SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K/A
                                 Amendment No. 2
(Mark One)

|_| Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
    of 1934
                                       or

|X| Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934

        For the transition period from January 1, 2008 to March 31, 2008

                         COMMISSION FILE NUMBER 1-15863

                                 IA GLOBAL, INC.
                                 ---------------
             (Exact name of registrant as specified in its charter)

                    DELAWARE                           13-4037641
                    --------                           ----------
         (State or other jurisdiction of            (I.R.S. Employer
         incorporation or organization)            Identification No.)

           101 CALIFORNIA STREET, SUITE 2450, SAN FRANCISCO, CA 94111
           ----------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

       (Registrant's telephone number, including area code) (415)-946-8828

Securities registered pursuant to Section 12(b) of the Act:

   COMMON STOCK, $.01 PAR VALUE            The American Stock Exchange
   ----------------------------            ---------------------------
        (Title of class)            Name of Each Exchange on which registered

Securities registered pursuant to Section 12(g) of the Act:  NONE

         Indicate by check mark if the registrant is a well-known issuer, as
defined in Rule 405 of the Securities Act.
                                                                Yes |_|   No |X|

         Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act.
                                                                Yes |_|   No |X|

         Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
                                                                Yes |X|   No |_|

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. |_|

         Indicate by check mark whether the registrant is large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange
Act.
         Large accelerated filer |_|      Accelerated filer         |_|
         Non-accelerated filer   |_|      Smaller reporting company |X|

         Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Act).
                                                                Yes |_|   No |X|

         The aggregate market value of the common equity held by non-affiliates
of the registrant as of July 11, 2008 was approximately $24,363,848.

         The number of shares of the registrant's common stock outstanding as of
July 11, 2008: 209,363,942 shares of Common stock.   Explanatory Note

As required by Rule 3-09 of Regulation S-X, IA Global, Inc. (the "Company") is
filing this Form 10-K/A to its Transition Report on Form 10-K for the transition
period from January 1, 2008 to March 31, 2008 (the "Annual Report") to amend
Item 15, Exhibits and Financial Statement Schedules, to include the audited
financial statements of Australian Secured Financial Limited ("ASFL") for the
year ended June 30, 2008. The Company has a 36% equity interest in ASFL. Item 15
is also being amended to include reference to the ASFL financial statements and
the related report of the entity's independent certified public accounting firm,
and to file the consent of the independent certified public accounting firm
related to their opinion contained in this filing. Additionally, in connection
with the filing of this Form 10-K/A and pursuant to Securities and Exchange
Commission ("SEC") rules, the Company is including currently dated
certifications under Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. In
accordance with Rule 12b-15 under the Securities and Exchange Act of 1934, as
amended, the text of the amended item (Item 15) is set forth in its entirety in
the attached pages hereto.

This Form 10-K/A does not otherwise update any exhibits as originally filed and
does not otherwise reflect events occurring after the original filing date of
the Annual Report. Accordingly, this Form 10-K/A should be read in conjunction
with the Company's filings with the SEC subsequent to the filing of the Annual
Report.

                                        2PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) FINANCIAL STATEMENTS:

         The following financial statements of the Registrant and reports of
independent registered public accounting firm are filed as a part of this
Report.

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                    Page
                                                                    ----

    Report of Independent Registered Public Accounting Firm ...       #

    Consolidated Balance Sheets
         as of March 31, 2008 and December 31, 2007 and 2006 ..       #

    Consolidated Statements of Operations
         for the three months ended March 31, 2008 and 2007 and
         for the years ended December 31, 2007, 2006 and 2005 .       #

    Consolidated Statement of Stockholders' Equity (Deficiency)
         for the years ended December 31, 2007, 2006 and 2005
         and for the three months ended March 31, 2008 ........       #

    Consolidated Statement of Cash Flows
         for the three months ended March 31, 2008 and 2007 and
         for the years ended December 31, 2007, 2006 and 2005 .       #

    Notes to Consolidated Financial Statements ................       #

    Australian Secured Financial Limited Financial Statements
         for the year ended June 30, 2008 .....................   F-1 - F-40

# Previously filed with the Registrant's Transition Report on Form 10-K for the
transition period from January 1, 2008 to March 31, 2008.

(b) EXHIBITS:

EXHIBIT
NUMBER   EXHIBIT DESCRIPTION
-------  -------------------

3.1      Amended and Restated Certificate of Incorporation of IA Global, Inc.
         dated July 10, 2007 (2)

3.2      Amended and Restated Bylaws of IA Global, Inc. dated November 10, 2007
         (3)

3.3      Certificate of Designation of Preferences and Rights of the
         Registrant's Series A Convertible Preferred Stock (4)

3.4      Certificate of Designation of Preferences and Rights of the
         Registrant's Series B Convertible Preferred Stock (5)

3.5      Certificate of Designations, Rights and Preferences of the Series A-1
         Preferred Stock of IA Global, Inc. dated October 18, 2006 (6)

3.6      Certificate Eliminating Reference to a Series B Convertible Preferred
         Shares of Stock from the Certificate of Incorporation of IA Global,
         Inc. dated October 18, 2006. (6)

3.7      Certificate Eliminating Reference to a Series A-1 Convertible Preferred
         Shares of Stock from the Certificate of Incorporation of IA Global,
         Inc. dated March 29, 2007 (7)

4.1      Specimen of Stock Certificate (8)

4.2      IA Global, Inc. 2007 Stock Incentive Plan (9) *

4.3      1999 and 2000 Stock Option Plans (26)*

                                       3010.1     Amendment to Employment Agreement dated January 24, 2007 by and between
         IA Global, Inc. and Mark Scott. (10)*

10.2     Employment Agreement dated February 8, 2007 by and between IA Global,
         Inc. and Derek Schneideman (11)*

10.3     Outsource Business Services Agreement dated December 28, 2006 by and
         between Global Hotline, Inc. and KDDI Network and Solutions, Inc.
         Appendix to Outsource Business Services Agreement dated December 28,
         2006 between Global Hotline, Inc. and KDDI Network and Solutions, Inc.
         (English translation ) (12) +

10.4     Bank Credit Facility Contract dated May 16, 2007 by and between Global
         Hotline, Inc. and Mitsui Sumitomo Bank Co. Ltd. (English translation)
         (2)

10.5     Loan Application Form dated June 1, 2007 by and between IA Partners Co
         Ltd and Mizuho Bank Co Ltd. (English translation) (2)

10.6     Promissory Note Application Form dated June 19, 2007 by and between IA
         Partners Co Ltd and Mitsui Sumitomo Bank Co Ltd (English translation)
         (2)

10.7     Loan Application Form dated June 19, 2007 by and between Global
         Hotline, Inc. and Mitsui Sumitomo Bank Co Ltd (English translation) (2)

10.8     Business Assignment Agreement, dated July 3, 2007, by and between
         Global Hotline, Inc. and KDDI Corporation. (English translation) (3)

10.9     Borrowing Conditions, dated July 6, 2007, by and between Global
         Hotline, Inc. and Mizuho Bank Co Ltd. (English translation) (3)

10.10    Administrative Service Agreement, dated July 9, 2007, by and between
         Global Hotline, Inc. and Mizuho Bank Co Ltd. (English translation) (3)

10.11    Monetary Loan Certification, by Hideki Anan. (3)

10.12    Issue Conditions, dated July 17, 2007, by and between Global Hotline,
         Inc. and Mizuho Bank Co Ltd.(English translation) (3)

10.13    Indications of Main Items, dated July 17, 2007, by and between Global
         Hotline, Inc. Mizuho Bank Co Ltd. (English translation) (3)

10.14    Corporate Bonds Conditions, by Mizuho Bank Co Ltd (English translation)
         (3)

10.15    Important Conditions of Corporate Bonds, by Global Hotline, Inc.
         (English translation) (3)

10.16    Full Amount Guarantor Agreement, by Mizuho Bank Co Ltd (English
         translation) (3)

10.17    Request For Overdraft Facility, dated July 27, 2007, by Global Hotline,
         Inc. (English translation) (3)

10.18    Special Overdraft Change Facility Agreement, dated July 27, 2007, by
         and between Global Hotline, Inc. and Mitsui Sumitomo Bank Co Ltd
         (English translation) (3)

10.19    Monetary Loan Certification, dated July 31, 2007, by and between IA
         Partners Co Ltd and Mitsubishi Tokyo UFJ Bank Co Ltd (English
         translation) (3)

10.20    Monetary Loan Certification, dated July 31, 2007, by and between IA
         Partners Co Ltd and Mitsubishi Tokyo UFJ Bank Co Ltd (English
         translation) (3)

10.21    Articles of Agreement, dated August 8, 2007, by Inforidge Co Ltd
         (English translation) (13)

                                       3110.22    Agency Agreement for Offering Life Insurance, dated July 7, 2007, by
         and between Inforidge Co Ltd and American Life Insurance. (English
         translation) (13)

10.23    Share Exchange Agreement, dated August 24, 2007, by and between IA
         Global, Inc. and GPlus Media Co Ltd (14)

10.24    Right of First Refusal, dated August 24, 2007, by and between IA
         Global, Inc. and GPlus Media Co Ltd (14)

10.25    Share Exchange Agreement, dated August 24, 2007, by and between IA
         Global, Inc. and Slate Consulting Co Ltd (15)

10.26    Right of First Refusal, dated August 24, 2007, by and between IA
         Global, Inc. and Slate Consulting Co Ltd (15)

10.27    Binding Term Sheet, dated September 4, 2007, by and between IA Global,
         Inc. and LINC Media, Inc. (16)

10.28    Employment Agreement, dated September 5, 2007, by and between IA
         Global, Inc. and Mr. Schneideman. (17)*

10.29    Employment Agreement, dated September 5, 2007, by and between IA
         Global, Inc. and Mr. Scott. (18)*

10.30    Agreement on Special Overdrawn Account dated September 14, 2007, by and
         between Global Hotline, Inc., IA Partners Co Ltd, SG Telecom Co ltd,
         Inforidge Co Ltd and Sumitomo Mitsui Banking Corporation (English
         translation) (3)

10.31    Amendment to Binding Term Sheet, dated September 28, 2007, by and
         between IA Global, Inc. and LINC Media, Inc. (19)

10.32    Amendment to Binding Term Sheet, dated October 9, 2007, by and between
         IA Global, Inc. and LINC Media, Inc. (20)

10.33    Business Assignment Agreement, dated September 27, 2007, by and between
         Global Hotline, Inc. and KDDI Corporation. (English translation) (3)

10.34    Asset Purchase Agreement, dated October 22, 2007, by and between IA
         Global, Inc. and LINC Media, Inc. (21)

10.35    Promissory Note for $720,000, dated October 22, 2007, by and between IA
         Global, Inc. and LINC Media, Inc. (21)

10.36    Promissory Note for $1,200,000, dated October 22, 2007, by and between
         IA Global, Inc. and LINC Media, Inc. (21)

10.37    Promissory Note for $200,000, dated October 22, 2007, by and between IA
         Global, Inc. and LINC Media, Inc. (21)

10.38    Performance Agreement, dated October 22, 2007, by and between IA
         Global, Inc. and LINC Media, Inc. (21)

10.39    Assignment and Assumption Agreement and Bill of Sale, dated October 22,
         2007, by and between IA Global, Inc. and LINC Media, Inc.(21)

10.40    Call Center Service Agency Agreement, dated May 21, 2007, by and
         between IA Partners Co Ltd and NTT Co Ltd. (English translation) (3)

10.41    Attachment Agreement, dated May 21, 2007, by and between IA Partners Co
         Ltd and NTT Co Ltd. (English translation) (3)

10.42    Confidentiality Agreement, dated May 21, 2007, by and between IA
         Partners Co Ltd and NTT Co Ltd. Co Ltd (English translation) (3)

