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ANNUAL REPORT

2008

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ANNUAL REPORT

2008

At every level, ISIS is committed to minimising our impact on the environment. This includes partnering with organisations that have best practice sustainability processes.

This report is printed by Vega Press, a Forest Stewardship Council – Chain of Custody and ISO 14001:2004 Environmental Management Systems certified printer, utilising waste minimisation, water saving and recycling processes, soy based inks, energy efficient power systems and digital processes to replace chemical processing. The majority of the report is printed on Ecostar, an environmentally certified 100% recycled paper.

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CHAIRMAN’S & MANAGING DIRECTOR’S REPORT

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SAFETY: OUR F1RST PRIORITY

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REBRANDING ISIS FOR FUTURE GROWTH

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THE POWER OF SIX

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NEW TO ISIS: SCIENCE AND HEALTHCARE

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ISIS PROJECTS CASE STUDY

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ISIS HOTEL PROJECTS CASE STUDY

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ISIS RETAIL PROJECTS CASE STUDY

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ISIS SCIENCE AND HEALTHCARE CASE STUDY

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BUILDING OUR PEOPLE

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LEADING THE WAY FOR THE COMMUNITY

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SETTING THE STANDARD FOR GREEN BUILDING

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FINANCIAL PERFORMANCE

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FINANCIAL STATEMENTS

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DIRECTORY

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CHAIRMAN’S & MANAGING DIRECTOR’S REPORT The 2008 financial year has seen ISIS continue to enjoy the growth that comes with our strong fundamentals and a sound business strategy. We have built on our leadership position in fitout and refurbishment and the scope of our operations continues to grow nationally. We expect to do well because we have consistently put a great deal of thought and effort into how ISIS can develop in a sustainable way over time. The current year’s results are an affirmation that we are doing things the right way, not just for our clients but also for our own people and the wider community. What follows is a snapshot of where we are currently and some exciting news about where we’re heading. In 2007 – 2008, the Group achieved outstanding results across all parts of the business. Our combined revenue of $339 million and profit of $15.1 million before tax and share schemes puts another record year on the board for us. As of June 30, 2008, our cash at bank figure sits at $67.8 million. All of this puts us in excellent shape to push forward. It’s also worth mentioning another very important number. We have increased our ranks at ISIS and now have 370 people across Australia.

It’s been another year of managed growth for the Group.

forthcoming year is to raise our profile and open even more doors.

TAKING THE NEXT STEP Some of the project highlights included the new Virgin Airlines Head Office in Brisbane and the Sofitel Wentworth refurbishment in Sydney. These high-profile projects are also underpinned by ongoing work for clients such as National Australia Bank, Coles and BHP Billiton. These companies are household names in their own right and we continually gain repeat business from our many satisfied customers.

We look forward to taking the next step with you.

We are already a leader in the industry and we have been consistently and effectively building momentum for ISIS. However, when we speak to industry decision-makers, there is often a view that contractors are largely the same and price tends to be the major differentiator. We see things quite differently and a major initiative for the near future is to communicate the unique strengths and values that ISIS brings to the table. This year, it’s the ideal time to capitalise on our hard work. We’ve taken inspiration from the many successful businesses that we work alongside. Our goal for the

A YEAR OF ACHIEVEMENTS Apart from our strong financial achievements, the past year has also seen ISIS continue to develop our people and processes. At ISIS, we have always put a premium on safety and our efforts this year reflect our ongoing commitment to the wellbeing of our own people, our contractors and our clients. Whether you work for us or work with us, we have the same attitude – we care about your safety. Over the year, we have deliberately grown the awareness of safety in the company and our ‘SAFETY F1RST’ conference was just one of many ways we have made it clear that safety is our number one priority. Our manager for OHS&E has ensured that every new starter and current employee has undergone thorough training and immersion in our unique approach to safety. We have developed industry-leading electrical procedures and have also achieved full Federal Safety Commissioner Accreditation.

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We are great believers in ISIS being only as good as its people and have actively sought and gained extensive feedback about the employment experience at ISIS. Our continuous improvement programmes allow our employees to lead, not just in the workplace but also through all aspects of their lives. We have also commenced an Executive Development programme for all senior managers to focus on self -awareness, communication skills and interpersonal relationships. We welcome and look forward to working with our two incoming non-executive directors, Richard Clarke and Peter Cribb. Finally, we have recently farewelled two non-executive directors that have each given twelve years distinguished service to ISIS, Leo Browne and John Pagett. It’s appropriate we thank them here again for their contribution. CAPITALISING ON OUR POTENTIAL It’s estimated that the market for fitout and refurbishment in Australia is around $10 billion. That represents some serious potential. Improving our market penetration and market share will mean that we need to boost our profile and develop ISIS as a well-recognised brand. Many of

our clients are unaware that we are a national company and when this fact is raised, they are surprised to learn that we’re successful throughout Australia. That’s a perception we need to change. We are currently undertaking a rebranding process that will create greater clarity and awareness about the capabilities, strengths and unique characteristics of ISIS. Whereas our work has spoken for us in the past, we are at a point where we need to communicate our name with greater consistency and personality wherever we go. We have commissioned Landor, a global brand consultancy, to assist us with this project. We have outlined some of our plans within this report for making ISIS a more recognised brand. MORE INITIATIVES The coming financial year will see the establishment of another specialist subsidiary, ISIS Science and Healthcare. This is a substantial market and we have made it a priority to focus on this sector. Tass Roufos, who was our Victorian State Manager, will head-up the newest of our niche businesses. We have also been busy building our internal corporate capacity over

the past year. Gerard McMahon, one of the ISIS founders, has taken up the newly created position of Chief Operating Officer. Gerard has built an impressive team covering a number of disciplines including Safety and Environment, Site Excellence, Systems and Procedures, Marketing and Communications, Risk Assurance and People Strategies. This team of dedicated and talented professionals brings another real point of difference to our marketplace offering. With sound fundamentals in place and some exciting developments happening across all aspects of the business, we are clearly positioned to advance at a very strong rate. We have the right people in place and with our unique skills and exceptional culture; ISIS is looking forward to the future in a very positive way.

Phil Anderson Chairman

Michael Barnes Managing Director

Virgin Blue Airlines

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SAFETY: OUR F RST PRIORITY

At ISIS, we have drawn a clear line in the sand regarding safety. We want to have a perfect record. Nothing is more important to us as an organisation than safety. Working safely is a condition of employment at ISIS, whether you’re on site or in the office or somewhere in between. While the construction industry can be inherently dangerous, we believe that with the right message from the top, the right workplace practices and the right education, we can lead our industry by having a safety culture that works. Our view is simple: no job at ISIS is more important than the safety of our people and their workmates. Of course, that extends to the many subcontractors we work with.

We had close to 300 attendees at our SAFETY F1RST Conference and we know that all of them walked away in no doubt that we are absolutely determined to make great headway in this area. We also began a reward and recognition programme. ISIS understands that one of the keys to changing behaviour is positive reinforcement for those doing the right thing. From site signage to reporting, through to termination of contractors who don’t meet our standards – at every conceivable level, we are targeting safety as our first priority, without compromise. It’s just too important to do it any other way.

With this core principle in mind, we’ve initiated a number of programmes that have been specifically designed to put safety first. The 2008 ISIS Conference was an opportunity to reinforce our position as a safety leader and provided the platform for launching our new ‘SAFETY F1RST’ campaign.

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New SAFETY F1RST branding

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REBRANDING ISIS FOR FUTURE GROWTH ISIS is a company with great strengths. It’s also a company with a great story to tell. This year is the time to bring all those strengths together under one banner and tell our story in a new and very positive way.

consultants, we have recently conducted a series of internal and external interviews to determine how the industry, our business partners, prospective clients and our own people currently view us.

We are a dedicated, national company with an extraordinary internal culture. We’re proud of what we have built. Our clients are generous in their praise. At this point in time, the future holds enormous promise.

Through this process, the brand promise of ‘Transformation at work’ has been developed for ISIS. This essence of the ISIS brand gives us a valuable point of difference and refers to not only transformation within the business itself, but also to the transformation ISIS creates for each of it’s client’s projects and their delivery.

Importantly, we know who we are and what we stand for. Put simply, we are a company that believes in the power of transformation. It’s what we do for our customers. It’s how we want the world to see us. It’s our story. Getting our brand to tell that story in a new and meaningful way is something that we are about to embark on. The reason for rebranding ISIS isn’t about changing our logo. It’s more than that. It’s about telling the world that we’re serious about taking the business to the next stage. It’s about improving the way we do things. It’s also about the way we see ourselves. In collaboration with Landor Associates, our appointed brand

also providing the ability to grow, change and adapt into the future. By rebranding, we will be able to build greater awareness of ISIS nationally to ensure that we become a clear first choice in commercial property solutions. It’s our intention for ISIS to become a market leader that opens doors to new opportunities. And just as importantly, we want to be recognised as a brand that is special, fun to work for and fun to work with.

