ENERGY TECHNOLOGIES LIMITED

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ABN 38 002 679 469

Annual Financial Report

for the year ended 30 June 2014

Energy Technologies Limited – 2014 Annual Report

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Corporate Information

ABN 38 002 679 469

Directors

Alfred J. Chown (acting Chairman/Managing Director) Gary A. Ferguson (Non-executive Director)

Michael D. Butcherine (Non-executive Director)

Company Secretary

Gregory R. Knoke

Registered Office

102 Old Pittwater Road BROOKVALE NSW 2100

Bankers

National Australia Bank Limited NAB House, 255 George Street SYDNEY NSW 2000

Share Register

Computershare Investor Services Pty Ltd Level 3, 60 Carrington Street Sydney NSW 2000 Telephone:- (02) 8234 5000 Facsimile:- (02) 8235 8150

Auditors

Gould Ralph Assurance Chartered Accountants Level 29, Suncorp Place 259 George Street SYDNEY NSW 2000

Energy Technologies Limited – 2014 Annual Report

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Chairman’s Report	4
Directors’ Report	5
Remuneration Report (audited)	10
Corporate Governance Statement	14
Auditor’s Independence Declaration	22
Consolidated Income Statement	23
Consolidated Statement of Comprehensive Income	24
Consolidated Statement of Financial Position	25
Consolidated Statement of Changes in Equity	26
Consolidated Statement of Cash Flows	27
Notes to the Financial Statements	28
Directors’ Declaration	68
Independent Auditor’s Report	69
ASX Additional Information	71

Energy Technologies Limited – 2014 Annual Report

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Chairman’s Report

Energy Technologies Ltd (EGY) has performed better than last financial year but has still reported a loss for the period. Although significant cost reductions were put in place last November, especially in its main operating subsidiary Bambach Wire and Cables Pty Ltd (BWC) many of the reductions took some months to impact positively and the full benefit of the changes only occurred from February 2014 on. Since then further cutbacks have been made in BWC and further efficiencies gained.

Following a review of the BWC product offering in late 2013, a decision was made to radically upgrade the products and to align the offering in favour of cables related to infrastructure projects particularly in the road, rail and port infrastructure space. This required a revamp of product designs and included a large amount of research and development all of which takes time and involves cost. It also entailed manufacturing complete new ranges of the new designs as well as running down stock of old outdated designs. This change at different times led to stock outages in certain lines which impacted on sales. However even with these changes taking place BWC was able to report strong growth in direct sales from 9.6 million for FY 2012/13 to 12.66 million for FY 2103/14.

In order to acquaint the market with the new products, and to gain market share over the FY 13/14 for the newly established W.A branch, margins were squeezed, with the result that market share was gained and product acceptance obtained. From May 2014 onwards the company embarked on a margin improvement program which has seen margins brought back to normal levels. Whilst no doubt this has caused some customer drop off, overall it is believed to be minimal.

Where BWC is unable to manufacture product or where it is not competitive in the manufacture of product, it has secured sourcing arrangements with a number of OEM suppliers located overseas. These suppliers manufacture product to BWC design and under the BWC brand. This outsourcing arrangement, which is new to BWC, has led to a marked increase in the amount of product BWC can offer the market and to BWC, for the first time, being able to offer a full range of cables in chosen categories in all sizes. This has enabled BWC to properly enter the large project market and over the past six months the company has been fortunate in securing a number of medium sized projects across a range of customers all of whom it is expected will ramp up their purchases from BWC over the coming year.

Market conditions continue to impact negatively on the sector. Whilst Bambach has been successful in growing its sales over the period other suppliers have suffered a reduction in sales and there is no question that the sector and indeed the overall economy is quite weak. Activity in the mining sector has dropped off substantially with business yet to emanate from proposed Infrastructure projects. Most work being won at the moment is related to standard maintenance and upgrade programs. That said it is the expectation of BWC that over the next 18 months many of the mooted large infrastructure projects will happen and business in sectors related to these developments will dramatically improve. BWC has submitted many quotations and expressions of interest amounting to many millions of dollars and all related to projects earmarked for 2015 and beyond.

BWC has been active in promoting the need to improve the regulatory environment for low voltage cables in Australia. Recent large scale product failures have impacted heavily on the sector and there is an urgent need to put in place measures to limit the supply of poor quality non-conforming product being supplied into the Australian market. As the regulators move on upgrading the policing of non-conformance and as building code regulators and industry associations address the problem, the new BWC range of products designed with safety foremost in mind and the BWC brand, an established brand well known for its quality product, will lead to new opportunities for BWC. These opportunities exist not only in the specialised cable market but for premium applications especially associated with large developments and venues where large numbers of people congregate in enclosed spaces, and where safety considerations regarding smoke and fire call for cabling that does not emit harmful gases , high density smoke or is prone to short circuit. BWC ‘s new range of products address these concerns and initial orders have been obtained as a result from a major Australian contractor.

To support the BWC business, EGY will seek to raise up 1.5 million dollars by way of a convertible note issue to close by 15 December 2014. Approval for this raising will be sought at the coming AGM. Whilst market conditions are very poor currently future required infrastructure projects will dictate an increased demand for cable over the coming 18 months, an improvement from which BWC is well placed to benefit.

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Alfred J Chown Acting Chairman

Sydney, 30 September 2014

Energy Technologies Limited – 2014 Annual Report

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Directors’ Report

Your Directors submit their report for the year ended 30 June 2014.

DIRECTORS

The names and details of the Company's Directors in office during the year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.

Names, qualifications, experience and special responsibilities

Alfred J. Chown, B.Econ, (Age 53) (acting Chairman/Managing Director) Appointed 4 July 1997.

Born in 1960, in Sale, Victoria, Mr Chown returned in 2012 from residing in Hong Kong. In 1987 he co-founded E.L. Consult Ltd an executive search provider that prior to being sold to the Clarius group (ASX:CND) and renamed Lloyd Morgan in March 2007, had an extensive network of offices throughout Hong Kong, China, Singapore and Malaysia. Mr Chown continues to provide his services to Lloyd Morgan in a regional role. In the early 1990’s Mr Chown also co-founded Dulhunty Engineering Ltd and in 1997 this company established Dulhunty Yangzhou Line Fittings Co Ltd, a manufacturer of line fittings for the electric power transmission and distribution industry. In 2003 Mr Chown was the driving force to merge these businesses together with Dulhunty Industries Pty Limited of Australia to form Energy Technologies Limited. Mr Chown is a former Chairman of the Australian Chamber of Commerce in Hong Kong and has extensive commercial experience in both Australia and Asia. Mr Chown is also a member of the Remuneration and Nomination Committees of the company.

Michael D. Butcherine (BEc (Hons)/LLB (Hons)) (Age 47) (Non-executive Director). Appointed 14 December 2009

Mr Butcherine was born in Dubbo, New South Wales in 1967. He graduated from the University of Sydney with Honours in Economics in 1989 and Honours in Law in 1991. During his studies, he worked for the Commonwealth Bank and for a toptier Sydney law firm. After graduation, he travelled overseas, including working for two legal firms in the City of London. On his return to Australia, Mr Butcherine practiced with a commercial firm in Cairns, North Queensland. He returned to Dubbo in 1995 where he joined and subsequently became a principal of a local firm. His work was mainly in commercial property and business structuring and transactions. Since 2007, Mr Butcherine has conducted a private practice, acting for a very limited number of clients, providing highly specific revenue, structuring, commercial and financial advice, both strategic and transaction-specific. Mr Butcherine has completed the Graduate Diploma of Legal Practice, and the Graduate Diploma of Inhouse Legal Practice. He is a solicitor of the Supreme Court of New South Wales and the High Court, and a member of the Law Society of New South Wales, the Australian Corporate Lawyers Association and a Graduate Member of the Australian Institute of Company Directors. Mr. Butcherine is a member of the Audit, Nomination and Remuneration Committees of the company

Gary A Ferguson CA (Age 71) (Non-executive Director). Appointed 1 October 2012

Mr Ferguson is a qualified accountant. During his career, he has worked for manufacturing companies as a cost accountant, lectured in accounting (post-certificate Cost Accounting) with the then Department of Technical Education, developed the methodology associated with risk analysis profiles for capital expenditure projects in both the cable and abrasive sectors and providing consultant services to these companies. Mr Ferguson relocated to Mid-North Coast NSW in 1975 and gained a very broad level of experience, owning and operating businesses in the construction, hospitality, heavy transport and earthmoving and quarry industries. In 1992 he acquired a public practice in Kempsey, specializing in providing commercial clients with advice in corporate structure, taxation, reporting and financial management areas, including providing associated legal services from in house partners. Mr Ferguson is a Member of both the Institute of Chartered Accountants in Australia (CA) and Certified Practising Accountants in Australia (CPA). Mr. Ferguson is also Chairman of the Audit Committee and a member of the Nomination and Remuneration Committees of the company.

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Energy Technologies Limited – 2014 Annual Report

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Directors’ Report (Cont’d)

COMPANY SECRETARY

Gregory R. Knoke, B. Com, CA (Age 61) (Company Secretary and Chief Financial Officer) Appointed 30 April 2003.

Director of Cogenic Pty Limited. Mr Knoke was a director of Energy Technologies Limited from May 2000 until 30 April 2003, resigned upon acceptance of the position of CFO. Born in 1952, educated at University of NSW and graduated in 1973 with major in accountancy, he holds a Bachelor of Commerce degree with merit. Mr Knoke is a Chartered Accountant and Associate member of the Institute of Chartered Accountants in Australia since 1979, an affiliate member of Chartered Secretaries of Australia and member of the Australia China Business Council. Business consultant and advisor, with extensive work experience throughout Asia and Europe, Mr Knoke spent 13 years in Hong Kong as Asian Group Financial Controller and Director for BIL Asia Holdings Limited and subsidiaries of the Brierley Investments Limited Group.

PRINCIPAL ACTIVITIES

EGY’s principal activities during the year were:

The manufacture and sale of specialist industrial cables through wholly owned subsidiary Bambach Wires and Cables Pty Limited (BWC):
Managing BWC and integrating its operations into the Group;
Driving organic growth and organisational change in BWC;
Investing in Dulhunty Poles Pty Limited (DPPL), by providing financial and administrative support;
Developing energy co-generation technology and seeking opportunities to participate in alternate and off-grid generation projects;
Seeking other products, businesses and opportunities for the Group;

REVIEW AND RESULTS OF OPERATIONS

The financial year ended 30 June 2014 was again a very challenging one for the group. EGY reported a consolidated loss after tax and minorities of $987,407. However this was much improved in comparison with last year’s results FY2013 consolidated loss of $2,232,177. Despite this loss, overall revenue has increased to FY2014 $14,299,526 from previous FY2013 $10,555,104. Included in FY2014 revenue is a $1,201,822 R&D Grant which partially recovered the significant research and development expense undertaken by subsidiary Bambach Wires and Cables (BWC) in new product development, cable projects and testing, all of which position the company to take advantage of announced infrastructure projects due to begin over the near term.

The parent entity continues to reduce costs and has in fact reported a profit after tax for FY2014 of $94,676 before impairment of its investment in BWC of $1,020,186. The parent entity result also includes a one off negotiated reduction in BWC vendor liability of $224,546. The resources of EGY, and its directors and executive were applied almost exclusively in the intensive management of BWC.

BWC reported a loss after tax of $1,013,458 (FY2013 loss $1,725,387). Directors highlighted in last year’s Annual Report a need to focus on the continued organic growth of BWC’s sales, to be achieved by capitalising on marketing activities, developing new products and market segments and building relationships with new suppliers. This strategy, including the opening of a branch in Western Australia, has achieved significant sales growth with revenues from operating activities excluding R&D recovery increasing 31% to $12,709,852. However reduced margins, factory recovery levels and overhead costs have resulted in a loss, which includes significant non-recurring expenses incurred in repositioning the company, enhancing products and marketing and costs related to redundancies.

Since the last report there has been and continues to be an intense focus on reduction of costs in the head office and manufacturing activities of BWC. Overall costs have been significantly reduced by natural attrition due to resignation as well as strategic redundancies. Savings have also been achieved through sourcing less costly raw materials and securing supply of higher margin purchased product. New products and product lines, from new suppliers, have been brought into the BWC line up. This has required substantial investment in stock, which has consumed working capital, but has generated an improvement in sales, and we expect it to continue to do so.

During the 2014 year, EGY raised $700,000 by the issue of secured convertible notes, from a possible facility limit of $1,000,000, resulting in the issue of 700 Convertible Notes each with a face value of one thousand dollars to investors. Shareholder approval for the issue of the Convertible Notes was given at the Annual General Meeting of the company held on 5 December 2013. Funds raised have been applied in the satisfaction of some of EGY’s commitments to the vendors of BWC, for some factory capital expenditure and to meet working capital requirements. EGY is currently seeking to raise up to $1.5m which it intends to raise prior to calendar 2014 year’s end through a further issue of Convertible Notes and will seek approval for this raising at the coming AGM.

Energy Technologies Limited – 2014 Annual Report

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Directors’ Report (Cont’d)

REVIEW AND RESULTS OF OPERATIONS (Cont’d)

Whilst the company is still struggling the belief is that via its subsidiary Bambach Wire and Cables it is well positioned to take advantage of an uptick in the economy and to meet market demand for cable products brought on by a flurry of anticipated infrastructure projects. In Victoria and NSW alone over 20 billion of infrastructure works is in the planning stage with projects worth upwards of 10 billion due for implementation before the end of this calendar year. The recent drop in the Australian dollar is expected to provide a spur for an improvement in the economy and to level the playing field somewhat between overseas and Australian manufactured cables.

DIVIDENDS AND CAPITAL RETURN

No dividends were paid or recommended by the parent company EGY this financial year.

NON-AUDIT SERVICES

During the year Gould Ralph Pty Limited, an associate of the Company’s auditor performed certain other services in addition to their statutory duties.

The board has considered the non-audit services provided during the year by the auditor and in accordance with written advice provided by resolution of the audit committee, is satisfied that the provision of those non-audit services during the year by the auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001.

The reasons for this are that all non-audit services were subject to the corporate governance procedures adopted by the Company and have been reviewed by the audit committee to ensure they do not impact the integrity and objectivity of the auditor; and the non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.

Details of the amounts paid to the auditor and their associates for audit and non-audit services provided during the year are set out in note 6 to the financial statements. In addition, amounts paid to other auditors for the statutory audit have been disclosed in that note.

A copy of the lead auditors’ independence declaration as required under Section 307C of the Corporations Act is included in the Directors’ Report.

EVENTS SUBSEQUENT TO REPORTING DATE

There are no other matters or circumstances that have arisen since 30 June 2014 that have significantly affected or may significantly affect the operations of the group, the results of those operations or the state of affairs of the group in subsequent financial years.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS

The directors expect that BWC will return to profitability in the 2015 financial year. The trend of improvement in sales margin has continued since the reporting date, and, if budgeted sales levels can be maintained, together with cost reductions in place, will mean BWC achieves budget for the year.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The group operates a factory in Brookvale, Sydney which is required to comply with local planning laws, and with State and Commonwealth Environmental laws. The company considers that the factory’s operation is currently compliant, and is not expecting any adverse impact as a result of the environmental regulation.

