VINYL GROUP LTD - Annual Report 2007

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2007

AnnuAl RepoRt for the year ended 30 june 2007

MobilarM liMited abN 15 106 513 580

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DIReCtoRs’ RePoRt	1
AUDItoR’s InDePenDenCe DeCLARAtIon	5
DIReCtoRs’ DeCLARAtIon	6
InCoMe stAteMent	7
BALAnCe sHeet	8
CAsH FLoW stAteMent	9
stAteMent oF CHAnGes In eQUItY	10
notes to AnD FoRMInG PARt oF tHe ACCoUnts	11
InDePenDent AUDItoR’s RePoRt	39
CoRPoRAte DIReCtoRY	40

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DIReCtoRs’ RePoRt

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The Directors present their report together with the financial report of Mobilarm Limited (“the Company”) for the year ended 30 June 2007 and the auditor’s report thereon.

Directors

The directors of Mobilarm Limited in office during or since the end of the financial year are:

Mr Brenton Scott Mr Paul Price (Resigned 30 April 2007) Mr Kathal Spence Mr Andrew Hill Mr Lindsay Lyon (Appointed 26 September 2007)

Directors Meetings

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

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Director Number of Meetings Attended Number of meetings held during the
time the Director held office
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Director	Number of Meetings Attended	Number of meetings held during the time the Director held offce

Mr Brenton Scott	10	10
Mr Paul Price	5	8
Mr Kathal Spence	10	10
Mr Andrew Hill	10	10
Mr LindsayLyon	Nil	Nil

Interest in the shares of the company and related corporations:

As at the date of this report, the interests of the directors in the shares of the company and related corporations were:

Mobilarm Limited Ordinary Shares

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Director Number of Shares
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Director	Number of Shares

Mr Brenton Scott	42,257,640
Mr Kathal Spence	13,827,960
Mr Andrew Hill	2,000,000
Mr LindsayLyon	Nil

Company Secretary

The following person held the position of company secretary at the end of the financial year:

Mr Jason Parish

Mr Parish is an associate of CPA Australia, a member of the National Institute of Accountants and a full member of the Insolvency Practitioners Association of Australia. He holds a Bachelor of Business degree from Edith Cowan University in Western Australia.

Mr Parish has over 12 years experience in public accounting and corporate advisory as well as Non Profit and financial accounting. He has experience in the Insolvency and Business Turnaround Services (both public and private companies) as well as forensic accounting, business valuation and Investigating Accountant and due diligence report preparation and the requirements of ASIC.

DIReCtoRs’ RePoRt (continued)

The financial year ending 30 June 2007 has been extremely busy with the company making significant progress in several key areas.

Corporate Overview

It has been a year of many positive changes with excellent progress being made towards building a profitable and sustainable business in an exciting new marine safety product category.

As reported last year, the Company successfully reached a settlement with QuikTrak Limited with the allocation of 20,000,000 QTK share options. During the course of the year, these shares were placed in the market providing the Company with $2.0 million in growth capital. The Company still holds approximately 12 million shares on the balance sheet.

Since the close of the financial year on 30 June 2007, the Company has attracted a further $2.98M in investment capital, an event that attracted Macquarie Funds Management as an institutional investor. In addition, the company has been successful in applying for a Commonwealth Government Commercial Ready Grant which will fund 50% of a $2.2M development project to commercialise the next generation of man overboard systems which will be launched in May and July 2008.

Raymarine, one of the world’s leading recreational marine electronic brands, also entered the man overboard market in early 2007. Raymarine’s financial marketing resources have assisted greatly in the overall education and awareness of the man overboard product category. However, like Mobilarm, the channel evidence suggests that they also have found volume sales and therefore worthwhile profit from safety products in the recreational market extremely difficult; an outcome supporting Mobilarm’s strategic shift away from recreational into the commercial marine segments.

With the shift into commercial markets, the Company has reviewed its brand positioning. Over recent months, the Company has undergone a rebranding program to promote Mobilarm as a strong, safety-orientated company, providing marine technology products which professional mariners would trust their life with. Mobilarm is now recognised as an international supplier and authority on man overboard safety products with a strong focus on improving occupational health and safety in the commercial marine industry.

The branding changes have extended to the existing MOBi-lert product range in order to underpin the serious safety nature of man overboard alarms. The Company has also opened a new online store providing an international sales channel for the MOBi-lert range and soon, for the new products being launched to the commercial markets, namely the Crewsafe range of man overboard alarms and a unique Maritime Survivor Locating Device, the Mobilarm V100 VPIRB.

Excellent progress has been made on the technical development of these commercial marine products. The experience and knowledge gained over the past few years by the Company, through specific market feedback, talent appointment and active research has contributed greatly to enable the Company to provide a commercially-focused safety product to protect professional mariners at sea. During this time, the Company has applied for a number of patents relating to its new VHF Position Indicator Radio Beacon (VPIRB) innovation, a volume product expected to compete with marine Personal EPIRBs. The VPIRB will be introduced at the Offshore Technology Conference in Houston, USA in May 2008.

The new product range will address the urgent need for improved safety systems in the commercial marine market. Globally, the commercial fishing industry remains the second most dangerous work environment, with man overboard the single largest cause of fatalities. As education about marine safety increases, organisations throughout the world are beginning to implement changes in recognition of this serious workplace safety issue. The Spanish Government has legislated the use of man overboard safety systems, the Royal National Lifeboat Institute in the UK is funding the purchase of such equipment, and the National Institute of Occupational Safety and Health (USA) is planning to test and evaluate man overboard systems with an aim to prevent the high number of fatalities.

We continue to remain excited about the Company’s future and are focused on building a profitable and sustainable business for our shareholders. With our new commercial products targeted to be installed and piloted by commercial customers in Q1 FY2009, and with a number of orders already secured, we are expecting a strong turnaround in the Company’s financial performance.

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Principal Activities

The principal activities of the company during the financial year were the development, manufacturing and sale of a Man Overboard Safety Systems.

There were no other significant changes in the nature of the activities of the company during the financial year.

Dividends

No dividends were paid or declared for the financial year.

Operating Results for the Year

The loss of the company after providing for income tax amounted to ($1,813,363) (2006: Profit of $1,025,138).

State Of Affairs

There were no changes to the state of affairs of the company.

Likely Developments and Expected Results

The directors have excluded from this report information on likely developments in the operations of the entity and the expected results of those operations in future financial years, since, in the opinion of the directors, it would prejudice the interests of the company if this information were included.

Environmental Issues

The company’s operations are not regulated by any significant environmental regulations under a law of the Commonwealth or of a State of Territory.

Directors’ Benefits

Disclosure of benefits provided to directors during the financial year is made in notes 19 and 22 of the financial statements.

No options were granted over unissued shares or interests during or since the financial year by the company to directors or any of the five most highly remunerated officers as part of their remuneration.

Indemnification and Insurance of Directors

During or since the end of the financial year the company has not given an indemnity or entered an agreement to indemnify, or paid or agreed to pay insurance premiums in relation to any directors, executive officers or auditor.

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

The auditor’s independence declaration is set out on page 6 and forms part of the directors’ report for the year ended 30 June 2007.

DIReCtoRs’ RePoRt (continued)

Non-Audit Services

The following non-audit services were provided by the entity’s auditor, Ernst & Young. The directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act. The nature and scope of each type of non-audit service provided means that auditor independence was not compromised.