Our brand beliefs of integrity, character, excellence and intelligence are a true reflection of what makes ISIS unique. These are the values we live by and they determine the way we do business as well as the way we communicate. The new corporate identity has been developed to reference the company’s past and help articulate our ambitions for the future. The newly developed mark functions as a window into infinite possibilities, revealing an array of images that best represent the new direction. It intentionally focuses on challenging individual expectations whilst

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THE POWER OF SIX 1

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With the rebranding underway, we have the opportunity to present ourselves to the market with greater force - with a clear promise, a defined set of beliefs, a way to differentiate ISIS in the market and a consistent visual expression. This is not about restructuring the business, it’s about making the business more effective by sharpening the way we communicate what we do.

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This means that we can successfully bring our collective intellectual property, our independent board and our industry intelligence to whatever we choose to do. As a company with a national footprint, we have the scale to tackle the biggest jobs. We also have an enviable

1. 2. 3. 4. 5. 6. 5

array of specialists in property and construction that gives us the ability to dig deep into detail and find the best local solutions. In effect, the benefit will be increasing ISIS to the power of six. The combination of ISIS Group Holdings and its subsidiaries – ISIS Projects, ISIS Hotel Projects, ISIS Retail Projects, ISIS Development Projects and ISIS Science and Healthcare – gives the brand a multiplier effect. By communicating the power of our collective intellectual property, we can make the most of our expertise, experience and history and bring our beliefs to life at each point of contact.

Artist’s Impression, Hornsby Development Members Equity Bank, Melbourne Operating Theatre, St. George Private Hospital Country Road, Melbourne Virgin Blue Head Office, Brisbane Sofitel, Brisbane

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NEW TO ISIS: SCIENCE AND HEALTHCARE

One of our most exciting developments for the coming year is the launch of our new Science and Healthcare subsidiary. This key strategic development will help ISIS expand our capabilities into this new specialist market. The ISIS Science and Healthcare subsidiary will develop procurement models and strategies for health and science facilities including hospitals, universities, research and laboratory style projects.

“This new market offers ISIS many opportunities to continue our growth�

This new market offers ISIS many opportunities to continue our growth while increasing our breadth of expertise in delivering best practice outcomes. Although this is a new subsidiary, we have already undertaken significant hospital refurbishments and laboratory fitouts nationally worth in excess of $40 million.

St. George Private Hospital 12 14

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ISIS PROJECTS CASE STUDY

VIRGIN BLUE AIRLINES

Virgin Blue Airlines grew tremendously over the last five years and needed to centralise their offices that were located across multiple premises in Brisbane. As future expansion was likely, flexibility was high on their agenda. The communication from Virgin was to create a dynamic, contemporary warehouse feel, providing a relaxed and spacious environment. To transform the space, we needed to bring the ideas of the designer to life. Throughout the process we were aware that a workplace is as much a reflection of a brand as its product. In the case of Virgin, we knew we had a distinctive and well-known brand that we could tap into. We set about building a visual dynamic that communicates the essence of the brand to its most important audience - the people who work for it. The process of creating their new offices was not just about delivering flexible workstations, more breakout areas, more space and more rationalised management of the office. Equally, it was also about forming a horizontal community with a sense of connectedness. It was also about empowerment. Within the space, desk configurations can be altered. Teams can set up their workplace to suit their needs. Workstations can be broken or linked as required. The huge floor space allows separate yet connected areas. And of course, there’s one final thing we’ve built into this space - inspiration. Virgin Blue Airlines 14

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ISIS HOTEL PROJECTS CASE STUDY

SOFITEL, BRISBANE

Sofitel Brisbane is a place of refined elegance and truly personalised service. Renowned for its imposing arrival space and breathtaking views, the hotel’s reputation as the leading choice in five star accommodation is absolutely deserved. The client called for the refurbishment of the existing lobby, reception and public amenities as well as the creation of new interactive dining experiences across three of the hotel’s facilities. This required a discrete transformation within a working hotel to the highest standards. The work was completed in stages to minimise disruption and allow the hotel to operate at the level its guests expected. Tight timeframes were a challenge but were readily met by identifying any issues and dealing with them efficiently. The scope of the project was amended a number of times, yet our experience and ability to “value-engineer” meant the initial budget was successfully met. The project has resulted in a new face for Sofitel Brisbane, with a unique and inspiring, fully integrated public space and dining experience. Much to our delight and to everyone’s credit the project recently received the MBA Queensland Award for Best Refurbishment/Renovation Project.

Sofitel 16

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ISIS RETAIL PROJECTS CASE STUDY

MEMBERS EQUITY BANK

As far as banks go, Members Equity is decidedly different. They have built their on-going success on a service-oriented online platform. The communication to ISIS was to reflect this in creating their first physical banking facilities in Queen Street, Melbourne. Engaging, approachable and friendly was the brief to the designer as these were the qualities that Members Equity Bank wanted their customers to experience. The transformation of a long and narrow space into a professional yet comfortable service centre began with the idea that banking has become much less intimidating. Today’s bank users are in the driver’s seat. They expect information, quality service and a relaxed environment to discuss their needs. The design created an open plan customer service area for informal discussions at the front as well as private spaces for clients to review their finances. Turquoise and blue graphics underpin the Members Equity brand and were carefully integrated into the overall design. As a prototype, this will serve as the inspiration for future branches. The design has been well received by both staff and customers. Its untraditional style should establish the tradition for Members Equity Bank into the future.

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ISIS SCIENCE AND HEALTHCARE CASE STUDY

OPERATING THEATRE 12, ST. GEORGE PRIVATE HOSPITAL

Clinical and efficient, these were the key words that drove the installation of an additional operating theatre within a working hospital environment. Where once there was a storeroom, now there is a fully operational, state-of-the-art medical facility. As part of Ramsay Health Care, St. George Private Hospital is one of the most modern, high technology private hospitals in the country, providing exceptional levels of care for Sydney patients. A major requirement was to complete the refurbishment without causing any disruptions to the working needs of a busy medical facility, and we were able to accomplish this successfully. Our idea was to be as well prepared as a surgeon about to commence a major operation. The transformation took an existing under-utilised space and created an operating theatre with Australia’s most advanced technology that included a new dedicated air-conditioning system, medical gases, pendant installation and radiation protective walls Inspired by our attention to detail and the fact that we had successfully completed the project within such a tight timeframe, the client has now engaged us to build two new theatres and refurbish a further five.

St. George Private Hospital 20 23

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BUILDING OUR PEOPLE

While a lot of what we build involves glass, steel and wood, the most important thing we build at ISIS is people. It’s always been our philosophy that all ISIS employees should progress through our company to become better people than when they joined us. We don’t just mean with better job skills. Our investment in people is one of the most important investments we make. We have a unique culture at ISIS and we’re proud of it. Part of this comes from our brand beliefs of character, integrity, intelligence and excellence. Our brand promise of transformation at work ensures that our employees work for a company that respects and looks after its people.

that ensure our unique culture stays in place and that every new employee has the opportunity to experience the best possible workplace conditions. Our People Strategies area has expanded over the past financial year to cover a growing range of initiatives that make working for ISIS much more than just a job. We offer staff equity and profit sharing programmes so that all ISIS employees can share in the successes that are generated by their hard work. We encourage all staff to take personal responsibility for the company’s performance and in this way, every decision is taken in an ownership capacity. We also encourage our people to plan for their future through our Super Support Programme. For members of our superannuation scheme, the company pays life insurance and salary continuance premiums.

We strongly believe that we give our employees every chance to make a positive and lasting impact. And not just to the bottom line. So while we are committed to being the best in the business and we have a focus on high performance, that doesn’t outweigh the human side of doing business.

We have also initiated a savings assistance programme for our people. This can be used to repay HECS debts, for example.

Our workforce has now grown to 370 people. While we continue to grow, we have implemented plans

In the last financial year, we have increased the scope of our parental leave benefits. Getting the balance

right between work and family is something that we play an active part in and by recognising the importance of family within the workplace, we are actually building a healthier community. Training is a vital area of ongoing activity for ISIS. We have our own business school and while we offer a full list of industry-related courses, we include technical and skillsbased training such as presentation skills and advanced leadership development. On the subject of training, our new employees always enjoy the fact that the CEO and the COO personally deliver induction training. Of the many achievements this year, we rate our ability to support and grow our people while we continue to build for the future as one of our most significant strengths.

ISIS People: Left to right Michael Nizik Scott Jamieson Paul Hofierka

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LEADING THE WAY FOR THE COMMUNITY “Over the last year, we have also raised over $250,000 for the Bone Growth Foundation.”

