade and other receivables at the reporting date by geographic region was $13,429 thousand (2011: $13,341 thousand) for Australia. The allowance for impairment for 2012 amounted to $322,000 (2011: nil).

Based on historic default rates, the Group believes that, apart from the above, no impairment allowance is necessary in respect of trade receivables not past due or past due by up to 30 days.

The movement in the allowance for impairment in respect trade receivables during the year was as follows:

The Group typically trades with counterparts that are considered blue-chip as a means of mitigating credit risk.

Balance 1 July Impairment loss provided Balance at 30 June	2012 2011 $000’s $000’s - - 332 -
	332 -

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Note 28: Financial instruments (continued)

Liquidity risks

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements: Liquidity risk is the risk that the Group will encounter difficulties to meet its contractual 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.

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

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

The following are the contractual maturities of financial liabilities including interest:

Note 28: Financial instruments (continued)

Market Risk

Market risk is the risk that changes in market prices, such as interest rates and equity prices will affect the Group’s income. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Interest rate risk

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

The Group's cash and cash equivalents are exposed to interest rate risks. 28% (2011: 35%) of cash and cash equivalents are held on a fixed rate basis.

The Group’s loans and borrowings are exposes to interest rate risks. An average nominal interest rate of 9.3%, being the average of all current facilities in note 16, has been used to calculate sensitivity.

2012

Non-derivative financial liabilities Bank loan Hire purchase liabilities Insurance premium funding Loans from related parties Trade and other payables	Carrying Amount Contractual Cash Flows 6 months or less 6-12 months 1-2 yrs 2-5 yrs > 5 yrs $000's $000's $000's $000's $000's $000's $000's 650 650 (650) - - - - 6,227 6,974 (1,456) (1,425) (1,870) (2,223) - 335 375 (200) (175) - - - 2,739 2,739 (2,739) - - - - 22,711 22,711 (22,711) - - - -
	32,662 33,449 (27,756) (1,600) (1,870) (2,223) -

2011

Non-derivative financial liabilities Hire purchase liabilities Insurance premium funding Trade and other payables	Carrying Amount Contractual Cash Flows 6 months or less 6-12 months 1-2 yrs 2-5 yrs > 5 yrs $000's $000's $000's $000's $000's $000's $000's 2,590 2,901 (484) (490) (970) (957) - 78 86 (86) - - - - 9,521 9,521 (9,521) - - - -
	12,189 12,508 (10,091) (490) (970) (957) -

Consolidated Group Cash and cash equivalents Loans and borrowings	2012 2011 +1% -1% +1% -1% $000’s $000’s $000’s $000’s 40 (40) 21 (21) 93 (93) 27 (27)
	133 (133) 48 (48)

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 of Directors has not implemented a formal capital management policy however they have implemented a dividend policy.

There were no changes in the Group’s approach to capital management during the year.

The Group is not subject to externally imposed capital requirements.

Currency risk

The Group receivables are all denominated in Australian dollars and accordingly no currency risk exists.

It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.

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Note 29: Financial liability

Note 29: Financial liability
Contingent consideration	2012 2011 $000’s $000’s 4,600 -
	4,600 -

Contingent consideration relates to performance shares that became issuable to the existing vendors of OGPL as a result of the business achieving set earnings before interest and taxation targets for the financial year ended 30 June 2012, refer to note 6(a)(i). 20,000,000 performance shares were issued with a right for 20,000,000 ordinary shares plus an additional 20,000,000 ordinary shares if maximum performance earnings before interest and taxation target of $6.5 million be achieved.

The performance shares value at the date of issue was $8,000,000 represented by 40 million shares valued at 20 cents per share. Due to the share price of OTOC Limited decreasing from $0.20 per share at the date of acquisition to $0.115 per share as at 30 June 2012 a gain of $3.4 million has been recorded in the Consolidated Statement of Comprehensive Income.

On 28 September the Directors passed a resolution to issue 40 million shares to the vendors of OGPL as the maximum performance earnings before interest and taxation target of $6.5 million was achieved. As a result the $4,600,000 financial liability was transferred to share capital on 28 September 2012.

Note 30: Controlled entities

The following entities are consolidated:

Name of Entity Country of Incorporation	Ownership Interest
	2012 2011
Parent Entity OTOC Limited Australia
Controlled Entity OTOC Group Pty Ltd (formerly OTOC Contracting Pty Ltd) Australia Xemi Pty Ltd Australia Emerson Stewart Pty Ltd Australia Whelans (WA) Pty Ltd Australia Whelans International Pty Ltd Australia	100 100 100 100 100 100 100 100 100 100

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Note 31: Parent entity disclosures

As at, and throughout, the financial year ending 30 June 2012 the parent company of the Group was OTOC Limited.

Results for the Period	2012	2011
	$000’s	$000’s
Profit (Loss) for the period	(886)	(282)
Other comprehensive income	-	-
Total comprehensive income for the year	(886)	(282)
Financial position of parent entity at year end
Current assets	4,639	2,826
Total assets	51,655	21,469
Current liabilities	8,879	910
Total liabilities	8,879	1,928
Total equity of the parent entity comprising of:
Share capital	4,588	12,142
Reserves	40,670	8,996
Retained earnings	(2,483)	(1,597)
Total equity	42,775	19,541

Parent entity guarantees in respect of Debts if its Subsidiaries

The parent entity has entered into a Deed of Cross Guarantee with the effect that the Group guarantees debts in respect of its subsidiaries. Further details of the Deed of Cross Guarantee and the subsidiaries subject to the deed, are disclosed in note 15.

