ARGUS SOLUTIONS LTD For personal use only · 2009. 8. 31. · customize that solution and the assurance that legacy systems can remain in place. For more information about Argus Solutions

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ASX Listing Rule 4.3A

ARGUS SOLUTIONS LTD

A.B.N. 33 090 865 357

ASX CODE: ASV

Australian Stock Exchange Listing Rules Disclosure

Results for Announcement to the Market

Preliminary Final Report

For the period ended 30th June 2009

Contents Page Australian Stock Exchange Listing Rules Disclosure 2 Commentary 3 Financial Information Income Statement 6 Balance Sheet 7 Statement of Changes in Equity 8 Cash Flow Statement 10 Notes to the Financial Statements 11 Argus Solutions Limited is a company dedicated to providing comprehensive, coherent identity management technologies which form the basis of applications to areas such as securely controlled drug dispensing, access control and visitor management. The coherency of the technologies is achieved through the use of complementary front-end technologies such as iris recognition, coupled with back-end architectures that permit the use of common servers and communications protocols. This means the company can offer a broad range of technical solutions to a customer, the ready ability to customize that solution and the assurance that legacy systems can remain in place. For more information about Argus Solutions Ltd, please visit www.argus-solutions.com For further information, please contact: Bruce Lyman CEO +61 2 9963 7311

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Argus Solutions Ltd and Controlled Entities A.B.N. 33 090 865 357

The accompanying notes form part of these financial statements. Page 2

ARGUS SOLUTIONS LTD

A.B.N. 33 090 865 357

Australian Stock Exchange Listing Rules Disclosure

Preliminary Final Report

For the period ended 30th June 2009 Compared to prior year period ended 30th June 2008

Results for announcement to the market

Entity Results 30-June-09 30-June-08 Change Change % Revenue from ordinary activities 2,320,628 2,327,430 (6,802) Down 0.29%

Profit from ordinary activities after tax attributable to members

(314,449) (1,438,307) 1,123,858 Up 78.1%

Net profit for the period attributable to members

(314,449) (1,438,307) 1,123,858 Up 78.1%

Dividends

Argus Solutions proposes not to pay any dividends for financial year ended 30th June year 2009.

Explanation of results Please refer to the Commentary for an explanation of the results.

Other Information 30-June-09

$ 30-June-08

$

Net Tangible Assets per ordinary share (0.0025) (0.0005)

Earning per shares (0.0012) (0.0065)

Diluted Earnings per shares (0.0011) (0.0062)

Entities over which control gained or lost during the period: Nil

Accounts Audited or Subject to Review The report is based on accounts which are being audited for the financial year.

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Commentary

Company Overview

These results include capitalisation of $0.9 million of software development costs in FY2009 with growth in underlying earnings of $0.1 million. The audit of the statutory results is being finalised for the year to 30 June 2009. With continuing assessment of business growth initiatives, the Board has resolved to not declare a dividend for the year to 30 June 2009. Lindsay Yelland, Chairman of Argus Solutions Limited, states: “Whilst the progress of Argus is encouraging, there is considerable scope to realise the full earnings potential of Argus through implementation of value-added services across our customer base and new market segments. Our key objectives in FY2010 include cross marketing of service enhancements with the company’s existing customers, continue penetration in valuable markets such as the health and correctional sectors and strengthening of the company with continued development of operating efficiencies.” Achievements of Argus in the FY09 year included:

• Improved sales over the previous financial year of $1.8million (approximately $0.2m not recognised as

revenue until FY10), improved gross margins by more than 25%, and reduced operating expenditure.

• Enhancement of software applications in conjunction with expanding customer requirements, including development of centrally managed biometric systems and management of multiple identity attributes across multiple client locations;

• Continued penetration into valuable markets in Europe, including sales with UK correctional facilities and development of strategic relationships with counterparties in the UK;

• Continued improvement of operating efficiencies, online delivery of software upgrades and remote

management of biometric data;

In the past the Company has successfully provided solutions in the airport and border control sectors and is seeking to apply its expertise for growth in these sectors in FY10. These markets provide significant opportunities for earnings growth in accordance with escalating usage of biometric technology for security, business growth and efficiency in international airport, airline, shipping, travel and cargo markets.

The company has received expressions of interest by potential counterparties for growth in Australia, North America and Asia and has been focussed on immediate growth in the United Kingdom where Argus has an established presence with robust prospects.

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Argus Solutions Limited ABN 33 090 865 357

Income Statement

For the Year Ended 30 June 2009

The accompanying Notes form part of these accounts Page 4

Consolidated Parent

Note

2009 $

2008 $

2009 $

2008 $

Revenue 2 1,591,913 1,611,266 1,591,913 1,611,266 Other income 2 728,715 716,164 728,715 716,164 Raw materials and consumables used (569,798) (716,949) (569,798) (716,949)Employee benefits expense (1,533,280) (1,664,296) (1,533,280) (1,664,296)Depreciation, amortisation and impairments 3 (253,827) (63,885) (253,827) (63,885)Other expenses 3 (273,236) (1,316,972) (273,236) (1,316,972)Finance costs (4,936) (3,635) (4,936) (3,635)

Loss before income tax (314,449) (1,438,307) (314,449) (1,438,307)

Profit attributable to members of the parent entity (314,449) (1,438,307) (314,449) (1,438,307)

Earnings Per Share:

Overall operations: Basic earnings per share (cents per share) 19 (0.12) (0.65) - -Diluted earnings per share (cents per share) 19 (0.11) (0.62) - -

