comops limited annual report 2009

2009C O M O P S L I M I T E D A N N U A L R E P O R T

ComOpsSolutions that work

COMPANY PARTICULARS ComOps LimitedABN 79 000 648 082The Company’s shares are quoted on the official list of the Australian Securities Exchange LimitedThe Company’s ASX code is “COM”

DirectorsGeoffrey Charles WILD AM – Non-executive ChairmanRichard Edward BRADLEY – Managing DirectorGraham Richard LIBBESSON – Non-executive DirectorStuart Matthew CLARK – Finance DirectorCameron Arthur BROWN – Sales & Marketing DirectorAndrew Jake ROBERTS – Client Services Director

SecretaryStuart Matthew CLARK

Registered Office and Head OfficeLevel 6, 77 Pacific HighwayNorth Sydney NSW 2060Telephone: 1300 850 505Facsimile: (02) 8235 8150

Web Addresswww.comops.com.au

Share RegistryComputershare Investor Services Pty LimitedLevel 3, 60 Carrington StreetSydney NSW 2000Telephone: 1300 850 505Facsimile: (02) 8235 8150

AuditorsRSM Bird Cameron PartnersChartered AccountantsLevel 12, 60 Castlereagh StreetSydney NSW 2000

BankersBendigo BankFountain Court Bendigo VIC 3550

St George Bank Level 12, 55 Market StreetSydney NSW 2000

SolicitorsTruman Hoyle Level 11, 68 Pitt StreetSydney NSW 2000

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CONTENTS

Company Particulars

Corporate Overview

Letter from the Chairman

Directors’ report

Auditor’s independence declaration

Independent audit report

Directors’ declaration

Statement of comprehensive income

Statement of financial position

Statement of changes in equity

Cash flow statement

Notes to the financial statements

Corporate Governance Statement

Securities Exchange Information

Top 20 Shareholders

Notice of Annual General Meeting

Proxy Form

Annual General MeetingThe 2010 annual general meeting of the members of ComOps Limited will be held at the Harbourview Hotel, 17 Blue Street, North Sydney on Thursday 20 May 2010 at 11am. A formal notice of meeting is enclosed together with a proxy form for those members unable to attend but who wish to vote on the resolutions to be considered at the meeting.

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Inside front cover

2 - 3

4

5 - 12

13

14 - 15

16

17

18

19

20

21 - 52

53 - 56

Inside back cover

Inside back cover

Enclosed

Enclosed

01|| |

} BI Business Intelligence

} Unibis Enterprise Resource Planning

} BMS Business Management Solution

} UniBorne Retail Management

} SAM Mobile Sales Force Automation

} eCom eCommerce

} Microster Workforce Management

} Salvus Safety, Risk & Claims Management

} HCS Human Capital Solutions

} Content Solutions Innovative Multimedia Learning & Communications

Enterprise Management

Sales Management

Workforce Management

02|| |

ComOpsThe value of experienceSince 1972, ComOps has been working closely with its clients to add value through innovative technologies. Today you are surrounded by thousands of people using ComOps solutions for smarter business. The people who made your printer, delivered your mail, squeezed your juice, issued your passport, flew your plane and banked your money…the calibre of organisations that have selected our business solutions speaks volumes.

Committed to successWe know that our client’s success is our success, so we are just as committed to their business as we are to ours. We are passionate about delivering real business solutions to help organisations achieve results and pride ourselves on the long and successful partnerships we have fostered with our customers over many years.

Solutions that workOur solutions are sophisticated yet flexible. Through our extensive industry knowledge and many years of experience we have developed a suite of solutions that can support the breadth of any business. At ComOps we get to know our client’s business and work with them across their entire organisation to help drive success.

We know that one size does not fit all. Covering Enterprise, Workforce and Sales Management we can implement and integrate the right mix of our solutions into any business. We can host and manage the applications or offer a Software as a Service (SaaS) model.

03|| |

LETTER FROM THE CHAIRMAN

Dear Shareholder,

In my letter to Shareholders in March last year, I commented on the fact that whilst we were performing well at that time and that we were “cautiously optimistic” about the year ahead, the then current economic crisis was “very worrying” and that “we would have to monitor our position carefully”.

Indeed, the first half of 2009 was very good for us. During a period when most similar organisations were experiencing a downturn, we produced a record first half result and in spite of my reservations expressed above, expectations were high that we would have a strong full year. However, and in spite of our best efforts, the second half of the year was a severe disappointment. The reality was that a number of our most significant clients and prospects, upon whom we were relying for major project work, decided to postpone their activities until 2010 rather than proceed with us in the July – December period.

I should emphasise that management feel that these orders have not been lost; they are delayed, and expectations are that several of them will be taken up during the course of this year.

In spite of the setbacks experienced, our full year revenue fell by one percent and it is our goal to recapture the significant momentum of recent years and, subject to improving economic conditions, we look forward to the year ahead. At the time of writing this letter to you, our prospective order book is at a very high level. Conversion is our aim and to this end, I know that all Shareholders can be satisfied by the focus and determination both Management and staff exemplify.

To Richard Bradley and his fellow Executive Directors, I express my thanks for their sterling efforts under most difficult circumstances. And to Graham Libbesson our other Independent Director, I add my gratitude for his advice and support.

Finally, to our family of Shareholders; we acknowledge your commitment and ongoing involvement with us.

Yours sincerely

Geoffrey C Wild AMChairman

7 April 2010

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05|| |

DIRECTORS’ REPORT

The Directors of ComOps Limited submit herewith the annual financial report for the year ended 31 December 2009. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows:

The names and particulars of the Directors of the Company during or since the end of the financial year are:

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Mr. Geoffrey C Wild AMNon-executive ChairmanGeoffrey is Chairman of WPP Holdings (Australia) including related entities. He is also deputy Chairman of Arab Bank Australia and a Director of Ibisworld Business Information, oOh! Media, and the PGA (Professional Golf Association). He has previously been Vice President and a Director of the Sydney 2000 Olympic Bid Company and the Chairman of the NSW Tourism Commission. He is a Fellow of the Australian Institute of Company Directors and a Fellow of the Advertising Institute of Australia. Mr. Wild was awarded the Order of Australia (member of general division) in June 2000. Mr. Wild is the Chairman of the Company’s remuneration and nomination committee. He is also a member of the Company’s audit committee.

Mr. Richard E BradleyManaging DirectorRichard founded the ComOps business in 1972 and has been involved in all aspects of the Company’s development. He has had extensive business dealings with the IT industry over a 40 year period which includes holding a number of positions on advisory boards. His prior and current Directorships include a number of private and unlisted public companies. He is a fellow of the Australian Institute of Company Directors.

Mr. Graham R LibbessonNon-executive DirectorGraham is a chartered accountant, and is a Director and Chairman of East Coast Minerals NL (ASX) and various private software companies. Graham has extensive involvement in the IT industry through various Directorships and consulting roles. He is a retired managing partner and a senior tax partner of a large firm of chartered accountants. His 33 years of experience as a chartered accountant and tax advisor, strong background in corporate law and governance and operational experience in the IT industry bring expertise in all areas of the Company’s activities and commercial transactions. Graham holds a Bachelor of Law and a Bachelor of Commerce from the University of New South Wales. He is a member of the Institute of Chartered Accountants in Australia (ACA). He is also Chairman of the Company’s audit committee and a member of the remuneration and nomination committee.

Mr. Stuart M ClarkFinance DirectorStuart is ComOps’ Chief Financial Officer, Company Secretary and a member of the Board of Directors. With 26 years commercial, finance and management experience as well as seasoned capabilities in human resources, project management and change management, he brings strong operational skills to the ComOps team. Stuart has held senior finance roles for both public and private companies including Nudie Foods, Global Television, Hoyts and the Walt Disney Company. He holds a Bachelor of Commerce degree and is a member of the Institute of Chartered Accountants.

Directorships of other listed companiesDirectorships of other locally and internationally listed companies held by Directors in the three years immediately before the end of the financial year are as follows:

Mr. Cameron A BrownSales & Marketing DirectorCameron is a seasoned business executive with over 20 years experience in the IT industry in Australia, New Zealand, Asia Pacific, Japan and the United States. He has extensive commercial experience in business aggregation, acquisition integrations, business analysis/strategy, sales, marketing, professional services operations and general management. Prior to joining ComOps he has held senior leadership roles with industry heavyweights such as Peoplesoft, Siebel Systems, DACG, Tracker Software and Saba Software. He is a Graduate of the Australian Institute of Company Directors.

06|| |

Mr. Andrew J RobertsClient Services DirectorAndrew founded Human Capital Solutions Group Pty Ltd and was the only shareholder until ComOps Limited purchased the Company in 2007. Andrew brings to the Board a wealth of commercial knowledge especially in the field of information technology.

DIRECTORS’ REPORT continued

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Name

Mr. Geoffrey C Wild AM

Mr. Graham R Libbesson

Company

WPP Holdings (Australia)

Arab Bank Australia

oOh! Media

eServGlobal Limited

East Coast Minerals NL

Period of Directorship

1996-current

1996-current

2007-current

2003-2009

2007-current

Company SecretaryMr. Stuart M Clark is the Chief Financial Officer and a Director of ComOps Limited. He was appointed Company Secretary on 26 September 2007. Mr. Clark has a bachelor of commerce degree from the University of New South Wales and is a member of the Institute of Chartered Accountants.

Former partners of the audit firmNone of the Officers of the Company were a partner in the Auditor of the Company at any time prior to or during the financial year.

Principal activities The consolidated entity’s principal activities during the course of the financial year were continuing to license the nine software products owned and developed by the consolidated entity and also continuing to provide professional and support services to new and existing customers.

07|| |

Review of operationsDuring the first six months of the year ended 31 December 2009, the Company experienced steady growth when compared with the same period of the previous year. This was achieved during the Worldwide Economic Crisis, a period in business history that many organisations will remember as a most difficult and trying time. The second half of the year however proved more difficult as potential clients deferred decisions to licence software, which we had expected to write contracts for during this period. It should be stressed that this business has not been lost but deferred until 2010. It was during this second half of 2009 that ComOps was named the 15th fastest growing Company in the IT sector in Australia on the SmartCompany Dun and Bradstreet IT Growth List.

The Directors remain confident that 2010 will resume the strong growth mode experienced in previous years, providing we have seen the last of the Worldwide Economic Crisis. The Company’s list of prospective new clients continues to increase to a level never seen before in ComOps’ history.

The Directors report, for the year ending 31 December 2009, Revenues fell 1% from $17.77 million to $17.50 million and Profit after Taxation decreased from $2.52 million to $0.97 million.


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Revenue

Profit before Income Tax

Income Tax Expense

Net Profit after Income Tax

Year ended 31 December 2009

$,000

17,500

1,399

429

970

Year ended 31 December 2008

$,000

17,766

3,470

955

2,515

Percentageincrease / (decrease)

%

(1)

(60)

(55)

(61)

ComOps has now entered its 38th year as an IT specialist, the last ten of which have been as a publicly listed company on the Australian Securities Exchange.

ComOps’ principal objective has always been to form value-added business partnerships with each and every customer, by providing a competitive advantage, through the delivery of products and services of the finest quality, utilising the most advanced technologies.

The Company’s strategic plan has been to grow through the acquisition of Companies that meet particular criteria, such as, owning products that complement the existing ComOps range or that have marketplace expertise in areas that ComOps does not currently participate in. This strategy has enabled the Company to grow, coupled with the expansion of sales in our traditional markets.

To help achieve our objectives, ComOps continually monitors the quality of not only its own activities but also its suppliers and associates. The Company remains endorsed under the 9001:2008 Quality Standard which requires two independent audits a year and also is a Government Endorsed Supplier.

ComOps’ major business partner is Microsoft, with whom it holds nine gold competencies. Progress Software is also a significant business partner.

20

18

16

14

12

10

08

06

04

02

002004 2005 2006 2007 2008 2009

REVENUE NPBT NPAT

08|| |

Changes in state of affairsDuring the financial year there was no significant change in the state of affairs of the consolidated entity other than that referred to in the financial statements or the notes thereto.

Subsequent events Subsequent to balance date, a transaction was formalised relating to a small off-shore entity which was introduced to the Company during the process of acquiring Human Capital Solutions Group Pty Ltd (“HCS”) in 2007. On 3 February 2010, ComOps Limited acquired 100% of the issued capital of HCS Learning Techniques Pvt Ltd, a company incorporated in India which provides software development services. Since 2007, the Indian entity has been providing services exclusively to companies owned by ComOps Limited and this shall continue subsequent to the purchase. The purchase consideration agreed was $21,018. This consideration takes the form of cash and represents the fair value of the net assets acquired. The payee is Mr. Andrew Jake Roberts, a Director of ComOps Limited and former owner of HCS. During the negotiation for the purchase of the HCS entity, it was acknowledged that the ownership of the shares in HCS Learning Techniques Pvt Ltd were vested in Mr. Roberts and not HCS and it was agreed that Mr. Roberts would transfer his right and entitlement to all shares in HCS Learning Techniques Pvt Ltd to ComOps Limited at a later date and in the meantime take no profit or benefit from the trading of the Indian entity except to the extent that there was a benefit to the ComOps Group of companies.

The Balance Sheet of the Indian Entity as at 31 December 2009 is as set out below:

Otherwise, there has not been any matter or circumstance that has arisen since the end of the financial year that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity in future financial years.

Future developmentsDisclosure of information regarding likely developments in the operations of the consolidated entity in future financial years and the expected results of those operations is likely to result in unreasonable prejudice to the consolidated entity. Accordingly, apart from the statements in the preceding review of operations, this information has not been disclosed in this report.

DividendsIn respect of the financial year ended 31 December 2009 the Directors do not recommend the payment of a dividend. No dividends were paid during the year in respect of the financial year ended 31 December 2008.


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Purchase consideration

Cash consideration

Equity issued as consideration

Total purchase

Fair value of assets acquired

Goodwill

Assets and liabilities held at acquisition date

Cash and cash equivalents

Property, plant and equipment

Net payables

Net assets acquired

Purchase consideration settled in cash

Cash and cash equivalents in subsidiary acquired

Cash outflow on acquisition

2009$

21,018

21,018

-

21,018

21,018

-

21,018

20,396

531,386

(530,764)

21,018

21,018

(20,396)

622

Consolidated

09|| |


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Share options Directors’ Option PlanThe current status with respect to the Directors’ option plan is as follows:

200,000 options were issued to Mr. Stuart M Clark on 16 July 2009. The options were issued under the Directors’ Option Plan and are exercisable at 13 cents each. These options will expire on 30 September 2012. The options were issued subsequent to a review of Mr. Clark’s total remuneration by the remuneration and nomination committee.