Ernst & Young received or are due to receive the following amounts for the provision of non-audit services:

Tax compliance services $14,135 Other non audit services $4,000

Events subsequent to balance date

Since the end of the financial year the company

Has issued a non renounceable Rights Issue of approximately 41,507,294 ordinary fully paid shares at a price of 7 cents each, on the basis of 1 new share for every 4 ordinary shares held at record date. The aim of the Issue is to raise a total of $2.905 million. As at the date of this report, the Company has raised $2.98 million.
In conjunction with the Macquarie Funds Management investment, Mobilarm has signed a mandate with Bell Potter, one of Australia’s leading investment advisory firms, to lead the company towards an IPO in the June 2008 timeframe. The listing decision will be based on the achievement of agreed milestones which includes the company showing a clear path towards profitability.
On the 24[th] of September the company entered into an agreement with the Australian Government under the Commercial Ready Grant program to jointly fund (50/50) the development of our next generation man overboard safety system, with a total project cost of $2.2 million.
The company has agreed to a joint development with Jeppesen Marine (a Boeing Company) to integrate the Mobilarm man overboard system into their C-MAP marine cartography application. This integration will provide automatic MOB (man overboard) alarms and track back information on C-MAP compatible systems. Jeppesen’s C-MAP is the leading brand of marine cartography providing the world largest marine navigation electronic companies such as Navman and Furuno.
Asiana Pty Ltd has converted $300,000 portion of its Convertible Note into shares in Mobilarm.
Jayden Holdings Pty Ltd and Brenton Scott have converted their loan accounts into equity in Mobilarm Ltd. Jayden Holdings Pty Ltd converted its loan balance of $205,952.42 for 2,942,177 shares at 7 cents. Brenton Scott converted his loan account balance of $24,192.20 for 345,603 shares at 7 cents.
Since Balance date the share price of the QuikTrak shares has dropped. The trading of these shares since 30 June 2007 shows fluctuations in value which make it impractical to put an impairment value into this report. Therefore, the shares have been valued as at 30 June 2007. At the date of this report the share price was 1.9 cents.

Signed in accordance with a resolution of the Directors.

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Brenton Scott Executive Chairman

Perth, Western Australia 29 April 2008

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AUDItoR’s InDePenDenCe DeCLARAtIon

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DIReCtoRs’ DeCLARAtIon

In the opinion of the directors of Mobilarm Limited (“the Company”):

(a) the financial statements and notes set out on pages 7 to 38 are in accordance with the Corporations Act 2001, including:
i) giving a true and fair view of the company’s financial position as at 30 June 2007 as represented by the results of its operations and cash flows for the year ended on that date; and
ii) complying with Accounting Standards in Australia and the Corporations Regulations 2001; and
(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.

Signed in accordance with a resolution of the Directors

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B A Scott Director

Perth, Western Australia 29 April 2008

6 MoBILARM LIMIteD - AnnUAL RePoRt 2007

InCoMe stAteMent

FOR THE YEAR ENDED 30 JUNE 2007

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Note Revenue Sale of goods Rendering of services Export development grant Interest Rental income Other income 2(a) Changes in inventories of fnished goods and work in progress Raw materials and consumables used Employee benefts 2(d) Depreciation and amortisation 2(c) Advertising Audit and tax Accountancy Freight and cartage External consultants and contractors Rental Travel and accommodation Provision for doubtful debts 5 Payroll tax Legal fees Telephone and internet charges Insurance Printing, postage and stationery Motor vehicles Finance costs 2(b) Foreign exchange gain/(loss) Other expenses Proft/(Loss) before income tax Income tax (expense)/credit 3(a) Proft/(Loss) after income tax from continuing operations 15	Mobilarm Limited 2007 2006 157,023 121,208 - 129,918 14,434 89,851 28,594 1,424 66,885 57,819 266,936 400,220 738,990 2,662,316 (430,270) (38,386) (161,825) (84,001) (833,013) (639,353) (772,852) (543,992) (140,615) (88,997) (49,035) (90,750) (22,966) (32,176) (17,797) (3,048) (339,067) (294,519) (187,131) (141,731) (96,950) (59,903) 34,329 7,297 (3,378) (1,933) (10,805) (91,287) (27,610) (28,308) (28,942) (20,201) (8,593) (13,051) (11,706) (26,782) (158,591) (98,205) (108) (1,159) (131,258) (89,557) (2,392,257) 682,494 578,894 342,644 (1,813,363) 1,025,138	Mobilarm Limited 2007 2006 157,023 121,208 - 129,918 14,434 89,851 28,594 1,424 66,885 57,819 266,936 400,220 738,990 2,662,316 (430,270) (38,386) (161,825) (84,001) (833,013) (639,353) (772,852) (543,992) (140,615) (88,997) (49,035) (90,750) (22,966) (32,176) (17,797) (3,048) (339,067) (294,519) (187,131) (141,731) (96,950) (59,903) 34,329 7,297 (3,378) (1,933) (10,805) (91,287) (27,610) (28,308) (28,942) (20,201) (8,593) (13,051) (11,706) (26,782) (158,591) (98,205) (108) (1,159) (131,258) (89,557) (2,392,257) 682,494 578,894 342,644 (1,813,363) 1,025,138
		400,220 2,662,316 (38,386) (84,001) (639,353) (543,992) (88,997) (90,750) (32,176) (3,048) (294,519) (141,731) (59,903) 7,297 (1,933) (91,287) (28,308) (20,201) (13,051) (26,782) (98,205) (1,159) (89,557)
		682,494 342,644
		1,025,138

The income statement should be read in conjunction with the notes to the financial statements.

BALAnCe sHeet

AS AT 30 JUNE 2007

Note CURRENT ASSETS Cash assets 18 Trade and other receivables 5 Inventories 6 Prepayments TOTAL CURRENT ASSETS NON-CURRENT ASSETS Available-for-sale investments 7 Derivatives 8 Plant and equipment 9 Intangible assets 10 Deferred tax asset TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables 11 Interest bearing loans and borrowings 12 Provisions 13 TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Provisions 13 Interest Bearing loans and borrowings 12 Deferred tax liability 3(c) TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity 14 Accumulated Losses 15 Reserves 16 TOTAL EQUITY	Mobilarm Limited 2007 2006 315,357 343,527 654,369 65,638 461,084 891,356 33,851 40,591 1,464,661 1,341,112 1,388,382 2,501,054 - 1,680,000 155,219 250,467 125,103 613,613 - - 1,668,704 5,045,134 3,133,365 6,386,246 343,006 483,894 788,165 1,121,992 41,487 33,582 1,172,658 1,639,468 9,423 12,871 17,198 - 332,300 646,581 358,921 659,452 1,531,579 2,298,920 1,601,786 4,087,326 5,042,182 4,981,037 (4,292,742) (2,479,379) 852,346 1,585,668 1,601,786 4,087,326	Mobilarm Limited 2007 2006 315,357 343,527 654,369 65,638 461,084 891,356 33,851 40,591 1,464,661 1,341,112 1,388,382 2,501,054 - 1,680,000 155,219 250,467 125,103 613,613 - - 1,668,704 5,045,134 3,133,365 6,386,246 343,006 483,894 788,165 1,121,992 41,487 33,582 1,172,658 1,639,468 9,423 12,871 17,198 - 332,300 646,581 358,921 659,452 1,531,579 2,298,920 1,601,786 4,087,326 5,042,182 4,981,037 (4,292,742) (2,479,379) 852,346 1,585,668 1,601,786 4,087,326
		1,341,112
		2,501,054 1,680,000 250,467 613,613 -
		5,045,134
		6,386,246
		483,894 1,121,992 33,582
		1,639,468
		12,871 - 646,581
		659,452
		2,298,920
		4,087,326
		4,981,037 (2,479,379) 1,585,668
		4,087,326

The balance sheet should be read in conjunction with the notes to the financial statements.

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CAsH FLoW stAteMent

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FOR THE YEAR ENDED 30 JUNE 2007

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Note CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Export market development grant Payments to suppliers and employees Interest received Payment for research & development 10 Interest and other borrowing costs paid R&D tax refund NET CASH FLOWS USED IN OPERATING ACTIVITIES 18 CASH FLOWS FROM INVESTING ACTIVITIES Payments for plant and equipment Proceeds on sale of plant and equipment Purchase of intangible assets 10 Proceeds from exercising and selling options Cost of exercising and selling of options Proceeds on disposal of shares NET CASH FLOWS PROVIDED BY INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Repayment of borrowings – related parties Repayment of convertible notes Proceeds from issue of convertible notes Proceeds from fnance lease NET CASH FLOWS PROVIDED BY/(USED IN) FINANCING ACTIVITIES NET INCREASE/(DECREASE) IN CASH HELD CASH AT THE BEGINNING OF THE FINANCIAL YEAR CASH AT THE END OF THE FINANCIAL YEAR 18	Mobilarm Limited 2007 2006 244,070 282,053 14,434 89,851 (1,908,665) (1,477,149) 28,594 1,424 (149,460) (59,873) (110,725) (12,858) - 342,644 (1,881,752) (833,908) (6,710) (19,136) - - - (7,227) 2,874,968 - (1,097,250) - 160,397 984,120 1,931,405 957,757 (27,870) (322,987) (88,000) - - 500,000 38,047 - (77,823) 177,013 (28,170) 300,862 343,527 42,665 315,357 343,527	Mobilarm Limited 2007 2006 244,070 282,053 14,434 89,851 (1,908,665) (1,477,149) 28,594 1,424 (149,460) (59,873) (110,725) (12,858) - 342,644 (1,881,752) (833,908) (6,710) (19,136) - - - (7,227) 2,874,968 - (1,097,250) - 160,397 984,120 1,931,405 957,757 (27,870) (322,987) (88,000) - - 500,000 38,047 - (77,823) 177,013 (28,170) 300,862 343,527 42,665 315,357 343,527
		(833,908)
		(19,136) - (7,227) - - 984,120
		957,757
		(322,987) - 500,000 -
		177,013
		300,862 42,665
		343,527