10.43    Covenant for Data Management, dated May 21, 2007, by IA Partners Co
         Ltd. (English translation) (3)

                                       3210.44    Request For Use of Special Overdraft Service dated November 27, 2007 by
         and between Sumitomo Mitsui Banking Corporation (English Translation)
         (34)

10.45    Binding Term Sheet, dated December 20, 2007, by and between IA Global,
         Inc. and Esprit Co Ltd.(22)

10.46    Share Mortgage Agreement, dated December 21, 2007, by and between IA
         Global, Inc. and Frontier Mortgages Pty Ltd (34)

10.47    Loan Agreement, dated December 21, 2007, by and between IA Global, Inc.
         and Frontier Mortgages Pty Ltd (34)

10.48    Certificate and Acknowledgment, dated December 21, 2007, by and between
         IA Global, Inc. and Frontier Mortgages Pty Ltd (34)

10.49    Outbound Telemarketing Program, dated November 30, 2007, by and between
         Inforidge Co Ltd and American Life Insurance Company. (34)

10.50    Working Capital Loan Amendment, dated January 22, 2008, by and between
         Global Hotline, Inc. and Mitsui Sumitomo Co Ltd. (English translation)
         (34)

10.51    Request For Loan With Draft Loan (Change), dated January 22, 2008, by
         and between IA Partners, Inc. and Mitsui Sumitomo Co Ltd. (English
         translation) (34)

10.52    Binding Term Sheet, dated January 30, 2008, between IA Global, Inc. and
         Asia Premier Executive Business Suites, Inc. (23)

10.53    Working Capital Loan Amendment, dated January 31, 2008, by and between
         Global Hotline, Inc. and Mitsui Sumitomo Co Ltd. (English translation)
         (34)

10.54    Binding Term Sheet, dated February 11, 2008, between IA Global, Inc.
         and Paper.com LLC (24)

10.55    Unsecured Corporate Bond, dated February 15, 2008, by and between
         Global Hotline, Inc. and Mitsubishi UFJ Bank Co Ltd. (English
         translation) (34)

10.56    Amendment Agreement, dated February 22, 2008, by and between IA Global,
         Inc. and LINC Media, Inc. (25)

10.57    Partner Contract dated December 22, 2005 between IA Partners Co Ltd and
         Internet Service Partners. (English translation) (27)

10.58    Business Outsourcing Basic Contract, dated October 6, 2004, by and
         between KDDI and Global Hotline. (English Translation) (28)

10.59    Agency Contract, dated April 14, 2006, by and between Japan Telecom
         Invoicing, Inc. and Global Hotline, Inc. (English translation) (29)

10.60    Agency Ordering Agreement, dated May 10, 2006, by and between IA
         Partners Co Ltd and AFLAC Co Ltd. (English translation) (30)

10.61    Business Agency Contract, dated May 10, 2006, by and between IA
         Partners Co Ltd and AFLAC Co Ltd. (English translation) (30)

10.62    Financial Support for Direct Marketing Agreement, by and between IA
         Partners Co Ltd and AFLAC Co Ltd. (English translation) (31) +

10.63    Amendment Agreement, dated March 12, 2008, by and between IA Global,
         Inc. and LINC Media, Inc. (32)

10.64    Working Capital Loan Amendment, dated February 29, 2008, by and between
         Global Hotline, Inc. and Mitsui Sumitomo Co Ltd. (English translation)
         (34)

                                       3310.65    Loan Agreement, dated December 27, 2007, by and between Global Hotline,
         Inc and Mizuho Bank Co Ltd. (English translation) (34)

10.66    Loan Plan, dated December 27, 2007, by and between Global Hotline, Inc
         and Mizuho Bank Co Ltd. (English translation) (34)

10.67    Call Center Usage Facility Agreement, dated January 10, 2008, by and
         between IA Partners Co Ltd and OMC Card, Inc. (English translation)
         (34)

10.68    Basic Agreement, dated January 10, 2008, by and between Inforidge Co
         Ltd and OMC Card, Inc. (English translation) (34)

10.69    Share Exchange Agreement, dated April 10, 2008, by and between IA
         Global, Inc. and P. Scott Valley and John Engel. (35)

10.70    Services Agreement, dated April 10, 2008, by and between IA Global,
         Inc. and IA Global, Inc. and Paper.com LLC. (35)

10.71    Working Capital Loan Amendment, dated January 22, 2008, by and between
         Global Hotline, Inc. and Mitsui Sumitomo Co Ltd. (English translation)
         (37)

10.72    Request For Loan With Draft Loan (Change), dated January 22, 2008, by
         and between IA Partners, Inc. and Mitsui Sumitomo Co Ltd. (English
         translation) (37)

10.73    Binding Term Sheet, dated January 30, 2008, between IA Global, Inc. and
         Asia Premier Executive Business Suites, Inc. (38)

10.74    Working Capital Loan Amendment, dated January 31, 2008, by and between
         Global Hotline, Inc. and Mitsui Sumitomo Co Ltd. (English translation)
         (37)

10.75    Binding Term Sheet, dated February 11, 2008, between IA Global, Inc.
         and Paper.com LLC (39)

10.76    Unsecured Corporate Bond, dated February 15, 2008, by and between
         Global Hotline, Inc. and Mitsubishi UFJ Bank Co Ltd. (English
         translation) (37)

10.77    Amendment Agreement, dated February 22, 2008, by and between IA Global,
         Inc. and LINC Media, Inc. (40)

10.78    Amendment Agreement, dated March 12, 2008, by and between IA Global,
         Inc. and LINC Media, Inc. (41)

10.79    Working Capital Loan Amendment, dated February 29, 2008, by and between
         Global Hotline, Inc. and Mitsui Sumitomo Co Ltd. (English translation)
         (37)

10.80    Amendment to Binding Term Sheet dated April 16, 2008, by and between IA
         Global, Inc. and the sellers of Asia Premier Business Suites, Inc. (43)

10.81    Amendment Agreement, dated April 25, 2008, by and between IA Global,
         Inc. and Esprit Co Ltd. (44)

10.82    Request For Use of Overdraft Facility dated April 30, 2008, by and
         between Global Hotline, Inc. and Mitsui Sumitomo Banking Corporation
         (English translation) (44)

10.83    Deed of Variation, dated April 24, 2008, by and between IA Global, Inc.
         and Frontier Mortgages Pty Ltd. (44)

10.84    Request For Loan With Draft Loan (Change), dated April 24, 2008, by and
         between IA Partners, Inc. and Mitsui Sumitomo Co Ltd. (English
         translation) (36)

10.84    Subscription Agreement, dated April 24, 2008, by and between IA Global,
         Inc. and Michael Ning. (36)

                                       3410.85    Subscription Agreement, dated May 8, 2008, by and between IA Global,
         Inc. and Michael Ning. (36)

10.86    Form of Warrant, dated May 8, 2008, by and between IA Global, Inc. and
         Michael Ning. (36)

10.87    Form of Warrant, dated May 8, 2008, by and between IA Global, Inc. and
         Michael Ning. (36)

10.88    Restricted Stock Agreement, dated April 27, 2008, by and between IA
         Global, Inc. and Mark Scott. (36) *

10.89    Restricted Stock Agreement, dated May 16, 2008, by and between IA
         Global, Inc. and Derek Schneideman. (48) *

10.90    CEO Compensation/Bonus Package, dated May 16, 2008, by and between IA
         Global, Inc. and Derek Schneideman. (45) *

10.91    Share Exchange Agreement, dated May 27, 2008, by and between IA Global,
         Inc. and Asia Premier Executive Suites, Inc., Jonathan Miller and Renee
         Rilloraza. (46)

10.92    Notes Payable for $100,000, dated May 27, 2008, by and between IA
         Global, Inc. and Jonathan Miller and Renee Rilloraza. (46)

10.93    Notes Payable for $131,000, dated May 27, 2008, by and between IA
         Global, Inc. and Jonathan Miller and Renee Rilloraza. (46)

10.94    Notes Payable for $37,000, dated May 27, 2008, by and between IA
         Global, Inc. and Jonathan Miller and Renee Rilloraza. (46)

10.95    Share Exchange Agreement, dated June 3, 2008, by and between IA Global,
         Inc. and Taicom Securities Co Ltd. (47)

10.96    CFO Compensation/Bonus Package, dated May 16, 2008, by and between IA
         Global, Inc. and Mark Scott. (45) *

10.97    Loan Agreement, dated June 4, 2008, by and between Global Hotline, Inc
         and Mizuho Bank Co Ltd. (English translation) (48)

10.98    Request For Loan With Draft Loan (Change), dated June 19, 2008, by and
         between IA Partners, Inc. and Mitsui Sumitomo Co Ltd. (English
         translation) (48)

21.1     Subsidiaries of the Registrant (48)

23.1     Consent of Sherb and Co LLP (48)

23.2     Consent of Bentleys MRI Brisbane Partnership (1)

31.1     Section 302 Certifications. (1)

31.2     Section 302 Certifications. (1)

32.1     Section 902 Certifications. (1)

32.2     Section 902 Certifications. (1)

99.1     Audit Committee Charter dated June 8, 2008. (33)

99.2     Compensation Committee Charter dated June 8, 2008. (33)

99.3     Nominations and Governance Committee Charter dated June 8, 2008. (33)

99.4     Merger and Acquisition Committee Charter dated June 8, 2008. (33)
__________________

*  Indicates management contract or compensatory plan.

+  Certain confidential material contained in the document has been omitted and
   filed separately with the Securities and Exchange Commission pursuant to Rule
   406 of the Securities Act of 1933, as amended or Rule 24b-2 of the Securities
   and Exchange Act of 1934, as amended.

                                       35__________________

(1)   Filed herewith.

(2)   Filed as an exhibit to Registrant's Quarterly Report on Form 10-Q for the
      period ending June 30, 2007, and filed on August 20, 2007, and
      incorporated herein by reference.

(3)   Filed as an exhibit to Registrant's Quarterly Report on Form 10-Q for the
      period ending September 30, 2007, and filed on November 19, 2007, and
      incorporated herein by reference.

(4)   Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      November 8, 2001, and incorporated herein by reference.

(5)   Filed as an exhibit to Registrant's Quarterly Report on Form 10-Q for the
      period ending March 31, 2006, and filed on May 15, 2006, and incorporated
      herein by reference.

(6)   Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      October 19, 2006 and filed on October 24, 2006, and incorporated herein by
      reference.

(7)   Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      March 29, 2007 and filed on March 30, 2007, and incorporated herein by
      reference.

(8)   Filed as an exhibit to Registrant's Registration Statement on Form S-1, as
      amended (File No. 333-71733), and incorporated herein by reference.

(9)   Filed as an Annex 2 to Registrant's Proxy Statement on May 3, 2007, and
      incorporated herein by reference.

(10)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      January 24, 2007 and filed on January 29, 2007, and incorporated herein by
      reference.

(11)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      February 8, 2007 and filed on February 13, 2007, and incorporated herein
      by reference.

(12)  Filed as an exhibit to Registrant's Form 10-K dated December 31, 2006 and
      filed on April 2, 2007.

(13)  Filed as an exhibit to Registrant's Current Report on Form 8-K/A, dated
      August 8, 2007 and filed on August 30, 2007, and incorporated herein by
      reference.

(14)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      August 24, 2007 and filed on August 27, 2007, and incorporated herein by
      reference.

(15)  Filed as an exhibit to Registrant's Current Report on Form 8-K/A, dated
      August 24, 2007 and filed on August 29, 2007, and incorporated herein by
      reference.

(16)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      September 4, 2007 and filed on September 6, 2007, and incorporated herein
      by reference.

(17)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      September 5, 2007 and filed on September 10, 2007, and incorporated herein
      by reference.