Energy Technologies Limited – 2014 Annual Report

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Directors’ Report (Cont’d)

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

Indemnification

The Company has entered into Deeds of Indemnity and Access with persons who are an Officer or Director of the Company or a related body corporate, indemnifying such persons against a liability incurred by them in their capacity as an Officer or Director, including costs and expenses of defending legal proceedings and providing them with access to company records where a claim is made or threatened against such Officer or Director.

Insurance Premiums

The Company has not, during or since the end of the financial year, in respect of any person who is or has been an officer or auditor of the Company or a related body corporate paid or agreed to pay a premium in respect of a contract insuring against a liability for costs or expenses of defending legal proceedings.

The Company has paid insurance premiums in respect of Directors' and Officers' liability and legal expense insurance for Directors and Officers of the Company. In accordance with subsection 300(9) of the Corporations Act 2001, further details have not been disclosed due to confidentiality provisions contained in the insurance contract.

PROCEEDINGS ON BEHALF OF THE COMPANY

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 year.

EMPLOYEES

The consolidated entity employed 59 employees as at 30 June 2014 (2013: 71 employees).

REMUNERATION REPORT

The remuneration report is set out on page 10 and forms part of the Directors’ Report for the financial year ended 30 June 2014.

DIRECTORS' MEETINGS

The numbers of meetings of Directors (including meetings of Committees of Directors) held during the year and the number of meetings attended by each director were as follows:

meetings attended byeach director were as follows:	meetings attended byeach director were as follows:
		Board of Directors	Remuneration Committee	Audit Committee	Nomination Committee
Number of meetings held:		6	1	3	-

Number of meetings attended:
Alfred J. Chown		6	1	-	-
Michael D. Butcherine		6	1	3	-
Gary A Ferguson		6	1	3	-
Committee Membership
At the date of this report, the company’s committees were comprised as follows:
Audit Committee:	Michael D. Butcherine	Gary A. Ferguson		-
Nomination Committee:	Alfred J. Chown	Michael D. Butcherine		Gary A. Ferguson
Remuneration Committee:	Alfred J. Chown	Michael D. Butcherine		Gary A. Ferguson

Audit Committee:	Michael D. Butcherine	Gary A. Ferguson	-
Nomination Committee:	Alfred J. Chown	Michael D. Butcherine	Gary A. Ferguson
Remuneration Committee:	Alfred J. Chown	Michael D. Butcherine	Gary A. Ferguson

Energy Technologies Limited – 2014 Annual Report

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Directors’ Report (Cont’d)

INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY AND RELATED BODIES CORPORATE

The relevant interest of each director in the shares, and options over such instruments, issued by the companies within the consolidated entity and other related bodies corporate, as notified by the directors to the Australian Securities Exchange in accordance with S205G(1) of the Corporations Act 2001, at the date of this report is as follows:

	Energy Technologies Limited	Energy Technologies Limited	D Power International Ltd
	Ordinary Shares	Options	Ordinary Shares
Alfred J. Chown	38,160,691	-	59,724
Michael D. Butcherine	14,736,187	-	-
Gary A. Ferguson	21,596,851	-	-

CORPORATE GOVERNANCE

In recognising the need for the highest standards of corporate behavior and accountability, the Directors of the Company support and have adhered to the principles of corporate governance. The Company's corporate governance principles are contained in the Corporate Governance Statement.

AUDITOR’S INDEPENDENCE DECLARATION

The lead auditor’s independence declaration under Section 307C of the Corporations Act 2001 is set out on page 22 and forms part of the Director’s Report for the year ended 30 June 2014.

Signed in accordance with a resolution of the Directors.

Alfred J. Chown

Acting Chairman/Managing Director

Sydney, 30 September 2014

Energy Technologies Limited – 2014 Annual Report

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Remuneration Report (audited)

The Remuneration Committee of the Board of Directors is responsible for determining and reviewing compensation arrangements for the directors, the managing director and the executive team. Remuneration levels are set to attract and retain appropriately qualified and experienced Directors and senior executives. The Remuneration Committee obtains independent advice on the appropriateness of remuneration packages, given trends in comparative companies both locally and internationally. The Remuneration Committee also assesses the appropriateness of the nature and amount of emolument of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team. Such officers are given the opportunity to receive their base emolument in a variety of forms including cash and fringe benefits such as motor vehicles. It is intended that the manner of payment chosen will be optimal for the recipient without creating undue cost for the company.

Executive remuneration packages include a mix of fixed remuneration and performance based remuneration.

Fixed Remuneration

Fixed remuneration consists of base remuneration as well as employer contributions to superannuation funds. Remuneration levels are reviewed annually by the Remuneration Committee through a process that considers individual, segment and overall performance of the consolidated and operating entity. A senior executive’s remuneration is also reviewed on promotion.

Performance – linked Remuneration

The Remuneration Committee links the nature and amount of directors’ and executives’ emoluments to the company’s financial and operational performance. All senior executives have the opportunity to qualify for participation in the Employee Bonus Plan, which currently provides incentives where specified criteria are met including criteria relating to profitability.

Performance linked remuneration includes both short term and long term incentives and is designed to reward executive directors and senior executives for meeting or exceeding financial and personal objectives. The short term incentive is an at-risk bonus provided in the form of cash, and is based on the relevant operating subsidiaries’ results and on achieving a preset target. The long term incentive is provided as ordinary shares of Energy Technologies Limited or options over ordinary shares of Energy Technologies Limited under the rules of the Energy Technologies Limited Share Option Plan.

The remuneration structures result in and took into account:

The overall level of remuneration for each director and executive
The executive’s ability to control performance
The amount of incentives within each executive’s remuneration.

Short term incentive

Each half year the remuneration committee sets the key performance indicators, which generally include measures relating to the operating group, the relevant segment and the individual, and are based on financial, customer and strategy measures. The measures directly align the reward to the key performance indicators and the operating group performance. The financial performance objectives are operating group turnover and EBIT to working capital ratio analyses compared to budgeted amounts on a regional and consolidated basis. The non-financial objectives vary with position and responsibility and include measures such as achieving strategic outcomes, safety and business development.

The remuneration committee approves the cash incentive to be paid to the individuals.

Long term incentive

Options are available to be issued under the Energy Technologies Share Option Plan (made in accordance with thresholds set in plans approved by shareholders at the 2011 AGM), and it provides for directors, executives and employees to receive options in total limited to 15% of the issued ordinary capital and exercisable strictly under the terms of the Plan.

Energy Technologies Limited – 2014 Annual Report

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Remuneration Report (audited)

The Board considers that the above remuneration structure is generating the desired result. The evidence for this was growth in turnover for the applicable controlled entities, and secondly, the performance linked element appears to be appropriate because the executives strive to achieve a level of performance which qualifies them for bonuses.

The remuneration for all non-executive directors, last voted upon by shareholders at the 2007 AGM, is not to exceed $500,000 per annum. Director’s base fees are presently up to $20,000. Directors receive additional cash benefit of $2,500 for participation and attendance at each board approved committee, up to a maximum $5,000.

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

are:
Key Management Person	Position (s) Held during the Year
Alfred J. Chown	Acting Chairman/Managing Director of EGY and ManagingDirectorof BWC
Michael D. Butcherine	Director–Non-executive of EGY and Director of BWC
GaryA. Ferguson	Director – Non-executive of EGY
Gregory. R. Knoke	CFO/Company Secretary of EGYandBWC
Ralph F. Stevens (Resigned 7 November 2013)	General Manager of BWC

Options and Rights Holdings

No Options are currently held by Key Management Personnel (FY2013 Nil)

Shareholdings Number of Shares held by Key Management Personnel	Balance 1 July 2013	Received as Remuneration	Purchases	Disposals	Balance 30 June 2014

Specified directors
Alfred J Chown	25,410,691	-	12,750,000	-	38,160,691
Michael D. Butcherine	1,486,187	-	13,250,000	-	14,736,187
GaryA. Ferguson	3,508,616	2,083,333	16,004,902	-	21,596,851
Specified executives
Gregory R. Knoke	6,962,415	-	-	-	6,962,415
Ralph F. Stevens	311,000	-	-	(311,000)	-
	37,678,909 2,083,333 42,004,902 (311,000) 81,456,144

Details of the nature and amount of each element of the remuneration of key management personnel including each director of the company and each of the specified executive officers of the company and the consolidated entity for the financial year are disclosed in the table on next page.

Energy Technologies Limited – 2014 Annual Report

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Remuneration Report (audited)

Remuneration of key management personnel (audited)

The following table provides the details of all directors of the Company (["] specified directors["] ) and the executives of the consolidated entity with the greatest authority ("specified executives"), and the nature and amount of the elements of their remuneration for the year ended 30 June 2014.

				Short-term benefits	Short-term benefits	Short-term benefits	Post Employment Benefits	Share-based payment	Total
2014				Cash, salary, fees & commissions	Cash Bonus	Other	Superannuation	Equity
Specified Directors	Position (s) Held	Date Left	Date Appointed	$	$	$	$	$	$
Alfred J. Chown	Acting Chairman/Managing Director of EGY and Managing Director of BWC	-	-	188,154	-	10,000	16,294	-	214,448
Michael D. Butcherine	Non-executive Director of EGY and Director of BWC	-	-	37,500	-	-	-	-	37,500
Gary A Ferguson	Non-executive Director of EGY	-	-	25,000	-	-	-	-	25,000

Specified executives
Gregory R. Knoke	CFO/Company Secretary of EGYandBWC	-	-	164,876	-	14,912	15,051	-	194,839
Ralph F.Stevens	General Manager of BWC	7 November 2013	-	96,923	-	16,565	8,606	-	122,094
				512,453 - 41,477 39,951 - 593,881

Energy Technologies Limited – 2014 Annual Report

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Remuneration Report (audited)

Remuneration of key management personnel (audited)

The following table provides the details of all directors of the Company ("specified directors") and the executives of the consolidated entity with the greatest authority ("specified executives"), and the nature and amount of the elements of their remuneration for the year ended 30 June 2013.

nature and amount of the elements of their remuneration for the year ended 30 June 2013.	nature and amount of the elements of their remuneration for the year ended 30 June 2013.	nature and amount of the elements of their remuneration for the year ended 30 June 2013.	nature and amount of the elements of their remuneration for the year ended 30 June 2013.
				Short-term benefits			Post Employment Benefits	Share-based payment	Total
2013				Cash, salary, fees & commissions	Cash Bonus3	Other	Superannuation	Equity
Specified Directors	Position (s) Held	Date Left	Date Appointed	$	$	$	$	$	$
Alfred J. Chown	Acting Chairman/Managing Director of EGY and Managing Director of BWC	-	-	210,115	-	-	16,390	-	226,505
Michael D. Butcherine	Non-executive Director of EGY and Director of BWC	-	-	70,800	-	-	900	10,000	81,700
Gary A Ferguson	Non-executive Director of EGY	-	1 October 2012	-	-	-	-	18,750	18,750
Martin H. Thomas	Non-executive Director/Chairman of EGY	1 October 2012	-	-	-	2,500	-	18,500	21,000
Philip W. Dulhunty	Non-executive Director of EGY	1 October 2012	-	-	-	-	-	18,750	18,750
Richard K. Llewellyn	Non-executive Director of EGY	1 October 2012	-	28,125	-	-	2,531	-	30,656
Specified executives
Gregory R. Knoke	CFO/Company Secretary of EGY and BWC	-	-	170,146	-	16,337	14,910	5,000	206,393
MalcolmJ. Munro	CEO of EGY	13 July2012	-	12,904	-	576	987	-	14,467
Ralph F.Stevens	General Managerof BWC	-	2July2012	124,409	15,000	14,013	13,021	-	166,443
616,499 15,000 33,426 48,739 71,000 784,664

The bonus portion of specified executives’ remuneration that is performance based varies between 7% and 15% of the fixed salary portion of remuneration.
Revised bonus structures for executives and key staff have been put in place and will result in performance based payments to a maximum of 30% of fixed salary.
Bonus paid for successfully meeting key performance indicators.

Energy Technologies Limited – 2014 Annual Report

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Corporate Governance Statement

The Company’s corporate governance practices are discussed below. The discussion is organised in accordance with the recommendations of the Corporate Governance Council.

The Board of Directors guides and monitors the business and affairs of Energy Technologies Limited and its subsidiaries (“the Group”) on behalf of the shareholders, by whom they are elected and to whom they are accountable. The Board is responsible for the overall corporate governance of the Group. To assist the Board in discharging its responsibilities the Board has adopted principles of corporate governance that are considered appropriate for the present size of the Group.

The information in this statement is current as at 31 August 2014.

Principle 1: Lay solid foundations for management and oversight

1.1	Establish the functions reserved to the Board and those delegated to senior executives, and disclose those functions	Adopted the recommendation
1.2	Disclose the process for evaluating the performance of senior executives	Adopted the recommendation
1.3	Provide information reporting on principle 1	Adopted the recommendation

Certain functions and roles are reserved to the Board, and certain others are delegated to the senior executives of the Group.

The Board is responsible for:

formulating the vision and strategic direction and monitoring performance objectives of the Group
overseeing and fostering an appropriate culture for the Group that is aligned to its values
developing and monitoring adoption of the most appropriate principles of corporate governance
reviewing and ratifying systems of risk management and internal control, codes of conduct and legal compliance
approving and monitoring the progress of major capital expenditure projects, funding programmes, acquisitions and divestments
reviewing and approving annual business plans and budgets
ensuring appropriate resources are available to senior executives
reviewing and ratifying systems for health, safety and environmental management and controls
appointing and evaluating the performance of senior executives
appointing and creating succession policies for directors
appointing, removing and creating succession policies for senior executives
approving and monitoring financial and other reporting.
ensuring corporate accountability to the shareholders primarily through an effective communications strategy and through the Chairman adopting the key interface role between the Company and its shareholders.

A schedule of directors’ meetings and attendances is detailed in the directors’ report.

The Board has delegated responsibility for operation and day to day administration of the company to the Managing Director, the Chief Financial Officer and executive management.

Energy Technologies Limited – 2014 Annual Report

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Corporate Governance Statement (Cont’d)

The Managing Director is responsible for the achievement of the Company’s goals, in accordance with the strategies and policies approved by the Board and with support from executive management. The specific duties of the Managing Director include:

assisting the Board to develop the Company’s Business Plan and goals
responsibility for the achievement of these goals
development in conjunction with senior management of short, medium and long term strategies to enable the Company to achieve its objectives
preparation and update of business plans and relevant reports with senior management and implementation of those plans
assessment of business opportunities including acquisitions
proposing and controlling with Board approval items of material capital expenditure
maintaining positive relationships with Board members, shareholders, trading partners and the investment community, including accepting the role of key spokesperson
recommending and seeking appropriate approval for delegations of authority, key performance incentives and organizational changes, including key staff appointments, in conjunction with established board committees
ensuring legal and regulatory compliance, in conjunction with senior management
overall control of the staff appraisal process

The Board undertakes a review of the Managing Director and of senior executive performance at least annually, together with the Remuneration Committee, including setting targets. The performance evaluation is carried out in accordance with the policy and procedure set out in the Company’s Corporate Governance documents, which are available on the Company’s website.

Principle 2: Structure the board to add value

2.1	A majority of the Board should be independent directors	Adopted the recommendation
2.2	The chair should be an independent director	Not adopted
2.3	The roles of the chair and the chief executive office should not be exercised by the same individual	Not adopted
2.4	Establish a nomination committee	Adopted the recommendation
2.5	Disclose the process for evaluating the performance of the Board, its committees and individual directors	Adopted the recommendation
2.6	Provide information reporting on principle 2	Adopted the recommendation

Board Composition

The composition of the Board is determined in compliance with the Company’s constitution. The names of the directors of the company in office at the date of this report, their term of office and their skills, experience and relevant expertise are detailed in the directors’ report.