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Balance Sheet

30 June 2009


Consolidated Parent

Note

2009 $

2008 $

2009 $

2008 $

ASSETS

Current assets Cash and cash equivalents 5 88,595 12,631 88,595 12,631 Trade and other receivables 6 588,251 277,689 588,251 277,689 Inventories 7 299,139 283,462 299,139 283,462Other assets 9 122,165 86,685 122,165 86,685

Total current assets 1,098,150 660,467 1,098,140 660,467

Non-current assets Property, plant and equipment 10 21,985 38,015 21,985 38,015 Intangible assets 12 1,166,059 468,372 1,166,059 468,372

Total non-current assets 1,188,044 506,387 1,188,044 506,387

TOTAL ASSETS 2,286,194 1,166,854 2,286,184 1,166,854

LIABILITIES

Current liabilities Trade and other payables 13 1,185,630 556,992 1,185,630 556,992Borrowings 14 24,226 2,174 24,226 2,174Short-term provisions 15 60,179 87,726 60,179 87,726 Other liabilities 16 545,333 187,686 545,333 187,686

Total current liabilities 1,815,368 834,578 1,815,368 834,578

Non-current liabilities

TOTAL LIABILITIES 1,815,368 834,578 1,815,368 834,578

NET ASSETS 470,826 332,276 470,817 332,276

EQUITY Issued capital 17 22,692,145 22,239,159 22,692,145 22,239,159Reserves (840) (840) Retained earnings (22,220,477) (21,906,043) (22,221,328) (21,906,894)

TOTAL EQUITY 470,828 332,276 470,817 332,265

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Statement of Changes in Equity



2009 Parent

Note

Ordinary Shares

$

Retained Earnings

$

Foreign Currency

Translation Reserve

$ Total

$

Balance at 1 July 2008 22,239,159 (21,906,894) - 332,265Shares issued during the year 452,986 - - 452,986

Loss attributable to members - (314,449) - (314,449)

Balance at 30 June 2009 22,692,145 (22,221,343) - 470,802

2008 Parent

Note

Ordinary Shares

$

Retained Earnings

$

Foreign Currency

Translation Reserve

$ Total

$ Balance at 1 July 2007 21,689,118 (20,467,587) - 1,221,531 Shares issued during the year 550,041 - - 550,041

Loss attributable to members - (1,438,307) - (1,438,307)

Balance at 30 June 2008 22,239,159 (21,905,894) - 333,265

2009 Consolidated

Note

Ordinary Shares

$

Retained Earnings

$

Foreign Currency

Translation Reserve

$ Total

$ Balance at 1 July 2008 22,239,159 (21,906,043) (840) 332,276 Shares issued during the year 452,986 - - 452,986

Loss attributable to members - (314,449) - (314,449)

Balance at 30 June 2009 22,692,145 (22,220,492) (840) 470,813

2008

Note

Ordinary Shares

$

Retained Earnings

$

Foreign Currency

Translation Reserve

$ Total

$

Balance at 1 July 2007 21,689,118 (20,508,057) (4,934) 1,176,127 Shares issued during the year 550,041 - - 550,041 Loss attributable to members - (1,438,307) - (1,438,307) Transfers to and from reserves -Foreign currency translation reserve - - 4,094 4,094 Derecognition of retained earnings on disposal of

subsidiary - 40,321 - 40,321

Sub-total 550,041 (1,397,986) 4,094 (843,851)

Balance at 30 June 2008 22,239,159 (21,906,043) (840) 332,276

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Cash Flow Statement



Consolidated Parent

Note

2009 $

2008 $

2009 $

2008 $

Cash from operating activities: Receipts from customers 2,023,600 2,524,637 2,023,600 2,630,877 Payments to suppliers and employees (1,482,596) (3,669,942) (1,482,596) (3,681,454) Interest received 342 14,319 342 14,319 Interest paid (4,936) (3,635) (4,936) (3,635)

Net cash provided by (used in) operating activities 23(a) (536,410) (1,134,621) (536,410) (1,039,893)

Cash flows from investing activities: Proceeds from sale of investment - 142,853 - 142,853 Proceeds from disposal of subsidiary - 151,816 - 151,816 Acquisition of property, plant and equipment (5,484) (3,983) (5,484) (3,982) Acquisition of other non current assets (930,000) - (930,000) -

Net cash provided by (used in) investing activities (935,484) 290,686 (935,484) 290,687

Cash flows from financing activities: Proceeds from issue of shares 452,986 550,041 452,986 550,041 Repayment of borrowings 24,226 - 24,226 -

Net cash provided by (used in) financing activities 477,212 550,041 477,212 550,041

Other activities:

Net increase (decreases) in cash held 78,138 (293,894) 78,138 (199,165) Cash at beginning of financial year 10,457 300,257 10,446 209,611 Effect of exchange rates on cash holdings in

foreign currencies - 4,094 - -

Cash at end of financial year 5 88,595 10,457 88,584 10,446

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Notes to the Financial Statements


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1 Statement of Significant Accounting Policies

(a) General information

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

The financial report covers the consolidated group of Argus Solutions Limited and controlled entities, and Argus Solutions Limited as an individual parent entity. Argus Solutions Limited is a listed public company, incorporated and domiciled in Australia.

The financial report of Argus Solutions Limited and controlled entities, and Argus Solutions Limited as an individual parent entity comply with all Australian equivalents to International Financial Reporting Standards (AIFRS) in their entirety.

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

(b) Basis of Preparation

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards (including Australian Accounting Interpretations) 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. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below. They have been consistently applied unless otherwise stated.

