WAM ACTIVE LIMITED — Annual Report 2008

Aug 3, 2008

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WAM ACTIVE LIMITED APPENDIX 4E PRELIMINARY FINAL REPORT FOR PERIOD ENDED 30 JUNE 2008

RESULTS FOR ANNOUNCEMENT TO THE MARKET

	**30 June 08^ **
Revenue from ordinary activities	$407,207
Profit from ordinary activities before tax attributable tomembers	$118,626
Net profit for the period after income tax expense attributable to
members	$92,673
	**30 June 08^ **
Net tangible asset backing	99.42c
This report is based on the financial report which is in the process of being audited. All the documents
comprise the information required by Listing Rule 4.3A.

^ The Company was incorporated on 6 July 2007 and commenced trading upon its official quotation on the Australian Stock Exchange on 11 January 2008, subsequent to its initial public offering, raising $15.4 million. Therefore there are no comparative figures.

WAM ACTIVE LIMITED

A.B.N. 49 126 420 719

INCOME STATEMENT FOR THE PERIOD ENDED 30 JUNE 2008

INCOME STATEMENT **FOR THEPERIOD ENDED 30 JUNE 2008 **
Notes Proceeds from sale of investments Cost of investments sold Unrealised loss on investments Other revenue from ordinary activities 2 Management fees Directors fees Brokerage expense on share purchases Other expenses from ordinary activities Profit before income tax Income tax expense 3(a) Profit attributable to members of the Company 11 Basic earnings per share 14	June 2008 $ 16,094,263 (16,039,311) (244,512) 596,767 (79,884) (48,489) (59,251) (100,957)
	**118,626 ** (25,953)
	92,673
	0.60 cents

The accompanying notes form part of these financial statements.

2

WAM ACTIVE LIMITED

A.B.N. 49 126 420 719

BALANCE SHEET AS AT 30 JUNE 2008

Notes ASSETS Cashand cash equivalents 12 Trade and other receivables 6 Financial assets 7 Deferred tax assets 3(b) TOTAL ASSETS LIABILITIES Financialliabilities 8 Trade and other payables 9 Deferred tax liabilities 3(c) TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 10 Retained earnings 11 TOTAL EQUITY	June ** 2008 ** $ 9,993,027 2,529,541 3,436,096 105,677
	16,064,341
	357,042 320,488 60,352
	737,882
	**15,326,459 **
	15,233,786 92,673
	**15,326,459 **

The accompanying notes form part of these financial statements.

3

WAM ACTIVE LIMITED

A.B.N. 49 126 420 719

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

Notes Total equityat date of incorporation 6 July 2007 10(b) Profit for theperiodattributable to members of the Company 11 Shares issued in theperiod 10(b) Capitalised float costs 10(b) Total equity as at 30 June 2008 attributable to members of the Company	June 2008 $ 1 92,673 15,400,100 (166,315)
	15,326,459

The accompanying notes form part of these financial statements.

4

WAM ACTIVE LIMITED

A.B.N. 49 126 420 719

CASH FLOW STATEMENT FOR THE PERIOD ENDED 30 JUNE 2008

Notes CASH FLOWS FROM OPERATING ACTIVITIES Dividends received Interest received Investment management fees Brokerage expense on share purchases Payments for administration expenses NET CASH PROVIDED BY OPERATING ACTIVITIES 13 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of investments Payments for purchase of investments NET CASH USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Proceeds fromissue of shares Payments for float costs NET CASH PROVIDED BY FINANCING ACTIVITIES NET INCREASE IN CASH HELD Cash at beginning of financialperiod CASH AT END OF FINANCIALPERIOD 12	June ** 2008 ** $ 47,901 452,700 (56,962) (59,251) (100,148)
	284,240
	13,680,346 (19,134,067)
	(5,453,721)
	15,400,101 (237,593)
	15,162,508
	**9,993,027 ** -
	9,993,027

The accompanying notes form part of these financial statements.

5

WAM ACTIVE LIMITED

A.B.N. 49 126 420 719

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

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation

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

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

WAM Active Limited is a listed public company, incorporated and domiciled in Australia.

The financial report has been prepared on an accruals basis and is based on historical costs with the exception of held-for-trading financial assets and certain other financial assets and liabilities which have been measured at fair value.