The names of independent directors of the company are:

Gary A. Ferguson

Michael D. Butcherine

Energy Technologies Limited – 2014 Annual Report

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Corporate Governance Statement (Cont’d)

An independent director is a director who is not a member of management and who:

is not a substantial shareholder of the company or an officer of, or otherwise associated directly with, a substantial shareholder of the company
has not within the last three years been employed in an executive capacity by the company or another group member, or been a director after ceasing to hold any such employment
within the last three years has not been a principal or employee of a material professional advisor or a material consultant to the company or another group member
is not a material supplier or customer of the company or another group member, or an officer of or otherwise associated with a material supplier or customer
has no material contractual relationship with the company or another group member other than as a director of the company
is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the director’s ability to act in the best interests of the company

The Company has a majority of independent directors on the board.

During the 2013 financial year, Mr Alfred Chown was appointed as the Managing Director of EGY. After the resignation of former Board members, Mr Chown also adopted the position of acting Chairman of the Board. The company accepts that, as a principle, these roles should be separate. At present, however, there are factors which have made it desirable that they be exercised by the same person for the time being.

EGY and its subsidiary BWC continued to encounter difficult trading conditions during the year. EGY’s Managing Director continues to devote a great deal of time and energy to the operations of BWC, and its internal processes. The Managing Director and the other directors have been in frequent and informal contact during the year, in addition to the formal Board meetings. The strategy of the company, and the execution of the strategy, has been under frequent review, and the results under close scrutiny.

Directors have worked as an effective team, with close liaison. In the circumstances, directors have not felt it necessary to address the appointment of a new Chairman.

The policies and procedures in relation to the Board are set out in the Company’s Corporate Governance documents.

Board Processes

The Board has established a number of committees, including a nomination committee, a remuneration committee and an audit committee. The Board has also established a framework for the management of the Group including regular management committee meetings, internal control systems and the establishment of appropriate ethical standards.

The Charters and procedures of the various committees are set out in the Company’s Corporate Governance documents.

Nomination Committee

The names and qualifications of those appointed to the nomination committee for the year ended 30 June 2014 and their attendance at meetings of the committee are included in the directors’ report. This committee is involved in the overseeing of the appointment and induction process for new directors, committee members and senior management.

Evaluation of Board Performance

The Board monitors and evaluates its performance on an informal but regular basis. In particular, the composition of the Board is kept under regular review to ensure that the appropriate mix of skills and experience is available to the Board. Further, the size of the Board is under constant review, to ensure that it is commensurate with the scale of operations of the Group.

Energy Technologies Limited – 2014 Annual Report

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Corporate Governance Statement (Cont’d)

Principle 3: Promote ethical and responsible decision making

3.1	Establish a code of conduct and disclose the code or a summary of the code as to: •the practices necessary to maintain confidence in the company’s integrity •the practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders •the responsibility and accountability of individuals for reporting and investigating reports of unethical practices	Adopted the recommendation
3.2	Establish a policy concerning diversity and disclose the policy or a summary of that policy. The policy should include requirements for the Board to establish measurable objectives for achieving gender diversity for the Board to assess annually both the objectives and the progress in achieving them	Adopted the recommendation in part only. The company has not adopted particular targets, for the reasons set out below.
3.3	Disclose in each annual report the measurable objectives for achieving gender diversity set by the Board in accordance with the diversity policy and progress towards achieving them	The company has not adopted particular targets, for the reasons set out below.
3.4	Disclose in each annual report the proportion of women employees in the whole organisation, women in senior executive positions and women on the Board	Adopted the recommendation
3.5	Provide information reporting on principle 3	Adopted the recommendation

Code of Conduct

The Company has developed a Code of Conduct, an Employee Handbook and a comprehensive suite of policies which have been approved by the Board and apply to all employees, officers and Directors. This set of policies is regularly reviewed and may be amended as necessary to ensure it continues to reflect the best practices necessary to take into account legal obligations, maintain the Company’s integrity and comply with the reasonable expectations of the Company’s shareholders. The Code of Conduct is disclosed in the Company’s Corporate Governance documents.

Trading Policy

Trading in Company securities is regulated by the Corporations Act and the ASX Listing Rules. The Company’s policy regarding directors and employees trading in its securities is set by the Board, and is disclosed in the Company’s Corporate Governance documents. The policy restricts directors and employees from acting on material information until it has been released to the market and adequate time has been given for this to be reflected in the security’s price.

Diversity

The Company has adopted policies in relation to employment and recruitment which require the introduction of new staff and management of the Group’s employees on a non-discriminatory basis. Hiring policies are backed by policies in relation to Sexual Harassment and Grievance and Dispute Handling.

The Group is quite small. Some new employees have been employed by BWC since its purchase, but only very few. The small scale of the company’s hiring means that it is difficult to target new employees on a gender basis.

The Company’s policies are intended to ensure that equal opportunity is given to all potential employees, and that increasing gender diversity at all levels will not be discouraged. The Board will keep the gender composition of its workforce under review.

Fifteen per cent (15%) of all the Group’s employees are women. There are no women at a senior executive level or on the Board.

Energy Technologies Limited – 2014 Annual Report

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Corporate Governance Statement (Cont’d)

Principle 4: Safeguard integrity in financial reporting

4.1	Establish an audit committee	Adopted the recommendation
4.2	The audit committee should be structured so that it: •consists of only non-executive directors •consists of a majority of independent directors •is chaired by an independent chair, who is not chair of the Board •has at least three members	Adopted the recommendation in part
4.3	The audit committee should have a formal charter	Adopted the recommendation
4.4	Provide information reporting on principle 4	Adopted the recommendation

Audit Committee

The Board has established an audit committee. The names and qualifications of those appointed to the audit committee for the year ended 30 June 2014 and their attendance at meetings of the committee are included in the directors’ report. The audit committee consists of a majority of independent directors. During the year, after the size of the Board of the company was reduced, the audit committee was constituted with only two members. The Board of the company has only three members, but the Board has decided not to appoint Mr Alfred J. Chown, the Managing Director, to the audit committee. Thus the audit committee currently has only two members, consisting entirely of non-executive and independent directors. The Chief Financial Officer is invited to audit committee meetings at the discretion of the committee. The external auditor met with members of the committee at least twice during the year.

The charter of the audit committee is disclosed in the Company’s Corporate Governance documents.

The responsibilities of the audit committee include:

Assessing whether non-audit services provided by the external auditor are consistent with maintaining the external auditor’s independence. Each reporting period the external auditor provides an independence declaration in relation to the audit or review.
Providing advice to the Board in respect of whether the provision of the non-audit services by the external auditor is compatible with the general standard of independence of auditors imposed by the Corporations Act 2001.

Financial Reporting

Principle 5: Make timely and balanced disclosure and respect the rights of shareholders

5.1	Establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies	Adopted the recommendation
5.2	Provide information reporting on principle 5	Adopted the recommendation

Energy Technologies Limited – 2014 Annual Report

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Corporate Governance Statement (Cont’d)

Disclosure

The Company has a Continuous Disclosure policy to ensure compliance with ASX Listing Rules and Corporations Act obligations to keep the market fully informed of any information which may have material effect on the price or value of its securities. The policy is disclosed in the Company’s Corporate Governance documents. All ASX announcements are linked to the Company’s website as soon as possible after confirmation from ASX, including financial statements.

Principle 6: Respect the rights of shareholders

6.1	Establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies	Adopted the recommendation
6.2	Provide information reporting on principle 6	Adopted the recommendation

Disclosure

The Company takes advantage of electronic communication for investor relations. The Company’s website contains extensive information about the Board and management globally. It includes relevant press releases and media announcements in relation to the Company’s operations, relevant announcements made to the market via the ASX, Company presentations and copies of financial statements. The Company has recently upgraded its website and further development to ensure continuous and full disclosure is currently under way.

The Board encourages full participation of attending shareholders at the Annual General Meeting to maintain a high level of accountability and allow shareholders to identify the Company’s strategies and goals. The Company completes the Notice of Meeting and Explanatory Notes so that they provide clearly and concisely all of the information relevant to shareholders to enable them to make decisions on matters to be voted on at the meeting. The General Meetings are viewed as a tool to communicate with shareholders and the Company encourages and allows time for participation in the meetings. The external auditors are requested to attend each Annual General Meeting and be available for shareholder questions regarding the audit and the content of the audit report.

Principle 7: Recognise and manage risk

7.1	Establish policies for the oversight and management of material business risks and disclose a summary of those policies	Adopted the recommendation
7.2	Require management to design and implement the risk management and internal control system to manage the company’s material business risks and report to the Board on whether those risks are being managed effectively. The Board should disclose that management has reported to it as to the effectiveness of the company’s management of its material business risks.	Adopted the recommendation
7.3	Disclose whether it has received assurance from the Managing Director and the CFO that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.	Adopted the recommendation
7.4	Provide information reporting on principle 7	Adopted the recommendation

Energy Technologies Limited – 2014 Annual Report

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Corporate Governance Statement (Cont’d)

Risk Management

The group takes a proactive approach to risk management. The Board is responsible for ensuring that risks, and also opportunities, are identified on a timely basis and that the Group's objectives and activities are aligned with the risks and opportunities identified by the Board.

The Group believes that it is crucial for all Board members to be a part of this process, and as such the Board has not established a separate risk management committee. Instead sub-committees are convened as appropriate in response to particular issues and risks identified by the Board as a whole, and the sub-committee further examines the issue and reports back to the board.

The Board has a number of mechanisms in place to ensure that management's objectives and activities are aligned with the risks identified by the Board. These include the following:

Regular shareholder open days in addition to the AGM, attended by the Board and specified executives, which ensure that the Board is cognizant of the diverse needs of various stakeholders and assist in identifying the risks the business may face if those needs are not met. The Board holds ongoing discussion of issues raised in these meetings, to specifically review and update the corporate strategy as necessary.
Board approval of a strategic business plan, which encompasses the entity's vision, mission and strategy statements, designed to meet stakeholder’s needs and manage business risk.
Implementation of Board-approved operating plans and budgets and board monitoring of progress against these budgets, including the establishment and monitoring of key performance indicators (KPI's) of both a financial and nonfinancial nature.
The establishment of committees to report on specific business risks, including for example, such matters as occupational health and safety.
Regular management meetings involving executive directors, specified executives, and staff during which reports are given on production, sales, financial, compliance and strategic issues and decisions taken on operating matters, or referred to the Board.
Regular reports and cash forecasts from the CFO which assist in discharging the Board's responsibility to manage the Group's financial risks. The Board is advised on such matters as the Group's liquidity, available credit and currency exposures and monitors actions to ensure they are in line with Company policy.

To assist the Board in approving the Company’s financial statements, the Managing Director and the Chief Financial Officer are required to present a declaration with regard to the integrity of the financial statements to confirm to the Board that the Company’s financial statements present a true and fair view in all material respects of the Company’s financial condition and that operational results are in accordance with applicable accounting standards and the Corporations Act. The Board receives assurance from the Managing Director and the Chief Financial Officer that the declaration they make is founded on a sound system of risk management and internal control, and that the system is operating effectively in all material respects in relation to reporting of financial risks.

Principle 8: Remunerate fairly and responsibly

8.1	Establish a remuneration committee	Adopted the recommendation
8.2	The remuneration committee should be structured so that it: •consists of a majority of independent directors •is chaired by an independent chair •has at least three members	Adopted the recommendation
8.3	Clearly distinguish the structure of non-executive directors’ remuneration from that of executive directors and senior executives	Adopted the recommendation
8.4	Provide information reporting on principle 8	Adopted the recommendation

Energy Technologies Limited – 2014 Annual Report

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Corporate Governance Statement (Cont’d)

Remuneration Committee

The Board has established a remuneration committee. The remuneration committee reviews and makes recommendations to the Board on remuneration packages and policies applicable to the Managing Director, senior executives and staff and directors themselves. It is also responsible for share option schemes, incentive performance packages, and compliance with superannuation requirements, termination entitlements, fringe benefits policies and professional indemnity and liability insurance policies as applicable.

The names of the members of the remuneration committee and their attendance at meetings of the committee are detailed in the directors’ report. The remuneration committee in place for the year ended 30 June 2014 consisted of three directors but did not have majority of independent directors. The Chief Financial Officer is invited to remuneration committee meetings, as required, to discuss senior executives and staff performance and remuneration packages.

The charter in relation to the remuneration committee is disclosed in the Company’s Corporate Governance documents.

There are no schemes for retirement benefits other than statutory superannuation for non-executive directors.

Remuneration Policies

Remuneration levels are set to attract and retain appropriately qualified and experienced directors, senior executives and staff to run the consolidated entity. The board considers that the remuneration structure will be able to attract and retain the best executives with the necessary incentives to work to grow long-term shareholder value.

The remuneration committee obtains independent advice as necessary on the appropriateness of remuneration packages, given trends in comparative companies both locally and internationally. Remuneration includes a mix of fixed remuneration and performance-based remuneration. All senior executives receive a base salary, superannuation, fringe benefits and performance incentives. The remuneration committee reviews executive packages semi-annually by reference to company performance, executive performance, comparative industry information and relevant independent advice. The performance of executives is measured against criteria agreed half-yearly which is based on the forecast growth of the Company’s turnover and profits and shareholders’ value.

A revised Directors Equity Plan was established in 2011 and approved by shareholders at the 2011 Annual General Meeting.

Executives and employees are also entitled to participate in the EGY Share Option Plan also approved by shareholders at the 2011 Annual General Meeting.

The Company’s non-executive directors are paid directors’ fees for their normal performance of duties as a director. Where there is a significant and sustained requirement for work by a director in excess of that considered normal for the Company, the Company will pay a one-off bonus in respect of that work.

The amount of remuneration for all directors and the highest paid executives, including all monetary and non-monetary components, are detailed in the Directors’ Report.

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Energy Technologies Limited – 2014 Annual Report

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Consolidated Income Statement

for the year ended 30 June 2014

Note	Consolidated 2014 2013 $ $
Continuing Operations Sales Revenue 2(a) Cost of Sales 3 Gross Margin Rendering of services 2(a) Other revenue 2(b) Marketing expenses Occupancy expenses Administrative expenses Finance costs 3 Depreciation and amortisation expenses 3 Other expenses Share of Net (Loss) of associate 14(b) Loss from continuing operations before income tax Income tax expense 4 Loss from continuing operations after income tax Loss attributable to non-controlling interest Loss attributable to members of the parent entity Earnings per share Basic earnings per share (cents per share) 8 Diluted earnings per share (cents per share) 8 Basic earnings per share from continuing operations (cents per share) 8	12,658,913 9,579,649 (10,221,901) (7,184,494)
	2,437,012 2,395,155 50,939 99,632 1,589,674 875,823 (44,075) (35,226) (470,231) (436,690) (3,962,731) (4,233,389) (265,891) (75,497) (236,074) (251,137) (147,186) (310,232) - (390,585)
	(1,048,563) (2,362,146) (7,638) (2,417)
	(1,056,201) (2,364,563) 68,794 132,386
	(987,407) (2,232,177)
	(0.50) (1.35)
	(0.50) (1.35)
	(0.50) (1.35)

The accompanying notes form part of these financial statements.