The financial report has been prepared on an accruals basis and is based on historical costs modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

(c) Comparative Figures

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

(d) Inventories

Inventories are measured at the lower of cost and net realisable value. Overheads are applied on the basis of normal operating capacity. Costs are assigned on the basis of weighted average costs.

(e) Property, Plant and Equipment

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

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1 Statement of Significant Accounting Policies continued

(e) Property, Plant and Equipment continued

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Plant and equipment

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

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

Depreciation

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

The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Depreciation Rate Plant and Equipment 9% - 40%

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

(f) Financial Instruments

Recognition and Initial Measurement

Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is the equivalent to the date that the Group commits itself to either purchase or sale of the asset (i.e. trade date accounting is adopted).

Financial instruments are initially measured at fair value plus transactions costs, except where the instrument is classified 'at fair value through profit or loss', in which case transaction costs are expensed to profit or loss immediately.

Classification and Subsequent Measurement

Finance instruments are subsequently measured at either of fair value, amortised cost using the effective interest rate method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted.

Amortised cost is calculated as:

• the amount in which the financial asset or financial liability is measured at initial recognition;

• less principal repayments;

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(f) Financial Instruments continued

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• plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the maturity amount calculated using the effective interest method; and

• less any reduction for impairment.

The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss.

The Group does not designate any interests in subsidiaries, associates or joint venture entities as being subject to the requirements of accounting standards specifically applicable to financial instruments.

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

Financial assets are classified at ‘fair value through profit or loss’ when they are either held for trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost .

(iii) Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Group's intention to hold these investments to maturity. They are subsequently measured at amortised cost.

(iv) Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be classified into other categories of financial assets due to their nature, or they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments.

(v) Financial liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost.

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(f) Financial Instruments continued

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Financial assets at fair value through profit and loss

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

Loans and receivables

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

Held-to-maturity investments

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

Available-for-sale financial assets

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

Financial liabilities

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

Fair value

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

Impairment

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

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(g) Intangibles

Goodwill

Goodwill and goodwill on consolidation are initially recorded at the amount by which the purchase price for a business or for an ownership interest in a controlled entity exceeds the fair value attributed to its net assets at date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investment in associates. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Patents and trademarks

Patents and trademarks are recognised at cost of acquisition. Patents and trademarks have a finite life and are carried at cost less any accumulated amortisation and any impairment losses. Patents and trademarks are amortised over their useful life.

Research and development

Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when technical feasibility studies identify that the project will deliver future economic benefits and these benefits can be measured reliably.

Development costs have a finite life and are amortised on a systematic basis matched to the future economic benefits over the useful life of the project.

(h) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.

(i) Employee Benefits

Provision is made for the company's liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than one year have been measured at present value of the estimated future cash outflows to be made for those benefits. Those cashflows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cashflows.

(j) Provisions

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

(k) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

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(k) Borrowing Costs continued

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All other borrowing costs are recognised in income in the period in which they are incurred.

(l) Income Tax

The charge for current income tax expense is based on the adjusted profit for any non-assessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the balance sheet date.

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

Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. 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 assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.

Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.

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

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

(m) Revenue

Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed. Any consideration deferred is treated as the provision of finance and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount ultimately received is interest revenue.

Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant risks and rewards of ownership of the goods and the cessation of all involvement in those goods.

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(m) Revenue continued

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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.

Dividends received from associates and joint venture entities are accounted for in accordance with the equity method of accounting.

Investment property revenue is recognised on a straight-line basis over a period of lease term so as to reflect a constant periodic rate of return on the net investment.

Revenue recognition relating to the provision of services is determined with reference to the stage of completion of the transaction at the reporting date and where the outcome of the contract can be estimated reliably. Stage of completion is determined with reference to the services performed to date as a percentage of total anticipated services to be performed. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent that related expenditure is recoverable.

All revenue is stated net of the amount of goods and services tax (GST).

(n) Goods and Services Tax (GST)

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

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

(o) Principals of Consolidation

A list of controlled entities is contained in Note 20 to the financial statements. All controlled entities have a June financial year-end.

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

A controlled entity is an entity over which Argus Solutions Limited has the power to govern the financial and operating policies so as to obtain benefits from its activities. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are considered.

(p) Leases

Lease payments for operating leases, where substantially all of the risks and benefits remain with the lessor, are charges as expenses in the periods in which they are incurred.

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(q) Foreign Currency Transactions and Balances

Functional and presentation currency

The functional currency of each of the Group's entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity's functional and presentation currency.

Transaction and balances

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items are recognised in the income statement, except where deferred in equity as a qualifying cash flow or net investment hedge.

Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the income statement.

Group companies

The financial results and position of foreign operations whose functional currency is different from the Group's presentation currency are translated as follows:

• assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;

• income and expenses are translated at average exchange rates for the period; and

• retained earnings are translated at the exchange rates prevailing at the date of the transaction.

Exchange differences arising on translation of foreign operations are transferred directly to the Group's foreign currency translation reserve in the balance sheet. These differences are recognised in the income statement in the period in which the operation is disposed.