(18)  Filed as an exhibit to Registrant's Current Report on Form 8-K/A, dated
      September 5, 2007 and filed on October 4, 2007, and incorporated herein by
      reference.

(19)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      September 28, 2007 and filed on October 1, 2007, and incorporated herein
      by reference.

                                       36(20)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      October 9, 2007 and filed on October 10, 2007, and incorporated herein by
      reference.

(21)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      October 22, 2007 and filed on October 23, 2007, and incorporated herein by
      reference.

(22)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      December 20, 2007 and filed on December 27, 2007, and incorporated herein
      by reference.

(23)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      January 30, 2008, and filed on February 6, 2008, and incorporated herein
      by reference.

(24)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      February 11, 2008, and filed on February 14, 2008, and incorporated herein
      by reference.

(25)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      February 22, 2008, and filed on March 4, 2008, and incorporated herein by
      reference.

(26)  Filed as an exhibit to Registrant's From S-8, dated June 21, 2004, and
      incorporated herein by reference.

(27)  Filed as an exhibit to Registrant's Annual Report on Form 10-K, dated
      April 17, 2006 and filed April 17, 2006, and incorporated herein by
      reference.

(28)  Filed as an exhibit to Registrant's Quarterly Report on Form 10-Q for the
      quarter ended June 30, 2005 and filed on August 15, 2005, and incorporated
      herein by reference.

(29)  Filed as an exhibit to Registrant's Quarterly Report on Form 10-Q for the
      quarter ended March 31, 2006 and filed May 15, 2006, and incorporated
      herein by reference.

(30)  Filed as an exhibit to Registrant's Quarterly Report on Form 10-Q for the
      quarter ended June 30, 2006 and filed August 11, 2006, and incorporated
      herein by reference.

(31)  Filed as an exhibit to Registrant's Annual Report on Form 10-K for the
      year ended December 31, 2006 and filed on April 2, 2007 and incorporated
      herein by reference.

(32)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      March 12, 2008, and filed on March 14, 2008, and incorporated herein by
      reference.

(33)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated June
      8, 2008 and filed on June 10, 2008, and incorporated herein by reference.

(34)  Filed as an exhibit to Registrant's Annual Report on Form 10-K for the
      year ended December 31, 2007 and filed on April 15, 2008 and incorporated
      herein by reference.

(35)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      April 10, 2008 and filed on April 14, 2008, and incorporated herein by
      reference.

(36)  Filed as an exhibit to Registrant's Quarterly Report on Form 10-Q for the
      quarter ended March 31, 2008 and filed May 15, 2008, and incorporated
      herein by reference.

(37)  Filed as an exhibit to Registrant's Annual Report on Form 10-K for the
      year ended December 31, 2007 and filed on April 15, 2008 and incorporated
      herein by reference.

                                       37(38)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      January 30, 2008, and filed on February 6, 2008, and incorporated herein
      by reference.

(39)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      February 11, 2008, and filed on February 14, 2008, and incorporated herein
      by reference.

(40)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      February 22, 2008, and filed on March 4, 2008, and incorporated herein by
      reference.

(41)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      March 12, 2008, and filed on March 14, 2008, and incorporated herein by
      reference.

(42)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      April 10, 2008 and filed on April 14, 2008, and incorporated herein by
      reference.

(43)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      April 16, 2008 and filed on April 18, 2008, and incorporated herein by
      reference.

(44)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated
      April 24, 2008 and filed on April 30, 2008, and incorporated herein by
      reference.

(45)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated May
      16, 2008 and filed on May 20, 2008, and incorporated herein by reference.

(46)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated May
      27, 2008 and filed on June 2, 2008, and incorporated herein by reference.

(47)  Filed as an exhibit to Registrant's Current Report on Form 8-K, dated June
      3, 2008 and filed on June 5, 2008, and incorporated herein by reference.

(48)  Filed as an exhibit to Registrant's Transition Report on Form 10-K for the
      transition period from January 1, 2008 to March 31, 2008 and incorporated
      herein by reference.

                                       38logo

Australian Secured Financial Limited
ABN 74 120 340 507



General Purpose Financial Report
For the year ended
30 June 2008AUSTRALIAN
SECURED FINANCIAL LIMITED ACN 120 340 507 and
Controlled Entities

DIRECTORS REPORTYour
  directors present their report on the company and its controlled entities for
  the year ended 30 June 2008.The names of
  the directors in office at any time during, or since the end of, the year
  are:John Paul Margerison (resigned 16/04/2008)Jonathan Philip PepperAlan Charles MargerisonRussell MurphyPhilip Briggs (appointed 27/11/2007, resigned 15/01/2008)Damien Simonfi (appointed 16/04/2008)Directors have been in
  office since the start of the year to the date of this report unless otherwise
  stated.The consolidated profit of
  the economic entity for the financial year after providing for income tax and
  eliminating outside equity interests amounted to $354,727 (2007: $668,609).During the financial year
  ended 30 June 2008, two 100% owned subsidiaries of Australian Secured
  Financial Limited were sold. Australian Secured Investments Limited ABN 33
  090 730 886 was sold on 30 November 2007, and Auslink Limited ABN 36 122 521
  251, a second short term lending company was sold on the 1st of June 2008.
  The entities which are included in the economic entity are:Australian Secured Financial LimitedAustralian Secured Investments Limited
  (30/11/2007)ADJ Services Pty LimitedAuslink Ltd (01/06/2008)Ausec Finance Limited (formerly DJ
  Managed Funds Ltd, acquired on 20/11/2007)No significant change in
  the nature of these activities occurred during the period.No matters or circumstances
  have arisen since the end of the financial year which significantly affected
  or may significantly affect the operations of the economic entity, the
  results of those operations, or the state of affairs of the economic entity
  in future financial years.Likely developments in the
  operations of the economic entity 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 economic entity.The economic entitys
  operations are not regulated by any significant environmental regulation
  under a law of the Commonwealth or of a state or territory.Dividends paid or declared
  since the start of the financial year are as follows:a.     No Dividends were declared
  or paid during the year ended 30 June 2008.The service company ADJ
  Services Pty Ltd has paid a premium in respect of a contract insuring the
  directors of the company (as named above), against a liability incurred as
  such a director, secretary or executive officer to the extent permitted by
  the Corporations Act 2001. The contract of insurance prohibits disclosure of
  the nature of the liability and the amount of the premium.No indemnities have been
  given or insurance premiums paid, during or since the end of the financial
  year, for any person who has been an auditor of the economic entity.No person has applied for
  leave of Court to bring proceedings on behalf of the company or intervene in
  any proceedings to which the company is a party for the purpose of taking
  responsibility on behalf of the company for all or any part of those
  proceedings.The company was not a party
  to any such proceedings during the period.2

AUSTRALIAN
SECURED FINANCIAL LIMITED ACN 120 340 507 and
Controlled Entities

Directors
and Company officers

Jonathan
Pepper  Director/Secretary

Jon has a background spanning 13 years in
financial services and banking, commencing with Suncorp Metway, a prominent,
national, publicly listed provider of banking, insurance and investment
services.

During his tenure with that group he was
involved in the provision of personal and business banking services where he
was afforded the opportunity to develop skills in the areas of lending,
collections, deposit taking, distribution, planning, reporting, coaching and
general management of large teams with a strong focus on building a profitable
business.

Jon is a director and shareholder of ASFL, the
parent company, and his role within the group is to foster relationships with
intermediaries, initiate new loan applications, contribute to the credit
committee, manage collections and oversee the lending and credit process. Jon
holds a Diploma of Mortgage Lending (Finsia).

John
Margerison  Director (resigned 16/04/2008)

John is a director of companies that include
DJ Capital Holdings Pty Ltd, DJ Capital Solutions Pty Ltd and DJ Property Pty
Ltd. He has a broad investment and finance background and draws from experience
gained in retail & aged care sectors, the conduct of residential
subdivision/property renovation and ownership of a retail and service based
business.

John was involved in Ausec Finances
Investment and Credit Committee with a brief to identify transaction viability
or potential issues that may affect timely repayment of Ausec Finance loans.
John holds a Bachelor of Commerce Degree (Bond University), a Diploma of
Financial Planning (Securities Institute) and a Diploma of Mortgage Lending
(Finsia).

Alan
Margerison - Director

Alan was the President, Chief Executive
Officer of IA Global Inc., a publicly listed company on the American Stock
Exchange (symbol:IAO), from October 2002 to August 2005. IA Global Inc. acts as
a holding company making strategic acquisitions of growth businesses in Japan
and the US.

Alan was appointed as a Director of Ausec
Finance Limited on inception of the company. Alan is involved in Ausec
Finances strategic planning and finance committee.

Alan holds a Bachelor of Laws (QUT) and a
Diploma of Mortgage Lending (Finsia).

Russell
Murphy  Director

Russell has over 30 years of experience in property
finance. Before joining the group six years ago, he spent the prior 17 years in
various senior roles with an institution where he managed loan portfolios
variously for its bank, mortgage trust, finance company, life insurance company
and general insurance company.

Russell is a director of Advance Investment
Securities Australia Pty Ltd, member of a residential and commercial
distribution group active in Australia and New Zealand. He has a Diploma of
Financial Services (Tribeca), is a Senior Associate of F.I.N.S.I.A and a member
of the Australian Institute of Company Directors. He is a director of Ausec
Finance Limited (AuSec), participates in AuSecs Investment and Credit
Committee and contributes to the raising of funds for the group.

3

AUSTRALIAN
SECURED FINANCIAL LIMITED ACN 120 340 507 and
Controlled Entities

Damien Simonfi - Director
(Appointed 16/04/2008)

Damien started in
debt recovery in 1999 for Advanced Credit Management. Damien has since worked
for numerous major sub prime & non conforming lenders. His background in
recovery and commercial exit strategy has seen him in several management
positions since joining the group in January 2006. He was elected to the board
on the 16th of April 2008.

Damien is a
director and shareholder of ASFL and his role within the group is to research
and provide exit strategies for Ausec Finance customers who are in default.

Damien is also a
director of Auslink Pty Ltd, ADJ Services Pty Ltd, and Australian Recovery
Corporation Pty Ltd, an entity that provides recovery services to Ausec
Finance.

Philip Briggs  Director (Appointed 27/11/2007, Resigned
15/01/2008)

Philip was appointed the companys CEO and appointed on to the board of
directors. Philip was involved in the day to day operations of Ausec Finance,
from liaising with brokers and clients to final approval of loans. He left the
company to return to Sydney in January.

Directors
Meetings

The
following table sets out the number of director meetings held during the year
and the number of meetings attended by each director (while they were a
director). During the year there were 12 board meetings of Australian Secured
Financial Limited.

Board Meetings
No. of meetings held 
  while a Director
No. of meetings attendedJohn Margerison
10
10Jonathan Pepper
12
12Alan Margerison
12
12Damien Simonfi
2
2Philip Briggs
1
1Russell Murphy
12
12Auditor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 5.

Signed in accordance with a
resolution of the Board of Directors:

Director
/s/ Jonathan PepperJonathan
PepperDated this
  30th day of October 20084

AUSTRALIAN
SECURED FINANCIAL LIMITED ACN 120 340 507 and
Controlled Entities

AUDITORS INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF AUSTRALIAN SECURED FINANCIAL LIMITED

I declare that, to the best of
my knowledge and belief, in relation to the audit of Australian Secured Financial
Limited and its subsidiaries for 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./s/ BentleysBentleys Brisbane PartnershipChartered
  Accountants/s/ Martin
  PowerPM
PowerPartnerLevel 26, AMP Place10 Eagle streetBrisbane QLD 4001


Dated this 30th day of October
2008

5

AUSTRALIAN
SECURED FINANCIAL LIMITED ACN 120 340 507 and
Controlled Entities

INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2008

Note

Economic Entity

Parent Entity2008
  $

2007
  $

2008
  $

2007
  $Revenue


2


664,303


673,220


3,964


1,751,844Other income


3d








559,352


Finance costs


3a


(400,005
)

(148,109
)

(81,275
)

(148,109
)Bad and doubtful debts


3b











Other expenses


3c


(629,091
)

(157,276
)

(48,620
)

(50,113
)Profit/(loss) before income tax





(364,793
)

367,835


433,421


1,553,622Income tax expense


4a


125,403


(171,205
)

(219,374
)

(4,086
)Profit/(loss) from continuing operations





(239,390
)

196,630


214,047


1,549,536Profit/(loss) from discontinued operations


28


594,117


471,979





Profit for the year





354,727


668,609


214,047


1,549,536Dividends per share (cents)














36.45The accompanying notes from part of these
financial statements.