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Consolidated Statement of Comprehensive Income

for the year ended 30 June 2014

Note LOSS FOR THE YEAR OTHER COMPREHENSIVE INCOME FOR THE YEAR AFTER TAX: a) Items that will be reclassified subsequently to profit or loss when specific conditions are met: Movement in foreign exchange relating to translation of controlled foreign entities Exchange differences on foreign exchange relating to non-controlling interest b) Items that will not be reclassified to profit or loss: Revaluation of Plant and equipment to fair value 15 TOTAL OTHER COMPREHENSIVE INCOME FOR THE YEAR TOTAL COMPREHENSIVE LOSS FOR THE YEAR TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO: Members of the parent entity Non-controlling interest	Consolidated 2014 2013 $ $ (1,056,201) (2,364,563) 4,060 12,422 4,060 12,422 931,109 -
	939,229 24,844
	(116,972) (2,339,719)
	(52,238) (2,219,754) (64,734) (119,965)
	(116,972) (2,339,719)

The accompanying notes form part of these financial statements.

Energy Technologies Limited – 2014 Annual Report

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Consolidated Statement of Financial Position

as at 30 June 2014

Note	Consolidated 2014 2013 $ $
CURRENT ASSETS Cash and cash equivalents 9 Trade and other receivables 10 Inventories 11 Financial assets 12 Other current assets 17 TOTAL CURRENT ASSETS NON-CURRENT ASSETS Property, plant and equipment 15 Investments accounted for using the equity method 14 Deferred tax assets 20(a) Intangible assets 16 TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables 18 Financial liabilities 19 Short-term provisions 22 TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Financial liabilities 19 Other non-current liabilities 21 Long-term provisions 22 TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 23 Reserves 24 Accumulated losses Parent interest Non-controlling interest TOTAL EQUITY	65,609 68,465 3,399,561 1,710,803 2,936,590 3,014,275 5,367 5,367 255,637 357,368
	6,662,764 5,156,278
	2,190,988 1,381,969 - - 207,957 215,595 10,439 14,482
	2,409,384 1,612,046
	9,072,148 6,768,324
	3,725,910 2,623,069 2,826,581 1,889,305 545,840 492,864
	7,098,331 5,005,238
	835,109 1,127,738 521,520 521,520 25,486 61,904
	1,382,115 1,711,162
	8,480,446 6,716,400
	591,702 51,924
	8,374,278 7,717,528 (1,045,254) (1,980,423) (6,213,492) (5,226,085)
	1,115,532 511,020 (523,830) (459,096)
	591,702 51,924

The accompanying notes form part of these financial statements.

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Consolidated Statement of Changes in Equity

for the year ended 30 June 2014

	Issued Capital Reserves Accumulated losses Non-Controlling Interest Total $ $ $ $ $
Consolidated Balance at 01 July 2012 Comprehensive income Loss for the year Other comprehensive income for the year Total comprehensive income (loss) for the year Transactions with owners, in their capacity as owners, and other transfers Shares issued in lieu of directors fees Capital return Total transactions with owners, in their capacity as owners, and other transfers Balance at 30 June 2013 Balance at 01 July 2013 Comprehensive income Loss for the year Other comprehensive income for the year Total comprehensive income (loss) for the year Transactions with owners, in their capacity as owners, and other transfers Equity contribution Shares issued in lieu of directors fees Total transactions with owners, in their capacity as owners, and other transfers Balance at 30 June 2014	10,163,080 (1,992,845) (2,993,908) (339,132) 4,837,195 - - (2,232,177) (132,386) (2,364,563) - 12,422 - 12,422 24,844
	- 12,422 (2,232,177) (119,964) (2,339,719)
	52,250 - - - 52,250 (2,497,802) - - - (2,497,802)
	(2,445,552) - - - (2,445,552)
	7,717,528 (1,980,423) (5,226,085) (459,096) 51,924
	7,717,528 (1,980,423) (5,226,085) (459,096) 51,924 - - (987,407) (68,794) (1,056,201) - 935,169 - 4,060 939,229
	- 935,169 (987,407) (64,734) (116,972)
	638,000 - - - 638,000 18,750 - - - 18,750
	656,750 - - - 656,750
	8,374,278 (1,045,254) (6,213,492) (523,830) 591,702

The accompanying notes form part of these financial statements.

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Consolidated Statement of Cash Flows

for the year ended 30 June 2014

Note	Consolidated 2014 2013 $ $
CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Interest received Payments to suppliers and employees Finance costs Net cash outflow from operating activities 29 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of property, plant and equipment Purchase of property, plant and equipment Advances (to) from related parties Payment for subsidiary, net of cash acquired Payment for additional shares in associate Capital Return Net cash outflow from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares Proceeds from issue of convertible notes Proceeds from borrowings Repayment of borrowings Loans from Directors Net cash inflow from financing activities Net decrease in cash held Cash at beginning of financial year Effect of exchange rates on cash holdings in foreign currencies Cash at end of financial year 9	12,400,236 9,849,222 740 48,639 (13,531,287)(11,696,652) (265,891) (75,497)
	(1,396,202) (1,874,288)
	6,954 58,836 (120,334) (295,218) - (3,934) (259,999) (1,510,000) - (218,191) - (2,432,285)
	(373,379) (4,400,792)
	638,000 - 700,000 - 729,615 1,236,664 (540,423) (109,340) 240,000 478,314
	1,767,192 1,605,638
	(2,389) (4,669,442) 68,465 4,707,988 (467) 29,919
	65,609 68,465

The accompanying notes form part of these financial statements.

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 1 Summary of Significant Accounting Policies

(a) Basis of Preparation

The financial statements are a general purpose financial report, which has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards.

The financial statements are presented in Australian dollars unless otherwise stated.

The financial statements were authorised for issue on 30 September 2014 by the directors of Energy Technologies Limited.

Energy Technologies Limited is a listed public company, incorporated and domiciled in Australia.

(b) Statement of compliance

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards as issued by the IASB. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless stated otherwise.

Except for cash flow information, the financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

(c) Going Concern

The consolidated entity incurred a loss after tax of $1,056,201 (2013:$2,364,563 loss after including a one-off gain from a premium on consolidation of $785,029) and incurred negative cash flows from operations of $1,396,202 (2013: $1,874,288) for the year ended 30 June 2014, and had a deficiency of current assets at 30 June 2014 of $435,567.

These matters give rise to a material uncertainty that may cast significant doubt upon the consolidated entity’s ability to continue as a going concern. The ongoing operation of the consolidated entity is dependent upon it:

(i) achieving cash flow positive trading operations from its existing business;
(ii) receiving continued financial support from its current financiers and debt holders; and
(iii) raising further funding over the ensuing 12 months.

Management have prepared cash flow projections to 30 September 2015 that support the ability of the consolidated entity to continue as a going concern. The cash flow projections for the period to 30 June 2015 assume approximately $4.7 million gross margin resulting from a combination of a 15% increase in sales revenues and substantial cost of sales reductions from the 2013/14 year, new capex investment of $750,000 and a capital raising of up to $1.5 million. The projections also defer further payments of the BWC Vendor liability to which the Vendor has agreed, pending the finalisation of a restructuring of the Vendor liability payment arrangements.

The Directors are confident of achieving the forecast results and raising the necessary funds. A director has undertaken to provide financial support to the group pending the further fund raising. Consequently the Directors believe the consolidated entity will continue as a going concern and it is therefore appropriate to prepare these financial statements on that basis. Sales results subsequent to balance date have been in line with the budgeted sales forecast.

In the event that the consolidated entity is unable to achieve the matters detailed above, it may not be able to continue as a going concern and therefore the consolidated entity may not be able to realise its assets and extinguish its liabilities in the ordinary course of operations and at the amounts stated in the financial statements. No adjustments have been made to the recoverability and classification of recorded asset values and the amount and classification of liabilities that might be necessary should the consolidated entity and company not continue as going concerns.

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 1 Summary of Significant Accounting Policies (Cont’d)

(d) Principles of Consolidation

The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Energy Technologies Limited (EGY) at the end of the reporting period. The parent controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

Where controlled entities have entered or left the Group during the year, the financial performance of those entities is included only for the period of the year that they were controlled. A list of controlled entities is included in Note 13 to the financial statements.

In preparing the consolidated financial statements, all intragroup balances and transactions between entities in the consolidated group have been eliminated in full on consolidation.

Non-controlling interests, being the equity in the subsidiary not attributable, directly or indirectly, to a parent, are reported separately within the equity section of the consolidated statement of financial position and statements showing profit or loss and other comprehensive income. The non-controlling interests in the net assets comprise their interests at the date of the original business combination and their share of changes in equity since that date.

Changes in a parent’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions (ie. transactions with owners in their capacity as owners).

(e) Business Combinations

Business combinations occur where an acquirer obtains control over one or more businesses.

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The business combination will be accounted for from the date that control is attained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised (subject to certain limited exemptions).

Where measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent consideration arrangement is also included. Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability is remeasured in each reporting period to fair value, recognising any change to fair value in the profit or loss, unless the change in value can be identified as existing at acquisition date.

All transaction costs incurred in relation to business combinations are expensed.

The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase. A gain from a bargain purchase is accounted for in the income statement at the acquisition date.

(f) Foreign currencies

The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars (A$), which is the parent entity’s functional currency.

Foreign currency transactions are translated into functional currency at the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are retranslated at the year-end exchange rate. Nonmonetary items measured at fair value are reported at the exchange rate as at the date when fair value was determined.

Exchange differences arising on the translation of monetary items are recognised in the profit or loss, except where deferred in equity as a qualifying cash flow or net investment hedge. Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive income to the extent that the underlying gain or loss is recognised in other comprehensive income; otherwise the exchange difference is recognised in profit or loss.

Energy Technologies Limited – 2014 Annual Report

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 1 Summary of Significant Accounting Policies (Cont’d)

(f) Foreign currencies (Cont’d)

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

(i) Assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;
(ii) Income and expenses are translated at average exchange rates for the period; and
(iii) Retained earnings are translated at the exchange rates prevailing at the date of the transaction.

The functional currencies of the overseas subsidiaries are:

D Power International Limited – Hong Kong Dollars

Dulhunty Yangzhou Line Fittings Co. Limited – Chinese RenMinBi

Exchange differences arising on translation of foreign operations with functional currencies other than Australian dollars are recognised in other comprehensive income and included in the foreign currency translation reserve in the statement of financial position. The cumulative amount of these differences is reclassified into profit or loss in the period in which the operation is disposed of.

(g) Property, plant and equipment

Each class of Plant and equipment is stated at cost or fair value as indicated, less accumulated depreciation and any impairment in value.

Increases in the carrying amount arising on revaluation of plant and equipment are credited to a revaluation surplus in equity. Decreases that offset previous increases of the same asset are recognised against revaluation surplus directly in equity; all other decreases are recognised in profit or loss.

Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.

Depreciation is calculated on both a straight-line and diminishing value basis over the estimated useful life of the asset as follows:

Buildings & Leasehold Improvements 10% to 25%

Plant and equipment 9% to 66.6%

Leased plant & Equipment 13% to 16.7%

Impairment

The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets or cash-generating units are written down to their recoverable amount. The recoverable amount of plant and equipment is the greater of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Impairment losses are recognised in the revaluation surplus or in the income statement, as set out above.

(h) Intangible assets

Intangible assets acquired separately are capitalised at cost as at the date of acquisition. Following initial recognition, the cost model is applied to the class of intangible assets.

The useful lives of Patents, Computer Software and Licenses are assessed and amortised over their useful lives and amortisation charged is taken to the income statement.

Intangible assets are tested for impairment where an indicator of impairment exists either individually or at the cash generating unit level. Useful lives are also examined on an annual basis and adjustments, where applicable, are made on a prospective basis.

Energy Technologies Limited – 2014 Annual Report

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 1 Summary of Significant Accounting Policies (Cont’d)

(i) Investments

All investments are initially recognised at cost, being the fair value of the consideration given and including acquisition charges associated with the investment.

Financial assets are classified at ‘fair value through profit or loss’ when they are held for trading for the purpose of short term profit taking. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss.

Amortised cost is calculated by taking into account any discount or premium on acquisition, over the period to maturity.

For investments carried at amortised cost, gains and losses are recognised in income when the investments are derecognised or impaired, as well as through the amortisation process.

For investments where there is no quoted market price, fair value is determined by reference to the current market value of another instrument which is substantially the same or is calculated based on the expected cash flows of the underlying net asset base of the investment.

(j) Inventories

Manufacturing

Inventories are valued at the lower of cost and net realisable value.

Costs incurred in bringing each product to its present location and condition is accounted for as follows:

Raw materials — valued on a rolling average cost;
Finished goods and work-in-progress — cost of raw materials and standard cost of labour and a proportion of manufacturing overheads based on estimated machine man minute.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion.

(k) Impairment of assets

At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.

Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset's value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

(l) Trade and other receivables

Trade receivables are recognised and carried at original invoice amount less an allowance for any uncollectible amounts.

A provision for doubtful debts will be made against specific trade receivables where collection of the debt, either in full or in part, remains uncertain. Bad debts are written off when identified.

Energy Technologies Limited – 2014 Annual Report

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 1 Summary of Significant Accounting Policies (Cont’d)

(m) Cash and cash equivalents

Cash on hand and in banks and short-term deposits are stated at nominal value.

For the purposes of the Statement of Cash Flows, cash includes cash on hand, in banks and money market investments readily convertible to cash within 2 working days.

(n) Investments in Associates

Associates are companies in which the Group has significant influence through holding, directly or indirectly, 20% or more of the voting power of the Group. Investments in associates are accounted for in the financial statements by applying the equity method of accounting, whereby the investment is initially recognised at cost and adjusted thereafter for the post-acquisition change in the Group’s share of net assets of the associate company. The interest in an associate is the carrying amount of the investment together with any long term interests that in substance form part of the investors’ net investment in the associate. In addition, the Group’s share of the profit or loss of the associated company is included in the Group’s profit or loss.

Profits and losses resulting from transactions between the Group and the associate are eliminated to the extent of the Group’s interest in the associate.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group discontinues recognising its share of further losses until it has incurred legal or constructive obligations or made payments on behalf of the associate. When the associate subsequently makes profits, the Group will resume recognising its share of those profits once its share of the profits equals the share of the losses not recognised.

Details of the Group’s investment in associates are provided in Note 14.

(o) Financial Instruments

(i) Initial recognition and measurement

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

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

(ii) Classification and subsequent measurement

Financial instruments are subsequently measured at fair value, amortised cost using the effective interest method, or cost.

Non-derivative financial liabilities other than financial guarantees are subsequently measured at amortised cost. Gains or losses are recognised in profit or loss through the amortisation process and when the financial liability is derecognised.

(p) Borrowing costs

Borrowing costs are recognised as an expense when incurred.

(q) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying consolidated benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Energy Technologies Limited – 2014 Annual Report

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 1 Summary of Significant Accounting Policies (Cont’d)

(r) Leases

Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments.

Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the lease term.

(s) Revenue

Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed. The following specific recognition criteria must also be met before revenue is recognised:

Sale of goods

Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and can be measured reliably. Risks and rewards are considered passed to the buyer at the time of delivery of the goods to the customer.