The cash flow statement should be read in conjunction with the notes to the financial statements.

stAteMent oF CHAnGes In eQUItY

AS AT 30 JUNE 2007

COMPANY At 1 July 2006 Net (loss)/proft for the year Issue of equity Changes in fair value of available-for-sale investments net of tax As at 30 June 2006 Net (loss)/proft for the year Changes in fair value of available-for-sale investments net of tax Issue of equity Equity Adjustment As at 30 June 2007	Attributable to equity holders of Mobilarm Limited Issued Capital Retained Earnings Reserves (Note 16) Total Equity 4,981,037 (3,504,517) 509,530 1,986,050 - 1,025,138 - 1,025,138 - - - - - - 1,076,138 1,076,138 4,981,037 (2,479,379) 1,585,668 4,087,326 - (1,813,363) - (1,813,363) - - (733,322) (733,322) 60,000 - - 60,000 1,145 - - 1,145 5,042,182 (4,292,742) 852,346 1,601,786	Attributable to equity holders of Mobilarm Limited Issued Capital Retained Earnings Reserves (Note 16) Total Equity 4,981,037 (3,504,517) 509,530 1,986,050 - 1,025,138 - 1,025,138 - - - - - - 1,076,138 1,076,138 4,981,037 (2,479,379) 1,585,668 4,087,326 - (1,813,363) - (1,813,363) - - (733,322) (733,322) 60,000 - - 60,000 1,145 - - 1,145 5,042,182 (4,292,742) 852,346 1,601,786
		4,087,326
		(1,813,363) (733,322) 60,000 1,145
		1,601,786

The statement of changes in equity should be read in conjunction with the notes to the financial statements.

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notes to AnD FoRMInG PARt oF tHe ACCoUnts FOR THE YEAR ENDED 30 JUNE 2007

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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standards. The financial report has also been prepared on a historical cost basis, except for derivative financial instruments and available-for-sale investments, which have been measured at fair value.

The financial report is presented in Australian Dollars and all values are rounded to the nearest dollar.

(b) Statement of compliance

The financial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS).

In the current year the Company has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) and the Urgent Issues Group that are relevant to its operations and effective for annual reporting periods beginning 1 July 2006. The adoption of these new and revised Standards and Interpretations did not have any effect on the financial position or performance of the Company.

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective have not been adopted by the Company for the annual reporting period ending 30 June 2007. These are outlined in the table below.

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Reference Title Summary Application Impact on Company Application
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Reference	Title	Summary	Application date of standard*	Impact on Company Financial Report	Application date for Company

AASB 2005-10	Amendments to Australian Accounting Standards [AASB 132, AASB 101, AASB 114, AASB 117, AASB 133, AASB 139, AASB 1, AASB 4, AASB 1023 & AASB 1038]	Amendments arise from the release in August 2005 of AASB 7 Financial Instruments: Disclosures	1 January 2007	AASB is a disclosure standard so will have no impact on the amounts included in the Company’s fnancial statements. However, the amendments will result in changes to the fnancial instrument disclosures in the Company’s fnancial report.	1 July 2007
AASB 2007-1	Amendments to Australian Accounting Standards arising from AASB Interpretation 11 [AASB 2]	Amending standard issued as a consequence of AASB Interpretation 11 Group and Treasury Share Transactions	1 March 2007	This is consistent with the Company’s existing accounting policies for share- based payments so will have no impact.	1 July 2007

notes to AnD FoRMInG PARt oF tHe ACCoUnts FOR THE YEAR ENDED 30 JUNE 2007 (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(b) Statement of compliance (continued)

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Reference Title Summary Application Impact on Company Application
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Reference	Title	Summary	Application date of standard*	Impact on Company Financial Report	Application date for Company

AASB 2007-2	Amendments to Australian Accounting Standards arising from AASB Interpretation 12 [AASB 1, AASB 117, AASB 118, AASB 120, AASB 121, AASB 127, AASB 131 & AASB 139]	Amending standard issued as a consequence of AASB Interpretation 12 Service Concession Arrangements.	1 January 2008	As the Company currently has no service concession arrangements or public-private- partnerships (PPP), it is expected that this interpretation will have no impact on its fnancial report.	1 July 2008
AASB 2007-3	Amendments to Australian Accounting Standards arising from AASB 8 [AASB 5, AASB 6, AASB 102, AASB 107, AASB 119, AASB 127, AASB 134, AASB 136, AASB 1023 & AASB 1038]	Amending standard issued as a consequence of AASB 8 Operating Segments.	1 January 2009	AASB 8 is a disclosure standard so will have no direct impact on the amounts included in the Company’s fnancial statements. However the new standard may have an impact on the segment disclosures included in the Company’s fnancial report.	1 July 2009
AASB 2007-4	Amendments to Australian Accounting Standards arising from ED 151 and Other Amendments	The standard is a result of the AASB decision that, in principle, all accounting policy options currently existing in IFRS should be included in the Australian equivalents to IRFS and the additional Australian disclosures should be eliminated, other than those considered particularly relevant in the Australian reporting environment.	1 July 2007	As the Company does not anticipate changing any of its accounting policy choices as a result of the issue of AASB 2007-4 this standard will have no impact on the amounts included in the Company’s fnancial statements. Changes to disclosure requirements will have no direct impact on the amounts included in the Company’s fnancial statements. However the new standard may have an impact on the disclosures included in the Company’s fnancial report.	1 July 2007

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Reference	Title	Summary	Application date of standard*	Impact on Company Financial Report	Application date for Company

AASB 2007-6	Amendments to Australian Accounting Standards arising from AASB 123 [AASB 1, AASB 101, AASB 107, AASB 111, AASB 116 & AASB 138 and Interpretations 1 & 12]	Amending standard issued as a consequence of AASB 123 (revised) Borrowing Costs	1 January 2009	As the Company does not currently construct or produce any qualifying assets which are fnanced by borrowings the revised standard will have no impact.	1 July 2009
AASB 2007-7	Amendments to Australian Accounting Standards [AASB 1, AASB 2, AASB 4, AASB 5, AASB 107 & AASB 128]	Amending standard issued as a consequence of AASB 2007-4	1 July 2007	Refer to AASB 2007-4 above.	1 July 2007
AASB 7	Financial Instruments: Disclosures	New standard replacing disclosure requirements of AASB 132.	1 January 2007	Refer to AASB 2005-10 above.	1 July 2007
AASB 8	Operating Segments	This new standard will replace AASB 114 Segment Reporting and adopts a management approach to segment reporting.	1 January 2009	Refer to AASB 2007-3 above.	1 July 2009
AASB 101 (revised October 2006)	Presentation of Financial Statements.	Many of the disclosures from the previous GAAP and all of the guidance from the previous GAAP are not carried forward in the October 2006 version of AASB 101. The revised standard includes some text from IAS 1 that is not in the existing AASB 101 and has fewer additional Australian disclosure requirements than the existing AASB 101.	1 January 2007	AASB 101 is a disclosure standard so it will have no direct impact on the amounts included in the Company’s fnancial statements. However, the revised standard may result in changes to the disclosures included in the Company’s fnancial report.	1 July 2007

notes to AnD FoRMInG PARt oF tHe ACCoUnts FOR THE YEAR ENDED 30 JUNE 2007 (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(b) Statement of compliance (continued)

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Reference	Title	Summary	Application date of standard*	Impact on Company Financial Report	Application date for Company