6



AUSTRALIAN
SECURED FINANCIAL LIMITED ACN 120 340 507 and
Controlled Entities

BALANCE SHEET AS AT 30 JUNE 2008

Note

Economic Entity

Parent Entity2008
  $

2007
  $

2008
  $

2007
  $ASSETSCash and cash equivalents


8


884,804


1,973,875


4,723


197,539Trade and other receivables


9


39,356


113,687





Loans and advances to customers


10


8,267,434


30,905,341


875,000


Other assets


11


93,981


2,625


695


927Property, plant and equipment


12


94,686


118,260





Deferred tax assets


13


8,246


157,443





Intangible assets


14





8,400





Other financial assets


15








500,104


1,408,600TOTAL ASSETS





9,388,507


33,279,631


1,380,522


1,607,066LIABILITIESTrade and other payables


17


107,800


1,969,242


150,000


3,240Promissory notes and other liabilities
  evidenced by paper


18


8,784,864


31,164,418


655,931


1,350,000Current tax liabilities


19


109,412


136,502


109,412


4,086Deferred tax liabilities


19





3,614


1,392


TOTAL LIABILITIES





9,002,076


33,273,776


916,735


1,357,326NET ASSETS





386,431


5,855


463,787


249,740EQUITYIssued capital


20


200,204


200,204


200,204


200,204Retained earnings





186,227


(194,349
)

263,583


49,536TOTAL EQUITY





386,431


5,855


463,787


249,740The
accompanying notes from part of these financial statements.

7

AUSTRALIAN
SECURED FINANCIAL LIMITED ACN 120 340 507 and
Controlled Entities

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

Economic Entity

Note

Ordinary
  Share Capital
  $

Retained 
  earnings
  $

Total
  $Balance at 1 July 2006





200


637,042


637,242Shares issued during the period





200,004





200,004Profit attributable to members of economic
  entity








668,609


668,609Subtotal





200,204


1,305,651


1,505,855Dividends paid or provided for








(1,500,000
)

(1,500,000
)Balance at 30 June 2007





200,204


(194,349
)

5,855Shares issued during the period


20








Profit attributable to members of economic
  entity








354,727


354,727Transfers out of retained equity due to
  disposal of entities








25,849


25,849Sub-total





200,204


186,227


386,431Dividends paid or provided for











Balance at 30 June 2008


20


200,204


186,227


386,431Parent EntityBalance at 1 July 2006





200





200Shares issued during the period





200,004





200,004Profit attributable to members of parent
  entity








1,549,536


1,549,536Sub-total





200,204


1,549,536


1,749,740Dividends paid or provided for








(1,500,000
)

(1,500,000
)Balance at 30 June 2007





200,204


49,536


249,740Shares issued during the period


20








Profit attributable to members of parent
  entity








214,047


214,047Sub-total





200,204


263,583


463,787Dividends paid or provided for











Balance at 30 June 2008


20


200,204


263,583


463,787The accompanying notes form part of these
financial statements

8

AUSTRALIAN
SECURED FINANCIAL LIMITED ACN 120 340 507 and
Controlled Entities

CASH FLOW STATEMENT FOR THE YEAR ENDED 30
JUNE 2008

Note

Economic Entity


Parent Entity2008
  $

2007
  $

2008
  $

2007
  $CASH FLOWS FROM OPERATING ACTIVITIESReceipts
  from customers





111,483


392,216





Proceeds
  from bank interest





249,923


447,494


3,965


1,844Dividends
  Received














1,750,000Interest
  received from loans





1,824,218


5,044,073





Payments to
  suppliers and employees





(1,723,532
)

(2,001,717
)

(55,716
)

(47,800
)Finance
  costs paid





(1201,352
)

(1,619,021
)

(81,275
)

(148,109
)Income tax
  paid





(208,467
)

(681,428
)

(108,568
)

Net cash
  provided by (used in) operating activities


21


(947,727
)

1,581,617


(241,594
)

1,555,935CASH FLOWS FROM INVESTING ACTIVITIESPayments for
  additional share investments











(350,000
)

Purchase of
  property, plant and equipment





(168
)

(120,185
)




Proceeds
  from share redemption











1,367,748


Goodwill
  acquired








(8,400
)




Purchase/sale
  of subsidiaries net of cash acquired


21b


(18,449,117
)




600,100


(8,600
)Loans issued
  to Customers





(16,441,963
)

(61,182,407
)

(875,000
)

Loans issued
  to others





(360,000
)







Proceeds
  from repayments of Customer loans





35,503,280


52,149,190





Net cash
  provided by (used in) investing activities





252,032


(9,161,802
)

742,848


(8,600
)CASH FLOWS FROM FINANCING ACTIVITIESProceeds
  from issue of shares








200,004





200,004Proceeds
  from borrowings





203,301


8,325,000


(694,069
)

Proceeds
  from bank borrowings





19,897,887








Proceeds
  from issue of debentures








13,697,926





Proceeds
  from issue of subordinated debt








1,987,187





Repayment of
  subordinated debt





(94,067
)

(805,454
)




Repayment of
  Debentures





(8,031,503
)

(12,370,395
)




Repayment of
  borrowings





(12,368,994
)

(3,895,000
)




(50,000
)Dividends
  paid








(1,500,000
)




(1,500,000
)Net cash
  provided by (used in) financing activities





(393,376
)

5,639,268


(694,069
)

(1,349,996
)Net increase
  in cash held





(1,089,071
)

(1,940,917
)

(192,815
)

197,339Cash at
  beginning of year





1,973,875


3,914,792


197,539


200Cash at end
  of year


8


884,804


1,973,875


4,724


197,5399

AUSTRALIAN
SECURED FINANCIAL LIMITED ACN 120 340 507 and
Controlled Entities

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

Note
1: Statement of Significant Accounting Policies

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

The financial report covers
Australian Secured Financial Limited (the company) and the following 100% owned
subsidiaries:

1.
Australian
  Secured Investments Limited - a company limited by shares, incorporated and
  domiciled in Australia (sold 30/11/2007).2.
Auslink
  Limited - a company limited by shares, incorporated and domiciled in
  Australia (sold 01/06/2008).3.
ADJ Services
  Pty Ltd - a company limited by shares, incorporated and domiciled in
  Australia.4.
Ausec
  Finance Limited - a company limited by shares, incorporated and domiciled in
  Australia.The company and its
subsidiaries are referred to hereafter as the economic or consolidated entity.

The financial report of
Australian Secured Financial Limited complies with all Australian equivalents
to International Financial Reporting Standards (IFRS) in their entirety.

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

Basis
of Preparation

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

Reporting Basis and Conventions

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

Accounting Policiesa.
Principles of ConsolidationA controlled
  entity is an entity controlled by Australian Secured Financial Limited.
  Control exists where Australian Secured Financial Limited has the capacity to
  dominate the decision making in relation to the financial and operating
  policies of another entity so that the other entity operates with Australian
  Secured Financial Limited to achieve the objectives of Australian Secured
  Financial Limited. Details of the controlled entities are contained in Note
  16.All
  inter-company balances and transactions between entities in the economic entity,
  including any unrealised profits or losses, have been eliminated on
  consolidation.Where a
  controlled entity has entered or left the economic entity during the year its
  operating results have been included from the date control was obtained or until
  the date control ceased.b.
Income TaxThe movement for current
  income tax expenses is based on the profit for the year adjusted for any
  non-assessable or disallowed items. It is calculated using tax rates that
  have been enacted or are substantively enacted by the balance sheet date.Deferred tax is accounted
  for using the balance sheet liability method in respect of temporary
  differences arising between the tax bases of assets and liabilities and their
  carrying amounts in the financial statements. No deferred income tax will be
  recognised from the initial recognition of an asset or liability, excluding a
  business combination, where there is no effect on accounting or taxable
  profit or loss.10

AUSTRALIAN SECURED FINANCIAL LIMITED
ACN 120 340 507 and Controlled Entities

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

Note 1: Statement of Significant Accounting
  PoliciesDeferred tax
  is calculated at the tax rates that are expected to apply to the period when
  the asset is realised or liability is settled. Deferred tax is credited in
  the income statement except where it relates to items that may be credited
  directly to equity, in which case the deferred tax is adjusted directly
  against equity.Deferred
  income tax assets are recognised to the extent that it is probable that
  future tax profits will be available against which deductible temporary
  differences can be utilised.The amount
  of benefits brought to account or which may be realised in the future is
  based on the assumption that no adverse change will occur in income taxation
  legislation and the anticipation that the company will derive sufficient
  future assessable income to enable the benefit to be realised and comply with
  the conditions of deductibility imposed by the law.Tax ConsolidationAustralian
  Secured Financial 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 (assets) 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 2007. 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 either a contribution by, or distribution to
  the head entity.c.
Cash and cash equivalentsCash 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. Due to the nature of the groups business the overdraft
  facility is principally used to finance customer loans and as such is not
  classified as part of cash and cash equivalents.d.
Impairment of AssetsAt each reporting date, the company reviews the carrying amounts of
  its assets to determine whether there is any indication that those assets
  have suffered an impairment loss. If any such indication exists, the
  recoverable amount of the asset is estimated in order to determine the extent
  of the impairment loss.If the recoverable amount of a cash generating unit is estimated to
  be less than its carrying amount, the carrying amount of the cash generating
  unit is reduced to its recoverable amount.An impairment loss is recognised immediately in the income statement.
  Where an impairment loss subsequently reverses, the carrying amount of the
  asset is increased to the revised estimate of its recoverable amount, but
  only to the extent that the increased carrying amount does not exceed the carrying
  amount that would have been determined had no impairment loss been recognised
  for the asset. The reversal of an impairment loss is recognised immediately
  in income.11

AUSTRALIAN SECURED FINANCIAL LIMITED
ACN 120 340 507 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE
  YEAR ENDED 30 JUNE 2008e.
Financial InstrumentsRecognition and Initial MeasurementFinancial
  instruments, incorporating financial assets and financial liabilities, are
  recognised when the entity becomes a party to the contractual provisions of
  the instrument. Trade date accounting is adopted for financial assets that
  are delivered within timeframes established by marketplace convention.Financial
  instruments are initially measured at fair value 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.DerecognitionFinancial
  assets are derecognised where the contractual rights to receipt of cash flows
  expires or the asset is transferred to another party whereby the entity is 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) Financial assets at fair value through
  profit or lossFinancial
  assets are classified at fair value through profit of loss when they are held
  for trading for the purpose of short term profit taking, where they are
  derivatives not held for hedging purposes, or designated as such to avoid an
  accounting mismatch or to enable performance evaluation where a group of
  financial assets is managed by key management personnel on a fair value basis
  in accordance with a documented risk management or investment strategy.
  Realised and unrealised gains and losses arising from changes in fair value
  are included in profit or loss in the period in which they arise.Loans and receivablesLoans and receivables are measured at cost on trade date, this
  includes all transaction and other associated costs when the obligation
  exists. Interest is recorded as unearned income and amortised over the life
  of the loan.Held to maturity investmentsHeld to maturity investments are non derivative financial assets with
  fixed or determinable payments and fixed maturities. It is the companys
  intention to hold these investments to maturity.Promissory notes and other liabilities
  evidenced by paper - DebenturesGiven the cash flows arising under interest payment options, the
  present value of the future cash flows over the life of the note will equal
  (or be insignificantly different) to the issue price. Therefore the debenture
  is initially recorded at cost. This will be the equivalent of amortised cost
  across the life of the debenture.ImpairmentThe group assesses at each balance date whether there is objective
  evidence that a financial asset or group of financial assets is impaired. In
  the case of available-for-sale, a significant or prolonged decline in the
  fair value of a security below its cost is considered in determining whether
  the security is impaired. Impairment losses are recognised in the income
  statement.f.
ProvisionsProvisions
  are recognised when the company 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.12

