For personal use only - Australian Securities Exchange2007/09/28 · Executive Officer, Company Secretary and other senior executives. The senior management is responsible for the

Legend Corporation Limited ACN 102 631 087 and Controlled Entities

Technology - Innovation and Performance

2007 Annual Report

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Contents

2 Corporatedirectory

3 Chairman’sletter

5 Reviewofoperations

7 Corporategovernancestatement

13 Directors’report

21 Auditor’sindependencedeclaration

23 Incomestatement

24 Balancesheet

25 Statementofchangesinequity

26 Statementofcashflows

27 Notestoandformingpartofthefinancialstatements

67 Directors’declaration

68 Independentauditreport

70 Additionalinformationforlistedpubliccompanies

72 Directoryofoffices

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CorporateDirectory

Directors

Paul D TeisseireBradley R DoweSimon C Forth

Legend Corporation Limited

Registered Office1ButlerDriveHendonSouthAustralia5014

Phone: 0884019888Fax: 0882776027

Bankers

National Australia Bank22-28KingWilliamStreetAdelaideSouthAustralia5000

Share Registry

Security Transfer Registrars Pty LtdSuite1/770CanningHighwayApplecrossWesternAustralia6153

Phone:0893150933Fax: 0893152233

Solicitors

DeaconsLevel39BankWestTower108StGeorgesTerracePerthWesternAustralia6000

Phone:0894263222Fax: 0894263444

Auditors

Grant Thornton67GreenhillRoadWayvilleSouthAustralia5034

Phone:0883726666Fax: 0883726677

Stock Exchange

Australian Stock Exchange Limited2TheEsplanadePerthWesternAustralia6000

Phone: 0892240000

Company Secretary

Graham Seppelt

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Dear Shareholders,

The 2007 financial year commenced positively with the Company successfully executing two acquisitions (Cabac and IES) that build on Legend’s traditional expertise and operational qualities. The overall result for the financial year was disappointing due to the impact of unprecedented decline in memory prices over a short period of time from December 2006 to February 2007.

In April it was with deep sadness that I advised the passing of Mr Timothy King, Non Executive Director and Company Secretary. Mr King who joined Legend in February 2004, was instrumental in developing the organisation’s Corporate Governance framework and was a great contributor to Legend’s strategic thinking and analysis. The board is currently undertaking a recruitment process to enlist an appropriate independent non executive director.

Legend’s results for the second half of FY2007 year recorded an EBIT of $5.4 million on revenue of $96 million for a net profit after tax of $2.2 million for the half, resulting in net profit after tax of $1.9 million and revenue of $193.5 million for the full year. Legend’s profit was impacted by a global decline in demand for memory products and certain computer components which resulted in significant price declines across a number of product lines. Gross profit improvements are as a result of sales of higher margin Cabac products and to a lesser extent IES (Hendon Semiconductors). Extensive work has been undertaken in the integration of Cabac and IES to develop a combined financial reporting structure, rationalise stock holdings and consolidate both manufacturing and administration functions. We expect that these cost savings will flow through to the 2008 financial results.

A fully franked dividend of 3 cents per share for the year was paid and the Dividend Reinvestment Plan has remained in effect.

The economic outlook for the 2008 financial year looks positive. Legend will continue to build upon the IES and Cabac acquisitions, the existing infrastructure and its valuable human resources.

I would like to thank my fellow directors Bradley Dowe and Simon Forth for their outstanding contributions and express my appreciation to all Legend employees for their continued dedication and personal achievements that underpin Legend.

Kind Regards

Paul Teisseire

Chairman

Chairman’sletter

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Reviewofoperations

Dear Shareholders,

In the 2007 financial year Legend Corporation Limited (“the Company”) has made strategic investments that have positioned the Company for future growth during a period in which profit was impacted by a global decline in demand for memory products and certain computer components. Whilst the reported final EBIT of $6.5 million was disappointing, this result must be viewed in light of our decision to expense the integration costs arising from two acquisitions made during the year and the expense of over $3 million in one-off costs including: $700,000 bad debts in Asia, $930,000 foreign currency losses, $438,000 of disputed claims with suppliers, $235,000 bank charges and stamp duty relating to debt facilities and $212,000 costs relating to closure of the Singapore manufacturing facility. Importantly, the Company generated strong operating cash flow of more than $11 million for the full year. Gross profit also increased significantly, by 62%, to $38.7 million. The improvement in gross profit is a result of sales of higher margin Cabac products and to a lesser extent IES, due to only 8 months contribution to the result.

The acquisition of Cable Accessories Holdings Pty Ltd (Cabac), completed on 3rd July 2006, has provided the traditional Legend operations (LPT) with an expanded product range and market reach while the acquisition of Integrated Electronic Solutions (IES) on 23rd November 2006 has provided the Company with intellectual property and engineering expertise to increase export growth. Both of these acquisitions lever the Company’s key strengths in engineering, sales and distribution.

Consolidation of manufacturing from Singapore and Edwardstown (Adelaide) to the IES production facility at Hendon (Adelaide) has been undertaken. The consolidated manufacturing facility will focus on precision electronics assembly of electronic products. Labour intensive, low technology manufacturing is being outsourced to contract manufacturing facilities in China.

Cabac has exceeded performance expectations and this operation has contributed strongly to improving the Company’s overall profitability and operating margins. The integration of financial and information technology systems is now materially complete and the consolidation of management, office and warehouse facilities will deliver additional benefits and savings. The co-location of both Legend and Cabac’s warehouse and office into larger premises being constructed in Sydney will support product range extension, further improvement in warehouse and inventory management and enable additional cost savings over the coming years.

The acquisition of IES has substantially improved technical and engineering resources, enabling the Company to offer a broader range of higher margin products. IES has contributed 8 months of earnings to Legend during the 2007 financial year and performance has been in line with expectations at the time of the acquisition. IES is now utilising Legend’s Hong Kong based personnel to expand semiconductor sales to China based manufacturers of consumer electrical products. Initial results have been encouraging.

The Company will continue to focus on quality of earnings, increasing gross profit margins and in reducing working capital. The Company is expanding export markets with specialist sales and marketing resources recruited to expand semiconductor sales in the USA. We shall continue to review acquisition opportunities in the electronics and electrical industry which strengthen the Company’s sales and distribution capacity and technology and engineering base and that meet our financial criteria. We expect to see a strong improvement in profitability and continued positive operating cash flows in the 2008 financial year.

Yours Sincerely

Bradley R DoweChief Executive Officer

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Corporategovernancestatement

The Company is committed to implementing the highest standards of corporate governance that are practical for the organisation. The Board of Directors of Legend Corporation Limited (“Legend” or “Company”) is responsible for the corporate governance of the economic entity. The Board guides and monitors the business and affairs of Legend on behalf of the shareholders by whom they are elected and to whom they are accountable.

The ASX requires the Company to disclose the extent to which it has followed the ASX Corporate Governance Council’s 10 principles and 28 best practice recommendations and identify which recommendations have not been followed and the reasons for not adopting the recommendations. The Company has adopted most of the corporate governance initiatives however due to the Company’s current size and activities, the Board has decided not to adopt some of the Council’s recommendations at this stage. The Board will continue to review this position as the Company grows to determine whether and at what point it is appropriate to adopt those recommendations.

On 15 April 2007 Mr Timothy King passed away. Mr King was Chairman of the Audit Committee and Remuneration Committee and was a member of the Nomination Committee. He was a driving force behind the Company’s corporate governance processes since listing on ASX as well as providing significant commitment and valued input to the board in general. As the company requires an experienced and widely skilled Board, to lead and support this dynamic company, a thorough director recruitment process is being undertaken to enlist an appropriate person. In the interim period, Mr Allen Bolaffi has been acting as consultant to the company in relation to both audit and strategic governance. Mr Bolaffi is a Chartered Accountant and brings to Legend experience in manufacturing, corporate governance and financial matters. He is a director of John Shearer Holdings Limited, Macfield Leasing Limited and the Drake Supermarkets Group. He also chairs the audit committee of the Adelaide City Council and is the independent member of the Flinders University of South Australia audit committee.

Additional information relating to corporate governance practices that the Company has adopted can be found on the web site: www.legendcorporate.com

Board and management roles and responsibilities

The Company has formalised and disclosed the roles and responsibilities of the Board and those delegated to senior management.

The responsibilities of the Board include determining and monitoring the objectives and strategic direction of Legend, monitoring the performance of the Company and its senior executives, approving business plans and budgets, and developing and ensuring adherence to Company policies. The Board is also responsible for compliance with the codes of conduct, overseeing risk management and internal controls, and the assessment, appointment and removal of the Chief Executive Officer, Company Secretary and other senior executives.

The senior management is responsible for the efficient and effective operation of the Company in accordance with the objectives, strategies and policies determined by the Board.

The Board has established an Audit and Risk Management Committee, a Remuneration Committee and a Nomination Committee.

The Board of the Company currently consists of one independent non-executive director – the Chairman, Mr Paul Teisseire, and two executive directors - the Chief Executive Officer, Mr Bradley Dowe, and Mr Simon Forth. Mr Teisseire has been a Director of the Company for approximately three and a half years. Mr Dowe and Mr Forth have each been Directors of the Company or its predecessor companies for 18 years and for 9 years, respectively.

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The Council recommends that a Board of Directors should comprise a majority of independent Directors. Legend’s position is that, to be considered independent, a Director must be a non-executive, and:

a) not be a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company.

b) within the last 3 years, not have been employed in an executive capacity by the Company or another group member, or been a Director after ceasing to hold any such employment.

c) within the last 3 years, not have been a principal of a material professional adviser or a material consultant to the Company or another group member, or an employee materially associated with the service provider.

d) not be a material supplier or customer of the Company or other group member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer.

e) have no material contractual relationship with the Company or another group member other than as a Director of the Company.

f) not have served on the Board for a period which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company.

Materiality for these purposes is determined on both quantitative and qualitative bases. An amount of over 10% of the appropriate base amount is considered to be quantitatively material for these purposes, whilst an amount of less than 5% is considered to be quantitatively immaterial.

Qualitative factors considered include the nature of the relationship and its strategic importance, the competitive landscape, the contractual arrangements, and other factors indicating the ability of the Director to exercise unfettered and independent judgement.

Legend’s Board composition does not follow the ASX recommendations, in that a majority of Directors are not independent. However, the Company has an independent Chairman who has a casting vote at Directors’ meetings, and is actively pursuing the appointment of a replacement director for Timothy King. The roles of Chairman and Chief Executive Officer are not exercised by the same person. The Board considers that it will have sufficient representation by independent Directors taking into account its size and the nature of its activities once a further appointment is made.

The composition of the Board is determined using the following principles:

• The Board is to comprise of Directors with a blend of skills, experience and attributes appropriate for the Company and its business; and

• The principal criterion for the appointment of new Directors is their ability to add value to the Company and its business.

The skills, experience and expertise of each Director who is in office at the date of the annual report is included in the Directors’ Report.

Legend has established a Nomination Committee to assess the necessary competencies of Board members, review Board succession plans, evaluate Board performance and make recommendations for the appointment and removal of Board members. The Committee has a formal charter and is chaired by an independent Director.

Subject to the Chairman’s approval, which is not to be unreasonably withheld, Directors have the right, at the Company’s expense, to obtain independent professional advice on issues arising in the course of their duties.

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Audit and risk management

The Board is responsible for ensuring there are adequate policies in relation to risk management and oversight, and that appropriate internal control systems and procedures are in place and functioning effectively. This risk management approach is designed to ensure that strategic, operational, legal, business, and financial risks are identified, assessed, addressed and monitored to assist the economic entity to achieve its business objectives. Legend has adopted a risk management policy.

Legend has established an Audit and Risk Management Committee. The Committee’s current purpose is to provide assistance to the Board in fulfilling its corporate governance and monitoring responsibility in relation to the risks associated with the integrity of financial reporting, internal control systems and external audit functions.

The Committee is also assisting the Board on risk management strategies. The Committee has established policies on risk oversight and management. In addition, the Committee has undertaken a strategic, business and operational risk analysis, in which it formally reviewed, documented, and evaluated organisational risks and the strategies and procedures in place to manage these risks. This is a dynamic process requiring review to ensure that the risk management strategies and procedures are modified and improved to take into account the changing nature and scale of Legend’s activities.

The Committee has a formal charter and its structure complies with the Council’s recommendations, other than the number of Committee members, in that it normally comprises 2 rather than the 3 members recommended by the Council. However, the Board considers this to be an acceptable position, having regard to the size of the Company and will revert to that number when an additional director has been appointed.

Further details on the qualifications for and attendance at Audit and Risk Management Committee meetings, are set out in the Directors’ Report.

The CEO and CFO provide semi–annual written statements to the Board confirming that:

• The statement provided by the CEO and CFO to the Board regarding the Company’s financial condition and operational results is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board; and

• The Company’s risk management and internal compliance and control system is operating efficiently and effectively in all material respects.