AASB 123 (revised June 2007)	Borrowing Costs	AASB 123 previously permitted entities to choose between expensing all borrowing costs and capitalizing those that were attributable to the acquisition, construction or production of a qualifying asset. The revised version of AASB 23 requires borrowing costs to be capitalized if they are directly attributable to the acquisition, construction or production of a qualifying asset.	1 January 2009	Refer to AASB 2007-6 above.	1 July 2009
AASB Interpretation 10	Interim Financial Reporting and Impairment.	Addresses an inconsistency between AASB 124 Interim Financial Reporting and the impairment requirements relating to goodwill in AASB 136 Impairment of Assets and equity instruments classifed as available for sale in AASB 139 Financial Instruments: Recognition and Measurement.	1 November 2006	The prohibitions on reversing impairment losses in AASB 136 and AASB 139 to take precedence over the more general statement in AASB 134 that the interim reporting is not expected to have any impact on the Company’s fnancial report.	1 July 2007
AASB Interpretation 11	Group and Treasury Share Transactions	Specifes that a share based payment transaction in which an entity receives services as consideration for its own equity instruments shall be accounted for equity settled.	1 March 2007	Refer to AASB 2007-1 above.	1 July 2007

14 MoBILARM LIMIteD - AnnUAL RePoRt 2007

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Reference Title Summary Application Impact on Company Application
date of Financial Report date for
standard Company
AASB Service Clarifies how 1 January Refer to AASB 2007-2 1 July 2008
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Reference	Title	Summary	Application date of standard*	Impact on Company Financial Report	Application date for Company
AASB	Service	Clarifes how	1 January	Refer to AASB 2007-2	1 July 2008
Interpretation 12	Concession Arrangements	operators recognize the infrastructure as a fnancial asset – not as property, plant and equipment.	2008	above.
AASB Interpretation 129 (revised June 2007)	Service Concession Arrangements: Disclosures	The revised interpretation was issued as a result of the issue of Interpretation 12 and requires specifc disclosures about service concession arrangements entered into by an entity, Whether as a concession provider or a concession operator.	1 January 2008	Refer to AASB 2007-2 above.	1 July 2008
IFRIC Interpretation 13	Customer Loyalty Programs	Deals with the accounting for customer loyalty programs, which are used by companies to provide incentives to their customers to buy their products or use their services.	1 July 2008	The Company does not have any customer loyalty programs and as such this interpretation is not expected to have any impact on the Company’s fnancial report.	1 July 2008
IFRIC Interpretation 14	IAS 19 – The Asset Ceiling: Availability of Economic Benefts and Minimum Funding Requirements.	Aims to clarify how to determine in normal circumstances the limit on the asset that an employer’s balance sheet may contain in respect of its defned beneft pension plan.	1 January 2008	The Company does not have a defned beneft pension plan and as such this interpretation will not have an impact on the Company’s fnancial report.	1 July 2008

*Application date is for the annual reporting periods beginning on or after the date shown in the above table.

notes to AnD FoRMInG PARt oF tHe ACCoUnts FOR THE YEAR ENDED 30 JUNE 2007 (CONTINUED)

Significant accounting judgments, estimates and assumptions

(i) Significant accounting estimates and assumptions

The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:

Impairment of goodwill and intangibles with indefinite useful lives

The Company determines whether goodwill and intangibles with indefinite useful lives are impaired at least on an annual basis. This requires an estimation of the recoverable amount of the cash generating units to which the goodwill and intangibles with indefinite useful lives are allocated. The assumptions used in this estimation of recoverable amount and the carrying amount of goodwill and intangibles with indefinite useful lives are discussed in note 10.

Revenue recognition

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

(i) Sale of goods

Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Risks and rewards of ownership are considered passed to the buyer at the time of delivery of the goods to the customer.

(ii) Rendering of services

Revenue from the provision of engineering contracting services is recognised by reference to the stage of completion of a contract.

Stage of completion is measured by reference to labour hours incurred to date as a percentage of total estimated labour hours for each contract.

When the contract outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.

(iii) Interest income

Revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

(iv) Rental income

Rental income from the sub-lease of the Company’s rented premises is accounted for on a straight-line basis over the lease term. Contingent rental income is recognised as income in the periods in which it is earned.

Government grants

Government grants are recognised when there is reasonable assurance that the grant will be received and all attaching conditions will be complied with.

When the grant relates to an expense item, it is recognised as income over the periods necessary to match the grant on a systematic basis to the costs that it is intended to compensate.

16 MoBILARM LIMIteD - AnnUAL RePoRt 2007

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When the grant relates to an asset, the fair value is credited to a deferred income account and is released to the income statement over the expected useful life of the relevant asset by equal annual instalments.

Borrowing costs

Borrowing costs are recognised as an expense when incurred.

Leases

The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.

(i) The Company as a lessee

Finance leases, which transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised as an expense in profit or loss.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term.

Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the lease term. Lease incentives are recognised in the income statement as an integral part of the total lease expense.

Cash and cash equivalents

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

For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

Trade and other receivables

Trade receivables, which generally have 30-90 day terms, are recognised and carried at original invoice amount less an allowance for any uncollectible amounts.

An allowance for doubtful debts is made when there is objective evidence that the Company will not be able to collect the debts. Bad debts are written off when identified.

Inventories

Inventories are valued at the lower of cost and net realisable value.

Costs incurred in bringing each product to its present location and condition is accounted for as follows:

Raw materials – purchase cost on a first-in, first-out basis; and

Finished goods and work-in-progress – cost of direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

notes to AnD FoRMInG PARt oF tHe ACCoUnts FOR THE YEAR ENDED 30 JUNE 2007 (CONTINUED)

Derivative financial instruments and hedging

Derecognition of financial assets and financial liabilities

(i) Financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:

The rights to receive cash flows from the asset have expired;
The Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass-through’ arrangement; or
The Company has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Company’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration received that the Company could be required to repay.

When continuing involvement takes the form of a written and/or purchased option (including a cash-settled option or similar provision) on the transferred asset, the extent of the Company’s continuing involvement is the amount of the transferred asset that the Company may repurchase, except that in the case of a written put option (including a cash-settled option or similar provision) on an asset measured at fair value, the extent of the Company’s continuing involvement is limited to the lower of the fair value of the transferred asset and the option exercise price.

(ii) Financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

Impairment of financial assets

The Company assesses at each balance sheet date whether a financial asset or group of financial assets is impaired.

(iii) Available-for-sale investments

If there is objective evidence that an available-for-sale investment is impaired, an amount comprising the difference between its cost (net of any principal repayment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to the income statement. Reversals of impairment losses for equity instruments classified as available-for-sale are not recognised in profit. Reversals of impairment losses for debt instruments are reversed through profit or loss if the increase in an instrument’s fair value can be objectively related to an event occurring after the impairment loss was recognised in profit or loss.

18 MoBILARM LIMIteD - AnnUAL RePoRt 2007

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Foreign currency translation

Both the functional and presentation currency of the Company is Australian dollars (“A$”). The Company determines its own functional currency and items included in the financial statements of the Company are measured using that functional currency.

Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date.

All exchange differences in the financial report are taken to profit or loss.

Non monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction.

Non monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Income tax

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date.

Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences except when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.

Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

notes to AnD FoRMInG PARt oF tHe ACCoUnts FOR THE YEAR ENDED 30 JUNE 2007 (CONTINUED)

Other taxes

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

When the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
Receivables and payables, which are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.

Cash flows are included in the Cash Flow Statement on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

Property, plant and equipment

Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement only if it is eligible for capitalisation.

Land and buildings are measured at fair value less accumulated depreciation on buildings and less any impairment losses recognised after the date of the revaluation.

Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:

Plant and equipment – 2.5 to 20 years

The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end.

(i) Impairment

The carrying values of plant and equipment are reviewed for impairment at each reporting date, with the recoverable amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired.

The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value in use. 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 an asset that does not generate largely independent cash inflows, recoverable amount is determined for the cashgenerating unit to which the asset belongs, unless the asset’s value in use can be estimated to be close to its fair value.

An impairment exists when the carrying value of an asset or cash-generating units exceeds its estimated recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount.

For plant and equipment, impairment losses are recognised in the income statement in the cost of sales line item.

