ENERGY TECHNOLOGIES LIMITED — Annual Report 2015

Aug 31, 2015

Appendix 4E Preliminary final report

APPENDIX 4E

Preliminary final report

1. Company Details

Name of entity

ENERGY TECHNOLOGIES LIMITED

ABN or equivalent company reference Financial year ended (‘current period’) 38 002679469 30 June 2015 2. Results for announcement to the market	ABN or equivalent company reference Financial year ended (‘current period’) 38 002679469 30 June 2015 2. Results for announcement to the market	Financial year ended (‘previous period’) 30 June2014 $A'000	Financial year ended (‘previous period’) 30 June2014 $A'000
2.1 Revenues from operating activities 2.2 Profit from operating activities after tax attributable to members 2.3 Profit for the period attributable to members	Down 10% to 12,915 Up 56% to (430) Up 56% to (430)
2.4**Dividends **	Amountper security		Franked amountper security
Final dividend	NIL		NIL
Interimdividend	NIL		NIL
2.5 Record date for determining entitlements to the dividend	Not applicable
2.6 Brief explanation of any of the figures in 2.1 to 2.4 necessary to enable the figures to be understood: Energy Technologies Limited (EGY) has reported a consolidated loss for the year after tax and minority of $429,959 (FY2014 loss of $987,407). The FY2015 results include a loss after tax of $1,054,574 (FY2014 loss of $1,013,458) reported by subsidiary Bambach Wires and Cables Pty Ltd (BWC). There will be further discussion of the result below.

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3. Details of Individual and Total Dividends

		Date dividend is payable	Amount per security	Franked amount per security at 30% tax	Amount per security of foreign source dividend
	Final dividend:Current year Previous year		-¢ -¢	-¢ -¢	-¢ -¢
	Interim dividend:Current year		-¢ -¢	-¢ -¢	-¢ -¢
	Previous year

Total dividend per security (interim plus final)

Ordinary securities Preference securities	Current year	Previous year
	-¢ -¢	-¢ -¢

4. Dividend reinvestment plan

Details of any dividend reinvestment plans in operation: There is no dividend reinvestment plan in place.

The last date for the receipt of an election notice for participation in any dividend or distribution reinvestment plan: Not applicable

5. Statement of retained earnings

	Accumulated losses at the beginning of the financial year Net profit/(loss) attributable to members Accumulated losses at the end of the **financial year **	Current period - $A'000	Previous corresponding period-$A'000
		(6,213) (430) (6,643)	(5,226) (987) (6,213)

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6.1 Net Tangible Asset backing	Current period		Previous corresponding period
Net tangible asset backing per ordinary security	(0.08c)		0.26c
6.2 Earnings per security (EPS)	Current period	Previous corresponding period
Basic EPS (cents) Net profit / (loss) after tax for the period attributable to members ($’000s) Weighted average number of ordinary securities	(0.19c)	(0.5c)
	(430)	(987)
	224,528,463	197,890,174

7. Details of entities over which control has been gained or lost during the period

• 7.1 A Name of entity No entities were acquired during the period 7.2 A Date from which control was gained 7.3 A Where material to an understanding of the report – the contribution of such entities to the reporting entity’s profit from operating activities during the period and the profit or loss of such entities during the whole of the previous corresponding period

• 7.1 B Name of entities No entities were disposed of during the period 7.2 B Date from which control was gained / lost 7.3 B Where material to an understanding of the report – the contribution of such entities to the reporting entity’s profit from operating activities during the period and the profit or loss of such entities during the whole of the previous corresponding period

8. Details of Associates and Joint Ventures:

Name of entity	Percentage holding
Dulhunty Poles Pty Ltd	36%

8.1 Where material to an understanding of the report - aggregate share of profits (losses) of these entities, details of contributions to net profit for each of these entities, and with comparative figures for each of these disclosures for the previous corresponding period:

EGY has fully impaired its investment in Dulhunty Poles Pty Ltd (DPPL).