Performance and remuneration

The Board has established a remuneration policy. The performance of the Board and key executives is reviewed against both quantitative and qualitative indicators. The performance criteria against which Directors and executives are assessed are aligned with the financial and non-financial objectives of Legend.

Legend conducts a performance evaluation of the Board, its Committees and its members annually in accordance with its policy. This was not conducted by the Board this year, however the Chairman held discussions with each Director individually regarding his role as Director and discussed ways in which the board could improve its performance and set the performance criteria and goals for the next year.

Legend has established a Remuneration Committee with a formal charter to advise the Board on remuneration policies and procedures generally, and to make specific recommendations on remuneration packages for executive Directors, non-executive Directors, and senior executives. The Remuneration Committee structure complies with the Council’s recommendations, other

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than the Committee members, in that it comprises of 2 rather than the 3 members recommended by the Council. However, the Board considers this to be an acceptable position having regard to the size of the Company. The Committee comprises of only independent Directors. The Remuneration Committee will revert to two independent directors once an additional independent director is appointed.

The remuneration of executive Directors and other senior executives is reviewed annually by the Committee having regard to personal and corporate performance on a short term and long term basis, and to relative industry remuneration levels. Where appropriate, the Committee seeks independent advice to ensure appropriate remuneration levels are in place.

The remuneration of non-executive Directors is determined by the Board within the maximum amount approved by shareholders of $200,000 per annum. Non-executive Directors are not entitled to retirement benefits other that statutory superannuation, and do not participate in share or bonus schemes tailored for executives and other employees. In order to provide a level of performance incentive to non-executive Directors that is aligned with shareholder returns, options vesting in 12 months were issued to non-executive Directors at the time of listing on ASX in March 2004.

Where the Company has a requirement for additional services within the skill set of non-executive Directors, and it is efficient and effective to do so, the Board may seek consulting services from non-executive Directors at a market rate approved by the Board.

The remuneration policy, which sets the terms and conditions for the chief executive officer and other senior executives, was developed by the Remuneration Committee and was approved by the Board. All executives receive a base salary, superannuation, fringe benefits, performance incentives and retirement benefits. In consultation with the CEO the Remuneration Committee reviews executive packages annually by reference to Company performance, executive performance, comparable information from industry sectors and other listed companies and independent advice.

Executives are also entitled to participate in the employee share and option arrangements. The amount of remuneration for all Directors and the five key senior executives, including all monetary and non-monetary components, are detailed in the Note 6 to the Financial Report. All remuneration paid to executives is valued at the cost to the Company and expensed. Shares given to executives are valued as the difference between the market price of those shares and the amount paid by the executive. Options are valued using the Black-Scholes methodology.

The Board expects that the remuneration structure implemented will result in the Company being able to attract and retain the best executives to run the economic entity. It will also provide executives with the necessary incentives to work to grow long-term shareholder value.

Further details on Directors’ and executives’ remuneration, and qualifications for and attendance at Remuneration Committee meetings, are set out in the Directors’ Report.

Code of conduct

The Board is responsible for developing the culture of the organisation, including the performance focus and the legal, ethical and moral conduct, to preserve and enhance Legend’s reputation in the technology industry, business generally and the broader community.

Legend’s Code of Conduct adopted requires that all employees are aware of, and comply with, legislation and policies applicable to their position. The Code also requires employees to avoid or ensure proper management of conflicts of interest, to not use confidential information for personal gain, and to generally operate in a fair, honest and open manner. In addition, Legend has a formal policy that sets out the rules for staff (including Directors, officers and key executives) dealing in Legend’s securities, to assist in preventing any transactions contrary to the Corporations Act 2001.

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The Company’s policy is to make reasonable endeavours to ensure that it gives proper consideration to the impact on the environment of its activities, and that the Company observes its obligations in respect of environmental practices, and the health, safety and general well being of its employees.

In recognition of the additional duties and responsibilities of Directors and senior executives, Legend has adopted a Code of Conduct for Directors and Senior Executives. The Code of Conduct is similar to that for employees but in particular sets out the practices necessary to maintain confidence in the Company’s integrity and also sets out the responsibility for the reporting and investigation of unethical practice.

Continuous Disclosure and Shareholder Communication

In order to ensure that Legend meets its obligations with regard to the continuous disclosure requirements and to ensure accountability at senior management level for that compliance, the Company has adopted a continuous disclosure policy.

The policy sets out the Company’s obligations and its policies and procedures to ensure timely and accurate disclosure of price sensitive information to the market.

The Company also has policies in place to ensure integrity in financial reporting. The CEO and CFO provide the Board with a written statement that Legend’s half year and annual financial statements present a true and fair view in all material respects, of the Company’s financial condition and operational results and are in accordance with relevant accounting standards. The Audit and Risk Management Committee in particular and the Board in general form part of the system designed to ensure the integrity of Legend’s financial reporting.

Legend has implemented a Shareholder Communication Policy and endeavours to provide shareholders with important information on the Company in a timely and efficient manner. The Company promotes direct communication with shareholders, and encourages them to direct appropriate questions and information requests to the Chief Executive Officer, Company Secretary or the Board. Direct communication with shareholders is further enhanced by the auditor of the Company being required to attend the Company’s Annual General Meeting.

In addition to the direct mailing of information, Legend posts pertinent information, including details of its corporate governance practices, on its website. The Company has adopted a shareholder communications policy to formalise the above practices. It has also adopted a code that provides guidance for staff and encourages conduct that recognises and respects the legitimate interests of all Legend stakeholders.

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Directors’report

The directors present their report together with the accounts of Legend Corporation Limited (“the parent entity”) and the consolidated accounts of the economic entity, being the parent entity and its controlled entities, for the year ended 30 June 2007.

Directors

The names of the directors in office during the financial year and up to the date of this report are:

Paul D Teisseire

Bradley R Dowe

Simon C Forth

Timothy J King was a non executive director until his passing (15 April 2007).

Principal Activities

The principal activities of the economic entity during the financial year:

1 Manufactureandsalesofcomputermemorybasedproducts.Theproductrangeincludesapplicationsforcomputers,otherinformationtechnologyequipment,mediafordigitalcamerasandportableflashmemorystoragedevices;

2 Thedistributionofcomputercomponentsincludingprocessors,mainboards,harddiskstoragedevices,consumerelectronicsandaccessories;

3 Thedesignandsalesofintegratedcircuits(semiconductors)forconsumerelectricalproducts,medicaldevicesandindustrialelectroniccomponents;and

4 Thedistributionofcableaccessoriesandtoolsservicingtheelectricalwholesaleindustry.

Results

The consolidated profit and extraordinary items of the economic entity after providing for income tax and eliminating outside equity interests amounted to $1,885,134

Dividends

Dividends paid and declared for payment during the financial year are as follows:

Ordinarydividendof$0.015persharepaid16October2006 $1,622,315Interimordinarydividendof$0.015persharepaid13April2007 $2,137,014

As a result of shareholders’ participation in the dividend reinvestment plan, the final cash dividend payments were $1,441,782 and $1,089,976 for October and April respectively.

In addition, since the end of the financial year, the directors have declared a final dividend of $2,166,235 ($0.015 per share) out of retained profits at 30 June 2007. The dividend will be paid 6 November 2007.

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Review of Operations

The acquisitions of Cable Accessories Holdings Pty Ltd (Cabac) in July 2006, and IES Investments Pty Ltd (IES) in November 2006, provided strong synergies to the traditional Legend operation (LPT), including product diversification and intellectual property, levering our core strengths of manufacture, sales and distribution.

The Cabac business has strongly contributed to improve overall gross profit margins. The expenditures associated with the integration of financial and information technology systems are now materially complete and the consolidation of management, office and warehouse facilities will deliver operational benefits and overhead savings.

LPT’s Sydney warehouse and office operations have been consolidated into Cabac’s existing facility.

The acquisition of IES adds substantially to the groups engineering design and technical resources. IES’ contribution over the 8 months since acquisition has been in accordance with expectations. IES is now utilising LPT’s China based personnel to expand its client base by selling existing semiconductor products to China based manufacturers of consumer electrical appliances. Despite the long lead times associated with new client engagement, successes have already been achieved.

Precision manufacturing equipment located at the Edwardstown (Adelaide) and Singapore facilities are in the process of being relocated to the IES Hendon (Adelaide) production centre. Labour intensive production of certain LPT products is being outsourced in Asia. These initiatives will result in significant reductions in production costs and will allow the group to avoid duplication of capital investment.

Traditional IT sector operations have been impacted by industry wide events that have seen a slowing in sales. LPT has adjusted its business to reduce its exposure to these events, focusing on bringing many new high margin product lines to market, many arising from cross channel opportunities presented by recent acquisitions.

Financial Position

The focus in the 2006 - 2007 financial year has been on the growth of sustainable higher margin revenues. Revenue for the period was $193.5 million, a 4% decrease from the prior year (2006: $201.5m), yet overall gross margins significantly improved by 62% to $38.7 million (2006: $23.9m). This is a gross margin ratio of 20.0% (2006: 11.8%). The net profit after tax was $1.9 million (2006: $6.7m).

Strong operating cash flows of $11.6m ($3.1m in excess of EBITDA of $8.5m) were achieved, in spite of integration costs, on the back of an aggressive inventory reduction program for LPT products, improved debtor collections and terms negotiated with international suppliers. Net bank debt at 30 June 2007 was $30.8m.

The net tangible assets of the economic entity were $25.8m as at 30 June 2007. The total equity has increased from $50.7m to $72.5m. During the year $11m was raised by the issue of shares and 18,756,312 shares were issued as part payment for the acquisition of IES Investments Pty Ltd and its wholly owned subsidiary Integrated Electronic Solutions Pty Ltd.F

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Significant Changes in the State of Affairs

The following significant changes in the state of affairs of the parent entity occurred during the financial year:

• On 1 July 2006 all of the shares of Cable Accessories Holdings Pty Ltd were acquired for a total consideration of $25m.

• $10.2m was raised by the issue of shares on 22 December 2006.

• On 23 November 2006 all of the shares of IES Investments Pty Ltd were acquired. Consideration totalled $23m, comprising of $13m LGD shares and $10m cash was completed on 23 November 2006. A deferred cash payment of $5.7m for the balance of the acquisition consideration is payable before 31 October 2007.

Matters Subsequent to the End of the Financial Year

An agreement with Australand Holdings Limited was executed on 14 August 2007 to lease new Sydney warehouse and office facilities at a cost of $1.5 million per annum. The lease term is 10 years with further options totalling 11 years. There have been no other matters or circumstances which have arisen since the end of the financial year which significantly affected or may significant affect the operations of the economic entity, the results of those operations, or the state of affairs of the economic entity in future financial years.

Future Developments, Prospects and Business Strategies

Specialist sales and marketing resources have been recruited to expand a number of key areas including:

• Semiconductor sales to Chinese electrical consumer products manufacturers.

• Semiconductor sales to USA original equipment manufacturers.

• Sales of electrical related products (cable accessories) to energy supply companies in Australasia.

Expansion of the Cabac electrical product range into South Africa and New Zealand is presently under consideration.

Investment shall continue in the development of unique and patented products that will provide sustainable competitive advantage across all business segments.

Complementary acquisition opportunities will be reviewed on an ongoing basis.

Environmental Issues

The economic entity’s operations are not subject to significant environmental regulation under the laws of the Commonwealth and States.

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Directors’ Qualifications and Experience

Paul D. Teisseire (aged52)NotaryPublic,CertificateinLaw(Adelaide),MAICDNon Executive Chairman

Paul is a professional independent non-executive director. He spent over 20 years in a private practice as a corporate lawyer specialising in business and corporate law with a special interest in corporate governance. Based in Adelaide, he is chairman of each of Auspine Ltd, Legend Corporation Ltd and Austin Exploration Limited and is also a non-executive director of BSA Ltd.

Paul is a member of the Legend Audit and Risk Management Committee and is a member of the Remuneration Committee and the Nomination Committee.

Directorship held in other listed entities:

• Current Chairman of Auspine Ltd (since prior to 1 July 2002)

• Current non-executive director of BSA Ltd (since 1 April 2005)

• Current Chairman of Austin Exploration Ltd (appointed June 2006)

Bradley R. Dowe (aged47)BSc(ComputerScience)Chief Executive Officer

Bradley is the founder and Chief Executive Officer of Legend and has been working in the field of computing and engineering for over 20 years. His experience covers all facets of electronics engineering, electronics manufacturing processes, software development and international business operations. Bradley oversees the global management of the organisation. The Company has an employment contract with Bradley. In summary, this contract is for no fixed term, requires an eight week notice to terminate, and does not provide for any termination payments other than accrued salary, superannuation, and leave entitlements under applicable government legislation.

Bradley is a member of the Legend Nomination Committee.