20 MoBILARM LIMIteD - AnnUAL RePoRt 2007

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(ii) Derecognition and disposal

An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.

Investments and other financial assets

Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-forsale investments, as appropriate. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transactions costs. The Company determines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this designation at each financial year-end.

All regular way purchases and sales of financial assets are recognised on the trade date i.e. the date that the Company commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets under contracts that require delivery of the assets within the period established generally by regulation or convention in the marketplace.

(i) Financial assets at fair value through profit or loss

Financial assets classified as held for trading are included in the category ‘financial assets at fair value through profit or loss’. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. Derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on investments held for trading are recognised in profit or loss.

(ii) Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when Mobilarm has the positive intention and ability to hold to maturity. Investments intended to be held for an undefined period are not included in this classification. Investments that are intended to be held-to-maturity, such as bonds, are subsequently measured at amortised cost. This cost is computed as the amount initially recognised minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initially recognised amount and the maturity amount. This calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums and discounts. For investments carried at amortised cost, gains and losses are recognised in profit or loss when the investments are derecognised or impaired, as well as through the amortisation process.

(iii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

(iv) Available-for-sale investments

Available-for-sale investments are those non-derivative financial assets that are designated as available-for-sale or are not classified as any of the three preceding categories. After initial recognition available-for sale investments are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is recognised in profit or loss.

notes to AnD FoRMInG PARt oF tHe ACCoUnts FOR THE YEAR ENDED 30 JUNE 2007 (CONTINUED)

The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business on the balance sheet date. For investments with no active market, fair value is determined using valuation techniques. Such techniques include using recent arm’s length market transactions; reference to the current market value of another instrument that is substantially the same; discounted cash flow analysis and option pricing models.

Intangible assets

Intangible assets acquired are initially measured at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is charged against profits in the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised over the useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed at least at each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, which is a change in accounting estimate. The amortisation expense on intangible assets with finite lives is recognised in profit or loss in the expense category consistent with the function of the intangible asset.

Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash-generating unit level. Such intangibles are not amortised. The useful life of an intangible asset with an indefinite life is reviewed each reporting period to determine whether indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from indefinite to finite is accounted for as a change in an accounting estimate and is thus accounted for on a prospective basis.

Research and development costs

Research costs are expensed as incurred. An intangible asset arising from development expenditure on an internal project is recognised only when the Company can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the development and the ability to measure reliably the expenditure attributable to the intangible asset during its development. Following the initial recognition of the development expenditure, the cost model is applied requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses. Any expenditure so capitalised is amortised over the period of expected benefits from the related project.

The carrying value of an intangible asset arising from development expenditure is tested for impairment annually when the asset is not yet available for use or more frequently when an indication of impairment arises during the reporting period.

A summary of the policies applied to the Company’s intangible assets is as follows:

Patents and Licences AASB 138.118 Useful lives: 5 years Amortisation method used: Straight Line Internally generated or acquired: Acquired Impairment testing AASB 136.10: Annually and more frequently when an indication of impairment exists (2005: Annually and more frequently when an indication of impairment exists).

22 MoBILARM LIMIteD - AnnUAL RePoRt 2007

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Development Costs AASB 138.118 Useful lives: Finite (2005: Finite)

Amortisation method used: Amortised over the period of expected future sales from the related project on a straightline basis (2005: Amortised over the period of expected future sales from the related project on a straight-line basis). Internally generated or acquired: Internally generated

Impairment testing AASB 136.10: Annually for assets not yet available for use and more frequently when an indication of impairment exists. The amortisation method is reviewed at each financial year-end (2005: Annually for assets not yet available for use and more frequently when an indication of impairment exists. The amortisation method is reviewed at each financial year-end).

The patents and licences have been sought to be granted for a minimum of 5 years by the relevant government agency with the option of renewal without significant cost at the end of this period provided that the Company meets certain predetermined targets. The fact that patents and licences have previously been renewed and that the evidence supports the meeting of these targets has allowed the Company to determine that there is no forseeable limit to the period over which the assets are expected to generate net cash inflows for the Company. Thus, the assets have indefinite useful life.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the asset is derecognised.

Impairment of assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset’s value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cashgenerating unit is considered impaired and is written down to its recoverable amount.

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. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is treated as a revaluation decrease).

An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

Trade and other payables

Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services provided to the Company prior to the end of the financial year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services.

notes to AnD FoRMInG PARt oF tHe ACCoUnts FOR THE YEAR ENDED 30 JUNE 2007 (CONTINUED)

Interest-bearing loans and borrowings

All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs.

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.

Gains and losses are recognised in profit or loss when the liabilities are derecognised.

Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

When the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the income statement net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability.

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

Employee leave benefits

(i) Wages, salaries, annual leave and sick leave

Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable.

(ii) Long service leave

The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures, and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.

Contributed equity

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

24 MoBILARM LIMIteD - AnnUAL RePoRt 2007

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2
REVENUE AND EXPENSES
2(a)
Other income
Net gain on disposal of available-for-sale investments
Derivatives – mark-to-market
Debt forgiven
Other
2(b)
Finance costs
Interest
2(c)
Individually signifcant expenses included in proft/(loss)
from ordinary activities before income tax expense
Depreciation and amortisation of plant and equipment
Amortisation of intangible assets
Inventory \ written off during the year
Doubtful debts
Rental – operating leases
Superannuation contributions
2(d)
Employee benefts expense
Wages and salaries and on-costs
Director fees
Superannuation costs
2(e)
Research and development costs
Research and development costs charged directly to the
income statement
Amortisation of capitalised development costs
2(f)
Auditors’ remuneration
Amounts received or due and receivable by Ernst & Young
Australia for:
An audit of the fnancial report of the entity
Other services:
- Accounting assistance
- Other services – Tax (R & D Rebate)

Mobilarm Limited
2007
2006
$
$
632,936
932,834
100,000
1,680,000
-
31,175
6,054
18,307
738,990
2,662,316
158,591
98,205
133,465
210,075
639,387
333,917
772,852
543,992
461,890
-
(34,329)
(7,297)
187,131
141,731
64,568
46,033
720,426
533,320
48,019
60,000
64,568
46,033
833,013
639,353
-
-
182,947
136,056
27,500
30,000
4,000
9,150
14,135
35,000
45,635
74,150

notes to AnD FoRMInG PARt oF tHe ACCoUnts FOR THE YEAR ENDED 30 JUNE 2007 (CONTINUED)

3 INCOME TAX (a) The major components of the current income tax expense are: Current income tax charge Prior year tax adjustment Deferred tax liabilities Deferred tax assets Tax refund received for claim of research and development activities Income tax expense/(beneft) reported in the income statement (b) A reconciliation between the income tax expense and the Prima facie income tax expense/(beneft) calculated @ 30% (2006: Add tax effect of: Non deductible entertainment Other non-deductible items Tax proft on sale of investments Accounting amortisation of fxed assets Amortisation of intangible assets Sub-total Less tax effect of: Accounting proft on sale of investments Accounting proft on revaluation of investments R&D capitalised Tax depreciation on fxed assets Research and development claim income tax Current year income tax expenses/(beneft) Tax effect of losses not recognised R&D claim not previously recognised Income tax expense/(Beneft) (c) Deferred income tax Deferred income tax as at 30 June 2007 relates to the following:- Revaluation of available for sale investments to fair market value (refer note 16) Tax beneft from capital raising costs (d) Income tax losses Future income tax beneft arising from tax losses not recognised at reporting date	Mobilarm 2006 $ - - - - (578,894) (578,894) (544,009) 393 13,246 723,933 37,913 184,423 959,908 (219,881) (71,760) (52,976) (289,520) (634,137) (218,238) 135,193 (289,374) (372,419) 365,291 (32,991) 332,300 504,844	Limited 2006 $ - - - - (342,644)
		(342,644) 204,748 846 39,800 - 63,023 100,175
		203,844 - (504,000) - (78,716) -
		(582,716) (174,124) 174,124 (342,644)
		(342,644)
		679,572 (32,991)
		646,581
		837,213