Rendering of services

Revenue is recognised only when services are completed.

Interest

Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount of the financial asset.

Dividends

Revenue is recognised when the shareholders' right to receive the payment is established.

(t) Income tax

The income tax expense for the year comprises current income tax expense/(income) and deferred tax expense/(income). Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, except for deferred tax liability on revaluation of plant and equipment not recognised due to the existence of unrecognised tax losses available for offset.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 1 Summary of Significant Accounting Policies (Cont’d)

(u) Other taxes

Revenues, expenses and assets are recognised net of the amount of GST except:

where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
receivables and payables are stated with the amount of GST included.

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

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

(v) Contributed equity

Issued and paid up capital is recognised at the fair value of the consideration received by the Company.

Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

(w) Employee benefits

Provision is made for the company’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs.

Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

(x) Payables

Liabilities for trade creditors and other amounts are carried at amortised cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the consolidated entity.

(y) Fair Value

The Group subsequently measures some of its assets at fair value on a recurring basis. Fair value is the price the Group would receive to sell an asset in an orderly (ie unforced) transaction between independent, knowledgeable and willing market participants at the measurement date.

As fair value is a market-based measure, the closest equivalent observable market pricing information is used to determine fair value. Adjustments to market values may be made having regard to the characteristics of the specific asset. The fair values of assets that are not traded in an active market are determined using one or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market data.

To the extent possible, market information is extracted from either the principal market for the asset (ie the market with the greatest volume and level of activity for the asset) or, in the absence of such a market, the most advantageous market available to the entity at the end of the reporting period (ie the market that maximises the receipts from the sale of the asset after taking into account transaction costs and transport costs). For non-financial assets, the fair value measurement also takes into account a market participant’s ability to use the asset in its highest and best use or to sell it to another market participant that would use the asset in its highest and best use.

Energy Technologies Limited – 2014 Annual Report

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 1 Summary of Significant Accounting Policies (Cont’d)

(z) Critical Accounting Estimates and Judgments

The directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group.

Key Estimates

i) Impairment

The company assesses impairment at the end of each reporting period by evaluating conditions and events specific to the company that may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed using value-in-use calculations which incorporate various key assumptions.

ii) Recovery of deferred tax assets

Deferred tax assets are recognised for deductible temporary differences as management considers that it is probable that future taxable profits will be available to utilise those temporary differences. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits over the next two years together with future tax planning strategies.

iii) Estimation of useful lives of assets

The estimation of the useful lives of assets has been based on historical experience as well as manufacturer’s warranties (for plant and equipment), lease terms (for leased equipment), and turnover policies (for motor vehicles). In addition, the condition of the assets is assessed at least once per year and considered against the remaining useful life. Adjustments to useful lives are made when considered necessary.

iv) Revaluation of plant and equipment – refer to Note 15

v) Associate Entity DPPL

The board of EGY has applied the following tests under AASB 10 in determining that it does not control the operations of DPPL:

EGY does not own 50% or more of the voting power of DPPL.
EGY does not have the power to govern the financial and operating policies under a statute or agreement.
EGY is a party only to a shareholders agreement. The power to govern the finance and operating policies rests with the board of DPPL.
EGY does not have the power to appoint or remove the majority of the board of DPPL.
EGY does not have the power to cast the majority of votes at meetings of the board of directors.

Accordingly its investment in DPPL is accounted for under AASB 128 Investments in Associates.

vi) Contingent consideration – refer Note 13.

Energy Technologies Limited – 2014 Annual Report

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 2 Revenues from Continuing Operations (a)Revenue from Continuing Operations Sale of goods Rendering of services (b)Other Revenues from Continuing Operations R&D grant Foreign exchange gains on unhedged transactions Management Fees Discount on acquisition of subsidiary Reduction in deferred acquisition consideration liability Interest revenue Insurance refund Other Total Other Revenue from Continuing Operations Note 3 Profit/(Loss) for the Year from Continuing Operations Expenses Cost of sales Finance costs Rental expense on operating leases: - minimum lease payments Foreign Exchange Losses Depreciation and amortisation expenses	Consolidated 2014 2013 $ $ 12,658,913 9,579,649 50,939 99,632
	12,709,852 9,679,281
	1,201,822 - 9,194 2,191 61,200 33,661 - 785,029 224,546 - 10,706 48,639 64,265 - 17,941 6,303
	1,589,674 875,823
	10,221,901 7,184,494 265,891 75,497 843,336 716,614 20,307 65,374 236,074 251,137

Energy Technologies Limited – 2014 Annual Report

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 4 Income Tax Expense from Continuing Operations

(a)The components of income tax expense comprise: Current tax Deferred tax (b)Reconciliation of the prima facie tax on profit/(loss) from continuing operations to income tax expense: Prima facie tax on (loss) from continuing operations before income tax at 30% (2013: 30%) Add: Tax effect of: - other non-allowable items - R&D expenditure non-allowable - other assessable items - unrealised foreign exchange loss - tax losses not brought to account* - revaluation of investments - deferred income tax Less: Tax effect of: - provision for doubtful debts - unrealised foreign exchange gain - R&D grant non assessable - discount on acquisition not assessable Income tax expense on continued operations	Consolidated 2014 2013 $ $ - - 7,638 2,417
	7,638 2,417
	(314,569) (708,644) 18,995 149,394 496,189 305,394 1,308 461 2,760 15,667 240,797 483,468 - 269 7,638 2,417
	767,687 957,070
	- 10,500 17,569 - 360,547 - 67,364 235,509
	445,480 246,009
	7,638 2,417

*Current year tax losses unable to be offset within the group and not brought to account.

Energy Technologies Limited – 2014 Annual Report

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 5 Key Management Personnel Compensation

Compensation of Key Management Personnel

Refer to the remuneration report contained in the Directors’ Report for details of the remuneration paid or payable to each member of the Group’s key management personnel (KMP) for the year ended 30 June 2014 and the comparative year.

The totals of remuneration paid to KMP of the company and the Group during the year are as follows:

Short-term employee benefits Post-employment benefits Share-based payments	Consolidated 2014 2013 $ $ 553,930 664,925 39,951 48,739 - 71,000
	593,881 784,664

Short--term employee benefits

These amounts include fees and benefits paid to the executive Chair and non-executive directors as well as all salary, paid leave benefits, fringe benefits and cash bonuses awarded to executive directors and other KMP.

Post-employment benefits

These amounts are the current year’s estimated cost of providing for superannuation contributions made during the year and post-employment life insurance benefits.

Share-based payments

These amounts represent the expense related to the participation of KMP in equity-settled benefits schemes as measured by the fair value of the options, rights and shares granted on grant date.

Note 6 Auditors' Remuneration

Remuneration of the auditor of the parent entity for: — auditing or reviewing the financial statements — other services Remuneration of other auditors of subsidiaries for: — auditing or reviewing the financial report of subsidiaries — tax compliance services	$ $ 73,500 93,133 2,000 7,682
	75,500 100,815
	- 9,760 - 1,580
	- 11,340

Note 7 Dividends

No dividends have been paid or proposed by the Parent for the year ended 30 June 2014 (2013: Nil)

Energy Technologies Limited – 2014 Annual Report

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 8 Earnings per Share

(a)Reconciliation of earnings to profit or loss: Profit (loss) (Profit)/Loss attributable to non-controlling entity interest Earnings used to calculate basic and dilutive EPS (b)Reconciliation of earnings to profit or loss from continuing operations: Loss from continuing operations Loss attributable to non-controlling entity interest in respect of continuing operations Earnings used to calculate basic and dilutive EPS from continuing operations (c)Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS Weighted average number of dilutive options outstanding Weighted average number of ordinary shares outstanding during the year used in calculating dilutive EPS	Consolidated 2014 2013 $ $ (1,056,201) (2,364,563) 68,794 132,386
	(987,407) (2,232,177)
	(1,056,201) (2,364,563) 68,794 132,386
	(987,407) (2,232,177)
	197,890,174 165,404,625 - -
	197,890,174 165,404,625

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 9 Cash and Cash Equivalents Note Cash at bank and on hand Reconciliation of cash Cash at the end of the financial year as shown in the statement of cash flows is reconciled to items in the Statement of Financial Position as follows: Cash and cash equivalents Note 10 Trade and Other Receivables CURRENT Trade receivables (a) Other receivables Amounts receivable from: — Associated entity (b) (a) Trade debtors are based on normal terms of trade, typically 30 days from end of month. Retention of title terms exist on sales. (b) Loan to Associated entity Losses applied against loan Note 11 Inventories At cost Raw materials and stores Work in progress Finished goods	Consolidated 2014 2013 $ $ 65,609 68,465
	65,609 68,465
	65,609 68,465
	65,609 68,465
	2,438,301 1,540,951 961,260 169,852 - -
	3,399,561 1,710,803
	328,211 328,211 (328,211) (328,211)
	- -
	673,651 494,593 197,960 82,874 2,064,979 2,436,808
	2,936,590 3,014,275

Energy Technologies Limited – 2014 Annual Report

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 12 Financial Assets

Note CURRENT Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss comprise investments in the ordinary shares of Firstfolio Ltd (ASX Code: FFF). Reconciliation of Movements in Assets at Fair Value: Opening Balance Net (loss) gain through Profit and Loss Closing Balance Note 13 Controlled Entitles (a) Controlled Entitles Consolidated Country of Incorporation Parent Entity: Energy Technologies Limited Australia Subsidiaries of Energy Technologies Limited : Bambach Wires & Cables Pty Limited Australia Cogenic Pty Limited Australia D Power International Limited (previously Dulhunty Power International Limited) British Virgin Islands D Power International Limited (Hong Kong Branch) Hong Kong Dulhunty Yangzhou Line Fittings Co Limited China	Consolidated 2014 2013 $ $ 5,367 5,367
	5,367 5,367
	5,367 6,262 - (895)
	5,367 5,367
	Percentage Owned (%) 2014* 2013 100 100 100 100 51 51 51 51 51 51

* Percentage of voting power is in proportion to ownership

Energy Technologies Limited – 2014 Annual Report

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 13 Controlled Entitles (Cont’d)

(b) Acquisition of Controlled Entitles

On 2 July 2012 the parent entity acquired 100% in Bambach Wires and Cables Pty Limited (BWC). BWC is a long established and well respected Australian company manufacturing specialised and industrial cables at its Brookvale factory. EGY had been working towards the acquisition of this company for some time. BWC provides an opportunity for the Group to apply its experienced management to generate growth for the benefit of the Group. In addition to its own manufactured products, BWC supplies products imported from international suppliers. Since acquisition BWC has increased both the range of products and the geographical sales area. BWC is synergistic with investments held in the power pole and electricity generation.

Purchase Consideration: - Cash - Working Capital Adjustment - Contingent Consideration1 Less: - Receivables2 - Inventories - Property, Plant and equipment - Deferred Tax Assets - Payables - Provisions - Financial Liabilities Identifiable Assets acquired and liabilities assumed Discount on acquisition	Fair Value 2013 $ 1,000,000 1,812,065 521,520
	3,333,585
	1,692,509 2,276,935 1,398,536 218,013 (831,042) (526,996) (109,341)
	4,118,614
	785,029

Contingent consideration consists of additional contract payments made up of a deferred consideration of 2% of all sales of cable products, net of discounts and rebates for each of the years beginning 12 months after and 24 months after completion date (2 July 2012). This has been estimated at between $500,000 and $550,000 based on current conditions at reporting date. Refer to Note 21.
The directors believe receivables are fully recoverable and no provision for impairment is required.
The discount on acquisition was included in the FY2013 income statement within Other Revenue.
Included within administration expenses in the FY2013 income statement are acquisition related costs totalling $43,040. The costs include stamp duty, legal and other professional fees.
Revenue of BWC included in the consolidated revenue of the Group since the acquisition date on 2 July 2012 (FY2013) amounted to $9,625,373. Losses of BWC included in the consolidated losses of the Group FY2013 amounted to $1,725,387

Energy Technologies Limited – 2014 Annual Report

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 14 Investment Accounted for Using the Equity Method

Associated Company
An Interest is held in the following associated company
Name
Principal Activity
Country of
Incorporation
Shares
Unlisted:
Dulhunty Poles Pty
Limited
Manufacture & Sale of
Glass Fibre Reinforced
Cement Composite
Power Poles
Australia
Ordinary
Note
(a)Movements During The Year in Equity Accounted
Investment in Associated Company
Balance at beginning of the financial year
Subscription for Convertible Notes
(c)
Increase in ownership interest
Loans to Associates
10(b)
Share of associated company loss before income tax
(b)
Balance at end of the financial year
(b)Equity Accounted Loss of Associate is as follows:
Share of Associate (Loss) before income tax
Management Fees Charged
Share of Associate Income Tax expense
Share of Associate (Loss) after income Tax

Consolidated
2014
2013
$
$ -
-
-
-
Ownership
Interest
Carrying
Amount of
Investment
%
%
$ 2014
2013
36
45
-
-
Consolidated
2014
2013
$
$ -
-
-
-
-
218,191
-
199,934
-
(418,125)
-
-
-
(418,125)
-
27,540
-
-
-
(390,585)

Share of loss from associate has been accounted for after adjustment of management fee

Energy Technologies Limited – 2014 Annual Report

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 14 Investment Accounted for Using the Equity Method (Cont’d)

(c) EGY invested a total of $710,500 in convertible notes issued by associated entity Dulhunty Poles Pty Limited in the 2012 financial year. Convertible notes were offered at the rate of one note per share held. Convertible Notes were issued at $1.00 per note. EGY has recorded start-up losses incurred in DPPL against the carrying value of these convertible notes. During the 2014 year these notes were converted to B Class shares in DPPL. Shares were issued at value of one share per note.
(d) Summarised Presentation of Aggregate Assets, Liabilities and Performance of Associates

Current Assets Non-current assets Total Assets Current Liabilities Non-current liabilities Total Liabilities Net Assets Revenues Loss after income Tax of Associate	Consolidated 2014 2013 $ $ 782,479 1,115,769 2,760,018 2,748,940
	3,542,497 3,864,709
	520,819 1,623,019 1,761,435 2,933,999
	2,282,254 4,557,018
	1,260,243 (692,309)
	2,133,456 2,051,769
	(222,841) (2,090,984)

The share of associates losses not recognised at 30 June 2014 was $1,056,588 (30 June 2013 $976,365)

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 15 Property, Plant and Equipment Leasehold Improvements Leasehold Improvements at cost: Less: Accumulated depreciation Leasehold Improvements at independent valuation Less: Accumulated depreciation Total Leasehold Improvements Plant and Equipment Plant and equipment at cost: Less: Accumulated depreciation Plant and equipment at independent valuation Less: Accumulated depreciation Leased Plant and Equipment Capitalised Leased Assets Less: Accumulated depreciation Total Plant and Equipment Total Property, Plant and Equipment	Consolidated 2014 2013 $ $ - 35,377 - (4,399)
	- 30,978
	27,800 - - -
	27,800 -
	27,800 30,978
	39,011 3,684,300 (34,215) (2,504,102)
	4,796 1,180,198
	1,947,950 - - -
	1,947,950 -
	253,929 180,020 (43,487) (9,227)
	210,442 170,793
	2,163,188 1,350,991
	2,190,988 1,381,969

Movements in Carrying Amounts

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

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 15 Property, Plant and Equipment (Cont’d)

Consolidated Entity: Carrying amount at the beginning of the year Additions Disposals Depreciation expense Write-back on disposals Revaluation to fair value Carrying amount at the end of the year	Leasehold Improvements Plant and Equipment Leased Plant and Equipment Total $ $ $ $ 30,978 1,180,198 170,793 1,381,969 - 46,425 73,909 120,334 - (42,468) - (42,468) (5,072) (192,699) (34,260) (232,031) - 32,075 - 32,075 1,894 929,215 - 931,109
	27,800 1,952,746 210,442 2,190,988

Revaluation of Plant and Equipment to Fair Value

In accordance with the measurement choice available under AASB 116 Property, Plant & Equipment and in order to reflect fair value, subsidiary Bambach Wires and Cables Pty Ltd (BWC) has obtained an independent valuation of existing plant and equipment as at 30 June 2014. The valuation report was completed under the following bases of value:

Fair Market Value in Continued Use (FMVICU)

Reinstatement with New Value (RIV)

The fair value of BWC Plant and Equipment and Leasehold Improvements under FMVICU was $1,975,750. The Board has adopted this value, which has resulted in an increase in net plant and equipment value of $931,109 in BWC. The revaluation amount was recognised in the Asset Revaluation Reserve and total reported BWC Plant and Equipment increased to $2,186,192. A deferred tax liability of $279,333 has not been recognised in respect of the revaluation, as BWC has unrecognised tax losses available to offset any liability arising upon a disposal of plant and equipment. EGY has no plans to dispose of its plant and equipment

RIV value was reported as $7,520,750.