Directorship in other listed entities – none

Simon C. Forth (aged39)GDBA,MBA,GAICD Executive Director

Simon joined Legend in 1989. His career has extended from technical areas such as software/hardware development, through to procurement, sales/marketing in domestic, export and foreign markets. In recent years he has focused on general management, international operations and today concentrates on strategic activities such as mergers and acquisitions. The Company has an employment contract with Simon. In summary, this contract is for no fixed term, requires an eight week notice to terminate and does not provide for any termination payments other than accrued salary, superannuation, and leave entitlements under applicable government legislation.

Simon is a member of Legend Nomination Committee

Directorships in other listed entities – none

Company Secretary

Graham Seppelt held the position of company secretary at the end of the financial year. Mr Seppelt is a Certified Practicing Accountant with 40 years experience. He was appointed company secretary on 18 January 2005. Mr Seppelt has had wide exposure to a range of industries as a senior manager and as a contract accountant in corporate advisory roles. He is also the company secretary for BSA Limited, Austin Exploration Limited and Primary Resources Limited.

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Directors’ Interests

Relevant interests of the directors in the shares, options or other instruments of the parent entity and related bodies corporate are:

Shares Options$0.80 1

PaulTeisseire 160,000 66,666

BradleyDowe 51,222,662 -

TimothyKing 433,333 66,666

SimonForth 543,305 166,666

1Optionsareexercisableat80centsonorbefore31March2008

Remuneration Report

This report details the nature and amount of remuneration for each director of Legend Corporation Limited, and for the executives receiving the highest remuneration.

Remuneration Policy

The policy for determining the nature and amount of emoluments of board members and senior executives is as follows:

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

The group seeks to emphasise payment for results through providing various cash bonus reward schemes, specifically, the incorporation of incentive payments based on the achievement of sales targets and return on equity ratios. The objective of the reward schemes is to both reinforce the short and long-term goals of the company and to provide a common interest between management and shareholders.

Performance Based Remuneration

As part of each executive director and executive remuneration package there is a performance-based component, consisting of key performance indicators (KPIs). The intention of this program is to facilitate goal congruence between directors/executives with that of the business and shareholders.

In consultation with the CEO, performance in relation to the KPIs is assessed annually, with bonuses being awarded depending on the number and deemed difficulty of the KPIs achieved.

Employment contracts of directors and senior executives

There are no contracts that provide any additional benefits above normal employee entitlements.

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Company Performance, Shareholder Wealth and Directors’ and Executives’ Remuneration

The remuneration policy has been tailored to increase goal congruence between shareholders and directors/executives. There have been two methods applied in achieving this aim, the first being a performance based bonus on KPIs, and the second being the issue of options to the majority of directors to encourage the alignment of personal and shareholder interests. The company believes this policy to have been effective in increasing shareholder wealth since incorporation.

Details of Remuneration for the Year Ended 30 June 2007

The remuneration of key management personnel of the economic entity is determined by the Directors following a review of the requirements and the market rates for the specific position. Compensation packages and policies are set by the Board in accordance with industry standards and are designed to attract and retain suitably qualified directors and executives and reward them for performance that results in long term growth in shareholder value.

Non-Executive Directors are compensated on a fixed fee for the performance of services as a Director.

The maximum compensation of non-Executive Directors is the subject of a shareholder resolution in accordance with the parent entity’s constitution, the Corporations Act 2001, and ASX Listing Rules, as applicable. The Board will determine compensation with regard to inputs and the value of contribution to the economic entity by each non-Executive Director. The current limit, which may only be varied by shareholders at a General Meeting, is an aggregate amount of $200,000 per annum.

The Board may award additional compensation to non-Executive Directors called upon to perform extra services or make special exertions on behalf of the economic entity.

Details of the nature and amount of each element of the emoluments of each director of the parent entity and each of the other executive officers of the parent entity and the consolidated entity receiving the highest emoluments are set out in the following tables.

Key Management Personnel

Salary, Fees & Commissions

$

Super- annuation

$

Cash bonus

$

Other (Shares issued)

Total

$

Performance related

%

PaulTeisseire 59,000 2,000 - - 61,000 -

BradleyDowe 106,000 4,000 - 110,000 -

TimothyKing 46,000 - - 46,000 -

SimonForth 100,000 9,000 100,000 155,000 364,000 70

MattReardonChiefFinancialOfficer

171,000 19,000 - - 190,000 -

LeaFoxGeneralManager

100,000 11,000 19,000 - 130,000 15

AndrewMullerChiefFinancialOfficer(untilJanuary2007)

101,000 19,000 - - 120,000 -

BrentonScottManagingDirectorIES

109,000 10,000 - - 119,000 -For

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Remuneration Notes

Bonus for Mr Simon Forth: The bonus was paid October 2006 and was for achievements in relation to strategic developments, including mergers and acquisitions for the Company.

Shares for Mr Simon Forth: The issue of Shares form part of the remuneration for Mr Forth, as recognition of the contributions made in the calendar years 2005 and 2006 towards the establishment of the Company’s Australian and international operations and for his contribution towards the Company’s strategic development, including mergers and acquisitions. The decision of the Board to issue 200,000 Shares to Mr Forth under the Employee Share Plan was based on recommendations made to the Board by the Company’s Remuneration Committee. The issue of shares was approved 23rd November 2006 at the Annual General Meeting, and allotted in December 2006.

Bonus for Ms Lea Fox: The bonus was paid in October 2006 for over-achievement of operational key performance metrics in Legend Performance Technology in the preceding 12 months.

No options have been issued as part of remuneration for the year ended 30 June 2007.

Directors’ Meetings

The following table details the number of directors’ meetings and committee meetings held and number of meetings attended by each of the directors of the parent entity during the financial year ended 30 June 2007.

Committee Meetings

Directors’ meetings Audit & risk committee

Remuneration committee

Nominations Committee

Directors

NumberEligibleto

AttendNumberAttended

NumberEligibleto


NumberEligibleto


NumberEligibleto


PaulTeisseire 17 17 9 9 2 2 1 1

BradleyDowe 17 17 - - - - 1 1

TimothyKing 14 14 8 8 2 2 1 1

SimonForth 17 16 - - - - 1 1

Indemnification of Director or Auditor

During or since the end of the financial year the parent entity has given an indemnity or entered into an agreement to indemnify, or paid or agreed to pay insurance premiums to insure each of the following directors against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity as director of the parent entity, other than conduct involving a wilful breach of duty in relation to the parent entity. The amount of the premium was $3,335 for each director, totalling $13,340.

No liability has arisen under this indemnity as at the date of this report.

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Share Options

At the date of this report there were 299,998 options over unissued ordinary shares in the parent entity, that are exercisable at 80 cents on or before 31 March 2008. The 299,998 options have been issued to directors of the parent entity pursuant to Employee Share Options Plan. These options vested in March 2005. No options were exercised during the year, or prior to the signing of this report.

Proceedings on Behalf of Parent Entity

No person has applied for leave of the Court to bring proceedings on behalf of the parent entity or intervene in any proceedings to which the parent entity is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings. The parent entity was not a party to any such proceedings during the year.

Non-audit Services

The board of directors, in accordance with advice from the audit committee, is satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons:

• All non-audit services are reviewed and approved by the audit committee prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and

• The nature of the services provided do not compromise the general principles relating to auditor independence in accordance with APES110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.

The following fees for non-audit services were paid/payable to the external auditors during the year ended 30 June 2007:

Related practices of Grant Thornton South Australian Partnership

Due Diligence service: $75,440

Auditor’s Independence Declaration

The lead auditor’s independence declaration for the year ended 30 June 2007 has been received and can be found on the following page of the directors’ report.

Rounding of amounts

The company is an entity to which ASIC Class Order 98/100 applies. Accordingly, amounts in the financial statements and directors’ report have been rounded to the nearest thousand dollars.

This report is made in accordance with a resolution of the directors.

P D Teisseire

Chairman of Directors 10th September 2007

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Auditor’sindependencedeclaration

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IncomestatementFortheyearended30June2007

Economic Entity Parent Entity

Note2007$000

2006$000

2007$000

2006$000

Revenue 2 193,483 201,539 6,500 3,833

Costofsales 3 (154,798) (177,608) - -

Gross profit 38,685 23,931 6,500 3,833

Otherincome (201) 526 - -

Distributionexpense (167) (759) - -

Marketingexpense (829) (1,273) - -

Occupancyexpense (1,871) (779) - -

Administrationexpense (25,693) (8,645) (232) -

Financecosts 3 (4,110) (1,599) - -

Otherexpenses (2,687) (3,289) - -

Shareofnetprofits(loss)ofassociates 132 - - -

Profit before income tax expense 3 3,259 8,113 6,268 3,833

Incometaxexpense 4 (1,374) (1,373) 24 -

Profit from the year 1,885 6,740 6,292 3,833

Netloss(profit)attributabletominorityequityinterest

- 2 - -

Profit attributable to members of the parent entity

1,885 6,742 6,292 3,833

Overall operations

Basicearningspershare(centspershare) 8 1.5 7.7

Dilutedearningspershare(centspershare) 8 1.5 7.6

Dividendspershare(cents) 7 3.0 3.0

Theaccompanyingnotesformpartofthesefinancialstatements

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BalancesheetAsat30June2007


Assets Note2007$000

2006$000

2007$000

2006$000

Current assets

Cashandcashequivalents 9 13,089 36,839 - 25,004

Tradeandotherreceivables 10 32,700 31,459 12,066 7,521

Inventories 11 37,343 42,204 - -

Othercurrentassets 18 528 782 - -

Total current assets 83,660 111,284 12,066 32,525

Non-current assets

Investmentaccountedforusingtheequitymethod 12 464 - - -

Property,plantandequipment 16 9,330 5,636 - -

Deferredtaxassets 21 2,676 1,397 626 455

Intangibleassets 17 46,733 5,450 - -

Availableforsalefinancialassets 14 - - 63,789 9,700

Total non-current assets 59,203 12,483 64,415 10,155

Total assets 142,863 123,767 76,481 42,680

Current liabilities

Tradeandotherpayables 19 24,468 28,097 5,702 -

Shorttermborrowings 20 2,304 1,648 - -

Currenttaxliabilities 21 (520) 1,845 147 -

Shorttermprovisions 22 1,640 585 - -

Total current liabilities 27,892 32,175 5,849 -

Non-current liabilities

Longtermborrowings 20 41,890 40,635 - -

Long-termprovisions 22 555 218 - -

Total non-current liabilities 42,445 40,853 - -

Total liabilities 70,337 73,028 5,849 -

Net assets 72,526 50,739 70,632 42,680

Equity

Issuedcapital 23 68,062 42,643 68,062 42,643

Reserves (1,836) (78) 24 24

Retainedprofits 6,202 8,076 2,546 13

Parententityinterest 72,428 50,641 70,632 42,680

Minorityequityinterest 98 98 - -

Total equity 72,526 50,739 70,632 42,680


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StatementofchangesinequityFortheyearended30June2007

Issued Capital

OrdinaryOptions Reserve

Foreign Currency

Translation Reserves

Retained Profits

Minority Equity

Interests TotalEconomic Entity $000 $000 $000 $000 $000 $000

Balanceat1July2005 18,587 36 (283) 3,750 107 22,197

Shareissuedduringtheyear 25,021 (12) - - - 25,009

Costsrelatingtoshareissue (965) - - - - (965)

Profitattributabletomembersofparententity

- - - 6,724 - 6,724

Profit/(Loss)attributabletominorityshareholders

- - - - (2) (2)

Adjustmentfortranslationofforeigncontrolledentities

- - 181 - (7) 174

Sub-Total 42,643 24 (102) 10,492 98 53,155

Dividendspaidorprovidedfor - - - (2,416) - (2,416)

Balance at 30 June 2006 42,643 24 (102) 8,076 98 50,739

Sharesissuedduringtheyear 26,000 - - - - 26,000

Costsrelatedtoshareissue (581) - - - - (581)


- - - 1,885 - 1,885

LossattributabletominorityShareholders

- - - - - -

Adjustmentfortranslationofforeigncontrolledentities

- - (1,758) - - (1,758)

Sub-total 68,062 24 (1,860) 9,961 98 76,285


Balance at 30 June 2007 68,062 24 (1,860) 6,202 98 72,526

Parent EntityBalanceat1July2005

18,587 36 - (1,404) - 17,219


- - - 3,833 - 3,833

Shareissuedduringtheyear 25,021 (12) - - - 25,021


Optionissuedexpenses - - - - - -

Sub Total 42,643 24 - 2,429 - 45,096


Balance at 30 June 2006 42,643 24 - 13 - 42,680

Shareissuedduringtheyear 26,000 - - - - 26,000



- - - 6,292 - 6,292

Sub-total 68,062 24 - 6,305 - 74,391


Balance at 30 June 2007 68,062 24 - 2,546 - 70,632


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CashflowstatementFortheyearended30June2007


Note2007$000

2006$000

2007$000

2006$000

Cash flows from operating activities

Receiptsfromcustomers 207,472 192,738 - -

Paymentstosuppliersandemployees (187,511) (202,515) - -

Interestreceived 347 101 - -

Financecosts (4,110) (1,599) - -

Incometaxpaid (4,635) (1,472) - -

Net cash provided by (used in) operating activities 28a 11,563 (12,747) - -

Cash flows from investing activities

Proceedsfromsaleofplantandequipment 497 697 - -

Purchaseofproperty,plantandequipment (2,894) (3,127) - -

Purchaseofothernon-currentassets - (672) - -

Paymentforsubsidiariesnetofcashacquired 15b (33,794) - (35,415) -

Repaymentofloansbyrelatedparties - - 1,958 -

Net cash provided by (used in) investing activities (36,191) (3,102) (33,457) -

Cash flows from financing activities

Proceedsfromissueofshares 10,985 23,461 10,985 23,461

Proceedsfromborrowings 9,500 30,488 - 3,778

Repaymentofborrowings (17,075) (621) - -

Dividendspaid (2,532) (2,246) (2,532) (2,246)

Net cash provided by (used in) financing activities 878 51,082 8,453 24,993

Netincrease(decrease)incashheld (23,750) 35,233 (25,004) 24,993

Cashatbeginningoffinancialyear 36,839 1,606 25,004 11

Cash at end of financial year 9 13,089 36,839 - 25,004


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NotestoandformingpartoftheFinancialStatementsFortheyearended30June2007

Note �: Statement of significant accounting policies

The financial report is a general purpose financial report that has been prepared in accordance with 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 economic entity of Legend Corporation Limited and controlled entities, and Legend Corporation Limited as an individual parent entity. Legend Corporation Limited is a listed public company, incorporated and domiciled in Australia.