200,000 options were issued to Mr. Graham R Libbesson on 12 December 2007. The options were issued under the Directors’ Option Plan and are exercisable at 20 cents each. These options will expire on 31 December 2010. The options were issued pursuant to the negotiated agreement the Company entered into upon Mr. Libbesson’s appointment as a Director.

All options were valued, based on the Black Scholes model and were recognised as an expense in the year of issue.

Employees’ Option SchemeNo options were issued to employees during 2009 and there are nil on issue as at 31 December 2009.

Indemnification of Officers and AuditorsIn June 2009 the Company entered into a contract insuring the Directors and Officers of the Company against liabilities incurred by such a Director or Officer to the extent permitted by the Corporations Act 2001. The insurance cover is effective from June 2009 for a period of 12 months.

The aggregate amount of such insurance cover is $10,000,000.

Under the provisions of the constitution of the Company, to the extent permitted by law, each Officer of the Company is indemnified by the Company against liability incurred to another person (other than the Company or a related body corporate) except where the liability arises out of conduct involving a lack of good faith. Accordingly each Officer of the Company is indemnified against any liability for costs and expenses incurred by the Officer in defending proceedings, whether civil or criminal, in which judgement is given in favour of the Officer or in which the Officer is acquitted, or in connection with an application, in relation to such proceedings in which the court grants relief to the Officer under the Corporations Act 2001.

The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an Officer or Auditor of the Company or of any related body corporate against a liability incurred as such an Officer or Auditor.

Directors’ meetingsThe following table sets out the number of Directors’ meetings (including meetings of sub-committees of Directors) held during the financial year and the number of meetings attended by each Director (while they were a Director or committee member). During the financial year, eleven board meetings, three audit sub-committee meetings and three remuneration and nomination sub-committee meetings were held.

* Mr. R E Bradley and Mr. S M Clark attended the audit sub-committee and remuneration and nomination sub-committee meetings during the year by invitation.

Director

Geoffrey C Wild AM

Richard E Bradley*

Graham R Libbesson

Stuart M Clark*

Cameron A Brown

Andrew J Roberts

Board Meetings

Held Attended

11 11

11 11

11 11

11 11

11 11

11 11

Remuneration and nomination sub-committee meetings

Held Attended

3 3

3 3

- -

- -

- -

- -

Audit sub-committee meetings

Held Attended

3 3

3 3

3 3

3 3

- -

- -

10|| |


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Directors’ shareholdingsThe following table sets out each Director’s relevant interest in shares and options over unissued shares of the Company as at the date of this report:

Director

Geoffrey C Wild AM

Richard E Bradley

Graham R Libbesson

Stuart M Clark

Cameron A Brown

Andrew J Roberts

Fully paid ordinary shares

305,000

36,328,500

250,000

-

243,000

15,031,921

Directors’ Option Plan options

-

-

200,000

200,000

-

-

Remuneration report

Remuneration policy for Directors and ExecutivesThe Board of Directors has established a remuneration and nomination committee to review the remuneration packages of all Directors and Executive Officers on an annual basis and to make recommendations to the Board of Directors. Remuneration of the Executive Directors is determined by the Non-executive Directors. Remuneration packages are reviewed with due regard to performance and other relevant factors.

The Directors’ details of ComOps Limited during the year were: Geoffrey C Wild Chairman, Non-executive DirectorRichard E Bradley Managing DirectorGraham R Libbesson Non-executive DirectorStuart M Clark Finance Director Cameron A Brown Sales & Marketing DirectorAndrew J Roberts Client Services Director

The Executives’ details of ComOps Limited during the year were:

Michael J Bowman R & D Manager resigned 30/06/2009Cameron A Brown Sales & Marketing DirectorStuart M Clark Chief Financial Officer Mary F Clarke Managing Director-ComOps SolutionsMark P Heard Branch Manager-Auckland resigned 07/12/2009Peter S Morris Client Services Director Michael Panosh Branch Manager-Melbourne resigned 09/10/2009Andrew J Roberts Client Services DirectorPhillip J Walker Sales Director resigned 30/06/2009Moshe D Woods Sales Director

Elements of Director and Executive remunerationRemuneration packages contain the following key elements:

a) Primary benefits-salary/fees, bonuses and non-monetary benefits including the provision of motor vehicle benefits;b) Post – employment benefits – including superannuation contributions;c) Equity – share options granted under the Employees’ Option Scheme and Directors’ Option Plan; and d) Other benefits

The following table discloses the remuneration of the Directors of the Company and the Executives who represent the key management of the consolidated entity.

11|| |


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2009Remuneration (i)

Geoffrey C Wild AM

Richard E Bradley

Graham R Libbesson

Mary F Clarke

Andrew J Roberts

Cameron A Brown

Stuart M Clark

Mark P Heard

Michael W Panosh

Michael J Bowman (ii)

Phillip J Walker (ii)

Moshe D Woods

Peter S Morris

Total

Salary & Fees$

60,000

348,116

40,000

185,406

218,271

219,120

212,393

128,665

107,988

35,275

36,218

110,092

102,775

1,804,319

Non-monetary$

-

8,518

-

8,518

8,518

-

8,518

3,569

3,166

-

-

8,518

8,518

57,843

Other$

-

-

-

5,000

31,200

1,375

-

-

-

-

-

-

7,975

45,550

Superannuation$

-

60,218

-

59,595

19,644

13,745

19,115

-

8,989

52,225

41,410

9,908

9,250

294,099

Equity options$

-

-

-

-

-

-

1,217

-

-

-

-

-

-

1,217

Total$

60,000

416,852

40,000

258,519

277,633

234,240

241,243

132,234

120,143

87,500

77,628

128,518

128,518

2,203,028

Short term benefits Post-employment benefits

Share based payments

2008Remuneration (i)

Geoffrey C Wild AM

Richard E Bradley

Graham R Libbesson

Mary F Clarke

Andrew J Roberts

Cameron A Brown

Stuart M Clark

Mark P Heard

Michael W Panosh

Michael J Bowman

Phillip J Walker

Kim D Redstall (iii)

Moshe D Woods

Peter S Morris

Total

(i) For the purpose of the above disclosure, “Executive” is defined as an individual who is responsible for planning, directing and controlling the activities of the entity directly or indirectly.(ii) Michael J Bowman and Phillip J Walker both resigned as employees of the Company on 30 June 2009.(iii) Included in the category of “other” for Mr. Redstall in 2008 is a $67,790 termination payment.

Salary & Fees$

60,000

338,860

40,000

176,236

192,172

188,622

202,250

28,978

26,244

41,154

43,419

124,001

36,697

34,258

1,532,891

Non-monetary$

-

7,710

-

7,710

7,710

-

7,710

904

895

-

-

-

1,947

1,947

36,533

Other$

-

-

-

5,000

15,600

27,125

-

-

-

-

-

89,290

-

2,659

139,674

Superannuation$

-

61,140

-

68,764

18,465

17,094

18,203

-

2,362

60,929

57,318

9,077

3,303

3,083

319,738

Equity options$

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Total$

60,000

407,710

40,000

257,710

233,947

232,841

228,163

29,882

29,501

102,083

100,737

222,368

41,947

41,947

2,028,836

Short term benefits Post-employment benefits

Share based payments

12|| |


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Elements of remuneration related to performanceThe entire component of the 2009 salaries for the Executive group was at an agreed annual rate. However, during the year monthly performance reviews were undertaken by the senior managers of each reporting segment with each of their key management personnel. The five major performance elements reviewed each month and submitted to the Board of Directors for their review were:

(a) revenue;(b) staff utilisations (and costs);(c) profit and cash-flow;(d) quality; and(e) customer satisfaction

The salaries for the key management personnel are determined annually and are linked to their performance and their contribution to the abovementioned five major elements as well as the overall results for the Group.

Service contracts for key management personnelAs per the Company constitution, one-third of the Directors (excluding the Managing Director) stand for re-election at each annual general meeting.

The Executives have in place standard contracts with the Company which allow either party to give between seven days and three months notice to terminate the contract of employment.

Value of options issued to Directors and Executives

DirectorsThere were 200,000 options issued to Directors during the financial year. The options were issued to Mr. Stuart Clark on 16 June 2009 following approval by shareholders at the annual general meeting held on 26 May 2009. The options have been recognised as an expense in 2009 and were valued based on the Black Scholes model. The expense recognised in 2009 relating to the options issued is $1,217. The options are exercisable at the average closing price for the last five days prior to the date of the relevant remuneration and nomination committee meeting. The relevant meeting was held on 30 September 2008 and therefore the proposed exercise price is 13 cents. It is proposed that the options will vest three years from 30 September 2008 and be exercisable from the vesting date. The options issued to Mr. Clark expire on 30 September 2012.

ExecutivesThere have been nil options issued to employees during the financial year.

Non-audit servicesThe Directors are satisfied that the provision of non-audit services, during the year, by the Auditor is compatible with the general standard of independence for Auditors imposed by the Corporations Act 2001.

Details of the amount paid or payable to the Auditor for non-audit services provided during the year by the Auditor are outlined in note 6 to the financial statements.

Auditor’s independence declarationThe Auditor’s independence declaration is included on page 13.

Signed in accordance with a resolution of the Directors made pursuant to section 298(2) of the Corporations Act 2001.

On behalf of the Directors

Geoffrey C Wild AM Director Sydney 7 April 2010

Richard E BradleyDirectorSydney7 April 2010

Level 12, 60 Castlereagh Street Sydney NSW 2000GPO Box 5138 Sydney NSW 2001T +6 2 9233 8933 F +61 2 9233 8521www.rsmi.com.au

Liability limited by ascheme approved underProfessional StandardsLegislation

Major Offices in:Perth, Sydney, Melbourne, Adelaide and CanberraABN 36 965 185 036

RSM Bird Cameron Partners is an independent member firm of RSM International, an affiliation of independent accounting and consulting firms.

AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the financial report of ComOps Limited for the year ended 31 December 2009, I declare that, to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

(ii) any applicable code of professional conduct in relation to the audit.

RSM BIRD CAMERON PARTNERSChartered Accountants

C J HumePartner

Sydney, NSW7 April 2010

13|| |





INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF

COMOPS LIMITED

Report on the Financial Report

We have audited the accompanying financial report of ComOps Limited (“the company”), which comprises the statement of financial position as at 31 December 2009, and the statement of comprehensive income, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors' declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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14

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

Auditor’s Opinion

In our opinion:

(a) The financial report of ComOps Limited is in accordance with the Corporations Act 2001, including:

(i) Giving a true and fair view of the company's and consolidated entity’s financial position as at 31 December 2009 and of their performance for the year ended on that date; and

(ii) Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and

(b) The financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 10 to 12 of the directors’ report for the financial year ended 31 December 2009. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s Opinion

In our opinion the Remuneration Report of ComOps Limited for the financial year ended 31 December 2009complies with section 300A of the Corporations Act 2001.

RSM BIRD CAMERON PARTNERSChartered Accountants

Sydney, NSW C J Hume7 April 2010 Partner





INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF

COMOPS LIMITED

Report on the Financial Report

We have audited the accompanying financial report of ComOps Limited (“the company”), which comprises the statement of financial position as at 31 December 2009, and the statement of comprehensive income, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors' declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

15|| |

16|| |

The Directors of the Company declare that:

1. The financial statements and notes, as set out on pages 17 to 52, are in accordance with the Corporations Act 2001 and: a. comply with Accounting Standards and the Corporations Regulations 2001; and b. give a true and fair view of the financial position as at 31 December 2009 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 the Accounting 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.

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

Geoffrey C Wild AM Director

Richard E Bradley Director

Sydney 7 April 2010

DIRECTORS’ DECLARATION

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17|| |

STATEMENT OF COMPREHENSIVE INCOME for the financial year ended 31 December 2009

|| |

Revenue

Employee benefits expense

Consultants’ fees

Directors’ fees

Depreciation expense

Bad debts expense

Finance costs

Communication expenses

Corporate activity costs

Occupancy expenses

Travel expenses

Other expenses

Profit before income tax

Income tax (expense)/benefit

Profit from continuing operations

Profit for the year

Other comprehensive income

Total comprehensive income

Earnings per share

- Basic (cents per share)

- Diluted (cents per share)

2009$

17,500,131

(9,982,404)

(1,410,904)

(95,065)

(311,559)

(87,021)

(524,864)

(405,332)

(156,707)

(1,601,141)

(529,723)

(996,624)

1,398,787

(429,130)

969,657

969,657

-

969,657

0.8

0.8

Note

2(a)

2(b)

3

28

28

2008$

17,766,395

(8,943,435)

(1,616,494)

(110,409)

(80,022)

(233,616)

(644,636)

(278,878)

(141,722)

(920,778)

(452,493)

(873,831)

3,470,081

(955,351)

2,514,730

2,514,730

-

2,514,730

2.2

2.2

2009$

1,207,689

(2,586,245)

(259,443)

(95,065)

(195,790)

666,872

(475,991)

(45,887)

(136,100)

(308,555)

(128,502)

(455,246)

(2,812,263)

843,679

(1,968,584)

(1,968,584)

-

(1,968,584)

2008$

1,172,369

(1,294,256)

(414,220)

(110,409)

-

1,639,033

(641,653)

-

(166,230)

(79,317)

(66,615)

(403,028)

(364,326)

109,298

(255,028)

(255,028)

-

(255,028)

Notes to the financial statements are included on pages 21 to 52

Consolidated Company

18|| |

STATEMENT OF FINANCIAL POSITION as at 31 December 2009

|| |

CURRENT ASSETS


Trade receivables

Other receivables

Work in progress

Other

TOTAL CURRENT ASSETS

NON-CURRENT ASSETS

Other receivables

Other financial assets


Goodwill

Software asset

Deferred tax asset

Other

TOTAL NON-CURRENT ASSETS

TOTAL ASSETS

CURRENT LIABILITIES

Trade and other payables

Other payables to taxation authorities

Income received in advance

Borrowings

Provisions

Provision for income tax

Unearned maintenance income

TOTAL CURRENT LIABILITIES

NON-CURRENT LIABILITIES

Borrowings

Provisions

Other

TOTAL NON-CURRENT LIABILITIES

TOTAL LIABILITIES

NET ASSETS

EQUITY

Issued capital

Accumulated losses

TOTAL EQUITY

Note

30(a)