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9 - Comments by directors

EGY continues to report a loss in FY2015 but improved in comparison with last year’s results (FY2015 loss of $429,960; FY2014 loss of $987,407). The parent entity continues to reduce costs and has again reported a profit after tax for FY2015 of $670,195 (FY2014 profit of $94,676) after a further final reduction in BWC vendor liability of $1,139,039. Bambach Wires and Cables Pty Ltd (BWC) reported a loss after tax of $1,054,574 (FY2014 loss $1,013,458)

BWC continues to be impacted from the general down turn in sector-wide trading conditions. Overall BWC revenue from operations has decreased to $11,650,278 from previous $13,911,667. However margins have improved, overheads have been cut and the impact of new product range and a lower Australian Dollar is expected to improve trading results in FY2016. Included in FY2015 revenue is a further $843,040 R&D Grant (FY2014 R&D Grant revenue $1,201,822) which partially recovered the significant research and development expense undertaken by BWC in new product development, cable projects and testing.

10. This report is based on accounts to which one of the following applies.

� The accounts have been � The accounts have been audited. subject to review. � The accounts are in the � The accounts have not yet process of being audited been audited or reviewed. or subject to review.

1. Description of likely dispute or qualification if the accounts have not yet been audited or subject to review or are in the process of being audited or subjected to review:

2. Description of dispute or qualification if the accounts have been audited or subject to review:

Sign here:

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Print name: Alfred Chown Managing Director

Date: 31 August 2015

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ENERGY TECHNOLOGIES LIMITED

CONSOLIDATED INCOME STATEMENT

For the year ended 30 June 2015

Notes Sale of goods 2a Cost of sales Gross profit Rendering of services 2a Other revenue 2b Marketing expenses Occupancy expenses Administrative expenses Borrowing costs 3 Depreciation and amortisation expenses 3 Other expenses LOSS FOR THE YEAR BEFORE INCOME TAX Income tax benefit (expense) LOSS FOR THE YEAR AFTER INCOME TAX LOSS ATTRIBUTABLE TO MINORITY INTEREST LOSS ATTRIBUTABLE TO MEMBERS OF ENERGY TECHNOLOGIES LIMITED	CONSOLIDATED 2015 2014 $’000 $’000 10,764 12,659 (8,208) (10,222) 2,556 2,437 43 51 2,108 1,590 (52) (44) (530) (470) (3,633) (3,963) (635) (266) (232) (236) (117) (147) (492) (1,048) 16 (8) (476) (1,056) 46 69 (430) (987)	CONSOLIDATED 2015 2014 $’000 $’000 10,764 12,659 (8,208) (10,222) 2,556 2,437 43 51 2,108 1,590 (52) (44) (530) (470) (3,633) (3,963) (635) (266) (232) (236) (117) (147) (492) (1,048) 16 (8) (476) (1,056) 46 69 (430) (987)
		2,437 51 1,590 (44) (470) (3,963) (266) (236) (147)
		(1,048) (8)
		(1,056) 69
		(987)

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ENERGY TECHNOLOGIES LIMITED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended 30 June 2015

PROFIT/(LOSS) FOR THE YEAR OTHER COMPREHENSIVE INCOME FOR THE PERIOD 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 difference on foreign exchange relating to minorities (b) Items that will not be reclassified to profit or loss: Revaluation of Plant and Equipment to fair value TOTAL OTHER COMPREHENSIVE INCOME (LOSS) TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO: Members of the parent entity Minority equity interest	CONSOLIDATED 2015 2014 $’000 $’000 (476) (1,056) (4) 4 (4) 4 - 931 (8) 939 (484) (117) (434) (52) (50) (65) (484) (117)	CONSOLIDATED 2015 2014 $’000 $’000 (476) (1,056) (4) 4 (4) 4 - 931 (8) 939 (484) (117) (434) (52) (50) (65) (484) (117)
		939
		(117)
		(52) (65)
		(117)

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ENERGY TECHNOLOGIES LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2015