26 MoBILARM LIMIteD - AnnUAL RePoRt 2007

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4 DIVIDENDS PAID AND PROPOSED There were no dividends paid or declared for the fnancial year ended 30 June 2007 (30 June 2006: nil). 5 TRADE AND OTHER RECEIVABLES Trade debtors Less: provision for doubtful debts Goods and services tax R & D Rebate (a) Allowance for impairment loss Trade receivables are non-interest bearing and are generally on 30-60 day terms. A provision for impairment loss is recognized when there is objective evidence that an individual trade receivable is impaired. (b) Movement in provision for doubtful debts -balance at beginning of year -bad debts previously provided for written off during the year -bad and doubtful debts provided for during the year -balance at end of year 6 INVENTORIES At cost Raw materials and stores Finished goods Total inventories at lower of cost and net realisable value 7 AVAILABLE-FOR-SALE INVESTMENTS Shares in listed companies at fair value Impaired Value of Shares	Mobilarm 2006 $ - - 62,094 (5,000) 57,094 18,381 578,894 654,369 39,329 (34,329) - 5,000 327,327 133,757 461,084 1,388,382 1,388,382	Limited 2006 $ - - 84,960 (39,329) 45,631 20,007 - 65,638 46,626 - (7,297)
		39,329
		792,821 98,535 891,356 2,501,054 2,501,054

Available-for-sale investments consists of 12,072,888 ordinary shares in Quicktrak Networks Limited valued on 30 June 2007 at 11.5 cents and therefore have no fixed maturity date or coupon rate.

notes to AnD FoRMInG PARt oF tHe ACCoUnts FOR THE YEAR ENDED 30 JUNE 2007 (CONTINUED)

		Mobilarm	Limited
		2006	2006
		$	$
8	DERIVATIVES
	Options in listed companies at fair value	-	1,680,000

Represents 1 unlisted option to acquire 20,000,000 ordinary shares in Quiktrak Networks Limited at an exercise price of $0.066 at or before an expiry date of February 2007.

Mobilarm exercised its option to acquire the 20,000,000 shares in QuikTrak Networks Ltd during the year. The shares were sold at the same time as the option was exercised at a price of 15.5 cents per share.

PLANT AND EQUIPMENT Leasehold improvements At cost Accumulated amortisation Plant and equipment At cost Less: Accumulated depreciation Computer software At cost Less: Accumulated depreciation Motor vehicles At cost Accumulated amortisation TOTAL PLANT AND EQUIPMENT	99,522 (75,970) 23,552 614,868 (514,589) 100,279 48,846 (34,648) 14,198 17,273 (83) 17,190 155,219	99,522 (51,324)
		48,198
		608,158 (413,504)
		194,654
		34,612 (26,997)
		7,615
		- -
		-
		250,467

28 MoBILARM LIMIteD - AnnUAL RePoRt 2007

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	Mobilarm	Limited
	2006	2006
	$		$
Reconciliation
Reconciliation of carrying values for each class of plant and equipment
Leasehold improvements:
- Carrying amount at beginning of fnancial year	48,198		72,844
- Additions	-		-
- Amortisation - Carrying amount at end of fnancial year	(24,646) 23,552	(24,646) 48,198
Plant and Equipment:
- Carrying amount at beginning of fnancial year	194,654	352,637
- Additions	6,710		14,242
- Disposals	-		-
- Depreciation - Carrying amount at end of fnancial year	(101,085) 100,279	(172,225) 194,654
Computer Software:
- Carrying amount at beginning of fnancial year	7,615		14,508
- Additions	14,234		4,894
- Disposals	-		-
- Amortisation - Carrying amount at end of fnancial year	(7,651) 14,198	(11,787) 7,615
Motor Vehicles:
- Carrying amount at beginning of fnancial year	-		6,417
- Disposals – non-cash	-		(5,000)
- Additions	17,273		-
- Depreciation - Carrying amount at end of fnancial year	(83) 17,190		(1,417) -

notes to AnD FoRMInG PARt oF tHe ACCoUnts FOR THE YEAR ENDED 30 JUNE 2007 (CONTINUED)

10 INTANGIBLE ASSETS At 30 June 2007 Cost (gross carrying amount) Accumulated amortisation Net carrying amount Borrowing Cost Incorporation cost Year ended 30 June 2007 At 1 July 2006, net of accumulated amortisation Additions Amortisation At 30 June 2006, net of accumulated amortisation Borrowing Cost Incorporation cost At 30 June 2006 Cost (gross carrying amount) Accumulated amortisation Net carrying amount Incorporation costs	Development Costs $ 531,133 (408,607) 122,526 156,013 149,460 (182,947) 122,526 408,169 (252,156) 156,013	Mobilarm Intellectual Property $ 923,919 (923,919) - 415,763 - (415,763) - 923,918 (508,155) 415,763	Limited Patents and Licences $ 65,386 (65,386) - 40,677 - (40,677) - 65,386 (24,709) 40,677	Total $ 1,520,438 (1,397,912)
				122,526
				1,417
				1,160
				125,103
				612,453 149,460 (639,387)
				122,526
				1,417
				1,160
				125,103
				1,397,473 (785,020)
				612,453
				1,160
				613,613

Development costs have been capitalised at cost. The intangible asset has been assessed as having a finite life and is amortised using the straight line method over a period of 5 years. If an impairment indication arises, the recoverable amount is estimated and an impairment loss is recognised to the extent that the recoverable amount is lower than the carrying value.

Intellectual property costs have been capitalised at cost. The intangible asset has been assessed as having a finite life and is amortised using the straight line method over a period of 5 years. It was determined that the Intellectual Property which was being carried had no future economic benefit to the Company. Therefore, these amounts were fully amortised. If an impairment indication arises, the recoverable amount is estimated and an impairment loss is recognised to the extent that the recoverable amount is lower than the carrying value.

Patent and licenses costs have been capitalised at cost. These patent and licenses have been granted for a minimum of 5 years by the relevant government agency and have accordingly been amortised using the straight line method over this finite life. It was determined that the Patents and Licences which were being carried had no future economic benefit to the Company. Therefore, these amounts were fully amortised.

No impairment losses were recognised for continuing operation in the 2006 and 2007 financial year.

30 MoBILARM LIMIteD - AnnUAL RePoRt 2007

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11 TRADE AND OTHER PAYABLES Trade creditors Other creditors and accruals	Mobilarm Limited 2007 2006 $ $ 202,552 323,778 140,454 160,116 343,006 483,894	Mobilarm Limited 2007 2006 $ $ 202,552 323,778 140,454 160,116 343,006 483,894
		483,894

(a Trade Payables

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

(b) Other Payables

Other payables are non-trade payables, are non-interest bearing and have an average term of 6 months.

12 INTEREST BEARING LOANS AND BORROWINGS CURRENT Convertible notes (i) Finance Leases Loans from related parties (ii)	610,000 20,848 157,317 788,165	1,097,799 - 24,193
		1,121,992

(i) At 30 June 2007, there is 1 convertible note on issue. The convertible note is convertible at the option of holder into ordinary shares in May 2008 on the basis of one ordinary share for every 10 cents. Any convertible note not converted will be redeemed at the end of their respective periods.

(ii) These loans are unsecured and repayable on call

NON CURRENT Finance Leases 13 PROVISIONS CURRENT Employee entitlements NON-CURRENT Employee entitlements	17,198 41,487 9,423	-
		33,582 12,871

notes to AnD FoRMInG PARt oF tHe ACCoUnts

FOR THE YEAR ENDED 30 JUNE 2007 (CONTINUED)

14 CONTRIBUTED EQUITY Issued and paid up capital: 166,029,159 (2006 – 165,429,159) ordinary shares fully paid. 2007 No. of Reconciliation of Contributed Equity Equity at beginning of year 165,429,159 Issue of ordinary shares 600,000 Equity (issue costs)/ adjustment - AIFRS adjustment - Equity at end of the year 166,029,159	2006 No. of 165,429,159 - - - 165,429,159	Mobilarm 2007 $ 5,042,182 2007 $ 4,981,037 60,000 1,145 - 5,042,182	Limited 2006 $ 4,981,037
			2006 $ 4,948,046 - - 32,991
			4,981,037

Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at shareholder meetings.