Our success as a business means much more than industry awards and financial results. We have impeccably high standards of social, ethical and environmental behaviour. Integral to our company’s culture is the idea that we have a responsibility to lead the way when it comes to corporate citizenship. Each of our state offices has nominated a charitable beneficiary. These include the Cancer Council, Canteen, the Princess Margaret Hospital in Perth, Camp Quality, the Association for the Blind, the Leukaemia Foundation, Variety WA and the Starlight Foundation. Over the last year, we have also raised over $250,000 for the Bone Growth Foundation. This has primarily been through our commitment to the Bone Growth Foundation Tennis Challenge at Vodafone Arena in Melbourne

and the NSW State Charity Golf Day. With the participation of international tennis stars, local celebrities and other supporters, we were able to extend the awareness of how the Bone Growth Foundation has made it possible for patients with crippling growth problems to grow up straight and strong and lead a normal life. This year, ISIS will host the fifth annual Bone Growth Foundation Gala Dinner at Melbourne Docklands, giving participants the chance to assist with a great cause. From our point of view, we’re happy to lead the way in growing something more than just a profitable business. In addition to all these charities, we also assist numerous community and sporting organisations across Australia.

Bone Growth Foundation mother and patient 25

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SETTING THE STANDARD FOR GREEN BUILDING

Interiors

Given the nature of our business, ISIS is a company that has the potential to have an enormous impact on the environment. It is an essential part of our corporate charter that we tread lightly wherever we go. Not only as part of what we do for others in a commercial sense, but also in the way we house our people. ISIS is a founding member of the Green Building Council of Australia and our leadership in the field of environmentally sensitive building practices stretches back a long way. Practicing what we preach is of vital importance to us, particularly as we know that greener workplaces are a major contributor to staff wellbeing and morale. Our commitment to environmental sustainability is a measurable one. ISIS has achieved accreditation for our systems and reporting through ISO 14001, the world’s environmental management standard. To date, we have completed many projects that are targeting or have achieved Green Star accreditation.

ACC (Australian Crime Commission)

This gives us confidence going forward that our environmental principles will not be compromised as we continue to grow. In fact, we are targeting 5 Green Star certification for our offices Australia-wide.

Completed in May 2007, our Sydney office is a model of smart, sustainable design. The ISIS Sydney office has already been shortlisted and featured in the final six projects in the Environmentally Sustainable Design category of the Interior Design Awards for 2008. Our commitment to environmental sustainability across our national network has seen us recently achieve a 5 Star Green rating for the ISIS Sydney office fitout. Environmentally friendly ideas included the removal of part of the façade to create a balcony area that gives our people convenient access to an outside area. All plasterboard was replaced with a recyclable product. We also specified and sourced recycled Spotted Gum timber from a demolished bridge in Queensland. Even our people are green. We encourage our staff to become Green Star professionals. ISIS have a number of Green Star accredited professionals across our national offices. We have also hosted Green Star training in ISIS offices. From the world’s best processes to the choice of light globes, everything plays a part in ensuring that ISIS sets the standards for green building. 27

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FINANCIAL PERFORMANCE 5

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EQUITY & PROFIT SHARE PLAN EMPLOYEE CUMULATIVE BENEFITS

NET PROFIT BEFORE TAX 15

3

($Millions)

($Millions)

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2

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1

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ISIS SHARES AT VALUATION

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2006

SALARY BONUS

2007

2008

2002

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ISIS DIVIDENDS

80 70

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350

CASH

REVENUE

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250 ($Millions)

($Millions)

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200 150

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2002

+ P rofit Before Tax increased to $15.0 million

+C  ash at 30 June 2008 increased to $67.8 million

+ E mployee Share Plan pool for 2008: $753,000

+V  alue of work in hand at 30 June 2008: $169 million

+ Total Assets increased to $115.3 million

+D  ividends paid increased to $8.3 million

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AUDITOR’S INDEPENDENCE DECLARATION

DIRECTORS’ REPORT

ISIS GROUP HOLDINGS PTY LIMITED ABN: 93 008 656 264 AND CONTROLLED ENTITIES

ISIS GROUP HOLDINGS PTY LIMITED ABN: 93 008 656 264 AND CONTROLLED ENTITIES AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF ISIS GROUP HOLDINGS PTY LIMITED

Your directors present their report on the company and its controlled entities for the financial year ended 30 June 2008. The names of the directors in office at any time during, or since the end of, the year are: P Anderson M Barnes R Clarke R Harrington G McMahon A Robertson J Sloman S Vegter

Non-Executive Chairman Executive Director Non-Executive Director (31 January 2008) Non-Executive Director Executive Director Executive Director Non-Executive Director Non-Executive Director (29 May 2008) (alternate for R Harrington)

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. The consolidated profit of the consolidated group for the financial year after providing for income tax amounted to $9,912,050. A review of the operations of the consolidated group during the financial year and the results of those operations found that the changes in market demand and competition have seen an increase in construction revenue of 38% to $334,898,747. The increase in construction revenue has contributed to an increase in the consolidated group’s operating profit before tax. No significant changes in the consolidated group’s state of affairs occurred during the financial year. The principal activities of the consolidated group during the financial year was the post-construction fitout, refurbishment and development of commercial properties. No significant change in the nature of these activities occurred during the year. No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the consolidated group, the results of those operations, or the state of affairs of the consolidated group in future financial years. Likely developments in the operations of the consolidated group and the expected results of those operations in future financial years have not been included in this report as the inclusion of such information is likely to result in unreasonable prejudice to the consolidated group. The consolidated group’s operations are regulated by Commonwealth, State and Territorial environmental regulations. The consolidated group complies with all relevant legislation. Dividends paid or declared since the start of the financial year are as follows:  ully franked dividends totalling $8,295,497 were declared and F paid during the year

No options over issued shares or interests in the company or a controlled entity were granted during or since the end of the financial year and there were no options outstanding at the date of this report. No indemnities have been given or insurance premiums paid, during or since the end of the financial year, for any person who is or has been an officer or auditor of the economic entity other than: (a) indemnities by way of deed to officers and former officers for:

(i) liability arising as a result of being an officer of the economic entity; and

(ii) legal costs and expenses incurred in defending such claims in each case limited to the extent required by the Corporations Act.

(b) a premium to insure all directors and officers of the economic entity against liabilities for costs and expenses incurred by them in defending and legal proceedings arising out of their conduct while acting in the capacity of director or officer, other than conduct involving a wilful breach of duty in relation to the company. No person has applied for leave of Court to bring proceedings on behalf of the group or intervene in any proceedings to which the group is a party for the purpose of taking responsibility on behalf of the group for all or any part of those proceedings. The company was not a party to any such proceedings during the year. Auditor’s Independence Declaration A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 31. Signed in accordance with a resolution of the Board of Directors:

I declare that, to the best of my knowledge and belief, during the year ended 30 June 2008 there have been: (i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and (ii) no contraventions of any applicable code of professional conduct in relation to the audit.

Moore Stephens Chartered Accountants

Ivan Shapiro Partner Melbourne Dated this 28th day of August 2008

DIRECTORS’ DECLARATION

ISIS GROUP HOLDINGS PTY LIMITED ABN: 93 008 656 264 AND CONTROLLED ENTITIES

The directors of the company declare that: 1. The financial statements and notes, as set out on pages 33 to 51, are in accordance with the Corporations Act 2001: (a) comply with Accounting Standards and the Corporations Regulations 2001; and (b) give a true and fair view of the financial position as at 30 June 2008 and of the performance for the year ended on that date of the company and consolidated group.

P Anderson Director

M Barnes Director

Dated this 28th day of August 2008

2. 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.  his declaration is made in accordance with a resolution of the T Board of Directors.

P Anderson Director

M Barnes Director

Dated this 28th day of August 2008

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INDEPENDENT AUDITOR’S REPORT ISIS GROUP HOLDINGS PTY LIMITED 93 008 656 264 AND CONTROLLED ENTITIES INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ISIS GROUP HOLDINGS PTY LIMITED

INCOME STATEMENT

ISIS GROUP HOLDINGS PTY LIMITED ABN: 93 008 656 264 AND CONTROLLED ENTITIES INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2008

Report on the Financial Report We have audited the accompanying financial report of ISIS Group Holdings Pty Limited and controlled entities, which comprises the balance sheet as at 30 June 2008, and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies and other explanatory notes and the directors’ declaration of the consolidated entity comprising the company and the entity 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 (IFRSs) ensures that the financial report, comprising the financial statements and notes, complies with IFRS. 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 opinion.

Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, provided to the directors of ISIS Group Holdings Pty Limited on 28 August 2008, would be in the same terms if provided to the directors as at the date of this auditor’s report. Basis for Qualified Auditor’s Opinion The financial report of ISIS Group Holdings Pty Limited and controlled entities as at 30 June 2007, was audited by another auditor, Raimond Bazbauers of Forrest Roberts Bazbauers & Kindred, whose report dated 30 August 2007, expressed an unqualified audit opinion on those statements. We were unable to review prior year working papers. Auditor’s Opinion In our opinion, except for the effects of any adjustments as might have been determined to be necessary had we been able to review prior year work papers, the financial report of ISIS Group Holdings Pty Limited and controlled entities is in accordance with the Corporations Act 2001, including: (i) g  iving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2008 and of their performance for the year ended on that date; and (ii) c omplying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001. The financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

MOORE STEPHENS Chartered Accountants

Ivan Shapiro Partner Melbourne Dated this 28th day of August 2008

Revenue Construction Costs Employee benefits expense Tenancy expenses Communication expenses Depreciation and amortisation expenses Finance costs Other expenses Profit before employee profit share Employee profit share Profit before income tax Income tax expense Profit attributable to members of the parent entity Dividends per share (cents)

Note 2

3

4

Consolidated Group 2008 2007 245,006,453 339,018,536 (214,741,035) (296,863,361) (11,131,507) (16,168,365) (1,096,328) (2,430,827) (277,999) (583,183) (904,341) (1,216,032) (32,006) (60,000) (4,591,743) (6,630,459) 12,231,494 15,066,309 (611,619) (753,127) 11,619,875 14,313,182 (3,560,344) (4,401,132) 8,059,531 9,912,050 8.4 10.0

Parent Entity 2008 10,104,707 (25) 10,104,682 (8,062) 10,096,620 (45,854) 10,050,767 10.0

2007 7,992,379 (90) 7,992,289 (2,280) 7,990,009 (12,994) 7,977,015 8.4

Parent Entity 2008

2007

The accompanying notes form part of these financial statements.

BALANCE SHEET

ISIS GROUP HOLDINGS PTY LIMITED ABN: 93 008 656 264 AND CONTROLLED ENTITIES BALANCE SHEET FOR THE YEAR ENDED 30 JUNE 2008

Note ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Other assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Financial assets Plant and equipment Deferred tax assets Intangible assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables Financial liabilities Current tax liabilities TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Long-term provisions TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Retained earnings TOTAL EQUITY

Consolidated Group 2008 2007

8 9 10 11

67,847,072 37,339,988 5,426,078 93,783 110,706,921

57,691,576 14,350,261 4,895,929 76,937,766

3,427,301 426,614 3,853,915

925,579 524,813 1,450,392

13 15 19 16

3,604,660 743,910 217,774 4,566,344 115,273,265

1,868,162 537,051 259,294 2,664,507 79,602,273

7,106,700 743,910 7,850,610 11,704,525

7,106,700 537,051 7,643,751 9,094,143

17 18 19

97,459,635 3,885,000 826,011 102,170,646

64,633,230 3,080,000 986,756 68,699,986

5,332 388,870 826,011 1,220,213

3,269 87,687 986,756 1,077,712

20

102,364 102,364 102,273,010 13,000,255

231,199 231,199 68,931,185 10,671,088

1,220,213 10,484,312

1,077,712 8,016,431

21 22

3,548,991 514,771 8,936,493 13,000,255

2,933,629 417,519 7,319,940 10,671,088

4,063,762 6,420,550 10,484,312

3,351,148 4,665,283 8,016,431

The accompanying notes form part of these financial statements.

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STATEMENT OF CHANGES IN EQUITY ISIS GROUP HOLDINGS PTY LIMITED ABN: 93 008 656 264 AND CONTROLLED ENTITIES STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2008

Note

Ordinary Share Capital

Retained Earnings (Accumulated Losses)

Treasury Share Reserve

Total

2,323,328

6,204,516

328,241

8,856,085

Note

Shares issued during the year

610,301

Profit attributable to members of parent entity

89,278 8,059,531

Sub-total

2,933,629 7

Balance at 30 June 2007

14,264,047 7,319,940

615,362

Profit attributable to members of parent entity

417,519 417,519 97,252

9,912,050

Sub-total

3,548,991 7

Balance at 30 June 2008

17,231,990 8,936,493

Receipts from customers Dividends received Interest received

17,615,195

Payments to suppliers and employees

(6,944,107)

Finance costs

10,671,088

Income tax paid

712,614

514,771

Net cash provided by (used in) operating activities

514,771

21,295,752

26 (a)

Purchase of property, plant and equipment

13,000,255

Purchase of intangibles Purchase of investments Net cash provided by (used in) investing activities

Balance at 1 July 2006

2,651,569

Shares issued during the year

3,632,373

699,579

Profit attributable to members of parent entity

-

6,283,942

-

699,579

-

14,960,536

Proceeds from borrowings

(6,944,107)

Dividends paid

7,977,015

Sub-total

3,351,148 7

Balance at 30 June 2007

11,609,388

7,977,015

(6,944,107) 3,351,148

Shares issued during the year

4,665,281

712,614

Profit attributable to members of parent entity

-

8,016,431

-

712,614

10,050,767

Sub-total Balance at 30 June 2008

2007

2008

2007

315,510,408

246,773,166

-

-

4,063,762 7

14,716,047

-

(8,295,497) 4,063,762

6,420,550

-

-

9,943,445

7,946,695

3,556,303

2,274,904

161,262

45,684

(294,393,586)

(229,814,674)

(6,026)

(2,476)

(60,000)

(32,006)

-

-

(4,768,736)

(3,537,134)

(14,076)

(18,946)

19,844,389

15,664,256

10,084,605

7,970,957

(2,779,010)

(993,022)

-

-

(132,000)

(56,266)

-

-

CASH FLOWS FROM INVESTING ACTIVITIES

(8,295,497)

Parent Entity

Dividends paid or provided for

2008

9,912,050

(8,295,497) 3,548,991

699,579 8,059,531

(6,944,107) 2,933,629

Shares issued during the year

Dividends paid or provided for

Parent Entity

CASH FLOWS FROM OPERATING ACTIVITIES

Balance at 1 July 2006

Dividends paid or provided for

ISIS GROUP HOLDINGS PTY LIMITED ABN: 93 008 656 264 AND CONTROLLED ENTITIES CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2008

Consolidated Group

Consolidated Group

Dividends paid or provided for

CASHFLOW STATEMENT

-

-

-

(2,000,000)

(2,911,010)

(1,049,288)

-

(2,000,000)

712,614

699,579

712,614

699,579

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares

805,000

3,080,000

-

-

(8,295,497)

(6,944,107)

(8,295,497)

(6,944,107)

Net cash provided by (used in) financing activities

(6,777,883)

(3,164,528)

(7,582,883)

(6,244,528)

Net increase (decrease) in cash held

10,155,496

11,450,440

2,501,722

(273,571)

10,050,767

Cash at beginning of financial year

57,691,576

46,241,136

925,579

1,199,150

18,779,811

Cash at end of financial year

67,847,072

57,691,576

3,427,301

925,579

8

(8,295,497) -

10,484,312

The accompanying notes form part of these financial statements.

The accompanying notes form part of these financial statements.

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NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

1. Statement of Significant Accounting Policies This financial report includes the consolidated financial statements and notes of ISIS Group Holdings Pty Limited and controlled entities (‘Consolidated Group’ or ‘Group’), and the separate financial statements and notes of ISIS Group Holdings Pty Limited as an individual parent entity (‘Parent Entity’).

The tax consolidated group has entered a tax funding arrangement whereby each company in the group contributes to the income tax payable by the group in proportion to their contribution to the group’s taxable income. Differences between the amounts of net tax assets and liabilities derecognised and the net amounts recognised pursuant to the funding arrangement are recognised as an inter-company loan balance.

ISIS GROUP HOLDINGS PTY LIMITED ABN: 93 008 656 264 AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

Basis of Preparation The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions to which they apply. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below. They have been consistently applied unless otherwise stated. The financial report has been prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. (a) P  rinciples of Consolidation A controlled entity is any entity over which ISIS Group Holdings Pty Limited has the power to govern the financial and operating policies so as to obtain benefits from its activities. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are considered. A list of controlled entities is contained in Note 14 to the financial statements. As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the consolidated financial statements as well as their results for the year then ended. All inter-group balances and transactions between entities in the consolidated group, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity. (b) Income Tax The income tax expense for the year comprises current income tax expense and deferred tax expense. Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities are therefore measured at the amounts expected to be paid to the relevant taxation authority. Deferred income tax expense reflects movements in deferred

tax asset and deferred tax liability balances during the year as well as unused tax losses. Current and deferred income tax expense is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity. Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised. Where temporary differences exist in relation to investments in subsidiaries, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future. Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled. Tax consolidation ISIS Group Holdings Pty Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under tax consolidation legislation. Each entity in the group recognises its own current and deferred tax assets and liabilities. Such taxes are measured using the ‘stand-alone taxpayer’ approach to allocation. Current tax liabilities and deferred tax assets arising from unused tax losses and tax credits in the subsidiaries are immediately transferred to the head entity. The group notified the Australian Tax Office that it had formed an income tax consolidated group to apply from 1 July 2003.