The Group initially recognises and measures its Plant and Equipment and Leasehold Improvements at cost. The Group subsequently measures some classes of its plant and equipment and its leasehold improvements at fair value on a recurring basis in accordance with AASB 116: Property, Plant and Equipment. Refer Note 1 (g).

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 15 Property, Plant and Equipment (Cont’d)

Fair Value Measurement

AASB 13 Fair Value Measurement requires the disclosure of fair value information by level of the fair value hierarchy, which categorises fair value measurements into one of three possible levels based on the lowest level that an input that is significant to the measurement can be categorised into, as follows:

Level 1: Measurements based on quoted prices in active markets for identical assets that the entity can access at the measurement date.
Level 2: Measurements based on inputs other than the quoted prices included in Level 1, but that are observable for the asset, either directly or indirectly.
Level 3: Measurements based on unobservable inputs for the asset or liability.

EGY’s management considers that the inputs used for the fair value measurement are Level 2 and Level 3 inputs.

Valuation techniques

AASB 13 requires the valuation technique used to be consistent with one of the following valuation approaches:

Market approach: techniques that use prices and other information generated by market transactions for identical of similar assets.
Income approach: techniques that convert future cash flows or income and expenses into a single discounted present value.
Cost approach: techniques that reflect the current replacement cost of an asset at its current service capacity.

EGY commissioned an external independent valuer to conduct a valuation of its unencumbered plant and equipment and leasehold improvements at 30 June 2014 using a market approach technique. The technique predominantly used recent observable market data for similar new equipment in Australia, adjusted for loss in value caused by physical deterioration, functional obsolescence and economic obsolescence. EGY’s management considers that the market approach is the appropriate valuation technique in relation to its plant and equipment and leasehold improvements.

Inputs used in the market approach technique to measure Level 2 fair values were:

current replacement cost of the property being appraised less the loss in value caused by physical deterioration, functional obsolescence and economic obsolescence,
historical cost and relevant market data and industry expertise,
sales comparison for assets where available.

The assessments of the physical condition, functional obsolescence and economic obsolescence are considered Level 3 inputs.

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 15 Property, Plant and Equipment (Cont’d)

Recurring fair value measurements: Plant and equipment Leasehold improvements Total non-financial assets recognised at fair value	Level 2 2014 $ 1,947,950 27,800
	1,975,750

The highest and best use of the assets is the fair market value in continued use, using the market approach technique.

Note 16 Intangible Assets

Note 16 Intangible Assets
Trademarks, computer software and licenses at cost Accumulated amortisation and impairment Net carrying value Total intangible assets Consolidated Entity: Year ended 30 June 2014 Balance at the beginning of the year Additions Disposals Amortisation Balance at the end of the year	Consolidated 2014 2013 $ $ 17,686 17,686 (7,247) (3,204)
	10,439	14,482
	10,439	14,482
		Trademarks, Software & Licenses $ 14,482 - - (4,043)
		10,439

Intangible assets have finite useful lives. The current amortisation charges in respect of intangible assets are included under depreciation and amortisation expense.

Note 17 Other Assets

CURRENT Prepayments	Consolidated 2014 2013 $ $ 255,637 357,368
	255,637 357,368

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 18 Trade and Other Payables

Note 18 Trade and Other Payables
Note CURRENT Unsecured liabilities: Trade payables Sundry payables and accrued expenses Trade payables are based on normal terms of trade, typically 60 days from end of month. Note 19 Financial Liabilities CURRENT Secured liabilities: Invoice finance facility (a) Hire Purchase liability (a) Deferred acquisition consideration (b) Unsecured liabilities: Directors and executive loans Total Current Financial Liabilities NON CURRENT Secured liabilities: Hire Purchase liability (a) Deferred acquisition consideration (b) Convertible Notes (c) Unsecured liabilities: Directors loans Total Non-Current Financial Liabilities Total Financial Liabilities Total current and non-current secured liabilities: Invoice finance facility Hire purchase liability Deferred acquisition consideration Convertible Notes	Consolidated 2014 2013 $ $ 2,150,917 1,916,476 1,574,993 706,593
	3,725,910 2,623,069
	1,677,623 1,056,446 71,439 52,859 817,519 780,000
	2,566,581 1,889,305
	260,000 -
	260,000 -
	2,826,581 1,889,305
	135,109 127,359 - 522,065 700,000 -
	835,109 649,424
	- 478,314
	- 478,314
	835,109 1,127,738
	3,661,690 3,017,043
	1,677,623 1,056,446 206,548 180,218 817,519 1,302,065 700,000 -
	3,401,690 2,538,729

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 19 Financial Liabilities (Cont’d)

(a) The parent entity (EGY) has guaranteed the obligations of subsidiary Bambach Wires and Cables Pty Ltd (BWC) under a financial accommodation facility arranged with the National Australia Bank (NAB). The facility is secured by a security interest and a charge held by NAB over all of the present and future rights, property and undertaking of BWC. It is also a condition of the financial accommodation that EGY provide a guarantee and indemnity for the maximum amount of $2,360,000 supported by a charge over the rights, property and undertaking of EGY.
(b) The parent entity (EGY) has agreed to a second fixed and floating charge being put in place over all of the present and future rights, property and undertaking of BWC to secure the Deferred Acquisition consideration.
(c) EGY raised $700,000 by the issue of secured convertible notes, resulting in the issue of 700 Convertible Notes each with a face value of one thousand dollars to investors. Shareholder approval to the issue of the Convertible Notes was given at the Annual General Meeting of the company held on 5 December 2013. Each investor was paid interest at the rate of one per cent (1%) per annum on the amount of their commitment from the time of commitment and each Convertible Note bears interest at the rate which is eight percentage points higher than the RBA Cash Rate from time to time, from subscription until conversion. Interest is payable monthly in arrears. The Convertible Notes will mature on 1 November 2016.

Note 20 Tax Note (a) Deferred Tax Assets Deferred tax assets comprise: Provisions Property, plant and equipment Unrealised foreign exchange (gain) loss (b) Reconciliations (i) Gross Movements The overall movement in the deferred tax account is as follows: Opening balance Charge to the income statement 4 Acquisitions/(Disposals) Closing balance	Consolidated 2014 2013 $ $ 168,955 159,223 40,406 42,410 (1,404) 13,962
	207,957 215,595
	215,595 - (7,638) (2,417) - 218,012
	207,957 215,595

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 20 Tax (Cont’d) Note (ii) Deferred Tax Assets The movement in deferred tax assets for each temporary difference during the year is as follows: Provisions Opening balance Credited (charge) to the income statement Acquisitions Closing Balance Property, plant and equipment Opening balance (Charge) to the income statement Acquisitions Closing Balance Unrealised foreign exchange (gain) loss Opening balance (Charge) credited to the income statement Closing Balance Total Deferred Tax Assets (c)Deferred tax assets not brought to account, the benefits of which will only be realised if the conditions for deductibility set out in Note 1(t) occur are: Temporary differences Tax losses: capital losses Tax losses: operating losses Less potential tax loss benefits offset against deferred tax liability - refer (d) Tax losses: operating losses net of offsets (d)Deferred tax liability not recognised due to the existence of unrecognised tax losses available for offset: Revaluation of plant and equipment, and leasehold improvements Less: Offset of unrecognised tax loss benefit Net deferred tax liability	Consolidated 2014 2013 $ $ 159,223 - 9,732 (14,149) - 173,372
	168,955 159,223
	42,410 - (2,004) (2,230) - 44,640
	40,406 42,410
	13,962 - (15,366) 13,962
	(1,404) 13,962
	207,957 215,595
	30,317 24,909 1,368,908 1,368,908
	3,617,255 3,720,828 (279,333) -
	3,337,922 3,720,828
	279,333 - (279,333) -
	- -

Net deferred tax liability

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 21 Other Liabilities NON CURRENT Royalty Component acquisition of subsidiary Note 22 Provisions CURRENT Employee Entitlements Opening balance at beginning of year Additional provisions raised/(paid) during year Acquisitions Balance at end of the year NON CURRENT Employee Entitlements Opening balance at beginning of year Additional provisions raised/(paid) during year Acquisitions Balance at end of the year Analysis of Total provisions Current Non-current	Consolidated 2014 2013 $ $ 521,520 521,520
	521,520 521,520
	492,864 38,420 52,976 (34,953) - 489,397
	545,840 492,864
	61,904 30,526 (36,418) (6,221) - 37,599
	25,486 61,904
	545,840 492,864 25,486 61,904
	571,326 554,768

Provision for Employee Entitlements

A provision has been recognised for employee entitlements relating to annual leave and long service leave. In calculating the present value of future cash flows in respect of long service leave and annual leave not expected to be settled within twelve months, the probability of that leave being taken is based on historical data. The measurement and recognition criteria relating to employee benefits have been included in Note 1 to this report.

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 23 Issued Capital

Number of Ordinary shares fully paid 224,528,463 (2013: 165,847,091): Ordinary Shares At the beginning of reporting period Shares issued during year - 9 October 2012 - 18 September 2013 - 5 December 2013 - 20 December 2013 At reporting date	Consolidated 2014 2013 $ $ 8,374,278 7,717,528
	8,374,278 7,717,528
	No. No. 165,847,091 164,263,758 - 1,583,333 2,083,333 - 11,764,705 - 44,833,334 -
	224,528,463 165,847,091

On 9 October 2012, the company issued 1,583,333 ordinary shares at $0.033 per share for payment of directors’ fees under the directors’ equity plan.

On 18 September 2013, the company issued 2,083,333 ordinary shares at $0.009 per share for payment of directors’ fees under the directors’ equity plan.

Terms and conditions:

Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at shareholders' meetings. In the event of winding up of the company, ordinary shareholders rank after creditors and are fully entitled to any proceeds of liquidation.

Note 24 Reserves

Exchange differences arising on translation of foreign controlled subsidiaries Asset Revaluation	Consolidated 2014 2013 $ $ (1,976,363) (1,980,423) 931,109 -
	(1,045,254) (1,980,423)

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 25 Parent Entity Disclosures

(a) Financial Position

a) Financial Position
CURRENT ASSETS Cash and cash equivalents Trade and other receivables Financial Assets Other Current Assets TOTAL CURRENT ASSETS NON CURRENT ASSETS Financial Assets Property, plant and equipment Intangible assets TOTAL NON CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Financial liabilities Short-term provisions TOTAL CURRENT LIABILITIES NON CURRENT LIABILITIES Financial liabilities Other non-current liabilities Other long-term provisions TOTAL NON CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Accumulated Losses Asset Revaluation Reserve TOTAL EQUITY	2014 2013 $ $ 897 12,582 750,054 370,819 5,367 5,367 25,122 38,444
	781,440 427,212
	2,315,919 3,400,839 4,796 12,484 10,439 14,482
	2,331,154 3,427,805
	3,112,594 3,855,017
	385,062 552,411 817,519 780,000 96,792 75,512
	1,299,373 1,407,923
	700,000 1,000,379 521,520 521,520 - -
	1,221,520 1,521,899
	2,520,893 2,929,822
	591,701 925,195
	8,374,278 7,717,528 (7,597,878) (6,672,368) (184,699) (119,965)
	591,701 925,195

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 25 Parent Entity Disclosures (Cont’d)

(b) Financial Performance

		2014	2013
		$	$
Profit (Loss) for the year		(925,510)	(1,159,952)
Other comprehensive Income/(Loss)		(64,734)	(119,965)
Total Comprehensive Income (Loss)		(990,244)	(1,279,917)
(c)	Parent entity result includes:
	(i) impairment of investment in controlled entities of $1,020,186 (2013: $NIL)
	(ii) impairment of loan and investment in associated entity of $NIL (2013 $418,125)
(d)	Guarantees entered into by the parent entity in relation to the debts of its subsidiaries $2,360,000 (2013:		$2,360,000).
	Refer Note 19(a)
(e)	Contingent Liabilities of the Parent Entity – Refer to Note 27
(f)	Commitments for the acquisition of Property, Plant and Equipment by the parent entity $NIL (2013 $NIL)
(g)	Parent entity has net current liabilities at balance date of $517,933 (2013: $980,711). The directors of the		Parent Entity
	have undertaken to ensure that the Company has sufficient funds to meet its financial	obligations and maintain solvency.
	Refer Note 1(c)
Note 26 Capital and Leasing Commitments
		Consolidated
		2014 2013
		$	$
(a) Operating Lease Commitments
	Non-cancellable operating leases contracted for but not capitalised in
	the financial statements
	Payable — minimum lease payments
	— not later than 12 months	720,852	725,701
	— between 12 months and 5 years	839,099	877,395
	— more than 5 years	-	-
		1,559,951	1,603,096
(b) Finance Lease Commitments
	— not later than 12 months	71,439	52,859
	— between 12 months and 5 years	135,109	127,359
	— more than 5 years	-	-
	Payable — minimum lease payments	206,548	180,218
	Less future finance charges	40,142	23,354
	Present value of minimum lease payments	166,406	156,864

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 27 Contingent Liabilities

(a) John Fielding Limited

Previous financial statements of the company have noted a contingent liability to John Fielding Limited for services carried out prior to 30 June 1995 in regards to amendments to income tax returns. However in accordance with the contract no fee is payable until a cash benefit is received by the Company. At this stage no cash benefit has been received by the Company. The maximum liability is $130,241.