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Note 32: Subsequent Events

(i) Disposal of Emerson Stewart Consulting

As at 30 June 2012 Management had committed to a plan to sell its Emerson Stewart Consulting Operations (“ES Operations”) segment which provides project management, engineering and environmental science services across the infrastructure, resources and energy sectors.

On 5 September 2012 the completion of sale of ES Operations was announced. OTOC received approximately $1 million as consideration for the sale.

(ii) Performance shares

The Group issued 20 million performance shares on 13 October 2011 as part of the consideration for the purchase of OTOC Group Pty Ltd under the terms of the purchase agreement entered into in June 2011. The purchase agreement allowed for the Performance shares to be converted into ordinary shares on the achievement of certain earnings milestones for the period ended 30 June 2012 (EBIT between $5.5m and $6.5m). These earnings milestones have been achieved for the period and subsequently, at a meeting of Directors of OTOC Limited held on 28 September 2012, the Board resolved to convert 20,000,000 performance shares into 40,000,000 ordinary shares as a result of OTOC Group Pty Ltd achieving prescribed earnings before interest and taxation in excess of $6,500,000.

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DIRECTORS’ DECLARATIOn

1. In the opinion of the directors of OTOC limited (“the Company”):

2. (a) the consolidated financial statements and notes set out on pages 23 to 64 and the Remuneration report in section 11 in the Directors’ report, are in accordance with the Corporations Act 2001 including:

   • (i) giving a true and fair view of the Group’s financial position as at 30 June 2012 and of its performance for the financial year ended on that date; and

   • (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and

3. (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

4. The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the chief executive officer and the chief financial officer for the financial year ended 30 June 2012.

Signed in accordance with a resolution of the directors:

Perth, 28 September 2012.

Tom Lawrence

Director

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ADDITIOnAL InFORMATIOn

Additional Information per ASX Listing Rules [Unaudited]

Shareholder Information as at 21 September 2012 [Post - Consolidation]

			% of Issued
	Shareholder	Shares	Capital
1	OCEAN TO OUTBACK ELECTICA < AP & TL LAMOND FAM>	37,732,000	24.65%
2	AMARA DARIO ANGELO	10,442,858	6.82%
3	TRUST CO AUST LTD	8,940,000	5.84%
4	BERTOLI CONTRACTING PL < BERTOLI FAM A/C >	7,320,000	4.78%
5	INSIDE-OUT CARPENTRY SVCS < MCNEILL FAM A/C >	7,320,000	4.78%
6	CONCEPT WEST COMMUNICATIO < T YOUNG FAM A/C>	7,320,000	4.78%
7	NAIRN & SON PL < NAIRN FAM A/C>	6,588,000	4.30%
8	MONTGOMERIE C K + G < MONTGOMERIE FAM A/C>	6,320,000	4.13%
9	WROXBY PL	3,686,049	2.41%
10	NATIONAL NOM LTD	3,090,545	2.02%
11	APPLE NOM PL < PLEDGE S/F A/C>	2,500,000	1.63%
12	AVANTEOS INV LTD < SYMETRY RETIRE SVS>	1,582,473	1.03%
13	CASSIM SALIM	1,500,000	0.98%
14	J P MORGAN NOM AUST LTD	1,409,901	0.92%
15	KEMAST INV PL < K M STOKES S/F NO>	1,250,000	0.82%
16	ICON HLDGS PL < K & A PAGANIN S/F>	1,180,000	0.77%
17	MCKINNON KENNETH C + V < MCKINNON S/F A/C >	1,050,000	0.69%
18	ICON HLDGS PL	1,000,000	0.65%
19	DONROSE INV PL < R & D FAM A/C >	1,000,000	0.65%
20	HILL BRIAN FRANCIS < BRIAN HILL A/C>	800,000	0.52%
		112,031,826	73.17%

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ADDITIOnAL InFORMATIOn

Substantial holders of 5% or more of fully paid ordinary shares [Post - Consolidation]

ADDITIOnAL InFORMATIOn

Securities Exchange

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The Group is listed on the Australian Securities Exchange. The Home exchange is Perth.

			Voting
Shareholder	Number	Person's votes	Power
(a) Ordinary Shares
Ocean to Outback Electrical Pty Ltd	37,732,000	37,732,000	24.65%
Amara Family Trust (including Cedarlake)	10,442,858	10,442,858	6.82%

Voting rights on a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

(b) Performance Shares – no voting rights

Corporate Information

The registered office of the Group is: OTOC Limited Level 1, 43 Kishorn Road Applecross WA 6153

The principal place of business is: OTOC Limited Level 1, 43 Kishorn Road Applecross WA 6153 Telephone: (08) 9317 0600

Company Secretary

Lisa Wynne

Share Registry

Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross WA 6153 Telephone: (08) 9315 2333 Facsimile: (08) 9315 2233

Ocean to Outback Electrical Pty Ltd	10,200,000	51%
Montgomerie C & G	2,000,000	10%
Bertoli Contracting Pty Ltd	2,000,000	10%
Concept West Communications Pty Ltd	2,000,000	10%
Inside-out Carpentry Services Pty Ltd	2,000,000	10%
Nairn & Son Pty Ltd	1,800,000	9%

(c) Options- no voting rights

Options issued under an employee share option plan 457,144

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	Ordinary Shares Performance Shares Options 12 - - 41 - - 74 - - 380 - 1 124 6 1
	631 6 2

Shareholders holding less than a marketable parcel is 64

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www.otoclimited.com.au

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72 OTOC LIMITED - ANNUAL FINANCIAL REPORT 2012

OTOC LIMITED Level 1, 43 Kishorn Road, Applecross WA 6153 p: +61 8 9317 0600 www.otoclimited.com.au

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