ISIS GROUP HOLDINGS PTY LIMITED ABN: 93 008 656 264 AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

(c) Inventories Inventories are measured at the lower of cost and net realisable value. (d) Land for Sale Land held for development and sale is valued at the lower of cost and net realisable value. Cost includes the cost of acquisition, development, borrowing costs and holding costs until completion of development. Borrowing costs and holding charges incurred after development is completed, are expensed. Profits are brought to account on the signing of an unconditional contract of sale. (e) Construction Contracts and Project Receivables/Prepayments Project Receivables/Prepayments are valued in accordance with the following formula: Contract costs incurred to balance date plus project margin to balance date less contract payments received to balance date. Construction revenue has been recognised on a percentage completion basis using the proportion of costs incurred to date as compared to expected actual costs in accordance with the terms of the contract adjusted for any variations or claims allowable under the contract; except where it has been determined by the directors that for specific contracts this method is either misleading and not a true reflection of percentage stage completion. In such instances, revenue for the specific contract will be recognised at the stage of completion of a physical proportion of the contract work. Construction costs are recognised as an expense in the income statement in the reporting period in which the work to which they relate is performed.

Where losses are anticipated they are provided for in full.

(f) Trade Receivables Trade receivables are recognised intially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Trade receivables are generally due for settlement within 30 days. Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off by reducing the carrying amount directly. An allowance account (provision for impairment of trade receivables) is used when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy of financial reorganisation, and default of delinquency in payments (more than 30 days overdue) are considered indicators that the

trade receivable is impaired. The amount of the impairment allowance is the difference between asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial. The amount of the impairment loss is recognised in the income statement within other expenses. When a trade receivable for which an impairment allowance had been recognised becomes uncollectable in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in the income statement. (g) Property, Plant and Equipment Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses. Plant and equipment Plant and equipment are measured on the cost basis less depreciation and impairment losses. The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. The cost of fixed assets constructed within the consolidated group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. Depreciation The depreciable amount of all plant and equipment is depreciated on a straight line basis over the asset’s useful life to the consolidated group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. The depreciation rates used for each class of depreciable assets are: Class of fixed asset Depreciation rate Plant and equipment 20% - 33% The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

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NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

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

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

ISIS GROUP HOLDINGS PTY LIMITED ABN: 93 008 656 264 AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in the income statement. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings. (h) Leases Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred. Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term. (i) Financial Instruments Recognition and initial measurement Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity becomes a party to the contractual provisions of the instrument. Financial instruments are initially measured at fair value plus transactions costs where the instrument is not classified as at fair value through profit or loss. Transaction costs related to instruments classified as at fair value through profit or loss are expensed to profit or loss immediately. Financial instruments are classified and measured as set out below. Derecognition Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expire. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed is recognised in profit or loss. Classification and subsequent measurement (i) Loans and receivables  Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost using the effective interest rate method. (ii) Available-for-sale financial assets  A  vailable-for-sale financial assets are non-derivative financial assets that are either designated as such or that are not classified in any of the other categories. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments.

(iii) Financial Liabilities Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective interest rate method.

Fair value Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models. Impairment At each reporting date, the group assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in the income statement. (j) Impairment of Assets At each reporting date, the group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the income statement. Impairment testing is performed annually for intangible assets with indefinite lives. Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs. (k) Intangibles Software and licencing Expenditure during the research phase of a project is recognised as an expense when incurred. Software development costs are capitalised only when technical feasibility studies identify that the project will deliver future economic benefits and these benefits can be measured reliably. Software development costs and licences have finite lives and are amortised on a systematic basis matched to the future economic benefits over the useful life of the project. (l) Employee Benefits Provision is made for the company’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. Those cashflows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cashflows.

ISIS GROUP HOLDINGS PTY LIMITED ABN: 93 008 656 264 AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

(n) Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet. (o) Revenue and Other Income Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed. Any consideration deferred is treated as the provision of finance and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount ultimately received is interest revenue. Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets is the rate inherent in the instrument. Dividend revenue is recognised when the right to receive a dividend has been established. Revenue relating to construction activities is detailed at Note 1(e). Revenue recognition relating to the provision of services is determined with reference to the stage of completion of the transaction at reporting date and where outcome of the contract can be estimated reliably. Stage of completion is determined with reference to the services performed to date as a percentage of total anticipated services to be performed. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent that related expenditure is recoverable. Where it has been determined by the directors that for specific contracts this method is either misleading and not a true reflection of percentage stage completion, revenue for the specific contract will be recognised at the stage of completion of a physical proportion of the contract work.

not recoverable from the Australian Taxation Office. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST. Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. (r) Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. (s) Critical Accounting Estimates and Judgments The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group. Key estimates — Impairment The group assesses impairment at each reporting date by evaluating conditions specific to the group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates. The financial report was authorised for issue on 28 August 2008 by the board of directors.

All revenue is stated net of the amount of goods and services tax (GST). (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 of sale. All other borrowing costs are recognised in income in the period in which they are incurred. (q) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is

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NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

ISIS GROUP HOLDINGS PTY LIMITED ABN: 93 008 656 264 AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

ISIS GROUP HOLDINGS PTY LIMITED ABN: 93 008 656 264 AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

Consolidated Group Note

2008

2007

2008

2007

Note 2 - Revenue Revenue 334,898,747

242,112,697

-

-

— dividends received

2(a)

-

-

9,943,445

7,946,695

— interest received

2(b)

3,556,303

2,274,904

161,262

45,684

74,622

66,565

-

-

— construction revenue

— rent received

488,864

552,287

-

-

339,018,536

245,006,453

10,104,707

7,992,379

— wholly-owned subsidiaries

-

-

9,943,445

7,946,695

Total dividend revenue

-

-

9,943,445

7,946,695

— other corporations

3,556,303

2,274,904

161,262

45,684

Total interest revenue

3,556,303

2,274,904

161,262

45,684

— other revenue Total revenue

2008 Total compensation (i) 2007 Total compensation (i)

(b) Interest revenue from:

Note 3 - Profit before Income Tax (a) Expenses 296,863,361

214,741,035

-

-

— external

60,000

32,006

-

-

Total finance costs

60,000

32,006

-

-

1,815,953

745,374

-

-

1,815,953

745,374

-

-

4,607,991

3,693,182

45,854

12,994

(206,859)

(132,838)

-

-

4,401,132

3,560,344

45,854

12,994

Finance costs:

Rental expense on operating leases — minimum lease payments Note 4 - Income Tax Expense (a) The components of tax expense comprise: Current tax Deferred tax

19

(b) T  he prima facie tax on profit from ordinary activities before income tax is reconciled to the income tax as follows: Prima facie tax payable on profit from ordinary activities before income tax at 30% (2007: 30%) — consolidated group — parent entity

4,293,955

3,485,961

-

-

-

-

3,028,986

2,397,003

107,422

74,124

-

-

-

259

-

-

4,401,377

3,560,344

3,028,986

2,397,003

245

-

99

-

-

-

2,983,034

2,384,009

4,401,132

3,560,344

45,854

12,994

30.7%

30.6%

0.5%

0.2%

Add: Tax effect of — other non-allowable items — Loss in unit trust not brought to account

Total

3,822,538

-

3,822,538

3,360,256

-

3,360,256

(i) Remuneration disclosed is in respect of total key management personnel remuneration incurred by this company and related entities within ISIS Group Holdings Pty Ltd.