Accounting Policies

(a) Financial Instruments

i) Recognition and Initial Measurement

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

Financial instruments are initially measured at fair value. Transaction costs related to instruments classified as at fair value through profit or loss are expensed to the Income Statement immediately. Financial instruments are classified and measured as set out below.

ii) Derecognition

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

iii) Classification and Subsequent Measurement

Investments consist of shares in publicly listed and unlisted companies and investments in fixed interest securities.

It is considered that the information needs of shareholders in a company of this type are better met by stating investments at fair value rather than historical cost and by presenting the Balance Sheet on a liquidity basis.

The Company may short sell securities in anticipation of a decline in the market value of that security, or it may short sell securities for various arbitrage transactions. Short sales or borrowed stock are classified as a financial liability and are revalued to fair value through the Income Statement.

Financial assets at fair value through profit or loss

Financial assets are classified at fair value through profit or loss when they are held for trading for the purpose of short term profit taking. Realised and unrealised gains and losses arising from changes in fair value are included in Income Statement in the period in which they arise. Unrealised gains and losses are then transferred to an asset revaluation reserve, net of the potential tax charges that may arise from the future sale of the investments.

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WAM ACTIVE LIMITED

A.B.N. 49 126 420 719

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

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(a) Financial Instruments (continued)

Financial Liabilities

Borrowed stock financial liabilities are classified at fair value through profit or loss. Realised and unrealised gains and losses arising from changes in fair value are included in the Income Statement in the period in which they arise.

Fair Value

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

(b) Income Tax

The charge for current income tax expense is based on the profit for the period adjusted for any nonassessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the Balance Sheet.

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

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

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

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

(c) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, at call deposits with banks or financial institutions and fixed interest securities maturing within three months.

(d) Revenue and Other Income

Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the rate inherent in the instrument. Dividend revenue is recognised when the right to receive a dividend has been established. All revenue is stated net of the amount of goods and services tax (GST).

(e) Trade and Other Receivables

Trade and other receivables are non-derivative financial assets and are stated at their amortised cost less impairment losses (refer Note 1(g)).

(f) Trade and Other Payables

Trade and other payables are non-derivative financial liabilities and are stated at their amortised cost.

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A.B.N. 49 126 420 719

WAM ACTIVE LIMITED

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

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(g) Impairment of Assets

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

(h) Goods and Services Tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of the GST incurred is not recoverable from the Australian Taxation Office (ATO). In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.

Receivables and payables are stated inclusive of GST. The net amount of GST recoverable from, or payable to, the ATO is included as an asset or liability in the Balance Sheet.

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

(i) Segment Reporting

The Company is engaged in investment activities conducted in Australia and derives revenue and investment income from listed, unlisted and fixed interest securities.

(j) Comparative Figures

The Company commenced operations on the 11 January 2008 and as such no comparative figures are available.

(k) Critical accounting estimates and judgements

The directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data.

There are no estimates or judgements that have a material impact on the financial results of the Company for the year ended 30 June 2008.

(l) New standards and interpretations not yet adopted

There are no impending new accounting standards that will result in any material change in relation to amounts recognised in the financial statements.

2. OTHER REVENUE FROM ORDINARYACTIVITIES Australian sourced dividends Foreign sourced dividends Interest Trust distributions	June 2008 $ 88,856 13,242 494,009 660
	596,767

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WAM ACTIVE LIMITED

A.B.N. 49 126 420 719

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

3. TAXATION (a) Income Tax Expense The prima facie tax onprofit from ordinary activities before income tax is reconciled to the income tax expense as follows: Prima facie tax payable on profit from ordinary activities before income tax at 30% Imputation credit gross up Franking credit offset Total income tax expense results in a: Current taxasset Deferred tax liability Deferred tax asset (b) Deferred Tax Assets Provisions Tax losses Capitalised float costs Movement in deferred tax assets Balance at the beginning of theperiod Capitalised float costs Creditedto the Income Statement At reporting date (c) Deferred Tax Liabilities Fair value adjustments Income provisions Movement in deferred tax liabilities Balance at the beginning of theperiod Charged to the Income Statement At reporting date 4. DIVIDENDS (a) Ordinary dividends paid during theperiod (b) Dividend Franking Account Balance of franking account atperiodend adjusted for franking credits, arising from payment of provision for income tax and dividends recognised as receivables and franking credits that maybe prevented from distribution in subsequent financialperiods.	June 2008 $ 35,588 4,129 (13,764)
	25,953
	(43,705) 60,352 9,306
	25,953
	4,950 43,705 57,022
	105,677
	- 71,278 34,399
	105,677
	29,332 31,020
	60,352
	- 60,352
	60,352
	-
	13,764