7

8

9

10

11

12

13

14

14

3

30(b)

15(a)

15(b)

16

17

18

3

19

20

21

22

24

25

2009$

703,754

6,611,185

2,098,944

1,874,518

277,285

11,565,686

1,727,974

-

376,418

17,691,198

1,001,352

763,276

264,670

21,824,888

33,390,574

2,393,292

1,415,267

73,877

646,839

1,385,718

2,254,214

2,549,739

10,718,946

297,800

258,965

421,257

978,022

11,696,968

21,693,606

23,305,095

(1,611,489)

21,693,606

2008$

674,664

6,502,038

2,407,550

2,264,197

244,176

12,092,625

1,571,794

-

300,766

17,691,198

1,178,061

657,446

308,625

21,707,890

33,800,515

2,750,091

848,472

331,093

1,922,294

1,207,086

2,055,624

2,205,904

11,320,564

1,273,852

273,003

209,147

1,756,002

13,076,566

20,723,949

23,305,095

(2,581,146)

20,723,949

2009$

459

774,400

-

-

54,390

829,249

3,412,532

13,825,540

101,217

3,623,122

1,001,352

-

-

21,963,763

22,793,012

3,908,117

-

73,877

-

471,675

2,254,214

-

6,707,883

275,650

107,116

421,257

804,023

7,511,906

15,281,106

23,305,093

(8,023,987)

15,281,106

2008$

19

-

-

-

-

19

2,963,110

13,825,540

3,256

3,623,122

1,178,061

-

-

21,593,089

21,593,108

600,000

-

331,093

-

-

2,160,624

-

3,091,717

1,251,701

-

-

1,251,701

4,343,418

17,249,690

23,305,093

(6,055,403)

17,249,690



19|| |

STATEMENT OF CHANGES IN EQUITY for the financial year ended 31 December 2009

|| |

Consolidated

Balance as at 1 January 2008

Shares issued during the year

Profit attributable to members of parent entity

Balance as at 31 December 2008





Issued capital - Ordinary

$

21,320,679

1,984,416

-

23,305,095

23,305,095

-

-

23,305,095

Retained earnings

$

(5,095,876)

-

2,514,730

(2,581,146)

(2,581,146)

-

969,657

(1,611,489)

Total

$

16,224,803

1,984,416

2,514,730

20,723,949

20,723,949

-

969,657

21,693,606

Company









Issued capital - Ordinary

$

21,320,677

1,984,416

-

23,305,093

23,305,093

-

-

23,305,093

Retained earnings

$

(5,800,375)

-

(255,028)

(6,055,403)

(6,055,403)

-

(1,968,584)

(8,023,987)

Total

$

15,520,302

1,984,416

(255,028)

17,249,690

17,249,690

-

(1,968,584)

15,281,106


20|| |

CASH FLOW STATEMENT for the financial year ended 31 December 2009

|| |

Cash flows from operating activities

Receipts from customers

Payments to suppliers and employees

Interest received

Interest and other costs of finance paid

Net cash (used in)/provided by operating activities

Cash flows from investing activities

Payment for acquisition of business

Cash held by business acquired

Payments for plant and equipment

Payments for other non-current assets

(Advance to)/payment from controlled entity

Net cash (used in)/provided by investing activities

Cash flows from financing activities

Proceeds from issue of shares

Proceeds from borrowings

Repayment of borrowings

Net cash provided by/(used in) financing activities

Net (decrease)/increase in cash held

Cash at the beginning of the financial year

Cash at the end of the financial year

Note

30(d)

30(a)

2009$

20,520,287

(17,064,616)

16,302

(389,056)

3,082,917

(350,000)

-

(195,104)

-

-

(545,104)

-

-

(2,508,723)

(2,508,723)

29,090

674,664

703,754

2008$

18,043,779

(15,594,429)

84,844

(275,681)

2,258,513

(3,398,005)

(44,304)

(195,713)

(268,117)

-

(3,906,139)

-

643,664

(1,357,176)

(713,512)

(2,361,138)

3,035,802

674,664

2009$

2,512,243

(3,875,965)

14,855

(90,213)

(1,439,080)

(350,000)

-

(8,664)

-

3,031,451

2,672,787

-

-

(1,233,267)

(1,233,267)

440

19

459

2008$

1,089,118

(3,267,802)

83,251

(274,871)

(2,370,304)

(3,398,005)

(44,304)

-

(268,117)

5,080,165

1,369,739

-

-

(1,357,176)

(1,357,176)

(2,357,741)

2,357,760

19



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1. SUMMARY OF ACCOUNTING POLICIESAdoption of new and revised Australian Accounting Standards In the current year, the Company has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for annual reporting periods beginning on 1 January 2009.

The adoption of these standards has impacted the recognition, measurement and disclosure of certain transactions. The following is an explanation of the impact the adoption of these standards and interpretations has had on the financial statements of the Company.

AASB 8: Operating SegmentsIn February 2007 the Australian Accounting Standards Board issued AASB 8 which replaced AASB 114: Segment Reporting. As a result, some the required operating segment disclosures have changed with the addition of a possible impact on the impairment testing of goodwill allocated to the cash generating units (CGUs) of the entity. Below is an overview of the key changes and the impact on the Company’s financial statements.

Measurement impact:Identification and measurement of segments – AASB 8 requires the ‘management approach’ to the identification measurement and disclosure of operating segments. The ‘management approach’ requires that operating segments be identified on the basis of internal reports that are regularly reviewed by the entity’s chief operating decision maker, for the purpose of allocating resources and assessing performance. This could also include the identification of operating segments which sell primarily or exclusively to other internal operating segments. Under AASB 114, segments were identified by business and geographical areas, and only segments deriving revenue from external sources were considered.

The adoption of the ‘management approach’ to segment reporting has resulted in the identification of reportable segments largely consistent with the prior year.

Under AASB 8, operating segments are determined based on management reports using the ‘management approach’, whereas under AASB 114 financial results of such segments were recognised and measured in accordance with Australian Accounting Standards. This has resulted in changes to the presentation of segment results with expenses such as depreciation and impairment now being reported for each segment rather than in aggregate for total Group operations, as this is how they are reviewed by the chief operating decision maker.

Impairment testing of the segment’s goodwill:AASB 136: Impairment of Assets, paragraph 80 requires that goodwill acquired in a business combination shall be allocated to each of the acquirer’s CGUs, or Group of CGUs that are expected to benefit from the synergies of the combination. Each cash generating unit (CGU) which the goodwill is allocated to must represent the lowest level within the entity at which goodwill is monitored, however it cannot be larger than an operating segment. Therefore, due to the changes in the identification of segments, there is a risk that goodwill previously allocated to a CGU which was part of a larger segment could now be allocated across multiple segments if a segment had to be split as a result of changes to AASB 8.

Management have considered the requirements of AASB 136 and determined the implementation of AASB 8 has not impacted the CGUs of each operating segment.

Disclosure impact:AASB 8 requires a number of additional quantitative and qualitative disclosures, not previously required under AASB 114, where such information is utilised by the chief operating decision maker. This information is now disclosed as part of the financial statements.

AASB 101: Presentation of Financial StatementsIn September 2007 the Australian Accounting Standards Board revised AASB 101 and as a result, there have been changes to the presentation and disclosure of certain information within the financial statements. Below is an overview of the key changes and the impact on the Company’s financial statements.

Disclosure impact:Terminology changes: The revised version AASB 101 contains a number of terminology changes, including the amendment of the names of the primary financial statements.

Reporting changes in equity: The revised AASB 101 requires all changes in equity arising from transactions with owners, in their capacity as owners, to be presented separately from non-owner changes in equity. Owner changes in equity are to be presented in the statement of changes in equity, with non-owner changes in equity presented in the statement of comprehensive income. The previous version of AASB 101 required that owner changes in equity and other comprehensive income be presented in the statement of changes in equity.

NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 31 December 2009

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22|| |


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1. SUMMARY OF ACCOUNTING POLICIES continued

Statement of comprehensive income: The revised AASB 101 requires all income and expenses to be presented in either one statement, the statement of comprehensive income, or two statements, a separate income statement and a statement of comprehensive income. The previous version of AASB 101 required only the presentation of a single income statement.

The Company’s financial statements now contain a statement of comprehensive income.

Other comprehensive income: The revised version of AASB 101 introduces the concept of ‘other comprehensive income’ which comprises of income and expenses that are not recognised in profit or loss as required by other Australian Accounting Standards. Items of other comprehensive income are to be disclosed in the statement of comprehensive income. Entities are required to disclose the income tax relating to each component of other comprehensive income. The previous version of AASB 101 did not contain an equivalent concept.

New standards and interpretations issued but not yet effectiveAt the date of this financial report the following standards and interpretations, which may impact the entity in the period of initial application, have been issued but are not yet effective:

Reference

AASB 3

AASB 127

AASB 2008-3

AASB 2008-6

AASB 2008-8

AASB 2009-4

AASB 2009-5

AASB 2009-7

Title

Business Combinations

Consolidated and Separate Financial Statements

Amendments to Australian Accounting Standards arising from AASB 3 and AASB 127

Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project[AASB 1 and AASB 5]

Amendments to Australian Accounting Standards - Eligible Hedged Items [AASB 139]

Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 2, 138, Interpretations 9, 16]

Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project[AASB 5, 8, 101, 107, 117, 118, 136, 139]

Amendments to Australian Accounting Standards [AASB 5, 7, 107, 112, 136, 139 and Interpretation 17]

Application date (financial years

beginning)

1 July 2009

1 July 2009

1 July 2009

1 July 2009

1 July 2009

1 July 2009

1 January 2010

1 July 2009

Expected Impact

May impact accounting for future transactions but nil impact on acquisitions as at 31 December 2009

Nil impact

May impact accounting for future transactions but nil impact on acquisitions as at 31 December 2009

Nil impact

Nil impact

Disclosures only

Nil impact

Nil impact

Summary

Revised Standard

Revised Standard

Amends a number of standards and Interpretations as a result of the issue of AASB 3 and AASB 127.

Amends a number of standards as a result of the Annual Improvements Project.

Amends AASB 139 to clarify how the principles that determine whether a hedged risk or portion of cash flows is eligible for designation as a hedged item, should be applied in particular situations.

Amends a number of standards and Interpretations as a result of the Annual Improvements Project.

Amends a number of standards as a result of the Annual Improvements Project.

Amends a number of standards for editorial corrections by the AASB and by the International Accounting Standards Board (IASB). These editorial amendments have no major impact on the requirements of the amended pronouncements.

23|| |



|| |

Reference

AASB 2009-8

AASB 9

AASB 124

2009-9

2009-10

2009-11

2009-12

2009-13

2009-14

Interpretation 17

2008-13

Interpretation 19

Title

Amendments to Australian Accounting Standards – Group Cash-settled Share-based Payment Transactions [AASB 2]

Financial Instruments

Related Party Disclosures

Amendments to Australian Accounting Standards – Additional Exemptions for first-time adopters

Amendments to Australian Accounting Standards – Classification of Rights Issues

Amendments to Australian Accounting Standards arising from AASB 9

Amendments to Australian Accounting Standards

Amendments to Australian Accounting Standards arising from Interpretation 19

Amendments to Australian Interpretation – Prepayments of a Minimum Funding Requirement

Distributions of Non-cash Assets to Owners

Amendments to Australian Accounting Standards arising from AASB Interpretation 17 – Distributions of Non-cash Assets to Owners[AASB 5 and AASB 110]

Extinguishing Financial Liabilities with Equity Instruments

Application date (financial years

beginning)

1 January 2010

1 January 2013

1 January 2011

1 January 2010

1 February 2010

1 January 2013

1 January 2011

1 July 2010

1 January 2011

1 July 2009

1 July 2009

1 July 2010

Expected Impact

May impact accounting for future transactions but nil impact as at 31 December 2009

Nil impact

Disclosures only

Nil impact

Nil impact

Nil impact

Disclosures only

Nil impact

Nil impact

Nil impact

Nil impact

Nil impact

Summary

Amends AASB 2 Share-based Payment and supersedes Interpretation 8 Scope of AASB 2 and Interpretation 11 AASB 2 – Group and Treasury Share Transactions. The amendments clarify the accounting for group Cash-settled Share-based payment transactions in the separate or individual financial statements of the entity receiving the goods or services when the entity has no obligation to settle the Share-based payment transaction.

Replaces the requirements of AASB 139 for the classification and measurement of financial assets. This is the result of the first part of Phase 1 of the IASB’s project to replace IAS 39.

Revised standard. The definition of a related party is simplified to clarify its intended meaning and eliminate inconsistencies from the application of the definition.

Amends AASB 1 regarding retrospective application of certain standards for first-time adopters of IFRS.

Amends AASB 132 to clarify the requirements for classification of rights, options and warrants.

Amends AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 and 1038 and Interpretations 10 and 12 as a result of the issuance of AASB 9.

Amends AASB 8 Operating Segments is amended as a result of the revised AASB 124. Amends AASB 5, 108, 110, 112, 119, 133, 137, 139, 1023 and 1031 and Interpretations 2, 4, 16, 1039 and 1052 as a result of the Annual Improvements Project.

Amends AASB 1 due to the issuance of Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments.

Amends Interpretation 14 AASB 119 – The limit of a Defined Benefit Asset, Minimum Funding Requirements and their Interaction.

This Interpretation provides guidance on how an entity should measure distributions of assets other than cash when it pays dividends to its owners, except for common control transactions.

Amends AASB 5 and AASB 110 as a result of the issue of Interpretation 17.

This Interpretation addresses the accounting by an entity when the terms of a financial liability are renegotiated and result in the entity issuing equity instruments to a creditor of the entity to extinguish all or part of the financial liability. It does not address the accounting by the creditor.

24|| |


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Statement of complianceThe financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act 2001, Australian Accounting Standards, including Australian Accounting Interpretations, and complies with other requirements of the law. Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards (‘A-IFRS’). Compliance with the A-IFRS ensures that the consolidated financial statements and notes of the consolidated entity comply with International Financial Reporting Standards (‘IFRS’). The parent entity financial statements and notes also comply with IFRS.

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

The following significant accounting policies, which are consistent with the prior year, have been adopted in the preparation and presentation of the financial report:

(a) Going concern The Directors have prepared the financial statements on a going concern basis, which contemplates continuity of normal business

activities and the realisation of assets and extinguishment of liabilities in the ordinary course of business.

(b) Revenue recognition Sale of licences Revenue from the sale of software is recognised when the consolidated entity has transferred to the customer the significant risks

and rewards of ownership of the goods.