Consolidated Group

(a) D  ividend revenue from:

Construction Costs

Short-term Post Employment Benefits Benefit

Note 5 - Key Management Personnel Compensation

Parent Entity

Note 6 - Auditors’ Remuneration Remuneration of the auditor of the parent entity for: — auditing or reviewing the financial report — taxation services — taxation services provided by related practice of auditor Note 7 - Dividends Distributions paid Proposed fully franked ordinary dividend of 2.5 cents (2007: 2.5 cents) per share franked at the tax rate of 30% (2007: 30%) Balance of franking account at year end adjusted for franking credits arising from: — payment of provision for income tax, dividends recognised as receivables, and franking debits arising from payment of proposed dividends, and franking credits that may be prevented from distribution in subsequent financial years. Note 8 - Cash and Cash Equivalents Cash at bank and in hand Short-term bank deposits The effective interest rate on short-term bank deposits was 7.46% (2007: 6.16%); these deposits have an average maturity of 31 days. Reconciliation of cash Cash at the end of the financial year as shown in the cash flow statement is reconciled to items in the balance sheet as follows: Cash and cash equivalents

Parent Entity

2008

2007

2008

2007

94,000 -

74,500 9,750

19,640 -

-

8,295,497

6,944,107

8,295,497

6,944,107

2,079,040

2,058,818

2,079,040

2,058,818

4,633,588

4,088,070

4,633,588

4,088,070

57,729,865 10,117,207 67,847,072

50,709,975 6,981,601 57,691,576

3,427,301 3,427,301

925,579 925,579

67,847,072 67,847,072

57,691,576 57,691,576

3,427,301 3,427,301

925,579 925,579

Less: Tax effect of: — over-provision for income tax in prior years — rebateable fully franked dividends Income tax attributable to entity The applicable weighted average effective tax rates are as follows:

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NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

ISIS GROUP HOLDINGS PTY LIMITED ABN: 93 008 656 264 AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

ISIS GROUP HOLDINGS PTY LIMITED ABN: 93 008 656 264 AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

Consolidated Group 2008 Note 9 - Trade and Other Receivables CURRENT Trade receivables Project receivables Amounts due from customers for construction contracts Other receivables GST refund Loan - ISIS Projects Pty Limited Loan - ISIS Hotel Projects Pty Limited Loan - ISIS Projects (Queensland) Pty Limited Employee profit share

(a) Construction Contracts Contract costs incurred Recognised profits Amounts recognised as project prepayments

9(c) 9(a)

17

Progress receipts Retentions on construction contracts in progress

17

Parent Entity 2007

2008

Consolidated Group 2008

2007

25,799,266 10,991,063 36,790,329 294,963 238,204 16,492 37,339,988

7,966,800 6,164,549 14,131,349 194,001 9,281 15,630 14,350,261

296,142 130,472 426,614

104,823 419,990 524,813

302,614,472 34,383,740 (20,283,377) 316,714,835 (279,924,506) 36,790,329 11,925,907

216,120,829 25,168,590 (17,475,260) 223,814,159 (209,682,810) 14,131,349 9,106,533

-

-

(b) Provision for Impairment of Receivables Current project receivables are non-interest bearing loans and generally on 30 day terms. A provision for impairment is recognised when there is objective evidence that an individual project receivable is impaired. Where there has been an impairment the loss has been included as a bad debt expense in the income statement.

Note 13 - Financial Assets Available-for-sale financial assets Available-for-sale financial assets comprise: Unlisted investments, at cost — shares in controlled entities ISIS Projects Pty Limited ISIS Hotel Projects Pty Limited ISIS Developments Pty Limited ISIS Retail Projects Pty Limited Total available-for-sale financial assets

2007

Parent Entity 2008

2007

-

-

7,106,700

7,106,700

-

-

2,631,700 975,000 3,000,000 500,000 7,106,700

2,631,700 975,000 3,000,000 500,000 7,106,700

Available-for-sale financial assets comprise investments in the ordinary issued capital of the above wholly owned entities and are reflected at cost. There are no fixed returns or fixed maturity date attached to these investments. No intention to dispose of any unlisted availablefor-sale financial assets existed at 30 June 2008. Note 14 - Controlled Entities Controlled Entities Consolidated

Country of Incorporation

Subsidiaries of ISIS Group Holdings Pty Limited ISIS Projects Pty Limited ISIS Hotel Projects Pty Limited ISIS Retail Projects Pty Limited ISIS Development Projects Pty Limited ISIS Projects (Queensland) Pty Limited 14 Hunter Street Pty Limited as Trustee for 14 Hunter Street Unit Trust

Australia Australia Australia Australia Australia Australia

Percentage Owned (%)* 2008 2007 100 100 100 100 100 100

100 100 100 100 100 100

* Percentage of voting power in proportion to ownership

(c) Past due but not impaired As of 30 June 2008, project receivables of $5,872,172 (2007: $3,505,575) were past due but not impaired. These relate to a number of independent clients for whom there is no recent history of default. The ageing analysis of these receivables is as follows:

Consolidated Group Note

Parent Entity

2008

2007

2008

2007

8,069,444

5,290,433

-

-

(4,464,784)

(3,422,271)

-

-

3,604,660

1,868,162

-

-

Note 15 - Plant and Equipment 19,927,094 5,564,479 307,693 25,799,266

< 30 days (not past due) 31 to 90 days (past due) 90+ days (past due)

Note 10 - Inventories CURRENT At cost - Land held for resale

12

Note 11 - Other Assets CURRENT Prepayments

5,426,078 5,426,078

4,461,225 3,505,575 7,966,800

4,895,929 4,895,929

-

-

-

-

PLANT AND EQUIPMENT At cost Accumulated depreciation Total plant and equipment

15 (a)

(a) Movements in Carrying Amounts Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year: Plant & Equipment

Total

Consolidated Group: Balance at 1 July 2006

1,606,650

1,606,650

993,022

993,022

Additions 93,783 93,783

-

-

-

Depreciation expense

(731,510)

(731,510)

Balance at 30 June 2007

1,868,162

1,868,162

Additions Depreciation expense

Note 12 - Land Held for Sale CURRENT Cost of acquisition Development cost capitalised

Carrying amount at 30 June 2008

10

4,627,700 798,378 5,426,078

4,627,700 268,229 4,895,929

-

-

2,779,010 (1,042,512)

3,604,660

3,604,660

b) Impairment Losses The total impairment loss recognised in the income statement during the prior period amounted to $Nil.

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2,779,010 (1,042,512)

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NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

ISIS GROUP HOLDINGS PTY LIMITED ABN: 93 008 656 264 AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

ISIS GROUP HOLDINGS PTY LIMITED ABN: 93 008 656 264 AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

Consolidated Group Note

2008

Parent Entity 2007

2008

2007

Note 16 - Intangible Assets SOFTWARE AND LICENCING Cost Accumulated amortisation Net carrying value

702,684

570,684

-

-

(484,910)

(311,390)

-

-

217,774

259,294

-

-

259,294

375,859

-

-

Reconciliation of software and licensing Balance at the beginning of year Additions Amortisation charge Closing carrying value at 30 June

132,000

56,266

-

-

(173,520)

(172,831)

-

-

217,774

259,294

-

-

Note 17 - Trade and Other Payables CURRENT Unsecured liabilities 61,271,972

Trade payables and accrued expenses Employee benefits Project prepayments

9(a)

35,369,760

5,332

3,269

3,735,001

2,207,717

-

-

20,283,377

17,475,260

-

-

243,378

473,960

-

11,925,907

9,106,533

-

-

97,459,635

64,633,230

5,332

3,269

3,885,000

3,080,000

-

-

Unsecured loan - ISIS Projects Pty Limited

-

-

290,171

-

Unsecured loan - ISIS Retail Projects Pty Limited

-

-

5,642

23,524

Unsecured loan - ISIS Development Projects Pty Ltd

-

-

93,057

64,107

GST Liability Retentions

Note 19 - Tax (continued) Assets NON-CURRENT Consolidated Group Deferred tax assets Provisions Balance as at 30 June 2007 Provisions Balance as at 30 June 2008

Unsecured loan - ISIS Projects (Queensland) Pty Ltd

-

-

-

56

3,885,000

3,080,000

388,870

87,687

3,885,000

3,080,000

-

-

(a) Total current and non-current secured liabilities: Bank bills (b) T  he carrying amounts of non-current assets pledged as security are: First mortgage â&#x20AC;&#x201D; Freehold property

5,426,078

4,895,929

-

-

(c) The bank bills are secured by a registered first mortgage over the freehold property of the controlled entity. The covenants within the bank borrowings require total bank debt not to exceed 70% of loan to value ratio. (d) The bank bill facility expires on 28 February 2009. The facility will be reviewed closer to this date, at this time no decision has been made regarding the renewal. Note 19 - Tax Liabilities

Closing Balance

404,213 404,213

132,838 132,838

537,051 537,051

537,051 537,051

206,859 206,859

743,910 743,910

Parent Entity Deferred tax assets Provisions Balance as at 30 June 2007

404,213 404,213

132,838 132,838

537,051 537,051

Provisions Balance as at 30 June 2008

537,051 537,051

206,859 206,859

743,910 743,910

Deferred tax assets not brought to account, the benefits of which will only be realised if the conditions for deductibility set out in Note 1(b) occur: - Capital tax losses: $151,035 (2007 $151,035) Consolidated Group 2008 Note 20 - Provisions CURRENT Dividends Opening balance at beginning of year Additional provisions raised during year Amounts used Balance at end of the year NON-CURRENT Long-term Employee Benefits Opening balance at beginning of year Movement in the provision during the year Balance at end of the year

2007

2007

8,295,497 (8,295,497) -

6,944,107 (6,944,107) -

8,295,497 (8,295,497) -

6,944,107 (6,944,107) -

231,199 (128,835) 102,364

231,199 231,199

-

-

Provision for Long-term Employee Benefits A provision has been recognised for employee benefits relating to long service leave for employees. In calculating the present value of future cash flows in respect of long service leave, the probability of long service leave being taken is based upon historical data. The measurement and recognition criteria for employee benefits has been included in Note 1(l).