Notes CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Financial assets Other TOTAL CURRENT ASSETS NON-CURRENT ASSETS Property, plant and equipment Intangibles Deferred tax assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Financial liabilities Provisions TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Financial liabilities Other non-current liabilities Provisions TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 5 Reserves Accumulated losses Parent interests Minority interests TOTAL EQUITY	CONSOLIDATED 2015 2014 $’000 $’000 99 66 2,892 3,400 3,503 2,936 - 5 361 256 6,855 6,663 2,024 2,191 290 10 224 208 2,538 2,409 9,393 9,072 3,256 3,726 2,526 2,826 565 546 6,347 7,098 2,904 835 - 521 35 26 2,939 1,382 9,286 8,480 107 592 8,374 8,374 (1,050) (1,045) (6,643) (6,213) 681 1,116 (574) (524) 107 592	CONSOLIDATED 2015 2014 $’000 $’000 99 66 2,892 3,400 3,503 2,936 - 5 361 256 6,855 6,663 2,024 2,191 290 10 224 208 2,538 2,409 9,393 9,072 3,256 3,726 2,526 2,826 565 546 6,347 7,098 2,904 835 - 521 35 26 2,939 1,382 9,286 8,480 107 592 8,374 8,374 (1,050) (1,045) (6,643) (6,213) 681 1,116 (574) (524) 107 592
		6,663
		2,191 10 208
		2,409
		9,072
		3,726 2,826 546
		7,098
		835 521 26
		1,382
		8,480
		592
		8,374 (1,045) (6,213)
		1,116 (524)
		592

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ENERGY TECHNOLOGIES LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY As at 30 June 2015

Balance at 1 July 2013 Comprehensive income Loss for the year Other comprehensive income for the year Total comprehensive income for the year Transactions with owners, in their capacity as owners, and other transfers Equity contributions Shares issued in lieu of directors fees Total transaction with owners, in their capacity as owners, and other transfers Balance at 30 June 2014 Comprehensive income Loss for the year Other comprehensive income for the year Total comprehensive income for the year Transactions with owners, in their capacity as owners, and other transfers Equity contributions Shares issued in lieu of directors fees Total transaction with owners, in their capacity as owners, and other transfers Balance at 30 June 2015	Issued Reserves Accumulated Minority Total Capital Losses Interest $ $ $ $ $ 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
	- (429,960) (45,579) (475,539) (4,522) - (4,521) (9,043)
	- (4,522) (429,960) (50,100) (484,582)
	- - - - - - - - - -
	- - - - -
	8,374,278 (1,049,776) (6,643,452) (573,930) 107,120

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ENERGY TECHNOLOGIES LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 30 June 2015

Notes CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Interest received Borrowing costs NET CASH OUTFLOWS FROM OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of property, plant and equipment Purchases of property, plant and equipment Purchases of intangible development assets Proceeds from sale of available for sale assets Payment for subsidiary, net of cash acquired NET CASH FLOWS USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Proceeds of share issue Proceeds of issue of convertible notes Proceeds from borrowings Repayment of borrowings Loans from directors NET CASH INFLOWS FROM FINANCING ACTIVITIES NET INCREASE (DECREASE) IN CASH HELD Add: Opening cash brought forward Effect of exchange rate fluctuations on the balances of cash held in foreign currencies CLOSING CASH CARRIED FORWARD	CONSOLIDATED 2015 2014 $’000 $’000 12,081 12,400 (13,357) (13,531) 4 1 (635) (266) (1,907) (1,396) 23 7 (97) (120) (284) - 6 - (200) (260) (552) (373) - 638 2,100 700 874 729 (525) (540) 38 240 2,487 1,767 28 (2) 66 68 5 - 99 66	CONSOLIDATED 2015 2014 $’000 $’000 12,081 12,400 (13,357) (13,531) 4 1 (635) (266) (1,907) (1,396) 23 7 (97) (120) (284) - 6 - (200) (260) (552) (373) - 638 2,100 700 874 729 (525) (540) 38 240 2,487 1,767 28 (2) 66 68 5 - 99 66
		(1,396)
		7 (120) - - (260)
		(373)
		638 700 729 (540) 240
		1,767
		(2) 68 -
		66

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ENERGY TECHNOLOGIES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2015

1. BASIS OF PREPARATION

a) Basis of preparation

The preliminary final report does not include all the notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.