AUSTRALIAN SECURED FINANCIAL LIMITED
ACN 120 340 507 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE
  YEAR ENDED 30 JUNE 2008Note 1: Statement of Significant Accounting
  Policies (continued)g.
Property, Plant and EquipmentEach class
  of property, plant and equipment is carried at cost or fair value less, where
  applicable, any accumulated depreciation and impairment losses.Plant and equipmentPlant 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.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.DepreciationThe
  depreciable amount of all fixed assets including buildings and capitalised
  lease assets, but excluding freehold land, 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 RatePlant and
  equipment
2.5 - 40%The assets
  residual values and useful lives are reviewed, and adjusted if appropriate,
  at each balance sheet date.An assets
  carrying amount is written down immediately to its recoverable amount if the
  assets carrying amount is greater than its estimated recoverable amount.Gains and
  losses on disposals are determined by comparing proceeds with the carrying
  amount. These gains 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.
RevenueInterest
  revenue is recognised using the effective interest rate method, which, for
  floating rate financial assets is the rate inherent in the instrument.
  Dividend revenue is recognised when the right to receive a dividend has been
  established.Dividends
  received from associates and joint venture entities are accounted for in
  accordance with the equity method of accounting.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.All revenue
  is stated net of the amount of goods and services tax (GST).13

AUSTRALIAN SECURED FINANCIAL LIMITED
ACN 120 340 507 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE
  YEAR ENDED 30 JUNE 2008Note 1: Statement of Significant Accounting Policies (continued)i.
Critical accounting estimates and judgmentsIn preparing this financial report the directors were required to
  make estimates and assumptions. These estimates and assumptions are based on
  historical experience and various other factors that are believed to be
  reasonable under the circumstances. Actual results may differ from these
  estimates. The estimates and underlying assumptions are reviewed on an
  ongoing basis.j.
Goods and Services Tax (GST)Revenues, expenses and assets are recognised net of the amount of
  goods and service tax, except where the amount of GST incurred is not
  recoverable from the Australian Tax Office. It is recognised as part of the
  cost of acquisition of an asset or as part of an item of the expense.Receivables and payables are shown inclusive of GST on the balance
  sheet.Cash flows are presented in the Cash Flow Statement on a gross basis,
  except for the GST component of investing and financing activities, which is
  included in operating cash flows.k.
Key estimates  ImpairmentThe group
  assesses impairment at each reporting date by evaluating conditions specific
  to the group that may lead to impairment of assets. Where an impairment
  trigger exists, the recoverable amount of the asset is determined.
  Value-in-use calculations performed in assessing recoverable amounts
  incorporate a number of key estimates. No impairments were recognised during
  the year as no impairment triggers were identified.Impairment of Assetsl.
Loans and advances to customersLoans and
  advances to customers are measured at cost which is equal to fair value.
  Loans are tested for impairment on a regular basis by the credit committee,
  which consists of senior lenders and management. It was determined by the committee that
  all loans were recoverable in full as at 30 June 2008.m.
Comparative FiguresWhen
  required by Accounting Standards, comparative figures have been adjusted to
  conform to changes in presentation for the current financial year.n.
Statement of ComplianceThe financial report complies with Australian Accounting Standards
  which include Australian equivalents to International Financial Reporting
  Standards (AIFRS). Compliance with AIFRS ensures that the full year financial
  report, comprising the financial statements and notes complies with
  International Financial Reporting Standards (IFRS).o.
Fair ValueThe fair values of quoted investments are based on current bid
  prices. If the market for a financial asset is not active (and for unlisted
  securities), the company establishes fair value by using valuation
  techniques. These include reference to the fair values of recent arms length
  transactions, involving the same instruments or other instruments that are
  substantially the same, discounted cash flow analysis and option pricing
  models.p.
RoundingAmounts in the financial report have been rounded to the nearest
  dollar.14

AUSTRALIAN SECURED FINANCIAL LIMITED
ACN 120 340 507 and Controlled Entities

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

Economic Entity

Parent EntityNote

2008
  $

2007
  $

2008
  $

2007
  $Note 2: RevenueOperating
  activities dividends
  received














1,750,000 interest
  received





592,843


2,658


3,964


1,844 management
  fees





56,816


670,562





 loan fees





14,644








Total
  Revenue





664,303


673,220


3,964


1,751,844Note 3: Profit from Ordinary Activitiesa.
ExpensesCost of
  salesFinance
  costs: external





318,730








 related
  entities





81,275


148,109


81,275


148,109Total
  borrowing costs





400,005


148,109


81,275


148,109b.
Bad and doubtful debts:
trade receivables














Total bad
  and doubtful debts














Total





400,005


148,109


81,275


148,109c.
General Administration Expenses
Depreciation
  and amortisation





24,121


2,301


231



Employment
  costs





247,240


23,487






General
  administration





190,601


14,809


14,977


12,940
Legal Fees





24,656


2,679


25,412


2,280
Management
  Fees





142,473


114,000


8,000


34,893Total
  Expenses





629,091


157,276


48,620


50,113d.
Significant Revenue and ExpensesThe following significant revenue and
  expense items are significant in explaining the financial performance.
Consideration
  received on disposal of subsidiaries





600,100





600,100



Carrying
  amount of net assets sold





(503,786
)




40,748


21b


1,103,886





559,352


15

AUSTRALIAN SECURED FINANCIAL LIMITED
ACN 120 340 507 and Controlled Entities

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

Economic Entity

Parent EntityNote

2008
  $

2007
  $

2008
  $

2007
  $Note 4: Income Tax Expensea.
The
  components of tax expense comprise:Current tax




(270,986
)

328,358


219,374


4,086Deferred tax
  asset/liability movements (Note 19)




145,583


(157,153
)




Income tax
  expense




(125,403
)

171,205


219,374


4,086b.
The prima
  facie tax on profit from ordinary activities before income tax is reconciled
  to the income tax as follows:Prima facie
  tax payable on profit from ordinary activities before income tax at 30%
  (2007: 30%)
prima face
  tax on profit




(109,438
)

112,919


130,026


466,086Add tax effect of:
franking
  credits on dividends received













198,000
unfranked
  dividends received







63,000






other
  adjustments




8,288





90,156


101,150


175,919


220,182


664,086Less tax effect of:
other







(4,714
)

(808
)


dividend
  franking credits













(660,000
)
difference
  in tax and book value of subsidiaries disposed




(24,253
)







Income tax
  attributed to members of the group




(125,403
)

171,205


219,374


4,086The
  applicable weighted average effective tax rates are as follows:




34
%

45
%

51
%

30
%c.
The
  reconciliation between income tax expense for continuing operations and discontinued
  operations is as follows:Tax expense
  / (credit) from:
Continuing
  operations




(125,403
)

171,205


219,374


4,086
Discontinued
  operations




254,621


202,277





Total income
  tax expense




129,218


373,482


219,374


4,08616

AUSTRALIAN SECURED FINANCIAL LIMITED
ACN 120 340 507 and Controlled Entities

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

Note 5: DividendsDistributions
  paidNo dividends were declared or paid (2007:
  $1,500,000 franked at the tax rate of 88%)





1,500,000





1,500,000Balance of franking account at year end
  adjusted for franking credits arising from
opening
  balance


817,929


287,294


98,372



payment of
  provision for income tax


62,945


136,501


130,026


4,086
tax
  instalments paid in year


30,000


394,134


30,000



franking
  credits on dividends received











660,000
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











(565,714
)Balance of franking account 30 June


910,874


817,929


258,398


98,372Note 6: Key Management Personnel
  CompensationKey Management PersonnelDirectorsJonathan Philip Pepper
John Paul Margerison (resigned 16/04/2008)Russell Murphy
Damien Simonfi (appointed 16/04/2008)Alan Charles Margerison
Philip Briggs (appointed 27/11/2007,
  resigned 15/01/2008)Other Key Management PersonnelKiara Brace  Chief Operating Officer
  (resigned 21/12/2007)Short-term benefits

Post employment benefit2008

Salary &Fees

Super-annuation

Bonus

Non-CashBenefits

Super-annuation

Total$

$

$

$

$

$Total compensation


217,161


19,419











236,5792007Total compensation


464,955


39,497











504,45217

AUSTRALIAN SECURED FINANCIAL LIMITED
ACN 120 340 507 and Controlled Entities

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

Economic Entity

Parent EntityNote

2008
  $

2007
  $

2008 
  $

2007
  $Note 7: Auditors RemunerationRemuneration of the auditor of the parent
  entity for:
auditing or
  reviewing the financial report



36,000

64,538

19,000

17,240
factual
  findings report





5,720




assurance
  services regarding compliance with loan agreements



7,000






taxation
  services provided by related practice of auditor







11,000

43,000

70,258

30,000

17,240Note 8: Cash and cash equivalentsCash at bank
  and in hand



124,417

473,875

4,723

197,539Short-term
  bank deposits



760,387

1,500,000



884,804

1,973,875

4,723

197,539The effective interest rate on short-term
  bank deposits was 5.25% (2007: 6.10%); these deposits are at call.Reconciliation
  of cashCash 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



884,804

1,973,875

4,723

197,539884,804

1,973,875

4,723

197,539Note 8a:Cash not available for use by the economic entity as at 30 June 2008
  was: $826,403 (2007: nil). This is a requirement of the loan agreement
  between wholly owned subsidiary and its financiers, Suncorp-Metway Ltd. Under
  clause 15.3 Suncorp-Metway Ltd requires $750,000 or 40% of the largest loan amount
  to be kept in a reserve loss locked account for any losses incurred on loans.In addition clause 15.4 requires an interest reserve account to be
  established and maintained, requiring an additional $61,016 of prepaid
  interest to be kept aside each month to cover the following months interest.
  This amount changes as the loan book changes both increasing and decreasing
  each month. Both these conditions were met for the year ended 30 June 2008.18

AUSTRALIAN SECURED FINANCIAL LIMITED
ACN 120 340 507 and Controlled Entities

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

Economic Entity

Parent EntityNote

2008
  $

2007
  $

2008
  $

2007
  $Note 9: Trade and other receivablesCURRENTTrade debtors



39,356

37,500



Accrued loan interest





55,076



Accrued bank interest





12,046



GST receivable





9,065



39,356

113,687



Note 10: Loans and advances to customersCURRENTLoans issued



8,267,434

31,199,830

875,000

Less provision for doubtful debts





(294,489
)


8,267,434

30,905,341

875,000

Loans and advances to
  customers are secured by way of a first registered mortgage. All loans comply
  with Australian Secured Financial Limited policy with no related party
  lending.Note 11: Other AssetsCURRENTPrepayments



25,807





Formation & Borrowing costs



68,124

2,625

695

92793,981

2,625

695

927Note 12: Property, Plant And EquipmentAt cost



120,731

120,184



Accumulated depreciation



(26,045
)
(1,924
)


Total plant and equipment



94,686

118,260



19

AUSTRALIAN SECURED FINANCIAL LIMITED
ACN 120 340 507 and Controlled Entities

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

Note
12: Property, Plant And Equipment (continued)