CompliancewithIFRS

Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the consolidated financial statements and notes of Legend Corporation Limited comply with International Financial Reporting Standards (IFRS).

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

Basis of Preparation

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

ReportingbasisandConventions

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

Accounting Policies

1a Principles of Consolidation A controlled entity is any entity Legend Corporation Limited has the power to control the financial and operating policies of so as to obtain benefits from its activities.

A list of controlled entities is contained in Note 15 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 consistency with those policies applied by the parent entity.

Where controlled entities have entered or left the economic entity during the year, their operating results have been included/excluded from the date control was obtained or until the date control ceased.

Minority equity interests in the equity and results of the entities that are controlled are shown as a separate item in the consolidated financial report.

1b Income Tax The charge for current income tax expense is based on the profit for the year adjusted 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.

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Note �: Statement of significant accounting policies (cont)

1b Income Tax (cont)Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

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

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

Legend Corporation Limited and its wholly owned Australian subsidiaries have formed an income tax consolidated group under the tax consolidation regime. Each entity in the group recognises its own current and deferred tax liabilities, except for any deferred tax liabilities resulting from unused tax losses and tax credits, which are immediately assumed by the parent entity. The current tax liability of each group entity is then subsequently assumed by the parent entity. The group notified the Australian Tax Office that it had formed an income tax consolidated group to apply from 1 July 2005. Cable Accessories (Holdings) Pty Ltd, Cable Accessories (Aust) Pty Ltd, IES Investments Pty Ltd and Integrated Electronic Solutions Pty Ltd joined the tax consolidated group from 1 July 2006. The tax consolidated group has entered a tax sharing agreement whereby each company in the group contributes to the income tax payable in proportion to its contribution to the net profit before tax of the tax consolidated group.

1c InventoriesInventories are measured at the lower of cost and net realisable value. The cost of manufactured products includes direct materials, direct labour and an appropriate portion of variable and fixed overheads. Overheads are applied on the basis of normal operating capacity. Costs are assigned on the basis of weighted average costs.

1d 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.

PlantandequipmentPlant and equipment are measured on the cost basis.

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, which 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.

The cost of fixed assets constructed within the economic entity includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance are changed to the income statement during the financial period in which they are incurred.

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DepreciationThe depreciable amount of all fixed assets is depreciated on a straight-line basis over their useful lives to the consolidated group commencing from the time the asset is held ready for use.

Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

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

Class of Fixed Asset Depreciation Rate

Leaseholdimprovements 2.5–30%

Plantandequipment 1–40%

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

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

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

1e Leases Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that is transferred to entities in the consolidated group, are classified as finance leases.

Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term.

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

Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term.

1f Financial Instruments

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

LoansandreceivableLoans 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.

Available-for-salefinancialassets

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.

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1f Financial Instruments

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

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

Legend Corporation Ltd and Controlled Entities designates certain derivatives as either;

i hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge); or

ii hedges of highly probable forecast transactions (cash flow hedges)

At the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions is documented.

Assessments, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items, are also documented.

i Fairvaluehedge:Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income statement, together with any changes in the fair value of the hedge asset or liability that are attributable to the hedged risk.

ii Cashflowhedge: The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is deferred to a hedge reserve in equity. The gain or loss relating to the ineffective portion is recognised immediately in the income statement.

Amounts accumulated in the hedge reserve in equity are transferred to the income statement in the periods when the hedged item will affect profit and loss.

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

ImpairmentAt 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 impairment has arisen. Impairment losses are recognised in the income statement.

1g Impairment of Assets

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

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

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

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1h Investments in Associates

Investments in associate companies are recognised in the financial statements by applying the equity method of accounting. The equity method of accounting recognised group’s share of post-acquisition reserves of its associates.

1i Intangibles

GoodwillGoodwill 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 acquisition of subsidiaries is included in intangible assets. Goodwill on acquisitions of associates is included in investments 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.

TrademarksandLicensesTrademarks and licences are recognised at cost of acquisition. Trademarks and licenses have a finite life and are carried at cost less any accumulated amortisation and any impairment losses. Trademarks and licenses are amortised over their useful life of 5 years.

ResearchanddevelopmentExpenditure 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.

1j Foreign Currency Transactions and Balances

FunctionalandpresentationcurrencyThe 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.

TransactionandbalancesForeign 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.

GroupcompaniesThe 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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1k Employee Benefits

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

Equity-settledcompensationThe group operates a share-based compensation plan. This includes both a share option arrangement and an employee share scheme. The bonus element over the exercise price of the employee services rendered in exchange for the grant of shares and options is recognised as an expense in the income statement. The total amount to be expensed over the vesting period is determined by reference to the fair value of the shares of the options granted.

1l 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.

ProvisionforWarrantiesProvision is made in respect of the economic entity’s estimated liability on all manufactured products and services under warranty at balance date. The provision is measured as the estimated value of future cash flows required to settle the warranty obligation. The future cash flows have been estimated by reference to the economic entity’s history of warranty claims.

1m 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.

1n Revenue

Revenue from the sale of goods is recognised upon the delivery of goods to customers.

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

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.

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

1o 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.

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

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1p 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 Australian 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.

1q Comparative Figures

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

1r Rounding of Amounts

The company is of a kind referred to in Class Order 98/100, issued by the Australian securities and Investments Commission, relating to the “rounding off” of amounts in the financial report. Amounts in the financial report have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, the nearest dollar.

1s Business Combinations

The purchase method of accounting is used to account for all business combinations, including business combinations involving entities or businesses under common control, regardless of whether equity instruments or other assets are acquired. Cost is measured as the fair value of the assets given, equity instruments used or liabilities incurred or assumed at the date of exchange plus costs directly attributable to the acquisition. Where equity instruments are issued in an acquisition, the fair value of the instruments is their published market price as at the date of exchange, unless, in rare circumstances, it can be demonstrated that the published price at the date of exchange is an unreliable indicator of fair value and that other evidence and valuation methods provide a more reliable measure of fair value. Transaction costs arising on the issue of equity instruments are recognised directly in equity.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill (refer to note 15(b)). If the cost of acquisition is less that the Group’s share of the fair value of the identifiable net assets of the subsidiary acquired, the difference is recognised directly in the income statement, but only after a reassessment of the identification and measurement of the net assets acquired.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

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1t 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, obtained both externally and within the group.

Key Estimates – Impairment

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

No impairment has been recognised in respect of goodwill for the year ended 30 June 2007. Should the projected turnover figure be outside 73% of budgeted figures incorporated in value-in-use calculations an impairment loss would be recognised.

Note �: Revenue


Note2007$000

2006$000

2007$000

2006$000

Operating activities

Saleofgoods 193,136 201,539 - -

Dividendsreceived 2a - - 6,500 3,833

Interestreceived 2b 347 101 - -

Otherrevenue - 425 - -

Total Revenue 193,483 202,065 6,500 3,833

Non-operating activities

Gainondisposalofplantandequipment 43 96 - -

Other Income2a Dividend revenue from:

Whollyownedcontrolledentities - - 6,500 3,833

Total dividend revenue - - 6,500 3,833

2b Interest revenue from:

Otherpersons 347 101 - -

Total interest revenue 347 101 - -

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Note �: Profit for the year

Profit from ordinary activities before income tax has been determined after:


2007$000

2006$000

2007$000

2006$000

Expenses

Costofsales 154,798 177,608 - -

Finance costs

External 4,110 1,599 - -

Total finance costs 4,110 1,599 - -

Foreigncurrencytranslationlosses 334 201 - -

Depreciation and amortisation of non-current assets

Plantandequipment 1,770 793 - -

Leaseholdimprovements 94 94 - -

Trademarksandlicences 132 110 - -

Total depreciation and amortisation 1,996 997 - -

Bad and doubtful debts

Tradedebtors 130 486 - -

Total bad and doubtful debts 130 486 - -

Rental expense on operating leases

Minimumleasepayments 1,834 638 - -

Research and Development costs 54 108 - -

Employee Benefits Expenses 16,710 6,505 - -

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Note 4: Income tax expense


2007$000

2006$000

2007$000

2006$000

4a The components of tax expense comprise:

CurrentTax 1,370 1,997 (8) -

DeferredTax (164) (570) - -

Recoupmentofprioryeartaxlosses - (16) - -

Under/(over)provisioninrespectofprioryears 168 (38) (16) -

1,374 1,373 (24) -

4b The prima facie tax on profit from ordinary activities before income tax is reconciled to the income tax as follows:

Primafacietaxpayableonprofitfromordinaryactivitiesbeforeincometaxat30%(2005:30%)

Economicentity 978 2,434 - -

Parententity - - 1,880 1,149

Add:

Taxeffectof:

Non-deductibledepreciation - 6 - -

Othernon-allowableitems 41 18 - -

Employeeshareexpensesduringtheyear 62 - 62 -

Prioryearunder/(over)provision 168 (38) (16) -

Taxlossesinsubsidiariesnotrecognised 201 - - -

472 2,420 46 1,149

Less:

Taxeffectof:

Rebateablefullyfrankeddividends - - 1,950 1,149

Effectoflowertaxratesofoverseassubsidiaries 76 1,023 - -

Researchanddevelopmentconcession - 8 - -

Recoupmentofprioryeartaxlossesnotpreviouslybroughttoaccount - 16 - -

Income tax attributable to entity 1,374 1,373 ( 24) -

The applicable weighted average effective tax rates are as follows: 42% 17% 0% 0%

Theincreaseinweightedaverageincometaxrateisduetolessprofitsbeingmadeinoverseasjurisdictionswithconcessionaltaxratesandthewriteoffofprioryearlossesinjurisdictionsthatarenolongertrading.

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Note �: Key management personnel compensation

5a Names and positions held of economic and parent entity key management personnel in office at any time during the financial year are:

KeyManagementPerson Position

Mr Paul D Teisseire Chairman – Non-Executive

Mr Bradley R Dowe Director – Chief Executive Office-Executive

Mr Simon C Forth Director – Executive

Mr Timothy J King Director – Non-Executive

Mr Andrew Muller Chief Financial Officer

Mr Matt Reardon Chief Financial Officer

Ms Lea Fox Chief Operating Officer

Mr Brenton Scott Managing Director of Integrated Electronic Solutions Pty Ltd

5b Compensation Practices

The company’s policy for determining the nature and amount of compensation of key management for the group is as follows:

The compensation structure for key management personnel is based on a number of factors, including length of service, particular experience of the individual concerned, and overall performance of the company. The contracts for service between the company and key management personnel are on a continuing basis the terms of which are not expected to change in the immediate future. Upon retirement key management personnel are paid employee benefit entitlements accrued to date of retirement. Any options not exercised before or on the date of termination lapse.

The group seeks to emphasize payment for results through providing various cash bonus reward schemes, specifically, the incorporation of incentive payments based on the achievement of sales targets. Bonuses included per Note 5c and 5f are based on these targets. The objective of the reward schemes is to both reinforce the short and long-term goals of the company and to provide a common interest between management and shareholders.