The preliminary final report should be read in conjunction with the half-year financial report of Energy Technologies Limited as at 31 December 2014. It is also recommended that the financial report be considered together with any public announcements made by Energy Technologies Limited and its controlled entities during the year ended 30 June 2015 in accordance with the continuous disclosure requirements arising under the Corporations Act 2001 .

This preliminary final report has been prepared in accordance with the requirements of the Australian Securities Exchange listing rules.

This preliminary final report does not constitute the full financial report for the year ended 30 June 2015.

b) Statement of compliance

Compliance with Australian Accounting Standards ensures that the financial statements and notes comply with International Financial Reporting Standards issued by the IASB.

c) Going Concern

The consolidated entity incurred a loss after tax of $429,959 including a one-off gain from vendor liability reduction of $1,139,039 (2014:$ 987,407 after including a one-off gain from vendor liability reduction of $224,546) and incurred negative cashflows from operations of $1,906,573 (2014:$1,396,202) for the year ended 30 June 2015. Furthermore, there was a reduction in sales revenue from the prior year of 15%. Sales Revenues were negatively impacted by the decline in mining investment and related projects. To combat the impact of the mining downturn the company has embarked on increasing its non-mining range of cable products and to this end has brought two new product lines to market and has another three lines undergoing development and testing. It is expected that these new offerings will reverse the decline experienced in sales and indeed generate a significant improvement in overall revenues.

These matters give rise to a significant 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:

(a) achieving cash flow positive trading operations from its existing business;

(b) continued financial support from its current financiers;

(c) raising further funding over the ensuing 12 months ( underway); and

(d) obtaining noteholder approval for rescheduling of the 2016 maturity date of $2.8 million of convertible note.

Management have prepared a cash flow projection for the period to 30 September 2016 that supports the ability of the consolidated entity to continue as a going concern. The FY2016 budget on which the cash flow projection is based forecasts a 24% increase in sales revenues for FY2016 from the FY2015 actual year, and the cash flow projection also assumes new investment of $350,000 to enhance working capital.

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ENERGY TECHNOLOGIES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2015

c) Going Concern (Cont’d)

The July 2015 monthly sales fell short of budget by 30% but based on unfilled July orders and job quotes submitted ( new quotes for July rose 54% year on year) the Directors expect this to be timing difference only which will be made good in subsequent months. The Directors are still confident of achieving the FY2016 sales budget including expected sales from tendering to existing major suppliers and contractors, expected to win major project works with NSW and later Western Australia and Victoria with respect to announced infrastructure projects. Apart from the introduction of new products into both existing and new market segments, The company has embarked on an upgrade of its manufacturing capabilities. The Business Plan of the company calls for the installation of new equipment that will cut existing manufacturing costs by between 10-15% and simultaneously expand the size of cables able to be manufactured. The company has sought and is in the process of obtaining investment funds for this exercise.

Directors are in discussion with potential investors and their advisors and pursuant to those advices are confident of raising the necessary investment funds and obtaining the necessary approvals to extend the convertible notes maturity date. The Directors believe the consolidated entity will continue as a going concern and it is appropriate to prepare these financial statements on that basis.

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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ENERGY TECHNOLOGIES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2015

2. REVENUES FROM OPERATIONS a) Revenue from operations - Sale of goods - Services revenue b) Other revenues from operations - Foreign exchange gains on unhedged transactions - R&D Grant - Management fees - Finance revenue - Reduction in liability for acquisition of subsidiary - Other income Total other revenues from operations Total revenues from operations 3. EXPENSES Included in the determination of net profit / (loss) before tax from continuing operations are the following expenses. Depreciation and amortisation of: non-current assets Plant and equipment Building and leasehold improvements Furniture, fixtures and fittings Motor vehicles Computer equipment Intangibles Total depreciation and amortisation of non-current assets Borrowing costs expensed: Borrowing expense Interest expense Superannuation contributions Operating lease rental expense: Minimum lease payments		CONSOLIDATED 2015 2014 $’000 $’000 10,764 12,659 43 51 10,807 12,710 86 9 843 1,202 - 61 34 75 1,139 225 6 18 2,108 1,590 12,915 14,300 203 160 3 5 2 8 14 19 6 40 4 4	CONSOLIDATED 2015 2014 $’000 $’000 10,764 12,659 43 51 10,807 12,710 86 9 843 1,202 - 61 34 75 1,139 225 6 18 2,108 1,590 12,915 14,300 203 160 3 5 2 8 14 19 6 40 4 4
			12,710
			9 1,202 61 75 225 18
			1,590
			14,300
			160 5 8 19 40 4
		232 100 535 635 374 869	236 - 266 266 371 843