15 ACCUMULATED LOSSES Accumulated losses at the beginning of the fnancial year Net (loss)/proft for the year Accumulated losses at the end of the fnancial year 16 RESERVES Available-for-sale Reserve Balance at the beginning of the fnancial year Application of AASB 132 and AASB 139 Remeasurement of fnancial instruments - gross Tax effect of remeasurement Transfer to income - gross Tax effect of transfer to income Balance at the end of the fnancial year	2007 $ (2,479,379) (1,813,363) (4,292,742) 1,585,668 - (422,551) 126,765 (625,052) 187,516 852,346	2006 $ (3,504,517) 1,025,138
		(2,479,379)
		- 509,530 2,470,173 (741,052) (932,833) 279,850
		1,585,668

32 MoBILARM LIMIteD - AnnUAL RePoRt 2007

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17 COMMITMENTS AND CONTINGENCIES Operating lease commitments

The Company has entered into commercial leases as follows.

There are no restrictions placed upon the lessee by entering into these leases.

Future minimum rentals payable under non-cancellable operating leases as at 30 June are as follows:

Within one year After one year but not more than fve years More than fve years	2007 $ 140,890 - - 140,890	2006 $ 161,017 140,890 - 301,907

Finance lease and hire purchase commitments

The Company has entered into financial lease commitments on certain motor vehicles and computer software with a carrying amount of $28,268 (2006:$0). These leases expire within 1to 5 years. These leases have an option to purchase at the end of their term. There are no restrictions placed on the lessee by entering into these leases.

Future minimum amounts payable under non-cancellable finance leases as at 30 June are as follows:

Within one year After one year but not more than fve years More than fve years	20,849 17,198 - 38,047	- - - -

notes to AnD FoRMInG PARt oF tHe ACCoUnts FOR THE YEAR ENDED 30 JUNE 2007 (CONTINUED)

18 NOTES TO STATEMENT OF CASH FLOWS (a) Reconciliation of cash Cash balance comprises: - cash on hand - Cash at bank Closing cash balance (b) Reconciliation of proft/(loss) from ordinary activities after tax to the net cash fows from operating activities Operating proft/(loss) after tax Amortisation Depreciation Inventory Write-off Provision for employee entitlements Net (gain)/loss on disposal of available-for-sale investments Unrealised gain on mark-to market of derivatives Provision for doubtful debts Borrowing costs credited to convertible notes Borrowing costs credited to related party borrowings Changes in Assets and Liabilities Trade and other receivables Inventories Prepayments Development costs Trade and other payables Net cash fows from/(used in) operating activities.	Mobilarm Limited 2007 2006 $ $ 542 - 314,815 343,527 315,357 343,527 (1,813,363) 1,025,138 133,465 210,075 639,387 333,917 544,226 - 4,457 9,507 (632,935) (932,834) (100,000) (1,680,000) (34,329) (7,297) 158,591 51,247 88,377 5,000 (554,402) (40,615) (31,618) 38,386 6,740 (40,591) (149,460) (59,873) (140,888) 254,032 (1,881,752) (833,908)	Mobilarm Limited 2007 2006 $ $ 542 - 314,815 343,527 315,357 343,527 (1,813,363) 1,025,138 133,465 210,075 639,387 333,917 544,226 - 4,457 9,507 (632,935) (932,834) (100,000) (1,680,000) (34,329) (7,297) 158,591 51,247 88,377 5,000 (554,402) (40,615) (31,618) 38,386 6,740 (40,591) (149,460) (59,873) (140,888) 254,032 (1,881,752) (833,908)
		343,527
		1,025,138 210,075 333,917 - 9,507 (932,834) (1,680,000) (7,297) 51,247 5,000 (40,615) 38,386 (40,591) (59,873) 254,032
		(833,908)

34 MoBILARM LIMIteD - AnnUAL RePoRt 2007

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19 KEY MANAGEMENT PERSONNEL COMPENSATION

Key management personnel during the year were:

Name Title Mr Brenton Scott Chief Executive Offcer Mr Paul Price Non Executive Director Mr Kathal Spence Non Executive Director Mr Andrew Hill ManagingDirector Primary Post Employment Equity Other TOTAL *Directors and* *Executives* *Salary &* *fees* *Cash* *Bonus* *Non* *Monetary* *benefts* *Superan-* *nuation* *Retirement* *benefts* *Options* $ $ $ $ $ $ $ $	Name Title Mr Brenton Scott Chief Executive Offcer Mr Paul Price Non Executive Director Mr Kathal Spence Non Executive Director Mr Andrew Hill ManagingDirector Primary Post Employment Equity Other TOTAL *Directors and* *Executives* *Salary &* *fees* *Cash* *Bonus* *Non* *Monetary* *benefts* *Superan-* *nuation* *Retirement* *benefts* *Options* $ $ $ $ $ $ $ $
30 June 2007 Total compensation 30 June 2006 Total compensation	288,353 - 72,431 10,357 - - - 371,141
	233,115 - 24,505 10,357 - - - 267,977

Name
Title
Mr Brenton Scott
Chief Executive Offcer
Mr Paul Price
Non Executive Director
Mr Kathal Spence
Non Executive Director
Mr Andrew Hill
ManagingDirector
Primary
Post Employment
Equity
Other
TOTAL
Directors and
Executives
Salary &
fees
Cash
Bonus
Non
Monetary
benefts
Superan-
nuation
Retirement
benefts
Options
$ $ $ $ $ $ $ $

30 June 2007
Total compensation
30 June 2006
Total compensation

288,353
-
72,431
10,357
-
-
-
371,141

233,115
-
24,505
10,357
-
-
-
267,977

Remuneration practices

The company’s policy for determining the nature and amount of emolument of board members and senior executives of the company is as follows:

The remuneration structure for executive officers, including executive directors, is based on a number of factors, including length of service, particular experience of the individual concerned, and overall performance of the company. The contracts for service between the company and specified directors and executives are on a continuing basis the terms of which are not expected to change in the immediate future, Upon retirement specified directors and executives are paid employee benefits entitlements accrued to date of retirement.

Shareholdings

Number of Shares held by Directors and Specified Executives:

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

Balance Received as Options Net change Balance
1.7.06 remuneration exercised other 30.6.07
----- End of picture text -----

	Balance 1.7.06	Received as remuneration	Options exercised	Net change other	Balance 30.6.07

*Directors*
Brenton Scott	30,000,000	-	-	-	30,000,000
Paul Price*	500,000	**300,000	-	-	800,000
Kathal Spence	10,500,000	**300,000	-	-	10,800,000
Andrew Hill	2,000,000	-	-	-	2,000,000
*Specifed Executives*

*Resigned as executive/director of the Company.

**Accrued as Directors’ fees from prior year and settled as equity in current year.

notes to AnD FoRMInG PARt oF tHe ACCoUnts

FOR THE YEAR ENDED 30 JUNE 2007 (CONTINUED)

Mobilarm	Limited
2007	2006
$	$

20 EMPLOYEE ENTITLEMENTS AND SUPERANNUATION COMMITMENTS Employee Entitlements

The aggregate employee entitlement liability is comprised of :

Accrued wages , salaries and on costs Provisions (current) Provisions ( non- current ) No. of Employees 12 (2006: 8)	- 41,487 9,423 50,910	- 33,582 12,871
		46,453

Superannuation Commitments

No specific superannuation fund has been established for staff. As per the requirements of Superannuation Legislation Amendment (Choice of Superannuation Funds) Act 2005, we provide our staff with full choice of fund.

The company contributes on behalf of the employees at the superannuation guarantee levels of employee’s salaries and wages. The company does not contribute over and above these amounts other than contracted amounts under service contracts of relevant employees.

21 SEGMENT INFORMATION

The company operates in one geographical segment being Australia.

22 RELATED PARTY DISCLOSURES

a) The directors of MOBILARM Ltd during the financial period were:

Mr Brenton Scott

Mr Paul Price Mr Kathal Spence

Mr Andrew Hill

b) The following related party transactions occurred during the financial period:

Brenton Scott did not receive a salary but a consultancy fee of $90,227 was paid to Jayden Investment Trust. Brenton has not received any shares during the year. Any other transactions throughout the year relate to reimbursements for expenses incurred by Brenton or his related entities on behalf of the Company.

Paul Price was allotted 300,000 shares in consideration of his director’s fees of $30,000. In addition to this his firm Price Sierakowski was paid $960 for legal services.

Kathal Spence was allotted 300,000 shares in consideration of his director’s fees of $30,000. In addition to this his firm Port Accounting (Formerly Power Spence) was paid $24,967.00 for accounting services.