Plant and Equipment

Leased Plant and Equipment

Total$

$

$a.
Movements in Carrying AmountsMovement in
  the carrying amounts for each class of property, plant and equipmentEconomic Entity:Balance at 1 July 2006








Additions


120,185





120,185Disposals








Depreciation


(1,925
)




(1,925
)Balance at 1 July 2007


118,260





118,260Additions


547





547Disposals








Depreciation
  expense


(24,121
)




(24,121
)Balance at 30 June 2008


94,686





94,686Parent Entity:Balance at 1 July 2006








Additions








Disposals





Depreciation








Balance at 1 July 2007








Additions








Disposals








Depreciation
  expense








Balance at 30 June 2008








b.
Impairment LossesNo
  impairment loss was recognised in the income statement during the period as
  no impairment triggers existed, if an impairment trigger did exist it would
  be separately presented in the income statement as impairment loss.20

AUSTRALIAN SECURED FINANCIAL LIMITED
ACN 120 340 507 and Controlled Entities

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

Note 13: Deferred Tax Asset

Economic
  Entity

Parent
  Entity2008
  $

2007
  $

2008
  $

2007
  $Balance (Refer Note 19)


8,246


157,443





8,246


157,443





Note 14: Intangible Assets

GoodwillCost





8,400





Net carrying Value





8,400





Reconciliation of GoodwillBalance at beginning of year


8,400








Additions





8,400





Disposals


(8,400
)







Closing carrying value at 30 June 2008





8,400





Note 15: Other
financial assets

Economic
  Entity

Parent
  Entity2008
  $

2007
  $

2008
  $

2007
  $Investment in subsidiary companies








500,104


1,408,600





500,104


1,408,60021

AUSTRALIAN SECURED FINANCIAL LIMITED
ACN 120 340 507 and Controlled Entities

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

Note 16: Subsidiary
Companies

a. Interests are or were held in the following
  subsidiary companiesSubsidiary

Principal Activity

Country of
  Incorporation

Ownership Interest
  & voting power

Carrying amount of 
  Investment2008
%

2007
%

2008
$

2007
$Australian
  Secured
  Investments Limited

Short term
  loans

Australia





100





1,408,400Auslink
  Limited

Short term
  loans

Australia





100





100ADJ Services
  Pty Ltd

Service
  entity

Australia


100


100


100


100Ausec
  Finance Limited

Short term
  loans

Australia


100





500,004


b. Disposal of controlled entities

On 30 November 2007, the
parent entity disposed of its 100% interest in Australian Secured Investments
Limited. An operating loss of $57,179 was attributable members of the parent
entity.

On 1 June 2008, the parent
entity disposed of its 100% interest in Auslink Limited. An operating los of
$197,970 was attributable to members of the parent entity.

c. Acquisition of controlled entities

On 20 November 2007, the
parent entity acquired 100% of Ausec Finance Limited (formerly DJ Managed Funds
Limited), for a purchase consideration of $4.

Note 17: Trade and
other payables

Economic
  Entity

Parent
  Entity2008 
  $

2007 
  $

2008 
  $

2007 
  $CURRENTRelated
  party payables








150,000


Unearned
  revenue


36,480


256,201





Trade
  payables


42,746


66,342





3,240Accrued
  expenses


28,574


1,646,699





107,800


1,969,242


150,000


3,24022

AUSTRALIAN SECURED FINANCIAL LIMITED
ACN 120 340 507 and Controlled Entities

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

Note 18: Promissory
notes and other liabilities evidenced by paper

Note

Economic Entity

Parent Entity2008
  $

2007
  $

2008
  $

2007
  $CURRENTSecured(i) Bank loans




7,329,455








(ii) Debenture Certificates Issued







17,740,324





UnsecuredRelated party




1,105,409





305,931


Subordinated loans







1,181,733





NON-CURRENTSecuredDebenture Certificates Issued







6,412,361





UnsecuredLoan




350,000


5,830,000


350,000


1,350,0008,784,864


31,164,418


655,931


1,350,000(i)
All bank loans are secured by way of a first registered mortgage as per the
facility agreement between Ausec Finance Ltd and Suncorp-Metway Ltd.

(ii) Debenture certificates
were secured by a floating charge over the Australian Secured Investments
Limited assets and a first registered mortgage.

23

AUSTRALIAN SECURED FINANCIAL LIMITED
ACN 120 340 507 and Controlled Entities

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

Note 19: Tax

Note

Economic Entity

Parent Entity2008
  $

2007
  $

2008
  $

2007
  $a.
CURRENTIncome tax


109,412


136,502


109,412


4,086NON-CURRENTDeferred tax liability comprises:Other





3,614


1,392


b.
AssetsNON-CURRENTDeferred tax assets comprise:Carry forward subsidiary losses





147,804





Provisions


8,246


9,639


8,246


157,443





c.
Reconciliationsi.
Gross MovementsThe overall movement in the deferred taxaccount is as follows:Opening balance


153,829


(3,324
)




(Charge/credit to income statement)


(145,583
)

157,153





Closing balance


8,246


153,829





ii.
Deferred Tax LiabilityThe movement in deferred tax liability for
  each temporary difference during the year is as follows:OtherOpening balance


(3,614
)

(3,324
)




Charged to the income statement


3,614


(290
)

(1,392
)

Closing balance





(3,614
)

(1,392
)

iii.
Deferred Tax AssetsThe movement in deferred tax assets for
  each temporary difference during the year is as follows:Opening balance


157,443








Carry forward losses of subsidiary credited
  tothe income statement


(149,197
)

147,804





Provisions credited to the income statement





9,639Closing balance


8,246


157,443





24

AUSTRALIAN SECURED FINANCIAL LIMITED
ACN 120 340 507 and Controlled Entities

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

Note

Economic Entity

Parent Entity2008
  $

2007
  $

2008
  $

2007
  $Note 20: Issued Capital4,114,288 fully paid ordinary shares


200,204


200,204


200,204


200,204200,204


200,204


200,204


200,204The company
  has authorised share capital amounting to 4,114,288 ordinary shares of no par
  value.Ordinary Shares


No.

No.

No.

No.At the beginning of reporting period


4,114,288


20,000


4,114,288


20,000Shares issued during period 11/10/2006





4,094,288





4,094,288At reporting date


4,114,288


4,114,288


4,114,288


4,114,288On 22 June
2006 the company issued 20,000 ordinary shares at $0.01 each called to 0.01
cents. 
On 8 August 2006 the company split the original 20,000 shares into 4,000,000
ordinary shares.
On 2 October 2006 the company issued 114,288 ordinary shares.

No further
shares were issued in the period between 30 June 2007 and 30 June 2008.

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

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

Capital Management

Management controls the capital of the group
in order to maintain sufficient liquidity and provide the shareholders with
adequate returns to ensure that the company 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.

There
have been no changes in the strategy adopted by management to control the
capital of the group since the prior year.

Economic Entity

Parent Entity2008

2007

2008

2007Total borrowings
18

8,784,862


31,164,418


655,931


1,350,000Trade and other payables
17

107,800


1,969,424


150,000


3,240Less cash and cash equivalents
8

(889,804
)

(1,973,875
)

(4,723
)

(197,539
)Net debt


8,002,858


31,159,967


801,208


1,155,701Total equity


386,431


5,855


463,787


249,740Total capital


8,389,289


31,165,822


1,264,995


1,405,441Gearing ratio


95.43
%

99.98
%

63.33
%

82.23
%25

AUSTRALIAN SECURED FINANCIAL LIMITED
ACN 120 340 507 and Controlled Entities

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

Note 21: Cash Flow Information

Economic Entity

Parent Entity2008
  $

2007
  $

2008
  $

2007
  $a.
Reconciliation of Cash Flow from Operations with Profit from
Ordinary
  Activities after Income TaxProfit from ordinary activities after
  income tax


354,727


668,609


241,047


1,549,536Non-cash flows in profit from ordinary
  activitiesGain on disposal of subsidiaries


(1,103,886
)




(559,352
)

Depreciation


24,121


1,925


231


Bad debts expense


6,399








Changes in assets and liabilities, net of
  the effects of purchase and disposal of subsidiaries(Increase)/decrease in trade and term
  debtors


58,126


58,029





(Increase)/decrease in other assets


145


(296
)




(927
)Increase/(decrease) in prepayments


(92,432
)







(Increase)/decrease in deferred tax
  balances


(49,955
)

(157,153
)




Increase/(decrease) in payables


(101,187
)

866,807


(3,240
)

3,240Increase/(decrease) in current tax
  liabilities


(6,002
)

(150,793
)

17,371


4,086Increase/(decrease) in provisions


(37,783
)

294,489


89,349


Cash flow from operations


(947,727
)

1,581,617


(241,594
)

1,555,935Note 21b Cash Flow InformationDuring the year, Australian Secured
  Investments Ltd and Auslink Ltd were sold. In the 2007 year, the Company
  acquired Australian Secured Investments Ltd.Aggregate details of these transactions
  are:Acquisition price











(8,600
)Disposal price


600,100





600,100


Cash consideration


600,100





600,100


Assets and liabilities held at date of
  disposal:Investment in controlled entities


38,959





40,748


Cash and cash equivalents


19,029,212








Customer loans receivable (net)


4,287,795








Other loans receivable


939,478








Other assets


168,506








Payables


(643,277
)







Loans and debentures payable


(24,324,459
)







(503,786
)




40,748


Gain on disposal


1,103,886





559,352


600,100





600,100


26

AUSTRALIAN SECURED FINANCIAL LIMITED
ACN 120 340 507 and Controlled Entities

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

Note 22: Events After the Balance Sheet
  Datea.
There has not been any matter or circumstance, other than that
  referred to in the financial statements or notes thereto, that has arisen
  since the end of the financial year, that has significantly affected, or may
  significantly affect, the operations of the company, the results of these
  operations, or the state of affairs of the company in future financial yearsb.
The financial report was authorised for issue by the board of
  directors on the date that the directors declaration was signed.Note 23: Segment Reportinga.
Business SegmentThe company
  operates in one business segment being the provision of secured loans
  primarily to businesses in Australia. Information relating to the continuing
  operations and discontinued operations is as follows.Consolidated group
  (Continuing operations)

Discontinued operations2008
  $

2007
  $

2008
  $

2007
  $REVENUEExternal revenue


664,303


673,220


1,686,557


5,363,172Total revenue


664,303


673,220


1,686,557


5,363,172RESULTSegment result


(239,390
)

196,630


(178,604
)

471,979Finance costs


(400,005
)

(148,109
)

(911,039
)

(2,156,823
)Other expenses


(503,688
)

(328,481
)

(954,122
)

(2,734,370
)ASSETS











Segment assets


9,388,507


402,686





Discontinued assets








24,463,950


32,876,945


Total assets


9,388,507


402,686


24,463,950


32,876,945LIABILITIESSegment liabilities


9,002,076


1,472,630Discontinued operations liabilities








24,967,736


31,801,146Total liabilities


9,002,076


1,472,630


(24,967,736
)

b.
Geographical SegmentThe company
  operates in the one geographical segment being Australia.27

AUSTRALIAN SECURED FINANCIAL LIMITED
ACN 120 340 507 and Controlled Entities

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

Note 24: 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.

Australian Secured Financial
Limited:Following on from the
financial year end 30 June 2007, an unsecured loan of $1,400,000 at an interest
rate of 10% per annum was loaned to the company by Baildon Pty Ltd, a director
related company. The balance outstanding on this loan as at 30 June 2008 was
$nil (2007:$ 1,350,000).

During the year an unsecured
loan of $300,000 at an interest rate of 12% per annum was made from Caldy
Properties Pty Ltd, a director related company. The balance outstanding on this
loan as at 30 June 2008 was $305,931 (2007: nil).