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ENERGY TECHNOLOGIES LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2015

4. STATEMENT OF CASH FLOWS Reconciliation of the net profit / (loss) after tax to the net cash flows from operations Net Profit / (Loss) from operating activities after income tax Add / (less) Non-cash items Depreciation of non-current assets Amortisation of intangible assets Unrealised foreign exchange movements Reduction in liability for acquisition of subsidiary Non-operating cash flow cash items Loss on sale of assets Shares issued in lieu of directors fees Changes in assets and liabilities (Increase) / decrease in inventories (Increase) / decrease in trade and other receivables (Decrease) / Increase in payables (Increase) / decrease in deferred tax asset (Increase) / decrease in other-current assets Net movement in provisions for employee entitlements Net cash from / (used in) operating activities	CONSOLIDATED 2015 2014 $’000 $’000 (476) (1,056) 228 232 4 4 85 8 (1,139) (224) 12 3 - 19 (566) 78 507 (1,689) (469) 1,103 (16) 8 (105) 102 28 16 (1,907) (1,396)	CONSOLIDATED 2015 2014 $’000 $’000 (476) (1,056) 228 232 4 4 85 8 (1,139) (224) 12 3 - 19 (566) 78 507 (1,689) (469) 1,103 (16) 8 (105) 102 28 16 (1,907) (1,396)
		(1,396)

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ENERGY TECHNOLOGIES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2015

5. CONTRIBUTED EQUITY

Issued capital 224,528,463 (224,528,463 – 2014) ordinary shares fully paid

CONSOLIDATED	CONSOLIDATED
2015	2014
$	$
8,374,278	8,374.278

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.

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ENERGY TECHNOLOGIES LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2015

6. Segment Reporting

Primary reporting - Business segments

	Energy/Energy	Energy/Energy	Investment	Investment	Total
	Infrastructure
	2015	2014	2015	2014	2015	2014
	$’000	$’000	$’000	$’000	$’000	$’000
Revenue	11,732	13,994	1,183	306	12,915	14,300
Segment result before income tax	(910)	(872)	418	(176)	(492)	(1,048)
Income tax benefit (expense)	16	(8)	-	-	16	(8)

The group’s primary business segment is Energy/Energy Infrastructure products.

Secondary reporting - Geographic segments

	Asia Australia Eliminations Total
Revenue Assets Other segment information Acquisition of property, plant and equipment , intangibles and others Acquisition of intangibles and other non current assets	2015 $’000 2014 $’000 2015 $’000 2014 $’000 2015 $’000 2014 $’000 2015 $’000 2014 $’000 1 16 12,914 14,284 - - 12,915 14,300 105 106 12,656 13,345 (3,368) (4,379) 9,393 9,072
	- - 97 120 - - 97 120 - - 284 - - - 284 -

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ENERGY TECHNOLOGIES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2015

7. SUBSEQUENT EVENTS

There has not arisen since the end of the financial period any matter of circumstance which, in the opinion of the directors of the Company, significantly affects the operation of the Company, the results of those operations, or the state of affairs of the Company in subsequent financial years.

Compliance statement

1. Compliance with Australian Accounting Standards ensures that the financial statements and notes comply with International Financial Reporting Standards issued by the IASB.

2. 2 This preliminary report, and the accounts upon which the report is based (if separate), use the same accounting policies.

3. 3

4. This preliminary report does give a true and fair view of the matters disclosed.

5. 4 The accounts are in the process of being audited.

6. 5 The entity has a formally constituted audit committee.

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Sign here:

Print name: Alfred Chown Managing Director

Date: 31 August 2015

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