(b) Bank Guarantee

(i) The parent entity (EGY) has guaranteed the obligations of the associated entity, Dulhunty Poles Pty Limited (DPPL), under a $750,000 Asset Finance Facility arranged with the National Australia Bank (NAB). The Asset Finance Facility is secured by pole manufacturing plant and equipment owned by DPPL in excess of $1.5 million and a Fixed and Floating Charge held by NAB over all of the present and future rights, property and undertaking of DPPL. It is also a condition of the Asset Finance Facility that EGY provide a guarantee and a Fixed and Floating Charge over the rights, property and undertaking of EGY. In consideration of EGY having provided the guarantee and charge, DPPL has indemnified EGY against any loss and charge EGY may suffer or incur arising out of the guarantee or charge. The current maximum liability of DPPL under the facility including term charges is $197,690.
(ii) Since 30 June 2013 the parent entity (EGY) has guaranteed the obligations of newly acquired subsidiary Bambach Wires and Cables Pty Limited (BWC), under a financial accommodation facility arranged with the National Australia Bank (NAB). The Facility is secured by a security interest and a Charge held by NAB over all of the present and future rights, property and undertaking of BWC. It is also a condition of the financial accommodation that EGY provide a guarantee and indemnity for the maximum amount of $2,360,000 supported by a Charge over the rights, property and undertaking of EGY.

(c) Lease Guarantee

The parent entity (EGY) has guaranteed the obligations of the associated entity, Dulhunty Poles Pty Limited (DPPL), as tenant under the terms of a lease over premises Lot 1, 35-39 Buckley Grove, Moolap, Victoria. The lease is for a period of ten years, with rent payments commencing 1st August 2010. Rent is subject to fixed annual review and the total rental per the lease agreement for the fifth year excluding outgoings is $315,145. DPPL was entitled to rental incentive rebates over the first three years of the lease.

(d) Sale of Assets of DPIL

Some contractual obligations between the company and the purchaser of DPIL assets remain post completion. This includes the winding up entities no longer required. No material cash impact on the company is expected.

(e) Return of Capital

On 17 October 2012, shareholders of EGY approved the return of excess capital at the rate of 2c per share to the owners of those shares on 24 October 2012, in one or more tranches as the directors see fit. Soon after 24 October, the first tranche of 1.5 cents per share was paid.

As a result of a the dramatic decline in the trading conditions for BWC beginning in about November 2012, and the resulting decline in sales, it was necessary to devote the financial resources of the EGY group to supporting BWC. Accordingly, directors have not resolved to pay the balance of the payment.

This amount remains to be returned to shareholders when conditions permit. The total amount remaining to be returned to shareholders amounts to $829,235, and will be paid when the financial position of the group permits it.

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 28 Segment Reporting

Primary reporting - Business segments

The group’s primary business segment is Specialist and Industrial Cables. Therefore the segment details are fully reflected in the results and balances reported in the Income Statement and Statement of Financial Position.

Segment accounting policies

Inter-segment pricing is determined on an arms-length basis and are eliminated on consolidation.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

Segment capital expenditure is the total costs incurred during the period to acquire segment assets that are expected to be used for more than one period.

Secondary reporting - Geographic segments

Geographical location: Asia Australia Eliminations	Segment Revenues from External Customers Carrying Amount of Segment assets Acquisitions of Non-current Segment Assets 2014 2013 2014 2013 2014 2013 $ $ $ $ $ $ 15,808 3,362 106,285 111,871 - - 14,283,718 10,579,282 13,345,367 11,303,820 120,334 295,218 - (27,540) (4,379,504) (4,647,367) - -
	14,299,526 10,555,104 9,072,148 6,768,324 120,334 295,218

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 29 Cash Flow Information

Note 29 Cash Flow Information
Note (a) Reconciliation of Cash Flow from Operations with Net Profit/(Loss) after Income Tax Net profit/(loss) after income tax Non-cash flows in profit/(loss) Depreciation of non-current assets Amortisation of intangibles Unrealised foreign exchange movements Discount on acquisition Net loss on disposal of property, plant and equipment Management fees associate Share of loss from associate Non-Operating Cash Flow Cash Items Shares issued in lieu of directors fees Reduction in deferred acquisition consideration liability Changes in assets and liabilities Working Capital at date of acquisition of new subsidiary (Increase)/decrease in trade and other receivables (Increase)/decrease in inventories Increase/(decrease) in trade payables and accruals Increase/(decrease) in income taxes payable (Increase)/decrease in deferred tax asset Decrease in value of current financial asset Net (increase) /decrease in value of other current assets Increase/(decrease) in provisions for current/non-current employee entitlements Cash flow (outflows) from operations	Consolidated 2014 2013 $ $ (1,056,201) (2,364,563) 232,031 248,523 4,043 2,614 8,587 (5,220) - (785,029) 3,439 10,869 - 27,540 - 390,585 18,750 52,250 (224,546) - - 2,829,419 (1,688,758) (1,410,352) 77,685 (3,014,275) 1,102,841 1,984,093 - 84,854 7,638 (215,595) - 895 101,731 (196,718) 16,558 485,822
	(1,396,202) (1,874,288)

Note 29
Cash Flow Information

Note
(a)
Reconciliation of Cash Flow from Operations with Net
Profit/(Loss) after Income Tax
Net profit/(loss) after income tax
Non-cash flows in profit/(loss)
Depreciation of non-current assets
Amortisation of intangibles
Unrealised foreign exchange movements
Discount on acquisition
Net loss on disposal of property, plant and equipment
Management fees associate
Share of loss from associate
Non-Operating Cash Flow Cash Items
Shares issued in lieu of directors fees
Reduction in deferred acquisition consideration liability
Changes in assets and liabilities
Working Capital at date of acquisition of new subsidiary
(Increase)/decrease in trade and other receivables
(Increase)/decrease in inventories
Increase/(decrease) in trade payables and accruals
Increase/(decrease) in income taxes payable
(Increase)/decrease in deferred tax asset
Decrease in value of current financial asset
Net (increase) /decrease in value of other current assets
Increase/(decrease) in provisions for current/non-current employee entitlements
Cash flow (outflows) from operations

Consolidated
2014
2013
$
$ (1,056,201)
(2,364,563)
232,031
248,523
4,043
2,614
8,587
(5,220)
-
(785,029)
3,439
10,869
-
27,540
-
390,585
18,750
52,250
(224,546)
-
-
2,829,419
(1,688,758)
(1,410,352)
77,685
(3,014,275)
1,102,841
1,984,093
-
84,854
7,638
(215,595)
-
895
101,731
(196,718)
16,558
485,822

(1,396,202)
(1,874,288)

(b) Non-cash Financing and Investing Activities

Share issues:

On 9 October 2012, the company issued 1,583,333 ordinary shares at $0.033 per share for payment of directors’ fees under the directors’ equity plan.

On 18 September 2013, the company issued 2,083,333 ordinary shares at $0.009 per share for payment of directors’ fees under the directors’ equity plan.

(c) The Group has in place an invoice financing facility with a limit of $2,000,000 and a current interest rate of 10.87%. At balance date $1,677,623 of this facility had been utilised.

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 30 Share-Based Payments

On 18 September 2013, the company issued 2,083,333 ordinary shares at $0.009 per share for payment of directors’ fees under the directors’ equity plan.

Note 31 Events After the Reporting Period

There are no matters or circumstances that have arisen since 30 June 2014 that have significantly affected or may significantly affect the operations of the group, the results of those operations or the state of affairs of the group in subsequent financial years.

Note 32 Related Party Transactions

No loans were made, guaranteed or secured by any entity in the consolidated entity to any group of specified directors and specified executives during the financial year.

Loans by Directors to the company

During the 2013 year, EGY raised a total of $478,314 under a loan facility agreement as reported in the 2013 Annual Report. Of this amount directors and related parties advanced $328,314 as at 30 June 2013. These loans were unsecured and interest was payable at the rate which is eight percentage points higher than the RBA cash rate from time to time. Shareholder approval to the issue of the unsecured Convertible Notes in satisfaction of these loans and subsequent conversion to ordinary shares in the company was given at the Annual General Meeting of the company held on 5 December 2013. During the 2014 year, a total of $15,808 (2013: $13,438) was accrued as interest on these loans from directors or their related parties. On 20 December 2013 these notes were converted to ordinary shares in the company. Refer also Note 19.

In September 2013, the Company entered into a conditional agreement with lenders to provide the sum of $100,000 to the company, as a subscription for shares, subject to the approval of the shareholders. The proposed issue price for the shares ($0.0085) was agreed at the time, based on the prevailing market price at that time. The funds were provided shortly thereafter, with $90,000 provided by directors and related parties. Shareholder approval to the issue of ordinary shares in the company was given at the Annual General Meeting of the company held on 5 December 2013 and shares were issued on that date. Refer also Note 23

During the 2014 year, EGY raised $700,000 by the issue of secured convertible notes, from a possible facility limit of $1,000,000, resulting in the issue of 700 Convertible Notes each with a face value of one thousand dollars to investors. Shareholder approval to the issue of the Convertible Notes was given at the Annual General Meeting of the company held on 5 December 2013. Each investor was paid interest at the rate of one per cent (1%) per annum on the amount of their commitment from the time of commitment and each Convertible Note bears interest at the rate which is eight percentage points higher than the RBA Cash Rate from time to time, from subscription until conversion. Interest is payable monthly in arrears. The Convertible Notes will mature on 1 November 2016. Included in this Convertible Note issue Directors and related parties of directors invested $150,000 and were issued 150 Convertible Notes. During the 2014 year, a total of $12,114 was accrued as interest on these loans from directors or their related parties. Refer also Note 19.

Loans by Directors to subsidiary company

During the 2014 year a director, Gary Ferguson made loans of $240,000 and other key management personnel made loans of $20,000 to subsidiary Bambach Wires and Cables Pty Ltd. These loans are unsecured and repayable on demand. Interest is paid at the rate of twelve percent per annum. During the 2014 year, a total of $6,003 was accrued as interest on these loans. Refer also Note 19.

Certain directors have undertaken to provide further financial support as required to $750,000 pending planned further fundraising.

Dulhunty Poles Pty Ltd (DPPL ) – Associated Entity

(i) Bank Guarantee

Refer Note 27 Contingent Liabilities. EGY has guaranteed some of the obligations of DPPL.

(ii) Management fee

During the financial year EGY received management fees from DPPL in return for services provided. These fees totalled net $61,200 (2013: $33,660).

Energy Technologies Limited – 2014 Annual Report

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 32 Related Party Transactions (Cont’d)

Other transactions with the company or its controlled entities and director related entities

A number of specified directors and specified executives, or their personally-related entities, hold positions in other entities that result in them having control or significant influence over the financial or operating policies of these entities.

A number of these entities transacted with the company or its subsidiaries in the reporting period. The terms and conditions of those transactions were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to unrelated entities on an arms-length basis.

Details of these transactions are as follows:

Mr Alfred Chown is a director of NLP International Limited. A subsidiary company, D Power International Limited (DPIL), formerly Dulhunty Power International Limited, during the period employed the services of NLP International Limited as consultants. The consideration paid for these services was $12,000 (2013: $28,000) and is included in director’s emoluments.

Mr Michael Butcherine is principal of legal practice Michael Butcherine Solicitor. During the period Energy Technologies Limited received legal advice from this entity and paid $5,000 (2013: $3,909) in fees. Mr Butcherine is also a director of The Western Division Pty Limited which received consulting fees totalling $35,000 (2013: $60,800) during the period. The balance outstanding as at 30 June 2014 to Michael Butcherine Solicitor was $NIL and the balance outstanding to The Western Division Pty Limited $NIL.

The transactions above are on normal commercial terms and conditions.

Note 33 Financial Risk Management Disclosures

(a) Capital Risk Management

Energy Technologies Limited (EGY) manages its capital to ensure that entities in the EGY Group will be able to continue as a going concern while maximising the potential return to stakeholders through the optimum balance of debt and equity. This strategy remains unchanged from FY2013.

The capital structure of the EGY Group consists of cash and cash equivalents, debt and equity attributable to equity holders of

the EGY parent and to its operating subsidiary.

The EGY Group operates internationally through its subsidiary company DPIL based in Hong Kong. The EGY Group senior management monitors all externally imposed capital requirements in each jurisdiction to ensure compliance.

Operating cash flows are used to maintain and expand the Group manufacturing and distribution asset base as well as to meet routine outflows including tax and the repayment of maturing debt. The EGY Group Board and senior management consider the costs of capital and monitor the gearing ratio in line with the industry custom determined as a proportion of net debt to equity.

The gearing ratio at year end was as follows:

Financial Assets Debt (i) Cash and cash equivalents Net Debt Equity (ii) Net Debt to Equity ratio	Consolidated 2014 2013 $ $ 3,661,690 3,017,043 (65,609) (68,465)
	3,596,081 2,948,578 591,702 51,924 608% 5679%

(i) Debt is defined as long-term and short-term borrowings.

(ii) Equity includes all capital and reserves and minority interest.

Energy Technologies Limited – 2014 Annual Report

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 33 Financial Risk Management Disclosures (Cont’d)

(b) Financial Risk Management

In common with other businesses the EGY Group is exposed to risks that arise from the use of financial instruments. This note describes the objectives, policies and processes for managing those risks and the methods used to measure them. The EGY Group’s financial instruments consist mainly of facilities with banks, short term loans, accounts receivable and payable, loans to and from subsidiaries, leases and derivatives. There have been no substantive changes in the EGY Group level of exposure to financial instrument risks or the objectives and processes for managing those risks from previous periods unless otherwise stated in this note.

(i) Financial Risk Management Objectives

The Board of Directors has overall responsibility for the determination of the EGY Group financial risk management framework and, whilst retaining ultimate responsibility for them, it has delegated authority for the design and implementation of operating processes ensuring effective risk management to the EGY Group’s corporate treasury and finance function, which provides services to the business including negotiation and co-ordination of finance facilities, and the monitoring and management of the financial risks as they relate to the operations of the Group. The Board receives regular reports through which it reviews the effectiveness of the processes put in place and the appropriateness of the set objectives to control risk.

Overall the risk management strategy seeks to assist the Group in meeting its financial targets as well as minimizing the potential adverse effects on financial performance. The main exposures to financial instrument risk experienced by the EGY Group are credit risk, liquidity risk and market risk (including currency risk, interest rate risk and price risk). The EGY Group does not enter into financial instruments, including derivative financial instruments, for speculative purposes.

(ii) Credit Risk

Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in a loss to the EGY Group. This arises principally from the Group’s trade receivables. For the EGY Group this risk has been determined as low.

The maximum exposure to credit risk by class of recognised financial assets at the end of the reporting period, excluding the value of any collateral or other security held, is equivalent to the carrying amount and classification of those financial assets (net of any provisions) as presented in the Statement of Financial Position. Credit risk also arises through the provision of financial guarantees, as approved at Board level, given to parties securing the liabilities of certain subsidiaries and associates (Refer Note 19 (a) and (b) for details).

The Group has a general policy of only dealing with creditworthy counterparties. As well, a credit check system is also in place and credit checks are obtained from a reputable external source for selected new and overseas customers. Overseas customers’ trade terms include use of documentary credit bank facilities in customer locations deemed at risk, as well as collateral payment. There are no material amounts of collateral held as security at 30 June 2014.

(iii) Liquidity Risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. Ultimate responsibility for liquidity risk management vests with the EGY Board of Directors and the main subsidiary Board of Directors, who apply an appropriate liquidity risk management framework to the Group’s short, medium and long term funding requirements. The EGY Group manages liquidity risk by the retention of adequate reserves, banking facilities and reserve borrowing facilities and by monitoring forecast and actual cash flows, which are updated regularly by the treasury and finance function, and matching the maturity profiles of financial assets and liabilities.

(iv) Liquidity and interest rate tables

The following table details the EGY Group contractual maturity for non-derivative financial assets and liabilities and are based on undiscounted cash flows of financial assets and liabilities on the earliest date on which repayment can be required.