826,011

986,756

826,011

986,756

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Parent Entity 2008

Provision for Dividends A provision is only recognised for dividends that have been declared, but are yet to be paid. Refer Note 7 for further dividend information.

CURRENT Income tax

Charged to Income

Deferred tax assets not brought to account, the benefits of which will only be realised if the conditions for deductibility set out in Note 1(b) occur: - Capital tax losses: $151,035 (2007 $151,035)

Note 18 - Financial Liabilities Bank bills secured

Opening Balance

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NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

ISIS GROUP HOLDINGS PTY LIMITED ABN: 93 008 656 264 AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

Consolidated Group 2008

Note Note 21 - Issued Capital 83,161,602 (2007: 82,352,732) fully paid ordinary shares Treasury shares

21 (a) 21 (c)

(a) Ordinary Shares At the beginning of reporting period Shares issued during year At reporting date

2007

ISIS GROUP HOLDINGS PTY LIMITED ABN: 93 008 656 264 AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

Parent Entity 2008

2007

4,063,762 (514,771) 3,548,991

3,351,148 (417,519) 2,933,629

4,063,762 4,063,762

3,351,148 3,351,148

No. 82,352,732 808,870 83,161,602

No. 81,182,382 1,170,350 82,352,732

No. 82,352,732 808,870 83,161,602

No. 81,182,382 1,170,350 82,352,732

On 31 October 2007 the company issued 808,870 ordinary shares at 88.1 cents each called to 88.1 cents. The shares rank for dividends declared relating to the September 2007 quarter.

Note 22 - Reserves Treasury Share Reserve The treasury share reserve records the Employee Share Acquisition Trust’s investment held in ISIS Group Holdings Pty Limited. Refer to Note 21(c) for reconciliation of movements in the reserve account. No options existed at 30 June 2008.

Note Note 23 - Capital and Leasing Commitments (a) Operating Lease Commitments Non-cancellable operating leases contracted for but not capitalised in the financial statements Payable — minimum lease payments — not later than 12 months — between 12 months and five years — greater than five years

Consolidated Group 2008

1,784,006 6,086,634 5,416,099 13,286,739

Parent Entity 2008

2007

1,492,864 5,044,719 5,113,091 11,650,674

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

Property leases are non-cancellable leases with varying terms but expiring no later than 31 October 2017.

A  t the shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

Note 24 - Contingent Liabilities and Contingent Assets Estimates of the potential financial effect of contingent liabilities that may become payable: Contingent Liabilities

(b) C  apital Management Management controls the capital of the group in order to maintain a good debt to equity ratio, provide the shareholders with adequate returns and to 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.

Total equity Total capital

18 17 8

3,885,000 97,459,635 (67,847,072) 33,497,563 13,000,255 46,497,818

3,080,000 64,633,230 (57,691,576) 10,021,654 10,671,088 20,692,742

388,870 5,332 (3,427,301) (3,033,099) 10,484,312 7,451,213

87,687 3,269 (925,579) (834,623) 8,016,431 7,181,808

(c) T  reasury Shares Treasury shares are shares in ISIS Group Holdings Pty Limited that are held by the ISIS Group Holdings Pty Limited Employee Share Acquisition Trust for the purpose of issuing shares under the employee share scheme. Date 1 July 2006 31 October 2006 1 November 2006 30 June 2007 31 October 2007 1 November 2007 30 June 2008

Details Opening balance Acquisition of shares by employees in the trust Disposal of shares by employees in the trust Balance Acquisition of shares by employees in the trust Disposal of shares by employees in the trust Balance

Number of shares 1,267,129 241,674 (88,643) 1,420,160 221,109 (110,720) 1,530,549

15,873,876

9,914,673

$ 328,241 140,993 (51,714) 417,519 194,796 (97,544) 514,771

Note 26 - Cash Flow Information (a) Reconciliation of Cash Flow from Operations with Profit after Income Tax Profit after income tax Non-cash flows in profit Depreciation and amortisation

-

15,873,876

9,914,673

Changes in assets and liabilities (Decrease) in trade and other receivables (Increase)/decrease in other assets Increase in inventories Increase/(decrease) in trade and other payables Increase/(decrease) in income taxes payable Increase in deferred taxes payable (Decrease) in provisions

9,912,050

8,059,531

10,050,767

7,977,015

1,216,032

904,341

-

-

(22,989,727) (93,783) (530,149) 32,826,405 (160,745) (206,859) (128,835) 19,844,389

(4,420,598) 38,620 (4,895,929) 16,280,961 156,044 (132,838) (325,876) 15,664,256

2,060 31,778 10,084,605

(106) (5,952) 7,970,957

(b) Credit Standby Arrangement and Loan Facilities The company has a fully drawn commercial bill facility amounting to $3,885,000 (2007: $3,080,000). The facility expires on 28 February 2009. Interest rates are variable.

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Note 25 - Segment Reporting The consolidated group operates predominately in the development, post construction and refurbishment of commercial properties throughout Australia.

There have been no changes in the strategy adopted by management to control the capital of the group since the prior year. The gearing ratios for the year ended 30 June 2008 and 30 June 2007 are as follows: Total borrowings Trade and other payables Less cash and cash equivalents

Related Party Guarantees Provided by the Parent Entity The Group bank guarantee facility with the National Australia Bank, is supported by a fixed and floating charge over the assets of the company and the entities it controls. At reporting date ISIS Group Holdings Pty Limited is in a sound financial position and is not likely to default on the facility.

2007

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NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

Note 27 - Events After the Balance Sheet Date There have been no events after the balance sheet date which require disclosure in the financial statements as at 30 June 2008.

Note 29 - Financial Risk Management (continued) (b) Financial Instrument Composition and Maturity Analysis The tables below reflect the undiscounted contractual settlement terms for financial instruments of a fixed period of maturity, as well as management’s expectations of the settlement period for all other financial instruments. As such, the amounts may not reconcile to the balance sheet.

ISIS GROUP HOLDINGS PTY LIMITED ABN: 93 008 656 264 AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

Note 28 - Related Party Transactions Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated Note 29 - Financial Risk Management (a) Financial Risk Management Policies The group’s financial instruments consist mainly of deposits with banks, accounts receivable and payable, loans to and from subsidiaries and bank bills.

ISIS GROUP HOLDINGS PTY LIMITED ABN: 93 008 656 264 AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

Weighted Average Consolidated Cash and cash equivalents

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

Total Financial Assets

The group does not have any derivative instruments at 30 June 2008.

The department’s overall risk management strategy seeks to assist the consolidated group in meeting its financial targets, whilst minimising potential adverse effects on financial performance. The finance department operates under policies approved by the board of directors. Risk management policies are approved and reviewed by the Board on a regular basis. These include credit risk policies and future cash flow requirements.

Floating Interest Rate

Within 1 Year

1 to 5 Years

2008 (%) 2007 (%)

2008 ($)

2007 ($)

2008 ($)

2007 ($)

2008 ($)

2007 ($)

57,729,865

50,709,975

10,117,207

6,981,601

-

-

Financial Assets:

The Directors consider that the carrying amount of financial assets and financial liabilities recorded in the financial statements approximates their fair values (2007: fair values).

(i)  Treasury Risk Management The finance department regularly analyses financial risk exposure and evaluates treasury management strategies in the context of the most recent economic conditions on financial performance.

Fixed Interest Rate Maturing

Effective Interest Rate

7.19

6.15

-

-

-

-

-

-

57,729,865

50,709,975

10,117,207

6,981,601

-

-

Receivables

Non-interest Bearing

Total

2008 ($)

2007 ($)

-

-

2008 ($)

2007 ($)

67,847,072

57,691,576

Financial Assets: Cash and cash equivalents Receivables

37,339,988 14,350,261

Total Financial Assets

37,339,988 14,350,261 105,187,060 Weighted Average

(ii) Financial Risk Exposures and Management The main risks the group is exposed to through its financial instruments are liquidity risk and credit risk. Interest rate risk The company is not exposed to any material interest rate risk. For further details on interest rate risk refer to Note 29(b).

Consolidated

Foreign currency risk The group is not exposed to fluctuations in foreign currencies.

Bank bills secured

Liquidity risk The group manages liquidity risk by continual monitoring of forecast cash flows and ensuring that sufficient cash is maintained to fund the operations of the business. The company maintains significant surplus cash balances.