During the year Australian
Secured Financial Limited paid $25,412 in legal professional fees to Davis
Lawyers, a company related to Mr Paul Davis (2007: $4,018).

During the year Australian
Secured Investments Ltd paid no dividends (2007: $1,750,000 franked at 88%) to
Australian Secured Financial Limited.

Management services were
provided to the company during the year by ADJ Services Pty Ltd, a director
related company. Fees charged for these services were $8,000 (2007: nil).

Auslink Limited:During the year an
unsecured loan of $3,500,000 at an interest rate of 12% per annum was made by
Baildon Pty Ltd, a director related company. The balance outstanding on this
loan at subsidiary disposal date was $nil (2007: $910,000).

During the year an unsecured
line of credit loan of $6,000,000 at an interest rate of 10.5% per annum with a
Line fee of $45,000 per annum payable monthly, was made by the Charles and
Colinette Margerison Trust, an entity related to Mr J Margerison and Mr A
Margerison. The balance outstanding on this loan at the subsidiary disposal
date was $5,452,778 (2007: $1,550,000).

During the year an unsecured
loan of $1,500,000 at an interest rate of 12% per annum, was made by the
Charles and Colinette Margerison Trust, an entity related to Mr J Margerison
and Mr A Margerison. The balance outstanding on this loan at the subsidiary
disposal date was $nil (2007: $1,430,000 nil).

During the year an unsecured
loan of $800,000 at an interest rate of 12% per annum from Caldy Properties Pty
Ltd a director related company was fully paid out, the balance on this loan at
the subsidiary disposal date was $nil (2007: $590,000).

During
the year Australian Secured Investments Limited assigned three loans to Auslink
Ltd, a company owned 100% by Australian Secured Financial Limited. The total of
these three loans amounted to $5,906,356 (2007: $1,641,184).

During the year Auslink
Limited paid $34,860 in legal professional fees to Davis Lawyers, a company
related to Mr Paul Davis (2007: $6,251).

Management services were
provided to the company during the year by ADJ Services Pty Ltd, a director
related company. Fees charged for these services were $385,350 (2007:
$170,149).

Australian Secured Investments
Limited:During the previous
year an unsecured subordinated loan of $540,000 at an interest rate of 8% per
annum, was made by IA Global Inc, a shareholder of Australian Secured Financial
Limited. The balance outstanding on this loan as at the subsidiary disposal
date was $nil (2007: $181,733).

During the previous year an
unsecured subordinated loan of $500,000 at an interest rate of 12% per annum,
was made by Nvesta Pty Ltd, a shareholder of Australian Secured Financial
Limited. The balance outstanding on this loan as at the subsidiary disposal
date was $nil (2007: $500,000).

28

AUSTRALIAN SECURED FINANCIAL LIMITED
ACN 120 340 507 and Controlled Entities

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

Note 24: Related Party Transactions
(continued)

During the previous year an
unsecured subordinated loan of $500,000 at an interest rate of 11% per annum,
was made by Baildon Pty Ltd, a director related company. The balance
outstanding on this loan at the subsidiary disposal date was $nil (2007:
$500,000).

During
the year Australian Secured Investments Limited assigned three loans to Auslink
Ltd, a company owned 100% by Australian Secured Financial Limited. The total of
these seven loans amounted to $5,906,356 (2007: $1,641,184).

During
the year Australian Secured Investments Limited assigned no loans to DJ Capital
Solutions Pty Ltd, a director related company (2007: $3,780,045 two loans).

Australian Secured
Investments Limited paid $377,296 to ADJ Services Pty Ltd, a director  related
company for management fees in relation to operating expenses for the period up
to the date of disposal of subsidiary being 30 November (2007: nil).

During the year Australian
Secured Investments Limited paid $186,668 in legal professional fees (a
significant proportion of which was on charged in loan service fees) to Davis
Lawyers, a company related to Mr Paul Davis (2007: $226,231).

ADJ Services Pty LtdDuring the year an
unsecured loan of $60,000 at an interest rate of 0% per annum was made by
Auslink Ltd, a director related company. The balance outstanding on this loan
as at 30 June 2008 was $60,000 (2007: nil).

During the year ADJ Services
Pty Ltd paid $99,888 (2007: $114,000) in management fees to DJ Capital Pty Ltd,
a director related company.

Legal fees of $15,416 (2007:
$399) were paid to Davis Lawyers a company related to Mr Paul Davis.

During the year ADJ Services
Pty Ltd received an amount of $500 (2007: $500) from the Charles and Colinette
Margerison trust, an entity related to Mr J Margerison and Mr A Margerison.
This fee was for administration services provided.

During the year ADJ Services
Pty Ltd received an amount of $155 (2007: $154) from the Nursing Home trust, an
entity related to Mr J Margerison and Mr A Margerison. This fee was for
administration services provided.

During the year ADJ Services
Pty Ltd received an amount of $100 (2007: Nil) from American Capital Reserve
Pty Ltd, a director related company. This fee was for administration services
provided.

During the year ADJ Services
Pty Ltd received an amount of $236 (2007: $9,090) from Loanbase Pty Ltd, a
director related company. This fee was for administration services provided.

During the year ADJ Services
Pty Ltd received an amount of $9,707 (2007: $384,609l) from DJ Capital Pty Ltd,
a director related company. This fee was for administration services provided.

Ausec Finance Limited

During the year Ausec Finance
Limited paid $417,268 to ADJ Services Pty Ltd, a director  related company for
management fees in relation to operating expenses (2007: nil).

During the year an unsecured
loan of $1,095,889 at an interest rate of 0% per annum was made by Auslink Ltd,
a director  related company. The balance outstanding on this loan as at 30
June 2008 was $799,477 (2007: nil).

Note 25: Economic DependenceThe primary source of funding is derived from a line of credit provided
by Suncorp-Metway to Ausec Finance Ltd. The facility is reviewed annually on
the anniversary of the original draw down date.

29

AUSTRALIAN SECURED FINANCIAL LIMITED
ACN 120 340 507 and Controlled Entities

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

Note 26: Financial Instrumentsa.
Financial Risk ManagementThe groups
  financial instruments consist mainly of deposits with banks, loans and
  advances to customers, promissory notes and other liabilities.The main
  purpose of non-derivative financial instruments is to raise finance for the
  groups operations.The group
  did not have any derivative instruments at 30 June 2008.i.
Treasury
  Risk ManagementA finance
  committee consisting of senior executives of the group meet on a regular
  basis to analyse financial risk exposure and to evaluate treasury management
  strategies in the context of the most recent economic conditions and
  forecasts.The committee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 committee
  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.ii.
Financial
  Risks Exposures and ManagementThe main
  risks the company is exposed to through its financial instruments are
  interest rate risk, liquidity risk and credit risk.iii.
Interest
  rate riskInterest rate risk is the
  risk that the fair value of the future cash flows of a financial instrument
  will fluctuate because of changes in the market interest rates. This risk is
  exposed through its loans to customers and its borrowings, and is managed
  with a mixture of fixed and floating rate debt.All loans to customers are
  fixed rate debts at rates determined by the lending team. Therefore, the
  company is not exposed to interest rate risk on its loans to customers.In order to manage interest
  rate risk on borrowings, it is managements policy to maintain between 5 and
  10% of its debt on fixed interest rate terms which may be through a related
  party. The remaining debt is set to the 30-day bank bill rate at the start of
  each interest period.iv.
Foreign
  currency riskThe group is
  not exposed to fluctuations in foreign currencies.v.
Liquidity
  riskThe group manages liquidity
  risk by monitoring forecast cash flows and ensuring that adequate unutilised
  borrowing facilities are maintained. The groups policy is to ensure that the
  following months interest and management fees are held in cash at all times.vi.
Credit riskThe groups lending
  business is operated through Ausec Finance Ltd. The comments made below refer
  to the principles used by Ausec Finance Ltd and the group for managing credit
  risk associated with that business. 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.There are no material
  amounts of collateral held as security at 30 June 2008.Credit risk is managed and
  reviewed regularly by the finance committee. It arises from exposures to
  customers as well as through deposits with financial institutions.The finance committee
  monitors credit risk by actively assessing the rating quality and liquidity
  of its customers:In the first instance,
  Ausec Finance Limited will target non regulated short term lending
  opportunities (commercial, residential and vacant land) secured by way of
  first mortgage. Shorter term loans better match Ausec Finance Limited lending
  criteria.30

AUSTRALIAN SECURED
FINANCIAL LIMITED ACN 120 340 507 and Controlled
Entities

NOTES TO
  THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008Note 26:
  Financial InstrumentsLoan terms are set at a
  maximum term of 12 months. The ideal loan is for a term of 3 months. Arrears
  are defined as either when an interest is 1 day past due or when capital
  remains unpaid 1 day past the maturity date.As a legitimate part of its
  business strategy, Ausec Finance Limited anticipates that a certain portion
  of loans will exceed their maturity date.
  The consequence is that Ausec Finance Limited earns a higher yield as
  the client is charged the higher contractual rate.In general, the short term
  nature of the company loans allows Ausec Finance Limited to monitor the
  borrowers more closely.From a risk management
  perspective, even though the strategy results in a higher reported level of
  arrears, the actual portfolio risk is neutral but return is higher.Exit strategy is an important part of the
  loan management process.  Typical exit
  strategies include:-     sale
  of property-     refinance
  with a bank or mortgage manager-     refinance
  with another short term lender or development financierRefinance to a longer term
  Ausec Finance Limited loan is not a legitimate exit strategy although it can
  become an option on satisfactory performance of the loan.The group does not have any
  material credit risk exposure to any single receivable or group of receivables
  under financial instruments entered into by the group.The trade receivables
  balances at 30 June 2008 and 30 June 2007 do not include any counter parties
  with external credit ratings. Customers are assessed for credit worthiness
  using the criteria detailed above.vii.
Price riskThe company is not exposed
  to any material commodity price risk.b.
Interest
  Rate RiskThe economic entitys
  exposure to interest rate risk, which is the risk that a financial
  instruments value will fluctuate as a result of changes in market interest
  rates and the effective weighted average interest rates on those financial
  assets and financial liabilities, is as follows:31

AUSTRALIAN SECURED
FINANCIAL LIMITED ACN 120 340 507 and Controlled
Entities

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



Weighted Average



Fixed Interest Rate MaturingEffective Interest Rate

Floating Interest Rate

Within 1 Year

1 to 5 Years2008

2007

2008

2007

2008

2007

2008

2007%

%

$

$

$

$

$

$Financial Assets:Cash and cash equivalents


5.25


6.10


884,904


473,875





1,500,000





Receivables























Loans


25.21


20.16


8,267,434


30,905,341











Total Financial Assets








9,152,338


31,379,216





1,500,000





Financial Liabilities:Tax Liability























Subordinated debt





10.27











1,181,733





Loans


10.94


11.10


8,784,864














5,830,000Payables























Debentures





8.53











17,740,324





6,412,361Total Financial Liabilities








8,784,864








18,922,057





12,242,361Non-interest Bearing

Total2008

2007

2008

2007$

$

$

$Financial Assets:Cash and cash equivalents








884,904


1,973,875Receivables


39,356


113,687


39,356


113,687Loans








8,267,434


30,905,341Total Financial Assets


39,356


113,687


9,191,694


32,992,903Financial Liabilities:Tax liability


109,412


136,502


109,412


136,502Subordinated debt











1,181,733Loans








8,784,864


5,830,000Payables


107,800


1,969,242


107,800


1,969,242Debentures











24,152,685Total Financial Liabilities


217,212


2,105,744


9,002,076


33,270,16232

AUSTRALIAN SECURED
FINANCIAL LIMITED ACN 120 340 507 and Controlled
Entities

NOTES TO
  THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008c.
Net Fair
  ValuesThe net fair values of
  assets and liabilities approximate there carrying their carrying value. The
  aggregate net fair values and carrying amounts of financial assets and
  financial liabilities are disclosed in the Balance Sheet and in the Notes to
  the Financial Statements.d.
Average
  Balance Sheet and Related InterestAverage balance