Rendering of services Revenue from a contract to provide installation or maintenance services that is separate from the sale of software is recognised by

reference to the stage of completion of the contract.

Royalties Royalty revenue from royalties is recognised on an accruals basis in accordance with the substance of the relevant agreement.

Dividend and Interest revenue Dividend and Interest revenue is recognised on a receivable basis.

(c) Accounts payable Trade payables and other accounts payable are recognised when the consolidated entity becomes obliged to make future

payments resulting from the purchase of goods and services.

(d) Comparative amounts Comparative figures are, where appropriate, re-classified so as to be comparable with the figures presented for the current financial

year.

(e) Cash and cash equivalents Cash and cash equivalents comprise cash on hand, cash in banks and investments in money market instruments, net of

outstanding bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.

(f) Provisions Provisions are recognised when the consolidated entity has a present obligation, the future sacrifice of economic benefits is

probable and the amount of the provision can be measured reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that recovery will be received and the amount of the

receivable can be measured reliably.


(g) Share-based payments Equity-settled Share-based payments granted are measured at fair value at the date of grant. Fair value is measured by use of

the Black Scholes model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the consolidated entity’s estimate of shares that will eventually vest.

(h) Property, plant and equipment Plant and equipment, leasehold improvements and equipment under finance lease are stated at cost less accumulated depreciation

and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the date of acquisition.

Depreciation is provided on property, plant and equipment, including freehold buildings but excluding land. Depreciation is calculated on a straight line basis so as to write off the net cost or other revalued amount of each asset over its expected useful life to its estimated residual value. Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter, using the straight line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period.

The following estimated useful lives are used in the calculation of depreciation: Leasehold improvements 5-6 years Plant and equipment 2-10 years Furniture and fittings 5-10 years Motor vehicles 4-7 years

(i) Employeebenefits Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave and

sick leave when it is probable that settlement will be required and they are capable of being measured reliably.

Provisions made in respect of employee benefits, expected to be settled within the next 12 months, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Provisions made in respect of employee benefits which are not expected to be settled within 12 months are measured as the present value of the estimated future cash outflows to be made by the consolidated entity in respect of services provided by employees up to the reporting date.

Contributions to defined contribution superannuation plans are expensed when incurred.

(j) Financial instruments issued by the consolidated entity Debt and equity instruments Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual

agreement.

Interest and dividends Interest and dividends are classified as expenses or as distributions of profit consistent with the balance sheet classification of the

related debt or equity instrument or component parts of compound instruments.

(k) Foreign currency All foreign currency transactions during the financial year have been brought to account using the exchange rate in effect at the

date of the transaction. Foreign currency monetary items at reporting date are translated at the exchange rate existing at that date.

Exchange differences are brought to account in the profit or loss in the period in which they arise.

25|| |


|| |

26|| |


|| |


(l) Goods and services tax Revenues, expenses and assets are recognised net of the amount of goods and services tax (“GST”), except:

i. Where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or ii. For receivables and payables which are recognised inclusive of GST.

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

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

(m) Goodwill Goodwill, representing the excess of the cost of acquisition over the fair value of the identifiable assets, liabilities and contingent

liabilities acquired, is recognised as an asset and not amortised, but tested for impairment annually and whenever there is an indication that the goodwill may be impaired. Any impairment is recognised immediately in profit or loss and is not subsequently reversed.

(n) Financial assets Investments are recognised and derecognised on trade date where purchase or sale of an investment is under a contract whose

terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs. Subsequent to initial recognition, investments in subsidiaries are measured at cost in the separate financial statements of the parent.

Loans and receivables Trade receivables, loans and other receivables are recorded at amortised cost less impairment.

(o) Income tax Current tax Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax

loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).

Deferred tax Deferred tax is accounted for using the comprehensive balance sheet liability method in respect of temporary differences arising

from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base of those items.

In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused tax losses and tax offsets can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from goodwill.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the consolidated entity is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with these investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the consolidated entity expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company/consolidated entity intends to settle its current tax assets and liabilities on a net basis.

27|| |


|| |


Current and deferred tax for the period Current and deferred tax is recognised as an expense or income in the income statement, except when it relates to items credited

or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill or excess.

Tax consolidation The Company and all its wholly-owned Australian resident entities are part of a tax-consolidated group under Australian taxation

law. ComOps Limited is the head entity in the tax-consolidated group. Tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences of the members of the tax-consolidated group are recognised in the separate financial statements of the members of the tax-consolidated group using the ‘separate taxpayer within group’ approach.

Current tax liabilities and assets and deferred tax assets arising from unused tax losses and tax credits of the members of the tax-consolidated group are recognised by the Company (as head entity in the tax-consolidated group).

(p) 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 the profit and loss in the period in which they are incurred.

(q) Leased assets Operating lease payments are recognised as an expense on a basis which reflects the pattern in which economic benefits from the

leased assets are consumed.

Lease incentives In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The

aggregate benefits of incentives are recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

(r) Principles of consolidation The consolidated financial statements have been prepared by combining the financial statements of all the entities that comprise

the consolidated entity, being the Company (the parent entity) and its controlled entities as defined in Australian Accounting Standard AASB 127: Consolidated and Separate Financial Statements. A list of subsidiaries appears in note 27 to the financial statements. Consistent accounting policies have been employed in the preparation and presentation of the consolidated financial statements.

The consolidated financial statements include the information and results of each subsidiary from the date on which the Company obtains control and until such time as the Company ceases to control such entity.

In preparing the consolidated financial statements, all inter-company balances and transactions, and unrealised profits arising within the consolidated entity are eliminated in full.

(s) Research and development costs Expenditure on research activities are recognised as an expense in the period in which it is incurred. Where no internally-

generated intangible asset can be recognised, development expenditure is recognised as an expense in the period as incurred.

An intangible asset arising from the development (or from the development phase of an internal project) is recognised if, and only if, all of the following are demonstrated:

• the technical feasibility of completing the intangible asset so that it will be available for use or sale;• the intention to complete the intangible asset and use or sell it;• the ability to use or sell the intangible asset;• how the intangible asset will generate probable future economic benefits;• the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible

asset; and• the ability to measure reliably the expenditure attributable to the intangible asset during its development.

28|| |


|| |


(t)Significantaccountingestimates Impairment of assets At each reporting date, the consolidated entity reviews the carrying amounts of its tangible and intangible assets to determine

whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the consolidated entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Goodwill, intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually and whenever there is an indication that the asset may be impaired. An impairment of goodwill is not subsequently reversed.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the reversal of the impairment loss is treated as a revaluation increase.

The basic assumptions utilised with respect to the impairment of assets for the Human Capital Management cash generating unit (“CGU”) are as follows (refer note 14 also for discussion of CGU’s and impairment tests):

The projected sales growth rate is considered to be conservative based on the expected impact of the synergies and efficiencies arising from the integration of the acquisitions made in 2007 and 2008.

Sensitivity Analysis for the Human Capital Management CGU The above assumptions are utilised to arrive at a cash-flow estimate over five years which is then discounted to arrive at a net

present value for the Human Capital Management CGU. Overall the assumptions are considered conservative. However, should the actual cash generated result in net cash contribution less than indicated by the above assumptions, the carrying value of the cash generating units would need to be reduced. The net cash flow can be reduced to the extent of 12% without impacting the carrying value.

Impairment Test Components

Discount rate %

2010-2014 sales increase

Overhead growth

Risk factor reduction

Residual/exit value

Human Capital Management

13.25%

7%

5%

7%

5 times 2014 net cash after tax

29|| |


|| |

2. PROFIT FROM OPERATIONS(a) Revenue

Revenue from continuing and discontinuing operations consisted of the following items:

(b) Profit before income tax Profit before income tax has been arrived at after charging the following (gains) and losses from continuing and discontinuing operations. The line items below combine amounts attributable to both continuing and discontinuing operations:

Sales revenue:

Revenue from the sale of licences

Revenue from the rendering of services

Interest revenue:

Bank deposits

Royalties

Attributable to:

Continuing operations

2009$

2,242,880

15,242,396

17,485,276

14,855

-

17,500,131

17,500,131

2008$

2,733,992

14,949,153

17,683,145

83,250

-

17,766,395

17,766,395

2009$

-

71,373

71,373

14,855

1,121,461

1,207,689

1,207,689

2008$

-

-

-

83,251

1,089,118

1,172,369

1,172,369

Finance costs:Other entities Director and Director-related entities

Depreciation of non-current assetsNet bad and doubtful debts arising from:Other entitiesRelated entities

Employee benefit expense: Post employment benefits:Defined contribution plansOther employee benefitsShare-based payments:Equity-settled Share-based payments

Operating lease rental expenses: Minimum lease payments

Research and development costs immediately expensed

2009$

443,51581,349

524,864

311,559

87,021-

896,6939,085,711

-

9,982,404

1,601,141

791,834

2008$

433,018211,618

644,636

80,022

233,616-

988,7507,954,685

-

8,943,435

920,778

1,120,903

2009$

394,64281,349

475,991

195,790

-(666,872)

142,7902,443,455

-

2,586,245

308,555

-

2008$

430,035211,618

641,653

-

-(1,639,033)

108,0011,186,255

-

1,294,256

79,317

-


30|| |


|| |

3. INCOME TAX

(a)Incometaxrecognisedinprofitorloss

Tax (expense)/income comprises:Current tax expense

Deferred tax expense relating to the origination and reversal of temporary differences

Over-provision from prior periods

Total tax (expense)/benefit

Attributable to:

Continuing operations Discontinued operations

The prima facie income tax expense on pre-tax accounting profit reconciles to the income tax (expense)/benefit in the financial statements as follows:

Profit/(loss) from continuing operationsProfit/(loss) from discontinuing operations

Profit from operations

Income tax benefit/(expense) calculated at 30% Non-deductible expensesOther prior year adjustmentsEffects of transactions within the tax consolidation groupResearch and development tax benefit

(b) Current tax assets and liabilities

Tax payable related to continuing operationsTax payable related to acquisitions

Income tax payable

(c) Deferred tax balances

Deferred tax balances comprise:Tax losses - revenueTemporary differences

2009$

(534,960)

105,830

-

(429,130)

(429,130)-

(429,130)

1,398,787-

1,398,787

(419,636)(68,894)

--

59,400

(429,130)

2,102,796151,418

2,254,214

-763,276

763,276

2008$

(1,220,206)

249,735

15,120

(955,351)

(955,351)-

(955,351)

3,470,081-

3,470,081

(1,041,024)(13,498)15,120

-84,051

(955,351)

1,759,171296,453

2,055,624

-657,446

657,446

2009$

843,679

-

843,679

843,679-

843,679

(2,812,263)-

(2,812,263)

843,679----

843,679

2,102,796151,418

2,254,214

--

-

2008$

109,298

-

109,298

109,298-

109,298

(364,326)-

(364,326)

109,298----

109,298

1,864,171296,453

2,160,624

--

-


31|| |


|| |

2009Gross deferred tax assets:

Doubtful debts

Provisions, accruals and lease incentives

Gross deferred tax liabilities:

Prepayments


Attributable to:


Discontinued operations

OpeningBalance

$

57,695

599,751

657,446

-

-

-

ConsolidatedCharged to Income

$

(41,842)

147,672

105,830

-

-

-

ClosingBalance

$

15,853

747,423

763,276

-

-

-

763,276

-

763,276

2008Gross deferred tax assets:

Doubtful debts

Provisions, accruals and lease incentives

Gross deferred tax liabilities:

Prepayments


Attributable to:


Discontinued operations

OpeningBalance

$

15,853

391,859

407,712

-

-

-

ConsolidatedCharged to Income

$

41,842

207,892

249,734

-

-

-

ClosingBalance

$

57,695

599,751

657,446

-

-

-

657,446

-

657,446

3. INCOME TAX continued

Taxable and deductible temporary differences arise from the following:


Unrecognised deferred tax balancesThe following deferred tax assets have not been brought to account as assets:

Temporary differences – capital

2009$

-

2008$

-

2009$

-

2008$

200,062

32|| |


|| |

3. INCOME TAX continued

Tax consolidation Relevance of tax consolidation to the consolidated entityThe Company and its wholly-owned Australian resident entities have formed a tax-consolidated group with effect from 1 July 2003 and have therefore been taxed as a single entity from that date. The head entity within the tax-consolidated group is ComOps Limited. The members of the tax-consolidated group are identified at note 27.

Nature of tax funding arrangements and tax-sharing agreementsEntities within the tax-consolidated group have entered into a tax funding agreement and a tax-sharing agreement. ComOps Limited and each of the entities in the tax-consolidated group has agreed to pay a tax equivalent payment to or from the head entity, based on the current tax liability or current tax asset of the entity. Such amounts are reflected in amounts receivable from or payable to other entities in the tax-consolidated group.

The tax sharing agreement entered into between members of the tax-consolidated group provide for the determination of the allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations. No amounts have been recognised in the financial statements in respect of this agreement as payment of any amounts under the tax sharing agreement is considered remote.

4. KEY MANAGEMENT PERSONNEL COMPENSATION Details of Executives and Non-executives The key management positions (Executives and Non-executives) of ComOps Limited during the year were:

Geoffrey C Wild (Chairman, Non-executive Director) Richard E Bradley (Managing Director) Graham R Libbesson (Non-executive Director) Stuart M Clark (Finance Director) Cameron A Brown (Sales & Marketing Director) Andrew J Roberts (Client Services Director) Mary F Clarke (Managing Director-ComOps Solutions) Michael J Bowman (R & D Manager) resigned 30/06/2009 Phillip J Walker (Sales Director) resigned 30/06/2009 Moshe D Woods (Sales Director) Peter S Morris (Client Services Director) Michael W Panosh (Branch Manager Melbourne) resigned 09/10/2009 Mark P Heard (Branch Manager Auckland) resigned 07/12/2009

Key management personnel compensation policyRemuneration packages are reviewed and determined with due regard to current market rates and are benchmarked against comparable industry salaries and adjusted by a performance factor to reflect changes in the performance of the Company.