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2 Revenue Consolidated Parent

Note

2009 $

2008 $

2009 $

2008 $

Operating activities - Sale of goods 1,591,913 1,611,266 1,591,913 1,611,266- Interest received 342 14,319 342 14,319- Grants 727,841 701,453 727,841 701,453- Other income 532 392 532 392

Total Revenue 2,320,628 2,327,430 2,320,628 2,327,430

3 Profit from Ordinary Activities

Expenses Depreciation and Amortisation Depreciation – plant and

machinery 21,514 34,795 21,514 34,795

Amortisation – Patents, trademarks and other rights 232,313 248,314 232,313 248,314Impairment of other financial

assets - 41,574 - 41,574Impairment of other current

assets - (260,798) - (260,798)

Total Depreciation and Amortisation 253,827 63,885 253,827 63,885Interest expense on financial

liabilities not at Fair Value through Profit and Loss: 4,936 3,635 4,936 3,635

Doubtful Debts - 11,500 - 11,500Employee Costs 1,533,280 1,664,296 1,533,280 1,664,296

Rental expense on operating leases

minimum lease payments 145,207 180,703 145,207 180,703Total Rental Expense on Operating Lease 145,2071 180,703 145,207 180,703Audit Remuneration

Auditing or reviewing the financialreport 31,200 36,400 31,200 36,400

Total Audit Remuneration 31,200 36,400 31,200 36,400

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Consolidated Parent

2009 $

2008 $

2009 $

2008 $

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4 Income Tax Expense

(a) The components of tax expense comprise: Current tax - - - -

- - - -

(b) The prima facie tax on profit from ordinary activities before income tax is reconciled to the income tax as follows:

Prima facie tax payable on profit from ordinary activities before income tax at 30% (2005: 30%)

- economic entity (94,335) (431,445) (94,335) (431,445)

(94,335) (431,445) (94,335) (431,445)

Add:

Tax effect of: - write-downs to recoverable amounts - 74,494 - 74,494-income tax benefits not brought to account 94,335 356,951 94,335 356,951

Income tax attributable to entity - - - -

5 Cash and Cash Equivalents Cash on hand 628 631 618 620Cash at bank 75,967 - 75,967 -Other cash and cash equivalents 12,000 12,000 12,000 12,000

88,595 12,631 88,585 12,620

Reconciliation of Cash

Cash at the end of the financial year as shown in the cash flow statement is reconciled to items in the balance sheet as follows:

Cash and cash equivalents 88,595 12,631 88,584 12,620Bank Overdraft - (2,174) - (2,174)

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2008 $

2009 $

2008 $

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6 Trade and Other Receivables

CURRENT Trade receivables 583,327 284,980 583,327 284,980Provision for impairment of receivables (53,852) (53,852) (53,852) (53,852)

529,475 231,128 529,475 231,128Deposits 58,691 43,501 58,691 43,501Other receivables 85 3,060 85 3,060

588,251 277,689 588,251 277,689

7 Inventories

CURRENT

At Cost Finished goods 591,035 575,358 591,035 575,358Less: impairment provision (291,896) (291,896) (291,896) (291,896)

299,139 283,462 299,139 283,462

8 Financial Assets

Available-for-sale Financials Assets Comprise:

Unlisted investment, at fair value shares in controlled entities (25,000) (25,000) - - impairment provision 25,000 25,000 - -

- - - -

Available-for-sale financial assets comprise of investments in the ordinary issued capital of various entities.There are no fixed returns or fixed maturity date attached to these investments.

The fair value of unlisted available-for-sale financial assets cannot be reliably measured as variability in therange of reasonable fair value estimates is significant. Unlisted available-for-sale financial assets exist withinactive markets and could be disposed of if required.

9 Other Assets

CURRENT Prepayments 122,165 86,685 122,165 86,685

122,165 86,685 122,165 86,685 F

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2009 $

2008 $

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10 Property Plant and Equipment

PLANT AND EQUIPMENT

Plant and equipment At cost 138,009 412,692 138,009 412,692Less accumulated depreciation (116,025) (374,677) (116,025) (374,677)

Total property, plant and equipment 21,984 38,015 21,984 38,015

(a) Movements in Carrying Amounts Balance at the beginning of year 38,015 68,827 38,015 68,828 Additions 5,483 3,983 5,483 3,982 Depreciation expense (21,514) (34,795) (21,514) (34,795)

Carrying amount at the end of year 21,984 38,015 21,984 38,015

11 Tax

Deferred tax assets not brought to account

Deferred tax assets not brought to account, the benefits of which will only be realised if the conditions fordeductibility set out in Note 1(l) occur:

- temporary differences 102,124 42,473 102,124 42,473

- tax losses: - operating losses 5,285,692 4,965,706 5,285,692 4,965,706

5,387,816 5,008,179 5,387,816 5,008,179

:

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Consolidated Parent

2009 $

2008 $

2009 $

2008 $

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12 Intangible Assets

Patents, trademarks and other rights Cost 2,963,518 2,963,518 2,963,518 2,963,518 Accumulated amortisation and impairment (2,727,459) (2,495,146) (2,727,459) (2,495,146)

Net carrying value 236,059 468,372 236,059 468,372

Development costs Cost 930,000 - 930,000 -

Net carrying value 930,000 - 930,000 -

Computer software, other Cost 25,777 25,777 25,777 25,777 Accumulated amortisation and impairment (25,777) (25,777) (25,777) (25,777)

Net carrying value - - - -

Total Intangibles 1,166,059 468,372 1,166,059 468,372

(a) Movements in Carrying Amounts Parent

Patents, trademarks and

other rights $

Computer software,

other $

Development costs

$ Total $

Opening balance 716,686 - - 716,686 Amortisation and impairments (248,314) - - (248,314)

Balance at 30 June 2008

468,372 - - 468,372

Additions 30 June 2009

Opening balance 468,372 - - 468,372 Additions - - 930,000 930,000 Amortisation and impairments (232,313) - - (232,313)


236,059 - 930,000 1,166,059

Consolidated

Patents, trademarks and other

rights $

Computer software,

other $

Development costs

$ Total

$ Opening balance 716,686 736 - 717,422 Additions - (736) - (736) Amortisation and impairment (248,314) - - (248,314)