Total Financial Liabilities

37,339,988 14,350,261

Fixed Interest Rate Maturing

Effective Interest Rate

Floating Interest Rate

2008 (%) 2007 (%)

2008 ($)

2007 ($)

2008 ($)

Within 1 Year 2007 ($)

2008 ($)

1 to 5 Years 2007 ($)

3,885,000

3,080,000

-

-

-

-

-

-

-

-

-

-

3,885,000

3,080,000

-

-

-

-

2008 ($)

2007 ($)

2008 ($)

2007 ($)

-

-

3,885,000

3,080,000

Financial Liabilities: 7.75

6.41

Trade and other payables

Non-interest Bearing

Total

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

Financial Liabilities:

Trade and other payables

97,459,635 64,633,230

Total Financial Liabilities

97,459,635 64,633,230 101,344,635

There are no material amounts of collateral held as security at 30 June 2008.

Credit risk is managed on a group basis and reviewed regularly by the finance department. It arises from exposures to customers as well as through certain derivative financial instruments and deposits with financial institutions.

72,041,837

Bank bills secured

97,459,635 64,633,230 67,713,230

Trade and other payables are expected to be paid as follows:

The finance committee monitors credit risk by actively assessing the rating quality and liquidity of counter parties:

– only banks and financial institutions with an ‘A’ rating are utilised;

– all potential customers are rated for credit worthiness taking into account their size, market position and financial standing; and

Less than 6 months

85,533,728 55,526,697

– customers that do not meet the group’s strict credit policies may only transact with appropriate levels of security in place by way of prepayments or bank guarantees.

6 months to 1 year

11,925,907

Consolidated Group 2008 ($)

2007 ($) 9,106,533

97,459,635 64,633,230

The consolidated group does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the consolidated group. Price risk The group is not exposed to any material commodity price risk.

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NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

Note 29 - Financial Risk Management (continued)

Note 29 - Financial Risk Management (continued) (i) Available for sale financial assets consist entirely of investments in wholly owned subsidiaries held at cost. Wholly owned subsidiaries are governed by AASB 127: Consolidated and Separate Financial Statements and disclosure of Net Fair Values is not required.

ISIS GROUP HOLDINGS PTY LIMITED ABN: 93 008 656 264 AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

(b) Financial Instrument Composition and Maturity Analysis (continued) Weighted Average Effective Interest Rate Floating Interest Rate Parent Entity 2008 (%) 2007 (%) 2008 ($) 2007 ($) Financial Assets: Cash and cash equivalents Trade and other receivables Total Financial Assets

7.14

6.15

3,427,301 3,427,301

925,579 925,579

ISIS GROUP HOLDINGS PTY LIMITED ABN: 93 008 656 264 AND CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

Fixed Interest Rate Maturing Within 1 Year 1 to 5 Years 2008 ($) 2007 ($) 2008 ($) 2007 ($) -

Non-interest Bearing 2008 ($) 2007 ($) Financial Assets: Cash and cash equivalents Trade and other receivables Total Financial Assets

Parent Entity Financial Liabilities: Trade and other payables Financial liabilities Total Financial Liabilities

426,614 426,614 Weighted Average Effective Interest Rate 2008 (%) 2007 (%)

Floating Interest Rate 2008 ($) 2007 ($) -

Financial Liabilities: Trade and other payables Financial liabilities Total Financial Liabilities

-

-

-

524,813 524,813

-

Total 2008 ($) 2007 ($) 3,427,301 426,614 3,853,915

925,579 524,813 1,450,392

Fixed Interest Rate Maturing Within 1 Year 1 to 5 Years 2008 ($) 2007 ($) 2008 ($) 2007 ($) -

-

-

-

Non-interest Bearing 2008 ($) 2007 ($)

Total 2008 ($) 2007 ($)

5,332 388,870 394,202

5,332 388,870 394,202

3,269 87,687 90,956

3,269 87,687 90,956

Parent Entity 2008 ($) 2007 ($) 3,269 5,332 3,269 5,332

Trade and other payables are expected to be paid as follows: Less than 6 months

(c) N  et Fair Values Carrying amount of financial assets and financial liabilities recorded in the financial statements of both the parent and consolidated entities approximates their fair values. No financial assets and financial liabilities are readily traded on organised markets.  he aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the balance sheet and in T the notes to the financial statements. Aggregate net fair values and carrying amounts of financial assets and financial liabilities at balance date for the consolidated entity: 2008 2007 Carrying Amount $ Net Fair Value $ Carrying Amount $ Net Fair Value $ Financial assets Loans and receivables Financial liabilities Bank bills secured Trade and other payables

37,339,988 37,339,988

37,339,988 37,339,988

14,350,261 14,350,261

14,350,261 14,350,261

3,885,000 97,459,635 101,344,635

3,885,000 97,459,635 101,344,635

3,080,000 64,633,230 67,713,230

3,080,000 64,633,230 67,713,230

The group has no non-current borrowings. (d) Sensitivity analysis Interest rate risk: The group assigns all interest charges to the cost of inventories as at 30 June 2008. On the basis that total cost of inventories remains lower than the net realisable value interest rate movements will have nil impact on profit. Note 30 - Change In Accounting Policy (a) The following Australian Accounting Standards issued or amended which are applicable to the parent entity and the consolidated group but are not yet effective and have not been adopted in preparation of the financial statements at reporting date. AASB Amendment AASB 2007-3 Amendments to Australian Accounting Standards

AASB 8 Operating Segments AASB 2007-6 Amendments to Australian Accounting Standards

Standards Affected

Outline of Amendment

AASB 136

Inventories Cash Flow Statements Employee Benefits Consolidated and Separate Financial Statements Impairment of Assets

AASB 114

Segment Reporting

AASB 101

Presentation of Financial Statements Cash Flow Statements Construction Contracts Property, Plant and Equipment Intangible Assets

AASB 102 AASB 107 AASB 119 AASB 127

AASB 107 AASB 111 AASB 116 AASB 138

AASB 123 AASB 123 Borrowing Costs AASB 2007-8 AASB 101 Amendments to Australian Accounting Standards AASB 101 AASB 101

Borrowing Costs

Presentation of Financial Statements

Presentation of Financial Statements

Note 31 - Company Details The registered office of the company is: ISIS Group Holdings Pty Limited Level 4 29-57 Christie Street St Leonards NSW 2065

Application date of standard 1 Jan 2009

Application date for Group 1 July 2009

1 Jan 2009

1 July 2009

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

1 Jan 2009

1 July 2009

1 Jan 2009

1 July 2009

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

1 Jan 2009

1 July 2009

1 Jan 2009

1 July 2009

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

The principal place of business is: ISIS Group Holdings Pty Limited Level 4 29-57 Christie Street St Leonards NSW 2065

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DIRECTORY Our Offices

Our Partners

Adelaide Mezzanine Level 182 Victoria Square Adelaide SA 5000 Phone +61 8 8410 7770 Fax +61 8 8410 7771

HM Creative Advertising and creative thinking 82A St Kilda Road St Kilda VIC 3182 Phone +61 3 9534 7977 Fax +61 3 9534 7577

Brisbane Level 8, 39 Sherwood Road Toowong QLD 4066 Phone +61 7 3871 3800 Fax +61 7 3871 1100

Landor Associates Brand consultants and designers Level 11, 15 Blue Street North Sydney NSW 2060 Phone +61 2 8908 8700 Fax +61 2 9959 5639

Canberra 216 Northbourne Avenue Braddon ACT 2612 Phone +61 2 6241 6166 Fax +61 2 6241 6146 Darwin Level 2, 21 Knuckey Street Darwin NT 0800 Phone +61 8 8919 2550 Fax +61 8 8941 5922 Melbourne Level 6, 163 Eastern Road South Melbourne VIC 3205 Phone +61 3 9690 9555 Fax +61 3 9690 5999 Perth Level 1, 91 Havelock Street West Perth WA 6005 Phone +61 3 9226 1433 Fax +61 8 9226 1533 Sydney Level 4, 29 Christie Street St Leonards NSW 2065 Phone +61 2 9906 6977 Fax +61 2 9906 6738

Moore Stephens Melbourne Business advisors and chartered accountants Level 14, 607 Bourke Street Melbourne VIC 3000 Phone +61 3 9614 4444 Fax +61 3 9629 5716 National Australia Bank Financial services 23/255 George Street Sydney NSW 2000 Phone +61 2 9237 9256 Fax +61 2 9237 9773 Oxygen Financial Public Relations Financial public relations Level 13, 90 Collins Street Melbourne, VIC 3000 Phone +61 3 9915 6341 Fax +613 9867 4982 Turtons Lawyers Commercial lawyers Level 11, 32 Martin Place Sydney NSW 2000 Phone +61 2 9229 2922 Fax +61 2 9229 2900

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