Key management personnel compensationThe aggregate compensation of the key management personnel of the consolidated entity is set out below:

Short-term employee benefits

Post-employment benefits

Share-based payments

2009$

1,907,712

294,099

1,217

2,203,028

2008$

1,709,098

319,738

-

2,028,836

2009$

100,000

-

-

100,000

2008$

100,000

-

-

100,000


33|| |


|| |

4. KEY MANAGEMENT PERSONNEL COMPENSATION continued

Directors’ Option PlanThe status with respect to the Directors’ Option Plan is as follows:

200,000 options were issued to Mr. Stuart M Clark on 16 July 2009. The options were issued under the Directors’ Option Plan and are exercisable at 13 cents each. These options will expire on 30 September 2012. These options were valued, based on the Black Scholes model and have been recognised as an expense in 2009. The options are exercisable at the average closing price for the last five days prior to the date of the relevant remuneration and nomination committee meeting. The relevant meeting was held on 30 September 2008 and therefore the proposed exercise price is 13 cents. The options will vest three years from 30 September 2008 and be exercisable from the vesting date.

200,000 options were issued to Mr. Graham R Libbesson on 12 December 2007. The options were issued under the Directors’ Option Plan and are exercisable at 20 cents each. These options will expire on 31 December 2010.

The options were valued, based on the Black Scholes model and were recognised as an expense in the year of issue.

Employees’ Option SchemeNo options were issued to employees during 2009 and there are nil on issue as at 31 December 2009.

Service contracts for key management personnelAs per the Company constitution, one-third of the Directors and any Directors (excluding the Managing Director) who have held office for three years or more, stand for re-election at each annual general meeting.

The Executives have in place standard contracts with the Company which allow either party to give between seven days and three months notice to terminate the contract of employment.

5. EXECUTIVE SHARE OPTION PLAN The Company has two ownership-based remuneration schemes for Directors and employees. The following sets out the rules for each scheme.

Employees’ Option SchemeThe Employees’ Option Scheme entitles the Directors to offer employees of the Company (or any other member of the Group) options to subscribe for shares in the Company at an exercise price being not less than the higher of the amount prescribed in the Listing Rules or the volume weighted average price of the shares in the Company trading on the ASX over the five trading days immediately prior to the date of offer. Options are offered to employees at the discretion of the Board of Directors from time to time following recommendations from the remuneration and nomination committee made on the basis of employee performance.

The number of shares over which the options relate must not exceed 5% of the then total number of issued shares of the Company. The offer of options may be accepted by the employee or an associate of the employee being a close relative or a company controlled by the employee. Under the Employees’ Option Scheme, there are various limits on the exercise of the options if the employee ceases to be an employee of the Company or a member of the Group, dies, becomes totally and permanently disabled, retires, ceases to be an eligible person, fails to comply in a material respect with the terms and conditions of the Employees’ Option Scheme or becomes an insolvent under administration. Subject to these qualifications, options may be exercised at any time from the date of their vesting to the date of their expiry.

The options carry no rights to dividends and no voting rights.

The Employees’ Option Scheme may be amended by the Company in general meeting.

There were nil employee options granted, exercised, lapsed or on issue during the 2008 or 2009 financial years.

34|| |


|| |

Directors’ Option Plan

Balance as at 1 January

Granted during the financial year

Exercised during the financial year

Lapsed during the financial year

Balance on issue at end of the financial year

2009Number

200,000

200,000

-

-

400,000

Share options issued by ComOps Limited to key management personnel

5. EXECUTIVE SHARE OPTION PLAN continued

Directors’ Option PlanThe Board of Directors can, at its discretion and in accordance with the Company’s Constitution, the Corporations Act 2001 and the ASX Listing Rules, issue options to Directors to subscribe for shares on terms and conditions as determined by the Board of Directors from time to time.

Directors (or companies controlled by the Directors) have been, or are entitled to be, issued options to subscribe for ordinary shares in the capital of the Company under the Directors’ Option Plan. Options issued under the Directors’ Option Plan have certain conditions including staged vesting rights and continued involvement of Directors with the Company for specified periods of time.

The options carry no rights to dividends and no voting rights.

2008Number

300,000

-

-

100,000

200,000

r

Graham R Libbesson (i)

Stuart M Clark (ii)

Balance01/01/2009

Number

200,000

-

200,000

GrantedNumber

-

200,000

200,000

Balance31/12/2009

Number

200,000

200,000

400,000

Balance vested at 31/12/2009

Number

200,000

-

200,000

Vested but not exercisable

Number

-

-

-

Vested and exercisable

Number

200,000

-

200,000

Options vested during year

Number

-

-

-

35|| |


|| |

7. CURRENT TRADE RECEIVABLES

Trade receivables

Provision for impairment of receivables

2009$

6,611,185

-

6,611,185

2008$

6,642,751

(140,713)

6,502,038

2009$

774,400

-

774,400

2008$

-

-

-

5. EXECUTIVE SHARE OPTION PLAN continued

Details regarding the options issued to current employees and Directors are:

(i) On 12 December 2007, the Company issued 200,000 options to subscribe for 200,000 ordinary shares in the unissued capital of the Company to Mr. Graham R Libbesson. These options are exercisable at $0.20 per share. The options will expire on 31 December 2010. The options were valued, using the Black Scholes method, at $0.147 per option. The expense attributable to these options was recognised in full in the year ending 31 December 2007. It was resolved by the remuneration sub-committee to recommend the issue of the options on 26 September 2007 at which time the shares were trading at $0.20.

(ii) On 16 June 2009, the Company issued 200,000 options to subscribe for 200,000 ordinary shares in the unissued capital of the Company to Mr. Stuart M Clark. These options are exercisable at $0.13 per share. The options will expire on 30 September 2012. The options were valued using the Black Scholes method, at $0.006 per option. The expense attributable to these options was recognised in full in the year ending 31 December 2009. It was resolved by the remuneration sub-committee to recommend the issue of the options on 30 September 2008 at which time the shares were trading at $0.13.

Options model – key assumptions

Inputs into the model

Grant date share price

Exercise price

Annualised standard deviation in value of asset

Option life

Dividend yield

Risk-free interest rate

G R Libbesson

$0.28

$0.20

30%

3 years

0%

5%

S M Clark

$0.05

$0.13

30%

3 years

0%

5%

6. REMUNERATION OF AUDITOR

Auditor of the parent entity:

Audit of the financial report

RSM Bird Cameron Partners

Accounting & taxation services

2009$

82,500

-

82,500

2008$

89,000

1,000

90,000

2009$

7,000

-

7,000

2008$

6,500

1,000

7,500


8. CURRENT OTHER RECEIVABLES

Receivables as per contractual arrangements

2009$

2,098,944

2008$

2,407,550

2009$

-

2008$

-

9. WORK IN PROGRESS

Cost of product development costs based on requirements of customers. The cost of this work in progress is expected to be fully recovered during 2010 when the product will be recognised as revenue.

2009$

1,874,518

2008$

2,264,197

2009$

-

2008$

-

10. OTHER CURRENT ASSETS

Prepayments

2009$

277,285

2008$

244,176

2009$

54,390

2008$

-

11. NON-CURRENT OTHER RECEIVABLES

Receivables as per contractual arrangements to be received over the next 3 years

Other Debtors

Loans and advances

Other receivables from wholly-owned controlled entities:

Salvus Solutions Pty Ltd

Microster Solutions Pty Ltd

Allowance for doubtful debts

2009$

1,032,256

695,718

-

-

-

1,727,974

2008$

1,571,794

-

-

-

-

1,571,794

2009$

-

394,812

817,754

2,199,966

-

3,412,532

2008$

-

-

3,629,982

-

(666,872)

2,963,110

Ageing summaries of total current and non-current receivables as at 31 December 2009 and 31 December 2008 are set out in the following tables. Management consistently reviews aged receivables levels with a view to the collection of cash within the shortest possible time-frame. Ideally trade receivables are collected within seven days however it is often the case that extended terms must be granted to win contracts and maintain long-term relationships in an increasingly competitive market. Therefore, management is confident that the 21% of receivables that are past due but not impaired, will be collected. All balances invoiced in the last three months are considered to be within standard trading terms.

36|| |


|| |


37|| |


|| |

11. NON-CURRENT OTHER RECEIVABLES continued

12. OTHER NON-CURRENT FINANCIAL ASSETS

Shares in controlled entities at cost (note 27)

2009$

-

2008$

-

2009$

13,825,540

2008$

13,825,540

Trade & other Receivables

Total Receivables

Ageing percentage

>2 years

$41,690

1%

2009 Receivables Ageing

>1 year

$461,125

4%

>6 months

$1,243,687

12%

>3 months

$494,550

4%

Within Standard Terms

$8,197,051

79%

Total

$10,438,103

100%

Trade & other Receivables

Total Receivables

Ageing percentage

>2 years

$139,014

1%

2008 Receivables Ageing

>1 year

$641,738

6%

>6 months

$531,890

5%

>3 months

$908,721

9%

Within Standard Terms

$8,260,019

79%

Total

$10,481,382

100%

13. PROPERTY, PLANT AND EQUIPMENT

Gross carrying amountBalance at 31 December 2007AdditionsBalance at 31 December 2008Additions

Balance at 31 December 2009

Accumulated depreciationBalance at 31 December 2007DisposalsDepreciation expenseBalance at 31 December 2008Depreciation expense

Balance at 31 December 2009

Net book valueAs at 31 December 2008

As at 31 December 2009

Plant and equipmentat cost

$

374,377118,174492,551

70,004

562,555

(292,361)(3,569)

(46,842)(342,772)

(68,116)

(410,888)

149,779

151,667

Furniture and fittings at cost

$

443,712100,621544,333

30,296

574,629

(436,994)

(10,453)(447,447)(30,410)

(477,857)

96,886

96,772

Motor vehiclesat cost

$

13,93024,09438,024 3,563

41,587

(13,930)

(6,150)(20,080)(6,873)

(26,953)

17,944

14,634

Leasehold improvement at cost

$

96,17312,146

108,319 91,241

199,560

(55,585)

(16,577)(72,162)(14,053)

(86,215)

36,157

113,345

TOTAL

$

928,192255,035

1,183,227195,104

1,378,331

(798,870)(3,569)

(80,022)(882,461)(119,452)

(1,001,913)

300,766

376,418


Consolidated

38|| |


|| |

14. INTANGIBLE ASSETS

Goodwill

Gross carrying amount:

At beginning of the financial year

Goodwill related to entity acquisitions

At end of the financial year (Note 14 (a))

Software asset

Total intangible assets

2009$

17,691,198

-

17,691,198

1,001,352

18,692,550

2008$

10,877,465

6,813,733

17,691,198

1,178,061

18,869,259

2009$

3,623,122

-

3,623,122

1,001,352

4,624,474

2008$

3,623,122

-

3,623,122

1,178,061

4,801,183

There was no impairment during the financial year.

OverviewThe total goodwill recognised includes the below consideration components, excluding future potential top up amounts, as well as the legal, accounting, consultancy, due diligence and other costs incurred as part of the acquisition process.

(a) Components of GoodwillGoodwill related to entity acquisitions relates to the following cash generating units:

Allocation of goodwill to cash-generating unitsGoodwill of $3,623,122 has been allocated for impairment testing purposes to the Unibis, BI, eCom cash-generating units. Goodwill of $14,102,466 relates to the entities and businesses acquired during 2007 and 2008, and has been allocated to the Human Capital Management pillar.

Unibis, BI, eComThe recoverable amount of the Unibis, BI, eCom operations is determined based on a value in use calculation which uses cash flow projections based on financial budgets approved by management and a discount rate of 13.25% (2008-13.25%). The cash flow projections are based on historical results to 31 December 2009 and forecast incremental cash impacts to 31 December 2014 across the Unibis, eCom and BI products. For impairment testing purposes the forecast sales increase across all products from 2010 to 2014 is 5%. The expense increase factored for modelling purposes is 5% per annum from 2010 to 2014. Management believes that any reasonably possible change in the key assumptions on which the recoverable amount is based would not cause the Unibis operations carrying amount to exceed its recoverable amount.

Goodwill arising from acquisitions

Unibis, BI, eCom

Human Capital Management Pillar

Total Goodwill

2009$

3,623,122

14,068,076

17,691,198

2008$

3,623,122

14,068,076

17,691,198

2009$

3,623,122

-

3,623,122

2008$

3,623,122

-

3,623,122


39|| |


|| |

14. INTANGIBLE ASSETS continued

Human Capital Management Business Pillar The Human Capital Management business pillar was initiated in 2007 when a strategy was put in place to target potential companies for acquisition, that fall under this pillar. The acquisitions that fall under this pillar are Human Capital Solutions Group Pty Ltd, Concentric Business Solutions Limited, the business of Microster Pty Limited and Salvus Solutions Pty Ltd (formerly Australian Workplace Software Pty Ltd).

The goodwill related to the purchase of the Human Capital Management business pillar totals $14,068,076. The recoverable amount of the business is determined based on a value in use calculation which uses cash flow projections based on financial budgets approved by management and a discount rate of 13.25% (2008-13.25%). The cash flow projections are based on historical results to 31 December 2009 and forecast incremental cash impacts to 31 December 2014 across all entities within the relevant business pillar.

For impairment testing purposes the forecast sales increase across all relevant entities from 2010 to 2014 is 7%. The expense increase factored for modelling purposes is 5% per annum from 2010 to 2014. After applying these sales and expense growth projections, the residual/exit value is calculated by applying a factor of five to the projected 2014 net cash after tax result. There is also a risk factor reduction of 5% applied to the EBITDA margins calculated. Management believes that any reasonably possible change in the key assumptions on which the recoverable amount is based would not cause the Human Capital Management business pillar carrying amount to exceed the recoverable amount.

(b) Purchase of Salvus Solutions Pty Ltd (“Salvus”) – formerly known as Australian Workplace Software Pty Ltd and Potential Future Acquisition Payments100% of the shares in Salvus were acquired. Control of the business was effectively taken on 1 September 2008 with final settlement occurring on 18 September 2008. Salvus forms part of the Human Capital Management pillar.

ComOps Limited acquired the following business assets and liabilities: trade debtors of $98,639, fixed assets of $69,573, cash overdraft of $44,272, trade payables of $7,751, employee provisions of $165,478 and unearned income of $200,859 as at 1 September 2008. The assets and liabilities arising from the acquisition are recognised at fair values which are equal to their carrying value at acquisition date. Goodwill of $424,942 is represented by the total acquisition costs of $174,794 plus the net asset deficiency of $250,148. The acquisition costs of $174,794 relate to legal, accounting and consulting costs incurred as part of due diligence plus additional leave accruals not recognised in the acquiree’s accounting records.