468,372 - - 468,372

Disposals 30 June 2009

Opening balance 468,372 - - 468,372 Additions - - 930,000 930,000 Amortisation and impairment (232,313) - - (232,313)


236,059 - 930,000 1,166,059

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2008 $

2009 $

2008 $

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13 Trade and Other Payables

CURRENT Unsecured liabilities - - - - Trade payables 737,472 448,855 737,472 448,855 Sundry payables and accrued expenses 448,158 108,137 448,158 108,137

1,185,630 556,992 1,185,630 556,992 14 Borrowings

CURRENT

Unsecured liabilities Other financial liabilities 24,226 - 24,226 -

Secured liabilities Bank overdraft - 2,174 - 2,174

24,226 2,174 24,226 2,174 15 Provisions

Analysis of Total Provisions Current - employee entitlements 60,179 87,726 60,179 87,726

60,179 87,726 60,179 87,726

Movement in carrying amounts

Parent

Employee entitlements

$ Total

$ Opening balance at 1 July 2008 87,726 87,726 Unused amounts reversed (27,547) (27,547)


60,179 60,179

Consolidated

$ $ Opening balance at 1 July 2008 87,726 87,726 Unused amounts reversed (27,547) (27,547)


60,179 60,179

16 Other Liabilities

Other deferred income 545,333 187,686 545,333 187,686

Total 545,333 187,686 545,333 187,686

17 Issued Capital 281,787,233 (2008: 242,888,942) Ordinary 22,692,145 22,239,159 22,692,145 22,239,159

Total 22,692,145 22,239,159 22,692,145 22,239,159

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2008 $

2009 $

2008 $

Page 23

(a) Ordinary Shares No. No. No. No. At the beginning of reporting period 242,888,942 205,076,942 242,888,942 205,076,942

Shares issued during the year - issued by direct placement 25,000,000 37,812,000 25,000,000 37,812,000 - conversion of Convertible Notes 13,898,291 - 13,898,291 -

At reporting date 281,787,233 242,888,942 281,787,233 242,888,942

Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held.

At the shareholders meetings, each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

(b) Options

(i) For information relating to Argus Solutions Limited employee option plan, including details of options issued and lapsed during the financial year and the options outstanding at year-end, refer to Note 25.

(ii) For information relating to share options issued to key management personnel during the financial year, refer to Note 25.

18 Reserves

Foreign Currency Translation Reserve

The foreign currency translation reserve records exchange differences arising on translation of a foreign controlled subsidiary.

19 Earnings per Share

(a) Reconciliation of Earnings to Profit or Loss Consolidated

2009 $

2008 $

Loss attributable to members (314,449) (1,438,307)

Earnings used to calculate basic EPS (314,449) (1,438,307)

Earnings used in calculation of dilutive EPS (314,449) (1,438,307)

(b) Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS Weighted average number of ordinary shares outstanding during the year - No.used

in calculating basic EPS 262,092,556 220,764,920 Weighted average number of options outstanding 18,095,833 12,569,258

Weighted average number of ordinary shares outstanding during the year used in calculating dilutive EPS 280,188,389 233,334,178

(c) Diluted earnings per share is not reflected for discontinuing operations as the result is anti-dilutive in nature.

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2009 $

2008 $

2009 $

2008 $

Page 24

20 Controlled Entities

Name

Country of incorporation

Percentage Owned 2009

Percentage Owned 2008

Parent Entity: Argus Solutions Limited Australia - -

Subsidiaries of parent entity: Argus Solutions Inc USA 100 100 Iris Australia Pty Limited Australia 100 100

* Percentage of voting power is in proportion to ownership

21 Interest in joint venture

The Group has a 50% percent interest in each of two joint venture Australian companies which were incorporated in December 2008. Neither company has traded since incorporation.

22 Auditors' Remuneration

Remuneration of the auditor of the parent entity for:

- Auditing or reviewing the financial report 31,200 36,400 31,200 36,400

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2008 $

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23 Cash Flow Information

(a) Reconciliation of Cash Flow from Operations with Profit after Income Tax Net income/loss for the period (314,433) (1,438,308) (314,433) (1,438,308)

Cash flows excluded from profit attributable to operating activities

Non-cash flows in profit Intangible assets 232,313 248,314 232,313 248,314 Property, plant and equipment 21,514 34,795 21,514 34,795 Net gain/(loss) on disposal of controlled

entity - 68,550 - 68,550 Net gain/(loss) on disposal of

investments - 7,268 - 7,268 Impairment adjustments - (219,224) - (219,224)

changes in assets and liabilities, net of the effects of disposal of subsidiary

(Increase)/decrease in trade and term receivables (310,563) 38,903 (310,563) 133,541

(Increase)/decrease in prepayments (35,481) (61,984) (35,481) (61,894) (Increase)/decrease in inventories (15,677) 284,713 (15,677) 284,713 Increase/(decrease) in trade payables

and accruals 986,300 (58,876) 986,300 (58,876) Increase/(decrease) in provisions (27,547) (38,773) (27,547) (38,773)

536,426 (1,134,622) 536,426 (1,039,894)

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2009 $

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(b) Disposal of Entities

During the prior financial year, the controlled entity Digital Imaging Asia Pacific Pte Limited was sold. At 30 June 2007, the values attributed to the subsidiary were impaired to reflect the known recoverable amounts.