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Note �: Key management personnel compensation (cont)

5c Key Management Personnel Compensation

2007 Short-term BenefitsPost-employment

Benefits

Cash,salary&commissions

Cashprofitshare

Non-cashbenefit Other Superannuation

Other Equity Options

$000 $000 $000 $000 $000

MrPaulDTeisseire 59 - - - 2

MrBradleyRDowe 106 - - - 4

MrSimonCForth 200 - - - 9

MrTimothyJKing 46 - - - -

MrAndrewMuller 101 - - - 19

MrMattReardon 145 - - 26 19

MsLeaFox 119 - - - 11

MrBrentonScott 94 - - 15 10

830 - - 41 54

Other long-term benefits Share-based Payment Total

Performance Related


$000 $000 $000 $000 %

MrPaulDTeisseire - - - 61 -

MrBradleyRDowe - - - 110 -

MrSimonCForth - 155 - 364 70

MrTimothyJKing - - - 46 -

MrAndrewMuller - - - 120 -

MrMattReardon - - - 190 -

MsLeaFox - - - 130 15

MrBrentonScott - - - 119 -

- 155 - 1,080 -

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5c Key Management Personnel Compensation (cont)

2006 Short-term BenefitsPost-employment

Benefits

Cash,salary&commissions

Cashprofitshare

Non-cashbenefit Other Superannuation


$000 $000 $000 $000 $000

MrPaulDTeisseire 56 - - - 2

MrBradleyRDowe 150 - - - 1

MrSimonCForth 135 - - - -

MrTimothyJKing 56 - - - -

MrAndrewMuller 82 - - - 1

MsLeaFox 117 - - - 9

MsLouiseDowe 143 - - - 2

MrMikeSack 155 - - - 14

MrRobKester 109 - - - 10

1,003 - - - 39

Other long-term benefits Share-based Payment Total

Performance Related


$000 $000 $000 $000 %

MrPaulDTeisseire - - - 58 2

MrBradleyRDowe - - - 151 -

MrSimonCForth - - - 135 5

MrTimothyJKing - - - 56 -

MrAndrewMuller - - - 83 -

MsLeaFox - - - 126 8

MsLouiseDowe - - - 145 37

MrMikeSack - - - 169 41

MrRobKester - - - 119 23

- - - 1,042 -

5d Compensation Options

OptionsGrantedasCompensation

No options have been granted as compensation.

5e Shares issued on Exercise of Compensation Options

During the year no options were exercisedFor

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Note �: Key management personnel compensation (cont)

5f Options and rights holdings

Number of options held by Key Management Personnel

Balance30.6.06

Grantedascompens-

ationOptions

exercised

Netchangeother*

Balance30.6.07

Totalvested30.6.07

Totalexercisable

Totalunexercis-

able

Parent Entity Directors

MrPaulDTeisseire 133,333 - - (66,667) 66,666 66,666 66,666 -

MrBradleyRDowe - - - - - - -

MrSimonCForth 333,333 - - (166,667) 166,666 166,666 166,666 -

MrTimothyJKing 133,333 - - (66,667) 66,666 66,666 66,666 -

MrAndrewMuller - - - - - - - -

MsLeaFox - - - - - - - -

MrMattReardon - - - - - - - -

MrBrentonScott - - - - - - - -

Total 599,999 - - (300,001) 299,998 299,998 299,998 -

*Thenetchangeotherreflectedaboveincludesthoseoptionsthathavebeenforfeitedbyholdersaswellasoptionsissuedduringtheyearunderreview.

5g Shareholdings

Number of Shares held or indirectly held by Key Management Personnel

Balance30.6.06

ReceivedasCompensation

OptionsExercised

NetChangeOther*

Balance30.6.07

Key Management Personnel

MrPaulDTeisseire 113,095 - - 46,905 160,000

MrBradleyRDowe 49,632,002 - - 1,590,660 51,222,662

MrSimonCForth 646,638 200,000 - (303,333) 543,305

MrTimothyJKing 300,000 - - 133,333 433,333

MsLeaFox 750,000 - - (360,000) 390,000

MrMattReardon - - - - -

MrBrentonScott - - - 5,016,888** 5,016,888

MrAndrewMuller 30,000 - - - 30,000

Total 51,441,735 200,000 - 5,991,120 57,662,855

* NetChangeotherreferstosharespurchasedorsoldduringthefinancialyear.

**SharesreceivedaspartialcompensationforsaleofsharesinIESInvestmentstoLegendCorporationLimited.Refernote15.

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Note 6: Auditors’ remuneration

During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and non-related firms:


2007$000

2006$000

2007$000

2006$000

6a Audit Services

GrantThorntonSouthAustralianPartnership:

AuditandreviewoffinancialreportsandotherauditworkunderCorporationsAct2001 145 78 - -

Non-GrantThorntonauditfirmsfortheauditorreviewoffinancialreportsofanyentityinthegroup 100 28 - -

Total remuneration for audit services 245 106 - -

Other Assurance services

GrantThorntonSouthAustralianPartnership:

AIFRS - 15 - -

Controlsreview - 16 - -

Duediligenceservices 75 8 - -

RelatedpracticesofGrantThorntonSouthAustralianPartnership:

Duediligenceservices - 70 - -

Total remuneration for other assurance services 75 109 - -

Total remuneration of assurance services 320 215 - -

6b Taxation Services

Otherauditorsofsubsidiaries:

Taxationservices 50 23 - -

Total remuneration for taxation services 50 23 - -

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Note �: Dividends

Economic Entity

Parent Entity

2007$000

2006$000

2007$000

2006$000

7aInterimfullyfrankedordinarydividendof1.5(2006-0.75)centspershare 1,622 1,033 1,622 1,033

7b Fullyfrankedordinarydividendof1.5centspershare 2,137 1,383 2,137 1,383

3,759 2,416 3,759 2,416

7c 2007proposedfinalfullyfrankedordinarydividendof1.5(2006-1.5)centspersharepaidin2007 2,166 1,593 2,166 1,593

7d Balanceoffrankingaccountatyearendadjustedforfrankingcreditsarisingfrom-paymentofprovisionforincometax-dividendsrecognisedasreceivables,franking

debitsarisingfrompaymentofproposeddividendsandfrankingcreditsthatmaybepreventedfromdistributioninsubsequentfinancialyears 9,222 2,702 9,222 2,702

7e Subsequenttoyear-end,thefrankingaccountwouldbereducedbytheproposeddividendreflectedper(c)asfollows: (928) (682) (928) (682)

8,294 2,020 8,294 2,020

Note �: Earnings per share

2007$000

2006$000

8a Reconciliation of earnings to net profit

Netprofit 1,885 6,740

Netprofitattributabletominorityequityinterest - 2

Earnings used in the calculation of basic EPS 1,885 6,742

Earnings used in the calculation of dilutive EPS 1,885 6,742

8b WeightedaveragenumberofordinarysharesoutstandingduringtheyearusedincalculationofbasicEPS 127,588,807 87,434,781

Weightedaveragenumberofoptionsoutstanding*** - 811,781

Weighted average number of ordinary shares outstanding during the year used in calculation of dilutive EPS 127,588,807 88,246,562

*** The525,204optionsgrantedon16March2004arenotincludedinthecalculationofDilutedEPSbecausetheyare“outofthemoney”andthereforenotconsidereddilutivefortheyearended30June2007.TheseoptionscouldpotentiallydilutebasicEPSinthefuture.

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Note �: Cash and cash equivalents


2007$000

2006$000

2007$000

2006$000

Cashatbankandinhand 13,089 36,839 - 25,004

13,089 36,839 - 25,004

Reconciliation of Cash

Cashattheendofthefinancialyearasshowninthecashflowstatementisreconciledtoitemsinthebalancesheetasfollows:

Cashandcashequivalents 13,089 36,839 - 25,004

13,089 36,839 - 25,004

Theeffectiveinterestrateonshort-termbankdepositswas5.8%(2006:5.5%);thesedepositsareatcall.

Note �0: Receivables

Current

Tradereceivables 32,047 31,531 - -

Provisionforimpairmentofreceivables (367) (638) - -

31,680 30,893 - -

Otherreceivables 1,020 566 - -

Amountsreceivablefrom:

Whollyownedsubsidiaries - - 12,066 7,521

32,700 31,459 12,066 7,521

Theprovisionforimpairmentofreceivablesrepresentsspecifictransactionsorreceivablesthathavebeenidentifiedasbeingimpaired.

Note ��: Inventories

Current

Finishedgoods

AtCost 33,451 42,204 - -

AtNetRealisableValue 3,892 - - -

37,343 42,204 - -

��a Inventory Expense

Write-downs of inventories to net realisable value recognised as an expense during the year ended 30 June 2007 amounted to $304,000 (2006: $0). The expense has been included in ‘raw materials and consumables used’ in the income statement. General provisions amounting to $240,000 have been written back after review of specific holdings.

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Note ��: Investments accounted for using the equity method


Note2007$000

2006$000

2007$000

2006$000

Associatedcompanies 13 464 - - -

Note ��: Associated companies

Interests are held in the following associated companies

Name Principal activitiesOwnership

interest

Carrying amount of investment

Unlisted:2007

%2006

%2007$000

2006$000

RadiformAustraliaPtyLtd

Manufactureofheatshrinkelectricalcableprotection Ord 32% - 464 -

464 -

TheaboveassociateisincorporatedinAustralia.Economic Entity Parent Entity

13a Movements in carrying amount2007$000

2006$000

2007$000

2006$000

Balanceatbeginningofthefinancialyear - - - -

Newinvestmentsduringtheyear 372 - - -

Shareofprofitafterincometax 92 - - -

Balance at end of the financial year 464 - - -

13b Retained earnings attributable to associate

Shareofassociate’sprofitfromordinaryactivitiesbeforeincometaxexpense

132 - - -

Shareofassociate’sincometaxexpense (40) - - -

Shareofassociate’sprofitfromordinaryactivitiesafterincometax

92 - - -

Shareofaccumulated(profit/losses)atbeginningofthefinancialyear

50 - - -

Share of retained profits at end of the financial year 142 - - -

13c Summarised Presentation of Aggregate Assets, Liabilities and Performance of Associates

CurrentAssets 590 - - -

Non-currentAssets 224 - - -

Total Assets 814 - - -

CurrentLiabilities 293 - - -

Non-currentLiabilities 149 - - -

Total Liabilities 442 - - -

Net Assets 372 - - -

Net (profit/loss) from ordinary activities after income tax of associates 142 - - -

13d Ownership interest in Radiform Australia Pty Ltd at that company’s balance date was 32% of ordinary shares.

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Note �4: Available-for-sale financial assets


Note2007$000

2006$000

2007$000

2006$000

Unlisted Investments, at cost

Sharesinsubsidiaries - - 63,789 9,700

- - 63,789 9,700

Available-for-sale financial assets comprise 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 assets cannot be reliably measured as variability in the range of reasonable fair value estimates is significant. As a result, all unlisted investments are reflected at cost. Unlisted available-for-sale financial assets exist within active markets and could be disposed of if required.

Note ��: Controlled entities

15a Controlled Entities

Country of Incorporation

Percentage Owned

2007 2006

Parent Entity:

LegendCorporationLimited Australia - -

Subsidiaries of Legend Corporation Limited:

Legend(Australasia)PtyLtd Australia 100 100

CableAccessories(Holdings)PtyLtd Australia 100 -

IESInvestmentsPtyLtd Australia 100 -

Subsidiaries of Legend (Australasia) Pty Ltd

LegendTechInternationalLtd HongKong 100 100

LegendLogisticsLtd HongKong 100 100

LegendPerformanceTechnology(Thailand)CompanyLtd Thailand 100 100

LegendPacificPtyLtd Australia 100 100

LegendTech(RSA)PtyLtd SouthAfrica 100 100

LegendTech(Singapore)PtyLtd Singapore 100 100

LegendPerformanceAsiaLtd Taiwan 80 80

Subsidiaries of Cable Accessories (Holdings) Pty Ltd

CableAccessories(Aust)PtyLtd Australia 100 -

Subsidiaries of IES Investments Pty Ltd

IntegratedElectronicSolutionsPtyLtd Australia 100 -

Theproportionofownershipinterestisequaltotheproportionofvotingpowerheld.

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Note ��: Controlled entities (cont)

15b Controlled entities acquired/disposal

On 1 July 2006, the consolidated entity acquired all of the issued shares of Cable Accessories (Aust) Pty Ltd (CABAC). The consolidated result includes revenue from CABAC of an estimated $61m. On 23rd November 2006, the consolidated entity acquired all of the issued shares of IES Investments Pty Ltd (IES). The consolidated result includes revenue from IES of an estimated $13m. Had IES been owned for the full twelve months, estimated additional revenue of $7m would have been recorded in the years results.

It is not practical to separate the profit that each of these acquired entities would have added, or has added, to the consolidated entity’s net result, since from the date of acquisition each business has been integrated with the rest of the consolidated entity’s operations.