The agreed consideration for Salvus is represented by future instalments payable annually, the quantum of which will be determined based on the future performance of Salvus over the four year period to 30 June 2012. These future instalments are payable in three tranches after the years ending 30 June 2010, 30 June 2011 and 30 June 2012 and will be calculated following the recoupment of all balance sheet shortfalls as an amount consisting of the increase in net profit after tax of Salvus compared to the previous financial year over and above 15% of annual growth multiplied by three. The instalment amount will be paid, at the vendor’s discretion, in either cash or shares or a combination of the two. The contingent payments have not been recognised as the budgeted profits do include growth significantly in excess of 15% and accordingly the payments are not considered material.

(c) Purchase of Human Capital Solutions Group Pty Ltd (“HCS”) and Concentric Business Solutions Limited and Potential Future Acquisition PaymentsHCS forms part of the Human Capital Management pillar. The purchase price paid for HCS was $6.5 million, comprised of cash and shares. The agreed consideration includes potential further top up amounts depending on the future performance of HCS over a three year period from 1 July 2007. These top-up amounts will be calculated as an amount consisting of the increase in net profit after tax of HCS compared to the previous financial year over and above 15% of annual growth multiplied by 3.75 and that amount will be paid as one third in cash and two thirds in shares.

The purchase price paid for Concentric of $300,000 was comprised wholly of shares. The number of shares issued was calculated based on the 20 cent share price as at the close of business on the last business day prior to 2 July 2007. The agreed consideration includes future potential issues of ordinary shares in the Company, depending on the share price performance of the Company and forecast

14. INTANGIBLE ASSETS continued

annual net profit after tax of the acquisitions made under the Concentric strategy during the period of five years after the completion of the acquisition. It was agreed with one of the former Concentric shareholders, Mrs. Lisa Redstall that she would waive her rights to future share issues of up to 10.2 million shares in consideration for a cash payment of $125,000 paid to her in instalments between November 2009 and October 2010. As at 31 December 2009, $25,000 of this consideration had been paid and therefore ten further monthly $10,000 instalments are due to her during 2010. The purchase price as it relates to the other former Concentric shareholders remains unchanged so that the agreed consideration for these parties includes future potential issues of up to 13.8 million shares in the Company. The minimum share price hurdle is $0.45 and the minimum net profit after tax hurdle is $5 million and the number of shares attached to this minimum hurdle is 2.8 million shares. Further hurdles are set on a similar basis with the next seven hurdle stages each involving approximately 1.16 million shares set at ComOps share prices of $0.55, $0.65, $0.75, $0.85, $0.95, $1.05 and $1.15 and net profit after tax hurdles respectively of $7 million, $9 million, $11 million, $13 million, $15 million, $17 million and $19 million. The final hurdle involving 2.9 million shares is set at a Company share price of $1.25 and a net profit after tax hurdle of $24 million.

(d) Software AssetThe software capitalised relates to costs incurred in undertaking extensive due diligence on the Microster software asset to ensure compliance with the longer term strategies of the ComOps Group. This capitalised software of $0.65 million plus the purchased software of $0.53 million brings the total software acquisition cost to $1.2 million. The software asset is being amortised over seven years and has a net carrying value of $1.0 million as at 31 December 2009.


40|| |


|| |

15. (a) CURRENT TRADE & OTHER PAYABLES

15. (b) OTHER PAYABLES TO TAXATION AUTHORITIES

Trade payables

Other payables to wholly-owned controlled entities:ComOps Solutions Pty LtdComOps (NZ) LimitedHuman Capital Solutions Group Pty Ltd

Accruals

2009$

2,090,001

---

303,291

2,393,292

2008$

2,364,659

---

385,432

2,750,091

2009$

117,176

3,647,48254,89688,563

-

3,908,117

2008$

600,000

---

-

600,000

Taxes payable to the Australian Taxation Office (other than income tax) are currently under discussion and negotiation to determine an agreed payment schedule

2009$

1,415,267

1,415,267

2008$

848,472

848,472

2009$

-

-

2008$

-

-

Income received in advance from customer

2009$

73,877

2008$

331,093

2009$

73,877

2008$

331,093

16. CURRENT INCOME RECEIVED IN ADVANCE


41|| |


|| |

20. NON-CURRENT BORROWINGS

(i) Secured by a fixed and floating charge over the assets of the consolidated entity.

UnsecuredSecured:Director and Director-related entity (notes 29(e)), (i)

2009$

22,150

275,650

297,800

2008$

22,151

1,251,701

1,273,852

2009$

-

275,650

275,650

2008$

-

1,251,701

1,251,701

Employee benefits Make good (note 23)

2009$

52,230206,735

258,965

2008$

156,442116,561

273,003

2009$

546106,570

107,116

2008$

--

-

21. NON-CURRENT PROVISIONS

18. CURRENT PROVISIONS

17. CURRENT BORROWINGS

(i) Secured by a fixed and floating charge over the assets of the consolidated entity.

Unsecured: other entitiesSecured: other entities (i)

2009$

-646,839

646,839

2008$

6,8001,915,494

1,922,294

2009$

--

-

2008$

--

-

Employee benefits

2009$

1,385,718

2008$

1,207,086

2009$

471,675

2008$

-

19. OTHER CURRENT LIABILITIES

Unearned maintenance income

2009$

2,549,739

2008$

2,205,904

2009$

-

2008$

-

24. ISSUED CAPITAL

Fully paid ordinary shares carry one vote per share and carry the rights to dividend.The Company does not have a limited amount of authorised capital and issued shares do not have a par value.

23. PROVISIONS

(i) The make good provision estimates the make good amount payable at lease termination for premises leased at 77 Pacific Highway, North Sydney and 5 Queens Road, Melbourne.

Lease incentive (note 26)

2009$

421,257

2008$

209,147

2009$

421,257

2008$

-

22. OTHER CURRENT & NON-CURRENT LIABILITIES

Make good provision (i)Balance at beginning of financial yearAdditional provisions recognised

Balance at end of financial year

2009$

116,56190,174

206,735

2008$

112,9563,605

116,561

2009$

106,570-

106,570

2008$

--

-

Fully paid ordinary sharesBalance at beginning of financial yearIssue of shares as consideration

Balance at end of financial year

2009$

115,995,085-

115,995,085

2008$

23,305,095-

23,305,095

2009$

107,865,0048,130,081

115,995,085

2008$

21,320,6791,984,416

23,305,095

42|| |


|| |

Balance at beginning of the financial year

Net profit/(loss) attributable to the members of the parent entity

Balance at end of the financial year

2009$

(2,581,146)

969,657

(1,611,489)

2008$

(5,095,876)

2,514,730

(2,581,146)

2009$

(6,055,403)

(1,968,584)

(8,023,987)

2008$

(5,800,375)

(255,028)

(6,055,403)

25. ACCUMULATED PROFITS/LOSSES


43|| |


|| |

27. SUBSIDIARIES

(i) ComOps Limited is the head entity within the tax consolidated group.(ii) Australian Workplace Software Pty Ltd had its company name changed to Salvus Solutions Pty Ltd in October 2009.

Parent entityComOps Limited (i)SubsidiariesComOps Solutions Pty Ltd Human Capital Solutions Group Pty LtdComOps (NZ) LimitedConcentric Business Solutions LimitedMicroster Solutions Pty LtdSalvus Solutions Pty Ltd (ii)

Country of incorporation

Australia

AustraliaAustralia

New ZealandNew Zealand

AustraliaAustralia

Ownership December 2009

%

100%100%100%100%100%100%

interest December 2008

%

100%100%100%100%100%100%

Operating leases Leasing arrangementsThe consolidated entity has a commitment in respect of five non-cancellable operating leases over office premises located in Sydney, Melbourne, Brisbane, Newcastle and Auckland.

The office lease expiration dates for each of the premises are set out below.

Sydney: 31 March 2015Melbourne: 23 September 2010Brisbane: 31 January 2011Newcastle: 31 May 2012Auckland: 6 October 2012

The following are the commitments of the consolidated entity over the lease period for all operating leases presented on the basis that the agreed rent and estimated out-goings are paid over the contracted lease period:

Not longer than one yearLonger than one year and not longerthan five years

2009$

1,458,101

4,384,195

5,842,296

2008$

1,345,700

1,461,990

2,807,690

2009$

-

-

-

2008$

-

-

-

26. LEASES

In respect of the non-cancellable operating lease for premises occupied in Sydney by the consolidated entity, the financial statements recognise lease incentives negotiated in the lease. At the end of the financial year the unamortised lease incentive was $421,257 (2008 $209,147).

Finance leasesLeasing arrangementsThe consolidated entity does not have any finance leases.


28. EARNINGS PER SHARE

Basic earnings per share (from continuing operations)Diluted earnings per share (from continuing operations)

Basic EPS disclosure

Earnings used in EPS calculationNet profit

Weighted average number of ordinary shares on issue used in the calculation of basic earnings per share

Diluted EPS disclosure

Earnings used in diluted EPS calculationNet profit

Weighted average number of ordinary shares on issue used in the calculation of basic earnings per shareShares deemed to be issued for no consideration - options

Weighted average number of ordinary shares used in the calculation of diluted EPS

cents per share

0.80.8

$

969,657969,657

Number

115,995,085

$$

969,657969,657

Number

115,995,085

400,000

116,395,085

cents per share

2.22.2

$

2,514,7302,514,730

Number

112,550,952

$$

2,514,7302,514,730

Number

112,550,730

200,000

112,750,730

44|| |


|| |

29. RELATED PARTY DISCLOSURES(a) Key management personnel compensation Details of specified key management personnel remuneration are disclosed in note 4 to the financial statements.

(b) Equity interests in related parties Details of the percentage of ordinary shares held in subsidiaries are disclosed in note 27 to the financial statements.

(c) Key management personnel equity holdings At 31 December 2009, the Company had 400,000 outstanding options to subscribe for unissued share capital of the Company under the Directors’ Option Plan. Further details of the Directors’ Option Plan and the Employees’ Option Scheme are contained in the Directors’ report and note 5 to the financial statements.

As at 31 December 2009, key management personnel and their personally related entities held a total of 52,497,425 (2008: 55,175,860) fully paid ordinary shares.

(d) Fully paid ordinary shares issued by ComOps Limited

2009r

Geoffrey C Wild AM

Richard E Bradley

Graham R Libbesson

Mary F Clarke

Andrew J Roberts

Cameron A Brown

BalanceJanuaryNumber

305,000

36,203,504

120,000

339,000

15,031,921

243,000

52,242,425

Granted ascompensation

Number

-

-

-

-

-

-

-

Received onexercise of options

Number

-

-

-

-

-

-

-

Net otherchangeNumber

-

125,000

130,000

-

-

-

255,000

BalanceDecember

Number

305,000

36,328,504

250,000

339,000

15,031,921

243,000

52,497,425

Balanceheld nominally

Number

-

-

-

-

-

-

-

2009 2008


45|| |


|| |

29. RELATED PARTY DISCLOSURES continued

Michael J Bowman and Phillip J Walker resigned as employees of the Company, effective 30 June 2009.

(e) Loan disclosures

Interest of $81,349 (2008: $211,618) has accrued on this loan from the beginning of the year. Interest is charged on an arm’s length basis.

(f) Other transactions with key management personnel

Calais Estate Wines Pty Ltd is a private company controlled by Mr. Richard Bradley whilst HCS Learning Techniques Pvt Ltd was owned by Mr. Andrew Roberts as at 31 December 2009. Transactions with both entities were undertaken in all cases on an arm’s length basis.

The profit from operations includes the following items

of revenue and expense that resulted from transactions

with Directors or their personally related entities other

than remuneration, loans or equity holdings:

Purchases - Calais Estate Wines Pty Ltd

Purchases - HCS Learning Techniques Pvt Ltd

Interest expense on loan from Director

2009$

41,026

566,983

81,349

689,358

2008$

9,184

195,565

211,618

416,367

2009$

30,629

-

81,349

111,978

2008$

3,275

-

211,618

214,893

Director’s loans to the Company in existence at

31 December (Mr. R E Bradley):

Non-current secured (note 20) principal

Non-current secured (note 20) interest

2009$

272,497

3,153

275,650

2008$

1,239,685

12,016

1,251,701

2009$

272,497

3,153

275,650

2008$

1,239,685

12,016

1,251,701

2008r

Geoffrey C Wild AM

Richard E Bradley

Graham R Libbesson

Mary F Clarke

Andrew J Roberts

Cameron A Brown

Michael J Bowman

Phillip J Walker

BalanceJanuaryNumber

300,000

36,020,004

80,000

332,000

15,000,000

193,000

-

-

51,925,004

Granted ascompensation

Number

-

-

-

-

-

-

-

-

-

Received onexercise of options

Number

-

-

-

-

-

-

-

-

-

Net otherchangeNumber

5,000

183,500

40,000

7,000

31,921

50,000

1,833,384

1,100,051

3,250,856

BalanceDecember

Number

305,000

36,203,504

120,000

339,000

15,031,921

243,000

1,833,384

1,100,051

55,175,860

Balanceheld nominally

Number

-

-

-

-

-

-

-

-

-

29. RELATED PARTY DISCLOSURES continued

(g) Parent entities The ultimate parent entity in the wholly-owned Group is ComOps Limited.

(h) Transactions involving the parent entity Amounts receivable by the ultimate parent entity from wholly-owned subsidiaries are disclosed in note 11 to the financial statements.

During the financial year subsidiaries that made royalty payments to the ultimate parent entity on sale of in-house software licences are as follows: ComOps Solutions Pty Ltd ($363,954), Microster Solutions Pty Ltd ($620,712), Salvus Solutions Pty Ltd ($103,480) and ComOps (NZ) Limited ($33,315). There was no other transaction between entities in the wholly-owned Group during the financial year, other than the sharing of resources.

30. NOTES TO THE CASH FLOW STATEMENT(a) Reconciliation of cash For the purposes of the cash flow statement, cash includes cash on hand and at bank, net of outstanding bank overdrafts. Cash at the end of the financial year as shown in the cash flow statement is reconciled to the related items in the balance sheet as follows:

(b) Cash on deposit (other asset)

(c) Financing facilities

The Bendigo Bank facility is available to a maximum of $4 million and to the extent that agreed balance sheet ratios are achieved. These ratios are largely related to the level of services and products delivered and the Company’s management of its working capital.

46|| |


|| |

Secured loan facility

▪ amount used

▪ amount unused

2009$

646,839

-

646,839

2008$

1,915,494

-

1,915,494

2009$

-

-

-

2008$

-

-

-

Other non-current assets represent a security bond in

respect of the Company’s premises, which is not readily

available on demand

2009$

264,670

2008$

308,625

2009$

-

2008$

-

Cash

2009$

703,754

2008$

674,664

2009$

459

2008$

19


47|| |


|| |

30. NOTES TO THE CASH FLOW STATEMENT continued

(d)Reconciliationofprofitfortheyeartonetcashflowsfromoperatingactivities

31. SEGMENT INFORMATIONIdentification of reportable segmentsThe consolidated entity is organised into three major business pillars for management and reporting purposes.