Aggregate details of this transaction are: Disposal price - 151,816 - 151,816

Cash consideration - 151,816 - 151,816

Assets and liabilities held at disposal date: Investment in controlled entity - - - 151,816 Cash and cash equivalents - (90,636) - - Receivables - 97,858 - 110,816 Inventories - 290,866 - - Intangible assets - 729 - - Payables - (22,675) - (179,366) Retained earnings - (192,876) - -

- 83,266 - 83,266 Net gain/(loss) on disposal - 68,550 - 68,550

- 151,816 - 151,816

24 Capital and Leasing Commitments

Operating Lease Commitments

Non-cancellable operating leases contracted for but not capitalised in the financial statements

Payable - minimum lease payments - not later than 12 months 80,362 149,457 80,362 149,457 - between 12 months and 5 years 143,942 25,447 143,942 25,447

224,304 174,904 224,304 174,904

The property lease is a non-cancellable lease with a seventeen month term, with rent payable monthly in advance. Contingent rental provisions within the lease agreement require the minimum lease payments shall be increased by 4% per annum.

The lease is secured by a bank guarantee equivalent to three months rent.

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2008 $

2009 $

2008 $

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25 Key Management Personnel Compensation

(a) Compensation Practices

The nature and amount of compensation of key management for the Group is outlined in the Board approved Remuneration Policy, contained in the 2009 Financial Statements.

(b) Key Management Personnel

Names and positions held of key management personnel in office at any time during the financial year are: Key Management Person Position Lindsay James Yelland MACS, FAIDC Chairman (Non-Executive) Graham Bruce Lyman Chief Executive Officer Stephen Simpson FCA Non-Executive Director David Bell Non-Executive Director

Other Key Management Personnel Damien Davis Business Development Executive Gregory Sampson National Sales & Marketing Director Bouny Mounarath Senior Developer

Key management personnel remuneration has been included in the Remuneration Report section of the Directors Report.

(c) Compensation Options

Options Granted As Compensation

No options were granted or exercised in the financial year.

Employee share scheme

In November 2007, members approved the granting of up to 10,000,000 options for the Employee Share Option Plan.

A summary of the rules of the plan are:

• The Board may make an Offer of options to any employee

• Subject to a number of additional conditions the aggregate number of shares which may be optioned and sold under the Plan is 10,000,000.

• The exercise price shall be no less than Market Price or as determined by the Board.

• Unless the Board otherwise resolves no monetary consideration will be payable as issue of options.

• The Board may set the terms of an Offer in its discretion

• The options are exercisable at 7.0c per share by /before Dec 2010.

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Options and Rights Holdings

The number of options over ordinary shares held by each key management personnel of the Group during the financial year is as follows:

30 June 2009

Balance at beginning

of year

Granted as remuneration during the

year

Other changes

during the year

Balance at end of year

Vested during the

year

Exercisable but not vested

Vested and unexercisable

Lindsay James Yelland MACS, FAIDC - - - - - - -

Graham Bruce Lyman - - - - - - - Stephen Simpson FCA - - - - - - - David Bell - - - - - - - Damien Davis 1,000,000 - - 1,000,000 - 1,000,000 - Gregory Sampson 2,000,000 - - 2,000,000 - 2,000,000 -

3,000,000 - - 3,000,000 - 3,000,000 -

30 June 2008

Balance at beginning

of year

Granted under ESOP

Other changes

during the year


Vested during the

year

Exercisable but not vested

Vested and unexercisable

Lindsay James Yelland MACS, FAIDC 667,500 - (667,500) - - - -

Graham Bruce Lyman 1,080,000 - (1,080,000) - - - - Stephen Simpson FCA 63,000 - (63,000) - - - - David Bell - - - - - - - Alan Stringfellow 683,750 - (683,750) - - - - Damien Davis 1,000,000 - - 1,000,000 - 1,000,000 - Shmulik Kachlon 400,000 - - 400,000 - 400,000 - Gregory Sampson 976,250 - (976,250) 2,000,000 - 2,000,000 -

3,470,500 - (3,470,500) 3,400,000 - 3,400,000 -

The Other Changes During the Year column includes options which have expired during the year;

Mr Alan Stringfellow resigned 30 April 2008; Mr David Bell was appointed 1 May 2008.

Key Management Personnel Shareholdings

The number of ordinary shares in Argus Solutions Limited held by each key management personnel of the Group during the financial year is as follows:

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26 Related party transactions continued

Key Management Personnel continued

Page 29

Balance at beginning of

year

Granted as remuneration

during the year

Issued on exercise of

options during the

year

Other changes

during the year


Key Management Personnel Lindsay James Yelland MACS, FAIDC 937,500 - - - 937,500 Graham Bruce Lyman 3,050,001 - - - 3,050,001 Stephen Simpson FCA 3,287,250 - - - 3,287,250 David Bell - - - - -

7,274,751 - - - 7,274,751

Balance at beginning of

year

Granted as remuneration

during the year

Issued on exercise of

options during the

year

Other changes

during the year


30 June 2008 Lindsay James Yelland MACS, FAIDC 937,500 - - - 937,500 Graham Bruce Lyman 3,050,000 - - - 3,050,000 Stephen Simpson FCA 3,287,250 - - - 3,287,250 David Bell

(appointed 1 May 2008) - - - - - Alan Stringfellow

(resigned 30 April 2008) 1,924,016 - - - -

9,198,766 - - - 7,274,751

26 Related party transactions

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

Transaction with related parties: Key Management Personnel

Loans from Directors and Executives

During the financial year, Mr Stephen Simpson and Mr David Bell provided finance to the company by financing certain debtor invoices, at interest rates of 14% per annum. At the end of the financial year, amounts which have not been repaid are included in Trade Payables (Note 13).

In addition, short-term loans were received from certain key management personnel and balances not repaid are included in Other Financial Liabilities (Note 14).