The acquisitions had the following effect on the consolidated entity’s assets and liabilities:

CABAC IES Total

Assets Aqn FV Aqn FV Final

CashandCashequivalents 337 337 1,285 1,285 1,622

Tradeandotherreceivables 13,402 13,402 2,708 2,708 16,110

Inventories 10,033 8,603 2,033 2,033 10,638

Other 385 385 565 565 950

Investmentsaccountedforusingequitymethod 318 318 - - 318

Property,PlantandEquipment 2,909 3,473 609 609 4,082

DeferredTaxAssets 475 1,042 236 236 1,278

Total Assets 27,859 27,560 7,436 7,436 39,996

Liabilities

Tradeandotherpayables 7,856 8,236 2,313 2,313 10,549

Borrowings 3,433 3,433 - - 3,433

TaxLiabilities 604 604 199 199 803

Provisions 641 641 723 723 1,364

Borrowings 6,053 6,053 - - 6,053

Provisions 91 91 - - 91

Total Liabilities 18,678 19,058 3,235 3,235 22,293

Net Assets 9,181 8,502 4,201 4,201 12,703

CashPaidasconsideration 25,000 10,000 35,000

ValueofSharesissuedasconsideration - 13,000 13,000

Cashpaymentsubjecttodeferredterms - 5,702 5,702

Transactioncosts(paidincash) 265 151 416

Total consideration 25,265 28,853 54,118

Goodwill on Acquisition 16,763 24,652 41,415

Acquisitioncostspaidincashinperiod 25,265 10,151 35,416

Cashacquired 337 1,285 1,622

Net Cash costs 24,928 8,866 33,794

Debt acquired 9,486 - 9,486

Aqn: CarryingvaluesinentitybalancesheetondateofaquisitionFV: Fairvalue

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15c Deed of Cross Guarantee

Legend Corporation Ltd, Legend (Australasia) Pty Ltd, Legend Pacific Pty Ltd, Cable Accessories (Holdings) Pty Ltd, Cable Accessories (Aust) Pty Ltd, IES Investments Pty Ltd, Integrated Electronic Solutions Pty Ltd, Legend Tech International Ltd, Legend Logistics Ltd, Legend Performance Technology (Thailand) company Ltd, Legend Tech (RSA) Pty Ltd, Legend Tech (Singapore) Pte Ltd and Legend Performance Asia Ltd are parties to a deed of cross guarantee under which each company guarantees the debts of the others. By entering into the deed, the wholly-owned entities have been relieved from the requirement to prepare a financial report and directors’ report under Class Order 98/1418 (as amended) issued by the Australian Securities and Investments Commission.

Note �6: Property, plant and equipment


2007$000

2006$000

2007$000

2006$000

Plant and equipment

PlantandequipmentatCost–Owned 17,719 7,784 - -

Accumulateddepreciation–Owned (9,075) (2,991) - -

PlantandequipmentatCost–Leased 363 - - -

Accumulateddepreciation–Leased (58) - - -

TotalPlant&Equipment 8,949 4,793 - -

Leasehold improvements

Atcost 539 1,245 - -

Accumulatedamortisation (158) (402) - -

Total leasehold improvements 381 843 - -

Total property, plant and equipment 9,330 5,636 - -

16a Movements in carrying amounts

Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year

Leasehold Improvements

Plant and Equipment Total

$000 $000 $000

Economic Entity:

Balanceatthebeginningofyear 843 4,793 5,636

Additions 123 2,771 2,894

Disposals (488) (516) (1,004)

Additionsthroughacquisitionofentity - 4,082 4,082

Depreciationexpense (94) (1,770) (1,864)

Foreignonchargeadjustment (3) (411) (414)

Carrying amount at the end of year 381 8,949 9,330

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Note ��: Intangible assets


2007$000

2006$000

2007$000

2006$000

Goodwill

Cost 46,304 4,889 - -

Accumulatedimpairedlosses - - - -

Net carrying value 46,304 4,889 - -

Trademarks and licences

Cost 671 671 - -

Accumulatedamortisationandimpairment (242) (110) - -

Net carrying value 429 561 - -

Total intangibles 46,733 5,450 - -

Economic EntityGoodwill

$000Trademarks& Licences

$000

Year ended 30 June 2006

Balanceatthebeginningofyear 4,889 -

Additions - 671

Disposals - -

Amortisationcharge - (110)

Impairmentlosses - -

4,889 561

Year ended 30 June 2007

Balanceatthebeginningofyear 4,889 561

Additions 41,415 -

Disposals - -

Amortisationcharge - (132)

Impairmentlosses - -

Closing value at 30 June 2007 46,304 429

Intangible assets, other than goodwill, have finite useful lives. The current amortisation charges for intangible assets are included under depreciation and amortisation expense per the income statement. Goodwill has an infinite life.F

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Impairment Disclosures Goodwill is allocated to cash-generating units, which are based on the group’s reporting segment.

2007$000

2006$000

Designmanufacturinganddistributionsegment 27,972 4,889

Importanddistributionofelectrical,dataandcommunicationsproducts 18,332 -

46,304 4,889 The recoverable amount of the cash-generating units above is determined based on value-in-use calculations. Value-in-use is calculated based on the present value of cash flow projections over a 5-year period. The cash flows are discounted using the yield of 5-year government bonds at the beginning of the budget period.

The following assumptions were used in the value-in-use calculations:

Growth Rate Discount Rate

Design,manufactureanddistribution 5% 12.51%

Importanddistributionofelectrical,dataandcommunicationsproducts 5% 12.51%

Management has based the value-in-use calculations on budgets for each reporting segment. These budgets use historical weighted average growth rates to project revenue. Costs are calculated taking into account historical gross margins as well as estimated weighted average inflation rates over the period, which are consistent with inflation rates applicable to the locations in which the segments operate. Discount rates are pre-tax and are adjusted to incorporate risks associated with the segment.

Note ��: Other assets


2007$000

2006$000

2007$000

2006$000

Current

Other - 9 - -

Prepayments 528 773 - -

528 782 - -

Note ��: Trade and other payables

Current

Unsecuredliabilities

Tradepayables 17,467 25,912 5,702 -

Sundrypayablesandaccruedexpenses 7,001 2,183 - -

Amountpayabletootherrelatedparty - 2 - -

24,468 28,097 5,702 -

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Note �0: Borrowings


Note2007$000

2006$000

2007$000

2006$000

Current

Securedliabilities

Bankbills 2,000 1,248 - -

HirePurchaseLiability 304 400 - -

2,304 1,648 - -

Non-current

Securedliabilities

Bankbills 41,847 40,236 - -

HirePurchaseliability 43 399 - -

41,890 40,635 - -

20a: Total current and non-current secured liabilities:

BankBills 43,837 41,484 - -

HirePurchaseLiability 25a 347 799 - -

44,194 42,283 - -

20b The bank overdraft, bill and equipment finance facilities are secured by

i Cross Company Guarantees supported by first registered mortgages over the whole of the assets and undertakings including uncalled capital of the following companies; Legend Corporation Ltd, Legend (Australasia) Pty Ltd, Legend Pacific Pty Ltd, Cable Accessories (Holdings) Pty Ltd, Cable Accessories (Aust) Pty Ltd, IES Investments Pty Ltd, Integrated Electronic Solutions Pty Ltd, Legend Tech International Ltd, Legend Logistics Ltd, Legend Performance Technology (Thailand) company Ltd, Legend Tech (RSA) Pty Ltd, Legend Tech (Singapore) Pte Ltd and Legend Performance Asia Ltd.

ii Assignment by Legend (Australasia) Pty Ltd over QBE Trade Indemnity Insurance

20c The following covenants apply to debt facilities provided by the bank.

i CapitalAdequacyRatio: Tangible net worth divided by Total tangible assets must not be less than 26% from 30

September 2007.

ii EBITDA: Quarterly cumulative EBITDA must be at least 85% of approved budgeted amounts.

iiiOperatingCash: Quarterly cumulative EBITDA must be at least 85% of approved budgeted amounts.

ivDividendPayoutRatio: Total Dividends declared and paid in respect of financial years commencing after 30

June 2007 are not to exceed 50% of Net Profit After Tax.

v NetInterestbearingDebt: Net interest bearing debt is not to exceed 110% of approved budgeted amounts

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Note ��: TaxEconomic Entity Parent Entity

Note2007$000

2006$000

2007$000

2006$000

21a Liabilities

Current

IncomeTax (520) 1,845 147 -

21b Assets

Deferredtaxassetscomprise:

Provisions 1,211 374 - -

Taxallowancerelatingtoproperty,plantandequipment - (83) - -

Transactioncostsonequityissue 620 455 620 455

Taxlosses 778 651 6 -

Other 67 - - -

2,676 1,397 626 455

21c Reconciliations

i Gross Movements

Theoverallmovementinthedeferredtaxaccountisasfollows:

Openingbalance 1,397 405 455 130

Deferredtaxattributabletolistingcostscrediteddirectlytoequity 165 422 165 422

(Charge)/credittoincomestatement (164) 570 - -

Offsettoprovisionofcontrolledentity - - - (97)

Recognisedthroughacquisitions 1,278 - - -

Closing balance 2,676 1,397 620 455

ii Deferred Tax Liability

Themovementindeferredtaxliabilityforeachtemporarydifferenceduringtheyearisafollows:

Tax allowance relating to property, plant and equipment

Openingbalance 83 163 - -

Charged(credited)totheincomestatement (83) (80) - -

Closing balance - 83 - -

Other

Openingbalance - 103 - -

Charged(credited)totheincomestatement - (103) - -

Closing balance - - - -

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Note ��: Tax (cont)


2007$000

2006$000

2007$000

2006$000

21c Reconciliations (cont)

iii Deferred Tax Assets

Themovementindeferredtaxassetsforeachtemporarydifferenceduringtheyearisasfollows:

Provisions

Openingbalance 374 167 - -

Creditedtotheincomestatement (441) 207 - -

Recognisedthroughacquisition 1,278 - - -

Closing balance 1,211 374 - -

Transaction costs on equity issue

Openingbalance 455 130 455 130

Offsetagainstcurrentprovisionof 165 422 165 422

Controlledentity - (97) - (97)

Closing balance 620 455 620 455

Tax losses

Openingbalance 654 - - -

Creditedtotheincomestatement 127 651 - -

Closing balance 778 651 - -

Other

Openingbalance - 108 - -

Credited/(charged)totheincomestatement 67 (108) - -

Closing balance 67 - - -

Deferred tax assets not brought to account, the benefit of which will only be realised if the conditions for deductibility set out in Note 1b occur.

• temporary differences $Nil (2006:$Nil)

• tax losses: operating losses $Nil (2006:$Nil)

• tax losses: capital losses $Nil (2006: $Nil)

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Note ��: Provisions

Economic Entity

Warranties$000

EmployeeBenefits

$000Total$000

Openingbalanceat1July2006 388 416 804

Additionalprovisions - 2,332 2,332

Amountsused - (828) (828)

Unusedamountsreversed (113) - (113)

Balance at 30 June 2007 275 1,920 2,195

Analysis of Total Provisions


2007$000

2006$000

2007$000

2006$000

Current 1,640 585 - -

Non-current 555 218 - -

2,195 803 - -

Provision for warranties

A provision of $275,000 at 30 June 2007 has been recognised for estimated warranty claims in respect of products and services sold which are still under warranty at balance date. The provision is measured as the estimated value of future cash flows required to settle the warranty obligation. The future cash flows have been estimated by reference to the economic entity’s history of warranty claims.

Provision for employee benefits

A provision has been recognised for employee entitlements relating to long service leave. In calculating the present value of future cash flows in respect of long service leave, the probability of long service leave being taken is based on historical data. The measurement and recognition criteria relating to employee benefits has been included in Note 1k to this report.

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Note ��: Issued capital


2007$000

2006$000

2007$000

2006$000

144,415,654(2006,106,204,332)fullypaidordinaryshares

68,062 42,643 68,062 42,643

The company has authorised share capital amounting to 144,415,654 ordinary shares.

No No No No

23a Ordinary shares

Atthebeginningofreportingperiod 106,204,332 68,832,765 106,204,332 68,832,765

Shares issued during the year

2September2005 10,300,000 10,300,000

6October2005 12,776,924 12,776,924

17October2005 58,415 58,415

23December2005 50,000 50,000

14to27March2006 250,000 250,000

13April2006 192,727 192,727

14June2006 13,800,001 13,800,001

13July2006 1,850,000 1,850,000

14July2006 100,000 100,000

16October2006 289,032 289,032

24November2006 16,266,504 16,266,504

22December2006 2,489,808 2,489,808

22December2006 15,268,000 15,268,000

27April2007 1,947,978 1,947,978

Shares bought back during the year

21October2005 (10,500) (10,500)

29March2006 (46,000) (46,000)

Atreportingdate 144,415,654 106,204,332 144,415,654 106,204,332

• On 13 July 2006 the company issued 1,850,000 shares at 70 cents.