The consolidated entity has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources.

The consolidated entity is managed primarily on the basis of business pillars and service offerings as the diversification of the consolidated entity’s operations inherently have notably different risk profiles and performance assessment criteria. Operating segments are therefore determined on the same basis.

The reportable segmentsThe three major business pillars for management and reporting purposes are:

• The ComOps Solutions business pillar is represented by the traditional ComOps Solutions products which include the six product applications: BI, BMS, eCom, SAM, Unibis and UniBorne.

• The Human Capital Management business pillar was initiated in 2007 when a strategy was put in place to target potential acquisitions that fall under this pillar. The pillar is represented by the inter-related products specifically focused on the management of human resources: workforce management; safety, risk and claims management; and content solutions.

• The New Zealand business pillar represents aspects of both the ComOps Solutions and the Human Capital Management business pillars with the focus being the penetration and growth of these two pillars in the unique New Zealand market.

Basis of accounting for purposes of reporting by operating segments(a) Accounting policies adoptedUnless stated otherwise, all amounts reported to the Board of Directors, being the chief decision maker with respect to operating segments, are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Group.

Profit/(Loss) for the year

Depreciation of property, plant and equipment

(Increase)/decrease in assets:

Current receivables

Work in progress

Other current assets

Non-current receivables

Other non-current assets

Future income tax benefits

Increase/(decrease) in liabilities:

Current trade payables and accruals

Current provisions

Other current liabilities

Other non-current liabilities

Cash received in advance from customers

Net cash from operating activities

2009$

969,657

311,559

145,069

389,679

(33,109)

(156,180)

(145,012)

(105,830)

1,045,170

377,222

343,835

198,073

(257,216)

3,082,917

2008$

2,514,730

80,022

(2,570,678)

(21,666)

(98,780)

632,527

-

(249,734)

625,845

926,608

744,961

24,563

(349,885)

2,258,513

2009$

(918,584)

195,790

(828,790)

-

-

(449,422)

78,748

-

622,807

565,265

-

(447,678)

(257,216)

(1,439,080)

2008$

(255,028)

-

-

-

-

-

-

-

600,000

(2,358,591)

-

-

(356,685)

(2,370,304)


31. SEGMENT INFORMATION continued

(b) Segment assetsWhere an asset is used across multiple segments, the asset is allocated to that segment that receives majority economic value from that asset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and physical location.

(c) Segment liabilitiesLiabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole and are not allocated. Segment liabilities include trade and other payables and certain direct borrowings.

(d) Unallocated itemsThe following items of revenue, expenses, assets and liabilities are not allocated to operating segments as they are not considered part of the core operations of any segment:

• Finance costs • Corporate expenses • Current tax liabilities • Deferred tax assets and liabilities • Intangible assets

(e) Comparative informationThis is the first reporting period in which AASB 8 has been adopted. Comparative information has been restated to conform to the requirements of this standard.

(f) Segment revenues

(g) Segment results

(i) Represents staffing costs related to Head Office and administration functions.

ComOps Solutions


New Zealand

Unallocated

2009$

9,320,345

8,092,521

66,631

20,634

17,500,131

2008$

9,980,638

7,702,506

-

83,251

17,766,395

ComOps SolutionsHuman Capital ManagementNew Zealand

Total of all segments

Head Office costs and interestEmployee benefits (i)Finance costsConsultants’ feesOccupancy expensesDepreciation expensesOther expenses

Total of Head Office costs and interestProfit before tax Income tax (expense)/benefit

Profit for the year from continuing operations

2009$

3,114,2343,269,626(384,479)

5,999,381

(2,586,245)(475,991)(259,443)(308,555)(195,790)(774,570)

(4,600,594)1,398,787(429,130)

969,657

2008$

3,202,7043,436,298

(76,444)

6,562,558

(1,294,256)(641,653)(414,220)(79,317)

-(663,031)

(3,092,477)3,470,081(955,351)

2,514,730

48|| |


|| |

Consolidated

31. SEGMENT INFORMATION continued

(h) Segment assets and liabilities

(i) Geographical Regions There are no significant revenue or balance sheet items located outside of the Australian region, except as disclosed in the New Zealand segment above.

(j) Other segment information

32. FINANCIAL INSTRUMENTS(a) Financial risk management objectivesThe consolidated entity does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. The consolidated entity’s activities expose it primarily to the financial risks of changes in interest rates. Exposure limits are reviewed by the Board of Directors on a continuous basis.

(b) Significant accounting policiesDetails of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which revenues and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 1 to the financial statements.

ComOps Solutions


New Zealand

Total

Unallocated

2009$

11,575,637

21,502,368

62,339

33,140,344

250,230

33,390,574

2008$

12,779,465

20,026,203

77,746

32,883,414

917,101

33,800,515

2009$

5,839,391

4,726,709

1,123,174

11,689,274

7,694

11,696,968

2008$

7,981,114

4,493,893

593,865

13,068,872

7,694

13,076,566

r

Depreciation and amortisation of segment assets

Other non-cash expenses

Significant revenues or expenses:

Bad debt expense

2008$

-

-

-

2009$

9,156

-

-

2008$

28,475

-

96,569

2009

$

137,605

-

-

2008$

51,547

-

137,047

2009$

164,798

-

87,021

Assets Liabilities

Human Capital Management New ZealandComOps Solutions

49|| |


|| |

32. FINANCIAL INSTRUMENTS continued

(c) Interest rate managementThe consolidated entity’s only exposures to interest rate risk as at the reporting date are as follows: Maturity profile of financial instruments

All other financial assets and liabilities are non-interest bearing.

All other financial assets and liabilities are non-interest bearing.

(d) Credit risk management Credit risk refers to the risk that a customer will default on its contractual obligations resulting in financial loss to the consolidated entity. The consolidated entity has adopted the policy of only dealing with creditworthy customers and inquires into each customer’s ability to satisfy the consideration prior to undertaking a sale as a means of mitigating the risk of financial loss from defaults.

Total

$

703,754

190,065

74,605

10,438,103

11,406,527

2,090,001

598,655

1,415,267

275,650

668,989

5,048,562

Non interest bearing

$

18,601

-

-

10,438,103

10,456,704

2,090,001

-

-

-

22,150

2,112,151

1 to 5 years

$

-

-

-

-

-

-

-

-

275,650

-

275,650

Less than 1 year

$

685,153

-

-

-

685,153

-

598,655

1,415,267

-

646,839

2,660,761

Fixed interest maturity less than 1

year$

-

190,065

74,605

-

264,670

-

-

-

-

-

-

Interest rate

%

0.01

2.65

5.25

Nil

Nil

10.95

10.95

10.53

10.50

2009

Financial assets

Cash

Cash on deposit

Cash on deposit

Trade receivables

Financial liabilities

Trade payables

ATO payable-income tax

ATO payable-other taxes

Related party loan

Other entities loan

Variable interest maturity

Total

$

674,664

234,020

74,605

10,481,382

11,464,671

2,364,659

332,051

848,472

1,251,701

1,944,445

6,741,328

Non interest bearing

$

50,812

-

-

10,481,382

10,532,194

2,364,659

-

-

-

28,951

2,393,610

1 to 5 years

$

-

-

-

-

-

-

-

-

1,251,701

-

1,251,701

Less than 1 year

$

623,852

-

-

-

623,852

-

332,051

848,472

-

1,915,494

3,096,017

Fixed interest maturity less than 1

year$

-

234,020

74,605

-

308,625

-

-

-

-

-

-

Interest rate

%

1.70

8.10

4.90

Nil

Nil

11.76

11.76

10.93

10.25

2008

Financial assets

Cash

Cash on deposit

Cash on deposit

Trade receivables

Financial liabilities

Trade payables

ATO payable-income tax

ATO payable-other taxes

Related party loan

Other entities loan

Variable interest maturity

50|| |


|| |

51|| |


|| |

32. FINANCIAL INSTRUMENTS continued

The consolidated entity does not have any significant credit risk exposure to any single customer. There is one customer at balance date that has a receivable total in excess of $500,000, two other customers that have a receivable total in excess of $1 million and a third customer has a receivable balance of $2 million. Three of the abovementioned companies are considered blue chip organisations and the other is a government agency and therefore the credit risk exposure in all four cases is considered minimal. The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the consolidated entity’s maximum exposure to credit risk.

(e) Fair value of financial instrumentsThe Directors consider that the carrying amount of financial assets and liabilities recorded in the financial statements approximates their fair values, determined in accordance with the accounting policies disclosed in note 1 to the financial statements.

(f) Liquidity risk managementThe related party loan relates to funds made available by the Managing Director, Mr. R E Bradley. It has been agreed that funds are to be repaid when, in the opinion of the Board of Directors, the Company has sufficient surplus funds available. Interest is payable on the loan at a commercial rate equivalent to the overdraft as specified by the National Australia Bank plus a margin of 1%.

The loan from other entities is a financing facility made available by Bendigo Bank at a variable interest rate subject to changes in the interest rate released by the Reserve Bank of Australia from time to time. It is a revolving line of credit of up to $4 million which is utilised and repaid based on the Company’s working capital levels. The level of debt and working capital is reviewed on an on-going basis by management and the Board of Directors. It is expected that the facility will not need to be repaid over the next 12 months as the Company expects to maintain its working capital at current levels.

Non-interest bearing amounts and the ATO liability fall due over the next 12 months. The Company expects to meet these obligations through cash-flows from its operation and the collection of receivables.

The Company prepares forward-looking cash flow projections to ensure sufficient funds are available to meet cash out-goings as they fall due.

(g) Capital managementManagement controls the capital of the Group in order to maintain a good debt to equity ratio, provide the shareholders with adequate returns and ensure that the Group can fund its operations and continue as a going concern. The Group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets. There are no externally imposed capital requirements.

Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues.

(h) Sensitivity AnalysisInterest Rate Risk, Foreign Currency Risk and Price RiskThe Group is not exposed to any foreign currency risk or price risk at balance date. The Group has performed sensitivity analysis relating to its exposure to interest rate risk at balance date. This sensitivity analysis demonstrates the effect on the current year results and equity which could result from a change in interest rate risk.

Interest Rate Sensitivity AnalysisAt 31 December 2009, the effect on profit and equity as a result of changes in the interest rate, with all other variables remaining constant would be as follows:

Consolidated2009

$

(39,732)39,732

(39,732)39,732

Consolidated2008

$

(68,748)68,748

(68,748)68,748

Change in profit Increase in interest rate by 2% Decrease in interest rate by 2%Change in Equity Increase in interest rate by 2% Decrease in interest rate by 2%

52|| |


|| |

33. SUBSEQUENT EVENTSSubsequent to balance date, a transaction was formalised relating to a small off-shore entity which was introduced to the Company during the process of acquiring Human Capital Solutions Group Pty Ltd (“HCS”) in 2007. On 3 February 2010, ComOps Limited acquired 100% of the issued capital of HCS Learning Techniques Pvt Ltd, a company incorporated in India which provides software development services. Since 2007, the Indian entity has been providing services exclusively to companies owned by ComOps Limited and this shall continue subsequent to the purchase. The purchase consideration agreed was $21,018. This consideration takes the form of cash and represents the fair value of the net assets acquired. The payee is Mr. Andrew Jake Roberts, a Director of ComOps Limited and former owner of HCS. During the negotiation for the purchase of the HCS entity, it was acknowledged that the ownership of the shares in HCS Learning Techniques Pvt Ltd were vested in Mr. Roberts and not HCS and it was agreed that Mr. Roberts would transfer his right and entitlement to all shares in HCS Learning Techniques Pvt Ltd to ComOps Limited at a later date and in the meantime take no profit or benefit from the trading of the Indian entity except to the extent that there was a benefit to the ComOps Group of companies.

The Balance Sheet of the Indian Entity as at 31 December 2009 is as set out below:

Otherwise, there has not been any matter or circumstance that has arisen since the end of the financial year that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years.

34. AMENDMENTS TO FINANCIAL STATEMENTSThe net profit after tax reported in the Annual Report differs by $1,050,000 and the revenue by $1,500,000 as compared to the unaudited figures reported in the Appendix 4E lodged with the ASX on 26 February 2010. These differences relate to a contract that the Directors believe the Company entered into prior to 31 December 2009 but which was not documented. The software involved was fully delivered before balance date. Legal advice was sought to determine if a valid contract was in place as at 31 December 2009 and that the revenue recognition tests as per the appropriate accounting standards had been complied with. Accounting advice was also obtained regarding the appropriate interpretation of the accounting standards, to the effect that the revenue could be recognised in the year ended 31 December 2009, provided that there was a legally enforceable contract in place at that date covering all material terms and conditions.

In completing their audit procedures, the Company’s Auditors have determined that the uncertainty of the contractual position at 31 December 2009 does not enable revenue recognition in the 2009 year. Accordingly, after considering all the available information, the Directors have agreed that the revenue from this contract will be recognised in the results for the 2010 financial year.

35. ADDITIONAL COMPANY INFORMATIONComOps Limited is a listed public company incorporated and operating in Australia. Registered office and principal place of business: Level 6, 77 Pacific Highway, North Sydney NSW 2060

Purchase consideration

Cash consideration

Equity issued as consideration

Total purchase

Fair value of assets acquired

Goodwill

Assets and liabilities held at acquisition date



Net payables

Net assets acquired

Purchase consideration settled in cash

Cash and cash equivalents in subsidiary acquired

Cash outflow on acquisition

$

21,018

21,018

-

21,018

21,018

-

21,018

20,396

531,386

(530,764)

21,018

21,018

(20,396)

622

53|| |

CORPORATE GOVERNANCE STATEMENT

|| |

The following statement outlines the principal Corporate Governance practices and procedures that were in place throughout the financial year and the extent to which they depart from the second edition of best practice recommendations of the ASX Corporate Governance Council released in August 2007.

Board CharterValues StatementThe values of the Company are trust, honesty and integrity. The Board carries out the legal duties of its role in accordance with those values and having appropriate regard to the interests of the Company’s customers, staff, shareholders and the broader community in which it operates.

Roles of the Board and ManagementThe Board of Directors is responsible for the Corporate Governance practices of the Company including the direction and oversight of the Company’s business on behalf of the shareholders. Responsibility for the formulation of strategy and management of day-to-day operations and administration, is delegated by the Board of Directors to the Managing Director, Mr. R E Bradley.