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27 Change in Accounting Policy

(a) Accounting Standards Issued but not Applicable

All other pending Standards issued between the previous financial report and the current reporting date have no application to either the parent or the economic entity.

AASB Amendment AASB Standard Affected 2004-3 AASB 1: First-time Adoption of AIFRS AASB 101: Presentation of Financial Statements AASB 124: Related Party Disclosures 2005-1 AASB 139: Financial Instruments: Recognition and Measurement 2005-2 AASB 1023: General Insurance Contracts 2005-4 AASB 139: Financial Instruments: Recognition and Measurement AASB 132: Financial Instruments: Disclosure and Presentation 2005-9 AASB 4: Insurance Contracts AASB 1023: General Insurance Contracts AASB 139: Financial Instruments: Recognition and Measurement AASB 132: Financial Instruments: Disclosure and Presentation 2006-1 AASB 121: The Effects of Changes in Foreign Exchange Rates New Standard AASB 7: Financial Instruments: Disclosure New Standard AASB 119: Employee Benefits: December 2004

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(b) Accounting Standards Issued/Amended

The following Australian Accounting Standards issued or amended which are applicable to the to the parent and the economic entity but are not yet effective and have not been adopted in preparation of the financial statements at reporting date.

AASB Amendment AASB Standard Affected

Outline of Amendment

Application Date of the Standard

Application Date for the Entity

AASB 2007-3 Amendments to Australian Accounting Standards

AASB 5: Non-current Assets Held for Sale and Discontinued Operations AASB 6: Exploration for and Evaluation of Mineral AASB 102: Inventories AASB 107: Cash Flow Statements AASB 119: Employee Benefits AASB 127: Consolidated and Separate Financial Statements AASB 134: Interim Financial Reporting AASB: 136: Impairment of Assets AASB 1023: General Insurance Contracts AASB 1038: Life Insurance Contracts

The disclosure requirements of AASB 114: Segment Reporting have been replaced due to the issuing AASB 8: Segment Reporting in February 2007. These amendments will involve changes to segment reporting disclosures. However it is anticipated there will be no direct impact on recognition and measurement criteria amounts included in the financial report as the association does not fall within the scope of AASB 8.

1 January 2009 1 July 2009

AASB 8: Operating Segments

AASB 114: Segment Reporting

As above


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(b) Accounting Standards Issued/Amended continued

Page 32

AASB Amendment AASB Standard Affected

Outline of Amendment

Application Date of the Standard

Application Date for the Entity


AASB 1: First-time Adoption of AIFRS AASB 101: Presentation of Financial Statements AASB 107: Cash Flow Statements AASB 111: Construction Contracts AASB 116: Property, Plant and Equipment AASB 138: Intangible Assets

The revised AASB 123: Borrowing Costs issued in June 2007 has removed the option to expense all borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset. However, there will be no direct impact to the amounts included in the association as it already capitalise borrowing costs related to qualifying assets.


AASB 123: Borrowing Costs

AASB 123: Borrowing Costs

As above



AASB 101: Presentation of Financial Statements

The revised AASB 101: Presentation of Financial Statements issued in September 2007 requires the presentation of a statement of comprehensive income and makes changes to the statement of changes in recognised income and expenditure.


AASB 101

AASB 101: Presentation of Financial Statements

As above


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28 Financial instruments

(a) Interest Rate Risk

(i) Financial instrument composition and maturity analysis

The consolidated group's exposure to interest rate risk, which is the risk that a financial instruments value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rates on classes of financial assets and financial liabilities, is as follows:

Weighted Average Effective Interest

Rate Floating Interest Rate Non-interest Bearing

2009 %

2008 %

2009 $

2008 $

2009 $

2008 $

Financial Assets: Cash and cash equivalents 0.50 9.22 88,595 12,631 - - Receivables - - 529,475 - 231,128

Total Financial Assets 88,595 542,106 - 231,128

Financial Liabilities: Trade and sundry payables - - 1,185,630 556,992

Total Financial Liabilities - 1,185,630 556,992

Total

2009 $

2008 $

Financial Assets: Cash and cash equivalents 88,595 12,632 Receivables - 760,603

Total Financial Assets 88,595 773,235

Financial Liabilities: Trade and sundry payables 1,185,630 556,992

Total Financial Liabilities 1,185,630 556,992

(b) Interest rate risk

Exposure to interest rate risk arises on financial assets and financial liabilities recognised at reporting date whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments. The Group is also exposed to earnings volatility on floating rate instruments.

(c) Foreign exchange risk

Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial instrument fluctuating due to movement in foreign exchange rates of currencies in which the Group holds financial instruments which are other than the AUD functional currency of the Group.

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Page 34

(d) Liquidity risk

Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages risk through the following mechanisms:

• preparing forward looking cash flow analysis in relation to its operational, investing and financial activities

• using derivatives that are only traded in highly liquid markets

• monitoring undrawn credit facilities

• obtaining funding from a variety of sources

• maintaining a reputable credit risk profile

• managing credit risk related to financial assets

• investing only in surplus cash with major financial institutions

• comparing the maturity profile of financial liabilities with the realisation profile of financial assets

29 Segment Reporting

(a) Industry and location

The company operates primarily in the biometrics identification and solutions market. All of the company's operations, assets and employees are located in Australia.

(b) Accounting Policies

Segment revenues and expenses are those directly attributable to the segments and include any joint revenue and expenses where a reasonable basis of allocation exists. Segment assets include all assets used by a segment and consist principally of cash, receivables, inventories, intangibles, and property, plant and equipment, net of allowances and accumulated depreciation and amortisation. While most such assets can be directly attributed to individual segments, the carrying amount of certain assets used jointly by two or more segments is allocated to the segments on a reasonable basis. Segment liabilities consist principally of payables, employee benefits, accrued expenses, provisions and borrowings. Segment assets and liabilities do not include deferred income taxes.