Interest

Average rate$

$

$

$

%

%30 June 2008

30 June 2007

30 June 2008

30 June 2007

30 June 2008

30 June 2007AssetsCash


1,431,889


2,944,334


169,442


447,494


5.25


6.10Loans


19,586,388


26,535,977


2,099,753


4,911,484


25.21


20.1621,018,277


29,480,311


2,269,195


5,358,978LiabilitiesPromissory notes and other liabilities evidenced by paper


19,974,640


27,694,786


1,284,023


2,343,088


10.94


8.5319,974,640


27,694,786


1,284,023


2,343,088





e.
Concentration
  of assets, liabilities and off balance sheet items GeographicalN.S.W

QLD

VIC

W.A

Other$

$

$

$

$

$

$

$

$

$2008

2007

2008

2007

2008

2007

2008

2007

2008

2007On balance sheetAssets - loans

799,511

5,025,072

4,882,596

15,390,966

2,042,577

9,193,300

278,739

698,039

264,011

597,964799,511

5,025,072

4,882,596

15,390,966

2,042,577

9,193,300

278,739

698,039

264,011

597,964LiabilitiesDebentures



13,724,813



2,313,202



3,810,125



1,764,642



2,539,903Loans

350,000



8,434,864

5,830,000











Subordinated debt







1,000,000











181,733350,000

13,724,813

8,434,864

9,143,202



3,810,125



1,764,642



2,721,636Australian Secured
  Financial Limited and its controlled entities do not keep any off balance
  sheet assets or liabilities. There are no other significant concentrations of
  assets and liabilities related to particular industries/customer groups or
  foreign currency.33

AUSTRALIAN SECURED
FINANCIAL LIMITED ACN 120 340 507 and Controlled
Entities

NOTES TO
  THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008f.
Maturities
  of Assets and LiabilitiesRepayment dates

2008

2007

2008

2007

2008

2007$

$

$

$

$

$Up
to 3months

Up
to 3months



3
months to
1 year

3
months to1
year

1
year to 5
year

1
year to 5
yearAssetsCash


884,804


473,875











1,500,000Receivables


39,356


113,687











Loans


4,273,505


26,116,464


3,993,929


4,729,480





59,3975,197,665


26,704,026


3,993,929


4,729,480





1,559,397LiabilitiesInterest-bearing
  liabilities


8,784,864


12,450,378





11,995,183





6,718,857Payables


107,800


1,969,242











8,89,2664


14,419,620





11,995,183





6,718,857g.
Losses on
  loans and advancesAustralian Secured
  Financial Limiteds subsidiary Ausec Finance Limited credit committee
  analyses all loans on a monthly basis and any loans or portions of loans
  which are deemed uncollectible are reported to the board of directors. The
  board will direct the accounting department of such details. The
  uncollectible monies outstanding on the loan will then be recognised as an
  expense and the loan balance reduced to its fair value.  During the period Auslink Limited recorded
  total impairment losses of $12,370 (2007: $294,489) on three loans.h.
Sensitivity
  AnalysisInterest Rate RiskThe company has performed a
  sensitivity analysis relating to its exposure to interest rate risk at
  balance date. This sensitivity analysis demonstrates the effect on the
  current year results and equity which could result from a change in this
  risk.  Interest Rate Sensitivity
  Analysis: At 30 June 2008, the effect
  on profit and equity as a result of changes in the interest rate, with all
  other variables remaining constant, would be as follows:Consolidated Group

Parent Entity2008

2007

2008

2007$

$

$

$Change in profit     Increase
  in interest rate by 2%


(370,906
)

(495,009
)

(13,118
)

(27,000
)     Decrease in interest rate by
2%


370,906


495,009


13,118


27,000Change in equity     Increase in interest rate by
2%


(18,037
)

(25,523
)

(13,118
)

(27,000
)     Decrease in interest rate by
2%


18,037


25,523


13,118


27,000The above interest rate
sensitivity analysis has been performed on the assumption that all other
variables remain unchanged. No sensitivity analysis has been performed on
foreign exchange risk, as the entity is not exposed to foreign currency
fluctuations.

34

AUSTRALIAN SECURED
FINANCIAL LIMITED ACN 120 340 507 and Controlled
Entities

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

Note
27: Change in Accounting Standards

The
following accounting standards have been issued or amended but were not
applicable for the year ended 30 June 2008 and have not been early adopted by
the group. Details of these standards and the potential impact on future
financial reports of the group are as follows:

AASB Amendment



Standards Affected

Outline of Amendment

Application date of Standard

Application date for GroupAASB 20073
  Amendments to Australian Accounting Standards

AASB 5

Non-current
  Assets Held for Sale and Discontinued Operations

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.

1.1.2009

1.7.2009AASB 6

Exploration
  for and Evaluation of Mineral ResourcesAASB 102

InventoriesAASB 107

Cash Flow
  StatementsAASB 119

Employee BenefitsAASB 127

Consolidated and Separate
  Financial StatementsAASB 134

Interim Financial ReportingAASB 136

Impairment of AssetsAASB 1023

General Insurance ContractsAASB 1038

Life Insurance ContractsAASB 8 Operating Segments

AASB 114

Segment Reporting

As above.

1.1.2009

1.7.2009AASB 20076 Amendments to
  Australian Accounting Standards

AASB 1

First time adoption of
  AIFRS

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.

1.1.2009

1.7.2009AASB 107

Cash Flow StatementsAASB 111

Construction ContractsAASB 116

Property, Plant and
  EquipmentAASB 138

Intangible Assets35

AUSTRALIAN SECURED FINANCIAL LIMITED
ACN 120 340 507 and Controlled Entities

AASB Amendment



Standards Affected

Outline of Amendment

Application date of Standard

Application date for GroupAASB 123 Borrowing Costs

AASB 123

Borrowing Costs

As above

1.1.2009

1.7.2009AASB 20078 Amendments to
  Australian Accounting Standards

AASB 101

Presentation of Financial
  Statements

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

1.1.2009

1.7.2009AASB 101

AASB 101

Presentation of Financial
  Statements

As above

1.1.2009

1.7.2009Note 28: Discontinued Operations

Consolidated Group2008
  $

2007
  $On 30 November
  2007, the consolidated group disposed of Australian Secured Investments Ltd.
  In addition, the consolidated group disposed of Auslink Limited on 1 June
  2008.Financial
  information relating to the discontinued operations of these subsidiary
  companies to the date of disposal is set out below.The
  financial performance of the discontinued operations to the date of sale
  which is included in profit/(loss) from discontinued operations per the
  income statement is as follows:Revenue


1,686,557


5,363,172Expenses


(1,941,706
)

(4,688,916
)Profit
  /(loss) before income tax


(255,149
)

674,256Income tax
  expense


76,545


(202,277
)Profit
  attributable to members of the parent entity


(178,604
)

471,979Profit on
  sale before income tax


1,103,886


Income tax
  expense


(331,165
)

Profit
  (loss) on sale after income tax


772,721


Total profit after tax attributable to the
  discontinued operation


594,117


471,979The net cash
  flows of the discontinued division which have been incorporated into the cash
  flow statement are as follows:Net cash
  inflow/(outflow) from operating activities


(479,144
)

Net cash
  inflow from investing activities


25,673,522


Net cash
  (outflow)/inflow from financing activities


(7,900,724
)

Net cash
  increase in cash generated by the discontinued division


17,293,654


Gain on disposal
  of the divisions included the gain from discontinued operations per the
  income statement.36

AUSTRALIAN SECURED FINANCIAL LIMITED
ACN 120 340 507 and Controlled Entities

Note 29: Company DetailsThe
  registered office of the company is:Australian Secured Financial LimitedLevel 1Corporate Centre2 Corporate CourtBUNDALL QLD 421737

AUSTRALIAN SECURED FINANCIAL LIMITED
ACN 120 340 507 and Controlled Entities

DIRECTORS DECLARATION



The
  directors of the company declare that:1.
The
  financial statements and notes, as set out in page 6to37,
  are in accordance with the Corporations Act 2001:a.
comply with
  Accounting Standards and the Corporations Regulations 2001; andb.
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 economic
  entity.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.This
  declaration is made in accordance with a resolution of the Board of
  Directors.Director

/s/ Jonathan PepperJonathan
PepperDated this
   30th day of October 200838

AUSTRALIAN SECURED
FINANCIAL LIMITED ABN 74 120 340 507 and 
Controlled Entities

INDEPENDENT AUDITORS REPORT TO THE MEMBERS
OF
AUSTRALIAN SECURED FINANCIAL LIMITED

Report on the financial report

We have audited the
accompanying financial report of Australian Secured Financial Limited (the
company) and Australian Secured Financial Limited and Controlled Entities (the
consolidated entity), 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 entities it controlled at the years end
or from time to time during the financial year.

Directors responsibility for the financial report

The directors of
the company are responsible for the preparation and fair presentation of the
financial report in accordance with Australian Accounting Standards (including
the Australian Accounting Interpretations) and the Corporations Act 2001. This
responsibility includes establishing and maintaining internal control relevant
to the preparation and fair presentation of the financial report that is free
from material misstatement, whether due to fraud or error; selecting and
applying appropriate accounting policies; and making accounting estimates that
are reasonable in the circumstances. In Note 1(n), 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 (IFRS) 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. Australian
Auditing Standards do not differ in any significant respect with the audit
standards of the Public Company Accounting Oversight Board (United States). 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 judgment, 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 Australian Secured Financial Limited on
30 October 2008, would be in the same terms if provided to the directors as at
the date of this auditors report.

39

AUSTRALIAN SECURED
FINANCIAL LIMITED ABN 74 120 340 507 and 
Controlled Entities

Auditors OpinionIn our opinion:a.
the financial report of
  Australian Secured Financial Limited and Australian Secured Financial Limited
  and Controlled Entities is in accordance with the Corporations Act 2001,
  including:(i)
giving a true and fair view
  of the companys and consolidated entitys financial position as at 30 June
  2008 and of their performance for the year ended on that date; and(ii)
complying with Australian
  Accounting Standards (including the Australian Accounting Interpretations)
  and the Corporations Regulations 2001.b.
the financial report also
  complies with International Financial Reporting Standards as disclosed in
  Note 1(n)./s/ Bentleys
Bentleys Brisbane Partnership
Chartered Accountants
/s/ Martin Power
PM Power
Partner
Level 26, 10 Eagle Street
BRISBANE QLD 4001
Dated this 31st day of October 2008

40
SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, IA Global, Inc. (the "Registrant") has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

                                        IA GLOBAL, INC.

Date: December 23, 2008             By: /s/ Derek Schneideman
                                        ---------------------
                                        Derek Schneideman
                                        Chief Executive Officer

                                    By: /s/  Mark Scott
                                        ---------------
                                        Mark Scott
                                        Chief Operating and Financial Officer,
                                        and Secretary

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:

SIGNATURES                             TITLE                          DATE
----------                             -----                          ----

/s/ Derek Schneideman    Chief Executive Officer               December 23, 2008
---------------------    (Principal Executive Officer)
Derek Schneideman

/s/ Mark Scott           Chief Operating and Financial         December 23, 2008
--------------           Officer, and Secretary
Mark Scott               (Principal Financial and
                         Accounting Officer)

/s/ Masazumi Ishii       Independent Director                  December 23, 2008
------------------
Masazumi Ishii

/s/ Eric La Cara         Independent Director                  December 23, 2008
----------------
Eric La Cara

/s/ Mae Towada           Independent Director                  December 23, 2008
--------------
Mae Towada