• On 14 July 2006 the company issued 100,000 shares at 70 cents.

• On 16 October 2006 the company issued 289,032 shares at 62.46 cents each to shareholders under the Dividend Reinvestment plan.

• On 24 November 2006 the company issued 16,266,504 shares at 69.31 cents and on 22 December 2006 the company issued a further 2,489,808 shares at 69.31 cents to the previous owners of IES Investments Pty Ltd as part of the acquisition of IES Investments Pty Ltd (refer note 15b).

• On the 22 December 2006 the company issued 15,000,000 shares at 68 cents.

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23a Ordinary shares (cont)

• On the 22 December 2006 the company issued 268,000 shares at 77.5 cents under the Employee Share arrangement.

• On 27 April 2007 the company issued 1,947,978 at 53.75 cents to shareholders under the Dividend Reinvestment plan.

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

At 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.

23b Options

i For information relating to the Legend Corporation Limited employee option plan, including details of options issued, exercised and lapsed during the financial year and the options outstanding at year-end, refer to Note 30. Share – based payments

ii For information relating to share options issued to directors during the financial year, refer to Note 30. Share – based payments.

23c Employee share scheme

23d

For information relating to the Legend Corporation Limited Employee Share Scheme, including details of shares issued during the financial year, refer to Note 30. Share – based payments

Dividend reinvestment planThe company has established a dividend reinvestment plan under which holders of ordinary shares may elect to have all or part of their dividend entitlement satisfied by the issue of new ordinary shares rather than being paid cash. Shares are issued under the plan at a 5% discount to the market price.

Note �4: Reserves

Foreign Currency Translation Reserve

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

Option Reserve

The option reserve records items recognised as expenses on valuation of employee share options.

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Note ��: Capital and leasing commitments


Note2007$000

2006$000

2007$000

2006$000

25a Hire purchase commitments

Payable:

Notlaterthan1year 314 443 - -

Between1yearand5years 49 432 - -

MinimumHirePurchasepayments 363 875 - -

Lessfuturefinancecharges (16) (76) - -

PresentvalueofminimumHPpayments 20 347 799 - -

25b Operating lease commitments

Non-cancellableoperatingleasescontractedforbutnotcapitalisedinthefinancialstatements

Payable:

Notlaterthan1year 989 392 - -

Laterthan1yearbutnotlaterthan5years 1,476 1,029 - -

Laterthan5years - - - -

2,465 1,421 - -

25c Capital Expenditure Commitments

There were no capital expenditure commitments as at 30 June 2007.

Note �6: Contingent liabilities and contingent assets

Estimates of the potential financial effect of contingent liabilities, that may become payable:

Related party guarantees provided

Legend Corporation Ltd, Legend (Australasia) Pty Ltd, Legend Pacific Pty Ltd, Cable Accessories (Holdings) Pty Ltd, Cable Accessories (Aust) Pty Ltd, IES Investments Pty Ltd, Integrated Electronic Solutions Pty Ltd, Legend Tech International Ltd, Legend Logistics Ltd, Legend Performance Technology (Thailand) company Ltd, Legend Tech (RSA) Pty Ltd, Legend Tech (Singapore) Pte Ltd and Legend Performance Asia Ltd have provided cross guarantees as described in Note 15(c) Controlled Entities and Note 20(b) Borrowings. No deficiency of net assets existed in the entities concerned at 30 June 2007..

Litigation by associate entity

A claim for payment of amounts received under a standby letter of credit has been brought against the economic entity. The action is being defended and there is a further counterclaim/crossclaim.

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Note ��: Segment reporting

Primary reporting — Business segments

The economic entity operates in two principal business segments:

1) memory modules and semiconductors, and

2) electrical, data and communications products

Secondary reporting — Geographical segments

The economic entity has operations in Australia, New Zealand, Asia and South Africa. Secondary segment reporting analyses the primary segment activities by these geographic regions.

Australia / NZ Asia Africa Total

Revenues

Memoryproducts&Semiconductors 44,981 33,864 7,207 86,052

Electrical,dataandcommunicationsproducts 80,894 21,532 4,789 107,216

Costs


Electrical,dataandcommunicationsproducts 77,321 22,373 4,813 104,507

Results before tax

Memoryproducts&Semiconductors 1,381 (1,377) 546 550

Electrical,dataandcommunicationsproducts 3,574 (841) (24) 2,709

Assets


Electrical,dataandcommunicationsproducts 52,744 555 1,304 54,603

Liabilities

Memoryproducts&Semiconductors 36,929 9,354 637 46,920

Electrical,dataandcommunicationsproducts 22,430 295 692 23,417

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Note ��: Segment reporting (cont)

Notes to and forming part of the segment information

i AccountingpoliciesSegment information is prepared in conformity with the accounting policies of the entity as disclosed in note 1 and Accounting Standard AASB 114 Segment Reporting.

Segment revenues, expenses, assets and liabilities are those that are directly attributable to a segment and the relevant portion that can be allocated to the segment on a reasonable basis. Segment assets include all assets used by a segment and consist primarily of operating cash, receivables, inventories, property, plant and equipment and goodwill and other intangible assets, net of related provisions. While most of these assets can be directly attributable to individual segments, the carrying amounts of certain assets used jointly by segments are allocated based on reasonable estimates of usage. Segment liabilities consist primarily of trade and other creditors, employee benefits and provision for service warranties. Segment assets and liabilities do not include income taxes.

ii ChangeinsegmentaccountingpolicyIn the prior year, Legend’s global business operations were relatively similar in terms of products sold, types of customers and general business risks and influences. Following the acquisition of Cable Accessories on 1 July 2007 and Integrated Electronic Solutions in November 2007, the company has worked on integrating operations to maximize synergy benefits across the full value chain for the merged business. Group operations have been separated on the basis of the underlying business activity, which can be reasonably divided into :

1. design and precision manufacture of electronic components and (generally) sale to original equipment manufacturers or systems integrators

2. import of finished products for use in electrical and ICT applications and distribution through wholesale and reseller channels.

Group operations continue in three distinct geographies Australia/New Zealand, Asia and South Africa. Each of these geographies is separately reported.

iii Segmentrevenues,expensesandresultsincludetransfersbetweensegments.Such transfers are priced at cost and eliminated on consolidation.

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Note ��: Cash flow information


2007$000

2006$000

2007$000

2006$000

28a Reconciliation of cash flow from operations with profit from ordinary activities after income tax

Profitfromordinaryactivitiesafterincometax 1,885 6,742 6,292 3,832

Non-cash flows in profit from ordinary activities

Amortisation 132 110 - -

Depreciation 1,864 887 - -

Write-offofcapitalisedexpenditure 207 - - -

Netloss/(profit)ondisposalofproperty,plantandequipment

(43) (96) - -

Noncashdividendreceived - - - (3,832)

Netmovementinforeigncurrencytranslationreserve (1,344) 162 - -

Employeeshareissuesexpensed - - 207 -

Shareofassociatedcompaniesnetprofitafterincometaxanddividends

(132) 55 - -

Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries

(Increase)/decreaseintradereceivables 15,418 (7,739) - -

(Increase)inloantosubsidiary - - (6,475) 787

(Increase)inothercurrentassets 1,204 (550) - (25,000)

(Increase)/decreaseininventories 15,498 (21,025) - -

Increase/(decrease)intradecreditorsandaccruals

(19,894) 9,147 - -

(Increase)/decreaseinincometaxespayable (3,168) 507 147

(Increase)/decreaseindeferredtaxassets (1) (589) (171) (171)

(Decrease)indeferredtaxliability (91) (102) - -

Increase/(decrease)inprovisions 28 (201) - -

Decreaseinoptions - - - (12)

Increaseinissuedcapital - - - 24,396

Cash flow from operations 11,563 (12,747) - -

28b Non-cash Financing and Investing Activities

i During the year the economic entity acquired plant and equipment with an aggregate value of $0 (2006: 0) by means of commercial hire purchase. These acquisitions are not reflected in the statement of cash flows

ii During the year the parent entity issued 2,237,010 ordinary shares under the Dividend Reinvestment Scheme with an aggregate value of $1,227,561. This is not reflected in the statement of cash flows.

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Note ��: Cash flow information

28c Credit Standby Arrangements with Banks


2007$000

2006$000

2007$000

2006$000

Creditfacility 72,213 59,777 - -

Amountutilised (51,332) (42,283) - -

Unused credit facility 20,881 17,497 - -

Themajorfacilitiesaresummarisedasfollows:

Legend (Australasia) Pty Ltd has a Multi Option Facility (MOF) of $67.5m and a Revolving Lease Facility of $4m with the National Australia Bank. The MOF is subject to annual review. At balance sheet date the MOF has an approved term to June 2008, but this may be extended at the Bank’s option at each annual review for a further year. The MOF includes options for bill discounting, documentary & standby letters of credit, contingent liabilities including guarantees, equipment finance and overdraft facilities. Terms applying to the MOF include certain performance benchmarks covering key indicators such as interest coverage, working capital and the equity levels of the group.

The Company considers that the terms of the facilities and associated securities are standard for arrangements of this nature.

Legend Tech (Singapore) Pte Ltd has a USD$4m loan facility with the Hong Kong & Shanghai Bank. This facility may be extended at the bank’s option at each annual review for a further year.

Legend (Australasia) Pty Ltd had a forward exchange contract for USD. This not hedge a specific transaction, rather it was a cashflow hedge.

Note ��: Economic dependency

The group has no significant dependence on any single or group of suppliers or customers.

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Note �0: Share based payments

Employee Share Option Arrangement

On 16 March 2004, 900,000 share options were granted to directors. 300,001 2 year options at an exercise price of $0.60 per share, 300,001 3 year options at an exercise price of $0.70 per share and 299,998 4 year options at an exercise price $0.80 per share. The options vested after 12 months. The options hold no voting or dividend rights and are not transferable. When a director ceases employment the options are deemed to have lapsed. Since balance date, no director has ceased their employment.

On 13 March 2007 300,001 Options with an issue price of $0.70 were forfeited.

All options granted to key management personnel are ordinary shares in Legend Corporation Limited, which confer a right of one ordinary share for every option held.


2007 2006 2007 2006

Numberof

Options

WeightedAverageExercise

Price$

Numberof

Options


Price$

Numberof

Options


Price$

Numberof

Options


Price$

Outstandingatthebeginningoftheyear 599,999 0.75 900,000 0.70 599,999 0.75 900,000 0.70

Granted - - - - - - - -

Forfeited - - - - - - - -

Exercised - - (300,000) 0.60 - - (300,000) 0.60

Expired (300,001) 0.70 (1) 0.60 (300,001) 0.70 (1) 0.60

Outstanding at year-end 299,998 0.80 599,999 0.75 299,998 0.80 599,999 0.75

Exercisable at year-end 299,998 0.80 599,999 0.75 299,998 0.80 599,999 0.75

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Note �0: Share based payments (cont)

Employee Share Arrangement

The Company has established an employee share plan (“ESP”) by which the Company’s Board may issue Shares to employees of the Company or its subsidiaries, including executive directors.

The ESP will be administered in accordance with the terms of the ESP rules, which are summarised below;

• Shares may be issued under the ESP at the discretion of the Board to employees of the Company or its subsidiaries (including executive directors) upon such terms as the Board may determine including restrictions as to when Shares issued under the ESP are to be sold by participating employees. Any proposed issue of Shares to executive directors will require shareholder approval under the Listing Rules.

• The aggregate number of shares on issue under the plan should not exceed 5% of the number of shares on issue at any time. The number of shares which may be allotted to any one Eligible Employee shall be restricted so that the Eligible Employee is able to cast no more than 5% of votes at a General Meeting of the Company.

• The Company may issue Shares under the ESP at a price up to equivalent of 90% of the weighted average ASX market price for Shares during the 5 trading days before the date of invitation to participate.

• Shares issued under the ESP will be ordinary fully paid Shares in the Company and from date of issue will rank equally with all other ordinary fully paid Shares in the Company.

• Participants must not sell, transfer, assign, mortgage, charge or otherwise encumber a share issued under the plan until the later of the following:

a) for shares issued for consideration until such time as the Board may determine in its absolute discretion

b) the expiry of any service continuity period specified by the Company

c) the satisfaction of any performance criteria specified by the Company.

• The Company may (but is not obliged to) buy-back shares, within 12 months of cessation of employment, at a price equal to the weighted average ASX market price for shares during the 5 trading days immediately preceding the date of cessation (or $0.01 in the case of no cash consideration).