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

The Convertible Note held by Brenton Scott’s entity Jayden Investments Pty Ltd was settled by the exchange of Quiktrak Networks Limited shares. The total shares transferred were 1,689,428 at 14.8 cents for consideration of the Convertible Note of $250,000.

Jayden Investments Pty Ltd, had paid for the cost of exercising the Options held in QuikTrak Networks Ltd on behalf of the Company which amounted to $225,113. In return when the shares were sold, Jayden received the same amount in consideration of the loan of these funds.

36 MoBILARM LIMIteD - AnnUAL RePoRt 2007

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	Weighted average effective interest rate	2006 %	5%	0%	0%	N/A	N/A		0%	0%	12%	N/A
		2007 %	5%	0%	0%	N/A	N/A		0%	0%	12%	7.58
	Total carrying amount as per the balance sheet	2006 $’000	344	85	20	2,501	1,680	4,630	484	24	1,098	-	1,606
		2007 $’000	315	62	597	1,388	0	2,362	563	157	500	38	1,258
	Non-interest bearing	2006 $’000		85	20	2,501	1,680	4,286	484				484
		2007 $’000		62	597	1,388	0	2,047	563				563
Fixed interest rate maturing in:	> 5 years	2006 $’000
		2007 $’000
	>4 - <5 years	2006 $’000
		2007 $’000
	>3 - <4 years	2006 $’000
		2007 $’000
	>2 - <3 years	2006 $’000
		2007 $’000
	>1 - <2 years	2006 $’000										-
		2007 $’000										17	17
	< 1 year	2006 $’000								24	1,098	-	1,122
		2007 $’000								157	500	21	678
	Floating interest rate	2006 $’000	344					344
		2007 $’000	315					315
	Financial Instruments		Cash	Receivables – trade	Receivables - sundry	Listed shares	Derivatives	Total fnancial assets	Trade and sundry creditors	Amount payable – related parties	Convertible notes	Finance Leases	Total fnancial liabilities

notes to AnD FoRMInG PARt oF tHe ACCoUnts FOR THE YEAR ENDED 30 JUNE 2007 (CONTINUED)

23 FINANCIAL INSTRUMENTS (CONT’D)

(b) Net fair values

The carrying values of financial assets and financial liabilities, at balance date, approximate net fair value.

(c) Credit risk exposures

The entity’s maximum exposures to credit risk at balance date in relation to each class of recognised financial assets is the carrying amount of those assets as indicated in the balance sheet.

Concentrations of credit risk

The entity minimises concentrations of credit risk in relation to trade accounts receivable by undertaking transactions with a large number of customers. However, the majority of customers are concentrated in Australia.

Credit risk in trade receivables is managed in the following ways:

payment terms are 30 days; and
a risk assessment process is used for credit customers; and
trade receivables are insured with a credit insurance company on commercial terms.

24 CONTINGENT LIABILITIES

As at reporting date there were no contingent liabilities.

25 SUBSEQUENT EVENTS

Since the end of the financial year the company

Has issued a non renounceable Rights Issue of approximately 41,507,294 ordinary fully paid shares at a price of 7 cents each, on the basis of 1 new share for every 4 ordinary shares held at record date. The aim of the Issue is to raise a total of $2.905 million. As at the date of this report the Company has raised $2.98 million.
In conjunction with the Macquarie investment Mobilarm has signed a mandate with Bell Potter, one of Australia’s leading investment advisory firms, to lead the company towards an IPO in the June 2008 timeframe. The listing decision will be based on the achievement of agreed milestones which includes the company showing a clear path towards profitability.
On the 24[th] of September the company entered into an agreement with Australian Government under the Commercial Ready Grant program to jointly fund (50/50) the development of our next generation man overboard safety system, with a total project cost of $2.2 million.
The company has agreed to a joint development with Jeppesen Marine (a Boeing Company) to integrate the Mobilarm man overboard system into their C-MAP marine cartography application. This integration will provide automatic MOB (man overboard) alarms and track back information on C-MAP compatible systems. Jeppesen’s C-MAP is the leading brand of marine cartography providing the world largest marine navigation electronic companies such as Navman and Furuno.
Asiana Pty Ltd has converted $300,000 worth of its Convertible Note into equity in Mobilarm.
Jayden Holdings Pty Ltd and Brenton Scott have converted their loan accounts into equity in Mobilarm Ltd. Jayden Holdings Pty Ltd converted its loan balance of $205,952.42 for 2,942,177 shares at 7 cents. Brenton Scott converted his loan account balance of $24,192.20 for 345,603 shares at 7 cents.
Since Balance date the share price of the QuikTrak shares has dropped. The trading of these shares since 30 June 2007 shows fluctuations in value which make it impractical to put an impairment value into this report. Therefore, the shares have been valued as at 30 June 2007. At the date of this report the share price was 1.9 cents.

38 MoBILARM LIMIteD - AnnUAL RePoRt 2007

InDePenDent AUDItoR’s RePoRt

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CoRPoRAte DIReCtoRY

Directors

Brenton Scott - Non Executive Chairman Andrew Hill - Chief Operating Officer Kathal Spence - Non-executive Director Lindsay Lyon - Chief Executive Officer

Company Secretary

Jason Parish

Registered Office

C/- Port Accounting Pty Ltd 91 High Street Fremantle WA 6160

Principal Place of Business

768 Canning Highway APPLECROSS WA 6153

Contact Details

Website: www.mobilarm.com Telephone: (08) 9315 3511 Facsimile: (08) 9315 3611

Lawyers to the Company

Price Sierakowski Level 24, St Martin’s Tower 44 St George’s Terrace PERTH WA 6000

Auditors

Ernst and Young 152 St Georges Terrace PERTH WA 6000

40 MoBILARM LIMIteD - AnnUAL RePoRt 2007

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768 CaNNiNg HigHway, appleCross, westerN australia postal: po box 1533, appleCross, westerN australia, 6953

Tel: +61 8 9315 3511 • Fax: +61 8 9315 3611 • email: [email protected]

AI assistant

VINYL GROUP LTD — Annual Report 2007

66014_rns_2010-09-15_e6a6dffe-bc44-43de-a62c-5c91c074a8c8.pdf

2007

Contents

Directors

Directors Meetings

Interest in the shares of the company and related corporations:

Mobilarm Limited Ordinary Shares

Company Secretary

Mr Jason Parish

Corporate Overview

Principal Activities

Dividends

Operating Results for the Year

State Of Affairs

Likely Developments and Expected Results

Environmental Issues

Directors’ Benefits

Indemnification and Insurance of Directors

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

Non-Audit Services

Events subsequent to balance date

stAteMent oF CHAnGes In eQUItY

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

(b) Statement of compliance

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(b) Statement of compliance (continued)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(b) Statement of compliance (continued)

Significant accounting judgments, estimates and assumptions

(i) Significant accounting estimates and assumptions

Impairment of goodwill and intangibles with indefinite useful lives

Revenue recognition

(i) Sale of goods

(ii) Rendering of services

(iii) Interest income

(iv) Rental income

Government grants

Borrowing costs

Leases

(i) The Company as a lessee

Cash and cash equivalents

Trade and other receivables

Inventories

Derivative financial instruments and hedging

Derecognition of financial assets and financial liabilities

(i) Financial assets

(ii) Financial liabilities

Impairment of financial assets

(iii) Available-for-sale investments

Foreign currency translation

Income tax

Other taxes

Property, plant and equipment

(i) Impairment

(ii) Derecognition and disposal

Investments and other financial assets

(i) Financial assets at fair value through profit or loss

(ii) Held-to-maturity investments

(iii) Loans and receivables

(iv) Available-for-sale investments

Intangible assets

Research and development costs

Impairment of assets

Trade and other payables

Interest-bearing loans and borrowings

Provisions

Employee leave benefits

(i) Wages, salaries, annual leave and sick leave

(ii) Long service leave

Contributed equity

17 COMMITMENTS AND CONTINGENCIES Operating lease commitments

Finance lease and hire purchase commitments

19 KEY MANAGEMENT PERSONNEL COMPENSATION

Remuneration practices

Shareholdings

20 EMPLOYEE ENTITLEMENTS AND SUPERANNUATION COMMITMENTS Employee Entitlements

Superannuation Commitments

VINYL GROUP LTD Annual Report 2007