Policy and other functions of the Board of Directors include:• approving goals, strategy and plans for the Company’s direction formulated by management and monitoring their

implementation;• ensuring appropriate resources are available to undertake those strategies;• the appointment and supervision of the Chief Executive Officer and secretary of the Company and ensuring that they

appropriately qualified and experienced to discharge their respective responsibilities;• receiving and approving management recommendations such as for capital expenditure and monitoring the Company’s

financial performance and results on a monthly basis; • ensuring appropriate management control and accountability systems are in place and monitoring the corporate conduct of the

Company’s Officers;• identifying areas of significant business risk and the management of those risks; • reviewing published reports and stock exchange announcements to ensure their accuracy and compliance with statutory

requirements;• ensuring compliance with the continuous disclosure requirements of the ASX Listing Rules and the Corporations Act;• meeting statutory, regulatory and other reporting requirements of the Corporations Act and the ASX Listing Rules; and• the establishment and maintenance of appropriate ethical standards for the Company, its Directors and Executives.

The Board of Directors meets monthly and Directors receive comprehensive Board papers which include a report from each senior manager, as well as sales reports and management accounts. At meetings of the Board the Directors deal with the various policy and Corporate Governance matters set out above.

The Company recognises the need for Directors and employees to observe the highest standards of behaviour and business ethics when engaging in corporate activity. All Directors and employees are expected to act in accordance with the law and with the highest standards of propriety.

Separate sub-committees of the Board have been formed. These comprise an audit sub-committee and a remuneration and nomination sub-committee. The composition and delegated functions of these sub-committees are set out below.

Structure of the Board of Directors and fundamental termsThe composition of the Board of Directors is determined by the remuneration and nomination committee using the following principles which accord with the following ASX Corporate Governance Council recommendations:

• The Chairman should be an independent Director; and • The roles of Chairman and Chief Executive should not be exercised by the same individual;

54|| |

CORPORATE GOVERNANCE STATEMENT continued

|| |

The Board of Directors must regularly assess the independence of each Director in light of the interests they have disclosed and such other factors as the Board of Directors determines are appropriate to take into account in determining whether the Director is independent of management and free of any business or other relationship that could materially interfere with or could be perceived to materially interfere with, the exercise of their unfettered and independent judgement.

The Directors’ terms of appointment are governed by the Constitution and one-third of the Directors and any Directors who have held office for three years or more (excluding the Managing Director) must retire at each annual general meeting of members.

Each Director has the right to seek independent professional advice at the Company’s cost, subject to the prior approval of the Chairman, which may not be unreasonably withheld, and the other Directors being given a copy of such advice.

Remuneration and nomination sub-committeeThe Board of Directors has established a remuneration and nomination committee.

On an annual basis the committee reviews the remuneration and performance of the Managing Director and senior Executives and makes recommendations on remuneration packages for Directors and senior Executives and terms of employment generally.

This committee also reviews the composition of the Board of Directors to ensure that it comprises an appropriate mix of skills and experience. When a vacancy exists on the Board of Directors, or where it is considered that a Director with particular skills or experience is required, the committee selects a panel of candidates with the appropriate expertise and experience from which the most suitable candidate is identified on merit. Ultimately, an appropriate recommendation is made to the shareholders to approve any changes to the composition to the Board of Directors.

Audit sub-committeeThe key matters dealt with by the audit sub-committee include the review of:

• The annual and half-year financial reports prior to their approval by the Board of Directors;• The adequacy of existing external audit arrangements, with particular emphasis on the scope and quality of the audit and the

independence of the external Auditor;• All areas of significant financial risk and the arrangements in place to contain those risks to acceptable levels;• Any management letter sent by the external Auditor to the Company;• The effectiveness of management information or other systems of internal control;• The financial statements of the Company with both management and external Auditors; and• Monitoring of compliance with the requirements of the Corporations Act, ASX Listing Rules, Australian Taxation Office and

financial institutions.

The Managing Director and the Finance Director are required to confirm to the Board that, for each financial reporting period, the Company’s financial reports present a true and fair view, in all material respects, of the Company’s financial position and operational results and are in accordance with relevant accounting standards.

The committee has a formal charter, a copy of which is available on the Company website under Investors in the Corporate section.

Significant PoliciesSet out below and on the Company web site are the following significant policies instigated and monitored by the Board of Directors under the terms of the above Charter: Share trading policy; Continuous disclosure; Shareholder communication; Risk management; Performance and evaluation of Directors and Executives; and Remuneration of Directors and Executives.

Share trading policy No Director, senior Executive or employee shall purchase or sell Company securities, or securities of a company in a “special relationship” with the Company, while in possession of material information concerning the Company or such a Company that has not previously been generally disclosed to the investing public for at least two business days. Nor shall an employee inform any individual or entity of any such material information, except in the necessary course of business.

Employees are encouraged to invest in the Company’s securities, but must avoid trading when in possession of confidential material information which, if generally available, would reasonably be expected to either have an effect on the market price or value of those securities or affect an investor’s decision as to whether to buy, sell or hold securities in the Company.

55|| |


|| |

Directors and Executives are required to give prior notice to the Chairman of any dealings in Company securities by themselves or their associates and to provide particulars of any transactions immediately following execution. The Secretary is to make the requisite notifications to ASX following the transaction finalisation.

Continuous disclosureAll Directors, senior Executives and employees have been made aware of the continuous disclosure requirements of the ASX Listing Rules and have been provided with a copy of the relevant rules and guidance notes. Continuous disclosure is included on the agenda for all formal meetings of the Directors. Directors and senior Executives are made aware of the constraints applicable to private briefings and broker and analyst presentations.

The Directors have allocated responsibility to the Managing Director and the Company Secretary to alert the Board of Directors to any operational or regulatory matters respectively which they consider may require disclosure to the market under the continuous disclosure requirements of the ASX Listing Rules. The Directors then consider and approve the form of any such announcement.

All Company announcements require the approval of the Chairman with provision for available Directors to approve urgent announcements. The Company Secretary is responsible for communication with ASX. The Chairman is responsible for all media contact and comment.

Shareholder communication The Company communicates with its shareholders through ASX announcements, quarterly newsletters, the half-year report, the annual report and the annual general meeting. Copies of all such ASX announcements, newsletters and reports are posted to the Company website.

The independent Auditor will attend the annual general meeting to respond to questions from shareholders on the conduct of the audit and the preparation and content of the audit report.

Risk management The Board of Directors has accepted the role of identification, assessment, monitoring and managing the significant areas of risk applicable to the Company and its operations. It has not established a separate committee to deal with these matters as the Directors consider the size of the Company and its operations does not warrant a separate committee at this time. The Board of Directors has identified the significant areas of risk applicable to the Company and its operations and considers the matter of risk management on an on-going basis at its monthly meetings.

Performance evaluation of Directors and Executives The remuneration and nomination committee is required to undertake a review of the performance of Directors, and senior Executives on an annual basis.

Remuneration of Directors and Executives In accordance with the constitution of the Company, shareholders determine the aggregate remuneration of the Non-executive Directors, the maximum aggregate remuneration for Non-executive Directors is currently $500,000. The Directors determine the allocation of the aggregate remuneration, or part thereof, between themselves.

There are no schemes or provisions for retirement benefits for Non-executive Directors other than statutory benefits and accumulated superannuation.

(Particulars as to the remuneration of the Directors and senior Executives during the year ended 31 December 2009 are set out in the accompanying notes to the financial statements.)

Composition of Board of Directors and Sub-CommitteesChanges to the Board of Directors in recent years have resulted in the Board of Directors having a greater mix of skills and experience and an increase in the number of Executive Directors to the extent that the composition does not comply with the ASX Corporate Governance Council recommendations in that it does not comprise a majority of independent, Non-executive Directors. This has been considered by the remuneration and nomination committee who consider that the advantages of the greater mix of skills and experience and the direct insight into the day to day operations of the business outweigh any issues relating to having a minority of Non-executive independent Directors. The remuneration and nomination committee and the Board of Directors have therefore concluded that the current composition of the Board of Directors is appropriate to help the Company achieve its goals, strategies and plans whilst maintaining overall compliance with the Corporate Governance practices and procedures to the extent outlined in this statement and that the composition of the Board of Directors will continue to be reviewed on a regular basis by the remuneration and nomination committee.


|| |

The Board has considered the independence of each of the Directors and has determined that both Non-executive Directors, including the Chairman, are independent.

In the event that a potential conflict of interest may arise, involved Directors withdraw from deliberations concerning the matter.

The Directors of the Company in office at the date of this statement are:

Mr. Geoffrey Charles Wild AM (Non-executive Chairman)Mr. Richard Edward Bradley (Managing Director and CEO)Mr. Graham Richard Libbesson (Non-executive Director)Mr. Stuart Matthew Clark (Finance Director)Mr. Cameron Arthur Brown (Sales & Marketing Director)Mr. Andrew Jake Roberts (Client Services Director)

The skills and experience of each of these Directors is set out in the accompanying Directors’ report. Two of the six Directors are Non-executive, including the Chairman, and the roles of Chairman and Chief Executive are not exercised by the same individual.

At the date of this statement, the remuneration and nomination sub-committee consists of the Chairman, Mr. Geoffrey C Wild AM and Mr. Graham R Libbesson, both Non-executive Directors. Mr. Wild is Chairman of the remuneration and nomination sub-committee.

The audit sub-committee established by the company currently also consists of the two Non-executive Directors: Mr. Geoffrey C Wild AM and Mr. Graham R Libbesson. Mr. Libbesson acts as Chairman of the audit sub-committee. The Managing Director, the Finance Director and external Auditors are invited to attend meetings from time to time. The audit sub-committee meets at least twice a year. Particulars of committee meetings held during the year ended 31 December 2009 and the attendance of each committee member is set out in the accompanying Directors’ report.

The dates on which each Director was appointed and last re-elected are as follows:

Director Appointed Last re-elected

Mr. Geoffrey Charles Wild AM 25 October 1999 21 May 2008Mr. Richard Edward Bradley 2 September 1976 Managing Director – N/AMr. Graham Richard Libbesson 27 June 2007 26 May 2009Mr. Stuart Matthew Clark 23 November 2007 26 May 2009Mr. Cameron Arthur Brown (Note 1) 12 December 2007 21 May 2008Mr. Andrew Jake Roberts (Note 1) 21 May 2008 N/A

Note 1: Mr. Andrew J Roberts and Mr. Cameron A Brown are standing for re-election at the 2010 annual general meeting to be held on 20 May 2010 to comply with the requirement under the Constitution that one-third of Directors must retire at each annual general meeting.

Code of ConductBoard members, Executive management and Company Officers are made aware of the requirements to follow corporate policies and procedures, to obey the law and to maintain appropriate standards of honesty and integrity at all times. In this regard the Directors have adopted a code of conduct for Directors, senior Executives and employees which “inter alia” deals with compliance with legal and other obligations to legitimate stakeholders. More specifically, the code of conduct covers ethical operations, compliance with laws, dealings with customers and public officials, conflicts of interest, confidential and proprietary information and insider trading. The code of conduct underpins the formal charter and all policies of the Company. A copy of the code is available on the Company website under Investors in the Corporate section.

56|| |

SECURITIES EXCHANGE INFORMATION Statement of quoted securities as at 31 March 2010

• There are 582 shareholders holding a total of 115,995,085 ordinary fully paid shares.• The 20 largest shareholders between them hold 71.84% of the total issued capital of the Company.• Voting rights are that on a show of hands. Each member present in person or by proxy or attorney or representative shall have one vote and upon a poll every member so present shall have one vote for every share held.

Distribution of securities as at 31 March 2010 Range Number of Holders

1 - 1,000 32 1,001 - 5,000 182 5,001 - 10,000 109 10,001 - 100,000 166 100,001 - and over 93 Total holders 582

There are 169 shareholders holding less than a marketable parcel of 4,546 shares at the market price of $0.11 per share.

Substantial shareholdings as at 31 March 2010The following shareholders have notified the Company that they are substantial shareholders. Substantial shareholder Total relevant interest notified % of total issued capital

R E Bradley 36,328,504 shares 31.32% A J Roberts 15,031,921 shares 12.96% Moat Investments Pty Ltd 6,682,850 shares 5.76%

Directors’ shareholdingsAs at 31 March 2010 directors of the Company held a relevant interest in the following shares and options in the Company. Director Shares Options

Richard E Bradley 36,328,504 nil Andrew J Roberts 15,031,921 nil Geoffrey C Wild AM 305,000 nil Cameron A Brown 243,000 nil Graham Libbesson 250,000 200,000

Audit committeeThe Company has a formally constituted audit committee.

On-market buy backsAt the date of this report there was no on-market buy-back scheme in relation to the Company’s shares either current or proposed.

Top twenty shareholders at 31 March 2010 Shareholder name & ranking Number of shares held % of total 1. Mr R E Bradley 35,520,000 30.62 2. Mr Andrew Roberts 15,031,921 12.96 3. Moat Investments Pty Ltd 6,682,850 5.76 4. Citicorp Nominees Pty Limited 4,700,000 4.05 5. J P Morgan Nominees Australia Limited 2,492,525 2.15 6. Habena Pty Ltd (Spencer Super Fund a/c) 1,969,080 1.70 7. Michael J Bowman & Sue E Bowman (Bowman s/f) 1,833,384 1.58 8. Carnethy Evergreen Pty Ltd (Carnethy Evergreen Fund a/c) 1,575,000 1.36 9. HSBC Custody Nominees (Australia) Limited 1,435,000 1.24 10. David Oakley 1,375,000 1.19 11. Ms Kathryn Emma Donaldson 1,250,000 1.08 12. Equity Trustees Ltd (SGH Micro Cap Trust a/c) 1,250,000 1.08 13. G D Moran & G R G Moran (Moran Financial Services s/f) 1,210,000 1.04 14. P J Walker & L Walker (Walker s/f) 1,100,051 0.95 15. Mr T J Hartigan & Mrs F Hartigan (The Hartigan Super Fund a/c) 1,100,000 0.94 16. Reef Securities Limited 1,000,000 0.86 17. Mr Barry Laurence Smith 1,000,000 0.86 18. Dr John Pagliaro 950,000 0.82 19. ANZ Nominees Limited (Cash Income a/c) 940,475 0.81 20. BA & JP Management Services Pty Ltd 916,718 0.79

Total held by top 20 shareholders 83,332,004 71.84

|| |

comops limited annual report 2009

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