Number of shares granted

Fair value at issue date per

share$

Fair value at Issue Date:Aggregate

$000

16March2004-issued 2,187,000 0.59 1,290

22November2004-boughtback (15,500) - -

10December2004-issued 100,000 0.53 53

30June2005-issued 855,000 0.60 831

21October2005-boughtback (10,500) - -

29March2006–boughtback (46,000) - -

22December2006-issued 268,000 0.775 208

Total Issued 3,338,000

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Note ��: Events after the balance sheet date

i An agreement with Australand Holdings Limited was executed on 14 August 2007 to lease new national warehouse and office facilities at a cost of $1.5 million per annum. The lease term is 10 years with further options totalling 11 years.

ii Precision manufacturing equipment located at the Edwardstown (Adelaide) and Singapore facilities are in the process of being relocated to the IES Hendon (Adelaide) production centre. Labour intensive production of certain LPT products is being outsourced in Asia. This relocation results in savings of a minimum of $250,000 per annum in overhead costs. In addition, we expect to make gains from improved factory efficiency and logistics consolidation.

Note ��: 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.


2007$000

2006$000

2007$000

2006$000

Transactions with related parties:

i Associated Companies

Purchaseofelectricalcableproducts 1,500 - - -

ii Director-related entities

Legend(Australasia)PtyLtdleasesanumberofpropertiesfromtheVicsaComputercraftPropertyTrustandTheShortstopTrust.BothentitiesarecontrolledandownedbyBradleyandLouiseDowe.Leasechargesfortheyearwere: 535 344 - -

FixturesandfittingsattheEdwardstownpropertywerepurchasedbytheVicsaComputercraftPropertyTrustfromLegend(Australia)PtyLtdforfairvalue.Considerationreceived: 550 - - -

iii Ultimate parent entity

LegendCorporationreceiveddividendsfromcontrolledentitiesduringtheyearof

- - 6,500 3,833

Outstandingbalancesatyearendofloanstosubsidiaries:

- - 12,066 7,521

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Note ��: Financial instruments

33a Financial Risk Management

The group’s financial instruments consists mainly of deposits with banks, local money market instruments, accounts receivable and payable, loans to and from subsidiaries and bills.

The main purpose of non-derivative financial instruments is to raise finance for group operations.

Derivatives are not used by the group for hedging purposes.

i Treasury Risk Management

A finance committee consisting of senior executives of the group meet on a regular basis to analyse currency and interest rate exposure and to evaluate treasury management strategies in the context of the most recent economic conditions and forecasts.

ii Financial Risks

The main risks the group is exposed to through its financial instruments are interest rate risk, foreign currency risk, liquidity risk, credit risk and price risk.

Interestraterisk

Interest rate risk is managed with a mixture of fixed and floating rate debt. At 30 June 2007 all debt was floating due to the generally stable market interest rates and management’s view of generally forecast low volatility in medium term interest rates.

Foreigncurrencyrisk

The group is exposed to fluctuations in foreign currencies arising from the sale and purchase of goods and services in currencies other than the group’s measurement currency. Where possible, foreign assets and liabilities are balanced to provide natural foreign currency hedge positions. Where high volatility exists in a particular currency, cashflow exposure is hedged.

Liquidityrisk

The group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate unutilised borrowing facilities are maintained.

Creditrisk

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the balance sheet and notes to the financial statements.

The economic entity does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the economic entity.

Pricerisk

The group does not have any significant exposure to movements in commodity prices.For

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33b Interest rate risk

The economic entity’s exposure to interest rate risk, which is the risk that a financial instrument’s 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:

Fixed interest rate maturing

Weighted average effective

interest rate

Floating interest rate $000

Within1year$000

1to5years$000

Over5years$000

Non-interest bearing

$000Total $000

2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006

Financial Assets:

Cashandcashequivalents

5.80 5.50 13,089 36,839 - - - - - - - - 13,089 36,839

Receivables - - - - - - - - - - 32,700 31,459 32,700 31,459

Total Financial Assets 13,089 36,839 - - - - - - 32,700 31,459 45,789 68,298

Financial Liabilities:

Billsofexchange 6.2 5.78 - - 2,000 1,248 41,847 40,236 - - - - 43,847 41,484

Tradeandsundrypayables - - - - - - - - - - 23,015 28,095 23,015 28,095

Amountpayabletorelatedparties

- - - - - - - - - - - 2 - 2

Hirepurchaseliabilities 6.82 6.82 - - 304 400 43 399 - - - - 347 799

Total Financial Liabilities - - 2,304 1,648 41,890 40,635 - - 23,015 28,097 67,209 70,380

33c Net fair values

The aggregate carrying amount of recognised financial assets and financial liabilities approximates net fair value. The following methods and assumptions are used to determine the net fair values of financial assets and liabilities.

Cash,cashequivalentandshort-terminvestments:The carrying amount approximates fair value because of their short-term to maturity.

Tradereceivablesandpayable:The carrying amount approximates fair value.

Otherloans:The carrying amount approximates fair value.

Borrowings:The carrying amount approximates fair value.

The net fair values of fixed interest securities are determined by discounting the cash flows, at the market interest rates of similar securities, to their present value.

For other assets and other liabilities the net fair value approximates their carrying value.

No financial assets and financial liabilities are readily traded on organised markets in standardised form. Financial assets where the carrying amount exceeds net fair values have not been written down as the economic entity intends to hold these assets to maturity. The net fair value of financial assets and financial liabilities were not materially different to carrying amounts as at balance date.

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Note �4: Change in accounting policy

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

AASB No. Title Issue Date

Operative Date (Annual reporting periods

beginning on or after)

7 FinancialInstruments:Disclosure Aug2005 1Jan2007

8 OperatingSegments Feb2007 1Jan2009

101 PresentationofFinancialStatements(Amended) Oct2006 1Jan2007

123 BorrowingCosts(Amended) June2007 1Jan2009

2007-4 AmendmentstoAustralianAccountingStandardsarisingfromED151andOtherAmendments[AASB1,2,3,4,5,6,7,102,107,108,110,112,114,116,117,118,119,120,121,127,128,129,130,131,132,133,134,136,137,138,139,141,1023,&1038] April2007 1July2007

Note ��: Company details

The registered office of the company is:

LegendCorporationLimited

1 Butler Drive, Hendon, SA 5041

The principal places of business are:

LegendAustralasiaPtyLtd


CableAccessories(Aust)PtyLtd

26 Derby Street, Silverwater NSW 2128

IntegratedElectronicSolutionsPtyLtd


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Directors’declaration

The Directors of the company declare that:

1. The financial statements and notes, are in accordance with the Corporations Act 2001 and:

(a) complying with Accounting Standards and the Corporate Regulations 2001; and

(b) giving a true and fair view of the financial position as at 30 June 2007 and of the performance for the year ended on that date of the company and consolidated group.

2. The Chief Executive Officer and Chief Finance Officer have each declared that:

(a) the financial records of the company for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001;

(b) the financial statements and notes for the financial year comply with Australian Standards; and

(c) the financial statements and notes for the financial year give a true and fair view.

3. In the directors opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

The company and its wholly-owned subsidiaries, Legend (Australasia) Pty Ltd, Legend Pacific Pty Ltd, Cable Accessories (Holdings) Pty Ltd, Cable Accessories (Aust) Pty Ltd, IES Investments Pty Ltd, Integrated Electronic Solutions Pty Ltd, Legend Tech International Ltd, Legend Logistics Ltd, Legend Performance Technology (Thailand) company Ltd, Legend Tech (RSA) Pty Ltd, Legend Tech (Singapore) Pte Ltd and Legend Performance Asia Ltd, have entered into a deed of cross guarantee under which the company and its subsidiaries guarantee the debts of each other.

At the date of this declaration, there are reasonable grounds to believe that the companies which are party to this deed of cross guarantee will be able to meet any obligations or liabilities to which they are, or may become subject to, by virtue of the deed.

This declaration is made in accordance with a resolution of the Board of Directors.

Paul Teisseire

Chairman of Directors10 September 2007

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AdditionalinformationforlistedpubliccompaniesThe following additional information is required by the Australian Stock Exchange Ltd in respect of listed public companies only. The following information is current as at 18th September 2007

1 Shareholding

1a Distribution of Shareholders Number

Category (size of Holding) OrdinaryShares

1-1,000 81

1,001-5,000 349

5,001-10,000 281

10,001-100,000 595

100,001-andover 88

1,394

1b The number of shareholdings held in less than marketable parcels is 106. This is based on a price of $0.45 as at 18th September 2007

1c The names of the substantial shareholders listed in the holding company’s register are:

Shareholder NumberOrdinary

DoweHoldingsPtyLtd 51,222,662

HunterHallInvestmentManagementLtd 13,163,155

ThorneyHoldingsPtyLtd 12,573,151

1d Equity Securities and Voting Rights

The entity has 144,415,654 ordinary shares on issue. The voting rights attached to the entities ordinary shares 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.

�e �0 Largest shareholders — Ordinary shares

NameNumber of ordinary

fully paid shares held

% held of issued ordinary

capital

1 DoweHoldingsPtyLtd 51,017,081 35.33

2 CiticorpNomineesPtyLtd 13,809,221 9.56

3 InviaCustodianPtyLtd 7,907,844 5.48

4 InviaCustodianPtyLtd 5,880,000 4.07

5 ArgoInvestmentsLtd 3,975,751 2.75

6 Scott,BA&Nurton,EJ 3,300,000 2.29

7 Simpson,MR&JN 2,679,473 1.86

8 NationalNomineesLtd 2,381,937 1.65

9 Potter,Mark&Judith 1,881,332 1.30

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�e �0 Largest shareholders — Ordinary shares (cont)

NameNumber of ordinary

fully paid shares held

% held of issued ordinary

capital

10 Yates,James&SharonD 1,881,332 1.30

11 Stephens,D&Powell,CS 1,881,332 1.30

12 Nurton,EJ&Scott,BA 1,716,888 1.19

13 Knowles,Keith 1,654,725 1.15

14 ParksAustraliaPtyLtd 1,374,608 .95

15 Wells,CA&KJ 1,295,570 .90

16 Knowles,Keith 1,189,539 .82

17 SundaleEnterprisesPtyLtd 1,070,000 .74

18 ANZNomineesLtd 1,016,860 .70

19 Powell,CS&Stephens,D 969,171 .67

20 Yates,James&SharonD 969,171 .67

107,851,835 74.68

2 The name of the company secretary is:

Graham Seppelt.

3 The address of the principal registered office in Australia is:

1 Butler Drive, Hendon, SA 5041 Telephone (08) 8401 9888

4 Registers of securities are held at the following addresses:

Security Transfer Registers Pty Ltd Phone 08 9315 2333 770 Canning Highway, Applecross WA 6153

5 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.

6 Unquoted Securities

OptionsoverUnissuedShares

A total of 233,332 options are on issue. 233,332 options are on issue to two directors under the Legend Corporation Limited employee option plan.

7 There is no current on market buy back for any of the companies’ securities.

8 Restricted and Escrowed Securities

There are 6,610,148 shares that are subject to escrow, this comprises of 233,000 shares that have been issued under the Employee Share Plan (ESP) and 6,377,148 shares issued to the vendors of IES Investments Pty Ltd.

Additional information relating to the acquisition of IES Investments Pty Ltd has been detailed in Note 15b and additional ESP information has been detailed in Note 30 Employee Share Arrangements. The quantum and escrow expiry dates are detailed as follows:

6,377,148 shares escrow until 23rd November 2007233,000 shares escrow until 30th September 2008

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Directoryofoffices

Legend Corporation

Adelaide

Legend, IES, Cabac

1ButlerDrive

HendonSA5014

Phone:+61884019888

Fax:+61882776027

Melbourne

Legend

Unit2,4GardenRoad

ClaytonVic3168

Phone:+61385497170

Fax:+61395453970

Cabac

3/37-39RushdaleStreet

KnoxfieldVic3180

Phone:133122

Fax:1300303310

Sydney

Legend

26DerbyStreet

Silverwater,NSW2128

Phone:133122

Fax:1300303310

Brisbane

Legend

Unit2,27BirubiSt.

CoorparooQLD4151

Phone:+61733245170

Fax:+61733977590

Perth

Legend

2/50HoweStreet

OsborneParkWA6016

Phone:+61894648400

Fax:+61892424433

Cabac

Unit1B,11AnvilWay

WelshpoolWA6106

Phone:133122

Fax:1300303310

Auckland

Unit7,62PaulMatthewsRoad

Albany,Auckland

Phone:+6494153442

Fax:+6494153448

Singapore

19LoyangWay#02-06

ChangiLogisticsCentre

Singapore508724

Phone:+6565134292

Fax:+6565424998

HongKong

10NgFongStreet

Unit1507,NewTreasureCenter

SanPoKong

Kowloon,HongKong

Phone:+85223240562

Fax:+85223240852

Johannesburg

Unit1,68ReedbuckCrescent

CorporateParkSouth

Midrand,SouthAfrica

Phone:+27113140817

Fax:+27113140841

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Documents

For personal use only - Australian Securities Exchange2007/09/28 · Executive Officer, Company Secretary and other senior executives. The senior management is responsible for the