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A.B.N. 49 126 420 719

WAM ACTIVE LIMITED

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

4. DIVIDENDS (CONTINUED)

(b) Dividend Franking Account

The Company s ability to continue to pay franked dividends is dependent upon the receipt of franked dividends from investments and the Company paying tax.

The balance of the franking account does not include the tax to be paid on unrealised investment gains and accrued income currently recognised as a deferred tax liability of $60,352.

June 2008 $

5. AUDITORS REMUNERATION Remuneration of the auditor of the Company for: Auditing or reviewing the financial report Non-audit services Other services provided by a related practice of the auditor: Taxation Services Investigating Accountant s Report	9,900 6,600 7,700
	24,200

The Company s Audit & Risk Committee oversees the relationship with the Company s External Auditors. The Audit & Risk Committee reviews the scope of the audit and review and the proposed fee. It also reviews the cost and scope of other audit-related tax compliance services provided by a related entity of the audit firm, to ensure that they do not compromise independence.

6. TRADE AND OTHER RECEIVABLES

Trade debtors Prepayments Income receivable GST receivable	2,413,916 7,893 96,166 11,566
	2,529,541

Trade debtors relate to outstanding settlements, and are on the terms operating in the securities industry. These are non-interest bearing and require the settlement within three (3) days of the date of a transaction. Income receivable relates to accrued income and is non-interest bearing and unsecured.

7. FINANCIAL ASSETS

Listed investments Unlisted investments	3,254,796 181,300
	3,436,096

As at 30 June 2008, there was no interest rate exposure of the portfolio through the holding of perpetual notes.

8. FINANCIAL LIABILITIES

Borrowed stock

357,042

Borrowed stock is carried at fair value. The Company provides cash collateral backing of 105% of the fair value of the borrowed stock to the stock lender. The level of borrowed stock plus other debt can not exceed 50% of the gross asset value of the Company as outlined in the Prospectus.

10

WAM ACTIVE LIMITED

A.B.N. 49 126 420 719

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

9. TRADE AND OTHER PAYABLES Trade creditors Sundry creditors	June 2008 $ 228,810 91,678
	320,488

Trade creditors relate to outstanding settlements, and based on the terms operating in the securities industry. These do not incur interest and require settlement within three (3) days of the date of the transaction. Sundry creditors are settled within the terms of payment offered. No interest is applicable on these accounts.

10. ISSUED CAPITAL

(a) Paid-up Capital

15,400,101ordinary shares fully paid (b) Movement in Ordinary Share Capital Balance at the beginning of theperiod 1 ordinary share issued on incorporation6 July 2007 15,400,100 ordinary shares issued on 3 January 2008 under prospectus Transaction costs arising from the Initial Public Offer At reporting date	**15,233,786 **
	- 1 15,400,100 (166,315)
	15,233,786

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, otherwise each member present at a meeting or by proxy has one vote on a show of hands. In the event of the winding up of the Company, ordinary shareholders rank after creditors and share in any proceeds on winding up in proportion to the number of shares held.

(c) Options

The Company issued a prospectus dated 6 November 2007 and shareholders who subscribed for shares were issued with one option for each share they acquired. The company issued 15,400,100 options to acquire fully paid ordinary shares exercisable at $1.00 per option. The options began trading on the Australian Securities Exchange on 11 January 2008. No options were exercised during the period ending 30 June 2008.

(d) Capital Management

The Board effectively manages the Company s capital by assessing the Company s financial risks and adjusting its capital structure in response to changes in these risks and in the market. At the core of this management is the belief that shareholder value should be preserved at all costs. Shareholder value will be preserved through the management of the level of distributions to shareholders, share and options to buy shares issues as well as the use of share buy-backs when shares are trading at a significant discount to NTA.