Energy Technologies Limited – 2014 Annual Report

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Notes to the Financial Statements for the year ended 30 June 2014

Note 33 Financial Risk Management Disclosures (Cont’d)

Effective Weighted Average Interest Rate - % CONSOLIDATED ENTITY 2014 2013	Floating Interest Rate $ Fixed Rate Within One Year $ Fixed Rate Over 1-5 Years $ Non-interest Bearing $ Total $ 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013
Financial Assets: Cash and cash equivalents 2.85 3.10 Receivables - - Investments - - Total Financial Assets Financial Liabilities: Trade payables - - Sundry payables - - Invoice finance facility 10.87 11.00 Hire purchase liability 9.67 8.33 Deferred acquisition consideration - - Loans from directors and executives 12.00 12.00 Convertible notes 10.50 - Total Financial Liabilities Net financial assets (liabilities)	65,609 68,465 - - - - - - 65,609 68,465 - - - - - - 3,399,561 1,710,803 3,399,561 1,710,803 - - - - - - 5,367 5,367 5,367 5,367
	65,609 68,465 - - - - 3,404,928 1,716,170 3,470,537 1,784,635
	- - - - - - 2,150,917 1,916,476 2,150,917 1,916,476 - - - - - - 1,574,993 706,593 1,574,993 706,593 1,677,623 1,056,446 - - - - - - 1,677,623 1,056,446 - - 71,439 52,859 135,109 127,359 - - 206,548 180,218 - - - - - - 817,519 1,302,065 817,519 1,302,065 - - 260,000 - - 478,314 - - 260,000 478,314 - - - - 700,000 - - - 700,000 -
	1,677,623 1,056,446 331,439 52,859 835,109 605,673 4,543,429 3,925,134 7,387,600 5,640,112
	(1,612,014) (987,981) (331,439) (52,859) (835,109) (605,673) (1,138,501) (2,208,964) (3,917,063) (3,855,477)

Energy Technologies Limited – 2014 Annual Report

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 33 Financial Risk Management Disclosures (Cont’d)

(v) Maturity analysis

Trade and other payables are expected to be paid within a period of 6 months from year end for the consolidated entity for 2014 and 2013.

(vi) Market Risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the EGY Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk within acceptable parameters, while achieving optimum return.

(vii) Foreign currency risk management

The EGY Group is exposed to currency risk on investments that are denominated in a currency other than the respective functional currencies of Group entities, primarily the Australian dollar (AUD) and Hong Kong Dollar (HKD). The Group’s investments in, and loans to, its subsidiaries are not hedged as these positions are considered to be long term in nature.

The carrying amount of the EGY Group’s foreign currency denominated monetary assets and monetary liabilities at the reporting date is as follows:

US Dollars Euros Thai Baht Chinese RMB Hong Kong Dollars Swiss Francs Total	Liabilities Assets 2014 2013 2014 2013 $’000 $’000 $’000 $’000 266 146 33 36 104 466 - - 1 2 - - 23 22 58 60 64 57 3 - - 5 - -
	458 698 94 96

(viii) Forward exchange contracts

The EGY Group policy is, where possible, to allow group entities to settle liabilities denominated in their functional currency with the cash generated from their own operations in that currency. Where group entities have liabilities denominated in a currency other than their functional currency, cash already denominated in that currency will, where possible, be used from within the Group.

The Group’s primary operating exposure is where trade receivables and payables are not denominated in their functional currency. The overall treasury function is based in Australia where the primary banking facilities are maintained, including a trade facility denominated and repayable in the currency as drawn. The Group also enters into forward exchange contracts to buy and sell specified amounts of foreign currencies in the future at stipulated exchange rates, with the objective of protecting the Group against unfavourable exchange rate movements for contracted sales and purchases in foreign currencies, primarily EUR.

At 30 June 2014 the details of outstanding forward exchange contracts are:

	Average	Average	Foreign	Foreign	Contract value	Contract value	Fair Value	Fair Value
	exchange rate		currency	amount	in $A		In $A
	2014	2013	2014	2013	2014	2013	2014	2013
Consolidated – less
than 3 months
Buy Euros	-	0.6887	-	50,833	-	73,806	-	73,806

Energy Technologies Limited – 2014 Annual Report

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 33 Financial Risk Management Disclosures (Cont’d)

(b) Financial Risk Management (Cont’d)

(ix) Foreign currency sensitivity analysis

The following table details the EGY Group’s sensitivity to a 10% increase or decrease in the Australian Dollar against relevant foreign currencies. This sensitivity represents management’s assessment of the reasonable possible change in foreign currency rates. Its analysis includes cash assets plus outstanding foreign currency denominated trade receivables and payables and adjusts their translation at the period end for a 10% change in foreign currency rates. A positive number indicates an increase in profit where the Australian dollar strengthens against the respective currency. For a weakening of the Australian dollar against the respective currency, there would be an equal and opposite impact on the profit.

Profit or Loss/Equity US Dollars Euros Chinese RMB Hong Kong Dollars Swiss Francs Total	Consolidated 2014 2013 $’000 $’000 (26) (12) (12) (52) 5 4 (7) (6) - (1)
	(40) (67)

(x) Interest Rate Risk Management

The EGY Group is exposed to interest rate risk on cash and cash equivalents, which is the risk that a financial instrument’s value will fluctuate as a result of changes in the market interest rates on interest bearing financial instruments. The EGY Group does not use derivatives to mitigate these exposures.

The EGY Group’s fixed rate financial instruments represent short term borrowings, at fixed rates maturing over periods less than one year and long term borrowings at fixed rates maturing over periods of between 1 to 5 years. The Groups’ variable rate financial securities consist of bank facilities managed in Australia.

(xi) Interest rate sensitivity analysis

The following analysis indicates the effect of a 2% or 200 basis point increase or decrease in nominal interest rates, based on exposures in existence at the reporting date, and holding all other variables constant. This represents management’s assessment of the reasonably possible change in interest rates as at that date.

Change in Net Profit: Interest rise by 2% (200 basis points) Interest cut by 2% (200 basis points) Change in Equity: Interest rise by 2% (200 basis points) Interest cut by 2% (200 basis points)	Consolidated 2014 2013 $’000 $’000 (72) (59) 72 59 (72) (59) 72 59

Energy Technologies Limited – 2014 Annual Report

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 33 Financial Risk Management Disclosures (Cont’d)

(b) Financial Risk Management (Cont’d)

(xii) Price Risk

The EGY Group is exposed to commodity price risk on the purchase of raw materials through its manufacturing operations in Australia. Futures markets and Economic Forecasts are monitored to determine whether to implement a commodity hedging policy.

(xiii) Fair value of financial instruments

The Group uses various methods in estimating the fair value of a financial instrument. The methods comprise:

Level 1 – the fair value is calculated using quoted prices in active markets.

Level 2 – the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices).

Level 3 – the value is estimated using inputs for the asset or liability that are not based on observable market data.

The fair value of the financial instruments as well as the methods used to estimate the fair value are summarised in the table below.

Financial assets Available for sale investments •Listed investments Financial Liabilities Derivative instruments •Foreign exchange contracts	Year Ended 30 June 2014 Year Ended 30 June 2013 Quoted Market Price (Level 1) Valuation technique – market observable inputs (Level 2) Valuation technique – non market observable inputs (Level 3) Total Quoted Market Price (Level 1) Valuation technique – market observable inputs (Level 2) Valuation technique – non market observable inputs (Level 3) Total $ $ $ $ $ $ $ $ 5,367 - - 5,367 5,367 - - 5,367
	5,367 - - 5,367 5,367 - - 5,367
	- - - - 73,806 - - 73,806
	- - - - 73,806 - - 73,806

Quoted market price represents the fair value determined based on quoted prices in active markets as at the reporting date without any deduction for transaction costs. The fair value of the listed equity investments are based on quoted market prices.

For financial instruments not quoted in active markets, the Group uses valuation techniques such as present value techniques, comparison to similar instruments for which market observable prices exist and other relevant models used by market participants. These valuation techniques use both observable and unobservable market inputs.

Financial instruments that use valuation techniques with only observable market inputs or unobservable inputs that are not significant to the overall valuation include interest rate swaps, forward commodity contracts and foreign exchange contracts not traded on a recognised exchange.

Transfer between categories

There were no transfers between Level 1 and Level 2 during the year.

Energy Technologies Limited – 2014 Annual Report

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Notes to the Financial Statements

for the year ended 30 June 2014

Note 34 New and Amended Accounting Policies Adopted by the Group

Consolidated financial statements

The Group adopted the following Australian Accounting Standards, together with the relevant consequential amendments arising from related Amending Standards, from the mandatory application date of 1 January 2013:

AASB 10: Consolidated Financial Statements;
AASB 12: Disclosure of Interests in Other Entities; and
AASB 127: Separate Financial Statements.

AASB 10 provides a revised definition of "control" and may result in an entity having to consolidate an investee that was not previously consolidated and/or deconsolidate an investee that was consolidated under the previous accounting pronouncements. These Standards are not expected to significantly impact the Company's financial statements.

Employee benefits

The Group adopted AASB 119: Employee Benefits (September 2011) and AASB 2011-10: Amendments to Australian Accounting standards arising from AASB 119 (September 2011) from the mandatory application date of 1 January 2013.The Group has applied these Standards retrospectively in accordance with AASB 108: Accounting Policies, Changes in Accounting Estimates and Errors and the transitional provisions of AASB 119. These Standards are not expected to significantly impact the Group's financial statements.

NOTE 35 New Accounting Standards for Application in Future Periods

Accounting Standards and Intepretations issued by the AASB that are not yet mandatorily applicable to the Group, together with an assessment of the potential impact of such pronouncement on the Group when adopted in future periods, are discussed below:

AASB 9: Financial Instruments and associated Amending Standards (applicable for annual reporting periods commencing on or after 1 January 2017).

This Standard will be applicable retrospectively and includes revised requirements for the classification and measurement of financial instruments, revised recognition and derecognition requirements for financial instruments and simplified requirements for hedge accounting.

AASB 2012-3: Amendments to Australian Accounting Standards - Offsetting Financial Assets and Financial Liabilities (applicable for annual reporting periods commencing on or after 1 January 2014).

This Standard provides clarifying guidance relating to the offsetting of financial instruments, which is not expected to impact the Group's financial statements.

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Notes to the Financial Statements

for the year ended 30 June 2014

NOTE 35 New Accounting Standards for Application in Future Periods (Cont’d)

Interpretation 21: Levies (applicable for annual reporting periods commencing on or after 1 January 2014).

Interpretation 21 clarifies the circumstances under which a liability to pay a levy imposed by a government should be recognised, and whether that liability should be recognised in full at that specific date or progressively over a period of time. This Interpretation is not expected to significantly impact the Group financial statements.

AASB 2013-3: Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial Assets (applicable for annual reporting periods commencing on or after 1 January 2014).

This Standard amends the disclosure requirement in AASB 136: Impairment of Assets pertaining to the use of fair value in impairment assessment and is not expected to significantly impact the Group's financial statements.

AASB 2013-4: Amendments to Australian Accounting standards - Novation of Derivatives and Continuation of Hedge Accounting (applicable for annual reporting periods commencing on or after 1 January 2014).

AASB 2013-4 makes amendments to AASB 139: Financial Instruments: Recognition and Measurement to permit the continuation of hedge accounting in circumstances where a derivative, which has been designated as a hedging instrument, is novated from one counterparty to a central counterparty as a consequence of laws or regulations. This Standard is not expected to significantly impact the Group's financial statements.

AASB 2013-5: Amendments to Australian Accounting Standards - Investment Entities (applicable for annual reporting periods commencing on or after 1 January 2014).

AASB 2013-5 amends AASB 10: Consolidated Financial Statements to define an "investment entity" and requires, with limited exceptions, that the subsidiaries of such entities be accounted for at fair value through profit or loss in accordance with AASB 9 and not be consolidated. Additional disclosures are also required. As the Group does not meet the definition of an investment entity and has no subsidiaries, this Standard is not expected to significantly impact the Group's financial statements.

Energy Technologies Limited – 2014 Annual Report

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Directors’ Declaration

The directors of Energy Technologies Limited declare that:

the financial statements and notes, as set out on pages 23 to 67, are in accordance with the Corporations Act 2001 and:
(a) comply with Accounting Standards and the Corporations Regulations 2001;
(b) comply with International Financial Reporting Standards as disclosed in Note 1; and
(c) give a true and fair view of the financial position as at 30 June 2014 and of the performance for the year ended on that date of the company and consolidated entity;
the Managing Director and Chief Financial Officer have each declared that:
(a) the financial records of the company for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001;
(b) the financial statements and notes for the financial year comply with the Accounting Standards; and
(c) the financial statements and notes for the financial year give a true and fair view;
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.

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Alfred J. Chown Acting Chairman/Managing Director

Sydney, 30 September 2014

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ASX Additional Information

Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this report is as follows. The information is current as at 31 August 2014.

(a) Distribution of equity securities

The number of shareholders, by size of holding, in each class of share are:

Ordinary shares

	Number of holders Number of shares
1 - 1,000	103 59,966
1,001 - 5,000	258 630,991
5,001 - 10,000	115 856,297
10,001 - 100,000	190 7,046,016
100,001 and over	137 215,935,193
	803 224,528,463

The number of shareholders holding less than a marketable parcel of
	629 5,450,453
shares are:

(b) Twenty largest shareholders

The names of the twenty largest holders of quoted shares are:

No
Name
1
A.J. Chown
2
Richlake Pty Ltd
3
Electric Super Cats P/L - BAWD Holdings
4
Patricia N Vagg & Michael D Butcherine
5
Zurich Square Investments Limited
6
Jaspero Pty Ltd
7
Richcreek Pty Ltd – GA & CJ Ferguson S/F A/C
8
Anthony C Wilson
9
Brendon A Park
10
Peter Dulhunty
11
Edmund Lacis
12
Gregory R. Knoke - The Knoke Super Fund A/C
13
Alex Hill
14
Philip Dulhunty Pty Ltd
15
The Western Division Proprietary Group
16
Philip W Dulhunty
17
JP Morgan Nominees Australia Limited
18
Preen Holdings Pty Ltd – Preen Employees Super
Fund A/C
19
Martin Thomas
20
Forsyth Barr Custodians Ltd

No. of shares
%
38,160,691
17.00%
13,838,235
6.16%
12,600,000
5.61%
10,486,187
4.67%
9,498,375
4.23%
8,916,667
3.97%
7,133,704
3.18%
5,800,000
2.58%
5,310,194
2.37%
5,300,103
2.36%
5,103,286
2.27%
5,085,945
2.27%
4,548,582
2.03%
4,500,000
2.00%
4,250,000
1.89%
3,628,468
1.62%
3,322,709
1.48%
3,291,470
1.47%
2,686,946
1.20%
2,577,723
1.15%
156,039,285
69.51%

Energy Technologies Limited – 2014 Annual Report

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ASX Additional Information (Cont’d)

(c) Substantial shareholders

The number of shares held by substantial shareholders are:

	Number of Shares
A.J. Chown	38,160,691
Richlake Pty Ltd	13,838,235
Electric Super Cats Pty Ltd	12,600,000

(d) Voting rights

All ordinary shares (whether fully paid or not) carry one vote per share without restriction.

AI assistant

ENERGY TECHNOLOGIES LIMITED — Annual Report 2014

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