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30 Going concern

These financial statements have been prepared on a going concern basis which contemplates the realisation of assets and the payment of liabilities in the ordinary course of business. Should the company be unable to continue as a going concern, it may be unable to realise the carrying value of its assets and to meet its liabilities as they become due.

The company has a net loss of $314,449 in the year ended 30 June 2009. Further, the company has a working capital deficit of $716,615 as at balance date, which may not be sufficient to support current operating levels beyond the next 6 months.

The company’s ability to continue as a going concern is dependent on its ability to generate a net cash flow from operations over the next 6 months, to raise funds from sale of assets, or to obtain further capital contributions from shareholders, sufficient to meet current and future obligations.

Management is pursuing various strategies to address this situation and achieve a positive cash flow over the next 6 months from a net inflow of cash from operations and other capital management initiatives.

In reaching this conclusion Directors considered the company’s trading position in relation to its cash reserves and noted:

• the company has no institutional debt exposure;

• there is expressed continuing support from investors;

• the trading forecasts provided by management for future sales and collection of receivables; and

• initiatives in place to expand sales into off-shore markets.

If the going concern assumption was not appropriate for these financial statements, then adjustments would be necessary to the carrying values of assets and liabilities, the reported expenses and the balance sheet classifications used.

31 Events After the Balance Sheet Date

In July 2009 the company received funding support in the form of a loan from Mr Michael Richards, a UK based investor who is looking to assist the company to expand its sales operations into the United Kingdom and Europe.

The terms of the loan are:

• Lender provided GBP200,000.

• Total amount is to be repaid no later than 31 July 2010

• The company may elect to repay the principle in a lump sum or by instalments.

• Interest is calculated on the first day of each month, being 1.25% of the outstanding amount.

• Income derived in the UK is deposited in an escrow account.

• The Lender has a fixed and floating charge over all intellectual property rights of the company.

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Page 36

32 Company Details

Registered office and Principal place of business The registered office of the company is: Argus Solutions Limited Suite 703 15 Talavera Road Macquarie Park NSW 2113

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Additional information for listed public companies

Page 41

The following additional information is required by the Australian Stock Exchange Ltd in respect of listed public companies only.

1. Shareholding

a. Distribution of Shareholders Category (size of holding) Number Ordinary 1,001 - 5,000 69 - 5,001 - 10,000 111 - 10,001 - 100,000 502 - 100,001 - shares and over 282 -

964 - b. The number of shareholdings held in less than marketable parcels is - c The names of the substantial shareholders listed in the holding company's register as at 30 June 2009 are: Shareholder Number Ordinary Scintilla Strategic Investments Limited 30,000,000 - Mr Andrew Scott Terrey 24,875,000 -

d. Voting Rights The voting rights attached to each class of equity security are as follows: Ordinary shares

- Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has one vote on a show of hands.

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Page 42

e. 20 Largest Shareholders as at 31 August 2009 - Ordinary Shares

Name Number of Ordinary Fully Paid Shares

Held

% Held of Issued

Ordinary Capital

SCINTILLA STRATEGIC INVESTMENTS LIMITED 30,000,000 10.646 MR ANDREW SCOTT TERREY 24,875,000 8.828 CAPITAL TECHNIC GROUP PTY LTD 12,376,000 4.392 BLAMNCO TRADING PTY LTD 11,894,074 4.221 GLOBAL TECHNOLOGY INVESTMENTS LIMITED 7,812,000 2.772 MR EVAN PHILIP CLUCAS & MS LEANNE JANE WESTON <KURANGA NURSERY SUPER A/C> 6,736,707 2.391 DARIN COOPER PTY LTD <DARIN COOPER SUPER FUND A/C> 5,000,000 1.774 SOUTHERN ONCOLOGY SERVICES PTY LTD <WARD RETIREMENT FUND A/C> 4,429,846 1.572 UBS WEALTH MANAGEMENT AUSTRALIA NOMINEES PTY LTD 4,345,000 1.542 SCINTILLA STRATEGIC INVESTMENTS LTD 4,180,000 1.483 MR ROSS ERNEST BARKER 4,000,000 1.420 MR MARK DEMPSEY 3,699,419 1.313 MR PETER VIAL & MRS AMANDA VIAL <VIAL SUPER FUND A/C> 3,426,072 1.216 AIMBROOK SERVICES PTY LIMITED <SIMPSON SUPER FUND A/C> 3,287,250 1.167 HEUREUX INVESTMENTS PTY LIMITED <LYMAN FAMILY A/C> 3,050,001 1.082 THE STRAITS TRUST AND MANAGEMENT LIMITED <THE JULES A/C> 3,012,150 1.069 LABETT PTY LTD <DJURASEVICH SUPER FUND A/C> 3,000,000 1.065 MR LAURIE MACRI 2,908,333 1.032 MR ALAN JOHN HARGREAVES 2,572,916 0.913 INFOTEQ PTY LTD <PETER NUNN SUPER FUND A/C> 2,500,000 0.887 143,104,768 50.785

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2. The name of the company secretary is Robert John Nielson B.Comm FCA 3. The address of the principal registered office in Australia is Suite 703, 15 Talavera Road, Macquarie Park NSW

2113. Telephone (02) 9963-7300

4. Stock Exchange Listing Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian

Stock Exchange Limited.

5. Other Disclosures

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