11. RETAINED EARNINGS

Balance at the beginning of theperiod Profit for theperiodattributable to members of the Company At reporting date	- 92,673
	92,673

11

WAM ACTIVE LIMITED

A.B.N. 49 126 420 719

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

12. CASH AND CASH EQUIVALENTS

Cash as at the end of the financial period as shown in the Cash Flow Statement is reconciled to the related items in the Balance Sheet as follows:

Cash at bank and on hand Fixed interest securities	June 2008 $ 3,062,178 6,930,849
	9,993,027

The weighted average interest rate for cash and fixed interest securities as at 30 June 2008 is 7.50%. The fixed interest securities had an average maturity of 10 days. Of the fixed interest securities held 65% is Standard & Poor s rated A1+, 29% is Standard & Poor s rated AA and 6% is Standard & Poor s rated AAA. The fixed interest securities include the cash collateral for the borrowed stock (refer Note 8).

13. CASH FLOW INFORMATION

Reconciliation of Operating Profit after Income Tax Operating profit after income tax Add/(less) items classified as Investing/Financing Activities: Realised gain on sale of investments Add/(less) non cash items: Unrealised losson investments Net cash provided by Operating Activities before changes in assets and liabilities: Increase in receivables Increase in deferred tax assets Increase in payables Decrease in current tax assets Increase in deferred tax liabilities Net cash used in Operating Activities 14. EARNINGS PER SHARE Profit after income tax used in the calculation of basic earnings per share Weighted average number ofordinary shares outstanding during theperiodused in the calculation of basic earnings per share: Add: Weighted average number of options outstanding Weighted average number of ordinary shares outstanding during theperiodused in the calculation of diluted earnings per share:	92,673 (54,951) 244,512 (115,625) 9,306 91,678 (43,705) 60,352
	284,240
	**92,673 **
	No. 15,400,101
	n/a n/a

15. FINANCIAL RISK MANAGEMENT

The Company s financial instruments consist mainly of local money market instruments, short term investments, accounts receivable and accounts payable.

The terms and conditions including interest rate risk of each class of financial asset, financial liability and equity instrument, both recognised and unrecognised at balance date, are included under the appropriate note for that instrument.

Under delegation from the Board, the Manager has the responsibility for assessing and monitoring the financial and market risk of the Company.

12

WAM ACTIVE LIMITED

A.B.N. 49 126 420 719

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

15. FINANCIAL RISK MANAGEMENT (CONTINUED)

(a) Credit Risk

Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted.

The maximum exposure to credit risk on financial assets, excluding investments, of the Company which have been recognised on the Balance Sheet, is the carrying amount net of any provision for impairment of those assets.

The Manager is responsible for ensuring there is appropriate diversification across counter parties and that they are of a sufficient quality rating. The Manager is satisfied that the Company is currently sufficiently diversified so as to reduce exposure to any individual credit risk.

(b) Liquidity Risk

Liquidity risk represents the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities.

The Company s major cash outflows are the purchase of securities and dividends paid to shareholders, the levels of which are managed by the Board and the management company.

The Company s inward cash flows depend upon the level of sales of securities, dividends and interest received and any exercise of Company options that may be on issue from time to time.

The Manager monitors the Company s cash-flow requirements daily by reference to known sales and purchases of securities, dividends and interest to be paid or received. The Company holds a portion of its portfolio in cash and fixed interest securities sufficient to ensure that it has cash available to meet all payments. Alternatively, the Company can increase its level of sales of the readily tradeable securities it holds to increase cash inflows.

(c) Market Risk

Market risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices.

By its nature, as a listed investment company that invests in tradeable securities, the Company will always be subject to market risk as it invests its capital in securities which are not risk free as the market price of these securities can fluctuate.

The Manager seeks to reduce market risk of the Company by not being overly exposed to one investee company or one particular sector of the market. The Company does not have set parameters as to a minimum or maximum amount of the portfolio that can be invested in a single company or sector.

(d) Net Fair Values

The carrying amounts of financial instruments on the Balance Sheet approximate their net fair values.

16. EVENTS SUBSEQUENT TO REPORTING DATE

There has not arisen in the interval between the end of the financial period and the date of this report any item, transaction or event of material and unusual nature likely, in the opinion of the Company, to significantly affect the operations of the entity, the results of those operations, or the state of affairs of the entity, in future financial periods.

17. INVESTMENT TRANSACTIONS

The total number of contract notes that were issued for transactions in securities during the financial period was 615. Each contract note could involve multiple transactions. The total brokerage paid on these contract notes was $122,552.

13

WAM ACTIVE LIMITED

A.B.N. 49 126 420 719

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

	**June **
	**2008 **
	$
**18. CONTINGENT LIABILITIES **
Estimates of material amountsof contingent liabilities, not provided for in the accounts,
arising from:
Sub-underwriting agreements entered into during theperiodof which the offer closes after
balance date.	**140,000 **
**19. CAPITAL COMMITMENTS **
Capital commitments exist for placements entered into before 30 June 2008, which
settled afterperiodend in July and August 2008.	-

20. KEY MANAGEMENT PERSONNEL COMPENSATION

The names and position held of the Company s key management personnel (including Directors) in office at any time during the financial period are:

G.J. Wilson	Chairman
M.J. Kidman	Non-Executive Director
J.B. Abernethy	Non-Executive Director
C.E. Cuffe	Non-Executive Director
R.J. Walker	Non-Executive Director

a) Remuneration

There are no executives that are paid by the Company. MAM Pty Limited, the investment manager of the Company provides the day to day management of the Company and is remunerated as outlined in Note 21.

Total Directors remuneration paidby the Company for theperiodended 30 June 2008	Directors Fees $ Post-employment Superannuation $ Total $
	46,962 1,527 48,489

b) Share and Option holdings

As at 30 June 2008 the Company s key management personnel held the following interests in the Company:

Ordinary Shares held

Directors G.J. Wilson M.J. Kidman J.B. Abernethy C.E. Cuffe R.J. Walker N. Cuffe	Balance at 30 June2007 Acquisitions/ Shares Issued Disposals Balance at 30 June 2008 - 1,933,501 - 1,933,501 - 205,000 - 205,000 - 60,000 - 60,000 - - - - - 1,542,000 - 1,542,000 - - - -
	- 3,740,501 - 3,740,501

14

WAM ACTIVE LIMITED

A.B.N. 49 126 420 719

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

20. KEY MANAGEMENT PERSONNEL COMPENSATION (CONTINUED) b) Share and Option holdings (continued)

Options held Directors G.J.Wilson M.J. Kidman J.B. Abernethy C.E. Cuffe R.J. Walker N. Cuffe	Balance at 30 June 2007 Options Granted/ Acquisitions Disposals/ Options Exercised Balance at 30 June 2008 - 1,690,500 20,000 1,670,500 - 205,000 - 205,000 - - - - - - - - - 1,300,000 - 1,300,000 - - - -
	- 3,195,500 20,000 3,175,500

Directors and director related entities disposed of and acquired ordinary shares and options in the Company on the same terms and conditions available to other shareholders.

The Directors have not, during or since the end financial period, been granted options over unissued shares or interests in shares of the Company as part of their remuneration.

21. RELATED PARTY TRANSACTIONS

All transactions with related entities were made on normal commercial terms and conditions.

Matthew Kidman and Geoff Wilson are Directors of MAM Pty Limited, the entity appointed to manage the investment portfolio of WAM Active Limited. Entities associated with Geoff Wilson and Matthew Kidman hold 80% and 20% respectively of the issued shares of MAM Pty Limited. In its capacity as manager, MAM Pty Limited was paid a management fee of 1%p.a (plus GST) of gross assets amounting to $85,729 inclusive of GST. As at 30 June 2008, the balance payable to the manager was $28,766.

In addition, MAM Pty Limited is to be paid, annually in arrears, a performance fee being 20% of the increase in the gross value of the Portfolio above the High Water Mark:

The High Water Mark is the greater of the:

• highest gross value of the Portfolio as at the last day of the last Performance Period for which a Performance Fee was last paid or payable; and

• the gross proceeds raised from the issue of Shares under this Prospectus.

If the gross value of the Portfolio falls below a previous high no further Performance Fees can be accrued or paid until the loss has been fully recovered. As at 30 June 2008, no performance fee was paid or payable to MAM Pty Limited.

These amounts are in addition to the above Directors remuneration.

Since the end of the previous financial period, no Director has received or become entitled to receive a benefit (other than those detailed above) by reason of a contract made by the Company or a related Company with the Director or with a firm of which he is a member or with a Company in which he has substantial financial interest.

15